Florida Senate - 2024 CS for CS for SB 770
By the Committees on Fiscal Policy; and Community Affairs; and
Senator Martin
594-02696-24 2024770c2
1 A bill to be entitled
2 An act relating to improvements to real property;
3 amending s. 163.08, F.S.; deleting provisions relating
4 to legislative findings and intent; defining terms and
5 revising definitions; creating ss. 163.081 and
6 163.082, F.S.; allowing a program administrator to
7 offer a program for financing qualifying improvements
8 for residential or commercial property when authorized
9 by a county or municipality; requiring an authorized
10 program administrator that administers an authorized
11 program to meet certain requirements; authorizing a
12 county or municipality to enter into an interlocal
13 agreement to implement a program; authorizing a
14 program administrator to contract with third-party
15 administrators to implement the program; authorizing a
16 program administrator to levy non-ad valorem
17 assessments for a certain purpose; providing for
18 compensation for tax collectors for actual costs
19 incurred to collect non-ad valorem assessments;
20 authorizing a program administrator to incur debt for
21 the purpose of providing financing for qualifying
22 improvements; authorizing the owner of the residential
23 property or commercial property or certain
24 nongovernmental lessees to apply to the program
25 administrator to finance a qualifying improvement;
26 requiring the program administrator to make certain
27 findings before entering into a financing agreement;
28 requiring the program administrator to ascertain
29 certain financial information from the property owner
30 or nongovernmental lessee before entering into a
31 financing agreement; requiring certain documentation;
32 requiring an advisement and notification for certain
33 qualifying improvements; requiring certain financing
34 agreement and contract provisions for change orders
35 under certain circumstances; prohibiting a financing
36 agreement from being entered into under certain
37 circumstances; requiring the program administrator to
38 provide certain information before a financing
39 agreement may be approved; requiring an oral, recorded
40 telephone call with the residential property owner to
41 confirm findings and disclosures before the approval
42 of a financing agreement; requiring the residential
43 property owner to provide written notice to the holder
44 or loan servicer of his or her intent to enter into a
45 financing agreement as well as other financial
46 information; requiring that proof of such notice be
47 provided to the program administrator; providing that
48 a certain acceleration provision in an agreement
49 between the residential property owner and mortgagor
50 or lienholder is unenforceable; providing that the
51 lienholder or loan servicer retains certain authority;
52 requiring the program administrator to receive the
53 written consent of certain lienholders on commercial
54 property; authorizing a residential property owner,
55 under certain circumstances and within a certain
56 timeframe, to cancel a financing agreement without
57 financial penalty; requiring recording of the
58 financing agreement in a specified timeframe; creating
59 the seller’s disclosure statements for properties
60 offered for sale which have assessments on them for
61 qualifying improvements; requiring the program
62 administrator to confirm that certain conditions are
63 met before disbursing final funds to a qualifying
64 improvement contractor for qualifying improvements on
65 residential property; requiring a program
66 administrator to submit a certain certificate to a
67 county or municipality upon final disbursement and
68 completion of qualifying improvements on commercial
69 property; providing construction; creating s. 163.083,
70 F.S.; requiring a county or municipality to establish
71 or approve a process for the registration of a
72 qualifying improvement contractor to install
73 qualifying improvements; requiring certain conditions
74 for a qualifying improvement contractor to participate
75 in a program; prohibiting a third-party administrator
76 from registering as a qualifying improvement
77 contractor; requiring the program administrator to
78 monitor qualifying improvement contractors, enforce
79 certain penalties for a finding of violation, and post
80 certain information online; creating s. 163.084, F.S.;
81 authorizing the program administrator to contract with
82 entities to administer an authorized program;
83 providing certain requirements for a third-party
84 administrator; prohibiting a program administrator
85 from contracting with a third-party administrator
86 under certain circumstances; requiring the program
87 administrator to include in its contract with the
88 third-party administrator the right to perform annual
89 reviews of the administrator; authorizing the program
90 administrator to take certain actions if the program
91 administrator finds that the third-party administrator
92 has committed a violation of its contract; authorizing
93 a program administrator to terminate an agreement with
94 a third-party administrator under certain
95 circumstances; providing for the continuation of
96 certain financing agreements after the termination or
97 suspension of the third-party administrator; creating
98 s. 163.085, F.S.; requiring that, in communicating
99 with the property owner or nongovernmental lessee, the
100 program administrator, qualifying improvement
101 contractor, or third-party administrator comply with
102 certain requirements; prohibiting the program
103 administrator or third-party administrator from
104 disclosing certain financing information to a
105 qualifying improvement contractor; prohibiting a
106 qualifying improvement contractor from making certain
107 advertisements or solicitations; providing exceptions;
108 prohibiting a program administrator or third-party
109 administrator from providing certain payments, fees,
110 or kickbacks to a qualifying improvement contractor;
111 prohibiting a program administrator or third-party
112 administrator to reimbursing a qualifying improvement
113 contractor for certain expenses; prohibiting a
114 qualifying improvement contractor from providing
115 different prices for a qualifying improvement;
116 requiring a contract between a property owner or
117 nongovernmental lessee and a qualifying improvement
118 contractor to include certain provisions; prohibiting
119 a program administrator, qualifying improvement
120 contractor, or third-party administrator from
121 providing any cash payment or anything of material
122 value to a property owner or nongovernmental lessee
123 which is explicitly conditioned on a financing
124 agreement; providing exceptions; creating s. 163.086,
125 F.S.; prohibiting a recorded financing agreement from
126 being removed from attachment to a property under
127 certain circumstances; providing for the
128 unenforceability of a financing agreement under
129 certain circumstances; providing provisions for when a
130 qualifying improvement contractor initiates work on an
131 unenforceable contract; providing that a qualifying
132 improvement contractor may retrieve chattel or
133 fixtures delivered pursuant to an unenforceable
134 contract if certain conditions are met; providing that
135 an unenforceable contract will remain unenforceable
136 under certain circumstances; creating s. 163.087,
137 F.S.; requiring a program administrator authorized to
138 administer a program for financing a qualifying
139 improvement to post on its website an annual report;
140 specifying requirements for the report; requiring the
141 Auditor General to conduct an operational audit of
142 each authorized program; providing an effective date.
