[Senate Report 111-307]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 593
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-307

======================================================================



 
               ENERGY-EFFICIENT MANUFACTURED HOUSING ACT





                                _______
                                

               September 27, 2010.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1320]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1320) to provide assistance to owners of 
manufactured homes constructed before January 1, 1976, to 
purchase Energy Star-qualified manufactured homes, having 
considered the same, reports favorably thereon with an 
amendment and an amendment to the title and recommends that the 
bill, as amended, do pass.
    The amendments are as follows:
    1. Strike out all after the enacting clause and insert in 
lieu thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Energy-Efficient Manufactured 
Housing Act of 2010''.

SEC. 2. ENERGY-EFFICIENT MANUFACTURED HOMES.

    (a) Definitions.--In this section:
          (1) Dated manufactured home.--The term ``dated manufactured 
        home'' means a manufactured home constructed before January 1, 
        1976.
          (2) Energy star-qualified manufactured home.--
                  (A) In general.--The term ``Energy Star-qualified 
                manufactured home'' means a manufactured home that has 
                been designed, produced, and installed in accordance 
                with Energy Star guidelines by an Energy Star-certified 
                entity.
                (B) Inclusion.--The term ``Energy Star-qualified 
                manufactured home'' includes single-and multi-section 
                manufactured homes.
          (3) Manufactured home.--The term ``manufactured home'' has 
        the meaning given the term in section 603 of the National 
        Manufactured Housing Construction and Safety Standards Act of 
        1974 (42 U.S.C. 5402).
          (4) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.
    (b) Purpose.--The purpose of this section is to assist low-income 
households residing in dated manufactured homes to save energy and 
energy expenditures by providing support toward the purchase of new 
Energy Star-qualified manufactured homes.
    (c) Grants to State Agencies.--
          (1) In general.--The Secretary may provide grants under this 
        section to--
                  (A) the State agency responsible for developing State 
                energy conservation plans under section 362 of the 
                Energy Policy and Conservation Act (42 U.S.C. 6322) in 
                each State; or
                  (B) such other State agency carrying out a similar 
                activity as the Governor of the State may designate.
          (2) Requirements.--
                  (A) Priority.--In providing grants under this 
                section, the Secretary shall give priority to States 
                that, as determined by the Secretary--
                          (i) have a high percentage of dated 
                        manufactured homes relative to the existing 
                        manufactured housing stock of the State;
                          (ii) would experience substantial energy 
                        gains and returns on investment on replacement 
                        of dated manufactured homes;
                          (iii) have a high percentage of counties with 
                        fewer than 6 residents per square mile;
                          (iv) have the infrastructure or planned 
                        infrastructure necessary to replace dated 
                        manufactured homes in the State; or
                          (v) act in partnership with providers of 
                        affordable lending products that enable buyers 
                        to build wealth.
                  (B) Failure by states to act.--If a State agency 
                fails to use any portion of grant provided under this 
                subsection during the 1-year period beginning on the 
                date of receipt of the grant--
                          (i) the unused amount of the grant shall 
                        revert to the Secretary; and
                          (ii) the Secretary may distribute the amount 
                        to any individual or entity on a first-come, 
                        first-served basis.
          (3) Use of funds.--A State agency shall use a grant provided 
        under paragraph (1) to provide to owners of dated manufactured 
        homes in the State in accordance with paragraph (4)--
                  (A) grants or loans to use toward the purchase of new 
                Energy Star-qualified manufactured homes in the State; 
                and
                  (B) rebates or grants for the decommission of dated 
                manufactured homes.
          (4) Rebates, grants, and loans.--
                  (A) Amount.--
                          (i) Grant or loan.--Subject to clause (iii), 
                        the amount of a grant or loan provided to an 
                        owner by a State agency under this subsection 
                        shall not exceed, for a single manufactured 
                        home, $7,500 of the amount provided to the 
                        State agency pursuant to this subsection.
                          (ii) Decommission assistance.--Subject to 
                        clause (iii), the amount of decommission 
                        assistance rebate or grant provided to an owner 
                        by a State agency under this subsection shall 
                        not exceed, for a single manufactured home, 
                        $2,500 of the amount provided to the State 
                        agency pursuant to this subsection.
                          (iii) Use of state funds.--A State agency may 
                        supplement the amount of a rebate, grant, or 
                        loan provided under this subsection using State 
                        or other funds (including private donations and 
                        grants or loans) by such amount as the State 
                        agency determines to be appropriate.
                  (B) Primary residence requirement.--A rebate, grant, 
                or loan under this subsection may be made only to an 
                owner of a dated manufactured home that has been used 
                as the primary residence of the owner on a year-round 
                basis for at least the 12 previous months.
                  (C) Destruction and replacement.--
                          (i) In general.--A grant or loan under this 
                        subsection may be made only if the applicable 
                        dated manufactured home will be--
                                  (I) destroyed (including appropriate 
                                recycling); and
                                  (II) replaced, in an appropriate area 
                                (as determined by the applicable State 
