[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                 H. R. 4

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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 27, 2001

    Mr. Tauzin (for himself, Mr. Thomas, Mr. Hansen, and Mr. Oxley) 
 introduced the following bill; which was referred to the Committee on 
Energy and Commerce, and in addition to the Committees on Science, Ways 
 and Means, Resources, Education and the Workforce, Transportation and 
Infrastructure, the Budget, and Financial Services, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
To 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.

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

SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Securing America's 
Future Energy Act of 2001'' or the ``SAFE Act of 2001''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:



Sec. 1. Short title and table of contents.
                               DIVISION A

Sec. 100. Short title.
                      TITLE I--ENERGY CONSERVATION

  Subtitle A--Reauthorization of Federal Energy Conservation Programs

Sec. 101. Authorization of appropriations.
         Subtitle B--Federal Leadership in Energy Conservation

Sec. 121. Federal facilities and national energy security.
Sec. 122. Enhancement and extension of authority relating to Federal 
                            energy savings performance contracts.
Sec. 123. Clarification and enhancement of authority to enter utility 
                            incentive programs for energy savings.
Sec. 124. Federal central air conditioner and heat pump efficiency.
Sec. 125. Advanced building efficiency testbed.
Sec. 126. Use of interval data in Federal buildings.
Sec. 127. Review of Energy Savings Performance Contract program.
Sec. 128. Capitol complex.
                       Subtitle C--State Programs

Sec. 131. Amendments to State energy programs.
Sec. 132. Reauthorization of energy conservation program for schools 
                            and hospitals.
Sec. 133. Amendments to Weatherization Assistance Program.
Sec. 134. LIHEAP.
Sec. 135. High performance public buildings.
          Subtitle D--Energy Efficiency for Consumer Products

Sec. 141. Energy Star program.
Sec. 142. Labeling of energy efficient appliances.
Sec. 143. Appliance standards.
                 Subtitle E--Energy Efficient Vehicles

Sec. 151. High occupancy vehicle exception.
Sec. 152. Railroad efficiency.
Sec. 153. Biodiesel fuel use credits.
Sec. 154. Mobile to stationary source trading.
                      Subtitle F--Other Provisions

Sec. 161. Review of regulations to eliminate barriers to emerging 
                            energy technology.
Sec. 162. Advanced idle elimination systems.
Sec. 163. Study of benefits and feasibility of oil bypass filtration 
                            technology.
Sec. 164. Gas flare study.
Sec. 165. Telecommuting study.
                   TITLE II--AUTOMOBILE FUEL ECONOMY

Sec. 201. Average fuel economy standards for nonpassenger automobiles.
Sec. 202. Consideration of prescribing different average fuel economy 
                            standards for nonpassenger automobiles.
Sec. 203. Dual fueled automobiles.
Sec. 204. Fuel economy of the Federal fleet of automobiles.
Sec. 205. Hybrid vehicles and alternative vehicles.
Sec. 206. Federal fleet petroleum-based nonalternative fuels.
Sec. 207. Study of feasibility and effects of reducing use of fuel for 
                            automobiles.
                       TITLE III--NUCLEAR ENERGY

Sec. 301. Budget status of Nuclear Waste Fund.
Sec. 302. License period.
Sec. 303. Cost recovery from Government agencies.
Sec. 304. Depleted uranium hexafluoride.
Sec. 305. Nuclear Regulatory Commission meetings.
Sec. 306. Cooperative research and development and special 
                            demonstration projects for the uranium 
                            mining industry.
Sec. 307. Maintenance of a viable domestic uranium conversion industry.
Sec. 308. Paducah decontamination and decommissioning plan.
                     TITLE IV--HYDROELECTRIC ENERGY

Sec. 401. Alternative conditions and fishways.
Sec. 402. FERC data on hydroelectric licensing.
                             TITLE V--FUELS

Sec. 601. Tank draining during transition to summertime RFG.
Sec. 602. Gasoline blendstock requirements.
Sec. 603. Boutique fuels.
Sec. 604. Funding for MTBE contamination.
                       TITLE VI--RENEWABLE ENERGY

Sec. 701. Assessment of renewable energy resources.
Sec. 702. Renewable energy production incentive.
                          TITLE VII--PIPELINES

Sec. 801. Prohibition on certain pipeline route.
Sec. 802. Historic pipelines.
                  TITLE VII--MISCELLANEOUS PROVISIONS

Sec. 901. Waste reduction and use of alternatives.
Sec. 902. Annual report on United States energy independence.
Sec. 903. Study of aircraft emissions.
                               DIVISION B

Sec. 2001. Short title.
Sec. 2002. Findings.
Sec. 2003. Purposes.
Sec. 2004. Goals.
Sec. 2005. Definitions.
Sec. 2006. Authorizations.
Sec. 2007. Balance of funding priorities.
           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

                 Subtitle A--Alternative Fuel Vehicles

Sec. 2101. Short title.
Sec. 2102. Definitions.
Sec. 2103. Pilot program.
Sec. 2104. Reports to Congress.
Sec. 2105. Authorization of appropriations.
          Subtitle B--Distributed Power Hybrid Energy Systems

Sec. 2121. Findings.
Sec. 2122. Definitions.
Sec. 2123. Strategy.
Sec. 2124. High power density industry program.
Sec. 2125. Micro-cogeneration energy technology.
Sec. 2126. Program plan.
Sec. 2127. Report.
Sec. 2128. Voluntary consensus standards.
           Subtitle C--Secondary Electric Vehicle Battery Use

Sec. 2131. Definitions.
Sec. 2132. Establishment of secondary electric vehicle battery use 
                            program.
Sec. 2133. Authorization of appropriations.
                     Subtitle D--Green School Buses

Sec. 2141. Short title.
Sec. 2142. Establishment of pilot program.
Sec. 2143. Fuel cell bus development and demonstration program.
Sec. 2144. Authorization of appropriations.
            Subtitle E--Next Generation Lighting Initiative

Sec. 2151. Short title.
Sec. 2152. Definition.
Sec. 2153. Next Generation Lighting Initiative.
Sec. 2154. Study.
Sec. 2155. Grant program.
    Subtitle F--Department of Energy Authorization of Appropriations

Sec. 2161. Authorization of appropriations.
Subtitle G--Environmental Protection Agency Office of Air and Radiation 
                    Authorization of Appropriations

Sec. 2171. Short title.
Sec. 2172. Authorization of appropriations.
Sec. 2173. Limits on use of funds.
Sec. 2174. Cost sharing.
Sec. 2175. Limitation on demonstration and commercial applications of 
                            energy technology.
Sec. 2176. Reprogramming.
Sec. 2177. Budget request format.
Sec. 2178. Other provisions.
          Subtitle H--National Building Performance Initiative

Sec. 2181. National Building Performance Initiative.
                       TITLE II--RENEWABLE ENERGY

                          Subtitle A--Hydrogen

Sec. 2201. Short title.
Sec. 2202. Purposes.
Sec. 2203. Definitions.
Sec. 2204. Reports to Congress.
Sec. 2205. Hydrogen research and development.
Sec. 2206. Demonstrations.
Sec. 2207. Technology transfer.
Sec. 2208. Coordination and consultation.
Sec. 2209. Advisory Committee.
Sec. 2210. Authorization of appropriations.
Sec. 2211. Repeal.
                         Subtitle B--Bioenergy

Sec. 2221. Short title.
Sec. 2222. Findings.
Sec. 2223. Definitions.
Sec. 2224. Authorization.
Sec. 2225. Authorization of appropriations.
            Subtitle C--Transmission Infrastructure Systems

Sec. 2241. Transmission infrastructure systems research, development, 
                            demonstration, and commercial application.
Sec. 2242. Program plan.
Sec. 2243. Report.
    Subtitle D--Department of Energy Authorization of Appropriations

Sec. 2261. Authorization of appropriations.
                       TITLE III--NUCLEAR ENERGY

         Subtitle A--University Nuclear Science and Engineering

Sec. 2301. Short title.
Sec. 2302. Findings.
Sec. 2303. Department of Energy program.
Sec. 2304. Authorization of appropriations.
Subtitle B--Advanced Fuel Recycling Technology Research and Development 
                                Program

Sec. 2321. Program.
    Subtitle C--Department of Energy Authorization of Appropriations

Sec. 2341. Nuclear Energy Research Initiative.
Sec. 2342. Nuclear Energy Plant Optimization program.
Sec. 2343. Nuclear energy technologies.
Sec. 2344. Authorization of appropriations.
                        TITLE IV--FOSSIL ENERGY

                            Subtitle A--Coal

Sec. 2401. Coal and related technologies programs.
                        Subtitle B--Oil and Gas

Sec. 2421. Petroleum-oil technology.
Sec. 2422. Gas.
        Subtitle C--Ultra-Deepwater and Unconventional Drilling

Sec. 2441. Short title.
Sec. 2442. Definitions.
Sec. 2443. Ultra-deepwater program.
Sec. 2444. National Energy Technology Laboratory.
Sec. 2445. Advisory Committee.
Sec. 2446. Research Organization.
Sec. 2447. Grants.
Sec. 2448. Plan and funding.
Sec. 2449. Audit.
Sec. 2450. Fund.
Sec. 2451. Sunset.
                         Subtitle D--Fuel Cells

Sec. 2461. Fuel cells.
    Subtitle E--Department of Energy Authorization of Appropriations

Sec. 2481. Authorization of appropriations.
                            TITLE V--SCIENCE

                   Subtitle A--Fusion Energy Sciences

Sec. 2501. Short title.
Sec. 2502. Findings.
Sec. 2503. Plan for fusion experiment.
Sec. 2504. Plan for fusion energy sciences program.
Sec. 2505. Authorization of appropriations.
                 Subtitle B--Spallation Neutron Source

Sec. 2521. Definition.
Sec. 2522. Authorization of appropriations.
Sec. 2523. Report.
Sec. 2524. Limitations.
      Subtitle C--Facilities, Infrastructure, and User Facilities

Sec. 2541. Definition.
Sec. 2542. Facility and infrastructure support for nonmilitary energy 
                            laboratories.
Sec. 2543. User facilities.
            Subtitle D--Advisory Panel on Office of Science

Sec. 2561. Establishment.
Sec. 2562. Report.
    Subtitle E--Department of Energy Authorization of Appropriations

Sec. 2581. Authorization of appropriations.
                        TITLE VI--MISCELLANEOUS

      Subtitle A--General Provisions for the Department of Energy

Sec. 2601. Research, development, demonstration, and commercial 
                            application of energy technology programs, 
                            projects, and activities.
Sec. 2602. Limits on use of funds.
Sec. 2603. Cost sharing.
Sec. 2604. Limitation on demonstration and commercial application of 
                            energy technology.
Sec. 2605. Reprogramming.
               Subtitle B--Other Miscellaneous Provisions

Sec. 2611. Notice of reorganization.
Sec. 2612. Limits on general plant projects.
Sec. 2613. Limits on construction projects.
Sec. 2614. Authority for conceptual and construction design.
Sec. 2615. National Energy Policy Development Group mandated reports.
Sec. 2616. Periodic reviews and assessments.
                               DIVISION C

Sec. 3001. Short title.
                         TITLE I--CONSERVATION

Sec. 3101. Credit for residential solar energy property.
Sec. 3102. Extension and expansion of credit for electricity produced 
                            from renewable resources.
Sec. 3103. Credit for qualified stationary fuel cell powerplants.
Sec. 3104. Alternative motor vehicle credit.
Sec. 3105. Extension of deduction for certain refueling property.
Sec. 3106. Modification of credit for qualified electric vehicles.
Sec. 3107. Tax credit for energy efficient appliances.
Sec. 3108. Credit for energy efficiency improvements to existing homes.
Sec. 3109. Business credit for construction of new energy efficient 
                            home.
Sec. 3110. Allowance of deduction for energy efficient commercial 
                            building property.
Sec. 3111. Allowance of deduction for qualified energy management 
                            devices and retrofitted qualified meters.
Sec. 3112. 3-year applicable recovery period for depreciation of 
                            qualified energy management devices.
Sec. 3113. Energy credit for combined heat and power system property.
Sec. 3114. New nonrefundable personal credits allowed against regular 
                            and minimum taxes.
Sec. 3115. Phaseout of 4.3-cent motor fuel excise taxes on railroads 
                            and inland waterway transportation which 
                            remain in general fund.
Sec. 3116. Reduced motor fuel excise tax on certain mixtures of diesel 
                            fuel.
Sec. 3117. Credit for investment in qualifying advanced clean coal 
                            technology.
Sec. 3118. Credit for production from qualifying advanced clean coal 
                            technology.

                         TITLE II--RELIABILITY

Sec. 3201. Natural gas gathering lines treated as 7-year property.
Sec. 3202. Natural gas distribution lines treated as 10-year property.
Sec. 3203. Petroleum refining property treated as 7-year property.
Sec. 3204. Expensing of capital costs incurred in complying with 
                            environmental protection agency sulfur 
                            regulations.
Sec. 3205. Environmental tax credit.
Sec. 3206. Determination of small refiner exception to oil depletion 
                            deduction.
Sec. 3207. Tax-exempt bond financing of certain electric facilities.
Sec. 3208. Sales or dispositions to implement Federal Energy Regulatory 
                            Commission or State electric restructuring 
                            policy.
Sec. 3209. Distributions of stock to implement Federal Energy 
                            Regulatory Commission or State electric 
                            restructuring policy.
Sec. 3210. Modifications to special rules for nuclear decommissioning 
                            costs.
Sec. 3211. Treatment of certain income of cooperatives.
Sec. 3212. Repeal of requirement of certain approved terminals to offer 
                            dyed diesel fuel and kerosene for 
                            nontaxable purposes.
Sec. 3213. Arbitrage rules not to apply to prepayments for natural gas.
                         TITLE III--PRODUCTION

Sec. 3301. Oil and gas from marginal wells.
Sec. 3302. Temporary suspension of limitation based on 65 percent of 
                            taxable income and extension of suspension 
                            of taxable income limit with respect to 
                            marginal production.
Sec. 3303. Deduction for delay rental payments.
Sec. 3304. Election to expense geological and geophysical expenditures.
Sec. 3305. 5-year net operating loss carryback for losses attributable 
                            to operating mineral interests of oil and 
                            gas producers.
Sec. 3306. Extension and modification of credit for producing fuel from 
                            a nonconventional source.
Sec. 3307. Business related energy credits allowed against regular and 
                            minimum tax.
Sec. 3308. Temporary repeal of alternative minimum tax preference for 
                            intangible drilling costs.
Sec. 3309. Allowance of enhanced recovery credit against the 
                            alternative minimum tax.
Sec. 3310. Extension of certain benefits for energy-related businesses 
                            on Indian reservations.
                               DIVISION D

Sec. 4101. Capacity building for energy-efficient, affordable housing.
Sec. 4102. Increase of CDBG public services cap for energy conservation 
                            and efficiency activities.
Sec. 4103. FHA mortgage insurance incentives for energy efficient 
                            housing.
Sec. 4104. Public housing capital fund.
Sec. 4105. Grants for energy-conserving improvements for assisted 
                            housing.
Sec. 4106. North American Development Bank.
                               DIVISION E

Sec. 5000. Short title.
Sec. 5001. Findings.
Sec. 5002. Definitions.
Sec. 5003. Clean coal power initiative.
Sec. 5004. Cost and performance goals.
Sec. 5005. Authorization of appropriations.
Sec. 5006. Project criteria.
Sec. 5007. Study.
                               DIVISION F

Sec. 6000. Short title.
      TITLE I--GENERAL PROTECTIONS FOR ENERGY SUPPLY AND SECURITY

Sec. 6101. Study of existing rights-of-way on Federal lands to 
                            determine capability to support new 
                            pipelines or other transmission facilities.
Sec. 6102. Inventory of energy production potential of all Federal 
                            public lands.
Sec. 6103. Review of regulations to eliminate barriers to emerging 
                            energy technology.
Sec. 6104. Interagency agreement on environmental review of interstate 
                            natural gas pipeline projects.
Sec. 6105. Enhancing energy efficiency in management of Federal lands.
                   TITLE II--OIL AND GAS DEVELOPMENT

                    Subtitle A--Offshore Oil and Gas

Sec. 6201. Short title.
Sec. 6202. Lease sales in Western and Central Planning Area of the Gulf 
                            of Mexico.
Sec. 6203. Savings clause.
Sec. 6204. Analysis of Gulf of Mexico field size distribution, 
                            international competitiveness, and 
                            incentives for development.
       Subtitle B--Improvements to Federal Oil and Gas Management

Sec. 6221. Short title.
Sec. 6222. Study of impediments to efficient lease operations.
Sec. 6223. Elimination of unwarranted denials and stays.
Sec. 6224. Limitations on cost recovery for applications.
Sec. 6225. Consultation with Secretary of Agriculture.
                       Subtitle C--Miscellaneous

Sec. 6231. Offshore subsalt development.
Sec. 6232. Program on oil and gas royalties in kind.
Sec. 6233. Marginal well production incentives.
Sec. 6234. Reimbursement for costs of NEPA analyses, documentation, and 
                            studies.
                TITLE III--GEOTHERMAL ENERGY DEVELOPMENT

Sec. 6301. Royalty reduction and relief.
Sec. 6302. Exemption from royalties for direct use of low temperature 
                            geothermal energy resources.
Sec. 6303. Amendments relating to leasing on Forest Service lands.
Sec. 6304. Deadline for determination on pending noncompetitive lease 
                            applications.
Sec. 6305. Opening of public lands under military jurisdiction.
Sec. 6306. Application of amendments.
Sec. 6307. Review and report to Congress.
Sec. 6308. Reimbursement for costs of NEPA analyses, documentation, and 
                            studies.
                          TITLE IV--HYDROPOWER

Sec. 6401. Study and report on increasing electric power production 
                            capability of existing facilities.
Sec. 6402. Installation of powerformer at Folsom power plant, 
                            California.
Sec. 6403. Study and implementation of increased operational 
                            efficiencies in hydroelectric power 
                            projects.
Sec. 6404. Shift of project loads to off-peak periods.
             TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

Sec. 6501. Short title.
Sec. 6502. Definitions.
Sec. 6503. Leasing program for lands within the Coastal Plain.
Sec. 6504. Lease sales.
Sec. 6505. Grant of leases by the Secretary.
Sec. 6506. Lease terms and conditions.
Sec. 6507. Coastal Plain environmental protection.
Sec. 6508. Expedited judicial review.
Sec. 6509. Rights-of-way across the Coastal Plain.
Sec. 6510. Conveyance.
Sec. 6511. Local government impact aid and community service 
                            assistance.
Sec. 6512. Revenue allocation.
   TITLE VI--CONSERVATION OF ENERGY BY THE DEPARTMENT OF THE INTERIOR

Sec. 6601. Energy conservation by the Department of the Interior.
                            TITLE VII--COAL

Sec. 6701. Limitation on fees with respect to coal lease applications 
                            and documents.
Sec. 6702. Mining plans.
Sec. 6703. Payment of advance royalties under coal leases.
Sec. 6704. Elimination of deadline for submission of coal lease 
                            operation and reclamation plan.
               TITLE VIII--INSULAR AREAS ENERGY SECURITY

Sec. 6801. Insular areas energy security.

                               DIVISION A

SEC. 100. SHORT TITLE.

    This division may be cited as the ``Energy Advancement and 
Conservation Act of 2001''.

                      TITLE I--ENERGY CONSERVATION

  Subtitle A--Reauthorization of Federal Energy Conservation Programs

SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

    Section 660 of the Department of Energy Organization Act (42 U.S.C. 
7270) is amended as follows:
            (1) By inserting ``(a)'' before ``Appropriations''.
            (2) By inserting at the end the following new subsection:
    ``(b) There are hereby authorized to be appropriated to the 
Department of Energy for fiscal year 2002, $950,000,000; for fiscal 
year 2003, $1,000,000,000; for fiscal year 2004, $1,050,000,000; for 
fiscal year 2005, $1,100,000,000; and for fiscal year 2006, 
$1,150,000,000, to carry out energy efficiency activities under the 
following laws, such sums to remain available until expended:
            ``(1) Energy Policy and Conservation Act, including section 
        256(d)(42 U.S.C. 6276(d)) (promote export of energy efficient 
        products), sections 321 through 346 (42 U.S.C. 6291-6317) 
        (appliances program).
            ``(2) Energy Conservation and Production Act, including 
        sections 301 through 308 (42 U.S.C. 6831-6837) (energy 
        conservation standards for new buildings).
            ``(3) National Energy Conservation Policy Act, including 
        sections 541-551 (42 U.S.C. 8251-8259) (Federal Energy 
        Management Program).
            ``(4) Energy Policy Act of 1992, including sections 103 (42 
        U.S.C. 13458) (energy efficient lighting and building centers), 
        121 (42 U.S.C. 6292 note) (energy efficiency labeling for 
        windows and window systems), 125 (42 U.S.C. 6292 note) (energy 
        efficiency information for commercial office equipment), 126 
        (42 U.S.C. 6292 note) (energy efficiency information for 
        luminaires), 131 (42 U.S.C. 6348) (energy efficiency in 
        industrial facilities), and 132 (42 U.S.C. 6349) (process-
        oriented industrial energy efficiency).''.

         Subtitle B--Federal Leadership in Energy Conservation

SEC. 121. FEDERAL FACILITIES AND NATIONAL ENERGY SECURITY.

    (a) Purpose.--Section 542 of the National Energy Conservation 
Policy Act (42 U.S.C. 8252) is amended by inserting ``, and generally 
to promote the production, supply, and marketing of energy efficiency 
products and services and the production, supply, and marketing of 
unconventional and renewable energy resources'' after ``by the Federal 
Government''.
    (b) Energy Management Requirements.--Section 543 of the National 
Energy Conservation Policy Act (42 U.S.C. 8253) is amended as follows:
            (1) In subsection (a)(1), by striking ``during the fiscal 
        year 1995'' and all that follows through the end and inserting 
        ``during--
    ``(1) fiscal year 1995 is at least 10 percent;
    ``(2) fiscal year 2000 is at least 20 percent;
    ``(3) fiscal year 2005 is at least 30 percent;
    ``(4) fiscal year 2010 is at least 35 percent;
    ``(5) fiscal year 2015 is at least 40 percent; and
    ``(6) fiscal year 2020 is at least 45 percent,
less than the energy consumption per gross square foot of its Federal 
buildings in use during fiscal year 1985. To achieve the reductions 
required by this paragraph, an agency shall make maximum practicable 
use of energy efficiency products and services and unconventional and 
renewable energy resources, using guidelines issued by the Secretary 
under subsection (d) of this section.''.
            (2) In subsection (d), by inserting ``Such guidelines shall 
        include appropriate model technical standards for energy 
        efficiency and unconventional and renewable energy resources 
        products and services. Such standards shall reflect, to the 
        extent practicable, evaluation of both currently marketed and 
        potentially marketable products and services that could be used 
        by agencies to improve energy efficiency and increase 
        unconventional and renewable energy resources.'' after 
        ``implementation of this part.''.
            (3) By adding at the end the following new subsection:
    ``(e) Studies.--To assist in developing the guidelines issued by 
the Secretary under subsection (d) and in furtherance of the purposes 
of this section, the Secretary shall conduct studies to identify and 
encourage the production and marketing of energy efficiency products 
and services and unconventional and renewable energy resources. To 
conduct such studies, and to provide grants to accelerate the use of 
unconventional and renewable energy, there are authorized to be 
appropriated to the Secretary $20,000,000 for each of the fiscal years 
2003 through 2010.''.
    (c) Definition.--Section 551 of the National Energy Conservation 
Policy Act (42 U.S.C. 8259) is amended as follows:
            (1) By striking ``and'' at the end of paragraph (8).
            (2) By striking the period at the end of paragraph (9) and 
        inserting ``; and''.
            (3) By adding at the end the following new paragraph:
            ``(10) the term `unconventional and renewable energy 
        resources' includes renewable energy sources, hydrogen, fuel 
        cells, cogeneration, combined heat and power, heat recovery 
        (including by use of a Stirling heat engine), and distributed 
        generation.''.
    (d) Exclusions From Requirement.--The National Energy Conservation 
Policy Act (42 U.S.C. 7201 and following) is amended as follows:
            (1) In section 543(a)--
                    (A) by striking ``(1) Subject to paragraph (2)'' 
                and inserting ``Subject to subsection (c)''; and
                    (B) by striking ``(2) An agency'' and all that 
                follows through ``such exclusion.''.
            (2) By amending subsection (c) of such section 543 to read 
        as follows:
    ``(c) Exclusions.--(1) A Federal building may be excluded from the 
requirements of subsections (a) and (b) only if--
            ``(A) the President declares the building to require 
        exclusion for national security reasons; and
            ``(B) the agency responsible for the building has--
                    ``(i) completed and submitted all federally 
                required energy management reports; and
                    ``(ii) achieved compliance with the energy 
                efficiency requirements of this Act, the Energy Policy 
                Act of 1992, Executive Orders, and other Federal law;
                    ``(iii) implemented all practical, life cycle cost-
                effective projects in the excluded building.
    ``(2) The President shall only declare buildings described in 
paragraph (1)(A) to be excluded, not ancillary or nearby facilities 
that are not in themselves national security facilities.''.
            (3) In section 548(b)(1)(A)--
                    (A) by striking ``copy of the''; and
                    (B) by striking ``sections 543(a)(2) and 
                543(c)(3)'' and inserting ``section 543(c)''.
    (e) Acquisition Requirement.--Section 543(b) of such Act is 
amended--
            (1) in paragraph (1), by striking ``(1) Not'' and inserting 
        ``(1) Except as provided in paragraph (5), not''; and
            (2) by adding at the end the following new paragraph:
    ``(5)(A)(i) Agencies shall select only Energy Star products when 
available when acquiring energy-using products. For product groups 
where Energy Star labels are not yet available, agencies shall select 
products that are in the upper 25 percent of energy efficiency as 
designated by FEMP. In the case of electric motors of 1 to 500 
horsepower, agencies shall select only premium efficiency motors that 
meet a standard designated by the Secretary, and shall replace (not 
rewind) failed motors with motors meeting such standard. The Secretary 
shall designate such standard within 90 days of enactment of paragraph, 
after considering recommendations by the National Electrical 
Manufacturers Association. The Secretary of Energy shall develop 
guidelines within 180 days after the enactment of this paragraph for 
exemptions to this section when equivalent products do not exist, are 
impractical, or do not meet the agency mission requirements.
    ``(ii) The Administrator of the General Services Administration and 
the Secretary of Defense (acting through the Defense Logistics Agency), 
with assistance from the Administrator of the Environmental Protection 
Agency and the Secretary of Energy, shall create clear catalogue 
listings that designate Energy Star products in both print and 
electronic formats. After any existing federal inventories are 
exhausted, Administrator of the General Services Administration and the 
Secretary of Defense (acting through the Defense Logistics Agency) 
shall only replace inventories with energy-using products that are 
Energy Star, products that are rated in the top 25 percent of energy 
efficiency, or products that are exempted as designated by FEMP and 
defined in clause (i).
    ``(iii) Agencies shall incorporate energy-efficient criteria 
consistent with Energy Star and other FEMP designated energy efficiency 
levels into all guide specifications and project specifications 
developed for new construction and renovation, as well as into product 
specification language developed for Basic Ordering Agreements, Blanket 
Purchasing Agreements, Government Wide Acquisition Contracts, and all 
other purchasing procedures.
    ``(iv) The legislative branch shall be subject to this subparagraph 
to the same extent and in the same manner as are the Federal agencies 
referred to in section 521(1).
    ``(B) Not later than 6 months after the date of the enactment of 
this paragraph, the Secretary of Energy shall establish guidelines 
defining the circumstances under which an agency shall not be required 
to comply with subparagraph (A). Such circumstances may include the 
absence of Energy Star products, systems, or designs that serve the 
purpose of the agency, issues relating to the compatibility of a 
product, system, or design with existing buildings or equipment, and 
excessive cost compared to other available and appropriate products, 
systems, or designs.
    ``(C) Subparagraph (A) shall apply to agency acquisitions occurring 
on or after October 1, 2002.''.
    (f) Metering.--Section 543 of such Act (42 U.S.C. 8254) is amended 
by adding at the end the following new subsection:
    ``(f) Metering.--(1) By October 1, 2004, all Federal buildings 
including buildings owned by the legislative branch and the Federal 
court system and other energy-using structures shall be metered or 
submetered in accordance with guidelines established by the Secretary 
under paragraph (2).
    ``(2) Not later than 6 months after the date of the enactment of 
this subsection, the Secretary, in consultation with the General 
Services Administration and representatives from the metering industry, 
energy services industry, national laboratories, colleges of higher 
education, and federal facilities energy managers, shall establish 
guidelines for agencies to carry out paragraph (1). Such guidelines 
shall take into consideration each of the following:
            ``(A) Cost.
            ``(B) Resources, including personnel, required to maintain, 
        interpret, and report on data so that the meters are 
        continually reviewed.
            ``(C) Energy management potential.
            ``(D) Energy savings.
            ``(E) Utility contract aggregation.
            ``(F) Savings from operations and maintenance.
    ``(3) A building shall be exempt from the requirement of this 
section to the extent that compliance is deemed impractical by the 
Secretary. A finding of impracticability shall be based on the same 
factors as identified in subsection (c) of this section.''.
    (g) Retention of Energy Savings.--Section 546 of such Act (42 
U.S.C. 8256) is amended by adding at the end the following new 
subsection:
    ``(e) Retention of Energy Savings.--An agency may retain any funds 
appropriated to that agency for energy expenditures, at buildings 
subject to the requirements of section 543(a) and (b), that are not 
made because of energy savings. Except as otherwise provided by law, 
such funds may be used only for energy efficiency or unconventional and 
renewable energy resources projects.''.
    (h) Reports.--Section 548 of such Act (42 U.S.C. 8258) is amended 
as follows:
            (1) In subsection (a)--
                    (A) by inserting ``in accordance with guidelines 
                established by and'' after ``to the Secretary,'';
                    (B) by striking ``and'' at the end of paragraph 
                (1);
                    (C) by striking the period at the end of paragraph 
                (2) and inserting a semicolon; and
                    (D) by adding at the end the following new 
                paragraph:
            ``(3) an energy emergency response plan developed by the 
        agency.''.
            (2) In subsection (b)--
                    (A) by striking ``and'' at the end of paragraph 
                (3);
                    (B) by striking the period at the end of paragraph 
                (4) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) all information transmitted to the Secretary under 
        subsection (a).''.
            (3) By amending subsection (c) to read as follows:
    ``(c) Agency Reports to Congress.--Each agency shall annually 
report to the Congress, as part of the agency's annual budget request, 
on all of the agency's activities implementing any Federal energy 
management requirement.''.
    (i) Inspector General Energy Audits.--Section 160(c) of the Energy 
Policy Act of 1992 (42 U.S.C. 8262f(c)) is amended by striking ``is 
encouraged to conduct periodic'' and inserting ``shall conduct 
periodic''.
    (j) Federal Energy Management Reviews.--Section 543 of the National 
Energy Conservation Policy Act (42 U.S.C. 8253) is amended by adding at 
the end the following:
    ``(g) Priority Response Reviews.--Each agency shall--
            ``(1) not later than 9 months after the date of the 
        enactment of this subsection, undertake a comprehensive review 
        of all practicable measures for--
                    ``(A) increasing energy and water conservation, and
                    ``(B) using renewable energy sources; and
            ``(2) not later than 180 days after completing the review, 
        develop plans to achieve not less than 50 percent of the 
        potential efficiency and renewable savings identified in the 
        review.
The agency shall implement such measures as soon thereafter as is 
practicable, consistent with compliance with the requirements of this 
section.''.

SEC. 122. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO FEDERAL 
              ENERGY SAVINGS PERFORMANCE CONTRACTS.

    (a) Cost Savings From Operation and Maintenance Efficiencies in 
Replacement Facilities.--Section 801(a) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287(a)) is amended by adding at the 
end the following new paragraph:
    ``(3)(A) In the case of an energy savings contract or energy 
savings performance contract providing for energy savings through the 
construction and operation of one or more buildings or facilities to 
replace one or more existing buildings or facilities, benefits 
ancillary to the purpose of such contract under paragraph (1) may 
include savings resulting from reduced costs of operation and 
maintenance at such replacement buildings or facilities when compared 
with costs of operation and maintenance at the buildings or facilities 
being replaced, established through a methodology set forth in the 
contract.
    ``(B) Notwithstanding paragraph (2)(B), aggregate annual payments 
by an agency under an energy savings contract or energy savings 
performance contract referred to in subparagraph (A) may take into 
account (through the procedures developed pursuant to this section) 
savings resulting from reduced costs of operation and maintenance as 
described in that subparagraph.''.
    (b) Expansion of Definition of Energy Savings to Include Water and 
Replacement Facilities.--
            (1) 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)(A) 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--
                    ``(i) the lease or purchase of operating equipment, 
                improvements, altered operation and maintenance, or 
                technical services;
                    ``(ii) the increased efficient use of existing 
                energy sources by solar and ground source geothermal 
                resources, cogeneration or heat recovery (including by 
                the use of a Stirling heat engine), excluding any 
                cogeneration process for other than a federally owned 
                building or buildings or other federally owned 
                facilities; or
                    ``(iii) the increased efficient use of existing 
                water sources.
            ``(B) The term `energy savings' also means, in the case of 
        a replacement building or facility described in section 
        801(a)(3), a reduction in the cost of energy, from a base cost 
        established through a methodology set forth in the contract, 
        that would otherwise be utilized in one or more existing 
        federally owned buildings or other federally owned facilities 
        by reason of the construction and operation of the replacement 
        building or facility.''.
            (2) 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--
                    ``(A) 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; or
                    ``(B) energy savings through the construction and 
                operation of one or more buildings or facilities to 
                replace one or more existing buildings or 
                facilities.''.
            (3) 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, 
                improvements in operation or maintenance efficiencies, 
                retrofit activities, or other related activities, not 
                at a Federal hydroelectric facility.''.
            (4) Conforming amendment.--Section 801(a)(2)(C) of the 
        National Energy Conservation Policy Act (42 U.S.C. 
        8287(a)(2)(C)) is amended by inserting ``or water'' after 
        ``financing energy''.
    (c) Extension of Authority.--Section 801(c) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287(c)) is repealed.
    (d) Contracting and Auditing.--Section 801(a)(2) of the National 
Energy Conservation Policy Act (42 U.S.C. 8287(a)(2)) is amended by 
adding at the end the following new subparagraph:
    ``(E) A Federal agency shall engage in contracting and auditing to 
implement energy savings performance contracts as necessary and 
appropriate to ensure compliance with the requirements of this Act, 
particularly the energy efficiency requirements of section 543.''.

SEC. 123. CLARIFICATION AND ENHANCEMENT OF AUTHORITY TO ENTER UTILITY 
              INCENTIVE PROGRAMS FOR ENERGY SAVINGS.

    Section 546(c) of the National Energy Conservation Policy Act (42 
U.S.C. 8256(c)) is amended as follows:
            (1) In paragraph (3) by adding at the end the following: 
        ``Such a utility incentive program may include a contract or 
        contract term designed to provide for cost-effective 
        electricity demand management, energy efficiency, or water 
        conservation.''.
            (2) By adding at the end of the following new paragraphs:
    ``(6) A utility incentive program may include a contract or 
contract term for a reduction in the energy, from a base cost 
established through a methodology set forth in such a contract, that 
would otherwise be utilized in one or more federally owned buildings or 
other federally owned facilities by reason of the construction or 
operation of one or more replacement buildings or facilities, as well 
as benefits ancillary to the purpose of such contract or contract term, 
including savings resulting from reduced costs of operation and 
maintenance at new or additional buildings or facilities when compared 
with the costs of operation and maintenance at existing buildings or 
facilities.
    ``(7) Federal agencies are encouraged to participate in State or 
regional demand side reduction programs, including those operated by 
wholesale market institutions such as independent system operators, 
regional transmission organizations and other entities. The 
availability of such programs, and the savings resulting from such 
participation, should be included in the evaluation of energy options 
for Federal facilities.''.

SEC. 124. FEDERAL CENTRAL AIR CONDITIONER AND HEAT PUMP EFFICIENCY.

    (a) Requirement.--Federal agencies shall be required to acquire 
central air conditioners and heat pumps that meet or exceed the 
standards established under subsection (b) or (c) in the case of all 
central air conditioners and heat pumps acquired after the date of 
enactment of this Act.
    (b) Standards.--The standards referred to in subsection (a) are the 
following:
            (1) For air-cooled air conditioners with cooling capacities 
        of less than 65,000 Btu/hour, a Seasonal Energy Efficiency 
        Ratio of 12.0.
            (2) For air-source heat pumps with cooling capacities less 
        than 65,000 Btu/hour, a Seasonal Energy Efficiency Ratio of 12 
        SEER, and a Heating Seasonal Performance Factor of 7.4.
    (c) Modified Standards.--The Secretary of Energy may establish, 
after appropriate notice and comment, revised standards providing for 
reduced energy consumption or increased energy efficiency of central 
air conditioners and heat pumps acquired by the Federal Government, but 
may not establish standards less rigorous than those established by 
subsection (b).
    (d) Definitions.--For purposes of this section, the terms ``Energy 
Efficiency Ratio'', ``Seasonal Energy Efficiency Ratio'', ``Heating 
Seasonal Performance Factor'', and ``Coefficient of Performance'' have 
the meanings used for those terms in Appendix M to Subpart B of Part 
430 of title 10 of the Code of Federal Regulations, as in effect on May 
24, 2001.
    (e) Exemptions.--An agency shall be exempt from the requirements of 
this section with respect to air conditioner or heat pump purchases for 
particular uses where the agency head determines that purchase of a air 
conditioner or heat pump for such use would be impractical. A finding 
of impracticability shall be based on whether--
            (1) the energy savings pay-back period for such purchase 
        would be less than 10 years;
            (2) space constraints or other technical factors would make 
        compliance with this section cost-prohibitive; or
            (3) in the case of the Departments of Defense and Energy, 
        compliance with this section would be inconsistent with the 
        proper discharge of national security functions.

SEC. 125. ADVANCED BUILDING EFFICIENCY TESTBED.

    (a) Establishment.--The Secretary of Energy shall establish an 
Advanced Building Efficiency Testbed program for the development, 
testing, and demonstration of advanced engineering systems, components, 
and materials to enable innovations in building technologies. The 
program shall evaluate government and industry building efficiency 
concepts, and demonstrate the ability of next generation buildings to 
support individual and organizational productivity and health as well 
as flexibility and technological change to improve environmental 
sustainability.
    (b) Participants.--The program established under subsection (a) 
shall be led by a university having demonstrated experience with the 
application of intelligent workplaces and advanced building systems in 
improving the quality of built environments. Such university shall also 
have the ability to combine the expertise from more than 12 academic 
fields, including electrical and computer engineering, computer 
science, architecture, urban design, and environmental and mechanical 
engineering. Such university shall partner with other universities and 
entities who have established programs and the capability of advancing 
innovative building efficiency technologies.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy to carry out this section 
$18,000,000 for fiscal year 2002, to remain available until expended, 
of which $6,000,000 shall be provided to the lead university described 
in subsection (b), and the remainder shall be provided equally to each 
of the other participants referred to in subsection (b).

SEC. 126. USE OF INTERVAL DATA IN FEDERAL BUILDINGS.

    Section 543 of the National Energy Conservation Policy Act (42 
U.S.C. 8253) is amended by adding at the end the following new 
subsection:
    ``(h) Use of Interval Data in Federal Buildings.--Not later than 
January 1, 2003, each agency shall utilize, to the maximum extent 
practicable, for the purposes of efficient use of energy and reduction 
in the cost of electricity consumed in its Federal buildings, interval 
consumption data that measure on a real time or daily basis consumption 
of electricity in its Federal buildings. To meet the requirements of 
this subsection each agency shall prepare and submit at the earliest 
opportunity pursuant to section 548(a) to the Secretary, a plan 
describing how the agency intends to meet such requirements, including 
how it will designate personnel primarily responsible for achieving 
such requirements, and otherwise implement this subsection.''.

SEC. 127. 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. 128. CAPITOL COMPLEX.

    (a) Energy Infrastructure.--The Architect of the Capitol, building 
on the Master Plan Study completed in July 2000, shall commission a 
study to evaluate the energy infrastructure of the Capital Complex to 
determine how the infrastructure could be augmented to become more 
energy efficient, using unconventional and renewable energy resources, 
in a way that would enable the Complex to have reliable utility service 
in the event of power fluctuations, shortages, or outages.
    (b) Authorization.--There is authorized to be appropriated to the 
Architect of the Capitol to carry out this section, not more than 
$2,000,000 for fiscal years after the enactment of this Act.

                       Subtitle C--State Programs

SEC. 131. AMENDMENTS TO 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 inserting at 
the end the following new subsection:
    ``(g) The Secretary shall, at least once every three years, invite 
the Governor of each State to review and, if necessary, revise the 
energy conservation plan of such 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 
carried out in pursuit of common energy conservation goals.''.
    (b) State Energy Efficiency Goals.--Section 364 of the Energy 
Policy and Conservation Act (42 U.S.C. 6324) is amended by inserting 
``Each State energy conservation plan with respect to which assistance 
is made available under this part on or after the date of the enactment 
of Energy Advancement and Conservation Act of 2001, 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 the calendar year 
2010 as compared to the calendar year 1990, and may contain interim 
goals.'' after ``contain interim goals.''.
    (c) Authorization of Appropriations.--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 ``$75,000,000 for fiscal year 2002, $100,000,000 for 
fiscal years 2003 and 2004, $125,000,000 for fiscal year 2005''.

SEC. 132. REAUTHORIZATION OF ENERGY CONSERVATION PROGRAM FOR SCHOOLS 
              AND HOSPITALS.

    Section 397 of the Energy Policy and Conservation Act (42 U.S.C. 
6371f) is amended by striking ``2003'' and inserting ``2010''.

SEC. 133. AMENDMENTS TO WEATHERIZATION ASSISTANCE PROGRAM.

    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 ``$273,000,000 for 
fiscal year 2002, $325,000,000 for fiscal year 2003, $400,000,000 for 
fiscal year 2004, and $500,000,000 for fiscal year 2005''.

SEC. 134. LIHEAP.

    (a) Authorization of Appropriations.--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 2001 through 2005.''.
    (b) GAO Study.--The Comptroller General of the United States shall 
conduct a study to determine--
            (1) the extent to which Low-Income Home Energy Assistance 
        (LIHEAP) and other government energy subsidies paid to 
        consumers discourage energy conservation and energy efficiency 
        investments; and
            (2) the extent to which the goals of conservation and 
        assistance for low income households could be simultaneously 
        achieved through cash income supplements that do not 
        specifically target energy, thereby maintaining incentives for 
        wise use of expensive forms of energy, or through other means.

SEC. 135. HIGH PERFORMANCE PUBLIC BUILDINGS.

    (a) Program Establishment and Administration.--
            (1) Establishment.--There is established in the Department 
        of Energy the High Performance Public Buildings Program (in 
        this section referred to as the ``Program'').
            (2) In general.--The Secretary of Energy may, through the 
        Program, make grants--
                    (A) to assist units of local government in the 
                production, through construction or renovation of 
                buildings and facilities they own and operate, of high 
                performance public buildings and facilities that are 
                healthful, productive, energy efficient, and 
                environmentally sound;
                    (B) to State energy offices to administer the 
                program of assistance to units of local government 
                pursuant to this section; and
                    (C) to State energy offices to promote 
                participation by units of local government in the 
                Program.
            (3) Grants to assist units of local government.--Grants 
        under paragraph (2)(A) for new public buildings shall be used 
        to achieve energy efficiency performance that reduces energy 
        use at least 30 percent below that of a public building 
        constructed in compliance with standards prescribed in Chapter 
        8 of the 2000 International Energy Conservation Code, or a 
        similar State code intended to achieve substantially equivalent 
        results. Grants under paragraph (2)(A) for existing public 
        buildings shall be used to achieve energy efficiency 
        performance that reduces energy use below the public building 
        baseline consumption, assuming a 3-year, weather-normalized 
        average for calculating such baseline. Grants under paragraph 
        (2)(A) shall be made to units of local government that have--
                    (A) demonstrated a need for such grants in order to 
                respond appropriately to increasing population or to 
                make major investments in renovation of public 
                buildings; and
                    (B) made a commitment to use the grant funds to 
                develop high performance public buildings in accordance 
                with a plan developed and approved pursuant to 
                paragraph (5)(A).
            (4) Other grants.--
                    (A) Grants for administration.--Grants under 
                paragraph (2)(B) shall be used to evaluate compliance 
                by units of local government with the requirements of 
                this section, and in addition may be used for--
                            (i) distributing information and materials 
                        to clearly define and promote the development 
                        of high performance public buildings for both 
                        new and existing facilities;
                            (ii) organizing and conducting programs for 
                        local government personnel, architects, 
                        engineers, and others to advance the concepts 
                        of high performance public buildings;
                            (iii) obtaining technical services and 
                        assistance in planning and designing high 
                        performance public buildings; and
                            (iv) collecting and monitoring data and 
                        information pertaining to the high performance 
                        public building projects.
                    (B) Grants to promote participation.--Grants under 
                paragraph (2)(C) may be used for promotional and 
                marketing activities, including facilitating private 
                and public financing, promoting the use of energy 
                service companies, working with public building users, 
                and communities, and coordinating public benefit 
                programs.
            (5) Implementation.--
                    (A) Plans.--A grant under paragraph (2)(A) shall be 
                provided only to a unit of local government that, in 
                consultation with its State office of energy, has 
                developed a plan that the State energy office 
                determines to be feasible and appropriate in order to 
                achieve the purposes for which such grants are made.
                    (B) Supplementing grant funds.--State energy 
                offices shall encourage qualifying units of local 
                government to supplement their grant funds with funds 
                from other sources in the implementation of their 
                plans.
    (b) Allocation of Funds.--
            (1) In general.--Except as provided in paragraph (3), funds 
        appropriated to carry out this section shall be provided to 
        State energy offices.
            (2) Purposes.--Except as provided in paragraph (3), funds 
        appropriated to carry out this section shall be allocated as 
        follows:
                    (A) Seventy percent shall be used to make grants 
                under subsection (a)(2)(A).
                    (B) Fifteen percent shall be used to make grants 
                under subsection (a)(2)(B).
                    (C) Fifteen percent shall be used to make grants 
                under subsection (a)(2)(C).
            (3) Other funds.--The Secretary of Energy may retain not to 
        exceed $300,000 per year from amounts appropriated under 
        subsection (c) 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 public buildings.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy to carry out this section such 
sums as may be necessary for each of the fiscal years 2002 through 
2010.
    (d) Report to Congress.--The Secretary of Energy shall conduct a 
biennial review of State actions implementing this section, and the 
Secretary shall report to Congress on the results of such reviews. In 
conducting such reviews, the Secretary shall assess the effectiveness 
of the calculation procedures used by the States in establishing 
eligibility of units of local government for funding under this 
section, and may assess other aspects of the State program to determine 
whether they have been effectively implemented.
    (e) Definitions.--For purposes of this section:
            (1) High performance public building.--The term ``high 
        performance public building'' means a public building which, in 
        its design, construction, operation, and maintenance, maximizes 
        use of unconventional and renewable energy resources and energy 
        efficiency practices, is cost-effective on a life cycle basis, 
        uses affordable, environmentally preferable, durable materials, 
        enhances indoor environmental quality, protects and conserves 
        water, and optimizes site potential.
            (2) Renewable energy.--The term ``renewable energy'' means 
        energy produced by solar, wind, geothermal, hydroelectric, or 
        biomass power.
            (3) Unconventional and renewable energy resources.--The 
        term ``unconventional and renewable energy resources'' means 
        renewable energy, hydrogen, fuel cells, cogeneration, combined 
        heat and power, heat recovery (including by use of a Stirling 
        heat engine), and distributed generation.

          Subtitle D--Energy Efficiency for Consumer Products

SEC. 141. ENERGY STAR PROGRAM.

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

``SEC. 324A. ENERGY STAR PROGRAM.

    ``(a) In General.--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; and
            ``(3) preserve the integrity of the Energy Star label.
For the purposes of carrying out this section, there is authorized to 
be appropriated for fiscal years 2002 through 2006 such sums as may be 
necessary, to remain available until expended.
    ``(b) Study of Certain Products and Buildings.--Within 180 days 
after the date of enactment of this section, the Secretary and the 
Administrator, consistent with the terms of agreements between the two 
agencies (including existing agreements with respect to which agency 
shall handle a particular product or building), shall determine whether 
the Energy Star label should be extended to additional products and 
buildings, including the following:
            ``(1) Air cleaners.
            ``(2) Ceiling fans.
            ``(3) Light commercial heating and cooling products.
            ``(4) Reach-in refrigerators and freezers.
            ``(5) Telephony.
            ``(6) Vending machines.
            ``(7) Residential water heaters.
            ``(8) Refrigerated beverage merchandisers.
            ``(9) Commercial ice makers.
            ``(10) School buildings.
            ``(11) Retail buildings.
            ``(12) Health care facilities.
            ``(13) Homes.
            ``(14) Hotels and other commercial lodging facilities.
            ``(15) Restaurants and other food service facilities.
            ``(16) Solar water heaters.
            ``(17) Building-integrated photovoltaic systems.
            ``(18) Reflective pigment coatings.
            ``(19) Windows.
            ``(20) Boilers.
            ``(21) Devices to extend the life of motor vehicle oil.
    ``(c) Cool Roofing.--In determining whether the Energy Star label 
should be extended to roofing products, the Secretary and the 
Administrator shall work with the roofing products industry to 
determine the appropriate solar reflective index of roofing 
products.''.
    (b) Table of Contents Amendment.--The table of contents of the 
Energy Policy and Conservation Act is amended by inserting after the 
item relating to section 324 the following new item:

``Sec. 324A. Energy Star program.''.

SEC. 142. LABELING OF ENERGY EFFICIENT APPLIANCES.

