Florida Senate - 2010 CS for CS for CS for SB 2322 By the Policy and Steering Committee on Ways and Means; the Committees on Finance and Tax; and Community Affairs; and Senator Bennett 576-05317-10 20102322c3 1 A bill to be entitled 2 An act relating to qualifying improvements to real 3 property; creating s. 163.08, F.S.; providing 4 legislative findings and intent; providing 5 definitions; authorizing a local government to levy 6 non-ad valorem assessments to fund certain 7 improvements; authorizing a property owner to apply 8 for funding and enter into a financing agreement with 9 a local government to finance certain improvements; 10 authorizing a local government to collect moneys for 11 such purposes through non-ad valorem assessments; 12 providing collection requirements; authorizing local 13 governments to enter into partnerships with other 14 local governments to provide and finance certain 15 improvements; authorizing a qualifying improvement 16 program to be administered by a for-profit entity or 17 not-for-profit organization under certain 18 circumstances; authorizing a local government to incur 19 debt payable from revenues received from the improved 20 property; providing a financing restriction for local 21 governments; requiring a financial agreement to be 22 recorded in a county’s public records within 5 days 23 after execution of the agreement; specifying 24 responsibilities for local governments before entering 25 into financing agreements; requiring qualifying 26 improvements to be affixed to a building or facility 27 on the property and be performed by a properly 28 certified or registered contractor; excluding certain 29 projects from financing agreement coverage; limiting 30 the amount of the non-ad valorem assessment to a 31 percentage of the just value of the property; 32 providing exceptions; specifying information to be 33 provided to property owners before entering into 34 financing agreements; prohibiting acceleration of a 35 mortgage under certain circumstances; providing 36 assessment disclosure requirements; specifying 37 unenforceability of certain agreement provisions; 38 providing for the act to be construed as preserving a 39 local government’s home rule authority; providing an 40 effective date. 41 42 Be It Enacted by the Legislature of the State of Florida: 43 44 Section 1. Section 163.08, Florida Statutes, is created to 45 read: 46 163.08 Supplemental authority for improvements to real 47 property.— 48 (1)(a) In chapter 2008-227, Laws of Florida, the 49 Legislature amended the energy goal of the state comprehensive 50 plan to require, in part, that the state reduce its energy 51 requirements through enhanced conservation and efficiency 52 measures in all end-use sectors and reduce atmospheric carbon 53 dioxide by promoting an increased use of renewable energy 54 resources. That act also declared it the public policy of the 55 state to play a leading role in developing and instituting 56 energy management programs that promote energy conservation, 57 energy security, and the reduction of greenhouse gases. In 58 addition to establishing policies to promote the use of 59 renewable energy, the Legislature provided for a schedule of 60 increases in the energy performance of buildings subject to the 61 Florida Energy Efficiency Code for Building Construction. In 62 chapter 2008-191, Laws of Florida, the Legislature adopted new 63 energy conservation and greenhouse gas reduction comprehensive 64 planning requirements for local governments. In the 2008 general 65 election, the voters of this state approved a constitutional 66 amendment authorizing the Legislature, by general law, to 67 prohibit consideration of any change or improvement made for the 68 purpose of improving a property’s resistance to wind damage or 69 the installation of a renewable energy source device in the 70 determination of the assessed value of residential real 71 property. 72 (b) The Legislature finds that all energy-consuming 73 improved properties that are not using energy conservation 74 strategies contribute to the burden affecting all improved 75 property resulting from fossil fuel energy production. Improved 76 property that has been retrofitted with energy-related 77 qualifying improvements receives the special benefit of 78 alleviating the property’s burden from energy consumption. All 79 improved properties not protected from wind damage by wind 80 resistance qualifying improvements contribute to the burden 81 affecting all improved property resulting from potential wind 82 damage. Improved property that has been retrofitted with wind 83 resistance qualifying improvements receives the special benefit 84 of reducing the property’s burden from potential wind damage. 