1.
This Act may be cited as the
Climate Change Technology Deployment
and Infrastructure Credit Act of 2005
.
2.Greenhouse gas
intensity reducing technology strategiesTitle XVI of the Energy Policy Act of 1992
(42 U.S.C. 13381 et seq.) is amended by adding at the end the following:
1610.Greenhouse gas
intensity reducing strategies
(a)In this section:
(1)The term
carbon sequestration means the capture of carbon dioxide through
terrestrial, geological, biological, or other means, which prevents the release
of carbon dioxide into the atmosphere.
(2)The term Committee
means the
Interagency Coordinating Committee on Climate Change Technology established
under subsection (c)(1).
(3)The term
greenhouse gas
means—
(A)carbon dioxide;
(B)methane;
(C)nitrous oxide;
(D)hydrofluorocarbons;
(E)perfluorocarbons;
(F)sulfur hexafluoride; and
(G)any other gas that the Director of the
Office of Science and Technology Policy, in consultation with the National
Academy of Sciences, defines as a greenhouse gas for purposes of this section,
based on credible scientific research.
(4)The term
greenhouse gas intensity
means the ratio of greenhouse gas
emissions to economic output.
(5)The term
National Laboratory
means a laboratory owned by the Department
of Energy, including the following:
(A)Argonne National Laboratory.
(B)Idaho National Laboratory.
(C)Brookhaven National Laboratory.
(D)Oak Ridge National Laboratory.
(E)Los Alamos National Laboratory.
(F)Sandia National Laboratory.
(G)Lawrence Livermore National
Laboratory.
(H)National Energy Technology
Laboratory.
(I)National Renewable Energy
Laboratory.
(J)Pacific Northwest National
Laboratory.
(6)The term Working
Group
means the Climate Change Technology Working Group established
under subsection (g)(1).
(b)Office of
science and technology policy strategy
(1)Based on the
recommendations of the report submitted under subsection (f)(2), the Director
of the Office of Science and Technology Policy shall develop a national
strategy to promote greenhouse gas intensity reducing technologies and
practices developed through research and development programs conducted by
National Laboratories, other Federal research facilities, universities, and the
private sector.
(2)The Director of the Office of Science and
Technology Policy shall annually submit to the President and make available to
the public a report on the activities carried out in furtherance of the
strategy developed under paragraph (1).
(c)Interagency
coordinating committee on climate change technology
(1)Not later than 180
days after the date of enactment of this section, the Secretary shall establish
an Interagency Coordinating Committee on Climate Change Technology to
coordinate Federal climate change activities and programs carried out in
furtherance of the strategy developed under subsection (b)(1).
(2)The Committee shall be composed of at least
6 members, including—
(A)the Secretary;
(B)the Secretary of Commerce;
(C)the Chairman of the Council on
Environmental Quality;
(D)the Secretary of Agriculture;
(E)the Administrator of the Environmental
Protection Agency; and
(F)the Secretary of Transportation.
(3)The Secretary shall provide such personnel
as are necessary to enable the Committee to perform the duties of the
Committee.
(d)Climate Change
Science Program and Climate Change Technology Program
(1)Climate Change
Science ProgramNot later
than 180 days after the date on which the first report is submitted under
subsection (b)(2), the Secretary of Commerce, in cooperation with the
Committee, shall establish within the Department of Commerce the Climate Change
Science Program to assist the Committee in the interagency coordination of
climate change science research and related activities, including—
(A)the assessments of the state of knowledge
on climate change; and
(B)carrying out supporting studies, planning,
and analyses of the science of climate change.
(2)Climate Change
Technology ProgramNot later
than 180 days after the date on which the first report is submitted under
subsection (b)(2), the Secretary, in cooperation with the Committee, shall
establish within the Department of Energy, the Climate Change Technology
Program to assist the Committee in the interagency coordination of climate
change technology research, development, demonstration, and deployment to
reduce greenhouse gas intensity.
(e)
(1)The Secretary shall
conduct an inventory and evaluation of greenhouse gas intensity reducing
technologies that have been developed, or are under development, by the
National Laboratories to determine which technologies are suitable for
commercialization and deployment.
(2)Not later than 180 days after the
completion of the inventory under paragraph (1), the Secretary shall submit to
the Secretary of Commerce and Congress a report that includes the results of
the completed inventory and any recommendations of the Secretary.
(3)The Secretary, in consultation with the
Secretary of Commerce, shall use the results of the inventory as guidance in
the commercialization of greenhouse gas intensity reducing technologies.
(f)Greenhouse gas
intensity reducing technology study
(1)As soon as practicable after the date of
enactment of this section, the Committee shall conduct and submit to the
Secretary a study on—
(A)the commercialization and diffusion of new
and existing technologies to reduce greenhouse gas intensity; and
(B)ways to increase the development and
deployment of cost-effective technologies and practices.
(2)Not later than 180 days after the
completion of the study under paragraph (1), the Secretary shall submit to
Congress and the Director of the Office of Science and Technology Policy a
report that describes—
(A)the results of the study; and
(B)any recommendations of the Committee
to—
(i)increase commercialization of the
technologies and practices described in paragraph (1); and
(ii)promote the long-term commercialization and
deployment of those technologies and practices.
(g)Climate change
technology working group
(1)The Secretary, in
consultation with the Committee, shall establish a Climate Change Technology
Working Group to identify statutory, regulatory, and economic barriers to the
commercialization of greenhouse gas intensity reducing technologies and
practices.
(2)The Working Group shall be composed of the
following members, to be appointed by the Secretary, in consultation with the
Committee:
(A)1 representative from each National
Laboratory.
(B)3 members shall be representatives of
energy-producing trade organizations.
(C)3 members shall represent energy-intensive
trade organizations.
(D)3 members shall represent groups that
represent end-use energy and other consumers.
(E)3 members shall be employees of the Federal
Government who are experts in energy technology, intellectual property, tax,
and regulation.
(F)3 members shall be representatives of
universities with expertise in energy technology development that are
recommended by the National Academy of Engineering.
