All Roll Calls
Yes: 120 • No: 2
ArkansasSB4482025 Regular SessionSenateWALLET
TO AUTHORIZE THE FINANCING OF ENERGY EFFICIENCY IMPROVEMENTS, ALTERNATIVE ENERGY IMPROVEMENTS, BUILDING RESILIENCY IMPROVEMENTS, AND WATER CONSERVATION IMPROVEMENTS.
Sponsored By: Jim Petty (Republican), Robin Lundstrum (Republican)
Enacted
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Bill Overview
Analyzed Economic Effects
8 provisions identified: 1 benefits, 3 costs, 4 mixed.
Investors get state-tax-free building financing bonds
Arkansas exempts bonds issued under the PACE law from state taxation. The exemption covers bond income and profits from selling or transferring the bonds. It does not establish a federal tax exemption.
Legal claims against financing officials limited
PACE districts, government entities, and their personnel generally have immunity from tort lawsuits over duties under this law. Tort claims seek remedies for harm caused by wrongful conduct. Immunity does not apply when expressly waived in writing or when the district or government entity acts with gross negligence.
Property financing carries an optional fee
A government entity or PACE administrator can charge a one-time administration fee for an approved application. The fee cannot exceed the smaller of 1% of the principal financed or $50,000. Charging the fee is optional, not required.
Building financing liens follow the property
The law replaces former PACE loan-lien and combined-billing rules with special-assessment rules securing the full financing amount. The recorded lien outranks mortgages and other liens, except general property-tax liens and district liens equal to property taxes. Remaining payments stay with the property after sale or foreclosure; default does not make the full balance immediately due. Overdue payments can bring interest, penalties, and foreclosure; the financing provider can foreclose if the government fails or refuses. Assessments generally appear on property-tax bills unless private collection is authorized; counties must track receipts separately, remit promptly, and discharge fully paid liens.
Property financing requires lender approval
PACE applicants must certify ownership, program compliance, and no overdue taxes or assessments. Before signing, every mortgage holder must give acknowledged written consent confirming the assessment is not a mortgage default; consent is discretionary. Average debt-service coverage over the financing term must reach 1.20:1: net operating income divided by debt payments plus PACE assessments. Mortgages plus assessments must meet federal supervisory loan-to-value limits in 12 C.F.R. Part 34, Subpart D, as of January 1, 2025. Program rules require qualified, certified contractors and completed-work certification; repayment terms cannot exceed the longest-lived improvement’s average useful life.
Property districts face year-end filing deadline
PACE district boards must file next year’s assessment list with the county clerk by December 31. The list must identify assessed parcels and include the district assessor’s contact information. It must exclude assessments on parcels otherwise absent from next year’s tax books. Boards must send copies to the tax-book preparer and, when applicable, the county collector. County collectors can reject late filings.
Building financing excludes public tax backing
PACE districts can issue bonds, obtain other lawful financing, and create reserve funds using legally available nonstate money. Districts or nonprofits working with them can maintain revolving funds using permitted bond proceeds, contributions, and financing proceeds. Banks must hold revolving funds in trust, separate from other money. PACE notes and bonds are payable only from assessments on improved properties. State and local governments cannot use public tax revenue or pledge their taxing powers or general credit to support these obligations.
Property owners gain building improvement financing
Arkansas lets local governments create voluntary PACE programs by ordinance to finance or refinance building improvements. Eligible private properties include commercial, industrial, agricultural, nonprofit, mixed-use, and multifamily buildings with at least five homes. The law also includes property owned by a 501(c) entity as of January 1, 2025. Improvements must be permanently attached and cover energy efficiency, alternative energy, building resilience, or water conservation during construction or renovation. Owners repay through property assessments, and the government assigns payment rights to the financing provider.
Sponsors & Cosponsors
Sponsors
Jim Petty
Republican • Senate
Robin Lundstrum
Republican • House
Cosponsors
Greg Leding
Democratic • Senate
Roll Call Votes
House vote • 4/7/2025
House Vote - Monday, April 7, 2025 8:50:49 PM
Yes: 95 • No: 1
Senate vote • 4/1/2025
Senate Vote - Tuesday, April 1, 2025 3:41:07 PM
Yes: 25 • No: 1 • Other: 2
Actions Timeline
Notification that SB448 is now Act 579
4/14/2025SenateDELIVERED TO GOVERNOR.
4/9/2025SenateReported correctly enrolled and ordered delivered to the Governor.
4/9/2025SenateORDERED ENROLLED
4/8/2025SenateReturned from the House as passed.
4/8/2025SenateReturned to the Senate as passed.
4/8/2025HouseRead the third time and passed and ordered transmitted to the Senate.
4/7/2025HouseReturned by the Committee Do Pass
4/2/2025HouseRead the first time, rules suspended, read the second time and referred to the Committee on INSURANCE & COMMERCE- HOUSE
4/1/2025HouseRECEIVED FROM THE SENATE
4/1/2025HouseOrdered immediately transmitted to the House.
4/1/2025SenateRead the third time and passed.
4/1/2025SenateREPORTED CORRECTLY ENGROSSED
3/31/2025SenateAmendment # 1 read the first time, rules suspended, read the second time and adopted, ordered engrossed.
3/31/2025SenatePlaced on second reading for purpose of amendment.
3/31/2025SenateReturned by the Committee with the recommendation that it Do Pass as amended, Amendment # 1
3/20/2025SenateRead first time, rules suspended, read second time, referred to CITY, COUNTY & LOCAL AFFAIRS COMMITTEE - SENATE
3/12/2025SenateFiled
3/12/2025Senate
Bill Text
SB448 - Introduced
3/12/2025
Act Version
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