Florida Senate - 2023 SB 950
By Senator Rodriguez
40-00253A-23 2023950__
1 A bill to be entitled
2 An act relating to Resiliency Energy Environment
3 Florida programs; amending s. 163.08, F.S.; defining
4 terms; providing that a property owner may apply to a
5 Resiliency Energy Environment Florida (REEF) program
6 for funding to finance a qualifying improvement and
7 may enter into an assessment financing agreement with
8 a local government; providing that REEF program costs
9 may be collected as non-ad valorem assessments;
10 authorizing a local government to enter into an
11 agreement with a program administrator to administer a
12 REEF program on the local government’s behalf;
13 revising and specifying public recording requirements
14 for assessment financing agreements and notices of
15 lien; revising requirements that apply to local
16 governments or program administrators in determining
17 eligibility for assessment financing; revising
18 requirements for qualifying improvements; revising the
19 calculation of non-ad valorem assessment limits;
20 providing construction; specifying underwriting,
21 financing estimate, disclosure, and confirmation
22 requirements for program administrators relating to
23 residential real property; authorizing a residential
24 real property owner, under certain circumstances and
25 within a certain timeframe, to cancel an assessment
26 financing agreement without financial penalty;
27 specifying limitations on assessment financing
28 agreement terms for residential real property;
29 prohibiting certain financing terms for residential
30 real property; specifying requirements for, and
31 certain prohibited acts by, program administrators
32 relating to assessment financing agreements and
33 contractors for qualifying improvements to residential
34 real property; specifying additional annual reporting
35 requirements for program administrators; providing
36 construction and applicability; conforming provisions
37 to changes made by the act; providing an effective
38 date.
39
40 Be It Enacted by the Legislature of the State of Florida:
41
42 Section 1. Subsection (16) of section 163.08, Florida
43 Statutes, is redesignated as subsection (32), a new subsection
44 (16) and subsections (17) through (31) are added to that
45 section, and subsections (1), (2), (4), (6) through (10), and
46 (12), (13), and (14) are amended, to read:
47 163.08 Supplemental authority for improvements to real
48 property.—
49 (1)(a) In chapter 2008-227, Laws of Florida, the
50 Legislature amended the energy goal of the state comprehensive
51 plan to provide, in part, that the state shall reduce its energy
52 requirements through enhanced conservation and efficiency
53 measures in all end-use sectors and reduce atmospheric carbon
54 dioxide by promoting an increased use of renewable energy
55 resources. That act also declared it the public policy of the
56 state to play a leading role in developing and instituting
57 energy management programs that promote energy conservation,
58 energy security, and the reduction of greenhouse gases. In
59 addition to establishing policies to promote the use of
60 renewable energy, the Legislature provided for a schedule of
61 increases in energy performance of buildings subject to the
62 Florida Energy Efficiency Code for Building Construction. In
63 chapter 2008-191, Laws of Florida, the Legislature adopted new
64 energy conservation and greenhouse gas reduction comprehensive
65 planning requirements for local governments. In the 2008 general
66 election, the voters of this state approved a constitutional
67 amendment authorizing the Legislature, by general law, to
68 prohibit consideration of any change or improvement made for the
69 purpose of improving a property’s resistance to wind damage or
70 the installation of a renewable energy source device in the
71 determination of the assessed value of residential real
72 property.
73 (b) The Legislature finds that all energy-consuming
74 improved properties that are not using energy conservation
75 strategies contribute to the burden affecting all improved
76 property resulting from fossil fuel energy production. Improved
77 property that has been retrofitted with energy-related
78 qualifying improvements receives the special benefit of
79 alleviating the property’s burden from energy consumption. All
80 improved properties not protected from wind damage by wind
81 resistance qualifying improvements contribute to the burden
82 affecting all improved property resulting from potential wind
83 damage. Improved property that has been retrofitted with wind
84 resistance qualifying improvements receives the special benefit
85 of reducing the property’s burden from potential wind damage.
86 Further, the installation and operation of qualifying
87 improvements not only benefit the affected properties for which
88 the improvements are made, but also assist in fulfilling the
89 goals of the state’s energy and hurricane mitigation policies.
90 (c) In order to make qualifying improvements more
91 affordable and assist property owners who wish to undertake such
92 improvements, the Legislature finds that there is a compelling
93 state interest in enabling property owners to voluntarily
94 finance such improvements with local government assistance.
95 (d)(c) The Legislature determines that the actions
96 authorized under this section, including, but not limited to,
97 the financing of qualifying improvements through the execution
98 of assessment financing agreements and the related imposition of
99 voluntary assessments, are reasonable and necessary to serve and
100 achieve a compelling state interest and are necessary for the
101 prosperity and welfare of the state and its property owners and
102 inhabitants.
103 (2) As used in this section, the term:
104 (a) “Assessment financing agreement” means the financing
105 agreement, under a REEF program, between a local government and
106 a property owner for the acquisition or installation of
107 qualifying improvements.
108 (b)(a) “Local government” means a county, a municipality, a
109 dependent special district as defined in s. 189.012, or a
110 separate legal entity created pursuant to s. 163.01(7).
111 (c) “Non-ad valorem assessment” or “assessment” has the
112 same meaning as the term “non-ad valorem assessment” as defined
113 in s. 197.3632(1)(d).
114 (d) “Nonresidential real property” means any property not
115 defined as residential real property and which will be or has
116 been improved by a qualifying improvement. The term includes
117 multifamily residential property composed of five or more
118 dwelling units.
119 (e) “Program administrator” means an entity, including, but
120 not limited to, a for-profit or not-for-profit entity, with
121 which a local government may contract to administer a REEF
122 program.
123 (f)(b) “Qualifying improvement” includes any:
124 1. Energy conservation and efficiency improvement, which is
125 a measure to reduce consumption through conservation or a more
126 efficient use of electricity, natural gas, propane, or other
127 forms of energy on the property, including, but not limited to,
128 air sealing; installation of insulation; installation of energy
129 efficient heating, cooling, or ventilation systems; building
130 modifications to increase the use of daylight; replacement of
131 windows; installation of energy controls or energy recovery
132 systems; installation of electric vehicle charging equipment;
133 and installation of efficient lighting equipment.
134 2. Renewable energy improvement, which is the installation
135 of any system in which the electrical, mechanical, or thermal
136 energy is produced from a method that uses one or more of the
137 following fuels or energy sources: hydrogen, solar energy,
138 geothermal energy, bioenergy, and wind energy.
139 3. Wind resistance improvement, which includes, but is not
140 limited to:
141 a. Improving the strength of the roof deck attachment;
142 b. Creating a secondary water barrier to prevent water
143 intrusion;
144 c. Installing wind-resistant shingles;
145 d. Installing gable-end bracing;
146 e. Reinforcing roof-to-wall connections;
147 f. Installing storm shutters; or
148 g. Installing opening protections.
149 (g) “Residential real property” means a residential real
150 property composed of four or fewer dwelling units which has been
151 or will be improved by a qualifying improvement.
152 (h) “Resiliency Energy Environment Florida (REEF) program”
153 means a program established by a local government, alone or in
154 partnership with other local governments or a program
155 administrator, to finance qualifying improvements on
156 nonresidential real property or residential real property.
157 (4) Subject to local government ordinance or resolution, a
158 property owner may apply to the REEF program local government
159 for funding to finance a qualifying improvement and enter into
160 an assessment a financing agreement with the local government.
161 Costs incurred by the REEF program local government for such
162 purpose may be collected as a non-ad valorem assessment. A non
163 ad valorem assessment shall be collected pursuant to s. 197.3632
164 and, notwithstanding s. 197.3632(8)(a), shall not be subject to
165 discount for early payment. However, the notice and adoption
166 requirements of s. 197.3632(4) do not apply if this section is
167 used and complied with, and the intent resolution, publication
168 of notice, and mailed notices to the property appraiser, tax
169 collector, and Department of Revenue required by s.
170 197.3632(3)(a) may be provided on or before August 15 in
171 conjunction with any non-ad valorem assessment authorized by
172 this section, if the property appraiser, tax collector, and
173 local government agree.
174 (6) A local government may enter into an agreement with a
175 program administrator to administer a REEF program on behalf of
176 the local government A qualifying improvement program may be
177 administered by a for-profit entity or a not-for-profit
178 organization on behalf of and at the discretion of the local
179 government.
