Bill Summary – FastDemocracy

Enrolled Copy                                                                             H.B. 116
                            COMMERCIAL PROPERTY ASSESSED
                                 CLEAN ENERGY ACT AMENDMENTS
                                           2024 GENERAL SESSION
                                                STATE OF UTAH
                                    Chief Sponsor: Christine F. Watkins Senate Sponsor: David P. Hinkins
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  LONG TITLE
  General Description:
      This bill modifies provisions of the Commercial Property Assessed Clean Energy Act.
  Highlighted Provisions:
      This bill:
      ▸ modifies the definition of "renewable energy system," for purposes of the Commercial
  Property Assessed Clean Energy Act, to include a system that provides energy outside the
  energy assessment area if the system is a biofuel system; and
      ▸ makes technical changes.
  Money Appropriated in this Bill:
      None
  Other Special Clauses:
      None
  Utah Code Sections Affected:
  AMENDS:
      11-42a-102, as last amended by Laws of Utah 2023, Chapter 16
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  Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 11-42a-102 is amended to read:
        11-42a-102 . Definitions.
  (1) "Air quality standards" means that a vehicle's emissions are equal to or cleaner than the
      standards established in bin 4 Table S04-1, of 40 C.F.R. 86.1811-04(c)(6).
  (2) (a) "Assessment" means the assessment that a local entity or the C-PACE district
      levies on private property under this chapter to cover the costs of an energy
     H.B. 116                                                                                Enrolled Copy
       efficiency upgrade, a renewable energy system, or an electric vehicle charging
       infrastructure.
       (b) "Assessment" does not constitute a property tax but shares the same priority lien as a
            property tax.
   (3) "Assessment fund" means a special fund that a local entity establishes under Section
       11-42a-206.
   (4) "Benefitted property" means private property within an energy assessment area that
       directly benefits from improvements.
   (5) "Bond" means an assessment bond and a refunding assessment bond.
   (6) (a) "Commercial or industrial real property" means private real property used
       directly or indirectly or held for one of the following purposes or activities,
       regardless of whether the purpose or activity is for profit:
            (i) commercial;
            (ii) mining;
            (iii) agricultural;
            (iv) industrial;
            (v) manufacturing;
            (vi) trade;
            (vii) professional;
            (viii) a private or public club;
            (ix) a lodge;
            (x) a business; or
            (xi) a similar purpose.
       (b) "Commercial or industrial real property" includes:
            (i) private real property that is used as or held for dwelling purposes and contains:
                (A) more than four rental units; or
                (B) one or more owner-occupied or rental condominium units affiliated with a
                     hotel; and
            (ii) real property owned by:
                (A) the military installation development authority, created in Section 63H-1-201;
                     or
                (B) the Utah Inland Port Authority, created in Section 11-58-201.
   (7) "Contract price" means:
       (a) up to 100% of the cost of installing, acquiring, refinancing, or reimbursing for an
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     Enrolled Copy                                                                                   H.B. 116
          improvement, as determined by the owner of the property benefitting from the
          improvement; or
      (b) the amount payable to one or more contractors for the assessment, design,
          engineering, inspection, and construction of an improvement.
  (8) "C-PACE" means commercial property assessed clean energy.
  (9) "C-PACE district" means the statewide authority established in Section 11-42a-106 to
      implement the C-PACE Act in collaboration with governing bodies, under the direction
      of OED.
  (10) "Electric vehicle charging infrastructure" means equipment that is:
      (a) permanently affixed to commercial or industrial real property; and
      (b) designed to deliver electric energy to a qualifying electric vehicle or a qualifying
          plug-in hybrid vehicle.
  (11) "Energy assessment area" means an area:
      (a) within the jurisdictional boundaries of a local entity that approves an energy
          assessment area or, if the C-PACE district or a state interlocal entity levies the
          assessment, the C-PACE district or the state interlocal entity;
      (b) containing only the commercial or industrial real property of owners who have
          voluntarily consented to an assessment under this chapter for the purpose of
          financing the costs of improvements that benefit property within the energy
          assessment area; and
      (c) in which the proposed benefitted properties in the area are:
          (i) contiguous; or
          (ii) located on one or more contiguous or adjacent tracts of land that would be
              contiguous or adjacent property but for an intervening right-of-way, including a
              sidewalk, street, road, fixed guideway, or waterway.
  (12) "Energy assessment bond" means a bond:
      (a) issued under Section 11-42a-401; and
      (b) payable in part or in whole from assessments levied in an energy assessment area.
