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Texas Senate passes bill to update PACE loan program

by Carrie Buchholz | May 15, 2019

Property Assessed Clean Energy (PACE) is a financing program that enables owners of commercial and industrial properties in Texas to obtain low-cost, long-term loans for water conservation, energy-efficiency improvements, and distributed generation retrofits. The PACE statute, Chapter 399 of the Texas Local Government Code, authorizes municipalities and counties in Texas to work with private-sector lenders and property owners to finance qualified improvements.

SB 1281 by Sen. Brian Birdwell (R-Granbury) proposes to administer the various local PACE programs as one statewide program governed by best practices and to invite local governments to opt in, if they so choose.

The bill establishes oversight of the program by the State Energy Conservation Office (SECO) in the Office of the Comptroller of Public Accounts of the State of Texas using its existing authority. The bill amends the PACE Act to rely on SECO to issue an RFP selecting a third party to administer the program to create the most efficient, cost-effective way to bring the Texas-sized PACE Economic Development program to all of Texas. Oversight of this financing program by SECO in the future will serve to ensure that the third-party administrator is acting only as a government representative and does not engage in any market activity that it oversees.

The bill eliminates the burdens of establishing and administering local programs and is intended to expedite the availability of the PACE program in all parts of Texas, so that rural and urban businesses can take advantage of PACE to address deferred maintenance with energy and water-saving improvements. Uniform underwriting and technical standards across the state will result in uniform training, review of projects, and quality control and application by keeping quality program protections in place.

Passed by the Texas Senate on a 26-5 vote, SB 1281 was referred to the House Energy Resources Committee.

Contact Jeff Huffman, Texas Credit Union Association, at 469-385-6488 or for more information.