I 

111TH CONGRESS 

2D SESSION H. R. 5617 

To amend the Internal Revenue Code of 1986 to provide for home energy 

conservation bonds. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 28, 2010 

Mr. MCDERMOTT (for himself, Mr. BLUMENAUER, Mr. SARBANES, Ms. 

SCHWARTZ, and Mr. THOMPSON of California) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for home energy conservation bonds. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Home Energy Con5 servation Act of 2010’’. 

6 SEC. 2. HOME ENERGY CONSERVATION BONDS. 

7 (a) IN GENERAL.—Subpart I of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by adding at the end the following new 

10 section: 


srobinson on DSKHWCL6B1PROD with BILLS
2 

•HR 5617 IH

1 ‘‘SEC. 54G. HOME ENERGY CONSERVATION BONDS. 

2 ‘‘(a) HOME ENERGY CONSERVATION BOND.—For 

3 purposes of this subchapter, the term ‘home energy con4 servation bond’ means any bond issued as part of an issue 

5 if— 

6 ‘‘(1) 100 percent of the available project pro7 ceeds of such issue are to be used to make qualified 

8 residential energy efficiency assistance grants and 

9 loans, 

10 ‘‘(2) not less than 20 percent of the available 

11 project proceeds of such issue are to be used to 

12 make qualified low-income residential energy effi13 ciency assistance grants and loans, 

14 ‘‘(3) not less than 10 percent of the available 

15 project proceeds of such issue are to be used to 

16 make qualified very low-income residential energy ef17 ficiency assistance grants, 

18 ‘‘(4) repayments of principal and applicable in19 terest on financing provided by the issue are used 

20 not later than the close of the 3-month period begin21 ning on the date the prepayment (or complete repay22 ment) is received to redeem bonds which are part of 

23 the issue or to make qualified residential energy effi24 ciency assistance grants and loans, 

25 ‘‘(5) the bond is issued by a State or local gov26 ernment, and 


srobinson on DSKHWCL6B1PROD with BILLS
3 

•HR 5617 IH

1 ‘‘(6) the issuer designates such bond for pur2 poses of this section. 

3 ‘‘(b) LIMITATION ON AMOUNT OF BONDS DES4 IGNATED.—The maximum aggregate face amount of 

5 bonds which may be designated under subsection (a) by 

6 any issuer shall not exceed the limitation amount allocated 

7 under subsection (d) to such issuer. 

8 ‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS

9 DESIGNATED.—There is a national home energy conserva10 tion bond limitation of $2,400,000,000. 

11 ‘‘(d) ALLOCATIONS.— 

12 ‘‘(1) IN GENERAL.—The limitation under sub13 section (c) shall be allocated by the Secretary among 

14 the States in proportion to the population of the 

15 States. 

16 ‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOV17 ERNMENTS.— 

18 ‘‘(A) IN GENERAL.—In the case of any 

19 State in which there is a large local govern20 ment, each such local government shall be allo21 cated a portion of such State’s allocation which 

22 bears the same ratio to the State’s allocation 

23 (determined without regard to this subpara24 graph) as the population of such large local 


srobinson on DSKHWCL6B1PROD with BILLS
4 

•HR 5617 IH

1 government bears to the population of such 

2 State. 

3 ‘‘(B) ALLOCATION OF UNUSED LIMITATION

4 TO STATE.—The amount allocated under this 

5 subsection to a large local government may be 

6 reallocated by such local government to the 

7 State in which such local government is located. 

8 ‘‘(C) LARGE LOCAL GOVERNMENT.—For 

9 purposes of this section, the term ‘large local 

10 government’ means any municipality or county 

11 if such municipality or county has a population 

12 of 500,000 or more. 

