[Congressional Record (Bound Edition), Volume 161 (2015), Part 8]
[House]
[Pages 11441-11443]
[From the U.S. Government Publishing Office, www.gpo.gov]




               PRIVATE INVESTMENT IN HOUSING ACT OF 2015

  Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 2997) to authorize the Secretary of Housing and Urban 
Development to carry out a demonstration program to enter into budget-
neutral, performance-based contracts for energy and water conservation 
improvements for multifamily residential units.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2997

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Private Investment in 
     Housing Act of 2015''.

     SEC. 2. BUDGET-NEUTRAL DEMONSTRATION PROGRAM FOR ENERGY AND 
                   WATER CONSERVATION IMPROVEMENTS AT MULTIFAMILY 
                   RESIDENTIAL UNITS.

       (a) Establishment.--The Secretary of Housing and Urban 
     Development (in this section referred to as the 
     ``Secretary'') shall establish a demonstration program under 
     which the Secretary may execute budget-neutral, performance-
     based agreements in fiscal years 2016 through 2019 that 
     result in a reduction in energy or water costs with such 
     entities as the Secretary determines to be appropriate under 
     which the entities shall carry out projects for energy or 
     water conservation improvements at not more than 20,000 
     residential units in multifamily buildings participating in--
       (1) the project-based rental assistance program under 
     section 8 of the United States Housing Act of 1937 (42 U.S.C. 
     1437f), other than assistance provided under section 8(o) of 
     that Act;
       (2) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959 (12 U.S.C. 1701q); or
       (3) the supportive housing for persons with disabilities 
     program under section 811(d)(2) of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 8013(d)(2)).
       (b) Requirements.--
       (1) Payments contingent on savings.--
       (A) In general.--The Secretary shall provide to an entity a 
     payment under an agreement under this section only during 
     applicable years for which an energy or water cost savings is 
     achieved with respect to the applicable multifamily portfolio 
     of properties, as determined by the Secretary, in accordance 
     with subparagraph (B).
       (B) Payment methodology.--
       (i) In general.--Each agreement under this section shall 
     include a pay-for-success provision that--

       (I) shall serve as a payment threshold for the term of the 
     agreement; and
       (II) requires that payments shall be contingent on realized 
     cost savings associated with reduced utility consumption in 
     the participating properties.

       (ii) Limitations.--A payment made by the Secretary under an 
     agreement under this section--

       (I) shall be contingent on documented utility savings; and

[[Page 11442]]

       (II) shall not exceed the utility savings achieved by the 
     date of the payment, and not previously paid, as a result of 
     the improvements made under the agreement.

       (C) Third-party verification.--Savings payments made by the 
     Secretary under this section shall be based on a measurement 
     and verification protocol that includes at least--
       (i) establishment of a weather-normalized and occupancy-
     normalized utility consumption baseline established pre-
     retrofit;
       (ii) annual third-party confirmation of actual utility 
     consumption and cost for utilities;
       (iii) annual third-party validation of the tenant utility 
     allowances in effect during the applicable year and vacancy 
     rates for each unit type; and
       (iv) annual third-party determination of savings to the 
     Secretary.

