TX legislation addresses PACE financing for water conservation
New legislation would allow building owners in Texas to secure private sector financing for water conservation and energy-efficiency improvements through low-cost, long-term loans repaid with voluntary property assessments.
Texas Senator John Carona has introduced SB 385, the Property Assessed Clean Energy Act, as an update to a 2009 Texas statute to address water conservation and authorize municipalities and counties to use property assessments as an economic development tool.
Upfront costs and capital required for these types of projects often present barriers to property owners.
The financing program, known as Property Assessed Clean Energy (PACE), creates a secure repayment mechanism so that private sector lenders can extend credit for water and energy efficiency improvements at reasonable rates. The PACE financing process begins when a property owner identifies a qualifying improvement to an existing building. The assessments are initiated by the property owners and imposed by local taxing authorities, similar to "tax-lien financing." Once the owner obtains an independent analysis confirming that an upgrade will achieve projected savings, it can secure financing.
"The upfront costs and capital required for projects of this type are often economic barriers to property owners," says Sen. Carona. "PACE loans will remove these barriers and enable owners to upgrade and enhance the value of existing structures, save substantial amounts in water and energy costs, and create thousands of jobs in implementing these improvements."
"PACE will help Texans meet the conservation goals in our State Water Plan and reduce demand on our electric grid," Senator Carona said. "These savings will benefit the building owners directly and help keep the Texas economic engine primed for growth and prepared for the continuing influx of people moving to Texas to share in our prosperity."
To date, 27 other states and the District of Columbia have adopted PACE-enabling legislation, with many commercial and industrial PACE programs underway.
- read the bill