13 ‘‘(e) QUALIFIED RESIDENTIAL ENERGY EFFICIENCY

14 ASSISTANCE GRANTS AND LOANS.—For purposes of this 

15 section— 

16 ‘‘(1) IN GENERAL.—Qualified residential energy 

17 efficiency assistance grants and loans are any grant 

18 or low-interest loan, as the case may be, to acquire 

19 (including reasonable installation and testing costs) 

20 any of the following: 

21 ‘‘(A) Any property which meets (at a min22 imum) the requirements of the Energy Star 

23 program and which is to be installed in a dwell24 ing unit. 


srobinson on DSKHWCL6B1PROD with BILLS
5 

•HR 5617 IH

1 ‘‘(B) Any property not described in sub2 paragraph (A) which meets (at a minimum) the 

3 requirements of the Water Sense program and 

4 which is to be installed in a dwelling unit. 

5 ‘‘(C) Any improvements to a dwelling unit 

6 which are made pursuant to a plan which— 

7 ‘‘(i) is developed by a Residential En8 ergy Services Network (RESNET), Build9 ing Performance Institute (BPI), or equiv10 alent, energy efficiency expert, and 

11 ‘‘(ii) is certified by such energy effi12 ciency expert (based on testing done before 

13 and after such improvements) as resulting 

14 in at least a 20 percent reduction in total 

15 household energy consumption related to 

16 heating, cooling, lighting, and appliances. 

17 For purposes of this subparagraph, improve18 ments to a dwelling unit for basic health and 

19 safety may be taken into account to the extent 

20 that such improvements do not exceed 10 per21 cent of the value of the grant or loan and are 

22 required under State or local law as a condition 

23 of making the other improvement described in 

24 this subparagraph. 

25 ‘‘(2) DOLLAR LIMITATIONS.— 


srobinson on DSKHWCL6B1PROD with BILLS
6 

•HR 5617 IH

1 ‘‘(A) DWELLING UNIT IMPROVEMENTS.— 

2 ‘‘(i) IN GENERAL.—Such term shall 

3 not include any grant or loan for improve4 ments described in paragraph (1)(C) with 

5 respect to any dwelling unit to the extent 

6 that such grant or loan (when added to all 

7 other grants or loans for such improve8 ments) exceeds $5,000. 

9 ‘‘(ii) INCREASED LIMITATION FOR

10 CERTAIN PRINCIPAL RESIDENCES.—In the 

11 case of a dwelling unit which is used as a 

12 principal residence (within the meaning of 

13 section 121) by the recipient of the grant 

14 or loan referred to in clause (i)— 

15 ‘‘(I) clause (i) shall be applied by 

16 substituting ‘$12,000’ for ‘$5,000’ if 

17 such grant or loan would satisfy the 

18 requirements of paragraph (1)(C) if 

19 such paragraph were applied by sub20 stituting ‘40 percent’ for ‘20 percent’, 

21 and 

22 ‘‘(II) in any case to which sub23 clause (I) does not apply, clause (i) 

24 shall be applied by substituting 

25 ‘$8,000’ for ‘$5,000’ if such grant or 


srobinson on DSKHWCL6B1PROD with BILLS
7 

•HR 5617 IH

1 loan would satisfy the requirements of 

2 paragraph (1)(C) if such paragraph 

3 were applied by substituting ‘30 per4 cent’ for ‘20 percent’. 

5 ‘‘(iii) INCREASED LIMITATION FOR

6 CASH POSITIVE LOANS.—In the case of a 

7 dwelling unit which is used as a principal 

8 residence (within the meaning of section 

9 121) by the recipient of a loan with respect 

10 to which the reduced energy costs which 

11 result from the improvements described in 

12 paragraph (1)(C) exceed the payments re13 quired under the terms of the loan— 

14 ‘‘(I) clause (i) shall be applied by 

15 substituting ‘$12,000’ for ‘$5,000’, 

16 and 

17 ‘‘(II) clause (ii) shall not apply. 

