Bill Text: CA AB2597 | 2013-2014 | Regular Session | Chaptered
Bill Title: Energy: PACE program.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2014-09-26 - Chaptered by Secretary of State - Chapter 614, Statutes of 2014. [AB2597 Detail]
Download: California-2013-AB2597-Chaptered.html
BILL NUMBER: AB 2597 CHAPTERED
BILL TEXT
CHAPTER 614
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2014
APPROVED BY GOVERNOR SEPTEMBER 26, 2014
PASSED THE SENATE AUGUST 7, 2014
PASSED THE ASSEMBLY AUGUST 18, 2014
AMENDED IN SENATE JUNE 5, 2014
AMENDED IN ASSEMBLY APRIL 23, 2014
AMENDED IN ASSEMBLY MARCH 28, 2014
INTRODUCED BY Assembly Member Ting
(Principal coauthor: Senator Pavley)
FEBRUARY 21, 2014
An act to amend Sections 26052, 26055, 26060, 26061, 26062, and
26063 of the Public Resources Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2597, Ting. Energy: PACE program.
Existing law authorizes a public agency and a property owner to
enter into voluntary contractual assessments to finance the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently affixed
on real property (PACE financing program).
Existing law requires the California Alternative Energy and
Advanced Transportation Financing Authority to establish a Property
Assessed Clean Energy (PACE) Reserve program to assist local
jurisdictions in financing, among other things, the installation of
distributed generation renewable energy sources or energy or water
efficiency improvements on residential projects. Existing law
requires the authority, in considering the eligibility of a public
agency's PACE financing program for assistance under the PACE Reserve
program, to consider whether the PACE program provides a loan that
is less than 10% of the value of the property.
This bill would require the authority to consider whether a PACE
financing program provides financial assistance that is less than 15%
of the value of the property, for up to the first $700,000, and less
than 10% of the remaining value of the property above $700,000, and
whether the PACE financing program limits the total mortgage-related
debt and PACE financing from exceeding the value of the property.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) Property Assessed Clean Energy (PACE) financing programs are
voluntary contractual assessment or voluntary special tax programs
that finance the installation of distributed generation renewable
energy sources, electric vehicle charging infrastructure, or energy
or water efficiency improvements.
(b) The PACE risk mitigation program is intended to provide an
additional safeguard for both existing and new residential PACE
financing programs to expand in California.
(c) The PACE risk mitigation program is intended to remove any
additional risk to the first mortgage lender and federal mortgage
enterprises, such as Fannie Mae and Freddie Mac, resulting from the
existence of a PACE assessment on a property in foreclosure or forced
into sale for unpaid taxes.
SEC. 2. Section 26052 of the Public Resources Code is amended to
read:
26052. "Applicant" means, for the purposes of Article 2
(commencing with Section 26060), a public agency as defined in
paragraph (3) of subdivision (c) of Section 5898.20 of the Streets
and Highways Code, or an entity administering a PACE financing
program on behalf of and with written consent of a public agency,
and, for the purposes of Article 3 (commencing with Section 26070), a
financial institution providing a loan pursuant to that chapter to
finance the installation of distributed generation renewable energy
sources, electric vehicle charging infrastructure, or energy or water
efficiency improvements.
SEC. 3. Section 26055 of the Public Resources Code is amended to
read:
26055. "PACE program" means a program established by an applicant
that is financed by the PACE bond or a PACE assessment regardless of
funding sources.
SEC. 4. Section 26060 of the Public Resources Code is amended to
read:
26060. (a) The authority shall develop and administer a PACE
Reserve program to reduce overall costs to the property owners of
PACE bonds issued by an applicant by providing a reserve of no more
than 10 percent of the initial principal amount of the PACE bond.
(b) The authority shall develop and administer a PACE risk
mitigation program for PACE financing to increase its acceptance in
the marketplace and protect against the risk of default and
foreclosure.
SEC. 5. Section 26061 of the Public Resources Code is amended to
read:
26061. To qualify for assistance pursuant to this chapter, the
PACE program shall require all of the following:
(a) The interest rate on the PACE bond does not exceed a
percentage as determined by the authority to be appropriate.
(b) Minimum legal financing structure and credit underwriting
criteria as determined by the authority are met.
(c) Proceeds of the PACE bonds are used to finance qualified
energy and water efficiency, electric vehicle charging
infrastructure, and clean energy improvements.
(d) The improvement financed is for a residential project of three
units or fewer, or a commercial project that costs less than
twenty-five thousand dollars ($25,000) in total.
SEC. 6. Section 26062 of the Public Resources Code is amended to
read:
26062. An applicant shall submit to the authority an application
providing a detailed description of the PACE program, a detailed
description of the transactional activities associated with the PACE
bond issuance, including all transactional costs, information
regarding any credit enhancement or insurance associated with the
PACE program, and other information deemed necessary by the
authority.
SEC. 7. Section 26063 of the Public Resources Code is amended to
read:
26063. (a) In evaluating eligibility, the authority shall
consider whether the applicant's PACE program includes the following
conditions:
(1) Financing recipients are legal owners of underlying property.
(2) Financing recipients are current on mortgage and property tax
payments.
(3) Financing recipients are not in default or in bankruptcy
proceedings.
(4) Financing is for less than 15 percent of the value of the
property, up to the first seven hundred thousand dollars ($700,000)
of the value of the property, and is for less than 10 percent of the
remaining value of the property above seven hundred thousand dollars
($700,000).
(5) The property is within the geographical boundaries of the PACE
program.
(6) The program offers financing for energy or water efficiency
improvements, electric vehicle charging infrastructure, or clean
energy improvements.
(7) Improvements financed by the program follow applicable
standards of energy efficiency retrofit work, including any
guidelines adopted by the State Energy Resources Conservation and
Development Commission.
(8) The total mortgage-related debt and PACE financing on the
underlying property does not exceed the value of the property.
(b) In evaluating an application, the authority shall consider all
of the following factors:
(1) The use by the PACE program of best practices, adopted by the
authority, to qualify eligible properties for participation in
underwriting the PACE program.
(2) The cost efficiency of the applicant's PACE program, including
bond issuance, credit enhancement, or insurance.
(3) The projected number of jobs created by the PACE program.
(4) The applicant's PACE program requirements for quality
assurance and consumer protection as related to achieving efficiency
and clean energy production.
(5) The mechanisms by which savings produced by this program are
passed on to the property owners.
(6) Any other factors deemed appropriate by the authority.