180 (7) A local government may incur debt for the purpose of
181 providing financing for qualifying such improvements, which debt
182 is payable from revenues received from the improved property, or
183 from any other available revenue source authorized under this
184 section or by other law.
185 (8) A local government may enter into an assessment a
186 financing agreement to finance or refinance a qualifying
187 improvement only with the record owner of the affected property.
188 Any assessment financing agreement entered into pursuant to this
189 section or a summary memorandum of such agreement shall be
190 submitted for recording recorded in the public records of the
191 county within which the property is located by the sponsoring
192 unit of local government within 5 days after execution of the
193 agreement. The recorded agreement shall provide constructive
194 notice that the assessment to be levied on the property
195 constitutes a lien of equal dignity to county taxes and
196 assessments from the date of recordation. A notice of lien for
197 the full amount of the financing may be recorded in the public
198 records of the county where the property is located. Such lien
199 shall not be enforceable in a manner that results in the
200 acceleration of the remaining nondelinquent unpaid balance under
201 the assessment financing agreement.
202 (9) Before entering into an assessment a financing
203 agreement, the local government, or the program administrator
204 acting on its behalf, shall reasonably determine that all of the
205 following conditions are met:
206 (a) All property taxes and any other assessments levied on
207 the same bill as property taxes are current paid and have not
208 been delinquent for more than 30 days for the preceding 3 years
209 or the property owner’s period of ownership, whichever is less.;
210 (b) that There are no involuntary liens greater than
211 $1,000, including, but not limited to, construction liens on the
212 property.;
213 (c) that No notices of default or other evidence of
214 property-based debt delinquency have been recorded and not
215 released during the preceding 3 years or the property owner’s
216 period of ownership, whichever is less.;
217 (d) The local government or program administrator has asked
218 the property owner whether any other assessments under this
219 section have been recorded or have been funded and not yet
220 recorded on the property. The failure of a property owner to
221 disclose information set forth in this paragraph does not
222 invalidate an assessment financing agreement or any obligation
223 thereunder, even if the total financed amount of the qualifying
224 improvements exceeds the amount that would otherwise be
225 authorized under paragraph (12)(a).
226 (e) and that The property owner is current on all mortgage
227 debt on the property.
228 (f) The residential property is not subject to an existing
229 home equity conversion mortgage or reverse mortgage product.
230 This paragraph does not apply to nonresidential real property.
231 (g) The property is not currently a residential property
232 gifted to a homeowner for free by a nonprofit entity as may be
233 disclosed by the property owner. The failure of a property owner
234 to disclose information set forth in this paragraph does not
235 invalidate an assessment financing agreement or any obligation
236 thereunder. This paragraph does not apply to nonresidential real
237 property.
238 (10) Before final funding may be provided, a qualifying
239 improvement must shall be affixed or planned to be affixed to a
240 nonresidential real property or residential real building or
241 facility that is part of the property and constitutes shall
242 constitute an improvement to that property the building or
243 facility or a fixture attached to the building or facility. An
244 assessment financing agreement may between a local government
245 and a qualifying property owner may not cover qualifying wind
246 resistance improvements on nonresidential real property under
247 new construction or residential real property in buildings or
248 facilities under new construction or construction for which a
249 certificate of occupancy or similar evidence of substantial
250 completion of new construction or improvement has not been
251 issued.
252 (12)(a) Without the consent of the holders or loan
253 servicers of any mortgage encumbering or otherwise secured by
254 the property, the total amount of any non-ad valorem assessment
255 for a property under this section may not exceed 20 percent of
256 the fair market just value of the real property as determined by
257 the county property appraiser. The combined mortgage-related
258 debt and total amount of any non-ad valorem assessments funded
259 under this section for residential real property may not exceed
260 100 percent of the fair market value of the residential real
261 property. However, the failure of a property owner to disclose
262 information set forth in paragraph (9)(d) does not invalidate an
263 assessment financing agreement or any obligation thereunder,
264 even if the total financed amount of the qualifying improvements
265 exceeds the amount that would otherwise be authorized under this
266 paragraph. For purposes of this paragraph, fair market value may
267 be determined using reputable third parties.
