HomeMy WebLinkAboutAgenda 10-07-2025; 8-h - Adoption of a Resolution of Intent for Orange County to Participate in the North Carolina Commercial Property Assessed Capital Expenditure (C-PACE) Program
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date:October 7, 2025
Action Agenda
Item No.8-h
SUBJECT: Adoption of a Resolution of Intent for Orange County to Participate in the North
Carolina Commercial Property Assessed Capital Expenditure (C-PACE)
Program
DEPARTMENT: County Manager
ATTACHMENT(S):
Resolution of Intent to Adopt C-PACE
C-PACE Legislation – Senate Bill 802
North Carolina C-PACE Program
Guidelines and Toolkit
INFORMATION CONTACT:
Amy Eckberg, Sustainability Programs
Manager; (919) 245-2626
PURPOSE: To adopt a Resolution of Intent declaring Orange County’s intention to participate in
the statewide C-PACE Program and authorizing staff to proceed with the required public notice
and public hearing.
BACKGROUND: In July 2024, the North Carolina General Assembly adopted Senate Bill 802
authorizing the creation of a statewide Commercial Property Assessed Capital Expenditure (C-
PACE) program. This program allows commercial property owners to finance energy efficiency,
renewable energy, water conservation, and resiliency improvements through a voluntary special
assessment on the property. Staff previously provided the Board with an Information Item on this
program as part of the Board’s September 4, 2025 Business meeting agenda materials.
C-PACE enables property owners to finance up to 100% of eligible upgrades, with repayment
spread over the useful life of the improvements. This structure often results in lower annual
payments and positive cash flow, providing financial benefits such as reduced energy costs,
increased property value, and potentially more favorable interest rates due to the low-risk tax
assessment model.
Already implemented in 40 states and Washington, D.C., C-PACE is now available in North
Carolina. The program is administered by the Economic Development Partnership of North
Carolina (EDPNC), with property owners working directly with private lenders. Repayment occurs
through a property assessment and lien, which may allow financing over longer terms than
traditional loans.
For Orange County property owners to participate, the County must first adopt a Resolution of
Intent, followed by a public hearing and adoption of a final Authorizing Resolution. If adopted, the
County’s responsibilities will be limited to education and outreach, executing agreements,
recording liens, and coordinating with EDPNC – requiring minimal administrative effort. The
County will not provide funding, financing, billing, or collections for C-PACE projects.
1
FINANCIAL IMPACT: This item has no financial impact. Financing is provided by private capital
providers, and the County does not incur debt or provide funds for improvements.
ALIGNMENT WITH STRATEGIC PLAN: This item supports:
GOAL 1: ENVIRONMENTAL PROTECTION AND CLIMATE ACTION
OBJECTIVE 1. Identify the priorities and resources necessary to implement the Climate
Action Plan.
OBJECTIVE 3. Improve educational opportunities for County staff and community
members on climate action and available resources to advance climate action projects.
GOAL 6: DIVERSE AND VIBRANT ECONOMY
OBJECTIVE 2. Review and revise County policies and regulations to support business
investment in Orange County.
OBJECTIVE 5. Increase access to and awareness of resources and assistance available
to residents and businesses.
RECOMMENDATION(S): The Manager recommends that the Board:
1. Adopt the Resolution of Intent to Join C-PACE program; and
2. Direct staff to schedule and provide public notice of a public hearing, along with
consideration of a final resolution to join C-PACE, at a subsequent Board meeting.
2
RES‐2025‐050
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION DECLARING INTENT OF THE COUNTY OF ORANGE, NORTH CAROLINA TO
PARTICIPATE IN THE COMMERCIAL PROPERTY ASSESSED CAPITAL EXPENDITURE (C‐PACE)
PROGRAM
WHEREAS, Article 10B of Chapter 160A of the General Statutes of North Carolina, as amended (the “C‐
PACE Act”), authorizes the establishment of a statewide commercial property assessed capital
expenditure (C‐PACE) program (the “C‐PACE Program”) that local governments may voluntarily join; and
WHEREAS, the C‐PACE Act authorizes the North Carolina Department of Commerce (the “Program
Sponsor”) to oversee the C‐PACE Program and requires the Economic Development Partnership of North
Carolina, Inc., a North Carolina nonprofit corporation (the “Statewide Administrator”), to administer the
C‐PACE Program and, in support thereof, provide certain administrative services described in North
Carolina General Statute § 160A‐239.14; and
WHEREAS, the C‐PACE Act and C‐PACE Program permit willing owners of commercial, industrial, or
agricultural real property, or residential real property with five or more dwelling units located in the
jurisdictional boundaries of participating local governments (“Qualifying Commercial Property”) to obtain
direct financing (“C‐PACE Financing”) from a “capital provider” (as further defined in North Carolina
General Statute § 160A‐239.12(1), “Capital Provider”) for “qualifying improvements” (as further defined
in North Carolina General Statute § 160A‐239.12(14), “Qualifying Improvements”) approved by the
Program Sponsor, including energy efficiency measures, resiliency measures, renewable energy
measures, and water conservation measures; and
WHEREAS, under the C‐PACE Act, C‐PACE Financing shall be secured by a (a) voluntary assessment
imposed on Qualifying Commercial Property by a local government for the total amount of such financing
(the “C‐PACE Assessment”) and (b) lien on such Qualifying Commercial Property until the financing is paid
in full (the “C‐PACE Lien”); and
WHEREAS, the County of Orange, North Carolina, (“The County”) acting by and through its Board of
Commissioners, desires to participate in the CPACE Program and, in support thereof, adopt a resolution
setting forth the items required by North Carolina General Statute § 160A‐239.15(a);
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the County of Orange, North
Carolina as follows:
Section 1. The County hereby authorizes (a) the C‐PACE Program to operate within its jurisdictional
boundaries and (b) the Statewide Administrator to provide the administrative services described in North
Carolina General Statute § 160A‐239.14.
Section 2. The County intends to (a) authorize C‐PACE Financing within the jurisdictional boundaries of
the County, (b) authorize the imposition of C‐PACE Assessments to secure repayment of C‐PACE Financing,
(c) assign the C‐PACE Lien to Capital Providers providing C‐PACE Financing and (d) delegate billing,
collection, and enforcement duties for the C‐PACE Assessment and C‐PACE Lien to Capital Providers.
3
Section 3. The amount of any C‐PACE Financing and related C‐PACE Assessment repayment terms shall be
pursuant to an agreement by and among the County, the Statewide Administrator, a “property owner”
(as defined in the C‐PACE Act, a “Property Owner”) and Capital Provider (an “Assessment Agreement”)
and a financing agreement between a Property Owner and a Capital Provider in which a Property Owner
agrees to repay a Capital Provider for the C‐PACE Financing provided, including, but not limited to, any
finance charges, fees, debt servicing, accrual of interest and penalties, and any terms relating to the
treatment of prepayment and partial payment, and the billing, collection, and enforcement of the C‐PACE
Financing.
Section 4. The Orange County Tax Office shall, upon receipt from the Statewide Administrator of an
approved project application for C‐PACE Financing within the jurisdictional boundaries of the County,
execute an Assessment Agreement, a Notice of C‐PACE Assessment, and an Assignment of C‐PACE Lien.
Section 5. The County shall be reimbursed by the Statewide Administrator for the actual and reasonable
costs associated with the performance of the duties described in Section 4 hereof.
Section 6. A public hearing on the C‐PACE Program will be held by Orange County on October 21, 2025 at
7pm at Southern Human Services, 2501 Homestead Road, Chapel Hill, NC 27514.
Section 7. Nothing in this resolution shall be interpreted as authorizing the County to pledge, offer, or
encumber its full faith and credit, and the County shall not pledge, offer, or encumber its full faith and
credit in connection with any C‐PACE Financing.
Section 8. Should any provision or provisions of this Resolution be declared invalid or unenforceable in
any respect by final decree of any court of competent jurisdict ion, the invalidity or unenforceability of any
such provisions shall not affect the remaining provisions of such Resolution.
Section 9. All resolutions or parts thereof in conflict herewith are, to the extent of such conflict, hereby
repealed. Section 10. This Resolution shall take effect upon its adoption.
* * * * * * *
ADOPTED this 7th day of October, 2025.
