Its time to stop the over-reach by Fannie and Freddie

By Reps. Daniel Lungren (R-Calif.), Mike Thompson (D-Calif.) and Nan Hayworth (R-N.Y.) - 07/20/11 12:05 PM ET 
 
Benjamin Franklin established the nation’s first special assessment district when he created the Union Fire Company of Philadelphia, a volunteer fire department. Today there are more than 37,000 special districts in the United States. Local governments use them to pay for everything from sewer systems to sidewalks to mosquito abatement — all in response to important community concerns.

In the last two years, 27 states and the District of Columbia have passed laws allowing their local governments to use existing assessment authority (also called special improvement districts) to help homeowners and businesses finance energy efficiency and renewable energy improvements. These laws, commonly called Property Assessed Clean Energy (PACE) laws, were hailed by Scientific American as one of the top 20 ways to change the world.

The idea of PACE is simple. It uses a traditional municipal finance tool to help property owners pay for the upfront cost associated with energy-saving improvements. Property owners then pay for the improvements on their property taxes over the course of up to 20 years. PACE has rapidly gained popularity because it solves a big problem — by eliminating the high upfront cost, it removes the biggest barrier to unlocking significant new investment in clean energy.

Because the assessment is voluntary, only property owners who can afford it sign up. And, like other tax assessments, it stays with the property upon sale. So if you use PACE to install an energy-efficient furnace or put solar panels on your roof, but sell your home, the new owner will assume the property tax assessments — and get the benefit of the lower utility bills. It’s not just a win-win situation, but win-win-win: Homeowners get the benefit of lower utility bills; workers in the stagnating construction industry get jobs; and the nation gets the benefit of increased energy efficiency and reduced energy costs.

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Jefferson City Creates Energy Board

KBIA --Posted Monday, January 10th, 2011 at 1:02pm

Less than a week after announcing the creation of a Clean Energy Development Board, Jefferson City officials say they’ve already received requests from citizens wanting to begin energy efficiency projects.


Jefferson City officials have created the first Clean Energy Development Board in the state. The board will help citizens and businesses fund renewable energy projects through the Property Assessed Clean Energy Act, or PACE. City officials hope PACE will encourage people to increase the efficiency of their homes.

 Although the Clean Energy Development Board is still in its infancy, city officials say they’ve already received more requests than they can process from citizens hoping to increase energy efficiency in their homes. Now, their offices aren’t overloaded with inquiries. It’s just that the Clean Energy Development Board is not completely set up at this time. But once the Board is fully in place, Jefferson City, city attorney Nathan Nickolaus says officials hope the city can lead others in the state to develop similar programs.

� “For it to work, it can’t just be in Jefferson City because eventually everybody who needed those kinds of things in Jefferson City would have them. You really kind of need new people coming into the system all the time. It’s designed to spread out from Jefferson City into all the surrounding counties.” 

 Now, energy efficient projects can be expensive. But helping people pay these costs is pretty much what officials say the board will do. People can purchase energy efficient appliances and add that payment to their property tax rather than paying for it all up front. Property owners then have up to 20 years to repay the taxes. Nickolaus says the board will eventually be self funding. He likens the way it works to a home mortgage.

� “The board will borrow money to pay the contractors who do the work, and then they will be repaid through the property taxes coming in. When they get a large enough pool of these contracts, they will refund those with a bond issue.”�

 And if you move after installing new appliances, whoever buys your home takes over the payments. Nickolaus says not only will this increase the value of people’s homes, but it will also increase the use of energy improvements.

 Every project that’s approved must show a cost-benefit analysis. More energy must be saved than the project costs. Nickolaus says 24 other states currently use the PACE program.