PRINTER'S NO. 255
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
234
Session of
2017
INTRODUCED BY BLAKE, RESCHENTHALER, SABATINA, SCHWANK, FONTANA,
SCAVELLO, BREWSTER, COSTA, YUDICHAK, McGARRIGLE, LEACH,
HAYWOOD, RAFFERTY, TARTAGLIONE, HUGHES, BOSCOLA, McILHINNEY,
KILLION, BROWNE, TOMLINSON AND GREENLEAF, JANUARY 31, 2017
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
JANUARY 31, 2017
AN ACT
Amending Title 12 (Commerce and Trade) of the Pennsylvania
Consolidated Statutes, authorizing assessments for energy
improvements in districts designated by municipalities.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 12 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 43
PROPERTY ASSESSED CLEAN ENERGY PROGRAM
Sec.
4301. Purpose.
4302. Definitions.
4303. Establishment of a program.
4304. Notice to mortgage holder required for participation.
4305. Review required.
4306. Notice.
4307. Lien.
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4308. Collection of assessments.
4309. Bonds or notes.
4310. Joint implementation.
§ 4301. Purpose.
This chapter authorizes the establishment of a property
assessed clean energy program in the Commonwealth, which is
important so that owners of commercial and industrial properties
can obtain low-cost, long-term financing for energy efficiency,
water conservation and renewable energy projects.
§ 4302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Alternative energy system." Energy generated from
alternative energy sources as defined under the act of November
30, 2004 (P.L.1672, No.213), known as the Alternative Energy
Portfolio Standards Act. In addition to these energy sources,
programs may recognize alternative energy sources not included
in the Alternative Energy Portfolio Standards Act when approving
qualified project applications.
"Assessment." An increase in the property tax rate for a
commercial or industrial property located in a district where
the property owner has chosen to participate in the program. The
property tax increase shall be used solely to repay the bonds.
The municipality or county that established the program agrees
to collect and remit the increased property tax amount on the
assessed property to the local financier or the owner financer
under section 4308 (relating to collection of assessments).
"Bond." The term includes any public or private financing
note, mortgage, loan, deed of trust, instrument, refunding note
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or other evidence of indebtedness or obligation used to finance
a qualified project.
"Business." A corporation, partnership, sole proprietorship,
limited liability company, business trust or other commercial
entity approved by the authority.
"Clean energy project." A project which does any of the
following:
(1) Replaces or supplements an existing energy system
that utilizes nonrenewable energy with an energy system that
utilizes alternative energy.
(2) Facilitates the installation of an alternative
energy system in an existing building or a major renovation
of a building.
(3) Facilitates the retrofit of an existing building to
meet high-performance building standards.
(4) Installs equipment to facilitate or improve energy
conservation or energy efficiency, including heating and
cooling equipment and solar thermal equipment.
"District." An area or group of real properties within a
municipality or county, designated by the municipality or county
for the purpose of establishing a property assessed clean energy
program.
"Local financing." Financing provided or facilitated by a
municipality, county, district, economic development
corporation, related authority or any government sponsored
entity. This term does not include general obligation bonds.
"Owner financing." Financing by a real property owner or a
third-party provider. This term may include a power purchase
agreement.
"Power purchase agreement." A financial arrangement in which
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a third party owns, operates and maintains a permanently affixed
energy generation unit for a property owner and the property
owner purchases power from the third party at agreed-upon rates
in the arrangement. The third party would have the ability to
finance its equipment acquisitions with an assessment under a
property assessed clean energy program.
"Program." A property assessed clean energy program
established under this chapter.
"Property assessed clean energy program." A means of
financing qualified projects in a district through an
assessment.
"Qualified party." A contractor, subcontractor or financial
institution that meets the following standards:
(1) Possesses all technical qualifications and
resources, including equipment, management, technical and
craft labor personnel, and financial resources necessary to
perform the contracted responsibilities, or will obtain the
contracted responsibilities through the use of qualified
subcontractors.
(2) Possesses all valid, current licenses, registrations
or other certificates required for the contractor or its
employees by Federal, State or local law necessary for the
type of work required for the project.
(3) Does not have any outstanding liability to the
locality in the form of tax obligations, fines or other fees,
unless the inspector, contractor, subcontractor or financial
institution has entered into and is in compliance with a
payment agreement with the locality for such taxes, fines or
fees.
(4) Meets all bonding requirements, as required by
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applicable law or contract specifications, and all insurance
requirements as required by applicable law or contract
specifications, including general liability insurance,
workers' compensation insurance and unemployment insurance
requirements.