I, _________________, Clerk for Orange County, North Carolina, DO HEREBY CERTIFY that the foregoing
is a true and complete copy of a resolution adopted by Orange County, North Carolina at a regular meeting
duly called and held on ______________. WITNESS my hand and the official seal of Orange County this
____ day of ___________, 20__.
___________________________________
Clerk to the Board, Orange County, NC
4
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2023
SESSION LAW 2024-44
SENATE BILL 802
*S802-v-5*
AN ACT TO ADVANCE BUILDING RESILIENCY AND UTILITY EFFICIENCY IN
NORTH CAROLINA BY AUTHORIZING A STATEWIDE PROGRAM TO UTILIZE
ASSESSMENTS TO REPAY NONPUBLIC FINANCING OF COMMERCIAL
BUILDING IMPROVEMENTS THAT WILL PROMOTE ECONOMIC DEVELOPMENT,
REDUCE UTILITY BILL COSTS, AND HARDEN COMMERCIAL BUILDINGS
AGAINST STORM AND FLOOD DAMAGE AND TO AMEND ARTICLE 8 OF
CHAPTER 143 OF THE GENERAL STATUTES TO MODIFY THE REQUIREMENTS
TO BE CERTIFIED AS A MINORITY BUSINESS OR HISTORICALLY
UNDERUTILIZED BUSINESS.
The General Assembly of North Carolina enacts:
SECTION 1. Chapter 160A of the General Statutes is amended by adding a new
Article to read:
"Article 10B.
"Commercial Property Assessed Capital Expenditure (C-PACE) Act.
"§ 160A-239.11. Purpose; findings.
This Article shall be known and may be cited as the "Commercial Property Assessed Capital
Expenditure (C-PACE) Act." This Article authorizes the establishment of a statewide C-PACE
Program that local governments may voluntarily join to allow willing owners of commercial,
industrial, agricultural, nonprofit, and multifamily residential properties with five or more
dwelling units to obtain low-cost, long-term financing for qualifying improvements, including
energy efficiency, water conservation, renewable energy, and resilience projects, secured by an
assessment and lien authorized by this Article. The State finds that a valid public purpose exists
because the use of a C-PACE Program creates an additional financing mechanism for property
owners to use private funds to finance improvements to their eligible property, thereby driving
economic development by creating a diversity of jobs in the resilience and clean energy sectors
of the economy. The assessment requires minimal upfront costs and provides a more accessible
financial mechanism to fund improvements that will increase the tax value of the affected
properties at minimal administrative cost to local governments. C-PACE improvements allow
property owners to save on their utility bills because the improvements lead to energy or utility
savings and will result in improved indoor air quality or increased resilience, which will increase
the ability of communities and local governments to respond to natural disasters and improve
public health.
"§ 160A-239.12. Definitions.
The following definitions apply in this Article:
(1) Capital provider. – A private entity, or the private entity's designee, successor,
and assigns, that makes or funds qualifying improvements under this Article.
(2) Commercial property assessed capital expenditure program (C-PACE
Program). – A program wherein a C-PACE assessment and C-PACE lien are
voluntarily imposed by a local government on qualifying commercial property
to pay for the costs of qualifying improvements.
5
Page 2 Session Law 2024-44 Senate Bill 802
(3) C-PACE assessment. – A voluntary assessment imposed on a commercial
property by a local government under this Article pursuant to an assessment
agreement for the total amount of the C-PACE financing. The voluntary
C-PACE assessment shall not constitute a tax.
(4) C-PACE financing. – Direct financing between capital providers and property
owners within the jurisdictional boundaries of a local government
participating in the C-PACE Program to finance qualifying improvements.
(5) C-PACE lien. – A lien to secure the C-PACE assessment that remains on the
qualifying property until paid in full.
(6) C-PACE toolkit. – A comprehensive set of documents developed by the
statewide administrator in consultation with stakeholders and local
governments and subject to approval by the program sponsor that describes
the C-PACE Program guidelines, application approval criteria, and forms
consistent with the administration of the program as provided for in this
Article.
(7) Financing agreement. – The contract in which a property owner agrees to
repay a capital provider for the C-PACE financing provided, including, but
not limited to, any finance charges, fees, debt servicing, accrual of interest and
penalties, and any terms relating to the treatment of prepayment and partial
payment, and the billing, collection, and enforcement of the C-PACE
financing.
(8) Local government. – Any county or city.
(9) Program sponsor. – The North Carolina Department of Commerce.
(10) Project application. – The application submitted to the statewide administrator
by the property owner to demonstrate that a proposed project qualifies for
C-PACE financing under this Article.
(11) Property owner. – The holder of title in fee simple to a qualifying commercial
property.
(12) Publicly-owned land. – Property that is owned by a State or local
governmental entity and that is subject to a leasehold.
(13) Qualifying commercial property. – Privately owned commercial, industrial,
or agricultural real property or privately owned residential real property
consisting of five or more dwelling units. This term includes property owned
by nonprofit, charitable, or religious organizations.
(14) Qualifying improvement. – A permanently affixed improvement to a building
on a qualifying commercial property as part of the construction or renovation
of the qualifying property and that includes one or more of the following
approved by the program sponsor:
a. Energy efficiency measure. – An equipment, physical component, or
program change implemented that results in less energy used to
perform the same function and that meets or exceeds then-existing
State and federal building codes and efficiency standards or
conservation codes, including, but not limited to, energy produced
from a combined heat and power system that uses nonrenewable
energy resources.
b. Resiliency measure. – An equipment, physical component, or program
change implemented that includes, but is not limited to, storm retrofits,
flood mitigation, stormwater management, wind resistance, indoor air
quality improvement, electric vehicle charging station, backup energy
generators enrolled in an electric public utility demand response
program, energy storage, and microgrids and other resilience projects.
6
Senate Bill 802 Session Law 2024-44 Page 3
c. Renewable energy measure. – A renewable energy resource as defined
in G.S. 62-133.8.
d. Water conservation measure. – An equipment, physical component, or
program change implemented to decrease water consumption or
demand or to address safe drinking water.
(15) Statewide administrator. – The Economic Development Partnership of North
Carolina.
"§ 160A-239.13. Statewide C-PACE Program – authorization.
(a) The State authorizes a statewide C-PACE Program in which any local government
may participate.
(b) The program sponsor is hereby authorized under this Article to oversee the C-PACE
Program.
"§ 160A-239.14. Statewide C-PACE Program – administration.
(a) In the administration of the C-PACE Program, the statewide administrator shall do
the following:
(1) Prepare a C-PACE toolkit in consultation with stakeholders and local
governments and subject to approval by the program sponsor prior to
accepting applications for C-PACE financing, which shall include, at a
minimum, all of the following:
a. A form of assessment agreement to be used between a local
government and property owner specifying the terms of the C-PACE
assessment.
b. A form of notice of C-PACE assessment that identifies the qualified
commercial property subject to the C-PACE assessment and the
property owner consenting to the C-PACE assessment.
c. A form of assignment of the C-PACE lien from the local government
to the capital provider that cross-references the registry book and page
number of the notice C-PACE assessment giving rise to the lien.
d. A form of consent to a C-PACE assessment by the holder of a
mortgage, deed of trust, or other lien upon the qualifying commercial
property.
e. A form of project application with checklist requirements and
corresponding documentation that will be required by the statewide
administrator to approve a project application.
(2) Impose fees to offset the actual and reasonable costs of administering the
C-PACE Program, including:
a. An application fee not to exceed seven hundred fifty dollars ($750.00).
b. A processing fee assessed to the property owner whose application for
C-PACE financing is approved, which shall be one percent (1%) of
the total amount financed but shall not be more than twenty-five
thousand dollars ($25,000).
(3) Establish the process for reviewing and evaluating applications, which shall,
at a minimum, require the following to be provided or demonstrated:
a. For an existing building: (i) where renewable energy, energy
efficiency, or water conservation measures are proposed, an energy
analysis by a licensed engineering firm or engineer or another
qualified professional listed in the C-PACE toolkit stating that the
proposed qualifying improvements will result in more efficient use or
conservation of energy that meets or exceeds then-existing State and
federal building codes and efficiency standards or conservation codes,
more efficient use or conservation of water, the reduction of
7
Page 4 Session Law 2024-44 Senate Bill 802
greenhouse gas emissions, or the addition of renewable sources of
energy or water or (ii) where resilience measures are proposed,
certification by a licensed engineer stating that the qualifying
improvements will result in improved resilience.
b. For construction of a new building, certification by a licensed
engineering firm or engineer stating that the proposed qualif ying
improvements will allow the proposed project to exceed the energy or
water efficiency requirements of the current State building code, or in
the case of a resiliency measure, achieve compliance with a national
model resiliency standard.
c. For existing or new buildings, certification by a licensed engineering
firm or engineer that all available electric public utility energy
efficiency and demand response programs available to property
owners and any tenants thereof have been evaluated prior to applying
for C-PACE financing.
