II 

109TH CONGRESS 

2D SESSION S. 3890 

To enhance and improve the energy security of the United States, expand 

economic development, increase agricultural income, and improve environmental quality by reauthorizing and improving the renewable energy 

systems and energy efficiency improvements program of the Department 

of Agriculture through fiscal year 2012, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 12, 2006 

Mr. HARKIN (for himself, Mr. LUGAR, Mr. DURBIN, Mr. HAGEL, and Mr. 

NELSON of Nebraska) introduced the following bill; which was read twice 

and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To enhance and improve the energy security of the United 

States, expand economic development, increase agricultural income, and improve environmental quality by reauthorizing and improving the renewable energy systems 

and energy efficiency improvements program of the Department of Agriculture through fiscal year 2012, and 

for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Rural Energy for 

3 America Act of 2006’’. 

4 SEC. 2. FINDINGS. 

5 Congress finds that— 

6 (1) rising energy costs and uncertain long term 

7 energy supplies threaten to undermine the growth of 

8 the United States economy; 

9 (2) since 2003, fuel and fertilizer costs have 

10 nearly doubled for agricultural producers; 

11 (3) there are continuing and increasing risks to 

12 the energy security of the United States; 

13 (4) having an affordable, reliable, and plentiful 

14 energy supply will strengthen the United States 

15 economy and improve domestic energy security; 

16 (5) the agricultural sector can provide a signifi17 cant source of clean, sustainable energy for the 

18 United States that can reduce the dependence of the 

19 United States on imported energy and lower energy 

20 costs for all people of the United States; 

21 (6) agriculture-based energy— 

22 (A) boosts rural economic development; 

23 (B) increases farm-based income; 

24 (C) creates manufacturing, construction, 

25 and service jobs; 


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1 (D) expands economic opportunity for all 

2 people; and 

3 (E) improves environmental quality; 

4 (7) it is a goal of this Act to help the agricul5 tural sector to provide at least 25 percent of the en6 ergy consumed in the United States by calendar 

7 year 2025; 

8 (8) expanding agriculture-based renewable en9 ergy resources (including wind, solar, and geo10 thermal energy, ethanol, and biodiesel) and improv11 ing energy efficiency will help to achieve that goal; 

12 (9) section 9006 of the Farm Security and 

13 Rural Investment Act of 2002 (7 U.S.C. 8106) es14 tablished the renewable energy systems and energy 

15 efficiency improvements program, which is the first 

16 agricultural program to catalyze broad renewable en17 ergy and energy efficiency measures for the agricul18 tural and rural business sectors; 

19 (10) since establishment, the program has been 

20 a strong success, providing during the first 3 years 

21 of the program nearly $64,000,000 in grants and 

22 loan guarantees for 412 renewable energy and en23 ergy efficiency projects in 37 States, which leveraged 

24 approximately $699,000,000 in additional invest25 ments in farms and rural communities; 


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1 (11) projects assisted by the grants and loan 

2 guarantees will— 

3 (A) produce or save more than 

4 17,000,000,000,000 British thermal units of 

5 energy each year in the form of fuel, electricity, 

6 thermal energy, and energy efficiency; 

7 (B) produce 124,000,000 gallons of eth8 anol and biodiesel fuel annually; and 

9 (C) reduce carbon dioxide emissions by 

10 more than 4,000,000 tons annually; and 

11 (12) applications for assistance under the pro12 gram— 

13 (A) in 2003, nearly matched the available 

14 funding for the program; 

15 (B) in 2004, were nearly twice the avail16 able funding for the program; and 

17 (C) in 2005 and 2006, were nearly triple 

18 the available funding for the program. 

19 SEC. 3. RURAL ENERGY FOR AMERICA PROGRAM. 

20 Section 9006 of the Farm Security and Rural Invest21 ment Act of 2002 (7 U.S.C. 8106) is amended— 

22 (1) by striking the section designation and 

23 heading and inserting the following: 

24 ‘‘SEC. 9006. RURAL ENERGY FOR AMERICA PROGRAM.’’; 

25 (2) in subsection (a)— 


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1 (A) by inserting ‘‘, and issue rebates,’’ 

2 after ‘‘grants’’; and 

3 (B) by inserting ‘‘rural school districts,’’ 

4 after ‘‘ranchers,’’. 

5 (3) by striking subsection (f); 

6 (4) by redesignating subsection (e) as sub7 section (h); 

8 (5) by inserting after subsection (d) the fol9 lowing: 

10 ‘‘(e) PRODUCTION-BASED INCENTIVE IN LIEU OF

11 GRANT.— 

12 ‘‘(1) IN GENERAL.—In addition to the authority 

13 under subsection (a), to encourage the production of 

14 electricity from renewable energy systems, the Sec15 retary shall, on the request of an eligible applicant 

16 under this section, make production-based payments 

17 to the applicant in lieu of a grant. 

18 ‘‘(2) CONTINGENCY.—Payments under para19 graph (1) shall be contingent on documented energy 

20 production and sales from the renewable energy sys21 tem to a third party. 

22 ‘‘(3) LIMITATION.—The total net present value 

23 of a production-based incentive may not exceed the 

24 lower of— 


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1 ‘‘(A) 25 percent of the eligible project 

2 costs; and 

3 ‘‘(B) any other limits that the Secretary 

4 establishes by rule or guidance. 

