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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2389 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 2389

  To help small businesses to develop, invest in, and purchase energy 
       efficient buildings, fixtures, equipment, and technology.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 17, 2007

  Mr. Shuler (for himself and Ms. Velazquez) introduced the following 
      bill; which was referred to the Committee on Small Business

_______________________________________________________________________

                                 A BILL

 
  To help small businesses to develop, invest in, and purchase energy 
       efficient buildings, fixtures, equipment, and technology.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Small Energy 
Efficient Businesses Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Larger 504 loan limits to help business develop energy 
                            efficient technologies and purchases.
Sec. 4. Reduced 7(a) fees and higher loan guarantees for purchase of 
                            energy efficient technologies.
Sec. 5. Small Business Sustainability Initiative.
Sec. 6. Small Business Administration to educate and promote energy 
                            efficiency ideas to small businesses and 
                            work with the small business community to 
                            make such information widely available.
Sec. 7. Energy saving debentures.
Sec. 8. Investments in energy saving small businesses.
Sec. 9. Renewable fuel capital investment company.
Sec. 10. Study and report.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Energy efficiency is in our national interest for our 
        long term economic well being, for the health and safety of our 
        citizens and the world, and for our independence and security.
            (2) Small businesses are more efficient, nimble, and 
        innovative than large businesses and therefore more likely to 
        integrate and benefit from energy efficient technology advances 
        and upgrades, but they are less likely to have the capital to 
        institute these advances quickly.
            (3) The majority of businesses (two-thirds) say they have 
        been unable to invest in comprehensive energy efficiency 
        programs for their businesses thus far, though they know of 
        them and believe they are effective.
            (4) A pilot program has demonstrated that individualized 
        counseling and training combined with loan and grant 
        availability and other incentives are very popular and 
        effective in helping small businesses learn about and adopt 
        energy conservation methods.
            (5) The energy saving benefit of such programs, if they can 
        be implemented on a national basis, would contribute 
        significantly to our energy independence and security.
            (6) New and emerging technologies are on the rise, and 
        small businesses are leading the way, for example the vast 
        majority of renewable fuels producers, such as biodiesel and 
        ethanol, are small businesses.
            (7) Small businesses currently use almost half of the 
        Nation's business related energy consumption and employ half of 
        the Nation's workforce, yet the Energy Star program, the lead 
        Federal energy efficiency program allocates less than 2 percent 
        of its resources to its small business program and should 
        allocate more to educate small businesses.
            (8) Therefore, it is in the national interest for the 
        Federal Government to invest in incentives in the form of 
        improved loan terms, additional investment inducements, and 
        expert counseling and information to assist small businesses to 
        develop, invest in, and purchase energy efficient buildings, 
        equipment, fixtures, and other technology.

SEC. 3. LARGER 504 LOAN LIMITS TO HELP BUSINESS DEVELOP ENERGY 
              EFFICIENT TECHNOLOGIES AND PURCHASES.

    (a) Eligibility for Energy Efficiency Projects.--Section 501(d)(3) 
of the Small Business Investment Act of 1958 (15 U.S.C. 695(d)(3)) is 
amended--
            (1) in subparagraph (G) by striking ``or'' at the end;
            (2) in subparagraph (H) by striking the period at the end 
        and inserting a comma; and
            (3) by inserting after subparagraph (H) the following:
                    ``(I) reduction of energy consumption by at least 
                10 percent,
                    ``(J) increased use of sustainable design or low-
                impact design to produce buildings that reduce the use 
                of non-renewable resources, minimize environmental 
                impact, and relate people with the natural environment, 
                or
                    ``(K) plant, equipment and process upgrades of 
                renewable energy sources such as micropower or 
                renewable fuels producers including biodiesel and 
                ethanol producers.''.
    (b) Loans for Plant Projects Used for Energy-Efficient Purposes.--
Section 502(2)(A) of the Small Business Investment Act of 1958 (15 
U.S.C. 696(2)(A)) is amended--
            (1) in clause (ii) by striking ``and'' at the end;
            (2) in clause (iii) by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new clauses:
                            ``(iv) $4,000,000 for each project that 
                        reduces the borrower's energy consumption by at 
                        least 10 percent; and
                            ``(v) $4,000,000 for each project that 
                        generates renewable energy or renewable fuels, 
                        such as biodiesel or ethanol production.''.

