Virginia 2025 Regular Session

Virginia House Bill HB2509 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	2025 SESSION
2		-
3		-	HOUSE SUBSTITUTE
4		-
5		-	25105013D
	1	+	OFFERED FOR CONSIDERATION 1/28/2025
6	2
7	3		HOUSE BILL NO. 2509
8	4
9	5		AMENDMENT IN THE NATURE OF A SUBSTITUTE
10	6
11	7		(Proposed by the House Committee on Labor and Commerce
12	8
13	9		on ________________)
14	10
15	11		(Patron Prior to SubstituteDelegate Lopez)
16	12
17	13		A BILL to amend the Code of Virginia by adding in Chapter 17 of Title 45.2 an article numbered 10, consisting of sections numbered 45.2-1735 through 45.2-1744, relating to Virginia Clean Energy Innovation Bank established; report.
18	14
19	15
20	16
21	17		Be it enacted by the General Assembly of Virginia:
22	18
23	19		1. That the Code of Virginia is amended by adding in Chapter 17 of Title 45.2 an article numbered 10, consisting of sections numbered 45.2-1735 through 45.2-1744, as follows:
24	20
25	21		Article 10.
26	22
27	23		Virginia Clean Energy Innovation Bank.
28	24
29	25		45.2-1735. Definitions.
30	26
31	27		As used in this article, unless the context requires a different meaning:
32	28
33	29		"Bank" means the Virginia Clean Energy Innovation Bank established in 45.2-1736.
34	30
35	31		"Credit enhancement" means a pool of capital set aside to cover potential losses on loans and other investments made by financing entities. "Credit enhancement" includes loan loss reserves and loan guarantees.
36	32
37	33		"Energy storage system" means a system that absorbs, stores, and discharges electricity. "Energy storage system" does not include fossil fuel storage or power-to-gas storage that directly uses fossil fuel inputs.
38	34
39	35		"Fund" means the Virginia Clean Energy Innovation Fund established in 45.2-1737.
40	36
41	37		"Greenhouse gas emissions" means emissions of carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride emitted by anthropogenic sources.
42	38
43	39		"Microgrid system" means an electrical grid that (i) serves a discrete geographical area from distributed energy resources and (ii) can operate independently from the central electric grid on a permanent or temporary basis.
44	40
45	41		"Qualified project" means a project, technology, product, service, or measure promoting energy efficiency, clean energy, electrification, or water conservation and quality that (i) reduces greenhouse gas emissions; (ii) reduces energy use without diminishing the level of service; (iii) increases the deployment of renewable or non-carbon emitting energy projects, energy storage systems, district heating, smart grid technologies, or microgrid systems; (iv) replaces existing fossil-fuel-based technology with an end-use electric technology; (v) supports the development and deployment of electric vehicle charging stations and associated infrastructure, electric buses, and electric fleet vehicles; (vi) reduces water use or protects, restores, or preserves the quality of the Commonwealth's surface waters or the Chesapeake Bay; or (vii) incentivizes customers to shift demand in response to changes in the price of electricity or when system reliability is not jeopardized.
46	42
47	43		"Renewable energy" means electric energy generated by a source that is considered a renewable energy standard eligible source under the provisions of 56-585.5.
48	44
49	45		"Securitization" means the conversion of an asset composed of individual loans into marketable securities.
50	46
51	47		"Smart grid" means a digital technology that allows for two-way communication between a utility and the utility's customers and enables the utility to control power flow and load in real time.
52	48
53	49		45.2-1736. Virginia Clean Energy Innovation Bank; continued.
54	50
55	51		The Virginia Clean Energy Innovation Bank established pursuant to subsection L of Item 471 of Chapter 2 of the Acts of Assembly of 2024, Special Session I, is continued as a division within the Department to implement the provisions of this article and to approve expenditures and disbursements from the Virginia Clean Energy Innovation Fund.
56	52
57	53		45.2-1737. Virginia Clean Energy Innovation Fund.
