Committee weighs S.138 changes to commercial CPACE: remove voter approval, expand administrator options
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Summary
The Natural Resources & Energy committee heard from Mr. Yaki of the CFAES Alliance on S.138, a bill to authorize commercial property‑assessed clean energy (CPACE) districts; he urged removing a voter‑approval requirement, shifting disclosure duties to capital providers, and allowing municipalities, third parties or a state agency to serve as program administrators.
The Natural Resources & Energy committee on Tuesday heard testimony on S.138, a bill to permit commercial property‑assessed clean energy (CPACE) districts, and discussed substantial edits to streamline financing and clarify local roles.
Mr. Yaki of the CFAES Alliance told the committee he favors removing a voter‑approval requirement and giving municipal legislative bodies the authority to enact ordinances designating CPACE districts. "It would be, well, it would be by best practice to remove that and simply give the authority to the legislative body to, enact an ordinance to designate, the municipality as a property assessed clean energy district," he said, arguing the change would let local governments act faster to align project financing and timelines.
He also recommended limiting the municipality's involvement in private financing agreements to recording notice of the lien and a copy of the financing agreement, while placing formal disclosure obligations on the capital provider. "The recorder's office provides notice of encumbrances on the property," he said, and buyers' due diligence would reveal the assessment. Under his draft, the statute would require the capital provider to file a disclosure or a copy of the agreement rather than obligate the local government to detail financing terms.
On administration, Mr. Yaki said a local government should be able to choose whether the program administrator is an internal office, a contracted third party, or a state agency such as VITA. "That definition encompassing all the things that I've mentioned before in house, third party, state agency," he said, noting that most communities receive only a small number of CPACE applications annually and that applications often arrive "fully baked" by capital providers.
Committee members pressed for protections against conflicts of interest where an administrator also acts as a capital provider. An Unidentified Speaker warned, "I think that's conflict of interest," when Mr. Yaki acknowledged he sometimes wears both hats. Mr. Yaki agreed statutory language or contracting constraints could limit dual roles.
Members also expressed concern about removing state oversight. An Unidentified Speaker said that "not having any kind of overseer makes me a little concerned" and suggested that an agency such as the Department of Financial Regulation (DFR) or VITA review the draft and advise on supervisory roles, funding implications, and what legislative counsel should check.
The committee did not adopt final statutory language during the session. Members asked legislative counsel and DFR to review the proposed edits and planned to circulate a formal redraft for comment, with additional testimony from Joan Goldstein of VITA and Sam Sheehan to be scheduled later in the week.
The bill's next procedural steps are a revised draft and additional agency review; the committee signaled interest in moving the measure forward but did not vote on S.138 during the meeting.
