Full Text of SB2773 100th General Assembly
SB2773enr 100TH GENERAL ASSEMBLY |
| | SB2773 Enrolled | | LRB100 17711 RJF 32884 b |
|
| 1 | | AN ACT concerning government.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Property Assessed Clean Energy Act is | 5 | | amended by changing Sections 5, 10, 15, 20, 25, 30, and 35 as | 6 | | follows: | 7 | | (50 ILCS 50/5)
| 8 | | Sec. 5. Definitions. As used in this Act: | 9 | | "Alternative energy improvement" means the installation or | 10 | | upgrade of electrical wiring, outlets, or charging stations to | 11 | | charge a motor vehicle that is fully or partially powered by | 12 | | electricity. | 13 | | "Assessment contract" means a voluntary written contract | 14 | | between the local unit
of government (or a permitted assignee) | 15 | | and record owner governing the terms and conditions of | 16 | | financing and
assessment under a program. | 17 | | "Authority" means the Illinois Finance Authority. | 18 | | "PACE area" means an area within the jurisdictional | 19 | | boundaries of a local unit of government created by an | 20 | | ordinance or resolution of the local unit of government to | 21 | | provide financing for energy projects under a property assessed | 22 | | clean energy
program. A local unit of government may create | 23 | | more than one PACE area under
the program, and PACE areas may |
| | | SB2773 Enrolled | - 2 - | LRB100 17711 RJF 32884 b |
|
| 1 | | be separate, overlapping, or coterminous. | 2 | | "Energy efficiency improvement" means equipment, devices, | 3 | | or materials
intended to decrease energy consumption or promote | 4 | | a more efficient use of electricity, natural gas,
propane, or | 5 | | other forms of energy on property, including, but not limited | 6 | | to, all of the
following: | 7 | | (1) insulation in walls, roofs, floors, foundations, | 8 | | or heating and
cooling distribution systems; | 9 | | (2) storm windows and doors, multi-glazed windows and | 10 | | doors, heat-absorbing
or heat-reflective glazed and coated | 11 | | window and door systems, and additional glazing, | 12 | | reductions in glass area, and other window and
door system | 13 | | modifications that reduce energy consumption; | 14 | | (3) automated energy control systems; | 15 | | (4) high efficiency heating, ventilating, or | 16 | | air-conditioning and
distribution system modifications or | 17 | | replacements; | 18 | | (5) caulking, weather-stripping, and air sealing; | 19 | | (6) replacement or modification of lighting fixtures | 20 | | to reduce the
energy use of the lighting system; | 21 | | (7) energy controls or recovery systems; | 22 | | (8) day lighting systems; and | 23 | | (8.1) any energy efficiency project, as defined in | 24 | | Section 825-65 of the
Illinois Finance Authority Act; and | 25 | | (9) any other installation or modification of | 26 | | equipment, devices, or
materials approved as a utility |
| | | SB2773 Enrolled | - 3 - | LRB100 17711 RJF 32884 b |
|
| 1 | | cost-savings measure by the governing
body. | 2 | | "Energy project" means the installation or modification of | 3 | | an alternative energy improvement, energy
efficiency | 4 | | improvement, or water use improvement, or the acquisition, | 5 | | installation, or improvement of a renewable energy
system that | 6 | | is affixed to a stabilized existing property ( including not new | 7 | | construction). | 8 | | "Governing body" means the county board or board of county | 9 | | commissioners of a county, the city council of a city, or the | 10 | | board of trustees of a village. | 11 | | "Local unit of government" means a county, city, or | 12 | | village. | 13 | | "Permitted assignee" means (i) any body politic and | 14 | | corporate, (ii) any bond trustee, or (iii) any warehouse | 15 | | lender, or any other assignee of a local unit of government | 16 | | designated in an assessment contract. | 17 | | "Person" means an individual, firm, partnership, | 18 | | association, corporation,
limited liability company, | 19 | | unincorporated joint venture, trust, or any other type of | 20 | | entity that is recognized by law and has the title to or | 21 | | interest in property. "Person" does not include a local unit of | 22 | | government or a homeowner's or condominium association , but | 23 | | does include other governmental entities that
are not local | 24 | | units of government . | 25 | | "Program administrator" means a for-profit entity or | 26 | | not-for profit entity that will administer a program on behalf |
| | | SB2773 Enrolled | - 4 - | LRB100 17711 RJF 32884 b |
|
| 1 | | of or at the discretion of the local unit of government. It or | 2 | | its affiliates, consultants, or advisors shall have done | 3 | | business as a program administrator or capital provider for a | 4 | | minimum of 18 months and shall be responsible for arranging | 5 | | capital for the acquisition of bonds issued by the local unit | 6 | | of government or the Authority to finance energy projects. | 7 | | "Property" means privately-owned commercial, industrial, | 8 | | non-residential agricultural, or multi-family (of 5 or more | 9 | | units) real property
