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[From the U.S. Government Publishing Office]


111th Congress                                            Rept. 111-585
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1
====================================================================
 
                    RURAL ENERGY SAVINGS PROGRAM ACT

                                _______
                                

 September 14, 2010.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Peterson, from the Committee on Agriculture, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 4785]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Agriculture, to whom was referred the bill 
(H.R. 4785) to amend the miscellaneous rural development 
provisions of the Farm Security and Rural Investment Act of 
2002 to authorize the Secretary of Agriculture to make loans to 
certain entities that will use the funds to make loans to 
consumers to implement energy efficiency measures involving 
structural improvements and investments in cost-effective, 
commercial off-the-shelf technologies to reduce home energy 
use, having considered the same, report favorably thereon with 
amendments and recommend that the bill as amended do pass.

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Rural Energy Savings Program Act''.

SEC. 2. RURAL ENERGY SAVINGS PROGRAM.

  (a) Purpose.--The purpose of this section is to create and save jobs 
by providing loans to qualified consumers who will use the loan 
proceeds to implement energy efficiency measures to achieve significant 
reductions in energy costs, energy consumption, or carbon emissions.
  (b) Definitions.--In this section:
          (1) Eligible entity.--The term ``eligible entity'' means--
                  (A) any public or cooperative electric utility that 
                is eligible to borrow from the Rural Utilities Service 
                electrification program authorized under the Rural 
                Electrification Act of 1936 (7 U.S.C. 901 et seq.) that 
                serves a rural area defined by that Act;
                  (B) any current borrower of the Rural Utilities 
                Service electrification program authorized under that 
                Act; or
                  (C) any entity primarily owned or controlled by an 
                entity described in subparagraph (A) or (B).
          (2) Energy efficiency measure.--The term ``energy efficiency 
        measure'', with respect to property served by an eligible 
        entity, means a structural improvement and investment in a 
        cost-effective, commercial off-the-shelf technology to reduce 
        energy use.
          (3) Qualified consumer.--The term ``qualified consumer'' 
        means a consumer served by an eligible entity that has the 
        ability to repay a loan made under subsection (d), as 
        determined by an eligible entity.
          (4) Qualified entity.--The term ``qualified entity'' means 
        any organization that the Secretary determines has significant 
        experience in providing eligible entities with--
                  (A) advice on energy, environmental, energy 
                efficiency, and information research and technology;
                  (B) training, education, and consulting;
                  (C) guidance in energy and operational issues and 
                rural community and economic development; and
                  (D) other relevant assistance, as determined by the 
                Secretary.
          (5) Rural area.--The term ``rural area'' means any area other 
        than--
                  (A) a city or town that has a population of greater 
                than 50,000 inhabitants; and
                  (B) any urbanized area contiguous and adjacent to a 
                city or town described in subparagraph (A).
          (6) Secretary.--The term ``Secretary'' means the Secretary of 
        Agriculture, acting through the Rural Utilities Service.
  (c) Loans to Eligible Entities.--
          (1) Loans authorized.--Subject to paragraph (2), the 
        Secretary shall make loans to an eligible entity that agrees 
        that the loan funds will be used to make loans to qualified 
        consumers as described in subsection (d) for the purpose of 
        implementing an energy efficiency measure.
          (2) List, plan, and measurement and verification required.--
                  (A) In general.--As a condition to receiving a loan 
                under paragraph (1), an eligible entity shall--
                          (i) establish a list of energy efficiency 
                        measures expected to decrease energy use or 
                        costs of a qualified consumer;
                          (ii) prepare an implementation plan for use 
                        of the loan funds to ensure that a loan to a 
                        qualified consumer is at least commensurate 
                        with the expected energy savings the qualified 
                        consumer shall expect to receive from the 
                        activities funded by the loan; and
                          (iii) provide for appropriate measurement and 
                        verification to ensure the effectiveness of the 
                        energy efficiency loans made by the eligible 
                        entity.
                  (B) Revision of list of energy efficiency measures.--
                An eligible entity may update the list required under 
                subparagraph (A)(i) to account for newly available 
                efficiency technologies, subject to the approval of the 
                Secretary.
                  (C) Existing energy efficiency programs.--An eligible 
                entity that, on or before the date of the enactment of 
                this Act or within 60 days after such date, has already 
                established an energy efficiency program for qualified 
                consumers may use an existing list of energy efficiency 
                measures, implementation plans, or measurement and 
                verification systems to satisfy the requirements of 
                subparagraph (A) if the Secretary determines the list, 
                plans, or systems are consistent with the purposes of 
                sub section (a).
          (3) Loan terms for loans to eligible entities.--
