A discussion draft of a new bill unveiled yesterday by House Ways and Means Committee chairman Sander Levin, D-Mich., would allow state and local governments to issue tax-exempt private-activity bonds to finance energy improvements to residential homes and would authorize more than $5 billion for new renewable energy bonds.
The bill would not extend Build America Bonds, but sources said Levin is expected to introduce other legislation containing such a provision.
While the draft Domestic Manufacturing and Energy Jobs Act would allow state and local governments to issue PABs to finance homeowners’ energy efficiency upgrades under the so-called property assessed clean energy programs, it does not appear to tackle the overarching concern facing them — the refusal of Fannie Mae and Freddie Mac to purchase mortgages tied to PACE programs.
The draft bill also would authorize an additional $3.5 billion of clean renewable energy bonds, 60% of which would be allocated to public power providers while the remaining 40% would go to rural electric cooperatives.
It also would expand the use of CREBs to include energy storage systems and certain biogas equipment. CREBs can be issued as either tax-credit bonds or direct-pay bonds like Build America Bonds.
In addition, the bill would authorize $2.4 billion of a new type of tax-credit bond — home energy conservation bonds — that would be allocated to state and local governments.
The bonds could be used to finance energy efficiency projects on residences, provided at least 20% of the proceeds go to low-income energy efficiency assistance grants and loans, and at least 10% go to “very low-income residential energy efficiency assistance grants,” according to the legislative text.