Bill No.
6-15
Concerning: Commercial
Property
Assessec:t Clean Energy Proaram -
Established
Revised: 3/2712015
Draft No. 2
Introduced:
Februarv 3. 2015
Enacted:
March 31 2015
Executive:
AprilB.2015
Effective:
July 8. 2015
Sunset Date: -!..!N,,,on,,.e'-------
Ch.
_j§_,
Laws of Mont Co.
2015
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN ACT
to:
(1)
establish a Commercial Property Assessed Clean Energy Program to assist qualifying
commercial property owners to make energy improvements;
(2) allow private lenders that provide capital for a commercial loan provided under a local
clean energy Joan program to have annual loan payments collected by the County as a
surcharge on a real property tax bill;
(3) establish that the surcharge on a
real
property tax bill is treated as all other taxes and
charges and that an unpaid surcharge shall be, until paid, a lien on the real property on
which it is imposed; and
(4) generally amend the environmental sustainability law.
By amending
Montgomery County Code
Chapter I SA, Environmental Sustainability
Article 5
Sections 18A-33,18A-34, JSA-35, lSA-36, and 18A-37
• • •
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 unaffected by bill.
The
County Council for Montgomery County, Maryland approves the following Act:
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BILL No. 6-15
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2
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Sec.
1.
Sections 18A-33, 18A-34, 18A-35, 18A-36, and 18A-37 are amended
as
follows:
Article 5. Commercial Property
Assessed
Clean Energy Program
lSA-33. [Commercial Property
Assessed
Clean Energy Program] Definitions.
In
this Section, the following words have the meanings
4
5
(a)
Definitio~.
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7
indicated:
Commercial property
means any real property located in the County that
is either not designed for or intended for human habitation, or that is used
for human habitation as
g
multi-family dwelling of
1
or more rental units.
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9
10
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.
11
12
13
County designated lender
means
g
person who may be selected
Qy
the
County through
g
competitive process to offer financing, and if offered
and accepted
Qy
the County, related funding for administrative services
for the Program.
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County designated program manager
means
g
person who may be
selected
Qy
the County through
g
competitive process to . provide
administrative and management services for the Program.
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20
Department
means the Department of Finance.
Director
means the Director of the Department or the Director's
designee.
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23
Energy efficiency and/or renewable energy improvement
or
improvement
means any equipment, device, or material that is intended to decrease
energy consumption or expand use of renewable energy sources,
including:
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ill
insulation in any wall, roof, floor, foundation, or heating and
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BILL No. 6-15
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cooling distribution system;
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ill
.!!
storm window or door, multi-glazed window or door, heat- ·
absorbing or heat-reflective glazed and coated window and door
system, or additional glazing, reduction in glass area, and other
. window and door system modification that reduces energy
consumption;
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35
ill
an automated energy control system;
.!!
heating, ventilating, or air-conditioning and distribution system
®
ill
®
ill
(fil
{2}
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modification or replacement;
caulking, weather-stripping, and air sealing;
replacement or modification of
.!!
lighting fixture to reduce the
energy use of the lighting system;
an energy recovery system;
.!!
day lighting system;
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the installation or upgrade of electrical wiring or outlets to charge
a motor vehicle that is fully or partially powered
]2y
electricity;
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QQ)
.!!
measure that reduces the usage of water or increases the
efficiency of water usage;
46
Q.D
any other installation or modification of equipment, device, or
other material intended to decrease energy consumption or expand
the use of a renewable energy source;
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.(12}
any measure or system that makes use of or expands
.!!
renewable
source of energy, including solar water heater, solar thermal
electric, photovoltaic's, wind, biomass, hydroelectric, geothermal
electric, geothermal heat pumps, anaerobic digestion, tidal energy.
wave energy, ocean thermal, fuel cells using renewable fuels, and
geothermal direct-use; or
-3-
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BILL NO. 6-15
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.Q1)
any renewable energy system that is !! fixture, product, device, or
interacting group of fixtures, products, or devices on the
customer's side of the electricity meter that uses at least one
renewable energy source to generate electricity. A renewable
energy system includes !! biomass system, but does not include an
incinerator or digester.
