SEC. 214. BEST-IN-CLASS APPLIANCES DEPLOYMENT PROGRAM.

(a) In General- Not later than 1 year after the date of enactment of this Act, the Secretary of Energy, in consultation with the Administrator, shall establish a program to be known as the `Best-in-Class Appliances Deployment Program' to--

(1) provide bonus payments to retailers or distributors under subsection (c) for sales of best-in-class high-efficiency household appliance models, high-efficiency installed building equipment, and high-efficiency consumer electronics, with the goal of reducing life-cycle costs for consumers, encouraging innovation, and maximizing energy savings and public benefit;

(2) provide bounties under subsection (d) to retailers for the replacement, retirement, and recycling of old, inefficient, and environmentally harmful products; and

(3) provide premium awards under subsection (e) to manufacturers for developing and producing new Superefficient Best-in-Class Products.

(b) Designation of Best-in-Class Product Models-

(1) IN GENERAL- The Secretary of Energy shall designate product models of appliances, equipment, or electronics as Best-in-Class Product models. The Secretary shall publicly announce the Best-in-Class Product models designated under this subsection. The Secretary shall define product classes broadly and, except as provided in paragraph (2), shall designate as Best-in-Class Product models no more than the most efficient 10 percent of the commercially available product models in a class that demonstrate, as a group, a distinctly greater energy efficiency than the average energy efficiency of that class of appliances, equipment, or electronics. In designating models, the Secretary shall--

(A) identify commercially available models in the relevant class of products;

(B) identify the subgroup of those models that share the distinctly higher energy-efficiency characteristics that warrant designation as best-in-class; and

(C) add other models in that class to the list of Best-in-Class Product models as they demonstrate their ability to meet the higher-efficiency characteristics on which the designation was made.

(2) PERCENTAGE EXCEPTION- If there are fewer than 10 product models in a class of products, the Secretary may designate one or more of such models as Best-in-Class Products.

(3) REVIEW OF BEST-IN-CLASS STANDARDS- The Secretary shall review annually the product-specific criteria for designating, and the product models that qualify as, Best-in-Class Products and, after notice and a 30-day comment period, make upwards adjustments in the efficiency criteria as necessary to maintain an appropriate ratio of such product models to the total number of product models in the product class.

(c) Bonuses for Sales of Best-in-Class Products-

(1) IN GENERAL- The Secretary of Energy shall make bonus payments to retailers or, as provided in paragraph (5)(B), distributors for the sale of Best-in-Class Products.

(2) BONUS PROGRAM- The Secretary shall--

(A) publicly announce the availability and amount of the bonus to be paid for each sale of a Best-in-Class Product of a model designated under subsection (b); and

(B) make bonus payments in at least that amount for each Best-in-Class Product of that model sold during the 3-year period beginning on the date the model is designated under subsection (b).

(3) UPGRADE OF BEST-IN-CLASS PRODUCT ELIGIBILITY- In conducting a review under subsection (b)(3), the Secretary shall--

(A) consider designating as a Best-in-Class Product model a Superefficient Best-in-Class Product model that has been designated pursuant to subsection (e);

(B) announce any change in the bonus payment as necessary to increase the market share of Best-in-Class Product models;

(C) list models that will be eligible for bonuses in the new amount; and

(D) continue paying bonus payments at the original level, for the sale of any models that previously qualified as Best-in-Class Products but do not qualify at the new level, for the remainder of the 3-year period announced with the original designation.

(4) SIZE OF INDIVIDUAL BONUS PAYMENTS- (A) The size of each bonus payment under this subsection shall be the product of--

(i) an amount determined by the Secretary; and

(ii) the difference in energy consumption between the Best-in-Class Product and the average product in the product class.

(B) The Secretary shall determine the amount under subparagraph (A)(i) for each product type, in consultation with State and utility efficiency program administrators as well as the Administrator, based on estimates of the amount of bonus payment that would provide significant incentive to increase the market share of Best-in-Class Products.

(5) ELIGIBLE BONUS RECIPIENT- (A) The Secretary shall ensure that not more than 1 bonus payment is provided under this subsection for each Best-in-Class Product.

(B) The Secretary may make distributors eligible to receive bonus payments under this subsection for sales that are not to the final end-user, to the extent that the Secretary determines that for a particular product category distributors are well situated to increase sales of Best-in-Class Products.

(d) Bounties for Replacement, Retirement, and Recycling of Existing Low-Efficiency Products-

(1) IN GENERAL- The Secretary of Energy shall make bounty payments to retailers for the replacement, retirement, and recycling of older operating low-efficiency products that might otherwise continue in operation.

(2) BOUNTIES- Bounties shall be payable upon documentation that the sale of a Best-in-Class Product was accompanied by the replacement, retirement, and recycling of--

(A) an inefficient but still-functioning product; or

(B) a nonfunctioning product containing a refrigerant,

by the consumer to whom the Best-in-Class Product was sold.

(3) AMOUNT-

(A) FUNCTIONING PRODUCTS- The bounty payment payable under this subsection for a product described in paragraph (2)(A) shall be based on the difference between the estimated energy use of the product replaced and the energy use of an average new product in the product class, over the estimated remaining lifetime of the product that was replaced.

(B) NONFUNCTIONING PRODUCTS CONTAINING REFRIGERANTS- The bounty payment payable under this subsection for a product described in paragraph (2)(B) shall be in the amount that the Secretary of Energy, in consultation with the Administrator, determines is sufficient to promote the recycling of such products, up to the amount of bounty for a comparable product described in paragraph (2)(A).

(4) RETIREMENT- The Secretary shall ensure that no product for which a bounty is paid under this subsection is returned to active service, but that it is instead destroyed, and recycled to the extent feasible.

(5) RECYCLING APPLIANCES CONTAINING REFRIGERANTS- Exclusively for the purpose of implementing the bounty payment program for products containing a refrigerant under this section, the Administrator shall establish standards for environmentally responsible methods of recycling and disposal of refrigerant-containing appliances that, at a minimum, meet the requirements set by the Responsible Appliance Disposal (RAD) Program for refrigerant disposal. The Secretary shall ensure that such standards are met before a bounty payment is made under this subsection for a product containing a refrigerant. Nothing in this section shall be interpreted to alter the requirements of section 608 of the Clean Air Act or to relieve any person from complying with those requirements.

(e) Premium Awards for Development and Production of Superefficient Best-in-Class Products-

(1) IN GENERAL- (A) The Secretary of Energy shall provide premium awards to manufacturers for the development and production of Superefficient Best-in-Class Products. The Secretary shall set and periodically revise standards for eligibility of products for designation as a Superefficient Best-in-Class Product.

(B) The Secretary may establish a standard for a Superefficient Best-in-Class Product even if no product meeting that standard exists, if the Secretary has reasonable grounds to conclude that a mass-producible product could be made to meet that standard.

(C) The Secretary may also establish a Superefficient Best-in-Class Product standard that is met by one or more existing Best-in-Class Product models, if those product models have distinct energy efficiency attributes and performance characteristics that make them significantly better than other product models qualifying as best-in-class. The Secretary may not designate as Superefficient Best-in-Class Products under this subparagraph models that represent more than 10 percent of the currently qualifying Best-in-Class Product models.

(2) PREMIUM AWARDS- (A) The premium award payment provided to a manufacturer under this subsection shall be in addition to any bonus payments made under subsection (c).

(B) The amount of the premium award paid per unit of Superefficient Best-in-Class Products sold to retailers or distributors shall be the product of--

(i) an amount determined by the Secretary; and

(ii) the difference in energy consumption between the Superefficient Best-in-Class Product and the average product in the product class.

(C) The Secretary shall determine the amount under subparagraph (B)(i) for each product type, in consultation with State and utility efficiency program administrators as well as the Administrator, based on consideration of the present value to the Nation of the energy (and water or other resources or inputs) saved over the useful life of the product. The Secretary may also take into consideration the methods used to increase sales of qualifying products in determining such amount.

(D) The Secretary may adjust the value described in subparagraph (C) upward or downward as appropriate, including based on the effect of the premium awards on the sales of products in different classes that may be affected by the program under this subsection.

(E) Premium award payments shall be applied to sales of any Superefficient Best-in-Class Product for the first 3 years after designation as a Superefficient Best-in-Class Product.

(3) COORDINATION OF INCENTIVES- No product for which Federal tax credit is received under section 45M of the Internal Revenue Code of 1986 shall be eligible to receive premium award payments pursuant to this subsection.

(f) Reporting- The Secretary of Energy shall require, as a condition of receiving a bonus, bounty, or premium award under this section, that a report containing the following documentation be provided:

(1) For retailers and distributors, the number of units sold within each product type, and model-specific wholesale purchase prices and retail sale prices, on a monthly basis.

(2) For manufacturers, model-specific energy consumption data.

(3) For manufacturers, on an immediate basis, information concerning any product design or function changes that affect the energy consumption of the unit.

(4) The methods used to increase the sales of qualifying products.

(g) Monitoring and Verification Protocols- The Secretary of Energy shall establish monitoring and verification protocols for energy consumption tests for each product model and for sales of energy-efficient models.

(h) Disclosure- The Secretary of Energy may require that retailers and distributors disclose publicly and to consumers their participation in the program under this section.

(i) Cost-Effectiveness Requirement-

(1) REQUIREMENT- The Secretary of Energy shall make cost-effectiveness a top priority in designing the program under, and administering, this section, except that the cost-effectiveness of providing premium awards to manufacturers under subsection (e), in aggregate, may be lower by this measure than that of the bonuses and bounties to retailers and distributors under subsections (c) and (d).

(2) DEFINITIONS- In this subsection:

(A) COST-EFFECTIVENESS- The term `cost-effectiveness' means a measure of aggregate savings in the cost of energy over the lifetime of a product in relation to the cost to the Secretary of the bonuses, bounties, and premium awards provided under this section for a product.

(B) SAVINGS- The term `savings' means the cumulative megawatt-hours of electricity or million British thermal units of other fuels saved by a product during the projected useful life of the product, in comparison to projected energy consumption of the average product in the same class, taking into consideration the impact of any documented measures to replace, retire, and recycle low-efficiency products at the time of purchase of highly-efficient substitutes.

(j) Definitions- In this section--

(1) the term `distributor' mean an individual, organization, or company that sells products in multiple lots and not directly to end-users;

(2) the term `retailer' means an individual, organization, or company that sells products directly to end-users; and

(3) the term `Superefficient Best-in-Class Product' means a product that--

(A) can be mass produced; and

(B) achieves the highest level of efficiency that the Secretary of Energy finds can, given the current state of technology, be produced and sold commercially to mass-market consumers.

(k) Authorization of Appropriations- There are authorized to be appropriated $300,000,000 for each of the fiscal years 2010 through 2014 to the Secretary of Energy for purposes of this section, of which not more than 10 percent for any fiscal year may be expended on program administration.