[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5421 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5421
To provide enhanced provisions for advanced nuclear energy projects
receiving loan guarantees through the Department of Energy, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 4, 2024
Mr. Risch introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide enhanced provisions for advanced nuclear energy projects
receiving loan guarantees through the Department of Energy, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Accelerating Reliable Capacity Act
of 2024'' or the ``ARC Act of 2024''.
SEC. 2. NEW NUCLEAR INVESTMENT ACCELERATOR PROGRAM.
(a) Purpose.--The purpose of this section is to increase cost
certainty for capital-intensive projects for which a guarantee is
provided under section 1703 or 1706 of the Energy Policy Act of 2005
(42 U.S.C. 16513, 16517).
(b) Definitions.--In this section:
(1) Account.--The term ``account'' means the New Nuclear
Investment Accelerator Program Account established by
subsection (c)(1).
(2) Advanced nuclear energy project.--The term ``advanced
nuclear energy project'' means a project for 1 or more advanced
nuclear reactors (as defined in section 951(b) of the Energy
Policy Act of 2005 (42 U.S.C. 16271(b))).
(3) Class 2 estimate.--The term ``Class 2 estimate'' means
an estimate of the cost of a qualifying project that is
prepared in accordance with the industry-specific cost estimate
standards for nuclear power industries described in Recommended
Practice 115R-21 of the Association for the Advancement of Cost
Engineering entitled ``Cost Estimate Classification System--As
Applied in Engineering, Procurement, and Construction for the
Nuclear Power Industries'' (or a successor document).
(4) Director.--The term ``Director'' means the Director of
the Loan Programs Office.
(5) Expected payment amount.--The term ``expected payment
amount'' means the amount that the Director expects to pay to
the Federal Financing Bank under subsection (d)(2)(B) when a
qualifying project is placed in service.
(6) Guarantee.--The term ``guarantee'' has the meaning
given the term in section 1701 of the Energy Policy Act of 2005
(42 U.S.C. 16511).
(7) Loan programs office.--The term ``Loan Programs
Office'' means the Loan Programs Office of the Department of
Energy.
(8) Overrun.--The term ``overrun'', with respect to the
costs of a qualifying project, means any costs in excess of the
point base estimate of the Class 2 estimate approved as
described in paragraph (11)(C)(iv).
(9) Point base estimate.--The term ``point base estimate'',
with respect to a Class 2 estimate, means the value of the
Class 2 estimate without adjustment for the accuracy range or
contingency.
(10) Project delivery plan.--The term ``project delivery
plan'' means a project plan that includes--
(A) a project execution plan (as defined in
Recommended Practice 10S-90 of the Association for the
Advancement of Cost Engineering entitled ``Cost
Engineering Terminology'' (or a successor document));
(B) a contract risk allocation strategy that--
(i) aligns cost and risk incentives among
all contracted stakeholders; and
(ii) follows--
(I) the best practices described in
Recommended Practice 67R-11 of the
Association for the Advancement of Cost
Engineering entitled ``Contract Risk
Allocation--As Applied in Engineering,
Procurement, and Construction'' (or a
successor document); or
(II) other appropriate industry
best practices, as determined by the
Secretary; and
(C) a plan for the division of responsibility
between contracted stakeholders that describes roles
and responsibilities for execution of that project
plan.
(11) Qualifying project.--The term ``qualifying project''
means an advanced nuclear energy project--
(A) that is reasonably expected to be constructed
on time and on budget;
(B) that has an expected cost equal to or greater
than $2,500,000,000, according to the Class 2 estimate
for that advanced nuclear energy project; and
(C) with respect to which--
(i) the loan amount expected to be
guaranteed under section 1703 or 1706 of the
Energy Policy Act of 2005 (42 U.S.C. 16513,
16517) is--
(I) loaned through the Federal
Financing Bank; and
(II) equal to or greater than
$2,000,000,000;
(ii) the borrower of that amount--
(I) has established and submitted
to the Director a project delivery
plan;
(II) has established and submitted
to the Secretary--
(aa) a Class 2 estimate
with--
(AA) basis of
estimate documentation
for that Class 2
estimate; and
(BB) a qualifying
project cost risk
analysis;
(bb) a resource-loaded
integrated project schedule
with--
(AA) basis of
estimate documentation
for that resource-
loaded integrated
project schedule; and
(BB) a qualifying
project schedule risk
analysis; and
(cc) a labor survey
analysis report with--
(AA) basis of
estimate documentation
for that labor survey
analysis report; and
(BB) a labor risk
analysis; and
(III) has established procedures
with the Secretary to ensure enhanced
project oversight, including--
(aa) a rolling forecast
that--
(AA) updates the
resource-loaded
integrated project
schedule not less
frequently than
annually, in alignment
with the approved
changes in the
applicable change
management program; and
(BB) includes a new
qualifying project
schedule risk analysis
to match the most
recent update; and
(bb) a quarterly meeting
between the Secretary, the
Director, and senior-level
representatives of all
contracted stakeholders in the
project to review progress and,
if necessary, decide corrective
actions and responsibilities
for implementation;
(iii) the Director has approved the project
delivery plan submitted under clause (ii)(I)
prior to financial close; and
(iv) the Secretary has approved the project
planning documents submitted under clause
(ii)(II) prior to financial close.
(12) Qualifying project cost risk analysis.--The term
``qualifying project cost risk analysis'' means a cost risk
analysis that follows--
(A) the best practices described in the document of
the Government Accountability Office entitled ``Cost
Estimating and Assessment Guide: Best Practices for
Developing and Managing Program Costs'', numbered GAO-
20-195G, and dated March 2020 (or a successor
document); or
(B) other appropriate industry best practices, as
determined by the Secretary.
(13) Qualifying project schedule risk analysis.--The term
``qualifying project schedule risk analysis'' means a schedule
risk analysis that follows--
(A) the document of the Government Accountability
Office entitled ``Schedule Assessment Guide: Best
Practices for Project Schedules'', numbered GAO-16-89G,
and dated December 2015 (or a successor document); or
(B) other appropriate industry best practices, as
determined by the Secretary.
(14) Resource-loaded integrated project schedule.--The term
``resource-loaded integrated project schedule'' means an
approved schedule that follows--
(A) the best practices described in the document of
the Government Accountability Office entitled
``Schedule Assessment Guide: Best Practices for Project
Schedules'', numbered GAO-16-89G, and dated December
2015 (or a successor document); or
(B) other appropriate industry best practices, as
determined by the Secretary.
(15) Rolling forecast.--The term ``rolling forecast'' means
a process for regularly updating a resource-loaded integrated
project schedule.
(16) Secretary.--The term ``Secretary'' means the Secretary
of Energy, acting through the Director of the Office of Clean
Energy Demonstrations of the Department of Energy.
(c) New Nuclear Investment Accelerator Program Account.--
(1) Establishment.--There is established in the Loan
Programs Office an account, to be known as the ``New Nuclear
Investment Accelerator Program Account''.
(2) Management.--The account shall be managed by the
Director.
(3) Initial financing.--The following amounts shall be
transferred to the account on the date of enactment of this
Act:
(A) Of the unobligated balances of amounts
previously made available under the heading ``Nuclear
Energy'' under the heading ``ENERGY PROGRAMS'' under
the heading ``DEPARTMENT OF ENERGY'' in division J of
the Infrastructure Investment and Jobs Act (Public Law
117-58; 135 Stat. 1373), $1,100,000,000.
(B) Of the unobligated balance of amounts
previously made available under section 50144(a) of
Public Law 117-169 (136 Stat. 2044), $2,500,000,000.
(4) Availability of amounts.--Amounts transferred to the
account under paragraph (3) or otherwise deposited in the
account shall remain available until expended.
(5) Use of amounts.--The Director may use amounts in the
account to make payments pursuant to subsection (d)(2)(B).
(6) Obligation of amounts.--Amounts in the account shall
be--
(A) contingently obligated to a borrower on the
approval by the Secretary of a conditional commitment
that includes satisfaction of the requirements for a
qualifying project under this section as a condition of
financial close, subject to the conditions that--
(i) the borrower shall be considered
current so long as the borrower continues to
make progress in good faith toward satisfying
the requirements agreed upon in the conditional
commitment, as determined by the Secretary; and
(ii) if the Secretary determines that the
borrower is not making progress in good faith
as described in clause (i), the contingently
obligated amounts shall be made available to
other borrowers; and
(B) obligated to the applicable borrower at
financial close.
(7) Obligation and expenditure.--The obligation of amounts
in the account shall not be considered to be an expenditure of
those amounts unless the amounts are disbursed pursuant to
subsection (d)(2)(B).
(d) Overrun Liability.--
(1) Borrower liability for initial cost overruns.--With
respect to a qualifying project for which a guarantee is
provided under section 1703 or 1706 of the Energy Policy Act of
2005 (42 U.S.C. 16513, 16517), the borrower on the guaranteed
loan shall be responsible for all overruns until the cumulative
expenses of the qualifying project exceed 120 percent of the
point base estimate of the Class 2 estimate.
(2) Payment by the director.--
(A) Expected payment amount.--With respect to a
qualifying project for which a guarantee is provided
under section 1703 or 1706 of the Energy Policy Act of
2005 (42 U.S.C. 16513, 16517), the Director shall
update the expected payment amount quarterly, subject
to the conditions that--
(i) cumulative expenses of the qualifying
project have exceeded 120 percent of the point
base estimate of the Class 2 estimate;
(ii) the quarterly increase to the expected
payment amount does not exceed 50 percent of
total expenses in that quarter for the
qualifying project;
(iii) the updated expected payment amount
does not exceed the maximum payment amount
described in subparagraph (B)(ii);
(iv) the applicable guaranteed loan is not
in default;
(v) the prospect of increasing the payment
amount does not incentivize unnecessary
spending; and
(vi) any increases to the payment amount
are made in accordance with good governance
principles.
(B) Payment.--
(i) In general.--When a qualifying project
is placed in service, the Director shall--
(I) determine the final payment
amount based on--
(aa) the expected payment
amount determined under
subparagraph (A); and
(bb) any additional
cumulative expenses of the
applicable qualifying project,
determined in accordance with
that subparagraph; and
(II) pay that final payment amount
to the Federal Financing Bank (as the
lender of the applicable guaranteed
loan) from the account.
(ii) Maximum payment amount.--The maximum
payment amount under this subparagraph for any
1 qualifying project may not exceed
$1,200,000,000.
(iii) Application of payment.--A payment
under this subparagraph shall be applied to the
principal amount of the applicable guaranteed
loan.
(iv) Requirement.--The Director may make a
payment under this subparagraph only if the
applicable guaranteed loan is not in default.
(C) Tax treatment of payments.--For purposes of the
Internal Revenue Code of 1986--
(i) no amount shall be included in the
gross income of the borrower described in
paragraph (1) by reason of any payment under
subparagraph (B), and
(ii) in the case of any such borrower that
is a partnership or S corporation, any amount
excluded from income by reason of clause (i)
shall be treated as tax exempt income for
purposes of section 705 and 1366 of the
Internal Revenue Code of 1986.
(e) Enhanced Financing Terms for Qualifying Projects.--
(1) In general.--Notwithstanding title XVII of the Energy
Policy Act of 2005 (42 U.S.C. 16511 et seq.) or any other
provision of law, the Director shall offer the enhanced
financing terms described in paragraph (2) for a guarantee
provided under section 1703 or 1706 of that Act (42 U.S.C.
16513, 16517) with respect to a qualifying project.
(2) Enhanced financing terms described.--The enhanced
financing terms referred to in paragraph (1) are the following:
(A) Notwithstanding section 1702(c) of the Energy
Policy Act of 2005 (42 U.S.C. 16512(c)), a guarantee
may be an amount up to 200 percent of the point base
estimate of the Class 2 estimate approved as described
in subsection (a)(10)(C)(iv) for the qualifying project
that is the subject of the guarantee.
(B) The Director shall seek a commitment from the
Federal Financing Bank (as lender of a guaranteed loan)
to amend or restructure, if appropriate, the applicable
guaranteed loan to reflect the revised principal amount
after payment under subsection (d)(2)(B).
(3) Investment tax credit.--
(A) Public utility property.--Section 50(d)(2) of
the Internal Revenue Code of 1986 is amended--
(i) by redesignating subparagraphs (A),
(B), and (C) as clauses (i), (ii), and (ii),
respectively, and by moving such clauses 2 ems
to the right,
(ii) by striking ``Section 46(f)'' and
inserting the following:
``(A) Section 46(f)'',
(iii) by striking ``At the election of the
taxpayer'' and inserting the following:
``(B) At the election of the taxpayer'',
(iv) by striking ``election under this
paragraph'' each place it appears and inserting
``election under this subparagraph'', and
(v) by adding at the end the following new
subparagraph:
``(C) At the election of the taxpayer, this
paragraph shall not apply to any qualified project (as
defined in section 2(b) of the ARC Act of 2024). Rules
similar to the rules of clauses (i) and (ii) of
subparagraph (B) shall apply for purposes of an
election under this subparagraph.''.
(B) Effective date.--The amendments made by this
paragraph shall apply to taxable years beginning after
the date of the enactment of this Act.
(f) Submission of Meeting Minutes to Congress.--Not later than 7
days after each quarterly meeting described in subsection
(b)(11)(B)(ii)(III)(bb), the meeting minutes, which have been approved
by the contracted stakeholders in the applicable qualifying project,
shall be submitted by the Secretary to--
(1) the Committee on Energy and Natural Resources and the
Committee on Appropriations of the Senate; and
(2) the Committee on Energy and Commerce and the Committee
on Appropriations of the House of Representatives.
SEC. 3. OTHER RELATED PROVISIONS.
(a) Exception to Denial of Double Benefit Provision for Certain
Utilities and Military Installations.--Section 50141(d)(3) of Public
Law 117-169 (136 Stat. 2043) is amended--
(1) in subparagraph (C), by striking ``or'' at the end;
(2) in subparagraph (D), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(E) projects partnering with--
``(i) a Federal power marketing
administration or the Tennessee Valley
Authority;
``(ii) an entity that procures energy for a
military installation (as defined in section
2801(c) of title 10, United States Code) that
is managed by the Secretary of Defense or a
contractor of the Secretary of Defense; or
``(iii) the General Services Administration
for the purpose of energy procurement.''.
(b) Allowing Government Facilities as Brownfield Sites.--Section
45(b)(11)(B)(i) of the Internal Revenue Code of 1986 is amended by
striking ``(B), and'' and inserting ``(B) (excluding clauses (ii) and
(vii), and clause (i) to the extent that clause (i) applies to a
facility described in clause (ii) or (vii), of that subparagraph),
and''.
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