(4) Accept and approve project applications for C-PACE financing meeting the
requirements of subdivision (3) of this subsection.
(5) Require any property owner applying for C-PACE financing to certify that the
applicant:
a. Is the holder of title in fee simple to the qualifying commercial
property and that title to the qualifying commercial property is not in
dispute.
b. Is current on all mortgage payments and property taxes.
c. Is not insolvent or in bankruptcy proceedings.
(6) Upon execution by the local government of (i) a C-PACE assessment and (ii)
a notice of assignment of C-PACE lien related to an approved project
application, record such documents in the office of the register of deeds in the
county in which the approved property is located. The statewide administrator
may delegate recording duties to the property owner and the capital provider.
(7) Submit a report to the program sponsor annually.
(b) The provisions of Chapter 150B of the General Statutes shall not apply to the C-PACE
toolkit or any actions of the program sponsor or statewide administrator in the administration of
the program.
"§ 160A-239.15. Local government participation.
(a) A local government seeking to participate in the C-PACE Program shall adopt a
resolution that includes all of the following:
(1) A grant of authorization for the C-PACE Program to operate within its
jurisdictional boundaries and for the statewide administrator to provide the
administrative services described in G.S. 160A-239.14.
(2) A statement that the local government intends to (i) authorize C-PACE
financing, (ii) authorize the imposition of C-PACE assessments on qualifying
commercial properties benefitting from qualifying improvements to secure
repayment of C-PACE financing, (iii) assign the C-PACE lien to the capital
provider providing C-PACE financing, and (iv) delegate billing, collection,
and enforcement duties for the C-PACE assessment and C-PACE lien to
capital providers.
(3) A statement that the amount of a C-PACE financing and related assessment
repayment terms shall be pursuant to the related financing agreement.
(4) A statement identifying the local government department or employee that
shall, upon receipt of an approved project application for C-PACE financing
within its jurisdictional boundaries from the statewide administrator, execute
8
Senate Bill 802 Session Law 2024-44 Page 5
the documents included in G.S. 160A-239.14(a)(1)a., b., and c. on behalf of
the local government.
(5) A statement that the local government shall be reimbursed by the statewide
administrator for the actual and reasonable costs associated with the
performance of the duties described in subdivision (4) of this subsection.
(6) A statement of the time and place for a public hearing on the proposed
program.
(b) The governing body of the local government may, after conducting a public hearing
on the proposed program, adopt a resolution providing that the local government is joining the
C-PACE Program. If the local government seeking to participate in the C-PACE Program is a
city, the resolution adopted pursuant to this subsection shall be effective only with the
concurrence of the governing body of the county in which the city is located.
(c) Pursuant to G.S. 160A-239.17(4), no funds for repayment of the voluntary C-PACE
assessment should be received by the participating local government. However, if any such funds
are received by the participating local government, such funds shall be custodial funds as
described in G.S. 159-13(a) for the benefit of the capital provider.
"§ 160A-239.16. Immunity and foreclosure process.
(a) Neither the State nor any participating local government, its officers, or employees
shall be liable for any actions taken pursuant to this Article. A local government shall not be
financially or legally liable or responsible for any assessment and lien imposed within its
jurisdiction under the program.
(b) The capital provider shall be solely responsible for all billing, collection, and
enforcement of the C-PACE assessment and C-PACE lien.
(c) Delinquent C-PACE assessment payments shall incur interest and penalties as
specified in the financing agreement and shall accrue to the C-PACE lien.
(d) Enforcement of a delinquent C-PACE assessment payment by the capital provider
shall be in the manner of the foreclosure of a deed of trust as provided in Article 2A of Chapter
45 of the General Statutes, except that C-PACE assessment payments not yet billed or due may
not be accelerated or extinguished by foreclosure of the delinquent assessment payment or
payments. Any outstanding or delinquent State, local, or federal taxes or liens at the time of the
foreclosure proceeding shall be satisfied first, but the C-PACE lien shall be superior to all other
liens on the property from the date on which the notice of the C-PACE assessment was recorded
until the C-PACE assessment, interest, penalties, and charges accrued or accruing are paid.
"§ 160A-239.17. C-PACE assessment and lien.
The following shall apply to the C-PACE assessment and lien:
(1) The lien shall be inferior to all prior and subsequent State, local, and federal
taxes or liens and superior to all other liens on the property from the date on
which the notice of the C-PACE assessment is recorded until the C-PACE
assessment, interest, penalties, and charges accrued or accruing are paid.
(2) The lien shall run with the land, and that portion of the C-PACE assessment
that is not yet due may not be accelerated or eliminated by foreclosure of a
property tax or other lien.
(3) The C-PACE lien may not be contested on the basis that the improvement is
not a qualified improvement or for any procedural or substantive irregularities
related to the financing.
(4) For C-PACE assessments for leaseholds, the C-PACE assessment may be
levied on the leasehold or possessory interest, including on publicly-owned
land, subject to the consent of the entity owning the property and shall be
payable by the owner of the leasehold interest.
"§ 160A-239.18. Financing.
9
Page 6 Session Law 2024-44 Senate Bill 802
(a) The financing for assessments imposed under this Article may include, but is not
limited to:
(1) The cost of materials and labor necessary for the installation or modification
of a qualified improvement.
(2) Permit fees.
(3) Inspection fees.
(4) Financing fees.
(5) Application and administrative fees.
(6) Project development and engineering fees.
(7) Interest reserves.
(8) Capitalized interest, in an amount determined by the owner of the commercial
property and the capital provider.
(9) Any other fees or costs incurred by the property owner incident to the
installation, modification, or improvement on a specific or pro rata basis, as
determined by the local government.
(b) The term of the C-PACE financing may not exceed the weighted average useful life
of qualifying improvements.
(c) The total amount for financing of the qualifying improvement secured by the property
shall not exceed thirty-five percent (35%) of the value of the property. The calculation of value
used to determine the maximum amount of financing available for a particular property shall
reflect the reasonable expected stabilized value of the property with the proposed qualifying
improvements installed.
(d) The financing agreement between the capital provider and the property owner shall
be negotiated by the parties, including all terms and conditions of repayment, including interest,
penalties, and prepayment.
"§ 160A-239.19. Lender consent.
Prior to entering into an assessment agreement, the property owner must submit to the
statewide administrator a written statement, executed by each holder of a mortgage, deed of trust,
or other lien on the property securing indebtedness, indicating their consent to the C-PACE
assessment and that the C-PACE assessment does not constitute an event of default under the
terms of the mortgage, deed of trust, or other indebtedness secured by lien.
"§ 160A-239.20. Prohibition on use of public funds.
It is the intent of this Article that neither the State nor any local government shall use public
funds to fund or repay any C-PACE assessment. Nothing in this Article shall be interpreted as
authorizing a local government to pledge, offer, or encumber its full faith and credit, and no local
government shall pledge, offer, or encumber its full faith and credit under this Article.
"§ 160A-239.21. Purchases and contracts.
The proposed arrangements for C-PACE financing may authorize the property owner to do
any of the following:
(1) Directly purchase the related equipment and materials for the installation or
modification of a qualifying improvement.
(2) Contract directly, including through lease, power purchase agreement, or
other service contract, for the related equipment and materials used in the
installation or modification of a qualif ying improvement."
SECTION 2. G.S. 105-375(i) reads as rewritten:
"(i) Issuance of Execution. – At any time after three months and before two years from
the indexing of the judgment as provided in subsection (b) of this section, execution shall be
issued at the request of the tax collector in the same manner as executions are issued upon other
judgments of the superior court, and the real property shall be sold by the sheriff in the same
manner as other real property is sold under execution with the following exceptions:
(1) No debtor's exemption shall be allowed.
10
Senate Bill 802 Session Law 2024-44 Page 7
(2) At least 30 days prior to the day fixed for the sale, the sheriff shall send notice
by registered or certified mail, return receipt requested, to the taxpayer at the
taxpayer's last known address, in lieu of personal service, and to all lienholders
of record. If within 10 days following the mailing of a notice, a return receipt
has not been received by the sheriff indicating receipt of the notice, then the
sheriff shall make additional efforts to locate and notify the taxpayer, if not
yet notified, and all unnotified lienholders of record of the sale under
execution in accordance with subdivision (4) of subsection (c) of this section.
