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SECOND REGULAR SESSION
HOUSE BILL NO. 21 19
103RD GENERAL ASSEMBL Y
INTRODUCED BY REPRESENT A TIVE OWEN.
4222H.01I JOSEPH ENGLER, Chief Clerk
AN ACT
T o 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 ener gy
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2 RSMo, are repealed and six new sections enacted in lieu thereof, to be known as sections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 Ener gy 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 ener gy
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 ener gy
8 ef ficiency improvement or a renewable ener gy improvement;
9 (2) "Authority", the state environmental improvement and ener gy 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 ener gy development board;
13 (4) "Clean energ y conduit financing", the financing of energy effi ciency
1 4 improvements or renewable ener gy improvements for a single parcel of property or a
EXPLANA TION — 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.
15 unified development consisting of multiple adjoining parcels of property under section
16 67.2825;
17 (5) "Clean ener gy 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 ef ficiency improvement", any acquisition, installation, or modification on
24 or of publicly or privately owned property designed to reduce the ener gy 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 ener gy consumption;
31 (c) Automatic ener gy 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 ener gy ef ficiency 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 ener gy
42 development board to administer the P ACE program, but this term does not include an
43 employee of a county or municipal government assigned to a clean ener gy development board
44 or a public employee employed by a clean ener gy development board who is paid from
45 appropriated general tax revenues;
46 (1 1) "Project", any energ y ef ficiency improvement or renewable ener gy
4 7 improvement;
48 (12) "Property assessed clean ener gy local finance fund", a fund that may be
49 established by the authority for the purpose of making loans to clean ener gy development
50 boards to establish and maintain property assessed clean ener gy programs;
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51 (13) "Property assessed clean ener gy program" or "P ACE program", a program
52 established by a clean ener gy development board to finance ener gy efficien cy improvements
53 or renewable ener gy improvements under section 67.2820;
54 (14) "Renewable ener gy improvement", any acquisition and installation of a fixture,
55 product, system, device, or combination thereof on publicly or privately owned property that
56 produces ener gy 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 pr oject, or P ACE pr ogram enter ed into, undertaken, or established for any res idential
64 pr operty .
67.2810. 1. One or more municipalities may form clean ener gy development boards
2 for the purpose of exercising the powers described in sections 67.2800 to 67.2840. Each
3 clean ener gy development board shall consist of not less than three members, as set forth in
4 the ordinance or order establishing the clean ener gy development board. Members shall serve
5 terms as set forth in the ordinance or order establishing the clean ener gy development board
6 and shall be appointed:
7 (1) If only one municipality is participating in the clean ener gy 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 ener gy development board shall be a political subdivision of the state and
13 shall have all powers necessary and convenient to carry out and ef fectuate the provisions of
14 sections 67.2800 to 67.2840, including but not limited to the following:
15 (1) T o adopt, amend, and repeal bylaws, which are not inconsistent with sections
16 67.2800 to 67.2840;
17 (2) T o adopt an of ficial seal;
18 (3) T o sue and be sued;
19 (4) T o make and enter into contracts and other instruments with public and private
20 entities;
21 (5) T o 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 fr om other states or their municipalities and political subdivisions
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24 to serve a common purpose of pr oviding financing support or cr edit enhancement for
25 any project ;
26 (6) T o employ or contract for such managerial, legal, technical, clerical, accounting,
27 or other assistance it deems advisable;
28 (7) T o 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) T o borrow money from any public or private source and issue bonds and provide
31 security for the repayment of the same;
32 (9) T o finance a project under an assessment contract;
33 (10) T o collect reasonable fees and char ges in connection with making and servicing
34 assessment contracts and in connection with any technical, consultative, or project assistance
35 services of fered;
36 (1 1) T o 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) T o take whatever actions necessary to participate in and administer a clean
42 ener gy conduit financing or a property assessed clean ener gy program.
