SB0041ham001 100TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 5/23/2017

10000SB0041ham001 LRB100 04924 MLM 26755 a

AMENDMENT TO SENATE BILL 41

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

"Section 5. The Illinois Procurement Code is amended by changing Sections 20-60, 25-45, and 40-25 as follows:

(30 ILCS 500/20-60)

Sec. 20-60. Duration of contracts.

(a) Maximum duration. A contract, other than a contract entered into pursuant to the State University Certificates of Participation Act, may be entered into for any period of time deemed to be in the best interests of the State but not exceeding 10 years inclusive, beginning January 1, 2010, of proposed contract renewals. The length of a lease for real property or capital improvements shall be in accordance with the provisions of Section 40-25. The length of energy conservation program contracts or energy savings contracts or leases shall be in accordance with the provisions of Section 25-45. A contract for bond or mortgage insurance awarded by the Illinois Housing Development Authority, however, may be entered into for any period of time less than or equal to the maximum period of time that the subject bond or mortgage may remain outstanding.

(b) Subject to appropriation. All contracts made or entered into shall recite that they are subject to termination and cancellation in any year for which the General Assembly fails to make an appropriation to make payments under the terms of the contract.

(c) The chief procurement officer shall file a proposed extension or renewal of a contract with the Procurement Policy Board prior to entering into any extension or renewal if the cost associated with the extension or renewal exceeds $249,999. The Procurement Policy Board may object to the proposed extension or renewal within 30 calendar days and require a hearing before the Board prior to entering into the extension or renewal. If the Procurement Policy Board does not object within 30 calendar days or takes affirmative action to recommend the extension or renewal, the chief procurement officer may enter into the extension or renewal of a contract. This subsection does not apply to any emergency procurement, any procurement under Article 40, or any procurement exempted by Section 1-10(b) of this Code. If any State agency contract is paid for in whole or in part with federal-aid funds, grants, or loans and the provisions of this subsection would result in the loss of those federal-aid funds, grants, or loans, then the contract is exempt from the provisions of this subsection in order to remain eligible for those federal-aid funds, grants, or loans, and the State agency shall file notice of this exemption with the Procurement Policy Board prior to entering into the proposed extension or renewal. Nothing in this subsection permits a chief procurement officer to enter into an extension or renewal in violation of subsection (a). By August 1 each year, the Procurement Policy Board shall file a report with the General Assembly identifying for the previous fiscal year (i) the proposed extensions or renewals that were filed with the Board and whether the Board objected and (ii) the contracts exempt from this subsection.

(Source: P.A. 95-344, eff. 8-21-07; 96-15, eff. 6-22-09; 96-795, eff. 7-1-10 (see Section 5 of P.A. 96-793 for the effective date of changes made by P.A. 96-795); 96-920, eff. 7-1-10; 96-1478, eff. 8-23-10.)

(30 ILCS 500/25-45)

Sec. 25-45. Energy conservation program contracts; energy savings contracts or leases.

(a) For the purposes of this Section, an "energy savings contract or lease" means a contract or lease for an improvement, repair, alteration, betterment, equipment, fixture, or furnishing that is designed to reduce energy consumption or operating costs, and that includes an agreement that payments, except obligations on termination of the contract or lease before its expiration, shall be made over time and that savings are guaranteed to the extent practicable to pay for the cost of the improvement, repair, alteration, betterment, equipment, fixture, or furnishing.

(b) State purchasing officers may enter into energy conservation program contracts or energy savings contracts or leases that provide for utility cost savings. Notwithstanding any other law to the contrary, energy savings contracts or leases may include an alternative financing or lease to purchase option.

(c) Energy conservation program contracts or energy savings contracts and leases may entered into for a period of time deemed to be in the best interest of the State but not exceeding 15 years inclusive of proposed contract or lease renewals.

(d) The chief procurement officer shall promulgate and adopt rules for the implementation of this Section.

(Source: P.A. 90-572, eff. date - See Sec. 99-5.)

(30 ILCS 500/40-25)

Sec. 40-25. Length of leases.

