II 113th CONGRESS 1st Session S. 860 IN THE SENATE OF THE UNITED STATES May 6, 2013 Mr. Franken (for himself, Mr. Harkin , Mr. Brown , Mr. Durbin , Ms. Cantwell , Mr. Johnson of South Dakota , Mr. Cowan , Ms. Hirono , Ms. Baldwin , and Mr. Schatz ) 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 improve energy programs.

1. Short title This Act may be cited as the Rural Energy Investment Act of 2013 . 2. Findings Congress finds that— (1) production of energy from domestic sources offers considerable economic and energy security benefits to the United States, including enduring and desirable jobs; (2) the agricultural and forestry sectors of the United States offer significant potential for production of renewable energy; (3) both renewable energy production and adoption of energy efficiency offer considerable environmental benefits; and (4) investments in energy efficiency projects and renewable energy systems in rural areas of the United States provide very significant energy security, economic, and environmental benefits to the entire United States in addition to the rural area benefits. 3. Definitions Section 9001 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8101 ) is amended— (1) by redesignating paragraphs (5) through (14) as paragraphs (6) through (15), respectively; (2) by inserting after paragraph (4) the following: (5) Biochemical The term biochemical means a chemical derived from renewable biomass. ; and (3) in paragraph (7)(A), by inserting , biochemicals, after biofuels . 4. Biobased markets program Section 9002 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8102 ) is amended— (1) in subsection (a)— (A) in paragraph (3), by adding at the end the following: (F) Biobased product designations Not later than 1 year after the date of enactment of this subparagraph, the Secretary shall— (i) begin to designate intermediate ingredients, feedstocks, and complex products in the guidelines issued under this paragraph; and (ii) develop a recommendation for the designation of complex and finished biobased products in those guidelines. (G) Changes in procurement mechanisms (i) Electronic product procurement catalogs The Secretary shall work with relevant officials in agencies that have electronic product procurement catalogs to identify and implement solutions to increase the visibility of biobased and other sustainable products. (ii) Agency-specific product specifications (I) In general Not later than 1 year after the date of enactment of this subparagraph and every 4 years thereafter, the Secretary, in coordination with other appropriate officials, shall work with the senior sustainability officer of each agency that has established agency-specific product specifications to review and revise the product specifications to ensure that, to the maximum extent practicable, the product specifications— (aa) require the use of sustainable products, including biobased products designated in accordance with this section; and (bb) do not contain any language prohibiting the use of biobased products. (II) Report Results of the reviews conducted under subclause (I) shall be reported annually to the Office of Management and Budget, the Office of Science and Technology Policy, and the appropriate committees of Congress. (H) Reporting (i) In general Not later than 1 year after the date of enactment of this subparagraph, the Administrator of General Services shall implement a system for service and construction contractors to report annual purchases of biobased products under Federal Government contracts. (ii) Relationship to other reporting systems The system under clause (i) may be incorporated as an element of 1 or more other contractor reporting systems. ; and (B) by adding at the end the following: (5) Compliance The Secretary may take such action as the Secretary determines to be necessary— (A) to determine the compliance rate among Federal agencies in buying designated biobased products; and (B) to determine whether vendor and contractor claims about biobased products meeting item designation definitions and minimum required biobased content are accurate. ; (2) in subsection (b)(3)— (A) by striking The Secretary and inserting the following: (A) In general The Secretary ; and (B) by adding at the end the following: (B) Auditing and compliance The Secretary may carry out such auditing and compliance activities as the Secretary determines to be necessary to ensure compliance with subparagraph (A), including the imposition of a civil penalty of not more than $10,000 on a person who misuses the label and, after receiving a notice of violation, fails to take action to correct the misuse described in the notice. ; (3) by redesignating