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Title IV — Regulatory Provisions

S. 2137 · 116th Congress · Jul 17, 2019 · Lineage

IV Regulatory Provisions

A Third-Party Certification Under Energy Star Program

Sec. 401 Third-Party Certification Under Energy Star Program

Section 324A of the Energy Policy and Conservation Act (42 U.S.C. 6294a) is amended by adding at the end the following:

“(e) Third-Party Certification

“(1) In general—Subject to paragraph (2), not later than 180 days after the date of enactment of this subsection, the Administrator shall revise the certification requirements for the labeling of consumer, home, and office electronic products for program partners that have complied with all requirements of the Energy Star program for a period of at least 18 months.

“(2) Administration—In the case of a program partner described in paragraph (1), the new requirements under paragraph (1)—

“(A) shall not require third-party certification for a product to be listed; but

“(B) may require that test data and other product information be submitted to facilitate product listing and performance verification for a sample of products.

“(3) Third parties—Nothing in this subsection prevents the Administrator from using third parties in the course of the administration of the Energy Star program.

“(4) Termination

“(A) In general—Subject to subparagraph (B), an exemption from third-party certification provided to a program partner under paragraph (1) shall terminate if the program partner is found to have violated program requirements with respect to at least 2 separate models during a 2-year period.

“(B) Resumption—A termination for a program partner under subparagraph (A) shall cease if the program partner complies with all Energy Star program requirements for a period of at least 3 years.”

B Federal Green Buildings

Sec. 411 High-performance green Federal buildings

Section 436(h) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(h)) is amended—
(1)
in the subsection heading, by striking “system” and inserting “systems”;
(2)
by striking paragraph (1) and inserting the following:

“(1) In general—Based on an ongoing review, the Federal Director shall identify and shall provide to the Secretary pursuant to section 305(a)(3)(D) of the Energy Conservation and Production Act (42 U.S.C. 6834(a)(3)(D)) a list of those certification systems that the Director identifies as the most likely to encourage a comprehensive and environmentally sound approach to certification of green buildings.”

(3)
in paragraph (2)—
(A)
in the matter preceding subparagraph (A), by striking “system” and inserting “systems”;
(B)
by striking subparagraph (A) and inserting the following:

“(A) an ongoing review provided to the Secretary pursuant to section 305(a)(3)(D) of the Energy Conservation and Production Act (42 U.S.C. 6834(a)(3)(D)), which shall—

“(i) be carried out by the Federal Director to compare and evaluate standards; and

“(ii) allow any developer or administrator of a rating system or certification system to be included in the review;”

(C)
in subparagraph (E)(v), by striking “and” after the semicolon at the end;
(D)
in subparagraph (F), by striking the period at the end and inserting a semicolon; and
(E)
by adding at the end the following:

“(G) a finding that, for all credits addressing the sourcing of grown, harvested, or mined materials, the system rewards the use of products that have obtained certifications of responsible sourcing, such as certifications provided by the Sustainable Forestry Initiative, the Forest Stewardship Council, the American Tree Farm System, or the Programme for the Endorsement of Forest Certification; and

“(H) a finding that the system incorporates life-cycle assessment as a credit pathway.”

C Energy and Water Performance Requirements for Federal Buildings

Sec. 421 Energy and water performance requirements for Federal buildings

(a)
In general— Section 543 of the National Energy Conservation Policy Act (42 U.S.C. 8253) is amended—
(1)
in the section heading, by inserting “and water” after “Energy”;
(2)
by striking subsection (a) and inserting the following:

“(a) Energy and water performance requirements for Federal buildings

“(1) Energy requirements—Subject to paragraph (3), to the maximum extent life cycle cost-effective (as defined in subsection (f)(1)), 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 2020 through 2027 is reduced, as compared with the energy consumption per gross square foot of the Federal buildings of the agency in fiscal year 2018, by the percentage specified in the following table:

“(2) Water requirements—Subject to paragraph (3), the head of each Federal agency shall, for each of fiscal years 2020 through 2030, improve water use efficiency and management, including stormwater management, at facilities of the agency by reducing agency potable water consumption intensity—

“(A) by 54 percent by fiscal year 2030, relative to the water consumption of the agency in fiscal year 2007, through reductions of 2 percent each fiscal year (as measured in gallons per gross square foot);

“(B) by reducing the industrial, landscaping, and agricultural water consumption of the agency, as compared to a baseline of that consumption by the agency in fiscal year 2010, through reductions of 2 percent each fiscal year (as measured in gallons); and

“(C) by installing appropriate infrastructure features on federally owned property to improve stormwater and wastewater management.

