HomeMy WebLinkAboutRes 2021-11-1045 PACE Program EstablishmentCITY OF ANNA, TEXAS
RESOLUTION NO.
A RESOLUTION OF THE CITY OF ANNA, TEXAS ESTABLISHING A PROGRAM UNDER THE
TEXAS PROPERTY ASSESSED CLEAN ENERGY ("PACE") ACT OF 2013 FOR THE CITY
OF ANNA, AS PROVIDED BY TEXAS LOCAL GOVERNMENT CODE CHAPTER 399.
WHEREAS, the 831d Regular Session of the Texas Legislature enacted the Property Assessed
Clean Energy Act, Texas Local Government Code Chapter 399 (the "PACE Act"), which allows
the governing body of a local government, including a City or County, to designate an area of the
territory of the local government as a region within which an authorized representative of a local
government and the record owners of commercial, industrial, and large multifamily residential (5
or more dwelling units) real property may enter into written contracts to impose assessments on
the property to repay the financing by the owners of permanent improvements fixed to the property
intended to decrease energy or water consumption or demand;
WHEREAS, the installation or modification by property owners of qualified energy or water saving
improvements to commercial, industrial, and large multifamily residential real property in the City
of Anna (the "City") will further the goals of energy and water conservation without cost to the
public;
WHEREAS, the City of Anna City Council (the "City Council") finds that third -party financing of
energy and water conserving projects through contractual assessments maintained by the City
("PACE financing") furthers essential government purposes, including but not limited to, economic
development, reducing energy consumption and costs, conserving water resources, and reducing
greenhouse gas emissions;
WHEREAS, on October 26, 2021 the City Council adopted Resolution No. 2021-10-1031 giving
notice of an intent to establish a program under the PACE Act, including a reference to the report
on the proposed program prepared as required by Section 399.009 of the PACE Act and made
the report available to the public on the City's website and for inspection at City Hall;
WHEREAS, City Council finds that the administration of the PACE program by a qualified non-
profit organization as an independent third -party Authorized Representative contracted by the City
and compensated by application and administration fees paid by the participating property
owners, will enable the program to be administered without use of City resources, will assure the
objectives of impartiality and confidentiality of owner information, and will be convenient and
advantageous to the City; and
WHEREAS, City Council also finds that because no City funds will be expended for PACE
financing of the Authorized Representative's services, the selection of such an independent third -
party Authorized Representative is not subject to the Professional Services Procurement Act or
other City purchasing requirements; and
WHEREAS, City Council held a public hearing on November 9, 2021 at 6:30 p.m. in the Anna
ISD Board Room at 201 E. 7t" Street, Anna, Texas 75409, at which the public could comment on
the proposed program, including the report available for public inspection as mentioned above
and as required by Section 399.008(a)(2);
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANN,
TEXAS:
Section 1. Recitals Incorporated.
The recitals to this Resolution are true and correct and are incorporated into this Resolution for
all purposes.
Section 2. Establishment of Program.
The City hereby adopts this Resolution Establishing the Anna Property Assessed Clean Energy
Program ("Anna PACE"), herein called "the Program," and finds that financing qualified projects
through contractual assessments pursuant to the PACE Act is a valid public purpose and is
convenient and advantageous to the City and its citizens.
Section 3. Contractual Assessments.
The City will, at the property owner's request, impose contractual assessments on the property to
repay PACE financing for qualified energy and water conserving projects available to owners of
privately owned commercial, industrial, and large multifamily property.
Section 4. Qualified Projects.
The following types of projects are qualified projects for PACE financing that may be subject to
such contractual assessments:
Projects that (a) involve the installation or modification of a permanent
improvement fixed to privately owned commercial, industrial, or residential real
property with five (5) or more dwelling units, and (b) are intended to decrease
energy or water consumption or demand, including a product, device, or
interacting group of products or devices on the customer's side of the meter that
uses energy technology to generate electricity, provide thermal energy, or
regulate temperature.
An assessment may not be imposed to repay the financing of facilities for
undeveloped lots or lots undergoing development at the time of the assessment
or the purchase or installation of products or devices not permanently fixed to real
property.
Section 5. Region.
The boundaries of the entire geographic area within the City's jurisdiction including the City's
extraterritorial jurisdiction ("ETJ") are included in the boundaries of the region where PACE
financing and assessments can occur.
Section 6. Third- Party Financing.
Financing for qualified projects under the Program will be provided by qualified third -party lenders
chosen by the owners. Such lenders will execute written contracts with the Authorized
Representative to service the debt through assessments, as required by the PACE Act. The
contracts will provide for the lenders to determine the financial ability of owners to fulfill the
financial obligations to be repaid through assessments, advance the funds to owners on such
terms as are agreed between the lenders and the owners for the installation or modification of
qualified projects, and service the debt secured by the assessments, directly or through a servicer,
by collecting payments from the owners pursuant to financing documents executed between the
lenders and the owners. City will maintain and continue the assessments for the benefit of such
lenders and will enforce the assessment lien for the benefit of a lender in the event of a default
by an owner. City will not, at this time, provide financing of any sort for the Anna PACE program.
Section 7. Authorized Representative.
City Council designates Texas PACE Authority, a non-profit organization, to act as the Authorized
Representative with authority to enter into written contracts with the record owners of real property
in the City and its ETJ to impose assessments pursuant to the PACE Act to repay the financing
of qualified projects on the owners' property, to enter into written contracts with the parties that
provide third -party financing for such projects to service the debts through assessments, and to
file written notice of each contractual assessment in the real property records of Collin County, all
on behalf of Anna. The Authorized Representative may make technical and conforming updates
as necessary so long as the changes are consistent with this resolution to establish the PACE
program and the statute. The City Manager or his designee will be the liaison with the Authorized
Representative.
Section 8. Enforcement.
The City will enforce the collection of past due assessments and may contract with a qualified law
firm to assist in collection efforts.
Section 9. Report.
The final report on the Anna PACE program, prepared in accordance with Section 399.009 of the
Texas Local Government Code is attached and incorporated into this resolution. The City will post
this resolution and report on the City's website.
Section 10. Amendment of Program.
The City Council may amend the Anna PACE Program by resolution. However, another public
hearing is required before the Anna PACE Program may be amended to provide for City financing
of qualified improvements through assessments.
DULY PASSED by the City Council of the City of Anna, Texas, this gth day of November 2021.
\\p�attu,
ATTESTED: �,��` of: Afd! APPROVED-
oe
Carrie L. Land = °• N t Pike
City Secretary = Mayor
REPORT REQUIRED BY TEXAS LOCAL GOVERNMENT CODE SECTION 399.009
FOR PROPOSED PROPERTY ASSESSED CLEAN ENERGY (PACE) PROGRAM
This Report is adopted by the City Council for Anna, Texas ("Local Government") Property
Assessed Clean Energy (PACE) Program (the "Program") in accordance with the requirements
of the Property Assessed Clean Energy Act (the "PACE Act") as set forth in Texas Local
Government Code Chapter 399.
The Local Government and its constituents benefit when older existing buildings are modified
with new technology and equipment that increases energy efficiency and reduces water
consumption. As described in this Report, the Local Government is establishing the commercial
PACE Program to encourage private sector investment in energy efficiency and water
conservation. The PACE Program will be offered to property owners on a strictly voluntary
basis and will not require the use of any public funds or resources.
Authorized under the PACE Act enacted in 2013, the PACE program is an innovative financing
program that enables private sector owners of privately owned commercial, industrial, and multi-
family residential properties with five or more dwelling units to obtain low-cost, long-term loans
to pay for water conservation, energy -efficiency improvements, and renewable energy retrofits.
PACE loans provide up to 100% financing of all project costs, with little or no up -front out-of-
pocket cost to the owner. The Local Government has chosen to follow the administrative
principles, program processes, and model documents of the uniform Texas PACE in a Box
model program.I
Loans made under the PACE Program will be secured by assessments on the property that are
voluntarily imposed by the owner. Assessments maybe amortized over the projected life of the
improvements. The utility cost savings derived from improvements financed with PACE loans
are expected to equal or exceed the amount of the assessment. In turn, these improvements are
able to generate positive cash flow upon installation because the debt service will be less than the
savings.
PACE assessments are tied to the property and follow title from one owner to the next. Each
owner is responsible only for payment of the assessments accruing during its period of
ownership. When the property is sold, the payment obligation for the remaining balance of the
assessment is transferred automatically to the next owner. As a result, the program will help
property owners overcome market barriers that often discourage investment in energy efficiency
and water conservation improvements.
https://www.keepingpaceintexas.org/pace-in-a-box
1
1. Eligible Properties
The Local Government's PACE program is a strictly voluntary program. All private sector
owners of Eligible Properties located within the Local Government's PACE region may
participate in PACE financing. "Eligible Properties" include commercial, industrial, and multi-
family residential properties with five or more dwelling units. Government, residential2, and
undeveloped property and property undergoing development at the time -of the assessment are
not Eligible Properties.
2. Qualified Improvements
PACE financing may be used to pay for Qualified Improvements to Eligible Properties.
"Qualified Improvements" are permanent improvements intended to decrease water or energy
consumption or demand, including a product, device, or interacting group of products or devices
on the customer's side of the meter that use energy technology to generate electricity, provide
thermal energy, or regulate temperature. Under the PACE Act, products or devices that are not
permanently fixed to real property are not considered to be Qualified Improvements.
The following items may constitute Qualified Improvements:
• High efficiency heating, ventilating and air conditioning ("HVAC") systems
• High efficiency chillers, boilers, and furnaces
• High efficiency water heating systems
• Energy management systems and controls
• Distributed generation systems
• High efficiency lighting system upgrades
• Building enclosure and envelope improvements
• Water conservation and wastewater recovery and reuse systems
• Combustion and burner upgrades
• Heat recovery and steam traps
• Water management systems and controls (indoor and outdoor)
• High efficiency irrigation equipment
3. Benefits of PACE to Property Owners
The PACE program will enable owners of Eligible Properties to overcome traditional barriers to
capital investments in energy efficiency and water conservation improvements, such as
unattractive returns on investment, split incentives between landlords and tenants, and
uncertainty of recouping the investment upon sale of the property.
By financing Qualified Improvements through the program, property owners may achieve utility
cost savings that exceed the amount of the assessment and reduce their exposure to utility price
volatility. As a result, the value of the property will be enhanced, and the owner will only be
obligated to pay the assessment installments that accrue during its period of ownership of the
property. Additionally, by investing in energy efficiency and water conservation with PACE
This encompasses single family residential and any multi -family properties with fewer than five units.
financing, property owners may also qualify for various rebate, tax credit, and incentive
programs offered by utility providers and state or federal governmental authorities to encourage
these types of investments.
