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Public Act 100-0077 | ||||
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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"Section 1. Short title. This Act may be cited as the | ||||
Property Assessed Clean Energy Act. | ||||
Section 5. Definitions. As used in this Act: | ||||
"Alternative energy improvement" means the installation or | ||||
upgrade of electrical wiring, outlets, or charging stations to | ||||
charge a motor vehicle that is fully or partially powered by | ||||
electricity. | ||||
"Assessment contract" means a voluntary written contract | ||||
between the local unit
of government and record owner governing | ||||
the terms and conditions of financing and
assessment under a | ||||
program. | ||||
"PACE area" means an area within the jurisdictional | ||||
boundaries of a local unit of government created by an | ||||
ordinance or resolution of the local unit of government to | ||||
provide financing for energy projects under a property assessed | ||||
clean energy
program. A local unit of government may create | ||||
more than one PACE area under
the program, and PACE areas may | ||||
be separate, overlapping, or coterminous. | ||||
"Energy efficiency improvement" means equipment, devices, | ||||
or materials
intended to decrease energy consumption or promote |
a more efficient use of electricity, natural gas,
propane, or | ||
other forms of energy on property, including, but not limited | ||
to, all of the
following: | ||
(1) insulation in walls, roofs, floors, foundations, | ||
or heating and
cooling distribution systems; | ||
(2) storm windows and doors, multi-glazed windows and | ||
doors, heat-absorbing
or heat-reflective glazed and coated | ||
window and door systems, and additional glazing, | ||
reductions in glass area, and other window and
door system | ||
modifications that reduce energy consumption; | ||
(3) automated energy control systems; | ||
(4) high efficiency heating, ventilating, or | ||
air-conditioning and
distribution system modifications or | ||
replacements; | ||
(5) caulking, weather-stripping, and air sealing; | ||
(6) replacement or modification of lighting fixtures | ||
to reduce the
energy use of the lighting system; | ||
(7) energy controls or recovery systems; | ||
(8) day lighting systems; and | ||
(9) any other installation or modification of | ||
equipment, devices, or
materials approved as a utility | ||
cost-savings measure by the governing
body. | ||
"Energy project" means the installation or modification of | ||
an alternative energy improvement, energy
efficiency | ||
improvement, or water use improvement, or the acquisition, | ||
installation, or improvement of a renewable energy
system that |
is affixed to a stabilized existing property (not new | ||
construction). | ||
"Governing body" means the county board or board of county | ||
commissioners of a county, the city council of a city, or the | ||
board of trustees of a village. | ||
"Local unit of government" means a county, city, or | ||
village. | ||
"Person" means an individual, firm, partnership, | ||
association, corporation,
limited liability company, | ||
unincorporated joint venture, trust, or any other type of | ||
entity that is recognized by law and has the title to or | ||
interest in property. "Person" does not include a local unit of | ||
government or a homeowner's or condominium association. | ||
"Program administrator" means a for-profit entity or | ||
not-for profit entity that will administer a program on behalf | ||
of or at the discretion of the local unit of government. It or | ||
its affiliates, consultants, or advisors shall have done | ||
business as a program administrator or capital provider for a | ||
minimum of 18 months and shall be responsible for arranging | ||
capital for the acquisition of bonds issued by the local unit | ||
of government to finance energy projects. | ||
"Property" means privately-owned commercial, industrial, | ||
non-residential agricultural, or multi-family (of 5 or more | ||
units) real property
located within the local unit of | ||
government, but does not include property owned by a local unit | ||
of government or a homeowner's or condominium association. |
"Property assessed clean energy program" or "program" | ||
means a
program as described in Section 10. | ||
"Record owner" means the person who is the titleholder or | ||
owner of the beneficial interest in property. | ||
"Renewable energy resource" includes energy and its | ||
associated renewable energy credit or renewable energy credits | ||
from wind energy, solar thermal energy, photovoltaic cells and | ||
panels, biodiesel, anaerobic digestion, and hydropower that | ||
does not involve new construction or significant expansion of | ||
hydropower dams. For purposes of this Act, landfill gas | ||
produced in the State is considered a renewable energy | ||
resource. The term "renewable energy resources" does not | ||
include the incineration or burning of any solid material. | ||
"Renewable energy system" means a fixture, product, | ||
device, or
interacting group of fixtures, products, or devices | ||
