[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3434 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3434

    To provide for the establishment of a Home Star Retrofit Rebate 
                    Program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 May 27 (legislative day, May 26), 2010

   Mr. Bingaman (for himself, Mr. Warner, Mr. Graham, Ms. Snowe, Mr. 
  Merkley, Mr. Brown of Massachusetts, Ms. Stabenow, Mr. Sanders, Mr. 
     Dodd, Mrs. Gillibrand, Mr. Carper, Mr. Pryor, Mr. Begich, Ms. 
Klobuchar, Ms. Cantwell, and Mr. Harkin) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To provide for the establishment of a Home Star Retrofit Rebate 
                    Program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Home Star Energy 
Retrofit Act of 2010''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                  TITLE I--HOME STAR ENERGY RETROFITS

Sec. 101. Definitions.
Sec. 102. Home Star Retrofit Rebate Program.
Sec. 103. Contractors.
Sec. 104. Rebate aggregators.
Sec. 105. Quality assurance providers.
Sec. 106. Silver Star Home Energy Retrofit Program.
Sec. 107. Gold Star Home Energy Retrofit Program.
Sec. 108. Grants to States and Indian tribes.
Sec. 109. Quality assurance framework.
Sec. 110. Report.
Sec. 111. Administration.
Sec. 112. Treatment of rebates.
Sec. 113. Penalties.
Sec. 114. Home Star Energy Efficiency Loan Program.
Sec. 115. Funding.
       TITLE II--PERFORMANCE BASED ENERGY IMPROVEMENT TAX CREDITS

Sec. 201. Performance based energy improvements for nonbusiness 
                            property.

                  TITLE I--HOME STAR ENERGY RETROFITS

SEC. 101. DEFINITIONS.

    In this title:
            (1) Accredited contractor.--The term ``accredited 
        contractor'' means a residential energy efficiency contractor 
        that meets the minimum applicable requirements established 
        under section 103.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) BPI.--The term ``BPI'' means the Building Performance 
        Institute.
            (4) Certified workforce.--The term ``certified workforce'' 
        means a residential energy efficiency construction workforce 
        that is entirely certified in the appropriate job skills for 
        all employees performing installation work under--
                    (A) an applicable third party skills standard 
                established--
                            (i) by the BPI;
                            (ii) by the North American Technician 
                        Excellence;
                            (iii) by the Laborers' International Union 
                        of North America; or
                            (iv) in the State in which the work is to 
                        be performed, pursuant to a program operated by 
                        the Home Builders Institute in connection with 
                        Ferris State University, to be effective 
                        beginning on the date that is 30 days after the 
                        date notice is provided by those organizations 
                        to the Secretary that the program has been 
                        established in the State unless the Secretary 
                        determines, not later than 30 days after the 
                        date of the notice, that the standard or 
                        certification is incomplete; or
                    (B) other standards approved by the Secretary, in 
                consultation with the Secretary of Labor and the 
                Administrator.
            (5) Conditioned space.--The term ``conditioned space'' 
        means the area of a home that is--
                    (A) intended for habitation; and
                    (B) intentionally heated or cooled.
            (6) DOE.--The term ``DOE'' means the Department of Energy.
            (7) Electric utility.--The term ``electric utility'' means 
        any person or State agency that delivers or sells electric 
        energy at retail, including nonregulated utilities and 
        utilities that are subject to State regulation and Federal 
        power marketing administrations.
            (8) EPA.--The term ``EPA'' means the Environmental 
        Protection Agency.
            (9) Federal rebate processing system.--The term ``Federal 
        Rebate Processing System'' means the Federal Rebate Processing 
        System established under section 102(b).
            (10) Gold star home energy retrofit program.--The term 
        ``Gold Star Home Energy Retrofit Program'' means the Gold Star 
        Home Energy Retrofit Program established under section 107.
            (11) Home.--The term ``home'' means a principal residential 
        dwelling unit in a building with no more than 4 dwelling units 
        that--
                    (A) is located in the United States; and
                    (B) was constructed before the date of enactment of 
                this Act.
            (12) Homeowner.--The term ``homeowner'' means the resident 
        or non-resident owner of record of a home.
            (13) Home star loan program.--The term ``Home Star loan 
        program'' means the Home Star energy efficiency loan program 
        established under section 114(a).
            (14) Home star retrofit rebate program.--The term ``Home 
        Star Retrofit Rebate Program'' means the Home Star Retrofit 
        Rebate Program established under section 102(a).
            (15) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            (16) Natural gas utility.--The term ``natural gas utility'' 
        means any person or State agency that transports, distributes, 
        or sells natural gas at retail, including nonregulated 
        utilities and utilities that are subject to State regulation.
            (17) Qualified contractor.--The term ``qualified 
        contractor'' means a residential energy efficiency contractor 
        that meets minimum applicable requirements established under 
        section 103.
            (18) Quality assurance framework.--The term ``quality 
        assurance framework'' means a policy adopted by a State to 
        develop high standards for ensuring quality in ongoing energy 
        efficiency retrofit activities in which the State has a role, 
        including operation of the quality assurance program and 
        creating significant employment opportunities, in particular 
        for targeted workers.
            (19) Quality assurance program.--
                    (A) In general.--The term ``quality assurance 
                program'' means a program established under this title 
                or recognized by the Secretary under this title, to 
                oversee the delivery of home efficiency retrofit 
                programs to ensure that work is performed in accordance 
                with standards and criteria established under this 
                title.
                    (B) Inclusions.--For purposes of subparagraph (A), 
                delivery of retrofit programs includes delivery of 
                quality assurance reviews of rebate applications and 
                field inspections for a portion of customers receiving 
                rebates and conducted by a quality assurance provider, 
                with the consent of participating consumers and without 
                delaying rebate payments to participating contractors.
            (20) Quality assurance provider.--The term ``quality 
        assurance provider'' means any entity that meets the minimum 
        applicable requirements established under section 105.
            (21) Rebate aggregator.--The term ``rebate aggregator'' 
        means an entity that meets the requirements of section 104.
            (22) RESNET.--The term ``RESNET'' means the Residential 
        Energy Services Network, which is a nonprofit certification and 
        standard setting organization for home energy raters that 
        evaluate the energy performance of a home.
            (23) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (24) Silver star home energy retrofit program.--The term 
        ``Silver Star Home Energy Retrofit Program'' means the Silver 
        Star Home Energy Retrofit Program established under section 
        106.
            (25) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico;
                    (D) Guam;
                    (E) American Samoa;
                    (F) the Commonwealth of the Northern Mariana 
                Islands;
                    (G) the United States Virgin Islands; and
                    (H) any other territory or possession of the United 
                States.
            (26) Vendor.--The term ``vendor'' means any retailer that 
        sells directly to homeowners and contractors the materials used 
        for the energy savings measures under section 106.

SEC. 102. HOME STAR RETROFIT REBATE PROGRAM.

    (a) In General.--The Secretary shall establish the Home Star 
Retrofit Rebate Program.
    (b) Federal Rebate Processing System.--
            (1) Requirements.--
                    (A) In general.--Not later than 30 days after the 
                date of enactment of this Act, the Secretary, in 
                consultation with the Secretary of the Treasury and the 
                Administrator, shall--
                            (i) establish a Federal Rebate Processing 
                        System which shall serve as a database and 
                        information technology system that will allow 
                        rebate aggregators to submit claims for 
                        reimbursement using standard data protocols;
                            (ii) establish a national retrofit website 
                        that provides information on the Home Star 
                        Retrofit Rebate Program, including--
                                    (I) how to determine whether 
                                particular efficiency measures are 
                                eligible for rebates; and
                                    (II) how to participate in the 
                                program;
                            (iii) make available, on a designated 
                        website, model forms for compliance with all 
                        applicable requirements of this title, to be 
                        submitted by--
                                    (I) each qualified contractor on 
                                completion of an eligible home energy 
                                retrofit; and
                                    (II) each quality assurance 
                                provider on completion of field 
                                verification; and
                            (iv) subject to section 115, provide such 
                        administrative and technical support to rebate 
                        aggregators and States as is necessary to carry 
                        out this title.
                    (B) Distribution of funds.--Not later than 10 days 
                after the date of receipt of bundled rebate 
                applications from a rebate aggregator, the Secretary 
                shall distribute funds to the rebate aggregator on 
                approved claims for reimbursement made to the Federal 
                Rebate Processing System.
                    (C) Funding availability.--The Secretary shall 
                post, on a weekly basis, on the national retrofit 
                website established under subparagraph (A)(ii) 
                information on--
                            (i) the number of rebate claims approved 
                        for reimbursement; and
                            (ii) the total amount of funds disbursed 
                        for rebates.
                    (D) Program adjustment or termination.--Based on 
                the information described in subparagraph (C), the 
                Secretary shall announce a termination date and reserve 
                funding to process the rebate applications that are in 
                the Federal Rebate Processing System prior to the 
                termination date.
            (2) Model forms.--In carrying out this section, the 
        Secretary shall consider the model forms developed by the 
        National Home Performance Council.
    (c) Administrative and Technical Support.--Effective beginning not 
later than 30 days after the date of enactment of this Act, the 
Secretary shall provide such administrative and technical support to 
rebate aggregators and States as is necessary to carry out this title.
    (d) Public Information Campaign.--Not later than 60 days after the 
date of enactment of this Act, the Administrator shall develop and 
implement a public education campaign that describes, at a minimum--
            (1) the benefits of home energy retrofits;
            (2) the availability of rebates for--
                    (A) the installation of qualifying efficiency 
                measures; and
                    (B) whole home efficiency improvements; and
            (3) the requirements for qualified contractors and 
        accredited contractors.
    (e) Limitation.--Silver Star rebates provided under section 106 and 
Gold Star rebates provided under section 107 may be provided for the 
same home only if--
            (1) Silver Star rebates are awarded prior to Gold Star 
        rebates;
            (2) energy savings obtained from measures under the Silver 
        Star Home Energy Retrofit Program are not counted towards the 
        simulated energy savings that determine the value of a rebate 
        under the Gold Star Home Energy Retrofit Program; and
            (3) the combined Silver Star and Gold Star rebates provided 
        to the individual homeowner do not exceed $8,000.
    (f) Availability.--Not later than 90 days after the date of 
enactment of this Act, the Secretary shall ensure that Home Star 
retrofit rebates are available to all homeowners in the United States 
to the maximum extent practicable.

