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 Section 16a-40g of the general statutes is repealed and the 1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