Florida Senate - 2023 SB 810 By Senator Gruters 22-00452A-23 2023810__ 1 A bill to be entitled 2 An act relating to financing improvements to real 3 property; amending s. 163.08, F.S.; revising 4 legislative intent; defining and revising terms; 5 authorizing a residential or commercial property owner 6 to apply to a local government for funding to finance 7 an improvement and to enter into a financing agreement 8 with the local government; providing that a non-ad 9 valorem assessment on certain commercial property is 10 subject to a certain fee; requiring a delinquent 11 assessment with a nongovernmental lessee to be 12 enforced in the manner provided by law; specifying 13 requirements of the financing agreement for government 14 commercial property; specifying the determinations a 15 local government must make before entering into a 16 financing agreement for commercial and residential 17 properties; authorizing a financing agreement to be 18 executed for commercial property under certain 19 circumstances; restricting what improvements may be 20 covered in certain agreements between local 21 governments and residential property owners; limiting 22 the amount of non-ad valorem assessment for certain 23 residential property; providing an exception relating 24 to non-ad valorem assessment for residential property 25 that is supported by an energy audit; specifying 26 requirements for local government before entering into 27 a financing agreement; revising notice requirements 28 regarding an owners intent to enter into a financing 29 agreement; revising the sellers disclosure statement 30 for certain properties offered for sale; providing 31 construction; providing an effective date. 32 33 Be It Enacted by the Legislature of the State of Florida: 34 35 Section 1.Paragraph (b) of subsection (1) and subsections 36 (2), (4), (8), (9), (10), (12), (13), and (14) of section 37 163.08, Florida Statutes, are amended, and subsection (17) is 38 added to that section, to read: 39 163.08Supplemental authority for improvements to real 40 property. 41 (1) 42 (b)The Legislature finds that all energy-consuming 43 improved properties that are not using energy conservation 44 strategies contribute to the burden affecting all improved 45 property resulting from fossil fuel energy production. Improved 46 property that has been retrofitted with energy-related 47 qualifying improvements receives the special benefit of 48 alleviating the propertys burden from energy consumption. All 49 improved properties not protected from wind damage by wind 50 resistance qualifying improvements contribute to the burden 51 affecting all improved property resulting from potential wind 52 damage. Improved property that has been retrofitted with 53 resiliency wind resistance qualifying improvements receives the 54 special benefit of reducing the propertys burden from potential 55 wind damage. Further, the installation and operation of 56 qualifying improvements not only benefit the affected properties 57 for which the improvements are made, but also assist in 58 fulfilling the goals of the states energy and hurricane 59 mitigation policies. In order to make qualifying improvements 60 more affordable and assist property owners who wish to undertake 61 such improvements, the Legislature finds that there is a 62 compelling state interest in enabling property owners to 63 voluntarily finance such improvements with local government 64 assistance. 65 (2)As used in this section, the term: 66 (a)Commercial property means real property not defined 67 as residential property which will be or has been improved by a 68 qualifying improvement, including, but not limited to, the 69 following: 70 1.A multifamily residential property composed of five or 71 more dwelling units; 72 2.A commercial real property; 73 3.An industrial building or property; 74 4.An agricultural property; 75 5.A nonprofit-owned property; 76 6.A long-term care facility, including nursing homes and 77 assisted living facilities; or 78 7.A government commercial property. 79 (b)Government commercial property means real property 80 owned by a local government and leased to a nongovernmental 81 lessee where the usage by the lessee meets the definition of 82 commercial property. 83 (c)Local government means a county, a municipality, a 84 dependent special district as defined in s. 189.012, or a 85 separate legal entity created pursuant to s. 163.01(7). 86 (d)Nongovernmental lessee means a person or an entity 87 other than a local government which leases government commercial 88 property. 89 (e)(b)Qualifying improvement includes any: 90 1.Energy conservation and efficiency improvement, which is 91 a measure to reduce consumption through conservation or a more 92 efficient use of electricity, natural gas, propane, or other 93 forms of energy on the property, including, but not limited to, 94 air sealing; installation of insulation; installation of energy 95 efficient heating, cooling, or ventilation systems; building 96 modifications to increase the use of daylight; replacement of 97 windows; installation of energy controls or energy recovery 98 systems; installation of electric vehicle charging equipment; 99 and installation of efficient lighting equipment; or any other 100 improvements necessary to achieve a sustainable building rating 101 or compliance with a national model green building code. 102 2.Renewable energy improvement, which is the installation 103 of any system in which the electrical, mechanical, or thermal 104 energy is produced from a method that uses one or more of the 105 following fuels or energy sources: hydrogen, solar energy, 106 geothermal energy, bioenergy, and wind energy. 