THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY CUTLER, WATERS, AUMENT, BAKER, BOBACK, CLYMER, CREIGHTON, DALEY, FARRY, FLECK, GABLER, GEIST, GINGRICH, GROVE, HARHAI, HELM, HESS, HICKERNELL, KAUFFMAN, KILLION, MAJOR, MILLARD, MILLER, MULLERY, PICKETT, PYLE, REED, REICHLEY, SAYLOR, SONNEY, STERN, SWANGER, TOEPEL, VULAKOVICH, WATSON AND MALONEY, NOVEMBER 16, 2011

AS REPORTED FROM COMMITTEE ON HEALTH, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 6, 2012   

AN ACT

Amending the act of July 10, 1986 (P.L.1398, No.122), entitled

"An act establishing a special fund for moneys received by

the Commonwealth from resolution of oil overcharge matters;

designating certain low-income energy conservation and

assistance programs for funding from this special fund; and

making appropriations," further providing for legislative

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findings and for definitions; providing for verification and

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assistance amounts of eligibility and, for fraud reporting to

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Inspector General and for conflict of interest policy;

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further providing for weatherization and energy conservation;

providing for performance audits by the Auditor General; and

making editorial changes.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definition of "energy conservation and

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assistance programs" in section 3 of the act of July 10, 1986

(P.L.1398, No.122), known as the Energy Conservation and

Assistance Act, amended July 9, 1987 (P.L.235, No.42), is

amended to read:

Section 1.  Section 2 of the act of July 10, 1986 (P.L.1398,

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No.122), known as the Energy Conservation and Assistance Act, is

amended by adding paragraphs to read:

Section 2.  Legislative findings.

The General Assembly hereby finds and declares that:

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(5)  Even as the oil overcharge funds near exhaustion,

the need for the continued operation of energy conservation

and assistance programs in this Commonwealth remains.

(6)  Improved oversight, fraud control measures and

income eligibility verification procedures are necessary to

ensure that this Commonwealth's low-income residents continue

to be served by energy conservation and assistance programs

in the most efficient manner possible.

Section 2.  The definition of "energy conservation and

assistance programs" in section 3 of the act, amended July 9,

1987 (P.L.235, No.42), is amended and the section is amended by

adding a definition to read:

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Energy conservation and assistance programs."  Includes any

of the following:

(1)  The programs established under Part D of Title III

of the Energy Policy and Conservation Act (Public Law 94-163,

42 U.S.C. § 6321 et seq.), providing for state energy

conservation programs.

(2)  The programs established under Part G of Title III

of the Energy Policy and Conservation Act, providing for

energy conservation investments in schools and hospitals.

(3)  The programs established under the National Energy

Extension Service Act (Public Law 95-39, 42 U.S.C. § 7001 et

seq.), providing for, inter alia, energy conservation

outreach programs to small businesses and individual

consumers.

(4)  The programs established under the Low-Income Home

Energy Assistance Act of 1981 (Public Law 97-35, 42 U.S.C. §

8621 et seq.), providing for energy assistance and

weatherization assistance to low-income households.

(5)  The programs established under Part A of the Energy

Conservation in Existing Buildings Act of 1976 (Public Law

94-385, 42 U.S.C. § 6851 et seq.), establishing the Low

Income Weatherization Program.

(6)  The programs established by the Governor's Energy

Council [which] and now administered by the Department of

Environmental Protection to promote energy conservation and

energy development, in compliance with the terms and

conditions of oil overcharge settlement agreements, oil

overcharge orders issued by the courts or the Department of

Energy or fund distribution requirements of the Department of

Energy.

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"Subgrantee."  As defined in 10 CFR § 440.3 (relating to

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definitions).

Section 2 3.  Section 5(c) of the act, amended July 9, 1987

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(P.L.235, No.42), is amended to read:

Section 5.  Supplemental low-income energy conservation and

assistance programs.

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(c)  Administration of programs.--The programs established in

subsection (a) shall be administered as follows:

(1)  The Pennsylvania Supplemental Low-Income

Weatherization Program established in subsection (a)(1) shall

be administered by the Department of Community [Affairs] and

Economic Development as a part of the programs authorized

under the Low-Income Home Energy Assistance Act of 1981

(Public Law 97-35, 42 U.S.C. § 8621 et seq.) or the Energy

Conservation in Existing Buildings Act of 1976 (Public Law

94-385, 42 U.S.C. § 6851 et seq.). Community action agencies,

existing low-income weatherization providers or other county,

municipal or nonprofit corporations may apply for a portion

of these funds. The Department of Community [Affairs] and

Economic Development shall establish regulations necessary

for administering this program consistent with the

requirements of section 6.

