[House Report 111-585]
[From the U.S. Government Publishing Office]
111th Congress Rept. 111-585
HOUSE OF REPRESENTATIVES
2d Session Part 1
====================================================================
RURAL ENERGY SAVINGS PROGRAM ACT
_______
September 14, 2010.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Peterson, from the Committee on Agriculture, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4785]
[Including cost estimate of the Congressional Budget Office]
The Committee on Agriculture, to whom was referred the bill
(H.R. 4785) to amend the miscellaneous rural development
provisions of the Farm Security and Rural Investment Act of
2002 to authorize the Secretary of Agriculture to make loans to
certain entities that will use the funds to make loans to
consumers to implement energy efficiency measures involving
structural improvements and investments in cost-effective,
commercial off-the-shelf technologies to reduce home energy
use, having considered the same, report favorably thereon with
amendments and recommend that the bill as amended do pass.
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Energy Savings Program Act''.
SEC. 2. RURAL ENERGY SAVINGS PROGRAM.
(a) Purpose.--The purpose of this section is to create and save jobs
by providing loans to qualified consumers who will use the loan
proceeds to implement energy efficiency measures to achieve significant
reductions in energy costs, energy consumption, or carbon emissions.
(b) Definitions.--In this section:
(1) Eligible entity.--The term ``eligible entity'' means--
(A) any public or cooperative electric utility that
is eligible to borrow from the Rural Utilities Service
electrification program authorized under the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.) that
serves a rural area defined by that Act;
(B) any current borrower of the Rural Utilities
Service electrification program authorized under that
Act; or
(C) any entity primarily owned or controlled by an
entity described in subparagraph (A) or (B).
(2) Energy efficiency measure.--The term ``energy efficiency
measure'', with respect to property served by an eligible
entity, means a structural improvement and investment in a
cost-effective, commercial off-the-shelf technology to reduce
energy use.
(3) Qualified consumer.--The term ``qualified consumer''
means a consumer served by an eligible entity that has the
ability to repay a loan made under subsection (d), as
determined by an eligible entity.
(4) Qualified entity.--The term ``qualified entity'' means
any organization that the Secretary determines has significant
experience in providing eligible entities with--
(A) advice on energy, environmental, energy
efficiency, and information research and technology;
(B) training, education, and consulting;
(C) guidance in energy and operational issues and
rural community and economic development; and
(D) other relevant assistance, as determined by the
Secretary.
(5) Rural area.--The term ``rural area'' means any area other
than--
(A) a city or town that has a population of greater
than 50,000 inhabitants; and
(B) any urbanized area contiguous and adjacent to a
city or town described in subparagraph (A).
(6) Secretary.--The term ``Secretary'' means the Secretary of
Agriculture, acting through the Rural Utilities Service.
(c) Loans to Eligible Entities.--
(1) Loans authorized.--Subject to paragraph (2), the
Secretary shall make loans to an eligible entity that agrees
that the loan funds will be used to make loans to qualified
consumers as described in subsection (d) for the purpose of
implementing an energy efficiency measure.
(2) List, plan, and measurement and verification required.--
(A) In general.--As a condition to receiving a loan
under paragraph (1), an eligible entity shall--
(i) establish a list of energy efficiency
measures expected to decrease energy use or
costs of a qualified consumer;
(ii) prepare an implementation plan for use
of the loan funds to ensure that a loan to a
qualified consumer is at least commensurate
with the expected energy savings the qualified
consumer shall expect to receive from the
activities funded by the loan; and
(iii) provide for appropriate measurement and
verification to ensure the effectiveness of the
energy efficiency loans made by the eligible
entity.
(B) Revision of list of energy efficiency measures.--
An eligible entity may update the list required under
subparagraph (A)(i) to account for newly available
efficiency technologies, subject to the approval of the
Secretary.
(C) Existing energy efficiency programs.--An eligible
entity that, on or before the date of the enactment of
this Act or within 60 days after such date, has already
established an energy efficiency program for qualified
consumers may use an existing list of energy efficiency
measures, implementation plans, or measurement and
verification systems to satisfy the requirements of
subparagraph (A) if the Secretary determines the list,
plans, or systems are consistent with the purposes of
sub section (a).
(3) Loan terms for loans to eligible entities.--
(A) No interest.--A loan made to an eligible entity
under paragraph (1) shall bear no interest.
(B) Repayment.--With respect to a loan under
paragraph (1)--
(i) the term shall not exceed 20 years from
the date the loan is closed; and
(ii) except as provided in subparagraph (D),
the repayment of each advance shall be
amortized for a period not to exceed 10 years.
(C) Amount of advances.--Any advance of loan funds to
an eligible entity in any single year shall not exceed
30 percent of the approved loan amount.
