Authorizes municipalities to create a municipal sustainable energy loan program

A new section 119-ee would set forth legislative findings and declaration, including that it is the policy of New York State to achieve statewide energy efficiency and renewable energy goals, reduce greenhouse gas emissions and mitigate the effect of global climate change, and advance a clean energy economy. This section would provide further that to achieve such policy and goals the State must promote the deployment of renewable energy systems and energy efficiency measures throughout the state. In addition, it would provide that municipalities would fulfill an important public purpose by providing loans to property owners for the installation of renewable energy systems and energy efficiency measures that advance these policies and goals.

A new section 119-ff would define the following terms used in the article: authority, credit support, energy audit, energy efficiency improvement, municipal corporation, renewable energy system, and renewable energy system feasibility study.

A new section 119-gg would authorize any municipality to establish a new Sustainable Energy Loan Program using federal grant assistance or federal credit support. The municipality would be authorized to make a loan to a property owner to finance the installation of renewable energy systems and energy efficiency improvements, related energy audits and renewable energy system feasibility studies, and the verification of the installation of such systems and improvements.

For purposes of energy audits and renewable energy system feasibility studies, the bill would allow municipalities to either (1) utilize lists of contractors certified by the New York State Energy Research and Development Authority ("NYSERDA"), (2) utilize lists of contractors certified by an entity (including the municipality) approved by NYSERDA, or (3) adopt a local law providing for the certification of contractors based on criteria that are at least as stringent as the criteria adopted by NYSERDA. Similarly, nothing in the bill would prevent a municipality from adopting a local law providing for the certification of contractors that install renewable energy systems or energy efficiency improvements or, alternatively, from utilizing NYSERDA lists. However, the loan program would be required to utilize any lists of cost effective energy efficiency improvements for different building types that have been approved by NYSERDA, and to verify and report on the installation and performance of renewable energy systems and energy efficiency improvements financed by the program.

Every loan under the program must be repaid over a term not to exceed the weighted average of the useful life of the renewable energy systems and energy efficiency improvements. The principal amount of the loan, excluding interest, would be limited to the lesser of (1) ten percent of the appraised real property value; or (2) the combined actual costs of (a) installing the renewable energy system and energy efficiency improvements (including the costs of necessary equipment, materials, and labor), (b) each related energy audit and renewable energy system feasibility study, and ( c) verification of such renewable energy system and energy efficiency improvements. The municipal corporation would set a fixed rate of interest for the repayment of the principal amount of the loan.

Energy efficiency improvements would qualify for a loan if they are identified in an energy audit and are cost effective. Renewable energy systems would qualify for a loan if they are determined to be feasible through a renewable energy system feasibility study.

The municipality would have a lien on the real property that is benefitted by such loan. The municipality would have the option, but would not be mandated to, require that the loan made under the sustainable energy program be repaid by the property owner through a charge on the real property benefitted by such loan. If the municipality so chooses, such charge would be levied and collected at the same time and in the same manner as municipal taxes. Such charge would be separately listed on the tax bill. If the property owner failed to pay the charge, the county would not be mandated to credit or otherwise guarantee the amount of such unpaid charge to the municipal corporation which authorized the loan.

Section 2 of the bill would provide for an immediate effective date.

Existing law

Chapter 409 of the laws of 2009 authorizes town refuse and garbage districts to provide financing to residential property owners for energy audits and energy efficiency improvements. Chapter 344 of the laws of 2009 authorizes the City of Binghamton to create a sustainable energy loan program similar to this bill. Chapter 336 of the laws of 2009 authorizes the Town of Bedford to create a sustainable energy loan program similar to this bill. The General Municipal Law does not currently authorize municipalities to create programs similar to the program contained in this bill.

Legislative history

This is a new bill.

Statement in support

Governor Paterson's 2009 State of the State address outlined his aggressive plan to meet 45% of New York State's electricity needs through clean renewable energy and improved energy efficiency by 2015 ("45 by 15"). Enabling municipalities to promote and finance the installation of renewable energy systems and energy efficiency measures moves the State toward this important goal.

The Governor's "45 by 15" goal advances several policy objectives important to New Yorkers, including the need to lower energy costs, create jobs and stimulate the economy, improve energy reliability and security, and reduce greenhouse gas emissions. By promoting and facilitating the installation of renewable energy systems and energy efficiency improvements at residential and commercial properties all across the State, this bill will help the State achieve the "45 by 15" goal and will substantially advance our energy policy objectives.

Moreover, several municipalities have begun to implement or are seeking to implement sustainable energy loan programs. As local government officials and residents alike seek ways to advance the State's energy goals, several municipalities have launched programs similar to the sustainable energy loan program authorized by this bill. For example, the Town of Babylon has initiated a substantial program on Long Island, and the City of Binghamton and the Town of Bedford have obtained specific State legislation to initiate their programs. This bill would authorize any municipality to enact a local law to commence a program that advances the State's energy goals by making energy efficiency improvements and renewable energy systems more affordable to all property owners.

Finally, this bill would also assist local governments in applying for funding made available through the American Recovery and Reinvestment Act of 2009 ("ARRA"). The United States Department of Energy has competitive grant opportunities available to local governments that may be used to support sustainable energy loan programs. The State improves its chance of obtaining such federal assistance with passage of this bill because municipalities will be able to demonstrate that they can leverage the federal funds through use of the sustainable energy loan program, and maintain the program beyond the life of the ARRA funds.

Budget implications

This bill would not have State budget implications.

Effective date

This bill would take effect immediately.