Michigan-2017-SB0375-Engrossed

SB-0375, As Passed House, December 13, 2017

SB-0375, As Passed Senate, October 3, 2017

SUBSTITUTE FOR

SENATE BILL NO. 375

A bill to amend 2010 PA 270, entitled

"Property assessed clean energy act,"

by amending sections 3 and 9 (MCL 460.933 and 460.939).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. As used in this act:

(a) "Anaerobic digester" means a device for optimizing the

anaerobic digestion of biomass for the purpose of recovering

biofuel for energy production.

(b) "Anaerobic digester energy system" means an anaerobic

digester and the devices used to generate electricity or heat from

biogas produced by the anaerobic digester or to store the biogas

for the future generation of electricity or heat.

assessed clean energy program by a local unit of government that

lies within the local unit of government's jurisdictional

boundaries. A local unit of government may create more than 1

district under the program, and districts may be separate,

overlapping, or coterminous.

(d) ~~(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) Replacement or modification of lighting fixtures to

reduce the energy use of the lighting system.

(vii) Energy recovery systems.

(viii) Day lighting systems.

(ix) Installation or upgrade of 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 ~~increases~~

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.

(e) ~~(c)~~ "Energy project" means the installation or

modification of an energy efficiency improvement or the

acquisition, installation, or improvement of a renewable energy

system or anaerobic digester energy system.

(f) ~~(d)~~ "Governing body" means the county board of

commissioners of a county, the township board of a township, or the

council or other similar elected legislative body of a city or

village.

(g) ~~(e)~~ "Local unit of government" means a county, township,

city, or village.

(h) ~~(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.

(i) ~~(g)~~ "Property" means privately owned commercial or

industrial real property located within the local unit of

government.

(j) ~~(h)~~ "Property assessed clean energy program" or "program"

means a program as described in section 5(2).

(k) ~~(i)~~ "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.

(l) ~~(j)~~ "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.

(m) ~~(k)~~ "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.

Sec. 9. (1) The report on the proposed program required under

section 7 shall include all of the following:

(a) A form of contract between the local unit of government

and record owner governing the terms and conditions of financing

and assessment under the program.

(b) Identification of an official authorized to enter into a

program contract on behalf of the local unit of government.

to be provided by the local unit of government under the program.

(d) An application process and eligibility requirements for

financing energy projects under the program.

(e) A method for determining interest rates on assessment

installments, repayment periods, and the maximum amount of an

assessment.

(f) Explanation of how assessments will be made and collected

consistent with section 13(2).

(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 local unit of government

through funds available to it from any other source.

(iii) Owner-arranged financing from a commercial lender. Under

owner-arranged financing, the local unit of government may impose

an assessment pursuant to section 11 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 record owners participating in the program that will

be used to finance costs incurred by the local unit of government

as a result of the program.

(i) A requirement that the term of an assessment not exceed

the useful life of the energy project paid for by the assessment.

(j) A requirement for an appropriate ratio of the amount of

the assessment to the assessed value of the property.

(k) A requirement that the record owner of property subject to

a mortgage obtain written consent from the mortgage holder before

participating in the program.

(l) Provisions for marketing and participant education.

(m) Provisions for adequate debt service reserve fund.

(n) Quality assurance and antifraud measures.

(o) 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 local unit of

government shall obtain verification that the renewable energy

system, anaerobic digester energy system, or energy efficiency

improvement was properly installed and is operating as intended.

(p) For an energy project financed with more than $250,000.00

in assessments, both of the following:

(i) A requirement for ongoing measurements that establish the

savings realized by the record owner from the energy project.

(ii) A requirement that, in the contract for installation of

the energy project, the contractor guarantee to the record owner

that the energy project will achieve a savings-to-investment ratio

greater than 1 and agree to pay the record owner, on an annual

basis, any shortfall in savings below this level.

(2) The local unit of government shall make the report

available for review on the local unit of government's website or