SEC. 103. CONTRACTORS.

    (a) Contractor Qualifications for Silver Star Home Energy Retrofit 
Program.--A contractor may perform retrofit work under the Silver Star 
Home Energy Retrofit Program in a State for which rebates are provided 
under this title only if the contractor meets or provides--
            (1) all applicable contractor licensing requirements 
        established by the State or, if none exist at the State level, 
        the Secretary;
            (2) insurance coverage of at least $1,000,000 for general 
        liability, and for such other purposes and in such other 
        amounts as required by the State;
            (3) warranties to homeowners that completed work will--
                    (A) be free of significant defects;
                    (B) be installed in accordance with the 
                specifications of the manufacturer; and
                    (C) perform properly for a period of at least 1 
                year after the date of completion of the work;
            (4) an agreement to provide the owner of a home, through a 
        discount, the full economic value of all rebates received under 
        this title with respect to the home; and
            (5) an agreement to provide the homeowner, before a 
        contract is executed between the contractor and a homeowner 
        covering the eligible work, a notice of--
                    (A) the rebate amount the contractor intends to 
                apply for with respect to eligible work under this 
                title; and
                    (B) the means by which the rebate will be passed 
                through as a discount to the homeowner.
    (b) Contractor Qualifications for Gold Star Home Energy Retrofit 
Program.--A contractor may perform retrofit work under the Gold Star 
Home Energy Retrofit Program in a State for which rebates are provided 
under this title only if the contractor--
            (1) meets the requirements for qualified contractors under 
        subsection (a); and
            (2) is accredited--
                    (A) by the BPI; or
                    (B) under other standards approved by the 
                Secretary, in consultation with the Administrator.
    (c) Health and Safety Requirements.--Nothing in this title relieves 
any contractor from the obligation to comply with applicable Federal, 
State, and local health and safety code requirements.

SEC. 104. REBATE AGGREGATORS.

    (a) In General.--The Secretary shall develop a network of rebate 
aggregators that can facilitate the delivery of rebates to 
participating contractors and vendors for discounts provided to 
homeowners for energy efficiency retrofit work.
    (b) Responsibilities.--Rebate aggregators shall--
            (1) review the proposed rebate application for completeness 
        and accuracy;
            (2) review measures under the Silver Star Home Energy 
        Retrofit Program and energy savings under the Gold Star Home 
        Energy Retrofit Program for eligibility in accordance with this 
        title;
            (3) provide data to the Federal Data Processing Center 
        consistent with data protocols established by the Secretary; 
        and
            (4) distribute funds received from DOE to contractors, 
        vendors, or other persons.
    (c) Processing Rebate Applications.--A rebate aggregator shall--
            (1) submit the rebate application to the Federal Rebate 
        Processing Center not later than 10 days after the date of 
        receipt of a rebate application from a contractor; and
            (2) distribute funds to the contractor not later than 10 
        days after the date of receipt from the Federal Rebate 
        Processing System.
    (d) Eligibility.--To be eligible to apply to the Secretary for 
approval as a rebate aggregator, an entity shall be--
            (1) a Home Performance with Energy Star partner;
            (2) an entity administering a residential energy efficiency 
        retrofit program established or approved by a State;
            (3) a Federal Power Marketing Administration, an electric 
        utility, or a natural gas utility that has--
                    (A) an approved residential energy efficiency 
                retrofit program; and
                    (B) an established quality assurance provider 
                network; or
            (4) an entity that demonstrates to the Secretary that the 
        entity can perform the functions of an rebate aggregator, 
        without disrupting existing residential retrofits in the States 
        that are incorporating the Home Star Program, including 
        demonstration of--
                    (A) corporate status or status as a State or local 
                government;
                    (B) the capability to provide electronic data to 
                the Federal Rebate Processing System;
                    (C) a financial system that is capable of tracking 
                the distribution of rebates to participating 
                contractors; and
                    (D) coordination and cooperation by the entity with 
                the appropriate State energy office regarding 
                participation in the existing energy efficiency 
                programs that will be delivering the Home Star Program.
    (e) Application To Become a Rebate Aggregator.--Not later than 30 
days after the date of receipt of an application of an entity seeking 
to become a rebate aggregator, the Secretary shall approve or deny the 
application on the basis of the eligibility criteria under subsection 
(d).
    (f) Application Priority.--In reviewing applications from entities 
seeking to become rebate aggregators, the Secretary shall give priority 
to entities that commit--
            (1) to reviewing applications for participation in the 
        program from all qualified contractors within a defined 
        geographic region; and
            (2) to processing rebate applications more rapidly than the 
        minimum requirements established under the program.
    (g) Public Utility Commission Efficiency Targets.--The Secretary 
shall--
            (1) develop guidelines for States to use to allow utilities 
        participating as rebate aggregators to count the energy savings 
        from the participation of the utilities toward State-level 
        energy savings targets; and
            (2) work with States to assist in the adoption of the 
        guidelines for the purposes and duration of the Home Star 
        Retrofit Rebate Program.

SEC. 105. QUALITY ASSURANCE PROVIDERS.

    (a) In General.--An entity shall be considered a quality assurance 
provider under this title if the entity--
            (1) is independent of the contractor;
            (2) confirms the qualifications of contractors or 
        installers of home energy efficiency retrofits;
            (3) confirms compliance with the requirements of a 
        ``certified workforce''; and
            (4) performs field inspections and other measures required 
        to confirm the compliance of the retrofit work under the Silver 
        Star program, and the retrofit work and the simulated energy 
        savings under the Gold Star program, based on the requirements 
        of this title.
    (b) Inclusions.--An entity shall be considered a quality assurance 
provider under this title if the entity is qualified through--
            (1) the International Code Council;
            (2) the BPI;
            (3) the RESNET;
            (4) a State;
            (5) a State-approved residential energy efficiency retrofit 
        program; or
            (6) any other entity designated by the Secretary, in 
        consultation with the Administrator.

SEC. 106. SILVER STAR HOME ENERGY RETROFIT PROGRAM.