                  (A) No interest.--A loan made to an eligible entity 
                under paragraph (1) shall bear no interest.
                  (B) Repayment.--With respect to a loan under 
                paragraph (1)--
                          (i) the term shall not exceed 20 years from 
                        the date the loan is closed; and
                          (ii) except as provided in subparagraph (D), 
                        the repayment of each advance shall be 
                        amortized for a period not to exceed 10 years.
                  (C) Amount of advances.--Any advance of loan funds to 
                an eligible entity in any single year shall not exceed 
                30 percent of the approved loan amount.
                  (D) Special advance for start-up activities.--
                          (i) In general.--In order to assist an 
                        eligible entity in defraying initial start-up 
                        costs, the Secretary shall allow an eligible 
                        entity to request a special advance.
                          (ii) Amount of special advance.--No eligible 
                        entity may receive a special advance under this 
                        subparagraph for an amount that is greater than 
                        4 percent of the loan amount received by the 
                        eligible entity under paragraph (1).
                          (iii) Repayment.--The repayment of the 
                        special advance shall be required within 10 
                        years after the special advance is made and, at 
                        the election of the eligible entity, may be 
                        deferred to the end of the 10-year period.
                  (E) Limitation on advances.--All advances shall be 
                made under a loan described in paragraph (1) within the 
                first 10 years of the term of the loan.
  (d) Loans to Qualified Consumers.--
          (1) Terms of loans.--Loans made by an eligible entity to 
        qualified consumers using loan funds provided by the Secretary 
        under subsection (c)--
                  (A) may bear interest, not to exceed three percent, 
                to be used by the eligible entity for purposes such as 
                establishing a loan loss reserve and to offset 
                personnel and program costs of the eligible entity to 
                provide the loans;
                  (B) shall finance energy efficiency measures for the 
                purpose of decreasing energy usage or costs of a 
                qualified consumer by an amount such that a loan term 
                of not more than 10 years will not pose an undue 
                financial burden on the qualified consumer, as 
                determined by the eligible entity;
                  (C) shall not be used to fund purchases of, or 
                modifications to, personal property unless the personal 
                property--
                          (i) is or becomes attached to real property 
                        as a fixture; or
                          (ii) is a manufactured home;
                  (D) shall be repaid through charges added to the 
                electric bill for the property for, or at which energy 
                efficiency measures are or will be implemented, except 
                that this requirement shall not be construed to 
                prohibit--
                          (i) the voluntary prepayment of a loan by the 
                        owner of the property; or
                          (ii) the use of any additional repayment 
                        mechanisms that are--
                                  (I) demonstrated to have appropriate 
                                risk mitigation features, as determined 
                                by the eligible entity; or
                                  (II) required if the qualified 
                                consumer is no longer a customer of the 
                                eligible entity; and
                  (E) shall require an energy audit to determine the 
                impact of proposed energy efficiency measures on the 
                energy costs and consumption of the qualified consumer.
          (2) Contractors.--In addition to any other qualified general 
        contractor, eligible entities may serve as general contractors.
          (3) Use of other energy efficiency incentives.--Energy 
        efficiency incentives made available under any other Act, 
        including rebates, grants, or any other payments, may be used 
        to reduce the amount of a loan made under this subsection to 
        qualified consumers in order to meet the requirement of 
        paragraph (1)(B).
  (e) Measurement, Verification, Training, and Technical Assistance.--
          (1) Duties of the secretary.--Not later than 60 days after 
        the date of enactment of this Act, the Secretary shall--
                  (A) develop a protocol for eligible entities and 
                qualified entities to use in measuring energy 
                consumption and verifying the effectiveness of energy 
                efficiency measures;
                  (B) establish a measurement and verification advisory 
                committee consisting of representatives of eligible 
                entities and qualified entities;
                  (C) enter into one or more cooperative agreements 
                with qualified entities to provide technical assistance 
                and training to the employees of eligible entities to 
                carry out this section; and
                  (D) establish a process to compile and maintain a 
                directory of energy efficiency auditors that are used 
                by eligible entities to carry out this section.
          (2) Exception.--
                  (A) The Secretary shall not utilize the authority 
                provided under this subsection or subsection (k) to--
                          (i) develop, adopt, or implement a public 
                        labeling system that rates and compares the 
                        energy performance among qualified consumers; 
                        or
                          (ii) require the public disclosure of an 
                        energy performance evaluation or rating 
                        developed for any qualified consumer.
                  (B) Nothing in this paragraph shall preclude--
                          (i) the computation, collection, or use, by 
                        the Secretary, eligible entity, or qualified 
                        entity for the purposes aggregating information 
                        on the rating and comparison of the energy 
                        performance among qualified consumers with and 
                        without energy efficiency features or on energy 
                        performance evaluation or rating;
                          (ii) the use and publication of aggregate 
                        data (without identifying individual qualified 
                        consumers) based on information referred to in 
                        clause (i) to determine or demonstrate the 
                        performance of this program; or
                          (iii) the provision of information referred 
                        to in clause (i) with respect to a qualified 
                        consumer:
                                  (I) to the State, eligible consumer, 
                                eligible entity, or qualified entity, 
                                as necessary to enable carrying out 
                                this Act; or
                                  (II) for purposes of prosecuting 
                                fraud and abuse.
  (f) Fast Start Demonstration Projects.--
          (1) Demonstration projects required.--The Secretary shall 
        enter into agreements with eligible entities (or groups of 
        eligible entities) that have established an energy efficiency 
        program described in subsection (c)(2)(C) to establish an 
        energy efficiency loan demonstration projects consistent with 
        the purposes of this section that--
                  (A) implement approaches to energy audits and 
                investments in energy efficiency measures that yield 
                measurable and predictable savings;
                  (B) use measurement and verification processes to 
                determine the effectiveness of energy efficiency loans 
                made by eligible entities;
                  (C) include training for employees of eligible 
                entities, including any contractors of such entities, 
                to implement or oversee the activities described in 
                subparagraphs (A) and (B);
                  (D) provide for the participation of a majority of 
                eligible entities in a State;
                  (E) reduce the need for generating capacity;
                  (F) provide efficiency loans to--
                          (i) not fewer than 20,000 consumers, in the 
                        case of a single eligible entity; or
                          (ii) not fewer than 80,000 consumers, in the 
                        case of a group of eligible entities; and
                  (G) serve areas where a large percentage of consumers 
                reside--
                          (i) in manufactured homes; or
                          (ii) in housing units that are more than 50 
                        years old.
          (2) Deadline for implementation.--The agreements required by 
        paragraph (1) shall be entered into not later than 90 days 
        after the date of enactment of this Act.
          (3) Effect on availability of loans nationally.--Nothing in 
        this subsection shall delay the availability of loans to 
        eligible entities on a national basis beginning not later than 
        180 days after the date of the enactment of this Act.
          (4) Additional demonstration project authority.--The 
        Secretary may conduct demonstration projects in addition to the 
        project required by paragraph (1). An additional demonstration 
        project may be carried out without regard to subparagraphs (D), 
        (F), or (G) of paragraph (1).
  (g) Additional Authority.--The authority provided in this section is 
in addition to any authority of the Secretary to offer loans under any 
other law.
  (h) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary $993,000,000 to carry out this section, 
which shall remain available until expended.
  (i) Effective Period.--Subject to subsection (h)(1) and except as 
otherwise provided in this section, the loans and other expenditures 
required to be made under this section are authorized to be made during 
each of fiscal years 2010 through 2014.
  (j) Reporting Requirement.--Not later than one year after the date of 
the enactment of this Act, the Secretary shall submit to the Committee 
on Agriculture, Nutrition, and Forestry of the Senate and the Committee 
on Agriculture of the House of Representatives a report describing the 
implementation of this section.
  (k) Regulations.--
          (1) In general.--Except as otherwise provided in this 
        subsection, not later than 180 days after the date of enactment 
        of this section, the Secretary shall promulgate such 
        regulations as are necessary to implement this section.
          (2) Procedure.--The promulgation of the regulations and 
        administration of this section shall be made without regard 
        to--
                  (A) chapter 35 of title 44, United States Code 
                (commonly known as the ``Paperwork Reduction Act''); 
                and
                  (B) the Statement of Policy of the Secretary of 
                Agriculture effective July 24, 1971 (36 Fed. Reg. 
                13804), relating to notices of proposed rulemaking and 
                public participation in rulemaking.
          (3) Congressional review of agency rulemaking.--In carrying 
        out this section, the Secretary shall use the authority 
        provided under section 808 of title 5, United States Code.
          (4) Interim regulations.--Notwithstanding paragraphs (1) and 
        (2), to the extent regulations are necessary to carry out any 
        provision of this section, the Secretary shall implement such 
        regulations through the promulgation of an interim rule.
  (l) Audit of Program.--The Secretary shall conduct an audit of the 
program authorized by this section to ensure that the funds provided to 
eligible entities under this section are used in accordance with the 
purpose of this section.

