House approves consumer protections bill for residential energy-improvement program

The House on Monday passed a bill that would establish consumer protections for a residential home energy-improvement program, Property Assessed Clean Energy.

HF3688/SF3245*, sponsored by Rep. Tim O'Driscoll (R-Sartell) and Sen. Eric Pratt (R-Prior Lake), would add a number of layers and guards for PACE administrators and licensees determined to make homes more energy efficient.

Rep. Tim O'Driscoll

Following the 123-0 vote, the bill goes to the governor. It was passed 65-1 by the Senate last Monday.

O’Driscoll said the bill creates “more disclosures for consumers” to explain to homeowners “how this program works.”

PACE is a financing mechanism allowing local governments to extend financing for various energy-related projects on private property, usually focused on reducing greenhouse gas emissions through energy conservation or use of renewable energy. A task force established by law last session recommended changes included in the bill.

Among many technical and clarifying changes, the bill would also:

• let the Commerce Department assess examination fees against administrators;
• establish commercial PACE loan programs for cost-effective energy improvements;
• specify that a residential PACE lien is subordinate to all other earlier liens;
• require residential PACE administrators to obtain a one-year license from the Commerce Department costing $1,000 initially, and $500 annually, to renew;
• require Department of Labor and Industry-licensed contractors to do the energy improvement installations;
• prohibit administrators and contractors from entering into PACE contracts with low-income homeowners unless they’re first referred to other state programs; and
• allow subsequent homeowners the same rights as original homeowners in claims.