1-1 By: Dukes (Senate Sponsor - Carona) H.B. No. 2839 1-2 (In the Senate - Received from the House May 7, 2001; 1-3 May 7, 2001, read first time and referred to Committee on State 1-4 Affairs; May 11, 2001, reported favorably by the following vote: 1-5 Yeas 6, Nays 0; May 11, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to energy efficiency programs developed by the energy 1-9 office. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Chapter 2305, Government Code, is amended by 1-12 adding Subchapter F to read as follows: 1-13 SUBCHAPTER F. TEXAS ENERGY ASSISTANCE LOAN PROGRAM 1-14 Sec. 2305.101. DEFINITIONS. In this subchapter: 1-15 (1) "Cost-effective" means, with respect to an energy 1-16 efficiency improvement to residential housing or a piece of 1-17 agricultural equipment, an improvement in which the total cost of 1-18 the improvement, including any maintenance and repair expenses, is 1-19 less than the value of energy saved over the useful life of the 1-20 improvement. 1-21 (2) "Energy efficiency improvement" means: 1-22 (A) a durable and serviceable modification to 1-23 the design of a structure or piece of agricultural equipment that 1-24 results in a measurable decrease in energy consumption by the 1-25 structure or piece of equipment; or 1-26 (B) other energy conservation measures that may 1-27 be established by the energy office by rule. 1-28 (3) "Energy efficiency improvement loan" means a loan 1-29 that provides financing incentives for a person who uses the loan 1-30 to make an energy efficiency improvement to an existing structure 1-31 or piece of agricultural equipment. 1-32 (4) "Energy efficiency mortgage" means a mortgage that 1-33 provides financing incentives: 1-34 (A) for the purchase of energy-efficient 1-35 residential housing; or 1-36 (B) for energy efficiency improvements to 1-37 existing residential housing by incorporating the cost of the 1-38 improvements into the mortgage. 1-39 (5) "Program" means the Texas Energy Assistance Loan 1-40 Program. 1-41 (6) "Residential housing" means a structure on a 1-42 residential property with one or more dwelling units. 1-43 Sec. 2305.102. TEXAS ENERGY ASSISTANCE LOAN PROGRAM. (a) 1-44 The energy office shall implement and maintain the Texas Energy 1-45 Assistance Loan Program. 1-46 (b) Under the program, the energy office shall: 1-47 (1) coordinate the delivery and marketing of mortgage 1-48 incentives to purchase energy-efficient residential housing and to 1-49 improve the energy efficiency of existing residential housing; 1-50 (2) provide training and technical assistance for: 1-51 (A) persons conducting energy efficiency 1-52 ratings; and 1-53 (B) the energy-efficient construction, design, 1-54 and remodeling of residential housing; 1-55 (3) provide educational workshops or seminars on the 1-56 benefits of the program for: 1-57 (A) stakeholders in the program; 1-58 (B) consumers of residential housing; and 1-59 (C) consumers of agricultural equipment; 1-60 (4) develop and purchase assessment tools, including 1-61 software and monitoring equipment; 1-62 (5) develop a database to track energy efficiency 1-63 improvements in the state; 1-64 (6) provide follow-up evaluation of homeowner 2-1 responsiveness to, understanding of, and satisfaction with energy 2-2 efficiency improvements; 2-3 (7) conduct market penetration studies; and 2-4 (8) implement: 2-5 (A) projects as required by this subchapter; and 2-6 (B) other initiatives that the energy office may 2-7 develop to promote energy-efficient residential housing. 2-8 (c) The energy office shall establish a system for 2-9 monitoring and evaluating the program. 2-10 (d) The energy office shall consult with other appropriate 2-11 state agencies to ensure coordination and avoid duplication of 2-12 activities authorized under this subchapter. 2-13 (e) The energy office may adopt rules necessary to implement 2-14 this subchapter. 2-15 Sec. 2305.103. FUNDS. (a) The energy office shall fund 2-16 projects and initiatives under this subchapter from funds available 2-17 under this chapter. 2-18 (b) In addition to the use of funds available under this 2-19 chapter, the energy office shall maximize procurement of funds from 2-20 alternative sources, including: 2-21 (1) program grants available through federal agencies; 2-22 (2) federal legislative appropriations available to 2-23 state agency programs that promote energy efficiency in residential 2-24 housing; 2-25 (3) financial incentives provided through other state 2-26 agencies; and 2-27 (4) financial incentives provided by private and 2-28 nonprofit organizations and agencies. 