[HISTORY: Adopted by the City Council of the City of Saco 10-23-2023. Amendments
noted where applicable.]
A.
Purpose. By and through this chapter, the City of Saco declares as
its public purpose the establishment of a municipal program to enable
its citizens to participate in a Commercial Property Assessed Clean
Energy ("C-PACE") program so that owners of qualifying property can
access financing for energy savings improvements to their commercial
properties located in the City. The City declares its purpose and
the provisions of this chapter to be in conformity with federal and
state laws.
B.
Enabling legislation. The City enacts this chapter pursuant to Public
Law 2021, Chapter 142 of the 130th Maine State Legislature, "An Act
to Allow for the Establishment of Commercial Property Assessed Clean
Energy Program," also known as "the Commercial Property Assessed Clean
Energy Act" or "the Commercial PACE Act" (codified at 35-A M.R.S.
§ 10201 et seq.).
This chapter shall be known and may be cited as "The City of
Saco's Commercial Property Assessed Clean Energy ("C-PACE") Ordinance"
(this "chapter").
Except as specifically defined below, words and phrases used
in this chapter shall have their customary meanings. As used in this
chapter, the following words and phrases shall have the meanings indicated:
The City of Saco.
An agreement that authorizes the creation of a commercial
PACE assessment on qualifying property and that is approved in writing
by all owners of the qualifying property at the time of the agreement
and by the municipal officers of the City.
An assessment made against qualifying property to finance
an energy savings improvement.
The area within which the City establishes a commercial PACE
program hereunder, which is all that area within the City boundaries.
A lien, secured against a qualifying property that is created
by a commercial PACE assessment.
A loan, payable through a commercial PACE assessment and
secured by a C-PACE lien, made to the owner(s) of a qualifying property
pursuant to a commercial PACE program to fund energy savings improvements.
Commercial property assessed clean energy.
A program established under this chapter pursuant to the
Commercial PACE Act under which commercial property owners can finance
energy savings improvements on qualifying property.
An improvement or series of improvements to qualifying property
that are new and permanently affixed to qualifying property and that:
Will result in increased energy efficiency or substantially
reduced energy use and:
Meet or exceed applicable United States Environmental Protection
Agency and United States Department of Energy "ENERGY STAR®" program or similar energy efficiency standards
established or approved by the trust; or
Involve weatherization of commercial or industrial property
in a manner approved by the trust; or
Involve a renewable energy installation, an energy storage system
as defined in 35-A M.R.S. § 3481(6), an electric thermal
storage system, electric vehicle supply equipment or heating equipment
that meets or exceeds standards established or approved by the trust.
Heating equipment that is not a renewable energy installation must
be heating equipment that produces the lowest carbon emissions of
any heating equipment reasonably available to the property owner,
as determined by the trust, and must meet the requirements of 35-A
M.R.S. § 10204 (1)(B).
Real commercial property in the City that:
Does not have a residential mortgage;
Is not owned by a residential customer or small commercial customer
as defined in 35-A M.R.S. § 3016(1)(C) and (D), respectively;
Consists of five or more rental units if the property is a commercial
building designed for residential use;
Is not owned by a federal, state or municipal government or
public school; and
Is located in a municipality that participates in a commercial
PACE program.
An approved lender proving financing for the energy savings
improvements through a C-PACE program and registered with Efficiency
Maine Trust.
A fixture, product, system, device or interacting group of
devices installed behind the meter at a qualifying property, or on
contiguous property under common ownership, that produces energy or
heat from renewable sources, including but not limited to, photovoltaic
systems, solar thermal systems, highly efficient wood heating systems,
geothermal systems and wind systems that do not on average generate
more energy or heat than the peak demand of the property.
The Efficiency Maine Trust established in 35-A M.R.S. § 10103
and/or its agents, if any.
A.
Establishment. The City hereby establishes a commercial PACE program
allowing owners of qualifying property located in the City who so
choose to access financing for energy savings improvements to their
qualifying property, with such financing to be repaid through a commercial
PACE assessment and secured by a commercial PACE lien.
B.
The City may:
(1)
Administer the functions of the commercial PACE program, including,
but not limited to, entering into commercial PACE agreements with
commercial property owners and collecting commercial PACE assessments,
or designate an agent to act on behalf of the City/town for such billing
and collection purposes; or
(2)
Enter into a contract with the trust to administer some or all functions
of the commercial PACE program for the City, including billing and
collection of commercial PACE assessments, subject to the limitations
set forth in Section 10205, Subsection 5 of the Commercial PACE Act.
