II 

112TH CONGRESS 

2D SESSION S. 2216 

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. 

IN THE SENATE OF THE UNITED STATES 

MARCH 21, 2012 

Mr. MERKLEY (for himself and Mr. LUGAR) introduced the following bill; 

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rural Energy Savings 

5 Program Act’’. 

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1 SEC. 2. RURAL ENERGY SAVINGS PROGRAM. 

2 Subtitle E of title VI of the Farm Security and Rural 

3 Investment Act of 2002 (Public Law 107–71; 116 Stat. 

4 424) is amended by adding at the end the following: 

5 ‘‘SEC. 6407. RURAL ENERGY SAVINGS PROGRAM. 

6 ‘‘(a) PURPOSE.—The purpose of this section is to cre7 ate jobs, promote rural development, and help rural fami8 lies and small businesses achieve cost savings by providing 

9 loans to qualified consumers to implement durable cost10 effective energy efficiency measures. 

11 ‘‘(b) DEFINITIONS.—In this section: 

12 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en13 tity’ means— 

14 ‘‘(A) any public power district, public util15 ity district, or similar entity, or any electric co16 operative described in section 501(c)(12) or 

17 1381(a)(2) of the Internal Revenue Code of 

18 1986, that borrowed and repaid, prepaid, or is 

19 paying an electric loan made or guaranteed by 

20 the Rural Utilities Service (or any predecessor 

21 agency); 

22 ‘‘(B) any entity primarily owned or con23 trolled by one or more entities described in sub24 paragraph (A); or 

25 ‘‘(C) any other entity that is an eligible 

26 borrower of the Rural Utility Service, as determstockstill on DSK4VPTVN1PROD with BILLS

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1 mined under section 1710.101 of title 7, Code 

2 of Federal Regulations (or a successor regula3 tion). 

4 ‘‘(2) ENERGY EFFICIENCY MEASURES.—The 

5 term ‘energy efficiency measures’ means, for or at 

6 property served by an eligible entity, structural im7 provements and investments in cost-effective, com8 mercial technologies to increase energy efficiency. 

9 ‘‘(3) QUALIFIED CONSUMER.—The term ‘quali10 fied consumer’ means a consumer served by an eligi11 ble entity that has the ability to repay a loan made 

12 under subsection (d), as determined by the eligible 

13 entity. 

14 ‘‘(4) SECRETARY.—The term ‘Secretary’ means 

15 the Secretary of Agriculture, acting through the Ad16 ministrator of the Rural Utilities Service. 

17 ‘‘(c) LOANS TO ELIGIBLE ENTITIES.— 

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

19 the Secretary shall make loans to eligible entities 

20 that agree to use the loan funds to make loans to 

21 qualified consumers for the purpose of implementing 

22 energy efficiency measures. 

23 ‘‘(2) REQUIREMENTS.— 

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1 ‘‘(A) IN GENERAL.—As a condition of re2 ceiving a loan under this subsection, an eligible 

3 entity shall— 

4 ‘‘(i) establish a list of energy effi5 ciency measures that is expected to de6 crease energy use or costs of qualified con7 sumers; 

8 ‘‘(ii) prepare an implementation plan 

9 for use of the loan funds, including use of 

10 any interest to be received pursuant to 

11 subsection (d)(1)(A); 

12 ‘‘(iii) provide for appropriate measure13 ment and verification to ensure— 

14 ‘‘(I) the effectiveness of the en15 ergy efficiency loans made by the eli16 gible entity; and 

17 ‘‘(II) that there is no conflict of 

18 interest in carrying out this section; 

19 and 

20 ‘‘(iv) demonstrate expertise in effec21 tive use of energy efficiency measures at 

22 an appropriate scale. 

23 ‘‘(B) REVISION OF LIST OF ENERGY EFFI24 CIENCY MEASURES.—Subject to the approval of 

25 the Secretary, an eligible entity may update the 

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1 list required under subparagraph (A)(i) to ac2 count for newly available efficiency technologies. 

3 ‘‘(C) EXISTING ENERGY EFFICIENCY PRO4 GRAMS.—An eligible entity that, at any time be5 fore the date that is 60 days after the date of 

6 enactment of this section, has established an 

7 energy efficiency program for qualified con8 sumers may use an existing list of energy effi9 ciency measures, implementation plan, or meas10 urement and verification system of that pro11 gram to satisfy the requirements of subpara12 graph (A) if the Secretary determines the list, 

13 plan, or systems are consistent with the pur14 poses of this section. 

15 ‘‘(3) NO INTEREST.—A loan under this sub16 section shall bear no interest. 