                                agency), with an Energy Star-qualified 
                                manufactured home.
                          (ii) Verification.--The Secretary shall 
                        establish such third-party verification 
                        requirements as are necessary to ensure that 
                        the requirements of clause (i) are met.
                  (D) Single grant or loan.--A grant or loan under this 
                subsection may not be provided to any owner of a dated 
                manufactured home that was or is a member of a 
                household for which any member of the household was 
                provided a grant or loan pursuant to this subsection.
                  (E) Decommission rebate or grant.--A decommission 
                rebate or grant under this subsection may be made only 
                if--
                          (i) the applicable dated manufactured home 
                        will be destroyed (including appropriate 
                        recycling);
                          (ii) proof of decommission is shown before 
                        the rebate or grant funds are paid; and
                          (iii) no member of the applicable household 
                        was provided a grant or loan pursuant to this 
                        subsection.
                  (F) Eligible households.--To be eligible to receive a 
                rebate, grant, or loan under this subsection, an owner 
                of a dated manufactured home shall demonstrate to the 
                applicable State agency that the total income of all 
                members of the household of the owner does not exceed 
                the greater of, as determined by the Secretary--
                          (i) 200 percent of the most recent annual 
                        Federal Poverty Income Guidelines published by 
                        the Department of Health and Human Services; or
                          (ii) 80 percent of the area median income in 
                        the applicable area, as determined by the 
                        Secretary.
                  (G) Eligible financing.--
                          (i) In general.--As a condition on receipt of 
                        a grant or loan under this subsection, a 
                        homeowner shall
                                  (I) assume a mortgage or personal 
                                property loan that maximizes the 
                                ability of the homeowner to stay in the 
                                new manufactured home, minimize 
                                default, and build equity; and
                                  (II)(aa) own the land on which the 
                                manufactured home is sited; or
                                  (bb) have a land-lease on the land on 
                                which the manufactured home is sited of 
                                not less than the longer of 10 years or 
                                the length of the mortgage term.
                          (ii) Other leases.--A homeowner shall be 
                        considered to have satisfied clause (i)(II)(bb) 
                        if the homeowner has--
                                  (I) a lease from a community land 
                                trust or nonprofit housing corporation; 
                                or
                                  (II) a proprietary lease (perpetual 
                                or renewable as a matter of right) by a 
                                cooperative or homeowner association 
                                that is owned or controlled by the 
                                homeowners.
          (5) Similar programs.--
                  (A) State programs.--Subjeet to the limitation 
                described in paragraph (4)(A), a State agency 
                conducting a program the purpose of which is to replace 
                dated manufactured homes with Energy Star-qualified 
                manufactured homes may use the amounts provided under 
                this subsection to support the program.
                  (B) Federal programs.--
                          (i) In general.--The Secretary shall seek to 
                        achieve the purpose of this section through 
                        similar Federal programs, including the 
                        American Recovery and Reinvestment Act of 2009 
                        (Public Law 111-5; 123 Stat. 115).
                          (ii) Conforming amendments.--Section 407 of 
                        the American Recovery and Reinvestment Act of 
                        2009 (Public Law 111-5; 123 Stat. 145) is 
                        amended by adding at the end the following:
    ``(f) Energy-Efficient Manufactured Homes.--Notwithstanding any 
restrictions in part A of title IV of the Energy Conservation and 
Production Act (42 U.S.C. 6861 et seq.), any amount made available 
under this Act for 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.) may be used for the 
replacement of pre-1976 substandard manufactured homes with Energy 
Star-qualified manufactured homes under the Energy-Efficient 
Manufactured Housing Act of 2010.''.
          (6) Administration.--
                  (A) Controls and procedures.--
                          (i) In general.--Each State agency that 
                        receives funding under this subsection shall 
                        establish such fiscal controls and accounting 
                        procedures as are sufficient, as determined by 
                        the Secretary, to ensure proper accounting for 
                        disbursements made from the funds and fund 
                        balances.
                          (ii) Requirement.--The controls and 
                        procedures established under clause (i) shall 
                        conform to generally accepted Federal 
                        accounting principles, as determined by the 
                        Secretary.
                  (B) Coordination with other state agencies.--A State 
                agency that receives funding under this subsection may 
                coordinate efforts and share funds for administration 
                with other State agencies involved in low-income 
                housing programs.
                  (C) Administrative expenses.--A State agency may use 
                not more than 10 percent of the funds provided to the 
                State agency under this subsection for administrative 
                expenses of the agency or nonprofit organizations in 
                carrying out a program under this subsection.
    (d) Authorization of Appropriations.--
          (1) In general.--There are authorized to be appropriated to 
        the Secretary such sums as are necessary to carry out this 
        section.
          (2) Administrative expenses.--Of the amounts available for 
        each fiscal year to carry out this section, the Secretary may 
        use not more than 5 percent to pay administrative expenses.

