Property-Assessed Clean Energy (PACE) financing effectively allows property owners to borrow money to pay for energy improvements. The amount borrowed is typically repaid via property taxes, with a special assessment on the property over a period of years. Arkansas authorized PACE financing in 2013 with Senate Bill 640. Specifically, the state, cities, counties, and combinations of cities and counties may create a property assessed energy improvement district by adopting an ordinance and entering into a joint agreement with any other participating governmental bodies. Governmental bodies may also opt into existing districts by adopting an ordinance and entering into a joint agreement with any other participating governmental bodies.
The law requires property assessed energy improvement districts to be operated and controlled by a board of directors, and includes guidance for assembling the board. The law provides additional guidance in some aspects, but leaves a lot of authority with the property assessed energy improvement districts to design their own programs.