S 3227

SENATE . . . . . . . . . . . . . . No. 3227
     Senate, July 23, 2026 -- Text of amendment (410) (offered by Senator Edwards) to the Ways and
     Means amendment (Senate, No. 3178) to the House Bill relative to economic development in the
     commonwealth.
  The Commonwealth of Massachusetts
  _______________
  In the One Hundred and Ninety-Fourth General Court
  (2025-2026)
  _______________
1by inserting after section 84 the following section:-
2“SECTION 84A. The General Laws are hereby amended by inserting after chapter 80A
3 the following chapter:-
4Chapter 80B
5Residential Property Improvement Financing Program
6Section 1. As used in this chapter, the following words shall have the following meanings
7 unless the context clearly requires otherwise:
8“Betterment assessment”, an assessment levied on qualifying residential property
9 pursuant to chapter 80.
10“Municipality”, a city, town or county.
11“Program administrator”, a municipality or authorized legal entity operating a qualifying
12 improvement financing program.
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13“Property owner”, the owner or owners of record, excluding persons merely occupying
14 the property.
15“Qualifying improvement”, permanent improvements to residential property including
16 storm hardening, flood mitigation, energy efficiency, renewable energy, water conservation
17 improvements, sewerage, roofing, repair and replacement of concrete foundations and other
18 resiliency measures as further defined by regulation.
19“Qualifying improvement contractor”, a licensed or registered contractor who has been
20 registered to participate by a program administrator to install or otherwise perform work to make
21 qualifying improvements on residential property.
22“Residential property”, real property zoned residential or multifamily residential with
23 four or fewer dwelling units.
24“Third-party administrator”, an entity under contract with a program administrator.
25Section 2. (a)(1) A municipality may, by a majority vote of the city or town council, by a
26 majority vote of the board of selectmen or by resolution of its legislative body, as may be
27 appropriate, authorize a residential property assessed clean energy program to finance qualifying
28 improvements to residential property and shall assess, collect, remit and assign betterment
29 assessments, in return for qualifying improvements for a benefitted property owner located
30 within such municipality and for costs reasonably incurred in performing such acts. A program
31 administrator may only offer a program for qualifying improvements to residential properties
32 within a municipality that has adopted the program.
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33(2) A municipality may enter into an interlocal agreement providing for a partnership
34 between not less than 2 municipalities for the purpose of facilitating a program to finance
35 qualifying improvements to residential property located within the jurisdiction of the
36 municipalities that are party to the agreement.
37(3) A municipality may deauthorize a program administrator through repeal of the vote or
38 the resolution adopted pursuant to paragraph (1). Any recorded financing agreements at the time
39 of deauthorization shall continue, except as otherwise provided herein.
40(4) An authorized program administrator may contract with third-party administrators to
41 implement the program as provided herein.
42(5) An authorized program administrator may levy betterment assessments to facilitate
43 repayment of financing qualifying improvements.
44(6) Consistent with the requirements of chapter 80, betterment assessments levied
45 pursuant to this section and the interest, fees and any penalties thereon shall constitute a lien
46 against the qualifying residential property until they are paid, notwithstanding section 12 of
47 chapter 80, and shall continue notwithstanding any alienation or conveyance of the qualifying
48 residential property by the property owner to a new property owner. Betterment assessments
49 shall have fixed interest rates based on market conditions and such rates shall not be capped by
50 statutes or regulations intended to cover the interest rates of unsecured, credit-based finance
51 options and shall not be limited by restrictions on other betterment financing. A new property
52 owner shall take title to the qualifying residential property subject to the betterment assessment
53 and related lien. The lien shall be levied and collected in the same manner as the property taxes
54 of the participating municipality on real property, including, in the event of default or
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55 delinquency, with respect to any penalties, fees and lien priorities. Each lien may be continued,
56 recorded and released upon repayment in full of the betterment assessment in the manner
57 provided for property tax liens. If betterment assessments are paid in installments and any such
58 installment is not paid when due, the betterment assessment lien may be foreclosed to the extent
59 of any unpaid installment payments and any penalties, interest and fees related thereto.
