HOUSE BILL NO. 2119 103RD GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE OWEN.
4222H.01I JOSEPH ENGLER, Chief Clerk
AN ACT To repeal sections 67.2800, 67.2810, 67.2815, 67.2817, 67.2830, and 67.2840, RSMo, and to enact in lieu thereof six new sections relating to the property assessment clean energy act.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 67.2800, 67.2810, 67.2815, 67.2817, 67.2830, and 67.2840, 2 RSMo, are repealed and six new sections enacted in lieu thereof, to be known as sections 3 67.2800, 67.2810, 67.2815, 67.2817, 67.2830, and 67.2840, to read as follows: 67.2800. 1. Sections 67.2800 to 67.2840 shall be known and may be cited as the 2 "Property Assessment Clean Energy Act". 3 2. As used in sections 67.2800 to 67.2840, the following words and terms shall mean: 4 (1) "Assessment contract", a contract entered into between a clean energy 5 development board and a property owner under which the property owner agrees to pay an 6 annual assessment for a period of up to [twenty] thirty years not to exceed the weighted 7 average useful life of the qualified improvements in exchange for financing of an energy 8 efficiency improvement or a renewable energy improvement; 9 (2) "Authority", the state environmental improvement and energy resources authority 10 established under section 260.010; 11 (3) "Bond", any bond, note, or similar instrument issued by or on behalf of a clean 12 energy development board; 13 (4) "Clean energy conduit financing", the financing of energy efficiency 14 improvements or renewable energy improvements for a single parcel of property or a
EXPLANATION — Matter enclosed in bold-faced brackets [thus] in the above bill is not enacted and is intended to be omitted from the law. Matter in bold-face type in the above bill is proposed language. HB 2119 2
15 unified development consisting of multiple adjoining parcels of property under section 16 67.2825; 17 (5) "Clean energy development board", a board formed by one or more municipalities 18 under section 67.2810; 19 (6) "Director", the director of the division of finance within the department of 20 commerce and insurance; 21 (7) "Division", the division of finance within the department of commerce and 22 insurance; 23 (8) "Energy efficiency improvement", any acquisition, installation, or modification on 24 or of publicly or privately owned property designed to reduce the energy consumption of such 25 property, including but not limited to: 26 (a) Insulation in walls, roofs, attics, floors, foundations, and heating and cooling 27 distribution systems; 28 (b) Storm windows and doors, multiglazed windows and doors, heat-absorbing or 29 heat-reflective windows and doors, and other window and door improvements designed to 30 reduce energy consumption; 31 (c) Automatic energy control systems; 32 (d) Heating, ventilating, or air conditioning distribution system modifications and 33 replacements; 34 (e) Caulking and weatherstripping; 35 (f) Replacement or modification of lighting fixtures to increase energy efficiency of 36 the lighting system without increasing the overall illumination of the building unless the 37 increase in illumination is necessary to conform to applicable state or local building codes; 38 (g) Energy recovery systems; and 39 (h) Daylighting systems; 40 (9) "Municipality", any county, city, or incorporated town or village of this state; 41 (10) "Program administrator", an individual or entity selected by the clean energy 42 development board to administer the PACE program, but this term does not include an 43 employee of a county or municipal government assigned to a clean energy development board 44 or a public employee employed by a clean energy development board who is paid from 45 appropriated general tax revenues; 46 (11) "Project", any energy efficiency improvement or renewable energy 47 improvement; 48 (12) "Property assessed clean energy local finance fund", a fund that may be 49 established by the authority for the purpose of making loans to clean energy development 50 boards to establish and maintain property assessed clean energy programs; HB 2119 3
51 (13) "Property assessed clean energy program" or "PACE program", a program 52 established by a clean energy development board to finance energy efficiency improvements 53 or renewable energy improvements under section 67.2820; 54 (14) "Renewable energy improvement", any acquisition and installation of a fixture, 55 product, system, device, or combination thereof on publicly or privately owned property that 56 produces energy from renewable resources, including, but not limited to photovoltaic 57 systems, solar thermal systems, wind systems, biomass systems, or geothermal systems. 58 3. All projects undertaken under sections 67.2800 to 67.2840 are subject to the 59 applicable municipality's ordinances and regulations, including but not limited to those 60 ordinances and regulations concerning zoning, subdivision, building, fire safety, and historic 61 or architectural review. 62 4. Sections 67.2800 to 67.2840 shall not apply to any assessment contract, 63 project, or PACE program entered into, undertaken, or established for any residential 64 property. 67.2810. 1. One or more municipalities may form clean energy development boards 2 for the purpose of exercising the powers described in sections 67.2800 to 67.2840. Each 3 clean energy development board shall consist of not less than three members, as set forth in 4 the ordinance or order establishing the clean energy development board. Members shall serve 5 terms as set forth in the ordinance or order establishing the clean energy development board 6 and shall be appointed: 7 (1) If only one municipality is participating in the clean energy development board, 8 by the chief elected officer of the municipality with the consent of the governing body of the 9 municipality; or 10 (2) If more than one municipality is participating, in a manner agreed to by all 11 participating municipalities. 12 2. A clean energy development board shall be a political subdivision of the state and 13 shall have all powers necessary and convenient to carry out and effectuate the provisions of 14 sections 67.2800 to 67.2840, including but not limited to the following: 15 (1) To adopt, amend, and repeal bylaws, which are not inconsistent with sections 16 67.2800 to 67.2840; 17 (2) To adopt an official seal; 18 (3) To sue and be sued; 19 (4) To make and enter into contracts and other instruments with public and private 20 entities; 21 (5) To accept grants, guarantees, and donations of property, labor, services, and other 22 things of value from any public or private source, including the acquisition of loans or 23 assessment contracts from other states or their municipalities and political subdivisions HB 2119 4
