Section 1 Short title
This Act may be cited as the “Facilitating the Reshoring of Energy Grid Component Manufacturing Act of 2022”.
Facilitating the Reshoring of Energy Grid Component Manufacturing Act of 2022
A BILL
To require the Secretary of Energy to establish a program to provide loans to manufacturers of energy grid products and components.
Sec. 2 Energy grid product and component manufacturing in the United States
Definitions— In this section:
Component— The term component means any part or element of an energy grid product.
Eligible project— The term eligible project means a project to reequip, expand, or establish (including through new construction) a manufacturing facility in the United States to produce energy grid products or components.
Energy grid product— The term energy grid product means—
a bulk-power system (as defined in section 215(a) of the Federal Power Act (16 U.S.C. 824o(a)));
a large power transformer;
a switchgear or breaker;
a converter;
a direct current filter;
an alternating current switch or switchyard;
an insulated-gate bipolar transistor;
a capacitor;
an inductor;
an arrestor;
a resistor;
a distribution transformer;
grain-oriented electrical steel;
continuously transposed conduction (CTC) copper wire;
silicon steel;
any insulating material; and
any other electrical equipment commonly used for the transmission or distribution of electric energy by public electric utilities.
Secretary— The term Secretary means the Secretary of Energy.
Loan program—
Establishment—
In general— Not later than 180 days after the date of enactment of this Act, and subject to the availability of appropriated funds, the Secretary shall establish and carry out a program to provide a total of not more than $8,000,000,000 in loans to eligible individuals and entities (as determined by the Secretary) for the costs of activities relating to eligible projects.
Financing method—
In general— Except as provided in clause (ii), a loan under this subsection shall be provided through the Federal Financing Bank, with the full faith and credit of the United States Government on the principal and interest.
Cooperation with other institutions— A loan under this subsection may be provided in cooperation with 1 or more banks or other financial institutions through agreements to participate on an immediate or deferred (guaranteed) basis.
Credit subsidy— The full credit subsidy for each loan provided under this subsection shall be paid by the Secretary using appropriated funds.
Application— An individual or entity desiring a loan under this subsection shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including a written assurance that—
all laborers and mechanics employed by contractors or subcontractors during any construction, alteration, or repair that is financed, in whole or in part, by a loan provided under this subsection 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 sections 3141 through 3144, 3146, and 3147 of title 40, United States Code; and
the Secretary of Labor shall, with respect to the labor standards described in this paragraph, have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App.) and section 3145 of title 40, United States Code.
Selection of loan recipients and eligible projects—
In general— The Secretary may provide a loan under this subsection if the Secretary determines that—
the loan recipient—
has a reasonable prospect of repaying the principal and interest on the loan;
will provide sufficient information to the Secretary for the Secretary to ensure that the loan proceeds are expended efficiently and effectively; and
has met such other criteria as may be established and published by the Secretary; and
the amount of the loan (when combined with amounts available to the loan recipient from other sources) will be sufficient to carry out the eligible project for which the loan is provided.
Reasonable prospect of repayment— The Secretary shall base a determination of whether there is a reasonable prospect of repayment of the principal and interest on a loan under subparagraph (A)(i)(I) on a comprehensive evaluation of whether the loan recipient has a reasonable prospect of repaying the principal and interest, including, as applicable, an evaluation of—
the strength of the contractual terms of the applicable eligible project (if commercially reasonably available);
the forecast of noncontractual cash flows supported by market projections from reputable sources, as determined by the Secretary;
cash sweeps and other structure enhancements;
the projected financial strength of the loan recipient—
at the time of loan close; and
throughout the loan term after the applicable eligible project is completed;
the financial strength of the investors and strategic partners of the loan recipient, if applicable; and
other financial metrics and analyses that are relied on by the private lending community and nationally recognized credit rating agencies, as determined to be appropriate by the Secretary.
Rates, terms, and repayment of loans— A loan provided under this subsection—
shall have an interest rate that, as of the date on which the loan is provided, is equal to the cost of funds to the Department of the Treasury for obligations of comparable maturity;
shall have a term equal to the lesser of—
the projected life, in years, of the eligible project to be carried out using proceeds from the loan, as determined by the Secretary; and
20 years;
may be subject to a deferral in repayment for not more than 5 years after the date on which the eligible project carried out using proceeds from the loan first begins operations, as determined by the Secretary;
shall be made by the Federal Financing Bank; and
shall be subject to the condition that the loan is not subordinate to other financing.
Conflicts of interest— For each loan provided under this subsection, the Secretary shall certify that political influence did not affect the provision of the loan, including—
selection of the eligible project for which the loan was provided; and
selection of the loan recipient.
Administrative fee— The Secretary may charge a fee for the administrative and closing costs of a loan provided under this subsection, subject to the condition that the fee does not exceed the lesser of—
$100,000; and
10 basis points of the principal amount of the loan.
Improvement— Not later than 90 days after the date of enactment of this Act, the Secretary shall promulgate an interim final rule establishing regulations that the Secretary determines to be necessary to administer this section and any loans provided by the Secretary under subsection (b).
Priority—
In general— In providing loans under this section to manufacturers (including component suppliers) that have existing facilities, the Secretary shall give priority to manufacturers that are seeking to expand manufacturing output through—
the establishment of 1 or more new facilities; or
the reopening of 1 or more facilities.
Idle facilities— A facility described in subparagraph (A) or (B) of paragraph (1) may be sitting idle as of the date on which the applicable loan is provided under this section.
Set aside for small energy grid product manufacturers and component suppliers—
Definition of covered firm— In this subsection, the term covered firm means a firm that—
employs fewer than 500 individuals; and
manufactures energy grid products or components.
Set aside— Of the amounts used to provide loans each fiscal year under subsection (b), the Secretary shall use not less than 5 percent to provide loans to—
covered firms; or
consortia led by covered firms.
Appointment and pay of personnel—
In general— The Secretary may use direct hiring authority pursuant to section 3304(a)(3) of title 5, United States Code, to appoint such professional and administrative personnel as the Secretary determines to be necessary to carry out this section and any functions of the Secretary under this section.
Rate of pay— The rate of pay for a person appointed pursuant to paragraph (1) shall not exceed the maximum rate payable for GS–15 of the General Schedule under chapter 53 of title 5, United States Code.
Consultants— The Secretary may retain, pursuant to section 1901 of title 41, United States Code, such consultants as the Secretary determines to be necessary to carry out this section and any functions of the Secretary under this section.
Outreach— In carrying out this section, the Secretary shall—
provide assistance with the completion of applications for loans under this section; and
conduct outreach, including through conferences and online programs, to disseminate information about loans under this section to potential applicants.
Report— Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Secretary shall submit to Congress a report on the status of projects supported by a loan under this section, including—
a list of projects for which a loan was provided under this section, including, with respect to each project—
the loan amount; and
the construction status of the project;
the status of the loan repayment for each project, including future repayment projections;
data regarding the number of direct and indirect jobs retained, restored, or created by financed projects;
a projection of the number of new projects for which the Secretary expects to provide a loan under this section during the 2-year period beginning on the date of the report, including the projected aggregate loan amount over that 2-year period;
an evaluation of ongoing compliance with the assurances and commitments (and the accuracy of any predictions) made by applicants pursuant to paragraphs (2) and (3) of subsection (b);
the total number of applications received by the Secretary each year; and
any other metrics that the Secretary determines to be appropriate.
Funding—
Rescission— Of the unobligated balance of amounts made available by section 129 of division A of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (Public Law 110–329; 122 Stat. 3578), $2,400,000,000 are rescinded.
Direct appropriation— If sufficient unobligated amounts made available by section 129 of division A of the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009 (Public Law 110–329; 122 Stat. 3578), are available on the date of enactment of this Act to execute the entire rescission described in paragraph (1), on the day after the execution of the entire rescission, there is appropriated to the Secretary, out of amounts in the Treasury not otherwise appropriated, $2,400,000,000 to carry out this section, to remain available until expended.