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90_SB0747ham002
LRB9001850KDdvam01
1 AMENDMENT TO SENATE BILL 747
2 AMENDMENT NO. . Amend Senate Bill 747 by replacing
3 the title with the following:
4 "AN ACT concerning State finance."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 1. Short title. This Act may be cited as the
8 Real Estate Leasing Act.
9 Section 5. Applicability.
10 (a) All leases of real property for use of State
11 agencies, authorities, boards, commissions, departments,
12 institutions, bodies politic, and all other administrative
13 units or outgrowths of the executive branch of State
14 government except the Constitutional officers, the State
15 Board of Education, and the State colleges and universities
16 and their governing bodies shall be procured in accordance
17 with the provisions of this Act.
18 (b) Notwithstanding anything to the contrary in this
19 Act, the purchase of real estate in fee simple or less than
20 fee simple, including by lease purchase, is not subject to
21 this Act, but shall be purchased in accordance with law and
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1 rules established outside this Act.
2 (c) For purposes of this Act, "Director" shall mean the
3 Director of Central Management Services.
4 Section 10. Leases. The Director shall have the
5 authority to procure leases for real property.
6 Section 15. Method of source selection.
7 (a) Request for information. Except as provided in
8 subsections (b) and (c) of this Section, all leases of real
9 property shall be awarded by a request for information
10 process in accordance with Section 20 of this Act.
11 (b) Other methods. A request for information process
12 need not be used and the procurement may be negotiated in the
13 following situations:
14 (1) renewal or extension of existing leases,
15 (2) temporary space as defined by rule,
16 (3) specialized space available at only one
17 location and parking,
18 (4) emergency, when there exists a threat to public
19 health or public safety, or when immediate expenditure is
20 necessary for repairs to State property in order to
21 protect against further loss of or damage to State
22 property, to prevent or minimize serious disruption in
23 State services, or to ensure the integrity of State
24 records. Emergency procurements shall be made with as
25 much competition as is practical under the circumstances
26 and shall be reported in the manner prescribed in
27 paragraph (3) of subsection (a) of Section 6 of the
28 Illinois Purchasing Act.
29 (c) Leases with governmental units. Leases with other
30 governmental units may be negotiated without using the
31 request for information process when deemed by the Director
32 to be in the best interest of the State.
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1 Section 20. Request for information.
2 (a) Contents. A request for information shall be issued
3 and shall include:
4 (1) the type of property to be leased;
5 (2) the proposed uses of the property;
6 (3) the duration of the lease;
7 (4) the preferred location of the property; and
8 (5) a general description of the configuration
9 desired.
10 (b) Public notice. Public notice of the request for
11 information shall be published in a newspaper of general
12 circulation in each community where the using agency is
13 seeking space. The advertisement shall be published at least
14 14 days before the deadline for submission of responses to
15 the request for information. As an alternative, the Director
16 may authorize publication in electronic form.
17 (c) Response. The response to the request for
18 information shall consist of written information sufficient
19 to show that the respondent can meet minimum criteria set
20 forth in the request. The Director may enter into
21 discussions with respondents for the purpose of clarifying
22 State needs and the information supplied by the respondents.
23 On the basis of the information supplied and discussions, if
24 any, the Director shall make a written determination
25 identifying the responses that meet the minimum criteria set
26 forth in the request for information. Negotiations shall be
27 entered into with all qualified respondents for the purpose
28 of securing a lease that is in the best interest of the
29 State. A written report of the negotiations shall be
30 retained in the lease files and shall include the reasons for
31 the final selection. All leases shall be reduced to writing
32 and filed in accordance with law.
33 Section 25. Other selection procedures. Nothing in this
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1 Act shall prohibit the Director from using more restrictive
2 competitive selection procedures.
3 Section 30. Rent without occupancy. Except when deemed
4 by the Director to be in the best interest of the State, no
5 State agency may incur rental obligations before occupying
6 the space rented.
