Connecticut 2021 Regular Session

Connecticut House Bill HB06571 Compare Versions

Version 1 (Old)

Version 2 (New)

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7	6		General Assembly Raised Bill No. 6571
8	7		January Session, 2021
9	8		LCO No. 4238
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12	11		Referred to Committee on ENERGY AND TECHNOLOGY
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14	13
15	14		Introduced by:
16	15		(ET)
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19	19
20	20		AN ACT CONCERNING TH E COMMERCIAL PROPERT Y ASSESSED
21	21		CLEAN ENERGY PROGRAM .
22	22		Be it enacted by the Senate and House of Representatives in General
23	23		Assembly convened:
24	24
25	25		Section 1. Section 16a-40g of the general statutes is repealed and the 1
26	26		following is substituted in lieu thereof (Effective July 1, 2021): 2
27	27		(a) As used in this section: 3
28	28		(1) "Financing" means funding or investment that includes, but is not 4
29	29		limited to, energy services agreements, leases or power purchase 5
30	30		agreements; 6
31	31		(2) "Zero-emission vehicle" has the same meaning as provided in 7
32	32		section 4a-67d; 8
33	33		(3) "Resilience" has the same meaning as provided in section 16-9
34	34		244aa; 10
35	35		[(1)] (4) "Energy improvements" means (A) participation in a district 11
36		-	heating and cooling system by qualifying commercial real property, (B) 12 Raised Bill No. 6571
	36	+	heating and cooling system by qualifying commercial real property, (B) 12
	37	+	participation in a microgrid, as defined in section 16-243y, including any 13 Raised Bill No. 6571
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43		-	participation in a microgrid, as defined in section 16-243y, including any 13
	41	+	LCO No. 4238 2 of 8
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44	43		related infrastructure for such microgrid, by qualifying commercial real 14
45	44		property, provided such microgrid and any related infrastructure 15
46	45		incorporate clean energy, as defined in section 16-245n, (C) any 16
47	46		improvement, renovation or retrofitting of qualifying commercial real 17
48	47		property to reduce energy consumption or improve energy efficiency, 18
49	48		(D) installation of a renewable energy system to service qualifying 19
50	49		commercial real property, [or] (E) installation of a solar thermal or 20
51	50		geothermal system to service qualifying commercial real property, (F) 21
52	51		installation of refueling infrastructure for zero-emission vehicles to a 22
53	52		qualifying commercial real property, or (G) installation of resilience 23
54	53		improvements to a qualifying commercial real property, provided such 24
55	54		renovation, retrofit or installation described in [subparagraph (C), (D) 25
56	55		or (E)] subparagraphs (C) to (G), inclusive, of this subdivision is 26
57	56		permanently fixed to such qualifying commercial real property; 27
58	57		[(2)] (5) "District heating and cooling system" means a local system 28
59	58		consisting of a pipeline or network providing hot water, chilled water 29
60	59		or steam from one or more sources to multiple buildings; 30
61	60		[(3)] (6) "Qualifying commercial real property" means any 31
62	61		commercial or industrial property, regardless of ownership, that meets 32
63	62		the qualifications established for the commercial sustainable energy 33
64	63		program; 34
65	64		[(4)] (7) "Commercial or industrial property" means any real property 35
66	65		other than a residential dwelling containing less than five dwelling 36
67	66		units; 37
68	67		[(5)] (8) "Benefited property owner" means an owner of qualifying 38
69	68		commercial real property who desires to install energy improvements 39
70	69		and provides free and willing consent to the benefit assessment against 40
71	70		the qualifying commercial real property; 41
72	71		[(6)] (9) "Commercial sustainable energy program" means a program 42
73		-	that facilitates energy improvements and utilizes the benefit 43 Raised Bill No. 6571
	72	+	that facilitates energy improvements and utilizes the benefit 43
	73	+	assessments authorized by this section as security for the financing of 44
	74	+	the energy improvements; 45 Raised Bill No. 6571
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80		-	~~assessments authorized by this section as security for the financing~~ of 44
81		-	~~the energy improvements; 45~~
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82	80		[(7)] (10) "Municipality" means a municipality, as defined in section 46
83	81		7-369; 47
84	82		[(8)] (11) "Benefit assessment" means the assessment authorized by 48
85	83		this section; 49
86	84		[(9)] (12) "Participating municipality" means a municipality that has 50
87	85		entered into a written agreement, as approved by its legislative body, 51
88	86		with the bank pursuant to which the municipality has agreed to assess, 52
89	87		collect, remit and assign, benefit assessments to the bank in return for 53
90	88		energy improvements for benefited property owners within such 54