(3)Not later than 1 year after the date of
enactment of this section and annually thereafter, the Working Group shall
submit to the Committee a report that describes—
(A)the findings of the Working Group;
and
(B)any recommendations of the Working Group
for the removal of barriers to commercialization and increasing the use of
greenhouse gas intensity reducing technologies.
(4)
(A)A member of the
Working Group who is not an officer or employee of the Federal Government shall
be compensated at a rate equal to the daily equivalent of the annual rate of
basic pay prescribed for level IV of the Executive Schedule under section 5315
of title 5, United States Code, for each day (including travel time) during
which the member is engaged in the performance of the duties of the Working
Group.
(B)A member of the
Working Group who is an officer or employee of the Federal Government shall
serve without compensation in addition to the compensation received for the
services of the member as an officer or employee of the Federal
Government.
(C)A member of the
Working Group shall be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for an employee of an agency under subchapter
I of chapter 57 of title 5, United States Code, while away from the home or
regular place of business of the member in the performance of the duties of the
Commission.
(h)Greenhouse gas
intensity reducing technology deployment
(1)Based on the strategy
developed under subsection (b)(1), the technology inventory conducted under
subsection (e)(1), and the greenhouse gas intensity reducing technology study
report submitted under subsection (e)(2), the Committee shall develop a program
for implementation by the Climate Credit Board established under section
1611(b)(2)(A) that would provide for the removal of domestic barriers to the
deployment of greenhouse gas intensity reducing technologies.
(2)In developing the program under paragraph
(1), the Committee shall consider in the aggregate—
(A)the cost-effectiveness of the
technology;
(B)fiscal and regulatory barriers;
(C)statutory barriers; and
(D)intellectual property issues.
(3)Not later than 1 year after the date of
enactment of this section, the Committee shall submit to the President and
Congress a report that—
(A)identifies the barriers to, and the
commercial risks associated with, the deployment of greenhouse gas intensity
reducing technologies;
(B)includes a plan for carrying out eligible
projects with Federal financial assistance under section 1611; and
(C)describes the program developed under
paragraph (1).
(i)Procedures for
calculating, monitoring, and analyzing greenhouse gas intensity
(1)Using the guidelines
issued under section 1605(b), the Committee, in collaboration with the
Administrator of the Energy Information Administration and the National
Institute of Standards and Technology, shall develop and propose standards and
best practices for calculating, monitoring, and analyzing greenhouse gas
intensity.
(2)The standards and best practices shall
address measurement of greenhouse gas intensity by industry sector.
(3)To provide the public with an opportunity
to comment on the standards and best practices proposed under paragraph (1),
the standards and best practices shall be published in the Federal
Register.
(4)To ensure that high
quality information is produced, the standards and best practices developed
under paragraph (1) shall conform to the guidelines established under section
515 of the Treasury and General Government Appropriations Act, 2001 (commonly
known as the Data Quality Act
) (44 U.S.C. 3516 note; 114 Stat.
2763A–1543), as enacted into law by section 1(a)(3) of Public Law
106–554.
(j)
(1)The Secretary shall
conduct and participate in demonstration projects approved by the Committee,
including demonstration projects relating to—
(A)coal gasification and coal
liquefaction;
(B)carbon sequestration;
(C)cogeneration technology initiatives;
(D)advanced nuclear power projects;
(E)lower emission transportation;
(F)renewable energy; and
(G)transmission upgrades.
(2)The Committee shall approve a demonstration
project under paragraph (1) if the proposed demonstration project would—
(A)increase the reduction of the greenhouse
gas intensity to levels below that which would be achieved by technologies
being used in the United States as of the date of enactment of this
section;
(B)maximize the potential return on Federal
investment;
(C)demonstrate distinct roles in
public-private partnerships;
(D)produce a large-scale reduction of
greenhouse gas intensity if commercialization occurred; and
(E)support a diversified portfolio to mitigate
the uncertainty associated with a single technology.
(k)Cooperative
research and development agreementsIn carrying out greenhouse gas intensity
reduction research and technology deployment, the Secretary may enter into
cooperative research and development agreements under section 12 of the
Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a).
(l)Authorization
of appropriationsThere are
authorized to be appropriated such sums as are necessary to carry out this
section (other than subsection (j)).
(m)The authority
provided by this section terminates effective December 31,
2010.
.
3.Climate infrastructure
credit
Title XVI of the Energy Policy Act of 1992
(42 (U.S.C. 13381 et seq.) (as amended by section 2) is amended by adding at
the end the following:
1611.Climate
infrastructure credit
(a)In this section:
(1)Advanced
climate technology or systemThe term advanced climate technology
or system means a climate technology or system that is not in general
usage as of the date of enactment of this section.
(2)The term Board
means the
Climate Credit Board established under subsection (b)(2)(A).
(3)The term direct
loan
has the meaning given the term in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a).
(4)The term
eligible project means a demonstration project that is approved
under section 1610(j)(1).
(5)The term
eligible project cost means any amount incurred for an eligible
project that is paid by, or on behalf of, an obligor, including the costs
of—
(A)pre-construction activities,
including—
(i)detailed project engineering and design
work;
(ii)environmental reviews and permitting;
and
(iii)other pre-construction activities, as
determined by the Secretary;
(B)construction activities, including—
(i)the acquisition of capital
equipment;
(ii)construction management; and
(iii)construction contingencies; and
(C)acquiring land (including any improvements
to the land) relating to the eligible project; and
(D)financing the eligible project,
including—
(i)providing capitalized interest necessary to
meet market requirements;
(ii)maintaining reasonably required reserve
funds;
(iii)capital issuance expenses; and
(iv)other carrying costs during
construction.
(6)Federal
financial assistanceThe term
Federal financial assistance means any credit-based financial
assistance, including a direct loan, loan guarantee, a line of credit (which
serves as standby default coverage or standby interest coverage), production
incentive payment under subsection (g)(1)(B), or other credit-based financial
assistance mechanism for an eligible project that is—
(A)authorized to be made available by the
Secretary for an eligible project under this section; and
(B)provided in accordance with the
Federal Credit Reform Act of 1990
(2 U.S.C.