  Amend the title so as to read:

      A bill to authorize the Secretary of Agriculture to make 
loans to certain entities that agree that the funds will be 
used to make loans to consumers to implement energy efficiency 
measures involving structural improvements and investments in 
cost-effective, commercial off-the-shelf technologies to reduce 
energy use, and for other purposes.

                           BRIEF EXPLANATION

    H.R. 4785 authorizes the Secretary of Agriculture to make 
loans to certain entities that agree that the funds will be 
used to make loans to consumers to implement energy efficiency 
measures involving structural improvements and investments in 
cost-effective, commercial off-the-shelf technologies to reduce 
energy use, and for other purposes.

                            PURPOSE AND NEED

    Rural customers are facing increasing costs for electric 
power. Rural electric cooperatives are facing a growing demand 
for electric power at a time when they are constrained from 
building new generation capacity.
    H.R. 4785, the ``Rural Energy Savings Program Act'' 
introduced by Congressman James Clyburn of South Carolina, 
establishes a program to provide rural consumers and rural 
electric cooperatives with the tools necessary to lower the 
amount of electric power used in homes, farms, and small 
businesses, thereby decreasing the costs of energy for rural 
communities.
    The base text of the bill authorizes the Secretary of 
Agriculture (``Secretary'') to make zero-interest loans to 
eligible entities, which are to use the loan funds to make low-
interest loans to qualified consumers for the purpose of 
implementing energy efficiency measures on the qualified 
consumers' property.
    As a condition of receiving a loan under the program, the 
eligible entity is required to: establish a list of energy 
efficiency measures that are expected to decrease the qualified 
consumers' energy use or cost; prepare an implementation plan 
for use of the loan funds; and provide for appropriate 
measurement and verification to ensure the effectiveness of the 
energy efficiency loans made by the eligible entity. To help 
defray initial start-up costs, the base text of the bill 
authorizes the Secretary to provide eligible entities with 
``jump-start'' grants.
    The base text of the bill requires the Secretary to provide 
eligible entities with a 10-year schedule for loan fund 
advances. Loans made by the eligible entity to the qualified 
consumer must not exceed three-percent interest. Loan funds 
must be used to finance energy efficiency measures for the 
purpose of decreasing energy usage or costs for the qualified 
consumer by an amount such that the 10-year loan term would not 
cause an undue financial burden on the qualified consumer. Loan 
funds cannot be used to fund energy efficiency measures to 
personal property, unless the personal property becomes 
attached to real property as a fixture, or is a manufactured 
home.
    Loans made to qualified consumers are to be repaid through 
charges on the qualified consumers' electric bill. Also, in 
order for a qualified consumer to receive a loan under the 
program, the consumer must agree to have an energy audit 
conducted on his or her property. The purpose of the energy 
audit is to determine the impact of the proposed energy 
efficiency measures on the qualified consumers' energy costs 
and consumption.
    The base text of the bill requires the Secretary to enter 
into one or more contracts with a qualified entity for a number 
of purposes, including: developing and completing a protocol 
for measurement and verification for the Rural Utilities 
Service (``RUS''); establishing a national measurement and 
verification committee consisting of representatives of 
eligible entities; providing training in measurement and 
verification; and developing a program to provide technical 
assistance and training for employees of qualified entities.
    The base text of the legislation allows eligible entities, 
or groups of eligible entities, that already have already 
established energy efficiency programs that would meet the 
requirements laid out in the bill, to enter into agreements 
with the Secretary to establish fast-start energy efficiency 
loan demonstration projects.
    The base text authorizes $993 million in appropriations for 
fiscal year 2010 to carry out the program. Of that amount: $755 
million is to be appropriated to cover the costs of direct 
loans to eligible entities; $25 million is to be appropriated 
for measurement and verification activities; $2 million is to 
be appropriated for the contract for training and technical 
assistance; and $200 million is to be appropriated for jump-
start grants. Another $1.1 million is to be appropriated for 
each of the fiscal years 2010 through 2019 to provide the RUS 
with funds to allow it to hire 10 additional employees to carry 
out the loan program.
    During a hearing held on May 12 of this year by the 
Subcommittee on Conservation, Credit, Energy, and Research, a 
number of Members expressed concerns about the legislation. The 
Members who expressed concerns were concerned about the grant 
funding contained in the legislation, the loan authorization 
amount, the loan repayment structure, the authorization of new 
spending, and the idea of creating a new program.
    In an effort to address some of the concerns expressed by 
the Members who had concerns, an Amendment in the Nature of a 
Substitute (``ANS'') was drafted. The ANS retains the concept 
that the Secretary is to make zero-interest loans to eligible 
entities, which are then to use the loan funds to make low-
interest loans to qualified consumers for the purpose of 
implementing energy efficiency measures on the qualified 
consumers' property.
    The ANS, however, narrowed the focus of the legislation so 
that the program is restricted to ``rural areas''. Current RUS 
borrowers will be eligible for the program, but those not 
currently borrowing from RUS will have to meet the rural area 
test to participate in the program. The rural area definition 
contained in the ANS is the same definition that is used in the 
Consolidated Farm and Rural Development Act.
    Because some Members were concerned that the loan repayment 
structure contained in the base text because was structured 
like a line of credit, the ANS changed the loan repayment 
structure so that any loan made to an eligible entity has a 20-
year term. Additionally, the ANS struck the jump-start grant 
provisions. Instead of providing jump-start grant funding, the 
ANS allows eligible entities to receive a special loan advance 
to help defray the upfront costs for eligible entities to get 
their program up and running. The special loan advance is not 
to exceed more than four percent on the loan funds to be 
distributed. The ANS also requires the qualified consumer to 
agree to have an energy audit conducted on his or her property 
as a condition of receiving a loan. The purpose of the energy 
audit is to discover where problems in energy usage occur and 
provide a way for consumers to correct any problems.
    The ANS allows energy efficiency incentives made available 
under any other Act, including rebates, grants or any other 
payments, to be used to reduce the amount of the qualified 
consumers' loan.
    The ANS requires the Secretary to: develop a protocol for 
eligible entities and qualified entities to use in measuring 
energy consumption and verifying the effectiveness of energy 
efficiency measures; establish a measurement and verification 
advisory committee; enter into one or more cooperative 
agreements with qualified entities to provide technical 
assistance and training to the employees of eligible entities; 
and establish a process to compile and maintain a directory of 
energy efficiency auditors that are used by eligible entities. 
However, The Secretary is prohibited from: developing, 
adopting, or implementing a public labeling system that rates 
and compares the energy performance among qualified consumers; 
or requiring the public disclosure of an energy performance 
evaluation or rating developed for any qualified consumer.
    The ANS maintains the $993 million appropriation contained 
in the base text. However, of that amount, the ANS calls for 
not less than 76 percent to be appropriated to cover the costs 
of direct loans to eligible entities; not less than 2.5 percent 
to be appropriated for developing the protocol for eligible 
entities and qualified entities to use in measuring energy 
consumption and verifying the effectiveness of energy 
efficiency measures; and not less than 0.2 percent to be 
appropriated for establishing the measurement and verification 
advisory committee. The ANS retains the $1.1 million 
appropriation for 10 additional RUS employees to carry out the 
program.
    During the July 14 mark-up of the legislation, the 
Committee adopted three amendments: one amendment prohibits the 
Secretary from using the authority given to the Secretary under 
the legislation to promulgate regulations that would establish 
an energy labeling program for a qualified consumer's property; 
a second amendment requires the Secretary to conduct an audit 
of the program to ensure that federal funds are being provided 
to eligible entities, in accordance with the purpose of the 
Act; and the third amendment struck the $1.1 million 
appropriation for the 10 additional RUS employees to carry out 
the program.

