An Act To Allow for the Establishment of Commercial Property Assessed Clean Energy Programs
Maine Legislature, Session 129, LD 1748
Committee: Energy, Utilities and Technology
Sponsors: STROM, BLACK, LUCHINI, WOODSOME, BERRY, HICKMAN, RYKERSON, SHEATS, WADSWORTH

Legislative Document
No. 1748
S.P. 582
In Senate, May 16, 2019
An Act To Allow for the Establishment of Commercial Property 
Assessed Clean Energy Programs
Reference to the Committee on Energy, Utilities and Technology suggested and ordered 
printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator SANBORN, H. of Cumberland.
Cosponsored by Representative STROM of Pittsfield and
Senators: BLACK of Franklin, LUCHINI of Hancock, WOODSOME of York, 
Representatives: BERRY of Bowdoinham, HICKMAN of Winthrop, RYKERSON of Kittery, 
SHEATS of Auburn, WADSWORTH of Hiram.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  35-A MRSA c. 101 is enacted to read:
CHAPTER 101
COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY
§10201.  Declaration of public purpose
It is declared that the establishment and implementation of commercial property 
assessed clean energy, or commercial PACE, programs to finance energy savings 
improvements are public purposes.
§10202.  Definitions
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings.
1.  Commercial PACE.  "Commercial PACE" means commercial property assessed 
clean energy.
2.  Commercial PACE agreement.  "Commercial PACE agreement" means an 
agreement that authorizes the creation of a commercial PACE assessment on qualifying 
property and that is approved in writing by all owners of the qualifying property at the 
time of the agreement.
3.  Commercial PACE assessment.  "Commercial PACE assessment" means an 
assessment made against qualifying property to finance an energy savings improvement.
4.  Commercial PACE ordinance.  "Commercial PACE ordinance" means an 
ordinance adopted by the legislative body of a municipality for the purpose of 
participating in a commercial PACE program.
5.  Commercial PACE program.  "Commercial PACE program" means a program 
established under this chapter by the trust, a 3rd party contracted by the trust or a 
municipality, under which commercial property owners can finance energy savings 
improvements on qualifying property.
6.  Energy savings improvement.  "Energy savings improvement" means an 
improvement to qualifying property that, as determined by the trust, is new and 
permanently affixed to qualifying property and that:
A.  Will result in increased energy efficiency and substantially reduced energy use 
and:
(1)  Meets or exceeds 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)  Involves weatherization of commercial or industrial property in a manner 
approved by the trust; or
B.  Involves a renewable energy installation, an electric thermal storage system or 
any heating equipment that meets or exceeds standards established or approved by 
the trust.
7.  Qualifying property.  "Qualifying property" means real commercial property 
that:
A.  Does not have a residential mortgage; and
B.  Is located in a municipality that participates in a commercial PACE program 
pursuant to this chapter.
8.  Renewable energy installation.  "Renewable energy installation" means a fixture, 
product, system, device or interacting group of devices installed behind the meter at a 
qualifying property, or on contiguous property under common ownership, that produces 
energy or heat from renewable sources, including, but not limited to, photovoltaic 
systems, solar thermal systems, highly efficient wood heating systems, geothermal 
systems and wind systems.
9.  Trust.  "Trust" means the Efficiency Maine Trust established in section 10103.
§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 or program funds to pay reasonable 
administrative expenses of the trust, a 3rd party contracted by the trust or a municipality 
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.
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 a 
commercial PACE program for a municipality.
D.  Notwithstanding any other provision of law to the contrary, 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, a municipality has no liability to a commercial property owner for or 
related to energy savings improvements financed under a commercial PACE 
program.
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 comprehensive quality assurance system for the commercial PACE 
program. In developing a quality assurance system under this subsection, the trust must 
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.
6.  Model documents; educational materials.  Subject to the availability of funds, 
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.
