[Adopted 1-9-2018 by Bill
No. 1379]
In this article, the following words have the meanings indicated:
An agreement between a property owner and a clean energy
lender providing for the terms and conditions of a clean energy loan.
A private lender providing a clean energy loan.
Any loan made by a private lender to a property owner under
the clean energy loan program.
All indebtedness and obligations of a property owner to a
clean energy lender under a clean energy financing agreement.
Any person or entity chosen by the County to manage the clean
energy loan program.
Real property that is not designed principally or intended
for human habitation; or used for human habitation and is improved
by more than four single-family dwelling units.
Talbot County, Maryland.
A loan agreement containing a provision that if the borrower
defaults or otherwise fails to make payment, the entire remaining
amount on the loan will not become immediately due and payable.
An owner of commercial property.
Repayment obligations of a clean energy loan, including principal,
interest, any applicable fees and administrative costs, collected
from a property owner through the County's property tax billing system.
The lien automatically established upon the County's levy
of the surcharge on the property tax bill.
There is a clean energy loan program to finance energy efficiency
projects and renewable energy projects as provided in this article.
The Director of the County Finance Office may adopt rules and
regulations to administer the clean energy loan program consistent
with this article, subject to the approval of the County Council.
The clean energy loan program shall be administered by the clean
energy loan program administrator. The County Manager may enter into
an agreement with a third party to administer the clean energy loan
program, subject to the approval of the County Council.
Commercial property owners eligible under the criteria in § 172-36, below, may participate in the clean energy loan program for non-accelerating loans greater than $25,000 for a term up to 20 years.
In order to be eligible for a clean energy loan, the property
owner, or in the case of multiple owners of the same property, property
owners, shall:
A.
Have a 100% ownership interest in the commercial property for which
improvements are proposed;
B.
Demonstrate that the most recent property taxes, assessments, and
charges on the property have been paid;
C.
Provide a copy of written notice to all current holders of a mortgage
or deed of trust who have a priority recorded lien on the property
and written proof of express consent to the clean energy loan as a
priority lien by all current holders of a mortgage or deed of trust
on the property;
D.
Obtain an energy audit approved under program guidelines demonstrating
that the savings projected to be obtained from the improvements over
the life of the improvements equal or exceed the principal and aggregate
interest to be paid over the term of the loan; and
E.
Establish that the owner(s) of the commercial property is able to
repay the loan provided under the clean energy loan program, in a
manner substantially similar to that required for a mortgage loan
under Md. Code Ann., Commercial Law Art., §§ 12-127,
12-311, 12-409.1, 12-925, and 12-1029.
The following improvements, either new or replacement, qualify
as energy efficiency or renewable energy projects under the clean
energy loan program:
A.
Solar energy equipment;
B.
Geothermal energy devices;
C.
Wind energy systems;
D.
Water conservation devices not required by law;
E.
Any construction, renovation or retrofitting of commercial property
to reduce energy consumption, including high-efficiency lighting and
building systems, heating, ventilation, air-conditioning (HVAC) upgrades,
high-efficiency boilers and furnaces, high-efficiency hot water heating
systems, combustion and burner upgrades, fuel switching, heat recovery
and steam traps, building shell or envelope improvements, fenestration
improvements, building energy management systems, and process equipment
upgrades; and
F.
Any other improvements approved by the County or the clean energy
loan program administrator as qualifying as an energy efficiency project
or renewable energy project.
A clean energy loan may be used to pay for all costs incurred
by a property owner in connection with the qualifying improvements,
including the cost of the energy audit; feasibility studies and reports;
project management, design, installation, and construction of the
qualifying improvements; commissioning; energy savings or performance
guaranty or insurance; building accreditation; closing costs of the
clean energy loan; permitting fees; administrative fees; post-install
evaluation, measurement and verification; and, building accreditation.
A.
Repayment of loans. A property owner participating in the clean energy
loan program shall repay the clean energy loan through a surcharge
on their real property tax bill. Upon receipt of written notice from
the clean energy loan program administrator of the execution of a
clean energy loan financing agreement, the County shall add the surcharge
to the tax property bill issued on July 1 following such notice. The
surcharge shall constitute a first lien on the property from the date
it becomes payable until the unpaid surcharge and interest and penalties
on the surcharge are paid in full, regardless of a change in ownership,
whether voluntary or involuntary. A person or entity that acquires
property subject to a surcharge assumes the obligation to pay such
surcharge. The County may assign the surcharge lien to the clean energy
loan program administrator.
