An Act To Allow for the Establishment of Commercial Property Assessed Clean Energy Programs”
Maine Legislature, Session 129, LD 1748
Committee Amendment CA_A_S458 (Senate)

COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748, Bill, “An Act To 
Allow for the Establishment of Commercial Property Assessed Clean Energy Programs”
Amend the bill in section 1 in §10202 by inserting after subsection 3 the following:
'4.  Commercial PACE lien.  "Commercial PACE lien" means a lien secured against 
a qualifying property that is created by a commercial PACE assessment.' 
Amend the bill in section 1 in §10202 by striking out all of subsections 6 and 7 (page 
1, lines 27 to 34 and page 2, lines 1 to 10 in L.D.) and inserting the following:
'6.  Energy savings improvement.  "Energy savings improvement" means an 
improvement or series of improvements to qualifying property that, as determined by the 
trust, are new and permanently affixed to qualifying property and that:
A.  Will result in increased energy efficiency or substantially reduced energy use and:
(1)  Meet or exceed applicable United States Environmental Protection Agency 
and United States Department of Energy Energy Star program or similar energy 
efficiency standards established or approved by the trust; or
(2)  Involve weatherization of commercial or industrial property in a manner 
approved by the trust; or
B.  Involve a renewable energy installation, an energy storage system as defined in 
section 3481, subsection 6, an electric thermal storage system, electric vehicle supply 
equipment, or heating equipment that meets or exceeds standards established or 
approved by the trust.  Heating equipment that is not a renewable energy installation 
must be the lowest carbon emissions producing heating equipment reasonably 
available to the property owner, as determined by the trust, and must meet the 
requirements of section 10204, subsection 1, paragraph B.
7.  Qualifying property.  "Qualifying property" means real commercial property 
that:
A.  Does not have a residential mortgage;
Date: 
(Filing No. S-          )
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
B.  Is not owned by a residential customer or small commercial customer as defined 
in section 3106, subsection 1, paragraphs C and D;
C.  Consists of 5 or more rental units if the property is a commercial building 
designed for residential use;
D.  Is not owned by a federal, state or municipal government or public school; and
E.  Is located in a municipality that participates in a commercial PACE program 
pursuant to this chapter.' 
Amend the bill in section 1 in §10202 in subsection 8 in the last line (page 2, line 16 
in L.D.) by inserting after the following: "wind systems" the following: 'that do not on 
average generate more energy or heat than the peak demand of the property'
Amend the bill in section 1 in §10202 by renumbering the subsections to read 
consecutively.
Amend the bill in section 1 by striking out all of §§10203 to 10205 and inserting the 
following:
'§10203.  Commercial PACE programs
1.  Establishment; administration.  The trust, a 3rd party contracted by the trust or a 
municipality that has adopted a commercial PACE ordinance may establish a commercial 
PACE program.  Notwithstanding any other provision of law to the contrary, the trust 
may use funds from its administrative fund, program funds or fees on commercial PACE 
assessments to pay reasonable administrative expenses of the trust or to pay a 3rd party 
contracted by the trust for costs incurred to carry out the purposes of this chapter.
2.  Energy savings improvement financing.  Financing for energy savings 
improvements may be provided by any funds available for those improvements, except 
for proceeds from the regional greenhouse gas initiative as defined in Title 38, section 
580-A, subsection 19.  If funds are provided by a nongovernmental lender, including, but 
not limited to, banks and investment firms, the nongovernmental lender has the 
contractual right to receive commercial PACE assessment payments.  Commercial PACE 
financing may cover up to 100% of an energy savings improvement's costs, including 
audits, energy savings improvement development and application fees.
3.  Program administration; municipal participation and liability.  A commercial 
PACE program must be administered as follows.
A.  A municipality that has adopted a commercial PACE ordinance may:
(1)  Administer the functions of a commercial PACE program, including, but not 
limited to, entering into commercial PACE agreements with commercial property 
owners and collecting commercial PACE assessments; or
(2)  Enter into a contract with the trust to administer some or all functions of the 
commercial PACE program for the municipality, including billing and collection 
of commercial PACE assessments, except that the trust may not administer the 
collection of commercial PACE assessments in default pursuant to section 10205, 
subsection 5.
