23 Jun Nebraska Legislative Update
The Nebraska legislature recently amended its laws relating to financial consumer protections and enacted the Property Assessed Clean Energy Act (PACE), to promote energy efficiency improvements and renewable energy systems. Both bills discussed here are effective July 20, 2016.
NEBRASKA LEGISLATIVE BILL 835
The Nebraska Credit Report Protection Act was amended to add special protections in credit reporting for “Protected Consumers” which are individuals who are either
- Under 16 years of age at the time a request for the placement of a security freeze is made; or
- An incapacitated person for whom a guardian or guardian ad litem has been appointed.
The amendments also provide the steps that a consumer must take to place a security freeze on his or her file, the process for removing a security freeze and the length of time a security freeze will remain in effect as well as rules governing the credit reporting agency’s handling of a security freeze.
The Nebraska Consumer Protection Act (“CPA”) was amended to specify that the Attorney General may provide copies of documentary material to an official of Nebraska or any other state, or an official of the federal government, who is charged with the enforcement of federal or state antitrust or consumer protection laws, if such official agrees in writing not to disclose such documentary material to any person other than the official’s authorized employees, except as such disclosure is permitted by law. “Documentary Material” is any original or copy of any book, record, report, memorandum, paper, communication, tabulation, map, chart, photograph, mechanical transcription, or other tangible document or recording, wherever situated, which the Attorney General believes to be relevant to the subject matter of an investigation of a possible violation of the CPA.
The CPA was further amended to indicate that any person who violates the prohibitions against restraint of trade or monopolies or the terms of any injunction issued as provided in the CPA will forfeit and pay a civil penalty of not more than $500,000 (previously $25,000).
The Nebraska Deceptive Trade Practices Act was amended to provide that, in addition to previously specified acts, a person engages in a deceptive trade practice when:
· In the course of his or her business, vocation, or occupation, he or she represents that goods or services do not have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they have or that a person does not have a sponsorship, approval, status, affiliation, or connection that he or she has; and
· In connection with the solicitation of funds or other assets for any charitable purpose, or in connection with any solicitation which represents that funds or assets will be used for any charitable purpose, he or she uses or employs any deception, fraud, false pretense, false promise, misrepresentation, unfair practice, or concealment, suppression, or omission of any material fact.
The Nebraska Financial Data Protection and Consumer Notification of Data Security Breach Act was amended to provide that:
· Data will not be considered encrypted if the confidential process or key was or is reasonably believed to have been acquired as a result of the breach of the security of the system;
· If notice of a breach of security of a system is required by law, the individual or commercial entity must also, not later than the time when notice is provided to the Nebraska resident, provide notice of the breach of security of the system to the Attorney General.
NEBRASKA LEGISLATIVE BILL 1012
The upfront costs for energy efficiency improvements can be prohibitive for property owners; therefore, municipalities are authorized to implement an alternative financing method through the creation of clean energy assessment districts.
PACE defines in detail the following: energy efficient improvements, energy efficient related items, energy projects, renewable energy resource and renewable energy system. It also sets forth the requirements for a municipality to create one or more clean energy assessment districts.
After a municipality passes an ordinance providing for the creation of one or more clean energy assessment districts and satisfies certain other requirements (including a public hearing), it may enter into an assessment contract with the record owner and, if applicable, with a third-party lender, to finance an energy project.
“Assessment contract” means a contract entered into between a municipality, a property owner, and, if applicable, a third-party lender under which the municipality agrees to provide financing for an energy project in exchange for a property owner’s agreement to pay an annual assessment for a period not to exceed the weighted average useful life of the energy project.
Before a municipality may enter into an assessment contract, it must verify various information. If the property is other than single-family residential property, the owner of the property must obtain an acknowledged and verified written consent and subordination agreement executed by each mortgage holder or trust deed beneficiary stating that the mortgagee or beneficiary consents to the imposition of the annual assessment and that the priority of the mortgage or trust deed is subordinated to the PACE lien. The owner of the property enters into an agreement to pay the annual assessments, which are a covenant that runs with the land and which will be obligations upon future owners of the property. Assessment contracts are to be recorded by the register of deeds of the county in which the property is located.
For single-family residential property, all annual assessments imposed constitute a PACE lien until all annual assessments are paid in full. The municipality must, upon imposition of the initial annual assessment, record a notice of such lien in the office of the register of deeds of the county in which the property is located.
Annual PACE assessments are levied and collected at the same time and in the same manner as property taxes.
For single-family residential property, the PACE lien is:
- Subordinate to all liens on the property recorded prior to the time the notice of the PACE lien is recorded;
- Subordinate to a first mortgage or trust deed on the property recorded after the notice of the PACE lien is recorded; and
- Have priority over any other lien on the property recorded after the notice of the PACE lien is recorded.
In the event of a foreclosure sale of single family property with a PACE lien, the proceeds shall be paid in accordance with the priorities established above. If there are insufficient proceeds from such sale, or from any other means to satisfy the delinquent annual PACE assessments, such delinquent annual assessments will be extinguished. Any annual assessment that has not yet become delinquent is not accelerated or extinguished under a foreclosure sale; and upon the transfer of the property, the nondelinquent annual assessments shall continue as a lien on the property, subject to the priorities above.
When all annual assessments are paid in full, a release of the PACE lien must be recorded in the office of the register of deeds.
If the holder or loan servicer of any existing mortgage or trust deed that encumbers the property has established a payment schedule or escrow account to accrue property taxes or insurance, such holder or loan servicer may increase the required monthly payment, if any, by an amount necessary to pay the annual PACE assessment.