I 111th CONGRESS 1st Session H. R. 1778 IN THE HOUSE OF REPRESENTATIVES March 30, 2009 Mr. Welch (for himself, Mr. Van Hollen, Mr. Patrick J. Murphy of Pennsylvania, Mrs. Maloney, Mr. Honda, Ms. Kilpatrick of Michigan, Mr. Carson of Indiana, Mrs. Dahlkemper, Mr. Pallone, Mr. Israel, Mr. Cohen, Mr. Cummings, Mr. Langevin, Mr. Ellison, Mr. Hinchey, Mr. Tonko, Mr. Blumenauer, Ms. Shea-Porter, Mrs. Christensen, Mr. Braley of Iowa, Mr. George Miller of California, Mr. Teague, Mr. Delahunt, Mr. Inslee, Mr. Courtney, Mr. Heinrich, Mr. Carnahan, Mr. Himes, Mr. Perlmutter, Mrs. Capps, Mr. Massa, and Mr. Polis of Colorado) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To provide for the establishment of national energy and environmental building retrofit policies for both residential and commercial buildings, and for other purposes.

1.

Short title

This Act may be cited as the Retrofit for Energy and Environmental Performance (REEP) Program Act.

2.

Findings

The Congress finds that— (1)buildings are responsible for 39 percent of all energy consumption, 72 percent of all electricity consumption, and 55 percent of natural gas use in the United States; (2)buildings are responsible for 38 percent of all carbon dioxide emissions in the United States; (3)energy efficiency in buildings can readily be improved in most cases using existing technologies to reduce building energy consumption by 25 percent or more; (4)buildings represent 14 percent of potable water use in the United States, also amenable to significant efficiency improvement; (5)Home Performance with Energy Star in Vermont and many other States, as well as individual retrofits of commercial buildings, show that such savings are possible and economical; and (6)expanding the residential and commercial efficiency industries will create jobs directly in performing retrofits and indirectly through reduced energy bills to consumers.

3.

Building retrofit program

(a)

Definitions

For purposes of this section: (1)

Administrator

The term Administrator means the Administrator of the Environmental Protection Agency. (2)

Performance-based building retrofit program

The term performance-based building retrofit program means a program that determines success in energy efficiency based on actual measured savings after a retrofit is complete. (3)

Prescriptive building retrofit program

The term prescriptive building retrofit program means a program that projects success in energy efficiency based on the known effectiveness of measures prescribed to be included in a retrofit. (4)

State

The term State means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other commonwealth, territory, or possession of the United States. (5)

State Energy Program

The term State Energy Program means the program under part D of title III of the Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.) (b)

Establishment

The Administrator shall develop and implement, in consultation with the Secretary of Energy, standards for a national energy and environmental building retrofit policy for single-family and multifamily residences. The Secretary of Energy shall develop and implement, in consultation with the Administrator, standards for a national energy and environmental building retrofit policy for commercial buildings. The programs to implement the residential and commercial policies based on the standards developed under this section shall together be known as the Retrofit for Energy and Environmental Performance (REEP) program. (c)

Program design

(1)

Purpose

The purpose of the REEP program is to facilitate the retrofitting of existing buildings across the United States to achieve maximum cost-effective energy efficiency improvements and significant improvements in water use and other environmental attributes. (2)

Federal resources

The REEP program shall utilize Federal personnel and resources as needed for development, design, program materials, administration, seed capital, and other activities and support. (3)

Assistance to States

The REEP program shall provide Federal financial assistance to States, to be administered through the State Energy Program, for management and the accomplishment of the program’s objectives at the individual building level, through local agencies as appropriate, in accordance with standards and requirements established under this section. (4)

State and local assistance

State and local agencies may offer free or low-cost building audits, incentives, technical assistance, training, incentive financing, and other forms of assistance to individual building owners under the standards and guidelines developed for the REEP program in accordance with this section, as well as promotion and management of the REEP program. (5)

Structure of program operations

State and local agencies shall have broad flexibility in the structure of REEP program operations and in the choice of retrofit agencies or contractors. (d)

Federal Administration

(1)

