II 

111TH CONGRESS 

2D SESSION S. 3102 

To amend the miscellaneous rural development provisions of 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 energy efficiency measures 

involving structural improvements and investments in cost-effective, commercial off-the-shelf technologies to reduce home energy use. 

IN THE SENATE OF THE UNITED STATES 

MARCH 10, 2010 

Mr. MERKLEY (for himself, Mrs. SHAHEEN, Mr. JOHNSON, Mr. LUGAR, Mr. 

BENNET, and Mr. GRAHAM) introduced the following bill; which was read 

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

A BILL 

To amend the miscellaneous rural development provisions 

of 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 energy efficiency measures 

involving structural improvements and investments in 

cost-effective, commercial off-the-shelf technologies to reduce home energy use. 

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


tjames on DSKG8SOYB1PROD with BILLS
2 

•S 3102 IS

1 SECTION 1. SHORT TITLE. 

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

3 Program Act’’. 

4 SEC. 2. RURAL ENERGY SAVINGS PROGRAM. 

5 Title VI of the Farm Security and Rural Investment 

6 Act of 2002 (7 U.S.C. 7901 note et seq.) is amended by 

7 adding the following new section: 

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

9 ‘‘(a) PURPOSE.—The purpose of this section is to cre10 ate and save jobs by providing loans to qualified con11 sumers that will use the loan proceeds to implement en12 ergy efficiency measures to achieve significant reductions 

13 in energy costs, energy consumption, or carbon emissions. 

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

15 ‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en16 tity’ means— 

17 ‘‘(A) any public power district, public util18 ity district, or similar entity, or any electric co19 operative described in sections 501(c)(12) or 

20 1381(a)(2)(C) of the Internal Revenue Code of 

21 1986, that borrowed and repaid, prepaid, or is 

22 paying an electric loan made or guaranteed by 

23 the Rural Utilities Service (or any predecessor 

24 agency); or 


tjames on DSKG8SOYB1PROD with BILLS
3 

•S 3102 IS

1 ‘‘(B) any entity primarily owned or con2 trolled by an entity or entities described in sub3 paragraph (A). 

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 off-the-shelf technologies to reduce home en9 ergy use. 

10 ‘‘(3) QUALIFIED CONSUMER.—The term ‘quali11 fied consumer’ means a consumer served by an eligi12 ble entity that has the ability to repay a loan made 

13 under subsection (d), as determined by an eligible 

14 entity. 

15 ‘‘(4) QUALIFIED ENTITY.—The term ‘qualified 

16 entity’ means a non-governmental, not-for-profit or17 ganization that the Secretary determines has signifi18 cant experience, on a national basis, in providing eli19 gible entities with— 

20 ‘‘(A) energy, environmental, energy effi21 ciency, and information research and tech22 nology; 

23 ‘‘(B) training, education, and consulting; 


tjames on DSKG8SOYB1PROD with BILLS
4 

•S 3102 IS

1 ‘‘(C) guidance in energy and operational 

2 issues and rural community and economic de3 velopment; 

4 ‘‘(D) advice in legal and regulatory mat5 ters affecting electric service and the environ6 ment; and 

7 ‘‘(E) other relevant assistance. 

8 ‘‘(5) SECRETARY.—The term ‘Secretary’ means 

9 the Secretary of Agriculture, acting through the 

10 Rural Utilities Service. 

11 ‘‘(c) LOANS AND GRANTS TO ELIGIBLE ENTITIES.— 

12 ‘‘(1) LOANS AUTHORIZED.—Subject to para13 graph (2), the Secretary shall make loans to eligible 

14 entities that agree to use the loan funds to make 

15 loans to qualified consumers as described in sub16 section (d) for the purpose of implementing energy 

17 efficiency measures. 

18 ‘‘(2) LIST, PLAN, AND MEASUREMENT AND

19 VERIFICATION REQUIRED.— 

20 ‘‘(A) IN GENERAL.—As a condition to re21 ceiving a loan or grant under this subsection, 

22 an eligible entity shall— 

23 ‘‘(i) establish a list of energy effi24 ciency measures that is expected to deVerDate Nov 24 2008 03:40 Mar 11, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3102.IS S3102

tjames on DSKG8SOYB1PROD with BILLS
5 

•S 3102 IS

1 crease energy use or costs of qualified con2 sumers; 

3 ‘‘(ii) prepare an implementation plan 

4 for use of the loan funds; and 

5 ‘‘(iii) provide for appropriate measure6 ment and verification to ensure the effec7 tiveness of the energy efficiency loans 

8 made by the eligible entity and that there 

9 is no conflict of interest in the carrying out 

10 of this section. 

11 ‘‘(B) REVISION OF LIST OF ENERGY EFFI12 CIENCY MEASURES.—An eligible entity may up13 date the list required under subparagraph 

14 (A)(i) to account for newly available efficiency 

15 technologies, subject to the approval of the Sec16 retary. 

