S. 3402 (111th): REAL Act of 2010

111th Congress, 2009–2010. Text as of May 24, 2010 (Introduced).

Status & Summary | PDF | Source: GPO

II

111th CONGRESS

2d Session

S. 3402

IN THE SENATE OF THE UNITED STATES

May 24, 2010

introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To encourage residential use of renewable energy systems by minimizing upfront costs and providing immediate utility cost savings to consumers through leasing of such systems to homeowners, and for other purposes.

1.

Short title

This Act may be cited as the Renewable Energey Access Through Leasing Act of 2010 or the REAL Act of 2010.

2.

Insurance coverage for loans for financing of renewable energy systems leased for residential use

(a)

Purposes

The purposes of this section are—

(1)

to encourage residential use of renewable energy systems by minimizing upfront costs and providing immediate utility cost savings to consumers through leasing of such systems to homeowners;

(2)

to reduce carbon emissions and the use of nonrenewable resources;

(3)

to encourage energy efficient residential construction and rehabilitation;

(4)

to encourage the use of renewable resources by homeowners;

(5)

to minimize the impact of development on the environment;

(6)

to reduce consumer utility costs; and

(7)

to encourage private investment in the green economy.

(b)

Definitions

As used in this section, the following definitions shall apply:

(1)

Authorized renewable energy lender

The term authorized renewable energy lender means a lender authorized by the Secretary to make a loan under this section.

(2)

Renewable energy system lease

The term renewable system energy lease means an agreement between an authorized renewable energy system owner and a homeowner for a term of not less than 5 years, pursuant to which the homeowner—

(A)

grants an easement to such renewable energy system owner to install, maintain, use, and otherwise access the renewable energy system; and

(B)

agrees to—

(i)

lease the use of such system from such renewable energy system owner; or

(ii)

purchase electric power from such renewable energy system owner.

(3)

Renewable energy manufacturer

The term renewable energy manufacturer means a manufacturer of renewable energy systems.

(4)

Renewable energy system owner

The term renewable energy system owner means a homebuilder, a manufacturer or installer of a renewable energy system, or any other person, as determined by the Secretary.

(5)

Renewable energy system

The term renewable energy system means a system of energy derived from—

(A)

a wind, solar (including photovoltaic and solar thermal), biomass (including biodiesel), or geothermal source; or

(B)

hydrogen derived from biomass or water using an energy source described in subparagraph (A).

(6)

Secretary

The term Secretary means the Secretary of Housing and Urban Development.

(c)

Authority

(1)

In general

The Secretary may, upon application by an authorized renewable energy system owner, insure or make a commitment to insure a loan made by an authorized renewable energy lender to a renewable energy system owner to finance the acquisition of a renewable energy system for lease to a homeowner for use at the residence of such homeowner.

(2)

Terms and conditions

The Secretary may prescribe such terms and conditions for insurance under paragraph (1) as are consistent with the purposes of this section.

(d)

Limitation on principal amount

(1)

Limitation

The principal amount of a loan insured under this section shall not exceed the residual value of the renewable energy system to be acquired with the loan.

(2)

Residual value

For purposes of this subsection—

(A)

the residual value of a renewable energy system is the fair market value of the future revenue stream from the sale of the expected remaining electricity production from the system, pursuant to the easement granted in accordance with subsection (e); and

(B)

the fair market value of the future revenue stream for each year of the remaining life of the renewable energy system shall be determined based on the net present value of the power output production warranty for such renewable energy system provided by the renewable energy manufacturer and the forecast of regional residential electricity prices made by the Energy Information Administration of the Department of Energy.

(e)

Easement

The Secretary may not insure a loan under this section unless the renewable energy system owner certifies, in accordance with such requirements as the Secretary shall establish, consistent with the purposes of this section, that the systems financed will be leased only to homeowners that grant easements to install, maintain, use, and otherwise access the system that include the right to sell electricity produced during the life of the renewable energy system to a wholesale or retail electrical power grid.

(f)

Discount or prepayment

To encourage the use of renewable energy systems, the Secretary shall ensure that a discount given to a homeowner by a renewable energy system owner or other investor or prepayment of a renewable energy system lease by a renewable energy system owner does not adversely affect the mortgage requirements of such homeowner.

