HSB 320 (LSB 2505YC (2) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN)

A BILL FOR

An Act allowing local governments to establish economic property assessed capital expenditure programs.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  LEGISLATIVE FINDING AND INTENT —— ECONOMIC PROPERTY ASSESSED CAPITAL EXPENDITURE PROGRAM.
   1.  It is the intent of the general assembly to authorize local governments to establish economic property assessed capital expenditure programs, as defined in the section of this Act enacting section 403B.1, to ensure that free and willing owners of agricultural, commercial, industrial, or multifamily residential property may obtain low-cost, long-term financing for qualifying improvements.
   2.  The general assembly finds that the increase in economic development, lower insurance costs, and lower disaster and emergency response costs from implementing economic property assessed capital expenditure programs serves as a valid public purpose for permitting local governments to adopt the programs.
   3.  The general assembly further finds that economic property assessed capital expenditure programs lead to decreased energy and water costs and encourage water and energy sustainability.
    Sec. 2.  NEW SECTION.  403B.1  Definitions.
   For the purposes of this chapter:
   1.  “Assessment agreement” means a written contract between an economic property owner and a local government with an established E-PACE program that states the terms of the property owner’s qualified project as required by this chapter.
   2.  “Capital provider” means a private third-party entity, including its designee, successor, and assigns, that provides or funds E-PACE financing, including refinancing qualified projects, under a financing agreement.
   3.  “E-PACE assessment” means a voluntary assessment imposed by a local government on real property located within the boundaries of a region for the purpose of financing an E-PACE program.
   4.  a.  “Economic property” means any of the following:
   (1)  Privately owned commercial, industrial, or agricultural real property.
   (2)  Privately owned residential property consisting of five or more dwelling units.
   b.  “Economic property” may include property owned by nonprofit, charitable, or religious organizations, one or more owner-occupied or rental condominium units affiliated with a hotel, a leasehold of privately owned property, or a leasehold of property owned by a governmental entity used for the purposes of this chapter.
   5.  “Economic property assessed capital expenditure program” or “E-PACE program” means an economic property assessed capital expenditure program established pursuant to section 403B.4.
   6.  “Financing agreement” means a contract under which a property owner agrees to repay a capital provider for E-PACE financing, including but not limited to details of finance charges, fees, debt servicing, accrual of interest and penalties, and terms relating to treatment of prepayment and partial payment billing, collection, and enforcement of E-PACE financing.
   7.  “Local government” means a county, city, or other political subdivision of this state.
   8.  “Program administrator” means a local government department or individual designated to administer an E-PACE program or a private independent third party designated by the local government to administer an E-PACE program in conformance with the administration procedures provided in this chapter.
   9.  “Program guidebook” means a comprehensive document that illustrates the applicable program and establishes appropriate guidelines, specifications, underwriting and approval criteria, and standard application forms consistent with the administration of an E-PACE program pursuant to this chapter. A “program guidebook” shall include all of the following:
   a.  A form for an assessment contract between the local government and a property owner for specifying the terms of an E-PACE assessment, financing provided by a third party, and remedies for default or foreclosure.
   b.  A form for a notice of assessment to be used by the local government.
   c.  A form for a notice of assignment of an assessment between a local government and a capital provider.
   10.  “Qualified improvement” means a permanent improvement installed and affixed to economic property and intended to do one or more of the following:
   a.  Decrease energy consumption or demand through the use of efficiency technologies, products, components, materials, or activities.
   b.  Support the production of renewable energy, including the use of a product, device, or interacting group of products or devices that generates electricity, provides thermal energy, or regulates temperature.
   c.  Decrease water consumption or demand and increase water conservation and storage through the use of efficiency technologies, products, or activities.
   d.  Reduce or eliminate lead from water that may be used for drinking or cooking.
   e.  Increase water or wastewater resilience, including through storm water management and flood mitigation.
   f.  Increase wind resistance, energy storage, off-grid electricity production, or other improvements to reduce the environmental impacts or land usage approved by the local government that established the E-PACE program.
   11.  “Qualified project” means a project approved by the administrator of an E-PACE program, involving the installation or modification of a qualified improvement, including new construction or the adaptive reuse of eligible property with a qualified improvement.
    Sec. 3.  NEW SECTION.  403B.2  E-PACE assessments.
