Full Text of HB2831 100th General Assembly
HB2831enr 100TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Property Assessed Clean Energy Act. | 6 | | Section 5. Definitions. As used in this Act: | 7 | | "Alternative energy improvement" means the installation or | 8 | | upgrade of electrical wiring, outlets, or charging stations to | 9 | | charge a motor vehicle that is fully or partially powered by | 10 | | electricity. | 11 | | "Assessment contract" means a voluntary written contract | 12 | | between the local unit
of government and record owner governing | 13 | | the terms and conditions of financing and
assessment under a | 14 | | program. | 15 | | "PACE area" means an area within the jurisdictional | 16 | | boundaries of a local unit of government created by an | 17 | | ordinance or resolution of the local unit of government to | 18 | | provide financing for energy projects under a property assessed | 19 | | clean energy
program. A local unit of government may create | 20 | | more than one PACE area under
the program, and PACE areas may | 21 | | be separate, overlapping, or coterminous. | 22 | | "Energy efficiency improvement" means equipment, devices, | 23 | | or materials
intended to decrease energy consumption or promote |
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| 1 | | a more efficient use of electricity, natural gas,
propane, or | 2 | | other forms of energy on property, including, but not limited | 3 | | to, all of the
following: | 4 | | (1) insulation in walls, roofs, floors, foundations, | 5 | | or heating and
cooling distribution systems; | 6 | | (2) storm windows and doors, multi-glazed windows and | 7 | | doors, heat-absorbing
or heat-reflective glazed and coated | 8 | | window and door systems, and additional glazing, | 9 | | reductions in glass area, and other window and
door system | 10 | | modifications that reduce energy consumption; | 11 | | (3) automated energy control systems; | 12 | | (4) high efficiency heating, ventilating, or | 13 | | air-conditioning and
distribution system modifications or | 14 | | replacements; | 15 | | (5) caulking, weather-stripping, and air sealing; | 16 | | (6) replacement or modification of lighting fixtures | 17 | | to reduce the
energy use of the lighting system; | 18 | | (7) energy controls or recovery systems; | 19 | | (8) day lighting systems; and | 20 | | (9) any other installation or modification of | 21 | | equipment, devices, or
materials approved as a utility | 22 | | cost-savings measure by the governing
body. | 23 | | "Energy project" means the installation or modification of | 24 | | an alternative energy improvement, energy
efficiency | 25 | | improvement, or water use improvement, or the acquisition, | 26 | | installation, or improvement of a renewable energy
system that |
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| 1 | | is affixed to a stabilized existing property (not new | 2 | | construction). | 3 | | "Governing body" means the county board or board of county | 4 | | commissioners of a county, the city council of a city, or the | 5 | | board of trustees of a village. | 6 | | "Local unit of government" means a county, city, or | 7 | | village. | 8 | | "Person" means an individual, firm, partnership, | 9 | | association, corporation,
limited liability company, | 10 | | unincorporated joint venture, trust, or any other type of | 11 | | entity that is recognized by law and has the title to or | 12 | | interest in property. "Person" does not include a local unit of | 13 | | government or a homeowner's or condominium association. | 14 | | "Program administrator" means a for-profit entity or | 15 | | not-for profit entity that will administer a program on behalf | 16 | | of or at the discretion of the local unit of government. It or | 17 | | its affiliates, consultants, or advisors shall have done | 18 | | business as a program administrator or capital provider for a | 19 | | minimum of 18 months and shall be responsible for arranging | 20 | | capital for the acquisition of bonds issued by the local unit | 21 | | of government to finance energy projects. | 22 | | "Property" means privately-owned commercial, industrial, | 23 | | non-residential agricultural, or multi-family (of 5 or more | 24 | | units) real property
located within the local unit of | 25 | | government, but does not include property owned by a local unit | 26 | | of government or a homeowner's or condominium association. |
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| 1 | | "Property assessed clean energy program" or "program" | 2 | | means a
program as described in Section 10. | 3 | | "Record owner" means the person who is the titleholder or | 4 | | owner of the beneficial interest in property. | 5 | | "Renewable energy resource" includes energy and its | 6 | | associated renewable energy credit or renewable energy credits | 7 | | from wind energy, solar thermal energy, photovoltaic cells and | 8 | | panels, biodiesel, anaerobic digestion, and hydropower that | 9 | | does not involve new construction or significant expansion of | 10 | | hydropower dams. For purposes of this Act, landfill gas | 11 | | produced in the State is considered a renewable energy | 12 | | resource. The term "renewable energy resources" does not | 13 | | include the incineration or burning of any solid material. | 14 | | "Renewable energy system" means a fixture, product, | 15 | | device, or