                      SECTION-BY-SECTION ANALYSIS

Section 1. SHORT TITLE.

    This Act may be cited as the ``Rural Energy Savings Program 
Act''.

Section 2. RURAL ENERGY SAVINGS PROGRAM.

    Provides that the purpose of the legislation is to create 
and save jobs by providing loans to qualified consumers to use 
loan proceeds to implement energy efficiency measures to 
achieve significant reductions in energy costs, energy 
consumption, or carbon emissions.
    Defines the terms: eligible entity; energy efficiency 
measure; qualified consumer; qualified entity; rural area, and 
Secretary.
    Authorizes the Secretary of Agriculture (``Secretary'') to 
make loans to eligible entities that agree that the loan funds 
will be used to make loans to qualified consumers for the 
purpose of implementing energy efficiency measures.
    As a condition of receiving a loan, an eligible entity is 
required to: (1) establish a list of energy efficiency measures 
that are expected to decrease energy use or costs for qualified 
consumers; (2) prepare an implementation plan for use of the 
loan funds to ensure that a loan to a qualified consumer is at 
least commensurate with the expected energy savings the 
qualified consumer expects to receive from the measures funded 
by the loan; and (3) provide for appropriate measurement and 
verification to ensure the effectiveness of the energy 
efficiency loans made by eligible entities.
    Eligible entities are permitted to update or revise the 
list of energy efficiency measures to account for newly 
available efficiency technologies, subject to the Secretary's 
approval.
    Eligible entities that have already established energy 
efficiency programs for qualified consumers are allowed to use 
their existing list of energy efficiency measures, 
implementation plans, or measurement or verification systems, 
if the Secretary determines that the lists, plans, or systems 
are consistent with the purposes of the legislation.
    Loans to eligible entities are to bear no interest. Loan 
terms are not to exceed 20 years from the date the loan is 
closed. The repayment of each loan advance is to be amortized 
for a period not to exceed 10 years. An advance of loan funds 
to an eligible entity is not to exceed 30 percent of the 
approved loan amount.
    Authorizes the Secretary to allow eligible entities to 
request a special advance to assist them in defraying initial 
start-up costs. Special advances are to be no greater than 4 
percent of the loan amount the eligible entity receives. 
Repayment of the special advance is required to be made within 
10 years after it is made and, at the election of the eligible 
entity, may be deferred to the end of the 10-year period.
    All loan advances made under the program are to be made 
within the first 10 years of the term of the loan.
    Loans made by an eligible entity to a qualified consumer: 
(1) may bear interest, not to exceed 3 percent, to be used by 
the eligible entity for purposes such as establishing a loan 
loss reserve fund and to offset personnel and program costs of 
the eligible entity to provide the loans; (2) must finance 
energy efficiency measures for the purpose of decreasing energy 
usage or costs of the qualified consumer by an amount such that 
the loan term is not more than 10 years, nor will pose an undue 
financial burden on the qualified consumer.
    Loan funds cannot be used to fund purchases of, or 
modifications to, personal property unless such property is, or 
becomes attached to, real property as a fixture. Loan funds 
cannot be used to purchase manufactured homes.
    Loan funds are to be repaid by the qualified consumer 
through charges added to the qualified consumer's electric 
bill. Qualified consumers are not prohibited from voluntarily 
prepaying a loan. The use of additional repayment mechanisms 
that are demonstrated to have appropriate risk mitigation 
factors, as determined by the eligible entity, or are required 
if the qualified consumer is no longer a customer of the 
eligible entity, are not prohibited.
    To receive a loan, an energy audit must be conducted to 
determine the impact of the proposed energy efficiency measures 
on the energy costs and energy consumption of the qualified 
consumer.
    Eligible entities can serve as general contractors, in 
addition to any other qualified general contractor.
    Allows for the reduction of the amount of loan funds 
authorized under this legislation with respect to energy 
efficiency incentives made under any other Act, including 
rebates, grants, or any other payments.
    Not later than 60 days after the date of the enactment of 
the legislation the Secretary is required to: (1) develop a 
protocol for eligible entities and qualified entities to use in 
measuring energy consumption and verifying the effectiveness of 
energy efficiency measures; (2) establish a measurement and 
verification advisory committee consisting of representatives 
of eligible entities and qualified entities; (3) enter into one 
or more cooperative agreements with qualified entities to 
provide technical assistance and training to the employees of 
eligible entities; and establish a process to compile and 
maintain a directory of energy efficiency auditors that are 
used by eligible entities.
    Prohibits the Secretary from using the authority provided 
by the legislation to: develop, adopt, or implement a public 
labeling system that rates and compares the energy performance 
among qualified consumers; or require the public disclosure of 
an energy performance evaluation or rating developed for any 
qualified consumer.
    Prohibits the Secretary from promulgating regulations to: 
develop, adopt, or implement a public labeling system that 
rates and compares the energy performance among qualified 
consumers; or require the public disclosure of an energy 
performance evaluation or rating developed for any qualified 
consumer.
    The Secretary, eligible entities, or qualified entities are 
not prohibited from computing, collecting, or using aggregate 
information for the purposes of rating and comparing the energy 
performance among qualified consumers with and without energy 
efficiency features, or on energy performance evaluation or 
rating.
    The Secretary, eligible entities, or qualified entities are 
not prohibited from using and publishing aggregate data 
(without identifying individual qualified consumers) based on 
aggregate information to determine or demonstrate the 
performance of the loan program.
    Authorizes the Secretary to establish energy efficiency 
loan demonstration projects consistent with the purposes of the 
legislation.
    The deadline for entering into demonstration project 
agreements is to be not later than 90 days after the enactment 
of the legislation.
    Authorizes the Secretary to conduct additional 
demonstration projects.
    The availability of loans authorized by the legislation is 
not to be delayed beginning not later than 180 days after the 
enactment of the legislation.
    Specifies that the authority given to the Secretary by the 
legislation is in addition to any authority of the Secretary to 
offer loans under any other law.
    Provides for an appropriation of $993 million, to remain 
available until expended, to carry out the loan program.
    Loans and other expenditures authorized by the legislation 
are to be made during each of the fiscal years 2010 through 
2014.
    Requires the Secretary to submit, not later than one year 
after the date of the enactment of the legislation, a report 
describing the implementation of the loan program to the House 
and Senate Agriculture Committees.
    Requires the Secretary to: not later than 180 days after 
the date of the enactment of the legislation, promulgate 
regulations that are necessary to implement the legislation; 
and, to the extent regulations are necessary to carry out any 
provision of the legislation, implement regulations through the 
promulgation of an interim rule.
    Requires the Secretary to conduct an audit of the program 
to ensure that the funds provided to eligible entities are used 
in accordance with the purpose of the legislation.

