HB 227: "An Act relating to municipal energy and resilience improvement assessment programs; and providing for an effective date."
00 HOUSE BILL NO. 227 01 "An Act relating to municipal energy and resilience improvement assessment programs; 02 and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 29.10.200(64) is amended to read: 05 (64) AS 29.55.100 - 29.55.165 (energy and resilience improvement 06 assessment programs); 07 * Sec. 2. AS 29.35.200(b) is amended to read: 08 (b) A first class borough may by ordinance exercise the following powers on 09 an areawide basis: 10 (1) provide transportation systems; 11 (2) provide water pollution control; 12 (3) provide air pollution control in accordance with AS 46.14.400; 13 (4) license day care facilities; 14 (5) license, impound, and dispose of animals;
01 (6) establish an energy and resilience improvement assessment 02 program under AS 29.55.100 - 29.55.165. 03 * Sec. 3. AS 29.35.210(a) is amended to read: 04 (a) A second class borough may by ordinance exercise the following powers 05 on a nonareawide basis: 06 (1) provide transportation systems; 07 (2) regulate the offering for sale, exposure for sale, sale, use, or 08 explosion of fireworks; 09 (3) license, impound, and dispose of animals; 10 (4) subject to AS 29.35.050, provide garbage, solid waste, and septic 11 waste collection and disposal; 12 (5) provide air pollution control under AS 46.14.400; 13 (6) provide water pollution control; 14 (7) participate in federal or state loan programs for housing 15 rehabilitation and improvement for energy conservation; 16 (8) provide for economic development; 17 (9) provide for the acquisition and construction of local service roads 18 and trails under AS 19.30.111 - 19.30.251; 19 (10) establish an emergency services communications center under 20 AS 29.35.130; 21 (11) subject to AS 28.01.010, regulate the licensing and operation of 22 motor vehicles and operators; 23 (12) engage in activities authorized under AS 29.47.460; 24 (13) contain, clean up, or prevent a release or threatened release of oil 25 or a hazardous substance, and exercise a power granted to a municipality under 26 AS 46.04, AS 46.08, or AS 46.09; the borough shall exercise its authority under this 27 paragraph in a manner that is consistent with a regional master plan prepared by the 28 Department of Environmental Conservation under AS 46.04.210; 29 (14) establish an energy and resilience improvement assessment 30 program under AS 29.55.100 - 29.55.165. 31 * Sec. 4. AS 29.35.210(b) is amended to read:
01 (b) A second class borough may by ordinance exercise the following powers 02 on an areawide basis: 03 (1) provide transportation systems; 04 (2) license, impound, and dispose of animals; 05 (3) provide air pollution control under AS 46.14.400; 06 (4) provide water pollution control; 07 (5) license day care facilities; 08 (6) establish an energy and resilience improvement assessment 09 program under AS 29.55.100 - 29.55.165. 10 * Sec. 5. AS 29.55.100(a) is amended to read: 11 (a) A municipality may establish an energy and resilience improvement 12 assessment program under AS 29.55.100 - 29.55.165 to finance the construction, 13 installation, or modification of permanent improvements that are [(1)] fixed to new 14 construction or existing privately owned commercial or industrial property [;] and 15 that 16 (1) are energy improvement projects designed [(2) INTENDED] to 17 reduce energy consumption or demand, energy costs, or emissions affecting local air 18 quality, including a product, device, or interacting group of products or devices that 19 use energy technology to generate electricity, provide thermal energy, or regulate 20 temperature; or 21 (2) improve building resilience; resilience improvement projects 22 include projects for seismic improvements, stormwater management, flood 23 mitigation and protection, fire hardening, fire or wind resistance, erosion 24 management, microgrids for energy storage and backup power generation, water 25 or wastewater efficiency including reuse and energy recovery, electric vehicle 26 charging stations, retrofitting that improves the envelope, structure, or systems of 27 the building, and any other improvement project approved by a municipality as a 28 resilience improvement project. 29 * Sec. 6. AS 29.55.100(b) is amended to read: 30 (b) To establish a program under AS 29.55.100 - 29.55.165, the governing 31 body of a municipality shall take the following actions in the following order:
01 (1) adopt a resolution of intent that includes 02 (A) a finding that financing energy and resilience 03 improvement projects through assessments serves a valid public purpose; 04 (B) a statement that the municipality intends to allow privately 05 owned commercial or industrial property owners to make assessments to repay 06 financing for energy and resilience improvement projects; 07 (C) a description of energy and resilience improvement 08 projects that may be subject to assessments; 09 (D) a description of the boundaries of a region within the 10 municipality's boundaries in which the program is available; 11 (E) a description of any proposed arrangements to make third- 12 party financing available or any financing the municipality will provide for 13 energy and resilience improvement projects; and 14 (F) a description of municipal debt servicing procedures for 15 any third-party financing and assessments; 16 (2) prepare the report required under AS 29.55.110 and provide notice 17 of the report with the 18 (A) location where the report is available for public inspection; 19 (B) time and place for a public hearing on the proposed 20 program; and 21 (C) name of the local official who administers the program and 22 the appropriate assessor or person who collects the proposed assessments with 23 property taxes imposed on the assessed property; 24 (3) hold a public hearing at which the public may comment on the 25 proposed program and the report prepared under AS 29.55.110; and 26 (4) adopt an ordinance establishing the program and the terms of the 27 program, including each item included in the report required under AS 29.55.110, 28 which may be incorporated by reference. 29 * Sec. 7. AS 29.55.100(d) is amended to read: 30 (d) A municipality may impose fees to offset the costs of administering a 31 program. The fees authorized under this subsection may be imposed [ASSESSED] as
