TITLE I--ENERGY EFFICIENCY

Subtitle A--Buildings

SEC. 101. BUILDING ENERGY EFFICIENCY STANDARDS.

(a) IN GENERAL- Title III of the Energy Conservation and Production Act (42 U.S.C.
6831 et seq.) is amended--
(1) in section 303--
(A) by striking paragraph (9);
(B) by redesignating paragraphs (10), (11), (12), and (13) as paragraphs
(9), (10), (11), and (12), respectively; and
(C) by adding at the end the following new paragraphs--
`(13) The term `Federal building energy standards' means energy consumption
objectives to be met without specification of the methods, materials, or equipment
to be employed in achieving those objectives, but including statements of the
requirements, criteria, and evaluation methods to be used, and any necessary
commentary.
`(14) The term `voluntary building energy code' means a building energy code
developed and updated through a consensus process among interested persons,
such as that used by the Council of American Building Officials; the American
Society of Heating, Refrigerating, and Air-Conditioning Engineers; or other
appropriate organizations.
`(15) The term `CABO' means the Council of American Building Officials.
`(16) The term `ASHRAE' means the American Society of Heating, Refrigerating,
and Air-Conditioning Engineers.'; and
(2) by striking sections 304, 306, 308, 309, 310, and 311 and inserting the
following:

`SEC. 304. UPDATING STATE BUILDING ENERGY EFFICIENCY CODES.

`(a) CONSIDERATION AND DETERMINATION RESPECTING RESIDENTIAL

BUILDING ENERGY CODES- (1) Not later than 2 years after the date of the enactment
of the Energy Policy Act of 1992, each State shall certify to the Secretary that it has
reviewed the provisions of its residential building code regarding energy efficiency and
made a determination as to whether it is appropriate for such State to revise such
residential building code provisions to meet or exceed CABO Model Energy Code, 1992.
`(2) The determination referred to in paragraph (1) shall be--
`(A) made after public notice and hearing;
`(B) in writing;
`(C) based upon findings included in such determination and upon the evidence
presented at the hearing; and
`(D) available to the public.
`(3) Each State may, to the extent consistent with otherwise applicable State law, revise
the provisions of its residential building code regarding energy efficiency to meet or
exceed CABO Model Energy Code, 1992, or may decline to make such revisions.
`(4) If a State makes a determination under paragraph (1) that it is not appropriate for
such State to revise its residential building code, such State shall submit to the Secretary,
in writing, the reasons for such determination, and such statement shall be available to the
public.
`(5)(A) Whenever CABO Model Energy Code, 1992, (or any successor of such code) is
revised, the Secretary shall, not later than 12 months after such revision, determine
whether such revision would improve energy efficiency in residential buildings. The
Secretary shall publish notice of such determination in the Federal Register.
`(B) If the Secretary makes an affirmative determination under subparagraph (A), each
State shall, not later than 2 years after the date of the publication of such determination,
certify that it has reviewed the provisions of its residential building code regarding
energy efficiency and made a determination as to whether it is appropriate for such State
to revise such residential building code provisions to meet or exceed the revised code for
which the Secretary made such determination.
`(C) Paragraphs (2), (3), and (4) shall apply to any determination made under
subparagraph (B).
`(b) CERTIFICATION OF COMMERCIAL BUILDING ENERGY CODE UPDATES-
(1) Not later than 2 years after the date of the enactment of the Energy Policy Act of
1992, each State shall certify to the Secretary that it has reviewed and updated the
provisions of its commercial building code regarding energy efficiency. Such
certification shall include a demonstration that such State's code provisions meet or
exceed the requirements of ASHRAE Standard 90.1-1989.
`(2)(A) Whenever the provisions of ASHRAE Standard 90.1-1989 (or any successor
standard) regarding energy efficiency in commercial buildings are revised, the Secretary
shall, not later than 12 months after the date of such revision, determine whether such
revision will improve energy efficiency in commercial buildings. The Secretary shall
publish a notice of such determination in the Federal Register.
`(B)(i) If the Secretary makes an affirmative determination under subparagraph (A), each
State shall, not later than 2 years after the date of the publication of such determination,
certify that it has reviewed and updated the provisions of its commercial building code
regarding energy efficiency in accordance with the revised standard for which such
determination was made. Such certification shall include a demonstration that the
provisions of such State's commercial building code regarding energy efficiency meet or
exceed such revised standard.
`(ii) If the Secretary makes a determination under subparagraph (A) that such revised
standard will not improve energy efficiency in commercial buildings, State commercial
building code provisions regarding energy efficiency shall meet or exceed ASHRAE
Standard 90.1-1989, or if such standard has been revised, the last revised standard for
which the Secretary has made an affirmative determination under subparagraph (A).
`(c) EXTENSIONS- The Secretary shall permit extensions of the deadlines for the
certification requirements under subsections (a) and (b) if a State can demonstrate that it
has made a good faith effort to comply with such requirements and that it has made
significant progress in doing so.
`(d) TECHNICAL ASSISTANCE- The Secretary shall provide technical assistance to
States to implement the requirements of this section, and to improve and implement State
 residential and commercial building energy efficiency codes or to otherwise promote the
design and construction of energy efficient buildings.
`(e) AVAILABILITY OF INCENTIVE FUNDING- (1) The Secretary shall provide
incentive funding to States to implement the requirements of this section, and to improve
and implement State residential and commercial building energy efficiency codes. In
determining whether, and in what amount, to provide incentive funding under this
subsection, the Secretary shall consider the actions proposed by the State to implement
the requirements of this section, to improve and implement residential and commercial
building energy efficiency codes, and to promote building energy efficiency through the
use of such codes.
`(2) There are authorized to be appropriated such sums as may be necessary to carry out
this subsection.