17 ‘‘(C) EXISTING ENERGY EFFICIENCY PRO18 GRAMS.—An eligible entity that, on or before 

19 the date of the enactment of this section or 

20 within 60 days after such date, has already es21 tablished an energy efficiency program for 

22 qualified consumers may use an existing list of 

23 energy efficiency measures, implementation 

24 plan, or measurement and verification system of 

25 that program to satisfy the requirements of 


tjames on DSKG8SOYB1PROD with BILLS
6 

•S 3102 IS

1 subparagraph (A) if the Secretary determines 

2 the list, plans, or systems are consistent with 

3 the purposes of this section. 

4 ‘‘(3) NO INTEREST.—A loan under this sub5 section shall bear no interest. 

6 ‘‘(4) REPAYMENT.—A loan under this sub7 section shall be repaid not more than 10 years from 

8 the date on which an advance on the loan is first 

9 made to the eligible entity. 

10 ‘‘(5) LOAN FUND ADVANCES.—The Secretary 

11 shall provide eligible entities with a schedule of not 

12 more than ten years for advances of loan funds, ex13 cept that any advance of loan funds to an eligible 

14 entity in any single year shall not exceed 50 percent 

15 of the approved loan amount. 

16 ‘‘(6) JUMP-START GRANTS.—The Secretary 

17 shall make grants available to eligible entities se18 lected to receive a loan under this subsection in 

19 order to assist an eligible entity to defray costs, in20 cluding costs of contractors for equipment and labor, 

21 except that no eligible entity may receive a grant 

22 amount that is greater than four percent of the loan 

23 amount. 

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


tjames on DSKG8SOYB1PROD with BILLS
7 

•S 3102 IS

1 ‘‘(1) TERMS OF LOANS.—Loans made by an eli2 gible entity to qualified consumers using loan funds 

3 provided by the Secretary under subsection (c)— 

4 ‘‘(A) may bear interest, not to exceed three 

5 percent, to be used for purposes that include es6 tablishing a loan loss reserve and to offset per7 sonnel and program costs of eligible entities to 

8 provide the loans; 

9 ‘‘(B) shall finance energy efficiency meas10 ures for the purpose of decreasing energy usage 

11 or costs of the qualified consumer by an 

12 amount such that a loan term of not more than 

13 ten years will not pose an undue financial bur14 den on the qualified consumer, as determined 

15 by the eligible entity; 

16 ‘‘(C) shall not be used to fund energy effi17 ciency measures made to personal property un18 less the personal property— 

19 ‘‘(i) is or becomes attached to real 

20 property as a fixture; or 

21 ‘‘(ii) is a manufactured home; 

22 ‘‘(D) shall be repaid through charges 

23 added to the electric bill of the qualified con24 sumer; and 


tjames on DSKG8SOYB1PROD with BILLS
8 

•S 3102 IS

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

2 eligible entity to determine the impact of pro3 posed energy efficiency measures on the energy 

4 costs and consumption of the qualified con5 sumer. 

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

7 qualified general contractor, eligible entities may 

8 serve as general contractors. 

9 ‘‘(e) CONTRACT FOR MEASUREMENT AND

10 VERIFICATION, TRAINING, AND TECHNICAL ASSIST11 ANCE.— 

12 ‘‘(1) CONTRACT REQUIRED.—Not later than 60 

13 days after the date of enactment of this section, the 

14 Secretary shall enter into one or more contracts with 

15 a qualified entity for the purposes of— 

16 ‘‘(A) providing measurement and 

17 verification activities, including— 

18 ‘‘(i) developing and completing a rec19 ommended protocol for measurement and 

20 verification for the Rural Utilities Service; 

21 ‘‘(ii) establishing a national measure22 ment and verification committee consisting 

23 of representatives of eligible entities to as24 sist the contractor in carrying out this sec25 tion; 


tjames on DSKG8SOYB1PROD with BILLS
9 

•S 3102 IS

1 ‘‘(iii) providing measurement and 

2 verification consulting services to eligible 

3 entities that receive loans under this sec4 tion; and 

5 ‘‘(iv) providing training in measure6 ment and verification; and 

7 ‘‘(B) developing a program to provide tech8 nical assistance and training to the employees 

9 of eligible entities to carry out this section. 

10 ‘‘(2) USE OF SUBCONTRACTORS AUTHOR11 IZED.—A qualified entity that enters into a contract 

12 under paragraph (1) may use subcontractors to as13 sist the qualified entity in performing the contract. 

