SB-0375, As Passed Senate, October 3, 2017

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 375

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2010 PA 270, entitled

 

"Property assessed clean energy act,"

 

by amending sections 3 and 9 (MCL 460.933 and 460.939).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. As used in this act:

 

     (a) "Anaerobic digester" means a device for optimizing the

 

anaerobic digestion of biomass for the purpose of recovering

 

biofuel for energy production.

 

     (b) "Anaerobic digester energy system" means an anaerobic

 

digester and the devices used to generate electricity or heat from

 

biogas produced by the anaerobic digester or to store the biogas

 

for the future generation of electricity or heat.

 

     (c) (a) "District" means a district created under a property

 

assessed clean energy program by a local unit of government that


lies within the local unit of government's jurisdictional

 

boundaries. A local unit of government may create more than 1

 

district under the program, and districts may be separate,

 

overlapping, or coterminous.

 

     (d) (b) "Energy efficiency improvement" means equipment,

 

devices, or materials intended to decrease energy consumption,

 

including, but not limited to, all of the following:

 

     (i) Insulation in walls, roofs, floors, foundations, or

 

heating and cooling distribution systems.

 

     (ii) Storm windows and doors; multi-glazed windows and doors;

 

heat-absorbing or heat-reflective glazed and coated window and door

 

systems; and additional glazing, reductions in glass area, and

 

other window and door system modifications that reduce energy

 

consumption.

 

     (iii) Automated energy control systems.

 

     (iv) Heating, ventilating, or air-conditioning and

 

distribution system modifications or replacements.

 

     (v) Caulking, weather-stripping, and air sealing.

 

     (vi) Replacement or modification of lighting fixtures to

 

reduce the energy use of the lighting system.

 

     (vii) Energy recovery systems.

 

     (viii) Day lighting systems.

 

     (ix) Installation or upgrade of electrical wiring or outlets

 

to charge a motor vehicle that is fully or partially powered by

 

electricity.

 

     (x) Measures to reduce the usage of water or increases

 

increase the efficiency of water usage.


     (xi) Any other installation or modification of equipment,

 

devices, or materials approved as a utility cost-savings measure by

 

the governing body.

 

     (e) (c) "Energy project" means the installation or

 

modification of an energy efficiency improvement or the

 

acquisition, installation, or improvement of a renewable energy

 

system or anaerobic digester energy system.

 

     (f) (d) "Governing body" means the county board of

 

commissioners of a county, the township board of a township, or the

 

council or other similar elected legislative body of a city or

 

village.

 

     (g) (e) "Local unit of government" means a county, township,

 

city, or village.

 

     (h) (f) "Person" means an individual, firm, partnership,

 

association, corporation, unincorporated joint venture, or trust,

 

organized, permitted, or existing under the laws of this state or

 

any other state, including a federal corporation, or a combination

 

thereof. However, person does not include a local unit of

 

government.

 

     (i) (g) "Property" means privately owned commercial or

 

industrial real property located within the local unit of

 

government.

 

     (j) (h) "Property assessed clean energy program" or "program"

 

means a program as described in section 5(2).

 

     (k) (i) "Record owner" means the person or persons possessed

 

of the most recent fee title or land contract vendee's interest in

 

property as shown by the records of the county register of deeds.


     (l) (j) "Renewable energy resource" means a resource that

 

naturally replenishes over a human, not a geological, time frame

 

and that is ultimately derived from solar power, water power, or

 

wind power. Renewable energy resource does not include petroleum,

 

nuclear, natural gas, or coal. A renewable energy resource comes

 

from the sun or from thermal inertia of the earth and minimizes the

 

output of toxic material in the conversion of the energy and

 

includes, but is not limited to, all of the following:

 

     (i) Biomass.

 

     (ii) Solar and solar thermal energy.

 

     (iii) Wind energy.

 

     (iv) Geothermal energy.

 

     (v) Methane gas captured from a landfill.

 

     (m) (k) "Renewable energy system" means a fixture, product,

 

device, or interacting group of fixtures, products, or devices on

 

the customer's side of the meter that use 1 or more renewable

 

energy resources to generate electricity. Renewable energy system

 

includes a biomass stove but does not include an incinerator or

 

digester.

 

     Sec. 9. (1) The report on the proposed program required under

 

section 7 shall include all of the following:

 

     (a) A form of contract between the local unit of government

 

and record owner governing the terms and conditions of financing

 

and assessment under the program.

 

     (b) Identification of an official authorized to enter into a

 

program contract on behalf of the local unit of government.

 

     (c) A maximum aggregate annual dollar amount for all financing


to be provided by the local unit of government under the program.

 

     (d) An application process and eligibility requirements for

 

financing energy projects under the program.

 

     (e) A method for determining interest rates on assessment

 

installments, repayment periods, and the maximum amount of an

 

assessment.

 

     (f) Explanation of how assessments will be made and collected

 

consistent with section 13(2).

 

     (g) A plan for raising capital to finance improvements under

 

the program. The plan may include any of the following:

 

     (i) The sale of bonds or notes, subject to the revised

 

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

 

     (ii) Amounts to be advanced by the local unit of government

 

through funds available to it from any other source.

 

     (iii) Owner-arranged financing from a commercial lender. Under

 

owner-arranged financing, the local unit of government may impose

 

an assessment pursuant to section 11 and forward payments to the

 

commercial lender or the record owner may pay the commercial lender

 

directly.

 

     (h) Information regarding all of the following, to the extent

 

known, or procedures to determine the following in the future:

 

     (i) Any reserve fund or funds to be used as security for bonds

 

or notes described in subdivision (g).

 

     (ii) Any application, administration, or other program fees to

 

be charged to record owners participating in the program that will

 

be used to finance costs incurred by the local unit of government

 

as a result of the program.


     (i) A requirement that the term of an assessment not exceed

 

the useful life of the energy project paid for by the assessment.

 

     (j) A requirement for an appropriate ratio of the amount of

 

the assessment to the assessed value of the property.

 

     (k) A requirement that the record owner of property subject to

 

a mortgage obtain written consent from the mortgage holder before

 

participating in the program.

 

     (l) Provisions for marketing and participant education.

 

     (m) Provisions for adequate debt service reserve fund.

 

     (n) Quality assurance and antifraud measures.

 

     (o) A requirement that a baseline energy audit be conducted

 

before an energy project is undertaken, to establish future energy

 

savings. After the energy project is completed, the local unit of

 

government shall obtain verification that the renewable energy

 

system, anaerobic digester energy system, or energy efficiency

 

improvement was properly installed and is operating as intended.

 

     (p) For an energy project financed with more than $250,000.00

 

in assessments, both of the following:

 

     (i) A requirement for ongoing measurements that establish the

 

savings realized by the record owner from the energy project.

 

     (ii) A requirement that, in the contract for installation of

 

the energy project, the contractor guarantee to the record owner

 

that the energy project will achieve a savings-to-investment ratio

 

greater than 1 and agree to pay the record owner, on an annual

 

basis, any shortfall in savings below this level.

 

     (2) The local unit of government shall make the report

 

available for review on the local unit of government's website or


at the office of the clerk or the official authorized to enter

 

contracts on behalf of the local unit of government under the

 

property assessed clean energy program.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.