    2. Amend the title so as to read: ``To provide assistance 
to owners of substandard manufactured homes constructed before 
January 1, 1976, to purchase Energy Star-qualified manufactured 
homes.''.

                                Purpose

    The purpose of S. 1320 is to provide assistance to owners 
of manufactured homes constructed before January 1, 1976, to 
purchase Energy Star-qualified manufactured homes.

                          Background and Need

    More than two million families live in mobile homes that 
were built before the 1976 effective date of the federal code 
regulating the construction of manufactured homes. These pre-
code, substandard mobile homes are not energy efficient, 
burdening their owners with high energy bills.
    Manufactured housing is now an affordable, attractive, and 
safe option for many households. However, a number of pre-1976 
mobile homes are subject to serious health and safety concerns; 
they cannot be retrofitted to improve energy efficiency; and 
they have outlived their useful lives.
    On the basis of income, many pre-1976 mobile homeowners 
would qualify for the federal Weatherization Assistance 
Program. Of those homeowners with incomes of less than 200 
percent of the federal poverty established by the Department of 
Health and Human Services, the current income ceiling for the 
Weatherization Assistance Program, approximately 1.6 million 
reside in pre-1979 manufactured housing. Many of these homes 
are past their useful life and have high energy bills due to 
leaky roofs and windows, old appliances, or other structural 
problems. Therefore, it is usually not cost effective to 
weatherize these homes under the Weatherization Assistance 
Program or transfer funds available for weatherization under 
the Low Income Home Energy Assistance Program (LIHEAP).
    Regulations currently restrict energy assistance programs 
such as the Low Income Home Weatherization program and LIHEAP 
from replacing substandard mobile homes. Weatherization 
programs can choose to make efficiency improvements to these 
homes but since the homes are past their useful life, 
improvements cannot address the underlying problem of 
inadequate housing. As a result, owners of pre-1976 homes are 
excluded from federal energy efficiency improvement programs. 
In addition, these homeowners are ineligible for housing 
assistance as they are already homeowners.
    In order to address this gap in coverage, S. 1320 
authorizes the Secretary to establish a grant program 
administered by the State Energy offices to encourage the 
owners of pre-1976 substandard mobile homes to replace their 
homes with new energy efficient manufactured homes that meet 
the Manufactured Homes Construction and Safety Standards 
established by the Department of Housing and Urban Development 
in 1976 (part 3280 of title 24, Code of Federal Regulations, 
commonly known as the HUD Code) and Energy Star standards. 
Replacing pre-1976 homes with new, high quality Energy Star 
manufactured homes will generate energy savings averaging $1620 
per year for the homeowner. The bill also provides lending to 
help finance the replacement homes.

                          Legislative History

    S. 1320 was introduced by Senator Tester on June 22, 2009. 
The Committee on Energy and Natural Resources held a hearing on 
the bill on March 11, 2010. S. Hrg. 111-422. The Committee 
considered the bill and adopted an amendment in the nature of a 
substitute at its business meeting on July 21, 2010, and 
ordered the bill favorably reported, as amended, at its 
business meeting on August 5, 2010.
    Similar legislation, H.R. 1749, has been introduced in the 
House of Representatives, where it was jointly referred to the 
Committee on Energy and Commerce and the Committee on Financial 
Services. Similar legislation was also included as title II of 
the Home Star Energy Retrofit Act of 2010, H.R. 5019, which was 
reported by the House Committee on Energy and Commerce, H. 
Rept. 111-469, and passed the House of Representatives on May 
6, 2010.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on August 5, 2010, by voice vote of a quorum 
present, recommends that the Senate pass S. 1320, if amended as 
described herein.

                          Committee Amendment

    During its consideration of S. 1320, the Committee adopted 
an amendment in the nature of a substitute and an amendment to 
the title. The amendment in the nature of a substitute:
          (1) Replaces the bill's original allocation formula 
        with a requirement that the Secretary of Energy give 
        priority to 5 categories of States in making grants 
        under the bill;
          (2) Provides that if a State agency fails to use any 
        portion of a grant within one year, the unused amount 
        reverts to the Secretary for redistribution on a first-
        come, first-served basis;
          (3) Expands the use of grant funds to allow State 
        agencies to use grants to provide owners of dated 
        manufactured homes with grants or loans to use toward 
        the purchase of new Energy Star-qualifed manufactured 
        homes and rebates or grants to decommission dated 
        manufactured homes;
          (4) Limits the amount of a grant or loan for the 
        purchase of a single manufactured home to $7,500, and 
        for a rebate or grant for decommissioning assistance 
        for a single manufactured home to $2,500;
          (5) Adds third-party verification requirements to 
        ensure that grants or loans are made only if the 
        applicable dated manufactured home will be destroyed 
        and replaced by an Energy Star-qualified manufactured 
        home;
          (6) Modifies the income-eligibility test for rebates, 
        grants, or loans to allow rebates, grants, or loans to 
        be made to households in which the combined income of 
        all members of the household does not exceed the 
        greater of 200 percent of the Federal Poverty Income 
        Guidelines or 80 percent of the area median income;
          (7) Adds new conditions on the receipt of a grant or 
        loan;
          (8) Permits funds made available for low-income 
        weatherization assistance under the American Recovery 
        and Reinvestment Act of 2009 to be used to replace pre-
        1976 substandard manufactured homes with Energy Star-
        qualified manufactured homes; and
          (9) Makes additional clarifying and conforming 
        amendments.

