HI LEG must embrace PACE

SUBHEAD: PACE HB 2643 needs your help on Monday. We can make the difference!

By Brad Parsons on 18 April 2010 in Aloha Analytics -

Image above: Bobby Bunda & Calvin Say (center) about to get paddled by Barack Obama if don't support PACE. From (http://www.hawaiiforobama.org/img/obama-imua-bunda.html)  

Call Speaker Calvin Say's office at 1 (808) 586-6100. Call him Monday.  

A bank in Hawaii worried about the effect on the lending process, has recently mounted a stealth campaign against HB 2643 (the PACE bill) for Property Assessed Clean Energy bond financing. This is not a problem for the mortgage lending industry in California where PACE has been enacted in a number of local municipalities. The bank's concerns have been addressed in private meetings between the bank, DBEDT, a Senator, and public interest reps. 

 But, as of Friday, the bill's sponsors did not appear to be willing to go to the mat for this bill. This bill has come a long way, too far to let it just die over who gets credit for a great policy initiative. Speaker Say needs to hear from people that Hawaii wants Property Assessed Clean Energy Bond Financing Now! and to convene Conference Committee on this bill. The Senate Conferees have already been appointed and are waiting. The bill will die if Say does not appoint House Conferees on Monday. Spread the word. Be polite but assertive.  

A Review of What PACE Should Be...Set Aside Your Fears 
 It has come to our attention that one bank is putting a stranglehold on PACE in the Hawaii Legislature. That same bank's parent company actually deals effectively with PACE liens in California. So that prospective policy makers here in Hawaii can have reliable information, we repost the following links to information from the U.S. DOE on PACE, which is working with banks in at least 16 other jurisdictions. 

It's time for Hawaii Legislators to set aside plantation era fears, join the 21st Century and enact PACE enabling legislation this year. We don't have time to waste, Legislators.

Past DOE PACE Webcast Presentations 
Below are presentations from previous Webcasts. The presentations are available as Adobe Acrobat PDFs. Download Adobe Reader. The audio files are available as MP3 files. Download Windows Media Player.
Webcast Date Presentation Audio Transcript
Creating Liquidity for Energy Efficiency Loans in Secondary Markets 01/22/10 (PDF 359 KB) (PDF 279 KB) (MP3 64.4 MB) (Text)
Legal Issues Regarding PACE Financing Programs 12/15/09 (PDF 265 KB) (MP3 62.3 MB) (Text)
Getting Started: Legal Authority & Administering PACE Financing Programs 12/11/09 (PDF 1.81 MB) (MP3 68.6 MB) (Text)
Revolving Loan Funds Webcast 12/10/09 (PDF 1.25 MB) (MP3 62.3 MB) (Text)
Introduction to Property-Assessed Clean Energy (PACE) Financing Programs 11/18/09 (PDF 16 MB) (Q&A PDF 63 KB) (MP3 70.4 MB) (Text)
Property  Assessed  Clean Energy PACE Bonds:     Innovative Funding  to Accelerate  the Retrofitting of America's Buildings  for Energy  Independence
A PACE bond is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems) and who then repay their loans over 20 years via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts or finance companies and the proceeds can be typically used to retrofit both commercial and residential properties. The PACE bond market, in combination with federal loan guarantees, has the potential to dramatically accelerate the energy retrofitting of America's building stock due to the below advantages. It is estimated that the potential for PACE bonds could exceed $500 billion. PACE Impact: Property tax lien oriented financing that dramatically improves the economics of energy retrofits (efficiency measures and micro renewable energy) To see who supports PACE please click on our PACE Legislation Endorser List.
Advantages of    PACE Finance
Our Nation:
  • Significant job creation
  • Accelerates movement toward energy independence & reduces GHG emissions
  • Very low fiscal cost & high probability of success
Property Owner:
  • Lower energy bills and substantially reduced upfront costs for energy retrofits
  • Improved return on investment/positive cash flow on retrofits (annual savings > cost)
States, Cities & Municipalities:
  • Immediate job creation
  • No credit or general obligation risk
  • Obligation is liability of real estate owner
  • Greenhouse gas reductions/energy independence
  • Opt in: Only those real estate owners who opt in pay for it
Existing Mortgage Lenders:
  • Borrowers cash flow/credit profile improves (energy savings > annual tax cost)
  • Property/collateral value increases
  • 97% of property taxes are current & losses are less than 1%
1. History: The ability for our nation to finance energy retrofits with PACE bonds emerged in 2008 with the passage of enabling legislation in California. In recognition of the large benefits of PACE finance, the following states have recently passed enabling legislation: Colorado, Illinois, Louisiana, Maryland, Nevada, New Mexico, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and Wisconsin, and legislation is pending in Arizona and New York. Florida and Hawaii have existing ability to launch PACE programs. The first PACE bond was issued by Berkeley, CA in January, 2009. 

