Introduction
As of May 2018, only a few cities in the U.S. have passed mandatory home energy labeling, most notably Portland, Oregon; Berkeley, California; and Austin, Texas. States including Massachusetts and Vermont have considered residential energy labeling and disclosure mandates, but to date, no state has passed legislation requiring home energy labeling. While home energy labeling is voluntary in the state of Oregon, it is required in the city of Portland. Both voluntary and mandatory scoring systems in Oregon must follow the statewide law that requires home energy performance labels to have consistent information and to use a consistent modeling engine (the Home Energy Score tool) to generate the energy score.
Below are key sections from Oregon’s legislation and Portland’s city ordinance. Links to the full language are also provided below.
Utilize legislation that requires the state agency responsible for energy to conduct a rulemaking to:
- Adopt a voluntary home energy performance score system by which a person may assign a residential building a home energy performance score to evaluate the energy conservation and energy efficiency of the building.
- Designate programs to train home energy assessors.
- Establish requirements, if any, for home energy assessors to report home energy performance scores they assign to homes to the state agency, and for the state agency to maintain that information in a database.
- Establish requirements to standardize the information on a home energy label.
- Prior to drafting rules, the state agency must engage stakeholders on each of these three topics in a series of public meetings to be held through a date certain. Require the rules to take effect by a date certain.
Sample Enabling Legislation and Administrative Rule
Please see ORS 469.040 and 469.703 for full detail. Sections of language included below:
Definitions Section
(a) “Home energy assessor” has the meaning given that term in ORS 701.527.
(b) “Home energy audit” means the evaluation or testing of components or systems in a residential building for the purpose of identifying options for increasing energy conservation and energy efficiency.
(c) “Home energy performance score” has the meaning given that term in ORS 701.527.
Requirements Section
(2) In consultation with the Public Utility Commission, the State Department of Energy shall adopt by rule a home energy performance score system by which a person may assign a residential building a home energy performance score for the purpose of evaluating the energy conservation and energy efficiency of the building.
(3) The department shall designate by rule programs for the training of home energy assessors. Programs designated by the department under this subsection must ensure competency in conducting home energy audits and assigning home energy performance scores.
(4) Subject to subsection (5) of this section, the department may adopt by rule requirements under which home energy assessors who are certified under ORS 701.532 must report to the department the home energy performance scores assigned by the home energy assessors. The department shall keep and maintain a database of information reported to the department under this subsection.
(5) Rules adopted under subsection (4) of this section may not allow for the reporting of individual addresses of residential structures or the names of individual homeowners, but may allow for the reporting of information regarding the jurisdiction in which a residential structure is located and the utility services provided, any specific energy efficiency features of the residential structure or other general information that allows the department to make any aggregated evaluations of savings attributable to energy efficiency.
Please see Oregon Administrative Rule for full details. Section of language included below:
Requirements Section
(1) An individual may not undertake, offer to undertake, or submit a bid to do work as a home energy assessor unless the individual is certified as a home energy assessor
(2) A business may not undertake, offer to undertake or submit a bid to assign home energy performance scores unless the business: (a) Is licensed by the [Authorizing Board] under this chapter, or endorsed as a residential contractor by the board; and (b) Has an owner or an employee who is certified as a home energy assessor.
(3) A person may not use the title of home energy assessor or any title that indicates or tends to indicate that the person is a home energy assessor or an assignor of home energy performance scores unless the person is certified as a home energy assessor or is a business licensed by the board under this chapter or endorsed by the board that has an owner or an employee who is certified as a home energy assessor.
(4) A person may not use any sign, card, or device that indicates or tends to indicate that the person is a home energy assessor or an assignor of home energy performance scores unless the person is certified as a home energy assessor or is a business licensed by the board under this chapter or endorsed by the board that has an owner or an employee who is certified as a home energy assessor.
Authorizing Board Section
(1) The [Authorizing Board] shall certify an individual as a home energy assessor if the individual meets the requirements of this section and of any rule adopted by the board under this section. A home energy assessor certificate must be renewed annually.
