# Subtitle 30 – Property Assessed Clean Energy (PACE) Loan Program

Current through 2026-07-17. Source: City of Balt., Md., Ord. 26-129. Published by the Baltimore City Department of Legislative Reference.

## § 30-1 Definitions.

Balt., Md., Code art. 28, § 30-1 (2026)

(a) In this subtitle, the following terms have the meanings indicated.

(b) “Administrator” means the contractor selected under <cite data-path="|28|§30-3">§ 30-3 {“Program administration”} of this subtitle</cite> to administer the PACE Loan Program for the City.

(c) “Clean energy lender” means a private lender who provides a clean energy loan to a commercial property owner under this subtitle.

(d) “Clean energy loan” means a non-accelerating loan made under this subtitle by a clean energy lender to the owner of a commercial property.

(e)

  (1) “Commercial property” has the meaning stated in the Enabling Law.

  (2) “Commercial property” includes any industrial, multi-family residential (more than 4 dwelling units), non-profit, institutional, or agricultural property that meets the eligibility requirements of this subtitle.

(f) “Enabling Law” means the State’s Local Government Article, Title 1, Subtitle 11 {“Clean Energy Loan Programs”}.

(g) “Energy efficient project” means the installation of new or replacement fixtures, products, devices, equipment, systems, materials, or measures that:

  (1) increase a commercial property’s energy or water efficiency;

  (2) decrease a commercial property’s energy or water consumption; or

  (3) reduce a commercial property’s utility costs.

(h) “Energy improvement” means an energy efficiency project or renewable energy project that qualifies under this subtitle.

(i) “Finance Director” means the Director of the City Department of Finance or that Director’s designee.

(j) “Financing agreement” means an agreement between a property owner and a clean energy lender that provides for the terms and conditions of a clean energy loan.

(k) “PACE Loan Program” or “Program” means the Property Assessed Clean Energy Loan Program established under this subtitle.

(l) “Property owner” means the owner of a new or existing commercial property located in the City.

(m)

  (1) “Renewable energy project” means the installation of new or replacement  renewable energy technologies, devices, or systems that generate electric or thermal energy with a nameplate capacity authorized by the Enabling Law.

  (2) “Renewable energy projects” includes projects that generate thermal or electrical energy by using natural resources such as solar, wind, biomass, landfill gas, municipal solid waste, marine or hydrokinetic, or geothermal resources.

(n) “Surcharge” means the repayment obligation of a clean energy loan, including principal, interest, and administrative costs, collected from a property owner through the City’s property tax billing system.

*History: Ord. 16-533*

*History: Ord. 22-125*

## § 30-2 PACE Program established.

Balt., Md., Code art. 28, § 30-2 (2026)

As authorized by the Enabling Law, there is a Property Assessed Clean Energy Loan Program for Baltimore City.

*History: Ord. 16-533*

## § 30-3 Program administration – In general.

Balt., Md., Code art. 28, § 30-3 (2026)

(a) The Mayor and City Council of Baltimore:

  (1) serves only as a PACE Loan Program sponsor, facilitating the repayment of clean energy loan obligations through the City’s property tax billing system; and

  (2) is not at any time liable for any clean energy loan obligation authorized by this subtitle.

(b) Subject to the approval of the Board of Estimates and to any applicable requirements imposed by or adopted under <cite data-doc="City of Baltimore, Md., Charter" data-path="VI|§11">City Charter Article VI, § 11</cite> {“Procurement”}, the Finance Director, in consultation with the Baltimore City Office of Sustainability, shall contract for a Program Administrator, either:

  (1) by expanding the scope of an existing municipal contract vehicle;

  (2) through a competitive procurement process;

  (3) by using an existing Administrator contracted through a cooperative purchasing agreement of the Washington Metropolitan Council of Governments; or

  (4) by entering into an agreement with a private entity to administer the PACE Loan Program.

(c)

  (1)

    (i) The administrative costs of the PACE Loan Program shall be borne by the property owners participating in the program, and the share of administrative costs applicable to an individual clean energy loan shall be included in the loan’s financing agreement.

    (ii) These administrative costs may not exceed the actual expenses incurred by the City to administer the program.

  (2) The City may charge property owners who participate in the PACE Loan Program the following, non-financeable fees:

    (i) a reasonable application fee; and

    (ii) recording fees associated with participation in the Program.

