ESBD_404455_1749755305036_Exhibit 6 - DOEHER_HOMES Narrative.pdf

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Narrative Document Template

IRA Section 50121: Home Efficiency Rebates June 2024

Contents Introduction

Home Efficiency Rebates State Programs (50121)

Use of Funds and Rebate Eligibility

Section 3.1.1: Use of Funds

Section 3.1.2: Rebate Conditions and Levels

Section 3.1.3: Low-Income Homes

Section 3.1.4: Community Benefits Plan

Section 3.1.5: Processing and Delivering Rebate Funds to Eligible Rebate Recipients

Section 3.1.6: Data Collection and Evaluation

Consumer Experience

Section 3.2.1: Education and Outreach Strategy

Section 3.2.2: Home Assessments

Section 3.2.3: Access to Residential Utility Data

Section 3.2.4: Project-Specif ic Energy Savings Calculations

Section 3.2.4.1: Calculating Modeled Energy Savings

Section 3.2.4.2: Calculating Measured Energy Savings

Section 3.2.5: Consumer Protection through Quality Assurance

Section 3.2.6: Post-Installation Certificate

Maximizing Rebate Impact

Section 3.3.1: Supporting the Clean Energy Economy Through Market Transformation.21

VERSION 2

Published on June 27, 2024

Modification Note: This version updates text in accordance with the Version 2 modifications of the Program Requirements & Application Instructions. This version makes clerical fixes, including reference corrections. Changes are highlighted in the text in yellow.

Section 3.3.2: Integrating with Other Programs

Section 3.3.3: Quick Starts

Introduction

This is an optional document that is not required by the ALRD. A state may use this to submit their ALRD 2 State Application.

This Narrative Document should demonstrate the state’s ability and intent to implement the program in accordance with the requirements of the ALRD and the Program Requirements document. The Narrative Document must provide a comprehensive framework and description of all aspects of the proposed rebate program(s). States may use existing programs/infrastructure to implement this work. States may not provide these funds to existing programs to implement non-rebate work.

The Narrative Document must be succinct, self-explanatory, and well-organized so that DOE reviewers can understand program design and delivery. A state must address the following in its application package and corresponding Standard Form 424 Application for Federal Assistance, Standard Form 424A Budget Information, and Budget Justification Workbook. A state may defer some responses to its State Implementation Blueprint, to be provided to DOE after award but prior to program launch. The questions are marked as such, and applicants should check the appropriate box if deferring their response. All other requirements are mandatory within the state application package. If there is no box offering the “Defer response to state

Implementation Blueprint” option, then it is required as part of the application package.

Identify whether the application is for a Quick Start program.

☐ Yes, this is for a Quick Start Program.

☒ No, this is not for a Quick Start Program.

Home Efficiency Rebates State Programs (50121)

Use of Funds and Rebate Eligibility

Section 3.1.1: Use of Funds

1. Provide which types of allowable costs the state proposes within each category of administrative funds and rebate funds and within those categories:

Texas plans to use administrative funds to cover the following types of activities. In sum, these estimated administrative funds total of $69,016,577.25 or 19.99% of the current formula funds for Texas for HOMES and are inclusive of the early administrative funds already awarded for a total administrative fund annual cost of $11,502,762.88(see also 1.a below).

• Program planning and design for $2,292,782.75 or $21.00 per project.

• The State Energy Conservation Office (SECO) will contract with an organization with expertise in designing and delivering efficiency programs, with proven success in market uptake, sound installations, income verification, and delivering benefits to low-income households. Depending on the initial organization’s experience reaching disadvantaged communities, the state may contract with another organization better suited to addressing this need.

• SECO program staff for $4,763,794.50 or $343.62 per project.

• SECO plans to hire four (4) full-time staff members, with the intent that two (2) staff members time will be split amongst the 50121 and 50122 awards. Our accounting systems can separately track these different funding sources and internal policies are in place to ensure the time is accurately tracked.

• Development of tools and systems for program administration, including websites, applications, rebate processing, and reporting for $6,410,000.00 or $58.70 per project.

• Texas plans to fund a program implementation contractor or a separate qualified entity to develop user interfaces and systems for households, contractors, and others to use to apply for rebates, submit required documentation, etc., including income verification.

• Depending on the interest of other state agencies with low-income programs, the state may also fund an IT firm to develop an application programming interface (API) that allows several low-income programs to automatically share information regarding their enrollees, thereby substantially expediting income verification.

• Program evaluation and consumer satisfaction surveys for $1,400,000.00 or $12.82 per project.

• SECO will conduct the required customer satisfaction questions included in the program requirements.

• Program monitoring and audits for $3,400,000.00 or $31.14 per project.