2-29 Sec. 2305.104. VOLUNTARY PARTICIPATION. The energy office 2-30 shall promote voluntary participation in the program from: 2-31 (1) private lenders; 2-32 (2) builders and residential contractors; 2-33 (3) persons who rebuild, redevelop, repair, retrofit, 2-34 or renovate structures to restore the structures' usefulness as 2-35 residential housing; 2-36 (4) persons who rebuild, redevelop, repair, retrofit, 2-37 or renovate agricultural equipment; 2-38 (5) consumers of residential housing; 2-39 (6) owners of single-family and multifamily 2-40 residential housing; 2-41 (7) other participants in the residential housing 2-42 industry; and 2-43 (8) owners of agricultural equipment. 2-44 Sec. 2305.105. VOLUNTARY PARTICIPATION GUIDELINES. (a) The 2-45 energy office shall annually, by rule, issue voluntary 2-46 participation guidelines for energy-efficient residential 2-47 construction that may be used by state and local governments, 2-48 utilities, builders, real estate agents, lenders, agencies in 2-49 mortgage markets, and other persons as determined by the energy 2-50 office, to enable and encourage the assignment of uniform energy 2-51 efficiency ratings to residential housing and agricultural 2-52 equipment. 2-53 (b) The voluntary participation guidelines issued under 2-54 Subsection (a) must: 2-55 (1) establish baseline standards that are consistent 2-56 with the International Energy Conservation Code for residential 2-57 buildings; 2-58 (2) use a scaled rating to determine the energy 2-59 efficiency rating achieved by making energy efficiency 2-60 improvements; 2-61 (3) establish protocols and procedures for: 2-62 (A) certification of the technical accuracy of 2-63 energy efficiency rating tools used to determine the energy 2-64 efficiency of residential housing; 2-65 (B) training of personnel conducting energy 2-66 efficiency ratings; 2-67 (C) data collection and reporting; 2-68 (D) quality control; and 2-69 (E) monitoring and evaluation; 3-1 (4) encourage consistency with the programs of federal 3-2 or other public departments and agencies, as well as private 3-3 organizations that sponsor energy efficiency mortgages and promote 3-4 energy efficiency in residential housing; 3-5 (5) set up a structure for the rating system that 3-6 addresses local climate conditions and construction practices, 3-7 solar energy collected on-site, and similar conditions that vary 3-8 across the geographic regions of the state; and 3-9 (6) establish procedures to ensure that residential 3-10 buildings can receive an energy efficiency rating at the time of 3-11 sale and that the rating is communicated to potential buyers. 3-12 Sec. 2305.106. ADVISORY TASK FORCE. In developing the 3-13 guidelines and procedures for the program, the energy office shall 3-14 consult with an advisory task force composed of state and local 3-15 agencies involved in residential housing programs, builders, 3-16 building code organizations, energy efficiency organizations, 3-17 utilities, real estate agents, lenders, agencies in mortgage 3-18 markets, and representatives from any other appropriate industries 3-19 or other interested members of the public, as determined by the 3-20 energy office. 3-21 Sec. 2305.107. HOMEBUYER MORTGAGE PROJECT. The energy 3-22 office shall develop and implement a project design for delivering 3-23 energy efficiency mortgage loans to consumers who purchase 3-24 energy-efficient residential housing. The design must: 3-25 (1) establish procedures for the certification of the 3-26 energy efficiency of a residential structure, using the guidelines 3-27 established under Section 2305.105, for a person considering the 3-28 purchase of the structure with an energy efficiency mortgage; 3-29 (2) identify a pool of lenders to originate the loans; 3-30 (3) identify the appropriate secondary market where 3-31 the energy efficiency mortgage can be transferred or sold, if 3-32 necessary, to buy down the rate of the loan; 3-33 (4) coordinate loan counseling services; and 3-34 (5) specify a mechanism for quality control. 