Substitute Senate Bill No. 93
Public Act No. 22-6
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 Section 16a-40g of the general statutes is repealed and the
following is substituted in lieu thereof (Effective October 1, 2022):
(a) As used in this section:
(1) "Zero-emission vehicle" has the same meaning as provided in
section 4a-67d;
(2) "Resilience" has the same meaning as provided in section 16-
244aa;
[(1)] (3) "Energy improvements" means (A) participation in a district
heating and cooling system by qualifying commercial real property, (B)
participation in a microgrid, as defined in section 16-243y, including any
related infrastructure for such microgrid, by qualifying commercial real
property, provided such microgrid and any related infrastructure
incorporate clean energy, as defined in section 16-245n, (C) any
improvement, renovation or retrofitting of qualifying commercial real
property to reduce energy consumption or improve energy efficiency,
(D) installation of a renewable energy system to service qualifying Substitute Senate Bill No. 93
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commercial real property, [or] (E) installation of a solar thermal or
geothermal system to service qualifying commercial real property, (F)
installation of refueling infrastructure for zero-emission vehicles to a
qualifying commercial real property, or (G) installation of resilience
improvements to a qualifying commercial real property, provided such
renovation, retrofit or installation described in [subparagraph (C), (D)
or (E)] subparagraphs (C) to (G), inclusive, of this subdivision is
permanently fixed to such qualifying commercial real property;
[(2)] (4) "District heating and cooling system" means a local system
consisting of a pipeline or network providing hot water, chilled water
or steam from one or more sources to multiple buildings;
[(3)] (5) "Qualifying commercial real property" means any
commercial or industrial property, regardless of ownership, that meets
the qualifications established for the commercial sustainable energy
program;
[(4)] (6) "Commercial or industrial property" means any real property
other than a residential dwelling containing less than five dwelling
units;
[(5)] (7) "Benefited property owner" means an owner of qualifying
commercial real property who desires to install energy improvements
and provides free and willing consent to the benefit assessment against
the qualifying commercial real property;
[(6)] (8) "Commercial sustainable energy program" means a program
that facilitates energy improvements and utilizes the benefit
assessments authorized by this section as security for the financing of
the energy improvements;
[(7)] (9) "Municipality" means a municipality, as defined in section 7-
369; Substitute Senate Bill No. 93
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[(8)] (10) "Benefit assessment" means the assessment authorized by
this section;
[(9)] (11) "Participating municipality" means a municipality that has
entered into a written agreement, as approved by its legislative body,
with the bank pursuant to which the municipality has agreed to assess,
collect, remit and assign, benefit assessments to the bank in return for
energy improvements for benefited property owners within such
municipality and costs reasonably incurred in performing such duties;
[(10)] (12) "Bank" means the Connecticut Green Bank; and
[(11)] (13) "Third-party capital provider" means an entity, other than
the bank, that provides financing, leases or power purchase agreements
directly to benefited property owners for energy improvements.
(b) (1) The bank shall establish a commercial sustainable energy
program in the state, and in furtherance thereof, is authorized to make
appropriations for and issue bonds, notes or other obligations for the
purpose of financing, (A) energy improvements; (B) related energy
audits; (C) renewable energy system feasibility studies; and (D)
verification reports of the installation and effectiveness of such
improvements. The bonds, notes or other obligations shall be issued in
accordance with legislation authorizing the bank to issue bonds, notes
or other obligations generally. Such bonds, notes or other obligations
may be secured as to both principal and interest by a pledge of revenues
to be derived from the commercial sustainable energy program,
including revenues from benefit assessments on qualifying commercial
real property, as authorized in this section.
(2) When the bank has made appropriations for energy
improvements for qualifying commercial real property or other costs of
the commercial sustainable energy program, including interest costs
and other costs related to the issuance of bonds, notes or other Substitute Senate Bill No. 93
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obligations to finance the appropriation, the bank may require the
participating municipality in which the qualifying commercial real
property is located to levy a benefit assessment against the qualifying
commercial real property especially benefited thereby.
(3) The bank (A) shall develop program guidelines governing the
terms and conditions under which state and third-party capital provider
financing may be made available to the commercial sustainable energy
program, including, in consultation with representatives from the
banking industry, municipalities and property owners, developing the
parameters for consent by existing mortgage holders and may serve as
an aggregating entity for the purpose of securing state or private third-
party capital provider financing for energy improvements pursuant to
this section, (B) shall establish the position of commercial sustainable
energy program liaison within the bank, (C) may establish a loan loss
reserve or other credit enhancement program for qualifying commercial
real property, (D) may use the services of one or more private, public or
quasi-public third-party administrators to administer, provide support
or obtain financing for the commercial sustainable energy program, (E)
shall adopt standards to [ensure that] determine whether the combined
projected energy cost savings and other associated savings of the energy
improvements over the useful life of such improvements exceed the
costs of such improvements, except that such standards shall not apply
to the installation of refueling infrastructure for zero-emission vehicles
or resilience improvements adopted under this section, and (F) may
encourage third-party capital providers to provide financing, leases and
power purchase agreements directly to benefited property owners in
lieu of or in addition to the bank providing such loans.
(4) The bank shall consult with the Department of Energy and
Environmental Protection and the Connecticut Institute for Resilience
and Climate Adaptation to develop program eligibility criteria for
financing of resilience improvements, consistent with state Substitute Senate Bill No. 93
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environmental resource protection and community resilience goals.