subsections (d) through (h) as subsections (f) through (j), respectively; (4) by inserting after subsection (c) the following: (d) Outreach, education, and promotion (1) In general The Secretary shall carry out a program of outreach, education, and promotion activities intended to increase knowledge, awareness, and benefits of biobased products. (2) Authorized activities In carrying out this subsection, the Secretary, at a minimum, shall— (A) not later than 1 year after the date of enactment of this paragraph, update all existing BioPreferred and related sustainable acquisition training materials of the Department; (B) work cooperatively with the senior sustainability officers and chief acquisition officers of Federal agencies to immediately implement such BioPreferred program agency education and outreach programs as are necessary to meet the requirements of this section; (C) work actively with groups that support employment for the blind or disabled, such as the Committee for Purchase From People Who Are Blind or Severely Disabled, to promote education and outreach regarding BioPreferred AbilityOne products to— (i) program, technical, and contracting personnel; and (ii) Federal agency purchase card holders; (D) conduct consumer education and outreach (including consumer and awareness surveys); (E) conduct outreach to and support for State and local governments interested in implementing biobased purchasing programs; (F) partner with industry and nonprofit groups to produce educational and outreach materials and conduct educational and outreach events; (G) sponsor special conferences and events to bring together buyers and sellers of biobased products; and (H) support pilot and demonstration projects. (e) Forest Products Laboratory coordination In determining whether products are eligible for the USDA Certified Biobased Product label, the Secretary (acting through the Forest Products Laboratory) shall— (1) review and approve forest-related products for which an application is submitted for the program; (2) expedite the approval of innovative products resulting from technology developed by the Forest Products Laboratory or partners of the Laboratory; and (3) provide appropriate technical assistance to applicants, as determined by the Secretary. ; (5) in subsection (i) (as redesignated by paragraph (3)), by adding at the end the following: (3) Jobs creation research and report Not later than 2 years after the date of enactment of this paragraph, the Secretary shall carry out a study, and submit to the President and the appropriate committees of Congress a report, on job creation and the economic impact associated with the biobased product industry, including— (A) the number of jobs in the United States originating from the biobased product industry annually over the preceding 10 years, including the job changes in specific sectors; (B) the dollar value of the domestic biobased products industry at the time of the report, including intermediates, feedstocks, and finished products, but excluding biofuels; (C) a forecast for biobased job creation potential over the next 10 years; (D) a forecast for growth in the biobased industry over the next 10 years; and (E) jobs data for both biofuels and biobased products, with data generated separately for each category. ; and (6) in subsection (j) (as redesignated by paragraph (3))— (A) in paragraph (1)— (i) in subparagraph (A), by striking and at the end; (ii) in subparagraph (B), by striking the period at the end and inserting ; and ; and (iii) by adding at the end the following: (C) $4,000,000 for each of fiscal years 2014 through 2018. ; and (B) in paragraph (2), by inserting and $4,000,000 for each of fiscal years 2014 through 2018 before the period at the end. 5. Biorefinery assistance Section 9003 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8103 ) is amended— (1) in subsection (a), in the matter preceding paragraph (1), by inserting , biochemicals, or biobased products after biofuels ; (2) in subsection (b)(2), by inserting , a biochemical, or a biobased product after biofuel each place it appears in subparagraphs (A) and (B); (3) in subsection (c)(1), by inserting , biochemicals, or biobased products after biofuels ; (4) in subsection (d)(2)(C)— (A) in clause (i), by inserting , biochemical, or biobased product after biofuel ; and (B) in clause (iii), by inserting , biochemicals, or biobased products after biofuels ; (5) in subsection (e)(1)(C)— (A) in clause (i), by inserting , biochemical, or biobased product after biofuel ; and (B) in clauses (iii) and (vii), by inserting , biochemicals, or biobased products after biofuels each place it appears; and (6) in subsection (h)— (A) in paragraph (1)— (i) in subparagraph (A), by striking and at the end; (ii) in subparagraph (B), by striking the period at the end and inserting ; and ; and (iii) by adding at the end the following: (C) $75,000,000 for each of fiscal years 2014 through 2018. ; (B) in paragraph (2), by inserting and $75,000,000 for each of fiscal years 2014 through 2018 before the period at the end; and (C) by adding at the end the following: (3) Limitation Of the funds made available under this subsection, at least 75 percent for each fiscal year shall be made available for the manufacture of advanced biofuels. . 