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

15 ‘‘(1) DEMONSTRATION PROJECTS REQUIRED.— 

16 The Secretary shall enter into agreements with eligi17 ble entities (or groups of eligible entities) that have 

18 energy efficiency programs described in subsection 

19 (c)(2)(C) to establish an energy efficiency loan dem20 onstration projects consistent with the purposes of 

21 this section that— 

22 ‘‘(A) implement approaches to energy au23 dits and investments in energy efficiency meas24 ures that yield measurable and predictable sav25 ings; 


tjames on DSKG8SOYB1PROD with BILLS
10 

•S 3102 IS

1 ‘‘(B) use measurement and verification 

2 processes to determine the effectiveness of en3 ergy efficiency loans made by eligible entities; 

4 ‘‘(C) include training for employees of eli5 gible entities, including any contractors of such 

6 entities, to implement or oversee the activities 

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

8 ‘‘(D) provide for the participation of a ma9 jority of eligible entities in a State; 

10 ‘‘(E) reduce the need for generating capac11 ity; 

12 ‘‘(F) provide efficiency loans to— 

13 ‘‘(i) not fewer than 20,000 consumers, 

14 in the case of a single eligible entity; or 

15 ‘‘(ii) not fewer than 80,000 con16 sumers, in the case of a group of eligible 

17 entities; and 

18 ‘‘(G) serve areas where a large percentage 

19 of consumers reside— 

20 ‘‘(i) in manufactured homes; or 

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

22 than 50 years old. 

23 ‘‘(2) DEADLINE FOR IMPLEMENTATION.—The 

24 agreements required by paragraph (1) shall be enVerDate Nov 24 2008 03:40 Mar 11, 2010 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3102.IS S3102

tjames on DSKG8SOYB1PROD with BILLS
11 

•S 3102 IS

1 tered into not later than 90 days after the date of 

2 enactment of this section. 

3 ‘‘(3) EFFECT ON AVAILABILITY OF LOANS NA4 TIONALLY.—Nothing in this subsection shall delay 

5 the availability of loans to eligible entities on a na6 tional basis beginning not later than 180 days after 

7 the date of enactment of this section. 

8 ‘‘(4) ADDITIONAL DEMONSTRATION PROJECT

9 AUTHORITY.—The Secretary may conduct dem10 onstration projects in addition to the project re11 quired by paragraph (1). The additional demonstra12 tion projects may be carried out without regard to 

13 subparagraphs (D), (F), or (G) of paragraph (1). 

14 ‘‘(g) ADDITIONAL AUTHORITY.—The authority pro15 vided in this section is in addition to any authority of the 

16 Secretary to offer loans or grants under any other law. 

17 ‘‘(h) AUTHORIZATION OF APPROPRIATIONS.— 

18 ‘‘(1) IN GENERAL.—There is authorized to be 

19 appropriated to the Secretary in fiscal year 2010 

20 $993,000,000 to carry out this section. Notwith21 standing paragraph (2), amounts appropriated pur22 suant to this authorization of appropriations shall 

23 remain available until expended. 

24 ‘‘(2) AMOUNTS FOR LOANS, GRANTS, STAFF25 ING.—Of the amounts appropriated pursuant to the 


tjames on DSKG8SOYB1PROD with BILLS
12 

•S 3102 IS

1 authorization of appropriations in paragraph (1), the 

2 Secretary shall make available— 

3 ‘‘(A) $755,000,000 for the purpose of cov4 ering the cost of direct loans to eligible entities 

5 under subsection (c) to subsidize gross obliga6 tions in the principal amount of not to exceed 

7 $4,900,000,000; 

8 ‘‘(B) $25,000,000 for measurement and 

9 verification activities under subsection 

10 (e)(1)(A); 

11 ‘‘(C) $2,000,000 for the contract for train12 ing and technical assistance authorized by sub13 section (e)(1)(B); 

14 ‘‘(D) $200,000,000 for jump-start grants 

15 authorized by subsection (c)(6); and 

16 ‘‘(E) $1,100,000 for each of fiscal years 

17 2010 through 2019 for ten additional employ18 ees of the Rural Utilities Service to carry out 

19 this section. 

20 ‘‘(i) EFFECTIVE PERIOD.—Subject to subsection 

21 (h)(1) and except as otherwise provided in this section, 

22 the loans, grants, and other expenditures required to be 

23 made under this section are authorized to be made during 

24 each of fiscal years 2010 through 2014. 

25 ‘‘(j) REGULATIONS.— 


tjames on DSKG8SOYB1PROD with BILLS
13 

•S 3102 IS

1 ‘‘(1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, not later than 180 days 

3 after the date of enactment of this section, the Sec4 retary shall promulgate such regulations as are nec5 essary to implement this section. 

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

7 regulations and administration of this section shall 

8 be made without regard to— 

9 ‘‘(A) chapter 35 of title 44, United States 

10 Code (commonly known as the ‘Paperwork Re11 duction Act’); and 

12 ‘‘(B) the Statement of Policy of the Sec13 retary of Agriculture effective July 24, 1971 

14 (36 Fed. Reg. 13804), relating to notices of 

15 proposed rulemaking and public participation in 

16 rulemaking. 

17 ‘‘(3) CONGRESSIONAL REVIEW OF AGENCY

18 RULEMAKING.—In carrying out this section, the Sec19 retary shall use the authority provided under section 

20 808 of title 5, United States Code. 

21 ‘‘(4) INTERIM REGULATIONS.—Notwithstanding 

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

23 necessary to carry out any provision of this section, 


tjames on DSKG8SOYB1PROD with BILLS
14 

•S 3102 IS

1 the Secretary shall implement such regulations 

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

Æ 


tjames on DSKG8SOYB1PROD with BILLS