Connecticut 2020 Regular Session

Connecticut House Bill HB05228 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
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3	3	LCO No. 1649 1 of 8
4	4
5	5	General Assembly Raised Bill No. 5228
6	6	February Session, 2020
7	7	LCO No. 1649
8	8
9	9
10	10	Referred to Committee on ENERGY AND TECHNOLOGY
11	11
12	12
13	13	Introduced by:
14	14	(ET)
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16	16
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19	19	AN ACT CONCERNING TH E COMMERCIAL PROPERT Y ASSESSED
20	20	CLEAN ENERGY PROGRAM .
21	21	Be it enacted by the Senate and House of Representatives in General
22	22	Assembly convened:
23	23
24	24	Section 1. Section 16a-40g of the general statutes is repealed and the 1
25	25	following is substituted in lieu thereof (Effective October 1, 2020): 2
26	26	(a) As used in this section: 3
27	27	(1) "Energy improvements" means (A) participation in a district 4
28	28	heating and cooling system by qualifying commercial real property, (B) 5
29	29	participation in a microgrid, as defined in section 16-243y, including any 6
30	30	related infrastructure for such microgrid, by qualifying commercial real 7
31	31	property, provided such microgrid and any related infrastructure 8
32	32	incorporate clean energy, as defined in section 16-245n, (C) any 9
33	33	improvement, renovation or retrofitting of qualifying commercial real 10
34	34	property to reduce energy consumption or improve energy efficiency, 11
35	35	(D) installation of a renewable energy system to service qualifying 12
36	36	commercial real property, [or] (E) installation of a solar thermal or 13
37	37	geothermal system to service qualifying commercial real property, 14
38	38	provided such renovation, retrofit or installation described in 15 Raised Bill No. 5228
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40	40
41	41
42	42	LCO No. 1649 2 of 8
43	43
44	44	subparagraph (C), (D) or (E) of this subdivision is permanently fixed to 16
45	45	such qualifying commercial real property, (F) installation of refueling 17
46	46	infrastructure for zero-emission vehicles to a qualifying commercial real 18
47	47	property, or (G) installation of resiliency measures to a qualifying 19
48	48	commercial real property; 20
49	49	(2) "District heating and cooling system" means a local system 21
50	50	consisting of a pipeline or network providing hot water, chilled water 22
51	51	or steam from one or more sources to multiple buildings; 23
52	52	(3) "Qualifying commercial real property" means any commercial or 24
53	53	industrial property, regardless of ownership, that meets the 25
54	54	qualifications established for the commercial sustainable energy 26
55	55	program; 27
56	56	(4) "Commercial or industrial property" means any real property 28
57	57	other than a residential dwelling containing less than five dwelling 29
58	58	units; 30
59	59	(5) "Benefited property owner" means an owner of qualifying 31
60	60	commercial real property who desires to install energy improvements 32
61	61	and provides free and willing consent to the benefit assessment against 33
62	62	the qualifying commercial real property; 34
63	63	(6) "Commercial sustainable energy program" means a program that 35
64	64	facilitates energy improvements and utilizes the benefit assessments 36
65	65	authorized by this section as security for the financing of the energy 37
66	66	improvements; 38
67	67	(7) "Municipality" means a municipality, as defined in section 7-369; 39
68	68	(8) "Benefit assessment" means the assessment authorized by this 40
69	69	section; 41
70	70	(9) "Participating municipality" means a municipality that has 42
71	71	entered into a written agreement, as approved by its legislative body, 43
72	72	with the bank pursuant to which the municipality has agreed to [assess, 44
73	73	collect, remit] levy benefit assessments, file benefit assessment liens and 45 Raised Bill No. 5228
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77	77	LCO No. 1649 3 of 8
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79	79	assign [,] such benefit [assessments] assessment liens to the bank or 46
80	80	third-party capital provider, as applicable, in return for energy 47
81	81	improvements for benefited property owners within such municipality 48
82	82	and costs reasonably incurred in performing such duties; 49
83	83	(10) "Bank" means the Connecticut Green Bank; [and] 50
84	84	(11) "Third-party capital provider" means an entity, other than the 51
85	85	bank, that provides financing, energy services agreements, leases or 52
86	86	power purchase agreements directly to benefited property owners for 53
87	87	energy improvements; 54
88	88	(12) "Zero-emission vehicle" has the same meaning as provided in 55
89	89	section 4a-67d; and 56