   1.  A local government may impose an E-PACE assessment to repay the financing of a qualified project on economic property located within the boundaries governed by the local government.
   2.  A local government shall not impose an E-PACE assessment to repay the financing of the purchase or installation of products or devices not permanently affixed to economic property.
   3.  A local government may impose an E-PACE assessment only after the local government approves a project application related to the property to be assessed pursuant to section 403B.6. The E-PACE assessment shall be created through an assessment agreement between the local government and the owner of the property to be assessed.
    Sec. 4.  NEW SECTION.  403B.3  Authorizations.
   1.  A local government may establish an E-PACE program in accordance with this section.
   2.  A local government that establishes an E-PACE program may enter into an assessment agreement with an economic property owner to impose an E-PACE assessment on the owner’s property as the means to repay the owner’s financing of a qualified project on that property.
   3.  a.  A local government may administer an E-PACE program or delegate administration of the program pursuant to a third party.
   b.  If a local government delegates administration of an 
E-PACE program to a third party, then the contract delegating administrative authority shall require the third party to reimburse the local government for costs associated with monitoring the program, imposing E-PACE assessments, and billing and collecting payments on behalf of the third party.
   4.  The financing to pay for E-PACE assessments may include but is not limited to one or more of the following:
   a.  The cost of materials and labor necessary for the installation or modification of a qualified improvement.
   b.  Permit fees.
   c.  Inspection fees.
   d.  Lender fees.
   e.  E-PACE program application and administration fees.
   f.  Project development and engineering fees.
   g.  Interest reserves.
   h.  Capitalized interest, in an amount determined by the economic property owner and the third party providing financing for an E-PACE program’s qualified project.
   i.  Other fees or costs incurred by the property owner incidental or ancillary to the installation, modification, or improvement on a specific or pro rata basis, as determined by the local government.
   5.  An assessment agreement constitutes written notice to the economic property owner subject to the assessment agreement that the owner may be responsible for the payment of any remaining principal balance of the assessment upon the refinance or sale of the property unless the remaining principal balance is assumed by the acquiring property owner. The local government shall require each economic property owner entering into an assessment agreement to acknowledge, in writing, the notice as part of the execution of the assessment agreement.
    Sec. 5.  NEW SECTION.  403B.4  Procedures to establish an E-PACE program.
   1.  To establish an E-PACE program, a local government must do all of the following:
   a.  Adopt a resolution of intent that includes all of the following:
   (1)  A statement that the local government intends to authorize direct financing between property owners and capital providers under a financing agreement as the means to finance qualified projects.
   (2)  A statement that the local government intends to authorize E-PACE assessments, entered into voluntarily by a property owner with the local government by means of a written contract, to repay the financing for qualified projects available to property owners.
   (3)  A description of the types of projects that may qualify for E-PACE assessments.
   (4)  A description of the boundaries of the region.
   (5)  A description of the proposed arrangements for administration of the E-PACE program according to the provisions of this chapter.
   (6)  A statement of the time and place for a public hearing on the proposed E-PACE program as required in paragraph “b”, of this subsection.
   (7)  A statement designating the person or entity charged with administering the E-PACE program and executing assessment agreements.
   b.  Hold a hearing for the public to comment on the proposed E-PACE program as outlined in the resolution of intent. If two or more local governments have contracted to work together on an E-PACE program, then only one local government shall be required to hold a hearing for public comment on a proposed E-PACE program.
   c.  Subsequent to holding a hearing pursuant to paragraph “b”, adopt a resolution establishing the E-PACE program and its terms.
   d.  Adopt a program guidebook consistent with the resolution adopted pursuant to paragraph “c”.
   2.  a.  Subject to the terms of the resolution establishing the E-PACE program as provided in subsection 1, paragraph “c”, of this section, the local government may amend an E-PACE program by resolution.
   b.  If a local government amends an E-PACE program pursuant to paragraph “a”, the local government shall amend its program guidebook related to the E-PACE program accordingly.
   c.  The program administrator may amend the language in the program guidebook that does not conflict with the resolution.
   3.  The enactment of a resolution establishing an E-PACE program and its terms shall allow a local government to place E-PACE assessments on property without any additional action by the local government.
