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                                  * * * * *