Agenda Item #8
June 9,2015
Public Hearing
MEMORANDUM
June 5, 2015
TO:
FROM:
SUBJECT:
County Council
.
Amanda Mihill, Legislative AttorneyoM4vl,titl
Public Hearing:
Bill 18-15, Environmental Sustainability - Montgomery County
Green Bank
Bill 18-15, Environmental Sustainability - Montgomery County Green Bank, sponsored by Lead
Sponsor Councilmember Berliner and Co-Sponsors Councilmembers Leventhal, Hucker, Riemer,
EIrich, Rice, and Navarro was introduced on April 21, 2015. A Transportation, Infrastructure,
Energy and Environment Committee worksession is tentatively scheduled for June 15 at 9:00 a.m.
Bill 18-15 would:
(1)
authorize County government to designate a County Green Bank to promote the
investment in clean energy technologies;
(2) specify the process to designate a nonprofit corporation to function as the Green Bank;
(3) define the nature and powers of the Green Bank;
(4) establish a Green Bank Work Group to review the application of Chapter 18A, Article
7 and make recommendations regarding the implementation of the Montgomery
County Green Bank; and
(5) generally amend the environmental sustainability law.
This packet contains:
Bill 18-15
Legislative Request Report
Fiscal and Economic Impact statement
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Bill No.
18-15
Concerning: Environmental Sustainability
- Montgomery County Green Bank
Revised:
4/16/2015
Draft N o . l
Introduced:
April 21. 2015
Enacted:
October 21. 2015
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ __
Sunset Date:
_N~o::.:.n!:::e
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Councilmember Berliner
Co-Sponsors: Councilmembers, Leventhal, Hucker, Riemer,
Elric~
Rice, and Navarro
AN
ACT to:
(1)
authorize County government to designate a County Green Bank to promote the
(2)
(3)
(4)
(5)
investment in clean energy technologies;
specify the process to designate a nonprofit corporation to function
as
the Green Bank;
define the nature and powers ofthe Green Bank;
establish a Green Bank Work Group to review the application of Chapter 18A, Article 7
and make recommendations regarding the implementation of the Montgomery County
GreenBank; and
generally amend the environmental sustainability law.
By adding
Montgomery County Code
Chapter 18A, Environmental Sustainability
Article 7
Sections 18A-44, 18A-45, 18A-46, 18A-47, 18A-48, 18A-49, and 18A-50
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unciffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No.
18-15
1
2
Sec.
I.
Article 7 (Sections 18A-44, 18A-45, 18A-46, 18A-47, 18A-48, 18A-49,
and 18A-50) is added as follows:
Article 7. Monteomery County Green Bank.
18A-44. Purpose.
3
4
5
The County Government should support the formation of
~
Montgomery
6
County Green Bank to promote the investment in clean energy technologies in the
County. The Green Bank must be able to:
7
8
W
!hl
develop separate programs to support clean energy investment in
residential, municipal, small business, and larger commercial projects;
finance investment in clean energy technologies in accordance with
~
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comprehensive plan developed
Qy
it to foster the growth, development,
and commercialization of renewable energy sources and related
enterprises;
{£l
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stimulate the demand for clean energy and the deployment of clean
energy technologies that serve end-use customers;
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@
before making an loan, loan guarantee, or other form offinancing support
for clean energy technologies, develop rules, policies, and procedures to
specify borrower eligibility and any other term or condition offmancial
support;
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liil .
provide financing for clean energy technologies;
ill
provide
Qy
resolution for the issuance of negotiable
finance clean energy technologies;
revenue bonds to
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(g)
assess reasonable fees on its fmancing activities to cover its reasonable
costs and expenses, as determined
Qy
the Board of Directors appointed
under Section 18A-47;
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26
27
(h)
make information regarding rates, terms, and conditions for all of its
fmancing support transactions available to the public for inspection,
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Bill
No. 18-15
28
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including formal annual reviews
:Qy
both
ft
private auditor and the
Director of Finance, and provide details to the public on the Internet
unless such disclosure includes
ft
trade secret, confidential commercial
information, or confidential financial information;
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ill
ill
provide leadership on environmental issues at both the County and State
levels;
maintain close liaison with government agenCIes and elected
representatives at both the County and State levels to achieve the goals of
the Green Bank; and
®
undertake any other activities deemed
:Qy
the Board of Directors to
support the mission ofthe Green Bank.
