A bill to amend 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 cost-effective energy efficiency measures to promote energy cost savings and rural development.

Summary: Rural Energy Savings Program Act - Amends the Farm Security and Rural Investment Act of 2002 to direct the Secretary of Agriculture (USDA), through the Rural Utilities Service, to make interest-free loans to eligible entities (public power districts, public utility districts, or specified electric cooperatives that borrowed and repaid, prepaid, or are paying an electric loan made or guaranteed by the Rural Utilities Service) for loans to consumers to implement energy efficient measures.

Provides a special advance for start-up activities.

Authorizes the Secretary to contract with a qualified entity to provide verification and measurement activities and employee technical assistance and training.

Directs the Secretary to offer to enter into agreements with eligible entities, or groups of eligible entities, that have specified energy efficiency programs to establish energy efficiency loan demonstration projects.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Rural Energy Savings Program Act''.

SEC. 2. RURAL ENERGY SAVINGS PROGRAM.

    Subtitle E of title VI of the Farm Security and Rural Investment 
Act of 2002 (Public Law 107-71; 116 Stat. 424) is amended by adding at 
the end the following:

``SEC. 6407. RURAL ENERGY SAVINGS PROGRAM.

    ``(a) Purpose.--The purpose of this section is to create jobs, 
promote rural development, and help rural families and small businesses 
achieve cost savings by providing loans to qualified consumers to 
implement durable cost-effective energy efficiency measures.
    ``(b) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means--
                    ``(A) any public power district, public utility 
                district, or similar entity, or any electric 
                cooperative described in section 501(c)(12) or 
                1381(a)(2) of the Internal Revenue Code of 1986, that 
                borrowed and repaid, prepaid, or is paying an electric 
                loan made or guaranteed by the Rural Utilities Service 
                (or any predecessor agency);
                    ``(B) any entity primarily owned or controlled by 
                one or more entities described in subparagraph (A); or
                    ``(C) any other entity that is an eligible borrower 
                of the Rural Utility Service, as determined under 
                section 1710.101 of title 7, Code of Federal 
                Regulations (or a successor regulation).
            ``(2) Energy efficiency measures.--The term `energy 
        efficiency measures' means, for or at property served by an 
        eligible entity, structural improvements and investments in 
        cost-effective, commercial technologies to increase energy 
        efficiency.
            ``(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 the eligible entity.
            ``(4) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Administrator of the Rural 
        Utilities Service.
    ``(c) Loans to Eligible Entities.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall make loans to eligible entities that agree to use the 
        loan funds to make loans to qualified consumers for the purpose 
        of implementing energy efficiency measures.
            ``(2) Requirements.--
                    ``(A) In general.--As a condition of receiving a 
                loan under this subsection, an eligible entity shall--
                            ``(i) establish a list of energy efficiency 
                        measures that is expected to decrease energy 
                        use or costs of qualified consumers;
                            ``(ii) prepare an implementation plan for 
                        use of the loan funds, including use of any 
                        interest to be received pursuant to subsection 
                        (d)(1)(A);
                            ``(iii) provide for appropriate measurement 
                        and verification to ensure--
                                    ``(I) the effectiveness of the 
                                energy efficiency loans made by the 
                                eligible entity; and
                                    ``(II) that there is no conflict of 
                                interest in carrying out this section; 
                                and
                            ``(iv) demonstrate expertise in effective 
                        use of energy efficiency measures at an 
                        appropriate scale.
                    ``(B) Revision of list of energy efficiency 
                measures.--Subject to the approval of the Secretary, an 
                eligible entity may update the list required under 
                subparagraph (A)(i) to account for newly available 
                efficiency technologies.
                    ``(C) Existing energy efficiency programs.--An 
                eligible entity that, at any time before the date that 
                is 60 days after the date of enactment of this section, 
                has established an energy efficiency program for 
                qualified consumers may use an existing list of energy 
                efficiency measures, implementation plan, or 
                measurement and verification system of that program to 
                satisfy the requirements of subparagraph (A) if the 
                Secretary determines the list, plan, or systems are 
                consistent with the purposes of this section.
            ``(3) No interest.--A loan under this subsection shall bear 
        no interest.
            ``(4) Repayment.--With respect to a loan under paragraph 
        (1)--
                    ``(A) the term shall not exceed 20 years from the 
                date on which the loan is closed; and
                    ``(B) except as provided in paragraph (6), the 
                repayment of each advance shall be amortized for a 
                period not to exceed 10 years.
            ``(5) Amount of advances.--Any advance of loan funds to an 
        eligible entity in any single year shall not exceed 50 percent 
        of the approved loan amount.
            ``(6) Special advance for start-up activities.--
                    ``(A) In general.--In order to assist an eligible 
                entity in defraying the appropriate start-up costs (as 
                determined by the Secretary) of establishing new 
                programs or modifying existing programs to carry out 
                subsection (d), the Secretary shall allow an eligible 
                entity to request a special advance.
                    ``(B) Amount.--No eligible entity may receive a 
                special advance under this paragraph for an amount that 
                is greater than 4 percent of the loan amount received 
                by the eligible entity under paragraph (1).
                    ``(C) Repayment.--Repayment of the special 
                advance--
                            ``(i) shall be required during the 10-year 
                        period beginning on the date on which the 
                        special advance is made; and
                            ``(ii) at the election of the eligible 
                        entity, may be deferred to the end of the 10-
                        year period.
            ``(7) Limitation.--All special advances shall be made under 
        a loan described in paragraph (1) during 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 3 percent, 
                to be used for purposes that include--
                            ``(i) to establish a loan loss reserve; and
                            ``(ii) to offset personnel and program 
                        costs of eligible entities to provide the 
                        loans;
                    ``(B) shall finance energy efficiency measures for 
                the purpose of decreasing energy usage or costs of the 
                qualified consumer by an amount that ensures, to the 
                maximum extent practicable, 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 is or becomes attached to real property 
                (including a manufactured home) as a fixture;
                    ``(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, on the 
                condition that this requirement does not 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 by an eligible 
                entity 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.
    ``(e) Contract for Measurement and Verification, Training, and 
Technical Assistance.--
            ``(1) In general.--Not later than 90 days after the date of 
        enactment of this section, the Secretary--
                    ``(A) shall establish a plan for measurement and 
                verification, training, and technical assistance of the 
                program; and
                    ``(B) may enter into one or more contracts with a 
                qualified entity for the purposes of--
                            ``(i) providing measurement and 
                        verification activities; and
                            ``(ii) developing a program to provide 
                        technical assistance and training to the 
                        employees of eligible entities to carry out 
                        this section.
            ``(2) Use of subcontractors authorized.--A qualified entity 
        that enters into a contract under paragraph (1) may use 
        subcontractors to assist the qualified entity in carrying out 
        the contract.
    ``(f) Fast Start Demonstration Projects.--
            ``(1) In general.--The Secretary shall offer to enter into 
        agreements with eligible entities (or groups of eligible 
        entities) that have energy efficiency programs described in 
        subsection (c)(2)(C) to establish an energy efficiency loan 
        demonstration projects consistent with the purposes of this 
        section.
            ``(2) Evaluation criteria.--In determining which eligible 
        entities to award loans under this section, the Secretary shall 
        take into consideration eligible entities 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) in the case of a single eligible 
                        entity, not fewer than 20,000 consumers; or
                            ``(ii) in the case of a group of eligible 
                        entities, not fewer than 80,000 consumers; and
                    ``(G) serve areas in which, as determined by the 
                Secretary, a large percentage of consumers reside--
                            ``(i) in manufactured homes; or
                            ``(ii) in housing units that are more than 
                        50 years old.
            ``(3) Deadline for implementation.--To the maximum extent 
        practicable, the Secretary shall enter into agreements 
        described in paragraph (1) by not later than 90 days after the 
        date of enactment of this section.
            ``(4) 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 enactment of this section.
            ``(5) Additional demonstration project authority.--
                    ``(A) In general.--The Secretary may conduct 
                demonstration projects in addition to the project 
                required by paragraph (1).
                    ``(B) Inapplicability of certain criteria.--The 
                additional demonstration projects may be carried out 
                without regard to subparagraphs (D), (F), or (G) of 
                paragraph (2).
    ``(g) Additional Authority.--The authority provided in this section 
is in addition to any other authority of the Secretary to offer loans 
under any other law.
    ``(h) Effective Period.--Subject to the availability of funds and 
except as otherwise provided in this section, the loans and other 
expenditures required to be made under this section shall be available 
until expended, with the Secretary authorized to make new loans as 
loans are repaid.
    ``(i) 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) 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; and
                    ``(B) chapter 35 of title 44, United States Code 
                (commonly known as the `Paperwork Reduction Act').
            ``(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.''.