Loans and repayment assistance by a political subdivision for certain improvements to properties and collection of the debt by special charge

This bill allows a political subdivision to make PACE program loans or agreements for electric vehicle infrastructure, storm water control measures, and energy reliability improvements. The bill also allows, with certain limitations for premises located in floodplains, a political subdivision to make PACE program loans or agreements for improvements intended to improve the resiliency of a premises.

Under current law, a PACE installment payment that is delinquent becomes a lien on the property that benefits from the improvement or application as of the date of delinquency. Under this bill, a political subdivision that makes a loan or enters into an agreement under the PACE program has a lien on the property that benefits from the improvement or application in the amount of the loan or the amount to be repaid under the agreement as of the date of the making of the loan or the entry into the agreement.

Current law requires a political subdivision that makes a PACE program loan or agreement for an improvement or application that costs $250,000 or more to require the owner to obtain a written guarantee from the contractor or project engineer that the improvement or application will achieve a savings-to-investment ratio of greater than 1.0 and that the contractor or engineer will annually pay the owner any shortfall in savings below this level.

This bill eliminates this requirement and instead provides that a political subdivision must require the owner or lessee to do the following:

1. With some exceptions, obtain either 1) a third-party assessment of the baseline water or energy use of the owner or lessee's property and an assessment of the expected monetary savings due to the improvement or 2) an assessment of the renewable energy production of the improvement and the monetary benefit to be generated by the improvement.

2. After the making, installation, or maintenance of the improvement or application is complete, provide a verification that the improvement or application was properly made, installed, or maintained or, for a loan or agreement solely for the operation of an improvement or application, that at the time the loan is made or the agreement entered into the improvement or application was in proper operational condition.

This bill also provides that a political subdivision must require an owner or lessee to obtain the written consent of all holders of a mortgage on the premises as a condition of obtaining a PACE program loan or agreement and that the repayment period of a PACE loan or agreement may not exceed 30 years.