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Utah Administrative Code (Current through November 1, 2019) |
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R362. Governor, Energy Development (Office of) |
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R362-5. Commercial Property Assessed Clean Energy (C-PACE), Administrative Rules |
| R362-5-1. Purpose |
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(1) This rule is for the purposes of (a) Implementing the responsibilities assigned to the Governor's Office of Energy Development (OED) in directing and administering the C-PACE District as defined in Section 11-42a-106; and (b) Establishing the procedures for designating, levying, assigning, and collecting an energy assessment lien within an energy assessment area. |
| R362-5-2. Authority |
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(1) This rule is required by Section 11-42a-106. |
| R362-5-3. Definitions |
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(1) The terms used in this rule are defined in Section 11-42a-102. (2) In addition, "contractor" means any person or company who is or may be awarded an original commercial contract for the construction, alteration, or repair of eligible improvements on eligible real property. (4) In addition, "energy assessment areas" designated by the C-PACE District cannot be made contiguous or located on one or more contiguous or adjacent tracts of land. (3) In addition, "third party delegate" means a vendor selected by OED that provides program administration support services to the C-PACE District, in accordance with Subsection 11-42a-106(4)(b). |
| R362-5-4. Eligible Improvements and Eligible Commercial and Industrial Real Property |
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(1) C-PACE financing may be used to install eligible improvements on eligible commercial and industrial real property, as defined under Section 11-42a-102. (2) Commercial or industrial real property, located within participating local entities, may be eligible to receive C-PACE financing for an existing building, a building under construction, or a building to be constructed. (3) The amount to be financed is determined by the property owner and third party lender. |
| R362-5-5. C-PACE District Administration |
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(1) OED is authorized to administer C-PACE projects in participating local entities. (a) Participating local entities must make a written request of the C-PACE District to create the energy assessment area and energy assessment lien. (b) The written request consists of a resolution passed by the local entity's governing body and a participation agreement executed by the local entity's administration. (2) OED maintains an agreement with the relevant public electrical utility that establishes the scope of the eligible improvement(s) financed by C-PACE. |
| R362-5-6. Application Procedure |
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(1) The property owner or a contractor, serving as the representative of the property owner, must verify the real property is located in a participating local entity. (a) A map of participating local entities is provided on the C-PACE District website. (2) The property owner or contractor submits to OED or the third party delegate the address of the real property. (a) The third party delegate collects and reviews publicly available information on the real property. (3) The property owner or contractor completes and submits the project application to OED or its third party delegate. (a) The third party delegate reviews the project application against the eligible improvements and eligible real properties authorized in statute. (b) The third party delegate notifies OED, the property owner, and contractor of its findings. (4) OED or its third party delegate shall not be held responsible for any costs or fees incurred to complete the C-PACE project application, including but not limited to, audit costs and engineering fees. (a) While such costs are typically included in the project financing, in cases where the project does not move forward, the property owner or contractor is responsible for such costs or fees. |
| R362-5-7. Mortgage Holder Consent |
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(1) Written consent must be obtained from each person or institution holding a lien on the real property. (a) Consent must be submitted to OED or its third party delegate to facilitate the levy and assignment of the energy assessment lien. |
| R362-5-8. Underwriting |
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(1) The third-party lender and property owner negotiate financing terms and conditions. (a) Third-party lenders establish their own financial underwriting standards and make their own determination about whether to invest in a project, on a per project basis. (b) Once the underwriting process is complete, the third-party lender may issue a conditional approval or financial commitment letter outlining the terms of the financing, including any conditions of closing. |
| R362-5-9. Voluntary Energy Assessment Lien Procedures |
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(1) The third-party lender prepares documents for closing the financial transaction with the property owner. (a) The property owner and third-party lender enter into a financing agreement that contains the financing terms and conditions that govern the transaction. (2) The third-party lender provides the information and documentation required to designate a voluntary energy assessment area, levy an energy assessment, and assign the energy assessment lien, to OED and its third party delegate. (a) Notices shall include the financing agreement and exhibits, including the energy assessment lien repayment schedule. (3) OED shall designate to the third-party lender its authority to transmit to the Governing Body Clerk and Recorder, or its equivalent, the documentation required for recording the voluntary energy assessment lien on the real property. (a) After recording the energy assessment lien, the Governing Body Clerk and Recorder, or its equivalent, files a copy of the energy assessment lien with the Governing Body Assessor and coordinates with the third-party lender to assign the energy assessment lien to the third-party lender. |
| R362-5-10. Associated Fee |
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(1) OED's costs of administering and directing the C-PACE District are financed by program fees charged to property owners upon project financial closing. (a) In accordance with Section 63J-1-504, OED charges a program fee that consists of a one-time charge of three percent (3.0%) of the financed amount per project, provided that the fee does not exceed ninety thousand dollars ($90,000) per project. (2) On behalf of OED, the thirty party delegate provides an invoice to the third-party lender for the program fee. (a) The third-party lender remits the fee to the third party delegate within 10 days of financial closing. (b) Upon receipt of the fee, the third party delegate remits 0.5% of the collected fee, up to $15,000, to OED within 10 days of receipt. |
| R362-5-11. Servicing and Repayment |
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(1) The assessment is repaid in installations over a period not to exceed 30 years. (a) In the event of a default, payments may not be accelerated to the total unpaid balance of the assessment. (b) The third-party lender is be responsible for, subject to, and in accordance with the terms of the financing agreement, for all billing, collection, enforcement, and administrative duties pertaining to the loan, the assessment payments, and the energy assessment lien. (c) The state is not liable for the acts or omissions of the C-PACE District or the C-PACE District's directors, administrators, officers, agents, employees, third-party directors or administrators, or third-party lenders, including any obligation, expense, debt, or liability of the C-PACE District. |
| R362-5-12. Release and Discharge of the Energy Assessment Lien |
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(1) Upon full payment of the energy assessment lien, the third-party lender files a release and discharge of the energy assessment lien on the real property with the Governing Body Clerk and Recorder, or its equivalent. |
| R362-5-13. Reporting |
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(1) According to Subsection 11-42a-106(c), the third party delegate submits to OED monthly reports that describe the following information: (a) Total project financed amount (b) Number of voluntary energy assessment liens established (c) Fees collected (d) Annual estimated energy savings, including both kilowatt hours and British thermal units (where applicable) (e) Status of voluntary energy assessment lien repayments (f) Length of financing (g) Sales or transfers of properties with outstanding voluntary energy assessment liens |