                      Section-by-Section Analysis

    Section 1 provides a short title.
    Section 2 establishes authorizes the Secretary of Energy to 
provide grants to State energy agencies to provide grants, 
loans, and rebates to owners of dated manufactured homes to 
assist them in replacing dated manufactured homes with Energy 
Star-qualified manufactured homes.
    Subsection (a) defines key terms used in the bill.
    Subsection (b) states the purpose of the bill.
    Subsection (c) establishes the grant program. Paragraph (1) 
authorizes the Secretary of Energy to provide grants to State 
agencies for carrying out the program.
    Paragraph (2)(A) requires the Secretary to give priority to 
States that: have a high percentage of dated manufactured homes 
relative to the existing manufactured housing stock of the 
State; would experience substantial energy gains and returns on 
investment on replacement of the dated manufactured homes; have 
a high percentage of counties with fewer than 6 residents per 
mile; have or have planned infrastructure necessary to replace 
the dated manufactured homes; or act in partnership with 
providers of affordable lending products that enable buyers to 
build wealth.
    Paragraph (2)(B) provides that, if a State does not act 
within the 1-year period beginning on the date of receipt of 
the grant, the unused amount will revert to the Secretary, who 
may distribute it to any individual or agency on a first-come, 
first-served basis.
    Paragraph (3) provides that a State agency may use a grant 
provided under paragraph (1) to provide owners of dated 
manufactured homes grants or loans to use toward the purchase 
of new Energy Star-qualified manufactured homes and rebates or 
grants for the decommissioning of dated manufactured homes.
    Paragraph (4)(A) limits the amount of a grant or loan for 
the purchase of a single manufactured home to $7,500, and the 
amount of a rebate or grant for the deommissioning of a single 
manufactured home to $2,500. Clause (iii) of paragraph (4)(A) 
permits State agencies to supplement amount of a grant, loan, 
or rebate under the program with State or other funds (such as 
private donations and grants or loans) as the State finds 
appropriate.
    Paragraph (4)(B) requires that the owner of a manufactured 
home seeking a rebate, grant, or loan, must use the home as the 
primary residence of the owner on a year-round basis for at 
least 12 previous months.
    Paragraph (4)(C) requires that a grant or loan be made only 
if the applicable manufactured home will be destroyed 
(including appropriate recycling) and replaced with an Energy 
Star qualified manufactured home. Clause (ii) of paragraph 
(4)(C) requires the Secretary to establish third-party 
verification requirements to ensure the requirements of 
paragraph (4)(C) are met.
    Paragraph (4)(D) permits a State agency to make only one 
grant or loan under the program per household.
    Paragraph (4)(E) provides that a decommission rebate or 
grant may only be made if the appliacable dated manufactured 
home will be destroyed; proof of decommission is shown before 
the rebate or grant funds are paid; and no member of the 
household was provided another grant or loan under the program.
    Paragraph (4)(F) provides eligibility requirements based on 
income.
    Paragraph (4)(G) lists requirements for eligible financing.
    Paragraph (5)(A) allows States to use funds from this 
program for similar programs that are run on the state level.
    Paragraph (5)(B) directs the Secretary to seek to achieve 
the purpose of this section through similar Federal programs, 
including the American Recovery and Reinvestment Act of 2009. 
Clause (ii) of paragraph (5)(B) makes a conforming amendment to 
the American Recovery and Reinvestment Act to permits funds 
made available for low-income weatherization assistance under 
that Act to be used to replace pre-1976 substandard 
manufactured homes with Energy Star-qualified manufactured 
homes.
    Paragraph (6) lists administrative requirements, such as 
proper fiscal controls and accounting procedures. Subparagraph 
(C) prohibits a Sate agency from using more than 10 percent of 
the funds provided under subsection (c) for administrative 
expenses.
    Subsection (d)(1) authorizes such sums as are necessary to 
carry out the section.
    Subsection (d)(2) provides that the Secretary may not use 
more than 5 percent for administrative expenses.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

