II 

114TH CONGRESS 

1ST SESSION S. 878 

To establish a State residential building energy efficiency upgrades loan 

pilot program. 

IN THE SENATE OF THE UNITED STATES 

MARCH 26, 2015 

Mr. SANDERS (for himself, Ms. CANTWELL, Mr. WYDEN, Mr. KING, Mr. 

WHITEHOUSE, Mr. MARKEY, and Mr. FRANKEN) introduced the following 

bill; which was read twice and referred to the Committee on Energy and 

Natural Resources 

A BILL 

To establish a State residential building energy efficiency 

upgrades loan pilot program. 

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

3 SECTION 1. STATE RESIDENTIAL BUILDING ENERGY EFFI4 CIENCY UPGRADES LOAN PILOT PROGRAM. 

5 (a) LOANS FOR RESIDENTIAL BUILDING ENERGY

6 EFFICIENCY UPGRADES.—Part D of title III of the En7 ergy Policy and Conservation Act (42 U.S.C. 6321 et seq.) 

8 is amended by adding at the end the following: 


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1 ‘‘SEC. 367. LOANS FOR RESIDENTIAL BUILDING ENERGY EF2 FICIENCY UPGRADES. 

3 ‘‘(a) DEFINITIONS.—In this section: 

4 ‘‘(1) CONSUMER-FRIENDLY.—The term ‘con5 sumer-friendly’, with respect to a loan repayment 

6 approach, means a loan repayment approach that— 

7 ‘‘(A) emphasizes convenience for cus8 tomers; 

9 ‘‘(B) is of low cost to consumers; and 

10 ‘‘(C) emphasizes simplicity and ease of use 

11 for consumers in the billing process. 

12 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en13 tity’ means— 

14 ‘‘(A) a State or territory of the United 

15 States; and 

16 ‘‘(B) a tribal organization (as defined in 

17 section 4 of the Indian Self-Determination and 

18 Education Assistance Act (25 U.S.C. 450b)). 

19 ‘‘(3) ENERGY ADVISOR PROGRAM.— 

20 ‘‘(A) IN GENERAL.—The term ‘energy ad21 visor program’ means any program to provide 

22 to owners or residents of residential buildings 

23 advice, information, and support in the identi24 fication, prioritization, and implementation of 

25 energy efficiency and energy savings measures. 


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1 ‘‘(B) INCLUSIONS.—The term ‘energy ad2 visor program’ includes a program that pro3 vides— 

4 ‘‘(i) interpretation of energy audit re5 ports; 

6 ‘‘(ii) assistance in the prioritization of 

7 improvements; 

8 ‘‘(iii) assistance in finding qualified 

9 contractors; 

10 ‘‘(iv) assistance in contractor bid re11 views; 

12 ‘‘(v) education on energy conservation 

13 and energy efficiency; 

14 ‘‘(vi) explanations of available incen15 tives and tax credits; 

16 ‘‘(vii) assistance in completion of re17 bate and incentive paperwork; and 

18 ‘‘(viii) any other similar type of sup19 port. 

20 ‘‘(4) ENERGY EFFICIENCY.—The term ‘energy 

21 efficiency’ means a decrease in homeowner or resi22 dential tenant consumption of energy (including elec23 tricity and thermal energy) that is achieved without 

24 reducing the quality of energy services through— 


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1 ‘‘(A) a measure or program that targets 

2 customer behavior; 

3 ‘‘(B) equipment or energy systems; 

4 ‘‘(C) a device; or 

5 ‘‘(D) other material. 

6 ‘‘(5) ENERGY EFFICIENCY UPGRADE.— 

7 ‘‘(A) IN GENERAL.—The term ‘energy effi8 ciency upgrade’ means any project or activity— 

9 ‘‘(i) the primary purpose of which is 

10 increasing energy efficiency; and 

11 ‘‘(ii) that is carried out on a residen12 tial building. 

13 ‘‘(B) INCLUSIONS.—The term ‘energy effi14 ciency upgrade’ includes the installation or im15 provement of a renewable energy facility for 

16 heating or electricity generation serving a resi17 dential building carried out in conjunction with 

18 an energy efficiency project or activity. 

19 ‘‘(6) PROGRAM ENTITY.—The term ‘program 

20 entity’ means a local government, utility, or other 

21 entity that carries out a financing program under 

22 subsection (e)(2)(A) pursuant to a contract or other 

23 agreement with an eligible entity. 

