3. Conditional use of the fund. The authority's use of the fund is subject to the following conditions and limitations.

A. If the authority reasonably anticipates that federal fuel assistance block grant funds are not available for distribution to the local program operators and municipal administrators by October July 1st of each year, the authority shall withdraw and distribute sufficient money from the fund as is necessary for the purposes set forth in this section. The authority may withdraw funds prior to October 1st, provided that those funds are used only for costs incurred on or after October July 1st.

Money may not be withdrawn from the fund if sufficient block grant funds are available by October July 1st to pay reasonably anticipated fuel assistance program and administrative costs for the months of October, November and December July, August and September.

B. Money withdrawn from the fund must be sufficient to cover anticipated fuel assistance payments and fuel assistance program administrative costs for all local program operators and municipal administrators for the months of October, November and December July, August and September.

C. The fund may not be used if the authority reasonably anticipates that no federal fuel assistance money will be received.

D.__The authority must receive prior written approval from the Federal Government that confirms that state funds withdrawn during a period from July 1st to September 30th may be reimbursed with federal fuel assistance funds received for the federal program year beginning in October of that same year.

4. Recapitalization. If money is withdrawn from the fund for the purposes of this section, the authority shall ensure that the fund is fully recapitalized before the end of the fiscal year in which the funds were appropriated. Recapitalization does not

apply in any state fiscal year in which a working capital advance is provided.

5.__Working capital advance.__The State Controller may advance up to $10,000,000 from the General Fund unappropriated surplus to the Fuel Assistance Reserve Fund during any state fiscal year, if requested in writing by the Director of the Maine State Housing Authority, to be used to provide cash necessary to ensure that fuel assistance benefits for the State's eligible elderly and low-income applicant households will be available prior to the beginning of the heating season.__These funds must be allotted by financial order upon recommendation of the State Budget Officer and approval of the Governor.__These funds must be returned to the General Fund before the close of the state fiscal year in which the advance was made.__The State Controller shall report to the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs within 30 days of making any working capital advance for this purpose.

PART B

Sec. B-1. Maine State Housing Authority shall identify funding for nonfederal share of weatherization program costs. The Maine State Housing Authority in consultation with other affected state agencies that receive federal Department of Energy funding shall report to the joint standing committee of the Legislature having jurisdiction over utilities and energy matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs on identifying the most effective way to provide adequate funding of the 25% nonfederal share of weatherization program costs.

The authority shall identify the source or sources of the match necessary to meet this cost-sharing requirement. The authority shall identify an appropriate long-term funding solution. The authority shall submit a report with accompanying legislation if necessary to the First Regular Session of the 120th Legislature by March 15, 2001.

PART C

Sec. C-1. Maine State Housing Authority and the Finance Authority of Maine shall establish program that provides low-interest loans or grants for energy conservation improvements. The Maine State Housing Authority and the Finance Authority of Maine shall work cooperatively to establish a program that provides low-interest loans or grants to Maine citizens for purchasing certain energy conservation

improvements. The Maine State Housing Authority with the assistance of the Finance Authority of Maine shall report to the joint standing committee of the Legislature having jurisdiction over utilities and energy matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs on identifying ways to encourage citizens of this State to secure low-interest loans or grants as part of this energy conservation program. The Maine State Housing Authority shall submit a report with accompanying legislation to the First Regular Session of the 120th Legislature by March 15, 2001.

PART D

Sec. D-1. Authorization of bonds to provide low-interest loans or grants for energy conservation improvements to low-income and moderate-income citizens. The Treasurer of State is authorized, under the direction of the Governor, to issue bonds in the name and on behalf of the State in an amount not exceeding $8,000,000 to raise funds for low- income and moderate-income citizens to obtain low-interest loans or grants for energy conservation improvements as authorized in section 6 of this Part. The bonds are a pledge of the full faith and credit of the State. The bonds may not run for a period longer than 20 years from the date of the original issue of the bonds. At the discretion of the Treasurer of State, with the approval of the Governor, any issuance of bonds may contain a call feature.

Sec. D-2. Records of bonds issued to be kept by Treasurer of State. The Treasurer of State shall keep an account of each bond showing the number of the bond, the name of the successful bidder to whom sold, the amount received for the bond, the date of sale and the date when payable.