4. Benefits of PACE to the Local Government
Among other things, projects financed through PACE will:
• Enable property owners and occupants to save substantial amounts in utility costs,
• Reduce demand on the electricity grid
• Mitigate greenhouse gas emissions associated with energy generation
• Enhance the value and efficiency of existing buildings
• Boost the local economy by creating new job opportunities and new business
opportunities for contractors, engineers, commercial lenders, professionals, and
equipment vendors and manufactures
• Increase business retention and expansion in the PACE region by enabling cost effective
energy and water saving updates to existing property
• Improve productivity through optimized energy usage
• Support the State's water conservation plan
• Better enable the Local Government to meet its water conservation goals
Finally, through the reduction in energy consumption as a result of the PACE program, there will
be a decreased demand for power resulting in lower emissions from power plants. EPA
regulations have significant impacts on air quality standards in Texas. Being non -attainment for
priority pollutants in the Clean Air Act endangers federal transportation funding.
The PACE program requires minimal support from the Local Government. It is designed to be
self-sustaining. Furthermore, because the PACE program is tax neutral, it achieves all of the
benefits listed in this Report without imposing a burden on the Local Government's general
fund.
The 841 Texas Legislature added a provision that explicitly shields the Local Government and
its employees, members of the governing body of a local government, employees of a local
government, and board members, executives, employees, and contractors of a third party who
enter into a contract with a local government to provide administrative services for a program
under this chapter.3
5. The Benefits of PACE to Lenders
PACE loans are attractive to lenders because they are very secure investments. Like a property
tax lien, the assessment lien securing the PACE loan has priority over other liens on the property.
Therefore, the risk of loss from non-payment of a PACE loan is low compared to most other
types of loans. PACE assessments provide lenders with an attractive new product to assist
3 TX. Local Gov't Code §399.019. In the 85th legislature, HB 2654 clarified that the personal immunity
provisions apply to all elected officials performing rights and duties under chapter 399 of the Local Government
Code.
existing and new customers in addressing an almost universal pent-up demand for needed
commercial and industrial property equipment modernization. In order to protect the interests of
holders of existing mortgage loans on the property, the PACE Act requires their written consent
to the PACE assessment as a condition to obtaining a PACE loan.
6. The Benefits of PACE to Contractors, Engineers, and Manufacturers
PACE loans provide attractive sources of financing for water and energy saving retrofits and
upgrades, thereby encouraging property owners to make substantial investments in existing
commercial and industrial buildings. As a result, PACE will unlock business opportunities for
contractors, engineers, and manufacturers throughout the commercial and industrial sectors.
7. Administration of the Local Government PACE Program
Under the PACE Act, the establishment and operation of the program are considered to be
governmental functions.' The PACE Act further authorizes the Local Government to enter into a
contract with a third party to provide administrative services for the PACE program (the
"Authorized Representative'�. The Local Government will delegate administration of the
PACE program to Texas PACE Authority, a qualified, non-profit organization that can
administer the program at no cost to the Local Government.
The Authorized Representative's role is to serve as an extension of the local government staff to
provide oversight of the program to ensure best practices and consumer protections at the lowest
possible cost to the property owner in a transparent and ethical manner and to provide education
and outreach.
The Authorized Representative will be funded by administrative fees paid by the property
owners establishing a PACE project, charitable grants or other authorized sources of revenue.
The Authorized Representative will not receive compensation or reimbursement from the Local
Government.
8. Eligible Lenders
The PACE Act does not set criteria for financial institutions or investors to be PACE lenders.
The Local Government will follow best practices of other PACE programs and the Texas PACE
in a Box model program by recommending that lenders be:
■ Any federally insured depository institution such as a bank, savings bank, savings and
loan association and federal or state credit union;
■ Any insurance company authorized to conduct business in one or more states;
■ Any registered investment company, registered business development company, or a
Small Business Administration small business investment company;
■ Any publicly traded entity; or
■ Any private entity that:
o Has a minimum net worth of $5 million; and
TX Local Government Code §399.003(b)
4
o Has at least three years' experience in business or industrial lending or commercial
real estate lending (including multifamily lending), or has a lending officer that has
at least three years' experience in business or industrial lending or commercial real
estate lending; and
o Can provide independent certification as to availability of funds; and
All lenders must have the ability to carry out, either directly or through a servicer, the
bookkeeping and customer service work necessary to manage the assessment accounts.
Any lender can participate in the PACE program as long as it is a financially stable entity with
the ability to cant' out, either directly or through a servicer, the bookkeeping and customer
service work necessary to manage the assessment accounts. The property owner, not the Local
Government or the Authorized Representative, selects the lender.
The Authorized Representative will not guarantee or imply that funding will automatically be
provided from a third -party lender, imply or create any endorsement of, or responsibility for, any
lender; or create any type of express or implied favoritism for any eligible lender.
9. Components of the PACE Program
As required under Section 399.009 of the PACE Act, the following describes all aspects of the
PACE Program:
a. Map of Region. A map of the boundaries of the region included in the
program is attached to this Report as Exhibit 1. The region encompasses the
Local Government limits including the City's extraterritorial jurisdiction.
b. Form Contract with Owner. A form contract between the Local Government
and the record owner of the Eligible Property is attached as Exhibit 2. It
specifies the terms of the assessment under the PACE program and the financing
to be provided by an Eligible Lender of the property owner's choosing.
c. Form Contract with Lender. A form contract between the Local Government
and the Eligible Lender chosen by a property owner is attached to this Report as
Exhibit 3. It specifies the financing and servicing of the debt through
assessments.
Form Notice of Contractual Assessment Lien. A form Notice of Assessment Lien
to be filed by the Local Government with the County Clerk is attached to this
Report as Exhibit 4.
d. Qualified Improvement. The following types of projects are qualified
improvements that may be subject to contractual assessments under the PACE
program:
Projects that (a) involve the installation or modification of a
permanent improvement fixed to privately owned commercial,
industrial or residential real property with five (5) or more
dwelling units;s and (b) are intended to decrease energy or water
consumption or demand by installing a product, device, or
interacting group of products or devices on the customer's side of
the meter that uses energy technology to generate electricity,
provide thermal energy, or regulate temperature. 6
A sample list of potential Qualified Improvements appears in Section 2 above.
The PACE program may not be used to finance improvements to undeveloped
lots or lots undergoing development at the time of the assessment, or for the
purchase or installation of products or devices not permanently fixed to real
property.'
e. Authorized Representative. HB 3187 was signed into law on June 16, 2015. It
authorizes the Local Government to delegate administration of the PACE
program to a third -party "Authorized Representative." The Local Government
may delegate all official administrative responsibilities, such as the execution of
individual contracts with property owners and lenders, to an Authorized
Representative. This relationship will be monitored and maintained by the City
Manager or his/her designee.
f. Project Review. Track and provide a public overview with savings metrics for
all PACE projects
g. Plans for Insuring Sufficient Ca in•tals• Lenders will extend loans to finance
Qualified Improvements. Financing documents executed between owners and
lenders will impose a contractual assessment on Eligible Property to repay the
owner's financing of the Qualified Improvements. The lenders will ensure that
property owners demonstrate the financial ability to fulfill the financial
obligations to be repaid through contractual assessments.
h. No Use of Bonds or Public Funds. The Local Government does not intend to
issue bonds or use any other public monies to fund PACE projects. Property
I
wners will obtain all financing from the Eligible Lenders they choose.
i. Limit on Length of Loan. One of the statutory criteria of a PACE loan is that
the assessment payment period cannot exceed the useful life of the Qualified
Improvement that is the basis for the loan and assessment. As part of the
application process, the property owners will submit an independent third -party
review prepared by a licensed engineer showing the water or energy baseline
5 TX. Local Gov't Code §399.002(5).
6 TX. Local Gov't Code §399.002(3).
TX. Local Gov't Code §399.004.
8 The Texas PACE Authority's website (www.texaspaceauthority.org) offers a non -exhaustive list of
interested and qualified lenders to assist property owners in funding PACE projects in Texas.
conditions and the projected water or energy savings. This review will aid the
Authorized Representative in making a determination that the period of the
requested assessment does not exceed the useful life of the Qualified
Improvement.
j. Application Process. The Authorized Representative will accept applications
from property owners seeking to finance Qualified Improvements under the
program. Each application must be accompanied by the required application fee
and must include:
(1) A description of the specific Qualified Improvements to be installed or
modified on the property,
(2) A description of the specific real property to which the Qualified
Improvements will be permanently fixed, and
(3) The total amount of financing, including any transaction costs, to be
repaid through assessments.
Based on this information, the Authorized Representative may issue a preliminary
letter indicating that, subject to verification of all requirements at closing, the
proposed project appears to meet program requirements. Based on this
preliminary letter, the property owner may initiate an independent third -party
review of the project and submit the project to Eligible Lenders for approval of
financing.
Once the above processes are completed, the property owner will submit the
application to the Authorized Representative to obtain preliminary approval. The
property owner is expected to produce the following documentation prior to
closing on the PACE loan:
(1) A Report conducted by a qualified, independent third -party reviewer,
showing water or energy baseline conditions and the projected water or
energy savings, or the amount of renewable energy generated attributable
to the project;
(2) Such financial information about the owner and the property as the
lender chosen by the owner deems necessary to determine that the owner
has demonstrated the financial ability to fulfill the financial obligations to
be paid through assessments; and
(3) All other information required by the Authorized Representative.
k. Financial Eli Yg'bility Requirements. The Authorized Representative will
determine whether the owner, the property and the improvements are eligible for
financing under the program. The Eligible Lender chosen by the owner will
determine whether the owner has demonstrated the financial ability to repay the
financial obligations to be collected through contractual assessments. The
statutory method9 for ensuring such a demonstration of financial ability must be
based on appropriate underwriting factors, including the following:
TX. Local Gov't Code §399.009(b).
(1) verification that the person requesting to participate in the program is
the legal record owner of the benefitted property,
(2) the applicant is current on mortgage and property tax payments,
(3) the applicant is not insolvent or in bankruptcy proceedings,
(4) the title of the benefitted property is not in dispute; and
(5) there is an appropriate ratio of the amount of the assessment to the
assessed value of the property. The Local Government determines that it
will follow the Texas PACE in a Box model program recommendation for
determining the appropriate loan to assessed value of the property.
