AS Title 29, Chapter 55: Municipal Programs

Article 1. Historical Districts. Chapter 55. Municipal Programs. Sec. 29.55.010. Creation of local historical district commissions. The governing body of a municipality may establish a local historical district commission or designate the planning commission or itself to serve as the historical district commission. Sec. 29.55.020. Establishment of historical districts. (a) In addition to existing municipal authority providing for the preservation, protection, and maintenance of historic sites, the local historical district commission, in consultation with the Alaska Historical Commission in the Department of Natural Resources, may establish historical districts within the boundaries of the municipality. (b) A historical district shall be a reasonably compact area of historical significance in which two or more structures important in state or national history, and related by physical proximity or historical association, are located. For purposes of this subsection, “structures important in state or national history” means properties recommended by historical district commissions that are listed in the National Register of Historic Places or are characteristic of the Russian-American period before October 18, 1867, the early territorial period before 1930, or early Native heritage, reflecting the indigenous characteristics of Native culture in Alaska. On recommendation of the governing body of a municipality and the Alaska Historical Commission, the Department of Natural Resources may by regulation formulate additional criteria for the establishment of historical districts not inconsistent with this subsection. (c) The establishment of a historical district under this section shall be consistent with any applicable comprehensive plan for the municipality. Article 2. Municipal Property Assessed Clean Energy and Resilience Act. Sec. 29.55.100. Establishment of program. (a) A municipality may establish an energy and resilience improvement assessment program under AS 29.55.100 — 29.55.165 to finance the construction, installation, or modification of permanent improvements that are fixed to new construction or existing privately owned commercial or industrial property and that (1) are energy improvement projects designed to reduce energy consumption or demand, energy costs, or emissions affecting local air quality, including a product, device, or interacting group of products or devices that use energy technology to generate electricity, provide thermal energy, or regulate temperature; or (2) improve building resilience; resilience improvement projects include projects for seismic improvements, stormwater management, flood mitigation and protection, fire hardening, fire or wind resistance, erosion management, snow load management, microgrids for energy storage and backup power generation, water or wastewater efficiency including reuse and energy recovery, electric vehicle charging stations, retrofitting that improves the envelope, structure, or systems of the building, and any other improvement project approved by a municipality as a resilience improvement project. (b) To establish a program under AS 29.55.100 — 29.55.165, the governing body of a municipality shall take the following actions in the following order: (1) adopt a resolution of intent that includes (A) a finding that financing energy and resilience improvement projects through assessments serves a valid public purpose; (B) a statement that the municipality intends to allow privately owned commercial or industrial property owners to make assessments to repay financing for energy and resilience improvement projects; (C) a description of energy and resilience improvement projects that may be subject to assessments; (D) a description of the boundaries of a region within the municipality's boundaries in which the program is available; (E) a description of any proposed arrangements to make third-party financing available or any financing the municipality will provide for energy and resilience improvement projects; and (F) a description of municipal debt servicing procedures for any third-party financing and assessments; (2) prepare the report required under AS 29.55.110 and provide notice of the report with the (A) location where the report is available for public inspection; (B) time and place for a public hearing on the proposed program; and (C) name of the local official who administers the program and the appropriate assessor or person who collects the proposed assessments with property taxes imposed on the assessed property; (3) hold a public hearing at which the public may comment on the proposed program and the report prepared under AS 29.55.110 ; and (4) adopt an ordinance establishing the program and the terms of the program, including each item included in the report required under AS 29.55.110 , which may be incorporated by reference. (c) A municipality may (1) hire and set the compensation of a program administrator and program staff; or (2) contract for professional services necessary to administer a program. (d) A municipality may impose fees to offset the costs of administering a program. The fees authorized under this subsection may be imposed as a (1) program application fee paid by the property owner applying to the program; (2) servicing fee included in the assessment in the written contract between the municipality and the property owner; or (3) combination of (1) and (2) of this subsection. Sec. 29.55.105. Assessment. (a) A municipality that establishes a program under AS 29.55.100 may (1) enter into a written contract with a record owner of privately owned commercial or industrial property in a region designated under AS 29.55.100 to impose an assessment to repay the financing of an energy or resilience improvement project on that property; (2) contract with the governing body of another taxing unit to perform the duties of the municipality relating to collection of assessments imposed by the municipality under this section. (b) Financing repaid by an assessment may (1) be provided by a third party under a