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Committee considers PACE reforms: residential PACE phased out, commercial PACE extended to 30 years (House Bill 1155)
Summary
House Bill 1155 would eliminate residential PACE contracts statewide, extend commercial PACE assessment terms to up to 30 years (where product useful life justifies it), and allow PACE providers to use out‑of‑state contracts for credit enhancement.
Representative Owen presented House Bill 1155 proposing a three‑part revision to PACE (Property Assessed Clean Energy) law: eliminate residential PACE contracts after Aug. 20, extend the maximum assessment period for commercial PACE from 20 to 30 years (subject to weighted useful life limits), and allow PACE providers to use contracts from other states as credit enhancement or collateral.
Owen recounted the state’s prior experience with residential PACE and said abuses by non‑lender installers prompted strict residential safeguards in recent legislation that effectively ended residential PACE activity in Missouri. “We put dramatic clamps on residential PACE operation to the point where really there is nobody really operating residential PACE in the State of Missouri at this time,” he said. The bill would remove residential PACE entirely and refine commercial tools.
Supporters from statewide PACE organizations and the Missouri Bankers Association described the commercial program as a private financing tool that leverages private capital to improve building efficiency without using public dollars. Josh Campbell of the Missouri Energy Initiative said statewide PACE districts have financed numerous projects (the districts he administers report more than 65 projects and about $350 million in PACE financing, leveraging over $1.5 billion in construction financing). The Missouri Bankers Association said it supported repeal of residential PACE and had not objected to the commercial changes.
Questions from members focused on lender protections and long‑term risks. Representative Matheson and others asked who bears the risk if a commercial borrower goes under mid‑term and whether subsequent owners inherit PACE obligations. Supporters said PACE obligations attach to the property and lenders typically consent at the time of financing; districts generally seek senior lender consent in practice. Witnesses said commercial PACE projects have low foreclosure incidence nationally and that the 30‑year option is tied to the useful life of the installed measures.
Why it matters: The bill would end residential PACE in Missouri and expand commercial PACE flexibility for energy and building‑efficiency upgrades. Supporters argued the change protects consumers while enabling private financing for larger commercial improvements; critics or cautious members raised concerns about long amortization and the effect on lenders and future property owners.
The committee heard testimony from lenders, PACE administrators and industry groups; no final committee action appears in the transcript excerpt.