01 a 02 (1) program application fee paid by the property owner applying to the 03 program; 04 (2) servicing fee included in [COMPONENT OF THE INTEREST 05 RATE ON] the assessment in the written contract between the municipality and the 06 property owner; or 07 (3) combination of (1) and (2) of this subsection. 08 * Sec. 8. AS 29.55.105(a) is amended to read: 09 (a) A municipality that establishes a program under AS 29.55.100 may 10 (1) enter into a written contract with a record owner of privately owned 11 commercial or industrial property in a region designated under AS 29.55.100 to 12 impose an assessment to repay the financing of an energy or resilience improvement 13 project on that property; 14 (2) contract with the governing body of another taxing unit to perform 15 the duties of the municipality relating to collection of assessments imposed by the 16 municipality under this section. 17 * Sec. 9. AS 29.55.105(c) is amended to read: 18 (c) An assessment under this section may repay financing for costs of an 19 energy or resilience improvement project, including 20 (1) the cost of materials and labor necessary for the energy or 21 resilience improvement project; 22 (2) permit fees; 23 (3) inspection fees; 24 (4) lender's fees; 25 (5) program application and administrative fees; 26 (6) energy or resilience improvement project development and 27 engineering fees; 28 (7) third-party review fees, including verification review fees, under 29 AS 29.55.120; [AND] 30 (8) capitalized interest; 31 (9) interest reserves;
01 (10) escrow for prepaid property tax or insurance; 02 (11) capitalized extended manufacturer's warranty or 03 maintenance agreement costs during the period of assessment; and 04 (12) any other fees or costs that may be incurred by the property owner 05 incident to the installation, modification, or improvement on a specific or pro rata 06 basis, as determined by the municipality. 07 * Sec. 10. AS 29.55.105(f) is amended to read: 08 (f) A municipality may not impose a period of assessment under this section 09 on privately owned commercial or industrial property that exceeds 30 [20] years or the 10 useful life of the project that is the basis for the assessment [, WHICHEVER IS 11 SHORTER]. 12 * Sec. 11. AS 29.55.105(g) is amended to read: 13 (g) The [EXCEPT AS OTHERWISE PROVIDED IN (h) OF THIS 14 SECTION, THE] total financing for costs of an energy or resilience improvement 15 project [REPAID BY ASSESSMENTS 16 (1)] may not exceed 25 [20] percent of the market [ASSESSED] value 17 of the property at the time of program application or completion of the proposed 18 energy or resilience improvement project [; 19 (2) MUST BE EXCEEDED BY THE PROJECTED MONETARY 20 SAVINGS TO THE PROPERTY OWNER OVER THE LIFE OF THE 21 ASSESSMENT AS A RESULT OF THE ENERGY IMPROVEMENT PROJECT]. 22 * Sec. 12. AS 29.55.105 is amended by adding a new subsection to read: 23 (i) An assessment under this section may repay financing for costs of a 24 proposed energy or resilience improvement project or an energy or resilience 25 improvement project completed within the past two years. 26 * Sec. 13. AS 29.55.110(a) is amended to read: 27 (a) The municipality shall prepare a report for a proposed program required by 28 AS 29.55.100 that includes 29 (1) a map showing the boundaries of each proposed region within 30 which the program is available; 31 (2) a form for a contract between the municipality and a property
01 owner specifying the terms of 02 (A) assessment under the program; and 03 (B) financing provided by a third party or the municipality, as 04 appropriate; 05 (3) if the proposed program provides for third-party financing, a form 06 for a contract between the municipality and the third party regarding the servicing of 07 the debt through assessments; 08 (4) a description of energy and resilience improvement projects that 09 may qualify for assessments; 10 (5) a plan for ensuring sufficient capital for third-party financing and, 11 if appropriate, raising capital for municipal financing for energy and resilience 12 improvement projects; 13 (6) if bonds will be issued to provide capital to finance energy and 14 resilience improvement projects as part of the program as provided by AS 29.55.140, 15 (A) a maximum aggregate annual dollar amount for municipal 16 financing repaid by assessments under the program; 17 (B) if requests appear likely to exceed the authorization 18 amount, a priority order for ranking a property owner's application for 19 financing repaid by assessments; and 20 (C) a formula for calculating 21 (i) the interest rate and period during which contracting 22 owners would pay an assessment; and 23 (ii) the maximum amount of an assessment; 24 (7) a method to calculate a period of assessment consistent with 25 AS 29.55.105(f); 26 (8) a description of the application process and eligibility requirements 27 for financing repaid by assessments under the program; 28 (9) a method for a property owner applying to participate in the 29 program to demonstrate the property owner's ability to fulfill financial obligations and 30 pay assessments; the method must be based on appropriate underwriting factors, 31 including
