S1969

	SECTION 1. The General Laws are hereby amended by inserting after chapter 80A the following chapter:- 
	Chapter 80B
	Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:-
	“Benefitted property owner”, an owner of qualifying residential property who desires to install qualifying improvements and who provides free and willing consent to the betterment assessment against the qualifying residential property.
	“Betterment Assessment”, an assessment of a betterment on qualified residential property in relation to qualifying improvements that have been duly assessed in accordance with chapter 80.
	“Municipality”, a city, town, or county.
	“Participating municipality”, a municipality that has determined to participate in a program for financing qualifying improvements to residential property.
	“Program administrator”, means a municipality or a separate legal entity created pursuant to the provisions of this legislation that directly operates a program for financing qualifying improvements and is authorized pursuant to the provisions of this legislation.
	“Property owner”, means the owner or owners of record of real property. The term includes real property held in trust for the benefit of one or more individuals, in which case the individual or individuals may be considered as the property owner or owners, provided that the trustee provides written consent. The term does not include persons renting, using, living in, or otherwise occupying real property.
	“Qualifying improvement”, shall include, but shall not be limited to, the following permanent improvements located on residential property: : (i) repairing, replacing, or improving a central sewerage system, converting an onsite sewage treatment and disposal system to a central sewerage system, or, if no central sewerage system is available, removing, repairing, replacing, or improving an onsite sewage treatment and disposal system to an advanced system or technology; (ii) repairing, replacing, or improving a roof, including improvements that strengthen the roof deck attachment; create a secondary water barrier to prevent water intrusion; install wind-resistant shingles or gable-end bracing; or reinforce roof-to-wall connections; (iii) providing flood and water damage mitigation and resiliency improvements, prioritizing repairs, replacement, or improvements that qualify for reductions in flood insurance premiums, including raising a structure above the base flood elevation to reduce flood damage; constructing a flood diversion apparatus, drainage gate, or seawall improvement, including seawall repairs and seawall replacements; purchasing flood damage-resistant building materials; or making electrical, mechanical, plumbing, or other system improvements that reduce flood damage; (iv)replacing windows or doors, including garage doors, with energy-efficient, impact-resistant, wind-resistant, or hurricane windows or doors or installing storm shutters (v) installing energy-efficient heating, cooling, or ventilation systems; (vi) replacing or installing insulation; (vii) replacing or installing energy-efficient water heaters: (viii) installing and affixing a permanent generator; (ix) providing a renewable energy improvement, including the installation of any system in which the electrical, mechanical, or thermal energy is produced from a method that uses solar, geothermal, bioenergy, wind, or hydrogen; (x) energy conservation and efficiency improvements, which are measures to reduce consumption through efficient use or conservation of electricity, natural gas, propane, or other forms of energy, including but not limited to, air sealing; installation of insulation; installation of energy-efficient heating, cooling, or ventilation systems; building modification to increase the use of daylight; window replacement; windows; energy controls or energy recovery systems; installation of electric vehicle charging equipment; installation of efficient lighting equipment; or any other improvements necessary to achieve a sustainable building rating or compliance with a national model green building code; and (xi) water conservation efficiency improvements, which are measures to reduce consumption through efficient use or conservation of water.
	“Qualifying improvement contractor”, means a licensed or registered contractor who has been registered to participate by a program administrator pursuant to the provisions of this legislation to install or otherwise perform work to make qualifying improvements on residential property financed pursuant to a program authorized pursuant to the provisions of this legislation. “Residential property”, means real property zoned as residential or multifamily residential and composed of four or fewer dwelling units.
	“Third-party administrator”, means an entity under contract with a program administrator.
	Section 2.  (a)  (1) Each municipality in the commonwealth shall have the option to participate in the program for financing qualifying improvements to residential property as a participating municipality by a majority vote of the city or town council, by a majority vote of the board of selectmen or by resolution of its legislative body, as may be appropriate, pursuant to which the municipality shall assess, collect, remit and assign betterment assessments, in return for qualifying improvements for a benefitted property owner located within such municipality and for costs reasonably incurred in performing such acts.
