USC Subchapter XV

in effect

42 U.S.C. § 16511 Definitions

In this subchapter: (1) Commercial technology(A) In generalThe term “commercial technology” means a technology in general use in the commercial marketplace. (B) InclusionsThe term “commercial technology” does not include a technology solely by use of the technology in a demonstration project funded by the Department. (2) CostThe term “cost” has the meaning given the term “cost of a loan guarantee” within the meaning of section 661a(5)(C) of title 2. (3) Eligible projectThe term “eligible project” means a project described in section 16513 of this title. (4) Guarantee(A) In generalThe term “guarantee” has the meaning given the term “loan guarantee” in section 661a of title 2, except that a loan guarantee may guarantee any debt obligation of a non-Federal borrower to any Eligible Lender (as defined in section 609.2 of title 10, Code of Federal Regulations). (B) InclusionThe term “guarantee” includes a loan guarantee commitment (as defined in section 661a of title 2). (5) ObligationThe term “obligation” means the loan or other debt obligation that is guaranteed under this section. (6) StateThe term “State” has the meaning given the term in section 6802 of this title. (7) State energy financing institution(A) In generalThe term “State energy financing institution” means a quasi-independent entity or an entity within a State agency or financing authority established by a State—(i) to provide financing support or credit enhancements, including loan guarantees and loan loss reserves, for eligible projects; and (ii) to create liquid markets for eligible projects, including warehousing and securitization, or take other steps to reduce financial barriers to the deployment of existing and new eligible projects. (B) InclusionThe term “State energy financing institution” includes an entity or organization established to achieve the purposes described in clauses (i) and (ii) of subparagraph (A) by an Indian Tribal entity or an Alaska Native Corporation.

42 U.S.C. § 16512 Terms and conditions

(a) In generalExcept for division C of Public Law 108–324 [15 U.S.C. 720 et seq.], the Secretary shall make guarantees under this or any other Act for projects, including projects receiving financial support or credit enhancements from a State energy financing institution, on such terms and conditions as the Secretary determines, after consultation with the Secretary of the Treasury, only in accordance with this section. (b) Specific appropriation or contribution(1) In generalExcept as provided in paragraph (2), the cost of a guarantee shall be paid by the Secretary using an appropriation made for the cost of the guarantee, subject to the availability of such an appropriation. (2) Insufficient appropriationsIf sufficient appropriated funds to pay the cost of a guarantee are not available, then the guarantee shall not be made unless—(A) the Secretary has received from the borrower a payment in full for the cost of the guarantee and deposited the payment into the Treasury; or (B) a combination of one or more appropriations and one or more payments from the borrower under this subsection has been made that is sufficient to cover the cost of the guarantee. (3) Source of paymentsThe source of a payment received from a borrower under subparagraph (A) or (B) of paragraph (2) may not be a loan or other debt obligation that is made or guaranteed by the Federal Government. (c) AmountUnless 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. (d) Repayment(1) Requirement(A) In generalNo guarantee, including a guarantee for a project receiving financial support or credit enhancements from a State energy financing institution, shall be made unless the Secretary determines that there is reasonable prospect of repayment of the principal and interest on the obligation by the borrower. (B) Reasonable prospect of repaymentThe Secretary shall base a determination of whether there is reasonable prospect of repayment under subparagraph (A) on a comprehensive evaluation of whether the borrower has a reasonable prospect of repaying the guaranteed obligation for the eligible project, including, as applicable, an evaluation of—(i) the strength of the contractual terms of the eligible project (if commercially reasonably available); (ii) the forecast of noncontractual cash flows supported by market projections from reputable sources, as determined by the Secretary; (iii) cash sweeps and other structure enhancements; (iv) the projected financial strength of the borrower—(I) at the time of loan close; and (II) throughout the loan term after the project is completed; (v) the financial strength of the investors and strategic partners of the borrower, if applicable; and (vi) other financial metrics and analyses that are relied on by the private lending community and nationally recognized credit rating agencies, as determined appropriate by the Secretary. (2) AmountNo guarantee shall be made unless the Secretary determines that the amount of the obligation (when combined with amounts available to the borrower from other sources) will be sufficient to carry out the project. (3) SubordinationThe obligation shall be subject to the condition that the obligation, including any reorganization, restructuring, or termination thereof, shall not at any time be subordinate to other financing. (e) Interest rateAn obligation shall bear interest at a rate that does not exceed a level that the Secretary determines appropriate, taking into account the prevailing rate of interest in the private sector for similar loans and risks. (f) TermThe term of an obligation shall require full repayment over a period not to exceed the lesser of—(1) 30 years; or (2) 90 percent of the projected useful life of the physical asset to be financed by the obligation (as determined by the Secretary). (g) Defaults(1) Payment by Secretary(A) In generalIf a borrower defaults on the obligation (as defined in regulations promulgated by the Secretary and specified in the guarantee contract), the holder of the guarantee shall have the right to demand payment of the unpaid amount from the Secretary. (B) Payment requiredWithin such period as may be specified in the guarantee or related agreements, the Secretary shall pay to the holder of the guarantee the unpaid interest on, and unpaid principal of the obligation as to which the borrower has defaulted, unless the Secretary finds that there was no default by the borrower in the payment of interest or principal or that the default has been remedied. (C) ForbearanceNothing in this subsection precludes any forbearance by the holder of the obligation for the benefit of the borrower which may be agreed upon by the parties to the obligation and approved by the Secretary. (2) Subrogation(A) In generalIf the Secretary makes a payment under paragraph (1), the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the guarantee or related agreements including, where appropriate, the authority (notwithstanding any other provision of law) to—(i) complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements; or (ii) permit the borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the project if the Secretary determines this to be in the public interest. (B) Superiority of rightsThe rights of the Secretary, with respect to any property acquired pursuant to a guarantee or related agreements, shall be superior to the rights of any other person with respect to the property. (C) Terms and conditionsA guarantee agreement shall include such detailed terms and conditions as the Secretary determines appropriate to—(i) protect the interests of the United States in the case of default; and (ii) have available all the patents and technology necessary for any person selected, including the Secretary, to complete and operate the project. (3) Payment of principal and interest by SecretaryWith respect to any obligation guaranteed under this section, the Secretary may enter into a contract to pay, and pay, holders of the obligation, for and on behalf of the borrower, from funds appropriated for that purpose, the principal and interest payments which become due and payable on the unpaid balance of the obligation if the Secretary finds that—(A)(i) the borrower is unable to meet the payments and is not in default; (ii) it is in the public interest to permit the borrower to continue to pursue the purposes of the project; and (iii) the probable net benefit to the Federal Government in paying the principal and interest will be greater than that which would result in the event of a default; (B) the amount of the payment that the Secretary is authorized to pay shall be no greater than the amount of principal and interest that the borrower is obligated to pay under the agreement being guaranteed; and (C) the borrower agrees to reimburse the Secretary for the payment (including interest) on terms and conditions that are satisfactory to the Secretary. (4) Action by Attorney General(A) NotificationIf the borrower defaults on an obligation, the Secretary shall notify the Attorney General of the default. (B) RecoveryOn notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from—(i) such assets of the defaulting borrower as are associated with the obligation; or (ii) any other security pledged to secure the obligation. (h) Fees(1) In generalThe Secretary shall charge, and collect on or after the date of the financial close of an obligation, a fee for a guarantee in an amount that the Secretary determines is sufficient to cover applicable administrative expenses (including any costs associated with third-party consultants engaged by the Secretary). (2) AvailabilityFees collected under this subsection shall—(A) be deposited by the Secretary into the Treasury; and (B) remain available until expended, subject to such other conditions as are contained in annual appropriations Acts. (3) Reduction in fee amountNotwithstanding paragraph (1) and subject to the availability of appropriations, the Secretary may reduce the amount of a fee for a guarantee under this subsection. (i) Records; audits(1) In generalA recipient of a guarantee shall keep such records and other pertinent documents as the Secretary shall prescribe by regulation, including such records as the Secretary may require to facilitate an effective audit. (2) AccessThe Secretary and the Comptroller General of the United States, or their duly authorized representatives, shall have access, for the purpose of audit, to the records and other pertinent documents. (j) Full faith and creditThe full faith and credit of the United States is pledged to the payment of all guarantees issued under this section with respect to principal and interest. (k) Wage rate requirementsAll laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by a loan guaranteed under this subchapter shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40. With respect to the labor standards in this subsection, the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40. (l) Restructuring of loan guaranteesThe Secretary shall consult with the Secretary of the Treasury regarding any restructuring of the terms or conditions of a guarantee issued pursuant to this subchapter, including with respect to any deviations from the financial terms of the guarantee. (m) Written analysis(1) RequirementThe Secretary may not make a guarantee under this subchapter until the Secretary of the Treasury has transmitted to the Secretary, and the Secretary has taken into consideration, a written analysis of the financial terms and conditions of the proposed guarantee. (2) TransmissionNot later than 30 days after receiving information on a proposed guarantee from the Secretary, the Secretary of the Treasury shall transmit the written analysis of the financial terms and conditions of the proposed guarantee required under paragraph (1) to the Secretary. (3) ExplanationIf the Secretary makes a guarantee the financial terms and conditions of which are not consistent with the written analysis required under this subsection, not later than 30 days after making such guarantee, the Secretary shall submit to the Committee on Energy and Commerce and the Committee on Science, Space, and Technology of the House of Representatives, and the Committee on Energy and Natural Resources of the Senate, a written explanation of any material inconsistencies. (n) Application status(1) RequestIf the Secretary does not make a final decision on an application for a guarantee under this subchapter by the date that is 180 days after receipt of the application by the Secretary, the applicant may request, on or after that date and not more than once every 60 days thereafter until a final decision is made, that the Secretary provide to the applicant a response described in paragraph (2). (2) ResponseNot later than 10 days after receiving a request from an applicant under paragraph (1), the Secretary shall provide to the applicant a response that includes—(A) a description of the current status of review of the application; (B) a summary of any factors that are delaying a final decision on the application, a list of what items are required in order to reach a final decision, citations to authorities stating the reasons why such items are required, and a list of actions the applicant can take to expedite the process; and (C) an estimate of when a final decision on the application will be made. (o) OutreachIn carrying out this subchapter, the Secretary shall—(1) provide assistance with the completion of applications for a guarantee under this subchapter; (2) conduct outreach, including through conferences and online programs, to disseminate information to potential applicants; (3) conduct outreach to encourage participation of supporting finance institutions and private lenders in eligible projects and projects described in section 16517(a) of this title. (p) CoordinationIn carrying out this subchapter, the Secretary shall coordinate activities under this subchapter with activities of other relevant offices with the Department. (q) ReportNot later than 2 years after December 27, 2020, and every 3 years thereafter, the Secretary shall submit to Congress a report on the status of applications for, and projects receiving, guarantees under this title, including—(1) a list of such projects, including the guarantee amount, construction status, and financing partners of each such project; (2) the status of each such project’s loan repayment, including interest paid and future repayment projections; (3) an estimate of the air pollutant or greenhouse gas emissions avoided or reduced from each such project; (4) data regarding the number of direct and indirect jobs retained, restored, or created by such projects; (5) identification of—(A) technologies deployed by projects that have received guarantees that have subsequently been deployed commercially without guarantees; and (B) novel technologies that have been deployed by such projects and deployed in the commercial energy market; (6) the number of new projects projected to receive a guarantee under this subchapter during the next 2 years and the aggregate guarantee amount; (7) the number of outreach engagements conducted with potential applicants; (8) the number of applications received and currently pending for each open solicitation; and (9) any other metrics the Secretary finds appropriate. (r) 11 So in original. Two subsecs. (r) have been enacted. Conflicts of interestFor each project selected for a guarantee under this subchapter, the Secretary shall certify that political influence did not impact the selection of the project. (r) 1 State energy financing institutions(1) EligibilityTo be eligible for a guarantee under this subchapter, a project receiving financial support or credit enhancements from a State energy financing institution—(A) shall meet the requirements of section 16513(a)(1) of this title; and (B) shall not be required to meet the requirements of section 16513(a)(2) of this title. (2) Partnerships authorizedIn carrying out a project receiving a loan guarantee under this subchapter, State energy financing institutions may enter into partnerships with private entities, Tribal entities, and Alaska Native corporations.