• In addition to state staff monitoring program delivery and overseeing the implementation contractor(s), the state may require outside assistance to respond to state or federal inquiries. The implementation contractor(s) and other providers (e.g., income verification services) will also be required to fulfill data reporting and analysis per the contract(s).

• Consumer protection functions including resolution procedures, data review, contractor management, installation standards, continuous improvement for $3,200,000.00 or $29.30 per project.

• In response to findings from periodic assessments of program performance (as well as any identified problems that arise throughout implementation), the state or its implementation contractor(s) will institute changes to address deficiencies in program delivery (or design).

• SECO will develop consumer protection guides or one-pagers that will be provided to all rebate applicants as one part of the consumer protection strategy.

• SECO created a dedicated email address SECO.Rebates@cpa.texas.gov and state staff are dedicated to respond to consumer questions and/or complaints.

• SECO staff will fulfill contractor management needs with regular reviews of program implementer/other contractor data submissions.

• Marketing, education, and outreach, potentially including the funding of local governments and place-based organizations to assist with these activities for $4,080,000.00 or $37.09 per project.

• SECO Held two community engagement sessions on August 27, 2024, and additional sessions are planned as the program design matures.

• SECO will conduct separate outreach to retailers, manufacturers, and distributors.

• SECO, potentially with assistance from its implementation contractors or outside experts and partners, will review and approve marketing and education information developed by the Program Implementer for homeowners, tenants, retailers, contractors, and others as needed.

• Implementation contract cost not including rebates and costs for activities directly related to delivery of rebate for $24,320,000.00 or $222.71 per project.

• The implementation contractor(s) will use administrative funds for data review and reporting, and to fulfill other programmatic management requirements.

• SECO oversight of implementation contractor and other service provider costs/contract management; data review and reporting.

• Contractor training for $4,400,000.00 or $40.29 per project.

• Contractor training and/or review of a contractor’s certification(s) will be required before a contractor is placed on the qualified contractor list.

• Training specifically to assist contractors in participating in the rebate program.

• Activities to improve access to rebates, facilitating leverage of private funds and financing mechanisms (e.g., loan loss reserves, interest rate reductions) where beneficial to efficiency and/or electrification projects for $14,750,000.00 or $135.07 per project.

• Depending on availability of resources, the state will engage financing organizations (e.g., green banks) to assist in making low-cost financing (or other incentives including the potential to establish and apply loan loss reserves) available to rebate applicants and providers (e.g., contractors).

• Depending on availability of resources, SECO and/or its implementation contractor(s) may provide technical assistance either directly or through specialized organizations to assist entities focused on serving disadvantaged communities and/or other priorities.

Texas certifies that costs will not be duplicated on the Home Efficiency Rebates (Section 50122) award, or other awards, and are not duplicative from costs captured in the Indirect Rates.

a. Provide the total amount of estimated administrative funds to be expended annually:

$9,859,511.04 based on $69,016,577.25 divided by seven (7) years. September 1, 2024, through September 30, 2031.

b. The total amount of estimated project-related costs as a portion of the rebate funds to be expended annually.

2. If requesting additional funds for project-related activities, describe and justify each activity and associated budget in the budget justification worksheet as well as below.

N/A

3. Describe how the state will manage and ensure that rebate minimums and administrative maximums are adhered to over the duration of the program.

Texas intends to use the DOE-provided sample response as a framework for this response.

Budgeting and Forecasting Tools

Texas will utilize a combination of budgeting and forecasting tools. Texas plans to use the DOE Rebate Tracking and Reporting Tool, which offers an API that can anticipated to be integrated with the Implementor’s existing systems. This will help track recipient rebate statuses, work within established program spending limits, minimize costs and errors, maintain databases, and ensure rebate amounts comply with program requirements. Texas is motivated to utilize resources that provide real-time data and reporting to maintain program quality and efficiency. The system will assign rebate amounts to products based on the applicant’s income level and the modeled or measured savings associated with allowable improvements.

Administrative Controls

Texas understands the importance of developing methods to ensure administrative maximums are adhered to over the duration of the program. To achieve this and reduce administrative costs and project-related activities, Texas will seek “smart” technology investigative systems to automatically read uploaded documents for verification and other purposes Once an Implementor is selected, the

State Energy Conservation Office (SECO) will approve forecasting tools and accounting practices in order to reduce administrative costs where possible. Texas will closely track and report this spending bucket as well as rebate funds and contractor incentive funds and aims to follow Generally Accepted

Accounting Principles and conduct internal audits. These expectations will be extended to the selected Implementor. By implementing this budgeting and forecasting tools, process controls, and accounting practices, Texas will effectively manage and ensure that rebate minimums and administrative maximums are adhered to over the duration of the program.

