Illinois General Assembly - Full Text of SB0041
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Full Text of SB0041  100th General Assembly



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1    AN ACT concerning finance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Procurement Code is amended by
5changing Sections 20-60, 25-45, and 40-25 as follows:
6    (30 ILCS 500/20-60)
7    Sec. 20-60. Duration of contracts.
8    (a) Maximum duration. A contract, other than a contract
9entered into pursuant to the State University Certificates of
10Participation Act, may be entered into for any period of time
11deemed to be in the best interests of the State but not
12exceeding 10 years inclusive, beginning January 1, 2010, of
13proposed contract renewals. The length of a lease for real
14property or capital improvements shall be in accordance with
15the provisions of Section 40-25. The length of energy
16conservation program contracts or energy savings contracts or
17leases shall be in accordance with the provisions of Section
1825-45. A contract for bond or mortgage insurance awarded by the
19Illinois Housing Development Authority, however, may be
20entered into for any period of time less than or equal to the
21maximum period of time that the subject bond or mortgage may
22remain outstanding.
23    (b) Subject to appropriation. All contracts made or entered



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1into shall recite that they are subject to termination and
2cancellation in any year for which the General Assembly fails
3to make an appropriation to make payments under the terms of
4the contract.
5    (c) The chief procurement officer shall file a proposed
6extension or renewal of a contract with the Procurement Policy
7Board prior to entering into any extension or renewal if the
8cost associated with the extension or renewal exceeds $249,999.
9The Procurement Policy Board may object to the proposed
10extension or renewal within 30 calendar days and require a
11hearing before the Board prior to entering into the extension
12or renewal. If the Procurement Policy Board does not object
13within 30 calendar days or takes affirmative action to
14recommend the extension or renewal, the chief procurement
15officer may enter into the extension or renewal of a contract.
16This subsection does not apply to any emergency procurement,
17any procurement under Article 40, or any procurement exempted
18by Section 1-10(b) of this Code. If any State agency contract
19is paid for in whole or in part with federal-aid funds, grants,
20or loans and the provisions of this subsection would result in
21the loss of those federal-aid funds, grants, or loans, then the
22contract is exempt from the provisions of this subsection in
23order to remain eligible for those federal-aid funds, grants,
24or loans, and the State agency shall file notice of this
25exemption with the Procurement Policy Board prior to entering
26into the proposed extension or renewal. Nothing in this



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1subsection permits a chief procurement officer to enter into an
2extension or renewal in violation of subsection (a). By August
31 each year, the Procurement Policy Board shall file a report
4with the General Assembly identifying for the previous fiscal
5year (i) the proposed extensions or renewals that were filed
6with the Board and whether the Board objected and (ii) the
7contracts exempt from this subsection.
8(Source: P.A. 95-344, eff. 8-21-07; 96-15, eff. 6-22-09;
996-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the
10effective date of changes made by P.A. 96-795); 96-920, eff.
117-1-10; 96-1478, eff. 8-23-10.)
12    (30 ILCS 500/25-45)
13    Sec. 25-45. Energy conservation program contracts; energy
14savings contracts or leases.
15    (a) For the purposes of this Section, an "energy savings
16contract or lease" means a contract or lease for an
17improvement, repair, alteration, betterment, equipment,
18fixture, or furnishing that is designed to reduce energy
19consumption or operating costs, and that includes an agreement
20that payments, except obligations on termination of the
21contract or lease before its expiration, shall be made over
22time and that savings are guaranteed to the extent practicable
23to pay for the cost of the improvement, repair, alteration,
24betterment, equipment, fixture, or furnishing.
25    (b) State purchasing officers may enter into energy



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1conservation program contracts or energy savings contracts or
2leases that provide for utility cost savings. Notwithstanding
3any other law to the contrary, energy savings contracts or
4leases may include an alternative financing or lease to
5purchase option.
6    (c) Energy conservation program contracts or energy
7savings contracts and leases may be entered into for a period
8of time deemed to be in the best interest of the State but not
9exceeding 15 years inclusive of proposed contract or lease
11    (d) The chief procurement officer shall promulgate and
12adopt rules for the implementation of this Section.
13(Source: P.A. 90-572, eff. date - See Sec. 99-5.)
14    (30 ILCS 500/40-25)
15    Sec. 40-25. Length of leases.
16    (a) Maximum term. Leases shall be for a term not to exceed
1710 years inclusive, beginning January, 1, 2010, of proposed
18contract renewals and shall include a termination option in
19favor of the State after 5 years. The length of energy
20conservation program contracts or energy savings contracts or
21leases shall be in accordance with the provisions of Section
23    (b) Renewal. Leases may include a renewal option. An option
24to renew may be exercised only when a State purchasing officer
25determines in writing that renewal is in the best interest of



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1the State and notice of the exercise of the option is published
2in the appropriate volume of the Procurement Bulletin at least
360 calendar days prior to the exercise of the option.
4    (c) Subject to appropriation. All leases shall recite that
5they are subject to termination and cancellation in any year
6for which the General Assembly fails to make an appropriation
7to make payments under the terms of the lease.
8    (d) Holdover. Beginning January 1, 2010, no lease may
9continue on a month-to-month or other holdover basis for a
10total of more than 6 months. Beginning July 1, 2010, the
11Comptroller shall withhold payment of leases beyond this
12holdover period.
13(Source: P.A. 98-1076, eff. 1-1-15.)
14    Section 10. The Illinois Municipal Code is amended by
15adding Division 13 to Article 8 as follows:
16    (65 ILCS 5/Art. 8 Div. 13 heading new)

18    (65 ILCS 5/8-13-5 new)
19    Sec. 8-13-5. Definitions. As used in this Article:
20    "Assignment agreement" means an agreement between a
21transferring unit and an issuing entity for the conveyance of
22all or part of any revenues or taxes received by the
23transferring unit from a State entity.



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1    "Conveyance" means an assignment, sale, transfer, or other
3    "Deposit account" means a designated escrow account
4established by an issuing entity at a trust company or bank
5having trust powers for the deposit of transferred receipts
6under an assignment agreement.
7    "Issuing entity" means (i) a corporation, trust or other
8entity that has been established for the limited purpose of
9issuing obligations for the benefit of a transferring unit, or
10(ii) a bank or trust company in its capacity as trustee for
11obligations issued by such bank or trust company for the
12benefit of a transferring unit.
13    "State entity" means the State Comptroller, the State
14Treasurer, or the Illinois Department of Revenue.
15    "Transferred receipts" means all or part of any revenues or
16taxes received from a State entity that have been conveyed by a
17transferring unit under an assignment agreement.
18    "Transferring unit" means a home rule municipality located
19in the State.
20    (65 ILCS 5/8-13-10 new)
21    Sec. 8-13-10. Assignment of receipts.
22    (a) Any transferring unit which receives revenues or taxes
23from a State entity may (to the extent not prohibited by any
24applicable statute, regulation, rule, or agreement governing
25the use of such revenues or taxes) authorize, by ordinance, the



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1conveyance of all or any portion of such revenues or taxes to
2an issuing entity. Any conveyance of transferred receipts
3shall: (i) be made pursuant to an assignment agreement in
4exchange for the net proceeds of obligations issued by the
5issuing entity for the benefit of the transferring unit and
6shall, for all purposes, constitute an absolute conveyance of
7all right, title, and interest therein; (ii) not be deemed a
8pledge or other security interest for any borrowing by the
9transferring unit; (iii) be valid, binding, and enforceable in
10accordance with the terms thereof and of any related
11instrument, agreement, or other arrangement, including any
12pledge, grant of security interest, or other encumbrance made
13by the issuing entity to secure any obligations issued by the
14issuing entity for the benefit of the transferring unit; and
15(iv) not be subject to disavowal, disaffirmance, cancellation,
16or avoidance by reason of insolvency of any party, lack of
17consideration, or any other fact, occurrence, or State law or
18rule. On and after the effective date of the conveyance of the
19transferred receipts, the transferring unit shall have no
20right, title or interest in or to the transferred receipts
21conveyed and the transferred receipts so conveyed shall be the
22property of the issuing entity to the extent necessary to pay
23the obligations issued by the issuing entity for the benefit of
24the transferring unit, and shall be received, held, and
25disbursed by the issuing entity in a trust fund outside the
26treasury of the transferring unit. An assignment agreement may



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1provide for the periodic reconveyance to the transferring unit
2of amounts of transferred receipts remaining after the payment
3of the obligations issued by the issuing entity for the benefit
4of the transferring unit.
5    (b) In connection with any conveyance of transferred
6receipts, the transferring unit is authorized to direct the
7applicable State entity to deposit or cause to be deposited any
8amount of such transferred receipts into a deposit account in
9order to secure the obligations issued by the issuing entity
10for the benefit of the transferring unit. Where the
11transferring unit states that such direction is irrevocable,
12the direction shall be treated by the applicable State entity
13as irrevocable with respect to the transferred receipts
14described in such direction. Each State entity shall comply
15with the terms of any such direction received from a
16transferring unit and shall execute and deliver such
17acknowledgments and agreements, including escrow and similar
18agreements, as the transferring unit may require to effectuate
19the deposit of transferred receipts in accordance with the
20direction of the transferring unit.
21    (c) Not later than the date of issuance by an issuing
22entity of any obligations secured by collections of transferred
23receipts, a certified copy of the ordinance authorizing the
24conveyance of the right to receive the transferred receipts,
25together with executed copies of the applicable assignment
26agreement and the agreement providing for the establishment of



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1the deposit account, shall be filed with the State entity
2having custody of the transferred receipts.
3    (65 ILCS 5/8-13-11 new)
4    Sec. 8-13-11. Liens for obligations.
5    (a) As used in this Section, "statutory lien" has the
6meaning given to that term under 11 U.S.C. 101(53) of the
7federal Bankruptcy Code.
8    (b) Obligations issued by an issuing entity shall be
9secured by a statutory lien on the transferred receipts
10received, or entitled to be received, by the issuing entity
11that are designated as pledged for such obligations. The
12statutory lien shall automatically attach from the time the
13obligations are issued without further action or authorization
14by the issuing entity or any other entity, person, governmental
15authority, or officer. The statutory lien shall be valid and
16binding from the time the obligations are executed and
17delivered without any physical delivery thereof or further act
18required, and shall be a first priority lien unless the
19obligations, or documents authorizing the obligations or
20providing a source of payment or security for those
21obligations, shall otherwise provide.
22    The transferred receipts received or entitled to be
23received shall be immediately subject to the statutory lien
24from the time the obligations are issued, and the statutory
25lien shall automatically attach to the transferred receipts



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1(whether received or entitled to be received by the issuing
2entity) and be effective, binding, and enforceable against the
3issuing entity, the transferring unit, the State entity, the
4State of Illinois, and their agents, successors, and
5transferees, and creditors, and all others asserting rights
6therein or having claims of any kind in tort, contract, or
7otherwise, irrespective of whether those parties have notice of
8the lien and without the need for any physical delivery,
9recordation, filing, or further act.
10    The statutory lien imposed by this Section is automatically
11released and discharged with respect to amounts of transferred
12receipts reconveyed to the transferring unit pursuant to
13Section 8-13-10 of this Code, effective upon such reconveyance.
14    (c) The statutory lien provided in this Section is separate
15from and shall not affect any special revenues lien or other
16protection afforded to special revenue obligations under the
17federal Bankruptcy Code.
18    (65 ILCS 5/8-13-15 new)
19    Sec. 8-13-15. Pledges and agreements of the State. The
20State of Illinois pledges to and agrees with each transferring
21unit and issuing entity that the State will not limit or alter
22the rights and powers vested in the State entities by this
23Article with respect to the disposition of transferred receipts
24so as to impair the terms of any contract, including any
25assignment agreement, made by the transferring unit with the



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1issuing entity or any contract executed by the issuing entity
2in connection with the issuance of obligations by the issuing
3entity for the benefit of the transferring unit until all
4requirements with respect to the deposit by such State entity
5of transferred receipts for the benefit of such issuing entity
6have been fully met and discharged. In addition, the State
7pledges to and agrees with each transferring unit and each
8issuing entity that the State will not limit or alter the basis
9on which the transferring unit's share or percentage of
10transferred receipts is derived, or the use of such funds, so
11as to impair the terms of any such contract. Each transferring
12unit and issuing entity is authorized to include these pledges
13and agreements of the State in any contract executed and
14delivered as described in this Article. In no way shall the
15pledge and agreements of the State be interpreted to construe
16the State as a guarantor of any debt or obligation subject to
17an assignment agreement under this Division.
18    (65 ILCS 5/8-13-20 new)
19    Sec. 8-13-20. Home rule. A home rule unit may not enter
20into assignment agreements in a manner inconsistent with the
21provisions of this Article. This Section is a limitation under
22subsection (i) of Section 6 of Article VII of the Illinois
23Constitution on the concurrent exercise by home rule units of
24powers and functions exercised by the State.
25    Section 99. Effective date. This Act takes effect upon



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1becoming law.