(g)

Eligibility of lenders

The Secretary may not insure a loan under this section unless the lender making the loan—

(1)

is an institution that—

(A)

qualifies as a green banking center under section 8(x) of the Federal Deposit Insurance Act (12 U.S.C. 1818(x)) or section 206(x) of the Federal Credit Union Act (12 U.S.C. 1786(x)); or

(B)

meets such other requirements as the Secretary shall establish for participation of renewable energy lenders in the program under this section; and

(2)

meets such qualifications as the Secretary shall establish for all lenders for participation in the program under this section.

(h)

Certificate of insurance

(1)

In general

The Secretary shall issue to a lender that is insured under this section a certificate that serves as evidence of insurance coverage under this section.

(2)

Contents of certificate

The certificate required under paragraph (1) shall set forth the fair market value of the future revenue stream for each year of the remaining life of the renewable energy system.

(3)

Full Faith and Credit

The certificate required under paragraph (1) shall be backed by the full faith and credit of the United States.

(i)

Payment of insurance claim

(1)

Filing of claim

The Secretary shall provide for the filing of claims for insurance under this section and the payment of such claims.

(2)

Payment of claim

A claim under paragraph (1) may be paid only upon a default under the loan insured under this section and the assignment, transfer, and delivery to the Secretary of—

(A)

all rights and interests arising under the loan; and

(B)

all claims of the lender or the assigns of the lender against the borrower or others arising under the loan transaction.

(3)

Lien

(A)

In general

Upon payment of a claim for insurance of a loan under this section, the Secretary shall hold a lien on the underlying renewable energy system assets and any associated revenue stream from the use of such system, which shall be superior to all other liens on such assets.

(B)

Residual value

The residual value of such renewable energy system and the revenue stream from the use of such system shall be not less than the unpaid balance of the loan amount covered by the certificate of insurance.

(C)

Revenue from sale

The Secretary shall be entitled to any revenue generated by such renewable energy system from selling electricity to the grid when an insurance claim has been paid out.

(j)

Assignment and transferability of insurance

A renewable energy system owner or an authorized renewable energy lender that is insured under this section may assign or transfer the insurance in whole or in part, to another owner or lender, subject to such requirements as the Secretary may prescribe.

(k)

Premiums and charges

(1)

Insurance premiums

(A)

In general

The Secretary shall fix and collect premiums for insurance of loans under this section, that shall be paid by the applicant renewable energy system owner at the time of issuance of the certificate of insurance to the lender and shall be adequate, in the determination of the Secretary, to cover the expenses and probable losses of administering the program under this section.

(B)

Deposit of premium

The Secretary shall deposit any premiums collected under this subsection in the Renewable Energy Lease Insurance Fund established under subsection (l).

(2)

Prohibition on other charges

Except as provided in paragraph (1), the Secretary may not assess any other fee (including a user fee), insurance premium, or charge in connection with loan insurance provided under this section.

(l)

Renewable Energy Lease Insurance Fund

(1)

Fund Established

There is established in the Treasury of the United States the Renewable Energy Lease Insurance Fund (referred to in this subsection as the Fund), which shall be available to the Secretary without fiscal year limitation, for the purpose of providing insurance under this section.

(2)

Credits

The Fund shall be credited with any premiums collected under subsection (k)(1), any amounts collected by the Secretary under subsection (i)(3), and any associated interest or earnings.

(3)

Availability

Amounts in the Fund shall be available to the Secretary for fulfilling any obligations with respect to insurance for loans provided under this section and paying administrative expenses in connection with this section.

(4)

Excess amounts

The Secretary may invest in obligations of the United States any amounts in the Fund determined by the Secretary to be in excess of amounts required at the time of such determination to carry out this section.

(m)

Regulations

(1)

In general

The Secretary shall issue such regulations as may be necessary to carry out this section.

(2)

Timing

Not later than 180 days after the date of enactment of this Act, the Secretary shall issue interim or final regulations.

(n)

Ineligibility for Purchase by Federal Financing Bank

Notwithstanding any other provision of law, no debt obligation that is insured or committed to be insured by the Secretary under this section shall be subject to the Federal Financing Bank Act of 1973 (12 U.S.C. 2281 et seq.).

(o)

Termination of authority

The authority of the Secretary to insure and make commitments to insure new loans under this Act shall terminate 10 years after the date of enactment of this Act.