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ACT No. 611
Regular Session, 2010
HOUSE BILL NO. 973
BY REPRESENTATIVE FOIL
AN ACT1
To amend and reenact R.S. 33:130.812 (B) and (C) and to enact R.S. 33:130.812(D), relative2
to Sustainable Energy Financing Districts; to provide relative to financing for3
projects in such districts; to provide for property assessment and collection of such4
assessments within such districts; to provide for notice of program loan; to provide5
terms, conditions, and requirements; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 33:130.812 (B) and (C) are hereby amended and reenacted and R.S.8
33:130.812(D) is hereby enacted to read as follows: 9
§130.812. Financing for projects10
* * *11
B.(1) The owner of residential or commercial immovable property within the12
district may request financing in the form of a loan from the district to cover the13
costs of energy efficiency improvements or renewable energy improvements that the14
owner contracts to make to the immovable property. Such financing shall include15
interest rates and administrative fees as determined by the district. The district shall16
accept or reject the request according to criteria established by the district and make17
such loan upon terms and conditions that shall be set forth in the ordinance or18
resolution. However, the term for repayment of a loan, together with interest rates19
and administrative fees, shall not exceed twenty years.20
(2) In the event that the property for which an energy efficiency21
improvement or renewable energy improvement loan is sought is encumbered by a22
mortgage, then the total amount lent for such property shall not exceed ten percent23
of the reasonable expected fair market value of the property, determined using an24 ENROLLEDHB NO. 973
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appropriate value test, which may include an assessment of the reasonable expected1
value of the property with the completed improvements on the property as defined2
and provided in program rules, or the price of the property at its last sale.3
(3) No owner of immovable property shall be eligible for a loan from a4
district unless there is available equity in the property, meaning that the current value5
as determined using an appropriate value test of the subject property exceeds the6
current mortgage loan balances for the mortgage loans encumbering the subject7
property, and that the dollar amount of loans from the district for a particular8
property shall not exceed the remaining equity value in the property. The total loan-9
to-value ratio for all loans secured by the immovable property shall not exceed one10
hundred percent. The calculation of equity value used to determine the maximum11
amount of financing available for a particular property may take into account the12
reasonable expected value of the property with the proposed energy efficiency or13
renewable energy improvements installed.14
(4) The maximum amount of any assessment to be repaid in any year shall15
not exceed the amount of principal and interest for the current year based on the16
amortization schedule for the loan. In the event of nonpayment or default, there shall17
be no acceleration of the debt, and tax delinquency shall exist only for assessments18
not paid when due.19
(5) In order to qualify for financing, the property owner shall be current on20
all outstanding mortgage loans encumbering the property upon which the energy21
efficiency improvements or renewable energy improvements are proposed to be22
installed.23
(6) In order to qualify for financing, the property owner shall demonstrate24
an ability to repay the loan as specified in the program rules.25
(7) It shall be required that an appropriate evaluation such as energy audit26
or renewable energy system feasibility study be conducted on the qualifying real27
property and reviewed by the district prior to approval of the financing.28
(8) Where energy efficiency or renewable energy improvements are29
proposed to be installed on residential properties, the district shall make written30 ENROLLEDHB NO. 973
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verification that the improvements are installed and all work is completed1
satisfactorily before program loan funds are disbursed. In the alternative, funds for2
improvements may be disbursed based on multiple stages of completion, and loan3
funds for a particular stage of completion shall not be disbursed until the district4
conducts written verification that the corresponding stage of work is satisfactorily5
completed.6
(9) All energy efficiency and renewable energy improvements financed by7
the program shall be performed by duly qualified contractors, subcontractors, or8
tradesmen pursuant to program rules.9
(10)(a) Where an energy efficiency or renewable energy improvements loan10
in the amount of one hundred thousand dollars or more is proposed for a commercial11
property and that property is encumbered by a mortgage, the mortgagee, its12
successors or assigns, or mortgage servicer shall be provided prior written notice, by13
certified mail, return receipt requested of the proposed program loan. The14
mortgagee, its successors or assigns, or mortgage servicer shall have thirty days after15
receipt of such notice to approve or deny the proposed program loan. The notice16
shall contain the following information:17
(i) The proposed borrower's name.18
(ii) The description of the property for which the proposed improvements are19
to be made.20
(iii) A description of the improvements to be made.21
(iv) The proposed dollar amount to be loaned.22
