US Codex
Bill
Notes

S. 720 — what changed

Energy Savings and Industrial Competitiveness Act of 2015

From Introduced in Senate to Reported in Senate. 4 added and 3 removed between Introduced in Senate and Reported in Senate.

Sec. 431 Energy performance requirement for Federal buildings

removed

removed Section 543 of the National Energy Conservation Policy Act (42 U.S.C. 8253) is amended—

(1)
removed by striking subsection (a) and inserting the following:

removed “(a) Energy performance requirement for Federal buildings

removed “(1) Requirement—Subject to paragraph (2), each agency shall apply energy conservation measures to, and shall improve the design for the construction of, the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross square foot of the Federal buildings of the agency in fiscal years 2006 through 2017 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2003, by the percentage specified in the following table:

removed “(2) Exclusion for buildings with energy intensive activities

removed “(A) In general—An agency may exclude from the requirements of paragraph (1) any building (including the associated energy consumption and gross square footage) in which energy intensive activities are carried out.

removed “(B) Reports—Each agency shall identify and list in each report made under section 548(a) the buildings designated by the agency for exclusion under subparagraph (A).

removed “(3) Review—Not later than December 31, 2017, the Secretary shall—

removed “(A) review the results of the implementation of the energy performance requirements established under paragraph (1); and

removed “(B) based on the review conducted under subparagraph (A), submit to Congress a report that addresses the feasibility of requiring each agency to apply energy conservation measures to, and improve the design for the construction of, the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross square foot of the Federal buildings of the agency in each of fiscal years 2018 through 2030 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in the prior fiscal year, by 3 percent.”

(2)
removed in subsection (f)—
(A)
removed in paragraph (1)—
(i)
removed by redesignating subparagraphs (E), (F), and (G) as subparagraphs (F), (G), and (H), respectively; and
(ii)
removed by inserting after subparagraph (D) the following:

removed “(E) Ongoing commissioning—The term ongoing commissioning means an ongoing process of commissioning using monitored data, the primary goal of which is to ensure continuous optimum performance of a facility, in accordance with design or operating needs, over the useful life of the facility, while meeting facility occupancy requirements.”

(B)
removed in paragraph (2), by adding at the end the following:

removed “(C) Energy management system—An energy manager designated under subparagraph (A) shall consider use of a system to manage energy use at the facility and certification of the facility in accordance with the International Organization for Standardization standard numbered 50001 and entitled “Energy Management Systems”.”

(C)
removed by striking paragraphs (3) and (4) and inserting the following:

removed “(3) Energy and water evaluations and commissioning

removed “(A) Evaluations—Except as provided in subparagraph (B), effective beginning on the date that is 180 days after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015, and annually thereafter, each energy manager shall complete, for each calendar year, a comprehensive energy and water evaluation and recommissioning or retrocommissioning for approximately 25 percent of the facilities of each agency that meet the criteria under paragraph (2)(B) in a manner that ensures that an evaluation of each facility is completed at least once every 4 years.

removed “(B) Exceptions—An evaluation and recommissioning shall not be required under subparagraph (A) with respect to a facility that—

removed “(i) has had a comprehensive energy and water evaluation during the 8-year period preceding the date of the evaluation;

removed “(ii)

removed “(I) has been commissioned, recommissioned, or retrocommissioned during the 10-year period preceding the date of the evaluation; or

removed “(II) is under ongoing commissioning;

removed “(iii) has not had a major change in function or use since the previous evaluation and commissioning;

removed “(iv) has been benchmarked with public disclosure under paragraph (8) within the year preceding the evaluation; and

removed “(v)

removed “(I) based on the benchmarking, has achieved at a facility level the most recent cumulative energy savings target under subsection (a) compared to the earlier of—

removed “(aa) the date of the most recent evaluation; or

removed “(bb) the date—

removed “(AA) of the most recent commissioning, recommissioning, or retrocommissioning; or

removed “(BB) on which ongoing commissioning began; or

removed “(II) has a long-term contract in place guaranteeing energy savings at least as great as the energy savings target under subclause (I).

removed “(4) Implementation of identified energy and water efficiency measures

removed “(A) In general—Not later than 2 years after the date of completion of each evaluation under paragraph (3), each energy manager may—

removed “(i) implement any energy- or water-saving measure that the Federal agency identified in the evaluation conducted under paragraph (3) that is life-cycle cost effective; and

removed “(ii) bundle individual measures of varying paybacks together into combined projects.

removed “(B) Measures not implemented—The energy manager shall, as part of the certification system under paragraph (7), explain the reasons why any life-cycle cost effective measures were not implemented under subparagraph (A) using guidelines developed by the Secretary.”

(D)
removed in paragraph (7)(C), by adding at the end the following:

removed “(iii) Summary report—The Secretary shall make available a report that summarizes the information tracked under subparagraph (B)(i) by each agency and, as applicable, by each type of measure.”

Sec. 432 Federal building energy efficiency performance standards; certification system and level for green buildings

removed
(a)
removed Definitions— Section 303 of the Energy Conservation and Production Act (42 U.S.C. 6832) (as amended by section 101(a)) is amended—
(1)
removed in paragraph (6), by striking “to be constructed” and inserting “constructed or altered”; and
(2)
removed by adding at the end the following:

removed “(19) Major renovation—The term major renovation means a modification of building energy systems sufficiently extensive that the whole building can meet energy standards for new buildings, based on criteria to be established by the Secretary through notice and comment rulemaking.”

(b)
removed Federal Building Efficiency Standards— Section 305 of the Energy Conservation and Production Act (42 U.S.C. 6834) is amended—
(1)
removed in subsection (a)(3)—
(A)
removed by striking “(3)(A) Not later than” and all that follows through subparagraph (B) and inserting the following:

removed “(3) Revised Federal building energy efficiency performance standards; certification for green buildings

removed “(A) Revised federal building energy efficiency performance standards

removed “(i) In general—Not later than 1 year after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015, the Secretary shall establish, by rule, revised Federal building energy efficiency performance standards that require that—

removed “(I) new Federal buildings and alterations and additions to existing Federal buildings—

removed “(aa) meet or exceed the most recent revision of the International Energy Conservation Code (in the case of residential buildings) or ASHRAE Standard 90.1 (in the case of commercial buildings) as of the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015; and

removed “(bb) meet or exceed the energy provisions of State and local building codes applicable to the building, if the codes are more stringent than the International Energy Conservation Code or ASHRAE Standard 90.1, as applicable;

removed “(II) unless demonstrated not to be life-cycle cost effective for new Federal buildings and Federal buildings with major renovations—

removed “(aa) the buildings be designed to achieve energy consumption levels that are at least 30 percent below the levels established in the version of the ASHRAE Standard or the International Energy Conservation Code, as appropriate, that is applied under subclause (I)(aa), including updates under subparagraph (B); and

removed “(bb) sustainable design principles are applied to the location, siting, design, and construction of all new Federal buildings and replacement Federal buildings;

removed “(III) if water is used to achieve energy efficiency, water conservation technologies shall be applied to the extent that the technologies are life-cycle cost effective; and

removed “(IV) if life-cycle cost effective, as compared to other reasonably available technologies, not less than 30 percent of the hot water demand for each new Federal building or Federal building undergoing a major renovation be met through the installation and use of solar hot water heaters.

removed “(ii) Limitation—Clause (i)(I) shall not apply to unaltered portions of existing Federal buildings and systems that have been added to or altered.

removed “(B) Updates—Not later than 1 year after the date of approval of each subsequent revision of the ASHRAE Standard or the International Energy Conservation Code, as appropriate, the Secretary shall determine whether the revised standards established under subparagraph (A) should be updated to reflect the revisions, based on the energy savings and life-cycle cost-effectiveness of the revisions.”

