[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6 Public Print (PP)]
July 14, 2005
Ordered to be printed as passed
In the Senate of the United States,
June 28, 2005.
Resolved, That the bill from the House of Representatives (H.R. 6)
entitled ``An Act to ensure jobs for our future with secure,
affordable, and reliable energy.'', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Energy Policy Act
of 2005''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--ENERGY EFFICIENCY
Subtitle A--Federal Programs
Sec. 101. Energy and water saving measures in congressional buildings.
Sec. 102. Energy management requirements.
Sec. 103. Energy use measurement and accountability.
Sec. 104. Procurement of energy efficient products.
Sec. 105. Energy savings performance contracts.
Sec. 106. Voluntary commitments to reduce industrial energy intensity.
Sec. 107. Federal building performance standards.
Sec. 108. Increased use of recovered mineral component in federally
funded projects involving procurement of
cement or concrete.
Subtitle B--Energy Assistance and State Programs
Sec. 121. Weatherization assistance.
Sec. 122. State energy programs.
Sec. 123. Energy efficient appliance rebate programs.
Sec. 124. Energy efficient public buildings.
Sec. 125. Low income community energy efficiency pilot program.
Sec. 126. State technologies advancement collaborative.
Sec. 127. State building energy efficiency codes incentives.
Subtitle C--Energy Efficient Products
Sec. 131. Energy Star program.
Sec. 132. HVAC maintenance consumer education program.
Sec. 133. Public energy education program.
Sec. 134. Energy efficiency public information initiative.
Sec. 135. Energy conservation standards for additional products.
Sec. 136. Energy conservation standards for commercial equipment.
Sec. 137. Expedited rulemaking.
Sec. 138. Energy labeling.
Sec. 139. Energy efficient electric and natural gas utilities study.
Sec. 140. Energy efficiency pilot program.
Sec. 141. Energy efficiency resource programs.
Sec. 142. Fuel efficient engine technology for aircraft.
Sec. 143. Motor vehicle tires supporting maximum fuel efficiency.
Subtitle D--Measures to Conserve Petroleum
Sec. 151. Reduction of dependence on imported petroleum.
Subtitle E--Energy Efficiency in Housing
Sec. 161. Public Housing Capital Fund.
Sec. 162. Energy efficient appliances.
Sec. 163. Energy efficiency standards.
Sec. 164. Energy strategy for the Department of Housing and Urban
Development.
TITLE II--RENEWABLE ENERGY
Subtitle A--General Provisions
Sec. 201. Assessment of renewable energy resources.
Sec. 202. Renewable energy production incentive.
Sec. 203. Federal purchase requirement.
Subtitle B--Reliable Fuels
Sec. 211. Renewable content of gasoline.
Sec. 212. Renewable fuel.
Sec. 213. Survey of renewable fuels consumption.
Subtitle C--Federal Reformulated Fuels
Sec. 221. Short title.
Sec. 222. Leaking underground storage tanks.
Sec. 223. Restrictions on the use of MTBE.
Sec. 224. Elimination of oxygen content requirement for reformulated
gasoline.
Sec. 225. Public health and environmental impacts of fuels and fuel
additives.
Sec. 226. Analyses of motor vehicle fuel changes.
Sec. 227. Additional opt-in areas under reformulated gasoline program.
Sec. 228. Federal enforcement of State fuels requirements.
Sec. 229. Fuel system requirements harmonization study.
Sec. 230. Advanced biofuel technologies program.
Sec. 231. Sugar cane ethanol program.
Sec. 232. National Priority Project Designation.
Sec. 233. Rural and remote community electrification grants.
Sec. 234. Waste-derived ethanol and biodiesel.
Subtitle D--Insular Energy
Sec. 241. Definitions.
Sec. 242. Assessment.
Sec. 243. Project feasibility studies.
Sec. 244. Implementation.
Sec. 245. Authorization of appropriations.
Subtitle E--Biomass Energy
Sec. 251. Definitions.
Sec. 252. Biomass commercial utilization grant program.
Sec. 253. Improved biomass utilization program.
Sec. 254. Report.
Subtitle F--Geothermal Energy
Sec. 261. Competitive lease sale requirements.
Sec. 262. Direct use.
Sec. 263. Royalties.
Sec. 264. Geothermal leasing and permitting on Federal land.
Sec. 265. Assessment of geothermal energy potential.
Sec. 266. Cooperative or unit plans.
Sec. 267. Royalty on byproducts.
Sec. 268. Lease duration and work commitment requirements.
Sec. 269. Annual rental.
Sec. 270. Advanced royalties required for cessation of production.
Sec. 271. Leasing and permitting on Federal land withdrawn for military
purposes.
Sec. 272. Technical amendments.
Subtitle G--Hydroelectric
Sec. 281. Alternative conditions and fishways.
Sec. 282. Alaska State jurisdiction over small hydroelectric projects.
Sec. 283. Flint Creek hydroelectric project.
Subtitle H--Renewable Portfolio Standard
Sec. 291. Renewable portfolio standard.
TITLE III--OIL AND GAS
Subtitle A--Petroleum Reserve and Home Heating Oil
Sec. 301. Permanent authority to operate the Strategic Petroleum
Reserve and other energy programs.
Sec. 302. National Oilheat Research Alliance.
Sec. 303. Small Business and Agricultural Producer Energy Emergency
Disaster Loan Program.
Subtitle B--Production Incentives
Sec. 311. Definition of Secretary.
Sec. 312. Program on oil and gas royalties in-kind.
Sec. 313. Marginal property production incentives.
Sec. 314. Incentives for natural gas production from deep wells in the
shallow waters of the Gulf of Mexico.
Sec. 315. Royalty relief for deep water production.
Sec. 316. Alaska offshore royalty suspension.
Sec. 317. Oil and gas leasing in the National Petroleum Reserve in
Alaska.
Sec. 318. North slope science initiative.
Sec. 319. Orphaned, abandoned, or idled wells on Federal land.
Sec. 320. Combined hydrocarbon leasing.
Sec. 321. Alternate energy-related uses on the outer Continental Shelf.
Sec. 322. Preservation of geological and geophysical data.
Sec. 323. Oil and gas lease acreage limitations.
Sec. 324. Assessment of dependence of State of Hawaii on oil.
Sec. 325. Denali Commission.
Sec. 326. Comprehensive inventory of OCS oil and natural gas resources.
Sec. 327. Review and demonstration program for oil and natural gas
production.
Sec. 328. No Oil Producing and Exporting Cartels.
Subtitle C--Access to Federal Land
Sec. 341. Federal onshore oil and gas leasing practices.
Sec. 342. Management of Federal oil and gas leasing programs.
Sec. 343. Consultation regarding oil and gas leasing on public land.
Sec. 344. Pilot project to improve Federal permit coordination.
Sec. 345. Energy facility rights-of-ways and corridors on Federal land.
Sec. 346. Oil shale and tar sands.
Sec. 347. Finger Lakes withdrawal.
Sec. 348. Reinstatement of leases.
Subtitle D--Coastal Programs
Sec. 371. Coastal impact assistance program.
Subtitle E--Natural Gas
Sec. 381. Exportation or importation of natural gas.
Sec. 382. New natural gas storage facilities.
Sec. 383. Process coordination; hearings; rules of procedures.
Sec. 384. Penalties.
Sec. 385. Market manipulation.
Sec. 386. Natural gas market transparency rules.
Sec. 387. Deadline for decision on appeals of consistency determination
under the Coastal Zone Management Act of
1972.
Sec. 388. Federal-State liquefied natural gas forums.
Sec. 389. Prohibition of trading and serving by certain persons.
Subtitle F--Federal Coalbed Methane Regulation
Sec. 391. Federal coalbed methane regulation.
TITLE IV--COAL
Subtitle A--Clean Coal Power Initiative
Sec. 401. Authorization of Appropriations.
Sec. 402. Project Criteria.
Sec. 403. Report.
Sec. 404. Clean coal centers of excellence.
Sec. 405. Integrated coal/renewable energy system.
Sec. 406. Loan to place Alaska clean coal technology facility in
service.
Sec. 407. Western integrated coal gasification demonstration project.
Subtitle B--Federal Coal Leases
Sec. 411. Repeal of the 160-acre limitation for coal leases.
Sec. 412. Mining plans.
Sec. 413. Payment of advance royalties under coal leases.
Sec. 414. Elimination of deadline for submission of coal lease
operation and reclamation plan.
Sec. 415. Department of Energy transportation fuels from Illinois basin
coal.
Sec. 416. Application of amendments.
TITLE V--INDIAN ENERGY
Sec. 501. Short title.
Sec. 502. Office of Indian Energy Policy and Programs.
Sec. 503. Indian energy.
Sec. 504. Four Corners transmission line project and electrification.
Sec. 505. Energy efficiency in federally assisted housing.
Sec. 506. Consultation with Indian tribes.
TITLE VI--NUCLEAR MATTERS
Subtitle A--Price-Anderson Act Amendments
Sec. 601. Short title.
Sec. 602. Extension of indemnification authority.
Sec. 603. Maximum assessment.
Sec. 604. Department of Energy liability limit.
Sec. 605. Incidents outside the United States.
Sec. 606. Reports.
Sec. 607. Inflation adjustment.
Sec. 608. Treatment of modular reactors.
Sec. 609. Applicability.
Sec. 610. Civil penalties.
Subtitle B--General Nuclear Matters
Sec. 621. Medical isotope production: nonproliferation, antiterrorism,
and resource review.
Sec. 622. Safe disposal of greater-than-class C radioactive waste.
Sec. 623. Prohibition on nuclear exports to countries that sponsor
terrorism.
Sec. 624. Decommissioning pilot program.
Sec. 625. Whistleblower protection for employees of the Department of
Energy.
Subtitle C--Next Generation Nuclear Plant Project
Sec. 631. Project establishment.
Sec. 632. Project management.
Sec. 633. Project organization.
Sec. 634. Nuclear regulatory commission.
Sec. 635. Project timelines and authorization of appropriations.
TITLE VII--VEHICLES AND FUELS
Subtitle A--Existing Programs
Sec. 701. Use of alternative fuels by dual-fueled vehicles.
Sec. 702. Fuel use credits.
Sec. 703. Incremental cost allocation.
Sec. 704. Alternative compliance and flexibility.
Sec. 705. Report concerning compliance with alternative fueled vehicle
purchasing requirements.
Sec. 706. Joint flexible fuel/hybrid vehicle commercialization
initiative.
Subtitle B--Automobile Efficiency
Chapter 1--Maximum Average Fuel Economy
Sec. 711. Revised considerations for decisions on maximum feasible
average fuel economy.
Sec. 712. Increased fuel economy standards.
Sec. 713. Expedited procedures for Congressional increase in fuel
economy standards.
Sec. 714. Extension of maximum fuel economy increase for alternative
fueled vehicles.
Chapter 2--Advanced Clean Vehicles
Sec. 721. Hybrid vehicles research and development.
Sec. 722. Diesel fueled vehicles research and development.
Sec. 723. Procurement of alternative fueled passenger automobiles.
Sec. 724. Procurement of hybrid light duty trucks.
Sec. 725. Definitions.
Subtitle C--Miscellaneous
Sec. 731. Railroad efficiency.
Sec. 732. Conserve by bicycling program.
Sec. 733. Reduction of engine idling of heavy-duty vehicles.
Sec. 734. Biodiesel engine testing project.
Sec. 735. Investigation of gasoline prices.
Subtitle D--Federal and State Procurement
Sec. 741. Definitions.
Sec. 742. Federal and State procurement of fuel cell vehicles and
hydrogen energy systems.
Sec. 743. Federal procurement of stationary, portable, and micro fuel
cells.
Subtitle E--Diesel Emissions Reduction
Sec. 751. Definitions.
Sec. 752. National grant and loan programs.
Sec. 753. State grant and loan programs.
Sec. 754. Evaluation and report.
Sec. 755. Outreach and incentives.
Sec. 756. Effect of subtitle.
Sec. 757. Authorization of appropriations.
TITLE VIII--HYDROGEN
Sec. 801. Hydrogen research, development, and demonstration.
TITLE IX--RESEARCH AND DEVELOPMENT
Sec. 901. Short title.
Sec. 902. Goals.
Sec. 903. Definitions.
Subtitle A--Energy Efficiency
Sec. 911. Energy efficiency.
Sec. 912. Next Generation Lighting Initiative.
Sec. 913. National Building Performance Initiative.
Sec. 914. Secondary electric vehicle battery use program.
Sec. 915. Energy Efficiency Science Initiative.
Sec. 916. Building Standards.
Subtitle B--Distributed Energy and Electric Energy Systems
Sec. 921. Distributed energy and electric energy systems.
Sec. 922. High power density industry program.
Sec. 923. Micro-cogeneration energy technology.
Sec. 924. Distributed energy technology demonstration program.
Sec. 925. Electric transmission and distribution programs.
Subtitle C--Renewable Energy
Sec. 931. Renewable energy.
Sec. 932. Bioenergy program.
Sec. 933. Hydrogen intermediate fuels research program.
Sec. 934. Concentrating solar power research program.
Sec. 935. Hybrid solar lighting research and development program.
Sec. 936. Miscellaneous projects.
Sec. 937. Biomass research and development.
Sec. 938. Production incentives for cellulosic biofuels.
Sec. 939. Procurement of biobased products.
Sec. 940. Small business bioproduct marketing and certification grants.
Sec. 941. Regional bioeconomy development grants.
Sec. 942. Preprocessing and harvesting demonstration grants.
Sec. 943. Education and outreach.
Sec. 944. Reports.
Subtitle D--Nuclear Energy
Sec. 945. Nuclear energy.
Sec. 946. Nuclear energy research programs.
Sec. 947. Advanced fuel cycle initiative.
Sec. 948. Nuclear science and engineering support for institutions of
higher education.
Sec. 949. Security of nuclear facilities.
Sec. 950. Alternatives to industrial radioactive sources.
Subtitle E--Fossil Energy
Sec. 951. Fossil energy.
Sec. 952. Oil and gas research programs.
Sec. 953. Methane hydrate research.
Sec. 954. Low-volume gas reservoir research program.
Sec. 955. Research and development for coal mining technologies.
Sec. 956. Coal and related technologies program.
Sec. 957. Carbon capture research and development program.
Sec. 958. Complex well technology testing facility.
Subtitle F--Science
Sec. 961. Science.
Sec. 962. Fusion energy sciences program.
Sec. 963. Support for science and energy facilities and infrastructure.
Sec. 964. Catalysis research program.
Sec. 965. Hydrogen.
Sec. 966. Solid state lighting.
Sec. 967. Advanced scientific computing for energy missions.
Sec. 968. Genomes to Life Program.
Sec. 969. Fission and fusion energy materials research program.
Sec. 970. Energy-Water Supply Technologies Program.
Sec. 971. Spallation neutron source.
Subtitle G--International Cooperation
Sec. 981. Western Hemisphere energy cooperation.
Sec. 982. Cooperation between United States and Israel.
TITLE X--DEPARTMENT OF ENERGY MANAGEMENT
Sec. 1001. Availability of funds.
Sec. 1002. Cost sharing.
Sec. 1003. Merit review of proposals.
Sec. 1004. External technical review of Departmental programs.
Sec. 1005. Improved technology transfer of energy technologies.
Sec. 1006. Technology Infrastructure Program.
Sec. 1007. Small business advocacy and assistance.
Sec. 1008. Outreach.
Sec. 1009. Relationship to other laws.
Sec. 1010. Improved coordination and management of civilian science and
technology programs.
Sec. 1011. Other transactions authority.
Sec. 1012. Prizes for achievement in grand challenges of science and
technology.
Sec. 1013. Technical corrections.
TITLE XI--PERSONNEL AND TRAINING
Sec. 1101. Workforce trends and traineeship grants.
Sec. 1102. Energy research fellowships.
Sec. 1103. Educational programs in science and mathematics.
Sec. 1104. Training guidelines for electric energy industry personnel.
Sec. 1105. National Center for Energy Management and Building
Technologies.
Sec. 1106. Improved access to energy-related scientific and technical
careers.
Sec. 1107. National Power Plant Operations Technology and Educational
Center.
TITLE XII--ELECTRICITY
Sec. 1201. Short title.
Subtitle A--Reliability Standards
Sec. 1211. Electric reliability standards.
Subtitle B--Transmission Infrastructure Modernization
Sec. 1221. Siting of interstate electric transmission facilities.
Sec. 1222. Third-party finance.
Sec. 1223. Advanced transmission technologies.
Sec. 1224. Advanced power system technology incentive program.
Subtitle C--Transmission Operation Improvements
Sec. 1231. Open nondiscriminatory access.
Sec. 1232. Regional Transmission Organizations.
Sec. 1233. Federal utility participation in Transmission Organizations.
Sec. 1234. Standard market design.
Sec. 1235. Native load service obligation.
Sec. 1236. Protection of transmission contracts in the Pacific
Northwest.
Subtitle D--Transmission Rate Reform
Sec. 1241. Transmission infrastructure investment.
Sec. 1242. Funding new interconnection and transmission upgrades.
Subtitle E--Amendments to PURPA
Sec. 1251. Net metering and additional standards.
Sec. 1252. Smart metering.
Sec. 1253. Cogeneration and small power production purchase and sale
requirements.
Sec. 1254. Interconnection.
Subtitle F--Market Transparency, Enforcement, and Consumer Protection
Sec. 1261. Market transparency rules.
Sec. 1262. False statements.
Sec. 1263. Market manipulation.
Sec. 1264. Enforcement.
Sec. 1265. Refund effective date.
Sec. 1266. Refund authority.
Sec. 1267. Consumer privacy and unfair trade practices.
Sec. 1268. Office of Consumer Advocacy.
Sec. 1269. Authority of court to prohibit persons from serving as
officers, directors, and energy traders.
Sec. 1270. Relief for extraordinary violations.
Subtitle G--Repeal of PUHCA and Merger Reform
Sec. 1271. Short title.
Sec. 1272. Definitions.
Sec. 1273. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 1274. Federal access to books and records.
Sec. 1275. State access to books and records.
Sec. 1276. Exemption authority.
Sec. 1277. Affiliate transactions.
Sec. 1278. Applicability.
Sec. 1279. Effect on other regulations.
Sec. 1280. Enforcement.
Sec. 1281. Savings provisions.
Sec. 1282. Implementation.
Sec. 1283. Transfer of resources.
Sec. 1284. Effective date.
Sec. 1285. Service allocation.
Sec. 1286. Authorization of appropriations.
Sec. 1287. Conforming amendments to the Federal Power Act.
Sec. 1288. Merger review reform.
Subtitle H--Definitions
Sec. 1291. Definitions.
Sec. 1292. Energy policy and conservation technical correction.
Subtitle I--Technical and Conforming Amendments
Sec. 1295. Conforming amendments.
TITLE XIII--STUDIES
Sec. 1301. Energy and water saving measures in congressional buildings.
Sec. 1302. Increased hydroelectric generation at existing Federal
facilities.
Sec. 1303. Alaska Natural Gas Pipeline.
Sec. 1304. Renewable energy on Federal land.
Sec. 1305. Coalbed methane study.
Sec. 1306. Backup fuel capability study.
Sec. 1307. Indian land rights-of-way.
Sec. 1308. Review of Energy Policy Act of 1992 programs.
Sec. 1309. Study of feasibility and effects of reducing use of fuel for
automobiles.
Sec. 1310. Hybrid distributed power systems.
Sec. 1311. Mobility of scientific and technical personnel.
Sec. 1312. National Academy of Sciences report.
Sec. 1313. Report on research and development program evaluation
methodologies.
Sec. 1314. Transmission system monitoring study.
Sec. 1315. Interagency review of competition in the wholesale and
retail markets for electric energy.
Sec. 1316. Study on the benefits of economic dispatch.
Sec. 1317. Study of rapid electrical grid restoration.
Sec. 1318. Study of distributed generation.
Sec. 1319. Study on inventory of petroleum and natural gas storage.
Sec. 1320. Natural gas supply shortage report.
Sec. 1321. Split-estate Federal oil and gas leasing and development
practices.
Sec. 1322. Resolution of Federal resource development conflicts in the
Powder River Basin.
Sec. 1323. Study of energy efficiency standards.
Sec. 1324. Telecommuting study.
Sec. 1325. Oil bypass filtration technology.
Sec. 1326. Total integrated thermal systems.
Sec. 1327. University collaboration.
Sec. 1328. Hydrogen participation study.
Sec. 1329. Overall employment in a hydrogen economy.
Sec. 1330. Study of best management practices for energy research and
development programs.
Sec. 1331. Effect of electrical contaminants on reliability of energy
production systems.
Sec. 1332. Alternative fuels reports.
Sec. 1333. Final action on refunds for excessive charges.
Sec. 1334. Fuel cell and hydrogen technology study.
Sec. 1335. Passive solar technologies.
Sec. 1336. Study of link between energy security and increases in
vehicle miles traveled.
Sec. 1337. Study of availability of skilled workers.
Sec. 1338. Science Study on Cumulative Impacts of Multiple Offshore
Liquefied Natural Gas Facilities.
TITLE XIV--INCENTIVES FOR INNOVATIVE TECHNOLOGIES
Sec. 1401. Definitions.
Sec. 1402. Terms and conditions.
Sec. 1403. Eligible projects.
Sec. 1404. Authorization of appropriations.
TITLE XV--ENERGY POLICY TAX INCENTIVES
Sec. 1500. Short title; amendment of 1986 Code.
Subtitle A--Electricity Infrastructure
Sec. 1501. Extension and modification of renewable electricity
production credit.
Sec. 1502. Application of section 45 credit to agricultural
cooperatives.
Sec. 1503 Expansion of resources to wave, current, tidal, and ocean
thermal energy.
Sec. 1504. Clean renewable energy bonds.
Sec. 1505. Treatment of income of certain electric cooperatives.
Sec. 1506. Dispositions of transmission property to implement FERC
restructuring policy.
Sec. 1507. Credit for production from advanced nuclear power
facilities.
Sec. 1508. Credit for investment in clean coal facilities.
Sec. 1509. Clean energy coal bonds.
Subtitle B--Domestic Fossil Fuel Security
Sec. 1511. Credit for investment in clean coke/cogeneration
manufacturing facilities.
Sec. 1512. Temporary expensing for equipment used in refining of liquid
fuels.
Sec. 1513. Pass through to patrons of deduction for capital costs
incurred by small refiner cooperatives in
complying with Environmental Protection
Agency sulfur regulations.
Sec. 1514. Modifications to enhanced oil recovery credit.
Sec. 1515. Natural gas distribution lines treated as 15-year property.
Subtitle C--Conservation and Energy Efficiency Provisions
Sec. 1521. Energy efficient commercial buildings deduction.
Sec. 1522. Credit for construction of new energy efficient homes.
Sec. 1523. Deduction for business energy property.
Sec. 1524. Credit for certain nonbusiness energy property.
Sec. 1525. Energy credit for combined heat and power system property.
Sec. 1526. Credit for energy efficient appliances.
Sec. 1527. Credit for residential energy efficient property.
Sec. 1528. Credit for business installation of qualified fuel cells and
stationary microturbine power plants.
Sec. 1529. Business solar investment tax credit.
Subtitle D--Alternative Motor Vehicles and Fuels Incentives
Sec. 1531. Alternative motor vehicle credit.
Sec. 1532. Modification of credit for qualified electric vehicles.
Sec. 1533. Credit for installation of alternative fueling stations.
Sec. 1534. Volumetric excise tax credit for alternative fuels.
Sec. 1535. Extension of excise tax provisions and income tax credit for
biodiesel.
Subtitle E--Additional Energy Tax Incentives
Sec. 1541. 10-year recovery period for underground natural gas storage
facility property.
Sec. 1542. Expansion of research credit.
Sec. 1543. Small agri-biodiesel producer credit.
Sec. 1544. Improvements to small ethanol producer credit.
Sec. 1545. Credit for equipment for processing or sorting materials
gathered through recycling.
Sec. 1546. 5-year net operating loss carryover if any resulting refund
is used for electric transmission
equipment.
Sec. 1547. Credit for qualifying pollution control equipment.
Sec. 1548. Credit for production of coal owned by Indian tribes.
Sec. 1549. Credit for replacement stoves meeting environmental
standards in non-attainment areas.
Sec. 1550. Exemption for equipment for transporting bulk beds of farm
crops from excise tax on retail sale of
heavy trucks and trailers.
Sec. 1551. National Academy of Sciences study and report.
Sec. 1552. Income tax exclusion for certain fuel costs of rural
carpools.
Sec. 1553. 3-year applicable recovery period for depreciation of
qualified energy management devices.
Sec. 1554. Exception from volume cap for certain cooling facilities.
Subtitle F--Revenue Raising Provisions
Sec. 1561. Treatment of kerosene for use in aviation.
Sec. 1562. Repeal of ultimate vendor refund claims with respect to
farming.
Sec. 1563. Refunds of excise taxes on exempt sales of fuel by credit
card.
Sec. 1564. Additional requirement for exempt purchases.
Sec. 1565. Reregistration in event of change in ownership.
Sec. 1566. Treatment of deep-draft vessels.
Sec. 1567. Reconciliation of on-loaded cargo to entered cargo.
Sec. 1568. Taxation of gasoline blendstocks and kerosene.
Sec. 1569. Nonapplication of export exemption to delivery of fuel to
motor vehicles removed from United States.
Sec. 1570. Penalty with respect to certain adulterated fuels.
Sec. 1571. Oil Spill Liability Trust Fund financing rate.
Sec. 1572. Extension of Leaking Underground Storage Tank Trust Fund
financing rate.
Sec. 1573. Tire excise tax modification.
TITLE XVI--CLIMATE CHANGE
Subtitle A--National Climate Change Technology Deployment
Sec. 1601. Greenhouse gas intensity reducing technology strategies.
Sec. 1602. Climate infrastructure credit.
Subtitle B--Climate Change Technology Deployment in Developing
Countries
Sec. 1611. Climate change technology deployment in developing
countries.
Sec. 1612. Sense of the Senate on climate change.
SEC. 2. DEFINITIONS.
In this Act:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Institution of higher education.--
(A) In general.--The term ``institution of higher
education'' has the meaning given the term in section
101(a) of the Higher Education Act of 1065 (20 U.S.C.
1001(a)).
(B) Inclusion.--The term ``institution of higher
education'' includes an organization that--
(i) is organized, and at all times
thereafter operated, exclusively for the
benefit of, to perform the functions of, or to
carry out the functions of 1 or more
organizations referred to in subparagraph (A);
and
(ii) is operated, supervised, or controlled
by or in connection with 1 or more of those
organizations.
(3) National laboratory.--The term ``National Laboratory''
means any of the following laboratories owned by the
Department:
(A) Ames Laboratory.
(B) Argonne National Laboratory.
(C) Brookhaven National Laboratory.
(D) Fermi National Accelerator Laboratory.
(E) Idaho National Laboratory.
(F) Lawrence Berkeley National Laboratory.
(G) Lawrence Livermore National Laboratory.
(H) Los Alamos National Laboratory.
(I) National Energy Technology Laboratory.
(J) National Renewable Energy Laboratory.
(K) Oak Ridge National Laboratory.
(L) Pacific Northwest National Laboratory.
(M) Princeton Plasma Physics Laboratory.
(N) Sandia National Laboratories.
(O) Savannah River National Laboratory.
(P) Stanford Linear Accelerator Center.
(Q) Thomas Jefferson National Accelerator Facility.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(5) Small business concern.--The term ``small business
concern'' has the meaning given the term in section 3 of the
Small Business Act (15 U.S.C. 632).
TITLE I--ENERGY EFFICIENCY
Subtitle A--Federal Programs
SEC. 101. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.
(a) In General.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.) is amended--
(1) by redesignating section 551 (42 U.S.C. 8259) as
section 553; and
(2) by inserting after section 550 (42 U.S.C. 8258b) the
following:
``SEC. 551. ENERGY AND WATER SAVINGS MEASURES IN CONGRESSIONAL
BUILDINGS.
``(a) Definitions.--In this section:
``(1) Congressional building.--The term `congressional
building' means a facility administered by Congress.
``(2) Plan.--The term `plan' means an energy conservation
and management plan developed under subsection (b)(1).
``(b) Plan.--
``(1) In general.--The Architect of the Capitol shall
develop, update, and implement a cost-effective energy
conservation and management plan for congressional buildings to
meet the energy performance requirements for Federal buildings
established under section 543(a)(1).
``(2) Requirements.--The plan shall include--
``(A) a description of the life-cycle cost analysis
used to determine the cost-effectiveness of proposed
energy efficiency projects;
``(B) a schedule that ensures that complete energy
surveys of all congressional buildings are conducted
every 5 years to determine the cost and payback period
of energy and water conservation measures;
``(C) a strategy for installation of life-cycle
cost-effective energy and water conservation measures;
``(D) the results of a study of the costs and
benefits of installation of submetering in
congressional buildings; and
``(E) information packages and `how-to' guides for
each Member and employing authority of Congress that
describe simple and cost-effective methods to save
energy and taxpayer dollars in congressional buildings.
``(3) Submission to congress.--Not later than 180 days
after the date of enactment of the Energy Policy Act of 2005,
the Architect of the Capitol shall submit to Congress the plan
developed under paragraph (1).
``(c) Annual Report.--
``(1) In general.--The Architect of the Capitol shall
annually submit to Congress a report on congressional energy
management and conservation programs carried out for
congressional buildings under this section.
``(2) Requirements.--A report submitted under paragraph (1)
shall describe in detail--
``(A) energy expenditures and savings estimates for
each congressional building;
``(B) any energy management and conservation
projects for congressional buildings; and
``(C) future priorities to ensure compliance with
this section.''.
(b) Conforming Amendment.--The table of contents of the National
Energy Conservation Policy Act is amended--
(1) by redesignating the item relating to section 551 as
section 553; and
(2) by inserting after the item relating to section 550 the
following:
``Sec. 551. Energy and water savings measures in congressional
buildings.''.
(c) Repeal.--Section 310 of the Legislative Branch Appropriations
Act, 1999 (2 U.S.C. 1815), is repealed.
SEC. 102. ENERGY MANAGEMENT REQUIREMENTS.
(a) Energy Reduction Goals.--Section 543(a) of the National Energy
Conservation Policy Act (42 U.S.C. 8253(a)) is amended--
(1) in paragraph (1), by striking ``Subject to'' and all
that follows and inserting ``(A) Subject to paragraph (2), each
agency shall apply energy conservation measures to, and shall
improve the design for the construction of, the Federal
buildings of the agency (including each industrial or
laboratory facility) so that the energy consumption for each
gross square foot of the Federal buildings of the agency for
fiscal years 2006 through 2015 is reduced, as compared with the
energy consumption for each gross square foot of the Federal
buildings of the agency for fiscal year 2004, by the percentage
specified in the following table:
``Fiscal Year Percentage reduction
2006....................................... 2
2007....................................... 4
2008....................................... 6
2009....................................... 8
2010....................................... 10
2011....................................... 12
2012....................................... 14
2013....................................... 16
2014....................................... 18
2015....................................... 20.
``(B) The energy reduction goals and baseline established in
subparagraph (A) supersede--
``(i) all goals and baselines under this paragraph in
effect on the day before the date of enactment of this
subparagraph; and
``(ii) any related reporting requirements.''; and
(2) by adding at the end the following:
``(3) Not later than December 31, 2013, the Secretary shall--
``(A) review the results of the implementation of the
energy performance requirement established under paragraph (1);
and
``(B) submit to Congress recommendations concerning energy
performance requirements for each of fiscal years 2015 through
2024.''.
(b) Exclusions; Review by Secretary; Criteria.--Section 543(c) of
the National Energy Conservation Policy Act (42 U.S.C. 8253(c)) is
amended--
(1) in paragraph (1), by striking ``An agency may exclude''
and all that follows and inserting ``(A) An agency may exclude,
from the energy performance requirement for a fiscal year
established under subsection (a) and the energy management
requirement established under subsection (b), any Federal
building or collection of Federal buildings, if the head of the
agency finds that--
``(i) compliance with those requirements would be
impracticable;
``(ii) the agency has completed and submitted all federally
required energy management reports;
``(iii) the agency has achieved compliance with the energy
efficiency requirements of this Act, the Energy Policy Act of
1992 (42 U.S.C. 13201 et seq.), Executive orders, and other
Federal law; and
``(iv) the agency has implemented all practicable, life-
cycle cost-effective projects with respect to the Federal
building or collection of Federal buildings to be excluded.
``(B) A finding of impracticability under subparagraph (A)(i) shall
be based on--
``(i) the energy intensiveness of activities carried out in
the Federal building or collection of Federal buildings; or
``(ii) the fact that the Federal building or collection of
Federal buildings is used in the performance of a national
security function.'';
(2) in paragraph (2)--
(A) in the second sentence--
(i) by striking ``impracticability
standards'' and inserting ``standards for
exclusion''; and
(ii) by striking ``a finding of
impracticability'' and inserting ``the
exclusion''; and
(B) in the third sentence, by striking ``energy
consumption requirements'' and inserting ``requirements
of subsections (a) and (b)(1)''; and
(3) by adding at the end the following:
``(3) Not later than 180 days after the date of enactment of this
paragraph, the Secretary shall issue guidelines that establish criteria
for exclusions under paragraph (1).''.
(c) Retention of Energy and Water Savings.--Section 546 of the
National Energy Conservation Policy Act (42 U.S.C. 8256) is amended--
(1) in subsection (d)(2)(G), by inserting ``of the Energy
Policy Act of 1992 (42 U.S.C. 8262e)'' after ``159''; and
(2) by adding at the end the following:
``(e) Retention of Energy and Water Savings.--(1) An agency may
retain any funds appropriated to the agency for energy expenditures,
water expenditures, or wastewater treatment expenditures, at buildings
subject to the requirements of subsections (a) and (b) of section 543,
that are not expended because of energy savings or water savings.
``(2) Except as otherwise provided by law, funds described in
paragraph (1) may be used by an agency only for energy efficiency,
water conservation, or unconventional and renewable energy resources
projects.''.
(d) Reports.--Section 548(b) of the National Energy Conservation
Policy Act (42 U.S.C. 8258(b)) is amended--
(1) in the subsection heading, by inserting ``the President
and'' before ``Congress''; and
(2) by inserting ``President and'' before ``Congress''.
(e) Conforming Amendment.--Section 550(d) of the National Energy
Conservation Policy Act (42 U.S.C. 8258b(d)) is amended in the second
sentence by striking ``the 20 percent reduction goal established under
section 543(a) of the National Energy Conservation Policy Act (42
U.S.C. 8253(a)).'' and inserting ``each of the energy reduction goals
established under section 543(a).''.
SEC. 103. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.
