Bill No. 11-13
Concerning: Commercial Property Assessed Clean Energy Program - Established
Revised: 10/28/2013 Draft No. 2
Introduced: April 23, 2013
Enacted: November 19, 2013
Executive: December 2, 2013
Effective: March 3, 2014
Sunset Date: None
Ch. 33 , Laws of Mont. Co. 2013
For Montgomery County, Maryland
AN ACT to:
(1) [[establish a Commercial Property Assessed Clean Energy Program to assist qualifying commercial property owners to make energy improvements;
(2) establish a revolving loan fund to provide property owners loans under the Program; and
(3)]] require the Executive to develop a plan to implement a Commercial Property Assessed Clean Energy Program to assist qualifying commercial property owners with energy improvements and;
(2) generally amend the environmental sustainability law.
Montgomery County Code
Chapter 18A, Environmental Sustainability
Section 18A-33[[, 18A-34, 18A-35, 18A-36, 18A-37, and 18A-38]]
Boldface Heading or defined term. Underlining Added to existing law by original bill. [Single boldface
from existing law by original bill. Double
by amendment. [[Double boldface
from existing law or the bill by amendment. *
* * Existing law unaffected by bill.
Boldface Heading or defined term.
Underlining Added to existing law by original bill.
[Single boldface brackets] Deleted from existing law by original bill.
Double underlining Added by amendment.
[[Double boldface brackets]] Deleted from existing law or the bill by amendment.
* * * Existing law unaffected by bill.
Sec. 1. Article 5 of Chapter 18A ([[Sections]] Section 18A-33[[, 18A-34, 18A-35, 18A‑36, 18A-37, and 18A-38]]) is added as follows:
[[Article 5. Commercial Property Assessed Clean Energy Program]]
In this Section, the following words have the meanings indicated:
Commercial or industrial property means any privately owned commercial or industrial real property located in the County.
Commercial Property Assessed Clean Energy Program or Program means a program that facilitates energy improvements and requires repayment through a surcharge on the owner’s property tax bill.
Department means the Department of Finance.
Director means the Director of the Department or the Director’s designee. Eligible cost means the net cost of buying or installing an energy improvement, including any part, component, or accessory necessary to operate the improvement or device, less any amount received from a public or private program because the improvement or device is or will be made or installed.
Energy efficiency improvement means any equipment, device, or material that is intended to decrease energy consumption, including:
(1) insulation in any wall, roof, floor, foundation, or heating and cooling distribution system;
(2) a storm windows or door, multi-glazed window or door, heat-absorbing or heat-reflective glazed and coated window and door system; and additional glazing, reduction in glass area, and other window and door system modification that reduces energy consumption;
(3) an automated energy control system;
(4) a heating, ventilating, or air-conditioning and distribution system modification or replacement;
(5) caulking, weather-stripping, and air sealing;
(6) replacement or modification of a lighting fixture to reduce the energy use of the lighting system;
(7) an energy recovery system;
(8) a day lighting system;
(9) the installation or upgrade of electrical wiring or outlets to charge a motor vehicle that is fully or partially powered by electricity;
(10) any measures to reduce the usage of water or increases the efficiency of water usage; or
(11) any other installation or modification of an equipment, device, or material approved as a utility cost-savings measure.
Qualifying commercial real property means any commercial or industrial property that meets the qualifications established for the Commercial Property Assessed Clean Energy Program.
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:
(2) solar and solar thermal energy;
(3) wind energy;
(4) geothermal energy; and
(5) methane gas captured from a landfill.
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 uses at least one renewable energy resource to generate electricity. Renewable energy system includes a biomass stove, but does not include an incinerator or digester.]]
[[18A-34. Commercial property assessed clean energy program established.
(a) Established. The Director must create and administer a commercial property assessed clean energy program.
(b) Bond issuance authorized. The Director may issue a bond to finance a qualifying commercial real property to fund eligible costs to make an energy efficiency improvement on the property.