85 Further, the installation and operation of qualifying 86 improvements not only benefit the affected properties for which 87 the improvements are made, but also assist in fulfilling the 88 goals of the state’s energy and hurricane mitigation policies. 89 In order to make qualifying improvements more affordable and 90 assist property owners who wish to undertake such improvements, 91 the Legislature finds that there is a compelling state interest 92 in enabling property owners to voluntarily finance such 93 improvements with local government assistance. 94 (c) The Legislature determines that the actions authorized 95 under this section, including, but not limited to, the financing 96 of qualifying improvements through the execution of financing 97 agreements and the related imposition of voluntary assessments 98 are reasonable and necessary to serve and achieve a compelling 99 state interest and are necessary for the prosperity and welfare 100 of the state and its property owners and inhabitants. 101 (2) As used in this section, the term: 102 (a) “Local government” means a county, municipality, or 103 special district defined as a dependent district pursuant to s. 104 189.403 or a special district created by two or more local 105 general-purpose governments pursuant to s. 163.01. 106 (b) “Qualifying improvement” includes any: 107 1. Energy conservation and efficiency improvement, which is 108 a measure to reduce consumption through conservation or a more 109 efficient use of electricity, natural gas, propane, or other 110 forms of energy on the property, including, but not limited to, 111 air sealing; installation of insulation; installation of energy 112 efficient heating, cooling, or ventilation systems; building 113 modifications to increase the use of daylight; replacement of 114 windows; installation of energy controls or energy recovery 115 systems; installation of electric vehicle charging equipment; 116 and installation of efficient lighting equipment. 117 2. Renewable energy improvement, which is the installation 118 of any system in which the electrical, mechanical, or thermal 119 energy is produced from a method that uses one or more of the 120 following fuels or energy sources: hydrogen, solar energy, 121 geothermal energy, bioenergy, and wind energy. 122 3. Wind-resistance improvement, which includes, but is not 123 limited to: 124 a. Improving the strength of the roof-deck attachment; 125 b. Creating a secondary water barrier to prevent water 126 intrusion; 127 c. Installing wind-resistant shingles; 128 d. Installing gable-end bracing; 129 e. Reinforcing roof-to-wall connections; 130 f. Installing storm shutters; or 131 g. Installing opening protections. 132 (3) A local government may levy non-ad valorem assessments 133 to fund qualifying improvements. 134 (4) Subject to local government ordinance or resolution, a 135 property owner may apply to the local government for funding to 136 finance a qualifying improvement and enter into a financing 137 agreement with the local government. Costs incurred by the local 138 government for such purpose may be collected as a non-ad valorem 139 assessment. A non-ad valorem assessment shall be collected 140 pursuant to s. 197.3632, and notwithstanding s. 197.3632(8)(a), 141 shall not be subject to discount for early payment. However, the 142 notice and adoption requirements of s. 197.3632(4) do not apply 143 if this section is used and complied with, and the initial 144 resolution, publication of notice, and mailed notices to the 145 property appraiser, tax collector, and Department of Revenue 146 required by s. 197.3632(3)(a) may be provided on or before 147 August 15 in conjunction with any non-ad valorem assessment 148 authorized by this section, if the property appraiser, tax 149 collector, and local government agree. 150 (5) Pursuant to this section or as otherwise provided by 151 law or pursuant to a local government’s home rule power, a local 152 government may enter into a partnership with one or more local 153 governments for the purpose of providing and financing 154 qualifying improvements. 155 (6) A qualifying improvement program may be administered by 156 a for-profit entity or a not-for-profit organization on behalf 157 of and at the discretion of the local government. 158 (7) A local government may incur debt for the purpose of 159 providing such improvements, payable from revenues received from 160 the improved property or any other available revenue source 161 authorized by law. 162 (8) A local government may enter into a financing agreement 163 only with the record owner of the affected property. Any 164 financing agreement entered into pursuant to this section or a 165 summary memorandum of such agreement shall be recorded in the 166 public records of the county within which the property is 167 located by the sponsoring unit of local government within 5 days 168 after execution of the agreement. The recorded agreement shall 169 provide constructive notice that the assessment to be levied on 170 the property constitutes a lien of equal dignity to county taxes 171 and assessments from the date of recordation. 