CSHB 118(FIN): "An Act adopting the Municipal Property Assessed Clean Energy Act; authorizing municipalities to establish programs to impose assessments for energy improvements in regions designated by municipalities; imposing fees; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 118(FIN) 01 "An Act adopting the Municipal Property Assessed Clean Energy Act; authorizing 02 municipalities to establish programs to impose assessments for energy improvements in 03 regions designated by municipalities; imposing fees; and providing for an effective 04 date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 29.10.200 is amended by adding a new paragraph to read: 07 (65) AS 29.49 (energy improvement assessment programs). 08 * Sec. 2. AS 29.35.200(b) is amended to read: 09 (b) A first class borough may by ordinance exercise the following powers on 10 an areawide basis: 11 (1) provide transportation systems; 12 (2) provide water pollution control; 13 (3) provide air pollution control in accordance with AS 46.14.400; 14 (4) license day care facilities;
01 (5) license, impound, and dispose of animals; 02 (6) establish an energy improvement assessment program under 03 AS 29.49. 04 * Sec. 3. AS 29.35.210(a) is amended to read: 05 (a) A second class borough may by ordinance exercise the following powers 06 on a nonareawide basis: 07 (1) provide transportation systems; 08 (2) regulate the offering for sale, exposure for sale, sale, use, or 09 explosion of fireworks; 10 (3) license, impound, and dispose of animals; 11 (4) subject to AS 29.35.050, provide garbage, solid waste, and septic 12 waste collection and disposal; 13 (5) provide air pollution control under AS 46.14.400; 14 (6) provide water pollution control; 15 (7) participate in federal or state loan programs for housing 16 rehabilitation and improvement for energy conservation; 17 (8) provide for economic development; 18 (9) provide for the acquisition and construction of local service roads 19 and trails under AS 19.30.111 - 19.30.251; 20 (10) establish an emergency services communications center under 21 AS 29.35.130; 22 (11) subject to AS 28.01.010, regulate the licensing and operation of 23 motor vehicles and operators; 24 (12) engage in activities authorized under AS 29.47.460; 25 (13) contain, clean up, or prevent a release or threatened release of oil 26 or a hazardous substance, and exercise a power granted to a municipality under 27 AS 46.04, AS 46.08, or AS 46.09; the borough shall exercise its authority under this 28 paragraph in a manner that is consistent with a regional master plan prepared by the 29 Department of Environmental Conservation under AS 46.04.210; 30 (14) establish an energy improvement assessment program under 31 AS 29.49.
01 * Sec. 4. AS 29.35.210(b) is amended to read: 02 (b) A second class borough may by ordinance exercise the following powers 03 on an areawide basis: 04 (1) provide transportation systems; 05 (2) license, impound, and dispose of animals; 06 (3) provide air pollution control under AS 46.14.400; 07 (4) provide water pollution control; 08 (5) license day care facilities; 09 (6) establish an energy improvement assessment program under 10 AS 29.49. 11 * Sec. 5. AS 29 is amended by adding a new chapter to read: 12 Chapter 49. Municipal Property Assessed Clean Energy Act. 13 Sec. 29.49.010. Exercise of powers. A municipality that establishes a program 14 under AS 29.49.060 may exercise powers granted under this chapter. 15 Sec. 29.49.020. Authorized assessments. (a) A municipality may impose an 16 assessment under this chapter to repay the financing of qualified projects on real 17 property located in a region designated under this chapter. 18 (b) An assessment under this chapter may not be imposed to repay the 19 financing of 20 (1) facilities for undeveloped lots or lots undergoing development at 21 the time of the assessment; or 22 (2) the purchase or installation of products or devices not permanently 23 fixed to real property. 24 Sec. 29.49.030. Written contract for assessment required. A municipality 25 may impose an assessment under this chapter only under a written contract with the 26 record owner of the real property assessed. 27 Sec. 29.49.040. Establishment of program. (a) The governing body of a 28 municipality may establish a program under this chapter. 29 (b) A municipality that establishes a program under this chapter may enter into 30 a written contract with a record owner of real property in a region designated under 31 this chapter to impose an assessment to repay the financing of a qualified project on
