Indiana 2024 Regular Session

Indiana Senate Bill SB0051 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	Introduced Version
3	3	SENATE BILL No. 51
4	4	_____
5	5	DIGEST OF INTRODUCED BILL
6	6	Citations Affected: IC 36-9-44.
7	7	Synopsis: Commercial property assessed capital expenditure program.
8	8	Authorizes counties, cities, and towns (local units) to adopt an
9	9	ordinance for a commercial property assessed capital expenditure
10	10	program (C-PACE program) and enter into an assessment contract with
11	11	the owner or owners of commercial property to impose a voluntary
12	12	C-PACE tax assessment and lien on an applicant's property as a means
13	13	of assisting the applicant in obtaining financing of eligible clean energy
14	14	improvements on the property. Defines an "eligible improvement".
15	15	Requires the local unit to obtain written consent of each existing
16	16	mortgage lienholder on the property stating that the lienholder does not
17	17	object to the imposition of the C-PACE tax assessment. Requires
18	18	certain provisions to be included in an assessment contract. Specifies
19	19	the procedures for imposing the assessment, collection, enforcement,
20	20	and the priority of any tax lien. Prohibits the local unit from issuing
21	21	bonds secured by tax revenue from any special assessment and further
22	22	specifies that a local unit shall have no financial obligation or liability
23	23	for the payment of tax revenue from a special assessment, other than to
24	24	transfer the proceeds to the financing provider for the improvements.
25	25	Effective: July 1, 2024.
26	26	Walker G
27	27	January 8, 2024, read first time and referred to Committee on Insurance and Financial
28	28	Institutions.
29	29	2024 IN 51—LS 6241/DI 120 Introduced
30	30	Second Regular Session of the 123rd General Assembly (2024)
31	31	PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
32	32	Constitution) is being amended, the text of the existing provision will appear in this style type,
33	33	additions will appear in this style type, and deletions will appear in this style type.
34	34	Additions: Whenever a new statutory provision is being enacted (or a new constitutional
35	35	provision adopted), the text of the new provision will appear in this style type. Also, the
36	36	word NEW will appear in that style type in the introductory clause of each SECTION that adds
37	37	a new provision to the Indiana Code or the Indiana Constitution.
38	38	Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
39	39	between statutes enacted by the 2023 Regular Session of the General Assembly.
40	40	SENATE BILL No. 51
41	41	A BILL FOR AN ACT to amend the Indiana Code concerning
42	42	taxation.
43	43	Be it enacted by the General Assembly of the State of Indiana:
44	44	1 SECTION 1. IC 36-9-44 IS ADDED TO THE INDIANA CODE AS
45	45	2 A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY
46	46	3 1, 2024]:
47	47	4 Chapter 44. Commercial Property Assessed Capital
48	48	5 Expenditure Program
49	49	6 Sec. 1. As used in this chapter, "administrator" means the local
50	50	7 unit, an agency of a local unit, or a private third party designated
51	51	8 by the local unit to administer a program established under this
52	52	9 chapter.
53	53	10 Sec. 2. As used in this chapter, "assessment contract" means a
54	54	11 contract entered into between a local unit and a commercial
55	55	12 property owner in a district pursuant to a program established by
56	56	13 the local unit.
57	57	14 Sec. 3. As used in this chapter, "C-PACE assessment" means an
58	58	15 assessment and lien created pursuant to an assessment contract
59	59	16 under section 10 of this chapter.
60	60	17 Sec. 4. As used in this chapter, "district" means an assessment
61	61	2024 IN 51—LS 6241/DI 120 2
62	62	1 district designated by a local unit under section 10 of this chapter
63	63	2 in which a commercial property owner may apply to a local unit to
64	64	3 enter into an assessment contract.
65	65	4 Sec. 5. As used in this chapter, "eligible improvement" means
66	66	5 one (1) or more of the following projects, permanently affixed to
67	67	6 any new construction, renovation, or retrofitting of qualifying
68	68	7 commercial real property:
69	69	8 (1) Energy efficiency improvement projects, which include
70	70	9 materials, equipment, or devices that result in a decrease in
71	71	10 consumption of or demand for electricity or natural gas.