S. 1320--Energy-Efficient Manufactured Housing Act of 2010

    Summary: S. 1320 would authorize appropriations for grants 
to states to provide financial incentives to owners of older 
manufactured homes to replace those homes with more energy-
efficient homes. Assuming appropriation of the necessary 
amounts, CBO estimates that implementing S. 1320 would cost 
$2.2 billion over the 2011-2015 period. Enacting S. 1320 would 
not affect direct spending or revenues; therefore, pay-as-you-
go procedures do not apply.
    S. 1320 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1320 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year in millions of dollars--
                                                              --------------------------------------------------
                                                                2011    2012    2013    2014    2015   2011-2015
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level................................     500     500     500     500     500     2,500
Estimated Outlays............................................     150     450     525     525     500     2,150
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: S. 1320 would authorize the 
appropriation of whatever sums are necessary for the Department 
of Energy (DOE) to make grants to states to provide financial 
incentives to individuals to replace certain manufactured homes 
constructed prior to 1976 with newer, more energy-efficient 
models. States would use those grants to make grants or loans 
of up to $7,500 to eligible owners of older manufactured homes 
to use toward the purchase of new Energy Star-qualified 
manufactured homes. (According to information from the 
manufactured housing industry, the average cost of an Energy-
Star qualified home is between $60,000 and $65,000.) An 
eligible owner also could qualify for an additional grant or 
loan from the state of up to $2,500 to defray the costs of 
disposing of the old home. Assistance under S. 1320 would only 
be available to individuals who occupy their homes as full-time 
residences and whose incomes do not exceed certain thresholds 
specified in the bill.
    According to data from the American Housing Survey, nearly 
3 million of the 8.8 million manufactured homes in the United 
States were built before 1976. Based on data from that survey, 
CBO estimates that approximately 60 percent of those homes are 
occupied by owners as primary residences. Based on information 
from the manufactured housing industry, CBO estimates that 
roughly 80 percent of such owners would meet the bill's income-
related criteria to qualify for federal assistance under S. 
1320. Providing federal assistance to replace all eligible 
manufactured homes would cost around $14 billion.
    However, given the size of the current market for new 
manufactured homes, CBO estimates that federal spending would 
be far less than that amount. According to the American Housing 
Survey, an average of about 100,000 manufactured homes was sold 
per year over the 2005-2009 period. For this estimate, CBO 
assumes that the number of manufactured homes sold each year 
remains at the average level observed over the past five years 
and that states elect to provide financial assistance primarily 
in the form of grants or rebates to individuals. Taking into 
account the bill's eligibility criteria related to owner 
occupancy and income, CBO estimates that about half of the 
total number of homes sold each year under S. 1320 would be 
purchased by individuals who seek and qualify for financial 
assistance. Based on those assumptions, CBO estimates that 
implementing the bill would require appropriations of $2.5 
billion over the 2011-2015 period. Based on historical spending 
patterns for similar DOE programs that provide financial 
incentives to replace energy-inefficient items with more 
efficient ones, we estimate that resulting federal spending 
would total $2.2 billion over the 2011-2015 period.
    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 1320 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. State, local, and tribal governments would 
benefit from grants authorized in the bill. Any costs to those 
governments would be incurred voluntarily as a condition of 
federal assistance.
    Estimate prepared by: Federal Costs: Megan Carroll; Impact 
on State, Local, and Tribal Governments: Ryan Miller; Impact on 
the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1320.
    The bill is not a regulatory measure in the sense of 
imposing Government established standards or significant 
economic responsibilities on private individuals and 
businesses. It is a grant program, which provides grants to 
State agencies for them to provide grants, loans, and rebates 
to assist low-income households residing in dated manufactured 
homes.
    Some personal information will need to be collected and 
some additional paperwork will be required to ensure that funds 
made available under the program are properly used and that 
households receiving the funds are qualified to receive them. 
The Committee does not expect these information requirements to 
have a substantial impact on personal privacy or the paperwork 
burden to be substantial.

                   Congressionally Directed Spending

    S. 1320, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        Executive Communications

    The Committee requested the views of the Department of 
Energy on S. 1320 at its hearing on energy efficient buildings 
legislation on March 11, 2009. The testimony of the Department 
of Energy at that hearing follows.

 Statement of Cathy Zoi, Assistant Secretary for Energy Efficiency and 
                 Renewable Energy, Department of Energy

