| 1 | 1 | | General Assembly Raised Bill No. 6995 |
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| 2 | 2 | | January Session, 2015 LCO No. 4964 |
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| 3 | 3 | | *04964_______ET_* |
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| 4 | 4 | | Referred to Committee on ENERGY AND TECHNOLOGY |
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| 5 | 5 | | Introduced by: |
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| 6 | 6 | | (ET) |
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| 7 | 7 | | |
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| 8 | 8 | | General Assembly |
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| 9 | 9 | | |
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| 10 | 10 | | Raised Bill No. 6995 |
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| 11 | 11 | | |
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| 12 | 12 | | January Session, 2015 |
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| 13 | 13 | | |
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| 14 | 14 | | LCO No. 4964 |
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| 15 | 15 | | |
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| 16 | 16 | | *04964_______ET_* |
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| 17 | 17 | | |
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| 18 | 18 | | Referred to Committee on ENERGY AND TECHNOLOGY |
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| 19 | 19 | | |
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| 20 | 20 | | Introduced by: |
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| 21 | 21 | | |
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| 22 | 22 | | (ET) |
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| 23 | 23 | | |
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| 24 | 24 | | AN ACT CONCERNING A RESIDENTIAL PROPERTY ASSESSED CLEAN ENERGY PROGRAM. |
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| 25 | 25 | | |
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| 26 | 26 | | Be it enacted by the Senate and House of Representatives in General Assembly convened: |
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| 27 | 27 | | |
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| 28 | 28 | | Section 1. Section 7-121n of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016): |
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| 29 | 29 | | |
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| 30 | 30 | | (a) As used in this section: |
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| 31 | 31 | | |
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| 32 | 32 | | (1) "Energy improvements" means any renovation or retrofitting of qualifying real property to reduce energy consumption or installation of a [renewable energy] system for clean energy, as defined in section 16-245n, to service qualifying real property, [provided such] and that may include related improvements to address water conservation, health and safety issues, including, but not limited to, asbestos, mold and lead remediation, and resiliency measures, including, but not limited to, flood resistant construction and hurricane resistant construction. Any renovation, retrofit or installation [is] shall be permanently fixed to such qualifying real property and may include a third-party ownership arrangement, including, but not limited to, a power purchase agreement and a lease agreement, provided the duration of any such agreement is not less than the lesser of the average estimated useful life of the principal components or ten years; |
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| 33 | 33 | | |
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| 34 | 34 | | (2) ["Qualifying real property"] "Qualifying residential real property" means a single-family or multifamily residential dwelling [or a nonresidential building, regardless of ownership, that a municipality has determined can benefit from energy improvements] of four or fewer units that meets the qualifications established for the residential sustainable energy program; |
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| 35 | 35 | | |
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| 36 | 36 | | (3) "Property owner" means an owner or owners of qualifying residential real property who [desires] desire to install energy improvements and [provides] who provide free and willing consent to the contractual assessment against the qualifying residential real property; [and] |
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| 37 | 37 | | |
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| 38 | 38 | | [(4) "Sustainable energy program" means a municipal program that authorizes a municipality to enter into contractual assessments on qualifying real property with property owners to finance the purchase and installation of energy improvements to qualifying real property within its municipal boundaries.] |
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| 39 | 39 | | |
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| 40 | 40 | | (4) "Residential sustainable energy program" means a program that facilitates energy improvements and utilizes the benefit assessment authorized by this section as security for the financing of energy improvements; |
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| 41 | 41 | | |
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| 42 | 42 | | (5) "Municipality" means a municipality, as defined in section 7-369; |
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| 43 | 43 | | |
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| 44 | 44 | | (6) "Benefit assessment" means the assessment authorized by this section; |
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| 45 | 45 | | |
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| 46 | 46 | | (7) "Participating municipality" means a municipality that has entered into a written agreement, as approved by its legislative body, with the bank pursuant to which the municipality has agreed to assess, collect, remit and assign benefit assessments to the bank in return for energy improvements for benefited property owners within such municipality and costs reasonably incurred in performing such duties; |