    (a) Study.--Section 324(e) of the Energy Policy and Conservation 
Act (42 U.S.C. 6294(e)) is amended as follows:
            (1) By inserting ``(1)'' before ``The Secretary, in 
        consultation''.
            (2) By redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively.
            (3) By adding the following new paragraph at the end:
    ``(2) The Secretary shall make recommendations to the Commission 
within 180 days of the date of enactment of this paragraph regarding 
labeling of consumer products that are not covered products in 
accordance with this section, where such labeling is likely to assist 
consumers in making purchasing decisions and is technologically and 
economically feasible.''.
    (b) Noncovered Products.--Section 324(a)(2) of the Energy Policy 
and Conservation Act (42 U.S.C. 6294(a)(2)) is amended by adding the 
following at the end:
    ``(F) Not later than one year after the date of enactment of this 
subparagraph, the Commission shall initiate a rulemaking to prescribe 
labeling rules under this section applicable to consumer products that 
are not covered products if it determines that labeling of such 
products is likely to assist consumers in making purchasing decisions 
and is technologically and economically feasible.
    ``(G) Not later than three 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 label that 
would improve the effectiveness of the label. Such rulemaking shall be 
completed within 15 months of the date of enactment of this 
subparagraph.''.

SEC. 143. APPLIANCE STANDARDS.

    (a) Standards for Household Appliances in Standby Mode.--(1) 
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 by Household 
Appliances.--(1) In this subsection:
            ``(A) The term `household appliance' means any device that 
        uses household electric current, operates in a standby mode, 
        and is identified by the Secretary as a major consumer of 
        electricity in standby mode, except digital televisions, 
        digital set top boxes, digital video recorders, any product 
        recognized under the Energy Star program, any product that was 
        on the date of enactment of this Act subject to an energy 
        conservation standard under this section, and any product 
        regarding which the Secretary finds that the expected 
        additional cost to the consumer of purchasing such product as a 
        result of complying with a standard established under this 
        section is not economically justified within the meaning of 
        subsection (o).
            ``(B) The term `standby mode' means a mode in which a 
        household appliance consumes the least amount of electric 
        energy that the household appliance is capable of consuming 
        without being completely switched off (provided that, the 
        amount of electric energy consumed in such mode is 
        substantially less than the amount the household appliance 
        would consume in its normal operational mode).
            ``(C) The term `major consumer of electricity in standby 
        mode' means a product for which a standard prescribed under 
        this section would result in substantial energy savings as 
        compared to energy savings achieved or expected to be achieved 
        by standards established by the Secretary under subsections (o) 
        and (p) of this section for products that were, at the time of 
        enactment of this subsection, covered products under this 
        section.
    ``(2)(A) Except as provided in subparagraph (B), a household 
appliance that is manufactured in, or imported for sale in, the United 
States on or after the date that is 2 years after the date of enactment 
of this subsection shall not consume in standby mode more than 1 watt.
    ``(B) In the case of analog televisions, the Secretary shall 
prescribe, on or after the date that is 2 years after the date of 
enactment of this subsection, in accordance with subsections (o) and 
(p) of section 325, an energy conservation standard that is 
technologically feasible and economically justified under section 
325(o)(2)(A) (in lieu of the 1 watt standard under subparagraph (A)).
    ``(3)(A) A manufacturer or importer of a household appliance may 
submit to the Secretary an application for an exemption of the 
household appliance from the standard under paragraph (2).
    ``(B) The Secretary shall grant an exemption for a household 
appliance for which an application is made under subparagraph (A) if 
the applicant provides evidence showing that, and the Secretary 
determines that--
            ``(i) it is not technically feasible to modify the 
        household appliance to enable the household appliance to meet 
        the standard;
            ``(ii) the standard is incompatible with an energy 
        efficiency standard applicable to the household appliance under 
        another subsection; or
            ``(iii) the cost of electricity that a typical consumer 
        would save in operating the household appliance meeting the 
        standard would not equal the increase in the price of the 
        household appliance that would be attributable to the 
        modifications that would be necessary to enable the household 
        appliance to meet the standard by the earlier of--
                    ``(I) the date that is 7 years after the date of 
                purchase of the household appliance; or
                    ``(II) the end of the useful life of the household 
                appliance.
    ``(C) If the Secretary determines that it is not technically 
feasible to modify a household appliance to meet the standard under 
paragraph (2), the Secretary shall establish a different standard for 
the household appliance in accordance with the criteria under 
subsection (l).
    ``(4)(A) Not later than 1 year after the date of enactment of this 
subsection, the Secretary shall establish a test procedure for 
determining the amount of consumption of power by a household appliance 
operating in standby mode.
    ``(B) In establishing the test procedure, the Secretary shall 
consider--
            ``(i) international test procedures under development;
            ``(ii) test procedures used in connection with the Energy 
        Star program; and
            ``(iii) test procedures used for measuring power 
        consumption in standby mode in other countries.
    ``(5) Further reduction of standby power consumption.--The 
Secretary shall provide technical assistance to manufacturers in 
achieving further reductions in standby mode electric energy 
consumption by household appliances.
    ``(v) Standby Mode Electric Energy Consumption by Digital 
Televisions, Digital Set Top Boxes, and Digital Video Recorders.--The 
Secretary shall initiate on January 1, 2007 a rulemaking to prescribe, 
in accordance with subsections (o) and (p), an energy conservation 
standard of standby mode electric energy consumption by digital 
television sets, digital set top boxes, and digital video recorders. 
The Secretary shall issue a final rule prescribing such standards not 
later than 18 months thereafter. In determining whether a standard 
under this section is technologically feasible and economically 
justified under section 325(o)(2)(A), the Secretary shall consider the 
potential effects on market penetration by digital products covered 
under this section, and shall consider any recommendations by the FCC 
regarding such effects.''.
            (2) Section 325(o)(3) of the Energy Policy and Conservation 
        Act (42 U.S.C. 6295(n)(1)) is amended by inserting at the end 
        of the paragraph the following: ``Notwithstanding any provision 
        of this part, the Secretary shall not amend a standard 
        established under subsection (u) or (v) of this section.''.
    (b) Standards for Noncovered Products.--Section 325(m) of the 
Energy Policy and Conservation Act (42 U.S.C. 6295(m)) is amended as 
follows:
            (1) Inserting ``(1)'' before ``After''.
            (2) Inserting the following at the end:
    (2) ``Not later than one year after the date of enactment of the 
Energy Advancement and Conservation Act of 2001, the Secretary shall 
conduct a rulemaking to determine whether consumer products not 
classified as a covered product under section 322(a)(1) through (18) 
meet the criteria of section 322(b)(1) and is a major consumer of 
electricity. If the Secretary finds that a consumer product not 
classified as a covered product meets the criteria of section 
322(b)(1), he shall prescribe, in accordance with subsections (o) and 
(p), an energy conservation standard for such consumer product, if such 
standard is reasonably probable to be technologically feasible and 
economically justified within the meaning of subsection (o)(2)(A). As 
used in this paragraph, the term `major consumer of electricity' means 
a product for which a standard prescribed under this section would 
result in substantial aggregate energy savings as compared to energy 
savings achieved or expected to be achieved by standards established by 
the Secretary under paragraphs (o) and (p) of this section for products 
that were, at the time of enactment of this paragraph, covered products 
under this section.''.
    (c) 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 the following new subsection after subsection (b):
    ``(c) HVAC Maintenance.--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, develop and implement a public education 
campaign to educate homeowners and small business owners concerning the 
energy savings resulting from regularly scheduled maintenance of air 
conditioning, heating, and ventilating systems. In developing and 
implementing this campaign, the Secretary shall consider support by the 
Department of public education programs sponsored by trade and 
professional and energy efficiency organizations. The public service 
information shall provide sufficient information to allow consumers to 
make informed choices from among professional, licensed (where State or 
local licensing is required) contractors. There are authorized to be 
appropriated to carry out this subsection $5,000,000 for fiscal years 
2002 and 2003 in addition to amounts otherwise appropriated in this 
part.''.
    (d) Efficiency Standards for Furnace Fans, Ceiling Fans, and Cold 
Drink Vending Machines..--
            (1) Definitions.--Section 321 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6291) is amended by adding the 
        following at the end thereof:
            ``(32) The term `residential furnace fan' means an electric 
        fan installed as part of a furnace for purposes of circulating 
        air through the system air filters, the heat exchangers or 
        heating elements of the furnace, and the duct work.
            ``(33) The terms `residential central air conditioner fan' 
        and `heat pump circulation fan' mean an electric fan installed 
        as part of a central air conditioner or heat pump for purposes 
        of circulating air through the system air filters, the heat 
        exchangers of the air conditioner or heat pump, and the duct 
        work.
            ``(34) The term `suspended ceiling fan' means a fan 
        intended to be mounted to a ceiling outlet box, ceiling 
        building structure, or to a vertical rod suspended from the 
        ceiling, and which as blades which rotate below the ceiling and 
        consists of an electric motor, fan blades (which rotate in a 
        direction parallel to the floor), an optional lighting kit, and 
        one or more electrical controls (integral or remote) governing 
        fan speed and lighting operation.
            ``(35) The term `refrigerated bottled or canned beverage 
        vending machine' means a machine that cools bottled or canned 
        beverages and dispenses them upon payment.''.
            (2) Testing Requirements.--Section 323 of the Energy Policy 
        and Conservation Act (42 U.S.C. 6293) is amended by adding the 
        following at the end thereof:
    ``(f) Additional Consumer Products.--The Secretary shall within 18 
months after the date of enactment of this subsection prescribe testing 
requirements for residential furnace fans, residential central air 
conditioner fans, heat pump circulation fans, suspended ceiling fans, 
and refrigerated bottled or canned beverage vending machines. Such 
testing requirements shall be based on existing test procedures used in 
industry to the extent practical and reasonable. In the case of 
residential furnace fans, residential central air conditioner fans, 
heat pump circulation fans, and 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.''.
            (3) Standards for Additional Consumer Products.--Section 
        325 of the Energy Policy and Conservation Act (42 U.S.C. 6295) 
        is amended by adding the following at the end thereof:
    ``(w) Residential Furnace Fans, Central Air and Heat Pump 
Circulation Fans, Suspended Ceiling Fans, and Vending Machines.--(1) 
The Secretary shall, within 18 months after the date of enactment of 
this subsection, assess the current and projected future market for 
residential furnace fans, residential central air conditioner and heat 
pump circulation fans, suspended ceiling fans, and refrigerated bottled 
or canned beverage vending machines. This assessment shall include an 
examination of the types of products sold, the number of products in 
use, annual sales of these products, energy used by these products 
sold, the number of products in use, annual sales of these products, 
energy used by these products, estimates of the potential energy 
savings from specific technical improvements to these products, and an 
examination of the cost-effectiveness of these improvements. Prior to 
the end of this time period, the Secretary shall hold an initial 
scoping workshop to discuss and receive input to plans for developing 
minimum efficiency standards for these products.
    ``(2) 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 
residential furnace fans, residential central air conditioner and heat 
pump circulation fans, suspended ceiling fans, and refrigerated bottled 
or canned beverage vending machines. In establishing these standards, 
the Secretary shall use the criteria and procedures contained in 
subsections (l) and (m). Any standard prescribed under this section 
shall apply to products manufactured 36 months after the date such rule 
is published.''.
            (4) Labeling.--Section 324(a) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6294(a)) is amended by adding the 
        following at the end thereof:
    ``(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 section 325(w), prescribe, by rule, 
labeling requirements for such products. These requirements shall take 
effect on the same date as the standards prescribed pursuant to section 
325(w).''.
            (5) Covered Products.--Section 322(a) of the Energy Policy 
        and Conservation Act (42 U.S.C. 6292(a)) is amended by 
        redesignating paragraph (19) as paragraph (20) and by inserting 
        after paragraph (18) the following:
            ``(19) Beginning on the effective date for standards 
        established pursuant to subsection (v) of section 325, each 
        product referred to in such subsection (v).''.

                 Subtitle E--Energy Efficient Vehicles

SEC. 151. HIGH OCCUPANCY VEHICLE EXCEPTION.

    (a) In General.--Notwithstanding section 102(a)(1) of title 23, 
United States Code, a State may, for the purpose of promoting energy 
conservation, permit a vehicle with fewer than 2 occupants to operate 
in high occupancy vehicle lanes if such vehicle is a hybrid vehicle or 
is fueled by an alternative fuel.
    (b) Hybrid Vehicle Defined.--In this section, the term ``hybrid 
vehicle'' means a motor vehicle--
            (1) which draws propulsion energy from onboard sources of 
        stored energy which are both--
                    (A) an internal combustion or heat engine using 
                combustible fuel; and
                    (B) a rechargeable energy storage system;
            (2) which, in the case of a passenger automobile or light 
        truck--
                    (A) for 2002 and later model vehicles, has received 
                a certificate of conformity under section 206 of the 
                Clean Air Act (42 U.S.C. 7525) and meets or exceeds the 
                equivalent qualifying California low emission vehicle 
                standard under section 243(e)(2) of the Clean Air Act 
                (42 U.S.C. 7583(e)(2)) for that make and model year; 
                and
                    (B) for 2004 and later model vehicles, has received 
                a certificate that such vehicle meets the 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 (42 
                U.S.C. 7521(i)) for that make and model year vehicle; 
                and
            (3) which is made by a manufacturer.
    (c) Alternative Fuel Defined.--In this section, the term 
``alternative fuel'' has the meaning such term has under section 301(2) 
of the Energy Policy Act of 1992 (42 U.S.C. 13211(2)).

SEC. 152. RAILROAD EFFICIENCY.

    (a) Locomotive Technology Demonstration.--The Secretary of Energy 
shall establish a public-private research partnership with railroad 
carriers, locomotive manufacturers, and a world-class research and test 
center dedicated to the advancement of railroad technology, efficiency, 
and safety that is owned by the Federal Railroad Administration and 
operated in the private sector, for the development and demonstration 
of locomotive technologies that increase fuel economy and reduce 
emissions.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy $25,000,000 for fiscal year 
2002, $30,000,000 for fiscal year 2003, and $35,000,000 for fiscal year 
2004 for carrying out this section.

SEC. 153. BIODIESEL FUEL USE CREDITS.

    Section 312(c) of the Energy Policy Act of 1992 (42 U.S.C. 
13220(c)) is amended--
            (1) by striking ``Not'' in the subsection heading; and
            (2) by striking ``not''.

SEC. 154. MOBILE TO STATIONARY SOURCE TRADING.

    Within 90 days after the enactment of this section, the 
Administrator of the Environmental Protection Agency is directed to 
commence a review of the Agency's policies regarding the use of mobile 
to stationary source trading of emission credits under the Clean Air 
Act to determine whether such trading can provide both nonattainment 
and attainment areas with additional flexibility in achieving and 
maintaining healthy air quality and increasing use of alternative fuel 
and advanced technology vehicles, thereby reducing United States 
dependence on foreign oil.

                      Subtitle F--Other Provisions

SEC. 161. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO EMERGING 
              ENERGY TECHNOLOGY.

    (a) In General.--Each Federal agency shall carry out a review of 
its regulations and standards to determine those that act as a barrier 
to market entry for emerging energy-efficient technologies, including, 
but not limited to, fuel cells, combined heat and power, and 
distributed generation (including small-scale renewable energy).
    (b) Report to Congress.--No later than 18 months after the date of 
enactment of this section, each agency shall provide a report to 
Congress and the President detailing all regulatory barriers to 
emerging energy-efficient technologies, along with actions the agency 
intends to take, or has taken, to remove such barriers.
    (c) Periodic Review.--Each agency shall subsequently review its 
regulations and standards in the manner specified in this section no 
less frequently than every 5 years, and report their findings to 
Congress and the President. Such reviews shall include a detailed 
analysis of all agency actions taken to remove existing barriers to 
emerging energy technologies.

SEC. 162. ADVANCED IDLE ELIMINATION SYSTEMS.

    (a) Definitions.--
            (1) Advanced idle elimination system.--The term ``advanced 
        idle elimination system'' means a device or system of devices 
        that is installed at a truck stop or other location (for 
        example, a loading, unloading, or transfer facility) where 
        vehicles (such as trucks, trains, buses, boats, automobiles, 
        and recreational vehicles) are parked and that is designed to 
        provide to the vehicle the services (such as heat, air 
        conditioning, and electricity) that would otherwise require the 
        operation of the auxiliary or drive train engine or both while 
        the vehicle is stationary and parked.
            (2) Extended idling.--The term ``extended idling'' means 
        the idling of a motor vehicle for a period greater than 60 
        minutes.
    (b) Recognition of Benefits of Advanced Idle Elimination Systems.--
Within 90 days after the date of enactment of this subsection, the 
Administrator of the Environmental Protection Agency is directed to 
commence a review of the Agency's mobile source air emissions models 
used under the Clean Air Act to determine whether such models 
accurately reflect the emissions resulting from extended idling of 
heavy-duty trucks and other vehicles and engines, and shall update 
those models as the Administrator deems appropriate. Additionally, 
within 90-days after the date of enactment of this subsection, the 
Administrator shall commence a review as to the appropriate emissions 
reductions credit that should be allotted under the Clean Air Act for 
the use of advanced idle elimination systems, and whether such credits 
should be subject to an emissions trading system, and shall revise 
Agency regulations and guidance as the Administrator deems appropriate.

SEC. 163. STUDY OF BENEFITS AND FEASIBILITY OF OIL BYPASS FILTRATION 
              TECHNOLOGY.

    (a) Study.--The Secretary of Energy and the Administrator of the 
Environmental Protection Agency shall jointly conduct a study of oil 
bypass filtration technology in motor vehicle engines. The study shall 
analyze and quantify the potential benefits of such technology in terms 
of reduced demand for oil and the potential environmental benefits of 
the technology in terms of reduced waste and air pollution. The 
Secretary and the Administrator shall also examine the feasibility of 
using such technology in the Federal motor vehicle fleet.
    (b) Report.--Not later than 6 months after the enactment of this 
Act, the Secretary of Energy and the Administrator of the Environmental 
Protection Agency shall jointly submit a report containing the results 
of the study conducted under subsection (a) to the Committee on Energy 
and Commerce of the United States House of Representatives and to the 
Committee on Energy and Natural Resources of the United States Senate.

SEC. 164. GAS FLARE STUDY.

    (a) Study.--The Secretary of Energy shall conduct a study of the 
economic feasibility of installing small cogeneration facilities 
utilizing excess gas flares at petrochemical facilities to provide 
reduced electricity costs to customers living within 3 miles of the 
petrochemical facilities. The Secretary shall solicit public comment to 
assist in preparing the report required under subsection (b).
    (b) Report.--Not later than 18 months after the date of the 
enactment of this Act, the Secretary of Energy shall transmit a report 
to the Congress on the results of the study conducted under subsection 
(a).

SEC. 165. TELECOMMUTING STUDY.

    (a) Study Required.--The Secretary, in consultation with 
Commission, and the NTIA, shall conduct a study of the energy 
conservation implications of the widespread adoption of telecommuting 
in the United States.
    (b) Required Subjects of Study.--The study required by subsection 
(a) shall analyze the following subjects in relation to the energy 
saving potential of telecommuting:
            (1) Reductions of energy use and energy costs in commuting 
        and regular office heating, cooling, and other operations.
            (2) Other energy reductions accomplished by telecommuting.
            (3) Existing regulatory barriers that hamper telecommuting, 
        including barriers to broadband telecommunications services 
        deployment.
            (4) Collateral benefits to the environment, family life, 
        and other values.
    (c) Report Required.--The Secretary shall submit to the President 
and the Congress a report on the study required by this section not 
later than 6 months after the date of enactment of this Act. Such 
report shall include a description of the results of the analysis of 
each of the subject described in subsection (b).
    (d) Definitions.--As used in this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (2) Commission.--The term ``Commission'' means the Federal 
        Communications Commission.
            (3) NTIA.--The term ``NTIA'' means the National 
        Telecommunications and Information Administration of the 
        Department of Commerce.
            (4) Telecommuting.--The term ``telecommuting'' means the 
        performance of work functions using communications 
        technologies, thereby eliminating or substantially reducing the 
        need to commute to and from traditional worksites.

                   TITLE II--AUTOMOBILE FUEL ECONOMY

SEC. 201. AVERAGE FUEL ECONOMY STANDARDS FOR NONPASSENGER AUTOMOBILES.

    Section 32902(a) of title 49, United States Code, is amended--
            (1) by inserting ``(1)'' after ``Nonpassenger 
        Automobiles.--''; and
            (2) by adding at the end the following:
    ``(2) The Secretary shall prescribe under paragraph (1) average 
fuel economy standards for automobiles (except passenger automobiles) 
manufactured in model years 2004 through 2010 that are calculated to 
ensure that the aggregate amount of gasoline projected to be used in 
those model years by automobiles to which the standards apply is at 
least 5 billion gallons less than the aggregate amount of gasoline that 
would be used in those model years by such automobiles if they achieved 
only the fuel economy required under the average fuel economy standard 
that applies under this subsection to automobiles (except passenger 
automobiles) manufactured in model year 2002.''.

SEC. 202. CONSIDERATION OF PRESCRIBING DIFFERENT AVERAGE FUEL ECONOMY 
              STANDARDS FOR NONPASSENGER AUTOMOBILES.

    (a) In General.--The Secretary of Transportation shall, in 
prescribing average fuel economy standards under section 32902(a) of 
title 49, United States Code, for automobiles (except passenger 
automobiles) manufactured in model year 2004, consider the potential 
benefits of--
            (1) establishing a weight-based system for automobiles, 
        that is based on the inertia weight, curb weight, gross vehicle 
        weight rating, or another appropriate measure of such 
        automobiles; and
            (2) prescribing different fuel economy standards for 
        automobiles that are subject to the weight-based system.
    (b) Specific Considerations.--In implementing this section the 
Secretary--
            (1) shall consider any recommendations made in the National 
        Academy of Sciences study completed pursuant to the Department 
        of Transportation and Related Agencies Appropriations Act, 2000 
        (Public Law 106-346; 114 Stat. 2763 et seq.); and
            (2) shall evaluate the merits of any weight-based system in 
        terms of motor vehicle safety, energy conservation, and 
        competitiveness of and employment in the United States 
        automotive sector, and if a weight-based system is established 
        by the Secretary a manufacturer may trade credits between or 
        among the automobiles (except passenger automobiles) 
        manufactured by the manufacturer.

SEC. 203. DUAL FUELED AUTOMOBILES.

    (a) Purposes.--The purposes of this section are--
            (1) to extend the manufacturing incentives for dual fueled 
        automobiles, as set forth in subsections (b) and (d) of section 
        32905 of title 49, United States Code, through the 2008 model 
        year; and
            (2) to similarly extend the limitation on the maximum 
        average fuel economy increase for such automobiles, as set 
        forth in subsection (a)(1) of section 32906 of title 49, United 
        States Code.
    (b) Amendments.--
            (1) Manufacturing incentives.--Section 32905 of title 49, 
        United States Code, is amended as follows:
                    (A) Subsections (b) and (d) are each amended by 
                striking ``model years 1993-2004'' and inserting 
                ``model years 1993-2008''.
                    (B) Subsection (f) is amended by striking ``Not 
                later than December 31, 2001, the Secretary'' and 
                inserting ``Not later than December 31, 2005, the 
                Secretary''.
                    (C) Subsection (f)(1) is amended by striking 
                ``model year 2004'' and inserting ``model year 2008''.
                    (D) Subsection (g) is amended by striking ``Not 
                later than September 30, 2000'' and inserting ``Not 
                later than September 30, 2004''.
            (2) Maximum fuel economy increase.--Subsection (a)(1) of 
        section 32906 of title 49, United States Code, is amended as 
        follows:
                    (A) Subparagraph (A) is amended by striking ``the 
                model years 1993-2004'' and inserting ``model years 
                1993-2008''.
                    (B) Subparagraph (B) is amended by striking ``the 
                model years 2005-2008'' and inserting ``model years 
                2009-2012''.

SEC. 204. FUEL ECONOMY 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. 205. HYBRID VEHICLES AND ALTERNATIVE VEHICLES.

    (a) In General.--Section 303(b)(1) of the Energy Policy Act of 1992 
is amended by adding the following at the end: ``Of the total number of 
vehicles acquired by a Federal fleet in fiscal years 2004 and 2005, at 
least 5 percent of the vehicles in addition to those covered by the 
preceding sentence shall be alternative fueled vehicles or hybrid 
vehicles and in fiscal year 2006 and thereafter at least 10 percent of 
the vehicles in addition to those covered by the preceding sentence 
shall be alternative fueled vehicles or hybrid vehicles.''.
    (b) Definition.--Section 301 of such Act is amended by striking 
``and'' at the end of paragraph (13), by striking the period at the end 
of paragraph (14) and inserting ``; and'' and by adding at the end the 
following:
    ``(15) The term `hybrid vehicle' means a motor vehicle which draws 
propulsion energy from onboard sources of stored energy which are 
both--
            ``(A) an internal combustion or heat engine using 
        combustible fuel; and
            ``(B) a rechargeable energy storage system.''.

SEC. 206. FEDERAL FLEET PETROLEUM-BASED NONALTERNATIVE FUELS.

    (a) In General.--Title III of the Energy Policy Act of 1992 (42 
U.S.C. 13212 et seq.) is amended as follows:
            (1) By adding at the end thereof the following:

``SEC. 313. CONSERVATION OF PETROLEUM-BASED FUELS BY THE FEDERAL 
              GOVERNMENT FOR LIGHT-DUTY MOTOR VEHICLES.

    ``(a) Purposes.--The purposes of this section are to complement and 
supplement the requirements of section 303 of this Act that Federal 
fleets, as that term is defined in section 303(b)(3), acquire in the 
aggregate a minimum percentage of alternative fuel vehicles, to 
encourage the manufacture and sale or lease of such vehicles 
nationwide, and to achieve, in the aggregate, a reduction in the amount 
of the petroleum-based fuels (other than the alternative fuels defined 
in this title) used by new light-duty motor vehicles acquired by the 
Federal Government in model years 2004 through 2010 and thereafter.
    ``(b) Implementation.--In furtherance of such purposes, such 
Federal fleets in the aggregate shall reduce the purchase of petroleum-
based nonalternative fuels for such fleets beginning October 1, 2003, 
through September 30, 2009, from the amount purchased for such fleets 
over a comparable period since enactment of this Act, as determined by 
the Secretary, through the annual purchase, in accordance with section 
304, and the use of alternative fuels for the light-duty motor vehicles 
of such Federal fleets, so as to achieve levels which reflect total 
reliance by such fleets on the consumptive use of alternative fuels 
consistent with the provisions of section 303(b) of this Act. The 
Secretary shall, within 120 days after the enactment of this section, 
promulgate, in consultation with the Administrator of the General 
Services Administration and the Director of the Office of Management 
and Budget and such other heads of entities referenced in section 303 
within the executive branch as such Director may designate, standards 
for the full and prompt implementation of this section by such 
entities. The Secretary shall monitor compliance with this section and 
such standards by all such fleets and shall report annually to the 
Congress, based on reports by the heads of such fleets, on the extent 
to which the requirements of this section and such standards are being 
achieved. The report shall include information on annual reductions 
achieved of petroleum-based fuels and the problems, if any, encountered 
in acquiring alternative fuels and in requiring their use.''.
            (2) By amending section 304(b) of such Act to read as 
        follows:
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary or, as appropriate, the head of each 
Federal fleet subject to the provisions of this section and section 313 
of this Act, such sums as may be necessary to achieve the purposes of 
section 313(a) and the provisions of this section. Such sums shall 
remain available until expended.''.
    (b) Clerical Amendment.--The table of contents in section 1(b) of 
such Act is amended by adding at the end of the items relating to title 
III the following:

``Sec. 313. Conservation of petroleum-based fuels by the Federal 
                            Government for light-duty motor 
                            vehicles.''.

SEC. 207. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR 
              AUTOMOBILES.

    (a) In General.--Not later than 30 days after the date of the 
enactment of this Act, the Secretary of Transportation shall enter into 
an arrangement with the National Academy of Sciences under which the 
Academy shall study the feasibility and effects of reducing by model 
year 2010, by a significant percentage, the use of fuel for 
automobiles.
    (b) Subjects of Study.--The study under this section shall 
include--
            (1) examination of, and recommendation of alternatives to, 
        the policy under current Federal law of establishing average 
        fuel economy standards for automobiles and requiring each 
        automobile manufacturer to comply with average fuel economy 
        standards that apply to the automobiles it manufactures;
            (2) examination of how automobile manufacturers could 
        contribute toward achieving the reduction referred to in 
        subsection (a);
            (3) examination of the potential of fuel cell technology in 
        motor vehicles in order to determine the extent to which such 
        technology may contribute to achieving the reduction referred 
        to in subsection (a); and
            (4) examination of the effects of the reduction referred to 
        in subsection (a) on--
                    (A) gasoline supplies;
                    (B) the automobile industry, including sales of 
                automobiles manufactured in the United States;
                    (C) motor vehicle safety; and
                    (D) air quality.
    (c) Report.--The Secretary shall require the National Academy of 
Sciences to submit to the Secretary and the Congress a report on the 
findings, conclusion, and recommendations of the study under this 
section by not later than 1 year after the date of the enactment of 
this Act.

                       TITLE III--NUCLEAR ENERGY

SEC. 301. BUDGET STATUS OF NUCLEAR WASTE FUND.

    (a) In General.--Notwithstanding any other provision of law, the 
receipts and disbursements of the Nuclear Waste Fund established under 
section 302 of the Nuclear Waste Policy Act of 1982 (42 U.S.C. 10222) 
shall not be counted as new budget authority, outlays, receipts, or 
deficit or surplus for purposes of--
            (1) the budget of the United States Government as submitted 
        by the President;
            (2) the congressional budget; or
            (3) the Balanced Budget and Emergency Deficit Control Act 
        of 1985.
    (b) Effect on Paygo Scorecard.--Upon the enactment of this Act, the 
Director of the Office of Management and Budget shall not make any 
estimates of changes in direct spending outlays and receipts under 
section 252(d) of the Balanced Budget and Emergency Deficit Control Act 
of 1985 resulting from the enactment of subsection (a) of this section.

SEC. 302. LICENSE PERIOD.

    Section 103 c. 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 initial duration of the license may not exceed 40 years 
        from the date on which the Commission finds, before operation 
        of the facility, that the acceptance criteria required by 
        section 185 b. are met.''.

SEC. 303. COST RECOVERY FROM GOVERNMENT AGENCIES.

    Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 2201(w)) 
is amended--
            (1) by striking ``for or is issued'' and all that follows 
        through ``1702'' and inserting ``to the Commission for, or is 
        issued by the Commission, a license or certificate'';
            (2) by striking ``483a'' and inserting ``9701''; and
            (3) by striking ``, of applicants for, or holders of, such 
        licenses or certificates''.

SEC. 304. DEPLETED URANIUM HEXAFLUORIDE.

    Section 1(b) of Public Law 105-204 is amended by striking ``fiscal 
year 2002'' and inserting ``fiscal year 2005''.

SEC. 305. NUCLEAR REGULATORY COMMISSION MEETINGS.

    If a quorum of the Nuclear Regulatory Commission gathers to discuss 
official Commission business the discussions shall be recorded, and the 
Commission shall notify the public of such discussions within 15 days 
after they occur. The Commission shall promptly make a transcript of 
the recording available to the public on request, except to the extent 
that public disclosure is exempted or prohibited by law. This section 
shall not apply to a meeting, within the meaning of that term under 
section 552b(a)(2) of title 5, United States Code.

SEC. 306. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL 
              DEMONSTRATION PROJECTS FOR THE URANIUM MINING INDUSTRY.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary $10,000,000 for each of fiscal years 
2002, 2003, and 2004 for--
            (1) cooperative, cost-shared, agreements between the 
        Department of Energy and domestic uranium producers to 
        identify, test, and develop improved in situ leaching mining 
        technologies, including low-cost environmental restoration 
        technologies that may be applied to sites after completion of 
        in situ leaching operations; and
            (2) funding for competitively selected demonstration 
        projects with domestic uranium producers relating to--
                    (A) enhanced production with minimal environmental 
                impacts;
                    (B) restoration of well fields; and
                    (C) decommissioning and decontamination activities.
    (b) Domestic Uranium Producer.--For purposes of this section, the 
term ``domestic uranium producer'' has the meaning given that term in 
section 1018(4) of the Energy Policy Act of 1992 (42 U.S.C. 2296b-
7(4)), except that the term shall not include any producer that has not 
produced uranium from domestic reserves on or after July 30, 1998.

SEC. 307. MAINTENANCE OF A VIABLE DOMESTIC URANIUM CONVERSION INDUSTRY.

    There are authorized to be appropriated to the Secretary $800,000 
for contracting with the Nation's sole remaining uranium converter for 
the purpose of performing research and development to improve the 
environmental and economic performance of United States uranium 
conversion operations.

SEC. 308. PADUCAH DECONTAMINATION AND DECOMMISSIONING PLAN.

    The Secretary of Energy shall prepare and submit a plan to Congress 
within 180 days after the date of the enactment of this Act that 
establishes scope, cost, schedule, sequence of activities, and 
contracting strategy for--
            (1) the decontamination and decommissioning of the 
        Department of Energy's surplus buildings and facilities at the 
        Paducah Gaseous Diffusion Plant that have no future anticipated 
        reuse; and
            (2) the remediation of Department of Energy Material 
        Storage Areas at the Paducah Gaseous Diffusion Plant.
Such plan shall inventory all surplus facilities and buildings, and 
identify and rank health and safety risks associated with such 
facilities and buildings. Such plan shall inventory all Department of 
Energy Material Storage Areas, and identify and rank health and safety 
risks associated with such Department of Energy Material Storage Areas. 
The Department of Energy shall incorporate these risk factors in 
designing the sequence and schedule for the plan. Such plan shall 
identify funding requirements that are in addition to the expected 
outlays included in the Department of Energy's Environmental Management 
Plan for the Paducah Gaseous Diffusion Plan.

                     TITLE IV--HYDROELECTRIC ENERGY

SEC. 401. 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, and the Secretary of 
the department under whose supervision such reservation falls deems a 
condition to such license to be necessary under the first proviso of 
subsection (e), the license applicant or any other party to the 
licensing proceeding 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 party 
proposing such alternative condition, that the alternative condition--
            ``(A) provides no less protection for the reservation than 
        provided by the condition deemed necessary 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 condition deemed necessary by the Secretary.
    ``(3) Within one year after the enactment of this subsection, each 
Secretary concerned shall, by rule, establish a process to 
expeditiously resolve conflicts arising under this subsection.''.
    (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 Commission shall require a licensee to 
construct, maintain, or operate a fishway prescribed by the Secretary 
of the Interior or the Secretary of Commerce under this section, the 
licensee or any other party to the proceeding 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 
party proposing such alternative, that the alternative--
            ``(A) will be no less effective 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) Within one year after the enactment of this subsection, the 
Secretary of the Interior and the Secretary of Commerce shall each, by 
rule, establish a process to expeditiously resolve conflicts arising 
under this subsection.''

SEC. 402. FERC DATA ON HYDROELECTRIC LICENSING.

    (a) Data Collection Procedures.--The Federal Energy Regulatory 
Commission shall revise its procedures regarding the collection of data 
in connection with the Commission's consideration of hydroelectric 
licenses under the Federal Power Act. Such revised data collection 
procedures shall be designed to provide the Commission with complete 
and accurate information concerning the time and costs to parties 
involved in the licensing process. Such data shall be available for 
each significant stage in the licensing process and shall be designed 
to identify projects with similar characteristics so that analyses can 
be made of the time and costs involved in licensing proceedings based 
upon the different characteristics of those proceedings.
    (b) Reports.--Within 6 months after the date of enactment of this 
Act, the Commission shall notify the Committee on Energy and Commerce 
of the United States House of Representatives and the Committee on 
Energy and Natural Resources of the United States Senate of the 
progress made by the Commission under subsection (a), and within one 
year after such date of enactment, the Commission shall submit a report 
to such Committees specifying the measures taken by the Commission 
pursuant to subsection (a).

                             TITLE V--FUELS

SEC. 601. TANK DRAINING DURING TRANSITION TO SUMMERTIME RFG.

    Not later than 60 days after the enactment of the Act, the 
Administrator of the Environmental Protection Agency shall commence a 
rulemaking to determine whether modifications to the regulations set 
forth in 40 C.F.R. Section 80.78 and any associated regulations 
regarding the transition to high ozone season reformulated gasoline are 
necessary to ensure that the transition to high ozone season 
reformulated gasoline is conducted in a manner that minimizes 
disruptions to the general availability and affordability of gasoline, 
and maximizes flexibility with regard to the draining and inventory 
management of gasoline storage tanks located at refineries, terminals, 
wholesale and retail outlets, consistent with the goals of the Clean 
Air Act. The Administrator shall propose and take final action in such 
rulemaking to ensure that any modifications are effective and 
implemented at least 60 days prior to the beginning of the high ozone 
season for the year 2002.

SEC. 602. GASOLINE BLENDSTOCK REQUIREMENTS.

    Not later than 60 days after the enactment of this Act, the 
Administrator of the Environmental Protection Agency shall commence a 
rulemaking to determine whether modifications to product transfer 
documentation, accounting, compliance calculation, and other 
requirements contained in the regulations of the Administrator set 
forth in section 80.102 of title 40 of the Code of Federal Regulations 
relating to gasoline blendstocks are necessary to facilitate the 
movement of gasoline and gasoline feedstocks among different regions 
throughout the country and to improve the ability of petroleum refiners 
and importers to respond to regional gasoline shortages and prevent 
unreasonable short-term price increases. The Administrator shall take 
into consideration the extent to which such requirements have been, or 
will be, rendered unnecessary or inefficient by reason of subsequent 
environmental safeguards that were not in effect at the time the 
regulations in section 80.102 of title 40 of the Code of Federal 
Regulations were promulgated. The Administrator shall propose and take 
final action in such rulemaking to ensure that any modifications are 
effective and implemented at least 60 days prior to the beginning of 
the high ozone season for the year 2002.

SEC. 603. BOUTIQUE FUELS.

    (a) Joint Study.--The Administrator of the Environmental Protection 
Agency and the Secretary of Energy shall jointly conduct a study of all 
Federal, State, and local requirements regarding motor vehicle fuels, 
including requirements relating to reformulated gasoline, volatility 
(Reid Vapor Pressure), oxygenated fuel, diesel fuel and other 
requirements that vary from State to State, region to region, or 
locality to locality. The study shall analyze--
            (1) the effect of the variety of such requirements on the 
        price of motor vehicle fuels to the consumer;
            (2) the availability and affordability of motor vehicle 
        fuels in different States and localities;
            (3) the effect of Federal, State, and local regulations, 
        including multiple fuel requirements, on domestic refineries 
        and the fuel distribution system;
            (4) the effect of such requirements on local, regional, and 
        national air quality requirements and goals;
            (5) the effect of such requirements on vehicle emissions;
            (6) the feasibility of developing national or regional fuel 
        specifications for the contiguous United States that would--
                    (A) enhance flexibility in the fuel distribution 
                infrastructure and improve fuel fungibility;
                    (B) reduce price volatility and costs to consumers 
                and producers;
                    (C) meet local, regional, and national air quality 
                requirements and goals; and
                    (D) provide increased gasoline market liquidity; 
                and
            (7) the extent to which the Environmental Protection 
        Agency's Tier II requirements for conventional gasoline may 
        achieve in future years the same or similar air quality results 
        as State reformulated gasoline programs and State programs 
        regarding gasoline volatility (RVP).
    (b) Report.--By December 31, 2001, the Administrator of the 
Environmental Protection Agency and the Secretary of Energy shall 
submit a report to the Congress containing the results of the study 
conducted under subsection (a). Such report shall contain 
recommendations for legislative and administrative actions that may be 
taken to simplify the national distribution system for motor vehicle 
fuel, make such system more cost-effective, and reduce the costs and 
increase the availability of motor vehicle fuel to the end user while 
meeting the requirements of the Clean Air Act. Such recommendations 
shall take into account the need to provide lead time for refinery and 
fuel distribution system modifications necessary to assure adequate 
fuel supply for all States.

SEC. 604. FUNDING FOR MTBE CONTAMINATION.

    Notwithstanding any other provision of law, there is authorized to 
be appropriated to the Administrator of the Environmental Protection 
Agency from the Leaking Underground Storage Trust Fund not more than 
$200,000,000 to be used for taking such action, limited to assessment, 
corrective action, inspection of underground storage tank systems, and 
groundwater monitoring in connection with MTBE contamination, as the 
Administrator deems necessary to protect human health and the 
environment from releases of methyl tertiary butyl ether (MTBE) from 
underground storage tanks.

                       TITLE VI--RENEWABLE ENERGY

SEC. 701. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

    (a) Resource Assessment.--Not later than one year after the date of 
enactment of this Act, and each year thereafter, the Secretary of 
Energy shall publish an assessment by the National Laboratories of all 
renewable energy resources available within the United States.
    (b) Contents of Report.--The report published under subsection (a) 
shall contain each of the following:
            (1) A detailed inventory describing the available amount 
        and characteristics of solar, wind, biomass, geothermal, 
        hydroelectric and other renewable energy sources.
            (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.

SEC. 702. RENEWABLE ENERGY PRODUCTION INCENTIVE.

    Section 1212 of the Energy Policy Act of 1992 (42 U.S.C. 13317) is 
amended as follows:
            (1) In subsection (a) by striking ``and which satisfies'' 
        and all that follows through ``Secretary shall establish.'' and 
        inserting ``. 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.''.
            (2) In subsection (b)--
                    (A) by striking ``a State or any political'' and 
                all that follows through ``nonprofit electrical 
                cooperative'' and inserting ``an electricity-generating 
                cooperative exempt from taxation under section 
                501(c)(12) or section 1381(a)(2)(C) of the Internal 
                Revenue Code of 1986, 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
                    (B) By inserting ``landfill gas,'' after ``wind, 
                biomass,''.
            (3) In subsection (c) 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''.
            (4) In subsection (d) 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''.
            (5) In subsection (e)(1) by inserting ``landfill gas,'' 
        after ``wind, biomass,''.
            (6) In subsection (f) by striking ``the expiration of'' and 
        all that follows through ``of this section'' and inserting 
        ``September 30, 2023''.
            (7) In subsection (g)--
                    (A) by striking ``1993, 1994, and 1995'' and 
                inserting ``2003 through 2023''; and
                    (B) by inserting ``Funds may be appropriated 
                pursuant to this subsection to remain available until 
                expended.'' after ``purposes of this section.''.

                          TITLE VII--PIPELINES

SEC. 801. 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.

SEC. 802. HISTORIC PIPELINES.

    Section 7 of the Natural Gas Act (15 U.S.C. 717f) is amended by 
adding at the end the following new subsection:
    ``(i) Notwithstanding the National Historic Preservation Act, a 
transportation facility shall not be eligible for inclusion on the 
National Register of Historic Places until the Commission has permitted 
the abandonment of the transportation facility pursuant to subsection 
(b) of this section.''.

                  TITLE VII--MISCELLANEOUS PROVISIONS

SEC. 901. WASTE REDUCTION AND USE OF ALTERNATIVES.

    (a) Grant Authority.--The Secretary of Energy is authorized to make 
a single grant to a qualified institution to examine and develop the 
feasibility of burning post-consumer carpet in cement kilns as an 
alternative energy source. The purposes of the grant shall include 
determining--
            (1) how post-consumer carpet can be burned without 
        disrupting kiln operations;
            (2) the extent to which overall kiln emissions may be 
        reduced; and
            (3) how this process provides benefits to both cement kiln 
        operations and carpet suppliers.
    (b) Qualified Institution.--For the purposes of subsection (a), a 
qualified institution is a research-intensive institution of higher 
learning with demonstrated expertise in the fields of fiber recycling 
and logistical modeling of carpet waste collection and preparation.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Energy for carrying out this section 
$275,000 for fiscal year 2002, to remain available until expended.

SEC. 902. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

    (a) Report.--The Secretary of Energy, in consultation with the 
heads of other relevant Federal agencies, shall include in each report 
under section 801(c) of the Department of Energy Organization Act a 
section which evaluates the progress the United States has made toward 
obtaining the goal of not more than 50 percent dependence on foreign 
oil sources by 2010.
    (b) Alternatives.--The information required under this section to 
be included in the reports under section 801(c) of the Department of 
Energy Organization Act shall include a specification of what 
legislative or administrative actions must be implemented to meet this 
goal and set forth a range of options and alternatives with a cost/
benefit analysis for each option or alternative together with an 
estimate of the contribution each option or alternative could make to 
reduce foreign oil imports. The Secretary shall solicit information 
from the public and request information from the Energy Information 
Agency and other agencies to develop the information required under 
this section. The information shall indicate, in detail, options and 
alternatives to--
            (1) increase the use of renewable domestic energy sources, 
        including conventional and nonconventional sources;
            (2) conserve energy resources, including improving 
        efficiencies and decreasing consumption; and
            (3) increase domestic production and use of oil, natural 
        gas, nuclear, and coal, including any actions necessary to 
        provide access to, and transportation of, these energy 
        resources.

SEC. 903. STUDY OF AIRCRAFT EMISSIONS.

    The Secretary of Transportation and the Administrator of the 
Environmental Protection Agency shall jointly commence a study within 
60 days after the enactment of this Act to investigate the impact of 
aircraft emissions on air quality in areas that are considered to be in 
nonattainment for the national ambient air quality standard for ozone. 
As part of this study, the Secretary and the Administrator shall focus 
on the impact of emissions by aircraft idling at airports and on the 
contribution of such emissions as a percentage of total emissions in 
the nonattainment area. Within 180 days of the commencement of the 
study, the Secretary and the Administrator shall submit a report to the 
Committees on Energy and Commerce and Transportation and Infrastructure 
of the United States House of Representatives and to the Committees on 
Environment and Public Works and Commerce, Science, and Transportation 
of the United States Senate containing the results of the study and 
recommendations with respect to a plan to maintain comprehensive data 
on aircraft emissions and methods by which such emissions may be 
reduced, without increasing individual aircraft noise, in order to 
assist in the attainment of the national ambient air quality standards.

                               DIVISION B

SEC. 2001. SHORT TITLE.

    This division may be cited as the ``Comprehensive Energy Research 
and Technology Act of 2001''.

SEC. 2002. FINDINGS.

    The Congress finds that--
            (1) the Nation's prosperity and way of life are sustained 
        by energy use;
            (2) the growing imbalance between domestic energy 
        production and consumption means that the Nation is becoming 
        increasingly reliant on imported energy, which has the 
        potential to undermine the Nation's economy, standard of 
        living, and national security;
            (3) energy conservation and energy efficiency help maximize 
        the use of available energy resources, reduce energy shortages, 
        lower the Nation's reliance on energy imports, mitigate the 
        impacts of high energy prices, and help protect the environment 
        and public health;
            (4) development of a balanced portfolio of domestic energy 
        supplies will ensure that future generations of Americans will 
        have access to the energy they need;
            (5) energy efficiency technologies, renewable and 
        alternative energy technologies, and advanced energy systems 
        technologies will help diversify the Nation's energy portfolio 
        with few adverse environmental impacts and are vital to 
        delivering clean energy to fuel the Nation's economic growth;
            (6) development of reliable, affordable, and 
        environmentally sound energy efficiency technologies, renewable 
        and alternative energy technologies, and advanced energy 
        systems technologies will require maintenance of a vibrant 
        fundamental scientific knowledge base and continued scientific 
        and technological innovations that can be accelerated by 
        Federal funding, whereas commercial deployment of such systems 
        and technologies are the responsibility of the private sector;
            (7) Federal funding should focus on those programs, 
        projects, and activities that are long-term, high-risk, 
        noncommercial, and well-managed, and that provide the potential 
        for scientific and technological advances; and
            (8) public-private partnerships should be encouraged to 
        leverage scarce taxpayer dollars.

SEC. 2003. PURPOSES.

    The purposes of this division are to--
            (1) protect and strengthen the Nation's economy, standard 
        of living, and national security by reducing dependence on 
        imported energy;
            (2) meet future needs for energy services at the lowest 
        total cost to the Nation, including environmental costs, giving 
        balanced and comprehensive consideration to technologies that 
        improve the efficiency of energy end uses and that enhance 
        energy supply;
            (3) reduce the air, water, and other environmental impacts 
        (including emissions of greenhouse gases) of energy production, 
        distribution, transportation, and use through the development 
        of environmentally sustainable energy systems;
            (4) consider the comparative environmental impacts of the 
        energy saved or produced by specific programs, projects, or 
        activities;
            (5) maintain the technological competitiveness of the 
        United States and stimulate economic growth through the 
        development of advanced energy systems and technologies;
            (6) foster international cooperation by developing 
        international markets for domestically produced sustainable 
        energy technologies, and by transferring environmentally sound, 
        advanced energy systems and technologies to developing 
        countries to promote sustainable development;
            (7) provide sufficient funding of programs, projects, and 
        activities that are performance-based and modeled as public-
        private partnerships, as appropriate; and
            (8) enhance the contribution of a given program, project, 
        or activity to fundamental scientific knowledge.

SEC. 2004. GOALS.