     An agreement under this section with an entity shall provide 
     that the entity shall cover costs associated with third-party 
     verification under this subparagraph.
       (2) Terms of performance-based agreements.--A performance-
     based agreement under this section shall include--
       (A) the period that the agreement will be in effect and 
     during which payments may be made, which may not be longer 
     than 12 years;
       (B) the performance measures that will serve as payment 
     thresholds during the term of the agreement;
       (C) an audit protocol for the properties covered by the 
     agreement;
       (D) a requirement that payments shall be contingent on 
     realized cost savings associated with reduced utility 
     consumption in the participating properties; and
       (E) such other requirements and terms as determined to be 
     appropriate by the Secretary.
       (3) Entity eligibility.--The Secretary shall--
       (A) establish a competitive process for entering into 
     agreements under this section; and
       (B) enter into such agreements only with entities that, 
     either jointly or individually, demonstrate significant 
     experience relating to--
       (i) financing or operating properties receiving assistance 
     under a program identified in subsection (a);
       (ii) oversight of energy or water conservation programs, 
     including oversight of contractors; and
       (iii) raising capital for energy or water conservation 
     improvements from charitable organizations or private 
     investors.
       (4) Geographical diversity.--Each agreement entered into 
     under this section shall provide for the inclusion of 
     properties with the greatest feasible regional and State 
     variance.
       (5) Properties.--A property may only be included in the 
     demonstration under this section only if the property is 
     subject to affordability restrictions for at least 15 years 
     after the date of the completion of any conservation 
     improvements made to the property under the demonstration 
     program. Such restrictions may be made through an extended 
     affordability agreement for the property under a new housing 
     assistance payments contract with the Secretary of Housing 
     and Urban Development or through an enforceable covenant with 
     the owner of the property.
       (c) Plan and Reports.--
       (1) Plan.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committees on Appropriations and Financial Services of the 
     House of Representatives and the Committees on Appropriations 
     and Banking, Housing, and Urban Affairs of the Senate a 
     detailed plan for the implementation of this section.
       (2) Reports.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     shall--
       (A) conduct an evaluation of the program under this 
     section; and
       (B) submit to Congress a report describing each evaluation 
     conducted under subparagraph (A).
       (d) Funding.--For each fiscal year during which an 
     agreement under this section is in effect, the Secretary may 
     use to carry out this section any funds appropriated to the 
     Secretary for the renewal of contracts under a program 
     described in subsection (a).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Luetkemeyer) and the gentlewoman from California (Ms. 
Maxine Waters) each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may 
consume.
  Today, I rise in support of H.R. 2997, the Private Investment in 
Housing Act of 2015. This bill, introduced by my colleague, the 
gentleman from Florida (Mr. Ross), would authorize the Secretary of 
Housing and Urban Development to establish a demonstration program to 
make assisted multifamily properties more energy and water efficient at 
no cost to U.S. taxpayers.
  Currently, HUD spends in excess of
$7 billion in annual energy and water costs for HUD-assisted 
properties. These properties are generally older, with inefficient 
energy and water usage. In most cases, owners of these older assisted 
properties lack the capital to modernize their buildings to perform 
energy and water efficiency.
  H.R. 2997 would create a demonstration for no more than 20,000 
assisted units where HUD would enter into agreements with 
intermediaries--most likely, nonprofit entities--to produce energy and 
water efficiency in exchange for a share of the savings.
  This demonstration and the subsequent contract with the intermediary 
would allow these entities to raise capital from private investors and 
foundations. HUD would not provide upfront capital investments for any 
energy retrofits and there would be no risk to the Federal Government.
  Savings due to the retrofits, verified by an independent third party, 
would then result in HUD remitting a portion of the savings back to the 
intermediaries. If savings are not realized, the loss is absorbed by 
the private investors or foundations.
  Mr. Speaker, H.R. 2997 is an example of the public-private 
partnership innovation needed to attract capital investment to our 
public- and assisted-housing stock. This demonstration, in addition to 
the Rental Assistance Demonstration program, is the beginning of 
bipartisan legislative initiatives to bring private sector resources 
and management to affordable housing for low- and very low-income 
families.
  As chairman of the Housing and Insurance Subcommittee of the 
Financial Services Committee, I am working with Members on both sides 
of the aisle to develop legislation similar to H.R. 2997, which would 
make the operations of HUD and its programs more efficient. Today's 
bill is a step in that direction.
  In addition to the sponsor, Representative Ross, I want to thank the 
ranking member of the Housing and Insurance Subcommittee, Mr. Cleaver, 
along with Representatives Himes of Connecticut and Delaney of 
Maryland, for their hard work on this legislation.
  I urge all Members to support H.R. 2997, and I reserve the balance of 
my time.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, this bill would create a pilot program within HUD which 
would allow for energy and water efficiency upgrades to be made to 
certain private multifamily HUD properties at no cost to the 
government.
  Under this innovative pilot program, investors would provide all of 
the upfront capital to make the improvements, and they would only get 
paid based on a portion of the cost savings that result from the 
improvements. If there are no cost savings, the losses would be 
completely on the investors, not HUD or the taxpayers.
  This is a rare win-win situation. HUD and taxpayers benefit from cost 
savings; tenants benefit from the improvements made to their homes; 
investors benefit from the profits, and of course, the environment 
benefits from the more responsible use of natural resources.
  This bill also ensures accountability by requiring a third-party 
evaluation to verify any cost savings and also by requiring the 
Secretary to report on the outcomes of the pilot within a year of 
enactment.
  There is simply no reason for bipartisan bickering on a bill like 
this. I urge my colleagues to support this bill, and I reserve the 
balance of my time.
  Mr. LUETKEMEYER. Mr. Speaker, I yield such time as he may consume to 
the gentleman from Florida (Mr. Ross), a distinguished member of the 
Housing and Insurance Subcommittee.