24 ‘‘(7) RECIPIENT HOUSEHOLD.—The term ‘re25 cipient household’ means the owner or tenant of a 


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1 residential building who receives financing under 

2 this section for an energy efficiency upgrade of the 

3 residential building. 

4 ‘‘(8) RESIDENTIAL BUILDING.— 

5 ‘‘(A) IN GENERAL.—The term ‘residential 

6 building’ means a building used for residential 

7 purposes. 

8 ‘‘(B) INCLUSIONS.—The term ‘residential 

9 building’ includes— 

10 ‘‘(i) a single-family residence; 

11 ‘‘(ii) a multifamily residence composed 

12 not more than 4 units; and 

13 ‘‘(iii) a mixed-use building that in14 cludes not more than 4 residential units. 

15 ‘‘(b) ESTABLISHMENT OF PROGRAM.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall estab17 lish a program under this part under which the Sec18 retary shall make available to eligible entities loans 

19 for the purpose of establishing or expanding pro20 grams that provide to recipient households financing 

21 for energy efficiency upgrades of residential build22 ings. 

23 ‘‘(2) CONSULTATION.—In establishing the pro24 gram under paragraph (1), the Secretary shall conVerDate Sep 11 2014 03:51 Apr 07, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 sult, as the Secretary determines to be appropriate, 

2 with stakeholders and the public. 

3 ‘‘(3) NO REQUIREMENT TO PARTICIPATE.—No 

4 eligible entity shall be required to participate in any 

5 manner in the program established under paragraph 

6 (1). 

7 ‘‘(4) DEADLINES.—The Secretary shall— 

8 ‘‘(A) not later than 1 year after the date 

9 of enactment of this section, implement the pro10 gram established under paragraph (1) (includ11 ing soliciting applications from eligible entities 

12 in accordance with subsection (c)); and 

13 ‘‘(B) not later than 2 years after the date 

14 of enactment of this section, disburse the initial 

15 loans provided under this section. 

16 ‘‘(c) APPLICATIONS.— 

17 ‘‘(1) IN GENERAL.—To be eligible to receive a 

18 loan under this section, an eligible entity shall sub19 mit to the Secretary an application at such time, in 

20 such manner, and containing such information as 

21 the Secretary may require. 

22 ‘‘(2) SELECTION DATE.—Not later than 21 

23 months after the date of enactment of this section, 

24 the Secretary shall select eligible entities to receive 

25 the initial loans provided under this section, in acVerDate Sep 11 2014 03:51 Apr 07, 2015 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 cordance with the requirements described in para2 graph (3). 

3 ‘‘(3) REQUIREMENTS.—In selecting eligible en4 tities to receive loans under this section, the Sec5 retary shall— 

6 ‘‘(A) to the maximum extent practicable, 

7 ensure— 

8 ‘‘(i) that both innovative and estab9 lished approaches to the challenges of fi10 nancing energy efficiency upgrades are 

11 supported; 

12 ‘‘(ii) that energy efficiency upgrades 

13 are conducted and validated to comply with 

14 best practices for work quality, as deter15 mined by the Secretary; 

16 ‘‘(iii) regional diversity among eligible 

17 entities that receive the loans, including 

18 participation by rural States and small 

19 States; 

20 ‘‘(iv) significant participation by fami21 lies with income levels at or below the me22 dian income level for the applicable geo23 graphical region, as determined by the Sec24 retary; and 


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1 ‘‘(v) the incorporation of an energy 

2 advisor program by, as applicable— 

3 ‘‘(I) eligible entities; or 

4 ‘‘(II) program entities; 

5 ‘‘(B) evaluate applications based primarily 

6 on— 

7 ‘‘(i) the projected reduction in energy 

8 use, as determined in accordance with such 

9 specific and commonly available method10 ology as the Secretary shall establish, by 

11 regulation; 

12 ‘‘(ii) the creditworthiness of the eligi13 ble entity; and 

14 ‘‘(iii) the incorporation of measures 

15 for making the loan repayment system for 

16 recipient households as consumer-friendly 

17 as practicable; 

18 ‘‘(C) evaluate applications based second19 arily on— 

20 ‘‘(i) the extent to which the proposed 

21 financing program of the eligible entity in22 corporates best practices for such a pro23 gram, as determined by the Secretary; 

24 ‘‘(ii)(I) whether the eligible entity has 

25 created a plan for evaluating the effectiveVerDate Sep 11 2014 03:51 Apr 07, 2015 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 ness of the proposed financing program; 