01 property of the owner. The financing repaid through assessments may be provided by 02 a third party or, if authorized by municipal ordinance, by the municipality. 03 (c) If a program provides for third-party financing, when a municipality enters 04 into a contract under (b) of this section, the municipality shall enter into a written 05 contract with the third party providing for the municipality to service the debt through 06 assessments. 07 (d) If a program provides for municipal financing, the municipality shall enter 08 into a written contract with the record owner of the real property to finance the 09 qualified project through assessments. 10 (e) The financing for which assessments are imposed may be for costs of the 11 project, including 12 (1) the cost of materials and labor necessary for installation or 13 modification of a qualified improvement; 14 (2) permit fees; 15 (3) inspection fees; 16 (4) lender's fees; 17 (5) program application and administrative fees; 18 (6) project development and engineering fees; 19 (7) third-party review fees, including verification review fees, under 20 AS 29.49.090; and 21 (8) any other fees or costs that may be incurred by the property owner 22 incident to the installation, modification, or improvement on a specific or pro rata 23 basis, as determined by the municipality. 24 Sec. 29.49.050. Designation of region. (a) The governing body of a 25 municipality may designate an area of the municipality as a region where a record 26 owner of real property in the region may enter into a written contract to impose an 27 assessment to repay the financing of a qualified project by the owner on the owner's 28 property and, if authorized by the municipality program, finance the qualified project. 29 (b) An area designated as a region by the governing body of a municipality 30 under this section 31 (1) may include the entire municipality; and
01 (2) must be located wholly within the municipality's jurisdiction. 02 (c) A municipality may designate more than one region. If multiple regions 03 are designated, the regions may be separate, overlapping, or coterminous. 04 Sec. 29.49.060. Procedure for establishment of program. (a) To establish a 05 program under this chapter, the governing body of a municipality shall take the 06 following actions in the following order: 07 (1) adopt a resolution of intent that includes 08 (A) a finding that financing qualified projects through 09 contractual assessments serves a valid public purpose; 10 (B) a statement that the municipality intends to allow property 11 owners to make contractual assessments to repay financing for qualified 12 projects; 13 (C) a description of qualified projects that may be subject to 14 contractual assessments; 15 (D) a description of the boundaries of the region; 16 (E) a description of any proposed arrangements to make third- 17 party financing available or any financing the municipality will provide for 18 qualified projects; 19 (F) a description of municipal debt servicing procedures for 20 any third-party financing and assessments; 21 (G) a notice of the report on the proposed program required 22 under AS 29.49.070 and the location where the report is available for public 23 inspection; 24 (H) the time and place for a public hearing on the proposed 25 program; and 26 (I) the name of the local official who administers the program 27 and the appropriate assessor or person who collects the proposed contractual 28 assessments with property taxes imposed on the assessed property; 29 (2) hold a public hearing at which the public may comment on the 30 proposed program and the report prepared under AS 29.49.070; and 31 (3) adopt an ordinance establishing the program and the terms of the
01 program, including each item included in the report required under AS 29.49.070, 02 which may be incorporated by reference. 03 (b) A municipality may 04 (1) hire and set the compensation of a program administrator and 05 program staff; or 06 (2) contract for professional services necessary to administer a 07 program. 08 (c) A municipality may impose fees to offset the costs of administering a 09 program. The fees authorized under this subsection may be assessed as a 10 (1) program application fee paid by the property owner applying to the 11 program; 12 (2) component of the interest rate on the assessment in the written 13 contract between the municipality and the property owner; or 14 (3) combination of (1) and (2) of this subsection. 15 Sec. 29.49.070. Report regarding assessment program. (a) The report for a 16 proposed program required by AS 29.49.060 must include 17 (1) a map showing the boundaries of the proposed region; 18 (2) a form for a contract between the municipality and the property 19 owner specifying the terms of 20 (A) assessment under the program; and 21 (B) financing provided by a third party or the municipality, as 22 appropriate; 23 (3) if the proposed program provides for third-party financing, a form 24 for a contract between the municipality and the third party regarding the servicing of 25 the debt through assessments; 26 (4) a description of projects that may qualify for contractual 27 assessments; 28 (5) a plan for ensuring sufficient capital for third-party financing and, 29 if appropriate, raising capital for municipal financing for qualified projects; 30 (6) if bonds will be issued to provide capital to finance qualified 31 projects as part of the program as provided by AS 29.49.140,