“(3) Energy and water intensive building exclusion

“(A) In general—An agency may exclude from the requirements of paragraphs (1) and (2) any building (including the associated energy consumption and gross square footage of the building) in which energy and water intensive activities are carried out.

“(B) Reports—Each agency shall identify and include in each report under section 548(a) each building designated by the agency for exclusion under subparagraph (A) during the period covered by the report.

“(4) Recommendations—Not later than December 31, 2026, the Secretary shall—

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

“(B) submit to Congress recommendations concerning energy performance requirements for fiscal years 2028 through 2037; and

“(C) submit to Congress recommendations concerning water performance requirements for fiscal years 2031 through 2040.”

(3)
in subsection (b)—
(A)
in the subsection heading, by inserting “and water” after “Energy”;
(B)
by redesignating paragraphs (2) through (4) as paragraphs (3) through (5), respectively; and
(C)
by striking paragraph (1) and inserting the following:

“(1) In general—Each agency shall—

“(A) not later than October 1, 2019, to the maximum extent practicable, begin installing in Federal buildings owned by the United States all energy and water conservation measures determined by the Secretary to be life cycle cost-effective (as defined in subsection (f)(1)); and

“(B) complete the installation described in subparagraph (A) as soon as practicable after the date referred to in that subparagraph.

“(2) Explanation of noncompliance

“(A) In general—If an agency fails to comply with paragraph (1), the agency shall submit to the Secretary, using guidelines developed by the Secretary, an explanation of the reasons for the failure.

“(B) Report to congress—Not later than October 1, 2021, and every 2 years thereafter, the Secretary shall submit to Congress a report that describes any noncompliance by an agency with the requirements of paragraph (1).”

(4)
in subsection (c)(1)—
(A)
in subparagraph (A)—
(i)
in the matter preceding clause (i), by striking “An agency” and inserting “The head of each agency”; and
(ii)
by inserting “or water” after “energy” each place it appears; and
(B)
in subparagraph (B)(i), by inserting “or water” after “energy”;
(5)
in subsection (d)(2), by inserting “and water” after “energy”;
(6)
in subsection (e)—
(A)
in the subsection heading, by inserting “and Water” after “Energy”;
(B)
in paragraph (1)—
(i)
in the first sentence—
(I)
by striking “October 1, 2012” and inserting “October 1, 2020”;
(II)
by inserting “and water” after “energy”; and
(III)
by inserting “and water” after “electricity”;
(ii)
in the second sentence, by inserting “and water” after “electricity”; and
(iii)
in the fourth sentence, by inserting “and water” after “energy”;
(C)
in paragraph (2)—
(i)
in subparagraph (A)—
(I)
by striking “and” before “Federal”; and
(II)
by inserting “and any other person the Secretary deems necessary,” before “shall”;
(ii)
in subparagraph (B)—
(I)
in clause (i)(II), by inserting “and water” after “energy” each place it appears;
(II)
in clause (ii), by inserting “and water” after “energy”; and
(III)
in clause (iv), by inserting “and water” after “energy”; and
(iii)
by adding at the end the following:

“(C) Update—Not later than 180 days after the date of enactment of this subparagraph, the Secretary shall update the guidelines established under subparagraph (A) to take into account water efficiency requirements under this section.”

(D)
in paragraph (3), in the matter preceding subparagraph (A), by striking “established under paragraph (2)” and inserting “updated under paragraph (2)(C)”; and
(E)
in paragraph (4)—
(i)
in subparagraph (A)—
(I)
by striking “this paragraph” and inserting “the Energy Savings and Industrial Competitiveness Act of 2019”; and
(II)
by inserting “and water” before “use in”; and
(ii)
in subparagraph (B)(ii), in the matter preceding clause (I), by inserting “and water” after “energy”; and
(7)
in subsection (f)—
(A)
in paragraph (1)—
(i)
by redesignating subparagraphs (E), (F), and (G) as subparagraphs (F), (G), and (H), respectively; and
(ii)
by inserting after subparagraph (D) the following:

“(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)
in paragraph (2)—
(i)
in subparagraph (A), by inserting “and water” before “use”;
(ii)
in subparagraph (B)—
(I)
by striking “energy” before “efficiency”; and
(II)
by inserting “or water” before “use”; and
(iii)
by adding at the end the following:

“(C) Energy management system—An energy manager designated for a facility under subparagraph (A) shall take into consideration—

“(i) the use of a system to manage energy and water use at the facility; and

“(ii) the applicability of the certification of the facility in accordance with the International Organization for Standardization standard numbered 50001 and entitled “Energy Management Systems”.”

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

“(3) Energy and water evaluations and commissioning

“(A) Evaluations—Except as provided in subparagraph (B), not later than the date that is 180 days after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2019, and annually thereafter, each energy manager shall complete, for the preceding calendar year, a comprehensive energy and water evaluation and recommissioning or retrocommissioning for approximately 25 percent of the facilities of the applicable agency that meet the criteria under paragraph (2)(B) in a manner that ensures that an evaluation of each facility is completed not less frequently than once every 4 years.

“(B) Exceptions—An evaluation and recommissioning or retrocommissioning shall not be required under subparagraph (A) with respect to a facility that, as of the date on which the evaluation and recommissioning or re­tro­com­mis­sion­ing would occur—

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

“(ii)

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

“(II) is under ongoing commissioning, recommissioning, or retrocomissioning;

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

“(iv) has been benchmarked with public disclosure under paragraph (8) during the preceding calendar year; and

“(v)

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

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

“(bb) the date—

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

“(BB) on which ongoing commissioning began; or

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

“(4) Implementation of identified energy and water efficiency measures—Not later than 2 years after the date of completion of each evaluation under paragraph (3), each energy manager shall—

“(A) implement any energy- or water-saving measure that the Federal agency identified in the evaluation that is life cycle cost-effective; and

“(B) bundle individual measures of varying paybacks together into combined projects.”

(D)
in paragraph (7)(B)(ii)(II), by inserting “and water” after “energy”; and
(E)
in paragraph (9)(A), in the matter preceding clause (i), by inserting “and water” after “energy”.
(b)
Conforming amendment— The table of contents for the National Energy Conservation Policy Act (Public Law 95–619; 92 Stat. 3206) is amended by striking the item relating to section 543 and inserting the following:

Sec. 422 Federal Energy Management Program

Section 543 of the National Energy Conservation Policy Act (42 U.S.C. 8253) (as amended by section 301) is amended by adding at the end the following:

“(hi) Federal Energy Management Program

“(1) In general—The Secretary shall establish a program, to be known as the “Federal Energy Management Program” (referred to in this subsection as the “Program”), to facilitate the implementation by the Federal Government of cost-effective energy and water management and energy-related investment practices—

“(A) to coordinate and strengthen Federal energy and water resilience; and

“(B) to promote environmental stewardship.

“(2) Program activities

“(A) Strategic planning and technical assistance—Under the Program, the Federal Director appointed under paragraph (3)(A) (referred to in this subsection as the “Federal Director”) shall—

“(i) provide technical assistance and project implementation support and guidance to Federal agencies to identify, implement, procure, and track energy and water conservation measures required under this Act and under other provisions of law (including regulations);

“(ii) in coordination with the Administrator of the General Services Administration, establish appropriate procedures, methods, and best practices for use by Federal agencies to select, monitor, and terminate contracts entered into under section 546 with utilities;

“(iii) in coordination with the Federal Acquisition Regulatory Council, establish appropriate procedures, methods, and best practices for use by Federal agencies to select, monitor, and terminate contracts entered into under section 801 with energy service contractors and utilities;

“(iv) establish and maintain internet-based information resources and project tracking systems and tools for energy and water management;

“(v) coordinate comprehensive and strategic approaches to energy and water resilience planning for Federal agencies; and

“(vi) establish a recognition program for Federal achievement in energy and water management, energy-related investment practices, environmental stewardship, and other relevant areas, through events such as individual recognition award ceremonies and public announcements.

“(B) Energy and water management and reporting—Under the Program, the Federal Director shall—

“(i) track and report on the progress of Federal agencies in meeting the requirements of the agency under this section;

“(ii) make publicly available annual Federal agency performance data required under—

“(I) this section and sections 544 through 548; and

“(II) section 203 of the Energy Policy Act of 2005 (42 U.S.C. 15852);

“(iii)

“(I) collect energy and water use and consumption data from each Federal agency; and

“(II) based on that data, submit to each Federal agency a report that will facilitate the energy and water management, energy-related investment practices, and environmental stewardship of the agency in support of Federal goals under this Act and under other provisions of law (including regulations);

“(iv)

“(I) establish new Federal building energy efficiency standards; and

“(II) in consultation with the Administrator of the General Services Administration, acting through the head of the Office of High-Performance Green Buildings, establish and implement Federal building sustainable design principles for Federal facilities;

“(v) manage the implementation of Federal building energy efficiency standards established under section 305 of the Energy Conservation and Production Act (42 U.S.C. 6834); and

“(vi) designate products that meet the highest energy conservation standards for categories not covered under the Energy Star program established under section 324A of the Energy Policy and Conservation Act (42 U.S.C. 6294a).

