Fine Print: A-2502/S-1406 or the New Jersey Property Tax Assessment Municipal Financing Program
Proposed bill would let local governments loan money to property owners to deploy renewable energy systems.
Primary sponsors: Assemblyman Upendra Chivukula (D-Somerset) and Sen. Bob Smith (D-Middlesex)
Summary: The bill is designed to promote the development of new solar systems in New Jersey by allowing local governments to help property owners or a group of property owners install renewable energy systems or energy efficiency projects by loaning them money and having it repaid though a special property tax assessment.
What it would do: The legislation would direct the state Economic Development Authority to create low-cost sources of financing that towns participating in the program could tap. An identical bill, sponsored by Smith, cleared the Senate before lawmakers broke for their summer recess
Why it would help: If approved and signed into law, the bill would remove one of the biggest barriers to the cost of installing solar—the large upfront capital costs, which can run into tens of thousands of dollars, depending upon the size of the project. Under the bill, a homeowner or group of homeowners could borrow the money at low interest rates and pay it back over 10 years.
And you thought property taxes were high now: Under the bill, a town participating in the program would borrow funds from the EDA to install the solar system or finance the energy efficiency project. Payment on the loan would be collected quarterly by the municipality, with interest at a rate to be determined by the New Jersey Board of Public Utilities and the EDA.
Here’s another try at a revolving loan fund: The Christie administration has been pushing to create a revolving loan fund as a way of financing clean energy projects, which, until now, have largely been paid for from a surcharge on gas and electric bills. This fund would send the new property tax assessments, as well as money earned from the electricity generated by the solar systems, back to the EDA to pay off bondholders and to provide new financial incentives to towns to participate in the program.
Its prospects: Uncertain. Despite being sponsored by the chairmen of two powerful legislative committees, the bill has not yet been endorsed by the Christie administration and it attracted Republican opposition in the state Senate. According to a fiscal estimate prepared by the Office of Legislative Service, the fiscal impact on state and local governments is indeterminate because the bill is voluntary.