New Jersey-2012-A2507-Introduced

An Act establishing a Solar Thermal Expansion Loan and Grant program, supplementing P.L.1974, c.80 (C.34:1B-1 et seq.), and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Sections 1 through 5 of this act shall be known and may be cited as the "Solar Thermal Expansion and Jobs Creation Act."

2. As used in sections 1 through 5 of P.L. , c. (C. ) (pending before the Legislature as this bill):

"Authority" means the New Jersey Economic Development Authority established pursuant to section 4 of P.L.1974, c. 80 (C.34:1B-4).

"Domestic materials" means articles, materials and supplies mined or produced in the United States.

"Non-profit hospital" means a hospital, licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.), within the State that is exempt from federal taxation pursuant to paragraph (3) of subsection c. of section 501 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.501(c)(3)).

"Program" means the Solar Thermal Expansion Loan and Grant program, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

"Study commission" means the Study Commission on Solar Thermal Energy, established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).

"Solar thermal system" means a system of related components that uses solar energy to heat water or air but does not include solar photovoltaic systems that produce electricity.

"University" means a private institution of higher education and a public institution of higher education, as defined in N.J.S. 18A:72A-3.

3. a. The New Jersey Economic Development Authority, in consultation with the Board of Public Utilities, the Department of Environmental Protection, and the Department of Community Affairs, shall establish a "Solar Thermal Expansion Loan and Grant Program" for the purpose of increasing the use of solar thermal energy technology within the State and creating jobs within the State.

b. The authority shall establish and maintain a separate, dedicated fund for all money appropriated by the Legislature explicitly for the program, which shall be known as the "Solar Thermal Expansion Loan and Grant Fund." The authority shall establish and maintain within the fund a revolving loan account and a grant account, each of which shall initially be capitalized with $5 million of the amount appropriated to the fund by section 6 of this act. All money remitted to the authority as repayment of a loan made through the program shall be deposited into the loan account. If, at any time, the authority ceases to accept new applications for loans and grants through the program, then upon the authority's completion of its processing of all applications it has received up to that time, all money remaining in the fund and all money remitted to the authority as repayment for a loan made through the program shall be deposited in the Economic Recovery Fund, established pursuant to section 3 of P.L.1992, c.16 (C.34:1B-7.12).

c. The authority shall utilize money in the fund's revolving loan account to issue low-interest loans to the owners or operators of private commercial or industrial facilities that may be used exclusively for the installation of solar thermal systems. The amount of any loan shall not exceed 50 percent of the projected project costs.

d. The authority shall utilize money in the fund's grant account to award grants to municipalities, non-profit hospitals, universities, and the owners of low-income, multi-dwelling buildings, which may include mixed-use developments, that may be used exclusively for the installation of solar thermal systems. The amount of any grant shall not exceed 50 percent of the projected project costs.

e. The authority shall, not later than the 30th day following its receipt of the report of the temporary study commission pursuant to subsection e. of section 4 of this act, establish the guidelines for its implementation of the program. The guidelines shall take into account the information and recommendations contained in the report.

f. The authority shall develop an application process for the program. The application process shall require the applicant to provide the authority, in addition to all other information deemed necessary by the authority, with an estimate of (1) the costs associated with acquiring, installing, and maintaining the proposed solar thermal system, (2) the usable life of the proposed solar thermal system, (3) the reduction in energy usage attributable to the proposed system stated as the number of kilowatt hours per year, and (4) the number of jobs that the installation and maintenance of the proposed solar thermal system will require to be created. The authority shall charge an application fee sufficient to recover all of the costs associated with reviewing and processing an application.

g. An entity shall be permitted to submit an application for a loan or grant under the program during the three year period that begins on the first day of the tenth month following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and ends on the last day of the 45th month following that date of enactment.