    Good morning Chairman Bingaman, Ranking Member Murkowski, 
and distinguished members of the Committee. Thank you for the 
opportunity to appear before you today. I consider it an honor 
to lead the Administration's efforts to advance and deploy 
energy efficiency and renewable energy solutions at this 
historic time. As this Committee knows, we are in a moment of 
time that poses great challenges and opportunities in the 
energy field. I am excited about the opportunity to harness 
ideas and innovation to ensure our economic security, national 
security, and environmental security. Despite challenges, I am 
optimistic about the future and in particular about the areas 
where the Administration and Congress can work together to meet 
the Nation's energy challenges.
    With tremendous support from Congress, both through the 
American Recovery and Reinvestment Act of 2009 (Recovery Act) 
and annual appropriations, we are transforming the clean energy 
landscape in the United States. In the Office of Energy 
Efficiency and Renewable Energy (EERE) alone, we are investing 
more than $16 billion in Recovery Act funding toward projects 
ranging from geothermal demonstrations in Alaska, New Mexico, 
and Utah to electric drive component manufacturing in Fargo, 
North Dakota, to large wind turbine blade testing in Boston, 
and the development of biorefineries in Ohio, Oregon, and 
elsewhere, and much more. These programs are creating jobs with 
investments in 56 states and U.S. Territories to encourage 
deployment of a full range of renewable energy sources and 
energy savings measures. In addition, EERE has provided support 
to the Department of the Treasury for $2.3 billion of grants in 
lieu of tax credits for projects that are expected to deploy 
more than 4 gigawatts of renewable energy, and another $2.3 
billion in tax credits to domestic manufacturers of clean 
energy products.
    In addition to investing in renewable technologies, EERE is 
engaging in a full court press on energy efficiency. As 
Secretary Chu is fond of saying, energy efficiency isn't just 
low-hanging fruit; it's fruit lying on the ground. By reducing 
our energy consumption, we can create and support clean energy 
jobs, reduce our reliance on foreign sources of energy and 
reduce greenhouse gas (GHG) emissions while saving money on the 
energy bills of everyday Americans.


                         home energy retrofits


    As you know, one of the best opportunities for energy 
efficiency is right in our own homes. Home energy retrofits can 
be a win-win-win. Consumers can win by cutting their utility 
bills and saving money, while getting a healthier, more 
comfortable living space for their families. Communities, 
employers, and employees can win by creating good jobs in the 
retrofit industry and at manufacturers that produce energy 
efficiency products, spurring the local economy and putting 
people back to work. The Nation can win by creating jobs, 
reducing our reliance on energy from foreign sources, reducing 
our carbon emissions, and slowing the effects of climate 
change.
    There are approximately 130 million homes in the United 
States. These homes account for about 33 percent of the 
Nation's total electricity demand\1\ and consume approximately 
22 percent of the Nation's energy\2\ while generating 21 
percent of the Nation's overall carbon footprint.\3\ Roughly 
half of these homes were built before 1973, long before modem 
residential building codes came into effect.\4\ With so many 
older homes, and with advances in building technologies, there 
is a tremendous opportunity to upgrade home energy efficiency 
by insulating; caulking; improving heating, ventilation, and 
air conditioning equipment (HVAC); tightening the building 
envelope; and adding other energy efficiency improvements. 
Existing techniques and technologies can reduce energy use by 
up to 40 percent per home and reduce associated GHG emissions 
by up to 160 million metric tons by 2020.\5\
---------------------------------------------------------------------------
    \1\Percentage derived from figures in the Annual Energy Review. 
Energy Information Administration. http://www.eia.doe.gov/aer/txt/
ptb0201a.html. February 2010.
    \2\Percentage derived from figures in the Annual Energy Review. 
Energy Information Administration. http://www.eia.doe.gov/aer/txt/
ptb0201a.html. February 2010.
    \3\Pew Center on Global Climate Change. Climate Change 101: 
Technological Solutions. January 2009.
    \4\Energy Information Administration. Residential Energy 
Consumption Survey 2005: Home Energy Uses and Costs. http://
www.eia.doe.gov/emeu/recs/
    \5\President's Middle Class Task Force and Council on Environmental 
Quality. Recovery Through Retrofit report. October 2009.
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    This vast potential for savings can be tapped only with a 
strong, well-trained American work force. The overall 
construction sector currently faces a 27.1 percent unemployment 
rate.\6\ Insulation-blowing trucks are standing idle, and many 
construction workers are anxious to find ways to apply their 
skills to new jobs. At the same time, Americans are paying over 
$200 billion per year in energy costs--money that could pay for 
housing, tuition, or other basic necessities.\7\ As the 
President has said, if you saw $20 bills flying out your 
window, you would try to grab them. So let's try to make it 
easier for American families to prevent their hard-earned cash 
from flying out the doors, windows, and ceilings of inefficient 
homes.
---------------------------------------------------------------------------
    \6\United States Bureau of Labor Statistics. Industries at a 
Glance: Construction: NAICS23. March 5, 2010. http://www.bls.gov/iag/
tgs/iag23.htm
    \7\Energy Information Administration. Residential Energy 
Consumption Survey 2005: Home Energy Uses and Costs. http://
www.eia.doe.gov/emeu/recs/recs2005/c&e/summary/pdf/tableus5.pdf.
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                               challenges


