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[Ellen Czajkowski (Legislative Counsel)]: A lot of ways that how residential PACE currently works. So, the first section is establishing new sections specific to the commercial PACE program. And then the following sections after that amend the residential PACE program to incorporate some of the commercial PACE. It allows that the commercial PACE program can have some of the same as residential PACE. So, on page one, section one, the first new section being created is thirty two seventy five, PACE District's approval of legislative bodies. The legislative body of a town, city, or incorporated village may vote to designate the municipality as a commercial property assessed clean energy district, or CPASE district. In a district, only those property owners who have entered into written agreements with the municipality under 3276, the next section, would be subject to a special assessment as set forth in 3255.
[R. Scott Campbell (Vice Chair)]: In
[Ellen Czajkowski (Legislative Counsel)]: this subchapter, district needs a commercial property assessed clean energy district, which includes the entire municipality. So,
[Kathleen James (Chair)]: who have entered into written agreements with the municipality under section three thousand two and seventy six, which we're about to get to, and then as set forth in section 3,255, does that park back to the PACE program or to the general authority setting? The PACE program. Okay. So it goes back to the residential case.
[Laura Sibilia (Ranking Member)]: Which is in section six.
[Kathleen James (Chair)]: Upon
[Ellen Czajkowski (Legislative Counsel)]: a vote of approval by a majority of the legislative body of the municipality voting at a duty work meeting, the municipality shall allow for the imposition of a special assessment to secure private financing for property owners for projects relating to renewable energy as defined in '30 BSA 08/2017. And what's that? The definition of renewable energy. Okay. Or to eligible projects relating to energy efficiency as defined in '32 to 70 '6, which is the residential PACE program. May want to consider that
[Kathleen James (Chair)]: definition because it is slightly different.
[Ellen Czajkowski (Legislative Counsel)]: So the top of page two, undertaken by owners of commercial or industrial buildings within the boundaries of a municipality. As used in this chapter, commercial or industrial building need any building other than a residential dwelling with fewer than five units. So as I said before, the existing PACE program is specific to residential buildings only, and this is creating a separate, program for commercial buildings, but it does include industrial, and it's anything other than a residential building with less than five units, so it could also include multiunit dwellings with
[R. Scott Campbell (Vice Chair)]: more than five units. Five units are barred. Yeah. Yeah.
[Kathleen James (Chair)]: K. So the legislative body, so the select board or the board of aldermen or whatever, has to warn a meeting and have a majority vote to establish the entire municipality as a as a C PACE district. And then within that town, then once that's put forward, any commercial or industrial building, which would include residential buildings with five units or up, can pursue this financing mechanism that's for renewable energy projects. Yes. Okay.
[Ellen Czajkowski (Legislative Counsel)]: Page two, section thirty two seventy six, written agreements, consent of property owners, energy savings analysis, lender consent, upon an affirmative vote made in the prior section, and the performance of an analysis pursuant to subsection B, which is the next section, an owner of a commercial or industrial building within the boundaries of a district may enter into a written agreement with the municipality that shall constitute the owner's consent to be subject to a special assessment as set forth in 03/1955. Entry into such agreement may occur only after 01/01/2027. Prior to entering into a written agreement, a property owner shall have an analysis performed that includes the following components. Where energy or water usage improvements are proposed, an energy analysis by a licensed professional engineer or engineering firm stating
[Kathleen James (Chair)]: that
[Ellen Czajkowski (Legislative Counsel)]: the proposed qualified improvements will either result in more efficient use or conservation of energy or water, the reduction of greenhouse gas emissions, or the addition of renewable sources of energy or water. On to page three, Where renewable energy is proposed, an engineering study showing that the improvements are feasible. Where resilience improvements are proposed, certification by a licensed professional engineer stating that the qualified improvements will result in improved resilience in accordance with local, state, or nationally recognized building standards. Or for new construction, certification by a licensed professional engineer or engineering firm stating that the proposed qualified improvements will enable the project to exceed the energy efficiency or water efficiency or renewable energy or water usage requirements of the current building code.
