CHAPTER 588p
ENERGY CONSERVATION REVOLVING LOAN ACCOUNT

      Sec. 32-315. Definitions. For the purposes of sections 32-316 to 32-318, inclusive, and this section:

      (a) "Commissioner" means the Commissioner of Economic and Community Development;

      (b) "Alternative energy device" means a wood-burning stove for space heating and any system or mechanism which uses wood, solar radiation, wind, water or geothermal resources as a source for space heating, water heating, cooling or generation of electrical energy. Such alternative energy device may be a new source or system, a replacement of an existing source or system or a supplement to an existing source or system; and

      (c) "Residential structure" means any building in which at least two-thirds of the usable square footage is used for dwelling purposes.

      (P.A. 92-208, S. 2, 6; P.A. 95-250, S. 1; P.A. 96-211, S. 1, 5, 6.)

      History: P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development with Commissioner and Department of Economic and Community Development.

      Sec. 32-316. Energy conservation revolving loan account. The commissioner shall establish an "energy conservation revolving loan account". Such account shall be used for the purposes of making and guaranteeing loans authorized under section 32-317 and may be used for expenses incurred by the commissioner in the implementation of the program of loans and loan guarantees under said section.

      (P.A. 92-208, S. 3, 6; P.A. 96-211, S. 3, 6.)

      History: (Revisor's note: In 1995 the Revisors editorially replaced the phrase "Such fund shall ..." with "Such account shall ...", for consistency with the reference to the "energy conservation revolving loan account"); P.A. 96-211 substituted reference to Sec. 32-317 for Sec. 32-316, effective July 1, 1996.

      See Sec. 16a-40b re Energy Conservation Loan Fund.

      Sec. 32-317. Energy conservation loan program. (a) The commissioner, acting on behalf of the state, may in his discretion make loans or deferred loans to residents of this state for the purchase and installation in residential structures of insulation, alternative energy devices, energy conservation materials and replacement furnaces and boilers, approved in accordance with regulations to be adopted by the Secretary of the Office of Policy and Management. In the purchase and installation of insulation in new residential structures, only that insulation which exceeds the requirements of the State Building Code shall be eligible for such loans or deferred loans. The commissioner may also make loans or deferred loans to persons in the state residing in dwellings constructed not later than December 31, 1979, and for which the primary source of heating since such date has been electric resistance, for (1) the purchase and installation of a high-efficiency secondary heating system using a source of heat other than electric resistance, (2) the conversion of a primary electric heating system to a high-efficiency system using a source of heat other than electric resistance, or (3) the purchase and installation of a high-efficiency combination heating and cooling system. As used in this subsection, "high-efficiency" means having a seasonal energy efficiency ratio of 11.0 or higher or a heating season performance factor of 7.2 or higher as designated by the American Refrigeration Institute in the Directory of Certified Unitary Air Conditioners, Air Source Heat Pumps and Outdoor Unitary Equipment, as from time to time amended, or an equivalent ratio for a fossil fuel system.

      (b) Except as provided under subsection (c) of this section, any such loan or deferred loan shall be available only for a residential structure containing not more than four dwelling units, shall be not less than four hundred dollars and not more than fifteen thousand dollars per structure and shall be made only to an applicant who submits evidence, satisfactory to the commissioner, that the adjusted gross income of the household member or members who contribute to the support of his household was not in excess of one hundred fifty per cent of the median area income by household size. Repayment of all loans or deferred loans made under this subsection shall be subject to a rate of interest to be determined in accordance with subsection (t) of section 3-20 and such terms and conditions as the commissioner may establish. The State Bond Commission shall establish a range of rates of interest payable on all loans or deferred loans under this subsection and shall apply the range to applicants in accordance with a formula which reflects their income. Such range shall be not less than zero per cent for any applicant in the lowest income class and not more than one per cent above the rate of interest borne by the general obligation bonds of the state last issued prior to the most recent date such range was established for any applicant for whom the adjusted gross income of the household member or members who contribute to the support of his household was at least one hundred fifteen per cent of the median area income by household size.

      (c) The commissioner shall establish a program under which he shall make funds authorized under section 32-318 available for loans or deferred loans under subsection (a) of this section for residential structures containing more than four dwelling units, or for contracts guaranteeing payment of loans provided by private institutions for such structures for the purposes specified under subsection (a) of this section. Any such loan or deferred loan shall be an amount equaling not more than two thousand dollars multiplied by the number of dwelling units in such structure, provided no such loan shall exceed sixty thousand dollars. If the applicant seeks a loan or deferred loan for a structure containing more than thirty dwelling units, he shall include in his application a commitment to make comparable energy improvements of benefit to all dwelling units in the structure in addition to the thirty units which are eligible for the loan or deferred loan. Applications for contracts of guarantee shall be limited to structures containing not more than thirty dwelling units and the amount of the guarantee shall be not more than three thousand dollars for each dwelling unit benefiting from the loan. There shall not be an income eligibility limitation for applicants for such loans, deferred loans or guarantees, but the commissioner shall give preference to applications for loans, deferred loans or guarantees for such structures which are occupied by persons of low or moderate income. Repayment of such loans or deferred loans shall be subject to such rates of interest, terms and conditions as the commissioner shall establish. The state shall have a lien on each property for which a loan, deferred loan or guarantee has been made under this section to ensure compliance with such terms and conditions.

      (d) With respect to all loans or deferred loans under this section, any repayments of principal shall be paid to the State Treasurer for deposit in the energy conservation revolving loan account. The interest applicable to any such loans made shall be paid to the State Treasurer for deposit in the General Fund. In the case of a deferred loan, payments on interest are due and payable but payments on principal may be deferred to a time certain.

