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Attorney General Nessel Issues Formal Opinion on Local Government Assessments under PACE Act
October 30, 2023
LANSING – Michigan Attorney General Dana Nessel issued a formal opinion today concluding that contractual assessments imposed by local governments under the Property Assessed Clean Energy (PACE) Act are considered special assessments by the local government and treated in a similar manner as the real estate taxes on the property.
The two distinct components addressed by the opinion are that:
- The contractual assessments imposed by a local unit of government, being levied upon property within a specified district to recover improvement costs, “are indeed ‘special assessments’ under Michigan law,” and that,
- The assessments levied under the PACE Act are treated similarly to real estate taxes on the property, due to “the matter in which the assessments are collected, the nature of the assessments as a lien on the property, the priority the lien has in regard to the property, and the rights of the local unit of government in the case of a delinquency.”
The opinion was requested by state Representative Betsy Coffia, of Traverse City, to clarify the nature of how PACE assessments are treated in an effort to streamline compatibility with project funding from the U.S. Department of Housing and Urban Development.
The full opinion can be read on the Attorney General’s website.