91	89		municipality and costs reasonably incurred in performing such duties; 55
92	90		[(10)] (13) "Bank" means the Connecticut Green Bank; and 56
93	91		[(11)] (14) "Third-party capital provider" means an entity, other than 57
94	92		the bank, that provides financing [, leases or power purchase 58
95	93		agreements] directly to benefited property owners for energy 59
96	94		improvements. 60
97	95		(b) (1) The bank shall establish a commercial sustainable energy 61
98	96		program in the state, and in furtherance thereof, is authorized to make 62
99	97		appropriations for and issue bonds, notes or other obligations for the 63
100	98		purpose of financing, (A) energy improvements; (B) related energy 64
101	99		audits; (C) renewable energy system feasibility studies; and (D) 65
102	100		verification reports of the installation and effectiveness of such 66
103	101		improvements. The bonds, notes or other obligations shall be issued in 67
104	102		accordance with legislation authorizing the bank to issue bonds, notes 68
105	103		or other obligations generally. Such bonds, notes or other obligations 69
106	104		may be secured as to both principal and interest by a pledge of revenues 70
107	105		to be derived from the commercial sustainable energy program, 71
108	106		including revenues from benefit assessments on qualifying commercial 72
109		-	real property, as authorized in this section. 73 Raised Bill No. 6571
	107	+	real property, as authorized in this section. 73
	108	+	(2) When the bank has made appropriations for energy 74
	109	+	improvements for qualifying commercial real property or other costs of 75
	110	+	the commercial sustainable energy program, including interest costs 76 Raised Bill No. 6571
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116		-	(2) When the bank has made appropriations for energy 74
117		-	improvements for qualifying commercial real property or other costs of 75
118		-	the commercial sustainable energy program, including interest costs 76
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119	116		and other costs related to the issuance of bonds, notes or other 77
120	117		obligations to finance the appropriation, the bank may require the 78
121	118		participating municipality in which the qualifying commercial real 79
122	119		property is located to levy a benefit assessment against the qualifying 80
123	120		commercial real property especially benefited thereby. 81
124	121		(3) The bank (A) shall develop program guidelines governing the 82
125	122		terms and conditions under which state and third-party financing may 83
126	123		be made available to the commercial sustainable energy program, 84
127	124		including, in consultation with representatives from the banking 85
128	125		industry, municipalities and property owners, developing the 86
129	126		parameters for consent by existing mortgage holders and may serve as 87
130	127		an aggregating entity for the purpose of securing state or private third-88
131	128		party financing for energy improvements pursuant to this section, (B) 89
132	129		shall establish the position of commercial sustainable energy program 90
133	130		liaison within the bank, (C) may establish a loan loss reserve or other 91
134	131		credit enhancement program for qualifying commercial real property, 92
135	132		(D) may use the services of one or more private, public or quasi-public 93
136	133		third-party administrators to administer, provide support or obtain 94
137	134		financing for the commercial sustainable energy program, (E) shall 95
138	135		adopt standards to [ensure that] determine whether the combined 96
139	136		projected energy cost savings and other associated savings of the energy 97
140	137		improvements over the useful life of such improvements exceed the 98
141	138		costs of such improvements, except that such standards shall not apply 99
142	139		to the installation of refueling infrastructure for zero-emission vehicles 100
143	140		or resilience improvements adopted under this section, and (F) may 101
144	141		encourage third-party capital providers to provide financing [, leases 102
145	142		and power purchase agreements] directly to benefited property owners 103
146	143		in lieu of or in addition to the bank providing such [loans] financing. 104
147	144		(4) The bank shall consult with the Department of Energy and 105
148		-	Environmental Protection and the Connecticut Institute for Resilience 106 Raised Bill No. 6571
	145	+	Environmental Protection and the Connecticut Institute for Resilience 106
	146	+	and Climate Adaptation to develop program eligibility criteria for 107
	147	+	financing of resilience improvements, consistent with state 108
	148	+	environmental resource protection and community resilience goals. 109 Raised Bill No. 6571
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155		-	and Climate Adaptation to develop program eligibility criteria for 107
156		-	financing of resilience improvements, consistent with state 108
157		-	environmental resource protection and community resilience goals. 109