661 et seq.).
(7)The term
investment-grade rating means a rating category of BBB minus,
Baa3, or higher assigned by a rating agency for eligible project obligations
offered into the capital markets.
(8)The term lender means any
non-Federal qualified institutional buyer (as defined in section 230.144A(a) of
title 17, Code of Federal Regulations (or any successor regulation), known as
Rule 144A(a) of the Securities and Exchange Commission and issued under the
Securities Act of 1933
(15 U.S.C.
77a et seq.)), including—
(A)a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986) that is a qualified
institutional buyer; and
(B)a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986) that is a qualified institutional
buyer.
(9)The term loan
guarantee means any guarantee or other pledge by the Secretary to pay
all or part of the principal of and interest on a loan or other debt obligation
that is issued by an obligor and funded by a lender.
(10)The term obligor means a
person or entity (including a corporation, partnership, joint venture, trust,
or governmental entity, agency, or instrumentality) that is primarily liable
for payment of the principal of, or interest on, a Federal credit
instrument.
(11)The term
project obligation means any note, bond, debenture, or other debt
obligation issued by an obligor in connection with the financing of an eligible
project, other than a Federal credit instrument.
(12)The term rating
agency means a bond rating agency identified by the Securities and
Exchange Commission as a Nationally Recognized Statistical Rating
Organization.
(13)The term
regulatory failure means a situation in which, because of a
breakdown in a regulatory process or an indefinite delay caused by a judicial
challenge to the regulatory consideration of a specific eligible project, the
Federal or State regulatory or licensing process governing the siting,
construction, or commissioning of an eligible project does not produce a
definitive determination that the eligible project may go forward or stop
within a predetermined and prescribed time period, as determined by the
Secretary.
(14)The term secured
loan means a loan or other secured debt obligation issued by an obligor
and funded by the Secretary in connection with the financing of an eligible
project.
(15)The term
standby default coverage means a pledge by the Secretary to pay
all or part of the debt obligation issued by an obligor and funded by a lender,
plus all or part of obligor equity, if an eligible project fails to receive an
operating license in a period of time established by the Secretary because of a
regulatory failure or other specific issue identified by the Secretary.
(16)Standby
interest coverageThe term
standby interest coverage means a pledge by the Secretary to
provide to an obligor, at a future date and on the occurrence of 1 or more
events, a direct loan, the proceeds of which shall be used by the obligor to
maintain the current status of the obligor on interest payments due on 1 or
more loans or other project obligations issued by an obligor and funded by a
lender for an eligible project.
(17)The term subsidy
amount means the amount of budget authority sufficient to cover the
estimated long-term cost to the Federal Government of a Federal credit
instrument issued by the Secretary to an eligible project, calculated on a net
present value basis, excluding administrative costs and any incidental effects
on governmental receipts or outlays in accordance with the
Federal Credit Reform Act of 1990
(2 U.S.C.
661 et seq.).
(18)The term
substantial completion means that an eligible project has been
determined by the Board to be in, or capable of, commercial operation.
(b)
(1)The Secretary shall
make available to eligible project developers and eligible project owners, in
accordance with this section, such financial assistance as is necessary to
supplement private sector financing for eligible projects.
(2)
(A)Not later than 120
days after the date of enactment of this section, the Secretary shall establish
within the Department of Energy a Climate Credit Board composed of—
(i)the Under Secretary of Energy, who shall
serve as Chairperson;
(ii)the Chief Financial Officer of the
Department of Energy;
(iii)the Assistant Secretary of Energy for
Policy and International Affairs;
(iv)the Assistant Secretary of Energy for
Energy Efficiency and Renewable Energy; and
(v)such other individuals as the Secretary
determines to have the experience and expertise (including expertise in
corporate and project finance and the energy sector) necessary to carry out the
duties of the Board.
(B)The Board shall—
(i)implement the program developed under
section 1610(h)(1) in accordance with paragraph (3);
(ii)issue regulations and criteria in
accordance with paragraph (4);
(iii)conduct negotiations with individuals and
entities interested in obtaining assistance under this section;
(iv)recommend to the Secretary potential
recipients and amounts of grants of assistance under this section;
(v)carry out such other projects and
activities as the Interagency Coordinating Committee on Climate Change
Technology may recommend; and
(vi)establish metrics to indicate the progress
of the greenhouse gas intensity reducing technology deployment program and
individual projects carried out under the program toward meeting the criteria
established by section 1610(j)(2).
(3)Greenhouse gas
intensity reducing technology deployment programNot later than 1 year after the date of
enactment of this section, the Board shall implement the greenhouse gas
intensity reducing technology deployment program developed under section
1610(h)(1).
(4)
(A)Not later than 1 year
after the date of enactment of this section, the Board shall issue and publish
in the Federal Register such regulations and criteria as are necessary to
implement this section.
(B)The regulations and criteria shall provide
for, at a minimum—
(i)a competitive process and the general terms
and conditions for the provision of assistance under this section;
(ii)the procedures by which eligible project
owners and eligible project developers may request financial assistance under
this section; and
(iii)the collection of any other information
necessary for the Secretary to carry out this section, including a process for
negotiating the terms and conditions of assistance provided under this
section.
(C)The determination of
eligibility of, and criteria for selecting, eligible projects to receive
assistance under this section shall be carried out in accordance with
subsection (c).
(D)Conditions for
provision of assistanceThe
Board shall not provide assistance under this section unless the Board
determines that the terms, conditions, maturity, security, schedule, and
amounts of repayments of the assistance are reasonable and meet such standards
as the Board determines are appropriate to protect the financial interests of
the United States.