7 Section 35. Local site preferences. Upon the request of
8 the chief executive officer of a unit of local government,
9 leasing preferences may be given to sites located in
10 enterprise zones, tax increment districts, or redevelopment
11 districts when deemed to be in the best interest of the
12 State.
13 Section 40. Purchase option. For initial leases of all
14 space in a free-standing building, the Director shall
15 consider whether a purchase option exerciseable by the State
16 would be appropriate. The Director's determination shall be
17 documented in the lease file.
18 Section 80. The Civil Administrative Code of Illinois is
19 amended by changing Section 67.02 as follows:
20 (20 ILCS 405/67.02) (from Ch. 127, par. 63b13.2)
21 Sec. 67.02. (a) To lease or purchase office and storage
22 space, buildings, land and other facilities for all State
23 agencies, authorities, boards, commissions, departments,
24 institutions, bodies politic and all other administrative
25 units or outgrowths of the executive branch of State
26 government except the Constitutional officers, the State
27 Board of Education and the State colleges and universities
28 and their governing bodies. However, before leasing or
29 purchasing any office or storage space, buildings, land or
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1 other facilities in any municipality the Department shall
2 survey the existing State-owned and State-leased property to
3 make a determination of need. Such leases shall be for a
4 term not to exceed 5 years, except that such leases may
5 contain a renewal clause subject to acceptance by the State
6 after that date or an option to purchase. Such purchases
7 shall be made through contracts which may provide for the
8 title to the property to transfer immediately to the State or
9 a trustee or nominee for the benefit of the State and which
10 shall: provide for the consideration to be paid in
11 installments to be made at stated intervals during a certain
12 term not to exceed 30 years from the date of the contract and
13 may provide for the payment of interest on the unpaid balance
14 at a rate that does not exceed a rate determined by adding 3
15 percentage points to the annual yield on United States
16 Treasury obligations of comparable maturity as most recently
17 published in the Wall Street Journal at the time such
18 contract is signed. Such leases and purchase contracts shall
19 be and shall recite that they are subject to termination and
20 cancellation in any year for which the General Assembly fails
21 to make an appropriation to pay the rent or purchase
22 installments payable under the terms of the lease or purchase
23 contract. Additionally such purchase contract shall specify
24 that title to the office and storage space, buildings, land
25 and other facilities being acquired under such a contract
26 shall revert to the Seller in the event of the failure of
27 the General Assembly to appropriate suitable funds.
28 However, this limitation on the term of such leases does not
29 apply to leases to and with the Illinois Building Authority,
30 as provided for in the Act enacted by the Seventy-second
31 General Assembly entitled the Building Authority Act, which
32 leases to and with said Authority may be entered into for a
33 term not to exceed 30 years and shall be and shall recite
34 that they are subject to termination and cancellation in any
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1 year for which the General Assembly fails to make an
2 appropriation to pay the rent payable under the terms of such
3 lease. These limitations do not apply where the lease or
4 purchase contract contains a provision limiting the liability
5 for the payment of the rentals or installments thereof solely
6 to funds received from the Federal government.
7 (b) To lease from an airport authority office, aircraft
8 hangar and service buildings constructed upon a public
9 airport under the Airport Authorities Act for the use and
10 occupancy of the State Department of Transportation, which
11 lease may be entered into for a term not to exceed 30 years.
12 (c) To establish training programs for teaching State
13 leasing procedures and practices to new employees of the
14 Department and to keep all employees of the Department
15 informed about current leasing practices and developments in
16 the real estate industry.
17 (d) To enter into an agreement with a municipality or
18 county to construct, remodel or convert a structure for the
19 purposes of its serving as a correctional institution or
20 facility pursuant to paragraph (c) of Section 3-2-2 of the
21 Unified Code of Corrections.
22 (e) To enter into an agreement with a private
23 individual, trust, partnership or corporation or a
24 municipality or other unit of local government, when
25 authorized to do so by the Department of Corrections, whereby
26 such individual, trust, partnership or corporation or
27 municipality or other unit of local government will
28 construct, remodel or convert a structure for the purposes of
29 its serving as a correctional institution or facility and
30 then lease such structure to the Department for the use of
31 the Department of Corrections. A lease entered into pursuant
32 to the authority granted in this subsection shall be for a
33 term not to exceed 30 years, but may grant to the State the
34 option to purchase the structure outright.
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1 Such leases shall be and shall recite that they are
2 subject to termination and cancellation in any year for which
3 the General Assembly fails to make an appropriation to pay
4 the rent payable under the terms of the lease.
5 (f) On and after September 17, 1983, the powers granted
6 to the Department under this Section shall be exercised
7 exclusively by the Department and no other State agency may
8 concurrently exercise any such power, unless specifically
9 authorized otherwise by a later enacted law. This subsection
10 is not intended to impair any contract existing as of
11 September 17, 1983.
12 However, no lease for more than 10,000 square feet of
13 space shall be executed unless the Director in consultation
14 with the Executive Director of the Capital Development Board
15 has certified that leasing is in the best interest of the
16 State, considering programmatic requirements, availability of
17 vacant State-owned space, the cost-benefits of purchasing or
18 constructing new space and other criteria as he shall
19 determine. The Director shall not permit multiple leases for
20 less than 10,000 square feet to be executed in order to evade
21 this provision.
22 (g) To develop and implement, in cooperation with the
23 Interagency Energy Conservation Committee, a system for
24 evaluating energy consumption in facilities leased by the
25 Department, and to develop energy consumption standards for
26 use in evaluating prospective lease sites.
27 (h) (1) After the effective date of this amendatory Act
28 of 1997, the Department shall not enter into an agreement
29 for the installment purchase or lease purchase of
30 buildings, land, or facilities unless:
31 (A) the using agency certifies to the
32 Department that the agency reasonably expects the
33 building, land, or facilities being considered for
34 purchase will meet a permanent space need;
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1 (B) the building or facilities will be
2 substantially occupied by State agencies after
3 purchase (or after acceptance in the case of a build
4 to suit);
5 (C) the building or facilities shall be in new
6 or like new condition and have a remaining economic
7 life exceeding the term of the contract;
8 (D) no structural or other major building
9 component or system shall have a remaining economic
10 life of less than 10 years;
11 (E) the building, land or facilities:
12 (i) is free of any identifiable
13 environmental hazard, or
14 (ii) is subject to a management plan,
15 provided by the seller and acceptable to the
16 State, to address the known environmental
17 hazard;
18 (F) the building, land, or facilities satisfy
19 applicable handicap accessibility and applicable
20 building codes; and
21 (G) the State's cost to lease purchase or
22 installment purchase the building, land, or
23 facilities is less than the cost to lease space of
24 comparable quality, size, and location over the
25 lease purchase or installment purchase term.
26 (2) The Department shall establish the methodology
27 for comparing lease costs to the costs of installment or
28 lease purchases. The cost comparison shall take into
29 account all relevant cost factors including, but not
30 limited to, debt service, operating and maintenance
31 costs, insurance and risk costs, real estate taxes,
32 reserves for replacement and repairs, security costs, and
33 utilities. Such methodology shall also provide:
34 (A) that the comparison will be made using
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1 level payment plans; and
2 (B) that a purchase price must not exceed the
3 fair market value of the buildings, land, or
4 facilities, and that such price must be
5 substantiated by an appraisal or by a competitive
6 selection process.