Existing programs

In creating and operating the residential REEP program— (A)the Administrator shall make appropriate use of existing programs, including the Energy Star program and in particular the Environmental Protection Agency Energy Star for Buildings program; and (B)the Secretary of Energy shall make appropriate use of existing programs, including delegating authority to the Director of Commercial High-Performance Green Buildings appointed under section 421 of the Energy Independence and Security Act of 2007 (42 U.S.C. 17081), who shall designate and provide funding to support a High-Performance Green Building Partnership Consortium pursuant to such section to support efforts under this Act. (2)

Consultation and coordination

The Administrator and the Secretary of Energy shall consult with and coordinate with the Secretary of Housing and Urban Development in carrying out the REEP program. (3)

Administration of funding

The Secretary of Energy shall administer the financing for the REEP program, providing funds to and administration through State Energy Offices under the State Energy Program, or through such existing State offices or entities regulated by the State that the Governor of the State designates to carry out the purposes of this Act. The Secretary shall ensure accountability for funds dispensed, including measurement and verification of energy, water, and environmental savings achieved. (4)

Assistance

The Administrator and the Secretary of Energy shall provide consultation and assistance to State and local agencies for the establishment of revolving loan funds or other forms of financial assistance under this section. (e)

State and Local Administration

(1)

Delegation

The State Energy Office or designated State agency described in subsection (d)(3) may delegate performance of appropriate elements of the REEP program, upon their request and subject to State law, to counties, municipalities, appropriate public agencies, and other divisions of local government, as well as to entities regulated by the State. The State shall ensure accountability for expended funds provided under this section, and shall maintain responsibility for meeting the standards and requirements of the REEP program. (2)

Employment

States and local government entities may employ public or regulated investor-owned utilities, building auditors and inspectors, contractors, nonprofit organizations, and other entities to perform audits and retrofit services under this section. (f)

Elements of REEP Program

The elements of the REEP program shall include the following: (1)The Administrator and the Secretary of Energy shall establish goals and standards for accomplishing the purpose stated in subsection (c)(1), and shall annually review and, as appropriate, revise such goals and standards. (2)Residential Energy Services Network (RESNET) certification of building energy and environment auditors, inspectors, and raters, or an equivalent certification system as determined by the Administrator. (3)Building Performance Institute (BPI) certification or licensing by States of building energy and environmental retrofit contractors, or an equivalent certification or licensing system as determined by the Administrator. (4)Building Performance Institute, Residential Energy Services Network, or other appropriate information on equipment and procedures, as determined by the Administrator, that contractors can use to test the energy and environmental efficiency of buildings effectively (such as infrared photography and pressurized testing, and tests for water use and indoor air quality). (5)Provision of clear and effective materials to describe the testing and retrofit processes for typical buildings. (6)Suggested guidelines for offering and managing prescriptive building retrofit programs and performance-based building retrofit programs for residential and commercial buildings. (7)Suggested guidelines for applying retrocommissioning principles to improve a building’s operations and maintenance procedures. (8)Determination of energy savings in a performance-based building retrofit program through— (A)for residential buildings, comparison of before and after retrofit scores on the Home Energy Rating System (HERS) Index, where the final score is produced by an objective third party; (B)for commercial buildings, Environmental Protection Agency Portfolio Manager benchmarks; or (C)for either residential or commercial buildings, use of an Administrator-approved simulation program, subject to appropriate software standards and verification of at least 15 percent of all work done. (9)Suggested guidelines for utilizing the Energy Star Portfolio Manager, the Home Energy Rating System (HERS) rating system, Home Performance with Energy Star program approvals, and any other tools associated with the retrofit program. (10)Requirements and guidelines for post-retrofit inspection and confirmation of work and energy savings. (11)Detailed descriptions of funding options for the benefit of State and local governments, along with model forms, accounting aids, agreements, and guides to best practices. (12)Guidelines for obtaining certification of buildings after retrofit as Energy Star buildings, assigning Home Energy Rating System (HERS) rating, and completing applicable building performance labels. (13)Sample materials for publicizing the program to building owners, including public service announcements and advertisements. (14)Processes for tracking the numbers and locations of buildings retrofitted under the REEP program, with information on projected and actual savings of energy and its value over time. (15)A requirement that building retrofits conducted pursuant to a REEP program, as appropriate, especially in all air-conditioned buildings, shall use roofing materials that demonstrate— (A)on residential single family homes and other buildings with slanted roofs— (i)for fiberglass asphalt-shingle roofing, an initial solar reflectance of 0.3 or higher; or (ii)for all other roofing materials, an initial solar reflectance of 0.4 or higher; and (B)on commercial buildings and all buildings with flat roofs, roofing materials with— (i)an initial solar reflectance of 0.7 or higher; (ii)a solar reflectance value 3 years after installation (h solar reflectance) of 0.55 or higher; and (iii)a thermal emittance of 0.8 or higher. (g)