"Qualified project." The installation or modification of a
permanent improvement fixed to real property that is a clean
energy project, water conservation project or alternative energy
system, which generates measurable energy savings or reductions
in water usage and the installation is performed by a qualified
party in a district. The term includes installation of
alternative energy-generating equipment affixed to the land or
building.
"Real property." Any commercial or industrial land or
building owned by an individual, partnership, limited liability
corporation, corporation or nonprofit. The term does not include
multi-family housing or any residential property.
"Water conservation project." A project that reduces the
usage of water or increases the efficiency of water usage.
§ 4303. Establishment of a program.
A municipality or county may establish a property assessed
clean energy program by adopting an ordinance or resolution that
will establish the program, define the district and provide
other operational standards and guidelines. A county that
establishes a program must notify any municipality that may be
in the district of their possible inclusion, before a resolution
establishing a program is approved. A municipality or county may
contract with a third party to administer the program.
§ 4304. Notice to mortgage holder required for participation.
Before a real property can establish an assessment under the
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program and begin a local financing or an owner financing of a
qualified project, the following shall occur:
(1) The holder of any first mortgage lien on the
property must be given written notice of the real property
owner's intention to participate in the program and
acknowledge in writing to the property owner and municipality
or county that established the program that they have
received such notice.
(2) The holder of the mortgage lien must provide written
consent to the property owner and municipality or county that
established the program that the property may participate in
the program.
§ 4305. Review required.
(a) Review required.--A program established under this
chapter must require for each proposed qualified project a
review of energy baseline or water usage baseline and the
projected energy savings or water usage reductions in order to
establish the projected energy savings or water usage
reductions.
(b) Verification of completion.--After a qualified
improvement is completed, the municipality or county shall
obtain verification that the qualified improvement was properly
completed and is operating as intended.
§ 4306. Notice.
(a) Notice.--A municipality or county that establishes a
program shall post online and make available to the public a
notice of each qualified project financed through an assessment.
(b) Contents of notice.--The notice under subsection (a)
must contain:
(1) The legal description of the property.
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(2) The name of each property owner.
(3) The total amount of the qualified improvements of
the project.
(4) The assessment needed to satisfy the qualified
improvements.
(5) A reference to the statutory assessment lien
provided under this chapter.
§ 4307. Lien.
(a) General rule.--An assessment under this chapter and any
interest or penalties on the assessment:
(1) Is a first and prior lien against the real property
on which the assessment is imposed from the date on which the
notice of contractual assessment is recorded and until the
assessment, interest or penalty is satisfied.
(2) Has the same priority status as a lien for any other
tax imposed by any agency, municipality or county of the
Commonwealth.
(b) Lien.--The lien runs with the land and that portion of
the assessment under the assessment contract that has not yet
become due is not eliminated by foreclosure of a property tax
lien. The assessment cannot be accelerated or extinguished until
fully repaid.
(c) Enforcement.--The assessment lien may be enforced by the
municipality or county in the same manner that a property tax
lien against real property may be enforced by the municipality
or county to the extent the enforcement is consistent with the
laws of this Commonwealth.
(d) Delinquency charge.--Delinquent installments of the
assessments incur interest and penalties in the same manner as
delinquent property taxes.
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(e) Costs and expenses.--A municipality or county may
recover costs and expenses, including attorney fees, in a suit
to collect a delinquent installment of an assessment in the same
manner as in a suit to collect a delinquent property tax.
§ 4308. Collection of assessments.
The governing body of a municipality or county that
establishes a district is required to collect the assessments
for that district using their present tax collection process.
§ 4309. Bonds or notes.
(a) Issuance.--Local financing or owner financing may be
used to issue bonds or notes to finance qualified projects in a
district.
(b) Restrictions.--Bonds or notes issued under this chapter
may not be general obligations of the municipality or county.
(c) Use of proceeds.--Funds generated from the issuance of a
bond may only be used for the following purposes:
(1) Design, engineering and project development costs of
a qualified project.
(2) Infrastructure related to and necessary for a
qualified project.
(3) Purchase and installation cost of any equipment
needed for a qualified project.
(4) Payment of normal and customary issuance and closing
fees of a bond.
(5) Normal and customary administrative fees necessary
to continue operations of the municipal or county financing
agency. The fees can include, but are not limited to, audits
and application fees.
§ 4310. Joint implementation.
Any combination of municipalities or counties may agree to
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jointly implement or administer a program under this chapter.
Section 2. This act shall take effect in 60 days.
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