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General Assembly Substitute Bill No. 93
February Session, 2022
AN ACT CONCERNING THE COMMERCIAL PROPERTY 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 Section 16a-40g of the general statutes is repealed and the 1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, 2022): 2
(a) As used in this section: 3
(1) "Zero-emission vehicle" has the same meaning as provided in 4
section 4a-67d; 5
(2) "Resilience" has the same meaning as provided in section 16-6
244aa; 7
[(1)] (3) "Energy improvements" means (A) participation in a district 8
heating and cooling system by qualifying commercial real property, (B) 9
participation in a microgrid, as defined in section 16-243y, including any 10
related infrastructure for such microgrid, by qualifying commercial real 11
property, provided such microgrid and any related infrastructure 12
incorporate clean energy, as defined in section 16-245n, (C) any 13
improvement, renovation or retrofitting of qualifying commercial real 14
property to reduce energy consumption or improve energy efficiency, 15
(D) installation of a renewable energy system to service qualifying 16 Substitute Bill No. 93
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commercial real property, [or] (E) installation of a solar thermal or 17
geothermal system to service qualifying commercial real property, (F) 18
installation of refueling infrastructure for zero-emission vehicles to a 19
qualifying commercial real property, or (G) installation of resilience 20
improvements to a qualifying commercial real property, provided such 21
renovation, retrofit or installation described in [subparagraph (C), (D) 22
or (E)] subparagraphs (C) to (G), inclusive, of this subdivision is 23
permanently fixed to such qualifying commercial real property; 24
[(2)] (4) "District heating and cooling system" means a local system 25
consisting of a pipeline or network providing hot water, chilled water 26
or steam from one or more sources to multiple buildings; 27
[(3)] (5) "Qualifying commercial real property" means any 28
commercial or industrial property, regardless of ownership, that meets 29
the qualifications established for the commercial sustainable energy 30
program; 31
[(4)] (6) "Commercial or industrial property" means any real property 32
other than a residential dwelling containing less than five dwelling 33
units; 34
[(5)] (7) "Benefited property owner" means an owner of qualifying 35
commercial real property who desires to install energy improvements 36
and provides free and willing consent to the benefit assessment against 37
the qualifying commercial real property; 38
[(6)] (8) "Commercial sustainable energy program" means a program 39
that facilitates energy improvements and utilizes the benefit 40
assessments authorized by this section as security for the financing of 41
the energy improvements; 42
[(7)] (9) "Municipality" means a municipality, as defined in section 7-43
369; 44
[(8)] (10) "Benefit assessment" means the assessment authorized by 45
this section; 46 Substitute Bill No. 93
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[(9)] (11) "Participating municipality" means a municipality that has 47
entered into a written agreement, as approved by its legislative body, 48
with the bank pursuant to which the municipality has agreed to assess, 49
collect, remit and assign, benefit assessments to the bank in return for 50
energy improvements for benefited property owners within such 51
municipality and costs reasonably incurred in performing such duties; 52
[(10)] (12) "Bank" means the Connecticut Green Bank; and 53
[(11)] (13) "Third-party capital provider" means an entity, other than 54
the bank, that provides financing, leases or power purchase agreements 55
directly to benefited property owners for energy improvements. 56
(b) (1) The bank shall establish a commercial sustainable energy 57
program in the state, and in furtherance thereof, is authorized to make 58
appropriations for and issue bonds, notes or other obligations for the 59
purpose of financing, (A) energy improvements; (B) related energy 60
audits; (C) renewable energy system feasibility studies; and (D) 61
verification reports of the installation and effectiveness of such 62
improvements. The bonds, notes or other obligations shall be issued in 63
accordance with legislation authorizing the bank to issue bonds, notes 64
or other obligations generally. Such bonds, notes or other obligations 65
may be secured as to both principal and interest by a pledge of revenues 66
to be derived from the commercial sustainable energy program, 67
including revenues from benefit assessments on qualifying commercial 68
real property, as authorized in this section. 69
(2) When the bank has made appropriations for energy 70
improvements for qualifying commercial real property or other costs of 71
the commercial sustainable energy program, including interest costs 72
and other costs related to the issuance of bonds, notes or other 73
obligations to finance the appropriation, the bank may require the 74
participating municipality in which the qualifying commercial real 75