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
B.  The trust may enter into a contract with a municipality that has adopted a 
commercial PACE ordinance to administer commercial PACE program functions in 
the municipality.
C.  The trust may enter into a contract with a 3rd-party administrator to administer 
part or all of a commercial PACE program for a municipality.
D.  Notwithstanding any other provision of law to the contrary, staff or trustees of the 
trust, municipal officers and municipal officials, including, without limitation, tax 
assessors and tax collectors, are not personally liable to the trust or to any other 
person for claims, of whatever kind or nature, under or related to a commercial PACE 
program established under subsection 1, including, without limitation, claims for or 
related to uncollected commercial PACE assessments.
E.  Other than the fulfillment of its obligations specified in a commercial PACE 
agreement, neither the trust nor a municipality has any liability to a commercial 
property owner for or related to energy savings improvements financed under a 
commercial PACE program.
F.  The trust may collect fees necessary to administer commercial PACE programs.
4.  Quality assurance system.  Subject to the availability of funds, the trust shall, 
within one year of the establishment of a commercial PACE program under subsection 1, 
adopt by rule a quality assurance system for the commercial PACE program. In 
developing a quality assurance system under this subsection, the trust shall consult with 
industry stakeholders, including, but not limited to, representatives of clean energy and 
energy efficiency programs, contractors and environmental, energy efficiency and labor 
organizations.
5.  Terms and conditions.  The trust may, by rule, establish terms and conditions 
under which municipalities and commercial property owners may participate in a 
commercial PACE program established under subsection 1, which may include, but are 
not limited to, terms and conditions related to program design, implementation and 
administration, cost sharing, collection of commercial PACE assessments and recording 
of liens. The trust may vary the terms and conditions established under this subsection 
applicable to a participating municipality from those of other participating municipalities 
by mutual agreement with that municipality. Any terms or conditions established by the 
trust may not conflict with other provisions of this chapter.
A commercial PACE assessment may be used to secure financing for the construction of 
a new building or facility. Financing secured by a commercial PACE assessment for the 
construction of a new building or facility must be used for energy savings improvements 
on the property that significantly exceed the energy standards of the Maine Uniform 
Building and Energy Code, adopted pursuant to Title 10, section 9722, subsection 6, 
paragraph B, or the applicable energy code in the municipality where the project is 
located, as determined by the trust. A lender under this chapter may disburse funds for 
new construction projects before project completion.
6.  Model documents; educational materials.  The trust shall develop and provide 
to municipalities model commercial PACE ordinances, model commercial PACE 
agreements, other model forms and documents and educational materials for use by 
municipalities in the implementation of commercial PACE programs.
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
§10204.  Underwriting
1.  Underwriting.  A commercial PACE agreement entered into pursuant to a 
commercial PACE program must comply with underwriting requirements established by 
rule by the trust. Underwriting requirements established by the trust must, at a minimum:
A.  Provide that the term of the commercial PACE agreement not exceed the 
estimated useful life of the financed energy savings improvements;
B.  Require that the estimated cost savings from the energy savings improvements 
over the useful life of such improvements achieve for the property owner a savings-
to-investment ratio of not less than 1.0;
C.  Require that the qualifying property have a debt service coverage ratio of not less 
than 1.0 at the time the commercial PACE agreement is entered into;
D.  Require that the qualifying property have a loan-to-value ratio of not more than 
1.0 at the time the commercial PACE agreement is entered into, calculated by 
dividing the total amount of debt secured by the property by the property value;
E.  Require that the qualifying property's assessment-to-value ratio be no greater than 
0.35;
F.  Require proof of ownership of the qualifying property;
G.  Require that the qualifying property:
(1)  Be current on property taxes and sewer charges;
(2)  Have no outstanding and unsatisfied tax or sewer liens; and
(3)  Not be subject to a mortgage or other lien on which there is a recorded notice 
of default, foreclosure or delinquency that has not been cured;
