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A06162 Summary:

Amd §§119-ee & 119-gg, Gen Muni L
Limits the municipal sustainable energy loan program to commercial entities, not-for-profit organizations, or entities other than individuals.
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A06162 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the general municipal law, in relation to limiting the municipal sustainable energy loan program to entities which are not individuals   PURPOSE: This legislation limits the municipal sustainable energy loan program to entities which are not individuals in an effort to combat predatory practices that target homeowners in vulnerable communities.   SUMMARY: Section 1 and 2. Clarifies that the loan program is for commercial enti- ties, not-for-profit organizations, or entities other than individuals. Section 3. Sets the effective date.   JUSTIFICATION: The Property Assessed Clean Energy program (PACE) is a government-spon- sored financing option for commercial and residential property owners to pay for energy upgrades. These permanent improvements include new roofs, solar panels, water heaters, and many other energy-efficient or weather- ization upgrades. The loan is repaid through a tax lien on the property. This loan is a super-priority lien, meaning that if there is an outstanding mortgage on a property, the PACE loan jumps ahead of the mortgage lender to get their payment first. If taxes are bundled into monthly mortgage payments, homeowners could see their payments increase substantially. The PACE loan is secured using the house as collateral. Defaulting on this loan could mean losing the house. Though the PACE program is government-sponsored, private companies provide the loans and outsource the work to PACE-approved contractors. Many contractors will pitch the program while not adequately explaining the details of the financing. Homeowners are pitched on the idea that the upfront cost of these improvements is paid by the loans, and then the savings on the homeowner's monthly energy bill will more than make up for the yearly PACE payments. Further, there is no guarantee of the quality of the work done. Many PACE participants reported that the contracting process and construction work is mismanaged, shoddy, overpriced, and in some cases less energy efficient. This is because the company or person selling the PACE program to a homeowner isn't the same person or company that will complete the project. There is no energy audit conducted to see if these energy-efficient upgrades will provide the necessary savings to pay off the loan. There are many examples of homeowner's seeing their tax bill drastically increase while savings are minimal. For hotheowners on fixed incomes this can be devastating. Many face the threat of foreclosure or must sell to avoid foreclosure. The residential PACE program started with good intentions, but it is plagued with issues of predatory lending. This bill would protect home- owners by preventing individuals from engaging in the loan program.   PRIOR LEGISLATIVE HISTORY: New Bill   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect immediately
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