    (a) In General.--If the energy efficiency retrofit of a home is 
carried out after the date of enactment of this Act in accordance with 
this section, a rebate shall be awarded for the energy retrofit of a 
home for the installation of energy savings measures--
            (1) selected from the list of energy savings measures 
        described in subsection (b);
            (2) installed in the home by a qualified contractor not 
        later than 1 year after the date of enactment of this Act;
            (3) carried out in compliance with this section; and
            (4) subject to the maximum amount limitations established 
        under subsection (d)(4).
    (b) Energy Savings Measures.--Subject to subsection (c), a rebate 
shall be awarded under this section for the installation of the 
following energy savings measures for a home energy retrofit that meet 
technical standards established under this section:
            (1) Whole house air-sealing measures, in accordance with 
        BPI standards or other procedures approved by the Secretary.
            (2) Attic insulation measures that--
                    (A) include sealing of air leakage between the 
                attic and the conditioned space, in accordance with BPI 
                standards or the attic portions of the DOE or EPA 
                thermal bypass checklist or other procedures approved 
                by the Secretary;
                    (B) add at least R-19 insulation to existing 
                insulation;
                    (C) result in at least R-38 insulation in DOE 
                climate zones 1 through 4 and at least R-49 insulation 
                in DOE climate zones 5 through 8, including existing 
                insulation, within the limits of structural capacity; 
                and
                    (D) cover at least--
                            (i) 100 percent of an accessible attic; or
                            (ii) 75 percent of the total conditioned 
                        footprint of the house.
            (3) Duct seal or replacement that--
                    (A) is installed in accordance with BPI standards 
                or other procedures approved by the Secretary; and
                    (B) in the case of duct replacement, replaces and 
                seals at least 50 percent of a distribution system of 
                the home.
            (4) Wall insulation that--
                    (A) is installed in accordance with BPI standards 
                or other procedures approved by the Secretary;
                    (B) is to full-stud thickness; and
                    (C) covers at least 75 percent of the total 
                external wall area of the home.
            (5) Crawl space insulation or basement wall and rim joist 
        insulation that is installed in accordance with BPI standards 
        or other procedures approved by the Secretary--
                    (A) covers at least 500 square feet of crawl space 
                or basement wall and adds at least--
                            (i) R-19 of cavity insulation or R-15 of 
                        continuous insulation to existing crawl space 
                        insulation; or
                            (ii) R-13 of cavity insulation or R-10 of 
                        continuous insulation to basement walls; and
                    (B) fully covers the rim joist with at least R-10 
                of new continuous or R-13 of cavity insulation.
            (6) Window replacement that replaces at least 8 exterior 
        windows, or 75 percent of the exterior windows in a home, 
        whichever is less, with windows that--
                    (A) are certified by the National Fenestration 
                Rating Council; and
                    (B) comply with criteria applicable to windows 
                under section 25(c) of the Internal Revenue Code of 
                1986.
            (7) Door replacement that replaces at least 1 exterior door 
        with doors that comply with criteria applicable to doors under 
        the 2010 Energy Star specification for doors.
            (8) Skylight replacement that replaces at least 1 skylight 
        with skylights that comply with criteria applicable to 
        skylights under the 2010 Energy Star specification for 
        skylights.
            (9)(A) Heating system replacement with--
                    (i) a natural gas or propane furnace with an AFUE 
                rating of 92 or greater;
                    (ii) a natural gas or propane boiler with an AFUE 
                rating of 90 or greater;
                    (iii) an oil furnace with an AFUE rating of 86 or 
                greater and that uses an electrically commutated blower 
                motor;
                    (iv) an oil boiler with an AFUE rating of 86 or 
                greater and that has temperature reset or thermal purge 
                controls; or
                    (v) a wood or wood pellet furnace, boiler, or 
                stove, if--
                            (I) the new system--
                                    (aa) meets at least 75 percent of 
                                the heating demands of the home; and
                                    (bb) in the case of a wood stove, 
                                replaces an existing wood stove with a 
                                stove that is EPA-certified, if a 
                                voucher is provided by the installer or 
                                other responsible party certifying that 
                                the old stove has been removed and made 
                                inoperable;
                            (II) the home has a distribution system 
                        (such as ducts, vents, blowers, or affixed 
                        fans) that allows heat from the wood stove, 
                        furnace, or boiler to reach all or most parts 
                        of the home; and
                            (III) an independent test laboratory 
                        approved by the Secretary or the Administrator 
                        certifies that the new system--
                                    (aa) has thermal efficiency (with a 
                                lower heating value) of at least 75 
                                percent for stoves and 80 percent for 
                                furnaces and boilers; and
                                    (bb) has particulate emissions of 
                                less than 3.0 grams per hour for wood 
                                stoves or pellet stoves, and less than 
                                0.32 lbs per million BTU for outdoor 
                                boilers and furnaces.
            (B) A rebate may be provided under this section for the 
        replacement of a furnace or boiler described in clauses (i) 
        through (iv) of subparagraph (A) only if the new furnace or 
        boiler is installed in accordance with ANSI/ACCA Standard 5 QI-
        2007.
            (10) Automatic water temperature controllers that vary 
        boiler water temperature in response to changes in outdoor 
        temperature or the demand for heat, if the retrofit is to an 
        existing boiler and not in conjunction with a new boiler.
            (11) Air-conditioner or heat-pump replacement with a new 
        unit that--
                    (A) is installed in accordance with ANSI/ACCA 
                Standard 5 QI-2007; and
                    (B) meets or exceeds--
                            (i) in the case of an air-source 
                        conditioner, SEER 16 and EER 13;
                            (ii) in the case of an air-source heat 
                        pump, SEER 15, EER 12.5, and HSPF 8.5; and
                            (iii) in the case of a geothermal heat 
                        pump, Energy Star tier 2 efficiency 
                        requirements.
            (12) Replacement of or with--
                    (A) a natural gas or propane water heater with a 
                condensing storage water heater with an energy factor 
                of 0.80 or more or a condensing storage water heater or 
                tankless water heater with a thermal efficiency of 90 
                percent or more;
                    (B) a tankless natural gas or propane water heater 
                with an energy factor of at least .82;
                    (C) a natural gas or propane storage water heater 
                with an energy factor of at least .67;
                    (D) an indirect water heater with an insulated 
                storage tank that--
                            (i) has a storage capacity of at least 30 
                        gallons and is insulated to at least R-16; and
                            (ii) is installed in conjunction with a 
                        qualifying boiler described in paragraph (7);
                    (E) an electric water heater with an energy factor 
                of 2.0 or more;
                    (F) a water heater with a solar hot water system 
                that--
                            (i) is certified by the Solar Rating and 
                        Certification Corporation under specification 
                        SRCC-OG-300; or
                            (ii) meets technical standards established 
                        by the State of Hawaii; or
                    (G) a water heater installed in conjunction with a 
                qualifying geothermal heat pump described in paragraph 
                (11) that provides domestic water heating through the 
                use of--
                            (i) year-round demand water heating 
                        capability; or
                            (ii) a desuperheater.
            (13) Storm windows that--
                    (A) are installed on a least 5 single-glazed 
                windows that do not have storm windows;
                    (B) are installed in a home listed on or eligible 
                for listing in the National Register of Historic 
                Places; and
                    (C) comply with any procedures that the Secretary 
                may establish for storm windows (including 
                installation).
            (14) Roof replacement that replaces at least 75 percent of 
        the roof area with energy-saving roof products certified under 
        the Energy Star program.
            (15) Window films that are installed on at least 8 exterior 
        windows, doors, or skylights, or 75 percent of the total 
        exterior square footage of glass, whichever is more, in a home 
        with window films that--
                    (A) are certified by the National Fenestration 
                Rating Council;
                    (B) have a Solar Heat Gain Coefficient of 0.40 or 
                less with a visible light-to-solar heat gain ratio of 
                at least 1.1 in 2009 International Energy Conservation 
                Code climate zones 1 through 8; and
                    (C) are certified to reduce the U-factor of the 
                National Fenestration Rating Council dual pane 
                reference window by 0.05 or greater and are only 
                applied to nonmetal frame dual pane windows in 2009 
                International Energy Conservation Code climate zones 4 
                through 8.
    (c) Installation Costs.--Measures described in paragraphs (1) 
through (15) of subsection (b) shall include expenditures for labor and 
other installation-related costs (including venting system modification 
and condensate disposal) properly allocable to the onsite preparation, 
assembly, or original installation of the component.
    (d) Amount of Rebate.--
            (1) In general.--Except as provided in paragraphs (2) 
        through (4), the amount of a rebate provided under this section 
        shall be $1,000 per measure for the installation of energy 
        savings measures described in subsection (b).
            (2) Higher rebate amount.--Except as provided in paragraph 
        (4), the amount of a rebate provided to the owner of a home or 
        designee under this section shall be $1,500 per measure for--
                    (A) attic insulation and air sealing described in 
                subsection (b)(2);
                    (B) wall insulation described in subsection (b)(4);
                    (C) a heating system described in subsection 
                (b)(9); and
                    (D) an air-conditioner or heat-pump replacement 
                described in subsection (b)(11).
            (3) Lower rebate amount.--Except as provided in paragraph 
        (4), the amount of a rebate provided under this section shall 
        be--
                    (A) $125 per door for the installation of up to a 
                maximum of 2 Energy Star doors described in subsection 
                (b)(7) for each home;
                    (B) $125 per skylight for the installation of up to 
                a maximum of 2 Energy Star skylights described in 
                subsection (b)(8) for each home;
                    (C) $750 for a maximum of 1 natural gas or propane 
                tankless water heater described in subsection 
                (b)(12)(B) for each home;
                    (D) $450 for a maximum of 1 natural gas or propane 
                storage water heater described in subsection (b)(12)(C) 
                for each home;
                    (E) $250 for rim joist insulation described in 
                subsection (b)(5)(B);
                    (F) $50 for each storm window described in 
                subsection (b)(13);
                    (G) $500 for a desuperheater described in 
                subsection (b)(12)(G)(ii);
                    (H) $500 for a wood or pellet stove that has a 
                heating capacity of at least 28,000 BTU per hour (using 
                the upper end of the range listed in the EPA list of 
                Certified Wood Stoves) and meets all of the 
                requirements of subsection (b)(9)(v) other than the 
                requirements in items (aa) and (bb) of subsection 
                (b)(9)(v)(I);
                    (I) $250 for an automatic water temperature 
                controller described in subsection (b)(10);
                    (J) $500 for a roof described in subsection 
                (b)(14); and
                    (K) $500 for window films described in subsection 
                (b)(15).
            (4) Maximum amount.--The total amount of a rebate provided 
        to the owner of a home or designee under this section shall not 
        exceed the lower of--
                    (A) $3,000;
                    (B) the sum of the amounts per measure specified in 
                paragraphs (1) through (3);
                    (C) 50 percent of the total cost of the installed 
                measures; or
                    (D) the reduction in the price paid by the owner of 
                the home, relative to the price of the installed 
                measures in the absence of the Silver Star Home Energy 
                Retrofit Program.
    (e) Insulation Products Purchased Without Installation Services.--
            (1) In general.--A rebate shall be awarded under this 
        section for attic, wall, or crawl space insulation or air 
        sealing product if--
                    (A) the product--
                            (i) qualifies for a credit under section 
                        25C of the Internal Revenue Code of 1986 but is 
                        not the subject of a claim for the credit;
                            (ii) is purchased by a homeowner for 
                        installation by the homeowner in a home 
                        identified by the address of the homeowner;
                            (iii) is identified and attributed to a 
                        specific home in a submission by the vendor to 
                        a rebate aggregator;
                            (iv) is not part of--
                                    (I) an energy savings measure 
                                described in paragraphs (6) through 
                                (11) of subsection (b); and
                                    (II) a retrofit for which a rebate 
                                is provided under the Gold Star Home 
                                Energy Retrofit Program; and
                            (v) is not part of an energy savings 
                        measure described in paragraphs (1) through (5) 
                        in subsection (b) for which the homeowner 
                        received or will receive contracting services; 
                        and
                    (B) educational material on proper installation of 
                the product is provided to the homeowner, including 
                material on air sealing while insulating.
            (2) Amount.--A rebate under this subsection shall be 
        awarded in an amount equal to 50 percent of the total cost of 
        the products described in paragraph (1), but not to exceed $250 
        per home.
    (f) Qualification for Rebate Under Silver Star Home Energy Retrofit 
Program.--On submission of a claim by a rebate aggregator to the system 
established under section 104, the Secretary shall provide 
reimbursement to the rebate aggregator for reduced-cost energy-
efficiency measures installed in a home, if--
            (1) the measures undertaken for the retrofit are--
                    (A) eligible measures described on the list 
                established under subsection (b);
                    (B) installed properly in accordance with 
                applicable technical specifications; and
                    (C) installed by a qualified contractor;
            (2) the amount of the rebate does not exceed the maximum 
        amount described in subsection (d)(4);
            (3) not less than--
                    (A) 20 percent of the retrofits performed by each 
                qualified contractor under this section are randomly 
                subject to a third-party field verification of all work 
                associated with the retrofit by a quality assurance 
                provider; or
                    (B) in the case of qualified contractor that uses a 
                certified workforce, 10 percent of the retrofits 
                performed under this section are randomly subject to a 
                third-party field verification of all work associated 
                with the retrofit by a quality assurance provider; and
            (4)(A) the installed measures will be brought into 
        compliance with the specifications and quality standards for 
        the Home Star Retrofit Rebate Program, by the installing 
        qualified contractor, at no additional cost to the homeowner, 
        not later than 14 days after the date of notification of a 
        defect, if a field verification by a quality assurance provider 
        finds that corrective work is needed;
            (B) a subsequent quality assurance visit is conducted to 
        evaluate the remedy not later than 7 days after notification by 
        the contractor that the defect has been corrected; and
            (C) notification of disposition of the visit occurs not 
        later than 7 days after the date of that visit.
    (g) Homeowner Complaints.--
            (1) In general.--During the 1-year warranty period, a 
        homeowner may make a complaint under the quality assurance 
        program that compliance with the quality assurance requirements 
        of this section has not been achieved.
            (2) Verification.--
                    (A) In general.--The quality assurance program 
                shall provide that, on receiving a complaint under 
                paragraph (1), an independent quality assurance 
                provider shall conduct field verification on the 
                retrofit work performed by the contractor.
                    (B) Administration.--A verification under this 
                paragraph shall be--
                            (i) in addition to verifications conducted 
                        under subsection (f)(3); and
                            (ii) corrected in accordance with 
                        subsection (f)(4).
    (h) Audits.--
            (1) In general.--On making payment for a submission under 
        this section, the Secretary shall review rebate requests to 
        determine whether program requirements were met in all 
        respects.
            (2) Incorrect payment.--On a determination of the Secretary 
        under paragraph (1) that a payment was made incorrectly to a 
        party, the Secretary may--
                    (A) recoup the amount of the incorrect payment; or
                    (B) withhold the amount of the incorrect payment 
                from the next payment made to the party pursuant to a 
                subsequent request.