90	90	(13) "Resiliency" means the capacity to withstand natural, 57
91	91	technological and human-caused hazards. 58
92	92	(b) (1) The bank shall establish a commercial sustainable energy 59
93	93	program in the state, and in furtherance thereof, is authorized to make 60
94	94	appropriations for and issue bonds, notes or other obligations for the 61
95	95	purpose of financing, (A) energy improvements; (B) related energy 62
96	96	audits; (C) renewable energy system feasibility studies; and (D) 63
97	97	verification reports of the installation and effectiveness of such 64
98	98	improvements. The bonds, notes or other obligations shall be issued in 65
99	99	accordance with legislation authorizing the bank to issue bonds, notes 66
100	100	or other obligations generally. Such bonds, notes or other obligations 67
101	101	may be secured as to both principal and interest by a pledge of revenues 68
102	102	to be derived from the commercial sustainable energy program, 69
103	103	including revenues from benefit assessments on qualifying commercial 70
104	104	real property, as authorized in this section. 71
105	105	(2) When the bank has made app ropriations for energy 72
106	106	improvements for qualifying commercial real property or other costs of 73
107	107	the commercial sustainable energy program, including interest costs 74
108	108	and other costs related to the issuance of bonds, notes or other 75
109	109	obligations to finance the appropriation, the bank may require the 76 Raised Bill No. 5228
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112	112
113	113	LCO No. 1649 4 of 8
114	114
115	115	participating municipality in which the qualifying commercial real 77
116	116	property is located to levy a benefit assessment against the qualifying 78
117	117	commercial real property especially benefited thereby. 79
118	118	(3) The bank (A) shall develop program guidelines governing the 80
119	119	terms and conditions under which state and third-party financing may 81
120	120	be made available to the commercial sustainable energy program, 82
121	121	including, in consultation with representatives from the banking 83
122	122	industry, municipalities and property owners, developing the 84
123	123	parameters for consent by existing mortgage holders and may serve as 85
124	124	an aggregating entity for the purpose of securing state or private third-86
125	125	party financing for energy improvements pursuant to this section, (B) 87
126	126	shall establish the position of commercial sustainable energy program 88
127	127	liaison within the bank, (C) may establish a loan loss reserve or other 89
128	128	credit enhancement program for qualifying commercial real property, 90
129	129	(D) may use the services of one or more private, public or quasi-public 91
130	130	third-party administrators to administer, provide support or obtain 92
131	131	financing for the commercial sustainable energy program, (E) shall 93
132	132	adopt standards to [ensure that] determine whether the combined 94
133	133	projected energy cost savings and other associated savings of the energy 95
134	134	improvements over the useful life of such improvements exceed the 96
135	135	costs of such improvements, except that this section shall not apply to 97
136	136	the installation of refueling infrastructure for zero-emission vehicles or 98
137	137	resiliency measures adopted under this section, and (F) may encourage 99
138	138	third-party capital providers to provide financing, energy services 100
139	139	agreements, leases and power purchase agreements directly to 101
140	140	benefited property owners in lieu of or in addition to the bank providing 102
141	141	such [loans] financing, energy services agreements, leases and power 103
142	142	purchase agreements. 104
143	143	(c) Before establishing a commercial sustainable energy program 105
144	144	under this section, the bank shall provide notice to the electric 106
145	145	distribution company, as defined in section 16-1, that services the 107
146	146	participating municipality. 108
147	147	(d) If a benefited property owner requests financing from the bank or 109 Raised Bill No. 5228
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151	151	LCO No. 1649 5 of 8
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153	153	a third-party capital provider for energy improvements under this 110
154	154	section, the bank shall: 111
155	155	(1) Require performance of an energy audit or renewable energy 112
156	156	system feasibility analysis on the qualifying commercial real property 113
157	157	that assesses the expected energy cost savings of the energy 114
158	158	improvements over the useful life of such improvements before 115
159	159	approving such financing, except that the requirements of this 116
