Bill Text: CA AB1551 | 2019-2020 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Property assessments: requirements and disclosures.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2020-09-25 - Chaptered by Secretary of State - Chapter 156, Statutes of 2020. [AB1551 Detail]
Download: California-2019-AB1551-Amended.html
NOYES
Local Program:
NO
SECTION 1. Section 22017 of the Financial Code is amended to read: 22017.
Bill Title: Property assessments: requirements and disclosures.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Passed) 2020-09-25 - Chaptered by Secretary of State - Chapter 156, Statutes of 2020. [AB1551 Detail]
Download: California-2019-AB1551-Amended.html
|
Amended
IN
Assembly
March 28, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Assembly Bill | No. 1551 |
| Introduced by Assembly Member Arambula |
February 22, 2019 |
An act to amend Section 22017 of 22684 of the Financial Code, and to amend Section 5913 of the Streets and Highways Code, relating to financial institutions.
LEGISLATIVE COUNSEL'S DIGEST
AB 1551, as amended, Arambula.
Property Assessed Clean Energy program.
Existing
(1) Existing law, commonly known as the Property Assessed Clean Energy (PACE) program, authorizes public agency officials and property owners, as provided, to enter into voluntary contractual assessments, known as PACE assessments, to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently fixed to real property.
Existing law, the California Financing Law (CFL), requires a program
administrator who administers a PACE program on behalf of, and with the written consent of, a public agency to comply with specified requirements relating to the PACE program, including requiring a program administrator to be licensed by the Commissioner of Business Oversight under the California Financing Law. The CFL requires a program administrator to establish and maintain a process for the enrollment, and for the cancellation of that enrollment, of a PACE solicitor and a PACE solicitor agent. The CFL defines the term “PACE solicitor” and “PACE solicitor agent” for these purposes.
program.
This bill would make nonsubstantive changes to this provision.
The CFL prohibits a program administrator from executing an assessment contract, prohibits any work from commencing under a home improvement contract that is financed by that assessment contract, and prohibits the execution of that home improvement contract, unless the program administrator ensures that certain criteria related to that assessment contract are satisfied.
This bill would include within the criteria that an assessment contract is required to meet that
the contract does not contain a penalty for early payment.
(2) Existing law requires a program administrator to provide an oral confirmation of the key terms of an assessment contract with the property owner on the call, or the property owner’s authorized representative, and to retain a copy of a recording of that confirmation for a period of 5 years after the recording is made. Existing law requires that oral confirmation to contain specified information.
The bill would require a program administrator to include in that oral confirmation that the property owner may repay an amount owed pursuant to an assessment contract before the date that amount is due under the contract without early repayment penalty.
The bill would also make nonsubstantive
changes.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 22684 of the Financial Code is amended to read:22684.
A program administrator shall not execute an assessment contract, and no work shall commence under a home improvement contract that is financed by that assessment contract nor shall that home improvement contract be executed unless the following criteria are satisfied:(a) All property taxes for the property that will be subject to the assessment contract are current. The program administrator shall ask a property owner whether there has been no more than one late payment of property taxes on the property for the previous three years or since the current owner acquired the property, whichever period is shorter.
(b) The property that will be subject to the assessment contract has no recorded and outstanding involuntary
liens in excess of one thousand dollars ($1,000).
(c) The property that will be subject to the assessment contract has no notices of default currently recorded that have not been rescinded.
(d) The property owner has not been a party to any bankruptcy proceedings within the last four years, except that the property owner may have been party to a bankruptcy proceeding that was discharged or dismissed between two and four years before the application date and the property owner has had no payments more than 30 days past due on any mortgage debt or nonmortgage debt, excluding medical debt, during the 12 months immediately preceding the application date.
(e) The property owner is current on all mortgage debt on the subject property and has no more than one late payment during the six months immediately preceding the
application date and if the late payment did not exceed 30 days past due.
(f) The property that will be subject to the assessment contract is within the geographical boundaries of the applicable PACE program.
(g) The measures to be installed pursuant to the assessment contract are eligible under the terms of the applicable PACE program.
(h) The financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) inclusive of the existing assessments, and is for less than 10 percent of the remaining value of the property above seven hundred thousand dollars ($700,000).
(i) The total PACE assessments and the mortgage-related debt on the property subject to the PACE assessment will not exceed 97
percent of the market value of the property as established by the valuation required by Section 22685.
