Short title

This Act may be cited as the

Energy Efficiency Modernization Act of 2009

Congressional findings

The Congress finds that— (1)federally assisted housing programs provide robust opportunities for energy efficiency improvements and up-front investments in such improvements would provide significant long-term cost savings for taxpayers, provide stimulus to the economy through creation of capital projects and jobs, establish best practices for the industry and be consistent with the mandate of the Department of Housing and Urban Development (HUD); (2)the Government Accountability Office reported in an October 2008 study that HUD pays an estimated $5 billion annually for energy costs for approximately 6 million dwelling units of assisted housing, representing almost 17 percent of the Nation’s housing stock; (3)according to the Harvard University Graduate School of Design, more than 80 percent of federally assisted housing stock is between 15 years to 30 years old; (4)existing rules and regulations do not adequately incentivize owners of HUD-assisted property to maximize efforts to make energy efficiency improvements to such properties; and (5)increasing the energy efficiency of federally assisted housing by 25 percent to 40 percent would create near-term savings for HUD of roughly $1 billion to $1.5 billion annually, resulting in substantial long-term cost savings for the Federal Government and for taxpayers.

Green dividend program for federally assisted rental housing

(a)

Authority

The Secretary shall establish a program under this section to provide green dividends to owners of covered federally assisted housing projects who undertake utility cost-saving measures that result in utility cost savings for such housing. (b)

Green dividends

(1)

In general

A green dividend under this section with respect to a covered federally assisted housing project shall be an annual distribution, to the owner of the project, of an amount of the surplus project funds that is equal to the sum of— (A)50 percent of the annual utility cost savings resulting from the utility cost-saving measures conducted for the project; and (B)any reasonable costs, as determined by the Secretary pursuant to subsection (d)(4), incurred by the owner in carrying out the utility cost-saving measures, including financing costs incurred by the owner or a third party, in compliance with guidelines established pursuant to subsection (d)(3). (2)

Additional to standard distribution

Notwithstanding any other law or regulation relating to a limitation on distributions for a covered federally assisted housing project, a green dividend under this section shall be in addition to the standard distribution that the owner of the project is authorized to receive from the project pursuant to the regulations of the Secretary. (c)

Standards for measurement and monitoring

In carrying out the program under this section, the Secretary shall establish and utilize the following standardized methods: (1)Methods that an owner of a covered federally assisted housing project may use to accurately measure the baseline utility use of the project before undertaking the utility cost-saving measures for the project. (2)Methods that an owner of a covered federally assisted housing project may use to effectively monitor reductions in the utility use of the project resulting from the completed utility cost-saving measures for the project. (3)Methods that an owner of a covered federally assisted housing project may use to track, and that the Secretary may use to verify, utility cost savings resulting from the utility cost-saving measures for the project that account for the effect of changes in utility costs and such other factors that the Secretary considers necessary or appropriate. (d)

Other requirements

(1)

Application and selection

The Secretary shall establish requirements for owners of covered federally assisted housing projects to apply for participation in the program under this section and shall select among such applications based upon selection criteria, which the Secretary shall establish. (2)

Cost-effectiveness

The Secretary shall establish guidelines to ensure that any utility cost-saving measures undertaken pursuant to the program under this section are cost-effective in relation to the utility cost savings resulting from the measures and the green dividend provided under this section to the owner. (3)

Energy performance contracts

The Secretary shall establish guidelines for the use of energy performance contracting in carrying out utility cost-saving measures pursuant to the program under this section. (4)

Financing costs

The Secretary shall establish guidelines for the financing of the reasonable costs incurred by an owner of a covered federally assisted housing project in carrying out utility cost-saving measures under the program under this section, and whether such costs, whether financed by the limited dividend owner or a third party, shall be repayable from project funds. (5)

Reporting

(A)

To Secretary

The Secretary shall require each owner of a covered federally assisted housing project for which a green dividend is provided pursuant to the program under this section to submit to the Secretary such reports regarding the project, the utility cost-saving measures undertaken for the project, and the utility cost savings of the project in accordance with such requirements as the Secretary shall establish. (B)

To Congress

The Secretary shall submit reports to the Congress describing the implementation and operation of the program under this section, as follows: (i)

Initial report

The Secretary shall submit reports describing the initial implementation and operation of the program not later than the expiration of the 180-day period beginning upon the date of the enactment of this Act. (ii)

Annual reports

Not later than the expiration of the 12-month period that begins upon the expiration of the period specified clause (i), and upon the expiration of each successive 12-month period thereafter, the Secretary shall submit a report describing the ongoing operation of the program. (e)

