Andrea Mansfield, on behalf of MACo, testified in support of SB 912, Clean Energy Loan Program – Residential Property – Repayment of Loans Through Surcharge, to the Senate Finance Committee on March 17, 2016.
As introduced, this bill would authorize local governments to collect loan payments from a homeowner for the financing of energy efficiency and renewable energy projects through a surcharge on the homeowner’s property tax. Sponsor amendments will alter the bill to require the Maryland Clean Energy Center to conduct a study to determine optimal design and implementation strategies for a residential clean energy loan program in the state.
From the MACo testimony,
HB 1567 (Chapter 743) of 2009 authorized local jurisdictions to enact ordinances to establish clean energy loan programs. To date, only two jurisdictions have enacted ordinances to establish programs and only one has an active program in place for commercial lending.
SB 912 is designed to provide an incentive to local jurisdictions to enact residential clean energy loan programs.
On the commercial lending side of the program, a county may collect loan payments through a surcharge on the property owner’s property tax bill. This unpaid surcharge is considered a lien on the real property on which it is imposed and is given first priority for repayment in the same manner as the local property tax.
This bill extends these same requirements to the residential side of the program.
MACo believes extending these same protections on the residential side of the program will encourage local governments to establish these programs. However, concerns have been raised with the financing of residential loans for clean energy projects and how these may be viewed by lenders and clean energy loan providers.
Amending the bill to require a study of residential clean energy loan programs will bring interested parties together to work through these issues and design a program that is workable for all parties involved.
For this reason, MACo SUPPORTS SB 912, and concurs with the amendments offered by the sponsor.
An identical cross-filed bill, HB 387, was heard on February 4 in the House.