First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0556.02 Jason Gelender HOUSE BILL 11-1047 HOUSE SPONSORSHIP Jones, SENATE SPONSORSHIP Schwartz, House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning the inclusion of commercial buildings in the Colorado new energy improvement district. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill expands the scope of the new energy improvement program established by the Colorado new energy improvement district pursuant to the "New Energy Jobs Creation Act of 2010" by making commercial buildings, including buildings owned or used by nonprofit entities, eligible to be included in the district and making appropriate conforming amendments. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 32-20-102 (1) (b), Colorado Revised Statutes, is amended to read: 32-20-102. Legislative declaration. (1) The general assembly hereby finds and declares that: (b) In many cases, the owner of eligible real property is unable to fund a new energy improvement because the owner does not have sufficient liquid assets to directly fund the improvement and is unable or unwilling to incur the negative net cash flow likely to result if the owner uses a typical home equity loan or line of credit, commercial loan or line of credit, or other loan to fund the improvement. SECTION 2. 32-20-103 (4), (7), and (11), Colorado Revised Statutes, are amended, and the said 32-20-103 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 32-20-103. Definitions. As used in this article, unless the context otherwise requires: (1.5) "Commercial building" means an improvement to real property that is designed for use predominantly as a place of business for a for-profit or nonprofit entity. The term also includes any other improvement or connected land that is billed with the improvement for purposes of ad valorem property taxation. (4) "Eligible real property" means a commercial building or a residential building, located within a county in which the district has been authorized to conduct the program as required by section 32-20-105 (3), on which or in which a new energy improvement to be financed by the district has been or will be completed. (7) "New energy improvement" means one or more on-site energy efficiency improvements or renewable energy improvements, or both, made to eligible real property that will reduce the energy consumption of or add energy produced from renewable energy sources only to any portion of the eligible real property that is used predominantly as a place of residency the eligible real property. (11) "Reimbursement or a direct payment" means the payment by the district to a district member, or on behalf of such a district member to a contractor that has completed a new energy improvement to the district member's eligible real property, of all or a portion of the cost of completing a new energy improvement. Utility rebates offered to program participants by a qualifying retail utility for the purpose of compliance with renewable energy targets established in section 40-2-124, C.R.S., shall be subject to the retail rate impact cap established pursuant to section 40-2-124 (1) (g) (I), C.R.S. The maximum amount of reimbursement or a direct payment that may be made shall be the lowest of the full cost of completing a new energy improvement, twenty percent of the actual value, as specified in the records of the county assessor, of the eligible real property to which the new energy improvement is made, or, in the case of an improvement to eligible real property that is a residential building only, twenty-five thousand dollars; except that the twenty-five thousand dollar limit shall be adjusted by the district for each calendar year commencing on or after January 1, 2012, based on the consumer price index for the Denver-Boulder-Greeley metropolitan statistical area for the state fiscal year that ends in the preceding calendar year. SECTION 3. 32-20-105 (3) (d), (3) (e), and (4), Colorado Revised Statutes, are amended to read: 32-20-105. District - purpose - general powers and duties - new energy improvement program. (3) The district shall establish, develop, finance, and administer a new energy improvement program. However, the district may conduct the program within any given county only if the board of county commissioners of the county has adopted a resolution authorizing the district to conduct the program within the county. The program shall be designed to allow an owner of eligible real property to apply to join the district, receive reimbursement or a direct payment from the district, and consent to the levying of a special assessment on the eligible real property specially benefited by a new energy improvement for which the district makes reimbursement or a direct payment. The district shall establish an application process for the program, which may allow an owner of eligible real property to become a qualified applicant by submitting an application to the district and which may include one or more deadlines for the filing of an application. The district may charge program application fees. In order to administer the program, the district, acting directly or through a program administrator or such other agents, employees, or professionals as the district may appoint, hire, retain, or contract with, shall: (d) Encourage any qualified applicant to obtain an online or on-site home or commercial building energy audit in order to ensure the efficient use of new energy improvement funding pursuant to this article; (e) Inform prospective program applicants and qualified applicants of private financing options not provided by the district, including but not limited to, as appropriate, home equity loans and home equity lines of credit and commercial loans and commercial lines of credit, that may, with respect to a particular applicant, represent viable alternatives for financing new energy improvements; (4) The district shall establish underwriting guidelines that consider program applicants' qualifications, credit-worthiness, home or commercial building equity, and other appropriate factors, including but not limited to credit reports, credit scores, and loan-to-value ratios, consistent with good and customary lending practices, and as required in order for the district to obtain a bond rating necessary for a successful bond sale. The district shall also arrange for an appropriate loss reserve in order to obtain the necessary bond rating. SECTION 4. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.