SB3802eng 97TH GENERAL ASSEMBLY

SB3802 Engrossed LRB097 20447 PJG 65947 b

AN ACT concerning finance.

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

Section 5. The Illinois Procurement Code is amended by changing Sections 1-15.30, 20-60, and 40-25 and by adding the heading of Article 34 and Sections 34-5, 34-10, 34-15, 34-20, 34-25, 34-30, 34-35, 34-40, 34-45, 34-50, 34-55, and 34-60 as follows:

(30 ILCS 500/1-15.30)

Sec. 1-15.30. Contract. "Contract" means all types of State agreements, including change orders and renewals, regardless of what they may be called, for the procurement, use, or disposal of supplies, services, professional or artistic services, or construction or for leases of real property, whether the State is lessor or lessee, or capital improvements, or performance contracting, or guaranteed energy savings contracts, and including master contracts, contracts for financing through use of installment or lease-purchase arrangements, renegotiated contracts, amendments to contracts, and change orders.

(Source: P.A. 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).)

(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, or guaranteed energy savings contract or a performance contract that guarantees energy or operational cost savings, 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. A guaranteed energy savings contract or performance contract shall not be entered into for a period of time exceeding 20 years, beginning July 1, 2012. The length of a lease for real property or capital improvements shall be in accordance with the provisions of Section 40-25. 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 500/40-25)

Sec. 40-25. Length of leases.

(a) Maximum term. Except for installment payment performance contracts and guaranteed energy savings contracts and performance-based lease purchase agreements, leases 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. Installment payment performance contracts and guaranteed energy savings contracts and performance-based lease purchase agreements that guarantee energy or operational cost savings shall be for a term not to exceed 20 years.

(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 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. 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).)

(30 ILCS 500/Art. 34 heading new)

ARTICLE 34. PERFORMANCE AND GUARANTEED ENERGY SAVINGS

CONTRACTS

(30 ILCS 500/34-5 new)

Sec. 34-5. Definitions. In this Article, the words and phrases have the meanings set forth in this Code.

"State agency" shall have the definition set forth in this Code. The Capital Development Board, created pursuant to 20 ILCS 3105, shall have the authority to act on behalf of any State agency in this Article.

(30 ILCS 500/34-10 new)

Sec. 34-10. Energy conservation measure.

"Energy conservation measure" means any improvement, repair, alteration, or betterment of any building or facility owned or operated by a State agency or any equipment, fixture, or furnishing to be added to or used in any such building or facility that is designed to reduce energy consumption or operating costs, and may include, without limitation, one or more of the following:

(1) Insulation of the building structure or systems within the building.

(2) Storm windows or doors, caulking or weather-stripping, multiglazed windows or doors, heat absorbing or heat reflective glazed and coated window or door systems, additional glazing, reductions in glass area, or other window and door system modifications that reduce energy consumption.

(3) Automated or computerized energy control systems.

(4) Heating, ventilating, or air conditioning system modifications or replacements.

(5) Replacement or modification of lighting fixtures to increase the energy efficiency of the lighting system without increasing the overall illumination of a facility, unless an increase in illumination is necessary to conform to the applicable State or local building code for the lighting system after the proposed modifications are made.

(6) Energy recovery systems.

(7) Energy conservation measures that provide long-term operating cost reductions.

(30 ILCS 500/34-15 new)

Sec. 34-15. Performance and guaranteed energy savings contract. "Guaranteed energy savings contract" or "performance contract" means a contract for: (i) the implementation of an energy audit, data collection, and other related analyses preliminary to the undertaking of energy conservation measures; (ii) the evaluation and recommendation of energy conservation measures; (iii) the implementation of one or more energy conservation measures; and (iv) the implementation of project monitoring and data collection to verify post-installation energy consumption and energy-related operating costs. The contract shall provide that all payments, except obligations on termination of the contract before its expiration, are to be made over time and that the savings are guaranteed to the extent necessary to pay the costs of the energy conservation measures. Energy saving may include energy reduction and offsetting sources of renewable energy funds including renewable energy credits and carbon credits.

(30 ILCS 500/34-20 new)

Sec. 34-20. Prequalification/qualified providers.

(a) Prequalification. The Capital Development Board shall establish procedures to prequalify firms or entities seeking to provide services for performance and guaranteed energy savings contracts, and insure such firms are qualified providers of such services.

(b) Qualified provider. "Qualified provider" means a person or business whose employees are experienced and trained in the design, implementation, or installation of energy conservation measures. The minimum training required for any person or employee under this Section shall be the satisfactory completion of at least 40 hours of course instruction dealing with energy conservation measures. A qualified provider to whom the contract is awarded shall give a sufficient bond to the State agency or area vocational center for its faithful performance.

(30 ILCS 500/34-25 new)

Sec. 34-25. Request for proposals.

"Request for proposals" means a competitive selection achieved by negotiated procurement. The request for proposals shall be administered by the Capital Development Board and notification of the procurement will be in accordance with this Code, but in no case shall the Board provide less than a 30 day notice of the request for proposals. Proposals submitted shall be sealed. The request for proposals shall include all of the following:

(1) The name and address of the proposed project.

(2) The name, address, title, and phone number of a contact person.

(3) Notice indicating that the State agency is requesting qualified providers to propose energy conservation measures through a performance or guaranteed energy savings contract.

(4) The date, time, and place where proposals must be received.

(5) The evaluation criteria for assessing the proposals.

(6) Any other stipulations and clarifications the State agency may require.

(30 ILCS 500/34-30 new)

Sec. 34-30. Evaluation of proposal. Before entering into a performance or guaranteed energy savings contract, a State agency shall submit a request for proposals. The Capital Development Board shall evaluate any sealed proposal from a qualified provider on behalf of the State agency. The evaluation shall analyze the estimates of all costs of installations, modifications or remodeling, including, without limitation, costs of a pre-installation energy audit or analysis, design, engineering, installation, maintenance, repairs, debt service, conversions to a different energy or fuel source, or post-installation project monitoring, data collection, and reporting. The evaluation shall include a detailed analysis of whether either the energy consumed or the operating costs, or both, will be reduced. The evaluation of the proposal shall be done by a registered professional engineer or architect, who is retained by the Capital Development Board or State agency, and selected in accordance with the Architectural, Engineering and Land Surveying Qualifications Based Selection Act. A licensed architect or registered professional engineer evaluating a proposal under this Section must not have any financial or contractual relationship with a qualified provider or other source that would constitute a conflict of interest.

(30 ILCS 500/34-35 new)

Sec. 34-35. Award of performance or guaranteed energy savings contract.

(a) Sealed proposals must be opened by the Capital Development Board, at a public opening at which the contents of the proposals must be announced. Each person or entity submitting a sealed proposal must receive at least 14 days notice of the time and place of the opening. The Capital Development Board shall select the qualified provider that best meets the needs of the State agency. After evaluating the proposals under Section 34-30, the Capital Development Board or the Capital Development Board acting on behalf of the State agency may enter into a performance or guaranteed energy savings contract with a qualified provider if it finds that the amount it would spend on the energy conservation measures recommended in the proposal would not exceed the amount to be saved in either energy or operational costs, or both, within a 20-year period from the date of installation, if the recommendations in the proposal are followed. Contracts let or awarded must be published in the Procurement Bulletin.

(b) The request for proposals and any contracts awarded to a qualified provider shall require that any subsequent need for architectural, engineering, and land surveying services which arise after the submittal of the request for qualifications, the request for proposals, or contract award shall be procured by the provider using a qualifications based selection process consisting of publication of notice of availability of such services, a statement of desired qualifications, an evaluation based on such desired qualifications, and the development of a shortlist ranking the firms in order of qualifications, and then negotiations with such ranked firms for a fair and reasonable fee. Compliance with the Architectural, Engineering, and Land Surveying Qualifications Based Selection Act, 30 ILCS 535, shall be deemed prima facie compliance with these provisions. Every performance or guaranteed energy savings contract shall include the requirements of this paragraph.

(c) The request for proposals shall require that each and every contractor, subcontractor, architectural, engineering and land surveying firm or entity shall be listed and the quotation or price for such services shall also be listed. In the event that prior to or after award, any of the listed firms shall have a reduction in their listed price, the performance or guaranteed energy savings contract shall be modified and such savings shall be for the benefit of the State agency with a corresponding reduction in the contract amount. The information in the request for proposals shall be considered confidential and only for the use of the State agency.