h. The authority shall establish criteria for selecting solar thermal system projects for loans and grants, which shall consider as the most important factors: (1) the total reduction of energy usage attributable to the solar thermal system over the course of the system's usable life measured against the cost of acquiring, installing, and maintaining the system over the course of the system's usable life; and (2) the number of jobs that would be created by installing and maintaining the system measured against the cost of acquiring, installing, and maintaining the system over the course of the system's usable life.

i. If, based upon the criteria established in and pursuant to subsection h. of this section, the authority determines that two or more solar thermal projects are equally deserving of a loan or grant, the authority shall select the project or projects that utilize the greatest percentage of domestic materials in the solar thermal system.

j. The authority shall draft an annual report concerning the Solar Thermal Expansion Loan and Grant Program within 30 days after the end of the State's fiscal year, unless the authority did not issue a new grant or loan through the program during that preceding fiscal year. The authority's annual report shall include: (1) a list containing each grant and loan issued by the authority through the program during the preceding fiscal year, including the amount of the grant or loan, the project it will fund, and its recipient, (2) a list containing each loan made by the authority through the program that has an outstanding balance at the end of the preceding fiscal year, including the recipient of the loan, the project for which the loan was used to fund, and the loan's outstanding balance, (3) a list containing each loan made by the authority through the program that was defaulted on during the preceding fiscal year, (4) an estimate of the number of jobs created by projects that received a grant or a loan through the program during the preceding fiscal year and since the program's inception, (5) an estimate of the annualized reduction in energy consumption that will be produced by projects that received a grant or a loan during the preceding fiscal year and since the program's inception, and (6) an assessment of the overall effectiveness of the program and a recommendation of any changes that would increase the program's effectiveness. Upon completing its draft of the annual report, the authority shall transmit a copy of the report to the President of the Board of Public Utilities, to the Commissioner of Environmental Protection, to the Commissioner of Community Affairs, and the Secretary of State for their review. The named officers shall, not later than the 30th day after such transmittal of the draft report, return their respective responses to the draft report, including any recommendations for improvements to the program. The authority shall incorporate those responses into the draft and, not later than the 60th day after its transmittal of the draft report, prepare and submit the final report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature.

4. a. There is established a temporary study commission to be known as the "Study Commission on Solar Thermal Energy" to review existing solar thermal technologies and develop recommendations for implementing a Solar Thermal Expansion Loan and Grant program, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. The study commission shall consist of five members. The study commission chair shall be the Chief Executive Officer of the New Jersey Economic Development Authority, ex officio, or chief executive officer's designee. The remaining members of the study commission shall consist of the Commissioner of Environmental Protection, ex officio, or the commissioner's designee, the President of the Board of Public Utilities, ex officio, or the president's designee, the Commissioner of Community Affairs, ex officio, or the commissioner's designee, and an officer or employee of the New Jersey Business Action Center in the Department of State designated by the Secretary of State. Vacancies in the membership of the study commission shall be filled in the same manner as the original appointments were made.

c. The members of the study commission shall hold their initial organizational meeting as soon as practicable, but no later than 30 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).

d. The study commission shall hold hearings and take testimony on matters relating to solar thermal systems and the program. The hearings shall be open to the public and shall be held in facilities that are accessible to the disabled. The authority shall make available, through its website, the minutes of all hearings held by the study commission.

e. The study commission shall submit its report to the Governor, to the authority, and to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), within 180 days of its initial organizational meeting. The study commission's report shall include information concerning:

(1) Solar thermal energy technology, including (a) the increase in energy efficiency attributable to utilizing a solar thermal system, (b) the factors that can impact the level of efficiency achievable by a solar thermal system, (c) the reduction in energy usage attributable to the use of a solar thermal system on an annualized basis, (d) the cost of purchasing and installing solar thermal systems of varying sizes, (e) the average usable life of a solar thermal system, and (f) the potential impact on aggregate energy demand within the State at varying levels of solar thermal utilization;

(2) The types of public and private facilities that would yield the greatest reduction in energy usage, per dollar spent on acquisition, installation, and maintenance, if a solar thermal system were installed at that type of facility;

