SECOND REGULAR SESSION
HOUSE BILL NO. 2298
95TH GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE STORCH.
5332L.01I D. ADAM CRUMBLISS, Chief Clerk
To repeal sections 260.035 and 260.080, RSMo, and to enact in lieu thereof eleven new sections relating to financing by municipalities for energy improvements.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 260.035 and 260.080, RSMo, are repealed and eleven new sections enacted in lieu thereof, to be known as sections 67.2800, 67.2805, 67.2810, 67.2815, 67.2820, 67.2825, 67.2830, 67.2835, 260.035, 260.036, and 260.080, to read as follows:
67.2800. 1. Sections 67.2800 to 67.2835 shall be known and may be cited as the "Property Assessment Clean Energy Act".
2. As used in sections 67.2800 to 67.2835, the following words and terms shall mean:
(1) "Assessment contract", a contract entered into between a clean energy development board and a property owner under which the property owner agrees to pay an annual assessment for a period of up to twenty years in exchange for financing of an energy efficiency improvement or a renewable energy improvement;
(2) "Authority", the state environmental improvement and energy resources authority established under section 260.010;
(3) "Bond", any bond, note, or other similar instrument issued by or on behalf of a clean energy development board;
(4) "Clean energy conduit financing", the financing of energy efficiency improvements or renewable energy improvements for a single parcel of property or a unified development consisting of multiple adjoining parcels of property under section 67.2825;
(5) "Clean energy development board", a board formed by one or more municipalities under section 67.2810;
(6) "Director", the director of the department of economic development;
(7) "Energy efficiency improvement", any acquisition, installation, or modification on or of publicly or privately owned property designed to reduce the energy consumption of such property, including but not limited to:
(a) Insulation in walls, roofs, attics, floors, foundations, and heating and cooling distribution systems;
(b) Storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective windows and doors, and other window and door improvements designed to reduce energy consumption;
(c) Automatic energy control systems;
(d) Heating, ventilating, or air conditioning distribution system modifications and replacements;
(e) Caulking and weatherstripping;
(f) Replacement or modification of lighting fixtures to increase energy efficiency of the lighting system without increasing the overall illumination of the building unless the increase in illumination is necessary to conform to applicable state or local building codes;
(g) Energy recovery systems; and
(h) Daylighting systems;
(8) "Municipality", any county, city, or incorporated town or village of this state;
(9) "Project", any energy efficiency improvement or renewable energy improvement;
(10) "Property assessed clean energy local finance fund", the fund established by the authority under section 260.036 for the purpose of making loans to clean energy development boards to establish and maintain property assessed clean energy programs;
(11) "Property assessed clean energy program", a program established by a clean energy development board to finance energy efficiency improvements or renewable energy improvements under section 67.2820;
(12) "Renewable energy improvement", any acquisition and installation of a fixture, product, system, device, or combination thereof on publicly or privately owned property that produces energy from renewable resources, including, but not limited to photovoltaic systems, solar thermal systems, wind systems, biomass systems, or geothermal systems.
3. All projects undertaken under sections 67.2800 to 67.2835 are subject to the applicable municipality's ordinances and regulations, including, but not limited to those ordinances and regulations concerning zoning, subdivision, building, fire safety, and historic or architectural review.
67.2805. 1. The authority may, as needed, promulgate administrative rules and regulations relating to the following:
(1) Guidelines and specifications for administering the property assessed clean energy local finance fund;
(2) The form of the annual report required by subsection 3 of section 67.2810; and
(3) Any clarification to the definitions of energy efficiency improvement and renewable energy improvement as the authority may determine is necessary or advisable.
2. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly under chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2010, shall be invalid and void.
67.2810. 1. One or more municipalities may form clean energy development boards for the purpose of exercising the powers described in sections 67.2800 to 67.2835. Each clean energy development board shall consist of not less than three members, as set forth in the ordinance or order establishing the clean energy development board. Members shall serve terms as set forth in the ordinance or order establishing the clean energy development board and shall be appointed:
(1) If only one municipality is participating in the clean energy development board, by the chief elected officer of the municipality with the consent of the governing body of the municipality; or
(2) If more than one municipality is participating, in a manner agreed to by all participating municipalities.
