Full Text of HB2831 100th General Assembly
HB2831 100TH GENERAL ASSEMBLY |
| | 100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018 HB2831 Introduced , by Rep. Lou Lang SYNOPSIS AS INTRODUCED: |
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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.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 1. Short title. This Act may be cited as the | 5 | | Property Assessed Clean Energy Act. | 6 | | Section 5. Definitions. As used in this Act: | 7 | | "Assessment contract" means a contract between the local | 8 | | unit
of government and record owner governing the terms and | 9 | | conditions of financing and
assessment under a program. | 10 | | "District" means a district created by a local unit of | 11 | | government under a property assessed clean energy
program that | 12 | | lies within the local unit of government's
jurisdictional | 13 | | boundaries. A local unit of government may create more than one | 14 | | district under
the program, and districts may be separate, | 15 | | overlapping, or coterminous. | 16 | | "Energy efficiency improvement" means equipment, devices, | 17 | | or materials
intended to decrease energy consumption or promote | 18 | | a more efficient use of electricity, natural gas,
propane, or | 19 | | other forms of energy on property, including, but not limited | 20 | | to, all of the
following: | 21 | | (1) insulation in walls, roofs, floors, foundations, | 22 | | or heating and
cooling distribution systems; | 23 | | (2) storm windows and doors, multi-glazed windows and |
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| 1 | | doors, heat-absorbing
or heat-reflective glazed and coated | 2 | | window and door systems, and additional glazing, | 3 | | reductions in glass area, and other window and
door system | 4 | | modifications that reduce energy consumption; | 5 | | (3) automated energy control systems; | 6 | | (4) energy efficient heating, ventilating, or | 7 | | air-conditioning and
distribution system modifications or | 8 | | replacements; | 9 | | (5) caulking, weather-stripping, and air sealing; | 10 | | (6) replacement or modification of lighting fixtures | 11 | | to reduce the
energy use of the lighting system; | 12 | | (7) energy controls or recovery systems; | 13 | | (8) day lighting systems; | 14 | | (9) installation or upgrade of electrical wiring or | 15 | | outlets to charge a
motor vehicle that is fully or | 16 | | partially powered by electricity; | 17 | | (10) measures to reduce the usage of water or increases | 18 | | the efficiency
of water usage; | 19 | | (11) any other installation or modification of | 20 | | equipment, devices, or
materials approved as a utility | 21 | | cost-savings measure by the governing
body; | 22 | | (12) wind resistance improvements including, but not | 23 | | limited to: | 24 | | (A) improving the strength of the roof deck | 25 | | attachment; | 26 | | (B) creating a secondary water barrier to prevent |
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| 1 | | water
intrusion; | 2 | | (C) installing wind-resistant shingles; | 3 | | (D) installing gable-end bracing; | 4 | | (E) reinforcing roof-to-wall connections; | 5 | | (F) installing storm shutters; or | 6 | | (G) installing opening protections. | 7 | | "Energy project" means the installation or modification of | 8 | | an energy
efficiency improvement or the acquisition, | 9 | | installation, or improvement of a renewable energy
system that | 10 | | is affixed to a stabilized existing property (not new | 11 | | construction). | 12 | | "Governing body" means the county board or board of county | 13 | | commissioners of a county, the board of trustees of a township, | 14 | | the city council of a city, or the board of trustees of a | 15 | | village. | 16 | | "Local unit of government" means a county or municipality. | 17 | | "Person" means an individual, firm, partnership, | 18 | | association, corporation,
unincorporated joint venture, or | 19 | | trust. "Person" does not include a local unit of government or | 20 | | a homeowner's or condominium association. | 21 | | "Program administrator" means a for-profit entity or | 22 | | not-for profit entity that will administer a program on behalf | 23 | | of or at the discretion of the local unit of government. It or | 24 | | its affiliates shall have done business in Illinois for a | 25 | | minimum of 5 years and shall be responsible for providing | 26 | | capital for the acquisition of bonds issued by the local unit |
