Relates to the municipal sustainable energy financing program

Summary of provisions

Section 1 of the bill would amend the article heading of General Munici- pal Law ("GML") Article 5-L to read: "Municipal Sustainable Energy Financing Program."

Section 2 of the bill would amend GML § 119-ee to include additional legislative findings concerning the State's policy goals of achieving energy independence, preventing future energy shortages, and improving air quality and the general health and well-being of the people of the State; and delineating the necessity for the New York State Energy Research and Development Authority ("NYSERDA") and municipal corpo- rations to play a role in achieving such goals.

Section 3 of the bill would amend GML § 119-ff to include additional definitions for terms used in GML Article 5-L.

Section 4 of the bill would amend GML § 119-gg, as follows:

GML § 119-gg(1) would be amended to authorize any municipality with tax enforcement authority that establishes an MSEFP to use, in addition to federal grant assistance and federal credit support, proceeds from bonds issued by NYSERDA or other NYSERDA funds including grants and monies from the Green Jobs-Green New York Fund.

GML § 119-gg(2) would be amended to clarify that real property owners are limited to receiving MSEFP-financing for energy efficiency improve- ments or renewable energy systems through the municipal corporation where the benefitted real property is located, and that such owners could not receive financing for the same project from more than one municipal corporation.

GML § 119-gg(3) would be amended to permit New York City to establish lists of cost effective energy efficiency improvements for different building types that could be financed through the MSEFP.

GML § 119-gg(4) would be amended to permit New York City to establish a system for verifying and reporting on the installation and performance of renewable energy systems and energy efficiency improvements financed by the MSEFP.

GML § 119-gg(5) would be amended to provide that a financing made through the MSEFP must be ,repaid over a term not to exceed the weighted average of the useful life of such systems and improvements as deter- mined by NYSERDA pursuant to an agreement with a municipal corporation.

GML § 119-gg(6) would be amended to change the term "appraised value" to "fair market value," which would be determined by a municipal corpo- ration or by NYSERDA pursuant to an agreement with a municipal corpo- ration, for the purpose of determining the maximum amount of financing available under the MSEFP, and to expand the list of eligible costs that may be included in the financing to include issuance costs of bonds, the costs of credit support and all other related transaction and adminis- tration costs.

GML § 119-gg(7) would be amended to reflect the use of the term "financ- ing" instead of "loan."

GML § 119-gg(8) would be amended to clarify that a charge imposed pursu- ant to GML Article 5-L would be and become a lien on the benefitted property at the same time and in the same manner as municipal taxes; that such lien would have a priority over all other liens and encum- brances on the property, except for liens securing taxes, special ad valorem levies and special assessments; and that in New York City, such lien would be subordinate to the lien of taxes, assessments, sewer rents, sewer surcharges and water rents, and the interest and charges thereon, and on parity with any lien arising from the nonpayment of any other charges of such city.

GML § 119-gg(9), which authorizes municipal corporations to require that MSEFP financing must be repaid by the property owner through a charge on the real property benefitted by such financing, would be renumbered GML § 119-gg(10) and amended to also provide that all state and local laws regarding the enforcement and collection of unpaid real property taxes of the municipal corporation would apply to the enforcement and collection of such unpaid charges, and that a municipal corporation may enter into agreements with another municipal corporation and NYSERDA relating to the administrative functions of the MSEFP.

New GML § 119-gg(9) would be require the municipal officer responsible for administering the MSEFP, upon the issuance of financing pursuant to GML 119-gg, to record with the appropriate recording officer a notice stating the existence, duration and amount of such financing.

New GML § 119-gg(11) would require that each MSEFP must disclose the consequences of failing to pay the charge associated with the financing, the effects of transferring ownership of the property, the approximate monthly and yearly charges associated with the MSEFP-financing, the

savings from the activities funded by the MSEFP-financing, and notifica- tion to the affected mortgagees of the charge and the lien associated with such financing.

New GML § 119-gg(12) would prohibit the acceleration of a MSEFP-financ- ing where a property owner failed to pay a charge on the real property benefitted by such financing, and would require property owners to disclose the MSEFP-financing to any subsequent purchaser, prior to the conveyance of his or her property.

New GML § 119-gg(13) would limit MSEFP-financing to: (i) a maximum financing amount that does not result in the amount of the property owner's total debt on the property, including the amount financed, exceeding 90% of the fair market value of the property, (ii) property that has no outstanding taxes or involuntary liens, and (iii) installed energy efficiency improvements and renewable energy systems that have a savings-to-investment ratio greater than 1.

New GML § 119-gg(14) would establish eligibility criteria for the MSEFP, setting forth that financing would only be available to property owners that (i) have not failed to pay property taxes during the interest-free period more than once in the past 3 years, or since the purchase of the property if less than 3 years, and (ii) have not filed for or declared "bankruptcy during the previous seven years.

New GML § 119-gg(15) would authorize NYSERDA and any municipal corpo- ration with the power to enforce delinquent tax liens, in order to implement the MSEFP, to enter into a contract to provide for NYSERDA; to provide funding for financings pursuant to this section and for the municipal corporation to transfer or assign to NYSERDA or its designee any funds received by the municipal corporation as a result of charges imposed on owners of real property pursuant to GML § 119-gg.

New GML § 119-gg(16) would authorize a municipal corporation to enter into such contracts with third parties, including other municipal corpo- rations, to implement the MSEFP upon terms and conditions deemed appro- priate by such municipal corporation.

New GML § 119-gg(17) would provide that nothing in GML Article 5-L would prevent a town from electing to proceed under Town Law § 209-i of the Town Law.

Section 5 of the bill would amend GML Article 5-L by adding two new sections, as follows:

New GML § 119-hh would:

* authorize New York City to cause the incorporation of one, or more corporations under the not for profit corporation law to provide assist- ance to it in the implementation of its MSEFP.

* set forth a pledge by the State to the holders of any issue of bonds that the State would not limit, alter or impair the rights and remedies of such bondholders or the security for such bonds until such bonds are fully paid and discharged.

*establish that bonds issued pursuant to this section are securities in which various public officers and bodies of the State, public corpo- rations, and other entities may properly and legally invest funds.

* exempt an entity described in GML § 119-hh(1) from any fees, taxes, special ad valorem levies or assessments of any kind, including, but not limited to, franchise taxes, sales taxes or other taxes, upon or with respect to any property owned by it. GML § 19-hh(4) would also exempt from taxation the bonds of such entity together with the income there- from.

New GML § 119-ii would provide a severability provision for GML Article 5-L.

Section 6 of the bill would provide for an immediate effective date.

Existing law

Chapter 497 of the Laws of 2009 authorizes the legislative body of any municipal corporation to establish, by local law, a sustainable energy loan program using federal grant assistance or federal credit support available for this purpose.

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 establish a sustainable energy loan program using federal grants avail- able for this purpose.

Chapter 336 of the Laws of 2009 authorizes the Town of Bedford to estab- lish a sustainable energy loan program using federal grants available for this purpose.

Legislative history

This is a new bill.

Statement in support

In his 2009 State of the State address, Governor Paterson outlined his plan to meet 45% of the State's electricity needs through clean renewa- ble energy and improved energy efficiency by 2015 ("45 by 15"). During the 2009 special session, the Legislature enacted one component of the 45 by 15 plan by authorizing municipalities to promote and finance the installation of renewable energy systems and energy efficiency using

federal funds. This bill would expand the financial resources available to the State's MSEFP in order to better combat climate change.

Effective date

Immediately.