Bill Text: CT SB00973 | 2017 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: An Act Concerning A Residential Sustainable Energy Program.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2017-05-17 - Referred by Senate to Committee on Finance, Revenue and Bonding [SB00973 Detail]

Download: Connecticut-2017-SB00973-Introduced.html

General Assembly

 

Raised Bill No. 973

January Session, 2017

 

LCO No. 4614

 

*04614_______ET_*

Referred to Committee on ENERGY AND TECHNOLOGY

 

Introduced by:

 

(ET)

 

AN ACT CONCERNING A RESIDENTIAL SUSTAINABLE ENERGY PROGRAM.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 7-121n of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2017):

(a) As used in this section:

(1) ["Energy improvements"] "Qualifying improvements" means any improvement, renovation or retrofitting of qualifying residential real property to reduce energy consumption or improve energy efficiency or installation of a [renewable energy] system [to service qualifying] that generates clean energy, as defined in section 16-245n, or customer-side distributed resources, as defined in section 16-1, improvements to address water conservation or resiliency measures including, but not limited to, flood resistant construction and hurricane resistant construction. Ancillary work in the installation of such qualifying improvements, including waste reduction, or addressing health and safety issues including, but not limited to, asbestos, mold and lead remediation, is permitted in the total cost of the qualified improvements, provided such improvements are permanently fixed to such qualifying residential real property; [, provided such renovation, retrofit or installation is permanently fixed to such qualifying real property;]

(2) ["Qualifying real property"] "Qualifying residential real property" means a single-family or multifamily residential dwelling [or a nonresidential building, regardless of ownership, that a municipality has determined can benefit from energy improvements] of four or fewer units that meets the qualifications established for the residential sustainable energy program;

(3) "Property owner" means an owner of qualifying residential real property who desires to install [energy] qualifying improvements and provides free and willing consent to the [contractual] levying of a benefit assessment against the qualifying residential real property; [and]

(4) ["Sustainable energy program" means a municipal program that authorizes a municipality to enter into contractual assessments on qualifying real property with property owners to finance the purchase and installation of energy improvements to qualifying real property within its municipal boundaries.] "Residential sustainable energy program" or "program" means a program that facilitates qualifying improvements and utilizes the benefit assessment authorized by this section to fund qualifying improvements;

(5) "Municipality" means a municipality, as defined in section 7-369;

(6) "Benefit assessment" means an assessment, of the same dignity and treatment and collected in the same manner as a municipal tax, levied by a government against a qualifying residential real property receiving the benefit of qualifying improvements as authorized by this section;

(7) "Participating municipality" means a municipality that enters into a written agreement, as approved by its legislative body, with the Connecticut Green Bank pursuant to which the municipality agrees, as part of its property tax collection process, to assess, collect, remit and assign benefit assessments, including interests, fees, penalties and charges, to the bank, in return for qualifying improvements for benefited property within such municipality and costs reasonably incurred in performing such duties;

(8) "Bank" means the Connecticut Green Bank, established under section 16-245n; and

(9) "Assessment contract" means an agreement between the bank and a property owner in a participating municipality whereby the property owner voluntarily consents to the placement of a benefit assessment to repay the funding of qualified improvements on the property.

(b) [Any municipality, that determines it is in the public interest, may establish a sustainable energy program to facilitate the increase of energy efficiency and renewable energy. A municipality shall make such a determination after issuing public notice and providing an opportunity for public comment regarding the establishment of a sustainable energy program.] (1) The bank shall establish a residential sustainable energy program in the state. In furtherance of such program, the bank is authorized to make appropriations and issue bonds, notes or other obligations to fund (A) qualifying improvements, (B) related energy or feasibility studies, (C) verification reports of the installation and effectiveness of such improvements, and (D) a loss reserve. The bank may utilize private, public or quasi-public third-party administrators to carry out its duties under this section. The bonds, notes or other obligations provided by the bank may be secured as to both principal and interest by (i) a pledge of the benefit assessment liens, (ii) such other collateral, and (iii) revenues to be derived from the residential sustainable energy program, including revenues from benefit assessments on qualifying residential real property, as authorized in this section.

(2) When the bank has made appropriations for qualifying improvements for qualifying residential real property, the participating municipality in which the qualifying residential real property is located shall, upon notice from the bank, place a benefit assessment against the qualifying residential real property benefited by such qualifying improvements and levy each year according to the terms of the benefit assessment contract. Notwithstanding any other provision at law, no participating municipality shall be liable to or be recourse to any bondholder of the bank or the terms of any agreement between the bank and a property owner.

(3) Any such qualifying improvements shall be permanently fixed to such property but may include (A) the property's share of ancillary construction costs to extend the energy infrastructure as necessary to enable the qualifying improvement, and (B) a third-party ownership arrangement including, but not limited to, a power purchase agreement and a lease agreement, provided the duration of any such third-party ownership agreement is not less than the lesser of the average weighted estimated useful life of the principal components or ten years.

