[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 388 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 388

   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2011 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
  domestic energy supplies; improve environmental quality by reducing 
 emissions of air pollutants and greenhouse gases; mitigate the effect 
 of increases in energy prices on the American consumer, including the 
             poor and the elderly; and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 26, 2001

 Mr. Murkowski (for himself, Mr. Breaux, Mr. Lott, Mr. Voinovich, Mr. 
 Domenici, Mr. Craig, Mr. Campbell, Mr. Thomas, Mr. Shelby, Mr. Burns, 
 Mr. Hagel, Mr. Stevens, and Mr. Hutchinson) introduced the following 
bill; which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
   To protect the energy security of the United States and decrease 
 America's dependency on foreign oil sources to 50 percent by the year 
  2011 by enhancing the use of renewable energy resources, conserving 
    energy resources, improving energy efficiencies, and increasing 
  domestic energy supplies; improve environmental quality by reducing 
 emissions of air pollutants and greenhouse gases; mitigate the effect 
 of increases in energy prices on the American consumer, including the 
             poor and the elderly; and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``National Energy Security Act of 
2001''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) increasing dependence on foreign sources of oil causes 
        systemic harm to all sectors of the United States economy, 
        threatens national security, undermines the ability of Federal, 
        State, and local units of government to provide essential 
        services, and jeopardizes the peace, security, and welfare of 
        the American people;
            (2) dependence on imports of foreign oil was 46 percent in 
        1992, rose to more than 55 percent by the beginning of 2000, 
        and is estimated by the Department of Energy to rise to 65 
        percent by 2020 unless current policies are altered;
            (3) even with increased energy efficiency, energy use in 
        the United States is expected to increase 27 percent by 2020;
            (4) the United States lacks a comprehensive national energy 
        policy and has taken actions that limit the availability and 
        capability of the domestic energy sources of oil and gas, coal, 
        nuclear and hydroelectric;
            (5) a comprehensive energy strategy must be developed to 
        combat this trend, decrease the United States dependence on 
        imported oil supplies and strengthen our national energy 
        security;
            (6) this comprehensive strategy must decrease the United 
        States dependence on foreign oil supplies to not more than 50 
        percent by the year 2011;
            (7) this comprehensive energy strategy must be multifaceted 
        and enhance the use of renewable energy resources (including 
        hydroelectric, solar, wind, geothermal and biomass), conserve 
        energy resources (including improving energy efficiencies), and 
        increase domestic supplies of conventional energy resources 
        (including oil, natural gas, coal, and nuclear);
            (8) conservation efforts and alternative fuels alone will 
        not enable America to meet this goal as conventional energy 
        sources supply 96 percent of America's power at this time;
            (9) immediate actions must also be taken to mitigate the 
        economic effects of recent increases in the price of crude oil, 
        natural gas, and electricity and the related impacts on 
        American consumers, including the poor and the elderly.
    (b) Purposes.--The purposes of this Act are to protect the energy 
security of the United States by decreasing America's dependence on 
foreign oil sources to not more than 50 percent by 2010, by enhancing 
the use of renewable energy resources, conserving energy resources 
(including improving energy efficiencies), and increasing domestic 
energy supplies, improving environmental quality by reducing emissions 
of air pollutants and greenhouse gases, and mitigating the immediate 
effect of increases in energy prices on the American consumer, 
including the poor and the elderly.

   TITLE I--GENERAL PROVISIONS TO PROTECT ENERGY SUPPLY AND SECURITY

SEC. 101. CONSULTATION AND REPORT ON FEDERAL AGENCY ACTIONS AFFECTING 
              DOMESTIC ENERGY SUPPLY.

    Prior to taking or initiating any action that could have a 
significant adverse effect on the availability or supply of domestic 
energy resources or on the domestic capability to distribute or 
transport such resources, the head of a Federal agency proposing or 
participating in such action shall notify the Secretary of Energy in 
writing of the nature and scope of the action, the need for such 
action, the potential effect of such action on energy resource 
supplies, price, distribution, and transportation, and any alternatives 
to such action or options to mitigate the effects and shall provide the 
Secretary of Energy with adequate time to review the proposed action 
and make recommendations to avoid or minimize the adverse effect of the 
proposed action. The proposing agency shall consider any such 
recommendations made by the Secretary of Energy. The Secretary of 
Energy shall provide an annual report to the Committee on Energy and 
Natural Resources of the United States Senate and to the appropriate 
committees of the House of Representatives on all actions brought to 
his attention, what mitigation or alternatives, if any, were 
implemented, and what the short-term, mid-term, and long-term effect of 
the final action will likely be on domestic energy resource supplies 
and their development, distribution, or transmission.

SEC. 102. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

    (a) Report.--Beginning on October 1, 2001, and annually thereafter, 
the Secretary of Energy, in consultation with the Secretary of Defense 
and the heads of other relevant Federal agencies, shall submit a report 
to the President and the Congress which evaluates the progress the 
United States has made toward obtaining the goal of not more than 50 
percent dependence on foreign oil sources by 2010.
    (b) Alternatives.--The report shall specify what specific 
legislative or administrative actions that must be implemented to meet 
this goal and set forth a range of options and alternatives with a 
benefit/cost analysis for each option or alternative together with an 
estimate of the contribution each option or alternative could make to 
reduce foreign oil imports. The Secretary shall solicit information 
from the public and request information from the Energy Information 
Agency and other agencies to develop the report. The report shall 
indicate, in detail, options and alternatives to--
            (1) increase the use of renewable domestic energy sources, 
        including conventional and non-conventional sources such as, 
        but not limited to, increased hydroelectric generation at 
        existing Federal facilities;
            (2) conserve energy resources, including improving 
        efficiencies and decreasing consumption; and
            (3) increase domestic production and use of oil, natural 
        gas, nuclear, and coal, including any actions necessary to 
        provide access to, and transportation of, these energy 
        resources.
    (c) Refinery Capacity.--As part of the reports submitted in 2001, 
2005, and 2008, the Secretary shall examine and report on the condition 
of the domestic refinery industry and the extent of domestic storage 
capacity for various categories of petroleum products and make such 
recommendations as he believes will enhance domestic capabilities to 
respond to short-term shortages of various fuels due to climate or 
supply interruptions and ensure long-term supplies on a reliable and 
affordable basis.
    (d) Notification to Congress.--Whenever the Secretary determines 
that stocks of petroleum products have declined or are anticipated to 
decline to levels that would jeopardize national security or threaten 
supply shortages or price increases on a national or regional basis, he 
shall immediately notify the Congress of the situation and shall make 
such recommendations for administrative or legislative action as he 
believes are necessary to alleviate the situation.

SEC. 103. STRATEGIC PETROLEUM RESERVE STUDY AND REPORT.

    The President shall immediately establish an Interagency Panel on 
the Strategic Petroleum Study (referred to as the ``Panel'' in this 
section) to study oil markets and estimate the extent and frequency of 
fluctuations in the supply and price of, and demand for crude oil in 
the future and determine appropriate capacity of and uses for the 
Strategic Petroleum Reserve. The Panel may recommend changes in 
existing authorities to strengthen the ability of the Strategic 
Petroleum Reserve to respond to energy requirements. The Panel shall 
complete its study and submit a report containing its findings and any 
recommendations to the President and the Congress within six months 
from the date of enactment of this Act.

SEC. 104. STUDY OF EXISTING RIGHTS-OF-WAY TO DETERMINE CAPABILITY TO 
              SUPPORT NEW PIPELINES OR OTHER TRANSMISSION FACILITIES.

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

SEC. 105. USE OF FEDERAL FACILITIES.

    (a) The Secretary of the Interior and the Secretary of the Army 
shall each inventory all dams, impoundments, and other facilities under 
their jurisdiction.
    (b) Based on this inventory and other information, the Secretary of 
the Interior and the Secretary of the Army shall each submit a report 
to the Congress within six months from the date of enactment of this 
Act. Each report shall:
            (1) Describe, in detail, each facility that is capable, 
        with or without modification, of producing additional 
        hydroelectric power. For each such facility, the report shall 
        state the full potential for the facility to generate 
        hydroelectric power, whether the facility is currently 
        generating hydroelectric power, and the costs to install, 
        upgrade, modify, or take other actions to increase the 
        hydroelectric generating capability of the facility. For each 
        facility that currently has hydroelectric generating equipment, 
        the report shall indicate the condition of such equipment, 
        maintenance requirements, and schedule for any improvements as 
        well as the purposes for which power is generated.
            (2) Describe what actions are planned or underway to 
        increase hydroelectric production from facilities under his 
        jurisdiction and shall include any recommendations the 
        Secretary deems advisable to increase such production, reduce 
        costs, and improve efficiency at Federal facilities, including, 
        but not limited to, use of lease of power privilege and 
        contracting with non-federal entities for operation and 
        maintenance.

SEC. 106. NUCLEAR GENERATION STUDY.

    The Chairman of the Nuclear Regulatory Commission shall submit a 
report to the Congress within six months from the date of enactment of 
this Act on the state of nuclear power generation and production in the 
United States and the potential for increasing nuclear generating 
capacity and production as part of this Nation's energy mix. The report 
shall include an assessment of agency readiness to license new advanced 
reactor designs and discuss the needed confirmatory and anticipatory 
research activities that would support such a state of readiness. The 
report shall also review the status of the relicensing process for 
civilian nuclear power plants, including current and anticipated 
applications, and recommendations for improvements in the process, 
including, but not limited to recommendations for expediting the 
process and ensuring that relicensing is accomplished in a timely 
manner.

SEC. 107. DEVELOPMENT OF A NATIONAL SPENT NUCLEAR FUEL STRATEGY AND 
              ESTABLISHMENT OF AN OFFICE OF SPENT NUCLEAR FUEL 
              RESEARCH.

    (a) Prior to the Federal Government taking any irreversible action 
relating to the disposal of spent nuclear fuel, Congress must determine 
whether the spent fuel should be treated as waste subject to permanent 
burial or should be considered an energy resource that is needed to 
meet future energy requirements.
    (b) Office of Spent Nuclear Fuel Research.--There is hereby 
established an Office of Spent Nuclear Fuel Research (referred to as 
the ``Office'' in this section) within the Office of Nuclear Energy 
Science and Technology of the Department of Energy. 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.
    (c) Associate Director.--The Associate Director of the Office of 
Spent Nuclear Fuel Research 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. The Associate Director of the 
Office shall report to the Director of the Office of Nuclear Energy 
Science and Technology. The first such Associate Director shall be 
appointed within 90 days of the enactment of this Act.
    (d) Grant and Contract Authority.--In carrying out his 
responsibilities under this section, the Secretary may make grants, or 
enter into contracts, for the purposes of the research projects and 
activities described in (e)(2).
    (e) Duties.--(1) The Associate Director of the Office shall involve 
national laboratories, universities, the commercial nuclear industry, 
and other organizations to investigate technologies for the treatment, 
recycling, and disposal of spent nuclear fuel and high-level 
radioactive waste.
    (2) The Associate Director of the Office shall--
            (A) develop a research plan to provide recommendations by 
        2015;
            (B) identify technologies for the treatment, recycling, 
        disposal of spent nuclear fuel and high-level radioactive 
        waste;
            (C) conduct research and development activities on such 
        technologies;
            (D) ensure that all activities include as key objectives 
        minimization of proliferation concerns and risk to 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) encourage that research efforts include participation 
        of international collaborators;
            (H) be authorized to fund international collaborators when 
        they bring unique capabilities not available in the United 
        States and their host country is unable to provide for their 
        support;
            (I) ensure that research efforts with the Office are 
        coordinated with research on advanced fuel cycles and reactors 
        conducted within the Office of Nuclear Energy Science and 
        Technology.
    (f) Report.--The Associate Director of the Office of Spent Nuclear 
Fuel Research shall annually prepare and submit a report to the 
Congress on the activities and expenditures of the Office, including 
the progress that has been made to achieve the objectives of subsection 
(c).

SEC. 108. STUDY AND REPORT ON STATUS OF DOMESTIC REFINING INDUSTRY AND 
              PRODUCT DISTRIBUTION SYSTEM.

    (a) Annual Report.--The Secretary of Energy, in consultation with 
the Administrator of the Environment Protection Agency, the States, the 
National Petroleum Council, and other representatives of the petroleum 
refining, distribution and retailing industries, shall submit a report 
to the Congress on the condition of the domestic petroleum refining 
industry and the petroleum product distribution system. The first such 
report shall be submitted no later than January 1, 2002, and revised 
annually thereafter.
    (b) Recommendations.--Each annual report shall include any 
recommendations that the Secretary believes should be implemented 
either through legislation or regulation to ensure that there is 
adequate domestic refining capacity and motor fuel supplies to meet the 
economic, social, and security requirements of the United States.
    (c) Preparation.--In preparing each annual report, the Secretary 
shall--
            (1) provide an assessment of the condition of the domestic 
        petroleum refining industry and the Nation's motor fuel 
        distribution system, including the ability to make future 
        capital investments necessary to manufacture, transport, and 
        store different petroleum products required by local, State, 
        and Federal statute and regulations;
            (2) examine the reliability and cost of feedstocks and 
        energy supplied to the refining industry as well as the 
        reliability and cost of products manufactured by such industry;
            (3) provide an assessment of the collective effect of 
        current and future motor fuel requirements on--
                    (A) the ability of the domestic motor fuels 
                refining, distribution, and retailing industries to 
                reliably and cost-effectively supply fuel to the 
                Nation's consumers and businesses;
                    (B) gasoline (reformulated and conventional) and 
                diesel fuel (on-highway and off-highway) supplies;
                    (C) retail motor fuel price volatility;
            (4) explore opportunities to streamline permitting and 
        siting decisions and approvals for expanding existing and/or 
        building new domestic refining capacity;
            (5) recommend actions that can be taken to reduce future 
        motor supply concerns, and
            (6) provide an assessment of whether uniform, regional, or 
        national performance-based fuel specifications would reduce 
        supply disruptions and price spikes.
    (d) Confidentiality of Data.--Any information requested by the 
Secretary to be submitted by industry for purposes of this section 
shall be treated as confidential and shall be used only for the 
preparation of the annual report.

SEC. 109. REVIEW OF FEDERAL ENERGY REGULATORY COMMISSION NATURAL GAS 
              PIPELINE CERTIFICATION PROCEDURES.

    The Federal Energy Regulatory Commission shall, in consultation 
with other appropriate Federal agencies, immediately undertake a 
comprehensive review of policies, procedures, and regulations for the 
certification of natural gas pipelines to determine how to reduce the 
cost and time of obtaining a certificate. The Commission shall report 
its findings within 6 months of the date of the enactment of this Act 
to the Senate Committee on Energy and Natural Resources and the 
appropriate committees of the United States House of Representatives, 
including any recommendations for legislative changes.

SEC. 110. ANNUAL REPORT ON AVAILABILITY OF DOMESTIC ENERGY RESOURCES TO 
              MAINTAIN THE UNITED STATES ELECTRICITY GRID.

    (a) Beginning on October 1, 2001, and annually thereafter, the 
Secretary of Energy, in consultation with the Federal Energy Regulatory 
Commission and the North American Electric Reliability Council, States, 
and appropriate regional organizations, shall submit a report to the 
President and the Congress which evaluates the availability and 
capacity of domestic sources of energy generation to maintain the 
electricity grid in the United States. Specifically, the Secretary 
shall evaluate each region of the country with regard to grid stability 
during peak periods, such as summer, and options for improving grid 
stability.
    (b) The report shall specify specific legislative or administrative 
actions that could be implemented to improve baseload generation and 
set forth a range of options and alternatives with a benefit/cost 
analysis for each option or alternative together with an estimate of 
the contribution each option or alternative could make to reduce 
foreign oil imports. The report shall indicate, in detail, options and 
alternatives to--
            (1) increase the use of non-emitting domestic energy 
        sources, including conventional and non-conventional sources 
        such as, but not limited to, increased nuclear energy 
        generation; and
            (2) conserve energy resources, including improving 
        efficiencies and decreasing fuel consumption.

SEC. 111. STUDY OF FINANCING FOR NEW TECHNOLOGIES.

    (a) The Secretary of Energy shall undertake an independent 
assessment of innovative financing techniques to encourage and enable 
construction of new electricity supply technologies with high initial 
capital costs that might not be otherwise built in a deregulated 
market.
    (b) The assessment shall be conducted by a firm with proven 
expertise in financing large capital projects or in financial services 
consulting, and is to be provided to the Congress no later than nine 
months from the date of enactment of this Act.
    (c) The assessment shall include a comprehensive examination of all 
available techniques to safeguard private investors in high capital 
cost technologies--including advanced design power plants including, 
but not limited to, nuclear--against government-imposed risks that are 
beyond the investors' control. Such techniques may include (but need 
not be limited to) Federal loan guarantees, Federal price guarantees, 
special tax considerations, and direct Federal Government investment.

SEC. 112. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO EMERGING 
              ENERGY TECHNOLOGY.

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

SEC. 113. INTERAGENCY AGREEMENT ON ENVIRONMENTAL REVIEW OF INTERSTATE 
              NATURAL GAS PIPELINE PROJECTS.

    The Secretary of Energy, in coordination with the Federal Energy 
Regulatory Commission, shall establish an administrative interagency 
task force to develop an interagency agreement to expedite and 
facilitate the environmental review and permitting of interstate 
natural gas pipeline projects. The task force shall include the Bureau 
of Land Management and the Fish and Wildlife Service in the Department 
of the Interior, the United States Army Corps of Engineers, the United 
States Forest Service, the Environmental Protection Agency, the 
Advisory Council on Historic Preservation and such other agencies as 
the Office and the Federal Energy Regulatory Commission deem 
appropriate. The interagency agreement shall require that agencies 
complete their review of interstate pipeline projects within a specific 
period of time after referral of the matter by the Federal Energy 
Regulatory Commission. The agreement shall be completed within six 
months after the effective date of this section.

SEC. 114. PIPELINE INTEGRITY, SAFETY AND RELIABILITY RESEARCH AND 
              DEVELOPMENT.

    (a) 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 shall include materials inspection 
techniques, risk assessment methodology, and information systems 
surety.
    (b) Purpose.--The purpose of the cooperative research program shall 
be to promote research and development to--
            (1) ensure long-term safety, reliability and service life 
        for existing pipelines;
            (2) expand capabilities of internal inspection devices to 
        identify and accurately measure defects and anomalies;
            (3) develop inspection techniques for pipelines that cannot 
        accommodate the internal inspection devices available on the 
        date of enactment;
            (4) develop innovative techniques to measure the structural 
        integrity of pipelines to prevent pipeline failures;
            (5) develop improved materials and coatings for use in 
        pipelines;
            (6) improve the capability, reliability, and practicality 
        of external leak detection devices;
            (7) identify underground environments that might lead to 
        shortened service life;
            (8) enhance safety in pipeline siting and land use;
            (9) minimize the environmental impact of pipelines;
            (10) demonstrate technologies that improve pipeline safety, 
        reliability, and integrity;
            (11) provide risk assessment tools for optimizing risk 
        mitigation strategies; and
            (12) provide highly secure information systems for 
        controlling the operation of pipelines.
    (c) Areas.--In carrying out this section, 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--
            (1) early crack, defect, and damage detection, including 
        real-time damage monitoring;
            (2) automated internal pipeline inspection sensor systems;
            (3) land use guidance and set back management along 
        pipeline rights-of-way for communities;
            (4) internal corrosion control;
            (5) corrosion-resistant coatings;
            (6) improved cathodic protection;
            (7) inspection techniques where internal inspection is not 
        feasible, including measurement of structural integrity;
            (8) 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;
            (9) longer life, high strength, non-corrosive pipeline 
        materials;
            (10) assessing the remaining strength of existing pipes;
            (11) 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;
            (12) identification, monitoring, and prevention of outside 
        force damage, including satellite surveillance; and
            (13) any other areas necessary to ensuring the public 
        safety and protecting the environment.
    (d) Research and Development Program Plan.--Within 240 days after 
the date of enactment of this section, 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 five-year program plan to guide activities under this section. 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.
    (e) Implementation.--The Secretary of Transportation shall have 
primary responsibility for ensuring the five-year plan provided for in 
subsection (d) is implemented as intended by this section. In carrying 
out the research, development, and demonstration activities under this 
section, 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.
    (f) 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 natural laboratories, universities, and 
any other research organizations, including industry research 
organizations.
    (g) Pipeline Integrity Technical Advisory Committee.--
            (1) 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 five-year research, 
        development, and demonstration program plan as defined in Sec. 
        3(e). The Advisory Committee shall have an ongoing role in 
        evaluating the progress and results of the research, 
        development, and demonstration carried out under this section.
            (2) 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.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary of Transportation and to the Secretary of 
Energy for carrying out this section such sums as may be necessary for 
each of the fiscal years 2002 through 2006.