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| 47 | 47 | | |
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| 48 | 48 | | (8) "Bank" means the Connecticut Green Bank; and |
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| 49 | 49 | | |
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| 50 | 50 | | (9) "Third-party capital provider" means an entity, other than the bank, that provides loans, leases or power purchase agreements directly to benefited property owners for energy improvements. |
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| 51 | 51 | | |
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| 52 | 52 | | [(b) Any municipality, that determines it is in the public interest, may establish a sustainable energy program to facilitate the increase of energy efficiency and renewable energy. A municipality shall make such a determination after issuing public notice and providing an opportunity for public comment regarding the establishment of a sustainable energy program.] |
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| 53 | 53 | | |
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| 54 | 54 | | (b) (1) The bank shall establish a residential sustainable energy program in the state, and in furtherance thereof, is authorized to make appropriations for and issue bonds, notes or other obligations for the purpose of financing (A) energy improvements; (B) related energy audits; and (C) verification reports of the installation and effectiveness of such improvements. The bank may encourage third-party capital providers to provide financing directly to benefited property owners in lieu of or in addition to the bank providing such financing. The bonds, notes, other obligations or other financing provided by third-party capital providers may be secured as to both principal and interest by a pledge of the liens, such other collateral and the revenues to be derived from the residential sustainable energy program, including revenues from benefit assessments on qualifying residential real property, as authorized in this section. |
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| 55 | 55 | | |
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| 56 | 56 | | (2) When the bank or third-party capital provider has made appropriations for energy improvements for qualifying residential real property or other costs of the residential sustainable energy program, including interest costs and other costs related to the issuance of bonds, notes, other obligations or other financing provided to finance the appropriation, the bank shall require the participating municipality in which the qualifying residential real property is located to levy a benefit assessment against the qualifying residential real property especially benefited thereby. |
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| 57 | 57 | | |
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| 58 | 58 | | [(c)] (3) [Notwithstanding the provisions of section 7-374 or any other public or special act that limits or imposes] The bank shall develop program guidelines governing the terms and conditions [on municipal bond issues, any municipality that establishes a sustainable energy program under this section may issue bonds, as necessary, for the purpose of financing (1) energy improvements; (2) related energy audits; and (3) renewable energy system feasibility studies and the verification of the installation of such improvements. Such financing shall be secured by special contractual assessments on the qualifying real property] under which funding may be made available to the residential sustainable energy program, in consultation with representatives from the banking industry, municipalities and property owners, and serving as an aggregate entity for the purpose of securing state or private third-party financing for energy improvements pursuant to this section. |
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| 59 | 59 | | |
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| 60 | 60 | | (4) The bank shall adopt general standards to ensure that estimated energy cost savings of the energy improvements over the average estimated useful life of such improvements exceed the costs of such improvements. |
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| 61 | 61 | | |
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| 62 | 62 | | (5) The bank may establish a loan loss reserve or other credit enhancement program for qualifying residential real property, and the bank may use the services of one or more private, public or quasi-public third-party administrators to administer, provide support or obtain financing for the residential sustainable energy program. |
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| 63 | 63 | | |
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| 64 | 64 | | [(d) (1) Any municipality that establishes a sustainable energy program pursuant to this section may partner with another municipality or a state agency to (A) maximize the opportunities for accessing public funds and private capital markets for long-term sustainable financing, and (B) secure state or federal funds available for this purpose. |
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| 65 | 65 | | |
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| 66 | 66 | | (2) Any municipality that establishes a sustainable energy program and issues bonds pursuant to this section may supplement the security of such bonds with any other legally available funds solely at the municipality's discretion. |
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| 67 | 67 | | |
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| 68 | 68 | | (3) Any municipality that establishes a sustainable energy program pursuant to this section may use the services of one or more private, public or quasi-public third-party administrators to provide support for the program.] |
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| 69 | 69 | | |
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| 70 | 70 | | [(e)] (c) Before establishing a program under this section, the [municipality] bank shall provide notice to the electric distribution company, as defined in section 16-1, that services the municipality. |
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| 71 | 71 | | |
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| 72 | 72 | | [(f)] (d) If [the] a benefited property owner [of record of qualifying real property] requests financing from the bank, or a third-party capital provider, for energy improvements under this section, the [municipality implementing the sustainable energy program] bank shall: |
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| 73 | 73 | | |
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| 74 | 74 | | [(1) Require performance of an energy audit or renewable energy system feasibility analysis on the qualifying real property before approving such financing; |
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| 75 | 75 | | |
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| 76 | 76 | | (2) Enter into a contractual assessment on the qualifying real property with the property owner in a principal amount sufficient to pay the costs of energy improvements and any associated costs the municipality determines will benefit the qualifying real property and may cover any associated costs;] |
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| 77 | 77 | | |
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| 78 | 78 | | [(3)] (1) Impose requirements and criteria to ensure that the proposed energy improvements are consistent with the purpose of the residential sustainable energy program; and |
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| 79 | 79 | | |
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| 80 | 80 | | [(4)] (2) Impose requirements and conditions on the financing to ensure timely repayment, including, but not limited to, underwriting criteria and procedures for placing a lien on [a] the qualifying residential real property as security for [which an owner defaults on] repayment of the benefit assessment. |
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| 81 | 81 | | |
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| 82 | 82 | | (e) (1) The bank or the third-party capital provider may enter into a financing agreement with the property owner of qualifying residential real property. After such agreement is entered into, and upon notice from the bank, the participating municipality shall (A) place a caveat on the land records indicating that a benefit assessment and a lien are anticipated upon completion of energy improvements for such property, or (B) at the direction of the bank, levy the benefit assessment and file a lien on the land records based on the estimated costs of the energy improvements prior to the completion or upon the completion of such improvements. |
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| 83 | 83 | | |
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| 84 | 84 | | (2) The bank, or the third-party capital provider, shall disclose to the property owner the costs and risks associated with participating in the residential sustainable energy program established by this section and shall disclose to the property owner the terms and conditions of the assessment, including term, payments and remedies for default and foreclosure, including risks related, but not necessarily limited to (A) the failure of the property owner to pay the benefit assessment, (B) the benefit assessment remaining on the property until satisfied, (C) the potential to impair the sale of the property, (D) the potential for violation of certain provisions under any existing indebtedness secured by the benefited property, and (E) the potential for the assessment to be paid off when such indebtedness is refinanced or when the property is sold. The bank, or the third-party capital provider, shall disclose to the property owner the effective interest rate of the benefit assessment, including fees charged by the bank or the third-party capital provider to administer the program. The bank or the third-party capital provider shall notify the property owner that such owner may rescind any financing agreement entered into pursuant to this section not later than three business days after such agreement. |
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| 85 | 85 | | |
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| 86 | 86 | | [(g)] (f) Prior to entering a contractual assessment, the [municipality] bank or third-party capital provider shall provide each property owner the following notice, which shall be set forth in at least fourteen-point bold type: SEEK LEGAL ADVICE BEFORE PARTICIPATING IN THIS LOAN PROGRAM TO ENSURE UNDERSTANDING OF POTENTIAL CONSEQUENCES, INCLUDING A POSSIBLE DEFAULT UNDER YOUR MORTGAGE. |
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| 87 | 87 | | |
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| 88 | 88 | | [(h)] (g) Any benefit assessment levied pursuant to this section shall have a term not to exceed the [calculated payback period for] lesser of (1) the average estimated useful life of the installed energy improvements, as determined by [the municipality, and shall have no prepayment penalty. The municipality] a contractor eligible to install such improvements under the residential sustainable energy program and consistent with the guidelines established by the bank, or (2) twenty-five years. The bank or the third-party capital provider shall set a fixed rate of interest or a fixed payment schedule for leases, power purchase agreements or other such approved financing structures for the repayment of the principal assessed amount at the time the benefit assessment is made. Such interest rate, as may be supplemented with state or federal funding as may become available, shall be sufficient to pay the financing costs of the program, including delinquencies. |
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| 89 | 89 | | |
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| 90 | 90 | | [(i) Assessments] (h) Benefit assessments levied pursuant to this section and the interest, fees and any penalties thereon shall constitute a lien against the qualifying residential real property on which they are made until they are paid. [Such lien] If the agreement for the benefit assessment provides, the benefit assessment shall be [levied and] paid in installments and each installment payment shall be collected in the same manner as the [general] property taxes of the participating municipality on real property, including, in the event of default or delinquency, [with respect to] any penalties, fees and remedies. [and lien priorities, provided such lien shall not have priority over any prior mortgages.] |
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| 91 | 91 | | |
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| 92 | 92 | | [(j) The area encompassing the sustainable energy program in a municipality may be the entire municipal jurisdiction of the municipality or a subset of such.] |
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| 93 | 93 | | |
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| 94 | 94 | | (i) Each such lien shall be recorded and released in the manner provided for property tax liens and take precedence over all other liens or encumbrances except a lien for taxes of the municipality on real property, which lien for taxes shall have priority over such benefit assessment lien. To the extent a benefit assessment is paid in installments and any such installment is not paid when due, the benefit assessment lien may be foreclosed, or enforced by levy and sale of such real property in accordance with chapter 204, to the extent of any unpaid installment payments and any penalties, interest and fees related thereto. In the event such benefit assessment lien is foreclosed, or enforced by levy and sale of the real property in accordance with chapter 204, such benefit assessment lien shall survive the judgment of the foreclosure, or levy and sale, to the extent of any unpaid installment payments of the benefit assessment secured by such benefit assessment lien that was not the subject of such judgment, or levy and sale. If the lien is enforced by levy and sale under chapter 204, the references in chapter 204 to (1) "taxpayer" shall mean the benefited property owner, (2) "tax" or "taxes" shall mean the unpaid benefit assessment or the unpaid installment payments of the benefit assessment, as applicable, (3) "collector" shall mean the participating municipality's tax collector, and (4) "municipality" shall mean the then owner and beneficiary of the benefit assessment lien, including any assignees of the participating municipality and the bank. The form of collector's deed pursuant to section 12-158 shall be used in a levy and sale of real property to satisfy a benefit assessment lien. |
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| 95 | 95 | | |
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| 96 | 96 | | (j) A participating municipality shall assign to the bank, or the third-party capital provider as applicable, any liens filed by the tax collector, as provided in the written agreement between the participating municipality and the bank. The bank or third-party capital provider may sell or assign, for consideration, any and all liens received from the participating municipality at its sole discretion. The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity as the participating municipality and its tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection. The 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 and a suit on the debt. In accordance with subsection (h) of this section, the assignee shall also have the right to enforce the lien through the levy and sale procedure under chapter 204. Costs and reasonable attorneys' fees incurred by the assignee as a result of any foreclosure action or other legal proceeding brought pursuant to this section and directly related to the proceeding, including costs and fees incurred in enforcement of the lien by the levy and sale under section 12-140 and subsection (c) of section 12-157, shall be taxed in any such proceeding against each person having title to any property subject to the proceedings. Such costs and fees may be collected by the assignee at any time after demand for payment has been made by the assignee. |
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| 97 | 97 | | |
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| 98 | 98 | | |
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| 99 | 99 | | |
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| 100 | 100 | | |
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| 101 | 101 | | This act shall take effect as follows and shall amend the following sections: |
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| 102 | 102 | | Section 1 January 1, 2016 7-121n |
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| 103 | 103 | | |
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| 104 | 104 | | This act shall take effect as follows and shall amend the following sections: |
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| 105 | 105 | | |
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| 106 | 106 | | Section 1 |
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| 107 | 107 | | |
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| 108 | 108 | | January 1, 2016 |
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| 109 | 109 | | |
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| 110 | 110 | | 7-121n |
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| 111 | 111 | | |
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| 112 | 112 | | Statement of Purpose: |
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| 113 | 113 | | |
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| 114 | 114 | | To create a residential property assessed clean energy program to help state residents finance and procure home energy efficiency improvements for their homes. |
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| 115 | 115 | | |
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| 116 | 116 | | [Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.] |
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