interacting group of fixtures, products, or devices | 16 | | on the customer's side of the meter that use one or more | 17 | | renewable energy resources to generate electricity. | 18 | | "Water use improvement" means any fixture, product, | 19 | | system, device, or interacting group thereof for or serving any | 20 | | property that has the effect of conserving water resources | 21 | | through improved water management or efficiency. | 22 | | Section 10. Property assessed clean energy program; | 23 | | creation. | 24 | | (a) Pursuant to the procedures provided in Section 15, a | 25 | | local unit of
government may establish a property assessed |
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| 1 | | clean energy program and, from time to
time, create a PACE area | 2 | | or areas under the program. | 3 | | (b) Under a program, the local unit of government may enter | 4 | | into an assessment
contract with the record owner of property | 5 | | within a PACE area to finance or refinance one or
more energy | 6 | | projects on the property. The assessment contract shall provide | 7 | | for the repayment of the cost
of an energy project through | 8 | | assessments upon the property benefited. The financing or
| 9 | | refinancing may include any and all of the following: the cost | 10 | | of materials and labor necessary for installation, permit fees,
| 11 | | inspection fees, application and administrative fees, bank | 12 | | fees, and all other fees that may be
incurred by the record | 13 | | owner pursuant to the installation and the issuance of bonds on | 14 | | a specific or pro rata basis, as
determined by the local unit | 15 | | of government and may also include a prepayment premium. | 16 | | (c) A program may be administered by a program | 17 | | administrator or the local unit of government. | 18 | | Section 15. Program established. | 19 | | (a) To establish a property assessed clean energy program, | 20 | | the governing body of a local unit of government shall adopt a | 21 | | resolution or ordinance that includes all of the following: | 22 | | (1) a finding that the financing of energy projects is | 23 | | a valid
public purpose; | 24 | | (2) a statement of intent to facilitate access to | 25 | | capital from a program administrator to provide funds for |
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| 1 | | energy projects,
which will be repaid by assessments on the | 2 | | property benefited with the agreement of the record owners; | 3 | | (3) a description of the proposed arrangements for | 4 | | financing
the program through a program administrator; | 5 | | (4) the types of energy projects that may be financed; | 6 | | (5) a description of the territory within the PACE | 7 | | area; | 8 | | (6) reference to a report on the proposed program as | 9 | | described
in Section 20; and | 10 | | (7) the time and place for any public hearing required | 11 | | for the adoption of the proposed
program by resolution or | 12 | | ordinance; | 13 | | (8) matters required by Section 20 to be included in | 14 | | the report; for this purpose, the resolution or ordinance | 15 | | may incorporate the report or an
amended version thereof by | 16 | | reference; and | 17 | | (9) a description of which aspects of the program may | 18 | | be
amended without a new public hearing and which aspects | 19 | | may be
amended only after a new public hearing is held. | 20 | | (b) A property assessed clean energy program may be amended | 21 | | by
resolution or ordinance of the governing body. Adoption of | 22 | | the resolution or ordinance shall be preceded by a public
| 23 | | hearing if required. | 24 | | Section 20. Report. The report on the proposed program | 25 | | required under Section 15 shall include all of the following: |
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| 1 | | (1) a form of assessment contract between the local | 2 | | unit of government and
record owner governing the terms and | 3 | | conditions of financing and assessment under the
program. | 4 | | (2) identification of an official authorized to enter | 5 | | into a assessment contract
on behalf of the local unit of | 6 | | government; | 7 | | (3) a maximum aggregate annual dollar amount for all | 8 | | financing to be
provided by the program administrator under | 9 | | the program; | 10 | | (4) an application process and eligibility | 11 | | requirements for financing energy
projects under the | 12 | | program; | 13 | | (5) a method for determining interest rates on | 14 | | assessment installments,
repayment periods, and the | 15 | | maximum amount of an assessment; | 16 | | (6) an explanation of how assessments will be made and | 17 | | collected; | 18 | | (7) a plan to raise capital to finance improvements | 19 | | under the program
pursuant to the sale of bonds, subject to | 20 | | the Special Assessment Supplemental Bond and
Procedures | 21 | | Act, to a program administrator; | 22 | | (8) information regarding all of the following, to the | 23 | | extent known, or
procedures to determine the following in | 24 | | the future: | 25 | | (A) any revenue source or reserve fund or funds to | 26 | | be used as security for bonds described
in paragraph |
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| 1 | | (7); and | 2 | | (B) any application, administration, or other | 3 | | program fees to be charged
to record owners | 4 | | participating in the program that will be used to
| 5 | | finance costs incurred by the local unit of government | 6 | | as a result of the
program; | 7 | | (9) a requirement that the term of an assessment not | 8 | | exceed the useful life of