  (13) "Energy assessment lien" means a lien on property within an energy assessment area
      that arises from the levy of an assessment in accordance with Section 11-42a-301.
  (14) "Energy assessment ordinance" means an ordinance that a local entity adopts under
      Section 11-42a-201 that:
      (a) designates an energy assessment area;
      (b) levies an assessment on benefitted property within the energy assessment area; and
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      H.B. 116                                                                                 Enrolled Copy
       (c) if applicable, authorizes the issuance of energy assessment bonds.
   (15) "Energy assessment resolution" means one or more resolutions adopted by a local
       entity under Section 11-42a-201 that:
       (a) designates an energy assessment area;
       (b) levies an assessment on benefitted property within the energy assessment area; and
       (c) if applicable, authorizes the issuance of energy assessment bonds.
   (16) "Energy efficiency upgrade" means an improvement that is:
       (a) permanently affixed to commercial or industrial real property; and
       (b) designed to reduce energy or water consumption, including:
            (i) insulation in:
                (A) a wall, roof, floor, or foundation; or
                (B) a heating and cooling distribution system;
            (ii) a window or door, including:
                (A) a storm window or door;
                (B) a multiglazed window or door;
                (C) a heat-absorbing window or door;
                (D) a heat-reflective glazed and coated window or door;
                (E) additional window or door glazing;
                (F) a window or door with reduced glass area; or
                (G) other window or door modifications;
            (iii) an automatic energy control system;
            (iv) in a building or a central plant, a heating, ventilation, or air conditioning and
                distribution system;
            (v) caulk or weatherstripping;
            (vi) a light fixture that does not increase the overall illumination of a building, unless
                an increase is necessary to conform with the applicable building code;
            (vii) an energy recovery system;
            (viii) a daylighting system;
            (ix) measures to reduce the consumption of water, through conservation or more
                efficient use of water, including installation of:
                (A) low-flow toilets and showerheads;
                (B) timer or timing systems for a hot water heater; or
                (C) rain catchment systems;
            (x) a modified, installed, or remodeled fixture that is approved as a utility cost-saving
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      Enrolled Copy                                                                                     H.B. 116
               measure by the governing body or executive of a local entity;
          (xi) measures or other improvements to effect seismic upgrades;
          (xii) structures, measures, or other improvements to provide automated parking or
               parking that reduces land use;
          (xiii) the extension of an existing natural gas distribution company line;
          (xiv) an energy efficient elevator, escalator, or other vertical transport device;
          (xv) any other improvement that the governing body or executive of a local entity
               approves as an energy efficiency upgrade; or
          (xvi) any improvement that relates physically or functionally to any of the
               improvements listed in Subsections (16)(b)(i) through (xv).
  (17) "Energy system" means a product, system, device, or interacting group of devices that:
      (a) produces or stores energy; and
      (b) is permanently affixed to commercial or industrial real property not located in the
          certified service area of a distribution electrical cooperative, as defined in Section
          54-2-1.
  [(17)] (18) "Governing body" means:
      (a) for a county, city, town, or metro township, the legislative body of the county, city,
          town, or metro township;
      (b) for a special district, the board of trustees of the special district;
      (c) for a special service district:
          (i) if no administrative control board has been appointed under Section 17D-1-301,
               the legislative body of the county, city, town, or metro township that established
               the special service district; or
          (ii) if an administrative control board has been appointed under Section 17D-1-301,
               the administrative control board of the special service district;
      (d) for the military installation development authority created in Section 63H-1-201, the
          board, as that term is defined in Section 63H-1-102; and
      (e) for the Utah Inland Port Authority, created in Section 11-58-201, the board, as
          defined in Section 11-58-102.
  [(18)] (19) "Improvement" means a publicly or privately owned energy efficiency upgrade,
      renewable energy system, or electric vehicle charging infrastructure that:
      (a) a property owner has requested; or
      (b) has been or is being installed on a property for the benefit of the property owner.
  [(19)] (20) "Incidental refunding costs" means any costs of issuing a refunding assessment
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      H.B. 116                                                                                     Enrolled Copy
       bond and calling, retiring, or paying prior bonds, including:
       (a) legal and accounting fees;
       (b) charges of financial advisors, escrow agents, certified public accountant verification
            entities, and trustees;
       (c) underwriting discount costs, printing costs, and the costs of giving notice;
       (d) any premium necessary in the calling or retiring of prior bonds;
       (e) fees to be paid to the local entity to issue the refunding assessment bond and to
            refund the outstanding prior bonds;
       (f) any other costs that the governing body determines are necessary and proper to incur
            in connection with the issuance of a refunding assessment bond; and
       (g) any interest on the prior bonds that is required to be paid in connection with the
            issuance of the refunding assessment bond.