Process Control and Systems

Texas will implement process controls to track administrative costs and rebate funds expended. The

$0.00 state will utilize the DOE Rebate Tracking and Reporting Tool’s database that contains all previously issued rebates to individual residential dwellings, ensuring that rebates are not duplicated for the same address. The system will also track the amount of rebate funds committed to date and only approve new requests if sufficient funds remain. When a household receives its final invoice and the rebate is issued, the amount will be updated via connection to the DOE Rebate Tracking and

Reporting Tool. The state will monitor these rebatea amounts relative to administrative spending forecasts.

4. Confirm that the state will have a process for handling returns of rebated items as applicable in the Consumer Protection Plan.

☒ Yes, the state confirms the above statement.

Section 3.1.2: Rebate Conditions and Levels

5. Provide the maximum rebate amounts that will be offered within the allowances of the

Home Efficiency Rebates requirements.

Note: States may increase the maximum rebate amounts available for low-income households, but states cannot set lower rebates than specified in Section 3.1.2.

Texas intends to use the DOE-provided sample response outlined in this response.

Modeled Path. For households with incomes greater than 80% AMI, our state will use the maximum levels noted in the Program Requirements and Application Instructions Table 2.

Measured Path. For households with incomes greater than 80% AMI, our state will use the maximum levels noted in the Program Requirements and Application Instructions Table 2.

6. Identify the allowable project costs for determining rebate levels when based on project cost.

☒ Defer response to State Implementation Blueprint.

For each project, Texas will require, but not limited to:

• Line-item costs of eligible units (i.e. Heat Pumps), equipment, and materials

• Labor costs

• Household income levels

Allowable project costs include all energy efficiency improvements (equipment and installation/labor) associated with the anticipated energy savings. For households with incomes less than 80% AMI, allowable project costs may also include related project costs (e.g., home assessments, energy audits, and project quality assurance) given that low-income households will not be able to pay for these additional requirements and do not have access to other programmatic resources to cover these costs.

The details for how, when, and what exact items Texas will require will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by Texas State Energy Conservation Office (SECO).

7. List the documentation requirements related to project costs from homeowners, contractors, and/or aggregators.

☒ Defer response to State Implementation Blueprint.

Texas will require documentation such as invoices, model numbers, geotagged photos, eligibility documentation, and other items requested in the program by participants. Details on how, when, and what exact items Texas will require these will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO.

8. Describe how homeowners and multifamily building owners will be informed of additional program funding available from non-federal funds and grants.

Texas will work with local governments, utilities, power providers, and retailers to educate the public of the different funding that may be available to them. The details for how and what items Texas will use in these campaigns will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO.

9. Provide the date after which upgrade projects must be completed for the purposes of being eligible for a rebate under the state program.

Timeliness of projects are important to the success of any grant program. The details on exact timelines Texas will require will be included in The State Implementation Blueprint after the

10. Identify whether, for low-income multifamily buildings, the state will calculate the “per dwelling unit” rebate amount at the less than 80% AMI amount for all units or based on the ratio of LMI to non-LMI units.

☒ At the less than 80% AMI amount for all units

☐ Based on the ratio of LMI to non-LMI units

11. Describe how the state plans to value energy savings based on time, location, or greenhouse gas emissions. The application must demonstrate a strategy for either prioritizing, or requiring in program rules:

☐ Retrofits that will have a disproportionate benefit based on the time or location of energy savings; or

☐ A targeted approach to prioritize reduction in greenhouse gas emissions. Valuing savings as part of this plan does not replace or count towards the requirements to demonstrate a minimum percentage energy savings for the household on a modeled or measured basis.

☒ Defer response to State Implementation Blueprint.

Texas is a very large state with different climates from Brownsville to piney woods of East Texas, to the wide-open planes of the Panhandle. The details for how Texas will value the energy savings from the various eligible products to the geographical location of installation will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO. Texas will determine which targeted approach is needed to achieve the set-out goals of the program at that time and reserves the right to change the targets based on real world implementation and participation of eligible participants.

12. Describe how the state plans to ensure and verify ENERGY STAR certification at the time of installation for heating, cooling, and water heating products.

Texas intends to use the DOE-provided sample response outline in this response.

Ensuring any qualifying equipment is ENERGY STAR begins with clear education and training of implementers and contractors on the program requirements. Using ENERGY STAR equipment whenever applicable will be a stated requirement in our trade ally participation agreements.

Texas plans to ensure that major distributors and retailers understand the rebate requirements and ask them to refer to the EPA’s Qualified Products Lists on a regular basis, or preferably, have an automated method of keeping the information up to date through a link to EPA’s Qualified Products Lists if available.

Texas will require installers to include geo-coded installation photos of equipment installed including photos of data plates, photos of the installed equipment model numbers (including indoor and outdoor units for split systems), and AHRI certification numbers for all heating, cooling, and water heating projects.

