COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY AND RESILIENCY (C-PACER) PROGRAM

Memphis Code of Ordinances tit. 9, ch. 9-108

in effect

Memphis Code of Ordinances § 9-108-1 Establishment.

Sec. 9-108-1. - Establishment. There is hereby established within the boundaries of Memphis, Tennessee (the "city") a Commercial Property Assessed Clean Energy and Resiliency ("C-PACER") program (the "program") in accordance with chapter Tenn. Code Ann. §§ 68-205-101 et seq. (the "C-PACER Act"). The city finds that it is convenient and advantageous to establish the program, at no net cost to the city, in order to finance qualified projects (as hereinafter defined), repaid by voluntary annual assessment installment payments on the property benefited by such qualified projects, and that the program is in the public interest, providing for the safety, health, and environmental public benefit, and provides for economic development of the community. The program shall allow financing for the full range of qualified improvements on all eligible properties, as authorized by the C-PACER Act, and shall abide by and operate according to the C-PACER Act. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-2 Definitions.

Sec. 9-108-2. - Definitions. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise: (1) Application checklist means the list of items in a program application required by the C-PACER Act, this chapter, the program guidebook, and the corresponding documentation that the city accepts in order to show the requirements of the C-PACER Act have been met; (2) Assessment means the voluntary agreement of a record owner pursuant to an assessment agreement to allow the city to require the payment of annual assessment installments on their property in an amount sufficient to re-pay C-PACER financing, together with interest, penalties, fees and charges related thereto; (3) Assessment agreement means an agreement between the city and a record owner whereby the city agrees to place an assessment to re-pay C-PACER financing and C-PACER lien on the property to secure the obligation to repay the financing; (4) Assessment installment means annual payments assessed against property to repay C-PACER financing; (5) Capital provider means a private third-party entity, including its designee, successor, and assigns that makes or funds C-PACER financing, including refinancing; (6) C-PACER financing means an investment from a capital provider to a record owner to finance or refinance a qualified project as described under this chapter. The proposed C-PACER financing for a qualified improvement may authorize the record owner to: a. Purchase directly the related equipment and materials for the installation or modification of a qualified improvement; and b. Contract directly, including through lease or other service contract, for the installation or modification of a qualified improvement; (7) C-PACER lien means the lien recorded at the Shelby County Register of Deeds on the eligible property to secure the C-PACER financing, which remains on the property until the C-PACER financing is paid in full; (8) Eligible property means (a) privately owned commercial, industrial, or agricultural real property, (b) privately owned residential real property consisting of five or more dwelling units, (c) property owned by nonprofit, charitable, or religious organizations, and (d) property owned by pseudo-governmental organizations such as industrial development corporations, housing authorities, or health educational and housing facility boards. Pawn shops, adult entertainment and product stores, liquor and tobacco stores, payday loan and title loan establishments, as well as other business types determined in the local government's sole discretion shall not be considered commercial property; (9) Fair market value means the as-appraised value, as determined by a state-certified appraiser, as if the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts; (10) financing agreement means the contract under which a record owner agrees to repay a capital provider through assessment installments for the C-PACER financing including, but not limited to, details of any finance charges, fees, debt servicing, accrual of interest and penalties, and any terms relating to treatment of prepayment and partial payment of the C-PACER financing; (11) Local government means the governing body, any department, or any office within the government for the City of Memphis; (12) Program means the C-PACER program established under this chapter; (13) Program administrator means the party designated by the local government to administer the C-PACER program. This party may be (1) a department or individual within the local government; (2) a quasi-governmental organization, such as an industrial development corporations, housing authorities, or health educational and housing facility boards; (3) a capital provider; or (4) another private and independent third party designated by the local government. (14) Program guidebook means documents that, collectively, are incorporated in exhibit A of this chapter, including the assessment agreement and the notice of assessment interest and C-PACER lien; (15) Program application means the application submitted to demonstrate that a proposed project qualifies for C-PACER financing and for a C-PACER lien; (16) Qualified improvement means a permanent improvement affixed to real property and intended to: (a) Decrease energy consumption or demand through the use of efficiency technologies, products, or activities that reduce or support the reduction of energy consumption, allow for the reduction in demand, or support the production of clean, renewable energy, including, but not limited to, a product, device, or interacting group of products or devices on the customer's side of the meter that generates electricity, provides thermal energy, or regulates temperature; (b) Increase resilience and support the production of clean, renewable energy, including through the use of a product, device, or interacting group of products or devices on the customer's side of the meter that generates electricity, provides thermal energy, or regulates temperature; (c) Decrease water consumption or demand and address safe drinking water through the use of efficiency technologies, products, or activities that reduce or support the reduction of water consumption; (d) Allow for the reduction or elimination of lead from water that may be used for drinking or cooking; (e) Increase water or waste water resilience, including through storm retrofits, flood mitigation, and stormwater management, or wind resistance, energy storage, microgrids, and other resilience projects approved by the local government; (f) Electrical vehicle charging infrastructure; (g) Conform to requirements of the most recent version of the International Energy Conservation Code adopted by the local government; or (h) Conform to seismic requirements of the most recent version of the International Building Code adopted by the local government. (17) Qualified project means a project approved by the program administrator, involving the installation or modification of a qualified improvement, including new construction or the adaptive reuse of eligible property with a qualified improvement, including qualified improvements installed no more than two years prior to the date of application. Together, qualified improvements, inclusive of all related and eligible costs pursuant to the C-PACER Act that are to be financed as described in a program application and approved by the program administrator, are a qualified project. If the program administrator is a capital provider, the local government must also approve the project for it be to be a qualified project. The minimum project size for a qualified project is one that costs $1,000,000.00; and (18) Record owner means the owner or owners on title, duly recorded, of a commercial property, the owner listed on the property's legal documents on file or the owner of an estate for years created pursuant to a written ground lease agreement or similar agreement. The record owner requesting to participate in the program must certify (1) the record owner is the legal owner o the eligible property; (2) the record owner is current on mortgage and property tax payments; (3) the record owner is not insolvent or in bankruptcy proceedings; and (4) the title of the eligible property is not in dispute. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-3 Territory.