SEC. 107. GOLD STAR HOME ENERGY RETROFIT PROGRAM.

    (a) In General.--If the energy efficiency retrofit of a home is 
carried out after the date of enactment of this Act by an accredited 
contractor in accordance with this section, a rebate shall be awarded 
for retrofits that achieve whole home energy savings.
    (b) Amount of Rebate.--Subject to subsection (e), the amount of a 
rebate provided to the owner of a home or a designee of the owner under 
this section shall be--
            (1) $3,000 for a 20-percent reduction in whole home energy 
        consumption; and
            (2) an additional $1,000 for each additional 5-percent 
        reduction up to the lower of--
                    (A) $8,000; or
                    (B) 50 percent of the total retrofit cost 
                (including the cost of audit and diagnostic 
                procedures).
    (c) Energy Savings.--
            (1) In general.--Reductions in whole home energy 
        consumption under this section shall be determined by a 
        comparison of the simulated energy consumption of the home 
        before and after the retrofit of the home.
            (2) Documentation.--The percent improvement in energy 
        consumption under this section shall be documented through--
                    (A)(i) the use of a whole home simulation software 
                program that has been approved as a commercial 
                alternative under the Weatherization Assistance Program 
                for Low-Income Persons established under part A of 
                title IV of the Energy Conservation and Production Act 
                (42 U.S.C. 6861 et seq.); or
                    (ii) a equivalent performance test established by 
                the Secretary, in consultation with the Administrator; 
                or
                    (B)(i) the use of a whole home simulation software 
                program that has been approved under RESNET Publication 
                No. 06-001 (or a successor publication approved by the 
                Secretary);
                    (ii) an equivalent performance test established by 
                the Secretary; or
                    (iii) a State-certified equivalent rating network, 
                as specified by IRS Notice 2008-35; or
                    (iv) a HERS rating system required by State law.
            (3) Monitoring.--The Secretary--
                    (A) shall continuously monitor the software 
                packages used for determining rebates under this 
                section; and
                    (B) may disallow the use of software programs that 
                improperly assess energy savings.
            (4) Assumptions and testing.--The Secretary may--
                    (A) establish simulation tool assumptions for the 
                establishment of the pre-retrofit energy use;
                    (B) require compliance with software performance 
                tests covering--
                            (i) mechanical system performance;
                            (ii) duct distribution system efficiency;
                            (iii) hot water performance; or
                            (iv) other measures; and
                    (C) require the simulation of pre-retrofit energy 
                usage to be bounded by metered pre-retrofit energy 
                usage.
            (5) Recommended measures.--The simulation tool shall have 
        the ability at a minimum to assess the savings associated with 
        all the measures for which incentives are specifically provided 
        under the Silver Star Home Energy Retrofit Program.
    (d) Qualification for Rebate Under Gold Star Home Energy Retrofit 
Program.--On submission of a claim by a rebate aggregator to the system 
established under section 104, the Secretary shall provide 
reimbursement to the rebate aggregator for reduced-cost whole-home 
retrofits, if--
            (1) the retrofit is performed by an accredited contractor;
            (2) the amount of the reimbursement is not more than the 
        amount described in subsection (b);
            (3) documentation described in subsection (c) is 
        transmitted with the claim;
            (4) a home receiving a whole-home retrofit is subject to 
        random third-party field verification by a quality assurance 
        provider in accordance with subsection (e); and
            (5)(A) the installed measures will be brought into 
        compliance with the specifications and quality standards for 
        the Home Star Retrofit Rebate Program, by the installing 
        qualified contractor, at no additional cost to the homeowner, 
        not later than 14 days after the date of notification of a 
        defect if a field verification by a quality assurance provider 
        finds that corrective work is needed;
            (B) a subsequent quality assurance visit is conducted to 
        evaluate the remedy not later than 7 days after notification by 
        the contractor that the defect has been corrected; and
            (C) notification of disposition of the visit occurs not 
        later than 7 days after the date of that visit.
    (e) Verification.--
            (1) In general.--Subject to paragraph (2), all work 
        installed in a home receiving a whole-home retrofit by an 
        accredited contractor under this section shall be subject to 
        random third-party field verification by a quality assurance 
        provider at a rate of--
                    (A) 15 percent; or
                    (B) in the case of work performed by an accredited 
                contractor using a certified workforce, 10 percent.
            (2) Verification not required.--A home shall not be subject 
        to random third-party field verification under this section 
        if--
                    (A) a post-retrofit home energy rating is conducted 
                by an eligible certifier in accordance with--
                            (i) RESNET Publication No. 06-001 (or a 
                        successor publication approved by the 
                        Secretary);
                            (ii) a State-certified equivalent rating 
                        network, as specified in IRS Notice 2008-35; or
                            (iii) a HERS rating system required by 
                        State law;
                    (B) the eligible certifier is independent of the 
                qualified contractor or accredited contractor in 
                accordance with RESNET Publication No. 06-001 (or a 
                successor publication approved by the Secretary); and
                    (C) the rating includes field verification of 
                measures.
    (f) Homeowner Complaints.--
            (1) In general.--A homeowner may make a complaint under the 
        quality assurance program during the 1-year warranty period 
        that compliance with the quality assurance requirements of this 
        section has not been achieved.
            (2) Verification.--
                    (A) In general.--The quality assurance program 
                shall provide that, on receiving a complaint under 
                paragraph (1), an independent quality assurance 
                provider shall conduct field verification on the 
                retrofit work performed by the contractor.
                    (B) Administration.--A verification under this 
                paragraph shall be--
                            (i) in addition to verifications conducted 
                        under subsection (e)(1); and
                            (ii) corrected in accordance with 
                        subsection (e).
    (g) Audits.--
            (1) In general.--On making payment for a submission under 
        this section, the Secretary shall review rebate requests to 
        determine whether program requirements were met in all 
        respects.
            (2) Incorrect payment.--On a determination of the Secretary 
        under paragraph (1) that a payment was made incorrectly to a 
        party, the Secretary may--
                    (A) recoup the amount of the incorrect payment; or
                    (B) withhold the amount of the incorrect payment 
                from the next payment made to the party pursuant to a 
                subsequent request.