(2)  (i)  The Pennsylvania Supplemental Low-Income Energy

Assistance Program established in subsection (a)(2) shall

be administered by the Department of Public Welfare as

part of the program authorized under the Low-Income Home

Energy Assistance Act of 1981. The Department of Public

Welfare shall establish regulations necessary for

administering this program.

(ii)  The Department of Public Welfare shall provide

the General Assembly with an annual report, which shall

include an independent audit, not later than September 30

of each year, covering all expenditures made in

administering this program.

Section 3 4.  The act is amended by adding sections to read:

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Section 5.1.  Verification and assistance amounts of

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eligibility.

(a)    Energy assistance.--The Department of Public Welfare

shall verify the income eligibility of recipients receiving

energy assistance through the programs set forth in paragraph

(4) of the definition of "energy conservation and assistance

programs" in section 3 and the program established in section 5

(a)(2) in accordance with the verification procedures in

sections 432.19 and 432.23 of the act of June 13, 1967 (P.L.31,

No.21), known as the Public Welfare Code, unless otherwise

prohibited by Federal law.

(b)  Weatherization services.--The Department of Community

and Economic Development shall verify the income eligibility of

recipients receiving weatherization services through the

programs set forth in paragraphs (4) and (5) of the definition

of "energy conservation and assistance programs" in section 3

and the program established in section 5(a)(1) in accordance

with the verification procedures in sections 432.19 and 432.23

of the Public Welfare Code, unless otherwise prohibited by

Federal law.

(c)  Offset.--The Department of Community and Economic

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Development shall determine the increased efficiency gained from

weatherization services provided to an individual eligible for

energy assistance who has previously received weatherization

services. The Department of Public Welfare shall reduce the

individual's energy assistance amount accordingly.

(c)  Report.--No later than six months after the effective

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date of this section and every six months thereafter until this

section is fully implemented, the Department of Community and

Economic Development and the Department of Public Welfare shall

jointly provide a written report to the Governor, the

chairperson and the minority chairperson of the Public Health

and Welfare Committee of the Senate, the chairperson and the

minority chairperson of the Health Committee of the House of

Representatives and the Inspector General detailing the progress

of the implementation of this section, including, but not

limited to, the following information:

(1)  The cause of any delay in the full implementation of

this section.

(2)  Any technical impediments to the full implementation

of this section.

(3)  A listing of the data required under section 423 of

the Public Welfare Code that the Department of Community and

Economic Development or the Department of Public Welfare was

unable to obtain or access and a description of its efforts

to obtain or access the data.

Section 5.2.  Fraud reporting to the Office of Inspector

General.

(a)  Duty of employee and contractor Reporting by employee or

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contractor.--If an employee or contractor of an energy

conservation and assistance program has reason to believe a

recipient of or applicant for weatherization services or energy

assistance is committing fraud or providing false information in

order to receive weatherization services or energy assistance,

the employee or contractor shall make a fraud report directly to

the Office of Inspector General.

(b)  Duty of applicant and recipient Reporting by applicant

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or recipient.--If a recipient of or applicant for energy

assistance or weatherization services has reason to believe an

employee or contractor of an energy conservation and assistance

program is committing fraud, the applicant or recipient shall 

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may make a fraud report directly to the Office of Inspector

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General.

(c)  Sanctions.--The employee, contractor, applicant or

recipient shall not be subject to any sanctions for making a

fraud report.

Section 5.3.  Conflict of interest policy.

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The Department of Community and Economic Development shall

implement a conflict of interest policy that prohibits an

employee of a subgrantee from approving an application for

weatherization services for a property in which the employee or

a member of the employee's family has an ownership interest.

Section 4 5.  Section 6 of the act is amended to read:

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Section 6.  Weatherization and energy conservation.

(a)  Establishment of Statewide Weatherization and Energy

Conservation Policy Council.--A Statewide Weatherization and

Energy Conservation Policy Council is hereby created and shall

have the responsibility of advising the Department of Community

[Affairs] and Economic Development on matters of policy related

to the development and implementation of this program. The

council shall establish bylaws governing its activities and

shall assume all responsibilities associated with the existing

Policy Advisory Council required by the Department of Energy.

Members of the council shall be appointed by the Secretary of

the Department of Community [Affairs] and Economic Development.

(b)  Approval of Statewide plan.--[The council must approve

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the Statewide plan each year prior to the expenditure of any

funds under this section] In accordance with 10 CFR § 440.14

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(relating to State plans), the council shall review the

Statewide plan each year and shall advise the Department of

Community and Economic Development on suggested changes to the

Statewide plan prior to the expenditure of any funds under this

section.

(c)  Members of council.--The council shall include

representatives of gas and electric utilities, rural electric

cooperatives, municipal electric systems, heating oil dealers,

eligible participants in the program, weatherization providers,

energy advocacy groups, social service agencies and senior

citizen organizations. Representatives serving on the council

shall constitute a reasonable and fair geographic distribution

of utility, service agency and other members.