160	160	subdivision shall not apply to the installation of refueling infrastructure 117
161	161	for zero-emission vehicles or resiliency measures adopted under this 118
162	162	section; 119
163	163	(2) If financing is approved, either by the bank or the third-party 120
164	164	capital provider, require the participating municipality to levy a benefit 121
165	165	assessment on the qualifying commercial real property with the 122
166	166	property owner in a principal amount sufficient to pay the costs of the 123
167	167	energy improvements and any associated costs the bank or the third-124
168	168	party capital provider determines will benefit the qualifying 125
169	169	commercial real property; 126
170	170	(3) Impose requirements and criteria to ensure that the proposed 127
171	171	energy improvements are consistent with the purpose of the commercial 128
172	172	sustainable energy program; 129
173	173	(4) Impose requirements and conditions on the financing to ensure 130
174	174	timely repayment, including, but not limited to, procedures for placing 131
175	175	a benefit assessment lien on a property as security for the repayment of 132
176	176	the benefit assessment; and 133
177	177	(5) Require that the property owner provide written notice, not less 134
178	178	than thirty days prior to the recording of any benefit assessment lien 135
179	179	securing a benefit assessment for energy improvements for such 136
180	180	property, to any existing mortgage holder of such property, of the 137
181	181	property owner's intent to finance such energy improvements pursuant 138
182	182	to this section. 139
183	183	(e) (1) The bank or the third-party capital provider may enter into a 140 Raised Bill No. 5228
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185	185
186	186
187	187	LCO No. 1649 6 of 8
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189	189	financing agreement with the property owner of qualifying commercial 141
190	190	real property. After such agreement is entered into, and upon notice 142
191	191	from the bank, the participating municipality shall (A) place a caveat on 143
192	192	the land records indicating that a benefit assessment and a benefit 144
193	193	assessment lien are anticipated upon completion of energy 145
194	194	improvements for such property, or (B) at the direction of the bank, levy 146
195	195	the benefit assessment and file a benefit assessment lien on the land 147
196	196	records based on the estimated costs of the energy improvements prior 148
197	197	to the completion or upon the completion of such improvements. 149
198	198	(2) The bank or the third-party capital provider shall disclose to the 150
199	199	property owner the costs and risks associated with participating in the 151
200	200	commercial sustainable energy program established by this section, 152
201	201	including risks related to the failure of the property owner to pay the 153
202	202	benefit assessment. The bank or the third-party capital provider shall 154
203	203	disclose to the property owner the effective interest rate of the benefit 155
204	204	assessment, including fees charged by the bank or the third-party capital 156
205	205	provider to administer the program, and the risks associated with 157
206	206	variable interest rate financing. The bank or the third-party capital 158
207	207	provider shall notify the property owner that such owner may rescind 159
208	208	any financing agreement entered into pursuant to this section not later 160
209	209	than three business days after such agreement. 161
210	210	(f) The bank or the third-party capital provider shall set a fixed or 162
211	211	variable rate of interest for the repayment of the benefit assessment 163
212	212	amount at the time the benefit assessment is made. Such interest rate, as 164
213	213	may be supplemented with state or federal funding as may become 165
214	214	available, shall be sufficient to pay the bank's financing and 166
215	215	administrative costs of the commercial sustainable energy program, 167
216	216	including delinquencies. 168
217	217	(g) Benefit assessments levied and filed pursuant to this section and 169
218	218	the interest, fees and any penalties thereon shall constitute a lien against 170
219	219	the qualifying commercial real property on which they are made until 171
220	220	they are paid. Such benefit assessment lien, shall be paid in installments 172
221	221	and each installment payment shall be [collected] due and payable in 173 Raised Bill No. 5228
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224	224
225	225	LCO No. 1649 7 of 8
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227	227	the same manner as the property taxes of the participating municipality 174
228	228	on real property, including, in the event of default or delinquency, with 175
