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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5421 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5421

  To provide enhanced provisions for advanced nuclear energy projects 
  receiving loan guarantees through the Department of Energy, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            December 4, 2024

   Mr. Risch introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To provide enhanced provisions for advanced nuclear energy projects 
  receiving loan guarantees through the Department of Energy, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accelerating Reliable Capacity Act 
of 2024'' or the ``ARC Act of 2024''.

SEC. 2. NEW NUCLEAR INVESTMENT ACCELERATOR PROGRAM.

    (a) Purpose.--The purpose of this section is to increase cost 
certainty for capital-intensive projects for which a guarantee is 
provided under section 1703 or 1706 of the Energy Policy Act of 2005 
(42 U.S.C. 16513, 16517).
    (b) Definitions.--In this section:
            (1) Account.--The term ``account'' means the New Nuclear 
        Investment Accelerator Program Account established by 
        subsection (c)(1).
            (2) Advanced nuclear energy project.--The term ``advanced 
        nuclear energy project'' means a project for 1 or more advanced 
        nuclear reactors (as defined in section 951(b) of the Energy 
        Policy Act of 2005 (42 U.S.C. 16271(b))).
            (3) Class 2 estimate.--The term ``Class 2 estimate'' means 
        an estimate of the cost of a qualifying project that is 
        prepared in accordance with the industry-specific cost estimate 
        standards for nuclear power industries described in Recommended 
        Practice 115R-21 of the Association for the Advancement of Cost 
        Engineering entitled ``Cost Estimate Classification System--As 
        Applied in Engineering, Procurement, and Construction for the 
        Nuclear Power Industries'' (or a successor document).
            (4) Director.--The term ``Director'' means the Director of 
        the Loan Programs Office.
            (5) Expected payment amount.--The term ``expected payment 
        amount'' means the amount that the Director expects to pay to 
        the Federal Financing Bank under subsection (d)(2)(B) when a 
        qualifying project is placed in service.
            (6) Guarantee.--The term ``guarantee'' has the meaning 
        given the term in section 1701 of the Energy Policy Act of 2005 
        (42 U.S.C. 16511).
            (7) Loan programs office.--The term ``Loan Programs 
        Office'' means the Loan Programs Office of the Department of 
        Energy.
            (8) Overrun.--The term ``overrun'', with respect to the 
        costs of a qualifying project, means any costs in excess of the 
        point base estimate of the Class 2 estimate approved as 
        described in paragraph (11)(C)(iv).
            (9) Point base estimate.--The term ``point base estimate'', 
        with respect to a Class 2 estimate, means the value of the 
        Class 2 estimate without adjustment for the accuracy range or 
        contingency.
            (10) Project delivery plan.--The term ``project delivery 
        plan'' means a project plan that includes--
                    (A) a project execution plan (as defined in 
                Recommended Practice 10S-90 of the Association for the 
                Advancement of Cost Engineering entitled ``Cost 
                Engineering Terminology'' (or a successor document));
                    (B) a contract risk allocation strategy that--
                            (i) aligns cost and risk incentives among 
                        all contracted stakeholders; and
                            (ii) follows--
                                    (I) the best practices described in 
                                Recommended Practice 67R-11 of the 
                                Association for the Advancement of Cost 
                                Engineering entitled ``Contract Risk 
                                Allocation--As Applied in Engineering, 
                                Procurement, and Construction'' (or a 
                                successor document); or
                                    (II) other appropriate industry 
                                best practices, as determined by the 
                                Secretary; and
                    (C) a plan for the division of responsibility 
                between contracted stakeholders that describes roles 
                and responsibilities for execution of that project 
                plan.
            (11) Qualifying project.--The term ``qualifying project'' 
        means an advanced nuclear energy project--
                    (A) that is reasonably expected to be constructed 
                on time and on budget;
                    (B) that has an expected cost equal to or greater 
                than $2,500,000,000, according to the Class 2 estimate 
                for that advanced nuclear energy project; and
                    (C) with respect to which--
                            (i) the loan amount expected to be 
                        guaranteed under section 1703 or 1706 of the 
                        Energy Policy Act of 2005 (42 U.S.C. 16513, 
                        16517) is--
                                    (I) loaned through the Federal 
                                Financing Bank; and
                                    (II) equal to or greater than 
                                $2,000,000,000;
                            (ii) the borrower of that amount--
                                    (I) has established and submitted 
                                to the Director a project delivery 
                                plan;
                                    (II) has established and submitted 
                                to the Secretary--
                                            (aa) a Class 2 estimate 
                                        with--