    (a) In General.--Subject to subsection (b), in order to achieve the 
purposes of this division under section 2003, the Secretary should 
conduct a balanced energy research, development, demonstration, and 
commercial application portfolio of programs guided by the following 
goals to meet the purposes of this division under section 2003.
            (1) Energy conservation and energy efficiency.--
                    (A) For the Building Technology, State and 
                Community Sector, the program should develop 
                technologies, housing components, designs, and 
                production methods that will, by 2010--
                            (i) reduce the monthly energy cost of new 
                        housing by 20 percent, compared to the cost as 
                        of the date of the enactment of this Act;
                            (ii) cut the environmental impact and 
                        energy use of new housing by 50 percent, 
                        compared to the impact and use as of the date 
                        of the enactment of this Act; and
                            (iii) improve durability and reduce 
                        maintenance costs by 50 percent compared to the 
                        durability and costs as of the date of the 
                        enactment of this Act.
                    (B) For the Industry Sector, the program should, in 
                cooperation with the affected industries, improve the 
                energy intensity of the major energy-consuming 
                industries by at least 25 percent by 2010, compared to 
                the energy intensity as of the date of the enactment of 
                this Act.
                    (C) For Power Technologies, the program should, in 
                cooperation with the affected industries--
                            (i) develop a microturbine (40 to 300 
                        kilowatt) that is more than 40 percent more 
                        efficient by 2006, and more than 50 percent 
                        more efficient by 2010, compared to the 
                        efficiency as of the date of the enactment of 
                        this Act; and
                            (ii) develop advanced materials for 
                        combustion systems that reduce emissions of 
                        nitrogen oxides by 30 to 50 percent while 
                        increasing efficiency 5 to 10 percent by 2007, 
                        compared to such emissions as of the date of 
                        the enactment of this Act.
                    (D) For the Transportation Sector, the program 
                should, in cooperation with affected industries--
                            (i) develop a production prototype 
                        passenger automobile that has fuel economy 
                        equivalent to 80 miles per gallon of gasoline 
                        by 2004;
                            (ii) develop class 7 and 8 heavy duty 
                        trucks and buses with ultra low emissions and 
                        the ability to use an alternative fuel that has 
                        an average fuel economy equivalent to--
                                    (I) 10 miles per gallon of gasoline 
                                by 2007; and
                                    (II) 13 miles per gallon of 
                                gasoline by 2010;
                            (iii) develop a production prototype of a 
                        passenger automobile with zero equivalent 
                        emissions that has an average fuel economy of 
                        100 miles per gallon of gasoline by 2010; and
                            (iv) improve, by 2010, the average fuel 
                        economy of trucks--
                                    (I) in classes 1 and 2 by 300 
                                percent; and
                                    (II) in classes 3 through 6 by 200 
                                percent,
                        compared to the fuel economy as of the date of 
                        the enactment of this Act.
            (2) Renewable energy.--
                    (A) For Hydrogen Research, to carry out the Spark 
                M. Matsunaga Hydrogen Research, Development, and 
                Demonstration Act of 1990, as amended by subtitle A of 
                title II of this division.
                    (B) For bioenergy:
                            (i) The program should reduce the cost of 
                        bioenergy relative to other energy sources to 
                        enable the United States to triple bioenergy 
                        use by 2010.
                            (ii) For biopower systems, the program 
                        should reduce the cost of such systems to 
                        enable commercialization of integrated power-
                        generating technologies that employ gas 
                        turbines and fuel cells integrated with 
                        bioenergy gasifiers within five years after the 
                        date of the enactment of this Act.
                            (iii) For biofuels, the program should 
                        accelerate research, development, and 
                        demonstration on advanced enzymatic hydrolysis 
                        technology for making ethanol from cellulosic 
                        feedstock, with the goal that between 2010 and 
                        2015 ethanol produced from energy crops would 
                        be fully competitive in terms of price with 
                        gasoline as a neat fuel, in either internal 
                        combustion engines or fuel cell vehicles.
                    (C) For Geothermal Technology Development, the 
                program should focus on advanced concepts for the long 
                term. The first priority should be high-grade enhanced 
                geothermal systems; the second priority should be lower 
                grade, hot dry rock, and geopressured systems; and the 
                third priority should be support of field 
                demonstrations of enhanced geothermal systems 
                technology, including sites in lower grade areas to 
                demonstrate the benefits of reservoir concepts to 
                different conditions.
                    (D) For Hydropower, the program should provide a 
                new generation of turbine technologies that will 
                increase generating capacity and will be less damaging 
                to fish and aquatic ecosystems.
                    (E) For Concentrating Solar Power, the program 
                should strengthen ongoing research, development, and 
                demonstration combining high-efficiency and high-
                temperature receivers with advanced thermal storage and 
                power cycles, with the goal of making solar-only power 
                (including baseload solar power) widely competitive 
                with fossil fuel power by 2015. The program should 
                limit or halt its research and development on power-
                tower and power-trough technologies because further 
                refinements to these concepts will not further their 
                deployment, and should assess the market prospects for 
                solar dish/engine technologies to determine whether 
                continued research and development is warranted.
                    (F) For Photovoltaic Energy Systems, the program 
                should pursue research, development, and demonstration 
                that will, by 2005, increase the efficiency of thin 
                film modules from the current 7 percent to 11 percent 
                in multi-million watt production; reduce the direct 
                manufacturing cost of photovoltaic modules by 30 
                percent from the current $2.50 per watt to $1.75 per 
                watt by 2005; and establish greater than a 20-year 
                lifetime of photovoltaic systems by improving the 
                reliability and lifetime of balance-of-system 
                components and reducing recurring cost by 40 percent. 
                The program's top priority should be the development of 
                sound manufacturing technologies for thin-film modules, 
                and the program should make a concerted effort to 
                integrate fundamental research and basic engineering 
                research.
                    (G) For Solar Building Technology Research, the 
                program should complete research and development on new 
                polymers and manufacturing processes to reduce the cost 
                of solar water heating by 50 percent by 2004, compared 
                to the cost as of the date of enactment of this Act.
                    (H) For Wind Energy Systems, the program should 
                reduce the cost of wind energy to three cents per 
                kilowatt-hour at Class 6 (15 miles-per-hour annual 
                average) wind sites by 2004, and 4 cents per kilowatt-
                hour in Class 4 (13 miles-per-hour annual average) wind 
                sites by 2015, and further if required so that wind 
                power can be widely competitive with fossil-fuel-based 
                electricity in a restructured electric industry. 
                Program research on advanced wind turbine technology 
                should focus on turbulent flow studies, durable 
                materials to extend turbine life, blade efficiency, and 
                higher efficiency operation in low quality wind 
                regimes.
                    (I) For Electric Energy Systems and Storage, 
                including High Temperature Superconducting Research and 
                Development, Energy Storage Systems, and Transmission 
                Reliability, the program should develop high capacity 
                superconducting transmission lines and generators, 
                highly reliable energy storage systems, and distributed 
                generating systems to accommodate multiple types of 
                energy sources under common interconnect standards.
                    (J) For the International Renewable Energy and 
                Renewable Energy Production Incentive programs, and 
                Renewable Program Support, the program should encourage 
                the commercial application of renewable energy 
                technologies by developed and developing countries, 
                State and local governmental entities and nonprofit 
                electric cooperatives, and by the competitive domestic 
                market.
            (3) Nuclear energy.--
                    (A) For university nuclear science and engineering, 
                the program should carry out the provisions of subtitle 
                A of title III of this division.
                    (B) For fuel cycle research, development, and 
                demonstration, the program should carry out the 
                provisions of subtitle B of title III of this division.
                    (C) For the Nuclear Energy Research Initiative, the 
                program should accomplish the objectives of section 
                2341(b) of this Act.
                    (D) For the Nuclear Energy Plant Optimization 
                Program, the program should accomplish the objectives 
                of section 2342(b) of this Act.
                    (E) For Nuclear Energy Technologies, the program 
                should carry out the provisions of section 2343 of this 
                Act.
                    (F) For Advanced Radioisotope Power Systems, the 
                program should ensure that the United States has 
                adequate capability to power future satellite and space 
                missions.
            (4) Fossil energy.--
                    (A) For core fossil energy research and 
                development, the program should achieve the goals 
                outlined by the Department's Vision 21 Program. This 
                research should address fuel-flexible gasification and 
                turbines, fuel cells, advanced-combustion systems, 
                advanced fuels and chemicals, advanced modeling and 
                systems analysis, materials and heat exchangers, 
                environmental control technologies, gas-stream 
                purification, gas-separation technology, and 
                sequestration research and development focused on cost-
                effective novel concepts for capturing, reusing or 
                storing, or otherwise mitigating carbon and other 
                greenhouse gas emissions.
                    (B) For offshore oil and natural gas resources, the 
                program should investigate and develop technologies 
                to--
                            (i) extract methane hydrates in coastal 
                        waters of the United States, in accordance with 
                        the provisions of the Methane Hydrate Research 
                        and Development Act of 2000; and
                            (ii) develop natural gas and oil reserves 
                        in the ultra-deepwater of the Central and 
                        Western Gulf of Mexico. Research and 
                        development on ultra-deepwater resource 
                        recovery shall focus on improving the safety 
                        and efficiency of such recovery and of sub-sea 
                        production technology used for such recovery, 
                        while lowering costs.
                    (C) For transportation fuels, the program should 
                support a comprehensive transportation fuels strategy 
                to increase the price elasticity of oil supply and 
                demand by focusing research on reducing the cost of 
                producing transportation fuels from natural gas and 
                indirect liquefaction of coal.
            (5) Science.--The Secretary, through the Office of Science, 
        should--
                    (A) develop and maintain a robust portfolio of 
                fundamental scientific and energy research, including 
                High Energy and Nuclear Physics, Biological and 
                Environmental Research, Basic Energy Sciences 
                (including Materials Sciences, Chemical Sciences, 
                Engineering and Geosciences, and Energy Biosciences), 
                Advanced Scientific Computing, Energy Research and 
                Analysis, Multiprogram Energy Laboratories-Facilities 
                Support, Fusion Energy Sciences, and Facilities and 
                Infrastructure;
                    (B) maintain, upgrade, and expand, as appropriate, 
                and in accordance with the provisions of this division, 
                the scientific user facilities maintained by the Office 
                of Science, and ensure that they are an integral part 
                of the Department's mission for exploring the frontiers 
                of fundamental energy sciences; and
                    (C) ensure that its fundamental energy sciences 
                programs, where appropriate, help inform the applied 
                research and development programs of the Department.
    (b) Review and Assessment.--The Secretary shall perform an 
assessment that establishes measurable cost and performance-based 
goals, or that modifies the goals under subsection (a), as appropriate, 
for 2005, 2010, 2015, and 2020 for each of the programs authorized by 
this division that would enable each such program to meet the purposes 
of this division under section 2003. Such assessment shall be based on 
the latest scientific and technical knowledge, and shall also take into 
consideration, as appropriate, the comparative environmental impacts 
(including emissions of greenhouse gases) of the energy saved or 
produced by specific programs.
    (c) Consultation.--In establishing the measurable cost and 
performance-based goals under subsection (b), the Secretary shall 
consult with the private sector, institutions of higher learning, 
national laboratories, environmental organizations, professional and 
technical societies, and any other persons as the Secretary considers 
appropriate.
    (d) Schedule.--The Secretary shall--
            (1) issue and publish in the Federal Register a set of 
        draft measurable cost and performance-based goals for the 
        programs authorized by this division for public comment--
                    (A) in the case of a program established before the 
                date of the enactment of this Act, not later than 120 
                days after the date of the enactment of this Act; and
                    (B) in the case of a program not established before 
                the date of the enactment of this Act, not later than 
                120 days after the date of establishment of the 
                program;
            (2) not later than 60 days after the date of publication 
        under paragraph (1), after taking into consideration any public 
        comments received, transmit to the Congress and publish in the 
        Federal Register the final measurable cost and performance-
        based goals; and
            (3) update all such cost and performance-based goals on a 
        biennial basis.

SEC. 2005. DEFINITIONS.

    For purposes of this division, except as otherwise provided--
            (1) the term ``Administrator'' means the Administrator of 
        the Environmental Protection Agency;
            (2) the term ``appropriate congressional committees'' 
        means--
                    (A) the Committee on Science and the Committee on 
                Appropriations of the House of Representatives; and
                    (B) the Committee on Energy and Natural Resources 
                and the Committee on Appropriations of the Senate;
            (3) the term ``Department'' means the Department of Energy; 
        and
            (4) the term ``Secretary'' means the Secretary of Energy.

SEC. 2006. AUTHORIZATIONS.

    Authorizations of appropriations under this division are for 
environmental research and development, scientific and energy research, 
development, and demonstration, and commercial application of energy 
technology programs, projects, and activities.

SEC. 2007. BALANCE OF FUNDING PRIORITIES.

    (a) Sense of Congress.--It is the sense of the Congress that the 
funding of the various programs authorized by titles I through IV of 
this division should remain in the same proportion to each other as 
provided in this division, regardless of the total amount of funding 
made available for those programs.
    (b) Report to Congress.--If for fiscal year 2002, 2003, or 2004 the 
amounts appropriated in general appropriations Acts for the programs 
authorized in titles I through IV of this division are not in the same 
proportion to one another as are the authorizations for such programs 
in this division, the Secretary and the Administrator shall, within 60 
days after the date of the enactment of the last general appropriations 
Act appropriating amounts for such programs, transmit to the 
appropriate congressional committees a report describing the programs, 
projects, and activities that would have been funded if the proportions 
provided for in this division had been maintained in the 
appropriations. The amount appropriated for the program receiving the 
highest percentage of its authorized funding for a fiscal year shall be 
used as the baseline for calculating the proportional deficiencies of 
appropriations for other programs in that fiscal year.

           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

                 Subtitle A--Alternative Fuel Vehicles

SEC. 2101. SHORT TITLE.

    This subtitle may be cited as the ``Alternative Fuel Vehicle 
Acceleration Act of 2001''.

SEC. 2102. DEFINITIONS.

    For the purposes of this subtitle, the following definitions apply:
            (1) Alternative fuel vehicle.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``alternative fuel vehicle'' means a 
                motor vehicle that is powered--
                            (i) in whole or in part by electricity, 
                        including electricity supplied by a fuel cell;
                            (ii) by liquefied natural gas;
                            (iii) by compressed natural gas;
                            (iv) by liquefied petroleum gas;
                            (v) by hydrogen;
                            (vi) by methanol or ethanol at no less than 
                        85 percent by volume; or
                            (vii) by propane.
                    (B) Exclusions.--The term ``alternative fuel 
                vehicle'' does not include--
                            (i) any vehicle designed to operate solely 
                        on gasoline or diesel derived from fossil 
                        fuels, regardless of whether it can also be 
                        operated on an alternative fuel; or
                            (ii) any vehicle that the Secretary 
                        determines, by rule, does not yield substantial 
                        environmental benefits over a vehicle operating 
                        solely on gasoline or diesel derived from 
                        fossil fuels.
            (2) Pilot program.--The term ``pilot program'' means the 
        competitive grant program established under section 2103.
            (3) Ultra-low sulfur diesel vehicle.--The term ``ultra-low 
        sulfur diesel vehicle'' means a vehicle powered by a heavy-duty 
        diesel engine that--
                    (A) is fueled by diesel fuel which contains sulfur 
                at not more than 15 parts per million; and
                    (B) emits not more than the lesser of--
                            (i) for vehicles manufactured in--
                                    (I) model years 2001 through 2003, 
                                3.0 grams per brake horsepower-hour of 
                                nonmethane hydrocarbons and oxides of 
                                nitrogen and .01 grams per brake 
                                horsepower-hour of particulate matter; 
                                and
                                    (II) 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; 
                                or
                            (ii) the emissions of nonmethane 
                        hydrocarbons, oxides of nitrogen, and 
                        particulate matter of the best performing 
                        technology of ultra-low sulfur diesel vehicles 
                        of the same type that are commercially 
                        available.

SEC. 2103. PILOT PROGRAM.

    (a) Establishment.--The Secretary shall establish a competitive 
grant pilot program to provide not more than 15 grants to State 
governments, local governments, or metropolitan transportation 
authorities to carry out a project or projects for the purposes 
described in subsection (b).
    (b) Grant Purposes.--Grants under this section may be used for the 
following purposes:
            (1) The acquisition of alternative fuel vehicles, 
        including--
                    (A) passenger vehicles;
                    (B) buses used for public transportation or 
                transportation to and from schools;
                    (C) delivery vehicles for goods or services;
                    (D) ground support vehicles at public airports, 
                including vehicles to carry baggage or push airplanes 
                away from terminal gates; and
                    (E) motorized two-wheel bicycles, scooters, or 
                other vehicles for use by law enforcement personnel or 
                other State or local government or metropolitan 
                transportation authority employees.
            (2) The acquisition of ultra-low sulfur diesel vehicles.
            (3) Infrastructure necessary to directly support an 
        alternative fuel vehicle project funded by the grant, including 
        fueling and other support equipment.
            (4) Operation and maintenance of vehicles, infrastructure, 
        and equipment acquired as part of a project funded by the 
        grant.
    (c) Applications.--
            (1) Requirements.--The Secretary shall issue requirements 
        for applying for grants under the pilot program. At a minimum, 
        the Secretary shall require that applications be submitted by 
        the head of a State or local government or a metropolitan 
        transportation authority, or any combination thereof, and shall 
        include--
                    (A) at least one project to enable passengers or 
                goods to be transferred directly from one alternative 
                fuel vehicle or ultra-low sulfur diesel vehicle to 
                another in a linked transportation system;
                    (B) a description of the projects proposed in the 
                application, including how they meet the requirements 
                of this subtitle;
                    (C) an estimate of the ridership or degree of use 
                of the projects proposed in the application;
                    (D) an estimate of the air pollution emissions 
                reduced and fossil fuel displaced as a result of the 
                projects proposed in the application, and a plan to 
                collect and disseminate environmental data, related to 
                the projects to be funded under the grant, over the 
                life of the projects;
                    (E) a description of how the projects proposed in 
                the application will be sustainable without Federal 
                assistance after the completion of the term of the 
                grant;
                    (F) a complete description of the costs of each 
                project proposed in the application, including 
                acquisition, construction, operation, and maintenance 
                costs over the expected life of the project;
                    (G) a description of which costs of the projects 
                proposed in the application will be supported by 
                Federal assistance under this subtitle; and
                    (H) 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 projects, and a commitment by the 
                applicant to use such fuel in carrying out the 
                projects.
            (2) Partners.--An applicant under paragraph (1) may carry 
        out projects under the pilot program in partnership with public 
        and private entities.
    (d) Selection Criteria.--In evaluating applications under the pilot 
program, the Secretary shall consider each applicant's previous 
experience with similar projects and shall give priority consideration 
to applications that--
            (1) are most likely to maximize protection of the 
        environment;
            (2) demonstrate the greatest commitment on the part of the 
        applicant to ensure funding for the proposed projects and the 
        greatest likelihood that each project proposed in the 
        application will be maintained or expanded after Federal 
        assistance under this subtitle is completed; and
            (3) exceed the minimum requirements of subsection 
        (c)(1)(A).
    (e) Pilot Project Requirements.--
            (1) Maximum amount.--The Secretary shall not provide more 
        than $20,000,000 in Federal assistance under the pilot program 
        to any applicant.
            (2) Cost sharing.--The Secretary shall not provide more 
        than 50 percent of the cost, incurred during the period of the 
        grant, of any project under the pilot program.
            (3) Maximum period of grants.--The Secretary shall not fund 
        any applicant under the pilot program for more than 5 years.
            (4) Deployment and distribution.--The Secretary shall seek 
        to the maximum extent practicable to achieve nationwide 
        deployment of alternative fuel vehicles through the pilot 
        program, and shall ensure a broad geographic distribution of 
        project sites.
            (5) Transfer of information and knowledge.--The Secretary 
        shall establish mechanisms to ensure that the information and 
        knowledge gained by participants in the pilot program are 
        transferred among the pilot program participants and to other 
        interested parties, including other applicants that submitted 
        applications.
    (f) Schedule.--
            (1) Publication.--Not later than 3 months after the date of 
        enactment of this Act, the Secretary shall publish in the 
        Federal Register, Commerce Business Daily, and elsewhere as 
        appropriate, a request for applications to undertake projects 
        under the pilot program. Applications shall be due within 6 
        months of the publication of the notice.
            (2) Selection.--Not later than 6 months after the date by 
        which applications for grants are due, the Secretary shall 
        select by competitive, peer review all applications for 
        projects to be awarded a grant under the pilot program.
    (g) 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 the acquisition of ultra-low sulfur 
diesel vehicles.

SEC. 2104. REPORTS TO CONGRESS.

    (a) Initial Report.--Not later than 2 months after the date grants 
are awarded under this subtitle, the Secretary shall transmit to the 
appropriate congressional committees a report containing--
            (1) an identification of the grant recipients and a 
        description of the projects to be funded;
            (2) an identification of other applicants that submitted 
        applications for the pilot program; and
            (3) a description of the mechanisms used by the Secretary 
        to ensure that the information and knowledge gained by 
        participants in the pilot program are transferred among the 
        pilot program participants and to other interested parties, 
        including other applicants that submitted applications.
    (b) Evaluation.--Not later than 3 years after the date of enactment 
of this Act, and annually thereafter until the pilot program ends, the 
Secretary shall transmit to the appropriate congressional committees a 
report containing an evaluation of the effectiveness of the pilot 
program, including an assessment of the benefits to the environment 
derived from the projects included in the pilot program as well as an 
estimate of the potential benefits to the environment to be derived 
from widespread application of alternative fuel vehicles and ultra-low 
sulfur diesel vehicles.

SEC. 2105. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary 
$200,000,000 to carry out this subtitle, to remain available until 
expended.

          Subtitle B--Distributed Power Hybrid Energy Systems

SEC. 2121. FINDINGS.

    The Congress makes the following findings:
            (1) Our ability to take advantage of our renewable, 
        indigenous resources in a cost-effective manner can be greatly 
        advanced through systems that compensate for the intermittent 
        nature of these resources through distributed power hybrid 
        systems.
            (2) Distributed power hybrid systems can--
                    (A) shelter consumers from temporary energy price 
                volatility created by supply and demand mismatches;
                    (B) increase the reliability of energy supply; and
                    (C) address significant local differences in power 
                and economic development needs and resource 
                availability that exist throughout the United States.
            (3) Realizing these benefits will require a concerted and 
        integrated effort to remove market barriers to adopting 
        distributed power hybrid systems by--
                    (A) developing the technological foundation that 
                enables designing, testing, certifying, and operating 
                distributed power hybrid systems; and
                    (B) providing the policy framework that reduces 
                such barriers.
            (4) While many of the individual distributed power hybrid 
        systems components are either available or under development in 
        existing private and public sector programs, the capabilities 
        to integrate these components into workable distributed power 
        hybrid systems that maximize benefits to consumers in a safe 
        manner often are not coherently being addressed.

SEC. 2122. DEFINITIONS.

    For purposes of this subtitle--
            (1) the term ``distributed power hybrid system'' means a 
        system using 2 or more distributed power sources, operated 
        together with associated supporting equipment, including 
        storage equipment, and software necessary to provide electric 
        power onsite and to an electric distribution system; and
            (2) the term ``distributed power source'' means an 
        independent electric energy source of usually 10 megawatts or 
        less located close to a residential, commercial, or industrial 
        load center, including--
                    (A) reciprocating engines;
                    (B) turbines;
                    (C) microturbines;
                    (D) fuel cells;
                    (E) solar electric systems;
                    (F) wind energy systems;
                    (G) biopower systems;
                    (H) geothermal power systems; or
                    (I) combined heat and power systems.

SEC. 2123. STRATEGY.

    (a) Requirement.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary shall develop and transmit to the 
Congress a distributed power hybrid systems strategy showing--
            (1) needs best met with distributed power hybrid systems 
        configurations, especially systems including one or more solar 
        or renewable power sources; and
            (2) technology gaps and barriers (including barriers to 
        efficient connection with the power grid) that hamper the use 
        of distributed power hybrid systems.
    (b) Elements.--The strategy shall provide for development of--
            (1) system integration tools (including databases, computer 
        models, software, sensors, and controls) needed to plan, 
        design, build, and operate distributed power hybrid systems for 
        maximum benefits;
            (2) tests of distributed power hybrid systems, power parks, 
        and microgrids, including field tests and cost-shared 
        demonstrations with industry;
            (3) design tools to characterize the benefits of 
        distributed power hybrid systems for consumers, to reduce 
        testing needs, to speed commercialization, and to generate data 
        characterizing grid operations, including interconnection 
        requirements;
            (4) precise resource assessment tools to map local 
        resources for distributed power hybrid systems; and
            (5) a comprehensive research, development, demonstration, 
        and commercial application program to ensure the reliability, 
        efficiency, and environmental integrity of distributed energy 
        resources, focused on filling gaps in distributed power hybrid 
        systems technologies identified under subsection (a)(2), which 
        may include--
                    (A) integration of a wide variety of advanced 
                technologies into distributed power hybrid systems;
                    (B) energy storage devices;
                    (C) environmental control technologies;
                    (D) interconnection standards, protocols, and 
                equipment; and
                    (E) ancillary equipment for dispatch and control.
    (c) Implementation and Integration.--The Secretary shall implement 
the strategy transmitted under subsection (a) and the research program 
under subsection (b)(5). Activities pursuant to the strategy shall be 
integrated with other activities of the Department's Office of Power 
Technologies.

SEC. 2124. HIGH POWER DENSITY INDUSTRY PROGRAM.

    (a) In General.--The Secretary shall develop and implement a 
comprehensive research, development, demonstration, and commercial 
application program to improve energy efficiency, reliability, and 
environmental responsibility in high power density industries, such as 
data centers, server farms, telecommunications facilities, and heavy 
industry.
    (b) Areas.--In carrying out this section, the Secretary shall 
consider technologies that provide--
            (1) significant improvement in efficiency of high power 
        density facilities, and in data and telecommunications centers, 
        using advanced thermal control technologies;
            (2) significant improvements in air-conditioning efficiency 
        in facilities such as data centers and telecommunications 
        facilities;
            (3) significant advances in peak load reduction; and
            (4) advanced real time metering and load management and 
        control devices.
    (c) Implementation and Integration.--Activities pursuant to this 
program shall be integrated with other activities of the Department's 
Office of Power Technologies.

SEC. 2125. MICRO-COGENERATION ENERGY TECHNOLOGY.

    The Secretary shall make competitive, merit-based grants to 
consortia of private sector entities for the development of micro-
cogeneration energy technology. The consortia shall explore the 
creation of small-scale combined heat and power through the use of 
residential heating appliances. There are authorized to be appropriated 
to the Secretary $20,000,000 to carry out this section, to remain 
available until expended.

SEC. 2126. PROGRAM PLAN.

    Within 4 months after the date of enactment of this Act, the 
Secretary, in consultation with other appropriate Federal agencies, 
shall prepare and transmit to the Congress a 5-year program plan to 
guide activities under this subtitle. In preparing the program plan, 
the Secretary shall consult with appropriate representatives of the 
distributed energy resources, power transmission, and high power 
density industries to prioritize appropriate program areas. The 
Secretary shall also seek the advice of utilities, energy services 
providers, manufacturers, institutions of higher learning, other 
appropriate State and local agencies, environmental organizations, 
professional and technical societies, and any other persons the 
Secretary considers appropriate.

SEC. 2127. REPORT.

    Two years after date of enactment of this Act and at two year 
intervals thereafter, the Secretary, jointly with other appropriate 
Federal agencies, shall transmit a report to Congress describing the 
progress made to achieve the purposes of this subtitle.

SEC. 2128. VOLUNTARY CONSENSUS STANDARDS.

    Not later than 2 years after the date of enactment of this Act, the 
Secretary, in consultation with the National Institute of Standards and 
Technology, shall work with the Institute of Electrical and Electronic 
Engineers and other standards development organizations toward the 
development of voluntary consensus standards for distributed energy 
systems for use in manufacturing and using equipment and systems for 
connection with electric distribution systems, for obtaining 
electricity from, or providing electricity to, such systems.

           Subtitle C--Secondary Electric Vehicle Battery Use

SEC. 2131. DEFINITIONS.

    For purposes of this subtitle, the term--
            (1) ``battery'' means an energy storage device that 
        previously has been used to provide motive power in a vehicle 
        powered in whole or in part by electricity; and
            (2) ``associated equipment'' means equipment located at the 
        location where the batteries will be used that is necessary to 
        enable the use of the energy stored in the batteries.

SEC. 2132. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE BATTERY USE 
              PROGRAM.

    (a) Program.--The Secretary shall establish and conduct a research, 
development, and demonstration program for the secondary use of 
batteries where the original use of such batteries was in 
transportation applications. Such program shall be--
            (1) designed to demonstrate the use of batteries in 
        secondary application, including utility and commercial power 
        storage and power quality;
            (2) structured to evaluate the performance, including 
        longevity of useful service life and costs, of such batteries 
        in field operations, and evaluate the necessary supporting 
        infrastructure, including disposal and reuse of batteries; and
            (3) coordinated with ongoing secondary battery use programs 
        underway at the national laboratories and in industry.
    (b) Solicitation.--(1) Not later than 6 months after the date of 
the enactment of this Act, the Secretary shall solicit proposals to 
demonstrate the secondary use of batteries and associated equipment and 
supporting infrastructure in geographic locations throughout the United 
States. The Secretary may make additional solicitations for proposals 
if the Secretary determines that such solicitations are necessary to 
carry out this section.
    (2)(A) Proposals submitted in response to a solicitation under this 
section shall include--
            (i) a description of the project, including the batteries 
        to be used in the project, the proposed locations and 
        applications for the batteries, the number of batteries to be 
        demonstrated, and the type, characteristics, and estimated 
        life-cycle costs of the batteries compared to other energy 
        storage devices currently used;
            (ii) the contribution, if any, of State or local 
        governments and other persons to the demonstration project;
            (iii) the type of associated equipment to be demonstrated 
        and the type of supporting infrastructure to be demonstrated; 
        and
            (iv) any other information the Secretary considers 
        appropriate.
    (B) If the proposal includes a lease arrangement, the proposal 
shall indicate the terms of such lease arrangement for the batteries 
and associated equipment.
    (c) Selection of Proposals.--(1)(A) The Secretary shall, not later 
than 3 months after the closing date established by the Secretary for 
receipt of proposals under subsection (b), select at least 5 proposals 
to receive financial assistance under this section.
    (B) No one project selected under this section shall receive more 
than 25 percent of the funds authorized under this section. No more 
than 3 projects selected under this section shall demonstrate the same 
battery type.
    (2) In selecting a proposal under this section, the Secretary shall 
consider--
            (A) the ability of the proposer to acquire the batteries 
        and associated equipment and to successfully manage and conduct 
        the demonstration project, including the reporting requirements 
        set forth in paragraph (3)(B);
            (B) the geographic and climatic diversity of the projects 
        selected;
            (C) the long-term technical and competitive viability of 
        the batteries to be used in the project and of the original 
        manufacturer of such batteries;
            (D) the suitability of the batteries for their intended 
        uses;
            (E) the technical performance of the battery, including the 
        expected additional useful life and the battery's ability to 
        retain energy;
            (F) the environmental effects of the use of and disposal of 
        the batteries proposed to be used in the project selected;
            (G) the extent of involvement of State or local government 
        and other persons in the demonstration project and whether such 
        involvement will--
                    (i) permit a reduction of the Federal cost share 
                per project; or
                    (ii) otherwise be used to allow the Federal 
                contribution to be provided to demonstrate a greater 
                number of batteries; and
            (H) such other criteria as the Secretary considers 
        appropriate.
    (3) Conditions.--The Secretary shall require that--
            (A) as a part of a demonstration project, the users of the 
        batteries provide to the proposer information regarding the 
        operation, maintenance, performance, and use of the batteries, 
        and the proposer provide such information to the battery 
        manufacturer, for 3 years after the beginning of the 
        demonstration project;
            (B) the proposer provide to the Secretary such information 
        regarding the operation, maintenance, performance, and use of 
        the batteries as the Secretary may request during the period of 
        the demonstration project; and
            (C) the proposer provide at least 50 percent of the costs 
        associated with the proposal.

SEC. 2133. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary, from 
amounts authorized under section 2161(a), for purposes of this 
subtitle--
            (1) $1,000,000 for fiscal year 2002;
            (2) $7,000,000 for fiscal year 2003; and
            (3) $7,000,000 for fiscal year 2004.
Such appropriations may remain available until expended.

                     Subtitle D--Green School Buses

SEC. 2141. SHORT TITLE.

    This subtitle may be cited as the ``Clean Green School Bus Act of 
2001''.

SEC. 2142. ESTABLISHMENT OF PILOT PROGRAM.

    (a) Establishment.--The Secretary shall 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 in lieu 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 in lieu 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 be 
used to demonstrate the use only of new alternative fuel school buses 
or ultra-low sulfur diesel school buses--
            (1) with a gross vehicle weight of greater than 14,000 
        pounds;
            (2) that are powered by a heavy duty engine;
            (3) that, in the case of alternative fuel school buses, 
        emit not more than--
                    (A) for buses manufactured in model years 2001 and 
                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) that, in the case of ultra-low sulfur diesel school 
        buses, emit not more than--
                    (A) for buses manufactured in model years 2001 
                through 2003, 3.0 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 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,
        except that under no circumstances shall buses be acquired 
        under this section that emit nonmethane hydrocarbons, oxides of 
        nitrogen, or particulate matter at a rate greater than the best 
        performing technology of ultra-low sulfur diesel school buses 
        commercially available at the time the grant is made.
    (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; and
            (2) 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.

SEC. 2143. 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 2 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 2144 may be used for carrying out this section for the 
period encompassing fiscal years 2002 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. 2144. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary for 
carrying out this subtitle, to remain available until expended--
            (1) $40,000,000 for fiscal year 2002;
            (2) $50,000,000 for fiscal year 2003;
            (3) $60,000,000 for fiscal year 2004;
            (4) $70,000,000 for fiscal year 2005; and
            (5) $80,000,000 for fiscal year 2006.

            Subtitle E--Next Generation Lighting Initiative

SEC. 2151. SHORT TITLE.

    This subtitle may be cited as ``Next Generation Lighting Initiative 
Act''.

SEC. 2152. DEFINITION.

    In this subtitle, the term ``Lighting Initiative'' means the ``Next 
Generation Lighting Initiative'' established under section 2153(a).

SEC. 2153. NEXT GENERATION LIGHTING INITIATIVE.

    (a) Establishment.--The Secretary is authorized to establish a 
lighting initiative to be known as the ``Next Generation Lighting 
Initiative'' to research, develop, and conduct demonstration activities 
on advanced lighting technologies, including white light emitting 
diodes.
    (b) Research Objectives.--The research objectives of the Lighting 
Initiative shall be to develop, by 2011, advanced lighting technologies 
that, compared to incandescent and fluorescent lighting technologies as 
of the date of the enactment of this Act, are--
            (1) longer lasting;
            (2) more energy-efficient; and
            (3) cost-competitive.

SEC. 2154. STUDY.

    (a) In General.--Not later than 6 months after the date of 
enactment of this Act, the Secretary, in consultation with other 
Federal agencies, as appropriate, shall complete a study on strategies 
for the development and commercial application of advanced lighting 
technologies. The Secretary shall request a review by the National 
Academies of Sciences and Engineering of the study under this 
subsection, and shall transmit the results of the study to the 
appropriate congressional committees.
    (b) Requirements.--The study shall--
            (1) develop a comprehensive strategy to implement the 
        Lighting Initiative; and
            (2) identify the research and development, manufacturing, 
        deployment, and marketing barriers that must be overcome to 
        achieve a goal of a 25 percent market penetration by advanced 
        lighting technologies into the incandescent and fluorescent 
        lighting market by the year 2012.
    (c) Implementation.--As soon as practicable after the review of the 
study under subsection (a) is transmitted to the Secretary by the 
National Academies of Sciences and Engineering, the Secretary shall 
adapt the implementation of the Lighting Initiative taking into 
consideration the recommendations of the National Academies of Sciences 
and Engineering.

SEC. 2155. GRANT PROGRAM.

    (a) In General.--Subject to section 2603 of this Act, the Secretary 
may make merit-based competitive grants to firms and research 
organizations that conduct research, development, and demonstration 
projects related to advanced lighting technologies.
    (b) Annual Review.--
            (1) In general.--An annual independent review of the grant-
        related activities of firms and research organizations 
        receiving a grant under this section shall be conducted by a 
        committee appointed by the Secretary under the Federal Advisory 
        Committee Act (5 U.S.C. App.), or, at the request of the 
        Secretary, a committee appointed by the National Academies of 
        Sciences and Engineering.
            (2) Requirements.--Using clearly defined standards 
        established by the Secretary, the review shall assess 
        technology advances and progress toward commercialization of 
        the grant-related activities of firms or research organizations 
        during each fiscal year of the grant program.
    (c) Technical and Financial Assistance.--The national laboratories 
and other Federal agencies, as appropriate, shall cooperate with and 
provide technical and financial assistance to firms and research 
organizations conducting research, development, and demonstration 
projects carried out under this subtitle.

    Subtitle F--Department of Energy Authorization of Appropriations

SEC. 2161. AUTHORIZATION OF APPROPRIATIONS.

    (a) Operation and Maintenance.--In addition to amounts authorized 
to be appropriated under section 2105, section 2125, and section 2144, 
there are authorized to be appropriated to the Secretary for subtitle 
B, subtitle C, subtitle E, and for Energy Conservation operation and 
maintenance (including Building Technology, State and Community Sector 
(Nongrants), Industry Sector, Transportation Sector, Power 
Technologies, and Policy and Management) $625,000,000 for fiscal year 
2002, $700,000,000 for fiscal year 2003, and $800,000,000 for fiscal 
year 2004, to remain available until expended.
    (b) Limits on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (a) may be used for--
            (1) Building Technology, State and Community Sector--
                    (A) Residential Building Energy Codes;
                    (B) Commercial Building Energy Codes;
                    (C) Lighting and Appliance Standards;
                    (D) Weatherization Assistance Program; or
                    (E) State Energy Program; or
            (2) Federal Energy Management Program.

Subtitle G--Environmental Protection Agency Office of Air and Radiation 
                    Authorization of Appropriations

SEC. 2171. SHORT TITLE.

    This subtitle may be cited as the ``Environmental Protection Agency 
Office of Air and Radiation Authorization Act of 2001''.

SEC. 2172. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Administrator for 
Office of Air and Radiation Climate Change Protection Programs 
$121,942,000 for fiscal year 2002, $126,800,000 for fiscal year 2003, 
and $131,800,000 for fiscal year 2004 to remain available until 
expended, of which--
            (1) $52,731,000 for fiscal year 2002, $54,800,000 for 
        fiscal year 2003, and $57,000,000 for fiscal year 2004 shall be 
        for Buildings;
            (2) $32,441,000 for fiscal year 2002, $33,700,000 for 
        fiscal year 2003, and $35,000,000 for fiscal year 2004 shall be 
        for Transportation;
            (3) $27,295,000 for fiscal year 2002, $28,400,000 for 
        fiscal year 2003, and $29,500,000 for fiscal year 2004 shall be 
        for Industry;
            (4) $1,700,000 for fiscal year 2002, $1,800,000 for fiscal 
        year 2003, and $1,900,000 for fiscal year 2004 shall be for 
        Carbon Removal;
            (5) $2,500,000 for fiscal year 2002, $2,600,000 for fiscal 
        year 2003, and $2,700,000 for fiscal year 2004 shall be for 
        State and Local Climate; and
            (6) $5,275,000 for fiscal year 2002, $5,500,000 for fiscal 
        year 2003, and $5,700,000 for fiscal year 2004 shall be for 
        International Capacity Building.

SEC. 2173. LIMITS ON USE OF FUNDS.

    (a) Production or Provision of Articles or Services.--None of the 
funds authorized to be appropriated by this subtitle may be used to 
produce or provide articles or services for the purpose of selling the 
articles or services to a person outside the Federal Government, unless 
the Administrator determines that comparable articles or services are 
not available from a commercial source in the United States.
    (b) Requests for Proposals.--None of the funds authorized to be 
appropriated by this subtitle may be used by the Environmental 
Protection Agency to prepare or initiate Requests for Proposals for a 
program if the program has not been authorized by Congress.

SEC. 2174. COST SHARING.

    (a) Research and Development.--Except as otherwise provided in this 
subtitle, for research and development programs carried out under this 
subtitle, the Administrator shall require a commitment from non-Federal 
sources of at least 20 percent of the cost of the project. The 
Administrator may reduce or eliminate the non-Federal requirement under 
this subsection if the Administrator determines that the research and 
development is of a basic or fundamental nature.
    (b) Demonstration and Commercial Application.--Except as otherwise 
provided in this subtitle, the Administrator shall require at least 50 
percent of the costs directly and specifically related to any 
demonstration or commercial application project under this subtitle to 
be provided from non-Federal sources. The Administrator may reduce the 
non-Federal requirement under this subsection if the Administrator 
determines that the reduction is necessary and appropriate considering 
the technological risks involved in the project and is necessary to 
meet the objectives of this subtitle.
    (c) Calculation of Amount.--In calculating the amount of the non-
Federal commitment under subsection (a) or (b), the Administrator may 
include personnel, services, equipment, and other resources.

SEC. 2175. LIMITATION ON DEMONSTRATION AND COMMERCIAL APPLICATIONS OF 
              ENERGY TECHNOLOGY.

    The Administrator shall provide funding for scientific or energy 
demonstration or commercial application of energy technology programs, 
projects, or activities of the Office of Air and Radiation only for 
technologies or processes that can be reasonably expected to yield new, 
measurable benefits to the cost, efficiency, or performance of the 
technology or process.

SEC. 2176. REPROGRAMMING.

    (a) Authority.--The Administrator may use amounts appropriated 
under this subtitle for a program, project, or activity other than the 
program, project, or activity for which such amounts were appropriated 
only if--
            (1) the Administrator has transmitted to the appropriate 
        congressional committees a report described in subsection (b) 
        and a period of 30 days has elapsed after such committees 
        receive the report;
            (2) amounts used for the program, project, or activity do 
        not exceed--
                    (A) 105 percent of the amount authorized for the 
                program, project, or activity; or
                    (B) $250,000 more than the amount authorized for 
                the program, project, or activity,
        whichever is less; and
            (3) the program, project, or activity has been presented 
        to, or requested of, the Congress by the Administrator.
    (b) Report.--(1) The report referred to in subsection (a) is a 
report containing a full and complete statement of the action proposed 
to be taken and the facts and circumstances relied upon in support of 
the proposed action.
    (2) In the computation of the 30-day period under subsection (a), 
there shall be excluded any day on which either House of Congress is 
not in session because of an adjournment of more than 3 days to a day 
certain.
    (c) Limitations.--(1) In no event may the total amount of funds 
obligated pursuant to this subtitle exceed the total amount authorized 
to be appropriated by this subtitle.
    (2) Funds appropriated pursuant to this subtitle may not be used 
for an item for which Congress has declined to authorize funds.

SEC. 2177. BUDGET REQUEST FORMAT.

    The Administrator shall provide to the appropriate congressional 
committees, to be transmitted at the same time as the Environmental 
Protection Agency's annual budget request submission, a detailed 
justification for budget authorization for the programs, projects, and 
activities for which funds are authorized by this subtitle. Each such 
document shall include, for the fiscal year for which funding is being 
requested and for the 2 previous fiscal years--
            (1) a description of, and funding requested or allocated 
        for, each such program, project, or activity;
            (2) an identification of all recipients of funds to conduct 
        such programs, projects, and activities; and
            (3) an estimate of the amounts to be expended by each 
        recipient of funds identified under paragraph (2).

SEC. 2178. OTHER PROVISIONS.

    (a) Annual Operating Plan and Reports.--The Administrator shall 
provide simultaneously to the Committee on Science of the House of 
Representatives--
            (1) any annual operating plan or other operational funding 
        document, including any additions or amendments thereto; and
            (2) any report relating to the environmental research or 
        development, scientific or energy research, development, or 
        demonstration, or commercial application of energy technology 
        programs, projects, or activities of the Environmental 
        Protection Agency,
provided to any committee of Congress.
    (b) Notice of Reorganization.--The Administrator shall provide 
notice to the appropriate congressional committees not later than 15 
days before any reorganization of any environmental research or 
development, scientific or energy research, development, or 
demonstration, or commercial application of energy technology program, 
project, or activity of the Office of Air and Radiation.

          Subtitle H--National Building Performance Initiative

SEC. 2181. NATIONAL BUILDING PERFORMANCE INITIATIVE.

    (a) Interagency Group.--Not later than 3 months after the date of 
the enactment of this Act, the Director of the Office of Science and 
Technology Policy shall establish an Interagency Group responsible for 
the development and implementation of a National Building Performance 
Initiative to address energy conservation and research and development 
and related issues. The National Institute of Standards and Technology 
shall provide necessary administrative support for the Interagency 
Group.
    (b) Plan.--Not later than 9 months after the date of the enactment 
of this Act, the Interagency Group shall transmit to the Congress a 
multiyear implementation plan describing the Federal role in reducing 
the costs, including energy costs, of using, owning, and operating 
commercial, institutional, residential, and industrial buildings by 30 
percent by 2020. The plan shall include--
            (1) research, development, and demonstration of systems and 
        materials for new construction and retrofit, on the building 
        envelope and components; and
            (2) the collection and dissemination in a usable form of 
        research results and other pertinent information to the design 
        and construction industry, government officials, and the 
        general public.
    (c) National Building Performance Advisory Committee.--A National 
Building Performance Advisory Committee shall be established to advise 
on creation of the plan, review progress made under the plan, advise on 
any improvements that should be made to the plan, and report to the 
Congress on actions that have been taken to advance the Nation's 
capability in furtherance of the plan. The members shall include 
representatives of a broad cross-section of interests such as the 
research, technology transfer, architectural, engineering, and 
financial communities; materials and systems suppliers; State, county, 
and local governments; the residential, multifamily, and commercial 
sectors of the construction industry; and the insurance industry.
    (d) Report.--The Interagency Group shall, within 90 days after the 
end of each fiscal year, transmit a report to the Congress describing 
progress achieved during the preceding fiscal year by government at all 
levels and by the private sector, toward implementing the plan 
developed under subsection (b), and including any amendments to the 
plan.

                       TITLE II--RENEWABLE ENERGY

                          Subtitle A--Hydrogen

SEC. 2201. SHORT TITLE.

    This subtitle may be cited as the ``Robert S. Walker and George E. 
Brown, Jr. Hydrogen Energy Act of 2001''.

SEC. 2202. PURPOSES.

    Section 102(b) of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:
    ``(b) Purposes.--The purposes of this Act are--
            ``(1) to direct the Secretary to conduct research, 
        development, and demonstration activities leading to the 
        production, storage, transportation, and use of hydrogen for 
        industrial, commercial, residential, transportation, and 
        utility applications;
            ``(2) to direct the Secretary to develop a program of 
        technology assessment, information dissemination, and education 
        in which Federal, State, and local agencies, members of the 
        energy, transportation, and other industries, and other 
        entities may participate; and
            ``(3) to develop methods of hydrogen production that 
        minimize adverse environmental impacts, with emphasis on 
        efficient and cost-effective production from renewable energy 
        resources.''.

SEC. 2203. DEFINITIONS.

    Section 102(c) of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended--
            (1) by redesignating paragraphs (1) through (3) as 
        paragraphs (2) through (4), respectively; and
            (2) by inserting before paragraph (2), as so redesignated 
        by paragraph (1) of this section, the following new paragraph:
            ``(1) `advisory committee' means the advisory committee 
        established under section 108;''.

SEC. 2204. REPORTS TO CONGRESS.

    Section 103 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:

``SEC. 103. REPORTS TO CONGRESS.

    ``(a) Requirement.--Not later than 1 year after the date of the 
enactment of the Robert S. Walker and George E. Brown, Jr. Hydrogen 
Energy Act of 2001, and biennially thereafter, the Secretary shall 
transmit to Congress a detailed report on the status and progress of 
the programs and activities authorized under this Act.
    ``(b) Contents.--A report under subsection (a) shall include, in 
addition to any views and recommendations of the Secretary--
            ``(1) an assessment of the extent to which the program is 
        meeting the purposes specified in section 102(b);
            ``(2) a determination of the effectiveness of the 
        technology assessment, information dissemination, and education 
        program established under section 106;
            ``(3) an analysis of Federal, State, local, and private 
        sector hydrogen-related research, development, and 
        demonstration activities to identify productive areas for 
        increased intergovernmental and private-public sector 
        collaboration; and
            ``(4) recommendations of the advisory committee for any 
        improvements needed in the programs and activities authorized 
        by this Act.''.

SEC. 2205. HYDROGEN RESEARCH AND DEVELOPMENT.

    Section 104 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:

``SEC. 104. HYDROGEN RESEARCH AND DEVELOPMENT.

    ``(a) Establishment of Program.--The Secretary shall conduct a 
hydrogen research and development program relating to production, 
storage, transportation, and use of hydrogen, with the goal of enabling 
the private sector to demonstrate the technical feasibility of using 
hydrogen for industrial, commercial, residential, transportation, and 
utility applications.
    ``(b) Elements.--In conducting the program authorized by this 
section, the Secretary shall--
            ``(1) give particular attention to developing an 
        understanding and resolution of critical technical issues 
        preventing the introduction of hydrogen as an energy carrier 
        into the marketplace;
            ``(2) initiate or accelerate existing research and 
        development in critical technical issues that will contribute 
        to the development of more economical hydrogen production, 
        storage, transportation, and use, including critical technical 
        issues with respect to production (giving priority to those 
        production techniques that use renewable energy resources as 
        their primary source of energy for hydrogen production), 
        liquefaction, transmission, distribution, storage, and use 
        (including use of hydrogen in surface transportation); and
            ``(3) survey private sector and public sector hydrogen 
        research and development activities worldwide, and take steps 
        to ensure that research and development activities under this 
        section do not--
                    ``(A) duplicate any available research and 
                development results; or
                    ``(B) displace or compete with the privately funded 
                hydrogen research and development activities of United 
                States industry.
    ``(c) Evaluation of Technologies.--The Secretary shall evaluate, 
for the purpose of determining whether to undertake or fund research 
and development activities under this section, any reasonable new or 
improved technology that could lead or contribute to the development of 
economical hydrogen production, storage, transportation, and use.
    ``(d) Research and Development Support.--The Secretary is 
authorized to arrange for tests and demonstrations and to disseminate 
to researchers and developers information, data, and other materials 
necessary to support the research and development activities authorized 
under this section and other efforts authorized under this Act, 
consistent with section 106 of this Act.
    ``(e) Competitive Peer Review.--The Secretary shall carry out or 
fund research and development activities under this section only on a 
competitive basis using peer review.
    ``(f) Cost Sharing.--For research and development programs carried 
out under this section, 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.''.

SEC. 2206. DEMONSTRATIONS.

    Section 105 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended--
            (1) in subsection (a), by striking ``, preferably in self-
        contained locations,'';
            (2) in subsection (b), by striking ``at self-contained 
        sites'' and inserting ``, which shall include a fuel cell bus 
        demonstration program to address hydrogen production, storage, 
        and use in transit bus applications''; and
            (3) in subsection (c), by inserting ``Non-Federal Funding 
        Requirement.--'' after ``(c)''.