(5)Reports to the
President and CongressNot
later than 4 years after the date of enactment of this section, and every 2
years thereafter, the Board shall submit to the Secretary, for transmittal to
the President and Congress, a report that describes—
(A)the progress in carrying out this
section;
(B)the financial performance of the eligible
projects that are receiving, or have received, assistance under this section as
of the date of the report; and
(C)the progress and value to the United States
of the program under this section, including a recommendation as to whether the
objectives of this section are best served by—
(i)continuing the program under the authority
of the Secretary;
(ii)establishing a Federal Government
corporation or Federal Government-sponsored enterprise to administer the
program; or
(iii)phasing out the program and relying on the
capital markets to fund the kinds of energy infrastructure investments assisted
by this section without Federal participation.
(6)The Board shall protect the confidentiality
of any information provided by an applicant for assistance under this section
that the applicant certifies to be commercially sensitive or that is protected
intellectual property.
(c)General
requirements regarding assistance, determination of eligibility, and project
selection
(1)The Board shall not
provide assistance to an eligible project under this section unless the Board
first determines that the amount of assistance to be provided for the eligible
project is not greater than the amount of assistance required to achieve the
criteria established under section 1610(j)(2) with respect to the eligible
project.
(2)To be eligible to receive assistance under
this section, an eligible project shall, as determined by the Board—
(A)be supported by an application that
contains all information required to be included by, and is submitted to and
approved by the Board in accordance with, the regulations and criteria issued
by the Board under subsection (b)(4);
(B)be nationally or regionally significant
by—
(i)reducing greenhouse gas intensity;
(ii)generating economic benefits;
(iii)contributing to energy security;
(iv)contributing to energy and technology
diversity in the energy economy of the United States;
(v)contributing to energy and electricity
price stability; or
(vi)otherwise enhancing national or regional
energy efficiency, reliability, and robustness of performance;
(C)contain an advanced climate technology or
system that could—
(i)significantly improve the efficiency,
security, reliability, and environmental performance of the energy economy of
the United States; and
(ii)reduce greenhouse gas emissions;
(D)have revenue sources dedicated to repayment
of credit support-based project financing, such as revenue—
(i)from the sale of sequestered carbon;
(ii)from the sale of energy, electricity, or
other products from eligible projects that employ advanced climate technologies
and systems;
(iii)from the sale of transportation of
commerce;
(iv)from the sale of electricity or generating
capacity, in the case of electricity infrastructure;
(v)from the sale or transmission of
energy;
(vi)associated with energy efficiency gains, in
the case of other energy projects; or
(vii)from other dedicated revenue
sources;
(E)include a project proposal and agreement
for project financing repayment that demonstrates to the satisfaction of the
Board that the dedicated revenue sources described in subparagraph (D) will be
adequate to repay project financing provided under this section;
(F)reduce greenhouse gas intensity on a
national or regional basis; and
(G)if the eligible project involves new
transmission capacity, link to low-emission projects.
(3)Except as otherwise provided in this
section—
(A)the total cost of an eligible project
provided Federal financial assistance under this section shall be at least
$40,000,000;
(B)the Federal share of an eligible project
provided Federal financial assistance under this section shall be not more than
20 percent of the total cost of carrying out the eligible project;
(C)not more than $200,000,000 in Federal
financial assistance shall be provided to any individual eligible project;
and
(D)an eligible project shall not be eligible
for financial assistance from any other Federal program during any period that
Federal financial assistance is provided to the eligible project under this
section.
(4)Selection among
eligible projects
(A)Establishment
of selection criteriaThe
Board shall establish criteria for selecting which eligible projects will
receive assistance under this section.
(B)The selection criteria shall include a
determination by the Board of the extent to which—
(i)the eligible project reduces greenhouse gas
intensity beyond reductions achieved by technology available as of October 15,
1992;
(ii)financing for the eligible project has
appropriate security features, such as a rate covenant, to ensure
repayment;
(iii)assistance under this section for the
eligible project would foster innovative public-private partnerships and
attract private debt or equity investment;
(iv)assistance under this section for an
eligible project would enable the eligible project to proceed at an earlier
date than would otherwise be practicable;
(v)the eligible project uses new technologies
that enhance the efficiency, reduce the environmental impact, improve the
reliability, or improve the safety, of the eligible project;
(vi)the eligible project helps to maintain or
protect the environment, especially with respect to having a low level of
emissions to the atmosphere;
(vii)assistance for the eligible project
provided under this section could reduce the contribution of other Federal
grant or funding assistance to the eligible project; and
(viii)the eligible project is nationally or
regionally significant in terms of generating economic benefits, supporting
international commerce, or otherwise enhancing national energy efficiency,
security, reliability, robustness, and environmental performance.
(C)An application
for assistance for an eligible project under this section shall include such
information as the Secretary determines to be necessary concerning—
(i)the amount of budget authority required to
fund the Federal credit instrument requested for the eligible project;
(ii)the estimated construction costs of the
proposed eligible project;
(iii)estimates of construction and operating
costs of the eligible project;
(iv)projected revenues from the eligible
project; and
(v)any other financial aspects of the eligible
project, including assurances, that the Board determines to be
appropriate.
(D)Preliminary
rating opinion letterThe
Board shall require each applicant seeking assistance for an eligible project
under this section to provide a preliminary rating opinion letter from at least
1 credit rating agency indicating that the senior obligations of the eligible
project have the potential to achieve an investment-grade rating.
(E)Before entering
into any agreement to provide assistance for an eligible project under this
section, the Board, in consultation with the Secretary, the Director of the
Office of Management and Budget, and each credit rating agency providing a
preliminary rating opinion letter under subparagraph (D), shall determine and
maintain an appropriate capital reserve subsidy amount for each line of credit
established for the eligible project, taking into account the information
contained in the preliminary rating opinion letter.
(F)Investment-grade
rating requirement
(i)The funding of any
assistance under this section shall be contingent on the senior obligations of
the eligible project receiving an investment-grade rating from at least 1
credit rating agency.
(ii)In determining whether an investment-grade
rating is appropriate under clause (i), the credit rating agency shall take
into account the availability of Federal financial assistance under this
section.
