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Problem:SECTION 1. SHORT TITLE.

This Act may be cited as the ''Rural Energy Savings Program Act''.

SEC. 2. RURAL ENERGY SAVINGS PROGRAM.

Subtitle E of title VI of the Farm Security and Rural Investment
Act of 2002 (Public Law 107-71; 116 Stat. 424) is amended by adding at
the end the following:

''SEC. 6407. RURAL ENERGY SAVINGS PROGRAM.

''(a) Purpose.--The purpose of this section is to create jobs,
promote rural development, and help rural families and small businesses
achieve cost savings by providing loans to qualified consumers to
implement durable cost-effective energy efficiency measures.
''(b) Definitions.--In this section:
''(1) Eligible entity.--The term 'eligible entity' means--
''(A) any public power district, public utility
district, or similar entity, or any electric
cooperative described in section 501(c)(12) or
1381(a)(2) of the Internal Revenue Code of 1986, that
borrowed and repaid, prepaid, or is paying an electric
loan made or guaranteed by the Rural Utilities Service
(or any predecessor agency);
''(B) any entity primarily owned or controlled by
one or more entities described in subparagraph (A); or
''(C) any other entity that is an eligible borrower
of the Rural Utility Service, as determined under
section 1710.101 of title 7, Code of Federal
Regulations (or a successor regulation).
''(2) Energy efficiency measures.--The term 'energy
efficiency measures' means, for or at property served by an
eligible entity, structural improvements and investments in
cost-effective, commercial technologies to increase energy
efficiency.
''(3) Qualified consumer.--The term 'qualified consumer'
means a consumer served by an eligible entity that has the
ability to repay a loan made under subsection (d), as
determined by the eligible entity.
''(4) Secretary.--The term 'Secretary' means the Secretary
of Agriculture, acting through the Administrator of the Rural
Utilities Service.
''(c) Loans to Eligible Entities.--
''(1) In general.--Subject to paragraph (2), the Secretary
shall make loans to eligible entities that agree to use the
loan funds to make loans to qualified consumers for the purpose
of implementing energy efficiency measures.
''(2) Requirements.--
''(A) In general.--As a condition of receiving a
loan under this subsection, an eligible entity shall--
''(i) establish a list of energy efficiency
measures that is expected to decrease energy
use or costs of qualified consumers;
''(ii) prepare an implementation plan for
use of the loan funds, including use of any
interest to be received pursuant to subsection
(d)(1)(A);
''(iii) provide for appropriate measurement
and verification to ensure--
''(I) the effectiveness of the
energy efficiency loans made by the
eligible entity; and
''(II) that there is no conflict of
interest in carrying out this section;
and
''(iv) demonstrate expertise in effective
use of energy efficiency measures at an
appropriate scale.
''(B) Revision of list of energy efficiency
measures.--Subject to the approval of the Secretary, an
eligible entity may update the list required under
subparagraph (A)(i) to account for newly available
efficiency technologies.
''(C) Existing energy efficiency programs.--An
eligible entity that, at any time before the date that
is 60 days after the date of enactment of this section,
has established an energy efficiency program for
qualified consumers may use an existing list of energy
efficiency measures, implementation plan, or
measurement and verification system of that program to
satisfy the requirements of subparagraph (A) if the
Secretary determines the list, plan, or systems are
consistent with the purposes of this section.
''(3) No interest.--A loan under this subsection shall bear
no interest.
''(4) Repayment.--With respect to a loan under paragraph
(1)--
''(A) the term shall not exceed 20 years from the
date on which the loan is closed; and
''(B) except as provided in paragraph (6), the
repayment of each advance shall be amortized for a
period not to exceed 10 years.
''(5) Amount of advances.--Any advance of loan funds to an
eligible entity in any single year shall not exceed 50 percent
of the approved loan amount.
''(6) Special advance for start-up activities.--
''(A) In general.--In order to assist an eligible
entity in defraying the appropriate start-up costs (as
determined by the Secretary) of establishing new
programs or modifying existing programs to carry out
subsection (d), the Secretary shall allow an eligible
entity to request a special advance.
''(B) Amount.--No eligible entity may receive a
special advance under this paragraph for an amount that
is greater than 4 percent of the loan amount received
by the eligible entity under paragraph (1).
''(C) Repayment.--Repayment of the special
advance--
''(i) shall be required during the 10-year
period beginning on the date on which the
special advance is made; and
''(ii) at the election of the eligible
entity, may be deferred to the end of the 10-
year period.
''(7) Limitation.--All special advances shall be made under
a loan described in paragraph (1) during the first 10 years of
the term of the loan.
''(d) Loans to Qualified Consumers.--
''(1) Terms of loans.--Loans made by an eligible entity to
qualified consumers using loan funds provided by the Secretary
under subsection (c)--
''(A) may bear interest, not to exceed 3 percent,
to be used for purposes that include--
''(i) to establish a loan loss reserve; and
''(ii) to offset personnel and program
costs of eligible entities to provide the
loans;
''(B) shall finance energy efficiency measures for
the purpose of decreasing energy usage or costs of the
qualified consumer by an amount that ensures, to the
maximum extent practicable, that a loan term of not
more than 10 years will not pose an undue financial
burden on the qualified consumer, as determined by the
eligible entity;
''(C) shall not be used to fund purchases of, or
modifications to, personal property unless the personal
property is or becomes attached to real property
(including a manufactured home) as a fixture;
''(D) shall be repaid through charges added to the
electric bill for the property for, or at which, energy
efficiency measures are or will be implemented, on the
