[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4 Engrossed Amendment Senate (EAS)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

                  In the Senate of the United States,

                                                        April 25, 2002.
    Resolved, That the bill from the House of Representatives (H.R. 4) 
entitled ``An Act to enhance energy conservation, research and 
development and to provide for security and diversity in the energy 
supply for the American people, and for other purposes.'', do pass with 
the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

        This Act may be cited as the ``Energy Policy Act of 2002''.

SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

   DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                     TITLE I--REGIONAL COORDINATION

Sec. 101. Policy on regional coordination.
Sec. 102. Federal support for regional coordination.

                         TITLE II--ELECTRICITY

            Subtitle A--Amendments to the Federal Power Act

Sec. 201. Definitions.
Sec. 202. Electric utility mergers.
Sec. 203. Market-based rates.
Sec. 204. Refund effective date.
Sec. 205. Open access transmission by certain utilities.
Sec. 206. Electric reliability standards.
Sec. 207. Market transparency rules.
Sec. 208. Access to transmission by intermittent generators.
Sec. 209. Enforcement.
Sec. 210. Electric power transmission systems.

    Subtitle B--Amendments to the Public Utility Holding Company Act

Sec. 221. Short title.
Sec. 222. Definitions.
Sec. 223. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 224. Federal access to books and records.
Sec. 225. State access to books and records.
Sec. 226. Exemption authority.
Sec. 227. Affiliate transactions.
Sec. 228. Applicability.
Sec. 229. Effect on other regulations.
Sec. 230. Enforcement.
Sec. 231. Savings provisions.
Sec. 232. Implementation.
Sec. 233. Transfer of resources.
Sec. 234. Inter-agency review of competition in the wholesale and 
                            retail markets for electric energy.
Sec. 235. GAO study on implementation.
Sec. 236. Effective date.
Sec. 237. Authorization of appropriations.
Sec. 238. Conforming amendments to the Federal Power Act.

Subtitle C--Amendments to the Public Utility Regulatory Policies Act of 
                                  1978

Sec. 241. Real-time pricing and time-of-use metering standards.
Sec. 242. Adoption of additional standards.
Sec. 243. Technical assistance.
Sec. 244. Cogeneration and small power production purchase and sale 
                            requirements.
Sec. 245. Net metering.

                    Subtitle D--Consumer Protections

Sec. 251. Information disclosure.
Sec. 252. Consumer privacy.
Sec. 253. Office of Consumer Advocacy.
Sec. 254. Unfair trade practices.
Sec. 255. Applicable procedures.
Sec. 256. Federal Trade Commission enforcement.
Sec. 257. State authority.
Sec. 258. Application of subtitle.
Sec. 259. Definitions.

       Subtitle E--Renewable Energy and Rural Construction Grants

Sec. 261. Renewable energy production incentive.
Sec. 262. Assessment of renewable energy resources.
Sec. 263. Federal purchase requirement.
Sec. 264. Renewable portfolio standard.
Sec. 265. Renewable energy on Federal land.

                     Subtitle F--General Provisions

Sec. 271. Change 3 cents to 1.5 cents.
Sec. 272. Bonneville Power Administration bonds.

                  TITLE III--HYDROELECTRIC RELICENSING

Sec. 301. Alternative conditions and fishways.

                        TITLE IV--INDIAN ENERGY

Sec. 401. Comprehensive Indian energy program.
Sec. 402. Office of Indian Energy Policy and Programs.
Sec. 403. Conforming amendments.
Sec. 404. Siting energy facilities on tribal lands.
Sec. 405. Indian Mineral Development Act review.
Sec. 406. Renewable energy study.
Sec. 407. Federal Power Marketing Administrations.
Sec. 408. Feasibility study of combined wind and hydropower 
                            demonstration project.

                         TITLE V--NUCLEAR POWER

             Subtitle A--Price-Anderson Act Reauthorization

Sec. 501. Short title.
Sec. 502. Extension of indemnification authority.
Sec. 503. Department of Energy liability limit.
Sec. 504. Incidents outside the United States.
Sec. 505. Reports.
Sec. 506. Inflation adjustment.
Sec. 507. Civil penalties.
Sec. 508. Treatment of modular reactors.
Sec. 509. Effective date.

                  Subtitle B--Miscellaneous Provisions

Sec. 511. Uranium sales.
Sec. 512. Reauthorization of thorium reimbursement.
Sec. 513. Fast Flux Test Facility.
Sec. 514. Nuclear Power 2010.
Sec. 515. Office of Spent Nuclear Fuel Research.
Sec. 516. Decommissioning pilot program.

                  Subtitle C--Growth of Nuclear Energy

Sec. 521. Combined license periods.

                   Subtitle D--NRC Regulatory Reform

Sec. 531. Antitrust review.
Sec. 532. Decommissioning.

                    Subtitle E--NRC Personnel Crisis

Sec. 541. Elimination of pension offset.
Sec. 542. NRC training program.

     DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                    TITLE VI--OIL AND GAS PRODUCTION

Sec. 601. Permanent authority to operate the Strategic Petroleum 
                            Reserve.
Sec. 602. Federal onshore leasing programs for oil and gas.
Sec. 603. Oil and gas lease acreage limitations.
Sec. 604. Orphaned and abandoned wells on Federal land.
Sec. 605. Orphaned and abandoned oil and gas well program.
Sec. 606. Offshore development.
Sec. 607. Coalbed methane study.
Sec. 608. Fiscal policies to maximize recovery of domestic oil and gas 
                            resources.
Sec. 609. Strategic Petroleum Reserve.
Sec. 610. Hydraulic fracturing.
Sec. 611. Authorization of appropriations.
Sec. 612. Preservation of oil and gas resource data.
Sec. 613. Resolution of Federal resource development conflicts in the 
                            Powder River Basin.

                    TITLE VII--NATURAL GAS PIPELINES

                Subtitle A--Alaska Natural Gas Pipeline

Sec. 701. Short title.
Sec. 702. Findings.
Sec. 703. Purposes.
Sec. 704. Issuance of certificate of public convenience and necessity.
Sec. 705. Environmental reviews.
Sec. 706. Pipeline expansion.
Sec. 707. Federal Coordinator.
Sec. 708. Judicial review.
Sec. 709. State jurisdiction over in-State delivery of natural gas.
Sec. 710. Loan guarantee.
Sec. 711. Study of alternative means of construction.
Sec. 712. Clarification of ANGTA status and authorities.
Sec. 713. Definitions.
Sec. 714. Sense of the Senate.
Sec. 715. Alaskan pipeline construction training program.

                    Subtitle B--Operating Pipelines

Sec. 721. Environmental review and permitting of natural gas pipeline 
                            projects.

                      Subtitle C--Pipeline Safety

               Part I--Short Title; Amendment of Title 49

Sec. 741. Short title; amendment of title 49, United States Code.

            Part II--Pipeline Safety Improvement Act of 2002

Sec. 761. Implementation of Inspector General recommendations.
Sec. 762. NTSB safety recommendations.
Sec. 763. Qualifications of pipeline personnel.
Sec. 764. Pipeline integrity inspection program.
Sec. 765. Enforcement.
Sec. 766. Public education, emergency preparedness, and community 
                            right-to-know.
Sec. 767. Penalties.
Sec. 768. State oversight role.
Sec. 769. Improved data and data availability.
Sec. 770. Research and development.
Sec. 771. Pipeline integrity technical advisory committee.
Sec. 772. Authorization of appropriations.
Sec. 773. Operator assistance in investigations.
Sec. 774. Protection of employees providing pipeline safety 
                            information.
Sec. 775. State pipeline safety advisory committees.
Sec. 776. Fines and penalties.
Sec. 777. Study of rights-of-way.
Sec. 778. Study of natural gas reserve.
Sec. 779. Study and report on natural gas pipeline and storage 
                            facilities in New England.

           Part III--Pipeline Security Sensitive Information

Sec. 781. Meeting community right-to-know without security risks.
Sec. 782. Technical assistance for security of pipeline facilities.
Sec. 783. Criminal penalties for damaging or destroying a facility.

    DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                     TITLE VIII--FUELS AND VEHICLES

 Subtitle A--CAFE Standards, Alternative Fuels, and Advanced Technology

Sec. 801. Increased fuel economy standards.
Sec. 802. Expedited procedures for congressional increase in fuel 
                            economy standards.
Sec. 803. Revised considerations for decisions on maximum feasible 
                            average fuel economy.
Sec. 804. Extension of maximum fuel economy increase for alternative 
                            fueled vehicles.
Sec. 805. Procurement of alternative fueled and hybrid light duty 
                            trucks.
Sec. 806. Use of alternative fuels.
Sec. 807. Hybrid electric and fuel cell vehicles.
Sec. 808. Diesel fueled vehicles.
Sec. 809. Fuel cell demonstration.
Sec. 810. Bus replacement.
Sec. 811. Average fuel economy standards for pickup trucks.
Sec. 812. Exception to HOV passenger requirements for alternative fuel 
                            vehicles.
Sec. 813. Data collection.
Sec. 814. Green school bus pilot program.
Sec. 815. Fuel cell bus development and demonstration program.
Sec. 816. Authorization of appropriations.
Sec. 817. Temporary biodiesel credit expansion.
Sec. 818. Neighborhood electric vehicles.
Sec. 819. Credit for hybrid vehicles, dedicated alternative fuel 
                            vehicles, and infrastructure.
Sec. 820. Renewable content of motor vehicle fuel.
Sec. 820A. Federal agency ethanol-blended gasoline and biodiesel 
                            purchasing requirement.
Sec. 820B. Commercial byproducts from municipal solid waste loan 
                            guarantee program.

            Subtitle B--Additional Fuel Efficiency Measures

Sec. 821. Fuel efficiency of the Federal fleet of automobiles.
Sec. 822. Idling reduction systems in heavy duty vehicles.
Sec. 823. Conserve By Bicycling program.
Sec. 824. Fuel cell vehicle program.

                 Subtitle C--Federal Reformulated Fuels

Sec. 831. Short title.
Sec. 832. Leaking underground storage tanks.
Sec. 833. Authority for water quality protection from fuels.
Sec. 834. Elimination of oxygen content requirement for reformulated 
                            gasoline.
Sec. 835. Public health and environmental impacts of fuels and fuel 
                            additives.
Sec. 836. Analyses of motor vehicle fuel changes.
Sec. 837. Additional opt-in areas under reformulated gasoline program.
Sec. 838. Federal enforcement of State fuels requirements.
Sec. 839. Fuel system requirements harmonization study.
Sec. 840. Review of Federal procurement initiatives relating to use of 
                            recycled products and fleet and 
                            transportation efficiency.

   TITLE IX--ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME CONSUMERS

      Subtitle A--Low Income Assistance and State Energy Programs

Sec. 901. Increased funding for LIHEAP, weatherization assistance, and 
                            State energy grants.
Sec. 902. State energy programs.
Sec. 903. Energy efficient schools.
Sec. 904. Low income community energy efficiency pilot program.
Sec. 905. Energy efficient appliance rebate programs.

                 Subtitle B--Federal Energy Efficiency

Sec. 911. Energy management requirements.
Sec. 912. Energy use measurement and accountability.
Sec. 913. Federal building performance standards.
Sec. 914. Procurement of energy efficient products.
Sec. 915. Repeal of energy savings performance contract sunset.
Sec. 916. Energy savings performance contract definitions.
Sec. 917. Review of energy savings performance contract program.
Sec. 918. Federal Energy Bank.
Sec. 919. Energy and water saving measures in congressional buildings.
Sec. 920. Increased use of recovered material in federally funded 
                            projects involving procurement of cement or 
                            concrete.

        Subtitle C--Industrial Efficiency and Consumer Products

Sec. 921. Voluntary commitments to reduce industrial energy intensity.
Sec. 922. Authority to set standards for commercial products.
Sec. 923. Additional definitions.
Sec. 924. Additional test procedures.
Sec. 925. Energy labeling.
Sec. 926. Energy Star Program.
Sec. 927. Energy conservation standards for central air-conditioners 
                            and heat pumps.
Sec. 928. Energy conservation standards for additional consumer and 
                            commercial products.
Sec. 929. Consumer education on energy efficiency benefits of air-
                            conditioning, heating, and ventilation 
                            maintenance.
Sec. 930. Study of energy efficiency standards.

                     Subtitle D--Housing Efficiency

Sec. 931. Capacity building for energy efficient, affordable housing.
Sec. 932. Increase of CDBG public services cap for energy conservation 
                            and efficiency activities.
Sec. 933. FHA mortgage insurance incentives for energy efficient 
                            housing.
Sec. 934. Public housing capital fund.
Sec. 935. Grants for energy-conserving improvements for assisted 
                            housing.
Sec. 936. North American Development Bank.
Sec. 937. Capital fund.
Sec. 938. Energy-efficient appliances.
Sec. 939. Energy efficiency standards.
Sec. 940. Energy strategy for HUD.

                Subtitle E--Rural and Remote Communities

Sec. 941. Short title.
Sec. 942. Findings and purpose.
Sec. 943. Definitions.
Sec. 944. Authorization of appropriations.
Sec. 945. Statement of activities and review.
Sec. 946. Eligible activities.
Sec. 947. Allocation and distribution of funds.
Sec. 948. Rural and remote community electrification grants.
Sec. 949. Additional authorization of appropriations.
Sec. 950. Rural recovery community development block grants.

   DIVISION D--INTEGRATION OF ENERGY POLICY AND CLIMATE CHANGE POLICY

                TITLE X--NATIONAL CLIMATE CHANGE POLICY

                     Subtitle A--Sense of Congress

Sec. 1001. Sense of Congress on climate change.

                  Subtitle B--Climate Change Strategy

Sec. 1011. Short title.
Sec. 1012. Definitions.
Sec. 1013. National climate change strategy.
Sec. 1014. Office of National Climate Change Policy.
Sec. 1015. Office of Climate Change Technology.
Sec. 1016. Additional offices and activities.

               Subtitle C--Science and Technology Policy

Sec. 1021. Global climate change in the Office of Science and 
                            Technology Policy.
Sec. 1022. Director of Office of Science and Technology Policy 
                            Functions.

                  Subtitle D--Miscellaneous Provisions

Sec. 1031. Additional information for regulatory review.
Sec. 1032. Greenhouse gas emissions from Federal facilities.

               TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

Sec. 1101. Purpose.
Sec. 1102. Definitions.
Sec. 1103. Establishment of memorandum of agreement.
Sec. 1104. National Greenhouse Gas Database.
Sec. 1105. Greenhouse gas reduction reporting.
Sec. 1106. Measurement and verification.
Sec. 1107. Independent reviews.
Sec. 1108. Review of participation.
Sec. 1109. Enforcement.
Sec. 1110. Report on statutory changes and harmonization.
Sec. 1111. Authorization of appropriations.

       DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

          TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

Sec. 1201. Short title.
Sec. 1202. Findings.
Sec. 1203. Definitions.
Sec. 1204. Construction with other laws.

                     Subtitle A--Energy Efficiency

Sec. 1211. Enhanced energy efficiency research and development.
Sec. 1212. Energy efficiency science initiative.
Sec. 1213. Next generation lighting initiative.
Sec. 1214. Railroad efficiency.
Sec. 1215. High power density industry program.
Sec. 1216. Research regarding precious metal catalysis.

                      Subtitle B--Renewable Energy

Sec. 1221. Enhanced renewable energy research and development.
Sec. 1222. Bioenergy programs.
Sec. 1223. Hydrogen research and development.

                       Subtitle C--Fossil Energy

Sec. 1231. Enhanced fossil energy research and development.
Sec. 1232. Power plant improvement initiative.
Sec. 1233. Research and development for advanced safe and efficient 
                            coal mining technologies.
Sec. 1234. Ultra-deepwater and unconventional resource exploration and 
                            production technologies.
Sec. 1235. Research and development for new natural gas transportation 
                            technologies.
Sec. 1236. Authorization of appropriations for Office of Arctic Energy.
Sec. 1237. Clean coal technology loan.

                       Subtitle D--Nuclear Energy

Sec. 1241. Enhanced nuclear energy research and development.
Sec. 1242. University nuclear science and engineering support.
Sec. 1243. Nuclear energy research initiative.
Sec. 1244. Nuclear energy plant optimization program.
Sec. 1245. Nuclear energy technology development program.

                 Subtitle E--Fundamental Energy Science

Sec. 1251. Enhanced programs in fundamental energy science.
Sec. 1252. Nanoscale science and engineering research.
Sec. 1253. Advanced scientific computing for energy missions.
Sec. 1254. Fusion energy sciences program and planning.

        Subtitle F--Energy, Safety, and Environmental Protection

Sec. 1261. Critical energy infrastructure protection research and 
                            development.
Sec. 1262. Research and demonstration for remediation of groundwater 
                            from energy activities.--

           TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

               Subtitle A--Department of Energy Programs

Sec. 1301. Department of Energy global change research.
Sec. 1302. Amendments to the Federal Nonnuclear Research and 
                            Development Act of 1974.

             Subtitle B--Department of Agriculture Programs

Sec. 1311. Carbon sequestration basic and applied research.
Sec. 1312. Carbon sequestration demonstration projects and outreach.
Sec. 1313. Carbon storage and sequestration accounting research.

          Subtitle C--International Energy Technology Transfer

Sec. 1321. Clean energy technology exports program.
Sec. 1322. International energy technology deployment program.

           Subtitle D--Climate Change Science and Information

      Part I--Amendments to the Global Change Research Act of 1990

Sec. 1331. Amendment of Global Change Research Act of 1990.
Sec. 1332. Changes in definitions.
Sec. 1333. Change in committee name and structure.
Sec. 1334. Change in national global change research plan.
Sec. 1335. Integrated Program Office.
Sec. 1336. Research grants.
Sec. 1337. Evaluation of information.

           Part II--National Climate Services and Monitoring

Sec. 1341. Amendment of National Climate Program Act.
Sec. 1342. Changes in findings.
Sec. 1343. Tools for regional planning.
Sec. 1344. Authorization of appropriations.
Sec. 1345. National Climate Service Plan.
Sec. 1346. International Pacific research and cooperation.
Sec. 1347. Reporting on trends.
Sec. 1348. Arctic research and policy.
Sec. 1349. Abrupt climate change research.

              Part III--Ocean and Coastal Observing System

Sec. 1351. Ocean and coastal observing system.
Sec. 1352. Authorization of appropriations.

                 Subtitle E--Climate Change Technology

Sec. 1361. NIST greenhouse gas functions.
Sec. 1362. Development of new measurement technologies.
Sec. 1363. Enhanced environmental measurements and standards.
Sec. 1364. Technology development and diffusion.
Sec. 1365. Authorization of appropriations.

         Subtitle F--Climate Adaptation and Hazards Prevention

                   Part I--Assessment and Adaptation

Sec. 1371. Regional climate assessment and adaptation program.
Sec. 1372. Coastal vulnerability and adaptation.
Sec. 1373. Arctic research center.

            Part II--Forecasting and Planning Pilot Programs

Sec. 1381. Remote sensing pilot projects.
Sec. 1382. Database establishment.
Sec. 1383. Air quality research, forecasts and warnings.
Sec. 1384. Definitions.
Sec. 1385. Authorization of appropriations.

      TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

Sec. 1401. Definitions.
Sec. 1402. Availability of funds.
Sec. 1403. Cost sharing.
Sec. 1404. Merit review of proposals.
Sec. 1405. External technical review of departmental programs.
Sec. 1406. Improved coordination and management of civilian science and 
                            technology programs.
Sec. 1407. Improved coordination of technology transfer activities.
Sec. 1408. Technology infrastructure program.
Sec. 1409. Small business advocacy and assistance.
Sec. 1410. Other transactions.
Sec. 1411. Mobility of scientific and technical personnel.
Sec. 1412. National Academy of Sciences report.
Sec. 1413. Report on technology readiness and barriers to technology 
                            transfer.
Sec. 1414. United States-Mexico energy technology cooperation.

                    TITLE XV--PERSONNEL AND TRAINING

Sec. 1501. Workforce trends and traineeship grants.
Sec. 1502. Postdoctoral and senior research fellowships in energy 
                            research.
Sec. 1503. Training guidelines for electric energy industry personnel.
Sec. 1504. National Center on Energy Management and Building 
                            Technologies.
Sec. 1505. Improved access to energy-related scientific and technical 
                            careers.
Sec. 1506. National power plant operations technology and education 
                            center.
Sec. 1507. Federal mine inspectors.

             DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                    TITLE XVI--TECHNOLOGY ASSESSMENT

Sec. 1601. National Science and Technology Assessment Service.

                          TITLE XVII--STUDIES

Sec. 1701. Regulatory reviews.
Sec. 1702. Assessment of dependence of State of Hawaii on oil.
Sec. 1703. Study of siting an electric transmission system on Amtrak 
                            right-of-way.
Sec. 1704. Updating of insular area renewable energy and energy 
                            efficiency plans.
Sec. 1705. Consumer Energy Commission.
Sec. 1706. Study of natural gas and other energy transmission 
                            infrastructure across the great lakes.
Sec. 1707. National Academy of Sciences study of procedures for 
                            selection and assessment of certain routes 
                            for shipment of spent nuclear fuel from 
                            research nuclear reactors.
Sec. 1708. Report on energy savings and water use.
Sec. 1709. Report on research on hydrogen production and use.

               DIVISION G--ENERGY INFRASTRUCTURE SECURITY

              TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

               Subtitle A--Department of Energy Programs

Sec. 1801. Definitions.
Sec. 1802. Role of the Department of Energy.
Sec. 1803. Critical energy infrastructure programs.
Sec. 1804. Advisory Committee on Energy Infrastructure Security.
Sec. 1805. Best practices and standards for energy infrastructure 
                            security.

            Subtitle B--Department of the Interior Programs

Sec. 1811. Outer Continental Shelf energy infrastructure security.

                   DIVISION H--ENERGY TAX INCENTIVES

Sec. 1900. Short title; etc.

    TITLE XIX--EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY 
                         PRODUCTION TAX CREDIT

Sec. 1901. Three-year extension of credit for producing electricity 
                            from wind and poultry waste.
Sec. 1902. Credit for electricity produced from biomass.
Sec. 1903. Credit for electricity produced from swine and bovine waste 
                            nutrients, geothermal energy, and solar 
                            energy.
Sec. 1904. Treatment of persons not able to use entire credit.
Sec. 1905. Credit for electricity produced from small irrigation power.
Sec. 1906. Credit for electricity produced from municipal biosolids and 
                            recycled sludge.

       TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

Sec. 2001. Alternative motor vehicle credit.
Sec. 2002. Modification of credit for qualified electric vehicles.
Sec. 2003. Credit for installation of alternative fueling stations.
Sec. 2004. Credit for retail sale of alternative fuels as motor vehicle 
                            fuel.
Sec. 2005. Small ethanol producer credit.
Sec. 2006. All alcohol fuels taxes transferred to Highway Trust Fund.
Sec. 2007. Increased flexibility in alcohol fuels tax credit.
Sec. 2008. Incentives for biodiesel.
Sec. 2009. Credit for taxpayers owning commercial power takeoff 
                            vehicles.
Sec. 2010. Modifications to the incentives for alternative vehicles and 
                            fuels.

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

Sec. 2101. Credit for construction of new energy efficient home.
Sec. 2102. Credit for energy efficient appliances.
Sec. 2103. Credit for residential energy efficient property.
Sec. 2104. Credit for business installation of qualified fuel cells and 
                            stationary microturbine power plants.
Sec. 2105. Energy efficient commercial buildings deduction.
Sec. 2106. Allowance of deduction for qualified new or retrofitted 
                            energy management devices.
Sec. 2107. Three-year applicable recovery period for depreciation of 
                            qualified energy management devices.
Sec. 2108. Energy credit for combined heat and power system property.
Sec. 2109. Credit for energy efficiency improvements to existing homes.
Sec. 2110. Allowance of deduction for qualified new or retrofitted 
                            water submetering devices.
Sec. 2111. Three-year applicable recovery period for depreciation of 
                            qualified water submetering devices.

                   TITLE XXII--CLEAN COAL INCENTIVES

Subtitle A--Credit for Emission Reductions and Efficiency Improvements 
        in Existing Coal-based Electricity Generation Facilities

Sec. 2201. Credit for production from a qualifying clean coal 
                            technology unit.

 Subtitle B--Incentives for Early Commercial Applications of Advanced 
                        Clean Coal Technologies

Sec. 2211. Credit for investment in qualifying advanced clean coal 
                            technology.
Sec. 2212. Credit for production from a qualifying advanced clean coal 
                            technology unit.

     Subtitle C--Treatment of Persons Not Able To Use Entire Credit

Sec. 2221. Treatment of persons not able to use entire credit.

                  TITLE XXIII--OIL AND GAS PROVISIONS

Sec. 2301. Oil and gas from marginal wells.
Sec. 2302. Natural gas gathering lines treated as 7-year property.
Sec. 2303. Expensing of capital costs incurred in complying with 
                            environmental protection agency sulfur 
                            regulations.
Sec. 2304. Environmental tax credit.
Sec. 2305. Determination of small refiner exception to oil depletion 
                            deduction.
Sec. 2306. Marginal production income limit extension.
Sec. 2307. Amortization of geological and geophysical expenditures.
Sec. 2308. Amortization of delay rental payments.
Sec. 2309. Study of coal bed methane.
Sec. 2310. Extension and modification of credit for producing fuel from 
                            a nonconventional source.
Sec. 2311. Natural gas distribution lines treated as 15-year property.

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

Sec. 2401. Ongoing study and reports regarding tax issues resulting 
                            from future restructuring decisions.
Sec. 2402. Modifications to special rules for nuclear decommissioning 
                            costs.
Sec. 2403. Treatment of certain income of cooperatives.
Sec. 2404. Sales or dispositions to implement Federal Energy Regulatory 
                            Commission or State electric restructuring 
                            policy.
Sec. 2405. Application of temporary regulations to certain output 
                            contracts.
Sec. 2406. Treatment of certain development income of cooperatives.

                    TITLE XXV--ADDITIONAL PROVISIONS

Sec. 2501. Extension of accelerated depreciation and wage credit 
                            benefits on Indian reservations.
Sec. 2502. Study of effectiveness of certain provisions by GAO.
Sec. 2503. Credit for production of Alaska natural gas.
Sec. 2504. Sale of gasoline and diesel fuel at duty-free sales 
                            enterprises.
Sec. 2505. Treatment of dairy property.
Sec. 2506. Clarification of excise tax exemptions for agricultural 
                            aerial applicators.
Sec. 2507. Modification of rural airport definition.
Sec. 2508. Exemption from ticket taxes for transportation provided by 
                            seaplanes.

                DIVISION I--IRAQ OIL IMPORT RESTRICTION

                TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

Sec. 2601. Short title and findings.
Sec. 2602. Prohibition on Iraqi-origin petroleum imports.
Sec. 2603. Termination/Presidential certification.
Sec. 2604. Humanitarian interests.
Sec. 2605. Definitions.
Sec. 2606. Effective date.

                       DIVISION J--MISCELLANEOUS

                  TITLE XXVII--MISCELLANEOUS PROVISION

Sec. 2701. Fair treatment of Presidential judicial nominees.

   DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                     TITLE I--REGIONAL COORDINATION

SEC. 101. POLICY ON REGIONAL COORDINATION.

    (a) Statement of Policy.--It is the policy of the Federal 
Government to encourage States to coordinate, on a regional basis, 
State energy policies to provide reliable and affordable energy 
services to the public while minimizing the impact of providing energy 
services on communities and the environment.
    (b) Definition of Energy Services.--For purposes of this section, 
the term ``energy services'' means--
            (1) the generation or transmission of electric energy,
            (2) the transportation, storage, and distribution of crude 
        oil, residual fuel oil, refined petroleum product, or natural 
        gas, or
            (3) the reduction in load through increased efficiency, 
        conservation, or load control measures.

SEC. 102. FEDERAL SUPPORT FOR REGIONAL COORDINATION.

    (a) Technical Assistance.--The Secretary of Energy shall provide 
technical assistance to States and regional organizations formed by two 
or more States to assist them in coordinating their energy policies on 
a regional basis. Such technical assistance may include assistance in--
            (1) identifying the areas with the greatest energy resource 
        potential, and assessing future supply availability and demand 
        requirements,
            (2) planning, coordinating, and siting additional energy 
        infrastructure, including generating facilities, electric 
        transmission facilities, pipelines, refineries, and distributed 
        generation facilities to maximize the efficiency of energy 
        resources and infrastructure and meet regional needs with the 
        minimum adverse impacts on the environment,
            (3) identifying and resolving problems in distribution 
        networks,
            (4) developing plans to respond to surge demand or 
        emergency needs, and
            (5) developing renewable energy, energy efficiency, 
        conservation, and load control programs.
    (b) Annual Conference on Regional Energy Coordination.--
            (1) Annual conference.--The Secretary of Energy shall 
        convene an annual conference to promote regional coordination 
        on energy policy and infrastructure issues.
            (2) Participation.--The Secretary of Energy shall invite 
        appropriate representatives of Federal, State, and regional 
        energy organizations, and other interested parties.
            (3) State and federal agency cooperation.--The Secretary of 
        Energy shall consult and cooperate with State and regional 
        energy organizations, the Secretary of the Interior, the 
        Secretary of Agriculture, the Secretary of Commerce, the 
        Secretary of the Treasury, the Chairman of the Federal Energy 
        Regulatory Commission, the Administrator of the Environmental 
        Protection Agency, and the Chairman of the Council on 
        Environmental Quality in the planning and conduct of the 
        conference.
            (4) Agenda.--The Secretary of Energy, in consultation with 
        the officials identified in paragraph (3) and participants 
        identified in paragraph (2), shall establish an agenda for each 
        conference that promotes regional coordination on energy policy 
        and infrastructure issues.
            (5) Recommendations.--Not later than 60 days after the 
        conclusion of each annual conference, the Secretary of Energy 
        shall report to the President and the Congress recommendations 
        arising out of the conference that may improve--
                    (A) regional coordination on energy policy and 
                infrastructure issues, and
                    (B) Federal support for regional coordination.

                         TITLE II--ELECTRICITY

            Subtitle A--Amendments to the Federal Power Act

SEC. 201. DEFINITIONS.

    (a) Definition of Electric Utility.--Section 3(22) of the Federal 
Power Act (16 U.S.C. 796(22)) is amended to read as follows:
            ``(22) `electric utility' means any person or Federal or 
        State agency (including any municipality) that sells electric 
        energy; such term includes the Tennessee Valley Authority and 
        each Federal power marketing agency.''.
    (b) Definition of Transmitting Utility.--Section 3(23) of the 
Federal Power Act (16 U.S.C. 796(23)) is amended to read as follows:
            ``(23) Transmitting utility.--The term `transmitting 
        utility' means an entity (including any entity described in 
        section 201(f)) that owns or operates facilities used for the 
        transmission of electric energy in--
                    ``(A) interstate commerce; or
                    ``(B) for the sale of electric energy at 
                wholesale.''.

SEC. 202. ELECTRIC UTILITY MERGERS.

    Section 203(a) of the Federal Power Act (16 U.S.C. 824b) is amended 
to read as follows:
    ``(a)(1) No public utility shall, without first having secured an 
order of the Commission authorizing it to do so--
            ``(A) sell, lease, or otherwise dispose of the whole of its 
        facilities subject to the jurisdiction of the Commission, or 
        any part thereof of a value in excess of $10,000,000,
            ``(B) merge or consolidate, directly or indirectly, such 
        facilities or any part thereof with the facilities of any other 
        person, by any means whatsoever,
            ``(C) purchase, acquire, or take any security of any other 
        public utility, or
            ``(D) purchase, lease, or otherwise acquire existing 
        facilities for the generation of electric energy unless such 
        facilities will be used exclusively for the sale of electric 
        energy at retail.
    ``(2) No holding company in a holding company system that includes 
a transmitting utility or an electric utility company shall purchase, 
acquire, or take any security of, or, by any means whatsoever, directly 
or indirectly, merge or consolidate with a transmitting utility, an 
electric utility company, a gas utility company, or a holding company 
in a holding company system that includes a transmitting utility, an 
electric utility company, or a gas utility company, without first 
having secured an order of the Commission authorizing it to do so.
    ``(3) Upon application for such approval the Commission shall give 
reasonable notice in writing to the Governor and State commission of 
each of the States in which the physical property affected, or any part 
thereof, is situated, and to such other persons as it may deem 
advisable.
    ``(4) After notice and opportunity for hearing, the Commission 
shall approve the proposed disposition, consolidation, acquisition, or 
control, if it finds that the proposed transaction--
            ``(A) will be consistent with the public interest;
            ``(B) will not adversely affect the interests of consumers 
        of electric energy of any public utility that is a party to the 
        transaction or is an associate company of any party to the 
        transaction;
            ``(C) will not impair the ability of the Commission or any 
        State commission having jurisdiction over any public utility 
        that is a party to the transaction or an associate company of 
        any party to the transaction to protect the interests of 
        consumers or the public; and
            ``(D) will not lead to cross-subsidization of associate 
        companies or encumber any utility assets for the benefit of an 
        associate company.
    ``(5) The Commission shall, by rule, adopt procedures for the 
expeditious consideration of applications for the approval of 
dispositions, consolidations, or acquisitions under this section. Such 
rules shall identify classes of transactions, or specify criteria for 
transactions, that normally meet the standards established in paragraph 
(4), and shall require the Commission to grant or deny an application 
for approval of a transaction of such type within 90 days after the 
conclusion of the hearing or opportunity to comment under paragraph 
(4). If the Commission does not act within 90 days, such application 
shall be deemed granted unless the Commission finds that further 
consideration is required to determine whether the proposed transaction 
meets the standards of paragraph (4) and issues one or more orders 
tolling the time for acting on the application for an additional 90 
days.
    ``(6) For purposes of this subsection, the terms `associate 
company', `electric utility company', `gas utility company', `holding 
company', and `holding company system' have the meaning given those 
terms in the Public Utility Holding Company Act of 2002.''.

SEC. 203. MARKET-BASED RATES.

    (a) Approval of Market-Based Rates.--Section 205 of the Federal 
Power Act (16 U.S.C. 824d) is amended by adding at the end the 
following:
    ``(h) The Commission may determine whether a market-based rate for 
the sale of electric energy subject to the jurisdiction of the 
Commission is just and reasonable and not unduly discriminatory or 
preferential. In making such determination, the Commission shall 
consider such factors as the Commission may deem to be appropriate and 
in the public interest, including to the extent the Commission 
considers relevant to the wholesale power market--
            ``(1) market power;
            ``(2) the nature of the market and its response mechanisms; 
        and
            ``(3) reserve margins.''.
    (b) Revocation of Market-Based Rates.--Section 206 of the Federal 
Power Act (16 U.S.C. 824e) is amended by adding at the end the 
following:
    ``(f) Whenever the Commission, after a hearing had upon its own 
motion or upon complaint, finds that a rate charged by a public utility 
authorized to charge a market-based rate under section 205 is unjust, 
unreasonable, unduly discriminatory or preferential, the Commission 
shall determine the just and reasonable rate and fix the same by 
order.''.

SEC. 204. REFUND EFFECTIVE DATE.

    Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is 
amended by--
            (1) striking ``the date 60 days after the filing of such 
        complaint nor later than 5 months after the expiration of such 
        60-day period'' in the second sentence and inserting ``the date 
        of the filing of such complaint nor later than 5 months after 
        the filing of such complaint'';
            (2) striking ``60 days after'' in the third sentence and 
        inserting ``of''; and
            (3) striking ``expiration of such 60-day period'' in the 
        third sentence and inserting ``publication date''.

SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

    Part II of the Federal Power Act is further amended by inserting 
after section 211 the following:

          ``open access by unregulated transmitting utilities

    ``Sec. 211A. (a) Subject to section 212(h), the Commission may, by 
rule or order, require an unregulated transmitting utility to provide 
transmission services--
            ``(1) at rates that are comparable to those that the 
        unregulated transmitting utility charges itself, and
            ``(2) on terms and conditions (not relating to rates) that 
        are comparable to those under Commission rules that require 
        public utilities to offer open access transmission services and 
        that are not unduly discriminatory or preferential.
    ``(b) The Commission shall exempt from any rule or order under this 
subsection any unregulated transmitting utility that--
            ``(1) sells no more than 4,000,000 megawatt hours of 
        electricity per year;
            ``(2) does not own or operate any transmission facilities 
        that are necessary for operating an interconnected transmission 
        system (or any portion thereof); or
            ``(3) meets other criteria the Commission determines to be 
        in the public interest.
    ``(c) The rate changing procedures applicable to public utilities 
under subsections (c) and (d) of section 205 are applicable to 
unregulated transmitting utilities for purposes of this section.
    ``(d) In exercising its authority under paragraph (1), the 
Commission may remand transmission rates to an unregulated transmitting 
utility for review and revision where necessary to meet the 
requirements of subsection (a).
    ``(e) The provision of transmission services under subsection (a) 
does not preclude a request for transmission services under section 
211.
    ``(f) The Commission may not require a State or municipality to 
take action under this section that constitutes a private business use 
for purposes of section 141 of the Internal Revenue Code of 1986 (26 
U.S.C. 141).
    ``(g) For purposes of this subsection, the term `unregulated 
transmitting utility' means an entity that--
            ``(1) owns or operates facilities used for the transmission 
        of electric energy in interstate commerce, and
            ``(2) is either an entity described in section 201(f) or a 
        rural electric cooperative.''.

SEC. 206. ELECTRIC RELIABILITY STANDARDS.

    Part II of the Federal Power Act (16 U.S.C 824 et seq.) is amended 
by inserting the following after section 215 as added by this Act:

``SEC. 216. ELECTRIC RELIABILITY.

    ``(a) Definitions.--For purposes of this section--
            ``(1) `bulk-power system' means the network of 
        interconnected transmission facilities and generating 
        facilities;
            ``(2) `electric reliability organization' means a self-
        regulating organization certified by the Commission under 
        subsection (c) whose purpose is to promote the reliability of 
        the bulk-power system; and
            ``(3) `reliability standard' means a requirement to provide 
        for reliable operation of the bulk-power system approved by the 
        Commission under this section.
    ``(b) Jurisidiction and Applicability.--The Commission shall have 
jurisdiction, within the United States, over an electric reliability 
organization, any regional entities, and all users, owners and 
operators of the bulk-power system, including but not limited to the 
entities described in section 201(f), for purposes of approving 
reliability standards and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system shall comply with 
reliability standards that take effect under this section.
    ``(c) Certification.--(1) The Commission shall issue a final rule 
to implement the requirements of this section not later than 180 days 
after the date of enactment of this section.
    ``(2) Following the issuance of a Commission rule under paragraph 
(1), any person may submit an application to the Commission for 
certification as an electric reliability organization. The Commission 
may certify an applicant if the Commission determines that the 
applicant--
            ``(A) has the ability to develop, and enforce reliability 
        standards that provide for an adequate level of reliability of 
        the bulk-power system;
            ``(B) has established rules that--
                    ``(i) assure its independence of the users and 
                owners and operators of the bulk-power system; while 
                assuring fair stakeholder representation in the 
                selection of its directors and balanced decisionmaking 
                in any committee or subordinate organizational 
                structure;
                    ``(ii) allocate equitably dues, fees, and other 
                charges among end users for all activities under this 
                section;
                    ``(iii) provide fair and impartial procedures for 
                enforcement of reliability standards through imposition 
                of penalties (including limitations on activities, 
                functions, or operations, or other appropriate 
                sanctions); and
                    ``(iv) provide for reasonable notice and 
                opportunity for public comment, due process, openness, 
                and balance of interests in developing reliability 
                standards and otherwise exercising its duties.
    ``(3) If the Commission receives two or more timely applications 
that satisfy the requirements of this subsection, the Commission shall 
approve only the application it concludes will best implement the 
provisions of this section.
    ``(d) Reliability Standards.--(1) An electric reliability 
organization shall file a proposed reliability standard or modification 
to a reliability standard with the Commission.
    ``(2) The Commission may approve a proposed reliability standard or 
modification to a reliability standard if it determines that the 
standard is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. The Commission shall give due 
weight to the technical expertise of the electric reliability 
organization with respect to the content of a proposed standard or 
modification to a reliability standard, but shall not defer with 
respect to its effect on competition.
    ``(3) The electric reliability organization and the Commission 
shall rebuttably presume that a proposal from a regional entity 
organized on an interconnection-wide basis for a reliability standard 
or modification to a reliability standard to be applicable on an 
interconnection-wide basis is just, reasonable, and not unduly 
discriminatory or preferential, and in the public interest.
    ``(4) The Commission shall remand to the electric reliability 
organization for further consideration a proposed reliability standard 
or a modification to a reliability standard that the Commission 
disapproves in whole or in part.
    ``(5) The Commission, upon its own motion or upon complaint, may 
order an electric reliability organization to submit to the Commission 
a proposed reliability standard or a modification to a reliability 
standard that addresses a specific matter if the Commission considers 
such a new or modified reliability standard appropriate to carry out 
this section.
    ``(e) Enforcement.--(1) An electric reliability organization may 
impose a penalty on a user or owner or operator of the bulk-power 
system if the electric reliability organization, after notice and an 
opportunity for a hearing--
            ``(A) finds that the user or owner or operator of the bulk-
        power system has violated a reliability standard approved by 
        the Commission under subsection (d); and
            ``(B) files notice with the Commission, which shall affirm, 
        set aside or modify the action.
    ``(2) On its own motion or upon complaint, the Commission may order 
compliance with a reliability standard and may impose a penalty against 
a user or owner or operator of the bulk-power system, if the Commission 
finds, after notice and opportunity for a hearing, that the user or 
owner or operator of the bulk-power system has violated or threatens to 
violate a reliability standard.
    ``(3) The Commission shall establish regulations authorizing the 
electric reliability organization to enter into an agreement to 
delegate authority to a regional entity for the purpose of proposing 
and enforcing reliability standards (including related activities) if 
the regional entity satisfies the provisions of subsection (c)(2) (A) 
and (B) and the agreement promotes effective and efficient 
administration of bulk-power system reliability, and may modify such 
delegation. The electric reliability organization and the Commission 
shall rebuttably presume that a proposal for delegation to a regional 
entity organized on an interconnection-wide basis promotes effective 
and efficient administration of bulk-power system reliability and 
should be approved. Such regulation may provide that the Commission may 
assign the electric reliability organization's authority to enforce 
reliability standards directly to a regional entity consistent with the 
requirements of this paragraph.
    ``(4) The Commission may take such action as is necessary or 
appropriate against the electric reliability organization or a regional 
entity to ensure compliance with a reliability standard or any 
Commission order affecting the electric reliability organization or a 
regional entity.
    ``(f) Changes in Electricity Relialb1lity Organization Rules.--An 
electric reliability organization shall file with the Commission for 
approval any proposed rule or proposed rule change, accompanied by an 
explanation of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules of the electric 
reliability organization. A proposed rule or proposed rule change shall 
take effect upon a finding by the Commission, after notice and 
opportunity for comment, that the change is just, reasonable, not 
unduly discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (c)(2).
    ``(g) Coordination With Canada and Mexico.--(1) The electric 
reliability organization shall take all appropriate steps to gain 
recognition in Canada and Mexico.
    ``(2) The President shall use his best efforts to enter into 
international agreements with the governments of Canada and Mexico to 
provide for effective compliance with reliability standards and the 
effectiveness of the electric reliability organization in the United 
States and Canada or Mexico.
    ``(h) Reliability Reports.--The electric reliability organization 
shall conduct periodic assessments of the reliability and adequacy of 
the interconnected bulk-power system in North America.
    ``(i) Savings Provisions.--(1) The electric reliability 
organization shall have authority to develop and enforce compliance 
with standards for the reliable operation of only the bulk-power 
system.
    ``(2) This section does not provide the electric reliability 
organization or the Commission with the authority to order the 
construction of additional generation or transmission capacity or to 
set and enforce compliance with standards for adequacy or safety of 
electric facilities or services.
    ``(3) Nothing in this section shall be construed to preempt any 
authority of any State to take action to ensure the safety, adequacy, 
and reliability of electric service within that State, as long as such 
action is not inconsistent with any reliability standard.
    ``(4) Within 90 days of the application of the electric reliability 
organization or other affected party, and after notice and opportunity 
for comment, the Commission shall issue a final order determining 
whether a State action is inconsistent with a reliability standard, 
taking into consideration any recommendation of the electric 
reliability organization.
    ``(5) The Commission, after consultation with the electric 
reliability organization, may stay the effectiveness of any State 
action, pending the Commission's issuance of a final order.
    ``(j) Application of Antitrust Laws.--
            ``(1) In general.--To the extent undertaken to develop, 
        implement, or enforce a reliability standard, each of the 
        following activities shall not, in any action under the 
        antitrust laws, be deemed illegal per se--
                    ``(A) activities undertaken by an electric 
                reliability organization under this section, and
                    ``(B) activities of a user or owner or operator of 
                the bulk-power system undertaken in good faith under 
                the rules of an electric reliability organization.
            ``(2) Rule of Reason.--In any action under the antitrust 
        laws, an activity described in paragraph (1) shall be judged on 
        the basis of its reasonableness, taking into account all 
        relevant factors affecting competition and reliability.
            ``(3) Definition.--For purposes of this subsection, 
        `antitrust laws' has the meaning given the term in subsection 
        (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), 
        except that it includes section 5 of the Federal Trade 
        Commission Act (15 U. S.C. 45) to the extent that section 5 
        applies to unfair methods of competition.
    ``(k) Regional Advisory Bodies.--The Commission shall establish a 
regional advisory body on the petition of at least two-thirds of the 
States within a region that have more than one-half of their electric 
load served within the region. A regional advisory body shall be 
composed of one member from each participating State in the region, 
appointed by the Governor of each State, and may include 
representatives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the electric 
reliability organization, a regional reliability entity, or the 
Commission regarding the governance of an existing or proposed regional 
reliability entity within the same region, whether a standard proposed 
to apply within the region is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest, whether 
fees proposed to be assessed within the region are just, reasonable, 
not unduly discriminatory or preferential, and in the public interest 
and any other responsibilities requested by the Commission. The 
Commission may give deference to the advice of any such regional 
advisory body if that body is organized on an interconnection-wide 
basis.
    ``(l) Application to Alaska and Hawaii.--The provisions of this 
section do not apply to Alaska or Hawaii.''.

SEC. 207. MARKET TRANSPARENCY RULES.

    Part II of the Federal Power Act is further amended by adding at 
the end the following:

``SEC. 216. MARKET TRANSPARENCY RULES.

    ``(a) Commission Rules.--Not later than 180 days after the date of 
enactment of this section, the Commission shall issue rules 
establishing an electronic information system to provide information 
about the availability and price of wholesale electric energy and 
transmission services to the Commission, State commissions, buyers and 
sellers of wholesale electric energy, users of transmission services, 
and the public on a timely basis.
    ``(b) Information Required.--The Commission shall require--
            ``(1) each regional transmission organization to provide 
        statistical information about the available capacity and 
        capacity constraints of transmission facilities operated by the 
        organization; and
            ``(2) each broker, exchange, or other market-making entity 
        that matches offers to sell and offers to buy wholesale 
        electric energy in interstate commerce to provide statistical 
        information about the amount and sale price of sales of 
        electric energy at wholesale in interstate commerce it 
        transacts.
    ``(c) Timely Basis.--The Commission shall require the information 
required under subsection (b) to be posted on the Internet as soon as 
practicable and updated as frequently as practicable.
    ``(d) Protection of Sensitive Information.--The Commission shall 
exempt from disclosure commercial or financial information that the 
Commission, by rule or order, determines to be privileged, 
confidential, or otherwise sensitive.''.

SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT GENERATORS.

    Part II of the Federal Power Act is further amended by adding at 
the end the following:

``SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT GENERATORS.

    ``(a) Fair Treatment of Intermittent Generators.--The Commission 
shall ensure that all transmitting utilities provide transmission 
service to intermittent generators in a manner that does not unduly 
prejudice or disadvantage such generators for characteristics that 
are--
            ``(1) inherent to intermittent energy resources; and
            ``(2) are beyond the control of such generators.
    ``(b) Policies.--The Commission shall ensure that the requirement 
in subsection (a) is met by adopting such policies as it deems 
appropriate which shall include the following:
            ``(1) Subject to the sole exception set forth in paragraph 
        (2), the Commission shall ensure that the rates transmitting 
        utilities charge intermittent generator customers for 
        transmission services do not unduly prejudice or disadvantage 
        intermittent generator customers for scheduling deviations.
            ``(2) The Commission may exempt a transmitting utility from 
        the requirement set forth in paragraph (1) if the transmitting 
        utility demonstrates that scheduling deviations by its 
        intermittent generator customers are likely to have an adverse 
        impact on the reliability of the transmitting utility's system.
            ``(3) The Commission shall ensure that to the extent any 
        transmission charges recovering the transmitting utility's 
        embedded costs are assessed to such intermittent generators, 
        they are assessed to such generators on the basis of kilowatt-
        hours generated or some other method to ensure that they are 
        fully recovered by the transmitting utility.
            ``(4) The Commission shall require transmitting utilities 
        to offer to intermittent generators, and may require 
        transmitting utilities to offer to all transmission customers, 
        access to nonfirm transmission service.
    ``(c) Definitions.--As used in this section:
            ``(1) The term `intermittent generator' means a facility 
        that generates electricity using wind or solar energy and no 
        other energy source.
            ``(2) The term `nonfirm transmission service' means 
        transmission service provided on an `as available' basis.
            ``(3) The term `scheduling deviation' means delivery of 
        more or less energy than has previously been forecast in a 
        schedule submitted by an intermittent generator to a control 
        area operator or transmitting utility.''.

SEC. 209. ENFORCEMENT.

    (a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C. 
825e) is amended by--
            (1) inserting ``electric utility,'' after ``Any person,''; 
        and
            (2) inserting ``transmitting utility,'' after ``licensee'' 
        each place it appears.
    (b) Investigations.--Section 307(a) of the Federal Power Act (16 
U.S.C. 825f(a)) is amended by inserting ``or transmitting utility'' 
after ``any person'' in the first sentence.
    (c) Review of Commission Orders.--Section 313(a) of the Federal 
Power Act (16 U.S.C. 8251) is amended by inserting ``electric 
utility,'' after ``Any person,'' in the first sentence.
    (d) Criminal Penalties.--Section 316(c) of the Federal Power Act 
(16 U.S.C. 825o(c)) is repealed.
    (e) Civil Penalties.--Section 316A of the Federal Power Act (16 
U.S.C. 825o-1) is amended by striking ``section 211, 212, 213, or 214'' 
each place it appears and inserting ``Part II''.

SEC. 210. ELECTRIC POWER TRANSMISSION SYSTEMS.

    The Federal Government should be attentive to electric power 
transmission issues, including issues that can be addressed through 
policies that facilitate investment in, the enhancement of, and the 
efficiency of electric power transmission systems.

    Subtitle B--Amendments to the Public Utility Holding Company Act

SEC. 221. SHORT TITLE.

    This subtitle may be cited as the ``Public Utility Holding Company 
Act of 2002''.

SEC. 222. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``affiliate'' of a company means any company, 
        5 percent or more of the outstanding voting securities of which 
        are owned, controlled, or held with power to vote, directly or 
        indirectly, by such company.
            (2) The term ``associate company'' of a company means any 
        company in the same holding company system with such company.
            (3) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (4) The term ``company'' means a corporation, partnership, 
        association, joint stock company, business trust, or any 
        organized group of persons, whether incorporated or not, or a 
        receiver, trustee, or other liquidating agent of any of the 
        foregoing.
            (5) The term ``electric utility company'' means any company 
        that owns or operates facilities used for the generation, 
        transmission, or distribution of electric energy for sale.
            (6) The terms ``exempt wholesale generator'' and ``foreign 
        utility company'' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections existed on 
        the day before the effective date of this subtitle.
            (7) The term ``gas utility company'' means any company that 
        owns or operates facilities used for distribution at retail 
        (other than the distribution only in enclosed portable 
        containers or distribution to tenants or employees of the 
        company operating such facilities for their own use and not for 
        resale) of natural or manufactured gas for heat, light, or 
        power.
            (8) The term ``holding company'' means--
                    (A) any company that directly or indirectly owns, 
                controls, or holds, with power to vote, 10 percent or 
                more of the outstanding voting securities of a public 
                utility company or of a holding company of any public 
                utility company; and
                    (B) any person, determined by the Commission, after 
                notice and opportunity for hearing, to exercise 
                directly or indirectly (either alone or pursuant to an 
                arrangement or understanding with one or more persons) 
                such a controlling influence over the management or 
                policies of any public utility company or holding 
                company as to make it necessary or appropriate for the 
                rate protection of utility customers with respect to 
                rates that such person be subject to the obligations, 
                duties, and liabilities imposed by this subtitle upon 
                holding companies.
            (9) The term ``holding company system'' means a holding 
        company, together with its subsidiary companies.
            (10) The term ``jurisdictional rates'' means rates 
        established by the Commission for the transmission of electric 
        energy in interstate commerce, the sale of electric energy at 
        wholesale in interstate commerce, the transportation of natural 
        gas in interstate commerce, and the sale in interstate commerce 
        of natural gas for resale for ultimate public consumption for 
        domestic, commercial, industrial, or any other use.
            (11) The term ``natural gas company'' means a person 
        engaged in the transportation of natural gas in interstate 
        commerce or the sale of such gas in interstate commerce for 
        resale.
            (12) The term ``person'' means an individual or company.
            (13) The term ``public utility'' means any person who owns 
        or operates facilities used for transmission of electric energy 
        in interstate commerce or sales of electric energy at wholesale 
        in interstate commerce.
            (14) The term ``public utility company'' means an electric 
        utility company or a gas utility company.
            (15) The term ``State commission'' means any commission, 
        board, agency, or officer, by whatever name designated, of a 
        State, municipality, or other political subdivision of a State 
        that, under the laws of such State, has jurisdiction to 
        regulate public utility companies.
            (16) The term ``subsidiary company'' of a holding company 
        means--
                    (A) any company, 10 percent or more of the 
                outstanding voting securities of which are directly or 
                indirectly owned, controlled, or held with power to 
                vote, by such holding company; and
                    (B) any person, the management or policies of which 
                the Commission, after notice and opportunity for 
                hearing, determines to be subject to a controlling 
                influence, directly or indirectly, by such holding 
                company (either alone or pursuant to an arrangement or 
                understanding with one or more other persons) so as to 
                make it necessary for the rate protection of utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this subtitle upon subsidiary companies of 
                holding companies.
            (17) The term ``voting security'' means any security 
        presently entitling the owner or holder thereof to vote in the 
        direction or management of the affairs of a company.

SEC. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et 
seq.) is repealed.

SEC. 224. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Each holding company and each associate company 
thereof shall maintain, and shall make available to the Commission, 
such books, accounts, memoranda, and other records as the Commission 
deems to be relevant to costs incurred by a public utility or natural 
gas company that is an associate company of such holding company and 
necessary or appropriate for the protection of utility customers with 
respect to jurisdictional rates.
    (b) Affiliate Companies.--Each affiliate of a holding company or of 
any subsidiary company of a holding company shall maintain, and shall 
make available to the Commission, such books, accounts, memoranda, and 
other records with respect to any transaction with another affiliate, 
as the Commission deems to be relevant to costs incurred by a public 
utility or natural gas company that is an associate company of such 
holding company and necessary or appropriate for the protection of 
utility customers with respect to jurisdictional rates.
    (c) Holding Company Systems.--The Commission may examine the books, 
accounts, memoranda, and other records of any company in a holding 
company system, or any affiliate thereof, as the Commission deems to be 
relevant to costs incurred by a public utility or natural gas company 
within such holding company system and necessary or appropriate for the 
protection of utility customers with respect to jurisdictional rates.
    (d) Confidentiality.--No member, officer, or employee of the 
Commission shall divulge any fact or information that may come to his 
or her knowledge during the course of examination of books, accounts, 
memoranda, or other records as provided in this section, except as may 
be directed by the Commission or by a court of competent jurisdiction.

SEC. 225. STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, the holding company or any associate company or 
affiliate thereof, other than such public utility company, wherever 
located, shall produce for inspection books, accounts, memoranda, and 
other records that--
            (1) have been identified in reasonable detail by the State 
        commission;
            (2) the State commission deems are relevant to costs 
        incurred by such public utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
    (b) Limitation.--Subsection (a) does not apply to any person that 
is a holding company solely by reason of ownership of one or more 
qualifying facilities under the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.).
    (c) Confidentiality of Information.--The production of books, 
accounts, memoranda, and other records under subsection (a) shall be 
subject to such terms and conditions as may be necessary and 
appropriate to safeguard against unwarranted disclosure to the public 
of any trade secrets or sensitive commercial information.
    (d) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, accounts, 
memoranda, and other records, or in any way limit the rights of any 
State to obtain books, accounts, memoranda, and other records under any 
other Federal law, contract, or otherwise.
    (e) Court Jurisdiction.--Any United States district court located 
in the State in which the State commission referred to in subsection 
(a) is located shall have jurisdiction to enforce compliance with this 
section.

SEC. 226. EXEMPTION AUTHORITY.

    (a) Rulemaking.--Not later than 90 days after the effective date of 
this subtitle, the Commission shall promulgate a final rule to exempt 
from the requirements of section 224 any person that is a holding 
company, solely with respect to one or more--
            (1) qualifying facilities under the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--The Commission shall exempt a person or 
transaction from the requirements of section 224, if, upon application 
or upon the motion of the Commission--
            (1) the Commission finds that the books, accounts, 
        memoranda, and other records of any person are not relevant to 
        the jurisdictional rates of a public utility or natural gas 
        company; or
            (2) the Commission finds that any class of transactions is 
        not relevant to the jurisdictional rates of a public utility or 
        natural gas company.

SEC. 227. AFFILIATE TRANSACTIONS.

    (a) Commission Authority Unaffected.--Nothing in this subtitle 
shall limit the authority of the Commission under the Federal Power Act 
(16 U.S.C. 791a et seq.) to require that jurisdictional rates are just 
and reasonable, including the ability to deny or approve the pass 
through of costs, the prevention of cross-subsidization, and the 
promulgation of such rules and regulations as are necessary or 
appropriate for the protection of utility consumers.
    (b) Recovery of Costs.--Nothing in this subtitle shall preclude the 
Commission or a State commission from exercising its jurisdiction under 
otherwise applicable law to determine whether a public utility company, 
public utility, or natural gas company may recover in rates any costs 
of an activity performed by an associate company, or any costs of goods 
or services acquired by such public utility company from an associate 
company.

SEC. 228. APPLICABILITY.

    Except as otherwise specifically provided in this subtitle, no 
provision of this subtitle shall apply to, or be deemed to include--
            (1) the United States;
            (2) a State or any political subdivision of a State;
            (3) any foreign governmental authority not operating in the 
        United States;
            (4) any agency, authority, or instrumentality of any entity 
        referred to in paragraph (1), (2), or (3); or
            (5) any officer, agent, or employee of any entity referred 
        to in paragraph (1), (2), or (3) acting as such in the course 
        of his or her official duty.

SEC. 229. EFFECT ON OTHER REGULATIONS.

    Nothing in this subtitle precludes the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to protect utility customers.

SEC. 230. ENFORCEMENT.

    The Commission shall have the same powers as set forth in sections 
306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to 
enforce the provisions of this subtitle.

SEC. 231. SAVINGS PROVISIONS.

    (a) In General.--Nothing in this subtitle prohibits a person from 
engaging in or continuing to engage in activities or transactions in 
which it is legally engaged or authorized to engage on the effective 
date of this subtitle.
    (b) Effect on Other Commission Authority.--Nothing in this subtitle 
limits the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a et seq.) (including section 301 of that Act) or the Natural 
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).

SEC. 232. IMPLEMENTATION.

    Not later than 18 months after the date of enactment of this 
subtitle, the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this subtitle (other than section 
        225); and
            (2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this subtitle and the amendments made by this 
        subtitle.

SEC. 233. TRANSFER OF RESOURCES.

    All books and records that relate primarily to the functions 
transferred to the Commission under this subtitle shall be transferred 
from the Securities and Exchange Commission to the Commission.

SEC. 234. INTER-AGENCY REVIEW OF COMPETITION IN THE WHOLESALE AND 
              RETAIL MARKETS FOR ELECTRIC ENERGY.

    (a) Task Force.--There is established an inter-agency task force, 
to be known as the ``Electric Energy Market Competition Task Force'' 
(referred to in this section as the ``task force''), which shall 
consist of--
            (1) one member each from--
                    (A) the Department of Justice, to be appointed by 
                the Attorney General of the United States;
                    (B) the Federal Energy Regulatory Commission, to be 
                appointed by the chairman of that Commission; and
                    (C) the Federal Trade Commission, to be appointed 
                by the chairman of that Commission; and
            (2) two advisory members (who shall not vote), of whom--
                    (A) one shall be appointed by the Secretary of 
                Agriculture to represent the Rural Utility Service; and
                    (B) one shall be appointed by the Chairman of the 
                Securities and Exchange Commission to represent that 
                Commission.
    (b) Study and Report.--
            (1) Study.--The task force shall perform a study and 
        analysis of the protection and promotion of competition within 
        the wholesale and retail market for electric energy in the 
        United States.
            (2) Report.--
                    (A) Final report.--Not later than 1 year after the 
                effective date of this subtitle, the task force shall 
                submit a final report of its findings under paragraph 
                (1) to the Congress.
                    (B) Public comment.--At least 60 days before 
                submission of a final report to the Congress under 
                subparagraph (A), the task force shall publish a draft 
                report in the Federal Register to provide for public 
                comment.
    (c) Focus.--The study required by this section shall examine--
            (1) the best means of protecting competition within the 
        wholesale and retail electric market;
            (2) activities within the wholesale and retail electric 
        market that may allow unfair and unjustified discriminatory and 
        deceptive practices;
            (3) activities within the wholesale and retail electric 
        market, including mergers and acquisitions, that deny market 
        access or suppress competition;
            (4) cross-subsidization that may occur between regulated 
        and nonregulated activities; and
            (5) the role of State public utility commissions in 
        regulating competition in the wholesale and retail electric 
        market.
    (d) Consultation.--In performing the study required by this 
section, the task force shall consult with and solicit comments from 
its advisory members, the States, representatives of the electric power 
industry, and the public.

SEC. 235. GAO STUDY ON IMPLEMENTATION.

    (a) Study.--The Comptroller General shall conduct a study of the 
success of the Federal Government and the States during the 18-month 
period following the effective date of this subtitle in--
            (1) the prevention of anticompetitive practices and other 
        abuses by public utility holding companies, including cross-
        subsidization and other market power abuses; and
            (2) the promotion of competition and efficient energy 
        markets to the benefit of consumers.
    (b) Report to Congress.--Not earlier than 18 months after the 
effective date of this subtitle or later than 24 months after that 
effective date, the Comptroller General shall submit a report to the 
Congress on the results of the study conducted under subsection (a), 
including probable causes of its findings and recommendations to the 
Congress and the States for any necessary legislative changes.

SEC. 236. EFFECTIVE DATE.

    This subtitle shall take effect 18 months after the date of 
enactment of this subtitle.

SEC. 237. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such funds as may be 
necessary to carry out this subtitle.

SEC. 238. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

    (a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act 
(16 U.S.C. 825q) is repealed.
    (b) Definitions.--(1) Section 201(g) of the Federal Power Act (16 
U.S.C. 824(g)) is amended by striking ``1935'' and inserting ``2002''.
    (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is 
amended by striking ``1935'' and inserting ``2002''.

Subtitle C--Amendments to the Public Utility Regulatory Policies Act of 
                                  1978

SEC. 241. REAL-TIME PRICING AND TIME-OF-USE METERING STANDARDS.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
            ``(11) Real-time pricing.--(A) Each electric utility shall, 
        at the request of an electric consumer, provide electric 
        service under a real-time rate schedule, under which the rate 
        charged by the electric utility varies by the hour (or smaller 
        time interval) according to changes in the electric utility's 
        wholesale power cost. The real-time pricing service shall 
        enable the electric consumer to manage energy use and cost 
        through real-time metering and communications technology.
            ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
            ``(C) Notwithstanding subsections (b) and (c) of section 
        112, each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standard set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.
            ``(12) Time-of-use metering.--(A) Each electric utility 
        shall, at the request of an electric consumer, provide electric 
        service under a time-of-use rate schedule which enables the 
        electric consumer to manage energy use and cost through time-
        of-use metering and technology.
            ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
            ``(C) Notwithstanding subsections (b) and (c) of section 
        112, each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standards set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.''.
    (b) Special Rules.--Section 115 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2625) is amended by adding at the end 
the following:
    ``(i) Real-Time Pricing.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same real-time 
metering and communication service as a direct retail electric consumer 
of the electric utility.
    ``(j) Time-of-Use Metering.--In a State that permits third-party 
marketers to sell electric energy to retail electric consumers, the 
electric consumer shall be entitled to receive the same time-of-use 
metering and communication service as a direct retail electric consumer 
of the electric utility.''.

SEC. 242. ADOPTION OF ADDITIONAL STANDARDS.

    (a) Adoption of Standards.--Section 113(b) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2623(b)) is amended by 
adding at the end the following:
            ``(6) Distributed generation.--Each electric utility shall 
        provide distributed generation, combined heat and power, and 
        district heating and cooling systems competitive access to the 
        local distribution grid and competitive pricing of service, and 
        shall use simplified standard contracts for the interconnection 
        of generating facilities that have a power production capacity 
        of 250 kilowatts or less.
            ``(7) Distribution interconnections.--No electric utility 
        may refuse to interconnect a generating facility with the 
        distribution facilities of the electric utility if the owner or 
        operator of the generating facility complies with technical 
        standards adopted by the State regulatory authority and agrees 
        to pay the costs established by such State regulatory 
        authority.
            ``(8) Minimum fuel and technology diversity standard.--Each 
        electric utility shall develop a plan to minimize dependence on 
        one fuel source and to ensure that the electric energy it sells 
        to consumers is generated using a diverse range of fuels and 
        technologies, including renewable technologies.
            ``(9) Fossil fuel efficiency.--Each electric utility shall 
        develop and implement a ten-year plan to increase the 
        efficiency of its fossil fuel generation and shall monitor and 
        report to its State regulatory authority excessive greenhouse 
        gas emissions resulting from the inefficient operation of its 
        fossil fuel generating plants.''.
    (b) Time for Adopting Standards.--Section 113 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2623) is further amended by 
adding at the end the following:
    ``(d) Special Rule.--For purposes of implementing paragraphs (6), 
(7), (8), and (9) of subsection (b), any reference contained in this 
section to the date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a reference to the date of 
enactment of this subsection.''.

SEC. 243. TECHNICAL ASSISTANCE.

    Section 132(c) of the Public Utility Regulatory Policies Act of 
1978 (16 U.S.C. 2642(c)) is amended to read as follows:
    ``(c) Technical Assistance for Certain Responsibilities.--The 
Secretary may provide such technical assistance as he determines 
appropriate to assist State regulatory authorities and electric 
utilities in carrying out their responsibilities under section 
111(d)(11) and paragraphs (6), (7), (8), and (9) of section 113(b).''.

SEC. 244. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE 
              REQUIREMENTS.

    (a) Termination of Mandatory Purchase and Sale Requirements.--
Section 210 of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 824a-3) is amended by adding at the end the following:
    ``(m) Termination of Mandatory Purchase and Sale Requirements.--
            ``(1) Obligation to purchase.-- After the date of enactment 
        of this subsection, no electric utility shall be required to 
        enter into a new contract or obligation to purchase electric 
        energy from a qualifying cogeneration facility or a qualifying 
        small power production facility under this section if the 
        Commission finds that the qualifying cogeneration facility or 
        qualifying small power production facility has access to 
        independently administered, auction-based day ahead and real 
        time wholesale markets for the sale of electric energy.
            ``(2) Obligation to sell.--After the date of enactment of 
        this subsection, no electric utility shall be required to enter 
        into a new contract or obligation to sell electric energy to a 
        qualifying cogeneration facility or a qualifying small power 
        production facility under this section if competing retail 
        electric suppliers are able to provide electric energy to the 
        qualifying cogeneration facility or qualifying small power 
        production facility.
            ``(3) No effect on existing rights and remedies.--Nothing 
        in this subsection affects the rights or remedies of any party 
        under any contract or obligation, in effect on the date of 
        enactment of this subsection, to purchase electric energy or 
        capacity from or to sell electric energy or capacity to a 
        facility under this Act (including the right to recover costs 
        of purchasing electric energy or capacity).
            ``(4) Recovery of costs.--
                    ``(A) Regulation.--To ensure recovery by an 
                electric utility that purchases electric energy or 
                capacity from a qualifying facility pursuant to any 
                legally enforceable obligation entered into or imposed 
                under this section before the date of enactment of this 
                subsection, of all prudently incurred costs associated 
                with the purchases, the Commission shall issue and 
                enforce such regulations as may be required to ensure 
                that the electric utility shall collect the prudently 
                incurred costs associated with such purchases.
                    ``(B) Enforcement.--A regulation under subparagraph 
                (A) shall be enforceable in accordance with the 
                provisions of law applicable to enforcement of 
                regulations under the Federal Power Act (16 U.S.C. 791a 
                et seq.).''.
    (b) Elimination of Ownership Limitations.--
            (1) Section 3(17)(C) of the Federal Power Act (16 U.S.C. 
        796(17)(C)) is amended to read as follows:
                    ``(C) `qualifying small power production facility' 
                means a small power production facility that the 
                Commission determines, by rule, meets such requirements 
                (including requirements respecting minimum size, fuel 
                use, and fuel efficiency) as the Commission may, by 
                rule, prescribe.''.
            (2) Section 3(18)(B) of the Federal Power Act (16 U.S.C. 
        796(18)(B)) is amended to read as follows:
    ``(B) `qualifying cogeneration facility' means a cogeneration 
facility that the Commission determines, by rule, meets such 
requirements (including requirements respecting minimum size, fuel use, 
and fuel efficiency) as the Commission may, by rule, prescribe.''.

SEC. 245. NET METERING.

    (a) Adoption of Standard.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is further amended 
by adding at the end the following:
            ``(13) Net metering.--(A) Each electric utility shall make 
        available upon request net metering service to any electric 
        consumer that the electric utility serves.
            ``(B) For purposes of implementing this paragraph, any 
        reference contained in this section to the date of enactment of 
        the Public Utility Regulatory Policies Act of 1978 shall be 
        deemed to be a reference to the date of enactment of this 
        paragraph.
            ``(C) Notwithstanding subsections (b) and (c) of section 
        112, each State regulatory authority shall consider and make a 
        determination concerning whether it is appropriate to implement 
        the standard set out in subparagraph (A) not later than 1 year 
        after the date of enactment of this paragraph.''.
    (b) Special Rules for Net Metering.--Section 115 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625) is further 
amended by adding at the end the following:
    ``(k) Net Metering.--
            ``(1) Rates and charges.--An electric utility--
                    ``(A) shall charge the owner or operator of an on-
                site generating facility rates and charges that are 
                identical to those that would be charged other electric 
                consumers of the electric utility in the same rate 
                class; and
                    ``(B) shall not charge the owner or operator of an 
                on-site generating facility any additional standby, 
                capacity, interconnection, or other rate or charge.
            ``(2) Measurement.--An electric utility that sells electric 
        energy to the owner or operator of an on-site generating 
        facility shall measure the quantity of electric energy produced 
        by the on-site facility and the quantity of electric energy 
        consumed by the owner or operator of an on-site generating 
        facility during a billing period in accordance with normal 
        metering practices.
            ``(3) Electric energy supplied exceeding electric energy 
        generated.--If the quantity of electric energy sold by the 
        electric utility to an on-site generating facility exceeds the 
        quantity of electric energy supplied by the on-site generating 
        facility to the electric utility during the billing period, the 
        electric utility may bill the owner or operator for the net 
        quantity of electric energy sold, in accordance with normal 
        metering practices.
            ``(4) Electric energy generated exceeding electric energy 
        supplied.--If the quantity of electric energy supplied by the 
        on-site generating facility to the electric utility exceeds the 
        quantity of electric energy sold by the electric utility to the 
        on-site generating facility during the billing period--
                    ``(A) the electric utility may bill the owner or 
                operator of the on-site generating facility for the 
                appropriate charges for the billing period in 
                accordance with paragraph (2); and
                    ``(B) the owner or operator of the on-site 
                generating facility shall be credited for the excess 
                kilowatt-hours generated during the billing period, 
                with the kilowatt-hour credit appearing on the bill for 
                the following billing period.
            ``(5) Safety and performance standards.--An eligible on-
        site generating facility and net metering system used by an 
        electric consumer shall meet all applicable safety, 
        performance, reliability, and interconnection standards 
        established by the National Electrical Code, the Institute of 
        Electrical and Electronics Engineers, and Underwriters 
        Laboratories.
            ``(6) Additional control and testing requirements.--The 
        Commission, after consultation with State regulatory 
        authorities and nonregulated electric utilities and after 
        notice and opportunity for comment, may adopt, by rule, 
        additional control and testing requirements for on-site 
        generating facilities and net metering systems that the 
        Commission determines are necessary to protect public safety 
        and system reliability.
            ``(7) Definitions.--For purposes of this subsection:
                    ``(A) The term `eligible on-site generating 
                facility' means--
                            ``(i) a facility on the site of a 
                        residential electric consumer with a maximum 
                        generating capacity of 10 kilowatts or less 
                        that is fueled by solar energy, wind energy, or 
                        fuel cells; or
                            ``(ii) a facility on the site of a 
                        commercial electric consumer with a maximum 
                        generating capacity of 500 kilowatts or less 
                        that is fueled solely by a renewable energy 
                        resource, landfill gas, or a high efficiency 
                        system.
                    ``(B) The term `renewable energy resource' means 
                solar, wind, biomass, or geothermal energy.
                    ``(C) The term `high efficiency system' means fuel 
                cells or combined heat and power.
                    ``(D) The term `net metering service' means service 
                to an electric consumer under which electric energy 
                generated by that electric consumer from an eligible 
                on-site generating facility and delivered to the local 
                distribution facilities may be used to offset electric 
                energy provided by the electric utility to the electric 
                consumer during the applicable billing period.''.

                    Subtitle D--Consumer Protections

SEC. 251. INFORMATION DISCLOSURE.

    (a) Offers and Solicitations.--The Federal Trade Commission shall 
issue rules requiring each electric utility that makes an offer to sell 
electric energy, or solicits electric consumers to purchase electric 
energy to provide the electric consumer a statement containing the 
following information--
            (1) the nature of the service being offered, including 
        information about interruptibility of service;
            (2) the price of the electric energy, including a 
        description of any variable charges;
            (3) a description of all other charges associated with the 
        service being offered, including access charges, exit charges, 
        back-up service charges, stranded cost recovery charges, and 
        customer service charges; and
            (4) information the Federal Trade Commission determines is 
        technologically and economically feasible to provide, is of 
        assistance to electric consumers in making purchasing 
        decisions, and concerns--
                    (A) the product or its price;
                    (B) the share of electric energy that is generated 
                by each fuel type; and
                    (C) the environmental emissions produced in 
                generating the electric energy.
    (b) Periodic Billings.--The Federal Trade Commission shall issue 
rules requiring any electric utility that sells electric energy to 
transmit to each of its electric consumers, in addition to the 
information transmitted pursuant to section 115(f) of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2625(f)), a clear 
and concise statement containing the information described in 
subsection (a)(4) for each billing period (unless such information is 
not reasonably ascertainable by the electric utility).

SEC. 252. CONSUMER PRIVACY.

    (a) Prohibition.--The Federal Trade Commission shall issue rules 
prohibiting any electric utility that obtains consumer information in 
connection with the sale or delivery of electric energy to an electric 
consumer from using, disclosing, or permitting access to such 
information unless the electric consumer to whom such information 
relates provides prior written approval.
    (b) Permitted Use.--The rules issued under this section shall not 
prohibit any electric utility from using, disclosing, or permitting 
access to consumer information referred to in subsection (a) for any of 
the following purposes--
            (1) to facilitate an electric consumer's change in 
        selection of an electric utility under procedures approved by 
        the State or State regulatory authority;
            (2) to initiate, render, bill, or collect for the sale or 
        delivery of electric energy to electric consumers or for 
        related services;
            (3) to protect the rights or property of the person 
        obtaining such information;
            (4) to protect retail electric consumers from fraud, abuse, 
        and unlawful subscription in the sale or delivery of electric 
        energy to such consumers;
            (5) for law enforcement purposes; or
            (6) for purposes of compliance with any Federal, State, or 
        local law or regulation authorizing disclosure of information 
        to a Federal, State, or local agency.
    (c) Aggregate Consumer Information.--The rules issued under this 
subsection may permit a person to use, disclose, and permit access to 
aggregate consumer information and may require an electric utility to 
make such information available to other electric utilities upon 
request and payment of a reasonable fee.
    (d) Definitions.--As used in this section:
            (1) The term ``aggregate consumer information'' means 
        collective data that relates to a group or category of retail 
        electric consumers, from which individual consumer identities 
        and characteristics have been removed.
            (2) The term ``consumer information'' means information 
        that relates to the quantity, technical configuration, type, 
        destination, or amount of use of electric energy delivered to 
        any retail electric consumer.

SEC. 253. OFFICE OF CONSUMER ADVOCACY.

    (a) Definitions.--In this section:
            (1) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (2) Energy customer.--The term ``energy customer'' means a 
        residential customer or a small commercial customer that 
        receives products or services from a public utility or natural 
        gas company under the jurisdiction of the Commission.
            (3) Natural gas company.--The term ``natural gas company'' 
        has the meaning given the term in section 2 of the Natural Gas 
        Act (15 U.S.C. 717a), as modified by section 601(a) of the 
        Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
            (4) Office.--The term ``Office'' means the Office of 
        Consumer Advocacy established by subsection (b)(1).
            (5) Public utility.--The term ``public utility'' has the 
        meaning given the term in section 201(e) of the Federal Power 
        Act (16 U.S.C. 824(e)).
            (6) Small commercial customer.--The term ``small commercial 
        customer'' means a commercial customer that has a peak demand 
        of not more than 1,000 kilowatts per hour.
    (b) Office.--
            (1) Establishment.--There is established within the 
        Department of Justice the Office of Consumer Advocacy.
            (2) Director.--The Office shall be headed by a Director to 
        be appointed by the President, by and with the advice and 
        consent of the Senate.
            (3) Duties.--The Office may represent the interests of 
        energy customers on matters concerning rates or service of 
        public utilities and natural gas companies under the 
        jurisdiction of the Commission--
                    (A) at hearings of the Commission;
                    (B) in judicial proceedings in the courts of the 
                United States;
                    (C) at hearings or proceedings of other Federal 
                regulatory agencies and commissions.

SEC. 254. UNFAIR TRADE PRACTICES.

    (a) Slamming.--The Federal Trade Commission shall issue rules 
prohibiting the change of selection of an electric utility except with 
the informed consent of the electric consumer.
    (b) Cramming.--The Federal Trade Commission shall issue rules 
prohibiting the sale of goods and services to an electric consumer 
unless expressly authorized by law or the electric consumer.

SEC. 255. APPLICABLE PROCEDURES.

    The Federal Trade Commission shall proceed in accordance with 
section 553 of title 5, United States Code, when prescribing a rule 
required by this subtitle.

SEC. 256. FEDERAL TRADE COMMISSION ENFORCEMENT.

    Violation of a rule issued under this subtitle shall be treated as 
a violation of a rule under section 18 of the Federal Trade Commission 
Act (15 U.S.C. 57a) respecting unfair or deceptive acts or practices. 
All functions and powers of the Federal Trade Commission under such Act 
are available to the Federal Trade Commission to enforce compliance 
with this subtitle notwithstanding any jurisdictional limits in such 
Act.

SEC. 257. STATE AUTHORITY.

    Nothing in this subtitle shall be construed to preclude a State or 
State regulatory authority from prescribing and enforcing laws, rules, 
or procedures regarding the practices which are the subject of this 
section.

SEC. 258. APPLICATION OF SUBTITLE.

    The provisions of this subtitle apply to each electric utility if 
the total sales of electric energy by such utility for purposes other 
than resale exceed 500 million kilowatt-hours per calendar year. The 
provisions of this subtitle do not apply to the operations of an 
electric utility to the extent that such operations relate to sales of 
electric energy for purposes of resale.

SEC. 259. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``aggregate consumer information'' means 
        collective data that relates to a group or category of electric 
        consumers, from which individual consumer identities and 
        identifying characteristics have been removed.
            (2) The term ``consumer information'' means information 
        that relates to the quantity, technical configuration, type, 
        destination, or amount of use of electric energy delivered to 
        an electric consumer.
            (3) The terms ``electric consumer'', ``electric utility'', 
        and ``State regulatory authority'' have the meanings given such 
        terms in section 3 of the Public Utility Regulatory Policies 
        Act of 1978 (16 U.S.C. 2602).

       Subtitle E--Renewable Energy and Rural Construction Grants

SEC. 261. RENEWABLE ENERGY PRODUCTION INCENTIVE.

    (a) Incentive Payments.--Section 1212(a) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(a)) is amended by striking ``and which 
satisfies'' and all that follows through ``Secretary shall establish.'' 
and inserting the following: ``. The Secretary shall establish other 
procedures necessary for efficient administration of the program. The 
Secretary shall not establish any criteria or procedures that have the 
effect of assigning to proposals a higher or lower priority for 
eligibility or allocation of appropriated funds on the basis of the 
energy source proposed.''.
    (b) Qualified Renewable Energy Facility.--Section 1212(b) of the 
Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended--
            (1) by striking ``a State or any political'' and all that 
        follows through ``nonprofit electrical cooperative'' and 
        inserting the following: ``a nonprofit electrical cooperative, 
        a public utility described in section 115 of such Code, a 
        State, Commonwealth, territory, or possession of the United 
        States or the District of Columbia, or a political subdivision 
        thereof, or an Indian tribal government or subdivision 
        thereof,''; and
            (2) by inserting ``landfill gas, incremental hydropower, 
        ocean'' after ``wind, biomass,''.
    (c) Eligibility Window.--Section 1212(c) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(c)) is amended by striking ``during the 10-
fiscal year period beginning with the first full fiscal year occurring 
after the enactment of this section'' and inserting ``before October 1, 
2013''.
    (d) Payment Period.--Section 1212(d) of the Energy Policy Act of 
1992 (42 U.S.C. 13317(d)) is amended by inserting ``or in which the 
Secretary finds that all necessary Federal and State authorizations 
have been obtained to begin construction of the facility'' after 
``eligible for such payments''.
    (e) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act 
of 1992 (42 U.S.C. 13317(e)(1)) is amended by inserting ``landfill gas, 
incremental hydropower, ocean'' after ``wind, biomass,''.
    (f) Sunset.--Section 1212(f) of the Energy Policy Act of 1992 (42 
U.S.C. 13317(f)) is amended by striking ``the expiration of'' and all 
that follows through ``of this section'' and inserting ``September 30, 
2023''.
    (g) Incremental Hydropower; Authorization of Appropriations.--
Section 1212 of the Energy Policy Act of 1992 (42 U.S.C. 13317) is 
further amended by striking subsection (g) and inserting the following:
    ``(g) Incremental Hydropower.--
            ``(1) Programs.--Subject to subsection (h)(2), if an 
        incremental hydropower program meets the requirements of this 
        section, as determined by the Secretary, the incremental 
        hydropower program shall be eligible to receive incentive 
        payments under this section.
            ``(2) Definition of Incremental Hydropower.--In this 
        subsection, the term `incremental hydropower' means additional 
        generating capacity achieved from increased efficiency or 
        additions of new capacity at a hydroelectric facility in 
        existence on the date of enactment of this paragraph.
    ``(h) Authorization of Appropriations.--
            ``(1) In general.--Subject to paragraph (2), there are 
        authorized to be appropriated such sums as may be necessary to 
        carry out this section for fiscal years 2003 through 2023.
            ``(2) Limitation on funds used for incremental hydropower 
        programs.--Not more than 30 percent of the amounts made 
        available under paragraph (1) shall be used to carry out 
        programs described in subsection (g)(2).
            ``(3) Availability of funds.--Funds made available under 
        paragraph (1) shall remain available until expended.''.

SEC. 262. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

    (a) Resource Assessment.--Not later than 3 months after the date of 
enactment of this title, and each year thereafter, the Secretary of 
Energy shall review the available assessments of renewable energy 
resources available within the United States, including solar, wind, 
biomass, ocean, geothermal, and hydroelectric energy resources, and 
undertake new assessments as necessary, taking into account changes in 
market conditions, available technologies and other relevant factors.
    (b) Contents of Reports.--Not later than 1 year after the date of 
enactment of this title, and each year thereafter, the Secretary shall 
publish a report based on the assessment under subsection (a). The 
report shall contain--
            (1) a detailed inventory describing the available amount 
        and characteristics of the renewable energy resources, and
            (2) such other information as the Secretary of Energy 
        believes would be useful in developing such renewable energy 
        resources, including descriptions of surrounding terrain, 
        population and load centers, nearby energy infrastructure, 
        location of energy and water resources, and available estimates 
        of the costs needed to develop each resource, together with an 
        identification of any barriers to providing adequate 
        transmission for remote sources of renewable energy resources 
        to current and emerging markets, recommendations for removing 
        or addressing such barriers, and ways to provide access to the 
        grid that do not unfairly disadvantage renewable or other 
        energy producers.

SEC. 263. FEDERAL PURCHASE REQUIREMENT.

    (a) Requirement.--The President shall seek to ensure that, to the 
extent economically feasible and technically practicable, of the total 
amount of electric energy the Federal Government consumes during any 
fiscal year--
            (1) not less than 3 percent in fiscal years 2003 through 
        2004,
            (2) not less than 5 percent in fiscal years 2005 through 
        2009, and
            (3) not less than 7.5 percent in fiscal year 2010 and each 
        fiscal year thereafter,
shall be renewable energy. The President shall encourage the use of 
innovative purchasing practices by Federal agencies.
    (b) Definition.--For purposes of this section, the term ``renewable 
energy'' means electric energy generated from solar, wind, biomass, 
geothermal, fuel cells, municipal solid waste, or additional 
hydroelectric generation capacity achieved from increased efficiency or 
additions of new capacity.
    (c) Tribal Power Generation.--The President shall seek to ensure 
that, to the extent economically feasible and technically practicable, 
not less than one-tenth of the amount specified in subsection (a) shall 
be renewable energy that is generated by an Indian tribe or by a 
corporation, partnership, or business association which is wholly or 
majority owned, directly or indirectly, by an Indian tribe. For 
purposes of this subsection, the term ``Indian tribe'' means any Indian 
tribe, band, nation, or other organized group or community, including 
any Alaskan Native village or regional or village corporation as 
defined in or established pursuant to the Alaska Native Claims 
Settlement Act (43 U.S.C. 1601 et seq.), which is recognized as 
eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.
    (d) Biennial Report.--In 2004 and every 2 years thereafter, the 
Secretary of Energy shall report to the Committee on Energy and Natural 
Resources of the Senate and the appropriate committees of the House of 
Representatives on the progress of the Federal Government in meeting 
the goals established by this section.

SEC. 264. RENEWABLE PORTFOLIO STANDARD.

    Title VI of the Public Utility Regulatory Policies Act of 1978 is 
amended by adding at the end the following:

``SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Minimum Renewable Generation Requirement.--For each calendar 
year beginning in calendar year 2005, each retail electric supplier 
shall submit to the Secretary, not later than April 1 of the following 
calendar year, renewable energy credits in an amount equal to the 
required annual percentage specified in subsection (b).
    ``(b) Required Annual Percentage.--(1) For calendar years 2005 
through 2020, the required annual percentage of the retail electric 
supplier's base amount that shall be generated from renewable energy 
resources shall be the percentage specified in the following table:

                                                        Required annual
    ``Calendar Years                                         percentage
                2005 through 2006..........................        1.0 
                2007 through 2008..........................        2.2 
                2009 through 2010..........................        3.4 
                2011 through 2012..........................        4.6 
                2013 through 2014..........................        5.8 
                2015 through 2016..........................        7.0 
                2017 through 2018..........................        8.5 
                2019 through 2020..........................       10.0.
    ``(2) Not later than January 1, 2015, the Secretary may, by rule, 
establish required annual percentages in amounts not less than 10.0 for 
calendar years 2020 through 2030.
    ``(c) Submission of Credits.--(1) A retail electric supplier may 
satisfy the requirements of subsection (a) through the submission of 
renewable energy credits--
            ``(A) issued to the retail electric supplier under 
        subsection (d);
            ``(B) obtained by purchase or exchange under subsection 
        (e); or
            ``(C) borrowed under subsection (f).
    ``(2) A credit may be counted toward compliance with subsection (a) 
only once.
    ``(d) Issuance of Credits.--(1) The Secretary shall establish, not 
later than 1 year after the date of enactment of this section, a 
program to issue, monitor the sale or exchange of, and track renewable 
energy credits.
    ``(2) Under the program, an entity that generates electric energy 
through the use of a renewable energy resource may apply to the 
Secretary for the issuance of renewable energy credits. The application 
shall indicate--
            ``(A) the type of renewable energy resource used to produce 
        the electricity,
            ``(B) the location where the electric energy was produced, 
        and
            ``(C) any other information the Secretary determines 
        appropriate.
    ``(3)(A) Except as provided in paragraphs (B), (C), and (D), the 
Secretary shall issue to an entity one renewable energy credit for each 
kilowatt-hour of electric energy the entity generates from the date of 
enactment of this section and in each subsequent calendar year through 
the use of a renewable energy resource at an eligible facility.
    ``(B) For incremental hydropower the credits shall be calculated 
based on the expected increase in average annual generation resulting 
from the efficiency improvements or capacity additions. The number of 
credits shall be calculated using the same water flow information used 
to determine a historic average annual generation baseline for the 
hydroelectric facility and certified by the Secretary or the Federal 
Energy Regulatory Commission. The calculation of the credits for 
incremental hydropower shall not be based on any operational changes at 
the hydroelectric facility not directly associated with the efficiency 
improvements or capacity additions.
    ``(C) The Secretary shall issue two renewable energy credits for 
each kilowatt-hour of electric energy generated and supplied to the 
grid in that calendar year through the use of a renewable energy 
resource at an eligible facility located on Indian land. For purposes 
of this paragraph, renewable energy generated by biomass cofired with 
other fuels is eligible for two credits only if the biomass was grown 
on the land eligible under this paragraph.
    ``(D) For renewable energy resources produced from a generation 
offset, the Secretary shall issue two renewable energy credits for each 
kilowatt-hour generated.
    ``(E) To be eligible for a renewable energy credit, the unit of 
electric energy generated through the use of a renewable energy 
resource may be sold or may be used by the generator. If both a 
renewable energy resource and a nonrenewable energy resource are used 
to generate the electric energy, the Secretary shall issue credits 
based on the proportion of the renewable energy resource used. The 
Secretary shall identify renewable energy credits by type and date of 
generation.
    ``(5) When a generator sells electric energy generated through the 
use of a renewable energy resource to a retail electric supplier under 
a contract subject to section 210 of this Act, the retail electric 
supplier is treated as the generator of the electric energy for the 
purposes of this section for the duration of the contract.
    ``(6) The Secretary may issue credits for existing facility offsets 
to be applied against a retail electric supplier's own required annual 
percentage. The credits are not tradeable and may only be used in the 
calendar year generation actually occurs.
    ``(e) Credit Trading.--A renewable energy credit may be sold or 
exchanged by the entity to whom issued or by any other entity who 
acquires the credit. A renewable energy credit for any year that is not 
used to satisfy the minimum renewable generation requirement of 
subsection (a) for that year may be carried forward for use within the 
next 4 years.
    ``(f) Credit Borrowing.--At any time before the end of calendar 
year 2005, a retail electric supplier that has reason to believe it 
will not have sufficient renewable energy credits to comply with 
subsection (a) may--
            ``(1) submit a plan to the Secretary demonstrating that the 
        retail electric supplier will earn sufficient credits within 
        the next 3 calendar years which, when taken into account, will 
        enable the retail electric supplier's to meet the requirements 
        of subsection (a) for calendar year 2005 and the subsequent 
        calendar years involved; and
            ``(2) upon the approval of the plan by the Secretary, apply 
        credits that the plan demonstrates will be earned within the 
        next 3 calendar years to meet the requirements of subsection 
        (a) for each calendar year involved.
    ``(g) Credit Cost Cap.--The Secretary shall offer renewable energy 
credits for sale at the lesser of 3 cents per kilowatt-hour or 200 
percent of the average market value of credits for the applicable 
compliance period. On January 1 of each year following calendar year 
2005, the Secretary shall adjust for inflation the price charged per 
credit for such calendar year, based on the Gross Domestic Product 
Implicit Price Deflator.
    ``(h) Enforcement.--The Secretary may bring an action in the 
appropriate United States district court to impose a civil penalty on a 
retail electric supplier that does not comply with subsection (a), 
unless the retail electric supplier was unable to comply with 
subsection (a) for reasons outside of the supplier's reasonable control 
(including weather-related damage, mechanical failure, lack of 
transmission capacity or availability, strikes, lockouts, actions of a 
governmental authority). A retail electric supplier who does not submit 
the required number of renewable energy credits under subsection (a) 
shall be subject to a civil penalty of not more than the greater of 3 
cents or 200 percent of the average market value of credits for the 
compliance period for each renewable energy credit not submitted.
    ``(i) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy generation and renewable 
        energy generation of any entity applying for renewable energy 
        credits under this section,
            ``(2) the validity of renewable energy credits submitted by 
        a retail electric supplier to the Secretary, and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(j) Environmental Savings Clause.--Incremental hydropower shall 
be subject to all applicable environmental laws and licensing and 
regulatory requirements.
    ``(k) State Savings Clause.--This section does not preclude a State 
from requiring additional renewable energy generation in that State, or 
from specifying technology mix.
    ``(l) Definitions.--For purposes of this section:
            ``(1) Biomass.--The term `biomass' means any organic 
        material that is available on a renewable or recurring basis, 
        including dedicated energy crops, trees grown for energy 
        production, wood waste and wood residues, plants (including 
        aquatic plants, grasses, and agricultural crops), residues, 
        fibers, animal wastes and other organic waste materials, and 
        fats and oils, except that with respect to material removed 
        from National Forest System lands the term includes only 
        organic material from--
                    ``(A) thinnings from trees that are less than 12 
                inches in diameter;
                    ``(B) slash;
                    ``(C) brush; and
                    ``(D) mill residues.
            ``(2) Eligible facility.--The term `eligible facility' 
        means--
                    ``(A) a facility for the generation of electric 
                energy from a renewable energy resource that is placed 
                in service on or after the date of enactment of this 
                section; or
                    ``(B) a repowering or cofiring increment that is 
                placed in service on or after the date of enactment of 
                this section at a facility for the generation of 
                electric energy from a renewable energy resource that 
                was placed in service before that date.
            ``(3) Eligible renewable energy resource.--The term 
        `renewable energy resource' means solar, wind, ocean, or 
        geothermal energy, biomass (excluding solid waste and paper 
        that is commonly recycled), landfill gas, a generation offset, 
        or incremental hydropower.
            ``(4) Generation offset.--The term `generation offset' 
        means reduced electricity usage metered at a site where a 
        customer consumes energy from a renewable energy technology.
            ``(5) Existing facility offset.--The term `existing 
        facility offset' means renewable energy generated from an 
        existing facility, not classified as an eligible facility, that 
        is owned or under contract to a retail electric supplier on the 
        date of enactment of this section.
            ``(6) Incremental hydropower.--The term `incremental 
        hydropower' means additional generation that is achieved from 
        increased efficiency or additions of capacity after the date of 
        enactment of this section at a hydroelectric dam that was 
        placed in service before that date.
            ``(7) Indian land.--The term `Indian land' means--
                    ``(A) any land within the limits of any Indian 
                reservation, pueblo, or rancheria,
                    ``(B) any land not within the limits of any Indian 
                reservation, pueblo, or rancheria title to which was on 
                the date of enactment of this paragraph either held by 
                the United States for the benefit of any Indian tribe 
                or individual or held by any Indian tribe or individual 
                subject to restriction by the United States against 
                alienation,
                    ``(C) any dependent Indian community, and
                    ``(D) any land conveyed to any Alaska Native 
                corporation under the Alaska Native Claims Settlement 
                Act.
            ``(8) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaskan Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
        seq.), which is recognized as eligible for the special programs 
        and services provided by the United States to Indians because 
        of their status as Indians.
            ``(9) Renewable energy.--The term `renewable energy' means 
        electric energy generated by a renewable energy resource.
            ``(10) Renewable energy resource.--The term `renewable 
        energy resource' means solar, wind, ocean, or geothermal 
        energy, biomass (including municipal solid waste), landfill 
        gas, a generation offset, or incremental hydropower.
            ``(11) Repowering or cofiring increment.--The term 
        `repowering or cofiring increment' means the additional 
        generation from a modification that is placed in service on or 
        after the date of enactment of this section to expand 
        electricity production at a facility used to generate electric 
        energy from a renewable energy resource or to cofire biomass 
        that was placed in service before the date of enactment of this 
        section, or the additional generation above the average 
        generation in the 3 years preceding the date of enactment of 
        this section, to expand electricity production at a facility 
        used to generate electric energy from a renewable energy 
        resource or to cofire biomass that was placed in service before 
        the date of enactment of this section.
            ``(12) Retail electric supplier.--The term `retail electric 
        supplier' means a person that sells electric energy to electric 
        consumers and sold not less than 1,000,000 megawatt-hours of 
        electric energy to electric consumers for purposes other than 
        resale during the preceding calendar year; except that such 
        term does not include the United States, a State or any 
        political subdivision of a State, or any agency, authority, or 
        instrumentality of any one or more of the foregoing, or a rural 
        electric cooperative.
            ``(13) Retail electric supplier's base amount.--The term 
        `retail electric supplier's base amount' means the total amount 
        of electric energy sold by the retail electric supplier to 
        electric customers during the most recent calendar year for 
        which information is available, excluding electric energy 
        generated by--
                    ``(A) an eligible renewable energy resource;
                    ``(B) municipal solid waste; or
                    ``(C) a hydroelectric facility.
    ``(m) Sunset.--This section expires December 31, 2030.''.

SEC. 265. RENEWABLE ENERGY ON FEDERAL LAND.

    (a) Cost-Share Demonstration Program.--Within 12 months after the 
date of enactment of this section, the Secretaries of the Interior, 
Agriculture, and Energy shall develop guidelines for a cost-share 
demonstration program for the development of wind and solar energy 
facilities on Federal land.
    (b) Definition of Federal Land.--As used in this section, the term 
``Federal land'' means land owned by the United States that is subject 
to the operation of the mineral leasing laws; and is either--
            (1) public land as defined in section 103(e) of the Federal 
        Land Policy and Management Act of 1976 (42 U.S.C. 1702(e)); or
            (2) a unit of the National Forest System as that term is 
        used in section 11(a) of the Forest and Rangeland Renewable 
        Resources Planning Act of 1974 (16 U.S.C. 1609(a)).
    (c) Rights-of-Way.--The demonstration program shall provide for the 
issuance of rights-of-way pursuant to the provisions of title V of the 
Federal Land Policy and Management Act of 1976 (43 U.S.C. 1761 et seq.) 
by the Secretary of the Interior with respect to Federal land under the 
jurisdiction of the Department of the Interior, and by the Secretary of 
Agriculture with respect to Federal lands under the jurisdiction of the 
Department of Agriculture.
    (d) Available Sites.--For purposes of this demonstration program, 
the issuance of rights-of-way shall be limited to areas--
            (1) of high energy potential for wind or solar development;
            (2) that have been identified by the wind or solar energy 
        industry, through a process of nomination, application, or 
        otherwise, as being of particular interest to one or both 
        industries;
            (3) that are not located within roadless areas;
            (4) where operation of wind or solar facilities would be 
        compatible with the scenic, recreational, environmental, 
        cultural, or historic values of the Federal land, and would not 
        require the construction of new roads for the siting of lines 
        or other transmission facilities; and
            (5) where issuance of the right-of-way is consistent with 
        the land and resource management plans of the relevant land 
        management agencies.
    (e) Cost-Share Payments by DOE.--The Secretary of Energy, in 
cooperation with the Secretary of the Interior with respect to Federal 
land under the jurisdiction of the Department of the Interior, and the 
Secretary of Agriculture with respect to Federal land under the 
jurisdiction of the Department of Agriculture, shall determine if the 
portion of a project on Federal land is eligible for financial 
assistance pursuant to this section. Only those projects that are 
consistent with the requirements of this section and further the 
purposes of this section shall be eligible. In the event a project is 
selected for financial assistance, the Secretary of Energy shall 
provide no more than 15 percent of the costs of the project on the 
Federal land, and the remainder of the costs shall be paid by non-
Federal sources.
    (f) Revision of Land Use Plans.--The Secretary of the Interior 
shall consider development of wind and solar energy, as appropriate, in 
revisions of land use plans under section 202 of the Federal Land 
Policy and Management Act of 1976 (42 U.S.C. 1712); and the Secretary 
of Agriculture shall consider development of wind and solar energy, as 
appropriate, in revisions of land and resource management plans under 
section 5 of the Forest and Rangeland Renewable Resources Planning Act 
of 1974 (16 U.S.C. 1604). Nothing in this subsection shall preclude the 
issuance of a right-of-way for the development of a wind or solar 
energy project prior to the revision of a land use plan by the 
appropriate land management agency.
    (g) Report to Congress.--Within 24 months after the date of 
enactment of this section, the Secretary of the Interior shall develop 
and report to Congress recommendations on any statutory or regulatory 
changes the Secretary believes would assist in the development of 
renewable energy on Federal land. The report shall include--
            (1) a five-year plan developed by the Secretary of the 
        Interior, in cooperation with the Secretary of Agriculture, for 
        encouraging the development of wind and solar energy on Federal 
        land in an environmentally sound manner; and
            (2) an analysis of--
                    (A) whether the use of rights-of-ways is the best 
                means of authorizing use of Federal land for the 
                development of wind and solar energy, or whether such 
                resources could be better developed through a leasing 
                system, or other method;
                    (B) the desirability of grants, loans, tax credits 
                or other provisions to promote wind and solar energy 
                development on Federal land; and
                    (C) any problems, including environmental concerns, 
                which the Secretary of the Interior or the Secretary of 
                Agriculture have encountered in managing wind or solar 
                energy projects on Federal land, or believe are likely 
                to arise in relation to the development of wind or 
                solar energy on Federal land;
            (3) a list, developed in consultation with the Secretaries 
        of Energy and Defense, of lands under the jurisdiction of the 
        Departments of Energy and Defense that would be suitable for 
        development for wind or solar energy, and recommended statutory 
        and regulatory mechanisms for such development.
    (h) National Academy of Sciences Study.-- Within 90 days after the 
enactment of this Act, the Secretary of the Interior shall contract 
with the National Academy of Sciences to study the potential for the 
development of wind, solar, and ocean energy on the Outer Continental 
Shelf; assess existing Federal authorities for the development of such 
resources; and recommend statutory and regulatory mechanisms for such 
development. The results of the study shall be transmitted to Congress 
within 24 months after the enactment of this Act.

                     Subtitle F--General Provisions

SEC. 271. CHANGE 3 CENTS TO 1.5 CENTS.

     Not withstanding any other provision in this Act, ``3 cents'' 
shall be considered by law to be ``1.5 cents'' in any place ``3 cents'' 
appears in title II of this Act.

SEC. 272. BONNEVILLE POWER ADMINISTRATION BONDS.

    Section 13 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838k) is amended--
            (1) by striking the section heading and all that follows 
        through ``(a) The Administrator'' and inserting the following:

``SEC. 13. BONNEVILLE POWER ADMINISTRATION BONDS.

    ``(a) Bonds.--
            ``(1) In general.--The Administrator''; and
            (2) by adding at the end the following:
            ``(2) Additional borrowing authority.--In addition to the 
        borrowing authority of the Administrator authorized under 
        paragraph (1) or any other provision of law, an additional 
        $1,300,000,000 is made available, to remain outstanding at any 
        one time--
                    ``(A) to provide funds to assist in financing the 
                construction, acquisition, and replacement of the 
                transmission system of the Bonneville Power 
                Administration; and
                    ``(B) to implement the authorities of the 
                Administrator under the Pacific Northwest Electric 
                Power Planning and Conservation Act (16 U.S.C. 839 et 
                seq.).''.

                  TITLE III--HYDROELECTRIC RELICENSING

SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

    (a) Alternative Mandatory Conditions.--Section 4 of the Federal 
Power Act (16 U.S.C. 797) is amended by adding at the end the 
following:
    ``(h)(1) Whenever any person applies for a license for any project 
works within any reservation of the United States under subsection (e), 
and the Secretary of the department under whose supervision such 
reservation falls (in this subsection referred to as the `Secretary') 
shall deem a condition to such license to be necessary under the first 
proviso of such section, the license applicant may propose an 
alternative condition.
    ``(2) Notwithstanding the first proviso of subsection (e), the 
Secretary of the department under whose supervision the reservation 
falls shall accept the proposed alternative condition referred to in 
paragraph (1), and the Commission shall include in the license such 
alternative condition, if the Secretary of the appropriate department 
determines, based on substantial evidence provided by the license 
applicant, that the alternative condition--
            ``(A) provides for the adequate protection and utilization 
        of the reservation; and
            ``(B) will either--
                    ``(i) cost less to implement, or
                    ``(ii) result in improved operation of the project 
                works for electricity production as compared to the 
                condition initially deemed necessary by the Secretary.
    ``(3) The Secretary shall submit into the public record of the 
Commission proceeding with any condition under subsection (e) or 
alternative condition it accepts under this subsection a written 
statement explaining the basis for such condition, and reason for not 
accepting any alternative condition under this subsection, including 
the effects of the condition accepted and alternatives not accepted on 
energy supply, distribution, cost, and use, air quality, flood control, 
navigation, and drinking, irrigation, and recreation water supply, 
based on such information as may be available to the Secretary, 
including information voluntarily provided in a timely manner by the 
applicant and others.
    ``(4) Nothing in this subsection shall prohibit other interested 
parties from proposing alternative conditions.''.
    (b) Alternative Fishways.--Section 18 of the Federal Power Act (16 
U.S.C. 811) is amended by--
            (1) inserting ``(a)'' before the first sentence; and
            (2) adding at the end the following:
    ``(b)(1) Whenever the Secretary of the Interior or the Secretary of 
Commerce prescribes a fishway under this section, the license applicant 
or the licensee may propose an alternative to such prescription to 
construct, maintain, or operate a fishway.
    ``(2) Notwithstanding subsection (a), the Secretary of the Interior 
or the Secretary of Commerce, as appropriate, shall accept and 
prescribe, and the Commission shall require, the proposed alternative 
referred to in paragraph (1), if the Secretary of the appropriate 
department determines, based on substantial evidence provided by the 
licensee, that the alternative--
            ``(A) will be no less protective of the fish resources than 
        the fishway initially prescribed by the Secretary; and
            ``(B) will either--
                    ``(i) cost less to implement, or
                    ``(ii) result in improved operation of the project 
                works for electricity production as compared to the 
                fishway initially prescribed by the Secretary.
    ``(3) The Secretary shall submit into the public record of the 
Commission proceeding with any prescription under subsection (a) or 
alternative prescription it accepts under this subsection a written 
statement explaining the basis for such prescription, and reason for 
not accepting any alternative prescription under this subsection, 
including the effects of the prescription accepted or alternative not 
accepted on energy supply, distribution, cost, and use, air quality, 
flood control, navigation, and drinking, irrigation, and recreation 
water supply, based on such information as may be available to the 
Secretary, including information voluntarily provided in a timely 
manner by the applicant and others.
    ``(4) Nothing in this subsection shall prohibit other interested 
parties from proposing alternative prescriptions.''.
    (c) Time of Filing Application.--Section 15(c)(1) of the Federal 
Power Act (16 U.S.C. 808(c)(1)) is amended by striking the first 
sentence and inserting the following:
            ``(1) Each application for a new license pursuant to this 
        section shall be filed with the Commission--
                    ``(A) at least 24 months before the expiration of 
                the term of the existing license in the case of 
                licenses that expire prior to 2008; and
                    ``(B) at least 36 months before the expiration of 
                the term of the existing license in the case of 
                licenses that expire in 2008 or any year thereafter.''.

                        TITLE IV--INDIAN ENERGY

SEC. 401. COMPREHENSIVE INDIAN ENERGY PROGRAM.

    Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501-3506) 
is amended by adding after section 2606 the following:

``SEC. 2607. COMPREHENSIVE INDIAN ENERGY PROGRAM.

    ``(a) Definitions.--For purposes of this section--
            ``(1) the term `Director' means the Director of the Office 
        of Indian Energy Policy and Programs established by section 217 
        of the Department of Energy Organization Act, and
            ``(2) the term `Indian land' means--
                    ``(A) any land within the limits of an Indian 
                reservation, pueblo, or rancheria;
                    ``(B) any land not within the limits of an Indian 
                reservation, pueblo, or rancheria whose title is held--
                            ``(i) in trust by the United States for the 
                        benefit of an Indian tribe,
                            ``(ii) by an Indian tribe subject to 
                        restriction by the United States against 
                        alienation, or
                            ``(iii) by a dependent Indian community; 
                        and
                    ``(C) land conveyed to an Alaska Native Corporation 
                under the Alaska Native Claims Settlement Act.
    ``(b) Indian Energy Education Planning and Management Assistance.--
(1) The Director shall establish programs within the Office of Indian 
Energy Policy and Programs to assist Indian tribes in meeting their 
energy education, research and development, planning, and management 
needs.
    ``(2) The Director may make grants, on a competitive basis, to an 
Indian tribe for--
            ``(A) renewable energy, energy efficiency, and conservation 
        programs;
            ``(B) studies and other activities supporting tribal 
        acquisition of energy supplies, services, and facilities;
            ``(C) planning, constructing, developing, operating, 
        maintaining, and improving tribal electrical generation, 
        transmission, and distribution facilities; and
            ``(D) developing, constructing, and interconnecting 
        electric power transmission facilities with transmission 
        facilities owned and operated by a Federal power marketing 
        agency or an electric utility that provides open access 
        transmission service.
    ``(3) The Director may develop, in consultation with Indian tribes, 
a formula for making grants under this section. The formula may take 
into account the following--
            ``(A) the total number of acres of Indian land owned by an 
        Indian tribe;
            ``(B) the total number of households on the Indian tribe's 
        Indian land;
            ``(C) the total number of households on the Indian tribe's 
        Indian land that have no electricity service or are under-
        served; and
            ``(D) financial or other assets available to the Indian 
        tribe from any source.
    ``(4) In making a grant under paragraph (2), the Director shall 
give priority to an application received from an Indian tribe that is 
not served or is served inadequately by an electric utility, as that 
term is defined in section 3(4) of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2602(4)), or by a person, State agency, 
or any other non-Federal entity that owns or operates a local 
distribution facility used for the sale of electric energy to an 
electric consumer.
    ``(5) There are authorized to be appropriated to the Department of 
Energy such sums as may be necessary to carry out the purposes of this 
section.
    ``(6) The Secretary is authorized to promulgate such regulations as 
the Secretary determines to be necessary to carry out the provisions of 
this subsection.
    ``(c) Loan Guarantee Program.--
            ``(1) Authority.--The Secretary may guarantee not more than 
        90 percent of the unpaid principal and interest due on any loan 
        made to any Indian tribe for energy development, including the 
        planning, development, construction, and maintenance of 
        electrical generation plants, and for transmission and delivery 
        mechanisms for electricity produced on Indian land. A loan 
        guaranteed under this subsection shall be made by--
                    ``(A) a financial institution subject to the 
                examination of the Secretary; or
                    ``(B) an Indian tribe, from funds of the Indian 
                tribe, to another Indian tribe.
            ``(2) Availability of appropriations.--Amounts appropriated 
        to cover the cost of loan guarantees shall be available without 
        fiscal year limitation to the Secretary to fulfill obligations 
        arising under this subsection.
            ``(3) Authorization of appropriations.--(A) There are 
        authorized to be appropriated to the Secretary such sums as may 
        be necessary to cover the cost of loan guarantees, as defined 
        by section 502(5) of the Federal Credit Reform Act of 1990 (2 
        U.S.C. 661a(5)).
            ``(B) There are authorized to be appropriated to the 
        Secretary such sums as may be necessary to cover the 
        administrative expenses related to carrying out the loan 
        guarantee program established by this subsection.
            ``(4) Limitation on amount.--The aggregate outstanding 
        amount guaranteed by the Secretary of Energy at any one time 
        under this subsection shall not exceed $2,000,000,000.
            ``(5) Regulations.--The Secretary is authorized to 
        promulgate such regulations as the Secretary determines to be 
        necessary to carry out the provisions of this subsection.
    ``(d) Indian Energy Preference.--(1) An agency or department of the 
United States Government may give, in the purchase of electricity, oil, 
gas, coal, or other energy product or by-product, preference in such 
purchase to an energy and resource production enterprise, partnership, 
corporation, or other type of business organization majority or wholly 
owned and controlled by a tribal government.
    ``(2) In implementing this subsection, an agency or department 
shall pay no more than the prevailing market price for the energy 
product or by-product and shall obtain no less than existing market 
terms and conditions.
    ``(e) Effect on Other Laws.--This section does not--
            ``(1) limit the discretion vested in an Administrator of a 
        Federal power marketing agency to market and allocate Federal 
        power, or
            ``(2) alter Federal laws under which a Federal power 
        marketing agency markets, allocates, or purchases power.''.

SEC. 402. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

    Title II of the Department of Energy Organization Act is amended by 
adding at the end the following:

             ``office of indian energy policy and programs

    ``Sec. 217. (a) There is established within the Department an 
Office of Indian Energy Policy and Programs. This Office shall be 
headed by a Director, who shall be appointed by the Secretary and 
compensated at the rate equal to that of level IV of the Executive 
Schedule under section 5315 of title 5, United States Code.
    ``(b) The Director shall provide, direct, foster, coordinate, and 
implement energy planning, education, management, conservation, and 
delivery programs of the Department that--
            ``(1) promote tribal energy efficiency and utilization;
            ``(2) modernize and develop, for the benefit of Indian 
        tribes, tribal energy and economic infrastructure related to 
        natural resource development and electrification;
            ``(3) preserve and promote tribal sovereignty and self 
        determination related to energy matters and energy 
        deregulation;
            ``(4) lower or stabilize energy costs; and
            ``(5) electrify tribal members' homes and tribal lands.
    ``(c) The Director shall carry out the duties assigned the 
Secretary or the Director under title XXVI of the Energy Policy Act of 
1992 (25 U.S.C. 3501 et seq.).''.

SEC. 403. CONFORMING AMENDMENTS.

    (a) Authorization of Appropriations.--Section 2603(c) of the Energy 
Policy Act of 1992 (25 U.S.C. 3503(c)) is amended to read as follows:
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the purposes of 
this section.''.
    (b) Table of Contents.--The table of contents of the Department of 
Energy Act is amended by inserting after the item relating to section 
216 the following new item:

``Sec. 217. Office of Indian Energy Policy and Programs.''.
    (c) Executive Schedule.--Section 5315 of title 5, United States 
Code, is amended by inserting ``Director, Office of Indian Energy 
Policy and Programs, Department of Energy.'' after ``Inspector General, 
Department of Energy.''.

SEC. 404. SITING ENERGY FACILITIES ON TRIBAL LANDS.