(30 ILCS 500/34-40 new)

Sec. 34-40. Guarantee. The performance or guaranteed energy savings contract shall include a written guarantee of the qualified provider that either the energy or operational cost savings, or both, will meet or exceed within 20 years the costs of the energy conservation measures. The qualified provider shall reimburse the State agency for any shortfall of guaranteed energy savings projected in the contract. A qualified provider shall provide a sufficient bond to the State agency for the installation and the faithful performance of all the measures included in the contract. The performance or guaranteed energy savings contract may provide for payments over a period of time, not to exceed 20 years from the date of final installation of the measures.

(30 ILCS 500/34-45 new)

Sec. 34-45. Installment payment contract; lease purchase agreement. A State agency may enter into an installment payment contract or lease purchase agreement with a qualified provider or with a third party, as authorized by law, for the funding or financing of the purchase and installation of energy conservation measures by a qualified provider. Any such contract or agreement shall be valid whether or not an appropriation with respect thereto is first included in any annual or supplemental budget adopted by the Illinois General Assembly, but only for a term of two years after such funding ceases. Each contract or agreement entered into by a State agency shall be authorized by official action of the State agency or Capital Development Board.

If an energy audit is performed by an energy services contractor for the State agency within the 3 years immediately preceding the solicitation, then the State agency must publish as a reference document in the solicitation for energy conservation measures the following:

(1) an executive summary of the energy audit provided that the State agency may exclude any proprietary or trademarked information or practices; or

(2) the energy audit provided that the State agency may redact any proprietary or trademarked information or practices.

A State agency may not withhold the disclosure of information related to (i) the State agency's consumption of energy, (ii) the physical condition of the State agency's facilities, and (iii) any limitations prescribed by the State agency.

In accordance with 30 ILCS 500/50-10.5, no energy services contractor that participated in the preparation of the specifications issued by the State agency shall be permitted to respond to the solicitation or be awarded a contract for the performance or guaranteed energy savings contract. The solicitation must include a written disclosure that no energy services contractor participated in the preparation of the specifications. The written disclosure shall be published in the Capital Development Board Procurement Bulletin with the Request for Proposal.

(30 ILCS 500/34-50 new)

Sec. 34-50. Operational and energy cost savings. The State agency or the Capital Development Board shall document the operational and energy cost savings specified in the performance or guaranteed energy savings contract and designate and appropriate that amount for an annual payment of the contract. If the annual energy savings are less than projected under the guaranteed energy savings contract, the qualified provider shall pay the difference as provided in Section 34-40.

(30 ILCS 500/34-55 new)

Sec. 34-55. Bonding. A qualified provider shall provide a sufficient bond to the State agency for the installation and the faithful performance of all the measures included in the contract, in accordance with the Public Construction Bond Act, 30 ILCS 550. Such bond shall be in effect for the entire term of the contract, installment payment contract or lease purchase agreement.

(30 ILCS 500/34-60 new)

Sec. 34-60. Applicable laws. Other State laws and related administrative requirements apply to this Article, including, but not limited to, the following laws and related administrative requirements: the Illinois Human Rights Act, Business Enterprise for Minorities, Females, and Persons with Disabilities Act, the Prevailing Wage Act, the Public Construction Bond Act, the Public Works Preference Act (repealed on June 16, 2010 by Public Act 96-929), the Employment of Illinois Workers on Public Works Act, the Freedom of Information Act, the Open Meetings Act, the Illinois Architecture Practice Act of 1989, the Professional Engineering Practice Act of 1989, the Structural Engineering Practice Act of 1989, the Architectural, Engineering and Land Surveying Qualifications Based Selection Act, and the Contractor Unified License and Permit Bond Act, Procurement of Domestic Products Act, Public Purchases in Other States Act, Governmental Joint Purchasing Act, Design-Build Procurement Act, State Prompt Payment Act, Public Contract Fraud Act, Public Construction Contract Act, Airport and Correctional Facility Land Disclosure Act, State Real Property Leasing Act, Real Estate Leasing Act, Project Labor Agreements Act, and the provisions of Article 50 of this Code.

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