JEFFERSON CITY, Mo. — The Missouri Senate approved changes to the state’s Property Assessment Clean Energy (PACE) Act program after hours of debate Tuesday.
HB 697 would require municipalities taking action with a clean energy development board to notify the Division of Finance of the change, and the division would be required to conduct examinations of a board every two years under the bill. The head of the division would be able to arrange hearings on boards in violation of PACE, leading to civil penalties or forfeiture.
The bill would also make changes to the program’s residential contracts. The Clean Energy Development Board would be required to work with property owners by disclosing project information and keeping them up-to-date on developments and informing them in writing that delinquent assessments would be a lien on their property.
Bill handler Sen. Sandy Crawford said the changes included in the bill would benefit Missouri consumers.
“I believe these improvements to the PACE statutes are common sense, they are recommended by the Division of Finance, and I believe these will allow the citizens of Missouri to have some consumer protections,” Crawford said. “There have been some issues with this program in different communities and some that have withdrawn their participation in the program.”
Sens. Jill Schupp and Karla May opposed the measure, pointing to banks competing with the program as the main backers of the bill.
“I know that this is a program that has received some negative attention recently, but it’s also a program that has helped people put into place much-needed improvements when they were having difficulty getting loans from other places,” Schupp said. “The strongest proponents of this legislation could undermine PACE loans, and they are in direct competition.”
After more than four hours on the floor, a compromise amendment from May removed provisions requiring banks to give consent for loans and another mandating insurance for PACE financing unless available.
“We wanted to ensure a fair market, so we took out the portion on consent,” May said. “We also wanted to make sure these are insured but there currently is no insurance for this type of loan, so we said if the companies come up with a product to do so they have to get that insurance.
The bill then passed the body 31-1, with Sen. Mike Moon voting in opposition.
Other provisions included in the bill would prohibit companies contracting with the PACE program from advertising their contracts unless they and would require landowners to give confirmation that at least one property owner has received a disclosure form as part of the program.
The bill passed the House in March by a vote of 103-48; more than half a dozen witnesses testified in support of the legislation in committee.
Another bill initially paired with HB 697 would require an appraisal for PACE-related improvements and add that the sum of liens and mortgages on the property added to the proposed amount of financing from the Clean Energy Development Board cannot exceed 90 percent of the appraised property value plus the value added by the project; the piece has yet to see floor action in the lower chamber, but parts were included in the final substitute.