    (a) Definitions.--For purposes of this section:
            (1) Indian tribe.--The term ``Indian tribe'' means any 
        Indian tribe, band, nation, or other organized group or 
        community, which is recognized as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians, except that such term does 
        not include any Regional Corporation as defined in section 3(g) 
        of the Alaska Native Claims Settlement Act (43 U.S.C. 1602(g)).
            (2) Interested party.--The term ``interested party'' means 
        a person whose interests could be adversely affected by the 
        decision of an Indian tribe to grant a lease or right-of-way 
        pursuant to this section.
            (3) Petition.--The term ``petition'' means a written 
        request submitted to the Secretary for the review of an action 
        (or inaction) of the Indian tribe that is claimed to be in 
        violation of the approved tribal regulations.
            (4) Reservation.--The term ``reservation'' means--
                    (A) with respect to a reservation in a State other 
                than Oklahoma, all land that has been set aside or that 
                has been acknowledged as having been set aside by the 
                United States for the use of an Indian tribe, the 
                exterior boundaries of which are more particularly 
                defined in a final tribal treaty, agreement, executive 
                order, Federal statute, secretarial order, or judicial 
                determination;
                    (B) with respect to a reservation in the State of 
                Oklahoma, all land that is--
                            (i) within the jurisdictional area of an 
                        Indian tribe, and
                            (ii) within the boundaries of the last 
                        reservation of such tribe that was established 
                        by treaty, executive order, or secretarial 
                        order.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (6) Tribal lands.--The term `tribal lands' means any tribal 
        trust lands, or other lands owned by an Indian tribe that are 
        within such tribe's reservation.
    (b) Leases Involving Generation, Transmission, Distribution or 
Energy Processing Facilities.--An Indian tribe may grant a lease of 
tribal land for electric generation, transmission, or distribution 
facilities, or facilities to process or refine renewable or 
nonrenewable energy resources developed on tribal lands, and such 
leases shall not require the approval of the Secretary if the lease is 
executed under tribal regulations approved by the Secretary under this 
subsection and the term of the lease does not exceed 30 years.
    (c) Rights-of-Way for Electric Generation, Transmission, 
Distribution or Energy Processing Facilities.--An Indian tribe may 
grant a right-of-way over tribal lands for a pipeline or an electric 
transmission or distribution line without separate approval by the 
Secretary, if--
            (1) the right-of-way is executed under and complies with 
        tribal regulations approved by the Secretary and the term of 
        the right-of-way does not exceed 30 years; and
            (2) the pipeline or electric transmission or distribution 
        line serves--
                    (A) an electric generation, transmission or 
                distribution facility located on tribal land, or
                    (B) a facility located on tribal land that 
                processes or refines renewable or nonrenewable energy 
                resources developed on tribal lands.
    (d) Renewals.--Leases or rights-of-way entered into under this 
subsection may be renewed at the discretion of the Indian tribe in 
accordance with the requirements of this section.
    (e) Tribal Regulation Requirements.--(1) The Secretary shall have 
the authority to approve or disapprove tribal regulations required 
under this subsection. The Secretary shall approve such tribal 
regulations if they are comprehensive in nature, including provisions 
that address--
            (A) securing necessary information from the lessee or 
        right-of-way applicant;
            (B) term of the conveyance;
            (C) amendments and renewals;
            (D) consideration for the lease or right-of-way;
            (E) technical or other relevant requirements;
            (F) requirements for environmental review as set forth in 
        paragraph (3);
            (G) requirements for complying with all applicable 
        environmental laws; and
            (H) final approval authority.
    (2) No lease or right-of-way shall be valid unless authorized in 
compliance with the approved tribal regulations.
    (3) An Indian tribe, as a condition of securing Secretarial 
approval as contemplated in paragraph (1), must establish an 
environmental review process that includes the following--
            (A) an identification and evaluation of all significant 
        environmental impacts of the proposed action as compared to a 
        no action alternative;
            (B) identification of proposed mitigation;
            (C) a process for ensuring that the public is informed of 
        and has an opportunity to comment on the proposed action prior 
        to tribal approval of the lease or right-of-way; and
            (D) sufficient administrative support and technical 
        capability to carry out the environmental review process.
    (4) The Secretary shall review and approve or disapprove the 
regulations of the Indian tribe within 180 days of the submission of 
such regulations to the Secretary. Any disapproval of such regulations 
by the Secretary shall be accompanied by written documentation that 
sets forth the basis for the disapproval. The 180-day period may be 
extended by the Secretary after consultation with the Indian tribe.
    (5) If the Indian tribe executes a lease or right-of-way pursuant 
to tribal regulations required under this subsection, the Indian tribe 
shall provide the Secretary with--
            (A) a copy of the lease or right-of-way document and all 
        amendments and renewals thereto; and
            (B) in the case of regulations or a lease or right-of-way 
        that permits payment to be made directly to the Indian tribe, 
        documentation of the payments sufficient to enable the 
        Secretary to discharge the trust responsibility of the United 
        States as appropriate under existing law.
    (6) The United States shall not be liable for losses sustained by 
any party to a lease executed pursuant to tribal regulations under this 
subsection, including the Indian tribe.
    (7)(A) An interested party may, after exhaustion of tribal 
remedies, submit, in a timely manner, a petition to the Secretary to 
review the compliance of the Indian tribe with any tribal regulations 
approved under this subsection. If upon such review, the Secretary 
determines that the regulations were violated, the Secretary may take 
such action as may be necessary to remedy the violation, including 
rescinding or holding the lease or right-of-way in abeyance until the 
violation is cured. The Secretary may also rescind the approval of the 
tribal regulations and reassume the responsibility for approval of 
leases or rights-of-way associated with the facilities addressed in 
this section.
    (B) If the Secretary seeks to remedy a violation described in 
subparagraph (A), the Secretary shall--
            (i) make a written determination with respect to the 
        regulations that have been violated;
            (ii) provide the Indian tribe with a written notice of the 
        alleged violation together with such written determination; and
            (iii) prior to the exercise of any remedy or the rescission 
        of the approval of the regulations involved and reassumption of 
        the lease or right-of-way approval responsibility, provide the 
        Indian tribe with a hearing and a reasonable opportunity to 
        cure the alleged violation.
    (C) The tribe shall retain all rights to appeal as provided by 
regulations promulgated by the Secretary.
    (f) Agreements.--(1) Agreements between an Indian tribe and a 
business entity that are directly associated with the development of 
electric generation, transmission or distribution facilities, or 
facilities to process or refine renewable or nonrenewable energy 
resources developed on tribal lands, shall not separately require the 
approval of the Secretary pursuant to section 18 of title 25, United 
States Code, so long as the activity that is the subject of the 
agreement has been the subject of an environmental review process 
pursuant to subsection (e) of this section.
    (2) The United States shall not be liable for any losses or damages 
sustained by any party, including the Indian tribe, that are associated 
with an agreement entered into under this subsection.
    (g) Disclaimer.--Nothing in this section is intended to modify or 
otherwise affect the applicability of any provision of the Indian 
Mineral Leasing Act of 1938 (25 U.S.C. 396a-396g); Indian Mineral 
Development Act of 1982 (25 U.S.C. 2101-2108); Surface Mining Control 
and Reclamation Act of 1977 (30 U.S.C. 1201-1328); any amendments 
thereto; or any other laws not specifically addressed in this section.

SEC. 405. INDIAN MINERAL DEVELOPMENT ACT REVIEW.

    (a) In General.--The Secretary of the Interior shall conduct a 
review of the activities that have been conducted by the governments of 
Indian tribes under the authority of the Indian Mineral Development Act 
of 1982 (25 U.S.C. 2101 et seq.).
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Secretary shall transmit to the Committee on Resources 
of the House of Representatives and the Committee on Indian Affairs and 
the Committee on Energy and Natural Resources of the Senate a report 
containing--
            (1) the results of the review;
            (2) recommendations designed to help ensure that Indian 
        tribes have the opportunity to develop their nonrenewable 
        energy resources; and
            (3) an analysis of the barriers to the development of 
        energy resources on Indian land, including Federal policies and 
        regulations, and make recommendations regarding the removal of 
        those barriers.
    (c) Consultation.--The Secretary shall consult with Indian tribes 
on a government-to-government basis in developing the report and 
recommendations as provided in this subsection.

SEC. 406. RENEWABLE ENERGY STUDY.

    (a) In General.--Not later than 2 years after the date of the 
enactment of this Act, and once every 2 years thereafter, the Secretary 
of Energy shall transmit to the Committees on Energy and Commerce and 
Resources of the House of Representatives and the Committees on Energy 
and Natural Resources and Indian Affairs of the Senate a report on 
energy consumption and renewable energy development potential on Indian 
land. The report shall identify barriers to the development of 
renewable energy by Indian tribes, including Federal policies and 
regulations, and make recommendations regarding the removal of such 
barriers.
    (b) Consultation.--The Secretary shall consult with Indian tribes 
on a government-to-government basis in developing the report and 
recommendations as provided in this section.

SEC. 407. FEDERAL POWER MARKETING ADMINISTRATIONS.

    Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501) (as 
amended by section 201) is amended by adding at the end the following:

``SEC. 2608. FEDERAL POWER MARKETING ADMINISTRATIONS.

    ``(a) Definition of Administrator.--In this section, the term 
`Administrator' means--
            ``(1) the Administrator of the Bonneville Power 
        Administration; or
            ``(2) the Administrator of the Western Area Power 
        Administration.
    ``(b) Assistance for Transmission Studies.--(1) Each Administrator 
may provide technical assistance to Indian tribes seeking to use the 
high-voltage transmission system for delivery of electric power. The 
costs of such technical assistance shall be funded--
            ``(A) by the Administrator using non-reimbursable funds 
        appropriated for this purpose, or
            ``(B) by the Indian tribe.
    ``(2) Priority for assistance for transmission studies.--In 
providing discretionary assistance to Indian tribes under paragraph 
(1), each Administrator shall give priority in funding to Indian tribes 
that have limited financial capability to conduct such studies.
    ``(c) Power Allocation Study.--(1) Not later than 2 years after the 
date of enactment of this Act, the Secretary of Energy shall transmit 
to the Committees on Energy and Commerce and Resources of the House of 
Representatives and the Committees on Energy and Natural Resources and 
Indian Affairs of the Senate a report on Indian tribes' utilization of 
Federal power allocations of the Western Area Power Administration, or 
power sold by the Southwestern Power Administration, and the Bonneville 
Power Administration to or for the benefit of Indian tribes in their 
service areas. The report shall identify--
            ``(A) the amount of power allocated to tribes by the 
        Western Area Power Administration, and how the benefit of that 
        power is utilized by the tribes;
            ``(B) the amount of power sold to tribes by other Power 
        Marketing Administrations; and
            ``(C) existing barriers that impede tribal access to and 
        utilization of Federal power, and opportunities to remove such 
        barriers and improve the ability of the Power Marketing 
        Administration to facilitate the utilization of Federal power 
        by Indian tribes.
    ``(2) The Power Marketing Administrations shall consult with Indian 
tribes on a government-to-government basis in developing the report 
provided in this section.
    ``(d) Authorization for Appropriation.--There are authorized to be 
appropriated to the Secretary of Energy such sums as may be necessary 
to carry out the purposes of this section.''.

SEC. 408. FEASIBILITY STUDY OF COMBINED WIND AND HYDROPOWER 
              DEMONSTRATION PROJECT.

    (a) Study.--The Secretary of Energy, in coordination with the 
Secretary of the Army and the Secretary of the Interior, shall conduct 
a study of the cost and feasibility of developing a demonstration 
project that would use wind energy generated by Indian tribes and 
hydropower generated by the Army Corps of Engineers on the Missouri 
River to supply firming power to the Western Area Power Administration.
    (b) Scope of Study.--The study shall--
            (1) determine the feasibility of the blending of wind 
        energy and hydropower generated from the Missouri River dams 
        operated by the Army Corps of Engineers;
            (2) review historical purchase requirements and projected 
        purchase requirements for firming and the patterns of 
        availability and use of firming energy;
            (3) assess the wind energy resource potential on tribal 
        lands and projected cost savings through a blend of wind and 
        hydropower over a thirty-year period;
            (4) include a preliminary interconnection study and a 
        determination of resource adequacy of the Upper Great Plains 
        Region of the Western Area Power Administration;
            (5) determine seasonal capacity needs and associated 
        transmission upgrades for integration of tribal wind 
        generation; and
            (6) include an independent tribal engineer as a study team 
        member.
    (c) Report.--The Secretary of Energy and Secretary of the Army 
shall submit a report to Congress not later than 1 year after the date 
of enactment of this title. The Secretaries shall include in the 
report--
            (1) an analysis of the potential energy cost savings to the 
        customers of the Western Area Power Administration through the 
        blend of wind and hydropower;
            (2) an evaluation of whether a combined wind and hydropower 
        system can reduce reservoir fluctuation, enhance efficient and 
        reliable energy production and provide Missouri River 
        management flexibility;
            (3) recommendations for a demonstration project which the 
        Western Area Power Administration could carry out in 
        partnership with an Indian tribal government or tribal 
        government energy consortium to demonstrate the feasibility and 
        potential of using wind energy produced on Indian lands to 
        supply firming energy to the Western Area Power Administration 
        or other Federal power marketing agency; and
            (4) an identification of the economic and environmental 
        benefits to be realized through such a Federal-tribal 
        partnership and identification of how such a partnership could 
        contribute to the energy security of the United States.
    (d) Consultation.--The Secretary shall consult with Indian tribes 
on a government-to-government basis in developing the report and 
recommendations provided in this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated $500,000 to carry out this section, which shall remain 
available until expended. All costs incurred by the Western Area Power 
Administration associated with performing the tasks required under this 
section shall be nonreimbursable.

                         TITLE V--NUCLEAR POWER

             Subtitle A--Price-Anderson Act Reauthorization

SEC. 501. SHORT TITLE.

     This subtitle may be cited as the ``Price-Anderson Amendments Act 
of 2002''.

SEC. 502. EXTENSION OF INDEMNIFICATION AUTHORITY.

    (a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is 
amended--
            (1) in the subsection heading, by striking ``Licenses'' and 
        inserting ``Licensees''; and
            (2) by striking ``August 1, 2002'' each place it appears 
        and inserting ``August 1, 2012''.
    (b) Indemnification of Department of Energy Contractors.--Section 
170d.(1)(A) of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(1)(A)) 
is amended by striking ``, until August 1, 2002,''.
    (c) Indemnification of Nonprofit Educational Institutions.--Section 
170k. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(k)) is amended 
by striking ``August 1, 2002'' each place it appears and inserting 
``August 1, 2012''.

SEC. 503. DEPARTMENT OF ENERGY LIABILITY LIMIT.

    (a) Indemnification of Department of Energy Contractors.--Section 
170d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) is amended 
by striking paragraph (2) and inserting the following:
            ``(2) In agreements of indemnification entered into under 
        paragraph (1), the Secretary--
                    ``(A) may require the contractor to provide and 
                maintain financial protection of such a type and in 
                such amounts as the Secretary shall determine to be 
                appropriate to cover public liability arising out of or 
                in connection with the contractual activity; and
                    ``(B) shall indemnify the persons indemnified 
                against such liability above the amount of the 
                financial protection required, in the amount of 
                $10,000,000,000 (subject to adjustment for inflation 
                under subsection t.), in the aggregate, for all persons 
                indemnified in connection with such contract and for 
                each nuclear incident, including such legal costs of 
                the contractor as are approved by the Secretary.''.
    (b) Contract Amendments.--Section 170d. of the Atomic Energy Act of 
1954 (42 U.S.C. 2210(d)) is further amended by striking paragraph (3) 
and inserting the following:
            ``(3) All agreements of indemnification under which the 
        Department of Energy (or its predecessor agencies) may be 
        required to indemnify any person under this section shall be 
        deemed to be amended, on the date of the enactment of the 
        Price-Anderson Amendments Act of 2002, to reflect the amount of 
        indemnity for public liability and any applicable financial 
        protection required of the contractor under this subsection.''.
    (c) Liability Limit.--Section 170e.(1)(B) of the Atomic Energy Act 
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
            (1) by striking ``the maximum amount of financial 
        protection required under subsection b. or''; and
            (2) by striking ``paragraph (3) of subsection d., whichever 
        amount is more'' and inserting ``paragraph (2) of subsection 
        d.''.

SEC. 504. INCIDENTS OUTSIDE THE UNITED STATES.

    (a) Amount of Indemnification.--Section 170d.(5) of the Atomic 
Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended by striking 
``$100,000,000'' and inserting ``$500,000,000''.
    (b) Liability Limit.--Section 170e.(4) of the Atomic Energy Act of 
1954 (42 U.S.C. 2210(e)(4)) is amended by striking ``$100,000,000'' and 
inserting ``$500,000,000''.

SEC. 505. REPORTS.

    Section 170p. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(p)) 
is amended by striking ``August 1, 1998'' and inserting ``August 1, 
2008''.

SEC. 506. INFLATION ADJUSTMENT.

    Section 170t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) 
is amended--
            (1) by redesignating paragraph (2) as paragraph (3); and
            (2) by adding after paragraph (1) the following:
            ``(2) The Secretary shall adjust the amount of 
        indemnification provided under an agreement of indemnification 
        under subsection d. not less than once during each 5-year 
        period following July 1, 2002, in accordance with the aggregate 
        percentage change in the Consumer Price Index since--
                    ``(A) that date, in the case of the first 
                adjustment under this paragraph; or
                    ``(B) the previous adjustment under this 
                paragraph.''.

SEC. 507. CIVIL PENALTIES.

    (a) Repeal of Automatic Remission.--Section 234Ab.(2) of the Atomic 
Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking the 
last sentence.
    (b) Limitation for Not-For-Profit Institutions.--Subsection d. of 
section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 2282a(d)) is 
amended to read as follows:
            ``d.(1) Notwithstanding subsection a., in the case of any 
        not-for-profit contractor, subcontractor, or supplier, the 
        total amount of civil penalties assessed under subsection a. 
        may not exceed the total amount of fees paid within any one-
        year period (as determined by the Secretary) under the contract 
        under which the violation occurs.
            ``(2) For purposes of this section, the term `not-for-
        profit' means that no part of the net earnings of the 
        contractor, subcontractor, or supplier inures, or may lawfully 
        inure, to the benefit of any natural person or for-profit 
        artificial person.''.
    (c) Effective Date.--The amendments made by this section shall not 
apply to any violation of the Atomic Energy Act of 1954 occurring under 
a contract entered into before the date of enactment of this section.

SEC. 508. TREATMENT OF MODULAR REACTORS.

    Section 170b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) 
is amended by adding at the end the following:
            ``(5)(A) For purposes of this section only, the Commission 
        shall consider a combination of facilities described in 
        subparagraph (B) to be a single facility having a rated 
        capacity of 100,000 electrical kilowatts or more.
            ``(B) A combination of facilities referred to in 
        subparagraph (A) is two or more facilities located at a single 
        site, each of which has a rated capacity of 100,000 electrical 
        kilowatts or more but not more than 300,000 electrical 
        kilowatts, with a combined rated capacity of not more than 
        1,300,000 electrical kilowatts.''.

SEC. 509. EFFECTIVE DATE.

    The amendments made by sections 503(a) and 504 do not apply to any 
nuclear incident that occurs before the date of the enactment of this 
subtitle.

                  Subtitle B--Miscellaneous Provisions

SEC. 511. URANIUM SALES.

    (a) Inventory Sales.--Section 3112(d) of the USEC Privatization Act 
(42 U.S.C. 2297h-10(d)) is amended to read as follows:
    ``(d) Inventory Sales.--(1) In addition to the transfers authorized 
under subsections (b), (c), and (e), the Secretary may, from time to 
time, sell or transfer uranium (including natural uranium concentrates, 
natural uranium hexafluoride, enriched uranium, and depleted uranium) 
from the Department of Energy's stockpile.
    ``(2) Except as provided in subsections (b), (c), and (e), the 
Secretary may not deliver uranium in any form for consumption by end 
users in any year in excess of the following amounts:

                ``Annual Maximum Deliveries to End Users

                                                         (Million lbs. 
                                             U<INF>3</INF>O<INF>8</INF>
    ``Year:                                                 equivalent)
                2003 through 2009-.........................          3 
                2010-......................................          5 
                2011-......................................          5 
                2012-......................................          7 
                2013 and each year thereafter-.............         10.
    ``(3) Except as provided in subsections (b), (c), and (e), no sale 
or transfer of uranium in any form shall be made unless--
            ``(A) the President determines that the material is not 
        necessary for national security needs;
            ``(B) the Secretary determines, based on the written views 
        of the Secretary of State and the Assistant to the President 
        for National Security Affairs, that the sale or transfer will 
        not adversely affect the national security interests of the 
        United States;
            ``(C) the Secretary determines that the sale of the 
        material will not have an adverse material impact on the 
        domestic uranium mining, conversion, or enrichment industry, 
        taking into account the sales of uranium under the Russian HEU 
        Agreement and the Suspension Agreement; and
            ``(D) the price paid to the Secretary will not be less than 
        the fair market value of the material.''.
    (b) Exempt Transfers and Sales.--Section 3112(e) of the USEC 
Privatization Act (42 U.S.C. 2297h-10(e)) is amended to read as 
follows:
    ``(e) Exempt Sales or Transfers.--Notwithstanding subsection 
(d)(2), the Secretary may transfer or sell uranium--
            ``(1) to the Tennessee Valley Authority for use pursuant to 
        the Department of Energy's highly enriched uranium or tritium 
        program, to the extent provided by law;
            ``(2) to research and test reactors under the University 
        Reactor Fuel Assistance and Support Program or the Reduced 
        Enrichment for Research and Test Reactors Program;
            ``(3) to USEC Inc. to replace contaminated uranium received 
        from the Department of Energy when the United States Enrichment 
        Corporation was privatized;
            ``(4) to any person for emergency purposes in the event of 
        a disruption in supply to end users in the United States; and
            ``(5) to any person for national security purposes, as 
        determined by the Secretary.''.

SEC. 512. REAUTHORIZATION OF THORIUM REIMBURSEMENT.

    (a) Reimbursement of Thorium Licensees.-- Section 1001(b)(2)(C) of 
the Energy Policy Act of 1992 (42 U.S.C. 2296a) is amended--
            (1) by striking ``$140,000,000'' and inserting 
        ``$365,000,000''; and
            (2) by adding at the end the following: ``Such payments 
        shall not exceed the following amounts:
                            ``(i) $90,000,000 in fiscal year 2002.
                            ``(ii) $55,000,000 in fiscal year 2003.
                            ``(iii) $20,000,000 in fiscal year 2004.
                            ``(iv) $20,000,000 in fiscal year 2005.
                            ``(v) $20,000,000 in fiscal year 2006.
                            ``(vi) $20,000,000 in fiscal year 2007.
                Any amounts authorized to be paid in a fiscal year 
                under this subparagraph that are not paid in that 
                fiscal year may be paid in subsequent fiscal years.''.
    (b) Authorization of Appropriations.--Section 1003(a) of the Energy 
Policy Act of 1992 (42 U.S.C. 2296a-2) is amended by striking 
``$490,000,000'' and inserting ``$715,000,000''.
    (c) Decontamination and Decommissioning Fund.--Section 1802(a) of 
the Atomic Energy Act of 1954 (42 U.S.C. 2297g-1(a)) is amended--
            (1) by striking ``$488,333,333'' and inserting 
        ``$518,233,333''; and
            (2) by inserting after ``inflation'' the following: 
        ``beginning on the date of enactment of the Energy Policy Act 
        of 1992''.

SEC. 513. FAST FLUX TEST FACILITY.

    The Secretary of Energy shall not reactivate the Fast Flux Test 
Facility to conduct--
            (1) any atomic energy defense activity,
            (2) any space-related mission, or
            (3) any program for the production or utilization of 
        nuclear material if the Secretary has determined, in a record 
        of decision, that the program can be carried out at existing 
        operating facilities.

SEC. 514. NUCLEAR POWER 2010.

    (a) Definitions.--In this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (2) Office.--The term ``Office'' means the Office of 
        Nuclear Energy Science and Technology of the Department of 
        Energy.
            (3) Director.--The term ``Director'' means the Director of 
        the Office of Nuclear Energy Science and Technology of the 
        Department of Energy.
            (4) Program.--The term ``Program'' means the Nuclear Power 
        2010 Program.
    (b) Establishment.--The Secretary shall carry out a program, to be 
managed by the Director.
    (c) Purpose.--The program shall aggressively pursue those 
activities that will result in regulatory approvals and design 
completion in a phased approach, with joint government/industry cost 
sharing, which would allow for the construction and startup of new 
nuclear plants in the United States by 2010.
    (d) Activities.--In carrying out the program, the Director shall--
            (1) issue a solicitation to industry seeking proposals from 
        joint venture project teams comprised of reactor vendors and 
        power generation companies to participate in the Nuclear Power 
        2010 program;
            (2) seek innovative business arrangements, such as 
        consortia among designers, constructors, nuclear steam supply 
        systems and major equipment suppliers, and plant owner/
        operators, with strong and common incentives to build and 
        operate new plants in the United States;
            (3) conduct the Nuclear Power 2010 program consistent with 
        the findings of ``A Roadmap to Deploy New Nuclear Power Plants 
        in the United States by 2010'' issued by the Near-Term 
        Deployment Working Group of the Nuclear Energy Research 
        Advisory Committee of the Department of Energy;
            (4) rely upon the expertise and capabilities of the 
        Department of Energy national laboratories and sites in the 
        areas of advanced nuclear fuel cycles and fuels testing, giving 
        consideration to existing lead laboratory designations and the 
        unique capabilities and facilities available at each national 
        laboratory and site;
            (5) pursue deployment of both water-cooled and gas-cooled 
        reactor designs on a dual track basis that will provide maximum 
        potential for the success of both;
            (6) include participation of international collaborators in 
        research and design efforts where beneficial; and
            (7) seek to accomplish the essential regulatory and 
        technical work, both generic and design-specific, to make 
        possible new nuclear plants within this decade.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out the purposes of this section 
such sums as are necessary for fiscal year 2003 and for each fiscal 
year thereafter.

SEC. 515. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

    (a) Findings.--Congress finds that--
            (1) before the Federal Government takes any irreversible 
        action relating to the disposal of spent nuclear fuel, Congress 
        must determine whether the spent fuel in the repository should 
        be treated as waste subject to permanent burial or should be 
        considered an energy resource that is needed to meet future 
        energy requirements; and
            (2) national policy on spent nuclear fuel may evolve with 
        time as improved technologies for spent fuel are developed or 
        as national energy needs evolve.
    (b) Definitions.--In this section:
            (1) Associate director.--The term ``Associate Director'' 
        means the Associate Director of the Office.
            (2) Office.--The term ``Office'' means the Office of Spent 
        Nuclear Fuel Research within the Office of Nuclear Energy 
        Science and Technology of the Department of Energy.
    (c) Establishment.--There is established an Office of Spent Nuclear 
Fuel Research within the Office of Nuclear Energy Science and 
Technology of the Department of Energy.
    (d) Head of Office.--The Office shall be headed by the Associate 
Director, who shall be a member of the Senior Executive Service 
appointed by the Director of the Office of Nuclear Energy Science and 
Technology, and compensated at a rate determined by applicable law.
    (e) Duties of the Associate Director.--
            (1) In general.--The Associate Director shall be 
        responsible for carrying out an integrated research, 
        development, and demonstration program on technologies for 
        treatment, recycling, and disposal of high-level nuclear 
        radioactive waste and spent nuclear fuel, subject to the 
        general supervision of the Secretary.
            (2) Participation.--The Associate Director shall coordinate 
        the participation of national laboratories, universities, the 
        commercial nuclear industry, and other organizations in the 
        investigation of technologies for the treatment, recycling, and 
        disposal of spent nuclear fuel and high-level radioactive 
        waste.
            (3) Activities.--The Associate Director shall--
                    (A) develop a research plan to provide 
                recommendations by 2015;
                    (B) identify promising technologies for the 
                treatment, recycling, and disposal of spent nuclear 
                fuel and high-level radioactive waste;
                    (C) conduct research and development activities for 
                promising technologies;
                    (D) ensure that all activities include as key 
                objectives minimization of proliferation concerns and 
                risk to the health of the general public or site 
                workers, as well as development of cost-effective 
                technologies;
                    (E) require research on both reactor- and 
                accelerator-based transmutation systems;
                    (F) require research on advanced processing and 
                separations;
                    (G) include participation of international 
                collaborators in research efforts, and provide funding 
                to a collaborator that brings unique capabilities not 
                available in the United States if the country in which 
                the collaborator is located is unable to provide for 
                their support; and
                    (H) ensure that research efforts are coordinated 
                with research on advanced fuel cycles and reactors 
                conducted by the Office of Nuclear Energy Science and 
                Technology.
    (f) Grant and Contract Authority.--The Secretary may make grants, 
or enter into contracts, for the purposes of the research projects and 
activities described in this section.
    (g) Report.--The Associate Director shall annually submit to 
Congress a report on the activities and expenditures of the Office that 
describes the progress being made in achieving the objectives of this 
section.

SEC. 516. DECOMMISSIONING PILOT PROGRAM.

    (a) Pilot Program.--The Secretary of Energy shall establish a 
decommissioning pilot program to decommission and decontaminate the 
sodium-cooled fast breeder experimental test-site reactor located in 
northwest Arkansas in accordance with the decommissioning activities 
contained in the August 31, 1998, Department of Energy report on the 
reactor.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $16,000,000.

                  Subtitle C--Growth of Nuclear Energy

SEC. 521. COMBINED LICENSE PERIODS.

    Section 103c. of the Atomic Energy Act of 1954 (42 U.S.C. 2133(c)) 
is amended--
            (1) by striking ``c. Each such'' and inserting the 
        following:
    ``c. License Period.--
            ``(1) In general.--Each such''; and
            (2) by adding at the end the following:
            ``(2) Combined licenses.--In the case of a combined 
        construction and operating license issued under section 185(b), 
        the duration of the operating phase of the license period shall 
        not be less than the duration of the operating license if 
        application had been made for separate construction and 
        operating licenses.''.

                   Subtitle D--NRC Regulatory Reform

SEC. 531. ANTITRUST REVIEW.

    (a) In General.--Section 105 of the Atomic Energy Act of 1954 (42 
U.S.C. 2135) is amended by adding at the end the following:
    ``d. Antitrust Laws.--
            ``(1) Notification.--Except as provided in paragraph (4), 
        when the Commission proposes to issue a license under section 
        103 or 104b., the Commission shall notify the Attorney General 
        of the proposed license and the proposed terms and conditions 
        of the license.
            ``(2) Action by the attorney general.--Within a reasonable 
        time (but not more than 90 days) after receiving notification 
        under paragraph (1), the Attorney General shall submit to the 
        Commission and publish in the Federal Register a determination 
        whether, insofar as the Attorney General is able to determine, 
        the proposed license would tend to create or maintain a 
        situation inconsistent with the antitrust laws.
            ``(3) Information.--On the request of the Attorney General, 
        the Commission shall furnish or cause to be furnished such 
        information as the Attorney General determines to be 
        appropriate or necessary to enable the Attorney General to make 
        the determination under paragraph (2).
            ``(4) Applicability.--This subsection shall not apply to 
        such classes or type of licenses as the Commission, with the 
        approval of the Attorney General, determines would not 
        significantly affect the activities of a licensee under the 
        antitrust laws.''.
    (b) Conforming Amendment.--Section 105c. of the Atomic Energy Act 
of 1954 (42 U.S.C. 2135(c)) is amended by adding at the end the 
following:
            ``(9) Applicability.--This subsection does not apply to an 
        application for a license to construct or operate a utilization 
        facility under section 103 or 104b. that is filed on or after 
        the date of enactment of subsection d.''.

SEC. 532. DECOMMISSIONING.

    (a) Authority Over Former Licensees for Decommissioning Funding.--
Section 161i. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(i)) is 
amended--
            (1) by striking ``and (3)'' and inserting ``(3)''; and
            (2) by inserting before the semicolon at the end the 
        following: ``, and (4) to ensure that sufficient funds will be 
        available for the decommissioning of any production or 
        utilization facility licensed under section 103 or 104b., 
        including standards and restrictions governing the control, 
        maintenance, use, and disbursement by any former licensee under 
        this Act that has control over any fund for the decommissioning 
        of the facility''.
    (b) Treatment of Nuclear Reactor Financial Obligations.--Section 
523 of title 11, United States Code, is amended by adding at the end 
the following:
    ``(f) Treatment of Nuclear Reactor Financial Obligations.--
Notwithstanding any other provision of this title--
            ``(1) any funds or other assets held by a licensee or 
        former licensee of the Nuclear Regulatory Commission, or by any 
        other person, to satisfy the responsibility of the licensee, 
        former licensee, or any other person to comply with a 
        regulation or order of the Nuclear Regulatory Commission 
        governing the decontamination and decommissioning of a nuclear 
        power reactor licensed under section 103 or 104b. of the Atomic 
        Energy Act of 1954 (42 U.S.C. 2133, 2134(b)) shall not be used 
        to satisfy the claim of any creditor in any proceeding under 
        this title, other than a claim resulting from an activity 
        undertaken to satisfy that responsibility, until the 
        decontamination and decommissioning of the nuclear power 
        reactor is completed to the satisfaction of the Nuclear 
        Regulatory Commission;
            ``(2) obligations of licensees, former licensees, or any 
        other person to use funds or other assets to satisfy a 
        responsibility described in paragraph (1) may not be rejected, 
        avoided, or discharged in any proceeding under this title or in 
        any liquidation, reorganization, receivership, or other 
        insolvency proceeding under Federal or State law; and
            ``(3) private insurance premiums and standard deferred 
        premiums held and maintained in accordance with section 170b. 
        of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) shall not 
        be used to satisfy the claim of any creditor in any proceeding 
        under this title, until the indemnification agreement executed 
        in accordance with section 170c. of that Act (42 U.S.C. 
        2210(c)) is terminated.''.

                    Subtitle E--NRC Personnel Crisis

SEC. 541. ELIMINATION OF PENSION OFFSET.

    Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 2201) is 
amended by adding at the end the following:
    ``y. exempt from the application of sections 8344 and 8468 of title 
5, United States Code, an annuitant who was formerly an employee of the 
Commission who is hired by the Commission as a consultant, if the 
Commission finds that the annuitant has a skill that is critical to the 
performance of the duties of the Commission.''.

SEC. 542. NRC TRAINING PROGRAM.

    (a) In General.--In order to maintain the human resource investment 
and infrastructure of the United States in the nuclear sciences, health 
physics, and engineering fields, in accordance with the statutory 
authorities of the Commission relating to the civilian nuclear energy 
program, the Nuclear Regulatory Commission shall carry out a training 
and fellowship program to address shortages of individuals with 
critical safety skills.
    (b) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section $1,000,000 for each of fiscal years 2003 
        through 2006.
            (2) Availability.--Funds made available under paragraph (1) 
        shall remain available until expended.

     DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                    TITLE VI--OIL AND GAS PRODUCTION

SEC. 601. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM 
              RESERVE.

    (a) Amendment to Title I of the Energy Policy and Conservation 
Act.--Title I of the Energy Policy and Conservation Act (42 U.S.C. 6211 
et seq.) is amended--
            (1) by striking section 166 (42 U.S.C. 6246) and 
        inserting--
    ``Sec. 166. There are authorized to be appropriated to the 
Secretary such sums as may be necessary to carry out this part, to 
remain available until expended.''; and
            (2) by striking part E (42 U.S.C. 6251; relating to the 
        expiration of title I of the Act) and its heading.
    (b) Amendment to Title II of the Energy Policy and Conservation 
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C. 
6271 et seq.) is amended--
            (1) by striking section 256(h) (42 U.S.C. 6276(h)) and 
        inserting--
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to carry 
out this part, to remain available until expended.'';
            (2) by striking section 273(e) (42 U.S.C. 6283(e); relating 
        to the expiration of summer fill and fuel budgeting programs); 
        and
            (3) by striking part D (42 U.S.C. 6285; relating to the 
        expiration of title II of the Act) and its heading.
    (c) Technical Amendments.--The table of contents for the Energy 
Policy and Conservation Act is amended by striking the items relating 
to part D of title I and part D of title II.

SEC. 602. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL AND GAS.

    (a) Timely Action on Leases and Permits.--To ensure timely action 
on oil and gas leases and applications for permits to drill on lands 
otherwise available for leasing, the Secretary of the Interior shall--
            (1) ensure expeditious compliance with the requirements of 
        section 102(2)(C) of the National Environmental Policy Act of 
        1969 (42 U.S.C. 4332(2)(C));
            (2) improve consultation and coordination with the States; 
        and
            (3) improve the collection, storage, and retrieval of 
        information related to such leasing activities.
    (b) Improved Enforcement.--The Secretary shall improve inspection 
and enforcement of oil and gas activities, including enforcement of 
terms and conditions in permits to drill.
    (c) Authorization of Appropriations.--For each of the fiscal years 
2003 through 2006, in addition to amounts otherwise authorized to be 
appropriated for the purpose of carrying out section 17 of the Mineral 
Leasing Act (30 U.S.C. 226), there are authorized to be appropriated to 
the Secretary of the Interior--
            (1) $40,000,000 for the purpose of carrying out paragraphs 
        (1) through (3) of subsection (a); and
            (2) $20,000,000 for the purpose of carrying out subsection 
        (b).

SEC. 603. OIL AND GAS LEASE ACREAGE LIMITATIONS.

    Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 184(d)(1)) 
is amended by inserting after ``acreage held in special tar sand 
areas'' the following: ``as well as acreage under any lease any portion 
of which has been committed to a federally approved unit or cooperative 
plan or communitization agreement, or for which royalty, including 
compensatory royalty or royalty in kind, was paid in the preceding 
calendar year,''.

SEC. 604. ORPHANED AND ABANDONED WELLS ON FEDERAL LAND.

    (a) Establishment.--(1) The Secretary of the Interior, in 
cooperation with the Secretary of Agriculture, shall establish a 
program to ensure within 3 years after the date of enactment of this 
Act, remediation, reclamation, and closure of orphaned oil and gas 
wells located on lands administered by the land management agencies 
within the Department of the Interior and the United States Forest 
Service that are--
            (A) abandoned;
            (B) orphaned; or
            (C) idled for more than 5 years and having no beneficial 
        use.
    (2) The program shall include a means of ranking critical sites for 
priority in remediation based on potential environmental harm, other 
land use priorities, and public health and safety.
    (3) The program shall provide that responsible parties be 
identified wherever possible and that the costs of remediation be 
recovered.
    (4) In carrying out the program, the Secretary of the Interior 
shall work cooperatively with the Secretary of Agriculture and the 
States within which the Federal lands are located, and shall consult 
with the Secretary of Energy, and the Interstate Oil and Gas Compact 
Commission.
    (b) Plan.--Within 6 months from the date of enactment of this 
section, the Secretary of the Interior, in cooperation with the 
Secretary of Agriculture, shall prepare a plan for carrying out the 
program established under subsection (a). Copies of the plan shall be 
transmitted to the Committee on Energy and Natural Resources of the 
Senate and the Committee on Resources of the House of Representatives.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of the Interior $5,000,000 for each of 
fiscal years 2003 through 2005 to carry out the activities provided for 
in this section.

SEC. 605. ORPHANED AND ABANDONED OIL AND GAS WELL PROGRAM.

    (a) Establishment.--The Secretary of Energy shall establish a 
program to provide technical assistance to the various oil and gas 
producing States to facilitate State efforts over a 10-year period to 
ensure a practical and economical remedy for environmental problems 
caused by orphaned and abandoned exploration or production well sites 
on State and private lands. The Secretary shall work with the States, 
through the Interstate Oil and Gas Compact Commission, to assist the 
States in quantifying and mitigating environmental risks of onshore 
abandoned and orphaned wells on State and private lands.
    (b) Program Elements.--The program should include--
            (1) mechanisms to facilitate identification of responsible 
        parties wherever possible;
            (2) criteria for ranking critical sites based on factors 
        such as other land use priorities, potential environmental harm 
        and public visibility; and
            (3) information and training programs on best practices for 
        remediation of different types of sites.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy for the activities under this 
section $5,000,000 for each of fiscal years 2003 through 2005 to carry 
out the provisions of this section.

SEC. 606. OFFSHORE DEVELOPMENT.

    Section 5 of the Outer Continental Shelf Lands Act of 1953 (43 
U.S.C. 1334) is amended by adding at the end the following:
    ``(k) Suspension of Operations for Subsalt Exploration.--
Notwithstanding any other provision of law or regulation, the Secretary 
may grant a request for a suspension of operations under any lease to 
allow the lessee to reprocess or reinterpret geologic or geophysical 
data beneath allocthonous salt sheets, when in the Secretary's judgment 
such suspension is necessary to prevent waste caused by the drilling of 
unnecessary wells, and to maximize ultimate recovery of hydrocarbon 
resources under the lease. Such suspension shall be limited to the 
minimum period of time the Secretary determines is necessary to achieve 
the objectives of this subsection.''.

SEC. 607. COALBED METHANE STUDY.

    (a) Study.--The National Academy of Sciences shall conduct a study 
on the effects of coalbed methane production on surface and water 
resources.
    (b) Data Analysis.--The study shall analyze available hydrogeologic 
and water quality data, along with other pertinent environmental or 
other information to determine--
            (1) adverse effects associated with surface or subsurface 
        disposal of waters produced during extraction of coalbed 
        methane;
            (2) depletion of groundwater aquifers or drinking water 
        sources associated with production of coalbed methane;
            (3) any other significant adverse impacts to surface or 
        water resources associated with production of coalbed methane; 
        and
            (4) production techniques or other factors that can 
        mitigate adverse impacts from coalbed methane development.
    (c) Recommendations.--The study shall analyze existing Federal and 
State laws and regulations, and make recommendations as to changes, if 
any, to Federal law necessary to address adverse impacts to surface or 
water resources attributable to coalbed methane development.
    (d) Completion of Study.--The National Academy of Sciences shall 
submit the study to the Secretary of the Interior within 18 months 
after the date of enactment of this Act, and shall make the study 
available to the public at the same time.
    (e) Report to Congress.--The Secretary of the Interior shall report 
to Congress within 6 months of her receipt of the study on--
            (1) the findings and recommendations of the study;
            (2) the Secretary's agreement or disagreement with each of 
        its findings and recommendations; and
            (3) any recommended changes in funding to address the 
        effects of coalbed methane production on surface and water 
        resources.

SEC. 608. FISCAL POLICIES TO MAXIMIZE RECOVERY OF DOMESTIC OIL AND GAS 
              RESOURCES.

    (a) Evaluation.--The Secretary of Energy, in coordination with the 
Secretaries of the Interior, Commerce, and Treasury, Indian tribes and 
the Interstate Oil and Gas Compact Commission, shall evaluate the 
impact of existing Federal and State tax and royalty policies on the 
development of domestic oil and gas resources and on revenues to 
Federal, State, local and tribal governments.
    (b) Scope.--The evaluation under subsection (a) shall--
            (1) analyze the impact of fiscal policies on oil and 
        natural gas exploration, development drilling, and production 
        under different price scenarios, including the impact of the 
        individual and corporate Alternative Minimum Tax, State and 
        local production taxes and fixed royalty rates during low price 
        periods;
            (2) assess the effect of existing Federal and State fiscal 
        policies on investment under different geological and 
        developmental circumstances, including but not limited to 
        deepwater environments, subsalt formations, deep and deviated 
        wells, coalbed methane and other unconventional oil and gas 
        formations;
            (3) assess the extent to which Federal and State fiscal 
        policies negatively impact the ultimate recovery of resources 
        from existing fields and smaller accumulations in offshore 
        waters, especially in water depths less than 800 meters, of the 
        Gulf of Mexico;
            (4) compare existing Federal and State policies with tax 
        and royalty regimes in other countries with particular emphasis 
        on similar geological, developmental and infrastructure 
        conditions; and
            (5) evaluate how alternative tax and royalty policies, 
        including counter-cyclical measures, could increase recovery of 
        domestic oil and natural gas resources and revenues to Federal, 
        State, local and tribal governments.
    (c) Policy Recommendations.--Based upon the findings of the 
evaluation under subsection (a), a report describing the findings and 
recommendations for policy changes shall be provided to the President, 
the Congress, the Governors of the member States of the Interstate Oil 
and Gas Compact Commission, and Indian tribes having an oil and gas 
lease approved by the Secretary of the Interior. The recommendations 
should ensure that the public interest in receiving the economic 
benefits of tax and royalty revenues is balanced with the broader 
national security and economic interests in maximizing recovery of 
domestic resources. The report should include recommendations regarding 
actions to--
            (1) ensure stable development drilling during periods of 
        low oil and/or natural gas prices to maintain reserve 
        replacement and deliverability;
            (2) minimize the negative impact of a volatile investment 
        climate on the oil and gas service industry and domestic oil 
        and gas exploration and production;
            (3) ensure a consistent level of domestic activity to 
        encourage the education and retention of a technical workforce; 
        and
            (4) maintain production capability during periods of low 
        oil and/or natural gas prices.
    (d) Royalty Guidelines.--The recommendations required under (c) 
should include guidelines for private resource holders as to the 
appropriate level of royalties given geology, development cost, and the 
national interest in maximizing recovery of oil and gas resources.
    (e) Report.--The study under subsection (a) shall be completed not 
later than 18 months after the date of enactment of this section. The 
report and recommendations required in (c) shall be transmitted to the 
President, the Congress, Indian tribes, and the Governors of the member 
States of the Interstate Oil and Gas Compact Commission.

SEC. 609. STRATEGIC PETROLEUM RESERVE.

    (a) Full Capacity.--The President shall--
            (1) fill the Strategic Petroleum Reserve established 
        pursuant to part B of title I of the Energy Policy and 
        Conservation Act (42 U.S.C. 6231 et seq.) to full capacity as 
        soon as practicable;
            (2) acquire petroleum for the Strategic Petroleum Reserve 
        by the most practicable and cost-effective means, including the 
        acquisition of crude oil the United States is entitled to 
        receive in kind as royalties from production on Federal lands; 
        and
            (3) ensure that the fill rate minimizes impacts on 
        petroleum markets.
    (b) Recommendations.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of Energy shall submit to Congress 
a plan to--
            (1) eliminate any infrastructure impediments that may limit 
        maximum drawdown capability; and
            (2) determine whether the capacity of the Strategic 
        Petroleum Reserve on the date of enactment of this section is 
        adequate in light of the increasing consumption of petroleum 
        and the reliance on imported petroleum.

SEC. 610. HYDRAULIC FRACTURING.

    Section 1421 of the Safe Drinking Water Act (42 U.S.C. 300h) is 
amended by adding at the end the following:
    ``(e) Hydraulic Fracturing for Oil and Gas Production.--
            ``(1) Study of the effects of hydraulic fracturing.--
                    ``(A) In general.--As soon as practicable, but in 
                no event later than 24 months after the date of 
                enactment of this subsection, the Administrator shall 
                complete a study of the known and potential effects on 
                underground drinking water sources of hydraulic 
                fracturing, including the effects of hydraulic 
                fracturing on underground drinking water sources on a 
                nationwide basis, and within specific regions, States, 
                or portions of States.
                    ``(B) Consultation.--In planning and conducting the 
                study, the Administrator shall consult with the 
                Secretary of the Interior, the Secretary of Energy, the 
                Ground Water Protection Council, affected States, and, 
                as appropriate, representatives of environmental, 
                industry, academic, scientific, public health, and 
                other relevant organizations. Such study may be 
                accomplished in conjunction with other ongoing studies 
                related to the effects of oil and gas production on 
                groundwater resources.
                    ``(C) Study elements.--The study conducted under 
                subparagraph (A) shall, at a minimum, examine and make 
                findings as to whether--
                            ``(i) such hydraulic fracturing has 
                        endangered or will endanger (as defined under 
                        subsection (d)(2)) underground drinking water 
                        sources, including those sources within 
                        specific regions, States or portions of States;
                            ``(ii) there are specific methods, 
                        practices, or hydrogeologic circumstances in 
                        which hydraulic fracturing has endangered or 
                        will endanger underground drinking water 
                        sources; and
                            ``(iii) there are any precautionary actions 
                        that may reduce or eliminate any such 
                        endangerment.
                    ``(D) Study of hydraulic fracturing in a particular 
                type of geologic formation.--The Administrator may also 
                complete a separate study on the known and potential 
                effects on underground drinking water sources of 
                hydraulic fracturing in a particular type of geologic 
                formation:
                            ``(i) If such a study is undertaken, the 
                        Administrator shall follow the procedures for 
                        study preparation and independent scientific 
                        review set forth in subparagraphs (1) (B) and 
                        (C) and (2) of this subsection. The 
                        Administrator may complete this separate study 
                        prior to the completion of the broader study of 
                        hydraulic fracturing required pursuant to 
                        subparagraph (A) of this subsection.
                            ``(ii) At the conclusion of independent 
                        scientific review for any separate study, the 
                        Administrator shall determine, pursuant to 
                        paragraph (3), whether regulation of hydraulic 
                        fracturing in the particular type of geologic 
                        formation addressed in the separate study is 
                        necessary under this part to ensure that 
                        underground sources of drinking water will not 
                        be endangered on a nationwide basis, or within 
                        a specific region, State or portions of a 
                        State. Subparagraph (4) of this subsection 
                        shall apply to any such determination by the 
                        Administrator.
                            ``(iii) If the Administrator completes a 
                        separate study, the Administrator may use the 
                        information gathered in the course of such a 
                        study in undertaking her broad study to the 
                        extent appropriate. The broader study need not 
                        include a reexamination of the conclusions 
                        reached by the Administrator in any separate 
                        study.
            ``(2) Independent scientific review.--
                    ``(A) In general.--Prior to the time the study 
                under paragraph (1) is completed, the Administrator 
                shall enter into an appropriate agreement with the 
                National Academy of Sciences to have the Academy review 
                the conclusions of the study.
                    ``(B) Report.--Not later than 11 months after 
                entering into an appropriate agreement with the 
                Administrator, the National Academy of Sciences shall 
                report to the Administrator, the Committee on Energy 
                and Commerce of the House of Representatives, and the 
                Committee on Environment and Public Works of the 
                Senate, on the--
                            ``(i) findings related to the study 
                        conducted by the Administrator under paragraph 
                        (1);
                            ``(ii) the scientific and technical basis 
                        for such findings; and
                            ``(iii) recommendations, if any, for 
                        modifying the findings of the study.
            ``(3) Regulatory determination.--
                    ``(A) In general.--Not later than 6 months after 
                receiving the National Academy of Sciences report under 
                paragraph (2), the Administrator shall determine, after 
                informal public hearings and public notice and 
                opportunity for comment, and based on information 
                developed or accumulated in connection with the study 
                required under paragraph (1) and the National Academy 
                of Sciences report under paragraph (2), either--
                            ``(i) that regulation of hydraulic 
                        fracturing under this part is necessary to 
                        ensure that underground sources of drinking 
                        water will not be endangered on a nationwide 
                        basis, or within a specific region, State or 
                        portions of a State; or
                            ``(ii) that regulation described under 
                        clause (i) is unnecessary.
                    ``(B) Publication of determination.--The 
                Administrator shall publish the determination in the 
                Federal Register, accompanied by an explanation and the 
                reasons for it.
            ``(4) Promulgation of regulations.--
                    ``(A) Regulation necessary.--If the Administrator 
                determines under paragraph (3) that regulation by 
                hydraulic fracturing under this part is necessary to 
                ensure that hydraulic fracturing does not endanger 
                underground drinking water sources on a nationwide 
                basis, or within a specific region, State or portions 
                of a State, the Administrator shall, within 6 months 
                after the issuance of that determination, and after 
                public notice and opportunity for comment, promulgate 
                regulations under section 1421 (42 U.S.C. 300h) to 
                ensure that hydraulic fracturing will not endanger such 
                underground sources of drinking water. However, for 
                purposes of the Administrator's approval or disapproval 
                under section 1422 of any State underground injection 
                control program for regulating hydraulic fracturing, a 
                State at any time may make the alternative 
                demonstration provided for in section 1425 of this 
                title.
                    ``(B) Regulation unnecessary.--The Administrator 
                shall not regulate or require States to regulate 
                hydraulic fracturing under this part unless the 
                Administrator determines under paragraph (3) that such 
                regulation is necessary. This provision shall not apply 
                to any State which has a program for the regulation of 
                hydraulic fracturing that was approved by the 
                Administrator under this part prior to the effective 
                date of this subsection.
                    ``(C) Existing regulations.--A determination by the 
                Administrator under paragraph (3) that regulation is 
                unnecessary will relieve all States (including those 
                with existing approved programs for the regulation of 
                hydraulic fracturing) from any further obligation to 
                regulate hydraulic fracturing as an underground 
                injection under this part.
            ``(5) Definition of hydraulic fracturing.--For purposes of 
        this subsection, the term `hydraulic fracturing' means the 
        process of creating a fracture in a reservoir rock, and 
        injecting fluids and propping agents, for the purposes of 
        reservoir stimulation related to oil and gas production 
        activities.
            ``(6) Savings.--Nothing in this subsection shall in any way 
        limit the authorities of the Administrator under section 1431 
        (42 U.S.C. 300i).''.

SEC. 611. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Administrator of the 
Environmental Protection Agency $100,000 for fiscal year 2003, to 
remain available until expended, for a grant to the State of Alabama to 
assist in the implementation of its regulatory program under section 
1425 of the Safe Drinking Water Act.

SEC. 612. PRESERVATION OF OIL AND GAS RESOURCE DATA.

    The Secretary of the Interior, through the United States Geological 
Survey, may enter into appropriate arrangements with State agencies 
that conduct geological survey activities to collect, archive, and 
provide public access to data and study results regarding oil and 
natural gas resources. The Secretary may accept private contributions 
of property and services for purposes of this section.

SEC 613. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE 
              POWDER RIVER BASIN.

    The Secretary of the Interior shall undertake a review of existing 
authorities to resolve conflicts between the development of Federal 
coal and the development of Federal and non-Federal coalbed methane in 
the Powder River Basin in Wyoming and Montana. Not later than 90 days 
from enactment of this Act, the Secretary shall report to Congress on 
her plan to resolve these conflicts.

                    TITLE VII--NATURAL GAS PIPELINES

                Subtitle A--Alaska Natural Gas Pipeline

SEC. 701. SHORT TITLE.

    This subtitle may be cited as the ``Alaska Natural Gas Pipeline Act 
of 2002''.

SEC. 702. FINDINGS.

    The Congress finds that:
            (1) Construction of a natural gas pipeline system from the 
        Alaskan North Slope to United States markets is in the national 
        interest and will enhance national energy security by providing 
        access to the significant gas reserves in Alaska needed to meet 
        the anticipated demand for natural gas.
            (2) The Commission issued a conditional certificate of 
        public convenience and necessity for the Alaska Natural Gas 
        Transportation System, which remains in effect.

SEC. 703. PURPOSES.

    The purposes of this subtitle are--
            (1) to provide a statutory framework for the expedited 
        approval, construction, and initial operation of an Alaska 
        natural gas transportation project, as an alternative to the 
        framework provided in the Alaska Natural Gas Transportation Act 
        of 1976 (15 U.S.C. 719-719o), which remains in effect;
            (2) to establish a process for providing access to such 
        transportation project in order to promote competition in the 
        exploration, development and production of Alaska natural gas;
            (3) to clarify Federal authorities under the Alaska Natural 
        Gas Transportation Act; and
            (4) to authorize Federal financial assistance to an Alaska 
        natural gas transportation project as provided in this 
        subtitle.

SEC. 704. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

    (a) Authority of the Commission.--Notwithstanding the provisions of 
the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719-719o), 
the Commission may, pursuant to section 7(c) of the Natural Gas Act (15 
U.S.C. 717f(c)), consider and act on an application for the issuance of 
a certificate of public convenience and necessity authorizing the 
construction and operation of an Alaska natural gas transportation 
project other than the Alaska Natural Gas Transportation System.
    (b) Issuance of Certificate.--(1) The Commission shall issue a 
certificate of public convenience and necessity authorizing the 
construction and operation of an Alaska natural gas transportation 
project under this section if the applicant has satisfied the 
requirements of section 7(e) of the Natural Gas Act (15 U.S.C. 
717f(e)).
    (2) In considering an application under this section, the 
Commission shall presume that--
            (A) a public need exists to construct and operate the 
        proposed Alaska natural gas transportation project; and
            (B) sufficient downstream capacity will exist to transport 
        the Alaska natural gas moving through such project to markets 
        in the contiguous United States.
    (c) Expedited Approval Process.--The Commission shall issue a final 
order granting or denying any application for a certificate of public 
convenience and necessity under section 7(c) of the Natural Gas Act (15 
U.S.C. 717f(c)) and this section not more than 60 days after the 
issuance of the final environmental impact statement for that project 
pursuant to section 705.
    (d) Prohibition on Certain Pipeline Route.--No license, permit, 
lease, right-of-way, authorization or other approval required under 
Federal law for the construction of any pipeline to transport natural 
gas from lands within the Prudhoe Bay oil and gas lease area may be 
granted for any pipeline that follows a route that traverses--
            (1) the submerged lands (as defined by the Submerged Lands 
        Act) beneath, or the adjacent shoreline of, the Beaufort Sea; 
        and
            (2) enters Canada at any point north of 68 degrees North 
        latitude.
    (e) Open Season.--Except where an expansion is ordered pursuant to 
section 706, initial or expansion capacity on any Alaska natural gas 
transportation project shall be allocated in accordance with procedures 
to be established by the Commission in regulations governing the 
conduct of open seasons for such project. Such procedures shall include 
the criteria for and timing of any open seasons, be consistent with the 
purposes set forth in section 703(2) and, for any open season for 
capacity beyond the initial capacity, provide the opportunity for the 
transportation of natural gas other than from the Prudhoe Bay and Point 
Thompson units. The Commission shall issue such regulations no later 
than 120 days after the enactment of this subtitle.
    (f) Projects in the Contiguous United States.--Applications for 
additional or expanded pipeline facilities that may be required to 
transport Alaska natural gas from Canada to markets in the contiguous 
United States may be made pursuant to the Natural Gas Act. To the 
extent such pipeline facilities include the expansion of any facility 
constructed pursuant to the Alaska Natural Gas Transportation Act of 
1976, the provisions of that Act shall continue to apply.
    (g) Study of In-State Needs.--The holder of the certificate of 
public convenience and necessity issued, modified, or amended by the 
Commission for an Alaska natural gas transportation project shall 
demonstrate that it has conducted a study of Alaska in-State needs, 
including tie-in points along the Alaska natural gas transportation 
project for in-State access.
    (h) Alaska Royalty Gas.--The Commission, upon the request of the 
State of Alaska and after a hearing, may provide for reasonable access 
to the Alaska natural gas transportation project for the State of 
Alaska or its designee for the transportation of the State's royalty 
gas for local consumption needs within the State: Provided, That the 
rates of existing shippers of subscribed capacity on such project shall 
not be increased as a result of such access.
    (i) Regulations.--The Commission may issue regulations to carry out 
the provisions of this section.

SEC. 705. ENVIRONMENTAL REVIEWS.

    (a) Compliance With NEPA.--The issuance of a certificate of public 
convenience and necessity authorizing the construction and operation of 
any Alaska natural gas transportation project under section 704 shall 
be treated as a major Federal action significantly affecting the 
quality of the human environment within the meaning of section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332(2)(C)).
    (b) Designation of Lead Agency.--The Commission shall be the lead 
agency for purposes of complying with the National Environmental Policy 
Act of 1969, and shall be responsible for preparing the statement 
required by section 102(2)(c) of that Act (42 U.S.C. 4332(2)(c)) with 
respect to an Alaska natural gas transportation project under section 
704. The Commission shall prepare a single environmental statement 
under this section, which shall consolidate the environmental reviews 
of all Federal agencies considering any aspect of the project.
    (c) Other Agencies.--All Federal agencies considering aspects of 
the construction and operation of an Alaska natural gas transportation 
project under section 704 shall cooperate with the Commission, and 
shall comply with deadlines established by the Commission in the 
preparation of the statement under this section. The statement prepared 
under this section shall be used by all such agencies to satisfy their 
responsibilities under section 102(2)(C) of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4332(2)(C)) with respect to such project.
    (d) Expedited Process.--The Commission shall issue a draft 
statement under this section not later than 12 months after the 
Commission determines the application to be complete and shall issue 
the final statement not later than 6 months after the Commission issues 
the draft statement, unless the Commission for good cause finds that 
additional time is needed.

SEC. 706. PIPELINE EXPANSION.

    (a) Authority.--With respect to any Alaska natural gas 
transportation project, upon the request of one or more persons and 
after giving notice and an opportunity for a hearing, the Commission 
may order the expansion of such project if it determines that such 
expansion is required by the present and future public convenience and 
necessity.
    (b) Requirements.--Before ordering an expansion the Commission 
shall--
            (1) approve or establish rates for the expansion service 
        that are designed to ensure the recovery, on an incremental or 
        rolled-in basis, of the cost associated with the expansion 
        (including a reasonable rate of return on investment);
            (2) ensure that the rates as established do not require 
        existing shippers on the Alaska natural gas transportation 
        project to subsidize expansion shippers;
            (3) find that the proposed shipper will comply with, and 
        the proposed expansion and the expansion of service will be 
        undertaken and implemented based on, terms and conditions 
        consistent with the then-effective tariff of the Alaska natural 
        gas transportation project;
            (4) find that the proposed facilities will not adversely 
        affect the financial or economic viability of the Alaska 
        natural gas transportation project;
            (5) find that the proposed facilities will not adversely 
        affect the overall operations of the Alaska natural gas 
        transportation project;
            (6) find that the proposed facilities will not diminish the 
        contract rights of existing shippers to previously subscribed 
        certificated capacity;
            (7) ensure that all necessary environmental reviews have 
        been completed; and
            (8) find that adequate downstream facilities exist or are 
        expected to exist to deliver incremental Alaska natural gas to 
        market.
    (c) Requirement for a Firm Transportation Agreement.--Any order of 
the Commission issued pursuant to this section shall be null and void 
unless the person or persons requesting the order executes a firm 
transportation agreement with the Alaska natural gas transportation 
project within a reasonable period of time as specified in such order.
    (d) Limitation.--Nothing in this section shall be construed to 
expand or otherwise affect any authorities of the Commission with 
respect to any natural gas pipeline located outside the State of 
Alaska.
    (e) Regulations.--The Commission may issue regulations to carry out 
the provisions of this section.

SEC. 707. FEDERAL COORDINATOR.

    (a) Establishment.--There is established as an independent 
establishment in the executive branch, the Office of the Federal 
Coordinator for Alaska Natural Gas Transportation Projects.
    (b) The Federal Coordinator.--The Office shall be headed by a 
Federal Coordinator for Alaska Natural Gas Transportation Projects, who 
shall--
            (1) be appointed by the President, by and with the advice 
        of the Senate,
            (2) hold office at the pleasure of the President, and
            (3) be compensated at the rate prescribed for level III of 
        the Executive Schedule (5 U.S.C. 5314).
    (c) Duties.--The Federal Coordinator shall be responsible for--
            (1) coordinating the expeditious discharge of all 
        activities by Federal agencies with respect to an Alaska 
        natural gas transportation project; and
            (2) ensuring the compliance of Federal agencies with the 
        provisions of this subtitle.
    (d) Reviews and Actions of Other Federal Agencies.--(1) All reviews 
conducted and actions taken by any Federal officer or agency relating 
to an Alaska natural gas transportation project authorized under this 
section shall be expedited, in a manner consistent with completion of 
the necessary reviews and approvals by the deadlines set forth in this 
subtitle.
    (2) No Federal officer or agency shall have the authority to 
include terms and conditions that are permitted, but not required, by 
law on any certificate, right-of-way, permit, lease or other 
authorization issued to an Alaska natural gas transportation project if 
the Federal Coordinator determines that the terms and conditions would 
prevent or impair in any significant respect the expeditious 
construction and operation of the project.
    (3) Unless required by law, no Federal officer or agency shall add 
to, amend, or abrogate any certificate, right-of-way, permit, lease or 
other authorization issued to an Alaska natural gas transportation 
project if the Federal Coordinator determines that such action would 
prevent or impair in any significant respect the expeditious 
construction and operation of the project.
    (e) State Coordination.--The Federal Coordinator shall enter into a 
Joint Surveillance and Monitoring Agreement, approved by the President 
and the Governor of Alaska, with the State of Alaska similar to that in 
effect during construction of the Trans-Alaska Oil Pipeline to monitor 
the construction of the Alaska natural gas transportation project. The 
Federal Government shall have primary surveillance and monitoring 
responsibility where the Alaska natural gas transportation project 
crosses Federal lands and private lands, and the State government shall 
have primary surveillance and monitoring responsibility where the 
Alaska natural gas transportation project crosses State lands.

SEC. 708. JUDICIAL REVIEW.

    (a) Exclusive Jurisdiction.--The United States Court of Appeals for 
the District of Columbia Circuit shall have exclusive jurisdiction to 
determine--
            (1) the validity of any final order or action (including a 
        failure to act) of any Federal agency or officer under this 
        subtitle;
            (2) the constitutionality of any provision of this 
        subtitle, or any decision made or action taken thereunder; or
            (3) the adequacy of any environmental impact statement 
        prepared under the National Environmental Policy Act of 1969 
        with respect to any action under this subtitle.
    (b) Deadline for Filing Claim.--Claims arising under this subtitle 
may be brought not later than 60 days after the date of the decision or 
action giving rise to the claim.
    (c) Expedited Consideration.--The United States Court of Appeals 
for the District of Columbia Circuit shall set any action brought under 
subsection (a) of this section for expedited consideration, taking into 
account the national interest as described in section 702 of this 
subtitle.
    (d) Amendment to ANGTA.--Section 10(c) of the Alaska Gas 
Transportation Act of 1976 (15 U.S.C. 719h) is amended by adding the 
following paragraph:
            ``(2) Expedited consideration.--The United States Court of 
        Appeals for the District of Columbia Circuit shall set any 
        action brought under subsection (a) of this section for 
        expedited consideration, taking into account the national 
        interest described in section 2 of this Act.''.

SEC. 709. STATE JURISDICTION OVER IN-STATE DELIVERY OF NATURAL GAS.

    (a) Local Distribution.--Any facility receiving natural gas from 
the Alaska natural gas transportation project for delivery to consumers 
within the State of Alaska shall be deemed to be a local distribution 
facility within the meaning of section 1(b) of the Natural Gas Act (15 
U.S.C. 717), and therefore not subject to the jurisdiction of the 
Federal Energy Regulatory Commission.
    (b) Additional Pipelines.--Nothing in this subtitle, except as 
provided in subsection 704(d), shall preclude or affect a future gas 
pipeline that may be constructed to deliver natural gas to Fairbanks, 
Anchorage, Matanuska-Susitna Valley, or the Kenai peninsula or Valdez 
or any other site in the State of Alaska for consumption within or 
distribution outside the State of Alaska.
    (c) Rate Coordination.--Pursuant to the Natural Gas Act, the 
Commission shall establish rates for the transportation of natural gas 
on the Alaska natural gas transportation project. In exercising such 
authority, the Commission, pursuant to Section 17(b) of the Natural Gas 
Act (15 U.S.C. 717p), shall confer with the State of Alaska regarding 
rates (including rate settlements) applicable to natural gas 
transported on and delivered from the Alaska natural gas transportation 
project for use within the State of Alaska.

SEC. 710. LOAN GUARANTEE.

    (a) Authority.--The Secretary of Energy may guarantee not more than 
80 percent of the principal of any loan made to the holder of a 
certificate of public convenience and necessity issued under section 
704(b) of this Act or section 9 of the Alaska Natural Gas 
Transportation Act of 1976 (15 U.S.C. 719g) for the purpose of 
constructing an Alaska natural gas transportation project.
    (b) Conditions.--(1) The Secretary of Energy may not guarantee a 
loan under this section unless the guarantee has filed an application 
for a certificate of public convenience and necessity under section 
704(b) of this Act or for an amended certificate under section 9 of the 
Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) with the 
Commission not later than 18 months after the date of enactment of this 
subtitle.
    (2) A loan guaranteed under this section shall be made by a 
financial institution subject to the examination of the Secretary.
    (3) Loan requirements, including term, maximum size, collateral 
requirements and other features shall be determined by the Secretary.
    (c) Limitation on Amount.--Commitments to guarantee loans may be 
made by the Secretary of Energy only to the extent that the total loan 
principal, any part of which is guaranteed, will not exceed 
$10,000,000,000.
    (d) Regulations.--The Secretary of Energy may issue regulations to 
carry out the provisions of this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to cover 
the cost of loan guarantees, as defined by section 502(5) of the 
Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)).

SEC. 711. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

    (a) Requirement of Study.--If no application for the issuance of a 
certificate or amended certificate of public convenience and necessity 
authorizing the construction and operation of an Alaska natural gas 
transportation project has been filed with the Commission within 18 
months after the date of enactment of this title, the Secretary of 
Energy shall conduct a study of alternative approaches to the 
construction and operation of the project.
    (b) Scope of Study.--The study shall consider the feasibility of 
establishing a Government corporation to construct an Alaska natural 
gas transportation project, and alternative means of providing Federal 
financing and ownership (including alternative combinations of 
Government and private corporate ownership) of the project.
    (c) Consultation.--In conducting the study, the Secretary of Energy 
shall consult with the Secretary of the Treasury and the Secretary of 
the Army (acting through the Commanding General of the Corps of 
Engineers).
    (d) Report.--If the Secretary of Energy is required to conduct a 
study under subsection (a), he shall submit a report containing the 
results of the study, his recommendations, and any proposals for 
legislation to implement his recommendations to the Congress within 6 
months after the expiration of the Secretary of Energy's authority to 
guarantee a loan under section 710.

SEC. 712. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

    (a) Savings Clause.--Nothing in this subtitle affects any decision, 
certificate, permit, right-of-way, lease, or other authorization issued 
under section 9 of the Alaska Natural Gas Transportation Act of 1976 
(15 U.S.C. 719g) or any Presidential findings or waivers issued in 
accordance with that Act.
    (b) Clarification of Authority to Amend Terms and Conditions to 
Meet Current Project Requirements.--Any Federal officer or agency 
responsible for granting or issuing any certificate, permit, right-of-
way, lease, or other authorization under section 9 of the Alaska 
Natural Gas Transportation Act of 1976 (15 U.S.C. 719g) may add to, 
amend, or abrogate any term or condition included in such certificate, 
permit, right-of-way, lease, or other authorization to meet current 
project requirements (including the physical design, facilities, and 
tariff specifications), so long as such action does not compel a change 
in the basic nature and general route of the Alaska Natural Gas 
Transportation System as designated and described in section 2 of the 
President's Decision, or would otherwise prevent or impair in any 
significant respect the expeditious construction and initial operation 
of such transportation system.
    (c) Updated Environmental Reviews.--The Secretary of Energy shall 
require the sponsor of the Alaska Natural Gas Transportation System to 
submit such updated environmental data, reports, permits, and impact 
analyses as the Secretary determines are necessary to develop detailed 
terms, conditions, and compliance plans required by section 5 of the 
President's Decision.

SEC. 713. DEFINITIONS.

    For purposes of this subtitle:
            (1) The term ``Alaska natural gas'' means natural gas 
        derived from the area of the State of Alaska lying north of 64 
        degrees North latitude.
            (2) The term ``Alaska natural gas transportation project'' 
        means any natural gas pipeline system that carries Alaska 
        natural gas to the border between Alaska and Canada (including 
        related facilities subject to the jurisdiction of the 
        Commission) that is authorized under either--
                    (A) the Alaska Natural Gas Transportation Act of 
                1976 (15 U.S.C. 719-719o); or
                    (B) section 704 of this subtitle.
            (3) The term ``Alaska Natural Gas Transportation System'' 
        means the Alaska natural gas transportation project authorized 
        under the Alaska Natural Gas Transportation Act of 1976 and 
        designated and described in section 2 of the President's 
        Decision.
            (4) The term ``Commission'' means the Federal Energy 
        Regulatory Commission.
            (5) The term ``President's Decision'' means the Decision 
        and Report to Congress on the Alaska Natural Gas Transportation 
        system issued by the President on September 22, 1977 pursuant 
        to section 7 of the Alaska Natural Gas Transportation Act of 
        1976 (15 U.S.C. 719c) and approved by Public Law 95-158.

SEC. 714. SENSE OF THE SENATE.

    It is the sense of the Senate that an Alaska natural gas 
transportation project will provide significant economic benefits to 
the United States and Canada. In order to maximize those benefits, the 
Senate urges the sponsors of the pipeline project to make every effort 
to use steel that is manufactured or produced in North America and to 
negotiate a project labor agreement to expedite construction of the 
pipeline.

SEC. 715. ALASKAN PIPELINE CONSTRUCTION TRAINING PROGRAM.

    (a) Within six months after enactment of this Act, the Secretary of 
Labor (in this section referred to as the ``Secretary'') shall submit a 
report to the Committee on Energy and Natural Resources of the United 
States Senate and the Committee on Resources of the United States House 
of Representatives setting forth a program to train Alaska residents in 
the skills and crafts required in the design, construction, and 
operation of an Alaska gas pipeline system and that will enhance 
employment and contracting opportunities for Alaskan residents. The 
report shall also describe any laws, rules, regulations and policies 
which act as a deterrent to hiring Alaskan residents or contracting 
with Alaskan residents to perform work on Alaska gas pipelines, 
together with any recommendations for change. For purposes of this 
subsection, Alaskan residents shall be defined as those individuals 
eligible to vote within the State of Alaska on the date of enactment of 
this Act.
    (b) Within 1 year of the date the report is transmitted to 
Congress, the Secretary shall establish within the State of Alaska, at 
such locations as are appropriate, one or more training centers for the 
express purpose of training Alaskan residents in the skills and crafts 
necessary in the design, construction and operation of gas pipelines in 
Alaska. Each such training center shall also train Alaskan residents in 
the skills required to write, offer, and monitor contracts in support 
of the design, construction, and operation of Alaska gas pipelines.
    (c) In implementing the report and program described in this 
subsection, the Secretary shall consult with the Alaskan Governor.
    (d) There are authorized to be appropriated to the Secretary such 
sums as may be necessary, but not to exceed $20,000,000 for the 
purposes of this subsection.

                    Subtitle B--Operating Pipelines

SEC. 721. ENVIRONMENTAL REVIEW AND PERMITTING OF NATURAL GAS PIPELINE 
              PROJECTS.

    (a) Interagency Review.--The Chairman of the Council on 
Environmental Quality, in coordination with the Federal Energy 
Regulatory Commission, shall establish an interagency task force to 
develop an interagency memorandum of understanding to expedite the 
environmental review and permitting of natural gas pipeline projects.
    (b) Membership of Interagency Task Force.--The task force shall 
consist of--
            (1) the Chairman of the Council on Environmental Quality, 
        who shall serve as the Chairman of the interagency task force,
            (2) the Chairman of the Federal Energy Regulatory 
        Commission,
            (3) the Director of the Bureau of Land Management,
            (4) the Director of the United States Fish and Wildlife 
        Service,
            (5) the Commanding General, United States Army Corps of 
        Engineers,
            (6) the Chief of the Forest Service,
            (7) the Administrator of the Environmental Protection 
        Agency,
            (8) the Chairman of the Advisory Council on Historic 
        Preservation, and
            (9) the heads of such other agencies as the Chairman of the 
        Council on Environmental Quality and the Chairman of the 
        Federal Energy Regulatory Commission deem appropriate.
    (c) Memorandum of Understanding.--The agencies represented by the 
members of the interagency task force shall enter into the memorandum 
of understanding not later than 1 year after the date of the enactment 
of this section.

                      Subtitle C--Pipeline Safety

               PART I--SHORT TITLE; AMENDMENT OF TITLE 49

SEC. 741. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES CODE.

    (a) Short Title.--This subtitle may be cited as the ``Pipeline 
Safety Improvement Act of 2002''.
    (b) Amendment of Title 49, United States Code.--Except as otherwise 
expressly provided, whenever in this subtitle an amendment or repeal is 
expressed in terms of an amendment to, or a repeal of, a section or 
other provision, the reference shall be considered to be made to a 
section or other provision of title 49, United States Code.

            PART II--PIPELINE SAFETY IMPROVEMENT ACT OF 2002

SEC. 761. IMPLEMENTATION OF INSPECTOR GENERAL RECOMMENDATIONS.

    (a) In General.--Except as otherwise required by this subtitle, the 
Secretary shall implement the safety improvement recommendations 
provided for in the Department of Transportation Inspector General's 
Report (RT-2000-069).
    (b) Reports by the Secretary.--Not later than 90 days after the 
date of enactment of this Act, and every 90 days thereafter until each 
of the recommendations referred to in subsection (a) has been 
implemented, the Secretary shall transmit to the Committee on Commerce, 
Science, and Transportation of the Senate and the Committee on 
Transportation and Infrastructure of the House of Representatives a 
report on the specific actions taken to implement such recommendations.
    (c) Reports by the Inspector General.--The Inspector General shall 
periodically transmit to the committees referred to in subsection (b) a 
report assessing the Secretary's progress in implementing the 
recommendations referred to in subsection (a) and identifying options 
for the Secretary to consider in accelerating recommendation 
implementation.

SEC. 762. NTSB SAFETY RECOMMENDATIONS.

    (a) In General.--The Secretary of Transportation, the Administrator 
of Research and Special Program Administration, and the Director of the 
Office of Pipeline Safety shall fully comply with section 1135 of title 
49, United States Code, to ensure timely responsiveness to National 
Transportation Safety Board recommendations about pipeline safety.
    (b) Public Availability.--The Secretary, Administrator, or 
Director, respectively, shall make a copy of each recommendation on 
pipeline safety and response, as described in sections 1135 (a) and (b) 
of title 49, United States Code, available to the public at reasonable 
cost.
    (c) Reports to Congress.--The Secretary, Administrator, or 
Director, respectively, shall submit to the Congress by January 1 of 
each year a report containing each recommendation on pipeline safety 
made by the Board during the prior year and a copy of the response to 
each such recommendation.

SEC. 763. QUALIFICATIONS OF PIPELINE PERSONNEL.

    (a) Qualification Plan.--Each pipeline operator shall make 
available to the Secretary of Transportation, or, in the case of an 
intrastate pipeline facility operator, the appropriate State regulatory 
agency, a plan that is designed to enhance the qualifications of 
pipeline personnel and to reduce the likelihood of accidents and 
injuries. The plan shall be made available not more than 6 months after 
the date of enactment of this Act, and the operator shall revise or 
update the plan as appropriate.
    (b) Requirements.--The enhanced qualification plan shall include, 
at a minimum, criteria to demonstrate the ability of an individual to 
safely and properly perform tasks identified under section 60102 of 
title 49, United States Code. The plan shall also provide for training 
and periodic reexamination of pipeline personnel qualifications and 
provide for requalification as appropriate. The Secretary, or, in the 
case of an intrastate pipeline facility operator, the appropriate State 
regulatory agency, may review and certify the plans to determine if 
they are sufficient to provide a safe operating environment and shall 
periodically review the plans to ensure the continuation of a safe 
operation. The Secretary may establish minimum standards for pipeline 
personnel training and evaluation, which may include written 
examination, oral examination, work performance history review, 
observation during performance on the job, on the job training, 
simulations, or other forms of assessment.
    (c) Report to Congress.--
            (1) In general.--The Secretary shall submit a report to the 
        Congress evaluating the effectiveness of operator qualification 
        and training efforts, including--
                    (A) actions taken by inspectors;
                    (B) recommendations made by inspectors for changes 
                to operator qualification and training programs; and
                    (C) industry and employee organization responses to 
                those actions and recommendations.
            (2) Criteria.--The Secretary may establish criteria for use 
        in evaluating and reporting on operator qualification and 
        training for purposes of this subsection.
            (3) Due date.--The Secretary shall submit the report 
        required by paragraph (1) to the Congress 3 years after the 
        date of enactment of this Act.

SEC. 764. PIPELINE INTEGRITY INSPECTION PROGRAM.

    Section 60109 is amended by adding at the end the following:
    ``(c) Integrity Management.--
            ``(1) General requirement.--The Secretary shall promulgate 
        regulations requiring operators of hazardous liquid pipelines 
        and natural gas transmission pipelines to evaluate the risks to 
        the operator's pipeline facilities in areas identified pursuant 
        to subsection (a)(1), and to adopt and implement a program for 
        integrity management that reduces the risk of an incident in 
        those areas. The regulations shall be issued no later than 1 
        year after the Secretary has issued standards pursuant to 
        subsections (a) and (b) of this section or by December 31, 
        2003, whichever is sooner.
            ``(2) Standards for program.--In promulgating regulations 
        under this section, the Secretary shall require an operator's 
        integrity management plan to be based on risk analysis and each 
        plan shall include, at a minimum--
                    ``(A) periodic assessment of the integrity of the 
                pipeline through methods including internal inspection, 
                pressure testing, direct assessment, or other effective 
                methods. The assessment period shall be no less than 
                every 5 years unless the Department of Transportation 
                Inspector General, after consultation with the 
                Secretary determines there is not a sufficient 
                capability or it is deemed unnecessary because of more 
                technically appropriate monitoring or creates undue 
                interruption of necessary supply to fulfill the 
                requirements under this paragraph;
                    ``(B) clearly defined criteria for evaluating the 
                results of the periodic assessment methods carried out 
                under subparagraph (A) and procedures to ensure 
                identified problems are corrected in a timely manner; 
                and
                    ``(C) measures, as appropriate, that prevent and 
                mitigate unintended releases, such as leak detection, 
                integrity evaluation, restrictive flow devices, or 
                other measures.
            ``(3) Criteria for program standards.--In deciding how 
        frequently the integrity assessment methods carried out under 
        paragraph (2)(A) must be conducted, an operator shall take into 
        account the potential for new defects developing or previously 
        identified structural defects caused by construction or 
        installation, the operational characteristics of the pipeline, 
        and leak history. In addition, the Secretary may establish a 
        minimum testing requirement for operators of pipelines to 
        conduct internal inspections.
            ``(4) State role.--A State authority that has an agreement 
        in effect with the Secretary under section 60106 is authorized 
        to review and assess an operator's risk analyses and integrity 
        management plans required under this section for interstate 
        pipelines located in that State. The reviewing State authority 
        shall provide the Secretary with a written assessment of the 
        plans, make recommendations, as appropriate, to address safety 
        concerns not adequately addressed in the operator's plans, and 
        submit documentation explaining the State-proposed plan 
        revisions. The Secretary shall carefully consider the State's 
        proposals and work in consultation with the States and 
        operators to address safety concerns.
            ``(5) Monitoring implementation.--The Secretary of 
        Transportation shall review the risk analysis and program for 
        integrity management required under this section and provide 
        for continued monitoring of such plans. Not later than 2 years 
        after the implementation of integrity management plans under 
        this section, the Secretary shall complete an assessment and 
        evaluation of the effects on safety and the environment of 
        extending all of the requirements mandated by the regulations 
        described in paragraph (1) to additional areas. The Secretary 
        shall submit the assessment and evaluation to Congress along 
        with any recommendations to improve and expand the utilization 
        of integrity management plans.
            ``(6) Opportunity for local input on integrity 
        management.--Within 18 months after the date of enactment of 
        the Pipeline Safety Improvement Act of 2002, the Secretary 
        shall, by regulation, establish a process for raising and 
        addressing local safety concerns about pipeline integrity and 
        the operator's pipeline integrity plan. The process shall 
        include--
                    ``(A) a requirement that an operator of a hazardous 
                liquid or natural gas transmission pipeline facility 
                provide information about the risk analysis and 
                integrity management plan required under this section 
                to local officials in a State in which the facility is 
                located;
                    ``(B) a description of the local officials required 
                to be informed, the information that is to be provided 
                to them and the manner, which may include traditional 
                or electronic means, in which it is provided;
                    ``(C) the means for receiving input from the local 
                officials that may include a public forum sponsored by 
                the Secretary or by the State, or the submission of 
                written comments through traditional or electronic 
                means;
                    ``(D) the extent to which an operator of a pipeline 
                facility must participate in a public forum sponsored 
                by the Secretary or in another means for receiving 
                input from the local officials or in the evaluation of 
                that input; and
                    ``(E) the manner in which the Secretary will notify 
                the local officials about how their concerns are being 
                addressed.''.

SEC. 765. ENFORCEMENT.

    (a) In General.--Section 60112 is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) General Authority.--After notice and an opportunity for a 
hearing, the Secretary of Transportation may decide a pipeline facility 
is hazardous if the Secretary decides that--
            ``(1) operation of the facility is or would be hazardous to 
        life, property, or the environment; or
            ``(2) the facility is, or would be, constructed or 
        operated, or a component of the facility is, or would be, 
        constructed or operated with equipment, material, or a 
        technique that the Secretary decides is hazardous to life, 
        property, or the environment.''; and
            (2) by striking ``is hazardous,'' in subsection (d) and 
        inserting ``is, or would be, hazardous,''.

SEC. 766. PUBLIC EDUCATION, EMERGENCY PREPAREDNESS, AND COMMUNITY 
              RIGHT-TO-KNOW.

    (a) Section 60116 is amended to read as follows:
``Sec. 60116. Public education, emergency preparedness, and community 
              right-to-know
    ``(a) Public Education Programs.--(1) Each owner or operator of a 
gas or hazardous liquid pipeline facility shall carry out a continuing 
program to educate the public on the use of a one-call notification 
system prior to excavation and other damage prevention activities, the 
possible hazards associated with unintended releases from the pipeline 
facility, the physical indications that such a release may have 
occurred, what steps should be taken for public safety in the event of 
a pipeline release, and how to report such an event.
    ``(2) Within 12 months after the date of enactment of the Pipeline 
Safety Improvement Act of 2002, each owner or operator of a gas or 
hazardous liquid pipeline facility shall review its existing public 
education program for effectiveness and modify the program as 
necessary. The completed program shall include activities to advise 
affected municipalities, school districts, businesses, and residents of 
pipeline facility locations. The completed program shall be submitted 
to the Secretary or, in the case of an intrastate pipeline facility 
operator, the appropriate State agency and shall be periodically 
reviewed by the Secretary or, in the case of an intrastate pipeline 
facility operator, the appropriate State agency.
    ``(3) The Secretary may issue standards prescribing the elements of 
an effective public education program. The Secretary may also develop 
material for use in the program.
    ``(b) Emergency Preparedness.--
            ``(1) Operator liaison.--Within 12 months after the date of 
        enactment of the Pipeline Safety Improvement Act of 2002, an 
        operator of a gas transmission or hazardous liquid pipeline 
        facility shall initiate and maintain liaison with the State 
        emergency response commissions, and local emergency planning 
        committees in the areas of pipeline right-of-way, established 
        under section 301 of the Emergency Planning and Community 
        Right-To-Know Act of 1986 (42 U.S.C. 11001) in each State in 
        which it operates.
            ``(2) Information.--An operator shall, upon request, make 
        available to the State emergency response commissions and local 
        emergency planning committees, and shall make available to the 
        Office of Pipeline Safety in a standardized form for the 
        purpose of providing the information to the public, the 
        information described in section 60102(d), the operator's 
        program for integrity management, and information about 
        implementation of that program. The information about the 
        facility shall also include, at a minimum--
                    ``(A) the business name, address, telephone number 
                of the operator, including a 24-hour emergency contact 
                number;
                    ``(B) a description of the facility, including pipe 
                diameter, the product or products carried, and the 
                operating pressure;
                    ``(C) with respect to transmission pipeline 
                facilities, maps showing the location of the facility 
                and, when available, any high consequence areas which 
                the pipeline facility traverses or adjoins and abuts;
                    ``(D) a summary description of the integrity 
                measures the operator uses to assure safety and 
                protection for the environment; and
                    ``(E) a point of contact to respond to questions 
                from emergency response representative.
            ``(3) Smaller communities.--In a community without a local 
        emergency planning committee, the operator shall maintain 
        liaison with the local fire, police, and other emergency 
        response agencies.
            ``(4) Public access.--The Secretary shall prescribe 
        requirements for public access, as appropriate, to this 
        information, including a requirement that the information be 
        made available to the public by widely accessible computerized 
        database.
    ``(c) Community Right-To-Know.--Not later than 12 months after the 
date of enactment of the Pipeline Safety Improvement Act of 2002, and 
annually thereafter, the owner or operator of each gas transmission or 
hazardous liquid pipeline facility shall provide to the governing body 
of each municipality in which the pipeline facility is located, a map 
identifying the location of such facility. The map may be provided in 
electronic form. The Secretary may provide technical assistance to the 
pipeline industry on developing public safety and public education 
program content and best practices for program delivery, and on 
evaluating the effectiveness of the programs. The Secretary may also 
provide technical assistance to State and local officials in applying 
practices developed in these programs to their activities to promote 
pipeline safety.
    ``(d) Public Availability of Reports.--The Secretary shall--
            ``(1) make available to the public--
                    ``(A) a safety-related condition report filed by an 
                operator under section 60102(h);
                    ``(B) a report of a pipeline incident filed by an 
                operator;
                    ``(C) the results of any inspection by the Office 
                of Pipeline Safety or a State regulatory official; and
                    ``(D) a description of any corrective action taken 
                in response to a safety-related condition reported 
                under subparagraph (A), (B), or (C); and
            ``(2) prescribe requirements for public access, as 
        appropriate, to integrity management program information 
        prepared under this chapter, including requirements that will 
        ensure data accessibility to the greatest extent feasible.''.
    (b) Safety Condition Reports.--Section 60102(h)(2) is amended by 
striking ``authorities.'' and inserting ``officials, including the 
local emergency responders.''.
    (c) Conforming Amendment.--The chapter analysis for chapter 601 is 
amended by striking the item relating to section 60116 and inserting 
the following:

``60116. Public education, emergency preparedness, community right-to-
                            know.''.

SEC. 767. PENALTIES.

    (a) Civil Penalties.--Section 60122 is amended--
            (1) by striking ``$25,000'' in subsection (a)(1) and 
        inserting ``$500,000'';
            (2) by striking ``$500,000'' in subsection (a)(1) and 
        inserting ``$1,000,000'';
            (3) by adding at the end of subsection (a)(1) the 
        following: ``The preceding sentence does not apply to judicial 
        enforcement action under section 60120 or 60121.''; and
            (4) by striking subsection (b) and inserting the following:
    ``(b) Penalty Considerations.--In determining the amount of a civil 
penalty under this section--
            ``(1) the Secretary shall consider--
                    ``(A) the nature, circumstances, and gravity of the 
                violation, including adverse impact on the environment;
                    ``(B) with respect to the violator, the degree of 
                culpability, any history of prior violations, the 
                ability to pay, any effect on ability to continue doing 
                business; and
                    ``(C) good faith in attempting to comply; and
            ``(2) the Secretary may consider--
                    ``(A) the economic benefit gained from the 
                violation without any discount because of subsequent 
                damages; and
                    ``(B) other matters that justice requires.''.
    (b) Excavator Damage.--Section 60123(d) is amended--
            (1) by striking ``knowingly and willfully'';
            (2) by inserting ``knowingly and willfully'' before 
        ``engages'' in paragraph (1); and
            (3) striking paragraph (2)(B) and inserting the following:
                    ``(B) a pipeline facility, is aware of damage, and 
                does not report the damage promptly to the operator of 
                the pipeline facility and to other appropriate 
                authorities; or''.
    (c) Civil Actions.--Section 60120(a)(1) is amended to read as 
follows:
    ``(1) On the request of the Secretary of Transportation, the 
Attorney General may bring a civil action in an appropriate district 
court of the United States to enforce this chapter, including section 
60112 of this chapter, or a regulation prescribed or order issued under 
this chapter. The court may award appropriate relief, including a 
temporary or permanent injunction, punitive damages, and assessment of 
civil penalties considering the same factors as prescribed for the 
Secretary in an administrative case under section 60122.''.

SEC. 768. STATE OVERSIGHT ROLE.

    (a) State Agreements With Certification.--Section 60106 is 
amended--
            (1) by striking ``General Authority.--'' in subsection (a) 
        and inserting ``Agreements Without Certification.--'';
            (2) by redesignating subsections (b), (c), and (d) as 
        subsections (c), (d), and (e); and
            (3) by inserting after subsection (a) the following:
    ``(b) Agreements With Certification.--
            ``(1) In general.--If the Secretary accepts a certification 
        under section 60105 of this title and makes the determination 
        required under this subsection, the Secretary may make an 
        agreement with a State authority authorizing it to participate 
        in the oversight of interstate pipeline transportation. Each 
        such agreement shall include a plan for the State authority to 
        participate in special investigations involving incidents or 
        new construction and allow the State authority to participate 
        in other activities overseeing interstate pipeline 
        transportation or to assume additional inspection or 
        investigatory duties. Nothing in this section modifies section 
        60104(c) or authorizes the Secretary to delegate the 
        enforcement of safety standards prescribed under this chapter 
        to a State authority.
            ``(2) Determinations required.--The Secretary may not enter 
        into an agreement under this subsection, unless the Secretary 
        determines that--
                    ``(A) the agreement allowing participation of the 
                State authority is consistent with the Secretary's 
                program for inspection and consistent with the safety 
                policies and provisions provided under this chapter;
                    ``(B) the interstate participation agreement would 
                not adversely affect the oversight responsibilities of 
                intrastate pipeline transportation by the State 
                authority;
                    ``(C) the State is carrying out a program 
                demonstrated to promote preparedness and risk 
                prevention activities that enable communities to live 
                safely with pipelines;
                    ``(D) the State meets the minimum standards for 
                State one-call notification set forth in chapter 61; 
                and
                    ``(E) the actions planned under the agreement would 
                not impede interstate commerce or jeopardize public 
                safety.
            ``(3) Existing agreements.--If requested by the State 
        authority, the Secretary shall authorize a State authority 
        which had an interstate agreement in effect after January 1999, 
        to oversee interstate pipeline transportation pursuant to the 
        terms of that agreement until the Secretary determines that the 
        State meets the requirements of paragraph (2) and executes a 
        new agreement, or until December 31, 2003, whichever is sooner. 
        Nothing in this paragraph shall prevent the Secretary, after 
        affording the State notice, hearing, and an opportunity to 
        correct any alleged deficiencies, from terminating an agreement 
        that was in effect before enactment of the Pipeline Safety 
        Improvement Act of 2002 if--
                    ``(A) the State authority fails to comply with the 
                terms of the agreement;
                    ``(B) implementation of the agreement has resulted 
                in a gap in the oversight responsibilities of 
                intrastate pipeline transportation by the State 
                authority; or
                    ``(C) continued participation by the State 
                authority in the oversight of interstate pipeline 
                transportation has had an adverse impact on pipeline 
                safety.''.
    (b) Ending Agreements.--Subsection (e) of section 60106, as 
redesignated by subsection (a), is amended to read as follows:
    ``(e) Ending Agreements.--
            ``(1) Permissive termination.--The Secretary may end an 
        agreement under this section when the Secretary finds that the 
        State authority has not complied with any provision of the 
        agreement.
            ``(2) Mandatory termination of agreement.--The Secretary 
        shall end an agreement for the oversight of interstate pipeline 
        transportation if the Secretary finds that--
                    ``(A) implementation of such agreement has resulted 
                in a gap in the oversight responsibilities of 
                intrastate pipeline transportation by the State 
                authority;
                    ``(B) the State actions under the agreement have 
                failed to meet the requirements under subsection (b); 
                or
                    ``(C) continued participation by the State 
                authority in the oversight of interstate pipeline 
                transportation would not promote pipeline safety.
            ``(3) Procedural requirements.--The Secretary shall give 
        the notice and an opportunity for a hearing to a State 
        authority before ending an agreement under this section. The 
        Secretary may provide a State an opportunity to correct any 
        deficiencies before ending an agreement. The finding and 
        decision to end the agreement shall be published in the Federal 
        Register and may not become effective for at least 15 days 
        after the date of publication unless the Secretary finds that 
        continuation of an agreement poses an imminent hazard.''.

SEC. 769. IMPROVED DATA AND DATA AVAILABILITY.

    (a) In General.--Within 12 months after the date of enactment of 
this Act, the Secretary shall develop and implement a comprehensive 
plan for the collection and use of gas and hazardous liquid pipeline 
data to revise the causal categories on the incident report forms to 
eliminate overlapping and confusing categories and include 
subcategories. The plan shall include components to provide the 
capability to perform sound incident trend analysis and evaluations of 
pipeline operator performance using normalized accident data.
    (b) Report of Releases Exceeding 5 Gallons.--Section 60117(b) is 
amended--
            (1) by inserting ``(1)'' before ``To'';
            (2) redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B);
            (3) inserting before the last sentence the following:
    ``(2) A person owning or operating a hazardous liquid pipeline 
facility shall report to the Secretary each release to the environment 
greater than 5 gallons of the hazardous liquid or carbon dioxide 
transported. This section applies to releases from pipeline facilities 
regulated under this chapter. A report must include the location of the 
release, fatalities and personal injuries, type of product, amount of 
product release, cause or causes of the release, extent of damage to 
property and the environment, and the response undertaken to clean up 
the release.
    ``(3) During the course of an incident investigation, a person 
owning or operating a pipeline facility shall make records, reports, 
and information required under subsection (a) of this section or other 
reasonably described records, reports, and information relevant to the 
incident investigation, available to the Secretary within the time 
limits prescribed in a written request.''; and
            (4) indenting the first word of the last sentence and 
        inserting ``(4)'' before ``The Secretary'' in that sentence.
    (c) Penalty Authorities.--(1) Section 60122(a) is amended by 
striking ``60114(c)'' and inserting ``60117(b)(3)''.
    (2) Section 60123(a) is amended by striking ``60114(c),'' and 
inserting ``60117(b)(3),''.
    (d) Establishment of National Depository.--Section 60117 is amended 
by adding at the end the following:
    ``(l) National Depository.--The Secretary shall establish a 
national depository of data on events and conditions, including spill 
histories and corrective actions for specific incidents, that can be 
used to evaluate the risk of, and to prevent, pipeline failures and 
releases. The Secretary shall administer the program through the Bureau 
of Transportation Statistics, in cooperation with the Research and 
Special Programs Administration, and shall make such information 
available for use by State and local planning and emergency response 
authorities and the public.''.

SEC. 770. RESEARCH AND DEVELOPMENT.

    (a) Innovative Technology Development.--
            (1) In general.--As part of the Department of 
        Transportation's research and development program, the 
        Secretary of Transportation shall direct research attention to 
        the development of alternative technologies--
                    (A) to expand the capabilities of internal 
                inspection devices to identify and accurately measure 
                defects and anomalies;
                    (B) to inspect pipelines that cannot accommodate 
                internal inspection devices available on the date of 
                enactment;
                    (C) to develop innovative techniques measuring the 
                structural integrity of pipelines;
                    (D) to improve the capability, reliability, and 
                practicality of external leak detection devices; and
                    (E) to develop and improve alternative technologies 
                to identify and monitor outside force damage to 
                pipelines.
            (2) Cooperative.--The Secretary may participate in 
        additional technological development through cooperative 
        agreements with trade associations, academic institutions, or 
        other qualified organizations.
    (b) Pipeline Safety and Reliability Research and Development.--
            (1) In general.--The Secretary of Transportation, in 
        coordination with the Secretary of Energy, shall develop and 
        implement an accelerated cooperative program of research and 
        development to ensure the integrity of natural gas and 
        hazardous liquid pipelines. This research and development 
        program--
                    (A) shall include materials inspection techniques, 
                risk assessment methodology, and information systems 
                surety; and
                    (B) shall complement, and not replace, the research 
                program of the Department of Energy addressing natural 
                gas pipeline issues existing on the date of enactment 
                of this Act.
            (2) Purpose.--The purpose of the cooperative research 
        program shall be to promote pipeline safety research and 
        development to--
                    (A) ensure long-term safety, reliability and 
                service life for existing pipelines;
                    (B) expand capabilities of internal inspection 
                devices to identify and accurately measure defects and 
                anomalies;
                    (C) develop inspection techniques for pipelines 
                that cannot accommodate the internal inspection devices 
                available on the date of enactment;
                    (D) develop innovative techniques to measure the 
                structural integrity of pipelines to prevent pipeline 
                failures;
                    (E) develop improved materials and coatings for use 
                in pipelines;
                    (F) improve the capability, reliability, and 
                practicality of external leak detection devices;
                    (G) identify underground environments that might 
                lead to shortened service life;
                    (H) enhance safety in pipeline siting and land use;
                    (I) minimize the environmental impact of pipelines;
                    (J) demonstrate technologies that improve pipeline 
                safety, reliability, and integrity;
                    (K) provide risk assessment tools for optimizing 
                risk mitigation strategies; and
                    (L) provide highly secure information systems for 
                controlling the operation of pipelines.
            (3) Areas.--In carrying out this subsection, the Secretary 
        of Transportation, in coordination with the Secretary of 
        Energy, shall consider research and development on natural gas, 
        crude oil and petroleum product pipelines for--
                    (A) early crack, defect, and damage detection, 
                including real-time damage monitoring;
                    (B) automated internal pipeline inspection sensor 
                systems;
                    (C) land use guidance and set back management along 
                pipeline rights-of-way for communities;
                    (D) internal corrosion control;
                    (E) corrosion-resistant coatings;
                    (F) improved cathodic protection;
                    (G) inspection techniques where internal inspection 
                is not feasible, including measurement of structural 
                integrity;
                    (H) external leak detection, including portable 
                real-time video imaging technology, and the advancement 
                of computerized control center leak detection systems 
                utilizing real-time remote field data input;
                    (I) longer life, high strength, non-corrosive 
                pipeline materials;
                    (J) assessing the remaining strength of existing 
                pipes;
                    (K) risk and reliability analysis models, to be 
                used to identify safety improvements that could be 
                realized in the near term resulting from analysis of 
                data obtained from a pipeline performance tracking 
                initiative;
                    (L) identification, monitoring, and prevention of 
                outside force damage, including satellite surveillance; 
                and
                    (M) any other areas necessary to ensuring the 
                public safety and protecting the environment.
            (4) Points of contact.--
                    (A) In general.--To coordinate and implement the 
                research and development programs and activities 
                authorized under this subsection--
                            (i) the Secretary of Transportation shall 
                        designate, as the point of contact for the 
                        Department of Transportation, an officer of the 
                        Department of Transportation who has been 
                        appointed by the President and confirmed by the 
                        Senate; and
                            (ii) the Secretary of Energy shall 
                        designate, as the point of contact for the 
                        Department of Energy, an officer of the 
                        Department of Energy who has been appointed by 
                        the President and confirmed by the Senate.
                    (B) Duties.--
                            (i) The point of contact for the Department 
                        of Transportation shall have the primary 
                        responsibility for coordinating and overseeing 
                        the implementation of the research, 
                        development, and demonstration program plan 
                        under paragraphs (5) and (6).
                            (ii) The points of contact shall jointly 
                        assist in arranging cooperative agreements for 
                        research, development and demonstration 
                        involving their respective Departments, 
                        national laboratories, universities, and 
                        industry research organizations.
            (5) Research and development program plan.--Within 240 days 
        after the date of enactment of this Act, the Secretary of 
        Transportation, in coordination with the Secretary of Energy 
        and the Pipeline Integrity Technical Advisory Committee, shall 
        prepare and submit to the Congress a 5-year program plan to 
        guide activities under this subsection. In preparing the 
        program plan, the Secretary shall consult with appropriate 
        representatives of the natural gas, crude oil, and petroleum 
        product pipeline industries to select and prioritize 
        appropriate project proposals. The Secretary may also seek the 
        advice of utilities, manufacturers, institutions of higher 
        learning, Federal agencies, the pipeline research institutions, 
        national laboratories, State pipeline safety officials, 
        environmental organizations, pipeline safety advocates, and 
        professional and technical societies.
            (6) Implementation.--The Secretary of Transportation shall 
        have primary responsibility for ensuring the 5-year plan 
        provided for in paragraph (5) is implemented as intended. In 
        carrying out the research, development, and demonstration 
        activities under this paragraph, the Secretary of 
        Transportation and the Secretary of Energy may use, to the 
        extent authorized under applicable provisions of law, 
        contracts, cooperative agreements, cooperative research and 
        development agreements under the Stevenson-Wydler Technology 
        Innovation Act of 1980 (15 U.S.C. 3701 et seq.), grants, joint 
        ventures, other transactions, and any other form of agreement 
        available to the Secretary consistent with the recommendations 
        of the Advisory Committee.
            (7) Reports to congress.--The Secretary of Transportation 
        shall report to the Congress annually as to the status and 
        results to date of the implementation of the research and 
        development program plan. The report shall include the 
        activities of the Departments of Transportation and Energy, the 
        national laboratories, universities, and any other research 
        organizations, including industry research organizations.

SEC. 771. PIPELINE INTEGRITY TECHNICAL ADVISORY COMMITTEE.

    (a) Establishment.--The Secretary of Transportation shall enter 
into appropriate arrangements with the National Academy of Sciences to 
establish and manage the Pipeline Integrity Technical Advisory 
Committee for the purpose of advising the Secretary of Transportation 
and the Secretary of Energy on the development and implementation of 
the 5-year research, development, and demonstration program plan under 
section 770(b)(5). The Advisory Committee shall have an ongoing role in 
evaluating the progress and results of the research, development, and 
demonstration carried out under that section.
    (b) Membership.--The National Academy of Sciences shall appoint the 
members of the Pipeline Integrity Technical Advisory Committee after 
consultation with the Secretary of Transportation and the Secretary of 
Energy. Members appointed to the Advisory Committee should have the 
necessary qualifications to provide technical contributions to the 
purposes of the Advisory Committee.

SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

    (a) Gas and Hazardous Liquids.--Section 60125(a) is amended to read 
as follows:
    ``(a) Gas and Hazardous Liquid.--To carry out this chapter and 
other pipeline-related damage prevention activities of this title 
(except for section 60107), there are authorized to be appropriated to 
the Department of Transportation--$30,000,000 for each of the fiscal 
years 2003, 2004, and 2005 of which $23,000,000 is to be derived from 
user fees for fiscal years 2003, 2004, and 2005 collected under section 
60301 of this title.''.
    (b) Grants to States.--Section 60125(c) is amended to read as 
follows:
    ``(c) State Grants.--Not more than the following amounts may be 
appropriated to the Secretary to carry out section 60107--$20,000,000 
for the fiscal years 2003, 2004, and 2005 of which $18,000,000 is to be 
derived from user fees for fiscal years 2003, 2004, and 2005 collected 
under section 60301 of this title.''.
    (c) Oil Spills.--Section 60125 is amended by redesignating 
subsections (d), (e), and (f) as subsections (e), (f), (g) and 
inserting after subsection (c) the following:
    ``(d) Oil Spill Liability Trust Fund.--Of the amounts available in 
the Oil Spill Liability Trust Fund, $8,000,000 shall be transferred to 
the Secretary of Transportation, as provided in appropriation Acts, to 
carry out programs authorized in this title for each of fiscal years 
2003, 2004, and 2005.''.
    (d) Pipeline Integrity Program.--(1) There are authorized to be 
appropriated to the Secretary of Transportation for carrying out 
sections 770(b) and 771 of this subtitle $3,000,000, to be derived from 
user fees under section 60301 of title 49, United States Code, for each 
of the fiscal years 2003 through 2007.
    (2) Of the amounts available in the Oil Spill Liability Trust Fund 
established by section 9509 of the Internal Revenue Code of 1986 (26 
U.S.C. 9509), $3,000,000 shall be transferred to the Secretary of 
Transportation, as provided in appropriation Acts, to carry out 
programs for detection, prevention and mitigation of oil spills under 
sections 770(b) and 771 of this subtitle for each of the fiscal years 
2003 through 2007.
    (3) There are authorized to be appropriated to the Secretary of 
Energy for carrying out sections 770(b) and 771 of this subtitle such 
sums as may be necessary for each of the fiscal years 2003 through 
2007.

SEC. 773. OPERATOR ASSISTANCE IN INVESTIGATIONS.

    (a) In General.--If the Department of Transportation or the 
National Transportation Safety Board investigate an accident, the 
operator involved shall make available to the representative of the 
Department or the Board all records and information that in any way 
pertain to the accident (including integrity management plans and test 
results), and shall afford all reasonable assistance in the 
investigation of the accident.
    (b) Corrective Action Orders.--Section 60112(d) is amended--
            (1) by inserting ``(1)'' after ``Corrective Action 
        Orders.--''; and
            (2) by adding at the end the following:
    ``(2) If, in the case of a corrective action order issued following 
an accident, the Secretary determines that the actions of an employee 
carrying out an activity regulated under this chapter, including duties 
under section 60102(a), may have contributed substantially to the cause 
of the accident, the Secretary shall direct the operator to relieve the 
employee from performing those activities, reassign the employee, or 
place the employee on leave until the earlier of the date on which--
            ``(A) the Secretary determines, after notice and an 
        opportunity for a hearing, that the employee's performance of 
        duty in carrying out the activity did not contribute 
        substantially to the cause of the accident; or
            ``(B) the Secretary determines the employee has been re-
        qualified or re-trained as provided for in section 763 of the 
        Pipeline Safety Improvement Act of 2002 and can safely perform 
        those activities.
    ``(3) Action taken by an operator under paragraph (2) shall be in 
accordance with the terms and conditions of any applicable collective 
bargaining agreement to the extent it is not inconsistent with the 
requirements of this section.''.

SEC. 774. PROTECTION OF EMPLOYEES PROVIDING PIPELINE SAFETY 
              INFORMATION.

    (a) In General.--Chapter 601 is amended by adding at the end the 
following:
``Sec. 60129. Protection of employees providing pipeline safety 
              information
    ``(a) Discrimination Against Pipeline Employees.--No pipeline 
operator or contractor or subcontractor of a pipeline may discharge an 
employee or otherwise discriminate against an employee with respect to 
compensation, terms, conditions, or privileges of employment because 
the employee (or any person acting pursuant to a request of the 
employee)--
            ``(1) provided, caused to be provided, or is about to 
        provide (with any knowledge of the employer) or cause to be 
        provided to the employer or Federal Government information 
        relating to any violation or alleged violation of any order, 
        regulation, or standard of the Research and Special Programs 
        Administration or any other provision of Federal law relating 
        to pipeline safety under this chapter or any other law of the 
        United States;
            ``(2) has filed, caused to be filed, or is about to file 
        (with any knowledge of the employer) or cause to be filed a 
        proceeding relating to any violation or alleged violation of 
        any order, regulation, or standard of the Administration or any 
        other provision of Federal law relating to pipeline safety 
        under this chapter or any other law of the United States;
            ``(3) testified or is about to testify in such a 
        proceeding; or
            ``(4) assisted or participated or is about to assist or 
        participate in such a proceeding.
    ``(b) Department of Labor Complaint Procedure.--
            ``(1) Filing and notification.--A person who believes that 
        he or she has been discharged or otherwise discriminated 
        against by any person in violation of subsection (a) may, not 
        later than 90 days after the date on which such violation 
        occurs, file (or have any person file on his or her behalf) a 
        complaint with the Secretary of Labor alleging such discharge 
        or discrimination. Upon receipt of such a complaint, the 
        Secretary of Labor shall notify, in writing, the person named 
        in the complaint and the Administrator of the Research and 
        Special Programs Administration of the filing of the complaint, 
        of the allegations contained in the complaint, of the substance 
        of evidence supporting the complaint, and of the opportunities 
        that will be afforded to such person under paragraph (2).
            ``(2) Investigation; preliminary order.--
                    ``(A) In general.--Not later than 60 days after the 
                date of receipt of a complaint filed under paragraph 
                (1) and after affording the person named in the 
                complaint an opportunity to submit to the Secretary of 
                Labor a written response to the complaint and an 
                opportunity to meet with a representative of the 
                Secretary to present statements from witnesses, the 
                Secretary of Labor shall conduct an investigation and 
                determine whether there is reasonable cause to believe 
                that the complaint has merit and notify in writing the 
                complainant and the person alleged to have committed a 
                violation of subsection (a) of the Secretary's 
                findings. If the Secretary of Labor concludes that 
                there is reasonable cause to believe that a violation 
                of subsection (a) has occurred, the Secretary shall 
                accompany the Secretary's findings with a preliminary 
                order providing the relief prescribed by paragraph 
                (3)(B). Not later than 30 days after the date of 
                notification of findings under this paragraph, either 
                the person alleged to have committed the violation or 
                the complainant may file objections to the findings or 
                preliminary order, or both, and request a hearing on 
                the record. The filing of such objections shall not 
                operate to stay any reinstatement remedy contained in 
                the preliminary order. Such hearings shall be conducted 
                expeditiously. If a hearing is not requested in such 
                30-day period, the preliminary order shall be deemed a 
                final order that is not subject to judicial review.
                    ``(B) Requirements.--
                            ``(i) Required showing by complainant.--The 
                        Secretary of Labor shall dismiss a complaint 
                        filed under this subsection and shall not 
                        conduct an investigation otherwise required 
                        under subparagraph (A) unless the complainant 
                        makes a prima facie showing that any behavior 
                        described in paragraphs (1) through (4) of 
                        subsection (a) was a contributing factor in the 
                        unfavorable personnel action alleged in the 
                        complaint.
                            ``(ii) Showing by employer.--
                        Notwithstanding a finding by the Secretary that 
                        the complainant has made the showing required 
                        under clause (i), no investigation otherwise 
                        required under subparagraph (A) shall be 
                        conducted if the employer demonstrates, by 
                        clear and convincing evidence, that the 
                        employer would have taken the same unfavorable 
                        personnel action in the absence of that 
                        behavior.
                            ``(iii) Criteria for determination by 
                        Secretary.--The Secretary may determine that a 
                        violation of subsection (a) has occurred only 
                        if the complainant demonstrates that any 
                        behavior described in paragraphs (1) through 
                        (4) of subsection (a) was a contributing factor 
                        in the unfavorable personnel action alleged in 
                        the complaint.
                            ``(iv) Prohibition.--Relief may not be 
                        ordered under subparagraph (A) if the employer 
                        demonstrates by clear and convincing evidence 
                        that the employer would have taken the same 
                        unfavorable personnel action in the absence of 
                        that behavior.
            ``(3) Final order.--
                    ``(A) Deadline for issuance; settlement 
                agreements.--Not later than 120 days after the date of 
                conclusion of a hearing under paragraph (2), the 
                Secretary of Labor shall issue a final order providing 
                the relief prescribed by this paragraph or denying the 
                complaint. At any time before issuance of a final 
                order, a proceeding under this subsection may be 
                terminated on the basis of a settlement agreement 
                entered into by the Secretary of Labor, the 
                complainant, and the person alleged to have committed 
                the violation.
                    ``(B) Remedy.--If, in response to a complaint filed 
                under paragraph (1), the Secretary of Labor determines 
                that a violation of subsection (a) has occurred, the 
                Secretary of Labor shall order the person who committed 
                such violation to--
                            ``(i) take affirmative action to abate the 
                        violation;
                            ``(ii) reinstate the complainant to his or 
                        her former position together with the 
                        compensation (including back pay) and restore 
                        the terms, conditions, and privileges 
                        associated with his or her employment; and
                            ``(iii) provide compensatory damages to the 
                        complainant.
                If such an order is issued under this paragraph, the 
                Secretary of Labor, at the request of the complainant, 
                shall assess against the person whom the order is 
                issued a sum equal to the aggregate amount of all costs 
                and expenses (including attorney's and expert witness 
                fees) reasonably incurred, as determined by the 
                Secretary of Labor, by the complainant for, or in 
                connection with, the bringing the complaint upon which 
                the order was issued.
                    ``(C) Frivolous complaints.--If the Secretary of 
                Labor finds that a complaint under paragraph (1) is 
                frivolous or has been brought in bad faith, the 
                Secretary of Labor may award to the prevailing employer 
                a reasonable attorney's fee not exceeding $1,000.
            ``(4) Review.--
                    ``(A) Appeal to court of appeals.--Any person 
                adversely affected or aggrieved by an order issued 
                under paragraph (3) may obtain review of the order in 
                the United States Court of Appeals for the circuit in 
                which the violation, with respect to which the order 
                was issued, allegedly occurred or the circuit in which 
                the complainant resided on the date of such violation. 
                The petition for review must be filed not later than 60 
                days after the date of issuance of the final order of 
                the Secretary of Labor. Review shall conform to chapter 
                7 of title 5, United States Code. The commencement of 
                proceedings under this subparagraph shall not, unless 
                ordered by the court, operate as a stay of the order.
                    ``(B) Limitation on collateral attack.--An order of 
                the Secretary of Labor with respect to which review 
                could have been obtained under subparagraph (A) shall 
                not be subject to judicial review in any criminal or 
                other civil proceeding.
            ``(5) Enforcement of order by secretary of labor.--Whenever 
        any person has failed to comply with an order issued under 
        paragraph (3), the Secretary of Labor may file a civil action 
        in the United States district court for the district in which 
        the violation was found to occur to enforce such order. In 
        actions brought under this paragraph, the district courts shall 
        have jurisdiction to grant all appropriate relief, including, 
        but not to be limited to, injunctive relief and compensatory 
        damages.
            ``(6) Enforcement of order by parties.--
                    ``(A) Commencement of action.--A person on whose 
                behalf an order was issued under paragraph (3) may 
                commence a civil action against the person to whom such 
                order was issued to require compliance with such order. 
                The appropriate United States district court shall have 
                jurisdiction, without regard to the amount in 
                controversy or the citizenship of the parties, to 
                enforce such order.
                    ``(B) Attorney fees.--The court, in issuing any 
                final order under this paragraph, may award costs of 
                litigation (including reasonable attorney and expert 
                witness fees) to any party whenever the court 
                determines such award costs is appropriate.
    ``(c) Mandamus.--Any nondiscretionary duty imposed by this section 
shall be enforceable in a mandamus proceeding brought under section 
1361 of title 28, United States Code.
    ``(d) Nonapplicability To Deliberate Violations.--Subsection (a) 
shall not apply with respect to an employee of a pipeline, contractor 
or subcontractor who, acting without direction from the pipeline 
contractor or subcontractor (or such person's agent), deliberately 
causes a violation of any requirement relating to pipeline safety under 
this chapter or any other law of the United States.
    ``(e) Contractor Defined.--In this section, the term `contractor' 
means a company that performs safety-sensitive functions by contract 
for a pipeline.''.
    (b) Civil Penalty.--Section 60122(a) is amended by adding at the 
end the following:
    ``(3) A person violating section 60129, or an order issued 
thereunder, is liable to the Government for a civil penalty of not more 
than $1,000 for each violation. The penalties provided by paragraph (1) 
do not apply to a violation of section 60129 or an order issued 
thereunder.''.
    (c) Conforming Amendment.--The chapter analysis for chapter 601 is 
amended by adding at the end the following:

``60129. Protection of employees providing pipeline safety 
                            information.''.