on the customer's side of the meter that use one or more | ||
renewable energy resources to generate electricity. | ||
"Water use improvement" means any fixture, product, | ||
system, device, or interacting group thereof for or serving any | ||
property that has the effect of conserving water resources | ||
through improved water management or efficiency. | ||
Section 10. Property assessed clean energy program; | ||
creation. | ||
(a) Pursuant to the procedures provided in Section 15, a | ||
local unit of
government may establish a property assessed |
clean energy program and, from time to
time, create a PACE area | ||
or areas under the program. | ||
(b) Under a program, the local unit of government may enter | ||
into an assessment
contract with the record owner of property | ||
within a PACE area to finance or refinance one or
more energy | ||
projects on the property. The assessment contract shall provide | ||
for the repayment of the cost
of an energy project through | ||
assessments upon the property benefited. The financing or
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refinancing may include any and all of the following: the cost | ||
of materials and labor necessary for installation, permit fees,
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inspection fees, application and administrative fees, bank | ||
fees, and all other fees that may be
incurred by the record | ||
owner pursuant to the installation and the issuance of bonds on | ||
a specific or pro rata basis, as
determined by the local unit | ||
of government and may also include a prepayment premium. | ||
(c) A program may be administered by a program | ||
administrator or the local unit of government. | ||
Section 15. Program established. | ||
(a) To establish a property assessed clean energy program, | ||
the governing body of a local unit of government shall adopt a | ||
resolution or ordinance that includes all of the following: | ||
(1) a finding that the financing of energy projects is | ||
a valid
public purpose; | ||
(2) a statement of intent to facilitate access to | ||
capital from a program administrator to provide funds for |
energy projects,
which will be repaid by assessments on the | ||
property benefited with the agreement of the record owners; | ||
(3) a description of the proposed arrangements for | ||
financing
the program through a program administrator; | ||
(4) the types of energy projects that may be financed; | ||
(5) a description of the territory within the PACE | ||
area; | ||
(6) reference to a report on the proposed program as | ||
described
in Section 20; and | ||
(7) the time and place for any public hearing required | ||
for the adoption of the proposed
program by resolution or | ||
ordinance; | ||
(8) matters required by Section 20 to be included in | ||
the report; for this purpose, the resolution or ordinance | ||
may incorporate the report or an
amended version thereof by | ||
reference; and | ||
(9) a description of which aspects of the program may | ||
be
amended without a new public hearing and which aspects | ||
may be
amended only after a new public hearing is held. | ||
(b) A property assessed clean energy program may be amended | ||
by
resolution or ordinance of the governing body. Adoption of | ||
the resolution or ordinance shall be preceded by a public
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hearing if required. | ||
Section 20. Report. The report on the proposed program | ||
required under Section 15 shall include all of the following: |
(1) a form of assessment contract between the local | ||
unit of government and
record owner governing the terms and | ||
conditions of financing and assessment under the
program. | ||
(2) identification of an official authorized to enter | ||
into a assessment contract
on behalf of the local unit of | ||
government; | ||
(3) a maximum aggregate annual dollar amount for all | ||
financing to be
provided by the program administrator under | ||
the program; | ||
(4) an application process and eligibility | ||
requirements for financing energy
projects under the | ||
program; | ||
(5) a method for determining interest rates on | ||
assessment installments,
repayment periods, and the | ||
maximum amount of an assessment; | ||
(6) an explanation of how assessments will be made and | ||
collected; | ||
(7) a plan to raise capital to finance improvements | ||
under the program
pursuant to the sale of bonds, subject to | ||
the Special Assessment Supplemental Bond and
Procedures | ||
Act, to a program administrator; | ||
(8) information regarding all of the following, to the | ||
extent known, or
procedures to determine the following in | ||
the future: | ||
(A) any revenue source or reserve fund or funds to | ||
be used as security for bonds described
in paragraph |
(7); and | ||
(B) any application, administration, or other | ||
program fees to be charged
to record owners | ||
participating in the program that will be used to
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finance costs incurred by the local unit of government | ||
as a result of the
program; | ||
(9) a requirement that the term of an assessment not | ||
exceed the useful life of
