II 117th CONGRESS 1st Session S. 2066 IN THE SENATE OF THE UNITED STATES June 15, 2021 Mr. Manchin (for himself and Ms. Murkowski ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To require the Secretary of Energy to establish an energy efficiency revolving loan fund capitalization grant program, and for other purposes.

1. Short title This Act may be cited as the Investing in New Strategies for Upgrading Lower Attaining Efficiency Buildings Act of 2021 or the INSULATE Buildings Act of 2021 . 2. Definitions In this Act: (1) Priority State The term priority State means a State that— (A) is eligible for funding under the State Energy Program; and (B) (i) is among the 15 States with the highest annual per-capita combined residential and commercial sector energy consumption, as most recently reported by the Energy Information Administration; or (ii) is among the 15 States with the highest annual per-capita energy-related carbon dioxide emissions by State, as most recently reported by the Energy Information Administration. (2) Program The term program means the program established under section 3(a). (3) Secretary The term Secretary means the Secretary of Energy. (4) State The term State means a State (as defined in section 3 of the Energy Policy and Conservation Act ( 42 U.S.C. 6202 )), acting through a State energy office. (5) State Energy Program The term State Energy Program means the State Energy Program established under part D of title III of the Energy Policy and Conservation Act ( 42 U.S.C. 6321 et seq. ). 3. Energy efficiency revolving loan fund capitalization grant program (a) In general Not later than 1 year after the date of enactment of this Act, under the State Energy Program, the Secretary shall establish a program under which the Secretary shall provide capitalization grants to States to establish a revolving loan fund under which the State shall provide loans and grants, as applicable, in accordance with this section. (b) Distribution of funds (1) All States (A) In general Of the amounts made available under subsection (k), the Secretary shall use 40 percent to provide capitalization grants to States that are eligible for funding under the State Energy Program, in accordance with the allocation formula established under section 420.11 of title 10, Code of Federal Regulations (or successor regulations). (B) Remaining funding After applying the allocation formula described in subparagraph (A), the Secretary shall redistribute any unclaimed funds to the remaining States seeking capitalization grants under that subparagraph. (2) Priority States (A) In general Of the amounts made available under subsection (k), the Secretary shall use 60 percent to provide supplemental capitalization grants to priority States in accordance with an allocation formula determined by the Secretary. (B) Remaining funding After applying the allocation formula described in subparagraph (A), the Secretary shall redistribute any unclaimed funds to the remaining priority States seeking supplemental capitalization grants under that subparagraph. (C) Grant amount (i) Maximum amount The amount of a supplemental capitalization grant provided to a State under this paragraph shall not exceed $30,000,000. (ii) Supplement not supplant A supplemental capitalization grant received by a State under this paragraph shall supplement, not supplant, a capitalization grant received by that State under paragraph (1). (c) Applications for capitalization grants A State seeking a capitalization grant under the program shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including— (1) a detailed explanation of how the grant will be used, including a plan to establish a new revolving loan fund or use an existing revolving loan fund; (2) the need of eligible recipients for loans and grants in the State for assistance with conducting energy audits; (3) a description of the expected benefits that building infrastructure and energy system upgrades and retrofits will have on communities in the State; and (4) in the case of a priority State seeking a supplemental capitalization grant under subsection (b)(2), a justification for needing the supplemental funding. (d) Timing (1) In general The Secretary shall establish a timeline with dates by, or periods by the end of, which a State shall— (A) on receipt of a capitalization grant under the program, deposit the grant funds into a revolving loan fund; and (B) begin using the capitalization grant as described in subsection (e)(1). (2) Use of grant Under the timeline established under paragraph (1), a State shall be required to begin using a capitalization grant not more than 180 days after the date on which the grant is received. (e) Use of grant funds (1) In general A State that receives a capitalization grant under the program— (A) shall provide loans in accordance with paragraph (2); and (B) may provide grants in accordance with paragraph (3). (2) Loans (A) Commercial energy audit (i) In general A State that receives a capitalization grant under the program may provide a loan to an eligible recipient described in clause (iii) to conduct a commercial energy audit. (ii) Audit requirements A commercial energy audit conducted using a loan provided under clause (i) shall— (I) determine the overall consumption of energy of the facility of the eligible recipient; (II) identify and recommend lifecycle cost-effective opportunities to reduce the energy consumption of the facility of the eligible recipient, including through energy efficient— (aa) lighting; (bb) heating, ventilation, and air conditioning systems; (cc) windows; (dd) appliances; and (ee) insulation and building envelopes; (III) estimate the energy and cost savings potential of the opportunities identified in subclause (II) using software approved by