2 and 

3 ‘‘(II) whether that plan includes— 

4 ‘‘(aa) a robust strategy for col5 lecting, managing, and analyzing 

6 data, as well as making the data 

7 available to the public; and 

8 ‘‘(bb) experimental studies, which 

9 may include investigations of how 

10 human behavior impacts the effective11 ness of efficiency improvements; 

12 ‘‘(iii) the extent to which Federal 

13 funds are matched by funding from State, 

14 local, philanthropic, private sector, and 

15 other sources; 

16 ‘‘(iv) the extent to which the proposed 

17 financing program will be coordinated and 

18 marketed with other existing or planned 

19 energy efficiency or energy conservation 

20 programs administered by— 

21 ‘‘(I) utilities and rural coopera22 tives; 

23 ‘‘(II) State, tribal, territorial, or 

24 local governments; or 


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1 ‘‘(III) community development fi2 nancial institutions; and 

3 ‘‘(v) such other factors as the Sec4 retary determines to be appropriate; and 

5 ‘‘(D) not provide an advantage or dis6 advantage to applications that include renew7 able energy in the program. 

8 ‘‘(d) ADMINISTRATIVE PROVISIONS.— 

9 ‘‘(1) TERM.—The Secretary shall establish 

10 terms for loans provided to eligible entities under 

11 this section— 

12 ‘‘(A) in a manner that— 

13 ‘‘(i) provides for a high degree of cost 

14 recovery; and 

15 ‘‘(ii) ensures that, with respect to all 

16 loans provided to or by eligible entities 

17 under this section, the loans are competi18 tive with, or superior to, other forms of fi19 nancing for similar purposes; and 

20 ‘‘(B) subject to the condition that the term 

21 of a loan provided to an eligible entity under 

22 this section shall not exceed 35 years. 

23 ‘‘(2) INTEREST RATES.— 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), the Secretary, at the discretion of 


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1 the Secretary, shall charge interest on a loan 

2 provided to an eligible entity under this section 

3 at a fixed rate equal, or approximately equal, to 

4 the interest rate charged on Treasury securities 

5 of comparable maturity. 

6 ‘‘(B) LEVERAGED LOANS.—The interest 

7 rate and other terms of the loans provided to 

8 eligible entities under this section shall be es9 tablished in a manner that ensures that the 

10 total amount of the loans is equal to not less 

11 than 20 times, and not more than 50 times, an 

12 amount equivalent to 80 percent of the amount 

13 appropriated for administrative and general fi14 nancial support costs pursuant to subsection 

15 (g)(2). 

16 ‘‘(3) NO PENALTY ON EARLY REPAYMENT.— 

17 The Secretary shall not assess any penalty for early 

18 repayment by an eligible entity of a loan provided 

19 under this section. 

20 ‘‘(4) RETURN OF UNUSED PORTION.—As a con21 dition of receipt of a loan under this section, an eli22 gible entity shall agree to return to the general fund 

23 of the Treasury any portion of the loan amount that 

24 is unused by the eligible entity within a reasonable 


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1 period after the date of receipt of the loan, as deter2 mined by the Secretary. 

3 ‘‘(e) USE OF FUNDS.— 

4 ‘‘(1) IN GENERAL.—An eligible entity shall use 

5 a loan provided under this section to establish or ex6 pand 1 or more financing programs— 

7 ‘‘(A) the purpose of which is to enable re8 cipient households to undertake energy effi9 ciency upgrades of residential buildings; 

10 ‘‘(B) that may, at the sole discretion of the 

11 eligible entity, require an outlay of capital by 

12 recipient households in accordance with the 

13 goals of the program under this section; and 

14 ‘‘(C) that incorporate a consumer-friendly 

15 loan repayment approach. 

16 ‘‘(2) STRUCTURE OF FINANCING PROGRAM.—A 

17 financing program of an eligible entity may— 

18 ‘‘(A) consist— 

19 ‘‘(i) primarily or entirely of a financ20 ing program administered by— 

21 ‘‘(I) the applicable State; or 

22 ‘‘(II) a program entity; or 

23 ‘‘(ii) of a combination of programs de24 scribed in clause (i); 

25 ‘‘(B) rely on financing provided by— 


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1 ‘‘(i) the eligible entity; or 

2 ‘‘(ii) a third party, acting through the 

3 eligible entity; and 

4 ‘‘(C) include a provision pursuant to which 

5 a recipient household shall agree to return to 

6 the eligible entity any portion of the assistance 

7 that is unused by the recipient household within 

8 a reasonable period after the date of receipt of 

9 the assistance, as determined by the eligible en10 tity. 