143
144 Be It Enacted by the Legislature of the State of Florida:
145
146 Section 1. Section 163.08, Florida Statutes, is amended to
147 read:
148 (Substantial rewording of section. See
149 s. 163.08, F.S., for present text.)
150 163.08 Definitions.—As used in ss. 163.081-163.087, the
151 term:
152 (1) “Commercial property” means real property other than
153 residential property. The term includes, but is not limited to,
154 a property zoned multifamily residential which is composed of
155 five or more dwelling units; government commercial property; and
156 real property used for commercial, industrial, or agricultural
157 purposes.
158 (2) “Government commercial property” means real property
159 owned by a local government and leased to a nongovernmental
160 lessee for commercial use. The term does not include residential
161 property.
162 (3) “Nongovernmental lessee” means a person or an entity
163 other than a local government which leases government commercial
164 property.
165 (4) “Program administrator” means a county, a municipality,
166 a dependent special district as defined in s. 189.012, or a
167 separate legal entity created pursuant to s. 163.01(7).
168 (5) “Property owner” means the owner or owners of record of
169 real property. The term includes real property held in trust for
170 the benefit of one or more individuals, in which case the
171 individual or individuals may be considered as the property
172 owner or owners, provided that the trustee provides written
173 consent. The term does not include persons renting, using,
174 living, or otherwise occupying real property, except for a
175 nongovernmental lessee.
176 (6) “Qualifying improvement” means the following permanent
177 improvements located on real property within the jurisdiction of
178 an authorized financing program:
179 (a) For improvements on residential property:
180 1. Repairing, replacing, or improving a central sewerage
181 system, converting an onsite sewage treatment and disposal
182 system to a central sewerage system, or, if no central sewerage
183 system is available, removing, repairing, replacing, or
184 improving an onsite sewage treatment and disposal system to an
185 advanced system or technology.
186 2. Repairing, replacing, or improving a roof, including
187 improvements that strengthen the roof deck attachment; create a
188 secondary water barrier to prevent water intrusion; install
189 wind-resistant shingles or gable-end bracing; or reinforce roof
190 to-wall connections.
191 3. Providing flood and water damage mitigation and
192 resiliency improvements, prioritizing repairs, replacement, or
193 improvements that qualify for reductions in flood insurance
194 premiums, including raising a structure above the base flood
195 elevation to reduce flood damage; constructing a flood diversion
196 apparatus, drainage gate, or seawall improvement, including
197 seawall repairs and seawall replacements; purchasing flood
198 damage-resistant building materials; or making electrical,
199 mechanical, plumbing, or other system improvements that reduce
200 flood damage.
201 4. Replacing windows or doors, including garage doors, with
202 energy-efficient, impact-resistant, wind-resistant, or hurricane
203 windows or doors or installing storm shutters.
204 5. Installing energy-efficient heating, cooling, or
205 ventilation systems.
206 6. Replacing or installing insulation.
207 7. Replacing or installing energy-efficient water heaters.
208 8. Installing and affixing a permanent generator.
209 9. Providing a renewable energy improvement, including the
210 installation of any system in which the electrical, mechanical,
211 or thermal energy is produced from a method that uses solar,
212 geothermal, bioenergy, wind, or hydrogen.
213 (b) For installing or constructing improvements on
214 commercial property:
215 1. Waste system improvements, which consists of repairing,
216 replacing, improving, or constructing a central sewerage system,
217 converting an onsite sewage treatment and disposal system to a
218 central sewerage system, or, if no central sewerage system is
219 available, removing, repairing, replacing, or improving an
220 onsite sewage treatment and disposal system to an advanced
221 system or technology.
222 2. Making resiliency improvements, which includes but is
223 not limited to:
224 a. Repairing, replacing, improving, or constructing a roof,
225 including improvements that strengthen the roof deck attachment;
226 b. Creating a secondary water barrier to prevent water
227 intrusion;
228 c. Installing wind-resistant shingles or gable-end bracing;
229 d. Reinforcing roof-to-wall connections; or
230 e. Providing flood and water damage mitigation and
231 resiliency improvements, prioritizing repairs, replacement, or
232 improvements that qualify for reductions in flood insurance
233 premiums, including raising a structure above the base flood
234 elevation to reduce flood damage; creating or improving
235 stormwater and flood resiliency, including flood diversion
236 apparatus, drainage gates, or shoreline improvements; purchasing
237 flood-damage-resistant building materials; or making any other
238 improvements necessary to achieve a sustainable building rating
239 or compliance with a national model resiliency standard and any
240 improvements to a structure to achieve wind or flood insurance
241 rate reductions, including building elevation.
242 3. Energy conservation and efficiency improvements, which
243 are measures to reduce consumption through efficient use or
244 conservation of electricity, natural gas, propane, or other
245 forms of energy, including but not limited to, air sealing;
246 installation of insulation; installation of energy-efficient
247 heating, cooling, or ventilation systems; building modification
248 to increase the use of daylight; window replacement; windows;
249 energy controls or energy recovery systems; installation of
250 electric vehicle charging equipment; installation of efficient
251 lighting equipment; or any other improvements necessary to
252 achieve a sustainable building rating or compliance with a
253 national model green building code.
254 4. Renewable energy improvements, including the
255 installation of any system in which the electrical, mechanical,
256 or thermal energy is produced from a method that uses solar,
257 geothermal, bioenergy, wind, or hydrogen.
258 5. Water conservation efficiency improvements, which are
259 measures to reduce consumption through efficient use or
260 conservation of water.
261 (7) “Qualifying improvement contractor” means a licensed or
262 registered contractor who has been registered to participate by
263 a program administrator pursuant to s. 163.083 to install or
264 otherwise perform work to make qualifying improvements on
265 residential property financed pursuant to a program authorized
266 under s. 163.081.
267 (8) “Residential property” means real property zoned as
268 residential or multifamily residential and composed of four or
269 fewer dwelling units.