[Kathleen James (Chair)]: Okay. So, the owner will contract with a licensed firm to do this analysis. And the scope of the projects could be something that reduces your energy or water use, makes it making it more efficient, reduces your emissions, or adding, you could be putting on solar or something. Right? You could add be adding renewable some kind of renewable generation. It has to be feasible or it could be a resilience project. I'm a little less clear on that. Are we gonna talk about that later in the bill? No. It's
[Ellen Czajkowski (Legislative Counsel)]: not defined anywhere.
[Laura Sibilia (Ranking Member)]: I'm also wondering about what feasible subdivision that you need.
[Kathleen James (Chair)]: I wonder if that's something that just maybe that's just an engineering word, but we can find out about that. Okay. And then interesting. So that they will that the proposed improvements will enable the project to exceed the current building code. Does that mean the RVs? That's what
[Laura Sibilia (Ranking Member)]: that I think I
[Kathleen James (Chair)]: What does that mean?
[Laura Sibilia (Ranking Member)]: I I made it there to that too. Yes. I think we have to define that as well. In this instance, it's one of
[Richard Bailey (Member)]: the ACVs because it's relating
[R. Scott Campbell (Vice Chair)]: to Sleepies. Well, you know
[Kathleen James (Chair)]: Oh, right.
[Laura Sibilia (Ranking Member)]: Yeah. But it might be RVs if it's if it's I'm you know. I'm in
[R. Scott Campbell (Vice Chair)]: I think
[Bram Kleppner (Member)]: Five AM. Been living quarters. 5AM. I
[Laura Sibilia (Ranking Member)]: think that's still. And
[Kathleen James (Chair)]: then are there stretch codes for CDs? Yeah. That's a residential thing. Okay. And does that does this get us into the whole 2020 versus 2024 thing?
[Laura Sibilia (Ranking Member)]: Oh, sure.
[Kathleen James (Chair)]: Okay. On we go.
[Laura Sibilia (Ranking Member)]: Should that say CVs? I mean, basically, because it's that's what we're talking about. Energy issues.
[Ellen Czajkowski (Legislative Counsel)]: Right.
[Kathleen James (Chair)]: Couldn't be like now I'm trying to remember from the bill. You or it could don't some municipalities have building codes or no? Does nobody have one locally?
[Laura Sibilia (Ranking Member)]: Well, some municipalities enforce energy codes. Enforce energy codes.
[Kathleen James (Chair)]: Energy codes, but no municipality has its own building code.
[Laura Sibilia (Ranking Member)]: Well, they yes. They have they apply and enforce the state building code under agreement with the Division of Fire Safety. I forget how many municipalities do that, but a handful.
[Kathleen James (Chair)]: K. So we have to figure that out. It was too vague. A
[Ellen Czajkowski (Legislative Counsel)]: written agreement shall provide that the length of time allowed for the property owner to repay the assessment shall not exceed the life expectancy of the project. Instances where multiple projects have been installed, the length of time shall not exceed the average lifetime of all projects weighted by cost. Notwithstanding any other provision of law, a lien under this section is a first and prior lien on the property subordinate only to a lien for property taxes from the date on which the notice of special assessment is reported until the assessment interest or penalty is paid. On to page four, the lien runs with the land and that portion of the assessment under the assessment contract that is not yet due shall not be accelerated or extinguished by foreclosure of a property tax lien or any other foreclosure. So, the municipality, by creating this district, has the authority for any of the property owners that are going to be subject to the special assessment, putting a lien on the property that is first in priority over other liens on the property. And as we will continue to hear about this, the property owner repays the funding for the efficiency improvements on the property tax bill, which is the special assessment here.
[R. Scott Campbell (Vice Chair)]: So they repay a loan through the tax department of the municipality? Yes.
[Bram Kleppner (Member)]: And so where does that loan come from? Is it from the municipality or from a commercial lender?
[Ellen Czajkowski (Legislative Counsel)]: Residential PACE is, I think, at least in part alone through the municipality. Under commercial PACE, the municipality is not as involved and is not offering any funding. There are options for whoever the private lender is to to lend the funding for this, and then it's repaid through the special assessment.
[Bram Kleppner (Member)]: So you pay the municipality and the municipality forwards the money to the commercial lender? Yes.
[Ellen Czajkowski (Legislative Counsel)]: There are different options under here on how that could happen.