	(2) A program administrator may only offer a program for financing qualifying improvements to residential property within the jurisdiction of a municipality if the municipality has authorized the program administrator to administer the program for financing qualifying improvements to residential property by a majority vote of the city or town council, by a majority vote of the board of selectmen or by resolution of its legislative body, as may be appropriate. The authorized program must, at a minimum, meet the requirements of this section.
	(3) Pursuant to this section or as otherwise provided by law, a municipality may enter into an interlocal agreement providing for a partnership between one or more municipalities for the purpose of facilitating a program to finance qualifying improvements to residential property located within the jurisdiction of the municipalities that are party to the agreement.
	(4) A municipality may deauthorize a program administrator through repeal of the vote or the resolution adopted pursuant to paragraph (b) or other action. Any recorded financing agreements at the time of deauthorization shall continue, except as otherwise provided herein.
	(5) An authorized program administrator may contract with one or more third-party administrators to implement the program as provided herein.
	(6) An authorized program administrator may levy betterment assessments to facilitate repayment of financing qualifying improvements. Costs incurred by the program administrator for such purpose may be collected as a betterment assessment.
	(7)  In accordance with Chapter 80, betterment assessments levied pursuant to this section and the interest, fees and any penalties thereon shall constitute a lien against the qualifying residential property until they are paid, notwithstanding the provisions of section 12 of chapter 80, and shall continue notwithstanding any alienation or conveyance of the qualifying residential property by one property owner to a new property owner. Betterment assessments have fixed interest rates based on market conditions and those rates are not capped by statutes or regulations intended to cover the interest rates of unsecured, credit-based finance options, neither are they limited by restrictions on other betterment financings.  A new property owner shall take title to the qualifying residential property subject to the betterment assessment and related lien.  The lien shall be levied and collected in the same manner as the property taxes of the participating municipality on real property, including, in the event of default or delinquency, with respect to any penalties, fees and lien priorities.  Each lien may be continued, recorded and released upon repayment in full of the betterment assessment in the manner provided for property tax liens.  Each lien shall take precedence over all other liens or encumbrances, except a lien for taxes of the municipality on real property.  If a lien for property taxes of the municipality is foreclosed, the betterment assessment lien shall be extinguished solely with regard to any installments that were due and owing on the date of foreclosure of such tax lien, but the betterment assessment lien shall otherwise survive the foreclosure.  To the extent betterment assessments are paid in installments and any such installment is not paid when due, the betterment assessment lien may be foreclosed to the extent of any unpaid installment payments and any penalties, interest and fees related thereto.  In the event such betterment assessment lien is foreclosed, such lien shall survive the foreclosure to the extent of any unpaid installment payments of the betterment assessment secured by such lien that were not the subject of such foreclosure.     
	(8) A program administrator may incur debt for the purpose of providing financing for qualifying improvements, which debt is payable from revenues received from the improved property or any other available revenue source authorized by law.
	(b) The owner of record of the residential property within the jurisdiction of an authorized program may apply to the authorized program administrator to finance a qualifying improvement. The program administrator may only enter into a financing agreement with the property owner.
	Section 3. (a) Before entering into a financing agreement, the program administrator must make each of the following findings based on a review of public records derived from a commercially accepted source and the property owner’s statements, records, and credit reports: (1) he total amount of any betterment assessment for a residential property under this section does not exceed 20 percent of the fair market value of the property as determined by customary methods; (2)the financing agreement does not utilize a negative amortization schedule, a balloon payment, or prepayment fees or fines other than nominal administrative costs; (3) capitalized interest included in the original balance of the assessment financing agreement does not constitute negative amortization; (4) all property taxes and any other assessments, including betterment assessments, levied on the same bill as the property taxes are current and have not been delinquent for the preceding 3 years, or the property owner’s period of ownership, whichever is less (5) there are no outstanding fines or fees related to zoning or code enforcement violations issued by a municipality, unless the qualifying improvement will remedy the zoning or code violation; (6) there are no involuntary liens, including, but not limited to, construction liens on the residential property; (7) no notices of default or other evidence of property based debt delinquency have been recorded and not released during the preceding 3 years or the property owner’s period of ownership, whichever is less; (8) the property owner is current on all mortgage debt on the residential property; (9)  the property owner has not been subject to a bankruptcy proceeding within the last 5 years unless it was discharged or dismissed more than 2 years before the date on which the property owner applied for financing; (10)  the residential property is not subject to an existing home equity conversion mortgage or reverse mortgage product; (11) the term of the financing agreement does not exceed the weighted average useful life of the qualified improvements to which the greatest portion of funds disbursed under the assessment contract is attributable, not to exceed 30 years; (12) the program administrator shall determine the useful life of a qualifying improvement using established standards, including certification criteria from government agencies or nationally recognized standards and testing organizations; (13) the total estimated annual payment amount for all betterment assessments entered into under this section on the residential property does not exceed 10 percent of the property owner’s annual household income; (14) income must be confirmed using reasonable evidence and not solely by a property owner’s statement; and (15) if the qualifying improvement is for the conversion of an onsite sewage treatment and disposal system to a central sewerage system, the property owner has utilized all available local government funding for such conversions and is unable to obtain financing for the improvement on more favorable terms through a local government program designed to support such conversions.
