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  • NJ A1488
  • The "Renewable Energy District Financing Act."
Introduced
(1/27/2016)
In Committee
(1/27/2016)
Crossed OverPassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This legislation would permit municipalities to establish renewable energy financing districts in order to make it easier to fund renewable energy improvements. The Legislature appreciates the need for alternative financing mechanisms to support the expansion of renewable energy resources throughout the State. Current incentives available to property owners only partially offset the high capital costs associated with the installation of renewable energy systems. Furthermore, not all property owners may be able or willing to refinance an existing mortgage or obtain a bank loan because they may have already used those avenues for other high priority home or business improvements. The renewable energy special assessment offers another method to finance these improvements. Fifteen other states have passed some form of "Property Assessed Clean Energy Legislation" and the enactment of this bill would empower municipalities to support the State's efforts to have 20% of its electricity generated by renewable energy resources by 2020. The governing body of a municipality may adopt an ordinance creating a renewable energy financing district after a public hearing has been held. The district board, which, under the bill, is the governing body of the municipality, may then execute agreements with property owners that allow for the imposition of a special assessment on property within the district to support the financing of renewable energy improvements to the property. The district may use the special assessment revenues to secure bonds that would fund the costs of the improvements, bond issuance, debt service, and administrative costs of the district and the municipality in which it is located. The improvements would be financed over a period 20 years. Solar renewable energy improvements may be financed over a period of 15 years. If a property owner installs solar renewable energy improvements, then the obligation to pay the special assessment may be wholly or partially offset by the assignment of the owner's solar renewable energy certificates to the district board. The board may then securitize the certificates towards the payment of the bonds issued to finance the project. The establishment of a renewable energy financing district will enable some municipalities to access federal Qualified Energy Conservation Bonds (QECBs). Through the use of QECBs, (which, due to federal tax incentives, have an interest rate of zero percent) these improvements could possibly pay for themselves given that an individual could receive more in energy savings and other rebates that they would be required to payout in annual special assessment taxes. According to the Internal Revenue Code, Qualified Energy Conservation Bonds are not private activity bonds and are exempt from taxation. The State received $90 million in QCEBs through the federal stimulus program. The municipality board may adopt an ordinance dissolving the district upon determining that the district has no outstanding bond obligations. The district cannot be dissolved if any bonds of the district remain outstanding unless an amount of money sufficient, together with investment income thereon, to make all payments due on the bonds either at maturity or prior redemption, has been deposited with a trustee or escrow agent and pledged to the repayment of the bonds.
Telecommunications and Utilities
Introduced, Referred to Assembly Telecommunications and Utilities Committee  (on 1/27/2016)
 
 

Date Chamber Action Description
1/27/2016 A Introduced, Referred to Assembly Telecommunications and Utilities Committee
Date Motion Yea Nay Other
None specified