3-35 Sec. 2305.108. ENERGY EFFICIENCY IMPROVEMENT PROJECT. The 3-36 energy office shall develop and implement a project design for 3-37 delivering energy efficiency improvement loans to property owners 3-38 who make cost-effective energy efficiency improvements to existing 3-39 residential housing. The design must: 3-40 (1) identify a pool of lenders to originate the loans; 3-41 (2) require a preloan audit to identify cost-effective 3-42 improvements that will improve the energy efficiency of the 3-43 structure; 3-44 (3) identify a pool of auditors trained to perform 3-45 energy efficiency inspections of residential housing; 3-46 (4) coordinate the loan application process with 3-47 auditor and contractor referral services; 3-48 (5) specify that the auditor shall provide the 3-49 property owner with a report before an energy efficiency 3-50 improvement is made, including: 3-51 (A) baseline building standards for the 3-52 structure before the energy efficiency improvements; 3-53 (B) an itemized list of recommendations for 3-54 cost-effective improvements that would improve the energy 3-55 efficiency of the structure; 3-56 (C) the energy savings resulting from each of 3-57 the improvements; 3-58 (D) the environmental benefits of the 3-59 improvements; 3-60 (E) the costs of the recommended improvements; 3-61 and 3-62 (F) a rating reflecting the current energy 3-63 efficiency of the structure and a rating reflecting what the energy 3-64 efficiency rating would be with some or all of the recommended 3-65 improvements; 3-66 (6) coordinate loan counseling services; and 3-67 (7) specify a mechanism for quality control. 3-68 Sec. 2305.109. AGRICULTURAL EQUIPMENT MORTGAGE PROJECT. The 3-69 energy office shall develop and implement a project design for 4-1 delivering energy efficiency improvement loans to owners of 4-2 agricultural equipment who make energy efficiency improvements to 4-3 the equipment. The design must: 4-4 (1) identify a pool of lenders to originate the loans; 4-5 (2) require a preloan audit to identify cost-effective 4-6 improvements that will improve the energy efficiency of the 4-7 agricultural equipment; 4-8 (3) identify a pool of auditors trained to perform 4-9 energy efficiency inspections of agricultural equipment; 4-10 (4) coordinate the loan application process with 4-11 auditor and contractor referral services; 4-12 (5) specify that the auditor shall provide the owner 4-13 of the agricultural equipment with a report before an energy 4-14 efficiency improvement is made, including: 4-15 (A) baseline performance standards for the 4-16 agricultural equipment before the energy efficiency improvements; 4-17 (B) an itemized list of recommendations for 4-18 cost-effective improvements that would improve the energy 4-19 efficiency of the agricultural equipment; 4-20 (C) the energy savings resulting from each of 4-21 the improvements; 4-22 (D) the environmental benefits of the 4-23 improvements; 4-24 (E) the costs of the recommended improvements; 4-25 and 4-26 (F) a rating reflecting the current energy 4-27 efficiency of the agricultural equipment and a rating reflecting 4-28 what the energy efficiency rating would be with some or all of the 4-29 recommended improvements; 4-30 (6) coordinate loan counseling services; and 4-31 (7) specify a mechanism for quality control. 4-32 Sec. 2305.110. HOME RATING AND MORTGAGE MARKETING PROJECT. 4-33 The energy office shall develop and implement a project design for 4-34 marketing the home rating system developed under Section 2305.105 4-35 and the delivery of energy efficiency mortgages and energy 4-36 efficiency improvement loans. The design must specify how the 4-37 comptroller of public accounts will: 4-38 (1) coordinate with the United States Environmental 4-39 Protection Agency to market the loans; 4-40 (2) target consumers, contractors, energy auditors, 4-41 lenders, realtors, and other stakeholders; and 4-42 (3) establish partnerships with lenders, realtors, 4-43 contractors, energy auditors, and other program partners who will 4-44 benefit from a loan program referral service to help market the 4-45 program. 4-46 SECTION 2. (a) This Act takes effect September 1, 2001. 4-47 (b) The state energy conservation office of the comptroller 4-48 of public accounts shall deliver the first set of guidelines 4-49 required by Section 2305.105, Government Code, as added by this 4-50 Act, not later than January 1, 2002. 4-51 * * * * *