58	54
59	55		From such funds as appropriated, there is hereby created in the state treasury a special nonreverting fund to be known as the Virginia Clean Energy Innovation Fund. The Fund shall be established on the books of the Comptroller. All funds appropriated for such purpose and any gifts, donations, grants, bequests, and other funds received on its behalf shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used solely for (i) the purposes of accelerating the deployment of clean energy projects, greenhouse gas emissions reduction projects, and other qualified projects through the strategic deployment of public funds in the form of grants, loans, credit enhancements, and other financing mechanisms in order to leverage existing public and private sources of capital to reduce the upfront and total cost of qualified projects and to overcome financial barriers to project adoption, including investments that would employ funds from the U.S. Department of Energy's Loan Program Office, and (ii) the administration of the Fund and the Bank. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by the Director.
60	56
61	57		45.2-1738. Powers and duties of the Bank.
62	58
63	59		A. In carrying out its powers and duties pursuant to this article, the Bank shall:
64	60
65	61		1. Seek to qualify as a state energy financing institution as defined in 42 U.S.C. 16511.
66	62
67	63		2. Serve as a financial resource to reduce the upfront and total costs of implementing qualified projects;
68	64
69	65		3. Ensure that all financed projects reduce or do not contribute to greenhouse gas emissions;
70	66
71	67		4. Ensure that financing terms and conditions offered are well suited to qualified projects;
72	68
73	69		5. Strategically prioritize the use of the Fund to leverage private investment in qualified projects, with the aim of achieving a high ratio of private to public money invested through funding mechanisms that support, enhance, and complement private lending and investment;
74	70
75	71		6. Coordinate with existing federal, state, local, utility, and other programs to ensure that the Fund is being used most effectively to add to and complement those programs;
76	72
77	73		7. Stimulate demand for qualified projects by (i) providing information to project participants about federal, state, local, utility, and other funding available through the Fund for qualifying projects and technical information on energy conservation and renewable energy measures; (ii) forming partnerships with contractors and informing contractors about financing programs available through the Fund; and (iii) developing innovative marketing strategies to stimulate project owner interest;
78	74
79	75		8. Finance projects in all regions of the Commonwealth;
80	76
81	77		9. Develop participant eligibility standards and other terms and conditions for financial support provided through the Fund;
82	78
83	79		10. Develop and administer (i) policies to collect reasonable fees for Bank services and (ii) risk management activities to support ongoing Bank activities;
84	80
85	81		11. Develop consumer protection standards governing the Bank's investments from the Fund to ensure that financial support is provided responsibly and transparently and is in the financial interest of participating project owners;
86	82
87	83		12. Develop methods to accurately measure the impact of the Bank's activities, particularly on low-income communities and on greenhouse gas emissions reductions;
88	84
89	85		13. Hire sufficient staff with the appropriate skills and qualifications to carry out the Bank's programs;
90	86
91	87		14. Apply for and accept Greenhouse Gas Reduction Fund grants authorized by the federal Clean Air Act, 42 U.S.C. 7434(a). To the extent practicable, applications for these funds by or on behalf of the Bank shall be made in coordination with other Virginia applicants;
92	88
93	89		15. Acting under its powers as a state energy financing institution under 42 U.S.C. 16511, collaborate with the U.S. Department of Energy Loan Programs Office to maximize benefits to Virginians;
94	90
95	91		16. Ensure that Bank contracts with all third-party administrators, contractors, and subcontractors contain required covenants, representations, and warranties specifying that contracted third parties are agents of the Bank and that all acts of contracted third parties are considered acts of the Bank, provided that the act is within the contracted scope of work; and
96	92
97	93		17. Undertake such other activities as are necessary to carry out the provisions of this article.