    To realize job creation, energy savings, and environmental 
benefits, making energy retrofits must be easier for 
homeowners. Three key barriers prevent Americans from taking 
advantage of cost-effective retrofits to their homes: 
difficulty finding information about which retrofit upgrades 
are best for their home; difficulty covering the up front cost 
of these investments; and difficulty finding knowledgeable, 
skilled workers.\8\
---------------------------------------------------------------------------
    \8\McKinsey & Company. Unlocking Energy Efficiency in the U.S. 
Economy. July 2009.
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    These three barriers were outlined in the Recovery Through 
Retrofit strategy document released by Vice President Biden's 
Middle Class Task Force. In close collaboration with other 
agencies, DOE is pursuing a comprehensive approach to address 
these three barriers, which includes:
           The creation of a home energy performance 
        labeling system in collaboration with the Recovery 
        Through Retrofit to provide consumers with building 
        energy information;
           The expansion of rebate programs and 
        appropriate financing mechanisms to provide homeowners 
        with access to affordable mechanisms to cover the up 
        front cost of energy efficiency improvements; and
           The establishment of voluntary national 
        standards for retrofit workforce training and 
        certification to help protect consumers.


                     departmental retrofit support


    The inter-agency Recovery Through Retrofit initiative, 
coordinated by the President's Council on Environmental 
Quality, seeks to lay the groundwork for a self-sustaining home 
energy efficiency retrofit industry. Additionally, the 
Department actively supports home energy retrofits in other 
ways, including a new Retrofit Ramp-Up program and the ongoing 
Weatherization Assistance and State Energy Programs.
    The Retrofit Ramp-Up program, the competitive portion of 
the Energy Efficiency and Conservation Block Grant program 
funded through the Recovery Act, could deliver important energy 
and monetary savings to communities that win awards. However, 
its greatest impact may be in demonstrating sustainable, 
replicable business models that other communities across the 
Nation can copy so that they can also drive job creation and 
energy savings in their own areas. The lessons learned from 
these projects--both successes and challenges--could enable the 
rest of the Nation to ramp up its energy efficiency efforts, 
fundamentally transforming the way the U.S. consumes energy.
    DOE will soon award up to $390 million of Recovery Act 
funds for this program, targeting whole-neighborhood building 
retrofits. The Department's goal is to fund projects 
demonstrating models for providing cost-effective energy 
upgrades for a large percentage of the residential, commercial, 
and public buildings in communities. EERE received a large 
volume of excellent proposals, far more than we will be able to 
fund. There is no shortage of good ideas or enthusiasm, and we 
hope to leverage the Recovery through Retrofit experience into 
a long term model where communities can sustain the efforts to 
retrofit whole blocks at a time.
    The Weatherization Assistance Program is currently 
retrofitting thousands of homes each month, utilizing $5 
billion of Recovery Act funds and $210 million from Fiscal Year 
2010 appropriations. This program primarily reaches low-income 
families, the elderly and the disabled, helping those with 
significant financial need save money on their energy bills.
    Some states are using portions of the $3.1 billion in 
Recovery Act funds allocated to the State Energy Program to 
create revolving loans funds that finance the deployment of 
energy efficiency technologies and support long lasting job 
creation.


                           current proposals


    During the State of the Union, the President called on 
Congress to pass a program of incentives for homeowners who 
make energy efficiency investments in their homes. Last week, 
the President outlined more details of a new ``HOMESTAR'' 
program that would help create jobs by encouraging American 
families to invest in energy saving home improvements.
    Key components of the HOMESTAR Program include:
     Rebates delivered directly to consumers: Like the 
Cash for Clunkers program, consumers would be eligible for 
direct HOMESTAR rebates at the point of sale for a variety of 
energy-saving investments in their homes. A broad array of 
vendors, from small independent building material dealers, 
large national home improvement chains, energy efficiency 
installation professionals and utilities (including rural 
utilities) would market the rebates, provide them directly to 
consumers and then be reimbursed by the Federal Government. The 
rebates would also be marketed by the Environmental Protection 
Agency and trade associations whose member contractors 
participate in the program.
     $1,000-$1,500 Silver Star Rebates: Consumers 
looking to have simple upgrades performed in their homes would 
be eligible for 50% rebates up to $1,000-$1,500 for doing any 
of a straightforward set of upgrades, including: insulation, 
duct sealing, water heaters, HVAC units, windows and doors. 
Under Silver Star, consumers can chose a combination of 
upgrades for rebates up to a maximum of $3,000 per home. 
Rebates would be limited to the most energy efficient 
categories of upgrades--focusing on products made primarily in 
the United States and installed by certified contractors.
     $3000 Gold Star Rebates: Consumers interested in 
more comprehensive energy retrofits would be eligible for a 
$3,000 rebate for a whole home energy audit and subsequent 
retrofit tailored to achieve a 20% energy savings in their 
homes. Consumers could receive additional rebate amounts up to 
$8,000 for energy savings in excess of 20%. Gold Star would 
build on existing whole home retrofit programs, like the 
Environmental Protection Agency's successful Home Performance 
with Energy Star program.
     Oversight to Ensure Quality Installations: The 
program would require that contractors be certified to perform 
efficiency installations. Independent quality assurance 
providers would conduct field inspections after work is 
completed to ensure proper installation so consumers receive 
energy savings from their upgrades.
     Support for financing: The program would include 
support to State governments to provide financing options for 
consumers seeking to make efficiency investments in their 
homes. This will help ensure that consumers can afford to make 
these investments.
    The program may result in the creation of tens of thousands 
of jobs while achieving substantial reductions in energy use--
up to the equivalent of the entire output of three 500 megawatt 
coal-fired power plants each year. Consumers in the program are 
anticipated to save between $200-$500 per year in energy costs, 
while improving the comfort and value of their homes.
    I am sincerely grateful to the members of this Committee 
and other Senators who have been working tirelessly on efforts 
to create legislative language that is consistent with the 
President's vision. I believe they have done a tremendous job 
turning a concept into language, and I have the utmost 
admiration for them and their staffs. As the legislative 
process moves forward, we will continue to work with the 
Committee on this bill until it is enacted.
    I am happy to answer any questions members of this 
Committee may have regarding the proposal or how the Department 
would administer such a program were it to be signed into law.
    Additionally, I understand that a panel later today will 
also examine S. 3079, Senator Merkley's ``Building Star'' bill, 
and S. 1320, a bill introduced by Senator Tester for homes 
built before 1976. As I mentioned earlier in my testimony, both 
commercial buildings and older homes are major challenges in 
terms of energy efficiency, and I salute these Senators for 
their efforts to find solutions. While I plan to focus on the 
Home Star proposal today, I am happy to provide feedback on 
these additional proposals for the record.