229	229	respect to any penalties, fees and remedies. Such benefit assessment 176
230	230	liens shall be collected and remitted by either the participating 177
231	231	municipality, the bank or one of the bank's third-party administrators, 178
232	232	as may be agreed to in writing between the bank and the municipality. 179
233	233	Each such benefit assessment lien may be recorded and released in the 180
234	234	manner provided for property tax liens and shall take precedence over 181
235	235	all other liens or encumbrances except a lien for taxes of the municipality 182
236	236	on real property, which lien for taxes shall have priority over such 183
237	237	benefit assessment lien, and provided that the precedence of such 184
238	238	benefit assessment lien over any lien held by an existing mortgage 185
239	239	holder shall be subject to the written consent of such existing mortgage 186
240	240	holder. To the extent any benefit assessment lien installment is not paid 187
241	241	when due, the benefit assessment lien may be foreclosed to the extent of 188
242	242	any unpaid installment payments due and owing and any penalties, 189
243	243	interest and fees related thereto. In the event a benefit assessment lien is 190
244	244	foreclosed or a lien for taxes of the municipality on real property is 191
245	245	foreclosed or enforced by levy and sale in accordance with chapter 204, 192
246	246	the benefit assessment lien shall be extinguished solely with regard to 193
247	247	any installments that were due and owing on the date of the judgment 194
248	248	of such foreclosure or levy and sale and the benefit assessment lien shall 195
249	249	otherwise survive such judgment or levy and sale to the extent of any 196
250	250	unpaid installment payments of the benefit assessment secured by such 197
251	251	benefit assessment lien that are due after the date of such judgment or 198
252	252	levy and sale. 199
253	253	(h) Any participating municipality may assign to the bank or third-200
254	254	party capital provider, as applicable, any and all benefit assessment 201
255	255	liens filed by the participating municipality, as provided in the written 202
256	256	agreement between the participating municipality and the bank. The 203
257	257	bank or third-party capital provider may sell or assign, for 204
258	258	consideration, any and all benefit assessment liens received from the 205
259	259	participating municipality. The consideration received by the bank or 206
260	260	third-party capital provider shall be negotiated between the bank or the 207 Raised Bill No. 5228
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262	262
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264	264	LCO No. 1649 8 of 8
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266	266	third-party capital provider, as applicable, and the assignee. The 208
267	267	assignee or assignees of such benefit assessment liens shall have and 209
268	268	possess the same powers and rights at law or in equity as the bank, 210
269	269	third-party capital provider and the participating municipality and its 211
270	270	tax collector would have had if the benefit assessment lien had not been 212
271	271	assigned with regard to the precedence and priority of such benefit 213
272	272	assessment lien, the accrual of interest and the fees and expenses of 214
273	273	collection. The assignee shall have the same rights to enforce such 215
274	274	benefit assessment liens as any private party holding a lien on real 216
275	275	property, including, but not limited to, foreclosure and a suit on the 217
276	276	debt. Costs and reasonable attorneys' fees incurred by the assignee as a 218
277	277	result of any foreclosure action or other legal proceeding brought 219
278	278	pursuant to this section and directly related to the proceeding shall be 220
279	279	taxed in any such proceeding against each person having title to any 221
280	280	property subject to the proceedings. Such costs and fees may be 222
281	281	collected by the assignee at any time after demand for payment has been 223
282	282	made by the assignee. 224
283	283	This act shall take effect as follows and shall amend the following
284	284	sections:
285	285
286	286	Section 1 October 1, 2020 16a-40g
287	287
288	288	Statement of Purpose:
289	289	To expand the definition of energy improvements to include zero-
290	290	emission vehicle refueling infrastructure and resiliency measures and to
291	291	exempt these expansions from the savings-to-investments ratio and to
292	292	permit direct assignment of liens to third-party capital providers.
293	293	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
294	294	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
295	295	underlined.]