(d)  Annual report to General Assembly.--The Statewide

Weatherization and Energy Conservation Policy Council shall

submit an annual report to the General Assembly on or before

September 30 of each year summarizing and evaluating the

expenditure of funds under this section during the previous

State fiscal year. Such a report shall include, but not be

limited to, a summary of program and administrative

expenditures, the number of households served, the average

investment per home, an estimate of energy savings, the number

of applicants and any other relevant information the council

deems appropriate. All such information shall be by county,

where appropriate. In addition, the report shall contain

recommendations to the General Assembly for improvements in the

weatherization program.

(e)  Coordination of activities.--Activities supported under

this act shall be coordinated with other Federal, State, local

and privately funded programs in order to avoid duplication of

effort and promote integration with other conservation and

energy assistance programs. Such coordination shall include, but

not be limited to, the establishment, by interagency agreement

or otherwise, of a joint policy advisory council to ensure that

energy assistance and weatherization assistance benefits are

delivered in an effective manner.

(f)  Administrative and program efficiency.--All

administrative and programmatic requirements shall be

streamlined to the greatest extent possible and shall be

structured so as to reinforce the quality and productivity of

conservation work performed.

(g)  Energy education.--[Up to 5%] A portion of the

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allocation to each [grantee] subgrantee may be utilized for

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energy education, which shall include the instruction and

demonstration in the home, at the time the work is performed, of

behavior and skills necessary to effectively utilize and

preserve the energy conservation measures involved and adopt

sound conservation practices in daily lifestyle, as well as the

provision of written educational materials and the development

of instructional aids and followup.

[(h)  Program support cost.--No more than 150% of the

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Statewide average in any fiscal year of the cost of materials

shall be provided for program support costs, including, but not

limited to, labor, tools, insurance, supervision, eligibility

determinations, recordkeeping, audit, rent and utilities.

Grantees may request waivers of this subsection from the

Statewide Weatherization and Energy Conservation Policy Council

in appropriate circumstances, including, but not limited to,

programmatic and administrative expenditures attributed to cost-

effective and innovative weatherization and conservation

technologies.]

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(i)  Advance payment.--[An advance payment of one-sixth of

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the total contract shall be provided on the effective date of

each contract. This amount shall be reduced by deducting one-

twelfth of the advanced amount from each monthly invoice.] All

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funds shall be disbursed to [grantees] subgrantees and their

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subcontractors in a timely fashion so as to promote continuity

and productivity of program and staff.

[(j)  Inventory.--Each local program operator shall be

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allowed funds to enable the maintenance of an inventory equal to

5% of the total contract throughout the period of the contract.]

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(k)  Reallocation of funds.--In order to ensure the maximum

utilization of all funds, the Department of Community [Affairs] 

and Economic Development shall [conduct and complete an

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evaluation of all grantee spending by [December 1] May 15 of

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each year and submit its evaluation to the Auditor General.

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Grantees which are spending at a level of at least 10% less than

projected shall have such underexpenditures in excess of 10%

deducted from the annual contract. Such funds] evaluate

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subgrantee spending using performance metrics. Such funds which

may be more effectively used by other subgrantees, as determined

by performance metrics, shall be reallocated, forthwith, to

other [grantees] subgrantees able to utilize the funds during

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the contract period.

(l)  Quality control monitoring and evaluation.--The

department shall institute regulations, procedures and studies

to the following ends:

(1)  To ensure that only measures of high cost

effectiveness consistent with priorities established by an

energy audit have been installed.

(2)  To ensure that the material quality and labor

associated with the installation of all measures equals or

exceeds, where applicable, prevailing industry standards and

is sufficiently high to make the measures fully effective.

(3)  To evaluate, with the cooperation of utilities and

fuel vendors, and with the consent of the recipient

household, fuel consumption before and after treatment in a

minimum of 5% of the buildings weatherized with major

measures by each contractor. In addition to fuel savings, the

household shall be evaluated with respect to any enhanced

ability to pay or increased comfort. [Local grantees] 

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Subgrantees shall be required to conduct an independent

review of any household which does not show reduced usage or

increased comfort and provide an explanation to the

department. Any evaluations conducted pursuant to this

paragraph shall be performed by a qualified independent

organization which shall be chosen by the Statewide

Weatherization and Energy Conservation Policy Council in

accordance with bidding and selection criteria developed by

the Department of Community [Affairs] and Economic

Development. Any evaluation shall also include the

effectiveness of any energy education component associated

with the weatherization activity.

(4)  To ensure that an independent audit is performed

annually for each [grantee organization] subgrantee.

