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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Home Energy Con-
servation Act of 2010’’. 
SEC. 2. HOME ENERGY CONSERVATION BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘SEC. 54G. HOME ENERGY CONSERVATION BONDS. 
‘‘(a) HOME ENERGY CONSERVATION BOND.—For 
purposes of this subchapter, the term ‘home energy con-
servation bond’ means any bond issued as part of an issue 
if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used to make qualified 
residential energy efficiency assistance grants and 
loans, 
‘‘(2) not less than 20 percent of the available 
project proceeds of such issue are to be used to 
make qualified low-income residential energy effi-
ciency assistance grants and loans, 
‘‘(3) not less than 10 percent of the available 
project proceeds of such issue are to be used to 
make qualified very low-income residential energy ef-
ficiency assistance grants, 
‘‘(4) repayments of principal and applicable in-
terest on financing provided by the issue are used 
not later than the close of the 3-month period begin-
ning on the date the prepayment (or complete repay-
ment) is received to redeem bonds which are part of 
the issue or to make qualified residential energy effi-
ciency assistance grants and loans, 
‘‘(5) the bond is issued by a State or local gov-
ernment, and 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(6) the issuer designates such bond for pur-
poses of this section. 
‘‘(b) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
under subsection (d) to such issuer. 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national home energy conserva-
tion bond limitation of $2,400,000,000. 
‘‘(d) ALLOCATIONS.— 
‘‘(1) IN GENERAL.—The limitation under sub-
section (c) shall be allocated by the Secretary among 
the States in proportion to the population of the 
States. 
‘‘(2) ALLOCATIONS
TO
LARGEST
LOCAL
GOV-
ERNMENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
State in which there is a large local govern-
ment, each such local government shall be allo-
cated a portion of such State’s allocation which 
bears the same ratio to the State’s allocation 
(determined without regard to this subpara-
graph) as the population of such large local 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
government bears to the population of such 
State. 
‘‘(B) ALLOCATION OF UNUSED LIMITATION 
TO STATE.—The amount allocated under this 
subsection to a large local government may be 
reallocated by such local government to the 
State in which such local government is located. 
‘‘(C) LARGE
LOCAL
GOVERNMENT.—For 
purposes of this section, the term ‘large local 
government’ means any municipality or county 
if such municipality or county has a population 
of 500,000 or more. 
‘‘(e) QUALIFIED RESIDENTIAL ENERGY EFFICIENCY 
ASSISTANCE GRANTS AND LOANS.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—Qualified residential energy 
efficiency assistance grants and loans are any grant 
or low-interest loan, as the case may be, to acquire 
(including reasonable installation and testing costs) 
any of the following: 
‘‘(A) Any property which meets (at a min-
imum) the requirements of the Energy Star 
program and which is to be installed in a dwell-
ing unit. 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(B) Any property not described in sub-
paragraph (A) which meets (at a minimum) the 
requirements of the Water Sense program and 
which is to be installed in a dwelling unit. 
‘‘(C) Any improvements to a dwelling unit 
which are made pursuant to a plan which— 
‘‘(i) is developed by a Residential En-
ergy Services Network (RESNET), Build-
ing Performance Institute (BPI), or equiv-
alent, energy efficiency expert, and 
‘‘(ii) is certified by such energy effi-
ciency expert (based on testing done before 
and after such improvements) as resulting 
in at least a 20 percent reduction in total 
household energy consumption related to 
heating, cooling, lighting, and appliances. 
For purposes of this subparagraph, improve-
ments to a dwelling unit for basic health and 
safety may be taken into account to the extent 
that such improvements do not exceed 10 per-
cent of the value of the grant or loan and are 
required under State or local law as a condition 
of making the other improvement described in 
this subparagraph. 
‘‘(2) DOLLAR LIMITATIONS.— 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(A) DWELLING UNIT IMPROVEMENTS.— 
‘‘(i) IN
GENERAL.—Such term shall 
not include any grant or loan for improve-
ments described in paragraph (1)(C) with 
respect to any dwelling unit to the extent 
that such grant or loan (when added to all 
other grants or loans for such improve-
ments) exceeds $5,000. 
‘‘(ii) INCREASED
LIMITATION
FOR 
CERTAIN PRINCIPAL RESIDENCES.—In the 
case of a dwelling unit which is used as a 
principal residence (within the meaning of 
section 121) by the recipient of the grant 
or loan referred to in clause (i)— 
‘‘(I) clause (i) shall be applied by 
substituting ‘$12,000’ for ‘$5,000’ if 
such grant or loan would satisfy the 
requirements of paragraph (1)(C) if 
such paragraph were applied by sub-
stituting ‘40 percent’ for ‘20 percent’, 
and 
‘‘(II) in any case to which sub-
clause (I) does not apply, clause (i) 
shall 
be 
applied 
by 
substituting 
‘$8,000’ for ‘$5,000’ if such grant or 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
loan would satisfy the requirements of 
paragraph (1)(C) if such paragraph 
were applied by substituting ‘30 per-
cent’ for ‘20 percent’. 
‘‘(iii) INCREASED
LIMITATION
FOR 
CASH POSITIVE LOANS.—In the case of a 
dwelling unit which is used as a principal 
residence (within the meaning of section 
121) by the recipient of a loan with respect 
to which the reduced energy costs which 
result from the improvements described in 
paragraph (1)(C) exceed the payments re-
quired under the terms of the loan— 
‘‘(I) clause (i) shall be applied by 
substituting ‘$12,000’ for ‘$5,000’, 
and 
‘‘(II) clause (ii) shall not apply. 
‘‘(B) REDUCTION
IN
WATER
CONSUMP-
TION.—Such term shall not include any grant 
or loan for property described in paragraph 
(1)(B) with respect to any dwelling unit to the 
extent that such grant or loan (when added to 
all other grants or loans for such property) ex-
ceeds $500. 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(3) LOW-INTEREST LOAN.—The term ‘low in-
terest loan’ means any loan which charges interest 
at a rate which does not exceed the applicable Fed-
eral rate in effect under section 1288(b)(1) deter-
mined as of the issuance of the loan. 
‘‘(4) EXCLUSION OF CERTAIN PROPERTY.—The 
following property shall not be taken into account 
for purposes of paragraph (1): 
‘‘(A) Any equipment used in connection 
with a swimming pool, hot tub, or similar prop-
erty. 
‘‘(B) Any television. 
‘‘(C) Any device for converting digital sig-
nal to analog. 
‘‘(D) Any DVD player. 
‘‘(E) Any video cassette recorder (VCR). 
‘‘(F) Any audio equipment. 
‘‘(G) Any cordless phone. 
‘‘(H) Any other item of property where 
there is substantial recreational use. 
‘‘(f) QUALIFIED LOW-INCOME RESIDENTIAL EFFI-
CIENCY ASSISTANCE GRANTS AND LOANS.— 
‘‘(1) IN GENERAL.—Qualified low-income resi-
dential energy efficiency assistance grants and loans 
are any qualified residential energy efficiency assist-
VerDate 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
ance grant or loan, as the case may be, with respect 
to a dwelling unit which is occupied (at the time of 
the grant or loan) by individuals whose income is 
100 percent or less of area median gross income. 
Rules similar to the rules of section 142(d)(2)(B) 
shall apply for purposes of this paragraph. 
‘‘(2) RESTRICTION TO GRANTS AND VERY LOW 
INTEREST LOANS.—Such term shall not include any 
loan unless the rate of interest on such loan does not 
exceed the excess of— 
‘‘(A) the applicable Federal rate in effect 
under section 1288(b)(1) determined as of the 
issuance of the loan, over 
‘‘(B) 100 basis points. 
‘‘(g) QUALIFIED VERY LOW-INCOME RESIDENTIAL 
EFFICIENCY ASSISTANCE GRANTS.—For purposes of this 
section, qualified very low-income residential energy effi-
ciency assistance grants are any qualified low-income resi-
dential energy efficiency assistance grant with respect to 
a dwelling unit which is occupied (at the time of the grant) 
by individuals whose income is 50 percent or less of area 
median gross income. Rules similar to the rules of section 
142(d)(2)(B) shall apply for purposes of this paragraph. 
‘‘(h) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
‘‘(1) APPLICABLE INTEREST.—The term ‘appli-
cable interest’ means, with respect to any loan, so 
much of any interest on such loan which exceeds 1 
percentage point. 
‘‘(2) SPECIAL
RULE
RELATING
TO
ARBI-
TRAGE.—An issue shall not be treated as failing to 
meet the requirements of section 54A(d)(4)(A) by 
reason of any investment of available project pro-
ceeds in qualified residential energy efficiency assist-
ance loans. 
‘‘(3) EXCLUSION
OF
ADMINISTRATIVE
EX-
PENSES.—The amount treated as used to make any 
grant or loan described in this section shall not ex-
ceed the amount of such grant or loan. 
‘‘(4) POPULATION.—The population of any 
State or local government shall be determined as 
provided in section 146(j) for the calendar year 
which includes the date of the enactment of this sec-
tion. 
‘‘(5) REPORTING.— 
‘‘(A) REPORTS
BY
ISSUERS.—Issuers of 
home energy conservation bonds shall, not later 
than 6 months after the expenditure period (as 
defined in section 54A) and annually thereafter 
until the last such bond is redeemed, submit re-
VerDate 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
program under this section, including informa-
tion regarding— 
‘‘(i) the aggregate of each category of 
information described in subparagraph (A) 
(including any independent assessment of 
projected energy savings), and 
‘‘(ii) an estimate of the amount of 
greenhouse gas emissions reduced as a re-
sult of such bond program.’’. 
(b) TREATMENT AS A SPECIFIED TAX CREDIT BOND 
FOR PURPOSES OF DIRECT PAYMENT PROVISIONS.—Sub-
paragraph (A) of section 6431(f)(3) of such Code is 
amended by striking ‘‘or’’ at the end of clause (iii), by 
striking ‘‘and’’ at the end of clause (iv) and inserting ‘‘or’’, 
and by adding at the end the following new clause: 
‘‘(v) a home energy conservation bond 
(as defined in section 54G), and’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) of such 
Code is amended by striking ‘‘or’’ at the end of sub-
paragraph (D), by inserting ‘‘or’’ at the end of sub-
paragraph (E), and by inserting after subparagraph 
(E) the following new subparagraph: 
‘‘(F) a home energy conservation bond,’’. 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS
(2) Subparagraph (C) of section 54A(d)(2) of 
such Code is amended by striking ‘‘and’’ at the end 
of clause (iv), by striking the period at the end of 
clause (v) and inserting ‘‘, and’’, and by adding at 
the end the following new clause: 
‘‘(vi) in the case of a home energy 
conservation bond, a purpose specified in 
section 54G(a)(1).’’. 
(3) The table of sections for subpart I of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 54G. Home energy conservation bonds.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
Æ 
VerDate Mar 15 2010 
22:02 Jun 29, 2010
Jkt 089200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6301
E:\BILLS\H5617.IH
H5617
srobinson on DSKHWCL6B1PROD with BILLS