   [(20)] (21) "Installment payment date" means the date on which an installment payment of
       an assessment is payable.
   [(21)] (22) "Jurisdictional boundaries" means:
       (a) for the C-PACE district or any state interlocal entity, the boundaries of the state; and
       (b) for each local entity, the boundaries of the local entity.
   [(22)] (23) (a) "Local entity" means:
            (i) a county, city, town, or metro township;
            (ii) a special service district, a special district, or an interlocal entity as that term is
                defined in Section 11-13-103;
            (iii) a state interlocal entity;
            (iv) the military installation development authority, created in Section 63H-1-201;
            (v) the Utah Inland Port Authority, created in Section 11-58-201; or
            (vi) any political subdivision of the state.
       (b) "Local entity" includes the C-PACE district solely in connection with:
            (i) the designation of an energy assessment area;
            (ii) the levying of an assessment; and
            (iii) the assignment of an energy assessment lien to a third-party lender under Section
                11-42a-302.
   [(23)] (24) "Local entity obligations" means energy assessment bonds and refunding
       assessment bonds that a local entity issues.
   [(24)] (25) "OED" means the Office of Energy Development created in Section 79-6-401.
   [(25)] (26) "OEM vehicle" means the same as that term is defined in Section 19-1-402.
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      Enrolled Copy                                                                                      H.B. 116
  [(26)] (27) "Overhead costs" means the actual costs incurred or the estimated costs to be
      incurred in connection with an energy assessment area, including:
      (a) appraisals, legal fees, filing fees, facilitation fees, and financial advisory charges;
      (b) underwriting fees, placement fees, escrow fees, trustee fees, and paying agent fees;
      (c) publishing and mailing costs;
      (d) costs of levying an assessment;
      (e) recording costs; and
      (f) all other incidental costs.
  [(27)] (28) "Parameters resolution" means a resolution or ordinance that a local entity adopts
      in accordance with Section 11-42a-201.
  [(28)] (29) "Prior bonds" means the energy assessment bonds refunded in part or in whole
      by a refunding assessment bond.
  [(29)] (30) "Prior energy assessment ordinance" means the ordinance levying the
      assessments from which the prior bonds are payable.
  [(30)] (31) "Prior energy assessment resolution" means the resolution levying the
      assessments from which the prior bonds are payable.
  [(31)] (32) "Property" includes real property and any interest in real property, including
      water rights and leasehold rights.
  [(32)] (33) "Public electrical utility" means a large-scale electric utility as that term is
      defined in Section 54-2-1.
  [(33)] (34) "Qualifying electric vehicle" means a vehicle that:
      (a) meets air quality standards;
      (b) is not fueled by natural gas;
      (c) draws propulsion energy from a battery with at least 10 kilowatt hours of capacity;
          and
      (d) is an OEM vehicle except that the vehicle is fueled by a fuel described in Subsection
          (33)(c).
  [(34)] (35) "Qualifying plug-in hybrid vehicle" means a vehicle that:
      (a) meets air quality standards;
      (b) is not fueled by natural gas or propane;
      (c) has a battery capacity that meets or exceeds the battery capacity described in
          Subsection 30D(b)(3), Internal Revenue Code; and
      (d) is fueled by a combination of electricity and:
          (i) diesel fuel;
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      H.B. 116                                                                                 Enrolled Copy
            (ii) gasoline; or
            (iii) a mixture of gasoline and ethanol.
   [(35)] (36) "Reduced payment obligation" means the full obligation of an owner of property
       within an energy assessment area to pay an assessment levied on the property after the
       local entity has reduced the assessment because of the issuance of a refunding
       assessment bond, in accordance with Section 11-42a-403.
   [(36)] (37) "Refunding assessment bond" means an assessment bond that a local entity
       issues under Section 11-42a-403 to refund, in part or in whole, energy assessment bonds.
   [(37)] (38) (a) "Renewable energy system" means [a product, system, device, or
       interacting group of devices that is permanently affixed to commercial or industrial
       real property not located in the certified service area of a distribution electrical
       cooperative, as that term is defined in Section 54-2-1, and] an energy system that:
            (i) produces energy from renewable resources, including:
                (A) a photovoltaic system;
                (B) a solar thermal system;
                (C) a wind system;
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