SEC. 4. REDUCED 7(A) FEES AND HIGHER LOAN GUARANTEES FOR PURCHASE OF 
              ENERGY EFFICIENT TECHNOLOGIES.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended by adding at the end the following:
            ``(35) Loans for energy efficient technologies.--The 
        Administrator shall carry out a program for loans the proceeds 
        of which are used to purchase energy efficient equipment or 
        fixtures or to reduce the energy consumption of the borrower, 
        including, but not limited to, renewable fuels and energy 
        products such as biodiesel and ethanol, by 10 percent or more. 
        For a loan made under this paragraph, the following shall 
        apply:
                    ``(A) The loan shall include the participation by 
                the Administration equal to 90 percent of the balance 
                of the financing outstanding at the time of 
                disbursement.
                    ``(B) The fees on the loan under paragraphs (18) 
                and (23) shall be reduced by half.''.

SEC. 5. SMALL BUSINESS SUSTAINABILITY INITIATIVE.

    Section 21 of the Small Business Act (15 U.S.C. 648) is amended by 
adding at the end the following:
    ``(n) Small Business Sustainability Initiative.--
            ``(1) In general.--A Small Business Development Center may 
        apply for an additional grant to carry out a small business 
        sustainability initiative program.
            ``(2) Elements of program.--Under a program under paragraph 
        (1), the Center shall--
                    ``(A) provide necessary support to smaller and 
                medium-sized businesses to--
                            ``(i) evaluate energy efficiency and green 
                        building opportunities;
                            ``(ii) evaluate renewable energy sources 
                        such as the use of solar and small wind to 
                        supplement power consumption;
                            ``(iii) secure financing to achieve energy 
                        efficiency or to construct green buildings; and
                            ``(iv) empower management to implement 
                        energy efficiency projects;
                    ``(B) assist entrepreneurs with clean technology 
                development and technology commercialization through--
                            ``(i) technology assessment;
                            ``(ii) intellectual property;
                            ``(iii) Small Business Innovation Research 
                        submissions;
                            ``(iv) strategic alliances;
                            ``(v) business model development; and
                            ``(vi) preparation for investors; and
                    ``(C) help small business improve environmental 
                performance by shifting to less hazardous materials and 
                reducing waste and emissions at the source, including 
                by providing assistance for businesses to adapt the 
                materials they use, the processes they operate, and the 
                products and services they produce.
            ``(3) Minimum amount.--Each grant under this subsection 
        shall be for at least $150,000.
            ``(4) Maximum amount.--A grant under this subsection may 
        not exceed $300,000.
            ``(5) Authorization of appropriations.--Subject to amounts 
        approved in advance in appropriations Acts and separate from 
        amounts approved to carry out section 21(a)(1), the 
        Administrator may make grants or enter into cooperative 
        agreements to carry out the provisions of this subsection.''.

SEC. 6. SMALL BUSINESS ADMINISTRATION TO EDUCATE AND PROMOTE ENERGY 
              EFFICIENCY IDEAS TO SMALL BUSINESSES AND WORK WITH THE 
              SMALL BUSINESS COMMUNITY TO MAKE SUCH INFORMATION WIDELY 
              AVAILABLE.

    The Small Business Act is amended--
            (1) by redesignating section 37 as section 99; and
            (2) by inserting after section 36 (15 U.S.C. 657f) the 
        following:

``SEC. 37. PROGRAM TO PROVIDE EDUCATION ON ENERGY EFFICIENCY.

    ``(a) Program Required.--The Administrator shall develop and 
coordinate a Government-wide program, building on the Energy Star for 
Small Business program, to assist small businesses in--
            ``(1) becoming more energy efficient;
            ``(2) understanding the cost savings from improved energy 
        efficiency; and
            ``(3) identifying financing options for energy efficiency 
        upgrades.
    ``(b) Consultation and Cooperation.--The program required by 
subsection (a) shall be developed and coordinated--
            ``(1) in consultation with the Secretary of Energy and the 
        Administrator of the Environmental Protection Agency; and
            ``(2) in cooperation with any entities the Administrator 
        considers appropriate, such as industry trade associations, 
        industry members, and energy efficiency organizations.
    ``(c) Availability of Information.--The Administrator shall make 
available the information and materials developed under the program 
required by subsection (a) to--
            ``(1) small businesses; and
            ``(2) other Federal programs for energy efficiency, such as 
        the Energy Star for Small Business program.
    ``(d) Strategy and Report.--
            ``(1) Strategy required.--The Administrator shall develop a 
        strategy to educate, encourage, and assist small business to 
        adopt energy efficient building fixtures and equipment.
            ``(2) Report.--Not later than December 31, 2008, the 
        Administrator shall submit to Congress a report containing a 
        plan to implement the strategy.''.