(j) The term of the assessment contract shall not exceed the estimated useful life of the measure to which the greatest portion of funds disbursed under the assessment contract is attributable. The program administrator shall determine useful life for purposes of this subdivision based upon credible third-party standards or certification criteria that have been established by appropriate government agencies or nationally recognized standards and testing organizations.
(k) The program administrator shall verify the existence of recorded PACE assessments and shall ask if the property owner has authorized additional PACE assessments on the same subject property that have not yet been recorded. The failure of a property owner to comply with this subdivision shall not invalidate an
assessment contract or any obligations thereunder, notwithstanding if the combined amount of the PACE assessments exceed the criteria set forth in subdivision (h) or (i). The existence of a prior PACE assessment or a prior assessment contract shall not constitute evidence that the assessment contract under consideration is affordable or meets any other program requirements.
(l) The assessment contract does not contain a penalty for early repayment of an amount owed under the contract.
(l)
(m) The program
administrator shall use commercially reasonable and available methods to verify the above.
SEC. 2.
Section 5913 of the Streets and Highways Code, as amended by Chapter 837 of the Statutes of 2018, is amended to read:5913.
(a) (1) Before a property owner executes an assessment contract the program administrator shall do the following:(A) Make an oral confirmation that at least one owner of the property has a copy of the contract assessment documents required by paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or Section 53328.1 of the Government Code, as applicable, with all the key terms completed, the financing estimate and disclosure form specified in Section 5898.17, and the right to cancel form specified in Section 5898.16, with hard copies available upon request.
(B) Make an oral confirmation of the key terms of the assessment contract, in plain
language, with the property owner on the call or to a verified authorized representative of the owner on the call and shall obtain acknowledgment from the property owner on the call to whom the oral confirmation is given.
(2) The oral confirmation required pursuant to paragraph (1) shall include, but is not limited to, all of the following information:
(A) The property owner on the call has the right to have other persons present for the call, and an inquiry as to whether the property owner would like to exercise the right to include anyone else on the call. This shall occur at the onset of the call, after the determination of the preferred language of communication.
(B) The property owner on the call is
informed that they should review the assessment contract and financing estimate and disclosure form with all other owners of the property.
(C) The efficiency improvement being installed is being financed by a PACE assessment.
(D) The total estimated annual costs the property owner will have to pay under the assessment contract, including applicable fees.
(E) The total estimated average monthly amount of funds the property owner would have to save in order to pay the annual costs under the PACE assessment, including applicable fees.
(F) That the county annual secured property tax bill, which will include the installment of the PACE lien, will be mailed by the county tax collector no later than November 1 each year, and that if the lien is recorded after
the fiscal year closes but before the bill is mailed, the first installment may not appear on the county tax bill until the following year.
(G) The term of the assessment contract.
(H) That payments on the assessment contract will be made through an additional annual assessment on the property and paid either directly to the county tax collector’s office as part of the total annual secured property tax bill, or through the property owner’s mortgage impound account, and that if the property owner pays his or her
taxes through an impound account he or she account, the property owner should notify their
the property owner’s mortgage lender to discuss adjusting his or her the monthly mortgage payment by the estimated monthly cost of the PACE assessment.
(I) That the property will be subject to a lien during the term of the assessment contract and that the obligations under the assessment contract may be required to be paid in full before the property owner sells or refinances the property.
(J) That the property owner has disclosed whether the property has received or is seeking additional PACE assessments and has disclosed all other PACE assessments or special taxes that are or about to be placed on the property, if known to and understood by the
property owner.
(K) That any potential utility savings are not guaranteed, and will not reduce the assessment payments or total assessment amount.
(L) That the program administrator and contractor do not provide tax advice, and that the property owner should seek professional tax advice if he or she the property owner has questions regarding tax credits, tax deductibility, or of other tax impacts on the PACE assessment or assessment contract.
(M) That if that property tax payment is delinquent within the fiscal year, the county tax collector will assess a 10-percent penalty and may assess related costs, as required by state law.
A delinquent payment also subjects the property to foreclosure. If the delinquent payment continues past June 30 of a given year and defaults, the county tax collector will assess penalties at the rate of 1 ½ percent per month (18 percent per year), and the property will continue to be subject to foreclosure and may become subject to the county tax collector’s right to sell the property at auction.
(N) That the property owner has a three-business day right to cancel the assessment contract pursuant to subdivision (b) of Section 5898.16, and that canceling the assessment contract may also cancel the home improvement contract under Section 5940.
(O) That it is the responsibility of the property owner to contact the property owner’s home insurance provider to determine whether the efficiency improvement to be financed by the PACE assessment is covered by the property owner’s
insurance plan.