The Local Government determines to be eligible for PACE financing, the
projected savings derived from the Qualified Improvement must be greater
than the cost of the PACE assessment and lien over the life of the
assessment (i.e., the Savings to Investment Ratio (SIR) should be greater
than one, SIR>1). Athird-party lender and a for profit -property owner
may request a waiver in writing for a project with an SIR < 1 and address
the interests of tenants and future property owners. The Authorized
Representative may consider factors in a variance request including:
(a). Are there other environmental benefits such as air or water
quality or resiliency that are not captured in the SIR analysis;
(b) Will the proposed qualifying improvements generate
environmental marketable credits that can be monetized?
(c). What is the SIR calculation for the project (how far below 1?);
(d). If the SIR is < 1 over the term of the assessment, is the SIR > 1
over the useful life of the equipment?
(e). What is the impact of a variance request on affected third
parties? and
(f) Other information the owner and lender wish to submit
regarding the impact of the qualified improvements on the
company and the community.
1. Mortgage Holder Notice and Consent. As a condition to the execution of a
written contract between the Authorized Representative and the property owner
imposing an assessment under the program, the holder of any mortgage lien on
the property must be given notice of the owner's intention to participate in the
program on or before the 341h day before the date the contract is executed, and
the owner must obtain the written consent of all mortgage holders. 1 o
m. Imposition of Assessment. The Authorized Representative will enter into a
written contract with the property owner, only after:
(1) The property owner delivers to the Authorized Representative written
consent of all mortgage lien holders;
(2) The Authorized Representative's determination that the owner and the
property are eligible to participate in the program, that the proposed
improvements are reasonably likely to decrease energy or water
10 TX. Local Gov't Code §399.010.
consumption or demand, and that the period of the requested assessment
does not exceed the useful life of the Qualified Improvements; and
(3) The Eligible Lender notifies the Authorized Representative that the
owner has demonstrated the financial ability to fulfill the financial
obligations to be repaid through contractual assessments.
The contract will impose a contractual assessment on the owner's Eligible
Property to repay the lender's financing of the Qualified Improvements. The
Authorized Representative will file "A Notice of Contractual Assessment Lien,"
in substantially the form in Exhibit 4 in the Official Public Records of the County
in which the property is located, as notice to the public of the assessment, from
the date of filing. The contract and the notice must contain the amount of the
assessment, the legal description of the property, the name of the property owner,
and a reference to the statutory assessment lien provided under the PACE Act.
n. Collection of Assessments. The execution of the written contract between the
Local Government and the property owner and recording of the Notice of
Contractual Assessment Lien incorporate the terms of the financing documents
executed between the property owner and with the lender to repay the financing
secured by the assessment. The third -party lender will advance financing to the
owner, and the terms for repayment will be such terms as are agreed between the
lender and the owner. Under the form lender contract attached as Exhibit 3, the
lender or a designated servicer will agree to service the debt secured by the
assessment."
With funds from the lender, the property owner can purchase directly the
equipment and materials for the Qualified Improvement and contract directly,
including through lease, power purchase agreement, or other service contract, for
the installation or modification of the Qualified Improvements. Alternatively, the
lender may make progress payments to the property owner as the Qualified
Improvement is installed.
The lender will receive the owner's assessment payments to repay the debt and
remit to the Authorized Representative any administrative fees. The lender will
have the right to assign or transfer the right to receive the installments of the debt
secured by the assessment, provided all of the following conditions are met:
(1) The assignment or transfer is made to an Eligible Lender, as defined
above;
(2) The property owner and the Authorized Representative are notified in
writing of the assignment or transfer and the address to which payment of
the future installments should be mailed at least 30 days before the next
installment is due according to the schedule for repayment of the debt; and
11 The servicer will be responsible for maintaining payment records, account balances, and reporting to the
Authorized Representative as required.
(3) The assignee or transferee, by operation of the financing documents or
otherwise, written evidence of which shall be .provided, assumes lender's
obligations under the lender contract.
o. Verification Review. After a Qualified Improvement is completed, the
Authorized Representative will require the property owner to provide
verification by a qualified independent third -party reviewer that the Qualified
Improvement was properly completed and is operating as intended.12 The
verification report conclusively establishes that the improvement is a Qualified
Improvement and the project is qualified under the PACE program.13
p. Marketing and Education Services. The Program Administrator will provide
service provider training workshops for contractors, engineers, property
managers and other stakeholders, provide outreach and education for all
stakeholders including presentations, conference booths and individual meetings,
and provide written and electronic materials such as case studies, flyers, and
we inars.
q. The Local Government may subsequently enter into agreements with one or
more other local governments or non-profit organizations that promote energy
and water conservation and/or economic development to provide marketing and
education services for the PACE program.
r. Quality Assurance and Antifraud Measures. The Authorized Representative
will institute quality assurance and antifraud measures for the Program. The
Authorized Representative will review each PACE application for completeness
and supporting documents through independent review and verification
procedures. The application and required attachments will identify and supply
the information necessary to ensure that the property owner, the property itself,
and the proposed project all satisfy PACE program underwriting and technical
standard requirements. Measures will be put in place to provide safeguards,
including a review of the energy and water savings baseline and certification of
compliance with the technical standards manual from an independent third -party
reviewer (ITPR), who must be a registered professional engineer, before the
project can proceed. This review will include a site visit, report, and a letter
from the ITPR certifying that he or she has no financial interest in the project and
is an independent reviewer. After the construction of the project is complete, an
ITPR will conduct a final site inspection and determine whether the project was
completed and is operating properly. The reviewer's certification will also
include a statement that the reviewer is qualified and has no financial interest in
the project.
i2 TX Local Gov't Code §399.011.
13 TX Local Government Code §399.011(a-1)
10
s. Delinquency. Under the terms of the form lender contract attached as Exhibit 3,
if a property owner fails to pay an agreed installment when due on the PACE
assessment, the lender will agree to take at least the following steps to collect the
delinquent installment:
(1) Mail to the owner a written notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first-class
mail, and
(2) Mail to the owner a second notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first-class
mail, at least 30 days after the date of the first notice if the delinquency is
continuing.
If the owner fails to cure the delinquency within 30 days after mailing the second
notice of delinquency, the lender may notify the Authorized Representative of the
owner's default. Pursuant to Texas Local Government Code Section 399.014(c),
the Authorized Representative will initiate steps for the Local Government to
enforce the assessment lien in the same manner as a property tax lien against real
property may be enforced, to the extent the enforcement is consistent with Section
50, Article XVI, of the Texas Constitution. Delinquent installments will incur
penalties and interest in the same manner and at the same rate as delinquent
property taxes, according to Texas Local Government Code Section 399.014(d),
and such statutory penalties and interest will be due to the Local Government to
offset the cost of collection.
If the Local Government files suit to enforce collection, the Local Government
may also recover costs and expenses, including attorney's fees, in a suit to collect
a delinquent installment of an assessment in the same manner and at the same rate
as in suit to collect a delinquent property tax. If a delinquent installment of an
assessment is collected after the filing of a suit, the Local Government will remit
to the lender the net amount of the delinquent installments and contractual interest
collected and remit to the Authorized Representative the amount of any
administrative fees collected but will retain any statutory penalties, interest, and
attorney's fees collected.
11
FORM OWNER, CONTRACT
13
FORM PACE OWNER CONTRACT
THIS PROPERTY ASSESSED CLEAN ENERGY ("PACE") OWNER CONTRACT
including the attached exhibits ("Owner Contract") is made as of the day of
("Effective Date"), by and between the City of Anna, Texas ("Local
Government"), and _("Property Owner"). Local Government
and Property Owner are hereafter referred to collectively as "the parties" or individually as "parry."
RECITALS
A. The Property Assessed Clean Energy Act ("PACE Act"), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
privately owned commercial, industrial, and large multifamily residential (5 or more dwelling
units) real property to impose assessments on the property to finance the cost of permanent
improvements fixed to the property intended to decrease water or energy consumption or demand.
B. Local Government has established a program under the PACE Act pursuant to a
resolution dated , adopted by the ("PACE
Program"), and has designated Texas Property Assessed Clean Energy Authority, d/b/a Texas
PACE Authority as the representative of Local Government ("Authorized Representative")
authorized to enter into the written contracts with the owners of such property and the providers
of such financing described herein, and has designated the entire territory within the boundaries of
the City of Anna, Texas, including the City's extraterritorial jurisdiction, as a region (the
"Region") within which the Authorized Representative and the record owners of such real
property may enter into written contracts to impose assessments to repay the financing by owners
of qualified improvements on the owners' property pursuant to the PACE Program.
C. Property Owner is/are the sole legal and record owner of the qualified "real
property," as defined in Section 399.002 of the PACE Act, within the Region located at
, Texas - (the "Property") (the Property being
more particularly described in the Notice of Contractual Assessment Lien, attached hereto as
Exhibit A).
D. Pursuant to Application number , Property Owner has applied to
Local Government to participate in the PACE Program by installing or modifying on the Property
certain permanent improvements which are intended to decrease water or energy consumption or
demand, and which are or will be fixed to the Property as "qualified improvements", as defined in
Section 399.002 of the PACE Act ("Qualified Improvements"). The installation or modification
of such Qualified Improvements on the Property shall be a "qualified project" as defined in Section
399.002 of the PACE Act (the "Project"). Property Owner has requested that Local Government
v. 7—AR—ONLY PACE Owner Contract
enter into this Owner Contract pursuant to the PACE Act and the PACE Program and has requested
Local Government to impose an assessment (the "Assessment") on the Property as set forth in the
Notice Of Contractual Assessment Lien Pursuant To Property Assessed Clean Energy Act to be
filed in the real property records of Collin County, Texas (the "Notice of Contractual Assessment
Lien"), to repay the financing of such Qualified Improvements. A copy of the Notice of
Contractual Assessment Lien is attached hereto as Exhibit A and made a part hereof. The Property,
Qualified Improvements and Assessment are more fully described in the Notice of Contractual
Assessment Lien.
E. Financing for the Project ("Financing") shall be provided to Property Owner by
("Lender"), a qualified lender selected by Property Owner,
pursuant to a written contract executed by Lender and Local Government as required by Section
399.006(c) of the PACE Act (the "Lender Contract"). The financing includes only those costs
and fees for which an assessment may be imposed under Section 399.006(e) of the PACE Act.