Section 543 of the National Energy Conservation Policy Act (42
U.S.C. 8253) is amended by adding at the end the following:
``(e) Metering of Energy Use.--(1)(A) Not later than October 1,
2012, in accordance with guidelines established by the Secretary under
paragraph (2), each Federal building shall, for the purposes of
efficient use of energy and reduction in the cost of electricity used
in the building, be metered or submetered.
``(B) Each agency shall use, to the maximum extent practicable,
advanced meters or advanced metering devices that provide data at least
daily on, and that measure at least hourly, consumption of electricity
in the Federal buildings of the agency.
``(C) The data shall be--
``(i) incorporated into Federal energy tracking systems;
and
``(ii) made available to Federal facility energy managers.
``(2)(A) Not later than 180 days after the date of enactment of
this subsection, the Secretary (in consultation with the Secretary of
Defense, the Administrator of General Services, representatives from
the metering industry, utility industry, energy services industry,
energy efficiency industry, energy efficiency advocacy organizations,
national laboratories, and universities, and Federal facility energy
managers) shall establish guidelines for agencies to carry out
paragraph (1).
``(B) The guidelines shall--
``(i) take into consideration--
``(I) the cost of metering and submetering and the
reduced cost of operation and maintenance expected to
result from metering and submetering;
``(II) the extent to which metering and submetering
are expected to result in increased potential for
energy management, increased potential for energy
savings and energy efficiency improvement, and cost and
energy savings because of utility contract aggregation;
and
``(III) the measurement and verification protocols
of the Department of Energy;
``(ii) include recommendations concerning the amount of
funds and the number of trained personnel necessary to gather
and use the metering information to track and reduce energy
use;
``(iii) establish priorities for types and locations of
buildings to be metered and submetered based on cost-
effectiveness and a schedule of 1 or more dates, not later than
1 year after the date of issuance of the guidelines, on which
paragraph (1) takes effect; and
``(iv) establish exclusions from the requirements of
paragraph (1) based on the de minimis quantity of energy use of
a Federal building, industrial process, or structure.
``(3) Not later than 180 days after the date on which guidelines
are established under paragraph (2), in a report submitted by an agency
under section 548(a), the agency shall submit to the Secretary a plan
describing the manner in which the agency will implement paragraph (1),
including--
``(A) the manner in which the agency will designate
personnel primarily responsible for carrying out that
implementation; and
``(B) demonstration by the agency, complete with
documentation, of any finding that the use of advanced meters
or advanced metering devices described in paragraph (1) is not
practicable.''.
SEC. 104. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.
(a) Requirements.--Part 3 of title V of the National Energy
Conservation Policy Act (42 U.S.C. 8251 et seq.) (as amended by section
101(a)) is amended by inserting after section 551 the following:
``SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.
``(a) Definitions.--In this section:
``(1) The term `Energy Star product' means a product that
is rated for energy efficiency under an Energy Star program.
``(2) The term `Energy Star program' means the program
established by section 324A of the Energy Policy and
Conservation Act.
``(3) The term `executive agency' has the meaning given the
term in section 4 of the Office of Federal Procurement Policy
Act (41 U.S.C. 403).
``(4) The term `FEMP designated product' means a product
that is designated under the Federal Energy Management Program
of the Department of Energy as being among the highest 25
percent of equivalent products for energy efficiency.
``(b) Procurement of Energy Efficient Products.--(1) Except as
provided in paragraph (2), to meet the requirements of an executive
agency for an energy consuming product, the head of the executive
agency shall procure--
``(A) an Energy Star product; or
``(B) a FEMP designated product.
``(2) The head of an executive agency shall not be required to
comply with paragraph (1) if the head of the executive agency specifies
in writing that--
``(A) taking into account energy cost savings, an Energy
Star product or FEMP designated product is not cost-effective
over the life of the product; or
``(B) no Energy Star product or FEMP designated product is
reasonably available that meets the functional requirements of
the executive agency.
``(3) The head of an executive agency shall incorporate criteria
for energy efficiency that are consistent with the criteria used for
rating Energy Star products and FEMP designated products into--
``(A) the specifications for any procurements involving
energy consuming products and systems, including--
``(i) guide specifications;
``(ii) project specifications; and
``(iii) construction, renovation, and services
contracts that include the provision of energy
consuming products and systems; and
``(B) the factors for the evaluation of offers received for
the procurement.
``(c) Listing of Energy Efficient Products in Federal Catalogs.--
(1) Any inventory or listing of products by the General Services
Administration or the Defense Logistics Agency shall clearly identify
and prominently display Energy Star products and FEMP designated
products.
``(2)(A) Except as provided in subparagraph (B), the General
Services Administration or the Defense Logistics Agency shall supply
only Energy Star products or FEMP designated products for all product
categories covered by the Energy Star program or the Federal Energy
Management Program.
``(B) Subparagraph (A) shall not apply if an agency ordering a
product specifies in writing that--
``(i) taking into account energy cost savings, no Energy
Star product or FEMP designated product is cost-effective for
the intended application over the life of the product; or
``(ii) no Energy Star product or FEMP designated product is
available to meet the functional requirements of the ordering
agency.
``(d) Specific Products.--(1) In the case of an electric motor of 1
to 500 horsepower, an executive agency shall select only a premium
efficient motor that meets the standard established by the Secretary
under paragraph (2).
``(2) Not later than 120 days after the date of enactment of this
subsection and after considering the recommendations of associated
electric motor manufacturers and energy efficiency groups, the
Secretary shall establish a standard for premium efficient motors.
``(3)(A) Each Federal agency is encouraged to take actions (such as
appropriate cleaning and maintenance) to maximize the efficiency of air
conditioning and refrigeration equipment, including the use of a system
treatment or additive that--
``(i) would reduce the electricity consumed by air
conditioning and refrigeration equipment; and
``(ii) meets the criteria specified in subparagraph (B).
``(B) A system treatment or additive referred to in subparagraph
(A) shall be--
``(i) determined by the Secretary to be effective in
increasing the efficiency of air conditioning and refrigeration
equipment without having an adverse impact on--
``(I) air conditioning and refrigeration
performance (including cooling capacity); or
``(II) the useful life of the equipment;
``(ii) determined by the Administrator of the Environmental
Protection Agency to be environmentally safe; and
``(iii) shown, in tests conducted by the National Institute
of Standards and Technology, in accordance with Department of
Energy test procedures, to increase the seasonal energy
efficiency ratio (SEER) or energy efficiency ratio (EER)
without having any adverse impact on the system, system
components, the refrigerant or lubricant, or other materials in
the system.
``(4) The results of the tests described in paragraph (3)(B)(iii)
shall be published in the Federal Register for public review and
comment.
``(5) For purposes of this subsection, a hardware device or primary
refrigerant shall not be considered an additive.
``(e) Regulations.--Not later than 180 days after the date of
enactment of this section, the Secretary shall issue guidelines to
carry out this section.''.
(b) Conforming Amendment.--The table of contents of the National
Energy Conservation Policy Act (as amended by section 101(b)) is
amended by inserting after the item relating to section 551 the
following:
``Sec. 552. Federal procurement of energy efficient products.''.
SEC. 105. ENERGY SAVINGS PERFORMANCE CONTRACTS.
(a) Permanent Extension.--Section 801(c) of the National Energy
Conservation Policy Act (42 U.S.C. 8287(c)) is amended by striking
``2006'' and inserting ``2016''.
(b) Extension of Authority.--Any energy savings performance
contract entered into under section 801 of the National Energy
Conservation Policy Act (42 U.S.C. 8287) after October 1, 2003, and
before the date of enactment of this Act, shall be considered to have
been entered into under that section.
SEC. 106. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY INTENSITY.
(a) Definition of Energy Intensity.--In this section, the term
``energy intensity'' means the primary energy consumed for each unit of
physical output in an industrial process.
(b) Voluntary Agreements.--The Secretary may enter into voluntary
agreements with 1 or more persons in industrial sectors that consume
significant quantities of primary energy for each unit of physical
output to reduce the energy intensity of the production activities of
the persons.
(c) Goal.--Voluntary agreements under this section shall have as a
goal the reduction of energy intensity by not less than 2.5 percent
each year during the period of calendar years 2007 through 2016.
(d) Recognition.--The Secretary, in cooperation with other
appropriate Federal agencies, shall develop mechanisms to recognize and
publicize the achievements of participants in voluntary agreements
under this section.
(e) Technical Assistance.--A person that enters into an agreement
under this section and continues to make a good faith effort to achieve
the energy efficiency goals specified in the agreement shall be
eligible to receive from the Secretary a grant or technical assistance,
as appropriate, to assist in the achievement of those goals.
(f) Report.--Not later than each of June 30, 2012, and June 30,
2017, the Secretary shall submit to Congress a report that--
(1) evaluates the success of the voluntary agreements under
this section; and
(2) provides independent verification of a sample of the
energy savings estimates provided by participating firms.
SEC. 107. FEDERAL BUILDING PERFORMANCE STANDARDS.
Section 305(a) of the Energy Conservation and Production Act (42
U.S.C. 6834(a)) is amended--
(1) in paragraph (2)(A), by striking ``CABO Model Energy
Code, 1992 (in the case of residential buildings) or ASHRAE
Standard 90.1-1989'' and inserting ``the 2004 International
Energy Conservation Code (in the case of residential buildings)
or ASHRAE Standard 90.1-2004''; and
(2) by adding at the end the following:
``(3)(A) Not later than 1 year after the date of enactment of this
paragraph, the Secretary shall establish, by rule, revised Federal
building energy efficiency performance standards that require that--
``(i) if life-cycle cost-effective for new Federal
buildings--
``(I) the buildings be designed to achieve energy
consumption levels that are at least 30 percent below
the levels established in the version of the ASHRAE
Standard or the International Energy Conservation Code,
as appropriate, that is in effect as of the date of
enactment of this paragraph; and
``(II) sustainable design principles are applied to
the siting, design, and construction of all new and
replacement buildings; and
``(ii) if water is used to achieve energy efficiency, water
conservation technologies shall be applied to the extent that
the technologies are life-cycle cost-effective.
``(B) Not later than 1 year after the date of approval of each
subsequent revision of the ASHRAE Standard or the International Energy
Conservation Code, as appropriate, the Secretary shall determine, based
on the cost-effectiveness of the requirements under the amendment,
whether the revised standards established under this paragraph should
be updated to reflect the amendment.
``(C) In the budget request of the Federal agency for each fiscal
year and each report submitted by the Federal agency under section
548(a) of the National Energy Conservation Policy Act (42 U.S.C.
8258(a)), the head of each Federal agency shall include--
``(i) a list of all new Federal buildings owned, operated,
or controlled by the Federal agency; and
``(ii) a statement specifying whether the Federal buildings
meet or exceed the revised standards established under this
paragraph.''.
SEC. 108. INCREASED USE OF RECOVERED MINERAL COMPONENT IN FEDERALLY
FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT OR
CONCRETE.
(a) Amendment.--Subtitle F of the Solid Waste Disposal Act (42
U.S.C. 6961 et seq.) is amended by adding at the end the following:
``increased use of recovered mineral component in federally funded
projects involving procurement of cement or concrete
``Sec. 6005. (a) Definitions.--In this section:
``(1) Agency head.--The term `agency head' means--
``(A) the Secretary of Transportation; and
``(B) the head of any other Federal agency that, on
a regular basis, procures, or provides Federal funds to
pay or assist in paying the cost of procuring, material
for cement or concrete projects.
``(2) Cement or concrete project.--The term `cement or
concrete project' means a project for the construction or
maintenance of a highway or other transportation facility or a
Federal, State, or local government building or other public
facility that--
``(A) involves the procurement of cement or
concrete; and
``(B) is carried out, in whole or in part, using
Federal funds.
``(3) Recovered mineral component.--The term `recovered
mineral component' means--
``(A) ground granulated blast furnace slag;
``(B) coal combustion fly ash; and
``(C) any other waste material or byproduct
recovered or diverted from solid waste that the
Administrator, in consultation with an agency head,
determines should be treated as recovered mineral
component under this section for use in cement or
concrete projects paid for, in whole or in part, by the
agency head.
``(b) Implementation of Requirements.--
``(1) In general.--Not later than 1 year after the date of
enactment of this section, the Administrator and each agency
head shall take such actions as are necessary to implement
fully all procurement requirements and incentives in effect as
of the date of enactment of this section (including guidelines
under section 6002) that provide for the use of cement and
concrete incorporating recovered mineral component in cement or
concrete projects.
``(2) Priority.--In carrying out paragraph (1), an agency
head shall give priority to achieving greater use of recovered
mineral component in cement or concrete projects for which
recovered mineral components historically have not been used or
have been used only minimally.
``(3) Federal procurement requirements.--The Administrator
and each agency head shall carry out this subsection in
accordance with section 6002.
``(c) Full Implementation Study.--
``(1) In general.--The Administrator, in cooperation with
the Secretary of Transportation and the Secretary of Energy,
shall conduct a study to determine the extent to which
procurement requirements, when fully implemented in accordance
with subsection (b), may realize energy savings and
environmental benefits attainable with substitution of
recovered mineral component in cement used in cement or
concrete projects.
``(2) Matters to be addressed.--The study shall--
``(A) quantify--
``(i) the extent to which recovered mineral
components are being substituted for Portland
cement, particularly as a result of procurement
requirements; and
``(ii) the energy savings and environmental
benefits associated with the substitution;
``(B) identify all barriers in procurement
requirements to greater realization of energy savings
and environmental benefits, including barriers
resulting from exceptions from the law; and
``(C)(i) identify potential mechanisms to achieve
greater substitution of recovered mineral component in
types of cement or concrete projects for which
recovered mineral components historically have not been
used or have been used only minimally;
``(ii) evaluate the feasibility of establishing
guidelines or standards for optimized substitution
rates of recovered mineral component in those cement or
concrete projects; and
``(iii) identify any potential environmental or
economic effects that may result from greater
substitution of recovered mineral component in those
cement or concrete projects.
``(3) Report.--Not later than 30 months after the date of
enactment of this section, the Administrator shall submit to
Congress a report on the study.
``(d) Additional Procurement Requirements.--Unless the study
conducted under subsection (c) identifies any effects or other problems
described in subsection (c)(2)(C)(iii) that warrant further review or
delay, the Administrator and each agency head shall, not later than 1
year after the date on which the report under subsection (c)(3) is
submitted, take additional actions under this Act to establish
procurement requirements and incentives that provide for the use of
cement and concrete with increased substitution of recovered mineral
component in the construction and maintenance of cement or concrete
projects--
``(1) to realize more fully the energy savings and
environmental benefits associated with increased substitution;
and
``(2) to eliminate barriers identified under subsection
(c)(2)(B).
``(e) Effect of Section.--Nothing in this section affects the
requirements of section 6002 (including the guidelines and
specifications for implementing those requirements).''.
(b) Conforming Amendment.--The table of contents of the Solid Waste
Disposal Act is amended by adding after the item relating to section
6004 the following:
``Sec. 6005. Increased use of recovered mineral component in federally
funded projects involving procurement of
cement or concrete.''.
Subtitle B--Energy Assistance and State Programs
SEC. 121. WEATHERIZATION ASSISTANCE.
Section 422 of the Energy Conservation and Production Act (42
U.S.C. 6872) is amended by striking ``for fiscal years 1999 through
2003 such sums as may be necessary'' and inserting ``$325,000,000 for
fiscal year 2006, $400,000,000 for fiscal year 2007, and $500,000,000
for fiscal year 2008''.
SEC. 122. STATE ENERGY PROGRAMS.
(a) State Energy Conservation Plans.--Section 362 of the Energy
Policy and Conservation Act (42 U.S.C. 6322) is amended by adding at
the end the following:
``(g)(1) The Secretary shall, at least once every 3 years, invite
the Governor of each State to review and, if necessary, revise the
energy conservation plan of the State submitted under subsection (b) or
(e).
``(2) A review conducted under paragraph (1) should--
``(A) consider the energy conservation plans of other
States within the region; and
``(B) 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 to read as
follows:
``state energy efficiency goals
``Sec. 364. Each State energy conservation plan with respect to
which assistance is made available under this part on or after the date
of enactment of the Energy Policy Act of 2005--
``(1) shall contain a goal, consisting of an improvement of
25 percent or more in the efficiency of use of energy in the
State concerned in calendar year 2012 as compared to calendar
year 1992; and
``(2) may contain interim goals.''.
(c) Authorization of Appropriations.--Section 365(f) of the Energy
Policy and Conservation Act (42 U.S.C. 6325(f)) is amended by striking
``for fiscal years 1999 through 2003 such sums as may be necessary''
and inserting ``$100,000,000 for each of fiscal years 2006 and 2007 and
$125,000,000 for fiscal year 2008''.
SEC. 123. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.
(a) Definitions.--In this section:
(1) Eligible state.--The term ``eligible State'' means a
State that meets the requirements of subsection (b).
(2) Energy star program.--The term ``Energy Star program''
means the program established by section 324A of the Energy
Policy and Conservation Act (as added by section 131(a)).
(3) Residential energy star product.--The term
``residential Energy Star product'' means a product for a
residence that is rated for energy efficiency under the Energy
Star program.
(4) State energy office.--The term ``State energy office''
means the State agency responsible for developing State energy
conservation plans under section 362 of the Energy Policy and
Conservation Act (42 U.S.C. 6322).
(5) State program.--The term ``State program'' means a
State energy efficient appliance rebate program described in
subsection (b)(1).
(b) Eligible States.--A State shall be eligible to receive an
allocation under subsection (c) if the State--
(1) establishes (or has established) a State energy
efficient appliance rebate program to provide rebates to
residential consumers for the purchase of residential Energy
Star products to replace used appliances of the same type;
(2) submits an application for the allocation at such time,
in such form, and containing such information as the Secretary
may require; and
(3) provides assurances satisfactory to the Secretary that
the State will use the allocation to supplement, but not
supplant, funds made available to carry out the State program.
(c) Amount of Allocations.--
(1) In general.--Subject to paragraph (2), for each fiscal
year, the Secretary shall allocate to the State energy office
of each eligible State to carry out subsection (d) an amount
equal to the product obtained by multiplying--
(A) the amount made available under subsection (f)
for the fiscal year; and
(B) by the ratio that--
(i) the population of the State in the most
recent calendar year for which data are
available; bears to
(ii) the total population of all eligible
States in that calendar year.
(2) Minimum allocations.--For each fiscal year, the amounts
allocated under this subsection shall be adjusted
proportionately so that no eligible State is allocated a sum
that is less than such minimum amount as shall be determined by
the Secretary.
(d) Use of Allocated Funds.--The allocation to a State energy
office under subsection (c) may be used to pay not more than 50 percent
of the cost of establishing and carrying out a State program.
(e) Issuance of Rebates.--
(1) In general.--A rebate may be provided to a residential
consumer that meets the requirements of the State program.
(2) Amount.--The amount of a rebate shall be determined by
the State energy office, taking into consideration--
(A) the amount of the allocation to the State
energy office under subsection (c);
(B) the amount of any Federal or State tax
incentive available for the purchase of the residential
Energy Star product; and
(C) the difference between--
(i) the cost of the residential Energy Star
product; and
(ii) the cost of an appliance that is not a
residential Energy Star product, but is of the
same type as, and is the nearest capacity,
performance, and other relevant characteristics
(as determined by the State energy office) to,
the residential Energy Star product.
(f) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $50,000,000 for
each of fiscal years 2006 through 2010.
SEC. 124. ENERGY EFFICIENT PUBLIC BUILDINGS.
(a) Grants.--The Secretary may make grants to the State agency
responsible for developing State energy conservation plans under
section 362 of the Energy Policy and Conservation Act (42 U.S.C. 6322),
or a State agency designated by the Governor of the State, to assist
units of local government in the State in improving the energy
efficiency of public buildings and facilities through--
(1) construction of new energy efficient public buildings
that use at least 30 percent less energy than a comparable
public building constructed in compliance with standards
prescribed in--
(A) the most recent version of the International
Energy Conservation Code; or
(B) a similar State code intended to achieve
substantially equivalent efficiency levels; or
(2) renovation of existing public buildings to achieve
reductions in energy use of at least 30 percent as compared to
the baseline energy use in the buildings before renovation,
assuming a 3-year, weather-normalized average for calculating
the baseline.
(b) Administration.--State energy offices receiving grants under
this section shall--
(1) maintain any records and evidence of compliance that
the Secretary may require; and
(2) to encourage planning, financing, and design of energy
efficient public buildings by units of local government--
(A) develop and distribute information and
materials; and
(B) conduct programs to provide technical services
and assistance.
(c) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
the Secretary to carry out this section $30,000,000 for each of
fiscal years 2006 through 2010.
(2) Administrative expenses.--Not more than 10 percent of
amounts made available under paragraph (1) shall be used for
administrative expenses.
SEC. 125. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT PROGRAM.
(a) Definition of Indian Tribe.--In this section, the term ``Indian
tribe'' has the meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b).
(b) Grants.--
(1) In general.--The Secretary may provide grants, on a
competitive basis, to units of local government, private or
nonprofit community development organizations, and economic
development entities of Indian tribes--
(A) to improve energy efficiency;
(B) to identify and develop alternative, renewable,
and distributed energy supplies; and
(C) to increase energy conservation in low-income
rural and urban communities.
(2) Eligible activities.--The following activities are
eligible for grants under paragraph (1):
(A) Investments that develop alternative,
renewable, and distributed energy supplies.
(B) Energy efficiency projects and energy
conservation programs.
(C) Studies and other activities that improve
energy efficiency in low-income rural and urban
communities.
(D) Planning and development assistance for
increasing the energy efficiency of buildings and
facilities.
(E) Technical and financial assistance to units of
local government and private entities to develop new
renewable and distributed sources of power or combined
heat and power generation.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $20,000,000 for
each of fiscal years 2006 through 2010.
SEC. 126. STATE TECHNOLOGIES ADVANCEMENT COLLABORATIVE.
(a) In General.--The Secretary, in cooperation with the States,
shall establish a cooperative program for research, development,
demonstration, and deployment of technologies in which there is a
common Federal and State energy efficiency, renewable energy, and
fossil energy interest, to be known as the ``State Technologies
Advancement Collaborative'' (referred to in this section as the
``Collaborative'').
(b) Duties.--The Collaborative shall--
(1) leverage Federal and State funding through cost-shared
activity;
(2) reduce redundancies in Federal and State funding; and
(3) create multistate projects to be awarded through a
competitive process.
(c) Administration.--The Collaborative shall be administered
through an agreement between the Department and appropriate State-based
organizations.
(d) Funding Sources.--Funding for the Collaborative may be provided
from--
(1) amounts specifically appropriated for the
Collaborative; or
(2) amounts that may be allocated from other appropriations
without changing the purpose for which the amounts are
appropriated.
(e) Authorization of Appropriations.--There are authorized to carry
out this section such sums as are necessary for each of fiscal years
2006 through 2010.
SEC. 127. STATE BUILDING ENERGY EFFICIENCY CODES INCENTIVES.
Section 304(e) of the Energy Conservation and Production Act (42
U.S.C. 6833(e)) is amended--
(1) in paragraph (1), by inserting before the period at the
end of the first sentence the following: ``, including
increasing and verifying compliance with such codes''; and
(2) by striking paragraph (2) and inserting the following:
``(2) Additional funding shall be provided under this subsection
for implementation of a plan to achieve and document at least a 90
percent rate of compliance with residential and commercial building
energy efficiency codes, based on energy performance--
``(A) to a State that has adopted and is implementing, on a
statewide basis--
``(i) a residential building energy efficiency code
that meets or exceeds the requirements of the 2004
International Energy Conservation Code, or any
succeeding version of that code that has received an
affirmative determination from the Secretary under
subsection (a)(5)(A); and
``(ii) a commercial building energy efficiency code
that meets or exceeds the requirements of the ASHRAE
Standard 90.1-2004, or any succeeding version of that
standard that has received an affirmative determination
from the Secretary under subsection (b)(2)(A); or
``(B) in a State in which there is no statewide energy code
either for residential buildings or for commercial buildings,
to a local government that has adopted and is implementing
residential and commercial building energy efficiency codes, as
described in subparagraph (A).
``(3) Of the amounts made available under this subsection, the
Secretary may use $500,000 for each fiscal year to train State and
local officials to implement codes described in paragraph (2).
``(4)(A) There are authorized to be appropriated to carry out this
subsection--
``(i) $25,000,000 for each of fiscal years 2006 through
2010; and
``(ii) such sums as are necessary for fiscal year 2011 and
each fiscal year thereafter.
``(B) Funding provided to States under paragraph (2) for each
fiscal year shall not exceed \1/2\ of the excess of funding under this
subsection over $5,000,000 for the fiscal year.''.
Subtitle C--Energy Efficient Products
SEC. 131. ENERGY STAR PROGRAM.
(a) In General.--The Energy Policy and Conservation Act is amended
by inserting after section 324 (42 U.S.C. 6294) the following:
``energy star program
``Sec. 324A. (a) In General.--There is established within the
Department of Energy and the Environmental Protection Agency a
voluntary program to identify and promote energy-efficient products and
buildings in order to reduce energy consumption, improve energy
security, and reduce pollution through voluntary labeling of, or other
forms of communication about, products and buildings that meet the
highest energy conservation standards.
``(b) Division of Responsibilities.--Responsibilities under the
program shall be divided between the Department of Energy and the
Environmental Protection Agency in accordance with the terms of
applicable agreements between those agencies.
``(c) Duties.--The Administrator and the Secretary shall--
``(1) promote Energy Star compliant technologies as the
preferred technologies in the marketplace for--
``(A) achieving energy efficiency; and
``(B) reducing pollution;
``(2) work to enhance public awareness of the Energy Star
label, including by providing special outreach to small
businesses;
``(3) preserve the integrity of the Energy Star label;
``(4) regularly update Energy Star product criteria for
product categories;
``(5) solicit comments from interested parties prior to
establishing or revising an Energy Star product category,
specification, or criterion (or prior to effective dates for
any such product category, specification, or criterion);
``(6) on adoption of a new or revised product category,
specification, or criterion, provide reasonable notice to
interested parties of any changes (including effective dates)
in product categories, specifications, or criteria, along
with--
``(A) an explanation of the changes; and
``(B) as appropriate, responses to comments
submitted by interested parties; and
``(7) provide appropriate lead time (which shall be 270
days, unless the Agency or Department specifies otherwise)
prior to the applicable effective date for a new or a
significant revision to a product category, specification, or
criterion, taking into account the timing requirements of the
manufacturing, product marketing, and distribution process for
the specific product addressed.
``(d) Deadlines.--The Secretary shall establish new qualifying
levels--
``(1) not later than January 1, 2006, for clothes washers
and dishwashers, effective beginning January 1, 2007; and
``(2) not later than January 1, 2008, for clothes washers,
effective beginning January 1, 2010.''.
(b) Table of Contents Amendment.--The table of contents of the
Energy Policy and Conservation Act (42 U.S.C. prec. 6201) is amended by
inserting after the item relating to section 324 the following:
``Sec. 324A. Energy Star program.''.
SEC. 132. HVAC MAINTENANCE CONSUMER EDUCATION PROGRAM.
Section 337 of the Energy Policy and Conservation Act (42 U.S.C.
6307) is amended by adding at the end the following:
``(c) HVAC Maintenance.--(1) To ensure that installed air
conditioning and heating systems operate at maximum rated efficiency
levels, the Secretary shall, not later than 180 days after the date of
enactment of this subsection, carry out a program to educate homeowners
and small business owners concerning the energy savings from properly
conducted maintenance of air conditioning, heating, and ventilating
systems.
``(2) The Secretary shall carry out the program under paragraph
(1), on a cost-shared basis, in cooperation with the Administrator of
the Environmental Protection Agency and any other entities that the
Secretary determines to be appropriate, including industry trade
associations, industry members, and energy efficiency organizations.
``(d) Small Business Education and Assistance.--(1) The
Administrator of the Small Business Administration, in consultation
with the Secretary and the Administrator of the Environmental
Protection Agency, shall develop and coordinate a Government-wide
program, building on the Energy Star for Small Business Program, to
assist small businesses in--
``(A) becoming more energy efficient;
``(B) understanding the cost savings from improved energy
efficiency;
``(C) understanding and accessing Federal procurement
opportunities with regard to Energy Star technologies and
products; and
``(D) identifying financing options for energy efficiency
upgrades.
``(2) The Secretary, the Administrator of the Environmental
Protection Agency, and the Administrator of the Small Business
Administration shall make program information available to small
business concerns directly through the district offices and resource
partners of the Small Business Administration, including small business
development centers, women's business centers, and the Service Corps of
Retired Executives (SCORE), and through other Federal agencies,
including the Federal Emergency Management Agency and the Department of
Agriculture.
``(3) The Secretary, on a cost shared basis in cooperation with the
Administrator of the Environmental Protection Agency, shall provide to
the Small Business Administration all advertising, marketing, and other
written materials necessary for the dissemination of information under
paragraph (2).
``(4) There are authorized to be appropriated such sums as may be
necessary to carry out this subsection, which shall remain available
until expended.''.
SEC. 133. PUBLIC ENERGY EDUCATION PROGRAM.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall convene an organizational
conference for the purpose of establishing an ongoing, self-sustaining
national public energy education program.
(b) Participants.--The Secretary shall invite to participate in the
conference individuals and entities representing all aspects of energy
production and distribution, including--
(1) industrial firms;
(2) professional societies;
(3) educational organizations;
(4) trade associations; and
(5) governmental agencies.
(c) Purpose, Scope, and Structure.--
(1) Purpose.--The purpose of the conference shall be to
establish an ongoing, self-sustaining national public energy
education program to examine and recognize interrelationships
between energy sources in all forms, including--
(A) conservation and energy efficiency;
(B) the role of energy use in the economy; and
(C) the impact of energy use on the environment.
(2) Scope and structure.--Taking into consideration the
purpose described in paragraph (1), the participants in the
conference invited under subsection (b) shall design the scope
and structure of the program described in subsection (a).
(d) Technical Assistance.--The Secretary shall provide technical
assistance and other guidance necessary to carry out the program
described in subsection (a).
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 134. ENERGY EFFICIENCY PUBLIC INFORMATION INITIATIVE.
(a) In General.--The Secretary shall carry out a comprehensive
national program, including advertising and media awareness, to inform
consumers about--
(1) the need to reduce energy consumption during the 4-year
period beginning on the date of enactment of this Act;
(2) the benefits to consumers of reducing consumption of
electricity, natural gas, and petroleum, particularly during
peak use periods;
(3) the importance of low energy costs to economic growth
and preserving manufacturing jobs in the United States; and
(4) practical, cost-effective measures that consumers can
take to reduce consumption of electricity, natural gas, and
gasoline, including--
(A) maintaining and repairing heating and cooling
ducts and equipment;
(B) weatherizing homes and buildings;
(C) purchasing energy efficient products; and
(D) proper tire maintenance.
(b) Cooperation.--The program carried out under subsection (a)
shall--
(1) include collaborative efforts with State and local
government officials and the private sector; and
(2) incorporate, to the maximum extent practicable,
successful State and local public education programs.
(c) Report.--Not later than July 1, 2009, the Secretary shall
submit to Congress a report describing the effectiveness of the program
under this section.
(d) Termination of Authority.--The program carried out under this
section shall terminate on December 31, 2010.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $90,000,000 for each of fiscal
years 2006 through 2010.
SEC. 135. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL PRODUCTS.
(a) Definitions.--Section 321 of the Energy Policy and Conservation
Act (42 U.S.C. 6291) is amended--
(1) in paragraph (29)--
(A) in subparagraph (D)--
(i) in clause (i), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-1010-1)'';
(ii) in clause (ii), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-3007-1)''; and
(iii) in clause (iii), by striking ``C78.1-
1978(R1984)'' and inserting ``C78.81-2003 (Data
Sheet 7881-ANSI-1019-1)''; and
(B) by adding at the end the following:
``(M) The term `F34T12 lamp' (also known as a `F40T12/ES
lamp') means a nominal 34 watt tubular fluorescent lamp that is
48 inches in length and 1\1/2\ inches in diameter, and conforms
to ANSI standard C78.81-2003 (Data Sheet 7881-ANSI-1006-1).
``(N) The term `F96T12/ES lamp' means a nominal 60 watt
tubular fluorescent lamp that is 96 inches in length and 1\1/2\
inches in diameter, and conforms to ANSI standard C78.81-2003
(Data Sheet 7881-ANSI-3006-1).
``(O) The term `F96T12HO/ES lamp' means a nominal 95 watt
tubular fluorescent lamp that is 96 inches in length and 1\1/2\
inches in diameter, and conforms to ANSI standard C78.81-2003
(Data Sheet 7881-ANSI-1017-1).
``(P) The term `replacement ballast' means a ballast that--
``(i) is designed for use to replace an existing
ballast in a previously installed luminaire;
``(ii) is marked `FOR REPLACEMENT USE ONLY';
``(iii) is shipped by the manufacturer in packages
containing not more than 10 ballasts; and
``(iv) has output leads that when fully extended
are a total length that is less than the length of the
lamp with which the ballast is intended to be
operated.'';
(2) in paragraph (30)(S)--
(A) by inserting ``(i)'' before ``The term''; and
(B) by adding at the end the following:
``(ii) The term ``medium base compact fluorescent
lamp'' does not include--
``(I) any lamp that is--
``(aa) specifically designed to be
used for special purpose applications;
and
``(bb) unlikely to be used in
general purpose applications, such as
the applications described in
subparagraph (D); or
``(II) any lamp not described in
subparagraph (D) that is excluded by the
Secretary, by rule, because the lamp is--
``(aa) designed for special
applications; and
``(bb) unlikely to be used in
general purpose applications.''; and
(3) by adding at the end the following:
``(32) The term `battery charger' means a device that
charges batteries for consumer products, including battery
chargers embedded in other consumer products.
``(33)(A) The term `commercial prerinse spray valve' means
a handheld device designed and marketed for use with commercial
dishwashing and ware washing equipment that sprays water on
dishes, flatware, and other food service items for the purpose
of removing food residue before cleaning the items.
``(B) The Secretary may modify the definition of
`commercial prerinse spray valve' by rule--
``(i) to include products--
``(I) that are extensively used in
conjunction with commercial dishwashing and
ware washing equipment;
``(II) the application of standards to
which would result in significant energy
savings; and
``(III) the application of standards to
which would meet the criteria specified in
section 325(o)(4); and
``(ii) to exclude products--
``(I) that are used for special food
service applications;
``(II) that are unlikely to be widely used
in conjunction with commercial dishwashing and
ware washing equipment; and
``(III) the application of standards to
which would not result in significant energy
savings.