                        COMMITTEE CONSIDERATION

                                HEARINGS

    The Subcommittee on Conservation, Credit, Energy, and 
Research held a hearing on May 12, 2010. Testimony was heard 
from nine witnesses on three separate panels that included 
Members of Congress.

                      FULL COMMITTEE CONSIDERATION

    On July 14, 2010, the Committee on Agriculture met, 
pursuant to notice, with a quorum present to consider H.R. 
4785. Mr. Peterson offered an opening statement, as did Ranking 
Member Lucas.
    The bill, H.R. 4785, was placed before the Committee for 
consideration and without objection a first reading of the bill 
was waived and it was opened for amendment at any point. 
Counsel was recognized for a brief explanation of the bill. The 
chairman offered an Amendment in the Nature of a Substitute to 
the bill, H.R. 4785, and counsel provided a brief explanation 
of that amendment.
    Mrs. Dahlkemper was recognized to offer and explain an 
amendment that would require the Secretary to conduct an audit 
of the program to ensure that federal funds are being provided 
to eligible entities, in accordance with the purpose of the 
act. Discussion occurred and by voice vote, the Dahlkemper 
Amendment to the Amendment in the Nature of a Substitute was 
adopted.
    Mr. Holden was recognized to offer and explain an amendment 
that would prohibit the Secretary form using the authority 
given under the legislation to promulgate regulations that 
would establish an energy labeling program for the qualified 
consumer's property. Discussion occurred and by voice vote, the 
Holden Amendment to the Amendment in the Nature of a Substitute 
was adopted.
    Mr. Marshall was recognized to offer and explain an 
amendment that would restrict consumer loans to individuals who 
make less than three times the poverty level. Discussion 
occurred and by voice vote, the Marshall Amendment to the 
Amendment in the Nature of a Substitute to H.R. 4785 failed. 
Mr. Neugebauer requested a recorded vote. The results of the 
recorded vote were: 12 yeas, 28 nays, 6 not voting. The 
Marshall Amendment was not adopted. (See Roll Call #1).
    Ms. Lummis and Mr. Luetkemeyer were recognized to offer and 
explain an amendment that would remove the authorization of 
$1,100,000 for each of the fiscal years 2010 through 2019 for 
ten additional Rural Utilities Service employees. Discussion 
occurred and by voice vote the Lummis/Luetkemeyer Amendment to 
the Amendment in the Nature of a Substitute was adopted.
    By voice vote, the Lucas motion to approve the Amendment in 
the Nature of a Substitute to H.R. 4785 as amended, was 
adopted.
    By voice vote, the Lucas motion to report the bill H.R. 
4785 as amended favorably to the House with the recommendation 
that it do pass was adopted.
    Mr. Lucas reserved the right for minority views to the 
bill, H.R. 4785 to be filed in the report.
    Without objection, the usual instructions were given to 
staff that consist of making such technical, clarifying or 
conforming changes as are appropriate without changing the 
substance of the legislation.
    Chairman Peterson thanked all the Members and adjourned the 
meeting subject to the call of the chair.

                  REPORTING THE BILL--ROLL CALL VOTES

    In compliance with clause 3(b) of Rule XIII of the House of 
Representatives, the Committee sets forth the record of the 
following roll call votes taken with respect to H.R. 4785.

Roll Call #1

    Summary: Amendment to restrict consumer loans to 
individuals who make less than three times the poverty level.
    Offered by: Mr. Marshall of Georgia
    Results: Amendment failed by a vote of 12 yeas, 28 nays, 
and 6 not voting.




                                  YEAS

1. Mr. Baca                          7. Mr. King
2. Mr. Marshall                      8. Mr. Neugebauer
3. Mr. Boccieri                      9. Mr. Conaway
4. Mr. Murphy                        10. Mr. Fortenberry
5. Mr. Goodlatte                     11. Mrs. Schmidt
6. Mr. Moran                         12. Mr. Rooney

                                  NAYS

1. Mr. Holden                        15. Ms. Markey
2. Mr. McIntyre                      16. Mr. Kratovil
3. Mr. Boswell                       17. Mr. Schauer
4. Mr. Cardoza                       18. Mr. Kissell
5. Mr. Scott                         19. Mr. Owens
6. Ms. Herseth Sandlin               20. Mr. Childers
7. Mr. Cuellar                       21. Mr. Minnick
8. Mr. Costa                         22. Mr. Lucas
9. Mr. Ellsworth                     23. Mr. Johnson
10. Mr. Walz                         24. Mr. Rogers
11. Mr. Schrader                     25. Mr. Smith
12. Mrs. Halvorson                   26. Mr. Luetkemeyer
13. Mrs. Dahlkemper                  27. Mrs. Lummis
14. Mr. Bright                       28. Mr. Peterson

                               NOT VOTING

1. Mr. Kagen                         4. Mr. Roe
2. Mr. Pomeroy                       5. Mr. Thompson
3. Mr. Graves                        6. Mr. Cassidy


                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee on Agriculture's 
oversight findings and recommendations are reflected in the 
body of this report.

           BUDGET ACT COMPLIANCE (SECTIONS 308, 402, AND 423)

    The provisions of clause 3(c)(2) of Rule XIII of the Rules 
of the House of Representatives and section 308(a)(1) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, new credit authority, 
or increased or decreased revenues or tax expenditures) are not 
considered applicable. The estimate and comparison required to 
be prepared by the Director of the Congressional Budget Office 
under clause 3(c)(3) of Rule XIII of the Rules of the House of 
Representatives and sections 402 and 423 of the Congressional 
Budget Act of 1974 submitted to the Committee prior to the 
filing of this report are as follows:

                                                September 13, 2010.
Hon. Collin C. Peterson,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4785, the Rural 
Energy Savings Program Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                               Douglas W. Elmendorf
    Enclosure.

H.R. 4785--Rural Energy Savings Program Act

    Summary: H.R. 4785 would authorize the Secretary of 
Agriculture, through the Rural Utilities Service (RUS), to make 
loans to certain public or cooperative electric utilities. 
Under the bill, participating cooperatives would, in turn, make 
low-interest loans to customers to support installations of 
energy-efficiency measures. The bill would authorize the 
appropriation of $993 million to cover the federal cost of such 
activities.
    Assuming appropriation of the specified amount, CBO 
estimates that implementing H.R. 4785 would cost $800 million 
over the 2011-2015 period. Enacting H.R. 4785 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    H.R. 4785 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 4785 is shown in the following table. 
The costs of this legislation fall within budget function 270 
(energy).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                              --------------------------------------------------
                                                                2011    2012    2013    2014    2015   2011-2015
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level..........................................     993       0       0       0       0       993
Estimated Outlays............................................     150     210     160     120     160       800
----------------------------------------------------------------------------------------------------------------