§10204.  Consumer underwriting and disclosure
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 exceed the direct costs to the commercial 
property owner of such improvements;
C.  Require proof of ownership of the qualifying property;
D.  Require that the qualifying property:
(1)  Is current on property taxes and sewer charges;
(2)  Has no outstanding and unsatisfied tax or sewer liens;
(3)  Is not subject to a reverse mortgage; and
(4)  Is not subject to a mortgage or other lien on which there is a recorded notice 
of default, foreclosure or delinquency that has not been cured;
E.  Require that the owner or owners of the qualifying property certify that there are 
no overdue payments on mortgages secured by the property; and
F.  Require escrows for commercial PACE assessment payments when appropriate.
2.  Consumer disclosure; truth in lending.  A commercial PACE agreement entered 
into pursuant to a commercial PACE program must provide consumer disclosure 
consistent with the principles of truth in lending as specified in rules adopted by the trust.  
In adopting such rules, the trust shall seek advice from the Department of Professional 
and Financial Regulation, Bureau of Consumer Credit Protection and consumer credit 
industry stakeholders.  Notwithstanding Title 9-A, section 1-202, commercial PACE 
assessments are not subject to the Maine Consumer Credit Code, Article 8-A.
3.  Consumer privacy.  The provisions of the federal Gramm-Leach-Bliley Act, 15 
United States Code, Section 6801 et seq. (1999), and the applicable implementing federal 
regulations regarding the privacy of consumer information, apply to all consumer 
financial information obtained by the trust or municipalities or their designees in 
implementing commercial PACE programs under this chapter.
§10205.  Commercial PACE assessments; collection; priority
1.  Collection of assessments.  Commercial PACE assessments constitute a lien 
against the qualifying property on which they are made until they are paid, and 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.
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.
3.  Priority.  A commercial PACE assessment takes precedence over all other liens 
or encumbrances except a lien for taxes of the municipality where the qualifying property 
is located on real property, except that the precedence of such a commercial PACE 
assessment over any lien held by an existing mortgage holder is subject to the written 
consent of such existing mortgage holder.
4.  Mortgage lender notice and consent.  Any financial institution holding a lien, 
mortgage or security interest in or other 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 they 
have 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 
encumbrance on the property has provided written consent to the commercial property 
owner and municipality that the property may participate in the program.  This written 
consent must be recorded in the registry of deeds.
5.  Acceleration not permitted.  A commercial PACE assessment runs with the 
property in the same manner as a property tax lien. The portion of the assessment that has 
not yet become due is not eliminated by foreclosure and the assessment cannot be 
accelerated or extinguished until fully repaid.
6.  Judicial sale or foreclosure.  In the event of a judicial sale or foreclosure of a 
property subject to a commercial PACE lien, 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.
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. The discharge of a commercial PACE lien under this subsection must be filed 
with the appropriate registry of deeds.
§10206.  Commercial property owners
1.  Purchase of goods and services.  A commercial property owner who has entered 
into a commercial PACE agreement under this chapter may purchase directly all goods 
and services for the energy savings improvements described in the commercial PACE 
agreement, subject to vendor certification by the trust and other requirements of the trust.  
Goods and services purchased by a commercial property owner for the energy savings 
improvements under a commercial PACE agreement are not subject to any public 
procurement ordinance or statute.
2.  Rights.  Commercial property owners retain all rights under contract or law 
against parties other than the municipality or the trust with respect to energy savings 
improvements financed through commercial PACE agreements.
§10207.  Annual report
The trust shall report annually on the implementation of this chapter as part of the 
report required under section 10104, subsection 5.
§10208.  Rulemaking
Rules adopted under this chapter are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A.
§10209.  Construction; home rule
Nothing in this chapter may be construed to limit the home rule authority of a 
municipality.
§10210.  Conformity to changed standards
If standards are adopted by any state or federal agency subsequent to a municipality's 
adoption of a commercial PACE ordinance or participation in a commercial PACE 
program and those standards substantially conflict with the municipality's manner of 
participation in the commercial PACE program, the municipality shall take necessary 
steps to conform its participation to those standards.
SUMMARY
This bill allows the Efficiency Maine Trust or a municipality to establish a 
commercial property assessed clean energy program to finance energy savings 
improvements on qualifying property.