HB 80 — An Act adopting the Municipal Property Assessed Clean Energy Act; authorizing municipalities to establish programs to impose assessments for energy improvements in regions designated by municipalities; imposing fees; and providing for an effective date.

1011 (4) a description of projects that may qualify for assessments;

1112 (5) a plan for ensuring sufficient capital for third-party financing and, 1213 if appropriate, raising capital for municipal financing for energy improvement 1314 projects;

1415 (6) if bonds will be issued to provide capital to finance energy 1516 improvement projects as part of the program as provided by AS 29.55.140, 1617 (A) a maximum aggregate annual dollar amount for municipal 1718 financing repaid by assessments under the program;

1819 (B) if requests appear likely to exceed the authorization 1920 amount, a priority order for ranking a property owner's application for 2021 financing repaid by assessments;

and 2122 (C) a formula for calculating 2223 (i) the interest rate and period during which contracting 2324 owners would pay an assessment;

and 2425 (ii) the maximum amount of an assessment;

2526 (7) a method to calculate a period of assessment consistent with 2627 AS 29.55.105(f);

2728 (8) a description of the application process and eligibility requirements 2829 for financing repaid by assessments under the program;

2930 (9) a method for a property owner applying to participate in the 3031 program to demonstrate the property owner's ability to fulfill financial obligations and 31 pay assessments;

the method must be based on appropriate underwriting factors, 02 including 0203 (A) verification that the property owner 0304 (i) is the legal owner of the benefited property;

0405 (ii) is current on mortgage and property tax payments;

0506 and 0607 (iii) is not insolvent or in bankruptcy proceedings;

and 0708 (B) an appropriate ratio between the amount of the assessment 0809 and the assessed value of the property;

0910 (10) an explanation of the manner in which the municipality shall 1011 assess the property and collect assessments;

1112 (11) the lender notice requirement under AS 29.55.115;

1213 (12) the review requirement under AS 29.55.120;

1314 (13) a description of marketing and participant education services 1415 provided by the municipality for the program;

1516 (14) a description of quality assurance and antifraud measures 1617 instituted by the municipality for the program and the consequence or penalty 1718 prescribed by the municipality for a property owner who participates in the program 1819 but does not complete an energy improvement project as proposed;

and 1920 (15) a description of the insurance requirements, including a 2021 requirement that the property owner have insurance against damage to the energy 2122 improvement project for the life of the assessment.

2223 (b) The municipality shall make the report available for public inspection 2324 (1) on the Internet website of the municipality;

and 2425 (2) at the primary governing offices of the municipality.

2526 Sec.

2627 Before a municipality may enter into a written contract with a record owner of 2728 property to impose an assessment to repay the financing of an energy improvement 2829 project under AS 29.55.100, the property owner shall 2930 (1) give each holder of a mortgage lien on the property at least 30 days' 3031 written notice of the intention of the property owner to participate in a program under 31 AS 29.55.100;

and 02 (2) obtain a written consent from each holder of a mortgage lien on the 0203 property.

0304 Sec.

The record owner of property on which an 0405 assessment is imposed under AS 29.55.105 shall obtain from an independent, third- 0506 party qualified energy auditor the following:

0607 (1) for each proposed energy improvement project, 0708 (A) a review of the energy or emissions baseline conditions, as 0809 appropriate;

and 0910 (B) the projected reduction in energy costs, energy 1011 consumption or demand, or emissions affecting local air quality, as 1112 appropriate;

and 1213 (2) for each completed energy improvement project, verification that 1314 the energy improvement project was properly completed and is operating as intended.

1415 Sec.

The proposed arrangements for 1516 financing an energy improvement project may authorize the property owner to 1617 (1) purchase directly the related equipment and materials for the 1718 energy improvement project;

and 1819 (2) contract directly, including through lease, a power purchase 1920 agreement, or other service contract, for the energy improvement project.

2021 Sec.

(a) A municipality that 2122 authorizes financing through assessments under AS 29.55.105 shall file written notice 2223 of each assessment in the property records of the recording district in which the 2324 property is located.

