An Act To Allow for the Establishment of Commercial Property Assessed Clean Energy Programs
Maine Legislature, Session 130, LD 0340
Committee: Energy, Utilities and Technology
Sponsors: SANBORN, KESSLER, LUCHINI, MIRAMANT, BERRY, CAIAZZO, DOUDERA, GROHOSKI

Legislative Document
No. 340
S.P. 147
In Senate, February 8, 2021
An Act To Allow for the Establishment of Commercial Property 
Assessed Clean Energy Programs
Received by the Secretary of the Senate on February 4, 2021.  Referred to the Committee 
on Energy, Utilities and Technology pursuant to Joint Rule 308.2 and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator SANBORN of Cumberland.
Cosponsored by Representative KESSLER of South Portland and
Senators: LUCHINI of Hancock, MIRAMANT of Knox, Representatives: BERRY of 
Bowdoinham, CAIAZZO of Scarborough, DOUDERA of Camden, GROHOSKI of Ellsworth.
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 lien.  "Commercial PACE lien" means a lien secured against 
a qualifying property that is created by a commercial PACE assessment.
5.  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.
6.  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.
7.  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 heating equipment that produces the lowest carbon emissions of any 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.
8.  Qualifying property.  "Qualifying property" means real commercial property that:
A.  Does not have a residential mortgage;
B.  Is not owned by a residential customer or small commercial customer as defined in 
section 3106, subsection 1, paragraphs C and D, respectively;
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.
9.  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 that do not on average generate more energy or heat than the peak demand of the 
property.
10.  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 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.
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 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.
§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.
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 
must 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 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 or nonjudicial 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 lienholders, 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 in the appropriate registry of 
deeds and must include reference to the notice required under subsection 2.
§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 any applicable vendor certification required 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.