(3) The sheriff shall add to the amount of the judgment as costs of the sale any
postage expenses incurred by the tax collector and the sheriff in foreclosing
under this section.
(4) In any advertisement or posted notice of sale under execution, the sheriff may
(and at the request of the governing body shall) combine the advertisements
or notices for properties to be sold under executions against the properties of
different taxpayers in favor of the same taxing unit or group of units; however,
the property included in each judgment shall be separately described and the
name of the taxpayer specified in connection with each property.
The purchaser at the execution sale acquires title to the property in fee simple free and clear
of all claims, rights, interests, and liens except the liens of other taxes or special assessments not
paid from the purchase price and not included in the judgment judgment, liens arising from
C-PACE assessments authorized under Article 10B of Chapter 160A of the General Statutes, and
conservation agreements, as defined in G.S. 121-35(1)."
SECTION 3. G.S. 105-374(k) reads as rewritten:
"(k) Judgment of Sale. – Any judgment in favor of the plaintiff or any defendant taxing
unit in an action brought under this section shall order the sale of the real property or as much as
may be necessary for the satisfaction of all of the following:
(1) Taxes adjudged to be liens in favor of the plaintiff, other than taxes the amount
of which has not been definitely determined, together with penalties, interest,
and costs.
(2) Taxes adjudged to be liens in favor of other taxing units, other than taxes the
amount of which has not yet been definitely determined, if those taxes have
been alleged in answers filed by the other taxing units, together with penalties,
interest, and costs.
The judgment shall appoint a commissioner to conduct the sale and shall order that the property
be sold in fee simple, free and clear of all interests, rights, claims, and liens whatever, except that
the sale shall be subject to (i) taxes the amount of which cannot be definitely determined at the
time of the judgment, (ii) taxes and special assessments of taxing units which are not parties to
the action, (iii) (iii) C-PACE assessments authorized under Article 10B of Chapter 160A of the
General Statutes, (iv) in the discretion of the court, taxes alleged in other tax foreclosure actions
or proceedings pending against the same real property, and (iv) (v) conservation agreements, as
defined in G.S. 121-35(1).
In all cases in which no answer is filed within the time allowed by law, and in cases in which
answers filed do not seek to prevent sale of the property, the clerk of the superior court may enter
the judgment, subject to appeal as provided in G.S. 1-301.1."
SECTION 3.1. G.S. 105-376(b) reads as rewritten:
"(b) Payment of Purchase Price by Taxing Units; Status of Property Purchased by Taxing
Units. – Any taxing unit that becomes the purchaser at a tax foreclosure sale may, in the discretion
of its governing body, pay only that part of the purchase price that would not be distributed to it
and other taxing units on account of taxes, penalties, interest, and such costs as accrued prior to
the initiation of the foreclosure action under G.S. 105-374 or docketing of a judgment under
G.S. 105-375. Thereafter, in such a case, the purchasing taxing unit shall hold the property for
11
Page 8 Session Law 2024-44 Senate Bill 802
the benefit of all taxing units that have an interest in the property as defined in this subsection
(b). All net income from real property so acquired and the proceeds thereof, when resold, shall
be first used to reimburse the purchasing unit for disbursements actually made by it in connection
with the foreclosure action and the purchase of the property, and any balance remaining shall be
distributed to the taxing units having an interest therein in proportion to their interests. The total
interest of each taxing unit, including the purchasing unit, shall be determined by adding:
(1) The taxes of the unit, with penalties, interest, and costs (other than costs
already reimbursed to the purchasing unit) to satisfy which the property was
ordered sold;
(2) Other taxes of the unit, with penalties, interest, and costs which would have
been paid in full from the purchase price had the purchase price been paid in
full;
(3) Taxes of the unit, with penalties, interest, and costs to which the foreclosure
sale was made subject; and
(4) The principal amount of all taxes which became liens on the property after
purchase at the foreclosure sale or which would have become liens thereon
but for the purchase, but no amount shall be included for taxes for years in
which (on the day as of which property was to be listed for taxation) the
property was being used by the purchasing unit for a public purpose.
If the amount of net income and proceeds of resale distributable exceeds the total interests of all
taxing units defined in this subsection (b), the remainder shall be applied to any special benefit
assessments to satisfy which the sale was ordered or to which the sale was made subject, and any
balance remaining shall accrue to the purchasing unit.
When any real property that has been purchased as provided in this section is permanently
dedicated to use for a public purpose, the purchasing unit shall make settlement with other taxing
units having an interest in the property (as defined in this subsection) in such manner and in such
amount as may be agreed upon by the governing bodies; and if no agreement can be reached, the
amount to be paid shall be determined by a resident judge of the superior court in the district in
which the property is situated.
Nothing in this section shall be construed as requiring the purchasing unit to secure the
approval of other interested taxing units before reselling the property or as requiring the
purchasing unit to pay other interested taxing units in full if the net income and resale price are
insufficient to make such payments.
Any taxing unit purchasing property at a foreclosure sale may, in the discretion of its
governing body, instead of following the foregoing provisions of this section, make full payment
of the purchase price, and thereafter it shall hold the property as sole owner in the same manner
as it holds other real property, subject only to taxes and special assessments, with penalties,
interest, and costs, and liens arising from C-PACE assessments under Article 10B of Chapter
160A of the General Statutes, to which the sale was made subject."
SECTION 4. G.S. 143-128.2(g) reads as rewritten:
"(g) As used in this section:
(1) The term "minority business" means either of the following:
…
b. An Employee Stock Ownership Plan company in which at least
fifty-one percent (51%) of the stock is owned by one or more plan
participants are minority persons or socially and economically
disadvantaged individuals.
…."
SECTION 5. G.S. 143-128.4(a) reads as rewritten:
"(a) As used in this Chapter, the term "historically underutilized business" means either of
the following:
12
Senate Bill 802 Session Law 2024-44 Page 9
…
(2) An Employee Stock Ownership Plan company in which at least fifty-one
percent (51%) of the stock is owned by one or more persons who plan
participants are members of at least one of the groups set forth in subsection
(b) of this section. An ESOP company applying for certification as a
historically underutilized business shall provide an attestation that it meets the
requirements of this subdivision together with such documentation supporting
the attestation as may be required by the Secretary."
MODERNIZE WASTEWATER PERMITTING TO SUPPORT ENVIRONMENTALLY
SOUND ECONOMIC DEVELOPMENT
SECTION 5.1.(a) The General Assembly finds all of the following:
(1) Residents of the State should be assured enjoyment of, and access to, proven
and reasonable methods of treating and disposing of wastewater that embrace
new technologies.
(2) As the State continues to grow and attract businesses, it is critical that
wastewater treatment and disposal facilities are provided for those businesses;
and adequate and affordable housing that is proximate to those businesses
must be available to assure the success of those businesses.
(3) Residents of the State should be assured treatment in an equitable manner to
their counterparts within other states comprising the United States
Environmental Protection Agency's (USEPA) Region 4 where permits are
authorized and issued for the discharge of treated wastewater from
municipalities, businesses, and developments to, for example, receiving
waters "in which natural flow is intermittent, or under certain circumstances
non-existent" (Alabama Admin. Code r. 335-6-10-.09).
(4) The discharge of treated wastewater to low flow or zero flow receiving waters
is of low risk to the environment, protects and improves water quality, and
provides the most prudent use of ratepayer funds.
(5) For all these reasons, it is necessary to establish methodologies and rules for
the discharge of treated domestic wastewaters with low risk following site
specific criteria to surface waters of the State, including wetlands, perennial
streams, and unnamed tributaries of named and classified streams and
intermittent streams or drainage courses where the 7Q10 flow or 30Q2 flow
of the receiving waters is estimated to be low flow or zero flow, as determined
by the United States Geological Survey (USGS).
(6) This act preserves and maintains the authority of the Department of
Environmental Quality (Department) for appropriate review, including
opportunities for public comment, and requires the Department and the
Environmental Management Commission (Commission) to seek necessary
approvals from USEPA to adopt temporary and permanent rules to authorize
discharges of wastewater to such receiving waters.
SECTION 5.1.(b) G.S. 143-215.1(c8) is repealed.
SECTION 5.1.(c) Section 12.9 of S.L. 2023-134 is repealed.