13. A state interested in offering higher rebates amounts than those listed in Tables 2 and 3 for low-income households must describe (in the below box) the state approach for balancing higher rebate amounts (serving fewer households) with the required allocation to serve low-income households and must propose the maximum rebate amount that would be available to low-income households both in terms of percentage of project cost and dollar amount for low-income households. Please provide the amounts below or check N/A if not applicable.

☒ N/A. State will use the maximum rebates listed in Tables 2 and 3.

i. Receive an energy upgrade that is modeled to save at least 20% of energy.

• % of project cost:

• $ amount for low-income household:

ii. Receive an energy upgrade that is modeled to save at least 35% of energy.

• % of project cost:

• $ amount for low-income household:

14. Provide details on what portion(s) of the total rebate will be provided to the homeowner/building owner compared with the contractor/aggregator.

Texas understands that the amount of rebate available to the different participations is key to the success in participation in the program. The details on how much to apportion to each participant in the program from homeowners to contractors for each project Texas will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO.

A. Describe what caps the state will place on contractor/aggregators in terms of savings exceeding the amount associated with the rebate provided to the homeowner (e.g., allowable percentage above the rebate provided to homeowner).

Texas will place caps on contractor/aggregators to ensure program integrity. The exact caps and how and when Texas will require the caps to be enacted will be included in The State by SECO.

15. Describe what systems will be put into place to reserve funds for each measured project, given the need to remit payment to the contractor/aggregator after 9-12 months of usage data post-energy upgrade is available.

Texas will withhold the final payment for a project until the 9-12 month of usage data is reported and verified. The details for the final payment trigger that Texas will require of the contractor/aggregation will be included in The State Implementation Blueprint after the

16. For the measured program path, describe how the state will calculate rebate levels based on average home energy usage in the state.1

Texas will implement the modeled path for the majority of the program participants. However, Texas reserves the right to use the measured path for auditing, monitoring, and various spot-checks on selected participants to ensure program entirety. The details for how, when, and what exact measure calculations Texas will use will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO.

17. For the measured program path, within what timeframe will the state provide rebates to eligible rebate recipients?

Texas will implement the modeled path for the majority of the program participants. However, Texas reserves the right to use the measured path for auditing, monitoring, and various spot-checks on selected participants to ensure program entirety. The details for how, when, and what exact measure calculations Texas will use will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO. This includes the withholding of funds until the reporting requirements are met.

Section 3.1.3: Low-Income Homes

18. What portion of the rebate funds will the state reserve for low-income households and multi-family households?

The state plans to reserve, at a minimum, 40% and 10% of rebate funds for low-income households and multifamily households, respectively. 40% meets and exceeds the percentage of low-income households in the state of Texas, which is 38.7% as reflected in Program Requirements Table 13.

19. Describe how the state will define household income for verification purposes (e.g., using prior year income).

Texas will use categorical eligibility to establish participation eligibility in the program. In the case of auditing or monitoring the effectiveness of the program, Texas will define household income as cash receipts earned and/or received by all Household members 18 years of age and older before taxes during applicable tax year(s), but not the excluded income listed in subsection Texas Administrative Code Title 10, Part 1, Chapter 6, Subchapter A, Rule §6.4. Income will be based on the Gross Annual Income.

20. For single-family households, describe what combination of methods will be used for claimants to be able to establish their household income for income qualifications.

States may select the following options;

☒ Documentation of household income (for example, 1040)

☒ Documentation of enrollment in a pre-qualifying program

☐ Self-attestation of either income level of enrollment in pre-qualifying program

Texas will recognize any of the following documentation for income to establish that a household is eligible: 1040 from prior year, W2 forms, and wage statements/payroll.

Texas also plans to offer categorical eligibility for the following programs listed in Tables A-3 and A-4 in the Appendix provided by DOE. Listed below are the following programs Texas is considering (at a minimum) to allow categorical eligibility:

▪ Low Income Home Energy Assistance Program (LIHEAP)

▪ Medicaid

▪ Supplemental Nutrition Assistance Program (SNAP)

▪ Head Start

▪ Lifeline Support for Affordable Communications (Lifeline)

▪ Food Distribution Program on Indian Reservations (FDPIR)

▪ National School Lunch Program – Free (NSLP)

▪ Housing Improvement Program (HIP)

▪ Housing Opportunities for Persons with AIDS

▪ Supplemental Security Income (SSI)

▪ Weatherization Assistance Program (WAP) add conditions o Applicants must demonstrate 80% < 200% Federal Poverty Level (FPL) if using to quality for higher rebates.

▪ Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) o Applicants must demonstrate 80% AMI < 185% FPL if using to qualify for higher rebates.

The Implementor will confirm this list with SECO approval.

21. For multifamily buildings, describe what combination of methods will be used to verify that at least 50% of dwelling units consist of households with incomes less than 80% AMI.

