59–010 

Calendar No. 131 

110TH CONGRESS REPORT " ! SENATE 1st Session 110–60 

PUBLIC BUILDINGS COST REDUCTION ACT OF 2007 

MAY 3, 2007.—Ordered to be printed 

Mrs. BOXER, from the Committee on Environment and Public 

Works, submitted the following 

R E P O R T 

[To accompany S. 992] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Environment and Public Works, to which was 

referred a bill (S. 992) to achieve emission reductions and cost savings through accelerated use of cost-effective lighting technologies 

in public buildings, and for other purposes, having considered the 

same, reports favorably thereon with amendments and recommends that the bill, as amended, do pass. 

GENERAL STATEMENT AND BACKGROUND

This bill accelerates the implementation of cost-effective lighting 

and energy-saving technologies and practices in federal and local 

public buildings. These improvements are expected to reduce the 

costs to taxpayers of operating these buildings, and to reduce the 

air emissions from the combustion of fossil fuels often used to generate the heat or electricity used by these buildings. 

Specifically, the bill accelerates the retrofit of lighting in buildings owned or leased, subject to certain lease terms, by the General 

Services Administration (GSA). In addition, the bill authorizes the 

U.S. Environmental Protection Agency (U.S. EPA) to establish a 

new competitive grant program for the retrofit of public buildings 

owned by local units of government, subject to cost-share requirements. 

The Senate Committee on Environment and Public Works has jurisdiction under Senate Rule XXV over ‘‘public buildings and improved grounds of the United States generally,’’ including GSA 

buildings. The GSA owns and leases over 340 million square feet 

of space in more than 8,900 buildings, located in every state. The 


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GSA calls itself the ‘‘largest public real estate organization’’ in the 

country. 

Related Executive Orders and Statutes 

The bill seeks to accelerate the implementation of new requirements for federal building performance. On January 24, 2007, 

President Bush signed a new Executive Order that calls for an increase in energy efficiency and use of renewable fuels throughout 

the federal government, Executive Order (E.O.) 13423. With respect to federal buildings, the President has set as a goal that 

agencies should reduce the amount of energy used per square foot 

of building space in 2003 by 3 percent annually or 30 percent by 

2015. 

Executive Order 13423 amends Executive Order 13123, which 

was issued by President Clinton in June 1999. E.O. 13123 required 

each federal agency to reduce energy consumption per gross square 

foot at existing facilities by 30 percent by 2005 and by 35 percent 

by 2010, relative to a 1985 baseline. 

The Energy Policy Act of 2005 (EPAct 05), Public Law No. 109–

58, 109 Stat. 594 et seq., extended the energy reduction goals outlined in Executive Order 13123 for existing federal buildings by 

mandating that agencies use a new baseline of 2003 energy consumption and achieve additional reductions per gross square foot 

of 2 percent each year beginning in 2006 and ending with a 20 percent reduction by the year 2015. 

In the case of new building construction and major renovation, 

E.O. 13423 sets as a goal that agencies meet the Guiding Principles 

for Federal Leadership in High Performance and Sustainable 

Buildings, which include a target energy use of 30 percent below 

the average building performance for new buildings and a target of 

20 percent below the average for renovations. By 2015, the goal is 

for 15 percent of each agency’s building inventory to meet these 

Guiding Principles, which a number of federal agencies agreed to 

in early 2006. 

The Executive Order provides in section 10(c) that it is not intended to be legally enforceable. The Committee concluded that it 

would be helpful to expedite some of the energy-efficiency goals in 

the Order and to embody in statute a requirement for their adoption. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section provides that the title may be cited as the ‘Public 

Buildings Cost Reduction Act of 2007’. 

Section 2. Cost-effective technology acceleration program 

Subsection 2(a) requires the Administrator of General Services to 

establish a program to accelerate the use of more cost-effective 

technologies and practices at GSA facilities. The program is required to ensure centralized oversight and responsibility for coordination of relevant government agencies’ accelerated adoption of 

cost-effective technologies and practices, to provide technical assistance and operational guidance, and to track progress of agencies 

and departments under the program. The provision of technical asVerDate Aug 31 2005 11:15 May 04, 2007 Jkt 059010 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\SR060.XXX SR060

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sistance and guidance should include training of the building managers to enable them to meet the cost reduction through energy efficiency requirements and goals of this legislation. Effective training of building managers in cost reduction through energy savings 

could potentially pay for itself many times over. This program has 

several phases, established in subsections 2(b) and 2(c). 

Subsection 2(b) provides that within 90 days after the date of enactment of this Act, the Administrator is directed to conduct a review of the current use and availability to GSA building managers 

of cost-effective, highly energy-efficient lighting technologies that 

are available for use in GSA facilities. 

As part of the program established under subsection 2(b), not 

later than 180 days after the date of enactment of this Act, the Administrator is directed to establish a cost-effective lighting technology acceleration program to achieve maximum feasible replacement of existing lighting technologies with more cost-effective and 

energy-efficient lighting technologies in each GSA facility using 

available appropriations. 