``(34) The term `dehumidifier' means a self-contained,
electrically operated, and mechanically encased assembly
consisting of--
``(A) a refrigerated surface (evaporator) that
condenses moisture from the atmosphere;
``(B) a refrigerating system, including an electric
motor;
``(C) an air-circulating fan; and
``(D) means for collecting or disposing of the
condensate.
``(35)(A) The term `distribution transformer' means a
transformer that--
``(i) has an input voltage of 34.5 kilovolts or
less;
``(ii) has an output voltage of 600 volts or less;
and
``(iii) is rated for operation at a frequency of 60
Hertz.
``(B) The term `distribution transformer' does not
include--
``(i) a transformer with multiple voltage taps, the
highest of which equals at least 20 percent more than
the lowest;
``(ii) a transformer that is designed to be used in
a special purpose application and is unlikely to be
used in general purpose applications, such as a drive
transformer, rectifier transformer, auto-transformer,
Uninterruptible Power System transformer, impedance
transformer, regulating transformer, sealed and
nonventilating transformer, machine tool transformer,
welding transformer, grounding transformer, or testing
transformer; or
``(iii) any transformer not listed in clause (ii)
that is excluded by the Secretary by rule because--
``(I) the transformer is designed for a
special application;
``(II) the transformer is unlikely to be
used in general purpose applications; and
``(III) the application of standards to the
transformer would not result in significant
energy savings.
``(36) The term `external power supply' means an external
power supply circuit that is used to convert household electric
current into DC current or lower-voltage AC current to operate
a consumer product.
``(37) The term `illuminated exit sign' means a sign that--
``(A) is designed to be permanently fixed in place
to identify an exit; and
``(B) consists of an electrically powered integral
light source that--
``(i) illuminates the legend `EXIT' and any
directional indicators; and
``(ii) provides contrast between the
legend, any directional indicators, and the
background.
``(38) The term `low-voltage dry-type distribution
transformer' means a distribution transformer that--
``(A) has an input voltage of 600 volts or less;
``(B) is air-cooled; and
``(C) does not use oil as a coolant.
``(39) The term `pedestrian module' means a light signal
used to convey movement information to pedestrians.
``(40) The term `refrigerated bottled or canned beverage
vending machine' means a commercial refrigerator that cools
bottled or canned beverages and dispenses the bottled or canned
beverages on payment.
``(41) The term `standby mode' means the lowest power
consumption mode, as established on an individual product basis
by the Secretary, that--
``(A) cannot be switched off or influenced by the
user; and
``(B) may persist for an indefinite time when an
appliance is--
``(i) connected to the main electricity
supply; and
``(ii) used in accordance with the
instructions of the manufacturer.
``(42) The term `torchiere' means a portable electric lamp
with a reflector bowl that directs light upward to give
indirect illumination.
``(43) The term `traffic signal module' means a standard 8-
inch (200mm) or 12-inch (300mm) traffic signal indication
that--
``(A) consists of a light source, a lens, and all
other parts necessary for operation; and
``(B) communicates movement messages to drivers
through red, amber, and green colors.
``(44) The term `transformer' means a device consisting of
2 or more coils of insulated wire that transfers alternating
current by electromagnetic induction from 1 coil to another to
change the original voltage or current value.
``(45)(A) The term `unit heater' means a self-contained
fan-type heater designed to be installed within the heated
space.
``(B) The term `unit heater' does not include a warm air
furnace.
``(46)(A) The term `high intensity discharge lamp' means an
electric-discharge lamp in which--
``(i) the light-producing arc is stabilized by bulb
wall temperature; and
``(ii) the arc tube has a bulb wall loading in
excess of 3 Watts/cm<SUP>2</SUP>.
``(B) The term `high intensity discharge lamp' includes
mercury vapor, metal halide, and high-pressure sodium lamps
described in subparagraph (A).
``(47)(A) The term `mercury vapor lamp' means a high
intensity discharge lamp in which the major portion of the
light is produced by radiation from mercury operating at a
partial pressure in excess of 100,000 Pa (approximately 1 atm).
``(B) The term `mercury vapor lamp' includes clear,
phosphor-coated, and self-ballasted lamps described in
subparagraph (A).
``(48) The term `mercury vapor lamp ballast' means a device
that is designed and marketed to start and operate mercury
vapor lamps by providing the necessary voltage and current.''.
(b) Test Procedures.--Section 323 of the Energy Policy and
Conservation Act (42 U.S.C. 6293) is amended--
(1) in subsection (b), by adding at the end the following:
``(9) Test procedures for illuminated exit signs shall be based on
the test method used under version 2.0 of the Energy Star program of
the Environmental Protection Agency for illuminated exit signs.
``(10)(A) Test procedures for distribution transformers and low
voltage dry-type distribution transformers shall be based on the
`Standard Test Method for Measuring the Energy Consumption of
Distribution Transformers' prescribed by the National Electrical
Manufacturers Association (NEMA TP 2-1998).
``(B) The Secretary may review and revise the test procedures
established under subparagraph (A).
``(C) For purposes of section 346(a), the test procedures
established under subparagraph (A) shall be considered to be the
testing requirements prescribed by the Secretary under section
346(a)(1) for distribution transformers for which the Secretary makes a
determination that energy conservation standards would--
``(i) be technologically feasible and economically
justified; and
``(ii) result in significant energy savings.
``(11) Test procedures for traffic signal modules and pedestrian
modules shall be based on the test method used under the Energy Star
program of the Environmental Protection Agency for traffic signal
modules, as in effect on the date of enactment of this paragraph.
``(12)(A) Test procedures for medium base compact fluorescent lamps
shall be based on the test methods for compact fluorescent lamps used
under the August 9, 2001, version of the Energy Star program of the
Environmental Protection Agency and the Department of Energy.
``(B) Except as provided in subparagraph (C), medium base compact
fluorescent lamps shall meet all test requirements for regulated
parameters of section 325(cc).
``(C) Notwithstanding subparagraph (B), if manufacturers document
engineering predictions and analysis that support expected attainment
of lumen maintenance at 40 percent rated life and lamp lifetime, medium
base compact fluorescent lamps may be marketed before completion of the
testing of lamp life and lumen maintenance at 40 percent of rated life.
``(13) Test procedures for dehumidifiers shall be based on the test
criteria used under the Energy Star Program Requirements for
Dehumidifiers developed by the Environmental Protection Agency, as in
effect on the date of enactment of this paragraph unless revised by the
Secretary pursuant to this section.
``(14) The test procedure for measuring flow rate for commercial
prerinse spray valves shall be based on American Society for Testing
and Materials Standard F2324, entitled `Standard Test Method for Pre-
Rinse Spray Valves.'
``(15) The test procedure for refrigerated bottled or canned
beverage vending machines shall be based on American National Standards
Institute/American Society of Heating, Refrigerating and Air-
Conditioning Engineers Standard 32.1-2004, entitled `Methods of Testing
for Rating Vending Machines for Bottled, Canned or Other Sealed
Beverages'.''; and
(2) by adding at the end the following:
``(f) Additional Consumer and Commercial Products.--(1) Not later
than 2 years after the date of enactment of this subsection, the
Secretary shall prescribe testing requirements for--
``(A) suspended ceiling fans; and
``(B) refrigerated bottled or canned beverage vending
machines.
``(2) To the maximum extent practicable, the testing requirements
prescribed under paragraph (1) shall be based on existing test
procedures used in industry.''.
(c) Standard Setting Authority.--Section 325 of the Energy Policy
and Conservation Act (42 U.S.C. 6295) is amended--
(1) in subsection (f)(3), by adding at the end the
following:
``(D) Notwithstanding any other provision of this Act, if the
requirements of subsection (o) are met, the Secretary may consider and
prescribe energy conservation standards or energy use standards for
electricity used for purposes of circulating air through duct work.'';
(2) in subsection (g)--
(A) in paragraph (6)(B), by inserting ``and
labeled'' after ``designed''; and
(B) by adding at the end the following:
``(8)(A) Each fluorescent lamp ballast (other than replacement
ballasts or ballasts described in subparagraph (C))--
``(i)(I) manufactured on or after July 1, 2009;
``(II) sold by the manufacturer on or after October 1,
2009; or
``(III) incorporated into a luminaire by a luminaire
manufacturer on or after July 1, 2010; and
``(ii) designed--
``(I) to operate at nominal input voltages of 120
or 277 volts;
``(II) to operate with an input current frequency
of 60 Hertz; and
``(III) for use in connection with F34T12 lamps,
F96T12/ES lamps, or F96T12HO/ES lamps;
shall have a power factor of 0.90 or greater and shall have a ballast
efficacy factor of not less than the following:
................... Total
Ballast nominal Ballast
input lamp efficacy
Applicati voltage watts factor
on for
operatio
n of
One 120/277 34 2.61
F34T12
lamp
Two 120/277 68 1.35
F34T12
lamps
Two F96 120/277 120 0.77
T12/ES
lamps
Two F96 120/277 190 0.42
T12HO/ES
lamps
``(B) The standards described in subparagraph (A) shall apply to
all ballasts covered by subparagraph (A)(ii) that are manufactured on
or after July 1, 2010, or sold by the manufacturer on or after October
1, 2010.
``(C) The standards described in subparagraphs (A) and (B) do not
apply to--
``(i) a ballast that is designed for dimming to 50 percent
or less of the maximum output of the ballast;
``(ii) a ballast that is designed for use with 2 F96T12HO
lamps at ambient temperatures of 20 deg.F or less and for use
in an outdoor sign; or
``(iii) a ballast that has a power factor of less than 0.90
and is designed and labeled for use only in residential
applications.'';
(3) in subsection (o), by adding at the end the following:
``(5) The Secretary may set more than 1 energy conservation
standard for products that serve more than 1 major function by setting
1 energy conservation standard for each major function.'';
(4) in the first sentence of subsection (p), by striking
``Any'' and inserting the following: ``Except as provided in
subsection (u), any''; and
(5) by adding at the end the following:
``(u) Special Rulemaking Procedures.--(1) Notwithstanding any other
provision of law, the Secretary may publish a notice of direct final
rulemaking based on an energy conservation standard recommended by an
interested person, if--
``(A) in response to an advance notice of proposed
rulemaking under paragraph (p), the interested person
(including a representative of a manufacturer of a covered
product, a conservation advocate, or consumer) submits a joint
comment recommending an energy conservation standard; and
``(B) the Secretary determines that the energy conservation
standard complies with the substantive provisions of this Act
that apply to the type (or class) of covered products to which
the rule may apply.
``(2) The Secretary shall publish a notice of direct final
rulemaking under paragraph (1) with a notice of proposed rulemaking
incorporating by reference the regulatory language of the direct final
rule that provides for an effective date not earlier than 90 days after
the date of publication.
``(3) The Secretary may withdraw a direct final rule published
under paragraph (2) before the effective date of the rule if an
interested person files a significant adverse comment in response to
the related notice of proposed rulemaking.
``(v) Battery Charger and External Power Supply Electric Energy
Consumption.--(1)(A) Not later than 18 months after the date of
enactment of this subsection, the Secretary shall, after providing
notice and an opportunity for comment, prescribe, by rule, definitions
and test procedures for the power use of battery chargers and external
power supplies.
``(B) In establishing the test procedures under subparagraph (A),
the Secretary shall--
``(i) consider existing definitions and test procedures
used for measuring energy consumption in standby mode and other
modes; and
``(ii) assess the current and projected future market for
battery chargers and external power supplies.
``(C) The assessment under subparagraph (B)(ii) shall include--
``(i) estimates of the significance of potential energy
savings from technical improvements to battery chargers and
external power supplies; and
``(ii) suggested product classes for energy conservation
standards.
``(D) Not later than 18 months after the date of enactment of this
subsection, the Secretary shall hold a scoping workshop to discuss and
receive comments on plans for developing energy conservation standards
for energy use for battery chargers and external power supplies.
``(E)(i) Not later than 3 years after the date of enactment of this
subsection, the Secretary shall issue a final rule that determines
whether energy conservation standards shall be issued for battery
chargers and external power supplies or classes of battery chargers and
external power supplies.
``(ii) For each product class, any energy conservation standards
issued under clause (i) shall be set at the lowest level of energy use
that--
``(I) meets the criteria and procedures of subsections (o),
(p), (q), (r), (s), and (t); and
``(II) would result in significant overall annual energy
savings, considering standby mode and other operating modes.
``(2) In determining under section 323 whether test procedures and
energy conservation standards under this section should be revised with
respect to covered products that are major sources of standby mode
energy consumption, the Secretary shall consider whether to incorporate
standby mode into the test procedures and energy conservation
standards, taking into account standby mode power consumption compared
to overall product energy consumption.
``(3) The Secretary shall not propose an energy conservation
standard under this section, unless the Secretary has issued applicable
test procedures for each product under section 323.
``(4) Any energy conservation standard issued under this subsection
shall be applicable to products manufactured or imported beginning on
the date that is 3 years after the date of issuance.
``(5) The Secretary and the Administrator shall collaborate and
develop programs (including programs under section 324A and other
voluntary industry agreements or codes of conduct) that are designed to
reduce standby mode energy use.
``(w) Suspended Ceiling Fans and Refrigerated Beverage Vending
Machines.--(1) Not later than 4 years after the date of enactment of
this subsection, the Secretary shall prescribe, by rule, energy
conservation standards for--
``(A) suspended ceiling fans; and
``(B) refrigerated bottled or canned beverage vending
machines.
``(2) In establishing energy conservation standards under this
subsection, the Secretary shall use the criteria and procedures
prescribed under subsections (o) and (p).
``(3) Any energy conservation standard prescribed under this
subsection shall apply to products manufactured 3 years after the date
of publication of a final rule establishing the energy conservation
standard.
``(x) Illuminated Exit Signs.--An illuminated exit sign
manufactured on or after January 1, 2006, shall meet the version 2.0
Energy Star Program performance requirements for illuminated exit signs
prescribed by the Environmental Protection Agency.
``(y) Torchieres.--A torchiere manufactured on or after January 1,
2006--
``(1) shall consume not more than 190 watts of power; and
``(2) shall not be capable of operating with lamps that
total more than 190 watts.
``(z) Low Voltage Dry-Type Distribution Transformers.--The
efficiency of a low voltage dry-type distribution transformer
manufactured on or after January 1, 2007, shall be the Class I
Efficiency Levels for distribution transformers specified in table 4-2
of the `Guide for Determining Energy Efficiency for Distribution
Transformers' published by the National Electrical Manufacturers
Association (NEMA TP-1-2002).
``(aa) Traffic Signal Modules and Pedestrian Modules.--Any traffic
signal module or pedestrian module manufactured on or after January 1,
2006, shall--
``(1) meet the performance requirements used under the
Energy Star program of the Environmental Protection Agency for
traffic signals, as in effect on the date of enactment of this
subsection; and
``(2) be installed with compatible, electrically connected
signal control interface devices and conflict monitoring
systems.
``(bb) Unit Heaters.--A unit heater manufactured on or after the
date that is 3 years after the date of enactment of this subsection
shall--
``(1) be equipped with an intermittent ignition device; and
``(2) have power venting or an automatic flue damper.
``(cc) Medium Base Compact Fluorescent Lamps.--(1) A bare lamp and
covered lamp (no reflector) medium base compact fluorescent lamp
manufactured on or after January 1, 2006, shall meet the following
requirements prescribed by the August 9, 2001, version of the Energy
Star Program Requirements for Compact Fluorescent Lamps, Energy Star
Eligibility Criteria, Energy-Efficiency Specification issued by the
Environmental Protection Agency and Department of Energy:
``(A) Minimum initial efficacy.
``(B) Lumen maintenance at 1000 hours.
``(C) Lumen maintenance at 40 percent of rated life.
``(D) Rapid cycle stress test.
``(E) Lamp life.
``(2) The Secretary may, by rule, establish requirements for color
quality (CRI), power factor, operating frequency, and maximum allowable
start time based on the requirements prescribed by the August 9, 2001,
version of the Energy Star Program Requirements for Compact Fluorescent
Lamps.
``(3) The Secretary may, by rule--
``(A) revise the requirements established under paragraph
(2); or
``(B) establish other requirements, after considering
energy savings, cost effectiveness, and consumer satisfaction.
``(dd) Dehumidifiers.--(1) Dehumidifiers manufactured on or after
October 1, 2007, shall have an Energy Factor that meets or exceeds the
following values:
``Product Capacity (pints/day): Minimum Energy Factor (Liters/kWh)
25.00 or less................................. 1.00
25.01 - 35.00................................. 1.20
35.01 - 54.00................................. 1.30
54.01 - 74.99................................. 1.50
75.00 or more................................. 2.25.
``(2)(A) Not later than October 1, 2009, the Secretary shall
publish a final rule in accordance with subsections (o) and (p), to
determine whether the energy conservation standards established under
paragraph (1) should be amended.
``(B) The final rule published under subparagraph (A) shall--
``(i) contain any amendment by the Secretary; and
``(ii) provide that the amendment applies to products
manufactured on or after October 1, 2012.
``(C) If the Secretary does not publish an amendment that takes
effect by October 1, 2012, dehumidifiers manufactured on or after
October 1, 2012, shall have an Energy Factor that meets or exceeds the
following values:
``Product Capacity (pints/day): Minimum Energy Factor (Liters/kWh)
25.00 or less................................. 1.20
25.01 - 35.00................................. 1.30
35.01 - 45.00................................. 1.40
45.01 - 54.00................................. 1.50
54.01 - 74.99................................. 1.60
75.00 or more................................. 2.5.
``(ee) Commercial Prerinse Spray Valves.--Commercial prerinse spray
valves manufactured on or after January 1, 2006, shall have a flow rate
of not more than 1.6 gallons per minute.
``(ff) Mercury vapor lamp ballasts.--Mercury vapor lamp ballasts
shall not be manufactured or imported after January 1, 2008.
``(gg) Application Date.--Section 327 applies--
``(1) to products for which energy conservation standards
are to be established under subsection (l), (u), (v), or (w)
beginning on the date on which a final rule is issued by the
Secretary, except that any State or local standard prescribed
or enacted for the product before the date on which the final
rule is issued shall not be preempted until the energy
conservation standard established under subsection (l),(u),
(v), or (w) for the product takes effect; and
``(2) to products for which energy conservation standards
are established under subsections (x) through (ff) on the date
of enactment of those subsections, except that any State or
local standard prescribed or enacted before the date of
enactment of those subsections shall not be preempted until the
energy conservation standards established under subsections (x)
through (ff) take effect.''.
(d) General Rule of Preemption.--Section 327(c) of the Energy
Policy and Conservation Act (42 U.S.C. 6297(c)) is amended--
(1) in paragraph (5), by striking ``or'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(7)(A) is a regulation concerning standards for
commercial prerinse spray valves adopted by the California
Energy Commission before January 1, 2005; or
``(B) is an amendment to a regulation described in
subparagraph (A) that was developed to align California
regulations with changes in American Society for Testing and
Materials Standard F2324;
``(8)(A) is a regulation concerning standards for
pedestrian modules adopted by the California Energy Commission
before January 1, 2005; or
``(B) is an amendment to a regulation described in
subparagraph (A) that was developed to align California
regulations to changes in the Institute for Transportation
Engineers standards, entitled `Performance Specification:
Pedestrian Traffic Control Signal Indications'.''.
SEC. 136. ENERGY CONSERVATION STANDARDS FOR COMMERCIAL EQUIPMENT.
(a) Definitions.--Section 340 of the Energy Policy and Conservation
Act (42 U.S.C. 6311) is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (D) through (G)
as subparagraphs (H) through (K), respectively; and
(B) by inserting after subparagraph (C) the
following:
``(D) Very large commercial package air
conditioning and heating equipment.
``(E) Commercial refrigerators, freezers, and
refrigerator-freezers.
``(F) Automatic commercial ice makers.
``(G) Commercial clothes washers.'';
(2) in paragraph (2)(B), by striking ``small and large
commercial package air conditioning and heating equipment'' and
inserting ``commercial package air conditioning and heating
equipment, commercial refrigerators, freezers, and
refrigerator-freezers, automatic commercial ice makers,
commercial clothes washers'';
(3) by striking paragraphs (8) and (9) and inserting the
following:
``(8)(A) The term `commercial package air conditioning and
heating equipment' means air-cooled, water-cooled,
evaporatively-cooled, or water source (not including ground
water source) electrically operated, unitary central air
conditioners and central air conditioning heat pumps for
commercial application.
``(B) The term `small commercial package air conditioning
and heating equipment' means commercial package air
conditioning and heating equipment that is rated below 135,000
Btu per hour (cooling capacity).
``(C) The term `large commercial package air conditioning
and heating equipment' means commercial package air
conditioning and heating equipment that is rated--
``(i) at or above 135,000 Btu per hour; and
``(ii) below 240,000 Btu per hour (cooling
capacity).
``(D) The term `very large commercial package air
conditioning and heating equipment' means commercial package
air conditioning and heating equipment that is rated--
``(i) at or above 240,000 Btu per hour; and
``(ii) below 760,000 Btu per hour (cooling
capacity).
``(9)(A) The term `commercial refrigerator, freezer, and
refrigerator-freezer' means refrigeration equipment that--
``(i) is not a consumer product (as defined in
section 321);
``(ii) is not designed and marketed exclusively for
medical, scientific, or research purposes;
``(iii) operates at a chilled, frozen, combination
chilled and frozen, or variable temperature;
``(iv) displays or stores merchandise and other
perishable materials horizontally, semivertically, or
vertically;
``(v) has transparent or solid doors, sliding or
hinged doors, a combination of hinged, sliding,
transparent, or solid doors, or no doors;
``(vi) is designed for pull-down temperature
applications or holding temperature applications; and
``(vii) is connected to a self-contained condensing
unit or to a remote condensing unit.
``(B) The term `holding temperature application' means a
use of commercial refrigeration equipment other than a pull-
down temperature application, except a blast chiller or
freezer.
``(C) The term `integrated average temperature' means the
average temperature of all test package measurements taken
during the test.
``(D) The term `pull-down temperature application' means a
commercial refrigerator with doors that, when fully loaded with
12 ounce beverage cans at 90 degrees F, can cool those
beverages to an average stable temperature of 38 degrees F in
12 hours or less.
``(E) The term `remote condensing unit' means a factory-
made assembly of refrigerating components designed to compress
and liquefy a specific refrigerant that is remotely located
from the refrigerated equipment and consists of 1 or more
refrigerant compressors, refrigerant condensers, condenser fans
and motors, and factory supplied accessories.
``(F) The term `self-contained condensing unit' means a
factory-made assembly of refrigerating components designed to
compress and liquefy a specific refrigerant that is an integral
part of the refrigerated equipment and consists of 1 or more
refrigerant compressors, refrigerant condensers, condenser fans
and motors, and factory supplied accessories.''; and
(4) by adding at the end the following:
``(19) The term `automatic commercial ice maker' means a
factory-made assembly (not necessarily shipped in 1 package)
that--
``(A) consists of a condensing unit and ice-making
section operating as an integrated unit, with means for
making and harvesting ice; and
``(B) may include means for storing ice, dispensing
ice, or storing and dispensing ice.
``(20) The term `commercial clothes washer' means a soft-
mount front-loading or soft-mount top-loading clothes washer
that--
``(A) has a clothes container compartment that--
``(i) for horizontal-axis clothes washers,
is not more than 3.5 cubic feet ; and
``(ii) for vertical-axis clothes washers,
is not more than 4.0 cubic feet; and
``(B) is designed for use in--
``(i) applications in which the occupants
of more than 1 household will be using the
clothes washer, such as multi-family housing
common areas and coin laundries; or
``(ii) other commercial applications.
``(21) The term `harvest rate' means the amount of ice (at
32 degrees F) in pounds produced per 24 hours.''.
(b) Standards for Commercial Package Air Conditioning and Heating
Equipment.--Section 342(a) of the Energy Policy and Conservation Act
(42 U.S.C. 6313(a)) is amended--
(1) in the subsection heading, by striking ``Small and
Large'' and inserting ``Small, Large, and Very Large'';
(2) in paragraph (1), by inserting ``but before January 1,
2010,'' after ``January 1, 1994,'';
(3) in paragraph (2), by inserting ``but before January 1,
2010,'' after ``January 1, 1995,''; and
(4) in paragraph (6)--
(A) in subparagraph (A)--
(i) by inserting ``(i)'' after ``(A)'';
(ii) by striking ``the date of enactment of
the Energy Policy Act of 1992'' and inserting
``January 1, 2010'';
(iii) by inserting after ``large commercial
package air conditioning and heating
equipment,'' the following: ``and very large
commercial package air conditioning and heating
equipment, or if ASHRAE/IES Standard 90.1, as
in effect on October 24, 1992, is amended with
respect to any''; and
(iv) by adding at the end the following:
``(ii) If ASHRAE/IES Standard 90.1 is not amended with respect to
small commercial package air conditioning and heating equipment, large
commercial package air conditioning and heating equipment, and very
large commercial package air conditioning and heating equipment during
the 5-year period beginning on the effective date of a standard, the
Secretary may initiate a rulemaking to determine whether a more
stringent standard--
``(I) would result in significant additional conservation
of energy; and
``(II) is technologically feasible and economically
justified.''; and
(B) in subparagraph (C)(ii), by inserting ``and
very large commercial package air conditioning and
heating equipment'' after ``large commercial package
air conditioning and heating equipment''; and
(5) by adding at the end the following:
``(7) Small commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 65,000 Btu per hour
(cooling capacity) and less than 135,000 Btu per hour (cooling
capacity) shall be--
``(i) 11.2 for equipment with no heating or
electric resistance heating; and
``(ii) 11.0 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 65,000 Btu per
hour (cooling capacity) and less than 135,000 Btu per hour
(cooling capacity) shall be--
``(i) 11.0 for equipment with no heating or
electric resistance heating; and
``(ii) 10.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 65,000 Btu per hour (cooling capacity) and less than
135,000 Btu per hour (cooling capacity) shall be 3.3 (at a high
temperature rating of 47 degrees F db).
``(8) Large commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 135,000 Btu per hour
(cooling capacity) and less than 240,000 Btu per hour (cooling
capacity) shall be--
``(i) 11.0 for equipment with no heating or
electric resistance heating; and
``(ii) 10.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 135,000 Btu per
hour (cooling capacity) and less than 240,000 Btu per hour
(cooling capacity) shall be--
``(i) 10.6 for equipment with no heating or
electric resistance heating; and
``(ii) 10.4 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 135,000 Btu per hour (cooling capacity) and less than
240,000 Btu per hour (cooling capacity) shall be 3.2 (at a high
temperature rating of 47 degrees F db).
``(9) Very large commercial package air conditioning and heating
equipment manufactured on or after January 1, 2010, shall meet the
following standards:
``(A) The minimum energy efficiency ratio of air-cooled
central air conditioners at or above 240,000 Btu per hour
(cooling capacity) and less than 760,000 Btu per hour (cooling
capacity) shall be--
``(i) 10.0 for equipment with no heating or
electric resistance heating; and
``(ii) 9.8 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(B) The minimum energy efficiency ratio of air-cooled
central air conditioner heat pumps at or above 240,000 Btu per
hour (cooling capacity) and less than 760,000 Btu per hour
(cooling capacity) shall be--
``(i) 9.5 for equipment with no heating or electric
resistance heating; and
``(ii) 9.3 for equipment with all other heating
system types that are integrated into the equipment (at
a standard rating of 95 degrees F db).
``(C) The minimum coefficient of performance in the heating
mode of air-cooled central air conditioning heat pumps at or
above 240,000 Btu per hour (cooling capacity) and less than
760,000 Btu per hour (cooling capacity) shall be 3.2 (at a high
temperature rating of 47 degrees F db).''.
(c) Standards for Commercial Refrigerators, Freezers, and
Refrigerator-Freezers.--Section 342 of the Energy Policy and
Conservation Act (42 U.S.C. 6313) is amended by adding at the end the
following:
``(c) Commercial Refrigerators, Freezers, and Refrigerator-
freezers.--(1) In this subsection:
``(A) The term `AV' means the adjusted volume
(ft<SUP>3</SUP>) (defined as 1.63 x frozen temperature
compartment volume (ft<SUP>3</SUP>) + chilled temperature
compartment volume (ft<SUP>3</SUP>)) with compartment volumes
measured in accordance with the Association of Home Appliance
Manufacturers Standard HRF1-1979.
``(B) The term `V' means the chilled or frozen compartment
volume (ft<SUP>3</SUP>) (as defined in the Association of Home
Appliance Manufacturers Standard HRF1-1979).
``(C) Other terms have such meanings as may be established
by the Secretary, based on industry-accepted definitions and
practice.
``(2) Each commercial refrigerator, freezer, and refrigerator-
freezer with a self-contained condensing unit designed for holding
temperature applications manufactured on or after January 1, 2010,
shall have a daily energy consumption (in kilowatt hours per day) that
does not exceed the following:
``Refrigerators with solid doors 0.10 V + 2.04
Refrigerators with transparent 0.12 V + 3.34
doors.
Freezers with solid doors....... 0.40 V + 1.38
Freezers with transparent doors. 0.75 V + 4.10
Refrigerators/freezers with 0.27 AV - 0.71 or 0.70.
solid doors the greater of.
``(3) Each commercial refrigerator with a self-contained condensing
unit designed for pull-down temperature applications and transparent
doors manufactured on or after January 1, 2010, shall have a daily
energy consumption (in kilowatt hours per day) of not more than 0.126 V
+ 3.51.
``(4)(A) Not later than January 1, 2009, the Secretary shall issue,
by rule, standard levels for ice-cream freezers, self-contained
commercial refrigerators, freezers, and refrigerator-freezers without
doors, and remote condensing commercial refrigerators, freezers, and
refrigerator-freezers, with the standard levels effective for equipment
manufactured on or after January 1, 2012.
``(B) The Secretary may issue, by rule, standard levels for other
types of commercial refrigerators, freezers, and refrigerator-freezers
not covered by paragraph (2)(A) with the standard levels effective for
equipment manufactured 3 or more years after the date on which the
final rule is published.
``(5)(A) Not later than January 1, 2013, the Secretary shall issue
a final rule to determine whether the standards established under this
subsection should be amended.
``(B) Not later than 3 years after the effective date of any
amended standards under subparagraph (A) or the publication of a final
rule determining that the standards should not be amended, the
Secretary shall issue a final rule to determine whether the standards
established under this subsection or the amended standards, as
applicable, should be amended.
``(C) If the Secretary issues a final rule under subparagraph (A)
or (B) establishing amended standards, the final rule shall provide
that the amended standards apply to products manufactured on or after
the date that is--
``(i) 3 years after the date on which the final amended
standard is published; or
``(ii) if the Secretary determines, by rule, that 3 years
is inadequate, not later than 5 years after the date on which
the final rule is published.''.
(d) Standards for Automatic Commercial Ice Makers.--Section 342 of
the Energy Policy and Conservation Act (42 U.S.C. 6313) (as amended by
subsection (c)) is amended by adding at the end the following:
``(d) Automatic Commercial Ice Makers.--(1) Each automatic
commercial ice maker that produces cube type ice with capacities
between 50 and 2500 pounds per 24-hour period when tested according to
the test standard established in section 343(a)(7) and is manufactured
on or after January 1, 2010, shall meet the following standard levels:
------------------------------------------------------------------------
Harvest Maximum Maximum
Rate Energy Condenser
Equipment Type Type of (lbs ice/ Use (kWh/ Water Use
Cooling 24 100 lbs (gal/100
hours) Ice) lbs Ice)
------------------------------------------------------------------------
Ice Making Head Water <500 7.80-0.0 200-0.022H
055H
-------------------------------
500 and 5.58-0.0 200-0.022H
<1436 011H
-------------------------------
1436 4.0 200-0.022H
------------------------------------------------------------------------
Ice Making Head Air <450 10.26-0. Not
0086H Applicabl
e
-------------------------------
450 6.89-0.0 Not
011H Applicabl
e
------------------------------------------------------------------------
Remote Condensing Air <1000 8.85-0.0 Not
(but not remote 038H Applicabl
compressor) e
-------------------------------
1000 5.10 Not
Applicabl
e
------------------------------------------------------------------------
Remote Condensing Air <934 8.85-0.0 Not
and Remote 038H Applicabl
Compressor e
-------------------------------
934 5.3 Not
Applicabl
e
------------------------------------------------------------------------
Self Contained Water <200 11.40-0. 191-0.0315
019H H
-------------------------------
200 7.60 191-0.0315
H
------------------------------------------------------------------------
Self Contained Air <175 18.0-0.0 Not
469H Applicabl
e
-------------------------------
175 9.80 Not
Applicabl
e
------------------------------------------------------------------------
H = Harvest rate in pounds per 24 hours.
Water use is for the condenser only and does not include potable water
used to make ice.
``(2)(A) The Secretary may issue, by rule, standard levels for
types of automatic commercial ice makers that are not covered by
paragraph (1).
``(B) The standards established under subparagraph (A) shall apply
to products manufactured on or after the date that is--
``(i) 3 years after the date on which the rule is published
under subparagraph (A); or
``(ii) if the Secretary determines, by rule, that 3 years
is inadequate, not later than 5 years after the date on which
the final rule is published.
``(3)(A) Not later than January 1, 2015, with respect to the
standards established under paragraph (1), and, with respect to the
standards established under paragraph (2), not later than 5 years after
the date on which the standards take effect, the Secretary shall issue
a final rule to determine whether amending the applicable standards is
technologically feasible and economically justified.
``(B) Not later than 5 years after the effective date of any
amended standards under subparagraph (A) or the publication of a final
rule determining that amending the standards is not technologically
feasible or economically justified, the Secretary shall issue a final
rule to determine whether amending the standards established under
paragraph (1) or the amended standards, as applicable, is
technologically feasible or economically justified.
``(C) If the Secretary issues a final rule under subparagraph (A)
or (B) establishing amended standards, the final rule shall provide
that the amended standards apply to products manufactured on or after
the date that is--
``(i) 3 years after the date on which the final amended
standard is published; or
``(ii) if the Secretary determines, by rule, that 3 years
is inadequate, not later than 5 years after the date on which
the final amended standard is published.
``(4) A final rule issued under paragraph (2) or (3) shall
establish standards at the maximum level that is technically feasible
and economically justified, as provided in subsections (o) and (p) of
section 325.''.
(e) Standards for Commercial Clothes Washers.--Section 342 of the
Energy Policy and Conservation Act (42 U.S.C. 6313) (as amended by
subsection (d)) is amended by adding at the end the following:
``(e) Commercial Clothes Washers.--(1) Each commercial clothes
washer manufactured on or after January 1, 2007, shall have--
``(A) a Modified Energy Factor of at least 1.26; and
``(B) a Water Factor of not more than 9.5.
