October 10, 2023, Introduced by Reps. Hood, Rheingans, Morgan, Byrnes and Brixie and referred
to the Committee on Energy, Communications, and Technology.
A bill to amend 2010 PA 270, entitled
"Property assessed clean energy act,"
(MCL 460.931 to 460.949) by amending the title, by designating
section 1 as part 1 and sections 3 to 19 as part 2, and by adding
part 3.
2 An act to authorize local units of government to adopt
3 property assessed clean energy assessment programs and to create
TMV H02420'23
1 districts to promote the use of renewable energy systems, and
2 energy efficiency improvements, water usage and sewage treatment
3 improvements, air quality improvements, and environmental hazard
4 projects by owners of certain real property owners; to provide for
5 the financing of such programs through voluntary property
6 assessments, commercial lending, and other means; to authorize a
7 local unit units of government to issue bonds, notes, and other
8 evidences of indebtedness and to pay the cost of renewable energy
9 systems, and energy efficiency improvements, water usage and sewage
10 treatment improvements, air quality improvements, and environmental
11 hazard projects from the proceeds thereof; to provide for the
12 repayment of bonds, notes, and other evidences of indebtedness; to
13 authorize certain fees; to prescribe the powers and duties of
14 certain governmental officers and entities; and to provide for
15 remedies.
16 PART 1
18 PART 2
20 PART 3
22 Sec. 20. As used in this part:
23 (a) "Administrator" means a person authorized by a local unit
24 of government under section 28(1) to administer a property assessed
25 clean energy program on behalf of and at the discretion of the
26 local unit of government.
27 (b) "Anaerobic digester" means a facility that uses
28 microorganisms to break down biodegradable material in the absence
29 of oxygen, producing methane and an organic product.
TMV H02420'23
1 (c) "Anaerobic digester energy system" means an anaerobic
2 digester and the devices used to generate electricity or heat from
3 methane produced by the anaerobic digester or to store the methane
4 for the future generation of electricity or heat.
5 (d) "District" means a district created by a local unit of
6 government under a property assessed clean energy program that lies
7 within the local unit of government's jurisdictional boundaries. A
8 local unit of government may create more than 1 district under the
9 program, and districts may be separate, overlapping, or
10 coterminous.
11 (e) "Energy efficiency improvement" means the acquisition,
12 installation, replacement, or modification of equipment, devices,
13 or materials intended to decrease energy consumption, including,
14 but not limited to, any of the following:
15 (i) Insulation in walls, roofs, floors, foundations, or heating
16 and cooling distribution systems.
17 (ii) Storm windows and doors; multi-glazed windows and doors;
18 heat-absorbing or heat-reflective glazed and coated window and door
19 systems; and additional glazing, reductions in glass area, and
20 other window and door system modifications that reduce energy
21 consumption.
22 (iii) Automated energy control systems.
23 (iv) Heating, ventilating, or air-conditioning and distribution
24 systems.
25 (v) Caulking, weather-stripping, or air sealing.
26 (vi) Lighting fixtures.
27 (vii) Energy recovery systems.
28 (viii) Day lighting systems.
29 (ix) Electrical wiring or outlets to charge a motor vehicle
TMV H02420'23
1 that is fully or partially powered by electricity.
2 (x) Any other equipment, devices, or materials approved as a
3 utility cost-savings measure by the governing body.
4 (f) "Energy project" means any of the following:
5 (i) An energy efficiency improvement.
6 (ii) The acquisition, installation, replacement, or
7 modification of a renewable energy system or anaerobic digester
8 energy system.
9 (g) "Environmental hazard project" means the acquisition,
10 installation, replacement, or modification of equipment, devices,
11 or materials intended to address environmental hazards, including,
12 but not limited to, measures to do any of the following:
13 (i) Mitigate lead, heavy metal, or polyfluoroalkyl substance
14 (PFAS) contamination in potable water systems.
15 (ii) Mitigate the effects of floods or drought.
16 (iii) Increase the resistance of property against severe
17 weather.
18 (iv) Mitigate lead paint contamination in housing built before
19 1978.
20 (v) Reduce emissions to outdoor or indoor air or control
21 indoor humidity.
22 (vi) Replace or improve an on-site septic sewage system,
23 including either of the following:
24 (A) Conversion to a central sewage system.
25 (B) Repairs or modifications to the on-site septic sewage
26 system or to a lateral connection to a central sewage system.