(P) That the property owner may repay an amount owed pursuant to an assessment contract before the date that amount is due under the contract without early repayment penalty.
(b) The program administrator shall comply with the following when giving the oral confirmation described in subdivision (a):
(1) The program administrator shall record the oral confirmation in an audio format in accordance with applicable laws.
(2) The program administrator may not comply with the requirement in subdivision (a) through the use of a prerecorded message, or other similar device or method.
(3) Recording of an oral confirmation shall be retained by the program administrator for a period of at least five years from the time of the recording.
(c) The provisions of this section shall be in addition to the documents required to be provided to the property owner under Sections 5898.16 and 5898.17.
(d) At the commencement of the oral confirmation, the program administrator shall ask if the property owner on the call would prefer to communicate during the oral confirmation primarily in a language other than English that is specified in Section 1632 of the Civil Code. If the preferred language is supported by the program administrator, the oral confirmation shall be given in that primary language, except where the property owner on the call chooses to communicate through his or her
the property owner’s own interpreter. If the preferred language is not supported and an interpreter is not chosen by the property owner on the call, the PACE assessment transaction shall not proceed. For purposes of this subdivision, “his or her “the property owner’s own interpreter” means a person, who is not a minor, is able to speak fluently and read with full understanding both the English language and any of the languages specified in Section 1632 of the Civil Code, and who is not employed by, and whose services are not made available through, the program administrator, the public agency, or the contractor.
(e) (1) Beginning on January 1, 2019, if the oral confirmation was conducted
primarily in a language other than English that is specified in Section 1632 of the Civil Code, the program administrator shall deliver in writing the disclosures and contract or agreement required by law, including, but not limited to, the following:
(A) Assessment contract documents specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899, 5899.3, or 5899.4, or a special tax described in Section 53328.1 of the Government Code.
(B) The financing estimate and disclosure form specified in Section 5898.17.
(C) The right to cancel form specified in Section 5898.16.
(2) Before the execution of any contract or agreement described in paragraph (1), the program administrator shall deliver a translation of the disclosures, contract, or
agreement in the language in which the oral confirmation was conducted, that includes a translation of every term and condition in that contract or agreement.
(f) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
SEC. 3.
Section 5913 of the Streets and Highways Code, as added by Chapter 837 of the Statutes of 2018, is amended to read:5913.
(a) (1) Before a property owner executes an assessment contract the program administrator shall do the following:(A) Make an oral confirmation that at least one owner of the property has a copy of the contract assessment documents required by paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or Section 53328.1 of the Government Code, as applicable, with all the key terms completed, the financing estimate and disclosure form specified in Section 5898.17, and the right to cancel form specified in Section 5898.16, with hard copies available upon request.
(B) Make an oral confirmation of the key terms of the assessment contract, in plain language, with
the property owner on the call or to a verified authorized representative of the owner on the call and shall obtain acknowledgment from the property owner on the call to whom the oral confirmation is given.
(2) The oral confirmation required pursuant to paragraph (1) shall include, but is not limited to, all the following information:
(A) The property owner on the call has the right to have other persons present for the call, and an inquiry as to whether the property owner would like to exercise the right to include anyone else on the call. This shall occur at the onset of the call, after the determination of the preferred language of communication.
(B) The property owner on the call is informed that they should review the assessment contract and financing estimate and disclosure form with all other owners of the
property.
(C) The efficiency improvement being installed is being financed by a PACE assessment.
(D) The total estimated annual costs the property owner will have to pay under the assessment contract, including applicable fees.
(E) The total estimated average monthly amount of funds the property owner would have to save in order to pay the annual costs under the PACE assessment, including applicable fees.
(F) That the county annual secured property tax bill, which will include the installment of the PACE lien, will be mailed by the county tax collector no later than November 1 each year, and that if the lien is recorded after the fiscal year closes but before the bill is mailed, the first installment may not appear on the county tax bill until the
following year.
(G) The term of the assessment contract.
(H) That payments on the assessment contract will be made through an additional annual assessment on the property and paid either directly to the county tax collector’s office as part of the total annual secured property tax bill, or through the property owner’s mortgage impound account, and that if the property owner pays his or her taxes through an impound account he or she
account, the property owner should notify their
the property owner’s mortgage lender to discuss adjusting his or her the monthly mortgage payment by the estimated monthly cost of the PACE assessment.
(I) That the property will be subject to a lien during the term of the assessment contract and that the obligations under the assessment contract may be required to be paid in full before the property owner sells or refinances the property.