(4) The bank shall develop program guidelines governing the terms and conditions under which funding may be made available to the residential sustainable energy program and may serve as an aggregating entity for the purpose of securing state and private third-party funding for qualifying residential real property.

(5) The bank shall adopt standards establishing eligible qualifying improvements, products and measures that satisfy energy savings, water conservation or other clean energy, sustainability or resiliency goals consistent with the purpose of the residential sustainable energy program. The standards shall establish eligibility specifications based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations including, but not limited to, the United States Department of Energy, the United States Environmental Protection Agency, national research laboratories, state energy offices, state or local building code divisions, the International Code Council and the Building Performance Institute.

[(c) Notwithstanding the provisions of section 7-374 or any other public or special act that limits or imposes conditions on municipal bond issues, any municipality that establishes a sustainable energy program under this section may issue bonds, as necessary, for the purpose of financing (1) energy improvements; (2) related energy audits; and (3) renewable energy system feasibility studies and the verification of the installation of such improvements. Such financing shall be secured by special contractual assessments on the qualifying real property.

(d) (1) Any municipality that establishes a sustainable energy program pursuant to this section may partner with another municipality or a state agency to (A) maximize the opportunities for accessing public funds and private capital markets for long-term sustainable financing, and (B) secure state or federal funds available for this purpose.

(2) Any municipality that establishes a sustainable energy program and issues bonds pursuant to this section may supplement the security of such bonds with any other legally available funds solely at the municipality's discretion.

(3) Any municipality that establishes a sustainable energy program pursuant to this section may use the services of one or more private, public or quasi-public third-party administrators to provide support for the program.]

[(e)] (c) Before establishing a program under this section, the [municipality] bank shall provide notice to the electric distribution company, as defined in section 16-1, that services the municipality.

[(f)] (d) [If the owner of record of qualifying real property requests financing for energy] Prior to approving any request for funding of qualifying improvements under this section, the [municipality implementing the sustainable energy program] bank shall:

[(1) Require performance of an energy audit or renewable energy system feasibility analysis on the qualifying real property before approving such financing;

(2) Enter into a contractual assessment on the qualifying real property with the property owner in a principal amount sufficient to pay the costs of energy improvements and any associated costs the municipality determines will benefit the qualifying real property and may cover any associated costs;]

[(3) Impose] (1) Establish requirements and criteria to ensure that the proposed [energy] qualifying improvements are consistent with the purpose of the residential sustainable energy program; [and]

(2) Develop eligibility criteria that include evaluation of property owner income and debt obligations to determine that the property owner can meet their annual tax obligations. In addition, the following conditions shall be met:

(A) The property owner is current on all property taxes for the assessed property;

(B) The property is not in foreclosure and there are no existing or pending notices of default on the property or property owner;

(C) The property and property owner are not in bankruptcy;

(D) The property owner is current on all mortgage debt;

(E) The property that will be subject to the benefit assessment is within the geographical boundaries of the applicable residential sustainable energy program;

(F) The total amount of the benefit assessment does not exceed twenty per cent of the fair market value of the property;

(G) The total of the benefit assessment and mortgage-related debt on the property subject to the benefit assessment will not exceed the fair market value of the property;

(H) The maximum term of the benefit assessment does not exceed the average weighted life of the products installed;

(I) Notwithstanding the forgoing, any benefit assessment levied pursuant to this section has a term not to exceed twenty-five years; and

(J) The assessment contract does not waive or defer the first payment on the benefit assessment; and

[(4)] (3) Impose requirements and conditions on the [financing] funding to ensure timely repayment, including, but not limited to, procedures for placing a lien on [a] the qualifying residential real property as security for [which an owner defaults on] repayment of the governmental benefit assessment.

(e) (1) The bank may enter into an assessment contract with the property owner of qualifying residential real property. After such contract is entered into, and upon notice from the bank, the participating municipality shall, at the direction of the bank, levy the benefit assessment and file a lien on the land records based on the estimated cost of the qualifying improvements prior to the completion or upon the completion of such improvements.

(2) The bank shall be required to develop a financing estimate disclosure form for presentation to a property owner prior to the execution of an assessment contract. The form shall disclose all key financing terms of the assessment contract including, but not limited to, (A) the total amount funded including the cost of the installed improvements together with program fees and capitalized interest, if any, (B) the repayment process and schedule, (C) the payment amounts, (D) the term of benefit assessment, which shall not exceed the useful life of the improvements, (E) the fixed rate of interest charged, (F) a payment schedule that fully amortizes the amount funded, (G) the nature of the lien or obligation created upon recordation, (H) the improvements to be installed, (I) the right to withhold approval of payment until the project is complete, (J) the possibility that the benefit assessment may (i) remain on the property, or (ii) be required to be paid off if the property owner sells or refinances the property, (K) any other relevant state specific rights or notices, and (L) set forth in at least twelve-point bold type: The benefit assessment described below will result in an assessment against your property which will be collected along with your property taxes and will result in a lien on your property. You should read and review the terms carefully and, if necessary, consult with a tax professional or an attorney.