11 ‘‘(3) FORM OF ASSISTANCE.—Assistance from 

12 an eligible entity under this subsection may be pro13 vided in any form, or in accordance with any pro14 gram, authorized by Federal law (including regula15 tions), including in the form of— 

16 ‘‘(A) a revolving loan fund; 

17 ‘‘(B) a credit enhancement structure de18 signed to mitigate the effects of default; or 

19 ‘‘(C) a program that— 

20 ‘‘(i) adopts any other approach for 

21 providing financing for energy efficiency 

22 upgrades producing significant energy effi23 ciency gains; and 

24 ‘‘(ii) incorporates measures for mak25 ing the loan repayment system for recipiVerDate Sep 11 2014 03:51 Apr 07, 2015 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 ent households as consumer-friendly as 

2 practicable. 

3 ‘‘(4) SCOPE OF ASSISTANCE.—Assistance pro4 vided by an eligible entity under this subsection may 

5 be used to pay for costs associated with carrying out 

6 an energy efficiency upgrade, including materials 

7 and labor. 

8 ‘‘(5) ADDITIONAL ASSISTANCE.—In addition to 

9 the amount of the loan provided to an eligible entity 

10 by the Secretary under subsection (b), the eligible 

11 entity or program entity, as applicable, may provide 

12 to recipient households such assistance under this 

13 subsection as the eligible entity or program entity 

14 considers to be appropriate from any other funds of 

15 the eligible entity or program entity, including funds 

16 provided to the eligible entity by the Secretary for 

17 administrative costs pursuant to this section. 

18 ‘‘(6) LIMITATIONS.— 

19 ‘‘(A) INTEREST RATES.— 

20 ‘‘(i) INTEREST CHARGED BY ELIGIBLE

21 ENTITIES.—The interest rate charged by 

22 an eligible entity on assistance provided 

23 under this subsection— 

24 ‘‘(I) shall be fixed; and 


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1 ‘‘(II) shall not exceed the interest 

2 rate paid by the eligible entity to the 

3 Secretary under subsection (d)(2). 

4 ‘‘(ii) INTEREST CHARGED BY PRO5 GRAM ENTITIES.—A program entity that 

6 receives funding from an eligible entity 

7 under this subsection for the purpose of 

8 capitalizing a residential energy efficiency 

9 financing program may charge interest on 

10 any loan provided by the program entity at 

11 a fixed rate that is as low as practicable, 

12 but not more than 5 percent more than the 

13 applicable interest rate paid by the eligible 

14 entity to the Secretary under subsection 

15 (d)(2). 

16 ‘‘(B) NO PENALTY ON EARLY REPAY17 MENT.—An eligible entity or program entity, as 

18 applicable, shall not assess any penalty for early 

19 repayment by any recipient household to the eli20 gible entity or program entity, as applicable. 

21 ‘‘(f) REPORTS.— 

22 ‘‘(1) ELIGIBLE ENTITIES.— 

23 ‘‘(A) IN GENERAL.—Not later than 2 years 

24 after the date of receipt of the loan, and annu25 ally thereafter for the term of the loan, an eligiVerDate Sep 11 2014 03:51 Apr 07, 2015 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 ble entity that receives a loan under this section 

2 shall submit to the Secretary a report describ3 ing the performance of each program and activ4 ity carried out using the loan, including 

5 anonymized loan performance data. 

6 ‘‘(B) REQUIREMENTS.—The Secretary, in 

7 consultation with eligible entities and other 

8 stakeholders (such as lending institutions and 

9 the real estate industry), shall establish such re10 quirements for the reports under this para11 graph as the Secretary determines to be appro12 priate— 

13 ‘‘(i) to ensure that the reports are 

14 clear, consistent, and straightforward; and 

15 ‘‘(ii) taking into account the reporting 

16 requirements for similar programs in 

17 which the eligible entities are participating, 

18 if any. 

19 ‘‘(2) SECRETARY.—The Secretary shall submit 

20 to Congress and make available to the public— 

21 ‘‘(A) not less frequently than once each 

22 year, a report describing the performance of the 

23 program under this section, including a syn24 thesis and analysis of the information provided 


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1 in the reports submitted to the Secretary under 

2 paragraph (1)(A); and 

3 ‘‘(B) on termination of the program under 

4 this section, an assessment of the success of, 

5 and education provided by, the measures car6 ried out by eligible entities during the term of 

7 the program. 