``(2)(A)(i) Not later than January 1, 2010, the Secretary shall
publish a final rule to determine whether the standards established
under paragraph (1) should be amended.
``(ii) The rule published under clause (i) shall provide that any
amended standard shall apply to products manufactured 3 years after the
date on which the final amended standard is published.
``(B)(i) Not later than January 1, 2015, the Secretary shall
publish a final rule to determine whether the standards established
under paragraph (1) should be amended.
``(ii) The rule published under clause (i) shall provide that any
amended standard shall apply to products manufactured 3 years after the
date on which the final amended standard is published.''.
(f) Test Procedures.--Section 343 of the Energy Policy and
Conservation Act (42 U.S.C. 6314) is amended--
(1) in subsection (a)--
(A) in paragraph (4)--
(i) in subparagraph (A), by inserting
``very large commercial package air
conditioning and heating equipment,'' after
``large commercial package air conditioning and
heating equipment,''; and
(ii) in subparagraph (B), by inserting
``very large commercial package air
conditioning and heating equipment,'' after
``large commercial package air conditioning and
heating equipment,''; and
(B) by adding at the end the following:
``(6)(A)(i) In the case of commercial refrigerators, freezers, and
refrigerator-freezers, the test procedures shall be--
``(I) the test procedures determined by the Secretary to be
generally accepted industry testing procedures; or
``(II) rating procedures developed or recognized by the
ASHRAE or by the American National Standards Institute.
``(ii) In the case of self-contained refrigerators, freezers, and
refrigerator-freezers to which standards are applicable under
paragraphs (2) and (3) of section 342(c), the initial test procedures
shall be the ASHRAE 117 test procedure that is in effect on January 1,
2005.
``(B)(i) In the case of commercial refrigerators, freezers, and
refrigerators-freezers with doors covered by the standards adopted in
February 2002, by the California Energy Commission, the rating
temperatures shall be the integrated average temperature of 38 degrees
F ( 2 degrees F) for refrigerator compartments and 0 degrees F ( 2
degrees F) for freezer compartments.
``(C) The Secretary shall issue a rule in accordance with
paragraphs (2) and (3) to establish the appropriate rating temperatures
for the other products for which standards will be established under
subsection 342(c)(4).
``(D) In establishing the appropriate test temperatures under this
subparagraph, the Secretary shall follow the procedures and meet the
requirements under section 323(e).
``(E)(i) Not later than 180 days after the publication of the new
ASHRAE 117 test procedure, if the ASHRAE 117 test procedure for
commercial refrigerators, freezers, and refrigerator-freezers is
amended, the Secretary shall, by rule, amend the test procedure for the
product as necessary to ensure that the test procedure is consistent
with the amended ASHRAE 117 test procedure, unless the Secretary makes
a determination, by rule, and supported by clear and convincing
evidence, that to do so would not meet the requirements for test
procedures under paragraphs (2) and (3).
``(ii) If the Secretary determines that 180 days is an insufficient
period during which to review and adopt the amended test procedure or
rating procedure under clause (i), the Secretary shall publish a notice
in the Federal Register stating the intent of the Secretary to wait not
longer than 1 additional year before putting into effect an amended
test procedure or rating procedure.
``(F)(i) If a test procedure other than the ASHRAE 117 test
procedure is approved by the American National Standards Institute, the
Secretary shall, by rule--
``(I) review the relative strengths and weaknesses of the
new test procedure relative to the ASHRAE 117 test procedure;
and
``(II) based on that review, adopt 1 new test procedure for
use in the standards program.
``(ii) If a new test procedure is adopted under clause (i)--
``(I) section 323(e) shall apply; and
``(II) subparagraph (B) shall apply to the adopted test
procedure.
``(7)(A) In the case of automatic commercial ice makers, the test
procedures shall be the test procedures specified in Air-Conditioning
and Refrigeration Institute Standard 810-2003, as in effect on January
1, 2005.
``(B)(i) If Air-Conditioning and Refrigeration Institute Standard
810-2003 is amended, the Secretary shall amend the test procedures
established in subparagraph (A) as necessary to be consistent with the
amended Air-Conditioning and Refrigeration Institute Standard, unless
the Secretary determines, by rule, published in the Federal Register
and supported by clear and convincing evidence, that to do so would not
meet the requirements for test procedures under paragraphs (2) and (3).
``(ii) If the Secretary issues a rule under clause (i) containing a
determination described in clause (ii), the rule may establish an
amended test procedure for the product that meets the requirements of
paragraphs (2) and (3).
``(C) The Secretary shall comply with section 323(e) in
establishing any amended test procedure under this paragraph.
``(8) With respect to commercial clothes washers, the test
procedures shall be the same as the test procedures established by the
Secretary for residential clothes washers under section 325(g).''; and
(2) in subsection (d)(1), by inserting ``very large
commercial package air conditioning and heating equipment,
commercial refrigerators, freezers, and refrigerator-freezers,
automatic commercial ice makers, commercial clothes washers,''
after ``large commercial package air conditioning and heating
equipment,''.
(g) Labeling.--Section 344(e) of the Energy Policy and Conservation
Act (42 U.S.C. 6315(e)) is amended by inserting ``very large commercial
package air conditioning and heating equipment, commercial
refrigerators, freezers, and refrigerator-freezers, automatic
commercial ice makers, commercial clothes washers,'' after ``large
commercial package air conditioning and heating equipment,'' each place
it appears.
(h) Administration, Penalties, Enforcement, and Preemption.--
Section 345 of the Energy Policy and Conservation Act (42 U.S.C. 6316)
is amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'' at the
end;
(B) in paragraph (8), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(9) in the case of commercial clothes washers, section
327(b)(1) shall be applied as if the National Appliance Energy
Conservation Act of 1987 was the Energy Policy Act of 2005.'';
(2) in the first sentence of subsection (b)(1), by striking
``part B'' and inserting ``part A''; and
(3) by adding at the end the following:
``(d)(1) Except as provided in paragraphs (2) and (3), section 327
shall apply with respect to very large commercial package air
conditioning and heating equipment to the same extent and in the same
manner as section 327 applies under part A on the date of enactment of
this subsection.
``(2) Any State or local standard issued before the date of
enactment of this subsection shall not be preempted until the standards
established under section 342(a)(9) take effect on January 1, 2010.
``(e)(1)(A) Subsections (a), (b), and (d) of section 326,
subsections (m) through (s) of section 325, and sections 328 through
336 shall apply with respect to commercial refrigerators, freezers, and
refrigerator-freezers to the same extent and in the same manner as
those provisions apply under part A.
``(B) In applying those provisions to commercial refrigerators,
freezers, and refrigerator-freezers, paragraphs (1), (2), (3), and (4)
of subsection (a) shall apply.
``(2)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are established
under paragraphs (2) and (3) of section 342(c) to the same extent and
in the same manner as those provisions apply under part A on the date
of enactment of this subsection, except that any State or local
standard issued before the date of enactment of this subsection shall
not be preempted until the standards established under paragraphs (2)
and (3) of section 342(c) take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(3)(A) Section 327 shall apply to commercial refrigerators,
freezers, and refrigerator-freezers for which standards are established
under section 342(c)(4) to the same extent and in the same manner as
the provisions apply under part A on the date of publication of the
final rule by the Secretary, except that any State or local standard
issued before the date of publication of the final rule by the
Secretary shall not be preempted until the standards take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(4)(A) If the Secretary does not issue a final rule for a
specific type of commercial refrigerator, freezer, or refrigerator-
freezer within the time frame specified in section 342(c)(5),
subsections (b) and (c) of section 327 shall not apply to that specific
type of refrigerator, freezer, or refrigerator-freezer for the period
beginning on the date that is 2 years after the scheduled date for a
final rule and ending on the date on which the Secretary publishes a
final rule covering the specific type of refrigerator, freezer, or
refrigerator-freezer.
``(B) Any State or local standard issued before the date of
publication of the final rule shall not be preempted until the final
rule takes effect.
``(5)(A) In the case of any commercial refrigerator, freezer, or
refrigerator-freezer to which standards are applicable under paragraphs
(2) and (3) of section 342(c), the Secretary shall require
manufacturers to certify, through an independent, nationally recognized
testing or certification program, that the commercial refrigerator,
freezer, or refrigerator-freezer meets the applicable standard.
``(B) The Secretary shall, to the maximum extent practicable,
encourage the establishment of at least 2 independent testing and
certification programs.
``(C) As part of certification, information on equipment energy use
and interior volume shall be made available to the Secretary.
``(f)(1)(A)(i) Except as provided in clause (ii), section 327 shall
apply to automatic commercial ice makers for which standards have been
established under section 342(d)(1) to the same extent and in the same
manner as the section applies under part A on the date of enactment of
this subsection.
``(ii) Any State standard issued before the date of enactment of
this subsection shall not be preempted until the standards established
under section 342(d)(1) take effect.
``(B) In applying section 327 to the equipment under subparagraph
(A), paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(2)(A)(i) Except as provided in clause (ii), section 327 shall
apply to automatic commercial ice makers for which standards have been
established under section 342(d)(2) to the same extent and in the same
manner as the section applies under part A on the date of publication
of the final rule by the Secretary.
``(ii) Any State standard issued before the date of publication of
the final rule by the Secretary shall not be preempted until the
standards established under section 342(d)(2) take effect.
``(B) In applying section 327 in accordance with subparagraph (A),
paragraphs (1), (2), and (3) of subsection (a) shall apply.
``(3)(A) If the Secretary does not issue a final rule for a
specific type of automatic commercial ice maker within the time frame
specified in subsection 342(d), subsections (b) and (c) of section 327
shall no longer apply to the specific type of automatic commercial ice
maker for the period beginning on the day after the scheduled date for
a final rule and ending on the date on which the Secretary publishes a
final rule covering the specific type of automatic commercial ice
maker.
``(B) Any State standard issued before the publication of the final
rule shall not be preempted until the standards established in the
final rule take effect.
``(4)(A) The Secretary shall monitor whether manufacturers are
reducing harvest rates below tested values for the purpose of bringing
non-complying equipment into compliance.
``(B) If the Secretary finds that there has been a substantial
amount of manipulation with respect to harvest rates under subparagraph
(A), the Secretary shall take steps to minimize the manipulation, such
as requiring harvest rates to be within 5 percent of tested values.
``(g)(1)(A) If the Secretary does not issue a final rule for
commercial clothes washers within the timeframe specified in section
342(e)(2), subsections (b) and (c) of section 327 shall not apply to
commercial clothes washers for the period beginning on the day after
the scheduled date for a final rule and ending on the date on which the
Secretary publishes a final rule covering commercial clothes washers.
``(B) Any State or local standard issued before the date on which
the Secretary publishes a final rule shall not be preempted until the
standards established under section 342(e)(2) take effect.
``(2) The Secretary shall undertake an educational program to
inform owners of laundromats, multifamily housing, and other sites
where commercial clothes washers are located about the new standard,
including impacts on washer purchase costs and options for recovering
those costs through coin collection.''.
SEC. 137. EXPEDITED RULEMAKING.
(a) Administrative Procedure.--The first sentence of section 325(p)
of the Energy Policy and Conservation Act (42 U.S.C. 6295(p)) is
amended by striking ``Any'' and inserting ``Except as provided in
subsection (u), any''.
(b) Administrative Procedure and Judicial Review.--The first
sentence of section 336(b)(2) of the Energy Policy and Conservation Act
(42 U.S.C. 6306(b)(2)) is amended by striking ``such chapter.'' and
inserting ``that chapter, except, notwithstanding section 706(2)(D) of
title 5, United States Code, no direct final rule prescribed or
withdrawn under section 325(u) may be held unlawful or set aside
because of the failure of the Secretary to observe a procedure required
by law other than the procedures required under section 325(u).''.
(c) Conforming Amendment.--Section 345(b)(1) of the Energy Policy
and Conservation Act (42 U.S.C. 6316(b)(1)) is amended by inserting
``section 325(u),'' before ``section 326(a)''.
SEC. 138. ENERGY LABELING.
(a) Rulemaking on Effectiveness of Consumer Product Labeling.--
Section 324(a)(2) of the Energy Policy and Conservation Act (42 U.S.C.
6294(a)(2)) is amended by adding at the end the following:
``(F)(i) Not later than 90 days after the date of enactment of this
subparagraph, the Commission shall initiate a rulemaking to consider--
``(I) the effectiveness of the consumer products labeling
program in assisting consumers in making purchasing decisions
and improving energy efficiency; and
``(II) changes to the labeling rules (including categorical
labeling) that would improve the effectiveness of consumer
product labels.
``(ii) Not later than 2 years after the date of enactment of this
subparagraph, the Commission shall complete the rulemaking initiated
under clause (i).''.
(b) Rulemaking on Labeling for Additional Products.--Section 324(a)
of the Energy Policy and Conservation Act (42 U.S.C. 6294(a)) is
amended by adding at the end the following:
``(5)(A) For covered products described in subsections (u) through
(ee) of section 325, after a test procedure has been prescribed under
section 323, the Secretary or the Commission, as appropriate, may
prescribe, by rule, under this section labeling requirements for the
products.
``(B) In the case of products to which TP-1 standards under section
325(y) apply, labeling requirements shall be based on the `Standard for
the Labeling of Distribution Transformer Efficiency' prescribed by the
National Electrical Manufacturers Association (NEMA TP-3) as in effect
on the date of enactment of this paragraph.
``(C) In the case of dehumidifiers covered under section 325(dd),
the Commission shall not require an `Energy Guide' label.''.
SEC. 139. ENERGY EFFICIENT ELECTRIC AND NATURAL GAS UTILITIES STUDY.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary, in consultation with the National
Association of Regulatory Utility Commissioners and the National
Association of State Energy Officials, shall conduct a study of State
and regional policies that promote cost-effective programs to reduce
energy consumption (including energy efficiency programs) that are
carried out by--
(1) utilities that are subject to State regulation; and
(2) nonregulated utilities.
(b) Consideration.--In conducting the study under subsection (a),
the Secretary shall take into consideration--
(1) performance standards for achieving energy use and
demand reduction targets;
(2) funding sources, including rate surcharges;
(3) infrastructure planning approaches (including energy
efficiency programs) and infrastructure improvements;
(4) the costs and benefits of consumer education programs
conducted by State and local governments and local utilities to
increase consumer awareness of energy efficiency technologies
and measures; and
(5) methods of--
(A) removing disincentives for utilities to
implement energy efficiency programs;
(B) encouraging utilities to undertake voluntary
energy efficiency programs; and
(C) ensuring appropriate returns on energy
efficiency programs.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report that
includes--
(1) the findings of the study; and
(2) any recommendations of the Secretary, including
recommendations on model policies to promote energy efficiency
programs.
SEC. 140. ENERGY EFFICIENCY PILOT PROGRAM.
(a) In General.--The Secretary shall establish a pilot program
under which the Secretary provides financial assistance to at least 3,
but not more than 7, States to carry out pilot projects in the States
for--
(1) planning and adopting statewide programs that
encourage, for each year in which the pilot project is carried
out--
(A) energy efficiency; and
(B) reduction of consumption of electricity or
natural gas in the State by at least 0.75 percent, as
compared to a baseline determined by the Secretary for
the period preceding the implementation of the program;
or
(2) for any State that has adopted a statewide program as
of the date of enactment of this Act, activities that reduce
energy consumption in the State by expanding and improving the
program.
(b) Verification.--A State that receives financial assistance under
subsection (a)(1) shall submit to the Secretary independent
verification of any energy savings achieved through the statewide
program.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2006 through 2010, to remain available until expended.
SEC. 141. ENERGY EFFICIENCY RESOURCE PROGRAMS.
(a) Electric Utility Programs.--Section 111 of the Public Utilities
Regulatory Policy Act of 1978 (16 U.S.C. 2621) is amended by adding at
the end the following:
``(e) Energy Efficiency Resource Programs.--
``(1) Definitions.--In this subsection:
``(A) Demand baseline.--The term `demand baseline'
means the baseline determined by the Secretary for an
appropriate period preceding the implementation of an
energy efficiency resource program.
``(B) Energy efficiency resource programs.--The
term `energy efficiency resource program' means an
energy efficiency or other demand reduction program
that is designed to reduce annual electricity
consumption or peak demand of consumers served by an
electric utility by a percentage of the demand baseline
of the utility that is equal to not less than 0.75
percent of the number of years during which the program
is in effect.
``(2) Public hearings; determinations.--
``(A) As soon as practicable after the date of
enactment of this subsection, but not later than 3
years after that date, each State regulatory authority
(with respect to each electric utility over which the
State has ratemaking authority) and each nonregulated
electric utility shall, after notice, conduct a public
hearing on the benefits and feasibility of implementing
an energy efficiency resource program.
``(B) A State regulatory authority or nonregulated
utility shall implement an energy efficiency resource
program if, on the basis of a hearing under
subparagraph (A), the State regulatory authority or
nonregulated utility determines that the program
would--
``(i) benefit end-use customers;
``(ii) be cost-effective based on total
resource cost;
``(iii) serve the public welfare; and
``(iv) be feasible to implement.
``(3) Implementation.--
``(A) State regulatory authorities.--If a State
regulatory authority makes a determination under
paragraph (2)(B), the State regulatory authority
shall--
``(i) require each electric utility over
which the State has ratemaking authority to
implement an energy efficiency resource
program; and
``(ii) allow such a utility to recover any
expenditures incurred by the utility in
implementing the energy efficiency resource
program.
``(B) Nonregulated electric utilities.--If a
nonregulated electric utility makes a determination
under paragraph (2)(B), the utility shall implement an
energy efficiency resource program.
``(4) Updating regulations.--A State regulatory authority
or nonregulated utility may update periodically a determination
under paragraph (2)(B) to determine whether an energy
efficiency resource program should be--
``(A) continued;,
``(B) modified; or
``(C) terminated.
``(5) Exception.--Paragraph (2) shall not apply to a State
regulatory authority (or any nonregulated electric utility
operating in the State) that demonstrates to the Secretary that
an energy efficiency resource program is in effect in the
State.''.
(b) Gas Utilities.--Section 303 of the Public Utilities Regulatory
Policy Act of 1978 (15 U.S.C. 3203) is amended by adding at the end the
following:
``(e) Energy efficiency resource programs.--
``(1) Definitions.--In this subsection:
``(A) Demand baseline.--The term `demand baseline'
means the baseline determined by the Secretary for an
appropriate period preceding the implementation of an
energy efficiency resource program.
``(B) Energy efficiency resource programs.--The
term `energy efficiency resource program' means an
energy efficiency or other demand reduction program
that is designed to reduce annual gas consumption or
peak demand of consumers served by a gas utility by a
percentage of the demand baseline of the utility that
is equal to not less than 0.75 percent of the number of
years during which the program is in effect.
``(2) Public hearings; determinations.--
``(A) As soon as practicable after the date of
enactment of this subsection, but not later than 3
years after that date, each State regulatory authority
(with respect to each gas utility over which the State
has ratemaking authority) and each nonregulated gas
utility shall, after notice, conduct a public hearing
on the benefits and feasibility of implementing an
energy efficiency resource program.
``(B) A State regulatory authority or nonregulated
utility shall implement an energy efficiency resource
program if, on the basis of a hearing under
subparagraph (A), the State regulatory authority or
nonregulated utility determines that the program
would--
``(i) benefit end-use customers;
``(ii) be cost-effective based on total
resource cost;
``(iii) serve the public welfare; and
``(iv) be feasible to implement.
``(3) Implementation.--
``(A) State regulatory authorities.--If a State
regulatory authority makes a determination under
paragraph (2)(B), the State regulatory authority
shall--
``(i) require each gas utility over which
the State has ratemaking authority to implement
an energy efficiency resource program; and
``(ii) allow such a utility to recover any
expenditures incurred by the utility in
implementing the energy efficiency resource
program.
``(B) Nonregulated gas utilities.--If a
nonregulated gas utility makes a determination under
paragraph (2)(B), the utility shall implement an energy
efficiency resource program.
``(4) Updating regulations.--A State regulatory authority
or nonregulated utility may update periodically a determination
under paragraph (2)(B) to determine whether an energy
efficiency resource program should be--
``(A) continued;,
``(B) modified; or
``(C) terminated.
``(5) Exception.--Paragraph (2) shall not apply to a State
regulatory authority (or any nonregulated gas utility operating
in the State) that demonstrates to the Secretary that an energy
efficiency resource program is in effect in the State.''.
SEC. 142. FUEL EFFICIENT ENGINE TECHNOLOGY FOR AIRCRAFT.
(a) In General.--The Secretary and the Administrator of the
National Aeronautics and Space Administration shall enter into a
cooperative agreement to carry out a multi-year engine development
program to advance technologies to enable more fuel efficient, turbine-
based propulsion and power systems for aeronautical and industrial
applications.
(b) Performance Objective.--The fuel efficiency performance
objective for the program shall be to achieve a fuel efficiency
improvement of more than 10 percent by exploring--
(1) advanced concepts, alternate propulsion, and power
configurations, including hybrid fuel cell powered systems; and
(2) the use of alternate fuel in conventional or
nonconventional turbine-based systems.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $60,000,000 for
each of fiscal years 2006 through 2010.
SEC. 143. MOTOR VEHICLE TIRES SUPPORTING MAXIMUM FUEL EFFICIENCY.
(a) Standards for Tires Manufactured for Interstate Commerce.--
Section 30123 of title 49, United States Code, is amended--
(1) in subsection (b), by inserting after the first
sentence the following: ``The grading system shall include
standards for rating the fuel efficiency of tires designed for
use on passenger cars and light trucks.''; and
(2) by adding at the end the following:
``(d) National Tire Fuel Efficiency Program.--(1) The Secretary
shall develop and carry out a national tire fuel efficiency program for
tires designed for use on passenger cars and light trucks.
``(2) The program shall include the following:
``(A) Policies and procedures for testing and labeling
tires for fuel economy to enable tire buyers to make informed
purchasing decisions about the fuel economy of tires.
``(B) Policies and procedures to promote the purchase of
energy-efficient replacement tires, including purchase
incentives, website listings on the Internet, printed fuel
economy guide booklets, and mandatory requirements for tire
retailers to provide tire buyers with fuel-efficiency
information on tires.
``(C) Minimum fuel economy standards for tires, promulgated
by the Secretary.
``(3) The minimum fuel economy standards for tires shall--
``(A) ensure that the average fuel economy of replacement
tires is equal to or better than the average fuel economy of
tires sold as original equipment;
``(B) secure the maximum technically feasible and cost-
effective fuel savings;
``(C) not adversely affect tire safety;
``(D) not adversely affect the average tire life of
replacement tires;
``(E) incorporate the results from--
``(i) laboratory testing; and
``(ii) to the extent appropriate and available, on-
road fleet testing programs conducted by the
manufacturers; and
``(F) not adversely affect efforts to manage scrap tires.
``(4) The policies, procedures, and standards developed under
paragraph (2) shall apply to all types and models of tires that are
covered by the uniform tire quality grading standards under section
575.104 of title 49, Code of Federal Regulations (or any successor
regulation).
``(5) Not less often than every three years, the Secretary shall
review the minimum fuel economy standards in effect for tires under
this subsection and revise the standards as necessary to ensure
compliance with requirements under paragraph (3). The Secretary may
not, however, reduce the average fuel economy standards applicable to
replacement tires.
``(6) Nothing in this chapter shall be construed to preempt any
provision of State law relating to higher fuel economy standards
applicable to replacement tires designed for use on passenger cars and
light trucks.
``(7) Nothing in this chapter shall apply to--
``(A) a tire or group of tires with the same SKU, plant,
and year, for which the volume of tires produced or imported is
less than 15,000 annually;
``(B) a deep tread, winter-type snow tire, space-saver
tire, or temporary use spare tire;
``(C) a tire with a normal rim diameter of 12 inches or
less;
``(D) a motorcycle tire; or
``(E) a tire manufactured specifically for use in an off-
road motorized recreational vehicle.
``(8) In this subsection, the term `fuel economy', with respect to
tires, means the extent to which the tires contribute to the fuel
economy of the motor vehicles on which the tires are mounted.
(b) Conforming Amendment.--Section 30103(b) of title 49, United
States Code, is amended in paragraph (1) by striking ``When'' and
inserting ``Except as provided in section 30123(d) of this title,
when''.
(c) Time for Implementation.--The Secretary of Transportation shall
ensure that the national tire fuel efficiency program required under
subsection (d) of section 30123 of title 49, United States Code (as
added by subsection (a)(2)), is administered so as to apply the
policies, procedures, and standards developed under paragraph (2) of
such subsection (d) beginning not later than March 31, 2008.
Subtitle D--Measures to Conserve Petroleum
SEC. 151. REDUCTION OF DEPENDENCE ON IMPORTED PETROLEUM.
(a) Report.--
(1) In general.--Not later than February 1, 2006, and
annually thereafter, the President shall submit to Congress a
report, based on the most recent edition of the Annual Energy
Outlook published by the Energy Information Administration,
assessing the progress made by the United States toward the
goal of reducing dependence on imported petroleum sources by
2015.
(2) Contents.--The report under paragraph (1) shall--
(A) include a description of the implementation,
during the previous fiscal year, of provisions under
this Act relating to domestic crude petroleum
production;
(B) assess the effectiveness of those provisions in
meeting the goal described in paragraph (1); and
(C) describe the progress in developing and
implementing measures under subsection (b).
(b) Measures To Reduce Import Dependence Through Increased Domestic
Petroleum Conservation.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the President shall develop and
implement measures to conserve petroleum in end-uses throughout
the economy of the United States sufficient to reduce total
demand for petroleum in the United States by 1,000,000 barrels
per day from the amount projected for calendar year 2015 in the
reference case contained in the report of the Energy
Information Administration entitled ``Annual Energy Outlook
2005''.
(2) Contents.--The measures under paragraph (1) shall be
designed to ensure continued reliable and affordable energy for
consumers.
(3) Implementation.--The measures under paragraph (1) shall
be implemented under existing authorities of appropriate
Federal executive agencies identified by the President.
Subtitle E--Energy Efficiency in Housing
SEC. 161. PUBLIC HOUSING CAPITAL FUND.
Section 9 of the United States Housing Act of 1937 (42 U.S.C.
1437g) is amended--
(1) in subsection (d)(1)--
(A) in subparagraph (I), by striking ``; and'' and
inserting a semicolon;
(B) in subparagraph (J), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following:
``(K) improvement of energy and water-use
efficiency by installing fixtures and fittings that
conform to the American Society of Mechanical
Engineers/American National Standards Institute
standards A112.19.2-1998 and A112.18.1-2000, or any
revision thereto, applicable at the time of
installation, and by increasing energy efficiency and
water conservation by such other means as the Secretary
determines are appropriate; and
``(L) integrated utility management and capital
planning to maximize energy conservation and efficiency
measures.''; and
(2) in subsection (e)(2)(C)--
(A) by striking ``The treatment'' and inserting the
following:
``(i) In general.--The treatment''; and
(B) by adding at the end the following:
``(ii) Third party contracts.--Contracts
described in clause (i) may include contracts
for--
``(I) equipment conversions to less
costly utility sources;
``(II) projects with resident-paid
utilities; and
``(III) adjustments to frozen base
year consumption, including systems
repaired to meet applicable building
and safety codes and adjustments for
occupancy rates increased by
rehabilitation.
``(iii) Term of contract.--The total term
of a contract described in clause (i) shall not
exceed 20 years to allow longer payback periods
for retrofits, including--
``(I) windows;
``(II) heating system replacements;
``(III) wall insulation;
``(IV) site-based generation; and
``(V) advanced energy savings
technologies, including renewable
energy generation and other such
retrofits.''.
SEC. 162. ENERGY EFFICIENT APPLIANCES.
In purchasing appliances, a public housing agency shall purchase
energy-efficient appliances that are Energy Star products or FEMP
designated products, as such terms are defined in section 552 of the
National Energy Conservation Policy Act (42 U.S.C. 8251 et seq.) (as
amended by section 104) unless the purchase of energy-efficient
appliances is not cost-effective to the agency.
SEC. 163. ENERGY EFFICIENCY STANDARDS.
Section 109 of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12709) is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking `` 1 year after the date of
enactment of the Energy Policy Act of 1992''
and inserting ``September 30, 2006'';
(ii) in subparagraph (A), by striking ``;
and'' and inserting a semicolon;
(iii) in subparagraph (B), by striking the
period at the end and inserting ``; and''; and
(iv) by adding at the end the following:
``(C) rehabilitation and new construction of public
and assisted housing funded by HOPE VI revitalization
grants, established under section 24 of the United
States Housing Act of 1937 (42 U.S.C. 1437v), where
such standards are determined to be cost effective by
the Secretary of Housing and Urban Development.''; and
(B) in paragraph (2), in the first sentence, by
inserting ``, and, with respect to rehabilitation and
new construction of public and assisted housing funded
by HOPE VI revitalization grants, established under
section 24 of the United States Housing Act of 1937 (42
U.S.C. 1437v), the 2003 International Energy
Conservation Code'' after ``Standard 90.1-1989')'';
(2) in subsection (b)--
(A) by striking ``within 1 year after the date of
enactment of the Energy Policy Act of 1992'' and
inserting ``by September 30, 2006''; and
(B) by inserting ``, and, with respect to
rehabilitation and new construction of public and
assisted housing funded by HOPE VI revitalization
grants, established under section 24 of the United
States Housing Act of 1937 (42 U.S.C. 1437v), the 2003
International Energy Conservation Code'' after
``Standard 90.1-1989''; and
(3) in subsection (c)--
(A) in the heading, by inserting ``and the
International Energy Conservation Code'' after ``Model
Energy Code''; and
(B) by inserting ``, or, with respect to
rehabilitation and new construction of public and
assisted housing funded by HOPE VI revitalization
grants, established under section 24 of the United
States Housing Act of 1937 (42 U.S.C. 1437v), the 2003
International Energy Conservation Code'' after
``Standard 90.1-1989''.
SEC. 164. ENERGY STRATEGY FOR THE DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT.
(a) Development of Strategy.--The Secretary of Housing and Urban
Development shall develop and implement an integrated energy strategy
to reduce utility expenses through cost-effective energy conservation
and efficiency measures and energy efficient design and construction of
public and assisted housing.
(b) Contents of Strategy.--The energy strategy required under
subsection (a) shall include the development of energy reduction goals
and incentives for public housing agencies.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, and every 2 years thereafter, the Secretary of Housing and
Urban Development shall submit to Congress a report describing--
(1) the energy strategy required under subsection (a);
(2) the actions taken by the Department of Housing and
Urban Development to monitor the energy usage of public housing
agencies; and
(3) the progress, if any, in implementing the energy
strategy required under subsection (a).
TITLE II--RENEWABLE ENERGY
Subtitle A--General Provisions
SEC. 201. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.
(a) Resource Assessments.--Not later than 180 days after the date
of enactment of this Act and each year thereafter, the Secretary
shall--
(1) review the available assessments of renewable energy
resources within the United States, including solar, wind,
biomass, ocean (tidal, wave, current, and thermal), geothermal,
and hydroelectric energy resources; and
(2) undertake new assessments as necessary, taking into
account changes in market conditions, available technologies,
and other relevant factors.
(b) Reports.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act and each year thereafter, the Secretary
shall publish a report based on the most recent assessment
under subsection (a).
(2) Contents.--The report shall contain--
(A) a detailed inventory describing the available
quantity and characteristics of the renewable energy
resources; and
(B) such other information as the Secretary
determines would be useful in developing the renewable
energy resources, including--
(i) descriptions of surrounding terrain,
population and load centers, nearby energy
infrastructure, and the location of energy and
water resources;
(ii) available estimates of the costs
needed to develop each resource;
(iii) an identification of any barriers to
providing adequate transmission for remote
sources of renewable energy resources to
current and emerging markets;
(iv) recommendations for removing or
addressing those barriers; and
(v) recommendations for providing access to
the electrical grid that do not unfairly
disadvantage renewable or other energy
producers.
(c) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section $10,000,000 for
each of fiscal years 2006 through 2010.
SEC. 202. RENEWABLE ENERGY PRODUCTION INCENTIVE.
(a) Incentive Payments.--Section 1212(a) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(a)) is amended--
(1) by striking the last sentence;
(2) by designating the first, second, and third sentences
as paragraphs (1), (2), and (3), respectively;
(3) in paragraph (3) (as so designated), by striking ``and
which satisfies'' and all that follows through ``deems
necessary''; and
(4) by adding at the end the following:
``(4)(A) Subject to subparagraph (B), if there are insufficient
appropriations to make full payments for electric production from all
qualified renewable energy facilities for a fiscal year, the Secretary
shall assign--
``(i) 60 percent of appropriated funds for the fiscal year
to facilities that use solar, wind, ocean (tidal, wave,
current, and thermal), geothermal, or closed-loop (dedicated
energy crops) biomass technologies to generate electricity; and
``(ii) 40 percent of appropriated funds for the fiscal year
to other projects.
``(B) After submitting to Congress an explanation of the reasons
for the alteration, the Secretary may alter the percentage requirements
of subparagraph (A).''.
(b) Qualified Renewable Energy Facility.--Section 1212(b) of the
Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is amended--
(1) by striking ``a State or any political'' and all that
follows through ``nonprofit electrical cooperative'' and
inserting ``a not-for-profit electric cooperative, a public
utility described in section 115 of the Internal Revenue Code
of 1986, a State, Commonwealth, territory, or possession of the
United States, or the District of Columbia, or a political
subdivision thereof, an Indian tribal government or subdivision
thereof, or a Native Corporation (as defined in section 3 of
the Alaska Native Claims Settlement Act (43 U.S.C. 1602)),'';
and
(2) by inserting ``landfill gas,'' after ``wind,
biomass,''.
(c) Eligibility Window.--Section 1212(c) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(c)) is amended by striking ``during the 10-
fiscal year period beginning with the first full fiscal year occurring
after the enactment of this section'' and inserting ``before October 1,
2016''.
(d) Payment Period.--Section 1212(d) of the Energy Policy Act of
1992 (42 U.S.C. 13317(d)) is amended in the second sentence by
inserting ``, or in which the Secretary determines that all necessary
Federal and State authorizations have been obtained to begin
construction of the facility'' after ``eligible for such payments''.
(e) Amount of Payment.--Section 1212(e)(1) of the Energy Policy Act
of 1992 (42 U.S.C. 13317(e)(1)) is amended in the first sentence by
inserting ``landfill gas,'' after ``wind, biomass,''.
(f) Termination of Authority.--Section 1212(f) of the Energy Policy
Act of 1992 (42 U.S.C. 13317(f)) is amended by striking ``the
expiration of'' and all that follows through ``of this section'' and
inserting ``September 30, 2026''.
(g) Authorization of Appropriations.--Section 1212 of the Energy
Policy Act of 1992 (42 U.S.C. 13317) is amended by striking subsection
(g) and inserting the following:
``(g) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
each of fiscal years 2006 through 2026, to remain available until
expended.''.
SEC. 203. FEDERAL PURCHASE REQUIREMENT.
(a) Definitions.--In this section:
(1) Biomass.--The term ``biomass'' means any solid,
nonhazardous, cellulosic material that is derived from--
(A) any of the following forest-related resources:
mill residue, precommercial thinning, slash, brush, or
nonmerchantable material;
(B) a solid wood waste material--
(i) including a waste pallet, crate,
dunnage, manufacturing and construction wood
waste (other than pressure-treated, chemically-
treated, or painted wood waste), and landscape
or right-of-way tree trimming; but
(ii) not including municipal solid waste
(garbage), gas derived from the biodegradation
of solid waste, or paper that is commonly
recycled;
(C) agriculture waste, including an orchard tree
crop, vineyard, grain, legume, sugar, and other crop
byproduct or residue, and a livestock waste nutrient;
or
(D) a plant that is grown exclusively as a fuel for
the production of electricity.
(2) Renewable energy.--The term ``renewable energy'' means
electric energy generated from solar, wind, biomass, ocean
(tidal, wave, current, and thermal), landfill gas, geothermal,
municipal solid waste, or new hydroelectric generation capacity
achieved from increased efficiency or additions of new capacity
at an existing hydroelectric project.
(b) Requirement.--The President, acting through the Secretary,
shall seek to ensure that, to the extent economically feasible and
technically practicable, of the total quantity of electric energy the
Federal Government consumes during any fiscal year, the following
amounts shall be renewable energy:
(1) Not less than 3 percent in each of fiscal years 2007
through 2009.
(2) Not less than 5 percent in each of fiscal years 2010
through 2012.
(3) Not less than 7.5 percent in fiscal year 2013 and each
fiscal year thereafter.
(c) Calculation.--For purposes of determining compliance with the
requirement of this section, the quantity of renewable energy shall be
doubled if--
(1) the renewable energy is produced and used onsite at a
Federal facility;
(2) the renewable energy is produced on Federal land and
used at a Federal facility; or
(3) the renewable energy is produced on Indian land (as
defined in section 2601 of the Energy Policy Act of 1992) and
used at a Federal facility.
(d) Report.--Not later than April 15, 2007, and every 2 years
thereafter, the Secretary shall provide to Congress a report on the
progress of the Federal Government in meeting the goals established by
this section.
Subtitle B--Reliable Fuels
SEC. 211. RENEWABLE CONTENT OF GASOLINE.
(a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545)
is amended--
(1) by redesignating subsection (o) as subsection (r); and
(2) by inserting after subsection (n) the following:
``(o) Renewable Fuel Program.--
``(1) Definitions.--In this section:
``(A) Cellulosic biomass ethanol.--The term
`cellulosic biomass ethanol' means ethanol derived from
any lignocellulosic or hemicellulosic matter that is
available on a renewable or recurring basis,
including--
``(i) dedicated energy crops and trees;
``(ii) wood and wood residues;
``(iii) plants;
``(iv) grasses;
``(v) agricultural residues;
``(vi) fibers;
``(vii) animal wastes and other waste
materials; and
``(viii) municipal solid waste.
``(B) Renewable fuel.--
``(i) In general.--The term `renewable
fuel' means motor vehicle fuel that--
``(I)(aa) is produced from grain,
starch, oilseeds, sugarcane, sugar
beets, sugar components, tobacco,
potatoes, or other biomass; or
``(bb) is natural gas produced from
a biogas source, including a landfill,
sewage waste treatment plant, feedlot,
or other place where decaying organic
material is found; and
``(II) is used to replace or reduce
the quantity of fossil fuel present in
a fuel mixture used to operate a motor
vehicle.
``(ii) Inclusion.--The term `renewable
fuel' includes--
``(I) cellulosic biomass ethanol;
and
``(II) biodiesel (as defined in
section 312(f) of the Energy Policy Act
of 1992 (42 U.S.C. 13220(f))).
``(C) Small refinery.--The term `small refinery'
means a refinery for which the average aggregate daily
crude oil throughput for a calendar year (as determined
by dividing the aggregate throughput for the calendar
year by the number of days in the calendar year) does
not exceed 75,000 barrels.
``(2) Renewable fuel program.--
``(A) Regulations.--
``(i) In general.--Not later than 1 year
after the date of enactment of this paragraph,
the Administrator shall promulgate regulations
to ensure that gasoline sold or introduced into
commerce in the United States (except in
noncontiguous States or territories), on an
annual average basis, contains the applicable
volume of renewable fuel determined in
accordance with subparagraph (B).
``(ii) Noncontiguous state opt-in.--
``(I) In general.--On the petition
of a noncontiguous State or territory,
the Administrator may allow the
renewable fuel program established
under this subsection to apply in the
noncontiguous State or territory at the
same time or any time after the
Administrator promulgates regulations
under this subparagraph.
``(II) Other actions.--In carrying
out this clause, the Administrator
may--
``(aa) issue or revise
regulations under this
paragraph;
``(bb) establish applicable
percentages under paragraph
(3);
``(cc) provide for the
generation of credits under
paragraph (5); and
``(dd) take such other
actions as are necessary to
allow for the application of
the renewable fuels program in
a noncontiguous State or
territory.
``(iii) Provisions of regulations.--
Regardless of the date of promulgation, the
regulations promulgated under clause (i)--
``(I) shall contain compliance
provisions applicable to refineries,
blenders, distributors, and importers,
as appropriate, to ensure that the
requirements of this paragraph are met;
but
``(II) shall not--
``(aa) restrict geographic
areas in which renewable fuel
may be used; or
``(bb) impose any per-
gallon obligation for the use
of renewable fuel.
``(iv) Requirement in case of failure to
promulgate regulations.--If the Administrator
does not promulgate regulations under clause
(i), the percentage of renewable fuel in
gasoline sold or dispensed to consumers in the
United States, on a volume basis, shall be 3.2
percent for calendar year 2006.
``(B) Applicable volume.--
``(i) Calendar years 2006 through 2012.--
For the purpose of subparagraph (A), the
applicable volume for any of calendar years
2006 through 2012 shall be determined in
accordance with the following table:
Applicable volume of renewable fuel
``Calendar year: (in billions of gallons):
2006.......................................... 4.0
2007.......................................... 4.7
2008.......................................... 5.4
2009.......................................... 6.1
2010.......................................... 6.8
2011.......................................... 7.4
2012.......................................... 8.0.
``(ii) Calendar year 2013 and thereafter.--
Subject to clauses (iii) and (iv), for the
purposes of subparagraph (A), the applicable
volume for calendar year 2013 and each calendar
year thereafter shall be determined by the
Administrator, in coordination with the
Secretary of Agriculture and the Secretary of
Energy, based on a review of the implementation
of the program during calendar years 2006
through 2012, including a review of--
``(I) the impact of the use of
renewable fuels on the environment, air
quality, energy security, job creation,
and rural economic development; and
``(II) the expected annual rate of
future production of renewable fuels,
including cellulosic ethanol.
``(iii) Minimum quantity derived from
cellulosic biomass.--For calendar year 2013 and
each calendar year thereafter--
``(I) the applicable volume
referred to in clause (ii) shall
contain a minimum of 250,000,000
gallons that are derived from
cellulosic biomass; and
``(II) the 2.5-to-1 ratio referred
to in paragraph (4) shall not apply.
``(iv) Minimum applicable volume.--For the
purpose of subparagraph (A), the applicable
volume for calendar year 2013 and each calendar
year thereafter shall be not less than the
product obtained by multiplying--
``(I) the number of gallons of
gasoline that the Administrator
estimates will be sold or introduced
into commerce in the calendar year; and
``(II) the ratio that--
``(aa) 8,000,000,000
gallons of renewable fuel;
bears to
``(bb) the number of
gallons of gasoline sold or
introduced into commerce in
calendar year 2012.
``(3) Applicable percentages.--
``(A) Provision of estimate of volumes of Gasoline
sales.--Not later than October 31 of each of calendar
years 2005 through 2011, the Administrator of the
Energy Information Administration shall provide to the
Administrator of the Environmental Protection Agency an
estimate, with respect to the following calendar year,
of the volumes of gasoline projected to be sold or
introduced into commerce in the United States.
``(B) Determination of applicable percentages.--
``(i) In general.--Not later than November
30 of each of calendar years 2005 through 2012,
based on the estimate provided under
subparagraph (A), the Administrator of the
Environmental Protection Agency shall determine
and publish in the Federal Register, with
respect to the following calendar year, the
renewable fuel obligation that ensures that the
requirements of paragraph (2) are met.
``(ii) Required elements.--The renewable
fuel obligation determined for a calendar year
under clause (i) shall--
``(I) be applicable to refineries,
blenders, and importers, as
appropriate;
``(II) be expressed in terms of a
volume percentage of gasoline sold or
introduced into commerce in the United
States; and
``(III) subject to subparagraph
(C)(i), consist of a single applicable
percentage that applies to all
categories of persons specified in
subclause (I).
``(C) Adjustments.--In determining the applicable
percentage for a calendar year, the Administrator shall
make adjustments--
``(i) to prevent the imposition of
redundant obligations on any person specified
in subparagraph (B)(ii)(I); and
``(ii) to account for the use of renewable
fuel during the previous calendar year by small
refineries that are exempt under paragraph (9).
``(4) Cellulosic biomass ethanol.--For the purpose of
paragraph (2), 1 gallon of cellulosic biomass ethanol shall be
considered to be the equivalent of 2.5 gallons of renewable
fuel.
``(5) Credit program.--
``(A) In general.--The regulations promulgated
under paragraph (2)(A) shall provide--
``(i) for the generation of an appropriate
amount of credits by any person that refines,
blends, or imports gasoline that contains a
quantity of renewable fuel that is greater than
the quantity required under paragraph (2);
``(ii) for the generation of an appropriate
amount of credits for biodiesel; and
``(iii) for the generation of credits by
small refineries in accordance with paragraph
(9)(C).
``(B) Use of credits.--A person that generates
credits under subparagraph (A) may use the credits, or
transfer all or a portion of the credits to another
person, for the purpose of complying with paragraph
(2).
``(C) Duration of credits.--A credit generated
under this paragraph shall be valid to show compliance
for the calendar year in which the credit was
generated.
``(D) Inability to generate or purchase sufficient
credits.--The regulations promulgated under paragraph
(2)(A) shall include provisions allowing any person
that is unable to generate or purchase sufficient
credits to meet the requirements of paragraph (2) to
carry forward a renewable fuel deficit on condition
that the person, in the calendar year following the
year in which the renewable fuel deficit is created--
``(i) achieves compliance with the
renewable fuel requirement under paragraph (2);
and
``(ii) generates or purchases additional
renewable fuel credits to offset the renewable
fuel deficit of the previous year.
``(6) Seasonal variations in renewable fuel use.--
``(A) Study.--For each of calendar years 2006
through 2012, the Administrator of the Energy
Information Administration shall conduct a study of
renewable fuel blending to determine whether there are
excessive seasonal variations in the use of renewable
fuel.
``(B) Regulation of excessive seasonal
variations.--If, for any calendar year, the
Administrator of the Energy Information Administration,
based on the study under subparagraph (A), makes the
determinations specified in subparagraph (C), the
Administrator of the Environmental Protection Agency
shall promulgate regulations to ensure that 35 percent
or more of the quantity of renewable fuel necessary to
meet the requirements of paragraph (2) is used during
each of the 2 periods specified in subparagraph (D) of
each subsequent calendar year.
``(C) Determinations.--The determinations referred
to in subparagraph (B) are that--
``(i) less than 35 percent of the quantity
of renewable fuel necessary to meet the
requirements of paragraph (2) has been used
during 1 of the 2 periods specified in
subparagraph (D) of the calendar year; and
``(ii) a pattern of excessive seasonal
variation described in clause (i) will continue
in subsequent calendar years.
``(D) Periods.--The 2 periods referred to in this
paragraph are--
``(i) April through September; and
``(ii) January through March and October
through December.
``(E) Exclusion.--Renewable fuel blended or
consumed in calendar year 2006 in a State that has
received a waiver under section 209(b) shall not be
included in the study under subparagraph (A).
``(F) State exemption from seasonality
requirements.--Notwithstanding any other provision of
law, the seasonality requirement relating to renewable
fuel use established by this paragraph shall not apply
to any State that has received a waiver under section
209(b).
``(7) Waivers.--
``(A) In general.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, may waive the requirements of
paragraph (2) in whole or in part on petition by 1 or
more States by reducing the national quantity of
renewable fuel required under paragraph (2)--
``(i) based on a determination by the
Administrator, after public notice and
opportunity for comment, that implementation of
the requirement would severely harm the economy
or environment of a State, a region, or the
United States; or
``(ii) based on a determination by the
Administrator, after public notice and
opportunity for comment, that there is an
inadequate domestic supply.
``(B) Petitions for waivers.--The Administrator, in
consultation with the Secretary of Agriculture and the
Secretary of Energy, shall approve or disapprove a
State petition for a waiver of the requirements of
paragraph (2) within 90 days after the date on which
the petition is received by the Administrator.
``(C) Termination of waivers.--A waiver granted
under subparagraph (A) shall terminate after 1 year,
but may be renewed by the Administrator after
consultation with the Secretary of Agriculture and the
Secretary of Energy.
``(8) Study and waiver for initial year of program.--
``(A) In general.--Not later than 180 days after
the date of enactment of this paragraph, the Secretary
of Energy shall conduct for the Administrator a study
assessing whether the renewable fuel requirement under
paragraph (2) will likely result in significant adverse
impacts on consumers in 2006, on a national, regional,
or State basis.
``(B) Required evaluations.--The study shall
evaluate renewable fuel--
``(i) supplies and prices;
``(ii) blendstock supplies; and
``(iii) supply and distribution system
capabilities.
``(C) Recommendations by the Secretary.--Based on
the results of the study, the Secretary of Energy shall
make specific recommendations to the Administrator
concerning waiver of the requirements of paragraph (2),
in whole or in part, to prevent any adverse impacts
described in subparagraph (A).
``(D) Waiver.--
``(i) In general.--Not later than 270 days
after the date of enactment of this paragraph,
the Administrator shall, if and to the extent
recommended by the Secretary of Energy under
subparagraph (C), waive, in whole or in part,
the renewable fuel requirement under paragraph
(2) by reducing the national quantity of
renewable fuel required under paragraph (2) in
calendar year 2006.
``(ii) No effect on waiver authority.--
Clause (i) does not limit the authority of the
Administrator to waive the requirements of
paragraph (2) in whole, or in part, under
paragraph (7).
``(9) Small refineries.--
``(A) Temporary exemption.--
``(i) In general.--The requirements of
paragraph (2) shall not apply to small
refineries until calendar year 2011.
``(ii) Extension of exemption.--
``(I) Study by Secretary of
Energy.--Not later than December 31,
2008, the Secretary of Energy shall
conduct for the Administrator a study
to determine whether compliance with
the requirements of paragraph (2) would
impose a disproportionate economic
hardship on small refineries.
``(II) Extension of exemption.--In
the case of a small refinery that the
Secretary of Energy determines under
subclause (I) would be subject to a
disproportionate economic hardship if
required to comply with paragraph (2),
the Administrator shall extend the
exemption under clause (i) for the
small refinery for a period of not less
than 2 additional years.
``(B) Petitions based on disproportionate economic
hardship.--
``(i) Extension of exemption.--A small
refinery may at any time petition the
Administrator for an extension of the exemption
under subparagraph (A) for the reason of
disproportionate economic hardship.
``(ii) Evaluation of petitions.--In
evaluating a petition under clause (i), the
Administrator, in consultation with the
Secretary of Energy, shall consider the
findings of the study under subparagraph
(A)(ii) and other economic factors.
``(iii) Deadline for action on petitions.--
The Administrator shall act on any petition
submitted by a small refinery for a hardship
exemption not later than 90 days after the date
of receipt of the petition.
``(C) Credit program.--If a small refinery notifies
the Administrator that the small refinery waives the
exemption under subparagraph (A), the regulations
promulgated under paragraph (2)(A) shall provide for
the generation of credits by the small refinery under
paragraph (5) beginning in the calendar year following
the date of notification.
``(D) Opt-in for small refineries.--A small
refinery shall be subject to the requirements of
paragraph (2) if the small refinery notifies the
Administrator that the small refinery waives the
exemption under subparagraph (A).
``(10) Ethanol market concentration analysis.--
``(A) Analysis.--
``(i) In general.--Not later than 180 days
after the date of enactment of this paragraph,
and annually thereafter, the Federal Trade
Commission shall perform a market concentration
analysis of the ethanol production industry
using the Herfindahl-Hirschman Index to
determine whether there is sufficient
competition among industry participants to
avoid price-setting and other anticompetitive
behavior.
``(ii) Scoring.--For the purpose of scoring
under clause (i) using the Herfindahl-Hirschman
Index, all marketing arrangements among
industry participants shall be considered.
``(B) Report.--Not later than December 1, 2005, and
annually thereafter, the Federal Trade Commission shall
submit to Congress and the Administrator a report on
the results of the market concentration analysis
performed under subparagraph (A)(i).
``(p) Renewable Fuel Safe Harbor.--
``(1) In general.--
``(A) Safe harbor.--Notwithstanding any other
provision of Federal or State law, no renewable fuel
(as defined in subsection (o)(1)) used or intended to
be used as a motor vehicle fuel, nor any motor vehicle
fuel containing renewable fuel, shall be deemed to be
defective in design or manufacture by reason of the
fact that the fuel is, or contains, renewable fuel,
if--
``(i) the fuel does not violate a control
or prohibition imposed by the Administrator
under this section; and
``(ii) the manufacturer of the fuel is in
compliance with all requests for information
under subsection (b).
``(B) Safe harbor not applicable.--In any case in
which subparagraph (A) does not apply to a quantity of
fuel, the existence of a design defect or manufacturing
defect with respect to the fuel shall be determined
under otherwise applicable law.
``(2) Exception.--This subsection does not apply to ethers.
``(3) Applicability.--This subsection applies with respect
to all claims filed on or after the date of enactment of this
subsection.''.
(b) Penalties and Enforcement.--Section 211(d) of the Clean Air Act
(42 U.S.C. 7545(d)) is amended--
(1) in paragraph (1)--
(A) in the first sentence, by striking ``or (n)''
each place it appears and inserting ``(n), or (o)'';
and
(B) in the second sentence, by striking ``or (m)''
and inserting ``(m), or (o)''; and
(2) in the first sentence of paragraph (2), by striking
``and (n)'' each place it appears and inserting ``(n), and
(o)''.
(c) Exclusion From Ethanol Waiver.--Section 211(h) of the Clean Air
Act (42 U.S.C. 7545(h)) is amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following:
``(5) Exclusion from ethanol waiver.--
``(A) Promulgation of regulations.--Upon
notification, accompanied by supporting documentation,
from the Governor of a State that the Reid vapor
pressure limitation established by paragraph (4) will
increase emissions that contribute to air pollution in
any area in the State, the Administrator shall, by
regulation, apply, in lieu of the Reid vapor pressure
limitation established by paragraph (4), the Reid vapor
pressure limitation established by paragraph (1) to all
fuel blends containing gasoline and 10 percent
denatured anhydrous ethanol that are sold, offered for
sale, dispensed, supplied, offered for supply,
transported, or introduced into commerce in the area
during the high ozone season.
``(B) Deadline for promulgation.--The Administrator
shall promulgate regulations under subparagraph (A) not
later than 90 days after the date of receipt of a
notification from a Governor under that subparagraph.
``(C) Effective date.--
``(i) In general.--With respect to an area
in a State for which the Governor submits a
notification under subparagraph (A), the
regulations under that subparagraph shall take
effect on the later of--
``(I) the first day of the first
high ozone season for the area that
begins after the date of receipt of the
notification; or
``(II) 1 year after the date of
receipt of the notification.
``(ii) Extension of effective date Based on
determination of insufficient supply.--
``(I) In general.--If, after
receipt of a notification with respect
to an area from a Governor of a State
under subparagraph (A), the
Administrator determines, on the
Administrator's own motion or on
petition of any person and after
consultation with the Secretary of
Energy, that the promulgation of
regulations described in subparagraph
(A) would result in an insufficient
supply of gasoline in the State, the
Administrator, by regulation--
``(aa) shall extend the
effective date of the
regulations under clause (i)
with respect to the area for
not more than 1 year; and
``(bb) may renew the
extension under item (aa) for 2
additional periods, each of
which shall not exceed 1 year.
``(II) Deadline for action on
petitions.--The Administrator shall act
on any petition submitted under
subclause (I) not later than 180 days
after the date of receipt of the
petition.''.
SEC. 212. RENEWABLE FUEL.
(a) In General.--The Clean Air Act is amended by inserting after
section 211 (42 U.S.C. 7411) the following:
``SEC. 212. RENEWABLE FUEL.
``(a) Definitions.--In this section:
``(1) Municipal solid waste.--The term `municipal solid
waste' has the meaning given the term `solid waste' in section
1004 of the Solid Waste Disposal Act (42 U.S.C. 6903).
``(2) RFG State.--The term `RFG State' means a State in
which is located 1 or more covered areas (as defined in section
211(k)(10)(D)).
``(3) Secretary.--The term `Secretary' means the Secretary
of Energy.
``(b) Survey of Renewable Fuel Market.--
``(1) Survey and report.--Not later than December 1, 2006,
and annually thereafter, the Administrator shall--
``(A) conduct, with respect to each conventional
gasoline use area and each reformulated gasoline use
area in each State, a survey to determine the market
shares of--
``(i) conventional gasoline containing
ethanol;
``(ii) reformulated gasoline containing
ethanol;
``(iii) conventional gasoline containing
renewable fuel; and
``(iv) reformulated gasoline containing
renewable fuel; and
``(B) submit to Congress, and make publicly
available, a report on the results of the survey under
subparagraph (A).
``(2) Recordkeeping and reporting requirements.--
``(A) In general.--The Administrator may require
any refiner, blender, or importer to keep such records
and make such reports as are necessary to ensure that
the survey conducted under paragraph (1) is accurate.
``(B) Reliance on existing requirements.--To avoid
duplicative requirements, in carrying out subparagraph
(A), the Administrator shall rely, to the maximum
extent practicable, on reporting and recordkeeping
requirements in effect on the date of enactment of this
section.
``(3) Confidentiality.--Activities carried out under this
subsection shall be conducted in a manner designed to protect
confidentiality of individual responses.
``(c) Cellulosic Biomass Ethanol And Municipal Solid Waste Loan
Guarantee Program.--
``(1) In general.--Funds may be provided for the cost (as
defined in the Federal Credit Reform Act of 1990 (2 U.S.C. 661
et seq.)) of loan guarantees issued under title XIV of the
Energy Policy Act of 2005 to carry out commercial demonstration
projects for celluosic biomass and sucrose-derived ethanol.
``(2) Demonstration projects.--
``(A) In general.--The Secretary shall issue loan
guarantees under this section to carry out not more
than 4 projects to commercially demonstrate the
feasibility and viability of producing cellulosic
biomass ethanol or sucrose-derived ethanol, including
at least 1 project that uses cereal straw as a
feedstock and 1 project that uses municipal solid waste
as a feedstock.
``(B) Design capacity.--Each project shall have a
design capacity to produce at least 30,000,000 gallons
of cellulosic biomass ethanol each year.
``(3) Applicant assurances.--An applicant for a loan
guarantee under this section shall provide assurances,
satisfactory to the Secretary, that--
``(A) the project design has been validated through
the operation of a continuous process facility with a
cumulative output of at least 50,000 gallons of
ethanol;
``(B) the project has been subject to a full
technical review;
``(C) the project is covered by adequate project
performance guarantees;
``(D) the project, with the loan guarantee, is
economically viable; and
``(E) there is a reasonable assurance of repayment
of the guaranteed loan.
``(4) Limitations.--
``(A) Maximum guarantee.--Except as provided in
subparagraph (B), a loan guarantee under this section
may be issued for up to 80 percent of the estimated
cost of a project, but may not exceed $250,000,000 for
a project.
``(B) Additional guarantees.--
``(i) In general.--The Secretary may issue
additional loan guarantees for a project to
cover up to 80 percent of the excess of actual
project cost over estimated project cost but
not to exceed 15 percent of the amount of the
original guarantee.
``(ii) Principal and interest.--Subject to
subparagraph (A), the Secretary shall guarantee
100 percent of the principal and interest of a
loan made under subparagraph (A).
``(5) Equity contributions.--To be eligible for a loan
guarantee under this section, an applicant for the loan
guarantee shall have binding commitments from equity investors
to provide an initial equity contribution of at least 20
percent of the total project cost.
``(6) Insufficient amounts.--If the amount made available
to carry out this section is insufficient to allow the
Secretary to make loan guarantees for 3 projects described in
subsection (b), the Secretary shall issue loan guarantees for 1
or more qualifying projects under this section in the order in
which the applications for the projects are received by the
Secretary.
``(7) Approval.--An application for a loan guarantee under
this section shall be approved or disapproved by the Secretary
not later than 90 days after the application is received by the
Secretary.
``(d) Authorization of Appropriations for Resource Center.--There
is authorized to be appropriated, for a resource center to further
develop bioconversion technology using low-cost biomass for the
production of ethanol at the Center for Biomass-Based Energy at the
Mississippi State University and the Oklahoma State University,
$4,000,000 for each of fiscal years 2005 through 2007.
``(e) Renewable Fuel Production Research and Development Grants.--
``(1) In general.--The Administrator shall provide grants
for the research into, and development and implementation of,
renewable fuel production technologies in RFG States with low
rates of ethanol production, including low rates of production
of cellulosic biomass ethanol.
``(2) Eligibility.--
``(A) In general.--The entities eligible to receive
a grant under this subsection are academic institutions
in RFG States, and consortia made up of combinations of
academic institutions, industry, State government
agencies, or local government agencies in RFG States,
that have proven experience and capabilities with
relevant technologies.
``(B) Application.--To be eligible to receive a
grant under this subsection, an eligible entity shall
submit to the Administrator an application in such
manner and form, and accompanied by such information,
as the Administrator may specify.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $25,000,000 for
each of fiscal years 2006 through 2010.
``(f) Cellulosic Biomass Ethanol Conversion Assistance.--
``(1) In general.--The Secretary may provide grants to
merchant producers of cellulosic biomass ethanol in the United
States to assist the producers in building eligible production
facilities described in paragraph (2) for the production of
cellulosic biomass ethanol.
``(2) Eligible production facilities.--A production
facility shall be eligible to receive a grant under this
subsection if the production facility--
``(A) is located in the United States; and
``(B) uses cellulosic biomass feedstocks derived
from agricultural residues or municipal solid waste.
``(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection--
``(A) $250,000,000 for fiscal year 2005; and
``(B) $400,000,000 for fiscal year 2006.''.
(b) Conforming Amendment.--The table of contents for the Clean Air
Act (42 U.S.C. 7401 prec.) is amended by inserting after the item
relating to section 211 the following:
``Sec. 212. Renewable fuels''.
SEC. 213. SURVEY OF RENEWABLE FUELS CONSUMPTION.
Section 205 of the Department of Energy Organization Act (42 U.S.C.
7135) is amended by adding at the end the following:
``(m) Survey of Renewable Fuels Consumption.--
``(1) In general.--In order to improve the ability to
evaluate the effectiveness of the Nation's renewable fuels
mandate, the Administrator shall conduct and publish the
results of a survey of renewable fuels consumption in the motor
vehicle fuels market in the United States monthly, and in a
manner designed to protect the confidentiality of individual
responses.
``(2) Elements of survey.--In conducting the survey, the
Administrator shall collect information retrospectively to
1998, on a national basis and a regional basis, including--
``(A) the quantity of renewable fuels produced;
``(B) the cost of production;
``(C) the cost of blending and marketing;
``(D) the quantity of renewable fuels blended;
``(E) the quantity of renewable fuels imported; and
``(F) market price data.''.
Subtitle C--Federal Reformulated Fuels
SEC. 221. SHORT TITLE.
This subtitle may be cited as the ``Federal Reformulated Fuels Act
of 2005''.
SEC. 222. LEAKING UNDERGROUND STORAGE TANKS.
(a) Use of LUST Funds for Remediation of Contamination From Ether
Fuel Additives.--Section 9003(h) of the Solid Waste Disposal Act (42
U.S.C. 6991b(h)) is amended--
(1) in paragraph (7)(A)--
(A) by striking ``paragraphs (1) and (2) of this
subsection'' and inserting ``paragraphs (1), (2), and
(12)''; and
(B) by inserting ``and section 9010'' before
``if''; and
(2) by adding at the end the following:
``(12) Remediation of contamination from ether fuel
additives.--
``(A) In general.--The Administrator and the States
may use funds made available under section 9013(1) to
carry out corrective actions with respect to a release
of methyl tertiary butyl ether or other ether fuel
additive that presents a threat to human health,
welfare, or the environment.
``(B) Applicable authority.--Subparagraph (A) shall
be carried out--
``(i) in accordance with paragraph (2),
except that a release with respect to which a
corrective action is carried out under
subparagraph (A) shall not be required to be
from an underground storage tank; and
``(ii) in the case of a State, in
accordance with a cooperative agreement entered
into by the Administrator and the State under
paragraph (7).''.
(b) Release Prevention and Compliance.--Subtitle I of the Solid
Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended by striking
section 9010 and inserting the following:
``SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.
``Funds made available under section 9013(2) from the Leaking
Underground Storage Tank Trust Fund may be used for conducting
inspections, or for issuing orders or bringing actions under this
subtitle--
``(1) by a State (pursuant to section 9003(h)(7)) acting
under--
``(A) a program approved under section 9004; or
``(B) State requirements regulating underground
storage tanks that are similar or identical to this
subtitle, as determined by the Administrator; and
``(2) by the Administrator, acting under this subtitle or a
State program approved under section 9004.
``SEC. 9011. AUTHORIZATION OF APPROPRIATIONS.
``In addition to amounts made available under section 2007(f),
there are authorized to be appropriated from the Leaking Underground
Storage Tank Trust Fund, notwithstanding section 9508(c)(1) of the
Internal Revenue Code of 1986--
``(1) to carry out section 9003(h)(12), $200,000,000 for
fiscal year 2005, to remain available until expended; and
``(2) to carry out section 9010--
``(A) $50,000,000 for fiscal year 2005; and
``(B) $30,000,000 for fiscal years 2006 through
2010.''.
(c) Technical Amendments.--
(1) Section 1001 of the Solid Waste Disposal Act (42 U.S.C.
prec. 6901) is amended by striking the item relating to section
9010 and inserting the following:
``Sec. 9010. Release prevention and compliance.
``Sec. 9011. Authorization of appropriations.''.
(2) Section 9001(3)(A) of the Solid Waste Disposal Act (42
U.S.C. 6991(3)(A)) is amended by striking ``sustances'' and
inserting ``substances''.
(3) Section 9003(f)(1) of the Solid Waste Disposal Act (42
U.S.C. 6991b(f)(1)) is amended by striking ``subsection (c) and
(d) of this section'' and inserting ``subsections (c) and
(d)''.
(4) Section 9004(a) of the Solid Waste Disposal Act (42
U.S.C. 6991c(a)) is amended in the second sentence by striking
``referred to'' and all that follows and inserting ``referred
to in subparagraph (A) or (B), or both, of section 9001(2).''.
(5) Section 9005 of the Solid Waste Disposal Act (42 U.S.C.
6991d) is amended--
(A) in subsection (a), by striking ``study taking''
and inserting ``study, taking'';
(B) in subsection (b)(1), by striking ``relevent''
and inserting ``relevant''; and
(C) in subsection (b)(4), by striking
``Evironmental'' and inserting ``Environmental''.
SEC. 223. RESTRICTIONS ON THE USE OF MTBE.
(a) Findings.--Congress finds that--
(1) since 1979, methyl tertiary butyl ether (referred to in
this section as ``MTBE'') has been used nationwide at low
levels in gasoline to replace lead as an octane booster or
anti-knocking agent;
(2) Public Law 101-549 (commonly known as the ``Clean Air
Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) established
a fuel oxygenate standard under which reformulated gasoline
must contain at least 2 percent oxygen by weight;
(3) at the time of the adoption of the fuel oxygenate
standard, Congress was aware that--
(A) increased use of MTBE could result from the
adoption of that standard; and
(B) the use of MTBE would likely be needed to
implement that standard;
(4) Congress is aware that gasoline and its component
additives have leaked from storage tanks, with consequences for
water quality;
(5) the fuel industry responded to the fuel oxygenate
standard established by Public Law 101-549 by making
substantial investments in--
(A) MTBE production capacity; and
(B) systems to deliver MTBE-containing gasoline to
the marketplace;
(6) when leaked or spilled into the environment, MTBE may
cause serious problems of drinking water quality;
(7) in recent years, MTBE has been detected in water
sources throughout the United States;
(8) MTBE can be detected by smell and taste at low
concentrations;
(9) while small quantities of MTBE can render water
supplies unpalatable, the precise human health effects of MTBE
consumption at low levels are yet unknown as of the date of
enactment of this Act;
(10) in the report entitled ``Achieving Clean Air and Clean
Water: The Report of the Blue Ribbon Panel on Oxygenates in
Gasoline'' and dated September 1999, Congress was urged--
(A) to eliminate the fuel oxygenate standard;
(B) to greatly reduce use of MTBE; and
(C) to maintain the environmental performance of
reformulated gasoline;
(11) Congress has--
(A) reconsidered the relative value of MTBE in
gasoline; and
(B) decided to eliminate use of MTBE as a fuel
additive;
(12) the timeline for elimination of use of MTBE as a fuel
additive must be established in a manner that achieves an
appropriate balance among the goals of--
(A) environmental protection;
(B) adequate energy supply; and
(C) reasonable fuel prices; and
(13) it is appropriate for Congress to provide some limited
transition assistance--
(A) to merchant producers of MTBE who produced MTBE
in response to a market created by the oxygenate
requirement contained in the Clean Air Act (42 U.S.C.
7401 et seq.); and
(B) for the purpose of mitigating any fuel supply
problems that may result from elimination of a widely-
used fuel additive.
(b) Purposes.--The purposes of this section are--
(1) to eliminate use of MTBE as a fuel oxygenate; and
(2) to provide assistance to merchant producers of MTBE in
making the transition from producing MTBE to producing other
fuel additives.
