Bill Text: MI HB5397 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Energy; alternative sources; residential renewable energy and energy efficiency improvements; provide for local financing of in communities with municipal electric utilities. Creates new act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-12-31 - Assigned Pa 408'14 With Immediate Effect 2014 Addenda [HB5397 Detail]
Download: Michigan-2013-HB5397-Introduced.html
HOUSE BILL No. 5397
March 6, 2014, Introduced by Rep. Haveman and referred to the Committee on Energy and Technology.
A bill to authorize certain local units of government that own
electric utilities to adopt residential clean energy programs to
promote the use of renewable energy systems and energy efficiency
improvements by owners of certain real property in certain
districts; to provide for the financing of such programs through
commercial lending, loans by a nonprofit corporation, utility bill
charges, and other means; to authorize local units of government to
issue bonds, notes, and other evidences of indebtedness and to pay
the cost of renewable energy systems and energy efficiency
improvements; to provide for the repayment of bonds, notes, and
other evidences of indebtedness; to authorize certain fees; to
prescribe the powers and duties of certain governmental officers
and entities; and to provide for remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"municipal utility residential clean energy program act".
Sec. 3. As used in this act:
(a) "District" means a district created under a clean energy
program by a municipality.
(b) "Energy efficiency improvement" means equipment, devices,
or materials intended to decrease energy consumption, including,
but not limited to, all of the following:
(i) Insulation in walls, roofs, floors, foundations, or heating
and cooling distribution systems.
(ii) Storm windows and doors; multi-glazed windows and doors;
heat-absorbing or heat-reflective glazed and coated window and door
systems; and additional glazing, reductions in glass area, and
other window and door system modifications that reduce energy
consumption.
(iii) Automated energy control systems.
(iv) Heating, ventilating, or air-conditioning and distribution
system modifications or replacements.
(v) Caulking, weather-stripping, and air sealing.
(vi) Lighting fixtures that reduce the energy use of the
lighting system.
(vii) Energy recovery systems.
(viii) Day lighting systems.
(ix) Electrical wiring or outlets to charge a motor vehicle
that is fully or partially powered by electricity.
(x) Measures to reduce the usage of water or increase the
efficiency of water usage.
(xi) Any other installation or modification of equipment,
devices, or materials approved as a utility cost-savings measure by
the governing body.
(c) "Energy project" means the installation or modification of
an energy efficiency improvement or the acquisition, installation,
or improvement of a renewable energy system.
(d) "Governing body" means the township board of a township or
the council or other similar elected legislative body of a city or
village.
(e) "Municipality" means a city or village that owns an
electric utility.
(f) "Person" means an individual, firm, partnership,
association, corporation, unincorporated joint venture, or trust,
organized, permitted, or existing under the laws of this state or
any other state, including a federal corporation, or a combination
thereof. However, person does not include a local unit of
government.
(g) "Property" means privately owned residential real property
located within the municipality.
(h) "Record owner" means the person or persons possessed of
the most recent fee title or land contract vendee's interest in
property as shown by the records of the county register of deeds.
(i) "Renewable energy resource" means a resource that
naturally replenishes over a human, not a geological, time frame
and that is ultimately derived from solar power, water power, or
wind power. Renewable energy resource does not include petroleum,
nuclear, natural gas, or coal. A renewable energy resource comes
from the sun or from thermal inertia of the earth and minimizes the
output of toxic material in the conversion of the energy and
includes, but is not limited to, all of the following:
(i) Biomass.
(ii) Solar and solar thermal energy.
(iii) Wind energy.
(iv) Geothermal energy.
(v) Methane gas captured from a landfill.
(j) "Renewable energy system" means a fixture, product,
device, or interacting group of fixtures, products, or devices on
the customer's side of the meter that use 1 or more renewable
energy resources to generate electricity. Renewable energy system
includes a biomass stove but does not include an incinerator or
digester.
(k) "Residential clean energy program" or "program" means a
program as described in section 5(2).
Sec. 5. (1) Pursuant to section 7, a municipality may do all
of the following:
(a) Establish a residential clean energy program.
(b) From time to time, designate a district or districts
within its territorial jurisdiction under the program. Districts
may be separate, overlapping, or coterminous.
(2) Under a program, the municipality may enter into a
contract with the record owner of property within a district to
finance or refinance 1 or more energy projects on the property. The
financing or refinancing may include the cost of materials and
labor necessary for installation, energy audit costs, permit fees,
inspection fees, application and administrative fees, bank fees,
and all other fees that may be incurred by the record owner for the
installation on a specific or pro rata basis, as determined by the
municipality.
Sec. 7. (1) To establish a residential clean energy program,
the governing body of a municipality shall take the following
actions in the following order:
(a) Adopt a resolution of intent that includes all of the
following:
(i) A finding that the financing of energy projects is a valid
public purpose.