27 (h) "Governing body" means any of the following:
28 (i) The county board of commissioners of a county.
29 (ii) The township board of a township.
TMV H02420'23
1 (iii) The council or other similar elected legislative body of a
2 city or village.
3 (iv) The governing body of a separate legal entity created
4 pursuant to section 7 of the urban cooperation act of 1967, 1967
5 (Ex Sess) PA 7, MCL 124.507.
6 (i) "Local unit of government" means a county, township, city,
7 or village or a separate legal entity created pursuant to section 7
8 of the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL
9 124.507.
10 (j) "New construction energy project" means an energy project
11 to which either of the following applies:
12 (i) It occurs at a newly constructed building or other
13 structure.
14 (ii) It consists of significant modifications to an existing
15 building or other structure.
16 (k) "Person" means an individual, firm, partnership,
17 association, corporation, unincorporated joint venture, or trust,
18 organized, permitted, or existing under the laws of this state or
19 any other state, a federal corporation, or a combination thereof.
20 However, person does not include a local unit of government.
21 (l) "Project" means any of the following:
22 (i) An environmental hazard project.
23 (ii) An energy project.
24 (iii) Measures to reduce the usage of water or increase the
25 efficiency of water usage.
26 (m) "Property" means privately owned real property used for
27 residential purposes located within the local unit of government.
28 However, property does not include multifamily residential property
29 with 5 or more dwelling units.
TMV H02420'23
1 (n) "Property assessed clean energy program" or "program"
2 means a program as described in section 21(2).
3 (o) "Record owner" means the person or persons possessed of
4 the most recent fee title or land contract vendee's interest in
5 property as shown by the records of the county register of deeds.
6 (p) "Renewable energy resource" means a resource that
7 naturally replenishes over a human, rather than a geological, time
8 frame and that is ultimately derived from solar power, water power,
9 or wind power. Renewable energy resource does not include
10 petroleum, nuclear, natural gas, or coal. A renewable energy
11 resource comes from the sun or from thermal inertia of the earth,
12 minimizes the output of toxic material in the conversion of the
13 energy, and includes, but is not limited to, all of the following:
14 (i) Biomass.
15 (ii) Solar and solar thermal energy.
16 (iii) Wind energy.
17 (iv) Geothermal energy.
18 (v) Methane gas captured from a landfill.
19 (q) "Renewable energy system" means a fixture, product,
20 device, or interacting group of fixtures, products, or devices on
21 the customer's side of the meter that use 1 or more renewable
22 energy resources to generate electricity. Renewable energy system
23 includes a biomass stove but does not include an incinerator or
24 digester.
25 Sec. 21. (1) Pursuant to section 22, a local unit of
26 government may establish a property assessed clean energy program
27 and may create a district or districts under the program.
28 (2) Under a property assessed clean energy program, the local
29 unit of government may enter into a written contract with the
TMV H02420'23
1 record owner of property within a district to finance or refinance
2 1 or more projects on the property. The contract may provide for
3 the repayment of the cost of a project through assessments on the
4 property benefited. The financing or refinancing may include the
5 cost of materials and labor necessary for installation and of
6 permit fees, inspection fees, application and administrative fees,
7 bank fees, or any other fees that may be incurred by the record
8 owner for the installation on a specific or pro rata basis, as
9 determined by the local unit of government.
10 Sec. 22. (1) To establish a property assessed clean energy
11 program, a governing body shall take the following actions in the
12 following order:
13 (a) Adopt a resolution of intent that includes all of the
14 following:
15 (i) A finding that financing projects is a valid public
16 purpose.
17 (ii) A statement of intent to provide funds for projects, which
18 may be repaid by assessments on the property benefited, with the
19 agreement of the record owner.
20 (iii) A description of the proposed arrangements for financing
21 the property assessed clean energy program.
22 (iv) The types of projects that may be financed.
23 (v) Reference to a report on the proposed property assessed
24 clean energy program as described in section 23(1) and where the
25 report is available pursuant to section 23(2).
26 (vi) The time and place for a public hearing on the proposed
27 property assessed clean energy program.
28 (b) Hold a public hearing at which the public may comment on
29 the proposed property assessed clean energy program, including the
TMV H02420'23
1 report required by subdivision (a)(v).