H.  Require that the owner or owners of the qualifying property certify that there are 
no overdue payments on mortgages secured by the property; and
I.  Require escrows for commercial PACE assessment payments when appropriate.
§10205.  Commercial PACE assessments; collection; priority
1.  Collection of assessments.  A lender providing financing under a commercial 
PACE program has a lien on the qualifying property to secure the payment of an unpaid 
commercial PACE assessment. A lien resulting from a commercial PACE assessment on 
the qualifying property must be assessed and collected by the trust, a 3rd-party 
administrator contracted by the trust, a municipality or an agent designated by the trust or 
a municipality in any manner allowed under the commercial PACE program, consistent 
with applicable laws.  If the trust or a 3rd-party administrator contracted by the trust 
collects commercial PACE assessments on behalf of a municipality, the trust shall 
periodically report to the municipality on the status of the commercial PACE assessments 
in the municipality and shall notify the municipality immediately of any delinquent 
commercial PACE assessments. Upon receiving notification from the trust of a 
delinquent commercial PACE assessment, a municipality shall notify the holder of any 
mortgage on the property of the delinquent assessment.
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
2.  Notice; filing.  A notice of a commercial PACE agreement must be filed in the 
appropriate registry of deeds. The filing of this notice creates a commercial PACE lien 
against the property subject to the commercial PACE assessment until the amounts due 
under the terms of the commercial PACE agreement are paid in full. A notice filed under 
this subsection must, at a minimum, include:
A.  The amount of funds disbursed or to be disbursed pursuant to the commercial 
PACE agreement;
B.  The names and addresses of the current owners of the qualifying property subject 
to the commercial PACE assessment;
C.  A description of the qualifying property subject to the commercial PACE 
assessment, including its tax map and lot number;
D.  The duration of the commercial PACE agreement;
E.  The name and address of the entity filing the notice; and
F.  Written verification of mortgage lender consent, if there is a mortgage on the 
property.
3.  Priority.  A commercial PACE lien secures payment for any unpaid commercial 
PACE assessment and, together with all associated interest and penalties for default and 
associated attorney's fees and collection costs, takes precedence over all other liens or 
encumbrances except a lien for real property taxes of the municipality and liens of 
municipal sewer and water districts. From the date of recording, a commercial PACE lien 
is a priority lien against a property, subject only to liens set out in section 6111-A, Title 
36, section 552 and Title 38, sections 1050 and 1208, except that the priority of such a 
commercial PACE lien over any lien, except for a lien held by a sewer, water or other 
municipal district, that existed prior to the commercial PACE lien is subject to the written 
consent of such existing lienholder.
4.  Mortgage lender notice and consent.  Any financial institution holding a lien, 
mortgage or security interest in or other collateral encumbrance on the property for which 
a commercial PACE assessment is sought must be provided written notice of the 
commercial property owner's intention to participate in the commercial PACE program 
and acknowledge in writing to the commercial property owner and municipality that the 
financial institution has received such notice.  A commercial PACE assessment may not 
be approved until the financial institution holding the lien, mortgage or security interest in 
or other collateral encumbrance on the property has provided written consent to the 
commercial property owner and municipality that the borrower may participate and enroll 
the collateral property in the commercial PACE program.  This written consent must be 
filed in the registry of deeds.
5.  Collection, default and foreclosure.  A commercial PACE assessment for which 
notice is properly recorded under this section creates a lien on the property. The portion 
of the assessment that has not yet become due is not eliminated by foreclosure, and the 
lien may not be accelerated or extinguished until fully repaid.
A lien created by a commercial PACE assessment recorded in the registry of deeds and 
any interest, fees, penalties and attorney's fees incurred in its collection must be collected 
in the same manner as the real property taxes of the municipality in which the property is 
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
located. If a commercial PACE assessment is delinquent or in default, collection may 
occur only by the recording of liens and by foreclosure under Title 36, sections 942 and 
943. Liens must be recorded and released in the same manner as liens for real property 
taxes.
6.  Judicial sale or foreclosure by 3rd-party lienholder.  In the event of a judicial 
or nonjudicial sale or foreclosure by a 3rd-party lienholder of a property subject to a 
commercial PACE lien, the lien must survive the foreclosure or sale to the extent of any 
unpaid installment, interest, penalties or fees secured by the lien that were not paid from 
the proceeds of the sale.  All parties with mortgages or liens on that property, including 
without limitation commercial PACE lien holders, must receive on account of such 
mortgages or liens sale proceeds in accordance with the priority established in this 
chapter and by applicable law.  A commercial PACE assessment is not eliminated by 
foreclosure and cannot be accelerated.  Only the portion of a commercial PACE 
assessment that is in arrears at the time of foreclosure takes precedence over other 
mortgages or liens; the remainder transfers with the property at resale.