(c) Authority for Water Quality Protection From Fuels.--Section
211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is amended--
(1) in paragraph (1)(A)--
(A) by inserting ``fuel or fuel additive or'' after
``Administrator any''; and
(B) by striking ``air pollution which'' and
inserting ``air pollution, or water pollution, that'';
(2) in paragraph (4)(B), by inserting ``or water quality
protection,'' after ``emission control,''; and
(3) by adding at the end the following:
``(5) Restrictions on use of MTBE.--
``(A) In general.--Subject to subparagraph (E), not
later than 4 years after the date of enactment of this
paragraph, the use of methyl tertiary butyl ether in
motor vehicle fuel in any State other than a State
described in subparagraph (C) is prohibited.
``(B) Regulations.--The Administrator shall
promulgate regulations to effect the prohibition in
subparagraph (A).
``(C) States that authorize use.--A State described
in this subparagraph is a State that submits to the
Administrator a notice that the State authorizes use of
methyl tertiary butyl ether in motor vehicle fuel sold
or used in the State.
``(D) Publication of notice.--The Administrator
shall publish in the Federal Register each notice
submitted by a State under subparagraph (C).
``(E) Trace quantities.--In carrying out
subparagraph (A), the Administrator may allow trace
quantities of methyl tertiary butyl ether, not to
exceed 0.5 percent by volume, to be present in motor
vehicle fuel in cases that the Administrator determines
to be appropriate.
``(6) MTBE merchant producer conversion assistance.--
``(A) In general.--
``(i) Grants.--The Secretary of Energy, in
consultation with the Administrator, may make
grants to merchant producers of methyl tertiary
butyl ether in the United States to assist the
producers in the conversion of eligible
production facilities described in subparagraph
(C) to the production of--
``(I) iso-octane or alkylates,
unless the Administrator, in
consultation with the Secretary of
Energy, determines that transition
assistance for the production of iso-
octane or alkylates is inconsistent
with the criteria specified in
subparagraph (B); and
``(II) any other fuel additive that
meets the criteria specified in
subparagraph (B).
``(B) Criteria.--The criteria referred to in
subparagraph (A) are that--
``(i) use of the fuel additive is
consistent with this subsection;
``(ii) the Administrator has not determined
that the fuel additive may reasonably be
anticipated to endanger public health or the
environment;
``(iii) the fuel additive has been
registered and tested, or is being tested, in
accordance with the requirements of this
section; and
``(iv) the fuel additive will contribute to
replacing quantities of motor vehicle fuel
rendered unavailable as a result of paragraph
(5).
``(C) Eligible production facilities.--A production
facility shall be eligible to receive a grant under
this paragraph if the production facility--
``(i) is located in the United States; and
``(ii) produced methyl tertiary butyl ether
for consumption in nonattainment areas during
the period--
``(I) beginning on the date of
enactment of this paragraph; and
``(II) ending on the effective date
of the prohibition on the use of methyl
tertiary butyl ether under paragraph
(5).
``(D) Authorization of appropriations.--There is
authorized to be appropriated to carry out this
paragraph $250,000,000 for each of fiscal years 2005
through 2008.''.
(d) No Effect on Law Concerning State Authority.--The amendments
made by subsection (c) have no effect on any law enacted or in effect
before the date of enactment of this Act concerning the authority of
States to limit the use of methyl tertiary butyl ether in motor vehicle
fuel.
SEC. 224. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR REFORMULATED
GASOLINE.
(a) Elimination.--
(1) In general.--Section 211(k) of the Clean Air Act (42
U.S.C. 7545(k)) is amended--
(A) in paragraph (2)--
(i) in the second sentence of subparagraph
(A), by striking ``(including the oxygen
content requirement contained in subparagraph
(B))'';
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraphs (C)
and (D) as subparagraphs (B) and (C),
respectively;
(B) in paragraph (3)(A), by striking clause (v);
and
(C) in paragraph (7)--
(i) in subparagraph (A)--
(I) by striking clause (i); and
(II) by redesignating clauses (ii)
and (iii) as clauses (i) and (ii),
respectively; and
(ii) in subparagraph (C)--
(I) by striking clause (ii); and
(II) by redesignating clause (iii)
as clause (ii).
(2) Applicability.--The amendments made by paragraph (1)
apply--
(A) in the case of a State that has received a
waiver under section 209(b) of the Clean Air Act (42
U.S.C. 7543(b)), beginning on the date of enactment of
this Act; and
(B) in the case of any other State, beginning 270
days after the date of enactment of this Act.
(b) Maintenance of Toxic Air Pollutant Emission Reductions.--
Section 211(k)(1) of the Clean Air Act (42 U.S.C. 7545(k)(1)) is
amended--
(1) by striking ``Within 1 year after the enactment of the
Clean Air Act Amendments of 1990,'' and inserting the
following:
``(A) In general.--Not later than November 15,
1991,''; and
(2) by adding at the end the following:
``(B) Maintenance of toxic air pollutant emissions
reductions from reformulated Gasoline.--
``(i) Definition of PADD.--In this
subparagraph the term `PADD' means a Petroleum
Administration for Defense District.
``(ii) Regulations concerning emissions of
toxic air pollutants.--Not later than 270 days
after the date of enactment of this
subparagraph, the Administrator shall establish
by regulation, for each refinery or importer
(other than a refiner or importer in a State
that has received a waiver under section 209(b)
with respect to gasoline produced for use in
that State), standards for toxic air pollutants
from use of the reformulated gasoline produced
or distributed by the refiner or importer that
maintain the reduction of the average annual
aggregate emissions of toxic air pollutants for
reformulated gasoline produced or distributed
by the refiner or importer during calendar
years 2001 and 2002 (as determined on the basis
of data collected by the Administrator with
respect to the refiner or importer).
``(iii) Standards applicable to specific
refineries or importers.--
``(I) Applicability of standards.--
For any calendar year, the standards
applicable to a refiner or importer
under clause (ii) shall apply to the
quantity of gasoline produced or
distributed by the refiner or importer
in the calendar year only to the extent
that the quantity is less than or equal
to the average annual quantity of
reformulated gasoline produced or
distributed by the refiner or importer
during calendar years 2001 and 2002.
``(II) Applicability of other
standards.--For any calendar year, the
quantity of gasoline produced or
distributed by a refiner or importer
that is in excess of the quantity
subject to subclause (I) shall be
subject to standards for emissions of
toxic air pollutants promulgated under
subparagraph (A) and paragraph (3)(B).
``(iv) Credit program.--The Administrator
shall provide for the granting and use of
credits for emissions of toxic air pollutants
in the same manner as provided in paragraph
(7).
``(v) Regional protection of toxics
reduction baselines.--
``(I) In general.--Not later than
60 days after the date of enactment of
this subparagraph, and not later than
April 1 of each calendar year that
begins after that date of enactment,
the Administrator shall publish in the
Federal Register a report that
specifies, with respect to the previous
calendar year--
``(aa) the quantity of
reformulated gasoline produced
that is in excess of the
average annual quantity of
reformulated gasoline produced
in 2001 and 2002; and
``(bb) the reduction of the
average annual aggregate
emissions of toxic air
pollutants in each PADD, based
on retail survey data or data
from other appropriate sources.
``(II) Effect of failure to
maintain aggregate toxics reductions.--
If, in any calendar year, the reduction
of the average annual aggregate
emissions of toxic air pollutants in a
PADD fails to meet or exceed the
reduction of the average annual
aggregate emissions of toxic air
pollutants in the PADD in calendar
years 2001 and 2002, the Administrator,
not later than 90 days after the date
of publication of the report for the
calendar year under subclause (I),
shall--
``(aa) identify, to the
maximum extent practicable, the
reasons for the failure,
including the sources, volumes,
and characteristics of
reformulated gasoline that
contributed to the failure; and
``(bb) promulgate revisions
to the regulations promulgated
under clause (ii), to take
effect not earlier than 180
days but not later than 270
days after the date of
promulgation, to provide that,
notwithstanding clause
(iii)(II), all reformulated
gasoline produced or
distributed at each refiner or
importer shall meet the
standards applicable under
clause (iii)(I) beginning not
later than April 1 of the
calendar year following
publication of the report under
subclause (I) and in each
calendar year thereafter.
``(vi) Not later than July 1, 2007, the
Administrator shall promulgate final
regulations to control hazardous air pollutants
from motor vehicles and motor vehicle fuels, as
provided for in section 80.1045 of title 40,
Code of Federal Regulations (as in effect on
the date of enactment of this subparagraph),
and as authorized under section 202(1) of the
Clean Air Act. If the Administrator promulgates
by such date, final regulations to control
hazardous air pollutants from motor vehicles
and motor vehicle fuels that achieve and
maintain greater overall reductions in
emissions of air toxics from reformulated
gasoline than the reductions that would be
achieved under section 211(k)(1)(B) of the
Clean Air Act as amended by this clause, then
sections 21l(k)(1)(i) through 211(k)(1)(v)
shall be null and void and regulations
promulgated thereunder shall be rescinded and
have no further effect.
(c) Commingling.--
(1) In general.--Section 211(k) of the Clean Air Act (42
U.S.C. 7545(k)) is amended by adding at the end the following:
``(11) Commingling.--The regulations under paragraph (1)
shall permit the commingling at a retail station of
reformulated gasoline containing ethanol and reformulated
gasoline that does not contain ethanol if, each time such
commingling occurs--
``(A) the retailer notifies the Administrator
before the commingling, identifying the exact location
of the retail station and the specific tank in which
the commingling will take place; and
``(B) the retailer certifies that the reformulated
gasoline resulting from the commingling will meet all
applicable requirements for reformulated gasoline,
including content and emission performance
standards.''.
(d) Consolidation in Reformulated Gasoline Regulations.--Not later
than 180 days after the date of enactment of this Act, the
Administrator of the Environmental Protection Agency shall revise the
reformulated gasoline regulations under subpart D of part 80 of title
40, Code of Federal Regulations, to consolidate the regulations
applicable to VOC-Control Regions 1 and 2 under section 80.41 of that
title by eliminating the less stringent requirements applicable to
gasoline designated for VOC-Control Region 2 and instead applying the
more stringent requirements applicable to gasoline designated for VOC-
Control Region 1.
(e) Savings Clause.--
(1) In general.--Nothing in this section or any amendment
made by this section affects or prejudices any legal claim or
action with respect to regulations promulgated by the
Administrator before the date of enactment of this Act
regarding--
(A) emissions of toxic air pollutants from motor
vehicles; or
(B) the adjustment of standards applicable to a
specific refinery or importer made under those
regulations.
(2) Adjustment of standards.--
(A) Applicability.--The Administrator may apply any
adjustments to the standards applicable to a refinery
or importer under subparagraph (B)(iii)(I) of section
211(k)(1) of the Clean Air Act (as added by subsection
(b)(2)), except that--
(i) the Administrator shall revise the
adjustments to be based only on calendar years
2001 and 2002;
(ii) any such adjustment shall not be made
at a level below the average percentage of
reductions of emissions of toxic air pollutants
for reformulated gasoline supplied to PADD I
during calendar years 2001 and 2002; and
(iii) in the case of an adjustment based on
toxic air pollutant emissions from reformulated
gasoline significantly below the national
annual average emissions of toxic air
pollutants from all reformulated gasoline--
(I) the Administrator may revise
the adjustment to take account of the
scope of the prohibition on methyl
tertiary butyl ether imposed by
paragraph (5) of section 211(c) of the
Clean Air Act (as added by section
211(c)); and
(II) any such adjustment shall
require the refiner or importer, to the
maximum extent practicable, to maintain
the reduction achieved during calendar
years 2001 and 2002 in the average
annual aggregate emissions of toxic air
pollutants from reformulated gasoline
produced or distributed by the refiner
or importer.
SEC. 225. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS AND FUEL
ADDITIVES.
Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is
amended--
(1) in paragraph (2)--
(A) by striking ``may also'' and inserting ``shall,
on a regular basis,''; and
(B) by striking subparagraph (A) and inserting the
following:
``(A) to conduct tests to determine potential
public health and environmental effects of the fuel or
additive (including carcinogenic, teratogenic, or
mutagenic effects); and''; and
(2) by adding at the end the following:
``(4) Study on certain fuel additives and blendstocks.--
``(A) In general.--Not later than 2 years after the
date of enactment of this paragraph, the Administrator
shall--
``(i) conduct a study on the effects on
public health (including the effects on
children, pregnant women, minority or low-
income communities, and other sensitive
populations), air quality, and water resources
of increased use of, and the feasibility of
using as substitutes for methyl tertiary butyl
ether in gasoline--
``(I) ethyl tertiary butyl ether;
``(II) tertiary amyl methyl ether;
``(III) di-isopropyl ether;
``(IV) tertiary butyl alcohol;
``(V) other ethers and heavy
alcohols, as determined by then
Administrator;
``(VI) ethanol;
``(VII) iso-octane; and
``(VIII) alkylates; and
``(ii) conduct a study on the effects on
public health (including the effects on
children, pregnant women, minority or low-
income communities, and other sensitive
populations), air quality, and water resources
of the adjustment for ethanol-blended
reformulated gasoline to the volatile organic
compounds performance requirements that are
applicable under paragraphs (1) and (3) of
section 211(k); and
``(iii) submit to the Committee on
Environment and Public Works of the Senate and
the Committee on Energy and Commerce of the
House of Representatives a report describing
the results of the studies under clauses (i)
and (ii).
``(B) Contracts for study.--In carrying out this
paragraph, the Administrator may enter into 1 or more
contracts with nongovernmental entities such as--
``(i) the national energy laboratories; and
``(ii) institutions of higher education (as
defined in section 101 of the Higher Education
Act of 1965 (20 U.S.C. 1001)).''.
SEC. 226. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.
Section 211 of the Clean Air Act (42 U.S.C. 7545) (as amended by
section 205(a)) is amended by inserting after subsection (p) the
following:
``(q) Analyses of Motor Vehicle Fuel Changes and Emissions Model.--
``(1) Anti-backsliding analysis.--
``(A) Draft analysis.--Not later than 4 years after
the date of enactment of this paragraph, the
Administrator shall publish for public comment a draft
analysis of the changes in emissions of air pollutants
and air quality due to the use of motor vehicle fuel
and fuel additives resulting from implementation of the
amendments made by the Federal Reformulated Fuels Act
of 2005.
``(B) Final analysis.--After providing a reasonable
opportunity for comment but not later than 5 years
after the date of enactment of this paragraph, the
Administrator shall publish the analysis in final form.
``(2) Emissions model.--For the purposes of this section,
not later than 4 years after the date of enactment of this
paragraph, the Administrator shall develop and finalize an
emissions model that reflects, to the maximum extent
practicable, the effects of gasoline characteristics or
components on emissions from vehicles in the motor vehicle
fleet during calendar year 2007.
``(3) Permeation effects study.--
``(A) In general.--Not later than 1 year after the
date of enactment of this paragraph, the Administrator
shall conduct a study, and report to Congress the
results of the study, on the effects of ethanol content
in gasoline on permeation, the process by which fuel
molecules migrate through the elastomeric materials
(rubber and plastic parts) that make up the fuel and
fuel vapor systems of a motor vehicle.
``(B) Evaporative emissions.--The study shall
include estimates of the increase in total evaporative
emissions likely to result from the use of gasoline
with ethanol content in a motor vehicle, and the fleet
of motor vehicles, due to permeation.''.
SEC. 227. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE PROGRAM.
Section 211(k)(6) of the Clean Air Act (42 U.S.C. 7545(k)(6)) is
amended--
(1) by striking ``(6) Opt-in areas.--(A) Upon'' and
inserting the following:
``(6) Opt-in areas.--
``(A) Classified areas.--
``(i) In general.--Upon'';
(2) in subparagraph (B), by striking ``(B) If'' and
inserting the following:
``(ii) Effect of insufficient domestic
capacity to produce reformulated Gasoline.--
If'';
(3) in subparagraph (A)(ii) (as redesignated by paragraph
(2))--
(A) in the first sentence, by striking
``subparagraph (A)'' and inserting ``clause (i)''; and
(B) in the second sentence, by striking ``this
paragraph'' and inserting ``this subparagraph''; and
(4) by adding at the end the following:
``(B) Ozone transport Region.--
``(i) Application of prohibition.--
``(I) In general.--On application
of the Governor of a State in the ozone
transport region established by section
184(a), the Administrator, not later
than 180 days after the date of receipt
of the application, shall apply the
prohibition specified in paragraph (5)
to any area in the State (other than an
area classified as a marginal,
moderate, serious, or severe ozone
nonattainment area under subpart 2 of
part D of title I) unless the
Administrator determines under clause
(iii) that there is insufficient
capacity to supply reformulated
gasoline.
``(II) Publication of
application.--As soon as practicable
after the date of receipt of an
application under subclause (I), the
Administrator shall publish the
application in the Federal Register.
``(ii) Period of applicability.--Under
clause (i), the prohibition specified in
paragraph (5) shall apply in a State--
``(I) commencing as soon as
practicable but not later than 2 years
after the date of approval by the
Administrator of the application of the
Governor of the State; and
``(II) ending not earlier than 4
years after the commencement date
determined under subclause (I).
``(iii) Extension of commencement date
Based on insufficient capacity.--
``(I) In general.--If, after
receipt of an application from a
Governor of a State under clause (i),
the Administrator determines, on the
Administrator's own motion or on
petition of any person, after
consultation with the Secretary of
Energy, that there is insufficient
capacity to supply reformulated
gasoline, the Administrator, by
regulation--
``(aa) shall extend the
commencement date with respect
to the State under clause
(ii)(I) for not more than 1
year; and
``(bb) may renew the
extension under item (aa) for 2
additional periods, each of
which shall not exceed 1 year.
``(II) Deadline for action on
petitions.--The Administrator shall act
on any petition submitted under
subclause (I) not later than 180 days
after the date of receipt of the
petition.''.
SEC. 228. FEDERAL ENFORCEMENT OF STATE FUELS REQUIREMENTS.
Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 7545(c)(4)(C))
is amended--
(1) by striking ``(C) A State'' and inserting the
following:
``(C) Authority of State to control fuels and fuel
additives for reasons of necessity.--
``(i) In general.--A State''; and
(2) by adding at the end the following:
``(ii) Enforcement by the Administrator.--
In any case in which a State prescribes and
enforces a control or prohibition under clause
(i), the Administrator, at the request of the
State, shall enforce the control or prohibition
as if the control or prohibition had been
adopted under the other provisions of this
section.''.
SEC. 229. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.
(a) Study.--
(1) In general.--The Administrator of the Environmental
Protection Agency and the Secretary of Energy shall jointly
conduct a study of Federal, State, and local requirements
concerning motor vehicle fuels, including--
(A) requirements relating to reformulated gasoline,
volatility (measured in Reid vapor pressure),
oxygenated fuel, and diesel fuel; and
(B) other requirements that vary from State to
State, region to region, or locality to locality.
(2) Required elements.--The study shall assess--
(A) the effect of the variety of requirements
described in paragraph (1) on the supply, quality, and
price of motor vehicle fuels available to the consumer;
(B) the effect of the requirements described in
paragraph (1) on achievement of--
(i) national, regional, and local air
quality standards and goals; and
(ii) related environmental and public
health protection standards and goals
(including the protection of children, pregnant
women, minority or low-income communities, and
other sensitive populations);
(C) the effect of Federal, State, and local motor
vehicle fuel regulations, including multiple motor
vehicle fuel requirements, on--
(i) domestic refiners;
(ii) the fuel distribution system; and
(iii) industry investment in new capacity;
(D) the effect of the requirements described in
paragraph (1) on emissions from vehicles, refiners, and
fuel handling facilities;
(E) the feasibility of developing national or
regional motor vehicle fuel slates for the 48
contiguous States that, while protecting and improving
air quality at the national, regional, and local
levels, could--
(i) enhance flexibility in the fuel
distribution infrastructure and improve fuel
fungibility;
(ii) reduce price volatility and costs to
consumers and producers;
(iii) provide increased liquidity to the
gasoline market; and
(iv) enhance fuel quality, consistency, and
supply; and
(F) the feasibility of providing incentives, and
the need for the development of national standards
necessary, to promote cleaner burning motor vehicle
fuel.
(b) Report.--
(1) In general.--Not later than June 1, 2008, the
Administrator of the Environmental Protection Agency and the
Secretary of Energy shall submit to Congress a report on the
results of the study conducted under subsection (a).
(2) Recommendations.--
(A) In general.--The report shall contain
recommendations for legislative and administrative
actions that may be taken--
(i) to improve air quality;
(ii) to reduce costs to consumers and
producers; and
(iii) to increase supply liquidity.
(B) Required considerations.--The recommendations
under subparagraph (A) shall take into account the need
to provide advance notice of required modifications to
refinery and fuel distribution systems in order to
ensure an adequate supply of motor vehicle fuel in all
States.
(3) Consultation.--In developing the report, the
Administrator of the Environmental Protection Agency and the
Secretary of Energy shall consult with--
(A) the Governors of the States;
(B) automobile manufacturers;
(C) State and local air pollution control
regulators;
(D) public health experts;
(E) motor vehicle fuel producers and distributors;
and
(F) the public.
SEC. 230. ADVANCED BIOFUEL TECHNOLOGIES PROGRAM.
(a) In General.--Subject to the availability of appropriations
under subsection (d), the Administrator of the Environmental Protection
Agency shall, in consultation with the Secretary of Agriculture and the
Biomass Research and Development Technical Advisory Committee
established under section 306 of the Biomass Research and Development
Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note), establish a
program, to be known as the ``Advanced Biofuel Technologies Program'',
to demonstrate advanced technologies for the production of alternative
transportation fuels.
(b) Priority.--In carrying out the program under subsection (a),
the Administrator shall give priority to projects that enhance the
geographical diversity of alternative fuels production and utilize
feedstocks that represent 10 percent or less of ethanol or biodiesel
fuel production in the United States during the previous fiscal year.
(c) Demonstration Projects.--
(1) In general.--As part of the program under subsection
(a), the Administrator shall fund demonstration projects--
(A) to develop not less than 4 different conversion
technologies for producing cellulosic biomass ethanol;
and
(B) to develop not less than 5 technologies for
coproducing value-added bioproducts (such as
fertilizers, herbicides, and pesticides) resulting from
the production of biodiesel fuel.
(2) Administration.--Demonstration projects under this
subsection shall be--
(A) conducted based on a merit-reviewed,
competitive process; and
(B) subject to the cost-sharing requirements of
section 1002.
(d) Authorization of appropriations.--There are authorized to be
appropriated to carry out this section $110,000,000 for each of fiscal
years 2005 through 2009.
SEC. 231. SUGAR CANE ETHANOL PROGRAM.
(a) Definition of Program.--In this section, the term ``program''
means the Sugar Cane Ethanol Program established by subsection (b).
(b) Establishment.--There is established within the Environmental
Protection Agency a program to be known as the ``Sugar Cane Ethanol
Program''.
(c) Project.--
(1) In general.--Subject to the availability of
appropriations under subsection (d), in carrying out the
program, the Administrator of the Environmental Protection
Agency shall establish a project that is--
(A) carried out in multiple States--
(i) in each of which is produced cane sugar
that is eligible for loans under section 156 of
the Federal Agriculture Improvement and Reform
Act of 1996 (7 U.S.C. 7272), or a similar
subsequent authority; and
(ii) at the option of each such State, that
have an incentive program that requires the use
of ethanol in the State; and
(B) designed to study the production of ethanol
from cane sugar, sugarcane, and sugarcane byproducts.
(2) Requirements.--A project described in paragraph (1)
shall--
(A) be limited to the production of ethanol in the
States of Florida, Louisiana, Texas, and Hawaii in a
way similar to the existing program for the processing
of corn for ethanol to demonstrate that the process may
be applicable to cane sugar, sugarcane, and sugarcane
byproducts;
(B) include information on the ways in which the
scale of production may be replicated once the sugar
cane industry has located sites for, and constructed,
ethanol production facilities; and
(C) not last more than 3 years.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $36,000,000, to remain available
until expended.
SEC. 232. NATIONAL PRIORITY PROJECT DESIGNATION.
(a) Designation of National Priority Projects.--
(1) In general.--There is established the National Priority
Project Designation (referred to in this section as the
``Designation''), which shall be evidenced by a medal bearing
the inscription ``National Priority Project''.
(2) Design and materials.--The medal shall be of such
design and materials and bear such additional inscriptions as
the President may prescribe.
(b) Making and Presentation of Designation.--
(1) In general.--The President, on the basis of
recommendations made by the Secretary, shall annually designate
organizations that have--
(A) advanced the field of renewable energy
technology and contributed to North American energy
independence; and
(B) been certified by the Secretary under
subsection (e).
(2) Presentation.--The President shall designate projects
with such ceremonies as the President may prescribe.
(3) Use of designation.--An organization that receives a
Designation under this section may publicize the Designation of
the organization as a National Priority Project in advertising.
(4) Categories in which the designation may be given.--
Separate Designations shall be made to qualifying projects in
each of the following categories:
(A) Wind and biomass energy generation projects.
(B) Photovoltaic and fuel cell energy generation
projects.
(C) Energy efficient building and renewable energy
projects.
(D) First-in-Class projects.
(c) Selection Criteria.--
(1) In general.--Certification and selection of the
projects to receive the Designation shall be based on criteria
established under this subsection.
(2) Wind, biomass, and building projects.--In the case of a
wind, biomass, or building project, the project shall
demonstrate that the project will install not less than 30
megawatts of renewable energy generation capacity.
(3) Solar photovoltaic and fuel cell projects.--In the case
of a solar photovoltaic or fuel cell project, the project shall
demonstrate that the project will install not less than 3
megawatts of renewable energy generation capacity.
(4) Energy efficient building and renewable energy
projects.--In the case of an energy efficient building or
renewable energy project, in addition to meeting the criteria
established under paragraph (2), each building project shall
demonstrate that the project will--
(A) comply with third-party certification standards
for high-performance, sustainable buildings;
(B) use whole-building integration of energy
efficiency and environmental performance design and
technology, including advanced building controls;
(C) use renewable energy for at least 50 percent of
the energy consumption of the project;
(D) comply with applicable Energy Star standards;
and
(E) include at least 5,000,000 square feet of
enclosed space.
(5) First-in-class use.--Notwithstanding paragraphs (2)
through (4), a new building project may qualify under this
section if the Secretary determines that the project--
(A) represents a First-In-Class use of renewable
energy; or
(B) otherwise establishes a new paradigm of
building integrated renewable energy use or energy
efficiency.
(d) Application.--
(1) Initial applications.--No later than 120 days after the
date of enactment of this Act, and annually thereafter, the
Secretary shall publish in the Federal Register an invitation
and guidelines for submitting applications, consistent with
this section.
(2) Contents.--The application shall describe the project,
or planned project, and the plans to meet the criteria
established under subsection (c).
(e) Certification.--
(1) In general.--Not later than 60 days after the
application period described in subsection (d), and annually
thereafter, the Secretary shall certify projects that are
reasonably expected to meet the criteria established under
subsection (c).
(2) Certified projects.--The Secretary shall designate
personnel of the Department to work with persons carrying out
each certified project and ensure that the personnel--
(A) provide each certified project with guidance in
meeting the criteria established under subsection (c);
(B) identify programs of the Department, including
National Laboratories and Technology Centers, that will
assist each project in meeting the criteria established
under subsection (c); and
(C) ensure that knowledge and transfer of the most
current technology between the applicable resources of
the Federal Government (including the National
Laboratories and Technology Centers, the Department,
and the Environmental Protection Agency) and the
certified projects is being facilitated to accelerate
commercialization of work developed through those
resources.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
each of fiscal years 2006 through 2010.
SEC. 233. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.
The Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601
et seq.) is amended in title VI by adding at the end the following:
``SEC. 609. RURAL AND REMOTE COMMUNITIES ELECTRIFICATION GRANTS.
``(a) Definitions.--In this section:
``(1) The term `eligible grantee' means a local government
or municipality, peoples' utility district, irrigation
district, and cooperative, nonprofit, or limited-dividend
association in a rural area.
``(2) The term `incremental hydropower' means additional
generation achieved from increased efficiency after January 1,
2005, at a hydroelectric dam that was placed in service before
January 1, 2005.
``(3) The term `renewable energy' means electricity
generated from--
``(A) a renewable energy source; or
``(B) hydrogen, other than hydrogen produced from a
fossil fuel, that is produced from a renewable energy
source.
``(4) The term `renewable energy source' means--
``(A) wind;
``(B) ocean waves;
``(C) biomass;
``(D) solar
``(E) landfill gas;
``(F) incremental hydropower;
``(G) livestock methane; or
``(H) geothermal energy.
``(5) The term `rural area' means a city, town, or
unincorporated area that has a population of not more than
10,000 inhabitants.
``(b) Grants.--The Secretary, in consultation with the Secretary of
Agriculture and the Secretary of the Interior, may provide grants under
this section to eligible grantees for the purpose of--
``(1) increasing energy efficiency, siting or upgrading
transmission and distribution lines serving rural areas,; or
``(2) providing or modernizing electric generation
facilities that serve rural areas.
``(c) Grant Administration.--(1) The Secretary shall make grants
under this section based on a determination of cost-effectiveness and
the most effective use of the funds to achieve the purposes described
in subsection (b).
``(2) For each fiscal year, the Secretary shall allocate grant
funds under this section equally between the purposes described in
paragraphs (1) and (2) of subsection (b).
``(3) In making grants for the purposes described in subsection
(b)(2), the Secretary shall give preference to renewable energy
facilities.
``(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $20,000,000 for
each of fiscal years 2006 through 2012.''.
SEC. 234. WASTE-DERIVED ETHANOL AND BIODIESEL.
Section 312(f)(1) of the Energy Policy Act of 1992 (42 U.S.C.
13220(f)(1)) is amended--
(1) by striking ```biodiesel' means'' and inserting the
following: ```biodiesel'--
``(A) means''; and
(2) in subparagraph (A) (as designated by paragraph (1)) by
striking ``and'' at the end and inserting the following:
``(B) includes biodiesel derived from--
``(i) animal wastes, including poultry fats
and poultry wastes, and other waste materials;
or
``(ii) municipal solid waste and sludges
and oils derived from wastewater and the
treatment of wastewater; and''.''
Subtitle D--Insular Energy
SEC. 241. DEFINITIONS.
In this subtitle:
(1) Distributed generation.--The term ``distributed
generation'' means energy supplied in a rural or off-grid area.
(2) Insular area.--The term ``insular area'' means--
(A) Guam;
(B) American Samoa;
(C) the Commonwealth of the Northern Mariana
Islands;
(D) the Federated States of Micronesia;
(E) the Republic of the Marshall Islands;
(F) the Republic of Palau;
(G) the United States Virgin Islands; and
(H) the Commonwealth of Puerto Rico.
SEC. 242. ASSESSMENT.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary (in consultation with the Secretary of
Interior) shall--
(1) conduct an assessment of the energy needs of insular
areas; and
(2) submit a report describing the results of the
assessment to--
(A) the Committee on Energy and Natural Resources
of the Senate;
(B) the Committee on Energy and Commerce of the
House of Representatives; and
(C) the Committee on Resources of the House of
Representatives.
(b) Strategies and Projects.--In conducting the assessment, for
each of the insular areas, the Secretary shall identify and evaluate
the strategies or projects with the greatest potential for reducing the
dependence of the insular area on imported fossil fuels as used for the
generation of electricity, including strategies and projects for--
(1) improved supply-side efficiency of centralized
electrical generation, transmission, and distribution systems;
(2) improved demand-side management through--
(A) the application of established standards for
energy efficiency for appliances;
(B) the conduct of energy audits for business and
industrial customers; and
(C) the use of energy savings performance
contracts;
(3) increased use of renewable energy, including--
(A) solar thermal energy for electric generation;
(B) solar thermal energy for water heating in large
buildings, such as hotels, hospitals, government
buildings, and residences;
(C) photovoltaic energy;
(D) wind energy;
(E) hydroelectric energy;
(F) wave energy;
(G) energy from ocean thermal resources, including
ocean thermal-cooling for community air conditioning;
(H) water vapor condensation for the production of
potable water;
(I) fossil fuel and renewable hybrid electrical
generation systems; and
(J) other strategies or projects that the Secretary
may identify as having significant potential; and
(4) fuel substitution and minimization with indigenous
biofuels, such as coconut oil.
(c) Distributed Generation.--In conducting the assessment, for each
insular area with a significant need for distributed generation, the
Secretary shall identify and evaluate the most promising strategies and
projects described in paragraphs (3) and (4) of subsection (b) for
meeting that need.
(d) Factors.--In assessing the potential of any strategy or project
under this section, the Secretary shall consider--
(1) the estimated cost of the power or energy to be
produced, including--
(A) any additional costs associated with the
distribution of the generation; and
(B) the long-term availability of the generation
source;
(2) the capacity of the local electrical utility to manage,
operate, and maintain any project that may be undertaken; and
(3) other factors the Secretary considers to be
appropriate.
SEC. 243. PROJECT FEASIBILITY STUDIES.
(a) In General.--On a request described in subsection (b), the
Secretary shall conduct a feasibility study of a project to implement a
strategy or project identified under section 222 as having the
potential to--
(1) significantly reduce the dependence of an insular area
on imported oil; or
(2) provide needed distributed generation to an insular
area.
(b) Request.--The Secretary shall conduct a feasibility study under
subsection (a) on--
(1) the request of an electric utility located in an
insular area that commits to fund at least 10 percent of the
cost of the study; and
(2) if the electric utility is located in the Federated
States of Micronesia, the Republic of the Marshall Islands, or
the Republic of Palau, written support for that request by the
President or the Ambassador of the affected freely associated
state.
(c) Consultation.--The Secretary shall consult with regional
utility organizations in--
(1) conducting feasibility studies under subsection (a);
and
(2) determining the feasibility of potential projects.
(d) Feasibility.--For the purpose of a feasibility study under
subsection (a), a project shall be determined to be feasible if the
project would significantly reduce the dependence of an insular area on
imported fossil fuels, or provide needed distributed generation to an
insular area, at a reasonable cost.
SEC. 244. IMPLEMENTATION.
(a) In General.--On a determination by the Secretary (in
consultation with the Secretary of the Interior) that a project is
feasible under section 223 and a commitment by an electric utility to
operate and maintain the project, the Secretary may provide such
technical and financial assistance as the Secretary determines is
appropriate for the implementation of the project.
(b) Regional Utility Organizations.--In providing assistance under
subsection (a), the Secretary shall consider providing the assistance
through regional utility organizations.
SEC. 245. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to the
Secretary--
(1) $500,000 for the completion of the assessment under
section 222;
(2) $500,000 for each fiscal year for project feasibility
studies under section 223; and
(3) $5,000,000 for each fiscal year for project
implementation under section 224.
