by jbs072210 g3 — July 28, 2010—The American Institute of Architects (AIA) on July 19 called on the U.S. Congress to pass legislation that guarantees local governments the right to establish clean energy programs through Property Assessed Clean Energy (PACE) bonds.
AIA explains that PACE bonds are municipal bonds in which the proceeds from the sale of the bonds are loaned to commercial and residential property owners for the purpose of financing energy retrofits. These loans are then re-paid over long periods of time—much like a mortgage—via an annual assessment on their property tax bill.
PACE bonds are viewed as an innovative tool to help property owners reduce energy consumption, and AIA says that they are particularly important now to put people in the design and construction industry back to work and to help shore up the depressed commercial and residential real estate markets.
The Federal Housing Finance Agency (FHFA) and the Office of the Comptroller of the Currency (OCC) recently issued recent statements blocking PACE pilot programs, challenging states’ rights to levy tax assessments for a public purpose and asserting that the consumer and lender protections were not sufficient, effectively halting existing PACE programs and freezing the launch of any new programs.
AIA says PACE is a local government solution that is supported by a century of legal and historical precedent for special assessment districts, including more than 37,000 districts nationwide that have been used to finance sewers, sidewalks, and other projects that serve a public purpose. In just the past two years, twenty-two states have passed laws enabling local governments to develop PACE programs.