SECTION 5.1.(d) No later than August 1, 2024, the Department of Environmental
Quality (Department) and the Environmental Management Commission (Commission) shall
develop and submit to the United States Environmental Protection Agency for USEPA's approval
draft rules that establish methodologies and permitting requirements for the discharge of treated
domestic wastewaters with low risk following site-specific criteria to surface waters of the State,
including wetlands, perennial streams, and unnamed tributaries of named and classified streams
and intermittent streams or drainage courses where the 7Q10 flow or 30Q2 flow of the receiving
13
Page 10 Session Law 2024-44 Senate Bill 802
water is estimated to be low flow or zero flow, or under certain conditions non-existent, as
determined by the United States Geological Survey (USGS). Within 20 days of the date USEPA
approves the draft rules submitted pursuant to this subsection, the Commission shall initiate the
process for temporary and permanent rules pursuant to Chapter 150B of the General Statutes.
The draft rules submitted to USEPA for approval shall include all of the following:
(1) Defined terms. –
a. "Treated domestic wastewater" shall mean sewage and wastewater
comprised of waste and wastewater from household, commercial or
light industrial operations (e.g., homes, restaurants, car washes,
laundromats servicing only domestic laundry) excluding any industrial
process wastewater regulated by USEPA under the Categorical
Pretreatment Standards.
b. "Low-risk discharges" means discharges of 2 million gallons per day
or less of treated domestic wastewater when the dissolved oxygen
content (DO) of the effluent is significantly higher (1.5 mg/l or greater)
than the DO of the receiving water during low flow periods and the
biological oxygen demand content (BOD) of the effluent is
significantly lower (1.5 mg/l or more) than the DO of the effluent.
c. "Sag" means a reduction in the existing DO in the background surface
receiving water to which treated wastewater will be discharged. Sag is
typically related to nutrient elements within treated wastewater, which
may promote the growth of oxygen-consuming micro-organisms,
increasing the BOD, which at elevated levels may reduce DO in the
background surface water body.
(2) Criteria for permitting. –
a. Applicants shall be required to demonstrate, through an analysis
comparing the limits of the NPDES permit to the characteristics of the
receiving water, that a proposed discharge meets criteria for a low-risk
discharge as defined in this subsection. When a discharge is
determined to be low-risk, the applicant shall demonstrate using
simple modeling of the applicant's choosing, provided that the model
chosen is utilized elsewhere in USEPA Region 4, such as the
Streeter-Phelps model used in the State of Alabama, to show that the
Sag, if any, in the DO of the receiving water will not exceed 0.1mg/l.
b. Discharges to low flow or zero flow receiving waters shall be subject
to the following conditions:
1. The receiving waters fall within any of the following
categories:
I. The 7Q10 or 32Q2 flow statistics are estimated to be
zero by the USGS.
II. The drainage area of the discharge point is less than 5
square miles as specified by the USGS on-line tools or
other methodology that meets the standard of care for
such work.
III. The 7Q10 flow is estimated to be less than 1 cubic foot
per second by the USGS.
2. The proposed flow for any wastewater discharge shall be the
lesser of the following:
I. No more than one-tenth of the flow generated by the
one-year, 24-hour storm event given the drainage area
and calculated using the rational method. The rational
14
Senate Bill 802 Session Law 2024-44 Page 11
method shall be used to calculate the peak runoff for
the one-year, 24-hour precipitation event in cubic feet
per second. The peak runoff shall then be divided by 10
and multiplied by 646,272 to convert the result to
gallons per day of allowable discharge at the point
studied.
II. Two million gallons per day.
3. All discharges shall be directed to buffer systems that utilize
low-energy methodologies to function as a buffer between the
discharge and the receiving waters. Buffer systems shall
consist of one of the following:
I. High-rate infiltration basins that may include
engineered materials to achieve high rates of
infiltration, which engineered materials shall have an
ASTM gradation of a fine to coarse grain sand, and
angular to maintain structural integrity of the slope.
II. Constructed free-surface wetlands having a hydraulic
residence time of 14 days.
III. Other suitable technologies that provide a physical or
hydraulic residence time buffer, or both, between the
discharge and the receiving waters.
4. Discharge to areas that are 50 feet upland of the receiving
waters or wetlands at a non-erosive velocity equal to or less
than 2 feet per second through an appropriately designed
energy dissipater, or other applicable designs, that meet the
standard of practice for professional engineers for such
devices.
5. Utilize more than one outfall to the receiving stream so that no
one outfall exceeds 1 cubic foot per second based on the
average daily flow of the discharge. Discharges from buffer
systems shall be allowed to be placed at increments along a
stream or receiving waters at no less than 50 linear feet.
6. No discharge shall be permitted to classified shellfish waters
(SA), tidal waters (SC), water supply waters (WS), or
outstanding resource waters (ORW). Discharges to unnamed
tributaries of classified shellfish waters, however, shall be
authorized in compliance with requirements of this section and
only when a low-risk situation is present. Discharges to
nutrient sensitive waters (NSW) may require additional
modeling and allocation of flow and will be at the discretion of
the Department.
7. The following effluent limits shall generally apply except
where (i) the applicant and Department agree to more stringent
limits or (ii) complex modeling conducted pursuant to
sub-sub-subdivision 8. of this sub-subdivision demonstrates
that Sag in the DO content of the receiving water of 0.1 mg/l
or less will occur and water quality standards are protected:
I. Biological oxygen demand (BOD5) shall not exceed 5.0
mg/l monthly average.
II. NH3, 0.5 mg/l monthly average, 1.0 mg/l daily
maximum.
15
Page 12 Session Law 2024-44 Senate Bill 802
III. Total nitrogen shall not exceed 4.0 mg/l monthly
average.
IV. Total phosphorus, 1.0 mg/l monthly average, 2.0 mg/l
daily maximum.
V. Fecal coliforms, 14 colonies/100ml or less.
VI Dissolved oxygen, 7.0 mg/l or greater.
VII. Total suspended solids, 5.0 mg/l monthly average,
8mg/l daily maximum.
VIII. Nitrate, 1.0 mg/l monthly average, 2.0 mg/l daily
maximum.
8. If an applicant proposes less stringent effluent limits than those
set forth in sub-sub-subdivision 7. of this sub-subdivision, the
applicant shall conduct more complex modeling using any
model accepted elsewhere in USEPA Region 4 that the
applicant elects to use to confirm that a Sag in the DO content
of the receiving water of 0.1 mg/l or less will occur and water
quality standards are protected.
9. The Department shall not require an applicant to obtain
mapping data from the USGS as part of an application. In lieu,
an engineer of record licensed in the State of North Carolina
may prepare required mapping utilizing either USGS maps or
other maps approved by the Department.
10. Within 30 days of the filing of an application for a wastewater
discharge subject to this section, the Department shall (i)
determine whether or not the application is complete and notify
the applicant accordingly and (ii) if the Department determines
an application is incomplete, specify all such deficiencies in
the notice to the applicant. The applicant may file an amended
application or supplemental information to cure the
deficiencies identified by the Department for the Department's
review. If the Department fails to issue a notice as to whether
or not the application is complete within the requisite 30-day
period, the application shall be deemed complete. Within 180
days of the filing of a completed application, the Commission
shall either grant or deny the permit. If the Commission fails
to act in the requisite time frame, ten percent (10%) of the
application fee shall be returned to the applicant for each
working day beyond the 180-day period.
SECTION 5.1.(e) No later than September 1, 2024, the Department in conjunction
with the North Carolina Collaboratory at the University of North Carolina at Chapel Hill
(Collaboratory) shall convene a Wastewater General Permit Working Group (Working Group)
consisting of Department and Collaboratory staff and a maximum of five consulting experts
appointed by the Director of the Collaboratory in the fields of environmental regulation,
wastewater regulation, water quality regulation, and wastewater treatment regulation, to develop
the draft rules for the implementation of a Wastewater Treatment and Discharge General Permit
process for the State. The Working Group shall report its findings to the Environmental Review
Commission no later than March 15, 2025. Following consideration by the Environmental
Review Commission, and after making any changes required by the Environmental Review
Commission, the Department shall develop and submit proposed rules to USEPA for its approval.
Within 20 days of the date USEPA approves the draft rules submitted pursuant to this subsection,
16
Senate Bill 802 Session Law 2024-44 Page 13
the Commission shall initiate the process for temporary and permanent rules pursuant to Chapter
150B of the General Statutes.