(a) Maximum term. Leases shall be for a term not to exceed 10 years inclusive, beginning January, 1, 2010, of proposed contract renewals and shall include a termination option in favor of the State after 5 years. The length of energy conservation program contracts or energy savings contracts or leases shall be in accordance with the provisions of Section 25-45.

(b) Renewal. Leases may include a renewal option. An option to renew may be exercised only when a State purchasing officer determines in writing that renewal is in the best interest of the State and notice of the exercise of the option is published in the appropriate volume of the Procurement Bulletin at least 60 calendar days prior to the exercise of the option.

(c) Subject to appropriation. All leases shall recite that they are subject to termination and cancellation in any year for which the General Assembly fails to make an appropriation to make payments under the terms of the lease.

(d) Holdover. Beginning January 1, 2010, no lease may continue on a month-to-month or other holdover basis for a total of more than 6 months. Beginning July 1, 2010, the Comptroller shall withhold payment of leases beyond this holdover period.

(Source: P.A. 98-1076, eff. 1-1-15.)

Section 10. The Illinois Municipal Code is amended by adding Division 13 to Article 8 as follows:

(65 ILCS 5/Art. 8 Div. 13 heading new)

DIVISION 13. ASSIGNMENT OF RECEIPTS

(65 ILCS 5/8-13-5 new)

Sec. 8-13-5. Definitions. As used in this Article:

"Assignment agreement" means an agreement between a transferring unit and an issuing entity for the conveyance of all or part of any revenues or taxes received by the transferring unit from a State entity.

"Conveyance" means an assignment, sale, transfer, or other conveyance.

"Deposit account" means a designated escrow account established by an issuing entity at a trust company or bank having trust powers for the deposit of transferred receipts under an assignment agreement.

"Issuing entity" means (i) a corporation, trust or other entity that has been established for the limited purpose of issuing obligations for the benefit of a transferring unit, or (ii) a bank or trust company in its capacity as trustee for obligations issued by such bank or trust company for the benefit of a transferring unit.

"State entity" means the State Comptroller, the State Treasurer, or the Illinois Department of Revenue.

"Transferred receipts" means all or part of any revenues or taxes received from a State entity that have been conveyed by a transferring unit under an assignment agreement.

"Transferring unit" means a home rule municipality located in the State.

(65 ILCS 5/8-13-10 new)

Sec. 8-13-10. Assignment of receipts.

(a) Any transferring unit which receives revenues or taxes from a State entity may (to the extent not prohibited by any applicable statute, regulation, rule, or agreement governing the use of such revenues or taxes) authorize, by ordinance, the conveyance of all or any portion of such revenues or taxes to an issuing entity. Any conveyance of transferred receipts shall: (i) be made pursuant to an assignment agreement in exchange for the net proceeds of obligations issued by the issuing entity for the benefit of the transferring unit and shall, for all purposes, constitute an absolute conveyance of all right, title, and interest therein; (ii) not be deemed a pledge or other security interest for any borrowing by the transferring unit; (iii) be valid, binding, and enforceable in accordance with the terms thereof and of any related instrument, agreement, or other arrangement, including any pledge, grant of security interest, or other encumbrance made by the issuing entity to secure any obligations issued by the issuing entity for the benefit of the transferring unit; and (iv) not be subject to disavowal, disaffirmance, cancellation, or avoidance by reason of insolvency of any party, lack of consideration, or any other fact, occurrence, or State law or rule. On and after the effective date of the conveyance of the transferred receipts, the transferring unit shall have no right, title or interest in or to the transferred receipts conveyed and the transferred receipts so conveyed shall be the property of the issuing entity to the extent necessary to pay the obligations issued by the issuing entity for the benefit of the transferring unit, and shall be received, held, and disbursed by the issuing entity in a trust fund outside the treasury of the transferring unit. An assignment agreement may provide for the periodic reconveyance to the transferring unit of amounts of transferred receipts remaining after the payment of the obligations issued by the issuing entity for the benefit of the transferring unit.