24 to serve a common purpose of providing financing support or credit enhancement for 25 any project; 26 (6) To employ or contract for such managerial, legal, technical, clerical, accounting, 27 or other assistance it deems advisable; 28 (7) To levy and collect special assessments under an assessment contract with a 29 property owner and to record such special assessments as a lien on the property; 30 (8) To borrow money from any public or private source and issue bonds and provide 31 security for the repayment of the same; 32 (9) To finance a project under an assessment contract; 33 (10) To collect reasonable fees and charges in connection with making and servicing 34 assessment contracts and in connection with any technical, consultative, or project assistance 35 services offered; 36 (11) To invest any funds not required for immediate disbursement in obligations of 37 the state of Missouri or of the United States or any agency or instrumentality thereof, or in 38 bank certificates of deposit; provided, however, the limitations on investments provided in 39 this subdivision shall not apply to proceeds acquired from the sale of bonds which are held by 40 a corporate trustee; and 41 (12) To take whatever actions necessary to participate in and administer a clean 42 energy conduit financing or a property assessed clean energy program. 43 3. No later than July first of each year, the clean energy development board shall file 44 with each municipality that participated in the formation of the clean energy development 45 board and with the director of the department of natural resources an annual report for the 46 preceding calendar year that includes: 47 (1) A brief description of each project financed by the clean energy development 48 board during the preceding calendar year, which shall include the physical address of the 49 property, the name or names of the property owner, an itemized list of the costs of the project, 50 and the name of any contractors used to complete the project; 51 (2) The amount of assessments due and the amount collected during the preceding 52 calendar year; 53 (3) The amount of clean energy development board administrative costs incurred 54 during the preceding calendar year; 55 (4) The estimated cumulative energy savings resulting from all energy efficiency 56 improvements financed during the preceding calendar year; and 57 (5) The estimated cumulative energy produced by all renewable energy 58 improvements financed during the preceding calendar year. 59 4. No lawsuit to set aside the formation of a clean energy development board or to 60 otherwise question the proceedings related thereto shall be brought after the expiration of HB 2119 5
61 sixty days from the effective date of the ordinance or order creating the clean energy 62 development board. No lawsuit to set aside the approval of a project, an assessment contract, 63 or a special assessment levied by a clean energy development board, or to otherwise question 64 the proceedings related thereto shall be brought after the expiration of sixty days from the 65 date that the assessment contract is executed. 67.2815. 1. A clean energy development board shall not enter into an assessment 2 contract or levy or collect a special assessment for a project without making a finding that 3 there are sufficient resources to complete the project and that the estimated economic benefit 4 expected from the project during the financing period is equal to or greater than the cost of the 5 project. 6 2. An assessment contract shall be executed by the clean energy development board 7 and the benefitted property owner or property owners and shall provide: 8 (1) A description of the project, including the estimated cost of the project and details 9 on how the project will either reduce energy consumption or create energy from renewable 10 sources; 11 (2) A mechanism for: 12 (a) Verifying the final costs of the project upon its completion; and 13 (b) Ensuring that any amounts advanced or otherwise paid by the clean energy 14 development board toward costs of the project will not exceed the final cost of the project; 15 (3) An acknowledgment by the property owner that the property owner has received 16 or will receive a special benefit by financing a project through the clean energy development 17 board that equals or exceeds the total assessments due under the assessment contract; 18 (4) An agreement by the property owner to pay annual special assessments for a 19 period not to exceed [twenty] thirty years, as specified in the assessment contract; 20 (5) A statement that the obligations set forth in the assessment contract, including the 21 obligation to pay annual special assessments, are a covenant that shall run with the land and 22 be obligations upon future owners of such property; and 23 (6) An acknowledgment that no subdivision of property subject to the assessment 24 contract shall be valid unless the assessment contract or an amendment thereof divides the 25 total annual special assessment due between the newly subdivided parcels pro rata to the 26 special benefit realized by each subdivided parcel. 27 3. The total special assessments levied against a property under an assessment 28 contract shall not exceed the sum of the cost of the project, including any required energy 29 audits and inspections, or portion thereof financed through the participation in a property 30 assessed clean energy program or clean energy conduit financing, including the costs of any 31 audits or inspections required by the clean energy development board, plus such HB 2119 6
