Article 2 - PACE Reserve Program

California Public Resources Code — §§ 26060-26064

Sections (5)

Amended by Stats. 2014, Ch. 614, Sec. 4. (AB 2597) Effective January 1, 2015.

(a)The authority shall develop and administer a PACE Reserve program to reduce overall costs to the property owners of PACE bonds issued by an applicant by providing a reserve of no more than 10 percent of the initial principal amount of the PACE bond.

(b)The authority shall develop and administer a PACE risk mitigation program for PACE financing to increase its acceptance in the marketplace and protect against the risk of default and foreclosure.

§ 26061

Amended by Stats. 2014, Ch. 614, Sec. 5. (AB 2597) Effective January 1, 2015.

To qualify for assistance pursuant to this chapter, the PACE program shall require all of the following:

(a)The interest rate on the PACE bond does not exceed a percentage as determined by the authority to be appropriate.

(b)Minimum legal financing structure and credit underwriting criteria as determined by the authority are met.

(c)Proceeds of the PACE bonds are used to finance qualified energy and water efficiency, electric vehicle charging infrastructure, and clean energy improvements.

(d)The improvement financed is for a residential project of

three units or fewer, or a commercial project that costs less than twenty-five thousand dollars ($25,000) in total.

§ 26062

Amended by Stats. 2014, Ch. 614, Sec. 6. (AB 2597) Effective January 1, 2015.

An applicant shall submit to the authority an application providing a detailed description of the PACE program, a detailed description of the transactional activities associated with the PACE bond issuance, including all transactional costs, information regarding any credit enhancement or insurance associated with the PACE program, and other information deemed necessary by the authority.

§ 26063

Amended by Stats. 2014, Ch. 614, Sec. 7. (AB 2597) Effective January 1, 2015.

(a)In evaluating eligibility, the authority shall consider whether the applicant’s PACE program includes the following conditions:

(1)Financing recipients are legal owners of underlying property.

(2)Financing recipients are current on mortgage and property tax payments.

(3)Financing recipients are not in default or in bankruptcy proceedings.

(4)Financing is for less than 15 percent of the value of the property, up to the first seven hundred thousand dollars ($700,000) of the value of the property, and is for less than 10

percent of the remaining value of the property above seven hundred thousand dollars ($700,000).

(5)The property is within the geographical boundaries of the PACE program.

(6)The program offers financing for energy or water efficiency improvements, electric vehicle charging infrastructure, or clean energy improvements.

(7)Improvements financed by the program follow applicable standards of energy efficiency retrofit work, including any guidelines adopted by the State Energy Resources Conservation and Development Commission.

(8)The total mortgage-related debt and PACE financing on the underlying property does not exceed the value of the property.

(b)In evaluating an application, the

authority shall consider all of the following factors:

(1)The use by the PACE program of best practices, adopted by the authority, to qualify eligible properties for participation in underwriting the PACE program.

(2)The cost efficiency of the applicant’s PACE program, including bond issuance, credit enhancement, or insurance.

(3)The projected number of jobs created by the PACE program.

(4)The applicant’s PACE program requirements for quality assurance and consumer protection as related to achieving efficiency and clean energy production.

(5)The mechanisms by which savings produced by this program are passed on to the property owners.

(6)Any other factors deemed appropriate by the authority.

§ 26064

Added by Stats. 2012, Ch. 677, Sec. 33. (SB 1128) Effective January 1, 2013.

The authority shall review the applicant’s PACE bond issuance, including, but not limited to, indenture, trust agreement, and fiscal agent agreement (“the bond documents”) and, when the authority is satisfied that the bond documents are consistent with the requirements of the PACE Reserve program established pursuant to this chapter, the authority shall advance to the applicant or the applicant’s bond trustee, at the closing of the applicant’s PACE bonds, the amount made available from the Renewable Resource Trust Fund and approved by the authority for use in the PACE bond’s reserve fund under the bond documents. Prior to the disbursement of moneys pursuant to this section into a reserve fund, the authority shall enter into an agreement with the

applicant regarding the creation and operation of the reserve fund, including the manner in which the authority will be repaid for any moneys disbursed to the reserve fund.