Missouri Senate

Introduced

DEFINITIONS (Section 67.2800): This act adds the terms "commercial property", "director", "disaster resiliency improvement", "division", "eligible improvement", "program administrator", "residential PACE program", "residential program administrator", and "water efficiency improvement". 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.

PACE boards established prior to August 28, 2019, may approve eligible improvements according to their established standards or practice as of August 27, 2019, but shall not approve any new classes of eligible improvements until final standards for such improvements are issued by the state environmental and energy resources authority.

PACE boards shall adopt, implement, and maintain standards for eligible improvements within 180 days after the standards become final. The state environmental and energy resources authority shall issue standards of eligible improvements for residential PACE projects not later than January 1, 2020.

CLEAN ENERGY DEVELOPMENT BOARDS (Section 67.2810): A clean energy development board may employ a program administrator, including a licensed residential program administrator. A board may also accept appropriated funds from any participating county or municipality to fund the board's activities, including the employment of staff.

RESIDENTIAL PACE PROGRAM (Section 67.2816): No individual or corporation shall serve as a residential program administrator for a residential PACE program unless that individual or corporation obtains a license and maintains an annual registration with the Missouri Division of Finance. Any existing residential program administrator acting in Missouri on August 28, 2019, shall submit to licensing and registration and file an application within 90 days.

The Director of the Missouri Division of Finance may establish reasonable license and annual registration fees, as set forth in the act. The Director shall not issue such a license unless the applicant has met certain requirements as listed in the act.

Residential program administrators shall be subject to a compliance examination process, which shall be conducted at least once every 2 years. The Division of Finance shall investigate any consumer complaint submitted against a residential program administrator and any complaint submitted by a PACE board or other government body. The residential program administrator shall be responsible for the costs of the examinations.

The Director may also assess residential program administrators on an annual basis to equitably spread the costs of the Division's administration expenses incurred to maintain the licensing program, compliance examination program, and complaint investigation program.

The Division of Finance may issue an order to cease and desist to any residential program administrator who fails to obtain and maintain a license and annual registration. The Division may take other corrective actions, such as suspending or revoking licenses or referring matters relating to the conduct of a residential program administrator to a prosecuting attorney or the Attorney General.

RESIDENTIAL PACE PROGRAM CONTRACTS (Sections 67.2817 and 67.2818): A clean energy development board or residential program administrator shall not approve, execute, submit, or otherwise present for recordation any residential assessment contract unless certain criteria set forth in the act are satisfied. The property owner executing a residential PACE assessment contract shall have a 3-day right to cancel the contract. The property owner executing such a contract shall also be provided a 30-day option to pay the cash price of the residential project plus applicable interest, as set forth in the act.

The PACE board or residential program administrator shall advise the property owner in writing 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 or residential program administrator 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 PACE board or residential program administrator 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 PACE board or residential program administrator 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 or residential program administrator 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 PACE board, program administrator, 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.

The PACE board or residential program administrator 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 or residential program administrator shall make an oral 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. An oral 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 oral confirmation is given. The oral 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 residential program administrator or solicit property owners on behalf of the PACE board or residential program administrator, unless the contractor meets requirements set forth in the act.

The act sets limitations on what incentives or information the PACE board or residential program administrator 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.

This act is substantially similar to HB 215 (2019) and similar to SB 933 (2018), HB 2214 (2018), and HB 2344 (2018).

JAMIE ANDREWS