7 (3) If the Department intends to enter into an
8 installment purchase or lease purchase agreement for
9 buildings, land, or facilities under circumstances that
10 do not satisfy the conditions specified by this Section,
11 it must issue a notice to the Secretary of the Senate and
12 the Clerk of the House. Such notice shall contain (i)
13 specific details of the State's proposed purchase,
14 including the amounts, purposes, and financing terms;
15 (ii) a specific description of how the proposed purchase
16 varies from the procedures set forth in this Section; and
17 (iii) a specific justification, signed by the Director,
18 of why it is in the State's best interests to proceed
19 with the purchase. The Department may not proceed with
20 such an installment purchase or lease purchase agreement
21 if, within 60 calendar days after delivery of the notice,
22 the General Assembly, by joint resolution, disapproves
23 the transaction. Delivery may take place on a day and at
24 an hour when the Senate and House are not in session so
25 long as the offices of Secretary and Clerk are open to
26 receive the notice. In determining the 60 day period
27 within which the General Assembly must act, the day on
28 which delivery is made to the Senate and House shall not
29 be counted. If delivery of the notice to the 2 houses
30 occurs on different days, the 60 day period shall begin
31 on the day following the later delivery.
32 (4) On or before February 15 of each year, the
33 Department shall submit an annual report to the Director
34 of the Bureau of the Budget and the General Assembly
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1 regarding installment purchases or lease purchases of
2 buildings, land, or facilities that were entered into
3 during the preceding calendar year. The report shall
4 include a summary statement of the aggregate amount of
5 the State's obligations under such purchases; specific
6 details pertaining to each purchase, the amounts,
7 purposes, and financing terms and payment schedule for
8 each purchase; and any other matter that the Department
9 deems advisable.
10 The requirement for reporting to the General
11 Assembly shall be satisfied by filing copies of the
12 report with the Auditor General, the Speaker, the
13 Minority Leader, and the Clerk of the House of
14 Representatives and the President, the Minority Leader,
15 and the Secretary of the Senate, the Chairs of the
16 Appropriations Committees, and the Legislative Research
17 Unit, as required by Section 3.1 of the General Assembly
18 Organization Act, and filing such additional copies with
19 the State Government Report Distribution Center for the
20 General Assembly as is required under paragraph (t) of
21 Section 7 of the State Library Act.
22 (Source: P.A. 87-852.)
23 Section 90. The State Finance Act is amended by changing
24 Section 9 as follows:
25 (30 ILCS 105/9) (from Ch. 127, par. 145)
26 Sec. 9. (a) No disbursements from appropriations shall
27 be made for rental or purchase of office or other space,
28 buildings or land, except in pursuance of a written lease or
29 purchase contract entered into by the proper State authority
30 and the owner or authorized agent of the property. Such lease
31 shall not exceed 5 years unless a greater term is authorized
32 by law, but such lease may contain a renewal clause subject
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1 to acceptance by the State after that date or an option to
2 purchase. Such purchase contract may provide for the title to
3 the property to transfer immediately to the State or a
4 trustee or nominee for the benefit of the State and for the
5 consideration to be paid in installments to be made at stated
6 intervals during a certain term not to exceed 30 years from
7 the date of the contract and may provide for the payment of
8 interest on the unpaid balance at a rate that does not exceed
9 a rate determined by adding 3 percentage points to the annual
10 yield on United States Treasury obligations of comparable
11 maturity as most recently published in the Wall Street
12 Journal at the time such contract is signed. Such lease or
13 purchase contract shall be and shall recite that it is
14 subject to termination and cancellation in any year for which
15 the General Assembly fails to make an appropriation to pay
16 the rent or purchase installments payable under the terms of
17 such lease or purchase contract. Additionally such purchase
18 contract shall specify that title to the office and storage
19 space, buildings, land and other facilities being acquired
20 under such a contract shall revert to the Seller in the event
21 of the failure of the General Assembly to appropriate
22 suitable funds. This limitation does not apply to leases for
23 office or other space, buildings, or land, where such leases
24 or purchase contracts contain a provision limiting the
25 liability for the payment of the rental or installments
26 thereunder solely to funds received from the Federal
27 Government. A copy of each such lease or purchase contract
28 shall be filed in the office of the Secretary of State within
29 15 days after execution.