98	94
99	95		B. In carrying out its powers and duties pursuant to this article, the Bank may:
100	96
101	97		1. Employ credit enhancement mechanisms that reduce financial risk for financing entities by providing assurance that a limited portion of a loan or other financial instrument is assumed by the Bank via a loan loss reserve, loan guarantee, or other mechanism;
102	98
103	99		2. Co-invest in a qualified project by providing senior or subordinated debt, equity, or other mechanisms in conjunction with other investment, co-lending, or financing; and
104	100
105	101		3. Aggregate small and geographically dispersed qualified projects in order to diversify risk or secure additional private investment through securitization or similar resale of the Bank's interest in a completed qualified project.
106	102
107	103		45.2-1739. Bank lending practices; consumer protection.
108	104
109	105		The Bank shall require, for all projects for which the Bank provides financing through the Fund, that (i) financing is not offered without first ensuring that the participants meet the Bank's underwriting criteria and (ii) any loan made to a homeowner for a project on the homeowner's residence complies with all applicable state and federal consumer lending laws.
110	106
111	107		45.2-1740. Strategic plan.
112	108
113	109		A. By December 15, 2025, and each December 15 in odd-numbered years thereafter, the Bank shall develop and adopt a strategic plan that prioritizes the Bank's activities over the next two years. The strategic plan shall (i) develop specific programs to overcome market impediments through access to Bank financing and technical assistance and (ii) develop outreach and marketing strategies designed to make potential project developers, participants, and communities aware of financing and technical assistance available from the Bank.
114	110
115	111		B. Elements of the strategic plan shall be informed by the Bank's analysis of the market for qualified projects and by the Bank's experience under the previous strategic plan, including the degree to which performance targets were or were not achieved by each financing program.
116	112
117	113		C. The Bank shall establish annual targets in a strategic plan for each financing program regarding the number of projects, level of Bank investments, greenhouse gas emissions reductions, and installed generating capacity or energy savings the Bank hopes to achieve.
118	114
119	115		45.2-1741. Investment strategy; content; process.
120	116
121	117		A. No later than December 15, 2025, and every four years thereafter, the Bank shall adopt a long-term investment strategy to ensure that the Bank's paramount goal to reduce greenhouse gas emissions is reflected in all of the Bank's operations. The investment strategy shall address:
122	118
123	119		1. The types of qualified projects the Bank should focus on;
124	120
125	121		2. Gaps in current qualified project financing that present the greatest opportunities for successful action by the Bank;
126	122
127	123		3. How the Bank can best position itself to maximize its impact without displacing, subsidizing, or assuming risk that should be shared with financing entities;
128	124
129	125		4. Financing tools that will be most effective in achieving the Bank's goals;
130	126
131	127		5. Partnerships the Bank should establish with other organizations to increase the likelihood of success; and
132	128
133	129		6. How values of economic and geographic balance can be integrated into all investment operations of the Bank.
134	130
135	131		B. In developing an investment strategy, the Bank shall consult, at a minimum, with similar organizations in other states, lending authorities, state agencies, utilities, environmental and energy policy nonprofits, and other organizations that can provide valuable advice on the Bank's activities. The Bank shall coordinate with the Department of Environmental Quality and the Department of Conservation and Recreation to identify and incorporate flood resilience and water quality projects into the investment strategy.
136	132
137	133		C. The long-term investment strategy shall contain provisions ensuring that:
138	134
139	135		1. Bank investments from the Fund are not made solely to reduce private risk; and
140	136
141	137		2. Private financing entities do not unilaterally control the terms of investments to which the Bank is a party.
142	138
143	139		45.2-1742. Public outreach.
144	140
145	141		The Bank shall:
146	142
147	143		1. Maintain a public website that provides information about the Bank's operations, current financing programs, and practices, including rates, terms, and conditions; the number and amount of investments by project type; the number of jobs created; the financing application process; and other information; and
148	144
149	145		2. Hold quarterly meetings that are accessible online to update the general public on the Bank's activities, report progress being made in regard to the Bank's strategic plan and long-term investment strategy, and invite audience questions regarding Bank programs.
150	146
151	147		45.2-1743. Annual report.
