HB1041 95TH GENERAL ASSEMBLY

LRB095 08926 HLH 29115 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1041

Introduced 2/8/2007, by Rep. Kevin Joyce

SYNOPSIS AS INTRODUCED:

70 ILCS 2605/8	from Ch. 42, par. 327
70 ILCS 2605/8c	from Ch. 42, par. 327c

Amends the Metropolitan Water Reclamation District Act. Provides that the District may lease certain property to others for an initial annual rental of less than 6% of the parcel's fair market value if the parcel contains a special development impediment. Provides that the initial annual rental amount shall be for the first 10 years of the lease. Provides that every lease must be awarded to the highest bidder upon free and open competitive bids. Provides that, if property is leased for an annual rental of less than 6% of the parcel's fair market value because of a special development impediment, the first redetermination of the fair market value shall not occur until the twentieth year of the lease (instead of the tenth year). Provides that the District may lease property to certain parties upon mutually agreeable terms, regardless of whether those terms comply with the provisions of the Act. Makes other changes. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning local government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Metropolitan Water Reclamation District Act is amended by changing Sections 8 and 8c as follows:

(70 ILCS 2605/8) (from Ch. 42, par. 327)

Sec. 8. Except as otherwise in this Act provided, the sanitary district may acquire by lease, purchase or otherwise within or without its corporate limits, or by condemnation within its corporate limits, any and all real and personal property, right of way and privilege that may be required for its corporate purposes. All moneys for the purchase and condemnation of any property must be paid before possession is taken, or any work done on the premises. In case of an appeal from the Court in which the condemnation proceedings are pending, taken by either party, whereby the amount of damages is not finally determined, the amount of the judgment in the court shall be deposited with the county treasurer of the county in which the judgment is rendered, subject to the payment of damages on orders signed by the judge whenever the amount of damages is finally determined.

Upon recommendation of the general superintendent and upon the approval of the board of trustees when any real or personal property, right of way or privilege or any interest therein, or any part thereof of such sanitary district is no longer required for the corporate purposes of the sanitary district it may be sold, vacated or released. Such sales, vacations, or releases may be made subject to such conditions and the retention of such interest therein as may be deemed for the best interest of such sanitary district as recommended by the general superintendent and approved by the board of trustees.

However, the sanitary district may enter into a lease of a building or a part thereof, or acquire title to a building already constructed or to be constructed, for the purpose of securing office space for its administrative corporate functions, the period of such lease not to exceed 15 years except as authorized by the provisions of Section 8b of this Act. In the event of the purchase of such property for administrative corporate functions, the sanitary district may execute a mortgage or other documents of indebtedness as may be required for the unpaid balance, to be paid in not more than 15 annual installments. Annual installments on the mortgage or annual payment on the lease shall be considered a current corporate expense of the year in which they are to be paid, and the amount of such annual installment or payment shall be included in the Annual Appropriation and Corporate Tax Levy Ordinances. Such expense may be incurred, notwithstanding the provisions, if any applicable, contained in any other Sections of this Act.

The sanitary district may dedicate to the public for highway purposes any of its real property and the dedications may be made subject to such conditions and the retention of such interests therein as considered in the best interests of the sanitary district by the board of trustees upon recommendation of the general superintendent.

The sanitary district may lease to others for any period of time, not to exceed 99 years, upon the terms as its board of trustees upon recommendation of the general superintendent may determine, any such real property, right-of-way or privilege, or any interest therein or any part thereof, which is in the opinion of the board of trustees and general superintendent of the sanitary district no longer required for its corporate purposes or which may not be immediately needed for such purposes. The leases may contain such terms and conditions, including restrictions as to permissible use of the real property, and retain such interests therein as considered in the best interests of the sanitary district by the board of trustees upon recommendation of the general superintendent. Negotiations and execution of such leases and preparatory activities in connection therewith must comply with Section 8c of this Act. The sanitary district may grant easements and permits for the use of any such real property, right-of-way, or privilege, which will not in the opinion of the board of trustees and general superintendent of the sanitary district interfere with the use thereof by the sanitary district for its corporate purposes. Such easements and permits may contain such conditions and retain such interests therein as considered in the best interests of the sanitary district by the board of trustees upon recommendation of the general superintendent.

No sales, vacations, dedications for highway purposes, or leases for periods in excess of 5 years, of the following described real estate, may be made or granted by the sanitary district without the approval in writing of the Director of Natural Resources of the State of Illinois:

All the right-of-way of the Calumet-Sag Channel of the sanitary district extending from the Little Calumet River near Blue Island, Illinois, to the right-of-way of the main channel of the sanitary district near Sag, Illinois.