SEC. 775. STATE PIPELINE SAFETY ADVISORY COMMITTEES.

    Within 90 days after receiving recommendations for improvements to 
pipeline safety from an advisory committee appointed by the Governor of 
any State, the Secretary of Transportation shall respond in writing to 
the committee setting forth what action, if any, the Secretary will 
take on those recommendations and the Secretary's reasons for acting or 
not acting upon any of the recommendations.

SEC. 776. FINES AND PENALTIES.

    The Inspector General of the Department of Transportation shall 
conduct an analysis of the Department's assessment of fines and 
penalties on gas transmission and hazardous liquid pipelines, including 
the cost of corrective actions required by the Department in lieu of 
fines, and, no later than 6 months after the date of enactment of this 
Act, shall provide a report to the Senate Committee on Commerce, 
Science, and Transportation and the House Committee on Transportation 
and Infrastructure on any findings and recommendations for actions by 
the Secretary or Congress to ensure the fines assessed are an effective 
deterrent for reducing safety risks.

SEC. 777. STUDY OF RIGHTS-OF-WAY.

    The Secretary of Transportation is authorized to conduct a study on 
how best to preserve environmental resources in conjunction with 
maintaining pipeline rights-of-way. The study shall recognize pipeline 
operators' regulatory obligations to maintain rights-of-way and to 
protect public safety.

SEC. 778. STUDY OF NATURAL GAS RESERVE.

    (a) Findings.--Congress finds that:
            (1) In the last few months, natural gas prices across the 
        country have tripled.
            (2) In California, natural gas prices have increased 
        twenty-fold, from $3 per million British thermal units to 
        nearly $60 per million British thermal units.
            (3) One of the major causes of these price increases is a 
        lack of supply, including a lack of natural gas reserves.
            (4) The lack of a reserve was compounded by the rupture of 
        an El Paso Natural Gas Company pipeline in Carlsbad, New Mexico 
        on August 1, 2000.
            (5) Improving pipeline safety will help prevent similar 
        accidents that interrupt the supply of natural gas and will 
        help save lives.
            (6) It is also necessary to find solutions for the lack of 
        natural gas reserves that could be used during emergencies.
    (b) Study by the National Academy of Sciences.--The Secretary of 
Energy shall request the National Academy of Sciences to--
            (1) conduct a study to--
                    (A) determine the causes of recent increases in the 
                price of natural gas, including whether the increases 
                have been caused by problems with the supply of natural 
                gas or by problems with the natural gas transmission 
                system;
                    (B) identify any Federal or State policies that may 
                have contributed to the price increases; and
                    (C) determine what Federal action would be 
                necessary to improve the reserve supply of natural gas 
                for use in situations of natural gas shortages and 
                price increases, including determining the feasibility 
                and advisability of a Federal strategic natural gas 
                reserve system; and
            (2) not later than 60 days after the date of enactment of 
        this Act, submit to Congress a report on the results of the 
        study.

SEC. 779. STUDY AND REPORT ON NATURAL GAS PIPELINE AND STORAGE 
              FACILITIES IN NEW ENGLAND.

    (a) Study.--The Federal Energy Regulatory Commission, in 
consultation with the Department of Energy, shall conduct a study on 
the natural gas pipeline transmission network in New England and 
natural gas storage facilities associated with that network. In 
carrying out the study, the Commission shall consider--
            (1) the ability of natural gas pipeline and storage 
        facilities in New England to meet current and projected demand 
        by gas-fired power generation plants and other consumers;
            (2) capacity constraints during unusual weather periods;
            (3) potential constraint points in regional, interstate, 
        and international pipeline capacity serving New England; and
            (4) the quality and efficiency of the Federal environmental 
        review and permitting process for natural gas pipelines.
    (b) Report.--Not later than 120 days after the date of the 
enactment of this Act, the Federal Energy Regulatory Commission shall 
prepare and submit to the Senate Committee on Energy and Natural 
Resources and the appropriate committee of the House of Representatives 
a report containing the results of the study conducted under subsection 
(a), including recommendations for addressing potential natural gas 
transmission and storage capacity problems in New England.

           PART III--PIPELINE SECURITY SENSITIVE INFORMATION

SEC. 781. MEETING COMMUNITY RIGHT TO KNOW WITHOUT SECURITY RISKS.

    Section 60117 is amended by adding at the end the following:
    ``(l) Withholding Certain Information.--
            ``(1) In general.--Notwithstanding any other provision of 
        this chapter requiring the Secretary to provide information 
        obtained by the Secretary or an officer, employee, or agent in 
        carrying out this chapter to State or local government 
        officials, the public, or any other person, the Secretary shall 
        withhold such information if it is information that is 
        described in section 552(b)(1)(A) of title 5, United States 
        Code.
            ``(2) Conditional release.--Notwithstanding paragraph (1), 
        upon the receipt of assurances satisfactory to the Secretary 
        that the information will be handled appropriately, the 
        Secretary may provide information permitted to be withheld 
        under that paragraph--
                    ``(A) to the owner or operator of the affected 
                pipeline system;
                    ``(B) to an officer, employee or agent of a 
                Federal, State, tribal, or local government, including 
                a volunteer fire department, concerned with carrying 
                out this chapter, with protecting the facilities, with 
                protecting public safety, or with national security 
                issues;
                    ``(C) in an administrative or judicial proceeding 
                brought under this chapter or an administrative or 
                judicial proceeding that addresses terrorist actions or 
                threats of such actions; or
                    ``(D) to such other persons as the Secretary 
                determines necessary to protect public safety and 
                security.
            ``(3) Report to Congress.--The Secretary shall provide an 
        annual report to the Congress, in appropriate form as 
        determined by the Secretary, containing a summary of 
        determinations made by the Secretary during the preceding year 
        to withhold information from release under paragraph (1).''.

SEC. 782. TECHNICAL ASSISTANCE FOR SECURITY OF PIPELINE FACILITIES.

    The Secretary of Transportation may provide technical assistance to 
an operator of a pipeline facility or to State, tribal, or local 
officials to prevent or respond to acts of terrorism that may impact 
the pipeline facility, including--
            (1) actions by the Secretary that support the use of 
        National Guard or State or Federal personnel to provide 
        additional security for a pipeline facility at risk of 
        terrorist attack or in response to such an attack;
            (2) use of resources available to the Secretary to develop 
        and implement security measures for a pipeline facility;
            (3) identification of security issues with respect to the 
        operation of a pipeline facility; and
            (4) the provision of information and guidance on security 
        practices that prevent damage to pipeline facilities from 
        terrorist attacks.

SEC. 783. CRIMINAL PENALTIES FOR DAMAGING OR DESTROYING A FACILITY.

    Section 60123(b) of title 49, United States Code, is amended--
            (1) by striking ``or'' after ``gas pipeline facility'' and 
        inserting a comma; and
            (2) by inserting after ``liquid pipeline facility'' the 
        following: ``, or either an intrastate gas pipeline facility or 
        an intrastate hazardous liquid pipeline facility that is used 
        in interstate or foreign commerce or in any activity affecting 
        interstate or foreign commerce''.

    DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                     TITLE VIII--FUELS AND VEHICLES

 Subtitle A--CAFE Standards, Alternative Fuels, and Advanced Technology

SEC. 801. INCREASED FUEL ECONOMY STANDARDS.

    (a) Requirement for New Regulations.--
            (1) In general.--The Secretary of Transportation shall 
        issue, under section 32902 of title 49, United States Code, new 
        regulations setting forth increased average fuel economy 
        standards for automobiles that are determined on the basis of 
        the maximum feasible average fuel economy levels for the 
        automobiles, taking into consideration the matters set forth in 
        subsection (f) of such section.
            (2) Time for issuing regulations.--
                    (A) Non-passenger automobiles.--For non-passenger 
                automobiles, the Secretary of Transportation shall 
                issue the final regulations not later than 15 months 
                after the date of the enactment of this Act.
                    (B) Passenger automobiles.--For passenger 
                automobiles, the Secretary of Transportation shall 
                issue--
                            (i) the proposed regulations not later than 
                        180 days after the date of the enactment of 
                        this Act; and
                            (ii) the final regulations not later than 2 
                        years after that date.
    (b) Phased Increases.--The regulations issued pursuant to 
subsection (a) shall specify standards that take effect successively 
over several vehicle model years not exceeding 15 vehicle model years.
    (c) Clarification of Authority To Amend Passenger Automobile 
Standard.--Section 32902(b) of title 49, United States Code, is amended 
by inserting before the period at the end the following: ``or such 
other number as the Secretary prescribes under subsection (c)''.
    (d) Environmental Assessment.--When issuing final regulations 
setting forth increased average fuel economy standards under this 
section, the Secretary of Transportation shall also issue an 
environmental assessment of the effects of the implementation of the 
increased standards on the environment under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.).
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Department of Transportation for fiscal year 2003, 
to remain available until expended, $2,000,000 to carry out this 
section.

SEC. 802. EXPEDITED PROCEDURES FOR CONGRESSIONAL INCREASE IN FUEL 
              ECONOMY STANDARDS.

    (a) Condition for Applicability.--If the Secretary of 
Transportation fails to issue final regulations with respect to non-
passenger automobiles under section 801, or fails to issue final 
regulations with respect to passenger automobiles under such section, 
on or before the date by which such final regulations are required by 
such section to be issued, respectively, then this section shall apply 
with respect to a bill described in subsection (b).
    (b) Bill.--A bill referred to in this subsection is a bill that 
satisfies the following requirements:
            (1) Introduction.--The bill is introduced by one or more 
        Members of Congress not later than 60 days after the date 
        referred to in subsection (a).
            (2) Title.--The title of the bill is as follows: ``A bill 
        to establish new average fuel economy standards for certain 
        motor vehicles.''.
            (3) Text.--The bill provides after the enacting clause only 
        the text specified in subparagraph (A) or (B) or any provision 
        described in subparagraph (C), as follows:
                    (A) Non-passenger automobiles.--In the case of a 
                bill relating to a failure timely to issue final 
                regulations relating to non-passenger automobiles, the 
                following text:
``That, section 32902 of title 49, United States Code, is amended by 
adding at the end the following new subsection:
    ```(__) Non-passenger automobiles.--The average fuel economy 
standard for non-passenger automobiles manufactured by a manufacturer 
in a model year after model year ____ shall be ____ miles per 
gallon.''', the first blank space being filled in with a subsection 
designation, the second blank space being filled in with the number of 
a year, and the third blank space being filled in with a number.
                    (B) Passenger automobiles.--In the case of a bill 
                relating to a failure timely to issue final regulations 
                relating to passenger automobiles, the following text:
``That, section 32902(b) of title 49, United States Code, is amended to 
read as follows:
    ```(b) Passenger Automobiles.--Except as provided in this section, 
the average fuel economy standard for passenger automobiles 
manufactured by a manufacturer in a model year after model year ____ 
shall be ____ miles per gallon.''', the first blank space being filled 
in with the number of a year and the second blank space being filled in 
with a number.
                    (C) Substitute text.--Any text substituted by an 
                amendment that is in order under subsection (c)(3).
    (c) Expedited Procedures.--A bill described in subsection (b) shall 
be considered in a House of Congress in accordance with the procedures 
provided for the consideration of joint resolutions in paragraphs (3) 
through (8) of section 8066(c) of the Department of Defense 
Appropriations Act, 1985 (as contained in section 101(h) of Public Law 
98-473; 98 Stat. 1936), with the following exceptions:
            (1) References to resolution.--The references in such 
        paragraphs to a resolution shall be deemed to refer to the bill 
        described in subsection (b).
            (2) Committees of jurisdiction.--The committees to which 
        the bill is referred under this subsection shall--
                    (A) in the Senate, be the Committee on Commerce, 
                Science, and Transportation; and
                    (B) in the House of Representatives, be the 
                Committee on Energy and Commerce.
            (3) Amendments.--
                    (A) Amendments in order.--Only four amendments to 
                the bill are in order in each House, as follows:
                            (i) Two amendments proposed by the majority 
                        leader of that House.
                            (ii) Two amendments proposed by the 
                        minority leader of that House.
                    (B) Form and content.--To be in order under 
                subparagraph (A), an amendment shall propose to strike 
                all after the enacting clause and substitute text that 
                only includes the same text as is proposed to be 
                stricken except for one or more different numbers in 
                the text.
                    (C) Debate, et cetera.--Subparagraph (B) of section 
                8066(c)(5) of the Department of Defense Appropriations 
                Act, 1985 (98 Stat. 1936) shall apply to the 
                consideration of each amendment proposed pursuant to 
                subparagraph (A) of this paragraph in the same manner 
                as such subparagraph (B) applies to debatable motions.

SEC. 803. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE 
              AVERAGE FUEL ECONOMY.

    Section 32902(f) of title 49, United States Code, is amended to 
read as follows:
    ``(f) Considerations for Decisions on Maximum Feasible Average Fuel 
Economy.--When deciding maximum feasible average fuel economy under 
this section, the Secretary of Transportation shall consider the 
following matters:
            ``(1) Technological feasibility.
            ``(2) Economic practicability.
            ``(3) The effect of other motor vehicle standards of the 
        Government on fuel economy.
            ``(4) The need of the United States to conserve energy.
            ``(5) The desirability of reducing United States dependence 
        on imported oil.
            ``(6) The effects of the average fuel economy standards on 
        motor vehicle and passenger safety.
            ``(7) The effects of increased fuel economy on air quality.
            ``(8) The adverse effects of average fuel economy standards 
        on the relative competitiveness of manufacturers.
            ``(9) The effects of compliance with average fuel economy 
        standards on levels of employment in the United States.
            ``(10) The cost and lead time necessary for the 
        introduction of the necessary new technologies.
            ``(11) The potential for advanced technology vehicles, such 
        as hybrid and fuel cell vehicles, to contribute to the 
        achievement of significant reductions in fuel consumption.
            ``(12) The extent to which the necessity for vehicle 
        manufacturers to incur near-term costs to comply with the 
        average fuel economy standards adversely affects the 
        availability of resources for the development of advanced 
        technology for the propulsion of motor vehicles.
            ``(13) The report of the National Research Council that is 
        entitled `Effectiveness and Impact of Corporate Average Fuel 
        Economy Standards', issued in January 2002.''.

SEC. 804. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE 
              FUELED VEHICLES.

    Section 32906(a)(1) of title 49, United States Code, is amended--
            (1) in subparagraph (A), by striking ``1993-2004'' and 
        inserting ``1993 through 2008''; and
            (2) in subparagraph (B), by striking ``2005-2008'' and 
        inserting ``2009 through 2012''.

SEC. 805. PROCUREMENT OF ALTERNATIVE FUELED AND HYBRID LIGHT DUTY 
              TRUCKS.

    (a) Vehicle Fleets Not Covered by Requirement in Energy Policy Act 
of 1992.--
            (1) Hybrid vehicles.--The head of each agency of the 
        executive branch shall coordinate with the Administrator of 
        General Services to ensure that only hybrid vehicles are 
        procured by or for each agency fleet of light duty trucks that 
        is not in a fleet of vehicles to which section 303 of the 
        Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
            (2) Waiver authority.--The head of an agency, in 
        consultation with the Administrator, may waive the 
        applicability of the policy regarding the procurement of hybrid 
        vehicles in paragraph (1) to that agency to the extent that the 
        head of that agency determines necessary--
                    (A) to meet specific requirements of the agency for 
                capabilities of light duty trucks;
                    (B) to procure vehicles consistent with the 
                standards applicable to the procurement of fleet 
                vehicles for the Federal Government;
                    (C) to adjust to limitations on the commercial 
                availability of light duty trucks that are hybrid 
                vehicles; or
                    (D) to avoid the necessity of procuring a hybrid 
                vehicle for the agency when each of the hybrid vehicles 
                available for meeting the requirements of the agency 
                has a cost to the United States that exceeds the costs 
                of comparable nonhybrid vehicles by a factor that is 
                significantly higher than the difference between--
                            (i) the real cost of the hybrid vehicle to 
                        retail purchasers, taking into account the 
                        benefit of any tax incentives available to 
                        retail purchasers for the purchase of the 
                        hybrid vehicle; and
                            (ii) the costs of the comparable nonhybrid 
                        vehicles to retail purchasers.
            (3) Applicability to procurements after fiscal year 2004.--
        This subsection applies with respect to procurements of light 
        duty trucks in fiscal year 2005 and subsequent fiscal years.
    (b) Requirement To Exceed Requirement in Energy Policy Act of 
1992.--
            (1) Light duty trucks.--The head of each agency of the 
        executive branch shall coordinate with the Administrator of 
        General Services to ensure that, of the light duty trucks 
        procured in fiscal years after fiscal year 2004 for the fleets 
        of light duty vehicles of the agency to which section 303 of 
        the Energy Policy Act of 1992 (42 U.S.C. 13212) applies--
                    (A) 5 percent of the total number of such trucks 
                that are procured in each of fiscal years 2005 and 2006 
                are alternative fueled vehicles or hybrid vehicles; and
                    (B) 10 percent of the total number of such trucks 
                that are procured in each fiscal year after fiscal year 
                2006 are alternative fueled vehicles or hybrid 
                vehicles.
            (2) Counting of trucks.--Light duty trucks acquired for an 
        agency of the executive branch that are counted to comply with 
        section 303 of the Energy Policy Act of 1992 (42 U.S.C. 13212) 
        for a fiscal year shall be counted to determine the total 
        number of light duty trucks procured for that agency for that 
        fiscal year for the purposes of paragraph (1), but shall not be 
        counted to satisfy the requirement in that paragraph.
    (c) Definitions.--In this section:
            (1) Hybrid vehicle.--The term ``hybrid vehicle'' means--
                    (A) a motor vehicle that draws propulsion energy 
                from onboard sources of stored energy that are both--
                            (i) an internal combustion or heat engine 
                        using combustible fuel; and
                            (ii) a rechargeable energy storage system; 
                        and
                    (B) any other vehicle that is defined as a hybrid 
                vehicle in regulations prescribed by the Secretary of 
                Energy for the administration of title III of the 
                Energy Policy Act of 1992.
            (2) Alternative fueled vehicle.--The term ``alternative 
        fueled vehicle'' has the meaning given that term in section 301 
        of the Energy Policy Act of 1992 (42 U.S.C. 13211).
    (d) Inapplicability to Department of Defense.--This section does 
not apply to the Department of Defense, which is subject to comparable 
requirements under section 318 of the National Defense Authorization 
Act for Fiscal Year 2002 (Public Law 107-107; 115 Stat. 1055; 10 U.S.C. 
2302 note).

SEC. 806. USE OF ALTERNATIVE FUELS.

    (a) Exclusive Use of Alternative Fuels in Dual Fueled Vehicles.--
The head of each agency of the executive branch shall coordinate with 
the Administrator of General Services to ensure that, not later than 
January 1, 2009, the fuel actually used in the fleet of dual fueled 
vehicles used by the agency is an alternative fuel.
    (b) Waiver Authority.--
            (1) Capability waiver.--
                    (A) Authority.--If the Secretary of Transportation 
                determines that not all of the dual fueled vehicles can 
                operate on alternative fuels at all times, the 
                Secretary may waive the requirement of subsection (a) 
                in part, but only to the extent that--
                            (i) not later than January 1, 2009, not 
                        less than 50 percent of the total annual volume 
                        of fuel used in the dual fueled vehicles shall 
                        be alternative fuels; and
                            (ii) not later than January 1, 2011, not 
                        less than 75 percent of the total annual volume 
                        of fuel used in the dual fueled vehicles shall 
                        be alternative fuels.
                    (B) Expiration.--In no case may a waiver under 
                subparagraph (A) remain in effect after December 31, 
                2012.
            (2) Regional fuel availability waiver.--The Secretary may 
        waive the applicability of the requirement of subsection (a) to 
        vehicles used by an agency in a particular geographic area 
        where the alternative fuel otherwise required to be used in the 
        vehicles is not reasonably available to retail purchasers of 
        the fuel, as certified to the Secretary by the head of the 
        agency.
    (c) Definitions.--In this section:
            (1) Alternative fuel.--The term ``alternative fuel'' has 
        the meaning given that term in section 32901(a)(1) of title 49, 
        United States Code.
            (2) Dual fueled vehicle.--The term ``dual fueled vehicle'' 
        has the meaning given the term ``dual fueled automobile'' in 
        section 32901(a)(8) of title 49, United States Code.
            (3) Fleet.--The term ``fleet'', with respect to dual fueled 
        vehicles, has the meaning that is given that term with respect 
        to light duty motor vehicles in section 301(9) of the Energy 
        Policy Act of 1992 (42 U.S.C. 13211(9)).

SEC. 807. HYBRID ELECTRIC AND FUEL CELL VEHICLES.

    (a) Expansion of Scope.--The Secretary of Energy shall expand the 
research and development program of the Department of Energy on 
advanced technologies for improving the environmental cleanliness of 
vehicles to emphasize research and development on the following:
            (1) Fuel cells, including--
                    (A) high temperature membranes for fuel cells; and
                    (B) fuel cell auxiliary power systems.
            (2) Hydrogen storage.
            (3) Advanced vehicle engine and emission control systems.
            (4) Advanced batteries and power electronics for hybrid 
        vehicles.
            (5) Advanced fuels.
            (6) Advanced materials.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to the Department of Energy for fiscal year 2003, the 
amount of $225,000,000 for carrying out the expanded research and 
development program provided for under this section.

SEC. 808. DIESEL FUELED VEHICLES.

    (a) Diesel Combustion and After Treatment Technologies.--The 
Secretary of Energy shall accelerate research and development directed 
toward the improvement of diesel combustion and after treatment 
technologies for use in diesel fueled motor vehicles.
    (b) Goal.--
            (1) Compliance with tier 2 emission standards by 2010.--The 
        Secretary shall carry out subsection (a) with a view to 
        developing and demonstrating diesel technology meeting tier 2 
        emission standards not later than 2010.
            (2) Tier 2 emission standards defined.--In this subsection, 
        the term ``tier 2 emission standards'' means the motor vehicle 
        emission standards promulgated by the Administrator of the 
        Environmental Protection Agency on February 10, 2000, under 
        sections 202 and 211 of the Clean Air Act to apply to passenger 
        cars, light trucks, and larger passenger vehicles of model 
        years after the 2003 vehicle model year.

SEC. 809. FUEL CELL DEMONSTRATION.

    (a) Program Required.--The Secretary of Energy and the Secretary of 
Defense shall jointly carry out a program to demonstrate--
            (1) fuel cell technologies developed in the PNGV and 
        Freedom Car programs;
            (2) fuel cell technologies developed in research and 
        development programs of the Department of Defense; and
            (3) follow-on fuel cell technologies.
    (b) Purposes of Program.--The purposes of the program are to 
identify and support technological advances that are necessary to 
achieve accelerated availability of fuel cell technology for use both 
for nonmilitary and military purposes.
    (c) Cooperation With Industry.--
            (1) In general.--The demonstration program shall be carried 
        out in cooperation with industry, including the automobile 
        manufacturing industry and the automotive systems and component 
        suppliers industry.
            (2) Cost sharing.--The Secretary of Energy and the 
        Secretary of Defense shall provide for industry to bear, in 
        cash or in kind, at least one-half of the total cost of 
        carrying out the demonstration program.
    (d) Definitions.--In this section:
            (1) PNGV program.--The term ``PNGV program'' means the 
        Partnership for a New Generation of Vehicles, a cooperative 
        program engaged in by the Departments of Commerce, Energy, 
        Transportation, and Defense, the Environmental Protection 
        Agency, the National Science Foundation, and the National 
        Aeronautics and Space Administration with the automotive 
        industry for the purpose of developing a new generation of 
        vehicles with capabilities resulting in significantly improved 
        fuel efficiency together with low emissions without 
        compromising the safety, performance, affordability, or utility 
        of the vehicles.
            (2) Freedom car program.--The term ``Freedom Car program'' 
        means a cooperative research program engaged in by the 
        Department of Energy with the United States Council on 
        Automotive Research as a follow-on to the PNGV program.

SEC. 810. BUS REPLACEMENT.

    (a) Requirement for Study.--The Secretary of Transportation shall 
carry out a study to determine how best to provide for converting the 
composition of the fleets of buses in metropolitan areas and school 
systems from buses utilizing current diesel technology to--
            (1) buses that draw propulsion from onboard fuel cells;
            (2) buses that are hybrid electric vehicles;
            (3) buses that are fueled by clean-burning fuels, such as 
        renewable fuels (including agriculture-based biodiesel fuels), 
        natural gas, and ultra-low sulphur diesel;
            (4) buses that are powered by clean diesel engines: or
            (5) an assortment of buses described in paragraphs (1), 
        (2), (3), and (4).
    (b) Report.--
            (1) Requirement.--The Secretary of Transportation shall 
        submit a report on the results of the study on bus fleet 
        conversions under subsection (a) to Congress.
            (2) Content.--The report on bus fleet conversions shall 
        include the following:
                    (A) An assessment of effectuating conversions by 
                the following means:
                            (i) Replacement of buses.
                            (ii) Replacement of power and propulsion 
                        systems in buses utilizing current diesel 
                        technology.
                            (iii) Other means.
                    (B) Feasible schedules for carrying out the 
                conversions.
                    (C) Estimated costs of carrying out the 
                conversions.
                    (D) An assessment of the benefits of the 
                conversions in terms of emissions control and reduction 
                of fuel consumption.

SEC. 811. AVERAGE FUEL ECONOMY STANDARDS FOR PICKUP TRUCKS.

    (a) In General.--Section 32902(a) of title 49, United States Code, 
is amended--
            (1) by inserting ``(1)'' after the after ``Automobiles.--
        ''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The average fuel economy standard for pickup trucks 
manufactured by a manufacturer in a model year after model year 2004 
shall be no higher than 20.7 miles per gallon. No average fuel economy 
standard prescribed under another provision of this section shall apply 
to pickup trucks.''.
    (b) Definition Of Pickup Truck.--Section 32901(a) of such title is 
amended by adding at the end the following new paragraph:
            ``(17) `pickup truck' has the meaning given that term in 
        regulations prescribed by the Secretary for the administration 
        of this chapter, as in effect on January 1, 2002, except that 
        such term shall also include any additional vehicle that the 
        Secretary defines as a pickup truck in regulations prescribed 
        for the administration of this chapter after such date.''.

SEC. 812. EXCEPTION TO HOV PASSENGER REQUIREMENTS FOR ALTERNATIVE FUEL 
              VEHICLES.

    Section 102(a)(1) of title 23, United States Code, is amended by 
inserting after ``required'' the following: ``(unless, in the 
discretion of the State transportation department, the vehicle is being 
operated on, or is being fueled by, an alternative fuel (as defined in 
section 301(2) of the Energy Policy Act of 1992 (42 U.S.C. 
13211(2)))''.

SEC. 813. DATA COLLECTION.

    Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding at the end the following:
    ``(m) In order to improve the ability to evaluate the effectiveness 
of the Nation's renewable fuels mandate, the Administrator shall 
conduct and publish the results of a survey of renewable fuels 
consumption in the motor vehicle fuels market in the United States 
monthly, and in a manner designed to protect the confidentiality of 
individual responses. In conducting the survey, the Administrator shall 
collect information retrospectively to 1998, both on a national basis 
and a regional basis, including--
            (1) the quantity of renewable fuels produced;
            (2) the cost of production;
            (3) the cost of blending and marketing;
            (4) the quantity of renewable fuels blended;
            (5) the quantity of renewable fuels imported; and
            (6) market price data.

SEC. 814. GREEN SCHOOL BUS PILOT PROGRAM.

    (a) Establishment.--The Secretary of Energy and the Secretary of 
Transportation shall jointly establish a pilot program for awarding 
grants on a competitive basis to eligible entities for the 
demonstration and commercial application of alternative fuel school 
buses and ultra-low sulfur diesel school buses.
    (b) Requirements.--Not later than 3 months after the date of the 
enactment of this Act, the Secretary shall establish and publish in the 
Federal Register grant requirements on eligibility for assistance, and 
on implementation of the program established under subsection (a), 
including certification requirements to ensure compliance with this 
subtitle.
    (c) Solicitation.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall solicit proposals for grants 
under this section.
    (d) Eligible Recipients.--A grant shall be awarded under this 
section only--
            (1) to a local governmental entity responsible for 
        providing school bus service for one or more public school 
        systems; or
            (2) jointly to an entity described in paragraph (1) and a 
        contracting entity that provides school bus service to the 
        public school system or systems.
    (e) Types of Grants.--
            (1) In general.--Grants under this section shall be for the 
        demonstration and commercial application of technologies to 
        facilitate the use of alternative fuel school buses and ultra-
        low sulfur diesel school buses instead of buses manufactured 
        before model year 1977 and diesel-powered buses manufactured 
        before model year 1991.
            (2) No economic benefit.--Other than the receipt of the 
        grant, a recipient of a grant under this section may not 
        receive any economic benefit in connection with the receipt of 
        the grant.
            (3) Priority of grant applications.--The Secretary shall 
        give priority to awarding grants to applicants who can 
        demonstrate the use of alternative fuel buses and ultra-low 
        sulfur diesel school buses instead of buses manufactured before 
        model year 1977.
    (f) Conditions of Grant.--A grant provided under this section shall 
include the following conditions:
            (1) All buses acquired with funds provided under the grant 
        shall be operated as part of the school bus fleet for which the 
        grant was made for a minimum of 5 years.
            (2) Funds provided under the grant may only be used--
                    (A) to pay the cost, except as provided in 
                paragraph (3), of new alternative fuel school buses or 
                ultra-low sulfur diesel school buses, including State 
                taxes and contract fees; and
                    (B) to provide--
                            (i) up to 10 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will only be available to the 
                        grant recipient; and
                            (ii) up to 15 percent of the price of the 
                        alternative fuel buses acquired, for necessary 
                        alternative fuel infrastructure if the 
                        infrastructure will be available to the grant 
                        recipient and to other bus fleets.
            (3) The grant recipient shall be required to provide at 
        least the lesser of 15 percent of the total cost of each bus 
        received or $15,000 per bus.
            (4) In the case of a grant recipient receiving a grant to 
        demonstrate ultra-low sulfur diesel school buses, the grant 
        recipient shall be required to provide documentation to the 
        satisfaction of the Secretary that diesel fuel containing 
        sulfur at not more than 15 parts per million is available for 
        carrying out the purposes of the grant, and a commitment by the 
        applicant to use such fuel in carrying out the purposes of the 
        grant.
    (g) Buses.--Funding under a grant made under this section may only 
be used to demonstrate the use of new alternative fuel school buses or 
ultra-low sulfur diesel school buses that--
            (1) have a gross vehicle weight greater than 14,000 pounds;
            (2) are powered by a heavy duty engine;
            (3) in the case of alternative fuel school buses, emit not 
        more than--
                    (A) for buses manufactured in model year 2002, 2.5 
                grams per brake horsepower-hour of nonmethane 
                hydrocarbons and oxides of nitrogen and .01 grams per 
                brake horsepower-hour of particulate matter; and
                    (B) for buses manufactured in model years 2003 
                through 2006, 1.8 grams per brake horsepower-hour of 
                nonmethane hydrocarbons and oxides of nitrogen and .01 
                grams per brake horsepower-hour of particulate matter; 
                and
            (4) in the case of ultra-low sulfur diesel school buses, 
        emit not more than the lesser of--
                    (A) the emissions of nonmethane hydrocarbons, 
                oxides of nitrogen, and particulate matter of the best 
                performing technology of the same class of ultra-low 
                sulfur diesel school buses commercially available at 
                the time the grant is made; or
                    (B) the applicable following amounts--
                            (i) for buses manufactured in model year 
                        2002 or 2003, 3.0 grams per brake horsepower-
                        hour of oxides of nitrogen and .01 grams per 
                        brake horsepower-hour of particulate matter; 
                        and
                            (ii) for buses manufactured in model years 
                        2004 through 2006, 2.5 grams per brake 
                        horsepower-hour of nonmethane hydrocarbons and 
                        oxides of nitrogen and .01 grams per brake 
                        horsepower-hour of particulate matter.
    (h) Deployment and Distribution.--The Secretary shall seek to the 
maximum extent practicable to achieve nationwide deployment of 
alternative fuel school buses through the program under this section, 
and shall ensure a broad geographic distribution of grant awards, with 
a goal of no State receiving more than 10 percent of the grant funding 
made available under this section for a fiscal year.
    (i) Limit on Funding.--The Secretary shall provide not less than 20 
percent and not more than 25 percent of the grant funding made 
available under this section for any fiscal year for the acquisition of 
ultra-low sulfur diesel school buses.
    (j) Definitions.--For purposes of this section--
            (1) the term ``alternative fuel school bus'' means a bus 
        powered substantially by electricity (including electricity 
        supplied by a fuel cell), or by liquefied natural gas, 
        compressed natural gas, liquefied petroleum gas, hydrogen, 
        propane, or methanol or ethanol at no less than 85 percent by 
        volume;
            (2) the term ``idling'' means not turning off an engine 
        while remaining stationary for more than approximately 3 
        minutes; and
            (3) the term ``ultra-low sulfur diesel school bus'' means a 
        school bus powered by diesel fuel which contains sulfur at not 
        more than 15 parts per million.
    (k) Reduction of School Bus Idling.--Each local educational agency 
(as defined in section 9101 of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 7801)) that receives Federal funds under the 
Elementary and Secondary Education Act of 1965 (20 U.S.C. 6301 et seq.) 
is encouraged to develop a policy to reduce the incidence of school 
buses idling at schools when picking up and unloading students.

SEC. 815. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION PROGRAM.

    (a) Establishment of Program.--The Secretary shall establish a 
program for entering into cooperative agreements with private sector 
fuel cell bus developers for the development of fuel cell-powered 
school buses, and subsequently with not less than two units of local 
government using natural gas-powered school buses and such private 
sector fuel cell bus developers to demonstrate the use of fuel cell-
powered school buses.
    (b) Cost Sharing.--The non-Federal contribution for activities 
funded under this section shall be not less than--
            (1) 20 percent for fuel infrastructure development 
        activities; and
            (2) 50 percent for demonstration activities and for 
        development activities not described in paragraph (1).
    (c) Funding.--No more than $25,000,000 of the amounts authorized 
under section 815 may be used for carrying out this section for the 
period encompassing fiscal years 2003 through 2006.
    (d) Reports to Congress.--Not later than 3 years after the date of 
the enactment of this Act, and not later than October 1, 2006, the 
Secretary shall transmit to the appropriate congressional committees a 
report that--
            (1) evaluates the process of converting natural gas 
        infrastructure to accommodate fuel cell-powered school buses; 
        and
            (2) assesses the results of the development and 
        demonstration program under this section.

SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary of Energy 
for carrying out sections 814 and 815, to remain available until 
expended--
            (1) $50,000,000 for fiscal year 2003;
            (2) $60,000,000 for fiscal year 2004;
            (3) $70,000,000 for fiscal year 2005; and
            (4) $80,000,000 for fiscal year 2006.

SEC. 817. TEMPORARY BIODIESEL CREDIT EXPANSION.

    (a) Biodiesel Credit Expansion.--Section 312(b) of the Energy 
Policy Act of 1992 (42 U.S.C. 13220(b)) is amended by striking 
paragraph (2) and inserting the following:
            ``(2) Use.--
                    ``(A) In general.--A fleet or covered person--
                            ``(i) may use credits allocated under 
                        subsection (a) to satisfy more than 50 percent 
                        of the alternative fueled vehicle requirements 
                        of a fleet or covered person under this title, 
                        title IV, and title V; but
                            ``(ii) may use credits allocated under 
                        subsection (a) to satisfy 100 percent of the 
                        alternative fueled vehicle requirements of a 
                        fleet or covered person under title V for 1 or 
                        more of model years 2002 through 2005.
                    ``(B) Applicability.--Subparagraph (A) does not 
                apply to a fleet or covered person that is a biodiesel 
                alternative fuel provider described in section 
                501(a)(2)(A).''.
    (b) Treatment as Section 508 Credits.--Section 312(c) of the Energy 
Policy Act of 1992 (42 U.S.C. 13220(c)) is amended--
            (1) in the subsection heading, by striking ``Credit not'' 
        and inserting ``Treatment as''; and
            (2) by striking ``shall not be considered'' and inserting 
        ``shall be treated as''.
    (c) Alternative Fueled Vehicle Study and Report.--
            (1) Definitions.--In this subsection:
                    (A) Alternative fuel.--The term ``alternative 
                fuel'' has the meaning given the term in section 301 of 
                the Energy Policy Act of 1992 (42 U.S.C. 13211).
                    (B) Alternative fueled vehicle.--The term 
                ``alternative fueled vehicle'' has the meaning given 
                the term in section 301 of the Energy Policy Act of 
                1992 (42 U.S.C. 13211).
                    (C) Light duty motor vehicle.--The term ``light 
                duty motor vehicle'' has the meaning given the term in 
                section 301 of the Energy Policy Act of 1992 (42 U.S.C. 
                13211).
                    (D) Secretary.--The term ``Secretary'' means the 
                Secretary of Energy.
            (2) Biodiesel credit extension study.--As soon as 
        practicable after the date of enactment of this Act, the 
        Secretary shall conduct a study--
                    (A) to determine the availability and cost of light 
                duty motor vehicles that qualify as alternative fueled 
                vehicles under title V of the Energy Policy Act of 1992 
                (42 U.S.C. 13251 et seq.); and
                    (B) to compare--
                            (i) the availability and cost of biodiesel; 
                        with
                            (ii) the availability and cost of fuels 
                        that qualify as alternative fuels under title V 
                        of the Energy Policy Act of 1992 (42 U.S.C. 
                        13251 et seq.).
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report that--
                    (A) describes the results of the study conducted 
                under paragraph (2); and
                    (B) includes any recommendations of the Secretary 
                for legislation to extend the temporary credit provided 
                under subsection (a) beyond model year 2005.

SEC. 818. NEIGHBORHOOD ELECTRIC VEHICLES.

    Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 13211) is 
amended--
            (1) by striking ``or a dual fueled vehicle'' and inserting 
        ``, a dual fueled vehicle, or a neighborhood electric 
        vehicle'';
            (2) by striking ``and'' at the end of paragraph (13);
            (3) by striking the period at the end of subparagraph (14) 
        and inserting ``; and''; and
            (4) by adding at the end the following:
            ``(15) the term `neighborhood electric vehicle' means a 
        motor vehicle that qualifies as both--
                    ``(A) a low-speed vehicle, as such term is defined 
                in section 571.3(b) of title 49, Code of Federal 
                Regulations; and
                    ``(B) a zero-emission vehicle, as such term is 
                defined in section 86.1703-99 of title 40, Code of 
                Federal Regulations.''.

SEC. 819. CREDIT FOR HYBRID VEHICLES, DEDICATED ALTERNATIVE FUEL 
              VEHICLES, AND INFRASTRUCTURE.

    Section 507 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is 
amended by adding at the end the following:
    ``(p) Credits for New Qualified Hybrid Motor Vehicles.--
            ``(1) Definitions.--In this subsection:
                    ``(A) 2000 model year city fuel efficiency.--The 
                term `2000 model year city fuel efficiency', with 
                respect to a motor vehicle, means fuel efficiency 
                determined in accordance with the following tables:
                            ``(i) In the case of a passenger 
                        automobile:
                                               The 2000 model year city
``If vehicle inertia weight class                   fuel efficiency is:
        is:

    1,500 or 1,750 lbs............................            43.7 mpg 
    2,000 lbs.....................................            38.3 mpg 
    2,250 lbs.....................................            34.1 mpg 
    2,500 lbs.....................................            30.7 mpg 
    2,750 lbs.....................................            27.9 mpg 
    3,000 lbs.....................................            25.6 mpg 
    3,500 lbs.....................................            22.0 mpg 
    4,000 lbs.....................................            19.3 mpg 
    4,500 lbs.....................................            17.2 mpg 
    5,000 lbs.....................................            15.5 mpg 
    5,500 lbs.....................................            14.1 mpg 
    6,000 lbs.....................................            12.9 mpg 
    6,500 lbs.....................................            11.9 mpg 
    7,000 to 8,500 lbs............................            11.1 mpg.
                            ``(ii) In the case of a light truck:

                                               The 2000 model year city
``If vehicle inertia weight class                   fuel efficiency is:
        is:
    1,500 or 1,750 lbs............................            37.6 mpg 
    2,000 lbs.....................................            33.7 mpg 
    2,250 lbs.....................................            30.6 mpg 
    2,500 lbs.....................................            28.0 mpg 
    2,750 lbs.....................................            25.9 mpg 
    3,000 lbs.....................................            24.1 mpg 
    3,500 lbs.....................................            21.3 mpg 
    4,000 lbs.....................................            19.0 mpg 
    4,500 lbs.....................................            17.3 mpg 
    5,000 lbs.....................................            15.8 mpg 
    5,500 lbs.....................................            14.6 mpg 
    6,000 lbs.....................................            13.6 mpg 
    6,500 lbs.....................................            12.8 mpg 
    7,000 to 8,500 lbs............................            12.0 mpg.
                    ``(B) Administrator.--The term `Administrator' 
                means the Administrator of the Environmental Protection 
                Agency.
                    ``(C) Energy storage device.--The term `energy 
                storage device' means an onboard rechargeable energy 
                storage system or similar storage device.
                    ``(D) Fuel efficiency.--The term `fuel efficiency' 
                means the percentage increased fuel efficiency 
                specified in table 1 in paragraph (2)(C) over the 
                average 2000 model year city fuel efficiency of 
                vehicles in the same weight class.
                    ``(E) Maximum available power.--The term `maximum 
                available power', with respect to a new qualified 
                hybrid motor vehicle that is a passenger vehicle or 
                light truck, means the quotient obtained by dividing--
                            ``(i) the maximum power available from the 
                        electrical storage device of the new qualified 
                        hybrid motor vehicle, during a standard 10-
                        second pulse power or equivalent test; by
                            ``(ii) the sum of--
                                    ``(I) the maximum power described 
                                in clause (i); and
                                    ``(II) the net power of the 
                                internal combustion or heat engine, as 
                                determined in accordance with standards 
                                established by the Society of 
                                Automobile Engineers.
                    ``(F) Motor vehicle.--The term `motor vehicle' has 
                the meaning given the term in section 216 of the Clean 
                Air Act (42 U.S.C. 7550).
                    ``(G) New qualified hybrid motor vehicle.--The term 
                `new qualified hybrid motor vehicle' means a motor 
                vehicle that--
                            ``(i) draws propulsion energy from both--
                                    ``(I) an internal combustion engine 
                                (or heat engine that uses combustible 
                                fuel); and
                                    ``(II) an energy storage device;
                            ``(ii) in the case of a passenger 
                        automobile or light truck--
                                    ``(I) in the case of a 2001 or 
                                later model vehicle, receives a 
                                certificate of conformity under the 
                                Clean Air Act (42 U.S.C. 7401 et seq.) 
                                and produces emissions at a level that 
                                is at or below the applicable 
                                qualifying California low emissions 
                                vehicle standards established under 
                                authority of section 243(e)(2) of the 
                                Clean Air Act (42 U.S.C. 7583(e)(2)) 
                                for that make and model year; and
                                    ``(II) in the case of a 2004 or 
                                later model vehicle, is certified by 
                                the Administrator as producing 
                                emissions at a level that is at or 
                                below the level established for Bin 5 
                                vehicles in the Tier 2 regulations 
                                promulgated by the Administrator under 
                                section 202(i) of the Clean Air Act (42 
                                U.S.C. 7521(i)) for that make and model 
                                year vehicle; and
                            ``(iii) employs a vehicle braking system 
                        that recovers waste energy to charge an energy 
                        storage device.
                    ``(H) Vehicle inertia weight class.--The term 
                `vehicle inertia weight class' has the meaning given 
                the term in regulations promulgated by the 
                Administrator for purposes of the administration of 
                title II of the Clean Air Act (42 U.S.C. 7521 et seq.).
            ``(2) Allocation.--
                    ``(A) In general.--The Secretary shall allocate a 
                partial credit to a fleet or covered person under this 
                title if the fleet or person acquires a new qualified 
                hybrid motor vehicle that is eligible to receive a 
                credit under each of the tables in subparagraph (C).
                    ``(B) Amount.--The amount of a partial credit 
                allocated under subparagraph (A) for a vehicle 
                described in that subparagraph shall be equal to the 
                sum of--
                            ``(i) the partial credits determined under 
                        table 1 in subparagraph (C); and
                            ``(ii) the partial credits determined under 
                        table 2 in subparagraph (C).
                    ``(C) Tables.--The tables referred to in 
                subparagraphs (A) and (B) are as follows:

                               ``Table 1

  
                                                              Amount of
``Partial credit for increased fuel efficiency:
                                                                credit:
        At least 125% but less than 150% of 2000                  0.14 
            model year city fuel efficiency.
        At least 150% but less than 175% of 2000                  0.21 
            model year city fuel efficiency.
        At least 175% but less than 200% of 2000                  0.28 
            model year city fuel efficiency.
        At least 200% but less than 225% of 2000                  0.35 
            model year city fuel efficiency.
        At least 225% but less than 250% of 2000                  0.50.
            model year city fuel efficiency.

                               ``Table 2

  
                                                              Amount of
``Partial credit for `Maximum Available Power':
                                                                credit:
        At least 5% but less than 10%................            0.125 
        At least 10% but less than 20%...............            0.250 
        At least 20% but less than 30%...............            0.375 
        At least 30% or more.........................            0.500.
                    ``(D) Use of credits.--At the request of a fleet or 
                covered person allocated a credit under this 
                subsection, the Secretary shall, for the year in which 
                the acquisition of the qualified hybrid motor vehicle 
                is made, treat that credit as the acquisition of 1 
                alternative fueled vehicle that the fleet or covered 
                person is required to acquire under this title.
            ``(3) Regulations.--The Secretary shall promulgate 
        regulations under which any Federal fleet that acquires a new 
        qualified hybrid motor vehicle will receive partial credits 
        determined under the tables contained in paragraph (2)(C) for 
        purposes of meeting the requirements of section 303.
    ``(q) Credit for Substantial Contribution Towards Use of Dedicated 
Vehicles in Noncovered Fleets.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Dedicated vehicle.--The term `dedicated 
                vehicle' includes--
                            ``(i) a light, medium, or heavy duty 
                        vehicle; and
                            ``(ii) a neighborhood electric vehicle.
                    ``(B) Medium or heavy duty vehicle.--The term 
                `medium or heavy duty vehicle' includes a vehicle 
                that--
                            ``(i) operates solely on alternative fuel; 
                        and
                            ``(ii)(I) in the case of a medium duty 
                        vehicle, has a gross vehicle weight rating of 
                        more than 8,500 pounds but not more than 14,000 
                        pounds; or
                            ``(II) in the case of a heavy duty vehicle, 
                        has a gross vehicle weight rating of more than 
                        14,000 pounds.
                    ``(C) Substantial contribution.--The term 
                `substantial contribution' (equal to 1 full credit) 
                means not less than $15,000 in cash or in kind 
                services, as determined by the Secretary.
            ``(2) Issuance of credits.--The Secretary shall issue a 
        credit to a fleet or covered person under this title if the 
        fleet or person makes a substantial contribution toward the 
        acquisition and use of dedicated vehicles by a person that 
        owns, operates, leases, or otherwise controls a fleet that is 
        not covered by this title.
            ``(3) Multiple credits for medium and heavy duty dedicated 
        vehicles.--The Secretary shall issue 2 full credits to a fleet 
        or covered person under this title if the fleet or person 
        acquires a medium or heavy duty dedicated vehicle.
            ``(4) Use of credits.--At the request of a fleet or covered 
        person allocated a credit under this subsection, the Secretary 
        shall, for the year in which the acquisition of the dedicated 
        vehicle is made, treat that credit as the acquisition of 1 
        alternative fueled vehicle that the fleet or covered person is 
        required to acquire under this title.
            ``(5) Limitation.--Per vehicle credits acquired under this 
        subsection shall not exceed the per vehicle credits allowed 
        under this section to a fleet for qualifying vehicles in each 
        of the weight categories (light, medium, or heavy duty).
    ``(r) Credit for Substantial Investment in Alternative Fuel 
Infrastructure.--
            ``(1) Definitions.--In this section, the term `qualifying 
        infrastructure' means--
                    ``(A) equipment required to refuel or recharge 
                alternative fueled vehicles;
                    ``(B) facilities or equipment required to maintain, 
                repair, or operate alternative fueled vehicles;
                    ``(C) training programs, educational materials, or 
                other activities necessary to provide information 
                regarding the operation, maintenance, or benefits 
                associated with alternative fueled vehicles; and
                    ``(D) such other activities the Secretary considers 
                to constitute an appropriate expenditure in support of 
                the operation, maintenance, or further widespread 
                adoption of or utilization of alternative fueled 
                vehicles.
            ``(2) Issuance of credits.--The Secretary shall issue a 
        credit to a fleet or covered person under this title for 
        investment in qualifying infrastructure if the qualifying 
        infrastructure is open to the general public during regular 
        business hours.
            ``(3) Amount.--For the purposes of credits under this 
        subsection--
                    ``(A) 1 credit shall be equal to a minimum 
                investment of $25,000 in cash or in kind services, as 
                determined by the Secretary; and
                    ``(B) except in the case of a Federal or State 
                fleet, no part of the investment may be provided by 
                Federal or State funds.
            ``(4) Use of credits.--At the request of a fleet or covered 
        person allocated a credit under this subsection, the Secretary 
        shall, for the year in which the investment is made, treat that 
        credit as the acquisition of 1 alternative fueled vehicle that 
        the fleet or covered person is required to acquire under this 
        title.''.

SEC. 820. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating subsection (o) as subsection (q); and
            (2) by inserting after subsection (n) the following:
    ``(o) Renewable Fuel Pprogram.--
            ``(1) Definitions.--In this section:
                    ``(A) Cellulosic biomass ethanol.--The term 
                `cellulosic biomass ethanol' means ethanol derived from 
                any lignocellulosic or hemicellulosic matter that is 
                available on a renewable or recurring basis, 
                including--
                            ``(i) dedicated energy crops and trees;
                            ``(ii) wood and wood residues;
                            ``(iii) plants;
                            ``(iv) grasses;
                            ``(v) agricultural residues;
                            ``(vi) fibers;
                            ``(vii) animal wastes and other waste 
                        materials; and
                            ``(viii) municipal solid waste.
                    ``(B) Renewable fuel.--
                            ``(i) In general.--The term `renewable 
                        fuel' means motor vehicle fuel that--
                                    ``(I)(aa) is produced from grain, 
                                starch, oilseeds, or other biomass; or
                                    ``(bb) is natural gas produced from 
                                a biogas source, including a landfill, 
                                sewage waste treatment plant, feedlot, 
                                or other place where decaying organic 
                                material is found; and
                                    ``(II) is used to replace or reduce 
                                the quantity of fossil fuel present in 
                                a fuel mixture used to operate a motor 
                                vehicle.
                            ``(ii) Inclusion.--The term `renewable 
                        fuel' includes cellulosic biomass ethanol and 
                        biodiesel (as defined in section 312(f) of the 
                        Energy Policy Act of 1992 (42 U.S.C. 13220(f)).
                    ``(C) Small refinery.--The term `small refinery' 
                means a refinery for which average aggregate daily 
                crude oil throughput for the calendar year (as 
                determined by dividing the aggregate throughput for the 
                calendar year by the number of days in the calendar 
                year) does not exceed 75,000 barrels.
            ``(2) Renewable fuel program.--
                    ``(A) In general.--Not later than 1 year from 
                enactment of this provision, the Administrator shall 
                promulgate regulations ensuring that gasoline sold or 
                dispensed to consumers in the United States, on an 
                annual average basis, contains the applicable volume of 
                renewable fuel as specified in subparagraph (B). 
                Regardless of the date of promulgation, such 
                regulations shall contain compliance provisions for 
                refiners, blenders, and importers, as appropriate, to 
                ensure that the requirements of this section are met, 
                but shall not restrict where renewables can be used, or 
                impose any per-gallon obligation for the use of 
                renewables. If the Administrator does not promulgate 
                such regulations, the applicable percentage, on a 
                volume percentage of gasoline basis, shall be 1.62 in 
                2004.
                    ``(B) Applicable volume.--
                            (i) Calendar years 2004 through 2012.--For 
                        the purpose of subparagraph (A), the applicable 
                        volume for any of calendar years 2004 through 
                        2012 shall be determined in accordance with the 
                        following table:

                  Applicable volume of renewable fuel

    ``Calendar year:                           (In billions of gallons)
                2004.......................................        2.3 
                2005.......................................        2.6 
                2006.......................................        2.9 
                2007.......................................        3.2 
                2008.......................................        3.5 
                2009.......................................        3.9 
                2010.......................................        4.3 
                2011.......................................        4.7 
                2012.......................................        5.0.
                            ``(ii) Calendar year 2013 and thereafter.--
                        For the purpose of subparagraph (A), the 
                        applicable volume for calendar year 2013 and 
                        each calendar year thereafter shall be equal to 
                        the product obtained by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) 5.0 billion gallons 
                                        of renewable fuels; bears to
                                            ``(bb) the number of 
                                        gallons of gasoline sold or 
                                        introduced into commerce in 
                                        calendar year 2012.
            ``(3) Applicable percentages.--Not later than October 31 of 
        each calendar year, through 2011, the Administrator of the 
        Energy Information Administration shall provide the 
        Administrator an estimate of the volumes of gasoline sales in 
        the United States for the coming calendar year. Based on such 
        estimates, the Administrator shall by November 30 of each 
        calendar year, through 2011, determine and publish in the 
        Federal Register, the renewable fuel obligation, on a volume 
        percentage of gasoline basis, applicable to refiners, blenders, 
        distributors and importers, as appropriate, for the coming 
        calendar year, to ensure that the requirements of paragraph (2) 
        are met. For each calendar year, the Administrator shall 
        establish a single applicable percentage that applies to all 
        parties, and make provision to avoid redundant obligations. In 
        determining the applicable percentages, the Administrator shall 
        make adjustments to account for the use of renewable fuels by 
        exempt small refineries during the previous year.
            ``(4) Cellulosic biomass ethanol.--For the purpose of 
        paragraph (2), 1 gallon of cellulosic biomass ethanol shall be 
        considered to be the equivalent of 1.5 gallon of renewable 
        fuel.
            ``(5) Credit program.--
                    ``(A) In general.--The regulations promulgated to 
                carry out this subsection shall provide for the 
                generation of an appropriate amount of credits by any 
                person that refines, blends, or imports gasoline that 
                contains a quantity of renewable fuel that is greater 
                than the quantity required under paragraph (2). Such 
                regulations shall provide for the generation of an 
                appropriate amount of credits for biodiesel fuel. If a 
                small refinery notifies the Administrator that it 
                waives the exemption provided by this Act, the 
                regulations shall provide for the generation of credits 
                by the small refinery beginning in the year following 
                such notification.
                    ``(B) Use of credits.--A person that generates 
                credits under subparagraph (A) may use the credits, or 
                transfer all or a portion of the credits to another 
                person, for the purpose of complying with paragraph 
                (2).
                    ``(C) Life of credits.--A credit generated under 
                this paragraph shall be valid to show compliance:
                            (i) in the calendar year in which the 
                        credit was generated or the next calendar year, 
                        or
                            (ii) in the calendar year in which the 
                        credit was generated or next two consecutive 
                        calendar years if the Administrator promulgates 
                        regulations under paragraph (6).
                    ``(D) Inability to purchase sufficient credits.--
                The regulations promulgated to carry out this 
                subsection shall include provisions allowing any person 
                that is unable to generate or purchase sufficient 
                credits to meet the requirements under paragraph (2) to 
                carry forward a renewables deficit provided that, in 
                the calendar year following the year in which the 
                renewables deficit is created, such person shall 
                achieve compliance with the renewables requirement 
                under paragraph (2), and shall generate or purchase 
                additional renewables credits to offset the renewables 
                deficit of the previous year.
            ``(6) Seasonal variations in renewable fuel use.--
                    ``(A) Study.--For each of calendar years 2004 
                through 2012, the Administrator of the Energy 
                Information Administration, shall conduct a study of 
                renewable fuels blending to determine whether there are 
                excessive seasonal variations in the use of renewable 
                fuels.
                    ``(B) Regulation of excessive seasonal 
                variations.--If, for any calendar year, the 
                Administrator of the Energy Information Administration, 
                based on the study under subparagraph (A), makes the 
                determinations specified in subparagraph (C), the 
                Administrator shall promulgate regulations to ensure 
                that 35 percent or more of the quantity of renewable 
                fuels necessary to meet the requirement of paragraph 
                (2) is used during each of the periods specified in 
                subparagraph (D) of each subsequent calendar year.
                    ``(C) Determinations.--The determinations referred 
                to in subparagraph (B) are that--
                            ``(i) less than 35 percent of the quantity 
                        of renewable fuels necessary to meet the 
                        requirement of paragraph (2) has been used 
                        during one of the periods specified in 
                        subparagraph (D) of the calendar year; and
                            ``(ii) a pattern of excessive seasonal 
                        variation described in clause (i) will continue 
                        in subsequent calendar years.
                    ``(D) Periods.--The two periods referred to in this 
                paragraph are--
                            ``(i) April through September; and
                            ``(ii) January through March and October 
                        through December.
                    ``(E) Exclusions.--Renewable fuels blended or 
                consumed in 2004 in a state which has received a waiver 
                under section 209(b) shall not be included in the study 
                in subparagraph (A).
            ``(7) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirement of 
                paragraph (2) in whole or in part on petition by one or 
                more States by reducing the national quantity of 
                renewable fuel required under this subsection--
                            ``(i) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that implementation of 
                        the requirement would severely harm the economy 
                        or environment of a State, a region, or the 
                        United States; or
                            ``(ii) based on a determination by the 
                        Administrator, after public notice and 
                        opportunity for comment, that there is an 
                        inadequate domestic supply or distribution 
                        capacity to meet the requirement.
                     ``(B) Petitions for waivers.--The Administrator, 
                in consultation with the Secretary of Agriculture and 
                the Secretary of Energy, shall approve or disapprove a 
                State petition for a waiver of the requirement of 
                paragraph (2) within 90 days after the date on which 
                the petition is received by the Administrator.
                    ``(C) Termination of waivers.--A waiver granted 
                under subparagraph (A) shall terminate after 1 year, 
                but may be renewed by the Administrator after 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy.
            ``(8) Study and waiver for initial year of program.--Not 
        later than 180 days from enactment, the Secretary of Energy 
        shall complete for the Administrator a study assessing whether 
        the renewable fuels requirement under paragraph (2) will likely 
        result in significant adverse consumer impacts in 2004, on a 
        national, regional or state basis. Such study shall evaluate 
        renewable fuel supplies and prices, blendstock supplies, and 
        supply and distribution system capabilities. Based on such 
        study, the Secretary shall make specific recommendations to the 
        Administrator regarding waiver of the requirements of paragraph 
        (2), in whole or in part, to avoid any such adverse impacts. 
        Within 270 days from enactment, the Administrator shall, 
        consistent with the recommendations of the Secretary waive, in 
        whole or in part, the renewable fuels requirement under 
        paragraph (2) by reducing the national quantity of renewable 
        fuel required under this subsection in 2004. This provision 
        shall not be interpreted as limiting the Administrator's 
        authority to waive the requirements of paragraph (2) in whole, 
        or in part, under paragraph (7), pertaining to waivers.
            ``(9) Small refineries.--
                    ``(A) In general.--The requirement of paragraph (2) 
                shall not apply to small refineries until January 1, 
                2008. Not later than December 31, 2006, the Secretary 
                of Energy shall complete for the Administrator a study 
                to determine whether the requirement of paragraph (2) 
                would impose a disproportionate economic hardship on 
                small refineries. For any small refinery that the 
                Secretary of Energy determines would experience a 
                disproportionate economic hardship, the Administrator 
                shall extend the small refinery exemption for such 
                small refinery for no less than two additional years.
                    ``(B) Economic hardship.--
                            ``(i) Extension of exemption.--A small 
                        refinery may at any time petition the 
                        Administrator for an extension of the exemption 
                        from the requirement of paragraph (2) for the 
                        reason of disproportionate economic hardship. 
                        In evaluating a hardship petition, the 
                        Administrator, in consultation with the 
                        Secretary of Energy, shall consider the 
                        findings of the study in addition to other 
                        economic factors.
                            ``(ii) Deadline for action on petitions.--
                        The Administrator shall act on any petition 
                        submitted by a small refinery for a hardship 
                        exemption not later than 90 days after the 
                        receipt of the petition.
                    ``(C) Credit program.--If a small refinery notifies 
                the Administrator that it waives the exemption provided 
                by this Act, the regulations shall provide for the 
                generation of credits by the small refinery beginning 
                in the year following such notification.
                    ``(D) Opt-in for small refiners.--A small refinery 
                shall be subject to the requirements of this section if 
                it notifies the Administrator that it waives the 
                exemption under subparagraph (A).
    (b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``or (n)'' 
                each place it appears and inserting ``(n) or (o)''; and
                    (B) in the second sentence, by striking ``or (m)'' 
                and inserting ``(m), or (o)''; and
            (2) in the first sentence of paragraph (2), by striking 
        ``and (n)'' each place it appears and inserting ``(n), and 
        (o)''.
    (c) Exclusion From Ethanol Waiver.--Section 211(h) of the Clean Air 
Act (42 U.S.C. 7545(h)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following:
        ``(5) Exclusion from ethanol waiver.--
                    ``(A) Promulgation of regulations.--Upon 
                notification, accompanied by supporting documentation, 
                from the Governor of a State that the Reid vapor 
                pressure limitation established by paragraph (4) will 
                increase emissions that contribute to air pollution in 
                any area in the State, the Administrator shall, by 
                regulation, apply, in lieu of the Reid vapor pressure 
                limitation established by paragraph (4), the Reid vapor 
                pressure limitation established by paragraph (1) to all 
                fuel blends containing gasoline and 10 percent 
                denatured anhydrous ethanol that are sold, offered for 
                sale, dispensed, supplied, offered for supply, 
                transported or introduced into commerce in the area 
                during the high ozone season.
                    ``(B) Deadline for promulgation.--The Administrator 
                shall promulgate regulations under subparagraph (A) not 
                later than 90 days after the date of receipt of a 
                notification from a Governor under that subparagraph.
                    ``(C) Effective date.--
                            ``(i) In general.--With respect to an area 
                        in a State for which the Governor submits a 
                        notification under subparagraph (A), the 
                        regulations under that subparagraph shall take 
                        effect on the later of--
                                    ``(I) the first day of the first 
                                high ozone season for the area that 
                                begins after the date of receipt of the 
                                notification; or
                                    ``(II) 1 year after the date of 
                                receipt of the notification.
                            ``(ii) Extension of effective date based on 
                        determination of insufficient supply.--
                                    ``(I) In general.--If, after 
                                receipt of a notification with respect 
                                to an area from a Governor of a State 
                                under subparagraph (A), the 
                                Administrator determines, on the 
                                Administrator's own motion or on 
                                petition of any person and after 
                                consultation with the Secretary of 
                                Energy, that the promulgation of 
                                regulations described in subparagraph 
                                (A) would result in an insufficient 
                                supply of gasoline in the State, the 
                                Administrator, by regulation--
                                            ``(aa) shall extend the 
                                        effective date of the 
                                        regulations under clause (i) 
                                        with respect to the area for 
                                        not more than 1 year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 
                                        two additional periods, each of 
                                        which shall not exceed 1 year.
                                    ``(II) Deadline for action on 
                                petitions.--The Administrator shall act 
                                on any petition submitted under 
                                subclause (I) not later than 180 days 
                                after the date of receipt of the 
                                petition.''.
    (d) Survey of Renewable Fuel Market.--
            (1) Survey and report.--Not later than December 1, 2005, 
        and annually thereafter, the Administrator shall--
                    (A) conduct, with respect to each conventional 
                gasoline use area and each reformulated gasoline use 
                area in each State, a survey to determine the market 
                shares of--
                            (i) conventional gasoline containing 
                        ethanol;
                            (ii) reformulated gasoline containing 
                        ethanol;
                            (iii) conventional gasoline containing 
                        renewable fuel; and
                            (iv) reformulated gasoline containing 
                        renewable fuel; and
                    (B) submit to Congress, and make publicly 
                available, a report on the results of the survey under 
                subparagraph (A).
            (2) Recordkeeping and reporting requirements.--The 
        Administrator may require any refiner, blender, or importer to 
        keep such records and make such reports as are necessary to 
        ensure that the survey conducted under paragraph (1) is 
        accurate. The Administrator shall rely, to the extent 
        practicable, on existing reporting and recordkeeping 
        requirements to avoid duplicative requirements.
            (3) Applicable law.--Activities carried out under this 
        subsection shall be conducted in a manner designed to protect 
        confidentiality of individual responses.
    (e) Renewable Fuels Safe Harbor.--
            (1) In general.--Notwithstanding any other provision of 
        federal or state law, no renewable fuel, as defined by this 
        Act, used or intended to be used as a motor vehicle fuel, nor 
        any motor vehicle fuel containing such renewable fuel, shall be 
        deemed defective in design or manufacture by virtue of the fact 
        that it is, or contains, such a renewable fuel, if it does not 
        violate a control or prohibition imposed by the Administrator 
        under section 211 of the Clean Air Act, as amended by this Act, 
        and the manufacturer is in compliance with all requests for 
        information under section 211(b) of the Clean Air Act, as 
        amended by this Act. In the event that the safe harbor under 
        this section does not apply, the existence of a design defect 
        or manufacturing defect shall be determined under otherwise 
        applicable law.
            (2) Exceptions.--This subsection shall not apply to ethers.
            (3) Effective date.--This subsection shall be effective as 
        of the date of enactment and shall apply with respect to all 
        claims filed on or after that date.

SEC. 820A. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL 
              PURCHASING REQUIREMENT.

    Title III of the Energy Policy Act of 1992 is amended by striking 
section 306 (42 U.S.C. 13215) and inserting the following:

``SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND BIODIESEL 
              PURCHASING REQUIREMENT.

    ``(a) Ethanol-Blended Gasoline.--The head of each Federal agency 
shall ensure that, in areas in which ethanol-blended gasoline is 
reasonably available at a generally competitive price, the Federal 
agency purchases ethanol-blended gasoline containing at least 10 
percent ethanol rather than nonethanol-blended gasoline, for use in 
vehicles used by the agency that use gasoline.
    ``(b) Biodiesel.--
            ``(1) Definition of biodiesel.--In this subsection, the 
        term `biodiesel' has the meaning given the term in section 
        312(f).
            ``(2) Requirement.--The head of each Federal agency shall 
        ensure that the Federal agency purchases, for use in fueling 
        fleet vehicles that use diesel fuel used by the Federal agency 
        at the location at which fleet vehicles of the Federal agency 
        are centrally fueled, in areas in which the biodiesel-blended 
        diesel fuel described in paragraphs (A) and (B) is available at 
        a generally competitive price--
                    ``(A) as of the date that is 5 years after the date 
                of enactment of this paragraph, biodiesel-blended 
                diesel fuel that contains at least 2 percent biodiesel, 
                rather than nonbiodiesel-blended diesel fuel; and
                    ``(B) as of the date that is 10 years after the 
                date of enactment of this paragraph, biodiesel-blended 
                diesel fuel that contains at least 20 percent 
                biodiesel, rather than nonbiodiesel-blended diesel 
                fuel.
            ``(3) Requirement of Federal Law.--The provisions of this 
        subsection shall not be considered a requirement of Federal law 
        for the purposes of section 312.
    ``(c) Exemption.--This section does not apply to fuel used in 
vehicles excluded from the definition of `fleet' by subparagraphs (A) 
through (H) of section 301(9).''.

SEC. 820B. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE LOAN 
              GUARANTEE PROGRAM.

    (a) Definition of Municipal Solid Waste.--In this section, the term 
``municipal solid waste'' has the meaning given the term ``solid 
waste'' in section 1004 of the Solid Waste Disposal Act (42 U.S.C. 
6903).
    (b) Establishment of Program.--The Secretary of Energy shall 
establish a program to provide guarantees of loans by private 
institutions for the construction of facilities for the processing and 
conversion of municipal solid waste into fuel ethanol and other 
commercial byproducts.
    (c) Requirements.--The Secretary may provide a loan guarantee under 
subsection (b) to an applicant if--
            (1) without a loan guarantee, credit is not available to 
        the applicant under reasonable terms or conditions sufficient 
        to finance the construction of a facility described in 
        subsection (b);
            (2) the prospective earning power of the applicant and the 
        character and value of the security pledged provide a 
        reasonable assurance of repayment of the loan to be guaranteed 
        in accordance with the terms of the loan; and
            (3) the loan bears interest at a rate determined by the 
        Secretary to be reasonable, taking into account the current 
        average yield on outstanding obligations of the United States 
        with remaining periods of maturity comparable to the maturity 
        of the loan.
    (d) Criteria.--In selecting recipients of loan guarantees from 
among applicants, the Secretary shall give preference to proposals 
that--
            (1) meet all applicable Federal and State permitting 
        requirements;
            (2) are most likely to be successful; and
            (3) are located in local markets that have the greatest 
        need for the facility because of--
                    (A) the limited availability of land for waste 
                disposal; or
                    (B) a high level of demand for fuel ethanol or 
                other commercial byproducts of the facility.
    (e) Maturity.--A loan guaranteed under subsection (b) shall have a 
maturity of not more than 20 years.
    (f) Terms and Conditions.--The loan agreement for a loan guaranteed 
under subsection (b) shall provide that no provision of the loan 
agreement may be amended or waived without the consent of the 
Secretary.
    (g) Assurance of Repayment.--The Secretary shall require that an 
applicant for a loan guarantee under subsection (b) provide an 
assurance of repayment in the form of a performance bond, insurance, 
collateral, or other means acceptable to the Secretary in an amount 
equal to not less than 20 percent of the amount of the loan.
    (h) Guarantee Fee.--The recipient of a loan guarantee under 
subsection (b) shall pay the Secretary an amount determined by the 
Secretary to be sufficient to cover the administrative costs of the 
Secretary relating to the loan guarantee.
    (i) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all guarantees made under this 
section. Any such guarantee made by the Secretary shall be conclusive 
evidence of the eligibility of the loan for the guarantee with respect 
to principal and interest. The validity of the guarantee shall be 
incontestable in the hands of a holder of the guaranteed loan.
    (j) Reports.--Until each guaranteed loan under this section has 
been repaid in full, the Secretary shall annually submit to Congress an 
report on the activities of the Secretary under this section.
    (k) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.
    (l) Termination of Authority.--The authority of the Secretary to 
issue a loan guarantee under subsection (b) terminates on the date that 
is 10 years after the date of enactment of this Act.

            Subtitle B--Additional Fuel Efficiency Measures

SEC. 821. FUEL EFFICIENCY OF THE FEDERAL FLEET OF AUTOMOBILES.

    Section 32917 of title 49, United States Code, is amended to read 
as follows:
``Sec. 32917. Standards for executive agency automobiles
    ``(a) Baseline Average Fuel Economy.--The head of each executive 
agency shall determine, for all automobiles in the agency's fleet of 
automobiles that were leased or bought as a new vehicle in fiscal year 
1999, the average fuel economy for such automobiles. For the purposes 
of this section, the average fuel economy so determined shall be the 
baseline average fuel economy for the agency's fleet of automobiles.
    ``(b) Increase of Average Fuel Economy.--The head of an executive 
agency shall manage the procurement of automobiles for that agency in 
such a manner that--
            ``(1) not later than September 30, 2003, the average fuel 
        economy of the new automobiles in the agency's fleet of 
        automobiles is not less than 1 mile per gallon higher than the 
        baseline average fuel economy determined under subsection (a) 
        for that fleet; and
            ``(2) not later than September 30, 2005, the average fuel 
        economy of the new automobiles in the agency's fleet of 
        automobiles is not less than 3 miles per gallon higher than the 
        baseline average fuel economy determined under subsection (a) 
        for that fleet.
    ``(c) Calculation of Average Fuel Economy.--Average fuel economy 
shall be calculated for the purposes of this section in accordance with 
guidance which the Secretary of Transportation shall prescribe for the 
implementation of this section.
    ``(d) Definitions.--In this section:
            ``(1) The term `automobile' does not include any vehicle 
        designed for combat-related missions, law enforcement work, or 
        emergency rescue work.
            ``(2) The term `executive agency' has the meaning given 
        that term in section 105 of title 5.
            ``(3) The term `new automobile', with respect to the fleet 
        of automobiles of an executive agency, means an automobile that 
        is leased for at least 60 consecutive days or bought, by or for 
        the agency, after September 30, 1999.''.

SEC. 822. IDLING REDUCTION SYSTEMS IN HEAVY DUTY VEHICLES.

    Title III of the Energy Policy and Conservation Act (42 U.S.C. 6291 
et seq.) is amended by adding at the end the following:

                    ``PART K--REDUCING TRUCK IDLING

``SEC. 400AAA. REDUCING TRUCK IDLING.

    ``(a) Study.--Not later than 18 months after the date of enactment 
of this section, the Secretary shall, in consultation with the 
Secretary of Transportation, commence a study to analyze the potential 
fuel savings resulting from long duration idling of main drive engines 
in heavy-duty vehicles.
    ``(b) Regulations.--Upon completion of the study under subsection 
(a), the Secretary may issue regulations requiring the installation of 
idling reduction systems on all newly manufactured heavy-duty vehicles.
    ``(c) Definitions.--As used in this section:
            ``(1) The term `heavy-duty vehicle' means a vehicle that 
        has a gross vehicle weight rating greater than 8,500 pounds and 
        is powered by a diesel engine.
            ``(2) The term `idling reduction system' means a device or 
        system of devices used to reduce long duration idling of a 
        diesel engine in a vehicle.
            ``(3) The term `long duration idling' means the operation 
        of a main drive engine of a heavy-duty vehicle for a period of 
        more than 15 consecutive minutes when the main drive engine is 
        not engaged in gear, except that such term does not include 
        idling as a result of traffic congestion or other impediments 
        to the movement of a heavy-duty vehicle.
            ``(4) The term `vehicle' has the meaning given such term in 
        section 4 of title 1, United States Code.''.

SEC. 823. CONSERVE BY BICYCLING PROGRAM.

    (a) Establishment.--The Secretary of Transportation shall establish 
a Conserve By Bicycling pilot program that shall provide for up to 10 
geographically dispersed projects to encourage the use of bicycles in 
place of motor vehicles.  Such projects shall use education and 
marketing to convert motor vehicle trips to bike trips, document 
project results and energy savings, and facilitate partnerships among 
entities in the fields of transportation, law enforcement, education, 
public health, environment, or energy. At least 20 percent of the cost 
of each project shall be provided from State or local sources. Not 
later than 2 years after implementation of the projects, the Secretary 
of Transportation shall submit a report to Congress on the results of 
the pilot program.
    (b) National Academy Study.--The Secretary of Transportation shall 
contract with the National Academy of Sciences to conduct a study on 
the feasibility and benefits of converting motor vehicle trips to 
bicycle trips and to issue a report, not later than 2 years after 
enactment of this Act, on the findings of such study.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of' Transportation $5,500,000, to remain 
available until expended, to carry out the pilot program and study 
pursuant to this section.

SEC. 824. FUEL CELL VEHICLE PROGRAM.

    Not later than 1 year from date of enactment of this section, the 
Secretary shall develop a program with timetables for developing 
technologies to enable at least 100,000 hydrogen-fueled fuel cell 
vehicles to be available for sale in the United States by 2010 and at 
least 2.5 million of such vehicles to be available by 2020 and annually 
thereafter. The program shall also include timetables for development 
of technologies to provide 50 million gasoline equivalent gallons of 
hydrogen for sale in fueling stations in the United States by 2010 and 
at least 2.5 billion gasoline equivalent gallons by 2020 and annually 
thereafter. The Secretary shall annually include a review of the 
progress toward meeting the vehicle sales of Energy budget.

                 Subtitle C--Federal Reformulated Fuels

SEC. 831. SHORT TITLE.

    This subtitle may be cited as the ``Federal Reformulated Fuels Act 
of 2002''.

SEC. 832. LEAKING UNDERGROUND STORAGE TANKS.

    (a) Use of Lust Funds for Remediation of Contamination From Ether 
Fuel Additives.--Section 9003(h) of the Solid Waste Disposal Act (42 
U.S.C. 6991b(h)) is amended--
            (1) in paragraph (7)(A)--
                    (A) by striking ``paragraphs (1) and (2) of this 
                subsection'' and inserting ``paragraphs (1), (2), and 
                (12)''; and
                    (B) by inserting ``and section 9010'' before 
                ``if''; and
            (2) by adding at the end the following:
            ``(12) Remediation of contamination from ether fuel 
        additives.--
                    ``(A) In general.--The Administrator and the States 
                may use funds made available under section 9013(1) to 
                carry out corrective actions with respect to a release 
                of methyl tertiary butyl ether or other ether fuel 
                additive that presents a threat to human health, 
                welfare, or the environment.
                    ``(B) Applicable authority.--Subparagraph (A) shall 
                be carried out--
                            ``(i) in accordance with paragraph (2), 
                        except that a release with respect to which a 
                        corrective action is carried out under 
                        subparagraph (A) shall not be required to be 
                        from an underground storage tank; and
                            ``(ii) in the case of a State, in 
                        accordance with a cooperative agreement entered 
                        into by the Administrator and the State under 
                        paragraph (7).''.
    (b) Release Prevention and Compliance.--Subtitle I of the Solid 
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by striking 
section 9010 and inserting the following:

``SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.

    ``Funds made available under section 9013(2) from the Leaking 
Underground Storage Tank Trust Fund may be used for conducting 
inspections, or for issuing orders or bringing actions under this 
subtitle--
            ``(1) by a State (pursuant to section 9003(h)(7)) acting 
        under--
                    ``(A) a program approved under section 9004; or
                    ``(B) State requirements regulating underground 
                storage tanks that are similar or identical to this 
                subtitle, as determined by the Administrator; and
            ``(2) by the Administrator, acting under this subtitle or a 
        State program approved under section 9004.

``SEC. 9011. BEDROCK BIOREMEDIATION.

    ``The Administrator shall establish, at an institution of higher 
education (as defined in section 101 of the Higher Education Act of 
1965 (20 U.S.C. 1001)) with established expertise in bioremediation of 
contaminated bedrock aquifers, a resource center--
            ``(1) to conduct research concerning bioremediation of 
        methyl tertiary butyl ether in contaminated underground 
        aquifers, including contaminated bedrock; and
            ``(2) to provide for States a technical assistance 
        clearinghouse for information concerning innovative 
        technologies for bioremediation described in paragraph (1).

``SEC. 9012. SOIL REMEDIATION.

    ``The Administrator may establish a program to conduct research 
concerning remediation of methyl tertiary butyl ether contamination of 
soil, including granitic or volcanic soil.

``SEC. 9013. AUTHORIZATION OF APPROPRIATIONS.

    ``In addition to amounts made available under section 2007(f), 
there are authorized to be appropriated from the Leaking Underground 
Storage Tank Trust Fund, notwithstanding section 9508(c)(1) of the 
Internal Revenue Code of 1986--
            ``(1) to carry out section 9003(h)(12), $200,000,000 for 
        fiscal year 2003, to remain available until expended;
            ``(2) to carry out section 9010--
                    ``(A) $50,000,000 for fiscal year 2003; and
                    ``(B) $30,000,000 for each of fiscal years 2004 
                through 2008;
            ``(3) to carry out section 9011--
                    ``(A) $500,000 for fiscal year 2003; and
                    ``(B) $300,000 for each of fiscal years 2004 
                through 2008; and
            ``(4) to carry out section 9012--
                    ``(A) $100,000 for fiscal year 2003; and
                    ``(B) $50,000 for each of fiscal years 2004 through 
                2008.
    (c) Technical Amendments.--(1) Section 1001 of the Solid Waste 
Disposal Act (42 U.S.C. prec. 6901) is amended by striking the item 
relating to section 9010 and inserting the following:

``Sec. 9010. Release prevention and compliance.
``Sec. 9011. Bedrock bioremediation.
``Sec. 9012. Soil remediation.
``Sec. 9013. Authorization of appropriations.''.
    (2) Section 9001(3)(A) of the Solid Waste Disposal Act (42 U.S.C. 
6991(3)(A)) is amended by striking ``sustances'' and inserting 
``substances''.
    (3) Section 9003(f)(1) of the Solid Waste Disposal Act (42 U.S.C. 
6991b(f)(1)) is amended by striking ``subsection (c) and (d) of this 
section'' and inserting ``subsections (c) and (d)''.
    (4) Section 9004(a) of the Solid Waste Disposal Act (42 U.S.C. 
6991c(a)) is amended in the second sentence by striking ``referred to'' 
and all that follows and inserting ``referred to in subparagraph (A) or 
(B), or both, of section 9001(2).''.
    (5) Section 9005 of the Solid Waste Disposal Act (42 U.S.C. 6991d) 
is amended--
            (A) in subsection (a), by striking ``study taking'' and 
        inserting ``study, taking'';
            (B) in subsection (b)(1), by striking ``relevent'' and 
        inserting ``relevant''; and
            (C) in subsection (b)(4), by striking ``Evironmental'' and 
        inserting ``Environmental''.

SEC. 833. AUTHORITY FOR WATER QUALITY PROTECTION FROM FUELS.

    (a) Findings.--Congress finds that--
            (1) since 1979, methyl tertiary butyl ether (referred to in 
        this section as ``MTBE'') has been used nationwide at low 
        levels in gasoline to replace lead as an octane booster or 
        anti-knocking agent;
            (2) Public Law 101-549 (commonly known as the ``Clean Air 
        Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established 
        a fuel oxygenate standard under which reformulated gasoline 
        must contain at least 2 percent oxygen by weight;
            (3) at the time of the adoption of the fuel oxygen 
        standard, Congress was aware that significant use of MTBE could 
        result from the adoption of that standard, and that the use of 
        MTBE would likely be important to the cost-effective 
        implementation of that program;
            (4) Congress is aware that gasoline and its component 
        additives have leaked from storage tanks, with consequences for 
        water quality;
            (5) the fuel industry responded to the fuel oxygenate 
        standard established by Public Law 101-549 by making 
        substantial investments in--
                    (A) MTBE production capacity; and
                    (B) systems to deliver MTBE-containing gasoline to 
                the marketplace;
            (6) when leaked or spilled into the environment, MTBE may 
        cause serious problems of drinking water quality;
            (7) in recent years, MTBE has been detected in water 
        sources throughout the United States;
            (8) MTBE can be detected by smell and taste at low 
        concentrations;
            (9) while small quantities of MTBE can render water 
        supplies unpalatable, the precise human health effects of MTBE 
        consumption at low levels are yet unknown;
            (10) in the report entitled ``Achieving Clean Air and Clean 
        Water: The Report of the Blue Ribbon Panel on Oxygenates in 
        Gasoline'' and dated September 1999, Congress was urged--
                    (A) to eliminate the fuel oxygenate standard;
                    (B) to greatly reduce use of MTBE; and
                    (C) to maintain the environmental performance of 
                reformulated gasoline;
            (11) Congress has--
                    (A) reconsidered the relative value of MTBE in 
                gasoline; and
                    (B) decided to eliminate use of MTBE as a fuel 
                additive;
            (12) the timeline for elimination of use of MTBE as a fuel 
        additive must be established in a manner that achieves an 
        appropriate balance among the goals of--
                    (A) environmental protection;
                    (B) adequate energy supply; and
                    (C) reasonable fuel prices; and
            (13) it is appropriate for Congress to provide some limited 
        transition assistance--
                    (A) to merchant producers of MTBE who produced MTBE 
                in response to a market created by the oxygenate 
                requirement contained in the Clean Air Act; and
                    (B) for the purpose of mitigating any fuel supply 
                problems that may result from elimination of a widely-
                used fuel additive.
    (b) Purposes.--The purposes of this section are--
            (1) to eliminate use of MTBE as a fuel oxygenate; and
            (2) to provide assistance to merchant producers of MTBE in 
        making the transition from producing MTBE to producing other 
        fuel additives.
    (c) Authority for Water Quality Protection From Fuels.--Section 
211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is amended--
            (1) in paragraph (1)(A)--
                    (A) by inserting ``fuel or fuel additive or'' after 
                ``Administrator any''; and
                    (B) by striking ``air pollution which'' and 
                inserting ``air pollution, or water pollution, that'';
            (2) in paragraph (4)(B), by inserting ``or water quality 
        protection,'' after ``emission control,''; and
            (3) by adding at the end the following:
            ``(5) Prohibition on use of mtbe.--
                    ``(A) In general.--Subject to subparagraph (E), not 
                later than 4 years after the date of enactment of this 
                paragraph, the use of methyl tertiary butyl ether in 
                motor vehicle fuel in any State other than a State 
                described in subparagraph (C) is prohibited.
                    ``(B) Regulations.--The Administrator shall 
                promulgate regulations to effect the prohibition in 
                subparagraph (A).
                    ``(C) States that authorize use.--A State described 
                in this subparagraph is a State that submits to the 
                Administrator a notice that the State authorizes use of 
                methyl tertiary butyl ether in motor vehicle fuel sold 
                or used in the State.
                    ``(D) Publication of notice.--The Administrator 
                shall publish in the Federal Register each notice 
                submitted by a State under subparagraph (C).
                    ``(E) Trace quantities.--In carrying out 
                subparagraph (A), the Administrator may allow trace 
                quantities of methyl tertiary butyl ether, not to 
                exceed 0.5 percent by volume, to be present in motor 
                vehicle fuel in cases that the Administrator determines 
                to be appropriate.
            ``(6) MTBE merchant producer conversion assistance.--
                    ``(A) In general.--
                            ``(i) Grants.--The Secretary of Energy, in 
                        consultation with the Administrator, may make 
                        grants to merchant producers of methyl tertiary 
                        butyl ether in the United States to assist the 
                        producers in the conversion of eligible 
                        production facilities described in subparagraph 
                        (C) to the production of iso-octane and 
                        alkylates.
                            ``(ii) Determination.--The Administrator, 
                        in consultation with the Secretary of Energy, 
                        may determine that transition assistance for 
                        the production of iso-octane and alkylates is 
                        inconsistent with the provisions of 
                        subparagraph (B) and, on that basis, may deny 
                        applications for grants authorized by this 
                        provision.
                    ``(B) Further grants.--The Secretary of Energy, in 
                consultation with the Administrator, may also further 
                make grants to merchant producers of MTBE in the United 
                States to assist the producers in the conversion of 
                eligible production facilities described in 
                subparagraph (C) to the production of such other fuel 
                additives that, consistent with 211(c)--
                            ``(i) unless the Administrator determines 
                        that such fuel additives may reasonably be 
                        anticipated to endanger public health or the 
                        environment;
                            ``(ii) have been registered and have been 
                        tested or are being tested in accordance with 
                        the requirements of this section; and
                            ``(iii) will contribute to replacing 
                        gasoline volumes lost as a result of paragraph 
                        (5).
                    ``(C) Eligible production facilities.--A production 
                facility shall be eligible to receive a grant under 
                this paragraph if the production facility--
                            ``(i) is located in the United States; and
                            ``(ii) produced methyl tertiary butyl ether 
                        for consumption in nonattainment areas during 
                        the period--
                                    ``(I) beginning on the date of 
                                enactment of this paragraph; and
                                    ``(II) ending on the effective date 
                                of the prohibition on the use of methyl 
                                tertiary butyl ether under paragraph 
                                (5).
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $250,000,000 for each of fiscal years 2003 
                through 2005.''.
    (d) No Effect on Law Concerning State Authority.--The amendments 
made by subsection (c) have no effect on the law in effect on the day 
before the date of enactment of this Act regarding the authority of 
States to limit the use of methyl tertiary butyl ether in motor vehicle 
fuel.

SEC. 834. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED 
              GASOLINE.

    (a) Elimination.--
            (1) In general.--Section 211(k) of the Clean Air Act (42 
        U.S.C. 7545(k)) is amended--
                    (A) in paragraph (2)--
                            (i) in the second sentence of subparagraph 
                        (A), by striking ``(including the oxygen 
                        content requirement contained in subparagraph 
                        (B))'';
                            (ii) by striking subparagraph (B); and
                            (iii) by redesignating subparagraphs (C) 
                        and (D) as subparagraphs (B) and (C), 
                        respectively;
                    (B) in paragraph (3)(A), by striking clause (v);
                    (C) in paragraph (7)--
                            (i) in subparagraph (A)--
                                    (I) by striking clause (i); and
                                    (II) by redesignating clauses (ii) 
                                and (iii) as clauses (i) and (ii), 
                                respectively; and
                            (ii) in subparagraph (C)--
                                    (I) by striking clause (ii); and
                                    (II) by redesignating clause (iii) 
                                as clause (ii); and
            (2) Effective date.--The amendments made by paragraph (1) 
        take effect 270 days after the date of enactment of this Act, 
        except that such amendments shall take effect upon enactment in 
        any State that has received a waiver under section 209(b) of 
        the Clean Air Act.
    (b) Maintenance of Toxic Air Pollutant Emission Reductions.--
Section 211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is 
amended--
            (1) by striking ``Within 1 year after the enactment of the 
        Clean Air Act Amendments of 1990,'' and inserting the 
        following:
                    ``(A) In general.--Not later than November 15, 
                1991,''; and
            (2) by adding at the end the following:
                    ``(B) Maintenance of toxic air pollutant emissions 
                reductions from reformulated gasoline.--
                            ``(i) Definitions.--In this subparagraph 
                        the term `PADD' means a Petroleum 
                        Administration for Defense District.
                            ``(ii) Regulations regarding emissions of 
                        toxic air pollutants.--Not later than 270 days 
                        after the date of enactment of this 
                        subparagraph, the Administrator shall 
                        establish, for each refinery or importer (other 
                        than a refinery or importer in a State that has 
                        received a waiver under section 209(b) with 
                        regard to gasoline produced for use in that 
                        state), standards for toxic air pollutants from 
                        use of the reformulated gasoline produced or 
                        distributed by the refinery or importer that 
                        maintain the reduction of the average annual 
                        aggregate emissions of toxic air pollutants for 
                        reformulated gasoline produced or distributed 
                        by the refinery or importer during calendar 
                        years 1999 and 2000, determined on the basis of 
                        data collected by the Administrator with 
                        respect to the refinery or importer.
                            (iii) Standards applicable to specific 
                        refineries or importers.--
                                    ``(I) Applicability of standards.--
                                For any calendar year, the standards 
                                applicable to a refinery or importer 
                                under clause (ii) shall apply to the 
                                quantity of gasoline produced or 
                                distributed by the refinery or importer 
                                in the calendar year only to the extent 
                                that the quantity is less than or equal 
                                to the average annual quantity of 
                                reformulated gasoline produced or 
                                distributed by the refinery or importer 
                                during calendar years 1999 and 2000.
                                    ``(II) Applicability of other 
                                standards.--For any calendar year, the 
                                quantity of gasoline produced or 
                                distributed by a refinery or importer 
                                that is in excess of the quantity 
                                subject to subclause (I) shall be 
                                subject to standards for toxic air 
                                pollutants promulgated under 
                                subparagraph (A) and paragraph (3)(B).
                            ``(iv) Credit program.--The Administrator 
                        shall provide for the granting and use of 
                        credits for emissions of toxic air pollutants 
                        in the same manner as provided in paragraph 
                        (7).
                            ``(v) Regional protection of toxics 
                        reduction baselines.--
                                    ``(I) In general.--Not later than 
                                60 days after the date of enactment of 
                                this subparagraph, and not later than 
                                April 1 of each calendar year that 
                                begins after that date of enactment, 
                                the Administrator shall publish in the 
                                Federal Register a report that 
                                specifies, with respect to the previous 
                                calendar year--
                                            ``(aa) the quantity of 
                                        reformulated gasoline produced 
                                        that is in excess of the 
                                        average annual quantity of 
                                        reformulated gasoline produced 
                                        in 1999 and 2000; and
                                            ``(bb) the reduction of the 
                                        average annual aggregate 
                                        emissions of toxic air 
                                        pollutants in each PADD, based 
                                        on retail survey data or data 
                                        from other appropriate sources.
                                    ``(II) Effect of failure to 
                                maintain aggregate toxics reductions.--
                                If, in any calendar year, the reduction 
                                of the average annual aggregate 
                                emissions of toxic air pollutants in a 
                                PADD fails to meet or exceed the 
                                reduction of the average annual 
                                aggregate emissions of toxic air 
                                pollutants in the PADD in calendar 
                                years 1999 and 2000, the Administrator, 
                                not later than 90 days after the date 
                                of publication of the report for the 
                                calendar year under subclause (I), 
                                shall--
                                            ``(aa) identify, to the 
                                        maximum extent practicable, the 
                                        reasons for the failure, 
                                        including the sources, volumes, 
                                        and characteristics of 
                                        reformulated gasoline that 
                                        contributed to the failure; and
                                            ``(bb) promulgate revisions 
                                        to the regulations promulgated 
                                        under clause (ii), to take 
                                        effect not earlier than 180 
                                        days but not later than 270 
                                        days after the date of 
                                        promulgation, to provide that, 
                                        notwithstanding clause 
                                        (iii)(II), all reformulated 
                                        gasoline produced or 
                                        distributed at each refinery or 
                                        importer shall meet the 
                                        standards applicable under 
                                        clause (iii) not later than 
                                        April 1 of the year following 
                                        the report in subclause (II) 
                                        and for subsequent years.
                            ``(vi) Regulations to control hazardous air 
                        pollutants from motor vehicles and motor 
                        vehicle fuels.--Not later than July 1, 2004, 
                        the Administrator shall promulgate final 
                        regulations to control hazardous air pollutants 
                        from motor vehicles and motor vehicle fuels, as 
                        provided for in section 80.1045 of title 40, 
                        Code of Federal Regulations (as in effect on 
                        the date of enactment of this subparagraph).''.
    (c) Consolidation in Reformulated Gasoline Regulations.--Not later 
than 180 days after the date of enactment of this Act, the 
Administrator shall revise the reformulated gasoline regulations under 
subpart D of part 80 of title 40, Code of Federal Regulations, to 
consolidate the regulations applicable to VOC-Control Regions 1 and 2 
under section 80.41 of that title by eliminating the less stringent 
requirements applicable to gasoline designated for VOC-Control Region 2 
and instead applying the more stringent requirements applicable to 
gasoline designated for VOC-Control Region 1.
    (d) Savings Clause.--Nothing in this section is intended to affect 
or prejudice any legal claims or actions with respect to regulations 
promulgated by the Administrator prior to enactment of this Act 
regarding emissions of toxic air pollutants from motor vehicles.
    (e) Determination Regarding a State Petition.--Section 211(k) of 
the Clean Air Act (42 U.S.C. 7545(k)) is amended by inserting after 
paragraph (10) the following:
            ``(11) Determination regarding a state petition.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, not less than 30 days after 
                enactment of this paragraph the Administrator must 
                determine the adequacy of any petition received from a 
                Governor of a State to exempt gasoline sold in that 
                State from the requirements of paragraph (2)(B).
                    ``(B) Approval.--If the determination in (A) is not 
                made within thirty days of enactment of this paragraph, 
                the petition shall be deemed approved.''.

SEC. 835. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL 
              ADDITIVES.

    Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is 
amended--
            (1) in paragraph (2)--
                    (A) by striking ``may also'' and inserting ``shall, 
                on a regular basis,''; and
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) to conduct tests to determine potential 
                public health and environmental effects of the fuel or 
                additive (including carcinogenic, teratogenic, or 
                mutagenic effects); and''; and
            (2) by adding at the end the following:
            ``(4) Study on certain fuel additives and blendstocks.--
                    ``(A) In general.--Not later than 2 years after the 
                date of enactment of this paragraph, the Administrator 
                shall--
                            ``(i) conduct a study on the effects on 
                        public health, air quality, and water resources 
                        of increased use of, and the feasibility of 
                        using as substitutes for methyl tertiary butyl 
                        ether in gasoline--
                                    ``(I) ethyl tertiary butyl ether;
                                    ``(II) tertiary amyl methyl ether;
                                    ``(III) di-isopropyl ether;
                                    ``(IV) tertiary butyl alcohol;
                                    ``(V) other ethers and heavy 
                                alcohols, as determined by then 
                                Administrator;
                                    ``(VI) ethanol;
                                    ``(VII) iso-octane; and
                                    ``(VIII) alkylates; and
                            ``(ii) conduct a study on the effects on 
                        public health, air quality, and water resources 
                        of the adjustment for ethanol-blended 
                        reformulated gasoline to the VOC performance 
                        requirements otherwise applicable under 
                        sections 211(k)(1) and 211(k)(3) of the Clean 
                        Air Act.
                            ``(iii) submit to the Committee on 
                        Environment and Public Works of the Senate and 
                        the Committee on Energy and Commerce of the 
                        House of Representatives a report describing 
                        the results of these studies.
                    ``(B) Contracts for study.--In carrying out this 
                paragraph, the Administrator may enter into one or more 
                contracts with nongovernmental entities including but 
                not limited to National Energy Laboratories and 
                institutions of higher education (as defined in section 
                101 of the Higher Education Act of 1965 (20 U.S.C. 
                1001)).''.

SEC. 836. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

    Section 211 of the Clean Air Act (42 U.S.C. 7545) (as amended by 
section 820(a)) is amended by inserting after subsection (o) the 
following:
    ``(p) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
            ``(1) Anti-backsliding analysis.--
                    ``(A) Draft analysis.--Not later than 4 years after 
                the date of enactment of this paragraph, the 
                Administrator shall publish for public comment a draft 
                analysis of the changes in emissions of air pollutants 
                and air quality due to the use of motor vehicle fuel 
                and fuel additives resulting from implementation of the 
                amendments made by the Federal Reformulated Fuels Act 
                of 2002.
                    ``(B) Final analysis.--After providing a reasonable 
                opportunity for comment but not later than 5 years 
                after the date of enactment of this paragraph, the 
                Administrator shall publish the analysis in final form.
            ``(2) Emissions model.--For the purposes of this 
        subsection, as soon as the necessary data are available, the 
        Administrator shall develop and finalize an emissions model 
        that reasonably reflects the effects of gasoline 
        characteristics or components on emissions from vehicles in the 
        motor vehicle fleet during calendar year 2005.''.

SEC. 837. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.

    Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is 
amended--
            (1) by striking ``(6) Opt-in areas.--(A) Upon'' and 
        inserting the following:
            ``(6) Opt-in areas.--
                    ``(A) Classified areas.--
                            ``(i) In general.--Upon'';
            (2) in subparagraph (B), by striking ``(B) If'' and 
        inserting the following:
                            ``(ii) Effect of insufficient domestic 
                        capacity to produce reformulated gasoline.--
                        If'';
            (3) in subparagraph (A)(ii) (as redesignated by paragraph 
        (2))--
                    (A) in the first sentence, by striking 
                ``subparagraph (A)'' and inserting ``clause (i)''; and
                    (B) in the second sentence, by striking ``this 
                paragraph'' and inserting ``this subparagraph''; and
            (4) by adding at the end the following:
                    ``(B) Ozone transport region.--
                            ``(i) Application of prohibition.--
                                    ``(I) In general.--In addition to 
                                the provisions of subparagraph (A), 
                                upon the application of the Governor of 
                                a State in the ozone transport region 
                                established by section 184(a), the 
                                Administrator, not later than 180 days 
                                after the date of receipt of the 
                                application, shall apply the 
                                prohibition specified in paragraph (5) 
                                to any area in the State (other than an 
                                area classified as a marginal, 
                                moderate, serious, or severe ozone 
                                nonattainment area under subpart 2 of 
                                part D of title I) unless the 
                                Administrator determines under clause 
                                (iii) that there is insufficient 
                                capacity to supply reformulated 
                                gasoline.
                                    ``(II) Publication of 
                                application.--As soon as practicable 
                                after the date of receipt of an 
                                application under subclause (I), the 
                                Administrator shall publish the 
                                application in the Federal Register.
                            ``(ii) Period of applicability.--Under 
                        clause (i), the prohibition specified in 
                        paragraph (5) shall apply in a State--
                                    ``(I) commencing as soon as 
                                practicable but not later than 2 years 
                                after the date of approval by the 
                                Administrator of the application of the 
                                Governor of the State; and
                                    ``(II) ending not earlier than 4 
                                years after the commencement date 
                                determined under subclause (I).
                            ``(iii) Extension of commencement date 
                        based on insufficient capacity.--
                                    ``(I) In general.--If, after 
                                receipt of an application from a 
                                Governor of a State under clause (i), 
                                the Administrator determines, on the 
                                Administrator's own motion or on 
                                petition of any person, after 
                                consultation with the Secretary of 
                                Energy, that there is insufficient 
                                capacity to supply reformulated 
                                gasoline, the Administrator, by 
                                regulation--
                                            ``(aa) shall extend the 
                                        commencement date with respect 
                                        to the State under clause 
                                        (ii)(I) for not more than 1 
                                        year; and
                                            ``(bb) may renew the 
                                        extension under item (aa) for 
                                        two additional periods, each of 
                                        which shall not exceed 1 year.
                                    ``(II) Deadline for action on 
                                petitions.--The Administrator shall act 
                                on any petition submitted under 
                                subclause (I) not later than 180 days 
                                after the date of receipt of the 
                                petition.''.

SEC. 838. FEDERAL ENFORCEMENT OF STATE FUELS REQUIREMENTS.

    Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C)) 
is amended--
            (1) by striking ``(C) A State'' and inserting the 
        following:
                    ``(C) Authority of state to control fuels and fuel 
                additives for reasons of necessity.--
                            ``(i) In general.--A State''; and
            (2) by adding at the end the following:
                            ``(ii) Enforcement by the administrator.--
                        In any case in which a State prescribes and 
                        enforces a control or prohibition under clause 
                        (i), the Administrator, at the request of the 
                        State, shall enforce the control or prohibition 
                        as if the control or prohibition had been 
                        adopted under the other provisions of this 
                        section.''.

SEC. 839. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

    (a) Study.--
            (1) In general.--The Administrator of the Environmental 
        Protection Agency and the Secretary of Energy shall jointly 
        conduct a study of Federal, State, and local requirements 
        concerning motor vehicle fuels, including--
                    (A) requirements relating to reformulated gasoline, 
                volatility (measured in Reid vapor pressure), 
                oxygenated fuel, and diesel fuel; and
                    (B) other requirements that vary from State to 
                State, region to region, or locality to locality.
            (2) Required elements.--The study shall assess--
                    (A) the effect of the variety of requirements 
                described in paragraph (1) on the supply, quality, and 
                price of motor vehicle fuels available to the consumer;
                    (B) the effect of the requirements described in 
                paragraph (1) on achievement of--
                            (i) national, regional, and local air 
                        quality standards and goals; and
                            (ii) related environmental and public 
                        health protection standards and goals;
                    (C) the effect of Federal, State, and local motor 
                vehicle fuel regulations, including multiple motor 
                vehicle fuel requirements, on--
                            (i) domestic refineries;
                            (ii) the fuel distribution system; and
                            (iii) industry investment in new capacity;
                    (D) the effect of the requirements described in 
                paragraph (1) on emissions from vehicles, refineries, 
                and fuel handling facilities;
                    (E) the feasibility of developing national or 
                regional motor vehicle fuel slates for the 48 
                contiguous States that, while protecting and improving 
                air quality at the national, regional, and local 
                levels, could--
                            (i) enhance flexibility in the fuel 
                        distribution infrastructure and improve fuel 
                        fungibility;
                            (ii) reduce price volatility and costs to 
                        consumers and producers;
                            (iii) provide increased liquidity to the 
                        gasoline market; and
                            (iv) enhance fuel quality, consistency, and 
                        supply; and
                    (F) the feasibility of providing incentives, and 
                the need for the development of national standards 
                necessary, to promote cleaner burning motor vehicle 
                fuel.
    (b) Report.--
            (1) In general.--Not later than June 1, 2006, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall submit to Congress a report on the 
        results of the study conducted under subsection (a).
            (2) Recommendations.--
                    (A) In general.--The report shall contain 
                recommendations for legislative and administrative 
                actions that may be taken--
                            (i) to improve air quality;
                            (ii) to reduce costs to consumers and 
                        producers; and
                            (iii) to increase supply liquidity.
                    (B) Required considerations.--The recommendations 
                under subparagraph (A) shall take into account the need 
                to provide advance notice of required modifications to 
                refinery and fuel distribution systems in order to 
                ensure an adequate supply of motor vehicle fuel in all 
                States.
            (3) Consultation.--In developing the report, the 
        Administrator of the Environmental Protection Agency and the 
        Secretary of Energy shall consult with--
                    (A) the Governors of the States;
                    (B) automobile manufacturers;
                    (C) motor vehicle fuel producers and distributors; 
                and
                    (D) the public.

SEC. 840. REVIEW OF FEDERAL PROCUREMENT INITIATIVES RELATING TO USE OF 
              RECYCLED PRODUCTS AND FLEET AND TRANSPORTATION 
              EFFICIENCY.

    Not later than 180 days after the date of enactment of this Act, 
the Administrator of General Services shall submit to Congress a report 
that details efforts by each Federal agency to implement the 
procurement policies specified in Executive Order No. 13101 (63 Fed. 
Reg. 49643; relating to governmental use of recycled products) and 
Executive Order No. 13149 (65 Fed. Reg. 24607; relating to Federal 
fleet and transportation efficiency).

   TITLE IX--ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME CONSUMERS

      Subtitle A--Low Income Assistance and State Energy Programs

SEC. 901. INCREASED FUNDING FOR LIHEAP, WEATHERIZATION ASSISTANCE, AND 
              STATE ENERGY GRANTS.

    (a) LIHEAP.--(1) Section 2602(b) of the Low-Income Home Energy 
Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended by striking the 
first sentence and inserting the following: ``There are authorized to 
be appropriated to carry out the provisions of this title (other than 
section 2607A), $3,400,000,000 for each of fiscal years 2003 through 
2005.''.
    (2) Section 2602(e) of the Low-Income Home Energy Assistance Act of 
1981 (42 U.S.C. 8621(e)) is amended by striking ``$600,000,000'' and 
inserting ``$1,000,000,000''.
    (3) Section 2609A(a) of the Low-Income Energy Assistance Act of 
1981 (42 U.S.C. 8628a(a)) is amended by striking ``not more than 
$300,000'' and inserting: ``not more than $750,000''.
    (b) Weatherization Assistance.--Section 422 of the Energy 
Conservation and Production Act (42 U.S.C. 6872) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary.'' 
and inserting: ``$325,000,000 for fiscal year 2003, $400,000,000 for 
fiscal year 2004, and $500,000,000 for fiscal year 2005.''.

SEC. 902. STATE ENERGY PROGRAMS.

    (a) State Energy Conservation Plans.--Section 362 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322)) is amended by adding at 
the end the following:
    ``(g) The Secretary shall, at least once every 3 years, invite the 
Governor of each State to review and, if necessary, revise the energy 
conservation plan of the State submitted under subsection (b) or (e). 
Such reviews should consider the energy conservation plans of other 
States within the region, and identify opportunities and actions that 
may be carried out in pursuit of common energy conservation goals.''.
    (b) State Energy Conservation Goals.--Section 364 of the Energy 
Policy and Conservation Act (42 U.S.C. 6324) is amended to read as 
follows:
    ``Sec. 364. Each State energy conservation plan with respect to 
which assistance is made available under this part on or after the date 
of enactment of the Energy Policy Act of 2002 shall contain a goal, 
consisting of an improvement of 25 percent or more in the efficiency of 
use of energy in the State concerned in calendar year 2010 as compared 
to calendar year 1990, and may contain interim goals.''.
    (c) State Energy Conservation Grants.--Section 365(f) of the Energy 
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking 
``for fiscal years 1999 through 2003 such sums as may be necessary.'' 
and inserting: ``$100,000,000 for each of fiscal years 2003 and 2004; 
$125,000,000 for fiscal year 2005; and such sums as may be necessary 
for each fiscal year thereafter.''.

SEC. 903. ENERGY EFFICIENT SCHOOLS.

    (a) Establishment.--There is established in the Department of 
Energy the High Performance Schools Program (in this section referred 
to as the ``Program'').
    (b) Grants.--The Secretary of Energy may make grants to a State 
energy office--
            (1) to assist school districts in the State to improve the 
        energy efficiency of school buildings;
            (2) to administer the Program; and
            (3) to promote participation in the Program.
    (c) Grants To Assist School Districts.--The Secretary shall 
condition grants under subsection (b)(1) on the State energy office 
using the grants to assist school districts that have demonstrated--
            (1) a need for the grants to build additional school 
        buildings to meet increasing elementary or secondary 
        enrollments or to renovate existing school buildings; and
            (2) a commitment to use the grant funds to develop high 
        performance school buildings in accordance with a plan that the 
        State energy office, in consultation with the State educational 
        agency, has determined is feasible and appropriate to achieve 
        the purposes for which the grant is made.
    (d) Grants for Administration.--Grants under subsection (b)(2) 
shall be used to--
            (1) evaluate compliance by school districts with 
        requirements of this section;
            (2) distribute information and materials to clearly define 
        and promote the development of high performance school 
        buildings for both new and existing facilities;
            (3) organize and conduct programs for school board members, 
        school personnel, architects, engineers, and others to advance 
        the concepts of high performance school buildings;
            (4) obtain technical services and assistance in planning 
        and designing high performance school buildings; or
            (5) collect and monitor data and information pertaining to 
        the high performance school building projects.
    (e) Grants To Promote Participation.--Grants under subsection 
(b)(3) shall be used for promotional and marketing activities, 
including facilitating private and public financing, promoting the use 
of energy savings performance contracts, working with school 
administrations, students, and communities, and coordinating public 
benefit programs.
    (f) Supplementing Grant Funds.--The State energy office shall 
encourage qualifying school districts to supplement funds awarded 
pursuant to this section with funds from other sources in the 
implementation of their plans.
    (g) Allocations.--Except as provided in subsection (h), funds 
appropriated to carry out this section shall be allocated as follows:
            (1) 70 percent shall be used to make grants under 
        subsection (b)(1).
            (2) 15 percent shall be used to make grants under 
        subsection (b)(2).
            (3) 15 percent shall be used to make grants under 
        subsection (b)(3).
    (h) Other Funds.--The Secretary of Energy may retain an amount, not 
to exceed $300,000 per year, to assist State energy offices in 
coordinating and implementing the Program. Such funds may be used to 
develop reference materials to further define the principles and 
criteria to achieve high performance school buildings.
    (i) Authorization of Appropriations.--For grants under subsection 
(b) there are authorized to be appropriated--
            (1) $200,000,000 for fiscal year 2003;
            (2) $210,000,000 for fiscal year 2004;
            (3) $220,000,000 for fiscal year 2005;
            (4) $230,000,000 for fiscal year 2006; and
            (5) such sums as may be necessary for fiscal year 2007 and 
        each fiscal year thereafter through fiscal year 2012.
    (j) Definitions.--For purposes of this section:
            (1) High performance school building.--The term ``high 
        performance school building'' means a school building that, in 
        its design, construction, operation, and maintenance--
                    (A) maximizes use of renewable energy and energy-
                efficient technologies and systems;
                    (B) is cost-effective on a life-cycle basis;
                    (C) achieves either--
                            (i) the applicable Energy Star building 
                        energy performance ratings; or
                            (ii) energy consumption levels at least 30 
                        percent below those of the most recent version 
                        of ASHRAE Standard 90.1;
                    (D) uses affordable, environmentally preferable, 
                and durable materials;
                    (E) enhances indoor environmental quality;
                    (F) protects and conserves water; and
                    (G) optimizes site potential.
            (2) Renewable energy.--The term ``renewable energy'' means 
        energy produced by solar, wind, biomass, ocean, geothermal, or 
        hydroelectric power.
            (3) School.--The term ``school'' means--
                    (A) an ``elementary school'' as that term is 
                defined in section 14101(14) of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 8801(14)),
                    (B) a ``secondary school'' as that term is defined 
                in section 14101(25) of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 8801(25)), or
                    (C) an elementary or secondary Indian school funded 
                by the Bureau of Indian Affairs.
            (4) State educational agency.--The term ``State educational 
        agency'' has the same meaning given such term in section 
        14101(28) of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 8801(28)).
            (5) State energy office.--The term ``State energy office'' 
        means the State agency responsible for developing State energy 
        conservation plans under section 362 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6322), or, if no such agency 
        exists, a State agency designated by the Governor of the State.

SEC. 904. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM.

    (a) Grants.--The Secretary of Energy is authorized to make grants 
to units of local government, private, non-profit community development 
organizations, and Indian tribe economic development entities to 
improve energy efficiency, identify and develop alternative renewable 
and distributed energy supplies, and increase energy conservation in 
low income rural and urban communities.
    (b) Purpose of Grants.--The Secretary may make grants on a 
competitive basis for--
            (1) investments that develop alternative renewable and 
        distributed energy supplies;
            (2) energy efficiency projects and energy conservation 
        programs;
            (3) studies and other activities that improve energy 
        efficiency in low income rural and urban communities;
            (4) planning and development assistance for increasing the 
        energy efficiency of buildings and facilities; and
            (5) technical and financial assistance to local government 
        and private entities on developing new renewable and 
        distributed sources of power or combined heat and power 
        generation.
    (c) Definition.--For purposes of this section, the term ``Indian 
tribe'' means any Indian tribe, band, nation, or other organized group 
or community, including any Alaskan Native village or regional or 
village corporation as defined in or established pursuant to the Alaska 
Native Claims Settlement Act (43 U.S.C. 1601 et seq.), which is 
recognized as eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians.
    (d) Authorization of Appropriations.--For the purposes of this 
section there are authorized to be appropriated to the Secretary of 
Energy an amount not to exceed $20,000,000 for fiscal year 2003 and 
each fiscal year thereafter through fiscal year 2005.

