An implementing entity may establish a program to finance energy improvements to enable owners of qualifying real property to pay for cost-effective energy improvements to the qualifying real property with the net proceeds and interest earnings of revenue bonds authorized in this section. An implementing entity may limit the number of qualifying real properties for which a property owner may receive program financing.
A financing program must:
(1) impose requirements and conditions on financing arrangements to ensure timely repayment;
(2) require an energy audit or renewable energy system feasibility study to be conducted on the qualifying real property and reviewed by the implementing entity prior to approval of the financing;
(3) require the inspection of all installations and a performance verification of at least ten percent of the energy improvements financed by the program;
(4) not prohibit the financing of all cost-effective energy improvements not otherwise prohibited by this section;
(5) require that all cost-effective energy improvements be made to a qualifying real property prior to, or in conjunction with, an applicant's repayment of financing for energy improvements for that property;
(6) have energy improvements financed by the program performed by licensed contractors as required by chapter 326B or other law or ordinance;
(7) require disclosures to borrowers by the implementing entity of the risks involved in borrowing, including the risk of foreclosure if a tax delinquency results from a default;
(8) provide financing only to those who demonstrate an ability to repay;
(9) not provide financing for a qualifying real property in which the owner is not current on mortgage or real property tax payments;
(10) require a petition to the implementing entity by all owners of the qualifying real property requesting collections of repayments as a special assessment under section 429.101;
(11) provide that payments and assessments are not accelerated due to a default and that a tax delinquency exists only for assessments not paid when due; and
(12) require that liability for special assessments related to the financing runs with the qualifying real property.
Energy generated by an energy improvement may not be sold, transmitted, or distributed at retail and may not provide for end use of the electrical energy from an off-site facility. On-site generation is allowed to the extent provided for in section 216B.1611.
Financing provided under this section must have:
(1) a cost-weighted average maturity not exceeding the useful life of the energy improvements installed, as determined by the implementing entity, but in no event may a term exceed 20 years;
(2) a principal amount not to exceed the lesser of 20 percent of the assessed value of the real property on which the improvements are to be installed or the actual cost of installing the energy improvements, including the costs of necessary equipment, materials, and labor, the costs of each related energy audit or renewable energy system feasibility study, and the cost of verification of installation; and
(3) an interest rate sufficient to pay the financing costs of the program, including the issuance of bonds and any financing delinquencies.
A financing program must include cooperation and coordination with the conservation improvement activities of the utility serving the qualifying real property and other public and private energy improvement programs.
Upon completion of a project, an implementing entity shall provide a borrower with a certificate stating participation in the program and what energy improvements have been made with financing program proceeds.
An implementing entity that finances an energy improvement under this section must:
(1) secure payment with a lien against the qualifying real property; and
(2) collect repayments as a special assessment as provided for in section 429.101 or by charter, provided that special assessments may be made payable in up to 20 equal annual installments.
If the implementing entity is an authority, the local government that authorized the authority to act as implementing entity shall impose and collect special assessments necessary to pay debt service on bonds issued by the implementing entity under subdivision 8, and shall transfer all collections of the assessments upon receipt to the authority.
(a) An implementing entity may issue revenue bonds as provided in chapter 475 for the purposes of this section, provided the revenue bond must not be payable more than 20 years from the date of issuance.
(b) The bonds must be payable as to both principal and interest solely from the revenues from the assessments established in subdivision 7.
(c) No holder of bonds issued under this subdivision may compel any exercise of the taxing power of the implementing entity that issued the bonds to pay principal or interest on the bonds, and if the implementing entity is an authority, no holder of the bonds may compel any exercise of the taxing power of the local government. Bonds issued under this subdivision are not a debt or obligation of the issuer or any local government that issued them, nor is the payment of the bonds enforceable out of any money other than the revenue pledged to the payment of the bonds.
(a) An implementing entity is authorized to establish, acquire, and use additional or alternative funding sources for the purposes of this section.
(b) For the purposes of this subdivision, additional or alternative funding sources do not include issuance of general obligation bonds.