   4.  For the purposes of implementing and administering an E-PACE program, a local government may do either of the following:
   a.  Designate a local government official to administer the E-PACE program.
   b.  Delegate or contract for professional or administrative services necessary to administer the program on a nonexclusive basis.
   5.  A local government is authorized to impose service fees to offset the actual and reasonable costs of administering an E-PACE program. A fee of no more than five hundred dollars may be charged at the time of a property owner’s application. In addition, a one-time servicing fee for approved applications may be calculated as one percent of the total amount financed, not to exceed fifty thousand dollars.
    Sec. 6.  NEW SECTION.  403B.5  Program requirements.
   1.  Each property owner requesting to participate in an E-PACE program shall provide a statement certifying all of the following:
   a.  The property owner is the legal owner of the benefiting property.
   b.  The property owner is not delinquent on any mortgage or property tax payments that affect the benefiting property.
   c.  The property owner is not insolvent or in bankruptcy proceedings.
   d.  The title of the benefiting property is not in dispute.
   2.  The total debt secured by a property participating in a local government’s E-PACE program, including any E-PACE assessments from the E-PACE program, shall not exceed ninety percent of the fair market value of the property as stabilized.
   3.  An assessment taken pursuant to an E-PACE program shall not exceed thirty-five percent of the fair market value of the property.
   4.  A determination of fair market value shall be established by an appraisal completed no more than twenty-four months prior to the time of a property owner’s application to an E-PACE program.
   5.  The term of an E-PACE assessment shall not exceed the life of the longest lived qualifying improvement financed in a project that is the basis for the E-PACE assessment. The standards for determining a qualifying improvement’s useful life shall be contained in the E-PACE program’s program guidebook.
   6.  Prior to approving any qualified projects for an E-PACE program, a local government shall do all of the following:
   a.  Provide a description of each type of project that is eligible for the E-PACE program.
   b.  Identify the person or entity that will be authorized to enter into written contracts on behalf of the local government.
   c.  Provide a statement explaining the manner in which property will be assessed and how assessments will be collected.
   d.  Outline the procedures for billing and collecting E-PACE assessments and remedies for enforcement of a delinquent E-PACE assessment.
    Sec. 7.  NEW SECTION.  403B.6  Application and review.
   1.  A local government participating in an E-PACE program shall establish the form and manner a person may apply to commence a project under the E-PACE program, and shall establish a review process to evaluate project applications for E-PACE program financing. At a minimum, an application shall require an applicant to do all of the following:
   a.  Demonstrate that the project is intended to provide one or more of the following benefits to the public:
   (1)  Energy or water resource conservation.
   (2)  Reduced public health costs or risk.
   (3)  Reduced public emergency response cost or risk.
   b.  For an existing building, provide an analysis by a licensed engineering firm, engineer, or other qualified professional listed in the program guidebook. The author of the analysis shall certify any of the following as applicable:
   (1)  The proposed improvements are intended to result in either more efficient use or conservation of energy or water or the to address safe drinking water.
   (2)  The proposed improvements are intended to improve resilience.
   c.  For new construction, provide certification by a licensed engineering firm, engineer, or other qualified professional listed in the program guidebook stating that the proposed qualified improvements are designed to enable the project to do any of the following:
   (1)  Exceed the current building code’s requirements for energy efficiency, water efficiency, renewable energy, or water quality.
   (2)  Increase resilience for water, wastewater, storms, storm water, wind, or other approved resilience projects, or improve energy storage, microgrids, or reduce land use impacts.
   (3)  Satisfy other requirements listed in the program guidebook to be considered eligible as a qualified improvement as defined under this chapter.
   d.  Furnish a written statement, executed and acknowledged by each holder of a mortgage or deed of trust securing indebtedness on the property to be improved through the E-PACE program, consenting to the E-PACE assessment, and indicating that the E-PACE assessment shall not constitute a default under the mortgage or deed of trust.
   2.  A local government shall do all of the following:
   a.  Establish a process for reviewing and approving applications for financing. The local government may require a capital provider to certify to the local government, in accordance with a process approved by the local government, that the property owner and the project meet the requirements of this chapter and the program guidebook and qualify for financing.
   b.  Execute and record each assessment agreement authorized by the local government’s program administrator.
   c.  Execute and record each notice of assessment created for a qualified project authorized by the local government’s program administrator.
   d.  Execute and record each assignment of an assessment agreement to a capital provider and each notice of assignment of assessment authorized by the local government’s regional administrator, with the county recorder where the property subject to the assessment agreement is located.