Local Government has agreed to maintain and continue the Assessment for the benefit of Lender
until the Financing, all contractual interest due to Lender ("Contractual Interest"), any
prepayment penalty, and any penalties, interest, fees, and costs due under or authorized by the
PACE Act are paid in full and to release the Assessment upon notice from Lender of such payment,
or to foreclose the lien securing the Assessment for the benefit of Lender upon notice from Lender
of a default in payment by Property Owner.
F. As required by Section 399.010 of the PACE Act, Property Owner represents and
warrants that it has notified the holder(s) of any mortgage liens on the Property at least thirty (30)
days prior to the date of this Owner Contract of Property Owner's intention to participate in the
PACE Program. The written consent of each mortgage holder to the Assessment was obtained on
or prior to the date of this Owner Contract and is attached hereto as Exhibit B and made a part
hereof.
AGREEMENT
The parties agree as follows:
1. Imposition of Assessment. In consideration for the Financing advanced or to be
advanced to Property Owner by Lender for the Project under the PACE Program pursuant to the
Lender Contract, Property Owner hereby requests and agrees to the imposition by Local
Government of the Assessment in the principal amount of $ , as set forth in the
Notice of Contractual Assessment Lien. In the event the actual total of costs and fees for which
an assessment may be imposed under the PACE Act is different from the stated amount or any
other term requires correction, Local Government, Property Owner, and Lender agree to execute
an amended Owner Contract and Lender Contract, as applicable, and Authorized Representative
shall record an amended Notice of Contractual Assessment Lien. The Assessment includes the
application and administration fees authorized by the PACE Program and Section 399.006(e) of
the PACE Act. Property Owner promises and agrees to pay the Assessment, Contractual Interest
thereon, any prepayment penalty, and all penalties, interest, fees, attorney's fees, and costs due
under or authorized by the PACE Act and the financing documents executed between Property
Owner and Lender (the "Financing Documents") described in or copies of which are attached as
2
v. 7—AR—ONLY PACE Owner Contract
Exhibit C attached hereto and made a part hereof by reference. Property Owner shall pay such
amount in care of or as directed by Lender, in satisfaction of the Assessment imposed pursuant to
this Owner Contract and the PACE Act. Accordingly, Local Government hereby imposes the
Assessment on the Property to pay the Financing of the Project, Contractual Interest, any
prepayment penalty, and any penalties, interest, fees and costs due under or authorized by the
PACE Act and the Financing Documents, in accordance with the requirements of the PACE
Program and the provisions of the PACE Act.
2. Maintenance and Enforcement of Assessment. In consideration for Lender's
agreement to advance Financing to Property Owner for the Project pursuant to the Financing
Documents, Local Government agrees to maintain and continue the Assessment on the Property
for the benefit of Lender until the Assessment, Contractual Interest, any prepayment penalty, and
any penalties, interest, fees, attorney's fees, and costs, due under or authorized by the PACE Act,
PACE Program, and the Financing Documents are paid in full, and to release the Assessment upon
notice from Lender of such payment. Local Government agrees to enforce the assessment lien
against the Property at the request of Lender in the event of a default in payment by Property
Owner, in accordance with the provisions set forth in paragraph 5. Authorized Representative shall
deliver an annual notice of assessment to Property Owner by electronic mail each year until the
Assessment is released. If requested by Property Owner by marking the box below, Local
Government agrees to also deliver an annual notice of assessment to Property Owner by first-class
mail in the envelope with the tax bill of the Property each year until the Assessment is released.
1:1 Property OWner requests an annual notice of assessment from Local Government.
Any failure of Local Government or Authorized Representative to deliver an annual notice of
assessment to Property Owner shall not affect the Assessment or Property's Owner's obligations
under this Owner Contract.
3. Installments. The Assessment and Contractual Interest thereon are due and payable
to Lender in installments ("Installments"), according to the payment schedule set forth in the
Financing Documents attached hereto as Exhibit C. The Assessment includes (1) an application
fee paid by Property Owner to Authorized Representative at closing of the Financing, and (2) a
recurring administration fee paid by Property Owner to Authorized Representative until the
Assessment is released. The recurring administration fee amount shall be collected by Lender and
paid to Authorized Representative not later than thirty (30) days after receipt by Lender, unless
otherwise agreed to in writing by Authorized Representative. Notwithstanding the foregoing, in
the event of a delinquency in the payment of any Installment, Lender shall, upon notice to
Authorized Representative, withhold payment of any administration fee due to Authorized
Representative in connection with such Installment until the Installment is paid. Property Owner
agrees that any such temporary withholding shall not reduce the amount of the administration fees
included in the Assessment or due to Authorized Representative. The amounts due to Authorized
Representative are identified in Exhibit C hereto. when the Assessment, Contractual Interest, any
prepayment penalty, and any penalties, interest, fees and costs due under or authorized by the
PACE Act and the Financing Documents, have been paid in full, Local Government's rights under
this Owner Contract shall cease and terminate, except for rights under Sections 18, 20, 21 and 22.
Upon notice from Lender that all amounts due have been paid in full, Authorized Representative
3
v. 7 AR ONLY PACE Owner Contract
shall execute a release of the Assessment and this Owner Contract and record the release. As
required by Section 399.009(a) (8) of the PACE Act, the period during which such Installments
are payable does not exceed the useful life of the Project.
4. Assignment of Right to Receive Installments or Require Enforcement of Lien.
Property Owner acknowledges that Lender has the right, without the consent of Property Owner,
to assign or transfer the right to receive the Installments or require Local Government to enforce
the assessment lien in the event of a default in payment, together with all corresponding
obligations, provided that all of the following conditions are met:
(a) The assignment or transfer is made to a qualified lender as defined in the
Lender Contract;
(b) Properly Owner and Authorized Representative are notified in writing of
the assignment or transfer and the address to which payment of the future Installments
should be mailed not less than 30 days before the next Installment is due according to the
payment schedule included in the Financing Documents, and
(c) The assignee or transferee executes a written assumption agreement
according to the Financing Documents of all of Lender's rights and obligations under the
Lender Contract related to the receipt of the Installments or the enforcement of the
assessment lien and provides a copy of such assumption to Property Owner and Authorized
Representative not later than 10 days after execution of the agreement.
Lender may assign or transfer the right to receive the Installments or the right to require
enforcement of the assessment lien separately. Upon written notice to Property Owner and
Authorized Representative of an assignment or transfer that complies with all of the foregoing
conditions, the assignor shall be released of all of the rights and obligations of the Lender under
such Lender Contract accruing after the effective date of the assignment that are specified in the
assignment or transfer document, and all of such rights and obligations shall be assumed by and
transferred to the assignee. Any attempt to assign or transfer the right to receive the Installments
or require enforcement of the Assessment lien that does not comply with all of the foregoing
conditions is void. Lender shall retain all of the rights and obligations of Lender under the Lender
Contract until such rights and obligations are assigned or transferred according to this section.
5. Lien Priority and Enforcement. Pursuant to Sections 399.014 and 399.015 of the
PACE Act:
(a) Delinquent Installments shall incur penalties and interest on the principal of
the Installment in the same manner and in the same amount as delinquent property taxes,
pursuant to the statutes in effect at the time of default. Under current statutes, a delinquent
Installment incurs a penalty of 6% of the principal amount of the Installment for the first
calendar month it is delinquent plus 1 % for each additional month or portion of a month
the Installment remains unpaid prior to July 1 of the year in which it becomes delinquent.
However, an Installment delinquent on July 1 incurs a total penalty of 12% of the principal
amount of the delinquent Installment without regard to the number of months it has been
4
v. 7—AR—ONLY PACE Owner Contract
delinquent. A delinquent Installment shall also accrue interest on the principal of the
Installment at the rate of 1 % for each month or portion of a month that the Installment
remains unpaid. Subject to paragraph 16 below, penalties, interest, fees, and costs payable
under this paragraph shall be retained by Local Government to compensate it for the cost
of enforcing the Assessment. Additional interest at any default rate imposed by Lender
pursuant to the Financing Documents, along with any other fees that become due pursuant
to the Financing Documents, may be imposed and retained by Lender.
(b) The Assessment and any interest or penalties thereon,
(1) are a first and prior lien against the Property from the date on which
the Notice of Contractual Assessment Lien is recorded in the real property records
of Collin County, Texas as provided by Section 399.013 of the PACE Act, until the
Assessment, interest, or penalty is paid; and
(2) such lien has the same priority status as a lien for any other ad
valorem tax, pursuant to Section 399.014(a)(2) of the PACE Act.
(c) Pursuant to Section 399.014(b) of the PACE Act, the lien created by the
Assessment runs with the land, and any portion of the Assessment that has not yet become
due shall not be eliminated by sale or transfer of the Property, or by foreclosure of (i) a
property tax lien, or (ii) the lien for a delinquent installment of the Assessment. In the
event of a sale or transfer of the Property by Property Owner, the obligation for the
Assessment and the Property Owner's obligations under the Financing Documents shall be
transferred to the succeeding owner without recourse to Lender, Local Government, or
Authorized Representative.
(d) In the event of a default by Property Owner in payment of an Installment
called for by the Financing Documents or the filing of a case under the U.S. Bankruptcy
Code by or against Property Owner, the lien created by the Assessment shall be enforced
by Local Government for the benefit of Lender, in the same manner according to Texas
Tax Code Secs. 33.41 to 34.23 that a property tax lien against real property may be enforced
by a local government, to the extent the enforcement is consistent with Section 50, Article
XVI, Texas Constitution.
(e) In a suit to collect a delinquent Installment of the Assessment, Local
Government shall be entitled to recover costs and expenses, including attorney's fees in the
amount of 15% of the total principal amount of the delinquent Installment, penalties, and
interest due, in the same manner according to Texas Tax Code Sec. 33.48, as amended
from time -to -time, as in a suit to collect a delinquent property tax. Lender shall be entitled
to any additional sums due to it under the Financing Documents in connection with a suit
to collect a delinquent Installment of the Assessment.
(f) As provided in Section 399.014 (a-1) of the PACE Act, after the Notice of
Contractual Assessment Lien is recorded in the real property records of the county in which
the Property is located, the lien created by the Assessment may not be contested on the
5
v. 7 AR ONLY PACE Owner Contract
basis that the improvement is not a "qualified improvement" or the Project is not a
"qualified project", as such terms are defined in Section 399.002 of the PACE Act.
6. Written Contract Required by PACE Act. This Owner Contract constitutes a written
contract for the Assessment between Property Owner and Local Government as required by
Section 399.005 of the PACE Act. The Notice of Contractual Assessment Lien shall be recorded
in the real property records of Collin County, Texas as public notice of the contractual Assessment,
in accordance with the requirements of Section 399.013 of the PACE Act.