the energy project paid for by | ||
the assessment; provided that the local unit of government | ||
may allow projects that consist of multiple improvements | ||
with varying lengths of useful life to have a term that is | ||
no greater than the improvement with the longest useful | ||
life; | ||
(10) a requirement for an appropriate ratio of the | ||
amount of the assessment
to the assessed value of the | ||
property or market value of the property as determined by a | ||
recent
appraisal no older than 12 months; | ||
(11) a requirement that the record owner of property | ||
subject to a mortgage
obtain written consent from the | ||
mortgage holder before participating in the program; | ||
(12) provisions for marketing and participant | ||
education; | ||
(13) provisions for an adequate debt service reserve | ||
fund, if any; and | ||
(14) quality assurance and antifraud measures. |
Section 25. Contracts with record owners of property. | ||
(a) After creation of a program and PACE area, a record | ||
owner of property within the PACE area may apply with the local | ||
unit of government or its program administrator for funding to | ||
finance an energy project. | ||
(b) A local unit of government may impose an assessment | ||
under a property
assessed clean energy program only pursuant to | ||
the terms of a recorded assessment contract with the
record | ||
owner of the property to be assessed. | ||
(c) Before entering into an assessment contract with a | ||
record owner under
a program, the local unit of government | ||
shall verify all of the following: | ||
(1) that the property is within the PACE area; | ||
(2) that there are no delinquent taxes, special | ||
assessments, or
water or sewer charges on the property; | ||
(3) that there are no delinquent assessments on the | ||
property under
a property assessed clean energy program; | ||
(4) there are no involuntary liens on the property, | ||
including, but
not limited to, construction or mechanics | ||
liens, lis pendens or judgments against the
record owner, | ||
environmental proceedings, or eminent domain
proceedings; | ||
(5) that no notices of default or other evidence of | ||
property-based
debt delinquency have been recorded and not | ||
cured; | ||
(6) that the record owner is current on all mortgage | ||
debt on the
property, the record owner has not filed for |
bankruptcy in the last 2 years, and the property is not an | ||
asset to a current bankruptcy. | ||
(7) all work requiring a license under any applicable | ||
law to make a
qualifying improvement shall be performed by | ||
a registered contractor that has agreed to adhere to a set | ||
of terms and conditions through a process established by | ||
the local unit of government. | ||
(8) the contractors to be used have signed a written | ||
acknowledgement that the local unit of government will not | ||
authorize final payment to the contractor until the local | ||
unit of government has received written confirmation from | ||
the record owner that the improvement was properly | ||
installed and is operating as intended; provided, however, | ||
that the contractor retains all legal rights and remedies | ||
in the event there is a disagreement with the owner; | ||
(9) that the amount of the assessment in relation to | ||
the greater of the assessed value of the property or the | ||
appraised value of the property, as determined by a | ||
licensed appraiser, does not exceed 25%; and | ||
(10) a requirement that an assessment of the existing | ||
water or energy use and a modeling of expected monetary | ||
savings have been conducted for any proposed project. | ||
(d) At least 30 days before entering into an agreement with
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the local unit of government, the record owner shall provide to | ||
the holders or
loan servicers of any existing mortgages | ||
encumbering or otherwise
secured by the property a notice of |
the record owner's intent to enter
into an assessment contract | ||
with the local unit of government, together with the maximum | ||
principal amount to be financed and the
maximum annual | ||
assessment necessary to repay that amount, along
with a request | ||
that the holders or loan servicers of any existing
mortgages | ||
consent to the record owner subjecting the property to the
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program. A verified copy or other proof of those notices and | ||
the written
consent of the existing mortgage holder for the | ||
record owner to enter
into the assessment contract and | ||
acknowledging that the existing
mortgage will be subordinate to | ||
the financing and assessment
agreement and that the local unit | ||
of government can foreclose the
property if the assessment is | ||
not paid shall be provided to the local
unit of government. | ||
(e) A provision in any agreement between a local unit of
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government and a public or private power or energy provider or | ||
other
utility provider is not enforceable to limit or prohibit | ||
any local unit of
government from exercising its authority | ||
under this Section. | ||