SEC. 108. GRANTS TO STATES AND INDIAN TRIBES.

    (a) In General.--A State or Indian tribe that receives a grant 
under subsection (d) shall use the grant for--
            (1) administrative costs;
            (2) oversight of quality assurance plans;
            (3) development of ongoing quality assurance framework;
            (4) establishment and delivery of financing pilots in 
        accordance with this title;
            (5) coordination with existing residential retrofit 
        programs and infrastructure development to assist deployment of 
        the Home Star program;
            (6) assisting in the delivery of services to rental units; 
        and
            (7) the costs of carrying out the responsibilities of the 
        State or Indian tribe under the Silver Star Home Energy 
        Retrofit Program and the Gold Star Home Energy Retrofit 
        Program.
    (b) Initial Grants.--Not later than 30 days after the date of 
enactment of this Act, the Secretary shall make the initial grants 
available under this section.
    (c) Indian Tribes.--The Secretary shall reserve an appropriate 
amount of funding to be made available to carry out this section for 
each fiscal year to make grants available to Indian tribes under this 
section.
    (d) State Allotments.--From the amounts made available to carry out 
this section for each fiscal year remaining after the reservation 
required under subsection (c), the Secretary shall make grants 
available to States in accordance with section 115.
    (e) Quality Assurance Programs.--
            (1) In general.--A State or Indian tribe may use a grant 
        made under this section to carry out a quality assurance 
        program that is--
                    (A) operated as part of a State energy conservation 
                plan established under part D of title III of the 
                Energy Policy and Conservation Act (42 U.S.C. 6321 et 
                seq.);
                    (B) managed by the office or the designee of the 
                office that is--
                            (i) responsible for the development of the 
                        plan under section 362 of that Act (42 U.S.C. 
                        6322); and
                            (ii) to the maximum extent practicable, 
                        conducting an existing energy efficiency 
                        program; and
                    (C) in the case of a grant made to an Indian tribe, 
                managed by an entity designated by the Indian tribe to 
                carry out a quality assurance program or a national 
                quality assurance program manager.
            (2) Noncompliance.--If the Secretary determines that a 
        State or Indian tribe has not provided or cannot provide 
        adequate oversight over a quality assurance program to ensure 
        compliance with this title, the Secretary may--
                    (A) withhold further quality assurance funds from 
                the State or Indian tribe; and
                    (B) require that quality assurance providers 
                operating in the State or by the Indian tribe be 
                overseen by a national quality assurance program 
                manager selected by the Secretary.
    (f) Implementation.--A State or Indian tribe that receives a grant 
under this section may implement a quality assurance program through 
the State, the Indian tribe, or a third party designated by the State 
or Indian tribe, including--
            (1) an energy service company;
            (2) an electric utility;
            (3) a natural gas utility;
            (4) a third-party administrator designated by the State or 
        Indian tribe; or
            (5) a unit of local government.
    (g) Public-Private Partnerships.--A State or Indian tribe that 
receives a grant under this section are encouraged to form partnerships 
with utilities, energy service companies, and other entities--
            (1) to assist in marketing a program;
            (2) to facilitate consumer financing;
            (3) to assist in implementation of the Silver Star Home 
        Energy Retrofit Program and the Gold Star Home Energy Retrofit 
        Program, including installation of qualified energy retrofit 
        measures; and
            (4) to assist in implementing quality assurance programs.
    (h) Coordination of Rebate and Existing State-Sponsored Programs.--
            (1) In general.--A State or Indian tribe shall, to the 
        maximum extent practicable, prevent duplication through 
        coordination of a program authorized under this title with--
                    (A) the Energy Star appliance rebates program 
                authorized under the American Recovery and Reinvestment 
                Act of 2009 (Public Law 111-5; 123 Stat. 115); and
                    (B) comparable programs planned or operated by 
                States, political subdivisions, electric and natural 
                gas utilities, Federal power marketing administrations, 
                and Indian tribes.
            (2) Existing programs.--In carrying out this subsection, a 
        State or Indian tribe shall--
                    (A) give priority to--
                            (i) comprehensive retrofit programs in 
                        existence on the date of enactment of this Act, 
                        including programs under the supervision of 
                        State utility regulators; and
                            (ii) using Home Star funds made available 
                        under this title to enhance and extend existing 
                        programs; and
                    (B) seek to enhance and extend existing programs by 
                coordinating with administrators of the programs.

SEC. 109. QUALITY ASSURANCE FRAMEWORK.

    (a) In General.--Not later than 180 days after the date that the 
Secretary initially provides funds to a State under this title, the 
State shall submit to the Secretary a plan to implement a quality 
assurance program that covers all federally assisted residential 
efficiency retrofit work administered, supervised, or sponsored by the 
State.
    (b) Implementation.--The State shall--
            (1) develop a quality assurance framework in consultation 
        with industry stakeholders, including representatives of 
        efficiency program managers, contractors, and environmental, 
        energy efficiency, and labor organizations; and
            (2) implement the quality assurance framework not later 
        than 1 year after the date of enactment of this Act.
    (c) Components.--The quality assurance framework established under 
this section shall include--
            (1) a requirement that contractors be prequalified in order 
        to be authorized to perform federally assisted residential 
        retrofit work;
            (2) maintenance of a list of prequalified contractors 
        authorized to perform federally assisted residential retrofit 
        work; and
            (3) minimum standards for prequalified contractors that 
        include--
                    (A) accreditation;
                    (B) legal compliance procedures;
                    (C) proper classification of employees; and
                    (D) maintenance of records needed to verify 
                compliance;
            (4) targets and realistic plans for--
                    (A) the recruitment of small minority or women-
                owned business enterprises;
                    (B) the employment of graduates of training 
                programs that primarily serve low-income populations 
                with a median income that is below 200 percent of the 
                poverty line (as defined in section 673(2) of the 
                Community Services Block Grant Act (42 U.S.C. 9902(2), 
                including any revision required by that section)) by 
                participating contractors; and
            (5) a plan to link workforce training for energy efficiency 
        retrofits with training for the broader range of skills and 
        occupations in construction or emerging clean energy 
        industries.
    (d) Noncompliance.--If the Secretary determines that a State has 
not taken the steps required under this section, the Secretary shall 
provide to the State a period of at least 90 days to comply before 
suspending the participation of the State in the program.