18 ‘‘(B) REDUCTION IN WATER CONSUMP19 TION.—Such term shall not include any grant 

20 or loan for property described in paragraph 

21 (1)(B) with respect to any dwelling unit to the 

22 extent that such grant or loan (when added to 

23 all other grants or loans for such property) ex24 ceeds $500. 


srobinson on DSKHWCL6B1PROD with BILLS
8 

•HR 5617 IH

1 ‘‘(3) LOW-INTEREST LOAN.—The term ‘low in2 terest loan’ means any loan which charges interest 

3 at a rate which does not exceed the applicable Fed4 eral rate in effect under section 1288(b)(1) deter5 mined as of the issuance of the loan. 

6 ‘‘(4) EXCLUSION OF CERTAIN PROPERTY.—The 

7 following property shall not be taken into account 

8 for purposes of paragraph (1): 

9 ‘‘(A) Any equipment used in connection 

10 with a swimming pool, hot tub, or similar prop11 erty. 

12 ‘‘(B) Any television. 

13 ‘‘(C) Any device for converting digital sig14 nal to analog. 

15 ‘‘(D) Any DVD player. 

16 ‘‘(E) Any video cassette recorder (VCR). 

17 ‘‘(F) Any audio equipment. 

18 ‘‘(G) Any cordless phone. 

19 ‘‘(H) Any other item of property where 

20 there is substantial recreational use. 

21 ‘‘(f) QUALIFIED LOW-INCOME RESIDENTIAL EFFI22 CIENCY ASSISTANCE GRANTS AND LOANS.— 

23 ‘‘(1) IN GENERAL.—Qualified low-income resi24 dential energy efficiency assistance grants and loans 

25 are any qualified residential energy efficiency assistVerDate Mar 15 2010 22:02 Jun 29, 2010 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5617.IH H5617

srobinson on DSKHWCL6B1PROD with BILLS
9 

•HR 5617 IH

1 ance grant or loan, as the case may be, with respect 

2 to a dwelling unit which is occupied (at the time of 

3 the grant or loan) by individuals whose income is 

4 100 percent or less of area median gross income. 

5 Rules similar to the rules of section 142(d)(2)(B) 

6 shall apply for purposes of this paragraph. 

7 ‘‘(2) RESTRICTION TO GRANTS AND VERY LOW

8 INTEREST LOANS.—Such term shall not include any 

9 loan unless the rate of interest on such loan does not 

10 exceed the excess of— 

11 ‘‘(A) the applicable Federal rate in effect 

12 under section 1288(b)(1) determined as of the 

13 issuance of the loan, over 

14 ‘‘(B) 100 basis points. 

15 ‘‘(g) QUALIFIED VERY LOW-INCOME RESIDENTIAL

16 EFFICIENCY ASSISTANCE GRANTS.—For purposes of this 

17 section, qualified very low-income residential energy effi18 ciency assistance grants are any qualified low-income resi19 dential energy efficiency assistance grant with respect to 

20 a dwelling unit which is occupied (at the time of the grant) 

21 by individuals whose income is 50 percent or less of area 

22 median gross income. Rules similar to the rules of section 

23 142(d)(2)(B) shall apply for purposes of this paragraph. 

24 ‘‘(h) DEFINITIONS AND SPECIAL RULES.—For pur25 poses of this section— 


srobinson on DSKHWCL6B1PROD with BILLS
10 

•HR 5617 IH

1 ‘‘(1) APPLICABLE INTEREST.—The term ‘appli2 cable interest’ means, with respect to any loan, so 

3 much of any interest on such loan which exceeds 1 

4 percentage point. 

5 ‘‘(2) SPECIAL RULE RELATING TO ARBI6 TRAGE.—An issue shall not be treated as failing to 

7 meet the requirements of section 54A(d)(4)(A) by 

8 reason of any investment of available project pro9 ceeds in qualified residential energy efficiency assist10 ance loans. 

11 ‘‘(3) EXCLUSION OF ADMINISTRATIVE EX12 PENSES.—The amount treated as used to make any 

13 grant or loan described in this section shall not ex14 ceed the amount of such grant or loan. 

