Loan program for energy efficiency upgrades to existing buildings

Title XVII of the Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.) is amended by adding at the end the following:

1706.

Building retrofit financing program

(a)

Definitions

In this section: (1)

Credit support

The term credit support means a guarantee or commitment to issue a guarantee or other forms of credit enhancement to ameliorate risks for efficiency obligations. (2)

Efficiency obligation

The term efficiency obligation means a debt or repayment obligation incurred in connection with financing a project, or a portfolio of such debt or repayment obligations. (3)

Project

The term project means the installation and implementation of efficiency, advanced metering, distributed generation, or renewable energy technologies and measures for a building (or for multiple buildings on a given property) that are expected to increase the energy efficiency of the building (including fixtures) in accordance with criteria established by the Secretary. (b)

Eligible projects

(1)

In general

Notwithstanding sections 1703 and 1705, the Secretary may provide credit support under this section, in accordance with section 1702. (2)

Inclusions

Buildings eligible for credit support under this section include commercial, multifamily residential, industrial, municipal, government, institution of higher education, school, and hospital facilities that satisfy criteria established by the Secretary. (c)

Guidelines

(1)

In general

Not later than 180 days after the date of enactment of this section, the Secretary shall— (A)establish guidelines for credit support provided under this section; (B)publish the guidelines in the Federal Register; and (C)provide for an opportunity for public comment on the guidelines. (2)

Requirements

The guidelines established by the Secretary under this subsection shall include— (A)standards for assessing the energy savings that could reasonably be expected to result from a project; (B)examples of financing mechanisms (and portfolios of such financing mechanisms) that qualify as efficiency obligations; (C)the threshold levels of energy savings that a project, at the time of issuance of credit support, shall be reasonably expected to achieve to be eligible for credit support; (D)the eligibility criteria the Secretary determines to be necessary for making credit support available under this section; and (E)notwithstanding subsections (d)(3) and (g)(2)(B) of section 1702, any lien priority requirements that the Secretary determines to be necessary, in consultation with the Director of the Office of Management and Budget, which may include— (i)mechanisms to preserve prior lien positions of mortgage lenders and other creditors in buildings eligible for credit support; (ii)remedies available to the Secretary under chapter 176 of title 28, United States Code, in the event of default on the efficiency obligation by the borrower; and (iii)measures to limit the exposure of the Secretary to financial risk in the event of default, such as— (I)the collection of a credit subsidy fee from the borrower as a loan loss reserve, taking into account the limitation on credit support under subsection (d); (II)minimum debt-to-income levels of the borrower; (III)minimum levels of value relative to outstanding mortgage or other debt on a building eligible for credit support; (IV)allowable thresholds for the percent of the efficiency obligation relative to the amount of any mortgage or other debt on an eligible building; (V)analysis of historic and anticipated occupancy levels and rental income of an eligible building; (VI)requirements of third-party contractors to guarantee energy savings that will result from a retrofit project, and whether financing on the efficiency obligation will amortize from the energy savings; (VII)requirements that the retrofit project incorporate protocols to measure and verify energy savings; and (VIII)recovery of payments equally by the Secretary and the retrofit. (3)

Efficiency obligations

The financing mechanisms qualified by the Secretary under paragraph (2)(B) may include— (A)loans, including loans made by the Federal Financing Bank; (B)power purchase agreements, including energy efficiency power purchase agreements; (C)energy services agreements, including energy performance contracts; (D)property assessed clean energy bonds and other tax assessment-based financing mechanisms; (E)aggregate on-meter agreements that finance retrofit projects; and (F)any other efficiency obligations the Secretary determines to be appropriate. (4)

Priorities

In carrying out this section, the Secretary shall prioritize— (A)the maximization of energy savings with the available credit support funding; (B)the establishment of a clear application and approval process that allows private building owners, lenders, and investors to reasonably expect to receive credit support for projects that conform to guidelines; (C)the distribution of projects receiving credit support under this section across States or geographical regions of the United States; and (D)projects designed to achieve whole-building retrofits. (d)

Limitation

Notwithstanding section 1702(c), the Secretary shall not issue credit support under this section in an amount that exceeds— (1)90 percent of the principal amount of the efficiency obligation that is the subject of the credit support; or (2)$25,000,000 for any single project. (e)

Aggregation of projects

To the extent provided in the guidelines developed in accordance with subsection (c), the Secretary may issue credit support on a portfolio, or pool of projects, that are not required to be geographically contiguous, if each efficiency obligation in the pool fulfills the requirements described in this section. (f)

Application

(1)

In general

To be eligible to receive credit support under this section, the applicant shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary determines to be necessary. (2)

Contents

An application submitted under this section shall include assurances by the applicant that— (A)each contractor carrying out the project meets minimum experience level criteria, including local retrofit experience, as determined by the Secretary; (B)the project is reasonably expected to achieve energy savings, as set forth in the application using any methodology that meets the standards described in the program guidelines; (C)the project meets any technical criteria described in the program guidelines; (D)the recipient of the credit support and the parties to the efficiency obligation will provide the Secretary with— (i)any information the Secretary requests to assess the energy savings that result from the project, including historical energy usage data, a simulation-based benchmark, and detailed descriptions of the building work, as described in the program guidelines; and (ii)permission to access information relating to building operations and usage for the period described in the program guidelines; and (E)any other assurances that the Secretary determines to be necessary. (3)

Determination

Not later than 90 days after receiving an application, the Secretary shall make a final determination on the application, which may include requests for additional information. (g)

Fees

(1)

In general

In addition to the fees required by section 1702(h)(1), the Secretary may charge reasonable fees for credit support provided under this section. (2)

Availability

Fees collected under this section shall be subject to section 1702(h)(2). (h)

Underwriting

The Secretary may delegate the underwriting activities under this section to 1 or more entities that the Secretary determines to be qualified. (i)

Status report

Not later than 1 year after commencement of the program, the Secretary shall submit to the Congress a report that describes in reasonable detail— (1)the manner in which this section is being carried out; (2)the number and type of projects supported; (3)the types of funding mechanisms used to provide credit support to projects; (4)the energy savings expected to result from projects supported by this section; (5)any tracking efforts the Secretary is using to calculate the actual energy savings produced by the projects; and (6)any plans to improve the tracking efforts described in paragraph (5). (j)

Buy American report

The Secretary shall submit to the Congress an annual report that estimates the percentage of American-made materials used in conducting retrofit activities funded pursuant to this section. (k)

Funding

(1)

Authorization of appropriations

There are authorized to be appropriated to carry out this section $15,000,000,000 for the period encompassing fiscal years 2012 through 2021. (2)

Administrative costs

Not more than 1 percent of any amounts made available to the Secretary for carrying out this section may be used by the Secretary for administrative costs incurred in carrying out this section.