(c) Owner-arranged or lessee-arranged financing. The Director may enter into an agreement regarding repayments to a third party for owner-arranged or lessee-arranged financing to fund eligible costs to make an energy efficiency improvement on a qualifying commercial real property. The agreement regarding repayments must provide for the repayment of the cost of the energy efficiency improvement and any cost of administering the Program through an assessment on the property benefited. The financing may include the cost of materials and labor necessary for installation, any permit fee, any inspection fee, any application or administrative fee, any bank fee, and any other fee that the owner may incur for the installation.]]
[[18A-35. Eligibility; use of funds.
(1) A property owner must have an energy audit or renewable energy system feasibility analysis on the qualifying commercial real property that assesses the expected energy cost savings of the energy improvement over the useful life of the improvement.
(2) A property owner must obtain the consent of any existing mortgage holder.
(3) A property owner must agree to repay the amount financed through the County tax bill for that property, as required by Section 18A-36.
(4) An energy efficiency improvement must be permanently fixed to a qualifying commercial real property.
(5) If the cost of an energy efficiency improvement exceeds $250,000, the property owner must provide for ongoing measurements to establish the savings realized from the improvement.
(6) Any contract to install an energy efficiency improvement that exceeds $250,000 must require the contractor to guarantee to the property owner that the improvement will achieve a savings-to-investment ratio greater than 1.
(b) Property Tax Assessment
(1) An assessment may be imposed only under a written contract between the Department and the property owner. Before entering into a contract under the Program, the Department must verify that:
(A) there are no delinquent taxes, special assessments, or water or sewer charges on the property; and
(B) there are not delinquent assessments on the property under a property assessed clean energy program.
(2) The property tax assessment must not exceed the useful life of the energy efficiency improvement.
(3) The total amount financed must not exceed 10% of the assessed value of the qualifying commercial real property.
(c) Disclosure to property owner. The Director must disclose any cost or risk associated with participating in the Program, including any risk related to the failure of the property owner to pay the property tax assessment to a property owner.]]
[[18A-36. Repayment of funds; lien.
(a) The owner of qualifying commercial real property must agree to repay the financed amount through the County property tax bill for that property.
(b) Under owner-arranged financing, the County may impose a property tax assessment and forward payments to the third party financer or the property owner may pay the third party financer directly.
(c) If the property owner sells the property, the seller must disclose that the buyer must continue to repay the assessment through the property tax bill.
(d) The amount financed and any accrued interest constitute a first lien on the real property to which the assessment applies until paid. The amount financed and accrued interest are collectable by suit or tax sale like all other real property taxes, to the extent allowed by State law. If the property owner does not pay the amount financed and accrued interest as required, the property may be certified to the Department of Finance and the lien may be sold at the tax sale conducted by the County.]]
The Executive must adopt regulations under Method (2) to administer the Program.]]
Sec. 1. Article 5 of Chapter 18A (Section 18A-33) is added as follows:
Article 5. Commercial Property Assessed Clean Energy Program.
18A-33. Commercial Property Assessed Clean Energy Program.
(a) Definition. In this Section, Commercial Property Assessed Clean Energy Program or Program means a program that facilitates energy improvements and requires repayment through a surcharge on the owner’s property tax bill.
(b) The Executive must, by May 19, 2014, prepare a plan for implementing a Commercial Property Assessed Clean Energy Program that analyzes and provides recommendations on the following elements:
(1) standards for eligible energy and environmental improvements;
(2) energy audit or project design review requirements;
(3) procedures for monitoring project progress and post-installation inspections;
(4) program funding sources;
(5) lending standards and priorities;
(6) minimum and maximum loan amounts;
(7) interest rates, terms, and conditions;
(8) application procedures, including necessary supporting documentation;
(9) criteria for adequate security;
(10) procedures to refer applicants to other public and private sources of funds and incentives;
(11) procedures related to decisions on loan acceptance and denial, or loan terms and conditions;
(12) procedures for nonpayment or default;
(13) disclosure requirements for real estate transactions;
(14) criteria for loan disbursement; and
(15) any additional requirements necessary for program operation or security of loan funds identified by the Executive.