Assist municipalities and local communities to explore and determine options for the alternative provision of electricity and to create new public power systems, and for other purposes.

SECTION 1. PURPOSE.

    The purpose of this Act is to assist municipalities and local 
communities to explore and determine options for the alternative 
provision of electricity and, at their discretion, to create or expand 
public power systems.

SEC. 2. COMMUNITY POWER INVESTMENT REVOLVING LOAN FUND.

    (a) Revolving Loan Fund.--There is established in the Treasury of 
the United States a revolving loan fund to be known as the ``Community 
Power Investment Revolving Loan Fund'' consisting of such amounts as 
may be appropriated or credited to such Fund as provided in this 
section.
    (b) Expenditures From Loan Funds.--
            (1) In general.--The Secretary of Energy, under such rules 
        and regulations as the Secretary may prescribe, may make loans 
        from the Community Power Investment Revolving Loan Fund, 
        without further appropriation, to a State or local government, 
        including any municipality.
            (2) Purpose.--Loans provided under this section shall be 
        used only for any of the following:
                    (A) Feasibility studies to investigate options for 
                the creation or expansion of public power systems.
                    (B) Community development assistance programs to 
                stem rising energy costs, including low-income customer 
                payment programs.
                    (C) Energy efficiency programs and other local 
                conservation measures.
                    (D) Incentives for new renewable energy resources, 
                including research and development programs, purchases 
                from alternative energy providers, and construction of 
                new generation facilities.
                    (E) Increased and rapid deployment of distributed 
                energy generation resources, including the following:
                            (i) Microturbines.
                            (ii) Fuel cells.
                            (iii) Combined heat and power systems.
                            (iv) Advanced internal combustion engine 
                        generators.
                            (v) Advanced natural gas turbines.
                            (vi) Energy storage devices.
                            (vii) Distributed generation research and 
                        development for local communities, including 
                        interconnection standards and equipment, and 
                        dispatch and control services that preserve 
                        appropriate local control authority to protect 
                        distribution system safety, reliability, and 
                        new and backup power quality.
                    (F) Purchase of existing electricity generation and 
                transmission systems of private power companies.
                    (G) Construction of new electricity generation and 
                transmission facilities.
                    (H) Education and public information programs.
            (3) Restrictions.--No loan may be made under this section 
        to any entity that is financially distressed, delinquent on any 
        Federal debt, or in current bankruptcy proceedings. No loan 
        shall be made under this section unless the Secretary 
        determines that--
                    (A) there is reasonable assurance of repayment of 
                the loan; and
                    (B) the amount of the loan, together with other 
                funds provided by or available to the recipient, is 
                adequate to assure completion of the facility or 
                facilities for which the loan is made.
    (c) Loan Repayments.--
            (1) Length of repayment.--
                    (A) In general.--Before making a loan under this 
                section, the Secretary shall determine the period of 
                time within which a State must repay such loan.
                    (B) Limitation.--Except as provided in subparagraph 
                (C), the Secretary shall in no case allow repayment of 
                such loan--
                            (i) to begin later than the date that is 
                        one year after the date on which the loan is 
                        made; and
                            (ii) to be completed later than the date 
                        that is 30 years after the date on which the 
                        loan is made.
                    (C) Moratorium.--The Secretary may grant a 
                temporary moratorium on the repayment of a loan 
                provided under this section if, in the determination of 
                the Secretary, continued repayment of such loan would 
                cause a financial hardship on the State that received 
                the loan.
            (2) Interest.--The Secretary may not impose or collect 
        interest on a loan provided under this section in excess of one 
        percent above the current U.S. Treasury rate for obligations of 
        similar maturity.
            (3) Credit to loan fund.--Repayment of amounts loaned under 
        this section shall be credited to the Community Power 
        Investment Revolving Loan Fund and shall be available for the 
        purposes for which the fund is established.
            (4) Finance charges.--The Secretary may assess finance 
        charges of 5 percent on loans under this section that are 
        repaid within 5 to 10 years, 3 percent on such loans that are 
        repaid within 3 to 5 years, and one percent for loans repaid 
        within 3 years.
    (d) Administration Expenses.--The Secretary may defray the expenses 
of administering the loans provided under this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Community Power Investment Revolving Loan Fund 
$5,000,000,000 for each of the fiscal years 2002 through 2007.

SEC. 3. STRANDED COSTS.

    Section 206 of the Federal Power Act is amended by adding the 
following new subsection after subsection (d):
    ``(e) Stranded Cost Recovery.--The Commission shall prohibit any 
public utility or State regulatory authority from imposing, after the 
enactment of this subsection, any fee or charge (including any exit 
fee) on any electric consumer or State or municipality (or entity 
established by a State or municipality) for the purpose of recovering 
any wholesale stranded costs of such public utility that may occur when 
retail electric consumers cease to be served by that public utility by 
reason of the provision of electric service to such consumers by a 
State or a political subdivision of a State (or by any entity 
established by such State or political subdivision). As promptly as 
practical after the enactment of this subsection, the Commission shall 
amend such rules and orders of the Commission as may be necessary to 
carry out this subsection.''.

SEC. 4. REPEAL OF RESTRICTION ON USE OF TAX-EXEMPT BONDS TO ACQUIRE 
              OUTPUT FACILITIES.

    (a) In General.--Section 141 of the Internal Revenue Code of 1986 
(relating to private activity bond; qualified bond) is amended by 
striking subsection (d) and by redesignating subsection (e) and 
subsection (d).
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to obligations issued after the date of the enactment of this 
Act.

Summary: Establishes the Community Power Investment Revolving Loan Fund. Authorizes the Secretary of Energy to make loans from such Fund to a State, local, or municipal government in sound financial standing for the development of alternative energy and energy delivery systems. Prescribes loan repayment guidelines.Amends the Federal Power Act to direct the Federal Energy Regulatory Commission to prohibit any public utility or State regulatory authority from imposing any fee or charge on any electric consumer, State, or municipality for the purpose of recovering wholesale stranded costs it may incur when retail electric consumers cease to be served by that public utility by reason of the provision of electric service by a State or local government.Amends the Internal Revenue Code to repeal the restriction placed upon the use of tax-exempt bonds to acquire nongovernmental output property.