Resolution Regarding Property-Assessed Clean Energy Programs

The Resolution Regarding Property-Assessed Clean Energy Programs is a draft model policy considered by ALEC's Energy, Environment, and Agriculture Task Force at the Spring Task Force Summit on May 5, 2017. Due to incomplete information, it is not known if the bill passed in a vote by legislators and lobbyists at ALEC task force meetings, if ALEC sought to distance itself from the bill as the public increased scrutiny of its pay-to-play activities, or if key operative language from the bill has been introduced by an ALEC legislator in a state legislature in the ensuing period or became binding law.

ALEC Bill Text

Whereas property-assessed clean energy (PACE) is a mechanism for private property owners to finance renewable energy and energy efficiency projects; and,

Whereas most PACE programs are established by municipalities by issuing bonds to fund projects; and,

Whereas the financing is provided by municipalities to the property owner and paid back by the owner through an additional “assessment” to the property (i.e. an extra property tax) levied by the municipality over a set time period, potentially as long as 25 years; and,

hereas PACE obligations are tied to the physical property, not the property’s owner; and,

Whereas PACE assessment are treated like a tax lien and municipalities are first in line to be repaid-ahead of mortgage agencies, in case of default; and,

Whereas traditionally Fannie Mae and Freddie Mac have objected to the prime lien status of PACE and have refused to accept mortgages on properties with PACE liens; and,

Whereas in 2016 the Federal Housing Finance Agency (FHFA) stated that “super-priority liens” created by programs like PACE “increases the risk of losses to taxpayers”; and,

Whereas, the private lending industry in the U.S. is capable of financing such projects; and,

Whereas, the market should provide financing for these projects, not government; and,

Whereas, PACE has been associated with issues of consumer protection and predatory lending in which contractors have signed up residents for PACE who do not fully understand the conditions and the impact on their property tax bill; and,

Therefore be it resolved that the American Legislative Exchange Council (ALEC) is opposed to government involvement in financing renewable and efficiency projects for private property owners; and,

Therefore be it further resolved that ALEC believes the market should provide financing for these projects not government and the private lending industry in the U.S. is capable of financing such projects.