(b) Limitation of Funds Received by Insular Areas.--No insular area
may receive, during any 3-year period, more than 20 percent of the
total funds made available during that 3-year period under paragraphs
(2) and (3) of subsection (a) unless the Secretary determines that
providing funding in excess of that percentage best advances existing
opportunities to meet the objectives of this subtitle.
Subtitle E--Biomass Energy
SEC. 251. DEFINITIONS.
In this subtitle:
(1) Biomass.--The term ``biomass'' means nonmerchantable
material from, or precommercial thinnings of, trees and woody
plants produced from treatments--
(A) to reduce hazardous fuels;
(B) to reduce or contain disease or insect
infestations; or
(C) to restore forest health.
(2) Eligible community.--The term ``eligible community''
means an Indian Reservation, or a county, town, township,
municipality, or other similar unit of local government with a
population of not more than 50,000 individuals that the
Secretary determines is located in an area near Federal or
Indian land, that is--
(A) at significant risk of catastrophic wildfire,
disease, or insect infestation; or
(B) diseased or infested by insects.
(3) Eligible operation.--The term ``eligible operation''
means a facility that--
(A) is located within the boundaries of an eligible
community; and
(B) uses biomass from Federal or Indian land as a
raw material to produce electric energy, sensible heat,
or transportation fuels.
(4) Green ton.--The term ``green ton'' means 2,000 pounds
of biomass that has not been mechanically or artificially
dried.
(5) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4(e) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b(e)).
(6) Person.--The term ``person'' includes--
(A) an individual;
(B) an eligible community;
(C) an Indian tribe;
(D) a small business or a corporation that is
incorporated in the United States; and
(E) a nonprofit organization.
(7) Secretary.--The term ``Secretary'' means--
(A) the Secretary of Agriculture, with respect to
land within the National Forest System; or
(B) the Secretary of the Interior, with respect to
Federal land under the jurisdiction of the Secretary of
the Interior and Indian land.
SEC. 252. BIOMASS COMMERCIAL UTILIZATION GRANT PROGRAM.
(a) In General.--The Secretary may make grants to any person that
owns or operates an eligible operation to offset the costs incurred to
purchase biomass for use by the eligible operation.
(b) Priority.--In making grants under subsection (a), the Secretary
shall give priority to eligible operations that use biomass from the
highest risk areas, as determined by the Secretary.
(c) Grant Amount.--A grant provided under this section may not
exceed $20 per green ton of biomass delivered.
(d) Monitoring of Grant Recipient Activities.--
(1) In general.--As a condition of a grant under this
section, the grant recipient shall keep such records as the
Secretary may require to fully and correctly disclose the use
of the grant funds and all transactions involved in the
purchase of biomass.
(2) Access.--On notice by the Secretary, the grant
recipient shall provide the Secretary reasonable access to
examine the inventory and records of the eligible operation.
(e) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section for each of fiscal years 2006 through
2010--
(A) $12,500,000 to the Secretary of Agriculture;
and
(B) $12,500,000 to the Secretary of the Interior.
(2) Availability.--Amounts made available under paragraph
(1) shall remain available until expended.
SEC. 253. IMPROVED BIOMASS UTILIZATION PROGRAM.
(a) In General.--The Secretary may provide grants to persons in
eligible communities to offset the costs of developing or researching
proposals to improve the use of biomass or add value to biomass
utilization.
(b) Selection.--Grant recipients shall be selected based on the
potential of a proposal to--
(1) develop affordable thermal or electric energy resources
for the benefit of an eligible community;
(2) provide opportunities for the creation or expansion of
small business concerns within an eligible community;
(3) create new job opportunities within an eligible
community;
(4) improve efficiency or develop cleaner technologies for
biomass utilization; and
(5) reduce the hazardous fuel from the highest risk areas.
(c) Limitation.--No grant provided under this section shall exceed
$500,000.
(d) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section for each of fiscal years 2006 through
2010--
(A) $12,500,000 to the Secretary of Agriculture;
and
(B) $12,500,000 to the Secretary of the Interior.
(2) Availability.--Amounts made available under paragraph
(1) shall remain available until expended.
SEC. 254. REPORT.
Not later than 3 years after the date of enactment of this Act, the
Secretary of Agriculture and the Secretary of the Interior shall
jointly submit to Congress a report that describes the interim results
of the programs carried out under sections 232 and 233.
Subtitle F--Geothermal Energy
SEC. 261. COMPETITIVE LEASE SALE REQUIREMENTS.
Section 4 of the Geothermal Steam Act of 1970 (30 U.S.C. 1003) is
amended to read as follows:
``SEC. 4. LEASING PROCEDURES.
``(a) Nominations.--The Secretary shall accept nominations of land
to be leased at any time from qualified companies and individuals under
this Act.
``(b) Competitive Lease Sale Required.--
``(1) In general.--Except as otherwise specifically
provided by this Act, all land to be leased that is not subject
to leasing under subsection (c) shall be leased as provided in
this subsection to the highest responsible qualified bidder, as
determined by the Secretary.
``(2) Competitive lease sales.--The Secretary shall hold a
competitive lease sale at least once every 2 years for land in
a State that has nominations pending under subsection (a) if
the land is otherwise available for leasing.
``(c) Noncompetitive Leasing.--The Secretary shall make available
for a period of 2 years for noncompetitive leasing any tract for which
a competitive lease sale is held, but for which the Secretary does not
receive any bids in a competitive lease sale.
``(d) Pending Lease Applications.--
``(1) In general.--It shall be a priority for the
Secretary, and for the Secretary of Agriculture with respect to
National Forest Systems land, to ensure timely completion of
administrative actions necessary to process applications for
geothermal leasing pending on May 19, 2005.
``(2) Administration.--An application described in
paragraph (1) and any lease issued pursuant to the
application--
``(A) except as provided in subparagraph (B), shall
be subject to this section as in effect on the day
before the date of enactment of this paragraph; or
``(B) at the election of the applicant, shall be
subject to this section as in effect on the effective
date of this paragraph.''.
SEC. 262. DIRECT USE.
(a) Fees for Direct Use.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) is amended--
(1) in subsection (c), by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively;
(2) by redesignating subsections (a) through (d) as
paragraphs (1) through (4), respectively;
(3) by inserting ``(a) In General.--'' after ``Sec. 5.'';
and
(4) by adding at the end the following:
``(d) Direct Use.--
``(1) In general.--Notwithstanding subsection (a)(1), the
Secretary shall establish a schedule of fees, in lieu of
royalties for geothermal resources, that a lessee or its
affiliate--
``(A) uses for a purpose other than the commercial
generation of electricity; and
``(B) does not sell.
``(2) Schedule of fees.--The schedule of fees--
``(A) may be based on the quantity or thermal
content, or both, of geothermal resources used or any
other basis that the Secretary finds appropriate under
the circumstances; and
``(B) shall ensure a fair return to the United
States for use of the resource.
``(3) State or local governments.--If a State or local
government is the lessee and uses geothermal resources without
sale and for purposes other than commercial generation of
electricity, the Secretary shall charge only a nominal fee for
use of the resource.''.
(b) Leasing for Direct Use.--Section 4 of the Geothermal Steam Act
of 1970 (30 U.S.C. 1003) (as amended by section 241) is amended adding
at the end the following:
``(e) Leasing for Direct Use of Geothermal Resources.--
Notwithstanding subsection (b), the Secretary may identify areas in
which the land to be leased under this Act exclusively for direct use
of geothermal resources without sale for purposes other than commercial
generation of electricity may be leased to any qualified applicant that
first applies for such a lease under regulations issued by the
Secretary, if the Secretary--
``(1) publishes a notice of the land proposed for leasing
not later than 120 days before the date of the issuance of the
lease;
``(2) does not receive during the 120-day period beginning
on the date of the publication any nomination to include the
land concerned in the next competitive lease sale; and
``(3) determines there is no competitive interest in the
land to be leased.
``(f) Area Subject to Lease for Direct Use.--
``(1) In general.--Subject to paragraph (2), a geothermal
lease for the direct use of geothermal resources shall cover
not more than the quantity of acreage determined by the
Secretary to be reasonably necessary for the proposed use.
``(2) Limitations.--The quantity of acreage covered by the
lease shall not exceed the limitations established under
section 7.''.
SEC. 263. ROYALTIES.
(a) Calculation of Royalties.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Interior shall
issue a final regulation that provides a simplified methodology
for calculating the royalty under subsection (a)(1) of section
5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by section 242(a)).
(2) Considerations.--In issuing the final regulation under
paragraph (1), the Secretary shall--
(A) consider the use of a method based on gross
proceeds from the sale of electricity; and
(B) ensure that the final regulation issued under
paragraph (1) results in the same level of royalty
revenues over a 10-year period as the regulation in
effect on the day before the date of enactment of this
Act.
(b) Royalty Under Existing Leases.--
(1) In general.--Any lessee under a lease issued under the
Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) before
the date of enactment of this Act may, within the time period
specified in paragraph (2), submit to the Secretary of the
Interior a request to modify the terms of the lease relating to
payment of royalties to comply with--
(A) in the case of a lease that meets the
requirements of subsection (b) of section 5 of the
Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by section 242(a)), the schedule of fees
established under that section; and
(B) in the case of any other lease, the methodology
established under subsection (a).
(2) Timing.--A request for a modification under paragraph
(1) shall be submitted to the Secretary by the date that is not
later than--
(A) in the case of a lease for direct use, 18
months after the effective date of the schedule of fees
established by the Secretary under section 5 of the
Geothermal Steam Act of 1970 (30 U.S.C. 1004); or
(B) in the case of any other lease, 18 months after
the effective date of the final regulation issued under
subsection (a).
(3) Application of modification.--If the lessee requests
modification of a lease under paragraph (1)--
(A) the Secretary shall modify the lease to comply
with--
(i) in the case of a lease for direct use,
the schedule of fees established by the
Secretary under section 5 of the Geothermal
Steam Act of 1970 (30 U.S.C. 1004); or
(ii) in the case of any other lease, the
methodology established under subsection (a);
and
(B) the modification shall apply to any use of
geothermal steam and any associated geothermal
resources to which subsection (a) applies that occurs
after the date of the modification.
(4) Consultation.--The Secretary shall consult with the
State and local governments affected by any proposed changes in
lease royalty terms under this subsection.
SEC. 264. GEOTHERMAL LEASING AND PERMITTING ON FEDERAL LAND.
(a) In General.--Not later than 180 days after the date of
enactment of this section, the Secretary of the Interior and the
Secretary of Agriculture shall enter into, and submit to Congress, a
memorandum of understanding in accordance with this section regarding
leasing and permitting for geothermal development of public land and
National Forest System land under the respective jurisdictions of the
Secretaries.
(b) Lease and Permit Applications.--The memorandum of understanding
shall--
(1) identify areas with geothermal potential on land
included in the National Forest System and, if necessary,
require review of management plans to consider leasing under
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) as a
land use; and
(2) establish an administrative procedure for processing
geothermal lease applications, including lines of authority,
steps in application processing, and time limits for
application processing.
(c) Data Retrieval System.--The memorandum of understanding shall
establish a joint data retrieval system that--
(1) is capable of tracking lease and permit applications;
and
(2) provides to the applicant information as to the status
of an application within the Departments of the Interior and
Agriculture, including an estimate of the time required for
administrative action.
SEC. 265. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.
Not later than 3 years after the date of enactment of this Act and
thereafter as the availability of data and developments in technology
warrants, the Secretary of the Interior, acting through the Director of
the United States Geological Survey and in cooperation with the States,
shall--
(1) update the Assessment of Geothermal Resources made
during 1978; and
(2) submit to Congress the updated assessment.
SEC. 266. COOPERATIVE OR UNIT PLANS.
Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C. 1017) is
amended to read as follows:
``SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS.
``(a) Adoption of Units by Lessees.--
``(1) In general.--For the purpose of more properly
conserving the natural resources of any geothermal reservoir,
field, or like area, or any part thereof (whether or not any
part of the geothermal reservoir, field, or like area, is
subject to any cooperative plan of development or operation
(referred to in this section as a `unit agreement')), lessees
thereof and their representatives may unite with each other, or
jointly or separately with others, in collectively adopting and
operating under a unit agreement for the reservoir, field, or
like area, or any part thereof, including direct use resources,
if determined and certified by the Secretary to be necessary or
advisable in the public interest.
``(2) Majority interest of single leases.--A majority
interest of owners of any single lease shall have the authority
to commit the lease to a unit agreement.
``(3) Initiative of secretary.--The Secretary may also
initiate the formation of a unit agreement, or require an
existing Federal lease to commit to a unit agreement, if in the
public interest.
``(4) Modification of lease requirements by secretary.--
``(A) In general.--The Secretary may, in the
discretion of the Secretary and with the consent of the
holders of leases involved, establish, alter, change,
or revoke rates of operations (including drilling,
operations, production, and other requirements) of the
leases and make conditions with respect to the leases,
with the consent of the lessees, in connection with the
creation and operation of any such unit agreement as
the Secretary may consider necessary or advisable to
secure the protection of the public interest.
``(B) Unlike terms or rates.--Leases with unlike
lease terms or royalty rates shall not be required to
be modified to be in the same unit.
``(b) Requirement of Plans Under New Leases.--The Secretary may--
``(1) provide that geothermal leases issued under this Act
shall contain a provision requiring the lessee to operate under
a unit agreement; and
``(2) prescribe the unit agreement under which the lessee
shall operate, which shall adequately protect the rights of all
parties in interest, including the United States.
``(c) Modification of Rate of Prospecting, Development, and
Production.--The Secretary may require that any unit agreement
authorized by this section that applies to land owned by the United
States contain a provision under which authority is vested in the
Secretary, or any person, committee, or State or Federal officer or
agency as may be designated in the unit agreement to alter or modify,
from time to time, the rate of prospecting and development and the
quantity and rate of production under the unit agreement.
``(d) Exclusion From Determination of Holding or Control.--Any land
that is subject to a unit agreement approved or prescribed by the
Secretary under this section shall not be considered in determining
holdings or control under section 7.
``(e) Pooling of Certain Land.--If separate tracts of land cannot
be independently developed and operated to use geothermal steam and
associated geothermal resources pursuant to any section of this Act--
``(1) the land, or a portion of the land, may be pooled
with other land, whether or not owned by the United States, for
purposes of development and operation under a communitization
agreement providing for an apportionment of production or
royalties among the separate tracts of land comprising the
production unit, if the pooling is determined by the Secretary
to be in the public interest; and
``(2) operation or production pursuant to the
communitization agreement shall be treated as operation or
production with respect to each tract of land that is subject
to the communitization agreement.
``(f) Unit Agreement Review.--
``(1) In general.--Not later than 5 years after the date of
approval of any unit agreement and at least every 5 years
thereafter, the Secretary shall--
``(A) review each unit agreement; and
``(B) after notice and opportunity for comment,
eliminate from inclusion in the unit agreement any land
that the Secretary determines is not reasonably
necessary for unit operations under the unit agreement.
``(2) Basis for elimination.--The elimination shall--
``(A) be based on scientific evidence; and
``(B) occur only if the elimination is determined
by the Secretary to be for the purpose of conserving
and properly managing the geothermal resource.
``(3) Extension.--Any land eliminated under this subsection
shall be eligible for an extension under section 6(g) if the
land meets the requirements for the extension.
``(g) Drilling or Development Contracts.--
``(1) In general.--The Secretary may, on such conditions as
the Secretary may prescribe, approve drilling or development
contracts made by 1 or more lessees of geothermal leases, with
1 or more persons, associations, or corporations if, in the
discretion of the Secretary, the conservation of natural
resources or the public convenience or necessity may require or
the interests of the United States may be best served by the
approval.
``(2) Holdings or control.--Each lease operated under an
approved drilling or development contract, and interest under
the contract, shall be excepted in determining holdings or
control under section 7.
``(h) Coordination With State Governments.--The Secretary shall
coordinate unitization and pooling activities with appropriate State
agencies.''.
SEC. 267. ROYALTY ON BYPRODUCTS.
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as
amended by section 242(a)) is amended in subsection (a) by striking
paragraph (2) and inserting the following:
``(2) a royalty on any byproduct that is a mineral
specified in the first section of the Mineral Leasing Act (30
U.S.C. 181), and that is derived from production under the
lease, at the rate of the royalty that applies under that Act
to production of the mineral under a lease under that Act;''.
SEC. 268. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.
Section 6(i) of the Geothermal Steam Act of 1970 (30 U.S.C.
1005(i)) is amended by striking paragraph (2) and inserting the
following:
``(2) The Secretary shall, by regulation, establish payments under
this subsection at levels that ensure the diligent development of the
lease.''.
SEC. 269. ANNUAL RENTAL.
(a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of
1970 (30 U.S.C. 1004) (as amended by section 242(a)) is amended in
subsection (a) by striking paragraph (3) and inserting the following:
``(3) payment in advance of an annual rental of not less
than--
``(A) for each of the first through tenth years of
the lease--
``(i) in the case of a lease awarded in a
noncompetitive lease sale, $1 per acre or
fraction thereof; or
``(ii) in the case of a lease awarded in a
competitive lease sale, $2 per acre or fraction
thereof for the first year and $3 per acre or
fraction thereof for each of the second through
10th years; and
``(B) for each year after the 10th year of the
lease, $5 per acre or fraction thereof;''.
(b) Termination of Lease for Failure to Pay Rental.--Section 5 of
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) (as amended by
section 242(a)) is amended by adding at the end the following:
``(c) Termination of Lease for Failure to Pay Rental.--
``(1) In general.--The Secretary shall terminate any lease
with respect to which rental is not paid in accordance with
this Act and the terms of the lease under which the rental is
required, on the expiration of the 45-day period beginning on
the date of the failure to pay the rental.
``(2) Notification.--The Secretary shall promptly notify a
lessee that has not paid rental required under the lease that
the lease will be terminated at the end of the period referred
to in paragraph (1).
``(3) Reinstatement.--A lease that would otherwise
terminate under paragraph (1) shall not terminate under that
paragraph if the lessee pays to the Secretary, before the end
of the period referred to in paragraph (1), the amount of
rental due plus a late fee equal to 10 percent of the
amount.''.
SEC. 270. ADVANCED ROYALTIES REQUIRED FOR CESSATION OF PRODUCTION.
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004)
(as amended by section 249(b)) is amended by adding at the end the
following:
``(d) Advanced Royalties Required for Cessation of Production.--
``(1) In general.--Subject to paragraphs (2) and (3), if,
at any time after commercial production under a lease is
achieved, production ceases for any reason, the lease shall
remain in full force and effect for a period of not more than
an aggregate number of 10 years beginning on the date
production ceases, if, during the period in which production is
ceased, the lessee pays royalties in advance at the monthly
average rate at which the royalty was paid during the period of
production.
``(2) Reduction.--The amount of any production royalty paid
for any year shall be reduced (but not below 0) by the amount
of any advanced royalties paid under the lease to the extent
that the advance royalties have not been used to reduce
production royalties for a prior year.
``(3) Exceptions.--Paragraph (1) shall not apply if the
cessation in production is required or otherwise caused by--
``(A) the Secretary;
``(B) the Secretary of the Air Force;
``(C) the Secretary of the Army;
``(D) the Secretary of the Navy;
``(E) a State or a political subdivision of a
State; or
``(F) a force majeure.''.
SEC. 271. LEASING AND PERMITTING ON FEDERAL LAND WITHDRAWN FOR MILITARY
PURPOSES.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, the Secretary of the Interior and the Secretary of
Defense, in consultation with the Secretary of the Air Force, the
Secretary of the Army, the Secretary of the Navy, interested States,
political subdivisions of States, and representatives of the geothermal
industry, and other interested persons, shall submit to the appropriate
committees of Congress a joint report on leasing and permitting
activities for geothermal energy on Federal land withdrawn for military
purposes.
(b) Requirements.--The report required under subsection (a) shall
include--
(1) a description of the military geothermal program,
including a description of--
(A) any differences between the military geothermal
program and the nonmilitary geothermal program,
including required security procedures and operational
considerations; and
(B) the reasons the differences described in
subparagraph (A) are significant;
(2) with respect to the military geothermal program, a
description of--
(A) revenues or energy provided to the Department
of Defense and facilities of the Department Defense;
and
(B) royalty structures, as applicable;
(3) any revenue sharing with States and political
subdivisions of States and other benefits from--
(A) the implementation of the Geothermal Steam Act
of 1970 (30 U.S.C 1001 et seq.) and other applicable
Federal law by the Secretary of the Interior; and
(B) the administration of geothermal leasing under
section 2689 of title 10, United States Code, by the
Secretary of Defense;
(4) if appropriate--
(A) a description of the current methods and
procedures used to ensure interagency coordination, as
needed, in developing renewable energy sources on
Federal land withdrawn for military purposes; and
(B) an identification of any new procedures that
would improve interagency coordination to ensure
efficient processing and administration of leases or
contracts for geothermal energy on Federal land
withdrawn for military purposes, consistent with the
defense purposes of the withdrawals; and
(5) recommendations for any legislative or administrative
actions that would increase geothermal production, including--
(A) a common royalty structure;
(B) leasing procedures; and
(C) other changes that--
(i) increase production;
(ii) offset military operation costs; or
(iii) enhance the ability of Federal
agencies to develop geothermal resources.
(c) Effect.--Nothing in this section affects the legal status of
geothermal leasing and development conducted by the Department of the
Interior and the Department of Defense.
SEC. 272. TECHNICAL AMENDMENTS.
(a) The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is
amended by striking ``geothermal steam and associated geothermal
resources'' each place it appears and inserting ``geothermal
resources''.
(b) The first section of the Geothermal Steam Act of 1970 (30
U.S.C. 1001 note) is amended by striking ``That this'' and inserting
the following:
``SECTION 1. SHORT TITLE.
``This''.
(c) Section 2 of the Geothermal Steam Act of 1970 (30 U.S.C. 1001)
is amended--
(1) by striking ``Sec. 2. As'' and inserting the following:
``SEC. 2. DEFINITIONS.
``As''; and
(2) by striking subsection (e) and inserting the following:
``(e) `direct use' means use of geothermal resources for
commercial, residential, agricultural, public facilities, or
other energy needs other than the commercial production of
electricity; and''.
(d) Section 3 of the Geothermal Steam Act of 1970 (30 U.S.C. 1002)
is amended by striking ``Sec. 3. Subject'' and inserting the following:
``SEC. 3 . LANDS SUBJECT TO GEOTHERMAL LEASING.
``Subject''.
(e) Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004)
is amended by striking ``Sec. 5. Geothermal'' and inserting the
following:
``SEC. 5. RENTS AND ROYALTIES.
``Geothermal''.
(f) Section 6 of the Geothermal Steam Act of 1970 (30 U.S.C. 1005)
is amended by striking ``Sec. 6. (a) The'' and inserting the following:
``SEC. 6. DURATION OF LEASES.
``(a) The''.
(g) Section 7 of the Geothermal Steam Act of 1970 (30 U.S.C. 1006)
is amended by striking ``Sec. 7. A geothermal'' and inserting the
following:
``SEC. 7. ACREAGE OF GEOTHERMAL LEASE.
``A geothermal''.
(h) Section 8 of the Geothermal Steam Act of 1970 (30 U.S.C. 1007)
is amended by striking ``Sec. 8. (a) The'' and inserting the following:
``SEC. 8. READJUSTMENT OF LEASE TERMS AND CONDITIONS.
``(a) The''.
(i) Section 9 of the Geothermal Steam Act of 1970 (30 U.S.C. 1008)
is amended by striking ``Sec. 9. If'' and inserting the following:
``SEC. 9. BYPRODUCTS.
``If''.
(j) Section 10 of the Geothermal Steam Act of 1970 (30 U.S.C. 1009)
is amended by striking ``Sec. 10. The'' and inserting the following:
``SEC. 10. RELINQUISHMENT OF GEOTHERMAL RIGHTS.
``The''.
(k) Section 11 of the Geothermal Steam Act of 1970 (30 U.S.C. 1010)
is amended by striking ``Sec. 11. The'' and inserting the following:
``SEC. 11. SUSPENSION OF OPERATIONS AND PRODUCTION.
``The''.
(l) Section 12 of the Geothermal Steam Act of 1970 (30 U.S.C. 1011)
is amended by striking ``Sec. 12. Leases'' and inserting the following:
``SEC. 12. TERMINATION OF LEASES.
``Leases''.
(m) Section 13 of the Geothermal Steam Act of 1970 (30 U.S.C. 1012)
is amended by striking ``Sec. 13. The'' and inserting the following:
``SEC. 13. WAIVER, SUSPENSION, OR REDUCTION OF RENTAL OR ROYALTY.
``The''.
(n) Section 14 of the Geothermal Steam Act of 1970 (30 U.S.C. 1013)
is amended by striking ``Sec. 14. Subject'' and inserting the
following:
``SEC. 14. SURFACE LAND USE.
``Subject''.
(o) Section 15 of the Geothermal Steam Act of 1970 (30 U.S.C. 1014)
is amended by striking ``Sec. 15. (a) Geothermal'' and inserting the
following:
``SEC. 15. LANDS SUBJECT TO GEOTHERMAL LEASING.
``(a) Geothermal''.
(p) Section 16 of the Geothermal Steam Act of 1970 (30 U.S.C. 1015)
is amended by striking ``Sec. 16. Leases'' and inserting the following:
``SEC. 16. REQUIREMENT FOR LESSEES.
``Leases''.
(q) Section 17 of the Geothermal Steam Act of 1970 (30 U.S.C. 1016)
is amended by striking ``Sec. 17. Administration'' and inserting the
following:
``SEC. 17. ADMINISTRATION.
``Administration''.
(r) Section 19 of the Geothermal Steam Act of 1970 (30 U.S.C. 1018)
is amended by striking ``Sec. 19. Upon'' and inserting the following:
``SEC. 19. DATA FROM FEDERAL AGENCIES.
``Upon''.
(s) Section 20 of the Geothermal Steam Act of 1970 (30 U.S.C. 1019)
is amended by striking ``Sec. 20. Subject'' and inserting the
following:
``SEC. 20. DISPOSITION OF AMOUNTS RECEIVED FROM SALES, BONUSES,
ROYALTIES, AND RENTALS.
``Subject''.
(t) Section 21 of the Geothermal Steam Act of 1970 (30 U.S.C. 1020)
is amended by striking ``Sec. 21.'' and all that follows through ``(b)
Geothermal'' and inserting the following:
``SEC. 21. PUBLICATION IN FEDERAL REGISTER; RESERVATION OF MINERAL
RIGHTS.
``Geothermal''.
(u) Section 22 of the Geothermal Steam Act of 1970 (30 U.S.C. 1021)
is amended by striking ``Sec. 22. Nothing'' and inserting the
following:
``SEC. 22. FEDERAL EXEMPTION FROM STATE WATER LAWS.
``Nothing''.
(v) Section 23 of the Geothermal Steam Act of 1970 (30 U.S.C. 1022)
is amended by striking ``Sec. 23. (a) All'' and inserting the
following:
``SEC. 23. PREVENTION OF WASTE; EXCLUSIVITY.
``(a) All''.
(w) Section 24 of the Geothermal Steam Act of 1970 (30 U.S.C. 1023)
is amended by striking ``Sec. 24. The'' and inserting the following:
``SEC. 24. RULES AND REGULATIONS.
``The''.
(x) Section 25 of the Geothermal Steam Act of 1970 (30 U.S.C. 1024)
is amended by striking ``Sec. 25. As'' and inserting the following:
``SEC. 25. INCLUSION OF GEOTHERMAL LEASING UNDER CERTAIN OTHER LAWS.
``As''.
(y) Section 26 of the Geothermal Steam Act of 1970 is amended by
striking ``Sec. 26. The'' and inserting the following:
``SEC. 26. AMENDMENT.
``The''.
(z) Section 27 of the Geothermal Steam Act of 1970 (30 U.S.C. 1025)
is amended by striking ``Sec. 27. The'' and inserting the following:
``SEC. 27. FEDERAL RESERVATION OF CERTAIN MINERAL RIGHTS.
``The''.
(aa) Section 28 of the Geothermal Steam Act of 1970 (30 U.S.C.
1026) is amended by striking ``Sec. 28. (a)(1) The'' and inserting the
following:
``SEC. 28. SIGNIFICANT THERMAL FEATURES.
``(a)(1) The''.
(bb) Section 29 of the Geothermal Steam Act of 1970 (30 U.S.C.
1027) is amended by striking ``Sec. 29. The'' and inserting the
following:
``SEC. 29. LAND SUBJECT TO PROHIBITION ON LEASING.
``The''.
Subtitle G--Hydroelectric
SEC. 281. ALTERNATIVE CONDITIONS AND FISHWAYS.
(a) Federal Reservations.--Section 4(e) of the Federal Power Act
(16 U.S.C. 797(e)) is amended by inserting after ``adequate protection
and utilization of such reservation.'' at the end of the first proviso
the following: ``The license applicant and any party to the proceeding
shall be entitled to a determination on the record, after opportunity
for an agency trial-type hearing of no more than 90 days, on any
disputed issues of material fact with respect to such conditions. All
disputed issues of material fact raised by any party shall be
determined in a single trial-type hearing to be conducted within a time
frame established by the Commission for each license proceeding. Within
90 days of the date of enactment of this Act, the Secretaries of the
Interior, Commerce, and Agriculture shall establish jointly, by rule,
the procedures for such expedited trial-type hearing, including the
opportunity to undertake discovery and cross-examine witnesses, in
consultation with the Federal Energy Regulatory Commission.''.
(b) Fishways.--Section 18 of the Federal Power Act (16 U.S.C. 811)
is amended by inserting after ``and such fishways as may be prescribed
by the Secretary of Commerce.'' the following: ``The license applicant
and any party to the proceeding shall be entitled to a determination on
the record, after opportunity for an agency trial-type hearing of no
more than 90 days, on any disputed issues of material fact with respect
to such fishways. All disputed issues of material fact raised by any
party shall be determined in a single trial-type hearing to be
conducted within a time frame established by the Commission for each
license proceeding. Within 90 days of the date of enactment of this
Act, the Secretaries of the Interior, Commerce, and Agriculture shall
establish jointly, by rule, the procedures for such expedited trial-
type hearing, including the opportunity to undertake discovery and
cross-examine witnesses, in consultation with the Federal Energy
Regulatory Commission.''.
(c) Alternative Conditions and Prescriptions.--Part I of the
Federal Power Act (16 U.S.C. 791a et seq.) is amended by adding the
following new section at the end thereof:
``SEC. 33. ALTERNATIVE CONDITIONS AND PRESCRIPTIONS.
``(a) Alternative Conditions.--(1) Whenever any person applies for
a license for any project works within any reservation of the United
States, and the Secretary of the department under whose supervision
such reservation falls (referred to in this subsection as the
`Secretary') deems a condition to such license to be necessary under
the first proviso of section 4(e), the license applicant or any other
party to the license proceeding may propose an alternative condition.
``(2) Notwithstanding the first proviso of section 4(e), the
Secretary shall accept the proposed alternative condition referred to
in paragraph (1), and the Commission shall include in the license such
alternative condition, if the Secretary determines, based on
substantial evidence provided by the license applicant, any other party
to the proceeding, or otherwise available to the Secretary, that such
alternative condition--
``(A) provides for the adequate protection and utilization
of the reservation; and
``(B) the Secretary concurs with the license applicant's
judgment that the alternative condition will either--
``(i) cost significantly less to implement; or
``(ii) result in improved operation of the project
works for electricity production, as compared to the
condition initially deemed necessary by the Secretary.
``(3) The Secretary concerned shall submit into the public record
of the Commission proceeding with any condition under section 4(e) or
alternative condition it accepts under this section, a written
statement explaining the basis for such condition, and reason for not
accepting any alternative condition under this section. The written
statement must demonstrate that the Secretary gave equal consideration
to the effects of the condition adopted and alternatives not accepted
on energy supply, distribution, cost, and use; flood control;
navigation; water supply; and air quality (in addition to the
preservation of other aspects of environmental quality); based on such
information as may be available to the Secretary, including information
voluntarily provided in a timely manner by the applicant and others.
The Secretary shall also submit, together with the aforementioned
written statement, all studies, data, and other factual information
available to the Secretary and relevant to the Secretary's decision.
``(4) If the Secretary does not accept an applicant's alternative
condition under this section, and the Commission finds that the
Secretary's condition would be inconsistent with the purposes of this
part, or other applicable law, the Commission may refer the dispute to
the Commission's Dispute Resolution Service. The Dispute Resolution
Service shall consult with the Secretary and the Commission and issue a
non-binding advisory within 90 days. The Secretary may accept the
Dispute Resolution Service advisory unless the Secretary finds that the
recommendation will not adequately protect the reservation. The
Secretary shall submit the advisory and the Secretary's final written
determination into the record of the Commission's proceeding.
``(b) Alternative Prescriptions.--(1) Whenever the Secretary of the
Interior or the Secretary of Commerce prescribes a fishway under
section 18, the license applicant or any other party to the license
proceeding may propose an alternative to such prescription to
construct, maintain, or operate a fishway.
``(2) Notwithstanding section 18, the Secretary of the Interior or
the Secretary of Commerce, as appropriate, shall accept and prescribe,
and the Commission shall require, the proposed alternative referred to
in paragraph (1), if the Secretary of the appropriate department
determines, based on substantial evidence provided by the license
applicant, any other party to the proceeding, or otherwise available to
the Secretary, that such alternative--
``(A) will be no less protective than the fishway initially
prescribed by the Secretary; and
``(B) the Secretary concurs with the license applicant's
judgment that the alternative prescription will either--
``(i) cost significantly less to implement; or
``(ii) result in improved operation of the project
works for electricity production, as compared to the
fishway initially deemed necessary by the Secretary.
``(3) The Secretary concerned shall submit into the public record
of the Commission proceeding with any prescription under section 18 or
alternative prescription it accepts under this section, a written
statement explaining the basis for such prescription, and reason for
not accepting any alternative prescription under this section. The
written statement must demonstrate that the Secretary gave equal
consideration to the effects of the prescription adopted and
alternatives not accepted on energy supply, distribution, cost, and
use; flood control; navigation; water supply; and air quality (in
addition to the preservation of other aspects of environmental
quality); based on such information as may be available to the
Secretary, including information voluntarily provided in a timely
manner by the applicant and others. The Secretary shall also submit,
together with the aforementioned written statement, all studies, data,
and other factual information available to the Secretary and relevant
to the Secretary's decision.
``(4) If the Secretary concerned does not accept an applicant's
alternative prescription under this section, and the Commission finds
that the Secretary's prescription would be inconsistent with the
purposes of this part, or other applicable law, the Commission may
refer the dispute to the Commission's Dispute Resolution Service. The
Dispute Resolution Service shall consult with the Secretary and the
Commission and issue a non-binding advisory within 90 days. The
Secretary may accept the Dispute Resolution Service advisory unless the
Secretary finds that the recommendation will not adequately protect the
fish resources. The Secretary shall submit the advisory and the
Secretary's final written determination into the record of the
Commission's proceeding.''.