43 3. No later than July first of each year , the clean ener gy development board shall file
44 with each municipality that participated in the formation of the clean ener gy 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 ener gy 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 ener gy development board administrative costs incurred
54 during the preceding calendar year;
55 (4) The estimated cumulative ener gy savings resulting from all ener gy ef ficiency
56 improvements financed during the preceding calendar year; and
57 (5) The estimated cumulative ener gy produced by all renewable energy
5 8 improvements financed during the preceding calendar year .
59 4. No lawsuit to set aside the formation of a clean ener gy development board or to
60 otherwise question the proceedings related thereto shall be brought after the expiration of
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61 sixty days from the ef fective date of the ordinance or order creating the clean ener gy
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 ener gy 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 ener gy 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 suff icient 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 ener gy 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 ener gy consumption or create ener gy from renewable
10 sources;
11 (2) A mechanism for:
12 (a) V erifying the final costs of the project upon its completion; and
13 (b) Ensuring that any amounts advanced or otherwise paid by the clean ener gy
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 ener gy 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 ener gy
29 audits and inspections, or portion thereof financed through the participation in a property
30 assessed clean ener gy program or clean ener gy conduit financing, including the costs of any
31 audits or inspections required by the clean energy development board, plus such
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32 administration fees, interest, and other financing costs reasonably required by the clean
33 ener gy development board.
34 4. The clean ener gy 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 ener gy 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 ener gy 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 ener gy development board that contracts for outside administrative
50 services to provide financing origination for a project shall of fer 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 ener gy 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 ener gy
55 development board.
56 7. Except as otherwise pr ovided in section 67.2840, sections 67.2816, 67.2817,
57 67.2818, and 67.2819 shall apply only to P ACE programs for projects to improve residential
58 properties of four or fewer units. Notwithstanding any provision of law to the contrary , any
59 clean ener gy 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 P ACE
63 programs and commercial P ACE assessment contracts of any clean ener gy development
64 board engaged in both commercial and residential property programs. Notwithstanding any
65 provision of law to the contrary , any clean ener gy 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.
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67.2817. 1. Notwithstanding any other contractual agreement to the contrary , each
2 assessment contract shall be reviewed, approved, and executed by the clean ener gy
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 ener gy development board verifies that the following
7 criteria are satisfied:
8 (1) The P ACE assessments are assessed in equal annual installments;
9 (2) The P ACE assessment may be paid in full at any time without prepayment
10 penalty . The pay-of f letter shall specify the amount of any fee or char ge 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-of f 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 ener gy 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 ener gy 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 ener gy
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
3 2 or ganizations;
33 (9) The property owner is current on all mortgage debt on the subject property and
34 has no more than one late payment during the twelve months immediately preceding the
35 application date on any mortgage debt; and
36 (10) The clean ener gy development board shall not enter into an assessment contract
37 or levy or collect a special assessment for a project without making a finding that there are
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38 suf ficient resources to complete the project and that the estimated economic benefit expected
39 from the project during the financing period is equal to or greater than the cost of the project.
40 3. Any assessment contract for a project that, combined with any existing and
41 outstanding indebtedness secured by the benefitted property , results in a loan-to-value ratio
42 between eighty percent and ninety-seven percent of the true value in money , as determined by
43 the assessor pursuant to chapter 137, plus ten percent of such amount, of the benefitted
44 property prior to the project as determined by reference to the assessment records for tax
45 purposes for the most recent completed assessment by the county , or city not within a county ,
46 shall include provision of an insurance policy providing coverage for any remaining cost of
47 fulfilling the assessment contract, including any accumulated interest, in the event the
48 property is foreclosed upon, if such product exists. Such insurance policy shall run with the
49 land in the same manner as the other obligations set forth in the assessment contract.
