The Arkansas Legislature has a self-imposed deadline of today to finish business. One of the most promising pieces of proposed sustainalegislation, SB 516, is in serious jeopardy. SB 516 would enable – not require – counties to establish Property Assessed Clean Energy Districts. These districts would be a significant tool for local economies to use to encourage investment in sustainable homes and practices.
Yesterday, SB 516 received a “do not pass” vote from the Legislature. It appears that the vote was driven by the misperception that the SB 516 would require the establishment of PACE Districts, and would have a negative impact on the state’s finances. Neither view is accurate. SB 516 is merely enabling legislation, and it is revenue neutral.
Below are some talking points on SB 516.
1. SB516 is only enabling legislation. It simply gives permission but does NOT create districts.
2. PACE = Property Assessed Clean Energy Bonds.
3. PACE = Economic Development and job creation in the hard hit construction industry. It creates new job opportunity STATEWIDE.
4. PACE enabling legislation has been adopted in 25+ States and has existed since 2007. It has a successful track record across the country and within the region.
5. SB516 is the result of a year long study of the Legislative Task Force on Sustainable Buildings and included countless hours of testimony from experts within and outside of Arkansas and include numerous reports and evaluations from other programs. This bill is the only recommendation from the 2009-10 Task Force and is based on extensive study and discussion. Members of this Task Force include Legislators, Industry Professionals, and State Agency representation.
6. PACE is VOLUNTARY for the State, County, municipality and the homeowner. Any City, County, or homeowner that chooses not to participate in PACE will NOT be affected by PACE legislation. It is an Opt-In and not an opt-out program.
7. PACE is NOT a tax.
8. Property owners voluntarily borrow money for investments in energy conservation improvements or to install clean renewable energy options to power property.
9. PACE is a LOAN and is repaid over time as an additional amount collected with the property tax of the applicant who chooses to participate. PACE is voluntary
10. REVENUE NEUTRAL – this will not impact the general revenue fund.
11. County Assessors simply enter a code to the county records identifying those properties that have VOLUNTARILY enrolled in the PACE loan program. It is treated similarly to several existing programs that require simple coding in the office.
12. NO additional property assessment is required by the County Assessor. Value is determined by the amount of the LOAN the applicant qualifies for and receives NOT by additional time spent by Assessor analyzing the property.
13. PACE is funded by private capital.
14. PACE provides consumer choice in the marketplace and is an alternative to traditional lending mechanisms and should be at a lower cost (interest rate). Especially beneficial to low to moderate-income property owners. Those who choose other options may do so and neither effect the PACE program or be limited to utilizing different options of their choosing.
15. The benefits to homeowners. 3 things – access to 100% financing, repayment terms, and transferability.
16. February 2011 report by independent Pike Research indicates over 42% of the respondents want this type of option to be available and would choose to participate if available. (http://www.pikeresearch.com/newsroom/42-of-homeowners-would-be-interested-in-a-residential-clean-energy-financing-program) the 58% of homeowners that may choose not to utilize PACE financing would NOT be affected by its availability to others.
17. PACE districts administered by local boards.
18. PACE is Supported by National Association of Regulatory Utility Commissioners (including AR PSC Chair); National League of Cities and National Association of Counties (http://pacenow.org).
19. SB516 is supported by AR Municipal League and has not opposed by the Association of AR Counties, AR Assessors Association, AR Bankers Association or Mortgage Bankers of AR Association.
Proponents of SB 516 are organizing a last ditch attempt to save bill, and hopefully it’s not too late to save this significant piece of proposed law. Give your representative a call, text, email, or smoke signal.
In the meanwhile, I’ll continue tracking progress. Stay tuned.