107 3.Resiliency Wind resistance improvement, which includes, 108 but is not limited to: 109 a.Improving the strength of the roof deck attachment; 110 b.Creating a secondary water barrier, including sea walls, 111 to prevent water intrusion; 112 c.Installing wind-resistant shingles; 113 d.Installing gable-end bracing; 114 e.Reinforcing roof-to-wall connections; 115 f.Installing storm shutters; or 116 g.Installing opening protections; 117 h.Creating or improving stormwater, flood, and wastewater 118 management; or 119 i.Making any other improvements necessary to achieve a 120 sustainable building rating or compliance with a national model 121 resiliency standard. 122 (f)Residential property means a residential real 123 property of four or fewer dwelling units which will be or has 124 been improved by a qualifying improvement. 125 (4)Subject to local government ordinance or resolution, a 126 residential or commercial property owner may apply to the local 127 government for funding to finance a qualifying improvement and 128 enter into a financing agreement with the local government. 129 Costs incurred by the local government for such purpose may be 130 collected as a non-ad valorem assessment. A non-ad valorem 131 assessment must shall be collected pursuant to s. 197.3632 and, 132 notwithstanding s. 197.3632(8)(a), is shall not be subject to 133 discount for early payment. However, the notice and adoption 134 requirements of s. 197.3632(4) do not apply if this section is 135 used and complied with, and the intent resolution, publication 136 of notice, and mailed notices to the property appraiser, tax 137 collector, and Department of Revenue required by s. 138 197.3632(3)(a) may be provided on or before August 15 in 139 conjunction with any non-ad valorem assessment authorized by 140 this section, if the property appraiser, tax collector, and 141 local government agree. A non-ad valorem assessment on a 142 commercial property securing financing for a qualifying 143 improvement, notwithstanding ss. 192.091(2)(b) and 144 197.3632(8)(c), is subject to a maximum annual fee of 1 percent 145 of the annual non-ad valorem assessment collected or $5,000, 146 whichever is less. Notwithstanding this subsection, a delinquent 147 assessment pursuant to a financing agreement with a 148 nongovernmental lessee must be enforced in the manner provided 149 by law for taxes and assessments on property owned by 150 nongovernmental lessees of government commercial property. 151 (8)A local government may enter into a financing agreement 152 to finance or refinance a qualifying improvement only with the 153 record owner of the affected property. For government commercial 154 property, the financing agreement must be executed by the 155 nongovernmental lessee with the written consent of the 156 governmental lessor. Evidence of such consent must be provided 157 to the local government. The financing agreement with a 158 nongovernmental lessee must provide that the nongovernmental 159 lessee is the only party obligated to pay the assessment. Any 160 financing agreement entered into pursuant to this section or a 161 summary memorandum of such agreement must shall be recorded in 162 the public records of the county within which the property is 163 located by the sponsoring unit of local government within 5 days 164 after execution of the agreement. The recorded agreement 165 provides shall provide constructive notice that the assessment 166 to be levied on the property constitutes a lien of equal dignity 167 to county taxes and assessments from the date of recordation. 168 (9)(a)Before entering into a financing agreement for a 169 commercial property, the local government shall reasonably 170 determine that all of the following conditions have been met: 171 1.that All property taxes and any other assessments levied 172 on the same bill as property taxes are current. paid and have 173 not been delinquent for the preceding 3 years or the property 174 owners period of ownership, whichever is less; 175 2.that There are no involuntary liens greater than 176 $10,000, including, but not limited to, construction liens on 177 the property.; 178 3.that No notices of default or other evidence of 179 property-based debt delinquency have been recorded and not 180 released during the preceding 3 years or the property owners 181 period of ownership, whichever is less.; 182 4.and that The property owner is current on all mortgage 183 debt on the property. 184 (b)Before entering into a financing agreement for a 185 residential property, the local government shall reasonably 186 determine that all of the following conditions have been met: 187 1.All property taxes and any other assessments levied on 188 the same bill as property taxes are paid and have not been 189 delinquent for the preceding 3 years or the property owners 190 period of ownership, whichever is less. 191 2.There are no involuntary liens, including, but not 192 limited to, construction liens on the property. 193 3.No notices of default or other evidence of property 194 based debt delinquency have been recorded during the preceding 3 195 years or the property owners period of ownership, whichever is 196 less. 197 4.The property owner is current on all mortgage debt on 198 the property. 