`SEC. 305. FEDERAL BUILDING ENERGY EFFICIENCY STANDARDS.

`(a)(1) IN GENERAL- Not later than 2 years after the date of the enactment of the
Energy Policy Act of 1992, the Secretary, after consulting with appropriate Federal
agencies, CABO, ASHRAE, the National Association of Home Builders, the Illuminating
Engineering Society, the American Institute of Architects, the National Conference of the
States on Building Codes and Standards, and other appropriate persons, shall establish,
by rule, Federal building energy standards that require in new Federal buildings those
energy efficiency measures that are technologically feasible and economically justified.
Such standards shall become effective no later than 1 year after such rule is issued.
`(2) The standards established under paragraph (1) shall--
`(A) contain energy saving and renewable energy specifications that meet or
exceed the energy saving and renewable energy specifications of CABO Model
Energy Code, 1992 (in the case of residential buildings) or ASHRAE Standard
90.1-1989 (in the case of commercial buildings);
`(B) to the extent practicable, use the same format as the appropriate voluntary
building energy code; and
`(C) consider, in consultation with the Environmental Protection Agency and
other Federal agencies, and where appropriate contain, measures with regard to
radon and other indoor air pollutants.
`(b) REPORT ON COMPARATIVE STANDARDS- The Secretary shall identify and
describe, in the report required under section 308, the basis for any substantive difference
between the Federal building energy standards established under this section (including
differences in treatment of energy efficiency and renewable energy) and the appropriate
voluntary building energy code.
`(c) PERIODIC REVIEW- The Secretary shall periodically, but not less than once every
5 years, review the Federal building energy standards established under this section and
shall, if significant energy savings would result, upgrade such standards to include all
new energy efficiency and renewable energy measures that are technologically feasible
and economically justified.
`(d) INTERIM STANDARDS- Interim energy performance standards for new Federal
buildings issued by the Secretary under this title as it existed before the date of the
 enactment of the Energy Policy Act of 1992 shall remain in effect until the standards
established under subsection (a) become effective.

