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


Rep. Barbara Flynn Currie

Filed: 5/23/2017





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2    AMENDMENT NO. ______. Amend Senate Bill 41 by replacing
3everything after the enacting clause with the following:
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



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1leases shall be in accordance with the provisions of Section
225-45. A contract for bond or mortgage insurance awarded by the
3Illinois Housing Development Authority, however, may be
4entered into for any period of time less than or equal to the
5maximum period of time that the subject bond or mortgage may
6remain outstanding.
7    (b) Subject to appropriation. All contracts made or entered
8into shall recite that they are subject to termination and
9cancellation in any year for which the General Assembly fails
10to make an appropriation to make payments under the terms of
11the contract.
12    (c) The chief procurement officer shall file a proposed
13extension or renewal of a contract with the Procurement Policy
14Board prior to entering into any extension or renewal if the
15cost associated with the extension or renewal exceeds $249,999.
16The Procurement Policy Board may object to the proposed
17extension or renewal within 30 calendar days and require a
18hearing before the Board prior to entering into the extension
19or renewal. If the Procurement Policy Board does not object
20within 30 calendar days or takes affirmative action to
21recommend the extension or renewal, the chief procurement
22officer may enter into the extension or renewal of a contract.
23This subsection does not apply to any emergency procurement,
24any procurement under Article 40, or any procurement exempted
25by Section 1-10(b) of this Code. If any State agency contract
26is paid for in whole or in part with federal-aid funds, grants,



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1or loans and the provisions of this subsection would result in
2the loss of those federal-aid funds, grants, or loans, then the
3contract is exempt from the provisions of this subsection in
4order to remain eligible for those federal-aid funds, grants,
5or loans, and the State agency shall file notice of this
6exemption with the Procurement Policy Board prior to entering
7into the proposed extension or renewal. Nothing in this
8subsection permits a chief procurement officer to enter into an
9extension or renewal in violation of subsection (a). By August
101 each year, the Procurement Policy Board shall file a report
11with the General Assembly identifying for the previous fiscal
12year (i) the proposed extensions or renewals that were filed
13with the Board and whether the Board objected and (ii) the
14contracts exempt from this subsection.
15(Source: P.A. 95-344, eff. 8-21-07; 96-15, eff. 6-22-09;
1696-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the
17effective date of changes made by P.A. 96-795); 96-920, eff.
187-1-10; 96-1478, eff. 8-23-10.)
19    (30 ILCS 500/25-45)
20    Sec. 25-45. Energy conservation program contracts; energy
21savings contracts or leases.
22    (a) For the purposes of this Section, an "energy savings
23contract or lease" means a contract or lease for an
24improvement, repair, alteration, betterment, equipment,
25fixture, or furnishing that is designed to reduce energy



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1consumption or operating costs, and that includes an agreement
2that payments, except obligations on termination of the
3contract or lease before its expiration, shall be made over
4time and that savings are guaranteed to the extent practicable
5to pay for the cost of the improvement, repair, alteration,
6betterment, equipment, fixture, or furnishing.
7    (b) State purchasing officers may enter into energy
8conservation program contracts or energy savings contracts or
9leases that provide for utility cost savings. Notwithstanding
10any other law to the contrary, energy savings contracts or
11leases may include an alternative financing or lease to
12purchase option.
13    (c) Energy conservation program contracts or energy
14savings contracts and leases may entered into for a period of
15time deemed to be in the best interest of the State but not
16exceeding 15 years inclusive of proposed contract or lease
18    (d) The chief procurement officer shall promulgate and
19adopt rules for the implementation of this Section.
20(Source: P.A. 90-572, eff. date - See Sec. 99-5.)
21    (30 ILCS 500/40-25)
22    Sec. 40-25. Length of leases.
23    (a) Maximum term. Leases shall be for a term not to exceed
2410 years inclusive, beginning January, 1, 2010, of proposed
25contract renewals and shall include a termination option in