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18A-45. Definitions.
In this Article, the following words have the meanings indicated:
Clean energy technologies
means energy resources and emerging technologies
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42
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44
that have significant potential for commercialization and do not involve the
combustion ofcoal, petroleum or petroleum products, municipal solid waste, or
nuclear fission.
Clean energy technologies
includes renewable energy sources,
renewable energy projects, energy efficiency projects, alternative fuels used for
electricity generation, alternative fuel vehicles and related infrastructure such as
electric vehicle charging station infrastructure, and smart
~
Energy efficiency project
means
ft
permanent improvement made to an existing
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50
single-family home that:
ill
reduces the consumption of energy in the home, including:
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53
CA)
caulking and weatherstripping doors and windows;
heating and cooling system efficiency modifications, including:
all
ill
replacing
ft
burner, furnace, heat pump, or boiler, or air
conditioner with
~
high efficiency model;
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BILL
No. 18-15
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(ii)
installing a device to modify flue openings that increases the
energy efficiency or the heating system;
57
(iii)
any electrical or mechanical furnace ignition system which
replaces
~
standing gas pilot; and
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(iv)
any tune-up that increases the operating efficiency;
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(Q)
(D)
~
programmable thermostat;
ceiling, attic, wall, or floor insulation;
whole house air sealing;
water heater tune-up, water heater insulation,
~
ill)
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®
(G)
insulation, or
change out to an ENERGY STAR qualified water heater;
storm windows or doors or ENERGY STAR qualified window or
door replacement;
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lID
air distribution system improvements, including duct insulation
and air sealing;
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any device which controls demand of appliances and aids load
management; and
any other conservation device, renewable energy technology, and
specific home improvement that reduces the consumption of
energy in the home; and
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meets safety and performance standards set
by
~
nationally recognized
testing laboratory for that kind ofdevice, ifthese standards are available.
Energy efficiency project
does not include
~
standard household appliance, such
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as
~
washing machine or clothes dryer.
Green Bank
means the Green Bank that the County has designated to promote
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the investment in clean energy technologies and provide financing for clean
energy technologies, including renewable energy and energy efficiency
projects.
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BILL
No.
18-15
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Maryland Open Meetings Act
means the Maryland
~
Meetings Act, codified
at Sections 3-101 through 3-501 of the General Provisions Article of the
Maryland Code.
Renewable energy project
means
~
project that:
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ill
ill
ill
creates, converts, stores, or actively uses renewable energy;
is permanently installed on the home or property; and
meets safety and performance standards set
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~
nationally recognized
testing laboratory for that kind of device, if these standards are available.
Renewable energy source
means
~
source of energy that naturally replenishes
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over
~
human, not
~
geological, time frame and that is ultimately derived from
solar power, water power, or wind power.
Renewable energy source
does not
include petroleum, nuclear, natural
~
or coal. A
renewable energy source
comes from the sun or from thermal inertia ofthe earth and minimizes the output
of toxic material in the conversion of the energy and includes:
ill
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(1)
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non-hazardous, organic biomass material;
solar electric and solar thermal energy;
wind energy;
geothermalenengy;and
methane gas captured from
!!
landfilL
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18A-46. Designation.
The County Council must designate,
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resolution approved
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the
County Executive,
~
single nonprofit corporation which complies with all
requirements and criteria of this Article as the County's Green Bank. If
the Executive disapproves the resolution within 10 days after receiving
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.chl
it
the Council may readopt the resolution with at least
Qaffirmative
votes.
ill
Except as provided in (b)(2), any designation under this Section
expires at the end ofthe fifth full fiscal year after the resolution is
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No.