“(C) Federal policy coordination—Under the Program, the Federal Director shall—

“(i) develop and implement accredited training consistent with existing Federal programs and activities—

“(I) relating to energy and water use, management, and resilience in Federal buildings, energy-related investment practices, and environmental stewardship; and

“(II) that includes in-person training, internet-based programs, and national in-person training events;

“(ii) coordinate and facilitate energy and water management, energy-related investment practices, and environmental stewardship through the Interagency Energy Management Task Force established under section 547; and

“(iii) report on the implementation of the priorities of the President, including Executive orders, relating to energy and water use in Federal buildings, in coordination with—

“(I) the Office of Management and Budget;

“(II) the Council on Environmental Quality; and

“(III) any other entity, as considered necessary by the Federal Director.

“(D) Facility and fleet optimization—Under the Program, the Federal Director shall develop guidance, supply assistance to, and track the progress of Federal agencies—

“(i) in conducting portfolio-wide facility energy and water resilience planning and project integration;

“(ii) in building new construction and major renovations to meet the sustainable design and energy and water performance standards required under this section;

“(iii) in developing guidelines for—

“(I) building commissioning; and

“(II) facility operations and maintenance; and

“(iv) in coordination with the Administrator of the General Services Administration, in meeting statutory and agency goals for Federal fleet vehicles.

“(3) Federal director

“(A) Appointment—The Secretary shall appoint an individual to serve as Federal Director of the Program, which shall be a career position in the Senior Executive service, to manage the Program and carry out the activities of the Program described in paragraph (2).

“(B) Duties—The Federal Director shall—

“(i) oversee, manage, and administer the Program;

“(ii) provide leadership in energy and water management, energy-related investment practices, and environmental stewardship through coordination with Federal agencies and other appropriate entities; and

“(iii) establish a management council to advise the Federal Director that shall—

“(I) convene not less frequently than once every quarter; and

“(II) consist of representatives from—

“(aa) the Council on Environmental Quality;

“(bb) the Office of Management and Budget; and

“(cc) the Office of Federal High-Performance Green Buildings in the General Services Administration.

“(4) Savings clause—Nothing in this subsection impedes, supersedes, or alters the authority of the Secretary to carry out the remainder of this section or section 305 of the Energy Conservation and Production Act (42 U.S.C. 6834).

“(5) Authorization of appropriations—There is authorized to be appropriated to the Secretary to carry out this subsection $36,000,000 for each of fiscal years 2020 through 2030.”

Sec. 423 Federal building energy efficiency performance standards; certification system and level for green buildings

(a)
Definitions— Section 303 of the Energy Conservation and Production Act (42 U.S.C. 6832) is amended—
(1)
in each of paragraphs (1) through (16), by inserting a paragraph heading, the text of which is comprised of the term defined in that paragraph;
(2)
by redesignating paragraphs (2) through (16) as paragraphs (3), (4), (6), (7), (8), (10), (12), (13), (14), (15), (16), (9), (17), (5), and (2), respectively, and moving the paragraphs so as to appear in numerical order; and
(3)
by inserting after paragraph (10) (as so redesignated) the following:

“(11) Major renovation—The term major renovation means a modification of the energy systems of a building that is sufficiently extensive to ensure that the entire building can achieve compliance with applicable energy standards for new buildings, as established by the Secretary.”

(a)
Definitions— Section 303 of the Energy Conservation and Production Act (42 U.S.C. 6832) (as amended by section 101(a)) is amended—
(1)
in each of paragraphs (1) through (13), (15), and (16), by inserting a paragraph heading, the text of which is comprised of the term defined in that paragraph;
(2)
by redesignating paragraphs (2) through (13) and (15) through (18) as paragraphs (3), (4), (6), (7), (8), (10), (15), (16), (17), (18), (19), (9), (5), (2), (11), and (12), respectively, and moving the paragraphs so as to appear in numerical order; and
(3)
by inserting after paragraph (12) (as so redesignated) the following:

“(13) Major renovation—The term major renovation means a modification of the energy systems of a building that is sufficiently extensive to ensure that the entire building can achieve compliance with applicable energy standards for new buildings, as established by the Secretary.”