SECTION 5.1.(f) Beginning September 1, 2024, and quarterly thereafter until such
times as permanent rules as required by subsections (d) and (e) of this section have become
effective, the Department and the Environmental Management Commission shall report on their
activities to implement subsections (d) and (e) of this section to the Environmental Review
Commission, the Joint Legislative Oversight Committee on Agriculture and Natural and
Economic Resources, the Senate Appropriations Committee on Agriculture, Natural and
Economic Resources, and the House of Representatives Appropriations Committee on
Agriculture and Natural and Economic Resources of the General Assembly.
SECTION 5.1.(g) This section is effective when it becomes law.
SECTION 6. This act becomes effective July 1, 2024.
In the General Assembly read three times and ratified this the 28th day of June, 2024.
s/ Phil Berger
President Pro Tempore of the Senate
s/ Tim Moore
Speaker of the House of Representatives
s/ Roy Cooper
Governor
Approved 5:10 p.m. this 8th day of July, 2024
17
January 2025
NORTH CAROLINA
C-PACE PROGRAM GUIDELINES
AND TOOLKIT
Administered by:
The Economic Development Partnership of North Carolina (EDPNC)
Sponsored and Approved by:
The North Carolina Department of Commerce
18
1
Table of Contents
I. Introduction to C-PACE 2
II. Benefits of C-PACE 3
III. C-PACE Program Guidelines 4
1. Program Participation 4
2. Program Administration 4
3. Program Fees 5
4. Government Has No Liability or Financial Responsibility 5
5. Project Eligibility 5
6. Application and Closing Process 8
7. Billing, Collection, and Enforcement 10
8. Consent from Mortgage and Lien Holder(s) Required 10
IV. C-PACE Toolkit Exhibits (attached) 11
A. Resolution of Intent Template
B. Resolution to Join C-PACE Program Template
C. Resolution Concurring in Municipality Joining C-PACE Program Template
D. Certificate of Qualifying Improvements
E. Checklist and Property Owner Certification
F. Form of Lienholder Consent
G. Form of Assessment Agreement
H. Form of Notice of C-PACE Assessment and Lien
I. Form of Assignment of C-PACE Lien and Assessment Agreement
19
2
I. Introduction to C-PACE
In 2024, the North Carolina State legislature passed SB 802, with the following purpose:
“The use of a C-PACE Program creates an additional financing mechanism for property owners to
use private funds to finance improvements to their eligible property, thereby driving economic
development by creating a diversity of jobs in the resilience and clean energy se ctors of the
economy. The assessment requires minimal upfront costs and provides a more accessible financial
mechanism to fund improvements that will increase the tax value of the affected properties at
minimal administrative cost to local governments. C-PACE improvements allow property owners to
save on their utility bills because the improvements lead to energy or utility savings and will result
in improved indoor air quality or increased resilience, which will increase the ability of communities
and local governments to respond to natural disasters and improve public health.”
Under North Carolina General Statutes §160A-239.11 et seq. (the "C-PACE Act"), The Economic
Development Partnership of North Carolina (EDPNC) is designated to administer a Commercial
Property Assessed Capital Expenditure (C-PACE) Program. This Program allows owners of
qualifying commercial property to obtain long-term financing from private capital providers for
certain qualifying improvements up to 35% of the value of the property. Qualifying Improvements
include energy efficiency, renewable energy, resiliency, and water conservation as well as
improvements made to address safe drinking water. Similar C-PACE programs are active in over
36 states and have attracted more than $7 billion in private investment for thousands of properties.
Counties and cities in North Carolina may participate in the statewide C-PACE Program to support
commercial, industrial, agricultural, and multifamily property owners with access to financing for
efficient and resilient building improvements (N.C.G.S. §160A-239.15). Joining the statewide
program does not expose a local government to any financial or legal liability (N.C.G.S. §160A-
239.16 (a)). Private capital providers and the statewide administrator, EDPNC, will assist
interested commercial property owners to apply for C-PACE financing. Local governments that
join the C-PACE Program will be reimbursed for actual and reasonable costs associated with
executing documents related to C-PACE assessments (N.C.G.S. §160A-239.15a(5)). To cover
these costs, EDPNC will collect a $500 administration fee for approved C-PACE projects at time
of closing. Except for executing documents necessary for a C-PACE financing, there is no other
administrative involvement by the local government. Joining the C-PACE Program is a voluntary
3-step process, with support of EDPNC:
1) Adopt a Resolution of Intent
2) Hold a public hearing
3) Adopt a final Resolution to join the C-PACE Program
A C-PACE assessment is secured by a voluntary senior lien on the property imposed by the local
government at the property owner’s request and is paid back over time. The security of the C-
PACE lien enables capital providers to offer C-PACE financing which spreads the cost of
qualifying improvements over the useful life of the measures, a term generally lasting between
20-30 years.
C-PACE liens are junior in priority to all taxes and other governmental liens. Like other
assessments, C-PACE financing is non-accelerating, which means only current or past due
payments can be collected. In the event of default, only the payments in arrears are due. If the
property is sold, the C-PACE repayment obligation transfers automatically to the next owner
unless it is fully repaid. No change in the Program or in North Carolina’s C-PACE legislation will
affect a property owner’s eligibility or obligation to pay C-PACE assessments incurred. Local
governments are not responsible for collection; duties for billing and collection will be delegated
to and handled privately by the capital provider for the project financed (§160A-239.16 (b)).
20
3
II. Benefits of C-PACE
For Local Governments: C-PACE is an economic development tool. By making it more
affordable for building owners to make major improvements to their buildings, local building stock
is enhanced, which drives job creation. Energy and resiliency upgrades retain and attract new
businesses by lowering utility costs, and in turn these upgrades generate higher property tax
payments for local governments. C-PACE can also support local governments in their efforts to
achieve energy and emissions reduction goals. The C-PACE program is structured to be cost-
neutral for local governments and requires little-to-no administrative resources.
For Property Owners and Developers: One of the biggest barriers to converting potential
projects to completed projects for efficiency and resiliency upgrades are the up-front costs. C-
PACE financing typically requires little up-front investment, and qualifying improvements have a
direct impact on property value. Energy and water efficiency measures also lower operating costs.
C-PACE financing has the following additional benefits:
● Up to 100%, long-term financing. Many owners lack the capital to complete efficiency and
resiliency improvements. All direct and indirect hard and soft costs incidental to the
qualifying improvements can be included in C-PACE financing applications and are
described on p.8.
● Transferrable upon sale. Some owners may need to sell their property before the C-PACE
financing is fully repaid. The C-PACE lien and assessment are attached to the property
and transfers to the new owner unless the prior owner pays off the assessment.
● Increased cash flow. C-PACE financing may be repaid over the useful life of the
improvements, generally between 20-30 years. This is longer than other traditional
commercial loans and therefore reduces the installment payments, having a positive effect
on cash flow.
For Existing Mortgage Holders: C-PACE improvements can enhance property value and
typically improve a building’s longevity, thereby reducing the risk of property value decline over
time. In addition, by reducing utility expenses, C-PACE financing increases property owners’ net
operating income, improving the stability of their business. C-PACE assessments are non-
accelerating, meaning only current or past due annual payments can be collected each year while
future payments stay with the property. As such, existing lienholders see their collateral improved
without substantial increase in credit risk and with minimal impact on lien priority. C-PACE
financing is not permitted without the consent of all existing mortgage holders and, under certain
circumstances, the holders of certain other obligations encumbering commercial property.
For Energy Auditors, Architects, Building Engineers, and Contractors: When property
owners can access financing for longer terms than are typically available, substantial efficiency
and resiliency improvements become more affordable. Energy auditors, architects, engineers,
and contractors can suggest C-PACE financing as a way for their clients to implement needed
energy or resiliency upgrades that might otherwise be unaffordable. Since the demand for building
efficiency and resiliency improvements will increase in a C-PACE-enabled jurisdiction, C-PACE
is a powerful business growth catalyst for building professionals like energy auditors and
contractors.
21
4
III. C-PACE Program Guidelines
These Program Guidelines are established as part of the C-PACE Toolkit, which includes
information of the C-PACE Program, approval criteria, and forms necessary for property owners
to obtain C-PACE financing.
1. Program Participation
Counties and cities may join the voluntary, statewide C-PACE Program by taking the following
actions (N.C.G.S. §160A-239.15). Forms of Resolution of Intent Template (Exhibit A) and form of
Resolution to Participate in the North Carolina C-PACE Program Template (Exhibit B) are
provided by EDPNC.
