1-1                                   AN ACT
 1-2     relating to energy efficiency programs developed by the energy
 1-3     office.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 2305, Government Code, is amended by
 1-6     adding Subchapter F to read as follows:
 1-7             SUBCHAPTER F.  TEXAS ENERGY ASSISTANCE LOAN PROGRAM
 1-8           Sec. 2305.101. DEFINITIONS.  In this subchapter:
 1-9                 (1)  "Cost-effective" means, with respect to an energy
1-10     efficiency improvement to residential housing or a piece of
1-11     agricultural equipment, an improvement in which the total cost of
1-12     the improvement, including any maintenance and repair expenses, is
1-13     less than the value of energy saved over the useful life of the
1-14     improvement.
1-15                 (2)  "Energy efficiency improvement" means:
1-16                       (A)  a durable and serviceable modification to
1-17     the design of a structure or piece of agricultural equipment that
1-18     results in a measurable decrease in energy consumption by the
1-19     structure or piece of equipment; or
1-20                       (B)  other energy conservation measures that may
1-21     be established by the energy office by rule.
1-22                 (3)  "Energy efficiency improvement loan" means a loan
1-23     that provides financing incentives for a person who uses the loan
1-24     to make an energy efficiency improvement to an existing structure
 2-1     or piece of agricultural equipment.
 2-2                 (4)  "Energy efficiency mortgage" means a mortgage that
 2-3     provides financing incentives:
 2-4                       (A)  for the purchase of energy-efficient
 2-5     residential housing; or
 2-6                       (B)  for energy efficiency improvements to
 2-7     existing residential housing by incorporating the cost of the
 2-8     improvements into the mortgage.
 2-9                 (5)  "Program" means the Texas Energy Assistance Loan
2-10     Program.
2-11                 (6)  "Residential housing" means a structure on a
2-12     residential property with one or more dwelling units.
2-13           Sec. 2305.102.  TEXAS ENERGY ASSISTANCE LOAN PROGRAM.  (a)
2-14     The energy office shall implement and maintain the Texas Energy
2-15     Assistance Loan Program.
2-16           (b)  Under the program, the energy office shall:
2-17                 (1)  coordinate the delivery and marketing of mortgage
2-18     incentives to purchase energy-efficient residential housing and to
2-19     improve the energy efficiency of existing residential housing;
2-20                 (2)  provide training and technical assistance for:
2-21                       (A)  persons conducting energy efficiency
2-22     ratings; and
2-23                       (B)  the energy-efficient construction, design,
2-24     and remodeling of residential housing;
2-25                 (3)  provide educational workshops or seminars on the
2-26     benefits of the program for:
2-27                       (A)  stakeholders in the program;
 3-1                       (B)  consumers of residential housing; and
 3-2                       (C)  consumers of agricultural equipment;
 3-3                 (4)  develop and purchase assessment tools, including
 3-4     software and monitoring equipment;
 3-5                 (5)  develop a database to track energy efficiency
 3-6     improvements in the state;
 3-7                 (6)  provide follow-up evaluation of homeowner
 3-8     responsiveness to, understanding of, and satisfaction with energy
 3-9     efficiency improvements;
3-10                 (7)  conduct market penetration studies; and
3-11                 (8)  implement:
3-12                       (A)  projects as required by this subchapter; and
3-13                       (B)  other initiatives that the energy office may
3-14     develop to promote energy-efficient residential housing.
3-15           (c)  The energy office shall establish a system for
3-16     monitoring and evaluating the program.
3-17           (d)  The energy office shall consult with other appropriate
3-18     state agencies to ensure coordination and avoid duplication of
3-19     activities authorized under this subchapter.
3-20           (e)  The energy office may adopt rules necessary to implement
3-21     this subchapter.
3-22           Sec. 2305.103.  FUNDS.  (a)  The energy office shall fund
3-23     projects and initiatives under this subchapter from funds available
3-24     under this chapter.
3-25           (b)  In addition to the use of funds available under this
3-26     chapter, the energy office shall maximize procurement of funds from
3-27     alternative sources, including:
 4-1                 (1)  program grants available through federal agencies;
 4-2                 (2)  federal legislative appropriations available to
 4-3     state agency programs that promote energy efficiency in residential
 4-4     housing;
 4-5                 (3)  financial incentives provided through other state
 4-6     agencies; and
 4-7                 (4)  financial incentives provided by private and
 4-8     nonprofit organizations and agencies.
