Signed by Governor Bruce Rauner

Vote Smart's Synopsis:

A vote to pass a bill that amends the procedures involved in constructing energy projects.

Highlights:

• Authorizes local governments to establish Property Assessed Clean Energy (PACE) programs (Sec. 10).

• Authorizes local governments to enter into assessment contracts with property owners within a PACE area to finance energy projects (Sec. 10).

• Authorizes local governments to sell or assign assessment contracts (Sec. 10).

• Requires local governments establishing a PACE program to adopt a resolution or ordinance that includes the following (Sec. 15):

• A finding that financing the energy project serves a valid public purpose;

• A statement of intent to provide funds for energy projects to be repaid by assessments on the property;

• A description of the proposed arrangements for financing the program;

• The types of energy projects that may be financed;

• A description of the territory within the PACE area;

• Reference to a report on the proposed programed;

• The time and place for a public hearing to be held by the local government; and

• A description of which parts of the program can be amended without a new public hearing and which parts require a new public hearing.

• Requires reports on proposed programs to include the following (Sec. 20):

• A form of assessment contract between the local government and record owner;

• Identification of an official authorized to enter into an assessment contract on behalf of the local government;

• A maximum aggregate annual dollar amount for financing to be provided by the program administrator;

• An application process and eligibility requirements for financing energy programs;

• A method for determining interest rates on assessment installments, repayment periods, and the maximum amount of an assessment;

• An explanation of how assessments will be made and collected;

• A plan to raise capital to finance improvements;

• Information regarding revenue sources, funds, and fees;

• A requirement that the assessment term not exceed the useful life of the energy project paid for;

• A requirement for an appropriate ratio of the amount of the assessment to the value of the property as determined by an appraisal no older than 12 months;

• A requirement that property owners subject to mortgage obtain written consent form the mortgage holder before participating in the program;

• Provisions for marketing and education;

• Provisions for an adequate debt service reserve fund; and

• Quality assurance and anti-fraud measures.

• Specifies that property owners within PACE areas may apply to local governments for funding of energy projects (Sec. 25).

• Authorizes local governments to impose an assessment under a PACE program pursuant to the terms of a recorded assessment contract with the property owner (Sec. 25).

• Requires local governments to verify the following before entering into a contract with property owners (Sec. 25):

• That the property is within the PACE area;

• That there are no delinquent taxes, special assessments or water or sewer charges;

• That there are no delinquent assessments on the property under a PACE program;

• That there are no involuntary liens on the property;

• That no notices of default or other debt delinquency have been recorded and are unresolved;

• That the property owner is current on all mortgage debt, has not filed for bankruptcy in the last 2 years, and that the property is not an asset to a current bankruptcy;

• That all work requiring a license shall be performed by a registered contractor who’s agreed to a set of terms and conditions with the local government;

• That the contractors to be used have signed an agreement with the local government stating that final payment will be received upon written notification by the property owner;

• That the assessed value of the property does not exceed 25%; and

• An assessment of water or energy use and expected monetary savings for any proposed project.

• Requires property owners to provide mortgage holders notice of intent to enter into an assessment contract with local governments at least 30 days before doing so (Sec. 25).

Full Bill Text