(B)
removed in subparagraph (C), by striking “(C) In the budget request” and inserting the following:

removed “(C) Budget request—In the budget request”

(C)
removed by striking subparagraph (D) and inserting the following:

removed “(D) Certification for green buildings

removed “(i) Sustainable design principles—Sustainable design principles shall be applied to the siting, design, and construction of buildings covered by this subparagraph.

removed “(ii) Selection of certification systems—The Secretary, after reviewing the findings of the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)), in consultation with the Administrator of General Services, and in consultation with the Secretary of Defense relating to those facilities under the custody and control of the Department of Defense, shall determine those certification systems for green commercial and residential buildings that the Secretary determines to be the most likely to encourage a comprehensive and environmentally sound approach to certification of green buildings.

removed “(iii) Basis for selection—The determination of the certification systems under clause (ii) shall be based on ongoing review of the findings of the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)) and the criteria described in clause (v).

removed “(iv) Administration—In determining certification systems under this subparagraph, the Secretary shall—

removed “(I) make a separate determination for all or part of each system;

removed “(II) confirm that the criteria used to support the selection of building products, materials, brands, and technologies are fair and neutral (meaning that such criteria are based on an objective assessment of relevant technical data), do not prohibit, disfavor, or discriminate against selection based on technically inadequate information to inform human or environmental risk, and are expressed to prefer performance measures whenever performance measures may reasonably be used in lieu of prescriptive measures; and

removed “(III) use environmental and health criteria that are based on risk assessment methodology that is generally accepted by the applicable scientific disciplines.

removed “(v) Considerations—In determining the green building certification systems under this subparagraph, the Secretary shall take into consideration—

removed “(I) the ability and availability of assessors and auditors to independently verify the criteria and measurement of metrics at the scale necessary to implement this subparagraph;

removed “(II) the ability of the applicable certification organization to collect and reflect public comment;

removed “(III) the ability of the standard to be developed and revised through a consensus-based process;

removed “(IV) an evaluation of the robustness of the criteria for a high-performance green building, which shall give credit for promoting—

removed “(aa) efficient and sustainable use of water, energy, and other natural resources;

removed “(bb) use of renewable energy sources;

removed “(cc) improved indoor environmental quality through enhanced indoor air quality, thermal comfort, acoustics, day lighting, pollutant source control, and use of low-emission materials and building system controls; and

removed “(dd) such other criteria as the Secretary determines to be appropriate; and

removed “(V) national recognition within the building industry.

removed “(vi) Review—The Secretary, in consultation with the Administrator of General Services and the Secretary of Defense, shall conduct an ongoing review to evaluate and compare private sector green building certification systems, taking into account—

removed “(I) the criteria described in clause (v); and

removed “(II) the identification made by the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)).

removed “(vii) Exclusions

removed “(I) In general—Subject to subclause (II), if a certification system fails to meet the review requirements of clause (v), the Secretary shall—

removed “(aa) identify the portions of the system, whether prerequisites, credits, points, or otherwise, that meet the review criteria of clause (v);

removed “(bb) determine the portions of the system that are suitable for use; and

removed “(cc) exclude all other portions of the system from identification and use.

removed “(II) Entire systems—The Secretary shall exclude an entire system from use if an exclusion under subclause (I)—

removed “(aa) impedes the integrated use of the system;

removed “(bb) creates disparate review criteria or unequal point access for competing materials; or

removed “(cc) increases agency costs of the use.

removed “(viii) Internal certification processes—The Secretary may by rule allow Federal agencies to develop internal certification processes, using certified professionals, in lieu of certification by certification entities identified under clause (ii).

removed “(ix) Privatized military housing—With respect to privatized military housing, the Secretary of Defense, after consultation with the Secretary may, through rulemaking, develop alternative certification systems and levels than the systems and levels identified under clause (ii) that achieve an equivalent result in terms of energy savings, sustainable design, and green building performance.

removed “(x) Water conservation technologies—In addition to any use of water conservation technologies otherwise required by this section, water conservation technologies shall be applied to the extent that the technologies are life-cycle cost-effective.

removed “(xi) Effective date

removed “(I) Determinations made after December 31, 2015—The amendments made by section 432(b)(1)(C) of Energy Savings and Industrial Competitiveness Act of 2015 shall apply to any determination made by a Federal agency after December 31, 2015.

removed “(II) Determinations made on or before December 31, 2015—This subparagraph (as in effect on the day before the date of enactment of Energy Savings and Industrial Competitiveness Act of 2015) shall apply to any use of a certification system for green commercial and residential buildings by a Federal agency on or before December 31, 2015.”

(2)
removed by striking subsections (c) and (d) and inserting the following:

removed “(c) Periodic review—The Secretary shall—

removed “(1) once every 5 years, review the Federal building energy standards established under this section; and

removed “(2) on completion of a review under paragraph (1), if the Secretary determines that significant energy savings would result, upgrade the standards to include all new energy efficiency and renewable energy measures that are technologically feasible and economically justified.”