(2) The board shall require that an applicant for a home energy assessor certificate present proof of passing a training program designated by the State Department of Energy.
(3) The board may adopt rules to regulate the practice of assigning home energy performance scores, including: (a) Prescribing the form and manner of applying for a home energy assessor certificate; (b) Establishing procedures for the issuance, renewal or revocation of a home energy assessor certificate; and (c) Establishing fees necessary for the administration of sections that do not exceed the following amounts: (A) $100 for application for a home energy assessor certificate; (B) $100 for issuance of an initial one-year home energy assessor certificate; and (C) $100 for renewal of a one-year home energy assessor certificate.
(1) A home energy performance score contractor endorsement authorizes the holder to operate a business assigning home energy performance scores.
(1) Notwithstanding [Statute] the [Authorizing Board] may not impose a continuing education requirement for a home energy assessor or a home energy performance score contractor.
(2) Notwithstanding [Statute], the board may not require a home energy assessor or a home energy performance score contractor to take a test measuring the knowledge of the home energy assessor, contractor or responsible managing individual regarding business practices and laws affecting construction contractors.
Endorsement, License, and Bonding Section
(2) A person or joint venture that undertakes, offers to undertake or submits a bid to do work as a contractor in preparation for or in connection with a residential structure must have one of the following endorsements: (a) Residential general contractor. (b) Residential specialty contractor. (c) Residential limited contractor. (d) Residential developer. (e) Home energy performance score contractor.
(5) A home energy performance score contractor shall: (a) Obtain a surety bond under [Statute] in the amount of [$10,000]; (b) Obtain general liability insurance under [Statute] in an amount of not less than [$100,000]; and (c) Have an owner or employee who is certified by the board as a home energy assessor.
Training, Data, and Reporting Sections
(3) The department shall designate by rule programs for the training of home energy assessors. Programs designated by the department under this subsection must ensure competency in conducting home energy audits and assigning home energy performance scores.
(4) Subject to subsection (5) of this section, the [Energy Department] may adopt by rule requirements under which home energy assessors who are certified under section 5 of this 201X Act must report to the department the home energy performance scores assigned by the home energy assessors. The department shall keep and maintain a database of information reported to the department under this subsection.
(5) Rules adopted under subsection (4) of this section may not allow for the reporting of individual addresses of residential structures or the names of individual homeowners, but may allow for the reporting of information regarding the jurisdiction in which a residential structure is located and the utility services provided, any specific energy efficiency features of the residential structure or other general information that allows the department to make any aggregated evaluations of savings attributable to energy efficiency.
Real Estate Appraisal Section
When preparing, completing, or issuing an opinion about the value of real property or an interest in real property as described in [Statute], a state licensed appraiser or state certified appraiser shall consider improvements made to the structure of any building located on the real property that make the building more energy efficient.
(1) The [Appraiser Certification and Licensure Board] shall determine ways to improve the education of state licensed appraisers and state certified appraisers with respect to assessing the value of improvements made to the structure of a building that make the building more energy efficient and consider the implementation of a program whereby state licensed appraisers and state certified appraisers obtain certification for purposes of preparing, completing and issuing an opinion on the value of improvements made to the structure of a building that make the building more energy efficient.
(2) The board shall report the initial findings of the board made under this section to the [Legislature] in the manner provided in [Statute] no later than [Date].
Municipal Mandatory Ordinance (adapted from Portland’s City Code Chapter 17.108)
Authorize the preferred agency to adopt administrative rules, procedures, and forms to implement mandatory home energy labeling. Use the ordinance to consider:
- Definitions and scope, timing, and responsible party.
- Outline the requirements of the home energy performance report, including when and where it’s available.
- Potential waivers (i.e. low-income sellers) and/or a program phase-in.
- Enforcement options, including fines.
Sample Ordinance Language, Derived from City of Portland, Oregon
Please see City of Portland Ordinance and Administrative Rules for full details. Sections of ordinance language included below:
Purpose
The purpose of this Chapter is to provide information to homebuyers about residential building energy performance. This information is designed to enable more knowledgeable decisions about the full costs of operating homes and to motivate investments in home improvements that lower utility bills, reduce carbon emissions, and increase comfort, safety and health for home owners. This Chapter shall be known as the Home Energy Score Program.