(D) Special advance for start-up activities.--
(i) In general.--In order to assist an
eligible entity in defraying initial start-up
costs, the Secretary shall allow an eligible
entity to request a special advance.
(ii) Amount of special advance.--No eligible
entity may receive a special advance under this
subparagraph for an amount that is greater than
4 percent of the loan amount received by the
eligible entity under paragraph (1).
(iii) Repayment.--The repayment of the
special advance shall be required within 10
years after the special advance is made and, at
the election of the eligible entity, may be
deferred to the end of the 10-year period.
(E) Limitation on advances.--All advances shall be
made under a loan described in paragraph (1) within the
first 10 years of the term of the loan.
(d) Loans to Qualified Consumers.--
(1) Terms of loans.--Loans made by an eligible entity to
qualified consumers using loan funds provided by the Secretary
under subsection (c)--
(A) may bear interest, not to exceed three percent,
to be used by the eligible entity for purposes such as
establishing a loan loss reserve and to offset
personnel and program costs of the eligible entity to
provide the loans;
(B) shall finance energy efficiency measures for the
purpose of decreasing energy usage or costs of a
qualified consumer by an amount such that a loan term
of not more than 10 years will not pose an undue
financial burden on the qualified consumer, as
determined by the eligible entity;
(C) shall not be used to fund purchases of, or
modifications to, personal property unless the personal
property--
(i) is or becomes attached to real property
as a fixture; or
(ii) is a manufactured home;
(D) shall be repaid through charges added to the
electric bill for the property for, or at which energy
efficiency measures are or will be implemented, except
that this requirement shall not be construed to
prohibit--
(i) the voluntary prepayment of a loan by the
owner of the property; or
(ii) the use of any additional repayment
mechanisms that are--
(I) demonstrated to have appropriate
risk mitigation features, as determined
by the eligible entity; or
(II) required if the qualified
consumer is no longer a customer of the
eligible entity; and
(E) shall require an energy audit to determine the
impact of proposed energy efficiency measures on the
energy costs and consumption of the qualified consumer.
(2) Contractors.--In addition to any other qualified general
contractor, eligible entities may serve as general contractors.
(3) Use of other energy efficiency incentives.--Energy
efficiency incentives made available under any other Act,
including rebates, grants, or any other payments, may be used
to reduce the amount of a loan made under this subsection to
qualified consumers in order to meet the requirement of
paragraph (1)(B).
(e) Measurement, Verification, Training, and Technical Assistance.--
(1) Duties of the secretary.--Not later than 60 days after
the date of enactment of this Act, the Secretary shall--
(A) develop a protocol for eligible entities and
qualified entities to use in measuring energy
consumption and verifying the effectiveness of energy
efficiency measures;
(B) establish a measurement and verification advisory
committee consisting of representatives of eligible
entities and qualified entities;
(C) enter into one or more cooperative agreements
with qualified entities to provide technical assistance
and training to the employees of eligible entities to
carry out this section; and
(D) establish a process to compile and maintain a
directory of energy efficiency auditors that are used
by eligible entities to carry out this section.
(2) Exception.--
(A) The Secretary shall not utilize the authority
provided under this subsection or subsection (k) to--
(i) develop, adopt, or implement a public
labeling system that rates and compares the
energy performance among qualified consumers;
or
(ii) require the public disclosure of an
energy performance evaluation or rating
developed for any qualified consumer.
(B) Nothing in this paragraph shall preclude--
(i) the computation, collection, or use, by
the Secretary, eligible entity, or qualified
entity for the purposes aggregating information
on the rating and comparison of the energy
performance among qualified consumers with and
without energy efficiency features or on energy
performance evaluation or rating;
(ii) the use and publication of aggregate
data (without identifying individual qualified
consumers) based on information referred to in
clause (i) to determine or demonstrate the
performance of this program; or
(iii) the provision of information referred
to in clause (i) with respect to a qualified
consumer:
(I) to the State, eligible consumer,
eligible entity, or qualified entity,
as necessary to enable carrying out
this Act; or
(II) for purposes of prosecuting
fraud and abuse.
(f) Fast Start Demonstration Projects.--
(1) Demonstration projects required.--The Secretary shall
enter into agreements with eligible entities (or groups of
eligible entities) that have established an energy efficiency
program described in subsection (c)(2)(C) to establish an
energy efficiency loan demonstration projects consistent with
the purposes of this section that--
(A) implement approaches to energy audits and
investments in energy efficiency measures that yield
measurable and predictable savings;
(B) use measurement and verification processes to
determine the effectiveness of energy efficiency loans
made by eligible entities;
(C) include training for employees of eligible
entities, including any contractors of such entities,
to implement or oversee the activities described in
subparagraphs (A) and (B);
(D) provide for the participation of a majority of
eligible entities in a State;
(E) reduce the need for generating capacity;
(F) provide efficiency loans to--
(i) not fewer than 20,000 consumers, in the
case of a single eligible entity; or
(ii) not fewer than 80,000 consumers, in the
case of a group of eligible entities; and
(G) serve areas where a large percentage of consumers
reside--
(i) in manufactured homes; or
(ii) in housing units that are more than 50
years old.