SEC. 2207. TECHNOLOGY TRANSFER.

    Section 106 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:

``SEC. 106. TECHNOLOGY ASSESSMENT, INFORMATION DISSEMINATION, AND 
              EDUCATION PROGRAM.

    ``(a) Program.--The Secretary shall, in consultation with the 
advisory committee, conduct a program designed to accelerate wider 
application of hydrogen production, storage, transportation, and use 
technologies, including application in foreign countries to increase 
the global market for the technologies and foster global economic 
development without harmful environmental effects.
    ``(b) Information.--The Secretary, in carrying out the program 
authorized by subsection (a), shall--
            ``(1) undertake an update of the inventory and assessment, 
        required under section 106(b)(1) of this Act as in effect 
        before the date of the enactment of the Robert S. Walker and 
        George E. Brown, Jr. Hydrogen Energy Act of 2001, of hydrogen 
        technologies and their commercial capability to economically 
        produce, store, transport, or use hydrogen in industrial, 
        commercial, residential, transportation, and utility sector; 
        and
            ``(2) develop, with other Federal agencies as appropriate 
        and industry, an information exchange program to improve 
        technology transfer for hydrogen production, storage, 
        transportation, and use, which may consist of workshops, 
        publications, conferences, and a database for the use by the 
        public and private sectors.''.

SEC. 2208. COORDINATION AND CONSULTATION.

    Section 107 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended--
            (1) by amending paragraph (1) of subsection (a) to read as 
        follows:
            ``(1) shall establish a central point for the coordination 
        of all hydrogen research, development, and demonstration 
        activities of the Department; and''; and
            (2) by amending subsection (c) to read as follows:
    ``(c) Consultation.--The Secretary shall consult with other Federal 
agencies as appropriate, and the advisory committee, in carrying out 
the Secretary's authorities pursuant to this Act.''.

SEC. 2209. ADVISORY COMMITTEE.

    Section 108 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:

``SEC. 108. ADVISORY COMMITTEE.

    ``(a) Establishment.--The Secretary shall enter into appropriate 
arrangements with the National Academies of Sciences and Engineering to 
establish an advisory committee consisting of experts drawn from 
domestic industry, academia, Governmental laboratories, and financial, 
environmental, and other organizations, as appropriate, to review and 
advise on the progress made through the programs and activities 
authorized under this Act.
    ``(b) Cooperation.--The heads of Federal agencies shall cooperate 
with the advisory committee in carrying out this section and shall 
furnish to the advisory committee such information as the advisory 
committee reasonably deems necessary to carry out this section.
    ``(c) Review.--The advisory committee shall review and make any 
necessary recommendations to the Secretary on--
            ``(1) the implementation and conduct of programs and 
        activities authorized under this Act; and
            ``(2) the economic, technological, and environmental 
        consequences of the deployment of hydrogen production, storage, 
        transportation, and use systems.
    ``(d) Responsibilities of the Secretary.--The Secretary shall 
consider, but need not adopt, any recommendations of the advisory 
committee under subsection (c). The Secretary shall provide an 
explanation of the reasons that any such recommendations will not be 
implemented and include such explanation in the report to Congress 
under section 103(a) of this Act.''.

SEC. 2210. AUTHORIZATION OF APPROPRIATIONS.

    Section 109 of the Spark M. Matsunaga Hydrogen Research, 
Development, and Demonstration Act of 1990 is amended to read as 
follows:

``SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Research and Development; Advisory Committee.--There are 
authorized to be appropriated to the Secretary to carry out sections 
104 and 108--
            ``(1) $40,000,000 for fiscal year 2002;
            ``(2) $45,000,000 for fiscal year 2003;
            ``(3) $50,000,000 for fiscal year 2004;
            ``(4) $55,000,000 for fiscal year 2005; and
            ``(5) $60,000,000 for fiscal year 2006.
    ``(b) Demonstration.--There are authorized to be appropriated to 
the Secretary to carry out section 105--
            ``(1) $20,000,000 for fiscal year 2002;
            ``(2) $25,000,000 for fiscal year 2003;
            ``(3) $30,000,000 for fiscal year 2004;
            ``(4) $35,000,000 for fiscal year 2005; and
            ``(5) $40,000,000 for fiscal year 2006.''.

SEC. 2211. REPEAL.

    (a) Repeal.--Title II of the Hydrogen Future Act of 1996 is 
repealed.
    (b) Conforming Amendment.--Section 2 of the Hydrogen Future Act of 
1996 is amended by striking ``titles II and III'' and inserting ``title 
III''.

                         Subtitle B--Bioenergy

SEC. 2221. SHORT TITLE.

    This subtitle may be cited as the ``Bioenergy Act of 2001''.

SEC. 2222. FINDINGS.

    Congress finds that bioenergy has potential to help--
            (1) meet the Nation's energy needs;
            (2) reduce reliance on imported fuels;
            (3) promote rural economic development;
            (4) provide for productive utilization of agricultural 
        residues and waste materials, and forestry residues and 
        byproducts; and
            (5) protect the environment.

SEC. 2223. DEFINITIONS.

    For purposes of this subtitle--
            (1) the term ``bioenergy'' means energy derived from any 
        organic matter that is available on a renewable or recurring 
        basis, including agricultural crops and trees, wood and wood 
        wastes and residues, plants (including aquatic plants), 
        grasses, residues, fibers, and animal and other organic wastes;
            (2) the term ``biofuels'' includes liquid or gaseous fuels, 
        industrial chemicals, or both;
            (3) the term ``biopower'' includes the generation of 
        electricity or process steam or both; and
            (4) the term ``integrated bioenergy research and 
        development'' includes biopower and biofuels applications.

SEC. 2224. AUTHORIZATION.

    The Secretary is authorized to conduct environmental research and 
development, scientific and energy research, development, and 
demonstration, and commercial application of energy technology 
programs, projects, and activities related to bioenergy, including 
biopower energy systems, biofuels energy systems, and integrated 
bioenergy research and development.

SEC. 2225. AUTHORIZATION OF APPROPRIATIONS.

    (a) Biopower Energy Systems.--There are authorized to be 
appropriated to the Secretary for Biopower Energy Systems programs, 
projects, and activities--
            (1) $45,700,000 for fiscal year 2002;
            (2) $52,500,000 for fiscal year 2003;
            (3) $60,300,000 for fiscal year 2004;
            (4) $69,300,000 for fiscal year 2005; and
            (5) $79,600,000 for fiscal year 2006.
    (b) Biofuels Energy Systems.--There are authorized to be 
appropriated to the Secretary for biofuels energy systems programs, 
projects, and activities--
            (1) $53,500,000 for fiscal year 2002;
            (2) $61,400,000 for fiscal year 2003;
            (3) $70,600,000 for fiscal year 2004;
            (4) $81,100,000 for fiscal year 2005; and
            (5) $93,200,000 for fiscal year 2006.
    (c) Integrated Bioenergy Research and Development.--There are 
authorized to be appropriated to the Secretary for integrated bioenergy 
research and development programs, projects, and activities, 
$49,000,000 for each of the fiscal years 2002 through 2006. Activities 
funded under this subsection shall be coordinated with ongoing related 
programs of other Federal agencies, including the Plant Genome Program 
of the National Science Foundation.
    (d) Integrated Applications.--Amounts authorized to be appropriated 
under this subtitle may be used to assist in the planning, design, and 
implementation of projects to convert rice straw and barley grain into 
biopower or biofuels.

            Subtitle C--Transmission Infrastructure Systems

SEC. 2241. TRANSMISSION INFRASTRUCTURE SYSTEMS RESEARCH, DEVELOPMENT, 
              DEMONSTRATION, AND COMMERCIAL APPLICATION.

    (a) In General.--The Secretary shall develop and implement a 
comprehensive research, development, demonstration, and commercial 
application program to ensure the reliability, efficiency, and 
environmental integrity of electrical transmission systems. Such 
program shall include advanced energy technologies and systems, high 
capacity superconducting transmission lines and generators, advanced 
grid reliability and efficiency technologies development, technologies 
contributing to significant load reductions, advanced metering, load 
management and control technologies, and technology transfer and 
education.
    (b) Technology.--In carrying out this subtitle, the Secretary may 
include research, development, and demonstration on and commercial 
application of improved transmission technologies including the 
integration of the following technologies into improved transmission 
systems:
            (1) High temperature superconductivity.
            (2) Advanced transmission materials.
            (3) Self-adjusting equipment, processes, or software for 
        survivability, security, and failure containment.
            (4) Enhancements of energy transfer over existing lines.
            (5) Any other infrastructure technologies, as appropriate.

SEC. 2242. PROGRAM PLAN.

    Within 4 months after the date of the enactment of this Act, the 
Secretary, in consultation with other appropriate Federal agencies, 
shall prepare and transmit to Congress a 5-year program plan to guide 
activities under this subtitle. In preparing the program plan, the 
Secretary shall consult with appropriate representatives of the 
transmission infrastructure systems industry to select and prioritize 
appropriate program areas. The Secretary shall also seek the advice of 
utilities, energy services providers, manufacturers, institutions of 
higher learning, other appropriate State and local agencies, 
environmental organizations, professional and technical societies, and 
any other persons as the Secretary considers appropriate.

SEC. 2243. REPORT.

    Two years after the date of the enactment of this Act, and at two 
year intervals thereafter, the Secretary, in consultation with other 
appropriate Federal agencies, shall transmit a report to Congress 
describing the progress made to achieve the purposes of this subtitle 
and identifying any additional resources needed to continue the 
development and commercial application of transmission infrastructure 
technologies.

    Subtitle D--Department of Energy Authorization of Appropriations

SEC. 2261. AUTHORIZATION OF APPROPRIATIONS.

    (a) Operation and Maintenance.--There are authorized to be 
appropriated to the Secretary for Renewable Energy operation and 
maintenance, including activities under subtitle C, Geothermal 
Technology Development, Hydropower, Concentrating Solar Power, 
Photovoltaic Energy Systems, Solar Building Technology Research, Wind 
Energy Systems, High Temperature Superconducting Research and 
Development, Energy Storage Systems, Transmission Reliability, 
International Renewable Energy Program, Renewable Energy Production 
Incentive Program, Renewable Program Support, National Renewable Energy 
Laboratory, and Program Direction, and including amounts authorized 
under the amendment made by section 2210 and amounts authorized under 
section 2225, $535,000,000 for fiscal year 2002, $639,000,000 for 
fiscal year 2003, and $683,000,000 for fiscal year 2004, to remain 
available until expended.
    (b) Wave Powered Electric Generation.--Within the amounts 
authorized to be appropriated to the Secretary under subsection (a), 
the Secretary shall carry out a research program, in conjunction with 
other appropriate Federal agencies, on wave powered electric 
generation.
    (c) Assessment of Renewable Energy Resources.--
            (1) In general.--Using funds authorized in subsection (a), 
        of this section, the Secretary shall transmit to the Congress, 
        within one year after the date of the enactment of this Act, an 
        assessment of all renewable energy resources available within 
        the United States.
            (2) Resource assessment.--Such report shall include a 
        detailed inventory describing the available amount and 
        characteristics of solar, wind, biomass, geothermal, 
        hydroelectric, and other renewable energy sources, and an 
        estimate of the costs needed to develop each resource. The 
        report shall also include such other information as the 
        Secretary believes would be useful in siting renewable energy 
        generation, such as appropriate terrain, population and load 
        centers, nearby energy infrastructure, and location of energy 
        resources.
            (3) Availability.--The information and cost estimates in 
        this report shall be updated annually and made available to the 
        public, along with the data used to create the report.
            (4) Sunset.--This subsection shall expire at the end of 
        fiscal year 2004.
    (d) Limits on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (a) may be used for--
            (1) Departmental Energy Management Program; or
            (2) Renewable Indian Energy Resources.

                       TITLE III--NUCLEAR ENERGY

         Subtitle A--University Nuclear Science and Engineering

SEC. 2301. SHORT TITLE.

    This subtitle may be cited as ``Department of Energy University 
Nuclear Science and Engineering Act''.

SEC. 2302. FINDINGS.

    The Congress finds the following:
            (1) United States university nuclear science and 
        engineering programs are in a state of serious decline, with 
        nuclear engineering enrollment at a 35-year low. Since 1980, 
        the number of nuclear engineering university programs has 
        declined nearly 40 percent, and over two-thirds of the faculty 
        in these programs are 45 years of age or older. Also, since 
        1980, the number of university research and training reactors 
        in the United States has declined by over 50 percent. Most of 
        these reactors were built in the late 1950s and 1960s with 30-
        year to 40-year operating licenses, and many will require 
        relicensing in the next several years.
            (2) A decline in a competent nuclear workforce, and the 
        lack of adequately trained nuclear scientists and engineers, 
        will affect the ability of the United States to solve future 
        nuclear waste storage issues, operate existing and design 
        future fission reactors in the United States, respond to future 
        nuclear events worldwide, help stem the proliferation of 
        nuclear weapons, and design and operate naval nuclear reactors.
            (3) The Department of Energy's Office of Nuclear Energy, 
        Science and Technology, a principal Federal agency for civilian 
        research in nuclear science and engineering, is well suited to 
        help maintain tomorrow's human resource and training investment 
        in the nuclear sciences and engineering.

SEC. 2303. DEPARTMENT OF ENERGY PROGRAM.

    (a) Establishment.--The Secretary, through the Office of Nuclear 
Energy, Science and Technology, shall support a program to maintain the 
Nation's human resource investment and infrastructure in the nuclear 
sciences and engineering consistent with the Department's statutory 
authorities related to civilian nuclear research, development, and 
demonstration and commercial application of energy technology.
    (b) Duties of the Office of Nuclear Energy, Science and 
Technology.--In carrying out the program under this subtitle, the 
Director of the Office of Nuclear Energy, Science and Technology 
shall--
            (1) develop a robust 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) maintain a robust investment in the fundamental nuclear 
        sciences and engineering through the Nuclear Engineering 
        Education Research Program;
            (4) encourage collaborative nuclear research among 
        industry, national laboratories, and universities through the 
        Nuclear Energy Research Initiative;
            (5) assist universities in maintaining reactor 
        infrastructure; and
            (6) support communication and outreach related to nuclear 
        science and engineering.
    (c) Maintaining University Research and Training Reactors and 
Associated Infrastructure.--The Secretary, through the Office of 
Nuclear Energy, Science and Technology, shall provide for the following 
university research and training reactor infrastructure maintenance and 
research activities:
            (1) Refueling of university research reactors with low 
        enriched fuels, upgrade of operational instrumentation, and 
        sharing of reactors among universities.
            (2) In collaboration with the United States nuclear 
        industry, assistance, where necessary, in relicensing and 
        upgrading university training reactors as part of a student 
        training program.
            (3) A university reactor research and training award 
        program that provides for reactor improvements as part of a 
        focused effort that emphasizes research, training, and 
        education.
    (d) University-DOE Laboratory Interactions.--The Secretary, through 
the Office of Nuclear Energy, Science and Technology, shall develop--
            (1) a sabbatical fellowship program for university faculty 
        to spend extended periods of time at Department of Energy 
        laboratories in the areas of nuclear science and technology; 
        and
            (2) a visiting scientist program in which laboratory staff 
        can spend time in academic nuclear science and engineering 
        departments.
The Secretary may under subsection (b)(1) provide for fellowships for 
students to spend time at Department of Energy laboratories in the 
areas of nuclear science and technology under the mentorship of 
laboratory staff.
    (e) Operations and Maintenance.--To the extent that the use of a 
university research reactor is funded under this subtitle, funds 
authorized under this subtitle may be used to supplement operation of 
the research reactor during the investigator's proposed effort. The 
host institution shall provide at least 50 percent of the cost of the 
reactor's operation.
    (f) Merit Review Required.--All grants, contracts, cooperative 
agreements, or other financial assistance awards under this subtitle 
shall be made only after independent merit review.
    (g) Report.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary shall prepare and transmit to the 
appropriate congressional committees a 5-year plan on how the programs 
authorized in this subtitle will be implemented. The plan shall include 
a review of the projected personnel needs in the fields of nuclear 
science and engineering and of the scope of nuclear science and 
engineering education programs at the Department and other Federal 
agencies.

SEC. 2304. AUTHORIZATION OF APPROPRIATIONS.

    (a) Total Authorization.--The following sums are authorized to be 
appropriated to the Secretary, to remain available until expended, for 
the purposes of carrying out this subtitle:
            (1) $30,200,000 for fiscal year 2002.
            (2) $41,000,000 for fiscal year 2003.
            (3) $47,900,000 for fiscal year 2004.
            (4) $55,600,000 for fiscal year 2005.
            (5) $64,100,000 for fiscal year 2006.
    (b) Graduate and Undergraduate Fellowships.--Of the funds 
authorized by subsection (a), the following sums are authorized to be 
appropriated to carry out section 2303(b)(1):
            (1) $3,000,000 for fiscal year 2002.
            (2) $3,100,000 for fiscal year 2003.
            (3) $3,200,000 for fiscal year 2004.
            (4) $3,200,000 for fiscal year 2005.
            (5) $3,200,000 for fiscal year 2006.
    (c) Junior Faculty Research Initiation Grant Program.--Of the funds 
authorized by subsection (a), the following sums are authorized to be 
appropriated to carry out section 2303(b)(2):
            (1) $5,000,000 for fiscal year 2002.
            (2) $7,000,000 for fiscal year 2003.
            (3) $8,000,000 for fiscal year 2004.
            (4) $9,000,000 for fiscal year 2005.
            (5) $10,000,000 for fiscal year 2006.
    (d) Nuclear Engineering Education Research Program.--Of the funds 
authorized by subsection (a), the following sums are authorized to be 
appropriated to carry out section 2303(b)(3):
            (1) $8,000,000 for fiscal year 2002.
            (2) $12,000,000 for fiscal year 2003.
            (3) $13,000,000 for fiscal year 2004.
            (4) $15,000,000 for fiscal year 2005.
            (5) $20,000,000 for fiscal year 2006.
    (e) Communication and Outreach Related to Nuclear Science and 
Engineering.--Of the funds authorized by subsection (a), the following 
sums are authorized to be appropriated to carry out section 2303(b)(5):
            (1) $200,000 for fiscal year 2002.
            (2) $200,000 for fiscal year 2003.
            (3) $300,000 for fiscal year 2004.
            (4) $300,000 for fiscal year 2005.
            (5) $300,000 for fiscal year 2006.
    (f) Refueling of University Research Reactors and Instrumentation 
Upgrades.--Of the funds authorized by subsection (a), the following 
sums are authorized to be appropriated to carry out section 2303(c)(1):
            (1) $6,000,000 for fiscal year 2002.
            (2) $6,500,000 for fiscal year 2003.
            (3) $7,000,000 for fiscal year 2004.
            (4) $7,500,000 for fiscal year 2005.
            (5) $8,000,000 for fiscal year 2006.
    (g) Relicensing Assistance.--Of the funds authorized by subsection 
(a), the following sums are authorized to be appropriated to carry out 
section 2303(c)(2):
            (1) $1,000,000 for fiscal year 2002.
            (2) $1,100,000 for fiscal year 2003.
            (3) $1,200,000 for fiscal year 2004.
            (4) $1,300,000 for fiscal year 2005.
            (5) $1,300,000 for fiscal year 2006.
    (h) Reactor Research and Training Award Program.--Of the funds 
authorized by subsection (a), the following sums are authorized to be 
appropriated to carry out section 2303(c)(3):
            (1) $6,000,000 for fiscal year 2002.
            (2) $10,000,000 for fiscal year 2003.
            (3) $14,000,000 for fiscal year 2004.
            (4) $18,000,000 for fiscal year 2005.
            (5) $20,000,000 for fiscal year 2006.
    (i) University-DOE Laboratory Interactions.--Of the funds 
authorized by subsection (a), the following sums are authorized to be 
appropriated to carry out section 2303(d):
            (1) $1,000,000 for fiscal year 2002.
            (2) $1,100,000 for fiscal year 2003.
            (3) $1,200,000 for fiscal year 2004.
            (4) $1,300,000 for fiscal year 2005.
            (5) $1,300,000 for fiscal year 2006.

Subtitle B--Advanced Fuel Recycling Technology Research and Development 
                                Program

SEC. 2321. PROGRAM.

    (a) In General.--The Secretary, through the Director of the Office 
of Nuclear Energy, Science and Technology, shall conduct an advanced 
fuel recycling technology research and development program to further 
the availability of proliferation-resistant fuel recycling technologies 
as an alternative to aqueous reprocessing in support of evaluation of 
alternative national strategies for spent nuclear fuel and the 
Generation IV advanced reactor concepts, subject to annual review by 
the Secretary's Nuclear Energy Research Advisory Committee or other 
independent entity, as appropriate.
    (b) Reports.--The Secretary shall report on the activities of the 
advanced fuel recycling technology research and development program, as 
part of the Department's annual budget submission.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $10,000,000 for fiscal year 2002; and
            (2) such sums as are necessary for fiscal year 2003 and 
        fiscal year 2004.

    Subtitle C--Department of Energy Authorization of Appropriations

SEC. 2341. NUCLEAR ENERGY RESEARCH INITIATIVE.

    (a) Program.--The Secretary, through the Office of Nuclear Energy, 
Science and Technology, shall conduct a Nuclear Energy Research 
Initiative for grants to be competitively awarded and subject to peer 
review for research relating to nuclear energy.
    (b) Objectives.--The program shall be directed toward accomplishing 
the objectives of--
            (1) developing advanced concepts and scientific 
        breakthroughs in nuclear fission and reactor technology to 
        address and overcome the principal technical and scientific 
        obstacles to the expanded use of nuclear energy in the United 
        States;
            (2) advancing the state of nuclear technology to maintain a 
        competitive position in foreign markets and a future domestic 
        market;
            (3) promoting and maintaining a United States nuclear 
        science and engineering infrastructure to meet future technical 
        challenges;
            (4) providing an effective means to collaborate on a cost-
        shared basis with international agencies and research 
        organizations to address and influence nuclear technology 
        development worldwide; and
            (5) promoting United States leadership and partnerships in 
        bilateral and multilateral nuclear energy research.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $60,000,000 for fiscal year 2002; and
            (2) such sums as are necessary for fiscal year 2003 and 
        fiscal year 2004.

SEC. 2342. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

    (a) Program.--The Secretary, through the Office of Nuclear Energy, 
Science and Technology, shall conduct a Nuclear Energy Plant 
Optimization research and development program jointly with industry and 
cost-shared by industry by at least 50 percent and subject to annual 
review by the Secretary's Nuclear Energy Research Advisory Committee or 
other independent entity, as appropriate.
    (b) Objectives.--The program shall be directed toward accomplishing 
the objectives of--
            (1) managing long-term effects of component aging; and
            (2) improving the efficiency and productivity of existing 
        nuclear power stations.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $15,000,000 for fiscal year 2002; and
            (2) such sums as are necessary for fiscal years 2003 and 
        2004.

SEC. 2343. NUCLEAR ENERGY TECHNOLOGIES.

    (a) In General.--The Secretary, through the Office of Nuclear 
Energy, Science and Technology, shall 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 application.
    (b) Reactor Characteristics.--To the extent practicable, in 
conducting the study under subsection (a), the Secretary shall study 
nuclear energy systems that offer the highest probability of achieving 
the goals for Generation IV nuclear energy systems, including--
            (1) economics competitive with any other generators;
            (2) enhanced safety features, including passive safety 
        features;
            (3) substantially reduced production of high-level waste, 
        as compared with the quantity of waste produced by reactors in 
        operation on the date of enactment of this Act;
            (4) highly proliferation-resistant fuel and waste;
            (5) sustainable energy generation including optimized fuel 
        utilization; and
            (6) substantially improved thermal efficiency, as compared 
        with the thermal efficiency of reactors in operation on the 
        date of enactment of this Act.
    (c) Consultation.--In conducting the study under subsection (a), 
the Secretary shall consult with appropriate representatives of 
industry, institutions of higher education, Federal agencies, and 
international, professional, and technical organizations.
    (d) Report.--
            (1) In general.--Not later than December 31, 2002, the 
        Secretary shall transmit to the appropriate congressional 
        committees a report describing the activities of the Secretary 
        under this section, and plans for research and development 
        leading to a public/private cooperative demonstration of one or 
        more Generation IV nuclear energy systems.
            (2) Contents.--The report shall contain--
                    (A) an assessment of all available technologies;
                    (B) a summary of actions needed for the most 
                promising candidates to be considered as viable 
                commercial options within the five to ten years after 
                the date of the report, with consideration of 
                regulatory, economic, and technical issues;
                    (C) a recommendation of not more than three 
                promising Generation IV nuclear energy system concepts 
                for further development;
                    (D) an evaluation of opportunities for public/
                private partnerships;
                    (E) a recommendation for structure of a public/
                private partnership to share in development and 
                construction costs;
                    (F) a plan leading to the selection and conceptual 
                design, by September 30, 2004, of at least one 
                Generation IV nuclear energy system concept recommended 
                under subparagraph (C) for demonstration through a 
                public/private partnership;
                    (G) an evaluation of opportunities for siting 
                demonstration facilities on Department of Energy land; 
                and
                    (H) a recommendation for appropriate involvement of 
                other Federal agencies.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out this section and to carry 
out the recommendations in the report transmitted under subsection 
(d)--
            (1) $20,000,000 for fiscal year 2002; and
            (2) such sums as are necessary for fiscal year 2003 and 
        fiscal year 2004.

SEC. 2344. AUTHORIZATION OF APPROPRIATIONS.

    (a) Operation and Maintenance.--There are authorized to be 
appropriated to the Secretary to carry out activities authorized under 
this title for nuclear energy operation and maintenance, including 
amounts authorized under sections 2304(a), 2321(c), 2341(c), 2342(c), 
and 2343(e), and including Advanced Radioisotope Power Systems, Test 
Reactor Landlord, and Program Direction, $191,200,000 for fiscal year 
2002, $199,000,000 for fiscal year 2003, and $207,000,000 for fiscal 
year 2004, to remain available until expended.
    (b) Construction.--There are authorized to be appropriated to the 
Secretary--
            (1) $950,000 for fiscal year 2002, $2,200,000 for fiscal 
        year 2003, $1,246,000 for fiscal year 2004, and $1,699,000 for 
        fiscal year 2005 for completion of construction of Project 99-
        E-200, Test Reactor Area Electric Utility Upgrade, Idaho 
        National Engineering and Environmental Laboratory; and
            (2) $500,000 for fiscal year 2002, $500,000 for fiscal year 
        2003, $500,000 for fiscal year 2004, and $500,000 for fiscal 
        year 2005, for completion of construction of Project 95-E-201, 
        Test Reactor Area Fire and Life Safety Improvements, Idaho 
        National Engineering and Environmental Laboratory.
    (c) Limits on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (a) may be used for--
            (1) Nuclear Energy Isotope Support and Production;
            (2) Argonne National Laboratory-West Operations;
            (3) Fast Flux Test Facility; or
            (4) Nuclear Facilities Management.

                        TITLE IV--FOSSIL ENERGY

                            Subtitle A--Coal

SEC. 2401. COAL AND RELATED TECHNOLOGIES PROGRAMS.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary $172,000,000 for fiscal year 2002, 
$179,000,000 for fiscal year 2003, and $186,000,000 for fiscal year 
2004, to remain available until expended, for other coal and related 
technologies research and development programs, which shall include--
            (1) Innovations for Existing Plants;
            (2) Integrated Gasification Combined Cycle;
            (3) advanced combustion systems;
            (4) Turbines;
            (5) Sequestration Research and Development;
            (6) innovative technologies for demonstration;
            (7) Transportation Fuels and Chemicals;
            (8) Solid Fuels and Feedstocks;
            (9) Advanced Fuels Research; and
            (10) Advanced Research.
    (b) Limit on use of Funds.--Notwithstanding subsection (a), no 
funds may be used to carry out the activities authorized by this 
section after September 30, 2002, unless the Secretary has transmitted 
to the Congress the report required by this subsection and 1 month has 
elapsed since that transmission. The report shall include a plan 
containing--
            (1) a detailed description of how proposals will be 
        solicited and evaluated, including a list of all activities 
        expected to be undertaken;
            (2) a detailed list of technical milestones for each coal 
        and related technology that will be pursued;
            (3) a description of how the programs authorized in this 
        subsection will be carried out so as to complement and not 
        duplicate activities authorized under division E.

                        Subtitle B--Oil and Gas

SEC. 2421. PETROLEUM-OIL TECHNOLOGY.

    The Secretary shall conduct a program of research, development, 
demonstration, and commercial application on petroleum-oil technology. 
The program shall address--
            (1) Exploration and Production Supporting Research;
            (2) Oil Technology Reservoir Management/Extension; and
            (3) Effective Environmental Protection.

SEC. 2422. GAS.

    The Secretary shall conduct a program of research, development, 
demonstration, and commercial application on natural gas technologies. 
The program shall address--
            (1) Exploration and Production;
            (2) Infrastructure; and
            (3) Effective Environmental Protection.

        Subtitle C--Ultra-Deepwater and Unconventional Drilling

SEC. 2441. SHORT TITLE.

    This subtitle may be cited as the ``Natural Gas and Other Petroleum 
Research, Development, and Demonstration Act of 2001''.

SEC. 2442. DEFINITIONS.

    For purposes of this subtitle--
            (1) the term ``deepwater'' means water depths greater than 
        200 meters but less than 1,500 meters;
            (2) the term ``Fund'' means the Ultra-Deepwater and 
        Unconventional Gas Research Fund established under section 
        2450;
            (3) the term ``institution of higher education'' has the 
        meaning given that term in section 101 of the Higher Education 
        Act of 1965 (20 U.S.C. 1001);
            (4) the term ``Research Organization'' means the Research 
        Organization created pursuant to section 2446(a);
            (5) the term ``ultra-deepwater'' means water depths greater 
        than 1,500 meters; and
            (6) the term ``unconventional'' means located in heretofore 
        inaccessible or uneconomic formations on land.

SEC. 2443. ULTRA-DEEPWATER PROGRAM.

    The Secretary shall establish a program of research, development, 
and demonstration of ultra-deepwater natural gas and other petroleum 
exploration and production technologies, in areas currently available 
for Outer Continental Shelf leasing. The program shall be carried out 
by the Research Organization as provided in this subtitle.

SEC. 2444. NATIONAL ENERGY TECHNOLOGY LABORATORY.

    The National Energy Technology Laboratory and the United States 
Geological Survey, when appropriate, shall carry out programs of long-
term research into new natural gas and other petroleum exploration and 
production technologies and environmental mitigation technologies for 
production from unconventional and ultra-deepwater resources, including 
methane hydrates. Such Laboratory shall also conduct a program of 
research, development, and demonstration of new technologies for the 
reduction of greenhouse gas emissions from unconventional and ultra-
deepwater natural gas or other petroleum exploration and production 
activities, including sub-sea floor carbon sequestration technologies.

SEC. 2445. ADVISORY COMMITTEE.

    (a) Establishment.--The Secretary shall, within 3 months after the 
date of the enactment of this Act, establish an Advisory Committee 
consisting of 7 members, each having extensive operational knowledge of 
and experience in the natural gas and other petroleum exploration and 
production industry who are not Federal Government employees or 
contractors. A minimum of 4 members shall have extensive knowledge of 
ultra-deepwater natural gas or other petroleum exploration and 
production technologies, a minimum of 2 members shall have extensive 
knowledge of unconventional natural gas or other petroleum exploration 
and production technologies, and at least 1 member shall have extensive 
knowledge of greenhouse gas emission reduction technologies, including 
carbon sequestration.
    (b) Function.--The Advisory Committee shall advise the Secretary on 
the selection of an organization to create the Research Organization 
and on the implementation of this subtitle.
    (c) Compensation.--Members 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) Administrative Costs.--The costs of activities carried out by 
the Secretary and the Advisory Committee under this subtitle shall be 
paid or reimbursed from the Fund.
    (e) Duration of Advisory Committee.--Section 14 of the Federal 
Advisory Committee Act shall not apply to the Advisory Committee.

SEC. 2446. RESEARCH ORGANIZATION.

    (a) Selection of Research Organization.--The Secretary, within 6 
months after the date of the enactment of this Act, shall solicit 
proposals from eligible entities for the creation of the Research 
Organization, and within 3 months after such solicitation, shall select 
an entity to create the Research Organization.
    (b) Eligible Entities.--Entities eligible to create the Research 
Organization shall--
            (1) have been in existence as of the date of the enactment 
        of this Act;
            (2) be entities exempt from tax under section 501(c)(3) of 
        the Internal Revenue Code of 1986; and
            (3) be experienced in planning and managing programs in 
        natural gas or other petroleum exploration and production 
        research, development, and demonstration.
    (c) Proposals.--A proposal from an entity seeking to create the 
Research Organization shall include a detailed description of the 
proposed membership and structure of the Research Organization.
    (d) Functions.--The Research Organization shall--
            (1) award grants on a competitive basis to qualified--
                    (A) research institutions;
                    (B) institutions of higher education;
                    (C) companies; and
                    (D) consortia formed among institutions and 
                companies described in subparagraphs (A) through (C) 
                for the purpose of conducting research, development, 
                and demonstration of unconventional and ultra-deepwater 
                natural gas or other petroleum exploration and 
                production technologies; and
            (2) review activities under those grants to ensure that 
        they comply with the requirements of this subtitle and serve 
        the purposes for which the grant was made.

SEC. 2447. GRANTS.

    (a) Types of Grants.--
            (1) Unconventional.--The Research Organization shall award 
        grants for research, development, and demonstration of 
        technologies to maximize the value of the Government's natural 
        gas and other petroleum resources in unconventional reservoirs, 
        and to develop technologies to increase the supply of natural 
        gas and other petroleum resources by lowering the cost and 
        improving the efficiency of exploration and production of 
        unconventional reservoirs, while improving safety and 
        minimizing environmental impacts.
            (2) Ultra-deepwater.--The Research Organization shall award 
        grants for research, development, and demonstration of natural 
        gas or other petroleum exploration and production technologies 
        to--
                    (A) maximize the value of the Federal Government's 
                natural gas and other petroleum resources in the ultra-
                deepwater areas;
                    (B) increase the supply of natural gas and other 
                petroleum resources by lowering the cost and improving 
                the efficiency of exploration and production of ultra-
                deepwater reservoirs; and
                    (C) improve safety and minimize the environmental 
                impacts of ultra-deepwater developments.
            (3) Ultra-deepwater architecture.--The Research 
        Organization shall award a grant to one or more consortia 
        described in section 2446(d)(1)(D) for the purpose of 
        developing and demonstrating the next generation architecture 
        for ultra-deepwater production of natural gas and other 
        petroleum in furtherance of the purposes stated in paragraph 
        (2)(A) through (C).
    (b) Conditions for Grants.--Grants provided under this section 
shall contain the following conditions:
            (1) If the grant recipient consists of more than one 
        entity, the recipient shall provide a signed contract agreed to 
        by all participating members clearly defining all rights to 
        intellectual property for existing technology and for future 
        inventions conceived and developed using funds provided under 
        the grant, in a manner that is consistent with applicable laws.
            (2) There shall be a repayment schedule for Federal dollars 
        provided for demonstration projects under the grant in the 
        event of a successful commercialization of the demonstrated 
        technology. Such repayment schedule shall provide that the 
        payments are made to the Secretary with the express intent that 
        these payments not impede the adoption of the demonstrated 
        technology in the marketplace. In the event that such impedance 
        occurs due to market forces or other factors, the Research 
        Organization shall renegotiate the grant agreement so that the 
        acceptance of the technology in the marketplace is enabled.
            (3) Applications for grants for demonstration projects 
        shall clearly state the intended commercial applications of the 
        technology demonstrated.
            (4) The total amount of funds made available under a grant 
        provided under subsection (a)(3) shall not exceed 50 percent of 
        the total cost of the activities for which the grant is 
        provided.
            (5) The total amount of funds made available under a grant 
        provided under subsection (a)(1) or (2) shall not exceed 50 
        percent of the total cost of the activities covered by the 
        grant, except that the Research Organization may elect to 
        provide grants covering a higher percentage, not to exceed 90 
        percent, of total project costs in the case of grants made 
        solely to independent producers.
            (6) An appropriate amount of funds provided under a grant 
        shall be used for the broad dissemination of technologies 
        developed under the grant to interested institutions of higher 
        education, industry, and appropriate Federal and State 
        technology entities to ensure the greatest possible benefits 
        for the public and use of government resources.
            (7) Demonstrations of ultra-deepwater technologies for 
        which funds are provided under a grant may be conducted in 
        ultra-deepwater or deepwater locations.
    (c) Allocation of Funds.--Funds available for grants under this 
subtitle shall be allocated as follows:
            (1) 15 percent shall be for grants under subsection (a)(1).
            (2) 15 percent shall be for grants under subsection (a)(2).
            (3) 60 percent shall be for grants under subsection (a)(3).
            (4) 10 percent shall be for carrying out section 2444.

SEC. 2448. PLAN AND FUNDING.

    (a) Transmittal to Secretary.--The Research Organization shall 
transmit to the Secretary an annual plan proposing projects and funding 
of activities under each paragraph of section 2447(a).
    (b) Review.--The Secretary shall have 1 month to review the annual 
plan, and shall approve the plan, if it is consistent with this 
subtitle. If the Secretary approves the plan, the Secretary shall 
provide funding as proposed in the plan.
    (c) Disapproval.--If the Secretary does not approve the plan, the 
Secretary shall notify the Research Organization of the reasons for 
disapproval and shall withhold funding until a new plan is submitted 
which the Secretary approves. Within 1 month after notifying the 
Research Organization of a disapproval, the Secretary shall notify the 
appropriate congressional committees of the disapproval.

SEC. 2449. AUDIT.

    The Secretary shall retain an independent, commercial auditor to 
determine the extent to which the funds authorized by this subtitle 
have been expended in a manner consistent with the purposes of this 
subtitle. The auditor shall transmit a report annually to the 
Secretary, who shall transmit the report to the appropriate 
congressional committees, along with a plan to remedy any deficiencies 
cited in the report.

SEC. 2450. FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the ``Ultra-Deepwater and 
Unconventional Gas Research Fund'' which shall be available for 
obligation to the extent provided in advance in appropriations Acts for 
allocation under section 2447(c).
    (b) Funding Sources.--
            (1) Loans from treasury.--There are authorized to be 
        appropriated to the Secretary $900,000,000 for the period 
        encompassing fiscal years 2002 through 2009. Such amounts shall 
        be deposited by the Secretary in the Fund, and shall be 
        considered loans from the Treasury. Income received by the 
        United States in connection with any ultra-deepwater oil and 
        gas leases shall be deposited in the Treasury and considered as 
        repayment for the loans under this paragraph.
            (2) Additional appropriations.--There are authorized to be 
        appropriated to the Secretary such sums as may be necessary for 
        the fiscal years 2002 through 2009, to be deposited in the 
        Fund.
            (3) Oil and gas lease income.--To the extent provided in 
        advance in appropriations Acts, not more than 7.5 percent of 
        the income of the United States from Federal oil and gas leases 
        may be deposited in the Fund for fiscal years 2002 through 
        2009.

SEC. 2451. SUNSET.

    No funds are authorized to be appropriated for carrying out this 
subtitle after fiscal year 2009. The Research Organization shall be 
terminated when it has expended all funds made available pursuant to 
this subtitle.

                         Subtitle D--Fuel Cells

SEC. 2461. FUEL CELLS.

    (a) In General.--The Secretary shall conduct a program of research, 
development, demonstration, and commercial application on fuel cells. 
The program shall address--
            (1) Advanced Research;
            (2) Systems Development;
            (3) Vision 21-Hybrids; and
            (4) Innovative Concepts.
    (b) Manufacturing Production and Processes.--In addition to the 
program under subsection (a), the Secretary, in consultation other 
Federal agencies, as appropriate, shall establish a program for the 
demonstration of fuel cell technologies, including fuel cell proton 
exchange membrane technology, for commercial, residential, and 
transportation applications. The program shall specifically focus on 
promoting the application of and improved manufacturing production and 
processes for fuel cell technologies.
    (c) Authorization of Appropriations.--Within the amounts authorized 
to be appropriated under section 2481(a), there are authorized to be 
appropriated to the Secretary for the purpose of carrying out 
subsection (b), $28,000,000 for each of fiscal years 2002 through 2004.

    Subtitle E--Department of Energy Authorization of Appropriations

SEC. 2481. AUTHORIZATION OF APPROPRIATIONS.

    (a) Operation and Maintenance.--There are authorized to be 
appropriated to the Secretary for operation and maintenance for 
subtitle B and subtitle D, and for Fossil Energy Research and 
Development Headquarters Program Direction, Field Program Direction, 
Plant and Capital Equipment, Cooperative Research and Development, 
Import/Export Authorization, and Advanced Metallurgical Processes 
$282,000,000 for fiscal year 2002, $293,000,000 for fiscal year 2003, 
and $305,000,000 for fiscal year 2004, to remain available until 
expended.
    (b) Limits on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (a) may be used for--
            (1) Gas Hydrates.
            (2) Fossil Energy Environmental Restoration; or
            (3) research, development, demonstration, and commercial 
        application on coal and related technologies, including 
        activities under subtitle A.

                            TITLE V--SCIENCE

                   Subtitle A--Fusion Energy Sciences

SEC. 2501. SHORT TITLE.

    This subtitle may be cited as the ``Fusion Energy Sciences Act of 
2001''.

SEC. 2502. FINDINGS.

    The Congress finds that--
            (1) economic prosperity is closely linked to an affordable 
        and ample energy supply;
            (2) environmental quality is closely linked to energy 
        production and use;
            (3) population, worldwide economic development, energy 
        consumption, and stress on the environment are all expected to 
        increase substantially in the coming decades;
            (4) the few energy options with the potential to meet 
        economic and environmental needs for the long-term future 
        should be pursued as part of a balanced national energy plan;
            (5) fusion energy is an attractive long-term energy source 
        because of the virtually inexhaustible supply of fuel, and the 
        promise of minimal adverse environmental impact and inherent 
        safety;
            (6) the National Research Council, the President's 
        Committee of Advisers on Science and Technology, and the 
        Secretary of Energy Advisory Board have each recently reviewed 
        the Fusion Energy Sciences Program and each strongly supports 
        the fundamental science and creative innovation of the program, 
        and has confirmed that progress toward the goal of producing 
        practical fusion energy has been excellent, although much 
        scientific and engineering work remains to be done;
            (7) each of these reviews stressed the need for a magnetic 
        fusion burning plasma experiment to address key scientific 
        issues and as a necessary step in the development of fusion 
        energy;
            (8) the National Research Council has also called for a 
        broadening of the Fusion Energy Sciences Program research base 
        as a means to more fully integrate the fusion science community 
        into the broader scientific community; and
            (9) the Fusion Energy Sciences Program budget is inadequate 
        to support the necessary science and innovation for the present 
        generation of experiments, and cannot accommodate the cost of a 
        burning plasma experiment constructed by the United States, or 
        even the cost of key participation by the United States in an 
        international effort.

SEC. 2503. PLAN FOR FUSION EXPERIMENT.

    (a) Plan for United States Fusion Experiment.--The Secretary, on 
the basis of full consultation with the Fusion Energy Sciences Advisory 
Committee and the Secretary of Energy Advisory Board, as appropriate, 
shall develop a plan for United States construction 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.
    (b) Requirements of Plan.--The plan described in subsection (a) 
shall--
            (1) address key burning plasma physics issues; and
            (2) 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) United States Participation in an International Experiment.--In 
addition to the plan described in subsection (a), the Secretary, on the 
basis of full consultation with the Fusion Energy Sciences Advisory 
Committee and the Secretary of Energy Advisory Board, as appropriate, 
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 
(a). If the Secretary elects to develop a plan under this subsection, 
he shall include the information described in subsection (b), and an 
estimate of the cost of United States participation in such an 
international experiment. The Secretary shall request a review by the 
National Academies of Sciences and Engineering of a plan developed 
under this subsection, and shall transmit the plan and the review to 
the Congress not later than July 1, 2004.
    (d) Authorization of Research and Development.--The Secretary, 
through the Fusion Energy Sciences Program, may conduct any research 
and development necessary to fully develop the plans described in this 
section.

SEC. 2504. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

    Not later than 6 months after the date of the enactment of this 
Act, the Secretary, in full consultation with FESAC, shall develop and 
transmit to the Congress a plan for the purpose of ensuring a strong 
scientific base for the Fusion Energy Sciences Program and to enable 
the experiments described in section 2503. Such plan shall include as 
its objectives--
            (1) to ensure that existing fusion research facilities and 
        equipment are more fully utilized with appropriate measurements 
        and control tools;
            (2) to ensure a strengthened fusion science theory and 
        computational base;
            (3) to ensure that the selection of and funding for new 
        magnetic and inertial fusion research facilities is based on 
        scientific innovation and cost effectiveness;
            (4) to improve the communication of scientific results and 
        methods between the fusion science community and the wider 
        scientific community;
            (5) to ensure that adequate support is provided to optimize 
        the design of the magnetic fusion burning plasma experiments 
        referred to in section 2503;
            (6) to ensure that inertial confinement fusion facilities 
        are utilized to the extent practicable for the purpose of 
        inertial fusion energy research and development;
            (7) to develop a roadmap for a fusion-based energy source 
        that shows the important scientific questions, the evolution of 
        confinement configurations, the relation between these two 
        features, and their relation to the fusion energy goal;
            (8) to establish several new centers of excellence, 
        selected through a competitive peer-review process and devoted 
        to exploring the frontiers of fusion science;
            (9) to ensure that the National Science Foundation, and 
        other agencies, as appropriate, play a role in extending the 
        reach of fusion science and in sponsoring general plasma 
        science; and
            (10) to ensure that there be continuing broad assessments 
        of the outlook for fusion energy and periodic external reviews 
        of fusion energy sciences.

SEC. 2505. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Secretary for the 
development and review, but not for implementation, of the plans 
described in this subtitle and for activities of the Fusion Energy 
Sciences Program $320,000,000 for fiscal year 2002 and $335,000,000 for 
fiscal year 2003, of which up to $15,000,000 for each of fiscal year 
2002 and fiscal year 2003 may be used to establish several new centers 
of excellence, selected through a competitive peer-review process and 
devoted to exploring the frontiers of fusion science.

                 Subtitle B--Spallation Neutron Source

SEC. 2521. DEFINITION.

    For the purposes of this subtitle, the term ``Spallation Neutron 
Source'' means Department Project 99-E-334, Oak Ridge National 
Laboratory, Oak Ridge, Tennessee.

SEC. 2522. AUTHORIZATION OF APPROPRIATIONS.

    (a) Authorization of Construction Funding.--There are authorized to 
be appropriated to the Secretary for construction of the Spallation 
Neutron Source--
            (1) $276,300,000 for fiscal year 2002;
            (2) $210,571,000 for fiscal year 2003;
            (3) $124,600,000 for fiscal year 2004;
            (4) $79,800,000 for fiscal year 2005; and
            (5) $41,100,000 for fiscal year 2006 for completion of 
        construction.
    (b) Authorization of Other Project Funding.--There are authorized 
to be appropriated to the Secretary for other project costs (including 
research and development necessary to complete the project, 
preoperations costs, and capital equipment not related to construction) 
of the Spallation Neutron Source $15,353,000 for fiscal year 2002 and 
$103,279,000 for the period encompassing fiscal years 2003 through 
2006, to remain available until expended through September 30, 2006.

SEC. 2523. REPORT.

    The Secretary shall report on the Spallation Neutron Source as part 
of the Department's annual budget submission, including a description 
of the achievement of milestones, a comparison of actual costs to 
estimated costs, and any changes in estimated project costs or 
schedule.

SEC. 2524. LIMITATIONS.

    The total amount obligated by the Department, including prior year 
appropriations, for the Spallation Neutron Source may not exceed--
            (1) $1,192,700,000 for costs of construction;
            (2) $219,000,000 for other project costs; and
            (3) $1,411,700,000 for total project cost.

      Subtitle C--Facilities, Infrastructure, and User Facilities

SEC. 2541. DEFINITION.

    For purposes of this subtitle--
            (1) the term ``nonmilitary energy laboratory'' means--
                    (A) Ames Laboratory;
                    (B) Argonne National Laboratory;
                    (C) Brookhaven National Laboratory;
                    (D) Fermi National Accelerator Laboratory;
                    (E) Lawrence Berkeley National Laboratory;
                    (F) Oak Ridge National Laboratory;
                    (G) Pacific Northwest National Laboratory;
                    (H) Princeton Plasma Physics Laboratory;
                    (I) Stanford Linear Accelerator Center;
                    (J) Thomas Jefferson National Accelerator Facility; 
                or
                    (K) any other facility of the Department that the 
                Secretary, in consultation with the Director, Office of 
                Science and the appropriate congressional committees, 
                determines to be consistent with the mission of the 
                Office of Science; and
            (2) the term ``user facility'' means--
                    (A) an Office of Science facility at a nonmilitary 
                energy laboratory that provides special scientific and 
                research capabilities, including technical expertise 
                and support as appropriate, to serve the research needs 
                of the Nation's universities, industry, private 
                laboratories, Federal laboratories, and others, 
                including research institutions or individuals from 
                other nations where reciprocal accommodations are 
                provided to United States research institutions and 
                individuals or where the Secretary considers such 
                accommodation to be in the national interest; and
                    (B) any other Office of Science funded facility 
                designated by the Secretary as a user facility.

SEC. 2542. FACILITY AND INFRASTRUCTURE SUPPORT FOR NONMILITARY ENERGY 
              LABORATORIES.