(c) Before establishing a commercial sustainable energy program
under this section, the bank shall provide notice to the electric
distribution company, as defined in section 16-1, that services the
participating municipality.
(d) If a benefited property owner requests financing from the bank or
a third-party capital provider for energy improvements under this
section, the bank shall:
(1) Require performance of an energy audit, [or] renewable energy
system feasibility analysis, or resilience study on the qualifying
commercial real property that assesses the expected energy or resilience
cost savings of the energy or resilience improvements over the useful
life of such improvements before approving such financing;
(2) If financing is approved, either by the bank or the third-party
capital provider, require the participating municipality to levy a benefit
assessment on the qualifying commercial real property with the
property owner in a principal amount sufficient to pay the costs of the
energy improvements and any associated costs the bank or the third-
party capital provider determines will benefit the qualifying
commercial real property;
(3) Impose requirements and criteria to ensure that the proposed
energy improvements are consistent with the purpose of the commercial
sustainable energy program;
(4) Impose requirements and conditions on the financing to ensure
timely repayment, including, but not limited to, procedures for placing
a benefit assessment lien on a property as security for the repayment of
the benefit assessment; and
(5) Require that the property owner provide written notice, not less Substitute Senate Bill No. 93
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than thirty days prior to the recording of any benefit assessment lien
securing a benefit assessment for energy improvements for such
property, to any existing mortgage holder of such property, of the
property owner's intent to finance such energy improvements pursuant
to this section.
(e) (1) The bank or the third-party capital provider may enter into a
financing agreement with the property owner of qualifying commercial
real property. After such agreement is entered into, and upon notice
from the bank, the participating municipality shall (A) place a caveat on
the land records indicating that a benefit assessment and a benefit
assessment lien are anticipated upon completion of energy
improvements for such property, or (B) at the direction of the bank, levy
the benefit assessment and file a benefit assessment lien on the land
records based on the estimated costs of the energy improvements prior
to the completion or upon the completion of such improvements.
(2) The bank or the third-party capital provider shall disclose to the
property owner the costs and risks associated with participating in the
commercial sustainable energy program established by this section,
including risks related to the failure of the property owner to pay the
benefit assessment. The bank or the third-party capital provider shall
disclose to the property owner the effective interest rate of the benefit
assessment, including fees charged by the bank or the third-party capital
provider to administer the program, and the risks associated with
variable interest rate financing. The bank or the third-party capital
provider shall notify the property owner that such owner may rescind
any financing agreement entered into pursuant to this section not later
than three business days after such agreement.
(f) The bank or the third-party capital provider shall set a fixed or
variable rate of interest for the repayment of the benefit assessment
amount at the time the benefit assessment is made. Such interest rate, as
may be supplemented with state or federal funding as may become Substitute Senate Bill No. 93
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available, shall be sufficient to pay the bank's financing and
administrative costs of the commercial sustainable energy program,
including delinquencies.
(g) Benefit assessments levied and filed pursuant to this section and
the interest, fees and any penalties thereon shall constitute a lien against
the qualifying commercial real property on which they are made until
they are paid. Such benefit assessment lien, shall be paid in installments
and each installment payment shall be collected in the same manner as
the property taxes of the participating municipality on real property,
including, in the event of default or delinquency, with respect to any
penalties, fees and remedies. Each such benefit assessment lien may be
recorded and released in the manner provided for property tax liens and
shall take precedence over all other liens or encumbrances except a lien
for taxes of the municipality on real property, which lien for taxes shall
have priority over such benefit assessment lien, and provided that the
precedence of such benefit assessment lien over any lien held by an
existing mortgage holder shall be subject to the written consent of such
existing mortgage holder. To the extent any benefit assessment lien
installment is not paid when due, the benefit assessment lien may be
foreclosed to the extent of any unpaid installment payments due and
owing and any penalties, interest and fees related thereto. In the event
a benefit assessment lien is foreclosed or a lien for taxes of the
municipality on real property is foreclosed or enforced by levy and sale
in accordance with chapter 204, the benefit assessment lien shall be
extinguished solely with regard to any installments that were due and
owing on the date of the judgment of such foreclosure or levy and sale
and the benefit assessment lien shall otherwise survive such judgment
or levy and sale to the extent of any unpaid installment payments of the
benefit assessment secured by such benefit assessment lien that are due
after the date of such judgment or levy and sale.
(h) Any participating municipality may assign to the bank any and Substitute Senate Bill No. 93
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all benefit assessment liens filed by the participating municipality, as
provided in the written agreement between the participating
municipality and the bank. The bank may sell or assign, for
consideration, any and all benefit assessment liens received from the
participating municipality. The consideration received by the bank shall
be negotiated between the bank and the assignee. The assignee or
assignees of such benefit assessment liens shall have and possess the
same powers and rights at law or in equity as the bank and the
participating municipality and its tax collector would have had if the
benefit assessment lien had not been assigned with regard to the
precedence and priority of such benefit assessment lien, the accrual of
interest and the fees and expenses of collection. The assignee shall have
the same rights to enforce such benefit assessment liens as any private
party holding a lien on real property, including, but not limited to,
foreclosure and a suit on the debt. Costs and reasonable attorneys' fees
incurred by the assignee as a result of any foreclosure action or other
legal proceeding brought pursuant to this section and directly related to
the proceeding shall be taxed in any such proceeding against each
person having title to any property subject to the proceedings. Such
costs and fees may be collected by the assignee at any time after demand
for payment has been made by the assignee.