Home › e-Efficiency News ›

Bipartisan Bill Aims to Bring Residential PACE Back to Life

Share this
Add a comment

Date: Jul 28, 2011

Image

A bill introduced in the House on July 20, 2011, seeks to revitalize residential Property Assessed Clean Energy (PACE), a program that helps property owners make efficiency improvements to reduce their energy use and save money.

The PACE Assessment Protection Act (H.R. 2599) gives residential PACE – which many thought was dead in the water – its first breath on life support.

PACE Assessment Protection Act (H.R. 2599): Reassuring Energy-Efficient Home Improvements

The PACE Assessment Protection Act would rescind warnings from financial institutions that shut down PACE last summer. The bill also would incorporate underwriting standards for PACE programs and establish rights of rescission, consumer protections and limitations on delinquent payment collection. 

“This is a bipartisan, bicoastal effort, and it’s a win-win for all involved by saving energy and money,” Rep. Dan Lungren (R-N.Y.) said in a press release. By supporting energy efficiency projects in the nation’s homes, the bill also stands to create jobs – especially in the hard-hit construction industry.

After Reps. Nan Hayworth (R-Calif.), Lungren and Mike Thompson (D-Calif.) introduced H.R. 2599, the bill was referred to the House Committee on Financial Services, which Hayworth chairs. Nine Republicans and six Democrats signed on as original cosponsors, and they expect strong support in committee. To pass, the bill must jump several hurdles: an upcoming election looms, with the threat of impeding legislation; the corporate sector has not thrown full, committed support to the bill yet; and the bill lacks a Senate counterpart. 

Should the PACE Assessment Protection Act come to pass, it will once again make PACE the money-circulating and job-creating resource that it was intended to be when it started in 2008.

PACE and its Hurdles

PACE is a tool that allows property owners to finance energy retrofits by providing up-front capital that is paid back through a special assessment on participants’ property taxes. The PACE financing model perturbs the secondary mortgage market entities primarily because, as a tax assessment, it takes a priority lien-repayment position in front of the mortgage. 

In summer 2010 – just as PACE was getting a foothold in helping homeowners across the United States finance energy-efficient home upgrades – the Federal Housing Finance Administration (FHFA), Fannie Mae, Freddie Mac and the Office of the Comptroller of the Currency declared that PACE presented “significant safety and soundness concerns” to the secondary mortgage market and shut down its residential programs.

FHFA, Fannie Mae and Freddie Mac have been unwilling to compromise with PACE supporters, forcing advocates to turn to lawsuits and legislation. However, no legislation was passed in the 111th Congress. And the lawsuits, besides being slow, have been ineffectual thus far.

PACE Resources, Related News

Policy Summaries

News Articles