the energy project paid for by | 9 | | the assessment; provided that the local unit of government | 10 | | may allow projects that consist of multiple improvements | 11 | | with varying lengths of useful life to have a term that is | 12 | | no greater than the improvement with the longest useful | 13 | | life; | 14 | | (10) a requirement for an appropriate ratio of the | 15 | | amount of the assessment
to the assessed value of the | 16 | | property or market value of the property as determined by a | 17 | | recent
appraisal no older than 12 months; | 18 | | (11) a requirement that the record owner of property | 19 | | subject to a mortgage
obtain written consent from the | 20 | | mortgage holder before participating in the program; | 21 | | (12) provisions for marketing and participant | 22 | | education; | 23 | | (13) provisions for an adequate debt service reserve | 24 | | fund, if any; and | 25 | | (14) quality assurance and antifraud measures. |
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| 1 | | Section 25. Contracts with record owners of property. | 2 | | (a) After creation of a program and PACE area, a record | 3 | | owner of property within the PACE area may apply with the local | 4 | | unit of government or its program administrator for funding to | 5 | | finance an energy project. | 6 | | (b) A local unit of government may impose an assessment | 7 | | under a property
assessed clean energy program only pursuant to | 8 | | the terms of a recorded assessment contract with the
record | 9 | | owner of the property to be assessed. | 10 | | (c) Before entering into an assessment contract with a | 11 | | record owner under
a program, the local unit of government | 12 | | shall verify all of the following: | 13 | | (1) that the property is within the PACE area; | 14 | | (2) that there are no delinquent taxes, special | 15 | | assessments, or
water or sewer charges on the property; | 16 | | (3) that there are no delinquent assessments on the | 17 | | property under
a property assessed clean energy program; | 18 | | (4) there are no involuntary liens on the property, | 19 | | including, but
not limited to, construction or mechanics | 20 | | liens, lis pendens or judgments against the
record owner, | 21 | | environmental proceedings, or eminent domain
proceedings; | 22 | | (5) that no notices of default or other evidence of | 23 | | property-based
debt delinquency have been recorded and not | 24 | | cured; | 25 | | (6) that the record owner is current on all mortgage | 26 | | debt on the
property, the record owner has not filed for |
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| 1 | | bankruptcy in the last 2 years, and the property is not an | 2 | | asset to a current bankruptcy. | 3 | | (7) all work requiring a license under any applicable | 4 | | law to make a
qualifying improvement shall be performed by | 5 | | a registered contractor that has agreed to adhere to a set | 6 | | of terms and conditions through a process established by | 7 | | the local unit of government. | 8 | | (8) the contractors to be used have signed a written | 9 | | acknowledgement that the local unit of government will not | 10 | | authorize final payment to the contractor until the local | 11 | | unit of government has received written confirmation from | 12 | | the record owner that the improvement was properly | 13 | | installed and is operating as intended; provided, however, | 14 | | that the contractor retains all legal rights and remedies | 15 | | in the event there is a disagreement with the owner; | 16 | | (9) that the amount of the assessment in relation to | 17 | | the greater of the assessed value of the property or the | 18 | | appraised value of the property, as determined by a | 19 | | licensed appraiser, does not exceed 25%; and | 20 | | (10) a requirement that an assessment of the existing | 21 | | water or energy use and a modeling of expected monetary | 22 | | savings have been conducted for any proposed project. | 23 | | (d) At least 30 days before entering into an agreement with
| 24 | | the local unit of government, the record owner shall provide to | 25 | | the holders or
loan servicers of any existing mortgages | 26 | | encumbering or otherwise
secured by the property a notice of |
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| 1 | | the record owner's intent to enter
into an assessment contract | 2 | | with the local unit of government, together with the maximum | 3 | | principal amount to be financed and the
maximum annual | 4 | | assessment necessary to repay that amount, along
with a request | 5 | | that the holders or loan servicers of any existing
mortgages | 6 | | consent to the record owner subjecting the property to the
| 7 | | program. A verified copy or other proof of those notices and | 8 | | the written
consent of the existing mortgage holder for the | 9 | | record owner to enter
into the assessment contract and | 10 | | acknowledging that the existing
mortgage will be subordinate to | 11 | | the financing and assessment
agreement and that the local unit | 12 | | of government can foreclose the
property if the assessment is | 13 | | not paid shall be provided to the local
unit of government. | 14 | | (e) A provision in any agreement between a local unit of
| 15 | | government and a public or private power or energy provider or | 16 | | other
utility provider is not enforceable to limit or prohibit | 17 | | any local unit of