C.
Amendment to or repeal commercial PACE program. The City may from
time to time amend this chapter to use any funding sources made available
to it or appropriated by it for the express purpose of its commercial
PACE program, and the City shall be responsible for administration
of loans made from those funding sources. The City may also repeal
this chapter in the same manner as it was adopted, provided, however,
that such repeal shall not affect the validity of any commercial PACE
agreements entered into by the City prior to the effective date of
such repeal, or a commercial PACE loan or Commercial PACE lien arising
out of such agreements.
C-PACE loans may be provided by any qualified capital provider
private lender participating in the C-PACE program and a C-PACE agreement
may contain any terms agreed to by the lender and the property owner,
as permitted by law, for the financing of energy savings improvements.
Unless the City specifically designates funding sources made available
to it or appropriated by it for the express purpose of its commercial
PACE program and agrees to provide financing for energy savings improvements,
the City will not finance or fund any loan under the commercial PACE
program, and shall serve only as a program sponsor to facilitate loan
repayment by including the commercial PACE assessment on the property
tax bill for the property, and shall incur no liability for the loan.
A.
Agreement required. All commercial property owners seeking financing
for energy savings improvements on qualifying property pursuant to
the commercial PACE program must enter into a commercial PACE agreement,
approved as to form and substance by the City, authorizing the creation
of a commercial PACE assessment and acknowledging the creation of
a commercial PACE lien. A notice of the commercial PACE agreement
will be filed in the registry of deeds, which filing will create a
lien until the amounts due under the agreement are paid in full.
B.
Underwriting standards. A commercial PACE agreement entered into
pursuant to the commercial PACE program must satisfy the minimum underwriting
requirements of the Commercial PACE Act and such additional requirements
established by the trust.
C.
Collection of assessments. A commercial property owner participating
in the commercial PACE program will repay the financing of energy
savings improvements through an assessment on their property similar
to a tax bill. A commercial PACE assessment constitutes a lien on
the qualifying property until it is paid in full and must be assessed
and collected by the City or its designated agent, the trust, or a
third-party administrator contracted by the trust, consistent with
applicable laws. The City may, by written agreement, designate the
applicable third-party capital provider as its agents for the billing
and collection of commercial PACE assessment payments in satisfaction
of the commercial PACE loan. Where commercial PACE assessment payments
are received directly by the City/Town along with other municipal
tax payments, such payments received from property owners shall first
be applied to City taxes, assessments, and charges. The City shall
have no ownership of the commercial PACE assessments collected except
for any administrative costs provided under the commercial PACE program.
The City shall pay all commercial PACE assessment payments in any
calendar month to the applicable capital provider or the commercial
PACE program administrator within 30 days after the end of the month
in which such amounts are collected. The City shall have no obligation
to make payments to any capital provider with respect to any commercial
PACE repayment amounts or loan obligations other than that portion
of the commercial PACE assessment actually collected from a property
owner for the repayment of a commercial PACE loan.
(1)
If the trust or a third-party administrator contracted by the trust
or an agent of the City/town collects commercial PACE assessments
on behalf of the City, the trust or agent shall periodically report
to the City on the status of the commercial PACE assessments in the
City and shall notify the City of any delinquent commercial PACE assessments.
Upon receiving notification from the trust or agent of a delinquent
commercial PACE assessment, the City/town shall notify the holder
of any mortgage on the property of the delinquent assessment.
D.
Notice; filing. A notice of a commercial PACE agreement must be filed
in the appropriate registry of deeds. The filing of this notice creates
a commercial PACE lien against the property subject to the commercial
PACE assessment until the amounts due under the terms of the commercial
PACE agreement are paid in full. The notice must include the information
required by the Commercial PACE Act.
E.
Priority. A commercial PACE lien secures payment for any unpaid commercial
PACE assessment and, together with all associated interest and penalties
for default and associated attorney's fees and collection costs,
takes precedence over all other liens or encumbrances except a lien
for real property taxes of the municipality and liens of municipal
sewer, sanitary and water districts. From the date of recording, a
commercial PACE lien is a priority lien against a property, except
that the priority of such a commercial PACE lien over any lien, except
a lien for real property taxes of the City or a lien of a municipal
sewer, sanitary or water district, that existed prior to the commercial
PACE lien is subject to the written consent of such existing lienholder.