270 (9) “Third-party administrator” means an entity under
271 contract with a program administrator pursuant to s. 163.084 to
272 administer a program authorized by a county or municipality
273 pursuant to s. 163.081 or s. 163.082 on behalf of and at the
274 discretion of the program administrator.
275 Section 2. Section 163.081, Florida Statutes, is created to
276 read:
277 163.081 Financing qualifying improvements to residential
278 property.—
279 (1) RESIDENTIAL PROPERTY PROGRAM AUTHORIZATION.—
280 (a) A program administrator may only offer a program for
281 financing qualifying improvements to residential property within
282 the jurisdiction of a county or municipality if the county or
283 municipality has authorized by ordinance or resolution the
284 program administrator to administer the program for financing
285 qualifying improvements to residential property. The authorized
286 program must, at a minimum, meet the requirements of this
287 section.
288 (b) Pursuant to this section or as otherwise provided by
289 law or pursuant to a county’s or municipality’s home rule power,
290 a county or municipality may enter into an interlocal agreement
291 providing for a partnership between one or more local
292 governments for the purpose of facilitating a program to finance
293 qualifying improvements to residential property located within
294 the jurisdiction of the local governments that are party to the
295 agreement.
296 (c) An authorized program administrator may contract with
297 one or more third-party administrators to implement the program
298 as provided in s. 163.084.
299 (d) An authorized program administrator may levy non-ad
300 valorem assessments to facilitate repayment of financing
301 qualifying improvements. Costs incurred by the program
302 administrator for such purpose may be collected as a non-ad
303 valorem assessment. A non-ad valorem assessment shall be
304 collected pursuant to s. 197.3632 and, notwithstanding s.
305 197.3632(8)(a), shall not be subject to discount for early
306 payment. However, the notice and adoption requirements of s.
307 197.3632(4) do not apply if this section is used and complied
308 with, and the intent resolution, publication of notice, and
309 mailed notices to the property appraiser, tax collector, and
310 Department of Revenue required by s. 197.3632(3)(a) may be
311 provided on or before August 15 of each year in conjunction with
312 any non-ad valorem assessment authorized by this section, if the
313 property appraiser, tax collector, and program administrator
314 agree. The program administrator shall only compensate the tax
315 collector for the actual cost of collecting non-ad valorem
316 assessments, not to exceed 2 percent of the amount collected and
317 remitted.
318 (e) A program administrator may incur debt for the purpose
319 of providing financing for qualifying improvements, which debt
320 is payable from revenues received from the improved property or
321 any other available revenue source authorized by law.
322 (2) APPLICATION.—The owner of record of the residential
323 property within the jurisdiction of an authorized program may
324 apply to the authorized program administrator to finance a
325 qualifying improvement. The program administrator may only enter
326 into a financing agreement with the property owner.
327 (3) FINANCING AGREEMENTS.—
328 (a) Before entering into a financing agreement, the program
329 administrator must make each of the following findings based on
330 a review of public records derived from a commercially accepted
331 source and the property owner’s statements, records, and credit
332 reports:
333 1. There are sufficient resources to complete the project.
334 2. The total amount of any non-ad valorem assessment for a
335 residential property under this section does not exceed 20
336 percent of the just value of the property as determined by the
337 property appraiser. The total amount may exceed this limitation
338 upon written consent of the holders or loan servicers of any
339 mortgage encumbering or otherwise secured by the residential
340 property.
341 3. The combined mortgage-related debt and total amount of
342 any non-ad valorem assessments under the program for the
343 residential property does not exceed 97 percent of the just
344 value of the property as determined by the property appraiser.
345 4. The financing agreement does not utilize a negative
346 amortization schedule, a balloon payment, or prepayment fees or
347 fines other than nominal administrative costs. Capitalized
348 interest included in the original balance of the assessment
349 financing agreement does not constitute negative amortization.
350 5. All property taxes and any other assessments, including
351 non-ad valorem assessments, levied on the same bill as the
352 property taxes are current and have not been delinquent for the
353 preceding 3 years, or the property owner’s period of ownership,
354 whichever is less.
355 6. There are no outstanding fines or fees related to zoning
356 or code enforcement violations issued by a county or
357 municipality, unless the qualifying improvement will remedy the
358 zoning or code violation.
359 7. There are no involuntary liens, including, but not
360 limited to, construction liens on the residential property.
361 8. No notices of default or other evidence of property
362 based debt delinquency have been recorded and not released
363 during the preceding 3 years or the property owner’s period of
364 ownership, whichever is less.
365 9. The property owner is current on all mortgage debt on
366 the residential property.
367 10. The property owner has not been subject to a bankruptcy
368 proceeding within the last 5 years unless it was discharged or
369 dismissed more than 2 years before the date on which the
370 property owner applied for financing.
371 11. The residential property is not subject to an existing
372 home equity conversion mortgage or reverse mortgage product.
373 12. The term of the financing agreement does not exceed the
374 weighted average useful life of the qualified improvements to
375 which the greatest portion of funds disbursed under the
376 assessment contract is attributable, not to exceed 20 years. The
377 program administrator shall determine the useful life of a
378 qualifying improvement using established standards, including
379 certification criteria from government agencies or nationally
380 recognized standards and testing organizations.
381 13. The total estimated annual payment amount for all
382 financing agreements entered into under this section on the
383 residential property does not exceed 10 percent of the property
384 owner’s annual household income. Income must be confirmed using
385 reasonable evidence and not solely by a property owner’s
386 statement.
387 14. If the qualifying improvement is for the conversion of
388 an onsite sewage treatment and disposal system to a central
389 sewerage system, the property owner has utilized all available
390 local government funding for such conversions and is unable to
391 obtain financing for the improvement on more favorable terms
392 through a local government program designed to support such
393 conversions.
394 (b) Before entering into a financing agreement, the program
395 administrator must determine if there are any current financing
396 agreements on the residential property and if the property owner
397 has obtained or sought to obtain additional qualifying
398 improvements on the same property which have not yet been
399 recorded. The existence of a prior qualifying improvement non-ad
400 valorem assessment or a prior financing agreement is not
401 evidence that the financing agreement under consideration is
402 affordable or meets other program requirements.