(J) That the property owner has disclosed whether the property has received or is seeking additional PACE assessments and has disclosed all other PACE assessments or special taxes that are or about to be placed on the property, if known to and understood by the
property owner.
(K) That any potential utility savings are not guaranteed, and will not reduce the assessment payments or total assessment amount.
(L) That the program administrator and contractor do not provide tax advice, and that the property owner should seek professional tax advice if he or she the property owner has questions regarding tax credits, tax deductibility, or of other tax impacts on the PACE assessment or assessment contract.
(M) That if that property tax payment is delinquent within the fiscal year, the county tax collector will assess a 10-percent penalty and may assess related costs, as required by state law.
A delinquent payment also subjects the property to foreclosure. If the delinquent payment continues past June 30 of a given year and defaults, the county tax collector will assess penalties at the rate of 1 ½ percent per month (18 percent per year), and the property will continue to be subject to foreclosure and may become subject to the county tax collector’s right to sell the property at auction.
(N) That the property owner has a three-business day right to cancel the assessment contract pursuant to subdivision (b) of Section 5898.16, and that canceling the assessment contract may also cancel the home improvement contract under Section 5940.
(O) That it is the responsibility of the property owner to contact the property owner’s home insurance provider to determine whether the efficiency improvement to be financed by the PACE assessment is covered by the property owner’s
insurance plan.
(P) That the property owner may repay an amount owed pursuant to an assessment contract prior to the date that amount is due under the contract without early repayment penalty.
(b) The program administrator shall comply with the following when giving the oral confirmation described in subdivision (a):
(1) The program administrator shall record the oral confirmation in an audio format in accordance with applicable laws.
(2) The program administrator may not comply with the requirement in subdivision (a) through the use of a prerecorded message, or other similar device or method.
(3) Recording of an oral confirmation shall be retained by the program administrator for a period of at least five years from the time of the recording.
(c) The provisions of this section shall be in addition to the documents required to be provided to the property owner under Sections 5898.16 and 5898.17.
(d) At the commencement of the oral confirmation, the program administrator shall ask if the property owner on the call would prefer to communicate during the oral confirmation primarily in a language other than English that is specified in Section 1632 of the Civil Code. If the preferred language is supported by the program administrator, the oral confirmation shall be given in that primary language, except where the property owner on the call chooses to communicate through his or her
the property owner’s own interpreter. If the preferred language is not supported and an interpreter is not chosen by the property owner on the call, the PACE assessment transaction shall not proceed. For purposes of this subdivision, “his or her “the property owner’s own interpreter” means a person, who is not a minor, is able to speak fluently and read with full understanding both the English language and any of the languages specified in Section 1632 of the Civil Code, and who is not employed by, and whose services are not made available through, the program administrator, the public agency, or the contractor.
(e) (1) Beginning on January 1, 2019, if the oral confirmation was conducted
primarily in a language other than English that is specified in Section 1632 of the Civil Code, the program administrator shall deliver in writing the disclosures and contract or agreement required by law, including, but not limited to, the following:
(A) Assessment contract documents specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code.
(B) The financing estimate and disclosure form specified in Section 5898.17.
(C) The right to cancel form specified in Section 5898.16.
(2) Before the execution of any contract or agreement described in paragraph (1), the program administrator shall deliver a translation of the disclosures, contract, or agreement
in the language in which the oral confirmation was conducted, that includes a translation of every term and condition in that contract or agreement.
(f) This section shall become operative on January 1, 2029.
(a)“PACE solicitor” means a person authorized by a program administrator to solicit a property owner to enter into an assessment contract.
(b)“PACE solicitor agent” means an individual who is employed or retained by, and acts on behalf of, a PACE solicitor to solicit a property owner to enter into an assessment contract.
(c)“PACE solicitor” and “PACE solicitor agent” do not include any of the following:
(1)A person employed by a program administrator.
(2)A person, including a home improvement contractor or subcontractor,
who does not solicit property owners to enter into assessment contracts.
(3)A person who performs purely administrative or clerical tasks.
(4)A person who advertises a PACE program, if the content of the advertising is created, prepared, or approved by a program administrator, and the advertising is subject to and in compliance with this division.
(5)A person who obtains information regarding prospective applicants for PACE financing, or who provides to a program administrator information regarding prospective applicants for PACE financing, if that information was not obtained in connection with advertising or soliciting a PACE program.
(6)A
person who only solicits a property owner to enter into an assessment contract with a person who is not considered a program administrator within the meaning of subdivision (b) of Section 22018.