(v) The proposed amortization period in which the loan is to be repaid.23
(vi) A statement that the mortgagee, its successors or assigns, has thirty days24
from receipt of the notice to approve or deny the proposed loan.25
(vii) The name and address of the office where to submit a written approval26
or denial of the proposed loan.27
(b) If the mortgagee, its successors or assigns, or mortgage servicer approves28
the proposed loan or fails to give a written denial of the proposed program loan to29
the local government subdivision or district within the thirty day period, then the30 ENROLLEDHB NO. 973
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parties may proceed with the program loan without further notice to the mortgagee,1
its successors or assigns or mortgage servicer. In the event the mortgagee, its2
successors or assigns, or mortgage servicer provides a written denial, then the3
proposed loan shall not be made.4
C.(1) The If agreed by the district, the amount of the loan including interest5
rates and administrative fees shall be assessed against the immovable property upon6
which the improvements are placed and shall be collected in the same manner as is7
provided for the ad valorem taxes assessed on the property by the local governmental8
subdivision creating the district. In order to secure repayment of loans, upon entering9
into a program loan with a borrower, the local government subdivision creating a10
district shall file a statement of lien with the recorder of mortgages for the parish in11
which the property is located. The lien or privilege shall be for the full amount of12
the program loan and shall take effect against third persons upon filing the statement13
of lien with the appropriate recorder of mortgages for the parish where the property14
is located. The lien shall rank equivalent to that of ad valorem taxes or local15
assessments and liens and privileges as provided in La. R.S. 9:4821(1). The16
statement of lien shall contain the following:17
(a) Identity of the lienholder, including a contact name, address, and phone18
number.19
(b) Identity of borrower, including borrower's full name, domicile, and20
permanent mailing address, and last four digits of the borrower's social security21
number or taxpayer identification number, whichever is applicable.22
(c) Legal description of the property encumbered by the lien.23
(d) Date that the lien is created, which means the date that the loan24
agreement or promissory note is signed.25
(e) Dollar amount of the loan for which the lien is created.26
(f) Maturity date of the loan for which the lien is created.27
(2) The district may enter into any necessary agreement with the sheriff or28
other local ad valorem property tax collector for assessing and collecting the29 ENROLLEDHB NO. 973
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assessment provided for in this Subsection, including provisions for reimbursing the1
sheriff or other collector for the cost of such assessment and collection.2
(3) Upon failure of the property owner to pay the current year’s assessment3
when due within thirty days of receipt, the local governmental subdivision and4
district shall have the right to enforce the lien and privilege to recover and collect the5
current year's payment or assessment along with any prior year's payment or6
assessment remaining delinquent. may file a certified copy of said charges with the7
recorder of mortgages, and the same, when so filed and recorded, shall operate as a8
lien and privilege in favor of the local governmental subdivision and district. Such9
The such lien and privilege shall have the same ranking as an ad valorem tax lien on10
immovable property as provided in R.S. 9:4821(1), and may be enforced and11
collected by ordinary civil proceeding in accordance with La. C.C.P. Articles 851 et12
seq. or by executory process if the loan documentation contains a confession of13
judgment or by any other applicable state law to enforce and collect the amount due14
or enforced and collected as any ordinary a property tax lien assessed against the15
property and collected in any the manner fixed for collection of taxes tax and subject16
to the same civil penalties for delinquencies, together with attorneys' fees and costs17
incurred in notification to the owner and the enforcement and collection of the18
amounts owed.19
(4) The duration of the effect of recordation of a statement of lien, the20
method of reinscription of the statement of lien, and the cancellation of recordation21
of a statement of lien after the effect of recordation has ceased shall be governed by22
the provisions of Chapter 2 of Title XXII-A, of Registry, of Book III of the23
Louisiana Civil Code and treated like a mortgage for such purposes.24
(5) In the event that a program loan is paid in full, then the district shall25
provide written evidence of cancellation and release of its lien and have it recorded26
in the public mortgage records for the parish where the immovable property is27
located.28
(6) Prepayment of the remaining balance of energy efficiency and renewable29
energy improvement program loans is permitted.30 ENROLLEDHB NO. 973
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D. A loan financing program for energy efficiency improvements or1
renewable energy improvements for residential property shall both:2
(1) Impose requirements and conditions on financing arrangements to ensure3
timely repayment.4
(2) Require disclosures to borrowers by the district of the risks involved in5
borrowing, including the risk of foreclosure if a tax delinquency results from default.6
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: