[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3836 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3836

  To expedite the construction of new refining capacity in the United 
                                States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 20, 2005

Mr. Shadegg (for himself, Mr. Barrett of South Carolina, Mr. Bishop of 
  Utah, Mrs. Blackburn, Mr. Brown of South Carolina, Mr. Cantor, Mr. 
 Chabot, Mr. Chocola, Mr. Doolittle, Mr. Feeney, Mr. Flake, Ms. Foxx, 
  Mr. Franks of Arizona, Mr. Garrett of New Jersey, Mr. Gingrey, Mr. 
   Gohmert, Mr. Goode, Ms. Hart, Mr. Hensarling, Mr. Istook, Mr. Sam 
Johnson of Texas, Mr. Kennedy of Minnesota, Mr. Kirk, Mr. McHenry, Mrs. 
 Musgrave, Mr. Pence, Mr. Pitts, Mr. Sensenbrenner, Mr. Sullivan, Mr. 
 Wamp, Mr. Westmoreland, Mr. Wicker, and Mr. Wilson of South Carolina) 
 introduced the following bill; which was referred to the Committee on 
 Energy and Commerce, and in addition to the Committees on Resources, 
and Transportation and Infrastructure, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To expedite the construction of new refining capacity in the United 
                                States.

    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 ``Fuel Supply Improvement Act of 
2005''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) Hurricane Katrina, which struck the Gulf Coast and New 
        Orleans, Louisiana, on August 29, 2005, substantially disrupted 
        petroleum production, refining, and pipeline systems in the 
        region, impacting energy prices and supply nationwide.
            (2) In the immediate aftermath of Katrina, United States 
        refining capacity was reduced by more than 2,000,000 barrels 
        per day. While some capacity was restored within several days, 
        4 refineries with a total capacity of 879,000 barrels per day, 
        roughly 5 percent of pre-Katrina capacity, remain offline. 
        These refineries sustained major damage and will not reopen for 
        an extended period of time.
            (3) Within a week of the hurricane's landfall, the national 
        average retail price for motor vehicle gasoline rose by 46 
        cents to $3.069 per gallon. Prices of other refined fuels also 
        rose quickly in response to the hurricane.
            (4) Before Katrina, United States refining capacity was 
        already significantly strained, with industry average 
        utilization rates of 95 percent of capacity or higher.
            (5) No new refinery has been constructed in the United 
        States since 1976. There are 148 operating refineries in the 
        United States, down from 324 in 1981. Total capacity at 
        operating refineries is 17,000,000 barrels per day, while total 
        United States demand averages nearly 21,000,000 barrels per 
        day. This growing gap is met by an increasing amount of imports 
        of refined products from foreign sources.
            (6) A growing reliance on foreign sources of refined 
        petroleum products impairs our national security interests.
            (7) It serves the national interest to increase refinery 
        capacity for gasoline, heating oil, diesel fuel, and jet fuel 
        wherever located within the United States, to bring more supply 
        to the markets for use by the American people. Production and 
        use of refined petroleum products has a significant impact on 
        interstate commerce.
            (8) Refiners are subject to significant environmental and 
        other regulations and face several new Clean Air Act 
        requirements over the next decade. New Clean Air Act 
        requirements may benefit the environment but will also require 
        substantial capital investment and additional government 
        permits.
            (9) More regulatory certainty for refinery owners is needed 
        to stimulate investment in increased refinery capacity. 
        Required procedures for regulatory approvals need to be 
        streamlined to ensure that increased refinery capacity can be 
        developed and operated in a safe, timely, and cost-effective 
        manner.

SEC. 3. EXPEDITED FEDERAL PERMITTING.

    (a) In General.--Except as provided in subsection (b), an 
application for a permit under a law described in subsection (c) to 
construct or expand a petroleum refining facility in the United States 
shall be approved not later than 90 days after a complete application 
is received. If such permit is not approved within 90 days, the 
Secretary of Energy, in consultation with the Office of Regulatory 
Assistance, shall issue the permit. The Secretary of Energy shall 
coordinate Federal implementation of this subsection.
    (b) Presidential Determination.--A permit shall not be approved 
under subsection (a) if the President determines that the benefits to 
the United States of increased refinery capacity that would be provided 
by the proposed construction or expansion are outweighed by the costs 
of approving the permit. A decision by the President to not make a 
determination under this subsection shall not be subject to judicial 
review.
    (c) Covered Laws.--This section applies only to permits under the 
Clean Air Act, the Federal Water Pollution Control Act, the Safe 
Drinking Water Act, the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980, the Solid Waste Disposal Act, 
the Toxic Substances Control Act, the National Historic Preservation 
Act, and the National Environmental Policy Act of 1969.
    (d) Applicability.--This section shall apply to any refinery repair 
or reconstruction at an existing refinery undertaken in the area 
affected by Hurricane Katrina and undertaken as a result of Hurricane 
Katrina. This section shall not apply during a period with respect to 
which the Secretary of Energy has certified to Congress in writing that 
United States domestic petroleum refining capacity is sufficient to 
serve the needs of the United States, accounting for the possibility of 
natural disasters, terrorist attacks, fires, routine maintenance, the 
effects of unique fuel blends, or other potential events.

SEC. 4. LITIGATION.

    (a) Direct Legal Representation.--At the request of the applicant, 
the Secretary of Energy shall provide direct legal representation for a 
person who has filed an application described in section 3(a) for any 
lawsuit brought against such person or the Federal Government under 
such a law with respect to the permit approval procedure or 
construction or expansion of the facility to which the application 
relates, if the Secretary believes the lawsuit lacks merit, is brought 
solely to delay the completion of the facility, or will have the effect 
of delaying the completion of the facility in a period when United 
States domestic refining capacity is insufficient.
    (b) Attorneys' Fees.--Any party in an action with respect to the 
approval of an application described in section 3(a), or the 
construction or expansion of the facility to which the application 
relates, shall be awarded attorneys' fees in proportion to the amount 
of the original claim that is awarded or denied by the court.

SEC. 5. OFFICE OF REGULATORY ASSISTANCE.

    The Secretary of Energy shall establish an office whose sole 
purpose is to assist applicants in developing permit applications, 
planning, and otherwise pursuing the construction or expansion of a 
petroleum refining facility in the United States. This assistance shall 
include--
            (1) serving as an advocate for the applicant to the 
        permitting agencies;
            (2) ensuring that permitting agencies are responsive to 
        applicants;
            (3) ensuring that permits are issued by statutory 
        deadlines; and
            (4) consulting with the Secretary of Energy to offer advice 
        relating to issuing a permit for an agency that has not met 
        deadlines contained in section 3(a).

SEC. 6. STANDBY SUPPORT FOR CERTAIN PETROLEUM REFINING FACILITY DELAYS.

    (a) Contract Authority.--
            (1) In general.--The Secretary of Energy may enter into 
        contracts under this section with sponsors of 6 new petroleum 
        refining facilities, each with an output of at least 150,000 
        barrels per day, in accordance with paragraph (2). The 
        Secretary shall give preference to new refineries that will 
        increase the geographic diversity of existing United States 
        domestic refining capacity.
            (2) Requirement for contracts.--
                    (A) Definition of loan cost.--In this paragraph, 
                the term ``loan cost'' has the meaning given the term 
                ``cost of a loan guarantee'' under section 502(5)(C) of 
                the Federal Credit Reform Act of 1990 (2 U.S.C. 
                661a(5)(C)).
                    (B) Establishment of accounts.--There is 
                established in the Department of Energy 2 separate 
                accounts, which shall be known as the--
                            (i) ``Refinery Standby Support Program 
                        Account''; and
                            (ii) ``Refinery Standby Support Grant 
                        Account''.
                    (C) Requirement.--The Secretary shall not enter 
                into a contract under this section unless the Secretary 
                deposits--
                            (i) in the Refinery Standby Support Program 
                        Account established under subparagraph (B), 
                        funds appropriated to the Secretary in advance 
                        of the contract or a combination of 
                        appropriated funds and loan guarantee fees that 
                        are in an amount sufficient to cover the loan 
                        costs described in subsection (c)(5)(A); and
                            (ii) in the Refinery Standby Support Grant 
                        Account established under subparagraph (B), 
                        funds appropriated to the Secretary in advance 
                        of the contract, paid to the Secretary by the 
                        sponsor of the petroleum refining facility, or 
                        a combination of appropriations and payments 
                        that are in an amount sufficient cover the 
                        costs described in subsection (c)(5)(B).
    (b) Covered Delays.--
            (1) Inclusions.--Under each contract authorized by this 
        section, the Secretary shall pay the costs specified in 
        subsection (c), using funds appropriated or collected for the 
        covered costs, if full operation of the petroleum refining 
        facility is delayed by--
                    (A) the failure of the appropriate Federal agency 
                to comply with schedules for review and approval of 
                inspections, tests, analyses, and acceptance criteria; 
                or
                    (B) litigation that delays the commencement of full 
                operations of the petroleum refining facility.
            (2) Exclusions.--The Secretary may not enter into any 
        contract under this section that would obligate the Secretary 
        to pay any costs resulting from--
                    (A) the failure of the sponsor to take any action 
                required by law or regulation;
                    (B) events within the control of the sponsor; or
                    (C) normal business risks.
    (c) Covered Costs.--
            (1) In general.--Subject to paragraphs (2), (3), and (4), 
        the costs that shall be paid by the Secretary pursuant to a 
        contract entered into under this section are the costs that 
        result from a delay covered by the contract.
            (2) Initial 2 facilities.--In the case of the first 2 
        facilities on which construction is commenced, the Secretary 
        shall pay--
                    (A) 100 percent of the covered costs of delay; but
                    (B) not more than $500,000,000 per contract.
            (3) Subsequent 4 facilities.--In the case of the next 4 
        facilities on which construction is commenced, the Secretary 
        shall pay--
                    (A) 50 percent of the covered costs of delay that 
                occur after the initial 180-day period of covered 
                delay; but
                    (B) not more than $250,000,000 per contract.
            (4) Conditions on payment of certain covered costs.--
                    (A) In general.--The obligation of the Secretary to 
                pay the covered costs described in subparagraph (B) of 
                paragraph (5) is subject to the Secretary receiving 
                from appropriations or payments from other non-Federal 
                sources amounts sufficient to pay the covered costs.
                    (B) Non-federal sources.--The Secretary may receive 
                and accept payments from any non-Federal source, which 
                shall be made available without further appropriation 
                for the payment of the covered costs.
            (5) Types of covered costs.--Subject to paragraphs (2), 
        (3), and (4), the contract entered into under this section for 
        a petroleum refining facility shall include as covered costs 
        those costs that result from a delay during construction and in 
        gaining approval for full operation, including--
                    (A) principal or interest on any debt obligation of 
                a petroleum refining facility owned by a non-Federal 
                entity; and
                    (B) the incremental difference between--
                            (i) the fair market price of refined 
                        petroleum products purchased to meet the 
                        contractual supply agreements that would have 
                        been met by the petroleum refining facility but 
                        for the delay; and
                            (ii) the contractual price of refined 
                        petroleum products from the petroleum refining 
                        facility subject to the delay.
    (d) Requirements.--Any contract between a sponsor and the Secretary 
covering a petroleum refining facility under this section shall require 
the sponsor to use due diligence to shorten, and to end, the delay 
covered by the contract.
    (e) Reports.--For each petroleum refining facility that is covered 
by a contract under this section, the Secretary shall submit to 
Congress quarterly reports summarizing the status of regulatory and 
other actions associated with the petroleum refining facility.
    (f) Regulations.--
            (1) In general.--Subject to paragraphs (2) and (3), the 
        Secretary shall issue such regulations as are necessary to 
        carry out this section.
            (2) Interim final rulemaking.--Not later than 270 days 
        after the date of enactment of this Act, the Secretary shall 
        issue for public comment an interim final rule regulating 
        contracts authorized by this section.
            (3) Notice of final rulemaking.--Not later than 1 year 
        after the date of enactment of this Act, the Secretary shall 
        issue a notice of final rulemaking regulating the contracts.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

SEC. 7. NEW SOURCE REVIEW UNDER THE CLEAN AIR ACT.

    Part A of title I of the Clean Air Act (42 U.S.C. 7401 and 
following) is amended by adding the following new section at the end 
thereof:

``SEC. 132 NEW SOURCE REVIEW.

    ``In promulgating regulations respecting new source review under 
this Act, the Administrator shall include in such regulations 
provisions providing that routine maintenance and repair shall not 
constitute a modification of an existing source requiring compliance 
with new source review requirements. Such provisions shall provide that 
equipment replacement shall be considered routine maintenance and 
repair if it meets each of the following requirements:
            ``(1) It does not increase actual emissions of any air 
        pollutant by more than 5 percent.
            ``(2) It does not increase actual emissions of any air 
        pollutant by more than 40 tons per year.
Notwithstanding any other provision of this Act, no State may include 
in any State implementation plan any provisions regarding new source 
review that are more stringent than those contained in the regulations 
of the Administrator under this section.''.

SEC. 8. DISCOUNTED SALES OF ROYALTY-IN-KIND OIL TO QUALIFIED SMALL 
              REFINERIES.

    (a) Requirement.--The Secretary of the Interior shall issue and 
begin implementing regulations by not later than 60 days after the date 
of the enactment of this Act, under which the Secretary shall charge a 
discounted price in any sale to a qualified small refinery of crude oil 
obtained by the United States as royalty-in-kind.
    (b) Amount of Discount.--The regulations shall provide that the 
amount of any discount applied pursuant to this section in any sale of 
crude oil to a qualified small refinery--
            (1) shall reflect the actual costs of transporting such oil 
        from the point of origin to the qualified small refinery; and
            (2) shall not exceed $4.50 per barrel of oil sold.
    (c) Termination of Discount.--This section and any regulations 
issued under this section shall not apply on and after any date on 
which the Secretary of Energy determines that United States domestic 
refining capacity is sufficient.
    (d) Qualified Small Refinery.--In this section the term ``qualified 
small refinery'' means a refinery of a small business refiner (as that 
term is defined in section 45H(c)(1) of the Internal Revenue Code of 
1986) that demonstrates to the Secretary of the Interior that it had 
unused crude oil processing capacity in 2004.

SEC. 9. CONSTITUTIONAL AUTHORITY.

    The Constitutional authority on which this Act rests is the power 
of Congress to regulate Commerce among the several States as enumerated 
in Article I, Section 8, Clause 3 of the United States Constitution.
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