    (a) Facility Policy.--The Secretary shall develop and implement a 
least-cost nonmilitary energy laboratory facility and infrastructure 
strategy for--
            (1) maintaining existing facilities and infrastructure, as 
        needed;
            (2) closing unneeded facilities;
            (3) making facility modifications; and
            (4) building new facilities.
    (b) Plan.--The Secretary shall prepare a comprehensive 10-year plan 
for conducting future facility maintenance, making repairs, 
modifications, and new additions, and constructing new facilities at 
each nonmilitary energy laboratory. Such plan shall provide for 
facilities work in accordance with the following priorities:
            (1) Providing for the safety and health of employees, 
        visitors, and the general public with regard to correcting 
        existing structural, mechanical, electrical, and environmental 
        deficiencies.
            (2) Providing for the repair and rehabilitation of existing 
        facilities to keep them in use and prevent deterioration, if 
        feasible.
            (3) Providing engineering design and construction services 
        for those facilities that require modification or additions in 
        order to meet the needs of new or expanded programs.
    (c) Report.--
            (1) Transmittal.--Within 1 year after the date of the 
        enactment of this Act, the Secretary shall prepare and transmit 
        to the appropriate congressional committees a report containing 
        the plan prepared under subsection (b).
            (2) Contents.--For each nonmilitary energy laboratory, such 
        report shall contain--
                    (A) the current priority list of proposed 
                facilities and infrastructure projects, including cost 
                and schedule requirements;
                    (B) a current ten-year plan that demonstrates the 
                reconfiguration of its facilities and infrastructure to 
                meet its missions and to address its long-term 
                operational costs and return on investment;
                    (C) the total current budget for all facilities and 
                infrastructure funding; and
                    (D) the current status of each facilities and 
                infrastructure project compared to the original 
                baseline cost, schedule, and scope.
            (3) Additional elements.--The report shall also--
                    (A) include a plan for new facilities and facility 
                modifications at each nonmilitary energy laboratory 
                that will be required to meet the Department's changing 
                missions of the twenty-first century, including 
                schedules and estimates for implementation, and 
                including a section outlining long-term funding 
                requirements consistent with anticipated budgets and 
                annual authorization of appropriations;
                    (B) address the coordination of modernization and 
                consolidation of facilities among the nonmilitary 
                energy laboratories in order to meet changing mission 
                requirements; and
                    (C) provide for annual reports to the appropriate 
                congressional committees on accomplishments, 
                conformance to schedules, commitments, and 
                expenditures.

SEC. 2543. USER FACILITIES.

    (a) Notice Requirement.--When the Department makes a user facility 
available to universities and other potential users, or seeks input 
from universities and other potential users regarding significant 
characteristics or equipment in a user facility or a proposed user 
facility, the Department shall ensure broad public notice of such 
availability or such need for input to universities and other potential 
users.
    (b) Competition Requirement.--When the Department considers the 
participation of a university or other potential user in the 
establishment or operation of a user facility, the Department shall 
employ full and open competition in selecting such a participant.
    (c) Prohibition.--The Department may not redesignate a user 
facility, as defined by section 2541(b) as something other than a user 
facility for avoid the requirements of subsections (a) and (b).

            Subtitle D--Advisory Panel on Office of Science

SEC. 2561. ESTABLISHMENT.

    The Director of the Office of Science and Technology Policy, in 
consultation with the Secretary, shall establish an Advisory Panel on 
the Office of Science comprised of knowledgeable individuals to--
            (1) address concerns about the current status and the 
        future of scientific research supported by the Office;
            (2) examine alternatives to the current organizational 
        structure of the Office within the Department, taking into 
        consideration existing structures for the support of scientific 
        research in other Federal agencies and the private sector; and
            (3) suggest actions to strengthen the scientific research 
        supported by the Office that might be taken jointly by the 
        Department and Congress.

SEC. 2562. REPORT.

    Within 6 months after the date of the enactment of this Act, the 
Advisory Panel shall transmit its findings and recommendations in a 
report to the Director of the Office of Science and Technology Policy 
and the Secretary. The Director and the Secretary shall jointly--
            (1) consider each of the Panel's findings and 
        recommendations, and comment on each as they consider 
        appropriate; and
            (2) transmit the Panel's report and the comments of the 
        Director and the Secretary on the report to the appropriate 
        congressional committees within 9 months after the date of the 
        enactment of this Act.

    Subtitle E--Department of Energy Authorization of Appropriations

SEC. 2581. AUTHORIZATION OF APPROPRIATIONS.

    (a) Operation and maintenance.--Including the amounts authorized to 
be appropriated for fiscal year 2002 under section 2505 for Fusion 
Energy Sciences and under section 2522(b) for the Spallation Neutron 
Source, there are authorized to be appropriated to the Secretary for 
the Office of Science (also including subtitle C, High Energy Physics, 
Nuclear Physics, Biological and Environmental Research, Basic Energy 
Sciences (except for the Spallation Neutron Source), Advanced 
Scientific Computing Research, Energy Research Analysis, Multiprogram 
Energy Laboratories-Facilities Support, Facilities and Infrastructure, 
Safeguards and Security, and Program Direction) operation and 
maintenance $3,299,558,000 for fiscal year 2002, to remain available 
until expended.
    (b) Research Regarding Precious Metal Catalysis.--Within the 
amounts authorized to be appropriated to the Secretary under subsection 
(a), $5,000,000 for fiscal year 2002 may be used to carry out research 
in the use of precious metals (excluding platinum, palladium, and 
rhodium) in catalysis, either directly though national laboratories, or 
through the award of grants, cooperative agreements, or contracts with 
public or nonprofit entities.
    (c) Construction.--In addition to the amounts authorized to be 
appropriated under section 2522(a) for construction of the Spallation 
Neutron Source, there are authorized to be appropriated to the 
Secretary for Science--
            (1) $11,400,000 for fiscal year 2002 for completion of 
        construction of Project 98-G-304, Neutrinos at the Main 
        Injector, Fermi National Accelerator Laboratory;
            (2) $11,405,000 for fiscal year 2002 for completion of 
        construction of Project 01-E-300, Laboratory for Comparative 
        and Functional Genomics, Oak Ridge National Laboratory;
            (3) $4,000,000 for fiscal year 2002, $8,000,000 for fiscal 
        year 2003, and $2,000,000 for fiscal year 2004 for completion 
        of construction of Project 02-SC-002, Project Engineering 
        Design (PED), Various Locations;
            (4) $3,183,000 for fiscal year 2002 for completion of 
        construction of Project 02-SC-002, Multiprogram Energy 
        Laboratories Infrastructure Project Engineering Design (PED), 
        Various Locations; and
            (5) $18,633,000 for fiscal year 2002 and $13,029,000 for 
        fiscal year 2003 for completion of construction of Project MEL-
        001, Multiprogram Energy Laboratories, Infrastructure, Various 
        Locations.
    (d) Limits on Use of Funds.--None of the funds authorized to be 
appropriated in subsection (c) may be used for construction at any 
national security laboratory as defined in section 3281(1) of the 
National Defense Authorization Act for Fiscal Year 2000 (50 U.S.C. 
2471(1)) or at any nuclear weapons production facility as defined in 
section 3281(2) of the National Defense Authorization Act for Fiscal 
Year 2000 (50 U.S.C. 2471(2)).

                        TITLE VI--MISCELLANEOUS

      Subtitle A--General Provisions for the Department of Energy

SEC. 2601. RESEARCH, DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL 
              APPLICATION OF ENERGY TECHNOLOGY PROGRAMS, PROJECTS, AND 
              ACTIVITIES.

    (a) Authorized Activities.--Except as otherwise provided in this 
division, research, development, demonstration, and commercial 
application programs, projects, and activities for which appropriations 
are authorized under this division may be carried out under the 
procedures of the Federal Nonnuclear Energy Research and Development 
Act of 1974 (42 U.S.C. 5901 et seq.), the Atomic Energy Act of 1954 (42 
U.S.C. 2011 et seq.), or any other Act under which the Secretary is 
authorized to carry out such programs, projects, and activities, but 
only to the extent the Secretary is authorized to carry out such 
activities under each such Act.
    (b) Authorized Agreements.--Except as otherwise provided in this 
division, in carrying out research, development, demonstration, and 
commercial application programs, projects, and activities for which 
appropriations are authorized under this division, the Secretary 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, and any other form of 
agreement available to the Secretary.
    (c) Definition.--For purposes of this section, the term ``joint 
venture'' has the meaning given that term under section 2 of the 
National Cooperative Research and Production Act of 1993 (15 U.S.C. 
4301), except that such term may apply under this section to research, 
development, demonstration, and commercial application of energy 
technology joint ventures.
    (d) Protection of Information.--Section 12(c)(7) of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(c)(7)), 
relating to the protection of information, shall apply to research, 
development, demonstration, and commercial application of energy 
technology programs, projects, and activities for which appropriations 
are authorized under this division.
    (e) Inventions.--An invention conceived and developed by any person 
using funds provided through a grant under this division shall be 
considered a subject invention for the purposes of chapter 18 of title 
35, United States Code (commonly referred to as the Bayh-Dole Act).
    (f) Outreach.--The Secretary shall ensure that each program 
authorized by this division includes an outreach component to provide 
information, as appropriate, to manufacturers, consumers, engineers, 
architects, builders, energy service companies, universities, facility 
planners and managers, State and local governments, and other entities.
    (g) Guidelines and Procedures.--The Secretary shall provide 
guidelines and procedures for the transition, where appropriate, of 
energy technologies from research through development and demonstration 
to commercial application of energy technology. Nothing in this section 
shall preclude the Secretary from--
            (1) entering into a contract, cooperative agreement, 
        cooperative research and development agreement under the 
        Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
        3701 et seq.), grant, joint venture, or any other form of 
        agreement available to the Secretary under this section that 
        relates to research, development, demonstration, and commercial 
        application of energy technology; or
            (2) extending a contract, cooperative agreement, 
        cooperative research and development agreement under the 
        Stevenson-Wydler Technology Innovation Act of 1980, grant, 
        joint venture, or any other form of agreement available to the 
        Secretary that relates to research, development, and 
        demonstration to cover commercial application of energy 
        technology.
    (h) Application of Section.--This section shall not apply to any 
contract, cooperative agreement, cooperative research and development 
agreement under the Stevenson-Wydler Technology Innovation Act of 1980 
(15 U.S.C. 3701 et seq.), grant, joint venture, or any other form of 
agreement available to the Secretary that is in effect as of the date 
of enactment of this Act.

SEC. 2602. LIMITS ON USE OF FUNDS.

    (a) Management and Operating Contracts.--
            (1) Competitive procedure requirement.--None of the funds 
        authorized to be appropriated to the Secretary by this division 
        may be used to award a management and operating contract for a 
        federally owned or operated nonmilitary energy laboratory of 
        the Department unless such contract is awarded using 
        competitive procedures or the Secretary grants, on a case-by-
        case basis, a waiver to allow for such a deviation. The 
        Secretary may not delegate the authority to grant such a 
        waiver.
            (2) Congressional notice.--At least 2 months before a 
        contract award, amendment, or modification for which the 
        Secretary intends to grant such a waiver, the Secretary shall 
        submit to the appropriate congressional committees a report 
        notifying the committees of the waiver and setting forth the 
        reasons for the waiver.
    (b) Production or Provision of Articles or Services.--None of the 
funds authorized to be appropriated to the Secretary by this division 
may be used to produce or provide articles or services for the purpose 
of selling the articles or services to a person outside the Federal 
Government, unless the Secretary determines that comparable articles or 
services are not available from a commercial source in the United 
States.
    (c) Requests for Proposals.--None of the funds authorized to be 
appropriated to the Secretary by this division may be used by the 
Department to prepare or initiate Requests for Proposals for a program 
if the program has not been authorized by Congress.

SEC. 2603. COST SHARING.

    (a) Research and Development.--Except as otherwise provided in this 
division, for research and development programs carried out under this 
division, 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 Commercial Application.--Except as otherwise 
provided in this division, the Secretary shall require at least 50 
percent of the costs directly and specifically related to any 
demonstration or commercial application project under this division to 
be provided from non-Federal sources. The Secretary may reduce 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 
the objectives of this division.
    (c) Calculation of Amount.--In calculating the amount of the non-
Federal commitment under subsection (a) or (b), the Secretary may 
include personnel, services, equipment, and other resources.

SEC. 2604. LIMITATION ON DEMONSTRATION AND COMMERCIAL APPLICATION OF 
              ENERGY TECHNOLOGY.

    Except as otherwise provided in this division, the Secretary shall 
provide funding for scientific or energy demonstration and commercial 
application of energy technology programs, projects, or activities only 
for technologies or processes that can be reasonably expected to yield 
new, measurable benefits to the cost, efficiency, or performance of the 
technology or process.

SEC. 2605. REPROGRAMMING.

    (a) Authority.--The Secretary may use amounts appropriated under 
this division for a program, project, or activity other than the 
program, project, or activity for which such amounts were appropriated 
only if--
            (1) the Secretary has transmitted to the appropriate 
        congressional committees a report described in subsection (b) 
        and a period of 30 days has elapsed after such committees 
        receive the report;
            (2) amounts used for the program, project, or activity do 
        not exceed--
                    (A) 105 percent of the amount authorized for the 
                program, project, or activity; or
                    (B) $250,000 more than the amount authorized for 
                the program, project, or activity,
        whichever is less; and
            (3) the program, project, or activity has been presented 
        to, or requested of, the Congress by the Secretary.
    (b) Report.--(1) The report referred to in subsection (a) is a 
report containing a full and complete statement of the action proposed 
to be taken and the facts and circumstances relied upon in support of 
the proposed action.
    (2) In the computation of the 30-day period under subsection (a), 
there shall be excluded any day on which either House of Congress is 
not in session because of an adjournment of more than 3 days to a day 
certain.
    (c) Limitations.--(1) In no event may the total amount of funds 
obligated by the Secretary pursuant to this division exceed the total 
amount authorized to be appropriated to the Secretary by this division.
    (2) Funds appropriated to the Secretary pursuant to this division 
may not be used for an item for which Congress has declined to 
authorize funds.

               Subtitle B--Other Miscellaneous Provisions

SEC. 2611. NOTICE OF REORGANIZATION.

    The Secretary shall provide notice to the appropriate congressional 
committees not later than 15 days before any reorganization of any 
environmental research or development, scientific or energy research, 
development, or demonstration, or commercial application of energy 
technology program, project, or activity of the Department.

SEC. 2612. LIMITS ON GENERAL PLANT PROJECTS.

    If, at any time during the construction of a civilian environmental 
research and development, scientific or energy research, development, 
or demonstration, or commercial application of energy technology 
project of the Department for which no specific funding level is 
provided by law, the estimated cost (including any revision thereof) of 
the project exceeds $5,000,000, the Secretary may not continue such 
construction unless the Secretary has furnished a complete report to 
the appropriate congressional committees explaining the project and the 
reasons for the estimate or revision.

SEC. 2613. LIMITS ON CONSTRUCTION PROJECTS.

    (a) Limitation.--Except as provided in subsection (b), construction 
on a civilian environmental research and development, scientific or 
energy research, development, or demonstration, or commercial 
application of energy technology project of the Department for which 
funding has been specifically provided by law may not be started, and 
additional obligations may not be incurred in connection with the 
project above the authorized funding amount, whenever the current 
estimated cost of the construction project exceeds by more than 10 
percent the higher of--
            (1) the amount authorized for the project, if the entire 
        project has been funded by the Congress; or
            (2) the amount of the total estimated cost for the project 
        as shown in the most recent budget justification data submitted 
        to Congress.
    (b) Notice.--An action described in subsection (a) may be taken 
if--
            (1) the Secretary has submitted to the appropriate 
        congressional committees a report on the proposed actions and 
        the circumstances making such actions necessary; and
            (2) a period of 30 days has elapsed after the date on which 
        the report is received by the committees.
    (c) Exclusion.--In the computation of the 30-day period described 
in subsection (b)(2), there shall be excluded any day on which either 
House of Congress is not in session because of an adjournment of more 
than 3 days to a day certain.
    (d) Exception.--Subsections (a) and (b) shall not apply to any 
construction project that has a current estimated cost of less than 
$5,000,000.

SEC. 2614. AUTHORITY FOR CONCEPTUAL AND CONSTRUCTION DESIGN.

    (a) Requirement for Conceptual Design.--(1) Subject to paragraph 
(2) and except as provided in paragraph (3), before submitting to 
Congress a request for funds for a construction project that is in 
support of a civilian environmental research and development, 
scientific or energy research, development, or demonstration, or 
commercial application of energy technology program, project, or 
activity of the Department, the Secretary shall complete a conceptual 
design for that project.
    (2) If the estimated cost of completing a conceptual design for a 
construction project exceeds $750,000, the Secretary shall submit to 
Congress a request for funds for the conceptual design before 
submitting a request for funds for the construction project.
    (3) The requirement in paragraph (1) does not apply to a request 
for funds for a construction project, the total estimated cost of which 
is less than $5,000,000.
    (b) Authority for Construction Design.--(1) The Secretary may carry 
out construction design (including architectural and engineering 
services) in connection with any proposed construction project that is 
in support of a civilian environmental research and development, 
scientific or energy research, development, and demonstration, or 
commercial application of energy technology program, project, or 
activity of the Department if the total estimated cost for such design 
does not exceed $250,000.
    (2) If the total estimated cost for construction design in 
connection with any construction project described in paragraph (1) 
exceeds $250,000, funds for such design must be specifically authorized 
by law.

SEC. 2615. NATIONAL ENERGY POLICY DEVELOPMENT GROUP MANDATED REPORTS.

    (a) The Secretary's Review of Energy Efficiency Renewable Energy, 
and Alternative Energy Research and Development.--Upon completion of 
the Secretary's review of current funding and historic performance of 
the Department's energy efficiency, renewable energy, and alternative 
energy research and development programs in response to the 
recommendations of the May 16, 2001, Report of the National Energy 
Policy Development Group, the Secretary shall transmit a report 
containing the results of such review to the appropriate congressional 
committees.
    (b) Review and Recommendations on Using the Nation's Energy 
Resources More Efficiently.--Upon completion of the Office of Science 
and Technology Policy and the President's Council of Advisors on 
Science and Technology reviewing and making recommendations on using 
the Nation's energy resources more efficiently, in response to the 
recommendation of the May 16, 2001, Report of the National Energy 
Policy Development Group, the Director of the Office of Science and 
Technology Policy shall transmit a report containing the results of 
such review and recommendations to the appropriate congressional 
committees.

SEC. 2616. PERIODIC REVIEWS AND ASSESSMENTS.

    The Secretary shall enter into appropriate arrangements with the 
National Academies of Sciences and Engineering to ensure that there be 
periodic reviews and assessments of the programs authorized by this 
division, as well as the measurable cost and performance-based goals 
for such programs as established under section 2004, and the progress 
on meeting such goals. Such reviews and assessments shall be conducted 
at least every 5 years, or more often as the Secretary considers 
necessary, and the Secretary shall transmit to the appropriate 
congressional committees reports containing the results of such reviews 
and assessments.

                               DIVISION C

SEC. 3001. SHORT TITLE.

    (a) Short Title.--This division may be cited as the ``Energy Tax 
Policy Act of 2001''.
    (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 I--CONSERVATION

SEC. 3101. CREDIT FOR RESIDENTIAL SOLAR ENERGY 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 SOLAR ENERGY 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, and
            ``(2) 15 percent of the qualified solar water heating 
        property expenditures made by the taxpayer during the taxable 
        year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed under subsection 
        (a) shall not exceed--
                    ``(A) $2,000 for each system of property described 
                in subsection (c)(1), and
                    ``(B) $2,000 for each system of property described 
                in subsection (c)(2).
            ``(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 equipment, 
                such equipment 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, and
                    ``(B) in the case of a photovoltaic system, such 
                system meets appropriate fire and electric code 
                requirements.
            ``(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 sections 23, 25D, 
                and 25E) and section 27 for the taxable year.
    ``(c) 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 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 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) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the property described in paragraph (1) or (2) 
        and for piping or wiring to interconnect such property to the 
        dwelling unit shall be taken into account for purposes of this 
        section.
            ``(5) 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.
    ``(d) Special Rules.--
            ``(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 he owns, such 
                individual shall be treated as having made his 
                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.--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)(4)(A)).
    ``(e) 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.
    ``(f) Termination.--The credit allowed under this section shall not 
apply to taxable years beginning after December 31, 2006 (December 31, 
2008, with respect to qualified photovoltaic property expenditures).''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 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 25C(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25C.''.
            (2) 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 solar energy 
                                        property.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2001.

SEC. 3102. EXTENSION AND EXPANSION OF CREDIT FOR ELECTRICITY PRODUCED 
              FROM RENEWABLE RESOURCES.

    (a) Extension of Credit for Wind and Closed-Loop Biomass 
Facilities.--Subparagraphs (A) and (B) of section 45(c)(3) are each 
amended by striking ``2002'' and inserting ``2007''.
    (b) Expansion of Credit for Open-loop biomass and landfill gas 
facilities.--Paragraph (3) of section 45(c) is amended by adding at the 
end the following new subparagraphs:
                    ``(D) Open-loop biomass facilities.--In the case of 
                a facility using open-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, 2007.
                    ``(E) Landfill gas facilities.--In the case of a 
                facility producing electricity from gas derived from 
                the biodegradation of municipal solid waste, the term 
                `qualified facility' means any facility owned by the 
                taxpayer which is originally placed in service before 
                January 1, 2007.''.
    (c) Definition and Special Rules.--Subsection (c) of section 45 is 
amended by adding at the end the following new paragraphs:
            ``(5) Open-loop biomass.--The term `open-loop 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,
                    ``(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.
        Such term shall not include closed-loop biomass.
            ``(6) Reduced credit for certain preeffective date 
        facilities.--In the case of any facility described in 
        subparagraph (D) or (E) of paragraph (3) which is placed in 
        service before the date of the enactment of this subparagraph--
                    ``(A) subsection (a)(1) shall be applied by 
                substituting `1.0 cents' for `1.5 cents', and
                    ``(B) the 5-year period beginning on the date of 
                the enactment of this paragraph shall be substituted in 
                lieu of the 10-year period in subsection (a)(2)(A)(ii).
            ``(7) Limit on reductions for grants, etc., for open-loop 
        biomass facilities.--If the amount of the credit determined 
        under subsection (a) with respect to any open-loop biomass 
        facility is required to be reduced under paragraph (3) of 
        subsection (b), the fraction under such paragraph shall in no 
        event be greater than \4/5\.
            ``(8) Coordination with section 29.--The term `qualified 
        facility' shall not include any facility the production from 
        which is allowed as a credit under section 29 for the taxable 
        year or any prior taxable year.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to electricity sold after the date of the enactment of this Act.

SEC. 3103. CREDIT FOR QUALIFIED STATIONARY FUEL CELL POWERPLANTS.

    (a) Business Property.--
            (1) 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) equipment which is part of a 
                        qualified stationary fuel cell powerplant,''.
            (2) Qualified stationary fuel cell powerplant.--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 stationary fuel cell powerplant.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `qualified stationary 
                fuel cell powerplant' means a stationary fuel cell 
                power plant that has an electricity-only generation 
                efficiency greater than 30 percent.
                    ``(B) Limitation.--In the case of qualified 
                stationary fuel cell powerplant placed in service 
                during the taxable year, the credit under subsection 
                (a) for such year may not exceed $1,000 for each 
                kilowatt of capacity.
                    ``(C) Stationary fuel cell power plant.--The term 
                `stationary 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.
                    ``(D) Termination.--Such term shall not include any 
                property placed in service after December 31, 2006.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2001, 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).
    (b) Nonbusiness Property.--
            (1) In general.--Subpart A of part IV of subchapter A of 
        chapter 1 (relating to nonrefundable personal credits) is 
        amended by inserting after section 25C the following new 
        section:

``SEC. 25D. NONBUSINESS QUALIFIED STATIONARY FUEL CELL POWERPLANT.

    ``(a) In General.--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 qualified stationary 
fuel cell powerplant expenditures which are paid or incurred during 
such year.
    ``(b) Limitations.--
            ``(1) In general.--The credit allowed under subsection (a) 
        for the taxable year and all prior taxable years shall not 
        exceed $1,000 for each kilowatt of capacity.
            ``(2) 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 sections 23 and 
                25E) and section 27 for the taxable year.
    ``(c) Qualified Stationary Fuel Cell Powerplant Expenditures.--For 
purposes of this section, the term `qualified stationary fuel cell 
powerplant expenditures' means expenditures by the taxpayer for any 
qualified stationary fuel cell powerplant (as defined in section 
48(a)(4))--
            ``(1) which meets the requirements of subparagraphs (B) and 
        (D) of section 48(a)(3), and
            ``(2) which is installed on or in connection with a 
        dwelling unit--
                    ``(A) which is located in the United States, and
                    ``(B) which is used by the taxpayer as a residence.
Such term includes expenditures for labor costs properly allocable to 
the onsite preparation, assembly, or original installation of the 
property.
    ``(d) Special Rules.--For purposes of this section, rules similar 
to the rules of section 25C(d) shall apply.
    ``(e) 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.
    ``(f) Termination.--This section shall not apply to any expenditure 
made after December 31, 2006.''.
            (2) Conforming Amendments.--
                    (A) Subsection (a) of section 1016 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 25D(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25D.''.
                    (B) 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 25C the following 
                new item:

                              ``Sec. 25D. Nonbusiness qualified 
                                        stationary fuel cell 
                                        powerplant.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to expenditures paid or incurred after December 31, 
        2001.

SEC. 3104. 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:

``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),
            ``(3) the new qualified alternative fuel motor vehicle 
        credit determined under subsection (d), and
            ``(4) the advanced lean burn technology motor vehicle 
        credit determined under subsection (e).
    ``(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:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy 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 or 8,500 lbs............................            11.1 mpg.
                            ``(ii) In the case of a light truck:

``If vehicle inertia weight class   The 2000 model year city fuel 
        is:                                 economy 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 or 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 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      The credit amount is:
        available power is:
    At least 2.5 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      The credit amount is:
        available power is:
    At least 20 percent but less than 30 percent..              $1,500 
    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      The credit amount is:
        available power 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      The credit amount is:
        available power 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 passenger 
                        automobile or light truck shall be increased 
                        by--
                                    ``(I) $1,000, if such vehicle 
                                achieves at least 125 percent but less 
                                than 150 percent of the 2000 model year 
                                city fuel economy,
                                    ``(II) $1,500, if such vehicle 
                                achieves at least 150 percent but less 
                                than 175 percent of the 2000 model year 
                                city fuel economy,
                                    ``(III) $2,000, if such vehicle 
                                achieves at least 175 percent but less 
                                than 200 percent of the 2000 model year 
                                city fuel economy,
                                    ``(IV) $2,500, if such vehicle 
                                achieves at least 200 percent but less 
                                than 225 percent of the 2000 model year 
                                city fuel economy,
                                    ``(V) $3,000, if such vehicle 
                                achieves at least 225 percent but less 
                                than 250 percent of the 2000 model year 
                                city fuel economy, and
                                    ``(VI) $3,500, 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.
                            ``(iii) Option to use like vehicle.--For 
                        purposes of clause (i), at the option of the 
                        vehicle manufacturer, the increase for fuel 
                        efficiency may be calculated by comparing the 
                        new qualified hybrid motor vehicle to a `like 
                        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 increase 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 increase 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 increase 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 increase credit amount is:
    2002..........................................             $14,000 
    2003..........................................             $12,000 
    2004..........................................             $10,000 
    2005..........................................              $8,000 
    2006..........................................              $6,000.
                    ``(D) Conservation credit.--
                            ``(i) Amount.--The amount determined under 
                        subparagraph (A)(i) with respect to a passenger 
                        automobile or light truck shall be increased 
                        by--
                                    ``(I) $250, if such vehicle 
                                achieves a lifetime fuel savings of at 
                                least 1,500 gallons of gasoline, and
                                    ``(II) $500, if such vehicle 
                                achieves a lifetime fuel savings of at 
                                least 2,500 gallons of gasoline.
                            ``(ii) Lifetime fuel savings for like 
                        vehicle.--For purposes of clause (i), at the 
                        option of the vehicle manufacturer, the 
                        lifetime fuel savings fuel may be calculated by 
                        comparing the new qualified hybrid motor 
                        vehicle to a `like vehicle'.
                    ``(E) 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 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 battery or other 
                                electrical storage device, during a 
                                standard 10 second pulse power test, 
                                divided by the sum of the battery or 
                                other electrical storage device 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 battery or other 
                                electrical storage device, during a 
                                standard 10 second pulse power test, 
                                divided by the vehicle's total traction 
                                power. The term `total traction power' 
                                means the sum of the electric motor 
                                peak power and the heat engine peak 
                                power of the vehicle, except that if 
                                the electric motor is the sole means by 
                                which the vehicle can be driven, the 
                                total traction power is the peak 
                                electric motor power.
                            ``(iv) Like vehicle.--For purposes of 
                        subparagraph (B)(iii), the term `like vehicle' 
                        for a new qualified hybrid motor vehicle 
                        derived from a conventional production vehicle 
                        produced in the same model year means a model 
                        that is equivalent in the following areas:
                                    ``(I) Body style (2-door or 4-
                                door).
                                    ``(II) Transmission (automatic or 
                                manual).
                                    ``(III) Acceleration performance 
                                (<plus-minus> 0.05 seconds).
                                    ``(IV) Drivetrain (2-wheel drive or 
                                4-wheel drive).
                                    ``(V) Certification by the 
                                Administrator of the Environmental 
                                Protection Agency.
                            ``(v) Lifetime fuel savings.--For purposes 
                        of subsection (c)(2)(D), the term `lifetime 
                        fuel savings' shall be calculated by dividing 
                        120,000 by the difference between the 2000 
                        model year city fuel economy for the vehicle 
                        inertia weight class and the city fuel economy 
                        for the new qualified hybrid motor vehicle.
            ``(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, 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,
                    ``(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) 50 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 from an 
                        applicable State certifying the vehicle for 
                        sale or lease 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 95/5 mixed-fuel 
                        vehicle, 95 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 from 
                                an applicable State certifying the 
                                vehicle for sale or lease 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) 95/5 mixed-fuel vehicle.--For purposes of 
                this subsection, the term `95/5 mixed-fuel vehicle' 
                means a mixed-fuel vehicle which operates using at 
                least 95 percent alternative fuel and not more than 5 
                percent petroleum-based fuel.
    ``(e) Advanced Lean Burn Technology Motor Vehicle Credit.--
            ``(1) In general.--For purposes of subsection (a), the 
        advanced lean burn technology motor vehicle credit determined 
        under this subsection with respect to a new qualified advanced 
        lean burn technology motor vehicle placed in service by the 
        taxpayer during the taxable year is the credit amount 
        determined under paragraph (2).
            ``(2) Credit amount.--
                    ``(A) Increase for fuel efficiency.--The credit 
                amount determined under this paragraph shall be--
                            ``(i) $1,000, if such vehicle achieves at 
                        least 125 percent but less than 150 percent of 
                        the 2000 model year city fuel economy,
                            ``(ii) $1,500, if such vehicle achieves at 
                        least 150 percent but less than 175 percent of 
                        the 2000 model year city fuel economy,
                            ``(iii) $2,000, if such vehicle achieves at 
                        least 175 percent but less than 200 percent of 
                        the 2000 model year city fuel economy,
                            ``(iv) $2,500, if such vehicle achieves at 
                        least 200 percent but less than 225 percent of 
                        the 2000 model year city fuel economy,
                            ``(v) $3,000, if such vehicle achieves at 
                        least 225 percent but less than 250 percent of 
                        the 2000 model year city fuel economy, and
                            ``(vi) $3,500, if such vehicle achieves at 
                        least 250 percent of the 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.
                    ``(B) Conservation credit.--The amount determined 
                under subparagraph (A) with respect to an advanced lean 
                burn technology motor vehicle shall be increased by--
                            ``(i) $250, if such vehicle achieves a 
                        lifetime fuel savings of at least 1,500 gallons 
                        of gasoline, and
                            ``(ii) $500, if such vehicle achieves a 
                        lifetime fuel savings of at least 2,500 gallons 
                        of gasoline.
                    ``(C) Option to use like vehicle.--At the option of 
                the vehicle manufacturer, the increase for fuel 
                efficiency and conservation credit may be calculated by 
                comparing the new advanced lean-burn technology motor 
                vehicle to a like vehicle.
            ``(3) Definitions.--For purposes of this subsection.--
                    ``(A) Advanced lean burn technology motor 
                vehicle.--The term `advanced lean burn technology motor 
                vehicle' means a motor vehicle with an internal 
                combustion engine that--
                            ``(i) is designed to operate primarily 
                        using more air than is necessary for complete 
                        combustion of the fuel,
                            ``(ii) incorporates direct injection,
                            ``(iii) achieves at least 125 percent of 
                        the 2000 model year city fuel economy, and
                            ``(iv) for 2004 and later model vehicles, 
                        has received a certificate that such vehicle 
                        meets or exceeds the Bin 5, Tier 2 emission 
                        levels (for passenger vehicles) or Bin 8, Tier 
                        2 emission levels (for light trucks) 
                        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.
                    ``(B) Like vehicle.--The term `like vehicle' for an 
                advanced lean burn technology motor vehicle derived 
                from a conventional production vehicle produced in the 
                same model year means a model that is equivalent in the 
                following areas:
                            ``(i) Body style (2-door or 4-door),
                            ``(ii) Transmission (automatic or manual),
                            ``(iii) Acceleration performance 
                        (<plus-minus> 0.05 seconds).
                            ``(iv) Drivetrain (2-wheel drive or 4-wheel 
                        drive).
                            ``(v) Certification by the Administrator of 
                        the Environmental Protection Agency.
                    ``(C) Lifetime fuel savings.--The term `lifetime 
                fuel savings' shall be calculated by dividing 120,000 
                by the difference between the 2000 model year city fuel 
                economy for the vehicle inertia weight class and the 
                city fuel economy for the new qualified hybrid motor 
                vehicle.
    ``(f) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for the taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under subpart A and 
        sections 27, 29, and 30A for the taxable year.
    ``(g) 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) 2000 model year city fuel economy.--The 2000 model 
        year city fuel economy with respect to any vehicle shall be 
        measured under rules similar to the rules under section 
        4064(c).
            ``(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.
            ``(6) No double benefit.--The amount of any deduction or 
        credit allowable under this chapter (other than the credit 
        allowable under this section)--
                    ``(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 in any sale or lease document the 
        specific amount of any credit otherwise allowable to the entity 
        under this section and reduces the sale or lease price of such 
        vehicle by an equivalent amount of such credit.
            ``(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) 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 (f) for such 
                taxable year (referred to as the `unused credit year' 
                in this paragraph), such excess shall be allowed as a 
                credit carryforward for each of the 20 taxable years 
                following the unused credit year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the 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.
    ``(h) Regulations.--
            ``(1) In general.--The Secretary shall promulgate such 
        regulations as necessary to carry out the provisions of this 
        section.
            ``(2) Administrator of environmental protection agency.--
        The Administrator of the Environmental Protection Agency, in 
        coordination with the Secretary of Transportation and the 
        Secretary of the Treasury, shall prescribe such regulations as 
        necessary to determine whether a motor vehicle meets the 
        requirements to be eligible for a credit under this section.
    ``(i) Termination.--This section shall not apply to any property 
placed in service 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, 
        2007.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) 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:
            ``(31) to the extent provided in section 30B(g)(5).''.
            (2) Section 6501(m) is amended by inserting ``30B(g)(10),'' 
        after ``30(d)(4),''.
            (3) 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:

                              ``Sec. 30B. Alternative motor vehicle 
                                        credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.

SEC. 3105. EXTENSION OF DEDUCTION FOR CERTAIN REFUELING PROPERTY.

    (a) In General.--Section 179A(f) (relating to termination) is 
amended by striking ``2004'' and inserting ``2007''.
    (b) Modification of Phaseout.--Subparagraph (B) of section 
179A(b)(1) is amended--
            (1) in clause (i), by striking ``2002'' and inserting 
        ``2005'',
            (2) in clause (ii), by striking ``2003'' and inserting 
        ``2006'', and
            (3) in clause (iii), by striking ``2004'' and inserting 
        ``2007''.

SEC. 3106. 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:
            ``(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, the lesser of--
                            ``(i) 10 percent of the manufacturer's 
                        suggested retail price of the vehicle, or
                            ``(ii) $4,000.
                    ``(B) In the case of a vehicle not described in 
                subparagraph (A) with a gross vehicle weight rating not 
                exceeding 8,500 pounds--
                            ``(i) $4,000, or
                            ``(ii) $5,000, if such vehicle is--
                                    ``(I) capable of a driving range of 
                                at least 70 miles on a single charge of 
                                the vehicle's rechargeable batteries 
                                and 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 pounds but not exceeding 
                14,000 pounds, $10,000.
                    ``(D) In the case of a vehicle with a gross vehicle 
                weight rating exceeding 14,000 pounds 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)''.
                    (B) Section 55(c)(2) 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), 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:
            ``(5) No double benefit.--The amount of any deduction or 
        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 in any sale or lease contract the 
        specific amount of any credit otherwise allowable to the entity 
        under this section and reduces the sale or lease price of such 
        vehicle by an equivalent amount of such credit.
            ``(7) 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)(3) for 
                such taxable year, such excess shall be allowed as a 
                credit carryforward for each of the 20 taxable years 
                following such taxable year.
                    ``(B) Rules.--Rules similar to the rules of section 
                39 shall apply with respect to the credit carryforward 
                under subparagraph (A).''
    (d) Extension.--Section 30(e) (relating to termination) is amended 
by striking ``2004'' and inserting ``2007''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001, in taxable 
years ending after such date.

SEC. 3107. TAX CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

``SEC. 45G. 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 an energy efficient 
                clothes washer described in subsection (d)(2)(A) or an 
                energy efficient refrigerator described in subsection 
                (d)(3)(B)(i), and
                    ``(B) $100 in the case of any other energy 
                efficient clothes washer or energy efficient 
                refrigerator.
            ``(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 1998, 1999, and 
                        2000.
                    ``(B) Categories.--For purposes of subparagraph 
                (A), the categories are--
                            ``(i) energy efficient clothes washers 
                        described in subsection (d)(2)(A),
                            ``(ii) energy efficient clothes washers 
                        described in subsection (d)(2)(B),
                            ``(iii) energy efficient refrigerators 
                        described in subsection (d)(3)(B)(i), and
                            ``(iv) energy efficient refrigerators 
                        described in subsection (d)(3)(B)(ii).
                    ``(C) Special rule for 2001 production.--For 
                purposes of determining eligible production for 
                calendar year 2001--
                            ``(i) only production after the date of the 
                        enactment of this section shall be taken into 
                        account under subparagraph (A)(i), and
                            ``(ii) the amount taken into account under 
                        subparagraph (A)(ii) shall be an amount which 
                        bears the same ratio to the amount which would 
                        (but for this subparagraph) be taken into 
                        account under subparagraph (A)(ii) as--
                                    ``(I) the number of days in 
                                calendar year 2001 after the date of 
                                the enactment of this section, bears to
                                    ``(II) 365.
    ``(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) Qualified Energy Efficient Appliance.--For purposes of this 
section:
            ``(1) In general.--The term `qualified energy efficient 
        appliance' means--
                    ``(A) an energy efficient clothes washer, or
                    ``(B) an energy efficient refrigerator.
            ``(2) Energy efficient clothes washer.--The term `energy 
        efficient clothes washer' means a residential clothes washer, 
        including a residential style coin operated washer, which is 
        manufactured with--
                    ``(A) a 1.26 MEF or greater, or
                    ``(B) a 1.42 MEF (1.5 MEF for washers produced 
                after 2004) or greater.
            ``(3) Energy efficient refrigerator.--The term `energy 
        efficient refrigerator' means an automatic defrost 
        refrigerator-freezer which--
                    ``(A) has an internal volume of at least 16.5 cubic 
                feet, and
                    ``(B) consumes--
                            ``(i) 10 percent less kw/hr/yr than the 
                        energy conservation standards promulgated by 
                        the Department of Energy for refrigerators 
                        produced during 2001, and
                            ``(ii) 15 percent less kw/hr/yr than such 
                        energy conservation standards for refrigerators 
                        produced after 2001.
            ``(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 energy efficient refrigerators 
        described in subsection (d)(3)(B)(i) produced after 2004, and
            ``(2) with respect to all other qualified energy efficient 
        appliances produced after 2006.''.
    (b) Limitation on Carryback.--Section 39(d) (relating to transition 
rules) is amended by adding at the end the following new paragraph:
            ``(11) 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 45G may be 
        carried to a taxable year ending before the date of the 
        enactment of section 45G.''.
    (c) Conforming Amendment.--Section 38(b) (relating to general 
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 energy efficient appliance credit determined 
        under section 45G(a).''.
    (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 45F the following new item:

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

SEC. 3108. 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) is amended by inserting 
after section 25D the following new section:

``SEC. 25E. 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 20 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 $2,000.
            ``(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 $2,000 reduced by the sum of the 
        credits allowed under subsection (a) to the taxpayer with 
        respect to the dwelling for all prior taxable years.
            ``(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 23) and 
                section 27 for the taxable year.
    ``(c) Carryforward of Unused Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by subsection (b)(3) for 
such 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 meets the 
prescriptive criteria for such component established by the 1998 
International Energy Conservation Code, if--
            ``(1) such component 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 commences with the 
        taxpayer, and
            ``(3) such component reasonably can be expected to remain 
        in use for at least 5 years.
If the aggregate cost of such components with respect to any dwelling 
exceeds $1,000, such components shall be treated as qualified energy 
efficiency improvements only if such components are also certified in 
accordance with subsection (e) as meeting such criteria.
    ``(e) Certification.--The certification described in subsection (d) 
shall be--
            ``(1) determined on the basis of the technical 
        specifications or applicable ratings (including product 
        labeling requirements) for the measurement of energy 
        efficiency, based upon energy use or building envelope 
        component performance, for the energy efficient building 
        envelope component,
            ``(2) provided by a local building regulatory authority, a 
        utility, a manufactured home production inspection primary 
        inspection agency (IPIA), or an accredited home energy rating 
        system provider who is accredited by or otherwise authorized to 
        use approved energy performance measurement methods by the Home 
        Energy Ratings Systems Council or the National Association of 
        State Energy Officials, and
            ``(3) made in writing in a manner that specifies in readily 
        verifiable fashion the energy efficient building envelope 
        components installed and their respective energy efficiency 
        levels.
    ``(f) Definitions and Special Rules.--
            ``(1) 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.
            ``(2) 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 he owns, such 
                individual shall be treated as having paid his 
                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.
            ``(3) Building envelope component.--The term `building 
        envelope component' means insulation material or system which 
        is specifically and primarily designed to reduce the heat loss 
        or gain of a dwelling when installed in or on such dwelling, 
        exterior windows (including skylights) and doors, and metal 
        roofs with appropriate pigmented coatings which are 
        specifically and primarily designed to reduce the heat gain of 
        a dwelling when installed in or on such dwelling.
            ``(4) 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.--This section shall apply to 
qualified energy efficiency improvements installed after December 31, 
2001 and before January 1, 2007.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 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 25E(g), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25E.''.
            (2) 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 25D the following new item:

                              ``Sec. 25E. Energy efficiency 
                                        improvements to existing 
                                        homes.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2001.

SEC. 3109. BUSINESS 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) is amended by inserting after 
section 45G the following new section:

``SEC. 45H. 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 qualified new energy efficient 
home during construction of such home.
    ``(b) Limitations.--
            ``(1) Maximum credit.--
                    ``(A) In general.--The credit allowed by this 
                section with respect to a dwelling shall not exceed 
                $2,000.
                    ``(B) Prior credit amounts on same dwelling taken 
                into account.--If a credit was allowed 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 $2,000 reduced 
                by the sum of the credits allowed under subsection (a) 
                with respect to the dwelling 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 
                qualified rehabilitation expenditures (as defined in 
                section 47(c)(2)) 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 new energy efficient 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 
        appliance.
            ``(3) Qualified new energy efficient home.--The term 
        `qualified new energy efficient home' means a dwelling--
                    ``(A) located in the United States,
                    ``(B) the construction of which is substantially 
                completed after December 31, 2001,
                    ``(C) the original use of which is as a principal 
                residence (within the meaning of section 121) which 
                commences with the person who acquires such dwelling 
                from the eligible contractor, and
                    ``(D) which is certified to have a level of annual 
                heating and cooling energy consumption that is at least 
                30 percent below the annual level of heating and 
                cooling energy consumption of a comparable dwelling 
                constructed in accordance with the standards of the 
                1998 International Energy Conservation Code.
            ``(4) Construction.--The term `construction' includes 
        reconstruction and rehabilitation.
            ``(5) Acquire.--The term `acquire' includes purchase and, 
        in the case of reconstruction and rehabilitation, such term 
        includes a binding written contract for such reconstruction or 
        rehabilitation.
            ``(6) Building envelope component.--The term `building 
        envelope component' means insulation material or system which 
        is specifically and primarily designed to reduce the heat loss 
        or gain of a dwelling when installed in or on such dwelling, 
        exterior windows (including skylights) and doors, and metal 
        roofs with appropriate pigmented coatings which are 
        specifically and primarily designed to reduce the heat gain of 
        a dwelling when installed in or on such dwelling.
            ``(7) Manufactured home included.--The term `dwelling' 
        includes a manufactured home conforming to Federal Manufactured 
        Home Construction and Safety Standards (24 C.F.R. 3280).
    ``(d) Certification.--
            ``(1) Method.--A certification described in subsection 
        (c)(3)(D) shall be determined on the basis of one of the 
        following methods:
                    ``(A) The technical specifications or applicable 
                ratings (including product labeling requirements) for 
                the measurement of energy efficiency for the energy 
                efficient building envelope component or energy 
                efficient heating or cooling appliance, based upon 
                energy use or building envelope component performance.
                    ``(B) An energy performance measurement method that 
                utilizes computer software approved by organizations 
                designated by the Secretary.
            ``(2) Provider.--Such certification shall be provided by--
                    ``(A) in the case of a method described in 
                paragraph (1)(A), a local building regulatory 
                authority, a utility, a manufactured home production 
                inspection primary inspection agency (IPIA), or an 
                accredited home energy rating systems provider who is 
                accredited by, or otherwise authorized to use, approved 
                energy performance measurement methods by the Home 
                Energy Ratings Systems Council or the National 
                Association of State Energy Officials, or
                    ``(B) in the case of a method described in 
                paragraph (1)(B), an individual recognized by an 
                organization designated by the Secretary for such 
                purposes.
            ``(3) Form.--Such certification 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 appliances installed and their 
        respective energy efficiency levels, and in the case of a 
        method described in subparagraph (B) of paragraph (1), 
        accompanied by written analysis documenting the proper 
        application of a permissible energy performance measurement 
        method to the specific circumstances of such dwelling.
            ``(4) Regulations.--
                    ``(A) In general.--In prescribing regulations under 
                this subsection for energy performance measurement 
                methods, the Secretary shall prescribe procedures for 
                calculating annual energy costs for heating and cooling 
                and cost savings and for the reporting of the results. 
                Such regulations shall--
                            ``(i) be based on the National Home Energy 
                        Rating Technical Guidelines of the National 
                        Association of State Energy Officials, the Home 
                        Energy Rating Guidelines of the Home Energy 
                        Rating Systems Council, or the modified 1998 
                        California Residential ACM manual,
                            ``(ii) provide that any calculation 
                        procedures be developed such that the same 
                        energy efficiency measures allow a home to 
                        qualify for the credit under this section 
                        regardless of whether the house uses a gas or 
                        oil furnace or boiler or an electric heat pump, 
                        and
                            ``(iii) require that any computer software 
                        allow for the printing of the Federal tax forms 
                        necessary for the credit under this section and 
                        explanations for the homebuyer of the energy 
                        efficient features that were used to comply 
                        with the requirements of this section.
                    ``(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 National Association of State Energy Officials.
    ``(e) 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.
    ``(f) Application of Section.--Subsection (a) shall apply to 
dwellings purchased during the period beginning on January 1, 2002, and 
ending on December 31, 2006.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to current year business credit) 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 thereof the following new paragraph:
            ``(17) the new energy efficient home credit determined 
        under section 45H.''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable) is amended by adding at the 
end thereof the following new subsection:
    ``(d) New Energy Efficient Home Expenses.--No deduction shall be 
allowed for that portion of expenses for a new energy efficient 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 45H.''.
    (d) Limitation on Carryback.--Subsection (d) of section 39 is 
amended by adding at the end the following new paragraph:
            ``(12) 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 45H may be carried back to any taxable 
        year ending before January 1, 2002.''.
    (e) Deduction for Certain Unused Business Credits.--Subsection (c) 
of section 196 is amended by striking ``and'' at the end of paragraph 
(9), by striking the period at the end of paragraph (10) and inserting 
``, and'', and by adding after paragraph (10) the following new 
paragraph:
            ``(11) the new energy efficient home credit determined 
        under section 45H.''.
    (f) 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 45G the following new item:

                              ``Sec. 45H. New energy efficient home 
                                        credit.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 31, 2001.

SEC. 3110. ALLOWANCE OF DEDUCTION FOR ENERGY EFFICIENT COMMERCIAL 
              BUILDING PROPERTY.

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

``SEC. 179B. DEDUCTION FOR ENERGY EFFICIENT COMMERCIAL BUILDING 
              PROPERTY.

