Revision: Dec. 10, 2009, midnight
HB 1554 – AS INTRODUCED
2010 SESSION
09/10
HOUSE BILL 1554
AN ACT allowing municipalities to establish energy efficiency and clean energy districts.
SPONSORS: Rep. Pastor, Graf 9; Rep. Borden, Rock 18; Rep. F. Holden, Hills 4; Rep. R. Read, Rock 16; Rep. Rappaport, Coos 1; Sen. Fuller Clark, Dist 24; Sen. Merrill, Dist 21; Sen. Houde, Dist 5; Sen. Reynolds, Dist 2
COMMITTEE: Municipal and County Government
This bill allows municipalities to establish energy efficiency and clean energy districts.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10-2202
09/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT allowing municipalities to establish energy efficiency and clean energy districts.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Findings and Purpose. The general court finds that:
I. Energy conservation and efficiency and clean energy improvements to residential, commercial, industrial, and other buildings and facilities are necessary to:
(a) Protect the economic and social well-being of New Hampshire residents by reducing the cost of fuel oil, electricity, natural gas, propane, and other forms of energy, and the risks associated with future escalation in energy costs; and
(b) Address the threat of global climate change.
II. The upfront cost of energy conservation and efficiency and clean energy improvements prevents many property owners from making such improvements.
III. To make energy conservation and efficiency and clean energy improvements more affordable and assist property owners who wish to undertake them, it is necessary to authorize a procedure for enabling property owners, on a voluntary basis, to finance such improvements and make repayments in the form of special assessments on their property tax bills or municipal service bills.
IV. The purposes of this chapter is to authorize municipalities to establish such a procedure and to set forth requirements to ensure that its use will achieve the intended purposes of improving the economic security of property owners and reducing greenhouse gas emissions.
2 New Chapter; Energy Efficiency and Clean Energy Districts. Amend RSA by inserting after chapter 53-E the following new chapter:
CHAPTER 53-F
ENERGY EFFICIENCY AND CLEAN ENERGY DISTRICTS
53-F:1 Definitions. In this chapter:
I. “Clean energy improvement” means the installation of any system on the property for producing electricity for, or meeting heating, cooling, or water heating needs of the property, using either renewable energy sources, combined heat and power systems, or district energy systems using wood biomass (but not construction and demolition waste) or natural gas. Such improvements include but are not limited to solar photovoltaic, solar thermal, wood biomass, wind, and geothermal systems, provided that, to be covered by an agreement with a property owner and financed under this chapter, such improvements shall be qualifying improvements under RSA 53-F:5.
II. “District” means an energy efficiency and clean energy district established under this chapter.
III. “Energy conservation and efficiency improvements” means measures to reduce consumption, through conservation or more efficient use, of electricity, fuel oil, natural gas, propane, or other forms of energy on the property, including but not limited to air sealing, installation of insulation, installation of heating, cooling, or ventilation systems meeting or exceeding ENERGY STAR standards, building modifications to increase the use of daylighting, replacement of windows with units meeting or exceeding ENERGY STAR standards, installation of energy controls or energy recovery systems, and installation of efficient lighting equipment, provided that, to be covered by an agreement with a property owner and financed under this chapter, all such improvements must be permanently affixed to a building or facility that is part of the property and shall be qualifying improvements under RSA 53-F:5.
IV. “Municipality” means any city, town, or village district.
V. “Property owner” means the owner of record of real property within the boundaries of the municipality, whether zoned or used for residential, commercial, industrial, or other uses.
53-F:2 Authority.
I. A municipality may designate an energy efficiency and clean energy district, which may cover all or a portion of the area within the municipality, or may designate all or a portion of the area within the municipality as part of an energy efficiency and clean energy district that encompasses all or portions of multiple municipalities, by an act of its legislative body.
