Bill Text: IL HB2831 | 2017-2018 | 100th General Assembly | Enrolled
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Creates the Property Assessed Clean Energy Act. Provides that a local unit of government may establish a property assessed clean energy program. Provides that, to finance or refinance one or more energy projects on the property covered by the program, a local unit of government may impose an assessment pursuant to the terms of an assessment contract with the record owner of the property to be assessed. Provides that a local unit of government may issue bonds to finance energy projects under a property assessed clean energy program. Contains other provisions. Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 14-6)
Status: (Passed) 2017-08-11 - Public Act . . . . . . . . . 100-0077 [HB2831 Detail]
Download: Illinois-2017-HB2831-Enrolled.html
Bill Title: Creates the Property Assessed Clean Energy Act. Provides that a local unit of government may establish a property assessed clean energy program. Provides that, to finance or refinance one or more energy projects on the property covered by the program, a local unit of government may impose an assessment pursuant to the terms of an assessment contract with the record owner of the property to be assessed. Provides that a local unit of government may issue bonds to finance energy projects under a property assessed clean energy program. Contains other provisions. Effective immediately.
Spectrum: Slight Partisan Bill (Democrat 14-6)
Status: (Passed) 2017-08-11 - Public Act . . . . . . . . . 100-0077 [HB2831 Detail]
Download: Illinois-2017-HB2831-Enrolled.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | "Section 1. Short title. This Act may be cited as the | ||||||
5 | Property Assessed Clean Energy Act.
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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.
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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
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9 | refinancing may include any and all of the following: the cost | ||||||
10 | of materials and labor necessary for installation, permit fees,
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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.
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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
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23 | hearing if required.
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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
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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
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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
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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
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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.
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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
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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
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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.
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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
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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,
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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.
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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.
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3 | Section 99. Effective date. This Act takes effect upon | ||||||
4 | becoming law.
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