6. Biodiesel fuel education program Section 9006 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8106 ) is amended by striking subsection (d) and inserting the following: (d) Funding (1) Mandatory funding Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section $1,000,000 for each of fiscal years 2014 through 2018, to remain available until expended. (2) Discretionary funding In addition to any other funds made available to carry out this section, there is authorized to be appropriated to carry out this section $1,000,000 for each of fiscal years 2014 through 2018. . 7. Rural Energy for America Program Section 9007 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8107 ) is amended— (1) in subsection (b)(2)— (A) in subparagraph (C), by striking and at the end; (B) by redesignating subparagraph (D) as subparagraph (E); and (C) by inserting after subparagraph (C) the following: (D) a nonprofit organization; and ; (2) in subsection (c)— (A) by striking paragraph (1) and inserting the following: (1) Loan guarantee and grant program (A) In general In addition to any similar authority, the Secretary shall provide loan guarantees and grants to agricultural producers and rural small businesses— (i) to purchase renewable energy systems, including— (I) systems that may be used to produce and sell electricity, such as for agricultural, and associated residential, purposes; and (II) unique components of renewable energy systems; and (ii) to make energy efficiency improvements. (B) Application process (i) In general In carrying out this subsection, the Secretary shall establish a multi-tiered application process that varies based on the cost of the proposed project. (ii) Simplification The multi-tiered process shall ensure that applications are most simplified for the projects with the lowest project costs. ; (B) in paragraph (2)— (i) in the matter preceding subparagraph (A)— (I) by striking amount and inserting priority ; and (II) by striking section and inserting subsection ; (ii) in subparagraph (A), by inserting and the type of energy efficiency improvement to be made so as to ensure that the program supports a diversity of technologies across the United States before the semicolon at the end; (iii) in subparagraph (C)— (I) by inserting and public health before benefits ; and (II) by inserting and energy efficiency improvements before the semicolon at the end; and (iv) by striking paragraph (F) and inserting the following: (F) the natural resource conservation benefits of the renewable energy system; ; (C) in paragraph (3)— (i) in subparagraph (B), by striking The Secretary and inserting the following: (i) In general The Secretary ; (ii) by adding at the end the following: (ii) Maximum grant amount (I) In general Except as provided in subclause (II), the amount of a grant under this paragraph shall not exceed the lesser of $100,000 or 50 percent of the cost of the activity carried out using funds from the grant. (II) Socially disadvantaged farmer or rancher In the case of an agricultural producer who is a socially disadvantaged farmer or rancher (as defined in section 2501(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 ( 7 U.S.C. 2279(e) )), the amount of a grant under this paragraph shall not exceed the lesser of $100,000 or 75 percent of the cost of the activity carried out using funds from the grant. ; and (iii) by striking subparagraph (C); (D) in paragraph (4)— (i) by striking subparagraph (A) and inserting the following: (A) Grants Subject to subparagraph (B), the amount of a grant under this subsection shall not exceed the lesser of— (i) 25 percent of the cost of the activity carried out using funds from the grant; or (ii) as applicable— (I) if the project is for energy efficiency improvements, $250,000; or (II) if the project is for a renewable energy system, $500,000. ; and (ii) in subparagraph (C), by striking 75 percent of the cost and inserting all eligible costs ; and (E) by adding at the end the following: (5) Requirement In carrying out this section, the Secretary shall not require a second meter for on-farm