60(7) A program administrator may incur debt for the purpose of providing financing for
61 qualifying improvements, which debt is payable from revenues received from the improved
62 property or any other available revenue source authorized by law.
63(b) The owner of record of the residential property within the jurisdiction of an
64 authorized program may apply to the authorized program administrator to finance a qualifying
65 improvement. The program administrator shall only enter into a financing agreement with the
66 property owner.
67Section 3. (a) Prior to entering into a financing agreement, the program administrator
68 shall make each of the following findings based on a review of public records derived from a
69 commercially accepted source and the property owner’s statements, records and credit reports:
70 (i) the total amount of any betterment assessment for a residential property under this section
71 does not exceed 20 per cent of the fair market value of the property as determined by customary
72 methods; (ii) the financing agreement does not utilize a negative amortization schedule, a balloon
73 payment or prepayment fees or fines other than nominal administrative costs; (iii) the capitalized
74 interest included in the original balance of the assessment financing agreement does not
75 constitute negative amortization; (iv) all property taxes and any other assessments, including
76 betterment assessments, levied on the same bill as the property taxes are current and have not
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77 been delinquent for the preceding 3 years, or the property owner’s period of ownership,
78 whichever is less; (v) there are no outstanding fines or fees related to zoning or code enforcement
79 violations issued by a municipality, unless the qualifying improvement will remedy the zoning or
80 code violation; (vi) there are no involuntary liens, including, but not limited to, construction liens
81 on the residential property; (vii) no notices of default or other evidence of property based debt
82 delinquency have been recorded or released during the preceding 3 years or the property owner’s
83 period of ownership, whichever is less; (viii) the property owner is current on all mortgage debt
84 on the residential property; (ix) the property owner has not been subject to a bankruptcy
85 proceeding within the last 5 years unless it was discharged or dismissed more than 2 years before
86 the date on which the property owner applied for financing; (x) the residential property is not
87 subject to an existing home equity conversion mortgage or reverse mortgage product; (xi) the
88 term of the financing agreement does not exceed the weighted average useful life of the qualified
89 improvements to which the greatest portion of funds disbursed under the assessment contract is
90 attributable, not to exceed 30 years; (xii) the useful life of a qualifying improvement using
91 established standards, including certification criteria from government agencies or nationally
92 recognized standards and testing organizations; (xiii) the total estimated annual payment amount
93 for all betterment assessments entered into under this section on the residential property does not
94 exceed 10 percent of the property owner’s annual household income; and (xiv) the property
95 owner’s income has been confirmed using reasonable evidence and not relying solely on a
96 property owner’s statement.
97(b) A property owner and the program administrator may agree to include in the
98 financing agreement provisions for allowing change orders necessary to complete the qualifying
99 improvement. Any financing agreement or contract for qualifying improvements which includes
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100 such provisions shall meet the requirements of this paragraph. If a proposed change order on a
101 qualifying improvement is expected to increase the original cost of the qualifying improvement
102 by not less than 20 per cent or is expected to expand the scope of work for the qualifying
103 improvement by more than 20 per cent, before the change order may be executed which would
104 result in an increase in the amount financed through the program administrator for the qualifying
105 improvement, the program administrator shall notify the property owner, provide an updated
106 written disclosure form as described in subsection (d) to the property owner and obtain written
107 approval of the change from the property owner.
108(c) A financing agreement shall not be entered into: (i) if the total cost of the qualifying
109 improvement, including program fees and interest, is less than $5,000; or (ii) for qualifying
110 improvements in buildings or facilities under new construction or construction for which a
111 certificate of occupancy or similar evidence of substantial completion of new construction or
112 improvement has not been issued.
113(d) A financing agreement shall not be executed unless the program administrator first
114 provides, including via electronic means, a written financing estimate and disclosure to the
115 property owner which includes all of the following, each of which shall be individually
116 acknowledged in writing by the property owner: (i) the estimated total amount to be financed,
117 including the total and itemized cost of the qualifying improvement, program fees and
118 capitalized interest; (ii) the estimated annual betterment assessment; (iii) the term of the
119 financing agreement and the schedule for the betterment assessments; (iv) the interest charged
120 and estimated annual percentage rate; (v) a description of the qualifying improvement; (vi) the
121 total estimated annual costs that will be required to be paid under the assessment contract,
122 including program fees; (vii) the total estimated average monthly equivalent amount of funds
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123 that would need to be saved in order to pay the annual costs of the betterment assessment,
124 including program fees; (viii) the estimated due date of the first payment that includes the
125 betterment assessment; (ix) a disclosure that the financing agreement may be canceled within 3
126 business days after signing the financing agreement without any financial penalty for doing so;
127 (x) a disclosure that the property owner may repay any remaining amount owed, at any time,
128 without penalty or imposition of additional prepayment fees or fines other than nominal
129 administrative costs; (xi) disclosure that if the property owner sells or refinances the residential
130 property, the property owner may be required by a mortgage lender to pay off the full amount
131 owed under each financing agreement under this section; (xii) a disclosure that the assessment
132 will be collected along with the property owner’s property taxes and will result in a lien on the
133 property from the date the financing agreement is recorded; (xiii) a disclosure that potential
134 utility or insurance savings are not guaranteed and will not reduce the assessment amount; and
135 (xiv) a disclosure that failure to pay the assessment may result in penalties, fees, including
136 attorney fees, court costs and the issuance of a tax certificate that could result in the property
137 owner losing the property and a judgment against the property owner and may affect the property
138 owner’s credit rating.
139(e) Prior to the financing agreement being approved, the program administrator shall
140 conduct an oral, recorded telephone call with the property owner during which the program
141 administrator shall confirm each finding or disclosure required in this section.
142Section 4. Not less than 5 business days before entering into a financing agreement, the
143 property owner shall provide to the holders or loan servicers of any existing mortgages
144 encumbering or otherwise secured by the residential property a written notice of the owner’s
145 intent to enter into a financing agreement together with the maximum amount to be financed,
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146 including the amount of any fees and interest, and the maximum annual assessment necessary to
147 repay the total. A verified copy or other proof of such notice shall be provided to the program
148 administrator. A provision in any agreement between a mortgagor or other lienholder and a
149 property owner, or otherwise now or hereafter binding upon a property owner, which allows for
150 acceleration of payment of the mortgage, note or lien or other unilateral modification solely as a
151 result of entering into a financing agreement as provided for in this section is unenforceable. This
152 subsection shall not limit the authority of the holder or loan servicer to increase the required
153 monthly escrow by an amount necessary to pay the annual assessment.
154Section 5. A property owner may cancel a financing agreement on a form established by
155 the program administrator within 3 business days after signing the financing agreement without
156 any financial penalty.
157Section 6. A financing agreement executed pursuant to this section, or a summary
158 memorandum of such agreement, shall be submitted for recording in the appropriate public
159 records of the municipality within which the residential property is located by the program
160 administrator within 10 business days after execution of the agreement and the 3-day
161 cancellation period. A notice of lien for the full amount of the financing shall may be recorded in
162 the public records of the county where the property is located. Such lien is not enforceable in a
163 manner that results in the acceleration of the remaining nondelinquent unpaid balance under the
164 assessment financing agreement.
165Section 7. At or before the time a seller executes a contract for the sale of any residential
166 property for which a betterment assessment has been levied under this section and has an unpaid
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167 balance due, the seller shall give the prospective purchaser a written disclosure statement in the
168 following form, which shall be set forth in the contract or in a separate writing:
169QUALIFYING IMPROVEMENTS.—The property being purchased is subject to an
170 assessment on the property pursuant to chapter 80 of the Massachusetts General Laws. The
171 assessment is for a qualifying improvement to the property and is not based on the value of the
172 property. You are encouraged to contact the property appraiser’s office to learn more about this
173 and other assessments that may be provided by law.
174Section 8. Before disbursing any funds to a qualifying improvement contractor for a
175 qualifying improvement on residential property, the program administrator shall confirm that the
176 applicable work or service has been completed by verifying, through a geolocational verification
177 application, or as applicable, that the final permit for the qualifying improvement has been closed
178 with all permit requirements satisfied or a certificate of occupancy or similar evidence of
179 substantial completion of construction or improvement has been issued.
180Section 9. (a) A program administrator or its third-party administrator shall establish a
181 process to register contractors for participation in a program authorized by a municipality
182 pursuant to this chapter. A qualifying improvement contractor may only perform such work that
183 the contractor is appropriately licensed, registered and permitted to conduct. At the time of
184 application to participate and during participation in the program, contractors shall: (i) hold all
185 necessary licenses or registrations for the work to be performed which are in good standing; (ii)
186 comply with all applicable federal, state and local laws and regulations, including obtaining and
187 maintaining any other permits, licenses or registrations required for engaging in business in the
188 jurisdiction in which it operates and maintaining all state-required bond and insurance coverage;
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189 and (iii) file with the program administrator a written statement that the contractor will comply
190 with applicable laws and rules and qualifying improvement program policies and procedures,
191 including those on advertising and marketing.
192(b) A third-party administrator or a program administrator, either directly or through an
193 affiliate, shall not be registered as a qualifying improvement contractor.
194(c) A program administrator shall establish and maintain: (i) a process to monitor
195 qualifying improvement contractors for performance and compliance with requirements of the
196 program and shall conduct regular reviews of qualifying improvement contractors to confirm that
197 each qualifying improvement contractor is in good standing; and (ii) procedures for notice and
198 imposition of penalties upon a finding of violation, which may consist of placement of the
199 qualifying improvement contractor in a probationary status that places conditions for continued
200 participation, suspension or termination from participation in the program.
201Section 10. (a) A program administrator may contract with third-party administrators to
202 administer a program authorized by a municipality pursuant to this chapter on behalf of and at
203 the discretion of the program administrator.
204(b) The third-party administrator shall be independent of the program administrator and
205 have no conflicts of interest between managers or owners of the third-party administrator and
206 program administrator managers, owners, officials, or employees with oversight over the
207 contract. A program administrator, either directly or through an affiliate, shall not act as a third
208 party administrator for itself or for another program administrator.
209(c) The contract shall provide for the entity to administer the program according to the
210 requirements set forth herein and the terms of the vote or resolution by which the municipality
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211 authorized the program; provided, however, that only the program administrator may levy or
212 administer betterment assessments.
213The program administrator shall include in any contract with the third-party administrator
214 the right to perform annual reviews of the administrator to confirm compliance with the
215 requirements set forth herein, the terms of the vote or resolution by which the municipality
216 authorized the program, and the contract with the program administrator.
217Section 11. (a) When communicating with a property owner, a program administrator,
218 qualifying improvement contractor or third-party administrator shall not suggest or imply: (i) that
219 a betterment assessment authorized under this chapter is a government assistance program; (ii)
220 that qualifying improvements are free or provided at no cost, or that the financing related to a
221 betterment assessment authorized under this chapter is free or provided at no cost; or (iii) that the
222 financing of a qualifying improvement using the program authorized pursuant to this chapter
223 does not require repayment of the financial obligation.
