[Congressional Record Volume 156, Number 82 (Thursday, May 27, 2010)]
[Senate]
[Pages S4531-S4539]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By 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):
  S. 3434. A bill to provide for the establishment of a Home Star 
Retrofit Rebate Program, and for other purposes; to the Committee on 
Finance.
  Mr. BINGAMAN. Mr. President, I rise to introduce the Home Star Energy 
Retrofit Act of 2010 and to recognize the original cosponsors of the 
bill: Senator Warner, Senator Graham, Senator Snowe, Senator Sanders, 
Senator Brown of Massachusetts, Senator Merkley, Senator Stabenow, 
Senator Dodd, Senator Gillibrand, Senator Carper, Senator Pryor and 
Senator Harkin. This innovative legislation will save consumers money, 
create American skilled labor jobs, and reduce home energy consumption.
  If enacted, HOME STAR will build on existing policies and initiatives 
that have already proved effective. The program is supported by a broad 
coalition of over 600 groups including construction contractors, 
building products and mechanical manufacturers, retail sales 
businesses, environmental groups and labor advocates.
  HOME STAR will provide point-of-sale instant savings to encourage 
homeowners to install residential energy upgrades such as air sealing, 
insulation, and high efficiency furnaces and water heaters.
  HOME STAR incorporates a two-tiered approach that will offer 
flexibility to homeowners when choosing efficiency improvements to 
install. Under the Silver Star program, rebates averaging $1,000 will 
be offered for the installation of each eligible energy-saving measure 
such as new insulation and high-efficiency heating and cooling systems, 
up to maximum of $3,000 per home. Under the Gold Star program, there 
will be performance-based grants of $3,000 for a 20 percent reduction 
in home energy consumption and $1,000 for each additional 5 percent of 
verified energy reduction as determined by a comparison of the energy 
consumption of the home before and after the retrofit.
  In addition to the short-term rebate programs in Home Star, our 
revised bill includes longer term efficiency tax policies to maintain 
the momentum for energy efficient home retrofits. These performance-
based energy improvement tax credits will encourage the continuation of 
Gold Star-type whole home retrofits.
  HOME STAR will create American jobs in the construction industry, 
which has lost 1.6 million jobs since December 2007, with unemployment 
rates topping 25 percent in some regions. HOME STAR leverages private 
investment to create a strong market for home energy retrofits, and 
will put hundreds of thousands of unemployed Americans back to work as 
well as stimulating demand for building materials produced by American 
factories.
  Finally, HOME STAR will reduce home energy consumption and dependence 
on foreign oil. HOME STAR helps Americans pay for cost-effective home 
improvements, create permanent reductions in household energy bills, 
and reduce our national carbon footprint. Residential energy efficiency 
improvements covered by the HOME STAR program reduce energy waste in 
most homes by 20 to 40 percent. When combined with low-interest 
financing, these retrofits can be cash-flow positive upon project 
completion. An initiative with a potential to retrofit over 3 million 
homes, HOME STAR will achieve significant reductions in building-
related greenhouse gas emissions while generating long-term energy 
savings for American consumers and reducing energy usage by an amount 
equal to four 300 megawatt power plants.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3434

       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.

[[Page S4532]]

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.

[[Page S4533]]

       (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--

[[Page S4534]]

       (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.

[[Page S4535]]

       (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.

[[Page S4536]]

     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; and
       (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

[[Page S4537]]

     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

[[Page S4538]]

       (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

[[Page S4539]]

       ``(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.
                                 ______