Sec. 9-108-3. - Territory. The program shall be available to all eligible property within the boundaries of the region, in accordance with the C-PACER Act. The region is the areas of the city as shown in the map attached to this chapter. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-4 Program administration.

Sec. 9-108-4. - Program administration. 1. Pursuant to the C-PACER Act, the local government designates the economic development growth engine industrial development board of the City of Memphis and the County of Shelby, Tennessee ("EDGE") as the program administrator. If EDGE is no longer the program administrator for any reason, then the local government will either assume the role of public administrator or designate a new third-party entity to serve as public administrator. The program administrator shall review and approve the program applications submitted in accordance with the program guidebook, collect any fees, execute the documents required by the program guidebook to enable C-PACER financing, and record the documents requested by the record owner and capital provider. 2. The program administrator is authorized to impose fees to offset the actual and reasonable costs of administering the program. The fees may be assessed as part of the program application, to be paid by the record owner requesting to participate in the program. Service fees of approved applications must be calculated as one percent of the total amount financed, not to exceed $50,000.00. Service fees retained by a capital provider acting as the designated program administrator must be placed into a reserve account and utilized for costs related to the billing, collection, and enforcement of the special assessment and lien. If the local government does not select a capital provider as its designated program administrator, then the funds must be placed into an account designated by the program administrator. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-5 C-PACER financing.

Sec. 9-108-5. - C-PACER financing. 1. C-PACER financing, under the C-PACER Act, is to be provided by capital providers through a financing agreement entered into with the owner of an eligible property to fund a qualified project. 2. The C-PACER financing may include: a. The cost of the qualified improvement plus the costs of materials and labor necessary for the installation or modification of a qualified improvement; b. Permit fees; c. Inspection fees; d. Financing or origination fees; e. Program application and administrative fees; f. Project development and engineering fees; g. Third-party review fees, including verification review fees; h. Capitalized interest, in an amount determined by the record owner and the capital provider for a period of years to be determined by the record owner and capital provider; i. Interest reserves; and j. Any other fees or costs that may be incurred by the incident to the installation, modification, or improvement of a qualified improvement on a specific or pro rata basis, as determined by the local government. 3. The interest rates imposed upon the assessment are subject to the usury laws of the State of Tennessee and shall not exceed the maximum allowed interest rates. The capital provider may not impose variable interest rates upon the assessment. 4. The assessment of the property, plus existing indebtedness on the property, cannot exceed: a. Ninety percent of the fair market value of the property prior to the completion of all planned real property improvements, as determined by a state-certified appraiser, with the exception that properties qualified under the federal low-income housing tax credit program set forth in 26 U.S.C. § 42 are exempt from this requirement; and b. Twenty-five percent of the fair market value of the property at the time of the completion of all planned real property improvements, as determined by a state-certified appraiser. 5. Prior to entering into a financing agreement, the capital provider must receive written consent from every holder of a deed of trust or mortgage interest in the real property that will be subject to the assessment and C-PACER lien agreeing that the property may participate in the program and that the C-PACER lien will take precedence over all other liens except for a lien for taxes. 6. The period of the special assessment must not exceed the weighted average of the useful life of the qualified project that is the basis for the assessment. 7. Prior to approval of financing on a leasehold owned by this state or the local government, but leased to a privately owned entity as described in T.C.A. § 68-205-102(2)(C), the consent of this state or the local government must be obtained. A change to the leasehold local government must be held harmless if the privately owned entity to which the leasehold is leased defaults on a financing agreement for a leasehold changed in accordance with this section. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-6 C-PACER lien.