   3.  Upon completion of a qualified project, the property owner of the qualified project, or the owner’s legal representative, shall provide written confirmation that the qualified project was properly completed and is operating as intended.
    Sec. 8.  NEW SECTION.  403B.7  Collections pursuant to E-PACE program.
   1.  a.  A local government shall do one of the following in relation to E-PACE assessment liens for a qualified project:
   (1)  Bill, collect, and enforce an E-PACE assessment lien at the same time and in the same manner as a property tax.
   (2)  Assign the rights to bill, collect, and enforce an E-PACE assessment to a capital provider.
   b.  A local government shall not make an assignment pursuant to paragraph “a”, subparagraph (2), after the execution of an assessment agreement relating to the qualified project for which the E-PACE assessment is being imposed.
   c.  A capital provider assigned the rights to bill, collect, and enforce an E-PACE assessment may enforce the E-PACE assessment in the same manner as prescribed in chapter 654 for a mortgage, except assessments not yet due may not be accelerated or eliminated by foreclosure.
   2.  In any action to enforce an E-PACE assessment lien by either a local government or a capital provider, any outstanding and delinquent property taxes must be satisfied prior to the delinquent amounts related to an E-PACE assessment.
    Sec. 9.  NEW SECTION.  403B.8  Limitations of liability.
   A local government, the local government’s employees, and the local government’s officers are not liable at law or equity for actions taken pursuant to this chapter, except in cases of gross negligence, recklessness, or willful misconduct.
    Sec. 10.  NEW SECTION.  403B.9  Financing E-PACE projects.
   Financing for a qualified project may authorize a property owner to do one or more of the following:
   1.  Directly purchase the equipment and materials necessary for the qualified project.
   2.  Contract, including through a lease agreement, power purchase agreement, or other service contract, for the equipment and materials necessary for the qualified project.
    Sec. 11.  NEW SECTION.  403B.10  Required recording.
   1.  A local government that authorizes financing through 
E-PACE assessments pursuant to this chapter shall file a written notice of assessment in the recorder’s office of the county in which the property subject to the E-PACE assessment is located. The notice must contain all of the following:
   a.  The legal description of the property.
   b.  The name of each property owner.
   c.  The amount of the assessment.
   d.  The date on which the assessment was created.
   e.  The principal amount of the assessment.
   f.  The term of the assessment.
   g.  A copy of the assessment agreement.
   h.  A reference to this chapter authorizing the E-PACE assessment on the property.
   2.  A local government shall file and record each executed assignment of an assessment agreement and notice of assignment of assessment.
   3.  A local government may delegate recording responsibilities under subsection 1 for a qualified project to a capital provider if the local government assigned its rights to the E-PACE assignment related to that qualified project to the capital provider.
    Sec. 12.  NEW SECTION.  403B.11  Order of liens.
   1.  Notwithstanding contrary provisions of law:
   a.  An E-PACE assessment shall be considered a first and prior lien against the property on which the E-PACE assessment is imposed from the date on which the notice of assessment is recorded until the assessment and all associated interest and penalties are paid in full.
   b.  An E-PACE assessment shall be considered junior to any local government property tax or ad valorem tax.
   2.  An E-PACE assessment shall run with the land, and any portion of the E-PACE assessment under the assessment agreement that is not yet due shall not be accelerated or eliminated by foreclosure of a property tax lien or other foreclosure.
   3.  A provision of a deed of trust, mortgage, or other agreement between a lienholder and a property owner providing for the acceleration of any payment under the deed of trust, mortgage, or agreement solely as the result of entering into an agreement to finance an E-PACE assessment is unenforceable as to an assessment agreement.
   4.  A lienholder or loan servicer may increase the monthly amount held in escrow for an economic property as required to annually pay an E-PACE assessment related to that property.
    Sec. 13.  NEW SECTION.  403B.12  Governmental entities —— contracts —— joint administration.
   1.  A local government implementing an E-PACE program pursuant to this chapter may contract with another local government in accordance with chapter 28E, including a county assessor, to perform the duties of the local government relating to the billing, collection, enforcement, and remittance of E-PACE assessments imposed pursuant to this chapter.