72	72	11 (2) Alternative energy projects, which include an energy
73	73	12 system that generates energy by use of low or zero-emissions
74	74	13 generation technology with substantial long term production,
75	75	14 including solar, wind, and geothermal resources, or fuel cell
76	76	15 equipment using an electrochemical process to generate
77	77	16 electricity and heat or biomass resources.
78	78	17 (3) Resiliency improvement projects, which include
79	79	18 improvements that increase the resilience of a property,
80	80	19 including flood mitigation, storm water management, energy
81	81	20 storage and microgrids, alternative vehicle charging
82	82	21 infrastructure, fire, wind, or seismic resistance, or inundation
83	83	22 adaptation.
84	84	23 (4) Water efficiency and safe drinking water improvement
85	85	24 projects, which include measures, equipment, or devices that
86	86	25 decrease the consumption of or demand for water, address
87	87	26 safe drinking water, or eliminate lead from water used for
88	88	27 drinking or cooking.
89	89	28 Sec. 6. As used in this chapter, "financing provider" means a
90	90	29 person or corporate entity and their successors or assigns that
91	91	30 provides financing or refinancing for the construction, installation,
92	92	31 or modification of an eligible improvement on real property.
93	93	32 Sec. 7. As used in this chapter, "local unit" means a county, city,
94	94	33 town, or other political subdivision.
95	95	34 Sec. 8. As used in this chapter, "program" means a commercial
96	96	35 property assessed capital expenditure program established by a
97	97	36 local unit under this chapter for the purpose of furthering
98	98	37 economic development, energy efficiency, reduction of water
99	99	38 consumption, improvement of safe drinking water, alternative
100	100	39 energy, and resiliency.
101	101	40 Sec. 9. As used in this chapter, "property" means commercial
102	102	41 real property and improvements, including:
103	103	42 (1) privately owned commercial, industrial, or agricultural
104	104	2024 IN 51—LS 6241/DI 120 3
105	105	1 property;
106	106	2 (2) privately owned multi-family property consisting of five
107	107	3 (5) or more dwelling units;
108	108	4 (3) property owned by nonprofit, charitable, or religious
109	109	5 organizations; and
110	110	6 (4) a leasehold of property owned by a private entity or the
111	111	7 state or a local unit.
112	112	8 Sec. 10. (a) The fiscal body of a local unit may adopt an
113	113	9 ordinance to establish a commercial property assessed capital
114	114	10 expenditure program and enter into assessment contracts with
115	115	11 owners of commercial property located in a district designated
116	116	12 under the program.
117	117	13 (b) An ordinance adopted under this section may designate:
118	118	14 (1) all of the territory of the local unit as a district;
119	119	15 (2) one (1) or more specific geographic territories within the
120	120	16 local unit as a district in which a commercial property owner
121	121	17 may petition the local unit to enter into an assessment
122	122	18 contract; or
123	123	19 (3) a program administrator with authority to designate
124	124	20 geographic territories as a district.
125	125	21 (c) If a local unit establishes a program under subsection (a),
126	126	22 upon application to the local unit, the local unit or its duly
127	127	23 delegated officer may enter into an assessment contract with the
128	128	24 owner or owners of record of commercial property located within
129	129	25 a district to impose a voluntary C-PACE assessment on the
130	130	26 applicant's property as a means of assisting the applicant in
131	131	27 obtaining financing of eligible improvements on the property.
132	132	28 (d) A petition submitted to the fiscal body of a local unit must
133	133	29 contain the signature of each owner of record of the property.
134	134	30 (e) Prior to entering into an assessment contract, the local unit
135	135	31 or its administrator must obtain from the property owner a written
136	136	32 consent of the holder of each existing mortgage lien on the
137	137	33 commercial property stating that the lienholder does not object to
138	138	34 the imposition of the C-PACE assessment.
139	139	35 (f) The local unit may assign all or part of its rights and duties
140	140	36 under an assessment contract to a financing provider or its
141	141	37 successors and assigns, notwithstanding rights or obligations the
142	142	38 local unit agrees to pursuant to an assessment contract.
143	143	39 (g) When a local unit establishes a program under this chapter,
144	144	40 the collection procedures must comply with this chapter.