    ``(a) Allowance of Deduction.--
            ``(1) In general.--There shall be allowed as a deduction an 
        amount equal to energy efficient commercial building property 
        expenditures made by a taxpayer for the taxable year.
            ``(2) Maximum amount of deduction.--The amount of energy 
        efficient commercial building property expenditures taken into 
        account under paragraph (1) shall not exceed an amount equal to 
        the product of--
                    ``(A) $2.25, and
                    ``(B) the square footage of the building with 
                respect to which the expenditures are made.
            ``(3) Year deduction allowed.--The deduction under 
        paragraph (1) shall be allowed for the taxable year in which 
        the building is placed in service.
    ``(b) Energy Efficient Commercial Building Property Expenditures.--
For purposes of this section, 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--
            ``(1) for which depreciation is allowable under section 
        167,
            ``(2) which is located in the United States, and
            ``(3) 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 subsection 
(c)). Such term includes expenditures for labor costs properly 
allocable to the onsite preparation, assembly, or original installation 
of the property.
    ``(c) Energy Efficient Commercial Building Property.--For purposes 
of subsection (b)--
            ``(1) 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 paragraph 
        (2) and certified by qualified professionals as provided under 
        subsection (f).
            ``(2) 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 1998 California 
        Nonresidential ACM Manual. These procedures shall meet the 
        following requirements:
                    ``(A) 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.
                    ``(B) 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 
                        subsection (a) 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 subsection (a) shall be a fraction of 
                        such expenses based on the performance of less 
                        than all energy-using systems in accordance 
                        with subparagraph (C).
                    ``(C) 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.
                    ``(D) The calculational methods under this 
                subparagraph need not comply fully with section 11 of 
                such Standard 90.1-1999.
                    ``(E) 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.
                    ``(F) 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 1998 
                California Nonresidential ACM 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.
            ``(3) Computer software.--
                    ``(A) In general.--Any calculation under this 
                subsection shall be prepared by qualified computer 
                software.
                    ``(B) Qualified computer software.--For purposes of 
                this paragraph, 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 section, 
                        and
                            ``(iii) which provides a notice form which 
                        summarizes the energy efficiency features of 
                        the building and its projected annual energy 
                        costs.
    ``(d) 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 section.
    ``(e) 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 subsection (c)(3)(B)(iii).
    ``(f) Certification.--The Secretary, in consultation with the 
Secretary of Energy, shall establish requirements for certification and 
compliance procedures similar to the procedures under section 45H(d).
    ``(g) Basis Reduction.--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).
    ``(h) Termination.--This section shall not apply to property placed 
in service after December 31, 2006.''.
    (b) Conforming Amendments.--
            (1) Section 1016(a) 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 inserting the 
        following new paragraph:
            ``(33) to the extent provided in section 179B(g).''.
            (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 adding after section 179A the 
following new item:

                              ``Sec. 179B. Deduction for energy 
                                        efficient commercial building 
                                        property.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3111. ALLOWANCE OF DEDUCTION FOR QUALIFIED ENERGY MANAGEMENT 
              DEVICES AND RETROFITTED QUALIFIED METERS.

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

``SEC. 179C. DEDUCTION FOR QUALIFIED ENERGY MANAGEMENT DEVICES AND 
              RETROFITTED METERS.

    ``(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) 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) is amended by striking ``or 179B'' 
        each place it appears in the heading and text and inserting ``, 
        179B, or 179C''.
            (3) Section 1016(a) 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 inserting after 
        paragraph (33) the following new paragraph:
            ``(34) to the extent provided in section 179C(e)(1).''.
            (4) Section 1245(a) 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 is amended by inserting after the 
        item relating to section 179B the following new item:

                              ``Sec. 179C. Deduction for qualified 
                                        energy management devices and 
                                        retrofitted meters.''.
    (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.

SEC. 3112. 3-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.

SEC. 3113. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.

    (a) In General.--Subparagraph (A) of section 48(a)(3) (defining 
energy property) 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 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, 2001, 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
                                    ``(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)(1)), 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 in paragraph (3) 
                                which follows subparagraph (D) shall 
                                not apply to combined heat and power 
                                system property.
                    ``(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 is amended by adding at the end the 
following new paragraph:
            ``(13) 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, 2002.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2001.

SEC. 3114. NEW NONREFUNDABLE PERSONAL CREDITS ALLOWED AGAINST REGULAR 
              AND MINIMUM TAXES.

    (a) In General.--Paragraph (1) of section 26(a) is amended by 
striking ``and 25B'' and inserting ``25B, 25C, 25D, and 25E''.
    (b) Conforming Amendments.--
            (1) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
        and inserting ``, 25B, 25C, 25D, and 25E''.
            (2) Section 25(e)(1)(C) is amended by inserting ``25C, 25D, 
        and 25E'' after ``25B,''.
            (3) Section 25B(g)(2) is amended by striking ``section 23'' 
        and inserting ``sections 23, 25C, 25D, and 25E''.
            (4) Section 904(h) is amended by striking ``and 25B'' and 
        inserting ``25B, 25C, 25D, and 25E''.
            (5) Section 1400C(d) is amended by striking ``and 25B'' and 
        inserting ``25B, 25C, 25D, and 25E''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3115. PHASEOUT OF 4.3-CENT MOTOR FUEL EXCISE TAXES ON RAILROADS 
              AND INLAND WATERWAY TRANSPORTATION WHICH REMAIN IN 
              GENERAL FUND.

    (a) Taxes on Trains.--
            (1) In general.--Clause (ii) of section 4041(a)(1)(C) is 
        amended by striking subclauses (I), (II), and (III) and 
        inserting the following new subclauses:
                                    ``(I) 3.3 cents per gallon after 
                                September 30, 2001, and before January 
                                1, 2005,
                                    ``(II) 2.3 cents per gallon after 
                                December 31, 2004, and before January 
                                1, 2007,
                                    ``(III) 1.3 cents per gallon after 
                                December 31, 2006, and before January 
                                1, 2009,
                                    ``(IV) 0.3 cent per gallon after 
                                December 31, 2008, and before January 
                                1, 2010, and
                                    ``(V) 0 after December 31, 2009.''.
            (2) Conforming amendments.--
                    (A) Subsection (d) of section 4041 is amended by 
                redesignating paragraph (3) as paragraph (4) and by 
                inserting after paragraph (2) the following new 
                paragraph:
            ``(3) Diesel fuel used in trains.--In the case of any sale 
        for use (or use) after September 30, 2010, there is hereby 
        imposed a tax of 0.1 cent per gallon on any liquid other than 
        gasoline (as defined in section 4083)--
                    ``(A) sold by any person to an owner, lessee, or 
                other operator of a diesel-powered train for use as a 
                fuel in such train, or
                    ``(B) used by any person as a fuel in a diesel-
                powered train unless there was a taxable sale of such 
                fuel under subparagraph (A).
        No tax shall be imposed by this paragraph on the sale or use of 
        any liquid if tax was imposed on such liquid under section 
        4081.''
                    (B) Subsection (f) of section 4082 is amended by 
                striking ``section 4041(a)(1)'' and inserting 
                ``subsections (a)(1) and (d)(3) of section 4041''.
                    (C) Subparagraph (B) of section 6421(f)(3) is 
                amended to read as follows:
                    ``(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed the rate applicable 
                under section 4041(a)(1)(C)(ii).''.
                    (D) Subparagraph (B) of section 6427(l)(3) is 
                amended to read as follows:
                    ``(B) so much of the rate specified in section 
                4081(a)(2)(A) as does not exceed the rate applicable 
                under section 4041(a)(1)(C)(ii).''.
    (b) Fuel Used on Inland Waterways.--Subparagraph (C) of section 
4042(b)(2) is amended to read as follows:
                    ``(C) The deficit reduction rate is--
                            ``(i) 3.3 cents per gallon after September 
                        30, 2001, and before January 1, 2005,
                            ``(ii) 2.3 cents per gallon after December 
                        31, 2004, and before January 1, 2007,
                            ``(iii) 1.3 cents per gallon after December 
                        31, 2006, and before January 1, 2009,
                            ``(iv) 0.3 cent per gallon after December 
                        31, 2008, and before January 1, 2010, and
                            ``(v) 0 after December 31, 2009.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2001.

SEC. 3116. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN MIXTURES OF DIESEL 
              FUEL.

    (a) In General.--Clause (iii) of section 4081(a)(2)(A) is amended 
by inserting before the period ``(19.7 cents per gallon in the case of 
a diesel-water fuel emulsion at least 14 percent of which is water)''.
    (b) Refunds for Tax-Paid Purchases.--
            (1) In general.--Section 6427 is amended by redesignating 
        subsections (m) through (p) as subsections (n) through (q), 
        respectively, and by inserting after subsection (l) the 
        following new subsection:
    ``(m) Diesel Fuel Used To Produce Emulsion.--
            ``(1) In general.--Except as provided in subsection (k), if 
        any diesel fuel on which tax was imposed by section 4081 at the 
        regular tax rate is used by any person in producing an emulsion 
        described in section 4081(a)(2)(A) 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 excess 
        of the regular tax rate over the incentive tax rate with 
        respect to such fuel.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Regular tax rate.--The term `regular tax 
                rate' means the aggregate rate of tax imposed by 
                section 4081 determined without regard to the 
                parenthetical in section 4081(a)(2)(A).
                    ``(B) Incentive tax rate.--The term `incentive tax 
                rate' means the aggregate rate of tax imposed by 
                section 4081 determined with regard to the 
                parenthetical in section 4081(a)(2)(A).''
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2001.

SEC. 3117. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Allowance of Qualifying Advanced Clean Coal Technology Facility 
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:
            ``(4) the qualifying advanced clean coal technology 
        facility credit.''.
    (b) Amount of Qualifying Advanced Clean Coal Technology Facility 
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:

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

    ``(a) In General.--For purposes of section 46, the qualifying 
advanced clean coal technology facility credit for any taxable year is 
an amount equal to 10 percent of the qualified investment in a 
qualifying advanced clean coal technology facility for such taxable 
year.
    ``(b) Qualifying Advanced Clean Coal Technology Facility.--
            ``(1) In general.--For purposes of subsection (a), the term 
        `qualifying advanced clean coal technology facility' means a 
        facility of the taxpayer which--
                    ``(A)(i)(I) original use of which commences with 
                the taxpayer, or
                    ``(II) is a retrofitted or repowered conventional 
                technology facility, the retrofitting or repowering of 
                which is completed by the taxpayer (but only with 
                respect to that portion of the basis which is properly 
                attributable to such retrofitting or repowering), or
                    ``(ii) is acquired through purchase (as defined by 
                section 179(d)(2)),
                    ``(B) is depreciable under section 167,
                    ``(C) has a useful life of not less than 4 years,
                    ``(D) is located in the United States, and
                    ``(E) uses qualifying advanced clean coal 
                technology.
            ``(2) Special rule for sale-leasebacks.--For purposes of 
        subparagraph (A) of paragraph (1), in the case of a facility 
        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 facility was originally placed in service, for a 
                period of not less than 12 years,
        such facility shall be treated as originally placed in service 
        not earlier than the date on which such property 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.
    ``(c) Qualifying Advanced Clean Coal Technology.--For purposes of 
this section--
            ``(1) In general.--The term `qualifying advanced clean coal 
        technology' means, with respect to clean coal technology--
                    ``(A) which has--
                            ``(i) multiple applications, with a 
                        combined capacity of not more than 5,000 
                        megawatts (4,000 megawatts before 2009), of 
                        advanced pulverized coal or atmospheric 
                        fluidized bed combustion technology--
                                    ``(I) installed as a new, retrofit, 
                                or repowering application,
                                    ``(II) operated between 2000 and 
                                2012, and
                                    ``(III) having a design net heat 
                                rate of not more than 9,500 Btu per 
                                kilowatt hour when the design coal has 
                                a heat content of more than 9,000 Btu 
                                per pound, or a design net heat rate of 
                                not more than 9,900 Btu per kilowatt 
                                hour when the design coal has a heat 
                                content of 9,000 Btu per pound or less,
                            ``(ii) multiple applications, with a 
                        combined capacity of not more than 1,000 
                        megawatts (500 megawatts before 2009 and 750 
                        megawatts before 2013), of pressurized 
                        fluidized bed combustion technology--
                                    ``(I) installed as a new, retrofit, 
                                or repowering application,
                                    ``(II) operated between 2000 and 
                                2016, and
                                    ``(III) having a design net heat 
                                rate of not more than 8,400 Btu per 
                                kilowatt hour when the design coal has 
                                a heat content of more than 9,000 Btu 
                                per pound, or a design net heat rate of 
                                not more than 9,900 Btu's per kilowatt 
                                hour when the design coal has a heat 
                                content of 9,000 Btu per pound or less, 
                                and
                            ``(iii) multiple applications, with a 
                        combined capacity of not more than 2,000 
                        megawatts (1,000 megawatts before 2009 and 
                        1,500 megawatts before 2013), of integrated 
                        gasification combined cycle technology, with or 
                        without fuel or chemical co-production--
                                    ``(I) installed as a new, retrofit, 
                                or repowering application,
                                    ``(II) operated between 2000 and 
                                2016,
                                    ``(III) having a design net heat 
                                rate of not more than 8,550 Btu per 
                                kilowatt hour when the design coal has 
                                a heat content of more than 9,000 Btu 
                                per pound, or a design net heat rate of 
                                not more than 9,900 Btu per kilowatt 
                                hour when the design coal has a heat 
                                content of 9,000 Btu per pound or less, 
                                and
                                    ``(IV) having a net thermal 
                                efficiency on any fuel or chemical co-
                                production of not less than 39 percent 
                                (higher heating value), or
                            ``(iv) multiple applications, with a 
                        combined capacity of not more than 2,000 
                        megawatts (1,000 megawatts before 2009 and 
                        1,500 megawatts before 2013) of technology for 
                        the production of electricity--
                                    ``(I) installed as a new, retrofit, 
                                or repowering application,
                                    ``(II) operated between 2000 and 
                                2016, and
                                    ``(III) having a carbon emission 
                                rate which is not more than 85 percent 
                                of conventional technology, and
                    ``(B) which reduces the discharge into the 
                atmosphere of 1 or more of the following pollutants to 
                not more than--
                            ``(i) 5 percent of the potential combustion 
                        concentration sulfur dioxide emissions for a 
                        coal with a potential combustion concentration 
                        sulfur emission of 1.2 lb/million btu of heat 
                        input or greater,
                            ``(ii) 15 percent of the potential 
                        combustion concentration sulfur dioxide 
                        emissions for a coal with a potential 
                        combustion concentration sulfur emission of 
                        less than 1.2 lb/million btu of heat input,
                            ``(iii) nitrogen oxide emissions of 0.1 lb 
                        per million btu of heat input from other than 
                        cyclone-fired boilers,
                            ``(iv) 15 percent of the uncontrolled 
                        nitrogen oxide emissions from cyclone-fired 
                        boilers,
                            ``(v) particulate emissions of 0.02 lb per 
                        million btu of heat input, and
                            ``(vi) the emission levels specified in the 
                        new source performance standards of the Clean 
                        Air Act (42 U.S.C. 7411) in effect at the time 
                        of retrofitting, repowering, or replacement of 
                        the qualifying clean coal technology unit for 
                        the category of source if such level is lower 
                        than the levels specified in clause (i), (ii), 
                        (iii), (iv), or (v).
            ``(2) Exceptions.--Such term shall not include any projects 
        receiving or scheduled to receive funding under the Clean Coal 
        Technology Program, or the Power Plant Improvement administered 
        by the Secretary of the Department of Energy.
    ``(d) Clean Coal Technology.--For purposes of this section, the 
term `clean coal technology' means advanced technology which uses coal 
to produce 75 percent or more of its thermal output as electricity 
including advanced pulverized coal or atmospheric fluidized bed 
combustion, pressurized fluidized bed combustion, integrated 
gasification combined cycle with or without fuel or chemical co-
production, and any other technology for the production of electricity 
which exceeds the performance of conventional technology.
    ``(e) Conventional Technology.--The term `conventional technology' 
means--
            ``(1) coal-fired combustion technology with a design net 
        heat rate of not less than 9,500 Btu per kilowatt hour (HHV) 
        and a carbon equivalents emission rate of not more than 0.54 
        pounds of carbon per kilowatt hour when the design coal has a 
        heat content of more than 9,000 Btu per pound,
            ``(2) coal-fired combustion technology with a design net 
        heat rate of not less than 10,500 Btu per kilowatt hour (HHV) 
        and a carbon equivalents emission rate of not more than 0.60 
        pounds of carbon per kilowatt hour when the design coal has a 
        heat content of 9,000 Btu per pound or less, or
            ``(3) natural gas-fired combustion technology with a design 
        net heat rate of not less than 7,500 Btu per kilowatt hour 
        (HHV) and a carbon equivalents emission rate of not more than 
        0.24 pounds of carbon per kilowatt hour.
    ``(f) Design Net Heat Rate.--The design net heat rate shall be 
based on the design annual heat input to and the design annual net 
electrical output from the qualifying advanced clean coal technology 
(determined without regard to such technology's co-generation of 
steam).
    ``(g) Selection Criteria.--Selection criteria for qualifying 
advanced clean coal technology facilities--
            ``(1) shall be established by the Secretary of Energy as 
        part of a competitive solicitation,
            ``(2) shall include primary criteria of minimum design net 
        heat rate, maximum design thermal efficiency, environmental 
        performance, and lowest cost to the government, and
            ``(3) shall include supplemental criteria as determined 
        appropriate by the Secretary of Energy.
    ``(h) 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 facility 
placed in service by the taxpayer during such taxable year.
    ``(i) 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 (c) without regard to 
        this section) 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 facility 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 facility 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.
    ``(j) 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.
    ``(k) Termination.--This section shall not apply with respect to 
any qualified investment made after December 31, 2011.
    ``(l) National Limitation.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, the term `qualifying advanced clean coal 
        technology facility' shall include such a facility only to the 
        extent that such facility is allocated a portion of the 
        national megawatt limitation under this subsection.
            ``(2) National megawatt limitation.--The national megawatt 
        limitation under this subsection is 7,500 megawatts.
            ``(3) Allocation of limitation.--The national megawatt 
        limitation shall be allocated by the Secretary under rules 
        prescribed by the Secretary. Not later than 6 months after the 
        date of enactment of this subsection, the Secretary shall 
        prescribe such regulations as may be necessary or appropriate 
        to carry out the purposes of this section, including 
        regulations--
                    ``(A) to limit which facility qualifies as 
                `qualified advanced clean coal technology' in 
                subsection (c) to particular facilities, a portion of 
                particular facilities, or a portion of the production 
                from particular facilities, so that when all such 
                facilities (or portions thereof) are placed in service 
                over the ten year period in section (k), the 
                combination of facilities approved for tax credits 
                (and/or portions of facilities approved for tax 
                credits) will not exceed a combined capacity of 7,500 
                megawatts;
                    ``(B) to provide a certification process in 
                consultation with the Secretary of Energy under 
                subsection (g) that will approve and allocate the 7,500 
                megawatts of available tax credits authority--
                            ``(i) to encourage that facilities with the 
                        highest thermal efficiencies and environmental 
                        performance be placed in service as soon as 
                        possible;
                            ``(ii) to allocate credits to taxpayers 
                        that have a definite and credible plan for 
                        placing into commercial operation a qualifying 
                        advanced clean coal technology facility, 
                        including--
                                    ``(I) a site,
                                    ``(II) contractual commitments for 
                                procurement and construction,
                                    ``(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 shall determine are 
                                appropriate;
                            ``(iii) to allocate credits to a portion of 
                        a facility (or a portion of the production from 
                        a facility) if the Secretary determines that 
                        such an allocation should maximize the amount 
                        of efficient production encouraged with the 
                        available tax credits;
                    ``(C) to set progress requirements and conditional 
                approvals so that credits for approved projects that 
                become unlikely to meet the necessary conditions that 
                can be reallocated by the Secretary to other projects;
                    ``(D) to reallocate credits that are not allocated 
                to 1 technology described in clauses (i) through (iv) 
                of subsection (c)(1)(A) because an insufficient number 
                of qualifying facilities requested credits for one 
                technology, to another technology described in another 
                subparagraph of subsection (c) in order to maximize the 
                amount of energy efficient production encouraged with 
                the available tax credits; and
                    ``(E) to provide taxpayers with opportunities to 
                correct administrative errors and omissions with 
                respect to allocations and recordkeeping within a 
                reasonable period after their discovery, taking into 
                account the availability of regulations and other 
                administrative guidance from the Secretary.''.
    (c) Recapture.--Section 50(a) (relating to other special rules) is 
amended by adding at the end the following:
            ``(6) Special rules relating to qualifying advanced clean 
        coal technology facility.--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 facility (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 facility 
                disposed of, and whose denominator is the total number 
                of years over which such facility would otherwise have 
                been subject to depreciation. For purposes of the 
                preceding sentence, the year of disposition of the 
                qualifying advanced clean coal technology facility 
                property 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 facility under section 48A, except that the 
                amount of the increase in tax under subparagraph (A) of 
                this paragraph shall be substituted in lieu of 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 facility.''.
    (d) Transitional Rule.--Section 39(d) (relating to transitional 
rules) is amended by adding at the end the following:
            ``(14) 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 facility credit determined under section 48A 
        may be carried back to a taxable year ending before January 1, 
        2002.''.
    (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:
                            ``(iv) the portion of the basis of any 
                        qualifying advanced clean coal technology 
                        facility attributable to any qualified 
                        investment (as defined by section 48A(c)).''
            (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) Special rule for qualifying advanced clean coal 
        technology facilities.--Paragraphs (1) and (2) shall not apply 
        to any property with respect to the credit determined 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:

                              ``Sec. 48A. Qualifying advanced clean 
                                        coal technology facility 
                                        credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2001, 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 enactment of the Revenue 
Reconciliation Act of 1990).

SEC. 3118. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    (a) Credit for Production From Qualifying Advanced Clean Coal 
Technology.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by adding after 
section 45J the following:

``SEC. 45K. CREDIT FOR PRODUCTION FROM QUALIFYING ADVANCED CLEAN COAL 
              TECHNOLOGY.

    ``(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 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 facility during the 
        10-year period beginning on the date the facility was 
        originally placed in service.
    ``(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 facility shall be determined as follows:
            ``(1) Where the design coal has a heat content of more than 
        9,000 Btu per pound:
                    ``(A) In the case of a facility originally placed 
                in service before 2009, if--
      

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 heat rate, Btu/kWh (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not more than 8,400.........         $.0060                $.0038
More than 8,400 but not more         $.0025                $.0010
 than 8,550.
More than 8,550 but not more         $.0010                $.0010.
 than 8,750.
------------------------------------------------------------------------

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

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

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

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 heat rate, Btu/kWh (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not more than 7,380.........         $.0140                 $.01
More than 7,380 but not more         $.0120                $.0090.
 than 7,720.
------------------------------------------------------------------------

            ``(2) Where the design coal has a heat content of not more 
        than 9,000 Btu per pound:
                    ``(A) In the case of a facility originally placed 
                in service before 2009, if--
      

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 heat rate, Btu/kWh (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not more than 8,500.........         $.0060                $.0038
More than 8,500 but not more         $.0025                $.0010
 than 8,650.
More than 8,650 but not more         $.0010                $.0010.
 than 8,750.
------------------------------------------------------------------------

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

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 heat rate, Btu/kWh (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not more than 8,000.........         $.0105                 $.009
More than 8,000 but not more         $.0085                $.0068
 than 8,250.
More than 8,250 but not more         $.0075                $.0055.
 than 8,400.
------------------------------------------------------------------------

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

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 heat rate, Btu/kWh (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not more than 7,800.........         $.0140                $.0115
More than 7,800 but not more         $.0120                $.0090.
 than 7,950.
------------------------------------------------------------------------

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

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

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

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 thermal efficiency (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not less than 43.9 percent..         $.0105                 $.009
Less than 43.9 but not less          $.0085                $.0068
 than 42 percent.
Less than 42 but not less            $.0075                $.0055.
 than 40.9 percent.
------------------------------------------------------------------------

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

------------------------------------------------------------------------
                                       The applicable amount is:
  ``The facility design net  -------------------------------------------
 thermal efficiency (HHV) is   For 1st 5 years of     For 2d 5 years of
          equal to:               such service          such service
------------------------------------------------------------------------
Not less than 44.2 percent..         $.0140                $.0115
Less than 44.2 but not less          $.0120                $.0090.
 than 43.6 percent.
------------------------------------------------------------------------

    ``(c) Inflation Adjustment Factor.--For calendar years after 2001, 
each amount in paragraphs (1), (2), and (3) 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 48A shall have the meaning given such term 
        in section 48A.
            ``(2) Applicable rules.--The rules of paragraphs (3), (4), 
        and (5) of section 45 shall apply.
            ``(3) Inflation adjustment factor.--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 
        2001.
            ``(4) 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.''.
    (b) Credit Treated as Business Credit.--Section 38(b) 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:
            ``(20) the qualifying advanced clean coal technology 
        production credit determined under section 45K(a).''.
    (c) Transitional Rule.--Section 39(d) (relating to transitional 
rules) is amended by adding after paragraph (14) the following:
            ``(15) No carryback of section 45k 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 45K 
        may be carried back to a taxable year ending before the date of 
        enactment of section 45K.''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following:

                              ``Sec. 45K. Credit for production from 
                                        qualifying advanced clean coal 
                                        technology.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to production after the date of enactment of this Act.

                         TITLE II--RELIABILITY

SEC. 3201. 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 is 
amended by adding after paragraph (15) 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:

``(C)(ii)......................................................   10''.
    (d) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``or 
in clause (ii) of section 168(e)(3)(C)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 3202. NATURAL GAS DISTRIBUTION LINES TREATED AS 10-YEAR PROPERTY.

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

``(D)(iii).....................................................   20''.
    (c) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1) is amended by inserting before the period the following: ``or 
in clause (iii) of section 168(e)(3)(D)''.
    (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.

SEC. 3203. PETROLEUM REFINING PROPERTY TREATED AS 7-YEAR PROPERTY.

    (a) In General.--Subparagraph (C) of section 168(e)(3) (relating to 
classification of certain property), as amended by section 3201, is 
amended by striking ``and'' at the end of clause (ii), by redesignating 
clause (iii) as clause (iv), and by inserting after clause (ii) the 
following new clause:
                            ``(iii) any property used for the 
                        distillation, fractionation, and catalytic 
                        cracking of crude petroleum into gasoline and 
                        its other components, and''.
    (b) Alternative System.--The table contained in section 
168(g)(3)(B), as amended by section 3201, is amended by inserting after 
the item relating to subparagraph (C)(ii) the following:

``(C)(iii).....................................................   10''.
    (c) Alternative Minimum Tax Exception.--Subparagraph (B) of section 
56(a)(1), as amended by section 3201, is amended by inserting ``or 
(iii)'' after ``clause (ii)''.
    (d) Effective Date.--The amendment made by this section shall apply 
to property placed in service after the date of the enactment of this 
Act.

SEC. 3204. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING WITH 
              ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.

    (a) In General.--Section 179(b) (relating to election to expense 
certain depreciable business assets) is amended by adding at the end 
the following new paragraph:
            ``(5) Limitation for small business refiners.--
                    ``(A) In general.--In the case of a small business 
                refiner electing to expense qualified costs, in lieu of 
                the dollar limitations in paragraph (1), the limitation 
                on the aggregate costs which may be taken into account 
                under subsection (a) for any taxable year shall not 
                exceed 75 percent of the qualified costs.
                    ``(B) Qualified costs.--For purposes of this 
                paragraph, the term `qualified costs' means costs paid 
                or incurred by a small business refiner for the purpose 
                of complying with the Highway Diesel Fuel Sulfur 
                Control Requirements of the Environmental Protection 
                Agency.
                    ``(C) Small business refiner.--For purposes of this 
                paragraph, the term `small business refiner' means, 
                with respect to any taxable year, a refiner which, 
                within the refining operations of the business, employs 
                not more than 1,500 employees on business days during 
                such taxable year performing services in the refining 
                operations of such businesses and has an average total 
                capacity of 155,000 barrels per day or less.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenses paid or incurred after the date of the enactment of this 
Act.

SEC. 3205. ENVIRONMENTAL TAX CREDIT.

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

``SEC. 45I. 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.
    ``(b) Maximum Credit.--For any small business refiner, the 
aggregate amount allowable as a credit under subsection (a) for any 
taxable year with respect to any facility shall not exceed 25 percent 
of the qualified capital costs incurred by such small business refiner 
with respect to such facility not taken into account in determining the 
credit under subsection (a) for any preceding taxable year.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Small business refiner.--The term `small business 
        refiner' means, with respect to any taxable year, a refiner 
        which, within the refining operations of the business, employs 
        not more than 1,500 employees on business days during such 
        taxable year performing services in the refining operations of 
        such businesses and has an average total capacity of 155,000 
        barrels per day or less.
            ``(2) Qualified capital costs.--The term `qualified capital 
        costs' means, with respect to any facility, those costs paid or 
        incurred during the applicable period for compliance with the 
        applicable EPA regulations with respect to such facility, 
        including expenditures for the construction of new process 
        operation units or the dismantling and reconstruction of 
        existing process units to be used in the production of 15 parts 
        per million or less sulfur diesel fuel, associated adjacent or 
        offsite equipment (including tankage, catalyst, and power 
        supply), engineering, construction period interest, and 
        sitework.
            ``(3) Applicable epa regulations.--The term `applicable EPA 
        regulations' means the Highway Diesel Fuel Sulfur Control 
        Requirements of the Environmental Protection Agency.
            ``(4) Applicable period.--The term `applicable period' 
        means, with respect to any facility, the period beginning on 
        the day after the date of the enactment of this section and 
        ending with the date which is one year after the date on which 
        the taxpayer must comply with the applicable EPA regulations 
        with respect to such facility.
    ``(d) Reduction in Basis.--For purposes of this subtitle, if a 
credit is determined under this section with respect to any property by 
reason of qualified capital costs, the basis of such property shall be 
reduced by the amount of the credit so determined.
    ``(e) 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 a facility, 
        the small business refiner must obtain 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.
            ``(4) Recapture.--Notwithstanding subsection (f), failure 
        to obtain certification under paragraph (1) constitutes a 
        recapture event under subsection (f) with an applicable 
        percentage of 100 percent.
    ``(f) Recapture of Environmental Tax Credit.--
            ``(1) In general.--Except as provided in subsection (e), 
        if, as of the close of any taxable year, there is a recapture 
        event with respect to any facility of the small business 
        refiner, then the tax of such refiner under this chapter for 
        such taxable year shall be increased by an amount equal to the 
        product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified capital costs of 
                the taxpayer described in subsection (c)(2) with 
                respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Year 1...............................          100     
                Year 2...............................           80     
                Year 3...............................           60     
                Year 4...............................           40     
                Year 5...............................           20     
                Years 6 and thereafter...............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified capital costs with respect to a 
                facility described in subsection (c)(2) are paid or 
                incurred by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Failure to comply.--The failure by the small 
                business refiner to meet the applicable EPA regulations 
                within the applicable period with respect to the 
                facility.
                    ``(B) Cessation of operation.--The cessation of the 
                operation of the facility as a facility which produces 
                15 parts per million or less sulfur diesel after the 
                applicable period.
                    ``(C) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a small 
                        business refiner's interest in the facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(4) 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.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility by reason 
                of a casualty loss to the extent such loss is restored 
                by reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(g) 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) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 (relating to general business credit) 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) in the case of a small business refiner, the 
        environmental tax credit determined under section 45I(a).''.
    (c) Denial of Double Benefit.--Section 280C (relating to certain 
expenses for which credits are allowable) 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 45I(a).''.
    (d) Basis Adjustment.--Section 1016(a) (relating to adjustments to 
basis) 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) in the case of a facility with respect to which a 
        credit was allowed under section 45I, to the extent provided in 
        section 45I(d).''.
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45I. Environmental tax credit.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after the date of the enactment of 
this Act.

SEC. 3206. 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 a 
        related person 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 the related 
        person for the taxable year exceed 75,000 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, 2001.

SEC. 3207. TAX-EXEMPT BOND FINANCING OF CERTAIN ELECTRIC FACILITIES.

    (a) In General.--Subpart A of part IV of subchapter B of chapter 1 
(relating to tax exemption requirements for State and local bonds) is 
amended by inserting after section 141 the following new section:

``SEC. 141A. TREATMENT OF GOVERNMENT-OWNED ELECTRIC OUTPUT FACILITIES.

    ``(a) Exceptions From Private Business Use Limitations Where Open 
Access Requirements Met.--
            ``(1) General rule.--For purposes of this part, the term 
        `private business use' shall not include--
                    ``(A) any permitted open access activity by a 
                governmental unit with respect to an electric output 
                facility owned by such unit, or
                    ``(B) any permitted sale of electricity by a 
                governmental unit which is generated at an existing 
                generation facility owned by such unit.
            ``(2) Permitted open access activity.--For purposes of this 
        section--
                    ``(A) In general.--The term `permitted open access 
                activity' means any activity meeting the open access 
                requirements of any of the following clauses with 
                respect to such electric output facility:
                            ``(i) Transmission and ancillary 
                        facility.--In the case of a transmission 
                        facility or a facility providing ancillary 
                        services, the provision of transmission service 
                        and ancillary services meets the open access 
                        requirements of this clause only if such 
                        services are provided on a nondiscriminatory 
                        open access basis--
                                    ``(I) pursuant to an open access 
                                transmission tariff filed with and 
                                approved by FERC, including an 
                                acceptable reciprocity tariff, or
                                    ``(II) under a regional 
                                transmission organization agreement 
                                approved by FERC.
                            ``(ii) Distribution facilities.--In the 
                        case of a distribution facility, the delivery 
                        of electric energy meets the open access 
                        requirements of this clause only if such 
                        delivery is made on a nondiscriminatory open 
                        access basis.
                            ``(iii) Generation facilities.--In the case 
                        of a generation facility, the delivery of 
                        electric energy generated by such facility 
                        meets the open access requirements of this 
                        clause only if--
                                    ``(I) such facility is directly 
                                connected to distribution facilities 
                                owned by the governmental unit which 
                                owns the generation facility, and
                                    ``(II) such distribution facilities 
                                meet the open access requirements of 
                                clause (ii).
                    ``(B) Special rules.--
                            ``(i) Voluntarily filed tariffs.--
                        Subparagraph (A)(i)(I) shall apply in the case 
                        of a voluntarily filed tariff only if the 
                        governmental unit files a report with FERC 
                        within 90 days after the date of the enactment 
                        of this section relating to whether or not such 
                        governmental unit will join a regional 
                        transmission organization.
                            ``(ii) Control of transmission facilities 
                        by regional transmission organization.--A 
                        governmental unit shall be treated as meeting 
                        the open access requirements of subparagraph 
                        (A)(i) if a regional transmission organization 
                        controls the transmission facilities.
                            ``(iii) ERCOT utility.--References to FERC 
                        in subparagraph (A) shall be treated as 
                        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))).
            ``(3) Permitted sale.--For purposes of this subsection--
                    ``(A) In general.--The term `permitted sale' 
                means--
                            ``(i) any sale of electricity to an on-
                        system purchaser if the seller meets the open 
                        access requirements of paragraph (2) with 
                        respect to all distribution and transmission 
                        facilities (if any) owned by such seller, and
                            ``(ii) subject to subparagraphs (B) and 
                        (C), any sale of electricity to a wholesale 
                        native load purchaser, and any load loss sale, 
                        if--
                                    ``(I) the seller meets the open 
                                access requirements of paragraph (2) 
                                with respect to all transmission 
                                facilities (if any) owned by such 
                                seller, or
                                    ``(II) in any case in which the 
                                seller does not own any transmission 
                                facilities, all persons providing 
                                transmission services to the seller's 
                                wholesale native load purchasers meet 
                                the open access requirements of 
                                paragraph (2) with respect to all 
                                transmission facilities owned by such 
                                persons.
                    ``(B) Limitation on sales to wholesale native load 
                purchasers.--A sale to a wholesale native load 
                purchaser shall be treated as a permitted sale only to 
                the extent that--
                            ``(i) such purchaser resells the 
                        electricity directly at retail to persons 
                        within the purchaser's distribution area, or
                            ``(ii) such electricity is resold by such 
                        purchaser through one or more wholesale 
                        purchasers (each of whom as of June 30, 2000, 
                        was a party to a requirements contract or a 
                        firm power contract described in paragraph 
                        (5)(B)(ii)) to retail purchasers in the 
                        ultimate wholesale purchaser's distribution 
                        area.
                    ``(C) Load loss sales.--
                            ``(i) In general.--The term `load loss 
                        sale' means any sale at wholesale to the extent 
                        that--
                                    ``(I) the aggregate sales at 
                                wholesale during the recovery period 
                                does not exceed the load loss 
                                mitigation sales limit for such period, 
                                and
                                    ``(II) the aggregate sales at 
                                wholesale during the first calendar 
                                year after the recovery period does not 
                                exceed the excess carried under clause 
                                (iv) to such year.
                            ``(ii) Load loss mitigation sales limit.--
                        For purposes of clause (i), the load loss 
                        mitigation sales limit for the recovery period 
                        is the sum of the annual load losses for each 
                        year of such period.
                            ``(iii) Annual load loss.--A governmental 
                        unit'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 wholesale native load purchasers 
                                which do not constitute private 
                                business use are less than
                                    ``(III) the megawatt hours of 
                                electric energy sold during the base 
                                year to wholesale native load 
                                purchasers which do not constitute 
                                private business use.
                        The annual load loss for any year shall not 
                        exceed the portion of the amount determined 
                        under the preceding sentence which is 
                        attributable to open access requirements.
                            ``(iv) Carryovers.--If the limitation under 
                        clause (i) for the recovery period exceeds the 
                        aggregate sales during such period which are 
                        taken into account under clause (i), such 
                        excess (but not more than 10 percent of such 
                        limitation) may be carried over to the first 
                        calendar year following the recovery period.
                            ``(v) Recovery period.--The recovery period 
                        is the 7-year period beginning with the start-
                        up year.
                            ``(vi) Start-up year.--The start-up year is 
                        the calendar year which includes the date of 
                        the enactment of this section or, if later, at 
                        the election of the governmental unit--
                                    ``(I) the first year that the 
                                governmental unit offers 
                                nondiscriminatory open transmission 
                                access, or
                                    ``(II) the first year in which at 
                                least 10 percent of the governmental 
                                unit's wholesale customers' aggregate 
                                retail native load is open to retail 
                                competition.
            ``(4) On-system purchaser.--For purposes of this section, 
        the term `on-system purchaser' means any person whose electric 
        equipment is directly connected with any transmission or 
        distribution facility owned by the governmental unit owning the 
        existing generation facility if--
                    ``(A) such person--
                            ``(i) purchases electric energy from such 
                        governmental unit at retail, and
                            ``(ii)(I) was within such unit's 
                        distribution area at the close of the base year 
                        or
                            ``(II) is a person as to whom the 
                        governmental unit has a statutory service 
                        obligation, or
                    ``(B) is a wholesale native load purchaser from 
                such governmental unit.
            ``(5) Wholesale native load purchaser.--For purposes of 
        this section--
                    ``(A) In general.--The term `wholesale native load 
                purchaser' means a wholesale purchaser as to whom the 
                governmental unit had--
                            ``(i) a statutory service obligation at 
                        wholesale at the close of the base year, or
                            ``(ii) an obligation at the close of the 
                        base year under a requirements or firm sales 
                        contract if, as of June 30, 2000, such contract 
                        had been in effect for (or had an initial term 
                        of) at least 10 years.
                    ``(B) Permitted sales under existing contracts.--A 
                private business use sale during any year to a 
                wholesale native load purchaser (other than a person to 
                whom the governmental unit had a statutory service 
                obligation) under a contract shall be treated as a 
                permitted sale by reason of being a load loss sale only 
                to the extent that the private business use sales under 
                the contract during such year exceed the lesser of--
                            ``(i) the private business use sales under 
                        the contract during the base year, or
                            ``(ii) the maximum private business use 
                        sales which would (but for this section) be 
                        permitted without causing the bonds to be 
                        private activity bonds.
                This subparagraph shall only apply to the extent that 
                the sale is allocable to bonds issued before the date 
                of the enactment of this section (or bonds issued to 
                refund such bonds).
            ``(6) Special rules.--
                    ``(A) Time of sale rule.--For purposes of 
                paragraphs (3)(C)(iii) and (5)(B), the determination of 
                whether a sale after the date of the enactment of this 
                section is a private business use shall be made with 
                regard to this section.
                    ``(B) Joint action agencies.--To the extent 
                provided in regulations, a joint action agency, or a 
                member of (or a wholesale native load purchaser from) a 
                joint action agency, which is entitled to make a sale 
                described in subparagraph (A) or (B) in a year, may 
                transfer the entitlement to make that sale to the 
                member (or purchaser), or the joint action agency, 
                respectively.
    ``(b) Certain Bonds for Transmission and Distribution Facilities 
Not Tax Exempt.--
            ``(1) In general.--Section 103 shall not apply to any bond 
        issued on or after the date of the enactment of this section if 
        any portion of the proceeds of the issue of which such bond is 
        a part is used (directly or indirectly) to finance--
                    ``(A) any electric transmission facility, or
                    ``(B) any start-up electric utility distribution 
                facility.
            ``(2) Exceptions relating to transmission facilities.--
        Paragraph (1)(A) shall not apply to any bond issued to 
        finance--
                    ``(A) any repair of a transmission facility in 
                service on the date of the enactment of this section, 
                so long as the repair does not--
                            ``(i) increase the voltage level of such 
                        facility over its level at the close of the 
                        base year, or
                            ``(ii) increase the thermal load limit of 
                        such facility by more than 3 percent over such 
                        limit at the close of the base year,
                    ``(B) any qualifying upgrade of an electric 
                transmission facility in service on the date of the 
                enactment of this section, or
                    ``(C) any transmission facility necessary to comply 
                with an obligation under a shared or reciprocal 
                transmission agreement in effect on such date.
            ``(3) Exception for local electric transmission facility.--
        For purposes of this subsection--
                    ``(A) In general.--In the case of a governmental 
                unit which owns distribution facilities, paragraph 
                (1)(A) shall not apply to any bond issued to finance an 
                electric transmission facility owned by such 
                governmental unit and located within such governmental 
                unit's distribution area, but only to the extent such 
                facility is, or will be, necessary to supply 
                electricity to serve the retail native load, or 
                wholesale native load, of such governmental unit or of 
                1 or more other governmental units owning distribution 
                facilities which are directly connected to such 
                electric transmission facility.
                    ``(B) Retail load.--The term `retail load' means, 
                with respect to a governmental unit, the electric load 
                of end-users in the distribution area of the 
                governmental unit.
                    ``(C) Wholesale native load.--The term `wholesale 
                native load' means--
                            ``(i) the retail load of such unit's 
                        wholesale native load purchasers (or of an 
                        ultimate wholesale purchaser described in 
                        subsection (a)(3)(B)(ii)), and
                            ``(ii) the electric load of purchasers (not 
                        described in clause (i)) under wholesale 
                        requirements contracts which--
                                    ``(I) do not constitute private 
                                business use (determined without regard 
                                to this section), and
                                    ``(II) were in effect in the base 
                                year.
                    ``(D) Necessary to serve load.--For purposes of 
                determining whether a transmission facility is, or will 
                be, necessary to supply electricity to retail native 
                load or wholesale native load--
                            ``(i) the governmental unit's available 
                        transmission rights shall be taken into 
                        account,
                            ``(ii) electric reliability standards or 
                        requirements of national or regional 
                        reliability organizations, regional 
                        transmission organizations and the Electric 
                        Reliability Council of Texas shall be taken 
                        into account, and
                            ``(iii) transmission, siting and 
                        construction decisions of regional transmission 
                        organizations and State and Federal regulatory 
                        and siting agencies, after a proceeding that 
                        provides for public input, shall be presumptive 
                        evidence regarding whether transmission 
                        facilities are necessary to serve native load.
                    ``(E) Qualifying upgrade.--The term `qualifying 
                upgrade' means an improvement or addition to 
                transmission facilities of the governmental unit in 
                service on the date of the enactment of this section 
                which--
                            ``(i) is ordered or approved by a regional 
                        transmission organization or by a State 
                        regulatory or siting agency, after a proceeding 
                        that provides for public input, and
                            ``(ii) is, or will be, necessary to supply 
                        electricity to serve the retail native load, or 
                        wholesale native load, of such governmental 
                        unit or of one or more governmental units 
                        owning distribution facilities which are 
                        directly connected to such transmission 
                        facility.
            ``(4) Start-up electric utility distribution facility 
        defined.--For purposes of this subsection, the term `start-up 
        electric utility distribution facility' means any distribution 
        facility to provide electric service for sale to the public if 
        such facility is placed in service--
                    ``(A) by a governmental unit that did not operate 
                an electric utility on the date of the enactment of 
                this section, and
                    ``(B) during the first 10 years after the date such 
                governmental unit begins operating an electric utility.
        A governmental unit is treated as having operated an electric 
        utility on the date of the enactment of this section if it 
        operates electric output facilities which were (on such date) 
        operated by another governmental unit to provide electric 
        service for sale to the public.
            ``(5) Exception for refunding bonds.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any eligible refunding bond.
                    ``(B) Eligible refunding bond.--For purposes of 
                subparagraph (A), the term `eligible refunding bond' 
                means any bond (or series of bonds) issued to refund 
                any bond issued before the date of the enactment of 
                this section if the average maturity date of the issue 
                of which the refunding bond is a part is not later than 
                the average maturity date of the bonds to be refunded 
                by such issue.
    ``(c) Definitions; Special Rules.--For purposes of this section--
            ``(1) Base year.--The term `base year' means--
                    ``(A) the calendar year preceding the start-up 
                year, or
                    ``(B) at the election of the governmental unit, the 
                second or third calendar years preceding the start-up 
                year.
            ``(2) Distribution area.--The term `distribution area' 
        means the area in which a governmental unit owns distribution 
        facilities.
            ``(3) Electric output facility.--The term `electric output 
        facility' means an output facility that is an electric 
        generation, transmission, or distribution facility.
            ``(4) Distribution facility.--The term `distribution 
        facility' means an electric output facility that is not a 
        generation or transmission facility.
            ``(5) Transmission facility.--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 
        this section).
            ``(6) Existing generation facility.--
                    ``(A) In general.--The term `existing generation 
                facility' means any electric generation facility if--
                            ``(i) such facility is originally placed in 
                        service on or before the date of enactment of 
                        this Act and is owned by any governmental unit 
                        on such date, or
                            ``(ii) such facility is originally placed 
                        in service after such date if the construction 
                        of the facility commenced before June 1, 2000, 
                        and such facility is owned by any governmental 
                        unit when it is placed in service.
                    ``(B) Denial of treatment to expansions.--Such term 
                shall not include any facility to the extent the 
                generating capacity of such facility as of any date is 
                3 percent above the greater of its nameplate or rated 
                capacity as of the date of the enactment of this 
                section (or, in the case of a facility described in 
                subparagraph (A)(ii), the date that the facility is 
                placed in service).
            ``(7) Regional transmission organization.--The term 
        `regional transmission organization' includes an independent 
        system operator.
            ``(8) FERC.--The term `FERC' means the Federal Energy 
        Regulatory Commission.
            ``(9) Government-owned facility.--An electric transmission 
        facility shall be treated as owned by a governmental unit as of 
        any date to the extent that--
                    ``(A) such unit acquired (before the base year) 
                long-term firm transmission capacity (as determined 
                under regulations) of such facility for the purposes of 
                serving customers to which such unit had at the close 
                of the base year--
                            ``(i) a statutory service obligation, or
                            ``(ii) an obligation under a requirements 
                        contract, and
                    ``(B) such unit holds such capacity as of such 
                date.
            ``(10) Statutory service obligation.--The term `statutory 
        service obligation' means an obligation under State or Federal 
        law (exclusive of an obligation arising solely under a contract 
        entered into with a person) to provide electric distribution 
        services or electric sales services, as provided in such law.
            ``(11) Contract modifications.--A material modification of 
        a contract shall be treated as a new contract.
    ``(d) Election To Terminate Tax-Exempt Bond Financing for Certain 
Electric Output Facilities.--
            ``(1) In general.--At the election of a governmental unit, 
        section 103(a) shall not apply to any bond issued by or on 
        behalf of such unit after the date of such election if any 
        portion of the proceeds of the issue of which such bond is a 
        part are used to provide any electric output facilities. Such 
        an election, once made, shall be irrevocable.
            ``(2) Other effects of election.--During the period that 
        the election under paragraph (1) is in effect with respect to a 
        governmental unit, the term `private activity bond' shall not 
        include--
                    ``(A) any bond issued by such unit before the date 
                of the enactment of this section to provide an electric 
                output facility if, as of the date of the election, 
                such bond was not a private activity bond, and
                    ``(B) any bond to which paragraph (1) does not 
                apply by reason of paragraph (3).
            ``(3) Exceptions for certain property.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any bond issued to provide property owned by a 
                governmental unit if such property is--
                            ``(i) any qualifying transmission facility,
                            ``(ii) any qualifying distribution 
                        facility,
                            ``(iii) any facility necessary to meet 
                        Federal or State environmental requirements 
                        applicable to an existing generation facility 
                        owned by the governmental unit as of the date 
                        of the election,
                            ``(iv) any property to repair any existing 
                        generation facility owned by the governmental 
                        unit as of the date of the election,
                            ``(v) any qualified facility (as defined in 
                        section 45(c)(3)) producing electricity from 
                        any qualified energy resource (as defined in 
                        section 45(c)(1)), and
                            ``(vi) any energy property (as defined in 
                        section 48(a)(3)) placed in service during a 
                        period that the energy percentage under section 
                        48(a) is greater than zero.
                    ``(B) Limitation on use by nongovernmental 
                persons.--Subparagraph (A) shall not apply to any 
                property constructed, acquired or financed for a 
                principal purpose of providing the facility (or the 
                output thereof) to nongovernmental persons.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Qualifying distribution facility.--The term 
                `qualifying distribution facility' means a distribution 
                facility meeting the open access requirements of 
                subsection (a)(2)(A)(ii).
                    ``(B) Qualifying transmission facility.--The term 
                `qualifying transmission facility' means a local 
                transmission facility (as defined in subsection (b)(3)) 
                meeting the open access requirements of subsection 
                (a)(2)(A)(i).
            ``(5) Effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be binding on any successor in interest to, or 
                any related party with respect to, the electing 
                governmental unit. For purposes of this paragraph, a 
                governmental unit shall be treated as related to 
                another governmental unit if it is a member of the same 
                controlled group (as determined under regulations).
                    ``(B) Treatment of electing governmental unit.--A 
                governmental unit which makes an election under 
                paragraph (1) shall be treated for purposes of section 
                141 as a person--
                            ``(i) which is not a governmental unit, and
                            ``(ii) which is engaged in a trade or 
                        business,
                with respect to its purchase of electricity generated 
                by an electric output facility placed in service after 
                the date of such election if such purchase is under a 
                contract executed after such date.''
    (b) Waiver of Certain Limitations Not To Apply to Distribution 
Facilities.--Section 141(d)(5) is amended by inserting ``(except in the 
case of an electric output facility that is a distribution facility)'' 
after ``this subsection''.
    (c) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter B of chapter 1 is amended by inserting after the 
item relating to section 141 the following new item:

                              ``Sec. 141A. Treatment of government-
                                        owned electric output 
                                        facilities.''
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act, except 
        that a governmental unit may elect to have section 141A(a)(1) 
        of the Internal Revenue Code of 1986, as added by subsection 
        (a), take effect on April 14, 1996.
            (2) Binding contracts.--The amendment made by subsection 
        (b) (relating to waiver of certain limitations not to apply to 
        distribution facilities) shall not apply to facilities acquired 
        pursuant to a contract which was entered into before the date 
        of the enactment of this Act and which was binding on such date 
        and at all times thereafter before such acquisition.
            (3) Comparable treatment to bonds under 1954 code rules.--
        References in the amendments made by this Act to sections of 
        the Internal Revenue Code of 1986 shall be deemed to include 
        references to comparable sections of the Internal Revenue Code 
        of 1954.

