[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
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AMENDMENT
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April 26, 2002
Ordered to be printed as passed