Texas is currently researching different way on how to verify occupancy AMI, and is deferring the decision on how Texas will verify occupancy AMI until partners in implementing the program have a chance to weigh in. The details for how Texas will verify AMI occupancy will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is

22. Please confirm the following:

• Claimant will be required to note the number of individuals who occupy the dwelling unit.

☒ Yes, the state confirms the above statement.

• Claimant will be required to sign a statement attesting to the validity of all information provided (e.g., enrollment documents, household income, number offull-time occupants) irrespective of the method of income qualification (e.g., categorical eligibility, self-attestation).

• State’s intake system for users to provide income information will display the 80%

AMI value for that household’s ZIP code and household size to assist the household in comparing its income with those levels prior to signing statements regarding their income.

☒ Yes, the state confirms the above statement.

23. Describe how the 80% AMI levels for each location will be kept up to date (use DOE-provided API, other) and linked to DOE systems. Confirm that these levels will correspond to (a) the address of the home at which rebates will be applied and (b) the applicable number of household occupants.

Texas is leaning towards using the DOE-provided API to keep AMI locations up to date. Texas wants to consult with the selected Implementor on using the DOE-provided API or if another method would best suit the needs of Texas. Texas is deferring the final proposal to the Blueprint after the process is approved by SECO.

24. Confirm that the state will:

• Review information provided to support income eligibility for all applicants applying for higher income-based rebate levels.

☒ Yes, the state confirms the above statement.

• Take steps to verify income eligibility for all applications (100%) that use self-attestation to support income eligibility (e.g., confirm enrollment in at least one program that the applicant asserted enrollment in; confirm household income via

IVES or other methods as applicable).

☒ Yes, the state confirms the above statement.

a. After 6 months and not longer than 1 year after program launch, report to DOE the percentage and number of applicants that received rebates but were subsequently found to not meet eligibility requirements.

☒ Yes, the state confirms the above statement.

b. Work with the state's DOE project officer to institute additional safeguards or determine if a lesser level of review for applicants using self -attestation is justified depending on the percentage/number of rebates issued without meeting eligibility requirements.

☒ Yes, the state confirms the above statement.

If applicable, propose the types of information that the state will provide to DOE to warrant reducing this requirement (e.g., allowing implementers to verify income of a subset of claimants through random sampling).

☒ N/A. The state will not reduce this requirement.

25. Provide additional information as needed to demonstrate that the proposed approaches for income verification will address all types of households; not create undue burden for claimants; and include safeguards to minimize error and abuse in the process of verifying income.

By offering a variety of methods to demonstrate eligibility, including a wide range of programs recognized as providing categorical eligibility, Texas believes that those in the lowest income brackets will have a range of options to demonstrate their eligibility.

As a safeguard to discourage applicants from falsifying income or categorical information, all applicants, when submitting verification information, will be required to sign an affidavit as well as a confirmation statement (specific language to be developed by Implementor with SECO approval.

To further minimize this error in this process, Texas will conduct a review of each applicant’s income information prior to issuing a rebate coupon and giving the go-ahead to begin work. This delayed approval is workable given the complexity of whole home retrofits. Furthermore, Texas will encourage applicants to provide income information as soon as possible so that review can be concurrent with other steps.

26. Describe how the state will verify (confirm legitimacy) of income information for all claimants (e.g., verification within 2 days through IRS, cross-check with enrollment databases of approved programs, calls to employers). If applicable, propose the types of information that the state will provide to DOE to warrant reducing this requirement (e.g., allowing implementers to verify income of a subset of claimants through random sampling).

☐ N/A. The state will not reduce this requirement.

As stated in the proposed response to question 25, Texas is aware of the importance of verifying income of recipients for program integrity and that guardrails need to be implemented. Equally as important, though, is the ease of applying to the program and not creating an unnecessary burden to applicants that may be a barrier to the application process. Many of the approaches to verify income are resource intensive and Texas is looking into the balance of these needs to understand what approach will suit the need of Texas. The selected Implementor will provide more details of the income verification requirements in The State Implementation Blueprint with the processes

27. Describe how the state will resolve instances when rebates are provided to those who have falsified their incomes.

Texas will implement a Corrective Action Plan that will establish remedies for those that have been awarded funds from this program and have falsified their incomes. The Corrective Action Plan will include measures such as requiring the entity to increase or improve their reporting, refunding of grant funds, to the most egregious offences being referred to the Texas Attorney General’s Office for consideration. The selected Implementor will provide more details of the Corrective Action Plan in The State Implementation Blueprint with the processes approved by SECO.

28. If proposing to allow self-attestation as a means for initial income qualification, provide a detailed description of how and when this approach will be used. Include statements, language, and detailed information regarding follow-up steps that will be used for this process. Additional topics to address include:

• Describe how those applying for rebates will be warned of potential liability associated with falsifying information.