`SEC. 306. FEDERAL COMPLIANCE.

`(a) PROCEDURES- (1) The head of each Federal agency shall adopt procedures
necessary to assure that new Federal buildings meet or exceed the Federal building
energy standards established under section 305.
`(2) The Federal building energy standards established under section 305 shall apply to
new buildings under the jurisdiction of the Architect of the Capitol. The Architect shall
adopt procedures necessary to assure that such buildings meet or exceed such standards.
`(b) CONSTRUCTION OF NEW BUILDINGS- The head of a Federal agency may
expend Federal funds for the construction of a new Federal building only if the building
meets or exceeds the appropriate Federal building energy standards established under
section 305.

`SEC. 307. SUPPORT FOR VOLUNTARY BUILDING ENERGY CODES.

`(a) IN GENERAL- Not later than 1 year after the date of the enactment of the Energy
Policy Act of 1992, the Secretary, after consulting with the Secretary of Housing and
Urban Development, the Secretary of Veterans Affairs, other appropriate Federal
agencies, CABO, ASHRAE, the National Conference of States on Building Codes and
Standards, and any other appropriate building codes and standards organization, shall
support the upgrading of voluntary building energy codes for new residential and
commercial buildings. Such support shall include--
`(1) a compilation of data and other information regarding building energy
efficiency standards and codes in the possession of the Federal Government, State
and local governments, and industry organizations;
`(2) assistance in improving the technical basis for such standards and codes;
`(3) assistance in determining the cost-effectiveness and the technical feasibility
of the energy efficiency measures included in such standards and codes; and
`(4) assistance in identifying appropriate measures with regard to radon and other
indoor air pollutants.
`(b) REVIEW- The Secretary shall periodically review the technical and economic basis
of voluntary building energy codes and, based upon ongoing research activities--
`(1) recommend amendments to such codes including measures with regard to
radon and other indoor air pollutants;
`(2) seek adoption of all technologically feasible and economically justified
energy efficiency measures; and
`(3) otherwise participate in any industry process for review and modification of
such codes.

`SEC. 308. REPORTS.

`The Secretary, in consultation with the Secretary of Housing and Urban Development,
the Secretary of Veterans Affairs, and other appropriate Federal agencies, shall report
 annually to the Congress on activities conducted pursuant to this title. Such report shall
include--
`(1) recommendations made under section 307(b) regarding the prevailing
voluntary building energy codes;
`(2) a State-by-State summary of actions taken under this title; and
`(3) recommendations to the Congress with respect to opportunities to further
promote building energy efficiency and otherwise carry out the purposes of this
title.'.
(b) CONFORMING AMENDMENT- The table of contents of such Act is amended by
striking the items relating to sections 304, 306, 308, 309, 310 and 311, and inserting in
lieu thereof the following--
`Sec. 304. Updating State building energy efficiency codes.
`Sec. 305. Federal building energy efficiency standards.
`Sec. 306. Federal compliance.
`Sec. 307. Support for voluntary building energy codes.
`Sec. 308. Reports.'.

(c) FEDERAL MORTGAGE REQUIREMENTS-

(1) AMENDMENT TO CRANSTON-GONZALEZ NATIONAL
AFFORDABLE HOUSING ACT- Section 109 of the Cranston-Gonzalez
National Affordable Housing Act (42 U.S.C. 12709) is amended to read as
follows:

`SEC. 109. ENERGY EFFICIENCY STANDARDS.

`(a) ESTABLISHMENT-
`(1) IN GENERAL- The Secretary of Housing and Urban Development and the
Secretary of Agriculture shall, not later than 1 year after the date of the enactment
of the Energy Policy Act of 1992, jointly establish, by rule, energy efficiency
standards for--
`(A) new construction of public and assisted housing and single family
and multifamily residential housing (other than manufactured homes)
subject to mortgages insured under the National Housing Act; and
`(B) new construction of single family housing (other than manufactured
homes) subject to mortgages insured, guaranteed, or made by the
Secretary of Agriculture under title V of the Housing Act of 1949.
`(2) CONTENTS- Such standards shall meet or exceed the requirements of the
Council of American Building Officials Model Energy Code, 1992 (hereafter in
this section referred to as `CABO Model Energy Code, 1992'), or, in the case of
multifamily high rises, the requirements of the American Society of Heating,
Refrigerating, and Air-Conditioning Engineers Standard 90.1-1989 (hereafter in
this section referred to as `ASHRAE Standard 90.1-1989'), and shall be cost-
effective with respect to construction and operating costs on a life-cycle cost
basis. In developing such standards, the Secretaries shall consult with an advisory
 task force composed of homebuilders, national, State, and local housing agencies
(including public housing agencies), energy agencies, building code organizations
and agencies, energy efficiency organizations, utility organizations, low-income
housing organizations, and other parties designated by the Secretaries.
`(b) MODEL ENERGY CODE- If the Secretaries have not, within 1 year after the date of
the enactment of the Energy Policy Act of 1992, established energy efficiency standards
under subsection (a), all new construction of housing specified in such subsection shall
meet the requirements of CABO Model Energy Code, 1992, or, in the case of multifamily
high rises, the requirements of ASHRAE Standard 90.1-1989.
`(c) REVISIONS OF MODEL ENERGY CODE- If the requirements of CABO Model
Energy Code, 1992, or, in the case of multifamily high rises, ASHRAE Standard 90.1-
1989, are revised at any time, the Secretaries shall, not later than 1 year after such
revision, amend the standards established under subsection (a) to meet or exceed the
requirements of such revised code or standard unless the Secretaries determine that
compliance with such revised code or standard would not result in a significant increase
in energy efficiency or would not be technologically feasible or economically justified.'.
(2) AMENDMENT TO TITLE 38, UNITED STATES CODE- Section 3704 of
title 38, United States Code, is amended by adding at the end thereof the
following new subsection:
`(g) A loan for the purchase or construction of new residential property, the construction
of which began after the energy efficiency standards under section 109 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 12709), as amended by section
101(c) of the Energy Policy Act of 1992, take effect, may not be financed through the
assistance of this chapter unless the new residential property is constructed in compliance
with such standards.'.

SEC. 102. RESIDENTIAL ENERGY EFFICIENCY RATINGS.

(a) RATINGS- Title II of the National Energy Conservation Policy Act (42 U.S.C. 8211
et seq.) is amended by adding at the end the following new part:

`PART 6--RESIDENTIAL ENERGY EFFICIENCY RATING

GUIDELINES
`SEC. 271. VOLUNTARY RATING GUIDELINES.

`(a) IN GENERAL- Not later than 18 months after the date of the enactment of the
Energy Policy Act of 1992, the Secretary, in consultation with the Secretary of Housing
and Urban Development, the Secretary of Veterans Affairs, representatives of existing
home energy rating programs, and other appropriate persons, shall, by rule, issue
voluntary guidelines that may be used by State and local governments, utilities, builders,
real estate agents, lenders, agencies in mortgage markets, and others, to enable and
encourage the assignment of energy efficiency ratings to residential buildings.
`(b) CONTENTS OF GUIDELINES- The voluntary guidelines issued under subsection
(a) shall--
 `(1) encourage uniformity with regard to systems for rating the annual energy
efficiency of residential buildings;
`(2) establish protocols and procedures for--
`(A) certification of the technical accuracy of building energy analysis
tools used to determine energy efficiency ratings;
`(B) training of personnel conducting energy efficiency ratings;
`(C) data collection and reporting;
`(D) quality control; and
`(E) monitoring and evaluation;
`(3) encourage consistency with, and support for, the uniform plan for Federal
energy efficient mortgages, including that developed under section 946 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12712 note) and
pursuant to sections 105 and 106 of the Energy Policy Act of 1992;
`(4) provide that rating systems take into account local climate conditions and
construction practices, solar energy collected on-site, and the benefits of peak
load shifting construction practices, and not discriminate among fuel types; and
`(5) establish procedures to ensure that residential buildings can receive an energy
efficiency rating at the time of sale and that such rating is communicated to
potential buyers.

`SEC. 272. TECHNICAL ASSISTANCE.

`Not later than 2 years after the date of the enactment of the Energy Policy Act of 1992,
the Secretary shall establish a program to provide technical assistance to State and local
organizations to encourage the adoption of and use of residential energy efficiency rating
systems consistent with the voluntary guidelines issued under section 271.

`SEC. 273. REPORT.

`Not later than 3 years after the date of the enactment of the Energy Policy Act of 1992,
the Secretary shall transmit to the President and the Congress a final report containing--
`(1) a description of actions taken by the Secretary and other Federal agencies to
implement this part;
`(2) a description of the action taken by States, local governments, and other
organizations to implement the voluntary guidelines issued under section 271 and
any problems encountered in implementing such guidelines; and
`(3) recommendations on the feasibility of requiring, as a prerequisite to receiving
federally assisted, guaranteed, or insured mortgages, the achievement of a
minimum energy efficiency rating.'.
(b) CONFORMING AMENDMENT- The table of contents for such Act is amended by
adding at the end of title II the following:

`PART 6--RESIDENTIAL ENERGY EFFICIENCY RATINGS

`Sec. 271. Voluntary rating guidelines.

`Sec. 272. Technical assistance.
 `Sec. 273. Report.'.
SEC. 103. ENERGY EFFICIENT LIGHTING AND BUILDING CENTERS.
(a) PURPOSE- The purpose of this section is to encourage energy efficiency in buildings
through the establishment of regional centers to promote energy efficient lighting, heating
and cooling, and building design.
(b) GRANTS FOR ESTABLISHMENT- Not later than 18 months after the date of the
enactment of this Act, the Secretary shall make grants to nonprofit institutions, or to
consortiums that may include nonprofit institutions, State and local governments,
universities, and utilities, to establish or enhance one regional building energy efficiency
center (hereafter in this section referred to as a `regional center') in each of the 10 regions
served by a Department of Energy regional support office.
(c) PERMITTED ACTIVITIES- Each regional center established under this section may-
-
(1) provide information, training, and technical assistance to building
professionals such as architects, designers, engineers, contractors, and building
code officials, on building energy efficiency methods and technologies, including
lighting, heating and cooling, and passive solar;
(2) operate an outreach program to inform such building professionals of the
benefits and opportunities of energy efficiency, and of the services of the center;
(3) provide displays demonstrating building energy efficiency methods and
technologies, such as lighting, windows, and heating and cooling equipment;
(4) coordinate its activities and programs with other institutions within the region,
such as State and local governments, utilities, and educational institutions, in
order to support their efforts to promote building energy efficiency;
(5) serve as a clearinghouse to ensure that information about new building energy
efficiency technologies, including case studies of successful applications, is
disseminated to end-users in the region;
(6) study the building energy needs of the region and make available region-
specific energy efficiency information to facilitate the adoption of cost-effective
energy efficiency improvements;
(7) assist educational institutions in establishing building energy efficiency
engineering and technical programs and curricula; and
(8) evaluate the performance of the center in promoting building energy
efficiency.
(d) APPLICATION- Any nonprofit institution or consortium interested in receiving a
grant under this section shall submit to the Secretary an application in such form and
containing such information as the Secretary may require. A lighting or building energy
center in existence on the date of the enactment of this section which is owned and
operated by a nonprofit institution or a consortium as described in subsection (b) shall be
eligible for a grant under this section.
(e) SELECTION CRITERIA- The Secretary shall select recipients of grants under this
section on the basis of the following criteria:
(1) The capability of the grant recipient to establish a board of directors for the
regional center composed of representatives from utilities, State and local
governments, building trade and professional organizations, manufacturers, and
nonprofit energy and environmental organizations.
 (2) The demonstrated or potential resources available to the grant recipient for
carrying out this subsection.
(3) The demonstrated or potential ability of the grant recipient to promote
building energy efficiency by carrying out the activities specified in subsection
(c).
(4) The activities which the grant recipient proposes to carry out under the grant.
(f) REQUIREMENT OF MATCHING FUNDS-
(1) FEDERAL SHARE- The Federal share of a grant under this section shall be
no more than 50 percent of the costs of establishing, and no more than 25 percent
of the cost of operating the regional center.
(2) NON-FEDERAL CONTRIBUTIONS- No grant may be made under this
section in any fiscal year unless the recipient of such grant enters into such
agreements with the Secretary as the Secretary may require to ensure that such
recipient will provide the necessary non-Federal contributions. Such non-Federal
contributions may be provided by utilities, State and local governments, nonprofit
institutions, foundations, corporations, and other non-Federal entities.
(g) TASK FORCE- The Secretary shall establish a task force to--
(1) advise the Secretary on activities to be carried out by grant recipients;
(2) review and evaluate programs carried out by grant recipients; and
(3) make recommendations regarding the building energy efficiency center grant
program.
(h) MEMBERSHIP TERMS AND ADMINISTRATION OF TASK FORCE-
(1) IN GENERAL- The task force shall be composed of approximately 20
members, appointed by the Secretary, with expertise in the area of building
energy efficiency, including representatives from--
(A) State or local energy offices;
(B) utilities;
(C) building construction trade or professional associations;
(D) architecture, engineering or professional associations;
(E) building component or equipment manufacturers;
(F) from national laboratories;
(G) building code officials or professional associations; and
(H) nonprofit energy or environmental organizations.
(2) GEOGRAPHIC REPRESENTATION- The Secretary shall ensure that there is
broad geographical representation among task force members.
(3) TERMS- Members shall be appointed for a term of 3 years. A vacancy in the
task force shall be filled in the manner in which the original appointment was
made.
(4) PAY- Members shall serve without pay. Each member shall receive travel
expenses, including per diem in lieu of subsistence, in accordance with sections
5702 and 5703 of title 5, United States Code.
(5) CHAIRPERSON- The Chairperson and Vice Chairperson of the task force
shall be elected by the members.
(6) MEETINGS- The task force shall meet biannually and at the call of the
Chairperson.
 (7) INAPPLICABILITY OF TERMINATION DATE- Section 14 of the Federal
Advisory Committee Act shall not apply to the task force.
(i) REPORT- The Secretary shall transmit annually to the Congress a report on the
activities of regional centers established under this section, including the degree to which
matching funds are being leveraged from private sources to establish and operate such
centers.
(j) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated
for purposes of carrying out this section, to remain available until expended, not more
than $10,000,000 for each of fiscal years 1994, 1995, and 1996.

SEC. 104. MANUFACTURED HOUSING ENERGY EFFICIENCY.

(a) AMENDMENTS TO CRANSTON-GONZALEZ NATIONAL AFFORDABLE

HOUSING ACT- Section 943(d)(1) of the Cranston-Gonzalez National Affordable
Housing Act (Public Law 101-625; 109 Stat. 4413) is amended--
(1) in subparagraph (D), by striking `thermal insulation, energy efficiency';
(2) by redesignating subparagraphs (E), (F), (G), and (H) as subparagraphs (F),
(G), (H), and (I), respectively; and
(3) by inserting after subparagraph (D) the following new subparagraph:
`(E) consult with the Secretary of Energy and make recommendations
regarding additional or revised standards for thermal insulation and energy
efficiency applicable to manufactured housing;'.
(b) DUTIES OF THE SECRETARY- The Secretary of Housing and Urban Development
shall assess the energy performance of manufactured housing and make
recommendations to the National Commission on Manufactured Housing established
under section 943 of the Cranston-Gonzalez National Affordable Housing Act regarding
any thermal insulation and energy efficiency improvements applicable to manufactured
housing which are technologically feasible and economically justified. The Secretary
shall also test the performance and determine the cost effectiveness of manufactured
housing constructed in compliance with the standards established under such section.
(c) EXCEPTION TO FEDERAL PREEMPTION- If the Secretary of Housing and Urban
Development has not issued, within 1 year after the date of the enactment of this Act,
final regulations pursuant to section 604 of the National Manufactured Housing
Construction and Safety Standards Act of 1974 (42 U.S.C. 5403) that establish thermal
insulation and energy efficiency standards for manufactured housing that take effect
before January 1, 1995, then States may establish thermal insulation and energy
efficiency standards for manufactured housing if such standards are at least as stringent
as thermal performance standards for manufactured housing contained in the Second
Public Review Draft of BSR/ASHRAE 90.2P entitled `Energy Efficient Design of Low-
Rise Residential Buildings' and all public reviews of Independent Substantive Changes to
such document that have been approved on or before the date of the enactment of this
Act.

SEC. 105. ENERGY EFFICIENT MORTGAGES.

 (a) DEFINITION OF ENERGY EFFICIENT MORTGAGE- Section 104 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12704) is amended by
adding at the end the following new paragraph:
`(24) The term `energy efficient mortgage' means a mortgage that provides
financing incentives for the purchase of energy efficient homes, or that provides
financing incentives to make energy efficiency improvements in existing homes
by incorporating the cost of such improvements in the mortgage.'.
(b) UNIFORM MORTGAGE FINANCING PLAN FOR ENERGY EFFICIENCY-
Section 946 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12712 note) is amended--
(1) in subsection (a), by striking `mortgage financing incentives for energy
efficiency' and inserting `energy efficient mortgages (as such term is defined in
section 104 of this Act)'; and
(2) in subsection (b)--
(A) in the second sentence, by inserting `, but not be limited to,' after
`include'; and
(B) by inserting after the period at the end of the following new sentence:
`The Task Force shall determine whether notifying potential home
purchasers of the availability of energy efficient mortgages would promote
energy efficiency in residential buildings, and if so, the Task Force shall
recommend appropriate notification guidelines, and agencies and
organizations referred to in the preceding sentence are authorized to
implement such guidelines.'.

SEC. 106. ENERGY EFFICIENT MORTGAGES PILOT PROGRAM.