II. A municipality may:
(a) Incur debt for the purpose of providing financing to property owners within the district, including through issuance of municipal bonds, Qualified Energy Conservation Bonds or Clean Renewable Energy Bonds, or by borrowing from the New Hampshire municipal bond bank or other banks or financial institutions.
(b) Establish a revolving fund using general municipal revenues, federal Energy Efficiency and Conservation Block Grant funds, or grant funds from any federal, state, private, or other source.
(c) Finance qualifying improvements by eligible property owners through any other means authorized by state law.
(d) Collect from property owners and remit to third-party lenders payments on assessments used to finance qualifying improvements.
(e) Establish reserve accounts.
(f) Participate in state or federal programs providing support for municipal energy efficiency and clean energy finance programs such as those authorized by this chapter, including guarantee, loss reserve, revolving fund, or other state or federal support programs.
III. A municipality may enter into agreements with property owners in which the property owners consent to make energy conservation and efficiency improvements or clean energy improvements to their property and to have the municipality add a special assessment to their property tax bills, or add a surcharge to their bills for water or sewer service or another municipal service, provided that such agreements shall not affect the tax liability or municipal services charges of other participating or nonparticipating property owners in the district.
IV. A municipality may collect charges from participating property owners, third-party lenders, or both, to cover the cost of administration for the district.
V. A municipality may otherwise administer a program for promoting and financing energy efficiency and clean energy improvements within a district in accordance with this chapter, may enter into an agreement with a public or private entity to administer such a program on its behalf in accordance with this chapter, and may enter into an agreement with one or more other municipalities to share services and otherwise cooperate in the administration of a district or districts in accordance with this chapter.
53-F:3 Agreements with Property Owners.
I.(a) A municipality may make an assessment under this chapter only pursuant to an agreement entered into with the free and willing consent of the owner of the property to which the assessment applies. In the case of any property with multiple owners, an agreement under this chapter shall be signed by all owners.
(b) An agreement with a property owner shall provide that the owner shall contract for qualifying improvements with one or more qualified contractors, purchase materials to be used in making qualified improvements, or both, and that, upon submission of documentation required by the municipality, the municipality shall disburse funds to those contractors and vendors in payment for the qualifying improvements or materials used in making qualified improvements.
II. The municipality shall disclose to participating property owners the risks associated with participating in the program, including risks related to their failure to make payments and the risk of enforcement of the liens imposed under the agreements.
III. At least 30 days prior to entering into an agreement with a municipality under this chapter, the property owner shall provide to the holders of any existing mortgages on the property notice of his or her intent to enter into the agreement.
IV. An agreement with a participating property owner under this chapter shall be filed by the municipality for recording in the county registry of deeds and shall be disclosed to potential buyers prior to transfer of property ownership.
V. Any personal financial information provided to a municipality by a participating property owner or potential participating property owner shall not be subject to disclosure by the municipality under any otherwise applicable law.
53-F:4 Eligibility of Property Owners.
I. A municipality may enter into an agreement under this chapter only with the legal owner of real property.
II. Prior to entering into an agreement with a property owner, the municipality shall determine that all property taxes and any other assessments levied with property taxes are current and have been current for 3 years or the property owner’s period of ownership, whichever is less; that there are no involuntary liens such as mechanic’s liens on the property; and that no notices of default or other evidence of property-based debt delinquency have been recorded during the past 3 years or the property owner’s period of ownership, whichever is less; and that the property owner is current on all mortgage debt on the property.
53-F:5 Qualifying Improvements.
I. Improvements financed pursuant to an agreement under this chapter shall be based upon an audit performed by a person who has been certified as a building analyst by the Building Performance Institute or who has obtained other appropriate certification as determined by the public utilities commission or another appropriate New Hampshire-based entity. The audit shall identify recommended energy conservation and efficiency and clean energy improvements; provide the estimated energy cost savings, useful life, benefit-cost ratio, and simple payback or return on investment for each improvement; and provide the estimated overall difference in annual energy costs with and without recommended improvements. Financed improvements shall be consistent with the audit recommendations. The cost of the audit may be included in the total amount financed under this chapter.