18-15
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adopted unless the Council extends the designation !2y adopting
another resolution under this Section.
ill
Ifthe Council President does not notify the Chair ofthe designated
Bank's Board of Directors, not later than June 30 ofthe fourth full
fiscal year ofthe designation term, that the Council may allow the
current designation to expire, the designation is automatically
extended for another 5-year term.
.uu
The Council at any time may suspend or revoke the designation of
f!
corporation as the County's Green Bank!2y resolution, adopted after at
least
12
days public notice, that is approved !2y the Executive,
Qr,
if the
Executive disapproves the resolution within 10 days after receiving
it.
is
readopted!2y
f!
vote of at least
Q
Councilmembers.
@
To continue to qualify as the County's Green Bank,
f!
corporation's
articles of incorporation and bylaws must comply with all requirements
ofthis Article.
18A-47.
Board
of
Directors.
£ill
To qualify as the County's Green Bank,
f!
corporation's Board of
Directors must have no more than
11
voting members. The corporation's
bylaws should also allow the Directors of Environmental Protection and
Finance to serve as ex-officio non-voting members along with any other
nonvoting members authorized under the bylaws.
®
Each voting member should be
f!
resident of the County. The members
ofthe Board ofDirectors should include:
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representatives ofresidential or low-income groups;
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representatives of environmental organizations;
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representatives of business organizations;
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persons with experience in investment fund management;
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No.
18-15
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(£}
persons with banking and lending experience;
persons with experience in the fInance or deployment ofrenewable
energy; and
persons with experience
ill
research and development or
manufacturing of clean energy.
A member must not be paid for service on· the Board but may be
reimbursed for necessary travel expenses.
@
A member is not subject to Chapter 19A because ofserving on the Board.
The Bank's bylaws must include provisions derIDing and regulating
conflicts of interest by Board members and Bank staff.
Notwithstanding any inconsistent provision of Section 19A-21,
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member of the Board of Directors who engages in legislative or
administrative advocacy as part of that member's duties on the Board is
not required to register as
because of that advocacy.
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lobbyist under Article V of Chapter 19A
ill
The Board must direct the program, management, and finances of the
corporation.
18A-48. Status; incorporation; bylaws.
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To qualify as the County's Green Bank,
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corporation's articles of
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incorporation must provide that the corporation is:
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.Qi)
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tax-exempt
nonprofit corporation;
not an instrumentality ofthe County; and
incorporated for the sole purpose ofserving as the County's Green
Bank.
The Green Bank's bylaws may contain any provision, not inconsistent
with law or the articles ofincorporation, necessary to govern and manage
the Bank. The Green Bank may exercise all powers and is subject to all
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No.
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requirements under the Financial Institutions Article of the Maryland
Code.
(£}
The Board must adopt and may amend the Green Bank's bylaws. The
Board must submit any proposed amendment to the articles of
incorporation or bylaws to the Executive and Council for review and
comment at least 60 days before the Board takes final action on the
amendment. The Board must submit
~
£QPY
of each adopted amendment
to the Executive and Council within
~
days after adoption.
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The bylaws must require the Green Bank to comply with the Maryland
Open Meetings Act and provide that all meetings of the Board of
Directors must be open to the public except when closed on
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recorded
vote of the Board for
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reason expressly listed in the state law.
18A-49. Work proaram; staff; support from County Government.
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The Board ofDirectors must adopt
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work program each year to advance
the policy objectives and perform the activities listed in Section 18A-44.
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(£}
The Green Bank's work program may include
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plan for sponsorship of
private investment, marketing, and advocacy initiatives.
The Board must meet with the Executive and the Council at least semi­
annually.
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The Department of Environmental Protection should, if the Board of
Directors requests, provide administrative support for the Green Bank,
including contracts, grants, or services in kind, subject to appropriation.
.c5U
Funding sources for the Green Bank may include:
ill
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federal, State, or County funds provided to
it
charitable gifts, grants, or contributions and loans from
individuals,
corporations,
university
endowments,
and
philanthropic foundations; and
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No. 18-15
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earnings and interest derived from financing support activities for
clean energy technologies backed
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the Green Bank.
The Green Bank may also raise private funds and may accept services
from any source consistent with its purpose.
lSA-50. Report
The Board of Directors must report annually on the activities and finances of
the Green Bank to the Executive and Council.