Preemption of conflicting State laws limiting distributions

(1)

In general

Except as provided in paragraph (2), no State or political subdivision of a State may establish, continue in effect, or enforce any law, regulation, or administrative requirement that limits or restricts, to an amount that is less than the sum of the amounts provided for under paragraphs (1) and (2) of subsection (b), the amount of surplus project funds accruing after the date of the enactment of this section that may be distributed from any covered federally assisted housing project. (2)

Exception and waiver

Paragraph (1) shall not apply to any law or regulation to the extent such law or regulation applies to— (A)a State-financed covered federally assisted housing project; or (B)a covered federally assisted housing project for which the owner has elected to waive the applicability of paragraph (1). (f)

Definitions

For purposes of this section, the following definitions shall apply: (1)

Covered federally assisted housing project

The term covered federally assisted housing project means any multifamily rental housing project that— (A)is provided any rental assistance, mortgage insurance, subsidy, or other financial assistance by the Secretary; and (B)that is subject to a limitation on distributions, to the owner, of project funds under section 200.106(a), 236.1(c), 880.205(b), 881.205(b), or 883.306(b) of title 24 of the Code of Federal Regulations, or any other statute or regulation applicable to the project. (2)

Secretary

The term Secretary means the Secretary of Housing and Urban Development. (3)

Surplus project funds

The term surplus project funds means, with respect to a covered federally assisted housing project, the net revenue of the project after all project expenses have been paid, or funds have been set aside for the payment thereof, and any reserve requirements applicable to the project have been met. (4)

Utility cost savings

The term utility cost savings means, with respect to utility cost-saving measures undertaken for a covered federally assisted housing project, the difference between— (A)the energy or water costs that would have been incurred for the project if such utility cost-saving measures were not completed; and (B)the actual energy or water costs for the project after completion of the utility cost-saving measures. (5)

Utility cost-saving measures

The term utility cost-saving measures means, with respect to a covered federally assisted housing project, any rehabilitation, renovation, retrofit, improvement, or alteration for the project that incorporates any technology, equipment, fixture, or material, or promotes any practice, designed to reduce the energy or water consumption of the project. (g)

Regulations

Not later than the expiration of the 180-day period beginning on the date of the enactment of this Act, the Secretary shall issue any regulations necessary to carry out this section.

Use of residual receipts and reserve for replacements funds for green retrofits of federally assisted rental housing

(a)

Authority

The Secretary shall carry out a program under this section to make loans funded from residual receipts to owners of federally assisted housing projects for undertaking green retrofit measures for such housing and to encourage the broader use of reserve for replacements funds to pay for the costs of green retrofit measures for such housing. (b)

Green retrofit measures

For purposes of this section, a green retrofit measure with respect to a federally assisted housing project shall be any measure for rehabilitation, renovation, retrofit, improvement, or alteration for the project that— (1)is designed to reduce utility consumption, including water, gas, and electricity, or increase energy efficiency, for the project; (2)provides a renewable energy system for the project that generates energy from a naturally replenished energy source or sources, such as sunlight, wind, rain, tides, which shall include hydroelectricity, biomass, cogeneration, and new renewable technologies that have yet to be developed; or (3)is designed to improve indoor air quality or occupant health and safety, which shall include measures reducing the potential for mold and other allergens, measures improving fresh air ventilation, and installation of carbon monoxide sensors not required by local codes. (c)

Terms of loans funded from residual receipts and withdrawals from reserve for replacements funds for green retrofit measures

Loans under this section and withdrawals from reserve for replacements funds under this section shall be subject to such terms and conditions as the Secretary shall establish, which shall include the following: (1)

Use

Any loan amounts received, or withdrawals from reserve for replacements funds, may be used only for green retrofit measures set forth in the application approved by the Secretary pursuant to subsection (d)(1). (2)

Amount

The amount of any loan, or withdrawal from reserve for replacements funds, for any federally assisted housing project may not exceed the amount necessary to carry out the green retrofit measures set forth in the approved application. (3)

Loan term and interest rate

Each loan funded from residual receipts shall have a term to maturity that is satisfactory to the Secretary and shall bear interest at a rate that is satisfactory to the Secretary. (d)

Other requirements

(1)

Application and selection

The Secretary shall establish requirements for owners of federally assisted housing projects to apply for loans to be funded from residual receipts and to apply for the use of reserve for replacements funds under this section and shall select among such applications based upon selection criteria, which the Secretary shall establish. (2)

Reporting

(A)

To Secretary

The Secretary shall require each owner of a federally assisted housing project for which a loan is provided under this section, or for which the Secretary approves the use of reserve for replacements funds for green retrofit measures pursuant to this section, to submit to the Secretary such reports regarding the green retrofit measures undertaken for the project in accordance with such requirements as the Secretary shall establish. (B)

