---
kind: "section"
citation: "42 U.S.C. § 18792"
title: "42"
title_heading: "The Public Health and Welfare"
number: "18792"
heading: "Energy efficiency revolving loan fund capitalization grant program"
release: "119-102"
url: "https://uscodex.org/usc/42/18792"
units:
  - "Chapter 162 — Energy Infrastructure"
  - "Subchapter V — Energy Efficiency and Building Infrastructure"
  - "Part A — Residential and Commercial Energy Efficiency"
---

# §18792. Energy efficiency revolving loan fund capitalization grant program

- (a) **In general—** Not later than 1 year after November 15, 2021, under the [State Energy Program](/usc/42/18791.md?p=4), the [Secretary](/usc/42/18701.md?p=3) shall establish a [program](/usc/42/274l–1.md?p=4) under which the [Secretary](/usc/42/18701.md?p=3) shall provide capitalization grants to [States](/usc/42/201.md?p=f) to establish a revolving loan [fund](/usc/42/12854.md?p=3) under which the [State](/usc/42/201.md?p=f) 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 (j)](#j), the [Secretary](/usc/42/18701.md?p=3) shall use 40 percent to provide capitalization grants to [States](/usc/42/201.md?p=f) that are eligible for funding under the [State Energy Program](/usc/42/18791.md?p=4), in accordance with the [allocation](/usc/42/2021b.md?p=2) formula established under [section 420.11 of title 10, Code of Federal Regulations](/cfr/10/420.11.md) (or successor regulations).
    - (B) **Remaining funding—** After applying the [allocation](/usc/42/2021b.md?p=2) formula described in [subparagraph (A)](#b-1-A), the [Secretary](/usc/42/18701.md?p=3) shall redistribute any unclaimed [funds](/usc/42/12854.md?p=3) to the remaining [States](/usc/42/201.md?p=f) seeking capitalization grants under that subparagraph.
  - (2) **Priority States—**
    - (A) **In general—** Of the amounts made available under [subsection (j)](#j), the [Secretary](/usc/42/18701.md?p=3) shall use 60 percent to provide supplemental capitalization grants to [priority States](/usc/42/18791.md?p=1) in accordance with an [allocation](/usc/42/2021b.md?p=2) formula determined by the [Secretary](/usc/42/18701.md?p=3).
    - (B) **Remaining funding—** After applying the [allocation](/usc/42/2021b.md?p=2) formula described in [subparagraph (A)](#b-2-A), the [Secretary](/usc/42/18701.md?p=3) shall redistribute any unclaimed [funds](/usc/42/12854.md?p=3) to the remaining [priority States](/usc/42/18791.md?p=1) seeking supplemental capitalization grants under that subparagraph.
    - (C) **Grant amount—**
      - (i) **Maximum amount—** The amount of a supplemental capitalization grant provided to a [State](/usc/42/201.md?p=f) under this paragraph shall not exceed $15,000,000.
      - (ii) **Supplement not supplant—** A supplemental capitalization grant received by a [State](/usc/42/201.md?p=f) under this paragraph shall supplement, not supplant, a capitalization grant received by that [State](/usc/42/201.md?p=f) under [paragraph (1)](#b-1).
- (c) **Applications for capitalization grants—** A [State](/usc/42/201.md?p=f) seeking a capitalization grant under the [program](/usc/42/274l–1.md?p=4) shall submit to the [Secretary](/usc/42/18701.md?p=3) an application at such time, in such manner, and containing such information as the [Secretary](/usc/42/18701.md?p=3) may require, including—
  - (1) a detailed explanation of how the grant will be used, including a plan to establish a new revolving loan [fund](/usc/42/12854.md?p=3) or use an existing revolving loan [fund](/usc/42/12854.md?p=3);
  - (2) the need of [eligible recipients](/usc/42/3122.md?p=6-B) for loans and grants in the [State](/usc/42/201.md?p=f) for assistance with conducting [energy audits](/usc/42/6372.md?p=1);
  - (3) a description of the expected benefits that [building](/usc/42/6881.md?p=i-3) infrastructure and [energy](/usc/42/6311.md?p=7) system upgrades and retrofits will have on communities in the [State](/usc/42/201.md?p=f); and
  - (4) in the case of a [priority State](/usc/42/18791.md?p=1) seeking a supplemental capitalization grant under [subsection (b)(2)](#b-2), a justification for needing the supplemental funding.