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158	154		(c) Before establishing a commercial sustainable energy program 110
159	155		under this section, the bank shall provide notice to the electric 111
160	156		distribution company, as defined in section 16-1, that services the 112
161	157		participating municipality. 113
162	158		(d) If a benefited property owner requests financing from the bank or 114
163	159		a third-party capital provider for energy improvements under this 115
164	160		section, the bank shall: 116
165	161		(1) Require performance of an energy audit, [or] renewable energy 117
166	162		system feasibility analysis, or resilience study on the qualifying 118
167	163		commercial real property that assesses the expected energy or resilience 119
168	164		cost savings of the energy or resilience improvements over the useful 120
169	165		life of such improvements before approving such financing; 121
170	166		(2) If financing is approved, either by the bank or the third-party 122
171	167		capital provider, require the participating municipality to levy a benefit 123
172	168		assessment on the qualifying commercial real property with the 124
173	169		property owner in a principal amount sufficient to pay the costs of the 125
174	170		energy improvements and any associated costs the bank or the third-126
175	171		party capital provider determines will benefit the qualifying 127
176	172		commercial real property; 128
177	173		(3) Impose requirements and criteria to ensure that the proposed 129
178	174		energy improvements are consistent with the purpose of the commercial 130
179	175		sustainable energy program; 131
180	176		(4) Impose requirements and conditions on the financing to ensure 132
181	177		timely repayment, including, but not limited to, procedures for placing 133
182	178		a benefit assessment lien on a property as security for the repayment of 134
183	179		the benefit assessment; and 135
184		-	(5) Require that the property owner provide written notice, not less 136 Raised Bill No. 6571
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	180	+	(5) Require that the property owner provide written notice, not less 136
191	181		than thirty days prior to the recording of any benefit assessment lien 137
192	182		securing a benefit assessment for energy improvements for such 138
193	183		property, to any existing mortgage holder of such property, of the 139
194		-	property owner's intent to finance such energy improvements pursuant 140
	184	+	property owner's intent to finance such energy improvements pursuant 140 Raised Bill No. 6571
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195	190		to this section. 141
196	191		(e) (1) The bank or the third-party capital provider may enter into a 142
197	192		financing agreement with the property owner of qualifying commercial 143
198	193		real property. After such agreement is entered into, and upon notice 144
199	194		from the bank, the participating municipality shall (A) place a caveat on 145
200	195		the land records indicating that a benefit assessment and a benefit 146
201	196		assessment lien are anticipated upon completion of energy 147
202	197		improvements for such property, or (B) at the direction of the bank, levy 148
203	198		the benefit assessment and file a benefit assessment lien on the land 149
204	199		records based on the estimated costs of the energy improvements prior 150
205	200		to the completion or upon the completion of such improvements. 151
206	201		(2) The bank or the third-party capital provider shall disclose to the 152
207	202		property owner the costs and risks associated with participating in the 153
208	203		commercial sustainable energy program established by this section, 154
209	204		including risks related to the failure of the property owner to pay the 155
210	205		benefit assessment. The bank or the third-party capital provider shall 156
211	206		disclose to the property owner the effective interest rate of the benefit 157
212	207		assessment, including fees charged by the bank or the third-party capital 158
213	208		provider to administer the program, and the risks associated with 159
214	209		variable interest rate financing. The bank or the third-party capital 160
215	210		provider shall notify the property owner that such owner may rescind 161
216	211		any financing agreement entered into pursuant to this section not later 162
217	212		than three business days after such agreement. 163
218	213		(f) The bank or the third-party capital provider shall set a fixed or 164
219	214		variable rate of interest for the repayment of the benefit assessment 165
220	215		amount at the time the benefit assessment is made. Such interest rate, as 166
221	216		may be supplemented with state or federal funding as may become 167
222	217		available, shall be sufficient to pay the bank's financing and 168
223		-	administrative costs of the commercial sustainable energy program, 169 Raised Bill No. 6571
	218	+	administrative costs of the commercial sustainable energy program, 169
	219	+	including delinquencies. 170