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(5)  To ensure that sufficient funds for research and

development shall be available to review and evaluate

specific technologies, installation procedures or other

aspects of the program, including training and technical

assistance, as may be necessary to ensure maximum energy

savings and to improve the cost-effectiveness of the program.

(m)  Audit.--The Legislative Budget and Finance Committee

shall conduct a performance audit of the Pennsylvania

Weatherization Program as administered prior to the effective

date of this act by the Department of Community Affairs. The

committee shall conduct such inquiries as it deems necessary,

including, but not limited to, obtaining interviews with

provider agencies and program recipients, with administrators

within the Department of Public Welfare, the Department of

Community Affairs, the Pennsylvania Public Utility Commission

and the Weatherization Policy Advisory Council of the Department

of Community Affairs, and with such other persons and entities

as it deems necessary. The committee shall present to the

General Assembly findings and recommendations for programmatic

improvements within one year of the effective date of this act.

Section 5 6.  The act is amended by adding a section to read:

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Section 6.1.  Powers and duties of Auditor General.

(a)  Conduct of performance audit.--The Auditor General shall

conduct a thorough performance audit of the programs set forth

in paragraphs (4) and (5) of the definition of "energy

conservation and assistance programs" in section 3 and the

programs created in section 5(a)(1) and (2) which shall be

completed within one year five years after the effective date of

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this section. Thereafter, the Auditor General shall conduct such

performance audits at intervals of not greater than five years

from the date of completing the immediately preceding

performance audit required under this subsection. The

departments and individuals administering the programs being

audited under this section shall make all records, documents and

other information available for the inspection of the Auditor

General that reasonably relate to the conduct of the performance

audit prescribed in this section.

(b)  Content of audit.--The audit shall address in detail the

adequacy of the performance with respect to each of the

administrative and regulatory activities and shall make detailed

recommendations to the department, each local office,

contractors, the Governor and the General Assembly for remedial

and regulatory changes in the program that will further the

purposes of this act.

(c)  Transmission of audit reports and public access.--A copy

of each performance audit conducted pursuant to subsection (a)

shall be transmitted to the Department of Public Welfare, the

Department of Community and Economic Development, the Governor,

the Office of Inspector General, the Attorney General, the

chairman and minority chairman of the Appropriations Committee

of the Senate, the chairman and minority chairman of the

Appropriations Committee of the House of Representatives, the

chairman and minority chairman of the Public Health and Welfare

Committee of the Senate and the chairman and minority chairman

of the Health Committee of the House of Representatives. A copy

of the performance audit shall be published as a notice in the

Pennsylvania Bulletin.

(d)  Transmission of information related to fraudulent

activities.--The Auditor General shall transmit any information

uncovered during the conduct of the performance audit relating

to fraud to the Department of Public Welfare, the Department of

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Community and Economic Development, each local office, the

Attorney General and the Office of Inspector General.

Section 6 7.  Section 7(a) of the act, amended July 9, 1987

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(P.L.235, No.42), is amended to read:

Section 7.  Administration of certain energy conservation and

assistance programs.

(a)  [Governor's Energy Council] Duties of Department of

Environmental Protection.--The energy conservation and

assistance programs set forth in paragraphs (1), (2), (3) and

(6) of the definition of "energy conservation and assistance

programs" in section 3 shall be administered by the [Governor's

Energy Council] Department of Environmental Protection. The

[council] Department of Environmental Protection shall establish

regulations necessary for administering these programs.

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Section 7 8.  Section 8.1 of the act, added December 12, 1986

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(P.L.1583, No.173), is amended to read:

Section 8.1.  Limited grants for resource recovery projects.

(a)  General rule.--Pursuant to the programs set forth in

section 3(1), there is hereby established within the Department

of Environmental [Resources] Protection a limited grant program

as part of the State Energy Conservation Plan to assist

municipalities in developing resource recovery projects.

Consistent with Federal law and regulations, including those

governing State energy conservation plans, and departmental

regulations, the program shall provide grants which cover up to

75% of the following:

(1)  Costs associated with feasibility studies.

(2)  Costs associated with project development activity.

No grant funds shall be used to cover in any manner any

construction costs incurred for resource recovery projects.

(b)  Funding.--Money for the grant program shall be derived

from the appropriation in section 9(c.1).

(c)  Duration.--This grant program shall continue until June

30, 1988, at which time the program shall expire, and any

unexpended funds shall lapse back to the Energy Conservation and

Assistance Fund.

(d)  [Governor's Energy Council] Duties of Department of

Environmental Protection.--In administering this program, the

Department of Environmental [Resources] Protection shall comply

with such procedures and restrictions and submit such reports as

may be required [by the Governor's Energy Council] in order to

fulfill its federally mandated responsibilities regarding the

State Energy Conservation Plan.

Section 8 9.  This act shall take effect immediately.

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