Sec. 2.
Green Bank Work Group.
(a)
The Executive must convene a Green Bank Work Group. Members of
the Work Group must include representatives from the County
departments of Environmental Protection, Finance, and Economic
Development; investment and financing industry, such as regional and
national banks, property trusts, and other lending institutions or
companies; building owners and managers; industry trade associations;
nonprofit organizations; and utility companies.
(b)
The Work Group must:
(1)
review the application of Chapter 18A, Article 7, as added by
Section 1 of this Act, in the context of relevant best practices and
local needs; and
(2)
submit a report to the County Council and County Executive by [1
year from date of enactment] with recommendations on
implementing Chapter 18A, Article 7, including any proposed
amendments to County Law.
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LEGISLATIVE REQUEST REPORT
Bill 18-15
Environmental Sustainability
-
Montgomery County Green Bank
DESCRIPTION:
Bill 18-15 would authorize County government to designate a County
Green Bank to promote the investment in clean energy technologies;
specify the process
to
designate a nonprofit corporation to function as
the Green Bank; defme the nature and powers of the Green Bank;
establish a Green Bank Work Group to review the application of
Chapter
18A,
Article 7 and make recommendations regarding the
implementation of the Montgomery County Green Bank; and
generally amend the environmental sustainability law
Investing in clean energy technologies can be a cost-effective way to
reduce greenhouse gas emissions. However, the lack of accessible
financing options is a barrier to many property owners and may
prevent them from making these energy efficiency improvements
To establish a program to provide property owners with a fmancing
option to invest in clean energy technologies.
Departments of Finance and Environmental Protection
To be requested.
To be requested.
To be requested.
To be researched.
Amanda Mihill, Legislative Attorney, 240-777-7815
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITllN
MUNICIPALITIES:
PENALTIES:
N/A
®
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ROCKVIllE, MARYLAND
MEMORANDUM
May 11,2015
TO:
George Leventhal; President, County Council
FROM:
SUBJECT:
Jennifer
A.
Hughes, Director, Office of Mana ement and
Joseph P. Beach, Director, Department of
e
~(lget
11K
PElS for Bill 18-15, Environmental SustainabiUty - Montgomery County Green
Bank
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:fz
cc:
Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa Austin,
Offices ofthe County Executive
Joy Nurmi, Special Assistant
to
the County Executive
Patrick Lacefield. Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
David Platt, Department ofFinance
Jed Millard, Office of Management and Budget
Alex Espinosa. Office of Management and Budget
Naeem Mia, Office of Management and Budget
@
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Fiscal Impact Statement
Bill IS-IS, Environmental Sustainability - Montgomery County Green Bank
1.
Legislative Summary:
This legislation would 1) authorize County government
to
designate
a
County Green Bank to
promote the investment in clean energy technologies;
2)
specify
the
process
to
designate
a
nonprofit corporation to function
as
the Green Bank;
3)
define the nature and powers of
the
Green
Bank;
4)
establish a Green Bank Work Group to review the application ofChapter
18A,
Article
7
and make recommendations regarding the impJementation orthe Montgomery County Green
Bank; and 5)
generally amend the environmental sustainability
law.
2. An estimate of changes
in
County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source ofinformatioo, assnmptions, and methodologies
U$Cd.
The
Department ofFinance estimates that in the first year development phase of the
establishment ofa Montgomery County Green Bank contractual bond counsel and professional
financiaJ advisor services would be required. These services would be required to review,
comment. and participate witb the work group created by the legislation to develop final plans for
establishment of
a
Green
Bank.
The Department estimates a total of $25,000 for 125 hours of contracted bond counsel services at
$200
per
bour. An additional $50,000 would be required for nearJy 225 hours of contracted
financial advisor services.
The
Department
estimates
that these
services
would
be
required only in
the first year of development of a Montgomery Colmty Green Bank and will not incur any
additional ongoing
costs.
The total fiscal impact to the Department of Finance is $75,000 in the
first year only.
