50 ILCS 50/35

(50 ILCS 50/35)

Sec. 35. Issuance of PACE bonds.

(a) Except as provided for in subsection (k), a governmental unit shall issue PACE bonds under this Act, or the Authority shall issue PACE bonds in accordance with this Act and pursuant to subsection (d) of Section 825-65 of the Illinois Finance Authority Act, in either case to finance or refinance energy projects under a property assessed clean energy program.

(b) PACE bonds issued under this Act or in accordance with this Act and pursuant to subsection (d) of Section 825-65 of the Illinois Finance Authority Act:

(1) shall not be general obligations of the governmental unit or the Authority, as applicable, but shall be secured by the following:

(A) payments under one or more assessment contracts on benefited property or properties within the PACE area or PACE areas specified;

(B) if applicable, municipal bond insurance, letters of credit, or public or private guarantees or sureties; and

(C) if applicable, revenue sources or reserves established by the governmental unit or the Authority from bond proceeds or other lawfully available funds;

(2) may be secured on a parity basis with PACE bonds of another series or subseries issued by the governmental unit or the Authority pursuant to the terms of a master indenture entered into as authorized by an ordinance or resolution adopted by the governing body or the Authority, as applicable;

(3) may bear interest at any rate or rates not to exceed such rate or rates as the governing body or the Authority shall determine by ordinance or resolution;

(4) may pay interest upon the date or dates described in such PACE bonds;

(5) shall have a maturity no more than 40 years from the date of issuance;

(6) may be subject to redemption with or without premium upon such terms and provisions as may be provided under the terms of a master indenture entered into as authorized by an ordinance or resolution adopted by the governing body or the Authority, as applicable, including, without limitation, terms as to the order of redemption (numerical, pro rata, by series, subseries, or otherwise) and as to the timing thereof;

(7) shall be negotiable instruments under Illinois law and be subject to the Registered Bond Act; and

(8) may be payable either serially or at term, or any combination thereof, in such order of preference, priority, lien position, or rank (including, without limitation, numerical, pro rata, by series, subseries, or otherwise) as the governing body or Authority may provide.

(c) A pledge of assessments, funds, or contractual rights made by a governmental unit or the Authority in connection with the issuance of PACE bonds under this Act or in accordance with this Act and pursuant to Section 825-65 of the Illinois Finance Authority Act constitutes a statutory lien on the assessments, funds, or contractual rights so pledged in favor of the person or persons to whom the pledge is given, without further action taken by a governmental unit or the Authority, as applicable. The statutory lien is valid and binding against all other persons, with or without notice.

(d) (Blank).

(d-5) The State pledges to and agrees with the holders of any PACE bonds issued under this Act or in accordance with the Act and pursuant to Section 825-65 of the Illinois Finance Authority Act that the State will not limit or alter the rights and powers vested in governmental units by this Act or in the Authority in accordance with this Act and pursuant to Section 825-65 of the Illinois Finance Authority Act so as to impair the terms of any contract made by a governmental unit or by the Authority with those bondholders or in any way to impair the rights or remedies of those bondholders until the PACE bonds, together with the interest thereon, and all costs and expenses in connection with any actions or proceedings by or on behalf of those bondholders are fully met and discharged.

(e) (Blank).

(f) PACE bonds issued under this Act or in accordance with this Act and pursuant to Section 825-65 of the Illinois Finance Authority Act further essential public and governmental purposes, including, but not limited to, reduced energy costs and greenhouse gas emissions, enhanced water quality and conservation, economic stimulation and development, improved property resiliency and valuation, and increased employment.

(g) A capital provider can assign its rights to purchase PACE bonds issued by the governmental unit or the Authority to a designated transferee.

(h) A law firm shall be retained to give a written bond opinion in connection with any PACE bond issued under this Act or in accordance with this Act and pursuant to Section 825-65 of the Illinois Finance Authority Act in form and substance as requested by the issuer of the PACE bonds or the capital provider.

(i) PACE bonds issued by the Authority in accordance with this Act and pursuant to subsection (d) of Section 825-65 of the Illinois Finance Authority Act shall not be entitled to the benefits of Section 825-75 of the Illinois Finance Authority Act.

(j) PACE bonds issued by a governmental unit may otherwise have any attributes permitted to bonds under the Local Government Debt Reform Act, as the governing body may provide.

(k) Interim financing prior to the issuance of PACE bonds authorized by this Section may be provided only by a warehouse fund, except that warehouse funds established by capital providers shall only interim finance energy projects secured by one or more assessment contracts for 36 months or less from the date of recording of the applicable assessment contract.

(Source: P.A. 100-77, eff. 8-11-17; 100-980, eff. 1-1-19; 101-169, eff. 7-29-19.)