(f) The record owner has signed a certification that the | ||
local unit of government has complied with the provisions of | ||
this Section, which shall be conclusive evidence as to | ||
compliance with these provisions, but shall not relieve any | ||
contractor, or local unit of government, from any potential | ||
liability. | ||
(g) This Section is additional and supplemental to county | ||
and
municipal home rule authority and not in derogation of such |
authority
or limitation upon such authority. | ||
Section 30. Assessments constitute a lien; billing. | ||
(a) An assessment imposed under a property assessed clean | ||
energy
program, including any interest on the assessment and | ||
any penalty, shall constitute a lien
against the property on | ||
which the assessment is imposed until the assessment, including | ||
any
interest or penalty, is paid in full. The lien of the | ||
assessment contract shall run with the
property until the | ||
assessment is paid in full and a satisfaction or release for | ||
the same has been recorded with the local unit of government | ||
and shall have the same priority and status as other property | ||
tax and assessment liens. The
local unit of government shall | ||
have all rights and remedies in the case of default or
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delinquency in the payment of an assessment as it does with | ||
respect to delinquent property
taxes. When the assessment, | ||
including any interest and penalty, is paid, the lien shall be
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removed from the property. | ||
(b) Installments of assessments due under a program may be | ||
included in
each tax bill issued under the Property Tax Code | ||
and may be collected at the
same time and in the same manner as | ||
taxes collected under the Property Tax Code. Alternatively, | ||
installments may be billed and collected as provided in a | ||
special assessment
ordinance of general applicability adopted | ||
by the local unit of government pursuant to State
law or local | ||
charter. In no event will partial payment of an assessment be |
allowed. | ||
Section 35. Bonds. | ||
(a) A local unit of government may issue bonds under the | ||
Special Assessment Supplemental Bond and Procedures Act to | ||
finance energy projects
under a property assessed clean energy | ||
program. | ||
(b) Bonds issued under subsection (a) shall not be general | ||
obligations of the
local unit of government, but shall be | ||
secured by the following as provided
by the governing body in | ||
the resolution or ordinance approving the bonds: | ||
(1) payments of assessments on benefited property | ||
within the
PACE area or areas specified; and | ||
(2) if applicable, revenue sources or reserves | ||
established by the local unit of government from bond
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proceeds or other lawfully available funds. | ||
(c) A pledge of assessments, funds, or contractual rights | ||
made by a
governing body in connection with the issuance of | ||
bonds by a local unit of government under
this 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 by the
governing body. | ||
The statutory lien is valid and binding against all other | ||
persons, with or
without notice. | ||
(d) Bonds of one series issued under this Act may be | ||
secured on a parity with
bonds of another series issued by the |
local unit of government pursuant to the terms of a master | ||
indenture or master resolution entered into or adopted by the | ||
governing body of the
local unit of government. | ||
(e) Bonds issued under this Act are subject to the Bond | ||
Authorization Act and the Registered Bond Act. | ||
(f) Bonds issued under this Act further essential public | ||
and governmental purposes, including, but not limited to, | ||
reduced energy costs, reduced greenhouse gas emissions,
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economic stimulation and development, improved property | ||
valuation, and increased
employment. | ||
(g) A program administrator can assign its rights to | ||
purchase the bonds to a third party (the "bond purchaser"). | ||
(h) A program administrator shall retain a law firm to give | ||
a bond opinion for the benefit of the program administrator or | ||
bond purchaser. | ||
Section 40. Joint property assessed clean
energy programs. | ||
(a) A local unit of government may join with any other | ||
local unit of
government, or with any public or private person, | ||
or with any number or combination thereof, under the | ||
Intergovernmental Cooperation Act, by contract or
otherwise as | ||
may be permitted by law, for the implementation of a property | ||
assessed clean
energy program, in whole or in part. | ||
(b) If a program is implemented jointly by
2 or more local | ||
units of government pursuant to subsection (a), a single public | ||
hearing
held jointly by the cooperating local units of |
government is sufficient to satisfy the requirements
of this | ||
Act.
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Section 99. Effective date. This Act takes effect upon | ||
becoming law.
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