(3) Implementation of the low-interest revolving loan account to be established pursuant to subsection b. of section 3 of this act, including estimates of (a) the size and number of projects that could be sponsored, (b) the interest that would have to be charged to borrowers to ensure the self-perpetuation of the fund, considering both the potential for default and the potential for fluctuations in energy prices, (c) the length of time that would be required to repay the loan solely through money saved on energy costs attributable to the solar thermal system, and (d) the projected number of jobs that could be created on an annual basis through the revolving loan account;

(4) Implementation of the grant account to be established pursuant to subsection b. of section 3 of this act, including estimates of (a) the size and number of projects that could be sponsored, and (b) the projected number of jobs that could be created on through the grant program; and

(5) An application process that would permit the authority to identify the solar thermal system projects which would be (a) the most economically viable, (b) result in the greatest aggregate reduction of energy demand and (c) create the greatest number of jobs.

f. The authority shall provide such technical, stenographic, and secretarial assistance as may be required by the study commission. The commission may also request the assistance and services of employees of any other State department, board, bureau, commission, task force, or agency as it may require and as may be available to it for its purposes.

5. The authority may adopt implementation guidelines or directives, and adopt such administrative rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as are necessary for the implementation of the authority's responsibilities under subsection e. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), except that notwithstanding any provision of P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the authority may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as it deems necessary to implement the provisions of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) which shall be effective for a period not to exceed 12 months and shall thereafter be amended, adopted, or re-adopted in accordance with the provisions of P.L.1968, c.410 (C.52:14B-1 et seq.).

6. There is appropriated from the General Fund to the Economic Development Authority the sum of $10,000,000 to be credited to the Solar Thermal Expansion Loan and Grant Fund to effectuate the provisions of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

7. This act shall take effect immediately; section 3 shall remain inoperative until the first day of the ninth month next following enactment and section 4 shall expire upon submission of the commission's report to the Governor and the Legislature.

STATEMENT

This bill, entitled the "Solar Thermal Expansion and Jobs Creation Act," establishes the Study Commission on Solar Thermal Energy and a Solar Thermal Expansion Loan and Grant Program ("program").

The Study Commission on Solar Thermal Energy ("commission") will be chaired by the Chief Executive Officer of the New Jersey Economic Development Authority ("EDA"), ex officio, or his or her designee. The remaining members of the commission will consist of the Commissioner of Environmental Protection, ex officio, or the commissioner's designee, the President of the Board of Public Utilities, ex officio, or the president's designee, the Commissioner of Community Affairs, ex officio, or the commissioner's designee, and an officer or employee of the New Jersey Business Action Center in the Department of State designated by the Secretary of State.

The bill requires the commission to submit a report to the Governor and the Legislature. The commission's report, issued within 180 days after its initial meeting, will include information concerning solar thermal technology, the types of facilities that the program should target, and recommendations on how the program should be structured.

Based upon the commission's recommendations, and in consultation with the Department of Environmental Protection ("DEP"), Board of Public Utilities ("BPU"), and the Department of Community Affairs ("DCA"), the EDA is directed to establish a three year Solar Thermal Expansion Loan and Grant Program. The program will offer low-interest loans to the owners or operators of private commercial or industrial facilities that may be used exclusively for the installation of solar thermal systems. The EDA will use repaid loan funds and any proceeds thereof to issue new loans. The program will also award grants to municipalities, non-profit hospitals, universities, and the owners of low-income, multi-dwelling buildings, which may include mixed-use developments, that may be used exclusively for the installation of solar thermal systems. All loans and grants are capped at 50 percent of the project cost. The EDA is required to consider the reduction in energy usage and job creation as the primary factors in selecting projects for loans and grants. The EDA is also directed to provide a preference for projects that utilize materials made in the United States. Finally, the EDA is required to issue an annual report, with input from DEP, BPU, DCA and the Secretary of State, that summarizes the loans and grants made through the program, estimates the number of jobs created by the program, and makes any recommendations for changes to the program.

The bill appropriates $10 million from the General Fund for the program.