Unless otherwise agreed upon by the lender, all payments on a commercial PACE 
assessment that become due after the date of transfer by judicial or nonjudicial sale or 
foreclosure must continue to be secured by a lien on the property and are the 
responsibility of the transferee.
7.  Release of lien.  A municipality shall discharge a commercial PACE lien created 
under subsection 2 upon full payment of the amount specified in the commercial PACE 
agreement. A discharge under this subsection must be filed with the appropriate registry 
of deeds and must include reference to the notice required under subsection 2.' 
Amend the bill in section 1 in §10206 in subsection 1 in the 4th line (page 6, line 5 in 
L.D.) by striking out the following: "vendor certification" and inserting the following: 
'any applicable vendor certification required'
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively.
SUMMARY
This amendment makes the following changes to the bill.
1.  It defines "commercial PACE lien" and makes technical changes distinguishing 
between a commercial PACE lien and a commercial PACE assessment.
2.  It clarifies the definition of "qualifying property" to require that the property:
A.  Is not owned by a residential customer or small commercial customer as defined 
in the Maine Revised Statutes, Title 35-A, section 3106, subsection 1;
B.  Consists of 5 or more rental units if the property is a commercial building 
designed for residential use; and
C.  Is not owned by a federal, state or municipal government or public school.
3.  It allows that a commercial PACE assessment may be used to secure financing for 
the construction of a new building or facility and provides that financing secured for such 
projects must be used for energy savings improvements on the property that significantly 
COMMITTEE AMENDMENT “      ” to S.P. 582, L.D. 1748
COMMITTEE AMENDMENT
exceed the energy standards of the Maine Uniform Building and Energy Code or the 
applicable energy code in the municipality where the project is located, as determined by 
the Efficiency Maine Trust.
4.  It allows a lender to disburse funds for new construction projects financed through 
a commercial PACE assessment before project completion.
5.  It creates additional underwriting requirements for the savings-to-investment ratio, 
debt service coverage ratio and combined loan-to-value ratio of a qualifying property.
6.  It removes from the bill provisions regarding underwriting and disclosure that 
apply to the residential property sector.
7.  It clarifies that a lender providing financing under a commercial PACE program 
has a lien on the qualifying property to secure the payment of an unpaid commercial 
PACE assessment.
8.  It requires that if the trust or a 3rd-party administrator contracted by the trust 
collects commercial PACE assessments on behalf of a municipality, the trust must 
periodically report to the municipality on the status of the commercial PACE assessments 
and must notify the municipality immediately of any delinquent commercial PACE 
assessments and that upon receiving notification from the trust of a delinquent 
commercial PACE assessment, a municipality must notify the holder of any mortgage on 
the property of the delinquent assessment.
9.  It establishes the priority of a commercial PACE lien versus other liens that may 
be on the property.
10.  It creates requirements regarding the recording of commercial PACE 
assessments and commercial PACE liens.
11.  It creates and clarifies collection procedures for commercial PACE assessments 
that are delinquent or in default.
12.  It makes minor technical changes to clarify the bill and make the language 
consistent in each section.
Approved: 03/14/20
LD 1748
LR 1608(02)
Fiscal Detail and Notes
Current biennium cost increase - Efficiency Maine Trust 
Current biennium revenue increase - Efficiency Maine Trust 
This bill authorizes the Efficiency Maine Trust (EMT), a third party contracted by EMT or a municipality to establish 
and administer a commercial property assessed clean energy (PACE) program. The bill directs EMT to adopt a quality 
assurance system and develop and provide model commercial PACE ordinances, forms and other implementation 
materials to interested parties. EMT is authorized to collect fees to cover its costs of administering the program. The 
creation and administration of the commerical PACE program will result in additional expenditures by EMT. These 
expenditures will be offset by fees collected.  No estimate of these costs and revenues is made at this time.   
An Act To Allow for the Establishment of Commercial Property Assessed Clean Energy Programs
Fiscal Note for Bill as Amended by Committee Amendment " "
Committee: Energy, Utilities and Technology
Fiscal Note Required: Yes
Fiscal Note
LR1608(02) - Fiscal Note - Page 1 of 1