SEC. 905. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

    (a) Definitions.--In this section:
            (1) Eligible state.--The term ``eligible State'' means a 
        State that meets the requirements of subsection (b).
            (2) Energy star program.--The term ``Energy Star program'' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            (3) Residential energy star product.--The term 
        ``residential Energy Star product'' means a product for a 
        residence that is rated for energy efficiency under the Energy 
        Star program.
            (4) State energy office.--The term ``State energy office'' 
        means the State agency responsible for developing State energy 
        conservation plans under section 362 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6322).
            (5) State program.--The term ``State program'' means a 
        State energy efficient appliance rebate program described in 
        subsection (b)(1).
    (b) Eligible States.--A State shall be eligible to receive an 
allocation under subsection (c) if the State--
            (1) establishes (or has established) a State energy 
        efficient appliance rebate program to provide rebates to 
        residential consumers for the purchase of residential Energy 
        Star products to replace used appliances of the same type;
            (2) submits an application for the allocation at such time, 
        in such form, and containing such information as the Secretary 
        may require; and
            (3) provides assurances satisfactory to the Secretary that 
        the State will use the allocation to supplement, but not 
        supplant, funds made available to carry out the State program.
    (c) Amount of Allocations.--
            (1) In general.--Subject to paragraph (2), for each fiscal 
        year, the Secretary shall allocate to the State energy office 
        of each eligible State to carry out subsection (d) an amount 
        equal to the product obtained by multiplying the amount made 
        available under subsection (e) for the fiscal year by the ratio 
        that the population of the State in the most recent calendar 
        year for which data are available bears to the total population 
        of all eligible States in that calendar year.
            (2) Minimum allocations.--For each fiscal year, the amounts 
        allocated under this subsection shall be adjusted 
        proportionately so that no eligible State is allocated a sum 
        that is less than an amount determined by the Secretary.
    (d) Use of Allocated Funds.--The allocation to a State energy 
office under subsection (c) may be used to pay up to 50 percent of the 
cost of establishing and carrying out a State program.
    (e) Issuance of Rebates.--Rebates may be provided to residential 
consumers that meet the requirements of the State program. The amount 
of a rebate shall be determined by the State energy office, taking into 
consideration--
            (1) the amount of the allocation to the State energy office 
        under subsection (c);
            (2) the amount of any Federal or State tax incentive 
        available for the purchase of the residential Energy Star 
        product; and
            (3) the difference between the cost of the residential 
        Energy Star product and the cost of an appliance that is not a 
        residential Energy Star product, but is of the same type as, 
        and is the nearest capacity, performance, and other relevant 
        characteristics (as determined by the State energy office) to 
        the residential Energy Star product.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as are necessary for 
fiscal year 2003 through fiscal year 2012.

                 Subtitle B--Federal Energy Efficiency

SEC. 911. ENERGY MANAGEMENT REQUIREMENTS.

    (a) Energy Reduction Goals.--Section 543(a)(1) of the National 
Energy Conservation Policy Act (42 U.S.C. 8253(a)(1)) is amended to 
read as follows:
            ``(1) Subject to paragraph (2), each agency shall apply 
        energy conservation measures to, and shall improve the design 
        for the construction of, the Federal buildings of the agency 
        (including each industrial or laboratory facility) so that the 
        energy consumption per gross square foot of the Federal 
        buildings of the agency in fiscal years 2002 through 2011 is 
        reduced, as compared with the energy consumption per gross 
        square foot of the Federal buildings of the agency in fiscal 
        year 2000, by the percentage specified in the following table:

    ``Fiscal Year                                  Percentage reduction
                2002.......................................          2 
                2003.......................................          4 
                2004.......................................          6 
                2005.......................................          8 
                2006.......................................         10 
                2007.......................................         12 
                2008.......................................         14 
                2009.......................................         16 
                2010.......................................         18 
                2011.......................................      20.''.
    (b) Review and Revision of Energy Performance Requirement.--Section 
543(a) of the National Energy Conservation Policy Act (42 U.S.C. 
8253(a)) is further amended by adding at the end the following:
            ``(3) Not later than December 31, 2010, the Secretary shall 
        review the results of the implementation of the energy 
        performance requirement established under paragraph (1) and 
        submit to Congress recommendations concerning energy 
        performance requirements for calendar years 2012 through 
        2021.''.
    (c) Exclusions.--Section 543(c)(1) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended to read as 
follows:
            ``(1)(A) An agency may exclude, from the energy performance 
        requirement for a calendar year established under subsection 
        (a) and the energy management requirement established under 
        subsection (b), any Federal building or collection of Federal 
        buildings, if the head of the agency finds that--
                    ``(i) compliance with those requirements would be 
                impracticable;
                    ``(ii) the agency has completed and submitted all 
                federally required energy management reports;
                    ``(iii) the agency has achieved compliance with the 
                energy efficiency requirements of this Act, the Energy 
                Policy Act of 1992, Executives Orders, and other 
                Federal law; and
                    ``(iv) the agency has implemented all practicable, 
                life-cycle cost-effective projects with respect to the 
                Federal building or collection of Federal buildings to 
                be excluded.
            ``(B) A finding of impracticability under subparagraph 
        (A)(i) shall be based on--
                    ``(i) the energy intensiveness of activities 
                carried out in the Federal building or collection of 
                Federal buildings; or
                    ``(ii) the fact that the Federal building or 
                collection of Federal buildings is used in the 
                performance of a national security function.''.
    (d) Review by Secretary.--Section 543(c)(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8253(c)(2)) is amended--
            (1) by striking ``impracticability standards'' and 
        inserting ``standards for exclusion''; and
            (2) by striking ``a finding of impracticability'' and 
        inserting ``the exclusion''.
    (e) Criteria.--Section 543(c) of the National Energy Conservation 
Policy Act (42 U.S.C. 8253(c)) is further amended by adding at the end 
the following:
            ``(3) Not later than 180 days after the date of enactment 
        of this paragraph, the Secretary shall issue guidelines that 
        establish criteria for exclusions under paragraph (1).''.
    (f) Reports.--Section 548(b) of the National Energy Conservation 
Policy Act (42 U.S.C. 8258(b)) is amended--
            (1) in the subsection heading, by inserting ``The President 
        and'' before ``Congress''; and
            (2) by inserting ``President and'' before ``Congress''.
    (g) Conforming Amendment.--Section 550(d) of the National Energy 
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second 
sentence by striking ``the 20 percent reduction goal established under 
section 543(a) of the National Energy Conservation Policy Act (42 
U.S.C. 8253(a)).'' and inserting ``each of the energy reduction goals 
established under section 543(a).''.

SEC. 912. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

    Section 543 of the National Energy Conservation Policy Act (42 
U.S.C. 8253) is further amended by adding at the end the following:
    ``(e) Metering of Energy Use.--
            ``(1) Deadline.--By October 1, 2004, all Federal buildings 
        shall, for the purposes of efficient use of energy and 
        reduction in the cost of electricity used in such buildings, be 
        metered or submetered in accordance with guidelines established 
        by the Secretary under paragraph (2). Each agency shall use, to 
        the maximum extent practicable, advanced meters or advanced 
        metering devices that provide data at least daily and that 
        measure at least hourly consumption of electricity in the 
        Federal buildings of the agency. Such data shall be 
        incorporated into existing Federal energy tracking systems and 
        made available to Federal facility energy managers.
            ``(2) Guidelines.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the 
                Secretary, in consultation with the Department of 
                Defense, the General Services Administration and 
                representatives from the metering industry, utility 
                industry, energy services industry, energy efficiency 
                industry, national laboratories, universities and 
                Federal facility energy managers, shall establish 
                guidelines for agencies to carry out paragraph (1).
                    ``(B) Requirements for guidelines.--The guidelines 
                shall--
                            ``(i) take into consideration--
                                    ``(I) the cost of metering and 
                                submetering and the reduced cost of 
                                operation and maintenance expected to 
                                result from metering and submetering;
                                    ``(II) the extent to which metering 
                                and submetering are expected to result 
                                in increased potential for energy 
                                management, increased potential for 
                                energy savings and energy efficiency 
                                improvement, and cost and energy 
                                savings due to utility contract 
                                aggregation; and
                                    ``(III) the measurement and 
                                verification protocols of the 
                                Department of Energy;
                            ``(ii) include recommendations concerning 
                        the amount of funds and the number of trained 
                        personnel necessary to gather and use the 
                        metering information to track and reduce energy 
                        use;
                            ``(iii) establish one or more dates, not 
                        later than 1 year after the date of issuance of 
                        the guidelines, on which the requirements 
                        specified in paragraph (1) shall take effect; 
                        and
                            ``(iv) establish exclusions from the 
                        requirements specified in paragraph (1) based 
                        on the de minimus quantity of energy use of a 
                        Federal building, industrial process, or 
                        structure.
                    ``(3) Plan.--No later than 6 months after the date 
                guidelines are established under paragraph (2), in a 
                report submitted by the agency under section 548(a), 
                each agency shall submit to the Secretary a plan 
                describing how the agency will implement the 
                requirements of paragraph (1), including (A) how the 
                agency will designate personnel primarily responsible 
                for achieving the requirements and (B) demonstration by 
                the agency, complete with documentation, of any finding 
                that advanced meters or advanced metering devices, as 
                defined in paragraph (1), are not practicable.''.

SEC. 913. FEDERAL BUILDING PERFORMANCE STANDARDS.

    (a) Revised Standards.--Section 305(a) of the Energy Conservation 
and Production Act (42 U.S.C. 6834(a)) is amended--
            (1) in paragraph (2)(A), by striking ``CABO Model Energy 
        Code, 1992'' and inserting ``the 2000 International Energy 
        Conservation Code''; and
            (2) by adding at the end the following:
            ``(3) Revised federal building energy efficiency 
        performance standards.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this paragraph, the Secretary of 
                Energy shall establish, by rule, revised Federal 
                building energy efficiency performance standards that 
                require that, if cost-effective--
                            ``(i) new commercial buildings and 
                        multifamily high rise residential buildings be 
                        constructed so as to achieve the applicable 
                        Energy Star building energy performance ratings 
                        or energy consumption levels at least 30 
                        percent below those of the most recent ASHRAE 
                        Standard 90.1, whichever results in the greater 
                        increase in energy efficiency;
                            ``(ii) new residential buildings (other 
                        than those described in clause (i)) be 
                        constructed so as to achieve the applicable 
                        Energy Star building energy performance ratings 
                        or achieve energy consumption levels at least 
                        30 percent below the requirements of the most 
                        recent version of the International Energy 
                        Conservation Code, whichever results in the 
                        greater increase in energy efficiency; and
                            ``(iii) sustainable design principles are 
                        applied to the siting, design, and construction 
                        of all new and replacement buildings.
                    ``(B) Additional revisions.--Not later than 1 year 
                after the date of approval of amendments to ASHRAE 
                Standard 90.1 or the 2000 International Energy 
                Conservation Code, the Secretary of Energy shall 
                determine, based on the cost-effectiveness of the 
                requirements under the amendments, whether the revised 
                standards established under this paragraph should be 
                updated to reflect the amendments.
                    ``(C) Statement on compliance of new buildings.--In 
                the budget request of the Federal agency for each 
                fiscal year and each report submitted by the Federal 
                agency under section 548(a) of the National Energy 
                Conservation Policy Act (42 U.S.C. 8258(a)), the head 
                of each Federal agency shall include--
                            ``(i) a list of all new Federal buildings 
                        of the Federal agency; and
                            ``(ii) a statement concerning whether the 
                        Federal buildings meet or exceed the revised 
                        standards established under this paragraph, 
                        including a monitoring and commissioning report 
                        that is in compliance with the measurement and 
                        verification protocols of the Department of 
                        Energy.
                    ``(D) Authorization of appropriations.--There are 
                authorized to be appropriated such sums as are 
                necessary to carry out this paragraph and to implement 
                the revised standards established under this 
                paragraph.''.
    (b) Energy Labeling Program.--Section 305(a) of the Energy 
Conservation and Production Act (42 U.S.C. 6834(a)) is further amended 
by adding at the end the following:
    ``(e) Energy Labeling Program.--The Secretary of Energy, in 
cooperation with the Administrator of the Environmental Protection 
Agency, shall develop an energy labeling program for new Federal 
buildings that exceed the revised standards established under 
subsection (a)(3) by 15 percent or more.''.

SEC. 914. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

    (a) Requirements.--Part 3 of title V of the National Energy 
Conservation Policy Act is amended by adding at the end the following:

``SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

    ``(a) Definitions.--In this section:
            ``(1) Energy star product.--The term `Energy Star product' 
        means a product that is rated for energy efficiency under an 
        Energy Star program.
            ``(2) Energy star program.--The term `Energy Star program' 
        means the program established by section 324A of the Energy 
        Policy and Conservation Act.
            ``(3) Executive agency.--The term `executive agency' has 
        the meaning given the term in section 4 of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 403).
            ``(4) FEMP designated product.--The term `FEMP designated 
        product' means a product that is designated under the Federal 
        Energy Management Program of the Department of Energy as being 
        among the highest 25 percent of equivalent products for energy 
        efficiency.
    ``(b) Procurement of Energy Efficient Products.--
            ``(1) Requirement.--To meet the requirements of an 
        executive agency for an energy consuming product, the head of 
        the executive agency shall, except as provided in paragraph 
        (2), procure--
                    ``(A) an Energy Star product; or
                    ``(B) a FEMP designated product.
            ``(2) Exceptions.--The head of an executive agency is not 
        required to procure an Energy Star product or FEMP designated 
        product under paragraph (1) if--
                    ``(A) an Energy Star product or FEMP designated 
                product is not cost effective over the life cycle of 
                the product; or
                    ``(B) no Energy Star product or FEMP designated 
                product is reasonably available that meets the 
                requirements of the executive agency.
            ``(3) Procurement planning.--The head of an executive 
        agency shall incorporate into the specifications for all 
        procurements involving energy consuming products and systems, 
        and into the factors for the evaluation of offers received for 
        the procurement, criteria for energy efficiency that are 
        consistent with the criteria used for rating Energy Star 
        products and for rating FEMP designated products.
    ``(c) Listing of Energy Efficient Products in Federal Catalogs.--
Energy Star and FEMP designated products shall be clearly identified 
and prominently displayed in any inventory or listing of products by 
the General Services Administration or the Defense Logistics Agency.
    (b) Conforming Amendment.--The table of contents in section 1(b) of 
the National Energy Conservation Policy Act (42 U.S.C. 8201 note) is 
amended by inserting after the item relating to section 551 the 
following:

``Sec. 552. Federal Government procurement of energy efficient 
                            products.''
    (c) Regulations.--Not later than 180 days after the effective date 
specified in subsection (f), the Secretary of Energy shall issue 
guidelines to carry out section 552 of the National Energy Conservation 
Policy Act (as added by subsection (a)).
    (d) Designation of Energy Star Products.--The Administrator of the 
Environmental Protection Agency and the Secretary of Energy shall 
expedite the process of designating products as Energy Star products 
(as defined in section 552 of the National Energy Conservation Policy 
Act (as added by subsection (a)).
    (e) Designation of Electric Motors.--In the case of electric motors 
of 1 to 500 horsepower, agencies shall select only premium efficient 
motors that meet a standard designated by the Secretary. The Secretary 
shall designate such a standard within 120 days of the enactment of 
this paragraph, after considering the recommendations of associated 
electric motor manufacturers and energy efficiency groups.
    (f) Effective Date.--Subsection (a) and the amendment made by that 
subsection take effect on the date that is 180 days after the date of 
enactment of this Act.

SEC. 915. REPEAL OF ENERGY SAVINGS PERFORMANCE CONTRACT SUNSET.

    Section 801(c) of the National Energy Conservation Policy Act (42 
U.S.C. 8287(c)) is repealed.

SEC. 916. ENERGY SAVINGS PERFORMANCE CONTRACT DEFINITIONS.

    (a) Energy Savings.--Section 804(2) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to read as 
follows:
            ``(2) The term `energy savings' means a reduction in the 
        cost of energy or water, from a base cost established through a 
        methodology set forth in the contract, used in an existing 
        federally owned building or buildings or other federally owned 
        facilities as a result of--
                    ``(A) the lease or purchase of operating equipment, 
                improvements, altered operation and maintenance, or 
                technical services;
                    ``(B) the increased efficient use of existing 
                energy sources by cogeneration or heat recovery, 
                excluding any cogeneration process for other than a 
                federally owned building or buildings or other 
                federally owned facilities; or
                    ``(C) the increased efficient use of existing water 
                sources.''.
    (b) Energy Savings Contract.--Section 804(3) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287c(3)) is amended to read as 
follows:
            ``(3) The terms `energy savings contract' and `energy 
        savings performance contract' mean a contract which provides 
        for the performance of services for the design, acquisition, 
        installation, testing, operation, and, where appropriate, 
        maintenance and repair, of an identified energy or water 
        conservation measure or series of measures at one or more 
        locations.''.
    (c) Energy or Water Conservation Measure.--Section 804(4) of the 
National Energy Conservation Policy Act (42 U.S.C. 8287c(4)) is amended 
to read as follows:
            ``(4) The term `energy or water conservation measure' 
        means--
                    ``(A) an energy conservation measure, as defined in 
                section 551(4) (42 U.S.C. 8259(4)); or
                    ``(B) a water conservation measure that improves 
                water efficiency, is life cycle cost effective, and 
                involves water conservation, water recycling or reuse, 
                more efficient treatment of wastewater or stormwater, 
                improvements in operation or maintenance efficiencies, 
                retrofit activities or other related activities, not at 
                a Federal hydroelectric facility.''.

SEC. 917. REVIEW OF ENERGY SAVINGS PERFORMANCE CONTRACT PROGRAM.

    Within 180 days after the date of the enactment of this Act, the 
Secretary of Energy shall complete a review of the Energy Savings 
Performance Contract program to identify statutory, regulatory, and 
administrative obstacles that prevent Federal agencies from fully 
utilizing the program. In addition, this review shall identify all 
areas for increasing program flexibility and effectiveness, including 
audit and measurement verification requirements, accounting for energy 
use in determining savings, contracting requirements, and energy 
efficiency services covered. The Secretary shall report these findings 
to the Committee on Energy and Commerce of the House of Representatives 
and the Committee on Energy and Natural Resources of the Senate, and 
shall implement identified administrative and regulatory changes to 
increase program flexibility and effectiveness to the extent that such 
changes are consistent with statutory authority.

SEC. 918. FEDERAL ENERGY BANK.

    Part 3 of title V of the National Energy Conservation Policy Act is 
amended by adding at the end the following:

``SEC. 553. FEDERAL ENERGY BANK.

    ``(a) Definitions.--In this section:
            ``(1) Bank.--The term `Bank' means the Federal Energy Bank 
        established by subsection (b).
            ``(2) Energy or water efficiency project.--The term `energy 
        or water efficiency project' means a project that assists a 
        Federal agency in meeting or exceeding the energy or water 
        efficiency requirements of--
                    ``(A) this part;
                    ``(B) title VIII;
                    ``(C) subtitle F of title I of the Energy Policy 
                Act of 1992 (42 U.S.C. 8262 et seq.); or
                    ``(D) any applicable Executive order, including 
                Executive Order No. 13123.
            ``(3) Federal agency.--The term `Federal agency' means--
                    ``(A) an Executive agency (as defined in section 
                105 of title 5, United States Code);
                    ``(B) the United States Postal Service;
                    ``(C) Congress and any other entity in the 
                legislative branch; and
                    ``(D) a Federal court and any other entity in the 
                judicial branch.
    ``(b) Establishment of Bank.--
            ``(1) In general.--There is established in the Treasury of 
        the United States a fund to be known as the `Federal Energy 
        Bank', consisting of--
                    ``(A) such amounts as are deposited in the Bank 
                under paragraph (2);
                    ``(B) such amounts as are repaid to the Bank under 
                subsection (c)(2)(D); and
                    ``(C) any interest earned on investment of amounts 
                in the Bank under paragraph (3).
            ``(2) Deposits in bank.--
                    ``(A) In general.--Subject to the availability of 
                appropriations and to subparagraph (B), the Secretary 
                of the Treasury shall deposit in the Bank an amount 
                equal to $250,000,000 in fiscal year 2003 and in each 
                fiscal year thereafter.
                    ``(B) Maximum amount in bank.--Deposits under 
                subparagraph (A) shall cease beginning with the fiscal 
                year following the fiscal year in which the amounts in 
                the Bank (including amounts on loan from the Bank) 
                become equal to or exceed $1,000,000,000.
            ``(3) Investment of amounts.--The Secretary of the Treasury 
        shall invest such portion of the Bank as is not, in the 
        judgment of the Secretary, required to meet current 
        withdrawals. Investments may be made only in interest-bearing 
        obligations of the United States.
    ``(c) Loans From the Bank.--
            ``(1) In general.--The Secretary of the Treasury shall 
        transfer from the Bank to the Secretary such amounts as are 
        appropriated to carry out the loan program under paragraph (2).
            ``(2) Loan program.--
                    ``(A) Establishment.--
                            ``(i) In general.--In accordance with 
                        subsection (d), the Secretary, in consultation 
                        with the Secretary of Defense, the 
                        Administrator of General Services, and the 
                        Director of the Office of Management and 
                        Budget, shall establish a program to make loans 
                        of amounts in the Bank to any Federal agency 
                        that submits an application satisfactory to the 
                        Secretary in order to pay the costs of a 
                        project described in subparagraph (C).
                            ``(ii) Commencement of operations.--The 
                        Secretary may begin--
                                    ``(I) accepting applications for 
                                loans from the Bank in fiscal year 
                                2002; and
                                    ``(II) making loans from the Bank 
                                in fiscal year 2003.
                    ``(B) Energy savings performance contracting 
                funding.--To the extent practicable, an agency shall 
                not submit a project for which energy performance 
                contracting funding is available and is acceptable to 
                the Federal agency under title VIII.
                    ``(C) Purposes of loan.--
                            ``(i) In general.--A loan from the Bank may 
                        be used to pay--
                                    ``(I) the costs of an energy or 
                                water efficiency project, or a 
                                renewable or alternative energy 
                                project, for a new or existing Federal 
                                building (including selection and 
                                design of the project);
                                    ``(II) the costs of an energy 
                                metering plan and metering equipment 
                                installed pursuant to section 543(e) or 
                                for the purpose of verification of the 
                                energy savings under an energy savings 
                                performance contract under title VIII; 
                                or
                                    ``(III) at the time of contracting, 
                                the costs of cofunding of an energy 
                                savings performance contract (including 
                                a utility energy service agreement) in 
                                order to shorten the payback period of 
                                the project that is the subject of the 
                                energy savings performance contract.
                            ``(ii) Limitation.--A Federal agency may 
                        use not more than 10 percent of the amount of a 
                        loan under subclause (I) or (II) of clause (i) 
                        to pay the costs of administration and proposal 
                        development (including data collection and 
                        energy surveys).
                            ``(iii) Renewable and alternative energy 
                        projects.--Not more than 25 percent of the 
                        amount on loan from the Bank at any time may be 
                        loaned for renewable energy and alternative 
                        energy projects (as defined by the Secretary in 
                        accordance with applicable law (including 
                        Executive Orders)).
                    ``(D) Repayments.--
                            ``(i) In general.--Subject to clauses (ii) 
                        through (iv), a Federal agency shall repay to 
                        the Bank the principal amount of a loan plus 
                        interest at a rate determined by the President, 
                        in consultation with the Secretary and the 
                        Secretary of the Treasury.
                            ``(ii) Waiver or reduction of interest.--
                        The Secretary may waive or reduce the rate of 
                        interest required to be paid under clause (i) 
                        if the Secretary determines that payment of 
                        interest by a Federal agency at the rate 
                        determined under that clause is not required to 
                        fund the operations of the Bank.
                            ``(iii) Determination of interest rate.--
                        The interest rate determined under clause (i) 
                        shall be at a rate that is sufficient to ensure 
                        that, beginning not later than October 1, 2007, 
                        interest payments will be sufficient to fully 
                        fund the operations of the Bank.
                            ``(iv) Insufficiency of appropriations.--
                                    ``(I) Request for appropriations.--
                                As part of the budget request of the 
                                Federal agency for each fiscal year, 
                                the head of each Federal agency shall 
                                submit to the President a request for 
                                such amounts as are necessary to make 
                                such repayments as are expected to 
                                become due in the fiscal year under 
                                this subparagraph.
                                    ``(II) Suspension of repayment 
                                requirement.--If, for any fiscal year, 
                                sufficient appropriations are not made 
                                available to a Federal agency to make 
                                repayments under this subparagraph, the 
                                Bank shall suspend the requirement of 
                                repayment under this subparagraph until 
                                such appropriations are made available.
                    ``(E) Federal agency energy budgets.--Until a loan 
                is repaid, a Federal agency budget submitted by the 
                President to Congress for a fiscal year shall not be 
                reduced by the value of energy savings accrued as a 
                result of any energy conservation measure implemented 
                using amounts from the Bank.
                    ``(F) No rescission or reprogramming.--A Federal 
                agency shall not rescind or reprogram loan amounts made 
                available from the Bank except as permitted under 
                guidelines issued under subparagraph (G).
                    ``(G) Guidelines.--The Secretary shall issue 
                guidelines for implementation of the loan program under 
                this paragraph, including selection criteria, maximum 
                loan amounts, and loan repayment terms.
    ``(d) Selection Criteria.--
            ``(1) In general.--The Secretary shall establish criteria 
        for the selection of projects to be awarded loans in accordance 
        with paragraph (2).
            ``(2) Selection criteria.--
                    ``(A) In general.--The Secretary may make loans 
                from the Bank only for a project that--
                            ``(i) is technically feasible;
                            ``(ii) is determined to be cost-effective 
                        using life cycle cost methods established by 
                        the Secretary;
                            ``(iii) includes a measurement and 
                        management component, based on the measurement 
                        and verification protocols of the Department of 
                        Energy, to--
                                    ``(I) commission energy savings for 
                                new and existing Federal facilities;
                                    ``(II) monitor and improve energy 
                                efficiency management at existing 
                                Federal facilities; and
                                    ``(III) verify the energy savings 
                                under an energy savings performance 
                                contract under title VIII; and
                            ``(iv)(I) in the case of a renewable energy 
                        or alternative energy project, has a simple 
                        payback period of not more than 15 years; and
                            ``(II) in the case of any other project, 
                        has a simple payback period of not more than 10 
                        years.
                    ``(B) Priority.--In selecting projects, the 
                Secretary shall give priority to projects that--
                            ``(i) are a component of a comprehensive 
                        energy management project for a Federal 
                        facility; and
                            ``(ii) are designed to significantly reduce 
                        the energy use of the Federal facility.
    ``(e) Reports and Audits.--
            ``(1) Reports to the secretary.--Not later than 1 year 
        after the completion of installation of a project that has a 
        cost of more than $1,000,000, and annually thereafter, a 
        Federal agency shall submit to the Secretary a report that--
                    ``(A) states whether the project meets or fails to 
                meet the energy savings projections for the project; 
                and
                    ``(B) for each project that fails to meet the 
                energy savings projections, states the reasons for the 
                failure and describes proposed remedies.
            ``(2) Audits.--The Secretary may audit, or require a 
        Federal agency that receives a loan from the Bank to audit, any 
        project financed with amounts from the Bank to assess the 
        performance of the project.
            ``(3) Reports to congress.--At the end of each fiscal year, 
        the Secretary shall submit to Congress a report on the 
        operations of the Bank, including a statement of--
                            ``(A) the total receipts by the Bank;
                            ``(B) the total amount of loans from the 
                        Bank to each Federal agency; and
                            ``(C) the estimated cost and energy savings 
                        resulting from projects funded with loans from 
                        the Bank.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.''.

SEC. 919. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.

    (a) In General.--Part 3 of title V of the National Energy 
Conservation Policy Act is amended by adding at the end:

``SEC. 554. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL 
              BUILDINGS.

    ``(a) In General.--The Architect of the Capitol--
            ``(1) shall develop, update, and implement a cost-effective 
        energy conservation and management plan (referred to in this 
        section as the ``plan'') for all facilities administered by the 
        Congress (referred to in this section as `congressional 
        buildings') to meet the energy performance requirements for 
        Federal buildings established under section 543(a)(1); and
            ``(2) shall submit the plan to Congress, not later than 180 
        days after the date of enactment of this section.
    ``(b) Plan Requirements.--The plan shall include--
            ``(1) a description of the life-cycle cost analysis used to 
        determine the cost-effectiveness of proposed energy efficiency 
        projects;
            ``(2) a schedule of energy surveys to ensure complete 
        surveys of all congressional buildings every 5 years to 
        determine the cost and payback period of energy and water 
        conservation measures;
            ``(3) a strategy for installation of life cycle cost 
        effective energy and water conservation measures;
            ``(4) the results of a study of the costs and benefits of 
        installation of submetering in congressional buildings; and
            ``(5) information packages and `how-to' guides for each 
        Member and employing authority of Congress that detail simple, 
        cost-effective methods to save energy and taxpayer dollars in 
        the workplace.
    ``(c) Contracting Authority.--The Architect--
            ``(1) may contract with nongovernmental entities and use 
        private sector capital to finance energy conservation projects 
        and meet energy performance requirements; and
            ``(2) may use innovative contracting methods that will 
        attract private sector funding for the installation of energy 
        efficient and renewable energy technology, such as energy 
        savings performance contracts described in title VIII.
    ``(d) Capitol Visitor Center.--The Architect--
            ``(1) shall ensure that state-of-the-art energy efficiency 
        and renewable energy technologies are used in the construction 
        and design of the Visitor Center; and
            ``(2) shall include in the Visitor Center an exhibit on the 
        energy efficiency and renewable energy measures used in 
        congressional buildings.
    ``(e) Annual Report.--The Architect shall submit to Congress 
annually a report on congressional energy management and conservation 
programs required under this section that describes in detail--
            ``(1) energy expenditures and savings estimates for each 
        facility;---
            ``(2) energy management and conservation projects; and
            ``(3) future priorities to ensure compliance with this 
        section.''.
    (b) Repeal.--Section 310 of the Legislative Branch Appropriations 
Act, 1999 (40 U.S.C. 166i), is repealed.

SEC. 920. INCREASED USE OF RECOVERED MATERIAL IN FEDERALLY FUNDED 
              PROJECTS INVOLVING PROCUREMENT OF CEMENT OR CONCRETE.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Agency head.--The term ``agency head'' means--
                    (A) the Secretary of Transportation; and
                    (B) the head of each other Federal agency that on a 
                regular basis procures, or provides Federal funds to 
                pay or assist in paying the cost of procuring, material 
                for cement or concrete projects.
            (3) Cement or concrete project.--The term ``cement or 
        concrete project'' means a project for the construction or 
        maintenance of a highway or other transportation facility or a 
        Federal, State, or local government building or other public 
        facility that--
                    (A) involves the procurement of cement or concrete; 
                and
                    (B) is carried out in whole or in part using 
                Federal funds.
            (4) Recovered material.--The term ``recovered material'' 
        means--
                    (A) ground granulated blast furnace slag;
                    (B) coal combustion fly ash; and
                    (C) any other waste material or byproduct recovered 
                or diverted from solid waste that the Administrator, in 
                consultation with an agency head, determines should be 
                treated as recovered material under this section for 
                use in cement or concrete projects paid for, in whole 
                or in part, by the agency head.
    (b) Implementation of Requirements.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator and each agency head 
        shall take such actions as are necessary to implement fully all 
        procurement requirements and incentives in effect as of the 
        date of enactment of this Act (including guidelines under 
        section 6002 of the Solid Waste Disposal Act (42 U.S.C. 6963)) 
        that provide for the use of cement and concrete incorporating 
        recovered material in cement or concrete projects.
            (2) Priority.--In carrying out paragraph (1) an agency head 
        shall give priority to achieving greater use of recovered 
        material in cement or concrete projects for which recovered 
        materials historically have not been used or have been used 
        only minimally.
    (c) Full Implementation Study.--
            (1) In general.--The Administrator and the Secretary of 
        Transportation, in cooperation with the Secretary of Energy, 
        shall conduct a study to determine the extent to which current 
        procurement requirements, when fully implemented in accordance 
        with subsection (b), may realize energy savings and greenhouse 
        gas emission reduction benefits attainable with substitution of 
        recovered material in cement used in cement or concrete 
        projects.
            (2) Matters to be addressed.--The study shall--
                    (A) quantify the extent to which recovered 
                materials are being substituted for Portland cement, 
                particularly as a result of current procurement 
                requirements, and the energy savings and greenhouse gas 
                emission reduction benefits associated with that 
                substitution;
                    (B) identify all barriers in procurement 
                requirements to fuller realization of energy savings 
                and greenhouse gas emission reduction benefits, 
                including barriers resulting from exceptions from 
                current law; and
                    (C)(i) identify potential mechanisms to achieve 
                greater substitution of recovered material in types of 
                cement or concrete projects for which recovered 
                materials historically have not been used or have been 
                used only minimally;
                    (ii) evaluate the feasibility of establishing 
                guidelines or standards for optimized substitution 
                rates of recovered material in those cement or concrete 
                projects; and
                    (iii) identify any potential environmental or 
                economic effects that may result from greater 
                substitution of recovered material in those cement or 
                concrete projects.
            (3) Report.--Not later than 30 months after the date of 
        enactment of this Act, the Secretary shall submit to the 
        Committee on Appropriations and Committee on Environment and 
        Public Works of the Senate and the Committee on Appropriations 
        and Committee on Energy and Commerce of the House of 
        Representatives a report on the study.
    (d) Additional Procurement Requirements.--Within 1 year of the 
release of the report in accordance with subsection (c)(3), the 
Administrator and each agency head shall take additional actions 
authorized under the Solid Waste Disposal Act (42 U.S.C. 6901 et seq.) 
to establish procurement requirements and incentives that provide for 
the use of cement and concrete with increased substitution of recovered 
material in the construction and maintenance of cement or concrete 
projects, so as to--
            (1) realize more fully the energy savings and greenhouse 
        gas emission reduction benefits associated with increased 
        substitution; and
            (2) eliminate barriers identified under subsection (c).
    (e) Effect of Section.--Nothing in this section affects the 
requirements of section 6002 of the Solid Waste Disposal Act (42 U.S.C. 
6962) (including the guidelines and specifications for implementing 
those requirements).

        Subtitle C--Industrial Efficiency and Consumer Products

SEC. 921. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.

    (a) Voluntary Agreements.--The Secretary of Energy shall enter into 
voluntary agreements with one or more persons in industrial sectors 
that consume significant amounts of primary energy per unit of physical 
output to reduce the energy intensity of their production activities.
    (b) Goal.--Voluntary agreements under this section shall have a 
goal of reducing energy intensity by not less than 2.5 percent each 
year from 2002 through 2012.
    (c) Recognition.--The Secretary of Energy, in cooperation with the 
Administrator of the Environmental Protection Agency and other 
appropriate Federal agencies, shall develop mechanisms to recognize and 
publicize the achievements of participants in voluntary agreements 
under this section.
    (d) Definition.--In this section, the term ``energy intensity'' 
means the primary energy consumed per unit of physical output in an 
industrial process.
    (e) Technical Assistance.--An entity that enters into an agreement 
under this section and continues to make a good faith effort to achieve 
the energy efficiency goals specified in the agreement shall be 
eligible to receive from the Secretary a grant or technical assistance 
as appropriate to assist in the achievement of those goals.
    (f) Report.--Not later than June 30, 2008 and June 30, 2012, the 
Secretary shall submit to Congress a report that evaluates the success 
of the voluntary agreements, with independent verification of a sample 
of the energy savings estimates provided by participating firms.

SEC. 922. AUTHORITY TO SET STANDARDS FOR COMMERCIAL PRODUCTS.

    Part B of title III of the Energy Policy and Conservation Act (42 
U.S.C. 6291 et seq.) is amended as follows:
            (1) In the heading for such part, by inserting ``AND 
        COMMERCIAL'' after ``CONSUMER''.
            (2) In section 321(2), by inserting ``or commercial'' after 
        ``consumer''.
            (3) In paragraphs (4), (5), and (15) of section 321, by 
        striking ``consumer'' each place it appears and inserting 
        ``covered''.
            (4) In section 322(a), by inserting ``or commercial'' after 
        ``consumer'' the first place it appears in the material 
        preceding paragraph (1).
            (5) In section 322(b), by inserting ``or commercial'' after 
        ``consumer'' each place it appears.
            (6) In section 322 (b)(1)(B) and (b)(2)(A), by inserting 
        ``or per-business in the case of a commercial product'' after 
        ``per-household'' each place it appears.
            (7) In section 322 (b)(2)(A), by inserting ``or businesses 
        in the case of commercial products'' after ``households'' each 
        place it appears.
            (8) In section 322 (B)(2)(C)--
                    (A) by striking ``term'' and inserting ``terms''; 
                and
                    (B) by inserting ``and `business''' after 
                ```household'''.
            (9) In section 323 (b)(1) (B) by inserting ``or 
        commercial'' after ``consumer''.

SEC. 923. ADDITIONAL DEFINITIONS.

    Section 321 of the Energy Policy and Conservation Act (42 U.S.C. 
6291) is amended by adding at the end the following:
            ``(32) The term `battery charger' means a device that 
        charges batteries for consumer products.
            ``(33) The term `commercial refrigerator, freezer and 
        refrigerator-freezer' means a refrigerator, freezer or 
        refrigerator-freezer that--
                    ``(A) is not a consumer product regulated under 
                this Act; and
                    ``(B) incorporates most components involved in the 
                vapor-compression cycle and the refrigerated 
                compartment in a single package.
            ``(34) The term `external power supply' means an external 
        power supply circuit that is used to convert household electric 
        current into either DC current or lower-voltage AC current to 
        operate a consumer product.
            ``(35) The term `illuminated exit sign' means a sign that--
                    ``(A) is designed to be permanently fixed in place 
                to identify an exit; and
                    ``(B) consists of--
                            ``(i) an electrically powered integral 
                        light source that illuminates the legend `EXIT' 
                        and any directional indicators; and
                            ``(ii) provides contrast between the 
                        legend, any directional indicators, and the 
                        background.
            ``(36)(A) Except as provided in subsection (B), the term 
        `low-voltage dry-type transformer' means a transformer that--
                    ``(i) has an input voltage of 600 volts or less;
                    ``(ii) is air-cooled;
                    ``(iii) does not use oil as a coolant; and
                    ``(iv) is rated for operation at a frequency of 60 
                Hertz.
            ``(B) The term `low-voltage dry-type transformer' does not 
        include--
                    ``(i) transformers with multiple voltage taps, with 
                the highest voltage tap equaling at least 20 percent 
                more than the lowest voltage tap;
                    ``(ii) transformers that are designed to be used in 
                a special purpose application, such as transformers 
                commonly known as drive transformers, rectifier 
                transformers, autotransformers, Uninterruptible Power 
                System transformers, impedance transformers, harmonic 
                transformers, regulating transformers, sealed and 
                nonventilating transformers, machine tool transformers, 
                welding transformers, grounding transformers, or 
                testing transformers; or
                    ``(iii) any transformer not listed in clause (ii) 
                that is excluded by the Secretary by rule because the 
                transformer is designed for a special application and 
                the application of standards to the transformer would 
                not result in significant energy savings.
            ``(37) The term `standby mode' means the lowest amount of 
        electric power used by a household appliance when not 
        performing its active functions, as defined on an individual 
        product basis by the Secretary.
            ``(38) The term `torchiere' means a portable electric lamp 
        with a reflector bowl that directs light upward so as to give 
        indirect illumination.
            ``(39) The term `transformer' means a device consisting of 
        two or more coils of insulated wire that transfers alternating 
        current by electromagnetic induction from one coil to another 
        to change the original voltage or current value.
            ``(40) The term `unit heater' means a self-contained fan-
        type heater designed to be installed within the heated space, 
        except that such term does not include a warm air furnace.
            ``(41) The term `traffic signal module' means a standard 8-
        inch (200mm) or 12-inch (300mm) traffic signal indication, 
        consisting of a light source, a lens, and all other parts 
        necessary for operation, that communicates movement messages to 
        drivers through red, amber, and green colors.''.

SEC. 924. ADDITIONAL TEST PROCEDURES.

    (a) Exit Signs.--Section 323(b) of the Energy Policy and 
Conservation Act (42 U.S.C. 6293) is amended by adding at the end the 
following:
            ``(9) Test procedures for illuminated exit signs shall be 
        based on the test method used under the Energy Star program of 
        the Environmental Protection Agency for illuminated exit signs, 
        as in effect on the date of enactment of this paragraph.
            ``(10) Test procedures for low voltage dry-type 
        distribution transformers shall be based on the `Standard Test 
        Method for Measuring the Energy Consumption of Distribution 
        Transformers' prescribed by the National Electrical 
        Manufacturers Association (NEMA TP 2-1998). The Secretary may 
        review and revise this test procedure based on future revisions 
        to such standard test method.
            ``(11) Test procedures for traffic signal modules shall be 
        based on the test method used under the Energy Star program of 
        the Environmental Protection Agency for traffic signal modules, 
        as in effect on the date of enactment of this paragraph.''.
    (b) Additional Consumer and Commercial Products.--Section 323 of 
the Energy Policy and Conservation Act (42 U.S.C. 6293) is further 
amended by adding at the end the following:
    ``(f) Additional Consumer and Commercial Products.--The Secretary 
shall within 24 months after the date of enactment of this subsection 
prescribe testing requirements for suspended ceiling fans, refrigerated 
bottled or canned beverage vending machines, commercial unit heaters, 
and commercial refrigerators, freezers and refrigerator-freezers. Such 
testing requirements shall be based on existing test procedures used in 
industry to the extent practical and reasonable. In the case of 
suspended ceiling fans, such test procedures shall include efficiency 
at both maximum output and at an output no more than 50 percent of the 
maximum output.''.

SEC. 925. ENERGY LABELING.

    (a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Paragraph (2) of section 324(a) of the Energy Policy and Conservation 
Act (42 U.S.C. 6294(a)(2)) is amended by adding at the end the 
following:
                    ``(F) Not later than 3 months after the date of 
                enactment of this subparagraph, the Commission shall 
                initiate a rulemaking to consider the effectiveness of 
                the current consumer products labeling program in 
                assisting consumers in making purchasing decisions and 
                improving energy efficiency and to consider changes to 
                the labeling rules that would improve the effectiveness 
                of consumer product labels. Such rulemaking shall be 
                completed within 15 months of the date of enactment of 
                this subparagraph.''.
    (b) Rulemaking on Labeling for Additional Products.--Section 324(a) 
of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is 
further amended by adding at the end the following:
            ``(5) The Secretary shall within 6 months after the date on 
        which energy conservation standards are prescribed by the 
        Secretary for covered products referred to in subsections (u) 
        and (v) of section 325, and within 18 months of enactment of 
        this paragraph for products referred to in subsections (w) 
        through (y) of section 325, prescribe, by rule, labeling 
        requirements for such products. Labeling requirements adopted 
        under this paragraph shall take effect on the same date as the 
        standards set pursuant to sections 325 (v) through (y).''.

SEC. 926. ENERGY STAR PROGRAM.

    The Energy Policy and Conservation Act (42 U.S.C. 6201 and 
following) is amended by inserting after section 324 the following:

                         ``energy star program

    ``Sec. 324A. There is established at the Department of Energy and 
the Environmental Protection Agency a program to identify and promote 
energy-efficient products and buildings in order to reduce energy 
consumption, improve energy security, and reduce pollution through 
labeling of products and buildings that meet the highest energy 
efficiency standards. Responsibilities under the program shall be 
divided between the Department of Energy and the Environmental 
Protection Agency consistent with the terms of agreements between the 
two agencies. The Administrator and the Secretary shall--
            ``(1) promote Energy Star compliant technologies as the 
        preferred technologies in the marketplace for achieving energy 
        efficiency and to reduce pollution;
            ``(2) work to enhance public awareness of the Energy Star 
        label, including special outreach to small businesses;
            ``(3) preserve the integrity of the Energy Star label; and
            ``(4) solicit the comments of interested parties in 
        establishing a new Energy Star product category or in revising 
        a product category, and upon adoption of a new or revised 
        product category provide an explanation of the decision that 
        responds to significant public comments.''.

SEC. 927. ENERGY CONSERVATION STANDARDS FOR CENTRAL AIR CONDITIONERS 
              AND HEAT PUMPS.

    Section 325(d)(3) of the Energy Policy and Conservation Act (42 
U.S.C. 6295(d)) is amended by adding at the end the following:
                    ``(C) Revision of standards.--Not later than 60 
                days after the date of enactment of this subparagraph, 
                the Secretary shall amend the standards established 
                under paragraph (1).''.

SEC. 928. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL CONSUMER AND 
              COMMERCIAL PRODUCTS.

    Section 325 of the Energy Policy and Conservation Act (42 U.S.C. 
6295) is amended by adding at the end the following:
    ``(u) Standby Mode Electric Energy Consumption.--
            ``(1) Initial rulemaking.--(A) The Secretary shall, within 
        18 months after the date of enactment of this subsection, 
        prescribe by notice and comment, definitions of standby mode 
        and test procedures for the standby mode power use of battery 
        chargers and external power supplies. In establishing these 
        test procedures, the Secretary shall consider, among other 
        factors, existing test procedures used for measuring energy 
        consumption in standby mode and assess the current and 
        projected future market for battery chargers and external power 
        supplies. This assessment shall include estimates of the 
        significance of potential energy savings from technical 
        improvements to these products and suggested product classes 
        for standards. Prior to the end of this time period, the 
        Secretary shall hold a scoping workshop to discuss and receive 
        comments on plans for developing energy conservation standards 
        for standby mode energy use for these products.
            ``(B) The Secretary shall, within 3 years after the date of 
        enactment of this subsection, issue a final rule that 
        determines whether energy conservation standards shall be 
        promulgated for battery chargers and external power supplies or 
        classes thereof. For each product class, any such standards 
        shall be set at the lowest level of standby energy use that--
                    ``(i) meets the criteria of subsections (o), (p), 
                (q), (r), (s) and (t); and
                    ``(ii) will result in significant overall annual 
                energy savings, considering both standby mode and other 
                operating modes.
            ``(2) Designation of additional covered products.--(A) Not 
        later than 180 days after the date of enactment of this 
        subsection, the Secretary shall publish for public comment and 
        public hearing a notice to determine whether any noncovered 
        products should be designated as covered products for the 
        purpose of instituting a rulemaking under this section to 
        determine whether an energy conservation standard restricting 
        standby mode energy consumption, should be promulgated; 
        providing that any restriction on standby mode energy 
        consumption shall be limited to major sources of such 
        consumption.
            ``(B) In making the determinations pursuant to subparagraph 
        (A) of whether to designate new covered products and institute 
        rulemakings, the Secretary shall, among other relevant factors 
        and in addition to the criteria in section 322(b), consider--
                    ``(i) standby mode power consumption compared to 
                overall product energy consumption; and
                    ``(ii) the priority and energy savings potential of 
                standards which may be promulgated under this 
                subsection compared to other required rulemakings under 
                this section and the available resources of the 
                Department to conduct such rulemakings.
            ``(C) Not later than 1 year after the date of enactment of 
        this subsection, the Secretary shall issue a determination of 
        any new covered products for which he intends to institute 
        rulemakings on standby mode pursuant to this section and he 
        shall state the dates by which he intends to initiate those 
        rulemakings.
            ``(3) Review of standby energy use in covered products.--In 
        determining pursuant to section 323 whether test procedures and 
        energy conservation standards pursuant to section 325 should be 
        revised, the Secretary shall consider for covered products 
        which are major sources of standby mode energy consumption 
        whether to incorporate standby mode into such test procedures 
        and energy conservation standards, taking into account, among 
        other relevant factors, the criteria for non-covered products 
        in subparagraph (B) of this subsection.
            ``(4) Rulemaking for standby mode.--(A) Any rulemaking 
        instituted under this subsection or for covered products under 
        this section which restricts standby mode power consumption 
        shall be subject to the criteria and procedures for issuing 
        energy conservation standards set forth in section 325 and the 
        criteria set forth in paragraph 2(B) of this subsection.
            ``(B) No standard can be proposed for new covered products 
        or covered products in a standby mode unless the Secretary has 
        promulgated applicable test procedures for each product 
        pursuant to section 323.
            ``(C) The provisions of section 327 shall apply to new 
        covered products which are subject to the rulemakings for 
        standby mode after a final rule has been issued.
            ``(5) Effective date.--Any standard promulgated under this 
        subsection shall be applicable to products manufactured or 
        imported 3 years after the date of promulgation.
            ``(6) Voluntary programs to reduce standby mode energy 
        use.--The Secretary and the Administrator shall collaborate and 
        develop programs, including programs pursuant to section 324A 
        and other voluntary industry agreements or codes of conduct, 
        which are designed to reduce standby mode energy use.
    ``(v) Suspended Ceiling Fans, Vending Machines, Unit Heaters, and 
Commercial Refrigerators, Freezers and Refrigerator-Freezers.--The 
Secretary shall within 24 months after the date on which testing 
requirements are prescribed by the Secretary pursuant to section 
323(f), prescribe, by rule, energy conservation standards for suspended 
ceiling fans, refrigerated bottled or canned beverage vending machines, 
unit heaters, and commercial refrigerators, freezers and refrigerator-
freezers. In establishing standards under this subsection, the 
Secretary shall use the criteria and procedures contained in 
subsections (l) and (m). Any standard prescribed under this subsection 
shall apply to products manufactured 3 years after the date of 
publication of a final rule establishing such standard.
    ``(w) Illuminated Exit Signs.--Illuminated exit signs manufactured 
on or after January 1, 2005 shall meet the Energy Star Program 
performance requirements for illuminated exit signs prescribed by the 
Environmental Protection Agency as in effect on the date of enactment 
of this subsection.
    ``(x) Torchieres.--Torchieres manufactured on or after January 1, 
2005--
            ``(1) shall consume not more than 190 watts of power; and
            ``(2) shall not be capable of operating with lamps that 
        total more than 190 watts.
    ``(y) Low Voltage Dry-Type Transformers.--The efficiency of low 
voltage dry-type transformers manufactured on or after January 1, 2005 
shall be the Class I Efficiency Levels for low voltage dry-type 
transformers specified in Table 4-2 of the `Guide for Determining 
Energy Efficiency for Distribution Transformers' published by the 
National Electrical Manufacturers Association (NEMA TP-1-1996).
    ``(z) Traffic Signal Modules.--Traffic signal modules manufactured 
on or after January 1, 2006 shall meet the performance requirements 
used under the Energy Star program of the Environmental Protection 
Agency for traffic signals, as in effect on the date of enactment of 
this paragraph, and shall be installed with compatible, electrically-
connected signal control interface devices and conflict monitoring 
systems.''.

SEC. 929. CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF AIR 
              CONDITIONING, HEATING, AND VENTILATION MAINTENANCE.

    Section 337 of the Energy Policy and Conservation Act (42 U.S.C. 
6307) is amended by adding at the end the following:
    ``(c) HVAC Maintenance.--(1) For the purpose of ensuring that 
installed air conditioning and heating systems operate at their maximum 
rated efficiency levels, the Secretary shall, within 180 days of the 
date of enactment of this subsection, carry out a program to educate 
homeowners and small business owners concerning the energy savings 
resulting from properly conducted maintenance of air conditioning, 
heating, and ventilating systems.
    ``(2) The Secretary may carry out the program in cooperation with 
industry trade associations, industry members, and energy efficiency 
organizations.
    ``(d) Small Business Education and Assistance.--The Administrator 
of the Small Business Administration, in consultation with the 
Secretary of Energy and the Administrator of the Environmental 
Protection Agency, shall develop and coordinate a Government-wide 
program, building on the existing Energy Star for Small Business 
Program, to assist small business to become more energy efficient, 
understand the cost savings obtainable through efficiencies, and 
identify financing options for energy efficiency upgrades. The 
Secretary and the Administrator shall make the program information 
available directly to small businesses and through other Federal 
agencies, including the Federal Emergency Management Agency, and the 
Department of Agriculture.''.

SEC. 930. STUDY OF ENERGY EFFICIENCY STANDARDS.

    The Secretary of Energy shall contract with the National Academy of 
Sciences for a study, to be completed within 1 year of enactment of 
this Act, to examine whether the goals of energy efficiency standards 
are best served by measurement of energy consumed, and efficiency 
improvements, at the actual site of energy consumption, or through the 
full fuel cycle, beginning at the source of energy production. The 
Secretary shall submit the report to the Congress.

                     Subtitle D--Housing Efficiency

SEC. 931. CAPACITY BUILDING FOR ENERGY EFFICIENT, AFFORDABLE HOUSING.

    Section 4(b) of the HUD Demonstration Act of 1993 (42 U.S.C. 9816 
note) is amended--
            (1) in paragraph (1), by inserting before the semicolon at 
        the end the following: ``, including capabilities regarding the 
        provision of energy efficient, affordable housing and 
        residential energy conservation measures''; and
            (2) in paragraph (2), by inserting before the semicolon the 
        following: ``, including such activities relating to the 
        provision of energy efficient, affordable housing and 
        residential energy conservation measures that benefit low-
        income families''.

SEC. 932. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY CONSERVATION 
              AND EFFICIENCY ACTIVITIES.

    Section 105(a)(8) of the Housing and Community Development Act of 
1974 (42 U.S.C. 5305(a)(8)) is amended--
            (1) by inserting ``or efficiency'' after ``energy 
        conservation'';
            (2) by striking ``, and except that'' and inserting ``; 
        except that''; and
            (3) by inserting before the period at the end the 
        following: ``; and except that each percentage limitation under 
        this paragraph on the amount of assistance provided under this 
        title that may be used for the provision of public services is 
        hereby increased by 10 percent, but such percentage increase 
        may be used only for the provision of public services 
        concerning energy conservation or efficiency''.

SEC. 933. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY EFFICIENT 
              HOUSING.

    (a) Single Family Housing Mortgage Insurance.--Section 203(b)(2) of 
the National Housing Act (12 U.S.C. 1709(b)(2)) is amended, in the 
first undesignated paragraph beginning after subparagraph (B)(iii) 
(relating to solar energy systems)--
            (1) by inserting ``or paragraph (10)''; and
            (2) by striking ``20 percent'' and inserting ``30 
        percent''.
    (b) Multifamily Housing Mortgage Insurance.--Section 207(c) of the 
National Housing Act (12 U.S.C. 1713(c)) is amended, in the second 
undesignated paragraph beginning after paragraph (3) (relating to solar 
energy systems and residential energy conservation measures), by 
striking ``20 percent'' and inserting ``30 percent''.
    (c) Cooperative Housing Mortgage Insurance.--Section 213(p) of the 
National Housing Act (12 U.S.C. 1715e(p)) is amended by striking ``20 
per centum'' and inserting ``30 percent''.
    (d) Rehabilitation and Neighborhood Conservation Housing Mortgage 
Insurance.--Section 220(d)(3)(B)(iii) of the National Housing Act (12 
U.S.C. 1715k(d)(3)(B)(iii)) is amended by striking ``20 per centum'' 
and inserting ``30 percent''.
    (e) Low-Income Multifamily Housing Mortgage Insurance.--Section 
221(k) of the National Housing Act (12 U.S.C. 1715l(k)) is amended by 
striking ``20 per centum'' and inserting ``30 percent''.
    (f) Elderly Housing Mortgage Insurance.--The proviso at the end of 
section 213(c)(2) of the National Housing Act (12 U.S.C. 1715v(c)(2)) 
is amended by striking ``20 per centum'' and inserting ``30 percent''.
    (g) Condominium Housing Mortgage Insurance.--Section 234(j) of the 
National Housing Act (12 U.S.C. 1715y(j)) is amended by striking ``20 
per centum'' and inserting ``30 percent''.

SEC. 934. PUBLIC HOUSING CAPITAL FUND.

    Section 9(d)(1) of the United States Housing Act of 1937 (42 U.S.C. 
1437g(d)(1)) is amended--
            (1) in subparagraph (I), by striking ``and'' at the end;
            (2) in subparagraph (K), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(L) improvement of energy and water-use 
                efficiency by installing fixtures and fittings that 
                conform to the American Society of Mechanical 
                Engineers/American National Standards Institute 
                standards A112.19.2-1998 and A112.18.1-2000, or any 
                revision thereto, applicable at the time of 
                installation, and by increasing energy efficiency and 
                water conservation by such other means as the Secretary 
                determines are appropriate.''.

SEC. 935. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR ASSISTED 
              HOUSING.

    Section 251(b)(1) of the National Energy Conservation Policy Act 
(42 U.S.C. 8231(1)) is amended--
            (1) by striking ``financed with loans'' and inserting 
        ``assisted'';
            (2) by inserting after ``1959,'' the following: ``which are 
        eligible multifamily housing projects (as such term is defined 
        in section 512 of the Multifamily Assisted Housing Reform and 
        Affordability Act of 1997 (42 U.S.C. 1437f note) and are 
        subject to a mortgage restructuring and rental assistance 
        sufficiency plans under such Act,''; and
            (3) by inserting after the period at the end of the first 
        sentence the following new sentence: ``Such improvements may 
        also include the installation of energy and water conserving 
        fixtures and fittings that conform to the American Society of 
        Mechanical Engineers/American National Standards Institute 
        standards A112.19.2-1998 and A112.18.1-2000, or any revision 
        thereto, applicable at the time of installation.''.

SEC. 936. NORTH AMERICAN DEVELOPMENT BANK.

    Part 2 of subtitle D of title V of the North American Free Trade 
Agreement Implementation Act (22 U.S.C. 290m-290m-3) is amended by 
adding at the end the following:

``SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.

    ``Consistent with the focus of the Bank's Charter on environmental 
infrastructure projects, the Board members representing the United 
States should use their voice and vote to encourage the Bank to finance 
projects related to clean and efficient energy, including energy 
conservation, that prevent, control, or reduce environmental pollutants 
or contaminants.''.

SEC. 937. CAPITAL FUND.

    Section 9 of the United States Housing Act of 1937 (42 U.S.C. 
1437g), as amended by section 934, is amended--
            (1) in subsection (d)(1)--
                    (A) in subparagraph (L), by striking the period at 
                the end and inserting ``; and'';
                    (B) by redesignating subparagraph (L) as 
                subparagraph (K); and
                    (C) by adding at the end the following:
                            ``(L) integrated utility management and 
                        capital planning to maximize energy 
                        conservation and efficiency measures.''; and
            (2) in subsection (e)(2)(C)--
                    (A) by striking ``The'' and inserting the 
                following:
                            ``(i) In general.--The''; and
                    (B) by adding at the end the following:
                            ``(ii) Third party contracts.--Contracts 
                        described in clause (i) may include contracts 
                        for equipment conversions to less costly 
                        utility sources, projects with resident paid 
                        utilities, adjustments to frozen base year 
                        consumption, including systems repaired to meet 
                        applicable building and safety codes and 
                        adjustments for occupancy rates increased by 
                        rehabilitation.
                            ``(iii) Term of contract.--The total term 
                        of a contract described in clause (i) shall be 
                        for not more than 20 years to allow longer 
                        payback periods for retrofits, including but 
                        not limited to windows, heating system 
                        replacements, wall insulation, site-based 
                        generations, and advanced energy savings 
                        technologies, including renewable energy 
                        generation.''.

SEC. 938. ENERGY-EFFICIENT APPLIANCES.

    A public housing agency shall purchase energy-efficient appliances 
that are Energy Star products as defined in section 552 of the National 
Energy Policy and Conservation Act (as amended by this Act) when the 
purchase of energy-efficient appliances is cost-effective to the public 
housing agency.

SEC. 939. ENERGY EFFICIENCY STANDARDS.

    Section 109 of the Cranston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12709) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``the date of the enactment 
                        of the Energy Policy Act of 1992'' and 
                        inserting ``September 30, 2002'';
                            (ii) in subparagraph (A), by striking 
                        ``and'' at the end;
                            (iii) in subparagraph (B), by striking the 
                        period at the end and inserting a semi-colon; 
                        and
                            (iv) by adding at the end the following:
                    ``(C) rehabilitation and new construction of public 
                and assisted housing funded by HOPE VI revitalization 
                grants, established under section 24 of the United 
                States Housing Act of 1937 (42 U.S.C. 1437v), where 
                such standards are determined to be cost effective by 
                the Secretary of Housing and Urban Development; and
                    (B) in paragraph (2), by striking ``Council of 
                American'' and all that follows through ``life-cycle 
                cost basis'' and inserting ``2000 International Energy 
                Conservation Code'';
            (2) in subsection (b)--
                    (A) by striking ``the date of the enactment of the 
                Energy Policy Act of 1992'' and inserting ``September 
                30, 2002''; and
                    (B) by striking ``CABO'' and all that follows 
                through ``1989'' and inserting ``the 2000 International 
                Energy Conservation Code''; and
            (3) in subsection (c)--
                    (A) in the heading, by striking ``Model Energy 
                Code'' and inserting ``The International Energy 
                Conservation Code''; and
                    (B) by striking ``CABO'' and all that follows 
                through ``1989'' and inserting ``the 2000 International 
                Energy Conservation Code''.

SEC. 940. ENERGY STRATEGY FOR HUD.

    (a) In General.--The Secretary of Housing and Urban Development 
shall develop and implement an integrated strategy to reduce utility 
expenses through cost-effective energy conservation and efficiency 
measures, design and construction in public and assisted housing.
    (b) Energy Management Office.--The Secretary of Housing and Urban 
Development shall create an office at the Department of Housing and 
Urban Development for utility management, energy efficiency, and 
conservation, with responsibility for implementing the strategy 
developed under this section, including development of a centralized 
database that monitors public housing energy usage, and development of 
energy reduction goals and incentives for public housing agencies. The 
Secretary shall submit an annual report to Congress on the strategy.

                Subtitle E--Rural and Remote Communities

SEC. 941. SHORT TITLE.

    This subtitle may be cited as the ``Rural and Remote Community 
Fairness Act''.

SEC. 942. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) a modern infrastructure, including energy-efficient 
        housing, electricity, telecommunications, bulk fuel, wastewater 
        and potable water service, is a necessary ingredient of a 
        modern society and development of a prosperous economy;
            (2) the Nation's rural and remote communities face critical 
        social, economic and environmental problems, arising in 
        significant measure from the high cost of infrastructure 
        development in sparsely populated and remote areas, that are 
        not adequately addressed by existing Federal assistance 
        programs;
            (3) in the past, Federal assistance has been instrumental 
        in establishing electric and other utility service in many 
        developing regions of the Nation, and that Federal assistance 
        continues to be appropriate to ensure that electric and other 
        utility systems in rural areas conform with modern standards of 
        safety, reliability, efficiency and environmental protection; 
        and
            (4) the future welfare of the Nation and the well-being of 
        its citizens depend on the establishment and maintenance of 
        viable rural and remote communities as social, economic and 
        political entities.
    (b) Purpose.--The purpose of this subtitle is the development and 
maintenance of viable rural and remote communities through the 
provision of efficient housing, and reasonably priced and 
environmentally sound energy, water, wastewater, and bulk fuel, 
telecommunications and utility services to those communities that do 
not have those services or who currently bear costs of those services 
that are significantly above the national average.

SEC. 943. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``unit of general local government'' means any 
        city, county, town, township, parish, village, borough 
        (organized or unorganized) or other general purpose political 
        subdivision of a State, Guam, the Commonwealth of the Northern 
        Mariana Islands, Puerto Rico, the Republic of the Marshall 
        Islands, the Federated States of Micronesia, the Republic of 
        Palau, the Virgin Islands, and American Samoa, a combination of 
        such political subdivisions that is recognized by the 
        Secretary; and the District of Columbia; or any other 
        appropriate organization of citizens of a rural and remote 
        community that the Secretary may identify.
            (2) The term ``population'' means total resident population 
        based on data compiled by the United States Bureau of the 
        Census and referable to the same point or period in time.
            (3) The term ``Native American group'' means any Indian 
        tribe, band, group, and nation, including Alaska Indians, 
        Aleuts, and Eskimos, and any Alaskan Native village, of the 
        United States, which is considered an eligible recipient under 
        the Indian Self-Determination and Education Assistance Act 
        (Public Law 93-638) or was considered an eligible recipient 
        under chapter 67 of title 31, United States Code, prior to the 
        repeal of such chapter.
            (4) The term ``Secretary'' means the Secretary of Housing 
        and Urban Development, the Secretary of Agriculture, the 
        Secretary of the Interior or the Secretary of Energy, as 
        appropriate.
            (5) The term ``rural and remote community'' means a unit of 
        local general government or Native American group which is 
        served by an electric utility that has 10,000 or less customers 
        with an average retail cost per kilowatt hour of electricity 
        that is equal to or greater than 150 percent of the average 
        retail cost per kilowatt hour of electricity for all consumers 
        in the United States, as determined by data provided by the 
        Energy Information Administration of the Department of Energy.
            (6) The term ``alternative energy sources'' include 
        nontraditional means of providing electrical energy, including, 
        but not limited to, wind, solar, biomass, municipal solid 
        waste, hydroelectric, geothermal and tidal power.
            (7) The term ``average retail cost per kilowatt hour of 
        electricity'' has the same meaning as ``average revenue per 
        kilowatt hour of electricity'' as defined by the Energy 
        Information Administration of the Department of Energy.

SEC. 944. AUTHORIZATION OF APPROPRIATIONS.

    The Secretary is authorized to make grants to rural and remote 
communities to carry out activities in accordance with the provisions 
of this subtitle. For purposes of assistance under section 947, there 
are authorized to be appropriated $100,000,000 for each of fiscal years 
2003 through 2009.

SEC. 945. STATEMENT OF ACTIVITIES AND REVIEW.

    (a) Statement of Objectives and Projected Use.--Prior to the 
receipt in any fiscal year of a grant under section 947 by any rural 
and remote community, the grantee shall have prepared and submitted to 
the Secretary of the agency providing funding a final statement of 
rural and remote community development objectives and projected use of 
funds.
    (b) Public Notice.--In order to permit public examination and 
appraisal of such statements, to enhance the public accountability of 
grantees, and to facilitate coordination of activities with different 
levels of government, the grantee shall in a timely manner--
            (1) furnish citizens information concerning the amount of 
        funds available for rural and remote community development 
        activities and the range of activities that may be undertaken;
            (2) publish a proposed statement in such manner to afford 
        affected citizens an opportunity to examine its content and to 
        submit comments on the proposed statement and on the community 
        development performance of the grantee;
            (3) provide citizens with reasonable access to records 
        regarding the past use of funds received under section 947 by 
        the grantee; and
            (4) provide citizens with reasonable notice of, and 
        opportunity to comment on, any substantial change proposed to 
        be made in the use of funds received under section 947 from one 
        eligible activity to another.
The final statement shall be made available to the public, and a copy 
shall be furnished to the appropriate Secretary. Any final statement of 
activities may be modified or amended from time to time by the grantee 
in accordance with the same. Procedures required in this paragraph are 
for the preparation and submission of such statement.
    (c) Performance and Evaluation Report.--Each grantee shall submit 
to the appropriate Secretary, at a time determined by the Secretary, a 
performance and evaluation report, concerning the use of funds made 
available under section 947, together with an assessment by the grantee 
of the relationship of such use to the objectives identified in the 
grantee's statement under subsection (a) and to the requirements of 
subsection (b). The grantee's report shall indicate its programmatic 
accomplishments, the nature of and reasons for any changes in the 
grantee's program objectives, and indications of how the grantee would 
change its programs as a result of its experiences.
    (d) Retention of Income.--
            (1) In general.--Any rural and remote community may retain 
        any program income that is realized from any grant made by the 
        Secretary under section 947 if--
                    (A) such income was realized after the initial 
                disbursement of the funds received by such unit of 
                general local government under such section; and
                    (B) such unit of general local government has 
                agreed that it will utilize the program income for 
                eligible rural and remote community development 
                activities in accordance with the provisions of this 
                title.
            (2) Exception.--The Secretary may, by regulation, exclude 
        from consideration as program income any amounts determined to 
        be so small that compliance with the subsection creates an 
        unreasonable administrative burden on the rural and remote 
        community.

SEC. 946. ELIGIBLE ACTIVITIES.

    (a) Activities Included.--Eligible activities assisted under this 
subtitle may include only--
            (1) weatherization and other cost-effective energy-related 
        repairs of homes and other buildings;
            (2) the acquisition, construction, repair, reconstruction, 
        or installation of reliable and cost-efficient facilities for 
        the generation, transmission or distribution of electricity, 
        and telecommunications, for consumption in a rural and remote 
        community or communities;
            (3) the acquisition, construction, repair, reconstruction, 
        remediation or installation of facilities for the safe storage 
        and efficient management of bulk fuel by rural and remote 
        communities, and facilities for the distribution of such fuel 
        to consumers in a rural or remote community;
            (4) facilities and training to reduce costs of maintaining 
        and operating generation, distribution or transmission systems 
        to a rural and remote community or communities;
            (5) the institution of professional management and 
        maintenance services for electricity generation, transmission 
        or distribution to a rural and remote community or communities;
            (6) the investigation of the feasibility of alternate 
        energy sources for a rural and remote community or communities;
            (7) acquisition, construction, repair, reconstruction, 
        operation, maintenance, or installation of facilities for water 
        or wastewater service;
            (8) the acquisition or disposition of real property 
        (including air rights, water rights, and other interests 
        therein) for eligible rural and remote community development 
        activities; and
            (9) activities necessary to develop and implement a 
        comprehensive rural and remote development plan, including 
        payment of reasonable administrative costs related to planning 
        and execution of rural and remote community development 
        activities.
    (b) Activities Undertaken Through Electric Utilities.--Eligible 
activities may be undertaken either directly by the rural and remote 
community, or by the rural and remote community through local electric 
utilities.

SEC. 947. ALLOCATION AND DISTRIBUTION OF FUNDS.

    For each fiscal year, of the amount approved in an appropriation 
Act under section 903 for grants in any year, the Secretary shall 
distribute to each rural and remote community which has filed a final 
statement of rural and remote community development objectives and 
projected use of funds under section 945, an amount which shall be 
allocated among the rural and remote communities that filed a final 
statement of rural and remote community development objectives and 
projected use of funds under section 945 proportionate to the 
percentage that the average retail price per kilowatt hour of 
electricity for all classes of consumers in the rural and remote 
community exceeds the national average retail price per kilowatt hour 
for electricity for all consumers in the United States, as determined 
by data provided by the Department of Energy's Energy Information 
Administration. In allocating funds under this section, the Secretary 
shall give special consideration to those rural and remote communities 
that increase economies of scale through consolidation of services, 
affiliation and regionalization of eligible activities under this 
title.

SEC. 948. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

    Section 313 of the Rural Electrification Act of 1936 (7 U.S.C. 
940c) is amended by adding after subsection (b) the following:
    ``(c) Rural and Remote Communities Electrification Grants.--The 
Secretary of Agriculture, in consultation with the Secretary of Energy 
and the Secretary of the Interior, may provide grants under this Act 
for the purpose of increasing energy efficiency, siting or upgrading 
transmission and distribution lines, or providing or modernizing 
electric facilities to--
            ``(1) a unit of local government of a State or territory; 
        or
            ``(2) an Indian tribe or Tribal College or University as 
        defined in section 316(b)(3) of the Higher Education Act (20 
        U.S.C. 1059c(b)(3)).
    ``(d) Grant Criteria.--The Secretary shall make grants based on a 
determination of cost-effectiveness and most effective use of the funds 
to achieve the stated purposes of this section.
    ``(e) Preference.--In making grants under this section, the 
Secretary shall give a preference to renewable energy facilities.
    ``(f) Definition.--For purposes of this section, the term `Indian 
tribe' means any Indian tribe, band, nation, or other organized group 
or community, including any Alaska Native village or regional or 
village corporation as defined in or established pursuant to the Alaska 
Native Claims Settlement Act (43 U.S.C. 1601 et seq.), which is 
recognized as eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians.
    ``(e) Authorization.--For the purpose of carrying out subsection 
(c), there are authorized to be appropriated to the Secretary 
$20,000,000 for each of the 7 fiscal years following the date of 
enactment of this subsection.''.

SEC. 949. ADDITIONAL AUTHORIZATION OF APPROPRIATIONS.

    There is hereby authorized to be appropriated $5,000,000 for each 
of fiscal years 2003 through 2009 to the Denali Commission established 
by the Denali Commission Act of 1998 (42 U.S.C. 3121 note) for the 
purposes of funding the power cost equalization program.

SEC. 950. RURAL RECOVERY COMMUNITY DEVELOPMENT BLOCK GRANTS.

    (a) Findings; Purpose.--
            (1) Findings.--Congress finds that--
                    (A) a modern infrastructure, including affordable 
                housing, wastewater and water service, and advanced 
                technology capabilities is a necessary ingredient of a 
                modern society and development of a prosperous economy 
                with minimal environmental impacts;
                    (B) the Nation's rural areas face critical social, 
                economic, and environmental problems, arising in 
                significant measure from the growing cost of 
                infrastructure development in rural areas that suffer 
                from low per capita income and high rates of 
                outmigration and are not adequately addressed by 
                existing Federal assistance programs; and
                    (C) the future welfare of the Nation and the well-
                being of its citizens depend on the establishment and 
                maintenance of viable rural areas as social, economic, 
                and political entities.
            (2) Purpose.--The purpose of this section is to provide for 
        the development and maintenance of viable rural areas through 
        the provision of affordable housing and community development 
        assistance to eligible units of general local government and 
        eligible Native American groups in rural areas with excessively 
        high rates of outmigration and low per capita income levels.
    (b) Definitions.--In this section:
            (1) Eligible unit of general local government.--The term 
        ``eligible unit of general local government'' means a unit of 
        general local government that is the governing body of a rural 
        recovery area.
            (2) Eligible indian tribe.--The term ``eligible Indian 
        tribe'' means the governing body of an Indian tribe that is 
        located in a rural recovery area.
            (3) Grantee.--The term ``grantee'' means an eligible unit 
        of general local government or eligible Indian tribe that 
        receives a grant under this section.
            (4) Native american group.--The term ``Native American 
        group'' means any Indian tribe, band, group, and nation, 
        including Alaska Indians, Aleuts, and Eskimos, and any Alaskan 
        Native village, of the United States, which is considered an 
        eligible recipient under the Indian Self-Determination and 
        Education Assistance Act (Public Law 93-638) or was considered 
        an eligible recipient under chapter 67 of title 31, United 
        States Code, prior to the repeal of such chapter.
            (5) Rural recovery area.--The term ``rural recovery area'' 
        means any geographic area represented by a unit of general 
        local government or a Native American group--
                    (A) the borders of which are not adjacent to a 
                metropolitan area;
                    (B) in which--
                            (i) the population outmigration level 
                        equals or exceeds 1 percent over the most 
                        recent 5 year period, as determined by the 
                        Secretary of Housing and Urban Development; and
                            (ii) the per capita income is less than 
                        that of the national nonmetropolitan average; 
                        and
                    (C) that does not include a city with a population 
                of more than 15,000.
            (6) Unit of general local government.--
                    (A) In general.--The term ``unit of general local 
                government'' means any city, county, town, township, 
                parish, village, borough (organized or unorganized), or 
                other general purpose political subdivision of a State; 
                Guam, the Commonwealth of the Northern Mariana Islands, 
                the Virgin Islands, Puerto Rico, and American Samoa, or 
                a general purpose political subdivision thereof; a 
                combination of such political subdivisions that, except 
                as provided in section 106(d)(4), is recognized by the 
                Secretary; and the District of Columbia.
                    (B) Other entities included.--The term also 
                includes a State or a local public body or agency, 
                community association, or other entity, that is 
                approved by the Secretary for the purpose of providing 
                public facilities or services to a new community.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development, the Secretary of Agriculture, 
        the Secretary of the Interior or the Secretary of Energy, as 
        appropriate.
    (c) Grant Authority.--The Secretary may make grants in accordance 
with this section to eligible units of general local government, Native 
American groups and eligible Indian tribes that meet the requirements 
of subsection (d) to carry out eligible activities described in 
subsection (f).
    (d) Eligibility Requirements.--
            (1) Statement of rural development objectives.--In order to 
        receive a grant under this section for a fiscal year, an 
        eligible unit of general local government, Native American 
        group or eligible Indian tribe--
                    (A) shall--
                            (i) publish a proposed statement of rural 
                        development objectives and a description of the 
                        proposed eligible activities described in 
                        subsection (f) for which the grant will be 
                        used; and
                            (ii) afford residents of the rural recovery 
                        area served by the eligible unit of general 
                        local government, Native American groups or 
                        eligible Indian tribe with an opportunity to 
                        examine the contents of the proposed statement 
                        and the proposed eligible activities published 
                        under clause (i), and to submit comments to the 
                        eligible unit of general local government, 
                        Native American group or eligible Indian tribe, 
                        as applicable, on the proposed statement and 
                        the proposed eligible activities, and the 
                        overall community development performance of 
                        the eligible unit of general local government, 
                        Native American groups or eligible Indian 
                        tribe, as applicable; and
                    (B) based on any comments received under 
                subparagraph (A)(ii), prepare and submit to the 
                Secretary--
                            (i) a final statement of rural development 
                        objectives;
                            (ii) a description of the eligible 
                        activities described in subsection (f) for 
                        which a grant received under this section will 
                        be used; and
                            (iii) a certification that the eligible 
                        unit of general local government, Native 
                        American groups or eligible Indian tribe, as 
                        applicable, will comply with the requirements 
                        of paragraph (2).
            (2) Public notice and comment.--In order to enhance public 
        accountability and facilitate the coordination of activities 
        among different levels of government, an eligible unit of 
        general local government, Native American groups or eligible 
        Indian tribe that receives a grant under this section shall, as 
        soon as practicable after such receipt, provide the residents 
        of the rural recovery area served by the eligible unit of 
        general local government, Native American groups or eligible 
        Indian tribe, as applicable, with--
                    (A) a copy of the final statement submitted under 
                paragraph (1)(B);
                    (B) information concerning the amount made 
                available under this section and the eligible 
                activities to be undertaken with that amount;
                    (C) reasonable access to records regarding the use 
                of any amounts received by the eligible unit of general 
                local government, Native American groups or eligible 
                Indian tribe under this section in any preceding fiscal 
                year; and
                    (D) reasonable notice of, and opportunity to 
                comment on, any substantial change proposed to be made 
                in the use of amounts received under this section from 
                one eligible activity to another.
    (e) Distribution of Grants.--
            (1) In General.--In each fiscal year, the Secretary shall 
        distribute to each eligible unit of general local government, 
        Native American groups and eligible Indian tribe that meets the 
        requirements of subsection (d)(1) a grant in an amount 
        described in paragraph (2).
            (2) Amount.--Of the total amount made available to carry 
        out this section in each fiscal year, the Secretary shall 
        distribute to each grantee the amount equal to the greater of--
                    (A) the pro rata share of the grantee, as 
                determined by the Secretary, based on the combined 
                annual population outmigration level (as determined by 
                the Secretary of Housing and Urban Development) and the 
                per capita income for the rural recovery area served by 
                the grantee; or
                    (B) $200,000.
    (f) Eligible Activities.--Each grantee shall use amounts received 
under this section for one or more of the following eligible 
activities, which may be undertaken either directly by the grantee, or 
by any local economic development corporation, regional planning 
district, nonprofit community development corporation, or statewide 
development organization authorized by the grantee--
            (1) the acquisition, construction, repair, reconstruction, 
        operation, maintenance, or installation of facilities for water 
        and wastewater service or any other infrastructure needs 
        determined to be critical to the further development or 
        improvement of a designated industrial park;
            (2) the acquisition or disposition of real property 
        (including air rights, water rights, and other interests 
        therein) for rural community development activities;
            (3) the development of telecommunications infrastructure 
        within a designated industrial park that encourages high 
        technology business development in rural areas;
            (4) activities necessary to develop and implement a 
        comprehensive rural development plan, including payment of 
        reasonable administrative costs related to planning and 
        execution of rural development activities; or
            (5) affordable housing initiatives.
    (g) Performance and Evaluation Report.--
            (1) In general.--Each grantee shall annually submit to the 
        appropriate Secretary a performance and evaluation report, 
        concerning the use of amounts received under this section.
            (2) Contents.--Each report submitted under paragraph (1) 
        shall include a description of--
                    (A) the eligible activities carried out by the 
                grantee with amounts received under this section, and 
                the degree to which the grantee has achieved the rural 
                development objectives included in the final statement 
                submitted under subsection (d)(1);
                    (B) the nature of and reasons for any change in the 
                rural development objectives or the eligible activities 
                of the grantee after submission of the final statement 
                under subsection (d)(1); and
                    (C) any manner in which the grantee would change 
                the rural development objectives of the grantee as a 
                result of the experience of the grantee in 
                administering amounts received under this section.
    (h) Retention of Income.--A grantee may retain any income that is 
realized from the grant, if--
            (1) the income was realized after the initial disbursement 
        of amounts to the grantee under this section; and
            (2) the--
                    (A) grantee agrees to utilize the income for one or 
                more eligible activities; or
                    (B) amount of the income is determined by the 
                Secretary to be so small that compliance with 
                subparagraph (A) would create an unreasonable 
                administrative burden on the grantee.
    (i) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $100,000,000 for each of fiscal 
years 2003 through 2009.

   DIVISION D--INTEGRATION OF ENERGY POLICY AND CLIMATE CHANGE POLICY

                TITLE X--NATIONAL CLIMATE CHANGE POLICY

                     Subtitle A--Sense of Congress

SEC. 1001. SENSE OF CONGRESS ON CLIMATE CHANGE.

    (a) Findings.--The Congress makes the following findings:
            (1) Evidence continues to build that increases in 
        atmospheric concentrations of man-made greenhouse gases are 
        contributing to global climate change.
            (2) The Intergovernmental Panel on Climate Change (IPCC) 
        has concluded that ``there is new and stronger evidence that 
        most of the warming observed over the last 50 years is 
        attributable to human activities'' and that the Earth's average 
        temperature can be expected to rise between 2.5 and 10.4 
        degrees Fahrenheit in this century.
            (3) The National Academy of Sciences confirmed the findings 
        of the IPCC, stating that ``the IPCC's conclusion that most of 
        the observed warming of the last 50 years is likely to have 
        been due to the increase of greenhouse gas concentrations 
        accurately reflects the current thinking of the scientific 
        community on this issue'' and that ``there is general agreement 
        that the observed warming is real and particularly strong 
        within the past twenty years''. The National Academy of 
        Sciences also noted that ``because there is considerable 
        uncertainty in current understanding of how the climate system 
        varies naturally and reacts to emissions of greenhouse gases 
        and aerosols, current estimates of the magnitude of future 
        warming should be regarded as tentative and subject to future 
        adjustments upward or downward''.
            (4) The IPCC has stated that in the last 40 years, the 
        global average sea level has risen, ocean heat content has 
        increased, and snow cover and ice extent have decreased, which 
        threatens to inundate low-lying island nations and coastal 
        regions throughout the world.
            (5) In October 2000, a United States Government report 
        found that global climate change may harm the United States by 
        altering crop yields, accelerating sea-level rise, and 
        increasing the spread of tropical infectious diseases.
            (6) In 1992, the United States ratified the United Nations 
        Framework Convention on Climate Change (UNFCCC), the ultimate 
        objective of which is the ``stabilization of greenhouse gas 
        concentrations in the atmosphere at a level that would prevent 
        dangerous anthropogenic interference with the climate system. 
        Such a level should be achieved within a time-frame sufficient 
        to allow ecosystems to adapt naturally to climate change, to 
        ensure that food production is not threatened and to enable 
        economic development to proceed in a sustainable manner''.
            (7) The UNFCCC stated in part that the Parties to the 
        Convention are to implement policies ``with the aim of 
        returning . . . to their 1990 levels anthropogenic emissions of 
        carbon dioxide and other greenhouse gases'' under the principle 
        that ``policies and measures . . . should be appropriate for 
        the specific conditions of each Party and should be integrated 
        with national development programmes, taking into account that 
        economic development is essential for adopting measures to 
        address climate change''.
            (8) There is a shared international responsibility to 
        address this problem, as industrial nations are the largest 
        historic and current emitters of greenhouse gases and 
        developing nations' emissions will significantly increase in 
        the future.
            (9) The UNFCCC further stated that ``developed country 
        Parties should take the lead in combating climate change and 
        the adverse effects thereof'', as these nations are the largest 
        historic and current emitters of greenhouse gases. The UNFCCC 
        also stated that ``steps required to understand and address 
        climate change will be environmentally, socially and 
        economically most effective if they are based on relevant 
        scientific, technical and economic considerations and 
        continually re-evaluated in the light of new findings in these 
        areas''.
            (10) Senate Resolution 98 of the One Hundred Fifth 
        Congress, which expressed that developing nations must also be 
        included in any future, binding climate change treaty and such 
        a treaty must not result in serious harm to the United States 
        economy, should not cause the United States to abandon its 
        shared responsibility to help reduce the risks of climate 
        change and its impacts. Future international efforts in this 
        regard should focus on recognizing the equitable 
        responsibilities for addressing climate change by all nations, 
        including commitments by the largest developing country 
        emitters in a future, binding climate change treaty.
            (11) It is the position of the United States that it will 
        not interfere with the plans of any nation that chooses to 
        ratify and implement the Kyoto Protocol to the UNFCCC.
            (12) American businesses need to know how governments 
        worldwide will address the risks of climate change.
            (13) The United States benefits from investments in the 
        research, development and deployment of a range of clean energy 
        and efficiency technologies that can reduce the risks of 
        climate change and its impacts and that can make the United 
        States economy more productive, bolster energy security, create 
        jobs, and protect the environment.
    (b) Sense of Congress.--It is the sense of the United States 
Congress that the United States should demonstrate international 
leadership and responsibility in reducing the health, environmental, 
and economic risks posed by climate change by--
            (1) taking responsible action to ensure significant and 
        meaningful reductions in emissions of greenhouse gases from all 
        sectors;
            (2) creating flexible international and domestic 
        mechanisms, including joint implementation, technology 
        deployment, tradable credits for emissions reductions and 
        carbon sequestration projects that will reduce, avoid, and 
        sequester greenhouse gas emissions; and
            (3) participating in international negotiations, including 
        putting forth a proposal to the Conference of the Parties, with 
        the objective of securing United States participation in a 
        future binding climate change Treaty in a manner that is 
        consistent with the environmental objectives of the UNFCCC, 
        that protects the economic interests of the United States, and 
        recognizes the shared international responsibility for 
        addressing climate change, including developing country 
        participation.

                  Subtitle B--Climate Change Strategy

SEC. 1011. SHORT TITLE.

    This subtitle may be cited as the ``Climate Change Strategy and 
Technology Innovation Act of 2002''.

SEC. 1012. DEFINITIONS.

    In this subtitle:
            (1) Climate-friendly technology.--The term ``climate-
        friendly technology'' means any energy supply or end-use 
        technology that, over the life of the technology and compared 
        to similar technology in commercial use as of the date of 
        enactment of this Act--
                    (A) results in reduced emissions of greenhouse 
                gases;
                    (B) may substantially lower emissions of other 
                pollutants; and
                    (C) may generate substantially smaller or less 
                hazardous quantities of solid or liquid waste.
            (2) Department.--The term ``Department'' means the 
        Department of Energy.
            (3) Department office.--The term ``Department Office'' 
        means the Office of Climate Change Technology of the Department 
        established by section 1015(a).
            (4) Federal agency.--The term ``Federal agency'' has the 
        meaning given the term ``agency'' in section 551 of title 5, 
        United States Code.
            (5) Greenhouse gas.--The term ``greenhouse gas'' means--
                    (A) an anthropogenic gaseous constituent of the 
                atmosphere (including carbon dioxide, methane, nitrous 
                oxide, chlorofluorocarbons, hydrofluorocarbons, 
                perfluorocarbons, sulfur hexafluoride, and tropospheric 
                ozone) that absorbs and re-emits infrared radiation and 
                influences climate; and
                    (B) an anthropogenic aerosol (such as black soot) 
                that absorbs solar radiation and influences climate.
            (6) Interagency task force.--The term ``Interagency Task 
        Force'' means the Interagency Task Force established under 
        section 1014(e).
            (7) Key element.--The term ``key element'', with respect to 
        the Strategy, means--
                    (A) definition of interim emission mitigation 
                levels, that, coupled with specific mitigation 
                approaches and after taking into account actions by 
                other nations (if any), would result in stabilization 
                of greenhouse gas concentrations;
                    (B) technology development, including--
                            (i) a national commitment to double energy 
                        research and development by the United States 
                        public and private sectors; and
                            (ii) in carrying out such research and 
                        development, a national commitment to provide a 
                        high degree of emphasis on bold, breakthrough 
                        technologies that will make possible a profound 
                        transformation of the energy, transportation, 
                        industrial, agricultural, and building sectors 
                        of the United States;
                    (C) climate adaptation research that focuses on 
                actions necessary to adapt to climate change--
                            (i) that may have already occurred; or
                            (ii) that may occur under future climate 
                        change scenarios;
                    (D) climate science research that--
                            (i) builds on the substantial scientific 
                        understanding of climate change that exists as 
                        of the date of enactment of this subtitle; and
                            (ii) focuses on reducing the remaining 
                        scientific, technical, and economic 
                        uncertainties to aid in the development of 
                        sound response strategies.
            (8) Long-term goal of the strategy.--The term ``long-term 
        goal of the Strategy'' means the long-term goal in section 
        1013(a)(1).
            (9) Mitigation.--The term ``mitigation'' means actions that 
        reduce, avoid, or sequester greenhouse gases.
            (10) National academy of sciences.--The term ``National 
        Academy of Sciences'' means the National Academy of Sciences, 
        the National Academy of Engineering, the Institute of Medicine, 
        and the National Research Council.
            (11) Qualified individual.--
                    (A) In general.--The term ``qualified individual'' 
                means an individual who has demonstrated expertise and 
                leadership skills to draw on other experts in diverse 
                fields of knowledge that are relevant to addressing the 
                climate change challenge.
                    (B) Fields of knowledge.--The fields of knowledge 
                referred to in subparagraph (A) are--
                            (i) the science of climate change and its 
                        impacts;
                            (ii) energy and environmental economics;
                            (iii) technology transfer and diffusion;
                            (iv) the social dimensions of climate 
                        change;
                            (v) climate change adaptation strategies;
                            (vi) fossil, nuclear, and renewable energy 
                        technology;
                            (vii) energy efficiency and energy 
                        conservation;
                            (viii) energy systems integration;
                            (ix) engineered and terrestrial carbon 
                        sequestration;
                            (x) transportation, industrial, and 
                        building sector concerns;
                            (xi) regulatory and market-based mechanisms 
                        for addressing climate change;
                            (xii) risk and decision analysis;
                            (xiii) strategic planning; and
                            (xiv) the international implications of 
                        climate change strategies.
            (12) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (13) Stabilization of greenhouse gas concentrations.--The 
        term ``stabilization of greenhouse gas concentrations'' means 
        the stabilization of greenhouse gas concentrations in the 
        atmosphere at a level that would prevent dangerous 
        anthropogenic interference with the climate system, recognizing 
        that such a level should be achieved within a time frame 
        sufficient to allow ecosystems to adapt naturally to climate 
        change, to ensure that food production is not threatened and to 
        enable economic development to proceed in a sustainable manner, 
        as contemplated by the United Nations Framework Convention on 
        Climate Change, done at New York on May 9, 1992.
            (14) Strategy.--The term ``Strategy'' means the National 
        Climate Change Strategy developed under section 1013.
            (15) White house office.--The term ``White House Office'' 
        means the Office of National Climate Change Policy established 
        by section 1014(a).

SEC. 1013. NATIONAL CLIMATE CHANGE STRATEGY.

    (a) In General.--The President, through the director of the White 
House Office and in consultation with the Interagency Task Force, shall 
develop a National Climate Change Strategy, which shall--
            (1) have the long-term goal of stabilization of greenhouse 
        gas concentrations through actions taken by the United States 
        and other nations;
            (2) recognize that accomplishing the long-term goal of the 
        Strategy will take from many decades to more than a century, 
        but acknowledging that significant actions must begin in the 
        near term;
            (3) incorporate the four key elements;
            (4) be developed on the basis of an examination of a broad 
        range of emissions levels and dates for achievement of those 
        levels (including those evaluated by the Intergovernmental 
        Panel on Climate Change and those consistent with United States 
        treaty commitments) that, after taking into account actions by 
        other nations, would achieve the long-term goal of the 
        Strategy;
            (5) consider the broad range of activities and actions that 
        can be taken by United States entities to reduce, avoid, or 
        sequester greenhouse gas emissions both within the United 
        States and in other nations through the use of market 
        mechanisms, which may include, but not be limited to, 
        mitigation activities, terrestrial sequestration, earning 
        offsets through carbon capture or project-based activities, 
        trading of emissions credits in domestic and international 
        markets, and the application of the resulting credits from any 
        of the above within the United States;
            (6) minimize any adverse short-term and long-term social, 
        economic, national security, and environmental impacts, 
        including ensuring that the strategy is developed in an 
        economically and environmentally sound manner;
            (7) incorporate mitigation approaches leading to the 
        development and deployment of advanced technologies and 
        practices that will reduce, avoid, or sequester greenhouse gas 
        emissions;
            (8) be consistent with the goals of energy, transportation, 
        industrial, agricultural, forestry, environmental, economic, 
        and other relevant policies of the United States;
            (9) take into account--
                    (A) the diversity of energy sources and 
                technologies;
                    (B) supply-side and demand-side solutions; and
                    (C) national infrastructure, energy distribution, 
                and transportation systems;
            (10) be based on an evaluation of a wide range of 
        approaches for achieving the long-term goal of the Strategy, 
        including evaluation of--
                    (A) a variety of cost-effective Federal and State 
                policies, programs, standards, and incentives;
                    (B) policies that integrate and promote innovative, 
                market-based solutions in the United States and in 
                foreign countries; and
                    (C) participation in other international 
                institutions, or in the support of international 
                activities, that are established or conducted to 
                achieve the long-term goal of the Strategy;
            (11) in the final recommendations of the Strategy--
                    (A) emphasize policies and actions that achieve the 
                long-term goal of the Strategy; and
                    (B) provide specific recommendations concerning--
                            (i) measures determined to be appropriate 
                        for short-term implementation, giving 
                        preference to cost-effective and 
                        technologically feasible measures that will--
                                    (I) produce measurable net 
                                reductions in United States emissions, 
                                compared to expected trends, that lead 
                                toward achievement of the long-term 
                                goal of the Strategy; and
                                    (II) minimize any adverse short-
                                term and long-term economic, 
                                environmental, national security, and 
                                social impacts on the United States;
                            (ii) the development of technologies that 
                        have the potential for long-term 
                        implementation--
                                    (I) giving preference to 
                                technologies that have the potential to 
                                reduce significantly the overall cost 
                                of achieving the long-term goal of the 
                                Strategy; and
                                    (II) considering a full range of 
                                energy sources, energy conversion and 
                                use technologies, and efficiency 
                                options;
                            (iii) such changes in institutional and 
                        technology systems are necessary to adapt to 
                        climate change in the short-term and the long-
                        term;
                            (iv) such review, modification, and 
                        enhancement of the scientific, technical, and 
                        economic research efforts of the United States, 
                        and improvements to the data resulting from 
                        research, as are appropriate to improve the 
                        accuracy of predictions concerning climate 
                        change and the economic and social costs and 
                        opportunities relating to climate change; and
                            (v) changes that should be made to project 
                        and grant evaluation criteria under other 
                        Federal research and development programs so 
                        that those criteria do not inhibit development 
                        of climate-friendly technologies;
            (12) recognize that the Strategy is intended to guide the 
        Nation's effort to address climate change, but it shall not 
        create a legal obligation on the part of any person or entity 
        other than the duties of the Director of the White House Office 
        and Interagency Task Force in the development of the Strategy;
            (13) have a scope that considers the totality of United 
        States public, private, and public-private sector actions that 
        bear on the long-term goal;
            (14) be developed in a manner that provides for meaningful 
        participation by, and consultation among, Federal, State, 
        tribal, and local government agencies, nongovernmental 
        organizations, academia, scientific bodies, industry, the 
        public, and other interested parties in accordance with 
        subsections (b)(3)(C)(iv)(II) and (e)(3)(B)(ii) of section 
        1014;
            (15) address how the United States should engage State, 
        tribal, and local governments in developing and carrying out a 
        response to climate change;
            (16) promote, to the maximum extent practicable, public 
        awareness, outreach, and information-sharing to further the 
        understanding of the full range of climate change-related 
        issues;
            (17) provide a detailed explanation of how the measures 
        recommended by the Strategy will ensure that they do not result 
        in serious harm to the economy of the United States;
            (18) provide a detailed explanation of how the measures 
        recommended by the Strategy will achieve its long-term goal;
            (19) include any recommendations for legislative and 
        administrative actions necessary to implement the Strategy;
            (20) serve as a framework for climate change actions by all 
        Federal agencies;
            (21) recommend which Federal agencies are, or should be, 
        responsible for the various aspects of implementation of the 
        Strategy and any budgetary implications;
            (22) address how the United States should engage foreign 
        governments in developing an international response to climate 
        change; and
            (23) incorporate initiatives to open markets and promote 
        the deployment of a range of climate-friendly technologies 
        developed in the United States and abroad.
    (b) Submission to Congress.--Not later than 1 year after the date 
of enactment of this section, the President, through the Interagency 
Task Force and the Director, shall submit to Congress the Strategy, in 
the form of a report that includes--
            (1) a description of the Strategy and its goals, including 
        how the Strategy addresses each of the 4 key elements;
            (2) an inventory and evaluation of Federal programs and 
        activities intended to carry out the Strategy;
            (3) a description of how the Strategy will serve as a 
        framework of climate change response actions by all Federal 
        agencies, including a description of coordination mechanisms 
        and interagency activities;
            (4) evidence that the Strategy is consistent with other 
        energy, transportation, industrial, agricultural, forestry, 
        environmental, economic, and other relevant policies of the 
        United States;
            (5) a description of provisions in the Strategy that ensure 
        that it minimizes any adverse short-term and long-term social, 
        economic, national security, and environmental impacts, 
        including ensuring that the Strategy is developed in an 
        economically and environmentally sound manner;
            (6) evidence that the Strategy has been developed in a 
        manner that provides for participation by, and consultation 
        among, Federal, State, tribal, and local government agencies, 
        nongovernmental organizations, academia, scientific bodies, 
        industry, the public, and other interested parties;
            (7) a description of Federal activities that promote, to 
        the maximum extent practicable, public awareness, outreach, and 
        information-sharing to further the understanding of the full 
        range of climate change-related issues; and
            (8) recommendations for legislative or administrative 
        changes to Federal programs or activities implemented to carry 
        out this Strategy, in light of new knowledge of climate change 
        and its impacts and costs or benefits, or technological 
        capacity to improve mitigation or adaption activities.
    (c) Updates.--Not later than 4 years after the date of submission 
of the Strategy to Congress under subsection (b), and at the end of 
each 4-year period thereafter, the President shall submit to Congress 
an updated version of the Strategy.
    (d) Progress Reports.--Not later than 1 year after the date of 
submission of the Strategy to Congress under subsection (b), and 
annually thereafter at the time that the President submits to the 
Congress the budget of the United States Government under section 1105 
of title 31, United States Code, the President shall submit to Congress 
a report that--
            (1) describes the Strategy, its goals, and the Federal 
        programs and activities intended to carry out the Strategy 
        through technological, scientific, mitigation, and adaptation 
        activities;
            (2) evaluates the Federal programs and activities 
        implemented as part of this Strategy against the goals and 
        implementation dates outlined in the Strategy;
            (3) assesses the progress in implementation of the 
        Strategy;
            (4) incorporates the technology program reports required 
        pursuant to section 1015(a)(3) and subsections (d) and (e) of 
        section 1321;
            (5) describes any changes to Federal programs or activities 
        implemented to carry out this Strategy, in light of new 
        knowledge of climate change and its impacts and costs or 
        benefits, or technological capacity to improve mitigation or 
        adaptation activities;
            (6) describes all Federal spending on climate change for 
        the current fiscal year and each of the 5 years previous; 
        categorized by Federal agency and program function (including 
        scientific research, energy research and development, 
        regulation, education, and other activities);
            (7) estimates the budgetary impact for the current fiscal 
        year and each of the 5 years previous of any Federal tax 
        credits, tax deductions or other incentives claimed by 
        taxpayers that are directly or indirectly attributable to 
        greenhouse gas emissions reduction activities;
            (8) estimates the amount, in metric tons, of net greenhouse 
        gas emissions reduced, avoided, or sequestered directly or 
        indirectly as a result of the implementation of the Strategy;
            (9) evaluates international research and development and 
        market-based activities and the mitigation actions taken by the 
        United States and other nations to achieve the long-term goal 
        of the Strategy; and
            (10) makes recommendations for legislative or 
        administrative actions or adjustments that will accelerate 
        progress towards meeting the near-term and long-term goals 
        contained in the Strategy.
    (e) National Academy of Sciences Review.--
            (1) In general.--Not later than 90 days after the date of 
        publication of the Strategy under subsection (b) and each 
        update under subsection (c), the Director of the National 
        Science Foundation, on behalf of the Director of the White 
        House Office and the Interagency Task Force, shall enter into 
        appropriate arrangements with the National Academy of Sciences 
        to conduct a review of the Strategy or update.
            (2) Criteria.--The review by the National Academy of 
        Sciences shall evaluate the goals and recommendations contained 
        in the Strategy or update, taking into consideration--
                    (A) the adequacy of effort and the appropriateness 
                of focus of the totality of all public, private, and 
                public-private sector actions of the United States with 
                respect to the Strategy, including the four key 
                elements;
                    (B) the adequacy of the budget and the 
                effectiveness with which each Federal agency is 
                carrying out its responsibilities;
                    (C) current scientific knowledge regarding climate 
                change and its impacts;
                    (D) current understanding of human social and 
                economic responses to climate change, and responses of 
                natural ecosystems to climate change;
                    (E) advancements in energy technologies that 
                reduce, avoid, or sequester greenhouse gases or 
                otherwise mitigate the risks of climate change;
                    (F) current understanding of economic costs and 
                benefits of mitigation or adaptation activities;
                    (G) the existence of alternative policy options 
                that could achieve the Strategy goals at lower 
                economic, environmental, or social cost; and
                    (H) international activities and the actions taken 
                by the United States and other nations to achieve the 
                long-term goal of the Strategy.
            (3) Report.--Not later than 1 year after the date of 
        submittal to the Congress of the Strategy or update, as 
        appropriate, the National Academy of Sciences shall prepare and 
        submit to the Congress and the President a report concerning 
        the results of its review, along with any recommendations as 
        appropriate. Such report shall also be made available to the 
        public.
            (4) Authorization of appropriations.--For the purposes of 
        this subsection, there are authorized to be appropriated to the 
        National Science Foundation such sums as may be necessary.

SEC. 1014. OFFICE OF NATIONAL CLIMATE CHANGE POLICY.

    (a) Establishment.--
            (1) In general.--There is established, within the Executive 
        Office of the President, the Office of National Climate Change 
        Policy.
            (2) Focus.--The White House Office shall have the focus of 
        achieving the long-term goal of the Strategy while minimizing 
        adverse short-term and long-term economic and social impacts.
            (3) Duties.--Consistent with paragraph (2), the White House 
        Office shall--
                    (A) establish policies, objectives, and priorities 
                for the Strategy;
                    (B) in accordance with subsection (d), establish 
                the Interagency Task Force to serve as the primary 
                mechanism through which the heads of Federal agencies 
                shall assist the Director of the White House Office in 
                developing and implementing the Strategy;
                    (C) to the maximum extent practicable, ensure that 
                the Strategy is based on objective, quantitative 
                analysis, drawing on the analytical capabilities of 
                Federal and State agencies, especially the Department 
                Office;
                    (D) advise the President concerning necessary 
                changes in organization, management, budgeting, and 
                personnel allocation of Federal agencies involved in 
                climate change response activities; and
                    (E) advise the President and notify a Federal 
                agency if the policies and discretionary programs of 
                the agency are not well aligned with, or are not 
                contributing effectively to, the long-term goal of the 
                Strategy.
    (b) Director of the White House Office.--
            (1) In general.--The White House Office shall be headed by 
        a Director, who shall report directly to the President, and 
        shall consult with the appropriate economic, environmental, 
        national security, domestic policy, science and technology and 
        other offices with the Executive Office of the President.
            (2) Appointment.--The Director of the White House Office 
        shall be a qualified individual appointed by the President, by 
        and with the advice and consent of the Senate.
            (3) Duties of the director of the white house office.--
                    (A) Strategy.--In accordance with section 1013, the 
                Director of the White House Office shall coordinate the 
                development and updating of the Strategy.
                    (B) Interagency task force.--The Director of the 
                White House Office shall serve as Chair of the 
                Interagency Task Force.
                    (C) Advisory duties.--
                            (i) Energy, economic, environmental, 
                        transportation, industrial, agricultural, 
                        building, forestry, and other programs.--The 
                        Director of the White House Office, using an 
                        integrated perspective considering the totality 
                        of actions in the United States, shall advise 
                        the President and the heads of Federal agencies 
                        on--
                                    (I) the extent to which United 
                                States energy, economic, environmental, 
                                transportation, industrial, 
                                agricultural, forestry, building, and 
                                other relevant programs are capable of 
                                producing progress on the long-term 
                                goal of the Strategy; and
                                    (II) the extent to which proposed 
                                or newly created energy, economic, 
                                environmental, transportation, 
                                industrial, agricultural, forestry, 
                                building, and other relevant programs 
                                positively or negatively affect the 
                                ability of the United States to achieve 
                                the long-term goal of the Strategy.
                            (ii) Tax, trade, and foreign policies.--The 
                        Director of the White House Office, using an 
                        integrated perspective considering the totality 
                        of actions in the United States, shall advise 
                        the President and the heads of Federal agencies 
                        on--
                                    (I) the extent to which the United 
                                States tax policy, trade policy, and 
                                foreign policy are capable of producing 
                                progress on the long-term goal of the 
                                Strategy; and
                                    (II) the extent to which proposed 
                                or newly created tax policy, trade 
                                policy, and foreign policy positively 
                                or negatively affect the ability of the 
                                United States to achieve the long-term 
                                goal of the Strategy.
                            (iii) International treaties.--The 
                        Secretary of State, acting in conjunction with 
                        the Interagency Task Force and using the 
                        analytical tools available to the White House 
                        Office, shall provide to the Director of the 
                        White House Office an opinion that--
                                    (I) specifies, to the maximum 
                                extent practicable, the economic and 
                                environmental costs and benefits of any 
                                proposed international treaties or 
                                components of treaties that have an 
                                influence on greenhouse gas management; 
                                and
                                    (II) assesses the extent to which 
                                the treaties advance the long-term goal 
                                of the Strategy, while minimizing 
                                adverse short-term and long-term 
                                economic and social impacts and 
                                considering other impacts.
                            (iv) Consultation.--
                                    (I) With members of interagency 
                                task force.--To the extent practicable 
                                and appropriate, the Director of the 
                                White House Office shall consult with 
                                all members of the Interagency Task 
                                Force before providing advice to the 
                                President.
                                    (II) With other interested 
                                parties.--The Director of the White 
                                House Office shall establish a process 
                                for obtaining the meaningful 
                                participation of Federal, State, 
                                tribal, and local government agencies, 
                                nongovernmental organizations, 
                                academia, scientific bodies, industry, 
                                the public, and other interested 
                                parties in the development and updating 
                                of the Strategy.
                    (D) Public education, awareness, outreach, and 
                information-sharing.--The Director of the White House 
                Office, to the maximum extent practicable, shall 
                promote public awareness, outreach, and information-
                sharing to further the understanding of the full range 
                of climate change-related issues.
            (4) Annual reports.--The Director of the White House 
        Office, in consultation with the Interagency Task Force and 
        other interested parties, shall prepare the annual reports for 
        submission by the President to Congress under section 1013(d).
            (5) Analysis.--During development of the Strategy, 
        preparation of the annual reports submitted under paragraph 
        (4), and provision of advice to the President and the heads of 
        Federal agencies, the Director of the White House Office shall 
        place significant emphasis on the use of objective, 
        quantitative analysis, taking into consideration any 
        uncertainties associated with the analysis.
    (c) Staff.--
            (1) In general.--The Director of the White House Office 
        shall employ a professional staff, including the staff 
        appointed under paragraph (2), of not more than 25 individuals 
        to carry out the duties of the White House Office.
            (2) Intergovernmental personnel and fellowships.--The 
        Director of the White House Office may use the authority 
        provided by the Intergovernmental Personnel Act of 1970 (42 
        U.S.C. 4701 et seq.) and subchapter VI of chapter 33 of title 
        5, United States Code, and fellowships, to obtain staff from 
        Federal agencies, academia, scientific bodies, or a National 
        Laboratory (as that term is defined in section 1203), for 
        appointments of a limited term.
    (d) Authorization of Appropriations.--
            (1) Use of available appropriations.--From funds made 
        available to Federal agencies for the fiscal year in which this 
        title is enacted, the President shall provide such sums as are 
        necessary to carry out the duties of the White House Office 
        under this title until the date on which funds are made 
        available under paragraph (2).
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated to the Executive Office of the President to 
        carry out the duties of the White House Office under this 
        subtitle, $5,000,000 for each of fiscal years 2003 through 
        2011, to remain available through September 30, 2011.
    (e) Interagency Task Force.--
            (1) In general.--The Director of the White House Office 
        shall establish the Interagency Task Force.
            (2) Composition.--The Interagency Task Force shall be 
        composed of--
                    (A) the Director of the White House Office, who 
                shall serve as Chair;
                    (B) the Secretary of State;
                    (C) the Secretary of Energy;
                    (D) the Secretary of Commerce;
                    (E) the Secretary of Transportation;
                    (F) the Secretary of Agriculture;
                    (G) the Administrator of the Environmental 
                Protection Agency;
                    (H) the Chairman of the Council of Economic 
                Advisers;
                    (I) the Chairman of the Council on Environmental 
                Quality;
                    (J) the Director of the Office of Science and 
                Technology Policy;
                    (K) the Director of the Office of Management and 
                Budget; and
                    (L) the heads of such other Federal agencies as the 
                President considers appropriate.
            (3) Strategy.--
                    (A) In general.--The Interagency Task Force shall 
                serve as the primary forum through which the Federal 
                agencies represented on the Interagency Task Force 
                jointly assist the Director of the White House Office 
                in--
                            (i) developing and updating the Strategy; 
                        and
                            (ii) preparing annual reports under section 
                        1013(d).
                    (B) Required elements.--In carrying out 
                subparagraph (A), the Interagency Task Force shall--
                            (i) take into account the long-term goal 
                        and other requirements of the Strategy 
                        specified in section 1013(a);
                            (ii) consult with State, tribal, and local 
                        government agencies, nongovernmental 
                        organizations, academia, scientific bodies, 
                        industry, the public, and other interested 
                        parties; and
                            (iii) build consensus around a Strategy 
                        that is based on strong scientific, technical, 
                        and economic analyses.
            (4) Working groups.--The Chair, in consultation with the 
        members of the Interagency Task Force, may establish such 
        topical working groups as are necessary to carry out the duties 
        of the Interagency Task Force and implement the Strategy, 
        taking into consideration the key elements of the Strategy. 
        Such working groups may be comprised of members of the 
        Interagency Task Force or their designees.
    (f) Staff.--In accordance with procedures established by the Chair 
of the Interagency Task Force, the Federal agencies represented on the 
Interagency Task Force shall provide staff from the agencies to support 
information, data collection, and analyses required by the Interagency 
Task Force.
    (g) Hearings.--Upon request of the Chair, the Interagency Task 
Force may hold such hearings, meet and act at such times and places, 
take such testimony, and receive such evidence as the Interagency Task 
Force considers to be appropriate.

SEC. 1015. OFFICE OF CLIMATE CHANGE TECHNOLOGY.

    (a) Establishment.--
            (1) In general.--There is established, within the 
        Department, the Office of Climate Change Technology.
            (2) Duties.--The Department Office shall--
                    (A) manage an energy technology research and 
                development program that directly supports the Strategy 
                by--
                            (i) focusing on high-risk, bold, 
                        breakthrough technologies that--
                                    (I) have significant promise of 
                                contributing to the long-term goal of 
                                the Strategy by--
                                            (aa) mitigating the 
                                        emissions of greenhouse gases;
                                            (bb) removing and 
                                        sequestering greenhouse gases 
                                        from emission streams; or
                                            (cc) removing and 
                                        sequestering greenhouse gases 
                                        from the atmosphere;
                                    (II) are not being addressed 
                                significantly by other Federal 
                                programs; and
                                    (III) would represent a substantial 
                                advance beyond technology available on 
                                the date of enactment of this subtitle;
                            (ii) forging fundamentally new research and 
                        development partnerships among various 
                        Department, other Federal, and State programs, 
                        particularly between basic science and energy 
                        technology programs, in cases in which such 
                        partnerships have significant potential to 
                        affect the ability of the United States to 
                        achieve the long-term goal of the Strategy at 
                        the lowest possible cost;
                            (iii) forging international research and 
                        development partnerships that are in the 
                        interests of the United States and make 
                        progress on achieving the long-term goal of the 
                        Strategy;
                            (iv) making available, through monitoring, 
                        experimentation, and analysis, data that are 
                        essential to proving the technical and economic 
                        viability of technology central to addressing 
                        climate change; and
                            (v) transferring research and development 
                        programs to other program offices of the 
                        Department once such a research and development 
                        program crosses the threshold of high-risk 
                        research and moves into the realm of more 
                        conventional technology development;
                    (B) through active participation in the Interagency 
                Task Force and utilization of the analytical 
                capabilities of the Department Office, share analyses 
                of alternative climate change strategies with other 
                agencies represented on the Interagency Task Force to 
                assist them in understanding--
                            (i) the scale of the climate change 
                        challenge; and
                            (ii) how actions of the Federal agencies on 
                        the Interagency Task Force positively or 
                        negatively contribute to climate change 
                        solutions;
                    (C) provide analytical support to the White House 
                Office, particularly in support of the development of 
                the Strategy and associated progress reporting;
                    (D) foster the development of tools, data, and 
                capabilities to ensure that--
                            (i) the United States has a robust 
                        capability for evaluating alternative climate 
                        change response scenarios; and
                            (ii) the Department Office provides long-
                        term analytical continuity during the terms of 
                        service of successive Presidents;
                    (E) identify the total contribution of all 
                Department programs to the Strategy; and
                    (F) advise the Secretary on all aspects of climate 
                change-related issues, including necessary changes in 
                Department organization, management, budgeting, and 
                personnel allocation in the programs involved in 
                climate change response-related activities.
            (3) Annual reports.--The Department Office shall prepare an 
        annual report for submission by the Secretary to Congress and 
        the White House Office that--
                    (A) assesses progress toward meeting the goals of 
                the energy technology research and development program 
                described in this section;
                    (B) assesses the activities of the Department 
                Office;
                    (C) assesses the contributions of all energy 
                technology research and development programs of the 
                Department (including science programs) to the long-
                term goal and other requirements of the Strategy; and
                    (D) make recommendations for actions by the 
                Department and other Federal agencies to address the 
                components of technology development that are necessary 
                to support the Strategy.
    (b) Director of the Department Office.--
            (1) In general.--The Department Office shall be headed by a 
        Director, who shall be a qualified individual appointed by the 
        President, and who shall be compensated at a rate provided for 
        level IV of the Executive Schedule under section 5315 of title 
        5, United States Code.
            (2) Reporting.--The Director of the Department Office shall 
        report directly to the Under Secretary for Energy and Science.
            (3) Vacancies.--A vacancy in the position of the Director 
        of the Department Office shall be filled in the same manner as 
        the original appointment was made.
    (c) Intergovernmental Personnel.--The Department Office may use the 
authority provided by the Intergovernmental Personnel Act of 1970 (42 
U.S.C. 4701 et seq.), subchapter VI of chapter 33 of title 5, United 
States Code, and other departmental personnel authorities, to obtain 
staff for appointments of a limited term.
    (d) Relationship to Other Department Programs.--Each project 
carried out by the Department Office shall be--
            (1) initiated only after consultation with one or more 
        other appropriate program offices of the Department that 
        support research and development in the areas relating to the 
        project;
            (2) managed by the Department Office; and
            (3) in the case of a project that reaches a sufficient 
        level of maturity, with the concurrence of the Department 
        Office and the appropriate office described in paragraph (1), 
        transferred to the appropriate office, along with the funds 
        necessary to continue the project to the point at which non-
        Federal funding can provide substantial support for the 
        project.
    (e) Collaboration and Cost Sharing.--
            (1) With other federal agencies.--Projects supported by the 
        Department Office may include participation of, and be 
        supported by, other Federal agencies that have a role in the 
        development, commercialization, or transfer of energy, 
        transportation, industrial, agricultural, forestry, or other 
        climate change-related technology.
            (2) With the private sector.--
                    (A) In general.--Notwithstanding section 1403, the 
                Department Office shall create an operating model that 
                allows for collaboration, division of effort, and cost 
                sharing with industry on individual climate change 
                response projects.
                    (B) Requirements.--Although cost sharing in some 
                cases may be appropriate, the Department Office shall 
                focus on long-term high-risk research and development 
                and should not make industrial partnerships or cost 
                sharing a requirement, if such a requirement would bias 
                the activities of the Department Office toward 
                incremental innovations.
                    (C) Reevaluation on transfer.--At such time as any 
                bold, breakthrough research and development program 
                reaches a sufficient level of technological maturity 
                such that the program is transferred to a program 
                office of the Department other than the Department 
                Office, the cost-sharing requirements and criteria 
                applicable to the program shall be reevaluated.
                    (D) Publication in federal register.--Each cost-
                sharing agreement entered into under this paragraph 
                shall be published in the Federal Register.
    (f) Analysis of Climate Change Strategy.--
            (1) In general.--The Department Office shall foster the 
        development and application of advanced computational tools, 
        data, and capabilities that, together with the capabilities of 
        other Federal agencies, support integrated assessment of 
        alternative climate change response scenarios and 
        implementation of the Strategy.
            (2) Programs.--
                    (A) In general.--The Department Office shall--
                            (i) develop and maintain core analytical 
                        competencies and complex, integrated 
                        computational modeling capabilities that, 
                        together with the capabilities of other Federal 
                        agencies, are necessary to support the design 
                        and implementation of the Strategy; and
                            (ii) track United States and international 
                        progress toward the long-term goal of the 
                        Strategy.
                    (B) International carbon dioxide sequestration 
                monitoring and data program.--In consultation with 
                Federal, State, academic, scientific, private sector, 
                nongovernmental, tribal, and international carbon 
                capture and sequestration technology programs, the 
                Department Office shall design and carry out an 
                international carbon dioxide sequestration monitoring 
                and data program to collect, analyze, and make 
                available the technical and economic data to 
                ascertain--
                            (i) whether engineered sequestration and 
                        terrestrial sequestration will be acceptable 
                        technologies from regulatory, economic, and 
                        international perspectives;
                            (ii) whether carbon dioxide sequestered in 
                        geological formations or ocean systems is 
                        stable and has inconsequential leakage rates on 
                        a geologic time-scale; and
                            (iii) the extent to which forest, 
                        agricultural, and other terrestrial systems are 
                        suitable carbon sinks.
            (3) Areas of expertise.--
                    (A) In general.--The Department Office shall 
                develop and maintain expertise in integrated 
                assessment, modeling, and related capabilities 
                necessary--
                            (i) to understand the relationship between 
                        natural, agricultural, industrial, energy, and 
                        economic systems;
                            (ii) to design effective research and 
                        development programs; and
                            (iii) to assist with the development and 
                        implementation of the Strategy.
                    (B) Technology transfer and diffusion.--The 
                expertise described in clause (i) shall include 
                knowledge of technology transfer and technology 
                diffusion in United States and foreign markets.
            (4) Dissemination of information.--The Department Office 
        shall ensure, to the maximum extent practicable, that technical 
        and scientific knowledge relating to greenhouse gas emission 
        reduction, avoidance, and sequestration is broadly disseminated 
        through publications, fellowships, and training programs.
            (5) Assessments.--In a manner consistent with the Strategy, 
        the Department shall conduct assessments of deployment of 
        climate-friendly technology.
            (6) Analysis.--During development of the Strategy, annual 
        reports submitted under subsection (a)(3), and advice to the 
        Secretary, the Director of the Department Office shall place 
        significant emphasis on the use of objective, quantitative 
        analysis, taking into consideration any associated 
        uncertainties.
    (g) Authorization of Appropriations.--
            (1) Use of available appropriations.--From funds made 
        available to Federal agencies for the fiscal year in which this 
        subtitle is enacted, the President shall provide such sums as 
        are necessary to carry out the duties of the Department Office 
        under this subtitle until the date on which funds are made 
        available under paragraph (2).
            (2) Authorization of appropriations.--There is authorized 
        to be appropriated to the Secretary, to carry out the duties of 
        the Department Office under this subtitle, $4,750,000,000 for 
        the period of fiscal years 2003 through 2011, to remain 
        available through September 30, 2011.
            (3) Additonal amounts.--Amounts authorized to be 
        appropriated under this section shall be in addition to--
                    (A) amounts made available to carry out the United 
                States Global Change Research Program under the Global 
                Change Research Act of 1990 (15 U.S.C. 2921 et seq.); 
                and
                    (B) amounts made available under other provisions 
                of law for energy research and development.