 2. Introduction to PACE finance: 
A. Slide Introduction to PACE - Washington D.C. Presentation (10-6-09) 
B. 2009 Milken Institute PACE Finance Panel (Audio) (4-29-09) 
C. Details of PACE Programs 
D. PACE Market Sizing (Commercial) - Johnson Controls Estimate 
E. PACE Explained in Simple Terms  

3. PACE State Legislation Battle Toolkit 
A. PACE Concerns & White House Solutions 
B. PACE Programs: Historical Precedent, Seniority and Benefits to Existing Lenders 
C. PACE Lien Seniority in Foreclosure is Immaterial 
D. Existing State Legislation (See 14 below) 
E. Template for PACE Letter to State Legislator 
F. PACE Letter Template to Legislator Which Addresses Lender/Consumer Concerns 
G. Template for State Legislation Coalition Petition 
H. The 10 Must Haves for PACE State Enabling Legislation 
I. Barclays Capital Memo – PACE Seniority is Mandatory  

4. PACE in the News 
A. Harvard Business Review - Energy Alternatives: A Market Solution for Achieving "Green" by Jack Hidary (Jan/Feb 2010) B. Scientific American - World Changing Ideas: 20 Ways to Build a Cleaner, Healthier, Smarter World (11/03/09) 
C. New York State Passes PACE Finance Enabling Legislation (11-17-09) 
D. Vice President Biden/Secretary Chu/Secretary Donovan’s PACE Announcement at “Recovery Through Retrofit” Conference (10-19-09) · YouTube Link to Announcement Highlights · C-SPAN Link to Full Announcement 
E. "Recovery Through Retrofit” Report (Released 10-19-09) · Policy Framework for PACE Programs (10-18-09) · White House DOE Grants  
F. Senator PACE Letter to President Obama (11-10-09) 
G. President Clinton's Clinton Global Initiative Announcement · YouTube Link to CGI Announcement 
H. Governor Schwarzenegger’s Announcement (9-24-09) 
I. Mayor Jerry Sanders (R), San Diego (9-24-09) 
J. Board of Boulder County Commissioners (9-24-09) 
K. America’s First Major PACE Commercial Project: Santa Rosa Plaza Mall Installs “Cool Roof”  
L. Congressman Israel PACE Op-Ed (10-19-09)  

5. PACENOW Working Group Meetings: 
A. Consortium Letter to Congress (6-16-09) 
B. PACE Language in Waxman Markey Bill – H.R. 2454: American Clean Energy Security Act of 2009 
C. PACE Washington D.C. Meeting (5-28-09) · Washington D.C. Program Agenda (5-28-09) · Washington D.C. Participant List (5-28-09) 
D. PACE Commercial Real Estate Meeting (12-10-09) · New York CRE Meeting Agenda (12-10-09) · New York CRE Meeting Transcript (12-10-09) 

  6. Municipal Administration of PACE Bond Program: 
A. Simple Steps: How to Implement a PACE Program 
 B. PACE Local Government Guide (9-2009)  

7. PACE Federal Correspondence with Federal Housing Finance Authority ("FHFA") 
A. FHFA Letter Expressing Concerns with PACE (6-18-09) 
B. PACE Program Information: Response to Regulatory Agency Questions 
C. Governor Richardson’s FHFA Pro PACE Response to President Obama (10-13-09) 
D. CA Attorney General FHFA Response (10-12-09) · FHFA Response Letter (10-29-09) 
E. Board of County Commissioners FHFA Pro PACE Response to President Obama (10-13-09) 
F. Barclays Capital Opinion on Need for PACE Seniority (9-14-09) 
 G. Pro PACE Senator Response Letter (8-3-09) H. Pro PACE Mayor/Municipality Response Letter (7-30-09) I. Fannie Mae PACE Guidelines (9-18-09)  

8. Potential Federal Government/Department of Energy Scaling of Nationwide PACE Program: 
A. EPA Finance Advisory Board Recommends PACE Programs/Presidential Task Force (6-15-09)  
B. PACE Distribution Model 
C. Sample DOE PACE Guarantee "Reservation" Form 
D. Two Different Bond Financing Routes 
E. PACE Bond Tax-exemption Cost/Benefit Analysis  