• Explain how signed statements of self-attestation will be securely stored.

• Identify what level of falsified attestations will signal that the system needs to shut down either permanently or be restarted only after sufficient improvements are made.

☐ Defer response to State Implementation Blueprint.

☒ N/A. The state has chosen not to allow self-attestation.

29. Describe how the state program will verify applicant information provided to substantiate income eligibility, including systems that will be used to verify, where applicable, that at least one member of a household has been enrolled in a program included within the Federal Programs Approved for Categorical Eligibility document or other state-proposed approved by DOE within the prior 12 months.

Texas is aware of the importance of verifying income of recipients for program integrity and that guardrails need to be implemented. Equally as important, though, is the ease of applying to the program and not creating an unnecessary burden to applicants that may be a barrier to the application process. Texas is looking into the balance of these two needs to understand what approach will suit the need of Texas. The selected Implementor will apply a variety of means to verify categorical enrollment which may include visual review of documentation, technological automation, and communication with the programs. Further details will be included in the Blueprint.

30. If applicable, identify the federal or other programs by which the state plans to allow categorical eligibility.

☒ N/A. The state will not propose additional federal or other programs to be considered for categorical eligibility.

Texas plans to offer categorical eligibility for the following programs listed in Tables A-3 and A-4 in the Appendix provided by DOE. Listed below are the following programs Texas is considering (at a minimum) to allow categorical eligibility:

Single-family:

• Low Income Home Energy Assistance Program (LIHEAP)

• Medicaid

• Supplemental Nutrition Assistance Program (SNAP)

• Head Start

• Lifeline Support for Affordable Communications (Lifeline)

• Food Distribution Program on Indian Reservations (FDPIR)

• National School Lunch Program – Free (NSLP)

• Housing Improvement Program (HIP)

• Housing Opportunities for Persons with AIDS

• Supplemental Security Income (SSI)

• Weatherization Assistance Program (WAP) add conditions

▪ Applicants must demonstrate 80% < 200% Federal Poverty Level (FPL) if using to quality for higher rebates.

• Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

▪ Applicants must demonstrate 80% AMI < 185% FPL if using to qualify for higher rebates.

Multi-family:

• Public Housing (housing owned and operated by Public Housing Authorities)

• Privately-owned multifamily buildings receiving project-based assistance (Section

8, Section 202, Section 811)

• Section 42 Low Income Housing Tax Credit (LIHTC)

31. If applicable, propose any additional federal or other programs to be considered for categorical eligibility. For any programs not already approved, describe how the program’s eligibility aligns with the Section 50121 income requirements.

☒ N/A. The state will not propose additional federal or other programs to be considered for categorical eligibility.

Defer response to State Implementation Blueprint.

32. Identify whether the state requests authorization to allow use of categorical eligibility determinations based on program participation outside of a one -year period (e.g., proof of enrollment within the past 12 months).

☐ Yes, the state requests authorization to allow use of categorical eligibility determinations based on program participation outside of a one -year period.

☐ N/A. The state does not request authorization to allow use of categorical eligibility determinations based on program participation outside of a one-year period.

If yes, explain the state’s proposal and describe the rationale.

Texas is inclined to only allow categorical eligibility determinations based on program participation within a one-year period, but will be deferring the decision to the Blueprint to include Implementor guidance and allow for program changes based on need and participation.

33. Identify whether the state requests authorization to allow categorical eligibility for a program in a way that is not consistent with the “level of categorical eligibility” listed in the document Federal Programs Approved for Categorical Eligibility. For each deviation requested, propose and provide documentation to justify the requested change.

Documentation must demonstrate that the state imposes income requirements equivalent to or less than 80% AMI.

☐ Defer response to State Implementation Blueprint.

☒ N/A. The state will not allow categorical eligibility for a program in a way that is not consistent with the “level of categorical eligibility” listed in the document Federal

Programs Approved for Categorical Eligibility.

The state will not allow categorical eligibility for a program in a way that is not consistent with the level of categorical eligibility listed in the document Federal Programs Approved for Categorical Eligibility.

34. Provide a brief description of the procedures and penalties the state will provide to ensure that renters are not subject to unjustified rent increases.

For all tenant-occupied properties that receive higher rebate amounts available only to households with incomes less than 80% AMI, Texas will require the building owner to sign a statement acknowledging (at a minimum):

• The owner agrees to rent the dwelling unit to a low-income tenant.

• The owner agrees not to evict a tenant to obtain higher rent tenants based upon the improvements.

• The owner agrees to not increase the rent of any tenant in the building as a result of the energy improvements with exception of increases to recover actual increases in property taxes and/or specified operating expenses and maintenance costs.