SEC. 1016. ADDITIONAL OFFICES AND ACTIVITIES.

    The Secretary of Agriculture, the Secretary of Transportation, the 
Secretary of Commerce, the Administrator of the Environmental 
Protection Agency, and the heads of other Federal agencies may 
establish such offices and carry out such activities, in addition to 
those established or authorized by this Act, as are necessary to carry 
out this Act.

               Subtitle C--Science and Technology Policy

SEC. 1021. GLOBAL CLIMATE CHANGE IN THE OFFICE OF SCIENCE AND 
              TECHNOLOGY POLICY.

    Section 101(b) of the National Science and Technology Policy, 
Organization, and Priorities Act of 1976 (42 U.S.C. 6601(b)) is 
amended--
            (1) by redesignating paragraphs (7) through (13) as 
        paragraphs (8) through (14), respectively; and
            (2) by inserting after paragraph (6) the following:
            ``(7) improving efforts to understand, assess, predict, 
        mitigate, and respond to global climate change;''.

SEC. 1022. DIRECTOR OF OFFICE OF SCIENCE AND TECHNOLOGY POLICY 
              FUNCTIONS.

    (a) Advise President on Global Climate Change.--Section 204(b)(1) 
of the National Science and Technology Policy, Organization, and 
Priorities Act of 1976 (42 U.S.C. 6613(b)(1)) is amended by inserting 
``global climate change,'' after ``to,''.
    (b) Advise Director of Office of National Climate Change Policy.--
Section 207 of that Act (42 U.S.C. 6616) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Advise Director of Office of National Climate Change 
Policy.--In carrying out this Act, the Director shall advise the 
Director of the Office of National Climate Change Policy on matters 
concerning science and technology as they relate to global climate 
change.''.

                  Subtitle D--Miscellaneous Provisions

SEC. 1031. ADDITIONAL INFORMATION FOR REGULATORY REVIEW.

    In each case that an agency prepares and submits a Statement of 
Energy Effects pursuant to Executive Order 13211 of May 18, 2001 
(relating to actions concerning regulations that significantly affect 
energy supply, distribution, or use), the agency shall also submit an 
estimate of the change in net annual greenhouse gas emissions resulting 
from the proposed significant energy action and any reasonable 
alternatives to the action.

SEC. 1032. GREENHOUSE GAS EMISSIONS FROM FEDERAL FACILITIES.

    (a) Methodology.--Not later than 1 year after the date of enactment 
of this section, the Secretary of Energy, Secretary of Agriculture, 
Secretary of Commerce, and Administrator of the Environmental 
Protection Agency shall publish a jointly developed methodology for 
preparing estimates of annual net greenhouse gas emissions from all 
federally owned, leased, or operated facilities and emission sources, 
including stationary, mobile, and indirect emissions as may be 
determined to be feasible.
    (b) Publication.--Not later than 18 months after the date of 
enactment of this section, and annually thereafter, the Secretary of 
Energy shall publish an estimate of annual net greenhouse gas emissions 
from all federally owned, leased, or operated facilities and emission 
sources, using the methodology published under subsection (a).

               TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

SEC. 1101. PURPOSE.

    The purpose of this title is to establish a greenhouse gas 
inventory, reductions registry, and information system that--
            (1) are complete, consistent, transparent, and accurate;
            (2) will create reliable and accurate data that can be used 
        by public and private entities to design efficient and 
        effective greenhouse gas emission reduction strategies; and
            (3) will acknowledge and encourage greenhouse gas emission 
        reductions.

SEC. 1102. DEFINITIONS.

    In this title:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Baseline.--The term ``baseline'' means the historic 
        greenhouse gas emission levels of an entity, as adjusted upward 
        by the designated agency to reflect actual reductions that are 
        verified in accordance with--
                    (A) regulations promulgated under section 
                1104(c)(1); and
                    (B) relevant standards and methods developed under 
                this title.
            (3) Database.--The term ``database'' means the National 
        Greenhouse Gas Database established under section 1104.
            (4) Designated agency.--The term ``designated agency'' 
        means a department or agency to which responsibility for a 
        function or program is assigned under the memorandum of 
        agreement entered into under section 1103(a).
            (5) Direct emissions.--The term ``direct emissions'' means 
        greenhouse gas emissions by an entity from a facility that is 
        owned or controlled by that entity.
            (6) Entity.--The term ``entity'' means--
                    (A) a person located in the United States; or
                    (B) a public or private entity, to the extent that 
                the entity operates in the United States.
            (7) Facility.--The term ``facility'' means--
                    (A) all buildings, structures, or installations 
                located on any 1 or more contiguous or adjacent 
                properties of an entity in the United States; and
                    (B) a fleet of 20 or more motor vehicles under the 
                common control of an entity.
            (8) Greenhouse gas.--The term ``greenhouse gas'' means--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) hydrofluorocarbons;
                    (E) perfluorocarbons;
                    (F) sulfur hexafluoride; and
                    (G) any other anthropogenic climate-forcing 
                emissions with significant ascertainable global warming 
                potential, as--
                            (i) recommended by the National Academy of 
                        Sciences under section 1107(b)(3); and
                            (ii) determined in regulations promulgated 
                        under section 1104(c)(1) (or revisions to the 
                        regulations) to be appropriate and practicable 
                        for coverage under this title.
            (9) Indirect emissions.--The term ``indirect emissions'' 
        means greenhouse gas emissions that--
                    (A) are a result of the activities of an entity; 
                but
                    (B)(i) are emitted from a facility owned or 
                controlled by another entity; and
                    (ii) are not reported as direct emissions by the 
                entity the activities of which resulted in the 
                emissions.
            (10) Registry.--The term ``registry'' means the registry of 
        greenhouse gas emission reductions established as a component 
        of the database under section 1104(b)(2).
            (11) Sequestration.--
                    (A) In general.--The term ``sequestration'' means 
                the capture, long-term separation, isolation, or 
                removal of greenhouse gases from the atmosphere.
                    (B) Inclusions.--The term ``sequestration'' 
                includes--
                            (i) soil carbon sequestration;
                            (ii) agricultural and conservation 
                        practices;
                            (iii) reforestation;
                            (iv) forest preservation;
                            (v) maintenance of an underground 
                        reservoir; and
                            (vi) any other appropriate biological or 
                        geological method of capture, isolation, or 
                        removal of greenhouse gases from the 
                        atmosphere, as determined by the Administrator.

SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the President, acting through the Director of the Office 
of National Climate Change Policy, shall direct the Secretary of 
Energy, the Secretary of Commerce, the Secretary of Agriculture, the 
Secretary of Transportation, and the Administrator to enter into a 
memorandum of agreement under which those heads of Federal agencies 
will--
            (1) recognize and maintain statutory and regulatory 
        authorities, functions, and programs that--
                    (A) are established as of the date of enactment of 
                this Act under other law;
                    (B) provide for the collection of data relating to 
                greenhouse gas emissions and effects; and
                    (C) are necessary for the operation of the 
                database;
            (2)(A) distribute additional responsibilities and 
        activities identified under this title to Federal departments 
        or agencies in accordance with the missions and expertise of 
        those departments and agencies; and
            (B) maximize the use of available resources of those 
        departments and agencies; and
            (3) provide for the comprehensive collection and analysis 
        of data on greenhouse gas emissions relating to product use 
        (including the use of fossil fuels and energy-consuming 
        appliances and vehicles).
    (b) Minimum Requirements.--The memorandum of agreement entered into 
under subsection (a) shall, at a minimum, retain the following 
functions for the designated agencies:
            (1) Department of energy.--The Secretary of Energy shall be 
        primarily responsible for developing, maintaining, and 
        verifying the registry and the emission reductions reported 
        under section 1605(b) of the Energy Policy Act of 1992 (42 
        U.S.C. 13385(b)).
            (2) Department of commerce.--The Secretary of Commerce 
        shall be primarily responsible for the development of--
                    (A) measurement standards for the monitoring of 
                emissions; and
                    (B) verification technologies and methods to ensure 
                the maintenance of a consistent and technically 
                accurate record of emissions, emission reductions, and 
                atmospheric concentrations of greenhouse gases for the 
                database.
            (3) Environmental protection agency.--The Administrator 
        shall be primarily responsible for--
                    (A) emissions monitoring, measurement, 
                verification, and data collection under this title and 
                title IV (relating to acid deposition control) and 
                title VIII of the Clean Air Act (42 U.S.C. 7651 et 
                seq.), including mobile source emissions information 
                from implementation of the corporate average fuel 
                economy program under chapter 329 of title 49, United 
                States Code; and
                    (B) responsibilities of the Environmental 
                Protection Agency relating to completion of the 
                national inventory for compliance with the United 
                Nations Framework Convention on Climate Change, done at 
                New York on May 9, 1992.
            (4) Department of agriculture.--The Secretary of 
        Agriculture shall be primarily responsible for--
                    (A) developing measurement techniques for--
                            (i) soil carbon sequestration; and
                            (ii) forest preservation and reforestation 
                        activities; and
                    (B) providing technical advice relating to 
                biological carbon sequestration measurement and 
                verification standards for measuring greenhouse gas 
                emission reductions or offsets.
    (c) Draft Memorandum of Agreement.--Not later than 15 months after 
the date of enactment of this Act, the President, acting through the 
Director of the Office of National Climate Change Policy, shall publish 
in the Federal Register, and solicit comments on, a draft version of 
the memorandum of agreement described in subsection (a).
    (d) No Judicial Review.--The final version of the memorandum of 
agreement shall not be subject to judicial review.

SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

    (a) Establishment.--As soon as practicable after the date of 
enactment of this Act, the designated agencies, in consultation with 
the private sector and nongovernmental organizations, shall jointly 
establish, operate, and maintain a database, to be known as the 
``National Greenhouse Gas Database'', to collect, verify, and analyze 
information on greenhouse gas emissions by entities.
    (b) National Greenhouse Gas Database Components.--The database 
shall consist of--
            (1) an inventory of greenhouse gas emissions; and
            (2) a registry of greenhouse gas emission reductions.
    (c) Comprehensive System.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the designated agencies shall jointly 
        promulgate regulations to implement a comprehensive system for 
        greenhouse gas emissions reporting, inventorying, and 
        reductions registration.
            (2) Requirements.--The designated agencies shall ensure, to 
        the maximum extent practicable, that--
                    (A) the comprehensive system described in paragraph 
                (1) is designed to--
                            (i) maximize completeness, transparency, 
                        and accuracy of information reported; and
                            (ii) minimize costs incurred by entities in 
                        measuring and reporting greenhouse gas 
                        emissions; and
                    (B) the regulations promulgated under paragraph (1) 
                establish procedures and protocols necessary--
                            (i) to prevent the reporting of some or all 
                        of the same greenhouse gas emissions or 
                        emission reductions by more than 1 reporting 
                        entity;
                            (ii) to provide for corrections to errors 
                        in data submitted to the database;
                            (iii) to provide for adjustment to data by 
                        reporting entities that have had a significant 
                        organizational change (including mergers, 
                        acquisitions, and divestiture), in order to 
                        maintain comparability among data in the 
                        database over time;
                            (iv) to provide for adjustments to reflect 
                        new technologies or methods for measuring or 
                        calculating greenhouse gas emissions; and
                            (v) to account for changes in registration 
                        of ownership of emission reductions resulting 
                        from a voluntary private transaction between 
                        reporting entities.
            (3) Baseline identification and protection.--Through 
        regulations promulgated under paragraph (1), the designated 
        agencies shall develop and implement a system that provides--
                    (A) for the provision of unique serial numbers to 
                identify the verified emission reductions made by an 
                entity relative to the baseline of the entity;
                    (B) for the tracking of the reductions associated 
                with the serial numbers; and
                    (C) that the reductions may be applied, as 
                determined to be appropriate by any Act of Congress 
                enacted after the date of enactment of this Act, toward 
                a Federal requirement under such an Act that is imposed 
                on the entity for the purpose of reducing greenhouse 
                gas emissions.

SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.

    (a) In General.--An entity that participates in the registry shall 
meet the requirements described in subsection (b).
    (b) Requirements.--
            (1) In general.--The requirements referred to in subsection 
        (a) are that an entity (other than an entity described in 
        paragraph (2)) shall--
                    (A) establish a baseline (including all of the 
                entity's greenhouse gas emissions on an entity-wide 
                basis); and
                    (B) submit the report described in subsection 
                (c)(1).
            (2) Requirements applicable to entities entering into 
        certain agreements.--An entity that enters into an agreement 
        with a participant in the registry for the purpose of a carbon 
        sequestration project shall not be required to comply with the 
        requirements specified in paragraph (1) unless that entity is 
        required to comply with the requirements by reason of an 
        activity other than the agreement.
    (c) Reports.--
            (1) Required report.--Not later than April 1 of the third 
        calendar year that begins after the date of enactment of this 
        Act, and not later than April 1 of each calendar year 
        thereafter, subject to paragraph (3), an entity described in 
        subsection (a) shall submit to each appropriate designated 
        agency a report that describes, for the preceding calendar 
        year, the entity-wide greenhouse gas emissions (as reported at 
        the facility level), including--
                    (A) the total quantity of each greenhouse gas 
                emitted, expressed in terms of mass and in terms of the 
                quantity of carbon dioxide equivalent;
                    (B) an estimate of the greenhouse gas emissions 
                from fossil fuel combusted by products manufactured and 
                sold by the entity in the previous calendar year, 
                determined over the average lifetime of those products; 
                and
                    (C) such other categories of emissions as the 
                designated agency determines in the regulations 
                promulgated under section 1104(c)(1) may be practicable 
                and useful for the purposes of this title, such as--
                            (i) direct emissions from stationary 
                        sources;
                            (ii) indirect emissions from imported 
                        electricity, heat, and steam;
                            (iii) process and fugitive emissions; and
                            (iv) production or importation of 
                        greenhouse gases.
            (2) Voluntary reporting.--An entity described in subsection 
        (a) may (along with establishing a baseline and reporting 
        reductions under this section)--
                    (A) submit a report described in paragraph (1) 
                before the date specified in that paragraph for the 
                purposes of achieving and commoditizing greenhouse gas 
                reductions through use of the registry; and
                    (B) submit to any designated agency, for inclusion 
                in the registry, information that has been verified in 
                accordance with regulations promulgated under section 
                1104(c)(1) and that relates to--
                            (i) with respect to the calendar year 
                        preceding the calendar year in which the 
                        information is submitted, and with respect to 
                        any greenhouse gas emitted by the entity--
                                    (I) project reductions from 
                                facilities owned or controlled by the 
                                reporting entity in the United States;
                                    (II) transfers of project 
                                reductions to and from any other 
                                entity;
                                    (III) project reductions and 
                                transfers of project reductions outside 
                                the United States;
                                    (IV) other indirect emissions that 
                                are not required to be reported under 
                                paragraph (1); and
                                    (V) product use phase emissions;
                            (ii) with respect to greenhouse gas 
                        emission reductions activities of the entity 
                        that have been carried out during or after 
                        1990, verified in accordance with regulations 
                        promulgated under section 1104(c)(1), and 
                        submitted to 1 or more designated agencies 
                        before the date that is 4 years after the date 
                        of enactment of this Act, any greenhouse gas 
                        emission reductions that have been reported or 
                        submitted by an entity under--
                                    (I) section 1605(b) of the Energy 
                                Policy Act of 1992 (42 U.S.C. 
                                13385(b)); or
                                    (II) any other Federal or State 
                                voluntary greenhouse gas reduction 
                                program; and
                            (iii) any project or activity for the 
                        reduction of greenhouse gas emissions or 
                        sequestration of a greenhouse gas that is 
                        carried out by the entity, including a project 
                        or activity relating to--
                                    (I) fuel switching;
                                    (II) energy efficiency 
                                improvements;
                                    (III) use of renewable energy;
                                    (IV) use of combined heat and power 
                                systems;
                                    (V) management of cropland, 
                                grassland, or grazing land;
                                    (VI) a forestry activity that 
                                increases forest carbon stocks or 
                                reduces forest carbon emissions;
                                    (VII) carbon capture and storage;
                                    (VIII) methane recovery;
                                    (IX) greenhouse gas offset 
                                investment; and
                                    (X) any other practice for 
                                achieving greenhouse gas reductions as 
                                recognized by 1 or more designated 
                                agencies.
            (3) Exemptions from reporting.--
                    (A) In general.--If the Director of the Office of 
                National Climate Change Policy determines under section 
                1108(b) that the reporting requirements under paragraph 
                (1) shall apply to all entities (other than entities 
                exempted by this paragraph), regardless of 
                participation or nonparticipation in the registry, an 
                entity shall be required to submit reports under 
                paragraph (1) only if, in any calendar year after the 
                date of enactment of this Act--
                            (i) the total greenhouse gas emissions of 
                        at least 1 facility owned by the entity exceeds 
                        10,000 metric tons of carbon dioxide equivalent 
                        (or such greater quantity as may be established 
                        by a designated agency by regulation); or
                            (ii)(I) the total quantity of greenhouse 
                        gases produced, distributed, or imported by the 
                        entity exceeds 10,000 metric tons of carbon 
                        dioxide equivalent (or such greater quantity as 
                        may be established by a designated agency by 
                        regulation); and
                            (II) the entity is not a feedlot or other 
                        farming operation (as defined in section 101 of 
                        title 11, United States Code).
                    (B) Entities already reporting.--
                            (i) In general.--An entity that, as of the 
                        date of enactment of this Act, is required to 
                        report carbon dioxide emissions data to a 
                        Federal agency shall not be required to re-
                        report that data for the purposes of this 
                        title.
                            (ii) Review of participation.--For the 
                        purpose of section 1108, emissions reported 
                        under clause (i) shall be considered to be 
                        reported by the entity to the registry.
            (4) Provision of verification information by reporting 
        entities.--Each entity that submits a report under this 
        subsection shall provide information sufficient for each 
        designated agency to which the report is submitted to verify, 
        in accordance with measurement and verification methods and 
        standards developed under section 1106, that the greenhouse gas 
        report of the reporting entity--
                    (A) has been accurately reported; and
                    (B) in the case of each voluntary report under 
                paragraph (2), represents--
                            (i) actual reductions in direct greenhouse 
                        gas emissions--
                                    (I) relative to historic emission 
                                levels of the entity; and
                                    (II) net of any increases in--
                                            (aa) direct emissions; and
                                            (bb) indirect emissions 
                                        described in paragraph 
                                        (1)(C)(ii); or
                            (ii) actual increases in net sequestration.
            (5) Failure to submit report.--An entity that participates 
        or has participated in the registry and that fails to submit a 
        report required under this subsection shall be prohibited from 
        including emission reductions reported to the registry in the 
        calculation of the baseline of the entity in future years.
            (6) Independent third-party verification.--To meet the 
        requirements of this section and section 1106, a entity that is 
        required to submit a report under this section may--
                    (A) obtain independent third-party verification; 
                and
                    (B) present the results of the third-party 
                verification to each appropriate designated agency.
            (7) Availability of data.--
                    (A) In general.--The designated agencies shall 
                ensure, to the maximum extent practicable, that 
                information in the database is--
                            (i) published;
                            (ii) accessible to the public; and
                            (iii) made available in electronic format 
                        on the Internet.
                    (B) Exception.--Subparagraph (A) shall not apply in 
                any case in which the designated agencies determine 
                that publishing or otherwise making available 
                information described in that subparagraph poses a risk 
                to national security.
            (8) Data infrastructure.--The designated agencies shall 
        ensure, to the maximum extent practicable, that the database 
        uses, and is integrated with, Federal, State, and regional 
        greenhouse gas data collection and reporting systems in effect 
        as of the date of enactment of this Act.
            (9) Additional issues to be considered.--In promulgating 
        the regulations under section 1104(c)(1) and implementing the 
        database, the designated agencies shall take into consideration 
        a broad range of issues involved in establishing an effective 
        database, including--
                    (A) the appropriate units for reporting each 
                greenhouse gas;
                    (B) the data and information systems and measures 
                necessary to identify, track, and verify greenhouse gas 
                emission reductions in a manner that will encourage the 
                development of private sector trading and exchanges;
                    (C) the greenhouse gas reduction and sequestration 
                methods and standards applied in other countries, as 
                applicable or relevant;
                    (D) the extent to which available fossil fuels, 
                greenhouse gas emissions, and greenhouse gas production 
                and importation data are adequate to implement the 
                database;
                    (E) the differences in, and potential uniqueness 
                of, the facilities, operations, and business and other 
                relevant practices of persons and entities in the 
                private and public sectors that may be expected to 
                participate in the registry; and
                    (F) the need of the registry to maintain valid and 
                reliable information on baselines of entities so that, 
                in the event of any future action by Congress to 
                require entities, individually or collectively, to 
                reduce greenhouse gas emissions, Congress will be 
                able--
                            (i) to take into account that information; 
                        and
                            (ii) to avoid enacting legislation that 
                        penalizes entities for achieving and reporting 
                        reductions.
    (d) Annual Report.--The designated agencies shall jointly publish 
an annual report that--
            (1) describes the total greenhouse gas emissions and 
        emission reductions reported to the database during the year 
        covered by the report;
            (2) provides entity-by-entity and sector-by-sector analyses 
        of the emissions and emission reductions reported;
            (3) describes the atmospheric concentrations of greenhouse 
        gases; and
            (4) provides a comparison of current and past atmospheric 
        concentrations of greenhouse gases.

SEC. 1106. MEASUREMENT AND VERIFICATION.

    (a) Standards.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the designated agencies shall jointly 
        develop comprehensive measurement and verification methods and 
        standards to ensure a consistent and technically accurate 
        record of greenhouse gas emissions, emission reductions, 
        sequestration, and atmospheric concentrations for use in the 
        registry.
            (2) Requirements.--The methods and standards developed 
        under paragraph (1) shall address the need for--
                    (A) standardized measurement and verification 
                practices for reports made by all entities 
                participating in the registry, taking into account--
                            (i) protocols and standards in use by 
                        entities desiring to participate in the 
                        registry as of the date of development of the 
                        methods and standards under paragraph (1);
                            (ii) boundary issues, such as leakage and 
                        shifted use;
                            (iii) avoidance of double counting of 
                        greenhouse gas emissions and emission 
                        reductions; and
                            (iv) such other factors as the designated 
                        agencies determine to be appropriate;
                    (B) measurement and verification of actions taken 
                to reduce, avoid, or sequester greenhouse gas 
                emissions;
                    (C) in coordination with the Secretary of 
                Agriculture, measurement of the results of the use of 
                carbon sequestration and carbon recapture technologies, 
                including--
                            (i) organic soil carbon sequestration 
                        practices; and
                            (ii) forest preservation and reforestation 
                        activities that adequately address the issues 
                        of permanence, leakage, and verification;
                    (D) such other measurement and verification 
                standards as the Secretary of Commerce, the Secretary 
                of Agriculture, the Administrator, and the Secretary of 
                Energy determine to be appropriate; and
                    (E) other factors that, as determined by the 
                designated agencies, will allow entities to adequately 
                establish a fair and reliable measurement and reporting 
                system.
    (b) Review and Revision.--The designated agencies shall 
periodically review, and revise as necessary, the methods and standards 
developed under subsection (a).
    (c) Public Participation.--The Secretary of Commerce shall--
            (1) make available to the public for comment, in draft form 
        and for a period of at least 90 days, the methods and standards 
        developed under subsection (a); and
            (2) after the 90-day period referred to in paragraph (1), 
        in coordination with the Secretary of Energy, the Secretary of 
        Agriculture, and the Administrator, adopt the methods and 
        standards developed under subsection (a) for use in 
        implementing the database.
    (d) Experts and Consultants.--
            (1) In general.--The designated agencies may obtain the 
        services of experts and consultants in the private and 
        nonprofit sectors in accordance with section 3109 of title 5, 
        United States Code, in the areas of greenhouse gas measurement, 
        certification, and emission trading.
            (2) Available arrangements.--In obtaining any service 
        described in paragraph (1), the designated agencies may use any 
        available grant, contract, cooperative agreement, or other 
        arrangement authorized by law.

SEC. 1107. INDEPENDENT REVIEWS.

    (a) In General.--Not later than 5 years after the date of enactment 
of this Act, and every 3 years thereafter, the Comptroller General of 
the United States shall submit to Congress a report that--
            (1) describes the efficacy of the implementation and 
        operation of the database; and
            (2) includes any recommendations for improvements to this 
        title and programs carried out under this title--
                    (A) to achieve a consistent and technically 
                accurate record of greenhouse gas emissions, emission 
                reductions, and atmospheric concentrations; and
                    (B) to achieve the purposes of this title.
    (b) Review of Scientific Methods.--The designated agencies shall 
enter into an agreement with the National Academy of Sciences under 
which the National Academy of Sciences shall--
            (1) review the scientific methods, assumptions, and 
        standards used by the designated agencies in implementing this 
        title;
            (2) not later than 4 years after the date of enactment of 
        this Act, submit to Congress a report that describes any 
        recommendations for improving--
                    (A) those methods and standards; and
                    (B) related elements of the programs, and structure 
                of the database, established by this title; and
            (3) regularly review and update as appropriate the list of 
        anthropogenic climate-forcing emissions with significant global 
        warming potential described in section 1102(8)(G).

SEC. 1108. REVIEW OF PARTICIPATION.

    (a) In General.--Not later than 5 years after the date of enactment 
of this Act, the Director of the Office of National Climate Change 
Policy shall determine whether the reports submitted to the registry 
under section 1105(c)(1) represent less than 60 percent of the national 
aggregate anthropogenic greenhouse gas emissions.
    (b) Increased Applicability of Requirements.--If the Director of 
the Office of National Climate Change Policy determines under 
subsection (a) that less than 60 percent of the aggregate national 
anthropogenic greenhouse gas emissions are being reported to the 
registry--
            (1) the reporting requirements under section 1105(c)(1) 
        shall apply to all entities (except entities exempted under 
        section 1105(c)(3)), regardless of any participation or 
        nonparticipation by the entities in the registry; and
            (2) each entity shall submit a report described in section 
        1105(c)(1)--
                    (A) not later than the earlier of--
                            (i) April 30 of the calendar year 
                        immediately following the year in which the 
                        Director of the Office of National Climate 
                        Change Policy makes the determination under 
                        subsection (a); or
                            (ii) the date that is 1 year after the date 
                        on which the Director of the Office of National 
                        Climate Change Policy makes the determination 
                        under subsection (a); and
                    (B) annually thereafter.
    (c) Resolution of Disapproval.--For the purposes of this section, 
the determination of the Director of the Office of National Climate 
Change Policy under subsection (a) shall be considered to be a major 
rule (as defined in section 804(2) of title 5, United States Code) 
subject to the congressional disapproval procedure under section 802 of 
title 5, United States Code.

SEC. 1109. ENFORCEMENT.

    If an entity that is required to report greenhouse gas emissions 
under section 1105(c)(1) or 1108 fails to comply with that requirement, 
the Attorney General may, at the request of the designated agencies, 
bring a civil action in United States district court against the entity 
to impose on the entity a civil penalty of not more than $25,000 for 
each day for which the entity fails to comply with that requirement.

SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMONIZATION.

    Not later than 3 years after the date of enactment of this Act, the 
President shall submit to Congress a report that describes any 
modifications to this title or any other provision of law that are 
necessary to improve the accuracy or operation of the database and 
related programs under this title.

SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this title.

       DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

          TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

SEC. 1201. SHORT TITLE.

    This division may be cited as the ``Energy Science and Technology 
Enhancement Act of 2002''.

SEC. 1202. FINDINGS.

    The Congress finds the following:
            (1) A coherent national energy strategy requires an energy 
        research and development program that supports basic energy 
        research and provides mechanisms to develop, demonstrate, and 
        deploy new energy technologies in partnership with industry.
            (2) An aggressive national energy research, development, 
        demonstration, and technology deployment program is an integral 
        part of a national climate change strategy, because it can 
        reduce--
                    (A) United States energy intensity by 1.9 percent 
                per year from 1999 to 2020;
                    (B) United States energy consumption in 2020 by 8 
                quadrillion Btu from otherwise expected levels; and
                    (C) United States carbon dioxide emissions from 
                expected levels by 166 million metric tons in carbon 
                equivalent in 2020.
            (3) An aggressive national energy research, development, 
        demonstration, and technology deployment program can help 
        maintain domestic United States production of energy, increase 
        United States hydrocarbon reserves by 14 percent, and lower 
        natural gas prices by 20 percent, compared to estimates for 
        2020.
            (4) An aggressive national energy research, development, 
        demonstration, and technology deployment program is needed if 
        United States suppliers and manufacturers are to compete in 
        future markets for advanced energy technologies.

SEC. 1203. DEFINITIONS.

    In this title:
            (1) Department.--The term ``Department'' means the 
        Department of Energy.
            (2) Departmental mission.--The term ``departmental 
        mission'' means any of the functions vested in the Secretary of 
        Energy by the Department of Energy Organization Act (42 U.S.C. 
        7101 et seq.) or other law.
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given that 
        term in section 1201(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1141(a));
            (4) National laboratory.--The term ``National Laboratory'' 
        means any of the following multipurpose laboratories owned by 
        the Department of Energy--
                    (A) Argonne National Laboratory;
                    (B) Brookhaven National Laboratory;
                    (C) Idaho National Engineering and Environmental 
                Laboratory;
                    (D) Lawrence Berkeley National Laboratory;
                    (E) Lawrence Livermore National Laboratory;
                    (F) Los Alamos National Laboratory;
                    (G) National Energy Technology Laboratory;
                    (H) National Renewable Energy Laboratory;
                    (I) Oak Ridge National Laboratory;
                    (J) Pacific Northwest National Laboratory; or
                    (K) Sandia National Laboratory.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (6) Technology deployment.--The term ``technology 
        deployment'' means activities to promote acceptance and 
        utilization of technologies in commercial application, 
        including activities undertaken pursuant to section 7 of the 
        Federal Nonnuclear Energy Research and Development Act of 1974 
        (42 U.S.C. 5906) or section 6 of the Renewable Energy and 
        Energy Efficiency Technology Competitiveness Act of 1989 (42 
        U.S.C. 12007).

SEC. 1204. CONSTRUCTION WITH OTHER LAWS.

    Except as otherwise provided in this title and title XIV, the 
Secretary shall carry out the research, development, demonstration, and 
technology deployment programs authorized by this title in accordance 
with the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.), the 
Federal Nonnuclear Research and Development Act of 1974 (42 U.S.C. 5901 
et seq.), the Energy Policy Act of 1992 (42 U.S.C. 13201 et seq.), or 
any other Act under which the Secretary is authorized to carry out such 
activities.

                     Subtitle A--Energy Efficiency

SEC. 1211. ENHANCED ENERGY EFFICIENCY RESEARCH AND DEVELOPMENT.

    (a) Program Direction.--The Secretary shall conduct balanced energy 
research, development, demonstration, and technology deployment 
programs to enhance energy efficiency in buildings, industry, power 
technologies, and transportation.
    (b) Program Goals.--
            (1) Energy-efficient housing.--The goal of the energy-
        efficient housing program shall be to develop, in partnership 
        with industry, enabling technologies (including lighting 
        technologies), designs, production methods, and supporting 
        activities that will, by 2010--
                    (A) cut the energy use of new housing by 50 
                percent, and
                    (B) reduce energy use in existing homes by 30 
                percent.
            (2) Industrial energy efficiency.--The goal of the 
        industrial energy efficiency program shall be to develop, in 
        partnership with industry, enabling technologies, designs, 
        production methods, and supporting activities that will, by 
        2010, enable energy-intensive industries such as the following 
        industries to reduce their energy intensity by at least 25 
        percent--
                    (A) the wood product manufacturing industry;
                    (B) the pulp and paper industry;
                    (C) the petroleum and coal products manufacturing 
                industry;
                    (D) the mining industry;
                    (E) the chemical manufacturing industry;
                    (F) the glass and glass product manufacturing 
                industry;
                    (G) the iron and steel mills and ferroalloy 
                manufacturing industry;
                    (H) the primary aluminum production industry;
                    (I) the foundries industry; and
                    (J) United States agriculture.
            (3) Transportation energy efficiency.--The goal of the 
        transportation energy efficiency program shall be to develop, 
        in partnership with industry, technologies that will enable the 
        achievement--
                    (A) by 2010, passenger automobiles with a fuel 
                economy of 80 miles per gallon;
                    (B) by 2010, light trucks (classes 1 and 2a) with a 
                fuel economy of 60 miles per gallon;
                    (C) by 2010, medium trucks and buses (classes 2b 
                through 6 and class 8 transit buses) with a fuel 
                economy, in ton-miles per gallon, that is three times 
                that of year 2000 equivalent vehicles;
                    (D) by 2010, heavy trucks (classes 7 and 8) with a 
                fuel economy, in ton-miles per gallon, that is two 
                times that of year 2000 equivalent vehicles; and
                    (E) by 2015, the production of fuel-cell powered 
                passenger vehicles with a fuel economy of 110 miles per 
                gallon.
            (4) Energy efficient distributed generation.--The goals of 
        the energy efficient on-site generation program shall be to 
        help remove environmental and regulatory barriers to on-site, 
        or distributed, generation and combined heat and power by 
        developing technologies by 2015 that achieve--
                    (A) electricity generating efficiencies greater 
                than 40 percent for on-site generation technologies 
                based upon natural gas, including fuel cells, 
                microturbines, reciprocating engines and industrial gas 
                turbines;
                    (B) combined heat and power total (electric and 
                thermal) efficiencies of more than 85 percent;
                    (C) fuel flexibility to include hydrogen, biofuels 
                and natural gas;
                    (D) near zero emissions of pollutants that form 
                smog and acid rain;
                    (E) reduction of carbon dioxide emissions by at 
                least 40 percent;
                    (F) packaged system integration at end user 
                facilities providing complete services in heating, 
                cooling, electricity and air quality; and
                    (G) increased reliability for the consumer and 
                greater stability for the national electricity grid.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out research, development, 
demonstration, and technology deployment activities under this 
subtitle--
            (1) $700,000,000 for fiscal year 2003;
            (2) $784,000,000 for fiscal year 2004;
            (3) $878,000,000 for fiscal year 2005; and
            (4) $983,000,000 for fiscal year 2006.
    (d) Limitation on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (c) may be used for the following programs 
of the Department--
            (1) Weatherization Assistance Program;
            (2) State Energy Program; or
            (3) Federal Energy Management Program.

SEC. 1212. ENERGY EFFICIENCY SCIENCE INITIATIVE.

    (a) Establishment and Authorization of Appropriations.--From 
amounts authorized under section 1211(c), there are authorized to be 
appropriated not more than $50,000,000 in any fiscal year, for an 
Energy Efficiency Science Initiative to be managed by the Assistant 
Secretary in the Department with responsibility for energy conservation 
under section 203(a)(9) of the Department of Energy Organization Act 
(42 U.S.C. 7133(a)(9)), in consultation with the Director of the Office 
of Science, for grants to be competitively awarded and subject to peer 
review for research relating to energy efficiency.
    (b) Report.--The Secretary of Energy shall submit to the Committee 
on Science and the Committee on Appropriations of the United States 
House of Representatives, and to the Committee on Energy and Natural 
Resources and the Committee on Appropriations of the United States 
Senate, an annual report on the activities of the Energy Efficiency 
Science Initiative, including a description of the process used to 
award the funds and an explanation of how the research relates to 
energy efficiency.

SEC. 1213. NEXT GENERATION LIGHTING INITIATIVE.

    (a) Establishment.--There is established in the Department a Next 
Generation Lighting Initiative to research, develop, and conduct 
demonstration activities on advanced solid-state lighting technologies 
based on white light emitting diodes.
    (b) Objectives.--
            (1) In general.--The objectives of the initiative shall be 
        to develop, by 2011, advanced solid-state lighting technologies 
        based on white light emitting diodes that, compared to 
        incandescent and fluorescent lighting technologies, are--
                    (A) longer lasting;
                    (B) more energy-efficient; and
                    (C) cost-competitive.
            (2) Inorganic white light emitting diode.--The objective of 
        the initiative with respect to inorganic white light emitting 
        diodes shall be to develop an inorganic white light emitting 
        diode that has an efficiency of 160 lumens per watt and a 10-
        year lifetime.
            (3) Organic white light emitting diode.--The objective of 
        the initiative with respect to organic white light emitting 
        diodes shall be to develop an organic white light emitting 
        diode with an efficiency of 100 lumens per watt with a 5-year 
        lifetime that--
                    (A) illuminates over a full color spectrum;
                    (B) covers large areas over flexible surfaces; and
                    (C) does not contain harmful pollutants typical of 
                fluorescent lamps such as mercury.
    (c) Consortium.--
            (1) In general.--The Secretary shall initiate and manage 
        basic and manufacturing-related research on advanced solid-
        state lighting technologies based on white light emitting 
        diodes for the initiative, in cooperation with the Next 
        Generation Lighting Initiative Consortium.
            (2) Composition.--The consortium shall be composed of 
        firms, national laboratories, and other entities so that the 
        consortium is representative of the United States solid-state 
        lighting research, development, and manufacturing expertise as 
        a whole.
            (3) Funding.--The consortium shall be funded by--
                    (A) participation fees; and
                    (B) grants provided under subsection (e)(1).
            (4) Eligibility.--To be eligible to receive a grant under 
        subsection (e)(1), the consortium shall--
                    (A) enter into a consortium participation agreement 
                that--
                            (i) is agreed to by all participants; and
                            (ii) describes the responsibilities of 
                        participants, participation fees, and the scope 
                        of research activities; and
                    (B) develop an annual program plan.
            (5) Intellectual property.--Participants in the consortium 
        shall have royalty-free nonexclusive rights to use intellectual 
        property derived from consortium research conducted under 
        subsection (e)(1).
    (d) Planning Board.--
            (1) In general.--Not later than 90 days after the 
        establishment of the consortium, the Secretary shall establish 
        and appoint the members of a planning board, to be known as the 
        ``Next Generation Lighting Initiative Planning Board'', to 
        assist the Secretary in carrying out this section.
            (2) Composition.--The planning board shall be composed of--
                    (A) four members from universities, national 
                laboratories, and other individuals with expertise in 
                advanced solid-state lighting and technologies based on 
                white light emitting diodes; and
                    (B) three members from a list of not less than six 
                nominees from industry submitted by the consortium.
            (3) Study.-- 
                    (A) In general.--Not later than 90 days after the 
                date on which the Secretary appoints members to the 
                planning board, the planning board shall complete a 
                study on strategies for the development and 
                implementation of advanced solid-state lighting 
                technologies based on white light emitting diodes.
                    (B) Requirements.--The study shall develop a 
                comprehensive strategy to implement, through the 
                initiative, the use of white light emitting diodes to 
                increase energy efficiency and enhance United States 
                competitiveness.
                    (C) Implementation.--As soon as practicable after 
                the study is submitted to the Secretary, the Secretary 
                shall implement the initiative in accordance with the 
                recommendations of the planning board.
            (4) Termination.--The planning board shall terminate upon 
        completion of the study under paragraph (3).
    (e) Grants.--
            (1) Fundamental research.--The Secretary, through the 
        consortium, shall make grants to conduct basic and 
        manufacturing-related research related to advanced solid-state 
        lighting technologies based on white light emitting diode 
        technologies.
            (2) Technology development and demonstration.--The 
        Secretary shall enter into grants, contracts, and cooperative 
        agreements to conduct or promote technology research, 
        development, or demonstration activities. In providing funding 
        under this paragraph, the Secretary shall give preference to 
        participants in the consortium.
            (3) Continuing assessment.--The consortium, in 
        collaboration with the Secretary, shall formulate annual 
        operating and performance objectives, develop technology 
        roadmaps, and recommend research and development priorities for 
        the initiative. The Secretary may also establish or utilize 
        advisory committees, or enter into appropriate arrangements 
        with the National Academy of Sciences, to conduct periodic 
        reviews of the initiative. The Secretary shall consider the 
        results of such assessment and review activities in making 
        funding decisions under paragraphs (1) and (2) of this 
        subsection.
            (4) Technical assistance.--The National Laboratories shall 
        cooperate with and provide technical assistance to persons 
        carrying out projects under the initiative.
            (5) Audits.--
                    (A) In general.--The Secretary shall retain an 
                independent, commercial auditor to determine the extent 
                to which funds made available under this section have 
                been expended in a manner that is consistent with the 
                objectives under subsection (b) and, in the case of 
                funds made available to the consortium, the annual 
                program plan of the consortium under subsection 
                (c)(4)(B).
                    (B) Reports.--The auditor shall submit to Congress, 
                the Secretary, and the Comptroller General of the 
                United States an annual report containing the results 
                of the audit.
            (6) Applicable law.--Grants, contracts, and cooperative 
        agreements under this section shall not be subject to the 
        Federal Acquisition Regulation.
    (f) Protection of Information.--Information obtained by the Federal 
Government on a confidential basis under this section shall be 
considered to constitute trade secrets and commercial or financial 
information obtained from a person and privileged or confidential under 
section 552(b)(4) of title 5, United States Code.
    (g) Authorization of Appropriations.--In addition to amounts 
authorized under section 1211(c), there are authorized to be 
appropriated for activities under this section $50,000,000 for each of 
fiscal years 2003 through 2011.
    (h) Definitions.--In this section:
            (1) Advanced solid-state lighting.--The term ``advanced 
        solid-state lighting'' means a semiconducting device package 
        and delivery system that produces white light using externally 
        applied voltage.
            (2) Consortium.--The term ``consortium'' means the Next 
        Generation Lighting Initiative Consortium under subsection (c).
            (3) Initiative.--The term ``initiative'' means the Next 
        Generation Lighting Initiative established under subsection 
        (a).
            (4) inorganic white light emitting diode.--The term 
        ``inorganic white light emitting diode'' means an inorganic 
        semiconducting package that produces white light using 
        externally applied voltage.
            (5) Organic white light emitting diode.--The term ``organic 
        white light emitting diode'' means an organic semiconducting 
        compound that produces white light using externally applied 
        voltage.
            (6) White light emitting diode.--The term ``white light 
        emitting diode'' means--
                    (A) an inorganic white light emitting diode; or
                    (B) an organic white light emitting diode.

SEC. 1214. RAILROAD EFFICIENCY.

    (a) Establishment.--The Secretary shall, in cooperation with the 
Secretaries of Transportation and Defense, and the Administrator of the 
Environmental Protection Agency, establish a public-private research 
partnership involving the Federal Government, railroad carriers, 
locomotive manufacturers, and the Association of American Railroads. 
The goal of the initiative shall include developing and demonstrating 
locomotive technologies that increase fuel economy, reduce emissions, 
improve safety, and lower costs.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the requirements of this section $60,000,000 
for fiscal year 2003 and $70,000,000 for fiscal year 2004.

SEC. 1215. HIGH POWER DENSITY INDUSTRY PROGRAM.

    The Secretary shall establish a comprehensive research, 
development, demonstration and deployment program to improve energy 
efficiency of high power density facilities, including data centers, 
server farms, and telecommunications facilities. Such program shall 
consider technologies that provide significant improvement in thermal 
controls, metering, load management, peak load reduction, or the 
efficient cooling of electronics.

SEC. 1216. RESEARCH REGARDING PRECIOUS METAL CATALYSIS.

    The Secretary of Energy may, for the purpose of developing improved 
industrial and automotive catalysts, carry out research in the use of 
precious metals (excluding platinum, palladium, and rhodium) in 
catalysis directly, through national laboratories, or through grants to 
or cooperative agreements or contracts with public or nonprofit 
entities. There are authorized to be appropriated to carry out this 
section such sums as are necessary for fiscal years 2003 through 2006.

                      Subtitle B--Renewable Energy

SEC. 1221. ENHANCED RENEWABLE ENERGY RESEARCH AND DEVELOPMENT.

    (a) Program Direction.--The Secretary shall conduct balanced energy 
research, development, demonstration, and technology deployment 
programs to enhance the use of renewable energy.
    (b) Program Goals.--
            (1) Wind power.--The goals of the wind power program shall 
        be to develop, in partnership with industry, a variety of 
        advanced wind turbine designs and manufacturing technologies 
        that are cost-competitive with fossil-fuel generated 
        electricity, with a focus on developing advanced low wind speed 
        technologies that, by 2007, will enable the expanding 
        utilization of widespread class 3 and 4 winds.
            (2) Photovoltaics.--The goal of the photovoltaic program 
        shall be to develop, in partnership with industry, total 
        photovoltaic systems with installed costs of $4,000 per peak 
        kilowatt by 2005 and $2,000 per peak kilowatt by 2015.
            (3) Solar thermal electric systems.--The goal of the solar 
        thermal electric systems program shall be to develop, in 
        partnership with industry, solar power technologies (including 
        baseload solar power) that are competitive with fossil-fuel 
        generated electricity by 2015, by combining high-efficiency and 
        high-temperature receivers with advanced thermal storage and 
        power cycles.
            (4) Biomass-based power systems.--The goal of the biomass 
        program shall be to develop, in partnership with industry, 
        integrated power-generating systems, advanced conversion, and 
        feedstock technologies capable of producing electric power that 
        is cost-competitive with fossil-fuel generated electricity by 
        2010, together with the production of fuels, chemicals, and 
        other products under paragraph (6).
            (5) Geothermal energy.--The goal of the geothermal program 
        shall be to develop, in partnership with industry, technologies 
        and processes based on advanced hydrothermal systems and 
        advanced heat and power systems, including geothermal heat pump 
        technology, with a specific focus on--
                    (A) improving exploration and characterization 
                technology to increase the probability of drilling 
                successful wells from 20 percent to 40 percent by 2006;
                    (B) reducing the cost of drilling by 2008 to an 
                average cost of $150 per foot; and
                    (C) developing enhanced geothermal systems 
                technology with the potential to double the useable 
                geothermal resource base.
            (6) Biofuels.--The goal of the biofuels program shall be to 
        develop, in partnership with industry--
                    (A) advanced biochemical and thermochemical 
                conversion technologies capable of making liquid and 
                gaseous fuels from cellulosic feedstocks that are 
                price-competitive with gasoline or diesel in either 
                internal combustion engines or fuel cell vehicles by 
                2010; and
                    (B) advanced biotechnology processes capable of 
                making biofuels, biobased polymers, and chemicals, with 
                particular emphasis on the development of biorefineries 
                that use enzyme based processing systems.
        For purposes of this paragraph, the term ``cellulosic 
        feedstock'' means any portion of a food crop not normally used 
        in food production or any nonfood crop grown for the purpose of 
        producing biomass feedstock.
            (7) Hydrogen-based energy systems.--The goals of the 
        hydrogen program shall be to support research and development 
        on technologies for production, storage, and use of hydrogen, 
        including fuel cells and, specifically, fuel-cell vehicle 
        development activities under section 1211.
            (8) Hydropower.--The goal of the hydropower program shall 
        be to develop, in partnership with industry, a new generation 
        of turbine technologies that are less damaging to fish and 
        aquatic ecosystems.
            (9) Electric energy systems and storage.--The goals of the 
        electric energy and storage program shall be to develop, in 
        partnership with industry--
                    (A) generators and transmission, distribution, and 
                storage systems that combine high capacity with high 
                efficiency;
                    (B) technologies to interconnect distributed energy 
                resources with electric power systems, comply with any 
                national interconnection standards, have a minimum 10-
                year useful life;
                    (C) advanced technologies to increase the average 
                efficiency of electric transmission facilities in rural 
                and remote areas, giving priority for demonstrations to 
                advanced transmission technologies that are being or 
                have been field tested;
                    (D) the use of new transmission technologies, 
                including flexible alternating current transmission 
                systems, composite conductor materials, advanced 
                protection devices, controllers, and other cost-
                effective methods and technologies;
                    (E) the use of superconducting materials in power 
                delivery equipment such as transmission and 
                distribution cables, transformers, and generators;
                    (F) energy management technologies for enterprises 
                with aggregated loads and distributed generation, such 
                as power parks;
                    (G) economic and system models to measure the costs 
                and benefits of improved system performance;
                    (H) hybrid distributed energy systems to optimize 
                two or more distributed or on-site generation 
                technologies; and
                    (I) real-time transmission and distribution system 
                control technologies that provide for continual 
                exchange of information between generation, 
                transmission, distribution, and end-user facilities.
    (c) Special Projects.--In carrying out this section, the Secretary 
shall demonstrate--
            (1) the use of advanced wind power technology, biomass, 
        geothermal energy systems, and other renewable energy 
        technologies to assist in delivering electricity to rural and 
        remote locations;
            (2) the combined use of wind power and coal gasification 
        technologies; and
            (3) the use of high temperature superconducting technology 
        in projects to demonstrate the development of superconductors 
        that enhance the reliability, operational flexibility, or 
        power-carrying capability of electric transmission systems or 
        increase the electrical or operational efficiency of electric 
        energy generation, transmission, distribution and storage 
        systems.
    (d) Financial Assistance to Rural Areas.--In carrying out special 
projects under subsection (c), the Secretary may provide financial 
assistance to rural electric cooperatives and other rural entities.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out research, development, 
demonstration, and technology deployment activities under this 
subtitle--
            (1) $500,000,000 for fiscal year 2003;
            (2) $595,000,000 for fiscal year 2004;
            (3) $683,000,000 for fiscal year 2005; and
            (4) $733,000,000 for fiscal year 2006, of which 
        $100,000,000 may be allocated to meet the goals of subsection 
        (b)(1).

SEC. 1222. BIOENERGY PROGRAMS.

    (a) Program Direction.--The Secretary shall carry out research, 
development, demonstration, and technology development activities 
related to bioenergy, including programs under paragraphs (4) and (6) 
of section 1221(b).
    (b) Authorization of Appropriations.--
            (1) Biopower energy systems.--From amounts authorized under 
        section 1221(e), there are authorized to be appropriated to the 
        Secretary for biopower energy systems--
                    (A) $60,300,000 for fiscal year 2003;
                    (B) $69,300,000 for fiscal year 2004;
                    (C) $79,600,000 for fiscal year 2005; and
                    (D) $86,250,000 for fiscal year 2006.
            (2) Biofuels energy systems.--From amounts authorized under 
        section 1221(e), there are authorized to be appropriated to the 
        Secretary for biofuels energy systems--
                    (A) $57,500,000 for fiscal year 2003;
                    (B) $66,125,000 for fiscal year 2004;
                    (C) $76,000,000 for fiscal year 2005; and
                    (D) $81,400,000 for fiscal year 2006.
            (3) Integrated bioenergy research and development.--The 
        Secretary may use funds authorized under paragraph (1) or (2) 
        for programs, projects, or activities that integrate 
        applications for both biopower and biofuels, including cross-
        cutting research and development in feedstocks and economic 
        analysis.

SEC. 1223. HYDROGEN RESEARCH AND DEVELOPMENT.

    (a) Short Title.--This section may be cited as the ``Hydrogen 
Future Act of 2002''.
    (b) Purposes.--Section 102(b) of the Spark M. Matsunaga Hydrogen 
Research, Development, and Demonstration Act of 1990 (42 U.S.C. 
12401(b)) is amended by striking paragraphs (2) and (3) and inserting 
the following:
            ``(2) to direct the Secretary to develop a program of 
        technology assessment, information transfer, and education in 
        which Federal agencies, members of the transportation, energy, 
        and other industries, and other entities may participate;
            ``(3) to develop methods of hydrogen production that 
        minimize production of greenhouse gases, including developing--
                    ``(A) efficient production from nonrenewable 
                resources; and
                    ``(B) cost-effective production from renewable 
                resources such as biomass, geothermal, wind, and solar 
                energy; and
            ``(4) to foster the use of hydrogen as a major energy 
        source, including developing the use of hydrogen in--
                    ``(A) isolated villages, islands, and communities 
                in which other energy sources are not available or are 
                very expensive; and
                    ``(B) foreign economic development, to avoid 
                environmental damage from increased fossil fuel use.''.
    (c) Report to Congress.--Section 103 of the Spark M. Matsunaga 
Hydrogen Research, Development, and Demonstration Act of 1990 (42 
U.S.C. 12402) is amended--
            (1) in subsection (a), by striking ``January 1, 1999,'' and 
        inserting ``1 year after the date of enactment of the Hydrogen 
        Future Act of 2002, and biennially thereafter,'';
            (2) in subsection (b), by striking paragraphs (1) and (2) 
        and inserting the following:
            ``(1) an analysis of hydrogen-related activities throughout 
        the United States Government to identify productive areas for 
        increased intragovernmental collaboration;
            ``(2) recommendations of the Hydrogen Technical Advisory 
        Panel established by section 108 for any improvements in the 
        program that are needed, including recommendations for 
        additional legislation; and
            ``(3) to the extent practicable, an analysis of State and 
        local hydrogen-related activities.''; and
            (3) by adding at the end the following:
    ``(c) Coordination Plan.--The report under subsection (a) shall be 
based on a comprehensive coordination plan for hydrogen energy prepared 
by the Secretary in consultation with other Federal agencies.''.
    (d) Hydrogen Research and Development.--Section 104 of the Spark M. 
Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990 
(42 U.S.C. 12403) is amended--
            (1) in subsection (b)(1), by striking ``marketplace;'' and 
        inserting ``marketplace, including foreign markets, 
        particularly where an energy infrastructure is not well 
        developed;'';
            (2) in subsection (e), by striking ``this chapter'' and 
        inserting ``this Act'';
            (3) by striking subsection (g) and inserting the following:
    ``(g) Cost Sharing.--
            ``(1) Inability to fund entire cost.--The Secretary shall 
        not consider a proposal submitted by a person from industry 
        unless the proposal contains a certification that--
                    ``(A) reasonable efforts to obtain non-Federal 
                funding in the amount necessary to pay 100 percent of 
                the cost of the project have been made; and
                    ``(B) non-Federal funding in that amount could not 
                reasonably be obtained.
            ``(2) Non-federal share.--
                    ``(A) In general.--The Secretary shall require a 
                commitment from non-Federal sources of at least 25 
                percent of the cost of the project.
                    ``(B) Reduction or elimination.--The Secretary may 
                reduce or eliminate the cost-sharing requirement under 
                subparagraph (A) for the proposed research and 
                development project, including for technical analyses, 
                economic analyses, outreach activities, and educational 
                programs, if the Secretary determines that reduction or 
                elimination is necessary to achieve the objectives of 
                this Act.'';
            (4) in subsection (i), by striking ``this chapter'' and 
        inserting ``this Act''.
    (e) Demonstrations.--Section 105 of the Spark M. Matsunaga Hydrogen 
Research, Development, and Demonstration Act of 1990 (42 U.S.C. 12404) 
is amended by striking subsection (c) and inserting the following:
    ``(c) Non-Federal Share.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall require a commitment from non-Federal sources 
        of at least 50 percent of the costs directly relating to a 
        demonstration project under this section.
            ``(2) Reduction.--The Secretary may reduce the non-Federal 
        requirement under paragraph (1) if the Secretary determines 
        that the reduction is appropriate considering the technological 
        risks involved in the project and is necessary to meet the 
        objectives of this Act.''.
    (f) Technology Transfer.--Section 106 of the Spark M. Matsunaga 
Hydrogen Research, Development, and Demonstration Act of 1990 (42 
U.S.C. 12405) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence--
                            (i) by striking ``The Secretary shall 
                        conduct a program designed to accelerate wider 
                        application'' and inserting the following:
            ``(1) In general.--The Secretary shall conduct a program 
        designed to--
                    ``(A) accelerate wider application''; and
                            (ii) by striking ``private sector'' and 
                        inserting ``private sector; and
                    ``(B) accelerate wider application of hydrogen 
                technologies in foreign countries to increase the 
                global market for the technologies and foster global 
                economic development without harmful environmental 
                effects.''; and
                    (B) in the second sentence, by striking ``The 
                Secretary'' and inserting the following:
            ``(2) Advice and assistance.--The Secretary''; and
            (2) in subsection (b)--
                    (A) in paragraph (2), by redesignating 
                subparagraphs (A) through (D) as clauses (i) through 
                (iv), respectively, and indenting appropriately;
                    (B) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and indenting 
                appropriately;
                    (C) by striking ``The Secretary, in'' and inserting 
                the following:
            ``(1) In general.--The Secretary, in'';
                    (D) by striking ``The information'' and inserting 
                the following:
            ``(2) Activities.--The information''; and
                    (E) in paragraph (1) (as designated by subparagraph 
                (C))--
                            (i) in subparagraph (A) (as redesignated by 
                        subparagraph (B)), by striking ``an inventory'' 
                        and inserting ``an update of the inventory''; 
                        and
                            (ii) in subparagraph (B) (as redesignated 
                        by subparagraph (B)), by striking ``develop'' 
                        and all that follows through ``to improve'' and 
                        inserting ``develop with the National 
                        Aeronautics and Space Administration, the 
                        Department of Energy, other Federal agencies as 
                        appropriate, and industry, an information 
                        exchange program to improve''.
    (g) Technical Panel Review.--
            (1) In general.--Section 108 of the Spark M. Matsunaga 
        Hydrogen Research, Development, and Demonstration Act of 1990 
        (42 U.S.C. 12407) is amended--
                    (A) in subsection (b)--
                            (i) by striking ``(b) Membership.--The 
                        technical panel shall be appointed'' and 
                        inserting the following:
    ``(b) Membership.--
            ``(1) In general.--The technical panel shall be comprised 
        of not fewer than 9 nor more than 15 members appointed'';
                            (ii) by striking the second sentence and 
                        inserting the following:
            ``(2) Terms.--
                    ``(A) In general.--The term of a member of the 
                technical panel shall be not more than 3 years.
                    ``(B) Staggered terms.--The Secretary may appoint 
                members of the technical panel in a manner that allows 
                the terms of the members serving at any time to expire 
                at spaced intervals so as to ensure continuity in the 
                functioning of the technical panel.
                    ``(C) Reappointment.--A member of the technical 
                panel whose term expires may be reappointed.''; and
                            (iii) by striking ``The technical panel 
                        shall have a chairman,'' and inserting the 
                        following:
            ``(3) Chairperson.--The technical panel shall have a 
        chairperson,''; and
                    (B) in subsection (d)--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``the following items'';
                            (ii) in paragraph (1), by striking ``and'' 
                        at the end;
                            (iii) in paragraph (2), by striking the 
                        period at the end and inserting ``; and''; and
                            (iv) by adding at the end the following:
            ``(3) the plan developed by the interagency task force 
        under section 202(b) of the Hydrogen Future Act of 1996.''.
            (2) New appointments.--Not later than 180 days after the 
        date of enactment of this Act, the Secretary--
                    (A) shall review the membership composition of the 
                Hydrogen Technical Advisory Panel; and
                    (B) may appoint new members consistent with the 
                amendments made by subsection (a).
    (h) Authorization of Appropriations.--Section 109 of the Spark M. 
Matsunaga Hydrogen Research, Development, and Demonstration Act of 1990 
(42 U.S.C. 12408) is amended--
            (1) in paragraph (8), by striking ``and'';
            (2) in paragraph (9), by striking the period and inserting 
        a semicolon; and
            (3) by adding at the end the following:
            ``(10) $65,000,000 for fiscal year 2003;
            ``(11) $70,000,000 for fiscal year 2004;
            ``(12) $75,000,000 for fiscal year 2005; and
            ``(13) $80,000,000 for fiscal year 2006.''.
    (i) Fuel Cells.--
            (1) Integration of fuel cells with hydrogen production 
        systems.--Section 201 of the Hydrogen Future Act of 1996 is 
        amended--
                    (A) in subsection (a) by striking ``(a) Not later 
                than 180 days after the date of enactment of this 
                section, and subject'' and inserting ``(a) In 
                General.--Subject'';
                    (B) by striking ``with--'' and all that follows and 
                inserting ``into Federal, State, and local government 
                facilities for stationary and transportation 
                applications.'';
                    (C) in subsection (b), by striking ``gas is'' and 
                inserting ``basis'';
                    (D) in subsection (c)(2), by striking ``systems 
                described in subsections (a)(1) and (a)(2)'' and 
                inserting ``projects proposed''; and
                    (E) by striking subsection (d) and inserting the 
                following:
    ``(d) Non-Federal Share.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall require a commitment from non-Federal sources 
        of at least 50 percent of the costs directly relating to a 
        demonstration project under this section.
            ``(2) Reduction.--The Secretary may reduce the non-Federal 
        requirement under paragraph (1) if the Secretary determines 
        that the reduction is appropriate considering the technological 
        risks involved in the project and is necessary to meet the 
        objectives of this Act.''.
            (2) Cooperative and cost-sharing agreements; integration of 
        technical information.--Title II of the Hydrogen Future Act of 
        1996 (42 U.S.C. 12403 note; Public Law 104-271) is amended by 
        striking section 202 and inserting the following:

``SEC. 202. INTERAGENCY TASK FORCE.

    ``(a) Establishment.--Not later than 120 days after the date of 
enactment of this section, the Secretary shall establish an interagency 
task force led by a Deputy Assistant Secretary of the Department of 
Energy and comprised of representatives of--
            ``(1) the Office of Science and Technology Policy;
            ``(2) the Department of Transportation;
            ``(3) the Department of Defense;
            ``(4) the Department of Commerce (including the National 
        Institute for Standards and Technology);
            ``(5) the Environmental Protection Agency;
            ``(6) the National Aeronautics and Space Administration; 
        and
            ``(7) other agencies as appropriate.
    ``(b) Duties.--
            ``(1) In general.--The task force shall develop a plan for 
        carrying out this title.
            ``(2) Focus of plan.--The plan shall focus on development 
        and demonstration of integrated systems and components for--
                    ``(A) hydrogen production, storage, and use in 
                Federal, State, and local government buildings and 
                vehicles;
                    ``(B) hydrogen-based infrastructure for buses and 
                other fleet transportation systems that include zero-
                emission vehicles; and
                    ``(C) hydrogen-based distributed power generation, 
                including the generation of combined heat, power, and 
                hydrogen.

``SEC. 203. COOPERATIVE AND COST-SHARING AGREEMENTS.

    ``The Secretary shall enter into cooperative and cost-sharing 
agreements with Federal, State, and local agencies for participation by 
the agencies in demonstrations at facilities administered by the 
agencies, with the aim of integrating high efficiency hydrogen systems 
using fuel cells into the facilities to provide immediate benefits and 
promote a smooth transition to hydrogen as an energy source.

``SEC. 204. INTEGRATION AND DISSEMINATION OF TECHNICAL INFORMATION.

    ``The Secretary shall--
            ``(1) integrate all the technical information that becomes 
        available as a result of development and demonstration projects 
        under this title;
            ``(2) make the information available to all Federal and 
        State agencies for dissemination to all interested persons; and
            ``(3) foster the exchange of generic, nonproprietary 
        information and technology developed under this title among 
        industry, academia, and Federal, State, and local governments, 
        to help the United States economy attain the economic benefits 
        of the information and technology.

``SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated, for activities under 
this title--
            ``(1) $25,000,000 for fiscal year 2003;
            ``(2) $30,000,000 for fiscal year 2004;
            ``(3) $35,000,000 for fiscal year 2005; and
            ``(4) $40,000,000 for fiscal year 2006.''.

                       Subtitle C--Fossil Energy

SEC. 1231. ENHANCED FOSSIL ENERGY RESEARCH AND DEVELOPMENT.

    (a) Program Direction.--The Secretary shall conduct a balanced 
energy research, development, demonstration, and technology deployment 
program to enhance fossil energy.
    (b) Program Goals.--
            (1) Core fossil research and development.--The goals of the 
        core fossil research and development program shall be to reduce 
        emissions from fossil fuel use by developing technologies, 
        including precombustion technologies, by 2015 with the 
        capability of realizing--
                    (A) electricity generating efficiencies of 60 
                percent for coal and 75 percent for natural gas;
                    (B) combined heat and power thermal efficiencies of 
                more than 85 percent;
                    (C) fuels utilization efficiency of 75 percent for 
                the production of liquid transportation fuels from 
                coal;
                    (D) near zero emissions of mercury and of emissions 
                that form fine particles, smog, and acid rain;
                    (E) reduction of carbon dioxide emissions by at 
                least 40 percent through efficiency improvements and 
                100 percent with sequestration; and
                    (F) improved reliability, efficiency, reductions of 
                air pollutant emissions, or reductions in solid waste 
                disposal requirements.
            (2) Offshore oil and natural gas resources.--The goal of 
        the offshore oil and natural gas resources program shall be to 
        develop technologies to--
                    (A) extract methane hydrates in coastal waters of 
                the United States, and
                    (B) develop natural gas and oil reserves in the 
                ultra-deepwater of the Central and Western Gulf of 
                Mexico.
            (3) Onshore oil and natural gas resources.--The goal of the 
        onshore oil and natural gas resources program shall be to 
        advance the science and technology available to domestic 
        onshore petroleum producers, particularly independent 
        operators, through--
                    (A) advances in technology for exploration and 
                production of domestic petroleum resources, 
                particularly those not accessible with current 
                technology;
                    (B) improvement in the ability to extract 
                hydrocarbons from known reservoirs and classes of 
                reservoirs; and
                    (C) development of technologies and practices that 
                reduce the threat to the environment from petroleum 
                exploration and production and decrease the cost of 
                effective environmental compliance.
            (4) Transportation fuels.--The goals of the transportation 
        fuels program shall be to increase the price elasticity of oil 
        supply and demand by focusing research on--
                    (A) reducing the cost of producing transportation 
                fuels from coal and natural gas; and
                    (B) indirect liquefaction of coal and biomass.
    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary for carrying out research, development, 
        demonstration, and technology deployment activities under this 
        section--
                    (A) $485,000,000 for fiscal year 2003;
                    (B) $508,000,000 for fiscal year 2004;
                    (C) $532,000,000 for fiscal year 2005; and
                    (D) $558,000,000 for fiscal year 2006.
            (2) Limits on use of funds.--None of the funds authorized 
        in paragraph (1) may be used for--
                    (A) fossil energy environmental restoration;
                    (B) import/export authorization;
                    (C) program direction; or
                    (D) general plant projects.
            (3) Coal-based projects.--The coal-based projects funded 
        under this section shall be consistent with the goals in 
        subsection (b). The program shall emphasize carbon capture and 
        sequestration technologies and gasification technologies, 
        including gasification combined cycle, gasification fuel cells, 
        gasification co-production, hybrid gasification/combustion, or 
        other technology with the potential to address the goals in 
        subparagraphs (D) or (E) of subsection (b)(1).

SEC. 1232. POWER PLANT IMPROVEMENT INITIATIVE.

    (a) Program Direction.--The Secretary shall conduct a balanced 
energy research, development, demonstration, and technology deployment 
program to demonstrate commercial applications of advanced lignite and 
coal-based technologies applicable to new or existing power plants 
(including co-production plants) that advance the efficiency, 
environmental performance, and cost-competitiveness substantially 
beyond technologies that are in operation or have been demonstrated by 
the date of enactment of this subtitle.
    (b) Technical Milestones.--
            (1) In general.--The Secretary shall set technical 
        milestones specifying efficiency and emissions levels that 
        projects shall be designed to achieve. The milestones shall 
        become more restrictive over the life of the program.
            (2) 2010 efficiency milestones.--The milestones shall be 
        designed to achieve by 2010 interim thermal efficiency of--
                    (A) forty-five percent for coal of more than 9,000 
                Btu;
                    (B) forty-four percent for coal of 7,000 to 9,000 
                Btu; and
                    (C) forty-two percent for coal of less than 7,000 
                Btu.
            (3) 2020 efficiency milestones.--The milestones shall be 
        designed to achieve by 2020 thermal efficiency of--
                    (A) sixty percent for coal of more than 9,000 Btu;
                    (B) fifty-nine percent for coal of 7,000 to 9,000 
                Btu; and
                    (C) fifty-seven percent for coal of less than 7,000 
                Btu.
            (4) Emissions milestones.--The milestones shall include 
        near zero emissions of mercury and greenhouse gases and of 
        emissions that form fine particles, smog, and acid rain.
            (5) Regional and quality differences.--The Secretary may 
        consider regional and quality differences in developing the 
        efficiency milestones.
    (c) Project Criteria.--The demonstration activities proposed to be 
conducted at a new or existing coal-based electric generation unit 
having a nameplate rating of not less than 100 megawatts, excluding a 
co-production plant, shall include at least one of the following--
            (1) a means of recycling or reusing a significant portion 
        of coal combustion wastes produced by coal-based generating 
        units, excluding practices that are commercially available by 
        the date of enactment of this subtitle;
            (2) a means of capture and sequestering emissions, 
        including greenhouse gases, in a manner that is more effective 
        and substantially below the cost of technologies that are in 
        operation or that have been demonstrated by the date of 
        enactment of this subtitle;
            (3) a means of controlling sulfur dioxide and nitrogen 
        oxide or mercury in a manner that improves environmental 
        performance beyond technologies that are in operation or that 
        have been demonstrated by the date of enactment of this 
        subtitle--
                    (A) in the case of an existing unit, achieve an 
                overall thermal design efficiency improvement compared 
                to the efficiency of the unit as operated, of not less 
                than--
                            (i) 7 percent for coal of more than 9,000 
                        Btu;
                            (ii) 6 percent for coal of 7,000 to 9,000 
                        Btu; or
                            (iii) 4 percent for coal of less than 7,000 
                        Btu; or
                    (B) in the case of a new unit, achieve the 
                efficiency milestones set for in subsection (b) 
                compared to the efficiency of a typical unit as 
                operated on the date of enactment of this subtitle, 
                before any retrofit, repowering, replacement, or 
                installation.
    (d) Study.--The Secretary, in consultation with the Administrator 
of the Environmental Protection Agency, the Secretary of the Interior, 
and interested entities (including coal producers, industries using 
coal, organizations to promote coal or advanced coal technologies, 
environmental organizations, and organizations representing workers), 
shall conduct an assessment that identifies performance criteria that 
would be necessary for coal-based technologies to meet, to enable 
future reliance on coal in an environmentally sustainable manner for 
electricity generation, use as a chemical feedstock, and use as a 
transportation fuel.
    (e) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Secretary for carrying out activities under this section 
        $200,000,000 for each of fiscal years 2003 through 2011.
            (2) Limitation on funding of projects.--Eighty percent of 
        the funding under this section shall be limited to--
                    (A) carbon capture and sequestration technologies;
                    (B) gasification technologies, including 
                gasification combined cycle, gasification fuel cells, 
                gasification co-production, or hybrid gasification/
                combustion; or
                    (C) other technology either by itself or in 
                conjunction with other technologies that has the 
                potential to achieve near zero emissions.

SEC. 1233. RESEARCH AND DEVELOPMENT FOR ADVANCED SAFE AND EFFICIENT 
              COAL MINING TECHNOLOGIES.

    (a) Establishment.--The Secretary of Energy shall establish a 
cooperative research partnership involving appropriate Federal 
agencies, coal producers, including associations, equipment 
manufacturers, universities with mining engineering departments, and 
other relevant entities to--
            (1) develop mining research priorities identified by the 
        Mining Industry of the Future Program and in the 
        recommendations from relevant reports of the National Academy 
        of Sciences on mining technologies;
            (2) establish a process for conducting joint industry-
        Government research and development; and
            (3) expand mining research capabilities at institutions of 
        higher education.
    (b) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out activities under this section, $12,000,000 in fiscal 
        year 2003 and $15,000,000 in fiscal year 2004.
            (2) Limit on use of funds.--Not less than 20 percent of any 
        funds appropriated in a given fiscal year under this subsection 
        shall be dedicated to research carried out at institutions of 
        higher education.

SEC. 1234. ULTRA-DEEPWATER AND UNCONVENTIONAL RESOURCE EXPLORATION AND 
              PRODUCTION TECHNOLOGIES.

    (a) Definitions.--In this section:
            (1) Advisory committee.--The term ``Advisory Committee'' 
        means the Ultra-Deepwater and Unconventional Resource 
        Technology Advisory Committee established under subsection (c).
            (2) Award.--The term ``award'' means a cooperative 
        agreement, contract, award or other types of agreement as 
        appropriate.
            (3) Deepwater.--The term ``deepwater'' means a water depth 
        that is greater than 200 but less than 1,500 meters.
            (4) Eligible award recipient.--The term ``eligible award 
        recipient'' includes--
                    (A) a research institution;
                    (B) an institution of higher education;
                    (C) a corporation; and
                    (D) a managing consortium formed among entities 
                described in subparagraphs (A) through (C).
            (5) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given the 
        term in section 101 of the Higher Education Act of 1965 (20 
        U.S.C. 1001).
            (6) Managing consortium.--The term ``managing consortium'' 
        means an entity that--
                    (A) exists as of the date of enactment of this 
                section;
                    (B)(i) is an organization described in section 
                501(c)(3) of the Internal Revenue Code of 1986; and
                    (ii) is exempt from taxation under section 501(a) 
                of that Code;
                    (C) is experienced in planning and managing 
                programs in natural gas or other petroleum exploration 
                and production research, development, and 
                demonstration; and
                    (D) has demonstrated capabilities and experience in 
                representing the views and priorities of industry, 
                institutions of higher education and other research 
                institutions in formulating comprehensive research and 
                development plans and programs.
            (7) Program.--The term ``program'' means the program of 
        research, development, and demonstration established under 
        subsection (b)(1)(A).
            (8) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
        water depth that is equal to or greater than 1,500 meters.
            (9) Ultra-deepwater architecture.--The term ``ultra-
        deepwater architecture'' means the integration of technologies 
        to explore and produce natural gas or petroleum products 
        located at ultra-deepwater depths.
            (10) Ultra-deepwater resource.--The term ``ultra-deepwater 
        resource'' means natural gas or any other petroleum resource 
        (including methane hydrate) located in an ultra-deepwater area.
            (11) Unconventional resource.--The term ``unconventional 
        resource'' means natural gas or any other petroleum resource 
        located in a formation on physically or economically 
        inaccessible land currently available for lease for purposes of 
        natural gas or other petroleum exploration or production.
    (b) Ultra-Deepwater and Unconventional Exploration and Production 
Program.--
            (1) Establishment.--
                    (A) In general.--The Secretary shall establish a 
                program of research into, and development and 
                demonstration of, ultra-deepwater resource and 
                unconventional resource exploration and production 
                technologies.
                    (B) Location; implementation.--The program under 
                this subsection shall be carried out--
                            (i) in areas on the outer Continental Shelf 
                        that, as of the date of enactment of this 
                        section, are available for leasing; and
                            (ii) on unconventional resources.
            (2) Components.--The program shall include one or more 
        programs for long-term research into--
                    (A) new deepwater ultra-deepwater resource and 
                unconventional resource exploration and production 
                technologies; or
                    (B) environmental mitigation technologies for 
                production of ultra-deepwater resource and 
                unconventional resource.
    (c) Advisory Committee.--
            (1) Establishment.--Not later than 30 days after the date 
        of enactment of this section, the Secretary shall establish an 
        advisory committee to be known as the ``Ultra-Deepwater and 
        Unconventional Resource Technology Advisory Committee''.
            (2) Membership.--
                    (A) Composition.--Subject to subparagraph (B), the 
                advisory committee shall be composed of seven members 
                appointed by the Secretary that--
                            (i) have extensive operational knowledge of 
                        and experience in the natural gas and other 
                        petroleum exploration and production industry; 
                        and
                            (ii) are not Federal employees or employees 
                        of contractors to a Federal agency.
                    (B) Expertise.--Of the members of the advisory 
                committee appointed under subparagraph (A)--
                            (i) at least four members shall have 
                        extensive knowledge of ultra-deepwater resource 
                        exploration and production technologies;
                            (ii) at least three members shall have 
                        extensive knowledge of unconventional resource 
                        exploration and production technologies.
            (3) Duties.--The advisory committee shall advise the 
        Secretary in the implementation of this section.
            (4) Compensation.--A member of the advisory committee shall 
        serve without compensation but shall receive travel expenses, 
        including per diem in lieu of subsistence, in accordance with 
        applicable provisions under subchapter I of chapter 57 of title 
        5, United States Code.
    (d) Awards.--
            (1) Types of awards.--
                    (A) Ultra-deepwater resources.--
                            (i) In general.--The Secretary shall make 
                        awards for research into, and development and 
                        demonstration of, ultra-deepwater resource 
                        exploration and production technologies--
                                    (I) to maximize the value of the 
                                ultra-deepwater resources of the United 
                                States;
                                    (II) to increase the supply of 
                                ultra-deepwater resources by lowering 
                                the cost and improving the efficiency 
                                of exploration and production of such 
                                resources; and
                                    (III) to improve safety and 
                                minimize negative environmental impacts 
                                of that exploration and production.
                            (ii) Ultra-deepwater architecture.--In 
                        furtherance of the purposes described in clause 
                        (i), the Secretary shall, where appropriate, 
                        solicit proposals from a managing consortium to 
                        develop and demonstrate next-generation 
                        architecture for ultra-deepwater resource 
                        production.
                    (B) Unconventional resources.--The Secretary shall 
                make awards--
                            (i) to carry out research into, and 
                        development and demonstration of, technologies 
                        to maximize the value of unconventional 
                        resources; and
                            (ii) to develop technologies to 
                        simultaneously--
                                    (I) increase the supply of 
                                unconventional resources by lowering 
                                the cost and improving the efficiency 
                                of exploration and production of 
                                unconventional resources; and
                                    (II) improve safety and minimize 
                                negative environmental impacts of that 
                                exploration and production.
            (2) Conditions.--An award made under this subsection shall 
        be subject to the following conditions:
                    (A) Multiple entities.--If an award recipient is 
                composed of more than one eligible organization, the 
                recipient shall provide a signed contract, agreed to by 
                all eligible organizations comprising the award 
                recipient, that defines, in a manner that is consistent 
                with all applicable law in effect as of the date of the 
                contract, all rights to intellectual property for--
                            (i) technology in existence as of that 
                        date; and
                            (ii) future inventions conceived and 
                        developed using funds provided under the award.
                    (B) Components of application.--An application for 
                an award for a demonstration project shall describe 
                with specificity any intended commercial applications 
                of the technology to be demonstrated.
                    (C) Cost sharing.--Non-Federal cost sharing shall 
                be in accordance with section 1403.
    (e) Plan and Funding.--
            (1) In general.--The Secretary, and where appropriate, a 
        managing consortium under subsection (d)(1)(A)(ii), shall 
        formulate annual operating and performance objectives, develop 
        multiyear technology roadmaps, and establish research and 
        development priorities for the funding of activities under this 
        section which will serve as guidelines for making awards 
        including cost-matching objectives.
            (2) Industry input.--In carrying out this program, the 
        Secretary shall promote maximum industry input through the use 
        of managing consortia or other organizations in planning and 
        executing the research areas and conducting workshops or 
        reviews to ensure that this program focuses on industry 
        problems and needs.
    (f) Auditing.--
            (1) In general.--The Secretary shall retain an independent, 
        commercial auditor to determine the extent to which funds 
        authorized by this section, provided through a managing 
        consortium, are expended in a manner consistent with the 
        purposes of this section.
            (2) Reports.--The auditor retained under paragraph (1) 
        shall submit to the Secretary, and the Secretary shall transmit 
        to the appropriate congressional committees, an annual report 
        that describes--
                    (A) the findings of the auditor under paragraph 
                (1); and
                    (B) a plan under which the Secretary may remedy any 
                deficiencies identified by the auditor.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary such sums as may be necessary to carry 
out this section.
    (h) Termination of Authority.--The authority provided by this 
section shall terminate on September 30, 2009.
    (i) Savings Provision.--Nothing in this section is intended to 
displace, duplicate or diminish any previously authorized research 
activities of the Department of Energy.

SEC. 1235. RESEARCH AND DEVELOPMENT FOR NEW NATURAL GAS TRANSPORTATION 
              TECHNOLOGIES.

    The Secretary of Energy shall conduct a comprehensive 5-year 
program for research, development and demonstration to improve the 
reliability, efficiency, safety and integrity of the natural gas 
transportation and distribution infrastructure and for distributed 
energy resources (including microturbines, fuel cells, advanced engine-
generators, gas turbines, reciprocating engines, hybrid power 
generation systems, and all ancillary equipment for dispatch, control 
and maintenance).

SEC. 1236. AUTHORIZATION OF APPROPRIATIONS FOR OFFICE OF ARCTIC ENERGY.

    There are authorized to be appropriated to the Secretary for the 
Office of Arctic Energy under section 3197 of the Floyd D. Spence 
National Defense Authorization Act for Fiscal Year 2001 (Public Law 
106-398) such sums as may be necessary, but not to exceed $25,000,000 
for each of fiscal years 2003 through 2011.

SEC. 1237. CLEAN COAL TECHNOLOGY LOAN.

    There is authorized to be appropriated not to exceed $125,000,000 
to the Secretary of Energy to provide a loan to the owner of the 
experimental plant constructed under United States Department of Energy 
cooperative agreement number DE-FC22-91PC99544 on such terms and 
conditions as the Secretary determines, including interest rates and 
upfront payments.

                       Subtitle D--Nuclear Energy

SEC. 1241. ENHANCED NUCLEAR ENERGY RESEARCH AND DEVELOPMENT.

    (a) Program Direction.--The Secretary shall conduct an energy 
research, development, demonstration, and technology deployment program 
to enhance nuclear energy.
    (b) Program Goals.--The program shall--
            (1) support research related to existing United States 
        nuclear power reactors to extend their lifetimes and increase 
        their reliability while optimizing their current operations for 
        greater efficiencies;
            (2) examine--
                    (A) advanced proliferation-resistant and passively 
                safe reactor designs;
                    (B) new reactor designs with higher efficiency, 
                lower cost, and improved safety;
                    (C) in coordination with activities carried out 
                under the amendments made by section 1223, designs for 
                a high temperature reactor capable of producing large-
                scale quantities of hydrogen using thermochemical 
                processes;
                    (D) proliferation-resistant and high-burn-up 
                nuclear fuels;
                    (E) minimization of generation of radioactive 
                materials;
                    (F) improved nuclear waste management technologies; 
                and
                    (G) improved instrumentation science;
            (3) attract new students and faculty to the nuclear 
        sciences and nuclear engineering and related fields (including 
        health physics and nuclear and radiochemistry) through--
                    (A) university-based fundamental research for 
                existing faculty and new junior faculty;
                    (B) support for the re-licensing of existing 
                training reactors at universities in conjunction with 
                industry; and
                    (C) completing the conversion of existing training 
                reactors with proliferation-resistant fuels that are 
                low enriched and to adapt those reactors to new 
                investigative uses;
            (4) maintain a national capability and infrastructure to 
        produce medical isotopes and ensure a well trained cadre of 
        nuclear medicine specialists in partnership with industry;
            (5) ensure that our nation has adequate capability to power 
        future satellite and space missions; and
            (6) maintain, where appropriate through a prioritization 
        process, a balanced research infrastructure so that future 
        research programs can use these facilities.
    (c) Authorization of Appropriations.--
            (1) Core nuclear research programs.--There are authorized 
        to be appropriated to the Secretary for carrying out research, 
        development, demonstration, and technology deployment 
        activities under subsection (b)(1) through (3)--
                    (A) $100,000,000 for fiscal year 2003;
                    (B) $110,000,000 for fiscal year 2004;
                    (C) $120,000,000 for fiscal year 2005; and
                    (D) $130,000,000 for fiscal year 2006.
            (2) Supporting nuclear activities.--There are authorized to 
        be appropriated to the Secretary for carrying out activities 
        under subsection (b)(4) through (6), as well as nuclear 
        facilities management and program direction--
                    (A) $200,000,000 for fiscal year 2003;
                    (B) $202,000,000 for fiscal year 2004;
                    (C) $207,000,000 for fiscal year 2005; and
                    (D) $212,000,000 for fiscal year 2006.

SEC. 1242. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

    (a) Establishment.--The Secretary shall support a program to 
maintain the nation's human resource investment and infrastructure in 
the nuclear sciences and engineering and related fields (including 
health physics and nuclear and radiochemistry), consistent with 
departmental missions related to civilian nuclear research and 
development.
    (b) Duties.--In carrying out the program under this section, the 
Secretary shall--
            (1) develop a graduate and undergraduate fellowship program 
        to attract new and talented students;
            (2) assist universities in recruiting and retaining new 
        faculty in the nuclear sciences and engineering through a 
        Junior Faculty Research Initiation Grant Program;
            (3) support fundamental nuclear sciences and engineering 
        research through the Nuclear Engineering Education Research 
        Program;
            (4) encourage collaborative nuclear research between 
        industry, national laboratories and universities through the 
        Nuclear Energy Research Initiative; and
            (5) support communication and outreach related to nuclear 
        science and engineering.
    (c) Maintaining University Research and Training Reactors and 
Associated Infrastructure.--Activities under this section may include:
            (1) Converting research reactors to low-enrichment fuels, 
        upgrading operational instrumentation, and sharing of reactors 
        among universities.
            (2) Providing technical assistance, in collaboration with 
        the United States nuclear industry, in re-licensing and 
        upgrading training reactors as part of a student training 
        program.
            (3) Providing funding for reactor improvements as part of a 
        focused effort that emphasizes research, training, and 
        education.
    (d) University-National Laboratory Interactions.--The Secretary 
shall develop--
            (1) a sabbatical fellowship program for university 
        professors to spend extended periods of time at National 
        Laboratories in the areas of nuclear science and technology; 
        and
            (2) a visiting scientist program in which National 
        Laboratory staff can spend time in academic nuclear science and 
        engineering departments. The Secretary may provide for 
        fellowships for students to spend time at National Laboratories 
        in the area of nuclear science with a member of the Laboratory 
        staff acting as a mentor.
    (e) Operating and Maintenance Costs.--Funding for a research 
project provided under this section may be used to offset a portion of 
the operating and maintenance costs of a university research reactor 
used in the research project, on a cost-shared basis with the 
university.
    (f) Authorization of Appropriations.--From amounts authorized under 
section 1241(c)(1), the following amounts are authorized for activities 
under this section--
            (1) $33,000,000 for fiscal year 2003;
            (2) $37,900,000 for fiscal year 2004;
            (3) $43,600,000 for fiscal year 2005; and
            (4) $50,100,000 for fiscal year 2006.

SEC. 1243. NUCLEAR ENERGY RESEARCH INITIATIVE.

    (a) Establishment.--The Secretary shall support a Nuclear Energy 
Research Initiative for grants for research relating to nuclear energy.
    (b) Authorization of Appropriations.--From amounts authorized under 
section 1241(c), there are authorized to be appropriated to the 
Secretary for activities under this section such sums as are necessary 
for each fiscal year.

SEC. 1244. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

    (a) Establishment.--The Secretary shall support a Nuclear Energy 
Plant Optimization Program for grants to improve nuclear energy plant 
reliability, availability, and productivity. Notwithstanding section 
1403, the program shall require industry cost-sharing of at least 50 
percent and be subject to annual review by the Nuclear Energy Research 
Advisory Committee of the Department.
    (b) Authorization of Appropriations.--From amounts authorized under 
section 1241(c), there are authorized to be appropriated to the 
Secretary for activities under this section such sums as are necessary 
for each fiscal year.

SEC. 1245. NUCLEAR ENERGY TECHNOLOGY DEVELOPMENT PROGRAM.

    (a) Establishment.--The Secretary shall support a Nuclear Energy 
Technology Development Program to develop a technology roadmap to 
design and develop new nuclear energy powerplants in the United States.
    (b) Generation IV Reactor Study.--The Secretary shall, as part of 
the program under subsection (a), also conduct a study of Generation IV 
nuclear energy systems, including development of a technology roadmap 
and performance of research and development necessary to make an 
informed technical decision regarding the most promising candidates for 
commercial deployment. The study shall examine advanced proliferation-
resistant and passively safe reactor designs, new reactor designs with 
higher efficiency, lower cost and improved safety, proliferation-
resistant and high burn-up fuels, minimization of generation of 
radioactive materials, improved nuclear waste management technologies, 
and improved instrumentation science. Not later than December 31, 2002, 
the Secretary shall submit to Congress a report describing the results 
of the study.
    (c) Authorization of Appropriations.--From amounts authorized to be 
appropriated under section 1241(c), there are authorized to be 
appropriated to the Secretary for activities under this section such 
sums as are necessary for each fiscal year.

                 Subtitle E--Fundamental Energy Science

SEC. 1251. ENHANCED PROGRAMS IN FUNDAMENTAL ENERGY SCIENCE.

    (a) Program Direction.--The Secretary, acting through the Office of 
Science, shall--
            (1) conduct a comprehensive program of fundamental 
        research, including research on chemical sciences, physics, 
        materials sciences, biological and environmental sciences, 
        geosciences, engineering sciences, plasma sciences, 
        mathematics, and advanced scientific computing;
            (2) maintain, upgrade and expand the scientific user 
        facilities maintained by the Office of Science and ensure that 
        they are an integral part of the departmental mission for 
        exploring the frontiers of fundamental science;
            (3) maintain a leading-edge research capability in the 
        energy-related aspects of nanoscience and nanotechnology, 
        advanced scientific computing and genome research; and
            (4) ensure that its fundamental science programs, where 
        appropriate, help inform the applied research and development 
        programs of the Department.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for carrying out research, development, 
demonstration, and technology deployment activities under this 
subtitle--
            (1) $3,785,000,000 for fiscal year 2003;
            (2) $4,153,000,000 for fiscal year 2004;
            (3) $4,586,000,000 for fiscal year 2005; and
            (4) $5,000,000,000 for fiscal year 2006.

SEC. 1252. NANOSCALE SCIENCE AND ENGINEERING RESEARCH.

    (a) Establishment.--The Secretary, acting through the Office of 
Science, shall support a program of research and development in 
nanoscience and nanoengineering consistent with the Department's 
statutory authorities related to research and development. The program 
shall include efforts to further the understanding of the chemistry, 
physics, materials science and engineering of phenomena on the scale of 
1 to 100 nanometers.
    (b) Duties of the Office of Science.--In carrying out the program 
under this section, the Office of Science shall--
            (1) support both individual investigators and 
        multidisciplinary teams of investigators;
            (2) pursuant to subsection (c), develop, plan, construct, 
        acquire, or operate special equipment or facilities for the use 
        of investigators conducting research and development in 
        nanoscience and nanoengineering;
            (3) support technology transfer activities to benefit 
        industry and other users of nanoscience and nanoengineering; 
        and
            (4) coordinate research and development activities with 
        industry and other Federal agencies.
    (c) Nanoscience and Nanoengineering Research Centers and Major 
Instrumentation.--
            (1) Authorization.--From amounts authorized to be 
        appropriated under section 1251(b), the amounts specified under 
        subsection (d)(2) shall, subject to appropriations, be 
        available for projects to develop, plan, construct, acquire, or 
        operate special equipment, instrumentation, or facilities for 
        investigators conducting research and development in 
        nanoscience and nanoengineering.
            (2) Projects.--Projects under paragraph (1) may include the 
        measurement of properties at the scale of 1 to 100 nanometers, 
        manipulation at such scales, and the integration of 
        technologies based on nanoscience or nanoengineering into bulk 
        materials or other technologies.
            (3) Facilities.--Facilities under paragraph (1) may include 
        electron microcharacterization facilities, microlithography 
        facilities, scanning probe facilities and related 
        instrumentation science.
            (4) Collaboration.--The Secretary shall encourage 
        collaborations among universities, laboratories and industry at 
        facilities under this subsection. At least one facility under 
        this subsection shall have a specific mission of technology 
        transfer to other institutions and to industry.
    (d) Authorization of Appropriations.--
            (1) Total authorization.--From amounts authorized to be 
        appropriated under section 1251(b), the following amounts are 
        authorized for activities under this section--
                    (A) $270,000,000 for fiscal year 2003;
                    (B) $290,000,000 for fiscal year 2004;
                    (C) $310,000,000 for fiscal year 2005; and
                    (D) $330,000,000 for fiscal year 2006.
            (2) Nanoscience and nanoengineering research centers and 
        major instrumentation.--Of the amounts under paragraph (1), the 
        following amounts are authorized to carry out subsection (c)--
                    (A) $135,000,000 for fiscal year 2003;
                    (B) $150,000,000 for fiscal year 2004;
                    (C) $120,000,000 for fiscal year 2005; and
                    (D) $100,000,000 for fiscal year 2006.

SEC. 1253. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

    (a) Establishment.--The Secretary, acting through the Office of 
Science, shall support a program to advance the Nation's computing 
capability across a diverse set of grand challenge computationally 
based science problems related to departmental missions.
    (b) Duties of the Office of Science.--In carrying out the program 
under this section, the Office of Science shall--
            (1) advance basic science through computation by developing 
        software to solve grand challenge science problems on new 
        generations of computing platforms;
            (2) enhance the foundations for scientific computing by 
        developing the basic mathematical and computing systems 
        software needed to take full advantage of the computing 
        capabilities of computers with peak speeds of 100 teraflops or 
        more, some of which may be unique to the scientific problem of 
        interest;
            (3) enhance national collaboratory and networking 
        capabilities by developing software to integrate geographically 
        separated researchers into effective research teams and to 
        facilitate access to and movement and analysis of large 
        (petabyte) data sets; and
            (4) maintain a robust scientific computing hardware 
        infrastructure to ensure that the computing resources needed to 
        address DOE missions are available; explore new computing 
        approaches and technologies that promise to advance scientific 
        computing.
    (c) High-Performance Computing Act Program.--Section 203(a) of the 
High-Performance Computing Act of 1991 (15 U.S.C. 5523(a)) is amended--
            (1) in paragraph (3), by striking ``and'';
            (2) in paragraph (4), by striking the period and inserting 
        ``; and''; and
            (3) by adding after paragraph (4) the following:
            ``(5) conduct an integrated program of research, 
        development, and provision of facilities to develop and deploy 
        to scientific and technical users the high-performance 
        computing and collaboration tools needed to fulfill the 
        statutory missions of the Department of Energy in conducting 
        basic and applied energy research.''.
    (d) Coordination With the DOE National Nuclear Security Agency 
Accelerated Strategic Computing Initiative and Other National Computing 
Programs.--The Secretary shall ensure that this program, to the extent 
feasible, is integrated and consistent with--
            (1) the Accelerated Strategic Computing Initiative of the 
        National Nuclear Security Agency; and
            (2) other national efforts related to advanced scientific 
        computing for science and engineering.
    (e) Authorization of Appropriations.--From amounts authorized under 
section 1251(b), the following amounts are authorized for activities 
under this section--
            (1) $285,000,000 for fiscal year 2003;
            (2) $300,000,000 for fiscal year 2004;
            (3) $310,000,000 for fiscal year 2005; and
            (4) $320,000,000 for fiscal year 2006.

SEC. 1254. FUSION ENERGY SCIENCES PROGRAM AND PLANNING.

    (a) Overall Plan for Fusion Energy Sciences Program.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this subtitle, the Secretary, after consultation 
        with the Fusion Energy Sciences Advisory Committee, shall 
        develop and transmit to the Congress a plan to ensure a strong 
        scientific base for the Fusion Energy Sciences Program within 
        the Office of Science and to enable the experiments described 
        in subsections (b) and (c).
            (2) Objectives of plan.--The plan under this subsection 
        shall include as its objectives--
                    (A) to ensure that existing fusion research 
                facilities and equipment are more fully utilized with 
                appropriate measurements and control tools;
                    (B) to ensure a strengthened fusion science theory 
                and computational base;
                    (C) to encourage and ensure that the selection of 
                and funding for new magnetic and inertial fusion 
                research facilities is based on scientific innovation 
                and cost effectiveness;
                    (D) to improve the communication of scientific 
                results and methods between the fusion science 
                community and the wider scientific community;
                    (E) to ensure that adequate support is provided to 
                optimize the design of the magnetic fusion burning 
                plasma experiments referred to in subsections (b) and 
                (c); and
                    (F) to ensure that inertial confinement fusion 
                facilities are utilized to the extent practicable for 
                the purpose of inertial fusion energy research and 
                development.
    (b) Plan for United States Fusion Experiment.--
            (1) In general.--The Secretary, after consultation with the 
        Fusion Energy Sciences Advisory Committee, shall develop a plan 
        for construction in the United States of a magnetic fusion 
        burning plasma experiment for the purpose of accelerating 
        scientific understanding of fusion plasmas. The Secretary shall 
        request a review of the plan by the National Academy of 
        Sciences and shall transmit the plan and the review to the 
        Congress by July 1, 2004.
            (2) Requirements of plan.--The plan described in paragraph 
        (1) shall--
                    (A) address key burning plasma physics issues; and
                    (B) include specific information on the scientific 
                capabilities of the proposed experiment, the relevance 
                of these capabilities to the goal of practical fusion 
                energy, and the overall design of the experiment 
                including its estimated cost and potential construction 
                sites.
    (c) Plan for Participation in an International Experiment.--In 
addition to the plan described in subsection (b), the Secretary, after 
consultation with the Fusion Energy Sciences Advisory Committee, may 
also develop a plan for United States participation in an international 
burning plasma experiment for the same purpose, whose construction is 
found by the Secretary to be highly likely and where United States 
participation is cost-effective relative to the cost and scientific 
benefits of a domestic experiment described in subsection (b). If the 
Secretary elects to develop a plan under this subsection, he shall 
include the information described in subsection (b)(2), and an estimate 
of the cost of United States participation in such an international 
experiment. The Secretary shall request a review by the National 
Academy of Sciences of a plan developed under this subsection, and 
shall transmit the plan and the review to the Congress no later than 
July 1, 2004.
    (d) Authorization for Research and Development.--The Secretary, 
through the Office of Science, may conduct any research and development 
necessary to fully develop the plans described in this section.
    (e) Authorization of Appropriations.--From amounts authorized under 
section 1251, the following amounts are authorized for activities under 
this section and for activities of the Fusion Energy Science Program--
            (1) for fiscal year 2003, $335,000,000;
            (2) for fiscal year 2004, $349,000,000;
            (3) for fiscal year 2005, $362,000,000; and
            (4) for fiscal year 2006, $377,000,000.

        Subtitle F--Energy, Safety, and Environmental Protection

SEC. 1261. CRITICAL ENERGY INFRASTRUCTURE PROTECTION RESEARCH AND 
              DEVELOPMENT.

    (a) In General.--The Secretary shall carry out a research, 
development, demonstration and technology deployment program, in 
partnership with industry, on critical energy infrastructure 
protection, consistent with the roles and missions outlined for the 
Secretary in Presidential Decision Directive 63, entitled ``Critical 
Infrastructure Protection''. The program shall have the following 
goals:
            (1) Increase the understanding of physical and information 
        system disruptions to the energy infrastructure that could 
        result in cascading or widespread regional outages.
            (2) Develop energy infrastructure assurance ``best 
        practices'' through vulnerability and risk assessments.
            (3) Protect against, mitigate the effect of, and improve 
        the ability to recover from disruptive incidents within the 
        energy infrastructure.
    (b) Program Scope.--The program under subsection (a) shall include 
research, development, deployment, technology demonstration for--
            (1) analysis of energy infrastructure interdependencies to 
        quantify the impacts of system vulnerabilities in relation to 
        each other;
            (2) probabilistic risk assessment of the energy 
        infrastructure to account for unconventional and terrorist 
        threats;
            (3) incident tracking and trend analysis tools to assess 
        the severity of threats and reported incidents to the energy 
        infrastructure; and
            (4) integrated multisensor, warning and mitigation 
        technologies to detect, integrate, and localize events 
        affecting the energy infrastructure including real time control 
        to permit the reconfiguration of energy delivery systems.
    (c) Regional Coordination.--The program under this section shall 
cooperate with Departmental activities to promote regional coordination 
under section 102 of this Act, to ensure that the technologies and 
assessments developed by the program are transferred in a timely manner 
to State and local authorities, and to the energy industries.
    (d) Coordination With Industry Research Organizations.--The 
Secretary may enter into grants, contracts, and cooperative agreements 
with industry research organizations to facilitate industry 
participation in research under this section and to fulfill applicable 
cost-sharing requirements.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $25,000,000 for fiscal year 2003;
            (2) $26,000,000 for fiscal year 2004;
            (3) $27,000,000 for fiscal year 2005; and
            (4) $28,000,000 for fiscal year 2006.
    (f) Critical Energy Infrastructure Facility Defined.--For purposes 
of this section, the term ``critical energy infrastructure facility'' 
means a physical or cyber-based system or service for the generation, 
transmission or distribution of electrical energy, or the production, 
refining, transportation, or storage of petroleum, natural gas, or 
petroleum product, the incapacity or destruction of which would have a 
debilitating impact on the defense or economic security of the United 
States. The term shall not include a facility that is licensed by the 
Nuclear Regulatory Commission under section 103 or 104b of the Atomic 
Energy Act of 1954 (42 U.S.C. 2133 and 2134(b)).

SEC. 1262. RESEARCH AND DEMONSTRATION FOR REMEDIATION OF GROUNDWATER 
              FROM ENERGY ACTIVITIES.

    (a) In General.--The Secretary shall carry out a research, 
development, demonstration, and technology deployment program to 
improve methods for environmental restoration of groundwater 
contaminated by energy activities, including oil and gas production, 
surface and underground mining of coal, and in-situ extraction of 
energy resources.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section $10,000,000 for 
each of fiscal years 2003 through 2006.

           TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

               Subtitle A--Department of Energy Programs

SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RESEARCH.

    (a) Program Direction.--The Secretary, acting through the Office of 
Science, shall conduct a comprehensive research program to understand 
and address the effects of energy production and use on the global 
climate system.
    (b) Program Elements.--
            (1) Climate modeling.--The Secretary shall--
                    (A) conduct observational and analytical research 
                to acquire and interpret the data needed to describe 
                the radiation balance from the surface of the Earth to 
                the top of the atmosphere;
                    (B) determine the factors responsible for the 
                Earth's radiation balance and incorporate improved 
                understanding of such factors in climate models;
                    (C) improve the treatment of aerosols and clouds in 
                climate models;
                    (D) reduce the uncertainty in decade-to-century 
                model-based projections of climate change; and
                    (E) increase the availability and utility of 
                climate change simulations to researchers and policy 
                makers interested in assessing the relationship between 
                energy and climate change.
            (2) Carbon cycle.--The Secretary shall--
                    (A) carry out field research and modeling 
                activities--
                            (i) to understand and document the net 
                        exchange of carbon dioxide between major 
                        terrestrial ecosystems and the atmosphere; or
                            (ii) to evaluate the potential of proposed 
                        methods of carbon sequestration;
                    (B) develop and test carbon cycle models; and
                    (C) acquire data and develop and test models to 
                simulate and predict the transport, transformation, and 
                fate of energy-related emissions in the atmosphere.
            (3) Ecological processes.--The Secretary shall carry out 
        long-term experiments of the response of intact terrestrial 
        ecosystems to--
                    (A) alterations in climate and atmospheric 
                composition; or
                    (B) land-use changes that affect ecosystem extent 
                and function.
            (4) Integrated assessment.--The Secretary shall develop and 
        improve methods and tools for integrated analyses of the 
        climate change system from emissions of aerosols and greenhouse 
        gases to the consequences of these emissions on climate and the 
        resulting effects of human-induced climate change on economic 
        and social systems, with emphasis on critical gaps in 
        integrated assessment modeling, including modeling of 
        technology innovation and diffusion and the development of 
        metrics of economic costs of climate change and policies for 
        mitigating or adapting to climate change.
    (c) Authorization of Appropriations.--From amounts authorized under 
section 1251(b), there are authorized to be appropriated to the 
Secretary for carrying out activities under this section--
            (1) $150,000,000 for fiscal year 2003;
            (2) $175,000,000 for fiscal year 2004;
            (3) $200,000,000 for fiscal year 2005; and
            (4) $230,000,000 for fiscal year 2006.-
    (d) Limitation on Funds.--Funds authorized to be appropriated under 
this section shall not be used for the development, demonstration, or 
deployment of technology to reduce, avoid, or sequester greenhouse gas 
emissions.

SEC. 1302. AMENDMENTS TO THE FEDERAL NONNUCLEAR RESEARCH AND 
              DEVELOPMENT ACT OF 1974.

    Section 6 of the Federal Nonnuclear Energy Research and Development 
Act of 1974 (42 U.S.C. 5905) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3) by striking the period at the 
                end and inserting ``, and''; and
                    (C) by adding at the end the following:
            ``(4) solutions to the effective management of greenhouse 
        gas emissions in the long term by the development of 
        technologies and practices designed to--
                    ``(A) reduce or avoid anthropogenic emissions of 
                greenhouse gases;
                    ``(B) remove and sequester greenhouse gases from 
                emissions streams; and
                    ``(C) remove and sequester greenhouse gases from 
                the atmosphere.''; and
            (2) in subsection (b)--
                    (A) in paragraph (2), by striking ``subsection 
                (a)(1) through (3)'' and inserting ``paragraphs (1) 
                through (4) of subsection (a)''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (R), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (S), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(T) to pursue a long-term climate technology 
                strategy designed to demonstrate a variety of 
                technologies by which stabilization of greenhouse gases 
                might be best achieved, including accelerated research, 
                development, demonstration and deployment of--
                            ``(i) renewable energy systems;
                            ``(ii) advanced fossil energy technology;
                            ``(iii) advanced nuclear power plant 
                        design;
                            ``(iv) fuel cell technology for 
                        residential, industrial and transportation 
                        applications;
                            ``(v) carbon sequestration practices and 
                        technologies, including agricultural and 
                        forestry practices that store and sequester 
                        carbon;
                            ``(vi) efficient electrical generation, 
                        transmission and distribution technologies; and
                            ``(vii) efficient end use energy 
                        technologies.''.

             Subtitle B--Department of Agriculture Programs

SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED RESEARCH.

    (a) Basic Research.--
            (1) In general.--The Secretary of Agriculture shall carry 
        out research in the areas of soil science that promote 
        understanding of--
                    (A) the net sequestration of organic carbon in 
                soil; and
                    (B) net emissions of other greenhouse gases from 
                agriculture.
            (2) Agricultural research service.--The Secretary of 
        Agriculture, acting through the Agricultural Research Service, 
        shall collaborate with other Federal agencies in developing 
        data and carrying out research addressing soil carbon fluxes 
        (losses and gains) and net emissions of methane and nitrous 
        oxide from cultivation and animal management activities.
            (3) Cooperative state research, extension, and education 
        service.--
                    (A) In general.--The Secretary of Agriculture, 
                acting through the Cooperative State Research, 
                Extension, and Education Service, shall establish a 
                competitive grant program to carry out research on the 
                matters described in paragraph (1) in land grant 
                universities and other research institutions.
                    (B) Consultation on research topics.--Before 
                issuing a request for proposals for basic research 
                under paragraph (1), the Cooperative State Research, 
                Extension, and Education Service shall consult with the 
                Agricultural Research Service to ensure that proposed 
                research areas are complementary with and do not 
                duplicate research projects underway at the 
                Agricultural Research Service or other Federal 
                agencies.
    (b) Applied Research.--
            (1) In general.--The Secretary of Agriculture shall carry 
        out applied research in the areas of soil science, agronomy, 
        agricultural economics and other agricultural sciences to--
                    (A) promote understanding of--
                            (i) how agricultural and forestry practices 
                        affect the sequestration of organic and 
                        inorganic carbon in soil and net emissions of 
                        other greenhouse gases;
                            (ii) how changes in soil carbon pools are 
                        cost-effectively measured, monitored, and 
                        verified; and
                            (iii) how public programs and private 
                        market approaches can be devised to incorporate 
                        carbon sequestration in a broader societal 
                        greenhouse gas emission reduction effort;
                    (B) develop methods for establishing baselines for 
                measuring the quantities of carbon and other greenhouse 
                gases sequestered; and
                    (C) evaluate leakage and performance issues.
            (2) Requirements.--To the maximum extent practicable, 
        applied research under paragraph (1) shall--
                    (A) draw on existing technologies and methods; and
                    (B) strive to provide methodologies that are 
                accessible to a nontechnical audience.
            (3) Minimization of adverse environmental impacts.--All 
        applied research under paragraph (1) shall be conducted with an 
        emphasis on minimizing adverse environmental impacts.
            (4) Natural resources conservation service.--The Secretary 
        of Agriculture, acting through the Natural Resources 
        Conservation Service, shall collaborate with other Federal 
        agencies, including the National Institute of Standards and 
        Technology, in developing new measuring techniques and 
        equipment or adapting existing techniques and equipment to 
        enable cost-effective and accurate monitoring and verification, 
        for a wide range of agricultural and forestry practices, of--
                    (A) changes in soil carbon content in agricultural 
                soils, plants, and trees; and
                    (B) net emissions of other greenhouse gases.
            (5) Cooperative state research, extension, and education 
        service.--
                    (A) In general.--The Secretary of Agriculture, 
                acting through the Cooperative State Research, 
                Extension, and Education Service, shall establish a 
                competitive grant program to encourage research on the 
                matters described in paragraph (1) by land grant 
                universities and other research institutions.
                    (B) Consultation on research topics.--Before 
                issuing a request for proposals for applied research 
                under paragraph (1), the Cooperative State Research, 
                Extension, and Education Service shall consult with the 
                National Resources Conservation Service and the 
                Agricultural Research Service to ensure that proposed 
                research areas are complementary with and do not 
                duplicate research projects underway at the 
                Agricultural Research Service or other Federal 
                agencies.
    (c) Research Consortia.--
            (1) In general.--The Secretary of Agriculture may designate 
        not more than two research consortia to carry out research 
        projects under this section, with the requirement that the 
        consortia propose to conduct basic research under subsection 
        (a) and applied research under subsection (b).
            (2) Selection.--The consortia shall be selected in a 
        competitive manner by the Cooperative State Research, 
        Extension, and Education Service.
            (3) Eligible consortium participants.--Entities eligible to 
        participate in a consortium include--
                    (A) land grant colleges and universities;
                    (B) private research institutions;
                    (C) State geological surveys;
                    (D) agencies of the Department of Agriculture;
                    (E) research centers of the National Aeronautics 
                and Space Administration and the Department of Energy;
                    (F) other Federal agencies;
                    (G) representatives of agricultural businesses and 
                organizations with demonstrated expertise in these 
                areas; and
                    (H) representatives of the private sector with 
                demonstrated expertise in these areas.
            (4) Reservation of funding.--If the Secretary of 
        Agriculture designates one or two consortia, the Secretary of 
        Agriculture shall reserve for research projects carried out by 
        the consortium or consortia not more than 25 percent of the 
        amounts made available to carry out this section for a fiscal 
        year.
    (d) Standards of Precision.--
            (1) Conference.--Not later than 3 years after the date of 
        enactment of this subtitle, the Secretary of Agriculture, 
        acting through the Agricultural Research Service and in 
        consultation with the Natural Resources Conservation Service, 
        shall convene a conference of key scientific experts on carbon 
        sequestration and measurement techniques from various sectors 
        (including the Government, academic, and private sectors) to--
                    (A) discuss benchmark standards of precision for 
                measuring soil carbon content and net emissions of 
                other greenhouse gases;
                    (B) designate packages of measurement techniques 
                and modeling approaches to achieve a level of precision 
                agreed on by the participants in the conference; and
                    (C) evaluate results of analyses on baseline, 
                permanence, and leakage issues.
            (2) Development of benchmark standards.--
                    (A) In general.--The Secretary shall develop 
                benchmark standards for measuring the carbon content of 
                soils and plants (including trees) based on--
                            (i) information from the conference under 
                        paragraph (1);
                            (ii) research conducted under this section; 
                        and
                            (iii) other information available to the 
                        Secretary.
                    (B) Opportunity for public comment.--The Secretary 
                shall provide an opportunity for the public to comment 
                on benchmark standards developed under subparagraph 
                (A).
            (3) Report.--Not later than 180 days after the conclusion 
        of the conference under paragraph (1), the Secretary of 
        Agriculture shall submit to the Committee on Agriculture of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report on the results 
        of the conference.
    (e) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section $25,000,000 for each of fiscal years 
        2003 through 2006.
            (2) Allocation.--Of the amounts made available to carry out 
        this section for a fiscal year, at least 50 percent shall be 
        allocated for competitive grants by the Cooperative State 
        Research, Extension, and Education Service.

SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION PROJECTS AND OUTREACH.

    (a) Demonstration Projects.--
            (1) Development of monitoring programs.--
                    (A) In general.--The Secretary of Agriculture, 
                acting through the Natural Resources Conservation 
                Service and in cooperation with local extension agents, 
                experts from land grant universities, and other local 
                agricultural or conservation organizations, shall 
                develop user-friendly programs that combine measurement 
                tools and modeling techniques into integrated packages 
                to monitor the carbon sequestering benefits of 
                conservation practices and net changes in greenhouse 
                gas emissions.
                    (B) Benchmark levels of precision.--The programs 
                developed under subparagraph (A) shall strive to 
                achieve benchmark levels of precision in measurement in 
                a cost-effective manner.
            (2) Projects.--
                    (A) In general.--The Secretary of Agriculture, 
                acting through the Farm Service Agency, shall establish 
                a program under which projects use the monitoring 
                programs developed under paragraph (1) to demonstrate 
                the feasibility of methods of measuring, verifying, and 
                monitoring--
                            (i) changes in organic carbon content and 
                        other carbon pools in agricultural soils, 
                        plants, and trees; and
                            (ii) net changes in emissions of other 
                        greenhouse gases.
                    (B) Evaluation of implications.--The projects under 
                subparagraph (A) shall include evaluation of the 
                implications for reassessed baselines, carbon or other 
                greenhouse gas leakage, and permanence of 
                sequestration.
                    (C) Submission of proposals.--Proposals for 
                projects under subparagraph (A) shall be submitted by 
                the appropriate agency of each State, in cooperation 
                with interested local jurisdictions and State 
                agricultural and conservation organizations.
                    (D) Limitation.--Not more than 10 projects under 
                subparagraph (A) may be approved in conjunction with 
                applied research projects under section 1311(b) until 
                benchmark measurement and assessment standards are 
                established under section 1311(d).
                    (E) National forest system land.--The Secretary of 
                Agriculture shall consider the use of National Forest 
                System land as sites to demonstrate the feasibility of 
                monitoring programs developed under paragraph (1).
    (b) Outreach.--
            (1) In general.--The Cooperative State Research, Extension, 
        and Education Service shall widely disseminate information 
        about the economic and environmental benefits that can be 
        generated by adoption of conservation practices (including 
        benefits from increased sequestration of carbon and reduced 
        emission of other greenhouse gases).
            (2) Project results.--The Cooperative State Research, 
        Extension, and Education Service shall inform farmers, 
        ranchers, and State agricultural and energy offices in each 
        State of--
                    (A) the results of demonstration projects under 
                subsection (a)(2) in the State; and
                    (B) the ways in which the methods demonstrated in 
                the projects might be applicable to the operations of 
                those farmers and ranchers.
            (3) Policy outreach.--On a periodic basis, the Cooperative 
        State Research, Extension, and Education Service shall 
        disseminate information on the policy nexus between global 
        climate change mitigation strategies and agriculture, so that 
        farmers and ranchers may better understand the global 
        implications of the activities of farmers and ranchers.
    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        carry out this section $10,000,000 for each of fiscal years 
        2003 through 2006.
            (2) Allocation.--Of the amounts made available to carry out 
        this section for a fiscal year, at least 50 percent shall be 
        allocated for demonstration projects under subsection (a)(2).

SEC. 1313. CARBON STORAGE AND SEQUESTRATION ACCOUNTING RESEARCH.

    (a) In General.--The Secretary of Agriculture, in collaboration 
with the heads of other Federal agencies, shall conduct research on, 
develop, and publish as appropriate, carbon storage and sequestration 
accounting models, reference tables, or other tools that can assist 
landowners and others in cost-effective and reliable quantification of 
the carbon release, sequestration, and storage expected to result from 
various resource uses, land uses, practices, activities or forest, 
agricultural, or cropland management practices over various periods of 
time.
    (b) Pilot Programs.--The Secretary of Agriculture shall make 
competitive grants to not more than five eligible entities to carry out 
pilot programs to demonstrate and assess the potential for development 
and use of carbon inventories and accounting systems that can assist in 
developing and assessing carbon storage and sequestration policies and 
programs. Not later than 1 year after the date of enactment of this 
section, the Secretary of Agriculture, in collaboration with the heads 
of other Federal agencies and with other interested parties, shall 
develop guidelines for such pilot programs, including eligibility for 
awards, application contents, reporting requirements, and mechanisms 
for peer review.
    (c) Report.--Not later than 5 years after the date of enactment of 
this section, the Secretary of Agriculture, in collaboration with the 
heads of other Federal agencies, shall submit to Congress a report on 
the technical, institutional, infrastructure, design and funding needs 
to establish and maintain a national carbon storage and sequestration 
baseline and accounting system. The report shall include documentation 
of the results of each of the pilot programs.
    (d) Authorization of Appropriations.--For the purposes of this 
section, there are authorized to be appropriated to the Secretary of 
Agriculture $20,000,000 for fiscal years 2003 through 2007.

          Subtitle C--International Energy Technology Transfer

SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

    (a) Definitions.--In this section:
            (1) Clean energy technology.--The term ``clean energy 
        technology'' means an energy supply or end-use technology that, 
        over its lifecycle and compared to a similar technology already 
        in commercial use in developing countries, countries in 
        transition, and other partner countries--
                    (A) emits substantially lower levels of pollutants 
                or greenhouse gases; and
                    (B) may generate substantially smaller or less 
                toxic volumes of solid or liquid waste.
            (2) Interagency working group.--The term ``interagency 
        working group'' means the Interagency Working Group on Clean 
        Energy Technology Exports established under subsection (b).
    (b) Interagency Working Group.--
            (1) Establishment.--Not later than 90 days after the date 
        of enactment of this section, the Secretary of Energy, the 
        Secretary of Commerce, and the Administrator of the United 
        States Agency for International Development shall jointly 
        establish a Interagency Working Group on Clean Energy 
        Technology Exports. The interagency working group will focus on 
        opening and expanding energy markets and transferring clean 
        energy technology to the developing countries, countries in 
        transition, and other partner countries that are expected to 
        experience, over the next 20 years, the most significant growth 
        in energy production and associated greenhouse gas emissions, 
        including through technology transfer programs under the 
        Framework Convention on Climate Change, other international 
        agreements, and relevant Federal efforts.
            (2) Membership.--The interagency working group shall be 
        jointly chaired by representatives appointed by the agency 
        heads under paragraph (1) and shall also include 
        representatives from the Department of State, the Department of 
        the Treasury, the Environmental Protection Agency, the Export-
        Import Bank, the Overseas Private Investment Corporation, the 
        Trade and Development Agency, and other Federal agencies as 
        deemed appropriate by all three agency heads under paragraph 
        (1).
            (3) Duties.--The interagency working group shall--
                    (A) analyze technology, policy, and market 
                opportunities for international development, 
                demonstration, and deployment of clean energy 
                technology;
                    (B) investigate issues associated with building 
                capacity to deploy clean energy technology in 
                developing countries, countries in transition, and 
                other partner countries, including--
                            (i) energy-sector reform;
                            (ii) creation of open, transparent, and 
                        competitive markets for energy technologies;
                            (iii) availability of trained personnel to 
                        deploy and maintain the technology; and
                            (iv) demonstration and cost-buydown 
                        mechanisms to promote first adoption of the 
                        technology;
                    (C) examine relevant trade, tax, international, and 
                other policy issues to assess what policies would help 
                open markets and improve United States clean energy 
                technology exports in support of the following areas--
                            (i) enhancing energy innovation and 
                        cooperation, including energy sector and market 
                        reform, capacity building, and financing 
                        measures;
                            (ii) improving energy end-use efficiency 
                        technologies, including buildings and 
                        facilities, vehicle, industrial, and co-
                        generation technology initiatives; and
                            (iii) promoting energy supply technologies, 
                        including fossil, nuclear, and renewable 
                        technology initiatives;
                    (D) establish an advisory committee involving the 
                private sector and other interested groups on the 
                export and deployment of clean energy technology;
                    (E) monitor each agency's progress towards meeting 
                goals in the 5-year strategic plan submitted to 
                Congress pursuant to the Energy and Water Development 
                Appropriations Act, 2001, and the Energy and Water 
                Development Appropriations Act, 2002;
                    (F) make recommendations to heads of appropriate 
                Federal agencies on ways to streamline Federal programs 
                and policies to improve each agency's role in the 
                international development, demonstration, and 
                deployment of clean energy technology;
                    (G) make assessments and recommendations regarding 
                the distinct technological, market, regional, and 
                stakeholder challenges necessary to carry out the 
                program; and
                    (H) recommend conditions and criteria that will 
                help ensure that United States funds promote sound 
                energy policies in participating countries while 
                simultaneously opening their markets and exporting 
                United States energy technology.
    (c) Federal Support for Clean Energy Technology Transfer.--
Notwithstanding any other provision of law, each Federal agency or 
Government corporation carrying out an assistance program in support of 
the activities of United States persons in the environment or energy 
sector of a developing country, country in transition, or other partner 
country shall support, to the maximum extent practicable, the transfer 
of United States clean energy technology as part of that program.
    (d) Annual Report.--Not later than 90 days after the date of the 
enactment of this Act, and on April 1st of each year thereafter, the 
Interagency Working Group shall submit a report to Congress on its 
activities during the preceding calendar year. The report shall include 
a description of the technology, policy, and market opportunities for 
international development, demonstration, and deployment of clean 
energy technology investigated by the Interagency Working Group in that 
year, as well as any policy recommendations to improve the expansion of 
clean energy markets and United States clean energy technology exports.
    (e) Report on Use of Funds.--Not later than October 1, 2002, and 
each year thereafter, the Secretary of State, in consultation with 
other Federal agencies, shall submit a report to Congress indicating 
how United States funds appropriated for clean energy technology 
exports and other relevant Federal programs are being directed in a 
manner that promotes sound energy policy commitments in developing 
countries, countries in transition, and other partner countries, 
including efforts pursuant to multilateral environmental agreements.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the departments, agencies, and entities of the United 
States described in subsection (b) such sums as may be necessary to 
support the transfer of clean energy technology, consistent with the 
subsidy codes of the World Trade Organization, as part of assistance 
programs carried out by those departments, agencies, and entities in 
support of activities of United States persons in the energy sector of 
a developing country, country in transition, or other partner country.

SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT PROGRAM.

    Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 13387) is 
amended by striking subsection (l) and inserting the following:
    ``(l) International Energy Technology Deployment Program.--
            ``(1) Definitions.--In this subsection:
                    ``(A) International energy deployment project.--The 
                term `international energy deployment project' means a 
                project to construct an energy production facility 
                outside the United States--
                            ``(i) the output of which will be consumed 
                        outside the United States; and
                            ``(ii) the deployment of which will result 
                        in a greenhouse gas reduction per unit of 
                        energy produced when compared to the technology 
                        that would otherwise be implemented--
                                    ``(I) 10 percentage points or more, 
                                in the case of a unit placed in service 
                                before January 1, 2010;
                                    ``(II) 20 percentage points or 
                                more, in the case of a unit placed in 
                                service after December 31, 2009, and 
                                before January 1, 2020; or
                                    ``(III) 30 percentage points or 
                                more, in the case of a unit placed in 
                                service after December 31, 2019, and 
                                before January 1, 2030.
                    ``(B) Qualifying international energy deployment 
                project.--The term `qualifying international energy 
                deployment project' means an international energy 
                deployment project that--
                            ``(i) is submitted by a United States firm 
                        to the Secretary in accordance with procedures 
                        established by the Secretary by regulation;
                            ``(ii) uses technology that has been 
                        successfully developed or deployed in the 
                        United States;
                            ``(iii) meets the criteria of subsection 
                        (k);
                            ``(iv) is approved by the Secretary, with 
                        notice of the approval being published in the 
                        Federal Register; and
                            ``(v) complies with such terms and 
                        conditions as the Secretary establishes by 
                        regulation.
                    ``(C) United states.--For purposes of this 
                paragraph, the term `United States', when used in a 
                geographical sense, means the 50 States, the District 
                of Columbia, Puerto Rico, Guam, the Virgin Islands, 
                American Samoa, and the Commonwealth of the Northern 
                Mariana Islands.
            ``(2) Pilot program for financial assistance.--
                    ``(A) In general.--Not later than 180 days after 
                the date of enactment of this subsection, the Secretary 
                shall, by regulation, provide for a pilot program for 
                financial assistance for qualifying international 
                energy deployment projects.
                    ``(B) Selection criteria.--After consultation with 
                the Secretary of State, the Secretary of Commerce, and 
                the United States Trade Representative, the Secretary 
                shall select projects for participation in the program 
                based solely on the criteria under this title and 
                without regard to the country in which the project is 
                located.
                    ``(C) Financial assistance.--
                            ``(i) In general.--A United States firm 
                        that undertakes a qualifying international 
                        energy deployment project that is selected to 
                        participate in the pilot program shall be 
                        eligible to receive a loan or a loan guarantee 
                        from the Secretary.
                            ``(ii) Rate of interest.--The rate of 
                        interest of any loan made under clause (i) 
                        shall be equal to the rate for Treasury 
                        obligations then issued for periods of 
                        comparable maturities.
                            ``(iii) Amount.--The amount of a loan or 
                        loan guarantee under clause (i) shall not 
                        exceed 50 percent of the total cost of the 
                        qualified international energy deployment 
                        project.
                            ``(iv) Developed countries.--Loans or loan 
                        guarantees made for projects to be located in a 
                        developed country, as listed in Annex I of the 
                        United Nations Framework Convention on Climate 
                        Change, shall require at least a 50 percent 
                        contribution towards the total cost of the loan 
                        or loan guarantee by the host country.
                            ``(v) Developing countries.--Loans or loan 
                        guarantees made for projects to be located in a 
                        developing country (those countries not listed 
                        in Annex I of the United Nations Framework 
                        Convention on Climate Change) shall require at 
                        least a 10 percent contribution towards the 
                        total cost of the loan or loan guarantee by the 
                        host country.
                            ``(vi) Capacity building research.--
                        Proposals made for projects to be located in a 
                        developing country may include a research 
                        component intended to build technological 
                        capacity within the host country. Such research 
                        must be related to the technologies being 
                        deployed and must involve both an institution 
                        in the host country and an industry, university 
                        or national laboratory participant from the 
                        United States. The host institution shall 
                        contribute at least 50 percent of funds 
                        provided for the capacity building research.
                    ``(D) Coordination with other programs.--A 
                qualifying international energy deployment project 
                funded under this section shall not be eligible as a 
                qualifying clean coal technology under section 415 of 
                the Clean Air Act (42 U.S.C. 7651n).
                    ``(E) Report.--Not later than 5 years after the 
                date of enactment of this subsection, the Secretary 
                shall submit to the President a report on the results 
                of the pilot projects.
                    ``(F) Recommendation.--Not later than 60 days after 
                receiving the report under subparagraph (E), the 
                President shall submit to Congress a recommendation, 
                based on the results of the pilot projects as reported 
                by the Secretary of Energy, concerning whether the 
                financial assistance program under this section should 
                be continued, expanded, reduced, or eliminated.
            ``(3) Authorization of appropriations.--There are 
        authorized to be appropriated to the Secretary to carry out 
        this section $100,000,000 for each of fiscal years 2003 through 
        2011, to remain available until expended.''.

           Subtitle D--Climate Change Science and Information

      PART I--AMENDMENTS TO THE GLOBAL CHANGE RESEARCH ACT OF 1990

SEC. 1331. AMENDMENT OF GLOBAL CHANGE RESEARCH ACT OF 1990.

    Except as otherwise expressly provided, whenever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Global 
Change Research Act of 1990 (15 U.S.C. 2921 et seq.).

SEC. 1332. CHANGES IN DEFINITIONS.

    Paragraph (1) of section 2 (15 U.S.C. 2921) is amended by striking 
``Earth and Environmental Sciences'' inserting ``Global Change 
Research''.

SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

    Section 102 (15 U.S.C. 2932) is amended--
            (1) by striking ``earth and environmental sciences'' in the 
        section heading and inserting ``global change research'';
            (2) by striking ``Earth and Environmental Sciences'' in 
        subsection (a) and inserting ``Global Change Research'';
            (3) by striking the last sentence of subsection (b) and 
        inserting ``The representatives shall be the Deputy Secretary 
        or the Deputy Secretary's designee (or, in the case of an 
        agency other than a department, the deputy head of that agency 
        or the deputy's designee).'';
            (4) by striking ``Chairman of the Council,'' in subsection 
        (c) and inserting ``Director of the Office of National Climate 
        Change Policy with advice from the Chairman of the Council, 
        and'';
            (5) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (6) by inserting after subsection (c) the following:
    ``(d) Subcommittees and Working Groups.--
            ``(1) In general.--There shall be a Subcommittee on Global 
        Change Research, which shall carry out such functions of the 
        Committee as the Committee may assign to it.
            ``(2) Membership.--The membership of the Subcommittee shall 
        consist of--
                    ``(A) the membership of the Subcommittee on Global 
                Change Research of the Committee on Environment and 
                Natural Resources (the functions of which are 
                transferred to the Subcommittee established by this 
                subsection) established by the National Science and 
                Technology Council; and
                    ``(B) such additional members as the Chair of the 
                Committee may, from time to time, appoint.
            ``(3) Chair.--A high ranking official of one of the 
        departments or agencies described in subsection (b), appointed 
        by the Chair of the Committee with advice from the Chairman of 
        the Council, shall chair the subcommittee. The Chairperson 
        shall be knowledgeable and experienced with regard to the 
        administration of scientific research programs, and shall be a 
        representative of an agency that contributes substantially, in 
        terms of scientific research capability and budget, to the 
        Program.
            ``(4) Other subcommittees and working groups.--The 
        Committee may establish such additional subcommittees and 
        working groups as it sees fit.''.

SEC. 1334. CHANGE IN NATIONAL GLOBAL CHANGE RESEARCH PLAN.

    Section 104 (15 U.S.C. 2934) is amended--
            (1) by inserting ``short-term and long-term'' before 
        ``goals'' in subsection (b)(1);
            (2) by striking ``usable information on which to base 
        policy decisions related to'' in subsection (b)(1) and 
        inserting ``information relevant and readily usable by local, 
        State, and Federal decisionmakers, as well as other end-users, 
        for the formulation of effective decisions and strategies for 
        measuring, predicting, preventing, mitigating, and adapting 
        to'';
            (3) by adding at the end of subsection (c) the following:
            ``(6) Methods for integrating information to provide 
        predictive and other tools for planning and decisionmaking by 
        governments, communities and the private sector.'';
            (4) by striking subsection (d)(3) and inserting the 
        following:
            ``(3) combine and interpret data from various sources to 
        produce information readily usable by local, State, and Federal 
        policymakers, and other end-users, attempting to formulate 
        effective decisions and strategies for preventing, mitigating, 
        and adapting to the effects of global change.'';
            (5) by striking ``and'' in subsection (d)(2);
            (6) by striking ``change.'' in subsection (d)(3) and 
        inserting ``change; and'';
            (7) by adding at the end of subsection (d) the following:
            ``(4) establish a common assessment and modeling framework 
        that may be used in both research and operations to predict and 
        assess the vulnerability of natural and managed ecosystems and 
        of human society in the context of other environmental and 
        social changes.''; and
            (8) by adding at the end the following:
    ``(g) Strategic Plan; Revised Implementation Plan.--The Chairman of 
the Council, through the Committee, shall develop a strategic plan for 
the United States Global Climate Change Research Program for the 10-
year period beginning in 2002 and submit the plan to the Congress 
within 180 days after the date of enactment of the Global Climate 
Change Act of 2002. The Chairman, through the Committee, shall also 
submit revised implementation plans as required under subsection 
(a).''.

SEC. 1335. INTEGRATED PROGRAM OFFICE.

    Section 105 (15 U.S.C. 2935) is amended--
            (1) by redesignating subsections (a), (b), and (c) as 
        subsections (b), (c), and (d), respectively; and
            (2) by inserting before subsection (b), as redesignated, 
        the following:
    ``(a) Integrated Program Office.--
            ``(1) Establishment.--There is established in the Office of 
        Science and Technology Policy an integrated program office for 
        the global change research program.
            ``(2) Organization.--The integrated program office 
        established under paragraph (1) shall be headed by the 
        associate director with responsibility for climate change 
        science and technology and shall include, to the maximum extent 
        feasible, a representative from each Federal agency 
        participating in the global change research program.
            ``(3) Function.--The integrated program office shall--
                    ``(A) manage, working in conjunction with the 
                Committee, interagency coordination and program 
                integration of global change research activities and 
                budget requests;
                    ``(B) ensure that the activities and programs of 
                each Federal agency or department participating in the 
                program address the goals and objectives identified in 
                the strategic research plan and interagency 
                implementation plans;
                    ``(C) ensure program and budget recommendations of 
                the Committee are communicated to the President and are 
                integrated into the climate change action strategy;
                    ``(D) review, solicit, and identify, and allocate 
                funds for, partnership projects that address critical 
                research objectives or operational goals of the 
                program, including projects that would fill research 
                gaps identified by the program, and for which project 
                resources are shared among at least two agencies 
                participating in the program; and
                    ``(E) review and provide recommendations on, in 
                conjunction with the Committee, all annual 
                appropriations requests from Federal agencies or 
                departments participating in the program.'';
            (3) by striking ``Committee.'' in paragraph (2) of 
        subsection (c), as redesignated, and inserting ``Committee and 
        the Integrated Program Office.''; and
            (4) by inserting ``and the Integrated Program Office'' 
        after ``Committee'' in paragraph (1) of subsection (d), as 
        redesignated.

SEC. 1336. RESEARCH GRANTS.

    Section 105 (15 U.S.C. 2935) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c) Research Grants.--
            ``(1) Committee to develop list of priority research 
        areas.--The Committee shall develop a list of priority areas 
        for research and development on climate change that are not 
        being addressed by Federal agencies.
            ``(2) Director of ostp to transmit list to nsf.--The 
        Director of the Office of Science and Technology Policy shall 
        transmit the list to the National Science Foundation.
            ``(3) Funding through nsf.--
                    ``(A) Budget request.--The National Science 
                Foundation shall include, as part of the annual request 
                for appropriations for the Science and Technology 
                Policy Institute, a request for appropriations to fund 
                research in the priority areas on the list developed 
                under paragraph (1).
                    ``(B) Authorization.--For fiscal year 2003 and each 
                fiscal year thereafter, there are authorized to be 
                appropriated to the National Science Foundation not 
                less than $17,000,000, to be made available through the 
                Science and Technology Policy Institute, for research 
                in those priority areas.''.

SEC. 1337. EVALUATION OF INFORMATION.

    Section 106 (15 U.S.C. 2936) is amended--
            (1) by striking ``Scientific'' in the section heading;
            (2) by striking ``and'' after the semicolon in paragraph 
        (2); and
            (3) by striking ``years.'' in paragraph (3) and inserting 
        ``years; and''; and
            (4) by adding at the end the following:
            ``(4) evaluates the information being developed under this 
        title, considering in particular its usefulness to local, 
        State, and national decisionmakers, as well as to other 
        stakeholders such as the private sector, after providing a 
        meaningful opportunity for the consideration of the views of 
        such stakeholders on the effectiveness of the Program and the 
        usefulness of the information.''.

           PART II--NATIONAL CLIMATE SERVICES AND MONITORING

SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM ACT.

    Except as otherwise expressly provided, whenever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the National 
Climate Program Act (15 U.S.C. 2901 et seq.).

SEC. 1342. CHANGES IN FINDINGS.

        Section 2 (15 U.S.C. 2901) is amended--
            (1) by striking ``Weather and climate change affect'' in 
        paragraph (1) and inserting ``Weather, climate change, and 
        climate variability affect public safety, environmental 
        security, human health,'';
            (2) by striking ``climate'' in paragraph (2) and inserting 
        ``climate, including seasonal and decadal fluctuations,'';
            (3) by striking ``changes.'' in paragraph (5) and inserting 
        ``changes and providing free exchange of meteorological 
        data.''; and
            (4) by adding at the end the following:
            ``(7) The present rate of advance in research and 
        development and application of such advances is inadequate and 
        new developments must be incorporated rapidly into services for 
        the benefit of the public.
            ``(8) The United States lacks adequate infrastructure and 
        research to meet national climate monitoring and prediction 
        needs.''.

SEC. 1343. TOOLS FOR REGIONAL PLANNING.

    Section 5(d) (15 U.S.C. 2904(d)) is amended--
            (1) by redesignating paragraphs (4) through (9) as 
        paragraphs (5) through (10), respectively;
            (2) by inserting after paragraph (3) the following:
            ``(4) methods for improving modeling and predictive 
        capabilities and developing assessment methods to guide 
        national, regional, and local planning and decisionmaking on 
        land use, water hazards, and related issues;'';
            (3) by inserting ``sharing,'' after ``collection,'' in 
        paragraph (5), as redesignated;
            (4) by striking ``experimental'' each place it appears in 
        paragraph (9), as redesignated;
            (5) by striking ``preliminary'' in paragraph (10), as 
        redesignated;
            (6) by striking ``this Act,'' the first place it appears in 
        paragraph (10), as redesignated, and inserting ``the Global 
        Climate Change Act of 2002,''; and
            (7) by striking ``this Act,'' the second place it appears 
        in paragraph (10), as redesignated, and inserting ``that 
        Act,''.

SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

    Section 9 (15 U.S.C. 2908) is amended--
            (1) by striking ``1979,'' and inserting ``2002,'';
            (2) by striking ``1980,'' and inserting ``2003,'';
            (3) by striking ``1981,'' and inserting ``2004,''; and
            (4) by striking ``$25,500,000'' and inserting 
        ``$75,500,000''.

SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

    The Act (15 U.S.C. 2901 et seq.) is amended by inserting after 
section 5 the following:

``SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

    ``Within 1 year after the date of enactment of the Global Climate 
Change Act of 2002, the Secretary of Commerce shall submit to the 
Senate Committee on Commerce, Science, and Transportation and the House 
Science Committee a plan of action for a National Climate Service under 
the National Climate Program. The plan shall set forth recommendations 
and funding estimates for--
            ``(1) a national center for operational climate monitoring 
        and predicting with the functional capacity to monitor and 
        adjust observing systems as necessary to reduce bias;
            ``(2) the design, deployment, and operation of an adequate 
        national climate observing system that builds upon existing 
        environmental monitoring systems and closes gaps in coverage by 
        existing systems;
            ``(3) the establishment of a national coordinated modeling 
        strategy, including a national climate modeling center to 
        provide a dedicated capability for climate modeling and a 
        regular schedule of projections on a long- and short-term time 
        schedule and at a range of spatial scales;
            ``(4) improvements in modeling and assessment capabilities 
        needed to integrate information to predict regional and local 
        climate changes and impacts;
            ``(5) in coordination with the private sector, improving 
        the capacity to assess the impacts of predicted and projected 
        climate changes and variations;
            ``(6) a program for long-term stewardship, quality control, 
        development of relevant climate products, and efficient access 
        to all relevant climate data, products, and critical model 
        simulations; and
            ``(7) mechanisms to coordinate among Federal agencies, 
        State, and local government entities and the academic community 
        to ensure timely and full sharing and dissemination of climate 
        information and services, both domestically and 
        internationally.''.

SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND COOPERATION.

    The Secretary of Commerce, in cooperation with the Administrator of 
the National Aeronautics and Space Administration, shall conduct 
international research in the Pacific region that will increase 
understanding of the nature and predictability of climate variability 
in the Asia-Pacific sector, including regional aspects of global 
environmental change. Such research activities shall be conducted in 
cooperation with other nations of the region. There are authorized to 
be appropriated for purposes of this section $1,500,000 to the National 
Oceanic and Atmospheric Administration, $1,500,000 to the National 
Aeronautics and Space Administration, and $500,000 for the Pacific ENSO 
Applications Center.

SEC. 1347. REPORTING ON TRENDS.

    (a) Atmospheric Monitoring and Verification Program.--The Secretary 
of Commerce, in coordination with relevant Federal agencies, shall, as 
part of the National Climate Service, establish an atmospheric 
monitoring and verification program utilizing aircraft, satellite, 
ground sensors, and modeling capabilities to monitor, measure, and 
verify atmospheric greenhouse gas levels, dates, and emissions. Where 
feasible, the program shall measure emissions from identified sources 
participating in the reporting system for verification purposes. The 
program shall use measurements and standards that are consistent with 
those utilized in the greenhouse gas measurement and reporting system 
established under subsection (a) and the registry established under 
section 1102.
    (b) Annual Reporting.--The Secretary of Commerce shall issue an 
annual report that identifies greenhouse emissions and trends on a 
local, regional, and national level. The report shall also identify 
emissions or reductions attributable to individual or multiple sources 
covered by the greenhouse gas measurement and reporting system 
established under section 1102.

SEC. 1348. ARCTIC RESEARCH AND POLICY.

    (a) Arctic Research Commission.--Section 103(d) of the Arctic 
Research and Policy Act of 1984 (15 U.S.C. 4102(d)) is amended--
            (1) by striking ``exceed 90 days'' in the second sentence 
        of paragraph (1) and inserting ``exceed, in the case of the 
        chairperson of the Commission, 120 days, and, in the case of 
        any other member of the Commission, 90 days,'';
            (2) by striking ``Chairman'' in paragraph (2) and inserting 
        ``chairperson''.
    (b) Grants.--Section 104 of the Arctic Research and Policy Act of 
1984 (15 U.S.C. 4103) is amended by adding at the end the following:
    ``(c) Funding for Arctic Research.--
            ``(1) In general.--With the prior approval of the 
        commission, or under authority delegated by the Commission, and 
        subject to such conditions as the Commission may specify, the 
        Executive Director appointed under section 106(a) may--
                    ``(A) make grants to persons to conduct research 
                concerning the Arctic; and
                    ``(B) make funds available to the National Science 
                Foundation or to Federal agencies for the conduct of 
                research concerning the Arctic.
            ``(2) Effect of action by executive director.--An action 
        taken by the executive director under paragraph (1) shall be 
        final and binding on the Commission.
            ``(3) Authorization of appropriations.--There are 
        authorized to be appropriated to the Commission such sums as 
        are necessary to carry out this section.''.

SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

    (a) In General.--The Secretary of Commerce, through the National 
Oceanic and Atmospheric Administration, shall carry out a program of 
scientific research on potential abrupt climate change designed--
            (1) to develop a global array of terrestrial and 
        oceanographic indicators of paleoclimate in order sufficiently 
        to identify and describe past instances of abrupt climate 
        change;
            (2) to improve understanding of thresholds and 
        nonlinearities in geophysical systems related to the mechanisms 
        of abrupt climate change;
            (3) to incorporate these mechanisms into advanced 
        geophysical models of climate change; and
            (4) to test the output of these models against an improved 
        global array of records of past abrupt climate changes.
    (b) Abrupt Climate Change Defined.--In this section, the term 
``abrupt climate change'' means a change in climate that occurs so 
rapidly or unexpectedly that human or natural systems may have 
difficulty adapting to it.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce $10,000,000 for each of the 
fiscal years 2003 through 2008, and such sums as may be necessary for 
fiscal years after fiscal year 2008, to carry out subsection (a).

             PART III--OCEAN AND COASTAL OBSERVING SYSTEM 

SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

    (a) Establishment.--The President, through the National Ocean 
Research Leadership Council, established by section 7902(a) of title 
10, United States Code, shall establish and maintain an integrated 
ocean and coastal observing system that provides for long-term, 
continuous, and real-time observations of the oceans and coasts for the 
purposes of--
            (1) understanding, assessing and responding to human-
        induced and natural processes of global change;
            (2) improving weather forecasts and public warnings;
            (3) strengthening national security and military 
        preparedness;
            (4) enhancing the safety and efficiency of marine 
        operations;
            (5) supporting efforts to restore the health of and manage 
        coastal and marine ecosystems and living resources;
            (6) monitoring and evaluating the effectiveness of ocean 
        and coastal environmental policies;
            (7) reducing and mitigating ocean and coastal pollution; 
        and
            (8) providing information that contributes to public 
        awareness of the state and importance of the oceans.
    (b) Council Functions.--In addition to its responsibilities under 
section 7902(a) of such title, the Council shall be responsible for 
planning and coordinating the observing system and in carrying out this 
responsibility shall--
            (1) develop and submit to the Congress, within 6 months 
        after the date of enactment of this Act, a plan for 
        implementing a national ocean and coastal observing system 
        that--
                    (A) uses an end-to-end engineering and development 
                approach to develop a system design and schedule for 
                operational implementation;
                    (B) determines how current and planned observing 
                activities can be integrated in a cost-effective 
                manner;
                    (C) provides for regional and concept demonstration 
                projects;
                    (D) describes the role and estimated budget of each 
                Federal agency in implementing the plan;
                    (E) contributes, to the extent practicable, to the 
                National Global Change Research Plan under section 104 
                of the Global Change Research Act of 1990 (15 U.S.C. 
                2934); and
                    (F) makes recommendations for coordination of ocean 
                observing activities of the United States with those of 
                other nations and international organizations;
            (2) serve as the mechanism for coordinating Federal ocean 
        observing requirements and activities;
            (3) work with academic, State, industry and other actual 
        and potential users of the observing system to make effective 
        use of existing capabilities and incorporate new technologies;
            (4) approve standards and protocols for the administration 
        of the system, including--
                    (A) a common set of measurements to be collected 
                and distributed routinely and by uniform methods;
                    (B) standards for quality control and assessment of 
                data;
                    (C) design, testing and employment of forecast 
                models for ocean conditions;
                    (D) data management, including data transfer 
                protocols and archiving; and
                    (E) designation of coastal ocean observing regions; 
                and
            (5) in consultation with the Secretary of State, provide 
        representation at international meetings on ocean observing 
        programs and coordinate relevant Federal activities with those 
        of other nations.
    (c) System Elements.--The integrated ocean and coastal observing 
system shall include the following elements:
            (1) A nationally coordinated network of regional coastal 
        ocean observing systems that measure and disseminate a common 
        set of ocean observations and related products in a uniform 
        manner and according to sound scientific practice, but that are 
        adapted to local and regional needs.
            (2) Ocean sensors for climate observations, including the 
        Arctic Ocean and sub-polar seas.
            (3) Coastal, relocatable, and cabled sea floor 
        observatories.
            (4) Broad bandwidth communications that are capable of 
        transmitting high volumes of data from open ocean locations at 
        low cost and in real time.
            (5) Ocean data management and assimilation systems that 
        ensure full use of new sources of data from space-borne and in 
        situ sensors.
            (6) Focused research programs.
            (7) Technology development program to develop new observing 
        technologies and techniques, including data management and 
        dissemination.
            (8) Public outreach and education.

SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

    For development and implementation of an integrated ocean and 
coastal observation system under this title, including financial 
assistance to regional coastal ocean observing systems, there are 
authorized to be appropriated $235,000,000 in fiscal year 2003, 
$315,000,000 in fiscal year 2004, $390,000,000 in fiscal year 2005, and 
$445,000,000 in fiscal year 2006.

                 Subtitle E--Climate Change Technology

SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

    Section 2(c) of the National Institute of Standards and Technology 
Act (15 U.S.C. 272(c)) is amended--
            (1) by striking ``and'' after the semicolon in paragraph 
        (21);
            (2) by redesignating paragraph (22) as paragraph (23); and
            (3) by inserting after paragraph (21) the following:
            ``(22) perform research to develop enhanced measurements, 
        calibrations, standards, and technologies which will enable the 
        reduced production in the United States of greenhouse gases 
        associated with global warming, including carbon dioxide, 
        methane, nitrous oxide, ozone, perfluorocarbons, 
        hydrofluorocarbons, and sulfur hexafluoride; and''.

SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

    The Secretary of Commerce shall initiate a program to develop, with 
technical assistance from appropriate Federal agencies, innovative 
standards and measurement technologies (including technologies to 
measure carbon changes due to changes in land use cover) to calculate--
            (1) greenhouse gas emissions and reductions from 
        agriculture, forestry, and other land use practices;
            (2) noncarbon dioxide greenhouse gas emissions from 
        transportation;
            (3) greenhouse gas emissions from facilities or sources 
        using remote sensing technology; and
            (4) any other greenhouse gas emission or reductions for 
        which no accurate or reliable measurement technology exists.

SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS.

    The National Institute of Standards and Technology Act (15 U.S.C. 
271 et seq.) is amended--
            (1) by redesignating sections 17 through 32 as sections 18 
        through 33, respectively; and
            (2) by inserting after section 16 the following:

``SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES.

    ``(a) In General.--The Director shall establish within the 
Institute a program to perform and support research on global climate 
change standards and processes, with the goal of providing scientific 
and technical knowledge applicable to the reduction of greenhouse gases 
(as defined in section 4 of the Global Climate Change Act of 2002).
    ``(b) Research Program.--
            ``(1) In general.--The Director is authorized to conduct, 
        directly or through contracts or grants, a global climate 
        change standards and processes research program.
            ``(2) Research projects.--The specific contents and 
        priorities of the research program shall be determined in 
        consultation with appropriate Federal agencies, including the 
        Environmental Protection Agency, the National Oceanic and 
        Atmospheric Administration, and the National Aeronautics and 
        Space Administration. The program generally shall include basic 
        and applied research--
                    ``(A) to develop and provide the enhanced 
                measurements, calibrations, data, models, and reference 
                material standards which will enable the monitoring of 
                greenhouse gases;
                    ``(B) to assist in establishing a baseline 
                reference point for future trading in greenhouse gases 
                and the measurement of progress in emissions reduction;
                    ``(C) that will be exchanged internationally as 
                scientific or technical information which has the 
                stated purpose of developing mutually recognized 
                measurements, standards, and procedures for reducing 
                greenhouse gases; and
                    ``(D) to assist in developing improved industrial 
                processes designed to reduce or eliminate greenhouse 
                gases.
    ``(c) National Measurement Laboratories.--
            ``(1) In general.--In carrying out this section, the 
        Director shall utilize the collective skills of the National 
        Measurement Laboratories of the National Institute of Standards 
        and Technology to improve the accuracy of measurements that 
        will permit better understanding and control of these 
        industrial chemical processes and result in the reduction or 
        elimination of greenhouse gases.
            ``(2) Material, process, and building research.--The 
        National Measurement Laboratories shall conduct research under 
        this subsection that includes--
                    ``(A) developing material and manufacturing 
                processes which are designed for energy efficiency and 
                reduced greenhouse gas emissions into the environment;
                    ``(B) developing environmentally-friendly, `green' 
                chemical processes to be used by industry; and
                    ``(C) enhancing building performance with a focus 
                in developing standards or tools which will help 
                incorporate low- or no-emission technologies into 
                building designs.
            ``(3) Standards and tools.--The National Measurement 
        Laboratories shall develop standards and tools under this 
        subsection that include software to assist designers in 
        selecting alternate building materials, performance data on 
        materials, artificial intelligence-aided design procedures for 
        building subsystems and `smart buildings', and improved test 
        methods and rating procedures for evaluating the energy 
        performance of residential and commercial appliances and 
        products.
    ``(d) National Voluntary Laboratory Accreditation Program.--The 
Director shall utilize the National Voluntary Laboratory Accreditation 
Program under this section to establish a program to include specific 
calibration or test standards and related methods and protocols 
assembled to satisfy the unique needs for accreditation in measuring 
the production of greenhouse gases. In carrying out this subsection the 
Director may cooperate with other departments and agencies of the 
Federal Government, State and local governments, and private 
organizations.''.

SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

  The Director of the National Institute of Standards and Technology, 
through the Manufacturing Extension Partnership Program, may develop a 
program to support the implementation of new ``green'' manufacturing 
technologies and techniques by the more than 380,000 small 
manufacturers.

SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Director to carry 
out functions pursuant to sections 1345, 1351, and 1361 through 1363, 
$10,000,000 for fiscal years 2002 through 2006.

         Subtitle F--Climate Adaptation and Hazards Prevention

                   PART I--ASSESSMENT AND ADAPTATION 

SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTATION PROGRAM.

    (a) In General.--The President shall establish within the 
Department of Commerce a National Climate Change Vulnerability and 
Adaptation Program for regional impacts related to increasing 
concentrations of greenhouse gases in the atmosphere and climate 
variability.
    (b) Coordination.--In designing such program the Secretary shall 
consult with the Federal Emergency Management Agency, the Environmental 
Protection Agency, the Army Corps of Engineers, the Department of 
Transportation, and other appropriate Federal, State, and local 
government entities.
    (c) Vulnerability Assessments.--The program shall--
            (1) evaluate, based on predictions and other information 
        developed under this Act and the National Climate Program Act 
        (15 U.S.C. 2901 et seq.), regional vulnerability to phenomena 
        associated with climate change and climate variability, 
        including--
                    (A) increases in severe weather events;
                    (B) sea level rise and shifts in the hydrological 
                cycle;
                    (C) natural hazards, including tsunami, drought, 
                flood and fire; and
                    (D) alteration of ecological communities, including 
                at the ecosystem or watershed levels; and
            (2) build upon predictions and other information developed 
        in the National Assessments prepared under the Global Change 
        Research Act of 1990 (15 U.S.C. 2921 et seq.).
    (d) Preparedness Recommendations.--The program shall submit a 
report to Congress within 2 years after the date of enactment of this 
Act that identifies and recommends implementation and funding 
strategies for short- and long-term actions that may be taken at the 
national, regional, State, and local level--
            (1) to reduce vulnerability of human life and property;
            (2) to improve resilience to hazards;
            (3) to minimize economic impacts; and
            (4) to reduce threats to critical biological and ecological 
        processes.
    (e) Information and Technology.--The Secretary shall make available 
appropriate information and other technologies and products that will 
assist national, regional, State, and local efforts, as well as efforts 
by other end-users, to reduce loss of life and property, and coordinate 
dissemination of such technologies and products.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce $4,500,000 to implement the 
requirements of this section.

SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

    (a) Coastal Vulnerability.--Within 2 years after the date of 
enactment of this Act, the Secretary shall, in consultation with the 
appropriate Federal, State, and local governmental entities, conduct 
regional assessments of the vulnerability of coastal areas to hazards 
associated with climate change, climate variability, sea level rise, 
and fluctuation of Great Lakes water levels. The Secretary may also 
establish, as warranted, longer term regional assessment programs. The 
Secretary may also consult with the governments of Canada and Mexico as 
appropriate in developing such regional assessments. In preparing the 
regional assessments, the Secretary shall collect and compile current 
information on climate change, sea level rise, natural hazards, and 
coastal erosion and mapping, and specifically address impacts on Arctic 
regions and the Central, Western, and South Pacific regions. The 
regional assessments shall include an evaluation of--
            (1) social impacts associated with threats to and potential 
        losses of housing, communities, and infrastructure;
            (2) physical impacts such as coastal erosion, flooding and 
        loss of estuarine habitat, saltwater intrusion of aquifers and 
        saltwater encroachment, and species migration; and
            (3) economic impact on local, State, and regional 
        economies, including the impact on abundance or distribution of 
        economically important living marine resources.
    (b) Coastal Adaptation Plan.--The Secretary shall, within 3 years 
after the date of enactment of this Act, submit to the Congress a 
national coastal adaptation plan, composed of individual regional 
adaptation plans that recommend targets and strategies to address 
coastal impacts associated with climate change, sea level rise, or 
climate variability. The plan shall be developed with the participation 
of other Federal, State, and local government agencies that will be 
critical in the implementation of the plan at the State and local 
levels. The regional plans that will make up the national coastal 
adaptation plan shall be based on the information contained in the 
regional assessments and shall identify special needs associated with 
Arctic areas and the Central, Western, and South Pacific regions. The 
Plan shall recommend both short- and long-term adaptation strategies 
and shall include recommendations regarding--
            (1) Federal flood insurance program modifications;
            (2) areas that have been identified as high risk through 
        mapping and assessment;
            (3) mitigation incentives such as rolling easements, 
        strategic retreat, State or Federal acquisition in fee simple 
        or other interest in land, construction standards, and zoning;
            (4) land and property owner education;
            (5) economic planning for small communities dependent upon 
        affected coastal resources, including fisheries; and
            (6) funding requirements and mechanisms.
    (c) Technical Planning Assistance.--The Secretary, through the 
National Ocean Service, shall establish a coordinated program to 
provide technical planning assistance and products to coastal States 
and local governments as they develop and implement adaptation or 
mitigation strategies and plans. Products, information, tools and 
technical expertise generated from the development of the regional 
assessments and the regional adaptation plans will be made available to 
coastal States for the purposes of developing their own State and local 
plans.
    (d) Coastal Adaptation Grants.--The Secretary shall provide grants 
of financial assistance to coastal States with federally approved 
coastal zone management programs to develop and begin implementing 
coastal adaptation programs if the State provides a Federal-to-State 
match of 4 to 1 in the first fiscal year, 2.3 to 1 in the second fiscal 
year, 2 to 1 in the third fiscal year, and 1 to 1 thereafter. 
Distribution of these funds to coastal States shall be based upon the 
formula established under section 306(c) of the Coastal Zone Management 
Act of 1972 (16 U.S.C. 1455(c)), adjusted in consultation with the 
States as necessary to provide assistance to particularly vulnerable 
coastlines.
    (e) Coastal Response Pilot Program.--
            (1) In general.--The Secretary shall establish a 4-year 
        pilot program to provide financial assistance to coastal 
        communities most adversely affected by the impact of climate 
        change or climate variability that are located in States with 
        federally approved coastal zone management programs.
            (2) Eligible projects.--A project is eligible for financial 
        assistance under the pilot program if it--
                    (A) will restore or strengthen coastal resources, 
                facilities, or infrastructure that have been damaged by 
                such an impact, as determined by the Secretary;
                    (B) meets the requirements of the Coastal Zone 
                Management Act (16 U.S.C. 1451 et seq.) and is 
                consistent with the coastal zone management plan of the 
                State in which it is located; and
                    (C) will not cost more than $100,000.
            (3) Funding share.--The Federal funding share of any 
        project under this subsection may not exceed 75 percent of the 
        total cost of the project. In the administration of this 
        paragraph--
                    (A) the Secretary may take into account in-kind 
                contributions and other noncash support of any project 
                to determine the Federal funding share for that 
                project; and
                    (B) the Secretary may waive the requirements of 
                this paragraph for a project in a community if--
                            (i) the Secretary determines that the 
                        project is important; and
                            (ii) the economy and available resources of 
                        the community in which the project is to be 
                        conducted are insufficient to meet the non-
                        Federal share of the project's costs.
    (f) Definitions.--Any term used in this section that is defined in 
section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1453) 
has the meaning given it by that section.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated $3,000,000 annually for regional assessments under 
subsection (a), and $3,000,000 annually for coastal adaptation grants 
under subsection (d).

SEC. 1373. ARCTIC RESEARCH CENTER.

    (a) Establishment.--The Secretary of Commerce, in consultation with 
the Secretaries of Energy and the Interior, the Director of the 
National Science Foundation, and the Administrator of the Environmental 
Protection Agency, shall establish a joint research facility, to be 
known as the Barrow Arctic Research Center, to support climate change 
and other scientific research activities in the Arctic.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretaries of Commerce, Energy, and the Interior, 
the Director of the National Science Foundation, and the Administrator 
of the Environmental Protection Agency, $35,000,000 for the planning, 
design, construction, and support of the Barrow Arctic Research Center.

           PART II--FORECASTING AND PLANNING PILOT PROGRAMS 

SEC. 1381. REMOTE SENSING PILOT PROJECTS.

    (a) In General.--The Administrator of the National Aeronautics and 
Space Administration may establish, through the National Oceanic and 
Atmospheric Administration's Coastal Services Center, a program of 
grants for competitively awarded pilot projects to explore the 
integrated use of sources of remote sensing and other geospatial 
information to address State, local, regional, and tribal agency needs 
to forecast a plan for adaptation to coastal zone and land use changes 
that may result as a consequence of global climate change or climate 
variability.
    (b) Preferred Projects.--In awarding grants under this section, the 
Center shall give preference to projects that--
            (1) focus on areas that are most sensitive to the 
        consequences of global climate change or climate variability;
            (2) make use of existing public or commercial data sets;
            (3) integrate multiple sources of geospatial information, 
        such as geographic information system data, satellite-provided 
        positioning data, and remotely sensed data, in innovative ways;
            (4) offer diverse, innovative approaches that may serve as 
        models for establishing a future coordinated framework for 
        planning strategies for adaptation to coastal zone and land use 
        changes related to global climate change or climate 
        variability;
            (5) include funds or in-kind contributions from non-Federal 
        sources;
            (6) involve the participation of commercial entities that 
        process raw or lightly processed data, often merging that data 
        with other geospatial information, to create data products that 
        have significant value added to the original data; and
            (7) taken together demonstrate as diverse a set of public 
        sector applications as possible.
    (c) Opportunities.--In carrying out this section, the Center shall 
seek opportunities to assist--
            (1) in the development of commercial applications 
        potentially available from the remote sensing industry; and
            (2) State, local, regional, and tribal agencies in applying 
        remote sensing and other geospatial information technologies 
        for management and adaptation to coastal and land use 
        consequences of global climate change or climate variability.
    (d) Duration.--Assistance for a pilot project under subsection (a) 
shall be provided for a period of not more than 3 years.
    (e) Responsibilities of Grantees.--Within 180 days after completion 
of a grant project, each recipient of a grant under subsection (a) 
shall transmit a report to the Center on the results of the pilot 
project and conduct at least one workshop for potential users to 
disseminate the lessons learned from the pilot project as widely as 
feasible.
    (f) Regulations.--The Center shall issue regulations establishing 
application, selection, and implementation procedures for pilot 
projects, and guidelines for reports and workshops required by this 
section.

SEC. 1382. DATABASE ESTABLISHMENT.

    The Center shall establish and maintain an electronic, Internet-
accessible database of the results of each pilot project completed 
under section 1381.

SEC. 1383. AIR QUALITY RESEARCH, FORECASTS AND WARNINGS.

    (a) Regional Studies.--The Secretary of Commerce, through the 
Administrator of the National Oceanographic and Atmospheric 
Administration, shall, in order of priority as listed in section (c), 
conduct regional studies of the air quality within specific regions of 
the United States. Such studies should assess the effects of in situ 
emissions of air pollutants and their precursors, transport of such 
emissions and precursors from outside the region, and production of air 
pollutants within the region via chemical reactions.
    (b) Forecasts and Warnings.--The Secretary of Commerce, through the 
Administrator of the National Oceanographic and Atmospheric 
Administration, shall, in order of priority as listed in section (c), 
establish a program to provide operational air quality forecasts and 
warnings for specific regions of the United States.
    (c) Definition.--For the purposes of this section, the term 
``specific regions of the United States'' means the following 
geographical areas:
            (1) the Northeast, composed of Main, New Hampshire, 
        Vermont, Massachusetts, Rhode Island, Connecticut, New York, 
        New Jersey, Pennsylvania, Maryland, Delaware, the District of 
        Columbia, and West Virginia;
            (2) the Southeast, composed of Virginia, North Carolina, 
        South Carolina, Georgia, Alabama, and Florida;
            (3) the Midwest, composed of Minnesota, Wisconsin, Iowa, 
        Missouri, Illinois, Kentucky, Indiana, Ohio, and Michigan;
            (4) the South, composed of Tennessee, Mississippi, 
        Louisiana, Arkansas, Oklahoma, and Texas;
            (5) the High Plains, composed of North Dakota, South 
        Dakota, Nebraska, and Kansas;
            (6) the Northwest, composed of Washington, Oregon, Idaho, 
        Montana, and Wyoming;
            (7) the Southwest, composed of California, Nevada, Utah, 
        Colorado, Arizona, and New Mexico;
            (8) Alaska; and
            (9) Hawaii.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Commerce $3,000,000 for each of fiscal 
years 2003 through 2006 for studies pursuant to subsection (b) of this 
section, and $5,000,000 for fiscal year 2003 and such sums as may be 
necessary for subsequent fiscal years for the forecast and warning 
program pursuant to subsection (c) of this section.

SEC. 1384. DEFINITIONS.

    In this subtitle:
            (1) Center.--The term ``Center'' means the Coastal Services 
        Center of the National Oceanic and Atmospheric Administration.
            (2) Geospatial information.--The term ``geospatial 
        information'' means knowledge of the nature and distribution of 
        physical and cultural features on the landscape based on 
        analysis of data from airborne or spaceborne platforms or other 
        types and sources of data.
            (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning given that 
        term in section 101(a) of the Higher Education Act of 1965 (20 
        U.S.C. 1001(a)).

SEC. 1385. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Administrator to 
carry out the provisions of this subtitle--
            (1) $17,500,000 for fiscal year 2003;
            (2) $20,000,000 for fiscal year 2004;
            (3) $22,500,000 for fiscal year 2005; and
            (4) $25,000,000 for fiscal year 2006.

      TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

SEC. 1401. DEFINITIONS.

    In this title:
            (1) Applicability of definitions.--The definitions in 
        section 1203 shall apply.
            (2) Single-purpose research facility.--The term ``single-
        purpose research facility'' means any of the following 
        primarily single purpose entities owned by the Department of 
        Energy--
                    (A) Ames Laboratory;
                    (B) East Tennessee Technology Park;
                    (C) Environmental Measurement Laboratory;
                    (D) Fernald Environmental Management Project;
                    (E) Fermi National Accelerator Laboratory;
                    (F) Kansas City Plant;
                    (G) Nevada Test Site;
                    (H) New Brunswick Laboratory;
                    (I) Pantex Weapons Facility;
                    (J) Princeton Plasma Physics Laboratory;
                    (K) Savannah River Technology Center;
                    (L) Stanford Linear Accelerator Center;
                    (M) Thomas Jefferson National Accelerator Facility;
                    (N) Y-12 facility at Oak Ridge National Laboratory;
                    (O) Waste Isolation Pilot Plant; or
                    (P) other similar organization of the Department 
                designated by the Secretary that engages in technology 
                transfer, partnering, or licensing activities.

SEC. 1402. AVAILABILITY OF FUNDS.

    Funds authorized to be appropriated to the Department of Energy 
under title XII, title XIII, and title XV shall remain available until 
expended.

SEC. 1403. COST SHARING.

    (a) Research and Development.--For research and development 
projects funded from appropriations authorized under subtitles A 
through D of title XII, the Secretary shall require a commitment from 
non-Federal sources of at least 20 percent of the cost of the project. 
The Secretary may reduce or eliminate the non-Federal requirement under 
this subsection if the Secretary determines that the research and 
development is of a basic or fundamental nature.
    (b) Demonstration and Deployment.--For demonstration and technology 
deployment activities funded from appropriations authorized under 
subtitles A through D of title XII, the Secretary shall require a 
commitment from non-Federal sources of at least 50 percent of the costs 
of the project directly and specifically related to any demonstration 
or technology deployment activity. The Secretary may reduce or 
eliminate the non-Federal requirement under this subsection if the 
Secretary determines that the reduction is necessary and appropriate 
considering the technological risks involved in the project and is 
necessary to meet one or more goals of this title.
    (c) Calculation of Amount.--In calculating the amount of the non-
Federal commitment under subsection (a) or (b), the Secretary shall 
include cash, personnel, services, equipment, and other resources.

SEC. 1404. MERIT REVIEW OF PROPOSALS.

    Awards of funds authorized under title XII, subtitle A of title 
XIII, and title XV shall be made only after an independent review of 
the scientific and technical merit of the proposals for such awards has 
been made by the Department of Energy.

SEC. 1405. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

    (a) National Energy Research and Development Advisory Boards.--(1) 
The Secretary shall establish an advisory board to oversee Department 
research and development programs in each of the following areas--
            (A) energy efficiency;
            (B) renewable energy;
            (C) fossil energy;
            (D) nuclear energy; and
            (E) climate change technology, with emphasis on 
        integration, collaboration, and other special features of the 
        cross-cutting technologies supported by the Office of Climate 
        Change Technology.
    (2) The Secretary may designate an existing advisory board within 
the Department to fulfill the responsibilities of an advisory board 
under this subsection, or may enter into appropriate arrangements with 
the National Academy of Sciences to establish such an advisory board.
    (b) Utilization of Existing Committees.--The Secretary of Energy 
shall continue to use the scientific program advisory committees 
chartered under the Federal Advisory Committee Act by the Office of 
Science to oversee research and development programs under that Office.
    (c) Membership.--Each advisory board under this section shall 
consist of experts drawn from industry, academia, Federal laboratories, 
research institutions, or State, local, or tribal governments, as 
appropriate.
    (d) Meetings and Purposes.--Each advisory board under this section 
shall meet at least semi-annually to review and advise on the progress 
made by the respective research, development, demonstration, and 
technology deployment program. The advisory board shall also review the 
adequacy and relevance of the goals established for each program by 
Congress and the President, and may otherwise advise on promising 
future directions in research and development that should be considered 
by each program.

SEC. 1406. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND 
              TECHNOLOGY PROGRAMS.

    (a) Effective Top-Level Coordination of Research and Development 
Programs.--Section 202(b) of the Department of Energy Organization Act 
(42 U.S.C. 7132(b)) is amended to read as follows:
    ``(b)(1) There shall be in the Department an Under Secretary for 
Energy and Science, who shall be appointed by the President, by and 
with the advice and consent of the Senate. The Under Secretary shall be 
compensated at the rate provided for at level III of the Executive 
Schedule under section 5314 of title 5, United States Code.
    ``(2) The Under Secretary for Energy and Science shall be appointed 
from among persons who--
            ``(A) have extensive background in scientific or 
        engineering fields; and
            ``(B) are well qualified to manage the civilian research 
        and development programs of the Department of Energy.
    ``(3) The Under Secretary for Energy and Science shall--
            ``(A) serve as the Science and Technology Advisor to the 
        Secretary;
            ``(B) monitor the Department's research and development 
        programs in order to advise the Secretary with respect to any 
        undesirable duplication or gaps in such programs;
            ``(C) advise the Secretary with respect to the well-being 
        and management of the multipurpose laboratories under the 
        jurisdiction of the Department;
            ``(D) advise the Secretary with respect to education and 
        training activities required for effective short- and long-term 
        basic and applied research activities of the Department;
            ``(E) advise the Secretary with respect to grants and other 
        forms of financial assistance required for effective short- and 
        long-term basic and applied research activities of the 
        Department; and
            ``(F) exercise authority and responsibility over Assistant 
        Secretaries carrying out energy research and development and 
        energy technology functions under sections 203 and 209, as well 
        as other elements of the Department assigned by the 
        Secretary.''.
    (b) Reconfiguration of Position of Director of the Office of 
Science.--Section 209 of the Department of Energy Organization Act (41 
U.S.C. 7139) is amended to read as follows:
    ``(a) There shall be within the Department an Office of Science, to 
be headed by an Assistant Secretary of Science, who shall be appointed 
by the President, by and with the advice and consent of the Senate, and 
who shall be compensated at the rate provided for level IV of the 
Executive Schedule under section 5315 of title 5, United States Code.
    ``(b) The Assistant Secretary of Science shall be in addition to 
the Assistant Secretaries provided for under section 203 of this Act.
    ``(c) It shall be the duty and responsibility of the Assistant 
Secretary of Science to carry out the fundamental science and 
engineering research functions of the Department, including the 
responsibility for policy and management of such research, as well as 
other functions vested in the Secretary which he may assign to the 
Assistant Secretary.''.
    (c) Additional Assistant Secretary Position To Enable Improved 
Management of Nuclear Energy Issues.--
            (1) Section 203(a) of the Department of Energy Organization 
        Act (42 U.S.C. 7133(a)) is amended by striking ``There shall be 
        in the Department six Assistant Secretaries'' and inserting 
        ``Except as provided in section 209, there shall be in the 
        Department seven Assistant Secretaries''.
            (2) It is the sense of the Senate that the leadership for 
        departmental missions in nuclear energy should be at the 
        Assistant Secretary level.
    (d) Technical and Conforming Amendments.--
            (1) Section 202 of the Department of Energy Organization 
        Act (42 U.S.C. 7132) is further amended by adding the following 
        at the end:
    ``(d) There shall be in the Department an Under Secretary, who 
shall be appointed by the President, by and with the advice and consent 
of the Senate, and who shall perform such functions and duties as the 
Secretary shall prescribe, consistent with this section. The Under 
Secretary shall be compensated at the rate provided for level III of 
the Executive Schedule under section 5314 of title 5, United States 
Code.
    ``(e) There shall be in the Department a General Counsel, who shall 
be appointed by the President, by and with the advice and consent of 
the Senate. The General Counsel shall be compensated at the rate 
provided for level IV of the Executive Schedule under section 5315 of 
title 5, United States Code.''.
            (2) Section 5314 of title 5, United States Code, is amended 
        by striking ``Under Secretaries of Energy (2)'' and inserting 
        ``Under Secretaries of Energy (3)''.
            (3) Section 5315 of title 5, United States Code, is amended 
        by--
                    (A) striking ``Director, Office of Science, 
                Department of Energy.''; and
                    (B) striking ``Assistant Secretaries of Energy 
                (6)'' and inserting ``Assistant Secretaries of Energy 
                (8)''.
            (4) The table of contents for the Department of Energy 
        Organization Act (42 U.S.C. 7101 note) is amended--
                    (A) by striking ``Section 209'' and inserting 
                ``Sec. 209'';
                    (B) by striking ``213.'' and inserting ``Sec. 
                213.'';
                    (C) by striking ``214.'' and inserting ``Sec. 
                214.'';
                    (D) by striking ``215.'' and inserting ``Sec. 
                215.''; and
                    (E) by striking ``216.'' and inserting ``Sec. 
                216.''.

SEC. 1407. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER ACTIVITIES.

    (a) Technology Transfer Coordinator.--The Secretary shall appoint a 
Technology Transfer Coordinator to perform oversight of and policy 
development for technology transfer activities at the Department. The 
Technology Transfer Coordinator shall coordinate the activities of the 
Technology Partnerships Working Group, and shall oversee the 
expenditure of funds allocated to the Technology Partnership Working 
Group.
    (b) Technology Partnership Working Group.--The Secretary shall 
establish a Technology Partnership Working Group, which shall consist 
of representatives of the National Laboratories and single-purpose 
research facilities, to--
            (1) coordinate technology transfer activities occurring at 
        National Laboratories and single-purpose research facilities;
            (2) exchange information about technology transfer 
        practices; and
            (3) develop and disseminate to the public and prospective 
        technology partners information about opportunities and 
        procedures for technology transfer with the Department.

SEC. 1408. TECHNOLOGY INFRASTRUCTURE PROGRAM.

    (a) Establishment.--The Secretary shall establish a Technology 
Infrastructure Program in accordance with this section.
    (b) Purpose.--The purpose of the Technology Infrastructure Program 
shall be to improve the ability of National Laboratories or single-
purpose research facilities to support departmental missions by--
            (1) stimulating the development of technology clusters that 
        can support departmental missions at the National Laboratories 
        or single-purpose research facilities;
            (2) improving the ability of National Laboratories or 
        single-purpose research facilities to leverage and benefit from 
        commercial research, technology, products, processes, and 
        services; and
            (3) encouraging the exchange of scientific and 
        technological expertise between National Laboratories or 
        single-purpose research facilities and--
                    (A) institutions of higher education,
                    (B) technology-related business concerns,
                    (C) nonprofit institutions, and
                    (D) agencies of State, tribal, or local 
                governments,
        that can support departmental missions at the National 
        Laboratories and single-purpose research facilities.
    (c) Projects.--The Secretary shall authorize the Director of each 
National Laboratory or facility to implement the Technology 
Infrastructure Program at such National Laboratory or single-purpose 
research facility through projects that meet the requirements of 
subsections (d) and (e).
    (d) Program Requirements.--Each project funded under this section 
shall meet the following requirements:
            (1) Minimum participants.--Each project shall at a minimum 
        include--
                    (A) a National Laboratory or single-purpose 
                research facility; and
                    (B) one of the following entities--
                            (i) a business,
                            (ii) an institution of higher education,
                            (iii) a nonprofit institution, or
                            (iv) an agency of a State, local, or tribal 
                        government.
            (2) Cost sharing.--
                    (A) Minimum amount.--Not less than 50 percent of 
                the costs of each project funded under this section 
                shall be provided from non-Federal sources.
                    (B) Qualified funding and resources.--(i) The 
                calculation of costs paid by the non-Federal sources to 
                a project shall include cash, personnel, services, 
                equipment, and other resources expended on the project.
                    (ii) Independent research and development expenses 
                of Government contractors that qualify for 
                reimbursement under section 31-205-18(e) of the Federal 
                Acquisition Regulations issued pursuant to section 
                25(c)(1) of the Office of Federal Procurement Policy 
                Act (41 U.S.C. 421(c)(1)) may be credited towards costs 
                paid by non-Federal sources to a project, if the 
                expenses meet the other requirements of this section.
                    (iii) No funds or other resources expended either 
                before the start of a project under this section or 
                outside the project's scope of work shall be credited 
                toward the costs paid by the non-Federal sources to the 
                project.
            (3) Competitive selection.--All projects in which a party 
        other than the Department, a National Laboratory, or a single-
        purpose research facility receives funding under this section 
        shall, to the extent practicable, be competitively selected by 
        the National Laboratory or facility using procedures determined 
        to be appropriate by the Secretary.
            (4) Accounting standards.--Any participant that receives 
        funds under this section, other than a National Laboratory or 
        single-purpose research facility, may use generally accepted 
        accounting principles for maintaining accounts, books, and 
        records relating to the project.
            (5) Limitations.--No Federal funds shall be made available 
        under this section for--
                    (A) construction; or
                    (B) any project for more than 5 years.
    (e) Selection Criteria.--
            (1) Threshold funding criteria.--The Secretary shall 
        allocate funds under this section only if the Director of the 
        National Laboratory or single-purpose research facility 
        managing the project determines that the project is likely to 
        improve the ability of the National Laboratory or single-
        purpose research facility to achieve technical success in 
        meeting departmental missions.
            (2) Additional criteria.--The Secretary shall require the 
        Director of the National Laboratory or single-purpose research 
        facility managing a project under this section to consider the 
        following criteria in selecting a project to receive Federal 
        funds--
                    (A) the potential of the project to succeed, based 
                on its technical merit, team members, management 
                approach, resources, and project plan;
                    (B) the potential of the project to promote the 
                development of a commercially sustainable technology 
                cluster, which will derive most of the demand for its 
                products or services from the private sector, and which 
                will support departmental missions at the participating 
                National Laboratory or single-purpose research 
                facility;
                    (C) the potential of the project to promote the use 
                of commercial research, technology, products, 
                processes, and services by the participating National 
                Laboratory or single-purpose research facility to 
                achieve its departmental mission or the commercial 
                development of technological innovations made at the 
                participating National Laboratory or single-purpose 
                research facility;
                    (D) the commitment shown by non-Federal 
                organizations to the project, based primarily on the 
                nature and amount of the financial and other resources 
                they will risk on the project;
                    (E) the extent to which the project involves a wide 
                variety and number of institutions of higher education, 
                nonprofit institutions, and technology-related business 
                concerns that can support the missions of the 
                participating National Laboratory or single-purpose 
                research facility and that will make substantive 
                contributions to achieving the goals of the project;
                    (F) the extent of participation in the project by 
                agencies of State, tribal, or local governments that 
                will make substantive contributions to achieving the 
                goals of the project;
                    (G) the extent to which the project focuses on 
                promoting the development of technology-related 
                business concerns that are small business concerns or 
                involves such small business concerns substantively in 
                the project; and
                    (H) such other criteria as the Secretary determines 
                to be appropriate.
    (f) Report to Congress.--Not later than January 1, 2004, the 
Secretary shall report to Congress on whether the Technology 
Infrastructure Program should be continued and, if so, how the program 
should be managed.
    (g) Definitions.--In this section:
            (1) Technology cluster.--The term ``technology cluster'' 
        means a concentration of--
                    (A) technology-related business concerns;
                    (B) institutions of higher education; or
                    (C) other nonprofit institutions;
        that reinforce each other's performance in the areas of 
        technology development through formal or informal 
        relationships.
            (2) Technology-related business concern.--The term 
        ``technology-related business concern'' means a for-profit 
        corporation, company, association, firm, partnership, or small 
        business concern that--
                    (A) conducts scientific or engineering research,
                    (B) develops new technologies,
                    (C) manufactures products based on new 
                technologies, or
                    (D) performs technological services.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for activities under this section 
$10,000,000 for each of fiscal years 2003 and 2004.

SEC. 1409. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

     (a) Small Business Advocate.--The Secretary shall require the 
Director of each National Laboratory, and may require the Director of a 
single-purpose research facility, to appoint a small business advocate 
to--
            (1) increase the participation of small business concerns, 
        including socially and economically disadvantaged small 
        business concerns, in procurement, collaborative research, 
        technology licensing, and technology transfer activities 
        conducted by the National Laboratory or single-purpose research 
        facility;
            (2) report to the Director of the National Laboratory or 
        single-purpose research facility on the actual participation of 
        small business concerns in procurement and collaborative 
        research along with recommendations, if appropriate, on how to 
        improve participation;
            (3) make available to small business concerns training, 
        mentoring, and clear, up-to-date information on how to 
        participate in the procurement and collaborative research, 
        including how to submit effective proposals;
            (4) increase the awareness inside the National Laboratory 
        or single-purpose research facility of the capabilities and 
        opportunities presented by small business concerns; and
            (5) establish guidelines for the program under subsection 
        (b) and report on the effectiveness of such program to the 
        Director of the National Laboratory or single-purpose research 
        facility.
    (b) Establishment of Small Business Assistance Program.--The 
Secretary shall require the Director of each National Laboratory, and 
may require the director of a single-purpose research facility, to 
establish a program to provide small business concerns--
            (1) assistance directed at making them more effective and 
        efficient subcontractors or suppliers to the National 
        Laboratory or single-purpose research facility; or
            (2) general technical assistance, the cost of which shall 
        not exceed $10,000 per instance of assistance, to improve the 
        small business concern's products or services.
    (c) Use of Funds.--None of the funds expended under subsection (b) 
may be used for direct grants to the small business concerns.
    (d) Definitions.--In this section:
            (1) Small business concern.--The term ``small business 
        concern'' has the meaning given such term in section 3 of the 
        Small Business Act (15 U.S.C. 632).
            (2) Socially and economically disadvantaged small business 
        concerns.--The term ``socially and economically disadvantaged 
        small business concerns'' has the meaning given such term in 
        section 8(a)(4) of the Small Business Act (15 U.S.C. 
        637(a)(4)).

SEC. 1410. OTHER TRANSACTIONS.

    (a) In General.--Section 646 of the Department of Energy 
Organization Act (42 U.S.C. 7256) is amended by adding at the end the 
following:
    ``(g) Other Transactions Authority.--(1) In addition to other 
authorities granted to the Secretary to enter into procurement 
contracts, leases, cooperative agreements, grants, and other similar 
arrangements, the Secretary may enter into other transactions with 
public agencies, private organizations, or persons on such terms as the 
Secretary may deem appropriate in furtherance of basic, applied, and 
advanced research functions now or hereafter vested in the Secretary. 
Such other transactions shall not be subject to the provisions of 
section 9 of the Federal Nonnuclear Energy Research and Development Act 
of 1974 (42 U.S.C. 5908).
    ``(2)(A) The Secretary of Energy shall ensure that--
            ``(i) to the maximum extent practicable, no transaction 
        entered into under paragraph (1) provides for research that 
        duplicates research being conducted under existing programs 
        carried out by the Department of Energy; and
            ``(ii) to the extent that the Secretary determines 
        practicable, the funds provided by the Government under a 
        transaction authorized by paragraph (1) do not exceed the total 
        amount provided by other parties to the transaction.
    ``(B) A transaction authorized by paragraph (1) may be used for a 
research project when the use of a standard contract, grant, or 
cooperative agreement for such project is not feasible or appropriate.
    ``(3)(A) The Secretary shall not disclose any trade secret or 
commercial or financial information submitted by a non-Federal entity 
under paragraph (1) that is privileged and confidential.
    ``(B) The Secretary shall not disclose, for 5 years after the date 
the information is received, any other information submitted by a non-
Federal entity under paragraph (1), including any proposal, proposal 
abstract, document supporting a proposal, business plan, or technical 
information that is privileged and confidential.
    ``(C) The Secretary may protect from disclosure, for up to 5 years, 
any information developed pursuant to a transaction under paragraph (1) 
that would be protected from disclosure under section 552(b)(4) of 
title 5, United States Code, if obtained from a person other than a 
Federal agency.''.
    (b) Implementation.--Not later than 6 months after the date of 
enactment of this section, the Department shall establish guidelines 
for the use of other transactions.

SEC. 1411. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

    Not later than 2 years after the enactment of this section, the 
Secretary, acting through the Technology Transfer Coordinator under 
section 1407, shall determine whether each contractor operating a 
National Laboratory or single-purpose research facility has policies 
and procedures that do not create disincentives to the transfer of 
scientific and technical personnel among the contractor-operated 
National Laboratories or contractor-operated single-purpose research 
facilities.

SEC. 1412. NATIONAL ACADEMY OF SCIENCES REPORT.

    Within 90 days after the date of enactment of this Act, the 
Secretary shall contract with the National Academy of Sciences to--
            (1) conduct a study on the obstacles to accelerating the 
        innovation cycle for energy technology, and
            (2) report to the Congress recommendations for shortening 
        the cycle of research, development, and deployment.

SEC. 1413. REPORT ON TECHNOLOGY READINESS AND BARRIERS TO TECHNOLOGY 
              TRANSFER.

    (a) In General.--The Secretary, acting through the Technology 
Partnership Working Group and in consultation with representatives of 
affected industries, universities, and small business concerns, shall--
            (1) assess the readiness for technology transfer of energy 
        technologies developed through projects funded from 
        appropriations authorized under subtitles A through D of title 
        XIV, and
            (2) identify barriers to technology transfer and 
        cooperative research and development agreements between the 
        Department or a National Laboratory and a non-Federal person; 
        and
            (3) make recommendations for administrative or legislative 
        actions needed to reduce or eliminate such barriers.
    (b) Report.--The Secretary shall provide a report to Congress and 
the President on activities carried out under this section not later 
than 1 year after the date of enactment of this section, and shall 
update such report on a biennial basis, taking into account progress 
toward eliminating barriers to technology transfer identified in 
previous reports under this section.

SEC. 1414. UNITED STATES-MEXICO ENERGY TECHNOLOGY COOPERATION.

    (a) Finding.--Congress finds that the economic and energy security 
of the United States and Mexico is furthered through collaboration 
between the United States and Mexico on research related to energy 
technologies.
    (b) Program.--
            (1) In general.--The Secretary, acting through the 
        Assistant Secretary for Environmental Management, shall 
        establish a collaborative research, development, and deployment 
        program to promote energy efficient, environmentally sound 
        economic development along the United States-Mexico border to--
                    (A) mitigate hazardous waste;
                    (B) promote energy efficient materials processing 
                technologies that minimize environmental damage; and
                    (C) protect the public health.
            (2) Consultation.--The Secretary, acting through the 
        Assistant Secretary for Environmental Management, shall consult 
        with the Office of Energy Efficiency and Renewable Energy in 
        carrying out paragraph (1)(B).
    (c) Program Management.--The program under subsection (b) shall be 
managed by the Department of Energy Carlsbad Environmental Management 
Field Office.
    (d) Cost Sharing.--The cost of any project or activity carried out 
using funds provided under this section shall be shared as provided in 
section 1403.
    (e) Technology Transfer.--In carrying out projects and activities 
under this section to mitigate hazardous waste, the Secretary shall 
emphasize the transfer of technology developed under the Environmental 
Management Science Program of the Department of Energy.
    (f) Intellectual Property.--In carrying out this section, the 
Secretary shall comply with the requirements of any agreement entered 
between the United States and Mexico regarding intellectual property 
protection.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $5,000,000 for fiscal year 2003 
and $6,000,000 for each of fiscal years 2004 through 2006, to remain 
available until expended.

                    TITLE XV--PERSONNEL AND TRAINING

SEC. 1501. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.

    (a) Workforce Trends.--
            (1) Monitoring.--The Secretary of Energy (in this title 
        referred to as the ``Secretary''), acting through the 
        Administrator of the Energy Information Administration, in 
        consultation with the Secretary of Labor, shall monitor trends 
        in the workforce of skilled technical personnel supporting 
        energy technology industries, including renewable energy 
        industries, companies developing and commercializing devices to 
        increase energy-efficiency, the oil and gas industry, the 
        electric power generation industry (including the nuclear power 
        industry), the coal industry, and other industrial sectors as 
        the Secretary may deem appropriate.
            (2) Annual reports.--The Administrator of the Energy 
        Information Administration shall include statistics on energy 
        industry workforce trends in the annual reports of the Energy 
        Information Administration.
            (3) Special reports.--The Secretary shall report to the 
        appropriate committees of Congress whenever the Secretary 
        determines that significant shortfalls of technical personnel 
        in one or more energy industry segments are forecast or have 
        occurred.
    (b) Traineeship Grants for Technically Skilled Personnel.--
            (1) Grant programs.--The Secretary shall establish grant 
        programs in the appropriate offices of the Department to 
        enhance training of technically skilled personnel for which a 
        shortfall is determined under subsection (a).
            (2) Eligible institutions.--As determined by the Secretary 
        to be appropriate to the particular workforce shortfall, the 
        Secretary shall make grants under paragraph (1) to--
                    (A) an institution of higher education;
                    (B) a postsecondary educational institution 
                providing vocational and technical education (within 
                the meaning given those terms in section 3 of the Carl 
                D. Perkins Vocational and Technical Education Act of 
                1998 (20 U.S.C. 2302));
                    (C) appropriate agencies of State, local, or tribal 
                governments; or
                    (D) joint labor and management training 
                organizations with State or federally recognized 
                apprenticeship programs and other employee-based 
                training organizations as the Secretary considers 
                appropriate.
    (c) Definition.--For purposes of this section, the term ``skilled 
technical personnel'' means journey and apprentice level workers who 
are enrolled in or have completed a State or federally recognized 
apprenticeship program and other skilled workers in energy technology 
industries.
    (d) Authorization of Appropriations.--From amounts authorized under 
section 1241(c), there are authorized to be appropriated to the 
Secretary for activities under this section such sums as may be 
necessary for each fiscal year.

SEC. 1502. POSTDOCTORAL AND SENIOR RESEARCH FELLOWSHIPS IN ENERGY 
              RESEARCH.

    (a) Postdoctoral Fellowships.--The Secretary shall establish a 
program of fellowships to encourage outstanding young scientists and 
engineers to pursue postdoctoral research appointments in energy 
research and development at institutions of higher education of their 
choice. In establishing a program under this subsection, the Secretary 
may enter into appropriate arrangements with the National Academy of 
Sciences to help administer the program.
    (b) Distinguished Senior Research Fellowships.--The Secretary shall 
establish a program of fellowships to allow outstanding senior 
researchers in energy research and development and their research 
groups to explore research and development topics of their choosing for 
a fixed period of time. Awards under this program shall be made on the 
basis of past scientific or technical accomplishment and promise for 
continued accomplishment during the period of support, which shall not 
be less than 3 years.
    (c) Authorization of Appropriations.--From amounts authorized under 
section 1241(c), there are authorized to be appropriated to the 
Secretary for activities under this section such sums as may be 
necessary for each fiscal year.

SEC. 1503. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY PERSONNEL.

    (a) Model Guidelines.--The Secretary shall, in cooperation with 
electric generation, transmission, and distribution companies and 
recognized representatives of employees of those entities, develop 
model employee training guidelines to support electric supply system 
reliability and safety.
    (b) Content of Guidelines.--The guidelines under this section shall 
include--
            (1) requirements for worker training, competency, and 
        certification, developed using criteria set forth by the 
        Utility Industry Group recognized by the National Skill 
        Standards Board; and
            (2) consolidation of existing guidelines on the 
        construction, operation, maintenance, and inspection of 
        electric supply generation, transmission and distribution 
        facilities such as those established by the National Electric 
        Safety Code and other industry consensus standards.

SEC. 1504. NATIONAL CENTER ON ENERGY MANAGEMENT AND BUILDING 
              TECHNOLOGIES.

    The Secretary shall establish a National Center on Energy 
Management and Building Technologies, to carry out research, education, 
and training activities to facilitate the improvement of energy 
efficiency and indoor air quality in industrial, commercial and 
residential buildings. The National Center shall be established in 
cooperation with--
            (1) recognized representatives of employees in the heating, 
        ventilation, and air-conditioning industry;
            (2) contractors that install and maintain heating, 
        ventilation and air-conditioning systems and equipment;
            (3) manufacturers of heating, ventilation and air-
        conditioning systems and equipment;
            (4) representatives of the advanced building envelope 
        industry, including design, windows, lighting, and insulation 
        industries; and
            (5) other entities as appropriate.

SEC. 1505. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL 
              CAREERS.

    (a) Department of Energy Science Education Programs.--Section 3164 
of the Department of Energy Science Education Enhancement Act (42 
U.S.C. 7381a) is amended by adding at the end the following:
    ``(c) Programs for Women and Minority Students.--In carrying out a 
program under subsection (a), the Secretary shall give priority to 
activities that are designed to encourage women and minority students 
to pursue scientific and technical careers.''.
    (b) Partnerships With Historically Black Colleges and Universities, 
Hispanic-Servicing Institutions, and Tribal Colleges.--The Department 
of Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is 
amended--
            (1) by redesignating sections 3167 and 3168 as sections 
        3168 and 3169, respectively; and
            (2) by inserting after section 3166 the following:

``SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND 
              UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND TRIBAL 
              COLLEGES.

    ``(a) Definitions.--In this section:
            ``(1) Hispanic-serving institution.--The term `Hispanic-
        serving institution' has the meaning given the term in section 
        502(a) of the Higher Education Act of 1965 (20 U.S.C. 
        1101a(a)).
            ``(2) Historically black college or university.--The term 
        `historically Black college or university' has the meaning 
        given the term `part B institution' in section 322 of the 
        Higher Education Act of 1965 (20 U.S.C. 1061).
            ``(3) National laboratory.--The term `National Laboratory' 
        has the meaning given the term in section 1203 of the Energy 
        Science and Technology Enhancement Act of 2002.
            ``(4) Science facility.--The term `science facility' has 
        the meaning given the term `single-purpose research facility' 
        in section 1401 of the Energy Science and Technology 
        Enhancement Act of 2002.
            ``(5) Tribal college.--The term `tribal college' has the 
        meaning given the term `tribally controlled college or 
        university' in section 2(a) of the Tribally Controlled College 
        or University Assistance Act of 1978 (25 U.S.C. 1801(a)).
    ``(b) Education Partnership.--
            ``(1) In general.--The Secretary shall direct the Director 
        of each National Laboratory, and may direct the head of any 
        science facility, to increase the participation of historically 
        Black colleges or universities, Hispanic-serving institutions, 
        or tribal colleges in activities that increase the capacity of 
        the historically Black colleges or universities, Hispanic-
        serving institutions, or tribal colleges to train personnel in 
        science or engineering.
            ``(2) Activities.--An activity under paragraph (1) may 
        include--
                    ``(A) collaborative research;
                    ``(B) a transfer of equipment;
                    ``(C) training of personnel at a National 
                Laboratory or science facility; and
                    ``(D) a mentoring activity by personnel at a 
                National Laboratory or science facility.
    ``(c) Report.--Not later than 2 years after the date of enactment 
of this section, the Secretary shall submit to the Committee on Science 
of the House of Representatives and the Committee on Energy and Natural 
Resources of the Senate a report on the activities carried out under 
this section.''.

SEC. 1506. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND EDUCATION 
              CENTER.

    (a) Establishment.--The Secretary shall establish a National Power 
Plant Operations Technology and Education Center (the ``Center''), to 
address the need for training and educating certified operators for 
electric power generation plants.
    (b) Role.--The Center shall provide both training and continuing 
education relating to electric power generation plant technologies and 
operations. The Center shall conduct training and education activities 
on site and through Internet-based information technologies that allow 
for learning at remote sites.
    (c) Criteria for Competitive Selection.--The Secretary shall 
establish the Center at an institution of higher education with 
expertise in plant technology and operation and that can provide on-
site as well as Internet-based training.

SEC. 1507. FEDERAL MINE INSPECTORS.

    In light of projected retirements of Federal mine inspectors and 
the need for additional personnel, the Secretary of Labor shall hire, 
train, and deploy such additional skilled mine inspectors (particularly 
inspectors with practical experience as a practical mining engineer) as 
necessary to ensure the availability of skilled and experienced 
individuals and to maintain the number of Federal mine inspectors at or 
above the levels authorized by law or established by regulation.

             DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                    TITLE XVI--TECHNOLOGY ASSESSMENT

SEC. 1601. NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT SERVICE.

    The National Science and Technology Policy, Organization, and 
Priorities Act of 1976 (42 U.S.C. 6601 et seq.) is amended by adding at 
the end the following:

    ``TITLE VII--NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT SERVICE

``SEC. 701. ESTABLISHMENT.

    ``There is hereby created a Science and Technology Assessment 
Service (hereinafter referred to as the `Service'), which shall be 
within and responsible to the legislative branch of the Government.

``SEC. 702. COMPOSITION.

    ``The Service shall consist of a Science and Technology Board 
(hereinafter referred to as the `Board') which shall formulate and 
promulgate the policies of the Service, and a Director who shall carry 
out such policies and administer the operations of the Service.

``SEC. 703. FUNCTIONS AND DUTIES.

    ``The Service shall coordinate and develop information for Congress 
relating to the uses and application of technology to address current 
national science and technology policy issues. In developing such 
technical assessments for Congress, the Service shall utilize, to the 
extent practicable, experts selected in coordination with the National 
Research Council.

``SEC. 704. INITIATION OF ACTIVITIES.

    ``Science and technology assessment activities undertaken by the 
Service may be initiated upon the request of--
            ``(1) the Chairman of any standing, special, or select 
        committee of either House of the Congress, or of any joint 
        committee of the Congress, acting for himself or at the request 
        of the ranking minority member or a majority of the committee 
        members;
            ``(2) the Board; or
            ``(3) the Director.

``SEC. 705. ADMINISTRATION AND SUPPORT.

    ``The Director of the Science and Technology Assessment Service 
shall be appointed by the Board and shall serve for a term of 6 years 
unless sooner removed by the Board. The Director shall receive basic 
pay at the rate provided for level III of the Executive Schedule under 
section 5314 of title 5, United States Code. The Director shall 
contract for administrative support from the Library of Congress.

``SEC. 706. AUTHORITY.

    ``The Service shall have the authority, within the limits of 
available appropriations, to do all things necessary to carry out the 
provisions of this section, including, but without being limited to, 
the authority to--
            ``(1) make full use of competent personnel and 
        organizations outside the Office, public or private, and form 
        special ad hoc task forces or make other arrangements when 
        appropriate;
            ``(2) enter into contracts or other arrangements as may be 
        necessary for the conduct of the work of the Office with any 
        agency or instrumentality of the United States, with any State, 
        territory, or possession or any political subdivision thereof, 
        or with any person, firm, association, corporation, or 
        educational institution, with or without reimbursement, without 
        performance or other bonds, and without regard to section 3709 
        of the Revised Statutes (41 U.S.C. 51);
            ``(3) accept and utilize the services of voluntary and 
        uncompensated personnel necessary for the conduct of the work 
        of the Service and provide transportation and subsistence as 
        authorized by section 5703 of title 5, United States Code, for 
        persons serving without compensation; and
            ``(4) prescribe such rules and regulations as it deems 
        necessary governing the operation and organization of the 
        Service.

``SEC. 707. BOARD.

    ``The Board shall consist of 13 members as follows--
            ``(1) six Members of the Senate, appointed by the President 
        pro tempore of the Senate, three from the majority party and 
        three from the minority party;
            ``(2) six Members of the House of Representatives appointed 
        by the Speaker of the House of Representatives, three from the 
        majority party and three from the minority party; and
            ``(3) the Director, who shall not be a voting member.

``SEC. 708. REPORT TO CONGRESS.

    ``The Service shall submit to the Congress an annual report which 
shall include, but not be limited to, an evaluation of technology 
assessment techniques and identification, insofar as may be feasible, 
of technological areas and programs requiring future analysis. The 
annual report shall be submitted not later than March 15 of each year.

``SEC. 709. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to the Service such sums 
as are necessary to fulfill the requirements of this title.''.

                          TITLE XVII--STUDIES

SEC. 1701. REGULATORY REVIEWS.

    (a) Regulatory Reviews.--Not later than 1 year after the date of 
enactment of this section and every 5 years thereafter, each Federal 
agency shall review relevant regulations and standards to identify--
            (1) existing regulations and standards that act as barriers 
        to--
                    (A) market entry for emerging energy technologies 
                (including fuel cells, combined heat and power, 
                distributed power generation, and small-scale renewable 
                energy), and
                    (B) market development and expansion for existing 
                energy technologies (including combined heat and power, 
                small-scale renewable energy, geothermal heat pump 
                technology, and energy recovery in industrial 
                processes), and
            (2) actions the agency is taking or could take to--
                    (A) remove barriers to market entry for emerging 
                energy technologies and to market expansion for 
                existing technologies,
                    (B) increase energy efficiency and conservation, or
                    (C) encourage the use of new and existing processes 
                to meet energy and environmental goals.
    (b) Report to Congress.--Not later than 18 months after the date of 
enactment of this section, and every 5 years thereafter, the Director 
of the Office of Science and Technology Policy shall report to the 
Congress on the results of the agency reviews conducted under 
subsection (a).
    (c) Contents of the Report.--The report shall--
            (1) identify all regulatory barriers to--
                    (A) the development and commercialization of 
                emerging energy technologies and processes, and
                    (B) the further development and expansion of 
                existing energy conservation technologies and 
                processes,
            (2) actions taken, or proposed to be taken, to remove such 
        barriers, and
            (3) recommendations for changes in laws or regulations that 
        may be needed to--
                    (A) expedite the siting and development of energy 
                production and distribution facilities,
                    (B) encourage the adoption of energy efficiency and 
                process improvements,
                    (C) facilitate the expanded use of existing energy 
                conservation technologies, and
                    (D) reduce the environmental impacts of energy 
                facilities and processes through transparent and 
                flexible compliance methods.

SEC. 1702. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.

    (a) Assessment.--The Secretary of Energy shall assess the economic 
implications of the dependence of the State of Hawaii on oil as the 
principal source of energy for the State, including--
            (1) the short- and long-term prospects for crude oil supply 
        disruption and price volatility and potential impacts on the 
        economy of Hawaii;
            (2) the economic relationship between oil-fired generation 
        of electricity from residual fuel and refined petroleum 
        products consumed for ground, marine, and air transportation;
            (3) the technical and economic feasibility of increasing 
        the contribution of renewable energy resources for generation 
        of electricity, on an island-by-island basis, including--
                    (A) siting and facility configuration;
                    (B) environmental, operational, and safety 
                considerations;
                    (C) the availability of technology;
                    (D) effects on the utility system, including 
                reliability;
                    (E) infrastructure and transport requirements;
                    (F) community support; and
                    (G) other factors affecting the economic impact of 
                such an increase and any effect on the economic 
                relationship described in paragraph (2);
            (4) the technical and economic feasibility of using 
        liquefied natural gas to displace residual fuel oil for 
        electric generation, including neighbor island opportunities, 
        and the effect of such displacement on the economic 
        relationship described in paragraph (2), including--
                    (A) the availability of supply;
                    (B) siting and facility configuration for onshore 
                and offshore liquefied natural gas receiving terminals;
                    (C) the factors described in subparagraphs (B) 
                through (F) of paragraph (3); and
                    (D) other economic factors;
            (5) the technical and economic feasibility of using 
        renewable energy sources (including hydrogen) for ground, 
        marine, and air transportation energy applications to displace 
        the use of refined petroleum products, on an island-by-island 
        basis, and the economic impact of such displacement on the 
        relationship described in paragraph (2); and
            (6) an island-by-island approach to--
                    (A) the development of hydrogen from renewable 
                resources; and
                    (B) the application of hydrogen to the energy needs 
                of Hawaii.
    (b) Contracting Authority.--The Secretary may carry out the 
assessment under subsection (a) directly or, in whole or in part, 
through one or more contracts with qualified public or private 
entities.
    (c) Report.--Not later than 300 days after the date of enactment of 
this Act, the Secretary shall prepare, in consultation with agencies of 
the State of Hawaii and other stakeholders, as appropriate, and submit 
to Congress, a report detailing the findings, conclusions, and 
recommendations resulting from the assessment.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 1703. STUDY OF SITING AN ELECTRIC TRANSMISSION SYSTEM ON AMTRAK 
              RIGHT-OF-WAY.

    (a) Study.--The Secretary of Energy shall contract with Amtrak to 
conduct a study of the feasibility of building and operating a new 
electric transmission system on the Amtrak right-of-way in the 
Northeast Corridor.
    (b) Scope of the Study.--The study shall focus on siting the new 
system on the Amtrak right-of-way within the Northeast Corridor between 
Washington, D.C., and New Rochelle, New York, including the Amtrak 
right-of-way between Philadelphia, Pennsylvania and Harrisburg, 
Pennsylvania.
    (c) Contents of the Study.--The study shall consider--
            (1) alternative geographic configuration of a new 
        electronic transmission system on the Amtrak right-of-way;
            (2) alternative technologies for the system;
            (3) the estimated costs of building and operating each 
        alternative;
            (4) alternative means of financing the system;
            (5) the environmental risks and benefits of building and 
        operating each alternative as well as environmental risks and 
        benefits of building and operating the system on the Northeast 
        Corridor rather than at other locations;
            (6) engineering and technological obstacles to building and 
        operating each alternative; and
            (7) the extent to which each alternative would enhance the 
        reliability of the electric transmission grid and enhance 
        competition in the sale of electric energy at wholesale within 
        the Northeast Corridor.
    (d) Recommendations.--The study shall recommend the optimal 
geographic configuration, the optimal technology, the optimal 
engineering design, and the optimal means of financing for the new 
system from among the alternatives considered.
    (e) Report.--The Secretary of Energy shall submit the completed 
study to the Committee on Energy and Natural Resources of the United 
States Senate and the Committee on Energy and Commerce of the House of 
Representatives not later than 270 days after the date of enactment of 
this section.
    (f) Definitions.--For purposes of this section--
            (1) the term ``Amtrak'' means the National Railroad 
        Passenger Corporation established under chapter 243 of title 
        49, United States Code; and
            (2) the term ``Northeast Corridor'' shall have the meaning 
        given such term under section 24102(7) of title 49, United 
        States Code.

SEC. 1704. UPDATING OF INSULAR AREA RENEWABLE ENERGY AND ENERGY 
              EFFICIENCY PLANS.

    Section 604 of Public Law 96-597 (48 U.S.C. 1492) is amended--
            (1) in subsection (a) at the end of paragraph (4) by 
        striking ``resources.'' and inserting ``resources; and
            ``(5) the development of renewable energy and energy 
        efficiency technologies since publication of the 1982 
        Territorial Energy Assessment prepared under subsection (c) 
        reveals the need to reassess the state of energy production, 
        consumption, efficiency, infrastructure, reliance on imported 
        energy, and potential of the indigenous renewable energy 
        resources and energy efficiency in regard to the insular 
        areas.''; and
            (2) by adding at the end of subsection (e) ``The Secretary 
        of Energy, in consultation with the Secretary of the Interior 
        and the chief executive officer of each insular area, shall 
        update the plans required under subsection (c) and draft long-
        term energy plans for each insular area that will reduce, to 
        the extent feasible, the reliance of the insular area on energy 
        imports by the year 2010, and maximize, to the extent feasible, 
        use of renewable energy resources and energy efficiency 
        opportunities. Not later than December 31, 2002, the Secretary 
        of Energy shall submit the updated plans to Congress.''.

SEC. 1705. CONSUMER ENERGY COMMISSION.

    (a) Establishment of Commission.--There is established a commission 
to be known as the ``Consumer Energy Commission''.
    (b) Membership.--
            (1) In general.--The Commission shall be comprised of 11 
        members who shall be appointed within 30 days from the date of 
        enactment of this section and who shall serve for the life of 
        the Commission.
            (2) Appointments in the senate and the house.--The Majority 
        Leader and the Minority Leader of the Senate and the Speaker 
        and Minority Leader of the House of Representatives shall each 
        appoint 2 members--
                    (A) one of whom shall represent consumer groups 
                focusing on energy issues; and
                    (B) one of whom shall represent the energy 
                industry.
            (3) Appointments by the president.--The President shall 
        appoint three members--
                    (A) one of whom shall represent consumer groups 
                focusing on energy issues;
                    (B) one of whom shall represent the energy 
                industry; and
                    (C) one of whom shall represent the Department of 
                Energy.
    (c) Initial Meeting.--Not later than 60 days after the date of 
enactment of this Act, the Commission shall hold the first meeting of 
the Commission regardless of the number of members that have been 
appointed and shall select a Chairperson and Vice Chairperson from 
among the members of the Commission.
    (d) Administrative Expenses.--Members of the Commission shall serve 
without compensation, except for per diem and travel expenses which 
shall be reimbursed, and the Department of Energy shall pay expenses as 
necessary to carry out this section, with the expenses not to exceed 
$400,000.
    (e) Studies.--The Commission shall conduct a nationwide study of 
significant price spikes since 1990 in major United States consumer 
energy products, including electricity, gasoline, home heating oil, 
natural gas and propane with a focus on their causes including 
insufficient inventories, supply disruptions, refinery capacity limits, 
insufficient infrastructure, regulatory failures, demand growth, 
reliance on imported supplies, insufficient availability of alternative 
energy sources, abuse of market power, market concentration and any 
other relevant factors.
    (f) Report.--Not later than 180 days after the date of the first 
meeting of the Commission, the Commission shall submit to Congress a 
report that contains the findings and conclusions of the Commission and 
any recommendations for legislation, administrative actions, and 
voluntary actions by industry and consumers to protect consumers and 
small businesses from future price spikes in consumer energy products.
    (g) Consultation.--The Commission shall consult with the Federal 
Trade Commission, the Federal Energy Regulatory Commission, the 
Department of Energy and other Federal and State agencies as 
appropriate.
    (h) Sunset.--The Commission shall terminate within 30 days after 
the submission of the report to Congress.

SEC. 1706. STUDY OF NATURAL GAS AND OTHER ENERGY TRANSMISSION 
              INFRASTRUCTURE ACROSS THE GREAT LAKES.

    (a) Definitions.--In this section:
            (1) Great lake.--The term ``Great Lake'' means Lake Erie, 
        Lake Huron (including Lake Saint Clair), Lake Michigan, Lake 
        Ontario (including the Saint Lawrence River from Lake Ontario 
        to the 45th parallel of latitude), and Lake Superior.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Study.--
            (1) In general.--The Secretary, in consultation with 
        representatives of appropriate Federal and State agencies, 
        shall--
                    (A) conduct a study of--
                            (i) the location and extent of anticipated 
                        growth of natural gas and other energy 
                        transmission infrastructure proposed to be 
                        constructed across the Great Lakes; and
                            (ii) the environmental impacts of any 
                        natural gas or other energy transmission 
                        infrastructure proposed to be constructed 
                        across the Great Lakes; and
                    (B) make recommendations for minimizing the 
                environmental impact of pipelines and other energy 
                transmission infrastructure on the Great Lakes 
                ecosystem.
            (2) Advisory Committee.--Not later than 30 days after the 
        date of enactment of this Act, the Secretary shall enter into 
        an agreement with the National Academy of Sciences to establish 
        an advisory committee to ensure that the study is complete, 
        objective, and of good quality.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report that 
describes the findings and recommendations resulting from the study 
under subsection (b).

SEC. 1707. NATIONAL ACADEMY OF SCIENCES STUDY OF PROCEDURES FOR 
              SELECTION AND ASSESSMENT OF CERTAIN ROUTES FOR SHIPMENT 
              OF SPENT NUCLEAR FUEL FROM RESEARCH NUCLEAR REACTORS.

    (a) In General.--The Secretary of Transportation shall enter into 
an agreement with the National Academy of Sciences under which 
agreement the National Academy of Sciences shall conduct a study of the 
procedures by which the Department of Energy, together with the 
Department of Transportation and the Nuclear Regulatory Commission, 
selects routes for the shipment of spent nuclear fuel from research 
nuclear reactors between or among existing Department of Energy 
facilities currently licensed to accept such spent nuclear fuel.
    (b) Elements of Study.--In conducting the study under subsection 
(a), the National Academy of Sciences shall analyze the manner in which 
the Department of Energy--
            (1) selects potential routes for the shipment of spent 
        nuclear fuel from research nuclear reactors between or among 
        existing Department facilities currently licensed to accept 
        such spent nuclear fuel;
            (2) selects such a route for a specific shipment of such 
        spent nuclear fuel; and
            (3) conducts assessments of the risks associated with 
        shipments of such spent nuclear fuel along such a route.
    (c) Considerations Regarding Route Selection.--The analysis under 
subsection (b) shall include a consideration whether, and to what 
extent, the procedures analyzed for purposes of that subsection take 
into account the following:
            (1) The proximity of the routes under consideration to 
        major population centers and the risks associated with 
        shipments of spent nuclear fuel from research nuclear reactors 
        through densely populated areas.
            (2) Current traffic and accident data with respect to the 
        routes under consideration.
            (3) The quality of the roads comprising the routes under 
        consideration.
            (4) Emergency response capabilities along the routes under 
        consideration.
            (5) The proximity of the routes under consideration to 
        places or venues (including sports stadiums, convention 
        centers, concert halls and theaters, and other venues) where 
        large numbers of people gather.
    (d) Recommendations.--In conducting the study under subsection (a), 
the National Academy of Sciences shall also make such recommendations 
regarding the matters studied as the National Academy of Sciences 
considers appropriate.
    (e) Deadline for Dispersal of Funds for Study.--The Secretary shall 
disperse to the National Academy of Sciences the funds for the cost of 
the study required by subsection (a) not later than 30 days after the 
date of the enactment of this Act.
    (f) Report on Results of Study.--Not later than 6 months after the 
date of the dispersal of funds under subsection (e), the National 
Academy of Sciences shall submit to the appropriate committees of 
Congress a report on the study conducted under subsection (a), 
including the recommendations required by subsection (d).
    (g) Appropriate Committees of Congress Defined.--In this section, 
the term ``appropriate committees of Congress'' means--
            (1) the Committees on Commerce, Science, and 
        Transportation, Energy and Natural Resources, and Environment 
        and Public Works of the Senate; and
            (2) the Committee on Energy and Commerce of the House of 
        Representatives.

SEC. 1708. REPORT ON ENERGY SAVINGS AND WATER USE.

    (a) Report.--The Secretary of Energy shall conduct a study of 
opportunities to reduce energy use by cost-effective improvements in 
the efficiency of municipal water and wastewater treatment and use, 
including water pumps, motors, and delivery systems; purification, 
conveyance and distribution; upgrading of aging water infrastructure, 
and improved methods for leakage monitoring, measuring, and reporting; 
and public education.
    (b) Submission of Report.--The Secretary of Energy shall submit a 
report on the results of the study, including any recommendations for 
implementation of measures and estimates of costs and resource savings, 
no later than 2 years from the date of enactment of this section.
    (c) Authorization.--There is hereby authorized to be appropriated 
such sums as may be necessary to carry out the purposes of this 
section.

SEC. 1709. REPORT ON RESEARCH ON HYDROGEN PRODUCTION AND USE.

    Not later than 120 days after the date of enactment of this Act, 
the Secretary of Energy shall submit to Congress a report that 
identifies current or potential research projects at Department of 
Energy nuclear facilities relating to the production or use of hydrogen 
in fuel cell development or any other method or process enhancing 
alternative energy production technologies.

               DIVISION G--ENERGY INFRASTRUCTURE SECURITY

              TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

               Subtitle A--Department of Energy Programs

SEC. 1801. DEFINITIONS.

    In this title:
            (1) Critical energy infrastructure.--
                    (A) In general.--The term ``critical energy 
                infrastructure'' means a physical or cyber-based system 
                or service for--
                            (i) the generation, transmission or 
                        distribution of electric energy; or
                            (ii) the production, refining, or storage 
                        of petroleum, natural gas, or petroleum 
                        product--
                the incapacity or destruction of which would have a 
                debilitating impact on the defense or economic security 
                of the United States.
                    (B) Exclusion.--The term shall not include a 
                facility that is licensed by the Nuclear Regulatory 
                Commission under section 103 or 104b. of the Atomic 
                Energy Act of 1954 (42 U.S.C. 2133 and 2134(b)).
            (2) Department; national laboratory; secretary.--The terms 
        ``Department'', ``National Laboratory'', and ``Secretary'' have 
        the meaning given such terms in section 1203.

SEC. 1802. ROLE OF THE DEPARTMENT OF ENERGY.

    Section 102 of the Department of Energy Organization Act (42 U.S.C. 
7112) is amended by adding at the end the following:
            ``(20) To ensure the safety, reliability, and security of 
        the Nation's energy infrastructure, and to respond to any 
        threat to or disruption of such infrastructure, through 
        activities including--
                    ``(A) research and development;
                    ``(B) financial assistance, technical assistance, 
                and cooperative activities with States, industry, and 
                other interested parties; and
                    ``(C) education and public outreach activities.''.

SEC. 1803. CRITICAL ENERGY INFRASTRUCTURE PROGRAMS.

    (a) Programs.--In addition to the authorities otherwise provided by 
law (including section 1261), the Secretary is authorized to establish 
programs of financial, technical, or administrative assistance to--
            (1) enhance the security of critical energy infrastructure 
        in the United States;
            (2) develop and disseminate, in cooperation with industry, 
        best practices for critical energy infrastructure assurance; 
        and
            (3) protect against, mitigate the effect of, and improve 
        the ability to recover from disruptive incidents affecting 
        critical energy infrastructure.
    (b) Requirements.--A program established under this section shall--
            (1) be undertaken in consultation with the advisory 
        committee established under section 1804;
            (2) have available to it the scientific and technical 
        resources of the Department, including resources at a National 
        Laboratory; and
            (3) be consistent with any overall Federal plan for 
        national infrastructure security developed by the President or 
        his designee.

SEC. 1804. ADVISORY COMMITTEE ON ENERGY INFRASTRUCTURE SECURITY.

    (a) Establishment.--The Secretary shall establish an advisory 
committee, or utilize an existing advisory committee within the 
Department, to advise the Secretary on policies and programs related to 
the security of United States energy infrastructure.
    (b) Balanced Membership.--The Secretary shall ensure that the 
advisory committee established or utilized under subsection (a) has a 
membership with an appropriate balance among the various interests 
related to energy infrastructure security, including--
            (1) scientific and technical experts;
            (2) industrial managers;
            (3) worker representatives;
            (4) insurance companies or organizations;
            (5) environmental organizations;
            (6) representatives of State, local, and tribal 
        governments; and
            (7) such other interests as the Secretary may deem 
        appropriate.
    (c) Expenses.--Members of the advisory committee established or 
utilized under subsection (a) shall serve without compensation, and 
shall be allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for an employee of an agency under 
subchapter I of chapter 57 of title 5, United States Code, while away 
from the home or regular place of business of the member in the 
performance of the duties of the committee.

SEC. 1805. BEST PRACTICES AND STANDARDS FOR ENERGY INFRASTRUCTURE 
              SECURITY.

    The Secretary, in consultation with the advisory committee under 
section 1804, shall enter into appropriate arrangements with one or 
more standard-setting organizations, or similar organizations, to 
assist the development of industry best practices and standards for 
security related to protecting critical energy infrastructure.

            Subtitle B--Department of the Interior Programs

SEC. 1811. OUTER CONTINENTAL SHELF ENERGY INFRASTRUCTURE SECURITY.

    (a) Definitions.--In this section:
            (1) Approved state plan.--The term ``approved State plan'' 
        means a State plan approved by the Secretary under subsection 
        (c)(3).
            (2) Coastline.--The term ``coastline'' has the same meaning 
        as the term ``coast line'' as defined in subsection 2(c) of the 
        Submerged Lands Act (43 U.S.C. 1301(c)).
            (3) Critical ocs energy infrastructure facility.--The term 
        ``OCS critical energy infrastructure facility'' means--
                    (A) a facility located in an OCS Production State 
                or in the waters of such State related to the 
                production of oil or gas on the Outer Continental 
                Shelf; or
                    (B) a related facility located in an OCS Production 
                State or in the waters of such State that carries out a 
                public service, transportation, or infrastructure 
                activity critical to the operation of an Outer 
                Continental Shelf energy infrastructure facility, as 
                determined by the Secretary.
            (4) Distance.--The term ``distance'' means the minimum 
        great circle distance, measured in statute miles.
            (5) Leased tract.--
                    (A) In general.--The term ``leased tract'' means a 
                tract that--
                            (i) is subject to a lease under section 6 
                        or 8 of the Outer Continental Shelf Lands Act 
                        (43 U.S.C. 1335, 1337) for the purpose of 
                        drilling for, developing, and producing oil or 
                        natural gas resources; and
                            (ii) consists of a block, a portion of a 
                        block, a combination of blocks or portions of 
                        blocks, or a combination of portions of blocks, 
                        as--
                                    (I) specified in the lease; and
                                    (II) depicted on an outer 
                                Continental Shelf official protraction 
                                diagram.
                    (B) Exclusion.--The term ``leased tract'' does not 
                include a tract described in subparagraph (A) that is 
                located in a geographic area subject to a leasing 
                moratorium on January 1, 2001, unless the lease was in 
                production on that date.
            (6) OCS political subdivision.--The term ``OCS political 
        subdivision'' means a county, parish, borough or any equivalent 
        subdivision of an OCS Production State all or part of which 
        subdivision lies within the coastal zone (as defined in section 
        304(1) of the Coastal Zone Management Act of 1972 (16 U.S.C. 
        1453(1)).
            (7) OCS production state.--The term ``OCS Production 
        State'' means the State of--
                    (A) Alaska;
                    (B) Alabama;
                    (C) California;
                    (D) Florida;
                    (E) Louisiana;
                    (F) Mississippi; or
                    (G) Texas.
            (8) Production.--The term ``production'' has the meaning 
        given the term in section 2 of the Outer Continental Shelf 
        Lands Act (43 U.S.C. 1331).
            (9) Program.--The term ``program'' means the Outer 
        Continental Shelf Energy Infrastructure Security Program 
        established under subsection (b).
            (10) Qualified outer continental shelf revenues.--The term 
        ``qualified Outer Continental Shelf revenues'' means all 
        amounts received by the United States from each leased tract or 
        portion of a leased tract lying seaward of the zone defined and 
        governed by section 8(g) of the Outer Continental Shelf Lands 
        Act (43 U.S.C. 1331 et seq.), or lying within such zone but to 
        which section 8(g) does not apply, the geographic center of 
        which lies within a distance of 200 miles from any part of the 
        coastline of any State, including bonus bids, rents, royalties 
        (including payments for royalties taken in kind and sold), net 
        profit share payments, and related late payment interest. Such 
        term does not include any revenues from a leased tract or 
        portion of a leased tract that is included within any area of 
        the Outer Continental Shelf where a moratorium on new leasing 
        was in effect as of January 1, 2001, unless the lease was 
        issued prior to the establishment of the moratorium and was in 
        production on January 1, 2001.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
            (12) State plan.--The term ``State plan'' means a State 
        plan described in subsection (b).
    (b) Establishment.--The Secretary shall establish a program, to be 
known as the ``Outer Continental Shelf Energy Infrastructure Security 
Program'', under which the Secretary shall provide funds to OCS 
Production States to implement approved State plans to provide security 
against hostile and natural threats to critical OCS energy 
infrastructure facilities and support of any necessary public service 
or transportation activities that are needed to maintain the safety and 
operation of critical energy infrastructure activities. For purposes of 
this program, restoration of any coastal wetland shall be considered to 
be an activity that secures critical OCS energy infrastructure 
facilities from a natural threat.
    (c) State Plans.--
            (1) Initial plan.--Not later than 180 days after the date 
        of enactment of this Act, to be eligible to receive funds under 
        the program, the Governor of an OCS Production State shall 
        submit to the Secretary a plan to provide security against 
        hostile and natural threats to critical energy infrastructure 
        facilities in the OCS Production State and to support any of 
        the necessary public service or transportation activities that 
        are needed to maintain the safety and operation of critical 
        energy infrastructure facilities. Such plan shall include--
                    (A) the name of the State agency that will have the 
                authority to represent and act for the State in dealing 
                with the Secretary for purposes of this section;
                    (B) a program for the implementation of the plan 
                which describes how the amounts provided under this 
                section will be used;
                    (C) a contact for each OCS political subdivision 
                and description of how such political subdivisions will 
                use amounts provided under this section, including a 
                certification by the Governor that such uses are 
                consistent with the requirements of this section; and
                    (D) measures for taking into account other relevant 
                Federal resources and programs.
            (2) Annual reviews.--Not later than 1 year after the date 
        of submission of the plan and annually thereafter, the Governor 
        of an OCS Production State shall--
                    (A) review the approved State plan; and
                    (B) submit to the Secretary any revised State plan 
                resulting from the review.
            (3) Approval of plans.--
                    (A) In general.--In consultation with appropriate 
                Federal security officials and the Secretaries of 
                Commerce and Energy, the Secretary shall--
                            (i) approve each State plan; or
                            (ii) recommend changes to the State plan.
                    (B) Resubmission of state plans.--If the Secretary 
                recommends changes to a State plan under subparagraph 
                (A)(ii), the Governor of the OCS Production State may 
                resubmit a revised State plan to the Secretary for 
                approval.
            (4) Availability of plans.--The Secretary shall provide to 
        Congress a copy of each approved State plan.
            (5) Consultation and public comment.--
                    (A) Consultation.--The Governor of an OCS 
                Production State shall develop the State plan in 
                consultation with Federal, State, and local law 
                enforcement and public safety officials, industry, 
                Indian tribes, the scientific community, and other 
                persons as appropriate.
                    (B) Public comment.--The Governor of an OCS 
                Production State may solicit public comments on the 
                State plan to the extent that the Governor determines 
                to be appropriate.
    (d) Allocation of Amounts by the Secretary.--The Secretary shall 
allocate the amounts made available for the purposes of carrying out 
the program provided for by this section among OCS Production States as 
follows:
            (1) twenty-five percent of the amounts shall be divided 
        equally among OCS Production States.
            (2) seventy-five percent of the amounts shall be divided 
        among OCS Production States on the basis of the proximity of 
        each OCS Production State to offshore locations at which oil 
        and gas are being produced.
    (e) Calculation.--The amount for each OCS Production State under 
paragraph (d)(2) shall be calculated based on the ratio of qualified 
OCS revenues generated off the coastline of the OCS Production State to 
the qualified OCS revenues generated off the coastlines of all OCS 
Production States for the prior 5-year period. Where there is more than 
one OCS Production State within 200 miles of a leased tract, the amount 
of each OCS Production State's payment under paragraph (d)(2) for such 
leased tract shall be inversely proportional to the distance between 
the nearest point on the coastline of such State and the geographic 
center of each leased tract or portion of the leased tract (to the 
nearest whole mile) that is within 200 miles of that coastline, as 
determined by the Secretary. A leased tract or portion of a leased 
tract shall be excluded if the tract or portion is located in a 
geographic area where a moratorium on new leasing was in effect on 
January 1, 2001, unless the lease was issued prior to the establishment 
of the moratorium and was in production on January 1, 2001.
    (f) Payments to OCS Political Subdivisions.--Thirty-five percent of 
each OCS Production State's allocable share as determined under 
subsection (e) shall be paid directly to the OCS political subdivisions 
by the Secretary based on the following formula:
            (1) twenty-five percent shall be allocated based on the 
        ratio of such OCS political subdivision's population to the 
        population of all OCS political subdivisions in the OCS 
        Production State.
            (2) twenty-five percent shall be allocated based on the 
        ratio of such OCS political subdivision's coastline miles to 
        the coastline miles of all OCS political subdivisions in the 
        OCS Production State. For purposes of this subsection, those 
        OCS political subdivisions without coastlines shall be 
        considered to have a coastline that is the average length of 
        the coastlines of all political subdivisions in the State.
            (3) fifty percent shall be allocated based on the relative 
        distance of such OCS political subdivision from any leased 
        tract used to calculate that OCS Production State's allocation 
        using ratios that are inversely proportional to the distance 
        between the point in the coastal political subdivision closest 
        to the geographic center of each leased tract or portion, as 
        determined by the Secretary. For purposes of the calculations 
        under this subparagraph, a leased tract or portion of a leased 
        tract shall be excluded if the leased tract or portion is 
        located in a geographic area where a moratorium on new leasing 
        was in effect on January 1, 2001, unless the lease was issued 
        prior to the establishment of the moratorium and was in 
        production on January 1, 2001.
    (g) Failure To Have Plan Approved.--Any amount allocated to an OCS 
Production State or OCS political subdivision but not disbursed because 
of a failure to have an approved Plan under this section shall be 
allocated equally by the Secretary among all other OCS Production 
States in a manner consistent with this subsection except that the 
Secretary shall hold in escrow such amount until the final resolution 
of any appeal regarding the disapproval of a plan submitted under this 
section. The Secretary may waive the provisions of this paragraph and 
hold an OCS Production State's allocable share in escrow if the 
Secretary determines that such State is making a good faith effort to 
develop and submit, or update, a Plan.
    (h) Use of Amounts Allocated by the Secretary.--
            (1) In general.--Amounts allocated by the Secretary under 
        subsection (d) may be used only in accordance with a plan 
        approved pursuant to subsection (c) for--
                    (A) activities to secure critical OCS energy 
                infrastructure facilities from human or natural 
                threats; and
                    (B) support of any necessary public service or 
                transportation activities that are needed to maintain 
                the safety and operation of critical OCS energy 
                infrastructure facilities.
            (2) Restoration of coastal wetland.--For the purpose of 
        subparagraph (1)(A), restoration of any coastal wetland shall 
        be considered to be an activity that secures critical OCS 
        energy infrastructure facilities from a natural threat.
    (i) Failure To Have Use.--Any amount allocated to an OCS political 
subdivision but not disbursed because of a failure to have a qualifying 
use as described in subsection (h) shall be allocated by the Secretary 
to the OCS Production State in which the OCS political subdivision is 
located except that the Secretary shall hold in escrow such amount 
until the final resolution of any appeal regarding the use of the 
funds.
    (j) Compliance With Authorized Uses.--If the Secretary determines 
that any expenditure made by an OCS Production State or an OCS 
political subdivision is not consistent with the uses authorized in 
subsection (h), the Secretary shall not disburse any further amounts 
under this section to that OCS Production State or OCS political 
subdivision until the amounts used for the inconsistent expenditure 
have been repaid or obligated for authorized uses.
    (k) Rulemaking.--The Secretary may promulgate such rules and 
regulations as may be necessary to carry out the purposes of this 
section, including rules and regulations setting forth an appropriate 
process for appeals.
    (l) Authorization of Appropriations.--There are hereby authorized 
to be appropriated $450,000,000 for each of the fiscal years 2003 
through 2008 to carry out the purposes of this section.