145	145	41 (h) A local unit may administer a program or delegate
146	146	42 administration to a state agency, another local unit of government,
147	147	2024 IN 51—LS 6241/DI 120 4
148	148	1 or an administrator if the administration procedures used conform
149	149	2 to the requirements of this chapter. Administration may include
150	150	3 review of applications, administration of the duties of the local unit
151	151	4 under the assessment contract, including billing, collection,
152	152	5 enforcement, and remittance of C-PACE assessments imposed
153	153	6 under this chapter.
154	154	7 Sec. 11. (a) A program must include a review process to qualify
155	155	8 a project as an eligible improvement in which the following apply
156	156	9 at a minimum:
157	157	10 (1) An applicant must demonstrate that the eligible
158	158	11 improvement provides a benefit to the public, in the form of
159	159	12 meeting the definition of an "eligible improvement" under
160	160	13 this chapter.
161	161	14 (2) For an existing building:
162	162	15 (A) where energy efficiency, alternative energy, or water
163	163	16 improvements are proposed, an applicant must provide:
164	164	17 (i) an energy analysis by a licensed professional engineer
165	165	18 or other qualified energy consultant; and
166	166	19 (ii) a statement by the author of the analysis that the
167	167	20 proposed eligible improvements will either result in
168	168	21 more efficient use or conservation of energy or water, or
169	169	22 the addition or use of alternative sources of energy or
170	170	23 water; or
171	171	24 (B) where resilience improvements are proposed, an
172	172	25 applicant must provide certification by a licensed
173	173	26 professional engineer or other qualified resiliency
174	174	27 consultant stating that the proposed eligible improvements
175	175	28 will result in improved resilience.
176	176	29 (3) For new construction, an applicant must provide
177	177	30 certification by a licensed professional engineer, engineering
178	178	31 firm, or other qualified energy or resiliency consultant stating
179	179	32 that the proposed eligible improvements will enable the
180	180	33 project in which they are installed to exceed the current
181	181	34 building code's requirements for:
182	182	35 (A) energy efficiency;
183	183	36 (B) water consumption; or
184	184	37 (C) resilience.
185	185	38 (b) After an approved eligible improvement is completed, an
186	186	39 applicant shall provide to the local unit written verification
187	187	40 provided by a licensed professional engineer, or other qualified
188	188	41 energy or resiliency consultant, stating that the eligible
189	189	42 improvement was properly completed and is operating as intended.
190	190	2024 IN 51—LS 6241/DI 120 5
191	191	1 Sec. 12. An assessment contract must include at least the
192	192	2 following terms:
193	193	3 (1) A legal description of the property.
194	194	4 (2) A schedule of C-PACE assessment installments that the
195	195	5 property owner or owners of record on the property
196	196	6 described in subdivision (1) agree to pay.
197	197	7 (3) A statement that the property owner or owners of record
198	198	8 are liable for all obligations incurred for financing the eligible
199	199	9 improvements and that the local unit will either transfer or
200	200	10 assign, as applicable, the proceeds from the payment of the
201	201	11 C-PACE assessment only as set forth in section 14(b) of this
202	202	12 chapter.
203	203	13 (4) A statement that the C-PACE assessment constitutes a lien
204	204	14 against the property on which the assessment is imposed until
205	205	15 the C-PACE assessment, including any interest or penalty, is
206	206	16 paid in full, and that the lien runs with the property and has
207	207	17 the same priority and status as other property tax and
208	208	18 assessment liens.
209	209	19 (5) A statement that the period of the C-PACE assessment will
210	210	20 not exceed the weighted average of the useful life of the
211	211	21 eligible improvement that is the basis for the C-PACE
212	212	22 assessment.
213	213	23 Sec. 13. (a) A local unit or program administrator may impose
214	214	24 a fee on property owners who enter into an assessment contract for
215	215	25 the costs of administering the program.
216	216	26 (b) Fees may not exceed the greater of one percent (1%) of the
217	217	27 total amount of any assessment or twenty-five thousand dollars
218	218	28 ($25,000).
219	219	29 Sec. 14. (a) Except as provided in subsection (b), a local unit
220	220	30 shall have no financial obligation or any other obligation or
221	221	31 liability for the payment of revenue received from a C-PACE
222	222	32 assessment under this chapter and shall not be deemed to have
223	223	33 incurred or assumed any such obligation or liability as a result of
224	224	34 entering into an assessment contract under this chapter.