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| 1 | | of government to finance energy projects. | 2 | | "Property" means privately-owned commercial, industrial, | 3 | | vacant and multi-family (of 4 or more units) real property
| 4 | | located within the local unit of government. | 5 | | "Property assessed clean energy program" or "program" | 6 | | means a
program as described in Section 10. | 7 | | "Record owner" means the titleholder or owner of the | 8 | | beneficial interest. | 9 | | "Renewable energy resource" means a resource that | 10 | | naturally replenishes
over a human, not a geological, time | 11 | | frame and that is ultimately derived from solar power, water
| 12 | | power, or wind power. The term "renewable energy resource" does | 13 | | not include petroleum, nuclear, natural
gas, or coal. A | 14 | | Renewable Energy Resource comes from the sun or from thermal | 15 | | inertia of the
earth and minimizes the output of toxic material | 16 | | in the conversion of the energy, and includes, but
is not | 17 | | limited to, all of the following: | 18 | | (1) biomass or bioenergy; | 19 | | (2) solar and solar thermal energy; | 20 | | (3) wind energy; | 21 | | (4) geothermal energy; | 22 | | (5) methane gas captured from a landfill; and | 23 | | (6) hydrogen | 24 | | "Renewable energy system" means a fixture, product, | 25 | | device, or
interacting group of fixtures, products, or devices | 26 | | on the customer's side of the meter that use one or more |
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| 1 | | renewable energy resources to generate electricity. Renewable | 2 | | energy system
includes a biomass stove but does not include an | 3 | | incinerator or digester. | 4 | | Section 10. Property assessed clean energy program; | 5 | | creation. | 6 | | (a) Pursuant to the procedures provided in Section 15, a | 7 | | local unit of
government may establish a property assessed | 8 | | clean energy program and may, from time to
time, create a | 9 | | district or districts under the program. | 10 | | (b) Under a program, the local unit of government may enter | 11 | | into an assessment
contract with the record owner of property | 12 | | within a district to finance or refinance one or
more energy | 13 | | projects on the property. The assessment contract shall provide | 14 | | for the repayment of the cost
of an energy project through | 15 | | assessments upon the property benefited. The financing or
| 16 | | refinancing may include any and all of the following: the cost | 17 | | of materials and labor necessary for installation, permit fees,
| 18 | | inspection fees, application and administrative fees, bank | 19 | | fees, and all other fees that may be
incurred by the record | 20 | | owner pursuant to the installation and the issuance of bonds on | 21 | | a specific or pro rata basis, as
determined by the local unit | 22 | | of government and may also include a prepayment premium. | 23 | | (c) A program may be administered by a program | 24 | | administrator or the local unit of government. |
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| 1 | | Section 15. Program established. | 2 | | (a) To establish a property assessed clean energy program, | 3 | | the governing body of a local unit of government shall take the | 4 | | following actions: | 5 | | (1) adopt a resolution or ordinance of intent that | 6 | | includes all of the following: | 7 | | (A) a finding that the financing of energy projects | 8 | | is a valid
public purpose; | 9 | | (B) a statement of intent to facilitate access to | 10 | | capital from a program administrator to provide funds | 11 | | for energy projects,
which will be repaid by | 12 | | assessments on the property benefited with the | 13 | | agreement of the record owners; | 14 | | (C) a description of the proposed arrangements for | 15 | | financing
the program through a program administrator; | 16 | | (D) the types of energy projects that may be | 17 | | financed; | 18 | | (E) reference to a report on the proposed program | 19 | | as described
in Section 20; and | 20 | | (F) the time and place for any public hearing | 21 | | required for the adoption of the proposed
program by | 22 | | resolution or ordinance; | 23 | | (2) adopt a resolution or ordinance establishing the | 24 | | program and setting forth its
terms and conditions, | 25 | | including all of the following: | 26 | | (A) matters required by Section 20 to be included |
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| 1 | | in the report; for this purpose, the resolution or | 2 | | ordinance may incorporate the report or an