(a) ESTABLISHMENT OF PILOT PROGRAM-

(1) IN GENERAL- Not later than 6 months after the date of enactment of this
Act, the Secretary of Housing and Urban Development (hereafter referred to as
the `Secretary') shall establish an energy efficient mortgage pilot program in 5
States, to promote the purchase of existing energy efficient residential buildings
and the installation of cost-effective improvements in existing residential
buildings.
(2) PILOT PROGRAM- The pilot program established under this subsection shall
include the following criteria, where applicable:
(A) ORIGINATION- The lender shall originate a housing loan that is
insured under title II of the National Housing Act in accordance with the
applicable requirements.
(B) APPROVAL- The mortgagor's base loan application shall be approved
if the mortgagor's income and credit record is found to be satisfactory.
(C) COST OF IMPROVEMENTS- The cost of cost-effective energy
efficiency improvements shall not exceed the greater of--
(i) 5 percent of the property value (not to exceed $8,000); or
(ii) $4,000.
 (3) AUTHORITY FOR MORTGAGEES- In granting mortgages under the pilot
program established pursuant to this subsection, the Secretary shall grant
mortgagees the authority--
(A) to permit the final loan amount to exceed the loan limits established
under title II of the National Housing Act by an amount not to exceed 100
percent of the cost of the cost-effective energy efficiency improvements, if
the mortgagor's request to add the cost of such improvements is received
by the mortgagee prior to funding of the base loan;
(B) to hold in escrow all funds provided to the mortgagor to undertake the
energy efficiency improvements until the efficiency improvements are
actually installed; and
(C) to transfer or sell the energy efficient mortgage to the appropriate
secondary market agency, after the mortgage is issued, but before the
energy efficiency improvements are actually installed.
(4) PROMOTION OF PILOT PROGRAM- The Secretary shall encourage
participation in the energy efficient mortgage pilot program by--
(A) making available information to lending agencies and other
appropriate authorities regarding the availability and benefits of energy
efficient mortgages;
(B) requiring mortgagees and designated lending authorities to provide
written notice of the availability and benefits of the pilot program to
mortgagors applying for financing in those States designated by the
Secretary as participating under the pilot program; and
(C) requiring each applicant for a mortgage insured under title II of the
National Housing Act in those States participating under the pilot program
to sign a statement that such applicant has been informed of the program
requirements and understands the benefits of energy efficient mortgages.
(5) TRAINING PROGRAM- Not later than 9 months after the date of enactment
of this Act, the Secretary, in consultation with the Secretary of Energy, shall
establish and implement a program for training personnel at relevant lending
agencies, real estate companies, and other appropriate organizations regarding the
benefits of energy efficient mortgages and the operation of the pilot program
under this subsection.
(6) REPORT- Not later than 18 months after the date of enactment of this Act, the
Secretary shall prepare and submit a report to the Congress describing the
effectiveness and implementation of the energy efficient mortgage pilot program
as described under this subsection, and assessing the potential for expanding the
pilot program nationwide.
(b) EXPANSION OF PROGRAM- Not later than the expiration of the 2-year period
beginning on the date of the implementation of the energy efficient mortgage pilot
program under this section, the Secretary of Housing and Urban Development shall
expand the pilot program on a nationwide basis and shall expand the program to include
new residential housing, unless the Secretary determines that either such expansion
would not be practicable, in which case the Secretary shall submit to the Congress, before
the expiration of such period, a report explaining why either expansion would not be
practicable.
 (c) DEFINITIONS- For purposes of this section:
(1) The term `base loan' means any mortgage loan for a residential building
eligible for insurance under title II of the National Housing Act or title 38, United
States Code, that does not include the cost of cost-effective energy improvements.
(2) The term `cost-effective' means, with respect to energy efficiency
improvements to a residential building, improvements that result in the total
present value cost of the improvements (including any maintenance and repair
expenses) being less than the total present value of the energy saved over the
useful life of the improvement, when 100 percent of the cost of improvements is
added to the base loan. For purposes of this paragraph, savings and cost-
effectiveness shall be determined pursuant to a home energy rating report
sufficient for purposes of the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, or by other technically accurate
methods.
(3) The term `energy efficient mortgage' means a mortgage on a residential
building that recognizes the energy savings of a home that has cost-effective
energy saving construction or improvements (including solar water heaters, solar-
assisted air conditioners and ventilators, super-insulation, and insulating glass and
film) and that has the effect of not disqualifying a borrower who, but for the
expenditures on energy saving construction or improvements, would otherwise
have qualified for a base loan.
(4) The term `residential building' means any attached or unattached single family
residence.
(d) RULE OF CONSTRUCTION- This section may not be construed to affect any other
programs of the Secretary of Housing and Urban Development for energy-efficient
mortgages. The pilot program carried out under this section shall not replace or result in
the termination of such other programs.
(e) REGULATIONS- The Secretary shall issue any regulations necessary to carry out this
section not later than the expiration of the 180-day period beginning on the date of the
enactment of this Act. The regulations shall be issued after notice and opportunity for
public comment pursuant to the provisions of section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section).
(f) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be
appropriated such sums as may be necessary to carry out this section.