By Conference Staff
December 17, 2007

On December 13, the U.S. Senate overwhelmingly approved a comprehensive energy bill, including a new Energy Efficiency and Conservation Block Grant Program, clearing the way for its approval by the U.S. House of Representatives before Congress adjourns for the year. Following House action this week, President George Bush is poised to sign the legislation once it reaches his desk.

Conference President Douglas H. Palmer applauded Congressional leaders for successfully completing bipartisan action on the legislation, especially its provisions responding to the Conference’s top legislative priority – enactment of an energy block grant initiative – as set forth in the Mayors 10-Point Plan. “We are so pleased that Congress and its Leadership, specifically House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, responded decisively to our call for a new partnership with cities. Many of the energy and climate challenges before the nation can only be addressed through strong and sustained community-based solutions, which this new block grant program will enable.”

Debate on the energy package dominated the closing days of this Session of Congress, with the Senate on several occasions seeking concurrence among Senators on needed adjustments to an earlier House-passed version of the legislation. After removing the tax package and the renewable electricity standard, the Senate voted 86-8 to send the revised energy bill back to the House of Representatives for final action.

“Mayors especially want to acknowledge Representative Albert Wynn of Maryland for his key role in advancing this block grant initiative throughout House deliberations and final action, and we also want to thank New Jersey Senator Bob Menendez and Vermont Senator Bernie Sanders, both former mayors, who led this effort in the Senate,” Palmer said.

In a statement touting the benefits of the new block grant program, Wynn also praised the Conference of Mayors for its work on the block grant program. “This funding will help local governments develop and implement comprehensive energy efficiency strategies to help the nation meet its energy and climate protection goals. Local programs are already having a positive impact in addressing America’s energy challenges. This bill will help support and expand on those local efforts. I am thankful to have had the opportunity to work on this issue with the Conference of Mayors, and win authorization for the $10 billion in Energy Efficiency Block Grants included in this bill.”

Palmer also praised the work of his fellow mayors for the successful outcome in the legislation. “Mayors throughout the nation stepped up and carried the block grant message to Capitol Hill, which made a real difference in the Congressional debate on the energy bill.”

In addition to the new Energy Efficiency and Conservation Block Grant program, the “Energy Independence and Security Act of 2007” (H.R. 6) embraces numerous measures to help the nation address its growing energy challenges. Foremost among them is adoption of new national fuel economy standards for automobiles and light trucks, the first such change in more than three decades. Under the legislation, the Corporate Average Fuel Economy, known as CAFÉ, would be raised to 35 miles per gallon (mpg) by 2020, a 40 percent increase over the current standards, which are set at 27.5 mpg for cars and 22.2 mpg for small trucks (including vans and sport utility vehicles). In addition, the energy bill includes a renewable fuels standard that requires the fuel refiners to use 36 billion gallons of biofuels annually by 2022.

H.R. 6 also requires stronger energy efficiency standards for buildings, appliances, lighting systems and calls for a significant increase in the production of ethanol and other bio-fuels.

H.R. 6 establishes a new Energy Efficiency and Conservation Block Grant Program at the U.S. Department of Energy, providing $2 billion annually over five fiscal years (FYs ‘08-12) in formula grants to cities, counties and states to develop energy efficiency strategies to help reduce greenhouse gas emissions.

“This is a pivotal time for our nation given the scale of our energy and climate challenges. This legislation will enable mayors to do for energy and climate what the Community Development Block Grant Program (CDBG) has done for community development. We applaud Congress for moving forward on this landmark legislation and for including this important initiative in the final agreement,” said Conference Executive Director Tom Cochran.

Following enactment of the new law, the Secretary of Energy must develop the block grant program, including its funding allocation formula and necessary regulations and policies, so cities and other jurisdictions can gain access to program resources once Congress appropriates funding for the block grant assistance.

Cities, subject to program limitations, will receive block grant assistance under various elements of the block grant program. All cities with a population of 35,000 or more will receive direct formula funding. In some states, there are cities below this threshold that will be eligible for formula grants, subject to a special provision in the legislation. All counties above 200,000 in population are eligible for direct block grant funding.

Cities (and counties) not receiving funds by formula can access resources from its state’s block grant share, with the legislation directing states to pass-through a minimum of 60 percent of state dollars to these jurisdictions. Finally, any city can seek additional funds from its state, and from its county, if it is a formula recipient.

The Department of Energy will reserve two percent of all program funds for a competitive grant program serving cities and counties throughout the nation, giving priority to communities in states below two million in population.

The block grant funds may be used for a variety of activities, including developing/implementing an energy efficiency and conservation strategy; conducting energy audits; providing grants to nonprofit organizations to perform energy efficiency retrofits; developing/implementing energy efficiency programs for buildings and transportation (flex time by employees and satellite work centers); promoting of zoning guidelines; developing alternative infrastructure (bike lanes, pathways, pedestrian walkways, and traffic signals); developing building codes; public education programs; methane capture technologies; light emitting diodes (LEDS); onsite renewable energy technology that generates electricity from renewable resources (solar and wind energy, fuel cells, and biomass); and any other activity as determined by the Secretary of Energy in consultation with the Secretaries of Transportation and Housing and Urban Development and the Administrator of the Environmental Protection Agency.