SEC. 115. RESEARCH AND DEVELOPMENT FOR NEW NATURAL GAS TECHNOLOGIES.

    (a) The Secretary of Energy shall conduct a comprehensive five-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).
    (b) There are authorized to be appropriated such sums as may be 
necessary for the purposes of this section.

  TITLE II--TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM FOR ADVANCED 
 CLEAN COAL TECHNOLOGY FOR COAL-BASED ELECTRICITY GENERATING FACILITIES

SEC. 201. PURPOSE.

    The purpose of this title is to direct the Secretary of Energy 
(referred to as ``Secretary'' in this title) to--
            (1) establish a coal-based technology development program 
        designed to achieve cost and performance goals;
            (2) carry out a study to identify technologies that may be 
        capable of achieving, either individually or in combination, 
        the cost and performance goals and for other purposes; and
            (3) implement a research, development, and demonstration 
        program to develop and demonstrate, in commercial-scale 
        applications, advanced clean coal technologies for coal-fired 
        generating units constructed before the date of enactment of 
        this title.

SEC. 202. COST AND PERFORMANCE GOALS.

    (a) In General.--The Secretary shall perform an assessment that 
identifies costs and associated performance of technologies that would 
permit the continued cost-competitive use of coal for electricity 
generation, as chemical feedstocks, and as transportation fuel in 2007, 
2015, and the years after 2020.
    (b) Consultation.--In establishing cost and performance goals, the 
Secretary shall consult with representatives of--
            (1) the United States coal industry;
            (2) State coal development agencies;
            (3) the electric utility industry;
            (4) railroads and other transportation industries;
            (5) manufacturers of equipment using advanced coal 
        technologies;
            (6) organizations representing workers; and
            (7) organizations formed to--
                    (A) further the goals of environmental protection;
                    (B) promote the use of coal; or
                    (C) promote the development and use of advanced 
                coal technologies.
    (c) Timing.--The Secretary shall--
            (1) not later than 120 days after the date of enactment of 
        this Act, issue a set of draft cost and performance goals for 
        public comment; and
            (2) not later than 180 days after the date of enactment of 
        this Act, and after taking into consideration any public 
        comments received, submit to Congress the final cost and 
        performance goals.

SEC. 203. STUDY.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary, in cooperation with the Secretary of the 
Interior and the Administrator of the Environmental Protection Agency, 
shall conduct a study to--
            (1) identify technologies capable of achieving cost and 
        performance goals, either individually or in various 
        combinations;
            (2) assess costs that would be incurred by, and the period 
        of time that would be required for, the development and 
        demonstration of technologies that contribute, either 
        individually or in various combinations, to the achievement of 
        cost and performance goals; and
            (3) develop recommendations for technology development 
        programs, which the Department of Energy could carry out in 
        cooperation with industry, to develop and demonstrate such 
        technologies.
    (b) Cooperation.--In carrying out this section, the Secretary shall 
give appropriate consideration to the expert advice of representatives 
from the entities described in section 111(b).

SEC. 204. TECHNOLOGY RESEARCH AND DEVELOPMENT PROGRAM.

    (a) In General.--The Secretary shall carry out a program of 
research on and development, demonstration, and commercial application 
of coal-based technologies under--
            (1) this Act;
            (2) the Federal Nonnuclear Energy Research and Development 
        Act of 1974 (42 U.S.C. 5901 et seq.);
            (3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801 
        et seq.); and
            (4) title XVI of the Energy Policy Act of 1992 (42 U.S.C. 
        13381 et seq.).
    (b) Conditions.--The research, development, demonstration, and 
commercial application programs identified in section 203(a) shall be 
designed to achieve the cost and performance goals, either individually 
or in various combinations.
    (c) Report.--Not later than 18 months after the date of enactment 
of this Act, the Secretary shall submit to the President and Congress a 
report containing--
            (1) a description of the programs that, as of the date of 
        the report, are in effect or are to be carried out by the 
        Department of Energy to support technologies that are designed 
        to achieve the cost and performance goals; and
            (2) recommendations for additional authorities required to 
        achieve the cost and performance goals.

SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to carry 
out the provisions of sections 202, 203, and 204, $100,000,000 for each 
of fiscal years 2002 through 2012, to remain available until expended.
    (b) Conditions of Authorization.--The authorization of 
appropriations under subsection (a)--
             (1) shall be in addition to authorizations of 
        appropriations in effect on the date of enactment of this Act; 
        and
            (2) shall not be a cap on Department of Energy fossil 
        energy research and development and clean coal technology 
        appropriations.

SEC. 206. POWER PLANT IMPROVEMENT INITIATIVE.

    (a) In General.--The Secretary shall carry out a power plant 
improvement initiative program that will demonstrate commercial 
applications of advanced coal-based technologies applicable to new or 
existing power plants, including co-production plants, that, either 
individually or in combination, advance the efficiency, environmental 
performance and cost competitiveness well beyond that which is in 
operation or has been demonstrated to date.
    (b) Plan.--Not later than 120 days after the date of enactment of 
this title, the Secretary shall submit to Congress a plan to carry out 
subsection (a) that includes a description of--
            (1) the program elements and management structure to be 
        used;
            (2) the technical milestones to be achieved with respect to 
        each of the advanced coal-based technologies included in the 
        plan; and
            (3) the demonstration activities that will benefit new or 
        existing coal-based electric generation units having at least a 
        50 megawatt nameplate rating including improvements to allow 
        the units to achieve either--
                    (A) an overall design efficiency improvement of not 
                less than 3 percentage points as compared with the 
                efficiency of the unit as operated on the date of the 
                enactment of this title and before any retrofit, 
                repowering, replacement or installation;
                    (B) a significant improvement in the environmental 
                performance related to the control of sulfur dioxide, 
                nitrogen oxide or mercury in a manner that is well 
                below the cost of technologies that are in operation or 
                have been demonstrated to date; or
                    (C) a means of recycling or reusing a significant 
                proportion of coal combustion wastes produced by coal-
                based generating units excluding practices that are 
                commercially available at the date of enactment.

SEC. 207. FINANCIAL ASSISTANCE.

    (a) In General.--Not later than 180 days after the date on which 
the Secretary submits to Congress the plan under section 206(b), the 
Secretary shall solicit proposals for projects which serve or benefit 
new or existing facilities and, either individually or in combination, 
are designed to achieve the levels of performance set forth in section 
206(b)(3).
    (b) Project Criteria.--A solicitation under subsection (a) may 
include solicitation of a proposal for a project to demonstrate--
            (1) the reduction of emissions of one or more pollutants; 
        or
            (2) the production of coal combustion byproducts that are 
        capable of obtaining economic values significantly greater than 
        byproducts produced on the date of enactment of this title.
    (c) Financial Assistance.--The Secretary shall provide financial 
assistance to projects that--
            (1) demonstrate overall cost reductions in the utilization 
        of coal to generate useful forms of energy;
            (2) improve the competitiveness of coal among various forms 
        of energy to maintain a diversity of fuel choices in the United 
        States to meet electricity generation requirements; and
            (3) achieve in a cost-effective manner, one or more of the 
        criteria set out in the solicitation; and
            (4) demonstrate technologies that are applicable to 25 
        percent of the electricity generating facilities that use coal 
        as the primary feedstock on the date of enactment of this 
        title.
    (d) Federal Share.--The Federal share of the cost of any project 
funded under this section shall not exceed 50 percent.
    (e) Exemption From New Source Review Provisions.--A project funded 
under this section shall be exempt from the new source review 
provisions of the Clean Air Act (42 U.S.C. 7401 et seq.).

SEC. 208. FUNDING.

    To carry out sections 206 and 207, there are authorized to be 
appropriated such sums as may be necessary.

SEC. 209. RESEARCH AND DEVELOPMENT FOR ADVANCED SAFE AND EFFICIENT COAL 
              MINING TECHNOLOGIES.

    (a) 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 develop 
mining research priorities identified by the Mining Industry of the 
Future Program and in the National Academy of Sciences report on Mining 
Technologies, establish a process for joint industry-government 
research, and expand mining research capabilities at universities.
    (b) There are authorized to be appropriated to carry out the 
requirements of this section, $10,000,000 in fiscal year 2002, 
$12,000,000 in fiscal year 2003, and $15,000,000 in fiscal year 2004. 
At least 20 percent of any funds appropriated shall be dedicated to 
research carried out at universities.

SEC. 210. RAILROAD EFFICIENCY.

    (a) The Secretary shall, in conjunction 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) There are authorized to be appropriated to carry out the 
requirements of this section $50,000,000 in fiscal year 2002, 
$60,000,000 in fiscal year 2003, and $70,000,000 in fiscal year 2004.

                         TITLE III--OIL AND GAS

           Subtitle A--Deepwater and Frontier Royalty Relief

SEC. 301. SHORT TITLE.

    This part may be referred to as the ``Outer Continental Shelf Deep 
Water and Frontier Royalty Relief Act''.

SEC. 302. AMENDMENTS TO THE OUTER CONTINENTAL SHELF LANDS ACT.

    (a) Section 8(a)(3) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(3)), is amended--
            (1) by designating the provisions of paragraph (3) as 
        subparagraph (A) of such paragraph (3); and
            (2) by inserting after subparagraph (A), as so designated, 
        the following:
                    ``(B) In the Western and Central Planning Areas of 
                the Gulf of Mexico and the portion of the Eastern 
                Planning Area of the Gulf of Mexico encompassing whole 
                lease blocks lying west of 87 degrees, 30 minutes West 
                longitude, the Secretary may, in order to--
                            ``(i) promote development or increased 
                        production on producing or non-producing 
                        leases; or
                            ``(ii) encourage production of marginal 
                        resources on producing or non-producing leases;
                through primary, secondary, or tertiary recovery means, 
                reduce or eliminate any royalty or net profit share set 
                forth in the lease(s). With the lessee's consent, the 
                Secretary may make other modifications to the royalty 
                or net profit share terms of the lease in order to 
                achieve these purposes.
                    ``(C)(i) Notwithstanding the provisions of this Act 
                other than this subparagraph, with respect to any lease 
                or unit in existence on the date of enactment of the 
                Outer Continental Shelf Deep Water Royalty Relief Act 
                meeting the requirements of this subparagraph, no 
                royalty payments shall be due on new production, as 
                defined in clause (iv) of this subparagraph, from any 
                lease or unit located in water depths of 200 meters or 
                greater in the Western and Central Planning Areas of 
                the Gulf of Mexico, including that portion of the 
                Eastern Planning Area of the Gulf of Mexico 
                encompassing whole lease blocks lying west of 87 
                degrees, 30 minutes West longitude, until such volume 
                of production as determined pursuant to clause (ii) has 
                been produced by the lessee.
                    ``(ii) Upon submission of a complete application by 
                the lessee, the Secretary shall determine within 180 
                days of such application whether new production from 
                such lease or unit would be economic in the absence of 
                the relief from the requirement to pay royalties 
                provided for by clause (i) of this subparagraph. In 
                making such determination, the Secretary shall consider 
                the increased technological and financial risk of deep 
                water development and all costs associated with 
                exploring, developing, and producing from the lease. 
                The lessee shall provide information required for a 
                complete application to the Secretary prior to such 
determination. The Secretary shall clearly define the information 
required for a complete application under this section. Such 
application may be made on the basis of an individual lease or unit. If 
the Secretary determines that such new production would be economic in 
the absence of the relief from the requirement to pay royalties 
provided for by clause (i) of this subparagraph, the provisions of 
clause (i) shall not apply to such production. If the Secretary 
determines that such new production would not be economic in the 
absence of the relief from the requirement to pay royalties provided 
for by clause (i), the Secretary must determine the volume of 
production from the lease or unit on which no royalties would be due in 
order to make such new production economically viable; except that for 
new production as defined in clause (iv)(I), in no case will that 
volume be less than 17.5 million barrels of oil equivalent in water 
depths of 200 to 400 meters, 52.5 million barrels of oil equivalent in 
400-800 meters of water, and 87.5 million barrels of oil equivalent in 
water depths greater than 800 meters. Redetermination of the 
applicability of clause (i) shall be undertaken by the Secretary when 
requested by the lessee prior to the commencement of the new production 
and upon significant change in the factors upon which the original 
determination was made. The Secretary shall make such redetermination 
within 120 days of submission of a complete application. The Secretary 
may extend the time period for making any determination or 
redetermination under this clause for 30 days, or longer if agreed to 
by the applicant, if circumstances so warrant. The lessee shall be 
notified in writing of any determination or redetermination and the 
reasons for the assumptions used for such determination. Any 
determination or redetermination under this clause shall be a final 
agency action. The Secretary's determination or redetermination shall 
be subject to judicial review under section 10(a) of the Administrative 
Procedures Act (5 U.S.C. 702), only for actions filed within 30 days of 
the Secretary's determination or redetermination.
                    ``(iii) In the event that the Secretary fails to 
                make the determination or redetermination called for in 
                clause (ii) upon application by the lessee within the 
                time period, together with any extension thereof, 
                provided for by clause (ii), no royalty payments shall 
                be due on new production as follows:
                            ``(I) for new production, as defined in 
                        clause (iv)(I) of this subparagraph, no royalty 
                        shall be due on such production according to 
                        the schedule of minimum volumes specified in 
                        clause (ii) of this subparagraph.
                            ``(II) For new production, as defined in 
                        clause (iv)(II) of this subparagraph, no 
                        royalty shall be due on such production for one 
                        year following the start of such production.
                    ``(iv) For purposes of this subparagraph, the term 
                `new production' is--
                            ``(I) any production from a lease from 
                        which no royalties are due on production, other 
                        than test production, prior to the date of 
                        enactment of the Outer Continental Shelf Deep 
                        Water Royalty Relief Act; or
                            ``(II) any production resulting from lease 
                        development activities pursuant to a 
                        Development Operations Coordination Document, 
                        or supplement thereto that would expand 
                        production significantly beyond the level 
                        anticipated in the Development Operations 
                        Coordination Document, approved by the 
                        Secretary after the date of enactment of the 
                        Outer Continental Shelf Deep Water Royalty 
                        Relief Act.
                    ``(v) During the production of volumes determined 
                pursuant to clause (ii) or (iii) of this subparagraph, 
                in any year during which the arithmetic average of the 
                closing prices on the New York Mercantile Exchange for 
                light sweet crude oil exceeds $28.00 per barrel, any 
                production of oil will be subject to royalties at the 
                lease stipulated royalty rate. Any production subject 
                to this clause shall be counted toward the production 
                volume determined pursuant to clause (ii) or (iii). 
                Estimated royalty payments will be made if such average 
                of the closing prices for the previous year exceeds 
                $28.00. After the end of the calendar year, when the 
                new average price can be calculated, lessees will pay 
                any royalties due, with interest but without penalty, 
                or can apply for a refund, with interest, of any 
                overpayment.
                    ``(vi) During the production of volumes determined 
                pursuant to clause (ii) or (iii) of this subparagraph, 
                in any year during which the arithmetic average of the 
                closing prices on the New York Mercantile Exchange for 
                natural gas exceeds $3.50 per million British thermal 
                units, any production of natural gas will be subject to 
                royalties at the lease stipulated royalty rate. Any 
                production subject to this clause shall be counted 
                toward the production volume determined pursuant to 
                clause (ii) or (iii). Estimated royalty payments will 
                be made if such average of the closing prices for the 
                previous year exceeds $3.50. After the end of the 
                calendar year, when the new average price can be 
                calculated, lessees will pay any royalties due, with 
                interest but without penalty, or can apply for a 
                refund, with interest, of any overpayment.
                    ``(vii) The prices referred to in clauses (v) and 
                (vi) of this subparagraph shall be changed during any 
                calendar year after 1994 by the percentage, if any, by 
                which the implicit price deflator for the gross 
                domestic product changed during the preceding calendar 
                year.''.
    (b) Section 8(a)(1)(D) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)(1)(D)) is amended by striking the word ``area;'' and 
inserting in lieu thereof the word ``area,'' and the following new 
text:
                ``except in the Arctic areas of Alaska, where the 
                Secretary is authorized to set the net profit share at 
                16 and \2/3\ percent. For purposes of this section, 
                `Arctic areas' means the Beaufort Sea and Chukchi Sea 
                Planning Areas of Alaska.''
    (c) Section 8(a) of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(a)) is amended by adding a new paragraph (10) at the end 
thereof:
            ``(10) After an oil and gas lease is granted pursuant to 
        any of the bidding systems of paragraph (1) of this subsection, 
        the Secretary shall reduce any future royalty or rental 
        obligation of the lessee on any lease issued by the Secretary 
        (and proposed by the lessee for such reduction) by an amount 
        equal to--
                    ``(A) 10 percent of the qualified costs of 
                exploratory wells drilled or geophysical work performed 
                on any lease issued by the Secretary, whichever is 
                greater, pursuant to this Act in Arctic areas of 
                Alaska; and
                    ``(B) an additional 10 percent of the qualified 
                costs of any such exploratory wells which are located 
                ten or more miles from another well drilled for oil and 
                gas.
        For purposes of this Act, `qualified costs' shall mean the 
costs allocated to the exploratory well or geophysical work in support 
of an exploration program pursuant to 26 U.S.C. as amended; 
`exploratory well' shall mean either an exploratory well as defined by 
the United States Securities and Exchange Commission in 17 C.F.R. 
210.4-10(a)(10), as amended, or a well three or more miles from any oil 
or gas well or a pipeline which transports oil or gas to a market or 
terminal; `geophysical work' shall mean all geophysical data gathering 
methods used in hydrocarbon exploration and includes seismic, gravity, 
magnetic, and electromagnetic measurements; and all distances shall be 
measured in horizontal distance. When a measurement beginning or ending 
point is a well, the measurement point shall be the bottom hole 
location of that well.''

SEC. 303. NEW LEASES.

    Section 8(a)(1) of the Outer Continental Shelf Lands Act, as 
amended (43 U.S.C. 1337(a)(1)) is amended--
            (1) by redesignating subparagraph (H) as subparagraph (I);
            (2) by striking ``or'' at the end of subparagraph (G); and
            (3) by inserting after subparagraph (G) the following new 
        subparagraph:
                    ``(H) cash bonus bid with royalty at no less than 
                12 and \1/2\ per centum fixed by the Secretary in 
                amount or value of production saved, removed, or sold, 
                and with suspension of royalties for a period, volume, 
                or value of production determined by the Secretary, 
                which suspensions may vary based on the price of 
                production from the lease; or''.

SEC. 304. LEASE SALES.

    For all tracts located in water depths of 200 meters or greater in 
the Western and Central Planning Area of the Gulf of Mexico, including 
that portion of the Eastern Planning Area of the Gulf of Mexico 
encompassing whole lease blocks lying west of 87 degrees, 30 minutes 
West longitude, any lease sale within five years of the date of 
enactment of this part, shall use the bidding system authorized in 
section 8(a)(1)(H) of the Outer Continental Shelf Lands Act, as amended 
by this part, except that the suspension of royalties shall be set at a 
volume of not less than the following--
            (1) 17.5 million barrels of oil equivalent for leases in 
        water depths of 200 to 400 meters;
            (2) 52.5 million barrels of oil equivalent for leases in 
        400 to 800 meters of water; and
            (3) 87.5 million barrels of oil equivalent for leases in 
        water depths greater than 800 meters.

SEC. 305. REGULATIONS.

    The Secretary shall promulgate such rules and regulations as are 
necessary to implement the provisions of this part within 180 days 
after the enactment of this Act.

SEC. 306. SAVINGS CLAUSE.

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

               Subtitle B--Oil and Gas Royalties in Kind

SEC. 310. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.

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

Subtitle C--Use of Royalty in Kind Oil To Fill the Strategic Petroleum 
                                Reserve

SEC. 320. USE OF ROYALTY IN KIND OIL TO FILL THE STRATEGIC PETROLEUM 
              RESERVE.

    The Secretary of the Interior shall enter into an agreement with 
the Secretary of Energy to transfer title to the Federal share of crude 
oil production from Federal lands for use at the discretion of the 
Secretary of Energy in filling the Strategic Petroleum Reserve during 
periods of crude oil market stability. The Secretary of Energy may also 
use the Federal share of crude oil produced from Federal lands for 
other disposal within the Federal Government, as he may determine, to 
carry out the energy policy of the United States.

    Subtitle D--Improvements to Federal Oil and Gas Lease Management

SEC. 330. SHORT TITLE.

    This Part may be cited as the ``Federal Oil and Gas Lease 
Management Improvement Act of 2000''.

SEC. 331. DEFINITIONS.

    In this Part--
            (1) Application for a permit to drill.--The term 
        ``application for a permit to drill'' means a drilling plan 
        including design, mechanical, and engineering aspects for 
        drilling a well.
            (2) Federal land.--
                    (A) In general.--The term ``Federal land'' means 
                all land and interests in land owned by the United 
                States that are subject to the mineral leasing laws, 
                including mineral resources or mineral estates reserved 
                to the United States in the conveyance of a surface or 
                non-mineral estate.
                    (B) Exclusion.--The term ``Federal land'' does not 
                include--
                            (i) Indian land (as defined in section 3 of 
                        the Federal Oil and Gas Royalty Management Act 
                        of 1982 (30 U.S.C. 1702)); or
                            (ii) submerged land on the Outer 
                        Continental Shelf (as defined in section 2 of 
                        the Outer Continental Shelf Lands Act (43 
                        U.S.C. 1331)).
            (3) Oil and gas conservation authority.--The term ``oil and 
        gas conservation authority'' means the agency or agencies in 
        each State responsible for regulating for conservation purposes 
        operations to explore for and produce oil and natural gas.
            (4) Project.--The term ``project'' means an activity by a 
        lessee, an operator, or an operating rights owner to explore 
        for, develop, produce, or transport oil or gas resources.
            (5) Secretary.--The term ``Secretary'' means--
                    (A) the Secretary of the Interior, with respect to 
                land under the administrative jurisdiction of the 
                Department of the Interior; and
                    (B) the Secretary of Agriculture, with respect to 
                land under the administrative jurisdiction of the 
                Department of Agriculture.
            (6) Surface use plan of operations.--The term ``surface use 
        plan of operations'' means a plan for surface use, disturbance, 
        and reclamation.

SEC. 332. NO PROPERTY RIGHT.

    Nothing in this Part gives a State a property right or interest in 
any Federal lease or land.

SEC 333. TRANSFER OF AUTHORITY.

    (a) Notification.--Not before the date that is 180 days after the 
date of enactment of this Act, a State may notify the Secretary of its 
intent to accept authority for regulation of operations, as described 
in subparagraphs (A) through (K) of subsection (b)(2), under oil and 
gas leases on Federal land within the State.
    (b) Transfer of Authority--
            (1) In general.--Effective 180 days after the Secretary 
        receives the State's notice, authority for the regulation of 
        oil and gas leasing operations is transferred from the 
        Secretary to the State.
            (2) Authority included.--The authority transferred under 
        paragraph (1) includes--
                    (A) processing and approving applications for 
                permits to drill, subject to surface use agreements and 
                other terms and conditions determined by the Secretary;
                    (B) production operations;
                    (C) well testing;
                    (D) well completion;
                    (E) well spacing;
                    (F) communication;
                    (G) conversion of a producing well to a water well;
                    (H) well abandonment procedures;
                    (I) inspections;
                    (J) enforcement activities; and
                    (K) site security.
    (c) Retained Authority.--The Secretary shall--
            (1) retain authority over the issuance of leases and the 
        approval of surface use plans of operations and project-level 
        environmental analyses; and
            (2) spend appropriated funds to ensure that timely 
        decisions are made respecting oil and gas leasing, taking into 
        consideration multiple uses of Federal land, socioeconomic and 
        environmental impacts, and the results of consultations with 
        State and local government officials.

SEC. 334. ACTIVITY FOLLOWING TRANSFER OF AUTHORITY.

    (a) Federal Agencies.--Following the transfer of authority, no 
Federal agency shall exercise the authority formerly held by the 
Secretary as to oil and gas lease operations and related operations on 
Federal land.
    (b) State Authority.--
            (1) In general.--Following the transfer of authority, each 
        State shall enforce its own oil and gas conservation laws and 
        requirements pertaining to transferred oil and gas lease 
        operations and related operations with due regard to the 
        national interest in the expedited, environmentally sound 
        development of oil and gas resources in a manner consistent 
        with oil and gas conservation principles.
            (2) Appeals.--Following a transfer of authority under 
        section 333, an appeal of any decision made by a State oil and 
        gas conservation authority shall be made in accordance with 
        State administrative procedures.
    (c) Pending Enforcement Actions.--The Secretary may continue to 
enforce any pending actions respecting acts committed before the date 
on which authority is transferred to a State under section 333 until 
those proceedings are concluded.
    (d) Pending Applications.--
            (1) Transfer to state.--All applications respecting oil and 
        gas lease operations and related operations on Federal land 
        pending before the Secretary on the date on which authority is 
        transferred under section 333 shall be immediately transferred 
        to the oil and gas conservation authority of the State in which 
        the lease is located.
            (2) Action by the state.--The oil and gas conservation 
        authority shall act on the application in accordance with State 
        laws (including regulations) and requirements.

SEC. 335. COMPENSATION FOR COSTS.

    (a) In General.--Subject to the availability of appropriations, the 
Secretary shall compensate any State for costs incurred to carry out 
the authorities transferred under section 333.
    (b) Payment Schedule.--Payments shall be made not less frequently 
than every quarter.
    (c) Cost Breakdown Report.--Each State seeking compensation shall 
report to the Secretary a cost breakdown for the authorities 
transferred.

SEC. 336. APPLICATIONS.

    (a) Limitation on Cost Recovery.--Notwithstanding sections 304 and 
504 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 
1734, 1764) and section 9701 of Title 31, United States Code, the 
Secretary shall not recover the Secretary's costs with respect to 
applications and other documents relating to oil and gas leases.
    (b) Completion of Planning Documents and Analyses.--
            (1) In general.--The Secretary shall complete any resource 
        management planning documents and analyses not later than 90 
        days after receiving any offer, application, or request for 
        which a planning document or analysis is required to be 
        prepared.
            (2) Preparation by applicant or lessee.--If the Secretary 
        is unable to complete the document or analysis within the time 
        prescribed by paragraph (1), the Secretary shall notify the 
        applicant or lessee of the opportunity to prepare the required 
        document or analysis for the agency's review and use in 
        decisionmaking.
    (c) Reimbursement for costs of NEPA Analyses, Documentation, and 
Studies.--If--
            (1) adequate funding to enable the Secretary to timely 
        prepare a project-level analysis required under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with 
        respect to an oil or gas lease is not appropriated; and
            (2) the lessee, operator, or operating rights owner 
        voluntarily pays for the cost of the required analysis, 
        documentation, or related study;
the Secretary shall reimburse the lessee, operator, or operating rights 
owner for its costs through royalty credits attributable to the lease, 
unit agreement, or project area.

SEC. 337. TIMELY ISSUANCE OF DECISIONS.

    (a) In General.--The Secretary shall ensure the timely issuance of 
Federal agency decisions respecting oil and gas leasing and operations 
on Federal land.
    (b) Offer To Lease.--
            (1) Deadline.--The Secretary shall accept or reject an 
        offer to lease not later than 90 days after the filing of the 
        offer.
            (2) Failure to meet deadline.--If an offer is not acted 
        upon within that time, the offer shall be deemed to have been 
        accepted.
    (c) Application for Permit To Drill.--
            (1) Deadline.--The Secretary and a State that has accepted 
        a transfer of authority under section 610 shall approve or 
        disapprove an application for permit to drill not later than 30 
        days after receiving a complete application.
            (2) Failure to meet deadline.--If the application is not 
        acted on within the time prescribed by paragraph (1), the 
        application shall be deemed to have been approved.
    (d) Surface Use Plan of Operations.--The Secretary shall approve or 
disapprove a surface use plan of operations not later than 30 days 
after receipt of a complete plan.
    (e) Administrative Appeals.--
            (1) Deadline.--From the time that a Federal oil and gas 
        lessee or operator files a notice of administrative appeals of 
        a decision or order of an officer or employee of the Department 
        of the Interior or the Forest Service respecting a Federal oil 
        and gas Federal lease, the Secretary shall have 2 years in 
        which to issue a final decision in the appeal.
            (2) Failure to meet deadline.--If no final decision has 
        been issued within the time prescribed by paragraph (1), the 
        appeal shall be deemed to have been granted.

SEC. 338. ELIMINATION OF UNWARRANTED DENIALS AND STAYS.

    (a) In General.--The Secretary shall ensure that unwarranted 
denials and stays of lease issuance and unwarranted restrictions on 
lease operations are eliminated from the administration of oil and gas 
leasing on Federal land.
    (b) Land Designated for Multiple Use.--
            (1) In general.--Land designated as available for multiple 
        use under Bureau of Land Management resource management plans 
        and Forest Service leasing analyses shall be available for oil 
        and gas leasing without lease stipulations more stringent than 
        restrictions on surface use and operations imposed under the 
        laws (including regulations) of the State oil and gas 
        conservation authority unless the Secretary includes in the 
        decision approving the management plan or leasing analysis a 
        written explanation why more stringent stipulations are 
        warranted.
            (2) Appeal.--Any decision to require a more stringent 
        stipulation shall be administratively appealable and, following 
        a final agency decision, shall be subject to judicial review.
    (c) Rejection of Offer To Lease.--
            (1) In general.--If the Secretary rejects an offer to lease 
        on the ground that the land is unavailable for leasing, the 
        Secretary shall provide a written, detailed explanation of the 
        reasons the land is unavailable for leasing.
            (2) Previous resource management decision.--If the 
        determination of unavailability is based on a previous resource 
        management decision, the explanation shall include a careful 
        assessment of whether the reasons underlying the previous 
        decision are still persuasive.
            (3) Segregation of available land from unavailable land.--
        The Secretary may not reject an offer to lease land available 
        for leasing on the ground that the offer includes land 
        unavailable for leasing, and the Secretary shall segregate 
        available land from unavailable land, on the offeror's request 
        following notice by the Secretary, before acting on the offer 
        to lease.
    (d) Disapproval or Required Modification of Surface Use Plans of 
Operations and Application for Permit To Drill.--The Secretary shall 
provide a written, detailed explanation of the reasons for disapproving 
or requiring modifications of any surface use plan of operations or 
application for permit to drill.
    (e) Effectiveness of Decision.--A decision of the Secretary 
respecting an oil and gas lease shall be effective pending 
administrative appeal to the appropriate office within the Department 
of the Interior or the Department of Agriculture unless that office 
grants a stay in response to a petition satisfying the criteria for a 
stay established by section 4.21(b) of title 43, Code of Federal 
Regulations (or any successor regulation).

SEC. 339. REPORTS.

    (a) In General.--Not later than March 31, 2002, the Secretaries 
shall jointly submit to the Congress a report explaining the most 
efficient means of eliminating overlapping jurisdiction, duplication of 
effort, and inconsistent policymaking and policy implementation as 
between the Bureau of Land Management and the Forest Service.
    (b) Recommendations.--The report shall include recommendations on 
statutory changes needed to implement the report's conclusions.

              Subtitle E--Royalty Reinvestment in America

SEC. 351. ROYALTY INCENTIVE PROGRAM.

    (a) In General.--To encourage exploration and development 
expenditures on Federal land and the Outer Continental Shelf for the 
development of oil and gas resources when the cash price of West Texas 
Intermediate crude oil, as posted on the Dow Jones Commodities Index 
chart is less than $18 per barrel for 90 consecutive pricing days or 
when natural gas prices as delivered at Henry Hub, Louisiana, are less 
than $2.30 per million British thermal units for 90 consecutive days, 
the Secretary shall allow a credit against the payment of royalties on 
Federal oil production and gas production, respectively, in an amount 
equal to 20 percent of the capital expenditures made on exploration and 
development activities on Federal oil and gas leases.
    (b) No Crediting Against Onshore Federal Royalty Obligations.--In 
no case shall such capital expenditures made on Outer Continental Shelf 
leases be credited against onshore Federal royalty obligations.

                           TITLE IV--NUCLEAR

                 Subtitle A--Price-Anderson Amendments

SEC. 401. SHORT TITLE.

    (b) This Subtitle may be cited as the ``Price-Anderson Amendments 
Act of 2001''.

SEC. 402. INDEMNIFICATION AUTHORITY.

    (a) Indemnification of NRC Licensees.--Section 170c. of the Atomic 
Energy Act of 1954 (42 U.S.C. 2210(c)) is amended by striking ``August 
1, 2002'' each place it appears and inserting ``August 1, 2012''.
    (b) Indemnification of DOE Contractors.--Section 170 d.(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 
170 k. 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. 403. MAXIMUM ASSESSMENT.

    Section 170 b.(1) of the Atomic Energy Act of 1954 (42 U.S.C. 
2210(b)(1)) is amended by striking ``$10,000,000'' and inserting 
``$20,000,000''.

SEC. 404. DOE LIABILITY LIMIT.

    (a) Aggregate Liability Limit.--Section 170 d. of the Atomic Energy 
Act of 1954 (42 U.S.C. 2210(d)) is amended by striking subsection (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 claims 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 170 d. 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, shall be deemed to be 
        amended, on the date of the enactment of the Price-Anderson 
        Amendments Act of 2001, to reflect the amount of indemnity for 
        public liability and any applicable financial protection 
        required of the contractor under this subsection on such 
        date.''.

SEC. 405. INCIDENTS OUTSIDE THE UNITED STATES.

    (a) Amount of Indemnification.--Section 170 d.(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. 406. REPORTS.

    Section 170 p. 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. 407. INFLATION ADJUSTMENT.

    Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t)) 
is amended--
            (1) by renumbering paragraph (2) as paragraph (3); and
            (2) by adding after paragraph (1) the following new 
        paragraph:
            ``(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 the date of the enactment of the Price-
        Anderson Amendments Act of 2001, in accordance with the 
        aggregate percentage change in the Consumer Price Index since--
                    ``(A) such date of enactment, in the case of the 
                first adjustment under this subsection; or
                    ``(B) the previous adjustment under this 
                subsection.''.

SEC. 408. CIVIL PENALTIES.

    (a) Repeal of Automatic Remission.--Section 234A b.(2) of the 
Atomic Energy of 1954 (42 U.S.C. 2282a(b)(2)) is amended by striking 
the last sentence.
    (b) Limitation for Nonprofit Institutions.--Section 234A of the 
Atomic Energy Act of 1954 (42 U.S.C. 2282a) is further amended by 
striking subsection d. and inserting the following:
    ``d. Notwithstanding subsection a., no contractor, subcontractor, 
or supplier considered to be nonprofit under the Internal Revenue Code 
of 1954 shall be subject to a civil penalty under this section in 
excess of the amount of any performance fee paid by the Secretary to 
such contractor, subcontractor, or supplier under the contract under 
which the violation or violations; occur.''.

SEC. 409. EFFECTIVE DATE.

    (a) In General.--The amendments made by this Subtitle shall become 
effective on the date of the enactment of this Subtitle.
    (b) Indemnification Provisions.--The amendments made by sections 
703, 704, and 705 shall not apply to any nuclear incident occurring 
before the date of the enactment of this Subtitle.
    (c) Civil Penalty Provisions.--The amendments made by section 708 
to section 234A of the Atomic Energy Act of 1954 (42 U.S.C. 
2282a(b)(2)) shall not apply to any violation occurring under a 
contract entered into before the date of the enactment of this 
Subtitle.

           Subtitle B--Funding From the Department of Energy

SEC. 410. NUCLEAR ENERGY RESEARCH INITIATIVE.

    There are authorized to be appropriated $60,000,000 for fiscal year 
2002 and such sums as are necessary for each fiscal year thereafter for 
a Nuclear Energy Research Initiative to be managed by the Director of 
the Office of Nuclear Energy, for grants to be competitively awarded 
and subject to peer review for research relating to nuclear energy. The 
Secretary of Energy shall submit to the Committee on Science and the 
Committee on Appropriations in the House of Representatives, and to the 
Committee on Energy and Natural Resources and the Committee on 
Appropriations of the Senate, an annual report on the activities of the 
Nuclear Energy Research Initiative.

SEC. 411. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

    There are authorized to be appropriated $10,000,000 for fiscal year 
2002 and such sums as are necessary for each fiscal year thereafter for 
a Nuclear Energy Plant Optimization Program to be managed by the 
Director of the Office of Nuclear Energy, for a joint program with 
industry cost-shared by at least 50 percent and subject to annual 
review by the Secretary of Energy's Nuclear Energy Research Advisory 
Council. The Secretary of Energy shall submit to the Committee on 
Science and the Committee on Appropriations in the House of 
Representatives, and to the Committee on Energy and Natural Resources 
and the Committee on Appropriations of the Senate, an annual report on 
the activities of the Nuclear Energy Plant Optimization Program.

SEC. 412. NUCLEAR ENERGY TECHNOLOGY DEVELOPMENT PROGRAM.

    There are authorized to be appropriated $25,000,000 for fiscal year 
2002 and such sums as are necessary for each fiscal year thereafter for 
a Nuclear Energy Technology Development Program to be managed by the 
Director of the Office of Nuclear Energy, for a roadmap to design and 
develop a new nuclear energy facility in the United States and subject 
to annual review by the Secretary of Energy's Nuclear Energy Research 
Advisory Council. The Secretary of Energy shall submit to the Committee 
on Science and the Committee on Appropriations in the House of 
Representatives, and to the Committee on Energy and Natural Resources 
and the Committee on Appropriations of the Senate, an annual report on 
the activities of the Nuclear Technology Development Program.

 Subtitle C--Grants for Incentive Payments for Capital Improvements To 
                          Increase Efficiency

SEC. 420. NUCLEAR ENERGY PRODUCTION INCENTIVES.

    (a) Incentive Payments.--For electric energy generated and sold by 
an existing nuclear energy facility during the incentive period, the 
Secretary of Energy shall make, subject to the availability of 
appropriations, incentive payments to the owner or operator of such 
facility. The amount of such payment made to any such owner or operator 
shall be as determined under subsection (e) of this section. Payments 
under this section may only be made upon receipt by the Secretary of an 
incentive payment application, which establishes that the applicant is 
eligible to receive such payment and which satisfies such other 
requirements as the Secretary deems necessary. Such application shall 
be in such form, and shall be submitted at such time, as the Secretary 
shall establish.
    (b) Definitions.--For purposes of this section:
            (1) Qualified nuclear energy facility.--The term 
        ``qualified nuclear energy facility'' means an existing reactor 
        used to generate electricity for sale.
            (2) Existing reactor.--The term ``existing reactor'' means 
        any nuclear reactor the construction of which was completed and 
        licensed by the Nuclear Regulatory Commission before the date 
        of enactment of this section.
    (c) Incentive Period.--A qualified nuclear energy facility may 
receive payments under this section for a period of 15 years (referred 
to in this section as the ``incentive period.'')
    (d) Amount of Payment.--(1) Payments made by the Secretary under 
this section to the owner or operator of a nuclear energy facility 
shall be based on the increased volume of kilowatt hours of electricity 
generated by the qualified nuclear energy facility during the incentive 
period. The amount of such payment shall be 1 mill for each kilowatt-
hour produced in excess of the total generation produced over the most 
recent calendar year prior to the first fiscal year in which payment is 
sought. Such payment is subject to the availability of appropriations 
under subsection (g), except that no facility may receive more than 
$2,000,000 in one calendar year.
    (2) The amount of the payment made to any person under this section 
as provided in paragraph (1) shall be adjusted for inflation for each 
fiscal year beginning after calendar year 2001 in the same manner as 
provided in the provisions of section 29(d)(2)(B) of the Internal 
Revenue Code of 1986, except that in applying such provisions, the 
calendar year 2001 shall be substituted for the calendar year 1979.
    (e) Sunset.--No payment may be made under this section to any 
nuclear energy facility after the expiration of the period of 20 fiscal 
years beginning with fiscal year 2001, and no payment may be made under 
this section to any such facility after a payment has been made with 
respect to such facility for a period of 15 fiscal years.
    (f) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary to carry out the purposes of this section 
$50,000,000 for each of the fiscal years 2001 through 2015.

SEC. 421. NUCLEAR ENERGY EFFICIENCY IMPROVEMENT.

    (a) Incentive Payments.--The Secretary of Energy shall make 
incentive payments to the owners or operators of qualified nuclear 
energy facilities to be used to make capital improvements in the 
facilities that are directly related to improving the electrical output 
efficiency of such facilities by at least 1 percent.
    (b) Limitations.--(1) Incentive payments under this section shall 
not exceed 10 percent of the costs of the capital improvement concerned 
and not more than one payment may be made with respect to improvements 
at a single facility.
    (2) No payment in excess of $1,000,000 may be made with respect to 
improvements at a single facility.
    (3) Payments may be made by the Department or used by a facility to 
offset the costs of NRC permitting fees for a capital improvement.
    (4) Payments made by the Department to the Nuclear Regulatory 
Commission for permitting an improvement that can impact multiple 
facilities are not subject to the limitation in (b)(2).
    (c) Authorization.--There is authorized to be appropriated to carry 
out this section not more than $20,000,000 in each fiscal year after 
the fiscal year 2001.

   TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY SECURITY ACT OF 2001

SEC. 501. SHORT TITLE.

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

SEC. 502. DEFINITIONS.

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

SEC. 503. LEASING PROGRAM FOR LANDS WITHIN THE ANWR 1002 AREA.

    (a) Authorization.--The Congress hereby authorizes and directs the 
Secretary, acting through the Bureau of Land Management in consultation 
with the Fish and Wildlife Service and other appropriate Federal 
offices and agencies, to take such actions as are necessary to 
establish and implement a competitive oil and gas leasing program that 
will result in an environmentally sound program for the exploration, 
development, and production of the oil and gas resources of the 1002 
Area and to administer the provisions of this title through 
regulations, lease terms, conditions, restrictions, prohibitions, 
stipulations and other provisions that ensure the oil and gas 
exploration, development, and production activities on the 1002 Area 
will result in no significant adverse effect on fish and wildlife, 
their habitat, subsistence resources, and the environment, and shall 
require the application of the best commercially available technology 
for oil and gas exploration, development, and production, on all new 
exploration, development, and production operations, and whenever 
practicable, on existing operations, and in a manner to ensure the 
receipt of fair market value by the public for the mineral resources to 
be leased.
    (b) Repeal.--The prohibitions and limitations contained in section 
1003 of the Alaska National Interest Lands Conservation Act of 1980 (16 
U.S.C. 3143) are hereby repealed.
    (c) Compatibility.--Congress hereby determines that the oil and gas 
leasing program and activities authorized by this section in the 1002 
Area are compatible with the purposes for which the Arctic National 
Wildlife Refuge was established, and that no further findings or 
decisions are required to implement this determination.
    (d) Sole Authority.--This title shall be the sole authority for 
leasing on the 1002 Area: Provided, That nothing in this title shall be 
deemed to expand or limit State and local regulatory authority.
    (e) Federal Land.--The 1002 Area shall be considered ``Federal 
land'' for the purposes of the Federal Oil and Gas Royalty Management 
Act of 1982.
    (f) Special Areas.--The Secretary, after consultation with the 
State of Alaska, City of Kaktovik, and the North Slope Borough, is 
authorized to designate up to a total of 45,000 acres of the 1002 Area 
as Special Areas and close such areas to leasing if the Secretary 
determines that these Special Areas are of such unique character and 
interest so as to require special management and regulatory protection. 
The Secretary may, however, permit leasing of all or portions of any 
Special Areas within the 1002 Area by setting lease terms that limit or 
condition surface use and occupancy by lessees of such lands but permit 
the use of horizontal drilling technology from sites on leases located 
outside the designated Special Areas.
    (g) Limitation on Closed Areas.--The Secretary's sole authority to 
close lands within the 1002 Area to oil and gas leasing and to 
exploration, development, and production is that set forth in this 
title.
    (h) Conveyance.--In order to maximize Federal revenues by removing 
clouds on title of lands and clarifying land ownership patterns within 
the 1002 Area, the Secretary, notwithstanding the provisions of section 
1302(h)(2) of the Alaska National Interest Lands Conservation Act (16 
U.S.C. 3192(h)(2)), is authorized and directed to convey (1) to the 
Kaktovik Inupiat Corporation the surface estate of the lands described 
in paragraph 2 of Public Land Order 6959, to the extent necessary to 
fulfill the Corporation's entitlement under section 12 of the Alaska 
Native Claims Settlement Act (43 U.S.C. 1611), and (2) to the Arctic 
Slope Regional Corporation the subsurface estate beneath such surface 
estate pursuant to the August 9, 1983, agreement between the Arctic 
Slope Regional Corporation and the United States of America.

SEC. 504. RULES AND REGULATIONS.

    (a) Promulgation.--The Secretary shall prescribe such rules and 
regulations as may be necessary to carry out the purposes and 
provisions of this title, including rules and regulations relating to 
protection of the fish and wildlife, their habitat, subsistence 
resources, and the environment of the 1002 Area. Such rules and 
regulations shall be promulgated no later than fourteen months after 
the date of enactment of this title and shall, as of their effective 
date, apply to all operations conducted under a lease issued or 
maintained under the provisions of this title and all operations on the 
1002 Area related to the leasing, exploration, development and 
production of oil and gas.
    (b) Revision of Regulations.--The Secretary shall periodically 
review and, if appropriate, revise the rules and regulations issued 
under subsection (a) of this section to reflect any significant 
biological, environmental, or engineering data which come to the 
Secretary's attention.

SEC. 505. ADEQUACY OF THE DEPARTMENT OF THE INTERIOR'S LEGISLATIVE 
              ENVIRONMENTAL IMPACT STATEMENT.

    The ``Final Legislative Environmental Impact Statement'' (April 
1987) prepared pursuant to section 1002 of the Alaska National Interest 
Lands Conservation Act of 1980 (16 U.S.C. 3142) and section 102(2)(C) 
of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) 
is hereby found by the Congress to be adequate to satisfy the legal and 
procedural requirements of the National Environmental Policy Act of 
1969 with respect to actions authorized to be taken by the Secretary to 
develop and promulgate the regulations for the establishment of the 
leasing program authorized by this title, to conduct the first lease 
sale and any subsequent lease sale authorized by this title, and to 
grant rights-of-way and easements to carry out the purposes of this 
title.

SEC. 506. LEASE SALES.

    (a) Lease Sales.--Lands may be leased pursuant to the provisions of 
this title to any person qualified to obtain a lease for deposits of 
oil and gas under the Mineral Leasing Act, as amended (30 U.S.C. 181).
    (b) Procedures.--The Secretary shall, by regulation, establish 
procedures for--
            (1) receipt and consideration of sealed nominations for any 
        area in the 1002 Area for inclusion in, or exclusion (as 
        provided in subsection (c)) from, a lease sale; and
            (2) public notice of and comment on designation of areas to 
        be included in, or excluded from, a lease sale.
    (c) Lease Sales on 1002 Area.--The Secretary shall, by regulation, 
provide for lease sales of lands on the 1002 Area. When lease sales are 
to be held, they shall occur after the nomination process provided for 
in subsection (b) of this section. For the first lease sale, the 
Secretary shall offer for lease those acres receiving the greatest 
number of nominations, but no less than 200,000 acres and no more than 
300,000 acres shall be offered. If the total acreage nominated is less 
than 200,000 acres, the Secretary shall include in such sale any other 
acreage which he believes has the highest resource potential, but in no 
event shall more than 300,000 acres be offered in such sale. With 
respect to subsequent lease sales, the Secretary shall offer for lease 
no less than 200,000 acres of the 1002 Area. The initial lease sale 
shall be held within 20 months of the date of enactment of this title. 
The second lease sale shall be held no later than 24 months after the 
initial sale, with additional sales conducted no later than 12 months 
thereafter so long as sufficient interest in development exists to 
warrant, in the Secretary's judgment, the conduct of such sales.

SEC. 507. GRANT OF LEASES BY THE SECRETARY.

    (a) In General.--The Secretary is authorized to grant to the 
highest responsible qualified bidder by sealed competitive cash bonus 
bid any lands to be leased on the 1002 Area upon payment by the lessee 
of such bonus as may be accepted by the Secretary and of such royalty 
as may be fixed in the lease, which shall be not less than 12\1/2\ per 
centum in amount or value of the production removed or sold from the 
lease.
    (b) Antitrust Review.--Following each notice of a proposed lease 
sale and before the acceptance of bids and the issuance of leases based 
on such bids, the Secretary shall allow the Attorney General, in 
consultation with the Federal Trade Commission, thirty days to perform 
an antitrust review of the results of such lease sale on the likely 
effects the issuance of such leases would have on competition and the 
Attorney General shall advise the Secretary with respect to such 
review, including any recommendation for the nonacceptance of any bid 
or the imposition of terms or conditions on any lease, as may be 
appropriate to prevent any situation inconsistent with the antitrust 
laws.
    (c) Subsequent Transfers.--No lease issued under this title may be 
sold, exchanged, assigned, sublet, or otherwise transferred except with 
the approval of the Secretary. Prior to any such approval the Secretary 
shall consult with, and give due consideration to the views of, the 
Attorney General.
    (d) Immunity.--Nothing in this title shall be deemed to convey to 
any person, association, corporation, or other business organization 
immunity from civil or criminal liability, or to create defenses to 
actions, under any antitrust law.
    (e) Definitions.--As used in this section, the term--
            (1) ``antitrust review'' shall be deemed an ``antitrust 
        investigation'' for the purposes of the Antitrust Civil Process 
        Act (15 U.S.C. 1311); and
            (2) ``antitrust laws'' means those Acts set forth in 
        section 1 of the Clayton Act (15 U.S.C. 12) as amended.

SEC. 508. LEASE TERMS AND CONDITIONS.

    An oil or gas lease issued pursuant to this title shall--
            (1) be for a tract consisting of a compact area not to 
        exceed 5,760 acres, or nine surveyed or protracted sections 
        which shall be as compact in form as possible;
            (2) be for an initial period of ten years and shall be 
        extended for so long thereafter as oil or gas is produced in 
        paying quantities from the lease or unit area to which the 
        lease is committed or for so long as drilling or reworking 
        operations, as approved by the Secretary, are conducted on the 
        lease or unit area;
            (3) require the payment of royalty as provided for in 
        section 507 of this title;
            (4) require that exploration activities pursuant to any 
        lease issued or maintained under this title shall be conducted 
        in accordance with an exploration plan or a revision of such 
        plan approved by the Secretary;
            (5) require that all development and production pursuant to 
        a lease issued or maintained pursuant to this title shall be 
        conducted in accordance with development and production plans 
        approved by the Secretary;
            (6) require posting of bond as required by section 509 of 
        this title;
            (7) provide that the Secretary may close, on a seasonal 
        basis, portions of the 1002 Area to exploratory drilling 
        activities as necessary to protect caribou calving areas and 
        other species of fish and wildlife;
            (8) contain such provisions relating to rental and other 
        fees as the Secretary may prescribe at the time of offering the 
        area for lease;
            (9) provide that the Secretary may direct or assent to the 
        suspension of operations and production under any lease granted 
        under the terms of this title in the interest of conservation 
        of the resource or where there is no available system to 
        transport the resource. If such a suspension is directed or 
        assented to by the Secretary, any payment of rental prescribed 
        by such lease shall be suspended during such period of 
        suspension of operations and production, and the term of the 
        lease shall be extended by adding any such suspension period 
        thereto;
            (10) provide that whenever the owner of a nonproducing 
        lease fails to comply with any of the provisions of this Act, 
        or of any applicable provision of Federal or State 
        environmental law, or of the lease, or of any regulation issued 
        under this title, such lease may be canceled by the Secretary 
        if such default continues for more than thirty days after 
        mailing of notice by registered letter to the lease owner at 
        the lease owner's post office address of record;
            (11) provide that whenever the owner of any producing lease 
        fails to comply with any of the provisions of this title, or of 
        any applicable provision of Federal or State environmental law, 
        or of the lease, or of any regulation issued under this title, 
        such lease may be forfeited and canceled by any appropriate 
        proceeding brought by the Secretary in any United States 
        district court having jurisdiction under the provisions of this 
        title;
            (12) provide that cancellation of a lease under this title 
        shall in no way release the owner of the lease from the 
        obligation to provide for reclamation of the lease site;
            (13) allow the lessee, at the discretion of the Secretary, 
        to make written relinquishment of all rights under any lease 
        issued pursuant to this title. The Secretary shall accept such 
        relinquishment by the lessee of any lease issued under this 
        title where there has not been surface disturbance on the lands 
        covered by the lease;
            (14) provide that for the purpose of conserving the natural 
        resources of any oil or gas pool, field, or like area, or any 
        part thereof, and in order to avoid the unnecessary duplication 
        of facilities, to protect the environment of the 1002 Area, and 
        to protect correlative rights, the Secretary shall require 
        that, to the greatest extent practicable, lessees unite with 
        each other in collectively adopting and operating under a 
        cooperative or unit plan of development for operation of such 
        pool, field, or like area, or any part thereof, and the 
        Secretary is also authorized and directed to enter into such 
        agreements as are necessary or appropriate for the protection 
        of the United States against drainage;
            (15) require that the holder of a lease or lands within the 
        1002 Area shall be fully responsible and liable for the 
        reclamation of those lands within and any other Federal lands 
        adversely affected in connection with exploration, development, 
        production or transportation activities on a lease within the 
        1002 Area by the holder of a lease or as a result of activities 
        conducted on the lease by any of the leaseholder's 
        subcontractors or agents;
            (16) provide that the holder of a lease may not delegate or 
        convey, by contract or otherwise, the reclamation 
        responsibility and liability to another party without the 
        express written approval of the Secretary;
            (17) provide that the standard of reclamation for lands 
        required to be reclaimed under this title be, as nearly as 
        practicable, a condition capable of supporting the uses which 
        the lands were capable of supporting prior to any exploration, 
        development, or production activities, or upon application by 
        the lessee, to a higher or better use as approved by the 
        Secretary;
            (18) contain the terms and conditions relating to 
        protection of fish and wildlife, their habitat, and the 
        environment, as required by section 503(a) of this title;
            (19) provide that the holder of a lease, its agents, and 
        contractors use best efforts to provide a fair share, as 
        determined by the level of obligation previously agreed to in 
        the 1974 agreement implementing Section 29 of the Federal 
        Agreement and Grant of Right of Way for the Operation of the 
        Trans-Alaska Pipeline, of employment and contracting for Alaska 
        Natives and Alaska Native Corporations from throughout the 
        State;
            (20) require project agreements to the extent feasible that 
        will ensure productivity and consistency recognizing a national 
        interest in both labor stability and the ability of 
        construction labor and management to meet the particular needs 
        and conditions of projects to be developed under leases issued 
        pursuant to this Act; and
            (21) contain such other provisions as the Secretary 
        determines necessary to ensure compliance with the provisions 
        of this title and the regulations issued under this title.

SEC. 509. BONDING REQUIREMENTS TO ENSURE FINANCIAL RESPONSIBILITY OF 
              LESSEE AND AVOID FEDERAL LIABILITY.

    (a) Requirement.--The Secretary shall, by rule or regulation, 
establish such standards as may be necessary to ensure that an adequate 
bond, surety, or other financial arrangement will be established prior 
to the commencement of surface disturbing activities on any lease, to 
ensure the complete and timely reclamation of the lease tract, and the 
restoration of any lands or surface waters adversely affected by lease 
operations after the abandonment or cessation of oil and gas operations 
on the lease. Such bond, surety, or financial arrangement is in 
addition to, and not in lieu, of any bond, surety, or financial 
arrangement required by any other regulatory authority or required by 
any other provision of law.
    (b) Amount.--The bond, surety, or financial arrangement shall be in 
an amount--
            (1) to be determined by the Secretary to provide for 
        reclamation of the lease site in accordance with an approved or 
        revised exploration or development and production plan; plus
            (2) set by the Secretary consistent with the type of 
        operations proposed, to provide the means for rapid and 
        effective cleanup, and to minimize damages resulting from an 
        oil spill, the escape of gas, refuse, domestic wastewater, 
        hazardous or toxic substances, or fire caused by oil and gas 
        activities.
    (c) Adjustment.--In the event that an approved exploration or 
development and production plan is revised, the Secretary may adjust 
the amount of the bond, surety, or other financial arrangement to 
conform to such modified plan.
    (d) Duration.--The responsibility and liability of the lessee and 
its surety under the bond, surety, or other financial arrangement shall 
continue until such time as the Secretary determines that there has 
been compliance with the terms and conditions of the lease and all 
applicable law.
    (e) Termination.--Within sixty days after determining that there 
has been compliance with the terms and conditions of the lease and all 
applicable laws, the Secretary, after consultation with affected 
Federal and State agencies, shall notify the lessee that the period of 
liability under the bond, surety, or other financial arrangement has 
been terminated.

SEC. 510. OIL AND GAS INFORMATION.

    (a) In General.--(1) Any lessee or permittee conducting any 
exploration for, or development or production of, oil or gas pursuant 
to this title shall provide the Secretary access to all data and 
information from any lease granted pursuant to this title (including 
processed and analyzed) obtained from such activity and shall provide 
copies of such data and information as the Secretary may request. Such 
data and information shall be provided in accordance with regulations 
which the Secretary shall prescribe.
    (2) If processed and analyzed information provided pursuant to 
paragraph (1) is provided in good faith by the lessee or permittee, 
such lessee or permittee shall not be responsible for any consequence 
of the use or of reliance upon such processed and analyzed information.
    (3) Whenever any data or information is provided to the Secretary, 
pursuant to paragraph (1)--
            (A) by a lessee or permittee, in the form and manner of 
        processing which is utilized by such lessee or permittee in the 
        normal conduct of business, the Secretary shall pay the 
        reasonable cost of reproducing such data and information; or
            (B) by a lessee or permittee, in such other form and manner 
        of processing as the Secretary may request, the Secretary shall 
        pay the reasonable cost of processing and reproducing such data 
        and information.
    (b) Regulations.--The Secretary shall prescribe regulations to--
            (1) assure that the confidentiality of privileged or 
        proprietary information received by the Secretary under this 
        section will be maintained; and
            (2) set forth the time periods and conditions which shall 
        be applicable to the release of such information.

SEC. 511. EXPEDITED JUDICIAL REVIEW.

    (a) Any complaint seeking judicial review of any provision in this 
title, or any other action of the Secretary under this title may be 
filed in any appropriate district court of the United States, and such 
complaint must be filed within ninety days from the date of the action 
being challenged, or after such date if such complaint is based solely 
on grounds arising after such ninetieth day, in which case the 
complaint must be filed within ninety days after the complainant knew 
or reasonably should have known of the grounds for the complaint: 
Provided, That any complaint seeking judicial review of an action of 
the Secretary in promulgating any regulation under this title may be 
filed only in the United States Court of Appeals for the District of 
Columbia.
    (b) Actions of the Secretary with respect to which review could 
have been obtained under this section shall not be subject to judicial 
review in any civil or criminal proceeding for enforcement.

 SEC. 512. RIGHTS-OF-WAY ACROSS THE 1002 AREA.

    Notwithstanding Title XI of the Alaska National Interest Lands 
Conservation Act of 1980 (16 U.S.C. 3161 et seq.), the Secretary is 
authorized and directed to grant, in accordance with the provisions of 
sections 28(c) through (t) and (v) through (y) of the Mineral Leasing 
Act of 1920 (30 U.S.C. 185), rights-of-way and easements across the 
1002 Area for the transportation of oil and gas under such terms and 
conditions as may be necessary so as not to result in a significant 
adverse effect on the fish and wildlife, subsistence resources, their 
habitat, and the environment of the 1002 Area. Such terms and 
conditions shall include requirements that facilities be sited or 
modified so as to avoid unnecessary duplication of roads and pipelines. 
The regulations issued as required by section 504 of this title shall 
include provisions granting rights-of-way and easements across the 1002 
Area.

 SEC. 513. ENFORCEMENT OF SAFETY AND ENVIRONMENTAL REGULATIONS TO 
              ENSURE COMPLIANCE WITH TERMS AND CONDITIONS OF LEASE.

    (a) Responsibility of the Secretary.--The Secretary shall 
diligently enforce all regulations, lease terms, conditions, 
restrictions, prohibitions, and stipulations promulgated pursuant to 
this title.
    (b) Responsibility of Holders of Lease.--It shall be the 
responsibility of any holder of a lease under this title to--
            (1) maintain all operations within such lease area in 
        compliance with regulations intended to protect persons and 
        property on, and fish and wildlife, their habitat, subsistence 
        resources, and the environment of, the 1002 Area; and
            (2) allow prompt access at the site of any operations 
        subject to regulation under this title to any appropriate 
        Federal or State inspector, and to provide such documents and 
        records which are pertinent to occupational or public health, 
        safety, or environmental protection, as may be requested.
    (c) On-Site Inspection.--The Secretary shall promulgate regulations 
to provide for--
            (1) scheduled onsite inspection by the Secretary, at least 
        twice a year, of each facility on the 1002 Area which is 
        subject to any environmental or safety regulation promulgated 
        pursuant to this title or conditions contained in any lease 
        issued pursuant to this title to assure compliance with such 
        environmental or safety regulations or conditions; and
            (2) periodic onsite inspection by the Secretary at least 
        once a year without advance notice to the operator of such 
        facility to assure compliance with all environmental or safety 
        regulations.

 SEC. 514. NEW REVENUES.

    (a) Deposit Into Treasury.--Notwithstanding any other provision of 
law, all revenues received by the Federal Government from competitive 
bids, sales, bonuses, royalties, rents, fees, or interest derived from 
the leasing of oil and gas within the 1002 Area shall be deposited into 
the Treasury of the United States, solely as provided in this section. 
The Secretary of the Treasury shall pay to the State of Alaska the same 
percentage of such revenues as is set forth under the heading 
``EXPLORATION OF NATIONAL PETROLEUM RESERVE IN ALASKA'' in Public Law 
96-514 (94 Stat. 2957, 2964) semiannually to the State of Alaska, on 
March 30 and September 30 of each year and shall deposit the balance of 
all such revenues as miscellaneous receipts in the Treasury. 
Notwithstanding any other provision of law, the Secretary of the 
Treasury shall monitor the total revenue deposited into the Treasury as 
miscellaneous receipts from oil and gas leases issued under the 
authority of this subtitle and shall deposit amounts received as bonus 
bids into a special fund established in the Treasury of the United 
States known as the Renewable Energy Research and Development Fund (in 
this section referred to as the ``Renewable Energy Fund'').
    (b) Use of Renewable Energy Fund.--Of the amounts in the Renewable 
Energy Fund, an amount equal to ten percent of the total deposits shall 
be made available to the Secretary of Energy, without further 
appropriation, at the beginning of each fiscal year in which amounts 
are available, and may be expended by the Secretary of Energy for 
research and development of renewable domestic energy resources of 
wind, solar, biomass, geothermal and hydroelectric. Such amounts shall 
remain available until expended and shall be in addition to funds 
appropriated in the preceding fiscal year to the Secretary of Energy 
for renewable energy research, development and demonstration programs 
authorized by section 103 of the Energy Reorganization Act of 1974 (42 
U.S.C. 5813). The Secretary of Energy shall develop procedures for the 
use of the Renewable Energy Fund that ensure accountability and 
demonstrated results. Beginning the first full fiscal year after 
deposits are made into the Renewable Energy Fund, the Secretary of 
Energy shall submit an annual report to the Committee on Energy and 
Natural Resources of the United States Senate and the appropriate 
committees of the United States House of Representatives detailing the 
use of any expenditures.

TITLE VI--ENERGY EFFICIENCY, CONSERVATION, AND ASSISTANCE TO LOW-INCOME 
                                FAMILIES

SEC. 601. EXTENSION OF LOW INCOME HOME ENERGY ASSISTANCE PROGRAM.

    (a) Authorization of Appropriations.--Section 2602(b) of the 
Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 8621), is amended 
by striking ``such sums as may be necessary for each of fiscal years 
2000 and 2001, and $2,000,000,000 for each of fiscal years 2002 through 
2004'' and inserting ``$3,000,000,000 for each of fiscal years 2000 
through 2010''.
    (b) Payments to States.--Section 2602(d)(2) of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 8621) is amended by striking 
``2004'' and inserting ``2010''.
    (c) Emergency Funds.--Section 2602(e) of the Omnibus Budget 
Reconciliation Act of 1981 (42 U.S.C. 8621), is amended by striking 
``$600,000,000'' and inserting ``$1,000,000,000''.

SEC. 602. ENERGY EFFICIENT SCHOOLS PROGRAM.

    (a) Establishment.--There is established in the Department of 
Energy the Energy Efficient Schools Program (hereafter in this section 
referred to as the ``Program'').
    (b) In General.--The Secretary of Energy may, through the Program, 
make grants to--
            (1) be provided to school districts to implement the 
        purpose of this section;
            (2) administer the program of assistance to school 
        districts pursuant to this section; and
            (3) promote participation by school districts in the 
        program established by this section.
    (c) Grants To Assist School Districts.--Grants under paragraph 
(b)(1) shall be used to achieve energy efficiency performance not less 
than 30 percent beyond the levels prescribed in the 1998 International 
Energy Conservation Code as it is in effect for new construction and 
existing buildings. Grants under such subsection shall be made to 
school districts that have--
            (1) demonstrated a need for such grants in order to respond 
        appropriately to increasing elementary and secondary school 
        enrollments or to make major investments in renovation of 
        school facilities;
            (2) demonstrated that the districts do not have adequate 
        funds to respond appropriately to such enrollments or achieve 
        such investments without assistance; and
            (3) made a commitment to use the grant funds to develop 
        energy efficient school buildings in accordance with the plan 
        developed and approved pursuant to paragraph (e)(1).
    (d) Other Grants.--
            (1) Grants for administration.--Grants under paragraph 
        (b)(2) shall be used to evaluate compliance by school districts 
        with the requirements of this section and in addition may be 
        used for--
                    (A) distributing information and materials to 
                clearly define and promote the development of energy 
                efficient school buildings for both new and existing 
                facilities;
                    (B) organizing and conducting programs for school 
                board members, school district personnel, architects, 
                engineers, and others to advance the concepts of energy 
                efficient school buildings;
                    (C) obtaining technical services and assistance in 
                planning and designing energy efficient school 
                buildings; and
                    (D) collecting and monitoring data and information 
                pertaining to the energy efficient school building 
                projects.
            (2) Grants to promote participation.--Grants under 
        paragraph (b)(3) may be used for promotional and marketing 
        activities, including facilitating private and public 
        financing, promoting the use of energy service companies, 
        working with school administrations, students, and communities, 
        and coordinating public benefit programs.
    (e) Implementation.--
            (1) Plans.--Grants under subsection (b) shall be provided 
        only to school districts that, in consultation with State 
        offices of energy and education, have developed plans that the 
        State energy office determines to be feasible and appropriate 
        in order to achieve the purposes for which such grants were 
        made.
            (2) Supplementing grant funds.--The State agency referred 
        to in paragraph (1) shall encourage qualifying school districts 
        to supplement their grant funds with funds from other sources 
        in the implementation of their plans.
    (f) Allocation of Funds.--
            (1) In general.--Except as provided in subsection (c), 
        funds appropriated for the implementation of this section shall 
        be provided to State energy offices to administer the program 
        of assistance to school districts under this section.
    (g) Purposes.--Except as provided in subsection (c), funds 
appropriated under this section shall be allocated as follows:
            (1) Seventy percent shall be used to make grants under 
        paragraph (b)(1).
            (2) Fifteen percent shall be used to make grants under 
        paragraph (b)(2).
            (3) Fifteen percent shall be used to make grants under 
        paragraph (b)(3).
    (h) Other Funds.--The Secretary of Energy may, through the Program 
established under subsection (a), retain an amount, not to exceed 
$300,000 per year, to assist State energy offices in coordinating and 
implementing such Program. Such funds may be used to develop reference 
materials to further define the principles and criteria to achieve 
energy efficient school buildings.
    (i) Authorization of Appropriations.--For this section, there are 
authorized to be appropriated $200,000,000 for each of fiscal years 
2002 through 2005, and such sums as may be necessary for each of fiscal 
years 2006 through 2011.
    (j) Definitions.--
            (1) Elementary and secondary school.--The terms 
        ``elementary school'' and ``secondary school'' shall have the 
        same meaning given such terms in paragraphs (14) and (25) of 
        section 14101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 8801(14), (25)).
            (2) Energy efficient school building.--The term ``energy 
        efficient school building'' refers to a school building which, 
        in its design, construction, operation, and maintenance 
        maximizes use of renewable energy and efficient energy 
        practices, is cost-effective on a life-cycle basis, uses 
        affordable, environmentally preferable, durable materials, 
        enhances indoor environmental quality, protests and conserves 
        water, and optimizes site potential.
            (3) Renewable energy.--The term ``renewable energy'' means 
        energy produced by solar, wind, geothermal, hydroelectric 
        power, and biomass power.

SEC. 603. AMENDMENTS TO WEATHERIZATION ASSISTANCE PROGRAM.

    (a) Eligibility.--Section 412 of the Energy Conservation and 
Production Act (42 U.S.C. 6862) is amended by--
            (1) in definition (7)(A), striking ``125'' and inserting 
        ``150'', and
            (2) in definition (7)(C), striking ``125'' and inserting 
        ``150''.
    (b) Authorization of Appropriations.--Section 422(a) of the Energy 
Conservation and Production Act (42 U.S.C. 6872) is amended by--
            (1) striking ``$200,000,000'' and inserting 
        ``$250,000,000'';
            (2) striking ``1991'' and inserting ``2002, $325,000,000 
        for fiscal year 2003, $400,000,000 for fiscal year 2004, 
        $500,000,000 for fiscal year 2005''; and
            (3) striking ``1992, 1993 and 1994'' and inserting ``for 
        each fiscal year thereafter''.

SEC. 604. AMENDMENTS TO STATE ENERGY PROGRAM.

    (a) State Energy Conservation Plans.--Section 362 of the Energy 
Policy and Conservation Act (42 U.S.C. 6322) is amended by--
            (1) redesignating subsection (f) as subsection (g), and
            (2) inserting after subsection (e) the following new 
        subsection (f)--
    ``(f) The Secretary shall, at least once every three years, invite 
the Governor of each State to review and, if necessary, revise the 
energy conservation plan of such State submitted under section 362 (b) 
or (e). Such reviews should consider the energy conservation plans of 
other States within the region, and identify opportunities and actions 
carried out in pursuit of common energy conservation goals.''.
    (b) State Energy Efficiency Goals.--Section 364 of the Energy 
Policy and Conservation Act (42 U.S.C. 6324) is amended by--
            (1) striking ``October 1, 1991'' and inserting ``January 1, 
        2001'',
            (2) striking ``10'' and inserting ``25'', and
            (3) striking ``2000'' and inserting ``2010''.
    (c) Authorization of Appropriations.--Section 365(f)(1) of the 
Energy Policy and Conservation Act (42 U.S.C. 6325) is amended by--
            (1) striking ``and'',
            (2) striking the period and inserting ``, $75,000,000 for 
        fiscal year 2002, $100,000,000 for fiscal years 2003 and 2004, 
        $125,000,000 for fiscal year 2005 and such sums as are 
        necessary for each fiscal year thereafter.''.

SEC. 605. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO FEDERAL 
              ENERGY SAVINGS PERFORMANCE CONTRACTS.

    (a) Energy Savings Through Construction of Replacement 
Facilities.--Section 804 of the National Energy Conservation Policy Act 
(42 U.S.C. 8287c) is amended--
            (1) in paragraph (2)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively;
                    (B) by inserting ``(A)'' after ``(2)''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) The term `energy savings' also means a 
                reduction in the cost of energy, from such a base cost 
                established through a methodology set forth in the 
                contract, that would otherwise be utilized in one or 
                more existing federally owned buildings or other 
                federally owned facilities by reason of the 
                construction and operation of one or more new buildings 
                or facilities.''; and
            (2) in paragraph (3), by inserting after the first sentence 
        the following new sentence: ``The terms also means a contract 
        that provides for energy savings through the construction and/
        or operation of one or more new buildings or facilities.''.
    (b) Cost Savings From Operation and Maintenance Efficiencies in 
Replacement Facilities.--Section 801(a) of the National Energy 
Conservation Policy Act (42 U.S.C. 8287(a)) is amended by adding at the 
end of the following new paragraph:
            ``(3)(A) in the case of an energy savings contract or 
        energy savings performance contract providing for energy 
        savings through the construction and operation of one or more 
        buildings or facilities to replace one or more existing 
        buildings or facilities, benefits ancillary to the purpose of 
        such contract under paragraph (1) may include savings resulting 
        from reduced costs of operation and maintenance at new and/or 
        additional buildings or facilities, from a base cost of 
        operation and maintenance established through a methodology set 
        forth in the contract.
            ``(B) Notwithstanding paragraph (2)(B), aggregate annual 
        payments by an agency under an energy savings contract or 
        energy savings performance contract referred to in subparagraph 
        (A) may take into account (through the procedures developed 
        pursuant to this section) savings resulting from reduced costs 
        of operation and maintenance as described in that 
        subparagraph.''.
    (c) Five-Year Extension of Authority.--Section 801(c) of the 
National Energy Conservation Policy Act (42 U.S.C. 8287(c)) is amended 
by striking ``October 1, 2003'' and inserting ``October 1, 2008''.
    (d) Utility Incentive Programs.--Section 546 of the National Energy 
Conservation Policy Act (42 U.S.C. 8256(c)) is amended by--
            (1) in paragraph (3) by adding at the end the following two 
        new sentences: ``Such a utility incentive program may include a 
        contract or contract term designed to provide for cost-
        effective electricity demand management, energy efficiency, 
        and/or water conservation. Notwithstanding section 201(a)(3) of 
        63 Stat. 383 (40 U.S.C. 481(a)(3)), such contracts or contract 
        terms may be made for periods not exceeding 25 years.''.
            (2) by adding at the end of the following new paragraph:
            ``(6) A utility incentive program may include a contract or 
        contract term for a reduction in the energy, from a base cost 
        established through a methodology set forth in such a contract, 
        that would otherwise be utilized in one or more federally owned 
        buildings or other federally owned facilities by reason of the 
        construction and/or operation of one or more buildings or 
        facilities, as well as benefits ancillary to the purpose of 
        such contract or contract term, including savings resulting 
        from reduced costs of operation and maintenance at new and/or 
        additional buildings or facilities when compared with the costs 
of operation and maintenance at existing buildings or facilities.''.

SEC. 606. FEDERAL ENERGY EFFICIENCY REQUIREMENT.

    (a) In General.--Through cost-effective measures, each agency shall 
reduce energy consumption per gross square foot of its facilities by 30 
percent by 2010 and 50 percent by 2020 relative to 1990.
    (b) Implementation Plan.--Not later than one year after date of 
enactment of this section, each agency shall develop and submit to 
Congress and the President an implementation plan for fulfilling the 
requirements of this section.
    (c) Annual Report.--
            (1) In general.--Each agency shall measure and report 
        annually to Congress and the President its progress in meeting 
        the requirements of this section.
            (2) Guidelines.--The Secretary of Energy, in consultation 
        with the Administrator of the Energy Information 
        Administration, shall develop and issue guidelines for 
        agencies' preparation of their annual report, including 
        guidance on how to measure energy consumption in Federal 
        facilities.
    (d) Exemption of Certain Facilities.--A facility may be deemed 
exempt when the Secretary determines that compliance with the Energy 
Policy Act of 1992 is not practical for that particular facility. No 
later than one year from date of enactment, the Secretary shall, in 
consultation with the Administrator of the Energy Information 
Administration, set guidelines for agencies to use in excluding certain 
kinds of facilities to meet the requirements of this section.
    (e) Applicability.--The Department of Defense (DOD) is subject to 
this order only to the extent that it does not impair or adversely 
affect military operations and training (including tactical aircraft, 
ships, weapons systems, combat training, and border security).
    (f) Definitions.--For the purposes of this section--
            (1) ``agency'' means an executive agency as defined in 5 
        U.S.C. 105. Military departments, as defined in 5 U.S.C. 102, 
        are covered under the auspices of the Department of Defense.
            (2) ``facility'' means any individual building or 
        collection of buildings, grounds, or structure, as well as any 
        fixture or part thereof, including the associated energy or 
        water-consuming support systems, which is constructed, 
        renovated, or purchased in whole or in part for use by the 
        Federal Government. It includes leased facilities where the 
        Federal Government has a purchase option or facilities planned 
        for purchase. In any provision of this order, the term 
        ``facility'' also includes any building 100 percent leased for 
        use by the Federal Government where the Federal Government pays 
        directly or indirectly for the utility costs associated with 
        its leased space, and Government-owned contractor-operated 
        facilities.

SEC. 607. ENERGY EFFICIENCY SCIENCE INITIATIVE.

    There are authorized to be appropriated $25,000,000 for fiscal year 
2001 and such sums as are necessary for each fiscal year thereafter, 
but not to exceed $50,000,000 in any fiscal year, for an Energy 
Efficiency Science Initiative to be managed by the Assistant Secretary 
for Energy Efficiency and Renewable Energy 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. 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.

           TITLE VII--ALTERNATIVE FUELS AND RENEWABLE ENERGY

                     Subtitle A--Alternative Fuels

SEC. 701. EXCEPTION TO HOV PASSENGER REQUIREMENTS FOR ALTERNATIVE FUEL 
              VEHICLES.

    Section 102(a) of title 23, United States Code, is amended by 
inserting ``(unless, at the discretion of the State highway department, 
the vehicle operates on, or is fueled by, an alternative fuel (as 
defined in section 301 of Public Law 102-486 (42 U.S.C. 13211(2))))'' 
after ``required''.

SEC. 702. ALTERNATIVE FUEL VEHICLE CREDITS FOR INSTALLATION OF 
              QUALIFYING INFRASTRUCTURE.

    Section 508 of the Energy Policy Act of 1992 (42 U.S.C. 13258) is 
amended by adding the following at the end:
    ``(e) Credit for Acquisition or Installation of Qualifying 
Infrastructure.--The Secretary shall allocate an infrastructure credit 
to a fleet or covered person that is required to acquire an alternative 
fueled vehicle under this title, or to a Federal fleet as defined by 
section 303(b)(3) of Title III of this Act, for the acquisition or 
installation of the fuel or the needed infrastructure, including the 
supply and delivery systems, necessary to operate or maintain the 
alternative fueled vehicle. Such necessary infrastructure shall 
include, but is not limited to, the following--
            ``(1) equipment required to refuel or recharge the 
        alternative fueled vehicle;
            ``(2) facilities or equipment required to maintain, repair 
        or operate the alternative fueled vehicle;
            ``(3) training programs, educational materials or other 
        activities necessary to provide information regarding the 
        operation, maintenance or benefits associated with the 
        alternative fueled vehicle; and
            ``(4) such other activity as the Secretary deems an 
        appropriate expenditure in support of the operation, 
        maintenance or further wide spread adoption or utilization of 
        the alternative fueled vehicle.
    ``(f) Qualifying Infrastructure Credit.--The term `infrastructure 
credit' shall mean--
            ``(1) that equipment or activity defined in subsection (e) 
        above; and
            ``(2) be equivalent in cost to the acquisition of an 
        alternative fueled vehicle for which the expenditure on the 
        infrastructure is made.
    ``(g) Limitation on Number of Infrastructure Credits Issued.--Each 
fleet or covered person that is required to acquire an alternative 
fueled vehicle under this title, or each Federal fleet as defined by 
section 303(b)(3) of Title III of this Act, shall be limited in the 
number of infrastructure credits that may be acquired and used to meet 
the alternative fueled vehicle requirements of this Act to no more than 
the equivalent of one half of the alternative fueled vehicles required 
per annum.''.

SEC. 703. STATE AND LOCAL GOVERNMENT USE OF FEDERAL ALTERNATIVE FUEL 
              REFUELING FACILITIES.

    Section 304 of the Energy Policy Act of 1992 (42 U.S.C. 13213) is 
amended by adding the following at the end:
    ``(c) State and Local Government-Owned Vehicles.--Federal agencies 
may include any alternative fuel vehicles owned by States or local 
governments in any commercial arrangements for the purpose of fueling 
Federal alternative fueled vehicles as authorized under subsection (a) 
of this section. The Secretary may allocate equivalent infrastructure 
credits to a Federal fleet as defined by section 303(b)(3) of Title III 
of this Act, for the inclusion of such vehicles in any such commercial 
fueling arrangements.''.

SEC. 704. FEDERAL FLEET FUEL ECONOMY AND USE OF ALTERNATIVE FUELS.

    ``(a) Fuel Economy.--Through cost-effective measures, each agency 
shall increase the average EPA fuel economy rating of passenger cars an 
light trucks acquired by at least 3 miles per gallon (mpg) by the end 
of fiscal year 2005 compared to acquisitions in fiscal year 2000.
    ``(b) Use of Alternative Fuels.--Through cost-effective measures, 
each agency shall, by the end of fiscal year 2005, use alternative 
fuels for at least 50 percent of the total annual volume of fuel used 
by the agency. No more than 25 percent of fuel purchased by State and 
local governments at federally-owned refueling facilities as described 
under section 403 may be included by an agency in meeting the 
requirement of this section.
    ``(c) Implementation Plan.--No later than one year after date of 
enactment of this section, each agency shall develop and submit to 
Congress and the President an implementation plan for fulfilling the 
requirements of this section. Each agency should develop an 
implementation plan that meets its unique fleet configuration and fleet 
requirements.
    ``(d) Annual Report.--
            ``(1) In general.--Each agency shall measure and report 
        annually to Congress and the President its progress in meeting 
        the requirements of this section.
            ``(2) Guidelines.--The Secretary of Energy, through the 
        Federal Energy Management Program and in consultation with the 
        Administrator of the Energy Information Administration, shall 
        develop and issue guidelines for agencies' preparation of their 
        annual report, including guidance on how to measure fuel 
        economy for the collection and annual reporting of data to 
        demonstrate compliance with the requirements of this section.
    ``(e) Applicability.--This order applies to each Federal agency 
operating 20 or more motor vehicles within the United States.
    ``(f) Exemption of Certain Vehicles.--Department of Defense 
military tactical vehicles are exempt from this order. Law enforcement, 
emergency, and any other vehicle class or type determined by the 
Secretary, in consultation with the Federal Energy Management Program, 
are exempted from the requirements of this section. No later than one 
year from date of enactment, the Secretary shall, in consultation with 
the Federal Energy Management Program, set guidelines for agencies to 
use in the determination of exemptions.
    ``(g) Definitions.--For the purposes of this section--
            (a) ``agency'' means an executive agency as defined in 5 
        U.S.C. 105. Military departments, as defined, in 5 U.S.C. 102, 
        are covered under the auspices of the Department of Defense, 
        and
            (2) ``alternative fuel'' means any fuel defined as an 
        alternative fuel pursuant to section 301 of the Energy Policy 
        Act of 1992 (P.L. 102-486).
    ``(h) Conforming Amendments.--Section 400AA of the Energy Policy 
and Conservation Act (42 U.S.C. 6374) is amended as follows--
            (1) in subsection (a)(3)(E), insert the following sentence 
        at the end, ``Except that, no later than fiscal year 2005 at 
        least 50 percent of the total annual volume of fuel used must 
        be from alternative fuels.''; and
            (2) in subsection (g)(4)(B), after the words, ``solely on 
        alternative fuel'', insert the words ``, including a three 
        wheeled enclosed electric vehicle having a VIN number''.

SEC. 705. LOCAL GOVERNMENT GRANT PROGRAM.

    ``(a) Establishment.--Within one year of date of enactment of this 
section, the Secretary of Energy shall establish a program for making 
grants to local governments for covering the incremental cost of 
qualified alternative fuel motor vehicles.
    ``(b) Criteria.--In deciding to whom grants shall be made under 
this subsection, the Secretary of Energy shall consider the goal of 
assisting the greatest number of applicants, provided that no grant 
award shall exceed $1,000,000.
    ``(c) Priorities.--Priority shall be given under this section to 
those local government fleets where the use of alternative fuels would 
have a significant beneficial effect on energy security and the 
environment.
    ``(d) Qualified Alternative Fuel Motor Vehicle Defined.--For 
purposes of this section, the term ``qualified motor vehicle'' means 
any motor vehicle which is capable of operating only on an alternative 
fuel.
    ``(e) Incremental Cost.--For purposes of this section, the 
incremental cost of any 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 
motor vehicle of the same model.
    ``(f) Authorization of Appropriations.--For the purposes of this 
section, there are authorized to be appropriated $100,000,000 annually 
for each of the fiscal years 2002 through 2006.

                      Subtitle B--Renewable Energy

SEC. 710. RESIDENTIAL RENEWABLE ENERGY GRANT PROGRAM.

    (a) In General.--The Secretary of Energy shall develop and 
implement a grant program to offset a portion of the total cost of 
certain eligible residential renewable energy systems.
    (b) Eligibility.--Grants may be awarded for any of the following--
            (1) new installation of an eligible residential renewable 
        energy system for an existing dwelling unit,
            (2) purchase of an existing dwelling unit with an eligible 
        residential renewable energy system that was installed prior to 
        the date of enactment of this section,
            (3) addition to or augmentation of an existing eligible 
        residential renewable energy system installed on a dwelling 
        unit prior to the date of enactment of this section, provided 
        that any such addition or augmentation results in additional 
        electricity, heat, or other useful energy, or
            (4) construction of a new home or rental property which 
        includes an eligible residential renewable energy system.
    (c) Total Cost.--
            (1) In general.--For purposes of this section, ``total 
        cost'' means expenditure of funds for the following--
                    (A) any equipment whose primary purpose is to 
                provide for the collection, conversion, transfer, 
                distribution, storage or control of electricity or heat 
                generated from renewable energy,
                    (B) installation charges,
                    (C) labor costs properly allocable to the onsite 
                preparation, assembly, or original installation of the 
                system, and
                    (D) piping or wiring to interconnect such system to 
                the dwelling unit.
            (2) Leased systems.--In the case of a system that is 
        leased, ``total cost'' means the principal recovery portion of 
        all lease payments scheduled to be made during the full term of 
        the lease, excluding interest charges and maintenance expenses.
            (3) Existing systems.--In the case of an addition to or 
        augmentation of an existing system, ``total cost'' shall 
        include only those expenditures related to the incremental cost 
        of the addition or augmentation, and not the full cost of the 
        system.
    (d) Cost Buy-Down.--Grants provided under this section shall not 
exceed $3,000 per eligible residential renewable energy system, and 
shall be limited further as follows:
            (1) For fiscal years 2002 and 2003, grants provided under 
        this section shall be limited to the smaller of--
                    (A) 50 percent of the total cost of the energy 
                system, or
                    (B) $3.00 per watt of system electricity output or 
                equivalent.
            (2) For fiscal years 2004 and 2005, grants provided under 
        this section shall be limited to the smaller of--
                    (A) 40 percent of the total cost of the energy 
                system, or
                    (B) $2.50 per watt of system electricity output.
            (3) For fiscal years 2006 and 2007, grants provided under 
        this section shall be limited to the smaller of--
                    (A) 30 percent of the total cost of the energy 
                system, or
                    (B) $2.00 per watt of system electricity output.
            (4) For fiscal years 2008 and 2009, grants provided under 
        this section shall be limited to the smaller of--
                    (A) 20 percent of the total cost of the energy 
                system, or
                    (B) $1.50 per watt of system electricity output.
            (5) For fiscal years 2010 and 2011, grants provided under 
        this section shall be limited to the smaller of--
                    (A) 10 percent of the total cost of the energy 
                system, or
                    (B) $1.00 per watt of system electricity output.
    (e) Limitations.--No grant shall be allowed under this section for 
an eligible residential renewable energy system unless--
            (1) such expenditure is made for property installed on or 
        in connection with a dwelling unit which is located in the 
        United States and which is used as a residence,
            (2) in the case of solar water heating equipment, such 
        equipment is certified for performance and safety by the 
        nonprofit Solar Rating Certification Corporation or a 
        comparable entity endorsed by the government of the State in 
        which such property is installed, and
            (3) such system meets appropriate fire and electric code 
        requirements.
    (f) Definitions.--For purposes of this section--
            (1) Renewable energy system.--The term ``renewable energy 
        system'' means property that uses any of the following 
        renewable energy forms to create electricity, heat, or other 
        forms of useful energy--
                    (A) solar thermal,
                    (B) solar photovoltaic,
                    (C) wind,
                    (D) biomass,
                    (E) hydroelectric, or
                    (F) geothermal.
            (2) 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) 
        solely because it constitutes a structural component of the 
        structure on which it is installed.
            (3) Energy 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.
    (g) Special Rules.--For purposes of this section--
            (1) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in 26 U.S.C. 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 26 U.S.C. 
        216(b)(3)) of any expenditures of such corporation.
            (2) Condominiums.--
                    (A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which he owns, such 
                individual shall be treated as having made his 
                proportionate share of any expenditures of such 
                association.
                    (B) Condominium management association.--For 
                purposes of this paragraph, the term ``condominium 
                management association'' means an organization which 
                meets the requirements of paragraph (1) of 26 U.S.C. 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            (3) Renewable energy systems for multiple dwellings.--
                    (A) In general.--Any expenditure otherwise 
                qualifying as an expenditure described in paragraph (1) 
                of subsection (c) shall not be treated as failing to so 
                qualify merely because such expenditure was made with 
                respect to 2 or more dwelling units.
                    (B) Limits applied separately.--In the case of any 
                expenditure described in subparagraph (A), the amount 
                of the grant available under subsection (d) shall be 
                computed separately with respect to the amount of the 
                expenditure made for each dwelling unit.
    (h) Annual Report.--The Secretary shall submit to Congress and the 
President an annual report on grants distributed pursuant to this 
section. The report shall include, at minimum, the following--
            (1) a summary of the eligible residential renewable energy 
        systems receiving grants in the year just concluded,
            (2) an estimate of new renewable energy generation 
        installed as a result of grants awarded, and its distribution 
        by renewable energy source and geographic location,
            (3) evidence that the program is contributing to declining 
        costs for renewable energy technologies, and
            (4) description of the methods used to award such grants.
    (i) Authorization of Appropriations.--For the purposes of this 
section, there are authorized to be appropriated $30,000,000 for fiscal 
year 2002 and such sums as are necessary for each fiscal year 
thereafter, but not to exceed $150,000,000 in any fiscal year.

SEC. 711. ASSESSMENT OF RENEWABLE ENERGY RESOURCES

    (a) In General.--No later than twelve months after the date of 
enactment of this section, the Secretary of Energy shall submit to the 
Congress an assessment of all renewable energy resources available 
within the United States.
    (b) Resource Assessment.--Such report shall include a detailed 
inventory describing the available amount and characteristics of solar, 
wind, biomass, geothermal, hydroelectric and other renewable energy 
sources, and an estimate of the costs needed to develop each resource. 
The report shall also include such other information as the Secretary 
of Energy believes would be useful in siting renewable energy 
generation, such as appropriate terrain, population and load centers, 
nearby energy infrastructure, and location of energy and water 
resources.
    (c) Availability.--The information and cost estimates in this 
report shall be updated annually and made available to the public, 
along with the data used to create the report.
    (d) Authorization of Appropriations.--For the purposes of carrying 
out this section, there are authorized to be appropriated $10,000,000 
for fiscal years 2002 through 2006.

               Subtitle C--Hydroelectric Licensing Reform

SEC. 721. SHORT TITLE.

    This Act may be cited as the ``Hydroelectric Licensing Process 
Improvement Act of 2001''.

SEC. 722. FINDINGS.

    Congress finds that--
            (1) hydroelectric power is an irreplaceable source of 
        clean, economic, renewable energy with the unique capability of 
        supporting reliable electric service while maintaining 
        environmental quality;
            (2) hydroelectric power is the leading renewable energy 
        resource of the United States;
            (3) hydroelectric power projects provide multiple benefits 
        to the United States, including recreation, irrigation, flood 
        control, water supply, and fish and wildlife benefits;
            (4) in the next 15 years, the bulk of all non-Federal 
        hydroelectric power capacity in the United States is due to be 
        relicensed by the Federal Energy Regulatory Commission;
            (5) the process of licensing hydroelectric projects by the 
        Commission--
                    (A) does not produce optimal decisions, because the 
                agencies that participate in the process are not 
                required to consider the full effects of their 
                mandatory and recommended conditions on a license;
                    (B) is inefficient, in part because agencies do not 
                always submit their mandatory and recommended 
                conditions by a time certain;
                    (C) is burdened by uncoordinated environmental 
                reviews and duplicative permitting authority; and
                    (D) is burdensome for all participants and too 
                often results in litigation; and
            (6) while the alternative licensing procedures available to 
        applicants for hydroelectric project licenses provide important 
        opportunities for the collaborative resolution of many of the 
        issues in hydroelectric project licensing, those procedures are 
        not appropriate in every case and cannot substitute for 
        statutory reforms of the hydroelectric licensing process.

SEC. 723. PURPOSE.

    The purpose of this Act is to achieve the objective or relicensing 
hydroelectric power projects to maintain high environmental standards 
while preserving low cost power by--
            (1) requiring agencies to consider the full effects of 
        their mandatory and recommended conditions on a hydroelectric 
        power license and to document that consideration of a broad 
        range of factors;
            (2) requiring the Federal Energy Regulatory Commission to 
        impose deadlines by which Federal agencies must submit proposed 
        mandatory and recommended conditions to a license; and
            (3) making other improvements in the licensing process.

SEC. 724. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF CONDITIONS 
              TO LICENSES.

    (a) In General.--Part I of the Federal Power Act (16 U.S.C. 791a et 
seq.) is amended by adding at the end the following:

``SEC. 32. PROCESS FOR CONSIDERATION BY FEDERAL AGENCIES OF CONDITIONS 
              TO LICENSES.

    ``(a) Definitions.--In this section:
            ``(1) Condition.--The term `condition' means--
                    ``(A) a condition to a license for a project on a 
                Federal reservation determined by a consulting agency 
                for the purpose of the first proviso of section 4(e); 
                and
                    ``(B) a prescription relating to the construction, 
                maintenance, or operation of a fishway determined by a 
                consulting agency for the purpose of the first sentence 
                of section 18.
            ``(2) Consulting agency.--The term `consulting agency' 
        means--
                    ``(A) in relation to a condition described in 
                paragraph (1)(A), the Federal agency with 
                responsibility for supervising the reservation; and
                    ``(B) in relation to a condition described in 
                paragraph (1)(B), the Secretary of the Interior or the 
                Secretary of Commerce, as appropriate.
    ``(b) Factors To Be Considered.--
            ``(1) In general.--In determining a condition, a consulting 
        agency shall take into consideration--
                    ``(A) the impacts of the condition on--
                            ``(i) economic and power values;
                            ``(ii) electric generation capacity and 
                        system reliability;
                            ``(iii) air quality (including 
                        consideration of the impacts on greenhouse gas 
                        emissions); and
                            ``(iv) drinking, flood control, irrigation, 
                        navigation, or recreation water supply;
                    ``(B) compatibility with other conditions to be 
                included in the license, including mandatory conditions 
                of other agencies, when available; and
                    ``(C) means to ensure that the condition addresses 
                only direct project environmental impacts, and does so 
                at the lowest project costs.
            ``(2) Documentation.--
                    ``(A) In general.--In the course of the 
                consideration of factors under paragraph (1) and before 
                any review under subsection (e), a consulting agency 
                shall create written documentation detailing, among 
                other pertinent matters, all proposals made, comments 
                received, facts considered, and analyses made regarding 
                each of those factors sufficient to demonstrate that 
                each of the factors was given full consideration in 
                determining the condition to be submitted to the 
                Commission.
                    ``(B) Submission to the commission.--A consulting 
                agency shall include the documentation under 
                subparagraph (A) in its submission of a condition to 
                the Commission.
    ``(c) Scientific Review.--
            ``(1) In general.--Each condition determined by a 
        consulting agency shall be subjected to appropriately 
        substantiated scientific review.
            ``(2) Data.--For the purpose of paragraph (1), a condition 
        shall be considered to have been subjected to appropriately 
        substantiated scientific review if the review--
                    ``(A) was based on current empirical data or field-
                tested data; and
                    ``(B) was subjected to peer review.
    ``(d) Relationship to Impacts on Federal Reservation.--In the case 
of a condition for the purpose of the first proviso of section 4(e), 
each condition determined by a consulting agency shall be directly and 
reasonably related to the impacts of the project within the Federal 
reservation.
    ``(e) Administation Review.--
            ``(1) Opportunity for review.--Before submitting to the 
        Commission a proposed condition, and at least 90 days before a 
        license applicant is required to file a license application 
        with the Commission, a consulting agency shall provide the 
        proposed condition to the license applicant and offer the 
        license applicant an opportunity to obtain expedited review 
        before an administrative law judge or other independent 
        reviewing body of--
                    ``(A) the reasonableness of the proposed condition 
                in light of the effect that implementation of the 
                condition will have on the energy and economic values 
                of a project; and
                    ``(B) compliance by the consulting agency with the 
                requirements of this section, including the requirement 
                to consider the factors described in subsection (b)(1).
            ``(2) Completion of review.--
                    ``(A) In general.--A review under paragraph (1) 
                shall be completed not more than 180 days after the 
                license applicant notifies the consulting agency of the 
                request for review.
                    ``(B) Failure to make timely completion of 
                review.--If review of a proposed condition is not 
                completed within the time specified by subparagraph 
                (A), the Commission may treat a condition submitted by 
                the consulting agency as a recommendation is treated 
                under section 10(j).
            ``(3) Remand.--If the administrative law judge or reviewing 
        body finds that a proposed condition is unreasonable or that 
        the consulting agency failed to comply with any of the 
        requirements of this section, the administrative law judge or 
        reviewing body shall--
                    ``(A) render a decision that--
                            ``(i) explains the reasons for a finding 
                        that the condition is unreasonable and may make 
                        recommendations that the administrative law 
                        judge or reviewing body may have for the 
                        formulation of a condition that would not be 
                        found unreasonable; or
                            ``(ii) explains the reasons for a finding 
                        that a requirement was not met and may describe 
                        any action that the consulting agency should 
                        take to meet the requirement; and
                    ``(B) remand the matter to the consulting agency 
                for further action.
            ``(4) Submission to the commission.--Following 
        administrative review under this subsection, a consulting 
        agency shall--
                    ``(A) take such action as is necessary to--
                            ``(i) withdraw the condition;
                            ``(ii) formulate a condition that folllows 
                        the recommendation of the administrative law 
                        judge or reviewing body; or
                            ``(iii) otherwise comply with this section; 
                        and
                    ``(B) include with its submission to the Commission 
                of a proposed condition--
                            ``(i) the record on administrative review; 
                        and
                            ``(ii) documentation of any action taken 
                        following administrative review.
    ``(f) Submission of Final Condition.--
            ``(1) In general.--After an applicant files with the 
        Commission an application for a license, the Commission shall 
        set a date by which a consulting agency shall submit to the 
        Commission a final condition.
            ``(2) Limitation.--Except as provided in paragraph (3), the 
        date for submission of a final condition shall be not later 
        than 1 year after the date on which the Commisison gives the 
        consulting agency notice that a license application is ready 
        for environmental review.
            ``(3) Default.--If a consulting agency does not submit a 
        final condition to a license by the date set under paragraph 
        (1)--
                    ``(A) the consulting agency shall not thereafter 
                have authority to recommend or establish a condition to 
                the license; and
                    ``(B) the Commission may, but shall not be required 
                to, recommend or establish an appropriate condition to 
                the license that--
                            ``(i) furthers the interest sought to be 
                        protected by the provision of law that 
                        authorizes the consulting agency to propose or 
                        establish a condition to the license; and
                            ``(ii) conforms to the requirements of this 
                        Act.
            ``(4) Extension.--The Commission may make 1 extension, of 
        not more than 30 days, of a deadline set under paragraph (1).
    ``(g) Analysis by the Commission.--
            ``(1) Economic analysis.--The Commission shall conduct an 
        economic analysis of each condition submitted by a consulting 
        agency to determine whether the condition would render the 
        project uneconomic.
            ``(2) Consistency with this section.--In exercising 
        authority under section 10(j)(2), the Commission shall consider 
        whether any recommendation submitted under section 10(j)(1) is 
        consistent with the purposes and requirements of subsections 
        (b) and (c) of this section.
    ``(h) Commission Determination on Effect of Conditions.--When 
requested by a license applicant in a request for rehearing, the 
Commission shall make a written determination on whether a condition 
submitted by a consulting agency--
            ``(1) is in the public interest, as measured by the impact 
        of the condition on the factors described in subsection (b)(1);
            ``(2) was subjected to scientific review in accordance with 
        subsection (c);
            ``(3) relates to direct project impacts within the 
        reservation, in the case of a condition for the first proviso 
        of section 4(e);
            ``(4) is reasonable;
            ``(5) is supported by substantial evidence; and
            ``(6) is consistent with this Act and other terms and 
        conditions to be included in the license.''.
    (b) Conforming and Technical Amendments.--
            (1) Section 4.--Section 4(e) of the Federal Power Act (16 
        U.S.C. 797(e)) is amended--
                    (A) in the first proviso of the first sentence by 
                inserting after ``conditions'' the following: ``, 
                determined in accordance with section 32,''; and
                    (B) in the last sentence, by striking the period 
                and inserting ``(including consideration of the impacts 
                on greenhouse gas emissions)''.
            (2) Section 18.--Section 18 of the Federal Power Act (16 
        U.S.C. 811) is amended in the first sentence by striking 
        ``prescribed by the Secretary of Commerce'' and inserting 
        ``prescribed, in accordance with section 32, by the Secretary 
        of the Interior or the Secretary of Commerce, as appropriate''.

SEC. 725. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

     Part I of the Federal Power Act (16 U.S.C. 791a et seq.) (as 
amended by section 4) is amended by adding at the end the following:

``SEC. 33. COORDINATED ENVIRONMENTAL REVIEW PROCESS.

    ``(a) Lead Agency Responsibility.--The Commission, as the lead 
agency for environmental reviews under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.) for projects licensed under 
this part, shall conduct a single consolidated environmental review--
            ``(1) for each such project; or
            ``(2) if appropriate, for multiple projects located in the 
        same area.
    ``(b) Consulting Agencies.--In connection with the formulation of a 
condition in accordance with section 32, a consulting agency shall not 
perform any environmental review in addition to any environmental 
review performed by the Commission in connection with the action to 
which the condition relates.
    ``(c) Deadlines.--
            ``(1) In general.--The Commission shall set a deadline for 
        the submission of comments by Federal, State, and local 
        government agencies in connection with the preparation of any 
        environmental impact statement or environmental assessment 
        required for a project.
            ``(2) Considerations.--In setting a deadline under 
        paragraph (1), the Commission shall take into consideration--
                    ``(A) the need of the license applicant for a 
                prompt and reasonable decision;
                    ``(B) the resources of interested Federal, State, 
                and local government agencies; and
                    ``(C) applicable statutory requirements.''.

SEC. 726. STUDY OF SMALL HYDROELECTRIC PROJECTS.

    (a) In General.--Not later than 18 months after the date of 
enactment of this Act, the Federal Energy Regulatory Commission shall 
submit to the Committee on Energy and Natural Resources of the Senate 
and the Committee on Commerce of the House of Representatives a study 
of the feasibility of establishing a separate licensing procedure for 
small hydroelectric projects.
    (b) Defintion of Small Hydroelectric Project.--The Commission may 
by regulation define the term ``small hydroelectric project'' for the 
purpose of subsection (a), except that the term shall include at a 
minimum a hydroelectric project that has a generating capacity of 5 
megawatts or less.

  TITLE VIII--ELECTRIC SUPPLY RELIABILITY; PURPA REPEAL; PUHCA REPEAL

          Subtitle A--Electric Energy Transmission Reliability

SEC. 801. SHORT TITLE.

     This Subtitle may be cited as the ``National Electric Reliability 
Act''.

SEC. 802. ELECTRIC ENERGY TRANSMISSION RELIABILITY.

    (a) Electric Reliability Organization and Oversight.--
            (1) In general.--The Federal Power Act is amended by adding 
        the following new section after section 214:

``SEC. 215. ELECTRIC RELIABILITY ORGANIZATION AND OVERSIGHT.

    ``(a) Definitions.--As used in this section:
            ``(1) Affiliated regional reliability entity.--The term 
        `affiliated regional reliability entity' means an entity 
        delegated authority under the provisions of subsection (h).
            ``(2) Bulk power system.--The term `bulk power system' 
        means all facilities and control systems necessary for 
        operating an interconnected transmission grid (or any portion 
        thereof), including high-voltage transmission lines; 
        substations; control centers; communications; data, and 
        operations planning facilities; and the output of generating 
        units necessary to maintain transmission system reliability.
            ``(3) Electric reliability organization, or organization.--
        The term `Electric Reliability Organization' or `Organization' 
        means the organization approved by the Commission under 
        subsection (d)(4).
            ``(4) Entity rule.--The term `entity rule' means a rule 
        adopted by an affiliated regional reliability entity for a 
        specific region and designed to implement or enforce one or 
        more Organization Standards. An entity rule shall be approved 
        by the organization and once approved, shall be treated as an 
        Organization Standard.
            ``(5) Industry sector.--The term `industry sector' means a 
        group of users of the bulk power system with substantially 
        similar commercial interests, as determined by the Board of the 
        Electric Reliability Organization.
            ``(6) Interconnection.--The term `interconnection' means a 
        geographic area in which the operation of bulk power system 
        components is synchronized such that the failure of one or more 
        of such components may adversely affect the ability of the 
        operators of other components within the interconnection to 
        maintain safe and reliable operation of the facilities within 
        their control.
            ``(7) Organization standard.--The term `Organization 
        Standard' means a policy or standard duly adopted by the 
        Electric Reliability Organization to provide for the reliable 
        operation of a bulk power system.
            ``(8) Public interest group.--The term `public interest 
        group' means any nonprofit private or public organization that 
        has an interest in the activities of the Electric Reliability 
        Organization, including, but not limited to, ratepayer 
advocates, environmental groups, and State and local government 
organizations that regulate market participants and promulgate 
government policy.
            ``(9) Variance.--The term `variance' means an exception or 
        variance from the requirements of an Organization Standard 
        (including a proposal for an Organization Standard where there 
        is no Organization Standard) that is adopted by an affiliated 
        regional reliability entity and applicable to all or a part of 
        the region for which the affiliated regional reliability entity 
        is responsible. A variance shall be approved by the 
        organization and once approved, shall be treated as an 
        Organization Standard.
            ``(10) System operator.--The term `system operator' means 
        any entity that operates or is responsible for the operation of 
        a bulk power system, including but not limited to a control 
        area operator, an independent system operator, a regional 
        transmission organization, a transmission company, a 
        transmission system operator, or a regional security 
        coordinator.
            ``(11) User of the bulk power system.--The term `user of 
        the bulk power system' means any entity that sells, purchases, 
        or transmits electric power over a bulk power system, or that 
        owns, operates, or maintains facilities or control systems that 
        are part of a bulk power system, or that is a system operator.
    ``(b) Commission Authority.--
            ``(1) Within the United States, the Commission shall have 
        jurisdiction over the Electric Reliability Organization, all 
        affiliated regional reliability entities, all system operators, 
        and all users of the bulk-power system, for purposes of 
        approving and enforcing compliance with the requirements of 
        this section.
            ``(2) The Commission may, by rule, define any other term 
        used in this section, provided such definition is consistent 
        with the definitions in, and the purpose and intent of, this 
        Act.
            ``(3) Not later than 90 days after the date of enactment of 
        this section, the Commission shall issue a proposed rule for 
        implementing the requirements of this section. The Commission 
        shall provide notice and opportunity for comment on the 
        proposed rule. The Commission shall issue a final rule under 
        this subsection within 180 days after the date of enactment of 
        this section.
            ``(4) Nothing in this section shall be construed as 
        limiting or impairing any authority of the Commission under any 
        other provision of this Act, including its exclusive authority 
        to determine rates, terms, and conditions of transmission 
        services subject to its jurisdiction.
    ``(c) Existing Reliability Standards.--Following enactment of this 
section, and prior to the approval of an organization under subsection 
(d), any entity, including the North American Electric Reliability 
Council and its member regional reliability councils, may file any 
reliability standard, guidance, or practice that such entity would 
propose to be made mandatory and enforceable. The Commission, after 
allowing an opportunity to submit comments, may approve any such 
proposed mandatory standard, guidance, or practice, or any amendment 
thereto, if it finds that the standard, guidance, or practice, or 
amendment is just, reasonable, not unduly discriminatory or 
preferential, and in the public interest. The Commission may, without 
further proceeding or finding, grant its approval to any standard, 
guidance, or practice for which no substantive objections are filed in 
the comment period. Filed standards, guidances, or practices, including 
any amendments thereto, shall be mandatory and applicable according to 
their terms following approval by the Commission and shall remain in 
effect until--
            (1) withdrawn, disapproved, or superseded by an 
        Organization Standard, issued or approved by the Electric 
        Reliability Organization and made effective by the Commission 
        under subsection (e); or
            (2) disapproved by the Commission if, upon complaint or 
        upon its own motion and after notice and an opportunity for 
        comment, the Commission finds the standard, guidance, or 
        practice unjust, unreasonable, unduly discriminatory, or 
        preferential or not in the public interest.
 Standards, guidances, or practices in effect pursuant to the 
provisions of this subsection shall be enforceable by the Commission.
    ``(d) Organization Approval.--
            ``(1) Following the issuance of a final Commission rule 
        under subsection (b)(3), an entity may submit an application to 
        the Commission for approval as the Electric Reliability 
        Organization. The applicant shall specify in its application 
        its governance and procedures, as well as its funding mechanism 
        and initial funding requirements.
            ``(2) The Commission shall provide public notice of the 
        application and afford interested parties an opportunity to 
        comment.
            ``(3) The Commission shall approve the application if the 
        Commission determines that the applicant--
                    ``(A) has the ability to develop, implement, and 
                enforce standards that provide for an adequate level of 
                reliability of the bulk power system;
                    ``(B) permits voluntary membership to any user of 
                the bulk power system or public interest group;
                    ``(C) assures fair representation of its members in 
                the selection of its directors and fair management of 
                its affairs, taking into account the need for 
                efficiency and effectiveness in decisionmaking and 
                operations and the requirements for technical 
                competency in the development of Organization Standards 
                and the exercise of oversight of bulk power system 
                reliability;
                    ``(D) assures that no two industry sectors have the 
                ability to control, and no one industry sector has the 
                ability to veto, the Electric Reliability 
                Organization's discharge of its responsibilities 
                (including actions by committees recommending standards 
                to the board or other board actions to implement and 
                enforce standards);
                    ``(E) provides for governance by a board wholly 
                comprised of independent directors;
                    ``(F) provides a funding mechanism and requirements 
                that are just, reasonable, and not unduly 
                discriminatory or preferential and are in the public 
                interest, and which satisfy the requirements of 
                subsection (l);
                    ``(G) establishes procedures for development of 
                Organization Standards that provide reasonable notice 
                and opportunity for public comment, taking into account 
                the need for efficiency and effectiveness in 
                decisionmaking and operations and the requirements for 
                technical competency in the development of Organization 
                Standards, and which standards development process has 
                the following attributes--
                            ``(i) openness,
                            ``(ii) balance of interests, and
                            ``(iii) due process, except that the 
                        procedures may include alternative procedures 
                        for emergencies;
                    ``(H) establishes fair and impartial procedures for 
                implementation and enforcement of Organization 
                Standards, either directly or through delegation to an 
                affiliated regional reliability entity, including the 
                imposition of penalties, limitations on activities, 
                functions, or operations, or other appropriate 
                sanctions;
                    ``(I) establishes procedures for notice and 
                opportunity for public observation of all meetings, 
                except that the procedures for public observation may 
                include alternative procedures for emergencies or for 
                the discussion of information the directors determine 
                should take place in closed session, such as 
                litigation, personnel actions, or commercially 
                sensitive information;
                    ``(J) provides for the consideration of 
                recommendations of States and State commissions; and
                    ``(K) addresses other matters that the Commission 
                may deem necessary or appropriate to ensure that the 
                procedures, governance, and funding of the Electric 
                Reliability Organization are just, reasonable, not 
                unduly discriminatory or preferential, and are in the 
                public interest.
            ``(4) The Commission shall approve only one Electric 
        Reliability Organization. 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.
    ``(e) Establishment of and Modifications to Organization 
Standards.--
            ``(1) The Electric Reliability Organization shall file with 
        the Commission any new or modified organization standards, 
        including any variances or entity rules, and the Commission 
        shall follow the procedures under paragraph (2) for review of 
        that filing.
            ``(2) Submissions under paragraph (1) shall include--
                    ``(A) a concise statement of the purpose of the 
                proposal, and
                    ``(B) a record of any proceedings conducted with 
                respect to such proposal.
        The Commission shall provide notice of the filing of such 
        proposal and afford interested entities 30 days to submit 
        comments. The Commission, after taking into consideration any 
        submitted comments, shall approve or disapprove such proposal 
        not later than 60 days after the deadline for the submission of 
        comments, except that the Commission may extend the 60-day 
        period for an additional 90 days for good cause, and except 
        further that if the Commission does not act to approve or 
        disapprove a proposal within the foregoing periods, the 
        proposal shall go into effect subject to its terms, without 
        prejudice to the authority of the Commission thereafter to 
        modify the proposal in accordance with the standards and 
        requirements of this section. Proposals approved by the 
        Commission shall take effect according to their terms but not 
        earlier than 30 days after the effective date of the 
        Commission's order, except as provided in paragraph (3) of this 
        subsection.
            ``(3)(A) In the exercise of its review responsibilities 
        under this subsection, the Commission shall give due weight to 
        the technical expertise of the Electric Reliability 
        Organization with respect to the content of a new or modified 
        organization standard, but shall not defer to the organization 
        with respect to the effect of the standard on competition. The 
        Commission shall approve a proposed new or modified 
        organization standard if it determines the proposal to be just, 
        reasonable, not unduly discriminatory or preferential, and in 
        the public interest.
            ``(B) An existing or proposed organization standard which 
        is disapproved in whole or in part by the Commission shall be 
        remanded to the Electric Reliability Organization for further 
        consideration.
            ``(C) The Commission, on its own motion or upon complaint, 
        may direct the Electric Reliability Organization to develop an 
        organization standard, including modification to an existing 
        organization standard, addressing a specific matter by a date 
        certain if the Commission considers such new or modified 
        organization standard necessary or appropriate to further 
the purposes of this section. The Electric Reliability Organization 
shall file any such new or modified organization standard in accordance 
with this subsection.
            ``(D) An affiliated regional reliability entity may propose 
        a variance or entity rule to the Electric Reliability 
        Organization. The affiliated regional reliability entity may 
        request that the Electric Reliability Organization expedite 
        consideration of the proposal, and may file a notice of such 
        request with the Commission, if expedited consideration is 
        necessary to provide for bulk-power system reliability. If the 
        Electric Reliability Organization fails to adopt the variance 
        or entity rule, either in whole or in part, the affiliated 
        regional reliability entity may request that the Commission 
        review such action. If the Commission determines, after its 
        review of such a request, that the action of the Electric 
        Reliability Organization did not conform to the applicable 
        standards and procedures approved by the Commission, or if the 
        Commission determines that the variance or entity rule is just, 
        reasonable, not unduly discriminatory or preferential, and in 
        the public interest, and that the Electric Reliability 
        Organization has unreasonably rejected the proposed variance or 
        entity rule, then the Commission may remand the proposed 
        variance or entity rule for further consideration by the 
        Electric Reliability Organization or may direct the Electric 
        Reliability Organization or the affiliated regional reliability 
        entity to develop a variance or entity rule consistent with 
        that requested by the affiliated regional reliability entity. 
        Any such variance or entity rule proposed by an affiliated 
        regional reliability entity shall be submitted to the Electric 
        Reliability Organization for review and filing with the 
        Commission in accordance with the procedures specified in this 
        subsection.
            ``(E) Notwithstanding any other provision of this 
        subsection, a proposed organization standard or amendment shall 
        take effect according to its terms if the Electric Reliability 
        Organization determines that an emergency exists requiring that 
        such proposed organization standard or amendment take effect 
        without notice or comment. The Electric Reliability 
        Organization shall notify the Commission immediately following 
        such determination and shall file such emergency organization 
        standard or amendment with the Commission not later than 5 days 
        following such determination and shall include in such filing 
        an explanation of the need for such emergency standard. 
        Subsequently, the Commission shall provide notice of the 
        organization standard or amendment for comment, and shall 
        follow the procedures set out in paragraphs (2) and (3) for 
        review of the new or modified organization standard. Any such 
        organization standard that has gone into effect shall remain in 
        effect unless and until suspended or disapproved by the 
        Commission. If the Commission determines at any time that the 
        emergency organization standard or amendment is not necessary, 
        the Commission may suspend such emergency organization standard 
        or amendment.
            ``(4) All users of the bulk power system shall comply with 
        any organization standard that takes effect under this section.
    ``(f) Coordination With Canada and Mexico.--The Electric 
Reliability Organization shall take all appropriate steps to gain 
recognition in Canada and Mexico. The United States shall use its best 
efforts to enter into international agreements with the appropriate 
governments of Canada and Mexico to provide for effective compliance 
with organization standards and to provide for the effectiveness of the 
Electric Reliability Organization in carrying out its mission and 
responsibilities. All actions taken by the Electric Reliability 
Organization, any affiliated regional entity, and the Commission shall 
be consistent with the provisions of such international agreements.
    ``(g) Changes in Procedures, Governance, or Funding.--
            ``(1) The Electric Reliability Organization shall file with 
        the Commission any proposed change in its procedures, 
        governance, or funding, or any changes in the affiliated 
        regional reliability entity's procedures, governance, or 
        funding relating to delegated functions, and shall include with 
        the filing an explanation of the basis and purpose for the 
        change.
            ``(2) A proposed procedural change may take effect 90 days 
        after filing with the Commission if the change constitutes a 
        statement of policy, practice, or interpretation with respect 
        to the meaning or enforcement of an existing procedure. 
        Otherwise, a proposed procedural change shall take effect only 
        upon a finding by the Commission, after notice and opportunity 
        for comments, that the change is just, reasonable, not unduly 
        discriminatory or preferential, is in the public interest, and 
        satisfies the requirements of subsection (d)(4).
            ``(3) A change in governance or funding shall not take 
        effect unless the Commission finds that the change is just, 
        reasonable, not unduly discriminatory or preferential, in the 
        public interest, and satisfies the requirements of subsection 
        (d)(4).
            ``(4) The Commission, upon complaint or upon its own 
        motion, may require the Electric Reliability Organization to 
        amend the procedures, governance, or funding if the Commission 
        determines that the amendment is necessary to meet the 
        requirements of this section. The Electric Reliability 
        Organization shall file the amendment in accordance with 
        paragraph (1) of this subsection.
    ``(h) Delegations of Authority.--
            ``(1) The Electric Reliability Organization shall, upon 
        request by an entity, enter into an agreement with such entity 
        for the delegation of authority to implement and enforce 
        compliance with organization standards in a specified 
        geographic area if the organization finds that the entity 
        requesting the delegation satisfies the requirements of 
        subparagraphs (A), (B), (C), (D), (F), (J), and (K) of 
        subsection (d)(4), and if the delegation promotes the effective 
and efficient implementation and administration of bulk power system 
reliability. The Electric Reliability Organization may enter into an 
agreement to delegate to the entity any other authority, except that 
the Electric Reliability Organization shall reserve the right to set 
and approve standards for bulk power system reliability.
            ``(2) The Electric Reliability Organization shall file with 
        the Commission any agreement entered into under this subsection 
        and any information the Commission requires with respect to the 
        affiliated regional reliability entity to which authority is to 
        be delegated. The Commission shall approve the agreement, 
        following public notice and an opportunity for comment, if it 
        finds that the agreement meets the requirements of paragraph 
        (1), and is just, reasonable, not unduly discriminatory or 
        preferential, and is in the public interest. A proposed 
        delegation agreement with an affiliated regional reliability 
        entity organized on an interconnection-wide basis shall be 
        rebuttably presumed by the Commission to promote the effective 
        and efficient implementation and administration of bulk power 
        system reliability. No delegation by the Electric Reliability 
        Organization shall be valid unless approved by the Commission.
            ``(3)(A) A delegation agreement entered into under this 
        subsection shall specify the procedures for an affiliated 
        regional reliability entity to propose entity rules or 
        variances for review by the Electric Reliability Organization. 
        With respect to any such proposal that would apply on an 
        interconnection-wide basis, the Electric Reliability 
        Organization shall presume such proposal valid if made by an 
        interconnection-wide affiliated regional reliability entity 
        unless the Electric Reliability Organization makes a written 
        finding that the proposal--
                    ``(i) was not developed in a fair and open process 
                that provided an opportunity for all interested parties 
                to participate;
                    ``(ii) has a significant adverse impact on 
                reliability or commerce in other interconnections;
                    ``(iii) fails to provide a level of reliability of 
                the bulk-power system within the interconnection such 
                that it would constitute a serious and substantial 
                threat to public health, safety, welfare, or national 
                security; or
                    ``(iv) creates a serious and substantial burden on 
                competitive markets within the interconnection that is 
                not necessary for reliability.
            ``(B) With respect to any such proposal that would apply 
        only to part of an interconnection, the Electric Reliability 
        Organization shall find such proposal valid if the affiliated 
        regional reliability entity or entities making the proposal 
        demonstrate that it--
                    ``(i) was developed in a fair and open process that 
                provided an opportunity for all interested parties to 
                participate;
                    ``(ii) would not have an adverse impact on commerce 
                that is not necessary for reliability;
                    ``(iii) provides a level of bulk power system 
                reliability adequate to protect public health, safety, 
                welfare, and national security, and would not have a 
                significant adverse impact on reliability; and
                    ``(iv) in the case of a variance, is based on 
                legitimate differences between regions or between 
                subregions within the affiliated regional reliability 
                entity's geographic area.
        The Electric Reliability Organization shall approve or 
        disapprove such proposal within 120 days, or the proposal shall 
        be deemed approved. Following approval of any such proposal 
        under this paragraph, the Electric Reliability Organization 
        shall seek Commission approval pursuant to the procedures 
        prescribed under subsection (e)(3). Affiliated regional 
        reliability entities may not make requests for approval 
        directly to the Commission except pursuant to subsection 
        (e)(3)(D).
            ``(4) If an affiliated regional reliability entity 
        requests, consistent with paragraph (1) of this subsection, 
        that the Electric Reliability Organization delegate authority 
        to it, but is unable within 180 days to reach agreement with 
        the Electric Reliability Organization with respect to such 
        requested delegation, such entity may seek relief from the 
        Commission. If, following notice and opportunity for comment, 
        the Commission determines that a delegation to the entity would 
        meet the requirements of paragraph (1) above, and that the 
        delegation would be just, reasonable, not unduly discriminatory 
        or preferential, and in the public interest, and that the 
        Electric Reliability Organization has unreasonably withheld 
        such delegation, the Commission may, by order, direct the 
        Electric Reliability Organization to make such delegation.
            ``(5)(A) The Commission may, upon its own motion or upon 
        complaint, and with notice to the appropriate affiliated 
        regional reliability entity or entities, direct the Electric 
        Reliability Organization to propose a modification to an 
        agreement entered into under this subsection if the Commission 
        determines that--
                    ``(i) the affiliated regional reliability entity no 
                longer has the capacity to carry out effectively or 
                efficiently its implementation or enforcement 
                responsibilities under that agreement, has failed to 
                meet its obligations under that agreement, or has 
                violated any provision of this section;
                    ``(ii) the rules, practices, or procedures of the 
                affiliated regional reliability entity no longer 
                provide for fair and impartial discharge of its 
                implementation or enforcement responsibilities under 
                the agreement;
                    ``(iii) the geographic boundary of a transmission 
                entity approved by the Commission is not wholly within 
the boundary of an affiliated regional reliability entity and such 
difference is inconsistent with the effective and efficient 
implementation and administration of bulk power system reliability; or
                    ``(iv) the agreement is inconsistent with another 
                delegation agreement as a result of actions taken under 
                paragraph (4) of this subsection.
            ``(B) Following an order of the Commission issued under 
        subparagraph (A), the Commission may suspend the affected 
        agreement if the Electric Reliability Organization or the 
        affiliated regional reliability entity does not propose an 
        appropriate and timely modification. If the agreement is 
        suspended, the Electric Reliability Organization shall assume 
        the previously delegated responsibilities. The Commission shall 
        allow the Electric Reliability Organization and the affiliated 
        regional reliability entity an opportunity to appeal the 
        suspension.
    ``(i) Organization Membership.--Every system operator shall be 
required to be a member of the Electric Reliability Organization and 
shall be required also to be a member of any affiliated regional 
reliability entity operating under an agreement effective pursuant to 
subsection (h) applicable to the region in which the system operates or 
is responsible for the operation of bulkpower system facilities.
    ``(j) Injunctions and Disciplinary Actions.--
            ``(1) Consistent with the range of actions approved by the 
        Commission under subsection (d)(4)(H), the Electric Reliability 
        Organization may impose a penalty, limitation of activities, 
        functions, operations, or other disciplinary action the 
        Electric Reliability Organization finds appropriate against a 
        user of the bulk power system if the Electric Reliability 
        Organization, after notice and an opportunity for interested 
        parties to be heard, issues a finding in writing that the user 
        of the bulk-power system has violated an organization standard. 
        The Electric Reliability Organization shall immediately notify 
        the Commission of any disciplinary action imposed with respect 
        to an act or failure to act of a user of the bulk-power system 
        that affected or threatened to affect bulk power system 
        facilities located in the United States, and the sanctioned 
        party shall have the right to seek modification or rescission 
        of such disciplinary action by the Commission. If the 
        organization finds it necessary to prevent a serious threat to 
        reliability, the organization may seek injunctive relief in a 
        Federal court in the district in which the affected facilities 
        are located.
            ``(2) A disciplinary action taken under paragraph (1) may 
        take effect not earlier than the 30th day after the Electric 
        Reliability Organization files with the Commission its written 
        finding and record of proceedings before the Electric 
        Reliability Organization and the Commission posts its written 
        finding, unless the Commission, on its own motion or upon 
        application by the user of the bulk power system which is the 
        subject of the action, suspends the action. The action shall 
        remain in effect or remain suspended unless and until the 
        Commission, after notice and opportunity for hearing, affirms, 
        sets aside, modifies, or reinstates the action, but the 
        Commission shall conduct such hearing under procedures 
        established to ensure expedited consideration of the action 
        taken.
            ``(3) The Commission, on its own motion or on complaint, 
        may order compliance with an organization standard and may 
        impose a penalty, limitation of activities, functions, or 
        operations, or take such other disciplinary action as the 
        Commission finds appropriate, against a user of the bulk power 
        system with respect to actions affecting or threatening to 
        affect bulk power system facilities located in the United 
        States if the Commission finds, after notice and opportunity 
        for a hearing, that the user of the bulk power system has 
        violated or threatens to violate an organization standard.
            ``(4) The Commission may take such action as is necessary 
        against the Electric Reliability Organization or an affiliated 
        regional reliability entity to assure compliance with an 
        organization standard, or any Commission order affecting the 
        Electric Reliability Organization or an affiliated regional 
        reliability entity.
    ``(k) Reliability Reports.--The Electric Reliability Organization 
shall conduct periodic assessments of the reliability and adequacy of 
the interconnected bulk power system in North America and shall report 
annually to the Secretary of Energy and the Commission its findings and 
recommendations for monitoring or improving system reliability and 
adequacy.
    ``(l) Assessment and Recovery of Certain Costs.--The reasonable 
costs of the Electric Reliability Organization, and the reasonable 
costs of each affiliated regional reliability entity that are related 
to implementation and enforcement of organization standards or other 
requirements contained in a delegation agreement approved under 
subsection (h), shall be assessed by the Electric Reliability 
Organization and each affiliated regional reliability entity, 
respectively, taking into account the relationship of costs to each 
region and based on an allocation that reflects an equitable sharing of 
the costs among all end users. The Commission shall provide by rule for 
the review of such costs and allocations, pursuant to the standards in 
this subsection and subsection (d)(4)(F).
    ``(m) Savings Provisions.--
            ``(1) The Electric Reliability Organization shall have 
        authority to develop, implement 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 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 
        Organization Standard.
            ``(4) Within 90 days of the application of the Electric 
        Reliability Organization or other affected party, the 
        Commission shall issue a final order determining whether a 
        State action is inconsistent with an Organization Standard, 
        after notice and opportunity for comment, taking into 
        consideration any recommendations 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.
    ``(n) 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 
loan 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, upon execution of an international agreement or agreements 
described in subsection (f). A regional advisory body may provide 
advice to the electric reliability organization, an affiliated regional 
reliability entity, or the Commission regarding the governance of an 
existing or proposed affiliated regional reliability entity within the 
same region, whether an organization standard, entity rule, or variance 
proposed to apply within the region is just, reasonable, not unduly 
discriminatory or preferential, and in the public interest, and whether 
fees proposed to be assessed within the region are just, reasonable, 
not unduly discriminatory or preferential, in the public interest, and 
consistent with the requirements of subsection (1). The Commission may 
give deference to the advice of any such regional advisory body if that 
body is organized on an interconnection-wide basis.
    ``(o) Coordination With Regional Transmission Organizations.--
            ``(1) Each regional transmission organization authorized by 
        the Commission shall be responsible for maintaining the short-
        term reliability of the bulk power system that it operates, 
        consistent with organization standards.
            ``(2) Except as provided in paragraph (5), in connection 
        with a proceeding under subsection (e) to consider a proposed 
        organization standard, each regional transmission organization 
        authorized by the Commission shall report to the Commission, 
        and notify the electric reliability organization and any 
        applicable affiliated regional reliability entity, regarding 
        whether the proposed organization standard hinders or conflicts 
        with that regional transmission organization's ability to 
        fulfill the requirements of any rule, regulation, order, 
        tariff, rate schedule, or agreement accepted, approved or 
        ordered by the Commission. Where such hindrance or conflict is 
        identified, the Commission shall address such hindrance or 
        conflict, and the need for any changes to such rule, order, 
        tariff, rate schedule, or agreement accepted, approved or 
        ordered by the Commission in its order under subsection (e) 
        regarding the proposed standard. Where such hindrance or 
        conflict is identified between a proposed organization standard 
        and a provision of any rule, order, tariff, rate schedule or 
        agreement accepted, approved or ordered by the Commission 
        applicable to a regional transmission organization, nothing in 
        this section shall require a change in the regional 
        transmission organization's obligation to comply with such 
        provision unless the Commission orders such a change and the 
        change becomes effective. If the Commission finds that the 
        tariff, rate schedule, or agreement needs to be changed, the 
        regional transmission organization must expeditiously make a 
        section 205 filing to reflect the change. If the Commission 
        finds that the proposed organization standard needs to be 
        changed, it shall remand the proposed organization standard to 
        the electric reliability organization under subsection 
        (e)(3)(B).
            ``(3) Except as provided in paragraph (5), to the extent 
        hindrances and conflicts arise after approval of a reliability 
        standard under subsection (c) or organization standard under 
        subsection (e), each regional transmission organization 
        authorized by the Commission shall report to the Commission, 
        and notify the electric reliability organization and any 
        applicable affiliated regional reliability entity, regarding 
        any reliability standard approved under subsection (c) or 
        organization standard that hinders or conflicts with that 
        regional transmission organization's ability to fulfill the 
        requirements of any rule, regulation, order, tariff, rate 
        schedule, or agreement accepted, approved or ordered by the 
        Commission. The Commission shall seek to assure that such 
        hindrances or conflicts are resolved promptly. Where a 
        hindrance or conflict is identified between a reliability 
        standard or an organization standard and a provision of any 
        rule, order, tariff, rate schedule or agreement accepted, 
        approved or ordered by the Commission applicable to a regional 
        reliability organization, nothing in this section shall require 
        a change in the regional transmission organization's obligation 
        to comply with such provision unless the Commission orders such 
        a change and the change becomes effective. If the Commission 
        finds that the tariff, rate schedule or agreement needs to be 
        changed, the regional transmission organization must 
        expeditiously make a section 205 filing to reflect the change. 
        If the Commission finds that an organization standard needs to 
        be changed, it shall order the electric reliability 
        organization to develop and submit a modified organization 
        standard under subsection (e)(3)(C).
            ``(4) An affiliated regional reliability entity and a 
        regional transmission organization operating in the same 
        geographic area shall cooperate to avoid conflicts between 
implementation and enforcement of organization standards by the 
affiliated regional reliability entity and implementation and 
enforcement by the regional transmission organization of tariffs, rate 
schedules, and agreements accepted, approved or ordered by the 
Commission. In areas without an affiliated regional reliability entity, 
the electric reliability organization shall act as the affiliated 
regional reliability entity for purposes of this paragraph.
            ``(5) Until 6 months after approval of applicable 
        subsection (h)(3) procedures, any reliability standard, 
        guidance, or practice contained in Commission-accepted tariffs, 
        rate schedules, or agreements in effect of any Commission-
        authorized independent system operator or regional transmission 
        organization shall continue to apply unless the Commission 
        accepts an amendment thereto by the applicable operator or 
        organization, or upon complaint finds them to be unjust, 
        unreasonable, unduly discriminatory or preferential, or not in 
        the public interest. At the conclusion of such transition 
        period, any such reliability standard, guidance, practice, or 
        amendment thereto that the Commission determines is 
        inconsistent with organization standards shall no longer 
        apply.''.
            (2) Enforcement.--Sections 316 and 316A of the Federal 
        Power Act are each amended by striking ``or 214'' each place it 
        appears and inserting ``214, or 215''.
    (b) Application of Antitrust Laws.--Notwithstanding any other 
provision of law, each of the following activities are rebuttably 
presumed to be in compliance with the antitrust laws of the United 
States:
            (1) Activities undertaken by the Electric Reliability 
        Organization under section 215 of the Federal Power Act or 
        affiliated regional reliability entity operating under an 
        agreement in effect under section 215(h) of such Act.
            (2) Activities of a member of the Electric Reliability 
        Organization or affiliated regional reliability entity in 
        pursuit of organization objectives under section 215 of the 
        Federal Power Act undertaken in good faith under the rules of 
        the organization.
Primary jurisdiction, and immunities and other affirmative defenses, 
shall be available to the extent otherwise applicable.

       Subtitle B--Purpa Mandatory Purchase and Sale Requirements

SEC. 803. PURPA MANDATORY PURCHASE AND SALE REQUIREMENTS.

    Section 210 of the Public Utility Regulatory Policies Act of 1978 
is amended by adding the following:
    ``(m) Termination of Mandatory Purchase and Sale Requirements.--
            ``(1) In general.--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, 
        or sell electric energy under this section.
            ``(2) No effect on existing rights and remedies.--Nothing 
        in this subsection affects the rights or remedies of any party 
        with respect to the purchase or sale of electric energy or 
        capacity from or to a facility under this section under any 
        contract or obligation to purchase or to sell electric energy 
        or capacity on the date of enactment of this subsection, 
        including--
                    ``(A) the right to recover costs of purchasing such 
                electric energy or capacity; and
                    ``(B) in States without competition for retail 
                electric supply, the obligation of a utility to 
                provide, at just and reasonable rates for consumption 
                by a qualifying small power production facility or a 
                qualifying cogeneration facility, backup, standby, and 
                maintenance power.
            ``(3) Recovery of costs.--
                    ``(A) Regulation.--To ensure recovery, by an 
                electric utility that purchases electricity 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 costs associated with the purchases, 
                the Commission shall issue and enforce such regulations 
                as are required to ensure that no electric utility 
                shall be required directly or indirectly to absorb the 
                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.''.

 Subtitle C--Repeal of the Public Utility Holding Company Act of 1935 
    and Enactment of the Public Utility Holding Company Act of 2001

SEC. 810. SHORT TITLE.

    This Subtitle may be cited as the ``Public Utility Holding Company 
Act of 2001''.

SEC. 811. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) the Public Utility Holding Company Act of 1935 was 
        intended to facilitate the work of Federal and State regulators 
        by placing certain constraints on the activities of holding 
        company systems;
            (2) developments since 1935, including changes in other 
        regulation and in the electric and gas industries, have called 
        into question the continued relevance of the model of 
        regulation established by that Act;
            (3) there is a continuing need for State regulation in 
        order to ensure the rate protection of utility customers; and
            (4) limited Federal regulation is necessary to supplement 
        the work of State commissions for the continued rate protection 
        of electric and gas utility customers.
    (b) Purposes.--The purposes of this Title are--
            (1) to eliminate unnecessary regulation, yet continue to 
        provide for consumer protection by facilitating existing rate 
regulatory authority through improved Federal and State commission 
access to books and records of all companies in a holding company 
system, to the extent that such information is relevant to rates paid 
by utility customers, while affording companies the flexibility 
required to compete in the energy markets; and
            (2) to address protection of electric and gas utility 
        customers by providing for Federal and State access to books 
        and records of all companies in a holding company system that 
        are relevant to utility rates.

SEC. 812. DEFINITIONS.

    For the 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, as those sections existed on the day before the effective 
        date of this Act;
            (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 Title 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 Title upon subsidiary companies of 
                holding companies; and
            (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. 813. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et 
seq.) is repealed, effective one year after the date of enactment of 
this Subtitle.

SEC. 814. 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 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.
    (b) Affiliate Companies.--Each affiliate of a holding company or of 
any subsidiary company of a holding company shall maintain, and 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. 815. 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 in a 
        proceeding before 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.
    (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, records, or any 
other information, or in any way limit the rights of any State to 
obtain books, records, or any other information 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. 816. 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 815 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;
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--If, upon application or upon its own motion, 
the Commission finds that the books, records, accounts, memoranda, and 
other records of any person are not relevant to the jurisdictional 
rates of a public utility or natural gas company, or if the Commission 
finds that any class of transactions is not relevant to the 
jurisdictional rates of a public utility or natural gas company, the 
Commission shall exempt such person or transaction from the 
requirements of section 815.

SEC. 817. AFFILIATE TRANSACTIONS.

    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. 818. APPLICABILITY.

    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. 819. 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. 820. 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. 825d-825p) to 
enforce the provisions of this Subtitle.

SEC. 821. 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. 822. IMPLEMENTATION.

    Not later than 6 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 Title (other than section 815); 
        and
            (2) submit to 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. 823. 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. 824. AUTHORIZATION OF APPROPRIATIONS.

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

SEC. 825. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

    Section 318 of the Federal Power Act (16 U.S.C. 825q) is repealed.

 Subtitle D--Emission-Free Control Measures Under State Implementation 
                                 Plans

SEC. 830. EMISSION-FREE CONTROL MEASURES UNDER A STATE IMPLEMENTATION 
              PLAN.

    Actions taken by a State to support the continued operation of 
existing emission-free electricity sources, or the construction or 
operation of new emission-free electricity sources, shall be considered 
control measures necessary or appropriate to meet applicable 
requirements under section 110(a) of the Clean Air Act (42 U.S.C. 
7410(a)) and shall be included in a State Implementation Plan.
                                 <all>