*History: Ord. 16-533*

## § 30-4 Program administration – Rules and regulations.

Balt., Md., Code art. 28, § 30-4 (2026)

(a) Subject to Title 4 {“Administrative Procedure Act – Regulations”} of the <cite data-path="|general">City General Provisions Article</cite>, the Finance Director, in consultation with the Program Administrator and the Baltimore City Office of Sustainability, shall adopt rules and regulations to carry out this subtitle.

(b) These rules and regulations shall:

  (1) clearly delineate the respective roles and responsibilities of property owners, clean energy lenders, the Program Administrator, and the Finance Director; and

  (2) include:

    (i) methodologies for determining the eligibility of commercial properties, property owners, and energy improvements;

    (ii) minimum underwriting standards for clean energy lenders;

    (iii) the documentation required on the Administrator’s request to demonstrate that the energy savings generated by an energy efficiency project exceed a property owner’s obligations under a clean energy loan financing agreement;

    (iv) efficient application intake, processing, and transaction closing procedures;

    (v) terms and provisions to be included in a Notice of Surcharge Levy to be recorded by the clean energy lender or the Program Administrator in the Land Records of Baltimore City;

    (vi) required data management services that conform to City practices;

    (vii) Program outreach strategies; and

    (viii) annual program participation and performance reporting requirements.

*History: Ord. 16-533*

*History: Text Conformed 02/25/21*

## § 30-5 Eligibility of property and property owner.

Balt., Md., Code art. 28, § 30-5 (2026)

(a) To be eligible for a clean energy loan:

  (1) the commercial property for which the energy improvements are proposed must be located in the City; and

  (2) the property owner must:

    (i) have a 100% ownership interest in the commercial property;

    (ii) demonstrate that no taxes, assessments, fees, or other charges encumbering the commercial property are delinquent; and

    (iii) provide written proof that all current holders of a mortgage or deed of trust on the commercial property have expressly consented to the clean energy loan and its status as a priority lien on the property.

(b) Before any clean energy loan is approved under the PACE Loan Program, the Administrator must give due regard to the property owner’s ability to repay the loan, in a manner substantially similar to that required for a mortgage loan under State Commercial Law Article §§ <cite data-doc="Md. Code" data-path="gcl|12-127">12-127</cite>, <cite data-doc="Md. Code" data-path="gcl|12-311">12-311</cite>, <cite data-doc="Md. Code" data-path="gcl|12-409">12-409</cite>.1, 12-925, and 12-1029.

*History: Ord. 16-533*

## § 30-6 Qualifying Energy Improvements.

Balt., Md., Code art. 28, § 30-6 (2026)

(a) A property owner may use the PACE Loan Program to finance all costs incurred to purchase, upgrade, modify, or construct qualifying energy improvements to a new or existing commercial property, including all property improvements necessary to install a qualified energy improvement.

(b) Qualifying energy improvement costs include:

  (1) energy audits;

  (2) pre-construction and post-installation evaluation, measurement, and verification services;

  (3) engineering, design, and feasibility studies;

  (4) materials and labor necessary for installation;

  (5) commissioning or retro-commissioning;

  (6) performance guarantees;

  (7) operations and maintenance service contracts, warranties, or insurance;

  (8) accreditation or certification of building energy performance with standard-setting organizations approved by the Administrator; and

  (9) federal, state, or local regulatory compliance costs required to complete an energy improvement.

(c)

  (1) A renewable energy project qualifies as an energy improvement under this subtitle only if the commercial property consumes all or a portion of the output from the renewable energy project.

  (2) Renewable energy projects may include technologies that provide resiliency benefits to the commercial property or the electrical grid.  These benefits include demand management, ancillary services, power quality, capacity firming, or other benefits determined by the Administrator to be consistent with the purpose of this program.

*History: Ord. 16-533*

## § 30-7 Financing.

Balt., Md., Code art. 28, § 30-7 (2026)

(a)

  (1) A clean energy loan may be for a term not exceeding 25 years.

  (2) The financing agreement may contain any terms agreed to by the clean energy lender and the property owner, as permitted by law.

  (3) A clean energy loan may include costs associated with executing the financing agreement, including origination, legal, and closing costs, but excluding the non-financeable fees provided for in <cite data-path="|28|§30-3|(c)|(2)">§ 30-3(c)(2) {“Program expenses”} of this subtitle</cite>.

(b)

  (1) For projects initiated on or after July 1, 2016, through December 31, 2019, the  Administrator may approve a clean energy loan up 30 months after the property owner places qualifying energy improvements in service, as long as the property owner has filed an initial PACE loan application on or before December 31, 2019.