                                                    (AA) basis of 
                                                estimate documentation 
                                                for that Class 2 
                                                estimate; and

                                                    (BB) a qualifying 
                                                project cost risk 
                                                analysis;

                                            (bb) a resource-loaded 
                                        integrated project schedule 
                                        with--

                                                    (AA) basis of 
                                                estimate documentation 
                                                for that resource-
                                                loaded integrated 
                                                project schedule; and

                                                    (BB) a qualifying 
                                                project schedule risk 
                                                analysis; and

                                            (cc) a labor survey 
                                        analysis report with--

                                                    (AA) basis of 
                                                estimate documentation 
                                                for that labor survey 
                                                analysis report; and

                                                    (BB) a labor risk 
                                                analysis; and

                                    (III) has established procedures 
                                with the Secretary to ensure enhanced 
                                project oversight, including--
                                            (aa) a rolling forecast 
                                        that--

                                                    (AA) updates the 
                                                resource-loaded 
                                                integrated project 
                                                schedule not less 
                                                frequently than 
                                                annually, in alignment 
                                                with the approved 
                                                changes in the 
                                                applicable change 
                                                management program; and

                                                    (BB) includes a new 
                                                qualifying project 
                                                schedule risk analysis 
                                                to match the most 
                                                recent update; and

                                            (bb) a quarterly meeting 
                                        between the Secretary, the 
                                        Director, and senior-level 
                                        representatives of all 
                                        contracted stakeholders in the 
                                        project to review progress and, 
                                        if necessary, decide corrective 
                                        actions and responsibilities 
                                        for implementation;
                            (iii) the Director has approved the project 
                        delivery plan submitted under clause (ii)(I) 
                        prior to financial close; and
                            (iv) the Secretary has approved the project 
                        planning documents submitted under clause 
                        (ii)(II) prior to financial close.
            (12) Qualifying project cost risk analysis.--The term 
        ``qualifying project cost risk analysis'' means a cost risk 
        analysis that follows--
                    (A) the best practices described in the document of 
                the Government Accountability Office entitled ``Cost 
                Estimating and Assessment Guide: Best Practices for 
                Developing and Managing Program Costs'', numbered GAO-
                20-195G, and dated March 2020 (or a successor 
                document); or
                    (B) other appropriate industry best practices, as 
                determined by the Secretary.
            (13) Qualifying project schedule risk analysis.--The term 
        ``qualifying project schedule risk analysis'' means a schedule 
        risk analysis that follows--
                    (A) the document of the Government Accountability 
                Office entitled ``Schedule Assessment Guide: Best 
                Practices for Project Schedules'', numbered GAO-16-89G, 
                and dated December 2015 (or a successor document); or
                    (B) other appropriate industry best practices, as 
                determined by the Secretary.
            (14) Resource-loaded integrated project schedule.--The term 
        ``resource-loaded integrated project schedule'' means an 
        approved schedule that follows--
                    (A) the best practices described in the document of 
                the Government Accountability Office entitled 
                ``Schedule Assessment Guide: Best Practices for Project 
                Schedules'', numbered GAO-16-89G, and dated December 
                2015 (or a successor document); or
                    (B) other appropriate industry best practices, as 
                determined by the Secretary.
            (15) Rolling forecast.--The term ``rolling forecast'' means 
        a process for regularly updating a resource-loaded integrated 
        project schedule.
            (16) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy, acting through the Director of the Office of Clean 
        Energy Demonstrations of the Department of Energy.
    (c) New Nuclear Investment Accelerator Program Account.--
            (1) Establishment.--There is established in the Loan 
        Programs Office an account, to be known as the ``New Nuclear 
        Investment Accelerator Program Account''.
            (2) Management.--The account shall be managed by the 
        Director.
            (3) Initial financing.--The following amounts shall be 
        transferred to the account on the date of enactment of this 
        Act:
                    (A) Of the unobligated balances of amounts 
                previously made available under the heading ``Nuclear 
                Energy'' under the heading ``ENERGY PROGRAMS'' under 
                the heading ``DEPARTMENT OF ENERGY'' in division J of 
                the Infrastructure Investment and Jobs Act (Public Law 
                117-58; 135 Stat. 1373), $1,100,000,000.
                    (B) Of the unobligated balance of amounts 
                previously made available under section 50144(a) of 
                Public Law 117-169 (136 Stat. 2044), $2,500,000,000.
            (4) Availability of amounts.--Amounts transferred to the 
        account under paragraph (3) or otherwise deposited in the 
        account shall remain available until expended.
            (5) Use of amounts.--The Director may use amounts in the 
        account to make payments pursuant to subsection (d)(2)(B).
            (6) Obligation of amounts.--Amounts in the account shall 
        be--
                    (A) contingently obligated to a borrower on the 
                approval by the Secretary of a conditional commitment 
                that includes satisfaction of the requirements for a 
                qualifying project under this section as a condition of 
                financial close, subject to the conditions that--
                            (i) the borrower shall be considered 
                        current so long as the borrower continues to 
                        make progress in good faith toward satisfying 
                        the requirements agreed upon in the conditional 
                        commitment, as determined by the Secretary; and
                            (ii) if the Secretary determines that the 
                        borrower is not making progress in good faith 
                        as described in clause (i), the contingently 
                        obligated amounts shall be made available to 
                        other borrowers; and
                    (B) obligated to the applicable borrower at 
                financial close.
            (7) Obligation and expenditure.--The obligation of amounts 
        in the account shall not be considered to be an expenditure of 
        those amounts unless the amounts are disbursed pursuant to 
        subsection (d)(2)(B).
    (d) Overrun Liability.--
            (1) Borrower liability for initial cost overruns.--With 
        respect to a qualifying project for which a guarantee is 
        provided under section 1703 or 1706 of the Energy Policy Act of 
        2005 (42 U.S.C. 16513, 16517), the borrower on the guaranteed 
        loan shall be responsible for all overruns until the cumulative 
        expenses of the qualifying project exceed 120 percent of the 
        point base estimate of the Class 2 estimate.
            (2) Payment by the director.--
                    (A) Expected payment amount.--With respect to a 
                qualifying project for which a guarantee is provided 
                under section 1703 or 1706 of the Energy Policy Act of 
                2005 (42 U.S.C. 16513, 16517), the Director shall 
                update the expected payment amount quarterly, subject 
                to the conditions that--
                            (i) cumulative expenses of the qualifying 
                        project have exceeded 120 percent of the point 
                        base estimate of the Class 2 estimate;
                            (ii) the quarterly increase to the expected 
                        payment amount does not exceed 50 percent of 
                        total expenses in that quarter for the 
                        qualifying project;
                            (iii) the updated expected payment amount 
                        does not exceed the maximum payment amount 
                        described in subparagraph (B)(ii);
                            (iv) the applicable guaranteed loan is not 
                        in default;
                            (v) the prospect of increasing the payment 
                        amount does not incentivize unnecessary 
                        spending; and
                            (vi) any increases to the payment amount 
                        are made in accordance with good governance 
                        principles.
                    (B) Payment.--
                            (i) In general.--When a qualifying project 
                        is placed in service, the Director shall--
                                    (I) determine the final payment 
                                amount based on--
                                            (aa) the expected payment 
                                        amount determined under 
                                        subparagraph (A); and
                                            (bb) any additional 
                                        cumulative expenses of the 
                                        applicable qualifying project, 
                                        determined in accordance with 
                                        that subparagraph; and
                                    (II) pay that final payment amount 
                                to the Federal Financing Bank (as the 
                                lender of the applicable guaranteed 
                                loan) from the account.
                            (ii) Maximum payment amount.--The maximum 
                        payment amount under this subparagraph for any 
                        1 qualifying project may not exceed 
                        $1,200,000,000.