SEC. 7. ENERGY SAVING DEBENTURES.

    Section 303 of the Small Business Investment Act of 1958 (15 U.S.C. 
683) is amended by adding at the end the following new subsection:
    ``(k) Energy Saving Debentures.--
            ``(1) In general.--In addition to any other authority under 
        this Act, a small business investment company licensed after 
        September 30, 2007, shall have authority to issue Energy Saving 
        debentures.
            ``(2) Energy saving debenture defined.--As used in this 
        Act, the term `Energy Saving debenture' means a deferred 
        interest debenture that--
                    ``(A) is issued at a discount;
                    ``(B) has a five-year maturity or a ten-year 
                maturity;
                    ``(C) requires no interest payment or annual charge 
                for the first five years;
                    ``(D) is restricted to Energy Saving qualified 
                investments; and
                    ``(E) is issued at no cost (as defined in section 
                502 of the Credit Reform Act of 1990) with respect to 
                purchasing and guaranteeing the debenture.
            ``(3) Energy saving qualified investment defined.--As used 
        in this Act, the term `Energy Saving qualified investment' 
        means investment in a small business that is primarily engaged 
        in researching, manufacturing, developing, or providing 
        products, goods, or services that reduce the use or consumption 
        of non-renewable energy resources.''.

SEC. 8. INVESTMENTS IN ENERGY SAVING SMALL BUSINESSES.

    (a) Maximum Leverage.--Paragraph (2) of subsection (b) of section 
303 of the Small Business Investment Act of 1958 (15 U.S.C. 303(b)(2)) 
is amended by adding at the end the following new subparagraph:
                    ``(D) Investments in energy saving small 
                businesses.--In calculating the outstanding leverage of 
                a company for purposes of subparagraph (A), the 
                Administrator shall not include the amount of the cost 
                basis of any Energy Saving qualified investment (as 
                defined in subsection (k)) made after September 30, 
                2007, by a company licensed after September 30, 2007, 
                in a smaller enterprise, to the extent that the total 
                of such amounts does not exceed 50 percent of the 
                company's private capital, subject to such terms as the 
                Administrator may impose to assure no cost (as defined 
                in section 502 of the Federal Credit Reform Act of 
                1990) with respect to purchasing or guaranteeing any 
                debenture involved.''.
    (b) Maximum Aggregate Amount of Leverage.--Paragraph (4) of 
subsection (b) of section 303 of the Small Business Investment Act of 
1958 (15 U.S.C. 303(b)(4)) is amended by adding at the end the 
following new subparagraph:
                    ``(E) Investments in energy saving small 
                businesses.--In calculating the aggregate outstanding 
                leverage of a company for purposes of subparagraph (A), 
                the Administrator shall not include the amount of the 
                cost basis of any Energy Saving qualified investment 
                (as defined in subsection (k)) made after September 30, 
                2007, by a company licensed after September 30, 2007, 
                in a smaller enterprise, to the extent that the total 
                of such amounts does not exceed 50 percent of the 
                company's private capital, subject to such terms as the 
                Administrator may impose to assure no cost (as defined 
                in section 502 of the Federal Credit Reform Act of 
                1990) with respect to purchasing or guaranteeing any 
                debenture involved.''.

SEC. 9. RENEWABLE FUEL CAPITAL INVESTMENT COMPANY.

    Title III of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following new part:

       ``PART C--RENEWABLE FUEL CAPITAL INVESTMENT PILOT PROGRAM

``SEC. 381. DEFINITIONS.

    ``In this part, the following definitions apply:
            ``(1) Venture capital.--The term `venture capital' means 
        capital in the form of equity capital investments. For the 
        purposes of this paragraph, the term `equity capital' has the 
        same meaning given such term in section 303(g)(4).
            ``(2) Renewable fuel capital investment company.--The term 
        `Renewable Fuel Capital Investment Company' means a company 
        that--
                    ``(A) has been granted final approval by the 
                Administrator under section 384(e); and
                    ``(B) has entered into a participation agreement 
                with the Administrator.
            ``(3) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists a small business concern with business 
        development.
            ``(4) Participation agreement.--The term `participation 
        agreement' means an agreement, between the Administrator and a 
        company granted final approval under section 384(e), that--
                    ``(A) details the company's operating plan and 
                investment criteria; and
                    ``(B) requires the company to make investments in 
                smaller enterprises primarily engaged in researching, 
                manufacturing, developing, or bringing to market 
                renewable energy sources.
            ``(5) Renewable energy.--The term `renewable energy means' 
        energy derived from resources that are regenerative or that 
        cannot be depleted, including but not limited to ethanol and 
        biodiesel fuels.
            ``(6) State.--The term `State' means such of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the 
        Commonwealth of the Northern Mariana Islands, and any other 
        commonwealth, territory, or possession of the United States.