17 ‘‘(4) REPAYMENT.—With respect to a loan 

18 under paragraph (1)— 

19 ‘‘(A) the term shall not exceed 20 years 

20 from the date on which the loan is closed; and 

21 ‘‘(B) except as provided in paragraph (6), 

22 the repayment of each advance shall be amor23 tized for a period not to exceed 10 years. 

24 ‘‘(5) AMOUNT OF ADVANCES.—Any advance of 

25 loan funds to an eligible entity in any single year 

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1 shall not exceed 50 percent of the approved loan 

2 amount. 

3 ‘‘(6) SPECIAL ADVANCE FOR START-UP ACTIVI4 TIES.— 

5 ‘‘(A) IN GENERAL.—In order to assist an 

6 eligible entity in defraying the appropriate 

7 start-up costs (as determined by the Secretary) 

8 of establishing new programs or modifying ex9 isting programs to carry out subsection (d), the 

10 Secretary shall allow an eligible entity to re11 quest a special advance. 

12 ‘‘(B) AMOUNT.—No eligible entity may re13 ceive a special advance under this paragraph 

14 for an amount that is greater than 4 percent of 

15 the loan amount received by the eligible entity 

16 under paragraph (1). 

17 ‘‘(C) REPAYMENT.—Repayment of the spe18 cial advance— 

19 ‘‘(i) shall be required during the 10- 

20 year period beginning on the date on which 

21 the special advance is made; and 

22 ‘‘(ii) at the election of the eligible en23 tity, may be deferred to the end of the 10- 

24 year period. 

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1 ‘‘(7) LIMITATION.—All special advances shall be 

2 made under a loan described in paragraph (1) dur3 ing the first 10 years of the term of the loan. 

4 ‘‘(d) LOANS TO QUALIFIED CONSUMERS.— 

5 ‘‘(1) TERMS OF LOANS.—Loans made by an eli6 gible entity to qualified consumers using loan funds 

7 provided by the Secretary under subsection (c)— 

8 ‘‘(A) may bear interest, not to exceed 3 

9 percent, to be used for purposes that include— 

10 ‘‘(i) to establish a loan loss reserve; 

11 and 

12 ‘‘(ii) to offset personnel and program 

13 costs of eligible entities to provide the 

14 loans; 

15 ‘‘(B) shall finance energy efficiency meas16 ures for the purpose of decreasing energy usage 

17 or costs of the qualified consumer by an 

18 amount that ensures, to the maximum extent 

19 practicable, that a loan term of not more than 

20 10 years will not pose an undue financial bur21 den on the qualified consumer, as determined 

22 by the eligible entity; 

23 ‘‘(C) shall not be used to fund purchases 

24 of, or modifications to, personal property unless 

25 the personal property is or becomes attached to 

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1 real property (including a manufactured home) 

2 as a fixture; 

3 ‘‘(D) shall be repaid through charges 

4 added to the electric bill for the property for, or 

5 at which, energy efficiency measures are or will 

6 be implemented, on the condition that this re7 quirement does not prohibit— 

8 ‘‘(i) the voluntary prepayment of a 

9 loan by the owner of the property; or 

10 ‘‘(ii) the use of any additional repay11 ment mechanisms that are— 

12 ‘‘(I) demonstrated to have appro13 priate risk mitigation features, as de14 termined by the eligible entity; or 

15 ‘‘(II) required if the qualified 

16 consumer is no longer a customer of 

17 the eligible entity; and 

18 ‘‘(E) shall require an energy audit by an 

19 eligible entity to determine the impact of pro20 posed energy efficiency measures on the energy 

21 costs and consumption of the qualified con22 sumer. 

23 ‘‘(2) CONTRACTORS.—In addition to any other 

24 qualified general contractor, eligible entities may 

25 serve as general contractors. 

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1 ‘‘(e) CONTRACT FOR MEASUREMENT AND

2 VERIFICATION, TRAINING, AND TECHNICAL ASSIST3 ANCE.— 

4 ‘‘(1) IN GENERAL.—Not later than 90 days 

5 after the date of enactment of this section, the Sec6 retary— 

7 ‘‘(A) shall establish a plan for measure8 ment and verification, training, and technical 

9 assistance of the program; and 

10 ‘‘(B) may enter into one or more contracts 

11 with a qualified entity for the purposes of— 

12 ‘‘(i) providing measurement and 

13 verification activities; and 

14 ‘‘(ii) developing a program to provide 

15 technical assistance and training to the 

16 employees of eligible entities to carry out 

17 this section. 

18 ‘‘(2) USE OF SUBCONTRACTORS AUTHOR19 IZED.—A qualified entity that enters into a contract 

20 under paragraph (1) may use subcontractors to as21 sist the qualified entity in carrying out the contract. 