Requirements

As a condition of receiving funding for the REEP program appropriated pursuant to this section, a State shall— (1)adopt the standards for training, certification of contractors, certification of buildings, and post-retrofit inspection as developed by the Administrator and the Secretary of Energy for residential and commercial buildings, respectively, except as necessary to match local conditions, needs, efficiency opportunities, or other local factors, or to accord with State laws or regulations, and then only after 60 days have expired after the State provides notice to the Administrator or the Secretary of Energy, as appropriate, of the need for such variance; and (2)establish fiscal controls and accounting procedures (which conform to generally accepted government accounting principles) sufficient to ensure proper accounting during appropriate accounting periods for payments received and disbursements, and for fund balances. The Secretary of Energy shall conduct or require each State to have such independent financial audits of REEP-related funding as the Secretary of Energy considers necessary or appropriate to carry out the purposes of this section.(h)

Financial Options To Support REEP Program

The Secretary of Energy and the Administrator shall support the implementation through State REEP programs of alternate means of creating incentives for, or reducing financial barriers to, improved energy and environmental performance in buildings, consistent with this section, including— (1)implementing prescriptive building retrofit programs and performance-based building retrofit programs; (2)providing credit enhancement, interest rate subsidies, or other credit support; (3)providing initial capital for public revolving fund financing of retrofits, with repayments by beneficiary building owners over time through their tax payments, calibrated to create net positive cash flow to the building owner; (4)providing funds to support utility-operated retrofit programs with repayments over time through utility rates, calibrated to create net positive cash flow to the building owner, and transferable from one building owner to the next with the building’s utility services; and (5)other means proposed by State and local agencies, subject to the approval of the Secretary of Energy. (i)

Federal Financial Support

(1)

In general

Financial support shall be provided to a State Energy Program, for the specific purpose of supporting the REEP program. (2)

Allocation of funding

(A)

Initial year

The Secretary of Energy shall allocate amounts appropriated during the initial year of the REEP program among the States in accordance with the State Energy Program formula under section 363 of the Energy Policy and Conservation Act (42 U.S.C. 6323). (B)

Subsequent years

In the second year of the REEP program and thereafter, the Secretary of Energy shall allocate amounts among the States as follows: (i)½ of available or appropriated funds shall be allocated among the States in accordance with the State Energy Program formula described in subparagraph (A). (ii)½ of available or appropriated funds shall be allocated among the States in accordance with the relative building energy efficiency and environmental performance of the various States in retrofitting buildings in accordance with this section during the preceding year, with higher allocations going to States showing greater success in improving energy and environmental performance of the buildings retrofitted in that State during that preceding year. (3)

Forms of support

State and local REEP programs may make per-building direct expenditures for retrofit improvements, or their equivalent in indirect financial support, from Federal funds as follows: (A)

Residential program

(i)

Awards

For residential buildings, a program may provide— (I)$500 to support a free or low-cost detailed building energy audit that prescribes energy-reducing measures, with such amount fully recoverable from the recipient if the prescribed measures are not performed, within 1 year after completion of the audit, sufficiently to enable the building to achieve at least a 20 percent reduction in energy use; (II)a total of $1,000 for measures, prescribed in an audit conducted under subclause (I), designed to reduce energy consumption by more than 10 percent, and $2,000 for measures prescribed in such an audit, designed to reduce energy consumption by more than 20 percent; (III)$3,000 for demonstrated savings of 20 percent, pursuant to a performance-based building retrofit program; and (IV)$150 for each additional percentage point of energy savings achieved beyond savings for which funding is provided under subclause (II) or (III). Funding shall not be provided under clauses (II) and (III) for the same energy savings.(ii)

Maximum percentage

Awards under clause (i) shall not to exceed 50 percent of retrofit costs for each building. (iii)

Additional awards

Additional awards may be provided, for buildings achieving at least 20 percent energy savings using funding provided under clause (i), as follows: (I)

Water

Grants of $600 may be made for measures projected or measured (using an appropriate method approved by the Administrator) to achieve at least 35 percent potable water savings through equipment or systems with an estimated service life of not less than seven years, and an additional $20 may be provided for each additional one percent of such savings, up to a maximum total grant of $1,200. (II)

Renewable energy use

For cost-effective use of renewable energy, an award of up to $2,000 may be provided for uses with respect to which Federal tax credits are not available, and the Administrator shall develop relevant standards for documenting compliance. (B)

Commercial program

(i)

Awards

For commercial buildings, a program may provide— (I)$1,000 to support a free or low-cost building audit of energy-reduction potential that prescribes energy efficiency improvements and improvements of other building attributes, with such amount fully recoverable from the recipient if the prescribed improvements are not performed, within 1 year after completion of the audit, sufficiently to enable the building to achieve at least a 20 percent reduction in energy use; (II)$0.15 per square foot of retrofit area for demonstrated energy use reductions from 20 percent to 30 percent; (III)$0.75 per square foot for demonstrated energy use reductions from 30 percent to 40 percent; (IV)$1.60 per square foot for demonstrated energy use reductions from 40 percent to 50 percent; and (V)$2.50 per square foot for demonstrated energy use reductions exceeding 50 percent. (ii)

Limitation

Amounts provided under subclauses (II) through (V) of clause (i) combined shall not exceed 50 percent of the total retrofit cost of a building. (iii)

Additional awards

Additional awards may be provided, for buildings achieving at least 20 percent energy savings using funding provided under clause (i), as follows: (I)

Water

Grants may be made for whole building potable water use reduction (using an appropriate method approved by the Secretary of Energy) for up to 50 percent of the total retrofit cost, including amounts up to— (aa)$24.00 per thousand gallons per year of potable water savings of 40 percent or more; (bb)$27.00 per thousand gallons per year of potable water savings of 50 percent or more; and (cc)$30.00 per thousand gallons per year of potable water savings of 60 percent or more. (II)

Renewable energy use

For cost-effective use of renewable energy, an award of up to $10,000 may be provided for uses with respect to which Federal tax credits are not available, and the Secretary of Energy shall develop relevant standards for documenting compliance. (III)

Environmental improvements

For other environmental improvements relating to— (aa)indoor air quality; (bb)natural lighting; (cc)use of renewable materials; and (dd)any other such improvements, as determined by the Secretary of Energy, that do not result in a decrease in energy efficiency, an award of up to $1,000 for improvements in each such category.(C)

Historic buildings

Notwithstanding subparagraphs (A) and (B), a building in or eligible for the National Register of Historic Places shall be eligible for awards under this paragraph in amounts up to 120 percent of the amounts set forth in subparagraphs (A) and (B). (D)

Supplemental support

State and local governments may supplement the per-building expenditures under this paragraph with funding from other sources. (j)

Sources of Federal Funds

(1)

Additional State Energy Program funds

Any appropriated funding provided to a State Energy Program that is not specifically required to be expended for a different federally designated purpose may be used to support a REEP program. (2)

Program administration

State Energy Offices or designated State agencies may expend up to 10 percent of funding provided under this section for program administration. (3)

Authorization of appropriations

There are authorized to be appropriated for the purposes of this section, for each of fiscal years 2010, 2011, 2012, and 2013— (A)$2,500,000,000 and such additional sums as may be necessary to the Secretary of Energy for distribution to State Energy Offices and other designated State agencies in accordance with this section; (B)$200,000,000 to the Administrator for program administration costs; (C)$200,000,000 to the Secretary of Energy for program administration costs; and (D)$50,000,000 to the Secretary of Housing and Urban Development for program administration costs.