``SEC. 382. PURPOSES.

    ``The purposes of the Renewable Fuel Capital Investment Program 
established under this part are--
            ``(1) to promote the research, development, manufacture and 
        bringing to market of renewable energy sources by encouraging 
        venture capital investments in smaller enterprises primarily 
        engaged such activities; and
            ``(2) to establish a venture capital program, with the 
        mission of addressing the unmet equity investment needs of 
        small enterprises engaged in researching, developing, 
        manufacturing, and bringing to market renewable energy sources, 
        to be administered by the Administrator--
                    ``(A) to enter into participation agreements with 
                Renewable Fuel Capital Investment companies;
                    ``(B) to guarantee debentures of Renewable Fuel 
                Capital Investment companies to enable each such 
                company to make venture capital investments in smaller 
                enterprises engaged in the research, development, 
                manufacture, and bringing to market renewable energy 
                sources; and
                    ``(C) to make grants to Renewable Fuel Investment 
                Capital companies, and to other entities, for the 
                purpose of providing operational assistance to smaller 
                enterprises financed, or expected to be financed, by 
                such companies.

``SEC. 383. ESTABLISHMENT.

    ``In accordance with this part, the Administrator shall establish a 
Renewable Fuel Capital Investment Program, under which the 
Administrator may--
            ``(1) enter into participation agreements with companies 
        granted final approval under section 384(e) for the purposes 
        set forth in section 382; and
            ``(2) guarantee the debentures issued by Renewable Fuel 
        Capital Investment companies as provided in section 385.

``SEC. 384. SELECTION OF RENEWABLE FUEL CAPITAL INVESTMENT COMPANIES.

