Today's Law As Amended

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AB-874 PACE program: risk mitigation program.(2021-2022)

As Amends the Law Today


 Section 26050 of the Public Resources Code is amended to read:

 (a) The Legislature finds and declares all of the following:
(1) Property Assessed Clean Energy (PACE) financing has been pioneered by municipalities and counties in California as a way for homeowners and small business  property  owners to finance voluntary energy and water efficiency and clean energy improvements.
(2) PACE financing was pioneered in the City of Berkeley, while the City and County of San Francisco, City of San Diego, City of Palm Desert, Sonoma County, and the California Statewide Communities Development Authority (CSCDA) have already initiated or are working to launch additional programs.
(3) Seventeen other states, including Colorado and New York, have also enacted enabling PACE legislation.
(4) The public subsidy provided by the PACE financing is justified by the benefits received in job creation, lower energy demand, and spurring new clean industries that will grow the economy.
(5) Property owners with residential PACE assessments, legal assistance organizations, real estate licensees, district attorneys, and property tax officials have identified a number of risks associated with residential PACE financing, including potential defaults on property taxes, bills that include residential PACE assessments, and on monthly mortgage payments that include escrowed property tax charges, interest and penalties from those defaults, and foreclosures.
(b) It is the intent of the Legislature to assist local jurisdictions in financing the installation of distributed generation renewable energy sources, electric vehicle charging infrastructure, or energy or water efficiency improvements that are permanently fixed to real property through the use of voluntary contractual assessments. assessments without causing harm to homeowners. 
(c) It is not the intent of the Legislature to create any debt, liability, or obligation on the part of the state in assisting local jurisdictions pursuant to this division.

SEC. 2.

 Section 26060 of the Public Resources Code is amended to read:

 (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  shall, pursuant to Article 2.1 (commencing with Section 26065),  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 that allows an eligible property owner to apply for a grant to address residential PACE-related mortgage and tax delinquencies in order to avoid default or  foreclosure.

SEC. 3.

 Section 26061 of the Public Resources Code is amended to read:

 To qualify for assistance pursuant to this chapter, article,  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. 4.

 Article 2.1 (commencing with Section 26065) is added to Chapter 4 of Division 16 of the Public Resources Code, to read:

Article  2.1. PACE Risk Mitigation Program
 (a) The authority shall, upon an appropriation by the Legislature for the purposes of this section, award a grant, in an amount equal to at least one annual PACE assessment but not more than four annual PACE assessments, to an eligible property owner.
(b) The authority shall award a grant pursuant to this section on a first-come, first-served basis.
(c) On or before July 1, 2022, the authority shall adopt regulations as necessary to implement this section.
(d) As used in this section, “eligible property owner” means a natural person who meets all of the following criteria:
(1) The person owns and occupies a property that meets both of the following criteria:
(A) The property is the person’s primary residence.
(B) The property is subject to at least one PACE assessment.
(2) The person meets either of the following criteria:
(A) The person is at least 45 days delinquent, as defined in Section 1024.31 of Title 12 of the Code of Federal Regulations, on payments due on a mortgage secured by the property and either of the following is true:
(i) An escrow or impound account has been established in connection with the mortgage to pay the PACE assessment.
(ii) The mortgage servicer has advanced funds to pay the PACE assessment.
(B) The person is delinquent, pursuant to Section 2617 or 2618 of the Revenue and Taxation Code, on a property tax installment payment that includes a PACE assessment.
(3) The person is of low or moderate income, as defined in Section 50093 of the Health and Safety Code.