5 ‘‘(f) FEASIBILITY STUDIES.— 

6 ‘‘(1) IN GENERAL.—The Secretary may provide 

7 assistance to eligible applicants to conduct feasibility 

8 studies of projects for which assistance may be pro9 vided under this section. 

10 ‘‘(2) LIMITATION.—The Secretary shall use not 

11 more than 10 percent of funds made available to 

12 carry out this section to provide assistance described 

13 in paragraph (1). 

14 ‘‘(3) CRITERIA.—The Secretary shall, by regu15 lation, establish criteria for the receipt of assistance 

16 under this subsection. 

17 ‘‘(4) AVOIDANCE OF DUPLICATIVE ASSIST18 ANCE.—An applicant that receives assistance to 

19 carry out a feasibility study for a project under this 

20 subsection shall not be eligible for assistance to 

21 carry out a feasibility study for the project under 

22 any other provision of Federal law. 

23 ‘‘(5) MATCHING FUNDS.—A recipient of funds 

24 under this subsection shall contribute an amount of 


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1 non-Federal funds that is at least equal to 75 per2 cent of the amount of Federal funds received. 

3 ‘‘(g) REBATE PROGRAM.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall make 

5 competitive grants to eligible entities to provide re6 bates for farmers, ranchers, rural school districts, 

7 and rural small businesses to purchase renewable en8 ergy systems and make energy efficiency improve9 ments. 

10 ‘‘(2) ELIGIBLE ENTITIES.—To be eligible to re11 ceive a grant under paragraph (1), an entity shall 

12 be— 

13 ‘‘(A) a State energy or agriculture office; 

14 ‘‘(B) a nonprofit State-based energy effi15 ciency or renewable energy organization that 

16 uses public funds provided directly or under 

17 contract with a State agency; 

18 ‘‘(C) any other nonprofit organization with 

19 a demonstrated ability to administer a State20 wide energy efficiency or renewable energy re21 bate program; or 

22 ‘‘(D) a consortium of entities described in 

23 subparagraphs (A) through (C). 

24 ‘‘(3) MERIT REVIEW.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 establish a merit review process to review appli3 cations for grants under paragraph (1) that 

4 uses the expertise of the Department of Agri5 culture, other Federal and State agencies, and 

6 non-governmental organizations. 

7 ‘‘(B) REQUIREMENTS.—In reviewing the 

8 application of an eligible entity to receive a 

9 grant under paragraph (1), the Secretary shall 

10 consider— 

11 ‘‘(i) the experience and expertise of 

12 the entity in establishing and admin13 istering a State-wide clean energy rebate 

14 program; 

15 ‘‘(ii) the annual projected energy sav16 ings or production increases resulting from 

17 the proposed program; 

18 ‘‘(iii) the environmental benefits re19 sulting from the proposed program; and 

20 ‘‘(iv) other appropriate factors, as de21 termined by the Secretary. 

22 ‘‘(4) MAINTENANCE OF EFFORT.—An entity 

23 that receives a grant under paragraph (1) shall pro24 vide assurances to the Secretary that funds provided 

25 to the entity under this subsection will be used to 


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1 supplement, not to supplant, the amount of Federal, 

2 State, and local funds otherwise expended for rebate 

3 programs. 

4 ‘‘(5) REBATE AMOUNT.—The amount of a re5 bate provided from a grant under this subsection 

6 shall not exceed the lower of— 

7 ‘‘(A) $10,000; or 

8 ‘‘(B) 50 percent of the cost incurred to 

9 purchase a renewable energy system or an en10 ergy efficiency improvement.’’; and 

11 (6) by adding at the end the following: 

12 ‘‘(i) FUNDING.—Of the funds of the Commodity 

13 Credit Corporation, the Secretary shall make available to 

14 carry out this section— 

15 ‘‘(1) $60,000,000 for fiscal year 2008, to re16 main available until expended, of which not more 

17 than $12,000,000 shall be used to carry out sub18 section (g); 

19 ‘‘(2) $90,000,000 for fiscal year 2009, to re20 main available until expended, of which not more 

21 than $18,000,000 shall be used to carry out sub22 section (g); 

23 ‘‘(3) $130,000,000 for fiscal year 2010, to re24 main available until expended, of which not more 


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1 than $26,000,000 shall be used to carry out sub2 section (g); 

3 ‘‘(4) $180,000,000 for fiscal year 2011, to re4 main available until expended, of which not more 

5 than $36,000,000 shall be used to carry out sub6 section (g); and 

7 ‘‘(5) $250,000,000 for fiscal year 2012, to re8 main available until expended, of which not more 

9 than $50,000,000 shall be used to carry out sub10 section (g).’’. 

11 SEC. 4. SENSE OF THE SENATE ON A DIRECT LOAN PRO12 GRAM IN SECTION 9006. 

13 It is the sense of the Senate that— 

14 (1) as authorized by section 9006 of the Farm 

15 Security and Rural Investment Act of 2002 (7 

16 U.S.C. 8106), the Secretary of Agriculture should 

17 implement a direct loan program to complement the 

18 grants provided under that section; and 

19 (2) as appropriate, the Secretary should model 

20 the direct loan program on the loan program estab21 lished under section 503 of the Small Business In22 vestment Act of 1958 (15 U.S.C. 697). 

Æ 


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