(5)Maximum
available climate credit supportNotwithstanding any assistance limitation
under any other provision of this section, the Secretary shall not provide
energy credit support to any eligible project in the form of a secured loan or
loan guarantee under subsection (f), production incentive payments under
subsection (g), or other credit-based financial assistance under subsection
(h), the combined total of which exceeds 20 percent of eligible project costs,
excluding the value of standby default coverage under subsection (d) and
standby interest coverage under subsection (e), as determined by the
Secretary.
(d)
(1)Agreements; use
of proceeds
(A)
(i)Subject to
subparagraph (B), the Board, in consultation with the Secretary, may enter into
agreements to provide standby default coverage for advanced climate
technologies or systems of an eligible project.
(ii)Coverage under clause (i) may be provided
to 1 or more obligors and debt holders to be triggered at future dates on the
occurrence of certain events for any eligible project selected under subsection
(c).
(B)The proceeds of
standby default coverage made available under this subsection shall be
available to reimburse all or part of the debt obligation for an eligible
project issued by an obligor and funded by a lender, plus all or part of
obligor equity, in the event that, because of a regulatory failure or other
event specified by the Secretary pursuant to this section, an eligible advanced
climate technology or system for an eligible project fails to receive an
operating license in a period of time specified by the Board in accordance with
this subsection.
(2)
(A)Standby default
coverage under this subsection with respect to an eligible project shall be on
such terms and conditions and contain such covenants, representations,
warranties, and requirements (including requirements for audits) as the Board
determines to be appropriate.
(B)The total amount of
standby default coverage provided for an eligible project shall not exceed 100
percent of the reasonably anticipated eligible project costs, including debt
and equity.
(C)Any exercise on the standby default
coverage shall be made only if a facility involved with the eligible project
fails, because of regulatory failure or other specific issues specified by the
Secretary, to receive an operating license by such deadline as the Secretary
shall establish.
(D)The cost of standby
default coverage shall be assumed by the Secretary subject to the risk
assessment calculation required under subsection (c)(4)(E) and the availability
of funds for that purpose.
(E)In carrying out this section, the Secretary
may—
(i)establish fees at a level sufficient to
cover all or a portion of the administrative costs incurred by the Federal
Government in providing standby default coverage under this subsection;
and
(ii)require that the fees be paid upon
application for a standby default coverage agreement under this
subsection.
(F)In the event
that regulatory approval to operate a facility is suspended as a result of
regulatory failure or other circumstances specified by the Secretary, standby
default coverage shall be available beginning on the date of substantial
completion and ending not later than 5 years after the date on which operation
of the facility is scheduled to commence.
(G)Rights of
third-party creditors
(i)Against Federal
GovernmentA third-party
creditor of an obligor shall not have any right against the Federal Government
with respect to any amounts other than those specified in subparagraph
(B).
(ii)An obligor may assign all or part of the
standby default coverage for an eligible project to 1 or more lenders or to a
trustee on behalf of the lenders.
(H)Result of
exercise of standby default coverageIf standby default coverage is exercised by
the obligor of an eligible project—
(i)the Federal Government shall become the
sole owner of the eligible project, with all rights and appurtenances to the
eligible project; and
(ii)the Board shall dispose of the assets of
the eligible project on terms that are most favorable to the Federal
Government, which may include continuing to licensing and commercial operation
or resale of the eligible project, in whole or in part, if that is the best
course of action in the judgment of the Board.
(I)Estimate of
assets at time of terminationIf standby default coverage is exercised
and an eligible project is terminated, the Board, in making a determination of
whether to dispose of the assets of the eligible project or continue the
eligible project to licensing and commercial operation, shall obtain a fair and
impartial estimate of the eligible project assets at the time of
termination.
(J)Relationship to
other credit instrumentsAn
eligible project that receives standby default coverage under this subsection
may receive a secured loan or loan guarantee under subsection (f), production
incentive payments under subsection (g), or assistance through a credit-based
financial assistance mechanism under subsection (h).
(K)Other
conditions and requirementsThe Secretary may impose such other
conditions and requirements in connection with any insurance provided under
this subsection (including requirements for audits) as the Secretary determines
to be appropriate.
(e)Standby
interest coverage
(1)
(A)Subject to subparagraph (B), the Board may
enter into agreements to make standby interest coverage available to 1 or more
obligors in the form of loans for advanced climate or energy technologies or
systems to be made by the Board at future dates on the occurrence of certain
events for any eligible project selected under subsection (c)(4).
(B)Subject to
subsection (c)(3), the proceeds of standby interest coverage made available
under this subsection shall be available to pay the debt service on project
obligations issued to finance eligible project costs of an eligible project if
a delay in commercial operations occurs due to a regulatory failure or other
condition determined by the Secretary.
(2)
(A)Standby interest
coverage under this subsection with respect to an eligible project shall be
made on such terms and conditions (including a requirement for an audit) as the
Secretary determines appropriate.
(B)
(i)The total amount of
standby interest coverage for an eligible project under this subsection shall
not exceed 20 percent of the reasonably anticipated eligible project costs of
the eligible project.
(ii)The amount drawn in any
1 year for an eligible project under this subsection shall not exceed 20
percent of the total amount of the standby interest coverage for the eligible
project.
(C)The standby
interest coverage for an eligible project shall be available during the
period—
(i)beginning on a date following substantial
completion of the eligible project that regulatory approval to operate a
facility under the eligible project is suspended as a result of regulatory
failure or other condition determined by the Secretary; and
(ii)ending on a date that is not later than 5
years after the eligible project is scheduled to commence commercial
operations.
(D)Subject to
subsection (c)(4)(E), the cost of standby interest coverage for an eligible
project under this subsection shall be borne by the Secretary.
(E)Any draw on the standby interest coverage
for an eligible project shall—
(i)represent a loan;
(ii)be made only if there is a delay in
commercial operations after the substantial completion of the eligible project;
and
(iii)be subject to the overall credit support
limitations established under subsection (c)(5).
(F)
(i)Subject to clause
(ii), the interest rate on a loan resulting from a draw on standby interest
coverage under this subsection shall be established by the Secretary.