located within the local unit of | 10 | | government, but does not include property owned by a local unit | 11 | | of government or a homeowner's or condominium association. | 12 | | "Property assessed clean energy program" or "program" | 13 | | means a
program as described in Section 10. | 14 | | "Record owner" means the person who is the titleholder or | 15 | | owner of the beneficial interest in property. | 16 | | "Renewable energy resource" includes energy and its | 17 | | associated renewable energy credit or renewable energy credits | 18 | | from wind energy, solar thermal energy, photovoltaic cells and | 19 | | panels, biodiesel, anaerobic digestion, and hydropower that | 20 | | does not involve new construction or significant expansion of | 21 | | hydropower dams. For purposes of this Act, landfill gas | 22 | | produced in the State is considered a renewable energy | 23 | | resource. The term "renewable energy resources" does not | 24 | | include the incineration or burning of any solid material. | 25 | | "Renewable energy system" means a fixture, product, | 26 | | device, or
interacting group of fixtures, products, or devices |
| | | SB2773 Enrolled | - 5 - | LRB100 17711 RJF 32884 b |
|
| 1 | | on the customer's side of the meter that use one or more | 2 | | renewable energy resources to generate electricity , and | 3 | | specifically includes any renewable energy
project, as defined | 4 | | in Section 825-65 of the Illinois Finance Authority Act . | 5 | | "Warehouse fund" means any fund established by a local unit | 6 | | of government, body politic and corporate, or warehouse lender. | 7 | | "Warehouse lender" means any financial institution | 8 | | participating in a PACE area that finances an energy project | 9 | | from lawfully available funds in anticipation of issuing bonds | 10 | | as described in Section 35. | 11 | | "Water use improvement" means any fixture, product, | 12 | | system, device, or interacting group thereof for or serving any | 13 | | property that has the effect of conserving water resources | 14 | | through improved water management or efficiency.
| 15 | | (Source: P.A. 100-77, eff. 8-11-17.) | 16 | | (50 ILCS 50/10)
| 17 | | Sec. 10. Property assessed clean energy program; creation. | 18 | | (a) Pursuant to the procedures provided in Section 15, a | 19 | | local unit of
government may establish a property assessed | 20 | | clean energy program and, from time to
time, create a PACE area | 21 | | or areas under the program. | 22 | | (b) Under a program, the local unit of government may enter | 23 | | into an assessment
contract with the record owner of property | 24 | | within a PACE area to finance or refinance one or
more energy | 25 | | projects on the property. The assessment contract shall provide |
| | | SB2773 Enrolled | - 6 - | LRB100 17711 RJF 32884 b |
|
| 1 | | for the repayment of the cost
of an energy project through | 2 | | assessments upon the property benefited. The financing or
| 3 | | refinancing may include any and all of the following: the cost | 4 | | of materials and labor necessary for installation, permit fees,
| 5 | | inspection fees, application and administrative fees, bank | 6 | | fees, and all other fees that may be
incurred by the record | 7 | | owner pursuant to the installation and the issuance of bonds on | 8 | | a specific or pro rata basis, as
determined by the local unit | 9 | | of government and may also include a prepayment premium. | 10 | | (b-5) A local unit of government may sell or assign, for | 11 | | consideration, any and all
assessment contracts; the permitted | 12 | | assignee of the assessment contract shall have and
possess the | 13 | | same powers and rights at law or in equity as the applicable | 14 | | local unit of government
and its tax collector would have if | 15 | | the assessment contract had not been assigned with regard
to | 16 | | (i) the precedence and priority of liens evidenced by the | 17 | | assessment contract, (ii) the accrual of
interest, and (iii) | 18 | | the fees and expenses of collection. The permitted assignee | 19 | | shall have the same
rights to enforce such liens as any private | 20 | | party holding a lien on real property, including, but not
| 21 | | limited to, foreclosure. Costs and reasonable attorney's fees | 22 | | incurred by the permitted assignee
as a result of any | 23 | | foreclosure action or other legal proceeding brought pursuant | 24 | | to this Section and
directly related to the proceeding shall be | 25 | | assessed in any such proceeding against each record owner | 26 | | subject to the proceedings. Such costs and fees may be |
| | | SB2773 Enrolled | - 7 - | LRB100 17711 RJF 32884 b |
|
| 1 | | collected by the assignee at any
time after demand for payment | 2 | | has been made by the permitted assignee. | 3 | | (c) A program may be administered by one or more a program | 4 | | administrators administrator or the local unit of government.
