HB 517
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Enrolled
House Bill 517 (Delegate C. Watson)
Environment and Transportation Education, Health, and Environmental Affairs
Clean Energy Loan Program - Remediation and Resiliency
This bill expands the types of projects that may be financed under a clean energy loan
program enacted by a county or municipality, by adding water efficiency projects,
environmental remediation projects, and resiliency projects. The bill also establishes that
projects can be refinanced under a clean energy loan program and replaces a reference to a
property being “improved” through a loan under a program with a reference to a property
being “financed” through a loan under the program. The bill requires that an ordinance or
resolution that establishes a clean energy loan program include a specified provision,
applicable to any project, regarding the repayment term of a loan.
Fiscal Summary
State Effect: The bill is not expected to materially affect State finances.
Local Effect: The bill is not expected to materially affect local government finances since
current programs – while utilizing the county property tax bill for debt service – are
financed through private lenders.
Small Business Effect: Potential meaningful.
Analysis
Bill Summary: The bill makes water efficiency projects, environmental remediation
projects, and resiliency projects eligible to be financed under a clean energy loan program
enacted by a county or municipality and establishes that projects may be refinanced under
a clean energy loan program.
“Environmental remediation project” means a project that is intended to remove
environmental or health hazards, including (1) a project that promotes indoor air and water
quality; (2) asbestos remediation; (3) lead paint removal; and (4) mold remediation.
“Resiliency project” means a project that is intended to increase the capacity of a property
to withstand natural disasters and the effects of climate change, including (1) a flood
mitigation project; (2) a stormwater management project; (3) a project to increase fire or
wind resistance; (4) a project to increase the capacity of a natural system; (5) an inundation
adaptation project; (6) alternative vehicle charging infrastructure; and (7) energy storage.
Eligibility requirements for water efficiency projects, environmental remediation projects,
and resiliency projects must be established by the local ordinance or resolution that
establishes a clean energy loan program.
A local ordinance or resolution establishing a clean energy loan program also must include
a provision, applicable to any project, which requires a loan to be repaid over a term not to
exceed the useful life of the project as determined by the program.
Under provisions relating to loan payments under a program being made through a
surcharge on the property owner’s property tax bill, and an unpaid surcharge being a lien
on the property, a reference to the commercial property being “improved” through a loan
under the program is changed to a reference to the property being “financed” through a
loan under the program.
Current Law: A county or municipality may enact an ordinance or a resolution to
establish a clean energy loan program. The purpose of a program is to provide loans to
residential property owners, including low income residential property owners, and
commercial property owners, to finance energy efficiency projects and renewable energy
projects. A private lender may provide capital for a loan provided to a commercial property
owner under the program. “Commercial property” is defined as real property that is (1) not
designed principally or intended for human habitation or (2) used for human habitation and
is improved by more than four single-family dwelling units.
A clean energy loan program must require a property owner to repay a loan under the
program through a surcharge on the owner’s property tax bill. A person who acquires
property subject to a surcharge assumes the obligation to pay the surcharge. A county or
municipality may not set a surcharge greater than an amount that allows the county or
municipality to recover the costs associated with (1) issuing bonds to finance the loan and
(2) administering the program. However, with respect to commercial property, with the
express consent of any holder of a mortgage or deed of trust on a commercial property that
is to be improved through a loan to the commercial property owner under the program:
HB 517/ Page 2
a county or municipality may collect loan payments owed to a private lender or to
the county or the municipality for a loan to a commercial property owner, and costs
associated with administering the program, through a surcharge on the property
owners’ property tax bill;
an unpaid surcharge is, until paid, a lien on the real property on which it is imposed
from the date it becomes payable; and
specified statutory provisions that apply to a tax lien also apply to a lien created by
an unpaid surcharge.
A local ordinance or resolution that establishes a clean energy loan program must provide
for:
eligibility requirements for (1) energy efficiency improvements and renewable
energy devices and (2) property and property owners; and
loan terms and conditions.
Small Business Effect: The bill may have a meaningful impact on small business property
owners and small business contractors, to the extent the bill increases the flexibility of the
program, including by allowing for water efficiency projects, environmental remediation
projects, or resiliency projects to be undertaken that may otherwise be financed on less
favorable terms or not undertaken at all. The bill’s provision regarding a loan being repaid
over a term not to exceed the useful life of the improvement or project may also benefit
small business property owners and small business contractors to the extent it increases the
viability of financing certain projects in comparison to current local policies regarding the
term of a loan that are more restrictive.
Additional Information
Prior Introductions: SB 722 of 2020 passed the Senate with amendments and was
referred to the House Economic Matters Committee, but no further action was taken.
Designated Cross File: SB 319 (Senators Hester and Elfreth) - Education, Health, and
Environmental Affairs.
Information Source(s): Maryland Energy Administration; Maryland Department of the
Environment; Maryland Department of Transportation; Department of Natural Resources;
Harford, Montgomery, and St. Mary’s counties; Maryland Association of Counties; cities
of Annapolis and Bowie; Maryland Municipal League; Department of Legislative Services
HB 517/ Page 3
Fiscal Note History: First Reader - January 26, 2021
rh/lgc Third Reader - March 19, 2021
Enrolled - April 8, 2021
Analysis by: Scott D. Kennedy Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 517/ Page 4
Statutes affected: Text - First - Clean Energy Loan Program - Remediation and Resiliency: 11-101 Local Government, 11-102 Local Government, 11-103 Local Government, 11-104 Local Government, 11-105 Local Government
Text - Third - Clean Energy Loan Program - Remediation and Resiliency: 11-101 Local Government, 11-102 Local Government, 11-103 Local Government, 11-104 Local Government, 11-105 Local Government
Text - Enrolled -: 11-101 Local Government, 11-102 Local Government, 11-103 Local Government, 11-104 Local Government, 11-105 Local Government