268 (b) Notwithstanding paragraph (a), a non-ad valorem
269 assessment for a qualifying improvement defined in subparagraph
270 (2)(f)1. (2)(b)1. or subparagraph (2)(f)2. which (2)(b)2. that
271 is supported by an energy audit is not subject to the limits in
272 this subsection if the audit demonstrates that the annual energy
273 savings from the qualified improvement equals or exceeds the
274 annual repayment amount of the non-ad valorem assessment.
275 (13) At least 30 days before entering into an assessment a
276 financing agreement, the property owner shall provide to the
277 holders or loan servicers of any existing mortgages encumbering
278 or otherwise secured by the property a notice of the owner’s
279 intent to enter into an assessment a financing agreement
280 together with the maximum principal amount to be financed and
281 the maximum annual assessment necessary to repay that amount. A
282 verified copy or other proof of such notice shall be provided to
283 the local government. A provision in any agreement between a
284 mortgagee or other lienholder and a property owner, or otherwise
285 now or hereafter binding upon a property owner, which allows for
286 acceleration of payment of the mortgage, note, or lien or other
287 unilateral modification solely as a result of entering into an
288 assessment a financing agreement as provided for in this section
289 is not enforceable. This subsection does not limit the authority
290 of the holder or loan servicer to increase the required monthly
291 escrow by an amount necessary to annually pay the annual
292 qualifying improvement assessment.
293 (14) At or before the time a seller purchaser executes a
294 contract for the sale and purchase of any property for which a
295 non-ad valorem assessment has been levied under this section and
296 has an unpaid balance due, the seller must shall give the
297 prospective purchaser a written disclosure statement in the
298 following form, which shall be set forth in the contract or in a
299 separate writing:
300
301 QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY,
302 RENEWABLE ENERGY, OR WIND RESISTANCE.—The property
303 being purchased is located within the jurisdiction of
304 a local government that has placed an assessment on
305 the property pursuant to s. 163.08, Florida Statutes.
306 The assessment is for a qualifying improvement to the
307 property relating to energy efficiency, renewable
308 energy, or wind resistance, and is not based on the
309 value of property. You are encouraged to contact the
310 county property appraiser’s office to learn more about
311 this and other assessments that may be provided by
312 law.
313
314 (16) Before final approval of an assessment financing
315 agreement for a qualifying improvement on a residential real
316 property, a program administrator shall reasonably determine
317 that the property owner has the ability to pay the estimated
318 annual assessment. To do so, the program administrator shall, at
319 a minimum, use the underwriting requirements in subsection (9),
320 confirm that the property owner is not in bankruptcy, and
321 determine that the total estimated annual payment amount for all
322 assessment financing agreements funded under this section on the
323 property does not exceed 10 percent of the property owner’s
324 annual household income. Income may be confirmed using
325 information gathered from reputable third parties that provide
326 reasonably reliable evidence of the property owner’s household
327 income. Income may not be confirmed solely by a property owner’s
328 statement. The failure of a property owner to disclose
329 information set forth in paragraph (9)(d) does not invalidate an
330 assessment financing agreement or any obligation thereunder,
331 even if the total estimated annual payment amount exceeds the
332 amount that would otherwise be authorized under this subsection.
333 (17) Before or contemporaneously with a property owner
334 signing an assessment financing agreement on a residential real
335 property, the program administrator shall provide a financing
336 estimate and disclosure to the residential real property owner
337 which includes all of the following:
338 (a) The total amount estimated to be funded, including the
339 cost of the qualifying improvements, program fees, and
340 capitalized interest, if any.
341 (b) The estimated annual assessment.
342 (c) The term of the assessment.
343 (d) The interest charged and estimated annual percentage
344 rate.
345 (e) A description of the qualifying improvement.
346 (f) A disclosure that if the property owner sells or
347 refinances the property, the property owner, as a condition of
348 the sale or the refinance, may be required by a mortgage lender
349 to pay off the full amount owed under each assessment financing
350 agreement.
351 (g) A disclosure that the assessment will be collected
352 along with the property owner’s property taxes and will result
353 in a lien on the property from the date the assessment financing
354 agreement is recorded.
355 (h) A disclosure that failure to pay the assessment may
356 result in penalties and fees, along with the issuance of a tax
357 certificate that could result in the property owner losing the
358 real property.
