SB 358 — C-PACE Program.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA MarSESSION 25, 2021 S.B.S 1 SENATE BILL 358 Short Title:

358 SESSION 2021 PRINCIPAL CLERK S D SENATE BILL DRS45196-LMf-13C Short Title:

Rules and Operations of the Senate March 29, 2021 A BILL TO BE ENTITLED AN ACT TO ADVANCE BUILDING RESILIENCY AND UTILITY EFFICIENCY IN NORTH CAROLINA BY AUTHORIZING A STATEWIDE PROGRAM TO UTILIZE ASSESSMENTS TO REPAY NONPUBLIC FINANCING OF COMMERCIAL BUILDING IMPROVEMENTS THAT WILLWILLPROMOTE PROMOTE ECONOMIC DEVELOPMENT, REDUCE UTILITY BILL COSTS, AND HARDEN COMMERCIAL BUILDINGS AGAINST STORM AND FLOOD DAMAGE.

*DRS45196-LMf-13C**S358-v-1* General Assembly Of North Carolina Session 2021 (2) Capital provider.

– The contract in which a property owner agrees to repayrepaya a capital provider for the C-PACE financing provided including, but not limited to, the details of any finance charges, fees, debt servicing, accrual of interest and penalties, and any terms relating to the treatment of prepayment and partial payment, billing, collection, and enforcement of the C-PACE financing.

– A comprehensive document developed by the statewide administrator that describes the C-PACE program and establishes any appropriateguidelines,specifications,underwriting,andapprovalappropriate guidelines,specifications,underwriting,andapproval criteria,and any other application forms consistent with the administration of the program and not otherwise provided for in this Article.

For purposes of this Page 2 DRS45196-LMf-13CSenate Bill 358-First Edition General Assembly Of North Carolina Session 2021 sub-subdivision, the term "renewable energy resource" does not include peat, a fossil fuel, or a nuclear energy resource.

A processing fee assessed to the propertypropertyowner owner whose application for C-PACE financing is approved, which shall be one percent (1%) of DRS45196-LMf-13CSenate Bill 358-First Edition Page 3 General Assembly Of North Carolina Session 2021 the total amount financed, but shall not be more than fifteen thousand dollars ($15,000).

Uponapproval bybytheprogram, theprogram, the program shall finalizethefinalizetheC-PACE C-PACE documentationset andthelocalgovernmentshallandthelocal governmentshall executetheC-PACE assessment and lien with no faith or liability towards the debt.

Enforcement of a delinquent installment shall be in the manner of a deed of trust under Article 2A of Chapter 45 of the General Statutes, except that assessments not yet due may not be accelerated or eliminated bybyforeclosure foreclosure of the past due amounts of the lien.

AnyAnyoutstanding outstanding and delinquent State, local, and federal property taxes or liens at the time of the enforcement action shall be satisfied first, and the C-PACE lien shall be superior to all other liens on the property from the date on which notice of the C-PACE lien is recorded until the lien, interest, penalties, and charges accrued or accruing are paid;

Page 4 DRS45196-LMf-13CSenate Bill 358-First Edition General Assembly Of North Carolina Session 2021 (5) Require anyanycommercial commercialpropertyowner property owner seeking C-PACE financingfinancingto to certify that the applicant:

(6) Record the C-PACE documentation set executed by the local government in the office of the register of deeds in the countycountyin in which the approved property is located.

(2) The local government's intent to participate in the program and to execute and place voluntary C-PACE assessments and liens on properties in its jurisdictional boundaries to allow eligible and voluntary property owners to repayto privatecapitalprovidersthefinancingprivatecapitalprovidersthefinancingforavailablequalifiedprojects. foravailablequalifiedprojects.

Any outstanding or delinquent State, local, or federal taxes or liens at the time of the foreclosure DRS45196-LMf-13CSenate Bill 358-First Edition Page 5 General Assembly Of North Carolina Session 2021 proceeding shall be satisfied first, but the C-PACE lien shall be superior to all other liens on the property from the date on which the notice of the C-PACE lien was recorded until the C-PACE lien, interest, penalties, and charges accrued or accruing are paid;

(2) The lien shall run with the land upon the sale or foreclosure of the property, and that portion of the assessment under the assessment contract that is not yet due maymaynot not be accelerated or eliminated bybyforeclosure foreclosure of a propertypropertytax tax lien.

(3) A provision of a deed of trust, mortgage, or any other agreement between a lienholderand apropertyapropertyownerproviding ownerproviding for the accelerationof anyanypayment payment under a deed of trust, mortgage, or agreement solely as the result of entering into an agreement to finance an assessment is not enforceable;

provided, however,amortgageholderorloanservicermayincreasethemonthlyhowever,amortgageholderorloanservicermayincreasethemonthlyamount amount held in escrow as may be required to annually pay the assessment.

(8) Capitalized interest, in an amount determined bybythe the owner of the commercial property and the third-party providing financing under this Article.

Any outstanding and delinquent State, local, and federal property taxes or Page 6 DRS45196-LMf-13CSenate Bill 358-First Edition General Assembly Of North Carolina Session 2021 liens at the time of the enforcement action shall be satisfied first, and the C-PACE lien shall be superior to all other liens on the property from the date on which the notice of the C-PACE lien is recorded until the C-PACE lien, interest, penalties, and charges accrued or accruing are paid;

(2) Otherwise compel a person who owns property within the local government's jurisdictional boundaries to enter into a written contract to repayrepaythe the financing of a qualified project through special assessments.

If anyanyprovision provision of this Article or its application to anyanyperson person or circumstance is held invalid, then the invalidityinvalidityshall shall not affect other provisions or applications of the Article that can be given effect without the invalid provision or application, and to that end the provisions of this Article shall be severable." SECTION 2.

DRS45196-LMf-13CSenate Bill 358-First Edition Page 7