	(b) A property owner and the program administrator may agree to include in the financing agreement provisions for allowing change orders necessary to complete the qualifying improvement. Any financing agreement or contract for qualifying improvements which includes such provisions must meet the requirements of this paragraph. If a proposed change order on a qualifying improvement will increase the original cost of the qualifying improvement by 20 percent or more or will expand the scope of the qualifying improvement by more than 20 percent, before the change order may be executed which would result in an increase in the amount financed through the program administrator for the qualifying improvement, the program administrator must notify the property owner, provide an updated written disclosure form as described in section 4 to the property owner, and obtain written approval of the change from the property owner.
	(c) A financing agreement may not be entered into if the total cost of the qualifying improvement, including program fees and interest, is less than $5,000.
	(d) A financing agreement may not be entered into for qualifying improvements in buildings or facilities under new construction or construction for which a certificate of occupancy or similar evidence of substantial completion of new construction or improvement has not been issued.
	Section 4. (a) In addition to the requirements of sections 3 and 4 , a financing agreement may not be executed unless the program administrator first provides, including via electronic means, a written financing estimate and disclosure to the property owner which includes all of the following, each of which must be individually acknowledged in writing by the property owner: (1) the estimated total amount to be financed, including the total and itemized cost of the qualifying improvement, program fees, and capitalized interest; (2) the estimated annual betterment assessment; (3) the term of the financing agreement and the schedule for the betterment assessments; (4) the interest charged and estimated annual percentage rate; (5 a description of the qualifying improvement; (6) the total estimated annual costs that will be required to be paid under the assessment contract, including program fees; (7) the total estimated average monthly equivalent amount of funds that would need to be saved in order to pay the annual costs of the betterment assessment, including program fees; (8) the estimated due date of the first payment that includes the betterment assessment; (9) a  disclosure that the financing agreement may be canceled within 3 business days after signing the financing agreement without any financial penalty for doing so; (10 a disclosure that the property owner may repay any remaining amount owed, at any time, without penalty or imposition of additional prepayment fees or fines other than nominal administrative costs; (11) s disclosure that if the property owner sells or refinances the residential property, the property owner may be required by a mortgage lender to pay off the full amount owed under each financing agreement under this section; (12) a  disclosure that the assessment will be collected along with the property owner’s property taxes, and will result in a lien on the property from the date the financing agreement is recorded; (13) a disclosure that potential utility or insurance savings are not guaranteed, and will not reduce the assessment amount; and (14) a disclosure that failure to pay the assessment may result in penalties, fees, including attorney fees, court costs, and the issuance of a tax certificate that could result in the property owner losing the property and a judgment against the property owner, and may affect the property owner’s credit rating.
	(b) Prior to the financing agreement being approved, the program administrator must conduct an oral, recorded telephone call with the property owner during which the program administrator must confirm each finding or disclosure required in section 3 and this section.
	Section 5.  At least 5 business days before entering into a financing agreement, the property owner must provide to the holders or loan servicers of any existing mortgages encumbering or otherwise secured by the residential property a written notice of the owner’s intent to enter into a financing agreement together with the maximum amount to be financed, including the amount of any fees and interest, and the maximum annual assessment necessary to repay the total. A verified copy or other proof of such notice must be provided to the program administrator. A provision in any agreement between a mortgagor or other lienholder and a property owner, or otherwise now or hereafter binding upon a property owner, which allows for acceleration of payment of the mortgage, note, or lien or other unilateral modification solely as a result of entering into a financing agreement as provided for in this section is unenforceable. This subsection does not limit the authority of the holder or loan servicer to increase the required monthly escrow by an amount necessary to pay the annual assessment.