   2.  A combination of local governments may agree in accordance with chapter 28E to implement an E-PACE program jointly.
   3.  A local government may contract with a third party on a nonexclusive basis.
   4.  If a local government contracts with a third party including but not limited to another local government to administer an E-PACE program, then other third parties shall be allowed to enter into a contract to administer the E-PACE program on the same terms if the contracting local government determines the E-PACE program requires a third-party administrator in the future.
    Sec. 14.  NEW SECTION.  403B.13  Compulsion prohibited.
   A local government that establishes an E-PACE program shall not make the issuance of a permit, license, or other authorization from the local government to a property owner contingent on the person entering into an assessment agreement to repay the financing of a qualified project pursuant to this chapter, or otherwise compel a property owner to enter into an assessment agreement.
    Sec. 15.  NEW SECTION.  403B.14  Full faith and credit.
   The state and each local government shall not use public funds to fund or repay a loan between a capital provider and a property owner. This chapter shall not be construed to pledge, offer, or encumber the full faith and credit of a local government. A local government shall not pledge its full faith and credit for a lien amount through an E-PACE program.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows local governments to establish economic property assessed capital expenditure (E-PACE) programs.
   The bill declares the general assembly’s intent to authorize local governments to establish E-PACE programs to ensure that free and willing owners of agricultural, commercial, industrial, or multifamily residential property may obtain 
low-cost, long-term financing for qualifying improvements.
   The bill declares the general assembly’s finding that the increase in economic development, lower insurance costs, and lower disaster and emergency response costs from implementing E-PACE programs serves as a valid public purpose for permitting local governments to adopt the programs, and that E-PACE programs lead to decreased energy and water costs and encourage water and energy sustainability.
   The bill defines “assessment agreement”, “capital provider”, “E-PACE assessment”, “economic property”, “economic property assessed capital expenditure program” or “E-PACE program”, “financing agreement”, “local government”, “program administrator”, “program guidebook”, “qualified improvement”, and “qualified project”.
   The bill authorizes a local government to establish E-PACE programs.
   The bill allows a local government to impose E-PACE assessments on economic properties to repay the financing of a qualified project on economic property located within the boundaries governed by the local government.
   The bill prohibits a local government from imposing an E-PACE assessment to repay the financing of the purchase or installation of products or devices not permanently affixed to economic property.
   The bill allows a local government to impose an E-PACE assessment only after the local government approves a project application related to the property to be assessed. The E-PACE assessment shall be created through a written contract between the local government and the owner of the property to be assessed.
   The bill allows a local government that establishes an E-PACE program to enter into an assessment agreement with an economic property owner to impose an E-PACE assessment on the owner’s property as the means to repay the owner’s financing of a qualified project on that property.
   The bill allows a local government may administer an E-PACE program or delegate administration of the program to a third party.
   The bill requires, if a local government delegates administration of an E-PACE program to a third party, the contract delegating administrative authority to require the third party to reimburse the local government for costs associated with monitoring the program, imposing E-PACE assessments, and billing and collecting payments on behalf of the third party.
   The bill allows financing to pay for E-PACE assessments to include but not be limited to the cost of materials and labor necessary for the installation or modification of a qualified improvement; permit fees; inspection fees; lender fees; E-PACE program application and administration fees; project development and engineering fees; interest reserves; capitalized interest, in an amount determined by the economic property owner and the third party providing financing for an E-PACE program’s qualified project; and other fees or costs incurred by the property owner incidental or ancillary to the installation, modification, or improvement on a specific or pro rata basis, as determined by the local government.
   The bill provides that an assessment agreement constitutes written notice to the economic property owner subject to the assessment agreement that the owner may be responsible for the payment of any remaining principal balance of the assessment upon the refinance or sale of the property unless the remaining principal balance is assumed by the acquiring property owner. The bill requires each local government to require each economic property owner entering into an assessment agreement to acknowledge, in writing, the notice as part of the execution of the assessment agreement.
   The bill requires a local government, when establishing an E-PACE program, to adopt a resolution of intent that includes a statement that the local government intends to authorize direct financing between property owners and capital providers as the means to finance qualified projects; a statement that the local government intends to authorize E-PACE assessments, entered into voluntarily by a property owner with the local government by means of a written contract, to repay the financing for qualified projects available to property owners; a description of the types of projects that may qualify for E-PACE assessments; a description of the boundaries of the region; a description of the proposed arrangements for administration of the E-PACE program; a statement of the time and place for a public hearing on the proposed E-PACE program; and a statement designating the person or entity charged with administering the E-PACE program and executing assessment agreements.