Sec. 433 Enhanced energy efficiency underwriting

removed
(a)
removed Definitions— In this section:
(1)
removed Covered agency— The term covered agency—
(A)
removed means—
(i)
removed an executive agency, as that term is defined in section 102 of title 31, United States Code; and
(ii)
removed any other agency of the Federal Government; and
(B)
removed includes any enterprise, as that term is defined under section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502).
(2)
removed Covered loan— The term covered loan means a loan secured by a home that is issued, insured, purchased, or securitized by a covered agency.
(3)
removed Homeowner— The term homeowner means the mortgagor under a covered loan.
(4)
removed Mortgagee— The term mortgagee means—
(A)
removed an original lender under a covered loan or the holder of a covered loan at the time at which that mortgage transaction is consummated;
(B)
removed any affiliate, agent, subsidiary, successor, or assignee of an original lender under a covered loan or the holder of a covered loan at the time at which that mortgage transaction is consummated;
(C)
removed any servicer of a covered loan; and
(D)
removed any subsequent purchaser, trustee, or transferee of any covered loan issued by an original lender.
(5)
removed Secretary— The term Secretary means the Secretary of Housing and Urban Development.
(6)
removed Servicer— The term servicer means the person or entity responsible for the servicing of a covered loan, including the person or entity who makes or holds a covered loan if that person or entity also services the covered loan.
(7)
removed Servicing— The term servicing has the meaning given the term in section 6(i) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)).
(b)
removed Findings and purposes—
(1)
removed Findings— Congress finds that—
(A)
removed energy costs for homeowners are a significant and increasing portion of their household budgets;
(B)
removed household energy use can vary substantially depending on the efficiency and characteristics of the house;
(C)
removed expected energy cost savings are important to the value of the house;
(D)
removed the current test for loan affordability used by most covered agencies, commonly known as the debt-to-income test, is inadequate because it does not take into account the expected energy cost savings for the homeowner of an energy efficient home; and
(E)
removed another loan limitation, commonly known as the loan-to-value test, is tied to the appraisal, which often does not adjust for efficiency features of houses.
(2)
removed Purposes— The purposes of this section are to—
(A)
removed improve the accuracy of mortgage underwriting by Federal mortgage agencies by ensuring that energy cost savings are included in the underwriting process as described below, and thus to reduce the amount of energy consumed by homes and to facilitate the creation of energy efficiency retrofit and construction jobs;
(B)
removed require a covered agency to include the expected energy cost savings of a homeowner as a regular expense in the tests, such as the debt-to-income test, used to determine the ability of the loan applicant to afford the cost of homeownership for all loan programs; and
(C)
removed require a covered agency to include the value home buyers place on the energy efficiency of a house in tests used to compare the mortgage amount to home value, taking precautions to avoid double-counting and to support safe and sound lending.
(c)
removed Enhanced energy efficiency underwriting criteria—
(1)
removed In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall, in consultation with the advisory group established in subsection (f)(2), develop and issue guidelines for a covered agency to implement enhanced loan eligibility requirements, for use when testing the ability of a loan applicant to repay a covered loan, that account for the expected energy cost savings for a loan applicant at a subject property, in the manner set forth in paragraphs (2) and (3).
(2)
removed Requirements To account for energy cost savings— The enhanced loan eligibility requirements under paragraph (1) shall require that, for all covered loans for which an energy efficiency report is voluntarily provided to the mortgagee by the mortgagor, the covered agency and the mortgagee shall take into consideration the estimated energy cost savings expected for the owner of the subject property in determining whether the loan applicant has sufficient income to service the mortgage debt plus other regular expenses. To the extent that a covered agency uses a test such as a debt-to-income test that includes certain regular expenses, such as hazard insurance and property taxes, the expected energy cost savings shall be included as an offset to these expenses. Energy costs to be assessed include the cost of electricity, natural gas, oil, and any other fuel regularly used to supply energy to the subject property.
(3)
removed Determination of estimated energy cost savings—
(A)
removed In general— The guidelines to be issued under paragraph (1) shall include instructions for the covered agency to calculate estimated energy cost savings using—
(i)
removed the energy efficiency report;
(ii)
removed an estimate of baseline average energy costs; and
(iii)
removed additional sources of information as determined by the Secretary.
(B)
removed Report requirements— For the purposes of subparagraph (A), an energy efficiency report shall—
(i)
removed estimate the expected energy cost savings specific to the subject property, based on specific information about the property;
(ii)
removed be prepared in accordance with the guidelines to be issued under paragraph (1); and
(iii)
removed be prepared—
(I)
removed in accordance with the Residential Energy Service Network’s Home Energy Rating System (commonly known as HERS) by an individual certified by the Residential Energy Service Network, unless the Secretary finds that the use of HERS does not further the purposes of this section; or
(II)
removed by other methods approved by the Secretary, in consultation with the Secretary of Energy and the advisory group established in subsection (f)(2), for use under this section, which shall include a third-party quality assurance procedure.
(C)
removed Use by appraiser— If an energy efficiency report is used under paragraph (2), the energy efficiency report shall be provided to the appraiser to estimate the energy efficiency of the subject property and for potential adjustments for energy efficiency.
(4)
removed Required disclosure to consumer for a home with an energy efficiency report— If an energy efficiency report is used under paragraph (2), the guidelines to be issued under paragraph (1) shall require the mortgagee to—
(A)
removed inform the loan applicant of the expected energy costs as estimated in the energy efficiency report, in a manner and at a time as prescribed by the Secretary, and if practicable, in the documents delivered at the time of loan application; and
(B)
removed include the energy efficiency report in the documentation for the loan provided to the borrower.
(5)
removed Required disclosure to consumer for a home without an energy efficiency report— If an energy efficiency report is not used under paragraph (2), the guidelines to be issued under paragraph (1) shall require the mortgagee to inform the loan applicant in a manner and at a time as prescribed by the Secretary, and if practicable, in the documents delivered at the time of loan application of—
(A)
removed typical energy cost savings that would be possible from a cost-effective energy upgrade of a home of the size and in the region of the subject property;
(B)
removed the impact the typical energy cost savings would have on monthly ownership costs of a typical home;
(C)
removed the impact on the size of a mortgage that could be obtained if the typical energy cost savings were reflected in an energy efficiency report; and
(D)
removed resources for improving the energy efficiency of a home.
(6)
removed Pricing of loans—
(A)
removed In general— A covered agency may price covered loans originated under the enhanced loan eligibility requirements required under this section in accordance with the estimated risk of the loans.
(B)
removed Imposition of certain material costs, impediments, or penalties— In the absence of a publicly disclosed analysis that demonstrates significant additional default risk or prepayment risk associated with the loans, a covered agency shall not impose material costs, impediments, or penalties on covered loans merely because the loan uses an energy efficiency report or the enhanced loan eligibility requirements required under this section.
(7)
removed Limitations—
(A)
removed In general— A covered agency may price covered loans originated under the enhanced loan eligibility requirements required under this section in accordance with the estimated risk of those loans.
(B)
removed Prohibited actions— A covered agency shall not—
(i)
removed modify existing underwriting criteria or adopt new underwriting criteria that intentionally negate or reduce the impact of the requirements or resulting benefits that are set forth or otherwise derived from the enhanced loan eligibility requirements required under this subsection; or
(ii)
removed impose greater buy back requirements, credit overlays, or insurance requirements, including private mortgage insurance, on covered loans merely because the loan uses an energy efficiency report or the enhanced loan eligibility requirements required under this subsection.
(8)
removed Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2017, the enhanced loan eligibility requirements required under this subsection shall be implemented by each covered agency to—
(A)
removed apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home;
(B)
removed be available on any residential real property (including individual units of condominiums and cooperatives) that qualifies for a covered loan; and
(C)
removed provide prospective mortgagees with sufficient guidance and applicable tools to implement the required underwriting methods.
(d)
removed Enhanced energy efficiency underwriting valuation guidelines—
(1)
removed In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall—
(A)
removed in consultation with the Federal Financial Institutions Examination Council and the advisory group established in subsection (f)(2), develop and issue guidelines for a covered agency to determine the maximum permitted loan amount based on the value of the property for all covered loans made on properties with an energy efficiency report that meets the requirements of subsection (c)(3)(B); and
(B)
removed in consultation with the Secretary of Energy, issue guidelines for a covered agency to determine the estimated energy savings under paragraph (3) for properties with an energy efficiency report.
(2)
removed Requirements— The enhanced energy efficiency underwriting valuation guidelines required under paragraph (1) shall include—
(A)
removed a requirement that if an energy efficiency report that meets the requirements of subsection (c)(3)(B) is voluntarily provided to the mortgagee, such report shall be used by the mortgagee or covered agency to determine the estimated energy savings of the subject property; and
(B)
removed a requirement that the estimated energy savings of the subject property be added to the appraised value of the subject property by a mortgagee or covered agency for the purpose of determining the loan-to-value ratio of the subject property, unless the appraisal includes the value of the overall energy efficiency of the subject property, using methods to be established under the guidelines issued under paragraph (1).
(3)
removed Determination of estimated energy savings—
(A)
removed Amount of energy savings— The amount of estimated energy savings shall be determined by calculating the difference between the estimated energy costs for the average comparable houses, as determined in guidelines to be issued under paragraph (1), and the estimated energy costs for the subject property based upon the energy efficiency report.
(B)
removed Duration of energy savings— The duration of the estimated energy savings shall be based upon the estimated life of the applicable equipment, consistent with the rating system used to produce the energy efficiency report.
(C)
removed Present value of energy savings— The present value of the future savings shall be discounted using the average interest rate on conventional 30-year mortgages, in the manner directed by guidelines issued under paragraph (1).
(4)
removed Ensuring consideration of energy efficient features— Section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339) is amended—
(A)
removed in paragraph (2), by striking “; and” and inserting a semicolon; and
(B)
removed in paragraph (3), by striking the period at the end and inserting “; and” and inserting after paragraph (3) the following:

removed “(4) that State certified and licensed appraisers have timely access, whenever practicable, to information from the property owner and the lender that may be relevant in developing an opinion of value regarding the energy- and water-saving improvements or features of a property, such as—

removed “(A) labels or ratings of buildings;

removed “(B) installed appliances, measures, systems or technologies;

removed “(C) blueprints;

removed “(D) construction costs;

removed “(E) financial or other incentives regarding energy- and water-efficient components and systems installed in a property;

removed “(F) utility bills;

removed “(G) energy consumption and benchmarking data; and

removed “(H) third-party verifications or representations of energy and water efficiency performance of a property, observing all financial privacy requirements adhered to by certified and licensed appraisers, including section 501 of the Gramm-Leach-Bliley Act (15 U.S.C. 6801).”

(5)
removed Transactions requiring state certified appraisers— Section 1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342) is amended—
(A)
removed in paragraph (1), by inserting before the semicolon the following: “, or any real property on which the appraiser makes adjustments using an energy efficiency report”; and
(B)
removed in paragraph (2), by inserting after “atypical” the following: “, or an appraisal on which the appraiser makes adjustments using an energy efficiency report.”.
(6)
removed Protections—
(A)
removed Authority to impose limitations— The guidelines to be issued under paragraph (1) shall include such limitations and conditions as determined by the Secretary to be necessary to protect against meaningful under or over valuation of energy cost savings or duplicative counting of energy efficiency features or energy cost savings in the valuation of any subject property that is used to determine a loan amount.
(B)
removed Additional authority— At the end of the 7-year period following the implementation of enhanced eligibility and underwriting valuation requirements under this section, the Secretary may modify or apply additional exceptions to the approach described in paragraph (2), where the Secretary finds that the unadjusted appraisal will reflect an accurate market value of the efficiency of the subject property or that a modified approach will better reflect an accurate market value.
(7)
removed Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2017, each covered agency shall implement the guidelines required under this subsection, which shall—
(A)
removed apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home; and
(B)
removed be available on any residential real property, including individual units of condominiums and cooperatives, that qualifies for a covered loan.
(e)
removed Monitoring— Not later than 1 year after the date on which the enhanced eligibility and underwriting valuation requirements are implemented under this section, and every year thereafter, each covered agency with relevant activity shall issue and make available to the public a report that—
(1)
removed enumerates the number of covered loans of the agency for which there was an energy efficiency report, and that used energy efficiency appraisal guidelines and enhanced loan eligibility requirements;
(2)
removed includes the default rates and rates of foreclosures for each category of loans; and
(3)
removed describes the risk premium, if any, that the agency has priced into covered loans for which there was an energy efficiency report.
(f)
removed Rulemaking—
(1)
removed In general— The Secretary shall prescribe regulations to carry out this section, in consultation with the Secretary of Energy and the advisory group established in paragraph (2), which may contain such classifications, differentiations, or other provisions, and may provide for such proper implementation and appropriate treatment of different types of transactions, as the Secretary determines are necessary or proper to effectuate the purposes of this section, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.
(2)
removed Advisory group— To assist in carrying out this section, the Secretary shall establish an advisory group, consisting of individuals representing the interests of—
(A)
removed mortgage lenders;
(B)
removed appraisers;
(C)
removed energy raters and residential energy consumption experts;
(D)
removed energy efficiency organizations;
(E)
removed real estate agents;
(F)
removed home builders and remodelers;
(G)
removed State energy officials; and
(H)
removed others as determined by the Secretary.
(g)
removed Additional study—
(1)
removed In general— Not later than 18 months after the date of enactment of this Act, the Secretary shall reconvene the advisory group established in subsection (f)(2), in addition to water and locational efficiency experts, to advise the Secretary on the implementation of the enhanced energy efficiency underwriting criteria established in subsections (c) and (d).
(2)
removed Recommendations— The advisory group established in subsection (f)(2) shall provide recommendations to the Secretary on any revisions or additions to the enhanced energy efficiency underwriting criteria deemed necessary by the group, which may include alternate methods to better account for home energy costs and additional factors to account for substantial and regular costs of homeownership such as location-based transportation costs and water costs. The Secretary shall forward any legislative recommendations from the advisory group to Congress for its consideration.

Sec. 4321 Energy performance requirement for Federal buildings

added

added Section 543 of the National Energy Conservation Policy Act (42 U.S.C. 8253) is amended—

(1)
added by striking subsection (a) and inserting the following:

added “(a) Energy performance requirement for Federal buildings

added “(1) Requirement—Subject to paragraph (2), each agency shall apply energy conservation measures to, and shall improve the design for the construction of, the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross square foot of the Federal buildings of the agency in fiscal years 2006 through 2017 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2003, by the percentage specified in the following table:

added “(2) Exclusion for buildings with energy intensive activities

added “(A) In general—An agency may exclude from the requirements of paragraph (1) any building (including the associated energy consumption and gross square footage) in which energy intensive activities are carried out.

added “(B) Reports—Each agency shall identify and list in each report made under section 548(a) the buildings designated by the agency for exclusion under subparagraph (A).

added “(3) Review—Not later than December 31, 2017, the Secretary shall—

added “(A) review the results of the implementation of the energy performance requirements established under paragraph (1); and

added “(B) based on the review conducted under subparagraph (A), submit to Congress a report that addresses the feasibility of requiring each agency to apply energy conservation measures to, and improve the design for the construction of, the Federal buildings of the agency (including each industrial or laboratory facility) so that the energy consumption per gross square foot of the Federal buildings of the agency in each of fiscal years 2018 through 2030 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in the prior fiscal year, by 3 percent.”

(2)
added in subsection (f)—
(A)
added in paragraph (1)—
(i)
added by redesignating subparagraphs (E), (F), and (G) as subparagraphs (F), (G), and (H), respectively; and
(ii)
added by inserting after subparagraph (D) the following:

added “(E) Ongoing commissioning—The term ongoing commissioning means an ongoing process of commissioning using monitored data, the primary goal of which is to ensure continuous optimum performance of a facility, in accordance with design or operating needs, over the useful life of the facility, while meeting facility occupancy requirements.”

(B)
added in paragraph (2), by adding at the end the following:

added “(C) Energy management system—An energy manager designated under subparagraph (A) shall consider use of a system to manage energy use at the facility and certification of the facility in accordance with the International Organization for Standardization standard numbered 50001 and entitled “Energy Management Systems”.”

