2014 Louisiana Laws
Revised Statutes
TITLE 33 - Municipalities and Parishes
RS 33:130.812 - Financing for projects

§130.812. Financing for projects

A. The local governmental subdivision creating a district may incur debt for the purpose of providing to such district sufficient funds to make the loans provided for in this program.

B.(1) The owner of residential or commercial immovable property within the district may request financing in the form of a loan from the district to cover the costs of energy efficiency improvements or renewable energy improvements that the owner contracts to make to the immovable property. Such financing shall include interest rates and administrative fees as determined by the district. The district shall accept or reject the request according to criteria established by the district and make such loan upon terms and conditions that shall be set forth in the ordinance or resolution. However, the term for repayment of a loan, together with interest rates and administrative fees, shall not exceed twenty years.

(2) In the event that the property for which an energy efficiency improvement or renewable energy improvement loan is sought is encumbered by a mortgage, then the total amount lent for such property shall not exceed ten percent of the reasonable expected fair market value of the property, determined using an appropriate value test, which may include an assessment of the reasonable expected value of the property with the completed improvements on the property as defined and provided in program rules, or the price of the property at its last sale.

(3) No owner of immovable property shall be eligible for a loan from a district unless there is available equity in the property, meaning that the current value as determined using an appropriate value test of the subject property exceeds the current mortgage loan balances for the mortgage loans encumbering the subject property, and that the dollar amount of loans from the district for a particular property shall not exceed the remaining equity value in the property. The total loan-to-value ratio for all loans secured by the immovable property shall not exceed one hundred percent. The calculation of equity value used to determine the maximum amount of financing available for a particular property may take into account the reasonable expected value of the property with the proposed energy efficiency or renewable energy improvements installed.

(4) The maximum amount of any assessment to be repaid in any year shall not exceed the amount of principal and interest for the current year based on the amortization schedule for the loan. In the event of nonpayment or default, there shall be no acceleration of the debt, and tax delinquency shall exist only for assessments not paid when due.

(5) In order to qualify for financing, the property owner shall be current on all outstanding mortgage loans encumbering the property upon which the energy efficiency improvements or renewable energy improvements are proposed to be installed.

(6) In order to qualify for financing, the property owner shall demonstrate an ability to repay the loan as specified in the program rules.

(7) It shall be required that an appropriate evaluation such as energy audit or renewable energy system feasibility study be conducted on the qualifying real property and reviewed by the district prior to approval of the financing.

(8) Where energy efficiency or renewable energy improvements are proposed to be installed on residential properties, the district shall make written verification that the improvements are installed and all work is completed satisfactorily before program loan funds are disbursed. In the alternative, funds for improvements may be disbursed based on multiple stages of completion, and loan funds for a particular stage of completion shall not be disbursed until the district conducts written verification that the corresponding stage of work is satisfactorily completed.

(9) All energy efficiency and renewable energy improvements financed by the program shall be performed by duly qualified contractors, subcontractors, or tradesmen pursuant to program rules.

(10)(a) Where an energy efficiency or renewable energy improvements loan in the amount of one hundred thousand dollars or more is proposed for a commercial property and that property is encumbered by a mortgage, the mortgagee, its successors or assigns, or mortgage servicer shall be provided prior written notice, by certified mail, return receipt requested of the proposed program loan. The mortgagee, its successors or assigns, or mortgage servicer shall have thirty days after receipt of such notice to approve or deny the proposed program loan. The notice shall contain the following information:

(i) The proposed borrower's name.

(ii) The description of the property for which the proposed improvements are to be made.

(iii) A description of the improvements to be made.

(iv) The proposed dollar amount to be loaned.

(v) The proposed amortization period in which the loan is to be repaid.

(vi) A statement that the mortgagee, its successors or assigns, has thirty days from receipt of the notice to approve or deny the proposed loan.

(vii) The name and address of the office where to submit a written approval or denial of the proposed loan.

(b) If the mortgagee, its successors or assigns, or mortgage servicer approves the proposed loan or fails to give a written denial of the proposed program loan to the local government subdivision or district within the thirty day period, then the parties may proceed with the program loan without further notice to the mortgagee, its successors or assigns or mortgage servicer. In the event the mortgagee, its successors or assigns, or mortgage servicer provides a written denial, then the proposed loan shall not be made.

C.(1) The amount of the loan including interest rates and administrative fees shall be assessed against the immovable property upon which the improvements are placed and shall be collected in the same manner as is provided for the ad valorem taxes assessed on the property by the local governmental subdivision creating the district. In order to secure repayment of loans, upon entering into a program loan with a borrower, the local government subdivision creating a district shall file a statement of lien with the recorder of mortgages for the parish in which the property is located. The lien or privilege shall be for the full amount of the program loan and shall take effect against third persons upon filing the statement of lien with the appropriate recorder of mortgages for the parish where the property is located. The lien shall rank equivalent to that of ad valorem taxes or local assessments and liens and privileges as provided in La. R.S. 9:4821(1). The statement of lien shall contain the following:

(a) Identity of the lienholder, including a contact name, address, and phone number.

(b) Identity of borrower, including borrower's full name, domicile, and permanent mailing address, and last four digits of the borrower's social security number or taxpayer identification number, whichever is applicable.

(c) Legal description of the property encumbered by the lien.

(d) Date that the lien is created, which means the date that the loan agreement or promissory note is signed.

(e) Dollar amount of the loan for which the lien is created.

(f) Maturity date of the loan for which the lien is created.

(2) The district may enter into any necessary agreement with the sheriff or other local ad valorem property tax collector for assessing and collecting the assessment provided for in this Subsection, including provisions for reimbursing the sheriff or other collector for the cost of such assessment and collection.

(3) Upon failure of the property owner to pay the current year’s assessment when due the local governmental subdivision and district shall have the right to enforce the lien and privilege to recover and collect the current year's payment or assessment along with any prior year's payment or assessment remaining delinquent. The lien and privilege shall have the same ranking as an ad valorem tax lien on immovable property as provided in R.S. 9:4821(1), and may be enforced and collected by ordinary civil proceeding in accordance with Code of Civil Procedure Articles 851 et seq. or by executory process if the loan documentation contains a confession of judgment or by any other applicable state law to enforce and collect the amount due as a property tax lien assessed against the property in any manner fixed for collection of taxes subject to the same civil penalties for delinquencies, together with attorneys' fees and costs incurred in notification to the owner and the enforcement and collection of the amounts owed.

(4) The duration of the effect of recordation of a statement of lien, the method of reinscription of the statement of lien, and the cancellation of recordation of a statement of lien after the effect of recordation has ceased shall be governed by the provisions of Chapter 2 of Title XXII-A, of Registry, of Book III of the Louisiana Civil Code and treated like a mortgage for such purposes.

(5) In the event that a program loan is paid in full, then the district shall provide written evidence of cancellation and release of its lien and have it recorded in the public mortgage records for the parish where the immovable property is located.

(6) Prepayment of the remaining balance of energy efficiency and renewable energy improvement program loans is permitted.

D. A loan financing program for energy efficiency improvements or renewable energy improvements for residential property shall both:

(1) Impose requirements and conditions on financing arrangements to ensure timely repayment.

(2) Require disclosures to borrowers by the district of the risks involved in borrowing, including the risk of foreclosure if a tax delinquency results from default.

Acts 2009, No. 348, §1; Acts 2010, No. 611, §1.