I 113th CONGRESS 2d Session H. R. 5104 IN THE HOUSE OF REPRESENTATIVES July 14, 2014 Mr. Ross (for himself, Mr. Himes , Mr. Delaney , Mr. Duffy , Mr. Cleaver , and Mrs. Wagner ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To authorize the Secretary of Housing and Urban Development to carry out a demonstration program to enter into budget-neutral, performance-based contracts for energy and water conservation improvements for multifamily residential units.

1. Short title This Act may be cited as the Pay For Success Affordable Housing Energy Modernization Act of 2014 . 2. Budget-neutral demonstration program for energy and water conservation improvements at multifamily residential units (a) Establishment The Secretary of Housing and Urban Development (referred to in this section as the Secretary ) shall establish a demonstration program under which, during the period beginning on the date of enactment of this Act, and ending on September 30, 2017, the Secretary may enter into budget-neutral, performance-based agreements that result in a reduction in energy or water costs with such entities as the Secretary determines to be appropriate under which the entities shall carry out projects for energy or water conservation improvements at not more than 20,000 residential units in multifamily buildings participating in— (1) the project-based rental assistance program under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ), other than assistance provided under section 8(o) of that Act; (2) the supportive housing for the elderly program under section 202 of the Housing Act of 1959 (12 U.S.C. 1701q); or (3) the supportive housing for persons with disabilities program under section 811(d)(2) of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 8013(d)(2) ). (b) Requirements (1) Payments contingent on savings (A) In general The Secretary shall provide to an entity a payment under an agreement under this section only during applicable years for which an energy or water cost savings is achieved with respect to the applicable multifamily portfolio of properties, as determined by the Secretary, in accordance with subparagraph (B). (B) Payment methodology (i) In general Each agreement under this section shall include a pay-for-success provision— (I) that will serve as a payment threshold for the term of the agreement; and (II) pursuant to which the Department of Housing and Urban Development shall share a percentage of the savings at a level determined by the Secretary that is sufficient to cover the administrative costs of carrying out this section. (ii) Limitations A payment made by the Secretary under an agreement under this section shall— (I) be contingent on documented utility savings; and (II) not exceed the utility savings achieved by the date of the payment, and not previously paid, as a result of the improvements made under the agreement. (C) Third-party verification Savings payments made by the Secretary under this section shall be based on a measurement and verification protocol that includes at least— (i) establishment of a weather-normalized and occupancy-normalized utility consumption baseline established pre-retrofit; (ii) annual third-party confirmation of actual utility consumption and cost for owner-paid utilities; (iii) annual third-party validation of the tenant utility allowances in effect during the applicable year and vacancy rates for each unit type; and (iv) annual third-party determination of savings to the Secretary. (2) Term The term of an agreement under this section shall be not longer than 12 years. (3) Entity eligibility The Secretary shall— (A) establish a competitive process for entering into agreements under this section; and (B) enter into such agreements only with entities that demonstrate significant experience relating to— (i) financing and operating properties receiving assistance under a program described in subsection (a); (ii) oversight of energy and water conservation programs, including oversight of contractors; and (iii) raising capital for energy and water conservation improvements from charitable organizations or private investors. (4) Geographical diversity Each agreement entered into under this section shall provide for the inclusion of properties with the greatest feasible regional and State variance. (c) Plan and reports (1) Plan Not later than 90 days after the date of enactment of this Act, the Secretary shall submit to the Committees on Appropriations of the House of Representatives and the Senate a detailed plan for the implementation of this section. (2) Reports Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Secretary shall— (A) conduct an evaluation of the program under this section; and (B) submit to Congress a report describing each evaluation conducted under subparagraph (A). (d) Funding For each fiscal year during which an agreement under this section is in effect, the Secretary may use to carry out this section any funds appropriated to the Secretary for the renewal of contracts under a program described in subsection (a).