(ii) A statement of intent to provide funds for energy
projects, which may be repaid by charges on the electric utility
bills for the properties benefited, with the agreement of the
record owners.
(iii) A description of the proposed arrangements for financing
the program.
(iv) The types of energy projects that may be financed.
(v) Reference to a report on the proposed program as described
in section 11(1) and the internet address and office location where
the report is available pursuant to section 11(2).
(vi) The time and place for a public hearing on the proposed
program.
(b) Hold a public hearing on the proposed program, including
the report described under section 11.
(c) Adopt a resolution or ordinance establishing the program
and setting forth its terms and conditions, including all of the
following:
(i) Matters required by section 11 to be included in the
report. For this purpose, the resolution may incorporate the report
or an amended version thereof by reference.
(ii) If the program is established by a resolution, a
description of which aspects of the program may be amended without
a new public hearing and which aspects may be amended only after a
new public hearing is held.
(2) A residential clean energy program established by
resolution or ordinance may be amended by resolution of the
governing body or ordinance, respectively. Before the governing
body adopts an amendment by resolution, the governing body shall
conduct a public hearing if required pursuant to subsection (1)(c).
Sec. 9. (1) A residential clean energy program established by
a city may be administered by a nonprofit corporation formed under
section 4o of the home rule city act, 1909 PA 279, MCL 117.4o. The
nonprofit corporation may be funded by money appropriated by the
city, transferred from the city's municipally owned electric
utility, if any, or provided by private sources.
(2) A residential clean energy program may provide for
financing energy efficiency improvements through loans made to
property owners by a nonprofit corporation described in subsection
(1) or by private lenders facilitated by the nonprofit corporation.
(3) If a nonprofit corporation makes loans to owners of
property under subsection (2), all of the following apply:
(a) Interest shall be charged on the unpaid balance at a rate
of not more than 7% per year.
(b) A loan shall be repaid in monthly installments, subject to
section 11(1)(i).
(c) The lender shall comply with all state and federal laws
applicable to the extension of credit for home improvements.
(4) The program may provide for billing any fees under section
11(1)(h)(ii) and the monthly installment payments as a per-meter
charge on the bill for electric services. The payment shall be
considered part of the charges for electric services to the
property for purposes of enforcement as provided under section 21
of the revenue bond act, 1933 PA 94, MCL 141.121.
(5) Electric service may be shut off for nonpayment of the
per-meter charge under subsection (4) in the same manner and
pursuant to the same procedures as used to enforce nonpayment of
other charges for electric service. If notice of a loan under the
program is recorded with the register of deeds for the county in
which the property is located, the obligation to pay the per-meter
charge shall run with the land and be binding on future customers
contracting for electric service to the property.
Sec. 11. (1) The report on the proposed residential clean
energy program required under section 7 shall include all of the
following:
(a) A form of contract between the municipality and record
owner governing the terms and conditions of financing under the
program.
(b) Identification of an official authorized to enter into a
program contract on behalf of the municipality.
(c) A maximum aggregate annual dollar amount for all financing
to be provided by the municipality under the program.
(d) An application process and eligibility requirements for
financing energy projects under the program, including the classes
of property eligible.
(e) Subject to section 9(3), a method for determining interest
rates on loan installments, repayment periods, and the maximum
amount of a loan.
(f) An explanation of how monthly installment payments on
loans will be billed and collected under section 9(4) or otherwise.
(g) A plan for raising capital to finance improvements under
the program. The plan may include any of the following:
(i) The sale of bonds or notes, subject to the revised
municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.
(ii) Amounts to be advanced by the municipality through funds
available to it from any other source.
(iii) Owner-arranged financing from a commercial lender. Under
owner-arranged financing, a municipal electric utility may collect
monthly installment payments on the electric utility bills pursuant
to section 9(4) and forward payments to the commercial lender or
the record owner may pay the commercial lender directly.
(h) Information regarding all of the following, to the extent
known, or procedures to determine the following in the future:
(i) Any reserve fund or funds to be used as security for bonds
or notes described in subdivision (g).
(ii) Any application, administration, or other program fees to
be charged to a record owner participating in the program. The fees
shall be used to finance costs incurred by the municipality as a
result of the record owner's participation.
(i) A requirement that the term for repayment of a loan to a
property owner as described in section 9(2) not exceed the
anticipated useful life of the energy project paid for by the loan
or 120 months, whichever is less.
(j) Provisions for marketing and participant education.
(k) Provisions for adequate debt service reserve fund.
(l) Quality assurance and antifraud measures.
(m) A requirement that a baseline energy audit be conducted
before an energy project is undertaken, to establish future energy
savings. After the energy project is completed, the municipality
shall obtain verification that the renewable energy system or
energy efficiency improvement was properly installed
and is operating as intended.
(2) The municipality shall post the report under subsection
(1) on the municipality's website, if any, and make the report
available for review at the office of the clerk or the official
authorized to enter contracts on behalf of the municipality under
the residential clean energy program.