   The bill requires a local government establishing an E-PACE program to hold a hearing for the public to comment on the proposed E-PACE program as outlined in the resolution of intent. The bill provides that if two or more local governments have contracted to work together on an E-PACE program, then only one local government shall be required to hold a hearing for public comment on a proposed E-PACE program.
   The bill requires a local government establishing an E-PACE program to adopt a resolution establishing the E-PACE program and its terms after holding a public hearing relating to the establishment of the E-PACE program.
   The bill requires a local government to adopt a program guidebook that is consistent with the resolution establishing the E-PACE program.
   The bill allows a local government to amend an E-PACE program by resolution, subject to the terms of the resolution the local government adopted after holding a public hearing relating to the establishment of the E-PACE program. The bill requires a local government that amends an E-PACE program via resolution to amend the program guidebook related to that E-PACE program accordingly. However, the bill allows the program administrator to amend the language in the program guidebook that does not conflict with the resolution.
   The bill allows a resolution establishing an E-PACE program and its terms to allow the local government to place voluntary E-PACE assessments on property without any additional action by the local government.
   For the purposes of implementing and administering an E-PACE program, the bill allows a local government to either designate a local government official to administer the E-PACE program, or delegate or contract for professional or administrative services necessary to administer the E-PACE program on a nonexclusive basis.
   The bill authorizes local governments to impose service fees to offset the actual and reasonable costs of administering an E-PACE program. A one-time fee of no more than $500 may be charged at the time of a property owner’s application. In addition, a servicing fee for approved applications may be calculated as one percent of the total amount financed, not to exceed $50,000.
   The bill requires each property owner requesting to participate in an E-PACE program to provide a statement certifying the property owner is the legal owner of the benefiting property, the property owner is not delinquent on any mortgage or property tax payments that affect the benefiting property, the property owner is not insolvent or in bankruptcy proceedings, and the title of the benefiting property is not in dispute.
   The bill prohibits the total debt secured by a property participating in a local government’s E-PACE program, including any E-PACE assessments from the E-PACE program, from exceeding 90 percent of the fair market value of the property as stabilized.
   The bill prohibits an assessment taken pursuant to an E-PACE program from exceeding 35 percent of the fair market value of the property.
   The bill requires a determination of fair market value to be established by an appraisal completed no more than 24 months prior to the time of a property owner’s application to an E-PACE program.
   The bill prohibits the term of an E-PACE assessment from exceeding the life of the longest lived qualifying improvement financed in a project that is the basis for the E-PACE assessment. The bill requires the standards for determining a qualifying improvement’s useful life to be contained in the E-PACE program’s program guidebook.
   The bill requires a local government, prior to approving any qualified projects for an E-PACE program, to provide a description of each type of project that is eligible for the E-PACE program, identify the person or entity that will be authorized to enter into written contracts on behalf of the local government, provide a statement explaining the manner in which property will be assessed and how assessments will be collected, and outline the procedures for billing and collecting E-PACE assessments and remedies for enforcement of a delinquent E-PACE assessment.
   The bill requires a local government participating in an E-PACE program to establish the form and manner a person may apply to commence a project under the E-PACE program, and to establish a review process to evaluate project applications for E-PACE program financing. The bill lists several requirements for E-PACE program applicants that an E-PACE program application must include.
   The bill requires a local government to establish a process for reviewing and approving applications for financing. The local government may require a capital provider to certify to the local government, in accordance with a process approved by the local government, that the property owner and the project meet statutory requirements and program guidebook requirements and qualify for financing.
   The bill requires a local government to execute and record each assessment agreement authorized by the local government’s program administrator.
   The bill requires a local government to execute and record each notice of assessment created for a qualified project authorized by the local government’s program administrator.
   The bill requires a local government to execute and record each assignment of an assessment agreement to a capital provider and each notice of assignment of assessment authorized by the local government’s regional administrator, with the county recorder where the property subject to the assessment agreement is located.
   The bill requires, upon completion of a qualified project, the property owner who applied for the qualified project, or the owner’s legal representative, to provide written confirmation that the qualified project was properly completed and is operating as intended.