	Section 6. A property owner may cancel a financing agreement on a form established by the program administrator within 3 business days after signing the financing agreement without any financial penalty for doing so.
	Section 7. Any financing agreement executed pursuant to this section, or a summary memorandum of such agreement, shall be submitted for recording in the appropriate public records of the municipality within which the residential property is located by the program administrator within 10 business days after execution of the agreement and the 3-day cancellation period. A notice of lien for the full amount of the financing may be recorded in the public records of the county where the property is located. Such lien is not enforceable in a manner that results in the acceleration of the remaining nondelinquent unpaid balance under the assessment financing agreement.
	Section 8. At or before the time a seller executes a contract for the sale of any residential property for which a betterment assessment has been levied under this section and has an unpaid balance due, the seller shall give the prospective purchaser a written disclosure statement in the following form, which must be set forth in the contract or in a separate writing:
	QUALIFYING IMPROVEMENTS.—The property being purchased is subject to an assessment on the property pursuant to chapter 80 of the Massachusetts General Laws. The assessment is for a qualifying improvement to the property and is not based on the value of the property. You are encouraged to contact the property appraiser’s office to learn more about this and other assessments that may be provided by law.
	Section 9. Before disbursing any funds to a qualifying improvement contractor for a qualifying improvement on residential property, the program administrator shall confirm that the applicable work or service has been completed by verifying, either through TruePic or a similar geolocational verification application, or as applicable, that the final permit for the qualifying improvement has been closed with all permit requirements satisfied or a certificate of occupancy or similar evidence of substantial completion of construction or improvement has been issued .
	Section 10.  (a) A program administrator or its third-party administrator shall establish a process to register contractors for participation in a program authorized by a municipality pursuant to the provisions of this legislation. A qualifying improvement contractor may only perform such work that the contractor is appropriately licensed, registered, and permitted to conduct. At the time of application to participate and during participation in the program, contractors must: (1) hold all necessary licenses or registrations for the work to be performed which are in good standing; (2)comply with all applicable federal, state, and local laws and regulations, including obtaining and maintaining any other permits, licenses, or registrations required for engaging in business in the jurisdiction in which it operates and maintaining all state-required bond and insurance coverage; and (3) file with the program administrator a written statement that the contractor will comply with applicable laws and rules and qualifying improvement program policies and procedures, including those on advertising and marketing.
	(b) A third-party administrator or a program administrator, either directly or through an affiliate, may not be registered as a qualifying improvement contractor.
	(c) A program administrator shall establish and maintain: (1) a process to monitor qualifying improvement contractors for performance and compliance with requirements of the program and must conduct regular reviews of qualifying improvement contractors to confirm that each qualifying improvement contractor is in good standing; and (2) procedures for notice and imposition of penalties upon a finding of violation, which may consist of placement of the qualifying improvement contractor in a probationary status that places conditions for continued participation, suspension, or termination from participation in the program.
	Section 11. (a)A program administrator may contract with one or more third-party administrators to administer a program authorized by a municipality pursuant to the provisions of this legislation on behalf of and at the discretion of the program administrator.
	(b) The third-party administrator must be independent of the program administrator and have no conflicts of interest between managers or owners of the third-party administrator and program administrator managers, owners, officials, or employees with oversight over the contract. A program administrator, either directly or through an affiliate, may not act as a third party administrator for itself or for another program administrator.
	(c) The contract must provide for the entity to administer the program according to the requirements set forth herein and the terms of the vote or resolution by which the municipality authorized the program. However, only the program administrator may levy or administer betterment assessments.
	The program administrator must include in any contract with the third-party administrator the right to perform annual reviews of the administrator to confirm compliance with the requirements set forth herein, the terms of the vote or resolution by which the municipality authorized the program, and the contract with the program administrator.      