(C)
added by striking paragraphs (3) and (4) and inserting the following:

added “(3) Energy and water evaluations and commissioning

added “(A) Evaluations—Except as provided in subparagraph (B), effective beginning on the date that is 180 days after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015, and annually thereafter, each energy manager shall complete, for each calendar year, a comprehensive energy and water evaluation and recommissioning or retrocommissioning for approximately 25 percent of the facilities of each agency that meet the criteria under paragraph (2)(B) in a manner that ensures that an evaluation of each facility is completed at least once every 4 years.

added “(B) Exceptions—An evaluation and recommissioning shall not be required under subparagraph (A) with respect to a facility that—

added “(i) has had a comprehensive energy and water evaluation during the 8-year period preceding the date of the evaluation;

added “(ii)

added “(I) has been commissioned, recommissioned, or retrocommissioned during the 10-year period preceding the date of the evaluation; or

added “(II) is under ongoing commissioning;

added “(iii) has not had a major change in function or use since the previous evaluation and commissioning;

added “(iv) has been benchmarked with public disclosure under paragraph (8) within the year preceding the evaluation; and

added “(v)

added “(I) based on the benchmarking, has achieved at a facility level the most recent cumulative energy savings target under subsection (a) compared to the earlier of—

added “(aa) the date of the most recent evaluation; or

added “(bb) the date—

added “(AA) of the most recent commissioning, recommissioning, or retrocommissioning; or

added “(BB) on which ongoing commissioning began; or

added “(II) has a long-term contract in place guaranteeing energy savings at least as great as the energy savings target under subclause (I).

added “(4) Implementation of identified energy and water efficiency measures

added “(A) In general—Not later than 2 years after the date of completion of each evaluation under paragraph (3), each energy manager may—

added “(i) implement any energy- or water-saving measure that the Federal agency identified in the evaluation conducted under paragraph (3) that is life-cycle cost effective; and

added “(ii) bundle individual measures of varying paybacks together into combined projects.

added “(B) Measures not implemented—The energy manager shall, as part of the certification system under paragraph (7), explain the reasons why any life-cycle cost effective measures were not implemented under subparagraph (A) using guidelines developed by the Secretary.”

(D)
added in paragraph (7)(C), by adding at the end the following:

added “(iii) Summary report—The Secretary shall make available a report that summarizes the information tracked under subparagraph (B)(i) by each agency and, as applicable, by each type of measure.”

Sec. 4322 Federal building energy efficiency performance standards; certification system and level for green buildings

added
(a)
added Definitions— Section 303 of the Energy Conservation and Production Act (42 U.S.C. 6832) (as amended by section 101(a)) is amended—
(1)
added in paragraph (6), by striking “to be constructed” and inserting “constructed or altered”; and
(2)
added by adding at the end the following:

added “(19) Major renovation—The term major renovation means a modification of building energy systems sufficiently extensive that the whole building can meet energy standards for new buildings, based on criteria to be established by the Secretary through notice and comment rulemaking.”

(b)
added Federal Building Efficiency Standards— Section 305 of the Energy Conservation and Production Act (42 U.S.C. 6834) is amended—
(1)
added in subsection (a)(3)—
(A)
added by striking “(3)(A) Not later than” and all that follows through subparagraph (B) and inserting the following:

added “(3) Revised Federal building energy efficiency performance standards; certification for green buildings

added “(A) Revised federal building energy efficiency performance standards

added “(i) In general—Not later than 1 year after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015, the Secretary shall establish, by rule, revised Federal building energy efficiency performance standards that require that—

added “(I) new Federal buildings and alterations and additions to existing Federal buildings—

added “(aa) meet or exceed the most recent revision of the International Energy Conservation Code (in the case of residential buildings) or ASHRAE Standard 90.1 (in the case of commercial buildings) as of the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2015; and

added “(bb) meet or exceed the energy provisions of State and local building codes applicable to the building, if the codes are more stringent than the International Energy Conservation Code or ASHRAE Standard 90.1, as applicable;

added “(II) unless demonstrated not to be life-cycle cost effective for new Federal buildings and Federal buildings with major renovations—

added “(aa) the buildings be designed to achieve energy consumption levels that are at least 30 percent below the levels established in the version of the ASHRAE Standard or the International Energy Conservation Code, as appropriate, that is applied under subclause (I)(aa), including updates under subparagraph (B); and

added “(bb) sustainable design principles are applied to the location, siting, design, and construction of all new Federal buildings and replacement Federal buildings;

added “(III) if water is used to achieve energy efficiency, water conservation technologies shall be applied to the extent that the technologies are life-cycle cost effective; and

added “(IV) if life-cycle cost effective, as compared to other reasonably available technologies, not less than 30 percent of the hot water demand for each new Federal building or Federal building undergoing a major renovation be met through the installation and use of solar hot water heaters.

added “(ii) Limitation—Clause (i)(I) shall not apply to unaltered portions of existing Federal buildings and systems that have been added to or altered.

added “(B) Updates—Not later than 1 year after the date of approval of each subsequent revision of the ASHRAE Standard or the International Energy Conservation Code, as appropriate, the Secretary shall determine whether the revised standards established under subparagraph (A) should be updated to reflect the revisions, based on the energy savings and life-cycle cost-effectiveness of the revisions.”

(B)
added in subparagraph (C), by striking “(C) In the budget request” and inserting the following:

added “(C) Budget request—In the budget request”

(C)
added by striking subparagraph (D) and inserting the following:

added “(D) Certification for green buildings

added “(i) Sustainable design principles—Sustainable design principles shall be applied to the siting, design, and construction of buildings covered by this subparagraph.

added “(ii) Selection of certification systems—The Secretary, after reviewing the findings of the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)), in consultation with the Administrator of General Services, and in consultation with the Secretary of Defense relating to those facilities under the custody and control of the Department of Defense, shall determine those certification systems for green commercial and residential buildings that the Secretary determines to be the most likely to encourage a comprehensive and environmentally sound approach to certification of green buildings.

added “(iii) Basis for selection—The determination of the certification systems under clause (ii) shall be based on ongoing review of the findings of the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)) and the criteria described in clause (v).

added “(iv) Administration—In determining certification systems under this subparagraph, the Secretary shall—

added “(I) make a separate determination for all or part of each system;

added “(II) confirm that the criteria used to support the selection of building products, materials, brands, and technologies are fair and neutral (meaning that such criteria are based on an objective assessment of relevant technical data), do not prohibit, disfavor, or discriminate against selection based on technically inadequate information to inform human or environmental risk, and are expressed to prefer performance measures whenever performance measures may reasonably be used in lieu of prescriptive measures; and

added “(III) use environmental and health criteria that are based on risk assessment methodology that is generally accepted by the applicable scientific disciplines.

added “(v) Considerations—In determining the green building certification systems under this subparagraph, the Secretary shall take into consideration—

added “(I) the ability and availability of assessors and auditors to independently verify the criteria and measurement of metrics at the scale necessary to implement this subparagraph;

added “(II) the ability of the applicable certification organization to collect and reflect public comment;

added “(III) the ability of the standard to be developed and revised through a consensus-based process;

added “(IV) an evaluation of the robustness of the criteria for a high-performance green building, which shall give credit for promoting—

added “(aa) efficient and sustainable use of water, energy, and other natural resources;

added “(bb) use of renewable energy sources;

added “(cc) improved indoor environmental quality through enhanced indoor air quality, thermal comfort, acoustics, day lighting, pollutant source control, and use of low-emission materials and building system controls; and

added “(dd) such other criteria as the Secretary determines to be appropriate; and

added “(V) national recognition within the building industry.

added “(vi) Review—The Secretary, in consultation with the Administrator of General Services and the Secretary of Defense, shall conduct an ongoing review to evaluate and compare private sector green building certification systems, taking into account—

added “(I) the criteria described in clause (v); and

added “(II) the identification made by the Federal Director under section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)).