The
legislation states that
"the
Department of Environmental Prote.ction should, if
the
Board of
Directors requests. provide administrative
SUpPOlt
for the Green Bank, including contracts,
grants, or services in kind, subject
to
appropriation." At this time, it is not possible to determine
the
fiscal
impact for the Department ofEnvironmental Protection
as
it is unknown ifthe Board
of
Directors will request administrative support or what volume of administrative support would
be
requested.
The legislation also states that funding sources for the Green Bank may incJude federal, State, or
County funds provided to it. If later decisions are made to provide County funds to the Green
Bank
in
any
given
fiscal
year, that
amount would constitute
an
additional fiscal impact. No
additional revenues
are expected as a
result ofBm 18-15.
3.
Revenue and expenditure estimates
covering
at
least
the next
6
fiscal years.
In
the first
year of development ofa Montgomery County Green Bank, the Department of
Finance would require $75,000 in contracted financial advisor and bond counsel
servic~s.
There
are no ongoing costs beyond the first year for the Department ofFinance.
As stated. above, a projection of costs over a six-year period for the Department ofEnvironmental
Protection
is
unable to
be
detennined at this time.
4. An actuarial
analysis
through the entire amortization period for each bill that would affect
retiree pension or group insurance
costs.
Not applicable.
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5. An estimate of expenditurcsrelated to County's information technology
(IT)
systems,
including Enterprise .Resource Planning (ERP) systems.
Not applicable.
6. Later actions that may affeet future revenue and expenditures if the bill authorizes future
spending.
The Board ofDirectors may request that the Department of Environmental Protection provide
administrative support.
This
could potentially require additional resources
for
the Department of
Environmental Protection; however, it is unknown at this time jf support would
be
requested or at
what level. The Bill also allows for County funds to be provided to the Green Bank. If later
decisions are made
to
provide County funds to
the
Green
Bank,
this would constitute
an
additional
fiscal
impact.
7. An estimate of the staff time needed to implement the bill.
The Department of Finance would require 125 hours ofcontracted bond counsel and 225 hours of
contracted financial advisor services.
It
is unknown at this time what level of administrative
support may
need
to be provided by the Department of Environmental Protection because
the
Board of Directors ofthe Green Bank would have to request such support.
8.
An explanation of how the addition of new staff responsibilities wonld affect otber
duties.
At this time, there will be no impact to current
staif
duties and responsibilities as a result of
approval ofBiIl18-15. However. iftbe Board of Directors requests administrative support from
the Department of Environmental Protection, additional staff resources may be required if the
Department is not able
to
provide
the
level ofrequested support within
its
approved personnel
complement.
9.
An estimate of costs when an additional appropriation is needed.
Not applicable.
10. A description
of
any variable that could affect revenue and
cost
estimates.
See
#6
above.
11. Ranges of revenue or expenditures that are nncertain or difficult to project.
It
is
difficult to determine the cost
of
additional administrative support that may be provided by
the Department of Environmcntal Protection. Additionally,
the
amount of County
funds
provided
to the Green Bank in
any
given fiscal year is uncertain and not possible to project at this time.
12.
If
a
bill
is likely to bave no fiscal impact, why tbat is the case.
Not
applicable.
13. Other fiscal impacts or comments.
Not applicable.
14.
The following contributed to and
concurred
with this analysis:
Joe Beach, Rob Hagedoorn, and
Mary
Casciotti: Department of Finance
Jedediall Millard: Office of Management and Budget
r
Date
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Eeonomic Impaet Statement
Bill 18-:-15,
EnvironlBental
Sustainability..Moiltgomery County. Green Bank
Baekground:
This
Jegislation would 1)
aUthorize
County
government
to
designate
a
County
Green
Bank:
to promote
the
investment
in
clean energy technologies.; 2) specifY
the
process
to
designate a nonprofit corporation
to
function as the
Green
Bank; 3) define the nature and
powers ofthe
Green
Bank; 4) establish a Green Bank Work Group to review the
application
of
Chapter
18A,
Article
7
and
make
recommendations
regarding
the
implementation ofthe
Montgomery
County
Green Bank;
and.