    Basis of Estimate: For this estimate, CBO assumes that H.R. 
4785 will be enacted in 2010 and that appropriations will be 
provided as specified by the bill. We assume that about $10 
million of authorized funds would be used each year by RUS to 
expand staffing as necessary to administer the proposed 
program. Based on information from RUS about the likely subsidy 
rate of the proposed loans (ranging from 20 percent to 25 
percent), CBO estimates that remaining amounts would be used to 
leverage between $4 billion and $5 billion in new loans to 
local electric cooperatives. Based on historical disbursement 
rates for RUS loans, CBO estimates that resulting spending 
under H.R. 4785 would total $800 million over the 2011-2015 
period.
    Pay-as-You-Go Considerations: None.
    Intergovernmental and Private-Sector Impact: H.R. 4785 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate Prepared by: Federal Costs: Megan Carroll; 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.

                    PERFORMANCE GOALS AND OBJECTIVES

    With respect to the requirement of clause 3(c)(4) of Rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objections of this legislation are to 
make loans to certain entities that agree that the funds will 
be used to make loans to consumers to implement energy 
efficiency measures involving structural improvements and 
investments in cost-effective, commercial off-the shelf 
technologies to reduce energy use, and for other purposes.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds the 
Constitutional authority for this legislation in Article I, 
clause 8, section 18, that grants Congress the power to make 
all laws necessary and proper for carrying out the powers 
vested by Congress in the Constitution of the United States or 
in any department or officer thereof.

                        COMMITTEE COST ESTIMATE

    Pursuant to clause 3(d)(2) of Rule XIII of the Rules of the 
House of Representatives, the Committee report incorporates the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to sections 402 and 423 of the 
Congressional Budget Act of 1974.

                      ADVISORY COMMITTEE STATEMENT

    In accordance with section 5(b) of the Federal Advisory 
Committee Act, the Committee finds that the advisory committee 
established by section 2 is necessary to carry out the 
functions and responsibilities contained therein.

                APPLICABILITY TO THE 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 (Public Law 
104-1).

                       FEDERAL MANDATES STATEMENT

    The Committee adopted 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 (Public Law 104-4).

EARMARK STATEMENT REQUIRED BY CLAUSE 9 OF RULE XXI OF THE RULES OF THE 
                        HOUSE OF REPRESENTATIVES

    H.R. 4785 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(e), 9(f), or 9(g) of rule XXI of the rules of the 
House of Representatives.

    DISSENTING VIEWS ON H.R. 4785, THE RURAL ENERGY SAVINGS PROGRAM

    Rural electric cooperatives are facing an increase in 
energy demand due to a growing customer base. This demand is 
becoming challenging to meet because of unnecessary regulatory 
hurdles and the looming energy tax and CO2 regulation being 
supported by President Obama and the Democratic leadership.
    H.R. 4785, the Rural Energy Savings Program Act, creates a 
re-lending program allowing USDA to provide zero interest loans 
to rural electric cooperatives who in return provide low 
interest loans to customers for energy efficiency projects to 
their homes. Customers would be able to repay their loans 
through their monthly utility bill. In theory, these customers 
would over time reduce energy consumption and reduce their 
energy bills.
    The sponsor and supporters of this legislation have 
attempted to give rural electricity providers the tools to meet 
the demands of its customers by reducing energy use through 
energy efficiency projects. Energy efficiency is an important 
step in an overall energy plan, but creating a new program is 
not the solution. Just in the last few years, Congress has 
authorized energy efficiency appliance rebate programs, state 
lending programs for energy efficiency, training programs for 
green jobs, and tax credits for home owners, builders and even 
manufacturers to promote energy efficient measures. The 
American Recovery and Reinvestment Act (ARRA) alone funded the 
Weatherization Assistance Program, a grant program for low 
income families for home energy efficiency projects, at $5.25 
billion.
    This issue can be addressed in the farm bill by making 
adjustments to current programs. The 2008 Farm Bill included a 
provision that would have allowed rural electric cooperatives 
to expand clean energy production and provide affordable 
electricity for its customers. However, this provision was 
stripped by Speaker Pelosi. As a result, rural electric coops 
can not access RUS lending for new base load generation. In 
other words, base load generation from sources such as nuclear, 
natural gas, and clean coal technologies is difficult, if not 
impossible, to finance through the program.
    Additionally, President Obama's recent budget proposal 
called for a $2.5 billion cut to the electric loan program as 
well as restricting any lending for improving or expanding 
natural gas plants. These energy policies will make it 
increasingly more difficult to provide homes, schools, 
businesses and farms across rural America with affordable 
electricity.
    Unfortunately, the Democratic leadership is pushing energy 
policy that will create increased and burdensome energy costs 
for Americans. As a result, we are creating new programs that 
increase spending to address the consequences of these 
policies. Congress should be exploring policies that will 
capitalize on our domestic energy resources to meet increased 
demands, such as clean coal technologies, clean burning natural 
gas, and nuclear energy.

                                                     Frank D. Lucas