[Senate Report 112-72]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 152
112th Congress                                                   Report
                                 SENATE
 1st Session                                                     112-72

======================================================================



 
  ALTERNATIVE FUELED VEHICLES COMPETITIVENESS AND ENERGY SECURITY ACT

                                _______
                                

               September 6, 2011.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1001]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1001) to reduce oil consumption and 
improve energy security, and for other purposes, having 
considered the same, reports favorably thereon with an 
amendment and recommends that the bill, as amended, do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Alternative Fueled 
Vehicles Competitiveness and Energy Security Act of 2011''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:


Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Loan guarantees for alternative fuel infrastructure.
Sec. 4. Advanced technology vehicles manufacturing incentive program.
Sec. 5. Conventional fuel replacement calculation and assessment.
Sec. 6. Technical assistance and coordination.
Sec. 7. Workforce training.
Sec. 8. Reduction of engine idling and conventional fuel consumption.
Sec. 9. Electric, hydrogen, and natural gas utility and oil pipeline 
participation.
Sec. 10. HOV lane access extension.

SEC. 2. DEFINITIONS.

  In this Act:
          (1) Alternative fuel.--The term ``alternative fuel'' has the 
        meaning given the term in section 301 of the Energy Policy Act 
        of 1992 (42 U.S.C. 13211).
          (2) Alternative fueled vehicle.--The term ``alternative 
        fueled vehicle'' has the meaning given the term in section 301 
        of the Energy Policy Act of 1992 (42 U.S.C. 13211).
          (3) Community college.--The term ``community college'' has 
        the meaning given the term ``junior or community college'' in 
        section 312 of the Higher Education Act of 1965 (20 U.S.C. 
        1058).
          (4) Department.--The term ``Department'' means the Department 
        of Energy.
          (5) Nonroad vehicle.--
                  (A) In general.--The term ``nonroad vehicle'' means a 
                vehicle that is not licensed for onroad use.
                  (B) Inclusions.--The term ``nonroad vehicle'' 
                includes a vehicle described in subparagraph (A) that 
                is used principally--
                          (i) for industrial, farming, or commercial 
                        use;
                          (ii) for rail transportation;
                          (iii) at an airport; or
                          (iv) for marine purposes.
          (6) Secretary.--The term ``Secretary'' means the Secretary of 
        Energy.

SEC. 3. LOAN GUARANTEES FOR ALTERNATIVE FUEL INFRASTRUCTURE.

  Section 1703(a) of the Energy Policy Act of 2005 (42 U.S.C. 16513(a)) 
is amended by adding at the end the following:
          ``(11) Infrastructure for provision and distribution of 
        alternative fuels.''.

SEC. 4. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING INCENTIVE PROGRAM.

  Section 136 of the Energy Independence and Security Act of 2007 (42 
U.S.C. 17013) is amended--
          (1) in subsection (a)--
                  (A) in paragraph (1)--
                          (i) by redesignating subparagraphs (A) 
                        through (C) as clauses (i) through (iii), 
                        respectively, and indenting appropriately;
                          (ii) in the matter preceding clause (i) (as 
                        redesignated by clause (i)), by striking 
                        ``means an ultra efficient vehicle or a light 
                        duty vehicle that meets--'' and inserting 
                        ``means--
                  ``(A) an ultra efficient vehicle or a light duty 
                vehicle that meets--'';
                          (iii) in clause (iii) (as redesignated by 
                        clause (i)), by striking the period at the end 
                        and inserting a semicolon; and
                          (iv) by adding at the end the following:
                  ``(B) a vehicle (such as a medium-duty or heavy-duty 
                work truck, bus, or rail transit vehicle) that--
                          ``(i) is used on a public street, road, 
                        highway, or transitway;
                          ``(ii) meets each applicable emission 
                        standard that is established as of the date of 
                        the application; and
                          ``(iii) will reduce consumption of 
                        conventional motor fuel by 25 percent or more, 
                        as compared to existing surface transportation 
                        technologies that perform a similar function, 
                        unless the Secretary determines that--
                                  ``(I) the percentage is not 
                                achievable for a vehicle type or class; 
                                and
                                  ``(II) an alternative percentage for 
                                that vehicle type or class will result 
                                in substantial reductions in motor fuel 
                                consumption within the United 
                                States.'';
                  (B) in paragraph (3)(B)--
                          (i) by striking ``equipment and'' and 
                        inserting ``equipment,''; and
                          (ii) by inserting ``, and manufacturing 
                        process equipment'' after ``suppliers''; and
                  (C) by striking paragraph (4) and inserting the 
                following:
          ``(4) Qualifying components.--The term `qualifying 
        components' means components, systems, or groups of subsystems 
        that the Secretary determines--
                  ``(A) to be designed to improve fuel economy or 
                otherwise substantially reduce consumption of 
                conventional motor fuel; or
                  ``(B) to contribute measurably to the overall 
                improved fuel use of an advanced technology vehicle, 
                including idle reduction technologies.'';
          (2) in subsection (b), in the matter preceding paragraph (1), 
        by striking ``to automobile'' and inserting ``to advanced 
        technology vehicle'';
          (3) in subsection (d)(1), in the first sentence, by striking 
        ``a total of not more than $25,000,000,000 in'';
          (4) in subsection (h)--
                  (A) in the subsection heading, by striking 
                ``Automobile'' and inserting ``Advanced Technology 
                Vehicle''; and
                  (B) in paragraph (1)(B), by striking ``automobiles'' 
                each place it appears and inserting ``advanced 
                technology vehicles''; and
          (5) in subsection (i), by striking ``2012'' and inserting 
        ``2016''.

SEC. 5. CONVENTIONAL FUEL REPLACEMENT CALCULATION AND ASSESSMENT.

  (a) Methodology.--Not later than 180 days after the date of enactment 
of this Act, the Secretary shall, by rule, develop a methodology for 
calculating the equivalent volumes of conventional fuel displaced by 
use of each alternative fuel to assess the effectiveness of alternative 
fuel and alternative fueled vehicles in reducing oil imports.
  (b) National Assessment.--Not later than 3 years after the date of 
enactment of this Act, the Secretary shall--
          (1) conduct a national assessment (using the methodology 
        developed under subsection (a)) of the effectiveness of 
        alternative fuel and alternative fueled vehicles in reducing 
        oil imports into the United States, including as assessment 
        of--
                  (A) market penetration of alternative fuel and 
                alternative fueled vehicles in the United States;
                  (B) successes and barriers to deployment identified 
                by the programs established under this Act; and
                  (C) the maximum feasible deployment of alternative 
                fuel and alternative fueled vehicles by 2020 and 2030; 
                and
          (2) report to Congress the results of the assessment.

SEC. 6. TECHNICAL ASSISTANCE AND COORDINATION.

  (a) Technical Assistance to State, Local, and Tribal Governments.--
          (1) In general.--In carrying out this title, the Secretary 
        shall provide, at the request of the Governor, mayor, county 
        executive, public utility commissioner, or other appropriate 
        official or designee, technical assistance to State, local, and 
        tribal governments or to a public-private partnership described 
        in paragraph (2) to assist with the deployment of alternative 
        fuel and alternative fueled vehicles and infrastructure.
          (2) Public-private partnership.--Technical assistance under 
        this section may be awarded to a public-private partnership, 
        comprised of State, local or tribal governments and 
        nongovernmental entities, including--
                  (A) electric or natural gas utilities or other 
                alternative fuel distributors;
                  (B) vehicle manufacturers;
                  (C) alternative fueled vehicle or alternative fuel 
                technology providers;
                  (D) vehicle fleet owners;
                  (E) transportation and freight service providers; or
                  (F) other appropriate non-Federal entities, as 
                determined by the Secretary.
          (3) Assistance.--The technical assistance described in 
        paragraph (1) may include--
                  (A) coordination in the selection, location, and 
                timing of alternative fuel recharging and refueling 
                equipment and distribution infrastructure, including 
                the identification of transportation corridors and 
                specific alternative fuels that would be made 
                available;
                  (B) development of protocols and communication 
                standards that facilitate vehicle refueling and 
                recharging into electric, natural gas, and other 
                alternative fuel distribution systems;
                  (C) development of codes and standards for the 
                installation of alternative fuel distribution and 
                recharging and refueling equipment;
                  (D) education and outreach for the deployment of 
                alternative fuel and alternative fueled vehicles; and
                  (E) utility rate design and integration of 
                alternative fueled vehicles into electric and natural 
                gas utility distribution systems.
  (b) Cost Sharing.--Cost sharing for assistance awarded under this 
section shall be consistent with section 988 of the Energy Policy Act 
of 2005 (42 U.S.C. 16352).
  (c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $50,000,000 for each of fiscal 
years 2012 through 2016.

SEC. 7. WORKFORCE TRAINING.

  (a) In General.--The Secretary, in consultation with the Secretary of 
Labor, shall award grants to community colleges, other institutions of 
higher education, and other qualified training and education 
institutions for the establishment or expansion of programs to provide 
training and education for vocational workforce development for--
          (1) the manufacture and maintenance of alternative fueled 
        vehicles; and
          (2) the manufacture, installation, support, and inspection of 
        alternative fuel recharging, refueling, and distribution 
        infrastructure.
  (b) Purpose.--Training funded under this section shall be intended to 
ensure that the workforce has the necessary skills needed to 
manufacture, install, and maintain alternative fuel infrastructure and 
alternative fueled vehicles.
  (c) Scope.--Training funded under this section shall include training 
for--
          (1) electricians, plumbers, pipefitters, and other trades and 
        contractors who will be installing, maintaining, or providing 
        safety support for alternative fuel recharging, refueling, and 
        distribution infrastructure;
          (2) building code inspection officials;
          (3) vehicle, engine, and powertrain dealers and mechanics; 
        and
          (4) others positions as the Secretary determines necessary to 
        successfully deploy alternative fuels and vehicles.
  (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $50,000,000 for each of fiscal 
years 2012 through 2016.

SEC. 8. REDUCTION OF ENGINE IDLING AND CONVENTIONAL FUEL CONSUMPTION.

  (a) Definition of Idle Reduction Technology.--Section 756(a)(5) of 
the Energy Policy Act of 2005 (42 U.S.C. 16104(a)(5)) is amended--
          (1) in subparagraph (A), by striking ``and'' after the 
        semicolon at the end;
          (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
          (3) by adding at the end the following:
                  ``(C) uses an alternative fuel to reduce consumption 
                of conventional fuel and environmental emissions.''.
  (b) Funding.--Section 756(b)(4)(B) of the Energy Policy Act of 2005 
(42 U.S.C. 16104(b)(4)(B)) is amended in clauses (i) and (ii) by 
striking ``fiscal year 2008'' each place it appears and inserting 
``each of fiscal years 2008 through 2016''.

SEC. 9. ELECTRIC, HYDROGEN, AND NATURAL GAS UTILITY AND OIL PIPELINE 
                    PARTICIPATION.

  (a) In General.--The Secretary shall identify barriers and remedies 
in existing electric and natural gas and oil pipeline transmission and 
distribution systems to the distribution of alternative fuels and the 
deployment of alternative fuel recharging and refueling capability, at 
economically competitive costs of alternative fuel for consumers, 
including--
          (1) model regulatory rate design and billing for recharging 
        and refueling alternative fueled vehicles;
          (2) electric grid load management and applications that will 
        allow batteries in plug-in electric drive vehicles to be used 
        for grid storage, ancillary services provision, and backup 
        power;
          (3) integration of plug-in electric drive vehicles with smart 
        grid technology, including protocols and standards, necessary 
        equipment, and information technology systems;
          (4) technical and economic barriers to transshipment of 
        biofuels by oil pipelines, or distribution of hydrogen; and
          (5) any other barriers to installing sufficient and 
        appropriate alternative fuel recharging and refueling 
        infrastructure.
  (b) Consultation.--The Secretary shall carry out this section in 
consultation with--
          (1) the Federal Energy Regulatory Commission;
          (2) State public utility commissions;
          (3) State consumer advocates;
          (4) electric and natural gas utility and transmission owners 
        and operators;
          (5) oil pipeline owners and operators;
          (6) hydrogen suppliers; and
          (7) other affected entities.
  (c) Report.--Not later than 2 years after the date of enactment of 
this Act, the Secretary shall submit to Congress a report describing 
actions taken to carry out this section.

SEC. 10. HOV LANE ACCESS EXTENSION.

  Section 166(b)(5) of title 23, United States Code, is amended--
          (1) in subparagraph (A), by striking ``Before September 30, 
        2009, the State'' and inserting ``The State''; and
          (2) in subparagraph (B), by striking ``Before September 30, 
        2009, the State'' and inserting ``The State''.

                         Purpose of the Measure

    The purpose of S. 1001 is to build upon existing programs 
to promote alternative fuel vehicles, including support of 
infrastructure and other mechanisms to enable their widespread 
deployment.

                          Background and Need

    In previous energy laws, such as the Energy Independence 
and Security Act of 2007, Congress has set out incentive 
programs for the deployment of alternative fuels, alternative 
fueling infrastructure, and vehicles that use alternative fuels 
or otherwise reduce the use of petroleum-derived fuels. 
Although past measures have generated progress in all of these 
areas, there remain structural impediments, both within the 
federal programs and in local government and the private 
sector, that may be hindering the speed of deployment. S. 1001 
makes adjustments to the federal framework to try and address 
some of those barriers and make existing programs more 
effective.

                          Legislative History

    Senator Wyden introduced S. 1001, with Senator Stabenow as 
an original cosponsor, on May 16, 2011. The full Committee held 
a hearing on the bill on June 9, 2011.
    The Committee marked up the bill in open business meeting 
on July 14, 2011, and ordered S. 1001 favorably reported with 
an amendment in the nature of a substitute.

            Committee Recommendation and Tabulation of Votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on July 14, by a majority vote of a 
quorum present, recommends that the Senate pass S. 1001, if 
amended as described herein.
    The rollcall vote on reporting the measure was 12 yeas, 10 
nays as follows:
        YEAS                          NAYS
Mr. Bingaman                        Ms. Murkowski
Mr. Wyden                           Mr. Barrasso
Mr. Johnson*                        Mr. Risch*
Ms. Landrieu                        Mr. Lee*
Ms. Cantwell                        Mr. Paul*
Mr. Sanders                         Mr. Coats
Ms. Stabenow*                       Mr. Portman
Mr. Udall                           Mr. Hoeven
Mrs. Shaheen                        Mr. Heller
Mr. Franken*                        Mr. Corker*
Mr. Manchin
Mr. Coons*
    *Indicates vote by proxy.

                          Committee Amendments

    The Committee adopted an amendment in the nature of a 
substitute, which: (1) replaced tax code definitions with 
definitions from the Energy Policy Act of 1992 (42 U.S.C. 
13211); (2) removed ``advanced biofuels'' from the category of 
projects proposed to be made eligible for loan guarantees under 
section 1703 of the Energy Policy Act of 2005; (3) added 
distribution of hydrogen to the matters to be studied under 
section 9; (4) deleted the research and development section 
(section 109 of S. 1001 as introduced), as it was deemed to be 
substantially redundant to the provisions in S. 734, previously 
acted upon by the Committee; and (5) removed the title related 
to the Strategic Petroleum Reserve.

                      Section-by-Section Analysis

    Section 1 contains the short title.
    Section 2 defines terms used in the bill.
    Section 3 adds infrastructure for provision and 
distribution of alternative fuels as a new category of project 
that may receive loan guarantees under title 17 of the Energy 
Policy Act of 2005.
    Section 4 expands the Department of Energy's existing 
Advanced Technology Vehicle Manufacturing (ATVM) loan program 
so that efficient medium and heavy trucks, buses, and rail 
transit vehicles are eligible (currently, only light duty 
vehicles are eligible) and allows the Secretary of Energy to 
reduce the efficiency gains required for each selected project 
below 25 percent upon a determination it is not achievable. The 
section further strikes the existing $25 billion cap on loan 
volume, adds production of alternative fuel vehicles as another 
category of manufacturing eligible for loans, and clarifies the 
availability of loans to component manufacturers. Finally, it 
extends the appropriations authorization by 4 years (from 2012 
to 2016).
    Section 5 directs the Secretary to develop a methodology to 
quantify the amount of oil displaced by alternative fuels, and 
within 3 years report to Congress with an assessment of 
alternative fuel deployment, deployment potential, and barriers 
to market entry.
    Section 6 directs the Secretary to provide technical 
assistance to state, local, tribal governments, and public-
private partnerships with those governments to assist with 
deployment of alternative fuels, vehicles, and infrastructure, 
with costs shared. It also authorizes $50 million per year for 
5 years for this activity.
    Section 7 directs the Secretary, in consultation with the 
Secretary of Labor, to provide grants for workforce training to 
community colleges and other institutions of higher education 
to develop training programs for manufacturing, maintaining, 
and installing alternative fuel vehicles and refueling 
infrastructure. It also authorizes $50 million per year for 5 
years for this activity.
    Section 8 addresses an alternative fuel to reduce 
consumption of conventional fuel and environmental emissions to 
definition of idle reduction technology in section 756(a)(5) of 
the Energy Policy Act of 2005. It also reauthorizes the program 
at the 2008 level ($45 million and $20 million for clauses (i) 
and (ii), respectively) through 2016.
    Section 9 directs the Secretary to work with the Federal 
Energy Regulatory Commission, utilities, state utility 
commissions, and other stakeholders to identify barriers to 
alternative fuel deployment in existing electric, hydrogen, 
natural gas, and oil transmission and distribution systems, and 
report back to Congress within 2 years.
    Section 10 extends state authority to allow energy-
efficient vehicles in HOV lanes by deleting the existing 2009 
deadline for state action.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

S. 1001--Alternative Fueled Vehicles Competitiveness and Energy 
        Security Act of 2011

    Summary: S. 1001 would authorize appropriations for a 
variety of activities aimed at promoting the development and 
deployment of alternative fueled vehicles. Current law defines 
such vehicles as those that consume fuel other than petroleum 
or that use technologies that consume significantly less 
petroleum than conventional vehicles. The bill also would 
expand eligibility requirements for two existing loan programs 
administered by the Department of Energy (DOE) to include 
projects related to such vehicles.
    CBO estimates that implementing S. 1001 would have a 
discretionary cost of $595 million over the 2012-2016 period, 
assuming appropriation of the necessary amounts. We also 
estimate that expanding DOE's loan programs would increase 
direct spending by $350 million over the next 10 years; 
therefore, pay-as-you-go procedures apply. Enacting S. 1001 
would not affect revenues.
    S. 1001 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1001 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy) and 300 (natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level...........................      167      188      188      188      189       920
Estimated Outlays.......................................       48      108      131      147      161       595
 
                                           CHANGES IN DIRECT SPENDING1
Estimated Budget Authority..............................        0        0        0        0        0         0
Estimated Outlays.......................................       30       50      100      100       40      320
----------------------------------------------------------------------------------------------------------------
1CBO estimates that S. 1001 would increase direct spending by $350 million over the 2012-2021 period.

    Basis of estimate: CBO estimates that implementing S. 1001 
would have a discretionary cost of $595 million over the 2012-
2016 period. We also estimate that the bill would increase 
direct spending by $350 million over the 2012-2021 period. For 
this estimate, CBO assumes that S. 1001 will be enacted near 
the start of fiscal year 2012 and that necessary funds will be 
provided each year.

Spending subject to appropriation

    S. 1001 would specifically authorize appropriations 
totaling $825 million over the 2012-2016 period for DOE and the 
Environmental Protection Agency (EPA) to carry out a variety of 
activities to improve the energy efficiency of vehicles and 
promote the deployment of alternative fueled vehicles and 
infrastructure. That specified amount includes:
         $325 million for EPA to support the deployment 
        of technologies to reduce energy consumed by heavy-duty 
        vehicles and locomotives when idling;
         $250 million for DOE to provide technical 
        assistance to state, local, and tribal governments to 
        develop infrastructure, systems, and education programs 
        related to facilities to recharge and refuel 
        alternative fueled vehicles; and,
         $250 million for grants to institutions of 
        higher learning and vocational training to expand 
        programs to train individuals to work in industries 
        related to alternative fueled vehicles.
    In addition, CBO estimates that implementing other 
provisions of S. 1001 would require appropriations totaling $95 
million over the 2012-2016 period. That amount includes $90 
million for DOE to continue to administer the Advanced 
Technology Vehicle Manufacturing (ATVM) Loan Program and $5 
million to complete various studies and reports. In total, 
assuming the appropriation of amounts specified and estimated 
to be necessary, CBO estimates that implementing S. 1001 would 
cost $595 million over the 2012-2016 period, with additional 
outlays occurring in later years. That estimate is based on 
historical spending patterns for activities similar to those 
authorized under S. 1001.

Direct spending

    S. 1001 would broaden eligibility criteria for two of DOE's 
existing credit programs--the ATVM program, which provides 
direct loans to support the cost of retrofitting facilities 
intended to produce energy-efficient light-duty vehicles and 
components for such vehicles, and the program established under 
title 17 of the Energy Policy Act of 2005, which provides loan 
guarantees for projects that involve certain types of 
innovative energy technologies. Broadly speaking, S. 1001 would 
expand both programs to allow DOE to increase credit support 
for projects related to alternative fueled vehicles and 
infrastructure. In particular, changes to the ATVM program 
would make it easier for manufacturers of vehicle components to 
qualify for loans and permit DOE to make loans to manufacturers 
of energy-efficient medium- and heavy-duty vehicles and transit 
vehicles. S. 1001 would add infrastructure to provide and 
distribute alternative fuels to the list of projects eligible 
for loan guarantees under the title 17 program.
    Under current law, DOE has budget authority and specified 
limits on loan volumes for both programs that CBO estimates 
will not be fully utilized over the next 10 years. As a result, 
we expect that executing new loans or loan guarantees under S. 
1001 would require no new budget authority or increased loan 
limitations over the next several years, and that DOE could 
meet the demand for such credit support within its existing 
budget authority and loan authority. Because increasing the 
amount of spending from that existing authority would require 
no further Congressional action, enacting S. 1001 would result 
in an increase in direct spending.
    CBO cannot predict the specific types of projects likely to 
proceed under S. 1001, but based on information from the Energy 
Information Administration and industry sources about the 
anticipated timeframe involved in deploying alternative fueled 
vehicles and related infrastructure, we expect that DOE would 
use its existing authority to provide credit support to a few 
projects over the next 10 years. Taken as a whole, CBO 
estimates that enacting S. 1001 would increase direct spending 
by $350 million for those activities over the 2012-2021 
period--that amount is equivalent to roughly 10 percent of the 
amount that DOE has obligated to date for loans to support the 
deployment of advanced technology vehicles.
    The above estimate is driven primarily by increased 
spending of existing balances for the ATVM program. The 
Congress appropriated $7.5 billion for that program in 2009. 
According to DOE, as of August 2011, the agency has obligated 
roughly $3.5 billion to support six loans totaling $9.1 billion 
at an average subsidy rate of about 38 percent. Under current 
law, CBO expects that a significant portion of DOE's remaining 
$4 billion in unobligated balances will not be spent over the 
next 10 years. As a result, CBO estimates that S. 1001 would 
increase direct spending of those balances. In particular, CBO 
expects that easing eligibility requirements for manufacturers 
of vehicle components would permit DOE to proceed with pending 
applications for loans to support projects that would not 
otherwise qualify under current law. In addition, CBO expects 
that at least some loans would be made to manufacturers of 
energy-efficient medium- and heavy-duty vehicles and transit 
vehicles.
    Finally, CBO expects that any added spending for title 17 
loan guarantees to support investments in recharging and 
refueling infrastructure for advanced vehicles would most 
likely be issued toward the end of the 2012-2021 period and 
would be largely offset by fees paid by borrowers, resulting in 
an insignificant net budgetary impact.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table. 
Those changes result from provisions of S. 1001 that would 
expand eligibility requirements for two existing loan programs 
and increase DOE's use of previously enacted authority to issue 
direct loans and guarantees for projects related to alternative 
fueled vehicles and infrastructure.

     CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1001 AS ORDERED REPORTED BY THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES ON JULY 14, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By fiscal year, in millions of dollars--
                                                             -------------------------------------------------------------------------------------------
                                                               2012   2013   2014   2015   2016   2017   2018   2019   2020   2021  2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact..............................     30     50    100    100     40     10      5      5      5      5       320        350
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 1001 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would authorize grants to 
institutions of higher education and technical assistance to 
state, local, and tribal governments for activities related to 
the deployment of alternative-fuel vehicles. Any costs to those 
entities would be incurred voluntarily as a condition of 
federal assistance.
    Estimate prepared by: Federal costs: Megan Carroll and 
Kathleen Gramp; Impact on State, local, and Tribal Governments: 
Ryan Miller; Impact on the private sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1001.
    The bill is not a regulatory measure in the sense of 
imposing Government established standards or significant 
economic responsibilities on private individuals and 
businesses, but rather providing direct loans, loan guarantees, 
and grants to private industry that may be voluntarily applied 
for.
    No personal information would be collected in administering 
programs authorized under the bill. Therefore, there would be 
no impact on personal privacy.
    While an applicant to the loan, loan guarantee, and grant 
programs authorized in the measure will have to submit 
paperwork through the application process, little if any 
additional paperwork would be required of any entity or person 
that is not an applicant to a program.

                   Congressionally Directed Spending

    The bill, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The testimony provided by the Department of Energy on June 
9, 2011 follows:

  Statement of Kathleen Hogan, Deputy Assistant Secretary for Energy 
     Efficiency, Office of Energy Efficiency and Renewable Energy, 
                          Department of Energy

    Chairman Bingaman, Ranking Member Murkowski and Members of 
the Committee, thank you for the opportunity to discuss the 
Department of Energy's (DOE's) energy efficiency and Advanced 
Vehicles Technology Programs. The Administration is still 
reviewing the Reducing Federal Energy Dollars Act of 2011 (S. 
963), the Energy Savings and Industrial Competitiveness Act of 
2011 (S. 1000), and the Alternative Fuel Vehicles 
Competitiveness and Energy Security Act of 2011 (S. 1001). 
While the Administration does not take a position at this time, 
my statement will provide you with information on work DOE is 
already doing to create jobs, build a new clean energy economy, 
and help save consumers and businesses money through improved 
energy efficiency.
    At EERE, we work to remove the barriers to the rapid 
conversion of innovative research into commercial products, 
manufacturing, and jobs. And we work with other federal, state, 
and local governments to speed the adoption of these American 
innovations. The new businesses in clean energy production, 
installation, and operation are playing a key role driving 
economic growth and job creation.
    The market for clean energy technology is growing quickly 
and many countries have mounted aggressive national efforts to 
capture market share. China, for example, has moved quickly to 
dominate the development of next generation clean energy 
products through low-cost production and investments in 
research infrastructure. As the President said, ``this is our 
generation's Sputnik moment.'' To show his clear commitment to 
our future, he has asked for a significant increase in funding 
for energy efficiency and renewable energy in the FY12 budget 
proposal, even in a budget which moves overall domestic 
discretionary spending to the lowest levels in a generation.
    To win the future, we have to be a nation that makes, 
creates, and innovates. Across the country, we are seeing 
strong evidence that the out-build and out-innovate pillars the 
Administration has put forward are paying off. In October of 
last year, for example, manufacturing posted its first twelve-
month gain in more than ten years, and has added close to 
250,000 jobs since the December 2009 low. The Administration 
continues to be optimistic about the prospects for 
manufacturing in the recovery.
    Manufacturing remains one of the most globally competitive 
economic sectors we have. It also is one of the most visible 
economic sectors we have, with middle-class Americans clearly 
understanding the impact that strengthened manufacturing has on 
their lives and their communities.
    The challenges we face mean that we need to move with 
unprecedented speed and scale. Success is measured by private 
innovation and investment but can begin with well-crafted 
federal programs that will help achieve a number of important 
goals:
     A vigorous and profitable residential and 
commercial building retrofit industry, cost-effectively saving 
30-50 percent of the energy used in existing buildings;
     Solar energy, offshore wind energy, and geothermal 
plants fully competitive with conventional sources of 
electricity;
     Fuels that can be drop-in replacements for 
gasoline, diesel fuel, or jet fuel priced competitively with 
products produced from petroleum;
     Large fleets of electric and hybrid cars supported 
by a network of charging stations to support them; and
     Trucks with over 50% improvement in fuel economy.
    Small federal investments have led to major breakthroughs 
like the invention of the internet and Global Positioning 
Systems or ``GPS'' found in most cellular devices today. 
Similarly, EERE investments past, present, and future are 
critical to achieving these goals. As one example, in 2009, the 
U.S. had only two, relatively small, factories manufacturing 
advanced vehicle batteries, and produced less than two percent 
of the world's hybrid vehicle batteries.\1\ But over the next 
few years, thanks to investments from the American Recovery and 
Reinvestment Act of 2009 (Recovery Act) in battery and electric 
drive component manufacturing, and electric drive demonstration 
and infrastructure, the U.S. will be able to produce enough 
batteries and components to support 500,000 plug-in and 
electric vehicles per year. High volume manufacturing, coupled 
with battery technology advances, design optimization, and 
material cost reductions, could lead to a drop in battery costs 
of 50 percent by 2013 compared to 2009, which will lower the 
cost of electric vehicles, making them accessible to more 
consumers.
---------------------------------------------------------------------------
    \1\http://www.whitehouse.gov/sites/default/files/
blueprint_secure_energy_future.pdf.
---------------------------------------------------------------------------
    These kinds of breakthroughs are especially important in 
the transportation sector, which alone accounts for 
approximately two-thirds of the United States' oil consumption 
and contributes to one-third of the Nation's greenhouse gas 
(GHG) emissions.\2\ After housing, transportation is the second 
biggest monthly expense for most American families.\3\ As the 
President said in his recent energy speech, ``In an economy 
that relies so heavily on oil, rising prices at the pump affect 
everybody.'' Emphasizing that ``there are no quick fixes,'' the 
President outlined a portfolio of actions which, taken 
together, could cut U.S. oil imports by a third by 2025.
---------------------------------------------------------------------------
    \2\http://www1.eere.energy.gov/vehiclesandfuels/pdfs/
vehicles_fs.pdf.
    \3\http://www.bels.gov/news.release/cesan.nr0.htm.
---------------------------------------------------------------------------
    The draft legislation being addressed today focuses on 
three areas:
           Clean energy in the Federal sector
           Energy efficiency in the industrial sector 
        and building codes
           Alternative fuel vehicles
    General comments are provided on each of these three areas, 
but the Department has no comments on the specific content of 
the legislation, as these bills are currently under review by 
the Administration.


                   clean energy in the federal sector


    Constructing and operating Federal facilities in a 
sustainable manner has numerous well-documented benefits, 
including:
           Saving taxpayer dollars through optimized 
        life-cycle cost-effective actions;
           Enhancing employee productivity through the 
        provision of safe, healthy and environmentally 
        appealing workplaces;
           Reducing environmental impacts through 
        decreased energy, water, and materials use; and
           Moving the overall market conditions toward 
        higher performance, through the Federal demand for 
        sustainable facilities.
    These benefits are sizable, in part, due to the size of the 
Federal Government. The Federal Government is estimated to use 
about 1.6 percent of the Nation's total energy, occupy nearly 
500,000 buildings, operate more than 600,000 vehicles, and 
purchase more than $500 billion per year in goods and services.
    The Federal government is making substantial progress 
toward its sustainability goals mandated in EPAct 2005, EISA 
2007, and Executive Order 13514, signed by President Obama in 
October, 2009. For example, in FY 2010, the Federal Government 
reported a 15 percent decrease in site-delivered Btu per square 
foot compared with baseline year 2003. This meets the EISA 
statutory reduction goal for FY 2010.
    FY 2010 was also the highest level year to date for the use 
of Energy Savings Performance Contracting with these contacts 
totaling more than $560 million in investment in Federal 
facilities. This type of performance-based contracting is 
extremely important to meeting the Federal sustainability goals 
due to the pressures on Federal appropriations and increasing 
goals for reduced energy intensity, energy savings goals that 
increase to 30% by 2015.
    In FY 2010, Federal agencies also reported purchasing or 
producing renewable electric energy representing 5.2 percent of 
the Federal Government's electricity use, achieving the EPAct 
2005 goal of five percent. This more than doubled renewable 
energy use as a percentage of total facility electricity use 
since 2003. The five percent goal remains in place until FY 
2013, when it will increase to 7.5 percent under current 
statute. Not counted in this metric is the significant amount 
of non-electric renewable energy produced and purchased by the 
Government that displaces the need for additional electric 
generation. This includes thermal energy, such as solar hot 
water and space heating, geothermal energy, steam from biomass, 
and landfill methane.
    DOE is also making progress to improve the transparency of 
Federal building energy efficiency, as required under EISA 
2007, Section 432. DOE expects to have a web-based system that 
provides information on the energy efficiency of metered 
buildings and on the cost-effective improvement opportunities 
that exist in Federal facilities publicly available by Fall 
2011.


     energy efficiency in the industrial sector and building codes


    The Energy Savings and Industrial Competitiveness Act (S. 
1000) outlines new provisions for building codes, appliance 
standards, and industrial energy efficiency among other areas.
    Energy-conserving appliance standards are one of the 
significant steps the Administration has taken to save energy 
in homes and businesses nationwide, and pave the way toward a 
clean energy future for our country.\4\ Since January 2009, the 
Department of Energy has finalized new efficiency standards for 
more than twenty household and commercial products, which are 
projected to cumulatively save consumers between $250 billion 
and $300 billion over the next 20 years.\5\ These standards can 
provide an immediate and economically responsible way to 
increase the nation's energy security while protecting the 
environment. Improvements in energy efficiency can be made 
today to yield significant near-term and long-term economic and 
environmental benefits for the nation.\6\
---------------------------------------------------------------------------
    \4\http://www.whitehouse.gov/issues/energy-and-environment.
    \5\http://www.energy.gov/news/9582.htm
    \6\See, for example: McKinsey and Company (2007). Reducing U.S. 
Greenhouse Gas Emissions: How Much at What Cost? (http://www.epa.gov/
cleanenergy/documents/suca/cost-effectiveness.pdf) and Lazard 
Associates. Feb. 2009. Levelized Cost of Energy Analysis Version 3.0.
---------------------------------------------------------------------------
    In 2007, Congress recognized the importance of negotiated 
consensus standards, amending the Energy Policy and 
Conservation Act (EPCA) to allow for an expedited rulemaking 
process in the event a representative group of stakeholders 
could reach agreement. Several DOE rules currently under 
development and review overlap with the proposed consensus 
standards. Although the agency cannot presuppose the level of 
the final standards, it is seriously considering these 
consensus recommendations. The agency's preliminary analyses 
accompanying the proposed rules for these standards suggest 
that the potential net benefits from these recommended levels 
could yield tens of billions of dollars in fuel savings and 
lower greenhouse gas emissions.
    U.S. industry accounts for about one-third of U.S. energy 
use while contributing to about 12% of U.S. Gross Domestic 
Product.\7\ Improving industrial energy efficiency will result 
in saving money and enhancing U.S. competitiveness in the 
world's manufacturing sector. By partnering with the private 
sector, DOE has already managed to save more than 9.3 
quadrillion Btu of energy and reduced carbon emissions by over 
206 million metric tons.
---------------------------------------------------------------------------
    \7\http://www1.eere.energy.gov/industry/about/pdfs/
itp_program_fact_sheet.pdf.
---------------------------------------------------------------------------
    Supply chain energy efforts can make an important 
contribution to overall industrial efficiency and the 
competitive position of domestic suppliers. Analysis suggests 
that a large part of the carbon footprint for many consumer 
products can be attributed to the supply chain--from raw 
materials, transport, and packaging to the energy consumed in 
manufacturing processes--on the order of 40 to 60 percent. DOE 
and the Environmental Protection Agency (EPA) both have 
existing initiatives that address supply chain efficiency, such 
as Save Energy Now' at DOE and ENERGY STAR. For 
example, through its national Save Energy Now' 
initiative, DOE encourages manufacturing companies to engage 
their supply chains in energy and carbon management, while at 
EPA, ENERGY STAR has engaged whole industries to support their 
customers and supply chains in building effective energy 
management programs. Specifically, DOE and EPA develop 
processes and resources to assist companies in promoting energy 
management to their industrial suppliers and customers. Save 
Energy Now' LEADER Companies make a voluntary 
commitment to reduce their energy intensity by 25 percent in 10 
years. Many of these companies are interested in improving the 
efficiency of their supply chains as well. ENERGY STAR boasts a 
growing group of corporations that have used ENERGY STAR to 
influence key suppliers to effectively manage energy.
    DOE is also working with Superior Energy Performance (SEP), 
a voluntary certification program helping to provide industrial 
facilities with a roadmap for achieving continual improvement 
in energy efficiency while maintaining competitiveness. A 
central element of SEP is implementation of the International 
Organization for Standardization (ISO) 50001 energy management 
standard, with additional requirements to achieve and document 
energy intensity improvements. DOE is working through SEP to 
bring ISO 50001 to the U.S. Upon its publication this American 
National Standards Institute-accredited program is anticipated 
to provide companies with a framework for fostering energy 
efficiency at the plant level and a consistent methodology for 
measuring and validating energy efficiency and intensity 
improvements. This new framework has the opportunity to be an 
important tool to integrate into supply chain efforts.


                       alternative fuel vehicles


    Few technologies hold greater promise for reducing our 
dependence on oil than alternative fuel vehicles. The 
Administration has set a goal to have the United States become 
the first country with a million electric vehicles on the road. 
Meeting this goal will help the United States become a leader 
in the clean energy economy, while capitalizing on the 
ingenuity of American industry. Manufacturing products needed 
for the clean energy economy will generate long term economic 
strength in the U.S., creating jobs across the country while 
reducing air pollution and greenhouse gas emissions. The 
Administration supports the goal of utilizing alternative fuel 
technologies to break our dependence on oil and to move toward 
a clean energy future. The DOE looks forward to working with 
Congress to achieve these objectives.
    DOE's Vehicle Technologies Program is helping the Nation 
lead the way in alternative fuel vehicle innovation. DOE has 
helped reduce the cost of PHEV Lithium Ion batteries to $650 
per kilowatt-hour, a 35% reduction from the 2008 baseline of 
$1,000 per kilowatt-hour. This is making oil alternatives 
competitive in general while specifically increasing U.S. 
competitiveness in the global market.


                               conclusion


    In conclusion, the Department of Energy thanks the 
Subcommittee for the opportunity to comment on these proposed 
initiatives. We look forward to working with Congress to 
develop strong, effective clean energy policy to ensure U.S. 
leadership on these global issues and in the clean energy 
economy. I am happy to answer any questions Committee Members 
may have.
                              ----------                              


 Statement of Jonathan Silver, Executive Director of the Loan Programs 
                      Office, Department of Energy


                              introduction


    Chairman Bingaman, Ranking Member Murkowski, and members of 
the Committee, thank you for the opportunity to testify today. 
My name is Jonathan Silver, and I am the Executive Director of 
the Department of Energy's (DOE) Loan Programs Office (LPO). 
DOE's loan programs provide critical support for the nation's 
commercial deployment of clean energy technologies, and the 
jobs and economic growth that come with them. I welcome the 
opportunity to discuss the Advanced Technology Vehicles 
Manufacturing (ATVM) Loan Program with you and to highlight our 
significant accomplishments.


                  background of the atvm loan program


    As you know, the Loan Programs Office administers three 
separate programs: the ATVM Loan Program and the Title XVII 
Section 1703 and Section 1705 loan guarantee programs. The ATVM 
Loan Program was established by Section 136 of the Energy 
Independence and Security Act of 2007, and provides direct 
loans to support the manufacturing of advanced technology 
vehicles and qualifying components in the United States. As 
noted by GAO in their most recent report, although the 
authorizing statute does not specifically identify goals for 
the Program, ATVM Program staff have established clear goals 
and performance metrics to measure the program's success. In 
achieving these goals, the Program helps create next-generation 
jobs in the automotive and component manufacturing industries.
    The Program provides loans to automobile and automobile 
parts manufacturers for the cost of reequipping, expanding, or 
establishing manufacturing facilities in the United States to 
produce advanced technology vehicles or qualified components, 
and for associated engineering integration costs. In 2010, 
Section 136 was amended to include ultra-efficient vehicles 
within the definition of advanced technology vehicles.
    The FY 2009 Continuing Resolution (CR), which was enacted 
on September 30, 2008, appropriated $7.5 billion in credit 
subsidy to support up to $25 billion in loans under the ATVM 
Loan program. The FY 2009 CR also provided DOE with $10 million 
to administer the Program. On November 5, 2008, DOE issued the 
Interim Final Rule for the Program. DOE accomplished this 
effort in approximately half of the 60-day timeframe mandated 
by Congress. The program began receiving applications on 
December 2, 2008.
    The ATVM Program has received numerous applications from 
both automobile original equipment manufacturers (OEMs) and 
component manufacturers.


                       value of atvm loan program


    ATVM funding has played a critical role in the development 
of plug-in hybrid and electric vehicles by providing long-term 
capital when private financing was not available. It is 
important to remember that the ATVM Loan Program is not a grant 
program; loans must be repaid. We review projects on a 
competitive basis, and we do not fund every eligible project. 
We ensure that the loans we support meet our statutory 
requirement of having a reasonable prospect of repayment. Every 
project that receives financing must first go through a 
rigorous financial, legal and technical review process--similar 
to, and in some ways more comprehensive than, what a private 
sector lender would conduct--before a single dollar of taxpayer 
money is put to work.
    Moreover, the programs can efficiently and effectively 
leverage government resources to spur private-sector 
investment. The financing provided by the loan programs is 
``additive.'' It is intended to finance projects that--because 
they would have difficulty accessing conventional debt 
markets--might otherwise not get built. A relatively small 
amount of appropriated credit subsidy can support large amounts 
of new private sector investment. When a loan is fully repaid, 
the nation will have benefited from the incentivized private 
sector investment at relatively little cost to taxpayers.
    The potential benefits of the Program are great. In 
addition to improvements in fuel economy, ATVM Loan Program 
projects promote economic growth and job creation. They create 
construction and permanent operating jobs in manufacturing 
communities where job growth has long been stagnant. In 
addition, these projects contribute to the build-out of the 
domestic supply chain and manufacturing base that we will need 
to ``win'' the clean energy future.
    To date, DOE has issued five ATVM loans totaling $8.3 
billion. These funds will support advanced vehicle projects in 
nine states and the companies supported estimate these projects 
will preserve or create almost 38,000 manufacturing or 
permanent jobs. The Program also provides substantial support 
to the US automotive supply chain. According to information 
received from the companies, more than 65 percent of the parts 
for Fisker's Karma vehicle are expected to come from US 
manufacturers, and the VPG facility alone is estimated to 
support approximately 800 sales, service, parts and supplier 
professionals. In an economic downturn that threatened the 
entire domestic auto industry, the Program helped re-establish 
US leadership across multiple automotive technologies including 
plug-in, high-efficiency gasoline, and natural gas vehicles.
    ATVM loans support three of the world's first electric car 
factories in Delaware, Tennessee and California, as well as the 
only factory-built light-duty vehicle to date that meets or 
exceeds accessibility guidelines of the Americans with 
Disabilities Act. In total, our projects will save 
approximately 282 million gallons of gasoline annually--roughly 
the same as removing 545,000 passenger vehicles from the roads.


                          s. 1000 and s. 1001


    The Administration is continuing to review these bills and 
does not have a position on them at this time. My comments will 
be limited to Section 202 of S. 1000 and Sections 101 and 102 
of S. 1001 as they address issues that would fall under the 
Loan Program Office at the Department of Energy.
    S. 1000 would expand Title XVII to finance energy 
efficiency upgrades to existing buildings. The new program 
would target certain building types, including commercial, 
industrial, municipal, university, school, and hospital 
facilities. The President's 2012 budget requests $100 million 
for loan guarantee subsidy costs to support up to $2 billion in 
loan guarantees for energy efficiency retrofits of 
universities, schools, and hospitals. However, as noted above 
the Administration is continuing to review the specifics of 
this bill.
    S. 1001 would add two new categories of vehicles to those 
now eligible for a loan under the ATVM Program. Vehicles 
currently eligible for ATVM loans include certain light duty 
and ultra-efficient vehicles. The proposed bill would add 
medium and heavy-duty trucks, bus and rail vehicles, as well as 
alternative fuel vehicles. These vehicles would need to satisfy 
certain loan eligibility requirements set out in the proposed 
bill, including reducing the consumption of conventional motor 
fuel. The proposed bill would also expand the scope of 
components that are eligible for a loan under the ATVM program.
    The bill would also amend the Title XVII loan guarantee 
program to include, as part of the 1703 program's mandate, the 
reduction of oil imports through alternative fuel projects. It 
would also make projects that produce and distribute 
alternative fuel and advanced biofuels eligible for 1703 loan 
guarantees.


                      addressing the gao findings


    As you are aware, the U.S. Government Accountability Office 
(GAO) completed its audit of the ATVM Loan Program in February 
of this year. The stated objectives of the audit were to (1) 
identify the steps DOE has taken to implement the ATVM loan 
program, (2) examine the ATVM program's progress in awarding 
loans, (3) assess how the program is overseeing the loans, and 
(4) evaluate the extent to which DOE can assess its progress 
toward meeting program goals. The auditors made only two 
recommendations: (i) that the Program accelerate its efforts to 
engage the engineering expertise needed for effective technical 
oversight of loan recipients, and (ii) that the Program develop 
sufficient, quantifiable performance measures for its three 
program goals.
    The GAO report noted that DOE had taken numerous steps to 
successfully implement the ATVM Program. In addition to setting 
out Program goals for increasing U.S. fuel economy as a whole, 
advancing U.S. automotive technology, and protecting taxpayers' 
financial interests, the Program also established rigorous 
technical, financial, and environmental eligibility 
requirements for applicants.
    The GAO also acknowledged that the Program has successfully 
set procedures for overseeing the financial and technical 
performance of borrowers, but asserted that it did not engage 
engineering expertise in a timely matter for certain projects 
that need additional technical oversight. First, because of 
their technical expertise, the Program leverages staff in DOE's 
Office of Energy Efficiency and Renewable Energy (EERE) to 
determine whether applicants and proposed projects meet the 
Program's technical eligibility criteria. EERE performs most of 
the technical eligibility analysis for the ATVM Loan Program, 
and uses a model from the Argonne National Laboratory to 
analyze certain applicant-provided technical data. Second, as 
we related in our response to the GAO report, the ATVM Loan 
Program--consistent with its procedures--has regularly engaged 
both internal and external expertise to help oversee borrowers' 
compliance with the loans' technical requirements. In addition 
to experienced engineers on staff, we have--contracted with the 
country's leading independent engineering firms to ensure that 
the projects are being delivered as agreed. These large, 
private sector firms have decades of experience in monitoring 
and overseeing complex vehicle and technology projects--and 
thousands of specialized experts.
    We also disagree with GAO's recommendations on the 
appropriate phase to begin close technical scrutiny of certain 
large projects. GAO suggested, for example, a detailed review 
of the engineering integration stage, which is typically 
software-based design, scheduling, and logistics. A formal 
engineering assessment at this very preliminary stage would 
increase transaction costs but would not yield insights that 
would increase effectiveness of the ATVM program.
    For every project supported by ATVM loans, DOE utilizes 
engineering expertise on a regular basis during vehicle 
assembly and component manufacturing facility construction. 
Given the wide variation in ATVM projects, however, it is 
neither possible nor prudent to subject them all to an 
identical engineering review. The Program tailors the review 
for each project to deploy engineering expertise when and where 
it is most needed in order to achieve the highest confidence in 
the quality of the project and its ability to repay the loan.
    Additionally, the Loan Program's Portfolio Management 
Division continuously monitors both a borrower's adherence to 
the technical specifications in its approved business plan, and 
its financial performance relative to the terms and conditions 
of the loan agreement. Program engineers attend quarterly 
progress meetings with the borrowers and participate in on-site 
inspections of assembly plants and construction sites. 
Financial covenants are specifically crafted to provide timely 
warnings to DOE prior to a borrower developing financial issues 
that may impact the project. This level of attention gives DOE 
the ability to closely monitor both the technical performance 
and financial health of each borrower for the life of the loan.
    The Department also disagrees with GAO's second stated 
concern, that the Program has not developed sufficiently robust 
performance metrics. To support this position, GAO expressed 
concern that external auditors reported instances in which 
three of the four borrowers did not spend funds as required. 
The Program has been successful in verifying that loan funds 
are spent by the borrowers as intended by the ATVM Loan 
Program. As GAO reported, the ATVM program uses external 
auditors to oversee borrowers' financial performance. Out of 
$3.5 billion in loan disbursements over fifteen months, DOE's 
auditors have identified less than $1 million in total funds 
that were problematic. The largest of the overages, in dollars, 
represented less than 1/100th of one percent of the relevant 
loan. Each problem that has been identified was corrected 
immediately, and procedures were quickly put in place to ensure 
that the errors did not occur again.
    GAO also recommended that the ATVM Loan Program develop 
quantifiable performance measures for ATVM Program goals. DOE 
believes that the ATVM Loan Program has established clear 
performance measures and operated in a manner consistent with 
its authorizing statute and implementing regulations. DOE 
believes the analyses suggested by GAO go well beyond the 
statutory requirement set out under Section 136.


                               conclusion


    In the past two years, the ATVM loan program has shown 
great success. We are making a meaningful contribution to our 
national clean energy goals while creating new and permanent 
jobs. We will continue to administer all of the DOE loan 
programs, including the ATVM program, in the most effective and 
efficient way possible--while appropriately protecting taxpayer 
funds.
    Thank you again for inviting me here today. I look forward 
to responding to your questions.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1001, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                       ENERGY POLICY ACT OF 2005


                     Public Law 109-58, as amended


   AN ACT To ensure jobs for our future with secure, affordable, and 
reliable energy.

           *       *       *       *       *       *       *


TITLE VII--VEHICLES AND FUEL

           *       *       *       *       *       *       *


Subtitle D--Miscellaneous

           *       *       *       *       *       *       *


SEC. 756. REDUCTION OF ENGINE IDLING.

    (a) Definitions.--In this section:

           *       *       *       *       *       *       *

          (5) Idle reduction technology.--The term ``idle 
        reduction technology'' means an advanced truck stop 
        electrification system, auxiliary power unit, or other 
        technology that--
                  (A) is used to reduce long-duration idling; 
                [and]
                  (B) allows for the main drive engine or 
                auxiliary refrigeration engine to be shut 
                down[.] and;
                  (C) uses an alternative fuel to reduce 
                consumption of conventional fuel and 
                environmental emissions. 

           *       *       *       *       *       *       *

    (b) Idle Reduction Technology Benefits, Programs, and 
Studies.--

           *       *       *       *       *       *       *

          (4) Idle reduction and energy conservation deployment 
        program.--
                  (A) Establishment.--
                          (i) In general.--Not later than 90 
                        days after the date of enactment of 
                        this Act, the Administrator, in 
                        consultation with the Secretary of 
                        Transportation shall, through the 
                        Environmental Protection Agency's 
                        SmartWay Transport Partnership, 
                        establish a program to support 
                        deployment of idle reduction and energy 
                        conservation technologies.
                          (ii) Priority.--The Administrator 
                        shall give priority to the deployment 
                        of idle reduction and energy 
                        conservation technologies based on the 
                        costs and beneficial effects on air 
                        quality and ability to lessen the 
                        emission of criteria air pollutants.
                  (B) Funding.--
                          (i) Authorization of 
                        appropriations.--There are authorized 
                        to be appropriated to the Administrator 
                        to carry out subparagraph (A) for the 
                        purpose of reducing extended idling 
                        from heavy-duty vehicles $19,500,000 
                        for fiscal year 2006, $30,000,000 for 
                        fiscal year 2007, and $45,000,000 for 
                        [fiscal year 2008] each of fiscal years 
                        2008 through 2016.
                          (ii) Locomotives.--There are 
                        authorized to be appropriated to the 
                        administrator to carry out subparagraph 
                        (A) for the purpose of reducing 
                        extended idling from locomotives 
                        $10,000,000 for fiscal year 2006, 
                        $15,000,000 for fiscal year 2007, and 
                        $20,000,000 for [fiscal year 2008] each 
                        of fiscal years 2008 through 2016.

           *       *       *       *       *       *       *


TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

           *       *       *       *       *       *       *


SEC. 1703. ELIGIBLE PROJECTS.

    (a) In General.--The Secretary may make guarantees under 
this section only for projects that--
          (1) avoid, reduce, or sequester air pollutants or 
        anthropogenic emissions of greenhouse gases; and
          (2) employ new or significantly improved technologies 
        as compared to commercial technologies in service in 
        the United States at the time the guarantee is issued.

           *       *       *       *       *       *       *

          (11) Infrastructure for provision and distribution of 
        alternative fuels.

           *       *       *       *       *       *       *


              ENERGY INDEPENDENCE AND SECURITY ACT OF 2007


                     Public Law 110-140, as amended


AN ACT To move the United States toward greater energy independence and 
   security, to increase the production of clean renewable fuels, to 
 protect consumers, to increase the efficiency of products, buildings, 
and vehicles, to promote research on and deploy greenhouse gas capture 
   and storage options, and to improve the energy performance of the 
Federal Government, and for other purposes.

           *       *       *       *       *       *       *


TITLE I--ENERGY SECURITY THROUGH IMPROVED VEHICLE FUEL ECONOMY

           *       *       *       *       *       *       *


Subtitle B--Improved Vehicle Technology

           *       *       *       *       *       *       *


SEC. 136. ADVANCED TECHNOLOGY VEHICLES MANUFACTURING INCENTIVE PROGRAM.

    (a) Definitions.--In this section:
          (1) Advanced technology vehicle.--The term ``advanced 
        technology vehicle'' [means an ultra efficient vehicle 
        or a light duty vehicle that meets--] means--
                  (A) an ultra efficient vehicle or a light 
                duty vehicle that meets--
                  [(A)] (i) the Bin 5 Tier II emission standard 
                established in regulations issued by the 
                Administrator of the Environmental Protection 
                Agency under section 202(i) of the Clean Air 
                Act (42U.S.C. 7521(i)), or a lower-numbered Bin 
                emission standard;
                  [(B)] (ii) any new emission standard in 
                effect for fine particulate matter prescribed 
                by the Administrator under that Act (42 U.S.C. 
                7401 et seq.); and
                  [(C)] (iii) at least 125 percent of the 
                average base year combined fuel economy for 
                vehicles with substantially similar attributes 
                [.];
                  (B) a vehicle (such as a medium-duty or 
                heavy-duty work truck, bus, or rail transit 
                vehicle) that--
                          (i) is used on a public street, road, 
                        highway, or transitway;
                          (ii) meets each applicable emission 
                        standard that is established as of the 
                        date of the application; and
                          (iii) will reduce consumption of 
                        conventional motor fuel by 25 percent 
                        or more, as compared to existing 
                        surface transportation technologies 
                        that perform a similar function, unless 
                        the Secretary determines that--
                                  (I) the percentage is not 
                                achievable for a vehicle type 
                                or class; and
                                  (II) an alternative 
                                percentage for that vehicle 
                                type or class will result in 
                                substantial reductions in motor 
                                fuel consumption within the 
                                United States.

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          (3) Engineering integration costs.--The term 
        ``engineering integration costs'' includes the cost of 
        engineering tasks relating to--
                  (A) incorporating qualifying components into 
                the design of advanced technology vehicles; and
                  (B) designing tooling and [equipment and] 
                equipment developing manufacturing processes 
                and material suppliers and manufacturing 
                process equipment for production facilities 
                that produce qualifying components or advanced 
                technology vehicles.
          [(4) Qualifying components.--The term ``qualifying 
        components'' means components that the Secretary 
        determines to be--
                  [(A) designed for advanced technology 
                vehicles; and
                  [(B) installed for the purpose of meeting the 
                performance requirements of advanced technology 
                vehicles.]
          (4) Qualifying components.--The term ``qualifying 
        components'' means components, systems, or groups of 
        subsystems that the Secretary determines--
                  (A) to be designed to improve fuel economy or 
                otherwise substantially reduce consumption of 
                conventional motor fuel; or
                  (B) to contribute measurably to the overall 
                improved fuel use of an advanced technology 
                vehicle, including idle reduction technologies.

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    (b) Advanced Vehicles Manufacturing Facility.--The 
Secretary shall provide facility funding awards under this 
section [to automobile] to advanced technology vehicle 
manufacturers, ultra efficient vehicle manufacturers, and 
component suppliers to pay not more than 30 percent of the cost 
of--
          (1) reequipping, expanding, or establishing a 
        manufacturing facility in the United States to 
        produce--

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    (d) Direct Loan Program.--
    (1) In general.--Not later than 1 year after December 19, 
2007, and subject to the availability of appropriated funds, 
the Secretary shall carry out a program to provide [a total of 
not more than $25,000,000,000 in] loans to eligible individuals 
and entities (as determined by the Secretary) for the costs of 
activities described in subsection (b) of this section. The 
loans shall be made through the Federal Financing Bank, with 
the full faith and credit of the United States Government on 
the principal and interest. The full credit subsidy shall be 
paid by the Secretary using appropriated funds.

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    (h) Set Aside for Small [Automobile] Advanced Technology 
Vehicle Manufacturers and Component Suppliers.--
          (1) Definition of covered firm.--In this subsection, 
        the term ``covered firm'' means a firm that--
                  (A) employs less than 500 individuals; and
                  (B) manufactures ultra efficient vehicles, 
                [automobiles] advanced technology vehicles, or 
                components of advanced technology vehicles 
                [automobiles].
          (2) Set aside.--Of the amount of funds that are used 
        to provide awards for each fiscal year under subsection 
        (b) of this section, the Secretary shall use not less 
        than 10 percent to provide awards to covered firms or 
        consortia led by a covered firm.
    (i) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 2008 through [2012] 2016.

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                           TITLE 23--HIGHWAYS

CHAPTER 1--FEDERAL-AID HIGHWAYS

           *       *       *       *       *       *       *



SEC. 166. HOV FACILITIES.

    (b) Exceptions.--

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          (5) Low emission and energy-efficient vehicles.--
                  (A) Inherently low emission vehicle.--[Before 
                September 30, 2009, the State] The State agency 
                may allow vehicles that are certified as 
                inherently low-emission vehicles pursuant to 
                section 88.311-93 of title 40, Code of Federal 
                Regulations (or successor regulations), and are 
                labeled in accordance with section 88.312-93 of 
                such title (or successor regulations), to use 
                the HOV facility if the agency establishes 
                procedures for enforcing the restrictions on 
                the use of the facility by the vehicles.
                  (B) Other low emission and energy-efficient 
                vehicles.--[Before September 30, 2009, the 
                State] The State agency may allow vehicles 
                certified as low emission and energy-efficient 
                vehicles under subsection (e), and labeled in 
                accordance with subsection (e), to use the HOV 
                facility if the operators of the vehicles pay a 
                toll charged by the agency for use of the 
                facility and the agency--
                          (i) establishes a program that 
                        addresses the selection of vehicles 
                        under this paragraph; and
                          (ii) establishes procedures for 
                        enforcing the restrictions on the use 
                        of the facility by the vehicles.

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