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Private lerider
means a lender selected
fil'.
the property owner to provide
loan funds to the property owner for an improvement.
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Property owner
means !! person who owns qualified property or has !!
ground lease or a long-term lease
of~
or more years on qualified property.
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Qualified property
means any commercial real property that meets the
eligibility criteria for the Program.
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Renewable energy source
means
!!
source of energy that naturally
replenishes over !! human, not
!!
geological, time frame and that is
ultimately derived from solar power, water power, or wind power.
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Renewable energy source
does not include petroleum, nuclear, natural
~
or coal. A
renewable energy source
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:
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ill
ru
ill
ill
non-hazardous, organic biomass material;
solar electric and solar thermal energy;
wind energy;
geothermal energy; and
methane gas captured from !! landfill.
Surcharge
means the annual repayment of!!
lillYb
including principal,
interest. and related charges, that funds an improvement and is collected
through the real property
tax
billing process.
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BILL No. 6-15
82
[(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)
(2)
(3)
standards for eligible energy and environmental improvements;
energy audit or project design review requirements;
procedures for monitoring project progress and post-installation
inspections;
(4)
(5)
(6)
(7)
(8)
program funding sources;
lending standards and priorities;
minimum and maximum loan amounts;
interest rates, terms, and conditions;
application
procedures,
including
necessary
supporting
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documentation;
(9)
(10)
criteria for adequate security;
procedures to refer applicants to other public and private sources
of funds and incentives;
(11)
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procedures related to decisions on loan acceptance and denial, or
loan terms and conditions;
(
12)
procedures for nonpayment or default;
disclosure requirements for real estate transactions;
criteria for loan disbursement; and
any additional requirements necessary for program operation or
security ofloan funds identified by the Executive.]
(13)
(14)
(15)
105
[[18A-34=18A-37. Reserved.JI
18A-34. Commercial Property Assessed Clean Energy Program established.
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107
W
Established.
The Director must create and administer
l!
Commercial
Property Assessed Clean Energy Program.
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BILL
No.
6-15
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®
Third-party lender.
The Director may enter into an agreement with
~
third-party lender that is
either~
County designated lender
or~
private
lender that
funds~
loan for an improvement. The agreement must provide
for the repayment of the loan for the improvement and any cost of
administering the Program through a surcharge on the qualified property.
The loan may include the cost of materials and labor necessary for
installation, any permit fee, any inspection fee, any application or
administrative fee, any bank or lender fee, and any other fee that the
property owner may incur for the installation of the improvement. The
third-party lender must submit a request for collection of each surcharge
amount to the County designated program manager
April
1
of each year.
Qr..
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if there is no
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County designated program manager, to the Department no later than
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(lj
County designated program manager.
The Director may enter into an
agreement with
~
County designated program manager. The County
designated program manager must notify the Department of the amount
of the surcharge for each account to be collected on the real property
tax
bill for that
year's~
no later than May
1
of each year, and
in~
format
approved
.Qy
the Department. The County designated program manager
will receive the collections from the County, reconcile the collected and
billed surcharge for each account. and remit the surcharge amount to the
County designated lender or private lender. The County designated
program manager must report annually to the County on the participants
in the Program
.Qy
name, property address, property tax account number,
amount of each surcharge billed, collected
.Qy
the County, and remitted to
the lender, description of project, any administrative fees, the amount of
each
1Qfil1.
the amount of each loan balance, and the term of each loan.
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BILL No. 6-15
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Tiris report must be submitted to the Department no later than February
12.
of each year pertaining to activity in the prior calendar year.
@
The Director may enter into an agreement with one person who provides
both County designated lender and County designated program manager
services.
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18A-35. Eligibility.
In order to be eligible for this Program, the following criteria must be met:
W
Eligibility.
ill
ill
The property must be a qualified property.
