Bill Text: IL SB2773 | 2017-2018 | 100th General Assembly | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Amends the Illinois Governmental Ethics Act. Makes a technical change in a Section concerning the short title.

Spectrum: Bipartisan Bill

Status: (Passed) 2018-08-19 - Public Act . . . . . . . . . 100-0980 [SB2773 Detail]

Download: Illinois-2017-SB2773-Enrolled.html

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AN ACT concerning government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Property Assessed Clean Energy Act is
amended by changing Sections 5, 10, 15, 20, 25, 30, and 35 as
follows:
(50 ILCS 50/5)
Sec. 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 (or a permitted assignee)
and record owner governing the terms and conditions of
financing and assessment under a program.
"Authority" means the Illinois Finance Authority.
"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

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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
(8.1) any energy efficiency project, as defined in
Section 825-65 of the Illinois Finance Authority Act; and
(9) any other installation or modification of
equipment, devices, or materials approved as a utility

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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 (including 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.
"Permitted assignee" means (i) any body politic and
corporate, (ii) any bond trustee, or (iii) any warehouse
lender, or any other assignee of a local unit of government
designated in an assessment contract.
"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, but
does include other governmental entities that are not local
units of government.
"Program administrator" means a for-profit entity or
not-for profit entity that will administer a program on behalf

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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 or the Authority 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

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on the customer's side of the meter that use one or more
renewable energy resources to generate electricity, and
specifically includes any renewable energy project, as defined
in Section 825-65 of the Illinois Finance Authority Act.
"Warehouse fund" means any fund established by a local unit
of government, body politic and corporate, or warehouse lender.
"Warehouse lender" means any financial institution
participating in a PACE area that finances an energy project
from lawfully available funds in anticipation of issuing bonds
as described in Section 35.
"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.
(Source: P.A. 100-77, eff. 8-11-17.)
(50 ILCS 50/10)
Sec. 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

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for the repayment of the cost of an energy project through
assessments upon the property benefited. The financing or
refinancing may include any and all of the following: the cost
of materials and labor necessary for installation, permit fees,
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.
(b-5) A local unit of government may sell or assign, for
consideration, any and all assessment contracts; the permitted
assignee of the assessment contract shall have and possess the
same powers and rights at law or in equity as the applicable
local unit of government and its tax collector would have if
the assessment contract had not been assigned with regard to
(i) the precedence and priority of liens evidenced by the
assessment contract, (ii) the accrual of interest, and (iii)
the fees and expenses of collection. The permitted assignee
shall have the same rights to enforce such liens as any private
party holding a lien on real property, including, but not
limited to, foreclosure. Costs and reasonable attorney's fees
incurred by the permitted assignee as a result of any
foreclosure action or other legal proceeding brought pursuant
to this Section and directly related to the proceeding shall be
assessed in any such proceeding against each record owner
subject to the proceedings. Such costs and fees may be

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collected by the assignee at any time after demand for payment
has been made by the permitted assignee.
(c) A program may be administered by one or more a program
administrators administrator or the local unit of government.
(Source: P.A. 100-77, eff. 8-11-17.)
(50 ILCS 50/15)
Sec. 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 (which may be from one or more a program
administrators) 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, which may be through one or more a
program administrators 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

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(7) the time and place for a any public hearing to be
held by the local unit of government if 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
hearing if required.
(Source: P.A. 100-77, eff. 8-11-17; revised 10-3-17.)
(50 ILCS 50/20)
Sec. 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 an a assessment contract on behalf of the local unit
of government;

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(3) a maximum aggregate annual dollar amount for all
financing to be provided by the applicable 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
this Act or the Special Assessment Supplemental Bond and
Procedures Act, or alternatively, through the sale of bonds
by the Authority pursuant to subsection (d) of Section
825-65 of the Illinois Finance Authority 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

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participating in the program that will be used to
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.
(Source: P.A. 100-77, eff. 8-11-17.)
(50 ILCS 50/25)
Sec. 25. Contracts with record owners of property.

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(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 or
administrators 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

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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 assessment
contract agreement with 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

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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 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 or its permitted assignee 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
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

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authority or limitation upon such authority.
(h) The imposition of any assessment pursuant to this Act
shall be exempt from any other statutory procedures or
requirements that condition the imposition of assessments or
other taxes against a property, except as set forth in this
Act.
(Source: P.A. 100-77, eff. 8-11-17.)
(50 ILCS 50/30)
Sec. 30. Assessments constitute a lien; billing.
(a) An assessment imposed under a property assessed clean
energy program pursuant to an assessment contract, including
any interest on the assessment and any penalty, shall, upon
recording of the assessment contract in the county in which the
PACE area is located, 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 (or any
permitted assignee) shall have all rights and remedies in the
case of default or 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

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lien shall be removed from the property.
(a-5) The assessment shall be imposed by the local unit of
government against each lot, block, track and parcel of land
within the PACE area to be assessed in accordance with an
assessment roll setting forth: (i) a description of the method
of spreading the assessment; (ii) a list of lots, blocks,
tracts and parcels of land in the PACE area; and (iii) the
amount assessed on each parcel. The assessment roll shall be
filed with the county clerk of the county in which the PACE
area is located for use in establishing the lien and collecting
the assessment.
(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.
(Source: P.A. 100-77, eff. 8-11-17.)
(50 ILCS 50/35)
Sec. 35. Bonds.
(a) A local unit of government may issue bonds under this
Act or the Special Assessment Supplemental Bond and Procedures

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Act, or the Authority may issue bonds under subsection (d) of
Section 825-65 of the Illinois Finance Authority Act upon
assignment of the assessment contracts securing such bonds by
the local unit of government to the Authority, in either case
to finance energy projects under a property assessed clean
energy program. Interim financing prior to the issuance of
bonds authorized by this Section may be provided only by a
warehouse fund, except that warehouse funds established by a
warehouse lender may only hold assessment contracts for 36
months or less.
(b) Bonds issued under subsection (a) shall not be general
obligations of the local unit of government or the Authority,
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 or the
Authority from bond 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

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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 or the Authority 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
or the Authority.
(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,
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 shall
be retained to give a bond opinion in connection with any bond
issued under this Act for the benefit of the program
administrator or bond purchaser.
(i) Bonds issued by the Authority under 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.

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(Source: P.A. 100-77, eff. 8-11-17.)