                   DIVISION H--ENERGY TAX INCENTIVES

SEC. 1900. SHORT TITLE; ETC.

    (a) Short Title.--This division may be cited as the ``Energy Tax 
Incentives Act of 2002''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this division an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Internal Revenue Code of 1986.

    TITLE XIX--EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY 
                         PRODUCTION TAX CREDIT

SEC. 1901. THREE-YEAR EXTENSION OF CREDIT FOR PRODUCING ELECTRICITY 
              FROM WIND AND POULTRY WASTE.

    (a) In General.--Subparagraphs (A) and (C) of section 45(c)(3) 
(relating to qualified facility), as amended by section 603(a) of the 
Job Creation and Worker Assistance Act of 2002, are each amended by 
striking ``January 1, 2004'' and inserting ``January 1, 2007''.
    (b) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIOMASS.

    (a) Extension and Modification of Placed-In-Service Rules.--
Paragraph (3) of section 45(c) is amended--
            (1) by striking subparagraph (B) and inserting the 
        following new subparagraph:
                    ``(B) Closed-loop biomass facility.--
                            ``(i) In general.--In the case of a 
                        facility using closed-loop biomass to produce 
                        electricity, the term `qualified facility' 
                        means any facility--
                                    ``(I) owned by the taxpayer which 
                                is originally placed in service after 
                                December 31, 1992, and before January 
                                1, 2007, or
                                    ``(II) owned by the taxpayer which 
                                is originally placed in service before 
                                January 1, 1993, and modified to use 
                                closed-loop biomass to co-fire with 
                                coal before January 1, 2007, as 
                                approved under the Biomass Power for 
                                Rural Development Programs or under a 
                                pilot project of the Commodity Credit 
                                Corporation as described in 65 Fed. 
                                Reg. 63052.
                            ``(ii) Special rules.--In the case of a 
                        qualified facility described in clause 
                        (i)(II)--
                                    ``(I) the 10-year period referred 
                                to in subsection (a) shall be treated 
                                as beginning no earlier than the date 
                                of the enactment of this subclause, and
                                    ``(II) if the owner of such 
                                facility is not the producer of the 
                                electricity, the person eligible for 
                                the credit allowable under subsection 
                                (a) is the lessee or the operator of 
                                such facility.'', and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Biomass facility.--
                            ``(i) In general.--In the case of a 
                        facility using biomass (other than closed-loop 
                        biomass) to produce electricity, the term 
                        `qualified facility' means any facility owned 
                        by the taxpayer which is originally placed in 
                        service before January 1, 2005.
                            ``(ii) Special rule for posteffective date 
                        facilities.--In the case of any facility 
                        described in clause (i) which is placed in 
                        service after the date of the enactment of this 
                        clause, the 3-year period beginning on the date 
                        the facility is originally placed in service 
                        shall be substituted for the 10-year period in 
                        subsection (a)(2)(A)(ii).
                            ``(iii) Special rules for preeffective date 
                        facilities.--In the case of any facility 
                        described in clause (i) which is placed in 
                        service before the date of the enactment of 
                        this clause--
                                    ``(I) subsection (a)(1) shall be 
                                applied by substituting `1.0 cents' for 
                                `1.5 cents', and
                                    ``(II) the 3-year period beginning 
                                after December 31, 2002, shall be 
                                substituted for the 10-year period in 
                                subsection (a)(2)(A)(ii).
                            ``(iv) Credit eligibility.--In the case of 
                        any facility described in clause (i), if the 
                        owner of such facility is not the producer of 
                        the electricity, the person eligible for the 
                        credit allowable under subsection (a) is the 
                        lessee or the operator of such facility.''.
    (b) Definition of Biomass.--
            (1) In general.--Section 45(c)(1) (defining qualified 
        energy resources) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B),
                    (B) by striking the period at the end of 
                subparagraph (C) and inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) biomass (other than closed-loop biomass).''.
            (2) Biomass defined.--Section 45(c) (relating to 
        definitions) is amended by adding at the end the following new 
        paragraph:
            ``(5) Biomass.--The term `biomass' means any solid, 
        nonhazardous, cellulosic waste material which is segregated 
        from other waste materials and which is derived from--
                    ``(A) any of the following forest-related 
                resources: mill residues, precommercial thinnings, 
                slash, and brush, but not including old-growth timber 
                (other than old-growth timber which has been permitted 
                or contracted for removal by any appropriate Federal 
                authority through the National Environmental Policy Act 
                or by any appropriate State authority),
                    ``(B) solid wood waste materials, including waste 
                pallets, crates, dunnage, manufacturing and 
                construction wood wastes (other than pressure-treated, 
                chemically-treated, or painted wood wastes), and 
                landscape or right-of-way tree trimmings, but not 
                including municipal solid waste (garbage), gas derived 
                from the biodegradation of solid waste, or paper that 
                is commonly recycled, or
                    ``(C) agriculture sources, including orchard tree 
                crops, vineyard, grain, legumes, sugar, and other crop 
                by-products or residues.''.
    (c) Coordination With Section 29.--Section 45(c) (relating to 
definitions) is amended by adding at the end the following new 
paragraph:
            ``(6) Coordination with section 29.--The term `qualified 
        facility' shall not include any facility the production from 
        which is taken into account in determining any credit under 
        section 29 for the taxable year or any prior taxable year.''.
    (d) Clerical Amendments.--
            (1) The heading for subsection (c) of section 45 is amended 
        by inserting ``and Special Rules'' after ``Definitions''.
            (2) The heading for subsection (d) of section 45 is amended 
        by inserting ``Additional'' before ``Definitions''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to electricity sold 
        after the date of the enactment of this Act.
            (2) Certain biomass facilities.--With respect to any 
        facility described in section 45(c)(3)(D)(i) of the Internal 
        Revenue Code of 1986, as added by this section, which is placed 
        in service before the date of the enactment of this Act, the 
        amendments made by this section shall apply to electricity sold 
        after December 31, 2002.

SEC. 1903. CREDIT FOR ELECTRICITY PRODUCED FROM SWINE AND BOVINE WASTE 
              NUTRIENTS, GEOTHERMAL ENERGY, AND SOLAR ENERGY.

    (a) Expansion of Qualified Energy Resources.--
            (1) In general.--Section 45(c)(1) (defining qualified 
        energy resources), as amended by this Act, is amended by 
        striking ``and'' at the end of subparagraph (C), by striking 
        the period at the end of subparagraph (D) and inserting a 
        comma, and by adding at the end the following new 
        subparagraphs:
                    ``(E) swine and bovine waste nutrients,
                    ``(F) geothermal energy, and
                    ``(G) solar energy.''.
            (2) Definitions.--Section 45(c) (relating to definitions 
        and special rules), as amended by this Act, is amended by 
        redesignating paragraph (6) as paragraph (8) and by inserting 
        after paragraph (5) the following new paragraphs:
            ``(6) Swine and bovine waste nutrients.--The term `swine 
        and bovine waste nutrients' means swine and bovine manure and 
        litter, including bedding material for the disposition of 
        manure.
            ``(7) Geothermal energy.--The term `geothermal energy' 
        means energy derived from a geothermal deposit (within the 
        meaning of section 613(e)(2)).''.
            (b) Extension and Modification of Placed-In-Service 
        Rules.--Section 45(c)(3) (relating to qualified facility), as 
        amended by this Act, is amended by adding at the end the 
        following new subparagraphs:
                    ``(E) Swine and bovine waste nutrients facility.--
                In the case of a facility using swine and bovine waste 
                nutrients to produce electricity, the term `qualified 
                facility' means any facility owned by the taxpayer 
                which is originally placed in service after the date of 
                the enactment of this subparagraph and before January 
                1, 2007.
                    ``(F) Geothermal or solar energy facility.--
                            ``(i) In general.--In the case of a 
                        facility using geothermal or solar energy to 
                        produce electricity, the term `qualified 
                        facility' means any facility owned by the 
                        taxpayer which is originally placed in service 
                        after the date of the enactment of this clause 
                        and before January 1, 2007.
                            ``(ii) Special rule.--In the case of any 
                        facility described in clause (i), the 5-year 
                        period beginning on the date the facility was 
                        originally placed in service shall be 
                        substituted for the 10-year period in 
                        subsection (a)(2)(A)(ii).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 1904. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE CREDIT.

    (a) In General.--Section 45(d) (relating to additional definitions 
and special rules), as amended by this Act, is amended by adding at the 
end the following new paragraph:
            ``(8) Treatment of persons not able to use entire credit.--
                    ``(A) Allowance of credit.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subsection--
                                    ``(I) any credit allowable under 
                                subsection (a) with respect to a 
                                qualified facility owned by a person 
                                described in clause (ii) may be 
                                transferred or used as provided in this 
                                paragraph, and
                                    ``(II) the determination as to 
                                whether the credit is allowable shall 
                                be made without regard to the tax-
                                exempt status of the person.
                            ``(ii) Persons described.--A person is 
                        described in this clause if the person is--
                                    ``(I) an organization described in 
                                section 501(c)(12)(C) and exempt from 
                                tax under section 501(a),
                                    ``(II) an organization described in 
                                section 1381(a)(2)(C),
                                    ``(III) a public utility (as 
                                defined in section 136(c)(2)(B)), which 
                                is exempt from income tax under this 
                                subtitle,
                                    ``(IV) any State or political 
                                subdivision thereof, the District of 
                                Columbia, any possession of the United 
                                States, or any agency or 
                                instrumentality of any of the 
                                foregoing, or
                                    ``(V) any Indian tribal government 
                                (within the meaning of section 7871) or 
                                any agency or instrumentality thereof.
                    ``(B) Transfer of credit.--
                            ``(i) In general.--A person described in 
                        subparagraph (A)(ii) may transfer any credit to 
                        which subparagraph (A)(i) applies through an 
                        assignment to any other person not described in 
                        subparagraph (A)(ii). Such transfer may be 
                        revoked only with the consent of the Secretary.
                            ``(ii) Regulations.--The Secretary shall 
                        prescribe such regulations as necessary to 
                        ensure that any credit described in clause (i) 
                        is claimed once and not reassigned by such 
                        other person.
                            ``(iii) Transfer proceeds treated as 
                        arising from essential government function.--
                        Any proceeds derived by a person described in 
                        subclause (III), (IV), or (V) of subparagraph 
                        (A)(ii) from the transfer of any credit under 
                        clause (i) shall be treated as arising from the 
                        exercise of an essential government function.
                    ``(C) Use of credit as an offset.--Notwithstanding 
                any other provision of law, in the case of a person 
                described in subclause (I), (II), or (V) of 
                subparagraph (A)(ii), any credit to which subparagraph 
                (A)(i) applies may be applied by such person, to the 
                extent provided by the Secretary of Agriculture, as a 
                prepayment of any loan, debt, or other obligation the 
                entity has incurred under subchapter I of chapter 31 of 
                title 7 of the Rural Electrification Act of 1936 (7 
                U.S.C. 901 et seq.), as in effect on the date of the 
                enactment of the Energy Tax Incentives Act of 2002.
                    ``(D) Credit not income.--Any transfer under 
                subparagraph (B) or use under subparagraph (C) of any 
                credit to which subparagraph (A)(i) applies shall not 
                be treated as income for purposes of section 
                501(c)(12).
                    ``(E) Treatment of unrelated persons.--For purposes 
                of subsection (a)(2)(B), sales among and between 
                persons described in subparagraph (A)(ii) shall be 
                treated as sales between unrelated parties.''.
    (b) Credits Not Reduced by Tax-Exempt Bonds or Certain Other 
Subsidies.--Section 45(b)(3) (relating to credit reduced for grants, 
tax-exempt bonds, subsidized energy financing, and other credits) is 
amended--
            (1) by striking clause (ii),
            (2) by redesignating clauses (iii) and (iv) as clauses (ii) 
        and (iii),
            (3) by inserting ``(other than any loan, debt, or other 
        obligation incurred under subchapter I of chapter 31 of title 7 
        of the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
        seq.), as in effect on the date of the enactment of the Energy 
        Tax Incentives Act of 2002)'' after ``project'' in clause (ii) 
        (as so redesignated),
            (4) by adding at the end the following new sentence: ``This 
        paragraph shall not apply with respect to any facility 
        described in subsection (c)(3)(B)(i)(II).'', and
            (5) by striking ``tax-exempt bonds,'' in the heading and 
        inserting ``certain''.
    (c) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 1905. CREDIT FOR ELECTRICITY PRODUCED FROM SMALL IRRIGATION POWER.

    (a) In General.--Section 45(c)(1) (defining qualified energy 
resources), as amended by this Act, is amended by striking ``and'' at 
the end of subparagraph (F), by striking the period at the end of 
subparagraph (G) and inserting ``, and'', and by adding at the end the 
following new subparagraph:
                    ``(H) small irrigation power.''.
    (b) Qualified Facility.--Section 45(c)(3) (relating to qualified 
facility), as amended by this Act, is amended by adding at the end the 
following new subparagraph:
                    ``(G) Small irrigation power facility.--In the case 
                of a facility using small irrigation power to produce 
                electricity, the term `qualified facility' means any 
                facility owned by the taxpayer which is originally 
                placed in service after date of the enactment of this 
                subparagraph and before January 1, 2007.''.
    (c) Definition.--Section 45(c), as amended by this Act, is amended 
by redesignating paragraph (8) as paragraph (9) and by inserting after 
paragraph (7) the following new paragraph:
            ``(8) Small irrigation power.--The term `small irrigation 
        power' means power--
                    ``(A) generated without any dam or impoundment of 
                water through an irrigation system canal or ditch, and
                    ``(B) the installed capacity of which is less than 
                5 megawatts.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

SEC. 1906. CREDIT FOR ELECTRICITY PRODUCED FROM MUNICIPAL BIOSOLIDS AND 
              RECYCLED SLUDGE.

    (a) In General.--Section 45(c)(1) (defining qualified energy 
resources), as amended by this Act, is amended by striking ``and'' at 
the end of subparagraph (F), by striking the period at the end of 
subparagraph (G), and by adding at the end the following new 
subparagraphs:
                    ``(H) municipal biosolids, and
                    ``(I) recycled sludge.''.
    (b) Qualified Facilities.--Section 45(c)(3) (relating to qualified 
facility), as amended by this Act, is amended by adding at the end the 
following new subparagraphs:
                    ``(G) Municipal biosolids facility.--In the case of 
                a facility using municipal biosolids to produce 
                electricity, the term `qualified facility' means any 
                facility owned by the taxpayer which is originally 
                placed in service after December 31, 2001, and before 
                January 1, 2007.
                    ``(H) Recycled sludge facility.--
                            ``(i) In general.--In the case of a 
                        facility using recycled sludge to produce 
                        electricity, the term `qualified facility' 
                        means any facility owned by the taxpayer which 
                        is originally placed in service before January 
                        1, 2007.
                            ``(ii) Special rule.--In the case of a 
                        qualified facility described in clause (i), the 
                        10-year period referred to in subsection (a) 
                        shall be treated as beginning no earlier than 
                        the date of the enactment of this 
                        subparagraph.''.
    (c) Definitions.--Section 45(c), as amended by this Act, is amended 
by redesignating paragraph (8) as paragraph (10) and by inserting after 
paragraph (7) the following new paragraphs:
            ``(8) Municipal biosolids.--The term `municipal biosolids' 
        means the residue or solids removed by a municipal wastewater 
        treatment facility.
            ``(9) Recycled sludge.--
                    ``(A) In general.--The term `recycled sludge' means 
                the recycled residue byproduct created in the treatment 
                of commercial, industrial, municipal, or navigational 
                wastewater.
                    ``(B) Recycled.--The term `recycled' means the 
                processing of residue into a marketable product, but 
                does not include incineration for the purpose of volume 
                reduction.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act, 
in taxable years ending after such date.

       TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

SEC. 2001. ALTERNATIVE MOTOR VEHICLE CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.) is amended by adding at the end 
the following new section:

``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) the new qualified fuel cell motor vehicle credit 
        determined under subsection (b),
            ``(2) the new qualified hybrid motor vehicle credit 
        determined under subsection (c), and
            ``(3) the new qualified alternative fuel motor vehicle 
        credit determined under subsection (d).
    ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified fuel cell motor vehicle credit determined under this 
        subsection with respect to a new qualified fuel cell motor 
        vehicle placed in service by the taxpayer during the taxable 
        year is--
                    ``(A) $4,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $20,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(2) Increase for fuel efficiency.--
                    ``(A) In general.--The amount determined under 
                paragraph (1)(A) with respect to a new qualified fuel 
                cell motor vehicle which is a passenger automobile or 
                light truck shall be increased by--
                            ``(i) $1,000, if such vehicle achieves at 
                        least 150 percent but less than 175 percent of 
                        the 2000 model year city fuel economy,
                            ``(ii) $1,500, if such vehicle achieves at 
                        least 175 percent but less than 200 percent of 
                        the 2000 model year city fuel economy,
                            ``(iii) $2,000, if such vehicle achieves at 
                        least 200 percent but less than 225 percent of 
                        the 2000 model year city fuel economy,
                            ``(iv) $2,500, if such vehicle achieves at 
                        least 225 percent but less than 250 percent of 
                        the 2000 model year city fuel economy,
                            ``(v) $3,000, if such vehicle achieves at 
                        least 250 percent but less than 275 percent of 
                        the 2000 model year city fuel economy,
                            ``(vi) $3,500, if such vehicle achieves at 
                        least 275 percent but less than 300 percent of 
                        the 2000 model year city fuel economy, and
                            ``(vii) $4,000, if such vehicle achieves at 
                        least 300 percent of the 2000 model year city 
                        fuel economy.
                    ``(B) 2000 model year city fuel economy.--For 
                purposes of subparagraph (A), the 2000 model year city 
                fuel economy with respect to a vehicle shall be 
                determined in accordance with the following tables:
                            ``(i) In the case of a passenger 
                        automobile:
                                               The 2000 model year city
``If vehicle inertia weight class                      fuel economy is:
        is:
    1,500 or 1,750 lbs............................            43.7 mpg 
    2,000 lbs.....................................            38.3 mpg 
    2,250 lbs.....................................            34.1 mpg 
    2,500 lbs.....................................            30.7 mpg 
    2,750 lbs.....................................            27.9 mpg 
    3,000 lbs.....................................            25.6 mpg 
    3,500 lbs.....................................            22.0 mpg 
    4,000 lbs.....................................            19.3 mpg 
    4,500 lbs.....................................            17.2 mpg 
    5,000 lbs.....................................            15.5 mpg 
    5,500 lbs.....................................            14.1 mpg 
    6,000 lbs.....................................            12.9 mpg 
    6,500 lbs.....................................            11.9 mpg 
    7,000 to 8,500 lbs............................            11.1 mpg.
                            ``(ii) In the case of a light truck:

                                               The 2000 model year city
``If vehicle inertia weight class                      fuel economy is:
        is:
    1,500 or 1,750 lbs............................            37.6 mpg 
    2,000 lbs.....................................            33.7 mpg 
    2,250 lbs.....................................            30.6 mpg 
    2,500 lbs.....................................            28.0 mpg 
    2,750 lbs.....................................            25.9 mpg 
    3,000 lbs.....................................            24.1 mpg 
    3,500 lbs.....................................            21.3 mpg 
    4,000 lbs.....................................            19.0 mpg 
    4,500 lbs.....................................            17.3 mpg 
    5,000 lbs.....................................            15.8 mpg 
    5,500 lbs.....................................            14.6 mpg 
    6,000 lbs.....................................            13.6 mpg 
    6,500 lbs.....................................            12.8 mpg 
    7,000 to 8,500 lbs............................            12.0 mpg.
                    ``(C) Vehicle inertia weight class.--For purposes 
                of subparagraph (B), the term `vehicle inertia weight 
                class' has the same meaning as when defined in 
                regulations prescribed by the Administrator of the 
                Environmental Protection Agency for purposes of the 
                administration of title II of the Clean Air Act (42 
                U.S.C. 7521 et seq.).
            ``(3) New qualified fuel cell motor vehicle.--For purposes 
        of this subsection, the term `new qualified fuel cell motor 
        vehicle' means a motor vehicle--
                    ``(A) which is propelled by power derived from one 
                or more cells which convert chemical energy directly 
                into electricity by combining oxygen with hydrogen fuel 
                which is stored on board the vehicle in any form and 
                may or may not require reformation prior to use,
                    ``(B) which, in the case of a passenger automobile 
                or light truck--
                            ``(i) for 2002 and later model vehicles, 
                        has received a certificate of conformity under 
                        the Clean Air Act and meets or exceeds the 
                        equivalent qualifying California low emission 
                        vehicle standard under section 243(e)(2) of the 
                        Clean Air Act for that make and model year, and
                            ``(ii) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.
    ``(c) New Qualified Hybrid Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the new 
        qualified hybrid motor vehicle credit determined under this 
        subsection with respect to a new qualified hybrid motor vehicle 
        placed in service by the taxpayer during the taxable year is 
        the credit amount determined under paragraph (2).
            ``(2) Credit amount.--
                    ``(A) In general.--The credit amount determined 
                under this paragraph shall be determined in accordance 
                with the following tables:
                            ``(i) In the case of a new qualified hybrid 
                        motor vehicle which is a passenger automobile 
                        or light truck and which provides the following 
                        percentage of the maximum available power:

``If percentage of the maximum
  available power is:                             The credit amount is:
    At least 5 percent but less than 10 percent...                $250 
    At least 10 percent but less than 20 percent..                $500 
    At least 20 percent but less than 30 percent..                $750 
    At least 30 percent...........................              $1,000.
                            ``(ii) In the case of a new qualified 
                        hybrid motor vehicle which is a heavy duty 
                        hybrid motor vehicle and which provides the 
                        following percentage of the maximum available 
                        power:
                                    ``(I) If such vehicle has a gross 
                                vehicle weight rating of not more than 
                                14,000 pounds:

``If percentage of the maximum
  available power is:                             The credit amount is:
    At least 20 percent but less than 30 percent..              $1,000 
    At least 30 percent but less than 40 percent..              $1,750 
    At least 40 percent but less than 50 percent..              $2,000 
    At least 50 percent but less than 60 percent..              $2,250 
    At least 60 percent...........................              $2,500.
                                    ``(II) If such vehicle has a gross 
                                vehicle weight rating of more than 
                                14,000 but not more than 26,000 pounds:

``If percentage of the maximum
  available power is:                             The credit amount is:
    At least 20 percent but less than 30 percent..              $4,000 
    At least 30 percent but less than 40 percent..              $4,500 
    At least 40 percent but less than 50 percent..              $5,000 
    At least 50 percent but less than 60 percent..              $5,500 
    At least 60 percent...........................              $6,000.
                                    ``(III) If such vehicle has a gross 
                                vehicle weight rating of more than 
                                26,000 pounds:

``If percentage of the maximum
  available power is:                             The credit amount is:
    At least 20 percent but less than 30 percent..              $6,000 
    At least 30 percent but less than 40 percent..              $7,000 
    At least 40 percent but less than 50 percent..              $8,000 
    At least 50 percent but less than 60 percent..              $9,000 
    At least 60 percent...........................             $10,000.
                    ``(B) Increase for fuel efficiency.--
                            ``(i) Amount.--The amount determined under 
                        subparagraph (A)(i) with respect to a new 
                        qualified hybrid motor vehicle which is a 
                        passenger automobile or light truck shall be 
                        increased by--
                                    ``(I) $500, if such vehicle 
                                achieves at least 125 percent but less 
                                than 150 percent of the 2000 model year 
                                city fuel economy,
                                    ``(II) $1,000, if such vehicle 
                                achieves at least 150 percent but less 
                                than 175 percent of the 2000 model year 
                                city fuel economy,
                                    ``(III) $1,500, if such vehicle 
                                achieves at least 175 percent but less 
                                than 200 percent of the 2000 model year 
                                city fuel economy,
                                    ``(IV) $2,000, if such vehicle 
                                achieves at least 200 percent but less 
                                than 225 percent of the 2000 model year 
                                city fuel economy,
                                    ``(V) $2,500, if such vehicle 
                                achieves at least 225 percent but less 
                                than 250 percent of the 2000 model year 
                                city fuel economy, and
                                    ``(VI) $3,000, if such vehicle 
                                achieves at least 250 percent of the 
                                2000 model year city fuel economy.
                            ``(ii) 2000 model year city fuel economy.--
                        For purposes of clause (i), the 2000 model year 
                        city fuel economy with respect to a vehicle 
                        shall be determined using the tables provided 
                        in subsection (b)(2)(B) with respect to such 
                        vehicle.
                    ``(C) Increase for accelerated emissions 
                performance.--The amount determined under subparagraph 
                (A)(ii) with respect to an applicable heavy duty hybrid 
                motor vehicle shall be increased by the increased 
                credit amount determined in accordance with the 
                following tables:
                            ``(i) In the case of a vehicle which has a 
                        gross vehicle weight rating of not more than 
                        14,000 pounds:

``If the model year is:             The increased credit amount is:
    2002..........................................              $3,500 
    2003..........................................              $3,000 
    2004..........................................              $2,500 
    2005..........................................              $2,000 
    2006..........................................              $1,500.
                            ``(ii) In the case of a vehicle which has a 
                        gross vehicle weight rating of more than 14,000 
                        pounds but not more than 26,000 pounds:

``If the model year is:             The increased credit amount is:
    2002..........................................              $9,000 
    2003..........................................              $7,750 
    2004..........................................              $6,500 
    2005..........................................              $5,250 
    2006..........................................              $4,000.
                            ``(iii) In the case of a vehicle which has 
                        a gross vehicle weight rating of more than 
                        26,000 pounds:

``If the model year is:             The increased credit amount is:
    2002..........................................             $14,000 
    2003..........................................             $12,000 
    2004..........................................             $10,000 
    2005..........................................              $8,000 
    2006..........................................              $6,000.
                    ``(D) Definitions.--
                            ``(i) Applicable heavy duty hybrid motor 
                        vehicle.--For purposes of subparagraph (C), the 
                        term `applicable heavy duty hybrid motor 
                        vehicle' means a heavy duty hybrid motor 
                        vehicle which is powered by an internal 
                        combustion or heat engine which is certified as 
                        meeting the emission standards set in the 
                        regulations prescribed by the Administrator of 
                        the Environmental Protection Agency for 2007 
                        and later model year diesel heavy duty engines, 
                        or for 2008 and later model year ottocycle 
                        heavy duty engines, as applicable.
                            ``(ii) Heavy duty hybrid motor vehicle.--
                        For purposes of this paragraph, the term `heavy 
                        duty hybrid motor vehicle' means a new 
                        qualified hybrid motor vehicle which has a 
                        gross vehicle weight rating of more than 10,000 
                        pounds and draws propulsion energy from both of 
                        the following onboard sources of stored energy:
                                    ``(I) An internal combustion or 
                                heat engine using consumable fuel 
                                which, for 2002 and later model 
                                vehicles, has received a certificate of 
                                conformity under the Clean Air Act and 
                                meets or exceeds a level of not greater 
                                than 3.0 grams per brake horsepower-
                                hour of oxides of nitrogen and 0.01 per 
                                brake horsepower-hour of particulate 
                                matter.
                                    ``(II) A rechargeable energy 
                                storage system.
                            ``(iii) Maximum available power.--
                                    ``(I) Passenger automobile or light 
                                truck.--For purposes of subparagraph 
                                (A)(i), the term `maximum available 
                                power' means the maximum power 
                                available from the rechargeable energy 
                                storage system, during a standard 10 
                                second pulse power or equivalent test, 
                                divided by such maximum power and the 
                                SAE net power of the heat engine.
                                    ``(II) Heavy duty hybrid motor 
                                vehicle.--For purposes of subparagraph 
                                (A)(ii), the term `maximum available 
                                power' means the maximum power 
                                available from the rechargeable energy 
                                storage system, during a standard 10 
                                second pulse power or equivalent test, 
                                divided by the vehicle's total traction 
                                power. The term `total traction power' 
                                means the sum of the peak power from 
                                the rechargeable energy storage system 
                                and the heat engine peak power of the 
                                vehicle, except that if such storage 
                                system is the sole means by which the 
                                vehicle can be driven, the total 
                                traction power is the peak power of 
                                such storage system.
            ``(3) New qualified hybrid motor vehicle.--For purposes of 
        this subsection, the term `new qualified hybrid motor vehicle' 
        means a motor vehicle--
                    ``(A) which draws propulsion energy from onboard 
                sources of stored energy which are both--
                            ``(i) an internal combustion or heat engine 
                        using combustible fuel, and
                            ``(ii) a rechargeable energy storage 
                        system,
                    ``(B) which, in the case of a passenger automobile 
                or light truck--
                            ``(i) for 2002 and later model vehicles, 
                        has received a certificate of conformity under 
                        the Clean Air Act and meets or exceeds the 
                        equivalent qualifying California low emission 
                        vehicle standard under section 243(e)(2) of the 
                        Clean Air Act for that make and model year, and
                            ``(ii) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5 Tier II emission 
                        level established in regulations prescribed by 
                        the Administrator of the Environmental 
                        Protection Agency under section 202(i) of the 
                        Clean Air Act for that make and model year 
                        vehicle,
                    ``(C) the original use of which commences with the 
                taxpayer,
                    ``(D) which is acquired for use or lease by the 
                taxpayer and not for resale, and
                    ``(E) which is made by a manufacturer.
    ``(d) New Qualified Alternative Fuel Motor Vehicle Credit.--
            ``(1) Allowance of credit.--Except as provided in paragraph 
        (5), the credit determined under this subsection is an amount 
        equal to the applicable percentage of the incremental cost of 
        any new qualified alternative fuel motor vehicle placed in 
        service by the taxpayer during the taxable year.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage with respect to any new 
        qualified alternative fuel motor vehicle is--
                    ``(A) 40 percent, plus
                    ``(B) 30 percent, if such vehicle--
                            ``(i) has received a certificate of 
                        conformity under the Clean Air Act and meets or 
                        exceeds the most stringent standard available 
                        for certification under the Clean Air Act for 
                        that make and model year vehicle (other than a 
                        zero emission standard), or
                            ``(ii) has received an order certifying the 
                        vehicle as meeting the same requirements as 
                        vehicles which may be sold or leased in 
                        California and meets or exceeds the most 
                        stringent standard available for certification 
                        under the State laws of California (enacted in 
                        accordance with a waiver granted under section 
                        209(b) of the Clean Air Act) for that make and 
                        model year vehicle (other than a zero emission 
                        standard).
            ``(3) Incremental cost.--For purposes of this subsection, 
        the incremental cost of any new qualified alternative fuel 
        motor vehicle is equal to the amount of the excess of the 
        manufacturer's suggested retail price for such vehicle over 
        such price for a gasoline or diesel fuel motor vehicle of the 
        same model, to the extent such amount does not exceed--
                    ``(A) $5,000, if such vehicle has a gross vehicle 
                weight rating of not more than 8,500 pounds,
                    ``(B) $10,000, if such vehicle has a gross vehicle 
                weight rating of more than 8,500 pounds but not more 
                than 14,000 pounds,
                    ``(C) $25,000, if such vehicle has a gross vehicle 
                weight rating of more than 14,000 pounds but not more 
                than 26,000 pounds, and
                    ``(D) $40,000, if such vehicle has a gross vehicle 
                weight rating of more than 26,000 pounds.
            ``(4) Qualified alternative fuel motor vehicle defined.--
        For purposes of this subsection--
                    ``(A) In general.--The term `qualified alternative 
                fuel motor vehicle' means any motor vehicle--
                            ``(i) which is only capable of operating on 
                        an alternative fuel,
                            ``(ii) the original use of which commences 
                        with the taxpayer,
                            ``(iii) which is acquired by the taxpayer 
                        for use or lease, but not for resale, and
                            ``(iv) which is made by a manufacturer.
                    ``(B) Alternative fuel.--The term `alternative 
                fuel' means compressed natural gas, liquefied natural 
                gas, liquefied petroleum gas, hydrogen, and any liquid 
                at least 85 percent of the volume of which consists of 
                methanol.
            ``(5) Credit for mixed-fuel vehicles.--
                    ``(A) In general.--In the case of a mixed-fuel 
                vehicle placed in service by the taxpayer during the 
                taxable year, the credit determined under this 
                subsection is an amount equal to--
                            ``(i) in the case of a 75/25 mixed-fuel 
                        vehicle, 70 percent of the credit which would 
                        have been allowed under this subsection if such 
                        vehicle was a qualified alternative fuel motor 
                        vehicle, and
                            ``(ii) in the case of a 90/10 mixed-fuel 
                        vehicle, 90 percent of the credit which would 
                        have been allowed under this subsection if such 
                        vehicle was a qualified alternative fuel motor 
                        vehicle.
                    ``(B) Mixed-fuel vehicle.--For purposes of this 
                subsection, the term `mixed-fuel vehicle' means any 
                motor vehicle described in subparagraph (C) or (D) of 
                paragraph (3), which--
                            ``(i) is certified by the manufacturer as 
                        being able to perform efficiently in normal 
                        operation on a combination of an alternative 
                        fuel and a petroleum-based fuel,
                            ``(ii) either--
                                    ``(I) has received a certificate of 
                                conformity under the Clean Air Act, or
                                    ``(II) has received an order 
                                certifying the vehicle as meeting the 
                                same requirements as vehicles which may 
                                be sold or leased in California and 
                                meets or exceeds the low emission 
                                vehicle standard under section 88.105-
                                94 of title 40, Code of Federal 
                                Regulations, for that make and model 
                                year vehicle,
                            ``(iii) the original use of which commences 
                        with the taxpayer,
                            ``(iv) which is acquired by the taxpayer 
                        for use or lease, but not for resale, and
                            ``(v) which is made by a manufacturer.
                    ``(C) 75/25 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `75/25 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 75 percent alternative fuel and not more than 25 
                percent petroleum-based fuel.
                    ``(D) 90/10 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `90/10 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 90 percent alternative fuel and not more than 10 
                percent petroleum-based fuel.
    ``(e) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        29, and 30, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Consumable fuel.--The term `consumable fuel' means 
        any solid, liquid, or gaseous matter which releases energy when 
        consumed by an auxiliary power unit.
            ``(2) Motor vehicle.--The term `motor vehicle' has the 
        meaning given such term by section 30(c)(2).
            ``(3) City fuel economy.--The city fuel economy with 
        respect to any vehicle shall be measured in a manner which is 
        substantially similar to the manner city fuel economy is 
        measured in accordance with procedures under part 600 of 
        subchapter Q of chapter I of title 40, Code of Federal 
        Regulations, as in effect on the date of the enactment of this 
        section.
            ``(4) Other terms.--The terms `automobile', `passenger 
        automobile', `light truck', and `manufacturer' have the 
        meanings given such terms in regulations prescribed by the 
        Administrator of the Environmental Protection Agency for 
        purposes of the administration of title II of the Clean Air Act 
        (42 U.S.C. 7521 et seq.).
            ``(5)  Reduction in basis.--For purposes of this subtitle, 
        the basis of any property for which a credit is allowable under 
        subsection (a) shall be reduced by the amount of such credit so 
        allowed (determined without regard to subsection (e)).
            ``(6) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter--
                    ``(A) for any incremental cost taken into account 
                in computing the amount of the credit determined under 
                subsection (d) shall be reduced by the amount of such 
                credit attributable to such cost, and
                    ``(B) with respect to a vehicle described under 
                subsection (b) or (c), shall be reduced by the amount 
                of credit allowed under subsection (a) for such vehicle 
                for the taxable year.
            ``(7) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to a motor 
        vehicle which is acquired by an entity exempt from tax under 
        this chapter, the person which sells or leases such vehicle to 
        the entity shall be treated as the taxpayer with respect to the 
        vehicle for purposes of this section and the credit shall be 
        allowed to such person, but only if the person clearly 
        discloses to the entity at the time of any sale or lease the 
        specific amount of any credit otherwise allowable to the entity 
        under this section.
            ``(8) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any property which ceases 
        to be property eligible for such credit (including recapture in 
        the case of a lease period of less than the economic life of a 
        vehicle).
            ``(9) Property used outside united states, etc., not 
        qualified.--No credit shall be allowed under subsection (a) 
        with respect to any property referred to in section 50(b) or 
        with respect to the portion of the cost of any property taken 
        into account under section 179.
            ``(10) Election to not take credit.--No credit shall be 
        allowed under subsection (a) for any vehicle if the taxpayer 
        elects to not have this section apply to such vehicle.
            ``(11) Carryback and carryforward allowed.--
                    ``(A) In general.--If the credit amount allowable 
                under subsection (a) for a taxable year exceeds the 
                amount of the limitation under subsection (e) for such 
                taxable year (in this paragraph referred to as the 
                `unused credit year'), such excess shall be allowed as 
                a credit carryback for each of the 3 taxable years 
                beginning after September 30, 2002, which precede the 
                unused credit year and a credit carryforward for each 
                of the 20 taxable years which succeed the unused credit 
                year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryback and 
                credit carryforward under subparagraph (A).
            ``(12) Interaction with air quality and motor vehicle 
        safety standards.--Unless otherwise provided in this section, a 
        motor vehicle shall not be considered eligible for a credit 
        under this section unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the Clean Air 
                Act for the applicable make and model year of the 
                vehicle (or applicable air quality provisions of State 
                law in the case of a State which has adopted such 
                provision under a waiver under section 209(b) of the 
                Clean Air Act), and
                    ``(B) the motor vehicle safety provisions of 
                sections 30101 through 30169 of title 49, United States 
                Code.
    ``(g) Regulations.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall promulgate such regulations as necessary to 
        carry out the provisions of this section.
            ``(2) Coordination in prescription of certain 
        regulations.--The Secretary of the Treasury, in coordination 
        with the Secretary of Transportation and the Administrator of 
        the Environmental Protection Agency, shall prescribe such 
        regulations as necessary to determine whether a motor vehicle 
        meets the requirements to be eligible for a credit under this 
        section.
    ``(h) Termination.--This section shall not apply to any property 
purchased after--
            ``(1) in the case of a new qualified fuel cell motor 
        vehicle (as described in subsection (b)), December 31, 2011, 
        and
            ``(2) in the case of any other property, December 31, 
        2006.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) is amended by striking ``and'' at the 
        end of paragraph (27), by striking the period at the end of 
        paragraph (28) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(29) to the extent provided in section 30B(f)(5).''.
            (2) Section 55(c)(2) is amended by inserting ``30B(e),'' 
        after ``30(b)(3)''.
            (3) Section 6501(m) is amended by inserting ``30B(f)(10),'' 
        after ``30(d)(4),''.
            (4) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 30A the following new item:

        ``Sec. 30B. Alternative motor vehicle credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after September 30, 2002, in 
taxable years ending after such date.

SEC. 2002. MODIFICATION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

    (a) Amount of Credit.--
            (1) In general.--Section 30(a) (relating to allowance of 
        credit) is amended by striking ``10 percent of''.
            (2) Limitation of credit according to type of vehicle.--
        Section 30(b) (relating to limitations) is amended--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following new paragraph:
            ``(1) Limitation according to type of vehicle.--The amount 
        of the credit allowed under subsection (a) for any vehicle 
        shall not exceed the greatest of the following amounts 
        applicable to such vehicle:
                    ``(A) In the case of a vehicle which conforms to 
                the Motor Vehicle Safety Standard 500 prescribed by the 
                Secretary of Transportation, as in effect on the date 
                of the enactment of the Energy Tax Incentives Act of 
                2002, the lesser of--
                            ``(i) 10 percent of the manufacturer's 
                        suggested retail price of the vehicle, or
                            ``(ii) $1,500.
                    ``(B) In the case of a vehicle not described in 
                subparagraph (A) with a gross vehicle weight rating not 
                exceeding 8,500 pounds--
                            ``(i) $3,500, or
                            ``(ii) $6,000, if such vehicle is--
                                    ``(I) capable of a driving range of 
                                at least 100 miles on a single charge 
                                of the vehicle's rechargeable batteries 
                                as measured pursuant to the urban 
                                dynamometer schedules under appendix I 
                                to part 86 of title 40, Code of Federal 
                                Regulations, or
                                    ``(II) capable of a payload 
                                capacity of at least 1,000 pounds.
                    ``(C) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 8,500 but not exceeding 14,000 
                pounds, $10,000.
                    ``(D) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 14,000 but not exceeding 26,000 
                pounds, $20,000.
                    ``(E) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 26,000 pounds, $40,000.'', and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
            (3) Conforming amendments.--
                    (A) Section 53(d)(1)(B)(iii) is amended by striking 
                ``section 30(b)(3)(B)'' and inserting ``section 
                30(b)(2)(B)''.
            (3) Section 55(c)(2), as amended by this Act, is amended by 
        striking ``30(b)(3)'' and inserting ``30(b)(2)''.
    (b) Qualified Battery Electric Vehicle.--
            (1) In general.--Section 30(c)(1)(A) (defining qualified 
        electric vehicle) is amended to read as follows:
                    ``(A) which is--
                            ``(i) operated solely by use of a battery 
                        or battery pack, or
                            ``(ii) powered primarily through the use of 
                        an electric battery or battery pack using a 
                        flywheel or capacitor which stores energy 
                        produced by an electric motor through 
                        regenerative braking to assist in vehicle 
                        operation,''.
            (2) Leased vehicles.--Section 30(c)(1)(C) is amended by 
        inserting ``or lease'' after ``use''.
            (3) Conforming amendments.--
                    (A) Subsections (a), (b)(2), and (c) of section 30 
                are each amended by inserting ``battery'' after 
                ``qualified'' each place it appears.
                    (B) The heading of subsection (c) of section 30 is 
                amended by inserting ``Battery'' after ``Qualified''.
                    (C) The heading of section 30 is amended by 
                inserting ``battery'' after ``qualified''.
                    (D) The item relating to section 30 in the table of 
                sections for subpart B of part IV of subchapter A of 
                chapter 1 is amended by inserting ``battery'' after 
                ``qualified''.
                    (E) Section 179A(c)(3) is amended by inserting 
                ``battery'' before ``electric''.
                    (F) The heading of paragraph (3) of section 179A(c) 
                is amended by inserting ``battery'' before 
                ``electric''.
    (c) Additional Special Rules.--Section 30(d) (relating to special 
rules) is amended by adding at the end the following new paragraphs:
            ``(5) No double benefit.--The amount of any deduction or 
        other credit allowable under this chapter for any cost taken 
        into account in computing the amount of the credit determined 
        under subsection (a) shall be reduced by the amount of such 
        credit attributable to such cost.
            ``(6) Property used by tax-exempt entities.--In the case of 
        a credit amount which is allowable with respect to a vehicle 
        which is acquired by an entity exempt from tax under this 
        chapter, the person which sells or leases such vehicle to the 
        entity shall be treated as the taxpayer with respect to the 
        vehicle for purposes of this section and the credit shall be 
        allowed to such person, but only if the person clearly 
        discloses to the entity at the time of any sale or lease the 
        specific amount of any credit otherwise allowable to the entity 
        under this section.
            ``(7) Carryback and carryforward allowed.--
                    ``(A) In general.--If the credit amount allowable 
                under subsection (a) for a taxable year exceeds the 
                amount of the limitation under subsection (b)(2) for 
                such taxable year (in this paragraph referred to as the 
                `unused credit year'), such excess shall be allowed as 
                a credit carryback for each of the 3 taxable years 
                beginning after September 30, 2002, which precede the 
                unused credit year and a credit carryforward for each 
                of the 20 taxable years which succeed the unused credit 
                year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryback and 
                credit carryforward under subparagraph (A).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after September 30, 2002, in 
taxable years ending after such date.

SEC. 2003. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
(relating to foreign tax credit, etc.), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY CREDIT.

    ``(a) Credit Allowed.--There shall be allowed as a credit against 
the tax imposed by this chapter for the taxable year an amount equal to 
50 percent of the amount paid or incurred by the taxpayer during the 
taxable year for the installation of qualified clean-fuel vehicle 
refueling property.
    ``(b) Limitation.--The credit allowed under subsection (a)--
            ``(1) with respect to any retail clean-fuel vehicle 
        refueling property, shall not exceed $30,000, and
            ``(2) with respect to any residential clean-fuel vehicle 
        refueling property, shall not exceed $1,000.
    ``(c) Year Credit Allowed.--The credit allowed under subsection (a) 
shall be allowed in the taxable year in which the qualified clean-fuel 
vehicle refueling property is placed in service by the taxpayer.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified clean-fuel vehicle refueling property.--The 
        term `qualified clean-fuel vehicle refueling property' has the 
        same meaning given such term by section 179A(d).
            ``(2) Residential clean-fuel vehicle refueling property.--
        The term `residential clean-fuel vehicle refueling property' 
        means qualified clean-fuel vehicle refueling property which is 
        installed on property which is used as the principal residence 
        (within the meaning of section 121) of the taxpayer.
            ``(3) Retail clean-fuel vehicle refueling property.--The 
        term `retail clean-fuel vehicle refueling property' means 
        qualified clean-fuel vehicle refueling property which is 
        installed on property (other than property described in 
        paragraph (2)) used in a trade or business of the taxpayer.
    ``(e) Application With Other Credits.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            ``(1) the regular tax for the taxable year reduced by the 
        sum of the credits allowable under subpart A and sections 27, 
        29, 30, and 30B, over
            ``(2) the tentative minimum tax for the taxable year.
    ``(f) Basis Reduction.--For purposes of this title, the basis of 
any property shall be reduced by the portion of the cost of such 
property taken into account under subsection (a).
    ``(g) No Double Benefit.--No deduction shall be allowed under 
section 179A with respect to any property with respect to which a 
credit is allowed under subsection (a).
    ``(h) Refueling Property Installed for Tax-Exempt Entities.--In the 
case of qualified clean-fuel vehicle refueling property installed on 
property owned or used by an entity exempt from tax under this chapter, 
the person which installs such refueling property for the entity shall 
be treated as the taxpayer with respect to the refueling property for 
purposes of this section (and such refueling property shall be treated 
as retail clean-fuel vehicle refueling property) and the credit shall 
be allowed to such person, but only if the person clearly discloses to 
the entity in any installation contract the specific amount of the 
credit allowable under this section.
    ``(i) Carryforward Allowed.--
            ``(1) In general.--If the credit amount allowable under 
        subsection (a) for a taxable year exceeds the amount of the 
        limitation under subsection (e) for such taxable year (referred 
        to as the `unused credit year' in this subsection), such excess 
        shall be allowed as a credit carryforward for each of the 20 
        taxable years following the unused credit year.
            ``(2) Rules.--Rules similar to the rules of section 39 
        shall apply with respect to the credit carryforward under 
        paragraph (1).
    ``(j) Special Rules.--Rules similar to the rules of paragraphs (4) 
and (5) of section 179A(e) shall apply.
    ``(k) Regulations.--The Secretary shall prescribe such regulations 
as necessary to carry out the provisions of this section.
    ``(l) Termination.--This section shall not apply to any property 
placed in service--
            ``(1) in the case of property relating to hydrogen, after 
        December 31, 2011, and
            ``(2) in the case of any other property, after December 31, 
        2006.''.
    (b) Incentive for Production of Hydrogen at Qualified Clean-Fuel 
Vehicle Refueling Property.--Section 179A(d) (defining qualified clean-
fuel vehicle refueling property) is amended by adding at the end the 
following new flush sentence:
``In the case of clean-burning fuel which is hydrogen produced from 
another clean-burning fuel, paragraph (3)(A) shall be applied by 
substituting `production, storage, or dispensing' for `storage or 
dispensing' both places it appears.''.
    (c) Conforming Amendments.--(1) Section 1016(a), as amended by this 
Act, is amended by striking ``and'' at the end of paragraph (28), by 
striking the period at the end of paragraph (29) and inserting ``, 
and'', and by adding at the end the following new paragraph:
            ``(30) to the extent provided in section 30C(f).''.
    (2) Section 55(c)(2), as amended by this Act, is amended by 
inserting ``30C(e),'' after ``30B(e)''.
    (3) The table of sections for subpart B of part IV of subchapter A 
of chapter 1, as amended by this Act, is amended by inserting after the 
item relating to section 30B the following new item:

        ``Sec. 30C. Clean-fuel vehicle refueling property credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after September 30, 2002, in 
taxable years ending after such date.

SEC. 2004. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR VEHICLE 
              FUEL.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by inserting after 
section 40 the following new section:

``SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS MOTOR 
              VEHICLE FUEL.

    ``(a) General Rule.--For purposes of section 38, the alternative 
fuel retail sales credit for any taxable year is the applicable amount 
for each gasoline gallon equivalent of alternative fuel sold at retail 
by the taxpayer during such year as a fuel to propel any qualified 
motor vehicle.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Applicable amount.--The term `applicable amount' 
        means the amount determined in accordance with the following 
        table:

``In the case of any taxable year
  ending in--                                The applicable amount is--
    2002 and 2003.................................            30 cents 
    2004..........................................            40 cents 
    2005 and 2006.................................            50 cents.
            ``(2) Alternative fuel.--The term `alternative fuel' means 
        compressed natural gas, liquefied natural gas, liquefied 
        petroleum gas, hydrogen, and any liquid at least 85 percent of 
        the volume of which consists of methanol or ethanol.
            ``(3) Gasoline gallon equivalent.--The term `gasoline 
        gallon equivalent' means, with respect to any alternative fuel, 
        the amount (determined by the Secretary) of such fuel having a 
        Btu content of 114,000.
            ``(4) Qualified motor vehicle.--The term `qualified motor 
        vehicle' means any motor vehicle (as defined in section 
        30(c)(2)) which meets any applicable Federal or State emissions 
        standards with respect to each fuel by which such vehicle is 
        designed to be propelled.
            ``(5) Sold at retail.--
                    ``(A) In general.--The term `sold at retail' means 
                the sale, for a purpose other than resale, after 
                manufacture, production, or importation.
                    ``(B) Use treated as sale.--If any person uses 
                alternative fuel (including any use after importation) 
                as a fuel to propel any qualified alternative fuel 
                motor vehicle (as defined in section 30B(d)(4)) before 
                such fuel is sold at retail, then such use shall be 
                treated in the same manner as if such fuel were sold at 
                retail as a fuel to propel such a vehicle by such 
                person.
    ``(c) No Double Benefit.--The amount of any deduction or other 
credit allowable under this chapter for any fuel taken into account in 
computing the amount of the credit determined under subsection (a) 
shall be reduced by the amount of such credit attributable to such 
fuel.
    ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
regulations prescribed by the Secretary, rules similar to the rules of 
subsection (d) of section 52 shall apply.
    ``(e) Termination.--This section shall not apply to any fuel sold 
at retail after December 31, 2006.''.
    (b) Credit Treated as Business Credit.--Section 38(b) (relating to 
current year business credit) is amended by striking ``plus'' at the 
end of paragraph (14), by striking the period at the end of paragraph 
(15) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(16) the alternative fuel retail sales credit determined 
        under section 40A(a).''.
    (c) Transitional Rule.--Section 39(d) (relating to transitional 
rules) is amended by adding at the end the following new paragraph:
            ``(11) No carryback of section 40a credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the alternative fuel retail sales 
        credit determined under section 40A(a) may be carried back to a 
        taxable year ending before January 1, 2002.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 40 the following new item:

        ``Sec. 40A. Credit for retail sale of alternative fuels as 
                            motor vehicle fuel.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to fuel sold at retail after September 30, 2002, in taxable years 
ending after such date.

SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.

    (a) Allocation of Alcohol Fuels Credit to Patrons of a 
Cooperative.--Section 40(g) (relating to alcohol used as fuel) is 
amended by adding at the end the following new paragraph:
            ``(6) Allocation of small ethanol producer credit to 
        patrons of cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of a 
                        cooperative organization described in section 
                        1381(a), any portion of the credit determined 
                        under subsection (a)(3) for the taxable year 
                        may, at the election of the organization, be 
                        apportioned pro rata among patrons of the 
                        organization on the basis of the quantity or 
                        value of business done with or for such patrons 
                        for the taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year.
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year,
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the taxable 
                        year of each patron for which the patronage 
                        dividends for the taxable year described in 
                        subparagraph (A) are included in gross income, 
                        and
                            ``(iii) shall be included in gross income 
                        of such patrons for the taxable year in the 
                        manner and to the extent provided in section 
                        87.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a)(3) for a taxable year is less than the amount of 
                such credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                            ``(i) such reduction, over
                            ``(ii) the amount not apportioned to such 
                        patrons under subparagraph (A) for the taxable 
                        year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this chapter 
                or for purposes of section 55.''.
    (b) Improvements to Small Ethanol Producer Credit.--
            (1) Definition of small ethanol producer.--Section 40(g) 
        (relating to definitions and special rules for eligible small 
        ethanol producer credit) is amended by striking ``30,000,000'' 
        each place it appears and inserting ``60,000,000''.
            (2) Small ethanol producer credit not a passive activity 
        credit.--Clause (i) of section 469(d)(2)(A) is amended by 
        striking ``subpart D'' and inserting ``subpart D, other than 
        section 40(a)(3),''.
            (3) Allowing credit against entire regular tax and minimum 
        tax.--
                    (A) In general.--Subsection (c) of section 38 
                (relating to limitation based on amount of tax), as 
                amended by section 301(b) of the Job Creation and 
                Worker Assistance Act of 2002, is amended by 
                redesignating paragraph (4) as paragraph (5) and by 
                inserting after paragraph (3) the following new 
                paragraph:
            ``(4) Special rules for small ethanol producer credit.--
                    ``(A) In general.--In the case of the small ethanol 
                producer credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) the amounts in subparagraphs 
                                (A) and (B) thereof shall be treated as 
                                being zero, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the small 
                                ethanol producer credit).
                    ``(B) Small ethanol producer credit.--For purposes 
                of this subsection, the term `small ethanol producer 
                credit' means the credit allowable under subsection (a) 
                by reason of section 40(a)(3).''.
                    (B) Conforming amendments.--Subclause (II) of 
                section 38(c)(2)(A)(ii), as amended by section 
                301(b)(2) of the Job Creation and Worker Assistance Act 
                of 2002, and subclause (II) of section 38(c)(3)(A)(ii), 
                as added by section 301(b)(1) of such Act, are each 
                amended by inserting ``or the small ethanol producer 
                credit'' after ``employee credit''.
            (4) Small ethanol producer credit not added back to income 
        under section 87.--Section 87 (relating to income inclusion of 
        alcohol fuel credit) is amended to read as follows:

``SEC. 87. ALCOHOL FUEL CREDIT.

    ``Gross income includes an amount equal to the sum of--
            ``(1) the amount of the alcohol mixture credit determined 
        with respect to the taxpayer for the taxable year under section 
        40(a)(1), and
            ``(2) the alcohol credit determined with respect to the 
        taxpayer for the taxable year under section 40(a)(2).''.
    (c) Conforming Amendment.--Section 1388 (relating to definitions 
and special rules for cooperative organizations) is amended by adding 
at the end the following new subsection:
    ``(k) Cross Reference.--For provisions relating to the 
apportionment of the alcohol fuels credit between cooperative 
organizations and their patrons, see section 40(g)(6).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 2006. ALL ALCOHOL FUELS TAXES TRANSFERRED TO HIGHWAY TRUST FUND.

    (a) In General.--Section 9503(b)(4) (relating to certain taxes not 
transferred to Highway Trust Fund) is amended--
            (1) by adding ``or'' at the end of subparagraph (C),
            (2) by striking the comma at the end of subparagraph 
        (D)(iii) and inserting a period, and
            (3) by striking subparagraphs (E) and (F).
    (b) Effective Date.--The amendments made by this section shall 
apply to taxes imposed after September 30, 2003.

SEC. 2007. INCREASED FLEXIBILITY IN ALCOHOL FUELS TAX CREDIT.

    (a) Alcohol Fuels Credit May Be Transferred.--Section 40 (relating 
to alcohol used as fuel) is amended by adding at the end the following 
new subsection:
    ``(i) Credit May Be Transferred.--
            ``(1) In general.--A taxpayer may transfer any credit 
        allowable under paragraph (1) or (2) of subsection (a) with 
        respect to alcohol used in the production of ethyl tertiary 
        butyl ether through an assignment to a qualified assignee. Such 
        transfer may be revoked only with the consent of the Secretary.
            ``(2) Qualified assignee.--For purposes of this subsection, 
        the term `qualified assignee' means any person who--
                    ``(A) is liable for taxes imposed under section 
                4081,
                    ``(B) is required to register under section 4101, 
                and
                    ``(C) obtains a certificate from the taxpayer 
                described in paragraph (1) which identifies the amount 
                of alcohol used in such production.
            ``(3) Regulations.--The Secretary shall prescribe such 
        regulations as necessary to insure that any credit described in 
        paragraph (1) is claimed once and not reassigned by a qualified 
        assignee.''.
    (b) Alcohol Fuels Credit May Be Taken Against Motor Fuels Tax 
Liability.--
            (1) In general.--Subpart C of part III of subchapter A of 
        chapter 32 (relating to special provisions applicable to 
        petroleum products) is amended by adding at the end the 
        following new section:

``SEC. 4104. CREDIT AGAINST MOTOR FUELS TAXES.

    ``(a) Election To Use Credit Against Motor Fuels Taxes.--There is 
hereby allowed as a credit against the taxes imposed by section 4081, 
any credit allowed under paragraph (1) or (2) of section 40(a) with 
respect to alcohol used in the production of ethyl tertiary butyl ether 
to the extent--
            ``(1) such credit is not claimed by the taxpayer or the 
        qualified assignee under section 40(i) as a credit under 
        section 40, and
            ``(2) the taxpayer or qualified assignee elects to claim 
        such credit under this section.
    ``(b) Election Irrevocable.--Any election under subsection (a) 
shall be irrevocable.
    ``(c) Required Statement.--Any return claiming a credit pursuant to 
an election under this section shall be accompanied by a statement that 
the credit was not, and will not, be claimed on an income tax return.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
as necessary to avoid the claiming of double benefits and to prescribe 
the taxable periods with respect to which the credit may be claimed.''.
            (2) Conforming amendment.--Section 40(c) is amended by 
        striking ``or section 4091(c)'' and inserting ``section 
        4091(c), or section 4104''.
            (3) Clerical amendment.--The table of sections for subpart 
        C of part III of subchapter A of chapter 32 is amended by 
        adding at the end the following new item:

                              ``Sec. 4104. Credit against motor fuels 
                                        taxes.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on and after the date of the enactment of this Act.

SEC. 2008. INCENTIVES FOR BIODIESEL.

    (a) Credit for Biodiesel Used as a Fuel.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 (relating to business related credits), as amended by 
        this Act, is amended by inserting after section 40A the 
        following new section:

``SEC. 40B. BIODIESEL USED AS FUEL.

    ``(a) General Rule.--For purposes of section 38, the biodiesel 
fuels credit determined under this section for the taxable year is an 
amount equal to the biodiesel mixture credit.
    ``(b) Definition of Biodiesel Mixture Credit.--For purposes of this 
section--
            ``(1) Biodiesel mixture credit.--
                    ``(A) In general.--The biodiesel mixture credit of 
                any taxpayer for any taxable year is the sum of the 
                products of the biodiesel mixture rate for each 
                qualified biodiesel mixture and the number of gallons 
                of such mixture of the taxpayer for the taxable year.
                    ``(B) Biodiesel mixture rate.--For purposes of 
                subparagraph (A), the biodiesel mixture rate for each 
                qualified biodiesel mixture shall be--
                            ``(i) in the case of a mixture with only 
                        biodiesel V, 1 cent for each whole percentage 
                        point (not exceeding 20 percentage points) of 
                        biodiesel V in such mixture, and
                            ``(ii) in the case of a mixture with 
                        biodiesel NV, or a combination of biodiesel V 
                        and biodiesel NV, 0.5 cent for each whole 
                        percentage point (not exceeding 20 percentage 
                        points) of such biodiesel in such mixture.
            ``(2) Qualified biodiesel mixture.--
                    ``(A) In general.--The term `qualified biodiesel 
                mixture' means a mixture of diesel and biodiesel V or 
                biodiesel NV which--
                            ``(i) is sold by the taxpayer producing 
                        such mixture to any person for use as a fuel, 
                        or
                            ``(ii) is used as a fuel by the taxpayer 
                        producing such mixture.
                    ``(B) Sale or use must be in trade or business, 
                etc.--
                            ``(i) In general.--Biodiesel V or biodiesel 
                        NV used in the production of a qualified 
                        biodiesel mixture shall be taken into account--
                                    ``(I) only if the sale or use 
                                described in subparagraph (A) is in a 
                                trade or business of the taxpayer, and
                                    ``(II) for the taxable year in 
                                which such sale or use occurs.
                            ``(ii) Certification for biodiesel v.--
                        Biodiesel V used in the production of a 
                        qualified biodiesel mixture shall be taken into 
                        account only if the taxpayer described in 
                        subparagraph (A) obtains a certification from 
                        the producer of the biodiesel V which 
                        identifies the product produced.
                    ``(C) Casual off-farm production not eligible.--No 
                credit shall be allowed under this section with respect 
                to any casual off-farm production of a qualified 
                biodiesel mixture.
    ``(c) Coordination With Exemption From Excise Tax.--The amount of 
the credit determined under this section with respect to any biodiesel 
V shall, under regulations prescribed by the Secretary, be properly 
reduced to take into account any benefit provided with respect to such 
biodiesel V solely by reason of the application of section 4041(n) or 
section 4081(f).
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Biodiesel v defined.--The term `biodiesel V' means 
        the monoalkyl esters of long chain fatty acids derived solely 
        from virgin vegetable oils for use in compressional-ignition 
        (diesel) engines. Such term shall include esters derived from 
        vegetable oils from corn, soybeans, sunflower seeds, 
        cottonseeds, canola, crambe, rapeseeds, safflowers, flaxseeds, 
        rice bran, and mustard seeds.
            ``(2) Biodiesel nv defined.--The term `biodiesel nv' means 
        the monoalkyl esters of long chain fatty acids derived from 
        nonvirgin vegetable oils or animal fats for use in 
        compressional-ignition (diesel) engines.
            ``(3) Registration requirements.--The terms `biodiesel V' 
        and `biodiesel NV' shall only include a biodiesel which meets--
                            ``(i) the registration requirements for 
                        fuels and fuel additives established by the 
                        Environmental Protection Agency under section 
                        211 of the Clean Air Act (42 U.S.C. 7545), and
                            ``(ii) the requirements of the American 
                        Society of Testing and Materials D6751.
            ``(2) Biodiesel mixture not used as a fuel, etc.--
                    ``(A) Imposition of tax.--If--
                            ``(i) any credit was determined under this 
                        section with respect to biodiesel V or 
                        biodiesel NV used in the production of any 
                        qualified biodiesel mixture, and
                            ``(ii) any person--
                                    ``(I) separates such biodiesel from 
                                the mixture, or
                                    ``(II) without separation, uses the 
                                mixture other than as a fuel,
                        then there is hereby imposed on such person a 
                        tax equal to the product of the biodiesel 
                        mixture rate applicable under subsection 
                        (b)(1)(B) and the number of gallons of the 
                        mixture.
                    ``(B) Applicable laws.--All provisions of law, 
                including penalties, shall, insofar as applicable and 
                not inconsistent with this section, apply in respect of 
                any tax imposed under subparagraph (A) as if such tax 
                were imposed by section 4081 and not by this chapter.
            ``(3) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
    ``(e) Election To Have Biodiesel Fuels Credit Not Apply.--
            ``(1) In general.--A taxpayer may elect to have this 
        section not apply for any taxable year.
            ``(2) Time for making election.--An election under 
        paragraph (1) for any taxable year may be made (or revoked) at 
        any time before the expiration of the 3-year period beginning 
        on the last date prescribed by law for filing the return for 
        such taxable year (determined without regard to extensions).
            ``(3) Manner of making election.--An election under 
        paragraph (1) (or revocation thereof) shall be made in such 
        manner as the Secretary may by regulations prescribe.''.
    ``(f) Termination.--This section shall not apply to any fuel sold 
after December 31, 2005.''.
            (2) Credit treated as part of general business credit.--
        Section 38(b), as amended by this Act, is amended by striking 
        ``plus'' at the end of paragraph (15), by striking the period 
        at the end of paragraph (16) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(17) the biodiesel fuels credit determined under section 
        40B(a).''.
            (3) Conforming amendments.--
                    (A) Section 39(d), as amended by this Act, is 
                amended by adding at the end the following new 
                paragraph:
            ``(12) No carryback of biodiesel fuels credit before 
        january 1, 2003.--No portion of the unused business credit for 
        any taxable year which is attributable to the biodiesel fuels 
        credit determined under section 40B may be carried back to a 
        taxable year beginning before January 1, 2003.''.
                    (B) Section 196(c) is amended by striking ``and'' 
                at the end of paragraph (9), by striking the period at 
                the end of paragraph (10), and by adding at the end the 
                following new paragraph:
            ``(11) the biodiesel fuels credit determined under section 
        40B(a).''.
                    (C) Section 6501(m), as amended by this Act, is 
                amended by inserting ``40B(e),'' after ``40(f),''.
                    (D) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1, as amended by this Act, 
                is amended by adding after the item relating to section 
                40A the following new item:

                              ``Sec. 40B. Biodiesel used as fuel.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2002.
    (b) Reduction of Motor Fuel Excise Taxes on Biodiesel V Mixtures.--
            (1) In general.--Section 4081 (relating to manufacturers 
        tax on petroleum products) is amended by adding at the end the 
        following new subsection:
    ``(f) Biodiesel V Mixtures.--Under regulations prescribed by the 
Secretary--
            ``(1) In general.--In the case of the removal or entry of a 
        qualified biodiesel mixture with biodiesel V, the rate of tax 
        under subsection (a) shall be the otherwise applicable rate 
        reduced by the biodiesel mixture rate (if any) applicable to 
        the mixture.
            ``(2) Tax prior to mixing.--
                    ``(A) In general.--In the case of the removal or 
                entry of diesel fuel for use in producing at the time 
                of such removal or entry a qualified biodiesel mixture 
                with biodiesel V, the rate of tax under subsection (a) 
                shall be the rate determined under subparagraph (B).
                    ``(B) Determination of rate.--For purposes of 
                subparagraph (A), the rate determined under this 
                subparagraph is the rate determined under paragraph 
                (1), divided by a percentage equal to 100 percent minus 
                the percentage of biodiesel V which will be in the 
                mixture.
            ``(3) Definitions.--For purposes of this subsection, any 
        term used in this subsection which is also used in section 40B 
        shall have the meaning given such term by section 40B.
            ``(4) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (6) and (7) of subsection (c) shall apply for 
        purposes of this subsection.''.
            (2) Conforming amendments.--
                    (A) Section 4041 is amended by adding at the end 
                the following new subsection:
    ``(n) Biodiesel V Mixtures.--Under regulations prescribed by the 
Secretary, in the case of the sale or use of a qualified biodiesel 
mixture (as defined in section 40B(b)(2)) with biodiesel V, the rates 
under paragraphs (1) and (2) of subsection (a) shall be the otherwise 
applicable rates, reduced by any applicable biodiesel mixture rate (as 
defined in section 40B(b)(1)(B)).''.
                    (B) Section 6427 is amended by redesignating 
                subsection (p) as subsection (q) and by inserting after 
                subsection (o) the following new subsection:
    ``(p) Biodiesel V Mixtures.--Except as provided in subsection (k), 
if any diesel fuel on which tax was imposed by section 4081 at a rate 
not determined under section 4081(f) is used by any person in producing 
a qualified biodiesel mixture (as defined in section 40B(b)(2)) with 
biodiesel V which is sold or used in such person's trade or business, 
the Secretary shall pay (without interest) to such person an amount 
equal to the per gallon applicable biodiesel mixture rate (as defined 
in section 40B(b)(1)(B)) with respect to such fuel.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to any fuel sold after December 31, 2002, and 
        before January 1, 2006.
    (c) Highway Trust Fund Held Harmless.--There are hereby transferred 
(from time to time) from the funds of the Commodity Credit Corporation 
amounts determined by the Secretary of the Treasury to be equivalent to 
the reductions that would occur (but for this subsection) in the 
receipts of the Highway Trust Fund by reason of the amendments made by 
this section.

SEC. 2009. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER TAKEOFF 
              VEHICLES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45N. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.

    ``(a) General Rule.--For purposes of section 38, the amount of the 
commercial power takeoff vehicles credit determined under this section 
for the taxable year is $250 for each qualified commercial power 
takeoff vehicle owned by the taxpayer as of the close of the calendar 
year in which or with which the taxable year of the taxpayer ends.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified commercial power takeoff vehicle.--The term 
        `qualified commercial power takeoff vehicle' means any highway 
        vehicle described in paragraph (2) which is propelled by any 
        fuel subject to tax under section 4041 or 4081 if such vehicle 
        is used in a trade or business or for the production of income 
        (and is licensed and insured for such use).
            ``(2) Highway vehicle described.--A highway vehicle is 
        described in this paragraph if such vehicle is--
                    ``(A) designed to engage in the daily collection of 
                refuse or recyclables from homes or businesses and is 
                equipped with a mechanism under which the vehicle's 
                propulsion engine provides the power to operate a load 
                compactor, or
                    ``(B) designed to deliver ready mixed concrete on a 
                daily basis and is equipped with a mechanism under 
                which the vehicle's propulsion engine provides the 
                power to operate a mixer drum to agitate and mix the 
                product en route to the delivery site.
    ``(c) Exception for Vehicles Used by Governments, Etc.--No credit 
shall be allowed under this section for any vehicle owned by any person 
at the close of a calendar year if such vehicle is used at any time 
during such year by--
            ``(1) the United States or an agency or instrumentality 
        thereof, a State, a political subdivision of a State, or an 
        agency or instrumentality of one or more States or political 
        subdivisions, or
            ``(2) an organization exempt from tax under section 501(a).
    ``(d) Denial of Double Benefit.--The amount of any deduction under 
this subtitle for any tax imposed by subchapter B of chapter 31 or part 
III of subchapter A of chapter 32 for any taxable year shall be reduced 
(but not below zero) by the amount of the credit determined under this 
subsection for such taxable year.
    ``(e) Termination.--This section shall not apply with respect to 
any calendar year after 2004.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to general business credit), as amended by this 
Act, is amended by striking ``plus'' at the end of paragraph (22), by 
striking the period at the end of paragraph (23) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(24) the commercial power takeoff vehicles credit under 
        section 45N(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

                              ``Sec. 45N. Commercial power takeoff 
                                        vehicles credit.''.
    (d) Regulations.--Not later than January 1, 2005, the Secretary of 
the Treasury, in consultation with the Secretary of Energy, shall by 
regulation provide for the method of determining the exemption from any 
excise tax imposed under section 4041 or 4081 of the Internal Revenue 
Code of 1986 on fuel used through a mechanism to power equipment 
attached to a highway vehicle as described in section 45N(b)(2) of such 
Code, as added by subsection (a).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 2010. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE VEHICLES AND 
              FUELS.

    (a) Modification to New Qualified Hybrid Motor Vehicle Credit.--The 
table in section 30B(c)(2)(A) of the Internal Revenue Code of 1986, as 
added by this Act, is amended by striking ``5 percent'' and inserting 
``4 percent''.
    (b) Modifications to Extension of Deduction for Certain Refueling 
Property.--
            (1) In general.--Subsection (f) of section 179A of the 
        Internal Revenue Code of 1986 is amended to read as follows:
    ``(f) Termination.--This section shall not apply to any property 
placed in service--
            ``(1) in the case of property relating to hydrogen, after 
        December 31, 2011, and
            ``(2) in the case of any other property, after December 31, 
        2007.''.
            (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
        Code, as amended by section 606(a) of the Job Creation and 
        Worker Assistance Act of 2002, is amended--
                    (A) by striking ``calendar year 2004'' in clause 
                (i) and inserting ``calendar years 2004 and 2005 
                (calendar years 2004 through 2009 in the case of 
                property relating to hydrogen) '',
                    (B) by striking ``2005'' in clause (ii) and 
                inserting ``2006 (calendar year 2010 in the case of 
                property relating to hydrogen)'', and
                    (C) by striking ``2006'' in clause (iii) and 
                inserting ``2007 (calendar year 2011 in the case of 
                property relating to hydrogen)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2003, in taxable years ending after such date.
    (c) Modification to Credit for Installation of Alternative Fueling 
Stations.--Subsection (l) of section 30C of the Internal Revenue Code 
of 1986, as added by this Act, is amended to read as follows:
    ``(l) Termination.--This section shall not apply to any property 
placed in service--
            ``(1) in the case of property relating to hydrogen, after 
        December 31, 2011, and
            ``(2) in the case of any other property, after December 31, 
        2007.''.
    (d) Effective Date.--Except as provided in subsection (b)(3), the 
amendments made by this section shall apply to property placed in 
service after September 30, 2002, in taxable years ending after such 
date.

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

SEC. 2101. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOME.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible contractor, the credit determined under this section for the 
taxable year is an amount equal to the aggregate adjusted bases of all 
energy efficient property installed in a qualifying new home during 
construction of such home.
    ``(b) Limitations.--
            ``(1) Maximum credit.--
                    ``(A) In general.--The credit allowed by this 
                section with respect to a qualifying new home shall not 
                exceed--
                            ``(i) in the case of a 30-percent home, 
                        $1,250, and
                            ``(ii) in the case of a 50-percent home, 
                        $2,000.
                    ``(B) 30- or 50-percent home.--For purposes of 
                subparagraph (A)--
                            ``(i) 30-percent home.--The term `30-
                        percent home' means a qualifying new home which 
                        is certified to have a projected level of 
                        annual heating and cooling energy consumption, 
                        measured in terms of average annual energy cost 
                        to the homeowner, which is at least 30 percent 
                        less than the annual level of heating and 
                        cooling energy consumption of a reference 
                        qualifying new home constructed in accordance 
                        with the standards of chapter 4 of the 2000 
                        International Energy Conservation Code, or a 
                        qualifying new home which is a manufactured 
                        home which meets the applicable standards of 
                        the Energy Star program managed jointly by the 
                        Environmental Protection Agency and the 
                        Department of Energy.
                            ``(ii) 50-percent home.--The term `50-
                        percent home' means a qualifying new home which 
                        is certified to have a projected level of 
                        annual heating and cooling energy consumption, 
                        measured in terms of average annual energy cost 
                        to the homeowner, which is at least 50 percent 
                        less than such annual level of heating and 
                        cooling energy consumption.
                    ``(C) Prior credit amounts on same home taken into 
                account.--If a credit was allowed under subsection (a) 
                with respect to a qualifying new home in 1 or more 
                prior taxable years, the amount of the credit otherwise 
                allowable for the taxable year with respect to that 
                home shall not exceed the amount under clause (i) or 
                (ii) of subparagraph (A) (as the case may be), reduced 
                by the sum of the credits allowed under subsection (a) 
                with respect to the home for all prior taxable years.
            ``(2) Coordination with rehabilitation and energy 
        credits.--For purposes of this section--
                    ``(A) the basis of any property referred to in 
                subsection (a) shall be reduced by that portion of the 
                basis of any property which is attributable to the 
                rehabilitation credit (as determined under section 
                47(a)) or to the energy percentage of energy property 
                (as determined under section 48(a)), and
                    ``(B) expenditures taken into account under either 
                section 47 or 48(a) shall not be taken into account 
                under this section.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible contractor.--The term `eligible contractor' 
        means the person who constructed the qualifying new home, or in 
        the case of a manufactured home which conforms to Federal 
        Manufactured Home Construction and Safety Standards (24 C.F.R. 
        3280), the manufactured home producer of such home.
            ``(2) Energy efficient property.--The term `energy 
        efficient property' means any energy efficient building 
        envelope component, and any energy efficient heating or cooling 
        equipment which can, individually or in combination with other 
        components, meet the requirements of this section.
            ``(3) Qualifying new home.--The term `qualifying new home' 
        means a dwelling--
                    ``(A) located in the United States,
                    ``(B) the construction of which is substantially 
                completed after the date of the enactment of this 
                section, and
                    ``(C) the first use of which after construction is 
                as a principal residence (within the meaning of section 
                121).
            ``(4) Construction.--The term `construction' includes 
        reconstruction and rehabilitation.
            ``(5) Building envelope component.--The term `building 
        envelope component' means--
                    ``(A) any insulation material or system which is 
                specifically and primarily designed to reduce the heat 
                loss or gain of a qualifying new home when installed in 
                or on such home, and
                    ``(B) exterior windows (including skylights) and 
                doors.
            ``(6) Manufactured home included.--The term `qualifying new 
        home' includes a manufactured home conforming to Federal 
        Manufactured Home Construction and Safety Standards (24 C.F.R. 
        3280).
    ``(d) Certification.--
            ``(1) Method of certification.--
                    ``(A) In general.--A certification described in 
                subsection (b)(1)(B) shall be determined either by a 
                component-based method or a performance-based method.
                    ``(B) Component-based method.--A component-based 
                method is a method which uses the applicable technical 
                energy efficiency specifications or ratings (including 
                product labeling requirements) for the energy efficient 
                building envelope component or energy efficient heating 
                or cooling equipment. The Secretary shall, in 
                consultation with the Administrator of the 
                Environmental Protection Agency, develop prescriptive 
                component-based packages that are equivalent in energy 
                performance to properties that qualify under 
                subparagraph (C).
                    ``(C) Performance-based method.--
                            ``(i) In general.--A performance-based 
                        method is a method which calculates projected 
                        energy usage and cost reductions in the 
                        qualifying new home in relation to a reference 
                        qualifying new home--
                                    ``(I) heated by the same energy 
                                source and heating system type, and
                                    ``(II) constructed in accordance 
                                with the standards of chapter 4 of the 
                                2000 International Energy Conservation 
                                Code.
                            ``(ii) Computer software.--Computer 
                        software shall be used in support of a 
                        performance-based method certification under 
                        clause (i). Such software shall meet procedures 
                        and methods for calculating energy and cost 
                        savings in regulations promulgated by the 
                        Secretary of Energy. Such regulations on the 
                        specifications for software and verification 
                        protocols shall be based on the 2001 California 
                        Residential Alternative Calculation Method 
                        Approval Manual.
            ``(2) Provider.--A certification described in subsection 
        (b)(1)(B) shall be provided by--
                    ``(A) in the case of a component-based method, a 
                local building regulatory authority, a utility, a 
                manufactured home production inspection primary 
                inspection agency (IPIA), or a home energy rating 
                organization, or
                    ``(B) in the case of a performance-based method, an 
                individual recognized by an organization designated by 
                the Secretary for such purposes.
            ``(3) Form.--
                    ``(A) In general.--A certification described in 
                subsection (b)(1)(B) shall be made in writing in a 
                manner that specifies in readily verifiable fashion the 
                energy efficient building envelope components and 
                energy efficient heating or cooling equipment installed 
                and their respective rated energy efficiency 
                performance, and in the case of a performance-based 
                method, accompanied by a written analysis documenting 
                the proper application of a permissible energy 
                performance calculation method to the specific 
                circumstances of such qualifying new home.
                    ``(B) Form provided to buyer.--A form documenting 
                the energy efficient building envelope components and 
                energy efficient heating or cooling equipment installed 
                and their rated energy efficiency performance shall be 
                provided to the buyer of the qualifying new home. The 
                form shall include labeled R-value for insulation 
                products, NFRC-labeled U-factor and Solar Heat Gain 
                Coefficient for windows, skylights, and doors, labeled 
                AFUE ratings for furnaces and boilers, labeled HSPF 
                ratings for electric heat pumps, and labeled SEER 
                ratings for air conditioners.
                    ``(C) Ratings label affixed in dwelling.--A 
                permanent label documenting the ratings in subparagraph 
                (B) shall be affixed to the front of the electrical 
                distribution panel of the qualifying new home, or shall 
                be otherwise permanently displayed in a readily 
                inspectable location in such home.
            ``(4) Regulations.--
                    ``(A) In general.--In prescribing regulations under 
                this subsection for performance-based certification 
                methods, the Secretary, after examining the 
                requirements for energy consultants and home energy 
                ratings providers specified by the Mortgage Industry 
                National Accreditation Procedures for Home Energy 
                Rating Systems, shall prescribe procedures for 
                calculating annual energy usage and cost reductions for 
                heating and cooling and for the reporting of the 
                results. Such regulations shall--
                            ``(i) provide that any calculation 
                        procedures be fuel neutral such that the same 
                        energy efficiency measures allow a qualifying 
                        new home to be eligible for the credit under 
                        this section regardless of whether such home 
                        uses a gas or oil furnace or boiler or an 
                        electric heat pump, and
                            ``(ii) require that any computer software 
                        allow for the printing of the Federal tax forms 
                        necessary for the credit under this section and 
                        for the printing of forms for disclosure to the 
                        homebuyer.
                    ``(B) Providers.--For purposes of paragraph (2)(B), 
                the Secretary shall establish requirements for the 
                designation of individuals based on the requirements 
                for energy consultants and home energy raters specified 
                by the Mortgage Industry National Accreditation 
                Procedures for Home Energy Rating Systems.
    ``(e) Termination.--Subsection (a) shall apply to qualifying new 
homes purchased during the period beginning on the date of the 
enactment of this section and ending on December 31, 2007.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to current year business credit), as amended by 
this Act, is amended by striking ``plus'' at the end of paragraph (16), 
by striking the period at the end of paragraph (17) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(18) the new energy efficient home credit determined 
        under section 45G(a).''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable) is amended by adding at the 
end the following new subsection:
    ``(d) New Energy Efficient Home Expenses.--No deduction shall be 
allowed for that portion of expenses for a qualifying new home 
otherwise allowable as a deduction for the taxable year which is equal 
to the amount of the credit determined for such taxable year under 
section 45G(a).''.
    (d) Limitation on Carryback.--Subsection (d) of section 39, as 
amended by this Act, is amended by adding at the end the following new 
paragraph:
            ``(13) No carryback of new energy efficient home credit 
        before effective date.--No portion of the unused business 
        credit for any taxable year which is attributable to the credit 
        determined under section 45G may be carried back to any taxable 
        year ending on or before the date of the enactment of section 
        45G.''.
    (e) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196, as amended by this Act, is amended by striking ``and'' 
at the end of paragraph (10), by striking the period at the end of 
paragraph (11) and inserting ``, and'', and by adding after paragraph 
(11) the following new paragraph:
            ``(12) the new energy efficient home credit determined 
        under section 45G(a).''.
    (f) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

                              ``Sec. 45G. New energy efficient home 
                                        credit.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

    ``(a) General Rule.--For purposes of section 38, the energy 
efficient appliance credit determined under this section for the 
taxable year is an amount equal to the applicable amount determined 
under subsection (b) with respect to the eligible production of 
qualified energy efficient appliances produced by the taxpayer during 
the calendar year ending with or within the taxable year.
    ``(b) Applicable Amount; Eligible Production.--For purposes of 
subsection (a)--
            ``(1) Applicable amount.--The applicable amount is--
                    ``(A) $50, in the case of--
                            ``(i) a clothes washer which is 
                        manufactured with at least a 1.26 MEF, or
                            ``(ii) a refrigerator which consumes at 
                        least 10 percent less kWh per year than the 
                        energy conservation standards for refrigerators 
                        promulgated by the Department of Energy 
                        effective July 1, 2001, and
                    ``(B) $100, in the case of--
                            ``(i) a clothes washer which is 
                        manufactured with at least a 1.42 MEF (at least 
                        1.5 MEF for washers produced after 2004), or
                            ``(ii) a refrigerator which consumes at 
                        least 15 percent less kWh per year than such 
                        energy conservation standards.
            ``(2) Eligible production.--
                    ``(A) In general.--The eligible production of each 
                category of qualified energy efficient appliances is 
                the excess of--
                            ``(i) the number of appliances in such 
                        category which are produced by the taxpayer 
                        during such calendar year, over
                            ``(ii) the average number of appliances in 
                        such category which were produced by the 
                        taxpayer during calendar years 1999, 2000, and 
                        2001.
                    ``(B) Categories.--For purposes of subparagraph 
                (A), the categories are--
                            ``(i) clothes washers described in 
                        paragraph (1)(A)(i),
                            ``(ii) clothes washers described in 
                        paragraph (1)(B)(i),
                            ``(iii) refrigerators described in 
                        paragraph (1)(A)(ii), and
                            ``(iv) refrigerators described in paragraph 
                        (1)(B)(ii).
    ``(c) Limitation on Maximum Credit.--
            ``(1) In general.--The maximum amount of credit allowed 
        under subsection (a) with respect to a taxpayer for all taxable 
        years shall be--
                    ``(A) $30,000,000 with respect to the credit 
                determined under subsection (b)(1)(A), and
                    ``(B) $30,000,000 with respect to the credit 
                determined under subsection (b)(1)(B).
            ``(2) Limitation based on gross receipts.--The credit 
        allowed under subsection (a) with respect to a taxpayer for the 
        taxable year shall not exceed an amount equal to 2 percent of 
        the average annual gross receipts of the taxpayer for the 3 
        taxable years preceding the taxable year in which the credit is 
        determined.
            ``(3) Gross receipts.--For purposes of this subsection, the 
        rules of paragraphs (2) and (3) of section 448(c) shall apply.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified energy efficient appliance.--The term 
        `qualified energy efficient appliance' means--
                    ``(A) a clothes washer described in subparagraph 
                (A)(i) or (B)(i) of subsection (b)(1), or
                    ``(B) a refrigerator described in subparagraph 
                (A)(ii) or (B)(ii) of subsection (b)(1).
            ``(2) Clothes washer.--The term `clothes washer' means a 
        residential clothes washer, including a residential style coin 
        operated washer.
            ``(3) Refrigerator.--The term `refrigerator' means an 
        automatic defrost refrigerator-freezer which has an internal 
        volume of at least 16.5 cubic feet.
            ``(4) MEF.--The term `MEF' means Modified Energy Factor (as 
        determined by the Secretary of Energy).
    ``(e) Special Rules.--
            ``(1) In general.--Rules similar to the rules of 
        subsections (c), (d), and (e) of section 52 shall apply for 
        purposes of this section.
            ``(2) Aggregation rules.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52 or 
        subsection (m) or (o) of section 414 shall be treated as 1 
        person for purposes of subsection (a).
    ``(f) Verification.--The taxpayer shall submit such information or 
certification as the Secretary, in consultation with the Secretary of 
Energy, determines necessary to claim the credit amount under 
subsection (a).
    ``(g) Termination.--This section shall not apply--
            ``(1) with respect to refrigerators described in subsection 
        (b)(1)(A)(ii) produced after December 31, 2004, and
            ``(2) with respect to all other qualified energy efficient 
        appliances produced after December 31, 2006.''.
    (b) Limitation on Carryback.--Section 39(d) (relating to transition 
rules), as amended by this Act, is amended by adding at the end the 
following new paragraph:
            ``(14) No carryback of energy efficient appliance credit 
        before effective date.--No portion of the unused business 
        credit for any taxable year which is attributable to the energy 
        efficient appliance credit determined under section 45H may be 
        carried to a taxable year ending before January 1, 2003.''.
    (c) Conforming Amendment.--Section 38(b) (relating to general 
business credit), as amended by this Act, is amended by striking 
``plus'' at the end of paragraph (17), by striking the period at the 
end of paragraph (18) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(19) the energy efficient appliance credit determined 
        under section 45H(a).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

                              ``Sec. 45H. Energy efficient appliance 
                                        credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to appliances produced after December 31, 2002, in taxable years 
ending after such date.

SEC. 2103. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25B the following new section:

``SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the sum of--
            ``(1) 15 percent of the qualified photovoltaic property 
        expenditures made by the taxpayer during such year,
            ``(2) 15 percent of the qualified solar water heating 
        property expenditures made by the taxpayer during such year,
            ``(3) 30 percent of the qualified fuel cell property 
        expenditures made by the taxpayer during such year,
            ``(4) 30 percent of the qualified wind energy property 
        expenditures made by the taxpayer during such year, and
            ``(5) the sum of the qualified Tier 2 energy efficient 
        building property expenditures made by the taxpayer during such 
        year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) shall not exceed--
                    ``(A) $2,000 for property described in subsection 
                (d)(1),
                    ``(B) $2,000 for property described in subsection 
                (d)(2),
                    ``(C) $1,000 for each kilowatt of capacity of 
                property described in subsection (d)(4),
                    ``(D) $2,000 for property described in subsection 
                (d)(5), and
                    ``(E) for property described in subsection (d)(6)--
                            ``(i) $75 for each electric heat pump water 
                        heater,
                            ``(ii) $250 for each electric heat pump,
                            ``(iii) $250 for each advanced natural gas 
                        furnace,
                            ``(iv) $250 for each central air 
                        conditioner,
                            ``(v) $75 for each natural gas water 
                        heater, and
                            ``(vi) $250 for each geothermal heat pump.
            ``(2) Safety certifications.--No credit shall be allowed 
        under this section for an item of property unless--
                    ``(A) in the case of solar water heating property, 
                such property is certified for performance and safety 
                by the non-profit Solar Rating Certification 
                Corporation or a comparable entity endorsed by the 
                government of the State in which such property is 
                installed,
                    ``(B) in the case of a photovoltaic property, a 
                fuel cell property, or a wind energy property, such 
                property meets appropriate fire and electric code 
                requirements, and
                    ``(C) in the case of property described in 
                subsection (d)(6), such property meets the performance 
                and quality standards, and the certification 
                requirements (if any), which--
                            ``(i) have been prescribed by the Secretary 
                        by regulations (after consultation with the 
                        Secretary of Energy or the Administrator of the 
                        Environmental Protection Agency, as 
                        appropriate),
                            ``(ii) in the case of the energy efficiency 
                        ratio (EER)--
                                    ``(I) require measurements to be 
                                based on published data which is tested 
                                by manufacturers at 95 degrees 
                                Fahrenheit, and
                                    ``(II) do not require ratings to be 
                                based on certified data of the Air 
                                Conditioning and Refrigeration 
                                Institute, and
                            ``(iii) are in effect at the time of the 
                        acquisition of the property.
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under this 
subpart (other than this section and section 25D), such excess shall be 
carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such succeeding taxable year.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified solar water heating property expenditure.--
        The term `qualified solar water heating property expenditure' 
        means an expenditure for property to heat water for use in a 
        dwelling unit located in the United States and used as a 
        residence by the taxpayer if at least half of the energy used 
        by such property for such purpose is derived from the sun.
            ``(2) Qualified photovoltaic property expenditure.--The 
        term `qualified photovoltaic property expenditure' means an 
        expenditure for property that uses solar energy to generate 
        electricity for use in such a dwelling unit.
            ``(3) Solar panels.--No expenditure relating to a solar 
        panel or other property installed as a roof (or portion 
        thereof) shall fail to be treated as property described in 
        paragraph (1) or (2) solely because it constitutes a structural 
        component of the structure on which it is installed.
            ``(4) Qualified fuel cell property expenditure.--The term 
        `qualified fuel cell property expenditure' means an expenditure 
        for qualified fuel cell property (as defined in section 
        48(a)(4)) installed on or in connection with such a dwelling 
        unit.
            ``(5) Qualified wind energy property expenditure.--The term 
        `qualified wind energy property expenditure' means an 
        expenditure for property which uses wind energy to generate 
        electricity for use in such a dwelling unit.
            ``(6) Qualified tier 2 energy efficient building property 
        expenditure.--
                    ``(A) In general.--The term `qualified Tier 2 
                energy efficient building property expenditure' means 
                an expenditure for any Tier 2 energy efficient building 
                property.
                    ``(B) Tier 2 energy efficient building property.--
                The term `Tier 2 energy efficient building property' 
                means--
                            ``(i) an electric heat pump water heater 
                        which yields an energy factor of at least 1.7 
                        in the standard Department of Energy test 
                        procedure,
                            ``(ii) an electric heat pump which has a 
                        heating seasonal performance factor (HSPF) of 
                        at least 9, a seasonal energy efficiency ratio 
                        (SEER) of at least 15, and an energy efficiency 
                        ratio (EER) of at least 12.5,
                            ``(iii) an advanced natural gas furnace 
                        which achieves at least 95 percent annual fuel 
                        utilization efficiency (AFUE),
                            ``(iv) a central air conditioner which has 
                        a seasonal energy efficiency ratio (SEER) of at 
                        least 15 and an energy efficiency ratio (EER) 
                        of at least 12.5,
                            ``(v) a natural gas water heater which has 
                        an energy factor of at least 0.80 in the 
                        standard Department of Energy test procedure, 
                        and
                            ``(vi) a geothermal heat pump which has an 
                        energy efficiency ratio (EER) of at least 21.
            ``(7) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described in paragraph (1), (2), 
        (4), (5), or (6) and for piping or wiring to interconnect such 
        property to the dwelling unit shall be taken into account for 
        purposes of this section.
            ``(8) Swimming pools, etc., used as storage medium.--
        Expenditures which are properly allocable to a swimming pool, 
        hot tub, or any other energy storage medium which has a 
        function other than the function of such storage shall not be 
        taken into account for purposes of this section.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is jointly occupied and used 
        during any calendar year as a residence by 2 or more 
        individuals the following shall apply:
                    ``(A) The amount of the credit allowable, under 
                subsection (a) by reason of expenditures (as the case 
                may be) made during such calendar year by any of such 
                individuals with respect to such dwelling unit shall be 
                determined by treating all of such individuals as 1 
                taxpayer whose taxable year is such calendar year.
                    ``(B) There shall be allowable, with respect to 
                such expenditures to each of such individuals, a credit 
                under subsection (a) for the taxable year in which such 
                calendar year ends in an amount which bears the same 
                ratio to the amount determined under subparagraph (A) 
                as the amount of such expenditures made by such 
                individual during such calendar year bears to the 
                aggregate of such expenditures made by all of such 
                individuals during such calendar year.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which the individual 
                owns, such individual shall be treated as having made 
                the individual's proportionate share of any 
                expenditures of such association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(4) Allocation in certain cases.--Except in the case of 
        qualified wind energy property expenditures, if less than 80 
        percent of the use of an item is for nonbusiness purposes, only 
        that portion of the expenditures for such item which is 
        properly allocable to use for nonbusiness purposes shall be 
        taken into account.
            ``(5) When expenditure made; amount of expenditure.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an expenditure with respect to an 
                item shall be treated as made when the original 
                installation of the item is completed.
                    ``(B) Expenditures part of building construction.--
                In the case of an expenditure in connection with the 
                construction or reconstruction of a structure, such 
                expenditure shall be treated as made when the original 
                use of the constructed or reconstructed structure by 
                the taxpayer begins.
                    ``(C) Amount.--The amount of any expenditure shall 
                be the cost thereof.
            ``(6) Property financed by subsidized energy financing.--
        For purposes of determining the amount of expenditures made by 
        any individual with respect to any dwelling unit, there shall 
        not be taken in to account expenditures which are made from 
        subsidized energy financing (as defined in section 
        48(a)(5)(C)).
    ``(f) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property, the increase in the basis of such property which would 
(but for this subsection) result from such expenditure shall be reduced 
by the amount of the credit so allowed.
    ``(g) Termination.--The credit allowed under this section shall not 
apply to expenditures after December 31, 2007.''.
    (b) Credit Allowed Against Regular Tax and Alternative Minimum 
Tax.--
            (1) In general.--Section 25C(b), as added by subsection 
        (a), is amended by adding at the end the following new 
        paragraph:
            ``(3) Limitation based on amount of tax.--The credit 
        allowed under subsection (a) for the taxable year shall not 
        exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section and section 25D) and 
                section 27 for the taxable year.''.
            (2) Conforming amendments.--
                    (A) Section 25C(c), as added by subsection (a), is 
                amended by striking ``section 26(a) for such taxable 
                year reduced by the sum of the credits allowable under 
                this subpart (other than this section and section 
                25D)'' and inserting ``subsection (b)(3)''.
                    (B) Section 23(b)(4)(B) is amended by inserting 
                ``and section 25C'' after ``this section''.
                    (C) Section 24(b)(3)(B) is amended by striking ``23 
                and 25B'' and inserting ``23, 25B, and 25C''.
                    (D) Section 25(e)(1)(C) is amended by inserting 
                ``25C,'' after ``25B,''.
                    (E) Section 25B(g)(2) is amended by striking 
                ``section 23'' and inserting ``sections 23 and 25C''.
                    (F) Section 26(a)(1) is amended by striking ``and 
                25B'' and inserting ``25B, and 25C''.
                    (G) Section 904(h) is amended by striking ``and 
                25B'' and inserting ``25B, and 25C''.
                    (H) Section 1400C(d) is amended by striking ``and 
                25B'' and inserting ``25B, and 25C''.
    (c) Additional Conforming Amendments.--
            (1) Section 23(c), as in effect for taxable years beginning 
        before January 1, 2004, is amended by striking ``section 
        1400C'' and inserting ``sections 25C and 1400C''.
            (2) Section 25(e)(1)(C), as in effect for taxable years 
        beginning before January 1, 2004, is amended by inserting ``, 
        25Cs,'' after ``sections 23''.
            (3) Subsection (a) of section 1016, as amended by this Act, 
        is amended by striking ``and'' at the end of paragraph (29), by 
        striking the period at the end of paragraph (30) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(31) to the extent provided in section 25C(f), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25C.''.
            (4) Section 1400C(d), as in effect for taxable years 
        beginning before January 1, 2004, is amended by inserting ``and 
        section 25C'' after ``this section''.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 25B the following new item:

                              ``Sec. 25C. Residential energy efficient 
                                        property.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided by paragraph (2), the 
        amendments made by this section shall apply to expenditures 
        after December 31, 2002, in taxable years ending after such 
        date.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall apply to taxable years beginning after December 31, 2003.

SEC. 2104. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS AND 
              STATIONARY MICROTURBINE POWER PLANTS.

    (a) In General.--Subparagraph (A) of section 48(a)(3) (defining 
energy property) is amended by striking ``or'' at the end of clause 
(i), by adding ``or'' at the end of clause (ii), and by inserting after 
clause (ii) the following new clause:
                            ``(iii) qualified fuel cell property or 
                        qualified microturbine property,''.
    (b) Qualified Fuel Cell Property; Qualified Microturbine 
Property.--Subsection (a) of section 48 is amended by redesignating 
paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by 
inserting after paragraph (3) the following new paragraph:
            ``(4) Qualified fuel cell property; qualified microturbine 
        property.--For purposes of this subsection--
                    ``(A) Qualified fuel cell property.--
                            ``(i) In general.--The term `qualified fuel 
                        cell property' means a fuel cell power plant 
                        that--
                                    ``(I) generates at least 0.5 
                                kilowatt of electricity using an 
                                electrochemical process, and
                                    ``(II) has an electricity-only 
                                generation efficiency greater than 30 
                                percent.
                            ``(ii) Limitation.--In the case of 
                        qualified fuel cell property placed in service 
                        during the taxable year, the credit determined 
                        under paragraph (1) for such year with respect 
                        to such property shall not exceed an amount 
                        equal to the lesser of--
                                    ``(I) 30 percent of the basis of 
                                such property, or
                                    ``(II) $500 for each 0.5 kilowatt 
                                of capacity of such property.
                            ``(iii) Fuel cell power plant.--The term 
                        `fuel cell power plant' means an integrated 
                        system comprised of a fuel cell stack assembly 
                        and associated balance of plant components that 
                        converts a fuel into electricity using 
                        electrochemical means.
                            ``(iv) Termination.--Such term shall not 
                        include any property placed in service after 
                        December 31, 2007.
                    ``(B) Qualified microturbine property.--
                            ``(i) In general.--The term ``qualified 
                        microturbine property' means a stationary 
                        microturbine power plant which has an 
                        electricity-only generation efficiency not less 
                        than 26 percent at International Standard 
                        Organization conditions.
                            ``(ii) Limitation.--In the case of 
                        qualified microturbine property placed in 
                        service during the taxable year, the credit 
                        determined under paragraph (1) for such year 
                        with respect to such property shall not exceed 
                        an amount equal to the lesser of--
                                    ``(I) 10 percent of the basis of 
                                such property, or
                                    ``(II) $200 for each kilowatt of 
                                capacity of such property.
                            ``(iii) Stationary microturbine power 
                        plant.--The term `stationary microturbine power 
                        plant means a system comprising of a rotary 
                        engine which is actuated by the aerodynamic 
                        reaction or impulse or both on radial or axial 
                        curved full-circumferential-admission airfoils 
                        on a central axial rotating spindle. Such 
                        system--
                                    ``(I) commonly includes an air 
                                compressor, combustor, gas pathways 
                                which lead compressed air to the 
                                combustor and which lead hot combusted 
                                gases from the combustor to 1 or more 
                                rotating turbine spools, which in turn 
                                drive the compressor and power output 
                                shaft,
                                    ``(II) includes a fuel compressor, 
                                recuperator/regenerator, generator or 
                                alternator, integrated combined cycle 
                                equipment, cooling-heating-and-power 
                                equipment, sound attenuation apparatus, 
                                and power conditioning equipment, and
                                    ``(III) includes all secondary 
                                components located between the existing 
                                infrastructure for fuel delivery and 
                                the existing infrastructure for power 
                                distribution, including equipment and 
                                controls for meeting relevant power 
                                standards, such as voltage, frequency, 
                                and power factors.
                            ``(iv) Termination.--Such term shall not 
                        include any property placed in service after 
                        December 31, 2006.''.
    (c) Limitation.--Section 48(a)(2)(A) (relating to energy 
percentage) is amended to read as follows:
                    ``(A) In general.--The energy percentage is--
                            ``(i) in the case of qualified fuel cell 
                        property, 30 percent, and
                            ``(ii) in the case of any other energy 
                        property, 10 percent.''.
    (d) Conforming Amendments.--
                    (A) Section 29(b)(3)(A)(i)(III) is amended by 
                striking ``section 48(a)(4)(C)'' and inserting 
                ``section 48(a)(5)(C)''.
                    (B) Section 48(a)(1) is amended by inserting 
                ``except as provided in subparagraph (A)(ii) or (B)(ii) 
                of paragraph (4),'' before ``the energy''.
    (e) Effective Date.--The amendments made by this subsection shall 
apply to property placed in service after December 31, 2002, under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).

SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    (a) In General.--Part VI of subchapter B of chapter 1 is amended by 
inserting after section 179A the following new section:

``SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    ``(a) In General.--There shall be allowed as a deduction for the 
taxable year an amount equal to the energy efficient commercial 
building property expenditures made by a taxpayer for the taxable year.
    ``(b) Maximum Amount of Deduction.--The amount of energy efficient 
commercial building property expenditures taken into account under 
subsection (a) shall not exceed an amount equal to the product of--
            ``(1) $2.25, and
            ``(2) the square footage of the building with respect to 
        which the expenditures are made.
    ``(c) Year Deduction Allowed.--The deduction under subsection (a) 
shall be allowed in the taxable year in which the construction of the 
building is completed.
    ``(d) Energy Efficient Commercial Building Property Expenditures.--
For purposes of this section--
            ``(1) In general.--The term `energy efficient commercial 
        building property expenditures' means an amount paid or 
        incurred for energy efficient commercial building property 
        installed on or in connection with new construction or 
        reconstruction of property--
                    ``(A) for which depreciation is allowable under 
                section 167,
                    ``(B) which is located in the United States, and
                    ``(C) the construction or erection of which is 
                completed by the taxpayer.
        Such property includes all residential rental property, 
        including low-rise multifamily structures and single family 
        housing property which is not within the scope of Standard 
        90.1-1999 (described in paragraph (2)). Such term includes 
        expenditures for labor costs properly allocable to the onsite 
        preparation, assembly, or original installation of the 
        property.
            ``(2) Energy efficient commercial building property.--For 
        purposes of paragraph (1)--
                    ``(A) In general.--The term `energy efficient 
                commercial building property' means any property which 
                reduces total annual energy and power costs with 
                respect to the lighting, heating, cooling, ventilation, 
                and hot water supply systems of the building by 50 
                percent or more in comparison to a reference building 
                which meets the requirements of Standard 90.1-1999 of 
                the American Society of Heating, Refrigerating, and Air 
                Conditioning Engineers and the Illuminating Engineering 
                Society of North America using methods of calculation 
                under subparagraph (B) and certified by qualified 
                professionals as provided under paragraph (5).
                    ``(B) Methods of calculation.--The Secretary, in 
                consultation with the Secretary of Energy, shall 
                promulgate regulations which describe in detail methods 
                for calculating and verifying energy and power 
                consumption and cost, taking into consideration the 
                provisions of the 2001 California Nonresidential 
                Alternative Calculation Method Approval Manual. These 
                regulations shall meet the following requirements:
                            ``(i) In calculating tradeoffs and energy 
                        performance, the regulations shall prescribe 
                        the costs per unit of energy and power, such as 
                        kilowatt hour, kilowatt, gallon of fuel oil, 
                        and cubic foot or Btu of natural gas, which may 
                        be dependent on time of usage.
                            ``(ii) The calculational methodology shall 
                        require that compliance be demonstrated for a 
                        whole building. If some systems of the 
                        building, such as lighting, are designed later 
                        than other systems of the building, the method 
                        shall provide that either--
                                    ``(I) the expenses taken into 
                                account under paragraph (1) shall not 
                                occur until the date designs for all 
                                energy-using systems of the building 
                                are completed,
                                    ``(II) the energy performance of 
                                all systems and components not yet 
                                designed shall be assumed to comply 
                                minimally with the requirements of such 
                                Standard 90.1-1999, or
                                    ``(III) the expenses taken into 
                                account under paragraph (1) shall be a 
                                fraction of such expenses based on the 
                                performance of less than all energy-
                                using systems in accordance with clause 
                                (iii).
                            ``(iii) The expenditures in connection with 
                        the design of subsystems in the building, such 
                        as the envelope, the heating, ventilation, air 
                        conditioning and water heating system, and the 
                        lighting system shall be allocated to the 
                        appropriate building subsystem based on system-
                        specific energy cost savings targets in 
                        regulations promulgated by the Secretary of 
                        Energy which are equivalent, using the 
                        calculation methodology, to the whole building 
                        requirement of 50 percent savings.
                            ``(iv) The calculational methods under this 
                        subparagraph need not comply fully with section 
                        11 of such Standard 90.1-1999.
                            ``(v) The calculational methods shall be 
                        fuel neutral, such that the same energy 
                        efficiency features shall qualify a building 
                        for the deduction under this subsection 
                        regardless of whether the heating source is a 
                        gas or oil furnace or an electric heat pump.
                            ``(vi) The calculational methods shall 
                        provide appropriate calculated energy savings 
                        for design methods and technologies not 
                        otherwise credited in either such Standard 
                        90.1-1999 or in the 2001 California 
                        Nonresidential Alternative Calculation Method 
                        Approval Manual, including the following:
                                    ``(I) Natural ventilation.
                                    ``(II) Evaporative cooling.
                                    ``(III) Automatic lighting controls 
                                such as occupancy sensors, photocells, 
                                and timeclocks.
                                    ``(IV) Daylighting.
                                    ``(V) Designs utilizing semi-
                                conditioned spaces that maintain 
                                adequate comfort conditions without air 
                                conditioning or without heating.
                                    ``(VI) Improved fan system 
                                efficiency, including reductions in 
                                static pressure.
                                    ``(VII) Advanced unloading 
                                mechanisms for mechanical cooling, such 
                                as multiple or variable speed 
                                compressors.
                                    ``(VIII) The calculational methods 
                                may take into account the extent of 
                                commissioning in the building, and 
                                allow the taxpayer to take into account 
                                measured performance that exceeds 
                                typical performance.
                    ``(C) Computer software.--
                            ``(i) In general.--Any calculation under 
                        this paragraph shall be prepared by qualified 
                        computer software.
                            ``(ii) Qualified computer software.--For 
                        purposes of this subparagraph, the term 
                        `qualified computer software' means software--
                                    ``(I) for which the software 
                                designer has certified that the 
                                software meets all procedures and 
                                detailed methods for calculating energy 
                                and power consumption and costs as 
                                required by the Secretary,
                                    ``(II) which provides such forms as 
                                required to be filed by the Secretary 
                                in connection with energy efficiency of 
                                property and the deduction allowed 
                                under this subsection, and
                                    ``(III) which provides a notice 
                                form which summarizes the energy 
                                efficiency features of the building and 
                                its projected annual energy costs.
            ``(3) Allocation of deduction for public property.--In the 
        case of energy efficient commercial building property installed 
        on or in public property, the Secretary shall promulgate a 
        regulation to allow the allocation of the deduction to the 
        person primarily responsible for designing the property in lieu 
        of the public entity which is the owner of such property. Such 
        person shall be treated as the taxpayer for purposes of this 
        subsection.
            ``(4) Notice to owner.--The qualified individual shall 
        provide an explanation to the owner of the building regarding 
        the energy efficiency features of the building and its 
        projected annual energy costs as provided in the notice under 
        paragraph (2)(C)(ii)(III).
            ``(5) Certification.--
                    ``(A) In general.--Except as provided in this 
                paragraph, the Secretary shall prescribe procedures for 
                the inspection and testing for compliance of buildings 
                that are comparable, given the difference between 
                commercial and residential buildings, to the 
                requirements in the Mortgage Industry National 
                Accreditation Procedures for Home Energy Rating 
                Systems.
                    ``(B) Qualified individuals.--Individuals qualified 
                to determine compliance shall be only those individuals 
                who are recognized by an organization certified by the 
                Secretary for such purposes. The Secretary may qualify 
                a Home Ratings Systems Organization, a local building 
                code agency, a State or local energy office, a utility, 
                or any other organization which meets the requirements 
                prescribed under this section.
                    ``(C) Proficiency of qualified individuals.--The 
                Secretary shall consult with nonprofit organizations 
                and State agencies with expertise in energy efficiency 
                calculations and inspections to develop proficiency 
                tests and training programs to qualify individuals to 
                determine compliance.
    ``(e) Basis Reduction.--For purposes of this subtitle, if a 
deduction is allowed under this section with respect to any energy 
efficient commercial building property, the basis of such property 
shall be reduced by the amount of the deduction so allowed.
    ``(f) Regulations.--The Secretary shall promulgate such regulations 
as necessary to take into account new technologies regarding energy 
efficiency and renewable energy for purposes of determining energy 
efficiency and savings under this section.
    ``(g) Termination.--This section shall not apply with respect to 
any energy efficient commercial building property expenditures in 
connection with property--
            ``(1) the plans for which are not certified under 
        subsection (d)(5) on or before December 31, 2007, and
            ``(2) the construction of which is not completed on or 
        before December 31, 2009.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (30), by striking the 
        period at the end of paragraph (31) and inserting ``, and'', 
        and by adding at the end the following new paragraph:
            ``(32) to the extent provided in section 179B(e).''.
            (2) Section 1245(a) is amended by inserting ``179B,'' after 
        ``179A,'' both places it appears in paragraphs (2)(C) and 
        (3)(C).
            (3) Section 1250(b)(3) is amended by inserting before the 
        period at the end of the first sentence ``or by section 179B''.
            (4) Section 263(a)(1) is amended by striking ``or'' at the 
        end of subparagraph (G), by striking the period at the end of 
        subparagraph (H) and inserting ``, or'', and by inserting after 
        subparagraph (H) the following new subparagraph:
                    ``(I) expenditures for which a deduction is allowed 
                under section 179B.''.
            (5) Section 312(k)(3)(B) is amended by striking ``or 179A'' 
        each place it appears in the heading and text and inserting ``, 
        179A, or 179B''.
    (c) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 is amended by inserting after section 179A 
the following new item:

                              ``Sec. 179B. Energy efficient commercial 
                                        buildings deduction.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after September 30, 2002.

SEC. 2106. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR RETROFITTED 
              ENERGY MANAGEMENT DEVICES.

    (a) In General.--Part VI of subchapter B of chapter 1 (relating to 
itemized deductions for individuals and corporations), as amended by 
this Act, is amended by inserting after section 179B the following new 
section:

``SEC. 179C. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED ENERGY 
              MANAGEMENT DEVICES.

    ``(a) Allowance of Deduction.--In the case of a taxpayer who is a 
supplier of electric energy or natural gas or a provider of electric 
energy or natural gas services, there shall be allowed as a deduction 
an amount equal to the cost of each qualified energy management device 
placed in service during the taxable year.
    ``(b) Maximum Deduction.--The deduction allowed by this section 
with respect to each qualified energy management device shall not 
exceed $30.
    ``(c) Qualified Energy Management Device.--The term `qualified 
energy management device' means any tangible property to which section 
168 applies if such property is a meter or metering device--
            ``(1) which is acquired and used by the taxpayer to enable 
        consumers to manage their purchase or use of electricity or 
        natural gas in response to energy price and usage signals, and
            ``(2) which permits reading of energy price and usage 
        signals on at least a daily basis.
    ``(d) Property Used Outside the United States Not Qualified.--No 
deduction shall be allowed under subsection (a) with respect to 
property which is used predominantly outside the United States or with 
respect to the portion of the cost of any property taken into account 
under section 179.
    ``(e) Basis Reduction.--
            ``(1) In general.--For purposes of this title, the basis of 
        any property shall be reduced by the amount of the deduction 
        with respect to such property which is allowed by subsection 
        (a).
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property that is of a character subject 
        to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1), as amended by this Act, is amended 
        by striking ``or'' at the end of subparagraph (H), by striking 
        the period at the end of subparagraph (I) and inserting ``, 
        or'', and by inserting after subparagraph (I) the following new 
        subparagraph:
                    ``(J) expenditures for which a deduction is allowed 
                under section 179C.''.
            (2) Section 312(k)(3)(B), as amended by this Act, is 
        amended by striking ``or 179B'' each place it appears in the 
        heading and text and inserting ``, 179B, or 179C''.
            (3) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (31), by striking the 
        period at the end of paragraph (32) and inserting ``, and'', 
        and by adding at the end the following new paragraph:
            ``(33) to the extent provided in section 179C(e)(1).''.
            (4) Section 1245(a), as amended by this Act, is amended by 
        inserting ``179C,'' after ``179B,'' both places it appears in 
        paragraphs (2)(C) and (3)(C).
            (5) The table of contents for subpart B of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended 
        by inserting after the item relating to section 179B the 
        following new item:

                              ``Sec. 179C. Deduction for qualified new 
                                        or retrofitted energy 
                                        management devices.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified energy management devices placed in service after 
the date of the enactment of this Act, in taxable years ending after 
such date.

SEC. 2107. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF 
              QUALIFIED ENERGY MANAGEMENT DEVICES.