225	225	35 (b) A local unit may agree to either of the following under the
226	226	36 terms of an assessment contract:
227	227	37 (1) If subdivision (2) does not apply, the fiscal officer of the
228	228	38 local unit shall transfer the proceeds from the payment of a
229	229	39 C-PACE assessment to the financing provider for the eligible
230	230	40 improvement not later than thirty (30) days after the revenue
231	231	41 is received.
232	232	42 (2) The local unit may assign the right to receive the proceeds
233	233	2024 IN 51—LS 6241/DI 120 6
234	234	1 from a C-PACE assessment to the financing provider for the
235	235	2 eligible improvements, in which case the payment of the
236	236	3 C-PACE assessment must be made by the property owner
237	237	4 directly to the financing provider.
238	238	5 (c) A local unit may not issue bonds secured by revenue from a
239	239	6 C-PACE assessment under this chapter.
240	240	7 (d) A local unit may not agree to delay collection of any
241	241	8 C-PACE assessment, collect less than the entire amount of any
242	242	9 C-PACE assessment, or sell tax lien certificates or other obligations
243	243	10 representing any portion of a C-PACE assessment for less than the
244	244	11 entire amount of any C-PACE assessment, without the written
245	245	12 consent of all financing providers that provided financing with
246	246	13 respect to eligible improvements financed by that C-PACE
247	247	14 assessment.
248	248	15 Sec. 15. The following apply to a C-PACE assessment imposed
249	249	16 under the terms of an assessment contract:
250	250	17 (1) The assessment contract shall be recorded with the county
251	251	18 recorder's office in the county in which the property is located
252	252	19 immediately after it is executed. A local unit must record the
253	253	20 executed assessment contract or may delegate such recording
254	254	21 duties to the administrator or the financing provider.
255	255	22 (2) The local unit shall enforce the C-PACE assessment lien in
256	256	23 the same manner that a property tax lien against commercial
257	257	24 property is enforced by the local unit. A local unit may bill,
258	258	25 collect, and enforce the C-PACE assessment, subject to the
259	259	26 following guidelines:
260	260	27 (A) Delinquent C-PACE assessment installments will incur
261	261	28 interest and penalties in the same manner as delinquent
262	262	29 property taxes.
263	263	30 (B) In an enforcement or foreclosure action, C-PACE
264	264	31 assessment installments not yet due shall not be
265	265	32 accelerated or eliminated by foreclosure, including the
266	266	33 foreclosure of a property tax.
267	267	34 (3) If the local unit delegates the responsibilities for billing,
268	268	35 collection, and enforcement of the C-PACE assessment and
269	269	36 lien to the financing provider pursuant to the assessment
270	270	37 contract under this section:
271	271	38 (A) delinquent C-PACE assessment installments must
272	272	39 incur interest and penalties as specified in the financing
273	273	40 agreement between the property owner and financing
274	274	41 provider; and
275	275	42 (B) enforcement of a delinquent C-PACE assessment
276	276	2024 IN 51—LS 6241/DI 120 7
277	277	1 installment must be in the same manner as that of a
278	278	2 mortgage, except that C-PACE assessment installments not
279	279	3 yet due may not be accelerated or eliminated by
280	280	4 foreclosure of the past due amount of the C-PACE
281	281	5 assessment.
282	282	6 Sec. 16. (a) Any C-PACE assessment and any interest or
283	283	7 penalties on the assessment is a first and prior lien against the
284	284	8 property on which the C-PACE assessment is imposed, from the
285	285	9 date on which the notice of C-PACE assessment is recorded until
286	286	10 the amount of the assessment, including interest and penalties, are
287	287	11 paid.
288	288	12 (b) The lien runs with the land, and that portion of the
289	289	13 assessment under the assessment contract that is not yet due may
290	290	14 not be accelerated or eliminated by foreclosure of a property tax
291	291	15 lien.
292	292	16 (c) A provision of a mortgage or other agreement between a
293	293	17 lienholder and a property owner providing for the acceleration of
294	294	18 any C-PACE assessment under the mortgage or agreement solely
295	295	19 as a result of entering into an agreement to finance an assessment
296	296	20 is unenforceable, if the conditions set forth in this chapter are
297	297	21 satisfied.
298	298	2024 IN 51—LS 6241/DI 120