F.
Mortgage lender notice and consent. Any financial institution holding
a lien, mortgage or security interest in or other collateral encumbrance
on the property for which a commercial PACE assessment is sought must
be provided written notice of the commercial property owner's
intention to participate in the commercial PACE program and must provide
written consent to the commercial property owner and City that the
borrower may participate and enroll the collateral property in the
commercial PACE program. This written consent must be filed in the
registry of deeds and must include a written acknowledgement and understanding
by the financial institution holding the lien, mortgage or security
interest in or other collateral encumbrance on the property as required
by the Commercial PACE Act.
A.
A commercial PACE assessment and any interest, fees, penalties and
attorney's fees incurred in its collection must be collected
in the same manner as the real property taxes of the City. A commercial
PACE assessment for which notice is properly recorded under this section
creates a lien on the property. The portion of the assessment that
has not yet become due is not eliminated by foreclosure, and the lien
may not be accelerated or extinguished until fully repaid.
(1)
If a commercial PACE assessment is delinquent or in default and the
borrower or property owner is delinquent in any tax debt due to the
City, collection may occur only by the recording of liens and by foreclosure
under 36 M.R.S. §§ 942 and 943. Liens must be recorded
and released in the same manner as liens for real property taxes.
(2)
If only a commercial PACE assessment is delinquent but the borrower
or property owner is current on payment of all municipal taxes due
to the City, then a commercial PACE lienholder shall accept an assignment
of the commercial PACE lien, as provided in the written agreement
between City and the capital provider. The assignee shall have and
possess all the same powers and rights at law as the City/town and
its tax collector with regards to the priority of the commercial PACE
lien, the accrual of interest and fees and the costs of collection.
The assignee shall have the same rights to enforce the commercial
PACE lien as any private party or lender holding a lien on real property,
including, but not limited to, the right of foreclosure consistent
with 14 M.R.S. §§ 6203-A and 6321 and any other action
in contract or lawsuit for the enforcement of the commercial PACE
lien.
B.
Judicial or nonjudicial sale or foreclosure. In the event of a judicial
or nonjudicial sale or foreclosure of a property subject to a commercial
PACE lien by a lienholder that is not a commercial PACE lienholder,
the commercial PACE lien must survive the foreclosure or sale to the
extent of any unpaid installment, interest, penalties or fees secured
by the lien that were not paid from the proceeds of the sale. All
parties with mortgages or liens on that property, including without
limitation commercial PACE lienholders, must receive on account of
such mortgages or liens sale proceeds in accordance with the priority
established in this chapter and by applicable law. A commercial PACE
assessment is not eliminated by foreclosure and cannot be accelerated.
Only the portion of a commercial PACE assessment that is in arrears
at the time of foreclosure takes precedence over other mortgages or
liens; the remainder transfers with the property at resale.
C.
Unless otherwise agreed upon by the capital provider, all payments
on a commercial PACE assessment that become due after the date of
transfer by judicial or nonjudicial sale or foreclosure must continue
to be secured by a lien on the property and are the responsibility
of the transferee.
D.
Release of lien. The City will discharge a commercial PACE lien created
under the Commercial PACE Act and this chapter upon full payment of
the amount specified in the commercial PACE agreement. A discharge
under this subsection must be filed in the appropriate registry of
deeds and must include reference to the notice of commercial PACE
agreement previously recorded pursuant to the Commercial PACE Act
and this chapter.
A.
Notwithstanding any other provision of law to the contrary, City/town
officers and City/town officials, including without limitation, Tax
Assessors and Tax Collectors, are not personally liable to the trust
or to any other person for claims, of whatever kind or nature, under
or related to a commercial PACE program, including without limitation,
claims for or related to uncollected commercial PACE assessments under
this chapter.
B.
Other than the fulfillment of its obligations specified in a commercial
PACE agreement, the City has no liability to a commercial property
owner for or related to energy savings improvements financed under
a commercial PACE program.
This chapter is intended to comply with the Commercial PACE
Act and the administrative rules of the trust issued in connection
with the Commercial PACE Act, as the same may be amended. If the trust
or any state or federal agency adopts standards, promulgates rules,
or establishes model documents subsequent to the City's adoption
of this chapter and those standards, rules or model documents substantially
conflict with this chapter, the City shall take necessary steps to
conform this chapter and its commercial PACE program to those standards,
rules or model documents.