8 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

9 are authorized to be appropriated to the Secretary to carry 

10 out this section— 

11 ‘‘(1) $37,500,000 for energy advisor programs; 

12 ‘‘(2) $25,000,000 for administrative and gen13 eral financial support costs to the Secretary of car14 rying out this section; and 

15 ‘‘(3) $37,500,000 for administrative costs to 

16 States in carrying out this section.’’. 

17 (b) REORGANIZATION.— 

18 (1) IN GENERAL.—Part D of title III of the 

19 Energy Policy and Conservation Act (42 U.S.C. 

20 6321 et seq.) is amended— 

21 (A) by redesignating sections 362, 363, 

22 364, 365, and 366 as sections 364, 365, 366, 

23 363, and 362, respectively, and moving the sec24 tions so as to appear in numerical order; 

25 (B) in section 362 (as so redesignated)— 


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1 (i) in paragraph (3)(B)(i), by striking 

2 ‘‘section 367, and’’ and inserting ‘‘section 

3 367 (as in effect on the day before the 

4 date of enactment of the State Energy Ef5 ficiency Programs Improvement Act of 

6 1990 (42 U.S.C. 6201 note; Public Law 

7 101–440)); and’’; and 

8 (ii) in each of paragraphs (4) and (6), 

9 by striking ‘‘section 365(e)(1)’’ each place 

10 it appears and inserting ‘‘section 

11 363(e)(1)’’; 

12 (C) in section 363 (as so redesignated)— 

13 (i) in subsection (b), by striking ‘‘the 

14 provisions of sections 362 and 364 and 

15 subsection (a) of section 363’’ and insert16 ing ‘‘sections 364, 365(a), and 366’’; and 

17 (ii) in subsection (g)(1)(A), in the sec18 ond sentence, by striking ‘‘section 362’’ 

19 and inserting ‘‘section 364’’; and 

20 (D) in section 365 (as so redesignated)— 

21 (i) in subsection (a)— 

22 (I) in paragraph (1), by striking 

23 ‘‘section 362,’’ and inserting ‘‘section 

24 364;’’; and 


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1 (II) in paragraph (2), by striking 

2 ‘‘section 362(b) or (e)’’ and inserting 

3 ‘‘subsection (b) or (e) of section 364’’; 

4 and 

5 (ii) in subsection (b)(2), in the matter 

6 preceding subparagraph (A), by striking 

7 ‘‘section 362(b) or (e)’’ and inserting ‘‘sub8 section (b) or (e) of section 364’’. 

9 (2) CONFORMING AMENDMENTS.—Section 391 

10 of the Energy Policy and Conservation Act (42 

11 U.S.C. 6371) is amended— 

12 (A) in paragraph (2)(M), by striking ‘‘sec13 tion 365(e)(2)’’ and inserting ‘‘section 

14 363(e)(2)’’; and 

15 (B) in paragraph (10), by striking ‘‘section 

16 362 of this Act’’ and inserting ‘‘section 364’’. 

17 (3) CLERICAL AMENDMENT.—The table of con18 tents of the Energy Policy and Conservation Act (42 

19 U.S.C. 6201 note; Public Law 94–163) is amended 

20 by striking the items relating to part D of title III 

21 and inserting the following: 

‘‘PART D—STATE ENERGY CONSERVATION PROGRAMS

‘‘Sec. 361. Findings and purpose. 

‘‘Sec. 362. Definitions. 

‘‘Sec. 363. General provisions. 

‘‘Sec. 364. State energy conservation plans. 

‘‘Sec. 365. Federal assistance to States. 

‘‘Sec. 366. State energy efficiency goals. 

‘‘Sec. 367. Loans for residential building energy efficiency upgrades.’’. 


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1 SEC. 2. OFFSET. 

2 Section 422(f) of the Energy Independence and Secu3 rity Act of 2007 (42 U.S.C. 17082(f)) is amended— 

4 (1) in paragraph (3), by striking ‘‘and’’ after 

5 the semicolon at the end; and 

6 (2) by striking paragraph (4) and inserting the 

7 following: 

8 ‘‘(4) $200,000,000 for each of fiscal years 2013 

9 through 2015; and 

10 ‘‘(5) $166,666,666 for each of fiscal years 2016 

11 through 2018.’’. 

Æ 


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