7. Qualified Improvements. Property Owner agrees and warrants that all
improvements purchased, constructed, or installed through the Financing obtained pursuant to this
Owner Contract shall be permanently affixed to the Property and shall transfer with the Property
to the transferee in the event of a sale or transfer of the Property. Property Owner agrees to provide
to Authorized Representative within 30 days after the completion of the Project a verification by
an independent third -party reviewer ("ITPR') that the project was properly completed and is
operating as intended. Property Owner agrees that Lender may retain the final advance of
Financing until such verification is submitted or require Property Owner to pay liquidated damages
for a failure to do so, according to paragraph 19 below.
8. Water or Energy Savings. For so long as the Assessment encumbers the Property,
Property Owner agrees, on or before January 31 St of each year, to report to Authorized
Representative the water or energy savings realized through the Project in accordance with the
reporting requirements established by Authorized Representative.
9. Construction and Definitions. This Owner Contract is to be construed in
accordance with and with reference to the PACE Program and PACE Act. Terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the PACE Program or
the PACE Act.
10. Binding Effect. This Owner Contract is binding upon and inures to the benefit of
the parties hereto and their respective heirs, representatives, agents, successors, and assigns.
11. Notices. Unless otherwise specifically provided herein, all notices and other
communications required or permitted by this Owner Contract shall be in writing and delivered by
first-class mail or by electronic mail, addressed to the other party at the address stated below the
signature of such party or at such other address as such party may from time to time designate in
writing to the other party, and shall be effective from the date of receipt.
12. Governing Law and Venue. This Owner Contract shall in all respects be governed
by and construed in accordance with the laws of the State of Texas without regard to Texas' choice
of law provisions. Venue for any disputes or suits between the parties arising from or related to
this Owner Contract shall be in a state court locate in the Region, and the parties consent to the
personal and subject matter jurisdiction of such state court.
13. Entire Agreement. This Owner Contract, including its exhibits, constitutes the
entire agreement between Local Government and Property Owner with respect to the subject
6
v. 7 AR ONLY PACE Owner Contract
matter hereof and may not be amended or altered in any manner except by a document in writing
executed by both parties.
14. Captions. Paragraph and section titles are for convenience of reference only and
shall not be of any legal effect.
15. Counterparts. This Owner Contract may be executed in any number of
counterparts, and each counterpart may be delivered on paper or by electronic transmission, all of
which when taken together shall constitute one agreement binding on the parties, notwithstanding
that all parties are not signatories to the same counterpart.
16. Interest. Interest and penalties in the event of default, as provided above, are
explicitly authorized by Section 399.014(d) of the PACE Act. However, in no event will the total
amount of interest on the Assessment, including statutory interest payable to Local Government
and Contractual Interest payable to Lender under the Financing Documents, exceed the maximum
amount or rate of nonusurious interest that may be contracted for, charged, or collected under
Texas law (the "usury limit"). If the total amount of interest payable to Local Government and
Contractual Interest payable to Lender exceeds the usury limit, the interest payable to Local
Government shall be reduced and any interest in excess of the usury limit shall be credited to the
amount payable to Local Government or refunded. This provision overrides any conflicting
provisions in this Owner Contract.
17. Costs. No provision of this Owner Contract shall require Local Government to
expend or risk its own funds or otherwise incur any financial liability in the performance of any of
its duties hereunder.
18. Inspection and Audits. Local Government's representatives may perform, or have
performed, (a) audits of Property Owner's documents, books and records, and (b) inspections of
all places where Qualified Improvements are undertaken in connection with this Owner Contract.
Property Owner shall keep its documents, books and records available for this purpose for at least
three (3) years after this Owner Contract terminates. This provision does not affect the applicable
statute of limitations.
19. Further Assurances. Property Owner further covenants and agrees to do, execute
and deliver, or cause to be done, executed, and delivered all such further acts for implementing the
intention of this Owner Contract as may be reasonably necessary or required.
20. Release. PROPERTY OWNER AGREES TO AND SHALL RELEASE THE
LOCAL GOVERNMENT, ITS AUTHORIZED REPRESENTATIVES, AGENTS,
EMPLOYEES, OFFICERS, AND LEGAL REPRESENTATIVES (COLLECTIVELY THE
"RELEASED PERSONS") FROM ALL LIABILITY FOR INJURY, DEATH, DAMAGE, OR
LOSS TO PERSONS OR PROPERTY SUSTAINED IN CONNECTION WITH OR
INCIDENTAL TO PERFORMANCE UNDER THIS OWNER CONTRACT, EVEN IF THE
INJURY, DEATH, DAMAGE, OR LOSS IS CAUSED BY THE RELEASED PERSON'S SOLE
OR CONCURRENT NEGLIGENCE AND/OR THE RELEASED PERSON' S STRICT
PRODUCTS LIABILITY OR STRICT STATUTORY LIABILITY, AND EVEN IF THE
7
v. 7—AR—ONLY PACE Owner Contract
INJURY, DEATH, DAMAGE OR LOSS IS CAUSED BY THE RELEASED PERSON'S
WRONGFUL ACTION OR INACTION.
21. Indemnification. TO THE MAXIMUM EXTENT ALLOWED BY LAW,
PROPERTY OWNER SHALL INDEMNIFY AND HOLD LOCAL GOVERNMENT, ITS
AUTHORIZED REPRESENTATIVES, AND THEIR RESPECTIVE AFFILIATES,
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS (EACH SUCH PERSON HEREIN
REFERRED TO AS AN "INDEMNITEE") ABSOLUTELY HARMLESS FROM AND
AGAINST ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR
RELATED EXPENSES INCURRED BY OR IMPOSED UPON OR ALLEGED TO BE DUE OF
INDEMNITEE IN CONNECTION WITH THE EXECUTION OR DELIVERY OF THIS
OWNER CONTRACT, THE NOTICE OF CONTRACTUAL ASSESSMENT LIEN, THE
FINANCING DOCUMENTS, AND ANY OTHER DOCUMENT OR ANY OTHER
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS
HEREUNDER OR THEREUNDER, THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, OR, IN THE CASE OF ANY INDEMNITEE,
THE ADMINISTRATION OF THIS OWNER CONTRACT AND ANY OTHER
AGREEMENTS RELATED TO THE PROJECT.
22. No Personal Liability. Pursuant to Section 399.019 of the PACE Act, the Property
Owner acknowledges that the members of the governing body and employees of the Local
Government, and board members, executives, employees, and contractors of the Authorized
Representative are not personally liable as a result of exercising any rights or responsibilities under
the PACE Program or any agreement in furtherance of the PACE Program.
23. Construction Terms. The Financing Documents executed by Lender and Property
Owner must include a requirement that Lender shall withhold % of the Financing until
verification that the Project was properly completed and is operating as intended is provided to
Authorized Representative by an Independent Third Party Reviewer ("ITPR), or Property Owner
shall pay liquidated damages to Lender of $ per day for every day after 30 days following
completion of the Project that such verification of completion is not provided. If verification of
completion is not provided by Property Owner within 30 days after completion of the Project, such
verification shall be submitted by Lender. If the Lender Contract includes requirements related to
the construction of the Project and disbursement of Financing, such requirements are set forth in
Exhibit D attached hereto and incorporated herein by reference. Such requirements may include,
among other things, (1) the disbursement schedule and (2) any holdback amount to be funded
following verification of final project completion.
8
v. 7—AR—ONLY PACE Owner Contract
PROPERTY OWNER:
By:
Name:
Title:
Address:
Email address:
ACKNOWLEDGEMENT
STATE OF
COUNTY OF
This PACE Owner Contract pursuant to Property Assessed Clean Energy Act was
acknowledged before me on by ,
, on behalf of
(print name)
NOTARY PUBLIC, STATE OF
SIGNATURE PAGE TO
PACE OWNER CONTRACT [1 OF 2]
LOCAL GOVERNMENT:
ANNA, TEXAS
By: TEXAS PROPERTY ASSESSED CLEAN ENERGY AUTHORITY
AUTHORIZED REPRESENTATIVE
Pursuant to Tex. Local Gov't Code §399.006(b)
By:
Name: CHARLENE HEYDINGER
Title: PRESIDENT, TEXAS PACE AUTHORITY
Address: PO BOX 200368
AUSTIN, TX 78720-0368
Email Address: charlene@texaspaceauthority.org
ACKNOWLEDGEMENT
STATE OF TEXAS §
COUNTY OF §
This PACE Owner Contract pursuant to Property Assessed Clean Energy Act was
acknowledged before me on , 20_ by Charlene Heydinger, President, Texas
Property Assessed Clean Energy Authority, dba Texas PACE Authority, a Texas nonprofit
corporation, on behalf of said corporation as Authorized Representative for the Local
Government.
(print name)
NOTARY PUBLIC, STATE OF TEXAS
SIGNATURE PAGE TO
PACE OWNER CONTRACT [2 OF 21
OWNER CONTRACT EXHIBIT A
NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO
PROPERTY ASSESSED CLEAN ENERGY ACT
OWNER CONTRACT EXHIBIT B
MORTGAGE HOLDER(S). CONSENT
OWNER CONTRACT EXHIBIT C
FINANCING DOCUMENTS
Assessment Payment Schedule
Assessment Total:
Payment Frequency:
Payment Total Payment Principal Paid Interest Paid Administration Remaining
Date Fee Balance
Financing Documents
Document Title Parties Date Executed
OWNER CONTRACT EXHIBIT D
CONSTRUCTION TERMS
Retainage or Liquidated Damages:
Lender shall retain % of the Financing until a report of completion ,by a
qualified Independent Third Party Reviewer ("ITPR") is provided to Authorized
Representative.
OR
Property Owner shall pay liquidated damages to Lender of $ per day for every day
after 30 days following completion of the Project that such a report of completion is not
provided. Lender shall then provide the report of completion to Authorized
Representative.
Additional Construction Terms
Date Draw down Purpose
Amount p
EXHIBIT 3
FORM LENDER CONTRACT
14
FORM PACE LENDER CONTRACT
THIS PROPERTY ASSESSED CLEAN ENERGY ("PACE") LENDER CONTRACT
including the attached exhibits ("Lender Contract") is made as of the day of
, , ("Effective Date") by and between the City of Anna, Texas ("Local
Government") and ("Lender"). Local Government and Lender are
hereafter referred to collectively as "the parties" or individually as "party."
RECITALS
A. The Property Assessed Clean Energy Act ("PACE Act"), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
privately owned commercial, industrial, and large multifamily residential (5 or more dwelling
units) real property to impose assessments on the property to finance the cost of permanent
improvements fixed to the property intended to decrease water or energy consumption or demand.
B. Local Government has established a program under the PACE Act pursuant to a
resolution dated , adopted by the ("PACE
Program"), and has designated Texas Property Assessed Clean Energy Authority, d/b/a Texas
PACE Authority as the representative of Local Government ("Authorized Representative")
authorized to enter into the written contracts with the owners of such property and the providers
of such financing described herein, and has designated the entire territory within the boundaries of
the City of Anna, Texas jurisdiction, including the City's extraterritorial jurisdiction, as a region
(the "Region") within which the Authorized Representative and the record owners of such real
property may enter into written contracts to impose assessments to repay the financing by owners
of qualified improvements on the owner's property pursuant to the PACE Program.
C. Pursuant to Application number ,
("Property Owner"), the sole legal and record owner of the following qualified "real property,"
as defined in Section 399.002 of the PACE Act, within the Region has/have applied to Local
Government to participate in the PACE Program with respect to certain real property located at
, Texas, - (the "Property") (the Property being
more particularly described in the Notice of Contractual Assessment Lien, attached hereto as
Exhibit A to the Owner Contract which appears below as Exhibit A to this Lender Contract) by
installing or modifying on the Property certain permanent improvements which are intended to
decrease water or energy consumption or demand, and which are or will be fixed to the Property
as "qualified improvements", as defined in Section 399.002 of the PACE Act ("Qualified
Improvements"). The installation or modification of such Qualified Improvements on the
v. 8 AR ONLY PACE Lender Contract
Property will be a "qualified project" as defined in Section 399.002 of the PACE Act (the
"Project").
D. Property Owner and Local Government have entered into a written contract as
required by Section 399.005 of the PACE Act, a copy of which is attached hereto as Exhibit A and
made a part hereof (the "Owner Contract"), in which Property Owner has requested that Local
Government impose an assessment (the "Assessment") on the Property as set forth in the Notice
Of Contractual Assessment Lien Pursuant To Property Assessed Clean Energy Act to be filed in
the real property records of Collin County, Texas (the "Notice of Contractual Assessment Lien"),
to repay the financing of such Qualified Improvements. A copy of the Notice of Contractual
Assessment Lien is attached as Exhibit A to the Owner Contract which appears below as Exhibit
A to this Lender Contract and made a part hereof. The Property, Qualified Improvements, and
Assessment are more fully described in the Notice of Contractual Assessment Lien.
E. Financing for the Project ("Financing") shall be provided to Property Owner by
Lender in accordance with financing documents which are described in or copies of which are
attached as Exhibit C to the Owner Contract attached hereto as Exhibit A and made a part hereof
(the "Financing Documents"). Such Financing includes only those costs and fees for which an
assessment may be imposed under Section 399.006 (e) of the PACE Act. This Lender Contract is
entered into between Local Government and Lender as required by Section 399.006(c) of the
PACE Act to provide for repayment of the Financing secured by the Assessment.
F. As required by Section 399.010 of the PACE Act, Property Owner has notified the
holder(s) of any mortgage liens on the Property at least thirty (30) days prior to the date of the
Owner Contract of Property Owner's intention to participate in the PACE Program. The written
consent of each mortgage lien holder to the Assessment was obtained on or prior to the date of the
Owner Contract, as shown by the copy of such consent(s) attached as Exhibit B to the Owner
Contract which appears below as Exhibit A to this Lender Contract.
AGREEMENT
The parties agree as follows:
1. Maintenance and Enforcement of Assessment. Lender agrees to provide Financing
for the Project in the total principal amount of $ , according to the terms set out
in the Financing Documents attached hereto as Exhibit C to the Owner Contract attached as Exhibit
A. In the event the actual total of costs and fees for which an assessment may be imposed under
the PACE Act is different from the stated amount or any other term requires correction, Local
Government, Property Owner, and Lender agree to execute an amended Owner Contract and
Lender Contract, and Authorized Representative shall record an amended Notice of Contractual
Assessment Lien. In consideration for the Financing provided or to be provided by Lender for the
Project, and subject to the terms and conditions of this Lender Contract, Local Government agrees
to maintain and continue the Assessment for the benefit of Lender until the Assessment, all
contractual interest due to Lender according to the Financing Documents ("Contractual
Interest"), any prepayment penalty, and any penalties, interest, fees, attorney's fees, and costs due
under or authorized by the PACE Act and the Financing Documents are paid in full, and to release
2
v. 8 AR ONLY PACE Lender Contract
the Assessment upon notice from Lender of such payment in full. Local Government shall not
release, sell, assign or transfer the Assessment or the lien securing it without the prior written
consent of Lender. Local Government agrees to enforce the assessment lien against the Property
at the request of Lender in the event of a default in payment by Property Owner in accordance with
the provisions set forth in paragraph 6. Local Government shall have no obligation to repurchase
the Assessment and no liability to Lender should there be a default in the payment thereof or should
there be any other loss or expense suffered by Lender or under any other circumstances.
2. Insta.11ments. The Assessment and Contractual Interest thereon are due and payable
to Lender in installments ("Installments") according to the payment schedule set forth in the
Financing Documents attached hereto as Exhibit C to the Owner Contract attached as Exhibit A.
The Assessment includes (1) an application fee paid by Property Owner to Authorized
Representative at closing of the Financing and (2) a recurring administration fee paid by Property
Owner to Authorized Representative until the Assessment is released. The recurring administration
fee amount shall be collected by Lender and paid to Authorized Representative not later than thirty
(30) days after receipt by Lender, unless otherwise agreed to in writing by Authorized
Representative. Notwithstanding the foregoing, in the event of delinquency in the payment of any
Installment, Lender shall, upon notice to Authorized Representative, withhold payment of any
amounts due to Authorized Representative in connection with such Installment until the
Installment is paid. Lender agrees that any such temporary withholding shall not reduce the
amount of administration fees included in the Assessment or due to Authorized Representative.
The amounts due to Authorized Representative are identified in Exhibit C to the Owner Contract
attached hereto as Exhibit A. As required by Section 399.009(a)(8) of the PACE Act, the period
during which such Installments are payable does not exceed the useful life of the Project.
3. Assignment of Right to Receive Installments or Require Enforcement of Lien.
Lender has the right, without the consent of Property Owner, to assign or transfer the right to
receive the Installments or require Local Government to enforce the assessment lien in the event
of a default in payment, together with the corresponding obligations, provided that all of the
following conditions are met:
(a) The assignment or transfer is made to a qualified lender, which maybe one
of the following:
(1) Any federally insured depository institution such as a bank, savings
bank, savings and loan association and federal or state credit union;
(2) Any insurance company authorized to conduct business in one or
more states;
(3) Any registered investment company, registered business
development company, or a Small Business Administration small business
investment company;
(4) Any publicly traded entity; or
(5) Any private entity that:
3
v. 8 AR —ONLY PACE Lender Contract
(1) Has a minimum net worth of $5 million;
(ii) Has at least three years' experience in business or industrial
lending or commercial real estate lending (including multifamily
lending), or has a lending officer that has at least three years'
experience in business or industrial lending or commercial real
estate lending;
(iii) Can provide independent certification as to availability of
funds; and
(iv) Has the ability to carry out, either directly or through a servicer,
the bookkeeping and customer service work necessary to manage
the assessment accounts
(6) A financially stable entity, whether or not from the list
above, with the ability to carry out, either directly or through a servicer, the
obligations of this Lender Contract related to the receipt and accounting of
the Installments or the enforcement of the assessment lien.
(b) Property Owner and Authorized Representative are notified in writing of
the assignment or transfer and the address to which payment of the future Installments
should be mailed not less than 30 days before the next Installment is due according to the
payment schedule included in the Financing Documents; and
(c) The assignee or transferee executes a written assumption agreement
according to the Financing Documents of all of Lender's rights and obligations under this
Lender Contract related to the receipt of the Installments or enforcement of the assessment
lien and provides a copy of such assumption to Property Owner and Authorized
Representative not later than 10 days after execution of the agreement. Lender may assign
or transfer the right to receive the Installments or the right to require enforcement of the
assessment lien separately.
Upon written notice to Property Owner and Authorized Representative of an assignment or transfer
that complies with all of the foregoing conditions, the assignor shall be released of all of the rights
and obligations of the Lender under this Lender Contract accruing after the effective date of the
assignment that are specified in the assignment or transfer document, and all of such rights and
obligations shall be assumed by and transferred to the assignee. Any attempt to assign or transfer
the right to receive the Installments or to require enforcement of the Assessment lien that does not
comply with all of the foregoing conditions is void. Lender shall retain all of the rights and
obligations of Lender under this Lender Contract until such rights and obligations are assigned or
transferred according to this section.
4. Financing Responsibility_ Lender assumes full responsibility for determining
the financial ability of the Property Owner to repay the Financing, advancing the funds as set forth
in the Financing Documents and performing Lender's obligations and responsibilities thereunder.
4
v. 8 AR ONLY PACE Lender Contract
In the event the assessment lien on the Property is enforced by foreclosure as provided below,
Lender shall have no further obligations to Property Owner with respect to the Installments that
were the subject of the foreclosure, but Lender shall retain the rights to enforcement of the lien for
any Installments that are not eliminated by the foreclosure, and the succeeding owner of the
Property shall be subj ect to such lien.
5. Lien Priority and Enforcement. As provided in the Owner Contract and Sections
399.014 and 399.015 of the PACE Act:
(a) Delinquent Installments shall incur penalties and interest on the principal of
the Installment in the same manner and in the same amount as delinquent property taxes,
pursuant to the statutes in effect at the time of default. Under the current statutes a
delinquent Installment incurs a penalty of 6% of the principal amount of the Installment
for the first calendar month it is delinquent plus 1 % for each additional month or portion
of a month the Installment remains unpaid prior to July 1 of the year in which it becomes
delinquent. However, an Installment delinquent on July 1 incurs a total penalty of 12% of
the principal amount of the delinquent Installment without regard to the number of months
it has been delinquent. A delinquent Installment shall also accrue interest on the principal
of the Installment at the rate of 1 % for each month or portion of a month that the Installment
remains unpaid. Subject to paragraph 16 below, penalties, interest, fees, and costs payable
under this paragraph shall be retained by Local Government to compensate it for the cost
of enforcing the Assessment. Additional interest at any default rate imposed by Lender
pursuant to the Financing Documents, along with any other fees and charges that become
due pursuant to the Financing Documents may be imposed and retained by Lender.
