The Missouri General Assembly passed the PACE (Property Assessed
Clean Energy) bill that would allow municipalities to opt into a
program that finances the costs of renewable energy and energy
efficiency renovations for homes and businesses. Missouri
organizations including energy-efficiency professionals,
environmental advocates, community bankers and realtors garnered
support for PACE, which was passed in the final hours of the
legislative session.
The PACE program enables local governments and community
improvement districts to finance energy efficiency and renewable
energy projects through the issuance of bonds or by structuring
other sources of capital. Municipalities are familiar with these
types of special taxing districts in the form of neighborhood
improvement districts.
Armstrong Teasdale has worked extensively with municipal financing
districts (also known as "special tax" or "special
assessment" districts) since their inception.
Energy professionals applauded the passage of PACE. When signed
into law by Governor Jay Nixon, PACE promises to improve and
upgrade a significant percentage of Missouri's homes and
commercial properties at little or no cost to the state or local
municipalities, create thousands of local jobs, and save money for
homeowners by lowing their utility bills and make our state and
nation more energy independent. Projects that could be financed
under PACE could range from large solar power systems to utility
lines to biomass facilities to weatherization of homes.
The St Louis Regional Chamber & Growth Association (RCGA)
reported that this measure represents an important component of the
"green savings" aspect of its Climate Prosperity Project,
which is designed to move the St. Louis region toward a greenbelt
economy by pursuing green savings, green opportunities and green
talent. The potential of "green economy jobs" was
illustrated in the just-completed independent analysis of the
bi-state region. It documented 9,000 current core green economy
jobs growing in recent years at 54 percent, with 1,000 such jobs
being added in the past two years.
The PACE financing structure combined with potential federal and
state tax incentives and utility rebates can make renewable energy
and energy efficiency renovations affordable and cost effective for
individuals and businesses. Although the PACE fund advances the
project costs, participating property owners (programs would be
voluntary) repay these amounts through a special property tax
assessment, typically over a term of 20 years. If the property is
sold before the end of the repayment period, the new owner inherits
both the remaining repayment obligation and the financed energy
improvements. The reliable stream of assessment payments can
support bond issuances, enabling projects that are larger than
municipalities might otherwise be able to support.
Armstrong Teasdale's Future Energy Group stands ready to provide advice and guidance to:
- Municipalities and community improvement districts that are interested in forming PACE Boards and implementing the PACE legislation, alone or in collaboration with other municipalities.
- Renewable energy generators interested in installing solar, wind, bio-fuel, geothermal or other energy projects
- Companies interested in learning about federal tax incentives that may be available for energy projects.
- Underwriters who will be partnering with municipalities and community improvement districts in the issuance of PACE bonds.
- Real estate developers who are developing or renovating "green" properties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