01 (A) a maximum aggregate annual dollar amount for municipal 02 financing repaid by contractual assessments under the program; 03 (B) if requests appear likely to exceed the authorization 04 amount, a priority order for ranking a property owner's application for 05 financing repaid by contractual assessments; and 06 (C) a formula for calculating 07 (i) the interest rate and period during which contracting 08 owners would pay an assessment; and 09 (ii) the maximum amount of an assessment; 10 (7) a method for ensuring that the period of the contractual assessment 11 does not exceed the useful life of the qualified project that is the basis for the 12 assessment; 13 (8) a description of the application process and eligibility requirements 14 for financing of qualified projects repaid by contractual assessments under the 15 program; 16 (9) a method under (b) of this section for a property owner applying to 17 participate in the program to demonstrate the property owner's ability to fulfill 18 financial obligations repaid by contractual assessments; 19 (10) a statement explaining the manner in which property will be 20 assessed and assessments will be collected; 21 (11) a statement explaining the lender notice requirement under 22 AS 29.49.080; 23 (12) a statement explaining the review requirement under 24 AS 29.49.090; 25 (13) a description of marketing and participant education services to be 26 provided for the program; 27 (14) a description of quality assurance and antifraud measures to be 28 instituted for the program; and 29 (15) the procedures for collecting the proposed contractual 30 assessments. 31 (b) The municipality shall establish a method by which a property owner shall
01 demonstrate financial ability based on appropriate underwriting factors, including 02 (1) verification that the property owner applying to participate in the 03 program is 04 (A) the legal owner of the benefited property; 05 (B) current on mortgage and property tax payments; and 06 (C) not insolvent or in bankruptcy proceedings; and 07 (2) an appropriate ratio between the amount of the assessment and the 08 assessed value of the property. 09 (c) The municipality shall make the report available for public inspection 10 (1) on the Internet website of the municipality; and 11 (2) at the primary governing offices of the municipality. 12 Sec. 29.49.080. Notice to mortgage holder required for participation. 13 Before a municipality may enter into a written contract with a record owner of real 14 property to impose an assessment to repay the financing of a qualified project under 15 this chapter, the property owner shall 16 (1) give the holder of a mortgage lien on the property at least 30 days' 17 written notice of the intention of the property owner to participate in a program under 18 this chapter before the written contract for assessment between the owner and the 19 municipality is executed; and 20 (2) obtain a written consent from the holder of a mortgage lien on the 21 property. 22 Sec. 29.49.090. Review required. (a) A program established under this 23 chapter must require a review of the energy baseline conditions for each proposed 24 qualified project and the projected energy savings to establish the projected energy 25 savings. 26 (b) After a qualified project is completed, the municipality shall obtain 27 verification that the qualified project was properly completed and is operating as 28 intended. 29 (c) An independent third party must conduct both a baseline energy review 30 and a verification review under this section. 31 Sec. 29.49.100. Direct acquisition by owner. The proposed arrangements for
01 financing a qualified project may authorize the property owner to 02 (1) purchase directly the related equipment and materials for the 03 installation or modification of a qualified improvement; and 04 (2) contract directly, including through lease, power purchase 05 agreement, or other service contract, for the installation or modification of a qualified 06 improvement. 07 Sec. 29.49.110. Recording of notice of contractual assessment. (a) A 08 municipality that authorizes financing through contractual assessments under this 09 chapter shall file written notice of each contractual assessment in the real property 10 records of the recording district in which the property is located. 11 (b) The notice under (a) of this section must contain 12 (1) the amount of the assessment; 13 (2) the legal description of the property; 14 (3) the name of each property owner; and 15 (4) a reference to the statutory assessment lien provided under this 16 chapter. 17 Sec. 29.49.120. Lien. (a) Contractual assessments under this chapter and any 18 interest or penalties on the assessments are liens on the property assessed and are prior 19 and paramount to all liens except municipal tax liens and special assessments. 20 Contractual assessment liens may be enforced as provided in AS 29.45.320 - 21 29.45.470 for enforcement of property tax liens. 22 (b) Contractual assessment liens run with the land, and that portion of the 23 assessment under the assessment contract that has not yet become due is not 24 eliminated by foreclosure of a property tax lien. 25 (c) Penalties and interest may be added to delinquent installments of the 26 assessments in the same manner as provided in AS 29.45.250. 27 (d) A municipality may recover costs and expenses, including attorney fees, in 28 a suit to collect a delinquent installment of an assessment in the same manner as in a 29 suit to collect a delinquent property tax. 30 Sec. 29.49.130. Collection of assessments. The governing body of a 31 municipality may contract with the governing body of another taxing unit to perform
01 the duties of the municipality relating to collection of assessments imposed by the 02 municipality under this chapter. 03 Sec. 29.49.140. Bonds or notes. (a) A municipality may issue bonds or notes 04 to finance qualified projects through contractual assessment under this chapter. 05 (b) Bonds or notes issued under this section may not be general obligations of 06 the municipality. The bonds or notes must be secured by one or more of the following, 07 as provided by the governing body of the municipality in the resolution or ordinance 08 approving the bonds or notes: 09 (1) payments of contractual assessments on benefited property in one 10 or more specified regions designated under this chapter; 11 (2) reserves established by the municipality from grants, bonds, or net 12 proceeds or other lawfully available funds; 13 (3) municipal bond insurance, lines of credit, public or private 14 guaranties, standby bond purchase agreements, collateral assignments, mortgages, or 15 any other available means of providing credit support or liquidity; and 16 (4) any other funds lawfully available for purposes consistent with this 17 chapter. 18 (c) A municipal pledge of assessments, funds, or contractual rights in 19 connection with the issuance of bonds or notes by the municipality under this chapter 20 is a first lien on the assessments, funds, or contractual rights pledged in favor of the 21 person to whom the pledge is given, without further action by the municipality. The 22 lien is valid and binding against any other person, with or without notice. 23 (d) Bonds or notes issued under this chapter further an essential public and 24 governmental purpose, including 25 (1) improvement of the reliability of local electrical systems; 26 (2) reduction of energy costs; 27 (3) reduction of energy demand on local utilities; 28 (4) economic stimulation and development; 29 (5) enhancement of property values; and 30 (6) enhancement of employment opportunities. 31 Sec. 29.49.150. Joint implementation. (a) Any combination of municipalities
01 may agree to jointly implement or administer a program under this chapter. 02 (b) If two or more municipalities jointly implement a program, a single public 03 hearing held jointly by the cooperating municipalities is sufficient to satisfy the 04 requirement of AS 29.49.060(a)(2). 05 (c) One or more municipalities may contract with a third party, including 06 another municipality, to administer a program. 07 Sec. 29.49.160. Prohibited acts. A municipality that establishes a region under 08 this chapter may not 09 (1) make the issuance of a permit, license, or other authorization from 10 the municipality to a person who owns property in the region contingent on the person 11 entering into a written contract to repay the financing of a qualified project through 12 contractual assessments under this chapter; or 13 (2) otherwise compel a person who owns property in the region to 14 enter into a written contract to repay the financing of a qualified project through 15 contractual assessments under this chapter. 16 Sec. 29.49.890. Application of chapter. This chapter applies to home rule and 17 general law municipalities. 18 Sec. 29.49.900. Definitions. In this chapter, 19 (1) "program" means a program established under this chapter; 20 (2) "qualified improvement" means a permanent improvement fixed to 21 real property and intended to decrease energy consumption or demand, including a 22 product, device, or interacting group of products or devices that uses energy 23 technology to generate electricity, provide thermal energy, or regulate temperature; 24 (3) "qualified project" means the installation or modification of a 25 qualified improvement; 26 (4) "real property" means privately owned commercial or industrial 27 real property; 28 (5) "region" means a region designated under this chapter. 29 Sec. 29.49.995. Short title. This chapter may be cited as the Municipal 30 Property Assessed Clean Energy Act. 31 * Sec. 6. This Act takes effect immediately under AS 01.10.070(c).