| 5 | | (Source: P.A. 100-77, eff. 8-11-17.) | 6 | | (50 ILCS 50/15)
| 7 | | Sec. 15. Program established. | 8 | | (a) To establish a property assessed clean energy program, | 9 | | the governing body of a local unit of government shall adopt a | 10 | | resolution or ordinance that includes all of the following: | 11 | | (1) a finding that the financing of energy projects is | 12 | | a valid
public purpose; | 13 | | (2) a statement of intent to facilitate access to | 14 | | capital (which may be from one or more a program | 15 | | administrators) administrator to provide funds for energy | 16 | | projects,
which will be repaid by assessments on the | 17 | | property benefited with the agreement of the record owners; | 18 | | (3) a description of the proposed arrangements for | 19 | | financing
the program , which may be through one or more a | 20 | | program administrators administrator ; | 21 | | (4) the types of energy projects that may be financed; | 22 | | (5) a description of the territory within the PACE | 23 | | area; | 24 | | (6) reference to a report on the proposed program as | 25 | | described
in Section 20; and |
| | | SB2773 Enrolled | - 8 - | LRB100 17711 RJF 32884 b |
|
| 1 | | (7) the time and place for a any public hearing to be | 2 | | held by the local unit of government if required for the | 3 | | adoption of the proposed
program by resolution or | 4 | | ordinance; | 5 | | (8) matters required by Section 20 to be included in | 6 | | the report; for this purpose, the resolution or ordinance | 7 | | may incorporate the report or an
amended version thereof by | 8 | | reference; and | 9 | | (9) a description of which aspects of the program may | 10 | | be
amended without a new public hearing and which aspects | 11 | | may be
amended only after a new public hearing is held. | 12 | | (b) A property assessed clean energy program may be amended | 13 | | by
resolution or ordinance of the governing body. Adoption of | 14 | | the resolution or ordinance shall be preceded by a public
| 15 | | hearing if required.