      (e) The commissioner shall adopt regulations in accordance with chapter 54, (1) concerning qualifications for such loans or deferred loans, requirements and limitations as to adjustments of terms and conditions of repayment and any additional requirements deemed necessary to carry out the provisions of this section and to assure that those tax-exempt bonds and notes used to fund such loans qualify for exemption from federal income taxation, (2) providing for the maximum feasible availability of such loans or deferred loans for dwelling units owned or occupied by persons of low and moderate income, (3) establishing procedures to inform such persons of the availability of such loans or deferred loans and to encourage and assist them to apply for such loans and (4) providing that (A) the interest payments received from the recipients of loans or deferred loans, less the expenses incurred by the commissioner in the implementation of the program of loans, deferred loans and loan guarantees under this section, and (B) the payments received from electric, electric distribution and gas companies under subsection (f) of this section shall be applied to reimburse the General Fund for interest on the outstanding bonds and notes used to fund such loans or deferred loans.

      (f) Not later than August first, annually, the commissioner shall calculate the difference between (1) the weighted average of the percentage rates of interest payable on all subsidized loans or deferred loans made from the energy conservation loan program authorized under sections 32-315 to 32-318, inclusive, and (2) the average of the percentage rates of interest on any bonds and notes issued pursuant to section 3-20, which have been dedicated to the energy conservation loan program under sections 32-315 to 32-318, inclusive, and used to fund such loans or deferred loans, and multiply such difference by the outstanding amount of all such loans or deferred loans, or such lesser amount as may be required under Section 103(b)(2) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended. The product of such difference and such applicable amount shall not exceed six per cent of the sum of the outstanding principal amount at the end of each fiscal year of all loans or deferred loans made under the energy conservation loan program authorized under sections 32-315 to 32-318, inclusive, and the balance remaining in the energy conservation revolving loan account. Not later than September first, annually, the Department of Public Utility Control shall allocate such product among each electric, electric distribution and gas company having at least seventy-five thousand customers, in accordance with a formula taking into account, without limitation, the average number of residential customers of each company. Not later than October first, annually, each such company shall pay its assessed amount to the commissioner. The commissioner shall pay to the State Treasurer for deposit in the General Fund all such payments from electric, electric distribution and gas companies, and shall adopt procedures to assure that such payments are not used for purposes other than those specifically provided in this section. The department shall include each company's payment as an operating expense of the company for the purposes of rate-making under section 16-19.

      (P.A. 92-208, S. 4, 6; May Sp. Sess. P.A. 92-7, S. 32, 33, 36; P.A. 93-382, S. 17, 69; P.A. 95-217, S. 4; P.A. 97-173, S. 3; P.A. 98-28, S. 106, 117.)

      History: May Sp. Sess. P.A. 92-7 amended Subsec. (c) to clarify that the funds available shall be the funds authorized under Sec. 32-318 and amended Subsec. (f) to clarify that the funds available shall be the funds authorized under Sec. 32-318; P.A. 93-382 deleted former Subsec. (g) re annual reports to general assembly, effective July 1, 1993; P.A. 95-217 amended Subsec. (a) by changing "electricity" to "electric resistance", dividing Subsec. into Subdivs., adding references to installation and "high-efficiency" systems in Subdivs. (1) and (2), and adding Subdiv. (3) re combination system, and defining "high-efficiency"; P.A. 97-173 made deferred loans a form of financial assistance available under program, amended Subsec. (a) to remove requirement that loans made under program be low-cost loans, amended Subsec. (b) to increase maximum amount of assistance available under program from six thousand to fifteen thousand dollars for residential structures containing not more than four dwelling units, amended Subsec. (c) to make a technical change consistent with change in Subsec. (a), to increase maximum amount of financial assistance available under program from one thousand to two thousand dollars per unit for residential structures containing more than four dwelling units, to increase maximum amount of loan from thirty to sixty thousand dollars per structure and to increase maximum amount of guarantee from fifteen hundred to three thousand dollars for loan guarantees in structures containing not more than thirty dwelling units, and amended Subsec. (d) to provide that, for deferred loans, payments on interest are due and payable but payments on principal may be deferred to a time certain; P.A. 98-28 amended Subsecs. (e) and (f) by adding electric distribution companies, effective July 1, 1998.

      Sec. 32-318. Bond authorization. The State Bond Commission shall have the power, from time to time, to authorize the issuance of bonds of the state in one or more series and in principal amounts not exceeding in the aggregate six million dollars. The proceeds of the sale of said bonds shall be used for the purposes of making and guaranteeing loans as provided in section 32-317. All provisions of section 3-20, or the exercise of any right or power granted thereby which are not inconsistent with the provisions of sections 32-315 to 32-317, inclusive, and this section are hereby adopted and shall apply to all bonds authorized by the State Bond Commission pursuant to said sections, and temporary notes in anticipation of the money to be derived from the sale of any such bonds so authorized may be issued in accordance with said section 3-20 and from time to time renewed. Such bonds shall mature at such time or times not exceeding twenty years from their respective dates as may be provided in or pursuant to the resolution or resolutions of the State Bond Commission authorizing such bonds. Said bonds issued pursuant to said sections 32-315 to 32-317, inclusive, and this section shall be general obligations of the state and the full faith and credit of the state of Connecticut are pledged for the payment of the principal of and interest on said bonds as the same become due, and accordingly and as part of the contract of the state with the holders of said bonds, appropriation of all amounts necessary for punctual payment of such principal and interest is hereby made, and the Treasurer shall pay such principal and interest as the same become due.

      (P.A. 92-208, S. 5, 6; May Sp. Sess. P.A. 92-7, S. 34, 36.)

      History: May Sp. Sess. P.A. 92-7 clarified that the bonds available shall be used to make loans under Sec. 32-317.

      Secs. 32-319 to 32-324. Reserved for future use.