	Section 12.  (a) When communicating with a property owner, a program administrator, qualifying improvement contractor, or third-party administrator may not suggest or imply: (1) that a betterment assessment authorized under the provisions of this legislation is a government assistance program; (2)that qualifying improvements are free or provided at no cost, or that the financing related to a betterment assessment authorized under the provisions of this legislation is free or provided at no cost; or (3) that the financing of a qualifying improvement using the program authorized pursuant to this legislation does not require repayment of the financial obligation.
	(b) When communicating with a property owner, a program administrator, qualifying improvement contractor, or third-party administrator may not (1) make any representation as to the tax deductibility of a betterment assessment; (2) provide to a qualifying improvement contractor any information that discloses the amount of financing for which a property owner is eligible for qualifying improvements or the amount of equity in a residential property; (3) advertise the availability of betterment assessments for, or solicit program participation on behalf of, the program administrator unless the contractor is registered by the program administrator to participate in the program and is in good standing with the program administrator; (4)  provide any payment, fee, or kickback to a qualifying improvement contractor for referring property owners to the program administrator or third-party administrator. However, a program administrator or third-party administrator may provide information to a qualifying improvement contractor to facilitate the installation of a qualifying improvement for a property owner; (5) reimburse a qualifying improvement contractor for its expenses in advertising and marketing campaigns and materials; or (6) provide any direct cash payment or other thing of material value to a property owner which is explicitly conditioned upon the property owner entering into a financing agreement. However, a program administrator or third-party administrator may offer programs or promotions on a nondiscriminatory basis that provide reduced fees or interest rates if the reduced fees or interest rates are reflected in the betterment assessments and are not provided to the property owner as cash consideration.
	(c) A program administrator, qualifying improvement contractor, or third-party administrator may encourage a property owner to seek the advice of a tax professional regarding tax matters related to assessments.
	Section 13. (a) A recorded financing agreement may not be removed from attachment to a residential property if the property owner fraudulently obtained funding pursuant to the provisions of this legislation. A financing agreement may not be enforced, and a recorded financing agreement may be removed from attachment to a residential property and deemed null and void, if: (1)the property owner applied for, accepted, and canceled a financing agreement within the 3-business-day period pursuant to the provisions of this legislation. A qualifying improvement contractor may not begin work under a canceled contract; (2)  a person other than the property owner obtained the recorded financing agreement. The court may enter an order which holds that person or persons personally liable for the debt; or (3)the program administrator, third-party administrator, or qualifying improvement contractor approved or obtained funding through fraudulent means and in violation of the provisions of this legislation for qualifying improvements on the residential property.
	(b)If a qualifying improvement contractor has initiated work on residential property under a contract deemed unenforceable under this section, the qualifying improvement contractor: (1) may not receive compensation for that work under the financing agreement;  (2)must restore the residential property to its original condition at no cost to the property owner; and (3) must immediately return any funds, property, and other consideration given by the property owner. If the property owner provided any property and the qualifying improvement contractor does not or cannot return it, the qualifying improvement contractor must immediately return the fair market value of the property or its value as designated in the contract, whichever is greater.
	(c) If the qualifying improvement contractor has delivered chattel or fixtures to residential property pursuant to a contract deemed unenforceable under this section, the qualifying improvement contractor has 90 days after the date on which the contract was executed to retrieve the chattel or fixtures, provided that: (1)the qualifying improvement contractor has fulfilled the requirements of paragraphs (3)(a) and (b); and  (2)  and the chattel and fixtures can be removed at the qualifying improvement contractor’s expense without damaging the residential property.
	(d) If a qualifying improvement contractor fails to comply with this section, the property owner may retain any chattel or fixtures provided pursuant to a contract deemed unenforceable under this section.
	(e) A contract that is otherwise unenforceable under this section remains enforceable if the property owner waives his or her right to cancel the contract or cancels the financing agreement pursuant to the provisions of this legislation, but allows the qualifying improvement contractor to proceed with the installation of the qualifying improvement.
	Section 14. (a) Each program administrator that is authorized to administer a program for financing qualifying improvements to residential property under the provisions of this legislation shall post on its website an annual report within 45 days after the end of its fiscal year containing the following information from the previous year for each program authorized under the provisions of this legislation: (1) the number and types of qualifying improvements funded; and (2) he aggregate, average, and median dollar amounts of annual betterment assessments and the total number of betterment assessments collected pursuant to financing agreements for qualifying improvements.