🡺 Adopt a Resolution of Intent that includes:
(1) Authorization for the C-PACE Program to operate within its jurisdictional boundaries and
for EDPNC to provide administrative services
(2) A statement that the local government intends to:
(I) authorize C-PACE financing
(ii) authorize the imposition of C-PACE assessments on qualifying commercial properties
benefitting from qualifying improvements to secure repayment of C-PACE financing
(iii) assign the C-PACE lien to the capital provider providing C-PACE financing
(iv) delegate billing, collection, and enforcement duties for the C-PACE assessment and
C-PACE lien to capital providers
(3) A statement that the amount of a C-PACE financing and related assessment repayment
terms shall be pursuant to the related financing agreement
(4) A statement identifying the local government department or employee that shall, upon
receipt of an approved project application for C-PACE financing within its jurisdictional
boundaries from the statewide administrator, execute documents related to the C-PACE
assessment on behalf of the local government
(5) A statement that the local government shall be reimbursed by the statewide administrator
for the actual and reasonable costs associated with the performance of the duties described
in (4)
(6) A statement of the time and place for a public hearing on the proposed program
🡺 Conduct a public hearing on the proposed C-PACE Program
🡺 Adopt a Resolution to join the C-PACE Program after conducting a public hearing
o If a city wishes to participate in the C-PACE Program, the Resolution shall be effective
only with the concurrence of the governing body of the respective county (Template
Form provided in Exhibit C)
2. Program Administration
The Economic Development Partnership of North Carolina (EDPNC) is the statewide
administrator of the North Carolina C-PACE Program, with support from the program sponsor,
The North Carolina Department of Commerce. EDPNC will review Project Applications to confirm
that they meet requirements of statute. After approving a Project Application, EDPNC will
coordinate with the related participating local government for execution of the Assessment
Agreement (Exhibit G), Notice of C-PACE Assessment and Lien (Exhibit H), and Assignment of
C-PACE Lien and Assessment Agreement (Exhibit I). The Assessment and Notice may be
recorded by either EDPNC or the property owner and capital provider in the local government’s
county register of deeds. Annual reports regarding the C-PACE Program will be submitted by
EDPNC to the North Carolina Department of Commerce annually.
22
5
EDPNC will:
● Accept C-PACE Project Applications from property owners and capital providers, with
application fee
● Review Project Applications to determine compliance with the C-PACE Act
● Communicate to applicants the approval, conditional approval, or disapproval or their
Project Application
● If a Project Application is approved, submit relevant closing documents to the local
government for execution
● Record the Assessment Agreement and Notice of Assignment of C-PACE Lien, or
delegate recording to the property owner and their capital provider
● Collect a processing fee and administration fee at closing of the C-PACE financing
● Submit an annual report to the North Carolina Department of Commerce
3. Program Fees
To offset the actual and reasonable costs of administering the C-PACE Program, as required by
the C-PACE Act, EDPNC will collect a $750 application fee with each Project Application. For
each approved Project Application, EDPNC will collect at closing of the C-PACE financing:
1. A processing fee equal to 1% of the total amount financed, not to exceed $25,000
(N.C.G.S. §160A-239.14(2b)).
2. A $500 administration fee to reimburse local governments for costs associated with their
duties under the C-PACE Act (N.C.G.S. §160A-239.15a(5)).
These fees will be included in the C-PACE assessment and financing, to be paid by the property
owner.
4. Government Has No Liability or Financial Responsibility
Neither the State nor any participating local government, its officers, or employees shall be
personally liable for any actions taken pursuant to the C-PACE Act. Per the Act, the State nor any
local government may use public funds to finance or repay C-PACE assessments, and all
financing is obtained by commercial property owners from private-sector capital providers,
including costs for program administration. A local government shall not be financially or legally
liable or responsible for any assessment and lien imposed within its jurisdiction under the
program. Neither the State nor any local government shall use public funds to fund or repay any
C-PACE assessment. A local government shall not pledge, offer, or encumber its full faith and
credit for any lien amount through a C-PACE Program.
5. Project Eligibility
This section outlines the roles and responsibilities of a C-PACE transaction and includes
descriptions of project and participant eligibility requirements:
Capital providers may be any private entity, including its designee, successor, and assigns, that
makes or funds C-PACE financing, including refinancing. Capital providers may submit their
information to EDPNC to be listed as a prospective lender for C-PACE projects on the program
website.
Property owner means the holder of title in fee simple to qualifying commercial property. The title
to the qualifying commercial property may not be in dispute. The property owner must be current
on all mortgage and property tax payments and cannot be insolvent or in bankruptcy proceedings.
These requirements will be verified using the Checklist and Property Owner Certification (Exhibit
E)
23
6
Property owners may receive funding for their qualifying improvements only from capital providers
pursuant to a Financing Agreement negotiated between the property owner and capital provider.
Neither the statewide administrator, the local government, nor program sponsor are party to this
agreement. In the Financing Agreement, the property owner agrees to repay a capital provider
for the C-PACE financing provided, including, but not limited to, any finance charges, fees, debt
servicing, accrual of interest and penalties, and any terms relating to the treatment of prepayment
and partial payment, and the billing, collection, and enforcement of the C-PACE financing. The
financing agreement between the capital provider and the property owner shall be negotiated by
the parties, including all terms and conditions of repayment, including interest, penalties, and
prepayment.
Property owners are authorized to obtain C-PACE financing to:
(1) Directly purchase the related equipment and materials for the installation or modification
of a qualifying improvement.
(2) Contract directly, including through lease, power purchase agreement, or other service
contract, for the related equipment and materials used in the installation or modification of
a qualifying improvement.
Qualifying commercial property means any privately-owned commercial, industrial, agricultural,
or multi-family real property with five (5) or more dwelling units. This includes properties owned
by nonprofit, charitable, or religious organizations. C-PACE financing may be provided to
qualifying commercial properties for:
o The acquisition, construction (including new construction), adaptive reuse, lease,
installation, or modification of qualifying improvements
o The refinancing of existing properties or new construction that have had qualifying
improvements installed for no more than three (3) years prior to the date of Project
Application. Exceptions will be approved by EDPNC on a case-by-case basis.
Qualifying improvements mean permanently affixed improvements on qualifying commercial
property as part of construction or renovation, including one or more of the following:
● Energy efficiency measure - equipment, component, or program change that reduces
energy use and that meets or exceeds then-existing State and Federal building codes and
efficiency standards or conservation codes. This includes, but is not limited to, energy
produced from a combined heat and power system that uses nonrenewable energy
resources. Examples of eligible measures may also include, but are not limited to: air
sealing; installation of insulation; installation of energy-efficient heating, cooling, or
ventilation systems; building modification to increase the use of daylight; window
replacement; windows; energy controls or energy recovery systems; installation of electric
vehicle charging equipment; installation of efficient lighting equipment; installations
necessary for electrical connectivity; construction materials that use less carbon or have
fewer emissions than comparable materials designed to serve the same purpose; or any
other improvements necessary to achieve a sustainable building rating or compliance with
a national model green building code.
● Resiliency measure - equipment, component, or program change including, but not limited
to, storm retrofits, flood mitigation, stormwater management (including but not limited to
green and gray infrastructure), wind resistance, indoor air quality improvement, electric
vehicle charging station, backup energy generators enrolled in an electric public utility
24
7
demand response program, energy storage, and microgrids and other resilience projects
as approved by the program administrator or sponsor. Examples of eligible measures may
also include, but are not limited to: repairing, replacing, improving, or construct ing a roof,
including improvements that strengthen the roof deck attachment; creating a secondary
water barrier to prevent water intrusion; installing wind-resistant shingles or gable-end
bracing; and reinforcing roof-to-wall connections.
● Renewable energy measure - equipment, component, or program change that utilizes a
renewable energy resource. Applicable renewable resources include: solar electric, solar
thermal, wind, hydropower, geothermal, or ocean current or wave energy; biomass
including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible
residues, combustible liquids, combustible gases, energy crops, or landfill methane; waste
heat derived from a renewable energy resource and used to produce electricity or useful,
measurable thermal energy at a retail electric customer's facility; or hydrogen derived from
a renewable energy resource. Renewable energy resources do not include peat, a fossil
fuel, or nuclear energy resource.
● Water conservation measure - equipment, component, or program change to decrease
water consumption or demand, either indoor or outdoor. This also includes measures to
address safe drinking water.