 4-9           Sec. 2305.104.  VOLUNTARY PARTICIPATION.  The energy office
4-10     shall promote voluntary participation in the program from:
4-11                 (1)  private lenders;
4-12                 (2)  builders and residential contractors;
4-13                 (3)  persons who rebuild, redevelop, repair, retrofit,
4-14     or renovate structures to restore the structures' usefulness as
4-15     residential housing;
4-16                 (4)  persons who rebuild, redevelop, repair, retrofit,
4-17     or renovate agricultural equipment;
4-18                 (5)  consumers of residential housing;
4-19                 (6)  owners of single-family and multifamily
4-20     residential housing;
4-21                 (7)  other participants in the residential housing
4-22     industry; and
4-23                 (8)  owners of agricultural equipment.
4-24           Sec. 2305.105.  VOLUNTARY PARTICIPATION GUIDELINES.  (a)  The
4-25     energy office shall annually, by rule, issue voluntary
4-26     participation guidelines for energy-efficient residential
4-27     construction that may be used by state and local governments,
 5-1     utilities, builders, real estate agents, lenders, agencies in
 5-2     mortgage markets, and other persons as determined by the energy
 5-3     office, to enable and encourage the assignment of uniform energy
 5-4     efficiency ratings to residential housing and agricultural
 5-5     equipment.
 5-6           (b)  The voluntary participation guidelines issued under
 5-7     Subsection (a) must:
 5-8                 (1)  establish baseline standards that are consistent
 5-9     with the International Energy Conservation Code for residential
5-10     buildings;
5-11                 (2)  use a scaled rating to determine the energy
5-12     efficiency rating achieved by making energy efficiency
5-13     improvements;
5-14                 (3)  establish protocols and procedures for:
5-15                       (A)  certification of the technical accuracy of
5-16     energy efficiency rating tools used to determine the energy
5-17     efficiency of residential housing;
5-18                       (B)  training of personnel conducting energy
5-19     efficiency ratings;
5-20                       (C)  data collection and reporting;
5-21                       (D)  quality control; and
5-22                       (E)  monitoring and evaluation;
5-23                 (4)  encourage consistency with the programs of federal
5-24     or other public departments and agencies, as well as private
5-25     organizations that sponsor energy efficiency mortgages and promote
5-26     energy efficiency in residential housing;
5-27                 (5)  set up a structure for the rating system that
 6-1     addresses local climate conditions and construction practices,
 6-2     solar energy collected on-site, and similar conditions that vary
 6-3     across the geographic regions of the state; and
 6-4                 (6)  establish procedures to ensure that residential
 6-5     buildings can receive an energy efficiency rating at the time of
 6-6     sale and that the rating is communicated to potential buyers.
 6-7           Sec. 2305.106.  ADVISORY TASK FORCE.  In developing the
 6-8     guidelines and procedures for the program, the energy office shall
 6-9     consult with an advisory task force composed of state and local
6-10     agencies involved in residential housing programs, builders,
6-11     building code organizations, energy efficiency organizations,
6-12     utilities, real estate agents, lenders, agencies in mortgage
6-13     markets, and representatives from any other appropriate industries
6-14     or other interested members of the public, as determined by the
6-15     energy office.
6-16           Sec. 2305.107.  HOMEBUYER MORTGAGE PROJECT.  The energy
6-17     office shall develop and implement a project design for delivering
6-18     energy efficiency mortgage loans to consumers who purchase
6-19     energy-efficient residential housing. The design must:
6-20                 (1)  establish procedures for the certification of the
6-21     energy efficiency of a residential structure, using the guidelines
6-22     established under Section 2305.105, for a person considering the
6-23     purchase of the structure with an energy efficiency mortgage;
6-24                 (2)  identify a pool of lenders to originate the loans;
6-25                 (3)  identify the appropriate secondary market where
6-26     the energy efficiency mortgage can be transferred or sold, if
6-27     necessary, to buy down the rate of the loan;
 7-1                 (4)  coordinate loan counseling services; and
 7-2                 (5)  specify a mechanism for quality control.