403 (c) Findings satisfying paragraphs (a) and (b) must be
404 documented, including supporting evidence relied upon, and
405 provided to the property owner prior to a financing agreement
406 being approved and recorded. The program administrator must
407 retain the documentation for the duration of the financing
408 agreement.
409 (d) If the qualifying improvement is estimated to cost
410 $10,000 or more, before entering into a financing agreement the
411 program administrator must advise the property owner in writing
412 that the best practice is to obtain estimates from more than one
413 unaffiliated, registered qualifying improvement contractors for
414 the qualifying improvement and notify the property owner in
415 writing of the advertising and solicitation requirements of s.
416 163.085.
417 (e) A property owner and the program administrator may
418 agree to include in the financing agreement provisions for
419 allowing change orders necessary to complete the qualifying
420 improvement. Any financing agreement or contract for qualifying
421 improvements which includes such provisions must meet the
422 requirements of this paragraph. If a proposed change order on a
423 qualifying improvement will increase the original cost of the
424 qualifying improvement by 20 percent or more or will expand the
425 scope of the qualifying improvement by more than 20 percent,
426 before the change order may be executed which would result in an
427 increase in the amount financed through the program
428 administrator for the qualifying improvement, the program
429 administrator must notify the property owner, provide an updated
430 written disclosure form as described in subsection (4) to the
431 property owner, and obtain written approval of the change from
432 the property owner.
433 (f) A financing agreement may not be entered into if the
434 total cost of the qualifying improvement, including program fees
435 and interest, is less than $2,500.
436 (g) A financing agreement may not be entered into for
437 qualifying improvements in buildings or facilities under new
438 construction or construction for which a certificate of
439 occupancy or similar evidence of substantial completion of new
440 construction or improvement has not been issued.
441 (4) DISCLOSURES.—
442 (a) In addition to the requirements in subsection (3), a
443 financing agreement may not be approved unless the program
444 administrator first provides, including via electronic means, a
445 written financing estimate and disclosure to the property owner
446 which includes all of the following, each of which must be
447 individually acknowledged in writing by the property owner:
448 1. The estimated total amount to be financed, including the
449 total and itemized cost of the qualifying improvement, program
450 fees, and capitalized interest, if any;
451 2. The estimated annual non-ad valorem assessment;
452 3. The term of the financing agreement and the schedule for
453 the non-ad valorem assessments;
454 4. The interest charged and estimated annual percentage
455 rate;
456 5. A description of the qualifying improvement;
457 6. The total estimated annual costs that will be required
458 to be paid under the assessment contract, including program
459 fees;
460 7. The total estimated average monthly equivalent amount of
461 funds that would need to be saved in order to pay the annual
462 costs of the non-ad valorem assessment, including program fees;
463 8. The estimated due date of the first payment that
464 includes the non-ad valorem assessment;
465 9. A disclosure that the financing agreement may be
466 canceled within 3 business days after signing the financing
467 agreement without any financial penalty for doing so;
468 10. A disclosure that the property owner may repay any
469 remaining amount owed, at any time, without penalty or
470 imposition of additional prepayment fees or fines other than
471 nominal administrative costs;
472 11. A disclosure that if the property owner sells or
473 refinances the residential property, the property owner may be
474 required by a mortgage lender to pay off the full amount owed
475 under each financing agreement under this section;
476 12. A disclosure that the assessment will be collected
477 along with the property owner’s property taxes, and will result
478 in a lien on the property from the date the financing agreement
479 is recorded;
480 13. A disclosure that potential utility or insurance
481 savings are not guaranteed, and will not reduce the assessment
482 amount; and
483 14. A disclosure that failure to pay the assessment may
484 result in penalties, fees, including attorney fees, court costs,
485 and the issuance of a tax certificate that could result in the
486 property owner losing the property and a judgment against the
487 property owner, and may affect the property owner’s credit
488 rating.
489 (b) Prior to the financing agreement being approved, the
490 program administrator must conduct an oral, recorded telephone
491 call with the property owner during which the program
492 administrator must confirm each finding or disclosure required
493 in subsection (3) and this section.
494 (5) NOTICE TO LIENHOLDERS AND SERVICERS.—At least 5
495 business days before entering into a financing agreement, the
496 property owner must provide to the holders or loan servicers of
497 any existing mortgages encumbering or otherwise secured by the
498 residential property a written notice of the owner’s intent to
499 enter into a financing agreement together with the maximum
500 amount to be financed, including the amount of any fees and
501 interest, and the maximum annual assessment necessary to repay
502 the total. A verified copy or other proof of such notice must be
503 provided to the program administrator. A provision in any
504 agreement between a mortgagor or other lienholder and a property
505 owner, or otherwise now or hereafter binding upon a property
506 owner, which allows for acceleration of payment of the mortgage,
507 note, or lien or other unilateral modification solely as a
508 result of entering into a financing agreement as provided for in
509 this section is unenforceable. This subsection does not limit
510 the authority of the holder or loan servicer to increase the
511 required monthly escrow by an amount necessary to pay the annual
512 assessment.
513 (6) CANCELLATION.—A property owner may cancel a financing
514 agreement on a form established by the program administrator
515 within 3 business days after signing the financing agreement
516 without any financial penalty for doing so.
517 (7) RECORDING.—Any financing agreement approved and entered
518 into pursuant to this section, or a summary memorandum of such
519 agreement, shall be submitted for recording in the public
520 records of the county within which the residential property is
521 located by the program administrator within 10 business days
522 after execution of the agreement and the 3-day cancelation
523 period. The recorded agreement must provide constructive notice
524 that the non-ad valorem assessment to be levied on the property
525 constitutes a lien of equal dignity to county taxes and
526 assessments from the date of recordation. A notice of lien for
527 the full amount of the financing may be recorded in the public
528 records of the county where the property is located. Such lien
529 is not enforceable in a manner that results in the acceleration
530 of the remaining nondelinquent unpaid balance under the
531 assessment financing agreement.
