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The bill would prohibit a parcel or parcels from being annexed to a community facilities district formed pursuant to the alternative procedure if the parcel owner is seeking financing for improvement on a residential property with 4 or fewer units, unless the parcel satisfies specified conditions.

This bill would incorporate additional changes to Section 53328.1 of the Government Code proposed by AB 2618 to be operative only if AB 2618 and this bill are chaptered and become effective on or before January 1, 2017, and this bill is chaptered last.(1) The Property Assessed Clean Energy program has been promoted in California widely as an innovative and alternative form of financing for environmental improvements for the benefit of the public and California’s environment.(2) The promotion of the Property Assessed Clean Energy financing is now a popular and widespread form of alternative financing for consumers seeking solar energy, water conservation, energy efficiency, and earthquake retrofitting improvements to the benefit of all Californians.(3) The consumer obligation to repay voluntary contractual assessments created by the Property Assessed Clean Energy program is sometimes misunderstood and may affect the consumer’s ability to refinance their loan or sell their property.(4) Making residential real estate secured loans to consumers through Property Assessed Clean Energy financing for home improvements has grown rapidly, raising questions as to whether the Property Assessed Clean Energy program is adequately supported by government regulation.(5) The passage of this act is essential to promote standardized disclosures and protections for consumers to ensure that the Property Assessed Clean Energy program can continue to be widely used to offset the adverse impacts of years of climate change.

This section does not constitute a change in, but is declaratory and a clarification of existing law.

(a) A public agency shall not permit a property owner to participate in any program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3 if any of the following apply:(1) The property owner’s participation would result in the total amount of the annual property taxes and assessments exceeding 5 percent of the property’s market value, as determined at the time of approval of the property owner’s contractual assessment.(2) The property does not comply with the conditions specified in paragraphs (1) to (5), inclusive, and paragraph (8), and, in addition, for properties with energy efficiency improvements specified under Section 5898.20, paragraph (7), of subdivision (a) of Section 26063 of the Public Resources Code.(b) A public agency shall not permit the property owner to participate in any program established pursuant to this chapter for the purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3 unless the property owner is given the right to cancel the contractual assessment without penalty or obligation, consistent with the following:(1) The property owner shall receive the right to cancel document set forth below or a substantially similar document that displays the same information in a substantially similar format.

(a) The disclosure set forth below, or a substantially equivalent document that displays the same information in a substantially similar format, shall be completed and delivered to a property owner before the property owner consummates a voluntary contractual assessment described in this chapter for purposes specified in paragraph (2) of subdivision (a) of Section 5898.20 or Section 5899 or 5899.3, or a special tax described in Section 53328.1 of the Government Code.

The disclosure shall be provided to the property owner as a printed copy unless the property owner agrees to an electronic copy.

In the event you have a consumer complaint, questions about your financing obligations related to the contractual assessment or your contractual rights under the terms of this contract, you can contact either this toll-free telephone number or email address provided below and receive a response within 24 hours or one business day.

I understand that I may be required to pay off the remaining balance of this obligation by the mortgage lender refinancing my home.

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After the designation of a parcel or parcels as an improvement area, all proceedings for approval of the appropriations limit, the rate and method of apportionment and manner of collection of special tax and the authorization to incur bonded indebtedness for the parcel or parcels shall apply only to the improvement area.(g) In connection with a community facilities district formed under this section, as an alternate and independent procedure for making the changes described in Section 53330.7, the changes may be made with the unanimous approval of the owner or owners of the parcel or parcels that will be affected by the change and with the written consent of the local agency.

If 50 percent or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be annexed to the community facilities district in the future, or if the owners of one-half or more of the area of land proposed to be annexed in the future and not exempt from the special tax, file written protests against establishment of the community facilities district, and protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings to form the community facilities district shall be undertaken for a period of one year from the date of decision of the legislative body on the issues discussed at the hearing.

If the majority protests of the registered voters or of the landowners are only against the furnishing of a specified type or types of facilities or services within the district, or against levying a specified special tax, those types of facilities or services or the specified special tax shall be eliminated from the resolution of formation.(5) The legislative body shall not record a notice of special tax lien against any parcel or parcels in the community facilities district until the owner or owners of the parcel or parcels have given their unanimous approval of the parcel’s or parcels’ annexation to the community facilities district, at which time the notice of special tax lien shall be recorded against the parcel or parcels as set forth in Section 53328.3.(b) Notwithstanding the provisions of Section 53340, after adoption of the resolution of formation for a community facilities district described in subdivision (a), the legislative body may, by ordinance, provide for the levy of the special taxes on parcels that will annex to the community facilities district at the rate or rates to be approved unanimously by the owner or owners of each parcel or parcels to be annexed to the community facilities district and for apportionment and collection of the special taxes in the manner specified in the resolution of formation.

You may cancel this transaction, without cost, on or before midnight on the third business day after whichever of the following events occurs last: If you cancel the transaction, [Provider], within 20 calendar days after [Provider] receives notice of cancellation, must take the steps necessary to reflect the fact that, if recorded, the lien on your property has been discharged and removed from the tax rolls, and [Provider] must return to you any money you have given in connection with your application, not including the application processing fee.

After [Provider] has done the things mentioned above, you must return any money paid to you or on your behalf, whether to your contractor or any other person. You may use any written statement that is signed and dated by you and states your intention to cancel, or you may use this notice by dating and signing below.

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