Sec. D-3. Sale; how negotiated; proceeds appropriated. The Treasurer of State may negotiate the sale of the bonds by direction of the Governor, but no bond may be loaned, pledged or hypothecated on behalf of the State. The proceeds of the sale of the bonds, which must be held by the Treasurer of State, and paid by the Treasurer of State, upon warrants drawn by the State Controller, are appropriated solely for the purposes set forth in this Part. Any unencumbered balances remaining at the completion of the project in section 6 of this Part lapse to the debt service account established for the retirement of these bonds.

Sec. D-4. Interest and debt retirement. The Treasurer of State shall pay interest due or accruing on any bonds issued under this Part and all sums coming due for payment of bonds at maturity.

Sec. D-5. Disbursement of bond proceeds. The proceeds of the bonds must be expended as set out in section 6 of this Part under the direction and supervision of the Maine State Housing Authority.

Sec. D-6. Allocations from General Fund bond issue; low-interest loans or grants for energy conservation improvements for low-income and moderate-income citizens. The proceeds of the sale of bonds must be expended as designated in the following schedule.

MAINE STATE HOUSING AUTHORITY $8,000,000

Low-interest loans or grants for energy conservation improvements for low-income and moderate-income citizens.

Sec. D-7. Contingent upon ratification of bond issue. Sections 1 to 6 of this Part do not become effective unless the people of the State have ratified the issuance of bonds as set forth in this Part.

Sec. D-8. Appropriation balances at year-end. At the end of each fiscal year, all unencumbered appropriation balances representing state money carry forward. Bond proceeds that have not been expended within 10 years after the date of the sale of the bonds lapse to General Fund debt service.

Sec. D-9. Bonds authorized but not issued. Any bonds authorized but not issued, or for which bond anticipation notes are not issued within 5 years of ratification of this Part, are deauthorized and may not be issued; except that the Legislature may, within 2 years after the expiration of that 5-year period, extend the period for issuing any remaining unissued bonds or bond anticipation notes for an additional amount of time not to exceed 5 years.

Sec. D-10. Referendum for ratification; submission at statewide election; form of question; effective date. This Part must be submitted to the legal voters of the State of Maine at a statewide election held on the Tuesday following the first Monday of November following passage of this Part. The municipal officers of this State shall notify the inhabitants of their respective cities, towns and plantations to meet, in the manner prescribed by law for holding a statewide election, to vote on the acceptance or rejection of this Part by voting on the following question:

"Do you favor an $8,000,000 bond issue for direct loans or grants to Maine citizens for energy conservation improvements?"

The legal voters of each city, town and plantation shall vote by ballot on this question and designate their choice by a cross or check mark placed within a corresponding square below the word "Yes" or "No." The ballots must be received, sorted, counted and declared in open ward, town and plantation meetings and returns made to the Secretary of State in the same manner as votes for members of the Legislature. The Governor shall review the returns and, if a majority of the legal votes are cast in favor of this Part, the Governor shall proclaim the result without delay, and this Part becomes effective 30 days after the date of the proclamation.

The Secretary of State shall prepare and furnish to each city, town and plantation all ballots, returns and copies of this Part necessary to carry out the purpose of this referendum.

PART E

Sec. E-1. 30-A MRSA c. 201, sub-c. XII-A is enacted to read:

SUBCHAPTER XII-A

ENERGY CONSERVATION

§4981.__Energy Conservation Revolving Loan Fund

1.__Fund established.__ The Energy Conservation Revolving Loan Fund, referred to in this section as the "fund," is established as a nonlapsing fund administered by the Maine State Housing Authority, referred to in this section as the "authority."__The fund consists of loan repayments of principal and interest made by eligible applicants to the fund and other money available to the fund including eligible investment earnings from fund assets.__ The fund must be held separate from all other money, funds and accounts, and all eligible investment earnings from fund assets must be credited to the fund.

2.__Fund purposes.__The authority shall administer the fund to provide direct loans or grants for all or part of certain energy conservation projects on an annual basis.__The authority shall identify energy conservation improvements that offer low-income and moderate-income households the highest paybacks.

3.__Application process.__The authority with assistance from the Finance Authority of Maine shall adopt rules establishing an

application process for energy conservation improvement grants and low-interest energy conservation loans.

4.__Rules.__The authority shall adopt rules necessary to administer the fund.__Rules adopted pursuant to this section are routine technical rules pursuant to Title 5, chapter 375, subchapter II-A.