32 administration fees, interest, and other financing costs reasonably required by the clean 33 energy development board. 34 4. The clean energy development board shall provide a copy of each signed 35 assessment contract to the local assessor and collector for the county, or city not within a 36 county, and shall cause a copy of such assessment contract to be recorded in the real estate 37 records of the recorder of deeds for the county, or city not within a county. 38 5. Special assessments agreed to under an assessment contract shall be a lien on the 39 property against which it is assessed on behalf of the applicable clean energy development 40 board from the date that each annual assessment under the assessment contract becomes due. 41 Such special assessments shall be collected by the collector for the county, or city not within a 42 county, in the same manner and with the same priority as ad valorem real property taxes[, 43 subject to the provisions of subsection 8 of this section]. Once collected, the collector for the 44 county, or city not within a county, shall pay over such special assessment revenues to the 45 clean energy development board in the same manner in which revenues from ad valorem real 46 property taxes are paid to other taxing districts. Such special assessments shall be collected 47 as provided in this subsection from all subsequent property owners, including the state and all 48 political subdivisions thereof, for the term of the assessment contract. 49 6. Any clean energy development board that contracts for outside administrative 50 services to provide financing origination for a project shall offer the right of first refusal to 51 enter into such a contract to a federally insured depository institution with a physical presence 52 in Missouri upon the same terms and conditions as would otherwise be approved by the clean 53 energy development board. Such right of first refusal shall not be applicable to the 54 origination of any transaction that involves the issuance of bonds by the clean energy 55 development board. 56 7. Except as otherwise provided in section 67.2840, sections 67.2816, 67.2817, 57 67.2818, and 67.2819 shall apply only to PACE programs for projects to improve residential 58 properties of four or fewer units. Notwithstanding any provision of law to the contrary, any 59 clean energy development board formed to improve commercial properties, properties owned 60 by nonprofit or not-for-profit entities, governmental properties, or nonresidential properties in 61 excess of four residential units shall be exempt from the provisions of sections 67.2816, 62 67.2817, 67.2818, and 67.2819, nor shall such sections apply to the commercial PACE 63 programs and commercial PACE assessment contracts of any clean energy development 64 board engaged in both commercial and residential property programs. Notwithstanding any 65 provision of law to the contrary, any clean energy development board that ceases to finance 66 new projects to improve residential properties of four or fewer units before January 1, 2022, 67 shall be exempt from the provisions of sections 67.2816, 67.2817, 67.2818, and 67.2819. HB 2119 7
67.2817. 1. Notwithstanding any other contractual agreement to the contrary, each 2 assessment contract shall be reviewed, approved, and executed by the clean energy 3 development board and these duties shall not be delegated. Any attempted delegations of 4 these duties shall be void. 5 2. An assessment contract shall not be approved, executed, submitted, or otherwise 6 presented for recording unless a clean energy development board verifies that the following 7 criteria are satisfied: 8 (1) The PACE assessments are assessed in equal annual installments; 9 (2) The PACE assessment may be paid in full at any time without prepayment 10 penalty. The pay-off letter shall specify the amount of any fee or charge by a lender or loan 11 service agent to obtain the total balance due. The release of the assessment shall be recorded 12 within thirty days of the receipt of the amounts identified in the pay-off letter; 13 (3) The assessment contract shall disclose applicable penalties, interest penalties, or 14 late fees under the contract and describe generally the interest and penalties imposed under 15 chapter 140 relating to the collection of delinquent property taxes; 16 (4) The clean energy development board shall provide a separate statement to the 17 owner of the residential property of the penalties or late fees authorized under the assessment 18 contract and of the penalties and interest penalties under chapter 140 for the applicable tax 19 collector as of the date of the assessment contract; 20 (5) The clean energy development board has confirmed that the property owner is 21 current on property taxes for the project property; 22 (6) The property that shall be subject to the assessment contract has no recorded and 23 outstanding involuntary liens in excess of one thousand dollars; 24 (7) The property owner shall not currently be a party to any bankruptcy proceeding 25 where any existing lien holder of the property is named as a creditor; 26 (8) The term of the assessment contract shall not exceed the weighted average useful 27 life of the qualified improvements to which the greatest portion of funds disbursed under the 28 assessment contract is attributable, not to exceed [twenty] thirty years. The clean energy 29 development board shall determine useful life for purposes of this subdivision based upon 30 credible third-party standards or certification criteria that have been established by 31 appropriate government agencies or nationally recognized standards and testing 32 organizations; 33 (9) The property owner is curre