residential portions of rural projects connected to the grid. ; (3) in subsection (e)(2), strike June 30 of each fiscal year and insert a date to be determined each fiscal year by the Secretary ; (4) in subsection (f)— (A) by striking Not later and inserting the following: (1) In general Not later ; and (B) by adding at the end the following: (2) Subsequent report Not later than 4 years after the date of enactment of this paragraph, the Secretary shall submit to Congress a report on activities carried out under this section, including the outcomes achieved by projects funded under this section. ; and (5) in subsection (g)— (A) in paragraph (1)— (i) in subparagraph (C), by striking and at the end; (ii) in subparagraph (D), by striking the period at the end and inserting ; and ; and (iii) by adding at the end the following: (E) $70,000,000 for each of fiscal years 2014 through 2018; ; (B) in paragraph (2)(B), strike April 1 of each fiscal year and insert the date determined each fiscal year by the Secretary ; and (C) in paragraph (3), by inserting and $70,000,000 for each of fiscal years 2014 through 2018 before the period at the end. 8. Biomass research and development Section 9008 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8108 ) is amended— (1) by striking biofuels and each place it appears in subsections (b), (c)(3), (d)(2)(A), (e), and (g)(2) and inserting biofuels, biochemicals, and ; (2) in subsection (e)— (A) in paragraph (2)— (i) in subparagraph (A)— (I) by striking at prices competitive with fossil fuels and inserting , biochemicals, and biobased products ; and (II) by inserting and after the semicolon at the end; (ii) by striking subparagraph (B); (iii) by redesignating subparagraph (C) as subparagraph (B); and (iv) in subparagraph (B) (as so redesignated), by inserting biochemicals, after bioenergy, ; (B) in paragraph (3)— (i) in subparagraph (B)— (I) in the subparagraph heading, by inserting , biochemicals, after biofuels ; and (II) in clause (i), by striking cellulosic ; and (ii) in subparagraph (C)— (I) in the heading, by striking Biofuels development ; and (II) in clause (ii), by inserting , biochemical, or biobased product after biofuel ; (C) by striking paragraph (4); (D) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively; and (E) in paragraph (4) (as redesignated by subparagraph (D))— (i) by redesignating subparagraphs (F) and (G) as subparagraphs (G) and (H), respectively; and (ii) by inserting after subparagraph (E) the following: (G) a tribal organization (as defined in section 4 of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450b)); ; and (3) in subsection (h)— (A) in paragraph (1)— (i) in subparagraph (C), by striking and at the end; (ii) in subparagraph (D), by striking the period at the end and inserting ; and ; and (iii) by adding at the end the following: (E) $30,000,000 for each of fiscal years 2014 through 2018. ; and (B) in paragraph (2), by inserting and $30,000,000 for each of fiscal years 2014 through 2018 before the period at the end. 9. Rural energy self-sufficiency initiative Section 9009(d) of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8109(d) ) is amended by inserting and $10,000,000 for each of fiscal years 2014 through 2018 before the period at the end. 10. Feedstock flexibility program for bioenergy producers Section 9010(b) of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8110(b) ) is amended— (1) in paragraph (1)(A), by striking 2013 and inserting 2018 ; and (2) in paragraph (2)(A), by striking 2013 and inserting 2018 . 11. Biomass crop assistance program Section 9011 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8111 ) is amended— (1) in subsection (a)— (A) in paragraph (4)(B)(ii), by striking or has the potential to become invasive or noxious ; (B) in paragraph (5)— (i) in subparagraph (B), in the matter preceding clause (i), by striking The term and inserting Except as provided in subparagraph (C), the term ; and (ii) by adding at the end the following: (C) Certain conservation programs Land described in clause (iii), (iv), or (v) of subparagraph (B) may be prepared for biomass production before October 1 of the current fiscal year, as determined by the Secretary, if a contract described in that clause that covers the land will expire at the end of the current fiscal year. ; and (C) by adding at the end the following: (9) Qualifying eligible material The term qualifying eligible material means an eligible material, including residue from crops described in paragraph (6)(B)(i), that before transport and delivery to the biomass conversion facility— (A) is collected or harvested by the eligible material owner— (i) directly from— (I) National Forest