(SACRAMENTO, CA) – The Assembly Committee on Revenue and Taxation passed legislation authored by Assemblymember Phil Ting (D-San Francisco), Chair of the Assembly Democratic Caucus, to help expand residential energy and water efficiency programs recovering from fallout from the nation’s home mortgage crisis.
“California has plenty of sun but is coping with drought,” said Ting. “We should respond to these pressures by expanding access to home energy and water efficiency programs. This will reduce the need to build new power plants and help communities struggling with water shortages.”
AB 2597 increases from 10 to 15 percent of property values the amount of financing available to homeowners installing building weatherization, solar panels, low-flow plumbing fixtures or electric vehicle charging stations at their homes through Property Assessed Clean Energy programs.
“Current restrictions really limit the investment options available to homeowners at a time when we need them most, especially in communities where property values are still recovering from the housing crisis,” added Ting. “These restrictions create too many missed opportunities.”
Conceived in California, PACE programs allow property owners to pay for efficiency upgrades with no money down. Local governments assist property owners with financing backed by bonds or private lenders – often around 7% APR – that is repaid through a revised property tax assessment for up to 20 years. In rental property scenarios, tenants save money on their utility bills, but property owners must pay for the improvements
A 2010 announcement from Fannie Mae and Freddie Mac that they would no longer purchase mortgages for homes associated with PACE programs led to the suspension of residential PACE programs everywhere. After losing a court battle, California adopted a $10 million reserve fund to keep mortgage interests whole during any foreclosures or forced sales of PACE properties. The framework caps the value of PACE efficiency investments at 10 percent of the property value, which would be increased under Ting’s bill.
PACE programs operate across California. A partial list includes GreenFinanceSF that operates in San Francisco; Clean Energy that operates in Sacramento, Yolo and Solano Counties; and LA County PACE in Los Angeles County.
AB 2597 passed with a 8-0 vote and moves to the Assembly Committee on Natural Resources for further review. Additional information is available at www.leginfo.ca.gov.
Contact: Anthony Matthews, tel. (916) 319-2019, anthony.matthews@asm.ca.gov