SB 1700 — PROPERTY-CLEAN ENERGY

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(1)"Renewable biomassenergy system" means a fixture, product, device, or bioenergy;interacting group of fixtures, products, or devices on the customer's side of the meter that use one or more renewable energy resources to generate electricity.

(2)"Water solaruse andimprovement" solarmeans thermalany energy;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.

(3)(Source: wind energy;

(4)10000HB2831eng.) geothermalSB1700 energy;Engrossed - 5 - LRB100 11334 HLH 21711 b (10000HB2831eng, Sec.

(5)25) methaneSec. gas captured from a landfill;

and25. (6) hydrogen "Renewable energy system" means a fixture, product, device, or interacting group of fixtures, products, or devices on the customer's side of the meter that use one or more SB1700 - 5 - LRB100 11334 HLH 21711 b renewable energy resources to generate electricity.

Renewable energy system includes a biomass stove but does not include an incinerator or digester.

Section 10.

Property assessed clean energy program;

creation.

(a) Pursuant to the procedures provided in Section 15, a local unit of government may establish a property assessed clean energy program and may, from time to time, create a district or districts 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 district to finance or refinance one or more energy projects on the property.

The assessment contract shall provide for the repayment of the cost of an energy project through assessments upon the property benefited.

The financing or 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.

(c) A program may be administered by a program administrator or the local unit of government.

SB1700 - 6 - LRB100 11334 HLH 21711 b Section 15.

Program established.

(a) To establish a property assessed clean energy program, the governing body of a local unit of government shall take the following actions:

(1) adopt a resolution or ordinance of intent that includes all of the following:

(A) a finding that the financing of energy projects is a valid public purpose;

(B) a statement of intent to facilitate access to capital from a program administrator to provide funds for energy projects, which will be repaid by assessments on the property benefited with the agreement of the record owners;

(C) a description of the proposed arrangements for financing the program through a program administrator;

(D) the types of energy projects that may be financed;

(E) reference to a report on the proposed program as described in Section 20;

and (F) the time and place for any public hearing required for the adoption of the proposed program by resolution or ordinance;

(2) adopt a resolution or ordinance establishing the program and setting forth its terms and conditions, including all of the following:

(A) matters required by Section 20 to be included SB1700 - 7 - LRB100 11334 HLH 21711 b in the report;

for this purpose, the resolution or ordinance may incorporate the report or an amended version thereof by reference;

and (B) 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 pursuant to paragraph (3) of subsection (a) of this Section.

Section 20.

Report.

The report on the proposed program required under Section 15 shall include all of the following:

(1) a form of assessment contract between the local unit of government and record owner governing the terms and conditions of financing and assessment under the program.

(2) identification of an official authorized to enter into a assessment contract on behalf of the local unit of government;

(3) a maximum aggregate annual dollar amount for all financing to be provided by the program administrator under the program;

(4) an application process and eligibility requirements for financing energy projects under the SB1700 - 8 - LRB100 11334 HLH 21711 b program;

(5) a method for determining interest rates on assessment installments, repayment periods, and the maximum amount of an assessment;

(6) an explanation of how assessments will be made and collected;

(7) a plan to raise capital to finance improvements under the program pursuant to the sale of bonds, subject to the Special Assessment Supplemental Bond and Procedures Act, from a program administrator;

(8) information regarding all of the following, to the extent known, or procedures to determine the following in the future:

(A) any revenue source or reserve fund or funds to be used as security for bonds described in paragraph (7);

and (B) any application, administration, or other program fees to be charged to record owners participating in the program that will be used to 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 projects that consist of multiple improvements with varying lengths of useful life shall have the lengths blended to determine an overall term SB1700 - 9 - LRB100 11334 HLH 21711 b that does not exceed the useful life of the improvements in aggregate;

(10) a requirement for an appropriate ratio of the amount of the assessment to the assessed value of the property or market value of the property as determined by a recent appraisal no older than 12 months;

(11) a requirement that the record owner of property subject to a mortgage obtain written consent from the mortgage holder before participating in the program;

(12) provisions for marketing and participant education;

(13) provisions for an adequate debt service reserve fund, if any;

and (14) quality assurance and antifraud measures.

Section 25.