[Kathleen James (Chair)]: But it's only the commercial property owner who's paying The special assessment. Yeah, it's not like it's spread across all the property owners in the district. Correct. So if I've I've got my building and I'm gonna put on solar and install geothermal or whatever, and I'm gonna pursue private financing for that. But the the proper my property tax bill, my individual property tax bill on that property is gonna serve as almost like sort of a pass through mechanism for the repayment of the loan.
[R. Scott Campbell (Vice Chair)]: Yes.
[Bram Kleppner (Member)]: It's a little bit like a chip program.
[Kathleen James (Chair)]: Yeah. Just It feels chip like.
[Bram Kleppner (Member)]: Energy projects instead of infrastructure projects. It's
[Kathleen James (Chair)]: good. Feels like to me
[R. Scott Campbell (Vice Chair)]: feel And there.
[Laura Sibilia (Ranking Member)]: I still don't understand the premise here. Like, why not just a part
[Kathleen James (Chair)]: Take out right. That's what we're gonna have to hear about.
[Laura Sibilia (Ranking Member)]: We should go through the whole deal because this it gets explained. I mean, part part of part of the premise is that the payback is over a longer period of time than than you would do on a on a on a on a private loan. It's also tied to the property and to the borrower. So the idea is to make it a positive cash flow situation, although that's I'm referring to here. And we thought, yeah, I don't know. Okay,
[Kathleen James (Chair)]: on we go then.
[Ellen Czajkowski (Legislative Counsel)]: Page three I'm sorry, page four, line four. In the event of a foreclosure action, all payments on an assessment under the subchapter that are due and unpaid as of the date the action is filed, and all payments on the assessment that become due after that date and that accrue up to and including the date titled to the property is transferred to the mortgage holder, the lienholder or third party in the foreclosure action, shall be paid in order for title to transfer. So, when someone is going to sell the property, if there's money owed on the specialist, that that needs to be paid before the property can be transferred. It doesn't and it's not paying the full amount due. It's only paying back owed assessments because the, again, loan stays with the property.
[Laura Sibilia (Ranking Member)]: So any any past due is what Yes.
[Ellen Czajkowski (Legislative Counsel)]: The past due needs
[R. Scott Campbell (Vice Chair)]: to be paid first. K.
[Bram Kleppner (Member)]: And if there's no foreclosure, if you're just selling the property, then the buyer has to agree to assume the payments and the debt?
[R. Scott Campbell (Vice Chair)]: Yes. And
[Bram Kleppner (Member)]: it just continues smoothly. Got it. Thank you.
[Ellen Czajkowski (Legislative Counsel)]: A capital provider shall disclose participating property owners each of the following. The risks associated with participating in the program, including risks related to the failure of participating property owners to make payments and the risk of foreclosure, and the provisions of subsection H of this section that pertain to prepayment of the assessment, which is coming up further down. The notice of an agreement shall include at least each of the following. The name of the property owner as grandeur, the name of the municipality as grantee, the date of the assessment. Onto page five. A legal description of real property against which the assessment is made pursuant to the agreement. The amount of the assessment and period during which the assessment will be made on the property. A statement that the assessment will remain a lien on the property until paid in full or released, and the location at which the original agreement may be examined. Prior to entering into a written assessment contract, The property owner shall obtain and furnish to the municipality a written statement executed by each holder of a mortgage or deed of trust on the property securing indebtedness in their sole and absolute discretion that consents to the assessment and indicates that the assessment does not constitute an event of default under the mortgage or deed of trust. So this is lender consent, so the other mortgage holders have to consent to this.
[R. Scott Campbell (Vice Chair)]: And those mortgage holders are now gonna be subordinate to this? Correct. What you call an assessment at Galloway? Yeah.
[Ellen Czajkowski (Legislative Counsel)]: The combined amount of assessment plus any outstanding mortgage obligations for the property shall not exceed 90% of the assessed value of that property. With respect to an agreement under this section, the assessments shall be repaid under the agreement when calculated as if they were the repayment of a loan, shall not violate nine DSA sections 41A, 43, 44, and 46 through 50. That chapter of law has to deal with the law regarding interest on loans and, the requirements for any loan contract. So it's they have to comply with that. There is one exception in there that we'll talk about at the end.
[Laura Sibilia (Ranking Member)]: What does it say about interest on the other side? Sorry.
[Ellen Czajkowski (Legislative Counsel)]: I have to comply with those statutes on interest.
[Laura Sibilia (Ranking Member)]: But, I mean, what what kind of generally, what kind of restrictions does that include?
[Ellen Czajkowski (Legislative Counsel)]: I could come back to
[Laura Sibilia (Ranking Member)]: you on that. Second. I'm gonna. Sorry. I'm So
[Richard Bailey (Member)]: does that imply that a payment of this loan is done when the tax bills are issued, or is there a different mechanism that makes it a monthly assessment payment?
[Kathleen James (Chair)]: I don't know. You think it would be twice a year. Right? When you
[Laura Sibilia (Ranking Member)]: Well, once a year.
[R. Scott Campbell (Vice Chair)]: Mean, Yeah. This belt neglects. It's
[Kathleen James (Chair)]: Oh, right. Okay. Ours does sit twice a year, so I
[R. Scott Campbell (Vice Chair)]: guess substantial pain. But but it's we'll get in we'll get into this. Detail. We'll have to get into the detail later. Yep.
[Ellen Czajkowski (Legislative Counsel)]: K. Page six. The maximum length of time for the owner to repay the assessment shall not exceed thirty years. For projects under subchapter two of this chapter, which is residential PACE, there shall be no penalty or premium for prepayment of the outstanding balance of an assessment under the subchapter if the balance is prepaid in full. Projects under this subchapter three, CPACE, are not subject to these provisions, but shall be determined by the private agreement for financing of improvements. Under residential PACE, there's no penalty for prepayment, paying on the loan early, but for CPAs, that requirement doesn't apply and it's just subject to what the terms of the contract with the lender
[Laura Sibilia (Ranking Member)]: are. A question about that. It says regarding the residential PACE, there's no penalties for prepayment if the balance is prepaid in full. Is that the only that seems to require that you can't prepay.
[Kathleen James (Chair)]: Oh, right.
[Laura Sibilia (Ranking Member)]: If you prepay, have to keep the whole thing. Is that is that the correct understanding?
[Kathleen James (Chair)]: I don't know.
[Laura Sibilia (Ranking Member)]: Yep. So it says for sure. K. And I'll I'll I'll question that too.
[Kathleen James (Chair)]: Okay. Gonna take your question. Sorry. Was looking down.
[R. Scott Campbell (Vice Chair)]: It's the same thing. We have to it's into the it's in the details. So it's gonna be a lot of Yeah. Details in there that are that raise questions.
[Laura Sibilia (Ranking Member)]: Mhmm. Okay.
[Ellen Czajkowski (Legislative Counsel)]: Property may be eligible for financing if otherwise qualified improvements were completed and operational not more than thirty six months prior to submission of the application to the program. Waivers to the thirty six month requirement may be granted in the sole discretion of the program administrator.
[Laura Sibilia (Ranking Member)]: Who is that again?
[Ellen Czajkowski (Legislative Counsel)]: So, we're gonna talk about the program administrator.
[Laura Sibilia (Ranking Member)]: Oh, here we go.
[Ellen Czajkowski (Legislative Counsel)]: It may or may not be the municipality. Okay. Section 32.77, program administrators CPAES Program Administration. An entity that administers the Commercial Property Assessed Clean Energy Program, or CPAES program, under the subchapter shall be referred to as a program administrator. A municipality, a public agency, or a private entity may serve as a program administrator. However, a capital provider or a lender shall not serve as a program administrator in a municipality where it is also lending. On to page seven. A municipality that has adopted a CPACE district may enter into a contract with the entity to serve as the program administrator and to administer the functions of the CPASE program for that municipality, or serve as the program administrator itself to administer the functions of a CPASE program, including entering into CPASE agreements with commercial property owners in its jurisdiction and collecting CPASE assessments. An entity may enter into a contract with the CPASE municipality where the entity shall serve as the program administrator in the municipality and collect fees necessary to administer the CPAs program. Other than the fulfillment of its obligations specified in a CPAs agreement, neither the program administrator nor a municipality has any liability to a commercial property owner for or related to energy savings or resilience improvements financed under a CPACE program. The Department of Financial Regulation shall consult with relevant stakeholders, including the Vermont League of Cities and Towns, the Vermont Economic Development Authority, Efficiency Vermont, and agencies from other states with CPA's programs in order to identify appropriate entities to serve as program administrators. Page eight. Section two is amending one of the existing statutes on residential case 24 BSA three thousand two and sixty three, cost of operation of district. The owners of real property who have entered into agreements with the municipality for a residential PACE under 03/1962 shall be obligated to cover the cost of operating the district. The municipality may use other available funds to operate the district. That's the existing block. A municipality may charge fees to cover the operation of the seed PACE program under subchapter three of this chapter. So, it did already say in the prior section that towns are allowed to charge fees, but it's adding it here under the existing statute related to residential fees.