the Secretary; (IV) identify— (aa) the period and level of peak energy demand for each building within the facility of the eligible recipient; and (bb) the sources of energy consumption that are contributing the most to that period of peak energy demand; (V) recommend controls and management systems to reduce or redistribute peak energy consumption; (VI) recommend strategies to increase electrification of the facility of the eligible recipient, including the installation of— (aa) charging infrastructure for plug-in electric vehicles; (bb) electric heating and cooling systems; or (cc) electric appliances; and (VII) estimate the total energy and cost savings potential for the facility of the eligible recipient if all recommended upgrades and retrofits are implemented, using software approved by the Secretary. (iii) Eligible recipients An eligible recipient under clause (i) is a business that— (I) conducts the majority of its business in the State that provides the loan under that clause; and (II) owns or operates— (aa) 1 or more commercial buildings; or (bb) commercial space within a building that serves multiple functions, such as a building for commercial and residential operations. (B) Residential energy audits (i) In general A State that receives a capitalization grant under the program may provide a loan to an eligible recipient described in clause (iii) to conduct a residential energy audit. (ii) Residential energy audit requirements A residential energy audit conducted using a loan under clause (i) shall— (I) utilize the same evaluation criteria as the Home Performance Assessment used in the Energy Star program established under section 324A of the Energy Policy and Conservation Act ( 42 U.S.C. 6294a ); (II) recommend lifecycle cost-effective opportunities to reduce energy consumption within the residential building of the eligible recipient, including through energy efficient— (aa) lighting; (bb) heating, ventilation, and air conditioning systems; (cc) windows; (dd) appliances; and (ee) insulation and building envelopes; (III) recommend controls and management systems to reduce or redistribute peak energy consumption; (IV) recommend strategies to increase electrification of the residential building of the eligible recipient, including the installation of— (aa) charging infrastructure for plug-in electric vehicles, if possible; (bb) electric heating and cooling systems; or (cc) electric appliances; (V) compare the energy consumption of the residential building of the eligible recipient to comparable residential buildings in the same geographic area; and (VI) provide a Home Energy Score, or equivalent score, for the residential building of the eligible recipient by using the Home Energy Score Tool of the Department of Energy or an equivalent scoring tool. (iii) Eligible recipients An eligible recipient under clause (i) is— (I) an individual who owns— (aa) a single family home; (bb) a condominium or duplex; or (cc) a manufactured housing unit; or (II) a business that owns or operates a multifamily housing facility. (C) Commercial and residential energy upgrades and retrofits (i) In general A State that receives a capitalization grant under the program may provide a loan to an eligible recipient described in clause (ii) to carry out upgrades or retrofits of building infrastructure and systems that— (I) are recommended in the commercial energy audit or residential energy audit, as applicable, completed for the building or facility of the eligible recipient; (II) satisfy at least 1 of the criteria in the Home Performance Assessment used in the Energy Star program established under section 324A of the Energy Policy and Conservation Act ( 42 U.S.C. 6294a ); (III) improve, with respect to the building or facility of the eligible recipient— (aa) the physical comfort of the building or facility occupants; (bb) the energy efficiency of the building or facility; or (cc) the quality of the air in the building or facility; and (IV) (aa) are lifecycle cost-effective; and (bb) (AA) reduce the energy intensity of the building or facility of the eligible recipient; or (BB) improve the control and management of energy usage of the building or facility to reduce demand during peak times. (ii) Eligible recipients An eligible recipient under clause (i) is an eligible recipient described in subparagraph (A)(iii) or (B)(iii) that— (I) has completed a commercial energy audit described in subparagraph (A) or a residential energy audit described in subparagraph (B) using a loan provided under the applicable subparagraph; or (II) has completed a commercial energy audit or residential energy audit that— (aa) was not funded by a loan under this paragraph; and (bb) (AA) meets the requirements for the applicable audit under subparagraph (A) or (B), as applicable; or (BB) the Secretary determines is otherwise satisfactory. (iii) Loan term A loan provided under this subparagraph shall be required to be fully amortized by the earlier of— (I) the year in which the upgrades or retrofits carried out using the loan exceed their expected useful life; and (II) 15 years after those upgrades or retrofits are installed. (D) Referral to qualified contractors Following the completion of an audit under subparagraph (A) or (B) by an eligible recipient of a loan under the applicable subparagraph, the State may refer the eligible recipient to a qualified contractor, as determined by the State, to estimate— (i) the upfront capital cost of each recommended upgrade; and (ii) the total upfront capital cost of implementing all recommended upgrades. (E) Loan recipients Each State providing loans under this paragraph shall, to the maximum extent practicable, provide loans to eligible recipients that do not have access to private capital. (3) Grants and technical