amended | 3 | | version thereof by reference; and | 4 | | (B) a description of which aspects of the program | 5 | | may be
amended without a new public hearing and which | 6 | | aspects may be
amended only after a new public hearing | 7 | | is held. | 8 | | (b) A property assessed clean energy program may be amended | 9 | | by
resolution or ordinance of the governing body. Adoption of | 10 | | the resolution or ordinance shall be preceded by a public
| 11 | | hearing if required pursuant to paragraph (3) of subsection (a) | 12 | | of this Section. | 13 | | Section 20. Report. The report on the proposed program | 14 | | required under Section 15 shall include all of the following: | 15 | | (1) a form of assessment contract between the local | 16 | | unit of government and
record owner governing the terms and | 17 | | conditions of financing and assessment under the
program. | 18 | | (2) identification of an official authorized to enter | 19 | | into a assessment contract
on behalf of the local unit of | 20 | | government; | 21 | | (3) a maximum aggregate annual dollar amount for all | 22 | | financing to be
provided by the program administrator under | 23 | | the program; | 24 | | (4) an application process and eligibility | 25 | | requirements for financing energy
projects under the |
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| 1 | | program; | 2 | | (5) a method for determining interest rates on | 3 | | assessment installments,
repayment periods, and the | 4 | | maximum amount of an assessment; | 5 | | (6) an explanation of how assessments will be made and | 6 | | collected; | 7 | | (7) a plan to raise capital to finance improvements | 8 | | under the program
pursuant to the sale of bonds, subject to | 9 | | the Special Assessment Supplemental Bond and
Procedures | 10 | | Act, from a program administrator; | 11 | | (8) information regarding all of the following, to the | 12 | | extent known, or
procedures to determine the following in | 13 | | the future: | 14 | | (A) any revenue source or reserve fund or funds to | 15 | | be used as security for bonds described
in paragraph | 16 | | (7); and | 17 | | (B) any application, administration, or other | 18 | | program fees to be charged
to record owners | 19 | | participating in the program that will be used to
| 20 | | finance costs incurred by the local unit of government | 21 | | as a result of the
program; | 22 | | (9) a requirement that the term of an assessment not | 23 | | exceed the useful life of
the energy project paid for by | 24 | | the assessment; provided that projects that consist of | 25 | | multiple improvements with varying lengths of useful life | 26 | | shall have the lengths blended to determine an overall term |
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| 1 | | that does not exceed the useful life of the improvements in | 2 | | aggregate; | 3 | | (10) a requirement for an appropriate ratio of the | 4 | | amount of the assessment
to the assessed value of the | 5 | | property or market value of the property as determined by a | 6 | | recent
appraisal no older than 12 months; | 7 | | (11) a requirement that the record owner of property | 8 | | subject to a mortgage
obtain written consent from the | 9 | | mortgage holder before participating in the program; | 10 | | (12) provisions for marketing and participant | 11 | | education; | 12 | | (13) provisions for an adequate debt service reserve | 13 | | fund, if any; and | 14 | | (14) quality assurance and antifraud measures. | 15 | | Section 25. Contracts with record owners of property. | 16 | | (a) A local unit of government may impose an assessment | 17 | | under a property
assessed clean energy program only pursuant to | 18 | | the terms of a recorded assessment contract with the
record | 19 | | owner of the property to be assessed. | 20 | | (b) Before entering into an assessment contract with a | 21 | | record owner under
a program, the local unit of government | 22 | | shall verify all of the following: | 23 | | (1) that there are no delinquent taxes, special | 24 | | assessments, or
water or sewer charges on the property; | 25 | | (2) that there are no delinquent assessments on the |
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| 1 | | property under
a property assessed clean energy program; | 2 | | (3) there are no involuntary liens on the property, | 3 | | including, but
not limited to, construction or mechanics | 4 | | liens, lis pendens or judgments against the