On the Certificate of Qualifying Improvements, a licensed engineer or authorized representative
of a licensed engineering firm will certify that qualifying improvements meet the following
requirements on the form of Certificate of Qualifying Improvements (Exhibit D).
● All Buildings: Certification that all available electric public utility energy efficiency and
demand response programs available to property owners, and any of their tenants, have
been evaluated.
● Improvements to Existing Buildings:
1. For renewable energy, energy efficiency, or water conservation measures, an energy
analysis stating that the proposed qualifying improvements will result in:
a. more efficient use or conservation of energy that meets or exceeds then-
existing State and federal building codes and efficiency standards or
conservation codes
b. more efficient use or conservation of water
c. the reduction of greenhouse gas emissions
d. the addition of renewable sources of energy or water
2. For resilience measures, certification that the qualifying improvements will result in
improved resilience.
● New Construction: certification that the proposed qualifying improvements will allow the
project to exceed the energy or water efficiency requirements of the current State building
code (or an equivalent standard), or in the case of a resiliency measure, achieve
compliance with a national model resiliency standard (or equivalent standard).
o At time of publication of these guidelines, national standards for resiliency are led
by the U.S. Green Building Council. EDPNC will consider improvements that
could apply for least 1 point on the LEED Climate Resilience Screening Tool as
eligible. Certification by LEED for Cities, SITES, and PEER will also qualify
25
8
related measures. More information can be found here:
https://www.usgbc.org/about/priorities/resilience.
o EDPNC or Department of Commerce will review measures that qualify under
other national models for resiliency standards on a case-by-case basis.
Financing for C-PACE assessments may include, but are not limited to:
o Hard costs: all costs related to direct installation and construction contracts, including
materials, labor, and overhead associated with the qualifying improvements. Costs
ancillary to the direct installation and construction contracts for improvements, such as
changes to interior walls or ceilings to accommodate new piping or ducting, remediation
of asbestos or mold, or other related costs, are also included.
o Soft costs: indirect costs that are not considered direct construction costs but are
necessary to complete the qualifying improvements. Examples include but are not
limited to:
o Project management
o Application and closing fees (e.g., program administrator fees)
o Title reports and credit checks
o Financial services (e.g., capital provider fee, project developer fee)
o Legal services (e.g., property owner legal, capital provider legal)
o Recording taxes and fees, and escrow disbursement fees
o Architectural and engineering costs related to the qualifying improvements
o Consulting reports (e.g., technical review, energy audit, commissioning reports,
measurement and verification, feasibility studies, financial projections, surveys)
o Due diligence reports (e.g., appraisal, environmental, physical condition
assessments)
o Inspection fees
o Energy savings performance guaranty or insurance
o Building accreditation(s)
o Permitting fees
o Interest reserves
o Capitalized interest, in an amount determined by the owner of the commercial
property and the capital provider
o Any other fees or costs incurred by the property owner incident to the installation,
modification, or improvement on a specific or pro rata basis, as determined by the
program administrator
The term of C-PACE financing, excluding any capitalized interest or interest only periods, may
not exceed the weighted average useful life of qualifying improvements and begins from first
repayment. Installments for repayment of the assessment do not need to be equal. The total C-
PACE financing amount shall not exceed 35% of the property’s expected stabilized value with the
proposed qualifying improvements installed (N.C.G.S. §160A-239.18(c)).
6. Application and Closing Process
The Program has adopted the following documents as part of the Project Application:
● Certificate of Qualifying Improvements (Exhibit D)
● Checklist and Property Owner Certification (Exhibit E)
● Form of Lienholder Consent (Exhibit F)
o If not available at time of application, Lienholder Consent may be delivered at close
and EDPNC will issue conditional approval if all other requirements are met.
26
9
The Program has adopted the following form documents which shall be part of the closing of any
C-PACE transaction. A property owner and capital provider may adapt the forms to the needs of
their particular transaction but must not modify or omit any material substantive terms contained
in the forms, unless as otherwise approved by EDPNC.
● Assessment Agreement (Exhibit G)
● Notice of C-PACE Assessment and Lien (Exhibit H)
● Assignment of C-PACE Lien and Assessment Agreement (Exhibit I)
After a local government has joined the North Carolina C-PACE Program, a property owner
begins the process of obtaining financing by connecting with a capital provider. The capital
provider will work with the property owner to collect several diligence items. Once all the items
have been received, reviewed, and approved by the capital provider, the parties will settle on the
assessment terms and begin the application and closing process. This process will generally take
the following steps:
(1) The capital provider works with the property owner to prepare the Project Application
documents including the Checklist and Property Owner Certification, Certificate of
Qualifying Improvements, and Lienholder Consent. Applicants should review the Checklist
and Property Owner Certification to ensure the types of information that the administrator
will rely upon to verify compliance with the C-PACE Act are present in the completed
Project Application.
(2) EDPNC will have 15 (fifteen) business days to review and approve the Project Application.
● If the Project Application is approved, the approval will be communicated in writing to
the applicant, capital provider, and local government. The Project Application may be
conditionally approved if Lienholder Consent is not yet available, but all other
requirements have been satisfied. Conditional approval will be treated the same as an
approval, with exceptions noted below. EDPNC’s application review process is
confined to confirming that the Project Application conforms to these guidelines.
Approval does not constitute endorsement of any representations that may be made
with regard to the operation and any savings associated with the Qualifying
Improvements.
● Incomplete Project Applications will be returned to the applicant with notice about
which items were not provided or are insufficient or inaccurate on their face.
(3) Upon receipt of approval, the capital provider will finalize drafts of the closing documents,
including the Assessment Agreement, Notice of C-PACE Assessment, and Assignment of
C-PACE Lien. At or before closing, the applicant’s designated and authorized official may
execute closing documents. If the Project Application received conditional approval, the
closing documents executed by EDPNC and the local government may not be released
from escrow unless and until all lender consents have been received and executed in
accordance with the C-PACE Act.
(4) At closing and upon execution by the local government, EDPNC or the capital provider will
record the Assessment Agreement, Notice of C-PACE Assessment, and the Assignment
of C-PACE Lien in the office of the register of deeds in the county in which the property is
located. Upon confirmation of recordation, the capital provider will disburse funds in
accordance with the Financing Agreement.
(5) Per the Assessment Agreement and in accordance with the Financing Agreement, the
property owner makes payments over the assessment term.
27
10
7. Billing, Collection, and Enforcement
Billing, collection and enforcement of C-PACE assessments and C-PACE liens will be the sole
responsibility of capital providers. Delinquent assessment payments shall incur interest and
penalties as specified in the Financing Agreement and shall be paid in accordance with the
amortization schedule. Capital providers will enforce delinquent assessment payments in the
same manner as foreclosure of a deed of trust. C-PACE assessment payments not yet billed or
due may not be accelerated or extinguished by foreclosure of the delinquent assessment payment
or payments.
Outstanding or delinquent State, local, or federal taxes or liens at the time of the foreclosure
proceeding will be satisfied first, but the C-PACE lien shall be superior to all other liens on the
property from the date on which the Notice of the C-PACE Assessment was recorded and until
the assessment, interest, penalties, and charges accrued or accruing are paid.
8. Consent from Mortgage and Lien Holder(s) Required
Before entering into an Assessment Agreement, the property owner must submit to the statewide
administrator, EDPNC, a written statement by each holder of a mortgage, deed of trust, or other
lien securing indebtedness on the property regarding their consent to placement of the C-PACE
Assessment. Each consenter must also attest that placement of the assessment does not
constitute an event of default under the terms of the mortgage, deed of trust, or other
indebtedness secured by the lien.
If lienholder consent is not available at time of Project Application, EDPNC may issue conditional
approval if all other requirements are met. In this case, lienholder consents are executed at
closing, the signatures of the local government will be held in escrow and will not be released until
the consents are obtained. Capital Providers may provide their own form of consent that conforms
to the C-PACE Act.
28
11
Exhibits Attached
A. Resolution of Intent Template
B. Resolution to Join C-PACE Program Template
C. Resolution Concurring in Municipality Joining C-PACE Program Template
D. Certificate of Qualifying Improvements
E. Checklist and Property Owner Certification
F. Form of Lienholder Consent
G. Form of Assessment Agreement
H. Form of Notice of C-PACE Assessment and Lien
I. Form of Assignment of C-PACE Lien and Assessment Agreement
29