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 Section 16a-40g of the general statutes is repealed and the 1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