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110th Congress                                            Rept. 110-309

                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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



 
                     ENERGY LOAN GUARANTEE AMOUNTS

                                _______
                                

                 August 3, 2007.--Ordered to be printed

                                _______
                                

 Mr. Dingell, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3241]

  The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3241) to clarify the amount of loans to be 
guaranteed under Title XVII of the Energy Policy Act of 2005, 
and for other purposes, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Subcommittee Consideration.......................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     4
Statement of General Performance Goals and Objectives............     4
New Budget Authority, Entitlement Authority, and Tax Expenditures     4
Earmarks and Tax and Tariff Benefits.............................     4
Committee Cost Estimate..........................................     4
Congressional Budget Office Estimate.............................     4
Federal Mandates Statement.......................................     4
Advisory Committee Statement.....................................     4
Constitutional Authority Statement...............................     5
Applicability to Legislative Branch..............................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill, as Reported............     5

                          Purpose and Summary

    The purpose of H.R. 3241 is to clarify the intent of 
Congress regarding the implementation by the Department of 
Energy (DOE) of Title XVII of the Energy Policy Act of 2005 
(EPACT), ``Incentives for Innovative Technologies'', and for 
other purposes.
    The bill amends Title XVII to explicitly authorize the 
Secretary of Energy to issue a loan guarantee for an eligible 
project of up to 100 percent of any loan or other debt 
obligation, at a level sufficient to attract adequate 
nonguaranteed investment to capitalize an eligible project. The 
bill also bars the Secretary from issuing a rule or regulation 
establishing a lower percentage limit.
    In addition, the bill stipulates that no appropriation 
authorized pursuant to Title XVII may exclude any category of 
eligible project under section 1704.
    Finally, H.R. 3241 specifies that the Secretary may not 
issue a loan guarantee unless the borrower has provided 
reasonable assurances that wages paid to workers employed in 
any construction work financed with the loan will be in 
accordance with the requirements of the Davis-Bacon Act.

                  Background and Need for Legislation

    Title XVII authorizes the Secretary of Energy to make loan 
guarantees 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.
    Title XVII specifies 10 categories of projects that are 
eligible for loan guarantees, including renewable energy 
systems, advanced fossil technology (including certain coal 
gasification projects), hydrogen fuel cell technology, advanced 
nuclear facilities, carbon capture and sequestration, 
electrical, end-use technologies, fuel efficient vehicles, 
pollution control equipment, and refiners.
    On May 24, 2007, the Department of Energy (DOE) issued a 
proposed rule that would limit the amount of a loan guarantee 
to no more than 90 percent of the amount of a debt instrument. 
(This proposal is subject to an existing statutory cap in Title 
XVII limiting the amount of a loan guarantee to eighty percent 
of total project cost.)
    At the Subcommittee on Energy and Air Quality's April 24, 
2007, hearing, several witnesses testified that if DOE adopted 
an arbitrary limit on the amount of debt for which a loan 
guarantee could be granted, some meritorious projects could be 
foreclosed. While the Committee recognizes that not every 
meritorious project will warrant funding at a level of 100 
percent of the value of a debt instrument (subject to the 
separate statutory limit of eighty percent of the total project 
cost), it expects that some projects will require funding at 
this level. For this reason, the bill bars DOE from issuing a 
final rule that does not permit it to grant, on a case-by-case 
basis, loan guarantees of as much as 100 percent.
    In addition, the bill clarifies that any appropriation made 
pursuant to the authority of Title XVII may not exclude any of 
the 10 categories of projects made eligible for a loan 
guarantee under section 1704 of EPACT.

                                Hearings

    There was one oversight hearing and one legislative hearing 
held by the Subcommittee on Energy and Air Quality, Committee 
on Energy and Commerce, in connection with the bill reported by 
the Committee.
    The Subcommittee on Energy and Air Quality held a hearing 
entitled, ``Implementation of EPACT 2005 Loan Guarantee 
Programs by the Department of Energy,'' on Tuesday, April 24, 
2007. The Subcommittee received testimony from the following 
witnesses: The Honorable Dennis R. Spurgeon, Acting Under 
Secretary, Department of Energy; Mr. Chris Crane, President and 
Chief Nuclear Officer, Exelon Generation; Ms. Julie Jorgensen, 
Co-President and CEO, Excelsior Energy Inc.; Mr. James C. 
Cosgrove, Acting Director, Natural Resources and Environment, 
Government Accountability Office; and Mr. Denny DeVos, Director 
of Corporate Finance, POET.
    The Subcommittee on Energy and Air Quality held a 
legislative hearing on ``Discussion Drafts concerning Energy 
Efficiency, Smart Electricity Grid, Energy Policy Act of 2005 
Title XVII Loan Guarantees, and Standby Loans for Coal-to-
Liquids Projects,'' on Thursday, May 24, 2007. The Subcommittee 
received testimony from the following witnesses: Mr. David 
Rogers, Deputy Assistant Secretary for Energy Efficiency, 
Department of Energy; Ms. Kateri Callahan, President, Alliance 
to Save Energy; Mr. Jay Birnbaum, Vice President and General 
Counsel, Current Group, LLC; Ms. Katharine A. Fredriksen, 
Principal Deputy Assistant Secretary for Policy and 
International Affairs, U.S. Department of Energy; Mr. Don 
Maley, Vice President, Leucadia International Corporation; and 
Dr. Daniel A. Lashof, Ph.D., Science Director, Climate Center, 
Natural Resources Defense Council.