[Laura Sibilia (Ranking Member)]: Charge fees to The People who take advantage of Yes. The
[R. Scott Campbell (Vice Chair)]: people who are in the program, yes. Is that obvious?
[Laura Sibilia (Ranking Member)]: I'll be honest with you. The owners of real property rent and to rent relief.
[Ellen Czajkowski (Legislative Counsel)]: Section three is amending 24 BSA 3,264, again part of residential PACE. A property owner who has entered into a written agreement with the municipality under 3,262 Residential PACE or 3,276 C PACE may enter into a private agreement for the installation or construction of a project relating to renewable energy as defined in Title 30 or relating to energy efficiency as defined in 3267. It does not anywhere define resilient project.
[Kathleen James (Chair)]: Okay, so here you're pointing out that renewable energy is defined in statute, energy efficiency is defined, but resilience is nowhere defined. Right. Okay. Is it is resilience defined anywhere in relevant statutes that we can just, like, park into? Oh, great.
[R. Scott Campbell (Vice Chair)]: Yeah.
[Laura Sibilia (Ranking Member)]: Gotta dig up your own. And
[Ellen Czajkowski (Legislative Counsel)]: I thought it was in here, but I don't think it is. So in 03/1967, it defines what an energy efficiency project is, and it's an energy efficiency project is defined as something that Efficiency Vermont has identified as being an efficiency project, and I don't know if they are still doing that. So, you
[R. Scott Campbell (Vice Chair)]: may wanna hear about that.
[Kathleen James (Chair)]: Okay. Which part is that? As defined in section 32.67? Yes.
[Bram Kleppner (Member)]: Sorry, can I go back to the definition of resilience for a second? Not defined anywhere in Vermont's statute. Have you checked to see if other states have definition or if the feds have definition?
[Ellen Czajkowski (Legislative Counsel)]: I have not.
[Laura Sibilia (Ranking Member)]: There's a good definition in the resilience plan that just came out. Riz? Yeah.
[Bram Kleppner (Member)]: The Vermont Riz? Yeah. Yeah. It's like, okay.
[Laura Sibilia (Ranking Member)]: Well And we can start there anyway. Place and start. Yeah.
[Kathleen James (Chair)]: And the word resilience is missing from this property rights section.
[Ellen Czajkowski (Legislative Counsel)]: Section four, twenty four BSA three thousand two and sixty five, again still part of residential PACE liability of municipality. A municipality that incurs indebtedness for or otherwise finances projects under this subchapter shall not be liable for the failure of performance of a project. A municipality that incurs indebtedness for bonding under the subchapter shall pledge the full faith and credit of the municipality. Again, those are the existing provisions for residential PACE, but different languages added off the top of page nine. A municipality that enters into a written agreement with a property owner under subchapter three, the CPAES program, shall not incur any indebtedness or otherwise financed projects under this chapter, nor shall be liable for the failure of the performance of a project, nor pledge the full faith and credit of the municipality. So, this is the key distinction between the two programs. The existing residential PACE program does have the municipality potentially bonding to cover the financing for these projects and also pledging the full faith and credit of municipality. But for CPAPES, that is not true. The funding will come from an outside body, a lender of some kind.
[Bram Kleppner (Member)]: And that is presumably to protect the other taxpayers in town from being saddled with so much project?
[Ellen Czajkowski (Legislative Counsel)]: I'm not sure that's the case because the residential PACE program does also have a reserve fund that covers for lack of repayment. I think C PACE is apparently considered different, and it's just seeking to use a different financing mechanism than residential PACE did.