To implement the program established under subsection 2(b), the 

Administrator is required to establish a timetable including milestones for specific activities needed to replace existing lighting 

technologies with more cost-effective lighting technologies, to the 

maximum extent feasible (including at the maximum rate feasible), 

at each GSA facility. The goal of the timetable is to complete, using 

available appropriations, maximum feasible replacement of existing 

lighting technologies with more cost-effective lighting technologies 

by not later than the date that is 5 years after the date of enactment of this Act. 

Subsection 2(c) directs the Administrator to ensure, not later 

than 180 days after the date of enactment of this Act and annually 

thereafter, that a manager responsible and accountable for accelerating the use of cost-effective technologies and practices is designated for each GSA facility. 

In addition, subsection 2(c) directs the Administrator to develop 

and submit annually to Congress a plan that identifies the specific 

activities needed to achieve a 20-percent reduction in operational 

costs (from 2003 cost levels) through the application of energy-saving cost-effective technologies and practices by not later than 5 

years from the date of enactment of the Act. The plan must also 

estimate the funds needed to achieve the 20-percent cost reduction 

and describe the status of the implementation of energy-efficient 

cost-effective technologies at GSA facilities. This plan must be implemented to the maximum extent feasible and at the fastest rate 

feasible, using available funds, by not later than 5 years after enactment of the Act. 

Use of project bundling can combine multiple actions into a single project, and can effectively allow the combination of cost-effective technologies that may have short payback periods with other 

energy conservation measures that may have longer than five-year 

payback periods, to achieve greater overall total savings and energy use reductions. Nothing in this legislation, including the fiveyear payback provision (section 2(c)(2)(G)), is intended to limit or 

otherwise affect current authorities. 


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Section 3. Environmental Protection Agency demonstration grant 

program for local governments 

Under this section, the Administrator of the Environmental Protection Agency (EPA) is directed to establish a demonstration program under which the Administrator shall provide competitive 

grants to assist local governments to deploy cost-effective energyefficient technologies and practices at local government buildings. No grant awarded under this section shall exceed $1 million and 

the Federal cost share is 40 percent. The bill provides for cost 

share waivers for economically distressed communities, which are 

identified through the Administrator’s adoption, in guidelines published in advance, of specific objective economic criteria for such 

waivers. The program is authorized to receive $20 million per year 

for each of fiscal years 2007 through 2012, and sunsets on September 30, 2012. 

Section 4. Definitions 

This section establishes definitions of terms in the bill. 

LEGISLATIVE HISTORY

S. 992 was introduced on March 27, 2007, and referred to the 

Committee on Environment and Public Works. 

HEARINGS

On March 28, 2007, the Committee on Environment and Public 

Works held a hearing on Reducing Government Building Operational Costs through Innovation and Efficiency: Legislative Solutions. Specific testimony was taken on S. 992. Witnesses included: 

David Winstead, Commissioner, Public Buildings Service, U.S. 

General Services Administration; Kateri Callahan, President of the 

Alliance to Save Energy; and Melanie Townshend, Project Executive, Gilbane Building Company, Associated General Contractors of 

America. 

ROLLCALL VOTES

The Committee on Environment and Public Works met to consider S. 992 on March 29, 2007. The committee voted favorably by 

voice vote to adopt Warner Amendment 1, which added certain coordination, technical assistance, and success tracking requirements 

to the program required by section 2(a), and by voice vote to adopt 

Warner Amendment 2, as modified, which authorized reduction or 

waiver of the local cost share requirement for communities determined, pursuant to published objective guidelines, to be economically distressed. The committee agreed to report S. 992 by voice 

vote. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

Summary: S. 992 would authorize the Environmental Protection 

Agency (EPA) to provide $120 million in grants over the 2007–2012 

period to local governments for programs to reduce energy use in 

government buildings. In addition, the legislation would direct the 

General Services Administration (GSA), using existing appropriations, to increase the use of energy-efficient lighting throughout 

federal buildings. The legislation also would require various reports 


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to the Congress regarding the grant program and energy efficiency 

in government facilities. CBO estimates that implementing S. 992 would cost $10 million in 2008 and $85 million over the 2008–2012 period, assuming appropriation of the authorized amounts. Enacting S. 992 could affect 

direct spending by changing the use of existing funds, but CBO estimates it would likely have no significant effect on direct spending. 

However, if agencies entered into Energy Savings Performance 

Contracts (ESPCs) with a substantially greater value than anticipated under current law to increase the use of energy-efficient 

lighting in federal buildings, the bill could result in additional direct spending in the near term, and could lead to savings of future 

appropriated funds over the long term. Enacting the bill would not 

affect revenues. 

S. 992 contains no intergovernmental or private-sector mandates 

as defined in the Unfunded Mandates Reform Act (UMRA) and 

would benefit local governments that participate in the demonstration program authorized in the bill. That program would provide 

$100 million over 5 years for competitive grants to assist local governments in reducing energy use in public buildings. 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 992 is shown in the following table. The cost of 

this legislation falls within budget function 300 (natural resources 

and the environment). 