Sec. 9-108-6. - C-PACER lien. 1. The C-PACER lien amount, plus any interest, penalties, fees and charges accrued or accruing on the C-PACER lien: a. Takes precedence over all other liens or encumbrances except a lien for taxes imposed by the state, a local government, or a junior taxing district on real property, provided existing mortgage holders, if any, have provided written consent described in section 9-108-5(3); and b. Is a first and prior lien, equal to the lien for taxes imposed by the state, a local government, or a junior taxing district against the real property on which the C-PACER lien is imposed, from the date on which the notice of the C-PACER lien is recorded until the C-PACER lien, interest, penalties, fees and charges accrued or accruing are paid in full. 2. The C-PACER lien runs with the land, and that portion of the C-PACER lien that has not yet become due is not accelerated or eliminated by enforcement of the C-PACER lien by tax sale or any lien for taxes imposed by the state, a local government, or junior taxing district against the real property on which the C-PACER lien is imposed. 3. Delinquent assessment installments incur interest and penalties as specified in the financing agreement. 4. After the C-PACER lien is recorded as provided in this chapter, the assessment, C-PACER financing and the C-PACER lien may not be contested on the basis that the improvement is not a qualified improvement or that the project is not a qualified project. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-7 Application and review.

Sec. 9-108-7. - Application and review. 1. A record owner and capital provider shall complete a program application and submit it to the program administrator for review. 2. The program application shall require: a. An attestation by the record owner that the project consists of one or more "qualified improvement" as defined by [section] 9-108-2(14). b. For an existing building seeking improvements: (a) Where energy or water usage improvements are proposed: (1) A certification by a licensed engineering firm, engineer, or other qualified professional listed in the program guidebook, with the licensed professional's stamp affixed to the certification, stating that the proposed qualified improvements will either result in more efficient use or conservation of energy or water, the reduction of greenhouse gas emissions, or the addition of renewable sources of energy or water; and (2) An analysis by a licensed professional explaining how the proposed qualified improvements will either result in more efficient use or conservation of energy or water, the reduction of greenhouse gas emissions, or the addition of renewable sources of energy or water; (b) Where safe drinking water measures are proposed: (1) A certification by a licensed professional engineer, with the licensed professional engineer's stamp affixed to the certification, stating that the qualified improvements will result in the reduction of lead in potable water; and (2) An analysis by a licensed professional engineer explaining how the qualified improvements will result in the reduction of lead in potable water; or (c) Where resilience improvements are proposed: (1) A certification by a licensed professional engineer, with the licensed professional engineer's stamp affixed to the certification, stating that the qualified improvements will result in improved resilience and an analysis explaining how the qualified improvements will result in improved resilience; and (2) An analysis by a licensed professional engineer explaining how the qualified improvements will result in improved resilience and an analysis explaining how the qualified improvements will result in improved resilience. c. For new construction, an applicant must provide: (a) A certification by a licensed professional engineer, with the licensed professional engineer's stamp affixed to the certification, stating that the proposed qualified improvements, individually, or acting as a whole, will enable the project to exceed the energy efficiency, water efficiency, renewable energy, renewable water, or resilience requirements of the current building code of the city; and (b) An analysis explaining how the qualified improvements, individually, or acting as a whole, will enable the project to exceed the energy efficiency, water efficiency, renewable energy, renewable water, or resilience requirements of the current building code of the city. 3. The program administrator shall review the program application according to the application checklist solely to determine whether it is complete, proposes a "qualified improvement," contains no errors on its face, and that all information is provided in the substance and form required by the application checklist. If so, the program administrator shall sign the application checklist indicating that the program application is deemed approved and the project is a qualified project. If a program application is incomplete and/or does not conform to the requirements of the application checklist, the program administrator shall inform the applicant as soon as practicable that the program application is denied, the reasons for the denial, and any corrections that could make the program application acceptable. If feasible, the applicant shall have an opportunity to correct the program application. 4. Upon approval of a program application, a record owner or capital provider shall provide the completed (1) the assessment agreement; (2) the notice of assessment interest and C-PACER lien; (3) Certificate of C-PACER completion; (4) Economic benefits compliance certificate; (5) Energy water resilience compliance certificate; (6) Mortgage holder consent; (7) MLGW compliance certificate, if applicable, and (8) Program application checklist for execution at least ten days prior to close of the C-PACER transaction, along with a requested date for recordation of such forms. 5. The program administrator, on behalf of the local government, shall record in its real property records (1) the assessment agreement; (2) the notice of assessment interest and C-PACER lien; (3) Certificate of C-PACER completion; (4) Economic benefits compliance certificate; (5) Energy water resilience compliance certificate; (6) Mortgage holder consent; (7) MLGW compliance certificate, if applicable, and (8) program application checklist at the date requested by the record owner and capital provider or, at the request of the record owner and the capital provider, the executed documents may be delegated to the capital provider. 6. For a record owner and capital provider whose program application is denied by the local government's program administrator, either party, or both, may request an adjudicative proceeding before the local government's adjudicative body, consistent with the local government's rules and subject to the applicable provisions of Tennessee's Administrative Procedures Act, Tenn. Code Ann. §§ 4-5-101 et seq. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-8 Program guidebook.