SEC. 3208. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY REGULATORY 
              COMMISSION OR STATE ELECTRIC RESTRUCTURING POLICY.

    (a) In General.--Section 1033 (relating to involuntary conversions) 
is amended by redesignating subsection (k) as subsection (l) and by 
inserting after subsection (j) the following new subsection:
    ``(k) 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--
                    ``(A) such transaction shall be treated as an 
                involuntary conversion to which this section applies, 
                and
                    ``(B) exempt utility property shall be treated as 
                property which is similar or related in service or use 
                to the property disposed of in such transaction.
            ``(2) Extension of replacement period.--In the case of any 
        involuntary conversion described in paragraph (1), subsection 
        (a)(2)(B) shall be applied by substituting `4 years' for `2 
        years' in clause (i) thereof.
            ``(3) Qualifying electric transmission transaction.--For 
        purposes of this subsection, the term `qualifying electric 
        transmission transaction' means any sale or other disposition 
        before January 1, 2009, of--
                    ``(A) property used 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.
            ``(4) 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. 823b) 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 subsection 
                        (a)(2)(B) as extended under paragraph (2), 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.
            ``(5) Exempt utility property.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `exempt utility 
                property' means property used in the trade or business 
                of--
                            ``(i) generating, transmitting, 
                        distributing, or selling electricity, or
                            ``(ii) producing, transmitting, 
                        distributing, or selling natural gas.
                    ``(B) Nonrecognition of gain by reason of 
                acquisition of stock.--Acquisition of control of a 
                corporation shall be taken into account under this 
                section with respect to a qualifying electric 
                transmission transaction only if the principal trade or 
                business of such corporation is a trade or business 
                referred to in subparagraph (A).
            ``(6) Special rule for consolidated groups.--In the case of 
        a corporation which is a member of an affiliated group filing a 
        consolidated return, such corporation shall be treated as 
        satisfying the purchase requirement of subsection (a)(2) with 
        respect to any qualifying electric transmission transaction 
        engaged in by such corporation to the extent such requirement 
        is satisfied by another member of such group.
            ``(7) Election.--An election under paragraph (1), once 
        made, shall be irrevocable.''
    (b) Exception From Gain Recognition under Section 1245.--Subsection 
(b) of section 1245 is amended by adding at the end the following new 
paragraph:
            ``(9) Dispositions to implement federal energy regulatory 
        commission or state electric restructuring policy.--At the 
        election of the taxpayer, the amount of gain which would (but 
        for this paragraph) be recognized under this section on any 
        qualified electric transmission transaction (as defined in 
        section 1033(k)) for which an election under section 1033 is 
        made shall be reduced by the aggregate reduction in the basis 
        of section 1245 property held by the taxpayer or, if 
        insufficient, by a member of an affiliated group which includes 
        the taxpayer at any time during the taxable year in which such 
        transaction occurred. The manner and amount of such reduction 
        shall be determined under regulations prescribed by the 
        Secretary.''
    (c) Effective Date.--The amendments made by this section shall 
apply to transactions occurring after the date of the enactment of this 
Act.

SEC. 3209. DISTRIBUTIONS OF STOCK TO IMPLEMENT FEDERAL ENERGY 
              REGULATORY COMMISSION OR STATE ELECTRIC RESTRUCTURING 
              POLICY.

    (a) In General.--Subparagraph (A) of section 355(e)(3) (relating to 
special rules relating to acquisitions) is amended by inserting after 
clause (iv) the following new clause:
                            ``(v) The acquisition of stock in any 
                        controlled corporation in a qualifying electric 
                        transmission transaction (as defined in section 
                        1033(k)).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to distributions after the date of the enactment of this Act.

SEC. 3210. 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.--
            ``(1) In general.--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.
            ``(2) Contributions after funding period.--Notwithstanding 
        any other provision of this section, a taxpayer may pay into 
        the Fund in any taxable year after the last taxable year to 
        which the ruling amount applies. Payments may not be made under 
        the preceding sentence to the extent such payments would cause 
        the assets of the Fund to exceed the nuclear decommissioning 
        costs allocable to the taxpayer's current or former interest in 
        the nuclear powerplant to which the Fund relates. The 
        limitation under the preceding sentence shall be determined by 
        taking into account a reasonable rate of inflation for the 
        nuclear decommissioning costs and a reasonable after-tax rate 
        of return on the assets of the Fund until such assets are 
        anticipated to be expended.''.
    (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 
        powerplant, the taxpayer transfers the Fund with respect to 
        such powerplant 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) Treatment of Certain Decommissioning Costs.--
            (1) In general.--Section 468A is amended by redesignating 
        subsections (f) and (g) as subsections (g) and (h), 
        respectively, and by inserting after subsection (e) the 
        following new subsection:
    ``(f) Transfers Into Qualified Funds.--
            ``(1) In general.--Notwithstanding subsection (b), any 
        taxpayer maintaining a Fund to which this section applies with 
        respect to a nuclear powerplant may transfer into such Fund up 
        to an amount equal to the excess of the total nuclear 
        decommissioning costs with respect to such nuclear powerplant 
        over the portion of such costs taken into account in 
        determining the ruling amount in effect immediately before the 
        transfer.
            ``(2) Deduction for amounts transferred.--
                    ``(A) In general.--The deduction allowed by 
                subsection (a) for any transfer permitted by this 
                subsection shall be allowed ratably over the remaining 
                estimated useful life (within the meaning of subsection 
                (d)(2)(A)) of the nuclear powerplant beginning with the 
                taxable year during which the transfer is made.
                    ``(B) Denial of deduction for previously deducted 
                amounts.--No deduction shall be allowed for any 
                transfer under this subsection of an amount for which a 
                deduction was previously allowed or a corresponding 
                amount was not included in gross income. For purposes 
                of the preceding sentence, a ratable portion of each 
                transfer shall be treated as being from previously 
                deducted or excluded amounts to the extent thereof.
                    ``(C) Transfers of qualified funds.--If--
                            ``(i) any transfer permitted by this 
                        subsection is made to any Fund to which this 
                        section applies, and
                            ``(ii) such Fund is transferred thereafter,
                any deduction under this subsection for taxable years 
                ending after the date that such Fund is transferred 
                shall be allowed to the transferee and not to the 
                transferor. The preceding sentence shall not apply if 
                the transferor is an organization exempt from tax 
                imposed by this chapter.
                    ``(D) Special rules.--
                            ``(i) Gain or loss not recognized.--No gain 
                        or loss shall be recognized on any transfer 
                        permitted by this subsection.
                            ``(ii) Transfers of appreciated property.--
                        If appreciated property is transferred in a 
                        transfer permitted by this subsection, the 
                        amount of the deduction shall be the adjusted 
                        basis of such property.
            ``(3) New ruling amount required.--Paragraph (1) shall not 
        apply to any transfer unless the taxpayer requests from the 
        Secretary a new schedule of ruling amounts in connection with 
        such transfer.
            ``(4) No basis in qualified funds.--Notwithstanding any 
        other provision of law, the taxpayer's basis in any Fund to 
        which this section applies shall not be increased by reason of 
        any transfer permitted by this subsection.''.
            (2) New ruling amount to take into account total costs.--
        Subparagraph (A) of section 468A(d)(2) is amended to read as 
        follows:
                    ``(A) fund the total nuclear decommissioning costs 
                with respect to such powerplant over the estimated 
                useful life of such powerplant, and''.
    (d) 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.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3211. 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 the period at the end of clause (ii) and inserting a 
        comma, and by adding at the end the following new clauses:
                            ``(iii) from any open access transaction 
                        (other than income received or accrued directly 
                        or indirectly from a member), or
                            ``(iv) from any nuclear decommissioning 
                        transaction.''
            (2) Definitions.--Paragraph (12) of section 501(c) is 
        amended by adding at the end the following new subparagraph:
                    ``(E) For purposes of subparagraph (C)--
                            ``(i) The term `open access transaction' 
                        means any activity which would be a permitted 
                        open access activity (as defined in section 
                        141A(a)(2)) if the cooperative were a 
                        governmental unit.
                            ``(ii) 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 cooperative's interest 
                                in a nuclear powerplant or nuclear 
                                powerplant unit,
                                    ``(II) any distribution from such a 
                                trust, fund, or instrument, or
                                    ``(III) any earnings from such a 
                                trust, fund, or instrument.''
    (b) Income From Load Loss Transactions Treated as Member Income.--
Paragraph (12) of section 501(c) is amended by adding after 
subparagraph (E) the following new subparagraph:
                    ``(F)(i) In the case of a mutual or cooperative 
                electric company, 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 sale (whether at wholesale 
                or at retail) which would be a load loss sale under 
                rules similar to the rules of section 141A(a)(3)(C).
                    ``(iii) A company shall not fail to be treated as a 
                mutual cooperative company for purposes of this 
                paragraph by reason of the treatment under clause (i).
                    ``(iv) A rule similar to the rule of this 
                subparagraph shall apply to an organization to which 
                section 1381 does not apply by reason of section 
                1381(a)(2)(C).''
    (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 load loss sales 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 (F) thereof.''
    (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. 3212. REPEAL OF REQUIREMENT OF CERTAIN APPROVED TERMINALS TO OFFER 
              DYED DIESEL FUEL AND KEROSENE FOR NONTAXABLE PURPOSES.

    Section 4101 (relating to certain approved terminals of registered 
persons required to offer dyed diesel fuel and kerosene for nontaxable 
purposes) is amended by striking subsection (e).

SEC. 3213. ARBITRAGE RULES NOT TO APPLY TO PREPAYMENTS FOR NATURAL GAS.

    (a) In General.--Subsection (b) of section 148 (defining higher 
yielding investments) is amended by adding at the end the following new 
paragraph:
            ``(4) Exception for certain prepayments to ensure natural 
        gas supply.--The term `investment property' shall not include 
        any prepayment for the purpose of obtaining a supply of a 
        natural gas--
                    ``(A) at least 85 percent of which is to be used in 
                the State in which the issuer is located, and
                    ``(B) which is to be used in a business of one or 
                more utilities each of which is owned and operated by a 
                State or local government, any political subdivision or 
                instrumentality thereof, or any governmental unit 
                acting for or on behalf of such a utility.''.
    (b) Private Loan Financing Test Not To Apply to Prepayments for 
Natural Gas.--Paragraph (2) of section 141(c) (providing exceptions to 
the private loan financing test) is amended by striking ``or'' at the 
end of subparagraph (A), by striking the period at the end of 
subparagraph (B) and inserting ``, or'', and by adding at the end the 
following new subparagraph:
                    ``(C) arises from a transaction described in 
                section 148(b)(4).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after October 22, 1986; except that section 
148(b)(4)(A) of the Internal Revenue Code of 1986, as added by this 
section, shall apply only to obligations issued after the date of the 
enactment of this Act.

                         TITLE III--PRODUCTION

SEC. 3301. OIL AND GAS FROM MARGINAL WELLS.

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

``SEC. 45J. 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 2001, 
                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 `2000' 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 or 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) 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:
            ``(19) the marginal oil and gas well production credit 
        determined under section 45J(a).''.
    (c) Carryback.--Subsection (a) of section 39 (relating to carryback 
and carryforward of unused credits generally) is amended by adding at 
the end the following:
            ``(3) 10-year carryback for marginal oil and gas well 
        production credit.--In the case of the marginal oil and gas 
        well production credit--
                    ``(A) this section shall be applied separately from 
                the business credit (other than the marginal oil and 
                gas well production credit),
                    ``(B) paragraph (1) shall be applied by 
                substituting `10 taxable years' for `1 taxable years' 
                in subparagraph (A) thereof, and
                    ``(C) paragraph (2) shall be applied--
                            ``(i) by substituting `31 taxable years' 
                        for `21 taxable years' in subparagraph (A) 
                        thereof, and
                            ``(ii) by substituting `30 taxable years' 
                        for `20 taxable years' in subparagraph (A) 
                        thereof.''.
    (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 I is amended by adding at the end 
the following:

                              ``Sec. 45J. 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 December 31, 2001.

SEC. 3302. TEMPORARY SUSPENSION OF LIMITATION BASED ON 65 PERCENT OF 
              TAXABLE INCOME AND EXTENSION OF SUSPENSION OF TAXABLE 
              INCOME LIMIT WITH RESPECT TO MARGINAL PRODUCTION.

    (a) Limitation Based on 65 Percent of Taxable Income.--Subsection 
(d) of section 613A (relating to limitation on percentage depletion in 
case of oil and gas wells) is amended by adding at the end the 
following new paragraph:
            ``(6) Temporary suspension of taxable income limit.--
        Paragraph (1) shall not apply to taxable years beginning after 
        December 31, 2001, and before January 1, 2007, including with 
        respect to amounts carried under the second sentence of 
        paragraph (1) to such taxable years.''.
    (b) Extension of Suspension of Taxable Income Limit With Respect to 
Marginal Production.--Subparagraph (H) of section 613A(c)(6) (relating 
to temporary suspension of taxable income limit with respect to 
marginal production) is amended by striking ``2002'' and inserting 
``2007''.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3303. DEDUCTION FOR DELAY RENTAL PAYMENTS.

    (a) In General.--Section 263 (relating to capital expenditures) is 
amended by adding after subsection (i) the following:
    ``(j) Delay Rental Payments for Domestic Oil and Gas Wells.--
            ``(1) In general.--Notwithstanding subsection (a), a 
        taxpayer may elect to treat delay rental payments incurred in 
        connection with the development of oil or gas within the United 
        States (as defined in section 638) as payments which are not 
        chargeable to capital account. Any payments so treated shall be 
        allowed as a deduction in the taxable year in which paid or 
        incurred.
            ``(2) Delay rental payments.--For purposes of paragraph 
        (1), 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) Conforming Amendment.--Section 263A(c)(3) is amended by 
inserting ``263(j),'' after `263(i),'.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2001.

SEC. 3304. ELECTION TO EXPENSE GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

    (a) In General.--Section 263 (relating to capital expenditures) is 
amended by adding after subsection (j) the following:
    ``(k) Geological and Geophysical Expenditures for Domestic Oil and 
Gas Wells.--Notwithstanding subsection (a), a taxpayer may elect to 
treat 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) as expenses which are not chargeable 
to capital account. Any expenses so treated shall be allowed as a 
deduction in the taxable year in which paid or incurred.''.
    (b) Conforming Amendment.--Section 263A(c)(3), as amended by 
section 3303(b), is amended by inserting ``263(k),'' after ``263(j),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred in taxable years beginning after 
December 31, 2001.

SEC. 3305. 5-YEAR NET OPERATING LOSS CARRYBACK FOR LOSSES ATTRIBUTABLE 
              TO OPERATING MINERAL INTERESTS OF OIL AND GAS PRODUCERS.

    (a) In General.--Paragraph (1) of section 172(b) (relating to years 
to which loss may be carried) is amended by adding at the end the 
following new subparagraph:
                    ``(H) Losses on operating mineral interests of oil 
                and gas producers.--In the case of a taxpayer which has 
                an eligible oil and gas loss (as defined in subsection 
                (j)) for a taxable year, such eligible oil and gas loss 
                shall be a net operating loss carryback to each of the 
                5 taxable years preceding the taxable year of such 
                loss.''.
    (b) Eligible Oil and Gas Loss.--Section 172 is amended by 
redesignating subsection (j) as subsection (k) and by inserting after 
subsection (i) the following new subsection:
    ``(j) Eligible Oil and Gas Loss.--For purposes of this section--
            ``(1) In general.--The term `eligible oil and gas loss' 
        means the lesser of--
                    ``(A) the amount which would be the net operating 
                loss for the taxable year if only income and deductions 
                attributable to operating mineral interests (as defined 
                in section 614(d)) in oil and gas wells are taken into 
                account, or
                    ``(B) the amount of the net operating loss for such 
                taxable year.
            ``(2) Coordination with subsection (b)(2).--For purposes of 
        applying subsection (b)(2), an eligible oil and gas loss for 
        any taxable year shall be treated in a manner similar to the 
        manner in which a specified liability loss is treated.
            ``(3) Election.--Any taxpayer entitled to a 5-year 
        carryback under subsection (b)(1)(H) from any loss year may 
        elect to have the carryback period with respect to such loss 
        year determined without regard to subsection (b)(1)(H).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to net operating losses for taxable years beginning after 
December 31, 2001.

SEC. 3306. 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) Extension for oil and certain gas.--In the case of a 
        well for producing qualified fuels described in subparagraph 
        (A) or (B)(i) of subsection (c)(1)--
                    ``(A) Application of credit for new wells.--
                Notwithstanding subsection (f), this section shall 
                apply with respect to such fuels--
                            ``(i) which are produced from a well 
                        drilled after the date of the enactment of this 
                        subsection and before January 1, 2007, and
                            ``(ii) which are sold not later than the 
                        close of the 4-year period beginning on the 
                        date that such well is drilled, or, if earlier, 
                        January 1, 2010.
                    ``(B) Extension of credit for old wells.--
                Subsection (f)(2) shall be applied by substituting 
                `2007' for `2003' with respect to wells described in 
                subsection (f)(1)(A) with respect to such fuels.
            ``(2) Extension for facilities producing qualified fuel 
        from landfill gas.--
                    ``(A) In general.--In the case of a facility for 
                producing qualified fuel from landfill gas which was 
                placed in service after June 30, 1998, and before 
                January 1, 2007, this section shall apply to fuel 
                produced at such facility during the 5-year period 
                beginning on the later of--
                            ``(i) the date such facility was placed in 
                        service, or
                            ``(ii) the date of the enactment of this 
                        subsection.
                    ``(B) Reduction of credit for certain landfill 
                facilities.--In the case of a facility to which 
                paragraph (1) applies and which is subject to the 1996 
                New Source Performance Standards/Emmissions Guidelines 
                of the Environmental Protection Agency, subsection 
                (a)(1) shall be applied by substituting `$2' for `$3'.
            ``(3) Special rules.--In determining the amount of credit 
        allowable under this section solely by reason of this 
        subsection--
                    ``(A) Daily limit.--The amount of qualified fuels 
                sold during any taxable year which may be taken into 
                account by reason of this subsection with respect to 
                any project shall not exceed an average barrel-of-oil 
                equivalent of 200,000 cubic feet of natural gas per 
                day. Days before the date the project is placed in 
                service shall not be taken into account in determining 
                such average.
                    ``(B) Extension period to commence with unadjusted 
                credit amount.--In the case of fuels sold during 2001 
                and 2002, the dollar amount applicable under subsection 
                (a)(1) shall be $3 (without regard to subsection 
                (b)(2)). In the case of fuels sold after 2002, 
                subparagraph (B) of subsection (d)(2) shall be applied 
                by substituting `2002' for `1979'.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to fuel sold after the date of the enactment of this Act.

SEC. 3307. BUSINESS RELATED ENERGY CREDITS ALLOWED AGAINST REGULAR AND 
              MINIMUM TAX.

    (a) In General.--Subsection (c) of section 38 (relating to 
limitation based on amount of tax) is amended by redesignating 
paragraph (3) as paragraph (4) and by inserting after paragraph (2) the 
following new paragraph:
            ``(3) Special rules for specified energy credits.--
                    ``(A) In general.--In the case of specified energy 
                credits--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to such 
                        credits, and
                            ``(ii) in applying paragraph (1) to such 
                        credits--
                                    ``(I) the tentative minimum tax 
                                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 specified 
                                energy credits).
                    ``(B) Specified energy credits.--For purposes of 
                this subsection, the term `specified energy credits' 
                means the credits determined under sections 45G, 45H, 
                45I, 45J, and 45K.''.
    (b) Conforming Amendment.--Subclause (II) of section 
38(c)(2)(A)(ii) is amended by inserting ``or the specified energy 
credits'' after ``employment credit''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of enactment of this Act.

SEC. 3308. TEMPORARY REPEAL OF ALTERNATIVE MINIMUM TAX PREFERENCE FOR 
              INTANGIBLE DRILLING COSTS.

    (a) In General.--Clause (ii) of section 57(a)(2)(E) is amended by 
adding at the end the following new sentence: ``The preceding sentence 
shall not apply to taxable years beginning after December 31, 2001, and 
before January 1, 2005.''.
    (b) Effective Dates.--The amendment made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 3309. ALLOWANCE OF ENHANCED RECOVERY CREDIT AGAINST THE 
              ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subparagraph (B) of section 38(c)(3), as amended 
by section 3307, is amended by adding at the end the following new 
sentence: ``For taxable years beginning before January 1, 2005, such 
term includes the credit determined under section 43.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2001.

SEC. 3310. EXTENSION OF CERTAIN BENEFITS FOR ENERGY-RELATED BUSINESSES 
              ON INDIAN RESERVATIONS.

    (a) Depreciation for Property on Indian Reservations.--Paragraph 
(8) of section 168(j) (relating to termination) is amended by adding at 
the end the following new sentence: ``The preceding sentence shall be 
applied by substituting `December 31, 2006' for `December 31, 2003' in 
the case of property placed in service as part of a facility for--
                    ``(A) the generation or transmission of electricity 
                (including from any qualified energy resource, as 
                defined in section 45(c)),
                    ``(B) an oil or gas well,
                    ``(C) the transmission or refining of oil or gas, 
                or
                    ``(D) the production of any qualified fuel (as 
                defined in section 29(c)).''
    (b) Employment of Indians.--Subsection (f) of section 45A (relating 
to termination) is amended by adding at the end the following new 
sentence: ``The preceding sentence shall be applied by substituting 
`December 31, 2006' for `December 31, 2003' in the case of wages paid 
for services performed at a facility described in section 168(j)(8).''

                               DIVISION D

SEC. 4101. 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. 4102. 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. 4103. 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. 4104. 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. 4105. 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. 4106. 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.''.

                               DIVISION E

SEC. 5000. SHORT TITLE.

    This division may be cited as the ``Clean Coal Power Initiative Act 
of 2001''.

SEC. 5001. FINDINGS.

    Congress finds that--
            (1) reliable, affordable, increasingly clean electricity 
        will continue to power the growing United States economy;
            (2) an increasing use of electrotechnologies, the desire 
        for continuous environmental improvement, a more competitive 
        electricity market, and concerns about rising energy prices add 
        importance to the need for reliable, affordable, increasingly 
        clean electricity;
            (3) coal, which, as of the date of enactment of this Act, 
        accounts for more than \1/2\ of all electricity generated in 
        the United States, is the most abundant fossil energy resource 
        of the United States;
            (4) coal comprises more than 85 percent of all fossil 
        resources in the United States and exists in quantities 
        sufficient to supply the United States for 250 years at current 
        usage rates;
            (5) investments in electricity generating facility 
        emissions control technology over the past 30 years have 
        reduced the aggregate emissions of pollutants from coal-based 
        generating facilities by 21 percent, even as coal use for 
        electricity generation has nearly tripled;
            (6) continuous improvement in efficiency and environmental 
        performance from electricity generating facilities would allow 
        continued use of coal and preserve less abundant energy 
        resources for other energy uses;
            (7) new ways to convert coal into electricity can 
        effectively eliminate health-threatening emissions and improve 
        efficiency by as much as 50 percent, but initial deployment of 
        new coal generation methods and equipment entails significant 
        risk that generators may be unable to accept in a newly 
        competitive electricity market; and
            (8) continued environmental improvement in coal-based 
        generation and increasing the production and supply of power 
        generation facilities with less air emissions, with the 
        ultimate goal of near-zero emissions, is important and 
        desirable.

SEC. 5002. DEFINITIONS.

    In this division:
            (1) Cost and performance goals.--The term ``cost and 
        performance goals'' means the cost and performance goals 
        established under section 5004.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 5003. CLEAN COAL POWER INITIATIVE.

    (a) In General.--The Secretary shall carry out a program under--
            (1) this division;
            (2) the Federal Nonnuclear Energy Research and Development 
        Act of 1974 (42 U.S.C. 5901 et seq.);
            (3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801 
        et seq.); and
            (4) title XIII of the Energy Policy Act of 1992 (42 U.S.C. 
        13331 et seq.),
to achieve cost and performance goals established by the Secretary 
under section 5004.

SEC. 5004. COST AND PERFORMANCE GOALS.

    (a) Review and Assessment.--The Secretary shall perform an 
assessment that establishes measurable cost and performance goals for 
2005, 2010, 2015, and 2020 for the programs authorized by this 
division. Such assessment shall be based on the latest scientific, 
economic, and technical knowledge.
    (b) Consultation.--In establishing the cost and performance goals, 
the Secretary shall consult with representatives of--
            (1) the United States coal industry;
            (2) State coal development agencies;
            (3) the electric utility industry;
            (4) railroads and other transportation industries;
            (5) manufacturers of advanced coal-based equipment;
            (6) institutions of higher learning, national laboratories, 
        and professional and technical societies;
            (7) organizations representing workers;
            (8) organizations formed to--
                    (A) promote the use of coal;
                    (B) further the goals of environmental protection; 
                and
                    (C) promote the production and generation of coal-
                based power from advanced facilities; and
            (9) other appropriate Federal and State agencies.
    (c) Timing.--The Secretary shall--
            (1) not later than 120 days after the date of enactment of 
        this Act, issue a set of draft cost and performance goals for 
        public comment; and
            (2) not later than 180 days after the date of enactment of 
        this Act, after taking into consideration any public comments 
        received, submit to the Committee on Energy and Commerce and 
        the Committee on Science of the House of Representatives, and 
        to the Senate, the final cost and performance goals.

SEC. 5005. AUTHORIZATION OF APPROPRIATIONS.

    (a) Clean Coal Power Initiative.--Except as provided in subsection 
(c), there are authorized to be appropriated to the Secretary to carry 
out the Clean Coal Power Initiative under section 5003 $200,000,000 for 
each of the fiscal years 2002 through 2011, to remain available until 
expended.
    (b) Limit on use of Funds.--Notwithstanding subsection (a), no 
funds may be used to carry out the activities authorized by this Act 
after September 30, 2002, unless the Secretary has transmitted to the 
Committee on Energy and Commerce and the Committee on Science of the 
House of Representatives, and to the Senate, the report required by 
this subsection and 1 month has elapsed since that transmission. The 
report shall include, with respect to subsection (a), a 10-year plan 
containing--
            (1) a detailed assessment of whether the aggregate funding 
        levels provided under subsection (a) are the appropriate 
        funding levels for that program;
            (2) a detailed description of how proposals will be 
        solicited and evaluated, including a list of all activities 
        expected to be undertaken;
            (3) a detailed list of technical milestones for each coal 
        and related technology that will be pursued;
            (4) recommendations for a mechanism for recoupment of 
        Federal funding for successful commercial projects; and
            (5) a detailed description of how the program will avoid 
        problems enumerated in General Accounting Office reports on the 
        Clean Coal Technology Program, including problems that have 
        resulted in unspent funds and projects that failed either 
        financially or scientifically.
    (c) Applicability.--Subsection (b) shall not apply to any project 
begun before September 30, 2002.

SEC. 5006. PROJECT CRITERIA.

    (a) In General.--The Secretary shall not provide funding under this 
division for any project that does not advance efficiency, 
environmental performance, and cost competitiveness well beyond the 
level of technologies that are in operation or have been demonstrated 
as of the date of the enactment of this Act.
    (b) Technical Criteria for Clean Coal Power Initiative.--
            (1) Gasification.--(A) In allocating the funds authorized 
        under section 5005(a), the Secretary shall ensure that at least 
        80 percent of the funds are used only for projects on coal-
        based gasification technologies, including gasification 
        combined cycle, gasification fuel cells, gasification 
        coproduction and hybrid gasification/combustion.
            (B) The Secretary shall set technical milestones specifying 
        emissions levels that coal gasification projects must be 
        designed to and reasonably expected to achieve. The milestones 
        shall get more restrictive through the life of the program. The 
        milestones shall be designed to achieve by 2020 coal 
        gasification projects able--
                    (i) to remove 99 percent of sulfur dioxide;
                    (ii) to emit no more than .05 lbs of NOx per 
                million BTU;
                    (iii) to achieve substantial reductions in mercury 
                emissions; and
                    (iv) to achieve a thermal efficiency of 60 percent 
                (higher heating value).
            (2) Other projects.--For projects not described in 
        paragraph (1), the Secretary shall set technical milestones 
        specifying emissions levels that the projects must be designed 
        to and reasonably expected to achieve. The milestones shall get 
        more restrictive through the life of the program. The 
        milestones shall be designed to achieve by 2010 projects able--
                    (A) to remove 97 percent of sulfur dioxide;
                    (B) to emit no more than .08 lbs of NOx per million 
                BTU;
                    (C) to achieve substantial reductions in mercury 
                emissions; and
                    (D) to achieve a thermal efficiency of 45 percent 
                (higher heating value).
    (c) Financial Criteria.--The Secretary shall not provide a funding 
award under this division unless the recipient has documented to the 
satisfaction of the Secretary that--
            (1) the award recipient is financially viable without the 
        receipt of additional Federal funding;
            (2) the recipient will provide sufficient information to 
        the Secretary for the Secretary to ensure that the award funds 
        are spent efficiently and effectively; and
            (3) a market exists for the technology being demonstrated 
        or applied, as evidenced by statements of interest in writing 
        from potential purchasers of the technology.
    (d) Federal Share.--The Federal share of the cost of a coal or 
related technology project funded by the Secretary shall not exceed 50 
percent.
    (e) Applicability.--Neither the use of any particular technology, 
nor the achievement of any emission reduction, by any facility 
receiving assistance under this title shall be taken into account for 
purposes of making any determination under the Clean Air Act in 
applying the provisions of that Act to a facility not receiving 
assistance under this title, including any determination concerning new 
source performance standards, lowest achievable emission rate, best 
available control technology, or any other standard, requirement, or 
limitation.

SEC. 5007. STUDY.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, and once every 2 years thereafter through 2016, the 
Secretary, in cooperation with other appropriate Federal agencies, 
shall transmit to the Committee on Energy and Commerce and the 
Committee on Science of the House of Representatives, and to the 
Senate, a report containing the results of a study to--
            (1) identify efforts (and the costs and periods of time 
        associated with those efforts) that, by themselves or in 
        combination with other efforts, may be capable of achieving the 
        cost and performance goals;
            (2) develop recommendations for the Department of Energy to 
        promote the efforts identified under paragraph (1); and
            (3) develop recommendations for additional authorities 
        required to achieve the cost and performance goals.
    (b) Expert Advice.--In carrying out this section, the Secretary 
shall give due weight to the expert advice of representatives of the 
entities described in section 5004(b).

                               DIVISION F

SEC. 6001. SHORT TITLE.

    This division may be cited as the ``Energy Security Act''.

      TITLE I--GENERAL PROTECTIONS FOR ENERGY SUPPLY AND SECURITY

SEC. 6101. STUDY OF EXISTING RIGHTS-OF-WAY ON FEDERAL LANDS TO 
              DETERMINE CAPABILITY TO SUPPORT NEW PIPELINES OR OTHER 
              TRANSMISSION FACILITIES.

    (a) In General.--Within one year after the date of enactment of 
this Act, the head of each Federal agency that has authorized a right-
of-way across Federal lands for transportation of energy supplies or 
transmission of electricity shall review each such right-of-way and 
submit a report to the Secretary of Energy and the Chairman of the 
Federal Energy Regulatory Commission regarding--
            (1) whether the right-of-way can be used to support new or 
        additional capacity; and
            (2) what modifications or other changes, if any, would be 
        necessary to accommodate such additional capacity.
    (b) Consultations and Considerations.--In performing the review, 
the head of each agency shall--
            (1) consult with agencies of State, tribal, or local units 
        of government as appropriate; and
            (2) consider whether safety or other concerns related to 
        current uses might preclude the availability of a right-of-way 
        for additional or new transportation or transmission 
        facilities, and set forth those considerations in the report.

SEC. 6102. INVENTORY OF ENERGY PRODUCTION POTENTIAL OF ALL FEDERAL 
              PUBLIC LANDS.

    (a) Inventory Requirement.--The Secretary of the Interior, in 
consultation with the Secretary of Agriculture and the Secretary of 
Energy, shall conduct an inventory of the energy production potential 
of all Federal public lands other than national park lands and lands in 
any wilderness area, with respect to wind, solar, coal, and geothermal 
power production.
    (b) Limitations.--
            (1) In general.--The Secretary shall not include in the 
        inventory under this section the matters to be identified in 
        the inventory under section 604 of the Energy Act of 2000 (42 
        U.S.C. 6217).
            (2) Wind and solar power.--The inventory under this 
        section--
                    (A) with respect to wind power production shall be 
                limited to sites having a mean average wind speed--
                            (i) exceeding 12.5 miles per hour at a 
                        height of 33 feet; and
                            (ii) exceeding 15.7 miles per hour at a 
                        height of 164 feet; and
                    (B) with respect to solar power production shall be 
                limited to areas rated as receiving 450 watts per 
                square meter or greater.
    (c) Examination of Restrictions and Impediments.--The inventory 
shall identify the extent and nature of any restrictions or impediments 
to the development of such energy production potential.
    (d) Geothermal Power.--The inventory shall include an update of the 
1978 Assessment of Geothermal Resources by the United States Geological 
Survey.
    (e) Completion and Updating.--The Secretary--
            (1) shall complete the inventory by not later than 2 years 
        after the date of the enactment of this Act; and
            (2) shall update the inventory regularly thereafter.
    (f) Reports.--The Secretary shall submit to the Committee on 
Resources of the House of Representatives and to the Committee on 
Energy and Natural Resources of the Senate and make publicly 
available--
            (1) a report containing the inventory under this section, 
        by not later than 2 years after the effective date of this 
        section; and
            (2) each update of such inventory.

SEC. 6103. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO EMERGING 
              ENERGY TECHNOLOGY.

    (a) In General.--Each Federal agency shall carry out a review of 
its regulations and standards to determine those that act as a barrier 
to market entry for emerging energy-efficient technologies, including 
fuel cells, combined heat and power, and distributed generation 
(including small-scale renewable energy).
    (b) Report to Congress.--No later than 18 months after date of 
enactment of this Act, each agency shall provide a report to the 
Congress and the President detailing all regulatory barriers to 
emerging energy-efficient technologies, along with actions the agency 
intends to take, or has taken, to remove such barriers.
    (c) Periodic Review.--Each agency shall subsequently review its 
regulations and standards in this manner no less frequently than every 
5 years, and report their findings to the Congress and the President. 
Such reviews shall include a detailed analysis of all agency actions 
taken to remove existing barriers to emerging energy technologies.

SEC. 6104. INTERAGENCY AGREEMENT ON ENVIRONMENTAL REVIEW OF INTERSTATE 
              NATURAL GAS PIPELINE PROJECTS.

    (a) In General.--The Secretary of Energy, in coordination with the 
Federal Energy Regulatory Commission, shall establish an administrative 
interagency task force to develop an interagency agreement to expedite 
and facilitate the environmental review and permitting of interstate 
natural gas pipeline projects.
    (b) Task Force Members.--The task force shall include a 
representative of each of the Bureau of Land Management, the United 
States Fish and Wildlife Service, the Army Corps of Engineers, the 
Forest Service, the Environmental Protection Agency, the Advisory 
Council on Historic Preservation, and such other agencies as the 
Secretary of Energy and the Federal Energy Regulatory Commission 
consider appropriate.
    (c) Terms of Agreement.--The interagency agreement shall require 
that agencies complete their review of interstate pipeline projects 
within a specific period of time after referral of the matter by the 
Federal Energy Regulatory Commission.
    (d) Submittal of Agreement.--The Secretary of Energy shall submit a 
final interagency agreement under this section to the Congress by not 
later than 6 months after the effective date of this section.

SEC. 6105. ENHANCING ENERGY EFFICIENCY IN MANAGEMENT OF FEDERAL LANDS.

    (a) Sense of the Congress.--It is the sense of Congress that 
Federal land managing agencies should enhance the use of energy 
efficient technologies in the management of natural resources.
    (b) Energy Efficient Buildings.--To the extent economically 
practicable, the Secretary of the Interior and the Secretary of 
Agriculture shall seek to incorporate energy efficient technologies in 
public and administrative buildings associated with management of the 
National Park System, National Wildlife Refuge System, National Forest 
System, and other public lands and resources managed by such 
Secretaries.
    (c) Energy Efficient Vehicles.--To the extent economically 
practicable, the Secretary of the Interior and the Secretary of 
Agriculture shall seek to use energy efficient motor vehicles, 
including vehicles equipped with biodiesel or hybrid engine 
technologies, in the management of the National Park System, National 
Wildlife Refuge System, and other public lands and managed by the 
Secretaries.

                   TITLE II--OIL AND GAS DEVELOPMENT

                    Subtitle A--Offshore Oil and Gas

SEC. 6201. SHORT TITLE.

    This subtitle may be referred to as the ``Royalty Relief Extension 
Act of 2001''.

SEC. 6202. LEASE SALES IN WESTERN AND CENTRAL PLANNING AREA OF THE GULF 
              OF MEXICO.

    (a) In General.--For all tracts located in water depths of greater 
than 200 meters in the Western and Central Planning Area of the Gulf of 
Mexico, including that portion of the Eastern Planning Area of the Gulf 
of Mexico encompassing whole lease blocks lying west of 87 degrees, 30 
minutes West longitude, any oil or gas lease sale under the Outer 
Continental Shelf Lands Act occurring within 2 years after the date of 
enactment of this Act shall use the bidding system authorized in 
section 8(a)(1)(H) of the Outer Continental Shelf Lands Act (30 U.S.C. 
1337(a)(1)(H)), except that the suspension of royalties shall be set at 
a volume of not less than the following:
            (1) 5 million barrels of oil equivalent for each lease in 
        water depths of 400 to 800 meters.
            (2) 9 million barrels of oil equivalent for each lease in 
        water depths of 800 to 1,600 meters.
            (3) 12 million barrels of oil equivalent for each lease in 
        water depths greater than 1,600 meters.
    (b) Relationship to Existing Authority.--Except as expressly 
provided in this section, nothing in this section is intended to limit 
the authority of the Secretary of the Interior under the Outer 
Continental Shelf Lands Act (43 U.S.C. 1301 et seq.) to provide royalty 
suspension.

SEC. 6203. SAVINGS CLAUSE.

    Nothing in this subtitle shall be construed to affect any offshore 
pre-leasing, leasing, or development moratorium, including any 
moratorium applicable to the Eastern Planning Area of the Gulf of 
Mexico located off the Gulf Coast of Florida.

SEC. 6204. ANALYSIS OF GULF OF MEXICO FIELD SIZE DISTRIBUTION, 
              INTERNATIONAL COMPETITIVENESS, AND INCENTIVES FOR 
              DEVELOPMENT.

    (a) In General.--The Secretary of the Interior and the Secretary of 
Energy shall enter into appropriate arrangements with the National 
Academy of Sciences to commission the Academy to perform the following:
            (1) Conduct an analysis and review of existing Gulf of 
        Mexico oil and natural gas resource assessments, including--
                    (A) analysis and review of assessments recently 
                performed by the Minerals Management Service, the 1999 
                National Petroleum Council Gas Study, the Department of 
                Energy's Offshore Marginal Property Study, and the 
                Advanced Resources International, Inc. Deepwater Gulf 
                of Mexico model; and
                    (B) evaluation and comparison of the accuracy of 
                assumptions of the existing assessments with respect to 
                resource field size distribution, hydrocarbon 
                potential, and scenarios for leasing, exploration, and 
                development.
            (2) Evaluate the lease terms and conditions offered by the 
        Minerals Management Service for Lease Sale 178, and compare the 
        financial incentives offered by such terms and conditions to 
        financial incentives offered by the terms and conditions that 
        apply under leases for other offshore areas that are competing 
        for the same limited offshore oil and gas exploration and 
        development capital, including offshore areas of West Africa 
        and Brazil.
            (3) Recommend what level of incentives for all water depths 
        are appropriate in order to ensure that the United States 
        optimizes the domestic supply of oil and natural gas from the 
        offshore areas of the Gulf of Mexico that are not subject to 
        current leasing moratoria. Recommendations under this paragraph 
        should be made in the context of the importance of the oil and 
        natural gas resources of the Gulf of Mexico to the future 
        energy and economic needs of the United States.
    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of the Interior shall submit a report to the 
Committee on Resources in the House of Representatives and the 
Committee on Energy and Natural Resources in the Senate, summarizing 
the findings of the National Academy of Sciences pursuant to subsection 
(a) and providing recommendations of the Secretary for new policies or 
other actions that could help to further increase oil and natural gas 
production from the Gulf of Mexico.

       Subtitle B--Improvements to Federal Oil and Gas Management

SEC. 6221. SHORT TITLE.

    This subtitle may be cited as the ``Federal Oil and Gas Lease 
Management Improvement Demonstration Program Act of 2001''.

SEC. 6222. STUDY OF IMPEDIMENTS TO EFFICIENT LEASE OPERATIONS.

    (a) In General.--The Secretary of the Interior and the Secretary of 
Agriculture shall jointly undertake a study of the impediments to 
efficient oil and gas leasing and operations on Federal onshore lands 
in order to identify means by which unnecessary impediments to the 
expeditious exploration and production of oil and natural gas on such 
lands can be removed.
    (b) Contents.--The study under subsection (a) shall include the 
following:
            (1) A review of the process by which Federal land managers 
        accept or reject an offer to lease, including the timeframes in 
        which such offers are acted upon, the reasons for any delays in 
        acting upon such offers, and any recommendations for expediting 
        the response to such offers.
            (2) A review of the approval process for applications for 
        permits to drill, including the timeframes in which such 
        applications are approved, the impact of compliance with other 
        Federal laws on such timeframes, any other reasons for delays 
        in making such approvals, and any recommendations for 
        expediting such approvals.
            (3) A review of the approval process for surface use plans 
        of operation, including the timeframes in which such 
        applications are approved, the impact of compliance with other 
        Federal laws on such timeframes, any other reasons for delays 
        in making such approvals, and any recommendations for 
        expediting such approvals.
            (4) A review of the process for administrative appeal of 
        decisions or orders of officers or employees of the Bureau of 
        Land Management with respect to a Federal oil or gas lease, 
        including the timeframes in which such appeals are heard and 
        decided, any reasons for delays in hearing or deciding such 
        appeals, and any recommendations for expediting the appeals 
        process.
    (c) Report.--The Secretaries shall report the findings and 
recommendations resulting from the study required by this section to 
the Committee on Resources of the House of Representatives and to the 
Committee on Energy and Natural Resources of the Senate no later than 6 
months after the date of the enactment of this Act.

SEC. 6223. ELIMINATION OF UNWARRANTED DENIALS AND STAYS.

    (a) In General.--The Secretary shall ensure that unwarranted 
denials and stays of lease issuance and unwarranted restrictions on 
lease operations are eliminated from the administration of oil and 
natural gas leasing on Federal land.
    (b) Land Designated for Multiple Use.--Federal land available for 
oil and natural gas leasing under any Bureau of Land Management 
resource management plan or Forest Service leasing analysis shall be 
available without lease stipulations more stringent than restrictions 
on surface use and operations imposed under the laws (including 
regulations) of the oil and natural gas conservation authority of the 
State in which the lands are located, unless the Secretary includes in 
the decision approving the management plan or leasing analysis or in 
the Secretary's acceptance of an offer to lease a written explanation 
why more stringent stipulations are warranted.
    (c) Rejection of Offer To Lease.--
            (1) In general.--If the Secretary rejects an offer to lease 
        Federal lands for oil or natural gas development on the ground 
        that the land is unavailable for oil and natural gas leasing, 
        the Secretary shall provide a written, detailed explanation of 
        the reasons the land is unavailable for leasing.
            (2) Previous resource management decision.--If the 
        determination of unavailability is based on a previous resource 
        management decision, the explanation shall include a careful 
        assessment of whether the reasons underlying the previous 
        decision are still persuasive.
            (3) Segregation of available land from unavailable land.--
        The Secretary may not reject an offer to lease Federal land for 
        oil and natural gas development that is available for such 
        leasing on the ground that the offer includes land unavailable 
        for leasing. The Secretary shall segregate available land from 
        unavailable land, on the offeror's request following notice by 
        the Secretary, before acting on the offer to lease.
    (d) Disapproval or Required Modification of Surface Use Plans of 
Operations and Application for Permit To Drill.--The Secretary shall 
provide a written, detailed explanation of the reasons for disapproving 
or requiring modifications of any surface use plan of operations or 
application for permit to drill with respect to oil or natural gas 
development on Federal lands.

SEC. 6224. LIMITATION ON COST RECOVERY FOR APPLICATIONS.

    Notwithstanding sections 304 and 504 of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1734, 1764) and section 9701 of title 
31, United States Code, the Secretary shall not recover the Secretary's 
costs with respect to applications and other documents relating to oil 
and gas leases.

SEC. 6225. CONSULTATION WITH SECRETARY OF AGRICULTURE.

    Section 17(h) of the Mineral Leasing Act (30 U.S.C. 226(h)) is 
amended to read as follows:
    ``(h)(1) In issuing any lease on National Forest System lands 
reserved from the public domain, the Secretary of the Interior shall 
consult with the Secretary of Agriculture in determining stipulations 
on surface use under the lease.
    ``(2)(A) A lease on lands referred to in paragraph (1) may not be 
issued if the Secretary of Agriculture determines, after consultation 
under paragraph (1), that the terms and conditions of the lease, 
including any prohibition on surface occupancy for lease operations, 
will not be sufficient to adequately protect such lands under the 
National Forest Management Act of 1976 (16 U.S.C. 1600 et seq.).
    ``(B) The authority of the Secretary of Agriculture under this 
paragraph may be delegated only to the Undersecretary of Agriculture 
for Natural Resources and Environment.''.

                       Subtitle C--Miscellaneous

SEC. 6231. OFFSHORE SUBSALT 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, to prevent 
waste caused by the drilling of unnecessary wells and to facilitate the 
discovery of additional hydrocarbon reserves, the Secretary may grant a 
request for a suspension of operations under any lease to allow the 
reprocessing and reinterpretation of geophysical data to identify and 
define drilling objectives beneath allocthonus salt sheets.''.

SEC. 6232. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.