   The bill requires a local government, in relation to E-PACE assessment liens for a qualified project, to either bill, collect, and enforce an E-PACE assessment lien at the same time and in the same manner as a property tax, or assign the rights to bill, collect, and enforce an E-PACE assessment to a capital provider.
   The bill prohibits a local government from making an assignment of the rights to bill, collect, and enforce an E-PACE assessment after the execution of an assessment agreement relating to the qualified project for which the E-PACE assessment is being imposed.
   The bill allows a capital provider who was assigned the rights to bill, collect, and enforce an E-PACE assessment to enforce the E-PACE assessment in the same manner as prescribed in Code chapter 654 (foreclosure of real estate mortgages) for a mortgage, except assessments not yet due may not be accelerated or eliminated by foreclosure.
   The bill requires any outstanding and delinquent property taxes to be satisfied prior to the delinquent amounts related to an E-PACE assessment.
   The bill limits a local government’s, the local government’s employees’, and the local government’s officers’ liability at law or equity for actions taken pursuant to E-PACE program statutes, except in cases of gross negligence, recklessness, or willful misconduct.
   The bill allows financing for a qualified project to authorize a property owner to directly purchase the equipment and materials necessary for the qualified project; contract, including through a lease agreement, power purchase agreement, or other service contract, for the equipment and materials necessary for the qualified project; or both.
   The bill requires a local government that authorizes financing through E-PACE assessments to file a written notice of assessment in the recorder’s office of the county in which the property subject to the E-PACE assessment is located. The bill requires the notice to contain the legal description of the property, the name of each property owner, the amount of the assessment, the date on which the assessment was created, the principal amount of the assessment, the term of the assessment, a copy of the assessment agreement, and a reference to the Code chapter authorizing the E-PACE assessment on the property.
   The bill requires a local government to file and record each executed assignment of an assessment agreement and notice of assignment of assessment.
   The bill allows a local government to delegate recording responsibilities for a qualified project to a capital provider if the local government assigned its rights to the E-PACE assignment related to that qualified project to the capital provider.
   The bill requires an E-PACE assessment to be considered a first and prior lien against the property on which the E-PACE assessment is imposed from the date on which the notice of assessment is recorded until the assessment and all associated interest and penalties are paid in full.
   The bill requires an E-PACE assessment to be considered junior to any local government property tax or ad valorem tax.
   The bill makes an E-PACE assessment run with the land, and prohibits any portion of the E-PACE assessment under the assessment agreement that is not yet due shall not be accelerated or eliminated by foreclosure of a property tax lien or other foreclosure.
   The bill makes any provision of a deed of trust, mortgage, or other agreement between a lienholder and a property owner providing for the acceleration of any payment under the deed of trust, mortgage, or agreement solely as the result of entering into an agreement to finance an E-PACE assessment unenforceable as to an assessment agreement.
   The bill allows a lienholder or loan servicer to increase the monthly amount held in escrow for an economic property as required to annually pay the E-PACE assessment related to that property.
   The bill allows a local government implementing an E-PACE program pursuant to this chapter may contract with another local government in accordance with Code chapter 28E (joint exercise of governmental powers), including a county assessor, to perform the duties of the local government relating to the billing, collection, enforcement, and remittance of E-PACE assessments.
   The bill allows a combination of local governments to agree in accordance with Code chapter 28E to implement an E-PACE program jointly.
   The bill allows a local government to contract with a third party on a nonexclusive basis.
   If a local government contracts with a third party including but not limited to another local government to administer an E-PACE program, then the bill allows other third parties to enter into a contract to administer the E-PACE program on the same terms if the contracting local government determines it requires a third-party administrator in the future.
   The bill prohibits a local government that establishes an E-PACE program from making the issuance of a permit, license, or other authorization from the local government to a property owner contingent on the person entering into an assessment agreement to repay the financing of a qualified project, or otherwise compel a property owner to enter into an assessment agreement.
   The bill prohibits the state and each local government from using public funds to fund or repay a loan between a capital provider and a property owner. The bill prohibits provisions being enacted in the bill from being construed to pledge, offer, or encumber the full faith and credit of a local government. The bill prohibits a local government from pledging its full faith and credit for a lien amount through an E-PACE program.