• The owner agrees that if the property is sold within a specified number of years (Implementor will establish time period with SECO approval) of receipt of the rebates, the aforementioned conditions apply to the new owner and must be part of the purchase agreement.

• In the event that the owner does not comply, the owner must refund the rebate.

• The owner will provide written notice to tenants explaining their rights and the building owner’s obligations (e.g., add an addendum to the lease).

• In the event the owner does not comply, the owner must refund the rebate and will be subject to penalities and enforcement commensurate to their actions:

▪ A fine/penalty in addition to recovery of the rebated amount.

▪ Damages and attorney fees recoverable by tenants.

Texas will provide contact information for tenants to notify the state of breaches of to this agreement. Texas will also include this information in the consumer education campaign, so tenants are aware of their rights under the applicable state law.

35. Explain how the state will identify eligible contractors or aggregators and what tools will be used to pay the $200 disadvantaged community incentive.

Texas understands that paying contractors or aggregators $200 as a disadvantaged community incentive is an important piece of increasing program participation. The selected Implementor will provide more details of the tools which will trigger payment in The State Implementation Blueprint with the processes approved by SECO.

Section 3.1.4: Community Benefits Plan

36. Describe how the state program will define a disadvantaged community.

If not using the default disadvantaged community definition (low-income households located in a disadvantaged community identified by the CEJST), a state must explain how the proposed definition will meet the following three criteria as described in DOE

J40 implementation guidance:2

• The communities of concern identified by the state tool or definition must conform to the definition of communities established in U.S. Office of Management and Budget

(OMB) guidance:

o a group of individuals living in geographic proximity to one another that experiences common conditions.

o a geographically dispersed set of individuals (such as migrant workers or

Native Americans) that experiences common conditions.

• The state tool or definition must consider two or more of the following indicato rs when identifying communities that should be classified as disadvantaged for the purposes of directing federal investments under Justice40:

o Low income, high and/or persistent poverty o High unemployment and underemployment o Racial and ethnic residential segregation, particularly where the segregation stems from discrimination by government entities o Linguistic isolation o High housing cost burden and substandard housing o Distressed neighborhoods o High transportation cost burden and/or low transportation access o Disproportionate environmental stressor burden and high cumulative impacts o Limited water and sanitation access and affordability o Disproportionate impacts from climate change o High energy cost burden and low energy access o Jobs lost through the energy transition o Access to healthcare

• The communities of concern identified by the state tool or definition must be currently mapped in software or must be easily overlayed in GIS so that communities can be easily identified by stakeholders.

The state will use the DOE-provided definition of disadvantaged communities and use the federally issued CEJST map to identify disadvantaged communities.

Section 3.1.5: Processing and Delivering Rebate Funds to Eligible Rebate Recipients

37. Describe what types of systems will be put into place to allow effective processing of rebates.

Texas understands that processing rebates in a timely and efficient manner is extremely important for the program’s success. The details for the systems to implement the program that Texas will require will be included in The State Implementation Blueprint after the Implementor for Texas is selected and the process is approved by SECO.

38. Describe how the state will ensure processing of rebates within required timeframes

(e.g., through a processing company, through program implementers, or other entities or methods). Include information on corrective actions that the state will implement in the event of lengthier processing times.

Similar to the answers in questions 27 and 37, Texas understands that processing rebates in a timely and efficient manner is extremely important for the program’s success. Texas will implement a Corrective Action Plan to address the issues of noncompliance to entities that have been awarded funds from this program. The plan will include measures such as requiring the entity to increase or improve their reporting, to the return of grant funds, to the most egregious offences being referred to the Texas Attorney General’s Office for consideration. The selected Implementor will provide more details of the Corrective Acton Plan in The State Implementation Blueprint with the processes approved by SECO.

39. Describe how the proposed processing system will be integrated with a system for processing rebates under Section 50122. Note if the state plans to use separate systems.

☐ N/A. The state is not planning to run a 50122 program.

Texas and its Implementor will develop a system that will integrate with 50122 while keeping funds/cost siloed into the separate programs. The selected Implementor will provide more details of the requirements in The State Implementation Blueprint with the processes approved by SECO.

40. If the state does NOT intend to use a federally provided web-based tool to determine whether a home is in a disadvantaged community, confirm that the state will provide the

ZIP codes or a preferred more granular geography (e.g., census tract) with all disadvantaged communities as defined by the state to the DOE system.

☐ Yes, the state confirms the above statement.

☒ N/A. The state will use a DOE-provided web-based tool to determine whether a home is in a disadvantaged community.

41. Confirm that the state system will link to DOE-provided systems via Application

Programming Interface (API).

☒ Yes, the state confirms the above statement.