added “(vii) Exclusions

added “(I) In general—Subject to subclause (II), if a certification system fails to meet the review requirements of clause (v), the Secretary shall—

added “(aa) identify the portions of the system, whether prerequisites, credits, points, or otherwise, that meet the review criteria of clause (v);

added “(bb) determine the portions of the system that are suitable for use; and

added “(cc) exclude all other portions of the system from identification and use.

added “(II) Entire systems—The Secretary shall exclude an entire system from use if an exclusion under subclause (I)—

added “(aa) impedes the integrated use of the system;

added “(bb) creates disparate review criteria or unequal point access for competing materials; or

added “(cc) increases agency costs of the use.

added “(viii) Internal certification processes—The Secretary may by rule allow Federal agencies to develop internal certification processes, using certified professionals, in lieu of certification by certification entities identified under clause (ii).

added “(ix) Privatized military housing—With respect to privatized military housing, the Secretary of Defense, after consultation with the Secretary may, through rulemaking, develop alternative certification systems and levels than the systems and levels identified under clause (ii) that achieve an equivalent result in terms of energy savings, sustainable design, and green building performance.

added “(x) Water conservation technologies—In addition to any use of water conservation technologies otherwise required by this section, water conservation technologies shall be applied to the extent that the technologies are life-cycle cost-effective.

added “(xi) Effective date

added “(I) Determinations made after December 31, 2015—The amendments made by section 432(b)(1)(C) of Energy Savings and Industrial Competitiveness Act of 2015 shall apply to any determination made by a Federal agency after December 31, 2015.

added “(II) Determinations made on or before December 31, 2015—This subparagraph (as in effect on the day before the date of enactment of Energy Savings and Industrial Competitiveness Act of 2015) shall apply to any use of a certification system for green commercial and residential buildings by a Federal agency on or before December 31, 2015.”

(2)
added by striking subsections (c) and (d) and inserting the following:

added “(c) Periodic review—The Secretary shall—

added “(1) once every 5 years, review the Federal building energy standards established under this section; and

added “(2) on completion of a review under paragraph (1), if the Secretary determines that significant energy savings would result, upgrade the standards to include all new energy efficiency and renewable energy measures that are technologically feasible and economically justified.”

Sec. 4323 Enhanced energy efficiency underwriting

added
(a)
added Definitions— In this section:
(1)
added Covered agency— The term covered agency—
(A)
added means—
(i)
added an executive agency, as that term is defined in section 102 of title 31, United States Code; and
(ii)
added any other agency of the Federal Government; and
(B)
added includes any enterprise, as that term is defined under section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502).
(2)
added Covered loan— The term covered loan means a loan secured by a home that is issued, insured, purchased, or securitized by a covered agency.
(3)
added Homeowner— The term homeowner means the mortgagor under a covered loan.
(4)
added Mortgagee— The term mortgagee means—
(A)
added an original lender under a covered loan or the holder of a covered loan at the time at which that mortgage transaction is consummated;
(B)
added any affiliate, agent, subsidiary, successor, or assignee of an original lender under a covered loan or the holder of a covered loan at the time at which that mortgage transaction is consummated;
(C)
added any servicer of a covered loan; and
(D)
added any subsequent purchaser, trustee, or transferee of any covered loan issued by an original lender.
(5)
added Secretary— The term Secretary means the Secretary of Housing and Urban Development.
(6)
added Servicer— The term servicer means the person or entity responsible for the servicing of a covered loan, including the person or entity who makes or holds a covered loan if that person or entity also services the covered loan.
(7)
added Servicing— The term servicing has the meaning given the term in section 6(i) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)).
(b)
added Findings and purposes—
(1)
added Findings— Congress finds that—
(A)
added energy costs for homeowners are a significant and increasing portion of their household budgets;
(B)
added household energy use can vary substantially depending on the efficiency and characteristics of the house;
(C)
added expected energy cost savings are important to the value of the house;
(D)
added the current test for loan affordability used by most covered agencies, commonly known as the debt-to-income test, is inadequate because it does not take into account the expected energy cost savings for the homeowner of an energy efficient home; and
(E)
added another loan limitation, commonly known as the loan-to-value test, is tied to the appraisal, which often does not adjust for efficiency features of houses.
(2)
added Purposes— The purposes of this section are to—
(A)
added improve the accuracy of mortgage underwriting by Federal mortgage agencies by ensuring that energy cost savings are included in the underwriting process as described below, and thus to reduce the amount of energy consumed by homes and to facilitate the creation of energy efficiency retrofit and construction jobs;
(B)
added require a covered agency to include the expected energy cost savings of a homeowner as a regular expense in the tests, such as the debt-to-income test, used to determine the ability of the loan applicant to afford the cost of homeownership for all loan programs; and
(C)
added require a covered agency to include the value home buyers place on the energy efficiency of a house in tests used to compare the mortgage amount to home value, taking precautions to avoid double-counting and to support safe and sound lending.
(c)
added Enhanced energy efficiency underwriting criteria—
(1)
added In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall, in consultation with the advisory group established in subsection (f)(2), develop and issue guidelines for a covered agency to implement enhanced loan eligibility requirements, for use when testing the ability of a loan applicant to repay a covered loan, that account for the expected energy cost savings for a loan applicant at a subject property, in the manner set forth in paragraphs (2) and (3).
(2)
added Requirements To account for energy cost savings— The enhanced loan eligibility requirements under paragraph (1) shall require that, for all covered loans for which an energy efficiency report is voluntarily provided to the mortgagee by the mortgagor, the covered agency and the mortgagee shall take into consideration the estimated energy cost savings expected for the owner of the subject property in determining whether the loan applicant has sufficient income to service the mortgage debt plus other regular expenses. To the extent that a covered agency uses a test such as a debt-to-income test that includes certain regular expenses, such as hazard insurance and property taxes, the expected energy cost savings shall be included as an offset to these expenses. Energy costs to be assessed include the cost of electricity, natural gas, oil, and any other fuel regularly used to supply energy to the subject property.
(3)
added Determination of estimated energy cost savings—
(A)
added In general— The guidelines to be issued under paragraph (1) shall include instructions for the covered agency to calculate estimated energy cost savings using—
(i)
added the energy efficiency report;
(ii)
added an estimate of baseline average energy costs; and
(iii)
added additional sources of information as determined by the Secretary.
(B)
added Report requirements— For the purposes of subparagraph (A), an energy efficiency report shall—
(i)
added estimate the expected energy cost savings specific to the subject property, based on specific information about the property;
(ii)
added be prepared in accordance with the guidelines to be issued under paragraph (1); and
(iii)
added be prepared—
(I)
added in accordance with the Residential Energy Service Network’s Home Energy Rating System (commonly known as HERS) by an individual certified by the Residential Energy Service Network, unless the Secretary finds that the use of HERS does not further the purposes of this section; or
(II)
added by other methods approved by the Secretary, in consultation with the Secretary of Energy and the advisory group established in subsection (f)(2), for use under this section, which shall include a third-party quality assurance procedure.
(C)
added Use by appraiser— If an energy efficiency report is used under paragraph (2), the energy efficiency report shall be provided to the appraiser to estimate the energy efficiency of the subject property and for potential adjustments for energy efficiency.
(4)
added Required disclosure to consumer for a home with an energy efficiency report— If an energy efficiency report is used under paragraph (2), the guidelines to be issued under paragraph (1) shall require the mortgagee to—
(A)
added inform the loan applicant of the expected energy costs as estimated in the energy efficiency report, in a manner and at a time as prescribed by the Secretary, and if practicable, in the documents delivered at the time of loan application; and
(B)
added include the energy efficiency report in the documentation for the loan provided to the borrower.
(5)
added Required disclosure to consumer for a home without an energy efficiency report— If an energy efficiency report is not used under paragraph (2), the guidelines to be issued under paragraph (1) shall require the mortgagee to inform the loan applicant in a manner and at a time as prescribed by the Secretary, and if practicable, in the documents delivered at the time of loan application of—
(A)
added typical energy cost savings that would be possible from a cost-effective energy upgrade of a home of the size and in the region of the subject property;
(B)
added the impact the typical energy cost savings would have on monthly ownership costs of a typical home;
(C)
added the impact on the size of a mortgage that could be obtained if the typical energy cost savings were reflected in an energy efficiency report; and
(D)
added resources for improving the energy efficiency of a home.
(6)
added Pricing of loans—
(A)
added In general— A covered agency may price covered loans originated under the enhanced loan eligibility requirements required under this section in accordance with the estimated risk of the loans.
(B)
added Imposition of certain material costs, impediments, or penalties— In the absence of a publicly disclosed analysis that demonstrates significant additional default risk or prepayment risk associated with the loans, a covered agency shall not impose material costs, impediments, or penalties on covered loans merely because the loan uses an energy efficiency report or the enhanced loan eligibility requirements required under this section.
(7)
added Limitations—
(A)
added In general— A covered agency may price covered loans originated under the enhanced loan eligibility requirements required under this section in accordance with the estimated risk of those loans.
(B)
added Prohibited actions— A covered agency shall not—
(i)
added modify existing underwriting criteria or adopt new underwriting criteria that intentionally negate or reduce the impact of the requirements or resulting benefits that are set forth or otherwise derived from the enhanced loan eligibility requirements required under this subsection; or
(ii)
added impose greater buy back requirements, credit overlays, or insurance requirements, including private mortgage insurance, on covered loans merely because the loan uses an energy efficiency report or the enhanced loan eligibility requirements required under this subsection.
(8)
added Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2017, the enhanced loan eligibility requirements required under this subsection shall be implemented by each covered agency to—
(A)
added apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home;
(B)
added be available on any residential real property (including individual units of condominiums and cooperatives) that qualifies for a covered loan; and
(C)
added provide prospective mortgagees with sufficient guidance and applicable tools to implement the required underwriting methods.
(d)
added Enhanced energy efficiency underwriting valuation guidelines—
(1)
added In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall—
(A)
added in consultation with the Federal Financial Institutions Examination Council and the advisory group established in subsection (f)(2), develop and issue guidelines for a covered agency to determine the maximum permitted loan amount based on the value of the property for all covered loans made on properties with an energy efficiency report that meets the requirements of subsection (c)(3)(B); and
(B)
added in consultation with the Secretary of Energy, issue guidelines for a covered agency to determine the estimated energy savings under paragraph (3) for properties with an energy efficiency report.
(2)
added Requirements— The enhanced energy efficiency underwriting valuation guidelines required under paragraph (1) shall include—
(A)
added a requirement that if an energy efficiency report that meets the requirements of subsection (c)(3)(B) is voluntarily provided to the mortgagee, such report shall be used by the mortgagee or covered agency to determine the estimated energy savings of the subject property; and
(B)
added a requirement that the estimated energy savings of the subject property be added to the appraised value of the subject property by a mortgagee or covered agency for the purpose of determining the loan-to-value ratio of the subject property, unless the appraisal includes the value of the overall energy efficiency of the subject property, using methods to be established under the guidelines issued under paragraph (1).
(3)
added Determination of estimated energy savings—
(A)
added Amount of energy savings— The amount of estimated energy savings shall be determined by calculating the difference between the estimated energy costs for the average comparable houses, as determined in guidelines to be issued under paragraph (1), and the estimated energy costs for the subject property based upon the energy efficiency report.
(B)
added Duration of energy savings— The duration of the estimated energy savings shall be based upon the estimated life of the applicable equipment, consistent with the rating system used to produce the energy efficiency report.
(C)
added Present value of energy savings— The present value of the future savings shall be discounted using the average interest rate on conventional 30-year mortgages, in the manner directed by guidelines issued under paragraph (1).
(4)
added Ensuring consideration of energy efficient features— Section 1110 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339) is amended—
(A)
added in paragraph (2), by striking “; and” and inserting a semicolon; and
(B)
added in paragraph (3), by striking the period at the end and inserting “; and” and inserting after paragraph (3) the following:

added “(4) that State certified and licensed appraisers have timely access, whenever practicable, to information from the property owner and the lender that may be relevant in developing an opinion of value regarding the energy- and water-saving improvements or features of a property, such as—

added “(A) labels or ratings of buildings;

added “(B) installed appliances, measures, systems or technologies;

added “(C) blueprints;

added “(D) construction costs;

added “(E) financial or other incentives regarding energy- and water-efficient components and systems installed in a property;

added “(F) utility bills;

added “(G) energy consumption and benchmarking data; and

added “(H) third-party verifications or representations of energy and water efficiency performance of a property, observing all financial privacy requirements adhered to by certified and licensed appraisers, including section 501 of the Gramm-Leach-Bliley Act (15 U.S.C. 6801).”

(5)
added Transactions requiring state certified appraisers— Section 1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342) is amended—
(A)
added in paragraph (1), by inserting before the semicolon the following: “, or any real property on which the appraiser makes adjustments using an energy efficiency report”; and
(B)
added in paragraph (2), by inserting after “atypical” the following: “, or an appraisal on which the appraiser makes adjustments using an energy efficiency report.”.
(6)
added Protections—
(A)
added Authority to impose limitations— The guidelines to be issued under paragraph (1) shall include such limitations and conditions as determined by the Secretary to be necessary to protect against meaningful under or over valuation of energy cost savings or duplicative counting of energy efficiency features or energy cost savings in the valuation of any subject property that is used to determine a loan amount.
(B)
added Additional authority— At the end of the 7-year period following the implementation of enhanced eligibility and underwriting valuation requirements under this section, the Secretary may modify or apply additional exceptions to the approach described in paragraph (2), where the Secretary finds that the unadjusted appraisal will reflect an accurate market value of the efficiency of the subject property or that a modified approach will better reflect an accurate market value.
(7)
added Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2017, each covered agency shall implement the guidelines required under this subsection, which shall—
(A)
added apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home; and
(B)
added be available on any residential real property, including individual units of condominiums and cooperatives, that qualifies for a covered loan.
(e)
added Monitoring— Not later than 1 year after the date on which the enhanced eligibility and underwriting valuation requirements are implemented under this section, and every year thereafter, each covered agency with relevant activity shall issue and make available to the public a report that—
(1)
added enumerates the number of covered loans of the agency for which there was an energy efficiency report, and that used energy efficiency appraisal guidelines and enhanced loan eligibility requirements;
(2)
added includes the default rates and rates of foreclosures for each category of loans; and
(3)
added describes the risk premium, if any, that the agency has priced into covered loans for which there was an energy efficiency report.
(f)
added Rulemaking—
(1)
added In general— The Secretary shall prescribe regulations to carry out this section, in consultation with the Secretary of Energy and the advisory group established in paragraph (2), which may contain such classifications, differentiations, or other provisions, and may provide for such proper implementation and appropriate treatment of different types of transactions, as the Secretary determines are necessary or proper to effectuate the purposes of this section, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.
(2)
added Advisory group— To assist in carrying out this section, the Secretary shall establish an advisory group, consisting of individuals representing the interests of—
(A)
added mortgage lenders;
(B)
added appraisers;
(C)
added energy raters and residential energy consumption experts;
(D)
added energy efficiency organizations;
(E)
added real estate agents;
(F)
added home builders and remodelers;
(G)
added State energy officials; and
(H)
added others as determined by the Secretary.
(g)
added Additional study—
(1)
added In general— Not later than 18 months after the date of enactment of this Act, the Secretary shall reconvene the advisory group established in subsection (f)(2), in addition to water and locational efficiency experts, to advise the Secretary on the implementation of the enhanced energy efficiency underwriting criteria established in subsections (c) and (d).
(2)
added Recommendations— The advisory group established in subsection (f)(2) shall provide recommendations to the Secretary on any revisions or additions to the enhanced energy efficiency underwriting criteria deemed necessary by the group, which may include alternate methods to better account for home energy costs and additional factors to account for substantial and regular costs of homeownership such as location-based transportation costs and water costs. The Secretary shall forward any legislative recommendations from the advisory group to Congress for its consideration.

