What is PACE?
A Property Assessed Clean Energy (PACE) program is a mechanism to provide upfront financing to residential, commercial and industrial property owners for water conservation and energy efficiency improvements through voluntary contractual assessments that are permanently fixed to the property, not the property owner. Property owners that wish to participate agree to repay the amount borrowed (plus interest) through the voluntary contractual assessment collected through property tax.
PACE Program Structure
A Joint Powers Authority (JPA) develops a program for PACE financing and selects an entity to be the administrator of that program. If a City is a member of the JPA already, it must pass a resolution authorizing the PACE program to take place in the City. If it is not a member of the JPA, it must pass a resolution joining the JPA and authorizing the program to take place in the City.
AB 811 (Levine, 2008) established PACE programs in California by expanding existing assessment district law. This legislation authorized cities and counties to establish voluntary contractual assessment programs for the purpose of financing private property improvements that promote water conservation, renewable energy generation, energy efficiency, electric vehicle charging infrastructure and seismic strengthening.
SB 555 (Hancock, 2011) amended the Mello-Roos Community Facilities Act to allow for the creation of Community Facilities Districts (CFD) for the purpose of financing or refinancing the acquisition, installation, and improvement of water conservation, energy efficiency, renewable energy and electric vehicle charging infrastructure improvements permanently affixed to private or publicly-owned real property. In 2016, the Act was amended to allow the financing or refinancing of seismic improvements.
Residents are encouraged to read and carefully evaluate all terms of any kind of PACE financing and also research any contractor you are considering for improvements. PACE financing can have an impact on the ability to sell or refinance your home because of its assessment status. In order to provide protection for customers, the California State legislature passed Assembly Bill 2693 (PACE Preservation and Consumer Protections Act) on September 25, 2016. The passage of this act promotes standardized disclosures and protections for consumers to ensure that customers understand their rights under the Property Assessed Clean Energy program.
Tustin PACE Program Consumer Protection Policies