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• Assembly Bill 811 (2008) allows renewable energy sources and energy efficiency upgrades to be financed through an assessment district. Additional legislation expanded projects eligible for financing to include water-efficiency improvements, electric vehicle charging stations, and seismic improvements. • Senate Bill 555 (2011) amended the Mello-Roos Community Facilities Act to allow for the creation of Community Facility Districts (CFDs) for the purpose of financing or refinancing the acquisition, installation, and improvement of energy efficiency, water conservation, renewable energy, seismic improvements, and electric vehicle charging infrastructure. Additional laws expand the original legislation and provide for additional consumer protections: • AB 2693 (2016) enhanced disclosures to homeowners participating in PACE programs and guarantees the right to cancel PACE financing within three business days of execution. AB 2693 also prohibits marketing promises of monetary or percentage representations of increased value to a property owner regarding the effect the financed improvements will have on the market value of the property unless the market value is estimated using one of specified methods. • Senate Bill 242 (2017) requires a recorded telephone call to residential consumers to confirm key terms of the agreement in plain language. This call and contractual documents must also be available in one of the five enumerated non-English languages as necessary. SB 242 also prohibits kickbacks to contractors for steering consumers into a particular program and any mis-representation as to the tax deductibility of a PACE assessment contract. Lastly, PACE providers are prevented from disclosing to contractors the amount of funds the property owner is eligible for under a PACE assessment under this law. • Assembly Bill 1284 (2017) establishes state oversight for California's PACE program and requires PACE administrators that are not local governments to obtain a license under California Financing Law. They are also held accountable for screening, training, and monitoring the contractors and sales reps enrolled in their programs. Lastly, PACE providers have to determine a consumer's ability to repay, including income verification, before entering into a PACE assessment. As a result of the first priority lien status of residential PACE financing, which means PACE loans are paid off first ahead of traditional mortgages, the Federal Housing Finance Agency (FHFA) announced in 2010 its opposition to PACE financing programs. Fannie Mae and Freddie Mac would not purchase mortgages for homes with PACE obligations, unless the PACE assessment was paid off at the time the property was refinanced or sold, the same as would happen with any other asset-backed financing. In response, California created a $10 million PACE Loan Loss Reserve (PLLR) to keep first mortgage lenders whole during a foreclosure or a forced sale of a property with a PACE assessment. No claims to use the Loss Reserve have been filed to date. Page 3 of 7