By Geof Koss, CQ Staff
Municipalities and business groups are asking lawmakers for help in their standoff with federal housing regulators over tens of millions of economic stimulus dollars designated for clean-energy building retrofits.
Led by the U.S. Green Building Council, almost 350 businesses told lawmakers last week that a dispute with the Federal Housing Finance Agency (FHFA) over property-assessed clean energy, commonly known as PACE, is stalling projects that would provide thousands of jobs in 22 states. Municipal groups are expected to weigh in with similar letters to Congress this week.
PACE programs provide money for renewable-energy projects and retrofits that property owners repay over a period as long as 20 years through assessments on their property taxes.
Building retrofits are strongly backed by the Obama administration, both to save energy and to create jobs. The Energy Department has earmarked $150 million for local governments to support PACE projects under the 2009 stimulus law (PL 111-5).
But the program has stalled amid “significant safety and soundness concerns” raised by FHFA, which regulates mortgage giants Fannie Mae and Freddie Mac. The agency is concerned that PACE loans could take precedence over mortgage debt — echoing the earlier concerns about the program cited by Fannie and Freddie.
“Mortgage holders should not be forced to absorb new credit risks after they have already purchased or guaranteed a mortgage,” FHFA Acting Director Edward J. DeMarco said in July.
California Attorney General Edmund G. Brown Jr. has filed a lawsuit against FHFA, saying that its position is at odds with state law.
PACE supporters are urging lawmakers to pass a bill (HR 5766), sponsored by Rep.Mike Thompson, D-Calif., that would direct FHFA to adopt new underwriting standards that support the programs. The bill would also bar discrimination against communities participating in the programs. “This could be a quick, easy legislative fix that gets these programs up and running,” said one clean-energy advocate.
PACE has enjoyed strong support from top Democrats in Congress, including House SpeakerNancy Pelosi of California, but its backers have been unable to advance the bill on its own or find a legislative vehicle for it or its Senate companion (S 3642), sponsored by Barbara Boxer, D-Calif.
Last week, South Carolina Republican Bob Inglis was rebuffed by the House Rules Committee in his effort to offer the legislation as an amendment to another bill (HR 4785) that would promote energy upgrades.
A PACE supporter said advocates are eyeing all possible legislative vehicles for the fix, including a possible post-election debate in the Senate on energy legislation.