Lots 1, 3, 5, 21, 30, 31, 32, 33, 46, 48, 50, 52, 88, 89, 89a, 90, 91, 130, 132, 133, those parts of Lots 134 and 139 lying northeasterly of a tract of land leased to the Corn Products Manufacturing Company from January 1, 1908, to December 31, 2006; 1000 feet of Lot 141 lying southwesterly of and adjoining the above mentioned leased tract measured parallel with the main channel of the sanitary district; Lots 166, 168, 207, 208, and part of Lot 211 lying northeasterly of a line 1500 feet southwesterly of the center line of Stephen Street, Lemont, Illinois, and parallel with said street measured parallel with said main channel; and Lot 212 of the Sanitary District Trustees Subdivision of right-of-way from the north and south center line of Section 30, Township 39 North, Range 14 East of the Third Principal Meridian, to Will County line.

That part of the right-of-way of the main channel of the sanitary district in Section 14, Township 37 North, Range 11 East of the Third Principal Meridian, lying southerly of said main channel, northerly of the Northerly Reserve Line of the Illinois and Michigan Canal, and westerly of the Center line of the old channel of the Des Plaines River.

That part of said main channel right-of-way in Section 35, Township 37 North, Range 10 East of the Third Principal Meridian, lying east of said main channel and south of a line 1,319.1 feet north of and parallel with the south line of said Section 35.

That part of said main channel right-of-way in the northeast quarter of the northwest quarter of Section 2, Township 36 North, Range 10 East of the Third Principal Meridian, lying east of said main channel.

That part of said main channel right-of-way lying south of Ninth Street in Lockport, Illinois.

Notwithstanding any other law, if any surplus real estate is located in an unincorporated territory and if that real estate is contiguous to only one municipality, 60 days before the sale of that real estate, the sanitary district shall notify in writing the contiguous municipality of the proposed sale. Prior to the sale of the real estate, the municipality shall notify in writing the sanitary district that the municipality will or will not annex the surplus real estate. If the contiguous municipality will annex such surplus real estate, then coincident with the completion of the sale of that real estate by the sanitary district, that real estate shall be automatically annexed to the contiguous municipality.

All sales of real estate by the sanitary district must be for cash, to the highest bidder upon open competitive bids, and the proceeds of the sales may be used only for the construction and equipment of sewage disposal plants, pumping stations and intercepting sewers and appurtenances thereto, the acquisition of sites and easements therefor, and the financing of the Local Government Assistance Program established under Section 9.6c.

However, the sanitary district may:

(a) Remise, release, quit claim and convey, without the approval of the Department of Natural Resources of the State of Illinois acting by and through its Director, to the United States of America without any consideration to be paid therefor, in aid of the widening of the Calumet-Sag Channel of the sanitary district by the United States of America, all those certain lands, tenements and hereditaments of every kind and nature of that portion of the established right-of-way of the Calumet-Sag Channel lying east of the east line of Ashland Avenue, in Blue Island, Illinois, and south of the center line of the channel except such portion thereof as is needed for the operation and maintenance of and access to the controlling works lock of the sanitary district;

(b) Without the approval of the Department of Natural Resources of the State of Illinois acting by and through its Director, give and grant to the United States of America without any consideration to be paid therefor the right, privilege and authority to widen the Calumet-Sag Channel and for that purpose to enter upon and use in the work of such widening and for the disposal of spoil therefrom all that part of the right-of-way of the Calumet-Sag Channel owned by the sanitary district lying south of the center line of the Calumet-Sag Channel from its connection with the main channel of the sanitary district to the east line of Ashland Avenue in Blue Island, Illinois;

(c) Make alterations to any structure made necessary by such widening and to construct, reconstruct or otherwise alter the existing highway bridges of the sanitary district across the Calumet-Sag Channel;

(d) Give and grant to the United States of America without any consideration to be paid therefor the right to maintain the widened Calumet-Sag Channel without the occupation or use of or jurisdiction over any property of the sanitary district adjoining and adjacent to such widened channel;

(e) Acquire by lease, purchase, condemnation or otherwise, whatever land, easements or rights of way, not presently owned by it, that may be required by the United States of America in constructing the Calumet-Sag Navigation Project, as approved in Public Law 525, 79th Congress, Second Session as described in House Document No. 677 for widening and dredging the Calumet-Sag Channel, in improving the Little Calumet River between the eastern end of the Sag Channel and Turning Basin No. 5, and in improving the Calumet River between Calumet Harbor and Lake Calumet;

(f) Furnish free of cost to the United States all lands, easements, rights-of-way and soil disposal areas necessary for the new work and for subsequent maintenance by the United States;

(g) Provide for the necessary relocations of all utilities.