government from exercising its authority | 18 | | under this Section. | 19 | | (f) The record owner has signed a certification that the | 20 | | local unit of government has complied with the provisions of | 21 | | this Section, which shall be conclusive evidence as to | 22 | | compliance with these provisions, but shall not relieve any | 23 | | contractor, or local unit of government, from any potential | 24 | | liability. | 25 | | (g) This Section is additional and supplemental to county | 26 | | and
municipal home rule authority and not in derogation of such |
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| 1 | | authority
or limitation upon such authority. | 2 | | Section 30. Assessments constitute a lien; billing. | 3 | | (a) An assessment imposed under a property assessed clean | 4 | | energy
program, including any interest on the assessment and | 5 | | any penalty, shall constitute a lien
against the property on | 6 | | which the assessment is imposed until the assessment, including | 7 | | any
interest or penalty, is paid in full. The lien of the | 8 | | assessment contract shall run with the
property until the | 9 | | assessment is paid in full and a satisfaction or release for | 10 | | the same has been recorded with the local unit of government | 11 | | and shall have the same priority and status as other property | 12 | | tax and assessment liens. The
local unit of government shall | 13 | | have all rights and remedies in the case of default or
| 14 | | delinquency in the payment of an assessment as it does with | 15 | | respect to delinquent property
taxes. When the assessment, | 16 | | including any interest and penalty, is paid, the lien shall be
| 17 | | removed from the property. | 18 | | (b) Installments of assessments due under a program may be | 19 | | included in
each tax bill issued under the Property Tax Code | 20 | | and may be collected at the
same time and in the same manner as | 21 | | taxes collected under the Property Tax Code. Alternatively, | 22 | | installments may be billed and collected as provided in a | 23 | | special assessment
ordinance of general applicability adopted | 24 | | by the local unit of government pursuant to State
law or local | 25 | | charter. In no event will partial payment of an assessment be |
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| 1 | | allowed. | 2 | | Section 35. Bonds. | 3 | | (a) A local unit of government may issue bonds under the | 4 | | Special Assessment Supplemental Bond and Procedures Act to | 5 | | finance energy projects
under a property assessed clean energy | 6 | | program. | 7 | | (b) Bonds issued under subsection (a) shall not be general | 8 | | obligations of the
local unit of government, but shall be | 9 | | secured by the following as provided
by the governing body in | 10 | | the resolution or ordinance approving the bonds: | 11 | | (1) payments of assessments on benefited property | 12 | | within the
PACE area or areas specified; and | 13 | | (2) if applicable, revenue sources or reserves | 14 | | established by the local unit of government from bond
| 15 | | proceeds or other lawfully available funds. | 16 | | (c) A pledge of assessments, funds, or contractual rights | 17 | | made by a
governing body in connection with the issuance of | 18 | | bonds by a local unit of government under
this Act constitutes | 19 | | a statutory lien on the assessments, funds, or contractual | 20 | | rights so pledged in
favor of the person or persons to whom the | 21 | | pledge is given, without further action by the
governing body. | 22 | | The statutory lien is valid and binding against all other | 23 | | persons, with or
without notice. | 24 | | (d) Bonds of one series issued under this Act may be | 25 | | secured on a parity with
bonds of another series issued by the |
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| 1 | | local unit of government pursuant to the terms of a master | 2 | | indenture or master resolution entered into or adopted by the | 3 | | governing body of the
local unit of government. | 4 | | (e) Bonds issued under this Act are subject to the Bond | 5 | | Authorization Act and the Registered Bond Act. | 6 | | (f) Bonds issued under this Act further essential public | 7 | | and governmental purposes, including, but not limited to, | 8 | | reduced energy costs, reduced greenhouse gas emissions,
| 9 | | economic stimulation and development, improved property | 10 | | valuation, and increased
employment. | 11 | | (g) A program administrator can assign its rights to | 12 | | purchase the bonds to a third party (the "bond purchaser"). | 13 | | (h) A program administrator shall retain a law firm to give | 14 | | a bond opinion for the benefit of the program administrator or | 15 | | bond purchaser. | 16 | | Section 40. Joint property assessed clean
energy programs. | 17 | | (a) A local unit of government may join with any other | 18 | | local unit of
government, or with any public or private person, | 19 | | or with any number or combination thereof, under the | 20 | | Intergovernmental Cooperation Act, by contract or
otherwise as | 21 | | may be permitted by law, for the implementation of a property | 22 | | assessed clean
energy program, in whole or in part. | 23 | | (b) If a program is implemented jointly by
2 or more local | 24 | | units of government pursuant to subsection (a), a single public | 25 | | hearing
held jointly by the cooperating local units of |
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| 1 | | government is sufficient to satisfy the requirements
of this | 2 | | Act.
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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