    (a) Applicability of Section.--Notwithstanding any other provision 
of law, the provisions of this section shall apply to all royalty in 
kind accepted by the Secretary of the Interior under any Federal oil or 
gas lease or permit under section 36 of the Mineral Leasing Act (30 
U.S.C. 192), section 27 of the Outer Continental Shelf Lands Act (43 
U.S.C. 1353), or any other mineral leasing law, in the period beginning 
on the date of enactment of this Act through September 30, 2006.
    (b) Terms and Conditions.--All royalty accruing to the United 
States under any Federal oil or gas lease or permit under the Mineral 
Leasing Act (30 U.S.C. 181 et seq.) or the Outer Continental Shelf 
Lands Act (43 U.S.C. 1331 et seq.) shall, on the demand of the 
Secretary of the Interior, be paid in oil or gas. If the Secretary of 
the Interior makes such a demand, the following provisions apply to 
such payment:
            (1) Delivery by, or on behalf of, the lessee of the royalty 
        amount and quality due under the lease satisfies the lessee's 
        royalty obligation for the amount delivered, except that 
        transportation and processing reimbursements paid to, or 
        deductions claimed by, the lessee shall be subject to review 
        and audit.
            (2) Royalty production shall be placed in marketable 
        condition by the lessee at no cost to the United States.
            (3) The Secretary of the Interior may--
                    (A) sell or otherwise dispose of any royalty oil or 
                gas taken in kind (other than oil or gas taken under 
                section 27(a)(3) of the Outer Continental Shlef Lands 
                Act (43 U.S.C. 1353(a)(3)) for not less than the market 
                price; and
                    (B) transport or process any oil or gas royalty 
                taken in kind.
            (4) The Secretary of the Interior may, notwithstanding 
        section 3302 of title 31, United States Code, retain and use a 
        portion of the revenues from the sale of oil and gas royalties 
        taken in kind that otherwise would be deposited to 
        miscellaneous receipts, without regard to fiscal year 
        limitation, or may use royalty production, to pay the cost of--
                    (A) transporting the oil or gas,
                    (B) processing the gas, or
                    (C) disposing of the oil or gas.
            (5) The Secretary may not use revenues from the sale of oil 
        and gas royalties taken in kind to pay for personnel, travel, 
        or other administrative costs of the Federal Government.
    (c) Reimbursement of Cost.--If the lessee, pursuant to an agreement 
with the United States or as provided in the lease, processes the 
royalty gas or delivers the royalty oil or gas at a point not on or 
adjacent to the lease area, the Secretary of the Interior shall--
            (1) reimburse the lessee for the reasonable costs of 
        transportation (not including gathering) from the lease to the 
        point of delivery or for processing costs; or
            (2) at the discretion of the Secretary of the Interior, 
        allow the lessee to deduct such transportation or processing 
        costs in reporting and paying royalties in value for other 
        Federal oil and gas leases.
    (d) Benefit to the United States Required.--The Secretary may 
receive oil or gas royalties in kind only if the Secretary determines 
that receiving such royalties provides benefits to the United States 
greater than or equal to those that would be realized under a 
comparable royalty in value program.
    (e) Report to Congress.--For each of the fiscal years 2002 through 
2006 in which the United States takes oil or gas royalties in kind from 
production in any State or from the Outer Continental Shelf, excluding 
royalties taken in kind and sold to refineries under subsection (h), 
the Secretary of the Interior shall provide a report to the Congress 
describing--
            (1) the methodology or methodologies used by the Secretary 
        to determine compliance with subsection (d), including 
        performance standards for comparing amounts received by the 
        United States derived from such royalties in kind to amounts 
        likely to have been received had royalties been taken in value;
            (2) an explanation of the evaluation that led the Secretary 
        to take royalties in kind from a lease or group of leases, 
        including the expected revenue effect of taking royalties in 
        kind;
            (3) actual amounts received by the United States derived 
        from taking royalties in kind, and costs and savings incurred 
        by the United States associated with taking royalties in kind; 
        and
            (4) an evaluation of other relevant public benefits or 
        detriments associated with taking royalties in kind.
    (f) Deduction of Expenses.--
            (1) In general.--Before making payments under section 35 of 
        the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of the 
        Outer Continental Shelf Lands Act (30 U.S.C. 1337(g)) of 
        revenues derived from the sale of royalty production taken in 
        kind from a lease, the Secretary of the Interior shall deduct 
        amounts paid or deducted under subsections (b)(4) and (c), and 
        shall deposit such amounts to miscellaneous receipts.
            (2) Accounting for deductions.--If the Secretary of the 
        Interior allows the lessee to deduct transportation or 
        processing costs under subsection (c), the Secretary may not 
        reduce any payments to recipients of revenues derived from any 
        other Federal oil and gas lease as a consequence of that 
        deduction.
    (g) Consultation With States.--The Secretary of the Interior--
            (1) shall consult with a State before conducting a royalty 
        in kind program under this title within the State, and may 
        delegate management of any portion of the Federal royalty in 
        kind program to such State except as otherwise prohibited by 
        Federal law; and
            (2) shall consult annually with any State from which 
        Federal oil or gas royalty is being taken in kind to ensure to 
        the maximum extent practicable that the royalty in kind program 
        provides revenues to the State greater than or equal to those 
        which would be realized under a comparable royalty in value 
        program.
    (h) Provisions for Small Refineries.--
            (1) Preference.--If the Secretary of the Interior 
        determines that sufficient supplies of crude oil are not 
        available in the open market to refineries not having their own 
        source of supply for crude oil, the Secretary may grant 
        preference to such refineries in the sale of any royalty oil 
        accruing or reserved to the United States under Federal oil and 
        gas leases issued under any mineral leasing law, for processing 
        or use in such refineries at private sale at not less than the 
        market price.
            (2) Proration among refineries in production area.--In 
        disposing of oil under this subsection, the Secretary of the 
        Interior may, at the discretion of the Secretary, prorate such 
        oil among such refineries in the area in which the oil is 
        produced.
    (i) Disposition to Federal Agencies.--
            (1) Onshore royalty.--Any royalty oil or gas taken by the 
        Secretary in kind from onshore oil and gas leases may be sold 
        at not less than the market price to any department or agency 
        of the United States.
            (2) Offshore royalty.--Any royalty oil or gas taken in kind 
        from Federal oil and gas leases on the Outer Continental Shelf 
        may be disposed of only under section 27 of the Outer 
        Continental Shelf Lands Act (43 U.S.C. 1353).
    (j) Preference for Federal Low-Income Energy Assistance Programs.--
In disposing of royalty oil or gas taken in kind under this section, 
the Secretary may grant a preference to any person, including any State 
or Federal agency, for the purpose of providing additional resources to 
any Federal low-income energy assistance program.

SEC. 6233. MARGINAL WELL PRODUCTION INCENTIVES.

    To enhance the economics of marginal oil and gas production by 
increasing the ultimate recovery from marginal wells when the cash 
price of West Texas Intermediate crude oil, as posted on the Dow Jones 
Commodities Index chart, is less than $15 per barrel for 180 
consecutive pricing days or when the price of natural gas delivered at 
Henry Hub, Louisiana, is less than $2.00 per million British thermal 
units for 180 consecutive days, the Secretary shall reduce the royalty 
rate as production declines for--
            (1) onshore oil wells producing less than 30 barrels per 
        day;
            (2) onshore gas wells producing less than 120 million 
        British thermal units per day;
            (3) offshore oil wells producing less than 300 barrels of 
        oil per day; and
            (4) offshore gas wells producing less than 1,200 million 
        British thermal units per day.

SEC. 6234. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, AND 
              STUDIES.

    The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended by 
inserting after section 37 the following:

   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

    ``Sec. 38. (a) In General.--The Secretary of the Interior may 
reimburse a person who is a lessee, operator, operating rights owner, 
or applicant for an oil or gas lease under this Act for costs incurred 
by the person in preparing any project-level analysis, documentation, 
or related study required under the National Environmental Policy Act 
of 1969 (42 U.S.C. 4321 et seq.) with respect to the lease, through 
royalty credits attributable to the lease, unit agreement, or project 
area for which the analysis, documentation, or related study is 
prepared.
    ``(b) Conditions.--The Secretary may provide reimbursement under 
subsection (b) only if--
            ``(1) adequate funding to enable the Secretary to timely 
        prepare the analysis, documentation, or related study is not 
        appropriated;
            ``(2) the person paid the costs voluntarily; and
            ``(3) the person maintains records of its costs in 
        accordance with regulations prescribed by the Secretary.''.
    (c) Application.--The amendments made by this section shall apply 
with respect to any lease entered into before, on, or after the date of 
the enactment of this Act.
    (d) Deadline for Regulations.--The Secretary shall issue 
regulations implementing the amendments made by this section by not 
later than 90 days after the date of the enactment of this Act.

                TITLE III--GEOTHERMAL ENERGY DEVELOPMENT

SEC. 6301. ROYALTY REDUCTION AND RELIEF.

    (a) Royalty Reduction.--Section 5(a) of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004(a)) is amended by striking ``not less than 10 per 
centum or more than 15 per centum'' and inserting ``not more than 8 per 
centum''.
    (b) Royalty Relief.--
            (1) In general.--Notwithstanding section 5 of the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1004(a)) and any 
        provision of any lease under that Act, no royalty is required 
        to be paid--
                    (A) under any qualified geothermal energy lease 
                with respect to commercial production of heat or energy 
                from a facility that begins such production in the 5-
                year period beginning on the date of the enactment of 
                this Act; or
                    (B) on qualified expansion geothermal energy.
            (2) 3-year application.--Paragraph (1) applies only to 
        commercial production of heat or energy from a facility in the 
        first 3 years of such production.
    (c) Definitions.--In this section:
            (1) Qualified expansion geothermal energy.--The term 
        ``qualified expansion geothermal energy''--
                    (A) subject to subparagraph (B), means geothermal 
                energy produced from a generation facility for which 
                the rated capacity is increased by more than 10 percent 
                as a result of expansion of the facility carried out in 
                the 5-year period beginning on the date of enactment of 
                this Act; and
                    (B) does not include the rated capacity of the 
                generation facility on the date of enactment of this 
                Act.
            (2) Qualified geothermal energy lease.--The term 
        ``qualified geothermal energy lease'' means a lease under the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)--
                    (A) that was executed before the end of the 5-year 
                period beginning on the date of the enactment of this 
                Act; and
                    (B) under which no commercial production of any 
                form of heat or energy occurred before the date of the 
                enactment of this Act.

SEC. 6302. EXEMPTION FROM ROYALTIES FOR DIRECT USE OF LOW TEMPERATURE 
              GEOTHERMAL ENERGY RESOURCES.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
amended--
            (1) in paragraph (c) by redesignating subparagraphs (1) and 
        (2) as subparagraphs (A) and (B);
            (2) by redesignating paragraphs (a) through (d) in order as 
        paragraphs (1) through (4);
            (3) by inserting ``(a) In General.--'' after ``Sec. 5.''; 
        and
            (4) by adding at the end the following new subsection:
    ``(b) Exemption for Use of Low Temperature Resources.--
            ``(1) In general.--In lieu of any royalty or rental under 
        subsection (a), a lease for qualified development and direct 
        utilization of low temperature geothermal resources shall 
        provide for payment by the lessee of an annual fee of not less 
        than $100, and not more than $1,000, in accordance with the 
        schedule issued under paragraph (2).
            ``(2) Schedule.--The Secretary shall issue a schedule of 
        fees under this section under which a fee is based on the scale 
        of development and utilization to which the fee applies.
            ``(3) Definitions.--In this subsection:
                    ``(A) Low temperature geothermal resources.--The 
                term `low temperature geothermal resources' means 
                geothermal steam and associated geothermal resources 
                having a temperature of less than 195 degrees 
                Fahrenheit.
                    ``(B) Qualified development and direct 
                utilization.--The term `qualified development and 
                direct utilization' means development and utilization 
                in which all products of geothermal resources, other 
                than any heat utilized, are returned to the geothermal 
                formation from which they are produced.''.

SEC. 6303. AMENDMENTS RELATING TO LEASING ON FOREST SERVICE LANDS.

    The Geothermal Steam Act of 1970 is amended--
            (1) in section 15(b) (30 U.S.C. 1014(b))--
                    (A) by inserting ``(1)'' after ``(b)''; and
                    (B) in paragraph (1) (as designated by subparagraph 
                (A) of this paragraph) in the first sentence--
                            (i) by striking ``with the consent of, 
                        and'' and inserting ``after consultation with 
                        the Secretary of Agriculture and''; and
                            (ii) by striking ``the head of that 
                        Department'' and inserting ``the Secretary of 
                        Agriculture''; and
            (2) by adding at the end the following:
    ``(2)(A) A geothermal lease for lands withdrawn or acquired in aid 
of functions of the Department of Agriculture may not be issued if the 
Secretary of Agriculture, after the consultation required by paragraph 
(1), determines that no terms or conditions, including a prohibition on 
surface occupancy for lease operations, would be sufficient to 
adequately protect such lands under the National Forest Management Act 
of 1976 (16 U.S.C. 1600 et seq.).
    ``(B) The authority of the Secretary of Agriculture under this 
paragraph may be delegated only to the Undersecretary of Agriculture 
for Natural Resources and Environment.''.

SEC. 6304. DEADLINE FOR DETERMINATION ON PENDING NONCOMPETITIVE LEASE 
              APPLICATIONS.

    Not later than 90 days after the date of the enactment of this Act, 
the Secretary of the Interior shall, with respect to each application 
pending on the date of the enactment of this Act for a lease under the 
Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.), issue a final 
determination of--
            (1) whether or not to conduct a lease sale by competitive 
        bidding; and
            (2) whether or not to award a lease without competitive 
        bidding.

SEC. 6305. OPENING OF PUBLIC LANDS UNDER MILITARY JURISDICTION.

    (a) In General.--Except as otherwise provided in the Geothermal 
Steam Act of 1970 (30 U.S.C. 1001 et seq.) and other provisions of 
Federal law applicable to development of geothermal energy resources 
within public lands, all public lands under the jurisdiction of a 
Secretary of a military department shall be open to the operation of 
such laws and development and utilization of geothermal steam and 
associated geothermal resources, as that term is defined in section 2 
of the Geothermal Steam Act of 1970 (30 U.S.C. 1001), without the 
necessity for further action by the Secretary or the Congress.
    (b) Conforming Amendment.--Section 2689 of title 10, United States 
Code, is amended by striking ``including public lands,'' and inserting 
``other than public lands,''.
    (c) Treatment of Existing Leases.--Upon the expiration of any lease 
in effect on the date of the enactment of this Act of public lands 
under the jurisdiction of a military department for the development of 
any geothermal resource, such lease may, at the option of the lessee--
            (1) be treated as a lease under the Geothermal Steam Act of 
        1970 (30 U.S.C. 1001 et seq.), and be renewed in accordance 
        with such Act; or
            (2) be renewed in accordance with the terms of the lease, 
        if such renewal is authorized by such terms.
    (d) Regulations.--The Secretary of the Interior, with the advice 
and concurrence of the Secretary of the military department concerned, 
shall prescribe such regulations to carry out this section as may be 
necessary. Such regulations shall contain guidelines to assist in 
determining how much, if any, of the surface of any lands opened 
pursuant to this section may be used for purposes incident to 
geothermal energy resources development and utilization.
    (e) Closure for Purposes of National Defense or Security.--In the 
event of a national emergency or for purposes of national defense or 
security, the Secretary of the Interior, at the request of the 
Secretary of the military department concerned, shall close any lands 
that have been opened to geothermal energy resources leasing pursuant 
to this section.

SEC. 6306. APPLICATION OF AMENDMENTS.

    The amendments made by this title apply with respect to any lease 
executed before, on, or after the date of the enactment of this Act.

SEC. 6307. REVIEW AND REPORT TO CONGRESS.

    The Secretary of the Interior shall promptly review and report to 
the Congress regarding the status of all moratoria on and withdrawals 
from leasing under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 
seq.) of known geothermal resources areas (as that term is defined in 
section 2 of that Act (30 U.S.C. 1001), specifying for each such area 
whether the basis for such moratoria or withdrawal still applies.

SEC. 6308. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, AND 
              STUDIES.

    (a) In General.--The Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) is amended by adding at the end the following:

   ``reimbursement for costs of certain analyses, documentation, and 
                                studies

    ``Sec. 30. (a) In General.--The Secretary of the Interior may 
reimburse a person who is a lessee, operator, operating rights owner, 
or applicant for a lease under this Act for costs incurred by the 
person in preparing any project-level analysis, documentation, or 
related study required under the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.) with respect to the lease, through 
royalty credits attributable to the lease, unit agreement, or project 
area for which the analysis, documentation, or related study is 
prepared.
    ``(b) Conditions.--The Secretary shall may provide reimbursement 
under subsection (a) only if--
            ``(1) adequate funding to enable the Secretary to timely 
        prepare the analysis, documentation, or related study is not 
        appropriated;
            ``(2) the person paid the costs voluntarily; and
            ``(3) the person maintains records of its costs in 
        accordance with regulations prescribed by the Secretary.''.
    (b) Application.--The amendments made by this section shall apply 
with respect to any lease entered into before, on, or after the date of 
the enactment of this Act.
    (c) Deadline for Regulations.--The Secretary shall issue 
regulations implementing the amendments made by this section by not 
later than 90 days after the date of the enactment of this Act.

                          TITLE IV--HYDROPOWER

SEC. 6401. STUDY AND REPORT ON INCREASING ELECTRIC POWER PRODUCTION 
              CAPABILITY OF EXISTING FACILITIES.

    (a) In General.--The Secretary of the Interior shall conduct a 
study of the potential for increasing electric power production 
capability at existing facilities under the administrative jurisdiction 
of the Secretary.
    (b) Content.--The study under this section shall include 
identification and description in detail of each facility that is 
capable, with or without modification, of producing additional 
hydroelectric power, including estimation of the existing potential for 
the facility to generate hydroelectric power.
    (c) Report.--The Secretary shall submit to the Congress a report on 
the findings, conclusions, and recommendations of the study under this 
section by not later than 12 months after the date of enactment of this 
Act. The Secretary shall include in the report the following:
            (1) The identifications, descriptions, and estimations 
        referred to in subsection (b).
            (2) A description of activities the Secretary is currently 
        conducting or considering, or that could be considered, to 
        produce additional hydroelectric power from each identified 
        facility.
            (3) A summary of action that has already been taken by the 
        Secretary to produce additional hydroelectric power from each 
        identified facility.
            (4) The costs to install, upgrade, or modify equipment or 
        take other actions to produce additional hydroelectric power 
        from each identified facility.
            (5) The benefits that would be achieved by such 
        installation, upgrade, modification, or other action, including 
        quantified estimates of any additional energy or capacity from 
        each facility identified under subsection (b).
            (6) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by replacing turbine runners.
            (7) A description of actions that are planned, underway, or 
        might reasonably be considered to increase hydroelectric power 
        production by performing generator uprates and rewinds.
            (8) The impact of increased hydroelectric power production 
        on irrigation, fish, wildlife, Indian tribes, river health, 
        water quality, navigation, recreation, fishing, and flood 
        control.
            (9) Any additional recommendations the Secretary considers 
        advisable to increase hydroelectric power production from, and 
        reduce costs and improve efficiency at, facilities under the 
        jurisdiction of the Secretary.

SEC. 6402. INSTALLATION OF POWERFORMER AT FOLSOM POWER PLANT, 
              CALIFORNIA.

    (a) In General.--The Secretary of the Interior may install a 
powerformer at the Bureau of Reclamation Folsom power plant in Folsom, 
California, to replace a generator and transformer that are due for 
replacement due to age.
    (b) Reimbursable Costs.--Costs incurred by the United States for 
installation of a powerformer under this section shall be treated as 
reimbursable costs and shall bear interest at current long-term 
borrowing rates of the United States Treasury at the time of 
acquisition.
    (c) Local Cost Sharing.--In addition to reimbursable costs under 
subsection (b), the Secretary shall seek contributions from power users 
toward the costs of the powerformer and its installation.

SEC. 6403. STUDY AND IMPLEMENTATION OF INCREASED OPERATIONAL 
              EFFICIENCIES IN HYDROELECTRIC POWER PROJECTS.

    (a) In General.--The Secretary of Interior shall conduct a study of 
operational methods and water scheduling techniques at all 
hydroelectric power plants under the administrative jurisdiction of the 
Secretary that have an electric power production capacity greater than 
50 megawatts, to--
            (1) determine whether such power plants and associated 
        river systems are operated so as to maximize energy and 
        capacity capabilities; and
            (2) identify measures that can be taken to improve 
        operational flexibility at such plants to achieve such 
        maximization.
    (b) Report.--The Secretary shall submit a report on the findings, 
conclusions, and recommendations of the study under this section by not 
later than 18 months after the date of the enactment of this Act, 
including a summary of the determinations and identifications under 
paragraphs (1) and (2) of subsection (a).
    (c) Cooperation by Federal Power Marketing Administrations.--The 
Secretary shall coordinate with the Administrator of each Federal power 
marketing administration in--
            (1) determining how the value of electric power produced by 
        each hydroelectric power facility that produces power marketed 
        by the administration can be maximized; and
            (2) implementing measures identified under subsection 
        (a)(2).
    (d) Limitation on Implementation of Measures.--Implementation under 
subsections (a)(2) and (b)(2) shall be limited to those measures that 
can be implemented within the constraints imposed on Department of the 
Interior facilities by other uses required by law.

SEC. 6404. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS.

    (a) In General.--The Secretary of the Interior shall--
            (1) review electric power consumption by Bureau of 
        Reclamation facilities for water pumping purposes; and
            (2) make such adjustments in such pumping as possible to 
        minimize the amount of electric power consumed for such pumping 
        during periods of peak electric power consumption, including by 
        performing as much of such pumping as possible during off-peak 
        hours at night.
    (b) Consent of Affected Irrigation Customers Required.--The 
Secretary may not under this section make any adjustment in pumping at 
a facility without the consent of each person that has contracted with 
the United States for delivery of water from the facility for use for 
irrigation and that would be affected by such adjustment.
    (c) Existing Obligations Not Affected.--This section shall not be 
construed to affect any existing obligation of the Secretary to provide 
electric power, water, or other benefits from Bureau of Reclamation 
facilities.

             TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

SEC. 6501. SHORT TITLE.

    This title may be cited as the ``Arctic Coastal Plain Domestic 
Energy Security Act of 2001''.

SEC. 6502. DEFINITIONS.

    In this title:
            (1) Coastal plain.--The term ``Coastal Plain'' means that 
        area identified as such in the map entitled ``Arctic National 
        Wildlife Refuge'', dated August 1980, as referenced in section 
        1002(b) of the Alaska National Interest Lands Conservation Act 
        of 1980 (16 U.S.C. 3142(b)(1)), comprising approximately 
        1,549,000 acres.
            (2) Secretary.--The term ``Secretary'', except as otherwise 
        provided, means the Secretary of the Interior or the 
        Secretary's designee.

SEC. 6503. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL PLAIN.

    (a) In General.--The Secretary shall take such actions as are 
necessary--
            (1) to establish and implement in accordance with this 
        title a competitive oil and gas leasing program under the 
        Mineral Leasing Act (30 U.S.C. 181 et seq.) that will result in 
        an environmentally sound program for the exploration, 
        development, and production of the oil and gas resources of the 
        Coastal Plain; and
            (2) to administer the provisions of this title through 
        regulations, lease terms, conditions, restrictions, 
        prohibitions, stipulations, and other provisions that ensure 
        the oil and gas exploration, development, and production 
        activities on the Coastal Plain will result in no significant 
        adverse effect on fish and wildlife, their habitat, subsistence 
        resources, and the environment, and including, in furtherance 
        of this goal, by requiring the application of the best 
        commercially available technology for oil and gas exploration, 
        development, and production to all exploration, development, 
        and production operations under this title in a manner that 
        ensures the receipt of fair market value by the public for the 
        mineral resources to be leased.
    (b) Repeal.--Section 1003 of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3143) is repealed.
    (c) Compliance With Requirements Under Certain Other Laws.--
            (1) Compatibility.--For purposes of the National Wildlife 
        Refuge System Administration Act of 1966, the oil and gas 
        leasing program and activities authorized by this section in 
        the Coastal Plain are deemed to be compatible with the purposes 
        for which the Arctic National Wildlife Refuge was established, 
        and that no further findings or decisions are required to 
        implement this determination.
            (2) Adequacy of the department of the interior's 
        legislative environmental impact statement.--The ``Final 
        Legislative Environmental Impact Statement'' (April 1987) on 
        the Coastal Plain prepared pursuant to section 1002 of the 
        Alaska National Interest Lands Conservation Act of 1980 (16 
        U.S.C. 3142) and section 102(2)(C) of the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is 
        deemed to satisfy the requirements under the National 
        Environmental Policy Act of 1969 that apply with respect to 
        actions authorized to be taken by the Secretary to develop and 
        promulgate the regulations for the establishment of a leasing 
        program authorized by this title before the conduct of the 
        first lease sale.
            (3) Compliance with nepa for other actions.--Before 
        conducting the first lease sale under this title, the Secretary 
        shall prepare an environmental impact statement under the 
        National Environmental Policy Act of 1969 with respect to the 
        actions authorized by this title that are not referred to in 
        paragraph (2). Notwithstanding any other law, the Secretary is 
        not required to identify nonleasing alternative courses of 
        action or to analyze the environmental effects of such courses 
        of action. The Secretary shall only identify a preferred action 
        for such leasing and a single leasing alternative, and analyze 
        the environmental effects and potential mitigation measures for 
        those two alternatives. The identification of the preferred 
        action and related analysis for the first lease sale under this 
        title shall be completed within 18 months after the date of 
        enactment of this Act. The Secretary shall only consider public 
        comments that specifically address the Secretary's preferred 
        action and that are filed within 20 days after publication of 
        an environmental analysis. Notwithstanding any other law, 
        compliance with this paragraph is deemed to satisfy all 
        requirements for the analysis and consideration of the 
        environmental effects of proposed leasing under this title.
    (d) Relationship to State and Local Authority.--Nothing in this 
title shall be considered to expand or limit State and local regulatory 
authority.
    (e) Special Areas.--
            (1) In general.--The Secretary, after consultation with the 
        State of Alaska, the city of Kaktovik, and the North Slope 
        Borough, may designate up to a total of 45,000 acres of the 
        Coastal Plain as a Special Area if the Secretary determines 
        that the Special Area is of such unique character and interest 
        so as to require special management and regulatory protection. 
        The Secretary shall designate as such a Special Area the 
        Sadlerochit Spring area, comprising approximately 4,000 acres 
        as depicted on the map referred to in section 6502(1).
            (2) Management.--Each such Special Area shall be managed so 
        as to protect and preserve the area's unique and diverse 
        character including its fish, wildlife, and subsistence 
        resource values.
            (3) Exclusion from leasing or surface occupancy.--The 
        Secretary may exclude any Special Area from leasing. If the 
        Secretary leases a Special Area, or any part thereof, for 
        purposes of oil and gas exploration, development, production, 
        and related activities, there shall be no surface occupancy of 
        the lands comprising the Special Area.
            (4) Directional drilling.--Notwithstanding the other 
        provisions of this subsection, the Secretary may lease all or a 
        portion of a Special Area under terms that permit the use of 
        horizontal drilling technology from sites on leases located 
        outside the area.
    (f) Limitation on Closed Areas.--The Secretary's sole authority to 
close lands within the Coastal Plain to oil and gas leasing and to 
exploration, development, and production is that set forth in this 
title.
    (g) Regulations.--
            (1) In general.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out this title, 
        including rules and regulations relating to protection of the 
        fish and wildlife, their habitat, subsistence resources, and 
        environment of the Coastal Plain, by no later than 15 months 
        after the date of enactment of this Act.
            (2) Revision of regulations.--The Secretary shall 
        periodically review and, if appropriate, revise the rules and 
        regulations issued under subsection (a) to reflect any 
        significant biological, environmental, or engineering data that 
        come to the Secretary's attention.

SEC. 6504. LEASE SALES.

    (a) In General.--Lands may be leased pursuant to this title to any 
person qualified to obtain a lease for deposits of oil and gas under 
the Mineral Leasing Act (30 U.S.C. 181 et seq.).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the Coastal Plain for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale;
            (2) the holding of lease sales after such nomination 
        process; and
            (3) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sale Bids.--Bidding for leases under this title shall be 
by sealed competitive cash bonus bids.
    (d) Acreage Minimum in First Sale.--In the first lease sale under 
this title, the Secretary shall offer for lease those tracts the 
Secretary considers to have the greatest potential for the discovery of 
hydrocarbons, taking into consideration nominations received pursuant 
to subsection (b)(1), but in no case less than 200,000 acres.
    (e) Timing of Lease Sales.--The Secretary shall--
            (1) conduct the first lease sale under this title within 22 
        months after the date of enactment of this title; and
            (2) conduct additional sales so long as sufficient interest 
        in development exists to warrant, in the Secretary's judgment, 
        the conduct of such sales.

SEC. 6505. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--The Secretary may grant to the highest responsible 
qualified bidder in a lease sale conducted pursuant to section 6504 any 
lands to be leased on the Coastal Plain upon payment by the lessee of 
such bonus as may be accepted by the Secretary.
    (b) Subsequent Transfers.--No lease issued under this title may be 
sold, exchanged, assigned, sublet, or otherwise transferred except with 
the approval of the Secretary. Prior to any such approval the Secretary 
shall consult with, and give due consideration to the views of, the 
Attorney General.

SEC. 6506. LEASE TERMS AND CONDITIONS.

    (a) In General.--An oil or gas lease issued pursuant to this title 
shall--
            (1) provide for the payment of a royalty of not less than 
        12\1/2\ percent in amount or value of the production removed or 
        sold from the lease, as determined by the Secretary under the 
        regulations applicable to other Federal oil and gas leases;
            (2) provide that the Secretary may close, on a seasonal 
        basis, portions of the Coastal Plain to exploratory drilling 
        activities as necessary to protect caribou calving areas and 
        other species of fish and wildlife;
            (3) require that the lessee of lands within the Coastal 
        Plain shall be fully responsible and liable for the reclamation 
        of lands within the Coastal Plain and any other Federal lands 
        that are adversely affected in connection with exploration, 
        development, production, or transportation activities conducted 
        under the lease and within the Coastal Plain by the lessee or 
        by any of the subcontractors or agents of the lessee;
            (4) provide that the lessee may not delegate or convey, by 
        contract or otherwise, the reclamation responsibility and 
        liability to another person without the express written 
        approval of the Secretary;
            (5) provide that the standard of reclamation for lands 
        required to be reclaimed under this title shall be, as nearly 
        as practicable, a condition capable of supporting the uses 
        which the lands were capable of supporting prior to any 
        exploration, development, or production activities, or upon 
        application by the lessee, to a higher or better use as 
        approved by the Secretary;
            (6) contain terms and conditions relating to protection of 
        fish and wildlife, their habitat, and the environment as 
        required pursuant to section 6503(a)(2);
            (7) provide that the lessee, its agents, and its 
        contractors use best efforts to provide a fair share, as 
        determined by the level of obligation previously agreed to in 
        the 1974 agreement implementing section 29 of the Federal 
        Agreement and Grant of Right of Way for the Operation of the 
        Trans-Alaska Pipeline, of employment and contracting for Alaska 
        Natives and Alaska Native Corporations from throughout the 
        State;
            (8) prohibit the export of oil produced under the lease; 
        and
            (9) contain such other provisions as the Secretary 
        determines necessary to ensure compliance with the provisions 
        of this title and the regulations issued under this title.
    (b) Project Labor Agreements.--The Secretary, as a term and 
condition of each lease under this title and in recognizing the 
Government's proprietary interest in labor stability and in the ability 
of construction labor and management to meet the particular needs and 
conditions of projects to be developed under the leases issued pursuant 
to this title and the special concerns of the parties to such leases, 
shall require that the lessee and its agents and contractors negotiate 
to obtain a project labor agreement for the employment of laborers and 
mechanics on production, maintenance, and construction under the lease.

SEC. 6507. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

    (a) No Significant Adverse Effect Standard To Govern Authorized 
Coastal Plain Activities.--The Secretary shall, consistent with the 
requirements of section 6503, administer the provisions of this title 
through regulations, lease terms, conditions, restrictions, 
prohibitions, stipulations, and other provisions that--
            (1) ensure the oil and gas exploration, development, and 
        production activities on the Coastal Plain will result in no 
        significant adverse effect on fish and wildlife, their habitat, 
        and the environment; and
            (2) require the application of the best commercially 
        available technology for oil and gas exploration, development, 
        and production on all new exploration, development, and 
        production operations.
    (b) Site-Specific Assessment and Mitigation.--The Secretary shall 
also require, with respect to any proposed drilling and related 
activities, that--
            (1) a site-specific analysis be made of the probable 
        effects, if any, that the drilling or related activities will 
        have on fish and wildlife, their habitat, and the environment;
            (2) a plan be implemented to avoid, minimize, and mitigate 
        (in that order and to the extent practicable) any significant 
        adverse effect identified under paragraph (1); and
            (3) the development of the plan shall occur after 
        consultation with the agency or agencies having jurisdiction 
        over matters mitigated by the plan.
    (c) Regulations To Protect Coastal Plain Fish and Wildlife 
Resources, Subsistence Users, and the Environment.--Before implementing 
the leasing program authorized by this title, the Secretary shall 
prepare and promulgate regulations, lease terms, conditions, 
restrictions, prohibitions, stipulations, and other measures designed 
to ensure that the activities undertaken on the Coastal Plain under 
this title are conducted in a manner consistent with the purposes and 
environmental requirements of this title.
    (d) Compliance With Federal and State Environmental Laws and Other 
Requirements.--The proposed regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations for the leasing program 
under this title shall require compliance with all applicable 
provisions of Federal and State environmental law and shall also 
require the following:
            (1) Standards at least as effective as the safety and 
        environmental mitigation measures set forth in items 1 through 
        29 at pages 167 through 169 of the ``Final Legislative 
        Environmental Impact Statement'' (April 1987) on the Coastal 
        Plain.
            (2) Seasonal limitations on exploration, development, and 
        related activities, where necessary, to avoid significant 
        adverse effects during periods of concentrated fish and 
        wildlife breeding, denning, nesting, spawning, and migration.
            (3) That exploration activities, except for surface 
        geological studies, be limited to the period between 
        approximately November 1 and May 1 each year and that 
        exploration activities shall be supported by ice roads, winter 
        trails with adequate snow cover, ice pads, ice airstrips, and 
        air transport methods, except that such exploration activities 
        may occur at other times, if--
                    (A) the Secretary determines, after affording an 
                opportunity for public comment and review, that special 
                circumstances exist necessitating that exploration 
                activities be conducted at other times of the year; and
                    (B) the Secretary finds that such exploration will 
                have no significant adverse effect on the fish and 
                wildlife, their habitat, and the environment of the 
                Coastal Plain.
            (4) Design safety and construction standards for all 
        pipelines and any access and service roads, that--
                    (A) minimize, to the maximum extent possible, 
                adverse effects upon the passage of migratory species 
                such as caribou; and
                    (B) minimize adverse effects upon the flow of 
                surface water by requiring the use of culverts, 
                bridges, and other structural devices.
            (5) Prohibitions on public access and use on all pipeline 
        access and service roads.
            (6) Stringent reclamation and rehabilitation requirements, 
        consistent with the standards set forth in this title, 
        requiring the removal from the Coastal Plain of all oil and gas 
        development and production facilities, structures, and 
        equipment upon completion of oil and gas production operations, 
        except that the Secretary may exempt from the requirements of 
        this paragraph those facilities, structures, or equipment that 
        the Secretary determines would assist in the management of the 
        Arctic National Wildlife Refuge and that are donated to the 
        United States for that purpose.
            (7) Appropriate prohibitions or restrictions on access by 
        all modes of transportation.
            (8) Appropriate prohibitions or restrictions on sand and 
        gravel extraction.
            (9) Consolidation of facility siting.
            (10) Appropriate prohibitions or restrictions on use of 
        explosives.
            (11) Avoidance, to the extent practicable, of springs, 
        streams, and river system; the protection of natural surface 
        drainage patterns, wetlands, and riparian habitats; and the 
        regulation of methods or techniques for developing or 
        transporting adequate supplies of water for exploratory 
        drilling.
            (12) Avoidance or reduction of air traffic-related 
        disturbance to fish and wildlife.
            (13) Treatment and disposal of hazardous and toxic wastes, 
        solid wastes, reserve pit fluids, drilling muds and cuttings, 
        and domestic wastewater, including an annual waste management 
        report, a hazardous materials tracking system, and a 
        prohibition on chlorinated solvents, in accordance with 
        applicable Federal and State environmental law.
            (14) Fuel storage and oil spill contingency planning.
            (15) Research, monitoring, and reporting requirements.
            (16) Field crew environmental briefings.
            (17) Avoidance of significant adverse effects upon 
        subsistence hunting, fishing, and trapping by subsistence 
        users.
            (18) Compliance with applicable air and water quality 
        standards.
            (19) Appropriate seasonal and safety zone designations 
        around well sites, within which subsistence hunting and 
        trapping shall be limited.
            (20) Reasonable stipulations for protection of cultural and 
        archeological resources.
            (21) All other protective environmental stipulations, 
        restrictions, terms, and conditions deemed necessary by the 
        Secretary.
    (e) Considerations.--In preparing and promulgating regulations, 
lease terms, conditions, restrictions, prohibitions, and stipulations 
under this section, the Secretary shall consider the following:
            (1) The stipulations and conditions that govern the 
        National Petroleum Reserve-Alaska leasing program, as set forth 
        in the 1999 Northeast National Petroleum Reserve-Alaska Final 
        Integrated Activity Plan/Environmental Impact Statement.
            (2) The environmental protection standards that governed 
        the initial Coastal Plain seismic exploration program under 
        parts 37.31 to 37.33 of title 50, Code of Federal Regulations.
            (3) The land use stipulations for exploratory drilling on 
        the KIC-ASRC private lands that are set forth in Appendix 2 of 
        the August 9, 1983, agreement between Arctic Slope Regional 
        Corporation and the United States.
    (f) Facility Consolidation Planning.--
            (1) In general.--The Secretary shall, after providing for 
        public notice and comment, prepare and update periodically a 
        plan to govern, guide, and direct the siting and construction 
        of facilities for the exploration, development, production, and 
        transportation of Coastal Plain oil and gas resources.
            (2) Objectives.--The plan shall have the following 
        objectives:
                    (A) Avoiding unnecessary duplication of facilities 
                and activities.
                    (B) Encouraging consolidation of common facilities 
                and activities.
                    (C) Locating or confining facilities and activities 
                to areas that will minimize impact on fish and 
                wildlife, their habitat, and the environment.
                    (D) Utilizing existing facilities wherever 
                practicable.
                    (E) Enhancing compatibility between wildlife values 
                and development activities.

SEC. 6508. EXPEDITED JUDICIAL REVIEW.

    (a) Filing of Complaint.--
            (1) Deadline.--Subject to paragraph (2), any complaint 
        seeking judicial review of any provision of this title or any 
        action of the Secretary under this title shall be filed in any 
        appropriate district court of the United States--
                    (A) except as provided in subparagraph (B), within 
                the 90-day period beginning on the date of the action 
                being challenged; or
                    (B) in the case of a complaint based solely on 
                grounds arising after such period, within 90 days after 
                the complainant knew or reasonably should have known of 
                the grounds for the complaint.
            (2) Venue.--Any complaint seeking judicial review of an 
        action of the Secretary under this title may be filed only in 
        the United States Court of Appeals for the District of 
        Columbia.
            (3) Limitation on scope of certain review.--Judicial review 
        of a Secretarial decision to conduct a lease sale under this 
        title, including the environmental analysis thereof, shall be 
        limited to whether the Secretary has complied with the terms of 
        this division and shall be based upon the administrative record 
        of that decision. The Secretary's identification of a preferred 
        course of action to enable leasing to proceed and the 
        Secretary's analysis of environmental effects under this 
        division shall be presumed to be correct unless shown otherwise 
        by clear and convincing evidence to the contrary.
    (b) Limitation on Other Review.--Actions of the Secretary with 
respect to which review could have been obtained under this section 
shall not be subject to judicial review in any civil or criminal 
proceeding for enforcement.

SEC. 6509. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

    (a) Exemption.--Title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3161 et seq.) shall not apply to 
the issuance by the Secretary under section 28 of the Mineral Leasing 
Act (30 U.S.C. 185) of rights-of-way and easements across the Coastal 
Plain for the transportation of oil and gas.
    (b) Terms and Conditions.--The Secretary shall include in any 
right-of-way or easement referred to in subsection (a) such terms and 
conditions as may be necessary to ensure that transportation of oil and 
gas does not result in a significant adverse effect on the fish and 
wildlife, subsistence resources, their habitat, and the environment of 
the Coastal Plain, including requirements that facilities be sited or 
designed so as to avoid unnecessary duplication of roads and pipelines.
    (c) Regulations.--The Secretary shall include in regulations under 
section 6503(g) provisions granting rights-of-way and easements 
described in subsection (a) of this section.

SEC. 6510. CONVEYANCE.

    In order to maximize Federal revenues by removing clouds on title 
to lands and clarifying land ownership patterns within the Coastal 
Plain, the Secretary, notwithstanding the provisions of section 
1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 
U.S.C. 3192(h)(2)), shall convey--
            (1) to the Kaktovik Inupiat Corporation the surface estate 
        of the lands described in paragraph 2 of Public Land Order 
        6959, to the extent necessary to fulfill the Corporation's 
        entitlement under section 12 of the Alaska Native Claims 
        Settlement Act (43 U.S.C. 1611); and
            (2) to the Arctic Slope Regional Corporation the subsurface 
        estate beneath such surface estate pursuant to the August 9, 
        1983, agreement between the Arctic Slope Regional Corporation 
        and the United States of America.

SEC. 6511. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE 
              ASSISTANCE.

    (a) Financial Assistance Authorized.--
            (1) In general.--The Secretary may use amounts available 
        from the Coastal Plain Local Government Impact Aid Assistance 
        Fund established by subsection (d) to provide timely financial 
        assistance to entities that are eligible under paragraph (2) 
        and that are directly impacted by the exploration for or 
        production of oil and gas on the Coastal Plain under this 
        title.
            (2) Eligible entities.--The North Slope Borough, Kaktovik, 
        and other boroughs, municipal subdivisions, villages, and any 
        other community organized under Alaska State law shall be 
        eligible for financial assistance under this section.
    (b) Use of Assistance.--Financial assistance under this section may 
be used only for--
            (1) planning for mitigation of the potential effects of oil 
        and gas exploration and development on environmental, social, 
        cultural, recreational and subsistence values;
            (2) implementing mitigation plans and maintaining 
        mitigation projects; and
            (3) developing, carrying out, and maintaining projects and 
        programs that provide new or expanded public facilities and 
        services to address needs and problems associated with such 
        effects, including firefighting, police, water, waste 
        treatment, medivac, and medical services.
    (c) Application.--
            (1) In general.--Any community that is eligible for 
        assistance under this section may submit an application for 
        such assistance to the Secretary, in such form and under such 
        procedures as the Secretary may prescribe by regulation.
            (2) North slope borough communities.--A community located 
        in the North Slope Borough may apply for assistance under this 
        section either directly to the Secretary or through the North 
        Slope Borough.
            (3) Application assistance.--The Secretary shall work 
        closely with and assist the North Slope Borough and other 
        communities eligible for assistance under this section in 
        developing and submitting applications for assistance under 
        this section.
    (d) Establishment of Fund.--
            (1) In general.--There is established in the Treasury the 
        Coastal Plain Local Government Impact Aid Assistance Fund.
            (2) Use.--Amounts in the fund may be used only for 
        providing financial assistance under this section.
            (3) Deposits.--Subject to paragraph (4), there shall be 
        deposited into the fund amounts received by the United States 
        as revenues derived from rents, bonuses, and royalties under on 
        leases and lease sales authorized under this title.
            (4) Limitation on deposits.--The total amount in the fund 
        may not exceed $10,000,000.
            (5) Investment of balances.--The Secretary of the Treasury 
        shall invest amounts in the fund in interest bearing government 
        securities.
    (e) Authorization of Appropriations.--To provide financial 
assistance under this section there is authorized to be appropriated to 
the Secretary from the Coastal Plain Local Government Impact Aid 
Assistance Fund $5,000,000 for each fiscal year.

SEC. 6512. REVENUE ALLOCATION.

    (a) In General.--Notwithstanding section 6504, the Mineral Leasing 
Act (30 U.S.C. 181 et seq.), or any other law--
            (1) 50 percent of the adjusted bonus, rental, and royalty 
        revenues from oil and gas leasing and operations authorized 
        under this title shall be paid to the State of Alaska; and
            (2) the balance of such revenues shall be deposited into 
        the Treasury as miscellaneous receipts.
    (b) Adjustments.--Adjustments to bonus, rental, and royalty amounts 
from oil and gas leasing and operations authorized under this title 
shall be made as necessary for overpayments and refunds from lease 
revenues received in current or subsequent periods, prior to 
distribution of such revenues pursuant to this section.
    (c) Payments to State.--Payments to the State of Alaska under this 
section shall be made quarterly.

   TITLE VI--CONSERVATION OF ENERGY BY THE DEPARTMENT OF THE INTERIOR

SEC. 6601. ENERGY CONSERVATION BY THE DEPARTMENT OF THE INTERIOR.

    (a) In General.--The Secretary of the Interior shall--
            (1) conduct a study to identify, evaluate, and recommend 
        opportunities for conserving energy by reducing the amount of 
        energy used by facilities of the Department of the Interior; 
        and
            (2) wherever feasible and appropriate, reduce the use of 
        energy from traditional sources by encouraging use of 
        alternative energy sources, including solar power and power 
        from fuel cells, throughout such facilities and the public 
        lands of the United States.
    (b) Reports.--The Secretary shall submit to the Congress--
            (1) by not later than 90 days after the date of the 
        enactment of this Act, a report containing the findings, 
        conclusions, and recommendations of the study under subsection 
        (a)(1); and
            (2) by not later than December 31 each year, an annual 
        report describing progress made in--
                    (A) conserving energy through opportunities 
                recommended in the report under paragraph (1); and
                    (B) encouraging use of alternative energy sources 
                under subsection (a)(2).

                            TITLE VII--COAL

SEC. 6701. LIMITATION ON FEES WITH RESPECT TO COAL LEASE APPLICATIONS 
              AND DOCUMENTS.

    Notwithstanding sections 304 and 504 of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1734, 1764) and section 9701 of title 
31, United States Code, the Secretary shall not recover the Secretary's 
costs with respect to applications and other documents relating coal 
leases.

SEC. 6702. MINING PLANS.

    Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is 
amended--
            (1) by inserting ``(A)'' after ``(2)''; and
            (2) by adding at the end the following:
    ``(B) The Secretary may establish a period of more than 40 years if 
the Secretary determines that the longer period--
            ``(i) will ensure the maximum economic recovery of a coal 
        deposit; or
            ``(ii) the longer period is in the interest of the orderly, 
        efficient, or economic development of a coal resources.''.

SEC. 6703. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

    (a) In General.--Section 7(b) of the Mineral Leasing Act of 1920 
(30 U.S.C. 207(b)) is amended to read as follows:
    ``(b)(1) Each lease shall be subjected to the condition of diligent 
development and continued operation of the mine or mines, except where 
operations under the lease are interrupted by strikes, the elements, or 
casualties not attributable to the lessee.
    ``(2)(A) The Secretary of the Interior, upon determining that the 
public interest will be served thereby, may suspend the condition of 
continued operation upon the payment of advance royalties.
    ``(B) Such advance royalties shall be computed based on the average 
price for coal sold in the spot market from the same region during the 
last month of each applicable continued operation year.
    ``(C) The aggregate number of years during the initial and any 
extended term of any lease for which advance royalties may be accepted 
in lieu of the condition of continued operation shall not exceed 20.
    ``(3) The amount of any production royalty paid for any year shall 
be reduced (but not below zero) by the amount of any advance royalties 
paid under such lease to the extent that such advance royalties have 
not been used to reduce production royalties for a prior year.
    ``(4) This subsection shall be applicable to any lease or logical 
mining unit in existence on the date of the enactment of this paragraph 
or issued or approved after such date.
    ``(5) Nothing in this subsection shall be construed to affect the 
requirement contained in the second sentence of subsection (a) relating 
to commencement of production at the end of 10 years.''.
    (b) Authority To Waive, Suspend, or Reduce Advance Royalties.--
Section 39 of the Mineral Leasing Act (30 U.S.C. 209) is amended by 
striking the last sentence.

SEC. 6704. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE 
              OPERATION AND RECLAMATION PLAN.

    Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) is 
amended by striking ``and not later than three years after a lease is 
issued,''.

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

SEC. 6801. INSULAR AREAS ENERGY SECURITY.

    Section 604 of the Act entitled ``An Act to authorize 
appropriations for certain insular areas of the United States, and for 
other purposes'', approved December 24, 1980 (Public Law 96-597; 94 
Stat. 3480-3481), is amended--
            (1) in subsection (a)(4) by striking the period and 
        inserting a semicolon;
            (2) by adding at the end of subsection (a) the following 
        new paragraphs:
            ``(5) electric power transmission and distribution lines in 
        insular areas are inadequate to withstand damage caused by the 
        hurricanes and typhoons which frequently occur in insular areas 
        and such damage often costs millions of dollars to repair; and
            ``(6) the refinement of renewable energy technologies since 
        the publication of the 1982 Territorial Energy Assessment 
        prepared pursuant to subsection (c) reveals the need to 
        reassess the state of energy production, consumption, 
        infrastructure, reliance on imported energy, and indigenous 
        sources in regard to the insular areas.'';
            (3) by amending subsection (e) to read as follows:
    ``(e)(1) The Secretary of the Interior, in consultation with the 
Secretary of Energy and the chief executive officer of each insular 
area, shall update the plans required under subsection (c) by--
            ``(A) updating the contents required by subsection (c);
            ``(B) drafting long-term energy plans for such insular 
        areas with the objective of reducing, to the extent feasible, 
        their reliance on energy imports by the year 2010 and 
        maximizing, to the extent feasible, use of indigenous energy 
        sources; and
            ``(C) drafting long-term energy transmission line plans for 
        such insular areas with the objective that the maximum 
        percentage feasible of electric power transmission and 
        distribution lines in each insular area be protected from 
        damage caused by hurricanes and typhoons.
    ``(2) Not later than May 31, 2003, the Secretary of the Interior 
shall submit to Congress the updated plans for each insular area 
required by this subsection.''; and
            (4) by amending subsection (g)(4) to read as follows:
            ``(4) Power line grants for territories.--
                    ``(A) In general.--The Secretary of the Interior is 
                authorized to make grants to governments of territories 
                of the United States to carry out eligible projects to 
                protect electric power transmission and distribution 
                lines in such territories from damage caused by 
                hurricanes and typhoons.
                    ``(B) Eligible projects.--The Secretary may award 
                grants under subparagraph (A) only to governments of 
                territories of the United States that submit written 
                project plans to the Secretary for projects that meet 
                the following criteria:
                            ``(i) The project is designed to protect 
                        electric power transmission and distribution 
                        lines located in one or more of the territories 
                        of the United States from damage caused by 
                        hurricanes and typhoons.
                            ``(ii) The project is likely to 
                        substantially reduce the risk of future damage, 
                        hardship, loss, or suffering.
                            ``(iii) The project addresses one or more 
                        problems that have been repetitive or that pose 
                        a significant risk to public health and safety.
                            ``(iv) The project is not likely to cost 
                        more than the value of the reduction in direct 
                        damage and other negative impacts that the 
                        project is designed to prevent or mitigate. The 
                        cost benefit analysis required by this 
                        criterion shall be computed on a net present 
                        value basis.
                            ``(v) The project design has taken into 
                        consideration long-term changes to the areas 
                        and persons it is designed to protect and has 
                        manageable future maintenance and modification 
                        requirements.
                            ``(vi) The project plan includes an 
                        analysis of a range of options to address the 
                        problem it is designed to prevent or mitigate 
                        and a justification for the selection of the 
                        project in light of that analysis.
                            ``(vii) The applicant has demonstrated to 
                        the Secretary that the matching funds required 
                        by subparagraph (D) are available.
                    ``(C) Priority.--When making grants under this 
                paragraph, the Secretary shall give priority to grants 
                for projects which are likely to--
                            ``(i) have the greatest impact on reducing 
                        future disaster losses; and
                            ``(ii) best conform with plans that have 
                        been approved by the Federal Government or the 
                        government of the territory where the project 
                        is to be carried out for development or hazard 
                        mitigation for that territory.
                    ``(D) Matching requirement.--The Federal share of 
                the cost for a project for which a grant is provided 
                under this paragraph shall not exceed 75 percent of the 
                total cost of that project. The non-Federal share of 
                the cost may be provided in the form of cash or 
                services.
                    ``(E) Treatment of funds for certain purposes.--
                Grants provided under this paragraph shall not be 
                considered as income, a resource, or a duplicative 
                program when determining eligibility or benefit levels 
                for Federal major disaster and emergency assistance.
                    ``(F) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $5,000,000 for each fiscal year beginning 
                after the date of the enactment of this paragraph.''.
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