What This Bill Does
The bill requires the Secretary of Energy to create a loan program that gives out up to $8 billion to manufacturers. The money goes toward building, expanding, or reopening factories in the United States that make energy grid products and parts. The bill is called the "Facilitating the Reshoring of Energy Grid Component Manufacturing Act of 2023."
Who It Affects
Manufacturers of energy grid products and components, including small businesses with fewer than 500 employees. The Department of Energy. Banks and other financial institutions that may partner on loans. Workers on construction projects funded by these loans. Congress, which receives reports on the program.
Key Provisions
Loans will be made through the Federal Financing Bank (a government lending institution) with the full backing of the U.S. Government. The government will pay all costs associated with each loan's credit subsidy (the difference between what borrowers pay and what it costs the government). Interest rates on loans will equal what the U.S. Treasury pays for loans of similar length. (Sec. 2(b))
The Secretary of Energy must set up the program within 180 days and create rules within 90 days to run it. (Sec. 2(b) and Sec. 2(c))
Loan terms cannot exceed 20 years, or the expected life of the project being funded, whichever is shorter. Repayment can be delayed up to 5 years after a project starts operating. (Sec. 2(b)(4))
Workers on projects funded by these loans must receive the prevailing wage (the standard pay for similar construction work in that area). (Sec. 2(b)(2)(A))
At least 5 percent of loan money each year must go to small manufacturers (fewer than 500 employees) or groups led by small manufacturers. (Sec. 2(e)(2))
The Secretary must certify that politics did not influence loan decisions. (Sec. 2(b)(5))
The Secretary must report to Congress every 2 years on loan status, projects funded, job creation, and loan repayment progress. (Sec. 2(h))
What Changes
The federal government will now have a new loan program specifically for manufacturers making equipment used in the electrical power system. Manufacturers can borrow government money instead of relying only on private banks. Priority is given to companies opening new facilities or reopening closed ones. Small manufacturers get guaranteed access to at least 5 percent of available loans each year.
Important Definitions
"Energy grid product" means equipment used to transmit or distribute electricity, including power transformers, switches, copper wire, steel for transformers, and similar electrical equipment.
"Component" means any part or piece of an energy grid product.
"Eligible project" means building, expanding, or reopening a manufacturing facility in the United States to make energy grid products or components.
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 34
To require the Secretary of Energy to establish a program to provide loans
to manufacturers of energy grid products and components.
IN THE SENATE OF THE UNITED STATES
JANUARY 24 (legislative day, JANUARY 3), 2023
Mr. RUBIO introduced the following bill; which was read twice and referred
to the Committee on Energy and Natural Resources
A BILL
To require the Secretary of Energy to establish a program
to provide loans to manufacturers of energy grid prod-
ucts and components.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Facilitating the Re-
4
shoring of Energy Grid Component Manufacturing Act of
5
2023’’.
6
SEC. 2. ENERGY GRID PRODUCT AND COMPONENT MANU-
7
FACTURING IN THE UNITED STATES.
8
(a) DEFINITIONS.—In this section:
9
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(1)
COMPONENT.—The
term
‘‘component’’
1
means any part or element of an energy grid prod-
2
uct.
3
(2) ELIGIBLE
PROJECT.—The term ‘‘eligible
4
project’’ means a project to reequip, expand, or es-
5
tablish (including through new construction) a man-
6
ufacturing facility in the United States to produce
7
energy grid products or components.
8
(3) ENERGY GRID PRODUCT.—The term ‘‘en-
9
ergy grid product’’ means—
10
(A) a bulk-power system (as defined in sec-
11
tion 215(a) of the Federal Power Act (16
12
U.S.C. 824o(a)));
13
(B) a large power transformer;
14
(C) a switchgear or breaker;
15
(D) a converter;
16
(E) a direct current filter;
17
(F) an alternating current switch or
18
switchyard;
19
(G) an insulated-gate bipolar transistor;
20
(H) a capacitor;
21
(I) an inductor;
22
(J) an arrestor;
23
(K) a resistor;
24
(L) a distribution transformer;
25
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(M) grain-oriented electrical steel;
1
(N) continuously transposed conduction
2
(CTC) copper wire;
3
(O) silicon steel;
4
(P) any insulating material; and
5
(Q) any other electrical equipment com-
6
monly used for the transmission or distribution
7
of electric energy by public electric utilities.
8
(4) SECRETARY.—The term ‘‘Secretary’’ means
9
the Secretary of Energy.
10
(b) LOAN PROGRAM.—
11
(1) ESTABLISHMENT.—
12
(A) IN
GENERAL.—Not later than 180
13
days after the date of enactment of this Act,
14
and subject to the availability of appropriated
15
funds, the Secretary shall establish and carry
16
out a program to provide a total of not more
17
than $8,000,000,000 in loans to eligible individ-
18
uals and entities (as determined by the Sec-
19
retary) for the costs of activities relating to eli-
20
gible projects.