II. Improvements shall be permanently affixed to an existing building or facility that is part of the property. An agreement between a municipality and a qualifying property owner may not cover projects in buildings or facilities under new construction.
III. Improvements shall be made by a contractor or contractors, which may include a cooperative or not-for-profit organization, determined by the municipality to be qualified to make the energy efficiency or clean energy improvements in the agreement. A municipality may accept a designation of contractors as qualified made by an electric or gas utility program or another appropriate New Hampshire-based entity. Any work requiring a license under any applicable law shall be performed by an individual holding such license.
IV. A municipality shall require, prior to disbursement of final payments to any contractor or vendor pursuant to an agreement with a property owner, submission by the property owner in a form acceptable to the municipality of:
(a) A post-installation report, based on an inspection, certifying that improvements have been installed properly and verifying that they are performing satisfactorily; and
(b) Documentation of all costs to be financed and copies of any required permits.
53-F:6 Financing Terms.
I. Improvements financed pursuant to an agreement under this chapter shall be financed so that the property owner experiences a positive cash flow impact during the first year and so that the total energy cost savings realized by the property owner and the property owner’s successors during the useful lives of the improvements will exceed the total cost to the property owner and the property owner’s successors of the improvements.
II. Financing for improvements in a district may be provided either by a municipality or by a third-party lender and shall in either case meet the requirements of this chapter.
III. The total amount of assessments for a property under this chapter shall not be less than $5,000 and shall not exceed $50,000 or 20 percent of the assessed value of the property, whichever is less. The combined amount of assessments under this chapter, any outstanding mortgage obligations for the property, and any other outstanding debt attached to the property shall not exceed 90 percent of the assessed value of the property.
IV. The maximum term of finance provided pursuant to an agreement under this chapter shall be 20 years. The term shall in no case exceed the average expected useful life of all improvements, weighted by cost. Expected useful lives used for all calculations under this chapter shall be consistent with the expected useful lives of energy conservation and efficiency and clean energy measures approved by the public utilities commission for utility or other programs.
53-F:7 Liens.
I. An assessment levied pursuant to this chapter, and the interest and any charges or penalties thereon, shall constitute a lien against the property on which it is made until it is paid.
II. A municipality shall release a participating property of the lien on the property against which the assessment under this chapter is made upon full payment of the value of the assessment. Notice of the release of the lien shall be filed by the municipality for recording in the county registry of deeds.
III. In the event of a delinquency in payments due pursuant to an agreement under this chapter, the municipality may enforce the lien as otherwise provided by law for collection of overdue property taxes or the municipality may defer the collection of past due balances until the time of a transfer of property ownership. In either case, at the time of collection, only the past due balances of the special assessment under this chapter, together with any interest, charges, or penalties, shall be due for payment and future payments shall continue as a lien on the property. In the event of a transfer of property ownership through foreclosure, notwithstanding any other provision of law, collection by the municipality shall be limited to any past due balances and future payments shall continue as a lien and shall neither be accelerated or extinguished by foreclosure.
53-F:8 New Hampshire Municipal Bond Bank. The New Hampshire municipal bond bank is authorized under RSA 35-A:43 to issue bonds and other debt instruments to finance energy efficiency and clean energy district improvements authorized under this chapter.
3 New Section; New Hampshire Municipal Bond Bank Authorized to Finance Energy Efficiency and Clean Energy District Improvements. Amend RSA 35-A by inserting after section 42 the following new section:
35-A:43 Energy Efficiency and Clean Energy District Improvement Financing. The bank shall have the authority to issue bonds and other debt instruments to finance energy efficiency and clean energy district improvements authorized and subject to the terms pursuant to RSA 53-F. The bank’s authority created under this chapter shall extend, wherever applicable, to the effective implementation of RSA 53-F.
4 Effective Date. This act shall take effect 60 days after its passage.