Whatever land acquired by the sanitary district may thereafter be determined by the Board of Trustees upon recommendation of the general superintendent as not being needed by the United States for the purposes of constructing and maintaining the Calumet-Sag Navigation Project as above described, shall be retained by the sanitary district for its corporate purposes, or be sold, with all convenient speed, vacated or released (but not leased) as its Board of Trustees upon recommendation of the general superintendent may determine: All sales of such real estate must be for cash, to the highest bidder upon open, competitive bids, and the proceeds of the sales may be used only for the purpose of paying principal and interest upon the bonds authorized by this Act, and if no bonds are then outstanding, for the purpose of paying principal and interest upon any general obligation bonds of the sanitary district, and for corporate purposes of the sanitary district. When the proceeds are used to pay bonds and interest, proper abatement shall be made in the taxes next extended for such bonds and interest.

(Source: P.A. 89-445, eff. 2-7-96; 89-502, eff. 6-28-96; 90-568, eff. 1-1-99; 90-690, eff. 7-31-98.)

(70 ILCS 2605/8c) (from Ch. 42, par. 327c)

Sec. 8c. Every lease of property no longer or not immediately required for corporate purposes of a sanitary district, from such district to others for a term not to exceed 99 years, in accordance with Section 8 of this Act, shall be negotiated, created and executed in the following manner:

(1) Notice of such proposed leasing shall be published for 3 consecutive weeks in a newspaper of general circulation published in such sanitary district, if any, and otherwise in the county containing such district.

(2) Prior to receipt of bids for the lease under this Section, the fair market value of every parcel of real property to be leased must be determined by 2 professional appraisers who are members of the American Institute of Real Estate Appraisers or a similar, equivalently recognized professional organization. The sanitary district acting through the general superintendent may select and engage an additional appraiser for such determination of fair market value. Every appraisal report must contain an affidavit certifying the absence of any collusion involving the appraiser and relating to the lease of such property.

(3) No Such lease must be awarded to the highest responsible bidder (including established commercial or industrial concerns and financially responsible individuals) upon free and open competitive bids, except that no lease may be awarded unless the bid of such highest responsible bidder provides for an annual rental payment to the sanitary district of at least 6% of the parcel's fair market value determined under this Section, provided however, if the sanitary district determines that a parcel contains a special development impediment, defined as any condition that constitutes a material impediment to the development or lease of a parcel, and includes, but is not limited to: environmental contamination, obsolescence, or advanced disrepair of improvements or structures, or accumulation of large quantities of non-indigenous materials, the sanitary district may establish a minimum acceptable initial annual rental of less than 6% of the parcel's fair market value for the initial 10 years of the lease. In no event will the annual rental payment for each 10-year period after the initial 10 years of the lease be less than the 6% of the parcel's fair market value determined under this Section. Every lease must be awarded to the highest responsible bidder (including established commercial or industrial concerns and financially responsible individuals) upon free and open competitive bids. In determining the responsibility of any bidder, the Sanitary District may consider, in addition to financial responsibility, any past records of transactions with the bidder and any other pertinent factors, including but not limited to, the bidder's performance or past record with respect to any lease, use, occupancy, or trespass of Sanitary District or other lands`.

(4) Prior to acceptance of the bid of the highest responsible bidder and before execution of the lease the bidder shall submit to the board of commissioners and general superintendent, for incorporation in the lease, a detailed plan and description of improvements to be constructed upon the leased property, the time within which the improvements will be completed, and the intended uses of the leased property. If there is more than one responsible bid, the board of commissioners may authorize and direct the general superintendent to solicit from the 2 highest responsible bidders written amendments to their prior bids, increasing their rental bid proposal by at least 5% in excess of their prior written bid, or otherwise amending the financial terms of their bid so as to maximize the financial return to the sanitary district during the term of the proposed lease. Upon the general superintendent's tentative agreement with one or more amended bids, the bids may be submitted to the board of commissioners with the recommendation of the general superintendent for acceptance of one or rejection of all. The amendments may not result in a diminution of the terms of the transaction and must result in an agreement that is equal to or greater in value than the highest responsible bid initially received.

(5) The execution of such lease must be contemporaneous to the execution by the lessee, each member of the board of commissioners and the general superintendent of an affidavit certifying the absence of any collusion involving the lessee, the members and the general superintendent and relating to such lease.

