[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6213 Referred in Senate (RFS)]
112th CONGRESS
2d Session
H. R. 6213
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 19, 2012
Received; read twice and referred to the Committee on Energy and
Natural Resources
_______________________________________________________________________
AN ACT
To limit further taxpayer exposure from the loan guarantee program
established under title XVII of the Energy Policy Act of 2005.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``No More Solyndras Act''.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) President Obama took office amidst a weak economy and
high unemployment, yet he remained committed to advancing an
expansive ``green jobs'' agenda that received substantial
funding with the passage of the American Recovery and
Reinvestment Act of 2009, commonly known as the stimulus
package.
(2) The stimulus package allocated $90 billion to various
green energy programs, and related appropriations provided $47
billion for loan guarantees authorized under title XVII of the
Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.).
(3) Such title XVII authorized the Secretary of Energy to
issue loan guarantees for projects that avoid, reduce, or
sequester air pollutants or greenhouse gases and employ new or
significantly improved technologies compared with commercial
technologies in service at the time the guarantee is issued.
(4) Loan guarantees issued under such title XVII were
required to provide a reasonable prospect of repayment and were
expressly required to be subject to the condition that the
obligation is not subordinate to other financing.
(5) The stimulus package expanded such title XVII by adding
section 1705 to include projects that use commercial technology
for renewable energy systems, electric power transmission
systems, and leading-edge biofuels projects and by
appropriating $6,000,000,000 in funding to pay the credit
subsidy costs for section 1705 loan guarantees for projects
that commence construction no later than September 30, 2011.
(6) The Department of Energy, since the enactment of the
stimulus package, has issued loan guarantees under such title
XVII for 28 projects totaling $15,100,000,000 under the section
1705 program, and, according to the Government Accountability
Office, issued conditional loan guarantees for four projects
totaling $4,400,000,000 under the section 1705 program and four
projects totaling $10,600,000,000 under the section 1703
program.
(7) Three of the first five companies that received section
1705 loan guarantees for their projects, Solyndra, Inc., Beacon
Power Corporation, and Abound Solar, Inc., have declared
bankruptcy.
(8) The bankruptcy of the first section 1705 loan guarantee
recipient, Solyndra, Inc., could result in a loss to taxpayers
of over $530,000,000.
(9) The investigation of the Solyndra loan guarantee by the
Committee on Energy and Commerce has demonstrated that the
review in 2009 of the Solyndra application by the Department of
Energy and the Office of Management and Budget was driven by
politics and ideology and divorced from economic reality where
the Department of Energy ignored concerns about the company's
financial condition and market for its products.
(10) Despite an express provision in such title XVII
prohibiting subordination of the United States taxpayers'
financial interest, the Department of Energy restructured the
Solyndra loan guarantee in February 2011, resulting in the
taxpayers losing priority to Solyndra's investors in the event
of a default.
(11) The Inspector General of the Department of the
Treasury concluded that it was unclear whether the Department
of Energy's consultation requirement with the Secretary of the
Treasury on the Solyndra loan guarantee was met; that the
consultation that did occur was rushed with the Department of
the Treasury expressing that ``the train really has left the
station on this deal''; and that no documentation was retained
as to how the Department of the Treasury's serious concerns
with the loan guarantee were addressed.
(12) The Government Accountability Office concluded that
the Department of Energy Loan Guarantee Program under title
XVII has treated applicants inconsistently; that the Department
of Energy did not follow its own process for reviewing
applications and documenting its analysis and decisions,
increasing the likelihood of taxpayer exposure to financial
risk from a default; and that the Department of Energy's
absence of adequate documentation made it difficult for the
Department to defend its decisions on loan guarantees as sound
and fair.
(13) A memorandum prepared for the President dated October
25, 2010, from Carol Browner, Ron Klain, and Larry Summers,
principal advisors to the President, noted the risk presented
by loan guarantee projects because most of the projects had
little ``skin in the game'' from private investors.
(14) A January 2012 report conducted at the request of the
Chief of Staff to the President concluded that the portfolio of
projects the Department of Energy included in the loan program
were higher risk investments that private capital markets do
not generally invest in.
(15) The Department of Energy's section 1705 program has
expired but the Department of Energy has announced that it will
continue to consider applications for loan guarantees under the
section 1703 program.
(16) The Department of Energy has approximately
$34,000,000,000 in remaining lending authority to issue new
loan guarantees under the section 1703 program.
SEC. 3. SUNSET.
(a) No New Applications.--The Secretary of Energy shall not issue
any new loan guarantee pursuant to title XVII of the Energy Policy Act
of 2005 (42 U.S.C. 16511 et seq.) for any application submitted to the
Department of Energy after December 31, 2011.
(b) Pending Applications.--With respect to any application
submitted pursuant to section 1703 or 1705 of the Energy Policy Act of
2005 before December 31, 2011:
(1) No guarantee shall be made until the Secretary of the
Treasury has provided to the Secretary of Energy a written
analysis of the financial terms and conditions of the proposed
loan guarantee, pursuant to section 1702(a) of the Energy
Policy Act of 2005 (42 U.S.C. 16512(a)).
(2) The Secretary of the Treasury shall transmit the
written analysis required under paragraph (1) to the Secretary
of Energy not later than 30 days after receiving the proposal
from the Secretary of Energy.
(3) Before making a guarantee under such title XVII, the
Secretary of Energy shall take into consideration the written
analysis made by the Secretary of the Treasury under paragraph
(1).
(4) If the Secretary of Energy makes a guarantee that is
not consistent with the written analysis provided by the
Secretary of the Treasury under paragraph (1), not later than
30 days after making such guarantee the Secretary of Energy
shall transmit to the Committee on Energy and Commerce and the
Committee on Science, Space, and Technology of the House of
Representatives and the Committee on Energy and Natural
Resources of the Senate a written explanation of any material
inconsistencies.
(c) Transparency.--
(1) Reports to congress.--Not later than 60 days after
making a guarantee as provided in subsection (b), the Secretary
of Energy shall transmit to the Committee on Energy and
Commerce and the Committee on Science, Space, and Technology of
the House of Representatives and the Committee on Energy and
Natural Resources of the Senate a report that includes
information regarding--
(A) the review and decisionmaking process utilized
by the Secretary in making the guarantee;
(B) the terms of the guarantee;
(C) the recipient; and
(D) the technology and project for which the loan
guarantee will be used.
(2) Protecting confidential business information.--A report
under paragraph (1) shall provide all relevant information, but
the Secretary shall take all necessary steps to protect
confidential business information with respect to the recipient
of the loan guarantee and the technology used.
SEC. 4. RESTRUCTURING OF LOAN GUARANTEES.
With respect to any restructuring of the terms of a loan guarantee
issued pursuant to title XVII of the Energy Policy Act of 2005, the
Secretary of Energy shall consult with the Secretary of the Treasury
regarding any restructuring of the terms and conditions of the loan
guarantee, including any deviations from the financial terms of the
loan guarantee.
SEC. 5. RESTATING THE PROHIBITION ON SUBORDINATION.
Section 1702(d)(3) of the Energy Policy Act of 2005 (42 U.S.C.
16512(d)(3)) is amended by striking ``is not subordinate'' and
inserting ``, including any reorganization, restructuring, or
termination thereof, shall not at any time be subordinate''.
SEC. 6. ADMINISTRATIVE ACTIONS AND CIVIL PENALTIES.
(a) In General.--Any Federal official who is responsible for the
issuance of a loan guarantee under title XVII of the Energy Policy Act
of 2005 in a manner that violates the requirements of such title or of
this Act shall be--
(1) subject to appropriate administrative discipline
provided for under title 5 of the United States Code, or any
other applicable Federal law, including, when circumstances
warrant, suspension from duty without pay or removal from
office; and
(2) personally liable for a civil penalty in an amount of
at least $10,000 but not more than $50,000 for each violation.
(b) Definition.--For purposes of this section, the term ``Federal
official'' means--
(1) an individual serving in a position in level I, II,
III, IV, or V of the Executive Schedule, as provided in
subchapter II of chapter 53 of title 5, United States Code; and
(2) an individual serving in a Senior Executive Service
position, as provided in subchapter II of chapter 31 of title
5, United States Code.
SEC. 7. GAO STUDY OF FEDERAL SUBSIDIES IN ENERGY MARKETS.
(a) In General.--The Comptroller General shall conduct a study of
the Federal subsidies in energy markets provided from fiscal year 2003
through fiscal year 2012.
(b) Focus.--The study required under subsection (a) shall have
particular focus on Federal subsidies in energy markets provided in
support of--
(1) electricity production, transmission, and consumption;
(2) transportation fuels and infrastructure;
(3) energy-related research and development; and
(4) facilities that manufacture energy-related components.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall submit to the Committee on
Energy and Commerce and the Committee on Science, Space, and Technology
of the House of Representatives and the Committee on Energy and Natural
Resources of the Senate a report that describes the results of the
study conducted under subsection (a), including an identification and
quantification of--
(1) costs to the United States Treasury;
(2) impacts on United States energy security;
(3) impacts on electricity prices, including any potential
negative pricing impact on wholesale electricity markets;
(4) impacts on transportation fuel prices;
(5) impacts on private energy-related industries not
benefitting from Federal subsidies in energy markets;
(6) any Federal subsidies in energy markets that are
provided to foreign persons or corporations; and
(7) subsidies and direct financial interest any of the 15
foreign countries with the largest gross domestic product are
providing to support energy markets in their respective
countries.
(d) Definition.--For purposes of this section, the term ``Federal
subsidies'' means Federal grants, direct loans, loan guarantees, and
tax credits, and other programmatic activities targeted at energy
markets and related sectors, relating to specific energy technologies.
Passed the House of Representatives September 14, 2012.
Attest:
KAREN L. HAAS,
Clerk.