172 (9) Before entering into a financing agreement, the local 173 government shall reasonably determine that all property taxes 174 and any other assessments levied on the same bill as property 175 taxes are paid and have not been delinquent for the preceding 3 176 years or the property owner’s period of ownership, whichever is 177 less; that there are no involuntary liens, including, but not 178 limited to, construction liens on the property; that no notices 179 of default or other evidence of property-based debt delinquency 180 have been recorded during the preceding 3 years or the property 181 owner’s period of ownership, whichever is less; and that the 182 property owner is current on all mortgage debt on the property. 183 (10) A qualifying improvement shall be affixed to a 184 building or facility that is part of the property and shall 185 constitute an improvement to the building or facility or a 186 fixture attached to the building or facility. An agreement 187 between a local government and a qualifying property owner may 188 not cover wind-resistance improvements in buildings or 189 facilities under new construction or construction for which a 190 certificate of occupancy or similar evidence of substantial 191 completion of new construction or improvement has not been 192 issued. 193 (11) Any work requiring a license under any applicable law 194 to make a qualifying improvement shall be performed by a 195 contractor properly certified or registered pursuant to part I 196 or part II of chapter 489. 197 (12)(a) Without the consent of the holders or loan 198 servicers of any mortgage encumbering or otherwise secured by 199 the property, the total amount of any non-ad valorem assessment 200 for a property under this section may not exceed 20 percent of 201 the just value of the property as determined by the county 202 property appraiser. 203 (b) Notwithstanding paragraph (a), a non-ad valorem 204 assessment for a qualifying improvement defined in subparagraph 205 (2)(b)1. or subparagraph (2)(b)2. which is supported by an 206 energy audit is not subject to the limits in this subsection if 207 the audit demonstrates that the annual energy savings from the 208 qualified improvement equals or exceeds the annual repayment 209 amount of the non-ad valorem assessment. 210 (13) At least 30 days before entering into a financing 211 agreement, the property owner shall provide to the holders or 212 loan servicers of any existing mortgages encumbering or 213 otherwise secured by the property a notice of the owner’s intent 214 to enter into a financing agreement together with the maximum 215 principal amount to be financed and the maximum annual 216 assessment necessary to repay that amount. A verified copy or 217 other proof of such notice shall be provided to the local 218 government. A provision in any agreement between a mortgagee or 219 other lienholder and a property owner, or otherwise now or 220 hereafter binding upon a property owner, which allows for 221 acceleration of payment of the mortgage, note, or lien or other 222 unilateral modification solely as a result of entering into a 223 financing agreement as provided for in this section is not 224 enforceable. This subsection does not limit the authority of the 225 holder or loan servicer to increase the required monthly escrow 226 by an amount necessary to annually pay the qualifying 227 improvement assessment. 228 (14) Each contract for the sale of a parcel of real 229 property for which a non-ad valorem assessment has been imposed 230 under the authority of this section within the local government 231 shall include, immediately prior to the space reserved in the 232 contract for the signature of the purchaser, the following 233 disclosure statement in boldfaced and conspicuous type that is 234 larger than the type in the remaining text of the contract: 235 236 “THE ...(name of local government)... HAS IMPOSED A NON-AD 237 VALOREM ASSESSMENT ON THIS PROPERTY. THIS ASSESSMENT IS IN 238 ADDITION TO OTHER LOCAL GOVERNMENTAL ASSESSMENTS AND ALL OTHER 239 ASSESSMENTS PROVIDED FOR BY LAW.” 240 (15) A provision in any agreement between a local 241 government and a public or private power or energy provider or 242 other utility provider is not enforceable to limit or prohibit 243 any local government from exercising its authority under this 244 section. 245 (16) This section is additional and supplemental to county 246 and municipal home rule authority and not in derogation of such 247 authority or a limitation upon such authority. 248 Section 2. This act shall take effect upon becoming a law.