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

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

“(A) Revised Federal building energy efficiency performance standards

“(i) In general—Not later than 1 year after the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2019, the Secretary shall establish, by regulation, revised Federal building energy efficiency performance standards that require that—

“(I) subject to clause (ii), new Federal buildings and Federal buildings with major renovations—

“(aa) meet or exceed the most recently published version 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 2019; and

“(bb) meet or exceed the energy provisions of the State and local building codes applicable to the building if the codes are more stringent than the most recently published version of the International Energy Conservation Code or ASHRAE Standard 90.1 as of the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2019, as applicable;

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

“(aa) the buildings shall be designed to achieve energy consumption levels that are not less than 30 percent below the levels established in the most recently published version of the International Energy Conservation Code or the ASHRAE Standard, as of the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2019, as appropriate; and

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

“(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

“(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.

“(ii) Exception—Clause (i)(I) shall not apply to the unaltered portions of Federal buildings and systems that have undergone major renovations.

“(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 subclauses (I) and (II) of subparagraph (A)(i) should be updated to reflect the revisions, based on the energy savings and life cycle cost-effectiveness of the revisions.”

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

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

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

“(D) Certification for green buildings

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

“(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.

“(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).

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

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

“(II) confirm that the criteria used to support the selection of building products, materials, brands, and technologies—

“(aa) are based on relevant technical data;

“(bb) use and reward evaluation of health, safety, and environmental risks and impacts across the lifecycle of the building product, material, brand, or technology, including methodologies generally accepted by the applicable scientific disciplines;

“(cc) as practicable, give preference to performance standards instead of prescriptive measures; and

“(dd) reward continual improvements in the lifecycle management of health, safety, and environmental risks and impacts.

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

“(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;

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

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

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

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

“(bb) use of renewable energy sources;

“(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;

“(dd)

“(AA) the sourcing of grown, harvested, or mined materials; and

“(BB) certifications of responsible sourcing, such as certifications provided by the Forest Stewardship Council, the Sustainable Forestry Initiative, the American Tree Farm System, or the Programme for the Endorsement of Forest Certification; and

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

“(V) national recognition within the building industry.

“(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—

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

“(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)).

“(vii) Exclusions

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

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

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

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

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

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

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

“(cc) increases agency costs of the use.

“(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).

“(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.

“(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.

“(xi) Effective date

“(I) Determinations made after December 31, 2019—The amendments made by section 422(b)(1)(C) of the Energy Savings and Industrial Competitiveness Act of 2019 shall apply to any determination made by a Federal agency after December 31, 2019.

“(II) Determinations made on or before December 31, 2019—This subparagraph (as in effect on the day before the date of enactment of the Energy Savings and Industrial Competitiveness Act of 2019) shall apply to any use of a certification system for green commercial and residential buildings by a Federal agency on or before December 31, 2019.”

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

“(c) Periodic review—The Secretary shall—

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

“(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.”

(c)
Federal compliance— Section 306 of the Energy Conservation and Production Act (42 U.S.C. 6835) is amended—
(1)
in subsection (a)—
(A)
in paragraph (1)—
(i)
by striking “(1) The head” and inserting the following:

“(1) In general—The head”

(ii)
by striking “assure that new Federal buildings” and inserting “ensure that new Federal buildings and Federal buildings with major renovations”; and
(B)
in paragraph (2)—
(i)
by striking the second sentence and inserting the following:

“(B) Procedures—The Architect of the Capitol shall adopt procedures necessary to ensure that the buildings referred to in subparagraph (A) meet or exceed the standards described in that subparagraph.”

(ii)
in the first sentence—
(I)
by inserting “and Federal buildings with major renovations” after “new buildings”; and
(II)
by striking “(2) The Federal” and inserting the following:

“(2) Applicability

“(A) In general—The Federal”

(2)
in subsection (b)—
(A)
by striking the subsection heading and inserting “Expenditures”; and
(B)
by inserting “or a Federal building with major renovations” after “new Federal building”.

