I 113th CONGRESS 2d Session H. R. 5004 IN THE HOUSE OF REPRESENTATIVES June 26, 2014 Mr. Himes (for himself, Mr. Delaney , Mr. Welch , and Mr. Cartwright ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To improve the energy efficiency of multifamily housing in the United States, and for other purposes.

1. Short title This Act may be cited as the Multifamily Housing Energy Efficiency Improvement Act of 2014 . 2. Study of relationship between energy savings improvements and mortgage performance (a) Study Not later than 90 days after the date of the enactment of this Act, the Secretary of Housing and Urban Development, in coordination with the Director of the Federal Housing Finance Agency and in consultation with the Secretary of Energy, shall commence a study to analyze the relationship between energy savings improvements to homes and buildings, utility and energy expenses, and mortgage performance, which shall include an analysis of— (1) the likely increase in value of homes or buildings from energy savings improvements; (2) the effect of energy savings improvements on mortgage default rates; and (3) the risks of financing energy savings improvements through property assessments and the risks associated with providing energy efficiency products with senior liens on buildings or homes. (b) Protection of information In conducting the study required under subsection (a), the Secretary shall ensure that data shared with any third-party or published does not contain any personally identifiable information. (c) Publication Not later than one year after the date of the enactment of this Act, the Secretary of Housing and Urban Development shall— (1) publish the results of the study required under subsection (a) on the publicly available website of the Department of Housing and Urban Development; and (2) submit a report regarding the results of the study required under subsection (a) to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. (d) Evaluation Not later than 12 months after the completion of the study required by subsection (a), the Secretary and the Director of the Federal Housing Finance Agency shall evaluate departmental procedures and policies to assess if they accurately reflect the energy expenses and benefits of energy savings improvements for homeowners and building owners. 3. Improvements to existing multifamily housing energy efficiency programs (a) Green refinancing Section 223 of the National Housing Act ( 12 U.S.C. 1715n ) is amended by adding at the end the following new subsection: (h) Green refinancing The Secretary shall, by regulation, establish a green refinancing program for multifamily housing projects insured under subsection (f) under which any dollar amount limitations which would otherwise apply with respect to a project may be increased by up to 20 percent for the cost of residential energy conservation measures for the project, but the Secretary shall only insure residential energy conservation measures pursuant to this subsection if the Secretary verifies that— (1) a third-party assessment procured by the lender or borrower has been conducted of the project’s physical needs, including an energy audit and identification of cost-effective opportunities for increasing energy and water efficiency and achieving a reduction in energy and water costs, and such assessment indicates that such energy conservation measures will be cost-effective over the life of the conservation measure; and (2) such energy conservation measures will be verified and monitored over the life of the mortgage, using such method as the Secretary determines appropriate. For purposes of this subsection, the term energy conservation measure has the meaning given such term in section 221(k)(3) ( 12 U.S.C. 1715l(k)(3) ). . (b) Verification of cost-Effectiveness of residential energy conservation measures Subsection (k) of section 221 of the National Housing Act ( 12 U.S.C. 1715l(k) ) is amended— (1) by striking and will be cost-effective over the life of the measure ; (2) by striking (k) With respect to any project and inserting the following: (k) Financing of solar energy systems and residential energy conservation measures (1) Authority Subject to paragraph (2), with respect to any project ; and (3) by adding at the end the following new paragraphs: (2) Verification regarding residential energy conservation measures The Secretary may increase the dollar amount limitations pursuant to paragraph (1) with respect to a project due to residential energy conservation measures for the project only if the Secretary— (A) verifies that in the case of a mortgage insured under this section financing new construction of the project, such measures will be cost-effective over the life of the measures; (B) in the case of a mortgage insured under this section financing repair and rehabilitation of the project, verifies that a third-party assessment procured by the lender or borrower has been conducted of the project’s physical needs, including an energy audit and identification of cost-effective opportunities for increasing energy and water efficiency and achieving a reduction in energy and water costs, and such assessment indicates that the energy conservation measures to be installed will be cost-effective over the life of the measures; and (C) ensures that the project is provided information that will enable the project to verify and monitor the energy savings achieved by the energy conservation measures on a voluntary basis. (3) Definition of energy conservation measure For purposes of this subsection, the term energy conservation measure means, with respect to a project, any measure that will result in a reduction in energy, water, or gas consumption for the project. . (c) Implementation (1) Guidance The Secretary of Housing and Urban Development shall issue guidance to implement the amendments made by this section not later than the expiration of the 12-month period beginning on the date of the enactment of this Act. (2) Annual report on energy efficiency improvements The Secretary of Housing and Urban Development shall, on an annual basis, make available on a publicly available website of the Department a report describing the implementation of the amendments made by this section and the programs for financing residential energy conservation measures under sections 221(k) and 223(h) of the National Housing Act ( 12 U.S.C. 1715l(k) , 1715n(h)) as amended by such amendments. 4. Multifamily housing energy efficiency innovation (a) Multifamily housing energy innovation plan The Secretary of Housing and Urban Development shall carry out a program to be known as the Multifamily Housing Energy Innovation Plan to make grants to eligible entities to establish or expand an energy savings plan that uses innovative approaches to reduce energy, water, and/or gas consumption in multifamily housing. (b) Submission and selection of multifamily housing energy innovation plans (1) Application To be eligible to receive a grant under this section, an eligible entity shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may require, which shall include— (A) a description of the energy savings plan established or expanded using amounts from a grant under this section that includes goals of the plan, use of grant funds, and the anticipated outcome of the plan; (B) the amount of grant funds needed for such plan and the amount and sources of other funding, including matching funds required under subsection (d)(1); and (C) a description of how implementing such plan will comply with the energy savings requirement under subsection (c)(2). (2) Selection The Secretary shall establish criteria for selection of applications submitted under paragraph (1) to receive grants under this section and shall select eligible entities to receive grants based on such criteria. Such criteria shall be based upon— (A) the relevant experience and capacity of the eligible entity to carry out the energy savings plan to be assisted with grant amounts and to achieve the stated goals of such plan; (B) the extent to which such plan provides an innovative approach to reducing energy consumption in multifamily housing; (C) the ability of such plan to be replicated by others; and (D) such other factors as the Secretary determines to be appropriate. (3) Priority In awarding grants under this section, the Secretary shall give priority to applications based on— (A) the extent of funding for the energy savings plan secured by the eligible entity from private, nonprofit, or government sources in addition to the matching funds required under subsection (d)(1); (B) the extent of the proposed benefit of the energy savings plan to low-income families; and (C) the extent to which the energy savings plan would reduce budgetary expenses for the Department of Housing and Urban Development. (c) Use of grant funds (1) Eligible energy savings plans Amounts from grants under this section may be used only for energy savings plans that— (A) are financing demonstrations for multifamily housing, including for financing through credit enhancements, revolving loan funds, loan loss reserves, interest rate subsidies, loan insurance, or other financing methods approved by the Secretary; (B) create green jobs, including in the fields of construction, property management, and technical analysis, that directly promote the adoption of energy savings measures in multifamily housing, including energy savings plans that create green jobs for low-income families; (C) acquire and analyze data on the costs, benefits, challenges, and opportunities associated with retrofitting multifamily housing for energy efficiency; or (D) research and implement a demonstration project that— (i) creates retrofit or repair strategies that use readily available technologies to reduce or increase the efficiency of energy, water, and gas consumption that are not typically used for multifamily housing; (ii) addresses the split incentive problem, including implementing changes to methods for utility metering in multifamily housing; (iii) creates a system for benchmarking, tracking, and sharing energy consumption statistics for multifamily housing; or (iv) achieves another goal as approved by the Secretary. (2) Energy savings requirement Amounts from a grant under this section may be used only to carry out an energy savings plan described in paragraph (1) that will result in at least a 20-percent reduction in the energy, water, or gas consumption of multifamily housing and a description of the methodology to be used to compute the reduction in energy consumption. (d) Other requirements (1) Matching funds An eligible entity that receives a grant under this section shall contribute towards the energy savings plan amounts from private, nonprofit, or government sources that are not less than the amount of the grant. (2) Duration Grants shall be awarded for a period not to exceed 24 months. (3) Eligible entity report Not later than 12 months after the date on which the grant period of an eligible entity that received a grant under this section ends, each such eligible entity shall submit to the Secretary a report on the performance of energy savings plans carried out pursuant to this section that shall contain such information as the Secretary shall require. (e) Definitions In this section the following definitions shall apply: (1) Eligible entity The term eligible entity means a partnership between 2 or more of the following entities: (A) A State or unit of local government. (B) A provider of utility services. (C) A community housing development organization as defined in section 104 of the Cranston-Gonzalez National Affordable Housing Act ( 42 U.S.C. 12704 ). (D) A public housing agency as defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)). (E) A non-profit or for-profit entity whose primary business is management of multifamily housing. (2) Energy savings plan The term energy savings plan means a program, project, or activity for energy savings or water and gas efficiency in multifamily housing. (3) Low-income families The term low-income families has the meaning given that term in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)). (4) Multifamily housing The term multifamily housing means a residence consisting of 5 or more dwelling units. (5) Secretary The term Secretary means the Secretary of Housing and Urban Development. (6) Split incentive problem The term split incentive problem means, with respect to multifamily housing, a situation in which— (A) the occupant of a dwelling unit in the housing does not pay for energy, water, or gas consumption for such unit and is not incentivized to implement an energy savings measure; or (B) the owner does not pay for energy, water, or gas consumption for dwelling units in the housing and is not incentivized to implement an energy savings measure. (7) State The term State means each of the several States, the District of Columbia, and any territory or possession of the United States. (f) Authorization of appropriations There is authorized to be appropriated to the Secretary $25,000,000 for fiscal year 2015, $20,000,000 for fiscal year 2016, $15,000,000 for fiscal year 2017, and $10,000,000 for fiscal year 2018 to carry out this section. 5. Green preservation expansion During the 5-year period beginning on the date of the enactment of this Act, the Secretary of Housing and Urban Development may waive any statutory or regulatory requirement regarding the eligibility of multifamily properties for an existing risk-sharing agreement entered into under section 542 of the Housing and Community Development Act of 1992 ( 12 U.S.C. 1715z–22 ), but only if such waiver facilitates the adoption of energy or water conservation measures in such properties.