(b) The Assessment and any interest or penalties thereon,
(1) are a first and prior lien against the Property from the date on which
the Notice of Contractual Assessment Lien is recorded in the real property records
of Collin County, Texas, as provided by Section 399.013 of the PACE Act, until
the Assessment, interest, or penalty is paid; and
(2) such lien has the same priority status as a lien for any other ad
valorem tax, pursuant to Section 399.014(a)(2) of the PACE Act.
(c) Pursuant to Section 399.014(b) of the PACE Act, the lien created by the
Assessment runs with the land, and any portion of the Assessment that has not yet become
due shall not be eliminated by foreclosure of (i) a property tax lien, or (ii) the lien for a
delinquent Installment of the Assessment. In the event of a sale or transfer of the Property
by Property Owner, the obligation for the Assessment and the Property Owner's
obligations under the Financing Documents shall be transferred to the succeeding owner
without recourse to Lender, Local Government or Authorized Representative
(d) In the event of a default by Property Owner in payment of an Installment
called for by the Financing Documents or the filing of a case under the U.S. Bankruptcy
Code by or against Property Owner, the lien created by the Assessment shall be enforced
5
v. 8 AR ONLY PACE Lender Contract
by Local Government for the benefit of Lender according to paragraph 6(c) below in the
same manner according to Texas Tax Code Secs. 33.41 to 34.23 that a property tax lien
against real property may be enforced by a local government, to the extent the enforcement
is consistent with Section 50, Article XVI, Texas Constitution.
(e) In a suit to collect a delinquent Installment of the Assessment, Local
Government shall be entitled to recover costs and expenses, including attorney's fees in the
amount of 15% of the total principal amount of the delinquent Installment, penalties, and
interest due, in the same manner according to Texas Tax Code Sec. 33.48 as in a suit to
collect a delinquent property tax. Lender shall be entitled to any additional sums due to it
under the Financing Documents in connection with a suit to collect a delinquent Installment
of the Assessment.
(f) As provided in Section 399.014(a-1) of the PACE Act, after written notice
of the Assessment is recorded in the real property records of the county in which the
Property is located, the lien created by the Assessment may not be contested on the basis
that the improvement is not a "qualified improvement" or the Project is not a "qualified
project", as such terms are defined in Section 399.002 of the PACE Act.
6. Servicing and Enforcement of Assessment.
(a) Servicing. The Installments and other amounts due under the Financing
Documents shall be billed, collected, received, and disbursed in accordance with the
procedures set out in the Financing Documents. Lender or its designee shall be responsible
for all servicing duties other than those specifically undertaken by Local Government in
this Lender Contract. Authorized Representative shall deliver an annual notice of
assessment to Property Owner by first class mail or electronic mail each year until the
Assessment is released. If requested by Property Owner in the Owner Contract, and subject
to consent by the county tax assessor and collector, Local Government agrees to also send
an annual notice of assessment to Property Owner by first class mail in the envelope with
the tax bill of the Property each year until the Assessment is released. However, any failure
of Local Government or Authorized Representative to deliver an annual notice of
assessment to Property Owner shall not affect the Assessment or Property Owner's
obligations under the Owner Contract.
(b) Remittances. Each of the parties covenants and agrees to promptly remit to
the other party any payments incorrectly received by such party with respect to the
Assessment after the execution of this Lender Contract.
(c) Default and Enforcement. In the event of a default in payment of any
Installment according to the Financing Documents, Lender agrees to take at least the
following steps to collect the delinquent Installment:
(1) Mail a written notice of delinquency and demand for payment to the
Property Owner by both certified mail, return receipt requested, and first class mail;
and
6
v. 8 AR ONLY PACE Lender Contract
(2) Mail a second notice of delinquency and demand for payment to the
Property Owner by both certified mail, return receipt requested, and first-class mail
at least 30 days after the date of the first notice if the delinquency is continuing. A
copy of the second notice of delinquency shall also be mailed to the holder of any
mortgage lien on the property.
The holder of any mortgage lien on the Property shall have not less than a 30-day right to cure the
delinquency by paying the amount of the delinquent installment. If the Property Owner fails to
cure the delinquency on or before the 30th day after the mailing of the second notice of delinquency,
Lender or its designee may notify Authorized Representative in writing of a default in payment by
Property Owner. Upon receipt of such notice and after doing its own due diligence, including
delivering a notice of foreclosure to Freddie Mac not less than 30 days prior to the foreclosure if
the mortgage lien is held by Freddie Mac, Authorized Representative shall certify the default to
Local Government, which will enforce the assessment lien for the benefit of Lender pursuant to
Sec. 399.014(c) of the PACE Act, in the same manner as a property tax lien against real property
may be enforced, to the extent the enforcement is consistent with Section 50, Article XVI, Texas
Constitution. However, if a case under the U.S. Bankruptcy Code is filed by or against Property -
Owner or if the enforcement of the assessment lien is prevented by the order of a court, Local
Government shall notify Authorized Representative and shall file a proof of claim for the balance
of the assessment, accrued interest and penalties, and all costs and expenses, including attorneys
fees, as authorized by Section 399.014 of the PACE Act. Authorized Representative shall notify
Lender of the filing of the proof of claim. Lender shall not be required to mail a notice of
delinquency to Property Owner or a notice of default to Local Government. Lender shall reimburse
Local Government for any costs and expenses, including attorney's fees, required to file and
present the claim.
(d) Priorijy.Pursuant to Sec. 399.014(a)(2) of the PACE Act, if the
assessment lien is enforced by foreclosure or collected through a bankruptcy or similar
proceeding, the assessment balance and any interest or penalties on the assessment shall
have the same priority status as a lien for any other ad valorem tax.
(e) Final Payment and Release. When the Assessment, Contractual Interest,
any prepayment penalty, and any penalties, interest, fees, attorney fees, or costs due under
or authorized by the PACE Act or the Financing Documents have been paid in full, Local
Government's rights under the Owner Contract shall cease and terminate. Upon notice
from Lender that all amounts due have been paid in full Authorized Representative on
behalf of Local Government, shall execute a release of the Assessment and the Owner
Contract and record the release.
(f) Limitations on Local Government's Actions. Local Government shall not
enter into any amendment or modification of or deviation from the Owner Contract without
the prior written consent of Lender. Local Government or Authorized Representative shall
not institute any legal action with respect to the Owner Contract, the Assessment, or the
assessment lien without the prior written request of Lender.
7
v. 8 AR ONLY PACE Lender Contract
(g) Limitations of Local Government's Obligations. Local Government
undertakes to perform only such duties as are specifically set forth in this Lender Contract,
and no implied duties on the part of Local Government are to be read into this Lender
Contract. Local Government shall not be deemed to have a fiduciary or other similar
relationship with Lender. Local Government may request written instructions for action
from Lender and refrain from taking action until it receives satisfactory written
instructions. Local Government shall have no liability to any person for following such
instructions, regardless of whether they are to act or refrain from acting.
(h) Costs. No provisions of this Lender Contract shall require Local
Government to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
7. Lender's Warranties and Representations. With respect to this Lender Contract,
Lender hereby warrants and represents that on the date on which Lender executes this Lender
Contract:
(a) Lender is a qualified lender under the PACE Program, as defined in
paragraph 3(a) above, and is fully qualified under the PACE Program to enter into this
Lender Contract and the Financing Documents;
(b) Lender has independently and without reliance upon Local Government
conducted its own credit evaluation, reviewed such information as it has deemed adequate
and appropriate, and made its own analysis of the Owner Contract, the Project, and
Property Owner's financial ability to perform the financial obligations set out in the
Financing Documents; and
(c) Lender has not relied upon any investigation or analysis conducted by,
advice or communication from, or any warranty or representation by Local Government,
Authorized Representative, or any agent or employee of Local Government, express or
implied, concerning the financial condition of the Property Owner or the tax or economic
benefits of an investment in the Assessment.
8. Written Contract Required by the PACE Act. This Lender Contract constitutes a
written contract between Local Government and Lender, as required under Section 399.006 (c) of
the PACE Act.
9. Construction and Definitions. This Lender Contract is to be construed in
accordance with and with reference to the PACE Program and PACE Act. Terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the PACE Program, or
the PACE Act.
10. Binding Effect. This Lender Contract is binding upon and inures to the benefit of
the parties hereto and their respective representatives, agents, successors, and assigns.
11. Notices. Unless otherwise specifically provided herein, all notices and other
communications required or permitted hereunder shall be in writing and delivered (a) by electronic
8
v. 8 AR ONLY PACE Lender Contract
mail to admingtexaspaceauthority.org with written confirmation of receipt, or (b) by first-class
mail addressed to the other party at the mailing address stated below the signature of such party or
at such other address as such party may from time to time designate in writing to the other party,
and shall be effective from the date of receipt.
12. Governing Law and Venue. This Lender Contract shall in all respects be governed
by and construed in accordance with the laws of the State of Texas without regard to Texas' choice
of law provisions. Venue for any disputes or suits between the parties arising from or related to
this Lender Contract shall be in a state court located in the Region, and the parties consent to the
personal and subject matter jurisdiction of such state court.
13. Entire Agreement. This Lender Contract, including its exhibits, constitutes the
entire agreement between Local Government and Lender with respect to the subject matter hereof
and shall not be amended or altered in any manner except by a document in writing executed by
both parties.
14. Further Assurances. Lender further covenants and agrees to do, execute and
deliver, or cause to be done, executed, and delivered all such further acts for implementing the
intention of this Lender Contract as may be reasonably necessary or required.
15. Captions. Paragraph and section titles are for convenience of reference only and
shall not be of any legal effect.
16. Counterparts. This Lender Contract may be executed in any number of
counterparts, and each counterpart may be delivered on paper or by electronic transmission, all of
which when taken together shall constitute one agreement binding on the parties, notwithstanding
that all parties are not signatories to the same counterpart.
17. Interest. Interest and penalties in the event of default, as provided above, are
explicitly authorized by Section 399.014(d) of the PACE Act. However, in no event will the total
amount of interest on the Assessment, including statutory interest payable to Local Government
and Contractual Interest payable to Lender under the Financing Documents, exceed the maximum
amount or rate of nonusurious interest that may be contracted for, charged, or collected under
Texas law (the "usury limit"). If the total amount of interest payable to Local Government and
Contractual Interest payable to Lender exceeds the usury limit, interest payable to Local
Government shall be reduced and any interest in excess of the usury limit shall be credited to the
amount payable to Local Government or refunded. This provision overrides any conflicting
provisions in this Lender Contract.