152	148
153	149		The Bank shall submit to the Governor and the General Assembly an annual executive summary of the interim activity and work of the Bank no later than the first day of each regular session of the General Assembly. The executive summary shall be submitted as a report document as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports and shall be posted on the General Assembly's website. The executive summary shall include information regarding efforts supported by the Bank.
154	150
155	151		45.2-1744. Virginia Clean Energy Innovation Bank Advisory Board; members; terms; compensation.
156	152
157	153		A. The Virginia Clean Energy Innovation Bank Advisory Board (the Advisory Board) is established as an advisory board in the executive branch of state government. The Advisory Board shall:
158	154
159	155		1. Advise the Bank on the management of the Fund pursuant to the provisions of 45.2-1737;
160	156
161	157		2. Advise the Bank in carrying out its powers and duties described in 45.2-1738;
162	158
163	159		3. Collaborate with the Bank in the development of its strategic plan adopted pursuant to 45.2-1740;
164	160
165	161		4. Collaborate with the Bank in the development of its investment strategy adopted pursuant to 45.2-1741; and
166	162
167	163		5. Submit to the Governor and the General Assembly an annual report for publication as a report document as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports. The chairman shall submit to the Governor and the General Assembly an annual executive summary of the interim activity and work of the Advisory Board no later than the first day of each regular session of the General Assembly. The executive summary shall be submitted for publication as a report document as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports and shall be posted on the General Assembly's website.
168	164
169	165		B. The Advisory Board shall have a total membership of 12 members that includes nine nonlegislative citizen members and three ex officio members. Nonlegislative citizen members shall have expertise in real estate, finance, or project development, or legal expertise in zero-emission or low-emission energy generation, infrastructure, transportation, agriculture, storm water management, or housing, and shall be appointed as follows: four members to be appointed by the Senate Committee on Rules, four members to be appointed by the Speaker of the House of Delegates, and one member to be appointed by the Governor. The Chief Executive Officer of the Virginia Economic Development Partnership Authority, the Secretary of Finance, and the Director, or their designees, shall serve ex officio with voting privileges. Nonlegislative citizen members shall be citizens of the Commonwealth.
170	166
171	167		C. After an initial staggering of terms, nonlegislative citizen members of the Advisory Board shall serve terms of three years. No nonlegislative citizen member shall be eligible to serve more than two consecutive three-year terms. Any appointment to fill a vacancy shall be for the remainder of the unexpired term. A person appointed to fill a vacancy may be appointed to serve two additional terms. Ex officio members shall serve terms coincident with their terms of office.
172	168
173	169		D. Members of the Advisory Board shall receive such compensation for the performance of their duties as provided in 2.2-2813. Members shall be reimbursed for all reasonable and necessary expenses incurred in the performance of their duties as provided in 2.2-2813 and 2.2-2825. Funding for the costs of compensation and expenses of the members shall be provided by the Fund.
174	170
175	171		E. The Advisory Board shall annually elect a chairman and vice-chairman from among its nonlegislative citizen members. A majority of the members shall constitute a quorum for the transaction of the Advisory Board's business, and no vacancy in the membership shall impair the right of a quorum to exercise the rights and perform all duties of the Advisory Board. The Advisory Board shall meet at least quarterly or at the call of the chairman.
176	172
177	173		2. That the initial appointments of nonlegislative citizen members to the Virginia Clean Energy Innovation Bank Advisory Board established by this act shall be staggered as follows: (i) one member appointed by the Senate Committee on Rules for a term of one year and two members appointed by the Speaker of the House of Delegates for a term of one year; (ii) two members appointed by the Senate Committee on Rules for a term of two years and one member appointed by the Speaker of the House of Delegates for a term of two years; and (iii) one member appointed by the Senate Committee on Rules for a term of three years, one member appointed by the Speaker of the House of Delegates for a term of three years, and one member appointed by the Governor for a term of three years. A nonlegislative citizen member who is appointed for an initial term of one or two years may be appointed for an additional two terms.