01 (A) verification that the property owner 02 (i) is the legal owner of the benefited property; 03 (ii) is current on mortgage and property tax payments; 04 and 05 (iii) is not insolvent or in bankruptcy proceedings; and 06 (B) an appropriate ratio between the amount of the assessment 07 and the market [ASSESSED] value of the property; 08 (10) an explanation of the manner in which the municipality shall 09 assess the property and collect assessments; 10 (11) the lender notice requirement under AS 29.55.115; 11 (12) the review requirement under AS 29.55.120; 12 (13) a description of marketing and participant education services 13 provided by the municipality for the program; 14 (14) a description of quality assurance and antifraud measures 15 instituted by the municipality for the program and the consequence or penalty 16 prescribed by the municipality for a property owner who participates in the program 17 but does not complete an energy or resilience improvement project as proposed; and 18 (15) a description of the insurance requirements, including a 19 requirement that the property owner have insurance against damage to the energy or 20 resilience improvement project for the life of the assessment. 21 * Sec. 14. AS 29.55.115 is amended to read: 22 Sec. 29.55.115. Notice to mortgage holder required for participation. 23 Before a municipality may enter into a written contract with a record owner of 24 property to impose an assessment to repay the financing of an energy or resilience 25 improvement project under AS 29.55.100, the property owner shall 26 (1) give each holder of a mortgage lien on the property at least 30 27 days' [DAYS"] written notice of the intention of the property owner to participate in a 28 program under AS 29.55.100; and 29 (2) obtain [A] written consent from each holder of a mortgage lien on 30 the property. 31 * Sec. 15. AS 29.55.120 is amended to read:
01 Sec. 29.55.120. Review required. The record owner of property on which an 02 assessment is imposed under AS 29.55.105 shall obtain [FROM AN INDEPENDENT, 03 THIRD-PARTY QUALIFIED ENERGY AUDITOR THE FOLLOWING:] 04 (1) for each proposed energy or resilience improvement project, 05 (A) a review of the energy, [OR] emissions, or resilience 06 baseline conditions, as appropriate; and 07 (B) the projected reduction in energy costs, energy 08 consumption or demand, or emissions affecting local air quality, or increase in 09 resilience, as appropriate; and 10 (2) for each completed energy or resilience improvement project, 11 verification that the energy or resilience improvement project was properly completed 12 and is operating as intended. 13 * Sec. 16. AS 29.55.125 is amended to read: 14 Sec. 29.55.125. Direct acquisition by owner. The proposed arrangements for 15 financing an energy or resilience improvement project may authorize the property 16 owner to 17 (1) purchase directly the related equipment and materials for the 18 energy or resilience improvement project; and 19 (2) contract directly, including through lease, a power purchase 20 agreement, or other service contract, for the energy or resilience improvement project. 21 * Sec. 17. AS 29.55.135(b) is amended to read: 22 (b) Assessment liens run with the land, and that portion of the assessment 23 under the assessment contract that has not yet become due is not eliminated by 24 foreclosure of a property tax lien or a lien for an assessment. 25 * Sec. 18. AS 29.55.140(a) is amended to read: 26 (a) A municipality may issue bonds or notes to finance energy and resilience 27 improvement projects subject to assessment under AS 29.55.105. 28 * Sec. 19. AS 29.55.140(d) is amended to read: 29 (d) Bonds or notes issued under this section must further one or more of the 30 following essential public and governmental purposes: 31 (1) improvement of the reliability of local electrical systems;
01 (2) reduction of energy costs; 02 (3) reduction of energy demand on local utilities; 03 (4) reduction of emissions affecting local air quality; 04 (5) economic stimulation and development; 05 (6) enhancement of property values; 06 (7) enhancement of employment opportunities; 07 (8) improvement of building resilience. 08 * Sec. 20. AS 29.55.150 is amended to read: 09 Sec. 29.55.150. Prohibited acts. A municipality that establishes a region under 10 AS 29.55.100 may not make the issuance of a permit, license, or other authorization 11 from the municipality to a person who owns property in the region contingent on the 12 person entering into a written contract to repay the financing of an energy or 13 resilience improvement project through assessments under AS 29.55.105, or 14 otherwise compel a person who owns property in the region to enter into a written 15 contract to repay the financing of an energy or resilience improvement project 16 through assessments under AS 29.55.105. 17 * Sec. 21. AS 29.55.160 is amended by adding a new paragraph to read: 18 (3) "finance" and "financing" include refinancing an existing project. 19 * Sec. 22. AS 29.55.165 is amended to read: 20 Sec. 29.55.165. Short title. AS 29.55.100 - 29.55.165 may be cited as the 21 Municipal Property Assessed Clean Energy and Resilience Act. 22 * Sec. 23. AS 29.55.105(d)(1) and 29.55.105(h) are repealed. 23 * Sec. 24. This Act takes effect immediately under AS 01.10.070(c).