property is located to levy a benefit assessment against the qualifying 76
commercial real property especially benefited thereby. 77 Substitute Bill No. 93
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(3) The bank (A) shall develop program guidelines governing the 78
terms and conditions under which state and third-party capital provider 79
financing may be made available to the commercial sustainable energy 80
program, including, in consultation with representatives from the 81
banking industry, municipalities and property owners, developing the 82
parameters for consent by existing mortgage holders and may serve as 83
an aggregating entity for the purpose of securing state or private third-84
party capital provider financing for energy improvements pursuant to 85
this section, (B) shall establish the position of commercial sustainable 86
energy program liaison within the bank, (C) may establish a loan loss 87
reserve or other credit enhancement program for qualifying commercial 88
real property, (D) may use the services of one or more private, public or 89
quasi-public third-party administrators to administer, provide support 90
or obtain financing for the commercial sustainable energy program, (E) 91
shall adopt standards to [ensure that] determine whether the combined 92
projected energy cost savings and other associated savings of the energy 93
improvements over the useful life of such improvements exceed the 94
costs of such improvements, except that such standards shall not apply 95
to the installation of refueling infrastructure for zero-emission vehicles 96
or resilience improvements adopted under this section, and (F) may 97
encourage third-party capital providers to provide financing, leases and 98
power purchase agreements directly to benefited property owners in 99
lieu of or in addition to the bank providing such loans. 100
(4) The bank shall consult with the Department of Energy and 101
Environmental Protection and the Connecticut Institute for Resilience 102
and Climate Adaptation to develop program eligibility criteria for 103
financing of resilience improvements, consistent with state 104
environmental resource protection and community resilience goals. 105
(c) Before establishing a commercial sustainable energy program 106
under this section, the bank shall provide notice to the electric 107
distribution company, as defined in section 16-1, that services the 108
participating municipality. 109
(d) If a benefited property owner requests financing from the bank or 110 Substitute Bill No. 93
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a third-party capital provider for energy improvements under this 111
section, the bank shall: 112
(1) Require performance of an energy audit, [or] renewable energy 113
system feasibility analysis, or resilience study on the qualifying 114
commercial real property that assesses the expected energy or resilience 115
cost savings of the energy or resilience improvements over the useful 116
life of such improvements before approving such financing; 117
(2) If financing is approved, either by the bank or the third-party 118
capital provider, require the participating municipality to levy a benefit 119
assessment on the qualifying commercial real property with the 120
property owner in a principal amount sufficient to pay the costs of the 121
energy improvements and any associated costs the bank or the third-122
party capital provider determines will benefit the qualifying 123
commercial real property; 124
(3) Impose requirements and criteria to ensure that the proposed 125
energy improvements are consistent with the purpose of the commercial 126
sustainable energy program; 127
(4) Impose requirements and conditions on the financing to ensure 128
timely repayment, including, but not limited to, procedures for placing 129
a benefit assessment lien on a property as security for the repayment of 130
the benefit assessment; and 131
(5) Require that the property owner provide written notice, not less 132
than thirty days prior to the recording of any benefit assessment lien 133
securing a benefit assessment for energy improvements for such 134
property, to any existing mortgage holder of such property, of the 135
property owner's intent to finance such energy improvements pursuant 136
to this section. 137
(e) (1) The bank or the third-party capital provider may enter into a 138
financing agreement with the property owner of qualifying commercial 139
real property. After such agreement is entered into, and upon notice 140
from the bank, the participating municipality shall (A) place a caveat on 141 Substitute Bill No. 93
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the land records indicating that a benefit assessment and a benefit 142
assessment lien are anticipated upon completion of energy 143
improvements for such property, or (B) at the direction of the bank, levy 144
the benefit assessment and file a benefit assessment lien on the land 145
records based on the estimated costs of the energy improvements prior 146
to the completion or upon the completion of such improvements. 147
(2) The bank or the third-party capital provider shall disclose to the 148
property owner the costs and risks associated with participating in the 149
commercial sustainable energy program established by this section, 150
including risks related to the failure of the property owner to pay the 151
benefit assessment. The bank or the third-party capital provider shall 152
disclose to the property owner the effective interest rate of the benefit 153
assessment, including fees charged by the bank or the third-party capital 154
provider to administer the program, and the risks associated with 155
variable interest rate financing. The bank or the third-party capital 156
provider shall notify the property owner that such owner may rescind 157
any financing agreement entered into pursuant to this section not later 158
than three business days after such agreement. 159
(f) The bank or the third-party capital provider shall set a fixed or 160
variable rate of interest for the repayment of the benefit assessment 161
amount at the time the benefit assessment is made. Such interest rate, as 162
may be supplemented with state or federal funding as may become 163
available, shall be sufficient to pay the bank's financing and 164
administrative costs of the commercial sustainable energy program, 165
including delinquencies. 166
(g) Benefit assessments levied and filed pursuant to this section and 167
the interest, fees and any penalties thereon shall constitute a lien against 168
the qualifying commercial real property on which they are made until 169
they are paid. Such benefit assessment lien, shall be paid in installments 170
and each installment payment shall be collected in the same manner as 171
the property taxes of the participating municipality on real property, 172
including, in the event of default or delinquency, with respect to any 173
penalties, fees and remedies. Each such benefit assessment lien may be 174 Substitute Bill No. 93
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recorded and released in the manner provided for property tax liens and 175
shall take precedence over all other liens or encumbrances except a lien 176
for taxes of the municipality on real property, which lien for taxes shall 177
have priority over such benefit assessment lien, and provided that the 178
precedence of such benefit assessment lien over any lien held by an 179
existing mortgage holder shall be subject to the written consent of such 180
existing mortgage holder. To the extent any benefit assessment lien 181
installment is not paid when due, the benefit assessment lien may be 182
foreclosed to the extent of any unpaid installment payments due and 183
owing and any penalties, interest and fees related thereto. In the event 184
a benefit assessment lien is foreclosed or a lien for taxes of the 185
municipality on real property is foreclosed or enforced by levy and sale 186
in accordance with chapter 204, the benefit assessment lien shall be 187
extinguished solely with regard to any installments that were due and 188
owing on the date of the judgment of such foreclosure or levy and sale 189
and the benefit assessment lien shall otherwise survive such judgment 190
or levy and sale to the extent of any unpaid installment payments of the 191
benefit assessment secured by such benefit assessment lien that are due 192
after the date of such judgment or levy and sale. 193
(h) Any participating municipality may assign to the bank any and 194
all benefit assessment liens filed by the participating municipality, as 195
provided in the written agreement between the participating 196
municipality and the bank. The bank may sell or assign, for 197
consideration, any and all benefit assessment liens received from the 198
participating municipality. The consideration received by the bank shall 199
be negotiated between the bank and the assignee. The assignee or 200
assignees of such benefit assessment liens shall have and possess the 201
same powers and rights at law or in equity as the bank and the 202
participating municipality and its tax collector would have had if the 203
benefit assessment lien had not been assigned with regard to the 204
precedence and priority of such benefit assessment lien, the accrual of 205
interest and the fees and expenses of collection. The assignee shall have 206
the same rights to enforce such benefit assessment liens as any private 207
party holding a lien on real property, including, but not limited to, 208 Substitute Bill No. 93
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foreclosure and a suit on the debt. Costs and reasonable attorneys' fees 209
incurred by the assignee as a result of any foreclosure action or other 210
legal proceeding brought pursuant to this section and directly related to 211
the proceeding shall be taxed in any such proceeding against each 212
person having title to any property subject to the proceedings. Such 213
costs and fees may be collected by the assignee at any time after demand 214
for payment has been made by the assignee. 215
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2022 16a-40g
ET Joint Favorable Subst.