5) generally
amend
the
environmental
sustainability
law.
1. The sources ofinfonnation, assumptions, and methodologies
us~
,
The sources ofinfonnation include the Coalition for Green
Capital~
Maryland
Commission for Clean Energy,(MCEC),
and
the
Connecticut
Green
Bank.
2. A description of
any
variable
that
could affect the
eeoDOmie
impact
es~imates.
Based
on the experience
in
the
State
ofConnecticut,
the
Green
Bank
was
able
tel
increase
the
alnount
ofprivate contributions
$10
for every $1 ofGreen Bank
funding.
Also
according to 2013
data.
Connecticut's Green Bank is
credited
with
$220 million being
invested in
renewable energy,
the
creation of 1,200 jobs,
and a
reduction of
more
than
250,000 tons ofgreenhouse gas emissions.
The variable
that
could most
affect
the
economic impact estimate is the amount of
annual
investment capital available
to
capitalize
the Green Bank. The success ofthe Connecticut
Green Bank can be seen as attributable
to~
approximately $40.0 million of annual '
funding.
It
is
unclear
if
the
Montgomery
County
Green,
Bank. will have
~icated
annual
funding. The County Executive
has
requested approxUnately a $20.0 million direct one­
time contribution from the Pepco-Exelon settlement specifically for establishing a Green
BariL Recurring
annual
funding contributions may be necessary for the successful long..
tennoperation of a Green Bank in Montgomery County.
'I'he
State of
Maryland
is
exploring the development ofa Green Bank.. TheMRryland
Clean
Energy
Center (MCEC) was tasked
by
SB 985 to evaluate the
need
for a Green
Bank. Phase
I.
which studied the structure and organization of
Green
Banks established
in other states: was completed in December 2014. Phase II, which is
to
examine
and
recommend
the sources ofcapital for a Green Bank and the
best
method fur
establishing
a
Green
Bank,
is
scheduled
to
be
completed
by
December 2015. Having a State
and
a .
Montgomery
County Green Bank may either serve to further stimulate energy
investment, or merely subStitute
funding
sources.
Therefore,
it
is
unknown
what the
economic impact would
be
ofhaving a Green Bank at
both
governmental levels.
Other
variables
that
may
impact
economic estimates include: the cost
of
energy savings
technology; the market demand for energy
saving technology;
the
availability of
companies
manufacturing
and
installing such technology;
the ability to make
energy
improvement
paybacks
within a reasonabJe time period; and the degree to which the
Page 1 ofl
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Eeonomie Impaet Statement
BUll8-15,
Environmental Sustainability-Montgomcry County Green
Bank
private
financial
ma'rkets
will
be
motivated to participate
in
soohenergy
inv~ents
for
residential
and
commercial projects.
Given
all
ofthese variables, no definitive estimate oftile
economic
impact of
this
proposed legislation is possible
at
this time.
3. The
BW's
positive or negative effett,
if
any
on
employmellt, spending. saving,
investment,
ineomes, and property
values
in
the
County.
.
It is unknown
if
the County would be able
to
replicate
the level ofprivate investment
that
the Connecticut Green Bank
has
achieved. However, it is generally ?J)ticipated
that
a
Green Bank will
~ve
a positive economic benefit to the County on
einployment,
.investments,
and
property
values. If Montgomery
County
receives $20.0 million from
the Pepoo-"?xeion settlement and could achieve the 10
to
1
rano ofinvestment
returns
that
Connecticut
has
achiev~
it
would
mean that the $2() million initial
funding
could
provide $200 million ofenergy savings investment
in
M()ntgomery
County. The specific
details
ofthe planned
Green
Bank program as well as thepropose41evel of
one-time
and
annual funding
would
be needed
in
order
to estimate the true economic impact of a
Green
Bank
for
Montgomery
County.
4.
If
a Bill is likely to have no economic impact, why
is
that the
ease?
See response 3.
5. The following
contributed to or eOncurred with this
analysis:
David
Platt~
Mary
Casciotti and Rob
Hagedoo~
Finance.
Jo
F.
ach, Director
Date
Department ofFinance
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