Definitions
[See full ordinance for definitions]
Energy Performance Rating and Disclosure for Covered Buildings
Prior to publicly listing any covered building for sale, the seller of a covered building, or the seller’s designated representative, shall:
A. Obtain a home energy performance report of such building from a state licensed home energy assessor, and;
B. Provide a copy of the home energy performance report: 1. To all licensed real estate agents working on the seller’s behalf; and 2. To prospective buyers who visit the home while it is listed publicly for sale; and 3. To the Director for quality assurance and evaluation of policy compliance.
C. Include the Home Energy Performance Score in all real estate listings, including the Home Energy Performance Report if attachments are accepted by the listing service.
Exemptions and Waivers
A. The Director may exempt a seller from the requirements of this Chapter if the seller submits documentation that the covered building will be sold through of any of the following: 1. A foreclosure sale, 2. A trustee’s sale, 3. A deed-in-lieu of foreclosure sale, or 4. Any pre-foreclosure sale in which seller has reached an agreement with the mortgage holder to sell the property for an amount less than the amount owed on the mortgage.
B. The Director may exempt a seller from the requirements of this Chapter after confirming that compliance would cause undue hardship for the seller under the following circumstances: 1. The covered building qualifies for sale at public auction or acquisition by a public agency due to arrears for property taxes, 2. A court appointed receiver is in control of the covered building due to financial distress, 3. The senior mortgage on the covered building is subject to a notice of default, 4. The covered building has been approved for participation in [State] Property Tax Deferral for Disabled and Senior Citizens, or equivalent program as determined by the Director, or 5. The responsible party is otherwise unable to meet the obligations of this Chapter as determined by the Director.
C. The Director may exempt a seller from the requirements of this Chapter where the Director determines that compliance with the requirements of Section [Ordinance Number] would cause undue hardship under any of the following circumstances: 1. The low-income qualified seller demonstrates household income is at or below 60 percent of median household income for the [Designated City or Town, or Statistical Area], 2. The low-income qualified seller has been approved for participation in [State Low-Income Home Energy Assistance Program], 3. The low-income qualified seller has been approved for participation in Free and Reduced Price Meals through [State Department of Education or Other Relevant Division], or 4. The low-income qualified seller is otherwise unable to meet the obligations of this Chapter as determined by the Director.
D. The Director may provide a waiver from the requirements of this Chapter for homebuilders or sellers using scoring products that are not compliant with [State Administrative Rules] adopted by [State Department of Energy] for [State’s Home Energy Performance Score Standard]. The waiver will allow homebuilders or sellers currently using Energy Performance Scores (EPS) or Home Energy Rating System (HERS) to temporarily continue the use of these asset rating tools.
Enforcement and Penalties
A. It shall be a violation of this Chapter for any person to fail to comply with the requirements of this section or to misrepresent any material fact in a document required to be prepared or disclosed by this Chapter.
B. Any building owner or person who fails, omits, neglects, or refuses to comply with the provisions of this Chapter shall be subject to the following actions: 1. Upon the first violation, the Director may issue a written warning notice to the entity or person, describing the violation and steps required to comply. 2. If the violation is not remedied within [90 days] after issue of written warning notice, the Director may assess a civil penalty of up to [$500]. For every subsequent 180-day period during which the violation continues, the Director may assess additional civil penalties of up to [$500].
Right of Appeal and Payment of Assessments
After being issued a written warning notice of a first violation, any person receiving a subsequent notice of violation shall, within [10 days] of issuance of the notice, either pay to the City the stated amount of the assessment or request an appeal hearing by the Code Hearings Officer in accordance with procedures set forth in Chapter XX of the [City Code]. The filing of an appeal request shall stay the effective date of the assessment until the appeal is determined by the Code Hearings Officer. If, pursuant to said appeal hearing, payment of the assessment is ordered, such payment must be received by the Director or postmarked within [15 calendar days] after the order becomes final.