System land; (II) Bureau of Land Management land; (III) non-Federal land; or (IV) land belonging to an Indian or Indian tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States; and (ii) in accordance with— (I) applicable law and land management plans; (II) a conservation, forest stewardship, or equivalent plan, as determined by the Secretary; (III) Executive Order 13112 ( 42 U.S.C. 4321 note; relating to invasive species); and (IV) if harvested from Federal land, the requirements for old growth forest maintenance, restoration, and management direction provided by section 102 of the Healthy Forests Restoration Act of 2003 ( 16 U.S.C. 6512 ) for Federal land; and (B) if woody, is removed as a byproduct of preventive treatments to— (i) reduce hazardous fire fuels; (ii) reduce or contain disease or insect infestation; (iii) reduce or contain invasive species; or (iv) improve ecosystem health in accordance with a landscape scale strategy, as determined by the Secretary. ; (2) in subsection (c)— (A) in paragraph (2)(B)— (i) in clause (vii)— (I) in subclause (II), by striking and at the end; (II) in subclause (III), by adding and at the end; and (III) by adding at the end the following: (IV) geographic and feedstock diversity of the proposed BCAP project area as compared with existing BCAP project areas; ; (ii) in clause (viii), by striking and at the end; (iii) by redesignating clause (ix) as clause (x); and (iv) by inserting after clause (viii) the following: (ix) the prospects for significant producer participation; and ; (B) in paragraph (3)(C)(ii), by striking 15 and inserting 7 ; and (C) in paragraph (5)— (i) in subparagraph (B)— (I) in the matter preceding clause (i), by striking the amount and inserting Except as provided in subparagraph (D), the amount ; and (II) by striking 75 percent and inserting 50 percent ; and (ii) by adding at the end the following: (D) Beginning, socially disadvantaged, and geographically disadvantaged farmers or ranchers In the case of a beginning, socially disadvantaged, or geographically disadvantaged farmer or rancher (as determined by the Secretary), the amount of an establishment payment under this subsection shall be up to 75 percent of the costs of establishing an eligible perennial crop covered by the contract, including the costs described in clauses (i) through (iii) of subparagraph (B). ; (3) in subsection (d)— (A) in paragraph (1), by inserting qualifying before eligible material both places it appears; (B) in paragraph (2)(B)— (i) by striking paragraph (3) and inserting paragraph (4) ; and (ii) by striking $45 per ton for a period of 2 years and inserting $25 per ton for a period of up to 3 years ; (C) by redesignating paragraph (3) as paragraph (4); and (D) by inserting after paragraph (2) the following: (3) Limitation on assistance with collection, harvest, storage, and transportation To ensure effective administration of this subsection, the Secretary may— (A) require such documentation from producers or persons seeking payments as the Secretary considers necessary; (B) establish limits on the total number and amounts of payments received by any producer or person under this subsection; and (C) implement any additional requirements the Secretary determines necessary. ; and (4) by striking subsection (f) and inserting the following: (f) Funding (1) Mandatory funding Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section $75,000,000 for each of fiscal years 2014 through 2018, of which not more than $15,000,000 for each fiscal year may be used for collection, harvest, storage, and transportation. (2) Discretionary funding In addition to any other funds made available to carry out this section, there is authorized to be appropriated to carry out this section $75,000,000 for each of fiscal years 2014 through 2018 . 12. Forest biomass for energy Section 9012(d) of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8112(d) ) is amended by striking 2012 and inserting 2018 . 13. Community wood energy program Section 9013 of the Farm Security and Rural Investment Act of 2002 ( 7 U.S.C. 8113 ) is amended— (1) by redesignating subsection (e) as subsection (f); (2) by inserting after subsection (d) the following: (e) Mandatory funding Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section $10,000,000 for each of fiscal years 2014 through 2018. ; and (3) in subsection (f) (as redesignated by paragraph (1)), by striking 2013 and inserting 2018 . 14. Budgetary effects The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled Budgetary Effects of PAYGO Legislation for this Act, submitted for printing in the Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior to the vote on passage.