 7-3           Sec. 2305.108.  ENERGY EFFICIENCY IMPROVEMENT PROJECT.  The
 7-4     energy office shall develop and implement a project design for
 7-5     delivering energy efficiency improvement loans to property owners
 7-6     who make cost-effective energy efficiency improvements to existing
 7-7     residential housing.  The design must:
 7-8                 (1)  identify a pool of lenders to originate the loans;
 7-9                 (2)  require a preloan audit to identify cost-effective
7-10     improvements that will improve the energy efficiency of the
7-11     structure;
7-12                 (3)  identify a pool of auditors trained to perform
7-13     energy efficiency inspections of residential housing;
7-14                 (4)  coordinate the loan application process with
7-15     auditor and contractor referral services;
7-16                 (5)  specify that the auditor shall provide the
7-17     property owner with a report before an energy efficiency
7-18     improvement is made, including:
7-19                       (A)  baseline building standards for the
7-20     structure before the energy efficiency improvements;
7-21                       (B)  an itemized list of recommendations for
7-22     cost-effective improvements that would improve the energy
7-23     efficiency of the structure;
7-24                       (C)  the energy savings resulting from each of
7-25     the improvements;
7-26                       (D)  the environmental benefits of the
7-27     improvements;
 8-1                       (E)  the costs of the recommended improvements;
 8-2     and
 8-3                       (F)  a rating reflecting the current energy
 8-4     efficiency of the structure and a rating reflecting what the energy
 8-5     efficiency rating would be with some or all of the recommended
 8-6     improvements;
 8-7                 (6)  coordinate loan counseling services; and
 8-8                 (7)  specify a mechanism for quality control.
 8-9           Sec. 2305.109.  AGRICULTURAL EQUIPMENT MORTGAGE PROJECT.  The
8-10     energy office shall develop and implement a project design for
8-11     delivering energy efficiency improvement loans to owners of
8-12     agricultural equipment who make energy efficiency improvements to
8-13     the equipment.  The design must:
8-14                 (1)  identify a pool of lenders to originate the loans;
8-15                 (2)  require a preloan audit to identify cost-effective
8-16     improvements that will improve the energy efficiency of the
8-17     agricultural equipment;
8-18                 (3)  identify a pool of auditors trained to perform
8-19     energy efficiency inspections of agricultural equipment;
8-20                 (4)  coordinate the loan application process with
8-21     auditor and contractor referral services;
8-22                 (5)  specify that the auditor shall provide the owner
8-23     of the agricultural equipment with a report before an energy
8-24     efficiency improvement is made, including:
8-25                       (A)  baseline performance standards for the
8-26     agricultural equipment before the energy efficiency improvements;
8-27                       (B)  an itemized list of recommendations for
 9-1     cost-effective improvements that would improve the energy
 9-2     efficiency of the agricultural  equipment;
 9-3                       (C)  the energy savings resulting from each of
 9-4     the improvements;
 9-5                       (D)  the environmental benefits of the
 9-6     improvements;
 9-7                       (E)  the costs of the recommended improvements;
 9-8     and
 9-9                       (F)  a rating reflecting the current energy
9-10     efficiency of the agricultural equipment and a rating reflecting
9-11     what the energy efficiency rating would be with some or all of the
9-12     recommended improvements;
9-13                 (6)  coordinate loan counseling services; and
9-14                 (7)  specify a mechanism for quality control.
9-15           Sec. 2305.110.  HOME RATING AND MORTGAGE MARKETING PROJECT.
9-16     The energy office shall develop and implement a project design for
9-17     marketing the home rating system developed under Section 2305.105
9-18     and the delivery of energy efficiency mortgages and energy
9-19     efficiency improvement loans.  The design must specify how the
9-20     comptroller of public accounts will:
9-21                 (1)  coordinate with the United States Environmental
9-22     Protection Agency to market the loans;
9-23                 (2)  target consumers, contractors, energy auditors,
9-24     lenders, realtors, and other stakeholders; and
9-25                 (3)  establish partnerships with lenders, realtors,
9-26     contractors, energy auditors, and other program partners who will
9-27     benefit from a loan program referral service to help market the
 10-1    program.
 10-2          SECTION 2.  (a)  This Act takes effect September 1, 2001.
 10-3          (b)  The state energy conservation office of the comptroller
 10-4    of public accounts shall deliver the first set of guidelines
 10-5    required by Section 2305.105, Government Code, as added by this
 10-6    Act, not later than January 1, 2002.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 2839 was passed by the House on May
         5, 2001, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 2839 was passed by the Senate on May
         21, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor