    [Congressional Bills 107th Congress]
    [From the U.S. Government Publishing Office]
    [H.R. 4 Public Print (PP)]

                                 April 26, 2002

                        Ordered to be printed as passed

                      In the Senate of the United States,

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

                                   AMENDMENT:

                Strike out all after the enacting clause and insert:

    SECTION 1. SHORT TITLE.

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

    SEC. 2. TABLE OF CONTENTS.

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

       DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                         TITLE I--REGIONAL COORDINATION

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

                             TITLE II--ELECTRICITY

                Subtitle A--Amendments to the Federal Power Act

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

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

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

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

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

                        Subtitle D--Consumer Protections

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

           Subtitle E--Renewable Energy and Rural Construction Grants

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

                         Subtitle F--General Provisions

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

                      TITLE III--HYDROELECTRIC RELICENSING

    Sec. 301. Alternative conditions and fishways.

                            TITLE IV--INDIAN ENERGY

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

                             TITLE V--NUCLEAR POWER

                 Subtitle A--Price-Anderson Act Reauthorization

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

                      Subtitle B--Miscellaneous Provisions

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

                      Subtitle C--Growth of Nuclear Energy

    Sec. 521. Combined license periods.

                       Subtitle D--NRC Regulatory Reform

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

                        Subtitle E--NRC Personnel Crisis

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

         DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                        TITLE VI--OIL AND GAS PRODUCTION

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

                        TITLE VII--NATURAL GAS PIPELINES

                    Subtitle A--Alaska Natural Gas Pipeline

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

                        Subtitle B--Operating Pipelines

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

                          Subtitle C--Pipeline Safety

                   Part I--Short Title; Amendment of Title 49

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

                Part II--Pipeline Safety Improvement Act of 2002

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

               Part III--Pipeline Security Sensitive Information

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

        DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                         TITLE VIII--FUELS AND VEHICLES

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

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

                Subtitle B--Additional Fuel Efficiency Measures

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

                     Subtitle C--Federal Reformulated Fuels

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

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

          Subtitle A--Low Income Assistance and State Energy Programs

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

                     Subtitle B--Federal Energy Efficiency

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

            Subtitle C--Industrial Efficiency and Consumer Products

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

                         Subtitle D--Housing Efficiency

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

                    Subtitle E--Rural and Remote Communities

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

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

                    TITLE X--NATIONAL CLIMATE CHANGE POLICY

                         Subtitle A--Sense of Congress

    Sec. 1001. Sense of Congress on climate change.

                      Subtitle B--Climate Change Strategy

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

                   Subtitle C--Science and Technology Policy

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

                      Subtitle D--Miscellaneous Provisions

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

                   TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

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

           DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

              TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

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

                         Subtitle A--Energy Efficiency

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

                          Subtitle B--Renewable Energy

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

                           Subtitle C--Fossil Energy

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

                           Subtitle D--Nuclear Energy

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

                     Subtitle E--Fundamental Energy Science

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

            Subtitle F--Energy, Safety, and Environmental Protection

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

               TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

                   Subtitle A--Department of Energy Programs

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

                 Subtitle B--Department of Agriculture Programs

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

              Subtitle C--International Energy Technology Transfer

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

               Subtitle D--Climate Change Science and Information

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

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

               Part II--National Climate Services and Monitoring

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

                  Part III--Ocean and Coastal Observing System

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

                     Subtitle E--Climate Change Technology

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

             Subtitle F--Climate Adaptation and Hazards Prevention

                       Part I--Assessment and Adaptation

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

                Part II--Forecasting and Planning Pilot Programs

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

          TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

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

                        TITLE XV--PERSONNEL AND TRAINING

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

                 DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                        TITLE XVI--TECHNOLOGY ASSESSMENT

    Sec. 1601. National Science and Technology Assessment Service.

                              TITLE XVII--STUDIES

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

                   DIVISION G--ENERGY INFRASTRUCTURE SECURITY

                  TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

                   Subtitle A--Department of Energy Programs

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

                Subtitle B--Department of the Interior Programs

    Sec. 1811. Outer Continental Shelf energy infrastructure security.

                       DIVISION H--ENERGY TAX INCENTIVES

    Sec. 1900. Short title; etc.

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

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

           TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

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

            TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

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

                       TITLE XXII--CLEAN COAL INCENTIVES

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

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

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

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

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

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

                      TITLE XXIII--OIL AND GAS PROVISIONS

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

             TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

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

                        TITLE XXV--ADDITIONAL PROVISIONS

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

                    DIVISION I--IRAQ OIL IMPORT RESTRICTION

                    TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

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

                           DIVISION J--MISCELLANEOUS

                      TITLE XXVII--MISCELLANEOUS PROVISION

    Sec. 2701. Fair treatment of Presidential judicial nominees.

       DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                         TITLE I--REGIONAL COORDINATION

    SEC. 101. POLICY ON REGIONAL COORDINATION.

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

    SEC. 102. FEDERAL SUPPORT FOR REGIONAL COORDINATION.

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

                             TITLE II--ELECTRICITY

                Subtitle A--Amendments to the Federal Power Act

    SEC. 201. DEFINITIONS.

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

    SEC. 202. ELECTRIC UTILITY MERGERS.

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

    SEC. 203. MARKET-BASED RATES.

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

    SEC. 204. REFUND EFFECTIVE DATE.

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

    SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

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

              ``open access by unregulated transmitting utilities

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

    SEC. 206. ELECTRIC RELIABILITY STANDARDS.

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

    ``SEC. 216. ELECTRIC RELIABILITY.

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

    SEC. 207. MARKET TRANSPARENCY RULES.

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

    ``SEC. 216. MARKET TRANSPARENCY RULES.

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

    SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT GENERATORS.

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

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

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

    SEC. 209. ENFORCEMENT.

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

    SEC. 210. ELECTRIC POWER TRANSMISSION SYSTEMS.

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

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

    SEC. 221. SHORT TITLE.

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

    SEC. 222. DEFINITIONS.

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

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

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

    SEC. 224. FEDERAL ACCESS TO BOOKS AND RECORDS.

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

    SEC. 225. STATE ACCESS TO BOOKS AND RECORDS.

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

    SEC. 226. EXEMPTION AUTHORITY.

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

    SEC. 227. AFFILIATE TRANSACTIONS.

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

    SEC. 228. APPLICABILITY.

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

    SEC. 229. EFFECT ON OTHER REGULATIONS.

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

    SEC. 230. ENFORCEMENT.

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

    SEC. 231. SAVINGS PROVISIONS.

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

    SEC. 232. IMPLEMENTATION.

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

    SEC. 233. TRANSFER OF RESOURCES.

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

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

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

    SEC. 235. GAO STUDY ON IMPLEMENTATION.

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

    SEC. 236. EFFECTIVE DATE.

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

    SEC. 237. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

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

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

    SEC. 242. ADOPTION OF ADDITIONAL STANDARDS.

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

    SEC. 243. TECHNICAL ASSISTANCE.

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

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

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

    SEC. 245. NET METERING.

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

                        Subtitle D--Consumer Protections

    SEC. 251. INFORMATION DISCLOSURE.

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

    SEC. 252. CONSUMER PRIVACY.

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

    SEC. 253. OFFICE OF CONSUMER ADVOCACY.

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

    SEC. 254. UNFAIR TRADE PRACTICES.

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

    SEC. 255. APPLICABLE PROCEDURES.

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

    SEC. 256. FEDERAL TRADE COMMISSION ENFORCEMENT.

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

    SEC. 257. STATE AUTHORITY.

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

    SEC. 258. APPLICATION OF SUBTITLE.

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

    SEC. 259. DEFINITIONS.

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

           Subtitle E--Renewable Energy and Rural Construction Grants

    SEC. 261. RENEWABLE ENERGY PRODUCTION INCENTIVE.

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

    SEC. 262. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

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

    SEC. 263. FEDERAL PURCHASE REQUIREMENT.

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

    SEC. 264. RENEWABLE PORTFOLIO STANDARD.

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

    ``SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

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

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

    SEC. 265. RENEWABLE ENERGY ON FEDERAL LAND.

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

                         Subtitle F--General Provisions

    SEC. 271. CHANGE 3 CENTS TO 1.5 CENTS.

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

    SEC. 272. BONNEVILLE POWER ADMINISTRATION BONDS.

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

    ``SEC. 13. BONNEVILLE POWER ADMINISTRATION BONDS.

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

                      TITLE III--HYDROELECTRIC RELICENSING

    SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

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

                            TITLE IV--INDIAN ENERGY

    SEC. 401. COMPREHENSIVE INDIAN ENERGY PROGRAM.

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

    ``SEC. 2607. COMPREHENSIVE INDIAN ENERGY PROGRAM.

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

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

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

                 ``office of indian energy policy and programs

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

    SEC. 403. CONFORMING AMENDMENTS.

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

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

    SEC. 404. SITING ENERGY FACILITIES ON TRIBAL LANDS.

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

    SEC. 405. INDIAN MINERAL DEVELOPMENT ACT REVIEW.

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

    SEC. 406. RENEWABLE ENERGY STUDY.

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

    SEC. 407. FEDERAL POWER MARKETING ADMINISTRATIONS.

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

    ``SEC. 2608. FEDERAL POWER MARKETING ADMINISTRATIONS.

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

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

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

                             TITLE V--NUCLEAR POWER

                 Subtitle A--Price-Anderson Act Reauthorization

    SEC. 501. SHORT TITLE.

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

    SEC. 502. EXTENSION OF INDEMNIFICATION AUTHORITY.

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

    SEC. 503. DEPARTMENT OF ENERGY LIABILITY LIMIT.

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

    SEC. 504. INCIDENTS OUTSIDE THE UNITED STATES.

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

    SEC. 505. REPORTS.

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

    SEC. 506. INFLATION ADJUSTMENT.

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

    SEC. 507. CIVIL PENALTIES.

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

    SEC. 508. TREATMENT OF MODULAR REACTORS.

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

    SEC. 509. EFFECTIVE DATE.

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

                      Subtitle B--Miscellaneous Provisions

    SEC. 511. URANIUM SALES.

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

                    ``Annual Maximum Deliveries to End Users

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

    SEC. 512. REAUTHORIZATION OF THORIUM REIMBURSEMENT.

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

    SEC. 513. FAST FLUX TEST FACILITY.

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

    SEC. 514. NUCLEAR POWER 2010.

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

    SEC. 515. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

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

    SEC. 516. DECOMMISSIONING PILOT PROGRAM.

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

                      Subtitle C--Growth of Nuclear Energy

    SEC. 521. COMBINED LICENSE PERIODS.

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

                       Subtitle D--NRC Regulatory Reform

    SEC. 531. ANTITRUST REVIEW.

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

    SEC. 532. DECOMMISSIONING.

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

                        Subtitle E--NRC Personnel Crisis

    SEC. 541. ELIMINATION OF PENSION OFFSET.

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

    SEC. 542. NRC TRAINING PROGRAM.

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

         DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                        TITLE VI--OIL AND GAS PRODUCTION

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

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

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

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

    SEC. 603. OIL AND GAS LEASE ACREAGE LIMITATIONS.

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

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

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

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

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

    SEC. 606. OFFSHORE DEVELOPMENT.

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

    SEC. 607. COALBED METHANE STUDY.

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

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

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

    SEC. 609. STRATEGIC PETROLEUM RESERVE.

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

    SEC. 610. HYDRAULIC FRACTURING.

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

    SEC. 611. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

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

                        TITLE VII--NATURAL GAS PIPELINES

                    Subtitle A--Alaska Natural Gas Pipeline

    SEC. 701. SHORT TITLE.

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

    SEC. 702. FINDINGS.

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

    SEC. 703. PURPOSES.

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

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

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

    SEC. 705. ENVIRONMENTAL REVIEWS.

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

    SEC. 706. PIPELINE EXPANSION.

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

    SEC. 707. FEDERAL COORDINATOR.

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

    SEC. 708. JUDICIAL REVIEW.

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

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

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

    SEC. 710. LOAN GUARANTEE.

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

    SEC. 711. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

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

    SEC. 712. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

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

    SEC. 713. DEFINITIONS.

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

    SEC. 714. SENSE OF THE SENATE.

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

    SEC. 715. ALASKAN PIPELINE CONSTRUCTION TRAINING PROGRAM.

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

                        Subtitle B--Operating Pipelines

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

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

                          Subtitle C--Pipeline Safety

                   PART I--SHORT TITLE; AMENDMENT OF TITLE 49

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

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

                PART II--PIPELINE SAFETY IMPROVEMENT ACT OF 2002

    SEC. 761. IMPLEMENTATION OF INSPECTOR GENERAL RECOMMENDATIONS.

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

    SEC. 762. NTSB SAFETY RECOMMENDATIONS.

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

    SEC. 763. QUALIFICATIONS OF PIPELINE PERSONNEL.

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

    SEC. 764. PIPELINE INTEGRITY INSPECTION PROGRAM.

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

    SEC. 765. ENFORCEMENT.

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

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

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

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

    SEC. 767. PENALTIES.

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

    SEC. 768. STATE OVERSIGHT ROLE.

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

    SEC. 769. IMPROVED DATA AND DATA AVAILABILITY.

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

    SEC. 770. RESEARCH AND DEVELOPMENT.

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

    SEC. 771. PIPELINE INTEGRITY TECHNICAL ADVISORY COMMITTEE.

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

    SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

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

    SEC. 773. OPERATOR ASSISTANCE IN INVESTIGATIONS.

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

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

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

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

    SEC. 775. STATE PIPELINE SAFETY ADVISORY COMMITTEES.

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

    SEC. 776. FINES AND PENALTIES.

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

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

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

    SEC. 778. STUDY OF NATURAL GAS RESERVE.

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

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

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

               PART III--PIPELINE SECURITY SENSITIVE INFORMATION

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

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

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

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

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

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

        DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                         TITLE VIII--FUELS AND VEHICLES

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

    SEC. 801. INCREASED FUEL ECONOMY STANDARDS.

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

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

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

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

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

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

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

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

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

    SEC. 806. USE OF ALTERNATIVE FUELS.

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

    SEC. 807. HYBRID ELECTRIC AND FUEL CELL VEHICLES.

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

    SEC. 808. DIESEL FUELED VEHICLES.

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

    SEC. 809. FUEL CELL DEMONSTRATION.

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

    SEC. 810. BUS REPLACEMENT.

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

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

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

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

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

    SEC. 813. DATA COLLECTION.

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

    SEC. 814. GREEN SCHOOL BUS PILOT PROGRAM.

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

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

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

    SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

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

    SEC. 817. TEMPORARY BIODIESEL CREDIT EXPANSION.

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

    SEC. 818. NEIGHBORHOOD ELECTRIC VEHICLES.

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

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

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

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

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

                                   ``Table 1

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

                                   ``Table 2

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

    SEC. 820. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

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

                      Applicable volume of renewable fuel

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

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

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

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

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

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

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

                Subtitle B--Additional Fuel Efficiency Measures

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

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

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

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

                        ``PART K--REDUCING TRUCK IDLING

    ``SEC. 400AAA. REDUCING TRUCK IDLING.

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

    SEC. 823. CONSERVE BY BICYCLING PROGRAM.

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

    SEC. 824. FUEL CELL VEHICLE PROGRAM.

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

                     Subtitle C--Federal Reformulated Fuels

    SEC. 831. SHORT TITLE.

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

    SEC. 832. LEAKING UNDERGROUND STORAGE TANKS.

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

    ``SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.

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

    ``SEC. 9011. BEDROCK BIOREMEDIATION.

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

    ``SEC. 9012. SOIL REMEDIATION.

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

    ``SEC. 9013. AUTHORIZATION OF APPROPRIATIONS.

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

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

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

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

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

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

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

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

    SEC. 836. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

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

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

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

    SEC. 838. FEDERAL ENFORCEMENT OF STATE FUELS REQUIREMENTS.

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

    SEC. 839. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

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

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

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

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

          Subtitle A--Low Income Assistance and State Energy Programs

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

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

    SEC. 902. STATE ENERGY PROGRAMS.

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

    SEC. 903. ENERGY EFFICIENT SCHOOLS.

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

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

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

    SEC. 905. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

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

                     Subtitle B--Federal Energy Efficiency

    SEC. 911. ENERGY MANAGEMENT REQUIREMENTS.

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

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

    SEC. 912. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

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

    SEC. 913. FEDERAL BUILDING PERFORMANCE STANDARDS.

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

    SEC. 914. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

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

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

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

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

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

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

    SEC. 916. ENERGY SAVINGS PERFORMANCE CONTRACT DEFINITIONS.

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

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

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

    SEC. 918. FEDERAL ENERGY BANK.

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

    ``SEC. 553. FEDERAL ENERGY BANK.

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

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

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

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

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

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

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

            Subtitle C--Industrial Efficiency and Consumer Products

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

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

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

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

    SEC. 923. ADDITIONAL DEFINITIONS.

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

    SEC. 924. ADDITIONAL TEST PROCEDURES.

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

    SEC. 925. ENERGY LABELING.

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

    SEC. 926. ENERGY STAR PROGRAM.

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

                             ``energy star program

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

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

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

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

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

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

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

    SEC. 930. STUDY OF ENERGY EFFICIENCY STANDARDS.

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

                         Subtitle D--Housing Efficiency

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

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

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

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

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

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

    SEC. 934. PUBLIC HOUSING CAPITAL FUND.

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

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

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

    SEC. 936. NORTH AMERICAN DEVELOPMENT BANK.

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

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

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

    SEC. 937. CAPITAL FUND.

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

    SEC. 938. ENERGY-EFFICIENT APPLIANCES.

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

    SEC. 939. ENERGY EFFICIENCY STANDARDS.

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

    SEC. 940. ENERGY STRATEGY FOR HUD.

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

                    Subtitle E--Rural and Remote Communities

    SEC. 941. SHORT TITLE.

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

    SEC. 942. FINDINGS AND PURPOSE.

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

    SEC. 943. DEFINITIONS.

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

    SEC. 944. AUTHORIZATION OF APPROPRIATIONS.

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

    SEC. 945. STATEMENT OF ACTIVITIES AND REVIEW.

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

    SEC. 946. ELIGIBLE ACTIVITIES.

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

    SEC. 947. ALLOCATION AND DISTRIBUTION OF FUNDS.

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

    SEC. 948. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

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

    SEC. 949. ADDITIONAL AUTHORIZATION OF APPROPRIATIONS.

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

    SEC. 950. RURAL RECOVERY COMMUNITY DEVELOPMENT BLOCK GRANTS.

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

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

                    TITLE X--NATIONAL CLIMATE CHANGE POLICY

                         Subtitle A--Sense of Congress

    SEC. 1001. SENSE OF CONGRESS ON CLIMATE CHANGE.

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

                      Subtitle B--Climate Change Strategy

    SEC. 1011. SHORT TITLE.

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

    SEC. 1012. DEFINITIONS.

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

    SEC. 1013. NATIONAL CLIMATE CHANGE STRATEGY.

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

    SEC. 1014. OFFICE OF NATIONAL CLIMATE CHANGE POLICY.

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

    SEC. 1015. OFFICE OF CLIMATE CHANGE TECHNOLOGY.

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

    SEC. 1016. ADDITIONAL OFFICES AND ACTIVITIES.

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

                   Subtitle C--Science and Technology Policy

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

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

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

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

                      Subtitle D--Miscellaneous Provisions

    SEC. 1031. ADDITIONAL INFORMATION FOR REGULATORY REVIEW.

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

    SEC. 1032. GREENHOUSE GAS EMISSIONS FROM FEDERAL FACILITIES.

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

                   TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

    SEC. 1101. PURPOSE.

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

    SEC. 1102. DEFINITIONS.

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

    SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

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

    SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

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

    SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.

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

    SEC. 1106. MEASUREMENT AND VERIFICATION.

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

    SEC. 1107. INDEPENDENT REVIEWS.

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

    SEC. 1108. REVIEW OF PARTICIPATION.

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

    SEC. 1109. ENFORCEMENT.

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

    SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMONIZATION.

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

    SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.

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

           DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

              TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

    SEC. 1201. SHORT TITLE.

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

    SEC. 1202. FINDINGS.

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

    SEC. 1203. DEFINITIONS.

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

    SEC. 1204. CONSTRUCTION WITH OTHER LAWS.

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

                         Subtitle A--Energy Efficiency

    SEC. 1211. ENHANCED ENERGY EFFICIENCY RESEARCH AND DEVELOPMENT.

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

    SEC. 1212. ENERGY EFFICIENCY SCIENCE INITIATIVE.

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

    SEC. 1213. NEXT GENERATION LIGHTING INITIATIVE.

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

    SEC. 1214. RAILROAD EFFICIENCY.

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

    SEC. 1215. HIGH POWER DENSITY INDUSTRY PROGRAM.

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

    SEC. 1216. RESEARCH REGARDING PRECIOUS METAL CATALYSIS.

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

                          Subtitle B--Renewable Energy

    SEC. 1221. ENHANCED RENEWABLE ENERGY RESEARCH AND DEVELOPMENT.

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

    SEC. 1222. BIOENERGY PROGRAMS.

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

    SEC. 1223. HYDROGEN RESEARCH AND DEVELOPMENT.

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

    ``SEC. 202. INTERAGENCY TASK FORCE.

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

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

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

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

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

    ``SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

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

                           Subtitle C--Fossil Energy

    SEC. 1231. ENHANCED FOSSIL ENERGY RESEARCH AND DEVELOPMENT.

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

    SEC. 1232. POWER PLANT IMPROVEMENT INITIATIVE.

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

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

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

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

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

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

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

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

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

    SEC. 1237. CLEAN COAL TECHNOLOGY LOAN.

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

                           Subtitle D--Nuclear Energy

    SEC. 1241. ENHANCED NUCLEAR ENERGY RESEARCH AND DEVELOPMENT.

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

    SEC. 1242. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING SUPPORT.

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

    SEC. 1243. NUCLEAR ENERGY RESEARCH INITIATIVE.

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

    SEC. 1244. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

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

    SEC. 1245. NUCLEAR ENERGY TECHNOLOGY DEVELOPMENT PROGRAM.

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

                     Subtitle E--Fundamental Energy Science

    SEC. 1251. ENHANCED PROGRAMS IN FUNDAMENTAL ENERGY SCIENCE.

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

    SEC. 1252. NANOSCALE SCIENCE AND ENGINEERING RESEARCH.

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

    SEC. 1253. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

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

    SEC. 1254. FUSION ENERGY SCIENCES PROGRAM AND PLANNING.

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

            Subtitle F--Energy, Safety, and Environmental Protection

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

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

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

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

               TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

                   Subtitle A--Department of Energy Programs

    SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RESEARCH.

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

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

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

                 Subtitle B--Department of Agriculture Programs

    SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED RESEARCH.

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

    SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION PROJECTS AND OUTREACH.

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

    SEC. 1313. CARBON STORAGE AND SEQUESTRATION ACCOUNTING RESEARCH.

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

              Subtitle C--International Energy Technology Transfer

    SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

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

    SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT PROGRAM.

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

               Subtitle D--Climate Change Science and Information

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

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

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

    SEC. 1332. CHANGES IN DEFINITIONS.

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

    SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

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

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

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

    SEC. 1335. INTEGRATED PROGRAM OFFICE.

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

    SEC. 1336. RESEARCH GRANTS.

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

    SEC. 1337. EVALUATION OF INFORMATION.

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

               PART II--NATIONAL CLIMATE SERVICES AND MONITORING

    SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM ACT.

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

    SEC. 1342. CHANGES IN FINDINGS.

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

    SEC. 1343. TOOLS FOR REGIONAL PLANNING.

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

    SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

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

    SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

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

    ``SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

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

    SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND COOPERATION.

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

    SEC. 1347. REPORTING ON TRENDS.

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

    SEC. 1348. ARCTIC RESEARCH AND POLICY.

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

    SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

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

                 PART III--OCEAN AND COASTAL OBSERVING SYSTEM

    SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

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

    SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

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

                     Subtitle E--Climate Change Technology

    SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

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

    SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

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

    SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS.

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

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

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

    SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

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

    SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

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

             Subtitle F--Climate Adaptation and Hazards Prevention

                       PART I--ASSESSMENT AND ADAPTATION

    SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTATION PROGRAM.

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

    SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

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

    SEC. 1373. ARCTIC RESEARCH CENTER.

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

               PART II--FORECASTING AND PLANNING PILOT PROGRAMS

    SEC. 1381. REMOTE SENSING PILOT PROJECTS.

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

    SEC. 1382. DATABASE ESTABLISHMENT.

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

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

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

    SEC. 1384. DEFINITIONS.

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

    SEC. 1385. AUTHORIZATION OF APPROPRIATIONS.

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

          TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

    SEC. 1401. DEFINITIONS.

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

    SEC. 1402. AVAILABILITY OF FUNDS.

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

    SEC. 1403. COST SHARING.

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

    SEC. 1404. MERIT REVIEW OF PROPOSALS.

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

    SEC. 1405. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.

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

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

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

    SEC. 1407. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER ACTIVITIES.

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

    SEC. 1408. TECHNOLOGY INFRASTRUCTURE PROGRAM.

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

    SEC. 1409. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

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

    SEC. 1410. OTHER TRANSACTIONS.

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

    SEC. 1411. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

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

    SEC. 1412. NATIONAL ACADEMY OF SCIENCES REPORT.

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

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

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

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

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

                        TITLE XV--PERSONNEL AND TRAINING

    SEC. 1501. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.

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

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

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

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

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

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

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

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

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

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

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

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

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

    SEC. 1507. FEDERAL MINE INSPECTORS.

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

                 DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                        TITLE XVI--TECHNOLOGY ASSESSMENT

    SEC. 1601. NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT SERVICE.

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

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

    ``SEC. 701. ESTABLISHMENT.

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

    ``SEC. 702. COMPOSITION.

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

    ``SEC. 703. FUNCTIONS AND DUTIES.

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

    ``SEC. 704. INITIATION OF ACTIVITIES.

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

    ``SEC. 705. ADMINISTRATION AND SUPPORT.

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

    ``SEC. 706. AUTHORITY.

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

    ``SEC. 707. BOARD.

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

    ``SEC. 708. REPORT TO CONGRESS.

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

    ``SEC. 709. AUTHORIZATION OF APPROPRIATIONS.

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

                              TITLE XVII--STUDIES

    SEC. 1701. REGULATORY REVIEWS.

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

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

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

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

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

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

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

    SEC. 1705. CONSUMER ENERGY COMMISSION.

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

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

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

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

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

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

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

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

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

                   DIVISION G--ENERGY INFRASTRUCTURE SECURITY

                  TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

                   Subtitle A--Department of Energy Programs

    SEC. 1801. DEFINITIONS.

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

    SEC. 1802. ROLE OF THE DEPARTMENT OF ENERGY.

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

    SEC. 1803. CRITICAL ENERGY INFRASTRUCTURE PROGRAMS.

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

    SEC. 1804. ADVISORY COMMITTEE ON ENERGY INFRASTRUCTURE SECURITY.

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

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

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

                Subtitle B--Department of the Interior Programs

    SEC. 1811. OUTER CONTINENTAL SHELF ENERGY INFRASTRUCTURE SECURITY.

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

                       DIVISION H--ENERGY TAX INCENTIVES

    SEC. 1900. SHORT TITLE; ETC.

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

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

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

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

    SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIOMASS.

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

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

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

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

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

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

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

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

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

           TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

    SEC. 2001. ALTERNATIVE MOTOR VEHICLE CREDIT.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.

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

    ``SEC. 87. ALCOHOL FUEL CREDIT.

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

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

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

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

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

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

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

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

    SEC. 2008. INCENTIVES FOR BIODIESEL.

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

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

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

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

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

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

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

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

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

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

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

            TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

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

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

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

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

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

    SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

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

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

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

    SEC. 2103. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

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

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

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

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

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

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

    SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                       TITLE XXII--CLEAN COAL INCENTIVES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    ------------------------------------------------------------------------
                                         The applicable amount is:
             ``The design net ----------------------------------------------
              heat rate is:      For 1st 5 years of      For 2d 5 years of
                                    such service            such service
    ------------------------------------------------------------------------

            Not more than              $.0060                  $.0038
            More than 8,400            $.0025                  $.0010
             but not more
             than 8,550.
            More than 8,550            $.0010                 $.0010.
             but less than
             8,750.
    ------------------------------------------------------------------------

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

    ------------------------------------------------------------------------
                                         The applicable amount is:
             ``The design net ----------------------------------------------
              heat rate is:      For 1st 5 years of      For 2d 5 years of
                                    such service            such service
    ------------------------------------------------------------------------

            Not more than              $.0105                  $.0090
            More than 7,770            $.0085                  $.0068
             but not more
             than 8,125.
            More than 8,125            $.0075                 $.0055.
             but less than
             8,350.
    ------------------------------------------------------------------------

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

    ------------------------------------------------------------------------
                                         The applicable amount is:
             ``The design net ----------------------------------------------
              heat rate is:      For 1st 5 years of      For 2d 5 years of
                                    such service            such service
    ------------------------------------------------------------------------

            Not more than              $.0140                  $.0115
            More than 7,380            $.0120                 $.0090.
             but not more
             than 7,720.
    ------------------------------------------------------------------------

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

    ------------------------------------------------------------------------
            ``The unit design            The applicable amount is:
               net thermal    ----------------------------------------------
             efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
                   is:              such service            such service
    ------------------------------------------------------------------------

            Not less than              $.0060                  $.0038
            Less than 40.6             $.0025                  $.0010
             but not less
             than 40 percent.
            Less than 40 but           $.0010                 $.0010.
             not less than 39
             percent.
    ------------------------------------------------------------------------

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

    ------------------------------------------------------------------------
            ``The unit design            The applicable amount is:
               net thermal    ----------------------------------------------
             efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
                   is:              such service            such service
    ------------------------------------------------------------------------

            Not less than              $.0105                  $.0090
            Less than 43.6             $.0085                  $.0068
             but not less
             than 42 percent.
            Less than 42 but           $.0075                 $.0055.
             not less than
             40.9 percent.
    ------------------------------------------------------------------------

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

    ------------------------------------------------------------------------
            ``The unit design            The applicable amount is:
               net thermal    ----------------------------------------------
             efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
                   is:              such service            such service
    ------------------------------------------------------------------------

            Not less than              $.0140                  $.0115
            Less than 44.2             $.0120                 $.0090.
             but not less
             than 43.9
             percent.
    ------------------------------------------------------------------------

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

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

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

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

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

                      TITLE XXIII--OIL AND GAS PROVISIONS

    SEC. 2301. OIL AND GAS FROM MARGINAL WELLS.

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

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

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

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

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

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

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

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

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

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

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

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

    SEC. 2304. ENVIRONMENTAL TAX CREDIT.

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

    ``SEC. 45L. ENVIRONMENTAL TAX CREDIT.

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

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

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

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

    SEC. 2306. MARGINAL PRODUCTION INCOME LIMIT EXTENSION.

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

    SEC. 2307. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL EXPENDITURES.

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

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

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

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

    SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.

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

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

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

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

    SEC. 2309. STUDY OF COAL BED METHANE.

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

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

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

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

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

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

             TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

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

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

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

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

    SEC. 2403. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

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

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

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

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

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

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

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

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

                        TITLE XXV--ADDITIONAL PROVISIONS

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

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

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

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

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

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

    ``SEC. 45M. ALASKA NATURAL GAS.

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

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

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

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

    SEC. 2505. TREATMENT OF DAIRY PROPERTY.

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

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

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

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

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

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

    SEC. 2507. MODIFICATION OF RURAL AIRPORT DEFINITION.

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

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

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

                    DIVISION I--IRAQ OIL IMPORT RESTRICTION

                    TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

    SEC. 2601. SHORT TITLE AND FINDINGS.

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

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

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

    SEC. 2603. TERMINATION/PRESIDENTIAL CERTIFICATION.

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

    SEC. 2604. HUMANITARIAN INTERESTS.

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

    SEC. 2605. DEFINITIONS.

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

    SEC. 2606. EFFECTIVE DATE.

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

                           DIVISION J--MISCELLANEOUS

                      TITLE XXVII--MISCELLANEOUS PROVISION

    SEC. 2701. FAIR TREATMENT OF PRESIDENTIAL JUDICIAL NOMINEES.

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

                Attest:

                                                                 Secretary.
    107th CONGRESS

      2d Session

                                    H. R. 4

    _______________________________________________________________________

                                   AMENDMENT

    _______________________________________________________________________

                                 April 26, 2002

                        Ordered to be printed as passed