2 (c) Adopt a resolution establishing the property assessed
3 clean energy program and setting forth its terms and conditions,
4 including, but not limited to, all of the following:
5 (i) Matters required by section 23(1) to be included in the
6 report. For this purpose, the resolution may incorporate the report
7 or an amended version of the report by reference.
8 (ii) A description of aspects of the program that may be
9 amended without holding a new public hearing and aspects that may
10 be amended only after a new public hearing is held.
11 (d) Offer a workshop by an organization knowledgeable about
12 property assessed clean energy program financing, to provide
13 information about the program to realtors and other interested
14 persons. The workshop shall be offered each year during the first 3
15 years of the program.
16 (2) A governing body that establishes a property assessed
17 clean energy program shall prohibit the administrator, a project
18 contractor, or a third party hired by the administrator or project
19 contractor to solicit program financing from describing program
20 financing as government assistance or as free of charge.
21 (3) The governing body may amend a property assessed clean
22 energy program by resolution. Before adopting the resolution, the
23 governing body shall hold a public hearing if required by the
24 resolution under subsection (1)(c).
25 Sec. 23. (1) The report on the proposed property assessed
26 clean energy program required under section 22 shall include all of
27 the following:
28 (a) A form of contract between the local unit of government
29 and the record owner governing the terms and conditions of
TMV H02420'23
1 financing and assessment under the program.
2 (b) The identity of an official authorized to enter into a
3 program contract on behalf of the local unit of government.
4 (c) A maximum aggregate annual dollar amount for all financing
5 to be provided by the local unit of government under the program.
6 (d) An application process and eligibility requirements for
7 financing projects under the program.
8 (e) A method for determining repayment periods, the maximum
9 amount of an assessment, and interest rates on assessment
10 installments.
11 (f) An explanation of how assessments will be made and
12 collected consistent with section 25(3).
13 (g) A plan for raising capital to finance improvements under
14 the program. The plan may include any of the following:
15 (i) The sale of bonds or notes, subject to section 26.
16 (ii) Amounts to be advanced by the local unit of government
17 through funds available to it from any other source.
18 (iii) Owner-arranged financing from a commercial lender. Under
19 owner-arranged financing, the local unit of government may impose
20 an assessment pursuant to section 24 and forward payments to the
21 commercial lender or the record owner may pay the commercial lender
22 directly.
23 (h) Information regarding both of the following, to the extent
24 known, or procedures to determine the following in the future:
25 (i) Any reserve fund or funds to be used as security for bonds
26 or notes described in subdivision (g).
27 (ii) Any application, administration, or other fees to be
28 charged to record owners participating in the program that will be
29 used to finance costs incurred by the local unit of government as a
TMV H02420'23
1 result of the program.
2 (i) A requirement that the term of an assessment not exceed
3 the useful life of the project paid for by the assessment.
4 (j) A requirement that the total amount of the assessments
5 under the program not exceed 20% of the current value of the
6 property.
7 (k) A requirement that the total amount of the assessments
8 under the program on a property, plus all existing mortgage debt on
9 the property, not exceed the current value of the property.
10 (l) A requirement that the total amount of the annual
11 assessment under the program on a property not exceed 10% of the
12 annual income of the record owner.
13 (m) Provisions for marketing and participant education,
14 including a requirement that before a record owner signs a program
15 financing agreement, the administrator provide the record owner
16 with a program guide, written in plain language, describing all of
17 the following:
18 (i) How the program operates.
19 (ii) How to understand program disclosure documents.
20 (iii) How property tax and escrow increases operate.
21 (iv) How to understand quotes from project contractors.
22 (v) Other standard types of financing compared to financing
23 under the program.
24 (vi) Applicable federal grant programs, such as the United
25 States Department of Energy's weatherization assistance program,
26 available to qualifying low-income record owners.
27 (n) Provisions for an adequate debt service reserve fund.
28 (o) Quality assurance and antifraud provisions.
29 (p) For an energy project financed with more than $250,000.00
TMV H02420'23
1 in assessments, both of the following:
2 (i) A requirement for ongoing calculation of the savings
3 realized by the record owner from the energy project.
4 (ii) A requirement that a project contractor guarantee to the
5 record owner that the energy project will achieve a savings-to-
6 investment ratio greater than 1 and agree to pay the record owner,
7 on an annual basis, any shortfall in savings below this level. This
8 subparagraph does not apply to a new construction energy project.
9 (q) A requirement that a new construction energy project meet
10 the applicable