- (d) **Timing—**
  - (1) **In general—** The [Secretary](/usc/42/18701.md?p=3) shall establish a timeline with dates by, or periods by the end of, which a [State](/usc/42/201.md?p=f) shall—
    - (A) on receipt of a capitalization grant under the [program](/usc/42/274l–1.md?p=4), deposit the [grant funds](/usc/42/5106a.md?p=f-1-B) into a revolving loan [fund](/usc/42/12854.md?p=3); and
    - (B) begin using the capitalization grant as described in [subsection (e)(1)](#e-1).
  - (2) **Use of grant—** Under the timeline established under [paragraph (1)](#d-1), a [State](/usc/42/201.md?p=f) 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](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4)—
    - (A) shall provide loans in accordance with [paragraph (2)](#e-2); and
    - (B) may provide grants in accordance with [paragraph (3)](#e-3).
  - (2) **Loans—**
    - (A) **Commercial energy audit—**
      - (i) **In general—** A [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) may provide a loan to an [eligible recipient](/usc/42/3122.md?p=6-B) described in [clause (iv)](#e-2-A-iv) to conduct a commercial [energy audit](/usc/42/6372.md?p=1).
      - (ii) **Audit requirements—** A commercial [energy audit](/usc/42/6372.md?p=1) conducted using a loan provided under [clause (i)](#e-2-A-i) shall—
        - (I) determine the overall consumption of [energy](/usc/42/6311.md?p=7) of the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B);
        - (II) identify and recommend lifecycle [cost-effective](/usc/42/1396e.md?p=e-2) opportunities to reduce the [energy](/usc/42/6311.md?p=7) consumption of the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B), including through [energy](/usc/42/6311.md?p=7) efficient—
          - (aa) lighting;
          - (bb) heating, ventilation, and air conditioning systems;
          - (cc) windows;
          - (dd) appliances; and
          - (ee) insulation and [building](/usc/42/6881.md?p=i-3) envelopes;
        - (III) estimate the [energy](/usc/42/6311.md?p=7) and cost savings potential of the opportunities identified in [subclause (II)](#e-2-A-ii-II) using software approved by the [Secretary](/usc/42/18701.md?p=3);
        - (IV) identify—
          - (aa) the period and level of peak [energy](/usc/42/6311.md?p=7) demand for each [building](/usc/42/6881.md?p=i-3) within the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B); and
          - (bb) the sources of [energy](/usc/42/6311.md?p=7) consumption that are contributing the most to that period of peak [energy](/usc/42/6311.md?p=7) demand;
        - (V) recommend controls and management systems to reduce or redistribute peak [energy](/usc/42/6311.md?p=7) consumption; and
        - (VI) estimate the total [energy](/usc/42/6311.md?p=7) and cost savings potential for the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B) if all recommended upgrades and retrofits are implemented, using software approved by the [Secretary](/usc/42/18701.md?p=3).
      - (iii) **Additional audit inclusions—** A commercial [energy audit](/usc/42/6372.md?p=1) conducted using a loan provided under [clause (i)](#e-2-A-i) may recommend strategies to increase [energy efficiency](/usc/42/6291.md?p=5) of the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B) through use of electric systems or other high-efficiency systems utilizing fuels, including natural gas and [hydrogen](/usc/42/16152.md?p=1).
      - (iv) **Eligible recipients—** An [eligible recipient](/usc/42/3122.md?p=6-B) under [clause (i)](#e-2-A-i) is a business that—
        - (I) conducts the majority of its business in the [State](/usc/42/201.md?p=f) that provides the loan under that clause; and
        - (II) owns or operates—
          - (aa) 1 or more commercial [buildings](/usc/42/6881.md?p=i-3); or
          - (bb) commercial space within a [building](/usc/42/6881.md?p=i-3) that serves multiple functions, such as a [building](/usc/42/6881.md?p=i-3) for commercial and residential operations.
    - (B) **Residential energy audits—**
      - (i) **In general—** A [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) may provide a loan to an [eligible recipient](/usc/42/3122.md?p=6-B) described in [clause (iv)](#e-2-B-iv) to conduct a residential [energy audit](/usc/42/6372.md?p=1).
      - (ii) **Residential energy audit requirements—** A residential [energy audit](/usc/42/6372.md?p=1) conducted using a loan under [clause (i)](#e-2-B-i) shall—
        - (I) utilize the same evaluation criteria as the Home Performance Assessment used in the [Energy Star program](/usc/42/8259b.md?p=a-3) established under [section 6294a of this title](/usc/42/6294a.md);
        - (II) recommend lifecycle [cost-effective](/usc/42/1396e.md?p=e-2) opportunities to reduce [energy](/usc/42/6311.md?p=7) consumption within the residential [building](/usc/42/6881.md?p=i-3) of the [eligible recipient](/usc/42/3122.md?p=6-B), including through [energy](/usc/42/6311.md?p=7) efficient—
          - (aa) lighting;
          - (bb) heating, ventilation, and air conditioning systems;
          - (cc) windows;
          - (dd) appliances; and
          - (ee) insulation and [building](/usc/42/6881.md?p=i-3) envelopes;
        - (III) recommend controls and management systems to reduce or redistribute peak [energy](/usc/42/6311.md?p=7) consumption;
        - (IV) compare the [energy](/usc/42/6311.md?p=7) consumption of the residential [building](/usc/42/6881.md?p=i-3) of the [eligible recipient](/usc/42/3122.md?p=6-B) to comparable residential [buildings](/usc/42/6881.md?p=i-3) in the same [geographic area](/usc/42/11360.md?p=9); and
        - (V) provide a Home [Energy](/usc/42/6311.md?p=7) Score, or equivalent score (as determined by the [Secretary](/usc/42/18701.md?p=3)), for the residential [building](/usc/42/6881.md?p=i-3) of the [eligible recipient](/usc/42/3122.md?p=6-B) by using the Home [Energy](/usc/42/6311.md?p=7) Score Tool of the [Department](/usc/42/18701.md?p=1) or an equivalent scoring tool.
      - (iii) **Additional audit inclusions—** A residential [energy audit](/usc/42/6372.md?p=1) conducted using a loan provided under [clause (i)](#e-2-B-i) may recommend strategies to increase [energy efficiency](/usc/42/6291.md?p=5) of the [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B) through use of electric systems or other high-efficiency systems utilizing fuels, including natural gas and [hydrogen](/usc/42/16152.md?p=1).
      - (iv) **Eligible recipients—** An [eligible recipient](/usc/42/3122.md?p=6-B) under [clause (i)](#e-2-B-i) is—
        - (I) an individual who owns—
          - (aa) a [single family](/usc/42/2304.md?p=m) home;
          - (bb) a condominium or duplex; or
          - (cc) a manufactured [housing](/usc/42/1490p–2.md?p=r-3) [unit](/usc/42/1395w–114b.md?p=g-2); or
        - (II) a business that owns or operates a multifamily [housing](/usc/42/1490p–2.md?p=r-3) [facility](/usc/42/11049.md?p=4).
    - (C) **Commercial and residential energy upgrades and retrofits—**
      - (i) **In general—** A [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) may provide a loan to an [eligible recipient](/usc/42/3122.md?p=6-B) described in [clause (ii)](#e-2-C-ii) to carry out upgrades or retrofits of [building](/usc/42/6881.md?p=i-3) infrastructure and systems that—
        - (I) are recommended in the commercial [energy audit](/usc/42/6372.md?p=1) or residential [energy audit](/usc/42/6372.md?p=1), as applicable, completed for the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B);
        - (II) satisfy at least 1 of the criteria in the Home Performance Assessment used in the [Energy Star program](/usc/42/8259b.md?p=a-3) established under [section 6294a of this title](/usc/42/6294a.md);
        - (III) improve, with respect to the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B)—
          - (aa) the physical comfort of the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4) occupants;
          - (bb) the [energy efficiency](/usc/42/6291.md?p=5) of the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4); or
          - (cc) the quality of the air in the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4); and
        - (IV)
          - (aa) are lifecycle [cost-effective](/usc/42/1396e.md?p=e-2); and
          - (bb)
            - (AA) reduce the [energy](/usc/42/6311.md?p=7) intensity of the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4) of the [eligible recipient](/usc/42/3122.md?p=6-B); or
            - (BB) improve the control and management of [energy](/usc/42/6311.md?p=7) usage of the [building](/usc/42/6881.md?p=i-3) or [facility](/usc/42/11049.md?p=4) to reduce demand during peak times.
      - (ii) **Eligible recipients—** An [eligible recipient](/usc/42/3122.md?p=6-B) under [clause (i)](#e-2-C-i) is an [eligible recipient](/usc/42/3122.md?p=6-B) described in subparagraph [(A)(iv)](#e-2-A-iv) or [(B)(iv)](#e-2-B-iv) that—
        - (I) has completed a commercial [energy audit](/usc/42/6372.md?p=1) described in [subparagraph (A)](#e-2-A) or a residential [energy audit](/usc/42/6372.md?p=1) described in [subparagraph (B)](#e-2-B) using a loan provided under the applicable subparagraph; or
        - (II) has completed a commercial [energy audit](/usc/42/6372.md?p=1) or residential [energy audit](/usc/42/6372.md?p=1) that—
          - (aa) was not funded by a loan under this paragraph; and
          - (bb)
            - (AA) meets the requirements for the applicable audit under subparagraph [(A)](#e-2-A) or [(B)](#e-2-B), as applicable; or
            - (BB) the [Secretary](/usc/42/18701.md?p=3) determines is otherwise satisfactory.
      - (iii) **Loan term—**
        - (I) **In general—** A loan provided under this subparagraph shall be required to be fully amortized by the earlier of—
          - (aa) subject to [subclause (II)](#e-2-C-iii-II), the year in which the upgrades or retrofits carried out using the loan exceed their expected useful life; and
          - (bb) 15 years after those upgrades or retrofits are installed.
        - (II) **Calculation—** For purposes of [subclause (I)(aa)](#e-2-C-iii-I-aa), in the case of a loan being used to [fund](/usc/42/12854.md?p=3) multiple upgrades or retrofits, the longest-lived upgrade or retrofit shall be used to calculate the year in which the upgrades or retrofits carried out using the loan exceed their expected useful life.
    - (D) **Referral to qualified contractors—** Following the completion of an audit under subparagraph [(A)](#e-2-A) or [(B)](#e-2-B) by an [eligible recipient](/usc/42/3122.md?p=6-B) of a loan under the applicable subparagraph, the [State](/usc/42/201.md?p=f) may refer the [eligible recipient](/usc/42/3122.md?p=6-B) to a qualified contractor, as determined by the [State](/usc/42/201.md?p=f), 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](/usc/42/201.md?p=f) providing loans under this paragraph shall, to the maximum extent practicable, provide loans to [eligible recipients](/usc/42/3122.md?p=6-B) that do not have access to private capital.
  - (3) **Grants and technical assistance—**
    - (A) **In general—** A [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) may use not more than 25 percent of the [grant funds](/usc/42/5106a.md?p=f-1-B) to provide grants or technical assistance to [eligible entities](/usc/42/296.md?p=1) described in [subparagraph (B)](#e-3-B) to carry out the activities described in subparagraphs [(A)](#e-2-A), [(B)](#e-2-B), and [(C)](#e-2-C) of paragraph (2).
    - (B) **Eligible entity—** An entity eligible for a grant or technical assistance under [subparagraph (A)](#e-3-A) is—
      - (i) a business that—
        - (I) is an [eligible recipient](/usc/42/3122.md?p=6-B) described in [paragraph (2)(A)(iv)](#e-2-A-iv); and
        - (II) has fewer than 500 [employees](/usc/42/1320a–7h.md?p=e-7); or
      - (ii) a low-[income](/usc/42/292s.md?p=c-4) individual (as defined in [section 3102 of title 29](/usc/29/3102.md)) that owns a residential [building](/usc/42/6881.md?p=i-3).
  - (4) **Final assessment—** A [State](/usc/42/201.md?p=f) that provides a capitalization grant under [paragraph (2)(C)](#e-2-C) to an [eligible recipient](/usc/42/3122.md?p=6-B) described in [clause (ii)](#e-2-C-ii) of that paragraph may, not later than 1 year after the date on which the upgrades or retrofits funded by the grant under that paragraph are completed, provide to the [eligible recipient](/usc/42/3122.md?p=6-B) a loan or, in accordance with [paragraph (3)](#e-3), a grant to conduct a final [energy audit](/usc/42/6372.md?p=1) that assesses the total [energy](/usc/42/6311.md?p=7) savings from the upgrades or retrofits.
  - (5) **Administrative expenses—** A [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) may use not more than 10 percent of the [grant funds](/usc/42/5106a.md?p=f-1-B) for administrative expenses.
- (f) **Coordination with existing programs—** A [State](/usc/42/201.md?p=f) receiving a capitalization grant under the [program](/usc/42/274l–1.md?p=4) is encouraged to utilize and build on existing [programs](/usc/42/274l–1.md?p=4) and infrastructure within the [State](/usc/42/201.md?p=f) that may aid the [State](/usc/42/201.md?p=f) in carrying out a revolving loan [fund](/usc/42/12854.md?p=3) [program](/usc/42/274l–1.md?p=4).
- (g) **Leveraging private capital—** A [State](/usc/42/201.md?p=f) receiving a capitalization grant under the [program](/usc/42/274l–1.md?p=4) shall, to the maximum extent practicable, use the grant to leverage private capital.
- (h) **Outreach—** The [Secretary](/usc/42/18701.md?p=3) shall engage in outreach to inform [States](/usc/42/201.md?p=f) of the availability of capitalization grants under the [program](/usc/42/274l–1.md?p=4).
- (i) **Report—** Each [State](/usc/42/201.md?p=f) that receives a capitalization grant under the [program](/usc/42/274l–1.md?p=4) shall, not later than 2 years after a grant is received, submit to the [Secretary](/usc/42/18701.md?p=3) a report that describes—
  - (1) the number of [recipients](/usc/42/2996a.md?p=6) to which the [State](/usc/42/201.md?p=f) has distributed—
    - (A) loans for—
      - (i) commercial [energy audits](/usc/42/6372.md?p=1) under [subsection (e)(2)(A)](#e-2-A);
      - (ii) residential [energy audits](/usc/42/6372.md?p=1) under [subsection (e)(2)(B)](#e-2-B);
      - (iii) [energy](/usc/42/6311.md?p=7) upgrades and retrofits under [subsection (e)(2)(C)](#e-2-C); and
    - (B) grants under [subsection (e)(3)](#e-3); and
  - (2) the average capital cost of upgrades and retrofits across all commercial [energy audits](/usc/42/6372.md?p=1) and residential [energy audits](/usc/42/6372.md?p=1) that were conducted in the [State](/usc/42/201.md?p=f) using loans provided by the [State](/usc/42/201.md?p=f) under [subsection (e)](#e).
- (j) **Authorization of appropriations—** There is authorized to be appropriated to the [Secretary](/usc/42/18701.md?p=3) to carry out this section $250,000,000 for fiscal year 2022, to remain available until expended.

## Source credit

(Pub. L. 117–58, div. D, title V, § 40502, Nov. 15, 2021, 135 Stat. 1051.)

## Notes

### Statutory Notes and Related Subsidiaries

### Wage Rate Requirements

For provisions relating to rates of wages to be paid to laborers and mechanics on projects for construction, alteration, or repair work funded under div. D or an amendment by div. D of Pub. L. 117–58, including authority of Secretary of Labor, see section 18851 of this title.