SEC. 110. REPORT.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall submit to the Committee on Energy and 
Natural Resources of the Senate and the Committee on Energy and 
Commerce of the House of Representatives a report on the use of funds 
under this title.
    (b) Contents.--The report shall include a description of--
            (1) the energy savings produced as a result of this title;
            (2) the direct and indirect employment created as a result 
        of the programs supported by the funds provided under this 
        title;
            (3) the specific entities implementing the energy 
        efficiency programs;
            (4) the beneficiaries who received the efficiency 
        improvements;
            (5) the manner in which funds provided under this title 
        were used;
            (6) the sources (such as mortgage lenders, utility 
        companies, and local governments) and types of financing used 
        by the beneficiaries to finance the retrofit expenses that were 
        not covered by grants provided under this title;
            (7) the results of verification requirements; and
            (8) any other information the Secretary considers 
        appropriate.
    (c) Noncompliance.--If the Secretary determines that a rebate 
aggregator, State, or Indian tribe has not provided the information 
required under this section, the Secretary shall provide to the rebate 
aggregator, State, or Indian tribe a period of at least 90 days to 
provide any necessary information, subject to penalties imposed by the 
Secretary for entities other than States and Indian tribes, which may 
include withholding of funds or reduction of future grant amounts.

SEC. 111. ADMINISTRATION.

    (a) In General.--Subject to section 115(b), not later than 30 days 
after the date of enactment of this Act, the Secretary shall provide 
such administrative and technical support to rebate aggregators, 
States, and Indian tribes as is necessary to carry out the functions 
designated to States under this title.
    (b) Appointment of Personnel.--Notwithstanding the provisions of 
title 5, United States Code, governing appointments in the competitive 
service and General Schedule classifications and pay rates, the 
Secretary may appoint such professional and administrative personnel as 
the Secretary considers necessary to carry out this title.
    (c) Rate of Pay.--The rate of pay for a person appointed under 
subsection (a) shall not exceed the maximum rate payable for GS-15 of 
the General Schedule under chapter 53 of title 5, United States Code.
    (d) Consultants.--Notwithstanding section 303 of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 253), the 
Secretary may retain such consultants on a noncompetitive basis as the 
Secretary considers necessary to carry out this title.
    (e) Contracting.--In carrying out this title, the Secretary may 
waive all or part of any provision of the Competition in Contracting 
Act of 1984 (Public Law 98-369; 98 Stat. 1175), an amendment made by 
that Act, or the Federal Acquisition Regulation on a determination that 
circumstances make compliance with the provisions contrary to the 
public interest.
    (f) Regulations.--
            (1) In general.--Notwithstanding section 553 of title 5, 
        United States Code, the Secretary may issue regulations that 
        the Secretary, in the sole discretion of the Secretary, 
        determines necessary to carry out the Home Star Retrofit Rebate 
        Program.
            (2) Deadline.--If the Secretary determines that regulations 
        described in paragraph (1) are necessary, the regulations shall 
        be issued not later than 60 days after the date of the 
        enactment of this Act.
    (g) Information Collection.--Chapter 35 of title 44, United States 
Code, shall not apply to any information collection requirement 
necessary for the implementation of the Home Star Retrofit Rebate 
Program.
    (h) Adjustment of Rebate Amounts.--Effective beginning on the date 
that is 180 days after the date of enactment of this Act, the Secretary 
may, after not less than 30 days public notice, prospectively adjust 
the rebate amounts provided in this section based on--
            (1) the use of the Silver Star Home Energy Retrofit Program 
        and the Gold Star Home Energy Retrofit Program; and
            (2) other program data.

SEC. 112. TREATMENT OF REBATES.

    (a) In General.--For purposes of the Internal Revenue Code of 1986, 
rebates received for eligible measures under this title--
            (1) shall not be considered taxable income to a homeowner;
            (2) shall prohibit the consumer from applying for a tax 
        credit allowed under section 25C, 25D, or 25E of that Code for 
        the same eligible measures performed in the home of the 
        homeowner; and
            (3) shall be considered a credit allowed under section 25C, 
        25D, or 25E of that Code for purposes of any limitation on the 
        amount of the credit under that section.
    (b) Notice.--
            (1) In general.--A participating contractor shall provide 
        notice to a homeowner of the provisions of subsection (a) 
        before eligible work is performed in the home of the homeowner.
            (2) Notice in rebate form.--A homeowner shall be notified 
        of the provisions of subsection (a) in the appropriate rebate 
        form developed by the Secretary, in consultation with the 
        Secretary of the Treasury.
            (3) Availability of rebate form.--A participating 
        contractor shall obtain the rebate form on a designated website 
        in accordance with section 102(b)(1)(A)(iii).

SEC. 113. PENALTIES.

    (a) In General.--It shall be unlawful for any person to violate 
this title (including any regulation issued under this title), other 
than a violation as the result of a clerical error.
    (b) Civil Penalty.--Any person who commits a violation of this 
title shall be liable to the United States for a civil penalty in an 
amount that is not more than the higher of--
            (1) $15,000 for each violation; or
            (2) 3 times the value of any associated rebate under this 
        title.
    (c) Administration.--The Secretary may--
            (1) assess and compromise a penalty imposed under 
        subsection (b); and
            (2) require from any entity the records and inspections 
        necessary to enforce this title.
    (d) Fraud.--In addition to any civil penalty, any person who 
commits a fraudulent violation of this title shall be subject to 
criminal prosecution.

SEC. 114. HOME STAR ENERGY EFFICIENCY LOAN PROGRAM.

    (a) Definitions.--In this section:
            (1) Eligible participant.--The term ``eligible 
        participant'' means a homeowner who receives financial 
        assistance from a qualified financing entity to carry out 
        energy efficiency or renewable energy improvements to an 
        existing home or other residential building of the homeowner in 
        accordance with the Gold Star Home Energy Retrofit Program or 
        the Silver Star Home Energy Retrofit Program.
            (2) Program.--The term ``program'' means the Home Star 
        Energy Efficiency Loan Program established under subsection 
        (b).
            (3) Qualified financing entity.--The term ``qualified 
        financing entity'' means a State, political subdivision of a 
        State, tribal government, electric utility, natural gas 
        utility, nonprofit or community-based organization, energy 
        service company, retailer, or any other qualified entity that--
                    (A) meets the eligibility requirements of this 
                section; and
                    (B) is designated by the Governor of a State in 
                accordance with subsection (e).
            (4) Qualified loan program mechanism.--The term ``qualified 
        loan program mechanism'' means a loan program that is--
                    (A) administered by a qualified financing entity; 
                and
                    (B) principally funded--
                            (i) by funds provided by or overseen by a 
                        State; or
                            (ii) through the energy loan program of the 
                        Federal National Mortgage Association.
    (b) Establishment.--The Secretary shall establish a Home Star 
Energy Efficiency Loan Program under which the Secretary shall make 
funds available to States to support financial assistance provided by 
qualified financing entities for making, to existing homes, energy 
efficiency improvements that qualify under the Gold Star Home Energy 
Retrofit Program or the Silver Star Home Energy Retrofit Program.
    (c) Eligibility of Qualified Financing Entities.--To be eligible to 
participate in the program, a qualified financing entity shall--
            (1) offer a financing product under which eligible 
        participants may pay over time for the cost to the eligible 
        participant (after all applicable Federal, State, local, and 
        other rebates or incentives are applied) of making improvements 
        described in subsection (b);
            (2) require all financed improvements to be performed by 
        contractors in a manner that meets minimum standards that are 
        at least as stringent as the standards provided under sections 
        106 and 107; and
            (3) establish standard underwriting criteria to determine 
        the eligibility of program applicants, which criteria shall be 
        consistent with--
                    (A) with respect to unsecured consumer loan 
                programs, standard underwriting criteria used under the 
                energy loan program of the Federal National Mortgage 
                Association; or
                    (B) with respect to secured loans or other forms of 
                financial assistance, commercially recognized best 
                practices applicable to the form of financial 
                assistance being provided (as determined by the 
                designated entity administering the program in the 
                State).
    (d) Allocation.--In making funds available to States for each 
fiscal year under this section, the Secretary shall use the formula 
used to allocate funds to States to carry out State energy conservation 
plans established under part D of title III of the Energy Policy and 
Conservation Act (42 U.S.C. 6321 et seq.).
    (e) Qualified Financing Entities.--Before making funds available to 
a State under this section, the Secretary shall require the Governor of 
the State to provide to the Secretary a letter of assurance that the 
State--
            (1) has 1 or more qualified financing entities that meet 
        the requirements of this section;
            (2) has established a qualified loan program mechanism 
        that--
                    (A) includes a methodology to ensure credible 
                energy savings or renewable energy generation;
                    (B) incorporates an effective repayment mechanism, 
                which may include--
                            (i) on-utility-bill repayment;
                            (ii) tax assessment or other form of 
                        property assessment financing;
                            (iii) municipal service charges;
                            (iv) energy or energy efficiency services 
                        contracts;
                            (v) energy efficiency power purchase 
                        agreements;
                            (vi) unsecured loans applying the 
                        underwriting requirements of the energy loan 
                        program of the Federal National Mortgage 
                        Association; or
                            (vii) alternative contractual repayment 
                        mechanisms that have been demonstrated to have 
                        appropriate risk mitigation features; and
                    (C) will provide, in a timely manner, all 
                information regarding the administration of the program 
                as the Secretary may require to permit the Secretary to 
                meet the reporting requirements of subsection (h).
    (f) Use of Funds.--Funds made available to States under the program 
may be used to support financing products offered by qualified 
financing entities to eligible participants for eligible energy 
efficiency work, by providing--
            (1) interest rate reductions;
            (2) loan loss reserves or other forms of credit 
        enhancement;
            (3) revolving loan funds from which qualified financing 
        entities may offer direct loans; or
            (4) other debt instruments or financial products 
        necessary--
                    (A) to maximize leverage provided through available 
                funds; and
                    (B) to support widespread deployment of energy 
                efficiency finance programs.
    (g) Use of Repayment Funds.--In the case of a revolving loan fund 
established by a State described in subsection (f)(3), a qualified 
financing entity may use funds repaid by eligible participants under 
the program to provide financial assistance for additional eligible 
participants to make improvements described in subsection (b) in a 
manner that is consistent with this section or other such criteria as 
are prescribed by the State.
    (h) Program Evaluation.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to Congress a program 
evaluation that describes--
            (1) how many eligible participants have participated in the 
        program;
            (2) how many jobs have been created through the program, 
        directly and indirectly;
            (3) what steps could be taken to promote further deployment 
        of energy efficiency and renewable energy retrofits;
            (4) the quantity of verifiable energy savings, homeowner 
        energy bill savings, and other benefits of the program; and
            (5) the performance of the programs carried out by 
        qualified financing entities under this section, including 
        information on the rate of default and repayment.
    (i) Credit Support for Financing Programs.--Section 1705 of the 
Energy Policy Act of 2005 (42 U.S.C. 16516) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(4) Energy efficiency projects, including projects to 
        retrofit residential, commercial, and industrial buildings, 
        facilities, and equipment, including financing programs that 
        finance the retrofitting of residential, commercial, and 
        industrial buildings, facilities, and equipment.''.
            (2) by redesignating subsection (e) as subsection (f); and
            (3) by inserting after subsection (d) the following:
    ``(e) Credit Support for Financing Programs.--
            ``(1) In general.--In the case of programs that finance the 
        retrofitting of residential, commercial, and industrial 
        buildings, facilities, and equipment described in subsection 
        (a)(4), the Secretary may--
                    ``(A) offer loan guarantees for portfolios of debt 
                obligations; and
                    ``(B) purchase or make commitments to purchase 
                portfolios of debt obligations.
            ``(2) Term.--Notwithstanding section 1702(f), the term of 
        any debt obligation that receives credit support under this 
        subsection shall require full repayment over a period not to 
        exceed the lesser of--
                    ``(A) 30 years; and
                    ``(B) the projected weighted average useful life of 
                the measure or system financed by the debt obligation 
                or portfolio of debt obligations (as determined by the 
                Secretary).
            ``(3) Underwriting.--The Secretary may--
                    ``(A) delegate underwriting responsibility for 
                portfolios of debt obligations under this subsection to 
                financial institutions that meet qualifications 
                determined by the Secretary; and
                    ``(B) determine an appropriate percentage of loans 
                in a portfolio to review in order to confirm sound 
                underwriting.
            ``(4) Administration.--Subsections (c) and (d)(3) of 
        section 1702 and subsection (c) of this section shall not apply 
        to loan guarantees made under this subsection.''.
    (j) Termination of Effectiveness.--The authority provided by this 
section and the amendments made by this section terminates effective on 
the date that is 2 years after the date of enactment of this Act.