22 ‘‘(f) FAST START DEMONSTRATION PROJECTS.— 

23 ‘‘(1) IN GENERAL.—The Secretary shall offer to 

24 enter into agreements with eligible entities (or 

25 groups of eligible entities) that have energy effimstockstill on DSK4VPTVN1PROD with BILLS

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1 ciency programs described in subsection (c)(2)(C) to 

2 establish an energy efficiency loan demonstration 

3 projects consistent with the purposes of this section. 

4 ‘‘(2) EVALUATION CRITERIA.—In determining 

5 which eligible entities to award loans under this sec6 tion, the Secretary shall take into consideration eligi7 ble entities that— 

8 ‘‘(A) implement approaches to energy au9 dits and investments in energy efficiency meas10 ures that yield measurable and predictable sav11 ings; 

12 ‘‘(B) use measurement and verification 

13 processes to determine the effectiveness of en14 ergy efficiency loans made by eligible entities; 

15 ‘‘(C) include training for employees of eli16 gible entities, including any contractors of such 

17 entities, to implement or oversee the activities 

18 described in subparagraphs (A) and (B); 

19 ‘‘(D) provide for the participation of a ma20 jority of eligible entities in a State; 

21 ‘‘(E) reduce the need for generating capac22 ity; 

23 ‘‘(F) provide efficiency loans to— 

24 ‘‘(i) in the case of a single eligible en25 tity, not fewer than 20,000 consumers; or 

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1 ‘‘(ii) in the case of a group of eligible 

2 entities, not fewer than 80,000 consumers; 

3 and 

4 ‘‘(G) serve areas in which, as determined 

5 by the Secretary, a large percentage of con6 sumers reside— 

7 ‘‘(i) in manufactured homes; or 

8 ‘‘(ii) in housing units that are more 

9 than 50 years old. 

10 ‘‘(3) DEADLINE FOR IMPLEMENTATION.—To 

11 the maximum extent practicable, the Secretary shall 

12 enter into agreements described in paragraph (1) by 

13 not later than 90 days after the date of enactment 

14 of this section. 

15 ‘‘(4) EFFECT ON AVAILABILITY OF LOANS NA16 TIONALLY.—Nothing in this subsection shall delay 

17 the availability of loans to eligible entities on a na18 tional basis beginning not later than 180 days after 

19 the date of enactment of this section. 

20 ‘‘(5) ADDITIONAL DEMONSTRATION PROJECT

21 AUTHORITY.— 

22 ‘‘(A) IN GENERAL.—The Secretary may 

23 conduct demonstration projects in addition to 

24 the project required by paragraph (1). 

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1 ‘‘(B) INAPPLICABILITY OF CERTAIN CRI2 TERIA.—The additional demonstration projects 

3 may be carried out without regard to subpara4 graphs (D), (F), or (G) of paragraph (2). 

5 ‘‘(g) ADDITIONAL AUTHORITY.—The authority pro6 vided in this section is in addition to any other authority 

7 of the Secretary to offer loans under any other law. 

8 ‘‘(h) EFFECTIVE PERIOD.—Subject to the availability 

9 of funds and except as otherwise provided in this section, 

10 the loans and other expenditures required to be made 

11 under this section shall be available until expended, with 

12 the Secretary authorized to make new loans as loans are 

13 repaid. 

14 ‘‘(i) REGULATIONS.— 

15 ‘‘(1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, not later than 180 days 

17 after the date of enactment of this section, the Sec18 retary shall promulgate such regulations as are nec19 essary to implement this section. 

20 ‘‘(2) PROCEDURE.—The promulgation of the 

21 regulations and administration of this section shall 

22 be made without regard to— 

23 ‘‘(A) the Statement of Policy of the Sec24 retary of Agriculture effective July 24, 1971 

25 (36 Fed. Reg. 13804), relating to notices of 

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1 proposed rulemaking and public participation in 

2 rulemaking; and 

3 ‘‘(B) chapter 35 of title 44, United States 

4 Code (commonly known as the ‘Paperwork Re5 duction Act’). 

6 ‘‘(3) CONGRESSIONAL REVIEW OF AGENCY

7 RULEMAKING.—In carrying out this section, the Sec8 retary shall use the authority provided under section 

9 808 of title 5, United States Code. 

10 ‘‘(4) INTERIM REGULATIONS.—Notwithstanding 

11 paragraphs (1) and (2), to the extent regulations are 

12 necessary to carry out any provision of this section, 

13 the Secretary shall implement such regulations 

14 through the promulgation of an interim rule.’’. 

Æ 

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