assistance (A) In general A State that receives a capitalization grant under the program may use not more than 25 percent of the grant funds to provide grants or technical assistance to eligible entities described in subparagraph (B) to carry out the activities described in subparagraphs (A), (B), and (C) of paragraph (2). (B) Eligible entity An entity eligible for a grant or technical assistance under subparagraph (A) is— (i) a business that— (I) is an eligible recipient described in paragraph (2)(A)(iii); and (II) has fewer than 500 employees; or (ii) a low-income individual (as defined in section 3 of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3102 )) that owns a residential building. (4) Administrative expenses A State that receives a capitalization grant under the program may use not more than 10 percent of the grant funds for administrative expenses. (f) Coordination with existing programs A State receiving a capitalization grant under the program is encouraged to utilize and build on existing programs and infrastructure within the State that may aid the State in carrying out a revolving loan fund program. (g) Leveraging private capital A State receiving a capitalization grant under the program shall, to the maximum extent practicable, use the grant to leverage private capital. (h) Outreach The Secretary shall engage in outreach to inform States of the availability of capitalization grants under the program. (i) Davis-Bacon compliance (1) In general Any laborer or mechanic employed by any contractor or subcontractor in the performance of work on any project funded by a grant under this section shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor under subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act ). (2) Authority With respect to the labor standards specified in paragraph (1), the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States Code. (j) Report Each State that receives a capitalization grant under the program shall, not later than 1 year after a grant is received, submit to the Secretary a report that describes— (1) the number of recipients to which the State has distributed— (A) loans for— (i) commercial energy audits under subsection (e)(2)(A); (ii) residential energy audits under subsection (e)(2)(B); (iii) energy upgrades and retrofits under subsection (e)(2)(C); and (B) grants under subsection (e)(3); and (2) the average capital cost of upgrades and retrofits across all commercial energy audits and residential energy audits that were conducted in the State using loans provided by the State under subsection (e). (k) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this section $250,000,000 for each of fiscal years 2022 through 2026, to remain available until expended. 4. Energy auditor training grant program (a) Definitions In this section: (1) Covered certification The term covered certification means any of the following certifications: (A) The ASHRAE Building Energy Assessment Professional certification. (B) The Association of Energy Engineers Certified Energy Auditor certification. (C) The Building Performance Institute Home Energy Professional Energy Auditor certification. (D) The Residential Energy Services Network Home Energy Rater certification. (E) Any other third-party certification recognized by the Department of Energy. (F) Any third-party certification that the Secretary determines is equivalent to the certifications described in subparagraphs (A) through (E). (2) Eligible State The term eligible State means a State that— (A) has a demonstrated need for assistance for training energy auditors; and (B) meets any additional criteria determined necessary by the Secretary. (b) Establishment Under the State Energy Program, the Secretary shall establish a competitive grant program under which the Secretary shall award grants to eligible States to train individuals to conduct energy audits or surveys of commercial and residential buildings. (c) Applications (1) In general A State seeking a grant under subsection (b) shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including the energy auditor training program plan described in paragraph (2). (2) Energy auditor training program plan An energy auditor training program plan submitted with an application under paragraph (1) shall include— (A) (i) a proposed training curriculum for energy audit trainees; and (ii) an identification of the covered certification that those trainees will receive on completion of that training curriculum; (B) the expected per-individual cost of training; (C) a plan for connecting trainees with employment opportunities; and (D) any additional information required by the Secretary. (d) Amount of grant The amount of a grant awarded to an eligible State under subsection (b)— (1) shall be determined by the Secretary, taking into account the population of the eligible State; and (2) shall not exceed $2,000,000 for any eligible State. (e) Use of funds (1) In general An eligible State that receives a grant under subsection (b) shall use the grant funds— (A) to cover any cost associated with individuals being trained or certified to conduct energy audits by— (i) the State; or (ii) a State-certified third party training program; and (B) subject to paragraph (2), to pay the wages of a trainee during the period in which the trainee receives training and certification. (2) Limitation Not more than 10 percent of grant funds provided under subsection (b) to an eligible State may be used for the purpose described in paragraph (1)(B). (f) Consultation In carrying out this section, the Secretary shall consult with the Secretary of Labor. (g) Authorization of appropriations There is authorized to be appropriated to carry out this section $8,000,000 for each of fiscal years 2022 through 2026.