House Bill 1389-First Edition

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2009

H 1

HOUSE BILL 1389

Short Title: Finance Energy Improvement With Assessments.		(Public)
Sponsors:	Representatives Fisher, Harrison, Rapp (Primary Sponsors); Harrell, Luebke, and Martin.
Referred to:	Energy and Energy Efficiency, if favorable, Finance.

April 13, 2009

A BILL TO BE ENTITLED

AN ACT TO AUTHORIZE ANY CITY TO DESIGNATE AN AREA WITHIN THE CITY WITHIN WHICH DESIGNATED AREA CITY OFFICIALS AND FREE AND WILLING PROPERTY OWNERS MAY ENTER INTO CONTRACTUAL ASSESSMENTS TO FINANCE THE INSTALLATION OF DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES OR ENERGY EFFICIENCY IMPROVEMENTS THAT ARE PERMANENTLY AFFIXED TO REAL PROPERTY.

The General Assembly of North Carolina enacts:

SECTION 1. Chapter 160A of the General Statutes is amended by adding a new Article to read:

"Article 10B.

"Contractual Assessments for Renewable Energy and Energy Efficiency Improvements to Real Property.

"§ 160A‑239.10. Intent; scope of Article.

(a) It is the intent of the General Assembly that this Article should be used to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property.

(b) This Article shall not be used to finance the purchase or installation of appliances that are not permanently fixed to residential, commercial, industrial, or other real property. Assessments may be levied pursuant to this Article only with the free and willing consent of the owner of each lot or parcel on which an assessment is levied at the time the assessment is levied.

"§ 160A‑239.11. Findings.

(a) The Legislature finds all of the following:

(1) Energy conservation efforts, including the promotion of energy efficiency improvements to residential, commercial, industrial, or other real property are necessary to address the issues of green jobs creation, energy independence, and global climate change.

(2) The up-front cost of making residential, commercial, industrial, or other real property more energy efficient prevents many property owners from making those improvements. To make those improvements more affordable and to promote the installation of those improvements, it is necessary to authorize an alternative procedure for authorizing assessments to finance the cost of energy efficiency improvements.

(b) The General Assembly declares that a public purpose will be served by a contractual assessment program that provides the governing body of any city with the authority to finance the installation of distributed generation renewable energy sources and energy efficiency improvements that are permanently fixed to residential, commercial, industrial, or other real property.

"§ 160A‑239.12. Designation of area within city.

(a) The governing body of any city may determine that it would be convenient, advantageous, and in the public interest to designate an area within the city, which may encompass the entire city or a lesser portion, within which authorized city officials and property owners may enter into contractual assessments to finance the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real property pursuant to this Article.

(b) The governing body shall make the determination under subsection (a) of this section by adopting a resolution indicating its intention to do so. The resolution of intention shall include a statement that the city proposes to make contractual assessment financing available to property owners, shall identify the kinds of distributed generation renewable energy sources or energy efficiency improvements that may be financed, shall describe the boundaries of the area within which contractual assessments may be entered into, and shall briefly describe the proposed arrangements for financing the program. The resolution of intention shall state that it is in the public interest to finance the installation of distributed generation renewable energy sources or energy efficiency improvements, or both, under subsection (a) of this section. The resolution shall state that a public hearing should be held at which interested persons may object to or inquire about the proposed program or any of its particulars and shall state the time and place of the hearing. The resolution shall direct an appropriate city official to prepare a report pursuant to G.S. 160A‑239.14 and to enter into consultations with the office of the county finance officer in order to reach agreement on what additional fees, if any, will be charged to the city or county for incorporating the proposed contractual assessments into the assessments of the general taxes of the city or county on real property.

"§ 160A‑239.13. City official may authorize owner to purchase renewable energy and energy efficiency improvements.

Notwithstanding any other provision of this Article, upon the written consent of an authorized city official, the proposed arrangements for financing the program for the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to real property may authorize the property owner to purchase directly the related equipment and materials for the installation of distributed generation renewable energy sources or energy efficiency improvements and to contract directly for the installation of distributed generation renewable energy sources or energy efficiency improvements that are permanently fixed to the property owner's residential, commercial, industrial, or other real property.

"§ 160A‑239.14. Assessment report prepared by city official.

The report required under G.S. 160A‑239.12 shall contain all of the following:

(1) A map showing the boundaries of the territory within which contractual assessments are proposed to be offered.

(2) A draft contract specifying the terms and conditions that would be agreed to by a property owner within the contractual assessment area and the city.