SEC. 115. FUNDING.

    (a) Authorization of Appropriations.--
            (1) In general.--Subject to subsection (j), there is 
        authorized to be appropriated to carry out this title 
        $5,000,000,000 for the period of fiscal years 2010 through 
        2012.
            (2) Maintenance of funding.--Funds provided under this 
        section shall supplement and not supplant any Federal and State 
        funding provided to carry out energy efficiency programs in 
        existence on the date of enactment of this Act.
    (b) Grants to States.--
            (1) In general.--Of the amount provided under subsection 
        (a), $380,000,000 or not more than 6 percent, whichever is 
        less, shall be used to carry out section 108.
            (2) Distribution to state energy offices.--
                    (A) In general.--Not later than 30 days after the 
                date of enactment of this Act, the Secretary shall--
                            (i) provide to State energy offices 25 
                        percent of the funds described in paragraph 
                        (1); and
                            (ii) determine a formula to provide the 
                        balance of funds to State energy offices 
                        through a performance-based system.
                    (B) Allocation.--
                            (i) Allocation formula.--Funds described in 
                        subparagraph (A)(i) shall be made available in 
                        accordance with the allocation formula for 
                        State energy conservation plans established 
                        under part D of title III of the Energy Policy 
                        and Conservation Act (42 U.S.C. 6321 et seq.).
                            (ii) Performance-based system.--The balance 
                        of the funds described in subparagraph (A)(ii) 
                        shall be made available in accordance with the 
                        performance-based system described in 
                        subparagraph (A)(ii).
    (c) Quality Assurance Costs.--
            (1) In general.--Of the amount provided under subsection 
        (a), not more than 5 percent shall be used to carry out the 
        quality assurance provisions of this title.
            (2) Management.--Funds provided under this subsection shall 
        be overseen by--
                    (A) State energy offices described in subsection 
                (b)(2); or
                    (B) other entities determined by the Secretary to 
                be eligible to carry out quality assurance functions 
                under this title.
            (3) Distribution to quality assurance providers or rebate 
        aggregators.--The Secretary shall use funds provided under this 
        subsection to compensate quality assurance providers, or rebate 
        aggregators, for services under the Silver Star Home Energy 
        Retrofit Program or the Gold Star Home Energy Retrofit Program 
        through the Federal Rebate Processing Center based on the 
        services provided to contractors under a quality assurance 
        program and rebate aggregation.
            (4) Incentives.--The amount of incentives provided to 
        quality assurance providers or rebate aggregators shall be--
                    (A)(i) in the case of the Silver Star Home Energy 
                Retrofit Program--
                            (I) $25 per rebate review and submission 
                        provided under the program; and
                            (II) $150 for each field inspection 
                        conducted under the program; and
                    (ii) in the case of the Gold Star Home Energy 
                Retrofit Program--
                            (I) $35 for each rebate review and 
                        submission provided under the program; and
                            (II) $300 for each field inspection 
                        conducted under the program; or
                    (B) such other amounts as the Secretary considers 
                necessary to carry out the quality assurance provisions 
                of this title.
    (d) Tracking of Rebates and Expenditures.--Of the amount provided 
under subsection (a), not more than $150,000,000 shall be used for 
costs associated with database systems to track rebates and 
expenditures under this title and related administrative costs incurred 
by the Secretary.
    (e) Public Education and Coordination.--Of the amount provided 
under subsection (a), not more than $10,000,000 shall be used for costs 
associated with public education and coordination with the Federal 
Energy Star program incurred by the Administrator.
    (f) Indian Tribes.--Of the amount provided under subsection (a), 
the Secretary shall reserve not more than 3 percent to make grants 
available to Indian tribes under this section.
    (g) Silver Star Home Energy Retrofit Program.--
            (1) In general.--In the case of the Silver Star Home Energy 
        Retrofit Program, of the amount provided under subsection (a) 
        after funds are provided in accordance with subsections (b) 
        through (e), $2,751,000,000 for the 1-year period beginning on 
        the date of enactment of this Act (less any amounts required 
        under subsection (f)) shall be used by the Secretary to provide 
        rebates and incentives authorized under the Silver Star Home 
        Energy Retrofit Program.
            (2) Products purchased without installation services.--Of 
        the amounts made available for the Silver Star Home Energy 
        Retrofit Program under this section, not more than $250,000,000 
        shall be made available for rebates under section 106(e).
    (h) Gold Star Home Energy Retrofit Program.--In the case of the 
Gold Star Home Energy Retrofit Program, of the amount provided under 
subsection (a) after funds are provided in accordance with subsections 
(b) through (e), $1,349,000,000 for the 2-year period beginning on the 
date of enactment of this Act (less any amounts required under 
subsection (f)) shall be used by the Secretary to provide rebates and 
incentives authorized under the Gold Star Home Energy Retrofit Program.
    (i) Program Review and Backstop Funding.--
            (1) Review and analysis.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                perform a State-by-State analysis and review the 
                distribution of Home Star retrofit rebates under this 
                title.
                    (B) Rental units.--Not later than 120 days after 
                the date of enactment of this Act, the Secretary shall 
                perform a review and analysis, with input and review 
                from the Secretary of Housing and Urban Development, of 
                the procedures for delivery of services to rental 
                units.
            (2) Adjustment.--The Secretary may allocate technical 
        assistance funding to assist States that, as determined by the 
        Secretary--
                    (A) have not sufficiently benefitted from the Home 
                Star Retrofit Rebate Program; or
                    (B) in which rental units have not been adequately 
                served.
    (j) Return of Undisbursed Funds.--
            (1) Silver star home energy retrofit program.--If the 
        Secretary has not disbursed all the funds available for rebates 
        under the Silver Star Home Energy Retrofit Program by the date 
        that is 1 year after the date of enactment of this Act, any 
        undisbursed funds shall be made available to the Gold Star Home 
        Energy Retrofit Program.
            (2) Gold star home energy retrofit program.--If the 
        Secretary has not disbursed all the funds available for rebates 
        under the Gold Star Home Energy Retrofit Program by the date 
        that is 2 years after the date of enactment of this Act, any 
        undisbursed funds shall be returned to the Treasury.
    (k) Financing.--Of the amounts allocated to the States under 
subsection (b), not less than $200,000,000 shall be used to carry out 
the financing provisions of this title in accordance with section 114.