9. Additional PACE Support Letters: 
A. AIA (10-15-09) 
B. LIUNA (10-29-09)  

10. PACE Financing: A. Boulder County PACE Bond Prospectus (5-20-09) B. Barclays Capital PACE Capital Markets Memo (5-15-09)  

11. PACE and Existing Mortgage Lender: Legal Analyses A. PACE Programs: Historical Precedent, Seniority and Benefits to Existing Lenders 
B. PACE Bloomberg Law Article (Jan 2010) 
C. Jones Hall Memo: Consent Legal Analysis (5-14-09) 
D. Commercial Mortgages: Legal Consent Issues & Solutions (5-2009)  

12. Property Tax Credit History - California & Washington: 
A. 2006-2007 (CA) 
B. 2007-2008 (CA) 
C. 2008 Property Tax Statistics (WA)  

13. Federal PACE Related Legislation: 
A. Waxman Markey (HR 2454) Dingell Amendment 
B. PACE Bond Tax-exempt Status Bill - Rep. Thompson 
C. Israel (HR 3836)  

14. PACE Programs by State: 
A. Current Clean Energy Municipal Financing Bills – State by State · Database of State Incentives for Renewables & Efficiency · PACE Legislation Table (2-10-10)  
B. California: PACE State Enabling Legislation (AB 811); (AB 474); (SB 279) · City of Berkeley PACE Program · City of San Francisco "GreenFinanceSF": "GreenFinanceSF Project List" · City of Yucaipa's Energy Independence Program · Palm Desert PACE Program · San Diego County PACE Program · Sonoma County PACE Program · Western Riverside County - Energy Efficiency and Water Conservation Program C. Colorado: PACE State Enabling Legislation (HB 08-1350) · Boulder County PACE Program 
D. Illinois: PACE State Enabling Legislation (SB 583)  
E. Louisiana: PACE State Enabling Legislation (SB 224) 
F. Maryland: PACE State Enabling Legislation (HB 1567) · Annapolis PACE Program · Montgomery County PACE Program 
G. Nevada: PACE State Enabling Legislation (SB 358) 
H. New Mexico: PACE State Enabling Legislation (HB 572) I. New York: PACE State Enabling Legislation · NYS PACE LAW (S66004) · Town of Babylon: Long Island Green Homes · Bedford, NY: PACE State Legislative Exemption Specific to Town of Bedford · City of Binghamton PACE Program (5867-A); (A08890) J. North Carolina (Note: Law needs to be ammended as it requires revolving loan) (HB 1389) 
K. Ohio: (HB 1) L. Oklahoma: (SB 668) 
M. Oregon: PACE State Enabling Legislation (HB 2181); (HB 2626)  
N. Texas: PACE State Enabling Legislation (HB 1391); (HB 1937)  
O. Vermont: PACE State Enabling Legislation (H 446) 
P. Virginia: PACE State Enabling Legislation (SB 1212) 
Q. Wisconsin: AB 255  
In Process: R. Arizona: PACE State Enabling Legislation (HB 2335) S. Connecticut: (Raised Bill 5465 - Section 5) T. Florida: Proposed PACE State Enabling Legislation (Precourt/Hasner Press Release) U. New York: (A 7611); (A 2672)  

15. Articles/Studies on the Value of Energy Retrofits A. Appraisal Journal. Evidence of Rational Market Valuations for Home Energy Efficiency (1998) B. Assessing the Market Impacts of Third Party Certification on Residential Properties (5-29-09) C. Doing Well by Doing Good? Green Office Buildings (8-12-09) 

 16. Related Articles/Links: A. University of California, Berkeley PACE Website B. Article on San Diego, Palm Desert, etc (1-26-09) C. Environment Magazine PACE Finance Article (Jan/Feb 2009) D. Homeowner Presentation E. Historical State by State Analysis of Housing Units By Structure F. Commercial/residential Real Estate Default History For more information, please email us at info@PACENOW.org


Unknown said...

brad, can the county move on this? what's to stop our local officials from enacting this type of assessment? with a little encouragement from our utility maybe so; whatcha think?

Mauibrad said...

Yes, the County can move on this. I spoke with Ted Peck this morning. The only drawback might be economies of scale, meaning enough people taking part in the program to make the bond issuance worthwhile. But, I actually think many more homeowners will take part in this than we expect and so the economies of scale should be there. I clarified with Ted, that there does not need to be any further state enabling legislation. The Counties can go ahead and do this.

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