Monday, June 1, 2009

Mike Villarreal sponsored bill to allow contractural assessments for energy efficiency improvements only awaiting Governor Perry's signature

As of June 1, Texas House Bill 1937, introduced by Representative Mike Villarreal only awaits Governor Perry's signature to become law, September 1, 2009.

UPDATE: JUNE 19, 2009. Governor Perry signed the legislation today.

According to Rep. Villarreal's legislative director Peter Clark the law would:
Authorize municipal financing of property owners' investments in energy efficiency upgrades or renewable energy devices such as solar panels. The bill allows cities and individual property owners to enter into an agreement by which the city will provide the upfront costs for the energy improvements and the property owners will pay back the city through their property taxes. The legislation was modeled on similar successful programs in other cities around the country.

"As San Antonio and other cities develop plans to meet our long-term energy needs, we want to help them find alternatives to energy sources that threaten the environment and the air we breathe," stated Rep. Villarreal. "By helping property owners with their upfront costs, we can remove the main obstacle to making our homes and businesses more green."

The Director of the City of San Antonio 's Office of Environmental Policy, Laurence Doxsey, testified in favor of the bill in the House Urban Affairs Committee on April 24. He told the Committee that San Antonio would like to develop a municipal financing program to help meet the city's future energy needs. Other witnesses supporting the bill included representatives of the Environmental Defense Fund, Texas Society of Architects, CPS Energy, Public Citizen, and the Texas Renewable Energy Industries Association.
The full text of the bill is below:
H.B. No. 1937

AN ACT
relating to the voluntary assessment of property owners by a
municipality to finance certain energy conservation improvements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle A, Title 12, Local Government Code, is
amended by adding Chapter 376 to read as follows:
CHAPTER 376. CONTRACTUAL ASSESSMENTS FOR ENERGY EFFICIENCY
IMPROVEMENTS
Sec. 376.001. AUTHORIZED FINANCING. An assessment under
this chapter may finance:
(1) energy efficiency public improvements to
developed lots for which the costs and time delays of creating an
entity under law to assess the lot would be prohibitively large
relative to the cost of the energy efficiency public improvement to
be financed; and
(2) the installation of distributed generation
renewable energy sources or energy efficiency improvements that are
permanently fixed to residential, commercial, industrial, or other
real property.
Sec. 376.002. CERTAIN FINANCING PROHIBITED. An assessment
under this chapter may not be used to finance:
(1) facilities for undeveloped lots or lots undergoing
development at the time of the assessment; or
(2) the purchase or installation of appliances not
permanently fixed to real property.
Sec. 376.003. CONSENT FOR ASSESSMENT REQUIRED. A
municipality may impose an assessment under this chapter only with
the consent of the owner of the assessed property at the time of the
assessment.
Sec. 376.004. DESIGNATION OF AREA FOR ASSESSMENT. (a) The
governing body of a municipality may determine that it is
convenient and advantageous to designate an area of the
municipality within which authorized municipal officials and
property owners may enter into contracts to assess properties for
energy efficiency public improvements described by Section
376.001(1) and make financing arrangements under this chapter.
(b) The governing body of a municipality may determine that
it is convenient, advantageous, and in the public interest to
designate an area of the municipality within which authorized
municipal officials and property owners may enter into contracts to
assess properties to finance the installation of distributed
generation renewable energy sources or energy efficiency
improvements that are permanently fixed to real property.
(c) An area designated by the governing body of a
municipality under this section may include the entire
municipality.
Sec. 376.005. RESOLUTION OF INTENTION TO CONTRACT FOR
ASSESSMENT. (a) To make a determination under Section 376.004, the
governing body of a municipality must adopt a resolution indicating
the governing body's intention to designate an area for assessment.
(b) The resolution of intention must:
(1) include a statement that the municipality proposes
to make contractual assessment financing available to property
owners;
(2) identify the types of energy efficiency public
improvements, distributed generation renewable energy resources,
or energy efficiency improvements that may be financed;
(3) describe the boundaries of the area in which
contracts for assessments may be entered into;
(4) thoroughly describe the proposed arrangements for
financing the program; and
(5) state the time and place for a public hearing and
that interested persons may object to or inquire about the proposed
program at the hearing.
(c) If contractual assessments are to be used to finance the
installation of distributed generation renewable energy sources or
energy efficiency improvements that are permanently fixed to real
property, the resolution of intention must state that it is in the
public interest to do so.
(d) The resolution shall direct an appropriate municipal
official to:
(1) prepare a report under Section 376.006; and
(2) consult with the appropriate appraisal district or
districts regarding collecting the proposed contractual
assessments with property taxes imposed on the assessed property.
Sec. 376.006. REPORT REGARDING ASSESSMENT. An appropriate
municipal official designated in the resolution shall prepare a
report containing:
(1) a map showing the boundaries of the area within
which contractual assessments are proposed to be offered;
(2) a draft contract specifying the terms that would
be agreed to by the municipality and a property owner within the
contractual assessment area;
(3) a statement of municipal policies concerning
contractual assessments including:
(A) identification of types of energy efficiency
public improvements, distributed generation renewable energy
sources, or energy efficiency improvements that may be financed
through the use of contractual assessments;
(B) identification of a municipal official
authorized to enter into contractual assessments on behalf of the
municipality;
(C) a maximum aggregate dollar amount of
contractual assessments;
(D) a method for ranking requests from property
owners for financing through contractual assessments in priority
order if requests appear likely to exceed the authorization amount;
and
(E) a method for ensuring that property owners
requesting financing demonstrate the financial ability to fulfill
financial obligations under the contractual assessments;
(4) a plan for raising a capital amount required to pay
for work performed in accordance with contractual assessments that:
(A) may include:
(i) amounts to be advanced by the
municipality through funds available to it from any source; and
(ii) the sale of bonds or other financing;
(B) shall include a statement of or method for
determining the interest rate and period during which contracting
property owners would pay any assessment; and
(C) shall provide for:
(i) any reserve fund or funds; and
(ii) the apportionment of all or any
portion of the costs incidental to financing, administration, and
collection of the contractual assessment program among the
consenting property owners and the municipality; and
(5) the results of the consultations with the
appropriate appraisal districts concerning incorporating the
proposed contractual assessments into the assessments of property
taxes.
Sec. 376.007. DIRECT PURCHASE BY OWNER. On the written
consent of an authorized municipal official, the proposed
arrangements for financing the program pertaining to the
installation of distributed generation renewable energy sources or
energy efficiency improvements that are permanently fixed to real
property may authorize the property owner to:
(1) purchase directly the related equipment and
materials for the installation of the distributed generation
renewable energy sources or energy efficiency improvements; and
(2) contract directly for the installation of the
distributed generation renewable energy sources or energy
efficiency improvements.
Sec. 376.008. LIEN. An assessment imposed under this
chapter and any interest or penalties on the assessment constitutes
a lien against the lot on which the assessment is imposed until the
assessment, interest, or penalty is paid.
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.


______________________________ ______________________________
President of the Senate Speaker of the House


I certify that H.B. No. 1937 was passed by the House on May
15, 2009, by the following vote: Yeas 87, Nays 51, 2 present, not
voting.

______________________________
Chief Clerk of the House


I certify that H.B. No. 1937 was passed by the Senate on May
26, 2009, by the following vote: Yeas 31, Nays 0.

______________________________
Secretary of the Senate



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