Before any loan is approved under the Program. the County must
give due regard to the property owner's ability to repay a loan in a
manper substantially similar to that required for a mortgage loan
under Sections 12-127. 12-311. 12-409.1. 12-925. and 12-1029 of
the Commercial Law Article of the Maryland Code.
ill
The property owner must submit the following to the private lender
or the County designated lender at the time of application for
funding:
(A)
express written consent of any holder of an existing
mortgage or deed of trust on
l!
qualified property; and
ill}
verification that there are no delinquent fees, taxes, water or
sewer charges or other special assessments on the qualified
property.
[[ill]]
ill
The loan amount under this Program must:
(A)
be at least $5,000 and no more than 20% of the full cash
value of the qualified property. The full cash value is
determined
Qy
the Marvland State Department of
Assessments and Taxation; and
-7-
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BILL No. 6-15
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(hl
(fil
together with the outstanding balance of the mortgage or
deed of trust, be no more than 90% of the
full
cash value of
the qualified property.
Property assessed clean energy surcharge.
ill
The property owner of qualified property must
~
to repay the
amount financed
through~
surcharge levied on the County's real
property tax bill for the qualified property.
ill
A surcharge may be imposed under
~
written agreement between
the County designated lender or private lender and the County.
ill
As
~
condition for entering into an agreement under the Program,
the County designated lender or private lender must provide the
County designated program manager and the Department
~
£QPY
of the loan documents and documents that verify:
(A)
the propertv owner's ability to repay the Propertv Assessed
Clean Energy loan in a manner substantiallv similar to that
required for a mortgage loan:
ml
there are no delinquent taxes, special assessments, or water
or sewer charges on the qualified property;
[[(fil]] (g
there are no delinquent assessments on the qualified
property under the Program;
[[(g]]
ill}
the property owner has obtained all necessary permits;
[[@]]
{ID
the improvement is permanently affixed to the qualified
property and complies with
all
applicable State and federal
statutes and regulations, as determined
regulatory authority;
[[(fill]
ill'.
the
appropriate
£D
existing mortgage or deed of trust lender consent;
[[ill]]
(ill
loan to value documentation; and
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BILL No. 6-15
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[l.(ffi]] ill)
any other financial or program document that the
Director deems necessary.
ill
In addition
to
the administrative fees in Section 18A-34(c), the
County may collect
an:
administrative fee through the surcharge to
cover charges relating to lending, program management, billing, or
collection.
18A-36. Payment of surcharge; lien.
ill}
The County must collect the amount financed through a surcharge on the
property owner's real property tax bill and forward payments received
.!2y
the County
to
the County designated program manager
QI.
ifthere is no
County . designated program manager, to the lender no later than 30 days
after the payment due dates for real property taxes. Payment due dates for
semi-annual real property taxes are September 30 for the first installment
and December
11
for the second installment, and for annual real property
taxes the Payment due date is September 30.
{hl
If
the property owner sells the qualified property, the buyer must continue
to
Pfil'.
the surcharge levied on the annual property tax bill.
(£)
The surcharge and any accrued interest or penalty constitutes
l!:
first lien
on the real property to which the surcharge applies until paid. An unpaid
surcharge will be, until paid,
l!:
lien on the qualified property on which
!!
'
is imposed from the date
.i!
becomes payable. The surcharge will accrue
interest and penalty and will be treated and collected like all other County
property taxes. Any delinquency will be collected through the County
Tax Sale process. The provisions of Title 14, Subtitle
~
of the Tax
Property Article of the Maryland Code that
illl01Y
to
l!:
tax
lien will also
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=
illl01Y
to the lien created under this law. Any delinquent surcharge
collected through the County Tax Sale process must be forwarded to the
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BILL NO. 6-15
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Approved:
County designated program manager
Qr,
if there is no County designated
program manager, to the lender no later than 30 days after the payment
was received.
18A-37. Regulations; annual report.
.(fil
.(hl
The Executive may adopt regulations under Method
Q)
to administer the
Program.
The Executive must submit an annual report to the County Council
Qy
March 15 of each year describing program participation, number and
dollar value of surcharge billed and collected, and other relevant
information pertaining to the prior calendar year.
228
George Leventhal, President, County Council
229
Approved:
Date
2JO
Wilie~
This
is
a correct copy ofCouncil action.
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Linda M. Lauer, Clerk of the Council
Date
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