SF 1088

2nd Engrossment - 90th Legislature (2017 - 2018) Posted on 03/15/2017 08:47am

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 RESIDENTIAL PACE CONSUMER PROTECTION LEGISLATION TASK
FORCE PROGRAMS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The Residential PACE Consumer Protection Legislation
Task Force shall develop recommendations for consumer protection legislation for any
energy improvements financing program implemented under Minnesota Statutes, sections
216C.435 to 216C.436, for single-family residential dwellings. For purposes of this section,
"residential PACE" or "PACE" means energy improvement financing programs for
single-family residential dwellings authorized under Minnesota Statutes, sections 216C.435
to 216C.436.
new text end

new text begin Subd. 2. new text end

new text begin Task force. new text end

new text begin (a) The task force consists of 16 members as follows:
new text end

new text begin (1) one member appointed by the Minnesota Association of Realtors;
new text end

new text begin (2) one member appointed by the Center for Energy and Environment;
new text end

new text begin (3) one member appointed by the Minnesota Bankers Association;
new text end

new text begin (4) one member appointed by the Legal Services Advocacy Project;
new text end

new text begin (5) one member appointed by the Minnesota Credit Union Network;
new text end

new text begin (6) one member appointed by the Minnesota Solar Energy Industry Association;
new text end

new text begin (7) one member appointed by the St. Paul Port Authority;
new text end

new text begin (8) one member appointed by the League of Minnesota Cities;
new text end

new text begin (9) one member appointed by the Association of Minnesota Counties;
new text end

new text begin (10) one member appointed by AARP Minnesota;
new text end

new text begin (11) one member appointed by Fresh Energy;
new text end

new text begin (12) one member appointed by the Citizens Utility Board of Minnesota;
new text end

new text begin (13) one member appointed by Clean Energy Economy Minnesota;
new text end

new text begin (14) one member appointed by the Minnesota Land Title Association;
new text end

new text begin (15) one member appointed by an organization with experience implementing residential
PACE programs in other states; and
new text end

new text begin (16) the commissioner of commerce or a designee.
new text end

new text begin (b) Any public member can designate a substitute from the same organization to replace
that member at a meeting of the task force.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The task force must develop recommendations 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 task force identifies that are necessary to protect
consumers.
new text end

new text begin Subd. 4. new text end

new text begin Administrative support. new text end

new text begin The commissioner of commerce shall provide
administrative support and meeting space for the task force.
new text end

new text begin Subd. 5. new text end

new text begin Compensation. new text end

new text begin Members serve without compensation and shall not be
reimbursed for expenses.
new text end

new text begin Subd. 6. new text end

new text begin Chair. new text end

new text begin The commissioner of commerce or the commissioner's designee shall
serve as chair.
new text end

new text begin Subd. 7. new text end

new text begin Meetings. new text end

new text begin The task force shall meet regularly, at the call of the chair. Meetings
of the task force are subject to Minnesota Statutes, chapter 13D.
new text end

new text begin Subd. 8. new text end

new text begin Appointments; first meeting. new text end

new text begin Appointments must be made by June 1, 2017.
The commissioner of commerce must convene the first meeting by July 15, 2017.
new text end

new text begin Subd. 9. 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 task force'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 any draft
legislation necessary to implement the recommendations of the task force.
new text end

new text begin Subd. 10. 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 to 216C.436,
may be operated after the effective date of this section.
new text end

new text begin Subd. 11. new text end

new text begin Expiration. new text end

new text begin The task force shall expire January 15, 2018, or after submitting
the report required in this section, whichever is earlier.
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