Sec. 424 Enhanced energy efficiency underwriting

(a)
Definitions— In this section:
(1)
Covered agency— The term covered agency—
(A)
means—
(i)
an executive agency, as that term is defined in section 102 of title 31, United States Code; and
(ii)
any other agency of the Federal Government; and
(B)
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)
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)
Homeowner— The term homeowner means the mortgagor under a covered loan.
(4)
Mortgagee— The term mortgagee means—
(A)
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)
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)
any servicer of a covered loan; and
(D)
any subsequent purchaser, trustee, or transferee of any covered loan issued by an original lender.
(5)
Secretary— The term Secretary means the Secretary of Housing and Urban Development.
(6)
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)
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)
Findings and purposes—
(1)
Findings— Congress finds that—
(A)
energy costs for homeowners are a significant and increasing portion of their household budgets;
(B)
household energy use can vary substantially depending on the efficiency and characteristics of the house;
(C)
expected energy cost savings are important to the value of the house;
(D)
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)
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)
Purposes— The purposes of this section are to—
(A)
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)
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)
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)
Enhanced energy efficiency underwriting criteria—
(1)
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)
Requirements to account for energy cost savings—
(A)
In general— 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.
(B)
Expenses as offsets— 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.
(C)
Assessed energy costs— 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)
Determination of estimated energy cost savings—
(A)
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)
the energy efficiency report;
(ii)
an estimate of baseline average energy costs; and
(iii)
additional sources of information as determined by the Secretary.
(B)
Report requirements— For the purposes of subparagraph (A), an energy efficiency report shall—
(i)
estimate the expected energy cost savings specific to the subject property, based on specific information about the property;
(ii)
be prepared in accordance with the guidelines to be issued under paragraph (1); and
(iii)
be prepared—
(I)
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)
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)
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)
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)
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)
include the energy efficiency report in the documentation for the loan provided to the borrower.
(5)
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)
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)
the impact the typical energy cost savings would have on monthly ownership costs of a typical home;
(C)
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)
resources for improving the energy efficiency of a home.
(6)
Pricing of loans—
(A)
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)
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)
Limitations—
(A)
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)
Prohibited actions— A covered agency shall not—
(i)
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)
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)
Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2023, the enhanced loan eligibility requirements required under this subsection shall be implemented by each covered agency to—
(A)
apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home;
(B)
be available on any residential real property (including individual units of condominiums and cooperatives) that qualifies for a covered loan; and
(C)
provide prospective mortgagees with sufficient guidance and applicable tools to implement the required underwriting methods.
(d)
Enhanced energy efficiency underwriting valuation guidelines—
(1)
In general— Not later than 1 year after the date of enactment of this Act, the Secretary shall—
(A)
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)
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)
Requirements— The enhanced energy efficiency underwriting valuation guidelines required under paragraph (1) shall include—
(A)
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)
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)
Determination of estimated energy savings—
(A)
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)
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)
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)
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)
in paragraph (2), by striking “and” at the end;
(B)
in paragraph (3), by striking the period at the end and inserting “; and”; and
(C)
by inserting after paragraph (3) the following:

“(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—

“(A) labels or ratings of buildings;

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

“(C) blueprints;

“(D) construction costs;

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

“(F) utility bills;

“(G) energy consumption and bench­mark­ing data; and

“(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)
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)
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)
in paragraph (2), by inserting after “atypical” the following: “, or an appraisal on which the appraiser makes adjustments using an energy efficiency report.”.
(6)
Protections—
(A)
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)
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)
Applicability and implementation date— Not later than 3 years after the date of enactment of this Act, and before December 31, 2023, each covered agency shall implement the guidelines required under this subsection, which shall—
(A)
apply to any covered loan for the sale, or refinancing of any loan for the sale, of any home; and
(B)
be available on any residential real property, including individual units of condominiums and cooperatives, that qualifies for a covered loan.
(e)
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)
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)
includes the default rates and rates of foreclosures for each category of loans; and
(3)
describes the risk premium, if any, that the agency has priced into covered loans for which there was an energy efficiency report.
(f)
Rulemaking—
(1)
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)
Advisory group— To assist in carrying out this section, the Secretary shall establish an advisory group, consisting of individuals representing the interests of—
(A)
mortgage lenders;
(B)
appraisers;
(C)
energy raters and residential energy consumption experts;
(D)
energy efficiency organizations;
(E)
real estate agents;
(F)
home builders and remodelers;
(G)
State energy officials; and
(H)
others as determined by the Secretary.
(g)
Additional study—
(1)
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)
Recommendations—
(A)
In general— 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.
(B)
Legislative recommendations— The Secretary shall forward any legislative recommendations from the advisory group to Congress for consideration.