To Congress

The Secretary shall submit reports to the Congress describing the implementation and operation of the loan program under this section, as follows: (i)

Initial report

The Secretary shall submit a report describing the initial implementation and operation of the program not later than the expiration of the 180-day period beginning upon the date of the enactment of this Act. (ii)

Annual reports

Definitions

For purposes of this section, the following definitions shall apply: (1)

Federally assisted housing project

The term federally assisted housing project means any multifamily rental housing project for which any rental assistance, mortgage insurance, subsidy, or other financial assistance is provided by the Secretary. (2)

Secretary

The term Secretary means the Secretary of Housing and Urban Development. (f)

Funding

(1)

Project residual receipts

Notwithstanding any other provision of law, regulation, or administrative requirement to the contrary, the Secretary may authorize the withdrawal of residual receipts in the residual receipts account of a federally assisted housing project, in any amount that the Secretary determines is not needed, and will not be needed, during the term of the use restrictions applicable to the project to ensure the project’s affordability, for costs (as such term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of a loan under this section to the owner of such federally assisted housing project, which loan may be for such federally assisted housing project or for another federally assisted housing project also owned by such owner. (2)

Residual receipts upon expiration of Federal assistance

Notwithstanding any other provision of law, regulation, or administrative requirement to the contrary, any funds remaining in the residual receipts account of a federally assisted housing project upon the expiration or termination of the Federal assistance received by such project that are returned, or are required to be returned, to the Secretary under any under Federal law, regulation or administrative requirement may be used by the Secretary for costs (as such term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of loans under this section to any federally assisted housing project. (3)

Project Reserve for Replacements Funds

Notwithstanding any other provision of law, regulation, or administrative requirement to the contrary, the Secretary may authorize the owner of a federally assisted housing project to make withdrawals from the reserve for replacements fund of a federally assisted housing project, in any amount that the Secretary deems necessary or appropriate, to fund green retrofit measures for such federally assisted housing project or for another federally assisted housing project owned by such owner. (g)

Regulations

Not later than the expiration of the 180-day period beginning on the date of the enactment of this Act, the Secretary shall issue any regulations necessary to carry out this section.

Study on exemption from building codes to allow distributive energy generation measures and water efficiency measures

(a)

Study

The Comptroller General of the United States shall conduct a study to analyze and determine the benefits of establishing a statutory exemption under Federal law from compliance with provisions of State and local building codes that do not affect the health or safety of residents of multifamily housing assisted by the Department of Housing and Urban Development to enable and encourage the construction and installation in such projects of distributive energy generation measures and water efficiency measures. (b)

Provision of information to Energy Information Administration

The Comptroller General shall provide any information collected in conducting the study under this section to the Secretary of Energy to supplement information collected and maintained by the Energy Information Administration of the Department of Energy regarding residential energy consumption. (c)

Report

Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Comptroller General shall submit a report to the Congress and to the Secretary of Energy setting forth the results and conclusions of the study under this section.

Reports on utility consumption for HUD-assisted multifamily projects

(a)

In general

To assist the Secretary of Housing and Urban Development in determining how and where to undertake energy and other utility efficiency measures, the Secretary shall, by regulation, require each owner of an assisted multifamily housing project to report regularly to the Secretary regarding consumption by the project of electricity, water, gas, and other utilities. (b)

Annual report by Secretary

The Secretary shall compile the information received pursuant to subsection (a) and submit a report to the Congress and the Energy Information Administration annually regarding total utility consumption by assisted multifamily housing projects. The report shall include all non-aggregated data submitted to the Secretary pursuant to subsection (a). (c)

Assisted multifamily housing project

For purposes of this section, the term assisted multifamily housing project means any multifamily housing project that is— (1)provided project-based assistance under section 8 of the United States Housing Act of 1937, including new construction and substantial rehabilitation projects; (2)assisted under section 202 of the Housing Act of 1959 (as amended by section 801 of the Cranston-Gonzalez National Affordable Housing Act); (3)assisted under section 202 of the Housing Act of 1959, as such section existed before the enactment of the Cranston-Gonzalez National Affordable Housing Act; (4)assisted under section 811 of the Cranston-Gonzalez National Affordable Housing Act; (5)financed by a loan or mortgage insured under section 221(d)(3) of the National Housing Act that bears interest at a rate determined under the proviso of section 221(d)(5) of such Act; or (6)insured, assisted, or held by the Secretary or a State or State agency under section 236 of the National Housing Act.