Section 3.1.6: Data Collection and Evaluation

42. Confirm that the state will submit a Privacy and Security Risk Assessment in the State

Implementation Blueprint.

☐ Yes, the state confirms the above statement and will include it with this narrative document.

☒ Yes, the state confirms the above statement but defers a response to State

Implementation Blueprint.

Texas understands the importance of privacy protection and implementing a quality

Security Risk Assessment will ensure personal data and other protected information are protected. Texas will extend expectations to the selected Implementor, and the details of The Security Risk Assessment will be included in the Blueprint after Texas selects an Implementor and the process is approved by SECO.

43. Explain how data will be protected, specifically addressing security measures and privacy measures.

Texas understands the importance of data protection and will extend expectations to the selected Implementor and program team. More details of security and privacy measures will be addressed in the Blueprint after Texas selects an Implementor and the process is approved by SECO.

Texas is committed to protecting the data and other privacy measures across all programs of the State. Texas will require the Implementor to enact measures that meet the standards Texas has already set in place, including but not limited to:

a. Required Cybersecurity Training;

b. All data must be housed within the Continental United States;

c. Any data transmitted must be encrypted;

d. The implementor must provide a Privacy and Security Plan; and

e. All applicable State and Federal Regulations will be adhered to.

The selected Implementor will provide more details of the protective processes Texas will require in The State Implementation Blueprint with the processes approved by SECO.

44. Provide documentation of the processes to monitor, identify, and address security and privacy threats.

Texas will include details, such as data monitoring methods, privacy/data breach remedies, contractor and Implementor data security expectations, in the Privacy and Security Risk Assessment which will be included in the Blueprint.

Texas is committed to protect data, privacy, and other important protective information across all programs of the State. Texas will require the Implementor to enact measures that meet the standards to counter threats, both internal and external, Texas has already set in place, including but not limited to:

a. Required Cybersecurity Training;

b. All data must be housed within the Continental United States;

c. Any data transmitted must be encrypted;

d. The implementor must provide a Privacy and Security Plan; and

e. All applicable State and Federal Regulations will be adhered to.

The selected Implementor will provide more details of the protective processes Texas will require in the State Implementation Blueprint with the processes approved by SECO.

45. Confirm that the state will require billing data release and describe how the state will gain access to billing data for program requirements and program evaluation.

☐ Yes, the state confirms the above statement.

Texas will initiate work on utility data sharing agreements and has already engaged with Texas utilities. Texas will require rebate applicants to state in their reservation whether they consent for Texas to access their billing data through data sharing agreements we have established with utilities. Consent will be a requirement for all participants. Texas will provide more detail on this in the State Implementation Blueprint.

Texas understands that billing data is valuable information in evaluating the success of the program. The selected Implementor will provide more details for Texas’ billing data requirements in The State Implementation Blueprint with the process is approved by SECO.

46. Confirm that the state will collect the required data and cooperate in program evaluation processes as listed in section 3.1.6.3.

47. Confirm if the state is planning to conduct its own evaluation, and if so, what type(s) of evaluations.

☐ Yes, the state is planning to conduct its own evaluation. (Describe types of evaluations).

If yes, confirm that the state will:

• Cooperate with DOE to meet all the requirements listed in Section 3.1.6.3.

☐ Yes, the state confirms the above statement.

• Submit an evaluation plan for DOE review within three months of program launch.

☐ Yes, the state confirms the above statement.

• Provide results to DOE.

☐ Yes, the state confirms the above statement.

☒ N/A. The state does not plan to conduct its own evaluation.

48. If the state plans to conduct evaluations on its programs, describe the evaluation objectives, high level work plan, and timing of the evaluations and whether the state would request to be excluded from DOE-led evaluations.

Defer response to State Implementation Blueprint.

☒ N/A. The state does not plan to conduct its own evaluation.

Consumer Experience

Section 3.2.1: Education and Outreach Strategy

49. Confirm that the state will develop and submit an Education and Outreach Strategy consistent with Section 3.2.1.

☐ Yes, the state confirms the above statement and will include it with this narrative document.

The selected Implementor will provide more details of Texas’ Education and Outreach Strategy in the State Implementation Blueprint with the processes approved by SECO.

Section 3.2.2: Home Assessments

50. Describe the processes and procedures for conducting home assessments that meet program requirements.

Texas will work with the selected Implementor to develop training of aggregators/contracts processes and procedures for conducting home assessments that meet program requirements.

These procedures will be included in the State Implementation Blueprint with SECO approval.

51. Describe how home assessment data and results will be verified for accuracy.

Texas will work with the selected Implementor to develop verification requirements/guideline for home assessment data and results. These procedures will be included in the State Implementation Blueprint with SECO approval.

52. Describe what processes will be put in place for home assessments for multifamily buildings, including for energy used by common areas.

Texas will work…