    ``(a) Eligibility.--A company shall be eligible to apply to 
participate, as a Renewable Fuel Capital Investment company, in the 
program established under this part if--
            ``(1) the company is a newly formed for-profit entity or a 
        newly formed for-profit subsidiary of an existing entity;
            ``(2) the company has a management team with experience in 
        alternative energy financing or relevant venture capital 
        financing; and
            ``(3) the company has a primary objective of investment in 
        companies that research, manufacture, develop, or bring to 
        market renewable energy sources.
    ``(b) Application.--To participate, as a Renewable Fuel Capital 
Investment company, in the program established under this part a 
company meeting the eligibility requirements set forth in subsection 
(a) shall submit an application to the Administrator that includes--
            ``(1) a business plan describing how the company intends to 
        make successful venture capital investments in smaller 
        businesses primarily engaged in the research, manufacture, 
        development, or bringing to market of renewable energy sources;
            ``(2) information regarding the relevant venture capital 
        qualifications and general reputation of the company's 
        management;
            ``(3) a description of how the company intends to seek to 
        address the unmet capital needs of the smaller businesses 
        served;
            ``(4) a proposal describing how the company intends to use 
        the grant funds provided under this part to provide operational 
        assistance to smaller enterprises financed by the company, 
        including information regarding whether the company intends to 
        use licensed professionals when necessary on the company's 
        staff or from an outside entity;
            ``(5) with respect to binding commitments to be made to the 
        company under this part, an estimate of the ratio of cash to 
        in-kind contributions;
            ``(6) a description of the criteria to be used to evaluate 
        whether and to what extent the company meets the objectives of 
        the program established under this part;
            ``(7) information regarding the management and financial 
        strength of any parent firm, affiliated firm, or any other firm 
        essential to the success of the company's business plan; and
            ``(8) such other information as the Administrator may 
        require.
    ``(c) Conditional Approval.--
            ``(1) In general.--From among companies submitting 
        applications under subsection (b), the Administrator shall, in 
        accordance with this subsection, conditionally approve 
        companies to participate in the Renewable Fuel Capital 
        Investment Program.
            ``(2) Selection criteria.--In selecting companies under 
        paragraph (1), the Administrator shall consider the following:
                    ``(A) The likelihood that the company will meet the 
                goal of its business plan.
                    ``(B) The experience and background of the 
                company's management team.
                    ``(C) The need for venture capital investments in 
                the geographic areas in which the company intends to 
                invest.
                    ``(D) The extent to which the company will 
                concentrate its activities on serving the geographic 
                areas in which it intends to invest.
                    ``(E) The likelihood that the company will be able 
                to satisfy the conditions under subsection (d).
                    ``(F) The extent to which the activities proposed 
                by the company will expand economic opportunities in 
                the geographic areas in which the company intends to 
                invest.
                    ``(G) The strength of the company's proposal to 
                provide operational assistance under this part as the 
                proposal relates to the ability of the applicant to 
                meet applicable cash requirements and properly utilize 
                in-kind contributions, including the use of resources 
                for the services of licensed professionals, when 
                necessary, whether provided by persons on the company's 
                staff or by persons outside of the company.
                    ``(H) Any other factors deemed appropriate by the 
                Administrator.
            ``(3) Nationwide distribution.--The Administrator shall 
        select companies under paragraph (1) in such a way that 
        promotes investment nationwide.
    ``(d) Requirements To Be Met for Final Approval.--The Administrator 
shall grant each conditionally approved company a period of time, not 
to exceed 2 years, to satisfy the following requirements:
            ``(1) Capital requirement.--Each conditionally approved 
        company shall raise not less than $5,000,000 of private capital 
        or binding capital commitments from one or more investors 
        (other than agencies or departments of the Federal Government) 
        who met criteria established by the Administrator.
            ``(2) Nonadministration resources for operational 
        assistance.--
                    ``(A) In general.--In order to provide operational 
                assistance to smaller enterprises expected to be 
                financed by the company, each conditionally approved 
                company--
                            ``(i) shall have binding commitments (for 
                        contribution in cash or in kind)--
                                    ``(I) from any sources other than 
                                the Small Business Administration that 
                                meet criteria established by the 
                                Administrator;
                                    ``(II) payable or available over a 
                                multiyear period acceptable to the 
                                Administrator (not to exceed 10 years); 
                                and
                                    ``(III) in an amount not less than 
                                30 percent of the total amount of 
                                capital and commitments raised under 
                                paragraph (1);
                            ``(ii) shall have purchased an annuity--
                                    ``(I) from an insurance company 
                                acceptable to the Administrator;
                                    ``(II) using funds (other than the 
                                funds raised under paragraph (1)), from 
                                any source other than the 
                                Administrator; and
                                    ``(III) that yields cash payments 
                                over a multiyear period acceptable to 
                                the Administrator (not to exceed 10 
                                years) in an amount not less than 30 
                                percent of the total amount of capital 
                                and commitments raised under paragraph 
                                (1); or
                            ``(iii) shall have binding commitments (for 
                        contributions in cash or in kind) of the type 
                        described in clause (i) and shall have 
                        purchased an annuity of the type described in 
                        clause (ii), which in the aggregate make 
                        available, over a multiyear period acceptable 
                        to the Administrator (not to exceed 10 years), 
                        an amount not less than 30 percent of the total 
                        amount of capital and commitments raised under 
                        paragraph (1).
                    ``(B) Exception.--The Administrator may, in the 
                discretion of the Administrator and based upon a 
                showing of special circumstances and good cause, 
                consider an applicant to have satisfied the 
                requirements of subparagraph (A) if the applicant has--
                            ``(i) a viable plan that reasonably 
                        projects the capacity of the applicant to raise 
                        the amount (in cash or in-kind) required under 
                        subparagraph (A); and
                            ``(ii) binding commitments in an amount 
                        equal to not less than 20 percent of the total 
                        amount required under paragraph (A).
                    ``(C) Limitation.--In order to comply with the 
                requirements of subparagraphs (A) and (B), the total 
                amount of a company's in-kind contributions may not 
                exceed 50 percent of the company's total contributions.
    ``(e) Final Approval; Designation.--The Administrator shall, with 
respect to each applicant conditionally approved to operate as a 
Renewable Fuel Capital Investment Company under subsection (c), 
either--
            ``(1) grant final approval to the applicant to operate as a 
        Renewable Fuel Capital Investment company under this part and 
        designate the applicant as such a company, if the applicant--
                    ``(A) satisfies the requirements of subsection (d) 
                on or before the expiration of the time period 
                described in that subsection; and
                    ``(B) enters into a participation agreement with 
                the Administrator; or
            ``(2) if the applicant fails to satisfy the requirements of 
        subsection (d) on or before the expiration of the time period 
        described in that subsection, revoke the conditional approval 
        granted under that subsection.