B.
Calculation. The surcharge for a clean energy loan shall include
the clean energy loan obligation and any administrative costs incurred
by the County, which shall be the actual expenses incurred to administer
the program.
C.
Notice of levy and lien of surcharge. Upon receiving written notice
from the clean energy loan program administrator of the execution
of a clean energy loan financing agreement, the property owner shall
execute an agreement with the County and the clean energy lender that
will be recorded in the Land Records of Talbot County, Maryland, at
the expense of the property owner, and which shall include:
(1)
The date the clean energy loan was made to the property owner and
the property became subject to the surcharge;
(2)
The term of the clean energy loan and over which the surcharge will
apply to the property;
(3)
The clean energy loan obligation and estimated County administrative
costs for the first year;
(4)
The annual principal and interest amount for each year of the term
of the clean energy loan, including any partial year prorated amounts;
(5)
Prepayment requirements and any prepayment premium that may apply
to a prepayable clean energy loan;
(6)
Agreement by the property owner to repay all clean energy loan obligations
and the County's administrative costs through a surcharge included
on the owner's real property tax bill due and payable on the same
date as the real property tax bill;
(7)
Acknowledgment by the property owner that an unpaid clean energy
loan surcharge constitutes a first lien on the property that has priority
over prior or subsequent liens in favor of private parties and that
the surcharge will continue as a lien on the property from the date
it becomes payable until the unpaid surcharge and interest and penalties
on the surcharge are paid in full, regardless of a change in ownership
of the property, whether voluntary or involuntary; and
(8)
Acknowledgment by the property owner that if payments of surcharges
are not timely paid, the surcharge will be collectible as a tax lien
through the tax sale process authorized under Md. Code Ann., Tax-Property
Art., Title 14, Subtitle 8, and that an overdue surcharge will be
so collected, irrespective of whether real property taxes (or any
other taxes, charges, or assessments) are due and owing.
(9)
Acknowledgment by the property owner and the clean energy lender
that the County has no liability for the clean energy loan obligation
or any costs associated with the collection of amounts due under the
clean energy loan.
D.
Default. In the event of default on the clean energy loan surcharge,
the County shall collect the lien pursuant to Md. Code Ann., Tax-Property
Art., § 14-801 et seq., irrespective of whether property
taxes (or any other taxes, charges, or assessments) are due and owing.
The County shall not incur any liability to the clean energy lender
or others in the event of default or be obligated to prosecute any
claims to foreclose the right of redemption on the property. The County's
collection obligation shall be limited to adding the property in question
to the annual tax sale, conducting the tax sale, and to the extent
permitted by law remitting to the clean energy lender proceeds from
the sale and other amounts to satisfy the deficiency and to continue
repayment of the loan.
E.
Credit of payments. Notwithstanding any provision in this article
to the contrary, payments received from a property owner, made on
his or her behalf, or otherwise made to pay an outstanding amount
owed by a property owner shall be credited first to all County taxes,
assessments, and charges, and any interest or penalties owed to the
County.
F.
Payment to clean energy lender. The County shall have no ownership
of the surcharges collected except for administrative costs provided
under this article. The County shall pay all surcharge payments in
any calendar month to the applicable clean energy lender or the clean
energy loan program administrator within 30 days after the end of
the month in which such amounts are collected. The County shall have
no obligation to make payments to any clean energy lender with respect
to any clean energy loan obligation other than that portion of the
surcharge actually collected from a property owner for the repayment
of a clean energy loan or from the sale of a property where a clean
energy loan is in default.
Clean energy loans may be provided by any private lender and
a clean energy financing agreement may contain any terms agreed to
by the clean energy lender and the property owner, as permitted by
law, for the financing of clean energy loans. The County may not finance
or fund any loan under the program, shall serve only as a program
sponsor to facilitate loan repayment by including the surcharge on
the County real property tax bill for the property, and shall incur
no liability for the loan.