(6) No later than 30 days after the effective date of the lease, the lessee must deliver to the sanitary district a certified statement of the County Assessor, Township Assessor or the county clerk of the county wherein the property is situated that such property is presently contained in the official list of lands and lots to be assessed for taxes for the several towns or taxing districts in his county.

(7) Such lease shall provide for a fixed annual rental payment for the first year not less than 6% of the fair market value as determined under this Section and may be subject to annual adjustments based on changes in the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, or some other well known economic governmental activity index. Any lease, the term of which will extend for 15 years or more, shall provide for a redetermination of the fair market value (independent of improvements to the property subsequent to the effective date of the lease) after the initial 10 years and every 10 years thereafter, in the manner set forth in paragraph (2) of this Section, which redetermination shall be referred to as the decennial adjustment. Where the property rental is less than 6% of fair market value due to the existence of a special development impediment, the first decennial adjustment shall not occur until the twentieth year of the lease. Such said redetermination shall to be as of the first day of each succeeding 10 year period, and annual rental payments shall be adjusted so that the ratio of annual rental to fair market value shall be the same as that ratio for the first year of the preceding 10 year period. The decennial adjustment shall not exceed 100% of the rental in effect on the last day of the preceding 10-year period, except when the property rental is less than 6% of fair market value due to the existence of a special development impediment, in which case, the decennial adjustment shall not be so limited until the twentieth year of the lease. The rental payment for the first year of the new 10 year period may be subject to Consumer Price Index or other allowable index adjustments for each of the next 9 years, or until the end of the lease term if there are less than 9 years remaining.

(8) A sanitary district may require compensation to be paid in addition to rent, based on a reasonable percentage of revenues derived from a lessee's business operations on the leasehold premises or subleases, or may require additional compensation from the lessee or any sublessee in the form of services, including but not limited to solid waste disposal; provided, however, that such additional compensation shall not be considered in determining the highest responsible bid, said highest responsible bid to be determined only on the initial annual rental payment as set forth in paragraph (3) of this Section.

(9) No assignment of such lease or sublease of such property is effective unless approved in writing by the general superintendent and the board of commissioners of the sanitary district. The District may consider, for any assignment or sublease, all pertinent factors including the assignee's or sublessee's responsibility in accordance with subparagraph (3) of this Section. The sanitary district may also condition its consent upon the redetermination of the annual rental required to be paid under any lease initially executed on or before January 1, 1983, for which the annual rent being paid thereunder is less than 6% of the current appraised fair market value of the leased property. The redetermination of any annual rental under this Section shall be consistent with the requirements of subparagraphs (2) and (3) of this Section. No assignment or sublease is effective if the assignee or sublessee is a trust constituted by real property of which the trustee has title but no power of management or control, unless the identity of the beneficiaries of the trust is revealed, upon demand, to the general superintendent and the board of commissioners of the sanitary district.

(10) Failure by the lessee to comply with a provision in the lease relating to improvements upon the leased property or any other provision constitutes grounds for forfeiture of the lease, and upon such failure the sanitary district acting through the general superintendent shall serve the lessee with a notice to terminate the lease and deliver possession of the property to the sanitary district within a particular period.

(11) If the general superintendent and the board of commissioners conclude that it would be in the public interest, said sanitary district may lease without complying with the prior provisions of this Section, in accordance with an Act concerning "Transfer of Real Estate between Municipal Corporations", approved July 2, 1925, as amended, to the following, upon such terms as may be mutually agreeable: (a) the United States of America and the State of Illinois, County of Cook, any municipal corporation, with provisions that the property is to be applied exclusively for public recreational purposes or other public purposes; (b) or any academic institution of learning which has been in existence for 5 years prior to said lease, provided that such lease limit the institution's use of the leased land to only those purposes relating to the operation of such institution's academic or physical educational programs; or (c) any lease involving land located in a county with a population of 100,000 or less and which is leased solely for agricultural or commercial recreational uses. Any lease issued in accordance with this paragraph shall contain the provisions without complying with the prior provisions of this section, upon such terms as may be mutually agreed upon, in accordance with an act concerning "Transfer of Real Estate between Municipal Corporations", approved July 2, 1925, as amended, with provisions that such property is to be applied exclusively to public recreational purposes or other public purposes and that such lease is terminable in accordance with service of a one-year notice to terminate after determination by the board of commissioners and the general superintendent that such property (or part thereof) has become essential to the corporate purposes of the sanitary district.

(Source: P.A. 92-16, eff. 6-28-01; 93-988, eff. 8-23-04.)

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