30 (b) The State, through the Bureau of the Budget for real
31 property and improvements and personal property related
32 thereto, and through the Department of Central Management
33 Services for personal property, may issue or cause to be
34 issued certificates of participation or similar instruments
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1 representing the right to receive a proportionate share in
2 lease-purchase or installment purchase payments to be made by
3 or for the benefit of one or more State agencies for the
4 acquisition or improvement of real or personal property, or
5 refinancing of such property or payment of expenses related
6 to the issuance. The total principal amount of the
7 certificates issued or caused to be issued pursuant to this
8 Section for acquisition of real property shall not exceed
9 $125,000,000. Certificates issued or caused to be issued
10 pursuant to this Section shall mean certificates heretofore
11 or hereafter signed and delivered by the State or signed and
12 delivered by a trustee or fiscal agent pursuant to the
13 written direction of the State. Nothing in this Section
14 shall (i) prohibit or restrict the issuance of or affect the
15 validity or enforceability of certificates heretofore or
16 hereafter signed and delivered by any lessor or seller or an
17 assignee of either under a lease purchase or installment
18 purchase contract with the State or signed and delivered by a
19 trustee or fiscal agent pursuant to the written direction of
20 such lessor or seller or an assignee of either, or (ii)
21 affect the validity or enforceability of any such lease
22 purchase or installment purchase contract.
23 (1) Certificates may be issued or caused to be issued
24 pursuant to this Section if the Director of the Bureau of the
25 Budget determines that it is financially desirable and in the
26 best interest of the State to use certificates of
27 participation to finance or refinance installment purchase or
28 lease purchase contracts entered into by State departments,
29 agencies, or universities or to refund or advance refund
30 prior issuances of certificates of participation or similar
31 instruments including certificates of participation issued
32 under this Section and certificates of participation issued
33 before the effective date of this amendatory Act of 1997 the
34 State determines that the use of certificates of
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1 participation is financially desirable and in the best
2 interest of the State. The State, through the Bureau of the
3 Budget for real property and improvements and personal
4 property related thereto, and through the Department of
5 Central Management Services for personal property, may enter
6 into arrangements for issuing, securing, and marketing
7 certificates of participation, including agreements, trust
8 indentures and other arrangements necessary or desirable to
9 carry out the foregoing, and any reserve funds or other
10 amounts securing the certificates may be held and invested as
11 provided in such agreements and trust indentures.
12 (2) Certificates of participation or similar instruments
13 issued or caused to be issued pursuant to this Section and
14 the underlying lease purchase lease-purchase or installment
15 purchase contracts shall not constitute or create debt of the
16 State as defined in the Illinois Constitution, nor a
17 contractual obligation in excess of the amounts appropriated
18 therefor, and the State shall have no continuing obligation
19 to appropriate money for said payments or other obligations
20 due under the lease purchase lease-purchase or installment
21 purchase contracts; provided, however, that the Governor
22 shall include in the annual budget request to the General
23 Assembly for each relevant fiscal year appropriations
24 sufficient to permit payment of all amounts which will be due
25 and payable during the fiscal year with respect to
26 certificates of participation issued or caused to be issued
27 pursuant to this Section.
28 (3) The maximum term of certificates of participation
29 issued to finance personal property shall be 10 years. The
30 maximum term of certificates of participation to finance the
31 acquisition or improvement of real property shall be 25
32 years. In no event, however, shall the term exceed the
33 expected useful life of the property being financed, with the
34 term calculated from the date of delivery, with respect to
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1 personal property, and the date of occupancy, with respect to
2 real property.
3 (4) Ten days before the issuance of certificates of
4 participation under this Section, the Director of the Bureau
5 of the Budget for real property and improvements and personal
6 property related thereto and the Department of Central
7 Management Services for personal property shall transmit to
8 the Executive Director of the Economic and Fiscal Commission,
9 to the Auditor General, to the President of the Senate, the
10 Minority Leader of the Senate, the Speaker of the House of
11 Representatives, and the Minority Leader of the House of
12 Representatives, to the Chairs of the Appropriations
13 Committees, and to the Secretary of the Senate and Clerk of
14 the House a notice providing the following information
15 pertaining to the property to be financed by the
16 certificates:
17 (1) The agency and program procuring the property.