(3) The bank shall develop a procedure to orally confirm the key terms of the assessment contract with the property owner prior to the execution of the contract, and to record the conversation in accordance with Connecticut law.

(4) The bank shall notify the property owner in writing that such owner may rescind any assessment contract entered into pursuant to this section not later than three business days after entering into such contract.

(f) In addition to any requirements stated above, the bank shall adopt consumer protection standards with which it or any private, public or quasi-public third-party administrator shall demonstrate compliance before participating in the residential sustainable energy program. The standards shall be informed by the consumer protection policies established in the Best Practice Guidelines for Residential PACE Financing Programs published by the United States Department of Energy and include, but not be limited to, property owner disclosures, contractor conduct, acceptable products and projects with pricing guidelines, marketing practices, prefunding and postfunding support, treatment of protected classes, grievance procedures, data security and privacy matters. The bank and any private, public or quasi-public, third-party program administrator shall be required to abide by the rules, conduct, standards and procedures as a condition of offering benefit assessments pursuant to the residential sustainable energy program.

(g) [Prior to entering a contractual assessment, the municipality shall provide each property owner the following notice, which shall be set forth in at least fourteen-point bold type: SEEK LEGAL ADVICE BEFORE PARTICIPATING IN THIS LOAN PROGRAM TO ENSURE UNDERSTANDING OF POTENTIAL CONSEQUENCES, INCLUDING A POSSIBLE DEFAULT UNDER YOUR MORTGAGE.] Notwithstanding any other provision of this section: (1) The bank shall require that any contractor installing qualified improvements hold a valid license from the Connecticut Department of Consumer Protection or be certified under the bank's residential solar installation programs; (2) the bank shall prohibit any private, public or quasi-public, third-party program administrator from providing any direct or indirect cash payment or other thing of material value to a contractor, its business or its employees in excess of the actual price charged by such contractor to homeowners for the sale and installation of qualifying improvements funded by a residential sustainable energy program; (3) no third-party program administrator shall provide a direct cash payment or other thing of material value to a contractor in exchange for, or related to, the contractor's participation in the residential sustainable energy program except for reimbursement for documented expenses to contractors for approved cobranded advertising and marketing campaigns and collateral, third-party administrator-sourced leads, training, training events and other approved costs; and (4) no third-party administrator shall provide a direct cash payment or other thing of value to a property owner explicitly conditioned upon such property owner's selection of the administrator's program.

(h) [Any assessment levied pursuant to this section shall have a term not to exceed the calculated payback period for the installed energy improvements, as determined by the municipality, and shall have no prepayment penalty. The municipality] The bank shall set a fixed rate of interest, if applicable, for the terms of the benefit assessment or a fixed payment schedule for leases, power purchase agreements or other such approved financing structures for the repayment of the principal assessed amount at the time the benefit assessment is made. Such interest rate, as may be supplemented with state or federal funding as may become available, shall be sufficient to pay the [financing] costs of the program, including delinquencies.

(i) [Assessments] Benefit assessments are governmental assessments levied pursuant to this section and the interest, fees and any penalties thereon shall constitute a governmental lien, of the same dignity as, but not senior to, municipal taxes on real property, against the qualifying residential real property on which they are made until they are paid. [Such lien] If the assessment contract for the benefit assessment provides, the benefit assessment shall be [levied and] paid in installments and each installment shall be collected in the same manner as the [general] property taxes of the participating municipality on real property, including, in the event of default or delinquency, [with respect] but not limited to, any penalties, fees, collection costs and remedies. [and lien priorities, provided such lien shall not have priority over any prior mortgages.]

(j) [The area encompassing the sustainable energy program in a municipality may be the entire municipal jurisdiction of the municipality or a subset of such.] Each benefit assessment lien levied through the residential sustainable energy program shall be recorded and released in the manner provided for real property tax liens. The annual benefit assessment shall be treated and collected at the same time and in the same manner and the same priority as annual real property taxes, except a lien for real property taxes shall have priority over the benefit assessment lien. If a property with a benefit assessment lien is foreclosed or enforced by levy and sale in accordance with chapter 204, to the extent the benefit assessment is paid in installments and any such installment is not paid when due, such installments, including any penalties, interest and fees relating thereto that were due and owing on the date of foreclosure or levy and sale may be foreclosed. The balance of the unbilled installments shall not accelerate. The benefit assessment lien shall remain on the property and survive the judgment of the foreclosure to the extent of any remaining installment payments of the benefit assessment secured by such benefit assessment lien that was not the subject of such judgment and shall impose no personal liability on the property owner subject to the judgment of foreclosure.

(k) A participating municipality shall assign to the bank any liens filed by the tax collector pursuant to this section, as provided in the written agreement between the participating municipality and the bank. The bank may sell or assign any and all liens received from the participating municipality at its sole discretion. The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity as the participating municipality and its tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection. The assignee shall have the same rights to enforce such liens as any private party holding a lien on real property including, but not limited to, foreclosure.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2017

7-121n

Statement of Purpose:

To establish a state residential sustainable energy program for the purpose of financing energy improvements.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]

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