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governments may still provide some support for PACE even in this model, but this model generally indicates that the state does not take a directing role in developing PACE programs. North Carolina's current PACE legislation would probably be classified as creating a local option with little or no state support, but this should not be seen as indicating that all PACE models of that type will be unsuccessful, as evidenced by California. However, the recent trend has been towards state involvement in PACE. North Carolina's municipalities, especially in less - populated areas, generally lack the staff and resources to design and implement PACE programs themselves, so a state - supported PACE program would likely help PACE to become more widespread across the state. If state government seems unlikely to commit significant resources to developing a PACE program, a Texas -like model where the state provides or assists in the development of model PACE program rules would be a good option. Funding Options North Carolina's current PACE - enabling legislation already authorizes municipalities to issue bonds to finance PACE assessments. However, all locally- issued debt must be approved by the state government's Local Government Commission, making this process cumbersome. If this local debt restriction remains in place, it may be advisable to add state bonding authority to new PACE legislation (this would entail the state government creating a statewide PACE program, although not necessarily as the sole option). While bonding is an important issue for PACE financing, the larger issue in North Carolina is probably that state law does not explicitly allow for private sector funding of PACE. In other states such as California, local governments are allowed to create "contractual assessments," where financing for a PACE project can come through a private funder (NASEO, 2016, p. 12). North Carolina does not allow such arrangements, which limits the availability of private funding for PACE. New PACE legislation should explicitly allow contractual assessments. Who Administers the Program, and at what Level? PACE programs can be administered by local or state governments, nonprofit organizations, or for - profit companies. PACE programs in other states typically use a third -party administrator, whether nonprofit or private for - profit. Nonprofit administrators may be less expensive than for -profit administrators and therefore may be able to facilitate more attractive financing for customers, but for -profit administrators often have better access to capital markets and more resources available to get a program started. PACE programs also differ in whether they are administered at the state or local level; some programs (including many in California) are limited to a certain local jurisdiction, while others (e.g., Connecticut's program) are state- wide, and others enable local jurisdictions to join programs which can operate across multiple jurisdictions, but do not operate statewide (Missouri has four different PACE programs, and several of California's programs contain multiple jurisdictions). A problem with the current NC PACE legislation is that it may require local governments to expressly approve each PACE contract made under their programs. This effectively requires direct local government administration, which is difficult given the resource and time constraints faced by local government offices. Even the locally -based California PACE programs typically use third -party administrators rather than relying on local government offices to administer their programs. New NC PACE legislation should explicitly allow for third -party administration of PACE programs and should allow for local jurisdictions to join multi jurisdiction or statewide programs. Legislation could also directly create a statewide program and either provide public resources for it or delegate it to a third party administrator (or some combination of the two), but this is not absolutely necessary. If a statewide program is not created, though, there should at least be provisions directing state government offices to assist local governments with developing and standardizing PACE program rules. North Carolina State University 1919-515-3480 1 www.nccleantech.ncsu.edu UIIIIIII gp