    (a) In General.--Subparagraph (A) of section 168(e)(3) (relating to 
classification of property) is amended by striking ``and'' at the end 
of clause (ii), by striking the period at the end of clause (iii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(iv) any qualified energy management 
                        device.''.
    (b) Definition of Qualified Energy Management Device.--Section 
168(i) (relating to definitions and special rules) is amended by 
inserting at the end the following new paragraph:
            ``(15) Qualified energy management device.--The term 
        `qualified energy management device' means any qualified energy 
        management device as defined in section 179C(c) which is placed 
        in service by a taxpayer who is a supplier of electric energy 
        or natural gas or a provider of electric energy or natural gas 
        services.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 2108. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

    (a) In General.--Subparagraph (A) of section 48(a)(3) (defining 
energy property), as amended by this Act, is amended by striking ``or'' 
at the end of clause (ii), by adding ``or'' at the end of clause (iii), 
and by inserting after clause (iii) the following new clause:
                            ``(iv) combined heat and power system 
                        property,''.
    (b) Combined Heat and Power System Property.--Subsection (a) of 
section 48, as amended by this Act, is amended by redesignating 
paragraphs (5) and (6) as paragraphs (6) and (7), respectively, and by 
inserting after paragraph (4) the following new paragraph:
            ``(5) Combined heat and power system property.--For 
        purposes of this subsection--
                    ``(A) Combined heat and power system property.--The 
                term `combined heat and power system property' means 
                property comprising a system--
                            ``(i) which uses the same energy source for 
                        the simultaneous or sequential generation of 
                        electrical power, mechanical shaft power, or 
                        both, in combination with the generation of 
                        steam or other forms of useful thermal energy 
                        (including heating and cooling applications),
                            ``(ii) which has an electrical capacity of 
                        more than 50 kilowatts or a mechanical energy 
                        capacity of more than 67 horsepower or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities,
                            ``(iii) which produces--
                                    ``(I) at least 20 percent of its 
                                total useful energy in the form of 
                                thermal energy, and
                                    ``(II) at least 20 percent of its 
                                total useful energy in the form of 
                                electrical or mechanical power (or 
                                combination thereof),
                            ``(iv) the energy efficiency percentage of 
                        which exceeds 60 percent (70 percent in the 
                        case of a system with an electrical capacity in 
                        excess of 50 megawatts or a mechanical energy 
                        capacity in excess of 67,000 horsepower, or an 
                        equivalent combination of electrical and 
                        mechanical energy capacities), and
                            ``(v) which is placed in service after 
                        December 31, 2002, and before January 1, 2007.
                    ``(B) Special rules.--
                            ``(i) Energy efficiency percentage.--For 
                        purposes of subparagraph (A)(iv), the energy 
                        efficiency percentage of a system is the 
                        fraction--
                                    ``(I) the numerator of which is the 
                                total useful electrical, thermal, and 
                                mechanical power produced by the system 
                                at normal operating rates, and expected 
                                to be consumed in its normal 
                                application, and
                                    ``(II) the denominator of which is 
                                the lower heating value of the primary 
                                fuel source for the system.
                            ``(ii) Determinations made on btu basis.--
                        The energy efficiency percentage and the 
                        percentages under subparagraph (A)(iii) shall 
                        be determined on a Btu basis.
                            ``(iii) Input and output property not 
                        included.--The term `combined heat and power 
                        system property' does not include property used 
                        to transport the energy source to the facility 
                        or to distribute energy produced by the 
                        facility.
                            ``(iv) Public utility property.--
                                    ``(I) Accounting rule for public 
                                utility property.--If the combined heat 
                                and power system property is public 
                                utility property (as defined in section 
                                168(i)(10)), the taxpayer may only 
                                claim the credit under the subsection 
                                if, with respect to such property, the 
                                taxpayer uses a normalization method of 
                                accounting.
                                    ``(II) Certain exception not to 
                                apply.--The matter following paragraph 
                                (3)(D) shall not apply to combined heat 
                                and power system property.
                             ``(v) Nonapplication of certain rules.--
                        For purposes of determining if the term 
                        `combined heat and power system property' 
                        includes technologies which generate 
                        electricity or mechanical power using back-
                        pressure steam turbines in place of existing 
                        pressure-reducing valves or which make use of 
                        waste heat from industrial processes such as by 
                        using organic rankin, stirling, or kalina heat 
                        engine systems, subparagraph (A) shall be 
                        applied without regard to clauses (iii) and 
                        (iv) thereof.
                    ``(C) Extension of depreciation recovery period.--
                If a taxpayer is allowed credit under this section for 
                combined heat and power system property and such 
                property would (but for this subparagraph) have a class 
                life of 15 years or less under section 168, such 
                property shall be treated as having a 22-year class 
                life for purposes of section 168.''.
    (c) No Carryback of Energy Credit Before Effective Date.--
Subsection (d) of section 39, as amended by this Act, is amended by 
adding at the end the following new paragraph:
            ``(15) No carryback of energy credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the energy credit with respect to 
        property described in section 48(a)(5) may be carried back to a 
        taxable year ending before January 1, 2003.''.
    (d) Conforming Amendments.--
                    (A) Section 25C(e)(6), as added by this Act, is 
                amended by striking ``section 48(a)(5)(C)'' and 
                inserting ``section 48(a)(6)(C)''.
                    (B) Section 29(b)(3)(A)(i)(III), as amended by this 
                Act, is amended by striking ``section 48(a)(5)(C)'' and 
                inserting ``section 48(a)(6)(C)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2002, in taxable 
years ending after such date.

SEC. 2109. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits), as amended by this Act, 
is amended by inserting after section 25C the following new section:

``SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 10 percent of the amount paid 
or incurred by the taxpayer for qualified energy efficiency 
improvements installed during such taxable year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed by this section 
        with respect to a dwelling shall not exceed $300.
            ``(2) Prior credit amounts for taxpayer on same dwelling 
        taken into account.--If a credit was allowed to the taxpayer 
        under subsection (a) with respect to a dwelling in 1 or more 
        prior taxable years, the amount of the credit otherwise 
        allowable for the taxable year with respect to that dwelling 
        shall not exceed the amount of $300 reduced by the sum of the 
        credits allowed under subsection (a) to the taxpayer with 
        respect to the dwelling for all prior taxable years.
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under this 
subpart (other than this section) for any taxable year, such excess 
shall be carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such succeeding taxable year.
    ``(d) Qualified Energy Efficiency Improvements.--For purposes of 
this section, the term `qualified energy efficiency improvements' means 
any energy efficient building envelope component which is certified to 
meet or exceed the prescriptive criteria for such component in the 2000 
International Energy Conservation Code, any energy efficient building 
envelope component which is described in subsection (f)(4)(B) and is 
certified by the Energy Star program managed jointly by the 
Environmental Protection Agency and the Department of Energy, or any 
combination of energy efficiency measures which are certified as 
achieving at least a 30 percent reduction in heating and cooling energy 
usage for the dwelling (as measured in terms of energy cost to the 
taxpayer), if--
            ``(1) such component or combination of measures is 
        installed in or on a dwelling--
                    ``(A) located in the United States, and
                    ``(B) owned and used by the taxpayer as the 
                taxpayer's principal residence (within the meaning of 
                section 121),
            ``(2) the original use of such component or combination of 
        measures commences with the taxpayer, and
            ``(3) such component or combination of measures reasonably 
        can be expected to remain in use for at least 5 years.
    ``(e) Certification.--
            ``(1) Methods of certification.--
                    ``(A) Component-based method.--The certification 
                described in subsection (d) for any component described 
                in such subsection shall be determined on the basis of 
                applicable energy efficiency ratings (including product 
                labeling requirements) for affected building envelope 
                components.
                    ``(B) Performance-based method.--
                            ``(i) In general.--The certification 
                        described in subsection (d) for any combination 
                        of measures described in such subsection shall 
                        be--
                                    ``(I) determined by comparing the 
                                projected heating and cooling energy 
                                usage for the dwelling to such usage 
                                for such dwelling in its original 
                                condition, and
                                    ``(II) accompanied by a written 
                                analysis documenting the proper 
                                application of a permissible energy 
                                performance calculation method to the 
                                specific circumstances of such 
                                dwelling.
                            ``(ii) Computer software.--Computer 
                        software shall be used in support of a 
                        performance-based method certification under 
                        clause (i). Such software shall meet procedures 
                        and methods for calculating energy and cost 
                        savings in regulations promulgated by the 
                        Secretary of Energy. Such regulations on the 
                        specifications for software and verification 
                        protocols shall be based on the 2001 California 
                        Residential Alternative Calculation Method 
                        Approval Manual.
            ``(2) Provider.--A certification described in subsection 
        (d) shall be provided by--
                    ``(A) in the case of the method described in 
                paragraph (1)(A), by a third party, such as a local 
                building regulatory authority, a utility, a 
                manufactured home production inspection primary 
                inspection agency (IPIA), or a home energy rating 
                organization, or
                    ``(B) in the case of the method described in 
                paragraph (1)(B), an individual recognized by an 
                organization designated by the Secretary for such 
                purposes.
            ``(3) Form.--A certification described in subsection (d) 
        shall be made in writing on forms which specify in readily 
        inspectable fashion the energy efficient components and other 
        measures and their respective efficiency ratings, and which 
        include a permanent label affixed to the electrical 
        distribution panel of the dwelling.
            ``(4) Regulations.--
                    ``(A) In general.--In prescribing regulations under 
                this subsection for certification methods described in 
                paragraph (1)(B), the Secretary, after examining the 
                requirements for energy consultants and home energy 
                ratings providers specified by the Mortgage Industry 
                National Accreditation Procedures for Home Energy 
                Rating Systems, shall prescribe procedures for 
                calculating annual energy usage and cost reductions for 
                heating and cooling and for the reporting of the 
                results. Such regulations shall--
                            ``(i) provide that any calculation 
                        procedures be fuel neutral such that the same 
                        energy efficiency measures allow a dwelling to 
                        be eligible for the credit under this section 
                        regardless of whether such dwelling uses a gas 
                        or oil furnace or boiler or an electric heat 
                        pump, and
                            ``(ii) require that any computer software 
                        allow for the printing of the Federal tax forms 
                        necessary for the credit under this section and 
                        for the printing of forms for disclosure to the 
                        owner of the dwelling.
                    ``(B) Providers.--For purposes of paragraph (2)(B), 
                the Secretary shall establish requirements for the 
                designation of individuals based on the requirements 
                for energy consultants and home energy raters specified 
                by the Mortgage Industry National Accreditation 
                Procedures for Home Energy Rating Systems.
    ``(f) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Dollar amounts in case of joint occupancy.--In the 
        case of any dwelling unit which is jointly occupied and used 
        during any calendar year as a residence by 2 or more 
        individuals the following shall apply:
                    ``(A) The amount of the credit allowable under 
                subsection (a) by reason of expenditures for the 
                qualified energy efficiency improvements made during 
                such calendar year by any of such individuals with 
                respect to such dwelling unit shall be determined by 
                treating all of such individuals as 1 taxpayer whose 
                taxable year is such calendar year.
                    ``(B) There shall be allowable, with respect to 
                such expenditures to each of such individuals, a credit 
                under subsection (a) for the taxable year in which such 
                calendar year ends in an amount which bears the same 
                ratio to the amount determined under subparagraph (A) 
                as the amount of such expenditures made by such 
                individual during such calendar year bears to the 
                aggregate of such expenditures made by all of such 
                individuals during such calendar year.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having paid his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of the cost of qualified energy efficiency 
        improvements made by such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which the individual 
                owns, such individual shall be treated as having paid 
                the individual's proportionate share of the cost of 
                qualified energy efficiency improvements made by such 
                association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(4) Building envelope component.--The term `building 
        envelope component' means--
                    ``(A) insulation material or system which is 
                specifically and primarily designed to reduce the heat 
                loss or gain or a dwelling when installed in or on such 
                dwelling,
                    ``(B) exterior windows (including skylights), and
                    ``(C) exterior doors.
            ``(5) Manufactured homes included.--For purposes of this 
        section, the term `dwelling' includes a manufactured home which 
        conforms to Federal Manufactured Home Construction and Safety 
        Standards (24 C.F.R. 3280).
    ``(g) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditure with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.
    ``(h) Application of Section.--Subsection (a) shall apply to 
qualified energy efficiency improvements installed during the period 
beginning on the date of the enactment of this section and ending on 
December 31, 2006.''.
    (b) Credit Allowed Against Regular Tax and Alternative Minimum 
Tax.--
            (1) In general.--Section 25D(b), as added by subsection 
        (a), is amended by adding at the end the following new 
        paragraph:
            ``(3) Limitation based on amount of tax.--The credit 
        allowed under subsection (a) for the taxable year shall not 
        exceed the excess of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) plus the tax imposed by 
                section 55, over
                    ``(B) the sum of the credits allowable under this 
                subpart (other than this section) and section 27 for 
                the taxable year.''.
            (2) Conforming amendments.--
                    (A) Section 25D(c), as added by subsection (a), is 
                amended by striking ``section 26(a) for such taxable 
                year reduced by the sum of the credits allowable under 
                this subpart (other than this section)'' and inserting 
                ``subsection (b)(3)''.
                    (B) Section 23(b)(4)(B), as amended by this Act, is 
                amended by striking ``section 25C'' and inserting 
                ``sections 25C and 25D''.
                    (C) Section 24(b)(3)(B), as amended by this Act, is 
                amended by striking ``and 25C'' and inserting ``25C, 
                and 25D''.
                    (D) Section 25(e)(1)(C), as amended by this Act, is 
                amended by inserting ``25D,'' after ``25C,''.
                    (E) Section 25B(g)(2), as amended by this Act, is 
                amended by striking ``23 and 25C'' and inserting ``23, 
                25C, and 25D''.
                    (F) Section 26(a)(1), as amended by this Act, is 
                amended by striking ``and 25C'' and inserting ``25C, 
                and 25D''.
                    (G) Section 904(h), as amended by this Act, is 
                amended by striking ``and 25C'' and inserting ``25C, 
                and 25D''.
                    (H) Section 1400C(d), as amended by this Act, is 
                amended by striking ``and 25C'' and inserting ``25C, 
                and 25D''.
    (c) Additional Conforming Amendments.--
            (1) Section 23(c), as in effect for taxable years beginning 
        before January 1, 2004, and as amended by this Act, is amended 
        by inserting ``, 25D,'' after ``sections 25C''.
            (2) Section 25(e)(1)(C), as in effect for taxable years 
        beginning before January 1, 2004, and as amended by this Act, 
        is amended by inserting ``25D,'' after ``25C,''.
            (3) Subsection (a) of section 1016, as amended by this Act, 
        is amended by striking ``and'' at the end of paragraph (32), by 
        striking the period at the end of paragraph (33) and inserting 
        ``; and'', and by adding at the end the following new 
        paragraph:
            ``(34) to the extent provided in section 25D(f), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25D.''.
            (4) Section 1400C(d), as in effect for taxable years 
        beginning before January 1, 2004, and as amended by this Act, 
        is amended by striking ``section 25C'' and inserting ``sections 
        25C and 25D''.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended 
        by inserting after the item relating to section 25C the 
        following new item:

                              ``Sec. 25D. Energy efficiency 
                                        improvements to existing 
                                        homes.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided by paragraph (2), the 
        amendments made by this section shall apply to expenditures 
        after December 31, 2002, in taxable years ending after such 
        date.
            (2) Subsection (b).--The amendments made by subsection (b) 
        shall apply to taxable years beginning after December 31, 2003.

SEC. 2110. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR RETROFITTED 
              WATER SUBMETERING DEVICES.

    (a) In General.--Part VI of subchapter B of chapter 1 (relating to 
itemized deductions for individuals and corporations), as amended by 
this Act, is amended by inserting after section 179D the following new 
section:

``SEC. 179E. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED WATER 
              SUBMETERING DEVICES.

    ``(a) Allowance of Deduction.--In the case of a taxpayer who is an 
eligible resupplier, there shall be allowed as a deduction an amount 
equal to the cost of each qualified water submetering device placed in 
service during the taxable year.
    ``(b) Maximum Deduction.--The deduction allowed by this section 
with respect to each qualified water submetering device shall not 
exceed $30.
    ``(c) Eligible Resupplier.--For purposes of this section, the term 
`eligible resupplier' means any taxpayer who purchases and installs 
qualified water submetering devices in every unit in any multi-unit 
property.
    ``(d) Qualified Water Submetering Device.--The term `qualified 
water submetering device' means any tangible property to which section 
168 applies if such property is a submetering device (including 
ancillary equipment)--
            ``(1) which is purchased and installed by the taxpayer to 
        enable consumers to manage their purchase or use of water in 
        response to water price and usage signals, and
            ``(2) which permits reading of water price and usage 
        signals on at least a daily basis.
    ``(e) Property Used Outside the United States Not Qualified.--No 
deduction shall be allowed under subsection (a) with respect to 
property which is used predominantly outside the United States or with 
respect to the portion of the cost of any property taken into account 
under section 179.
    ``(f) Basis Reduction.--
            ``(1) In general.--For purposes of this title, the basis of 
        any property shall be reduced by the amount of the deduction 
        with respect to such property which is allowed by subsection 
        (a).
            ``(2) Ordinary income recapture.--For purposes of section 
        1245, the amount of the deduction allowable under subsection 
        (a) with respect to any property that is of a character subject 
        to the allowance for depreciation shall be treated as a 
        deduction allowed for depreciation under section 167.
    ``(g) Termination.--This section shall not apply to any property 
placed in service after December 31, 2007.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1), as amended by this Act, is amended 
        by striking ``or'' at the end of subparagraph (J), by striking 
        the period at the end of subparagraph (K) and inserting ``, 
        or'', and by inserting after subparagraph (K) the following new 
        subparagraph:
                    ``(L) expenditures for which a deduction is allowed 
                under section 179E.''.
            (2) Section 312(k)(3)(B), as amended by this Act, is 
        amended by striking ``or 179D'' each place it appears in the 
        heading and text and inserting ``, 179D, or 179E''.
            (3) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (34), by striking the 
        period at the end of paragraph (35) and inserting ``, and'', 
        and by adding at the end the following new paragraph:
            ``(36) to the extent provided in section 179E(f)(1).''.
            (4) Section 1245(a), as amended by this Act, is amended by 
        inserting ``179E,'' after ``179D,'' both places it appears in 
        paragraphs (2)(C) and (3)(C).
            (5) The table of contents for subpart B of part IV of 
        subchapter A of chapter 1, as amended by this Act, is amended 
        by inserting after the item relating to section 179D the 
        following new item:

                              ``Sec. 179E. Deduction for qualified new 
                                        or retrofitted water 
                                        submetering devices.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified water submetering devices placed in service after 
the date of the enactment of this Act, in taxable years ending after 
such date.

SEC. 2111. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF 
              QUALIFIED WATER SUBMETERING DEVICES.

    (a) In General.--Subparagraph (A) of section 168(e)(3) (relating to 
classification of property) is amended by striking ``and'' at the end 
of clause (iii), by striking the period at the end of clause (iv) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(v) any qualified water submetering 
                        device.''.
    (b) Definition of Qualified Water Submetering Device.--Section 
168(i) (relating to definitions and special rules), as amended by this 
Act, is amended by inserting at the end the following new paragraph:
            ``(16) Qualified water submetering device.--The term 
        `qualified water submetering device' means any qualified water 
        submetering device (as defined in section 179E(d)) which is 
        placed in service before January 1, 2008, by a taxpayer who is 
        an eligible resupplier (as defined in section 179E(c)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

                   TITLE XXII--CLEAN COAL INCENTIVES

Subtitle A--Credit for Emission Reductions and Efficiency Improvements 
        in Existing Coal-Based Electricity Generation Facilities

SEC. 2201. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
              TECHNOLOGY UNIT.

    (a) Credit for Production From a Qualifying Clean Coal Technology 
Unit.--Subpart D of part IV of subchapter A of chapter 1 (relating to 
business related credits), as amended by this Act, is amended by adding 
at the end the following new section:

``SEC. 45I. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
              TECHNOLOGY UNIT.

    ``(a) General Rule.--For purposes of section 38, the qualifying 
clean coal technology production credit of any taxpayer for any taxable 
year is equal to the product of--
            ``(1) the applicable amount of clean coal technology 
        production credit, multiplied by
            ``(2) the applicable percentage of the kilowatt hours of 
        electricity produced by the taxpayer during such taxable year 
        at a qualifying clean coal technology unit, but only if such 
        production occurs during the 10-year period beginning on the 
        date the unit was returned to service after becoming a 
        qualifying clean coal technology unit.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of this section, the 
        applicable amount of clean coal technology production credit is 
        equal to $0.0034.
            ``(2) Inflation adjustment.--For calendar years after 2003, 
        the applicable amount of clean coal technology production 
        credit shall be adjusted by multiplying such amount by the 
        inflation adjustment factor for the calendar year in which the 
        amount is applied. If any amount as increased under the 
        preceding sentence is not a multiple of 0.01 cent, such amount 
        shall be rounded to the nearest multiple of 0.01 cent.
    ``(c) Applicable Percentage.--For purposes of this section, with 
respect to any qualifying clean coal technology unit, the applicable 
percentage is the percentage equal to the ratio which the portion of 
the national megawatt capacity limitation allocated to the taxpayer 
with respect to such unit under subsection (e) bears to the total 
megawatt capacity of such unit.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualifying clean coal technology unit.--The term 
        `qualifying clean coal technology unit' means a clean coal 
        technology unit of the taxpayer which--
                    ``(A) on the date of the enactment of this section 
                was a coal-based electricity generating steam 
                generator-turbine unit which was not a clean coal 
                technology unit,
                    ``(B) has a nameplate capacity rating of not more 
                than 300,000 kilowatts,
                    ``(C) becomes a clean coal technology unit as the 
                result of the retrofitting, repowering, or replacement 
                of the unit with clean coal technology during the 10-
                year period beginning on the date of the enactment of 
                this section,
                    ``(D) is not receiving nor is scheduled to receive 
                funding under the Clean Coal Technology Program, the 
                Power Plant Improvement Initiative, or the Clean Coal 
                Power Initiative administered by the Secretary of 
                Energy, and
                    ``(E) receives an allocation of a portion of the 
                national megawatt capacity limitation under subsection 
                (e).
            ``(2) Clean coal technology unit.--The term `clean coal 
        technology unit' means a unit which--
                    ``(A) uses clean coal technology, including 
                advanced pulverized coal or atmospheric fluidized bed 
                combustion, pressurized fluidized bed combustion, 
                integrated gasification combined cycle, or any other 
                technology for the production of electricity,
                    ``(B) uses coal to produce 75 percent or more of 
                its thermal output as electricity,
                    ``(C) has a design net heat rate of at least 500 
                less than that of such unit as described in paragraph 
                (1)(A),
                    ``(D) has a maximum design net heat rate of not 
                more than 9,500, and
                    ``(E) meets the pollution control requirements of 
                paragraph (3).
            ``(3) Pollution control requirements.--
                    ``(A) In general.--A unit meets the requirements of 
                this paragraph if--
                            ``(i) its emissions of sulfur dioxide, 
                        nitrogen oxide, or particulates meet the lower 
                        of the emission levels for each such emission 
                        specified in--
                                    ``(I) subparagraph (B), or
                                    ``(II) the new source performance 
                                standards of the Clean Air Act (42 
                                U.S.C. 7411) which are in effect for 
                                the category of source at the time of 
                                the retrofitting, repowering, or 
                                replacement of the unit, and
                            ``(ii) its emissions do not exceed any 
                        relevant emission level specified by regulation 
                        pursuant to the hazardous air pollutant 
                        requirements of the Clean Air Act (42 U.S.C. 
                        7412) in effect at the time of the 
                        retrofitting, repowering, or replacement.
                    ``(B) Specific levels.--The levels specified in 
                this subparagraph are--
                            ``(i) in the case of sulfur dioxide 
                        emissions, 50 percent of the sulfur dioxide 
                        emission levels specified in the new source 
                        performance standards of the Clean Air Act (42 
                        U.S.C. 7411) in effect on the date of the 
                        enactment of this section for the category of 
                        source,
                            ``(ii) in the case of nitrogen oxide 
                        emissions--
                                    ``(I) 0.1 pound per million Btu of 
                                heat input if the unit is not a 
                                cyclone-fired boiler, and
                                    ``(II) if the unit is a cyclone-
                                fired boiler, 15 percent of the 
                                uncontrolled nitrogen oxide emissions 
                                from such boilers, and
                            ``(iii) in the case of particulate 
                        emissions, 0.02 pound per million Btu of heat 
                        input.
            ``(4) Design net heat rate.--The design net heat rate with 
        respect to any unit, measured in Btu per kilowatt hour (HHV)--
                    ``(A) shall be based on the design annual heat 
                input to and the design annual net electrical output 
                from such unit (determined without regard to such 
                unit's co-generation of steam),
                    ``(B) shall be adjusted for the heat content of the 
                design coal to be used by the unit if it is less than 
                12,000 Btu per pound according to the following 
                formula:
        Design net heat rate = Unit net heat rate X [l- {((12,000-
        design coal heat content, Btu per pound)/1,000) X 0.013}], and
                    ``(C) shall be corrected for the site reference 
                conditions of--
            ``(i) elevation above sea level of 500 feet,
            ``(ii) air pressure of 14.4 pounds per square inch absolute 
        (psia),
            ``(iii) temperature, dry bulb of 63 deg.F,
            ``(iv) temperature, wet bulb of 54 deg.F, and
            ``(v) relative humidity of 55 percent.
            ``(5) HHV.--The term `HHV' means higher heating value.
            ``(6) Application of certain rules.--The rules of 
        paragraphs (3), (4), and (5) of section 45(d) shall apply.
            ``(7) Inflation adjustment factor.--
                    ``(A) In general.--The term `inflation adjustment 
                factor' means, with respect to a calendar year, a 
                fraction the numerator of which is the GDP implicit 
                price deflator for the preceding calendar year and the 
                denominator of which is the GDP implicit price deflator 
                for the calendar year 2002.
                    ``(B) GDP implicit price deflator.--The term `GDP 
                implicit price deflator' means the most recent revision 
                of the implicit price deflator for the gross domestic 
                product as computed by the Department of Commerce 
                before March 15 of the calendar year.
            ``(8) Noncompliance with pollution laws.--For purposes of 
        this section, a unit which is not in compliance with the 
        applicable State and Federal pollution prevention, control, and 
        permit requirements for any period of time shall not be 
        considered to be a qualifying clean coal technology unit during 
        such period.
    ``(e) National Limitation on the Aggregate Capacity of Qualifying 
Clean Coal Technology Units.--
            ``(1) In general.--For purposes of subsection (d)(1)(E), 
        the national megawatt capacity limitation for qualifying clean 
        coal technology units is 4,000 megawatts.
            ``(2) Allocation of limitation.--The Secretary shall 
        allocate the national megawatt capacity limitation for 
        qualifying clean coal technology units in such manner as the 
        Secretary may prescribe under the regulations under paragraph 
        (3).
            ``(3) Regulations.--Not later than 6 months after the date 
        of the enactment of this section, the Secretary shall prescribe 
        such regulations as may be necessary or appropriate--
                    ``(A) to carry out the purposes of this subsection,
                    ``(B) to limit the capacity of any qualifying clean 
                coal technology unit to which this section applies so 
                that the combined megawatt capacity allocated to all 
                such units under this subsection when all such units 
                are placed in service during the 10-year period 
                described in subsection (d)(1)(C), does not exceed 
                4,000 megawatts,
                    ``(C) to provide a certification process under 
                which the Secretary, in consultation with the Secretary 
                of Energy, shall approve and allocate the national 
                megawatt capacity limitation--
                            ``(i) to encourage that units with the 
                        highest thermal efficiencies, when adjusted for 
                        the heat content of the design coal and site 
                        reference conditions described in subsection 
                        (d)(4)(C), and environmental performance be 
                        placed in service as soon as possible,
                            ``(ii) to allocate capacity to taxpayers 
                        that have a definite and credible plan for 
                        placing into commercial operation a qualifying 
                        clean coal technology unit, including--
                                    ``(I) a site,
                                    ``(II) contractual commitments for 
                                procurement and construction or, in the 
                                case of regulated utilities, the 
                                agreement of the State utility 
                                commission,
                                    ``(III) filings for all necessary 
                                preconstruction approvals,
                                    ``(IV) a demonstrated record of 
                                having successfully completed 
                                comparable projects on a timely basis, 
                                and
                                    ``(V) such other factors that the 
                                Secretary determines are appropriate,
                    ``(D) to allocate the national megawatt capacity 
                limitation to a portion of the capacity of a qualifying 
                clean coal technology unit if the Secretary determines 
                that such an allocation would maximize the amount of 
                efficient production encouraged with the available tax 
                credits,
                    ``(E) to set progress requirements and conditional 
                approvals so that capacity allocations for clean coal 
                technology units that become unlikely to meet the 
                necessary conditions for qualifying can be reallocated 
                by the Secretary to other clean coal technology units, 
                and
                    ``(F) to provide taxpayers with opportunities to 
                correct administrative errors and omissions with 
                respect to allocations and record keeping within a 
                reasonable period after discovery, taking into account 
                the availability of regulations and other 
                administrative guidance from the Secretary.''.
    (b) Credit Treated as Business Credit.--Section 38(b), as amended 
by this Act, is amended by striking ``plus'' at the end of paragraph 
(18), by striking the period at the end of paragraph (19) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(20) the qualifying clean coal technology production 
        credit determined under section 45I(a).''.
    (c) Transitional Rule.--Section 39(d) (relating to transitional 
rules), as amended by this Act, is amended by adding at the end the 
following new paragraph:
            ``(16) No carryback of section 45i credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the qualifying clean coal 
        technology production credit determined under section 45I may 
        be carried back to a taxable year ending on or before the date 
        of the enactment of section 45I.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

``Sec. 45I. Credit for production from a qualifying clean coal 
                            technology unit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act, in 
taxable years ending after such date.

 Subtitle B--Incentives for Early Commercial Applications of Advanced 
                        Clean Coal Technologies

SEC. 2211. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Allowance of Qualifying Advanced Clean Coal Technology Unit 
Credit.--Section 46 (relating to amount of credit) is amended by 
striking ``and'' at the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ``, and'', and by adding at the 
end the following new paragraph:
            ``(4) the qualifying advanced clean coal technology unit 
        credit.''.
    (b) Amount of Qualifying Advanced Clean Coal Technology Unit 
Credit.--Subpart E of part IV of subchapter A of chapter 1 (relating to 
rules for computing investment credit) is amended by inserting after 
section 48 the following new section:

``SEC. 48A. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY UNIT CREDIT.

    ``(a) In General.--For purposes of section 46, the qualifying 
advanced clean coal technology unit credit for any taxable year is an 
amount equal to 10 percent of the applicable percentage of the 
qualified investment in a qualifying advanced clean coal technology 
unit for such taxable year.
    ``(b) Qualifying Advanced Clean Coal Technology Unit.--
            ``(1) In general.--For purposes of subsection (a), the term 
        `qualifying advanced clean coal technology unit' means an 
        advanced clean coal technology unit of the taxpayer--
                    ``(A)(i)(I) in the case of a unit first placed in 
                service after the date of the enactment of this 
                section, the original use of which commences with the 
                taxpayer, or
                    ``(II) in the case of the retrofitting or 
                repowering of a unit first placed in service before 
                such date of enactment, the retrofitting or repowering 
                of which is completed by the taxpayer after such date, 
                or
                    ``(ii) which is acquired through purchase (as 
                defined by section 179(d)(2)),
                    ``(B) which is depreciable under section 167,
                    ``(C) which has a useful life of not less than 4 
                years,
                    ``(D) which is located in the United States,
                    ``(E) which is not receiving nor is scheduled to 
                receive funding under the Clean Coal Technology 
                Program, the Power Plant Improvement Initiative, or the 
                Clean Coal Power Initiative administered by the 
                Secretary of Energy,
                    ``(F) which is not a qualifying clean coal 
                technology unit, and
                    ``(G) which receives an allocation of a portion of 
                the national megawatt capacity limitation under 
                subsection (f).
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        subparagraph (A) of paragraph (1), in the case of a unit 
        which--
                    ``(A) is originally placed in service by a person, 
                and
                    ``(B) is sold and leased back by such person, or is 
                leased to such person, within 3 months after the date 
                such unit was originally placed in service, for a 
                period of not less than 12 years,
        such unit shall be treated as originally placed in service not 
        earlier than the date on which such unit is used under the 
        leaseback (or lease) referred to in subparagraph (B). The 
        preceding sentence shall not apply to any property if the 
        lessee and lessor of such property make an election under this 
        sentence. Such an election, once made, may be revoked only with 
        the consent of the Secretary.
            ``(3) Noncompliance with pollution laws.--For purposes of 
        this subsection, a unit which is not in compliance with the 
        applicable State and Federal pollution prevention, control, and 
        permit requirements for any period of time shall not be 
        considered to be a qualifying advanced clean coal technology 
        unit during such period.
    ``(c) Applicable Percentage.--For purposes of this section, with 
respect to any qualifying advanced clean coal technology unit, the 
applicable percentage is the percentage equal to the ratio which the 
portion of the national megawatt capacity limitation allocated to the 
taxpayer with respect to such unit under subsection (f) bears to the 
total megawatt capacity of such unit.
    ``(d) Advanced Clean Coal Technology Unit.--For purposes of this 
section--
            ``(1) In general.--The term `advanced clean coal technology 
        unit' means a new, retrofit, or repowering unit of the taxpayer 
        which--
                    ``(A) is--
                            ``(i) an eligible advanced pulverized coal 
                        or atmospheric fluidized bed combustion 
                        technology unit,
                            ``(ii) an eligible pressurized fluidized 
                        bed combustion technology unit,
                            ``(iii) an eligible integrated gasification 
                        combined cycle technology unit, or
                            ``(iv) an eligible other technology unit, 
                        and
                    ``(B) meets the carbon emission rate requirements 
                of paragraph (6).
            ``(2) Eligible advanced pulverized coal or atmospheric 
        fluidized bed combustion technology unit.--The term `eligible 
        advanced pulverized coal or atmospheric fluidized bed 
        combustion technology unit' means a clean coal technology unit 
        using advanced pulverized coal or atmospheric fluidized bed 
        combustion technology which--
                    ``(A) is placed in service after the date of the 
                enactment of this section and before January 1, 2013, 
                and
                    ``(B) has a design net heat rate of not more than 
                8,350 (8,750 in the case of units placed in service 
                before 2009).
            ``(3) Eligible pressurized fluidized bed combustion 
        technology unit.--The term `eligible pressurized fluidized bed 
        combustion technology unit' means a clean coal technology unit 
        using pressurized fluidized bed combustion technology which--
                    ``(A) is placed in service after the date of the 
                enactment of this section and before January 1, 2017, 
                and
                    ``(B) has a design net heat rate of not more than 
                7,720 (8,750 in the case of units placed in service 
                before 2009, and 8,350 in the case of units placed in 
                service after 2008 and before 2013).
            ``(4) Eligible integrated gasification combined cycle 
        technology unit.--The term `eligible integrated gasification 
        combined cycle technology unit' means a clean coal technology 
        unit using integrated gasification combined cycle technology, 
        with or without fuel or chemical co-production, which--
                    ``(A) is placed in service after the date of the 
                enactment of this section and before January 1, 2017,
                    ``(B) has a design net heat rate of not more than 
                7,720 (8,750 in the case of units placed in service 
                before 2009, and 8,350 in the case of units placed in 
                service after 2008 and before 2013), and
                    ``(C) has a net thermal efficiency (HHV) using coal 
                with fuel or chemical co-production of not less than 
                43.9 percent (39 percent in the case of units placed in 
                service before 2009, and 40.9 percent in the case of 
                units placed in service after 2008 and before 2013).
            ``(5) Eligible other technology unit.--The term `eligible 
        other technology unit' means a clean coal technology unit using 
        any other technology for the production of electricity which is 
        placed in service after the date of the enactment of this 
        section and before January 1, 2017.
            ``(6) Carbon emission rate requirements.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a unit meets the requirements of this 
                paragraph if--
                            ``(i) in the case of a unit using design 
                        coal with a heat content of not more than 9,000 
                        Btu per pound, the carbon emission rate is less 
                        than 0.60 pound of carbon per kilowatt hour, 
                        and
                            ``(ii) in the case of a unit using design 
                        coal with a heat content of more than 9,000 Btu 
                        per pound, the carbon emission rate is less 
                        than 0.54 pound of carbon per kilowatt hour.
                    ``(B) Eligible other technology unit.--In the case 
                of an eligible other technology unit, subparagraph (A) 
                shall be applied by substituting `0.51' and `0.459' for 
                `0.60' and `0.54', respectively.
    ``(e) General Definitions.--Any term used in this section which is 
also used in section 45I shall have the meaning given such term in 
section 45I.
    ``(f) National Limitation on the Aggregate Capacity of Advanced 
Clean Coal Technology Units.--
            ``(1) In general.--For purposes of subsection (b)(1)(G), 
        the national megawatt capacity limitation is--
                    ``(A) for qualifying advanced clean coal technology 
                units using advanced pulverized coal or atmospheric 
                fluidized bed combustion technology, not more than 
                1,000 megawatts (not more than 500 megawatts in the 
                case of units placed in service before 2009),
                    ``(B) for such units using pressurized fluidized 
                bed combustion technology, not more than 500 megawatts 
                (not more than 250 megawatts in the case of units 
                placed in service before 2009),
                    ``(C) for such units using integrated gasification 
                combined cycle technology, with or without fuel or 
                chemical co-production, not more than 2,000 megawatts 
                (not more than 1,000 megawatts in the case of units 
                placed in service before 2009 and not more than 1,500 
                megawatts in the case of units placed in service after 
                2008 and before 2013), and
                    ``(D) for such units using other technology for the 
                production of electricity, not more than 500 megawatts 
                (not more than 250 megawatts in the case of units 
                placed in service before 2009).
            ``(2) Allocation of limitation.--The Secretary shall 
        allocate the national megawatt capacity limitation for 
        qualifying advanced clean coal technology units in such manner 
        as the Secretary may prescribe under the regulations under 
        paragraph (3).
            ``(3) Regulations.--Not later than 6 months after the date 
        of the enactment of this section, the Secretary shall prescribe 
        such regulations as may be necessary or appropriate--
                    ``(A) to carry out the purposes of this subsection 
                and section 45J,
                    ``(B) to limit the capacity of any qualifying 
                advanced clean coal technology unit to which this 
                section applies so that the combined megawatt capacity 
                of all such units to which this section applies does 
                not exceed 4,000 megawatts,
                    ``(C) to provide a certification process described 
                in section 45I(e)(3)(C),
                    ``(D) to carry out the purposes described in 
                subparagraphs (D), (E), and (F) of section 45I(e)(3), 
                and
                    ``(E) to reallocate capacity which is not allocated 
                to any technology described in subparagraphs (A) 
                through (D) of paragraph (1) because an insufficient 
                number of qualifying units request an allocation for 
                such technology, to another technology described in 
                such subparagraphs in order to maximize the amount of 
                energy efficient production encouraged with the 
                available tax credits.
            ``(4) Selection criteria.--For purposes of paragraph 
        (3)(C), the selection criteria for allocating the national 
        megawatt capacity limitation to qualifying advanced clean coal 
        technology units--
                    ``(A) shall be established by the Secretary of 
                Energy as part of a competitive solicitation,
                    ``(B) shall include primary criteria of minimum 
                design net heat rate, maximum design thermal 
                efficiency, environmental performance, and lowest cost 
                to the Government, and
                    ``(C) shall include supplemental criteria as 
                determined appropriate by the Secretary of Energy.
    ``(g) Qualified Investment.--For purposes of subsection (a), the 
term `qualified investment' means, with respect to any taxable year, 
the basis of a qualifying advanced clean coal technology unit placed in 
service by the taxpayer during such taxable year (in the case of a unit 
described in subsection (b)(1)(A)(i)(II), only that portion of the 
basis of such unit which is properly attributable to the retrofitting 
or repowering of such unit).
    ``(h) Qualified Progress Expenditures.--
            ``(1) Increase in qualified investment.--In the case of a 
        taxpayer who has made an election under paragraph (5), the 
        amount of the qualified investment of such taxpayer for the 
        taxable year (determined under subsection (g) without regard to 
        this subsection) shall be increased by an amount equal to the 
        aggregate of each qualified progress expenditure for the 
        taxable year with respect to progress expenditure property.
            ``(2) Progress expenditure property defined.--For purposes 
        of this subsection, the term `progress expenditure property' 
        means any property being constructed by or for the taxpayer and 
        which it is reasonable to believe will qualify as a qualifying 
        advanced clean coal technology unit which is being constructed 
        by or for the taxpayer when it is placed in service.
            ``(3) Qualified progress expenditures defined.--For 
        purposes of this subsection--
                    ``(A) Self-constructed property.--In the case of 
                any self-constructed property, the term `qualified 
                progress expenditures' means the amount which, for 
                purposes of this subpart, is properly chargeable 
                (during such taxable year) to capital account with 
                respect to such property.
                    ``(B) Nonself-constructed property.--In the case of 
                nonself-constructed property, the term `qualified 
                progress expenditures' means the amount paid during the 
                taxable year to another person for the construction of 
                such property.
            ``(4) Other definitions.--For purposes of this subsection--
                    ``(A) Self-constructed property.--The term `self-
                constructed property' means property for which it is 
                reasonable to believe that more than half of the 
                construction expenditures will be made directly by the 
                taxpayer.
                    ``(B) Nonself-constructed property.--The term 
                `nonself-constructed property' means property which is 
                not self-constructed property.
                    ``(C) Construction, etc.--The term `construction' 
                includes reconstruction and erection, and the term 
                `constructed' includes reconstructed and erected.
                    ``(D) Only construction of qualifying advanced 
                clean coal technology unit to be taken into account.--
                Construction shall be taken into account only if, for 
                purposes of this subpart, expenditures therefor are 
                properly chargeable to capital account with respect to 
                the property.
            ``(5) Election.--An election under this subsection may be 
        made at such time and in such manner as the Secretary may by 
        regulations prescribe. Such an election shall apply to the 
        taxable year for which made and to all subsequent taxable 
        years. Such an election, once made, may not be revoked except 
        with the consent of the Secretary.
    ``(i) Coordination With Other Credits.--This section shall not 
apply to any property with respect to which the rehabilitation credit 
under section 47 or the energy credit under section 48 is allowed 
unless the taxpayer elects to waive the application of such credit to 
such property.''.
    (c) Recapture.--Section 50(a) (relating to other special rules) is 
amended by adding at the end the following new paragraph:
            ``(6) Special rules relating to qualifying advanced clean 
        coal technology unit.--For purposes of applying this subsection 
        in the case of any credit allowable by reason of section 48A, 
        the following shall apply:
                    ``(A) General rule.--In lieu of the amount of the 
                increase in tax under paragraph (1), the increase in 
                tax shall be an amount equal to the investment tax 
                credit allowed under section 38 for all prior taxable 
                years with respect to a qualifying advanced clean coal 
                technology unit (as defined by section 48A(b)(1)) 
                multiplied by a fraction whose numerator is the number 
                of years remaining to fully depreciate under this title 
                the qualifying advanced clean coal technology unit 
                disposed of, and whose denominator is the total number 
                of years over which such unit would otherwise have been 
                subject to depreciation. For purposes of the preceding 
                sentence, the year of disposition of the qualifying 
                advanced clean coal technology unit shall be treated as 
                a year of remaining depreciation.
                    ``(B) Property ceases to qualify for progress 
                expenditures.--Rules similar to the rules of paragraph 
                (2) shall apply in the case of qualified progress 
                expenditures for a qualifying advanced clean coal 
                technology unit under section 48A, except that the 
                amount of the increase in tax under subparagraph (A) of 
                this paragraph shall be substituted for the amount 
                described in such paragraph (2).
                    ``(C) Application of paragraph.--This paragraph 
                shall be applied separately with respect to the credit 
                allowed under section 38 regarding a qualifying 
                advanced clean coal technology unit.''.
    (d) Transitional Rule.--Section 39(d) (relating to transitional 
rules), as amended by this Act, is amended by adding at the end the 
following new paragraph:
            ``(17) No carryback of section 48a credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the qualifying advanced clean 
        coal technology unit credit determined under section 48A may be 
        carried back to a taxable year ending on or before the date of 
        the enactment of section 48A.''.
    (e) Technical Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
        the end of clause (ii), by striking the period at the end of 
        clause (iii) and inserting ``, and'', and by adding at the end 
        the following new clause:
                            ``(iv) the portion of the basis of any 
                        qualifying advanced clean coal technology unit 
                        attributable to any qualified investment (as 
                        defined by section 48A(g)).''.
            (2) Section 50(a)(4) is amended by striking ``and (2)'' and 
        inserting ``(2), and (6)''.
            (3) Section 50(c) is amended by adding at the end the 
        following new paragraph:
            ``(6) Nonapplication.--Paragraphs (1) and (2) shall not 
        apply to any qualifying advanced clean coal technology unit 
        credit under section 48A.''.
            (4) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 48 the following new item:

``Sec. 48A. Qualifying advanced clean coal technology unit credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act, under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).

SEC. 2212. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY UNIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45J. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY UNIT.

    ``(a) General Rule.--For purposes of section 38, the qualifying 
advanced clean coal technology production credit of any taxpayer for 
any taxable year is equal to--
            ``(1) the applicable amount of advanced clean coal 
        technology production credit, multiplied by
            ``(2) the applicable percentage (as determined under 
        section 48A(c)) of the sum of--
                    ``(A) the kilowatt hours of electricity, plus
                    ``(B) each 3,413 Btu of fuels or chemicals,
        produced by the taxpayer during such taxable year at a 
        qualifying advanced clean coal technology unit during the 10-
        year period beginning on the date the unit was originally 
        placed in service (or returned to service after becoming a 
        qualifying advanced clean coal technology unit).
    ``(b) Applicable Amount.--For purposes of this section, the 
applicable amount of advanced clean coal technology production credit 
with respect to production from a qualifying advanced clean coal 
technology unit shall be determined as follows:
            ``(1) Where the qualifying advanced clean coal technology 
        unit is producing electricity only:
                    ``(A) In the case of a unit originally placed in 
                service before 2009, if--
      

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0060                  $.0038
        More than 8,400            $.0025                  $.0010
         but not more
         than 8,550.
        More than 8,550            $.0010                 $.0010.
         but less than
         8,750.
------------------------------------------------------------------------

                    ``(B) In the case of a unit originally placed in 
                service after 2008 and before 2013, if--
      

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0105                  $.0090
        More than 7,770            $.0085                  $.0068
         but not more
         than 8,125.
        More than 8,125            $.0075                 $.0055.
         but less than
         8,350.
------------------------------------------------------------------------

                    ``(C) In the case of a unit originally placed in 
                service after 2012 and before 2017, if--
      

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0140                  $.0115
        More than 7,380            $.0120                 $.0090.
         but not more
         than 7,720.
------------------------------------------------------------------------

            ``(2) Where the qualifying advanced clean coal technology 
        unit is producing fuel or chemicals:
                    ``(A) In the case of a unit originally placed in 
                service before 2009, if--
      

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0060                  $.0038
        Less than 40.6             $.0025                  $.0010
         but not less
         than 40 percent.
        Less than 40 but           $.0010                 $.0010.
         not less than 39
         percent.
------------------------------------------------------------------------

                    ``(B) In the case of a unit originally placed in 
                service after 2008 and before 2013, if--
      

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0105                  $.0090
        Less than 43.6             $.0085                  $.0068
         but not less
         than 42 percent.
        Less than 42 but           $.0075                 $.0055.
         not less than
         40.9 percent.
------------------------------------------------------------------------

                    ``(C) In the case of a unit originally placed in 
                service after 2012 and before 2017, if--
      

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0140                  $.0115
        Less than 44.2             $.0120                 $.0090.
         but not less
         than 43.9
         percent.
------------------------------------------------------------------------

    ``(c) Inflation Adjustment.--For calendar years after 2003, each 
amount in paragraphs (1) and (2) of subsection (b) shall be adjusted by 
multiplying such amount by the inflation adjustment factor for the 
calendar year in which the amount is applied. If any amount as 
increased under the preceding sentence is not a multiple of 0.01 cent, 
such amount shall be rounded to the nearest multiple of 0.01 cent.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) In general.--Any term used in this section which is 
        also used in section 45I or 48A shall have the meaning given 
        such term in such section.
            ``(2) Applicable rules.--The rules of paragraphs (3), (4), 
        and (5) of section 45(d) shall apply.''.
    (b) Credit Treated as Business Credit.--Section 38(b), as amended 
by this Act, is amended by striking ``plus'' at the end of paragraph 
(19), by striking the period at the end of paragraph (20) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(21) the qualifying advanced clean coal technology 
        production credit determined under section 45J(a).''.
    (c) Transitional Rule.--Section 39(d) (relating to transitional 
rules), as amended by this Act, is amended by adding at the end the 
following new paragraph:
            ``(18) No carryback of section 45j credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the qualifying advanced clean 
        coal technology production credit determined under section 45J 
        may be carried back to a taxable year ending on or before the 
        date of the enactment of section 45J.''.
    (d) Denial of Double Benefit.--Section 29(d) (relating to other 
definitions and special rules) is amended by adding at the end the 
following new paragraph:
            ``(9) Denial of double benefit.--This section shall not 
        apply with respect to any qualified fuel the production of 
        which may be taken into account for purposes of determining the 
        credit under section 45J.''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

``Sec. 45J. Credit for production from a qualifying advanced clean coal 
                            technology unit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to production after the date of the enactment of this Act, in 
taxable years ending after such date.

     Subtitle C--Treatment of Persons Not Able To Use Entire Credit

SEC. 2221. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE CREDIT.

    (a) In General.--Section 45I, as added by this Act, is amended by 
adding at the end the following new subsection:
    ``(f) Treatment of Person Not Able To Use Entire Credit.--
            ``(1) Allowance of credits.--
                    ``(A) In general.--Any credit allowable under this 
                section, section 45J, or section 48A with respect to a 
                facility owned by a person described in subparagraph 
                (B) may be transferred or used as provided in this 
                subsection, and the determination as to whether the 
                credit is allowable shall be made without regard to the 
                tax-exempt status of the person.
                    ``(B) Persons described.--A person is described in 
                this subparagraph if the person is--
                            ``(i) an organization described in section 
                        501(c)(12)(C) and exempt from tax under section 
                        501(a),
                            ``(ii) an organization described in section 
                        1381(a)(2)(C),
                            ``(iii) a public utility (as defined in 
                        section 136(c)(2)(B)),
                            ``(iv) any State or political subdivision 
                        thereof, the District of Columbia, or any 
                        agency or instrumentality of any of the 
                        foregoing,
                            ``(v) any Indian tribal government (within 
                        the meaning of section 7871) or any agency or 
                        instrumentality thereof, or
                            ``(vi) the Tennessee Valley Authority.
            ``(2) Transfer of credit.--
                    ``(A) In general.--A person described in clause 
                (i), (ii), (iii), (iv), or (v) of paragraph (1)(B) may 
                transfer any credit to which paragraph (1)(A) applies 
                through an assignment to any other person not described 
                in paragraph (1)(B). Such transfer may be revoked only 
                with the consent of the Secretary.
                    ``(B) Regulations.--The Secretary shall prescribe 
                such regulations as necessary to insure that any credit 
                described in subparagraph (A) is claimed once and not 
                reassigned by such other person.
                    ``(C) Transfer proceeds treated as arising from 
                essential government function.--Any proceeds derived by 
                a person described in clause (iii), (iv), or (v) of 
                paragraph (1)(B) from the transfer of any credit under 
                subparagraph (A) shall be treated as arising from the 
                exercise of an essential government function.
            ``(3) Use of credit as an offset.--Notwithstanding any 
        other provision of law, in the case of a person described in 
        clause (i), (ii), or (v) of paragraph (1)(B), any credit to 
        which paragraph (1)(A) applies may be applied by such person, 
        to the extent provided by the Secretary of Agriculture, as a 
        prepayment of any loan, debt, or other obligation the entity 
        has incurred under subchapter I of chapter 31 of title 7 of the 
        Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), as in 
        effect on the date of the enactment of this section.
            ``(4) Use by tva.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, in the case of a person described in 
                paragraph (1)(B)(vi), any credit to which paragraph 
                (1)(A) applies may be applied as a credit against the 
                payments required to be made in any fiscal year under 
                section 15d(e) of the Tennessee Valley Authority Act of 
                1933 (16 U.S.C. 831n-4(e)) as an annual return on the 
                appropriations investment and an annual repayment sum.
                    ``(B) Treatment of credits.--The aggregate amount 
                of credits described in paragraph (1)(A) with respect 
                to such person shall be treated in the same manner and 
                to the same extent as if such credits were a payment in 
                cash and shall be applied first against the annual 
                return on the appropriations investment.
                    ``(C) Credit carryover.--With respect to any fiscal 
                year, if the aggregate amount of credits described 
                paragraph (1)(A) with respect to such person exceeds 
                the aggregate amount of payment obligations described 
                in subparagraph (A), the excess amount shall remain 
                available for application as credits against the 
                amounts of such payment obligations in succeeding 
                fiscal years in the same manner as described in this 
                paragraph.
            ``(5) Credit not income.--Any transfer under paragraph (2) 
        or use under paragraph (3) of any credit to which paragraph 
        (1)(A) applies shall not be treated as income for purposes of 
        section 501(c)(12).
            ``(6) Treatment of unrelated persons.--For purposes of this 
        subsection, sales among and between persons described in 
        clauses (i), (ii), (iii), (iv), and (v) of paragraph (1)(A) 
        shall be treated as sales between unrelated parties.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to production after the date of the enactment of this Act, in taxable 
years ending after such date.

                  TITLE XXIII--OIL AND GAS PROVISIONS

SEC. 2301. OIL AND GAS FROM MARGINAL WELLS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business credits), as amended by this Act, is amended by 
adding at the end the following new section:

``SEC. 45K. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL WELLS.

    ``(a) General Rule.--For purposes of section 38, the marginal well 
production credit for any taxable year is an amount equal to the 
product of--
            ``(1) the credit amount, and
            ``(2) the qualified credit oil production and the qualified 
        natural gas production which is attributable to the taxpayer.
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount is--
                    ``(A) $3 per barrel of qualified crude oil 
                production, and
                    ``(B) 50 cents per 1,000 cubic feet of qualified 
                natural gas production.
            ``(2) Reduction as oil and gas prices increase.--
                    ``(A) In general.--The $3 and 50 cents amounts 
                under paragraph (1) shall each be reduced (but not 
                below zero) by an amount which bears the same ratio to 
                such amount (determined without regard to this 
                paragraph) as--
                            ``(i) the excess (if any) of the applicable 
                        reference price over $15 ($1.67 for qualified 
                        natural gas production), bears to
                            ``(ii) $3 ($0.33 for qualified natural gas 
                        production).
                The applicable reference price for a taxable year is 
                the reference price of the calendar year preceding the 
                calendar year in which the taxable year begins.
                    ``(B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2002, 
                each of the dollar amounts contained in subparagraph 
                (A) shall be increased to an amount equal to such 
                dollar amount multiplied by the inflation adjustment 
                factor for such calendar year (determined under section 
                43(b)(3)(B) by substituting `2001' for `1990').
                    ``(C) Reference price.--For purposes of this 
                paragraph, the term `reference price' means, with 
                respect to any calendar year--
                            ``(i) in the case of qualified crude oil 
                        production, the reference price determined 
                        under section 29(d)(2)(C), and
                            ``(ii) in the case of qualified natural gas 
                        production, the Secretary's estimate of the 
                        annual average wellhead price per 1,000 cubic 
                        feet for all domestic natural gas.
    ``(c) Qualified Crude Oil and Natural Gas Production.--For purposes 
of this section--
            ``(1) In general.--The terms `qualified crude oil 
        production' and `qualified natural gas production' mean 
        domestic crude oil or natural gas which is produced from a 
        qualified marginal well.
            ``(2) Limitation on amount of production which may 
        qualify.--
                    ``(A) In general.--Crude oil or natural gas 
                produced during any taxable year from any well shall 
                not be treated as qualified crude oil production or 
                qualified natural gas production to the extent 
                production from the well during the taxable year 
                exceeds 1,095 barrels or barrel equivalents.
                    ``(B) Proportionate reductions.--
                            ``(i) Short taxable years.--In the case of 
                        a short taxable year, the limitations under 
                        this paragraph shall be proportionately reduced 
                        to reflect the ratio which the number of days 
                        in such taxable year bears to 365.
                            ``(ii) Wells not in production entire 
                        year.--In the case of a well which is not 
                        capable of production during each day of a 
                        taxable year, the limitations under this 
                        paragraph applicable to the well shall be 
                        proportionately reduced to reflect the ratio 
                        which the number of days of production bears to 
                        the total number of days in the taxable year.
            ``(3) Definitions.--
                    ``(A) Qualified marginal well.--The term `qualified 
                marginal well' means a domestic well--
                            ``(i) the production from which during the 
                        taxable year is treated as marginal production 
                        under section 613A(c)(6), or
                            ``(ii) which, during the taxable year--
                                    ``(I) has average daily production 
                                of not more than 25 barrel equivalents, 
                                and
                                    ``(II) produces water at a rate not 
                                less than 95 percent of total well 
                                effluent.
                    ``(B) Crude oil, etc.--The terms `crude oil', 
                `natural gas', `domestic', and `barrel' have the 
                meanings given such terms by section 613A(e).
                    ``(C) Barrel equivalent.--The term `barrel 
                equivalent' means, with respect to natural gas, a 
                conversation ratio of 6,000 cubic feet of natural gas 
                to 1 barrel of crude oil.
    ``(d) Other Rules.--
            ``(1) Production attributable to the taxpayer.--In the case 
        of a qualified marginal well in which there is more than one 
        owner of operating interests in the well and the crude oil or 
        natural gas production exceeds the limitation under subsection 
        (c)(2), qualifying crude oil production or qualifying natural 
        gas production attributable to the taxpayer shall be determined 
        on the basis of the ratio which taxpayer's revenue interest in 
        the production bears to the aggregate of the revenue interests 
        of all operating interest owners in the production.
            ``(2) Operating interest required.--Any credit under this 
        section may be claimed only on production which is attributable 
        to the holder of an operating interest.
            ``(3) Production from nonconventional sources excluded.--In 
        the case of production from a qualified marginal well which is 
        eligible for the credit allowed under section 29 for the 
        taxable year, no credit shall be allowable under this section 
        unless the taxpayer elects not to claim the credit under 
        section 29 with respect to the well.
            ``(4) Noncompliance with pollution laws.--For purposes of 
        subsection (c)(3)(A), a marginal well which is not in 
        compliance with the applicable State and Federal pollution 
        prevention, control, and permit requirements for any period of 
        time shall not be considered to be a qualified marginal well 
        during such period.''.
    (b) Credit Treated as Business Credit.--Section 38(b), as amended 
by this Act, is amended by striking ``plus'' at the end of paragraph 
(20), by striking the period at the end of paragraph (21) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(22) the marginal oil and gas well production credit 
        determined under section 45K(a).''.
    (c) No Carryback of Marginal Oil and Gas Well Production Credit 
Before Effective Date.--Subsection (d) of section 39, as amended by 
this Act, is amended by adding at the end the following new paragraph:
            ``(19) No carryback of marginal oil and gas well production 
        credit before effective date.--No portion of the unused 
        business credit for any taxable year which is attributable to 
        the marginal oil and gas well production credit determined 
        under section 45K may be carried back to a taxable year ending 
        on or before the date of the enactment of section 45K.''.
    (d) Coordination With Section 29.--Section 29(a) is amended by 
striking ``There'' and inserting ``At the election of the taxpayer, 
there''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

                              ``Sec. 45K. Credit for producing oil and 
                                        gas from marginal wells.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to production in taxable years beginning after the date of the 
enactment of this Act.

SEC. 2302. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR PROPERTY.

    (a) In General.--Subparagraph (C) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (i), by redesignating clause (ii) as clause (iii), 
and by inserting after clause (i) the following new clause:
                            ``(ii) any natural gas gathering line, 
                        and''.
    (b) Natural Gas Gathering Line.--Subsection (i) of section 168, as 
amended by this Act, is amended by adding at the end the following new 
paragraph:
            ``(16) Natural gas gathering line.--The term `natural gas 
        gathering line' means--
                    ``(A) the pipe, equipment, and appurtenances 
                determined to be a gathering line by the Federal Energy 
                Regulatory Commission, or
                    ``(B) the pipe, equipment, and appurtenances used 
                to deliver natural gas from the wellhead or a 
                commonpoint to the point at which such gas first 
                reaches--
                            ``(i) a gas processing plant,
                            ``(ii) an interconnection with a 
                        transmission pipeline certificated by the 
                        Federal Energy Regulatory Commission as an 
                        interstate transmission pipeline,
                            ``(iii) an interconnection with an 
                        intrastate transmission pipeline, or
                            ``(iv) a direct interconnection with a 
                        local distribution company, a gas storage 
                        facility, or an industrial consumer.''.
    (c) Alternative System.--The table contained in section 
168(g)(3)(B) is amended by inserting after the item relating to 
subparagraph (C)(i) the following new item:

``(C)(ii)......................................................   10''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 2303. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING WITH 
              ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    (a) In General.--Part VI of subchapter B of chapter 1 (relating to 
itemized deductions for individuals and corporations), as amended by 
this Act, is amended by inserting after section 179C the following new 
section:

``SEC. 179D. DEDUCTION FOR CAPITAL COSTS INCURRED IN COMPLYING WITH 
              ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    ``(a) Treatment as Expense.--
            ``(1) In general.--A small business refiner may elect to 
        treat any qualified capital costs as an expense which is not 
        chargeable to capital account. Any qualified cost which is so 
        treated shall be allowed as a deduction for the taxable year in 
        which the cost is paid or incurred.
            ``(2) Limitation.--
                    ``(A) In general.--The aggregate costs which may be 
                taken into account under this subsection for any 
                taxable year may not exceed the applicable percentage 
                of the qualified capital costs paid or incurred for the 
                taxable year.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A)--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the applicable percentage is 75 
                        percent.
                            ``(ii) Reduced percentage.--In the case of 
                        a small business refiner with average daily 
                        refinery runs for the period described in 
                        subsection (b)(2) in excess of 155,000 barrels, 
                        the percentage described in clause (i) shall be 
                        reduced (not below zero) by the product of such 
                        percentage (before the application of this 
                        clause) and the ratio of such excess to 50,000 
                        barrels.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified capital costs.--The term `qualified capital 
        costs' means any costs which--
                    ``(A) are otherwise chargeable to capital account, 
                and
                    ``(B) are paid or incurred for the purpose of 
                complying with the Highway Diesel Fuel Sulfur Control 
                Requirement of the Environmental Protection Agency, as 
                in effect on the date of the enactment of this section, 
                with respect to a facility placed in service by the 
                taxpayer before such date.
            ``(2) Small business refiner.--The term `small business 
        refiner' means, with respect to any taxable year, a refiner of 
        crude oil, which, within the refinery operations of the 
        business, employs not more than 1,500 employees on any day 
        during such taxable year and whose average daily refinery run 
        for the 1-year period ending on the date of the enactment of 
        this section did not exceed 205,000 barrels.
    ``(c) Coordination With Other Provisions.--Section 280B shall not 
apply to amounts which are treated as expenses under this section.
    ``(d) Basis Reduction.--For purposes of this title, the basis of 
any property shall be reduced by the portion of the cost of such 
property taken into account under subsection (a).
    ``(e) Controlled Groups.--For purposes of this section, all persons 
treated as a single employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as a single employer.''.
    (b) Conforming Amendments.--
            (1) Section 263(a)(1), as amended by this Act, is amended 
        by striking ``or'' at the end of subparagraph (I), by striking 
        the period at the end of subparagraph (J) and inserting ``, 
        or'', and by inserting after subparagraph (J) the following new 
        subparagraph:
                    ``(K) expenditures for which a deduction is allowed 
                under section 179D.''.
            (2) Section 263A(c)(3) is amended by inserting ``179C,'' 
        after ``section''.
            (3) Section 312(k)(3)(B), as amended by this Act, is 
        amended by striking ``or 179C'' each place it appears in the 
        heading and text and inserting ``, 179C, or 179D''.
            (4) Section 1016(a), as amended by this Act, is amended by 
        striking ``and'' at the end of paragraph (33), by striking the 
        period at the end of paragraph (34) and inserting ``, and'', 
        and by adding at the end the following new paragraph:
            ``(35) to the extent provided in section 179D(d).''.
            (5) Section 1245(a), as amended by this Act, is amended by 
        inserting ``179D,'' after ``179C,'' both places it appears in 
        paragraphs (2)(C) and (3)(C).
            (6) The table of sections for part VI of subchapter B of 
        chapter 1, as amended by this Act, is amended by inserting 
        after section 179C the following new item:

``Sec. 179D. Deduction for capital costs incurred in complying with 
                            Environmental Protection Agency sulfur 
                            regulations.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to expenses paid or incurred after the date of the enactment of this 
Act, in taxable years ending after such date.

SEC. 2304. ENVIRONMENTAL TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45L. ENVIRONMENTAL TAX CREDIT.

    ``(a) In General.--For purposes of section 38, the amount of the 
environmental tax credit determined under this section with respect to 
any small business refiner for any taxable year is an amount equal to 5 
cents for every gallon of 15 parts per million or less sulfur diesel 
produced at a facility by such small business refiner during such 
taxable year.
    ``(b) Maximum Credit.--
            ``(1) In general.--For any small business refiner, the 
        aggregate amount determined under subsection (a) for any 
        taxable year with respect to any facility shall not exceed the 
        applicable percentage of the qualified capital costs paid or 
        incurred by such small business refiner with respect to such 
        facility during the applicable period, reduced by the credit 
        allowed under subsection (a) for any preceding year.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the applicable percentage is 25 
                percent.
                    ``(B) Reduced percentage.--The percentage described 
                in subparagraph (A) shall be reduced in the same manner 
                as under section 179D(a)(2)(B)(ii).
    ``(c) Definitions.--For purposes of this section--
            ``(1) In general.--The terms `small business refiner' and 
        `qualified capital costs' have the same meaning as given in 
        section 179D.
            ``(2) Applicable period.--The term `applicable period' 
        means, with respect to any facility, the period beginning on 
        the day after the date which is 1 year after the date of the 
        enactment of this section and ending with the date which is 1 
        year after the date on which the taxpayer must comply with the 
        applicable EPA regulations with respect to such facility.
            ``(3) Applicable epa regulations.--The term `applicable EPA 
        regulations' means the Highway Diesel Fuel Sulfur Control 
        Requirements of the Environmental Protection Agency, as in 
        effect on the date of the enactment of this section.
    ``(d) Certification.--
            ``(1) Required.--Not later than the date which is 30 months 
        after the first day of the first taxable year in which the 
        environmental tax credit is allowed with respect to qualified 
        capital costs paid or incurred with respect to a facility, the 
        small business refiner shall obtain a certification from the 
        Secretary, in consultation with the Administrator of the 
        Environmental Protection Agency, that the taxpayer's qualified 
        capital costs with respect to such facility will result in 
        compliance with the applicable EPA regulations.
            ``(2) Contents of application.--An application for 
        certification shall include relevant information regarding unit 
        capacities and operating characteristics sufficient for the 
        Secretary, in consultation with the Administrator of the 
        Environmental Protection Agency, to determine that such 
        qualified capital costs are necessary for compliance with the 
        applicable EPA regulations.
            ``(3) Review period.--Any application shall be reviewed and 
        notice of certification, if applicable, shall be made within 60 
        days of receipt of such application. In the event the Secretary 
        does not notify the taxpayer of the results of such 
        certification within such period, the taxpayer may presume the 
        certification to be issued until so notified.
            ``(4) Statute of limitations.--With respect to the credit 
        allowed under this section--
                    ``(A) the statutory period for the assessment of 
                any deficiency attributable to such credit shall not 
                expire before the end of the 3-year period ending on 
                the date that the review period described in paragraph 
                (3) ends, and
                    ``(B) such deficiency may be assessed before the 
                expiration of such 3-year period notwithstanding the 
                provisions of any other law or rule of law which would 
                otherwise prevent such assessment.
    ``(e) Controlled Groups.--For purposes of this section, all persons 
treated as a single employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as a single employer.
    ``(f) Cooperative Organizations.--
            ``(1) Apportionment of credit.--In the case of a 
        cooperative organization described in section 1381(a), any 
        portion of the credit determined under subsection (a) of this 
        section, for the taxable year may, at the election of the 
        organization, be apportioned among patrons eligible to share in 
        patronage dividends on the basis of the quantity or value of 
        business done with or for such patrons for the taxable year. 
        Such an election shall be irrevocable for such taxable year.
            ``(2) Treatment of organizations and patrons.--
                    ``(A) Organizations.--The amount of the credit not 
                apportioned to patrons pursuant to paragraph (1) shall 
                be included in the amount determined under subsection 
                (a) for the taxable year of the organization.
                    ``(B) Patrons.--The amount of the credit 
                apportioned to patrons pursuant to paragraph (1) shall 
                be included in the amount determined under subsection 
                (a) for the first taxable year of each patron ending on 
                or after the last day of the payment period (as defined 
                in section 1382(d)) for the taxable year of the 
                organization or, if earlier, for the taxable year of 
                each patron ending on or after the date on which the 
                patron receives notice from the cooperative of the 
                apportionment.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to general business credit), as amended by this 
Act, is amended by striking ``plus'' at the end of paragraph (21), by 
striking the period at the end of paragraph (22) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(23) in the case of a small business refiner, the 
        environmental tax credit determined under section 45L(a).''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable), as amended by this Act, is 
amended by adding after subsection (d) the following new subsection:
    ``(e) Environmental Tax Credit.--No deduction shall be allowed for 
that portion of the expenses otherwise allowable as a deduction for the 
taxable year which is equal to the amount of the credit determined for 
the taxable year under section 45L(a).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

                              ``Sec. 45L. Environmental tax credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 2305. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL DEPLETION 
              DEDUCTION.

    (a) In General.--Paragraph (4) of section 613A(d) (relating to 
certain refiners excluded) is amended to read as follows:
            ``(4) Certain refiners excluded.--If the taxpayer or 1 or 
        more related persons engages in the refining of crude oil, 
        subsection (c) shall not apply to the taxpayer for a taxable 
        year if the average daily refinery runs of the taxpayer and 
        such persons for the taxable year exceed 60,000 barrels. For 
        purposes of this paragraph, the average daily refinery runs for 
        any taxable year shall be determined by dividing the aggregate 
        refinery runs for the taxable year by the number of days in the 
        taxable year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2002.

SEC. 2306. MARGINAL PRODUCTION INCOME LIMIT EXTENSION.

    Section 613A(c)(6)(H) (relating to temporary suspension of taxable 
income limit with respect to marginal production), as amended by 
section 607(a) of the Job Creation and Worker Assistance Act of 2002, 
is amended by striking ``2004'' and inserting ``2007''.

SEC. 2307. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Part VI of subchapter B of chapter 1, as amended 
by this Act, is amended by adding at the end the following new section:

``SEC. 199. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES FOR 
              DOMESTIC OIL AND GAS WELLS.

    ``A taxpayer shall be entitled to an amortization deduction with 
respect to any geological and geophysical expenses incurred in 
connection with the exploration for, or development of, oil or gas 
within the United States (as defined in section 638) based on a period 
of 24 months beginning with the month in which such expenses were 
incurred.''.
    (b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1, as amended by this Act, is amended by adding 
at the end the following new item:

``Sec. 199. Amortization of geological and geophysical expenditures for 
                            domestic oil and gas wells.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred in taxable years beginning after 
December 31, 2002.

SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.

    (a) In General.--Part VI of subchapter B of chapter 1, as amended 
by this Act, is amended by adding at the end the following new section:

``SEC. 199A. AMORTIZATION OF DELAY RENTAL PAYMENTS FOR DOMESTIC OIL AND 
              GAS WELLS.

    ``(a) In General.--A taxpayer shall be entitled to an amortization 
deduction with respect to any delay rental payments incurred in 
connection with the development of oil or gas within the United States 
(as defined in section 638) based on a period of 24 months beginning 
with the month in which such payments were incurred.''.
    ``(b) Delay rental payments.--For purposes of this section, the 
term `delay rental payment' means an amount paid for the privilege of 
deferring development of an oil or gas well under an oil or gas 
lease.''.
    (b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1, as amended by this Act, is amended by adding 
at the end the following new item:

``Sec. 199A. Amortization of delay rental payments for domestic oil and 
                            gas wells.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2002.

SEC. 2309. STUDY OF COAL BED METHANE.

    (a) In General.--The Secretary of the Treasury shall study the 
effect of section 29 of the Internal Revenue Code of 1986 on the 
production of coal bed methane. Such study shall be made in conjunction 
with the study to be undertaken by the Secretary of the Interior on the 
effects of coal bed methane production on surface and water resources, 
as provided in section 607 of the Energy Policy Act of 2002.
    (b) Contents of Study.--The study under subsection (a) shall 
estimate the total amount of credits under section 29 of the Internal 
Revenue Code of 1986 claimed annually and in the aggregate which are 
related to the production of coal bed methane since the date of the 
enactment of such section 29. Such study shall report the annual value 
of such credits allowable for coal bed methane compared to the average 
annual wellhead price of natural gas (per thousand cubic feet of 
natural gas). Such study shall also estimate the incremental increase 
in production of coal bed methane that has resulted from the enactment 
of such section 29, and the cost to the Federal Government, in terms of 
the net tax benefits claimed, per thousand cubic feet of incremental 
coal bed methane produced annually and in the aggregate since such 
enactment.

SEC. 2310. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING FUEL FROM 
              A NONCONVENTIONAL SOURCE.

    (a) In General.--Section 29 is amended by adding at the end the 
following new subsection:
    ``(h) Extension for Other Facilities.--
            ``(1) Oil and gas.--In the case of a well or facility for 
        producing qualified fuels described in subparagraph (A) or (B) 
        of subsection (c)(1) which was drilled or placed in service 
        after the date of the enactment of this subsection and before 
        January 1, 2005, notwithstanding subsection (f), this section 
        shall apply with respect to such fuels produced at such well or 
        facility not later than the close of the 3-year period 
        beginning on the date that such well is drilled or such 
        facility is placed in service.
            ``(2) Facilities producing refined coal.--
                    ``(A) In general.--In the case of a facility 
                described in subparagraph (C) for producing refined 
                coal which was placed in service after the date of the 
                enactment of this subsection and before January 1, 
                2007, this section shall apply with respect to fuel 
                produced at such facility not later than the close of 
                the 5-year period beginning on the date such facility 
                is placed in service.
                    ``(B) Refined coal.--For purposes of this 
                paragraph, the term `refined coal' means a fuel which 
                is a liquid, gaseous, or solid synthetic fuel produced 
                from coal (including lignite) or high carbon fly ash, 
                including such fuel used as a feedstock.
                    ``(C) Covered facilities.--
                            ``(i) In general.--A facility is described 
                        in this subparagraph if such facility produces 
                        refined coal using a technology that results 
                        in--
                                    ``(I) a qualified emission 
                                reduction, and
                                    ``(II) a qualified enhanced value.
                            ``(ii) Qualified emission reduction.--For 
                        purposes of this subparagraph, the term 
                        `qualified emission reduction' means a 
                        reduction of at least 20 percent of the 
                        emissions of nitrogen oxide and either sulfur 
                        dioxide or mercury released when burning the 
                        refined coal (excluding any dilution caused by 
                        materials combined or added during the 
                        production process), as compared to the 
                        emissions released when burning the feedstock 
                        coal or comparable coal predominantly available 
                        in the marketplace as of January 1, 2002.
                            ``(iii) Qualified enhanced value.--For 
                        purposes of this subparagraph, the term 
                        `qualified enhanced value' means an increase of 
                        at least 50 percent in the market value of the 
                        refined coal (excluding any increase caused by 
                        materials combined or added during the 
                        production process), as compared to the value 
                        of the feedstock coal.
                            ``(iii) Qualifying advanced clean coal 
                        technology facilities excluded.--A facility 
                        described in this subparagraph shall not 
                        include a qualifying advanced clean coal 
                        technology facility (as defined in section 
                        48A(b)).
            ``(3) Wells producing viscous oil.--
                    ``(A) In general.--In the case of a well for 
                producing viscous oil which was placed in service after 
                the date of the enactment of this subsection and before 
                January 1, 2005, this section shall apply with respect 
                to fuel produced at such well not later than the close 
                of the 3-year period beginning on the date such well is 
                placed in service.
                    ``(B) Viscous oil.--The term ``viscous oil' means 
                heavy oil, as defined in section 613A(c)(6), except 
                that--
                            ``(i) `22 degrees' shall be substituted for 
                        `20 degrees' in applying subparagraph (F) 
                        thereof, and
                            ``(ii) in all cases, the oil gravity shall 
                        be measured from the initial well-head samples, 
                        drill cuttings, or down hole samples.
                    ``(C) Waiver of unrelated person requirement.--In 
                the case of viscous oil, the requirement under 
                subsection (a)(1)(B)(i) of a sale to an unrelated 
                person shall not apply to any sale to the extent that 
                the viscous oil is not consumed in the immediate 
                vicinity of the wellhead.
            ``(4) Coalmine methane gas.--
                    ``(A) In general.--This section shall apply to 
                coalmine methane gas--
                            ``(i) captured or extracted by the taxpayer 
                        after the date of the enactment of this 
                        subsection and before January 1, 2005, and
                            ``(ii) utilized as a fuel source or sold by 
                        or on behalf of the taxpayer to an unrelated 
                        person after the date of the enactment of this 
                        subsection and before January 1, 2005.
                    ``(B) Coalmine methane gas.--For purposes of this 
                paragraph, the term `coalmine methane gas' means any 
                methane gas which is--
                            ``(i) liberated during qualified coal 
                        mining operations, or
                            ``(ii) extracted up to 5 years in advance 
                        of qualified coal mining operations as part of 
                        a specific plan to mine a coal deposit.
                    ``(C) Special rule for advanced extraction.--In the 
                case of coalmine methane gas which is captured in 
                advance of qualified coal mining operations, the credit 
                under subsection (a) shall be allowed only after the 
                date the coal extraction occurs in the immediate area 
                where the coalmine methane gas was removed.
                    ``(D) Noncompliance with pollution laws.--For 
                purposes of subparagraphs (B) and (C), coal mining 
                operations which are not in compliance with the 
                applicable State and Federal pollution prevention, 
                control, and permit requirements for any period of time 
                shall not be considered to be qualified coal mining 
                operations during such period.
            ``(5) Facilities producing fuels from agricultural and 
        animal waste.--
                    ``(A) In general.--In the case of facility for 
                producing liquid, gaseous, or solid fuels from 
                qualified agricultural and animal wastes, including 
                such fuels when used as feedstocks, which was placed in 
                service after the date of the enactment of this 
                subsection and before January 1, 2005, this section 
                shall apply with respect to fuel produced at such 
                facility not later than the close of the 3-year period 
                beginning on the date such facility is placed in 
                service.
                    ``(B) Qualified agricultural and animal waste.--For 
                purposes of this paragraph, the term `qualified 
                agricultural and animal waste' means agriculture and 
                animal waste, including by-products, packaging, and any 
                materials associated with the processing, feeding, 
                selling, transporting, or disposal of agricultural or 
                animal products or wastes, including wood shavings, 
                straw, rice hulls, and other bedding for the 
                disposition of manure.
            ``(6) Credit amount.--In determining the amount of credit 
        allowable under this section solely by reason of this 
        subsection, the dollar amount applicable under subsection 
        (a)(1) shall be $3 (without regard to subsection (b)(2)).''.
            (b) Extension for certain fuel produced at existing 
        facilities.--Paragraph (2) of section 29(f) (relating to 
        application of section) is amended by inserting ``(January 1, 
        2005, in the case of any coke, coke gas, or natural gas and 
        byproducts produced by coal gasification from lignite in a 
        facility described in paragraph (1)(B))'' after ``January 1, 
        2003''.
    (c) Effective Date.--The amendment made by this section shall apply 
to fuel sold after the date of the enactment of this Act.

SEC. 2311. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.

    (a) In General.--Subparagraph (E) of section 168(e)(3) (relating to 
classification of certain property) is amended by striking ``and'' at 
the end of clause (ii), by striking the period at the end of clause 
(iii) and by inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(iv) any natural gas distribution 
                        line.''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B), as amended by this Act, is amended by adding after the 
item relating to subparagraph (E)(iii) the following new item:

``(E)(iv)......................................................   20''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act, in taxable years ending after such date.

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

SEC. 2401. ONGOING STUDY AND REPORTS REGARDING TAX ISSUES RESULTING 
              FROM FUTURE RESTRUCTURING DECISIONS.

    (a) Ongoing Study.--The Secretary of the Treasury, after 
consultation with the Federal Energy Regulatory Commission, shall 
undertake an ongoing study of Federal tax issues resulting from nontax 
decisions on the restructuring of the electric industry. In particular, 
the study shall focus on the effect on tax-exempt bonding authority of 
public power entities and on corporate restructuring which results from 
the restructuring of the electric industry.
    (b) Regulatory Relief.--In connection with the study described in 
subsection (a), the Secretary of the Treasury should exercise the 
Secretary's authority, as appropriate, to modify or suspend regulations 
that may impede an electric utility company's ability to reorganize its 
capital stock structure to respond to a competitive marketplace.
    (c) Reports.--The Secretary of the Treasury shall report to the 
Committee on Finance of the Senate and the Committee on Ways and Means 
of the House of Representatives not later than December 31, 2002, 
regarding Federal tax issues identified under the study described in 
subsection (a), and at least annually thereafter, regarding such issues 
identified since the preceding report. Such reports shall also include 
such legislative recommendations regarding changes to the private 
business use rules under subpart A of part IV of subchapter B of 
chapter 1 of the Internal Revenue Code of 1986 as the Secretary of the 
Treasury deems necessary. The reports shall continue until such time as 
the Federal Energy Regulatory Commission has completed the 
restructuring of the electric industry.

SEC. 2402. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING 
              COSTS.

    (a) Repeal of Limitation on Deposits Into Fund Based on Cost of 
Service; Contributions After Funding Period.--Subsection (b) of section 
468A is amended to read as follows:
    ``(b) Limitation on Amounts Paid Into Fund.--The amount which a 
taxpayer may pay into the Fund for any taxable year shall not exceed 
the ruling amount applicable to such taxable year.''.
    (b) Clarification of Treatment of Fund Transfers.--Subsection (e) 
of section 468A is amended by adding at the end the following new 
paragraph:
            ``(8) Treatment of fund transfers.--If, in connection with 
        the transfer of the taxpayer's interest in a nuclear power 
        plant, the taxpayer transfers the Fund with respect to such 
        power plant to the transferee of such interest and the 
        transferee elects to continue the application of this section 
        to such Fund--
                    ``(A) the transfer of such Fund shall not cause 
                such Fund to be disqualified from the application of 
                this section, and
                    ``(B) no amount shall be treated as distributed 
                from such Fund, or be includible in gross income, by 
                reason of such transfer.''.
    (c) Deduction for Nuclear Decommissioning Costs When Paid.--
Paragraph (2) of section 468A(c) is amended to read as follows:
            ``(2) Deduction of nuclear decommissioning costs.--In 
        addition to any deduction under subsection (a), nuclear 
        decommissioning costs paid or incurred by the taxpayer during 
        any taxable year shall constitute ordinary and necessary 
        expenses in carrying on a trade or business under section 
        162.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2002.

SEC. 2403. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

    (a) Income From Open Access and Nuclear Decommissioning 
Transactions.--
            (1) In general.--Subparagraph (C) of section 501(c)(12) is 
        amended by striking ``or'' at the end of clause (i), by 
        striking clause (ii), and by adding at the end the following 
        new clauses:
                            ``(ii) from any open access transaction 
                        (other than income received or accrued directly 
                        or indirectly from a member),
                            ``(iii) from any nuclear decommissioning 
                        transaction,
                            ``(iv) from any asset exchange or 
                        conversion transaction, or
                            ``(v) from the prepayment of any loan, 
                        debt, or obligation made, insured, or 
                        guaranteed under the Rural Electrification Act 
                        of 1936.''.
            (2) Definitions and special rules.--Paragraph (12) of 
        section 501(c) is amended by adding at the end the following 
        new subparagraphs:
                    ``(E) For purposes of subparagraph (C)(ii)--
                            ``(i) The term `open access transaction' 
                        means any transaction meeting the open access 
                        requirements of any of the following subclauses 
                        with respect to a mutual or cooperative 
                        electric company:
                                    ``(I) The provision or sale of 
                                transmission service or ancillary 
                                services meets the open access 
                                requirements of this subclause only if 
                                such services are provided on a 
                                nondiscriminatory open access basis 
                                pursuant to an open access transmission 
                                tariff filed with and approved by FERC, 
                                including an acceptable reciprocity 
                                tariff, or under a regional 
                                transmission organization agreement 
                                approved by FERC.
                                    ``(II) The provision or sale of 
                                electric energy distribution services 
                                or ancillary services meets the open 
                                access requirements of this subclause 
                                only if such services are provided on a 
                                nondiscriminatory open access basis to 
                                end-users served by distribution 
                                facilities owned by the mutual or 
                                cooperative electric company (or its 
                                members).
                                    ``(III) The delivery or sale of 
                                electric energy generated by a 
                                generation facility meets the open 
                                access requirements of this subclause 
                                only if such facility is directly 
                                connected to distribution facilities 
                                owned by the mutual or cooperative 
                                electric company (or its members) which 
                                owns the generation facility, and such 
                                distribution facilities meet the open 
                                access requirements of subclause (II).
                            ``(ii) Clause (i)(I) shall apply in the 
                        case of a voluntarily filed tariff only if the 
                        mutual or cooperative electric company files a 
                        report with FERC within 90 days after the date 
                        of the enactment of this subparagraph relating 
                        to whether or not such company will join a 
                        regional transmission organization.
                            ``(iii) A mutual or cooperative electric 
                        company shall be treated as meeting the open 
                        access requirements of clause (i)(I) if a 
                        regional transmission organization controls the 
                        transmission facilities.
                            ``(iv) References to FERC in this 
                        subparagraph shall be treated as including 
                        references to the Public Utility Commission of 
                        Texas with respect to any ERCOT utility (as 
                        defined in section 212(k)(2)(B) of the Federal 
                        Power Act (16 U.S.C. 824k(k)(2)(B))) or 
                        references to the Rural Utilities Service with 
                        respect to any other facility not subject to 
                        FERC jurisdiction.
                            ``(v) For purposes of this subparagraph--
                                    ``(I) The term `transmission 
                                facility' means an electric output 
                                facility (other than a generation 
                                facility) that operates at an electric 
                                voltage of 69 kV or greater. To the 
                                extent provided in regulations, such 
                                term includes any output facility that 
                                FERC determines is a transmission 
                                facility under standards applied by 
                                FERC under the Federal Power Act (as in 
                                effect on the date of the enactment of 
                                the Energy Tax Incentives Act of 2002).
                                    ``(II) The term `regional 
                                transmission organization' includes an 
                                independent system operator.
                                    ``(III) The term `FERC' means the 
                                Federal Energy Regulatory Commission.
                    ``(F) The term `nuclear decommissioning 
                transaction' means--
                            ``(i) any transfer into a trust, fund, or 
                        instrument established to pay any nuclear 
                        decommissioning costs if the transfer is in 
                        connection with the transfer of the mutual or 
                        cooperative electric company's interest in a 
                        nuclear power plant or nuclear power plant 
                        unit,
                            ``(ii) any distribution from any trust, 
                        fund, or instrument established to pay any 
                        nuclear decommissioning costs, or
                            ``(iii) any earnings from any trust, fund, 
                        or instrument established to pay any nuclear 
                        decommissioning costs.
                    ``(G) The term `asset exchange or conversion 
                transaction' means any voluntary exchange or 
                involuntary conversion of any property related to 
                generating, transmitting, distributing, or selling 
                electric energy by a mutual or cooperative electric 
                company, the gain from which qualifies for deferred 
                recognition under section 1031 or 1033, but only if the 
                replacement property acquired by such company pursuant 
                to such section constitutes property which is used, or 
                to be used, for--
                            ``(i) generating, transmitting, 
                        distributing, or selling electric energy, or
                            ``(ii) producing, transmitting, 
                        distributing, or selling natural gas.''.
    (b) Treatment of Income From Load Loss Transactions.--Paragraph 
(12) of section 501(c), as amended by subsection (a)(2), is amended by 
adding after subparagraph (G) the following new subparagraph:
                    ``(H)(i) In the case of a mutual or cooperative 
                electric company described in this paragraph or an 
                organization described in section 1381(a)(2)(C), income 
                received or accrued from a load loss transaction shall 
                be treated as an amount collected from members for the 
                sole purpose of meeting losses and expenses.
                    ``(ii) For purposes of clause (i), the term `load 
                loss transaction' means any wholesale or retail sale of 
                electric energy (other than to members) to the extent 
                that the aggregate sales during the recovery period 
                does not exceed the load loss mitigation sales limit 
                for such period.
                    ``(iii) For purposes of clause (ii), the load loss 
                mitigation sales limit for the recovery period is the 
                sum of the annual load losses for each year of such 
                period.
                    ``(iv) For purposes of clause (iii), a mutual or 
                cooperative electric company's annual load loss for 
                each year of the recovery period is the amount (if any) 
                by which--
                            ``(I) the megawatt hours of electric energy 
                        sold during such year to members of such 
                        electric company are less than
                            ``(II) the megawatt hours of electric 
                        energy sold during the base year to such 
                        members.
                    ``(v) For purposes of clause (iv)(II), the term 
                `base year' means--
                            ``(I) the calendar year preceding the 
                        start-up year, or
                            ``(II) at the election of the electric 
                        company, the second or third calendar years 
                        preceding the start-up year.
                    ``(vi) For purposes of this subparagraph, the 
                recovery period is the 7-year period beginning with the 
                start-up year.
                    ``(vii) For purposes of this subparagraph, the 
                start-up year is the calendar year which includes the 
                date of the enactment of this subparagraph or, if 
                later, at the election of the mutual or cooperative 
                electric company--
                            ``(I) the first year that such electric 
                        company offers nondiscriminatory open access, 
                        or
                            ``(II) the first year in which at least 10 
                        percent of such electric company's sales are 
                        not to members of such electric company.
                    ``(viii) A company shall not fail to be treated as 
                a mutual or cooperative company for purposes of this 
                paragraph or as a corporation operating on a 
                cooperative basis for purposes of section 1381(a)(2)(C) 
                by reason of the treatment under clause (i).
                    ``(ix) In the case of a mutual or cooperative 
                electric company, income from any open access 
                transaction received, or accrued, indirectly from a 
                member shall be treated as an amount collected from 
                members for the sole purpose of meeting losses and 
                expenses.''.
    (c) Exception From Unrelated Business Taxable Income.--Subsection 
(b) of section 512 (relating to modifications) is amended by adding at 
the end the following new paragraph:
            ``(18) Treatment of mutual or cooperative electric 
        companies.--In the case of a mutual or cooperative electric 
        company described in section 501(c)(12), there shall be 
        excluded income which is treated as member income under 
        subparagraph (H) thereof.''.
    (d) Cross Reference.--Section 1381 is amended by adding at the end 
the following new subsection:
    ``(c) Cross Reference.--

                                ``For treatment of income from load 
loss transactions of organizations described in subsection (a)(2)(C), 
see section 501(c)(12)(H).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 2404. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY REGULATORY 
              COMMISSION OR STATE ELECTRIC RESTRUCTURING POLICY.

    (a) In General.--Section 451 (relating to general rule for taxable 
year of inclusion) is amended by adding at the end the following new 
subsection:
    ``(i) Special Rule for Sales or Dispositions To Implement Federal 
Energy Regulatory Commission or State Electric Restructuring Policy.--
            ``(1) In general.--For purposes of this subtitle, if a 
        taxpayer elects the application of this subsection to a 
        qualifying electric transmission transaction in any taxable 
        year--
                    ``(A) any ordinary income derived from such 
                transaction which would be required to be recognized 
                under section 1245 or 1250 for such taxable year 
                (determined without regard to this subsection), and
                    ``(B) any income derived from such transaction in 
                excess of such ordinary income which is required to be 
                included in gross income for such taxable year,
        shall be so recognized and included ratably over the 8-taxable 
        year period beginning with such taxable year.
            ``(2) Qualifying electric transmission transaction.--For 
        purposes of this subsection, the term `qualifying electric 
        transmission transaction' means any sale or other disposition 
        before January 1, 2007, of--
                    ``(A) property used by the taxpayer in the trade or 
                business of providing electric transmission services, 
                or
                    ``(B) any stock or partnership interest in a 
                corporation or partnership, as the case may be, whose 
                principal trade or business consists of providing 
                electric transmission services,
        but only if such sale or disposition is to an independent 
        transmission company.
            ``(3) Independent transmission company.--For purposes of 
        this subsection, the term `independent transmission company' 
        means--
                    ``(A) a regional transmission organization approved 
                by the Federal Energy Regulatory Commission,
                    ``(B) a person--
                            ``(i) who the Federal Energy Regulatory 
                        Commission determines in its authorization of 
                        the transaction under section 203 of the 
                        Federal Power Act (16 U.S.C. 824b) is not a 
                        market participant within the meaning of such 
                        Commission's rules applicable to regional 
                        transmission organizations, and
                            ``(ii) whose transmission facilities to 
                        which the election under this subsection 
                        applies are under the operational control of a 
                        Federal Energy Regulatory Commission-approved 
                        regional transmission organization before the 
                        close of the period specified in such 
                        authorization, but not later than the close of 
                        the period applicable under paragraph (1), or
                    ``(C) in the case of facilities subject to the 
                exclusive jurisdiction of the Public Utility Commission 
                of Texas, a person which is approved by that Commission 
                as consistent with Texas State law regarding an 
                independent transmission organization.
            ``(4) Election.--An election under paragraph (1), once 
        made, shall be irrevocable.
            ``(5) Nonapplication of installment sales treatment.--
        Section 453 shall not apply to any qualifying electric 
        transmission transaction with respect to which an election to 
        apply this subsection is made.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to transactions occurring after the date of the enactment of this Act.

SEC. 2405. APPLICATION OF TEMPORARY REGULATIONS TO CERTAIN OUTPUT 
              CONTRACTS.

    In the application of section 1-141-7(c)(4) of the Treasury 
Temporary Regulations to output contracts entered into after February 
22, 1998, with respect to an issuer participating in open access with 
respect to the issuer's transmission facilities, an output contract in 
existence on or before such date that is amended after such date shall 
be treated as a contract entered into after such date only if the 
amendment increases the amount of output sold under such contract by 
extending the term of the contract or increasing the amount of output 
sold, but such treatment as a contract entered into after such date 
shall begin on the effective date of the amendment and shall apply only 
with respect to the increased output to be provided under such 
contract.

SEC. 2406. TREATMENT OF CERTAIN DEVELOPMENT INCOME OF COOPERATIVES.

    (a) In General.--Subparagraph (C) of section 501(c)(12), as amended 
by this Act, is amended by striking ``or'' at the end of clause (iv), 
by striking the period at the end of clause (v) and insert ``, or'', 
and by adding at the end the following new clause:
                            ``(vi) from the receipt before January 1, 
                        2007, of any money, property, capital, or any 
                        other contribution in aid of construction or 
                        connection charge intended to facilitate the 
                        provision of electric service for the purpose 
                        of developing qualified fuels from 
                        nonconventional sources (within the meaning of 
                        section 29).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                    TITLE XXV--ADDITIONAL PROVISIONS

SEC. 2501. EXTENSION OF ACCELERATED DEPRECIATION AND WAGE CREDIT 
              BENEFITS ON INDIAN RESERVATIONS.

    (a) Special Recovery Period for Property on Indian Reservations.--
Section 168(j)(8) (relating to termination), as amended by section 
613(b) of the Job Creation and Worker Assistance Act of 2002, is 
amended by striking ``2004'' and inserting ``2005''.
    (b) Indian Employment Credit.--Section 45A(f) (relating to 
termination), as amended by section 613(a) of the Job Creation and 
Worker Assistance Act of 2002, is amended by striking ``2004'' and 
inserting ``2005''.

SEC. 2502. STUDY OF EFFECTIVENESS OF CERTAIN PROVISIONS BY GAO.

    (a) Study.--The Comptroller General of the United States shall 
undertake an ongoing analysis of--
            (1) the effectiveness of the alternative motor vehicles and 
        fuel incentives provisions under title II and the conservation 
        and energy efficiency provisions under title III, and
            (2) the recipients of the tax benefits contained in such 
        provisions, including an identification of such recipients by 
        income and other appropriate measurements.
Such analysis shall quantify the effectiveness of such provisions by 
examining and comparing the Federal Government's forgone revenue to the 
aggregate amount of energy actually conserved and tangible 
environmental benefits gained as a result of such provisions.
    (b) Reports.--The Comptroller General of the United States shall 
report the analysis required under subsection (a) to Congress not later 
than December 31, 2002, and annually thereafter.

SEC. 2503. CREDIT FOR PRODUCTION OF ALASKA NATURAL GAS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by this Act, is 
amended by adding at the end the following new section:

``SEC. 45M. ALASKA NATURAL GAS.

    ``(a) In General.--For purposes of section 38, the Alaska natural 
gas credit of any taxpayer for any taxable year is the credit amount 
per 1,000,000 Btu of Alaska natural gas entering any intake or tie-in 
point which was derived from an area of the State of Alaska lying north 
of 64 degrees North latitude, which is attributable to the taxpayer and 
sold by or on behalf of the taxpayer to an unrelated person during such 
taxable year (within the meaning of section 45).
    ``(b) Credit Amount.--For purposes of this section--
            ``(1) In general.--The credit amount per 1,000,000 Btu of 
        Alaska natural gas entering any intake or tie-in point which 
        was derived from an area of the State of Alaska lying north of 
        64 degrees North latitude (determined in United States 
        dollars), is the excess of--
                    ``(A) $3.25, over
                    ``(B) the average monthly price at the AECO C Hub 
                in Alberta, Canada, for Alaska natural gas for the 
                month in which occurs the date of such entering.
            ``(2) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after the first calendar year 
        ending after the date described in subsection (g)(1), the 
        dollar amount contained in paragraph (1)(A) shall be increased 
        to an amount equal to such dollar amount multiplied by the 
        inflation adjustment factor for such calendar year (determined 
        under section 43(b)(3)(B) by substituting `the calendar year 
        ending before the date described in section 45M(g)(1)' for 
        `1990').
    ``(c) Alaska Natural Gas.--For purposes of this section, the term 
`Alaska natural gas' means natural gas entering any intake or tie-in 
point which was derived from an area of the State of Alaska lying north 
of 64 degrees North latitude produced in compliance with the applicable 
State and Federal pollution prevention, control, and permit 
requirements from the area generally known as the North Slope of Alaska 
(including the continental shelf thereof within the meaning of section 
638(l)), determined without regard to the area of the Alaska National 
Wildlife Refuge (including the continental shelf thereof within the 
meaning of section 638(l)).
    ``(d) Recapture.--
            ``(1) In general.--With respect to each 1,000,000 Btu of 
        Alaska natural gas entering any intake or tie-in point which 
        was derived from an area of the State of Alaska lying north of 
        64 degrees North latitude after the date which is 3 years after 
        the date described in subsection (g)(1), if the average monthly 
        price described in subsection (b)(1)(B) exceeds 150 percent of 
        the amount described in subsection (b)(1)(A) for the month in 
        which occurs the date of such entering, the taxpayer's tax 
        under this chapter for the taxable year shall be increased by 
        an amount equal to the lesser of--
                    ``(A) such excess, or
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the Alaska natural gas credit 
                received by the taxpayer for such years had been zero.
            ``(2) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under this chapter or for purposes 
                of section 55.
    ``(e) Application of Rules.--For purposes of this section, rules 
similar to the rules of paragraphs (3), (4), and (5) of section 45(d) 
shall apply.
    ``(f) No Double Benefit.--The amount of any deduction or other 
credit allowable under this chapter for any fuel taken into account in 
computing the amount of the credit determined under subsection (a) 
shall be reduced by the amount of such credit attributable to such 
fuel.
    ``(g) Application of Section.--This section shall apply to Alaska 
natural gas entering any intake or tie-in point which was derived from 
an area of the State of Alaska lying north of 64 degrees North latitude 
for the period--
            ``(1) beginning with the later of--
                    ``(A) January 1, 2010, or
                    ``(B) the initial date for the interstate 
                transportation of such Alaska natural gas, and
            ``(2) except with respect to subsection (d), ending with 
        the date which is 15 years after the date described in 
        paragraph (1).''.
    (b) Credit Treated as Business Credit.--Section 38(b), as amended 
by this Act, is amended by striking ``plus'' at the end of paragraph 
(22), by striking the period at the end of paragraph (23) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(24) The Alaska natural gas credit determined under 
        section 45M(a).''.
    (c) Allowing Credit Against Entire Regular Tax and Minimum Tax.--
            (1) In general.--Subsection (c) of section 38 (relating to 
        limitation based on amount of tax), as amended by this Act, is 
        amended by redesignating paragraph (5) as paragraph (6) and by 
        inserting after paragraph (4) the following new paragraph:
            ``(5) Special rules for alaska natural gas credit.--
                    ``(A) In general.--In the case of the Alaska 
                natural gas credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to the credit, 
                        and
                            ``(ii) in applying paragraph (1) to the 
                        credit--
                                    ``(I) the amounts in subparagraphs 
                                (A) and (B) thereof shall be treated as 
                                being zero, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the Alaska 
                                natural gas credit).
                    ``(B) Alaska Natural Gas Credit.--For purposes of 
                this subsection, the term `Alaska natural gas credit' 
                means the credit allowable under subsection (a) by 
                reason of section 45M(a).''.
            (2) Conforming amendments.--Subclause (II) of section 
        38(c)(2)(A)(ii), as amended by this Act, subclause (II) of 
        section 38(c)(3)(A)(ii), as amended by this Act, and subclause 
        (II) of section 38(c)(4)(A)(ii), as added by this Act, are each 
        amended by inserting ``or the Alaska natural gas credit'' after 
        ``producer credit''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
amended by adding at the end the following new item:

``Sec. 45M. Alaska natural gas.''.

SEC. 2504. SALE OF GASOLINE AND DIESEL FUEL AT DUTY-FREE SALES 
              ENTERPRISES.

    (a) Prohibition.--Section 555(b) of the Tariff Act of 1930 (19 
U.S.C. 1555(b)) is amended--
            (1) by redesignating paragraphs (6) through (8) as 
        paragraphs (7) through (9), respectively; and
            (2) by inserting after paragraph (5) the following:
            ``(6) Any gasoline or diesel fuel sold at a duty-free sales 
        enterprise shall be considered to be entered for consumption 
        into the customs territory of the United States.''.
    (b) Construction.--The amendments made by this section shall not be 
construed to create any inference with respect to the interpretation of 
any provision of law as such provision was in effect on the day before 
the date of enactment of this Act.
    (c) Effective date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

SEC. 2505. TREATMENT OF DAIRY PROPERTY.

    (a) Qualified Disposition of Dairy Property Treated as Involuntary 
Conversion.--
            (1) In general.--Section 1033 (relating to involuntary 
        conversions) is amended by designating subsection (k) as 
        subsection (l) and inserting after subsection (j) the following 
        new subsection:
    ``(k) Qualified Disposition To Implement Bovine Tuberculosis 
Eradication Program.--
            ``(1) In general.--For purposes of this subtitle, if a 
        taxpayer elects the application of this subsection to a 
        qualified disposition:
                    ``(A) Treatment as involuntary conversion.--Such 
                disposition shall be treated as an involuntary 
                conversion to which this section applies.
                    ``(B) Modification of similar property 
                requirement.--Property to be held by the taxpayer 
                either for productive use in a trade or business or for 
                investment shall be treated as property similar or 
                related in service or use to the property disposed of.
                    ``(C) Extension of period for replacing property.--
                Subsection (a)(2)(B)(i) shall be applied by 
                substituting `4 years' for `2 years'.
                    ``(D) Waiver of unrelated person requirement.--
                Subsection (i) (relating to replacement property must 
                be acquired from unrelated person in certain cases) 
                shall not apply.
                    ``(E) Expanded capital gain for cattle and 
                horses.--Section 1231(b)(3)(A) shall be applied by 
                substituting `1 month' for `24 months'.
            ``(2) Qualified disposition.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified disposition' means the disposition 
                of dairy property which is certified by the Secretary 
                of Agriculture as having been the subject of an 
                agreement under the bovine tuberculosis eradication 
                program, as implemented pursuant to the Declaration of 
                Emergency Because of Bovine Tuberculosis (65 Federal 
                Register 63,227 (2000)).
                    ``(B) Payments received in connection with the 
                bovine tuberculosis eradication program.--For purposes 
                of this subsection, any amount received by a taxpayer 
                in connection with an agreement under such bovine 
                tuberculosis eradication program shall be treated as 
                received in a qualified disposition.
                    ``(C) Transmittal of certifications.--The Secretary 
                of Agriculture shall transmit copies of certifications 
                under this paragraph to the Secretary.
            ``(3) Allowance of the adjusted basis of certified dairy 
        property as a depreciation deduction.--The adjusted basis of 
        any property certified under paragraph (2)(A) shall be allowed 
        as a depreciation deduction under section 167 for the taxable 
        year which includes the date of the certification described in 
        paragraph (2)(A).
            ``(4) Dairy property.--For purposes of this subsection, the 
        term `dairy property' means all tangible or intangible property 
        used in connection with a dairy business or a dairy processing 
        plant.
            ``(5) Special rules for certain business organizations.--
                    ``(A) S corporations.--In the case of an S 
                corporation, gain on a qualified disposition shall not 
                be treated as recognized for the purposes of section 
                1374 (relating to tax imposed on certain built-in 
                gains).
                    ``(B) Partnerships.--In the case of a partnership 
                which dissolves in anticipation of a qualified 
                disposition (including in anticipation of receiving the 
                amount described in paragraph (2)(B)), the dairy 
                property owned by the partners of such partnership at 
                the time of such disposition shall be treated, for the 
                purposes of this section and notwithstanding any 
                regulation or rule of law, as owned by such partners at 
                the time of such disposition.
            ``(6) Termination.--This subsection shall not apply to 
        dispositions made after December 31, 2006.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to dispositions made and amounts received in 
        taxable years ending after May 22, 2001.
    (b) Deduction of Qualified Reclamation Expenditures.--
            (1) In general.--Part VI of subchapter B of chapter 1 
        (relating to itemized deductions for individuals and 
        corporations), as amended by this Act, is amended by adding at 
        the end the following new section:

``SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMATION COSTS.

    ``(a) In General.--Notwithstanding section 280B (relating to 
demolition of structures), a taxpayer may elect to treat any qualified 
reclamation expenditure which is paid or incurred by the taxpayer as an 
expense which is not chargeable to capital account. Any expenditure 
which is so treated shall be allowed as a deduction for the taxable 
year in which it is paid or incurred.
    ``(b) Qualified Reclamation Expenditure.--
            ``(1) In general.--For purposes of this subparagraph, the 
        term `qualified reclamation expenditure' means amounts 
        otherwise chargeable to capital account and paid or incurred to 
        convert any real property certified under section 1033(k)(2) 
        (relating to qualified disposition) into unimproved land.
            ``(2) Special rule for expenditures for depreciable 
        property.--A rule similar to the rule of section 198(b)(2) 
        (relating to special rule for expenditures for depreciable 
        property) shall apply for purposes of paragraph (1).
    ``(c) Deduction Recaptured as Ordinary Income.--Rules similar to 
the rules of section 198(e) (relating to deduction recaptured as 
ordinary income on sale, etc.) shall apply with respect to any 
qualified reclamation expenditure.
    ``(d) Termination.--This section shall not apply to expenditures 
paid or incurred after December 31, 2006.''.
            (2) Clerical amendment.--The table of sections for part VI 
        of subchapter B of chapter 1, as amended by this Act, is 
        amended by adding at the end the following new item:

                              ``Sec. 199B. Expensing of dairy property 
                                        reclamation costs.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to expenditures paid or incurred in taxable years 
        ending after May 22, 2001.

SEC. 2506. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR AGRICULTURAL 
              AERIAL APPLICATORS.

    (a) No Waiver by Farm Owner, Tenant, or Operator Necessary.--
Subparagraph (B) of section 6420(c)(4) (relating to certain farming use 
other than by owner, etc.) is amended to read as follows:
                    ``(B) if the person so using the gasoline is an 
                aerial or other applicator of fertilizers or other 
                substances and is the ultimate purchaser of the 
                gasoline, then subparagraph (A) of this paragraph shall 
                not apply and the aerial or other applicator shall be 
                treated as having used such gasoline on a farm for 
                farming purposes.''.
    (b) Exemption Includes Fuel Used Between Airfield and Farm.--
Section 6420(c)(4), as amended by subsection (a), is amended by adding 
at the end the following new flush sentence:
        ``For purposes of this paragraph, in the case of an aerial 
        applicator, gasoline shall be treated as used on a farm for 
        farming purposes if the gasoline is used for the direct flight 
        between the airfield and 1 or more farms.''.
    (c) Exemption from Tax on Air Transportation of Persons for 
Forestry Purposes Extended to Fixed-Wing Aircraft.--Subsection (f) of 
section 4261 (relating to tax on air transportation of persons) is 
amended to read as follows:
    ``(f) Exemption for Certain Uses.--No tax shall be imposed under 
subsection (a) or (b) on air transportation--
            ``(1) by helicopter for the purpose of transporting 
        individuals, equipment, or supplies in the exploration for, or 
        the development or removal of, hard minerals, oil, or gas, or
            ``(2) by helicopter or by fixed-wing aircraft for the 
        purpose of the planting, cultivation, cutting, or 
        transportation of, or caring for, trees (including logging 
        operations),
but only if the helicopter or fixed-wing aircraft does not take off 
from, or land at, a facility eligible for assistance under the Airport 
and Airway Development Act of 1970, or otherwise use services provided 
pursuant to section 44509 or 44913(b) or subchapter I of chapter 471 of 
title 49, United States Code, during such use. In the case of 
helicopter transportation described in paragraph (1), this subsection 
shall be applied by treating each flight segment as a distinct 
flight.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to fuel use or air transportation after December 31, 2001, and 
before January 1, 2003.

SEC. 2507. MODIFICATION OF RURAL AIRPORT DEFINITION.

    (a) In General.--Clause (ii) of section 4261(e)(1)(B) (defining 
rural airport) is amended by striking the period at the end of 
subclause (II) and inserting ``, or'' and by adding at the end the 
following new subclause:
                                    ``(III) is not connected by paved 
                                roads to another airport.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2002.

SEC. 2508. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION PROVIDED BY 
              SEAPLANES.

    (a) In General.--The taxes imposed by sections 4261 and 4271 shall 
not apply to transportation by a seaplane with respect to any segment 
consisting of a takeoff from, and a landing on, water.
    (b) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2002.

                DIVISION I--IRAQ OIL IMPORT RESTRICTION

                TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

SEC. 2601. SHORT TITLE AND FINDINGS.

    (a) Short Title.--This title can be cited as the ``Iraq Petroleum 
Import Restriction Act of 2002''.
    (b) Findings.--Congress finds that--
            (1) the Government of the Republic of Iraq--
                    (A) has failed to comply with the terms of United 
                Nations Security Council Resolution 687 regarding 
                unconditional Iraqi acceptance of the destruction, 
                removal, or rendering harmless, under international 
                supervision, of all nuclear, chemical and biological 
                weapons and all stocks of agents and all related 
                subsystems and components and all research, 
                development, support and manufacturing facilities, as 
                well as all ballistic missiles with a range greater 
                than 150 kilometers and related major parts, and repair 
                and production facilities and has failed to allow 
                United Nations inspectors access to sites used for the 
                production or storage of weapons of mass destruction;
                    (B) routinely contravenes the terms and. conditions 
                of UNSC Resolution 661, authorizing the export of 
                petroleum products from Iraq in exchange for food, 
                medicine and other humanitarian products by conducting 
                a routine and extensive program to sell such products 
                outside of the channels established by UNSC Resolution 
                661 in exchange for military equipment and materials to 
                be used in pursuit of its program to develop weapons of 
                mass destruction in order to threaten the United States 
                and its allies in the Persian Gulf and surrounding 
                regions;
                    (C) has failed to adequately draw down upon the 
                amounts received in the Escrow Account established by 
                UNSC Resolution 986 to purchase food, medicine and 
                other humanitarian products required by its citizens, 
                resulting in massive humanitarian suffering by the 
                Iraqi people;
                    (D) conducts a periodic and systematic campaign to 
                harass and obstruct the enforcement of the United 
                States- and United Kingdom-enforced ``No-Fly Zones'' in 
                effect in the Republic of Iraq;
                    (E) routinely manipulates the petroleum export 
                production volumes permitted under UNSC Resolution 661 
                in order to create uncertainty in global energy 
                markets, and therefore threatens the economic security 
                of the United States;
                    (F) pays bounties to the families of suicide 
                bombers in order to encourage the murder of Israeli 
                civilians;
            (2) further imports of petroleum products from the Republic 
        of Iraq are inconsistent with the national security and foreign 
        policy interests of the United States and should be eliminated 
        until such time as they are not so inconsistent.

SEC. 2602. PROHIBITION ON IRAQI-ORIGIN PETROLEUM IMPORTS.

    The direct or indirect import from Iraq of Iraqi-origin petroleum 
and petroleum products is prohibited, notwithstanding an authorization 
by the Committee established by UNSC Resolution 661 or its designee, or 
any other order to the contrary.

SEC. 2603. TERMINATION/PRESIDENTIAL CERTIFICATION.

    This title will remain in effect until such time as the President, 
after consultation with the relevant committees in Congress, certifies 
to the Congress that--
            (1) Iraq is in substantial compliance with the terms of--
                    (A) UNSC Resolution 687; and
                    (B) UNSC Resolution 986 prohibiting smuggling of 
                oil in circumvention of the ``Oil-for-Food'' program; 
                and
            (2) ceases the practice of compensating the families of 
        suicide bombers in order to encourage the murder of Israeli 
        citizens; or that
            (3) resuming the importation of Iraqi-origin petroleum and 
        petroleum products would not be inconsistent with the national 
        security and foreign policy interests of the United States.

SEC. 2604. HUMANITARIAN INTERESTS.

    It is the sense of the Senate that the President should make all 
appropriate efforts to ensure that the humanitarian needs of the Iraqi 
people are not negatively affected by this Act, and should encourage 
through public, private, domestic and international means the direct or 
indirect sale, donation or other transfer to appropriate 
nongovernmental health and humanitarian organizations and individuals 
within Iraq of food, medicine and other humanitarian products.

SEC. 2605. DEFINITIONS.

    (a) 661 Committee.--The term 661 Committee means the Security 
Council Committee established by UNSC Resolution 661, and persons 
acting for or on behalf of the Committee under its specific delegation 
of authority for the relevant matter or category of activity, including 
the overseers appointed by the United Nations Secretary-General to 
examine and approve agreements for purchases of petroleum and petroleum 
products from the Government of Iraq pursuant to UNSC Resolution 986.
    (b) UNSC Resolution 661.--The term UNSC Resolution 661 means United 
Nations Security Council Resolution No. 661, adopted August 6, 1990, 
prohibiting certain transactions with respect to Iraq and Kuwait.
    (c) UNSC Resolution 687.--The term UNSC Resolution 687 means United 
Nations Security Council Resolution 687, adopted April 3, 1991.
    (d) UNSC Resolution 986.--The term UNSC Resolution 986 means United 
Nations Security Council Resolution 986, adopted April 14, 1995.

SEC. 2606. EFFECTIVE DATE.

    The prohibition on importation of Iraqi-origin petroleum and 
petroleum products shall be effective 30 days after enactment of this 
Act.

                       DIVISION J--MISCELLANEOUS

                  TITLE XXVII--MISCELLANEOUS PROVISION

SEC. 2701. FAIR TREATMENT OF PRESIDENTIAL JUDICIAL NOMINEES.

     It is the sense of the Senate that, in the interests of the 
administration of justice, the Senate Judiciary Committee should along 
with its other legislative and oversight responsibilities, continue to 
hold regular hearings on judicial nominees and should, in accordance 
with the precedents and practices of the Committee, schedule hearings 
on the nominees submitted by the President on May 9, 2001, and 
resubmitted on September 5, 2001, expeditiously.

            Attest:

                                                             Secretary.
107th CONGRESS

  2d Session

                                H. R. 4

_______________________________________________________________________

                               AMENDMENT