``SEC. 385. DEBENTURES.

    ``(a) In General.--The Administrator may guarantee the timely 
payment of principal and interest, as scheduled, on debentures issued 
by any Renewable Fuel Capital Investment company.
    ``(b) Terms and Conditions.--The Administrator may make guarantees 
under this section on such terms and conditions as it deems 
appropriate, except that the term of any debenture guaranteed under 
this section shall not exceed 15 years.
    ``(c) Full Faith and Credit of the United States.--The full faith 
and credit of the United States is pledged to pay all amounts that may 
be required to be paid under any guarantee under this part.
    ``(d) Maximum Guarantee.--
            ``(1) In general.--Under this section, the Administrator 
        may guarantee the debentures issued by a Renewable Fuel Capital 
        Investment company only to the extent that the total face 
        amount of outstanding guaranteed debentures of such company 
        does not exceed 150 percent of the private capital of the 
        company, as determined by the Administrator.
            ``(2) Treatment of certain federal funds.--For the purposes 
        of paragraph (1), private capital shall include capital that is 
        considered to be Federal funds, if such capital is contributed 
        by an investor other than an agency or department of the 
        Federal Government.

``SEC. 386. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ``(a) Issuance.--The Administrator may issue trust certificates 
representing ownership of all or a fractional part of debentures issued 
by a Renewable Fuel Capital Investment company and guaranteed by the 
Administrator under this part, if such certificates are based on and 
backed by a trust or pool approved by the Administrator and composed 
solely of guaranteed debentures.
    ``(b) Guarantee.--
            ``(1) In general.--The Administrator may, under such terms 
        and conditions as it deems appropriate, guarantee the timely 
        payment of the principal of and interest on trust certificates 
        issued by the Administrator or its agents for purposes of this 
        section.
            ``(2) Limitation.--Each guarantee under this subsection 
        shall be limited to the extent of principal and interest on the 
        guaranteed debentures that compose the trust or pool.
            ``(3) Prepayment or default.--In the event that a debenture 
        in a trust or pool is prepaid, or in the event of default of 
        such a debenture, the guarantee of timely payment of principal 
        and interest on the trust certificates shall be reduced in 
        proportion to the amount of principal and interest such prepaid 
        debenture represents in the trust or pool. Interest on prepaid 
        or defaulted debentures shall accrue and be guaranteed by the 
        Administrator only through the date of payment of the 
        guarantee. At any time during its term, a trust certificate may 
        be called for redemption due to prepayment or default of all 
        debentures.
    ``(c) Full Faith and Credit of the United States.--The full faith 
and credit of the United States is pledged to pay all amounts that may 
be required to be paid under any guarantee of a trust certificate 
issued by the Administrator or its agents under this section.
    ``(d) Fees.--The Administrator shall not collect a fee for any 
guarantee of a trust certificate under this section, but any agent of 
the Administrator may collect a fee approved by the Administrator for 
the functions described in subsection (f )(2).
    ``(e) Subrogation and Ownership Rights.--
            ``(1) Subrogation.--In the event the Administrator pays a 
        claim under a guarantee issued under this section, it shall be 
        subrogated fully to the rights satisfied by such payment.
            ``(2) Ownership rights.--No Federal, State, or local law 
        shall preclude or limit the exercise by the Administrator of 
        its ownership rights in the debentures residing in a trust or 
        pool against which trust certificates are issued under this 
        section.
    ``(f) Management and Administration.--
            ``(1) Registration.--The Administrator may provide for a 
        central registration of all trust certificates issued under 
        this section.
            ``(2) Contracting of functions.--
                    ``(A) In general.--The Administrator may contract 
                with an agent or agents to carry out on behalf of the 
                Administrator the pooling and the central registration 
                functions provided for in this section including, 
                notwithstanding any other provision of law--
                            ``(i) maintenance, on behalf of and under 
                        the direction of the Administrator, of such 
                        commercial bank accounts or investments in 
                        obligations of the United States as may be 
                        necessary to facilitate the creation of trusts 
                        or pools backed by debentures guaranteed under 
                        this part; and
                            ``(ii) the issuance of trust certificates 
                        to facilitate the creation of such trusts or 
                        pools.
                    ``(B) Fidelity bond or insurance requirement.--Any 
                agent performing functions on behalf of the 
                Administrator under this paragraph shall provide a 
                fidelity bond or insurance in such amounts as the 
                Administrator determines to be necessary to fully 
                protect the interests of the United States.
            ``(3) Regulation of brokers and dealers.--The Administrator 
        may regulate brokers and dealers in trust certificates issued 
        under this section.
            ``(4) Electronic registration.--Nothing in this subsection 
        may be construed to prohibit the use of a book-entry or other 
        electronic form of registration for trust certificates issued 
        under this section.