15 ‘‘(4) POPULATION.—The population of any 

16 State or local government shall be determined as 

17 provided in section 146(j) for the calendar year 

18 which includes the date of the enactment of this sec19 tion. 

20 ‘‘(5) REPORTING.— 

21 ‘‘(A) REPORTS BY ISSUERS.—Issuers of 

22 home energy conservation bonds shall, not later 

23 than 6 months after the expenditure period (as 

24 defined in section 54A) and annually thereafter 

25 until the last such bond is redeemed, submit reVerDate Mar 15 2010 22:02 Jun 29, 2010 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5617.IH H5617

srobinson on DSKHWCL6B1PROD with BILLS
11 

•HR 5617 IH

1 ports to the Secretary regarding such bonds, in2 cluding information regarding— 

3 ‘‘(i) the number and monetary value 

4 of loans and grants provided and the pur5 poses for which provided, 

6 ‘‘(ii) the number of dwelling units the 

7 energy efficiency of which improved as re8 sult of such loans and grants, 

9 ‘‘(iii) the types of property described 

10 in subparagraphs (A) and (B) of sub11 section (e)(1) installed as a result of such 

12 loans and grants and the projected energy 

13 savings with respect to such property, and 

14 ‘‘(iv) the projected energy savings as a 

15 result of such loans and grants for im16 provements described in subsection 

17 (e)(1)(C). 

18 ‘‘(B) REPORT TO CONGRESS.—Not later 

19 than 12 months after receipt of the first report 

20 under subparagraph (A) and annually there21 after until the last such report is required to be 

22 submitted, the Secretary, in consultation with 

23 the Secretary of Energy and the Administrator 

24 of the Environmental Protection Agency, shall 

25 submit a report to Congress regarding the bond 


srobinson on DSKHWCL6B1PROD with BILLS
12 

•HR 5617 IH

1 program under this section, including informa2 tion regarding— 

3 ‘‘(i) the aggregate of each category of 

4 information described in subparagraph (A) 

5 (including any independent assessment of 

6 projected energy savings), and 

7 ‘‘(ii) an estimate of the amount of 

8 greenhouse gas emissions reduced as a re9 sult of such bond program.’’. 

10 (b) TREATMENT AS A SPECIFIED TAX CREDIT BOND

11 FOR PURPOSES OF DIRECT PAYMENT PROVISIONS.—Sub12 paragraph (A) of section 6431(f)(3) of such Code is 

13 amended by striking ‘‘or’’ at the end of clause (iii), by 

14 striking ‘‘and’’ at the end of clause (iv) and inserting ‘‘or’’, 

15 and by adding at the end the following new clause: 

16 ‘‘(v) a home energy conservation bond 

17 (as defined in section 54G), and’’. 

18 (c) CONFORMING AMENDMENTS.— 

19 (1) Paragraph (1) of section 54A(d) of such 

20 Code is amended by striking ‘‘or’’ at the end of sub21 paragraph (D), by inserting ‘‘or’’ at the end of sub22 paragraph (E), and by inserting after subparagraph 

23 (E) the following new subparagraph: 

24 ‘‘(F) a home energy conservation bond,’’. 


srobinson on DSKHWCL6B1PROD with BILLS
13 

•HR 5617 IH

1 (2) Subparagraph (C) of section 54A(d)(2) of 

2 such Code is amended by striking ‘‘and’’ at the end 

3 of clause (iv), by striking the period at the end of 

4 clause (v) and inserting ‘‘, and’’, and by adding at 

5 the end the following new clause: 

6 ‘‘(vi) in the case of a home energy 

7 conservation bond, a purpose specified in 

8 section 54G(a)(1).’’. 

9 (3) The table of sections for subpart I of part 

10 IV of subchapter A of chapter 1 of such Code is 

11 amended by adding at the end the following new 

12 item: 

‘‘Sec. 54G. Home energy conservation bonds.’’. 

13 (d) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to obligations issued after the date 

15 of the enactment of this Act. 

Æ 


srobinson on DSKHWCL6B1PROD with BILLS