2425 (b) The notice under (a) of this section must contain 2526 (1) the amount of the assessment;

2627 (2) the legal description of the property;

2728 (3) the name of each property owner;

and 2829 (4) a reference to the statutory assessment lien provided under 2930 AS 29.55.135.

3031 Sec.

(a) Assessments under AS 29.55.105 and any interest or 31 penalties on the assessments are liens on the property assessed and are prior and 02 paramount to all liens except municipal tax liens and special assessments.

Assessment 0203 liens may be enforced as provided in AS 29.45.320 - 29.45.470 for enforcement of 0304 property tax liens.

0405 (b) Assessment liens run with the land, and that portion of the assessment 0506 under the assessment contract that has not yet become due is not eliminated by 0607 foreclosure of a property tax lien.

0708 (c) Penalties and interest may be added to delinquent installments of the 0809 assessments in the same manner as provided in AS 29.45.250.

0910 (d) A municipality may recover costs and expenses, including attorney fees, in 1011 a suit to collect a delinquent installment of an assessment in the same manner as in a 1112 suit to collect a delinquent property tax.

1213 Sec.

(a) A municipality may issue bonds or notes 1314 to finance energy improvement projects subject to assessment under AS 29.55.105.

1415 (b) Bonds or notes issued under this section may not be general obligations of 1516 the municipality.

The bonds or notes must be secured by one or more of the following, 1617 as provided by the governing body of the municipality in the resolution or ordinance 1718 approving the bonds or notes:

1819 (1) payments of assessments on benefited property in one or more 1920 specified regions designated under AS 29.55.100;

2021 (2) reserves established by the municipality from grants, bonds, or net 2122 proceeds or other lawfully available funds;

2223 (3) municipal bond insurance, lines of credit, public or private 2324 guaranties, standby bond purchase agreements, collateral assignments, mortgages, or 2425 any other available means of providing credit support or liquidity;

and 2526 (4) any other funds lawfully available for purposes consistent with 2627 AS 29.55.100 - 29.55.165.

2728 (c) A municipal pledge of assessments, funds, or contractual rights in 2829 connection with the issuance of bonds or notes by the municipality under this section 2930 is a first lien on the assessments, funds, or contractual rights pledged in favor of the 3031 person to whom the pledge is given, without further action by the municipality.

The 31 lien is valid and binding against any other person, with or without notice.

02 (d) Bonds or notes issued under this section must further one or more of the 0203 following essential public and governmental purposes:

0304 (1) improvement of the reliability of local electrical systems;

0405 (2) reduction of energy costs;

0506 (3) reduction of energy demand on local utilities;

0607 (4) reduction of emissions affecting local air quality;

0708 (5) economic stimulation and development;

0809 (6) enhancement of property values;

0910 (7) enhancement of employment opportunities.

1011 Sec.

A municipality may enter into an 1112 agreement with 1213 (1) a third party to administer a program under AS 29.55.100;

1314 (2) one or more municipalities to jointly implement or administer jointly a 1415 program under AS 29.55.100;

if two or more municipalities jointly implement a 1516 program, a single public hearing held jointly by the cooperating municipalities is 1617 sufficient to satisfy the requirement of AS 29.55.100(b)(3).

1718 Sec.

A municipality that establishes a region under 1819 AS 29.55.100 may not make the issuance of a permit, license, or other authorization 1920 from the municipality to a person who owns property in the region contingent on the 2021 person entering into a written contract to repay the financing of an energy 2122 improvement project through assessments under AS 29.55.105, or otherwise compel a 2223 person who owns property in the region to enter into a written contract to repay the 2324 financing of an energy improvement project through assessments under AS 29.55.105.

2425 Sec.

AS 29.55.100 - 29.55.165 apply to home rule and 2526 general law municipalities.

2627 Sec.

In AS 29.55.100 - 29.55.165, 2728 (1) "mortgage" has the meaning given in AS 13.06.050;

2829 (2) "program" means a program established under AS 29.55.100.

2930 Sec.

AS 29.55.100 - 29.55.165 may be cited as the 3031 Municipal Property Assessed Clean Energy Act.

31 * Sec.