Sec. 9-108-8. - Program guidebook. 1. The C-PACER program shall be administered in accordance with the requirements contained in the program guidebook established by the program administrator from time to time. 2. The program guidebook and forms may be amended by the program administrator without approval by the Memphis City Council, provided that such amendments comply with the C-PACER Act and other applicable law. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-9 Collection and enforcement.

Sec. 9-108-9. - Collection and enforcement. 1. Collection of assessment installments and enforcement of C-PACER liens due to delinquent assessment installments, including enforcement by tax sale, shall be enforced in the same manner that a property tax lien against commercial property is enforced by the local government. 2. The local government hereby designates the Memphis City Treasurer to collect assessment installments and enforce C-PACER liens due to delinquent assessment installments. The Memphis City Treasurer shall remit any and all assessment installments it collects to the capital provider to whom the payment is due within 90 days of receipt thereof. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-10 Fees.

Sec. 9-108-10. - Fees. An application fee shall be paid to the local government when the program application is submitted. The amount of the fee shall be determined by the program administrator. Pursuant to the program guidebook, the program administrator shall establish a fee that makes the costs of the C-PACER program cost-neutral to the local government and program administrator provided, however that the fees for any assessment may not exceed one percent of the applicable C-PACER financing and shall not in any case exceed $50,000.00. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-11 Enactment.

Sec. 9-108-11. - Enactment. The provisions of this chapter are hereby declared to be severable and if any section, phrase or provision shall for any reason be declared by a court of competent jurisdiction to be invalid or unenforceable, such declaration shall not affect the validity or enforceability of the remainder of the sections, phrases and provisions hereof. All ordinances, orders, resolutions, and parts thereof in conflict herewith are to the extent of such conflict hereby repealed upon the effectiveness of this chapter. No provision of the Municipal Code or violation of any provision of the Code shall be deemed to impair the validity of this chapter or the instruments authorized by this chapter or to impair the security for or payment of the instruments authorized by this chapter; provided further, however, that the foregoing shall not be deemed to affect the availability of any other remedy or penalty for any violation of any provision of the Code. In the event and to the extent of a conflict between this chapter and the C-PACER Act, the C-PACER Act shall govern. (Ord. No. 5832, § 1, 8-23-2023)

Memphis Code of Ordinances § 9-108-12 No liability.

Sec. 9-108-12. - No liability. Except for a right of action to enforce the terms of this chapter, this chapter does not confer any right of action nor property interest upon any party to a C-PACER transaction against the local government or the program administrator, and, so long as the local government or program administrator comply in good faith with the terms of the C-PACER Act and this chapter, neither the local government nor the program administrator shall incur liability for enacting this program, nor shall the local government, its governing body, executives, or employees nor the program administrator, its governing body, executives, or employees be personally liable as a result of exercising any rights or responsibilities granted under this chapter. (Ord. No. 5832, § 1, 8-23-2023)

Source: City of Memphis, Code of Ordinances and Charter and Related Laws (Municode Library, library.municode.com)URL: https://library.municode.com/tn/memphis/codes/code_of_ordinances?nodeId=TIT9HESA_CH9-108COPRASCLENRECEPRFetched: 10/28/2026