(2) Deadline for implementation.--The agreements required by
paragraph (1) shall be entered into not later than 90 days
after the date of enactment of this Act.
(3) Effect on availability of loans nationally.--Nothing in
this subsection shall delay the availability of loans to
eligible entities on a national basis beginning not later than
180 days after the date of the enactment of this Act.
(4) Additional demonstration project authority.--The
Secretary may conduct demonstration projects in addition to the
project required by paragraph (1). An additional demonstration
project may be carried out without regard to subparagraphs (D),
(F), or (G) of paragraph (1).
(g) Additional Authority.--The authority provided in this section is
in addition to any authority of the Secretary to offer loans under any
other law.
(h) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary $993,000,000 to carry out this section,
which shall remain available until expended.
(i) Effective Period.--Subject to subsection (h)(1) and except as
otherwise provided in this section, the loans and other expenditures
required to be made under this section are authorized to be made during
each of fiscal years 2010 through 2014.
(j) Reporting Requirement.--Not later than one year after the date of
the enactment of this Act, the Secretary shall submit to the Committee
on Agriculture, Nutrition, and Forestry of the Senate and the Committee
on Agriculture of the House of Representatives a report describing the
implementation of this section.
(k) Regulations.--
(1) In general.--Except as otherwise provided in this
subsection, not later than 180 days after the date of enactment
of this section, the Secretary shall promulgate such
regulations as are necessary to implement this section.
(2) Procedure.--The promulgation of the regulations and
administration of this section shall be made without regard
to--
(A) chapter 35 of title 44, United States Code
(commonly known as the ``Paperwork Reduction Act'');
and
(B) the Statement of Policy of the Secretary of
Agriculture effective July 24, 1971 (36 Fed. Reg.
13804), relating to notices of proposed rulemaking and
public participation in rulemaking.
(3) Congressional review of agency rulemaking.--In carrying
out this section, the Secretary shall use the authority
provided under section 808 of title 5, United States Code.
(4) Interim regulations.--Notwithstanding paragraphs (1) and
(2), to the extent regulations are necessary to carry out any
provision of this section, the Secretary shall implement such
regulations through the promulgation of an interim rule.
(l) Audit of Program.--The Secretary shall conduct an audit of the
program authorized by this section to ensure that the funds provided to
eligible entities under this section are used in accordance with the
purpose of this section.
Amend the title so as to read:
A bill to authorize the Secretary of Agriculture to make
loans to certain entities that agree that the funds will be
used to make loans to consumers to implement energy efficiency
measures involving structural improvements and investments in
cost-effective, commercial off-the-shelf technologies to reduce
energy use, and for other purposes.
BRIEF EXPLANATION
H.R. 4785 authorizes the Secretary of Agriculture to make
loans to certain entities that agree that the funds will be
used to make loans to consumers to implement energy efficiency
measures involving structural improvements and investments in
cost-effective, commercial off-the-shelf technologies to reduce
energy use, and for other purposes.
PURPOSE AND NEED
Rural customers are facing increasing costs for electric
power. Rural electric cooperatives are facing a growing demand
for electric power at a time when they are constrained from
building new generation capacity.
H.R. 4785, the ``Rural Energy Savings Program Act''
introduced by Congressman James Clyburn of South Carolina,
establishes a program to provide rural consumers and rural
electric cooperatives with the tools necessary to lower the
amount of electric power used in homes, farms, and small
businesses, thereby decreasing the costs of energy for rural
communities.
The base text of the bill authorizes the Secretary of
Agriculture (``Secretary'') to make zero-interest loans to
eligible entities, which are to use the loan funds to make low-
interest loans to qualified consumers for the purpose of
implementing energy efficiency measures on the qualified
consumers' property.
As a condition of receiving a loan under the program, the
eligible entity is required to: establish a list of energy
efficiency measures that are expected to decrease the qualified
consumers' energy use or cost; prepare an implementation plan
for use of the loan funds; and provide for appropriate
measurement and verification to ensure the effectiveness of the
energy efficiency loans made by the eligible entity. To help
defray initial start-up costs, the base text of the bill
authorizes the Secretary to provide eligible entities with
``jump-start'' grants.
The base text of the bill requires the Secretary to provide
eligible entities with a 10-year schedule for loan fund
advances. Loans made by the eligible entity to the qualified
consumer must not exceed three-percent interest. Loan funds
must be used to finance energy efficiency measures for the
purpose of decreasing energy usage or costs for the qualified
consumer by an amount such that the 10-year loan term would not
cause an undue financial burden on the qualified consumer. Loan
funds cannot be used to fund energy efficiency measures to
personal property, unless the personal property becomes
attached to real property as a fixture, or is a manufactured
home.
Loans made to qualified consumers are to be repaid through
charges on the qualified consumers' electric bill. Also, in
order for a qualified consumer to receive a loan under the
program, the consumer must agree to have an energy audit
conducted on his or her property. The purpose of the energy
audit is to determine the impact of the proposed energy
efficiency measures on the qualified consumers' energy costs
and consumption.
The base text of the bill requires the Secretary to enter
into one or more contracts with a qualified entity for a number
of purposes, including: developing and completing a protocol
for measurement and verification for the Rural Utilities
Service (``RUS''); establishing a national measurement and
verification committee consisting of representatives of
eligible entities; providing training in measurement and
verification; and developing a program to provide technical
assistance and training for employees of qualified entities.
The base text of the legislation allows eligible entities,
or groups of eligible entities, that already have already
established energy efficiency programs that would meet the
requirements laid out in the bill, to enter into agreements
with the Secretary to establish fast-start energy efficiency
loan demonstration projects.
The base text authorizes $993 million in appropriations for
fiscal year 2010 to carry out the program. Of that amount: $755
million is to be appropriated to cover the costs of direct
loans to eligible entities; $25 million is to be appropriated
for measurement and verification activities; $2 million is to
be appropriated for the contract for training and technical
assistance; and $200 million is to be appropriated for jump-
start grants. Another $1.1 million is to be appropriated for
each of the fiscal years 2010 through 2019 to provide the RUS
with funds to allow it to hire 10 additional employees to carry
out the loan program.
During a hearing held on May 12 of this year by the
Subcommittee on Conservation, Credit, Energy, and Research, a
number of Members expressed concerns about the legislation. The
Members who expressed concerns were concerned about the grant
funding contained in the legislation, the loan authorization
amount, the loan repayment structure, the authorization of new
spending, and the idea of creating a new program.
In an effort to address some of the concerns expressed by
the Members who had concerns, an Amendment in the Nature of a
Substitute (``ANS'') was drafted. The ANS retains the concept
that the Secretary is to make zero-interest loans to eligible
entities, which are then to use the loan funds to make low-
interest loans to qualified consumers for the purpose of
implementing energy efficiency measures on the qualified
consumers' property.
The ANS, however, narrowed the focus of the legislation so
that the program is restricted to ``rural areas''. Current RUS
borrowers will be eligible for the program, but those not
currently borrowing from RUS will have to meet the rural area
test to participate in the program. The rural area definition
contained in the ANS is the same definition that is used in the
Consolidated Farm and Rural Development Act.
Because some Members were concerned that the loan repayment
structure contained in the base text because was structured
like a line of credit, the ANS changed the loan repayment
structure so that any loan made to an eligible entity has a 20-
year term. Additionally, the ANS struck the jump-start grant
provisions. Instead of providing jump-start grant funding, the
ANS allows eligible entities to receive a special loan advance
to help defray the upfront costs for eligible entities to get
their program up and running. The special loan advance is not
to exceed more than four percent on the loan funds to be
distributed. The ANS also requires the qualified consumer to
agree to have an energy audit conducted on his or her property
as a condition of receiving a loan. The purpose of the energy
audit is to discover where problems in energy usage occur and
provide a way for consumers to correct any problems.
The ANS allows energy efficiency incentives made available
under any other Act, including rebates, grants or any other
payments, to be used to reduce the amount of the qualified
consumers' loan.
The ANS requires the Secretary to: develop a protocol for
eligible entities and qualified entities to use in measuring
energy consumption and verifying the effectiveness of energy
efficiency measures; establish a measurement and verification
advisory committee; enter into one or more cooperative
agreements with qualified entities to provide technical
assistance and training to the employees of eligible entities;
and establish a process to compile and maintain a directory of
energy efficiency auditors that are used by eligible entities.
However, The Secretary is prohibited from: developing,
adopting, or implementing a public labeling system that rates
and compares the energy performance among qualified consumers;
or requiring the public disclosure of an energy performance
evaluation or rating developed for any qualified consumer.
The ANS maintains the $993 million appropriation contained
in the base text. However, of that amount, the ANS calls for
not less than 76 percent to be appropriated to cover the costs
of direct loans to eligible entities; not less than 2.5 percent
to be appropriated for developing the protocol for eligible
entities and qualified entities to use in measuring energy
consumption and verifying the effectiveness of energy
efficiency measures; and not less than 0.2 percent to be
appropriated for establishing the measurement and verification
advisory committee. The ANS retains the $1.1 million
appropriation for 10 additional RUS employees to carry out the
program.
During the July 14 mark-up of the legislation, the
Committee adopted three amendments: one amendment prohibits the
Secretary from using the authority given to the Secretary under
the legislation to promulgate regulations that would establish
an energy labeling program for a qualified consumer's property;
a second amendment requires the Secretary to conduct an audit
of the program to ensure that federal funds are being provided
to eligible entities, in accordance with the purpose of the
Act; and the third amendment struck the $1.1 million
appropriation for the 10 additional RUS employees to carry out
the program.
SECTION-BY-SECTION ANALYSIS
Section 1. SHORT TITLE.
This Act may be cited as the ``Rural Energy Savings Program
Act''.
Section 2. RURAL ENERGY SAVINGS PROGRAM.
Provides that the purpose of the legislation is to create
and save jobs by providing loans to qualified consumers to use
loan proceeds to implement energy efficiency measures to
achieve significant reductions in energy costs, energy
consumption, or carbon emissions.
Defines the terms: eligible entity; energy efficiency
measure; qualified consumer; qualified entity; rural area, and
Secretary.
Authorizes the Secretary of Agriculture (``Secretary'') to
make loans to eligible entities that agree that the loan funds
will be used to make loans to qualified consumers for the
purpose of implementing energy efficiency measures.
As a condition of receiving a loan, an eligible entity is
required to: (1) establish a list of energy efficiency measures
that are expected to decrease energy use or costs for qualified
consumers; (2) prepare an implementation plan for use of the
loan funds to ensure that a loan to a qualified consumer is at
least commensurate with the expected energy savings the
qualified consumer expects to receive from the measures funded
by the loan; and (3) provide for appropriate measurement and
verification to ensure the effectiveness of the energy
efficiency loans made by eligible entities.
Eligible entities are permitted to update or revise the
list of energy efficiency measures to account for newly
available efficiency technologies, subject to the Secretary's
approval.
Eligible entities that have already established energy
efficiency programs for qualified consumers are allowed to use
their existing list of energy efficiency measures,
implementation plans, or measurement or verification systems,
if the Secretary determines that the lists, plans, or systems
are consistent with the purposes of the legislation.
Loans to eligible entities are to bear no interest. Loan
terms are not to exceed 20 years from the date the loan is
closed. The repayment of each loan advance is to be amortized
for a period not to exceed 10 years. An advance of loan funds
to an eligible entity is not to exceed 30 percent of the
approved loan amount.
Authorizes the Secretary to allow eligible entities to
request a special advance to assist them in defraying initial
start-up costs. Special advances are to be no greater than 4
percent of the loan amount the eligible entity receives.
Repayment of the special advance is required to be made within
10 years after it is made and, at the election of the eligible
entity, may be deferred to the end of the 10-year period.
All loan advances made under the program are to be made
within the first 10 years of the term of the loan.
Loans made by an eligible entity to a qualified consumer:
(1) may bear interest, not to exceed 3 percent, to be used by
the eligible entity for purposes such as establishing a loan
loss reserve fund and to offset personnel and program costs of
the eligible entity to provide the loans; (2) must finance
energy efficiency measures for the purpose of decreasing energy
usage or costs of the qualified consumer by an amount such that
the loan term is not more than 10 years, nor will pose an undue
financial burden on the qualified consumer.
Loan funds cannot be used to fund purchases of, or
modifications to, personal property unless such property is, or
becomes attached to, real property as a fixture. Loan funds
cannot be used to purchase manufactured homes.
Loan funds are to be repaid by the qualified consumer
through charges added to the qualified consumer's electric
bill. Qualified consumers are not prohibited from voluntarily
prepaying a loan. The use of additional repayment mechanisms
that are demonstrated to have appropriate risk mitigation
factors, as determined by the eligible entity, or are required
if the qualified consumer is no longer a customer of the
eligible entity, are not prohibited.
To receive a loan, an energy audit must be conducted to
determine the impact of the proposed energy efficiency measures
on the energy costs and energy consumption of the qualified
consumer.
Eligible entities can serve as general contractors, in
addition to any other qualified general contractor.
Allows for the reduction of the amount of loan funds
authorized under this legislation with respect to energy
efficiency incentives made under any other Act, including
rebates, grants, or any other payments.
Not later than 60 days after the date of the enactment of
the legislation the Secretary is required to: (1) develop a
protocol for eligible entities and qualified entities to use in
measuring energy consumption and verifying the effectiveness of
energy efficiency measures; (2) establish a measurement and
verification advisory committee consisting of representatives
of eligible entities and qualified entities; (3) enter into one
or more cooperative agreements with qualified entities to
provide technical assistance and training to the employees of
eligible entities; and establish a process to compile and
maintain a directory of energy efficiency auditors that are
used by eligible entities.
Prohibits the Secretary from using the authority provided
by the legislation to: develop, adopt, or implement a public
labeling system that rates and compares the energy performance
among qualified consumers; or require the public disclosure of
an energy performance evaluation or rating developed for any
qualified consumer.
Prohibits the Secretary from promulgating regulations to:
develop, adopt, or implement a public labeling system that
rates and compares the energy performance among qualified
consumers; or require the public disclosure of an energy
performance evaluation or rating developed for any qualified
consumer.
The Secretary, eligible entities, or qualified entities are
not prohibited from computing, collecting, or using aggregate
information for the purposes of rating and comparing the energy
performance among qualified consumers with and without energy
efficiency features, or on energy performance evaluation or
rating.
The Secretary, eligible entities, or qualified entities are
not prohibited from using and publishing aggregate data
(without identifying individual qualified consumers) based on
aggregate information to determine or demonstrate the
performance of the loan program.
Authorizes the Secretary to establish energy efficiency
loan demonstration projects consistent with the purposes of the
legislation.
The deadline for entering into demonstration project
agreements is to be not later than 90 days after the enactment
of the legislation.
Authorizes the Secretary to conduct additional
demonstration projects.
The availability of loans authorized by the legislation is
not to be delayed beginning not later than 180 days after the
enactment of the legislation.
Specifies that the authority given to the Secretary by the
legislation is in addition to any authority of the Secretary to
offer loans under any other law.
Provides for an appropriation of $993 million, to remain
available until expended, to carry out the loan program.
Loans and other expenditures authorized by the legislation
are to be made during each of the fiscal years 2010 through
2014.
Requires the Secretary to submit, not later than one year
after the date of the enactment of the legislation, a report
describing the implementation of the loan program to the House
and Senate Agriculture Committees.
Requires the Secretary to: not later than 180 days after
the date of the enactment of the legislation, promulgate
regulations that are necessary to implement the legislation;
and, to the extent regulations are necessary to carry out any
provision of the legislation, implement regulations through the
promulgation of an interim rule.
Requires the Secretary to conduct an audit of the program
to ensure that the funds provided to eligible entities are used
in accordance with the purpose of the legislation.
COMMITTEE CONSIDERATION
HEARINGS
The Subcommittee on Conservation, Credit, Energy, and
Research held a hearing on May 12, 2010. Testimony was heard
from nine witnesses on three separate panels that included
Members of Congress.
FULL COMMITTEE CONSIDERATION
On July 14, 2010, the Committee on Agriculture met,
pursuant to notice, with a quorum present to consider H.R.
4785. Mr. Peterson offered an opening statement, as did Ranking
Member Lucas.
The bill, H.R. 4785, was placed before the Committee for
consideration and without objection a first reading of the bill
was waived and it was opened for amendment at any point.
Counsel was recognized for a brief explanation of the bill. The
chairman offered an Amendment in the Nature of a Substitute to
the bill, H.R. 4785, and counsel provided a brief explanation
of that amendment.
Mrs. Dahlkemper was recognized to offer and explain an
amendment that would require the Secretary to conduct an audit
of the program to ensure that federal funds are being provided
to eligible entities, in accordance with the purpose of the
act. Discussion occurred and by voice vote, the Dahlkemper
Amendment to the Amendment in the Nature of a Substitute was
adopted.
Mr. Holden was recognized to offer and explain an amendment
that would prohibit the Secretary form using the authority
given under the legislation to promulgate regulations that
would establish an energy labeling program for the qualified
consumer's property. Discussion occurred and by voice vote, the
Holden Amendment to the Amendment in the Nature of a Substitute
was adopted.
Mr. Marshall was recognized to offer and explain an
amendment that would restrict consumer loans to individuals who
make less than three times the poverty level. Discussion
occurred and by voice vote, the Marshall Amendment to the
Amendment in the Nature of a Substitute to H.R. 4785 failed.
Mr. Neugebauer requested a recorded vote. The results of the
recorded vote were: 12 yeas, 28 nays, 6 not voting. The
Marshall Amendment was not adopted. (See Roll Call #1).
Ms. Lummis and Mr. Luetkemeyer were recognized to offer and
explain an amendment that would remove the authorization of
$1,100,000 for each of the fiscal years 2010 through 2019 for
ten additional Rural Utilities Service employees. Discussion
occurred and by voice vote the Lummis/Luetkemeyer Amendment to
the Amendment in the Nature of a Substitute was adopted.
By voice vote, the Lucas motion to approve the Amendment in
the Nature of a Substitute to H.R. 4785 as amended, was
adopted.
By voice vote, the Lucas motion to report the bill H.R.
4785 as amended favorably to the House with the recommendation
that it do pass was adopted.
Mr. Lucas reserved the right for minority views to the
bill, H.R. 4785 to be filed in the report.
Without objection, the usual instructions were given to
staff that consist of making such technical, clarifying or
conforming changes as are appropriate without changing the
substance of the legislation.
Chairman Peterson thanked all the Members and adjourned the
meeting subject to the call of the chair.
REPORTING THE BILL--ROLL CALL VOTES
In compliance with clause 3(b) of Rule XIII of the House of
Representatives, the Committee sets forth the record of the
following roll call votes taken with respect to H.R. 4785.
Roll Call #1
Summary: Amendment to restrict consumer loans to
individuals who make less than three times the poverty level.
Offered by: Mr. Marshall of Georgia
Results: Amendment failed by a vote of 12 yeas, 28 nays,
and 6 not voting.
YEAS
1. Mr. Baca 7. Mr. King
2. Mr. Marshall 8. Mr. Neugebauer
3. Mr. Boccieri 9. Mr. Conaway
4. Mr. Murphy 10. Mr. Fortenberry
5. Mr. Goodlatte 11. Mrs. Schmidt
6. Mr. Moran 12. Mr. Rooney
NAYS
1. Mr. Holden 15. Ms. Markey
2. Mr. McIntyre 16. Mr. Kratovil
3. Mr. Boswell 17. Mr. Schauer
4. Mr. Cardoza 18. Mr. Kissell
5. Mr. Scott 19. Mr. Owens
6. Ms. Herseth Sandlin 20. Mr. Childers
7. Mr. Cuellar 21. Mr. Minnick
8. Mr. Costa 22. Mr. Lucas
9. Mr. Ellsworth 23. Mr. Johnson
10. Mr. Walz 24. Mr. Rogers
11. Mr. Schrader 25. Mr. Smith
12. Mrs. Halvorson 26. Mr. Luetkemeyer
13. Mrs. Dahlkemper 27. Mrs. Lummis
14. Mr. Bright 28. Mr. Peterson
NOT VOTING
1. Mr. Kagen 4. Mr. Roe
2. Mr. Pomeroy 5. Mr. Thompson
3. Mr. Graves 6. Mr. Cassidy
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee on Agriculture's
oversight findings and recommendations are reflected in the
body of this report.
BUDGET ACT COMPLIANCE (SECTIONS 308, 402, AND 423)
The provisions of clause 3(c)(2) of Rule XIII of the Rules
of the House of Representatives and section 308(a)(1) of the
Congressional Budget Act of 1974 (relating to estimates of new
budget authority, new spending authority, new credit authority,
or increased or decreased revenues or tax expenditures) are not
considered applicable. The estimate and comparison required to
be prepared by the Director of the Congressional Budget Office
under clause 3(c)(3) of Rule XIII of the Rules of the House of
Representatives and sections 402 and 423 of the Congressional
Budget Act of 1974 submitted to the Committee prior to the
filing of this report are as follows:
September 13, 2010.
Hon. Collin C. Peterson,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4785, the Rural
Energy Savings Program Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Megan
Carroll.
Sincerely,
Douglas W. Elmendorf
Enclosure.
H.R. 4785--Rural Energy Savings Program Act
Summary: H.R. 4785 would authorize the Secretary of
Agriculture, through the Rural Utilities Service (RUS), to make
loans to certain public or cooperative electric utilities.
Under the bill, participating cooperatives would, in turn, make
low-interest loans to customers to support installations of
energy-efficiency measures. The bill would authorize the
appropriation of $993 million to cover the federal cost of such
activities.
Assuming appropriation of the specified amount, CBO
estimates that implementing H.R. 4785 would cost $800 million
over the 2011-2015 period. Enacting H.R. 4785 would not affect
direct spending or revenues; therefore, pay-as-you-go
procedures do not apply.
H.R. 4785 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4785 is shown in the following table.
The costs of this legislation fall within budget function 270
(energy).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------------
2011 2012 2013 2014 2015 2011-2015
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization Level.......................................... 993 0 0 0 0 993
Estimated Outlays............................................ 150 210 160 120 160 800
----------------------------------------------------------------------------------------------------------------
Basis of Estimate: For this estimate, CBO assumes that H.R.
4785 will be enacted in 2010 and that appropriations will be
provided as specified by the bill. We assume that about $10
million of authorized funds would be used each year by RUS to
expand staffing as necessary to administer the proposed
program. Based on information from RUS about the likely subsidy
rate of the proposed loans (ranging from 20 percent to 25
percent), CBO estimates that remaining amounts would be used to
leverage between $4 billion and $5 billion in new loans to
local electric cooperatives. Based on historical disbursement
rates for RUS loans, CBO estimates that resulting spending
under H.R. 4785 would total $800 million over the 2011-2015
period.
Pay-as-You-Go Considerations: None.
Intergovernmental and Private-Sector Impact: H.R. 4785
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate Prepared by: Federal Costs: Megan Carroll; Impact
on State, Local, and Tribal Governments: Ryan Miller; Impact on
the Private Sector: Amy Petz.
Estimate Approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirement of clause 3(c)(4) of Rule
XIII of the Rules of the House of Representatives, the
performance goals and objections of this legislation are to
make loans to certain entities that agree that the funds will
be used to make loans to consumers to implement energy
efficiency measures involving structural improvements and
investments in cost-effective, commercial off-the shelf
technologies to reduce energy use, and for other purposes.
CONSTITUTIONAL AUTHORITY STATEMENT
Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the
House of Representatives, the Committee finds the
Constitutional authority for this legislation in Article I,
clause 8, section 18, that grants Congress the power to make
all laws necessary and proper for carrying out the powers
vested by Congress in the Constitution of the United States or
in any department or officer thereof.
COMMITTEE COST ESTIMATE
Pursuant to clause 3(d)(2) of Rule XIII of the Rules of the
House of Representatives, the Committee report incorporates the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to sections 402 and 423 of the
Congressional Budget Act of 1974.
ADVISORY COMMITTEE STATEMENT
In accordance with section 5(b) of the Federal Advisory
Committee Act, the Committee finds that the advisory committee
established by section 2 is necessary to carry out the
functions and responsibilities contained therein.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act (Public Law
104-1).
FEDERAL MANDATES STATEMENT
The Committee adopted as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act (Public Law 104-4).
EARMARK STATEMENT REQUIRED BY CLAUSE 9 OF RULE XXI OF THE RULES OF THE
HOUSE OF REPRESENTATIVES
H.R. 4785 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9(e), 9(f), or 9(g) of rule XXI of the rules of the
House of Representatives.
DISSENTING VIEWS ON H.R. 4785, THE RURAL ENERGY SAVINGS PROGRAM
Rural electric cooperatives are facing an increase in
energy demand due to a growing customer base. This demand is
becoming challenging to meet because of unnecessary regulatory
hurdles and the looming energy tax and CO2 regulation being
supported by President Obama and the Democratic leadership.
H.R. 4785, the Rural Energy Savings Program Act, creates a
re-lending program allowing USDA to provide zero interest loans
to rural electric cooperatives who in return provide low
interest loans to customers for energy efficiency projects to
their homes. Customers would be able to repay their loans
through their monthly utility bill. In theory, these customers
would over time reduce energy consumption and reduce their
energy bills.
The sponsor and supporters of this legislation have
attempted to give rural electricity providers the tools to meet
the demands of its customers by reducing energy use through
energy efficiency projects. Energy efficiency is an important
step in an overall energy plan, but creating a new program is
not the solution. Just in the last few years, Congress has
authorized energy efficiency appliance rebate programs, state
lending programs for energy efficiency, training programs for
green jobs, and tax credits for home owners, builders and even
manufacturers to promote energy efficient measures. The
American Recovery and Reinvestment Act (ARRA) alone funded the
Weatherization Assistance Program, a grant program for low
income families for home energy efficiency projects, at $5.25
billion.
This issue can be addressed in the farm bill by making
adjustments to current programs. The 2008 Farm Bill included a
provision that would have allowed rural electric cooperatives
to expand clean energy production and provide affordable
electricity for its customers. However, this provision was
stripped by Speaker Pelosi. As a result, rural electric coops
can not access RUS lending for new base load generation. In
other words, base load generation from sources such as nuclear,
natural gas, and clean coal technologies is difficult, if not
impossible, to finance through the program.
Additionally, President Obama's recent budget proposal
called for a $2.5 billion cut to the electric loan program as
well as restricting any lending for improving or expanding
natural gas plants. These energy policies will make it
increasingly more difficult to provide homes, schools,
businesses and farms across rural America with affordable
electricity.
Unfortunately, the Democratic leadership is pushing energy
policy that will create increased and burdensome energy costs
for Americans. As a result, we are creating new programs that
increase spending to address the consequences of these
policies. Congress should be exploring policies that will
capitalize on our domestic energy resources to meet increased
demands, such as clean coal technologies, clean burning natural
gas, and nuclear energy.
Frank D. Lucas