(b) In connection with any conveyance of transferred receipts, the transferring unit is authorized to direct the applicable State entity to deposit or cause to be deposited any amount of such transferred receipts into a deposit account in order to secure the obligations issued by the issuing entity for the benefit of the transferring unit. Where the transferring unit states that such direction is irrevocable, the direction shall be treated by the applicable State entity as irrevocable with respect to the transferred receipts described in such direction. Each State entity shall comply with the terms of any such direction received from a transferring unit and shall execute and deliver such acknowledgments and agreements, including escrow and similar agreements, as the transferring unit may require to effectuate the deposit of transferred receipts in accordance with the direction of the transferring unit.

(c) Not later than the date of issuance by an issuing entity of any obligations secured by collections of transferred receipts, a certified copy of the ordinance authorizing the conveyance of the right to receive the transferred receipts, together with executed copies of the applicable assignment agreement and the agreement providing for the establishment of the deposit account, shall be filed with the State entity having custody of the transferred receipts.

(65 ILCS 5/8-13-11 new)

Sec. 8-13-11. Liens for obligations.

(a) As used in this Section, "statutory lien" has the meaning given to that term under 11 U.S.C. 101(53) of the federal Bankruptcy Code.

(b) Obligations issued by an issuing entity shall be secured by a statutory lien on the transferred receipts received, or entitled to be received, by the issuing entity that are designated as pledged for such obligations. The statutory lien shall automatically attach from the time the obligations are issued without further action or authorization by the issuing entity or any other entity, person, governmental authority, or officer. The statutory lien shall be valid and binding from the time the obligations are executed and delivered without any physical delivery thereof or further act required, and shall be a first priority lien unless the obligations, or documents authorizing the obligations or providing a source of payment or security for those obligations, shall otherwise provide.

The transferred receipts received or entitled to be received shall be immediately subject to the statutory lien from the time the obligations are issued, and the statutory lien shall automatically attach to the transferred receipts (whether received or entitled to be received by the issuing entity) and be effective, binding, and enforceable against the issuing entity, the transferring unit, the State entity, the State of Illinois, and their agents, successors, and transferees, and creditors, and all others asserting rights therein or having claims of any kind in tort, contract, or otherwise, irrespective of whether those parties have notice of the lien and without the need for any physical delivery, recordation, filing, or further act.

The statutory lien imposed by this Section is automatically released and discharged with respect to amounts of transferred receipts reconveyed to the transferring unit pursuant to Section 8-13-10 of this Code, effective upon such reconveyance.

(c) The statutory lien provided in this Section is separate from and shall not affect any special revenues lien or other protection afforded to special revenue obligations under the federal Bankruptcy Code.

(65 ILCS 5/8-13-15 new)

Sec. 8-13-15. Pledges and agreements of the State. The State of Illinois pledges to and agrees with each transferring unit and issuing entity that the State will not limit or alter the rights and powers vested in the State entities by this Article with respect to the disposition of transferred receipts so as to impair the terms of any contract, including any assignment agreement, made by the transferring unit with the issuing entity or any contract executed by the issuing entity in connection with the issuance of obligations by the issuing entity for the benefit of the transferring unit until all requirements with respect to the deposit by such State entity of transferred receipts for the benefit of such issuing entity have been fully met and discharged. In addition, the State pledges to and agrees with each transferring unit and each issuing entity that the State will not limit or alter the basis on which the transferring unit's share or percentage of transferred receipts is derived, or the use of such funds, so as to impair the terms of any such contract. Each transferring unit and issuing entity is authorized to include these pledges and agreements of the State in any contract executed and delivered as described in this Article. In no way shall the pledge and agreements of the State be interpreted to construe the State as a guarantor of any debt or obligation subject to an assignment agreement under this Division.

(65 ILCS 5/8-13-20 new)

Sec. 8-13-20. Home rule. A home rule unit may not enter into assignment agreements in a manner inconsistent with the provisions of this Article. This Section is a limitation under subsection (i) of Section 6 of Article VII of the Illinois Constitution on the concurrent exercise by home rule units of powers and functions exercised by the State.

Section 99. Effective date. This Act takes effect upon becoming law.".