224(b) When communicating with a property owner, a program administrator, qualifying
225 improvement contractor or third-party administrator shall not: (i) make any representation as to
226 the tax deductibility of a betterment assessment; (ii) provide to a qualifying improvement
227 contractor any information that discloses the amount of financing for which a property owner is
228 eligible for qualifying improvements or the amount of equity in a residential property; (iii)
229 advertise the availability of betterment assessments for, or solicit program participation on behalf
230 of, the program administrator unless the contractor is registered by the program administrator to
231 participate in the program and is in good standing with the program administrator; (iv) provide
232 any payment, fee or kickback to a qualifying improvement contractor for referring property
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233 owners to the program administrator or third-party administrator; provided, however, that a
234 program administrator or third-party administrator may provide information to a qualifying
235 improvement contractor to facilitate the installation of a qualifying improvement for a property
236 owner; (v) reimburse a qualifying improvement contractor for its expenses in advertising and
237 marketing campaigns and materials; or (vi) provide any direct cash payment or other thing of
238 material value to a property owner which is explicitly conditioned upon the property owner
239 entering into a financing agreement; provided, however, that a program administrator or third-
240 party administrator may offer programs or promotions on a nondiscriminatory basis that provide
241 reduced fees or interest rates if the reduced fees or interest rates are reflected in the betterment
242 assessments and are not provided to the property owner as cash consideration.
243(c) A program administrator, qualifying improvement contractor or third-party
244 administrator may encourage a property owner to seek the advice of a tax professional regarding
245 tax matters related to assessments.
246Section 12. (a) A recorded financing agreement shall not be removed from attachment to
247 a residential property if the property owner fraudulently obtained funding pursuant to this
248 chapter. A financing agreement shall not be enforced, and a recorded financing agreement may
249 be removed from attachment to a residential property and deemed null and void, if: (i) the
250 property owner applied for, accepted and canceled a financing agreement within the 3-business-
251 day period pursuant to this chapter; provided, however, that a qualifying improvement contractor
252 shall not begin work under a canceled contract; (ii) a person other than the property owner
253 obtained the recorded financing agreement; provided, however, that the court may enter an order
254 which holds a person personally liable for the debt; or (iii) the program administrator, third-party
255 administrator or qualifying improvement contractor approved or obtained funding through
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256 fraudulent means and in violation of this chapter for qualifying improvements on the residential
257 property.
258(b) If a qualifying improvement contractor has initiated work on residential property
259 under a contract deemed unenforceable under this section, the qualifying improvement contractor
260 shall: (i) not receive compensation for that work under the financing agreement; (ii) restore the
261 residential property to its original condition at no cost to the property owner; and (iii)
262 immediately return any funds, property and other consideration given by the property owner. If
263 the property owner provided any property and the qualifying improvement contractor does not or
264 cannot return it, the qualifying improvement contractor shall immediately return the fair market
265 value of the property or its value as designated in the contract, whichever is greater.
266(c) If the qualifying improvement contractor has delivered chattel or fixtures to
267 residential property pursuant to a contract deemed unenforceable under this section, the
268 qualifying improvement contractor has 90 days after the date on which the contract was executed
269 to retrieve the chattel or fixtures; provided, however, that: (i) the qualifying improvement
270 contractor has fulfilled the requirements of subsections (a) and (b) of section 3; and (ii) the
271 chattel and fixtures can be removed at the qualifying improvement contractor’s expense without
272 damaging the residential property.
273(d) If a qualifying improvement contractor fails to comply with this section, the property
274 owner may retain any chattel or fixtures provided pursuant to a contract deemed unenforceable
275 under this section.
276(e) A contract that is otherwise unenforceable under this section shall remain enforceable
277 if the property owner waives the owner’s right to cancel the contract or cancels the financing
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278 agreement pursuant to the provisions of this chapter, but allows the qualifying improvement
279 contractor to proceed with the installation of the qualifying improvement.
280Section 13. Each program administrator that is authorized to administer a program for
281 financing qualifying improvements to residential property under this section shall post on its
282 website an annual report within 45 days after the end of each fiscal year containing the following
283 information from the previous year for each program authorized under the provisions of this
284 chapter: (i) the number and types of qualifying improvements funded; and (ii) the aggregate,
285 average and median dollar amounts of annual betterment assessments and the total number of
286 betterment assessments collected pursuant to financing agreements for qualifying
287 improvements.”.
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