PA 17-201—HB 7208
Energy and Technology Committee
AN ACT CONCERNING THE COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY PROGRAM
SUMMARY: This act makes several changes in the Connecticut Green Bank's Commercial Property Assessed Clean Energy Program (C-PACE), which finances energy efficient or renewable energy improvements on certain commercial properties in participating municipalities. The property owner repays the cost of the improvements through an assessment on the property, backed by a lien. The act:
1. expands the purposes for which C-PACE financing may be provided;
2. allows participating third-party capital providers to provide leases and power purchase agreements;
3. designates the program's liens “benefit assessment liens”;
4. specifies that foreclosures on the liens are limited to late assessment payments and that liens for payments that will become due in the future survive the foreclosure;
5. specifies that when a property with a benefit assessment lien is subject to a property tax foreclosure or levy and sale, the lien for any late payments will be extinguished but the lien for payments due in the future will remain with the property; and
6. makes various minor, technical, and conforming changes.
EFFECTIVE DATE: October 1, 2017
C-PACE FINANCING PURPOSES
The law allows the C-PACE program to finance “energy improvements,” which include, among other things, the renovation or retrofitting of qualifying property to reduce energy consumption. The act expands this to include any improvement, renovation, or retrofitting to reduce energy consumption or improve energy efficiency.
THIRD-PARTY CAPITAL PROVIDERS
Prior law allowed third-party capital providers participating in C-PACE to provide loans to property owners for energy improvements. The act broadens this authorization to allow the providers to also provide other forms of financing, leases, and power purchase agreements (PPAs). (In general, PPAs are contracts in which a third-party developer owns, operates, and maintains a renewable energy system and a host customer agrees to place the system on its property and purchase its output for a predetermined period.)
BENEFIT ASSESSMENT LIENS AND FORECLOSURES
The act terms the liens created under C-PACE “benefit assessment liens” and requires the liens (presumably the assessments the liens secure) to be paid in installments. Prior law referred to installment payments only when financing agreements provided for benefit assessments.
By law, if assessments are paid in installments and an installment is late, the lien may be foreclosed to the extent of any unpaid installments plus related penalties, interest, and fees. If the lien is foreclosed, the lien survives the foreclosure judgment to the extent of any unpaid installments secured by the lien that were not subject to the judgment. The act specifies that these “unpaid installments” are those that are due and owing (i.e., late payments) and that the (1) lien is extinguished only with regard to installments that were due and owing on the judgment date and (2) unpaid installments that survive are those due after the judgment date.
Property Tax Foreclosures
By law, C-PACE benefit assessment liens take precedence over all other liens or encumbrances, except municipal property tax liens. The act specifies that when a property subject to a municipal property tax lien is foreclosed or enforced by levy and sale, the benefit assessment lien for any payments due and owing on the date of the judgment or levy and sale is extinguished. However, the lien for payments due after the judgment or levy and sale survives.