[Kathleen James (Chair)]: Well, I mean, I was
[R. Scott Campbell (Vice Chair)]: Was there a bonding after 2010 for residential PACE, like a a bond that when my talents bond something for a project, They get lumped in with all sorts of other towns and, yeah, and take get to the bond by the Vermont Bond Bank or somebody over the carriers office space. All sorts of criteria. Like, you can't prepay for eight years on those bonds. I
[Laura Sibilia (Ranking Member)]: don't know.
[R. Scott Campbell (Vice Chair)]: Yeah. So okay. We have.
[Ellen Czajkowski (Legislative Counsel)]: Page nine, section five. 24 BSA three thousand two and sixty eight. Again, this is existing language for the residential PACE program. A municipality shall release a participating property owner of the lien on the property against which the assessment under this subchapter or subchapter three, CPACE, is made upon full payment of the value of the assessment. Notice of a release of a lien for an assessment under this subchapter, which is Residential PACE four, Subchapter three C PACE, shall be filed with the clerk of the applicable municipality for recording of the land record of that municipality. Section six thirty two. 55, collection of assessments, liens, a special assessment under this chapter shall constitute a lien on the property against which the assessment is made in the same manner and to the same extent as taxes generated on the grand list of municipality, and all procedures and remedies for the collection of taxes shall apply to the special assessment. Under page 10. Notwithstanding subsection A, a lien for an assessment under subchapter two, so residential case, shall be subordinate to all liens on the property in existence at the time the lien for the assessment is filed on the land records. Shall be subordinate to a first mortgage on the property recorded after such filing, and shall be superior to any other liens on the property recorded after such filing. In no way shall this subsection affect the status or priority of any municipal lien other than a lien for a special assessment under subchapter two of this chapter, which is residential case. A lien for an assessment under subchapter three for c phase shall be exempt from the provisions of this section and upon receipt of consent from lenders pursuant to thirty two seventy six e shall not be subordinate to all other liens on the property in existence at the time the lien for the assessment is filed on the land records.
[Laura Sibilia (Ranking Member)]: First, just have a question.
[R. Scott Campbell (Vice Chair)]: We're we're only modifying the section that's underlined. Yes. The stuff that's not underlined stays as subordinate, already just in the residential phase. Yes.
[Laura Sibilia (Ranking Member)]: So what this does is residential PACE is subordinate to mortgage loans, another name is prior prior Prior time. Yeah. The time. But in commercial side, the assessment is superior to everything else.
[Ellen Czajkowski (Legislative Counsel)]: Subject to lender consent. They'll need to get consent from the existing mortgage holders.
[Laura Sibilia (Ranking Member)]: Bankers agree to that?
[Ellen Czajkowski (Legislative Counsel)]: They did agree to that because I don't know if there will be consent.
[R. Scott Campbell (Vice Chair)]: So you should probably hear about that. So just like you get a home equity line of credit, you're not taking don't know. How's that word? So you you may have well, if you pay off a loan and go remortgage, you want a bulk of money. You have a line of credit that you don't take, but you can take, and you get a mortgage. That mortgage wants to come in above the money you haven't yet borrowed, but is recorded. By the credit.
[Laura Sibilia (Ranking Member)]: Right here. Thank you. Oh, yes. The
[Ellen Czajkowski (Legislative Counsel)]: last section is section seven. It's a vending nine BSA section 46. This is related to Okay. So section 43 of this title relating to deposit requirements and section 45 of this title relating to prepayment penalties shall not apply, and the parties may contract for a rate of interest in excess of the rate provided in section 41A of this title in the case of So these are things that are the exceptions to the rules regarding prepayments and interest and is adding on page 11 the obligations incurred for C PACE under Windham BSA Chapter 87 Subchapter three. So, the projects, as already discussed, are exempt from the requirement that there be no prepayment penalties, so they're exempt for that. They're allowed to have such penalties. And section eight is the effective date, which is 07/01/2026.
