SB 692

This bill makes various changes to the property assessed clean energy (PACE)

program.

Under current law, a municipality may impose a special charge against real

property for services rendered by allocating the cost of the service to the properties

that are served. Generally, a special charge is not payable in installments. Also under

current law, under the PACE program, a city, village, town, or county (political

subdivision) may make a loan to, or enter into a loan repayment agreement with, an

owner or lessee of a premises for certain energy or water efficiency improvements or

renewable resource applications. The political subdivision may collect a loan

repayment under the PACE program as a special charge. A special charge imposed

under the PACE program may be collected in installments. Also, a political

subdivision may allow a third party that has provided financing for the PACE

program project to collect the installments.

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