  (2) For projects initiated on or after January 1, 2020, the  Administrator may approve a clean energy loan up to 30 months after the property owner places qualifying energy improvements in service, as long as the property owner has filed an initial PACE loan application prior to:

    (i) commencing construction of an energy-improvement project; or

    (ii) altering a previously proposed project to include qualifying energy improvements.

(c) The City may not directly finance or fund any clean energy loans under the PACE Loan Program.

*History: Ord. 16-533*

*History: Ord. 18-128*

## § 30-8 Surcharge.

Balt., Md., Code art. 28, § 30-8 (2026)

(a)

  (1) A property owner participating in the PACE Loan Program shall repay the clean energy loan through an annual surcharge on the property owner’s real property or stand-alone tax bill.

  (2) This surcharge constitutes a first lien on the property, with priority over all prior or subsequent liens in favor of private parties, from the date it is billed on the property owner’s real property or stand-alone tax bill until the unpaid surcharge, interest, and any associated penalties are paid in full.

(b) The amount of the surcharge shall be the sum of:

  (1) the amount due under the terms of indebtedness and obligations agreed to in the loan’s financing agreement; and

  (2) any administrative costs owed to the City under this subtitle.

(c) Except as provided in <cite data-path="|28|§30-3|(a)|(2)">§ 30-3(a)(2) of this subtitle</cite>, if a person acquires a commercial property that is subject to a surcharge incurred under this subtitle, that person assumes the obligation to pay the surcharge, whether the acquisition was voluntary or involuntary.

(d)

  (1) Within 30 days of receiving written notice from the Administrator that a financing agreement for a clean energy loan has been executed, the clean energy lender or the Administrator shall cause a Notice of Surcharge Levy to be recorded in the Land Records of Baltimore City.

  (2) The Notice of Surcharge Levy shall include:

    (i) the clean energy loan financing agreement; and

    (ii) any other information required by the rules and regulations adopted under this subtitle.

(e)

  (1) The annual surcharge shall be:

    (i) billed:

      (A) as a separate, clearly defined line item on the real property tax bill; or

      (B) on a separate, stand-alone tax bill; and

    (ii) due on the same dates as City real property taxes.

  (2)

    (i) The City shall bill the first surcharge due by a property owner on the first tax bill after the Administrator provides written notice to the Finance Director of the financing agreement’s repayment schedule.

    (ii) This billing practice does not impact the legal rights afforded a clean energy lender under:

      (A) a valid, executed finance agreement; and

      (B) a properly recorded Notice of Surcharge Levy.

(f)

  (1) Surcharges collected by the City under this subtitle shall be disbursed to the Administrator within 45 days after the last day of the month in which the amounts are collected.

  (2) Neither the City nor the Administrator shall at any time possess any ownership of a surcharge collected, except for the administrative costs included in the surcharge under this subtitle.

  (3) The City is obligated to pay a clean energy lender only the portion of the surcharge actually collected to repay the clean energy loan.

(g) Surcharge payments collected through a property owner’s real property or stand-alone tax bill shall be credited:

  (1) first, to any non-Program taxes, as defined by § 14-801(d) of the State Tax-Property Article, that are delinquent as of the date the surcharge payments are received; and

  (2) then, to Program surcharges.

(h)

  (1) If a property owner fails to pay a surcharge installment in accordance with the terms of the loan financing agreement, the Finance Director shall provide written notice of the delinquency to the Administrator in a timely manner.

  (2) After providing this notice to the Administrator, the City has no obligation to collect unpaid surcharge payments until a tax lien attaches to the property.

(i)

  (1) If a property owner defaults on a surcharge, the Finance Director shall collect the surcharge as a tax lien, through the tax sale process, in a manner similar to other property tax assessments with respect to any penalties, fees, remedies, and lien priorities authorized under the <cite data-doc="Md. Code" data-path="gtp">State Tax-Property Article, Title 14, Subtitle 8</cite>.

  (2) A surcharge levied under this subtitle may be foreclosed only to the extent of any unpaid installment and any related penalties, interest, and fees.

  (3) This collection process applies to an overdue surcharge, regardless of whether real property taxes (or any other taxes, charges, or assessments) are due and owing.

(j) The City may assign a PACE tax lien to the Administrator.

(k) If a PACE tax lien is foreclosed, the PACE tax lien shall survive the judgment of foreclosure to the extent that any unpaid surcharge installments secured by the lien were not the subject of that judgment.

*History: Ord. 16-533*

*History: Ord. 18-128*