House Financial Institutions
2/10/2021 – 4:30 PM
Committee Hearing – HR 7
HB814 O’Donnell, Michael – Modifies which properties are eligible for the Property Assessment Clean Energy Act
Missouri House considers PACE reforms
By Cameron Gerber on February 11, 2021
JEFFERSON CITY, Mo. — Two bills meant to amend Missouri’s Property Assessment Clean Energy (PACE) Act program were considered by a House committee Wednesday evening.
Missouri’s PACE program allows both commercial and residential property owners to invest in cash-positive renewable energy improvements with no up-front costs. The funds are distributed through local bonds that are repaid after assessments on the building’s property taxes.
O’Donnell’s bill 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.
O’Donnell said his bill would prevent Missourians from borrowing more than their project was worth.
“This is sound, personally responsible financial management,” he said. “Simply put: This is a consumer protection bill.”
DeGroot’s bill 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 up to $500.
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.
“The bankers came to me and asked me to get involved with what I thought was going to be a bankers’ bill, so I looked at it and the more I learned about the PACE program the more I determined that this is a consumer protection bill,” he said. “It’s wrong to disrupt a contract between a bank and a private individual, to have a third party come in and disrupt it and then receive a priority lien — that’s fundamentally unfair.”
More than half a dozen witnesses, including Division of Finance Commissioner Rob Barrett, testified in support of the bills. David Jackson, a lobbyist representing the PACE Funding Group and the Missouri Clean Energy District, was among those in opposition.
“Just like any emerging industry, there are certain hiccups along the way,” he said. “I think there’s a big difference between what we have in statute in terms of consumer protection and some of the things proposed in these bills. I would encourage the committee to take a step back and look at what we’re trying to accomplish.”
Chair Rep. Rick Francis said the committee would go into executive session on the bills next week.