[Kathleen James (Chair)]: Okay. So testimony. Just looking ahead, we are hearing from some folks who work on C PACE programs, nationally at, at two. We are hearing from Yeah, so we've got some testimony coming that I hope is kind of high level and gives us more of a national perspective on what these programs are and how they work. We are going to be hearing from VITA, DFR, the Bankers Association, the League of Cities and Towns, and the Chamber. And then I jotted down as we were talking. I wasn't sure, Alex, did we reach out to efficiency Vermont? For k. Because there was a list of organizations to be consulted, and I wanna make sure we hear from all of them. So department of financial regulation, we've got them coming in. League is coming in. Vida is coming in. Efficiency Vermont, we need to make sure they come in. And then I was thinking, I don't know if you had any luck. I feel like we should hear from the bill sponsor on this one. Is this I think I'm sitting on her chicken. Maybe. And I feel like maybe it would be helpful to have Thomas come in and give us a what you know, problem solution, why I sponsored this bill thing. I think that would be helpful. Let me make sure that he's the sponsor. He is. Okay. Then who else are we missing in terms of testimony? Do we hit all the high points?
[Laura Sibilia (Ranking Member)]: I think so. Yeah.
[Kathleen James (Chair)]: Yeah. Allen, I think we went from his that list. Is Michael on your list? Yes. Okay.
[R. Scott Campbell (Vice Chair)]: Think that's the only person I can think of.
[Kathleen James (Chair)]: He's coming in this afternoon.
[Laura Sibilia (Ranking Member)]: Okay.
[Kathleen James (Chair)]: Yeah.
[Richard Bailey (Member)]: Do you have any idea from working with the senate on how much this is taking advantage of with the residential at this time? Whether there's a huge amount of uptake of this program or not?
[Ellen Czajkowski (Legislative Counsel)]: I don't know if there was any testimony on that. I suspect there is little uptake of residential PACE.
[R. Scott Campbell (Vice Chair)]: Yeah. That includes my interest there.
[Kathleen James (Chair)]: Yep. That's what we've heard. That residential PACE hasn't really taken off in the way they had hoped, and that that'll be a good question for the league, probably.
[Laura Sibilia (Ranking Member)]: It would
[Kathleen James (Chair)]: have But that C PACE, there seems to be broader interest in C PACE and a feeling that it might be more useful. Is that all I know?
[Laura Sibilia (Ranking Member)]: I'm just wondering about BHFA has a similar program that that ties the loan to the electric. It's called. The musicians retain that assistance programs are going to Right.
[Kathleen James (Chair)]: Yeah. That's for lowing. Reservation. Lowing. Change it. Or
[Ellen Czajkowski (Legislative Counsel)]: Chambers coming in. Okay.
[Laura Sibilia (Ranking Member)]: It might be worth just asking. They have it with on pace on the efficacy pace. K. And and not just ask that we both. Both the protection of interest.
[Kathleen James (Chair)]: Okay. And I'll be combined with check.
[Ellen Czajkowski (Legislative Counsel)]: I'd rather
[Laura Sibilia (Ranking Member)]: Absolutely. I think these
[R. Scott Campbell (Vice Chair)]: are these are individual pieces of property, not the people that are served by the Infrastructure. Infrastructure that runs down the mine. It's commercial.
[Kathleen James (Chair)]: So if you're putting up a commercial property that also has some residential, You could you know, we can use chip. Could you also use this?
[R. Scott Campbell (Vice Chair)]: So you could use chip for an individual You're selling a contractor. Find residential, commercial, industrial.
[Kathleen James (Chair)]: Who who's doing chip? Is that No. It's.
[R. Scott Campbell (Vice Chair)]: But there are a lot of questions here where the body is coming from when they have the word municipal attached to it, are there advantages to what municipal bond is exempt from? The interest is exempt from federal income taxes. So where they're getting their money from and treatment of the interest of the person who's loaning the money, Or in this case, let's see, money and assessments are one of the same because it's municipality. It's called an assessment. I go to the bank. I borrow money. You know? Borrow assessment.
[Kathleen James (Chair)]: Yeah. That I I think that's why I'm interested in getting some higher level testimony on what this is what this is, why it's so beneficial. I I know it's private lenders. So you're getting a private loan. Right?
[R. Scott Campbell (Vice Chair)]: Yeah. But there's some provisions in here that was that under just the residential that the municipality can make an obligation? Just for residential. Just for residential.