532 (8) SALE OF RESIDENTIAL PROPERTY.—At or before the time a
533 seller executes a contract for the sale of any residential
534 property for which a non-ad valorem assessment has been levied
535 under this section and has an unpaid balance due, the seller
536 shall give the prospective purchaser a written disclosure
537 statement in the following form, which must be set forth in the
538 contract or in a separate writing:
539
540 QUALIFYING IMPROVEMENTS.—The property being purchased
541 is subject to an assessment on the property pursuant
542 to s. 163.081, Florida Statutes. The assessment is for
543 a qualifying improvement to the property and is not
544 based on the value of the property. You are encouraged
545 to contact the property appraiser’s office to learn
546 more about this and other assessments that may be
547 provided by law.
548
549 (9) DISBURSEMENTS.—Before disbursing final funds to a
550 qualifying improvement contractor for a qualifying improvement
551 on residential property, the program administrator shall confirm
552 that the applicable work or service has been completed or, as
553 applicable, that the final permit for the qualifying improvement
554 has been closed with all permit requirements satisfied or a
555 certificate of occupancy or similar evidence of substantial
556 completion of construction or improvement has been issued.
557 (10) CONSTRUCTION.—This section is additional and
558 supplemental to county and municipal home rule authority and not
559 in derogation of such authority or a limitation upon such
560 authority.
561 Section 3. Section 163.082, Florida Statutes, is created to
562 read:
563 163.082 Financing qualifying improvements to commercial
564 property.—
565 (1) COMMERCIAL PROPERTY PROGRAM AUTHORIZATION.—
566 (a) A program administrator may only offer a program for
567 financing qualifying improvements to commercial property within
568 the jurisdiction of a county or municipality if the county or
569 municipality has authorized by ordinance or resolution the
570 program administrator to administer the program for financing
571 qualifying improvements to commercial property. The authorized
572 program must, at a minimum, meet the requirements of this
573 section.
574 (b) Pursuant to this section or as otherwise provided by
575 law or pursuant to a county’s or municipality’s home rule power,
576 a county or municipality may enter into an interlocal agreement
577 providing for a partnership between one or more local
578 governments for the purpose of facilitating a program for
579 financing qualifying improvements to commercial property located
580 within the jurisdiction of the local governments that are party
581 to the agreement.
582 (c) A program administrator may contract with one or more
583 third-party administrators to implement the program as provided
584 in s. 163.084.
585 (d) An authorized program administrator may levy non-ad
586 valorem assessments to facilitate repayment of financing or
587 refinancing qualifying improvements. Costs incurred by the
588 program administrator for such purpose may be collected as a
589 non-ad valorem assessment. A non-ad valorem assessment shall be
590 collected pursuant to s. 197.3632 and, notwithstanding s.
591 197.3632(8)(a), is not subject to discount for early payment.
592 However, the notice and adoption requirements of s. 197.3632(4)
593 do not apply if this section is used and complied with, and the
594 intent resolution, publication of notice, and mailed notices to
595 the property appraiser, tax collector, and Department of Revenue
596 required by s. 197.3632(3)(a) may be provided on or before
597 August 15 of each year in conjunction with any non-ad valorem
598 assessment authorized by this section, if the property
599 appraiser, tax collector, and program administrator agree. The
600 program administrator shall only compensate the tax collector
601 for the actual cost of collecting non-ad valorem assessments,
602 not to exceed 2 percent of the amount collected and remitted.
603 (e) A program administrator may incur debt for the purpose
604 of providing financing for qualifying improvements, which debt
605 is payable from revenues received from the improved property or
606 any other available revenue source authorized by law.
607 (2) APPLICATION.—The owner of record of the commercial
608 property within the jurisdiction of the authorized program may
609 apply to the program administrator to finance a qualifying
610 improvement and enter into a financing agreement with the
611 program administrator to make such improvement. The program
612 administrator may only enter into a financing agreement with a
613 property owner. However, a nongovernmental lessee may apply to
614 finance a qualifying improvement if the nongovernmental lessee
615 provides the program administrator with written consent of the
616 government lessor. Any financing agreement with the
617 nongovernmental lessee must provide that the nongovernmental
618 lessee is the only party obligated to pay the assessment.
619 (3) FINANCING AGREEMENTS.—
620 (a) Before entering into a financing agreement, the program
621 administrator must make each of the following findings based on
622 a review of public records derived from a commercially accepted
623 source and the statements, records, and credit reports of the
624 commercial property owner or nongovernmental lessee:
625 1. There are sufficient resources to complete the project.
626 2. The total amount of any non-ad valorem assessment for a
627 commercial property under this section does not exceed 20
628 percent of the just value of the property as determined by the
629 property appraiser. The total amount may exceed this limitation
630 upon written consent of the holders or loan servicers of any
631 mortgage encumbering or otherwise secured by the commercial
632 property.
633 3. The combined mortgage-related debt and total amount of
634 any non-ad valorem assessments under the program for the
635 commercial property does not exceed 97 percent of the just value
636 of the property as determined by the property appraiser.
637 4. All property taxes and any other assessments, including
638 non-ad valorem assessments, levied on the same bill as the
639 property taxes are current.
640 5. There are no involuntary liens greater than $5,000,
641 including, but not limited to, construction liens on the
642 commercial property.
643 6. No notices of default or other evidence of property
644 based debt delinquency have been recorded and not been released
645 during the preceding 3 years or the property owner’s period of
646 ownership, whichever is less.
647 7. The property owner is current on all mortgage debt on
648 the commercial property.
649 8. The term of the financing agreement does not exceed the
650 weighted average useful life of the qualified improvements to
651 which the greatest portion of funds disbursed under the
652 assessment contract is attributable, not to exceed 30 years. The
653 program administrator shall determine the useful life of a
654 qualifying improvement using established standards, including
655 certification criteria from government agencies or nationally
656 recognized standards and testing organizations.
657 9. The property owner or nongovernmental lessee is not
658 currently the subject of a bankruptcy proceeding.
659 (b) Before entering into a financing agreement, the program
660 administrator shall determine if there are any current financing
661 agreements on the commercial property and whether the property
662 owner or nongovernmental lessee has obtained or sought to obtain
663 additional qualifying improvements on the same property which
664 have not yet been recorded. The existence of a prior qualifying
665 improvement non-ad valorem assessment or a prior financing
666 agreement is not evidence that the financing agreement under
667 consideration is affordable or meets other program requirements.
668 (c) Findings satisfying paragraphs (a) and (b) must be
669 documented, including supporting evidence relied upon, and
670 provided to the property owner or nongovernmental lessee prior
671 to a financing agreement being approved and recorded. The
672 program administrator must retain the documentation for the
673 duration of the financing agreement.
674 (d) A property owner or nongovernmental lessee and the
675 program administrator may agree to include in the financing
676 agreement provisions for allowing change orders necessary to
677 complete the qualifying improvement. Any financing agreement or
678 contract for qualifying improvements which includes such
679 provisions must meet the requirements of this paragraph. If a
680 proposed change order on a qualifying improvement will increase
681 the original cost of the qualifying improvement by 20 percent or
682 more or will expand the scope of the qualifying improvement by
683 20 percent or more, before the change order may be executed
684 which would result in an increase in the amount financed through
685 the program administrator for the qualifying improvement, the
686 program administrator must notify the property owner or
687 nongovernmental lessee, provide an updated written disclosure
688 form as described in subsection (4) to the property owner or
689 nongovernmental lessee, and obtain written approval of the
690 change from the property owner or nongovernmental lessee.
691 (e) A financing agreement may not be entered into if the
692 total cost of the qualifying improvement, including program fees
693 and interest, is less than $2,500.
694 (4) DISCLOSURES.—In addition to the requirements in
695 subsection (3), a financing agreement may not be approved unless
696 the program administrator provides, whether on a separate
697 document or included with other disclosures or forms, a
698 financing estimate and disclosure to the property owner or
699 nongovernmental lessee which includes all of the following:
700 (a) The estimated total amount to be financed, including
701 the total and itemized cost of the qualifying improvement,
702 program fees, and capitalized interest, if any;
703 (b) The estimated annual non-ad valorem assessment;
704 (c) The term of the financing agreement and the schedule
705 for the non-ad valorem assessments;
706 (d) The interest charged and estimated annual percentage
707 rate;
708 (e) A description of the qualifying improvement;
709 (f) The total estimated annual costs that will be required
710 to be paid under the assessment contract, including program
711 fees;
712 (g) The estimated due date of the first payment that
713 includes the non-ad valorem assessment; and
714 (h) A disclosure that the property owner or nongovernmental
715 lessee may repay any remaining amount owed, at any time, without
716 penalty or imposition of additional prepayment fees or fines
717 other than nominal administrative costs.
718 (5) CONSENT OF LIENHOLDERS AND SERVICERS.—Before entering
719 into a financing agreement with a property owner, the program
720 administrator must have received the written consent of the
721 current holders or loan servicers of any mortgage that encumbers
722 or is otherwise secured by the commercial property or that will
723 otherwise be secured by the property at the time the financing
724 agreement is executed.
725 (6) RECORDING.—Any financing agreement approved and entered
726 into pursuant to this section or a summary memorandum of such
727 agreement must be submitted for recording in the public records
728 of the county within which the commercial property is located by
729 the program administrator within 10 business days after
730 execution of the agreement. The recorded agreement must provide
731 constructive notice that the non-ad valorem assessment to be
732 levied on the property constitutes a lien of equal dignity to
733 county taxes and assessments from the date of recordation. A
734 notice of lien for the full amount of the financing may be
735 recorded in the public records of the county where the property
736 is located. Such lien is not enforceable in a manner that
737 results in the acceleration of the remaining nondelinquent
738 unpaid balance under the assessment financing agreement.
739 (7) SALE OF COMMERCIAL PROPERTY.—At or before the time a
740 seller executes a contract for the sale of any commercial
741 property for which a non-ad valorem assessment has been levied
742 under this section and has an unpaid balance due, the seller
743 shall give the prospective purchaser a written disclosure
744 statement in the following form, which must be set forth in the
745 contract or in a separate writing:
746
747 QUALIFYING IMPROVEMENTS.—The property being purchased
748 is subject to an assessment on the property pursuant
749 to s. 163.082, Florida Statutes. The assessment is for
750 a qualifying improvement to the property and is not
751 based on the value of the property. You are encouraged
752 to contact the property appraiser’s office to learn
753 more about this and other assessments that may be
754 provided for by law.
755
756 (8) COMPLETION CERTIFICATE.—Upon disbursement of all
757 financing and completion of installation of qualifying
758 improvements financed, the program administrator shall file with
759 the applicable county or municipality a certificate that the
760 qualifying improvements have been installed and are in good
761 working order.
762 (9) CONSTRUCTION.—This section is additional and
763 supplemental to county and municipal home rule authority and not
764 in derogation of such authority or a limitation upon such
765 authority.
766 Section 4. Section 163.083, Florida Statutes, is created to
767 read:
768 163.083 Qualifying improvement contractors.—
769 (1) A county or municipality shall establish a process, or
770 approve a process established by a program administrator, to
771 register contractors for participation in a program authorized
772 by a county or municipality pursuant to s. 163.081. A qualifying
773 improvement contractor may only perform such work that the
774 contractor is appropriately licensed, registered, and permitted
775 to conduct. At the time of application to participate and during
776 participation in the program, contractors must:
777 (a) Hold all necessary licenses or registrations for the
778 work to be performed which are in good standing. Good standing
779 includes no outstanding complaints with the state or local
780 government which issues such licenses or registrations.
781 (b) Comply with all applicable federal, state, and local
782 laws and regulations, including obtaining and maintaining any
783 other permits, licenses, or registrations required for engaging
784 in business in the jurisdiction in which it operates and
785 maintaining all state-required bond and insurance coverage.
786 (c) File with the program administrator a written statement
787 in a form approved by the county or municipality that the
788 contractor will comply with applicable laws and rules and
789 qualifying improvement program policies and procedures,
790 including those on advertising and marketing.
791 (2) A third-party administrator or a program administrator,
792 either directly or through an affiliate, may not be registered
793 as a qualifying improvement contractor.
794 (3) A program administrator shall establish and maintain:
795 (a) A process to monitor qualifying improvement contractors
796 for performance and compliance with requirements of the program
797 and must conduct regular reviews of qualifying improvement
798 contractors to confirm that each qualifying improvement
799 contractor is in good standing.