(ii)The interest rate on a
loan resulting from a draw on standby interest coverage under this subsection
shall not be less than the current average market yield on outstanding
marketable obligations of the United States with a maturity of 10 years, as of
the date on which the standby interest coverage is obligated.
(G)The standby interest coverage for an
eligible project—
(i)shall be payable, in whole or in part, from
dedicated revenue sources generated by the eligible project;
(ii)shall require security for the project
obligations; and
(iii)may have a lien on revenues described in
clause (i), subject to any lien securing project obligations.
(H)Rights of
third-party creditors
(i)Against Federal
GovernmentA third-party
creditor of the obligor shall not have any right against the Federal Government
with respect to any draw on standby interest coverage under this
subsection.
(ii)An obligor may assign the standby interest
coverage to 1 or more lenders or to a trustee on behalf of the lenders.
(I)A secured loan for an eligible project made
under this subsection shall be subordinate to senior private debt issued by a
lender for the eligible project.
(J)A secured loan for an
eligible project under this subsection shall be nonrecourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of the eligible
project.
(K)The Board may impose fees at a level
sufficient to cover all or part of the costs to the Federal Government of
providing standby interest coverage for an eligible project under this
subsection.
(3)
(A)The Secretary
shall establish a repayment schedule and terms and conditions for each loan for
an eligible project under this subsection based on the projected cash flow from
revenues for the eligible project.
(B)Scheduled repayments
of principal or interest on a loan under this subsection shall—
(i)commence not later than 5 years after the
end of the period of availability specified in paragraph (2)(C); and
(ii)be completed, with interest, not later than
10 years after the end of the period of availability.
(C)Sources of
repayment fundsThe sources
of funds for scheduled loan repayments under this subsection shall
include—
(i)the sale of electricity or generating
capacity;
(ii)the sale or transmission of energy;
(iii)revenues associated with energy efficiency
gains; or
(iv)other dedicated revenue sources, such as
carbon use.
(D)
(i)At the discretion of
the obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the project obligations and secured loan, and all
deposit requirements under the terms of any trust agreement, bond resolution,
or similar agreement securing project obligations, may be applied annually to
prepay the secured loan without penalty.
(ii)Use of
proceeds of refinancingThe
secured loan may be prepaid at any time without penalty from the proceeds of
refinancing from non-Federal funding sources.
(f)Secured loans
and loan guarantees
(1)
(A)Subject to subparagraph (B), the Board may
enter into agreements with 1 or more obligors to make secured loans for
eligible projects involving advanced climate technologies or systems.
(B)Subject to paragraph
(2), the proceeds of a secured loan for an eligible project made available
under this subsection shall be available, in conjunction with the equity of the
obligor and senior debt financing for the eligible project, to pay for eligible
project costs.
(2)
(A)A secured loan under
this subsection with respect to an eligible project shall be made on such terms
and conditions (including requirements for an audit) as the Board, in
consultation with the Secretary, determines appropriate.
(B)Subject to subsection
(c)(5), the total amount of the secured loan for an eligible project under this
subsection shall not exceed 20 percent of the reasonably anticipated eligible
project costs of the eligible project.
(C)The Board may
enter into a contract with the owner or operator of an eligible project to
provide a secured loan during the period—
(i)beginning on the date that the financial
structure of the eligible project is established; and
(ii)ending on the date of the start of
construction of the eligible project.
(D)Subject to
subsection (c)(4)(E), the cost of a secured loan for an eligible project under
this subsection shall be borne by the Secretary.
(E)
(i)Subject to clause
(ii), the interest rate on a secured loan under this subsection shall be
established by the Secretary.
(ii)The interest rate on a
loan resulting from a secured loan under this subsection shall not be less than
the current average market yield on outstanding marketable obligations of the
United States of comparable maturity, as of the date of the execution of the
loan agreement.
(F)The secured loan—
(i)shall be payable, in whole or in part, from
dedicated revenue sources generated by the eligible project;
(ii)shall include a rate covenant, coverage
requirement, or similar security feature supporting the project obligations;
and
(iii)may have a lien on revenues described in
clause (i), subject to any lien securing project obligations.
(G)Rights of
third-party creditors
(i)Against Federal
GovernmentA third-party
creditor of the obligor shall not have any right against the Federal Government
with respect to any payments due to the Federal Government under this
subsection.
(ii)An obligor may assign the secured loan to 1
or more lenders or to a trustee on behalf of the lenders.
(H)A secured loan for an eligible project made
under this subsection shall be subordinate to senior private debt issued by a
lender for the eligible project.
(I)A secured loan for an
eligible project under this subsection shall be non-recourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of the eligible
project.
(J)The Board may establish fees at a level
sufficient to cover all or a portion of the costs to the Federal Government of
making secured loans for an eligible project under this subsection.
(3)
(A)The Board shall
establish a repayment schedule and terms and conditions for each secured loan
for an eligible project under this subsection based on the projected cash flow
from revenues for the eligible project.
(B)Scheduled repayments
on a secured loan for an eligible project under this subsection shall—
(i)commence not later than 5 years after the
scheduled start of commercial operations of the eligible project; and
(ii)be completed, with interest, not later than
35 years after the scheduled date of the start of commercial operations of the
eligible project.
(C)Sources of
repayment fundsThe sources
of funds for scheduled loan repayments under this subsection shall
include—
(i)the sale of carbon or carbon
compounds;
(ii)the sale of electricity or generating
capacity;
(iii)the sale of sequestration services;
(iv)the sale or transmission of energy;
(v)revenues associated with energy efficiency
gains; or
(vi)other dedicated revenue sources.
(D)
(i)If, at any time during the 10-year period
beginning on the date of the scheduled start of commercial operation of an
eligible project, the eligible project is unable to generate sufficient
revenues to pay the scheduled loan repayments of principal or interest on the
secured loan, the Secretary may, subject to clause (iii), allow the obligor to
add unpaid principal or interest to the outstanding balance of the secured
loan.
(ii)Any payment deferred under clause (i)
shall—
(I)continue to accrue interest in accordance
with paragraph (2)(E) until fully repaid; and
(II)be scheduled to be amortized over the
number of years remaining in the term of the loan in accordance with
subparagraph (B).
(iii)
(I)Any payment deferral
under clause (i) shall be contingent on the eligible project meeting criteria
established by the Secretary.
(II)The criteria
established under subclause (I) shall include standards for reasonable
assurance of repayment.
(E)
(i)At the discretion of
the obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the project obligations and secured loan, and all
deposit requirements under the terms of any trust agreement, bond resolution,
or similar agreement securing project obligations, may be applied annually to
prepay the secured loan without penalty.
(ii)Use of
proceeds of refinancingThe
secured loan may be prepaid at any time without penalty from the proceeds of
refinancing from non-Federal funding sources.
(4)
(A)Subject to
subparagraph (B), as soon as practicable after substantial completion of an
eligible project and after notifying the obligor, the Board may sell to another
entity or reoffer into the capital markets a secured loan for the eligible
project if the Board determines that the sale or reoffering can be made on
favorable terms.
(B)In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(5)
(A)The Board may provide
a loan guarantee to a lender, in lieu of making a secured loan, under this
subsection if the Board determines that the budgetary cost of the loan
guarantee is substantially the same as that of a secured loan.
(B)
(i)Except as provided in
clause (ii), the terms of a guaranteed loan shall be consistent with the terms
for a secured loan under this subsection.
(ii)Interest rate;
prepaymentThe interest rate
on the guaranteed loan and any prepayment features shall be established by
negotiations between the obligor and the lender, with the consent of the
Board.
(g)Production
incentive payments
(1)
(A)The Secretary may
enter into an agreement with 1 or more obligors to make a secured loan for an
eligible project selected under subsection (c)(4) that employs 1 or more
advanced climate technologies or systems.
(B)Production
incentive payments
(i)Amounts loaned to an
obligor under subparagraph (A) shall be made available in the form of a series
of production incentive payments provided by the Board to the obligor during a
period of not more than 10 years, as determined by the Board, beginning after
the date on which commercial project operations start at the eligible
project.
(ii)Production incentive payments under clause
(i) shall be for an amount equal to 20 percent of the value of—
(I)the energy produced or transmitted by the
eligible project during the applicable year; or
(II)any gains in energy efficiency achieved by
the eligible project during the applicable year.
(2)
(A)A secured loan under
this subsection shall be subject to such terms and conditions, including any
covenant, representation, warranty, and requirement (including a requirement
for an audit) that the Secretary determines to be appropriate.
(B)Subject to subsection
(c)(4), the cost of carrying out an agreement entered into under paragraph
(1)(A) shall be paid by the Secretary.
(C)
(i)Subject to clause
(ii), the interest rate on a secured loan under this subsection shall be
established by the Secretary.
(ii)The interest rate on a
secured loan under this subsection shall not be less than the current average
market yield on outstanding marketable obligations of the United States of
comparable maturity, as of the date on which the agreement under paragraph
(1)(A) is executed.
(D)The secured loan—
(i)shall be payable, in whole or in part, from
dedicated revenue sources generated by the eligible project;
(ii)shall include a rate covenant, coverage
requirement, or similar security feature supporting the eligible project
obligations; and
(iii)may have a lien on revenues described in
clause (i), subject to any lien securing eligible project obligations.
(E)Rights of
third-party creditors
(i)Against Federal
GovernmentA third-party
creditor of the obligor shall not have any right against the Federal Government
with respect to any payments due to the Federal Government under the agreement
entered into under paragraph (1)(A).
(ii)An obligor may assign production incentive
payments to 1 or more lenders or to a trustee on behalf of the lenders.
(F)A secured loan under this subsection shall
be subordinate to senior private debt issued by a lender for the eligible
project.
(G)A secured loan under
this subsection shall be nonrecourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
(H)The Secretary may impose fees at a level
sufficient to cover all or part of the costs to the Federal Government of
providing production incentive payments under this subsection.
(3)
(A)Schedule,
terms, and conditionsThe
Secretary shall establish a repayment schedule and terms and conditions for
each secured loan under this subsection based on the projected cash flow from
revenues of the eligible project.
(B)Scheduled repayments
of principal or interest on a secured loan under this subsection shall—
(i)commence not later than 5 years after the
date on which the last production incentive payment is made by the Board under
paragraph (1)(B); and
(ii)be completed, with interest, not later than
10 years after the date on which the last production incentive payment is
made.
(C)Sources of
repayment fundsThe sources
of funds for scheduled loan repayments under this subsection include—
(i)the sale of electricity or generating
capacity,
(ii)the sale or transmission of energy;
(iii)revenues associated with energy efficiency
gains; or
(iv)other dedicated revenue sources.
(D)
(i)If, at any time during the 10–year period
beginning on the date on which commercial operations of the eligible project
start, the eligible project is unable to generate sufficient revenues to pay
the scheduled loan repayments of principal or interest on a secured loan under
this subsection, the Secretary may, subject to criteria established by the
Secretary (including standards for reasonable assurances of repayment), allow
the obligor to add unpaid principal and interest to the outstanding balance of
the secured loan.
(ii)Any payment deferred under clause (i)
shall—
(I)continue to accrue interest in accordance
with paragraph (2)(C) until fully repaid; and
(II)be scheduled to be amortized over the
number of years remaining in the term of the loan in accordance with
subparagraph (B).
(E)
(i)At the discretion of
the obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the eligible project obligations and the secured loan,
and all deposit requirements under the terms of any trust agreement, bond
resolution, or similar agreement securing eligible project obligations, may be
applied annually to prepay loans pursuant to an agreement entered into under
paragraph (1)(A) without penalty.
(ii)Use of
proceeds of refinancingThe
secured loan may be prepaid at any time without penalty from the proceeds of
refinancing from non-Federal funding sources.