                               conclusion


    Retrofitting millions of American homes may truly transform 
energy consumption throughout the Nation. It may also put 
people to work in good, domestic jobs while saving Americans 
money and enabling significant contributions toward GHG 
emissions reduction targets. Public investments can lay the 
foundation for a vibrant private-sector led retrofit industry. 
Workers can get trained and certified, small contractors can 
grow their businesses, and millions can save money on their 
energy bills.
    On October 19, 2009, Secretary Chu stated, ``In the next 
several decades, I believe that energy efficiency is our most 
powerful tool for reducing our carbon emissions and reducing 
our energy bills.'' Home energy retrofits could be critical to 
realizing both of those goals, while supporting American job 
creation. I thank the Committee for its hard work on energy 
efficiency and specifically in crafting the legislative 
proposal being considered today. I sincerely hope I have the 
opportunity to implement this program soon with the aim of 
achieving our interconnected goals of creating good clean 
energy jobs, reducing our reliance on foreign sources of 
energy, and reducing our greenhouse gas emissions.
    Thank you again for the opportunity to testify on this 
topic. I will gladly answer your questions.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1320, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

             AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009


                    Public Law 111-5; 123 Stat. 115


  AN ACT Making supplemental appropriations for job preservation and 
  creation, infrastructure investment, energy efficiency and science, 
assistance to the unemployed, and State and local fiscal stabilization, 
for the fiscal year ending September 30, 2009, and for other purposes.

           *       *       *       *       *       *       *


DIVISION A--APPROPRIATION PROVISIONS

           *       *       *       *       *       *       *



TITLE IV--ENERGY AND WATER DEVELOPMENT

           *       *       *       *       *       *       *



DEPARTMENT OF ENERGY

           *       *       *       *       *       *       *



GENERAL PROVISIONS--THIS TITLE

           *       *       *       *       *       *       *



SEC. 407. WEATHERIZATION ASSISTANCE PROGRAM AMENDMENTS.

    (a) Income Level.--Section 412(7) of the Energy 
Conservation and Production Act (42 U.S.C. 6862(7)) is amended 
by striking ``150 percent'' both places it appears and 
inserting ``200 percent''.
    (b) Assistance Level per Dwelling Unit.--Section 415(c)(1) 
of the Energy Conservation and Production Act (42 U.S.C. 
6865(c)(1)) is amended by striking ``$2,500'' and inserting 
``$6,500''.
    (c) Effective Use of Funds.--In providing funds made 
available by this Act for the Weatherization Assistance 
Program, the Secretary may encourage States to give priority to 
using such funds for the most cost-effective efficiency 
activities, which may include insulation of attics, if, in the 
Secretary's view, such use of funds would increase the 
effectiveness of the program.
    (d) Training and Technical Assistance.--Section 416 of the 
Energy Conservation and Production Act (42 U.S.C. 6866) is 
amended by striking ``10 percent'' and inserting ``up to 20 
percent''.
    (e) Assistance for Previously Weatherized Dwelling Units.--
Section 415(c)(2) of the Energy Conservation and Production Act 
(42 U.S.C. 6865(c)(2)) is amended by striking ``September 30, 
1979'' and inserting ``September 30, 1994''.
    (f) Energy-Efficient Manufactured Homes.--Notwithstanding 
any restrictions in part A of title IV of the Energy 
Conservation and Production Act (42 U.S.C. 6861 et seq.), any 
amount made available under this Act for 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.) may be used for the replacement of 
pre-1976 substandard manufactured homes with Energy Star-
qualified manufactured homes under the Energy-Efficient 
Manufactured Housing Act of 2010.

           *       *       *       *       *       *       *