359 (18) Before a notice to proceed is issued on residential
360 real property, the program administrator shall conduct with the
361 residential real property owner or an authorized representative
362 an oral, recorded telephone call. The program administrator
363 shall ask the residential real property owner if he or she would
364 like to communicate primarily in a language other than English.
365 A program administrator may not leave a voicemail on the
366 residential real property owner’s or authorized representative’s
367 telephone to satisfy this requirement. A program administrator,
368 as part of such telephone call, shall confirm all of the
369 following with the residential real property owner:
370 (a) That at least one residential real property owner has
371 access to a copy of the assessment financing agreement and
372 financing estimates and disclosures.
373 (b) The qualifying improvements being financed.
374 (c) The total estimated annual costs that the residential
375 real property owner will have to pay under the assessment
376 financing agreement, including applicable fees.
377 (d) The total estimated average monthly equivalent amount
378 of funds the residential real property owner would have to save
379 in order to pay the annual costs of the assessment, including
380 applicable fees.
381 (e) The estimated date the residential real property
382 owner’s first property tax payment that includes the assessment
383 will be due.
384 (f) The term of the assessment financing agreement.
385 (g) That payments for the assessment financing agreement
386 will cause the residential real property owner’s annual property
387 tax bill to increase, and that payments will be made through an
388 additional annual assessment on the property and either will be
389 paid directly to the county tax collector’s office as part of
390 the total annual secured property tax bill or may be paid
391 through the residential real property owner’s mortgage escrow
392 account.
393 (h) That the residential real property owner has disclosed
394 whether the property has received, or the owner is seeking,
395 additional assessments funded under this section and that the
396 owner has disclosed all other assessments funded under this
397 section which are or are about to be placed on the property.
398 (i) That the property will be subject to a lien during the
399 term of the assessment financing agreement and that the
400 obligations under the agreement may be required to be paid in
401 full before the residential real property owner sells or
402 refinances the property.
403 (j) That any potential utility or insurance savings are not
404 guaranteed and will not reduce the assessment or total
405 assessment amount.
406 (k) That the program administrator does not provide tax
407 advice, and the residential real property owner should seek
408 professional tax advice if he or she has questions regarding tax
409 credits, tax deductibility, or other tax impacts of the
410 qualifying improvement or the assessment financing agreement.
411 (19) A residential real property owner may cancel an
412 assessment financing agreement within 3 business days after
413 signing the assessment financing agreement without any financial
414 penalty from the program administrator for doing so.
415 (20) The term of an assessment financing agreement on
416 residential real property may not exceed the lesser of:
417 (a) Thirty years; or
418 (b) The greater of either the weighted average estimated
419 useful life of all qualifying improvements being financed or the
420 estimated useful life of the qualifying improvements to which
421 the greatest portion of funds is disbursed.
422 (21) An assessment financing agreement authorized under
423 this section on residential real property may not include any of
424 the following financing terms:
425 (a) A negative amortization schedule. Capitalized interest
426 included in the original balance of the assessment financing
427 agreement does not constitute negative amortization.
428 (b) A balloon payment.
429 (c) Prepayment fees, other than nominal administrative
430 costs.
431 (22) For residential real property, a program
432 administrator:
433 (a) May not enroll a contractor who contracts with
434 residential real property owners to install qualifying
435 improvements unless:
436 1. The program administrator makes a reasonable effort to
437 review that the contractor maintains in good standing an
438 appropriate license from the state, if applicable, as well as
439 any other permit, license, or registration required for engaging
440 in business in the jurisdiction in which he or she operates and
441 that the contractor maintains all state-required bond and
442 insurance coverage; and
443 2. The program administrator obtains the contractor’s
444 written agreement that the contractor will act in accordance
445 with all applicable laws, including applicable advertising and
446 marketing laws and regulations.
447 (b) Shall maintain a process to enroll new contractors
448 which includes reasonable review of the following for each
449 contractor:
450 1. Relevant work or project history.
451 2. Financial and reputational background checks.
452 3. A criminal background check.
453 4. Status on the Better Business Bureau online platform or
454 another online platform that tracks contractor reviews.
455 (c) A program administrator may pay or reimburse
456 contractors for any expense allowable under applicable state law
457 and not otherwise prohibited under this section, including, but
458 not limited to, marketing, training, and promotions.