record owner, | 5 | | environmental proceedings, or eminent domain
proceedings; | 6 | | (4) that no notices of default or other evidence of | 7 | | property-based
debt delinquency have been recorded and not | 8 | | cured; | 9 | | (5) that the record owner is current on all mortgage | 10 | | debt on the
property, the record owner has not filed for | 11 | | bankruptcy in the last 2 years, and the property is not an | 12 | | asset to a current bankruptcy. | 13 | | (6) all work requiring a license under any applicable | 14 | | law to make a
qualifying improvement shall be performed by | 15 | | a registered contractor that has agreed to adhere to a set | 16 | | of terms and conditions through a process established by | 17 | | the local unit of government. | 18 | | (7) at the option of the local unit of government, the | 19 | | contractors to be used have signed a written | 20 | | acknowledgement that the local unit of government will not | 21 | | authorize final payment to the contractor until the local | 22 | | unit of government has received written confirmation from | 23 | | the record owner that the improvement was properly | 24 | | installed and is operating as intended; | 25 | | (8) that the amount of tax in relation to the greater | 26 | | of the assessed value of the property or the appraised |
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| 1 | | value of the property, as determined by a licensed | 2 | | appraiser, does not exceed 25%; and | 3 | | (9) a requirement that an assessment of the existing | 4 | | water or energy use and a modeling of expected monetary | 5 | | savings have been conducted for any proposed project. | 6 | | (c) At least 30 days before entering into an agreement with
| 7 | | the local unit of government, the record owner shall provide to | 8 | | the holders or
loan servicers of any existing mortgages | 9 | | encumbering or otherwise
secured by the property a notice of | 10 | | the record owner's intent to enter
into an assessment contract | 11 | | with the local unit of government, together with the maximum | 12 | | principal amount to be financed and the
maximum annual | 13 | | assessment necessary to repay that amount, along
with a request | 14 | | that the holders or loan servicers of any existing
mortgages | 15 | | consent to the record owner subjecting the property to the
| 16 | | program. A verified copy or other proof of those notices and | 17 | | the written
consent of the existing mortgage holder for the | 18 | | record owner to enter
into the assessment contract and | 19 | | acknowledging that the existing
mortgage will be subordinate to | 20 | | the financing and assessment
agreement and that the local unit | 21 | | of government can foreclose the
property if the assessment is | 22 | | not paid shall be provided to the local
unit of government. A | 23 | | provision in any agreement between a
mortgagee or other | 24 | | lienholder and a record owner, or any other provision that is | 25 | | binding upon a record owner, which allows for
acceleration of | 26 | | payment of the mortgage, note, or lien, or other
unilateral |
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| 1 | | modification solely as a result of entering into an agreement
| 2 | | as provided for in this Section is not enforceable. This | 3 | | subsection does
not limit the authority of the holder or loan | 4 | | servicer to increase the
required monthly escrow by an amount | 5 | | necessary to annually pay the
qualifying energy efficiency | 6 | | improvement. | 7 | | (d) A provision in any agreement between a local unit of
| 8 | | government and a public or private power or energy provider or | 9 | | other
utility provider is not enforceable to limit or prohibit | 10 | | any local unit of
government from exercising its authority | 11 | | under this Section. | 12 | | (e) The record owner has signed a certification that the | 13 | | local unit of government has complied with the provisions of | 14 | | this Section, which shall be conclusive evidence as to | 15 | | compliance with these provisions, but shall not relieve any | 16 | | contractor, or local unit of government, from any potential | 17 | | liability. | 18 | | (f) This Section is additional and supplemental to county | 19 | | and
municipal home rule authority and not in derogation of such | 20 | | authority
or limitation upon such authority. | 21 | | Section 30. Assessments constitute a lien; billing. | 22 | | (a) An assessment imposed under a property assessed clean | 23 | | energy
program, including any interest on the assessment and | 24 | | any penalty, shall constitute a lien
