Chapter 8.32 — MSU LEASEHOLD MARKETING

The purpose of this chapter is to authorize establishment of the regulatory framework for the leasehold marketing of solar energy devices within the city of Palm Springs.

California law currently encourages the leasehold marketing of solar energy devices within the state of California by providing tax credits to California taxpayers who lease such devices from a municipal utility or from any lessor granted a permit from a municipal solar utility. Upon the establishment of the Palm Springs municipal solar utility residents of Palm Springs who lease solar energy devices through such utility should be able to obtain such tax credits. However, as legal title to such solar energy devices is held by a person other than the resident-user, the latter is particularly susceptible to harm caused by consumer deception, safety hazards and the interruption of service. To help prevent such harm from occurring and to promote the economic feasibility of solar energy use within the city of Palm Springs, leasehold interests in solar energy devices may be marketed within the city's jurisdiction by complying with the provisions of this chapter and any rules and regulations promulgated by the city manager or city council of the city of Palm Springs to implement any provisions of this chapter. Persons not participating in the municipal solar utility are not subject to any of the procedures and provisions of this chapter. (Ord. 1168 § 2, 1982)

The following definitions apply to those persons who will be participating in the municipal solar utility. When used in this chapter or Chapter 8.30 of this code, unless the context otherwise requires:

"City" means the city of Palm Springs.

"Energy office" or "office" means the office, under the direction of the city manager, responsible for managing the Palm Springs municipal solar utility and performing the city's obligation under Title 1 or Title 2 of this code.

"Lease arrangement" means a contract between a lessee and an investor for the leasing of solar energy devices, owned by the investor and leased and possessed by the lessee, which is affixed to or located at and servicing the real property owned or occupied by the lessee.

"Lease arrangement installer" or "installer" means any person, properly licensed under the provisions of the California Contractors License Law, including any solar specialty license, installing, removing or servicing solar energy devices subject to a lease arrangement.

"Lease arrangement marketing company" or "leasing company" means any person advertising, marketing, placing, and arranging, pursuant to a lease arrangement, for installation and servicing of solar energy devices for a fee.

"Lessee" means any person leasing a solar energy device on or affixed to the real property owned or occupied by such person.

"Management company" means any person serving an agent of an investor for purposes of collecting leasehold payments, making payments for obligations incurred in lease arrangements, and maintaining accounting records or collections and payments for solar energy devices.

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City of Palm Springs, CA

BUILDINGS AND CONSTRUCTION

§ 8.32.020

§ 8.32.030

"Municipal solar utility" or "MSU" means a program conducted by a local government or its authorized agent to promote the utilization of renewable energy and energy conservation technologies.

"Permittee" means any leasing company, installer or installation company, or management company that has complied with all necessary requirements and obtained a permit to participate in the MSU solar leasing program.

"Person" means any natural person, partnership, corporation, business trust, association, company or other legal entity.

"Solar energy device" includes equipment and materials (and parts solely related to the functioning of such equipment) that is intended to be or located on or affixed to real property within the city of Palm Springs and that uses solar energy directly to (i) generate electricity; (ii) heat or cool a building or structure; (iii) provide hot water for domestic service, recreational, or therapeutic purposes; or (iv) provide process heat or mechanical energy. Generally, these functions are accomplished through the use of equipment such as collectors (to absorb sunlight and create hot liquids or air), thermostats (to activate pumps or fans which circulate the hot liquids or air), and heat exchangers (to utilize hot liquids or air to create hot air or water).

"Tax incentives" means California or federal investment tax credits, solar tax credits, accelerated depreciation, tax deferral and other tax benefits accruing through the leasehold of solar energy devices under existing state and federal tax law. (Ord. 1168 § 2, 1982)

• (a) No person shall attempt to operate as a leasing company, installer, or management company in the municipal solar utility within the city without having a valid permit from the city.

• (b) The energy office, consisting of the energy coordinator and staff, if any, under the direction of the city manager is authorized and directed to undertake the following action to develop, implement, and administer the city's MSU solar leasing program:

  • (1) Develop, in cooperation with the city attorney, all documents necessary to administer and operate the MSU solar leasing program.

  • (2) Prepare application procedures and eligibility criteria governing participation by leasing companies, installers, and management companies in the MSU solar leasing program. Any entity satisfactorily meeting such eligibility criteria shall be issued an annual permit to participate in the MSU program.