                            (iii) Application of payment.--A payment 
                        under this subparagraph shall be applied to the 
                        principal amount of the applicable guaranteed 
                        loan.
                            (iv) Requirement.--The Director may make a 
                        payment under this subparagraph only if the 
                        applicable guaranteed loan is not in default.
                    (C) Tax treatment of payments.--For purposes of the 
                Internal Revenue Code of 1986--
                            (i) no amount shall be included in the 
                        gross income of the borrower described in 
                        paragraph (1) by reason of any payment under 
                        subparagraph (B), and
                            (ii) in the case of any such borrower that 
                        is a partnership or S corporation, any amount 
                        excluded from income by reason of clause (i) 
                        shall be treated as tax exempt income for 
                        purposes of section 705 and 1366 of the 
                        Internal Revenue Code of 1986.
    (e) Enhanced Financing Terms for Qualifying Projects.--
            (1) In general.--Notwithstanding title XVII of the Energy 
        Policy Act of 2005 (42 U.S.C. 16511 et seq.) or any other 
        provision of law, the Director shall offer the enhanced 
        financing terms described in paragraph (2) for a guarantee 
        provided under section 1703 or 1706 of that Act (42 U.S.C. 
        16513, 16517) with respect to a qualifying project.
            (2) Enhanced financing terms described.--The enhanced 
        financing terms referred to in paragraph (1) are the following:
                    (A) Notwithstanding section 1702(c) of the Energy 
                Policy Act of 2005 (42 U.S.C. 16512(c)), a guarantee 
                may be an amount up to 200 percent of the point base 
                estimate of the Class 2 estimate approved as described 
                in subsection (a)(10)(C)(iv) for the qualifying project 
                that is the subject of the guarantee.
                    (B) The Director shall seek a commitment from the 
                Federal Financing Bank (as lender of a guaranteed loan) 
                to amend or restructure, if appropriate, the applicable 
                guaranteed loan to reflect the revised principal amount 
                after payment under subsection (d)(2)(B).
            (3) Investment tax credit.--
                    (A) Public utility property.--Section 50(d)(2) of 
                the Internal Revenue Code of 1986 is amended--
                            (i) by redesignating subparagraphs (A), 
                        (B), and (C) as clauses (i), (ii), and (ii), 
                        respectively, and by moving such clauses 2 ems 
                        to the right,
                            (ii) by striking ``Section 46(f)'' and 
                        inserting the following:
                    ``(A) Section 46(f)'',
                            (iii) by striking ``At the election of the 
                        taxpayer'' and inserting the following:
                    ``(B) At the election of the taxpayer'',
                            (iv) by striking ``election under this 
                        paragraph'' each place it appears and inserting 
                        ``election under this subparagraph'', and
                            (v) by adding at the end the following new 
                        subparagraph:
                    ``(C) At the election of the taxpayer, this 
                paragraph shall not apply to any qualified project (as 
                defined in section 2(b) of the ARC Act of 2024). Rules 
                similar to the rules of clauses (i) and (ii) of 
                subparagraph (B) shall apply for purposes of an 
                election under this subparagraph.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to taxable years beginning after 
                the date of the enactment of this Act.
    (f) Submission of Meeting Minutes to Congress.--Not later than 7 
days after each quarterly meeting described in subsection 
(b)(11)(B)(ii)(III)(bb), the meeting minutes, which have been approved 
by the contracted stakeholders in the applicable qualifying project, 
shall be submitted by the Secretary to--
            (1) the Committee on Energy and Natural Resources and the 
        Committee on Appropriations of the Senate; and
            (2) the Committee on Energy and Commerce and the Committee 
        on Appropriations of the House of Representatives.

SEC. 3. OTHER RELATED PROVISIONS.

    (a) Exception to Denial of Double Benefit Provision for Certain 
Utilities and Military Installations.--Section 50141(d)(3) of Public 
Law 117-169 (136 Stat. 2043) is amended--
            (1) in subparagraph (C), by striking ``or'' at the end;
            (2) in subparagraph (D), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(E) projects partnering with--
                            ``(i) a Federal power marketing 
                        administration or the Tennessee Valley 
                        Authority;
                            ``(ii) an entity that procures energy for a 
                        military installation (as defined in section 
                        2801(c) of title 10, United States Code) that 
                        is managed by the Secretary of Defense or a 
                        contractor of the Secretary of Defense; or
                            ``(iii) the General Services Administration 
                        for the purpose of energy procurement.''.
    (b) Allowing Government Facilities as Brownfield Sites.--Section 
45(b)(11)(B)(i) of the Internal Revenue Code of 1986 is amended by 
striking ``(B), and'' and inserting ``(B) (excluding clauses (ii) and 
(vii), and clause (i) to the extent that clause (i) applies to a 
facility described in clause (ii) or (vii), of that subparagraph), 
and''.
                                 <all>
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