Grant recipients are required to submit to the Secretary of Energy one year after receiving a grant, a proposed energy efficiency and conservation strategy, which includes the goals and proposed plan for the grant. In addition, there will be reporting requirements starting two years after funds are provided and annually after that on the status and implementation of the strategy and any assessments of the energy efficiency gains.

The energy legislation also includes a Green Job Title that amends the Workforce Investment Act of 1998 to establish an energy efficiency and renewable energy worker training program. Among other things, this legislation would link research and development in the green industry to job standards and training curricula.

Under the Green Jobs program, the Secretary of Labor, in consultation with the Secretary of Energy, would establish an energy efficiency and renewable energy worker training program by awarding National Energy Training Partnership Grants on a competitive basis to eligible entities. Eligible entities would be non-profit partnerships with the equal participation of industry, including public or private employers, and labor organizations, including joint labor-management training programs; and may include workforce investment boards, community-based organizations, educational institutions, small businesses, cooperatives, state and local veterans agencies, and veteran’s service organizations.

In addition, the Secretary of Labor would award competitive grants to eligible State Energy Sector Partnerships to coordinate with existing apprenticeship and labor management training programs to implement training programs. These State Energy Sector Partnerships would similarly be comprised of non-profit organizations that include equal participation from industry and labor organizations; and may include representatives from local governments, the workforce investment system – including One'stop Career Centers – community based organizations, community colleges and other post'secondary institutions, small business cooperatives, state and local veterans agencies, and veterans service organizations.

Another component of the training initiative is the Pathways out of Poverty Demonstration program, which seeks to demonstrate how quality training can lead to job ladders that bring individuals with incomes of less than 200 percent of poverty up to at least a level of self'sufficiency.

The new job training programs would authorize $125 million to help create jobs and put workers on a path to financial self'sufficiency. Funding for the programs could be used to pay for occupational training; safety and health training; literacy, GED, and English as a second language courses; community college tuition assistance; and internship programs as well as for support services for workers entering the training program, such as child care. Priority for these training programs would be given to workers impacted by energy legislation, veterans, displaced workers, at-risk youth, and ex-offenders.

Cities out of compliance with federal air quality standards can now seek 100 percent federal funding for transportation projects funded by the Congestion Mitigation and Air Quality Improvement (CMAQ) program.

Once the energy bill become law, state Departments of Transportation will have at least $4 billion in CMAQ funding on hand to direct to local transportation projects in non-attainment areas, resources that can be provided to cities and other jurisdictions without federal matching requirements. In this fiscal year (FY’08), states will be allocated an estimated $2.1 billion in new CMAQ spending authority; when added to the roughly $1.9 billion in existing spending authority (i.e., unobligated balances from prior years), states will have at least $4 billion available in CMAQ spending authority.

Importantly, CMAQ resources are very flexible and can be used for many projects that reduce energy use and greenhouse gas emissions, including vanpool and carpool programs, alternative fuel technologies and systems, traffic signalization improvements for rapid bus and other enhanced transit services, transit capital programs (e.g., purchase buses or railcars, construct streetcar, commuter rail or light rail systems), transit operating costs when offering new or expanded transit services as well as a broad range of other travel demand management (TDM) strategies.

The new legislation also requires states to rescind (i.e., turn back spending authority to the Federal Highway Administration) federal highway program funds on a proportional basis among the various federal highway program accounts. This reform eliminates the ability of states to target selected highway program accounts (e.g., CMAQ program, Bridge program or Transportation Enhancements), often those that most directly benefit local transportation priorities, when complying with Congressionally-directed rescission orders, requiring state to relinquish unused highway program spending authority.

The legislation also includes a Sense of Congress statement that “States and local governments should consider policies designed to accommodate all users, including motorists, pedestrians, cyclists, transit riders, and people of all ages and abilities” when constructing new roadways or rehabilitating existing facilities, conveying support for “complete streets” strategies, which Conference policy supports.

Finally, the legislation authorizes $10 million annually for an advanced technology locomotive pilot program and $50 million annually for certain freight rail improvements, and also establishes a new Short Sea Transportation program, making certain investments eligible for existing federal funding.

Deletion of the tax title means that $8 billion in tax credit bonds for cities and states will not be made available through this legislation. Of this amount, $3.6 billion would have been allocated to state and local governments for Qualified Energy Conservation Bonds to promote green community programs and initiatives to reduce greenhouse emissions. Another $2.4 billion in tax credit bonds would have been allocated to states for Qualified Energy Efficiency Assistant Bonds to underwrite low-interest loans and grants for energy-efficient property and energy improvements to existing homes. Finally, $3 billion was authorized for Clean Renewable Bonds for public power providers and electric cooperatives. Also deleted was a new federal directive that utilities generate 15 percent of their electricity from renewal energy sources.