1.This Act may be cited as the
No More Solyndras
Act
.
2.The Congress makes the following
findings:
(1)President Obama
took office amidst a weak economy and high unemployment, yet he remained
committed to advancing an expansive green jobs
agenda that
received substantial funding with the passage of the American Recovery and
Reinvestment Act of 2009, commonly known as the stimulus package.
(2)The stimulus package allocated $90 billion
to various green energy programs, and related appropriations provided $47
billion for loan guarantees authorized under title XVII of the Energy Policy
Act of 2005 (42
U.S.C. 16511 et seq.).
(3)Such title XVII authorized the Secretary of
Energy to issue loan guarantees for projects that avoid, reduce, or sequester
air pollutants or greenhouse gases and employ new or significantly improved
technologies compared with commercial technologies in service at the time the
guarantee is issued.
(4)Loan guarantees
issued under such title XVII were required to provide a reasonable prospect of
repayment and were expressly required to be subject to the condition that the
obligation is not subordinate to other financing.
(5)The stimulus
package expanded such title XVII by adding section 1705 to include projects
that use commercial technology for renewable energy systems, electric power
transmission systems, and leading-edge biofuels projects and by appropriating
$6,000,000,000 in funding to pay the credit subsidy costs for section 1705 loan
guarantees for projects that commence construction no later than September 30,
2011.
(6)The Department of Energy, since the
enactment of the stimulus package, has issued loan guarantees under such title
XVII for 28 projects totaling $15,100,000,000 under the section 1705 program,
and, according to the Government Accountability Office, issued conditional loan
guarantees for four projects totaling $4,400,000,000 under the section 1705
program and four projects totaling $10,600,000,000 under the section 1703
program.
(7)Three of the first five companies that
received section 1705 loan guarantees for their projects, Solyndra, Inc.,
Beacon Power Corporation, and Abound Solar, Inc., have declared
bankruptcy.
(8)The bankruptcy of
the first section 1705 loan guarantee recipient, Solyndra, Inc., could result
in a loss to taxpayers of over $530,000,000.
(9)The investigation
of the Solyndra loan guarantee by the Committee on Energy and Commerce has
demonstrated that the review in 2009 of the Solyndra application by the
Department of Energy and the Office of Management and Budget was driven by
politics and ideology and divorced from economic reality where the Department
of Energy ignored concerns about the company’s financial condition and market
for its products.
(10)Despite an express provision in such title
XVII prohibiting subordination of the United States taxpayers’ financial
interest, the Department of Energy restructured the Solyndra loan guarantee in
February 2011, resulting in the taxpayers losing priority to Solyndra’s
investors in the event of a default.
(11)The Inspector General of the Department of
the Treasury concluded that it was unclear whether the Department of Energy’s
consultation requirement with the Secretary of the Treasury on the Solyndra
loan guarantee was met; that the consultation that did occur was rushed with
the Department of the Treasury expressing that the train really has left
the station on this deal
; and that no documentation was retained as to
how the Department of the Treasury’s serious concerns with the loan guarantee
were addressed.
(12)The Government Accountability Office
concluded that the Department of Energy Loan Guarantee Program under title XVII
has treated applicants inconsistently; that the Department of Energy did not
follow its own process for reviewing applications and documenting its analysis
and decisions, increasing the likelihood of taxpayer exposure to financial risk
from a default; and that the Department of Energy’s absence of adequate
documentation made it difficult for the Department to defend its decisions on
loan guarantees as sound and fair.
(13)A memorandum
prepared for the President dated October 25, 2010, from Carol Browner, Ron
Klain, and Larry Summers, principal advisors to the President, noted the risk
presented by loan guarantee projects because most of the projects had little
skin in the game
from private investors.
(14)A January 2012
report conducted at the request of the Chief of Staff to the President
concluded that the portfolio of projects the Department of Energy included in
the loan program were higher risk investments that private capital markets do
not generally invest in.
(15)The Department of
Energy’s section 1705 program has expired but the Department of Energy has
announced that it will continue to consider applications for loan guarantees
under the section 1703 program.
(16)The Department of
Energy has approximately $34,000,000,000 in remaining lending authority to
issue new loan guarantees under the section 1703 program.
3.
(a)The Secretary of
Energy shall not issue any new loan guarantee pursuant to title XVII of the
Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.) for any
application submitted to the Department of Energy after December 31,
2011.
(b)With respect to any application submitted pursuant
to section 1703 or 1705 of the Energy Policy Act of 2005 before December 31,
2011:
(1)No guarantee shall be made until the
Secretary of the Treasury has provided to the Secretary of Energy a written
analysis of the financial terms and conditions of the proposed loan guarantee,
pursuant to section 1702(a) of the Energy Policy Act of 2005 (42 U.S.C.