21
(B) FINANCING METHOD.—
22
(i) IN GENERAL.—Except as provided
23
in clause (ii), a loan under this subsection
24
shall be provided through the Federal Fi-
25
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nancing Bank, with the full faith and cred-
1
it of the United States Government on the
2
principal and interest.
3
(ii) COOPERATION WITH OTHER INSTI-
4
TUTIONS.—A loan under this subsection
5
may be provided in cooperation with 1 or
6
more banks or other financial institutions
7
through agreements to participate on an
8
immediate or deferred (guaranteed) basis.
9
(C) CREDIT SUBSIDY.—The full credit sub-
10
sidy for each loan provided under this sub-
11
section shall be paid by the Secretary using ap-
12
propriated funds.
13
(2) APPLICATION.—An individual or entity de-
14
siring a loan under this subsection shall submit to
15
the Secretary an application at such time, in such
16
manner, and containing such information as the Sec-
17
retary may require, including a written assurance
18
that—
19
(A) all laborers and mechanics employed
20
by contractors or subcontractors during any
21
construction, alteration, or repair that is fi-
22
nanced, in whole or in part, by a loan provided
23
under this subsection shall be paid wages at
24
rates not less than those prevailing on projects
25
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of a character similar in the locality, as deter-
1
mined by the Secretary of Labor in accordance
2
with sections 3141 through 3144, 3146, and
3
3147 of title 40, United States Code; and
4
(B) the Secretary of Labor shall, with re-
5
spect to the labor standards described in this
6
paragraph, have the authority and functions set
7
forth in Reorganization Plan Numbered 14 of
8
1950 (5 U.S.C. App.) and section 3145 of title
9
40, United States Code.
10
(3) SELECTION OF LOAN RECIPIENTS AND ELI-
11
GIBLE PROJECTS.—
12
(A) IN
GENERAL.—The Secretary may
13
provide a loan under this subsection if the Sec-
14
retary determines that—
15
(i) the loan recipient—
16
(I) has a reasonable prospect of
17
repaying the principal and interest on
18
the loan;
19
(II) will provide sufficient infor-
20
mation to the Secretary for the Sec-
21
retary to ensure that the loan pro-
22
ceeds are expended efficiently and ef-
23
fectively; and
24
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(III) has met such other criteria
1
as may be established and published
2
by the Secretary; and
3
(ii) the amount of the loan (when
4
combined with amounts available to the
5
loan recipient from other sources) will be
6
sufficient to carry out the eligible project
7
for which the loan is provided.
8
(B) REASONABLE
PROSPECT
OF
REPAY-
9
MENT.—The Secretary shall base a determina-
10
tion of whether there is a reasonable prospect
11
of repayment of the principal and interest on a
12
loan under subparagraph (A)(i)(I) on a com-
13
prehensive evaluation of whether the loan re-
14
cipient has a reasonable prospect of repaying
15
the principal and interest, including, as applica-
16
ble, an evaluation of—
17
(i) the strength of the contractual
18
terms of the applicable eligible project (if
19
commercially reasonably available);
20
(ii) the forecast of noncontractual
21
cash flows supported by market projections
22
from reputable sources, as determined by
23
the Secretary;
24
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•S 34 IS
(iii) cash sweeps and other structure
1
enhancements;
2
(iv) the projected financial strength of
3
the loan recipient—
4
(I) at the time of loan close; and
5
(II) throughout the loan term
6
after the applicable eligible project is
7
completed;
8
(v) the financial strength of the inves-
9
tors and strategic partners of the loan re-
10
cipient, if applicable; and
11
(vi) other financial metrics and anal-
12
yses that are relied on by the private lend-
13
ing community and nationally recognized
14
credit rating agencies, as determined to be
15
appropriate by the Secretary.
16
(4) RATES,
TERMS,
AND
REPAYMENT
OF
17
LOANS.—A loan provided under this subsection—
18
(A) shall have an interest rate that, as of
19
the date on which the loan is provided, is equal
20
to the cost of funds to the Department of the
21
Treasury for obligations of comparable matu-
22
rity;
23
(B) shall have a term equal to the lesser
24
of—
25
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(i) the projected life, in years, of the
1
eligible project to be carried out using pro-
2
ceeds from the loan, as determined by the
3
Secretary; and
4
(ii) 20 years;
5
(C) may be subject to a deferral in repay-
6
ment for not more than 5 years after the date
7
on which the eligible project carried out using
8
proceeds from the loan first begins operations,
9
as determined by the Secretary;
10
(D) shall be made by the Federal Financ-
11
ing Bank; and
12
(E) shall be subject to the condition that
13
the loan is not subordinate to other financing.
14
(5) CONFLICTS OF INTEREST.—For each loan
15
provided under this subsection, the Secretary shall
16
certify that political influence did not affect the pro-
17
vision of the loan, including—
18
(A) selection of the eligible project for
19
which the loan was provided; and
20
(B) selection of the loan recipient.
21
(6) ADMINISTRATIVE FEE.—The Secretary may
22
charge a fee for the administrative and closing costs
23
of a loan provided under this subsection, subject to
24
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the condition that the fee does not exceed the lesser
1
of—
2
(A) $100,000; and
3
(B) 10 basis points of the principal
4
amount of the loan.