(a) AAfter localcreation unit of governmenta mayprogram imposeand anPACE assessmentarea, under a propertyrecord assessedowner cleanof energyproperty programwithin onlythe pursuantPACE toarea themay termsapply ofwith athe recordedlocal assessmentunit contractof withgovernment theor recordits ownerprogram ofadministrator thefor propertyfunding to befinance assessed.an energy project.

(b) BeforeA enteringlocal intounit of government may impose an assessment contractunder with a recordproperty ownerassessed underclean aenergy program,program theonly localpursuant unitto the terms of governmenta shallrecorded verifyassessment allcontract with the record owner of the following:property to be assessed.

(1)(c) thatBefore thereentering areinto noan delinquentassessment taxes,contract specialwith assessments,a orrecord waterowner orunder sewera chargesprogram, onthe local unit of government shall verify all of the property;following:

(2)(1) that there are no delinquent assessments on the SB1700 - 10 - LRB100 11334 HLH 21711 b property underis awithin propertythe assessedPACE cleanarea; energy program;

(3)(2) that there are no involuntarydelinquent lienstaxes, onspecial theassessments, property, including, but not limited to, construction or mechanicswater liens, lis pendens or judgmentssewer againstcharges on the recordproperty; owner, environmental proceedings, or eminent domain proceedings;

(4)(3) that nothere noticesare ofno defaultdelinquent orassessments otheron evidencethe ofproperty property-basedunder debta delinquencyproperty haveassessed beenclean recordedenergy andprogram; not cured;

(5)(4) thatthere theare recordno ownerinvoluntary isliens current on all mortgage debt on the property, theincluding, recordbut ownernot haslimited notto, filedconstruction foror bankruptcymechanics inliens, thelis lastpendens 2or years,judgments andagainst the propertyrecord isowner, notenvironmental anproceedings, assetor toeminent adomain currentproceedings; bankruptcy.

(6)(5) all work requiring a license under any applicable law to make a qualifying improvement shall be performed by a registered contractor that hasno agreednotices toof adheredefault toor aother setevidence of termsproperty-based anddebt conditionsdelinquency throughhave abeen processrecorded establishedand bynot thecured; local unit of government.

(7)(6) atthat the optionrecord ofowner theis localcurrent uniton ofall government,mortgage theSB1700 contractorsEngrossed to- be6 used- haveLRB100 signed11334 aHLH written21711 acknowledgementb thatdebt on the localproperty, unitthe ofrecord governmentowner willhas not authorizefiled finalfor paymentbankruptcy toin the contractorlast until2 theyears, localand unit of government has received written confirmation from the recordproperty owneris thatnot thean improvementasset wasto properlya installedcurrent andbankruptcy. is operating as intended;

(8)(7) thatall thework amountrequiring ofa taxlicense inunder relationany toapplicable thelaw greaterto ofmake thea assessedqualifying valueimprovement ofshall thebe propertyperformed orby thea appraisedregistered SB1700contractor -that 11has -agreed LRB100to 11334adhere HLHto 21711a bset value of theterms property,and asconditions determinedthrough by a licensedprocess appraiser,established doesby notthe exceedlocal 25%;unit of government.

and(8) (9)the contractors to be used have signed a requirementwritten acknowledgement that anthe assessmentlocal unit of thegovernment existingwill waternot orauthorize energyfinal usepayment andto athe modelingcontractor until the local unit of expectedgovernment monetaryhas savingsreceived havewritten beenconfirmation conductedfrom forthe anyrecord proposedowner project.that the improvement was properly installed and is operating as intended;

(c)provided, Athowever, leastthat 30 days before entering into an agreement with the localcontractor unitretains ofall government,legal therights recordand ownerremedies shallin provide to the holdersevent orthere loanis servicers of any existing mortgages encumbering or otherwise secured by the property a noticedisagreement of the record owner's intent to enter into an assessment contract with the localowner; 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.

(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 or and a modeling of expected monetary savings has have been conducted for any proposed project.

(d) At least 30 days before entering into an agreement with the local unit of government, the record owner shall provide to the holders or loan servicers of any existing mortgages SB1700 Engrossed - 7 - LRB100 11334 HLH 21711 b encumbering or otherwise secured by the property a notice of the record owner's intent to enter into an assessment contract with the local unit of government, together with the maximum principal amount to be financed and the maximum annual assessment necessary to repay that amount, along with a request that the holders or loan servicers of any existing mortgages consent to the record owner subjecting the property to the program.

