SS/SCS/HCS/HB 697 - This act modifies provisions relating to the Property Assessment Clean Energy (PACE) Act.
DEFINITIONS (Section 67.2800): This act adds the terms "director", "division", and "program administrator". The act also modifies the term "assessment contract" to state that property owners may enter into assessment contracts to finance energy efficiency improvements with a clean energy development board for a period of up to 20 years not to exceed the weighted average useful life of the qualified improvements.
COLLECTION OF SPECIAL ASSESSMENTS (Section 67.2815): A clean energy development board shall provide a copy of each signed assessment contract to the local collector and assessor for the county and the collector and assessor for the city of St. Louis. Additionally, the special assessments shall be collected by the collector of the county or the city of St. Louis collector.
PACE PROGRAM FOR RESIDENTIAL PROPERTIES (Section 67.2816): Municipalities that have created or joined a residential PACE program or district shall inform the Director of the Division of Finance by submitting a copy of the enabling ordinance to the Division. Any municipality that withdraws from a residential PACE program or district shall inform the Director by submitting a copy of the enabling ordinance for the withdrawal to the Division.
Clean energy development boards offering residential property programs in the state and their program administrator shall be subject to examination by the Division for compliance with provisions of law relating to assessment contracts under the PACE Act. The Division shall conduct an examination of each clean energy development board at least once every 24 months. Examination reports shall be made available to the public.
PACE PROGRAM CONTRACTS FOR RESIDENTIAL PROPERTIES (Sections 67.2817 and 67.2818): Notwithstanding any other contractual agreement to the contrary, each assessment contract shall be reviewed, approved, and executed by the clean energy development board and these duties shall not be delegated.
A clean energy development board shall not approve, execute, submit, or otherwise present for recording any residential assessment contract unless certain criteria set forth in the act are satisfied.
Any assessment contract for a project that, combined with any existing and outstanding indebtedness secured by the benefitted property, results in a loan-to-value ratio between 80% and 97% of the true value in money, as determined by the assessor pursuant to chapter 137, plus 10% of such amount of the benefitted property prior to the project as determined by reference to the assessment records for tax purposes for the most recent completed assessment by the county or city not within a county, shall include provision of an insurance policy providing coverage as set forth in the act, if such product exists.
The property owner executing a PACE assessment contract shall have a 3-day right to cancel the contract.
The clean energy development board shall advise the property owner in writing that any delinquent assessment shall be a lien on the property subject to the assessment contract and that the obligations under the PACE assessment contract continue even if the property owner sells or refinances the property.
If the residential property owner pays his or her property taxes and special assessments via a lender or loan servicer's escrow program, the PACE board shall advise the property owner that the residential PACE assessment will cause the owner's monthly escrow requirements to increase and will increase the owner's total payment to the lender or the loan servicer. The clean energy development board shall further advise the property owner that if the special assessment results in an escrow shortage the owner will be required to pay the shortage in a lump-sum payment or catch-up the shortage over 12 months.
The clean energy development board shall also provide a statement providing a brief description of the residential project improvement, the cost of the improvement, and the annual assessment necessary to repay the obligation due on the assessment contract to any first lien holder within 3 days of the date the contract is recorded.
The PACE board shall maintain a public website with current information about the residential PACE program. The website shall list approved contractors for the program and shall disclose the standard assessment contract information and process for property owners or their successors to request information about their assessment contract.
The clean energy development board, contractor, or other third party shall not make any representations as to the income tax deductibility of an assessment contract unless the representation is accompanied by certain supporting documents, as listed in the act.
Any requirements and consumer protections established by federal laws and regulations that are applicable to PACE financing or similar programs shall apply to residential assessment contracts under the act.
The clean energy development board shall not enter into an assessment contract or levy or collect a special assessment under circumstances set forth in the act.
The PACE board that offers residential PACE projects shall provide a disclosure form to homeowners that shall show the financing terms of the assessment contract, as set forth in the act. The disclosure form shall be presented to a property owner prior to the execution of an assessment contract.
Before a property owner executes an assessment contract, the PACE board shall make a verbal confirmation that at least one owner of the property has a copy of the assessment contract documents, the financing estimate and disclosure form, and the right to cancel form. A verbal confirmation shall also be made of the key terms of the assessment contract, in plain language, and an acknowledgment shall be obtained from the property owner or authorized representative to whom the verbal confirmation is given. The verbal confirmation shall include information as listed in the act.
PACE PROGRAM CONTRACTORS (Section 67.2819): Contractors or other third parties shall not advertise the availability of residential assessment contracts that are administered by a PACE board or solicit property owners on behalf of the PACE board, unless the contractor meets certain requirements set forth in the act.
The act sets limitations on what incentives or information the PACE board shall provide to a contractor.
Finally, a contractor shall not provide a different price for a project financed as a residential PACE project than the contractor would provide if paid in cash by the property owner.
EFFECTIVE DATE (Section 67.2840): The provisions of this act relating to PACE boards, PACE contracts, and PACE contractors shall apply to the residential PACE programs of clean energy development boards and participating municipalities after January 1, 2022, and shall only apply to PACE programs for improvements to residential properties of four or fewer units. These provisions shall be effective and apply to residential PACE assessment contracts entered into after January 1, 2022.
This act is similar to SCS/SB 105 (2021), SB 577 (2020), HB 1555 (2020), SCS/SB 173 (2019), HCS/HB 215 (2019), SB 933 (2018), HB 2214 (2018), and HB 2344 (2018).