``SEC. 387. FEES.

    ``(a) In General.--Except as provided in section 386(d), the 
Administrator may charge such fees as it deems appropriate with respect 
to any guarantee or grant issued under this part, in an amount 
established annually by the Administration, as necessary to reduce to 
zero the cost (as defined in section 502 of the Federal Credit Reform 
Act of 1990) to the Administration of purchasing and guaranteeing 
debentures under this Act, which amounts shall be paid to and retained 
by the Administration.
    ``(b) Offset.--The Administrator may, as provided by section 388, 
offset fees changed and collected under subsection (a).

``SEC. 388. FEE CONTRIBUTION.

    ``(a) In General.--To the extent that amounts are made available to 
the Administrator for the purpose of fee contributions, the 
administrator shall contribute to fees paid by the Renewable Fuel 
Capital Investment companies under section 387.
    ``(b) Annual Adjustment.--Each fee contribution under subsection 
(a) shall be effective for one fiscal year and shall be adjusted as 
necessary for each fiscal year thereafter to ensure that amounts under 
subsection (a) are fully used. The fee contribution for a fiscal year 
shall be based on the outstanding commitments made and the guarantees 
and grants that the Administrator projects will be made during that 
fiscal year, given the program level authorized by law for that fiscal 
year and any other factors that the Administrator deems appropriate.

``SEC. 389. OPERATIONAL ASSISTANCE GRANTS.

    ``(a) In General.--
            ``(1) Authority.--In accordance with this section, the 
        Administrator may make grants to Renewable Fuel Capital 
        Investment companies and to other entities, as authorized by 
        this part, to provide operational assistance to smaller 
        enterprises financed, or expected to be financed, by such 
        companies or other entities.
            ``(2) Terms.--Grants made under this subsection shall be 
        made over a multiyear period not to exceed 10 years, under such 
        other terms as the Administrator may require.
            ``(3) Grants to specialized small business investment 
        companies.--
                    ``(A) Authority.--In accordance with this section, 
                the Administrator may make grants to specialized small 
                business investment companies to provide operational 
                assistance to smaller enterprises financed, or expected 
                to be financed, by such companies after the effective 
                date of the Small Energy Efficient Businesses Act.
                    ``(B) Use of funds.--The proceeds of a grant made 
                under this paragraph may be used by the company 
                receiving such grant only to provide operational 
                assistance in connection with an equity investment 
                (made with capital raised after the effective date of 
                the Small Energy Efficient Businesses Act) in a 
                business located in a low-income geographic area.
                    ``(C) Submission of plans.--A specialized small 
                business investment company shall be eligible for a 
                grant under this section only if the company submits to 
                the Administrator, in such form and manner as the 
                Administrator may require, a plan for use of the grant.
            ``(4) Grant amount.--
                    ``(A) Renewable fuel capital investment 
                companies.--The amount of a grant made under this 
                subsection to a Renewable Fuel Capital Investment 
                company shall be equal to the resources (in cash or in 
                kind) raised by the company under section 354(d)(2).
                    ``(B) Other entities.--The amount of a grant made 
                under this subsection to any entity other than a 
                Renewable Fuel Capital Investment company shall be 
                equal to the resources (in cash or in kind) raised by 
                the entity in accordance with the requirements 
                applicable to Renewable Fuel Capital Investment 
                companies set forth in section 384(d)(2).
            ``(5) Pro rata reductions.--If the amount made available to 
        carry out this section is insufficient for the Administrator to 
        provide grants in the amounts provided for in paragraph (4), 
        the Administrator shall make pro rata reductions in the amounts 
        otherwise payable to each company and entity under such 
        paragraph.
    ``(b) Supplemental Grants.--
            ``(1) In general.--The Administrator may make supplemental 
        grants to Renewable Fuel Capital Investment companies and to 
        other entities, as authorized by this part under such terms as 
        the Administrator may require, to provide additional 
        operational assistance to smaller enterprises financed, or 
        expected to be financed, by the companies.
            ``(2) Matching requirement.--The Administrator may require, 
        as a condition of any supplemental grant made under this 
        subsection, that the company or entity receiving the grant 
        provide from resources (in a cash or in kind), other then those 
        provided by the Administrator, a matching contribution equal to 
        the amount of the supplemental grant.
    ``(c) Limitation.--None of the assistance made available under this 
section may be used for any overhead or general and administrative 
expense of a Renewable Fuel Capital Investment company or a specialized 
small business investment company.