(3) A statement of city policies concerning contractual assessments including all of the following:

a. Identification of the types of distributed generation renewable energy sources or energy efficiency improvements that may be financed through the use of contractual assessments.

b. Identification of a city official authorized to enter into contractual assessments on behalf of the city.

c. A maximum aggregate dollar amount of the contractual assessments.

d. A method for setting requests from property owners for financing through contractual assessments in priority order in the event that requests appear likely to exceed the authorized maximum aggregate dollar amount of the contractual assessments.

(4) A plan for raising a capital amount required to pay for work performed pursuant to contractual assessments. The plan may include amounts to be advanced by the city through funds available to it from any source. The plan may include the sale of bonds under G.S. 160A‑516 or other financing relationship pursuant to G.S. 160A‑239.17. The plan shall include a statement of or method for determining the interest rate and time period during which contracting property owners would pay any assessment. The plan shall provide for any reserve funds. The plan shall provide for the apportionment of all or any portion of the costs incidental to financing, administration, and collection of the contractual assessment program among the consenting property owners and the city.

(5) A report on the results of the consultations with the office of the county finance officer concerning the additional fees, if any, that will be charged to the city or county for incorporating the proposed contractual assessments into the assessments of the general taxes of the city or county on real property, and a plan for financing the payment of those fees.

"§ 160A‑239.15. Notice of public hearing.

A notice of the hearing required under G.S. 160A‑239.12 shall be published in a newspaper having general circulation in the city in which an area is being proposed for a designation under G.S. 160A‑239.12 in the same manner provided by Rule 4(j1) of the Rules of Civil Procedure, Chapter 1A of the General Statutes, for the service of a summons on a party that cannot otherwise be served. The first publication shall occur not later than 20 days before the date of the hearing.

"§ 160A‑239.16. Public hearing.

At the time of the public hearing on the proposed program, the report under G.S. 160A‑239.14 shall be summarized, and the governing board of the city shall afford all persons who are present an opportunity to comment upon, object to, or present evidence with regard to the proposed contractual assessment program, the extent of the area proposed to be included within the program, the terms and conditions of the draft contract, or the proposed financing provisions. At the conclusion of the hearing, the governing board of the city may adopt a resolution confirming the report or may direct its modification in any respect, and thereafter may adopt a resolution confirming the report as modified, or the governing board of the city may abandon the proceedings. The governing board of the city shall not increase the area within which contractual assessments would be offered without providing notice of the proposed increase in area pursuant to G.S. 160A‑239.15. The hearing may be continued from time to time not exceeding a total of 180 days.

"§ 160A‑239.17. Financing of renewable energy and energy efficiency improvements to real property.

A city may issue bonds pursuant to this Article, the principal and interest for which would be repaid by contractual assessments. A city may advance its own funds to finance work to be repaid through contractual assessments, and may from time to time sell bonds to reimburse itself for such advances. A city may enter into a relationship with an underwriter or financial institution that would allow the sequential issuance of a series of bonds, each bond being issued as the need arose to finance work to be repaid through contractual assessments. The interest rate of each bond may be determined by an appropriate index, but shall be fixed at the time each bond is issued. Bond proceeds may be used to establish a reserve fund, and to pay for expenses incidental to the issuance and sale of the bonds. Article 10A of this Chapter shall apply to any bonds issued pursuant to this Article, insofar as that Article is not in conflict with this Article.

"§ 160A‑239.18. Levy of contractual assessments for renewable energy and energy efficiency improvements to real property.

Assessments levied pursuant to this Article, and the interest and any penalties thereon, shall constitute a lien against the lots and parcels of land on which they are made, until they are paid. Article 10A of this Chapter applies to the levy and collection of assessments levied pursuant to this Article, insofar as those provisions are not in conflict with the provisions of this Article, including, but not limited to, the collection of assessments in the same manner and at the same time as the general taxes of the city on real property are payable and any penalties and remedies and lien priorities in the event of delinquency and default.

"§ 160A‑239.19. Recording of contractual assessments for renewable energy and energy efficiency improvements to real property.

The governing board of the city shall direct its clerk to record a notice of the existence and amount of each contractual assessment with the register of deeds of the county in which the lot or parcel is located. The register of deeds shall accept those filings and may charge the clerk a fee for recording those documents pursuant to G.S. 161‑10. The failure of the clerk or register of deeds to perform the filings shall not subject the local agency or any of its officers or employees to civil liability."

SECTION 2. This act becomes effective July 1, 2009.