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Committee hears testimony on S138 to authorize commercial PACE financing amid lender and municipal questions
Summary
The House Energy and Digital Infrastructure committee heard testimony on S138, which would let Vermont municipalities authorize commercial PACE (CPACE) loans that attach repayment to property tax assessments. Bankers pressed for consent/lien language to protect existing lenders; municipal and business groups generally supported the bill while flagging administration and wording tweaks.
The House Energy and Digital Infrastructure committee heard testimony April 1 on S138, a bill that would let Vermont municipalities authorize commercial property-assessed clean energy (CPACE) financing for energy-efficiency, renewable energy and resiliency projects.
Chris Dia, president of the Vermont Bankers Association, told the committee that CPACE uses "the property tax collection system" as the repayment mechanism and warned that lenders view PACE assessments as a lien that can have priority over commercial mortgages. Dia said the bill’s consent language — which requires mortgage holders to consent to a PACE assessment — is essential to maintain commercial lending in affected districts. "Without this language... they would never do a commercial loan in that district," he said.
Why it matters: CPACE can lower upfront costs for large, long-lived investments by letting financing run with the property, but it changes…
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