199 (10)To constitute an improvement to the building or 200 facility, a qualifying improvement must be shall be affixed to a 201 building or facility that is part of the property and shall 202 constitute an improvement to the building or facility or a 203 fixture attached to the building or facility. A financing 204 agreement may be executed for qualifying improvements in the 205 construction of a commercial property before a certificate of 206 occupancy or similar evidence of substantial completion of new 207 construction or improvement is issued. Progress payments, or 208 payments made before completion, are allowed for commercial 209 properties, provided that the property owner subsequently 210 provides, upon request for a final progress payment 211 disbursement, written verification to the local government 212 confirming that the qualifying improvements are completed and 213 operating as intended. An agreement between a local government 214 and a qualifying residential property owner may not cover wind 215 resistant wind-resistance improvements in buildings or 216 facilities under new construction or construction for which a 217 certificate of occupancy or similar evidence of substantial 218 completion of new construction or improvement has not been 219 issued. 220 (12)(a)Without the consent of the holders or loan 221 servicers of any mortgage encumbering or otherwise secured by 222 the residential property, the total amount of any non-ad valorem 223 assessment for a property under this section may not exceed 20 224 percent of the just value of the property as determined by the 225 county property appraiser. 226 (b)Notwithstanding paragraph (a), a non-ad valorem 227 assessment for a qualifying improvement defined in subparagraph 228 (2)(b)1. or subparagraph (2)(b)2. on a residential property that 229 is supported by an energy audit is not subject to the limits in 230 this subsection if the audit demonstrates that the annual energy 231 savings from the qualified improvement equals or exceeds the 232 annual repayment amount of the non-ad valorem assessment. 233 (c)Before entering into a financing agreement with a 234 commercial property owner, the local government must be in 235 receipt of the written consent of the current holders or loan 236 servicers of any mortgage that encumbers or is otherwise secured 237 by the commercial property or that will otherwise be secured by 238 the property at the time the financing agreement is executed by 239 the local government. 240 (13)At least 30 days before entering into a financing 241 agreement, the property owner shall provide to the holders or 242 loan servicers of any existing mortgages that encumber the 243 property, encumbering or that will otherwise be otherwise 244 secured by the property at the time the financing agreement is 245 executed by the local government, a notice of the owners intent 246 to enter into a financing agreement together with the maximum 247 principal amount to be financed and the maximum annual 248 assessment necessary to repay that amount. A verified copy or 249 other proof of such notice must shall be provided to the local 250 government. A provision in any agreement between a mortgagee or 251 other lienholder and a property owner, or otherwise now or 252 hereafter binding upon a property owner, which allows for 253 acceleration of payment of the mortgage, note, or lien or other 254 unilateral modification solely as a result of entering into a 255 financing agreement as provided for in this section is not 256 enforceable. This subsection does not limit the authority of the 257 holder or loan servicer to increase the required monthly escrow 258 by an amount necessary to annually pay the annual qualifying 259 improvement assessment. 260 (14)At or before the time a purchaser executes a contract 261 for the sale and purchase of any property for which a non-ad 262 valorem assessment has been levied under this section and has an 263 unpaid balance due, the seller shall give the prospective 264 purchaser a written disclosure statement in the either of the 265 following forms form, which must shall be set forth in the 266 contract or in a separate writing. 267 (a)For a commercial property: 268 269 QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY, 270 RENEWABLE ENERGY, OR RESILIENCY WIND RESISTANCE.The 271 property being purchased is located within the 272 jurisdiction of a local government that has placed an 273 assessment on the property pursuant to s. 163.08, 274 Florida Statutes. The assessment is for a qualifying 275 improvement to the property relating to energy 276 efficiency, renewable energy, or resiliency wind 277 resistance, and is not based on the value of property. 278 You are encouraged to contact the county property 279 appraisers office to learn more about this and other 280 assessments that may be provided by law. 281 282 (b)For a residential property: 283 284 QUALIFYING IMPROVEMENTS FOR ENERGY EFFICIENCY, 285 RENEWABLE ENERGY, OR RESILIENCY.The property being 286 purchased is located within the jurisdiction of a 287 local government that has placed an assessment on the 288 property pursuant to s. 163.08, Florida Statutes. The 289 assessment is for a qualifying improvement to the 290 property relating to energy efficiency, renewable 291 energy, or resiliency, and is not based on the value 292 of property. You are encouraged to contact the county 293 property appraisers office to learn more about this 294 and other assessments that may be provided by law. 295 296 (17)This section is prospective only and does not affect 297 or amend any existing non-ad valorem assessment or any existing 298 interlocal agreement between local governments. 299 Section 2.This act shall take effect July 1, 2023.