50 4. The property owner executing the P ACE assessment contract shall have a three-day
51 right to cancel the qualifying improvements proposed for financing under the P ACE
52 assessment contract. The three-day right to cancel shall expire at midnight of the third
53 business day after a property owner signs the assessment contract. The clean ener gy
54 development board shall be required to provide a printed form that is presented to the
55 property owner no later than the time of signing of the assessment contract detailing the
56 property owner's right to cancel. An electronic form may be provided if the owner consents
57 electronically to receiving an electronic form.
58 5. Prior to the execution of an assessment contract, the clean ener gy development
59 board shall advise the property owner in writing that any delinquent assessment shall be a lien
60 on the property subject to the assessment contract and that the obligations under the P ACE
61 assessment contract continue as an obligation against the improved property if the property
62 owner sells or refinances the property and that a purchaser or lender may require that before
63 the owner may sell or refinance the property that the owner may be required to pay the
64 assessment contract in full.
65 6. Prior to the execution of an assessment contract, the clean ener gy development
66 board shall advise the property owner in writing that if the property owner pays his or her
67 property taxes and special assessments via a lender or loan servicer's escrow program, the
68 special assessment will cause the owner's monthly escrow requirements to increase and
69 increase the owner's total monthly payment to the lender or the loan servicer . The clean
70 ener gy development board shall further advise the property owner that if the special
71 assessment results in an escrow shortage that the owner will be required to pay the shortage in
72 a lump-sum payment or catch up the shortage over twelve months.
73 7. The clean ener gy development board, within three days of entering an assessment
74 contract, shall provide any holder of a first mortgage loan a copy of the assessment contract
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75 and a statement that includes a brief description of the project, the cost of the project, the
76 annual assessment that will be levied, and the number of annual assessments. T ransmittal
77 shall be by United States mail to the holder of the first mortgage loan of record.
78 8. The clean ener gy development board shall maintain a public website with current
79 information about the P ACE program as the board deems appropriate to inform consumers
80 regarding the P ACE program. The website shall list approved contractors for the P ACE
81 program. The website shall disclose the process for property owners or their successors to
82 request information about the assessment contract, the status of the assessment contract, and
83 for all questions including contract information to obtain a payoff amount for the release of an
84 assessment contract.
85 9. The clean ener gy development board, its agents, contractor , or other third party
86 shall not make any representation as to the income tax deductibility of an assessment.
67.2830. 1. A clean ener gy development board may issue bonds payable from special
2 assessment revenues generated by assessment contracts and any other revenues pledged
3 thereto. The bonds shall be authorized by resolution of the clean ener gy development board,
4 shall bear such date or dates, and shall mature at such time or times as the resolution shall
5 specify , provided that the term of any bonds issued for a clean ener gy conduit financing shall
6 not exceed [ twenty ] thirty years. The bonds shall be in such denomination, bear interest at
7 such rate, be in such form, be issued in such manner , be payable in such place or places, and
8 be subject to redemption as such resolution may provide. Notwithstanding any provision to
9 the contrary under this section, issuance of the bonds shall conform to the requirements of
10 subsection 1 of section 108.170.
11 2. Any bonds issued under this section shall not constitute an indebtedness of the state
12 or any municipality . Neither the state nor any municipality shall be liable on such bonds, and
13 the form of such bonds shall contain a statement to such ef fect.
67.2840. 1. Sections 67.2816, 67.2817, 67.2818, and 67.2819 shall be ef fective and
2 apply only to the residential P ACE programs of clean ener gy development boards and
3 participating municipalities [ after ] fr om January 1, 2022 , to August 28, 2026. Beginning
4 August 28, 2026, all res idential pr operties shall be exempt fr om the pro visions of
5 sections 67.2816 to 67.2819 and no assessment contract, pro ject, or P ACE pr ogram shall
6 be enter ed into, undertaken, or established for any res idential pro perty .
7 2. Sections 67.2816, 67.2817, 67.2818, and 67.2819 shall be effectiv e and apply only
8 to residential P ACE assessment contracts entered into after January 1, 2022 , but before
9 August 28, 2026 .
✔
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