against the property on | 25 | | which the assessment is imposed until the assessment, including |
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| 1 | | any
interest or penalty, is paid in full. The lien of the | 2 | | assessment contract shall run with the
property until the | 3 | | assessment is paid in full and a satisfaction or release for | 4 | | the same has been recorded with the local unit of government | 5 | | and shall have the same priority and status as other property | 6 | | tax and assessment liens. The
local unit of government shall | 7 | | have all rights and remedies in the case of default or
| 8 | | delinquency in the payment of an assessment as it does with | 9 | | respect to delinquent property
taxes. When the assessment, | 10 | | including any interest and penalty, is paid, the lien shall be
| 11 | | removed from the property. | 12 | | (b) Installments of assessments due under a program shall | 13 | | be included in
each tax bill issued under the Property Tax Code | 14 | | and shall be collected at the
same time and in the same manner | 15 | | as 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 | | Section 35. Bonds. | 22 | | (a) A local unit of government may issue bonds under the | 23 | | Special Assessment Supplemental Bond and Procedures Act to | 24 | | finance energy projects
under a property assessed clean energy | 25 | | program. |
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| 1 | | (b) Bonds issued under subsection (a) shall not be general | 2 | | obligations of the
local unit of government, but shall be | 3 | | secured by the following as provided
by the governing body in | 4 | | the resolution or ordinance approving the bonds: | 5 | | (1) payments of assessments on benefited property | 6 | | within the
district or districts specified; and | 7 | | (2) if applicable, revenue sources or reserves | 8 | | established by the local unit of government from bond
| 9 | | proceeds or other lawfully available funds. | 10 | | (c) A pledge of assessments, funds, or contractual rights | 11 | | made by a
governing body in connection with the issuance of | 12 | | bonds by a local unit of government under
this Act constitutes | 13 | | a statutory lien on the assessments, funds, or contractual | 14 | | rights so pledged in
favor of the person or persons to whom the | 15 | | pledge is given, without further action by the
governing body. | 16 | | The statutory lien is valid and binding against all other | 17 | | persons, with or
without notice. | 18 | | (d) Bonds of one series issued under this Act may be | 19 | | secured on a parity with
bonds of another series issued by the | 20 | | local unit of government pursuant to the terms of a master | 21 | | indenture or master resolution entered into or adopted by the | 22 | | governing body of the
local unit of government. | 23 | | (e) Bonds issued under this Act are subject to the Bond | 24 | | Authorization Act and the Registered Bond Act. | 25 | | (f) Bonds issued under this Act further essential public | 26 | | and governmental purposes, including, but not limited to, |
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| 1 | | reduced energy costs, reduced greenhouse gas emissions,
| 2 | | economic stimulation and development, improved property | 3 | | valuation, and increased
employment. | 4 | | (g) A program administrator can assign its rights to | 5 | | purchase the bonds to a third party (the "bond purchaser"). | 6 | | (h) A program administrator shall retain a law firm to give | 7 | | a bond opinion for the benefit of the program administrator or | 8 | | bond purchaser. | 9 | | Section 40. Joint property assessed clean
energy programs. | 10 | | (a) A local unit of government may join with any other | 11 | | local unit of
government, or with any public or private person, | 12 | | or with any number or combination thereof, under the | 13 | | Intergovernmental Cooperation Act, by contract or
otherwise as | 14 | | may be permitted by law, for the implementation of a property | 15 | | assessed clean
energy program, in whole or in part. | 16 | | (b) If a program is implemented jointly by
2 or more local | 17 | | units of government pursuant to subsection (a), a single public | 18 | | hearing
held jointly by the cooperating local units of | 19 | | government is sufficient to satisfy the requirements
of this | 20 | | Act.
| 21 | | Section 99. Effective date. This Act takes effect upon | 22 | | becoming law.
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