HF 1377

2nd Engrossment - 90th Legislature (2017 - 2018) Posted on 03/20/2017 04:23pm

A bill for an act
relating to energy; establishing a stakeholder group to develop recommendations
for consumer protections relating to residential PACE financing; suspending
authorization for residential PACE financing; requiring a report; amending
Minnesota Statutes 2016, section 216C.435, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 216C.435, is amended by adding a subdivision
to read:

new text begin Subd. 7a. new text end

new text begin Multifamily residential dwelling. new text end

new text begin "Multifamily residential dwelling" means
a residential dwelling containing five or more units intended for use as a residence by tenants
or lessees of the owner.
new text end

Sec. 2. new text begin CONSUMER PROTECTIONS FOR RESIDENTIAL PACE FINANCING
PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of commerce shall convene a group
of interested stakeholders to develop recommendations for consumer protection legislation
for any energy improvements financing program implemented under Minnesota Statutes,
sections 216C.435 and 216C.436, for single-family or multifamily residential dwellings.
For purposes of this section, "residential PACE" or "PACE" means energy improvement
financing programs for single-family or multifamily residential dwellings authorized under
Minnesota Statutes, sections 216C.435 and 216C.436.
new text end

new text begin Subd. 2. new text end

new text begin Stakeholder group. new text end

new text begin Membership of the group shall include, but is not limited
to, representatives from each of the following:
new text end

new text begin (1) the Minnesota Association of Realtors;
new text end

new text begin (2) the Center for Energy and Environment;
new text end

new text begin (3) the Minnesota Bankers Association;
new text end

new text begin (4) the Legal Services Advocacy Project;
new text end

new text begin (5) the Minnesota Credit Union Network;
new text end

new text begin (6) the Minnesota Solar Energy Industry Association;
new text end

new text begin (7) the St. Paul Port Authority;
new text end

new text begin (8) the League of Minnesota Cities;
new text end

new text begin (9) the Association of Minnesota Counties; and
new text end

new text begin (10) an organization with experience implementing residential PACE programs in other
states.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin In consultation with the stakeholder group, the commissioner must
develop recommendations, including draft legislation, to:
new text end

new text begin (1) address concerns regarding the possible constraints on free alienation of residential
property caused by existence and amount of the PACE liens;
new text end

new text begin (2) reduce and minimize any point-of-sale confusion in transactions involving
PACE-encumbered homes;
new text end

new text begin (3) ensure conspicuous and meaningful disclosure of, among other things:
new text end

new text begin (i) all costs and fees of a residential PACE loan; and
new text end

new text begin (ii) the risks, such as foreclosure and higher costs, that may be associated with residential
PACE loans relative to other financing mechanisms;
new text end

new text begin (4) ensure that the ability to repay standard uses commonly accepted underwriting
principles;
new text end

new text begin (5) ensure that consumer provisions required of and protections that apply to conventional
loans and other financing options, including but not limited to the Truth in Lending Act and
the Real Estate Settlement Procedures Act, are required of and apply to PACE financing;
new text end

new text begin (6) address any unique protections necessary for elderly, low-income homeowners and
other financially vulnerable homeowners;
new text end

new text begin (7) establish criteria for ensuring the cost-effectiveness of PACE-enabled clean energy
improvements; and
new text end

new text begin (8) address any other issues the stakeholder group identifies that are necessary to protect
consumers.
new text end

new text begin Subd. 4. new text end

new text begin Report to legislature. new text end

new text begin By January 15, 2018, the commissioner shall submit a
report detailing the stakeholder group's findings and recommendations to the chairs and
ranking minority members of the senate and house of representatives committees with
jurisdiction over energy and consumer protection policy and finance. The report must include
draft legislation to implement the recommendations of the stakeholder group.
new text end

new text begin Subd. 5. new text end

new text begin Suspension of residential PACE. new text end

new text begin Until legislation is enacted establishing
consumer protections that addresses, but is not limited to, the concerns identified in
subdivision 3, no programs for the financing of energy improvements on a single-family
residential property dwelling under Minnesota Statutes, sections 216C.435 and 216C.436,
may be operated after the effective date of this act.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end