written contract with the municipality that authorizes the municipality to service the debt by assessment; or (2) if authorized by municipal ordinance, be provided by the municipality. (c) An assessment under this section may repay financing for costs of an energy or resilience improvement project, including (1) the cost of materials and labor necessary for the energy or resilience improvement project; (2) permit fees; (3) inspection fees; (4) lender's fees; (5) program application and administrative fees; (6) energy or resilience improvement project development and engineering fees; (7) third-party review fees, including verification review fees, under AS 29.55.120 ; (8) capitalized interest; (9) interest reserves; (10) escrow for prepaid property tax or insurance; (11) capitalized extended manufacturer's warranty or maintenance agreement costs during the period of assessment; and (12) any other fees or costs that may be incurred by the property owner incident to the installation, modification, or improvement on a specific or pro rata basis, as determined by the municipality. (d) An assessment under this section may not repay financing for the costs of (1) [Repealed, § 24 ch 28, SLA 2022.] (2) the purchase or installation of products or devices not permanently fixed to the privately owned commercial or industrial property; or (3) a utility's purchase or installation of a product, device, or improvement, if the product, device, or improvement will generate electricity or provide thermal energy distributed or used outside of the assessed property; in this paragraph, “utility” has the meaning given in AS 42.05.990 . (e) A municipality may establish more than one region. The boundaries of each region may be separate, overlapping, or coterminous. (f) A municipality may not impose a period of assessment under this section on privately owned commercial or industrial property that exceeds 30 years or the useful life of the project that is the basis for the assessment. (g) The total financing for costs of an energy or resilience improvement project may not exceed 25 percent of the market value of the property at the time of program application or completion of the proposed energy or resilience improvement project. (h) [Repealed, § 24 ch 28, SLA 2022.] (i) An assessment under this section may repay financing for costs of a proposed energy or resilience improvement project or an energy or resilience improvement project completed within the past two years. Sec. 29.55.110. Report regarding assessment program. (a) The municipality shall prepare a report for a proposed program required by AS 29.55.100 that includes (1) a map showing the boundaries of each proposed region within which the program is available; (2) a form for a contract between the municipality and a property owner specifying the terms of (A) assessment under the program; and (B) financing provided by a third party or the municipality, as appropriate; (3) if the proposed program provides for third-party financing, a form for a contract between the municipality and the third party regarding the servicing of the debt through assessments; (4) a description of energy and resilience improvement projects that may qualify for assessments; (5) a plan for ensuring sufficient capital for third-party financing and, if appropriate, raising capital for municipal financing for energy and resilience improvement projects; (6) if bonds will be issued to provide capital to finance energy and resilience improvement projects as part of the program as provided by AS 29.55.140 , (A) a maximum aggregate annual dollar amount for municipal financing repaid by assessments under the program; (B) if requests appear likely to exceed the authorization amount, a priority order for ranking a property owner's application for financing repaid by assessments; and (C) a formula for calculating (i) the interest rate and period during which contracting owners would pay an assessment; and (ii) the maximum amount of an assessment; (7) a method to calculate a period of assessment consistent with AS 29.55.105 (f); (8) a description of the application process and eligibility requirements for financing repaid by assessments under the program; (9) a method for a property owner applying to participate in the program to demonstrate the property owner's ability to fulfill financial obligations and pay assessments; the method must be based on appropriate underwriting factors, including (A) verification that the property owner (i) is the legal owner of the benefited property; (ii) is current on mortgage and property tax payments; and (iii) is not insolvent or in bankruptcy proceedings; and (B) an appropriate ratio between the amount of the assessment and the market value of the property; (10) an explanation of the manner in which the municipality shall assess the property and collect assessments; (11) the lender notice requirement under AS 29.55.115 ; (12) the review requirement under AS 29.55.120 ; (13) a description of marketing and participant education services provided by the municipality for the program; (14) a description of quality assurance and antifraud measures instituted by the municipality for the program and the consequence or penalty prescribed by the municipality for a property owner who participates in the program but does not complete an energy or resilience improvement project as proposed; and (15) a description of the insurance requirements, including a requirement that the property owner have insurance against damage to the energy or resilience improvement project for the life of the assessment. (b) The municipality shall make the report available for public inspection (1) on the Internet website of the municipality; and (2) at the primary governing offices of the municipality. Sec. 29.55.115. Notice to mortgage holder required for participation. Before a municipality may enter into a written contract with a record owner of property to impose an assessment to repay the financing of an energy or resilience improvement project under AS 29.55.100 , the property owner shall (1) give each holder of a mortgage