July 10 (Bloomberg) -- House Republicans investigating the collapse of Solyndra LLC proposed legislation that would bar the U.S. Energy Department from issuing any loan guarantees for projects submitted this year or in the future.
The measure, which will be discussed by two House Energy and Commerce Committee panels at a July 12 hearing, also requires the Treasury Department to review U.S. financing for applications submitted before Dec. 31, a response to concerns among Republicans the Energy Department ignored “red flags” about Solyndra.
The bill is the first offered by Republicans in the wake of the Fremont, California, solar-panel maker’s collapse two years after receiving a $535 million loan guarantee.
The committee’s 17-month investigation found Solyndra’s award was “driven by politics and ideology and divorced from economic reality,” according to the legislation.
The bill will give “taxpayers the peace of mind that such a disaster like Solyndra will never happen again,” said Representative Fred Upton, a Michigan Republican and chairman of the committee, in an e-mailed statement.
The Obama administration and the Energy Department have said Solyndra won the U.S. backing on the merits of its application and have said the Bush administration also advanced the loan. They said the company’s failure was caused by unforeseen market shifts.
“There is a degree of risk inherent in helping new, innovative technologies get off the ground,” Damien LaVera, an Energy Department spokesman, said in an e-mail. “But this administration believes that just because there is risk here, that doesn’t mean we should throw up our hands and cede the jobs of the future to China, Spain, or anywhere else.”
By prohibiting new loan guarantees for applications received this year, Republicans would let two conditional commitments to nuclear projects valued at more than $10 billion to go forward.
The bill seeks more congressional oversight of such programs, requiring the Energy secretary to disclose to the House and Senate energy committees the terms of the guarantee and the technology that’s being supported by the aid.
The Energy Department also must consult with Treasury if the loan terms are restructured, and specifies that taxpayers can’t take a back seat to private investors in case of liquidation, which occurred as the Energy Department made a last-minute effort to save Solyndra.
The Energy Department has about $34 billion in remaining loan authority, according to the bill, which is called a discussion draft and doesn’t have an official number.
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