(4)
(A)Subject to
subparagraph (B), as soon as practicable after the date on which the last
production incentive payment is made to the obligor under paragraph (1)(B) and
after notifying the obligor, the Secretary may sell to another entity or
reoffer into the capital markets a secured loan for the eligible project if the
Secretary determines that the sale or reoffering can be made on favorable
terms.
(B)In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(h)Other
credit-based financial assistance mechanisms for eligible projects
(1)
(A)The Board may enter into an agreement with
1 or more obligors to make a secured loan to the obligors for eligible projects
selected under subsection (c) that employ advanced technologies or systems, the
proceeds of which shall be used to—
(i)finance eligible project costs; or
(ii)enhance eligible project revenues.
(B)Credit-based
financial assistanceAmounts
made available as a secured loan under subparagraph (A) shall be provided by
the Board to the obligor in the form of credit-based financial assistance
mechanisms that are not otherwise specifically provided for in subsections (d)
through (g), as determined to be appropriate by the Secretary.
(2)
(A)A secured loan under
this subsection shall be subject to such terms and conditions (including any
covenants, representations, warranties, and requirements (including a
requirement for an audit)) as the Secretary determines to be
appropriate.
(B)Subject to subsection
(c)(5), the total amount of the secured loan under this subsection shall not
exceed 50 percent of the reasonably anticipated eligible project costs.
(C)The Board may
enter into a contract with the obligor to provide credit-based financial
assistance to an eligible project during the period—
(i)beginning on the date that the financial
structure of the eligible project is established; and
(ii)ending on the date of the start of
construction of the eligible project.
(D)Subject to subsection
(c)(4)(E), the cost of carrying out an agreement entered into under paragraph
(1)(A) shall be paid by the Board.
(E)
(i)Subject to clause
(ii), the interest rate on a secured loan under this subsection shall be
established by the Board.
(ii)The interest rate on a
secured loan under this subsection shall not be less than the current average
market yield on outstanding marketable obligations of the United States of
comparable maturity, as of the date of the execution of the secured loan
agreement.
(F)The secured loan—
(i)shall be payable, in whole or in part, from
dedicated revenue sources generated by the eligible project;
(ii)shall include a rate covenant, coverage
requirement, or similar security feature supporting the eligible project
obligations; and
(iii)may have a lien on revenues described in
clause (i), subject to any lien securing eligible project obligations.
(G)Rights of
third-party creditors
(i)Against Federal
GovernmentA third-party
creditor of the obligor shall not have any right against the Federal Government
with respect to any payments due to the Federal Government under this
subsection.
(ii)An obligor may assign payments made
pursuant to an agreement to provide credit-based financial assistance under
this subsection to 1 or more lenders or to a trustee on behalf of the
lenders.
(H)A secured loan under this subsection shall
be subordinate to senior private debt issued by a lender for the eligible
project.
(I)A secured loan under
this subsection shall be nonrecourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
(J)The Board may establish fees at a level
sufficient to cover all or part of the costs to the Federal Government of
providing credit-based financial assistance under this subsection.
(3)
(A)Schedule and
terms and conditionsThe
Board shall establish a repayment schedule and terms and conditions for each
secured loan under this subsection based on the projected cash flow from
eligible project revenues.
(B)Scheduled loan
repayments of principal or interest on a secured loan under this subsection
shall—
(i)commence not later than 5 years after the
date of substantial completion of the eligible project; and
(ii)be completed, with interest, not later than
35 years after the date of substantial completion of the eligible
project.
(C)Sources of
repayment fundsThe sources
of funds for scheduled loan repayments under this subsection shall
include—
(i)the sale of electricity or generating
capacity;
(ii)the sale or transmission of energy;
(iii)revenues associated with energy efficiency
gains; or
(iv)other dedicated revenue sources, such as
carbon sequestration.
(D)
(i)If, at any time during the 10–year period
beginning on the date of the start of commercial operations of the eligible
project, the eligible project is unable to generate sufficient revenues to pay
the scheduled loan repayments of principal or interest on a secured loan under
this subsection, the Secretary may, subject to criteria established by the
Secretary (including standards for reasonable assurances of repayment), allow
the obligor to add unpaid principal and interest to the outstanding balance of
the secured loan.
(ii)Any payment deferred under clause (i)
shall—
(I)continue to accrue interest in accordance
with paragraph (2)(E) until fully repaid; and
(II)be scheduled to be amortized over the
number of years remaining in the term of the loan in accordance with
subparagraph (B).
(E)
(i)At the discretion of
the obligor, any excess revenues that remain after satisfying scheduled debt
service requirements on the eligible project obligations and secured loan, and
all deposit requirements under the terms of any trust agreement, bond
resolution, or similar agreement securing eligible project obligations, may be
applied annually to prepay a secured loan under this subsection without
penalty.
(ii)Use of
proceeds of refinancingA
secured loan under this subsection may be prepaid at any time without penalty
from the proceeds of refinancing from non-Federal funding sources.
(4)
(A)Subject to
subparagraph (B), as soon as practicable after the start of commercial
operations of an eligible project and after notifying the obligor, the Board
may sell to another entity or reoffer into the capital markets a secured loan
for the eligible project under this subsection if the Secretary determines that
the sale or reoffering can be made on favorable terms.
(B)In making a sale or
reoffering under subparagraph (A), the Board may not change the original terms
and conditions of the secured loan without the written consent of the
obligor.
(i)Federal, state,
and local regulatory requirementsThe provision of Federal financial
assistance to an eligible project under this section shall not—
(1)relieve any recipient of the assistance of
any obligation to obtain any required Federal, State, or local regulatory
requirement, permit, or approval with respect to the eligible project;
(2)limit the right of any unit of Federal,
State, or local government to approve or regulate any rate of return on private
equity invested in the eligible project; or
(3)otherwise supersede any Federal, State, or
local law (including any regulation) applicable to the construction or
operation of the eligible project.
(j)Authorization
of appropriationsThere is
authorized to be appropriated to carry out this section $400,000,000 for each
of fiscal years 2006 through 2010, to remain available until expended.
(k)The authority
provided by this section terminates effective December 31,
2010.
.