If the current trend holds, the primary contribution of the 88th General Assembly of the Arkansas Legislature to the sustainasphere will be summed up in two words: improvement district. We already have HB 1118, which would establish the “Arkansas Central Business Improvement and Development Investment Tax Credit Act,” and the newly amended HB 1027, which would establish the “Property Assessed Energy-Efficient Home Improvement District Act.”
Last week saw an important addition to this slate of sustainalaws: SB 516, which would establish the “Property Assessed Clean Energy Act” (which folds up into the convenient acronym PACE). PACE is the product of years of behind the scenes work by the dedicated denizens of the Arkansas sustainasphere.
SB 516 is a piece of enabling legislation: if passed, it would enable counties to create “property assessed energy improvement districts.” These districts, in turn, are tasked with establishing “a property assessed clean energy program” to provide financing for energy efficiency improvements and clean renewable energy projects. The loans would run with the improved property, and would be secured by a lien against the property. The districts would be bond-financed, and the bonds would be tax-free and fully transferable on the open market.
Unlike HB 1027, which is limited to residential projects, SB 516 grants energy improvement districts the discretion to provide PACE financing to the full range of projects, whether residential, commercial, industrial, or mixed use.
Another advantage of SB 516 is that it provides for districts comprised of several counties. Given the number of small, rural, sparsely populated counties in Arkansas, this is significant. These are the very places most in need of sustainable innovation and development, and, if PACE becomes law, these counties will be able to band together and issue bonds that are fiscally sound and financially attractive to investors.
Indeed, if used to their fullest potential, PACE districts will add a powerful arrow to the quiver that Arkansas counties have for attracting business investment, particularly when it comes to attracting international venture capitalists looking to invest in renewable energy and resource projects.
SB 516 is headed for the Senate Committee on Insurance & Commerce, where it is on the regular agenda for the March 1, 2011, meeting.