18. Certification. Local Government certifies that the PACE Program has been duly
adopted and is in full force and effect on the date of this Lender Contract. Property Owner has
represented to Lender and Local Government that the Project is a "qualified project" as defined in
the PACE Program and Section 399.002 of the PACE Act. The Assessment has been imposed on
the Property as a lien in accordance with the PACE Owner Contract and the PACE Act. Local
Government has not assigned or transferred any interest in the Assessment or the PACE Owner
Contract.
9
v. 8 AR ONLY PACE Lender Contract
19. Inspection and Audits. Local Government's representatives may perform, or have
performed, audits of Lender's documents, books and records. Lender shall keep its documents,
books and records available for this purpose for at least three (3) years after this Lender Contract
terminates. This provision does not affect the applicable statute of limitations.
20. No Personal Liability. Pursuant to Section 399.019 of the PACE Act, the Lender
acknowledges that the members of the governing body and employees of the Local Government,
and board members, executives, employees, and contractors of the Authorized Representative are
not personally liable as a result of exercising any rights or responsibilities under the PACE
Program or any agreement in furtherance of the PACE Program.
21. Construction Terms. The Financing Documents executed by Lender and Property
Owner must include a requirement that Lender shall withhold % of the Financing until
verification is provided to Authorized Representative by an Independent Third Party Reviewer
("ITPR) that the Project was properly completed and is operating as intended, or Property Owner
shall pay liquidated damages to Lender of $ per day for every day after 30 days following
completion of the Project that such verification of completion is not provided. If verification of
completion is not provided by Property Owner on or before the 301 day after completion of the
Project, such verification shall be submitted by Lender. If this Lender Contract includes any
additional requirements related to construction of the Project and disbursement of Financing, such
requirements are set forth in Exhibit D of the Owner Contract attached hereto as Exhibit A and
incorporated herein by reference. Such requirements may include, among other things, (1) the
disbursement schedule and (2) any holdback amount to be funded following verification of final
project completion.
10
v. 8 AR ONLY PACE Lender Contract
LENDER:
By:
Name:
Title:
Address:
Email Address:
ACKNOWLEDGEMENT
STATE OF
COUNTY OF
This PACE Lender Contract pursuant to Property Assessed Clean Energy Act was
acknowledged before me on by
on behalf of
name)
NOTARY PUBLIC, STATE OF
SIGNATURE PAGE TO
PACE LENDER CONTRACT [ I OF 2]
LOCAL GOVERNMENT:
By: TEXAS PROPERTY ASSESSED CLEAN ENERGY AUTHORITY
AUTHORIZED REPRESENTATIVE
Pursuant to Tex. Local Gov't Code §399.006(b)
Name: CHARLENE HEYDINGER
Title: PRESIDENT, TEXAS PACE AUTHORITY
Address: PO BOX 200368
AUSTIN, TX 78720-0368
Email Address: charlene@texaspaceauthority.org
ACKNOWLEDGEMENT
STATE OF TEXAS
COUNTY OF
This PACE Lender Contract pursuant to Property Assessed Clean Energy Act was
acknowledged before me on , 20 by Charlene Heydinger, President, Texas
Property Assessed Clean Energy Authority, dba Texas PACE Authority, a Texas nonprofit
corporation, on behalf of said corporation as Authorized Representative for the Local
Government.
(print name)
NOTARY PUBLIC, STATE OF TEXAS
SIGNATURE PAGE TO
PACE LENDER CONTRACT [2 OF 2]
LENDER CONTRACT EXHIBIT A
OWNER CONTRACT
EXHIBIT 4
FORM NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO PROPERTY ASSESSED CLEAN ENERGY ACT
15
FORM NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO
PROPERTY ASSESSED CLEAN ENERGY ACT
STATE OF TEXAS
COUNTY OF COLLIN
RECITALS
A. The Property Assessed Clean Energy Act ("PACE Act"), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
privately owned commercial, industrial, and large multifamily residential (5 or more dwelling
units) real property to impose assessments on the property to finance the cost of permanent
improvements fixed to the property intended to decrease water or energy consumption or demand.
Unless otherwise expressly provided herein, all terms used herein have the same meanings
ascribed to them in the PACE Act.
B. Anna, Texas ("Local Government") has established a program under the PACE
Act ("PACE Program") pursuant to a resolution dated , adopted by the City
Council, and has designated Texas Property Assessed Clean Energy Authority, dba Texas PACE
Authority, as the representative of Local Government ("Authorized Representative") authorized
to enter into and enforce the written contracts with the owners of such property and the providers
of such financing described herein, and has designated the entire territory within the boundaries of
Anna, Texas, including the City's extraterritorial jurisdiction, as a region (the "Region") within
which the Authorized Representative and the record owners of such real property may enter into
written contracts to impose assessments to repay the financing by owners of qualified
improvements on the owners' property pursuant to the PACE Program.
C. ("Property Owner") is/are the sole legal and record
owner of the qualified "real property," as defined in Section 399.002 of the PACE Act, within the
Region located at , Texas - and more fully described
in Exhibit A attached hereto and made a part hereof (the "Property").
D. Property Owner has applied to Local Government to participate in the PACE
Program by installing or modifying on the Property certain permanent improvements described in
Exhibit B. attached hereto and made a part hereof, which are intended to decrease water or energy
consumption or demand and which are or will be fixed to the Property as "qualified
improvements", as defined in Section 399.002 of the PACE Act (the "Qualified Improvements").
The installation or modification of such Qualified Improvements on the Property will be a
"qualified project" as defined in Section 399.002 of the PACE Act (the "Project"). Property
Owner has entered into a written contract (the "Owner Contract") with Local Government
pursuant to the PACE Act and the PACE Program and has requested Local Government to impose
an assessment on the Property to repay the financing of such Qualified Improvements.
v.7AR PACE Notice of Contractual Assessment Lien
E. The financing of such Qualified Improvements will be provided to Property Owner
by ("Lender"), a qualified lender selected by Property Owner, pursuant
to a written contract executed by Lender and Local Government as required by PACE Program
and Section 399.006(c) of the PACE Act (the "Lender Contract"). Lender will be responsible
for all servicing duties other than those specifically undertaken by Local Government in the Lender
Contract.
THEREFORE, Local Government hereby gives notice to the public pursuant to Section
399.013 of the PACE Act that it has imposed an assessment on the Property in the principal amount
of $ (the "Assessment"). The Assessment includes only those costs and fees
for which an assessment may be imposed under Section 399.006(e) of the PACE Act. In the event
that the actual total of costs and fees for which an assessment may be imposed is different from
the amount stated or any other term requires correction, Local Government, Property Owner, and
Lender will execute an amended Owner Contract and Lender Contract, and Authorized
Representative will record an amended Notice of Contractual Assessment Lien.
The Assessment and contractual interest thereon due to the Lender (the "Contractual
Interest") are due and payable in installments ("Installments") in accordance with the terms and
payment schedule included in the financing documents executed between Property Owner and
Lender that are described in or copies of which are attached hereto as Exhibit C (the "Financing
Documents").
Pursuant to Section 399.014 of the PACE Act,
The Assessment, including any interest, costs, fees, attorney fees, or penalties accrued
thereon,
(i) are a first and prior lien against the Property from the date on which this Notice of
Contractual Assessment Lien is recorded in the real property records of Collin County,
Texas, until the Assessment, interest, or penalty is paid; and
(ii) such lien has the same priority status as a lien for any other ad valorem tax, pursuant
to Section 399.014(a)(2) of the PACE Act.
2. Pursuant to Section 399.014(b) of the PACE Act, the lien created by the Assessment runs
with the land, and any portion of the Assessment that has not yet become due will not be
eliminated by foreclosure of. (i) a property tax lien, or (ii) the lien for a delinquent
Installment of the Assessment. In the event of a sale or transfer of the Property by Property
Owner, the obligation for the Assessment and the Property Owner's obligations under the
Financing Documents will be transferred to the succeeding owner without recourse to
Local Government, or Authorized Representative.
As provided in Section 399.014(a-1) of the PACE Act, after this Notice of Contractual
Assessment Lien is recorded in the real property records of the county in which the
Property is located, the lien created by the Assessment may not be contested on the basis
that the improvement is not a "qualified improvement" or the Project is not a "qualified
project", as such terms are defined in Section 399.002 of the PACE Act.
EXECUTED on
v.7AR PACE Notice of Contractual Assessment Lien 2
LOCAL GOVERNMENT:
ANNA, TEXAS
By: Texas Property Assessed Clean Energy Authority
AUTHORIZED REPRESENTATIVE
Pursuant to Tex. Local Gov't Code §399.006(b)
Un
Name: CHARLENE HEYDINGER
Title: PRESIDENT, TEXAS PACE AUTHORITY
Address: PO BOX 200368
AUSTIN, TX 78720-0368
E-mail: charlene@texaspaceauthority.org
ACKNOWLEDGEMENT
STATE OF TEXAS §
COUNTY OF §
This Notice of Contractual Assessment Lien pursuant to Property Assessed Clean Energy
Act was acknowledged before me on , 20_ by Charlene Heydinger, President,
Texas Property Assessed Clean Energy Authority, dba Texas PACE Authority, a Texas nonprofit
corporation, on behalf of said corporation as Authorized Representative for the Local
Government.
(print name)
NOTARY PUBLIC, STATE OF TEXAS
v.7AR PACE Notice of Contractual Assessment Lien 3
NOTICE OF LIEN EXHIBIT A
PROPERTY DESCRIPTION
v.7AR PACE Notice of Contractual Assessment Lien
NOTICE OF LIEN EXHIBIT B
QUALIFIED IMPROVEMENTS,
v.7AR PACE Notice of Contractual Assessment Lien
NOTICE OF LIEN EXHIBIT C
FINANCING DOCUMENTS
Assessment Payment Schedule
Assessment Total:
Payment Frequency:
Payment Total Payment Principal Paid Interest Paid Administration Remaining
Date Fee Balance
Financing Documents
Document Title Parties Date Executed
v.7AR PACE Notice of Contractual Assessment Lien 6
INDEXING INSTRUCTION:
Grantor: , Property Owner
Grantees: Anna, Texas, Local Government
. Lender
After recording, return to- Texas PACE Authority
Charlene Heydinger
PO Box 200368
Austin, TX 78720-0368
v.7AR PACE Notice of Contractual Assessment Lien