| 16 | | (Source: P.A. 100-77, eff. 8-11-17; revised 10-3-17.) | 17 | | (50 ILCS 50/20)
| 18 | | Sec. 20. Report. The report on the proposed program | 19 | | required under Section 15 shall include all of the following: | 20 | | (1) a form of assessment contract between the local | 21 | | unit of government and
record owner governing the terms and | 22 | | conditions of financing and assessment under the
program. | 23 | | (2) identification of an official authorized to enter | 24 | | into an a assessment contract
on behalf of the local unit | 25 | | of government; |
| | | SB2773 Enrolled | - 9 - | LRB100 17711 RJF 32884 b |
|
| 1 | | (3) a maximum aggregate annual dollar amount for all | 2 | | financing to be
provided by the applicable program | 3 | | administrator under the program; | 4 | | (4) an application process and eligibility | 5 | | requirements for financing energy
projects under the | 6 | | program; | 7 | | (5) a method for determining interest rates on | 8 | | assessment installments,
repayment periods, and the | 9 | | maximum amount of an assessment; | 10 | | (6) an explanation of how assessments will be made and | 11 | | collected; | 12 | | (7) a plan to raise capital to finance improvements | 13 | | under the program
pursuant to the sale of bonds, subject to | 14 | | this Act or the Special Assessment Supplemental Bond and
| 15 | | Procedures Act, or alternatively, through the sale of
bonds | 16 | | by the Authority pursuant to subsection (d) of Section | 17 | | 825-65 of the Illinois Finance Authority
Act to a program | 18 | | administrator ; | 19 | | (8) information regarding all of the following, to the | 20 | | extent known, or
procedures to determine the following in | 21 | | the future: | 22 | | (A) any revenue source or reserve fund or funds to | 23 | | be used as security for bonds described
in paragraph | 24 | | (7); and | 25 | | (B) any application, administration, or other | 26 | | program fees to be charged
to record owners |
| | | SB2773 Enrolled | - 10 - | LRB100 17711 RJF 32884 b |
|
| 1 | | participating in the program that will be used to
| 2 | | finance costs incurred by the local unit of government | 3 | | as a result of the
program; | 4 | | (9) a requirement that the term of an assessment not | 5 | | exceed the useful life of
the energy project paid for by | 6 | | the assessment; provided that the local unit of government | 7 | | may allow projects that consist of multiple improvements | 8 | | with varying lengths of useful life to have a term that is | 9 | | no greater than the improvement with the longest useful | 10 | | life; | 11 | | (10) a requirement for an appropriate ratio of the | 12 | | amount of the assessment
to the assessed value of the | 13 | | property or market value of the property as determined by a | 14 | | recent
appraisal no older than 12 months; | 15 | | (11) a requirement that the record owner of property | 16 | | subject to a mortgage
obtain written consent from the | 17 | | mortgage holder before participating in the program; | 18 | | (12) provisions for marketing and participant | 19 | | education; | 20 | | (13) provisions for an adequate debt service reserve | 21 | | fund, if any; and | 22 | | (14) quality assurance and antifraud measures.
| 23 | | (Source: P.A. 100-77, eff. 8-11-17.) | 24 | | (50 ILCS 50/25)
| 25 | | Sec. 25. Contracts with record owners of property. |
| | | SB2773 Enrolled | - 11 - | LRB100 17711 RJF 32884 b |
|
| 1 | | (a) After creation of a program and PACE area, a record | 2 | | owner of property within the PACE area may apply with the local | 3 | | unit of government or its program administrator or | 4 | | administrators for funding to finance an energy project. | 5 | | (b) A local unit of government may impose an assessment | 6 | | under a property
assessed clean energy program only pursuant to | 7 | | the terms of a recorded assessment contract with the
record | 8 | | owner of the property to be assessed. | 9 | | (c) Before entering into an assessment contract with a | 10 | | record owner under
a program, the local unit of government | 11 | | shall verify all of the following: | 12 | | (1) that the property is within the PACE area; | 13 | | (2) that there are no delinquent taxes, special | 14 | | assessments, or
water or sewer charges on the property; | 15 | | (3) that there are no delinquent assessments on the | 16 | | property under
a property assessed clean energy program; | 17 | | (4) there are no involuntary liens on the property, | 18 | | including, but
not limited to, construction or mechanics | 19 | | liens, lis pendens or judgments against the
record owner, | 20 | | environmental proceedings, or eminent domain
proceedings; | 21 | | (5) that no notices of default or other evidence of | 22 | | property-based
debt delinquency have been recorded and not | 23 | | cured; | 24 | | (6) that the record owner is current on all mortgage | 25 | | debt on the
property, the record owner has not filed for | 26 | | bankruptcy in the last 2 years, and the property is not an |
| | | SB2773 Enrolled | - 12 - | LRB100 17711 RJF 32884 b |
|
| 1 | | asset to a current bankruptcy. | 2 | | (7) all work requiring a license under any applicable | 3 | | law to make a
qualifying improvement shall be performed by | 4 | | a registered contractor that has agreed to adhere to a set | 5 | | of terms and conditions through a process established by | 6 | | the local unit of government. | 7 | | (8) the contractors to be used have signed a written | 8 | | acknowledgement that the local unit of government will not | 9 | | authorize final payment to the contractor until the local | 10 | | unit of government has received written confirmation from | 11 | | the record owner that the improvement was properly | 12 | | installed and is operating as intended; provided, however, | 13 | | that the contractor retains all legal rights and remedies | 14 | | in the event there is a disagreement with the owner; | 15 | | (9) that the amount of the assessment in relation to | 16 | | the greater of the assessed value of the property or the | 17 | | appraised value of the property, as determined by a | 18 | | licensed appraiser, does not exceed 25%; and | 19 | | (10) a requirement that an assessment of the existing | 20 | | water or energy use and a modeling of expected monetary | 21 | | savings have been conducted for any proposed project. | 22 | | (d) At least 30 days before entering into an assessment | 23 | | contract agreement with
the local unit of government, the | 24 | | record owner shall provide to the holders or
loan servicers of | 25 | | any existing mortgages encumbering or otherwise
secured by the | 26 | | property a notice of the record owner's intent to enter
into an |
| | | SB2773 Enrolled | - 13 - | LRB100 17711 RJF 32884 b |
|
| 1 | | assessment contract with the local unit of government, together | 2 | | with the maximum principal amount to be financed and the
| 3 | | maximum annual assessment necessary to repay that amount, along
| 4 | | with a request that the holders or loan servicers of any | 5 | | existing
mortgages consent to the record owner subjecting the | 6 | | property to the
program. A verified copy or other proof of | 7 | | those notices and the written
consent of the existing mortgage | 8 | | holder for the record owner to enter
into the assessment | 9 | | contract and acknowledging that the existing
mortgage will be | 10 | | subordinate to the financing and assessment
agreement and that | 11 | | the local unit of government or its permitted assignee can | 12 | | foreclose the
property if the assessment is not paid shall be | 13 | | 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 |
| | | SB2773 Enrolled | - 14 - | LRB100 17711 RJF 32884 b |
|
| 1 | | authority
or limitation upon such authority.
| 2 | | (h) The imposition of any assessment pursuant to this Act | 3 | | shall be exempt from any
other statutory procedures or | 4 | | requirements that condition the imposition of assessments or | 5 | | other
taxes against a property, except as set forth in this | 6 | | Act. | 7 | | (Source: P.A. 100-77, eff. 8-11-17.) | 8 | | (50 ILCS 50/30)
| 9 | | Sec. 30. Assessments constitute a lien; billing. | 10 | | (a) An assessment imposed under a property assessed clean | 11 | | energy
program pursuant to an assessment contract , including | 12 | | any interest on the assessment and any penalty, shall , upon | 13 | | recording of the assessment contract in the county in which the | 14 | | PACE area is located, constitute a lien
against the property on | 15 | | which the assessment is imposed until the assessment, including | 16 | | any
interest or penalty, is paid in full. The lien of the | 17 | | assessment contract shall run with the
property until the | 18 | | assessment is paid in full and a satisfaction or release for | 19 | | the same has been recorded with the local unit of government | 20 | | and shall have the same priority and status as other property | 21 | | tax and assessment liens. The
local unit of government (or any | 22 | | permitted assignee) shall have all rights and remedies in the | 23 | | case of default or
delinquency in the payment of an assessment | 24 | | as it does with respect to delinquent property
taxes. When the | 25 | | assessment, including any interest and penalty, is paid, the |
| | | SB2773 Enrolled | - 15 - | LRB100 17711 RJF 32884 b |
|
| 1 | | lien shall be
removed from the property. | 2 | | (a-5) The assessment shall be imposed by the local unit of | 3 | | government
against each lot, block, track and parcel of land | 4 | | within the PACE area to be assessed in accordance with an
| 5 | | assessment roll setting forth: (i) a description of the method | 6 | | of spreading the assessment; (ii) a
list of lots, blocks, | 7 | | tracts and parcels of land in the PACE area; and (iii) the | 8 | | amount assessed on
each parcel. The assessment roll shall be | 9 | | filed with the county clerk of the county in which the PACE | 10 | | area is
located for use in establishing the lien and collecting | 11 | | the assessment. | 12 | | (b) Installments of assessments due under a program may be | 13 | | included in
each tax bill issued under the Property Tax Code | 14 | | and may be collected at the
same time and in the same manner as | 15 | | taxes collected under the Property Tax Code. Alternatively, | 16 | | installments may be billed and collected as provided in a | 17 | | special assessment
ordinance of general applicability adopted | 18 | | by the local unit of government pursuant to State
law or local | 19 | | charter. In no event will partial payment of an assessment be | 20 | | allowed.
| 21 | | (Source: P.A. 100-77, eff. 8-11-17.) | 22 | | (50 ILCS 50/35)
| 23 | | Sec. 35. Bonds. | 24 | | (a) A local unit of government may issue bonds under this | 25 | | Act or the Special Assessment Supplemental Bond and Procedures |
| | | SB2773 Enrolled | - 16 - | LRB100 17711 RJF 32884 b |
|
| 1 | | Act , or the Authority may issue bonds under subsection (d) of | 2 | | Section 825-65 of the Illinois Finance Authority Act upon | 3 | | assignment of the assessment contracts securing
such bonds by | 4 | | the local unit of government to the Authority, in either case | 5 | | to finance energy projects
under a property assessed clean | 6 | | energy program. Interim financing prior to the issuance of | 7 | | bonds authorized by this Section may be provided only by a | 8 | | warehouse fund, except that warehouse funds established by a | 9 | | warehouse lender may only hold assessment contracts for 36 | 10 | | months or less. | 11 | | (b) Bonds issued under subsection (a) shall not be general | 12 | | obligations of the
local unit of government or the Authority , | 13 | | but shall be secured by the following as provided
by the | 14 | | governing body in the resolution or ordinance approving the | 15 | | bonds: | 16 | | (1) payments of assessments on benefited property | 17 | | within the
PACE area or areas specified; and | 18 | | (2) if applicable, revenue sources or reserves | 19 | | established by the local unit of government or the | 20 | | Authority from bond
proceeds or other lawfully available | 21 | | funds. | 22 | | (c) A pledge of assessments, funds, or contractual rights | 23 | | made by a
governing body in connection with the issuance of | 24 | | bonds by a local unit of government under
this Act constitutes | 25 | | a statutory lien on the assessments, funds, or contractual | 26 | | rights so pledged in
favor of the person or persons to whom the |
| | | SB2773 Enrolled | - 17 - | LRB100 17711 RJF 32884 b |
|
| 1 | | pledge is given, without further action by the
governing body. | 2 | | The statutory lien is valid and binding against all other | 3 | | persons, with or
without notice. | 4 | | (d) Bonds of one series issued under this Act may be | 5 | | secured on a parity with
bonds of another series issued by the | 6 | | local unit of government or the Authority pursuant to the terms | 7 | | of a master indenture or master resolution entered into or | 8 | | adopted by the governing body of the
local unit of government | 9 | | or the Authority . | 10 | | (e) Bonds issued under this Act are subject to the Bond | 11 | | Authorization Act and the Registered Bond Act. | 12 | | (f) Bonds issued under this Act further essential public | 13 | | and governmental purposes, including, but not limited to, | 14 | | reduced energy costs, reduced greenhouse gas emissions,
| 15 | | economic stimulation and development, improved property | 16 | | valuation, and increased
employment. | 17 | | (g) A program administrator can assign its rights to | 18 | | purchase the bonds to a third party (the "bond purchaser") . | 19 | | (h) A program administrator shall retain a law firm shall | 20 | | be retained to give a bond opinion in connection with any bond | 21 | | issued under this Act for the benefit of the program | 22 | | administrator or bond purchaser .
| 23 | | (i) Bonds issued by the Authority under this Act and | 24 | | pursuant to subsection (d) of Section 825-65 of
the Illinois | 25 | | Finance Authority Act shall not be entitled to the benefits of | 26 | | Section 825-75 of the
Illinois Finance Authority Act. |
| | | SB2773 Enrolled | - 18 - | LRB100 17711 RJF 32884 b |
|
| 1 | | (Source: P.A. 100-77, eff. 8-11-17.)
|
|