5.__Report.__The authority shall submit to the joint standing committee of the Legislature having jurisdiction over business and economic development matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs an update on the fund by January 1, 2003 and every year thereafter.

Sec. E-2. Application; contingent on bond issue. This Part takes effect only if an $8,000,000 general revenue bond issue for low-interest loans or grants for energy conservation improvements for low- income and moderate-income citizens is approved by the voters of this State.

PART F

Sec. F-1. Maine State Housing Authority shall report on feasibility of establishing Office of Energy Conservation. The Maine State Housing Authority, with assistance from the State Planning Office, shall report to the joint standing committee of the Legislature having jurisdiction over utilities and energy matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs on the feasibility of establishing an Office of Energy Conservation within the Maine State Housing Authority. The new Office of Energy Conservation would be established with existing personnel performing similar functions elsewhere in State Government along with 2 new positions and would be charged with the following:

1. Providing a new comprehensive energy conservation plan for this State and updating it every 2 years;

2. Coordinating all state energy conservation programs;

3. Encouraging conservation of energy and development of this State's energy resources to assist citizens in surviving the winter heating season; and

4. Soliciting and incorporating advice and comment from affected stakeholders including representatives of the energy industry, utilities, energy conservation service providers, low- income households and environmental agencies.

This report must be submitted with accompanying legislation if necessary to the First Regular Session of the 120th Legislature by March 15, 2001.

PART G

Sec. G-1. Maine State Housing Authority shall annually study percentage of Low-income Home Energy Assistance Program funds used for weatherization services. The Maine State Housing Authority shall investigate in April of 2001, 2002 and 2003 the possibility of increasing the percentage of Low- income Home Energy Assistance Program funds from 15% up to as high as 25% for weatherization services.

PART H

Sec. H-1. 35-A MRSA §121 is enacted to read:

§121.__Effects of interruptible gas services

The Public Utilities Commission shall monitor the effects of interruptible gas services on the supply and price of home heating oil in this State.

PART I

Sec. I-1. State Planning Office shall conduct study regarding reduction of energy consumption. The State Planning Office shall conduct a study to determine whether this State can reduce its per capita residential energy consumption by 25% by 2011. Particular attention must be paid to low-income to moderate-income households that lack the financial and technical resources to identify energy conservation opportunities and to acquire the energy conservation goods and services needed to achieve significant savings. The State Planning Office shall report on requiring higher efficiency ratings for heating systems, appliances and energy building standards. The State Planning Office shall also analyze the possibility of requiring higher efficiency ratings for heating systems, appliances and energy building standards. The State Planning Office shall investigate the value of tax incentives for implementing measures identified in energy audits for energy conservation improvements for Maine citizens. The State Planning Office shall report to the joint standing committee of the Legislature having jurisdiction over taxation matters, the joint standing committee of the Legislature having jurisdiction over utilities and energy

matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs on establishing Maine energy independence programs and financing mechanisms to achieve this goal. The State Planning Office shall submit a report with accompanying legislation to the First Regular Session of the 120th Legislature by March 15, 2001.

Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved, unless otherwise indicated.

SUMMARY

This bill implements the recommendations of the Task Force to Reduce the Burden of Home Heating Costs on Low-income Households established in the Second Regular Session of the 119th Legislature by Resolve 1999, chapter 132. The bill does the following:

1. Establishes a summer "fill" program to provide low-income households that are eligible for fuel assistance through the Low- income Home Energy Assistance Program (LIHEAP) with an initial supply of fuel;

2. Requires the Maine State Housing Authority to identify the most effective way to provide adequate funding of the anticipated 25% nonfederal share of the weatherization program;

3. Establishes a program funded by a bond issue to allow low- income and middle-income citizens to obtain low-interest loans or grants for energy conservation improvements;

4. Requires the Maine State Housing Authority and the State Planning Office to investigate the possibility of establishing a separate Office of Energy Conservation within the Maine State Housing Authority;

5. Requires the Maine State Housing Authority to annually for 3 years investigate the possibility of increasing the percentage of LIHEAP funds for weatherization services;

6. Requires the Public Utilities Commission to monitor the effects of interruptible gas services on the supply and price of home heating oil; and

7. Requires the State Planning Office to conduct a study to determine whether the State of Maine can reduce its per capita residential energy consumption by 25% by 2011.