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1favor of the State after 5 years. The length of energy
2conservation program contracts or energy savings contracts or
3leases shall be in accordance with the provisions of Section
5    (b) Renewal. Leases may include a renewal option. An option
6to renew may be exercised only when a State purchasing officer
7determines in writing that renewal is in the best interest of
8the State and notice of the exercise of the option is published
9in the appropriate volume of the Procurement Bulletin at least
1060 calendar days prior to the exercise of the option.
11    (c) Subject to appropriation. All leases shall recite that
12they are subject to termination and cancellation in any year
13for which the General Assembly fails to make an appropriation
14to make payments under the terms of the lease.
15    (d) Holdover. Beginning January 1, 2010, no lease may
16continue on a month-to-month or other holdover basis for a
17total of more than 6 months. Beginning July 1, 2010, the
18Comptroller shall withhold payment of leases beyond this
19holdover period.
20(Source: P.A. 98-1076, eff. 1-1-15.)
21    Section 10. The Illinois Municipal Code is amended by
22adding Division 13 to Article 8 as follows:
23    (65 ILCS 5/Art. 8 Div. 13 heading new)




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1    (65 ILCS 5/8-13-5 new)
2    Sec. 8-13-5. Definitions. As used in this Article:
3    "Assignment agreement" means an agreement between a
4transferring unit and an issuing entity for the conveyance of
5all or part of any revenues or taxes received by the
6transferring unit from a State entity.
7    "Conveyance" means an assignment, sale, transfer, or other
9    "Deposit account" means a designated escrow account
10established by an issuing entity at a trust company or bank
11having trust powers for the deposit of transferred receipts
12under an assignment agreement.
13    "Issuing entity" means (i) a corporation, trust or other
14entity that has been established for the limited purpose of
15issuing obligations for the benefit of a transferring unit, or
16(ii) a bank or trust company in its capacity as trustee for
17obligations issued by such bank or trust company for the
18benefit of a transferring unit.
19    "State entity" means the State Comptroller, the State
20Treasurer, or the Illinois Department of Revenue.
21    "Transferred receipts" means all or part of any revenues or
22taxes received from a State entity that have been conveyed by a
23transferring unit under an assignment agreement.
24    "Transferring unit" means a home rule municipality located
25in the State.



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1    (65 ILCS 5/8-13-10 new)
2    Sec. 8-13-10. Assignment of receipts.
3    (a) Any transferring unit which receives revenues or taxes
4from a State entity may (to the extent not prohibited by any
5applicable statute, regulation, rule, or agreement governing
6the use of such revenues or taxes) authorize, by ordinance, the
7conveyance of all or any portion of such revenues or taxes to
8an issuing entity. Any conveyance of transferred receipts
9shall: (i) be made pursuant to an assignment agreement in
10exchange for the net proceeds of obligations issued by the
11issuing entity for the benefit of the transferring unit and
12shall, for all purposes, constitute an absolute conveyance of
13all right, title, and interest therein; (ii) not be deemed a
14pledge or other security interest for any borrowing by the
15transferring unit; (iii) be valid, binding, and enforceable in
16accordance with the terms thereof and of any related
17instrument, agreement, or other arrangement, including any
18pledge, grant of security interest, or other encumbrance made
19by the issuing entity to secure any obligations issued by the
20issuing entity for the benefit of the transferring unit; and
21(iv) not be subject to disavowal, disaffirmance, cancellation,
22or avoidance by reason of insolvency of any party, lack of
23consideration, or any other fact, occurrence, or State law or
24rule. On and after the effective date of the conveyance of the
25transferred receipts, the transferring unit shall have no



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1right, title or interest in or to the transferred receipts
2conveyed and the transferred receipts so conveyed shall be the
3property of the issuing entity to the extent necessary to pay
4the obligations issued by the issuing entity for the benefit of
5the transferring unit, and shall be received, held, and
6disbursed by the issuing entity in a trust fund outside the
7treasury of the transferring unit. An assignment agreement may
8provide for the periodic reconveyance to the transferring unit
9of amounts of transferred receipts remaining after the payment
10of the obligations issued by the issuing entity for the benefit
11of the transferring unit.
12    (b) In connection with any conveyance of transferred
13receipts, the transferring unit is authorized to direct the
14applicable State entity to deposit or cause to be deposited any
15amount of such transferred receipts into a deposit account in
16order to secure the obligations issued by the issuing entity
17for the benefit of the transferring unit. Where the
18transferring unit states that such direction is irrevocable,
19the direction shall be treated by the applicable State entity
20as irrevocable with respect to the transferred receipts
21described in such direction. Each State entity shall comply
22with the terms of any such direction received from a
23transferring unit and shall execute and deliver such
24acknowledgments and agreements, including escrow and similar
25agreements, as the transferring unit may require to effectuate
26the deposit of transferred receipts in accordance with the



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1direction of the transferring unit.
2    (c) Not later than the date of issuance by an issuing
3entity of any obligations secured by collections of transferred
4receipts, a certified copy of the ordinance authorizing the
5conveyance of the right to receive the transferred receipts,
6together with executed copies of the applicable assignment
7agreement and the agreement providing for the establishment of
8the deposit account, shall be filed with the State entity
9having custody of the transferred receipts.
10    (65 ILCS 5/8-13-11 new)
11    Sec. 8-13-11. Liens for obligations.
12    (a) As used in this Section, "statutory lien" has the
13meaning given to that term under 11 U.S.C. 101(53) of the
14federal Bankruptcy Code.
15    (b) Obligations issued by an issuing entity shall be
16secured by a statutory lien on the transferred receipts
17received, or entitled to be received, by the issuing entity
18that are designated as pledged for such obligations. The
19statutory lien shall automatically attach from the time the
20obligations are issued without further action or authorization
21by the issuing entity or any other entity, person, governmental
22authority, or officer. The statutory lien shall be valid and
23binding from the time the obligations are executed and
24delivered without any physical delivery thereof or further act
25required, and shall be a first priority lien unless the



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1obligations, or documents authorizing the obligations or
2providing a source of payment or security for those
3obligations, shall otherwise provide.
4    The transferred receipts received or entitled to be
5received shall be immediately subject to the statutory lien
6from the time the obligations are issued, and the statutory
7lien shall automatically attach to the transferred receipts
8(whether received or entitled to be received by the issuing
9entity) and be effective, binding, and enforceable against the
10issuing entity, the transferring unit, the State entity, the
11State of Illinois, and their agents, successors, and
12transferees, and creditors, and all others asserting rights
13therein or having claims of any kind in tort, contract, or
14otherwise, irrespective of whether those parties have notice of
15the lien and without the need for any physical delivery,
16recordation, filing, or further act.
17    The statutory lien imposed by this Section is automatically
18released and discharged with respect to amounts of transferred
19receipts reconveyed to the transferring unit pursuant to
20Section 8-13-10 of this Code, effective upon such reconveyance.
21    (c) The statutory lien provided in this Section is separate
22from and shall not affect any special revenues lien or other
23protection afforded to special revenue obligations under the
24federal Bankruptcy Code.
25    (65 ILCS 5/8-13-15 new)



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1    Sec. 8-13-15. Pledges and agreements of the State. The
2State of Illinois pledges to and agrees with each transferring
3unit and issuing entity that the State will not limit or alter
4the rights and powers vested in the State entities by this
5Article with respect to the disposition of transferred receipts
6so as to impair the terms of any contract, including any
7assignment agreement, made by the transferring unit with the
8issuing entity or any contract executed by the issuing entity
9in connection with the issuance of obligations by the issuing
10entity for the benefit of the transferring unit until all
11requirements with respect to the deposit by such State entity
12of transferred receipts for the benefit of such issuing entity
13have been fully met and discharged. In addition, the State
14pledges to and agrees with each transferring unit and each
15issuing entity that the State will not limit or alter the basis
16on which the transferring unit's share or percentage of
17transferred receipts is derived, or the use of such funds, so
18as to impair the terms of any such contract. Each transferring
19unit and issuing entity is authorized to include these pledges
20and agreements of the State in any contract executed and
21delivered as described in this Article. In no way shall the
22pledge and agreements of the State be interpreted to construe
23the State as a guarantor of any debt or obligation subject to
24an assignment agreement under this Division.
25    (65 ILCS 5/8-13-20 new)



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1    Sec. 8-13-20. Home rule. A home rule unit may not enter
2into assignment agreements in a manner inconsistent with the
3provisions of this Article. This Section is a limitation under
4subsection (i) of Section 6 of Article VII of the Illinois
5Constitution on the concurrent exercise by home rule units of
6powers and functions exercised by the State.
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".