2. A clean energy development board shall be a separate body politic and corporate and shall have all powers necessary and convenient to carry out and effectuate the provisions of sections 67.2800 to 68.2835, including, but not limited to the following:
(1) To adopt, amend, and repeal bylaws, which are not inconsistent with sections 67.2800 to 68.2835;
(2) To adopt an official seal;
(3) To sue and be sued;
(4) To make and enter into contracts and other instruments with public and private entities;
(5) To accept grants, guarantees, and donations of property, labor, services, and other things of value from any public or private source;
(6) To employ or contract for such managerial, legal, technical, clerical, accounting, or other assistance it deems advisable;
(7) To levy and collect special assessments under an assessment contract with a property owner and to record such special assessments as a lien on the property;
(8) To borrow money from any public or private source and issue bonds and provide security for the repayment of the same;
(9) To finance a project under an assessment contract;
(10) To collect reasonable fees and charges in connection with making and servicing assessment contracts and in connection with any technical, consultative, or project assistance services offered;
(11) To invest any funds not required for immediate disbursement in obligations of the state of Missouri or of the United States or any agency or instrumentality thereof, or in bank certificates of deposit; provided, however, the limitations on investments provided in this subdivision shall not apply to proceeds acquired from the sale of bonds which are held by a corporate trustee; and
(12) To take whatever actions necessary to participate in and administer a clean energy conduit financing or a property assessed clean energy program.
3. No later than July first of each year, the clean energy development board shall file with the authority and with each municipality that participated in the formation of the clean energy development board, an annual report for the preceding calendar year that includes:
(1) A brief description of each project financed by the clean energy development board during the preceding calendar year;
(2) The amount of assessments due and the amount collected during such year;
(3) The amount of clean energy development board administrative costs incurred;
(4) The estimated cumulative energy savings resulting from all energy efficiency improvements financed during the year and to date;
(5) The estimated cumulative energy produced by all renewable energy improvements financed during the year and to date; and
(6) Any other financial information required by the authority's rules and regulations.
4. No lawsuit to set aside the formation of a clean energy development board or to otherwise question the proceedings related thereto shall be brought after the expiration of sixty days from the effective date of the ordinance creating the clean energy development board. No lawsuit to set aside the approval of a project, an assessment contract, or a special assessment levied under thereto, or to otherwise question the proceedings related thereto shall be brought after the expiration of sixty days from the date that the assessment contract is executed.
67.2815. 1. A clean energy development board shall not enter into an assessment contract or levy or collect a special assessment for a project without making a finding that there are sufficient resources to complete the project and that the estimated economic benefit expected from the project during the financing period is equal to or greater than the cost of the project.
2. An assessment contract shall be executed by the clean energy development board and the benefitted property owner or property owners and shall provide:
(1) A description of the project, including the estimated cost of the project and details on how the project will either reduce energy consumption or create energy from renewable sources;
(2) A mechanism for:
(a) Verifying the final costs of the project upon its completion; and
(b) Ensuring that any amounts advanced or otherwise paid by the clean energy development board toward costs of the project will not exceed the final cost of the project;
(3) An acknowledgment by the property owner that the property owner has received a special benefit by financing a project through the clean energy development board and an agreement by such property owner to pay an annual special assessment equal to the amount of total special assessments permitted by this section, amortized over a period not to exceed twenty years;
(4) A distribution of assessment amounts among all parcels of real property subject to the assessment contract;
(5) A statement that the obligations set forth in the assessment contract, including the obligation to pay annual special assessments, are a covenant that will run with the land and be obligations upon future owners of such property; and
(6) An acknowledgment that no subdivision of property subject to the assessment contract will be valid unless the assessment contract or an amendment thereof divides the total annual special assessment due between the newly subdivided parcels pro rata to the special benefit realized by each subdivided parcel.
3. The total special assessments levied against a property under an assessment contract shall not exceed the sum of the cost of the project, including any required energy audits and inspections, or portion thereof financed through the participation in a property assessed clean energy program or clean energy conduit financing, including the costs of any audits or inspections required by the clean energy development board, plus such administration fees, interest, and other financing costs reasonably required by the clean energy development board.
4. Upon execution of an assessment contract, the clean energy development board shall provide a copy of such assessment contract to the local county assessor and county collector and cause a copy of such assessment contract to be recorded in the files of the county recorder of deeds.
5. Special assessments agreed to under an assessment contract shall be a lien on the property against which it is assessed on behalf of the applicable clean energy development board from the date that each annual assessment under the assessment contract becomes due. Such special assessments shall be collected by the county collector in the same manner and with the same priority as other ad valorem real property taxes. Once collected, the county collector shall pay over such special assessment revenues to the clean energy development board in the same manner in which revenues from ad valorem real property taxes are paid to other taxing districts. Such special assessments shall be collected as provided in this subsection from all subsequent property owners, including the state and all political subdivisions thereof, for the term of the assessment contract.
67.2820. 1. Any clean energy development board may establish a property assessed clean energy program to finance energy efficiency improvements or renewable energy improvements. A property assessed clean energy program shall consist of a program whereby a property owner may apply to a clean energy development board to finance the costs of a project through annual special assessments levied under an assessment contract.