    • (A) As a prerequisite to application for a permit, the energy office may require the inspection of all appropriate records of the applicant including, but not limited to, financial information and investment transaction pertinent to determining whether or not the applicant satisfies all eligibility criteria. All financial records of the applicant shall be deemed to be private and confidential and not subject to public review. All such records of applicants not granted a permit may be returned to the applicant upon request by the applicant within fifteen days of the denial of the permit. Records of all persons granted a permit shall be subject to such review and audit by other public agencies as may be required by law.

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City of Palm Springs, CA

PALM SPRINGS CODE

§ 8.32.030

§ 8.32.040

• (B) The energy office shall compile a list of all firms, known as "permittees," who obtain permits to participate in the MSU solar leasing program.

• (C) The energy office shall develop and implement procedures to be used for revoking the permit of any permittee failing to comply with this chapter and Chapter 8.30 of this code and any rules and regulations promulgated to implement any sections of said chapters. All criteria and procedures proposed hereunder by the energy office shall be subject to review by the city attorney and approval of the city council.

• (D) The energy office shall review and approve all lease terms proposed by leasing companies prior to granting the leasing company a permit to participate in the MSU solar leasing program.

• (3) Monitor and review all transactions and contractual relationships between permittees and consumers to ensure compliance with program requirements and other applicable federal, state, or local laws.

• (4) Prepare, in cooperation with appropriate departments and other public agencies, manufacturing, operating, maintenance, and aesthetic standards for all solar equipment to be utilized under the leasing program.

• (5) Assess in cooperation with the finance department the feasibility of developing billing procedures to be utilized in invoicing solar lessees, collecting monthly lease payments, and disbursing said payments to the relevant permittees. Such procedures may include utilization of the city's computer system or such other system as may be determined to be cost-effective. The energy office will establish a reasonable fee to be charged to recover all costs of said billing system, and establish regulations for the operation of said billing system.

  • (6) Prepare any other procedures, rules, regulations, and fee schedules deemed reasonably necessary to facilitate the implementation and on-going operation of the leasing program.

• (Ord. 1168 § 2, 1982)

• (a) No person may take or use the primary residence of a lessee as security for any lease payment or other indebtedness incurred through the lease arrangement.

• (b) The energy office shall develop bonding requirements for leasing companies, installers, and management companies participating in the MSU solar leasing program. Required bonds must be posted with the city prior to a permit being granted for participation in the program. All bonds shall be permittee bonds secured for an initial term of at least one year.

• (c) Permittee bonds shall guarantee full performance of the permittee's responsibilities as a participant in the program. Permittee bonds shall be held by the city and shall be used to compensate lessees for loss or damage suffered as a result of the permittee's failure to perform under the conditions of the permit and according to procedures set forth herein and in any rules and regulations promulgated to implement any provisions of this chapter and Chapter 9.32.

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City of Palm Springs, CA

BUILDINGS AND CONSTRUCTION

§ 8.32.040

§ 8.32.060

• (d) All solar energy devices installed under the MSU solar leasing program must receive required building permits. Special fees may be established, if necessary, for solar energy devices based on type and size to defray the special inspection costs they entail.

• (e) The city may establish an arbitration board to hear and resolve any controversy or claim arising out of or relating to the lease arrangement or installation of solar energy systems leased under the MSU solar leasing program. If said arbitration board is established, all permittees and lessees must agree to use the arbitration board to resolve disputes, claims, or controversies. The arbitration board's award shall be final and binding on all parties, except as provided by state law, and judgment upon the award may be entered in any court having jurisdiction thereof.

• (Ord. 1168 § 2, 1982)

If any provision of this chapter and Chapter 8.30 or their application to any person or circumstances is held invalid, the invalidity does not affect other provisions or application of this chapter and Chapter 8.30 which can be given effect without the invalid provision or application, and to this end the provisions of this chapter and Chapter 8.30 are severable. (Ord. 1168 § 2, 1982)

• (a) Any violation of this chapter and Chapter 8.30 may be enforced by the city in any manner provided by law, including injunctive relief.

• (b) Except as otherwise noted herein, nothing in this chapter and Chapter 8.30 shall be construed to prohibit any person from pursuing other remedies in law or equity.

• (Ord. 1168 § 2, 1982)

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City of Palm Springs, CA

BUILDINGS AND CONSTRUCTION

§ 8.40.005

§ 8.40.010