	220	+	(g) Benefit assessments levied and filed pursuant to this section and 171
	221	+	the interest, fees and any penalties thereon shall constitute a lien against 172 Raised Bill No. 6571
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230		-	including delinquencies. 170
231		-	(g) Benefit assessments levied and filed pursuant to this section and 171
232		-	the interest, fees and any penalties thereon shall constitute a lien against 172
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233	227		the qualifying commercial real property on which they are made until 173
234	228		they are paid. Such benefit assessment lien, shall be paid in installments 174
235	229		and each installment payment shall be collected in the same manner as 175
236	230		the property taxes of the participating municipality on real property, 176
237	231		including, in the event of default or delinquency, with respect to any 177
238	232		penalties, fees and remedies. Each such benefit assessment lien may be 178
239	233		recorded and released in the manner provided for property tax liens and 179
240	234		shall take precedence over all other liens or encumbrances except a lien 180
241	235		for taxes of the municipality on real property, which lien for taxes shall 181
242	236		have priority over such benefit assessment lien, and provided that the 182
243	237		precedence of such benefit assessment lien over any lien held by an 183
244	238		existing mortgage holder shall be subject to the written consent of such 184
245	239		existing mortgage holder. To the extent any benefit assessment lien 185
246	240		installment is not paid when due, the benefit assessment lien may be 186
247	241		foreclosed to the extent of any unpaid installment payments due and 187
248	242		owing and any penalties, interest and fees related thereto. In the event 188
249	243		a benefit assessment lien is foreclosed or a lien for taxes of the 189
250	244		municipality on real property is foreclosed or enforced by levy and sale 190
251	245		in accordance with chapter 204, the benefit assessment lien shall be 191
252	246		extinguished solely with regard to any installments that were due and 192
253	247		owing on the date of the judgment of such foreclosure or levy and sale 193
254	248		and the benefit assessment lien shall otherwise survive such judgment 194
255	249		or levy and sale to the extent of any unpaid installment payments of the 195
256	250		benefit assessment secured by such benefit assessment lien that are due 196
257	251		after the date of such judgment or levy and sale. 197
258	252		(h) Any participating municipality may assign to the bank any and 198
259	253		all benefit assessment liens filed by the participating municipality, as 199
260	254		provided in the written agreement between the participating 200
261	255		municipality and the bank. The bank may sell or assign, for 201
262		-	consideration, any and all benefit assessment liens received from the 202 Raised Bill No. 6571
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	256	+	consideration, any and all benefit assessment liens received from the 202
269	257		participating municipality. The consideration received by the bank shall 203
270	258		be negotiated between the bank and the assignee. The assignee or 204
271	259		assignees of such benefit assessment liens shall have and possess the 205
272		-	same powers and rights at law or in equity as the bank and the 206
	260	+	same powers and rights at law or in equity as the bank and the 206 Raised Bill No. 6571
	261	+
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273	266		participating municipality and its tax collector would have had if the 207
274	267		benefit assessment lien had not been assigned with regard to the 208
275	268		precedence and priority of such benefit assessment lien, the accrual of 209
276	269		interest and the fees and expenses of collection. The assignee shall have 210
277	270		the same rights to enforce such benefit assessment liens as any private 211
278	271		party holding a lien on real property, including, but not limited to, 212
279	272		foreclosure and a suit on the debt. Costs and reasonable attorneys' fees 213
280	273		incurred by the assignee as a result of any foreclosure action or other 214
281	274		legal proceeding brought pursuant to this section and directly related to 215
282	275		the proceeding shall be taxed in any such proceeding against each 216
283	276		person having title to any property subject to the proceedings. Such 217
284	277		costs and fees may be collected by the assignee at any time after demand 218
285	278		for payment has been made by the assignee. 219
286	279		This act shall take effect as follows and shall amend the following
287	280		sections:
288	281
289	282		Section 1 July 1, 2021 16a-40g
290	283
291		-	ET Joint Favorable
	284	+	Statement of Purpose:
	285	+	To create financing opportunities for zero-emission vehicle
	286	+	infrastructure and resiliency measures.
	287	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
	288	+	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
	289	+	underlined.]
292	290