- MDEQ leader Dan Wyant: A year of water for Michigan
"The governor is focused on energy and the environment," Wyant says. "This is really going to be a year that we're going to do a lot of work on water, on land issues, on natural resources that are so valuable to Michigan."
- The Great Lakes State thrives under DNR Director Keith Creagh
"The governor's budget really put natural resources front and center," Creagh says. Governor Snyder proposed funds for emergency dredging of the Great Lakes, he says, which will make sure boaters can travel safely and that the industry and economy are protected.
- MSU Sustainability Report: Spartans work to grow greener each year
The Energy Transition Plan sets important goals for MSU's future, Battle says, but significant progress has already been made. Greenhouse gas emissions have been reduced by about 14 percent and geothermal energy is now heating and cooling the new Bott Building for Nursing Education and Research, she says.
- 2012 Michigan Green Chemistry and Engineering Conference
Driving Sustainable Manufacturing October 26, 2012 Wayne State University, Detroit
- Sometimes the carrot motivates better than the stick - Michigan's Clean Corporate Citizens
Environmental law is more than forcing companies to behave responsibly. There are also incentives that provide benefits for those who go above and beyond mere compliance. Michigan's Clean Corporate Citizen program is an example of such a program.
FHFA policy keeps the benefit of PACE programs away for most homeowners
"PACE provides a no-cost to taxpayers, no-mandate, consumer opt-in approach to bringing clean energy technology to homeowners and businesses." - Rep. Adam Hasner (R-FL)
In a previous Green Blawg post, I discussed Michigan's Property Assessed Clean Energy (PACE) law. Briefly, PACE allows local governments to fund home energy efficiency projects through a property assessment that allows homeowners afford the upfront costs of such projects and pay those costs back over a longer period of time. The assessment "runs with the land" and acts as a lien on the property, even if there is a change in home ownership. This program is extremely popular, with over 20 states providing the authorization for local communities to develop PACE programs. Ann Arbor is getting set to institute its PACE program in its community.
The viability of PACE programs was put into doubt when two mortgage behemoths, the Federal Housing Finance Agency (FHFA) and the Federal National Housing Association (Fannie Mae), and their regulator, the Federal Loan Mortgage Corporation (Freddie Mac), determined that PACE programs posed a risk for secondary mortgage holders. Freddie Mac, for example, determined that it would not purchase mortgages for properties that may be encumbered by a PACE obligation. As a result, participants in PACE programs could not refinance or transfer their properties without first paying off the complete amount of the PACE obligation, which would have destroy the benefit of such a program. The FHFA (which regulates Fannie Mae and Freddie Mac) determined that the positions taken by both should remain in place.
Shortly after the lending authorities issued their edict, numerous plaintiffs, including the State of California, the Sierra Club and local governments filed suit against them. The crux of the plaintiffs' argument is that the lending authorities were treating the PACE obligations not as routine tax assessments, but loans with first priority over mortgages. This action altered the way PACE programs were treated before the change in policy and effectively stopped PACE programs in their tracks.
Three other lawsuits against the same defendants were filed in Florida and New York, but each of those was dismissed by the federal courts. The California court, however, came to a different conclusion. The California court granted a preliminary injunction, finding that it was likely that the FHFA would be required to proceed with its notice and comment process to develop a rule to implement its policy position against PACE programs. However, while it developed the rule, its current policy would remain unchanged.
It is very likely that after going through the notice and comment process, the FHFA's rule will remain unchanged. As long as PACE programs for housing do not require that its liens retain first priority, those loans affected by them would be able to be refinanced or resold. Of course, few communities would risk their capital in current economic conditions without facing opposition of its citizens, so most PACE programs will likely be frozen in place. One piece of legislation, the PACE Protection Act, has been introduced in Congress to reverse the FHFA position, but it remains in its early stages of consideration.
One option is to institute a program like Ann Arbor's PACE program. That program is available only to commercial or industrial properties, not to homeowners. Ann Arbor's program applies only to owners who are current in their taxes, are current in their mortgage, have projects within the cost range of $10,000 to $350,000, the cost of the improvements do not exceed 20 percent of the state equalized value before the improvements, and the eligible costs include the cost of equipment and installation, with installation costs broadly defined. While the application of PACE programs to homes remains in limbo, PACE maintains broad bi-partisan support and commercial application of PACE programs can still be used to improve efficiency in many businesses and industries.
The author, Saulius Mikalonis, is an environmental attorney with over 25 years of experience in the Bloomfield Hills offices of Plunkett Cooney. He is also the author of The Green Blawg, in which he writes about environmental law issues for the non-lawyer. In addition to practicing law, Mr. Mikalonis is an adjunct professor at the Thomas M. Cooley Law School, Auburn Hills Campus, at which he teaches a course entitled "Sustainable Development Law & Policy" and a Board Member of the Detroit Regional Chapter of the United States Green Building Council (USGBC).