800 (b) Procedures for notice and imposition of penalties upon
801 a finding of violation, which may consist of placement of the
802 qualifying improvement contractor in a probationary status that
803 places conditions for continued participation, suspension, or
804 termination from participation in the program.
805 (c) An easily accessible page on its website that provides
806 information on the status of registered qualifying improvement
807 contractors, including any imposed penalties, and the names of
808 any qualifying improvement contractors currently on probationary
809 status or that are suspended or terminated from participation in
810 the program.
811 Section 5. Section 163.084, Florida Statutes, is created to
812 read:
813 163.084 Third-party administrator for financing qualifying
814 improvements programs.—
815 (1)(a) A program administrator may contract with one or
816 more third-party administrators to administer a program
817 authorized by a county or municipality pursuant to s. 163.081 or
818 s. 163.082 on behalf of and at the discretion of the program
819 administrator.
820 (b) The third-party administrator must be independent of
821 the program administrator and have no conflicts of interest
822 between managers or owners of the third-party administrator and
823 program administrator managers, owners, officials, or employees
824 with oversight over the contract. The contract must provide for
825 the entity to administer the program according to the
826 requirements of s. 163.081 or s. 163.082 and the ordinance or
827 resolution adopted by the county or municipality authorizing the
828 program. However, only the program administrator may levy or
829 administer non-ad valorem assessments.
830 (2) A program administrator may not contract with a third
831 party administrator that, within the last 3 years, has been
832 prohibited from serving as a third-party administrator for
833 another program administrator for program or contract violations
834 or has been found by a court of competent jurisdiction to have
835 violated state or federal laws related to the administration of
836 ss. 163.081-163.086 or a similar program in another
837 jurisdiction.
838 (3) The program administrator must include in any contract
839 with the third-party administrator the right to perform annual
840 reviews of the administrator to confirm compliance with ss.
841 163.081-163.086, the ordinance or resolution adopted by the
842 county or municipality, and the contract with the program
843 administrator. If the program administrator finds that the
844 third-party administrator has committed a violation of ss.
845 163.081-163.086, the adopted ordinance or resolution, or the
846 contract with the program administrator, the program
847 administrator shall provide the third-party administrator with
848 notice of the violation and may, as set forth in the adopted
849 ordinance or resolution or the contract with the third-party
850 administrator:
851 (a) Place the third-party administrator in a probationary
852 status that places conditions for continued operations.
853 (b) Impose any fines or sanctions.
854 (c) Suspend the activity of the third-party administrator
855 for a period of time.
856 (d) Terminate the agreement with the third-party
857 administrator.
858 (4) A program administrator may terminate the agreement
859 with a third-party administrator, as set forth by the county or
860 municipality in its adopted ordinance or resolution or the
861 contract with the third-party administrator, if the program
862 administrator makes a finding that:
863 (a) The third-party administrator has violated the contract
864 with the program administrator. The contract may set forth
865 substantial violations that may result in contract termination
866 and other violations that may provide for a period of time for
867 correction before the contract may be terminated.
868 (b) The third-party administrator, or an officer, a
869 director, a manager or a managing member, or a control person of
870 the third-party administrator, has been found by a court of
871 competent jurisdiction to have violated state or federal laws
872 related to the administration a program authorized of the
873 provisions of ss. 163.081-163.086 or a similar program in
874 another jurisdiction within the last 5 years.
875 (c) Any officer, director, manager or managing member, or
876 control person of the third-party administrator has been
877 convicted of, or has entered a plea of guilty or nolo contendere
878 to, regardless of whether adjudication has been withheld, a
879 crime related to administration of a program authorized of the
880 provisions of ss. 163.081-163.086 or a similar program in
881 another jurisdiction within the last 10 years.
882 (d) An annual performance review reveals a substantial
883 violation or a pattern of violations by the third-party
884 administrator.
885 (5) Any recorded financing agreements at the time of
886 termination or suspension by the program administrator shall
887 continue.
888 Section 6. Section 163.085, Florida Statutes, is created to
889 read:
890 163.085 Advertisement and solicitation for financing
891 qualifying improvements programs under s. 163.081 or s.
892 163.082.—
893 (1) When communicating with a property owner or a
894 nongovernmental lessee, a program administrator, qualifying
895 improvement contractor, or third-party administrator may not:
896 (a) Suggest or imply:
897 1. That a non-ad valorem assessment authorized under s.
898 163.081 or s. 163.082 is a government assistance program;
899 2. That qualifying improvements are free or provided at no
900 cost, or that the financing related to a non-ad valorem
901 assessment authorized under s. 163.081 or s. 163.082 is free or
902 provided at no cost; or
903 3. That the financing of a qualifying improvement using the
904 program authorized pursuant to s. 163.081 or s. 163.082 does not
905 require repayment of the financial obligation.
906 (b) Make any representation as to the tax deductibility of
907 a non-ad valorem assessment. A program administrator, qualifying
908 improvement contractor, or third-party administrator may
909 encourage a property owner or nongovernmental lessee to seek the
910 advice of a tax professional regarding tax matters related to
911 assessments.
912 (2) A program administrator or third-party administrator
913 may not provide to a qualifying improvement contractor any
914 information that discloses the amount of financing for which a
915 property owner or nongovernmental lessee is eligible for
916 qualifying improvements or the amount of equity in a residential
917 property or commercial property.
918 (3) A qualifying improvement contractor may not advertise
919 the availability of financing agreements for, or solicit program
920 participation on behalf of, the program administrator unless the
921 contractor is registered by the program administrator to
922 participate in the program and is in good standing with the
923 program administrator.
924 (4) A program administrator or third-party administrator
925 may not provide any payment, fee, or kickback to a qualifying
926 improvement contractor for referring property owners or
927 nongovernmental lessees to the program administrator or third
928 party administrator. However, a program administrator or third
929 party administrator may provide information to a qualifying
930 improvement contractor to facilitate the installation of a
931 qualifying improvement for a property owner or nongovernmental
932 lessee.