condition that this requirement does not prohibit--
''(i) the voluntary prepayment of a loan by
the owner of the property; or
''(ii) the use of any additional repayment
mechanisms that are--
''(I) demonstrated to have
appropriate risk mitigation features,
as determined by the eligible entity;
or
''(II) required if the qualified
consumer is no longer a customer of the
eligible entity; and
''(E) shall require an energy audit by an eligible
entity to determine the impact of proposed energy
efficiency measures on the energy costs and consumption
of the qualified consumer.
''(2) Contractors.--In addition to any other qualified
general contractor, eligible entities may serve as general
contractors.
''(e) Contract for Measurement and Verification, Training, and
Technical Assistance.--
''(1) In general.--Not later than 90 days after the date of
enactment of this section, the Secretary--
''(A) shall establish a plan for measurement and
verification, training, and technical assistance of the
program; and
''(B) may enter into one or more contracts with a
qualified entity for the purposes of--
''(i) providing measurement and
verification activities; and
''(ii) developing a program to provide
technical assistance and training to the
employees of eligible entities to carry out
this section.
''(2) Use of subcontractors authorized.--A qualified entity
that enters into a contract under paragraph (1) may use
subcontractors to assist the qualified entity in carrying out
the contract.
''(f) Fast Start Demonstration Projects.--
''(1) In general.--The Secretary shall offer to enter into
agreements with eligible entities (or groups of eligible
entities) that have energy efficiency programs described in
subsection (c)(2)(C) to establish an energy efficiency loan
demonstration projects consistent with the purposes of this
section.
''(2) Evaluation criteria.--In determining which eligible
entities to award loans under this section, the Secretary shall
take into consideration eligible entities that--
''(A) implement approaches to energy audits and
investments in energy efficiency measures that yield
measurable and predictable savings;
''(B) use measurement and verification processes to
determine the effectiveness of energy efficiency loans
made by eligible entities;
''(C) include training for employees of eligible
entities, including any contractors of such entities,
to implement or oversee the activities described in
subparagraphs (A) and (B);
''(D) provide for the participation of a majority
of eligible entities in a State;
''(E) reduce the need for generating capacity;
''(F) provide efficiency loans to--
''(i) in the case of a single eligible
entity, not fewer than 20,000 consumers; or
''(ii) in the case of a group of eligible
entities, not fewer than 80,000 consumers; and
''(G) serve areas in which, as determined by the
Secretary, a large percentage of consumers reside--
''(i) in manufactured homes; or
''(ii) in housing units that are more than
50 years old.
''(3) Deadline for implementation.--To the maximum extent
practicable, the Secretary shall enter into agreements
described in paragraph (1) by not later than 90 days after the
date of enactment of this section.
''(4) Effect on availability of loans nationally.--Nothing
in this subsection shall delay the availability of loans to
eligible entities on a national basis beginning not later than
180 days after the date of enactment of this section.
''(5) Additional demonstration project authority.--
''(A) In general.--The Secretary may conduct
demonstration projects in addition to the project
required by paragraph (1).
''(B) Inapplicability of certain criteria.--The
additional demonstration projects may be carried out
without regard to subparagraphs (D), (F), or (G) of
paragraph (2).
''(g) Additional Authority.--The authority provided in this section
is in addition to any other authority of the Secretary to offer loans
under any other law.
''(h) Effective Period.--Subject to the availability of funds and
except as otherwise provided in this section, the loans and other
expenditures required to be made under this section shall be available
until expended, with the Secretary authorized to make new loans as
loans are repaid.
''(i) Regulations.--
''(1) In general.--Except as otherwise provided in this
subsection, not later than 180 days after the date of enactment
of this section, the Secretary shall promulgate such
regulations as are necessary to implement this section.
''(2) Procedure.--The promulgation of the regulations and
administration of this section shall be made without regard
to--
''(A) the Statement of Policy of the Secretary of
Agriculture effective July 24, 1971 (36 Fed. Reg.
13804), relating to notices of proposed rulemaking and
public participation in rulemaking; and
''(B) chapter 35 of title 44, United States Code
(commonly known as the 'Paperwork Reduction Act').
''(3) Congressional review of agency rulemaking.--In
carrying out this section, the Secretary shall use the
authority provided under section 808 of title 5, United States
Code.
''(4) Interim regulations.--Notwithstanding paragraphs (1)
and (2), to the extent regulations are necessary to carry out
any provision of this section, the Secretary shall implement
such regulations through the promulgation of an interim
rule.''.
Solution:
Rural Energy Savings Program Act - Amends the Farm Security and Rural Investment Act of 2002 to direct the Secretary of Agriculture (USDA), through the Rural Utilities Service, to make interest-free loans to eligible entities (public power districts, public utility districts, or specified electric cooperatives that borrowed and repaid, prepaid, or are paying an electric loan made or guaranteed by the Rural Utilities Service) for loans to consumers to implement energy efficient measures.

Provides a special advance for start-up activities.

Authorizes the Secretary to contract with a qualified entity to provide verification and measurement activities and employee technical assistance and training.

Directs the Secretary to offer to enter into agreements with eligible entities, or groups of eligible entities, that have specified energy efficiency programs to establish energy efficiency loan demonstration projects.