SB 933 - This act modifies provisions relating to property assessed clean energy (PACE), and modifies several provisions of the Property Assessment Clean Energy Act.
DEFINITIONS (Section 67.2800) - This act defines the terms "commercial property", "eligible improvement", "program administrator", "property assessed clean energy assessment", "property owner", "residential property", and "water efficiency improvement". This act also modifies the term "assessment contract". Currently, property owners may enter into assessment contracts to finance energy efficiency improvements with the clean energy development board for a period of 20 years. This act changes such contract period to 25 years.
CLEAN ENERGY DEVELOPMENT BOARDS (Section 67.2810) - Currently, clean energy development boards are required to file an annual report with certain municipalities that includes a description of each project financed, including the physical address of the property, the name of the property owner, an itemized list of project costs, and contractors used to complete the project. This act repeals the requirement to provide the address, the name of the owner, a list of project costs, and contractors used to complete the project.
PACE ASSESSMENT CONTRACT CRITERIA FOR COMMERCIAL PROPERTIES (Section 67.2815) - Currently, a clean energy development board shall not enter into a PACE assessment contract without first finding that there are sufficient resources to complete the project, and that the estimated economic benefit is equal to or greater than the cost of the project. Such contract shall provide a description of the project, a mechanism for verifying project costs, an acknowledgment by the property owner that he or she will receive a benefit from such financing, an agreement by the property owner to pay annual assessments, a statement of contract obligations, and an acknowledgment that no subdivision of property shall be valid unless the assessment is divided by each parcel. This act applies this criteria exclusively to PACE assessment contracts for commercial properties.
PACE ASSESSMENT CONTRACT CRITERIA FOR RESIDENTIAL PROPERTIES (Section 67.2817) - Under this act, a program administrator shall not submit a PACE assessment contract for a residential property unless certain criteria are satisfied, including that all property taxes are current, the property has no recorded liens in excess of $1,000, the property has no notices of default, the property owner has not been subject to bankruptcy within the past 7 years, the property owner is current on all mortgage debt, the property is within the jurisdiction of the clean energy development board, the financing does not exceed 20% of the property's market value, the balance of PACE assessments and mortgage-related debt does not exceed 97% of the property's fair market value, the PACE assessment contract does not exceed the estimated useful life of the improvement, and a disclosure on whether additional PACE assessments have been authorized but not yet recorded on the same property. The fair market value of the property may be determined by using certain methods as set forth in this act, and the market value determination shall be disclosed to the property owner prior to signing the assessment contract.
This act requires a program administrator to determine, prior to entering into a PACE assessment contract, that the property owner has a reasonable ability to pay the annual payment obligation by considering the property owner's income and debt obligations. The determination process shall be based on certain factors set forth in this act. Verification of the property owner's income may be waived if, in the case of emergency or immediate necessity, the funding is used to finance a HVAC or similar system if certain criteria are met. The program administrator shall report annually to the clean energy development board how many assessments were funded under such emergency criteria.
Prior to a property owner executing a PACE assessment contract, the program administrator shall make an oral confirmation of the key terms of the agreement, shall obtain an acknowledgment from the person to whom such confirmation is given, and shall provide a right to cancel. The confirmation shall include certain information as set forth in this act, and shall be recorded. Further, the clean energy development board shall develop a disclosure form for residential PACE projects, as well as a right to cancel form, which shall be provided to a property owner prior to the execution of a PACE assessment contract. A property owner may waive the right to cancel a PACE assessment contract if certain criteria are met as set forth in this act.
Under this act, program administrators shall not allow home improvement contractors to advertise the availability of PACE assessment contracts, unless such contractor makes a written agreement to abide by applicable advertising and marketing laws. Further, a program administrator shall not provide any direct or indirect cash payment to a contractor in excess of the actual price charged to the property owner for the installation of improvements, and shall not reimburse expenses to a contractor for advertising and marketing campaigns. However, a program administrator may reimburse a contractor for reasonable training expenses, not to exceed $100 per training participant. Program administrators and contractors shall also abide by other requirements set forth in this act. Program administrators are also required establish and maintain a list of eligible improvements.
All PACE assessment contracts shall provide a description of the project, a statement of contract obligations, and an acknowledgment that no subdivision of property subject to the PACE assessment shall be valid unless the contract divides the assessment. The clean energy development board shall provide a copy of each signed PACE assessment contract to the local county assessor and collector, and shall record such contract in the real estate records of the county recorder of deeds. PACE assessments shall act as a lien on the property on which it is assessed. Such assessments shall be noticed and collected by the county collector in the same manner as property tax, which shall then be paid to the clean energy development board.
On an annual basis, a clean energy development board offering PACE financing shall publish a report containing certain information. All reports shall include only aggregate data, and shall be made publicly available.
This act is similar to HB 2214 (2018) and HB 2344 (2018).