933 (5) A program administrator or third-party administrator
934 may not reimburse a qualifying improvement contractor for its
935 expenses in advertising and marketing campaigns and materials.
936 (6) A qualifying improvement contractor may not provide a
937 different price for a qualifying improvement financed under s.
938 163.081 than the price that the qualifying improvement
939 contractor would otherwise provide if the qualifying improvement
940 was not being financed through a financing agreement. Any
941 contract between a property owner or nongovernmental lessee and
942 a qualifying improvement contractor must clearly state all
943 pricing and cost provisions, including any process for change
944 orders which meet the requirements of s. 163.081(3)(d).
945 (7) A program administrator, qualifying improvement
946 contractor, or third-party administrator may not provide any
947 direct cash payment or other thing of material value to a
948 property owner or nongovernmental lessee which is explicitly
949 conditioned upon the property owner or nongovernmental lessee
950 entering into a financing agreement. However, a program
951 administrator or third-party administrator may offer programs or
952 promotions on a non-discriminatory basis that provide reduced
953 fees or interest rates if the reduced fees or interest rates are
954 reflected in the financing agreements and are not provided to
955 the property owner or nongovernmental lessee as cash
956 consideration.
957 Section 7. Section 163.086, Florida Statutes, is created to
958 read:
959 163.086 Unenforceable financing agreements for qualifying
960 improvements programs under s. 163.081 or s. 163.082;
961 attachment; fraud.—
962 (1) A recorded financing agreement may not be removed from
963 attachment to a residential property or commercial property if
964 the property owner or nongovernmental lessee fraudulently
965 obtained funding pursuant to s. 163.081 or s. 163.082.
966 (2) A financing agreement may not be enforced, and a
967 recorded financing agreement may be removed from attachment to a
968 residential property or commercial property and deemed null and
969 void, if:
970 (a) The property owner or nongovernmental lessee applied
971 for, accepted, and canceled a financing agreement within the 3
972 business-day period pursuant to s. 163.081(6). A qualifying
973 improvement contractor may not begin work under a canceled
974 contract.
975 (b) A person other than the property owner or
976 nongovernmental lessee obtained the recorded financing
977 agreement. The court may enter an order which holds that person
978 or persons personally liable for the debt.
979 (c) The program administrator, third-party administrator,
980 or qualifying improvement contractor approved or obtained
981 funding through fraudulent means and in violation of ss.
982 163.081-163.085, or this section for qualifying improvements on
983 the residential property or commercial property.
984 (3) If a qualifying improvement contractor has initiated
985 work on residential property or commercial property under a
986 contract deemed unenforceable under this section, the qualifying
987 improvement contractor:
988 (a) May not receive compensation for that work under the
989 financing agreement.
990 (b) Must restore the residential property or commercial
991 property to its original condition at no cost to the property
992 owner or nongovernmental lessee.
993 (c) Must immediately return any funds, property, and other
994 consideration given by the property owner or nongovernmental
995 lessee. If the property owner or nongovernmental lessee provided
996 any property and the qualifying improvement contractor does not
997 or cannot return it, the qualifying improvement contractor must
998 immediately return the fair market value of the property or its
999 value as designated in the contract, whichever is greater.
1000 (4) If the qualifying improvement contractor has delivered
1001 chattel or fixtures to residential property or commercial
1002 property pursuant to a contract deemed unenforceable under this
1003 section, the qualifying improvement contractor has 90 days after
1004 the date on which the contract was executed to retrieve the
1005 chattel or fixtures, provided that:
1006 (a) The qualifying improvement contractor has fulfilled the
1007 requirements of paragraphs (3)(a) and (b).
1008 (b) The chattel and fixtures can be removed at the
1009 qualifying improvement contractor’s expense without damaging the
1010 residential property or commercial property.
1011 (5) If a qualifying improvement contractor fails to comply
1012 with this section, the property owner or nongovernmental lessee
1013 may retain any chattel or fixtures provided pursuant to a
1014 contract deemed unenforceable under this section.
1015 (6) A contract that is otherwise unenforceable under this
1016 section remains enforceable if the property owner or
1017 nongovernmental lessee waives his or her right to cancel the
1018 contract or cancels the financing agreement pursuant to s.
1019 163.081(6) or s. 163.082(6) but allows the qualifying
1020 improvement contractor to proceed with the installation of the
1021 qualifying improvement.
1022 Section 8. Section 163.087, Florida Statutes, is created to
1023 read:
1024 163.087 Reporting for financing qualifying improvements
1025 programs under s. 163.081 or s. 163.082.—
1026 (1) Each program administrator that is authorized to
1027 administer a program for financing qualifying improvements to
1028 residential property or commercial property under s. 163.081 or
1029 s. 163.082 shall post on its website an annual report within 45
1030 days after the end of its fiscal year containing the following
1031 information from the previous year for each program authorized
1032 under s. 163.081 or s. 163.082:
1033 (a) The number and types of qualifying improvements funded.
1034 (b) The aggregate, average, and median dollar amounts of
1035 annual non-ad valorem assessments and the total number of non-ad
1036 valorem assessments collected pursuant to financing agreements
1037 for qualifying improvements.
1038 (c) The total number of defaulted non-ad valorem
1039 assessments, including the total defaulted amount, the number
1040 and dates of missed payments, and the total number of parcels in
1041 default and the length of time in default.
1042 (d) A summary of all reported complaints received by the
1043 program administrator related to the program, including the
1044 names of the third-party administrator, if applicable, and
1045 qualifying improvement contractors and the resolution of each
1046 complaint.
1047 (2) The Auditor General must conduct an operational audit
1048 of each program authorized under s. 163.081 or s. 163.082,
1049 including any third-party administrators, for compliance with
1050 the provisions of ss. 163.08-163.086 and any adopted ordinance
1051 at least once every 24 months. The Auditor General may stagger
1052 evaluations such that a portion of all programs are evaluated in
1053 1 year; however, every program must be evaluated at least once
1054 by September 1, 2027. Each program administrator, and third
1055 party administrator if applicable, must post the most recent
1056 report on its website.
1057 Section 9. This act shall take effect July 1, 2024.