5
(c) IMPROVEMENT.—Not later than 90 days after the
6
date of enactment of this Act, the Secretary shall promul-
7
gate an interim final rule establishing regulations that the
8
Secretary determines to be necessary to administer this
9
section and any loans provided by the Secretary under
10
subsection (b).
11
(d) PRIORITY.—
12
(1) IN
GENERAL.—In providing loans under
13
this section to manufacturers (including component
14
suppliers) that have existing facilities, the Secretary
15
shall give priority to manufacturers that are seeking
16
to expand manufacturing output through—
17
(A) the establishment of 1 or more new fa-
18
cilities; or
19
(B) the reopening of 1 or more facilities.
20
(2) IDLE FACILITIES.—A facility described in
21
subparagraph (A) or (B) of paragraph (1) may be
22
sitting idle as of the date on which the applicable
23
loan is provided under this section.
24
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•S 34 IS
(e) SET ASIDE FOR SMALL ENERGY GRID PRODUCT
1
MANUFACTURERS AND COMPONENT SUPPLIERS.—
2
(1) DEFINITION OF COVERED FIRM.—In this
3
subsection, the term ‘‘covered firm’’ means a firm
4
that—
5
(A) employs fewer than 500 individuals;
6
and
7
(B) manufactures energy grid products or
8
components.
9
(2) SET ASIDE.—Of the amounts used to pro-
10
vide loans each fiscal year under subsection (b), the
11
Secretary shall use not less than 5 percent to pro-
12
vide loans to—
13
(A) covered firms; or
14
(B) consortia led by covered firms.
15
(f) APPOINTMENT AND PAY OF PERSONNEL.—
16
(1) IN GENERAL.—The Secretary may use di-
17
rect hiring authority pursuant to section 3304(a)(3)
18
of title 5, United States Code, to appoint such pro-
19
fessional and administrative personnel as the Sec-
20
retary determines to be necessary to carry out this
21
section and any functions of the Secretary under
22
this section.
23
(2) RATE OF PAY.—The rate of pay for a per-
24
son appointed pursuant to paragraph (1) shall not
25
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•S 34 IS
exceed the maximum rate payable for GS–15 of the
1
General Schedule under chapter 53 of title 5, United
2
States Code.
3
(3) CONSULTANTS.—The Secretary may retain,
4
pursuant to section 1901 of title 41, United States
5
Code, such consultants as the Secretary determines
6
to be necessary to carry out this section and any
7
functions of the Secretary under this section.
8
(g) OUTREACH.—In carrying out this section, the
9
Secretary shall—
10
(1) provide assistance with the completion of
11
applications for loans under this section; and
12
(2) conduct outreach, including through con-
13
ferences and online programs, to disseminate infor-
14
mation about loans under this section to potential
15
applicants.
16
(h) REPORT.—Not later than 2 years after the date
17
of enactment of this Act, and every 2 years thereafter,
18
the Secretary shall submit to Congress a report on the
19
status of projects supported by a loan under this section,
20
including—
21
(1) a list of projects for which a loan was pro-
22
vided under this section, including, with respect to
23
each project—
24
(A) the loan amount; and
25
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(B) the construction status of the project;
1
(2) the status of the loan repayment for each
2
project, including future repayment projections;
3
(3) data regarding the number of direct and in-
4
direct jobs retained, restored, or created by financed
5
projects;
6
(4) a projection of the number of new projects
7
for which the Secretary expects to provide a loan
8
under this section during the 2-year period begin-
9
ning on the date of the report, including the pro-
10
jected aggregate loan amount over that 2-year pe-
11
riod;
12
(5) an evaluation of ongoing compliance with
13
the assurances and commitments (and the accuracy
14
of any predictions) made by applicants pursuant to
15
paragraphs (2) and (3) of subsection (b);
16
(6) the total number of applications received by
17
the Secretary each year; and
18
(7) any other metrics that the Secretary deter-
19
mines to be appropriate.
20
(i) FUNDING.—
21
(1) RESCISSION.—Of the unobligated balance of
22
amounts made available by section 129 of division A
23
of the Consolidated Security, Disaster Assistance,
24
and Continuing Appropriations Act, 2009 (Public
25
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•S 34 IS
Law 110–329; 122 Stat. 3578), $2,400,000,000 are
1
rescinded.
2
(2) DIRECT APPROPRIATION.—If sufficient un-
3
obligated amounts made available by section 129 of
4
division A of the Consolidated Security, Disaster As-
5
sistance, and Continuing Appropriations Act, 2009
6
(Public Law 110–329; 122 Stat. 3578), are available
7
on the date of enactment of this Act to execute the
8
entire rescission described in paragraph (1), on the
9
day after the execution of the entire rescission, there
10
is appropriated to the Secretary, out of amounts in
11
the
Treasury
not
otherwise
appropriated,
12
$2,400,000,000 to carry out this section, to remain
13
available until expended.
14
Æ
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