By fiscal year, in millions of dollars— 

2008 2009 2010 2011 2012 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Authorization Level .................................................................................................. 20 20 20 20 20 

Estimated Outlays ................................................................................................... 10 16 19 20 20 

Basis of estimate: For this estimate, CBO assumes that the bill 

will be enacted before the end of fiscal year 2007, that the amounts 

authorized by the bill will be appropriated for each year beginning 

in 2008, and that spending will follow historical patterns for current and similar programs. 

Spending subject to appropriation 

EPA Grant Program. Section 3 would authorize the appropriation of $20 million annually, through 2012, for an EPA program of 

matching grants up to $1 million annually for local governments to 

reduce energy consumption by their facilities. The program would 

terminate on September 30, 2012. Assuming appropriation of the 

authorized amounts, beginning in 2008, CBO estimates that implementing this provision would cost $85 million over the 2008–2012 

period. 

GSA Lighting Technology Program. Section 2 would require GSA, 

using available appropriations, to retrofit or replace existing lighting technology in its buildings with more energy-efficient lighting 

technology within five years. This would build upon certain sections of Executive Order 13423—Strengthening Federal Environmental, Energy, and Transportation Management. That order set 

goals in many areas, including energy efficiency, renewable energy, 

and sustainable buildings. Based on information from GSA, CBO 

estimates that implementing this provision would increase the priVerDate Aug 31 2005 11:15 May 04, 2007 Jkt 059010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR060.XXX SR060

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ority of replacing existing lighting technologies, but not significantly increase costs over the 2008–2012 period. 

Other Provisions. The legislation would require GSA to establish 

a program to accelerate the use of cost-effective technologies and 

practices in federal buildings. The legislation also would require an 

annual and final report to the Congress on the matching grant program, as well as reports, plans, and recommendations within six 

months by GSA on energy efficiency and energy usage by federal 

buildings. Based on information from EPA and GSA and the cost 

of similar activities, CBO estimates that those provisions would 

cost less than $500,000 annually over the 2008–2012 period, subject to the availability of appropriated funds. 

Direct spending 

The bill’s direction to GSA to increase energy-efficient lighting in 

federal buildings—using existing appropriations—could affect direct spending by changing the government’s up-front commitments 

in Energy Savings Performance Contracts. CBO estimates, however, that S. 992 is unlikely to result in a significant change in the 

overall costs of such ESPCs. 

The instructions for implementing Executive Order 13423— Strengthening Federal Environmental, Energy, and Transportation 

Management (which sets various environmental goals for federal 

energy usage)—recommends the use of ESPCs and other financial 

instruments (e.g., enhanced-use leasing) to reach the goals of the 

order. ESPCs enable federal agencies to enter into long-term contracts with an energy savings company (ESCO) for the acquisition 

of energy-efficient equipment, such as new windows, lighting, and 

heating, ventilation, and air-conditioning systems. Using such 

equipment can reduce the energy costs for a facility, and the savings from reduced utility payments can be used to pay the contractor for the equipment over time. Because the government does 

not pay for the equipment at the time it is acquired, the ESCO borrows money from a nonfederal lender to finance the acquisition and 

installation of the equipment. When an agency enters into an 

ESPC, the government commits to paying for the full cost of the 

equipment as well as the financing costs for the project. Since the 

ESCO faces higher borrowing costs than the U.S. Treasury, total 

interest payments for the equipment acquisition will be higher 

than if the government financed the acquisition of the equipment 

directly with appropriated funds. 

The obligation to make payments for the equipment and the financing costs is incurred when the government signs the ESPC. 

Under current law, agencies can use ESPCs to acquire new energyefficient equipment, without an up-front appropriation for the full 

amount of the purchase price. (Such contracts generally require 

payments over an extended period—up to 25 years.) Thus, consistent with government accounting principles, CBO believes that 

the budget should reflect that commitment as new obligations at 

the time that an ESPC is signed and that the authority to enter 

into these contracts without budget authority for the full amount 

of the purchase price constitutes direct spending. 

Since 1988, the Department of Energy (DOE) estimates that 

agencies have entered into ESPCs valued over $2.6 billion. Of that 

amount, GSA has agreed to ESPC contracts valued at $500 million, 


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primarily for large energy projects, including heating, ventilation, 

and air conditioning, boiler and chiller improvements, and lighting 

improvements. If GSA used existing appropriated funds for financing instruments like ESPCs for the replacement of more energy-efficient lighting technology, the bill could result in additional direct 

spending. However, based on information from GSA, DOE, and the 

Office of Management and Budget, CBO expects that under the 

bill, the specific ESPCs that GSA chooses to execute may increase 

the priority of replacing existing lighting technology, but that any 

such changes are not likely to significantly change the overall cost 

of ESPCs. 

Intergovernmental and private-sector impact: S. 992 contains no 

intergovernmental or private-sector mandates as defined in UMRA 

and would benefit local governments that participate in the demonstration program authorized in the bill. That program would provide $100 million over five years for competitive grants to assist 

local governments in reducing energy use in public buildings. 

Estimate prepared by: Federal Costs: Matthew Pickford and Susanne S. Mehlman; Impact on State, Local, and Tribal Governments: Theresa Gullo; Impact on the Private Sector: Craig 

Cammarata. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

Æ 


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