lien on the property at least 30 days' written notice of the intention of the property owner to participate in a program under AS 29.55.100 ; and (2) obtain written consent from each holder of a mortgage lien on the property. Sec. 29.55.120. Review required. The record owner of property on which an assessment is imposed under AS 29.55.105 shall obtain (1) for each proposed energy or resilience improvement project, (A) a review of the energy, emissions, or resilience baseline conditions, as appropriate; and (B) the projected reduction in energy costs, energy consumption or demand, or emissions affecting local air quality, or increase in resilience, as appropriate; and (2) for each completed energy or resilience improvement project, verification that the energy or resilience improvement project was properly completed and is operating as intended. Sec. 29.55.125. Direct acquisition by owner. The proposed arrangements for financing an energy or resilience improvement project may authorize the property owner to (1) purchase directly the related equipment and materials for the energy or resilience improvement project; and (2) contract directly, including through lease, a power purchase agreement, or other service contract, for the energy or resilience improvement project. Sec. 29.55.130. Recording of notice of assessment. (a) A municipality that authorizes financing through assessments under AS 29.55.105 shall file written notice of each assessment in the property records of the recording district in which the property is located. (b) The notice under (a) of this section must contain (1) the amount of the assessment; (2) the legal description of the property; (3) the name of each property owner; and (4) a reference to the statutory assessment lien provided under AS 29.55.135 . Sec. 29.55.135. Lien. (a) Assessments under AS 29.55.105 and any interest or penalties on the assessments are liens on the property assessed and are prior and paramount to all liens except municipal tax liens and special assessments. Assessment liens may be enforced as provided in AS 29.45.320 — 29.45.470 for enforcement of property tax liens. (b) Assessment liens run with the land, and that portion of the assessment under the assessment contract that has not yet become due is not eliminated by foreclosure of a property tax lien or a lien for an assessment. (c) Penalties and interest may be added to delinquent installments of the assessments in the same manner as provided in AS 29.45.250 . (d) A municipality may recover costs and expenses, including attorney fees, in a suit to collect a delinquent installment of an assessment in the same manner as in a suit to collect a delinquent property tax. Sec. 29.55.140. Bonds or notes. (a) A municipality may issue bonds or notes to finance energy and resilience improvement projects subject to assessment under AS 29.55.105 . (b) Bonds or notes issued under this section may not be general obligations of the municipality. The bonds or notes must be secured by one or more of the following, as provided by the governing body of the municipality in the resolution or ordinance approving the bonds or notes: (1) payments of assessments on benefited property in one or more specified regions designated under AS 29.55.100 ; (2) reserves established by the municipality from grants, bonds, or net proceeds or other lawfully available funds; (3) municipal bond insurance, lines of credit, public or private guaranties, standby bond purchase agreements, collateral assignments, mortgages, or any other available means of providing credit support or liquidity; and (4) any other funds lawfully available for purposes consistent with AS 29.55.100 — 29.55.165. (c) A municipal pledge of assessments, funds, or contractual rights in connection with the issuance of bonds or notes by the municipality under this section is a first lien on the assessments, funds, or contractual rights pledged in favor of the person to whom the pledge is given, without further action by the municipality. The lien is valid and binding against any other person, with or without notice. (d) Bonds or notes issued under this section must further one or more of the following essential public and governmental purposes: (1) improvement of the reliability of local electrical systems; (2) reduction of energy costs; (3) reduction of energy demand on local utilities; (4) reduction of emissions affecting local air quality; (5) economic stimulation and development; (6) enhancement of property values; (7) enhancement of employment opportunities; (8) improvement of building resilience. Sec. 29.55.145. Joint implementation. A municipality may enter into an agreement with (1) a third party to administer a program under AS 29.55.100 ; (2) one or more municipalities to implement or administer jointly a program under AS 29.55.100 ; if two or more municipalities jointly implement a program, a single public hearing held jointly by the cooperating municipalities is sufficient to satisfy the requirement of AS 29.55.100 (b)(3). Sec. 29.55.150. Prohibited acts. A municipality that establishes a region under AS 29.55.100 may not make the issuance of a permit, license, or other authorization from the municipality to a person who owns property in the region contingent on the person entering into a written contract to repay the financing of an energy or resilience improvement project through assessments under AS 29.55.105 , or otherwise compel a person who owns property in the region to enter into a written contract to repay the financing of an energy or resilience improvement project through assessments under AS 29.55.105 . Sec. 29.55.155. Application. AS 29.55.100 — 29.55.165 apply to home rule and general law municipalities. Sec. 29.55.160. Definitions. In AS 29.55.100 — 29.55.165, (1) “finance” and “financing” include refinancing an existing project; (2) “mortgage” has the meaning given in AS 13.06.050 ; (3) “program” means a program established under AS 29.55.100 . Sec. 29.55.165. Short title. AS 29.55.100 — 29.55.165 may be cited as the Municipal Property Assessed Clean Energy and Resilience Act.