[Laura Sibilia (Ranking Member)]: Commercial properties, you're only getting a loan to, like, ten years max. So this
[Kathleen James (Chair)]: So that it's probably the length of the
[Laura Sibilia (Ranking Member)]: can stretch it out. It's what I'm beginning to Yeah. Which which gives you a better greater opportunity to construct a cash flow positive situation.
[Kathleen James (Chair)]: Because this might be just a a mechanism within an entire municipalities to help efficiency projects pencil out because they can get more more beneficial term.
[Laura Sibilia (Ranking Member)]: Yes.
[Kathleen James (Chair)]: Thirty years as opposed to ten or whatever.
[R. Scott Campbell (Vice Chair)]: Might be
[Richard Bailey (Member)]: interesting to find out if there are towns that are doing the R. S. At this point. What the feelings from the townspeople were when they voted it in and how they find that it's working for them at this point. Okay. Whether there's any issues they're seeing with it with the repayment or any of
[Laura Sibilia (Ranking Member)]: the other clauses within the law that's
[Kathleen James (Chair)]: Hopefully, league. Mhmm. Well, today's testimony tomorrow today and tomorrow. We have, like, a ton of testimony blocked up on this today and tomorrow, and then I think we would know
[Ellen Czajkowski (Legislative Counsel)]: should be a lot of people
[Kathleen James (Chair)]: who can answer these questions and then Okay. Let us know who else we need to turn something next around to testimony. Like, if there's a town that, you know, town that did it, we get them in or, like like you said, maybe RPCs. DCs. Yeah. RDCs, maybe find out. DCs, actually. DCs do energy. Yeah. But DCs do development. Right? So you get some that are combined. Mhmm. Yeah. Maybe we could hear from Phil Colby. And maybe the your RPC. Love it. To manager. Alright. Hey. Yeah. Sorry. Yeah. Real quick.
[Bram Kleppner (Member)]: I know. I'm just
[R. Scott Campbell (Vice Chair)]: wondering
[Bram Kleppner (Member)]: commercial lenders, ten years, maybe twenty. So are are the commercial lenders saying, hey, since the municipality is collecting the money, it can be 30, or is the municipality the commercial lender getting paid in 20 of the municipality then holding the debt for the extra for the difference between the end of the commercial loan and the end of the loan.
[Laura Sibilia (Ranking Member)]: Mhmm.
[Bram Kleppner (Member)]: So it's just So somehow this is convincing commercial lenders to do thirty year commercial loans.
[Kathleen James (Chair)]: Right. So I'm curious to know why.
[Laura Sibilia (Ranking Member)]: It could be because some payments. Yeah. Commercial loans,
[R. Scott Campbell (Vice Chair)]: for these people that are involved in that, do they come with a balloon payment or the payment's over? So there's a balloon payment at the end of the ten years. So so the fact that but if the payments are structured for ten years, there's a blue payment at the end. So it could be that the obligator doesn't satisfy the loan for some number of years because he keeps renewing his his his lien against the property.
[Kathleen James (Chair)]: Well, I hope. I I asked the 02:00 I asked the two, 02:30, and 03:00 people, hopefully, to provide a high level overview of what this is and why folks like it and how it's beneficial.
[Laura Sibilia (Ranking Member)]: And and it in other states?
[Kathleen James (Chair)]: Does. May but I think more than that.
[Richard Bailey (Member)]: A lot of states.
[Ellen Czajkowski (Legislative Counsel)]: Yeah. Yeah. More than that. Thirty
[Kathleen James (Chair)]: eight is the number I'm
[Richard Bailey (Member)]: hearing. We're one of the very few that doesn't have a commercial based program.
[Laura Sibilia (Ranking Member)]: Yeah. Okay. Maybe we should hear how it's working. I'm assuming the senate heard how it's working in other states.
[Kathleen James (Chair)]: I assume
[Laura Sibilia (Ranking Member)]: Best practices, all that sort of thing.
[Kathleen James (Chair)]: You know, my understanding is that the folks we invited to come in this afternoon can help us with that. And if they can't, we'll find out in the. Okay. Ellen, thanks. Why don't we take a ten minute break, and we'll come back at two.
[Laura Sibilia (Ranking Member)]: Thanks, Helen.