Republicans support the stated goals of H.R. 2336, which are to encourage energy efficiency and conservation and the development of renewable energy sources for housing, commercial structures, and other buildings, and to create sustainable communities. However, as in previous iterations of the bill, some of H.R. 2336's provisions could impede rather than encourage green building, making it more costly rather than more affordable. H.R. 2336 also authorizes billions of dollars in new Federal spending during a time of record debts and deficits. Accordingly, we believe that changes to the legislation are necessary before it is considered by the full House.

The Congressional Budget Office (CBO) estimates that H.R. 2336 will cost $10 billion from 2011-2015. Included in the bill is a $5 billion revolving loan fund to promote energy efficiency improvements in single and multifamily dwellings; a $2.5 billion Residential Energy Efficient block grant program; and a $5 million outreach campaign to pay for energy efficiency mortgage education. The legislation also includes a provision that sets the Federal Housing Administration (FHA) on a path to insure 50,000 green mortgages. FHA is already under considerable financial strain, with its capital reserve ratio near zero, and now is not the time to be placing additional demands on its limited resources.

Another concern for Committee Republicans is the overall cost to taxpayers from promoting `green' lending without meaningful evidence from government regulators or industry experts as to the viability of these loans. For example, the Federal Housing Finance Agency (FHFA) suspended purchases of certain energy retrofit loans by Fannie Mae and Freddie Mac on July 6, 2010, citing `the absence of robust underwriting standards to protect homeowners and the lack of energy retrofit standards to assist homeowners, appraisers, inspectors, and lenders [in] determine [ing] the value of retrofit products.' FHFA also questioned whether certain home improvements actually produce meaningful reductions in energy consumption. For these reasons, FHFA believes these loans pose safety and soundness issues for the GSEs. Until these loans can be prudently and uniformly underwritten to the satisfaction of one arm of the federal government, other arms should not rush to start funding them. These loans must be properly valued and judged for volatility and environmental impact before taxpayers are exposed to losses from potential defaults in these new programs.

Although the GREEN Act allows some flexibility, the standards set forth in the bill may still limit innovation in green building. Green building requires continuous tests of new practices and products in order to determine the most efficient and viable strategies. The constantly evolving green building marketplace has numerous systems currently in development that may be more suitable for the energy efficiency projects. More regionally appropriate methods can be implemented only when green legislation is flexibly crafted. At issue is whether the energy efficiency standards in the bill would impede rather than encourage green building, as well as whether the bill's massive new spending can be justified at a time of ballooning federal deficits.

Spencer Bachus.
Randy Neugebauer.
J. Gresham Barrett.
Shelley Moore Capito.
Ron Paul.