       TITLE II--PERFORMANCE BASED ENERGY IMPROVEMENT TAX CREDITS

SEC. 201. PERFORMANCE BASED ENERGY IMPROVEMENTS FOR NONBUSINESS 
              PROPERTY.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. PERFORMANCE BASED ENERGY IMPROVEMENTS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 50 percent of the amount of qualified 
home energy efficiency expenditures paid or incurred by the taxpayer 
during the taxable year.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--
                    ``(A) In general.--The amount of the credit allowed 
                under subsection (a) with respect to any individual for 
                any taxable year shall not exceed the amount determined 
                under subparagraph (B) with respect to the principal 
                residence of such individual.
                    ``(B) Amount determined.--
                            ``(i) In general.--Subject to clause (iv), 
                        the amount determined under this subparagraph 
                        is the base amount increased by the amount 
                        determined under clause (iii).
                            ``(ii) Base amount.--For purposes of this 
                        subparagraph, the base amount is--
                                    ``(I) $3,000, in the case of a 
                                residence the construction of which is 
                                completed before January 1, 2000, and
                                    ``(II) $2,000, in the case of a 
                                residence the construction of which is 
                                completed after December 31, 1999.
                            ``(iii) Increase amount.--The amount 
                        determined under this clause is--
                                    ``(I) in the case of a residence 
                                described in clause (ii)(I) which has a 
                                rating system score equal to the rating 
                                system score which corresponds to the 
                                IECC Standard Reference Design for a 
                                home of the size and in the climate 
                                zone of such residence, $1,000, and
                                    ``(II) in the case of any residence 
                                with a rating system score which is 
                                lower than that which corresponds to 
                                such IECC Standard Reference Design by 
                                not less than 5 points, $500 for each 5 
                                points by which the rating system score 
                                which corresponds to such IECC Standard 
                                Reference Design exceeds the rating 
                                system score of such residence (in 
                                addition to the amount provided under 
                                clause (i), if applicable).
                            ``(iv) Limitation.--In no event shall the 
                        amount determined under this subparagraph 
                        exceed $8,000 with respect to any individual.
            ``(2) Limitation based on amount of tax.--In the case of 
        taxable years to which section 26(a)(2) does not apply, the 
        credit allowed under subsection (a) for any taxable year shall 
        not exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section and sections 23, 24, 
                and 25B) and section 27 for the taxable year.
    ``(c) Qualified Home Energy Efficiency Expenditures.--For purposes 
of this section--
            ``(1) In general.--The term `qualified home energy 
        efficiency expenditures' means any amount paid or incurred for 
        a qualified whole home energy efficiency retrofit, including 
        the cost of audit diagnostic procedures, of a principal 
        residence of the taxpayer which is located in the United 
        States.
            ``(2) Qualified whole home energy efficiency retrofit.--
                    ``(A) In general.--The term `qualified whole home 
                energy efficiency retrofit' means a retrofit of an 
                existing residence if, after such retrofit, such 
                residence--
                            ``(i) has a rating system score of not 
                        greater than--
                                    ``(I) 100, determined under the 
                                HERS Index, in the case of a residence 
                                the construction of which is completed 
                                before January 1, 2000, and
                                    ``(II) the rating system score 
                                which corresponds to the IECC Standard 
                                Reference Design for a home of the size 
                                and in the climate zone of such 
                                residence, in the case of a residence 
                                the construction of which is completed 
                                after December 31, 1999, or
                            ``(ii) achieves a degree of energy 
                        efficiency improvement which is equivalent to 
                        the standard applicable to such residence under 
                        clause (i), as determined by the Secretary.
                For purposes of the preceding sentence, the HERS Index 
                is the HERS Index established by the Residential Energy 
                Services Network, as in effect on January 1, 2011.
                    ``(B) Accreditation rule.--A retrofit shall not be 
                treated as a qualified whole home energy efficiency 
                retrofit unless such retrofit is conducted by a company 
                which is accredited by the Building Performance 
                Institute, or which fulfills an equivalent standard as 
                determined by the Secretary.
                    ``(C) Determination of rating system score or 
                equivalent.--
                            ``(i) In general.--Subject to clause (ii), 
                        the rating system score of a residence, or the 
                        equivalent described in subparagraph (A)(ii), 
                        shall be determined by an auditor or rater 
                        certified by the Residential Energy Services 
                        Network or the Building Performance Institute.
                            ``(ii) Secretarial determination.--At the 
                        discretion of the Secretary, the Secretary may, 
                        in consultation with the Secretary of Energy, 
                        determine an alternative standard for 
                        certification of an auditor or rater for 
                        purposes of determining the rating system score 
                        (or equivalent described in subparagraph 
                        (A)(ii)) of a residence. If the Secretary 
                        establishes such an alternative standard, 
                        clause (i) shall cease to apply unless the 
                        Secretary determines otherwise.
                    ``(D) Regulations.--Not later than December 31, 
                2011, in consultation with the Secretary, the Secretary 
                of Energy shall prescribe regulations which specify the 
                costs with respect to energy improvements which may be 
                taken into account under this paragraph as part of a 
                qualified whole home energy efficiency retrofit.
            ``(3) No double benefit.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year in which the taxpayer 
                elects the credit under section 25C.
                    ``(B) No double benefit for certain expenditures.--
                The term `qualified home energy efficiency 
                expenditures' shall not include any expenditure for 
                which a deduction or credit is otherwise allowed to the 
                taxpayer under this chapter for the taxable year or 
                with respect to which the taxpayer receives any Federal 
                rebate.
            ``(4) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121, except that--
                    ``(A) no ownership requirement shall be imposed, 
                and
                    ``(B) the period for which a building is treated as 
                used as a principal residence shall also include the 
                60-day period ending on the 1st day on which it would 
                (but for this subparagraph) first be treated as used as 
                a principal residence.
    ``(d) Rating System Score.--For purposes of this section--
            ``(1) In general.--Subject to paragraph (2), the rating 
        system score shall be the score assigned under the HERS Index 
        established by the Residential Energy Services Network.
            ``(2) Secretarial determination.--At the discretion of the 
        Secretary, the Secretary may, in consultation with the 
        Secretary of Energy, determine an alternative rating system 
        (including an alternative system based on the HERS Index 
        established by the Residential Energy Services Network). If the 
        Secretary establishes such an alternative rating system, the 
        rating system score with respect to any residence shall be the 
        score assigned under such alternative rating system.
    ``(e) IECC Standard Reference Design.--
            ``(1) In general.--The term `IECC Standard Reference 
        Design' means the Standard Reference Design determined under 
        the International Energy Conservation Code in effect for the 
        taxable year in which the credit under this section is 
        determined.
            ``(2) Limitation to residences constructed after effective 
        date of most recent code.--No credit shall be allowed under 
        this section with respect to a principal residence the 
        construction of which is completed after the effective date of 
        the International Energy Conservation Code in effect for the 
        taxable year for which such credit would otherwise be 
        determined.
    ``(f) Special Rules.--For purposes of this section, rules similar 
to the rules under paragraphs (4), (5), (6), (7), and (8) of section 
25D(e) and section 25C(e)(2) shall apply.
    ``(g) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section with respect to any expenditure 
with respect to any property, the increase in the basis of such 
property which would (but for this subsection) result from such 
expenditure shall be reduced by the amount of the credit so allowed.
    ``(h) Election Not To Claim Credit.--This section shall not apply 
to a taxpayer for any taxable year if such taxpayer elects to have this 
section not apply for such taxable year.
    ``(i) Termination.--This section shall not apply with respect to 
any costs paid or incurred after December 31, 2013.''.
    (b) Conforming Amendments.--
            (1) Section 26(a)(1) of the Internal Revenue Code of 1986 
        is amended by inserting ``25E,'' after ``25D''.
            (2) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period at 
        the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(38) to the extent provided in section 25E(g).''.
            (3) Section 6501(m) of such Code is amended by inserting 
        ``25E(h),'' after ``section''.
            (4) The table of sections for subpart A of part IV of 
        subchapter A chapter 1 of such Code is amended by inserting 
        after the item relating to section 25D the following new item:

``Sec. 25E. Performance based energy improvements.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2010.
                                 <all>