PRINTER'S NO. 710
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
635
Session of
2021
INTRODUCED BY YUDICHAK, BOSCOLA, KANE, KEARNEY, MENSCH,
TARTAGLIONE AND ARGALL, MAY 4, 2021
REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT,
MAY 4, 2021
AN ACT
Amending Title 12 (Commerce and Trade) of the Pennsylvania
Consolidated Statutes, in property assessed clean energy
program, further providing for purpose, for definitions, for
establishment of a program, for notice to lien holder
required for participation, for scope of work, for lien and
for collection of assessments.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 4301 of Title 12 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 4301. Purpose.
This chapter authorizes the establishment of a property
assessed clean energy program in the Commonwealth to ensure that
owners of agricultural, commercial and industrial properties can
obtain low-cost, long-term financing for energy efficiency,
indoor air quality, resiliency improvement, water conservation
and renewable energy projects.
Section 2. The definitions of "financial institution,"
"owner financing," "qualified project" and "real property" in
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section 4302 of Title 12 are amended and the section is amended
by adding definitions to read:
§ 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:
* * *
"Financial institution." Any person who in the ordinary
course of business extends credit based on a lien, mortgage or
security interest in [real] qualifying commercial property or an
encumbrance of [real] qualifying commercial property or relies
upon a lien, mortgage or security interest in [real] qualifying
commercial property or an encumbrance of [real] qualifying
commercial property to secure a current, contingent or future
payment obligation. The term includes, but is not limited to,
the following:
(1) A bank, savings association, trust company, credit
union or a subsidiary or affiliate of a bank, savings
association, trust company or credit union.
(2) A person engaged in the mortgage lending business
subject to or exempt from licensing under 7 Pa.C.S. Ch. 61
(relating to mortgage loan industry licensing and consumer
protection).
(3) A person subject to or exempt from licensing under
the act of February 19, 1980 (P.L.15, No.9), known as the
Real Estate Licensing and Registration Act.
(4) A person registered as a management company or unit
investment trust or treated as a business development company
under the Investment Company Act of 1940 (54 Stat. 789, 15
U.S.C. § 80a-1 et seq.) or is excluded from registration
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under the Investment Company Act of 1940.
(5) An insurance company.
(6) A pension or employee health and welfare fund.
(7) An association engaged in construction or the
development or improvement of [real] qualifying commercial
property.
(8) A condominium or cooperative association or planned
community association.
(9) A Federal, State or local agency, authority or an
instrumentality of a government entity that is engaged in the
financing or supports the financing of real estate
development or the purchase or improvement of real estate.
"Indoor air quality project." A project which improves
health or performance outcomes by reducing exposure to indoor
airborne contaminants.
* * *
"Owner financing." A bond provided by a [real] qualifying
commercial property owner or a third-party provider. This term
may include a power purchase agreement.
* * *
"Qualified project." The installation or modification of a
permanent improvement fixed to [real] qualifying commercial
property that is a clean energy project, resiliency improvement
project, indoor air quality project, water conservation project
or alternative energy system, which generates measurable energy
savings or reductions in water usage or improves the rated
performance in indoor air quality 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.
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["Real property." Any agricultural, commercial or industrial
land or building owned by an individual, partnership, limited
liability corporation, corporation or nonprofit. The term does
not include multifamily housing or any residential property.]
"Qualifying commercial property." As follows:
(1) Real property that meets any of the following
criteria:
(i) Any real property that is agricultural,
commercial, industrial or multifamily housing with five
or more units owned by an individual, partnership,
limited liability corporation, corporation or nonprofit.
(ii) A mixed-use real property of any of the
property types under subparagraph (i), whether land or
building.
(2) The term does not include property that is
residential housing with four or fewer units.
"Resiliency improvement." Any fixture, product, system,
equipment, device, material or interacting group of fixtures,
products, systems, equipment, devices or materials intended to
increase resiliency or improve the durability of real property,
including flood mitigation, wind resistance, energy storage,
microgrids and backup power generation or otherwise designated
by a local government entity.
* * *
Section 3. Sections 4303(1)(ii), 4304 introductory paragraph
and (1) and 4305(b) of Title 12 are amended to read:
§ 4303. Establishment of a program.
The following apply:
(1) A municipality with a community or economic
development department or county may establish a property
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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, which shall include, but not be limited to, the
following:
* * *
(ii) Develop criteria and procedures to determine
the eligibility of [real] qualifying commercial property
and owners for participation in a program.
* * *
§ 4304. Notice to lien holder required for participation.
Before [real] qualifying commercial property may be subject
to an assessment under the program and begin a local financing
or an owner financing of a qualified project, the following
shall occur:
(1) Any financial institution holding a lien, mortgage
or security interest in or other encumbrance of the [real]
qualifying commercial property that secures a current, future
or contingent payment obligation must be given written notice
of the [real] qualifying commercial 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.
* * *
§ 4305. Scope of work.
* * *
(b) Verification of completion.--After a qualified project
is completed, the municipality or county shall obtain
verification from the [real] qualifying commercial property
owner and from an independent professional inspector or building
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code official that the qualified project was properly completed.
Section 4. Section 4307(a)(1) and (b) of Title 12 are
amended and the section is amended by adding a subsection to
read:
§ 4307. Lien.
(a) General rule.--An assessment under this chapter,
including past-due amounts and required future payments and any
interest or penalties on the assessment:
(1) shall be a first and prior lien against the [real]
qualifying commercial 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;
* * *
(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] Notwithstanding any other provision of law, the
assessment cannot be accelerated or extinguished until fully
repaid.
* * *
(f) Collection.--A municipality or county shall utilize the
provisions under the act of July 7, 1947 (P.L.1368, No.542),
known as the Real Estate Tax Sale Law, or the act of May 16,
1923 (P.L.207, No.153), referred to as the Municipal Claim and
Tax Lien Law, to collect delinquent installments of assessments.
Section 5. Section 4308(2) of Title 12 is amended to read:
§ 4308. Collection of assessments.
The following apply:
* * *
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(2) The assessment shall be made only upon the [real]
qualifying commercial property whose owner has executed a
written agreement with the governing body agreeing to the
assessment.
* * *
Section 6. This act shall take effect in 60 days.
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