42 U.S.C. § 16513 Eligible projects

(a) In generalThe Secretary may make guarantees under this section only for projects that—(1) avoid, reduce, utilize, 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, including projects that employ elements of commercial technologies in combination with new or significantly improved technologies. (b) CategoriesProjects from the following categories shall be eligible for a guarantee under this section:(1) Renewable energy systems. (2) Advanced fossil energy technology (including coal gasification meeting the criteria in subsection (d)). (3) Hydrogen fuel cell technology for residential, industrial, or transportation applications. (4) Advanced nuclear energy facilities, including manufacturing of nuclear supply components for advanced nuclear reactors. (5) Carbon capture, utilization, and sequestration practices and technologies, including—(A) agricultural and forestry practices that store and sequester carbon; and (B) synthetic technologies to remove carbon from the air and oceans. (6) Efficient electrical generation, transmission, and distribution technologies. (7) Efficient end-use energy technologies. (8) Production facilities for the manufacture of fuel efficient vehicles or parts of those vehicles, including electric drive vehicles and advanced diesel vehicles. (9) Pollution control equipment. (10) Refineries, meaning facilities at which crude oil is refined into gasoline. (11) Energy storage technologies for residential, industrial, transportation, and power generation applications. (12) Technologies or processes for reducing greenhouse gas emissions from industrial applications, including iron, steel, cement, and ammonia production, hydrogen production, and the generation of high-temperature heat. (13) Projects that increase the domestically produced supply of critical minerals (as defined in section 1606(a) of title 30), including through the production, processing, manufacturing, recycling, or fabrication of mineral alternatives. (c) Gasification projectsThe Secretary may make guarantees for the following gasification projects:(1) Integrated gasification combined cycle projectsIntegrated gasification combined cycle plants meeting the emission levels under subsection (d), including—(A) projects for the generation of electricity—(i) for which, during the term of the guarantee—(I) coal, biomass, petroleum coke, or a combination of coal, biomass, and petroleum coke will account for at least 65 percent of annual heat input; and (II) electricity will account for at least 65 percent of net useful annual energy output; (ii) that have a design that is determined by the Secretary to be capable of accommodating the equipment likely to be necessary to capture the carbon dioxide that would otherwise be emitted in flue gas from the plant; (iii) that have an assured revenue stream that covers project capital and operating costs (including servicing all debt obligations covered by the guarantee) that is approved by the Secretary and the relevant State public utility commission; and (iv) on which construction commences not later than the date that is 3 years after the date of the issuance of the guarantee; (B) a project to produce energy from coal (of not more than 13,000 Btu/lb and mined in the western United States) using appropriate advanced integrated gasification combined cycle technology that minimizes and offers the potential to sequester carbon dioxide emissions and that—(i) may include repowering of existing facilities; (ii) may be built in stages; (iii) shall have a combined output of at least 100 megawatts; (iv) shall be located in a western State at an altitude greater than 4,000 feet; and (v) shall demonstrate the ability to use coal with an energy content of not more than 9,000 Btu/lb; (C) a project located in a taconite-producing region of the United States that is entitled under the law of the State in which the plant is located to enter into a long-term contract approved by a State public utility commission to sell at least 450 megawatts of output to a utility; (D) facilities that—(i) generate one or more hydrogen-rich and carbon monoxide-rich product streams from the gasification of coal or coal waste; and (ii) use those streams to facilitate the production of ultra clean premium fuels through the Fischer-Tropsch process; and (E) a project to produce energy and clean fuels, using appropriate coal liquefaction technology, from Western bituminous or subbituminous coal, that—(i) is owned by a State government; and (ii) may include tribal and private coal resources. (2) Industrial gasification projectsFacilities that gasify coal, biomass, or petroleum coke in any combination to produce synthesis gas for use as a fuel or feedstock and for which electricity accounts for less than 65 percent of the useful energy output of the facility. (3) Petroleum coke gasification projectsThe Secretary is encouraged to make loan guarantees under this subchapter available for petroleum coke gasification projects. (4) Liquefaction projectNotwithstanding any other provision of law, funds awarded under the Department of Energy’s Clean Coal Power Initiative for Fischer-Tropsch coal-to-oil liquefaction projects may be used to finance the cost of loan guarantees for projects awarded such funds. (d) Emission levelsIn addition to any other applicable Federal or State emission limitation requirements, a project shall attain at least—(1) total sulfur dioxide emissions in flue gas from the project that do not exceed 0.05 lb/MMBtu; (2) a 90-percent removal rate (including any fuel pretreatment) of mercury from the coal-derived gas, and any other fuel, combusted by the project; (3) total nitrogen oxide emissions in the flue gas from the project that do not exceed 0.08 lb/MMBtu; and (4) total particulate emissions in the flue gas from the project that do not exceed 0.01 lb/MMBtu. (e) Qualification of facilities receiving tax creditsA project that receives tax credits for clean coal technology shall not be disqualified from receiving a guarantee under this subchapter. (f) Regional variationNotwithstanding subsection (a)(2), the Secretary may, if regional variation significantly affects the deployment of a technology, make guarantees under this subchapter for up to 6 projects that employ the same or similar technology as another project, provided no more than 2 projects that use the same or a similar technology are located in the same region of the United States.

