MI HB5878

Expands Michigan's Property Assessed Clean Energy (PACE) program to include noncommercial, nonindustrial residential properties through creation of Part 3, while maintaining existing commercial/industrial provisions in Part 2.

Extends eligible projects beyond renewable energy and efficiency improvements to include water usage/sewage treatment improvements, air quality improvements, and environmental hazard mitigation (lead/PFAS contamination, flood/drought mitigation, weatherization).

Establishes strict borrower protections including verification that property taxes and mortgages are current, assessment limits (not exceeding 20% of property value or 10% of owner's annual income), 5-day cancellation rights, and mandatory telephone counseling before contract execution.

Requires local governments to adopt formal procedures including public hearings, detailed program reports, contractor performance guarantees for projects over $250,000, and quality assurance provisions before establishing or amending PACE programs.

Authorizes local units to issue tax-exempt bonds secured by property assessments, allows multiple financing methods (government funds, commercial lending, bond proceeds), and permits joint implementation across multiple local governments.