459 (23)(a) Before disbursing funds to a contractor for a
460 qualifying improvement on residential real property, a program
461 administrator must first confirm that the applicable work or
462 service has been completed through any of the following:
463 1. A written certification from the property owner;
464 2. A recorded telephone call with the property owner;
465 3. A review of geotagged and time-stamped photographs;
466 4. A review of a final permit; or
467 5. A site inspection through third-party means.
468 (b) A program administrator may not disclose to a
469 contractor or to a third party engaged in soliciting an
470 assessment financing agreement the maximum financing amount for
471 which a residential real property owner is eligible.
472 (24) A program administrator shall comply with the
473 following marketing and communications guidelines when
474 communicating with residential real property owners:
475 (a) A program administrator may not represent:
476 1. That the REEF program or assessment financing is a
477 government assistance program;
478 2. That qualifying improvements are free or that assessment
479 financing is a free program; or
480 3. That the financing of a qualifying improvement using the
481 REEF program does not require the property owner to repay the
482 financial obligation.
483 (b) A program administrator may not make any representation
484 as to the tax deductibility of an assessment authorized under
485 this section. A program administrator may encourage a property
486 owner to seek the advice of a tax professional regarding tax
487 matters related to assessments.
488 (25) A contractor may not present a higher price for a
489 qualifying improvement on residential real property financed by
490 an assessment financing agreement than the contractor would
491 otherwise reasonably present if the qualifying improvement was
492 not being financed through an assessment financing agreement.
493 (26) A program administrator shall use appropriate
494 methodologies or technologies to identify and verify the
495 identity of the residential real property owner who executes an
496 assessment financing agreement.
497 (27) A program administrator may not provide a contractor
498 with any payment, fee, or kickback in exchange for referring
499 assessment financing business relating to a specific assessment
500 financing agreement on residential real property.
501 (28) A program administrator shall develop and implement
502 policies and procedures for responding to, tracking, and helping
503 to resolve questions and property owner complaints as soon as
504 reasonably practicable.
505 (29) A program administrator shall maintain a process for
506 monitoring enrolled contractors that contract with residential
507 real property owners to install qualifying improvements with
508 regard to performance and compliance with program policies and
509 shall implement policies for suspending and terminating enrolled
510 contractors based on violations of program policies or
511 unscrupulous behavior. A program administrator shall maintain a
512 policy for determining the conditions on which a contractor may
513 be reinstated to the program.
514 (30) A program administrator shall provide, at a reasonable
515 time following the end of the prior calendar year, an annual
516 report to the dependent special district as defined in s.
517 189.012 or a separate legal entity created pursuant to s.
518 163.01(7) which it has contracted with to administer a REEF
519 program and shall include information and data related to the
520 following:
521 (a) The total number of property owner complaints received
522 which are associated with project funding in the report year.
523 (b) Of the total number of property owner complaints
524 received which are associated with project funding in the report
525 year:
526 1. The number and percentage of complaints that relate to
527 the assessment financing.
528 2. The number and percentage of complaints that relate to a
529 contractor or the workmanship of a contractor and are not
530 related to assessment financing.
531 3. The number and percentage of complaints that relate to
532 both a contractor and the assessment financing.
533 4. The number and percentage of complaints received
534 pursuant to subparagraphs 1., 2., and 3. which were resolved and
535 the number and percentage of complaints received pursuant to
536 subparagraphs 1., 2., and 3. which were not resolved.
537 (c) The percentage of property owner complaints received
538 pursuant to subparagraphs (b)1., 2., and 3. expressed as a total
539 of all projects funded in the report year.
540 (31)(a) Subsections (16) through (30) do not apply to
541 residential real property if the program administrator
542 reasonably determines that:
543 1. The residential real property is owned by a business
544 entity that owns more than four residential real properties; and
545 2. The business entity’s managing member, partner, or
546 beneficial owner does not reside in the residential real
547 property.
548 (b) Subsections (16) through (30) apply to a program
549 administrator only when administering a REEF program for
550 qualifying improvements on residential real property.
551 Subsections (16) through (30) do not apply with respect to a
552 local government, to residential property owned by a local
553 government, or to nonresidential real property.
554 Section 2. This act shall take effect July 1, 2023.