16512(a)).
(2)The Secretary of
the Treasury shall transmit the written analysis required under paragraph (1)
to the Secretary of Energy not later than 30 days after receiving the proposal
from the Secretary of Energy.
(3)Before making a
guarantee under such title XVII, the Secretary of Energy shall take into
consideration the written analysis made by the Secretary of the Treasury under
paragraph (1).
(4)If the Secretary of Energy makes a
guarantee that is not consistent with the written analysis provided by the
Secretary of the Treasury under paragraph (1), not later than 30 days after
making such guarantee the Secretary of Energy shall transmit to the Committee
on Energy and Commerce and the Committee on Science, Space, and Technology of
the House of Representatives and the Committee on Energy and Natural Resources
of the Senate a written explanation of any material inconsistencies.
(c)
(1)Not later than 60
days after making a guarantee as provided in subsection (b), the Secretary of
Energy shall transmit to the Committee on Energy and Commerce and the Committee
on Science, Space, and Technology of the House of Representatives and the
Committee on Energy and Natural Resources of the Senate a report that includes
information regarding—
(A)the review and
decisionmaking process utilized by the Secretary in making the
guarantee;
(B)the terms of the
guarantee;
(C)the recipient;
and
(D)the technology and
project for which the loan guarantee will be used.
(2)Protecting
confidential business informationA report under paragraph (1)
shall provide all relevant information, but the Secretary shall take all
necessary steps to protect confidential business information with respect to
the recipient of the loan guarantee and the technology used.
4.Restructuring of
loan guaranteesWith respect
to any restructuring of the terms of a loan guarantee issued pursuant to title
XVII of the Energy Policy Act of 2005, the Secretary of Energy shall consult
with the Secretary of the Treasury regarding any restructuring of the terms and
conditions of the loan guarantee, including any deviations from the financial
terms of the loan guarantee.
5.Restating the
prohibition on subordinationSection 1702(d)(3) of the Energy Policy Act
of 2005 (42 U.S.C.
16512(d)(3)) is amended by striking is not
subordinate
and inserting , including any reorganization,
restructuring, or termination thereof, shall not at any time be
subordinate
.
6.Administrative actions
and civil penalties
(a)Any Federal official
who is responsible for the issuance of a loan guarantee under title XVII of the
Energy Policy Act of 2005 in a manner that violates the requirements of such
title or of this Act shall be—
(1)subject to appropriate administrative
discipline provided for under title 5 of the United States Code, or any other
applicable Federal law, including, when circumstances warrant, suspension from
duty without pay or removal from office; and
(2)personally liable
for a civil penalty in an amount of at least $10,000 but not more than $50,000
for each violation.
(b)For purposes of this section, the term
Federal official means—
(1)an individual serving in a position in
level I, II, III, IV, or V of the Executive Schedule, as provided in subchapter
II of chapter 53 of title 5, United
States Code; and
(2)an individual serving in a Senior Executive
Service position, as provided in subchapter II of
chapter
31 of title 5, United States Code.
7.GAO study of
Federal subsidies in energy markets
(a)The Comptroller General shall conduct a study of the
Federal subsidies in energy markets provided from fiscal year 2003 through
fiscal year 2012.
(b)The
study required under subsection (a) shall have particular focus on Federal
subsidies in energy markets provided in support of—
(1)electricity
production, transmission, and consumption;
(2)transportation
fuels and infrastructure;
(3)energy-related
research and development; and
(4)facilities that
manufacture energy-related components.
(c)Not later than 1 year after the date of
enactment of this Act, the Comptroller General shall submit to the Committee on
Energy and Commerce and the Committee on Science, Space, and Technology of the
House of Representatives and the Committee on Energy and Natural Resources of
the Senate a report that describes the results of the study conducted under
subsection (a), including an identification and quantification of—
(1)costs to the
United States Treasury;
(2)impacts on United
States energy security;
(3)impacts on
electricity prices, including any potential negative pricing impact on
wholesale electricity markets;
(4)impacts on
transportation fuel prices;
(5)impacts on private energy-related
industries not benefitting from Federal subsidies in energy markets;
(6)any Federal subsidies in energy markets
that are provided to foreign persons or corporations; and
(7)subsidies and direct financial interest any
of the 15 foreign countries with the largest gross domestic product are
providing to support energy markets in their respective countries.
(d)For
purposes of this section, the term Federal subsidies
means
Federal grants, direct loans, loan guarantees, and tax credits, and other
programmatic activities targeted at energy markets and related sectors,
relating to specific energy technologies.
Passed the House of
Representatives September 14, 2012.
Karen L. Haas,
Clerk