18 (2) A brief description of the property.
19 (3) The estimated cost of the property if purchased
20 outright.
21 (4) The estimated terms of the financings.
22 (5) The estimated total lease or installment
23 purchase payments for property.
24 (6) The estimated lease or installment purchase
25 payments by fiscal year for the current fiscal year and
26 the next 5 fiscal years.
27 (7) The anticipated source of funds to make lease
28 or installment purchase payments.
29 (8) Those items not anticipated to be financed upon
30 enactment of the budget for the fiscal year.
31 A copy of the Preliminary Official Statement shall also
32 be transmitted to the Executive Director of the Economic and
33 Fiscal Commission, to the Auditor General, to the President
34 of the Senate, the Minority Leader of the Senate, the Speaker
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1 of the House of Representatives, the Minority Leader of the
2 House of Representatives, to the Chairs of the Appropriations
3 Committees, and to the Secretary of the Senate and Clerk of
4 the House at the time it is submitted for publication. After
5 the issuance of the certificates, a copy of the final
6 official statement accompanying the issuance shall be filed
7 with the Economic and Fiscal Commission, with the Auditor
8 General, with the President of the Senate, the Minority
9 Leader of the Senate, the Speaker of the House of
10 Representatives, and the Minority Leader of the House of
11 Representatives, with the Chairs of the Appropriations
12 Committees, and with the Secretary of the Senate and Clerk of
13 the House.
14 (5) The Bureau of the Budget may, based on a cost
15 benefit analysis, issue general obligation bonds to finance
16 or refinance installment purchase or lease purchase contracts
17 entered into by State departments, agencies, or universities
18 or to refund or advance refund prior issuances of
19 certificates of participation or similar instruments,
20 including certificates of participation issued under this
21 Section and certificates of participation issued before the
22 effective date of this amendatory Act of 1997.
23 (6) (3) The Department of Central Management Services
24 may promulgate rules governing its issuance and conditions of
25 use of certificates of participation and similar instruments.
26 (c) Amounts paid from appropriations for personal
27 service of any officer or employee of the State, either
28 temporary or regular, shall be considered as full payment for
29 all services rendered between the dates specified in the
30 payroll or other voucher and no additional sum shall be paid
31 to such officer or employee from any lump sum appropriation,
32 appropriation for extra help or other purpose or any
33 accumulated balances in specific appropriations, which
34 payments would constitute in fact an additional payment for
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1 work already performed and for which remuneration had already
2 been made, except that wage payments made pursuant to the
3 application of the prevailing rate principle or based upon
4 the effective date of a collective bargaining agreement
5 between the State, or a State agency and an employee group,
6 or payment of funds as an adjustment to wages paid employees
7 or officers of the State for the purpose of correcting a
8 clerical or administrative error or oversight or pursuant to
9 a backpay order issued by an appropriate State or federal
10 administrative or judicial body or officer shall not be
11 construed as an additional payment for work already
12 performed.
13 (d) Disbursements from appropriations which are subject
14 to the approval or certification of the Department of Central
15 Management Services are subject to the following
16 restrictions.
17 Payments for personal service except for positions
18 specified in all appropriation Acts shall be made in
19 conformity with schedules and amendments thereto submitted by
20 the respective officers and approved by the Department of
21 Central Management Services before becoming effective. Such
22 schedules and amendments thereto may set up groups of
23 employment showing the approximate number to be employed,
24 with fixed or minimum and maximum salary rates.
25 This Section is subject to the provisions of Section
26 9.02.
27 (Source: P.A. 86-11; 86-657; 86-1028.)".
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