``SEC. 390. BANK PARTICIPATION.

    ``(a) In General.--Except as provided in subsection (b), any 
national bank, any member bank of the Federal Reserve System, and (to 
the extent permitted under applicable State law) any insured bank that 
is not a member of such system, may invest in any Renewable Fuel 
Capital Investment company, or in any entity established to invest 
solely in Renewable Fuel Capital Investment companies.
    ``(b) Limitation.--No bank described in subsection (a) may make 
investments described in such subsection that are greater than 5 
percent of the capital and surplus of the bank.

``SEC. 391. FEDERAL FINANCING BANK.

    ``Section 318 shall not apply to any debenture issued by a 
Renewable Fuel Capital Investment company under this part.

``SEC. 392. REPORTING REQUIREMENT.

    ``Each Renewable Fuel Capital Investment company that participates 
in the program established under this part shall provide to the 
Administrator such information as the Administrator may require, 
including--
            ``(1) information related to the measurement criteria that 
        the company proposed in its program application; and
            ``(2) in each case in which the company under this part 
        makes an investment in, or a loan or a grant to, a business 
        that is not primarily engaged in the research, development, 
        manufacture, or bringing to market or renewable energy sources, 
        a report on the nature, origin, and revenues of the business in 
        which investments are made.

``SEC. 393. EXAMINATIONS.

    ``(a) In General.--Each Renewable Fuel Capital Investment company 
that participates in the program established under this part shall be 
subject to examinations made at the direction of the Investment 
Division of the Small Business Administration in accordance with this 
section.
    ``(b) Assistance of Private Sector Entities.--Examinations under 
this section may be conducted with the assistance of a private sector 
entity that has both the qualifications and the expertise necessary to 
conduct such examinations.
    ``(c) Costs.--
            ``(1) Assessment.--
                    ``(A) In general.--The Administrator may assess the 
                cost of examinations under this section, including 
                compensation of the examiners, against the company 
                examined.
                    ``(B) Payment.--Any company against which the 
                Administrator assesses costs under this paragraph shall 
                pay such costs.
            ``(2) Deposit of funds.--Funds collected under this section 
        shall be deposited in the account for salaries and expenses of 
        the Small Business Administration.

``SEC. 394. MISCELLANEOUS.

    ``To the extent such procedures are not inconsistent with the 
requirements of this part, the Administrator may take such action as 
set forth in sections 309, 311, 312, and 314 of this Act.

``SEC. 395. REMOVAL OR SUSPENSION OF DIRECTORS OR OFFICERS.

    ``Using the procedures for removing or suspending a director or an 
officer of a licensee set forth in section 313 (to the extent such 
procedures are not inconsistent with the requirements of this part), 
the Administrator may remove or suspend any director or officer of any 
Renewable Fuel Capital Investment company.

``SEC. 396. REGULATIONS.

    ``The Administrator may issue such regulations as it deems 
necessary to carry out the provisions of this part in accordance with 
its purposes.

``SEC. 397. AUTHORIZATIONS OF APPROPRIATIONS.

    ``(a) Grants.--The Administrator is authorized to make $15,000,000 
per fiscal year in operational assistance grants.
    ``(b) Funds Collected for Examinations.--Funds deposited under 
section 393(c)(2) are authorized to be appropriated only for the costs 
of examinations under section 393 and for the costs of other oversight 
activities with respect to the program established under this part.''.

SEC. 10. STUDY AND REPORT.

    The Administrator shall conduct a study of the Renewable Fuel 
Capital Investment Program under part C of title III of the Small 
Business Investment Act of 1958. Not later than 3 years after the date 
of the enactment of this Act, the Administrator shall complete the 
study and submit to the Congress a report of the results of the study.
                                 <all>
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