(e) A provision in any agreement between a mortgageelocal orunit otherof lienholdergovernment and a recordpublic owner, or anyprivate otherpower provisionor thatenergy isprovider binding upon a record owner, which allows for acceleration of payment of the mortgage, note, or lien, or other unilateralutility SB1700provider -is 12not -enforceable LRB100to 11334limit HLHor 21711prohibit bany modificationlocal solelyunit as a result of enteringgovernment intofrom anexercising agreementits asauthority providedunder for in this SectionSection. is not enforceable.

This(f) subsectionThe doesrecord notowner limithas signed a certification that the authoritylocal unit of government has complied with the holderprovisions orof loanthis servicerSection, which shall be conclusive evidence as to increasecompliance thewith requiredthese monthlyprovisions, escrowbut byshall annot amountrelieve necessaryany tocontractor, annuallyor paylocal theunit qualifyingof energygovernment, efficiencyfrom improvement.any potential liability.

(d)(g) AThis provisionSection inis anyadditional agreementand betweensupplemental ato localcounty unitSB1700 ofEngrossed government- and8 a- publicLRB100 or11334 privateHLH power21711 orb energyand providermunicipal orhome otherrule utilityauthority providerand is not enforceablein toderogation limit or prohibit any local unit of governmentsuch fromauthority exercisingor itslimitation authorityupon undersuch thisauthority. Section.

(e)(Source: 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.

(f)10000HB2831eng.) This Section is99. additional and supplemental to county and municipal home rule authority and not in derogation of such authority or limitation upon such authority.

Section 30.

Assessments constitute a lien;

billing.

(a) An assessment imposed under a property assessed clean energy program, including any interest on the assessment and any penalty, shall constitute a lien against the property on which the assessment is imposed until the assessment, including SB1700 - 13 - LRB100 11334 HLH 21711 b any interest or penalty, is paid in full.

The lien of the assessment contract shall run with the property until the assessment is paid in full and a satisfaction or release for the same has been recorded with the local unit of government and shall have the same priority and status as other property tax and assessment liens.

The local unit of government shall have all rights and remedies in the case of default or delinquency in the payment of an assessment as it does with respect to delinquent property taxes.

When the assessment, including any interest and penalty, is paid, the lien shall be removed from the property.

(b) Installments of assessments due under a program shall be included in each tax bill issued under the Property Tax Code and shall be collected at the same time and in the same manner as taxes collected under the Property Tax Code.

Alternatively, installments may be billed and collected as provided in a special assessment ordinance of general applicability adopted by the local unit of government pursuant to State law or local charter.

In no event will partial payment of an assessment be allowed.

Section 35.

Bonds.

(a) A local unit of government may issue bonds under the Special Assessment Supplemental Bond and Procedures Act to finance energy projects under a property assessed clean energy program.

SB1700 - 14 - LRB100 11334 HLH 21711 b (b) Bonds issued under subsection (a) shall not be general obligations of the local unit of government, but shall be secured by the following as provided by the governing body in the resolution or ordinance approving the bonds:

(1) payments of assessments on benefited property within the district or districts specified;

and (2) if applicable, revenue sources or reserves established by the local unit of government 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 pledge is given, without further action by the governing body.

The statutory lien is valid and binding against all other persons, with or without notice.

(d) Bonds of one series issued under this Act may be secured on a parity with bonds of another series issued by the local unit of government pursuant to the terms of a master indenture or master resolution entered into or adopted by the governing body of the local unit of government.

(e) Bonds issued under this Act are subject to the Bond Authorization Act and the Registered Bond Act.

(f) Bonds issued under this Act further essential public and governmental purposes, including, but not limited to, SB1700 - 15 - LRB100 11334 HLH 21711 b 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 to give a bond opinion for the benefit of the program administrator or bond purchaser.

Section 40.

Joint property assessed clean energy programs.

(a) A local unit of government may join with any other local unit of government, or with any public or private person, or with any number or combination thereof, under the Intergovernmental Cooperation Act, by contract or otherwise as may be permitted by law, for the implementation of a property assessed clean energy program, in whole or in part.

(b) If a program is implemented jointly by 2 or more local units of government pursuant to subsection (a), a single public hearing held jointly by the cooperating local units of government is sufficient to satisfy the requirements of this Act.

Section 99.

This Act takes effect upon becoming law.law or upon the effective date of House Bill 2831 of the 100th General Assembly, whichever occurs later.