Sec. 431 Voluntary verification programs for air conditioning, furnace, boiler, heat pump, and water heater products

added

added Section 326(b) of the Energy Policy and Conservation Act (42 U.S.C. 6296(b)) is amended by adding at the end the following:

added “(6) Voluntary verification programs for air conditioning, furnace, boiler, heat pump, and water heater products

added “(A) Reliance on voluntary programs—For the purpose of periodic testing to verify compliance with energy conservation standards and Energy Star specifications established under sections 324A, 325, and 342 for covered products described in paragraphs (3), (4), (5), (9), and (11) of section 322(a) and covered equipment described in subparagraphs (B), (C), (D), (F), (I), (J), and (K) of section 340(1), the Secretary and the Administrator of the Environmental Protection Agency shall rely on testing conducted by voluntary verification programs that are recognized by the Secretary in accordance with subparagraph (B).

added “(B) Recognition of voluntary verification programs

added “(i) In general—Not later than 180 days after the date of enactment of this paragraph, the Secretary shall initiate a negotiated rulemaking in accordance with subchapter III of chapter 5 of title 5, United States Code (commonly known as the “Negotiated Rulemaking Act of 1990”) to develop criteria that have consensus support for achieving recognition by the Secretary as an approved voluntary verification program.

added “(ii) Minimum requirements—The criteria developed under clause (i) shall, at a minimum, ensure that the voluntary verification program—

added “(I) is nationally recognized;

added “(II) is operated by a third party and not directly operated by a program participant;

added “(III) satisfies any applicable elements of—

added “(aa) International Organization for Standardization standard numbered 17025; and

added “(bb) any other relevant International Organization for Standardization standards identified and agreed to through the negotiated rulemaking under clause (i);

added “(IV) at least annually tests independently obtained products following the test procedures established under this title to verify the certified rating of a representative sample of products and equipment within the scope of the program;

added “(V) maintains a publicly available list of all ratings of products subject to verification;

added “(VI) requires the changing of the performance rating or removal of the product or equipment from the program if testing determines that the performance rating does not meet the levels the manufacturer has certified to the Secretary;

added “(VII) requires new program participants to substantiate ratings through test data generated in accordance with DOE regulations;

added “(VIII) allows for challenge testing of products and equipment within the scope of the program;

added “(IX) requires program participants to disclose the performance rating of all covered products and equipment within the scope of the program for the covered product or equipment;

added “(X) provides to the Secretary—

added “(aa) an annual report of all test results, the contents of which shall be determined through the negotiated rulemaking process under clause (i); and

added “(bb) test reports, on the request of the Secretary or the Administrator of the Environmental Protection Agency, that note any instructions specified by the manufacturer or the representative of the manufacturer for the purpose of conducting the verification testing, to be exempted from disclosure to the extent provided under section 552(b)(4) of title 5, United States Code (commonly known as the “Freedom of Information Act”); and

added “(XI) satisfies any additional requirements or standards that the Secretary and Administrator of the Environmental Protection Agency shall establish consistent with this subparagraph.

added “(iii) Finding required for cessation of recognition—The Secretary may only cease recognition of a voluntary verification program as an approved program described in subparagraph (A) on a finding that the program is not meeting its obligations for compliance through program review criteria established under this subparagraph.

added “(iv) Revisions

added “(I) In general—Major revisions to voluntary verification program criteria established under this subparagraph shall only be made pursuant to a subsequent negotiated rulemaking in accordance with subchapter III of chapter 5 of title 5, United States Code (commonly known as the “Negotiated Rulemaking Act of 1990”).

added “(II) Nonmajor revisions

added “(aa) In general—The Secretary may make all other nonmajor criteria revisions by initiating a direct final rule in accordance with section 553(b)(3)(B) of title 5, United States Code, on a determination published in the Federal Register that revisions to the criteria are necessary and that substantive opposition to the proposed revisions is not expected.

added “(bb) Conditions for effectiveness—If the Secretary does not receive adversarial comments with respect to the determination published under item (aa) during the 30-day-period following publication of that determination in the Federal Register, the direct final rule shall have the force and effect of law.

added “(cc) Withdrawal of final rule—Receipt of any adversarial comment with respect to the determination published under item (aa) shall require the Secretary to withdraw the direct final rule and publish—

added “(AA) a notice of proposed rulemaking pursuant to section 553 of title 5, United States Code; or

added “(BB) a notice of proposed rulemaking pursuant to section 553 of title 5, United States Code, that includes a determination that revisions to the criteria are necessary.

added “(C) Administration

added “(i) In general—The Secretary and the Administrator of the Environmental Protection Agency shall not require—

added “(I) manufacturers to participate in a voluntary verification program described in subparagraph (A); or

added “(II) participating manufacturers to provide information that has already been provided to the Secretary or the Administrator.

added “(ii) List of covered products—The Secretary or the Administrator of the Environmental Protection Agency may maintain a publicly available list of covered products and equipment that distinguishes between products that are, and are not covered products and equipment verified through a voluntary verification program described in subparagraph (A);

added “(iii) Periodic verification testing

added “(I) In general—The Secretary—

added “(aa) shall not subject products or equipment that have been verification tested under a voluntary verification program described in subparagraph (A) to periodic verification testing that verifies the accuracy of the certified performance rating of the products or equipment; but

added “(bb) may test products or equipment described in subclause (I) if the testing is necessary—

added “(AA) to assess the overall performance of a voluntary verification program;

added “(BB) to address specific performance issues;

added “(CC) for use in updating test procedures and standards; or

added “(DD) for other purposes consistent with this title.

added “(II) Additional testing—The Secretary may subject products or equipment described in subclause (I) to periodic verification testing outside the restrictions of subclause (I)(bb), if agreed to during the rulemaking described in subparagraph (B)

added “(D) Effect on other authority—Nothing in this paragraph limits the authority of the Secretary or the Administrator of the Environmental Protection Agency to enforce compliance with any law.”