Qualifications and Responsibilities
As we noted in the last section, the final C-PACE Guidelines have not been published yet, but the likelihood is that they will closely resemble the latest draft, which is version 2. Having covered property, property owner, and project eligibility, the next section covers the qualifications and responsibilities of C-PACE participants.
Municipalities
To be qualified to participate in the program, a municipality must opt in by (a) passing an ordinance in the form prescribed by the program, (b) enter into an agreement with the NJEDA, and (c) formally notify the Authority of its interest in participating. The Opt-in Notice needs to have the municipality’s legal information, contact person, and evidence of meeting all of the requirements.
The responsibilities of the participating municipality then include: (a) entering into project agreements to levy, bill, collect, remit, and, to the extent necessary, enforce the C-PACE Assessment, (b) entering into assignment agreements with the capital provider, and (c) filing the Assessment and any modifications required by the parties. A municipality may terminate its participation in the program, except that it must continue to meet its obligations with regard to any C-PACE projects that ave been approved.
Capital Providers
Capital Providers must be qualified by the Authority, and must be
a. An accredited investor or qualified institutional buyer
b. The trustee or custodian for a group of such qualified investors or buyers
c. A special purpose securitization vehicle created by such qualified investors, or
d. “A commercial lending institution chartered by a state or the federal government, including, without limitation, a savings and loan association, a credit union, or a commercial bank.
Qualification of a capital provider does not imply any endorsement by the Authority, and until subsequent guidelines are issued, may not be a public entity.
Capital providers must also meet certain criteria to be eligible to participate in the program, including being in good standing with the Authority and with several other state agencies and departments. They must demonstrate that they are qualified in three other C-PACE programs, or have satisfactorily completed three C-PACE transactions; or, in the case of other financial institutions, have three positive references “from borrowers in transactions that are representative of the applicant’s core lending activities.”
Capital providers must also provide information including a list of staff, estimated availability of capital, lending terms and fees, a list of other C-PACE programs in which they participate, current time to process and close a C-PACE transaction, complete a legal questionnaire, and any other information that the Authority may require in connection with a specific project. They must enter into an agreement with the Authority to collect and remit the required administrative fee, and meet annual reporting requirements. (Interested parties should of course consult the Guidelines directly and/or have their attorney do so.)