                       Subcommittee Consideration

    Prior to the introduction of H.R. 3241, its text was 
considered in the Committee as a Committee Print.
    On Wednesday, June 20, 2007, the Subcommittee on Energy and 
Air Quality met in open markup session and considered a 
Committee Print to clarify the amount of loans to be guaranteed 
under Title XVII of the Energy Policy Act of 2005. The 
Subcommittee favorably forwarded the Committee Print to the 
full Committee, amended, by a recorded vote of 17-12. The 
Committee Print forwarded by the Subcommittee was subsequently 
designated Committee Print #3 for full Committee consideration.

                        Committee Consideration

    On Wednesday, June 27, 2007, the full Committee met in open 
markup session and ordered the Committee Print favorably 
reported to the House, as amended, by a voice vote. On July 31, 
2007, a clean bill, H.R. 3241, was introduced with the approved 
language of the Committee Print, and was referred to the full 
Committee to be reported to the House without further 
consideration.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. Mr. 
Dingell moved that the Committee favorably report the Committee 
Print, as amended, to the House. The motion to report the 
Committee Print favorably to the House was agreed to by a voice 
vote. There were no recorded votes taken during full Committee 
consideration of the Committee Print.

                      Committee Oversight Findings

    Regarding clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the oversight findings of the 
Committee on the bill are reflected in this report.

         Statement of General Performance Goals and Objectives

    The goals and objectives of H.R. 3241 are to clarify the 
amount of loans to be guaranteed under Title XVII of the Energy 
Policy Act of 2005, and to require that recipients of these 
loan guarantees provide reasonable assurances that workers will 
be paid prevailing wages consistent with the Davis-Bacon Act.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    Regarding compliance with clause 3(c)(2) of rule XIII of 
the Rules of the House of Representatives, the Committee finds 
that H.R. 3241 would result in no new or increased budget 
authority, entitlement authority, or tax expenditures or 
revenues.

                  Earmarks and Tax and Tariff Benefits

    Regarding compliance with clause 9 of rule XXI of the Rules 
of the House of Representatives, H.R. 3241 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.

                        Committee Cost Estimate

    The Committee will adopt as its own the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.

                  Congressional Budget Office Estimate

    Regarding clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, a cost estimate on H.R. 3241 by the 
Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not available as of the 
time of the filing of this report by the Committee.

                       Federal Mandates Statement

    The Committee will adopt as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    Regarding section 5(b) of the Federal Advisory Committee 
Act, the bill does not establish any advisory committee.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional authority for this legislation is provided in 
the provisions of Article I, section 8, clause 1, that relate 
to expending funds to provide for the general welfare of the 
United States.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation

    Section 101. Amount of loans guaranteed.--This section 
amends section 1702(c) of EPACT to (1) retain the existing 
statutory limit on DOE's authority to make a loan guarantee for 
an eligible project (up to 80 percent of the project cost of a 
facility), (2) clarify that DOE should approve an amount likely 
to attract nonguaranteed investment adequate to capitalize the 
project, (3) provide that while DOE has discretion to guarantee 
up to 100 percent of the loan amount (subject to the existing 
80 percent of project cost cap), DOE may not issue a generic 
rule establishing a lower percentage limit, and (4) require 
that a recipient of a loan guarantee provide reasonable 
assurances that construction workers will be paid not less than 
prevailing wages consistent with the Davis-Bacon Act.
    Section 102. Exclusion of categories.--Provides that no 
appropriation pursuant to this section may exclude any category 
of ``eligible project'' under Title XVII.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as 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

           *       *       *       *       *       *       *


TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES

           *       *       *       *       *       *       *


SEC. 1702. TERMS AND CONDITIONS.

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Amount.--Unless otherwise provided by law, a guarantee 
by the Secretary shall not exceed an amount equal to 80 percent 
of the project cost of the facility that is the subject of the 
guarantee, as estimated at the time at which the guarantee is 
issued.]
  (c) Amount.--
          (1) Percentage of project cost.--A guarantee by the 
        Secretary shall not exceed an amount equal to 80 
        percent of the project cost of the facility that is the 
        subject of the guarantee, as estimated at the time at 
        which the guarantee is issued, and shall be no less 
        than the minimum amount determined by the Secretary to 
        be likely to attract nonguaranteed investment adequate 
        to capitalize the project.
          (2) Percentage of loan.--Subject to paragraph (1), 
        the Secretary may guarantee up to 100 percent of any 
        loan or other debt obligation of the borrower to fund 
        an eligible project, and may not issue a rule or 
        regulation establishing a lower percentage limit.

           *       *       *       *       *       *       *

  (k) Wages.--No loan guarantee shall be made under this title 
unless the borrower has provided to the Secretary reasonable 
assurances that all laborers and mechanics employed by 
contractors or subcontractors in the performance of 
construction work financed in whole or in part with the loan 
will be paid wages at rates not less than those prevailing on 
similar work in the locality as determined by the Secretary of 
Labor in accordance with subchapter IV of chapter 31 of title 
40, United States Code (commonly referred to as the Davis-Bacon 
Act).

           *       *       *       *       *       *       *


SEC. 1704. AUTHORIZATION OF APPROPRIATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Exclusion of Categories.--No appropriation authorized 
pursuant to this section may exclude any category of eligible 
project described in section 1703.

           *       *       *       *       *       *       *