SB 577 - This act modifies provisions relating to the Property Assessment Clean Energy (PACE) Act.DEFINITIONS (Section 67.2800): This act adds the terms "director" and "division". 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 city collector if a city has joined a clean energy development board and the county has not. Additionally, the special assessments shall be collected by the city collector if a city has joined a clean energy development board and the county has not.
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.
PACE boards offering residential property programs in the state 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 PACE board at least once every 24 months and such other times as the Director may determine. A final examination report shall be delivered to the PACE board and sponsoring municipality. Examination reports shall be made available to the public.
If the Director finds that a PACE board has failed to comply with certain provisions of law under the PACE Act, he or she may issue a notice to the PACE board of his or her intent to file a release of the assessment contract and any related assessment lien made in violation of the law. A PACE board shall have 30 days to file an appeal with the circuit court for the county where the real estate is located.
A PACE board and its sponsoring municipality or municipalities shall be jointly and severally responsible for paying the actual costs of examinations, which the Director shall assess upon the completion of an examination.
The Division may refer any matter related to the conduct of a PACE board to the State Auditor or to the Attorney General.
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 PACE board and these duties shall not be delegated.
A PACE board 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 PACE assessment contract shall have a 3-day right to cancel the contract.
The PACE 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 PACE 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 PACE 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 PACE 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.
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 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 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 PACE boards and participating municipalities after January 1, 2021, and shall only apply to PACE programs that are for improvements to residential properties of four or fewer units. These provisions shall be effective and apply to PACE assessment contracts entered into after January 1, 2021.
This act is similar to SCS/SB 173 (2019), HCS/HB 215 (2019), SB 933 (2018), HB 2214 (2018), and HB 2344 (2018).
JAMIE ANDREWS