2. A clean energy development board may establish application requirements and criteria for project financing approval as it deems necessary to effectively administer such program and ration available funding among projects, including but not limited to requiring projects to meet certain energy efficiency standards.
3. A clean energy development board may require an initial energy audit as a prerequisite to project financing through a property assessed clean energy program as well as inspections to verify project completion.
67.2825. 1. In lieu of financing a project through a property assessed clean energy program, a clean energy development board may seek to finance any number of projects to be installed within a single parcel of property or within a unified development consisting of multiple adjoining parcels of property by participating in a clean energy conduit financing.
2. A clean energy conduit financing shall consist of the issuance of bonds under section 67.2830 payable from the special assessment revenues collected under an assessment contract with the property owner participating in the clean energy conduit financing and any other revenues pledged thereto.
67.2830. 1. A clean energy development board may issue bonds payable from special assessment revenues generated by assessment contracts and any other revenues pledged thereto. The bonds shall be authorized by resolution of the clean energy development board, shall bear such date or dates, and shall mature at such time or times as the resolution shall specify, provided that the term of any bonds issued for a clean energy conduit financing shall not exceed twenty years. The bonds shall be in such denomination, bear interest at such rate, be in such form, be issued in such manner, be payable in such place or places, and be subject to redemption as such resolution may provide. Notwithstanding anything to the contrary under this section, issuance of the bonds shall conform to the requirements of subsection 1 of section 108.170.
2. Any bonds issued under this section shall not constitute an indebtedness of the state or any municipality. Neither the state nor any municipality shall be liable on such bonds, and the form of such bonds shall contain a statement to such effect.
67.2835. The director of the department of economic development is authorized to allocate the state's residual share, or any portion thereof, of the national qualified energy conservation bond limitation under Section 54D of the Internal Revenue Code of 1986, as amended, for any purposes described therein to the authority, any clean energy development board, the state, any political subdivision, instrumentality, or other body corporate and politic.
260.035. 1. The authority is hereby granted and may exercise all powers necessary or appropriate to carry out and effectuate its purposes pursuant to the provisions of sections 260.005 to 260.125, including, but not limited to, the following:
(1) To adopt bylaws and rules after having held public hearings thereon for the regulation of its affairs and the conduct of its business;
(2) To adopt an official seal;
(3) To maintain a principal office and such other offices within the state as it may designate;
(4) To sue and be sued;
(5) To make and execute leases, contracts, releases, compromises and other instruments necessary or convenient for the exercise of its powers or to carry out its purposes;
(6) To acquire, construct, reconstruct, enlarge, improve, furnish, equip, maintain, repair, operate, lease, finance and sell equipment, structures, systems and projects and to lease the same to any private person, firm, or corporation, or to any public body, political subdivision or municipal corporation. Any such lease may provide for the construction of the project by the lessee;
(7) To issue bonds and notes as hereinafter provided and to make, purchase, or participate in the purchase of loans or municipal obligations and to guarantee loans to finance the acquisition, construction, reconstruction, enlargement, improvement, furnishing, equipping, maintaining, repairing, operating or leasing of a project or to fund the property assessed clean energy local finance fund established under section 260.036;
(8) To invest any funds not required for immediate disbursement in obligations of the state of Missouri or of the United States or any agency or instrumentality thereof, or in bank certificates of deposit; provided, however, the foregoing limitations on investments shall not apply to proceeds acquired from the sale of bonds or notes which are held by a corporate trustee pursuant to section 260.060;
(9) To acquire by gift or purchase, hold and dispose of real and personal property in the exercise of its powers and the performance of its duties hereunder;
(10) To employ managers and other employees and retain or contract with architects, engineers, accountants, financial consultants, attorneys and such other persons, firms or corporations who are necessary in its judgment to carry out its duties, and to fix the compensation thereof;
(11) To receive and accept appropriations, bequests, gifts and grants and to utilize or dispose of the same to carry out its purposes pursuant to the provisions of sections 260.005 to 260.125;
(12) To engage in research and development with respect to pollution control facilities and solid waste or sewage disposal facilities, and water facilities, resource recovery facilities and the development of energy resources;
(13) To collect rentals, fees and other charges in connection with its services or for the use of any project hereunder;
(14) To sell at private sale any of its property or projects to any private person, firm or corporation, or to any public body, political subdivision or municipal corporation on such terms as it deems advisable, including the right to receive for such sale the note or notes of any such person to whom the sale is made. Any such sale shall provide for payments adequate to pay the principal of and interest and premiums, if any, on the bonds or notes issued to finance such project or portion thereof. Any such sale may provide for the construction of the project by the purchaser of the project;
(15) To make, purchase or participate in the purchase of loans to finance the development and marketing of:
(a) Means of energy production utilizing energy sources other than fossil or nuclear fuel, including, but not limited to, wind, water, solar, biomass, solid waste, and other renewable energy resource technologies;
(b) Fossil fuels and recycled fossil fuels which are indigenous energy resources produced in the state of Missouri, including coal, heavy oil, and tar sands; [and]
(c) Synthetic fuels produced in the state of Missouri; and
(d) Property assessed clean energy programs established by clean energy development boards under section 67.2820, provided such loans are funded from the property assessed clean energy local finance fund established under section 260.036;
(16) To insure any loan, the funds of which are to be used for the development and marketing of energy resources as authorized by sections 260.005 to 260.125;
(17) To make temporary loans, with or without interest, but with such security for repayment as the authority deems reasonably necessary and practicable, to defray development costs of energy resource development projects;
(18) To collect reasonable fees and charges in connection with making and servicing its loans, notes, bonds and obligations, commitments, and other evidences of indebtedness made, issued or entered into to develop energy resources, and in connection with providing technical, consultative and project assistance services in the area of energy development. Such fees and charges shall be limited to the amounts required to pay the costs of the authority, including operating and administrative expenses, and reasonable allowance for losses which may be incurred;
(19) To enter into agreements or other transactions with any federal or state agency, any person and any domestic or foreign partnership, corporation, association, or organization to carry out the provisions of sections 260.005 to 260.125;
(20) To sell, at public or private sale, any mortgage and any real or personal property subject to that mortgage, negotiable instrument, or obligation securing any loan;
(21) To procure insurance against any loss in connection with its property in such amounts, and from such insurers, as may be necessary or desirable;
(22) To consent to the modification of the rate of interest, time of payment for any installment of principal or interest, or any other terms, of any loan, loan commitment, temporary loan, contract, or agreement made directly by the authority;
(23) To make and publish rules and regulations concerning its lending, insurance of loans, and temporary lending to defray development costs, along with such other rules and regulations as are necessary to effectuate its purposes. No rule or portion of a rule promulgated under the authority of sections 260.005 to 260.125 shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo;
(24) To borrow money to carry out and effectuate its purpose in the area of energy resource development and to issue its negotiable bonds or notes as evidence of any such borrowing in such principal amounts and upon such terms as shall be determined by the authority, and to secure such bonds or notes by the pledge of revenues, mortgages, or notes of others as authorized by sections 260.005 to 260.125.
2. The authority shall develop a hazardous waste facility if the study required in section 260.037 demonstrates that a facility is economically feasible. The facility, which shall not include a hazardous waste landfill, may be operated by any eligible party as specified in this section. The authority shall begin development of the facility by July 1, 1985.
260.036. 1. The authority is hereby directed to establish a fund designated as the "Property Assessed Clean Energy Local Finance Fund" whereby the authority shall, subject to available funds, loan funds to clean energy development boards to establish and operate property assessed clean energy programs under sections 67.2800 to 67.2835. The state treasurer shall be custodian of the fund and shall approve disbursements from the fund in accordance with sections 30.170 and 30.180. Upon appropriation, money in the fund shall be used solely for the administration of sections 67.2800 to 67.2835. Notwithstanding the provisions of section 33.080 to the contrary, any moneys remaining in the fund at the end of the biennium shall not revert to the credit of the general revenue fund. The state treasurer shall invest moneys in the fund in the same manner as other funds are invested. Any interest and moneys earned on such investments shall be credited to the fund.
2. The property assessed clean energy local finance fund shall be funded from:
(1) Any grants, contributions, or other funds received by the authority from the federal government or any other source for the purpose of establishing or operating a property assessed clean energy program;
(2) The proceeds of any revenue bonds or other obligations issued by the authority for the purpose of funding the property assessed clean energy local finance fund;
(3) The revenues received from loan agreements entered into between the authority and participating clean energy development boards; and
(4) Any other available funds so designated by the authority.
3. Subject to available funding, clean energy development boards may apply to the authority for financing to establish and maintain property assessed clean energy programs. If approved, the authority and the clean energy development board shall enter into a loan agreement and any other documentation necessary for the clean energy development board to pledge the special assessment revenues collected under assessment contracts, as defined in section 67.2800, entered into as part of the property assessed clean energy program, less any administrative or financing costs retained by the clean energy development board, to the authority.
260.080. No part of the funds of the authority shall inure to the benefit of or be distributable to its members or other private persons except that the authority is authorized and empowered to pay reasonable compensation for services rendered as herein provided for and authorized to establish and operate the property assessed clean energy local finance fund under section 260.036 and to make, purchase, or participate in the purchase of loans to finance the development and marketing of property assessed clean energy programs under paragraph (d) of subdivision (15) of section 260.035.