[[Page 11443]]


  Mr. ROSS. Mr. Speaker, I thank the chairman and Ranking Member Waters 
for their support.
  As the chairman pointed out, currently, HUD spends more than $7 
billion annually in energy and water costs. In our current fiscal 
environment, we must look to new technology and for innovative 
solutions to generate savings for both taxpayers and the Federal 
Government.
  Today, I am proud to ask my colleagues to join me in supporting 
bipartisan H.R. 2997, the Private Investment and Housing Act. This 
legislation will establish a demonstration project that will encourage 
private sector entities to retrofit and modernize a limited number of 
HUD multifamily housing units at absolutely no cost to taxpayers.
  This legislation is necessary because nonprofits and other entities 
that focus on financing for affordable housing are unable to enter into 
contractual agreements to retrofit HUD multifamily housing units. 
Imagine leveraging private capital to enhance the livability and 
inhabitability of affordable housing at no cost to the taxpayers or the 
Federal Government.
  It doesn't involve any risk to the Federal Government or the 
taxpayer. In fact, investors take the first loss position on energy 
upgrades. If energy savings from these projects are not realized after 
private entities enter these contracts, the Federal Government does not 
pay anything, period.
  If savings through these projects are achieved, they would lower 
HUD's energy expenditures by as much as 20 percent, creating tremendous 
savings for the taxpayer. Private entities who take on the risk to 
retrofit these units will receive a $1 return for every $1 in cost 
savings that are verified by a third party.
  The demonstration program created by this legislation would help 
improve up to 20,000 HUD-assisted apartments receiving project-based 
rental assistance, supportive housing for the elderly, or supportive 
housing for persons with disabilities.
  The demonstration projects will help a limited number of people at 
first in Florida and across the country. However, over time, once it is 
a proven success, more than 48,000 eligible properties in the State of 
Florida and the 900 units in my district alone may be able to benefit, 
again, at no expense to the taxpayer.
  In addition to the direct economic benefits to taxpayers, these 
upgrades will bring meaningful health and other benefits to the 
families living in the buildings, creating a healthier and safer 
environment for residents.
  I want to thank my colleagues, Representative Jim Himes; 
Representative Emanuel Cleaver, ranking member of the subcommittee; and 
Representative John Delaney, for their support on this legislation.
  I also want to thank Enterprise Community Partners for their support 
of this legislation and for the support of projects that encourage a 
public-private partnership in affordable housing.
  I ask you join me in supporting this legislation to engage the 
private sector to help HUD reduce their annual $7 billion in energy and 
water spending.
  Ms. MAXINE WATERS of California. Mr. Speaker, I urge support, and I 
yield back the balance of my time.
  Mr. LUETKEMEYER. Mr. Speaker, I encourage support for H.R. 2997. I 
think it is a great idea to, again, go into a public-private 
partnership and utilize that as an opportunity, again, at no cost to 
the taxpayers.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the 
rules and pass the bill, H.R. 2997.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. LUETKEMEYER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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