AN ACT CONCERNING GREEN MORTGAGES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2008) (a) As used in this section:

(1) "Green mortgage loan" means any loan made to fund: (A) The purchase or construction of a new energy efficient residential property where the loan permits the lender to increase the residential property's appraised value by the amount of the estimated energy savings and allows the buyer to finance energy efficient upgrades and pay for them as part of the mortgage cost; or (B) the purchase of a residential property and the making of energy efficient renovations or improvements thereto, or the making of energy efficient renovations or improvements to an already purchased residential property, where the loan permits the homeowner to finance the energy-efficient upgrades up to a certain percentage of the value of the home.

(2) "Energy efficient residential property" means those residential properties that meet the qualifications and eligibility requirements for energy efficient mortgages offered by federal mortgage finance lenders such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, the Department of Housing and Urban Development or the Department of Veterans' Affairs.

(3) "Energy efficient renovation or improvements" or "energy efficient upgrades" means those renovations, upgrades or improvements that meet the qualifications and eligibility requirements for energy improvement mortgages offered by federal mortgage finance lenders such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, the Department of Housing and Urban Development or the Department of Veterans' Affairs.

(4) "Lender" means any person who originates a loan to fund the purchase or construction of a new residential property, or to fund the purchase of a residential property and the making of renovations or improvements thereto, or to fund renovations or improvements to a residential property.

(5) "Commissioner" means the Banking Commissioner.

(b) By July 1, 2009, a lender shall establish and implement a policy and program designed to provide incentives for the construction and purchase of energy efficient residential properties, and for energy efficient renovations, improvements or upgrades to residential properties.

(c) By July 1, 2010: (1) No less than ten per cent of all loans made by lenders to fund the purchase or construction of a new residential property shall be green mortgage loans; (2) no less than ten per cent of all loans made by lenders to fund the purchase of a residential property and the making of renovations or improvements thereto shall be green mortgage loans; and (3) no less than ten per cent of all loans made by lenders to fund renovations or improvements to a residential property shall be green mortgage loans.

(d) The commissioner may raise the percentages set forth in subsection (c) of this section from time to time as the commissioner deems necessary. The commissioner may audit lenders for compliance with this section, and shall report, in accordance with section 11-4a of the general statutes, biannually, on the level of lender compliance to the joint standing committee of the General Assembly having cognizance of matters relating to banking.

Statement of Purpose:

To require lenders to provide incentives for the construction and purchase of energy efficient residential properties, and for energy efficient renovations, improvements or upgrades to residential properties through the provision of green mortgages.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]