42 U.S.C. § 16514 Authorization of appropriations

(a) In generalThere are authorized to be appropriated such sums as are necessary to provide the cost of guarantees under this subchapter. (b) Use of other appropriated fundsThe Department may use amounts awarded under the Clean Coal Power Initiative to carry out the project described in section 16513(c)(1)(C) of this title, on the request of the recipient of such award, for a loan guarantee, to the extent that the amounts have not yet been disbursed to, or have been repaid by, the recipient. (c) Administrative and other expensesThere are authorized to be appropriated—(1) $32,000,000 for each of fiscal years 2021 through 2025 to carry out this subchapter; and (2) for fiscal year 2021, in addition to amounts authorized under paragraph (1), $25,000,000, to remain available until expended, for administrative expenses described in section 16512(h)(1) of this title that are not covered by fees collected pursuant to section 16512(h) of this title.

42 U.S.C. § 16515 Limitation on commitments to guarantee loans

(a) Notwithstanding section 101,11 See References in Text note below. subject to the Federal Credit Reform Act of 1990, as amended [2 U.S.C. 661 et seq.], commitments to guarantee loans under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] shall not exceed a total principal amount, any part of which is to be guaranteed, of $4,000,000,000: Provided, That there are appropriated for the cost of the guaranteed loans such sums as are hereafter derived from amounts received from borrowers pursuant to section 16512(b)(2) of this title, to remain available until expended: Provided further, That the source of payments received from borrowers for the subsidy cost shall not be a loan or other debt obligation that is made or guaranteed by the Federal government.22 So in original. Probably should be capitalized. In addition, fees collected pursuant to section 16512(h) of this title in fiscal year 2007 shall be credited as offsetting collections to the Departmental Administration account for administrative expenses of the Loan Guarantee Program: Provided further, That the sum appropriated for administrative expenses for the Loan Guarantee Program shall be reduced by the amount of fees received during fiscal year 2007: Provided further, That any fees collected under section 16512(h) of this title in excess of the amount appropriated for administrative expenses shall not be available until appropriated. (b) No loan guarantees may be awarded under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] until final regulations are issued that include—(1) programmatic, technical, and financial factors the Secretary will use to select projects for loan guarantees; (2) policies and procedures for selecting and monitoring lenders and loan performance; and (3) any other policies, procedures, or information necessary to implement title XVII of the Energy Policy Act of 2005. (c) The Secretary of Energy shall enter into an arrangement with an independent auditor for annual evaluations of the program under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.]. In addition to the independent audit, the Comptroller General shall conduct a review every three years of the Department’s execution of the program under title XVII of the Energy Policy Act of 2005. The results of the independent audit and the Comptroller General’s review shall be provided directly to the Committees on Appropriations of the House of Representatives and the Senate. (d) The Secretary of Energy shall promulgate final regulations for loan guarantees under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16501 et seq.] within 6 months of February 15, 2007. (e) Not later than 120 days after February 15, 2007, and annually thereafter, the Secretary of Energy shall transmit to the Committees on Appropriations of the House of Representatives and the Senate a report containing a summary of all activities under title XVII of the Energy Policy Act of 2005 [42 U.S.C. 16511 et seq.], beginning in fiscal year 2007, with a listing of responses to loan guarantee solicitations under such title, describing the technologies, amount of loan guarantee sought, and the applicants’ assessment of risk.

42 U.S.C. § 16517 Energy infrastructure reinvestment financing

(a) In generalNotwithstanding section 16513 of this title, the Secretary may make guarantees, including refinancing, under this section only for projects that—(1) retool, repower, repurpose, or replace energy infrastructure that has ceased operations; (2) enable operating energy infrastructure to increase capacity or output; or (3) support or enable the provision of known or forecastable electric supply at time intervals necessary to maintain or enhance grid reliability or other system adequacy needs. (b) InclusionA project under subsection (a) may include the remediation of environmental damage associated with energy infrastructure. (c) ApplicationTo apply for a guarantee under this section, an applicant shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including—(1) a detailed plan describing the proposed project; and (2) in the case of an applicant that is an electric utility, an assurance that the electric utility shall pass on any financial benefit from the guarantee made under this section to the customers of, or associated communities served by, the electric utility. (d) TermNotwithstanding section 16512(f) of this title, the term of an obligation shall require full repayment over a period not to exceed 30 years. (e) Definition of energy infrastructureIn this section, the term “energy infrastructure” means a facility, and associated equipment, used for enabling the identification, leasing, development, production, processing, transportation, transmission, refining, and generation needed for energy and critical minerals. (f) Funding(1) In generalIn addition to amounts otherwise available, there is appropriated to the Secretary for fiscal year 2025, out of any money in the Treasury not otherwise appropriated, $1,000,000,000, to remain available through September 30, 2028, to carry out activities under this section. (2) Administrative costsOf the amount made available under paragraph (1), the Secretary shall use not more than 3 percent for administrative expenses.