To authorize the Secretary of Energy to make price floor loans to certain low-carbon coal-to-liquid fuel projects.

Amends the Energy Policy Act of 2005 to authorize the Secretary of Energy to enter into agreements, in the form of price floor loans, with up to six low-carbon CTL projects (that convert coal to liquid or gaseous transportation fuels) to guarantee each project a minimum price for its output of liquid or gaseous transportation fuels in return for: (1) payment to the United States of the cost of such loan; or (2) at the borrower's election, a call option for the United States equivalent in value to such payment.

Prohibits any agreement for a price floor loan unless the Office of Management and Budget (OMB) determines that the loan cost is fully offset by either certain payments or by the value of a call option.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6249 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 6249

   To authorize the Secretary of Energy to make price floor loans to 
            certain low-carbon coal-to-liquid fuel projects.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2006

  Mr. Shimkus (for himself and Mr. Boucher) introduced the following 
 bill; which was referred to the Committee on Energy and Commerce, and 
      in addition to the Committee on Science, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
   To authorize the Secretary of Energy to make price floor loans to 
            certain low-carbon coal-to-liquid fuel projects.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. LOW-CARBON COAL-TO-LIQUIDS PROJECTS.

    Section 1702 of the Energy Policy Act of 2005 (42 U.S.C. 16512) is 
amended by adding at the end thereof the following new subsection:
    ``(k) Low-Carbon CTL Projects.--(1)(A) The Secretary may enter into 
an agreement (in the form of a price floor loan) with no more than 6 
low-carbon CTL projects to guarantee each project a minimum price for 
its output of liquid or gaseous transportation fuels in return for--
                    ``(i) payment to the United States of the cost of 
                such loan (determined under 502(5)(B) of the Federal 
                Credit Reform Act of 1990); or
                    ``(ii) at the election of the borrower, a call 
                option for the United States equivalent in value to 
                such payment.
    ``(B) No agreement for a price floor loan may be entered into under 
this subsection unless the Office of Management and Budget determines 
that the cost of such loan is fully offset by a payment under 
subparagraph (A)(i) or by the value of a call option under subparagraph 
(A)(ii).
    ``(2) For purposes of this subsection:
            ``(A) The term `call option' means a call option for the 
        United States under which a price floor loan borrower has a 
        contractual obligation to make payments to the United States in 
        addition to any repayments of the price floor loan. Such call 
        option payments in any period shall be equal to the excess of 
        the petroleum market price over the payback price, less any 
        loan payments made in that period.
            ``(B) The term `low-carbon CTL project' means a commercial-
        scale project that converts coal to one or more liquid or 
        gaseous transportation fuels, is designed to demonstrate and, 
        if determined to be appropriate, demonstrates the capture and 
        sequestration or disposal or use of an agreed upon portion of 
        the carbon dioxide produced in the conversion process.
            ``(C) The term `output' means some or all of the liquid or 
        gaseous transportation fuels produced from the project.
            ``(D) The term `price floor loan' means an obligation to 
        make a nonrecourse direct loan to a low-carbon CTL project 
        under which--
                    ``(i) disbursement is made during any period if, 
                and to the extent, a specified petroleum market price 
                index falls below a floor price specified in the loan 
                agreement; and
                    ``(ii) repayment (with interest) is made during any 
                period if, and to the extent, such market price index 
                is above a payback price specified in the loan 
                agreement.
    ``(3) Subsections (f), (h), and (j) of this section shall apply to 
price floor loans to the same extent they apply to loan guarantees. The 
value to the Government of any call option determined under paragraph 
(1)(B) shall be taken into account for purposes of section 
502(5)(B)(iii) of the Federal Credit Reform Act of 1990 in determining 
the cost to the Federal Government of a price floor loan. If a price 
floor loan has no cost to the Federal Government, the requirements of 
section 504(b) of such Act shall be deemed to be satisfied.''.
                                 <all>