SEC. 282. ALASKA STATE JURISDICTION OVER SMALL HYDROELECTRIC PROJECTS.
Section 32 of the Federal Power Act (16 U.S.C. 823c) is amended--
(1) in subsection (a)(3)(C), by inserting ``except as
provided in subsection (j),'' before ``conditions''; and
(2) by adding at the end the following:
``(j) Fish and Wildlife.--If the State of Alaska determines that a
recommendation under subsection (a)(3)(C) is inconsistent with
paragraphs (1) and (2) of subsection (a), the State of Alaska may
decline to adopt all or part of the recommendations in accordance with
the procedures established under section 10(j)(2).''.
SEC. 283. FLINT CREEK HYDROELECTRIC PROJECT.
(a) Extension of Time.--Notwithstanding the time period specified
in section 5 of the Federal Power Act (16 U.S.C. 798) that would
otherwise apply to the Federal Energy Regulatory Commission (referred
to in this section as the ``Commission'') project numbered 12107, the
Commission shall--
(1) if the preliminary permit is in effect on the date of
enactment of this Act, extend the preliminary permit for a
period of 3 years beginning on the date on which the
preliminary permit expires; or
(2) if the preliminary permit expired before the date of
enactment of this Act, on request of the permittee, reinstate
the preliminary permit for an additional 3-year period
beginning on the date of enactment of this Act.
(b) Limitation on Certain Fees.--Notwithstanding section 10(e)(1)
of the Federal Power Act (16 U.S.C. 803(e)(1)) or any other provision
of Federal law providing for the payment to the United States of
charges for the use of Federal land for the purposes of operating and
maintaining a hydroelectric development licensed by the Commission, any
political subdivision of the State of Montana that holds a Commission
license for the Commission project numbered 12107 in Granite and Deer
Lodge Counties, Montana, shall be required to pay to the United States
for the use of that land for each year during which the political
subdivision continues to hold the license for the project, the lesser
of--
(1) $25,000; or
(2) such annual charge as the Commission or any other
department or agency of the Federal Government may assess.
Subtitle H--Renewable Portfolio Standard
SEC. 291. RENEWABLE PORTFOLIO STANDARD.
Title VI of the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2601 et seq.) is amended by adding at the end the following:
``SEC. 609. FEDERAL RENEWABLE PORTFOLIO STANDARD.
``(a) Renewable Energy Requirement.--
``(1) In general.--Each electric utility that sells
electricity to electric consumers shall obtain a percentage of
the base amount of electricity it sells to electric consumers
in any calendar year from new renewable energy or existing
renewable energy. The percentage obtained in a calendar year
shall not be less than the amount specified in the following
table:
``Calendar year: Minimum annual percentage:
2008 through 2011............................. 2.5
2012 through 2015............................. 5.0
2016 through 2019............................. 7.5
2020 through 2030............................. 10.0.
``(2) Means of compliance.--An electric utility shall meet
the requirements of paragraph (1) by--
``(A) generating electric energy using new
renewable energy or existing renewable energy;
``(B) purchasing electric energy generated by new
renewable energy or existing renewable energy;
``(C) purchasing renewable energy credits issued
under subsection (b); or
``(D) a combination of the foregoing.
``(b) Renewable Energy Credit Trading Program.--
``(1) Not later than January 1, 2007, the Secretary shall
establish a renewable energy credit trading program to permit
an electric utility that does not generate or purchase enough
electric energy from renewable energy to meet its obligations
under subsection (a)(1) to satisfy such requirements by
purchasing sufficient renewable energy credits.
``(2) As part of such program the Secretary shall--
``(A) issue renewable energy credits to generators
of electric energy from new renewable energy;
``(B) sell renewable energy credits to electric
utilities at the rate of 1.5 cents per kilowatt-hour
(as adjusted for inflation under subsection (g));
``(C) ensure that a kilowatt hour, including the
associated renewable energy credit, shall be used only
once for purposes of compliance with this section; and
``(D) allow double credits for generation from
facilities on Indian Lands, and triple credits for
generation from small renewable distributed generators
(meaning those those no larger than 1 megawatt).
``(3) Credits under paragraph (2)(A) may only be used for
compliance with this section for 3 years from the date issued.
``(c) Enforcement.--
``(1) Civil penalties.--Any electric utility that fails to
meet the renewable energy requirements of subsection (a) shall
be subject to a civil penalty.
``(2) Amount of penalty.--The amount of the civil penalty
shall be determined by multiplying the number of kilowatt-hours
of electric energy sold to electric consumers in violation of
subsection (a) by the greater of 1.5 cents (adjusted for
inflation under subsection (g)) or 200 percent of the average
market value of renewable energy credits during the year in
which the violation occurred.
``(3) Mitigation or waiver.--The Secretary may mitigate or
waive a civil penalty under this subsection if the electric
utility was unable to comply with subsection (a) for reasons
outside of the reasonable control of the utility. The Secretary
shall reduce the amount of any penalty determined under
paragraph (2) by an amount paid by the electric utility to a
State for failure to comply with the requirement of a State
renewable energy program if the State requirement is greater
than the applicable requirement of subsection (a).
``(4) Procedure for assessing penalty.--The Secretary shall
assess a civil penalty under this subsection in accordance with
the procedures prescribed by section 333(d) of the Energy
Policy and Conservation Act of 1954 (42 U.S.C. 6303).
``(d) State Renewable Energy Account Program.--
``(1) The Secretary shall establish, not later than
December 31, 2008, a State renewable energy account program.
``(2) All money collected by the Secretary from the sale of
renewable energy credits and the assessment of civil penalties
under this section shall be deposited into the renewable energy
account established pursuant to this subsection. The State
renewable energy account shall be held by the Secretary and
shall not be transferred to the Treasury Department.
``(3) Proceeds deposited in the State renewable energy
account shall be used by the Secretary, subject to
appropriations, for a program to provide grants to the State
agency responsible for developing State energy conservation
plans under section 362 of the Energy Policy and Conservation
Act (42 U.S.C. 6322) for the purposes of promoting renewable
energy production, including programs that promote technologies
that reduce the use of electricity at customer sites such as
solar water heating.
``(4) The Secretary may issue guidelines and criteria for
grants awarded under this subsection. State energy offices
receiving grants under this section shall maintain such records
and evidence of compliance as the Secretary may require.
``(5) In allocating funds under this program, the Secretary
shall give preference--
``(A) to States in regions which have a
disproportionately small share of economically
sustainable renewable energy generation capacity; and
``(B) to State programs to stimulate or enhance
innovative renewable energy technologies.
``(e) Rules.--The Secretary shall issue rules implementing this
section not later than 1 year after the date of enactment of this
section.
``(f) Exemptions.--This section shall not apply in any calendar
year to an electric utility--
``(1) that sold less than 4,000,000 megawatt-hours of
electric energy to electric consumers during the preceding
calendar year; or
``(2) in Hawaii.
``(g) Inflation Adjustment.--Not later than December 31 of each
year beginning in 2008, the Secretary shall adjust for inflation the
price of a renewable energy credit under subsection (b)(2)(B) and the
amount of the civil penalty per kilowatt-hour under subsection (c)(2).
``(h) State Programs.--Nothing in this section shall diminish any
authority of a State or political subdivision thereof to adopt or
enforce any law or regulation respecting renewable energy, but, except
as provided in subsection (c)(3), no such law or regulation shall
relieve any person of any requirement otherwise applicable under this
section. The Secretary, in consultation with States having such
renewable energy programs, shall, to the maximum extent practicable,
facilitate coordination between the Federal program and State programs.
``(i) Definitions.--For purposes of this section:
``(1) Base amount of electricity.--The term `base amount of
electricity' means the total amount of electricity sold by an
electric utility to electric consumers in a calendar year,
excluding--
``(A) electricity generated by a hydroelectric
facility (including a pumped storage facility but
excluding incremental hydropower); and
``(B) electricity generated through the
incineration of municipal solid waste.
``(2) Distributed generation facility.--The term
`distributed generation facility' means a facility at a
customer site.
``(3) Existing renewable energy.--The term `existing
renewable energy' means, except as provided in paragraph
(7)(B), electric energy generated at a facility (including a
distributed generation facility) placed in service prior to the
date of enactment of this section from solar, wind, or
geothermal energy; ocean energy; biomass (as defined in section
203(a) of the Energy Policy Act of 2005); or landfill gas.
``(4) Geothermal energy.--The term `geothermal energy'
means energy derived from a geothermal deposit (within the
meaning of section 613(e)(2) of the Internal Revenue Code of
1986).
``(5) Incremental geothermal production.--
``(A) In general.--The term `incremental geothermal
production' means for any year the excess of--
``(i) the total kilowatt hours of
electricity produced from a facility (including
a distributed generation facility) using
geothermal energy, over
``(ii) the average annual kilowatt hours
produced at such facility for 5 of the previous
7 calendar years before the date of enactment
of this section after eliminating the highest
and the lowest kilowatt hour production years
in such 7-year period.
``(B) Special rule.--A facility described in
subparagraph (A) which was placed in service at least 7
years before the date of enactment of this section
shall commencing with the year in which such date of
enactment occurs, reduce the amount calculated under
subparagraph (A)(ii) each year, on a cumulative basis,
by the average percentage decrease in the annual
kilowatt hour production for the 7-year period
described in subparagraph (A)(ii) with such cumulative
sum not to exceed 30 percent.
``(6) Incremental hydropower.--The term `incremental
hydropower' means additional energy generated as a result of
efficiency improvements or capacity additions made on or after
the date of enactment of this section or the effective date of
an existing applicable State renewable portfolio standard
program at a hydroelectric facility that was placed in service
before that date. The term does not include additional energy
generated as a result of operational changes not directly
associated with efficiency improvements or capacity additions.
Efficiency improvements and capacity additions shall be
measured on the basis of the same water flow information used
to determine a historic average annual generation baseline for
the hydroelectric facility and certified by the Secretary or
the Federal Energy Regulatory Commission.
``(7) New renewable energy.--The term `new renewable
energy' means--
``(A) electric energy generated at a facility
(including a distributed generation facility) placed in
service on or after January 1, 2003, from--
``(i) solar, wind, or geothermal energy or
ocean energy;
``(ii) biomass (as defined in section
203(a) of the Energy Policy Act of 2005);
``(iii) landfill gas; or
``(iv) incremental hydropower; and
``(B) for electric energy generated at a facility
(including a distributed generation facility) placed in
service prior to the date of enactment of this
section--
``(i) the additional energy above the
average generation in the 3 years preceding the
date of enactment of this section at the
facility from--
``(I) solar or wind energy or ocean
energy;
``(II) biomass (as defined in
section 203(a) of the Energy Policy Act
of 2005);
``(III) landfill gas; or
``(IV) incremental hydropower.
``(ii) the incremental geothermal
production.
``(8) Ocean energy.--The term `ocean energy' includes
current, wave, tidal, and thermal energy.
``(j) Sunset.--This section expires on December 31, 2030.''.
TITLE III--OIL AND GAS
Subtitle A--Petroleum Reserve and Home Heating Oil
SEC. 301. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC PETROLEUM
RESERVE AND OTHER ENERGY PROGRAMS.
(a) Amendment to Title I of the Energy Policy and Conservation
Act.--Title I of the Energy Policy and Conservation Act (42 U.S.C. 6212
et seq.) is amended--
(1) by striking section 166 (42 U.S.C. 6246) and inserting
the following:
``authorization of appropriations
``Sec. 166. There are authorized to be appropriated to the
Secretary such sums as are necessary to carry out this part and part D,
to remain available until expended.'';
(2) by striking section 186 (42 U.S.C. 6250e); and
(3) by striking part E (42 U.S.C. 6251).
(b) Amendment to Title II of the Energy Policy and Conservation
Act.--Title II of the Energy Policy and Conservation Act (42 U.S.C.
6271 et seq.) is amended--
(1) by inserting before section 273 (42 U.S.C. 6283) the
following:
``Part C--Summer Fill and Fuel Budgeting Programs'';
(2) by striking section 273(e) (42 U.S.C. 6283(e)); and
(3) by striking part D (42 U.S.C. 6285).
(c) Technical Amendments.--The table of contents for the Energy
Policy and Conservation Act is amended--
(1) by inserting after the items relating to part C of
title I the following:
``Part D--Northeast Home Heating Oil Reserve
``Sec. 181. Establishment.
``Sec. 182. Authority.
``Sec. 183. Conditions for release; plan.
``Sec. 184. Northeast Home Heating Oil Reserve Account.
``Sec. 185. Exemptions.'';
(2) by amending the items relating to part C of title II to
read as follows:
``Part C--Summer Fill and Fuel Budgeting Programs
``Sec. 273. Summer fill and fuel budgeting programs.'';
and
(3) by striking the items relating to part D of title II.
(d) Amendment to the Energy Policy and Conservation Act.--Section
183(b)(1) of the Energy Policy and Conservation Act (42 U.S.C.
6250b(b)(1)) is amended by striking ``by more'' and all that follows
through ``mid-October through March'' and inserting ``by more than 60
percent over its 5-year rolling average for the months of mid-October
through March (considered as a heating season average)''.
(e) Fill Strategic Petroleum Reserve to Capacity.--(1) In
general.--The Secretary shall, as expeditiously as practicable, without
incurring excessive cost or appreciably affecting the price of gasoline
or heating oil to consumers, acquire petroleum in quantities sufficient
to fill the Strategic Petroleum Reserve to the 1,000,000,000-barrel
capacity authorized under section 154(a) of the Energy Policy and
Conservation Act (42 U.S.C. 6234(a)), in accordance with the sections
159 and 160 of that Act (42 U.S.C. 6239, 6240).
(2) Procedures.--
(A) In general.--The Secretary shall develop, with
an opportunity for public comment, procedures to obtain
oil for the Reserve with the intent of maximizing the
overall domestic supply of crude oil (including
quantities stored in private sector inventories) and
minimizing the costs to the Department of the Interior
and the Department of Energy of acquiring such oil
(including foregone revenues to the Treasury when oil
for the Reserve is obtained through the royalty-in-kind
program), consistent with national security.
(B) Considerations.--The procedures shall provide
that, for purposes of determining whether to acquire
oil for the Reserve or defer deliveries of oil, the
Secretary shall take into account--
(i) current and future prices, supplies,
and inventories of oil;
(ii) national security; and
(iii) other factors that the Secretary
determines to be appropriate.
(C) Review of requests for deferrals of scheduled
deliveries.--The procedures shall include procedures
and criteria for the review of requests for the
deferrals of scheduled deliveries.
(D) Deadlines.--The Secretary shall--
(i) propose the procedures required under
this paragraph not later than 120 days after
the date of enactment of this Act;
(ii) promulgate the procedures not later
than 180 days after the date of enactment of
this Act; and
(iii) comply with the procedures in
acquiring oil for Reserve effective beginning
on the date that is 180 days after the date of
enactment of this Act.
SEC. 302. NATIONAL OILHEAT RESEARCH ALLIANCE.
Section 713 of the Energy Act of 2000 (Public Law 106-469; 42
U.S.C. 6201 note) is amended by striking ``4'' and inserting ``9''.
SEC. 303. SMALL BUSINESS AND AGRICULTURAL PRODUCER ENERGY EMERGENCY
DISASTER LOAN PROGRAM.
(a) Small Business Producer Energy Emergency Disaster Loan
Program.--
(1) Disaster loan authority.--Section 7(b) of the Small
Business Act (15 U.S.C. 636(b)) is amended by inserting after
paragraph (3) the following:
``(4)(A) In this paragraph--
``(i) the term `base price index' means the moving
average of the closing unit price on the New York
Mercantile Exchange for heating oil, natural gas,
gasoline, or propane for the 10 days, in each of the
most recent 2 preceding years, which correspond to the
trading days described in clause (ii);
``(ii) the term `current price index' means the
moving average of the closing unit price on the New
York Mercantile Exchange, for the 10 most recent
trading days, for contracts to purchase heating oil,
natural gas, gasoline, or propane during the subsequent
calendar month, commonly known as the `front month';
and
``(iii) the term `significant increase' means--
``(I) with respect to the price of heating
oil, natural gas, gasoline, or propane, any
time the current price index exceeds the base
price index by not less than 40 percent; and
``(II) with respect to the price of
kerosene, any increase which the Administrator,
in consultation with the Secretary of Energy,
determines to be significant.
``(B) The Administration may make such loans, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an immediate
or deferred basis, to assist a small business concern that has
suffered or that is likely to suffer substantial economic
injury on or after January 1, 2005, as the result of a
significant increase in the price of heating oil, natural gas,
gasoline, propane, or kerosene occurring on or after January 1,
2005.
``(C) Any loan or guarantee extended pursuant to this
paragraph shall be made at the same interest rate as economic
injury loans under paragraph (2).
``(D) No loan may be made under this paragraph, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an immediate
or deferred basis, if the total amount outstanding and
committed to the borrower under this subsection would exceed
$1,500,000, unless such borrower constitutes a major source of
employment in its surrounding area, as determined by the
Administration, in which case the Administration, in its
discretion, may waive the $1,500,000 limitation.
``(E) For purposes of assistance under this paragraph--
``(i) a declaration of a disaster area based on
conditions specified in this paragraph shall be
required, and shall be made by the President or the
Administrator; or
``(ii) if no declaration has been made pursuant to
clause (i), the Governor of a State in which a
significant increase in the price of heating oil,
natural gas, gasoline, propane, or kerosene has
occurred may certify to the Administration that small
business concerns have suffered economic injury as a
result of such increase and are in need of financial
assistance which is not otherwise available on
reasonable terms in that State, and upon receipt of
such certification, the Administration may make such
loans as would have been available under this paragraph
if a disaster declaration had been issued.
``(F) Notwithstanding any other provision of law, loans
made under this paragraph may be used by a small business
concern described in subparagraph (B) to convert from the use
of heating oil, natural gas, gasoline, propane, or kerosene to
a renewable or alternative energy source, including agriculture
and urban waste, geothermal energy, cogeneration, solar energy,
wind energy, or fuel cells.''.
(2) Conforming amendments.--Section 3(k) of the Small
Business Act (15 U.S.C. 632(k)) is amended--
(A) by inserting ``, significant increase in the
price of heating oil, natural gas, gasoline, propane,
or kerosene'' after ``civil disorders''; and
(B) by inserting ``other'' before ``economic''.
(b) Agricultural Producer Emergency Loans.--
(1) In general.--Section 321(a) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1961(a)) is amended--
(A) in the first sentence--
(i) by striking ``operations have'' and
inserting ``operations (i) have''; and
(ii) by inserting before ``: Provided,''
the following: ``, or (ii)(I) are owned or
operated by such an applicant that is also a
small business concern (as defined in section 3
of the Small Business Act (15 U.S.C. 632)), and
(II) have suffered or are likely to suffer
substantial economic injury on or after January
1, 2005, as the result of a significant
increase in energy costs or input costs from
energy sources occurring on or after January 1,
2005, in connection with an energy emergency
declared by the President or the Secretary'';
(B) in the third sentence, by inserting before the
period at the end the following: ``or by an energy
emergency declared by the President or the Secretary'';
and
(C) in the fourth sentence--
(i) by inserting ``or energy emergency''
after ``natural disaster'' each place that term
appears; and
(ii) by inserting ``or declaration'' after
``emergency designation''.
(2) Funding.--Funds available on the date of enactment of
this Act for emergency loans under subtitle C of the
Consolidated Farm and Rural Development Act (7 U.S.C. 1961 et
seq.) shall be available to carry out the amendments made by
subparagraph (A) to meet the needs resulting from natural
disasters.
(c) Guidelines and Rulemaking.--
(1) Guidelines.--Not later than 30 days after the date of
enactment of this Act, the Administrator of the Small Business
Administration and the Secretary of Agriculture shall each
issue guidelines to carry out this section and the amendments
made by this section, which guidelines shall become effective
on the date of their issuance.
(2) Rulemaking.--Not later than 30 days after the date of
enactment of this Act, the Administrator of the Small Business
Administration, after consultation with the Secretary of
Energy, shall promulgate regulations specifying the method for
determining a significant increase in the price of kerosene
under section 7(b)(4)(A)(iii)(II) of the Small Business Act (15
U.S.C. 636(b)(4)(A)(iii)(II)), as added by this section.
(d) Reports.--
(1) Small business administration.--Not later than 12
months after the date on which the Administrator of the Small
Business Administration issues guidelines under subsection
(c)(1), and annually thereafter, the Administrator shall submit
to the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives, a report on the effectiveness of the
assistance made available under section 7(b)(4) of the Small
Business Act, as added by this section, including--
(A) the number of small business concerns that
applied for a loan under such section 7(b)(4) and the
number of those that received such loans;
(B) the dollar value of those loans;
(C) the States in which the small business concerns
that received such loans are located;
(D) the type of energy that caused the significant
increase in the cost for the participating small
business concerns; and
(E) recommendations for ways to improve the
assistance provided under such section 7(b)(4), if any.
(2) Department of agriculture.--Not later than 12 months
after the date on which the Secretary of Agriculture issues
guidelines under subsection (c)(1), and annually thereafter,
the Secretary shall submit to the Committee on Small Business
and Entrepreneurship and the Committee on Agriculture,
Nutrition, and Forestry of the Senate and to the Committee on
Small Business and the Committee on Agriculture of the House of
Representatives, a report that--
(A) describes the effectiveness of the assistance
made available under section 321(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1961(a)), as
amended by this section; and
(B) contains recommendations for ways to improve
the assistance provided under such section 321(a).
(e) Effective Date.--
(1) Small business.--The amendments made by subsection (a)
shall apply during the 4-year period beginning on the earlier
of the date on which guidelines are published by the
Administrator of the Small Business Administration under
subsection (c)(1) or 30 days after the date of enactment of
this Act, with respect to assistance under section 7(b)(4) of
the Small Business Act, as added by this section.
(2) Agriculture.--The amendments made by subsection (b)
shall apply during the 4-year period beginning on the earlier
of the date on which guidelines are published by the Secretary
of Agriculture under subsection (c)(1) or 30 days after the
date of enactment of this Act, with respect to assistance under
section 321(a) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1961(a)), as amended by this section.
Subtitle B--Production Incentives
SEC. 311. DEFINITION OF SECRETARY.
In this subtitle, the term ``Secretary'' means the Secretary of the
Interior.
SEC. 312. PROGRAM ON OIL AND GAS ROYALTIES IN-KIND.
(a) Applicability of Section.--Notwithstanding any other provision
of law, this section applies to all royalty in-kind accepted by the
Secretary on or after the date of enactment of this Act under any
Federal oil or gas lease or permit under--
(1) section 36 of the Mineral Leasing Act (30 U.S.C. 192);
(2) section 27 of the Outer Continental Shelf Lands Act (43
U.S.C. 1353); or
(3) any other Federal law governing leasing of Federal land
for oil and gas development.
(b) Terms and Conditions.--All royalty accruing to the United
States shall, on the demand of the Secretary, be paid in oil or gas. If
the Secretary makes such a demand, the following provisions apply to
the payment:
(1) Satisfaction of royalty obligation.--Delivery by, or on
behalf of, the lessee of the royalty amount and quality due
under the lease satisfies royalty obligation of the lessee 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) Marketable condition.--
(A) Definition of marketable condition.--In this
paragraph, the term ``in marketable condition'' means
sufficiently free from impurities and otherwise in a
condition that the royalty production will be accepted
by a purchaser under a sales contract typical of the
field or area in which the royalty production was
produced.
(B) Requirement.--Royalty production shall be
placed in marketable condition by the lessee at no cost
to the United States.
(3) Disposition by the secretary.--The Secretary may--
(A) sell or otherwise dispose of any royalty
production taken in-kind (other than oil or gas
transferred under section 27(a)(3) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353(a)(3)) for
not less than the market price; and
(B) transport or process (or both) any royalty
production taken in-kind.
(4) Retention by the secretary.--The Secretary 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 taken in-kind that otherwise would be deposited to
miscellaneous receipts, without regard to fiscal year
limitation, or may use oil or gas received as royalty taken in-
kind (referred to in this paragraph as ``royalty production'')
to pay the cost of--
(A) transporting the royalty production;
(B) processing the royalty production;
(C) disposing of the royalty production; or
(D) any combination of transporting, processing,
and disposing of the royalty production.
(5) Limitation.--
(A) In general.--Except as provided in subparagraph
(B), the Secretary may not use revenues from the sale
of oil and gas taken in-kind to pay for personnel,
travel, or other administrative costs of the Federal
Government.
(B) Exception.--Notwithstanding subparagraph (A),
the Secretary may use a portion of the revenues from
royalty in-kind sales, without fiscal year limitation,
to pay salaries and other administrative costs directly
related to the royalty in-kind program.
(c) Reimbursement of Cost.--If a lessee, pursuant to an agreement
with the United States or as provided in the lease, processes the
royalty gas or delivers the royalty oil or gas at a point not on or
adjacent to the lease area, the Secretary shall--
(1) reimburse the lessee for the reasonable costs of
transportation (not including gathering) from the lease to the
point of delivery or for processing costs; or
(2) allow the lessee to deduct the transportation or
processing costs in reporting and paying royalties in-value for
other Federal oil and gas leases.
(d) Benefit to the United States Required.--The Secretary may
receive oil or gas royalties in-kind only if the Secretary determines
that receiving royalties in-kind provides benefits to the United States
that are greater than or equal to the benefits that are likely to have
been received had royalties been taken in-value.
(e) Reports.--
(1) In general.--Not later than September 30, 2006, the
Secretary shall submit to Congress a report that addresses--
(A) actions taken to develop businesses processes
and automated systems to fully support the royalty-in-
kind capability to be used in tandem with the royalty-
in-value approach in managing Federal oil and gas
revenue; and
(B) future royalty-in-kind businesses operation
plans and objectives.
(2) Reports on oil or gas royalties taken in-kind.--For
each of fiscal years 2006 through 2015 in which the United
States takes oil or gas royalties in-kind from production in
any State or from the outer Continental Shelf, excluding
royalties taken in-kind and sold to refineries under subsection
(h), the Secretary shall submit to Congress a report that
describes--
(A) the 1 or more methodologies used by the
Secretary to determine compliance with subsection (d),
including the performance standard for comparing
amounts received by the United States derived from
royalties in-kind to amounts likely to have been
received had royalties been taken in-value;
(B) 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;
(C) actual amounts received by the United States
derived from taking royalties in-kind and costs and
savings incurred by the United States associated with
taking royalties in-kind, including administrative
savings and any new or increased administrative costs;
and
(D) an evaluation of other relevant public benefits
or detriments associated with taking royalties in-kind.
(f) Deduction of Expenses.--
(1) In general.--Before making payments under section 35 of
the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)) of
revenues derived from the sale of royalty production taken in-
kind from a lease, the Secretary shall deduct amounts paid or
deducted under subsections (b)(4) and (c) and deposit the
amount of the deductions in the miscellaneous receipts of the
Treasury.
(2) Accounting for deductions.--If the Secretary allows the
lessee to deduct transportation or processing costs under
subsection (c), the Secretary may not reduce any payments to
recipients of revenues derived from any other Federal oil and
gas lease as a consequence of that deduction.
(g) Consultation with States.--The Secretary--
(1) shall consult with a State before conducting a royalty
in-kind program under this subtitle within the State;
(2) may delegate management of any portion of the Federal
royalty in-kind program to the State except as otherwise
prohibited by Federal law; and
(3) shall consult annually with any State from which
Federal oil or gas royalty is being taken in-kind to ensure, to
the maximum extent practicable, that the royalty in-kind
program provides revenues to the State greater than or equal to
the revenues likely to have been received had royalties been
taken in-value.
(h) Small Refineries.--
(1) Preference.--If the Secretary finds that sufficient
supplies of crude oil are not available in the open market to
refineries that do not have their own source of supply for
crude oil, the Secretary may grant preference to those
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 those
refineries at private sale at not less than the market price.
(2) Proration among refineries in production area.--In
disposing of oil under this subsection, the Secretary may, at
the discretion of the Secretary, prorate the oil among
refineries described in paragraph (1) in the area in which the
oil is produced.
(i) Disposition to Federal Agencies.--
(1) Onshore royalty.--Any royalty oil or gas taken by the
Secretary in-kind from onshore oil and gas leases may be sold
at not less than the market price to any Federal agency.
(2) Offshore royalty.--Any royalty oil or gas taken in-kind
from a Federal oil or gas lease on the outer Continental Shelf
may be disposed of only under section 27 of the Outer
Continental Shelf Lands Act (43 U.S.C. 1353).
(j) Federal Low-Income Energy Assistance Programs.--
(1) Preference.--In disposing of royalty oil or gas taken
in-kind under this section, the Secretary may grant a
preference to any person, including any Federal or State
agency, for the purpose of providing additional resources to
any Federal low-income energy assistance program.
(2) Report.--Not later than 3 years after the date of
enactment of this Act, the Secretary shall submit a report to
Congress--
(A) assessing the effectiveness of granting
preferences specified in paragraph (1); and
(B) providing a specific recommendation on the
continuation of authority to grant preferences.
SEC. 313. MARGINAL PROPERTY PRODUCTION INCENTIVES.
(a) Definition of Marginal Property.--Until such time as the
Secretary issues regulations under subsection (e) that prescribe a
different definition, in this section, the term ``marginal property''
means an onshore unit, communitization agreement, or lease not within a
unit or communitization agreement, that produces on average the
combined equivalent of less than 15 barrels of oil per well per day or
90,000,000 British thermal units of gas per well per day calculated
based on the average over the 3 most recent production months,
including only wells that produce on more than half of the days during
those 3 production months.
(b) Conditions for Reduction of Royalty Rate.--Until such time as
the Secretary issues regulations under subsection (e) that prescribe
different standards or requirements, the Secretary shall reduce the
royalty rate on--
(1) oil production from marginal properties as prescribed
in subsection (c) if the spot price of West Texas Intermediate
crude oil at Cushing, Oklahoma, is, on average, less than $15
per barrel (adjusted in accordance with the Consumer Price
Index for all-urban consumers, United States city average, as
published by the Bureau of Labor Statistics) for 90 consecutive
trading days; and
(2) gas production from marginal properties as prescribed
in subsection (c) if the spot price of natural gas delivered at
Henry Hub, Louisiana, is, on average, less than $2.00 per
million British thermal units (adjusted in accordance with the
Consumer Price Index for all-urban consumers, United States
city average, as published by the Bureau of Labor Statistics)
for 90 consecutive trading days.
(c) Reduced Royalty Rate.--
(1) In general.--When a marginal property meets the
conditions specified in subsection (b), the royalty rate shall
be the lesser of--
(A) 5 percent; or
(B) the applicable rate under any other statutory
or regulatory royalty relief provision that applies to
the affected production.
(2) Period of effectiveness.--The reduced royalty rate
under this subsection shall be effective beginning on the first
day of the production month following the date on which the
applicable condition specified in subsection (b) is met.
(d) Termination of Reduced Royalty Rate.--A royalty rate prescribed
in subsection (c)(1)(A) shall terminate--
(1) with respect to oil production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of West Texas Intermediate crude
oil at Cushing, Oklahoma, on average, exceeds $15 per
barrel (adjusted in accordance with the Consumer Price
Index for all-urban consumers, United States city
average, as published by the Bureau of Labor
Statistics) for 90 consecutive trading days; or
(B) the property no longer qualifies as a marginal
property; and
(2) with respect to gas production from a marginal
property, on the first day of the production month following
the date on which--
(A) the spot price of natural gas delivered at
Henry Hub, Louisiana, on average, exceeds $2.00 per
million British thermal units (adjusted in accordance
with the Consumer Price Index for all-urban consumers,
United States city average, as published by the Bureau
of Labor Statistics) for 90 consecutive trading days;
or
(B) the property no longer qualifies as a marginal
property.
(e) Regulations Prescribing Different Relief.--
(1) Discretionary regulations.--The Secretary may by
regulation prescribe different parameters, standards, and
requirements for, and a different degree or extent of, royalty
relief for marginal properties in lieu of those prescribed in
subsections (a) through (d).
(2) Royalty relief for offshore wells.--With respect to
royalty relief for oil or gas produced from wells located on
the outer Continental Shelf, the Secretary shall use authority
available to the Secretary as of the day before the date of
enactment of this Act--
(A) to accept and consider petitions from persons
seeking, and providing justification for, royalty
relief for 1 or more of those wells; and
(B) not later than 90 days after the date of
receipt of a petition, on a case-by-case basis--
(i) approve the petition and provide
royalty relief or a royalty reduction for oil
or gas produced from the wells covered by the
petition; or
(ii) disapprove the petition.
(3) Considerations.--In issuing regulations under this
subsection, the Secretary may consider--
(A) oil and gas prices and market trends;
(B) production costs;
(C) abandonment costs;
(D) Federal and State tax provisions and the
effects of those provisions on production economics;
(E) other royalty relief programs;
(F) regional differences in average wellhead
prices;
(G) national energy security issues; and
(H) other relevant matters, as determined by the
Secretary.
(f) Savings Provision.--Nothing in this section prevents a lessee
from receiving royalty relief or a royalty reduction pursuant to any
other law (including a regulation) that provides more relief than the
amounts provided by this section.
SEC. 314. INCENTIVES FOR NATURAL GAS PRODUCTION FROM DEEP WELLS IN THE
SHALLOW WATERS OF THE GULF OF MEXICO.
(a) Definitions.--In this section:
(1) Lease issued in shallow waters.--The term ``lease
issued in shallow waters'' means--
(A) a lease entirely in water less than 200 meters
deep; or
(B) a lease--
(i) partially in water less than 200 meters
deep; and
(ii) to which no royalty relief provisions
in law or lease terms apply.
(2) Sidetrack.--
(A) In general.--The term ``sidetrack'' means a
well resulting from drilling an additional hole to a
new objective bottom-hole location by leaving a
previously drilled hole.
(B) Inclusion.--The term ``sidetrack'' includes--
(i) drilling a well from a platform slot
reclaimed from a previously drilled well;
(ii) re-entering and deepening a previously
drilled well; and
(iii) a bypass from a sidetrack, including
drilling around material blocking a hole or
drilling to straighten a crooked hole.
(3) Ultra deep well.--The term ``ultra deep well'' means a
well drilled with a perforated interval, the top of which is at
least 20,000 feet true vertical depth below the datum at mean
sea level.
(b) Regulations.--
(1) In general.--Not later than 180 days after the
effective date of this section, in addition to any other
regulations that may provide royalty incentives for natural gas
produced from deep wells on oil and gas leases issued pursuant
to, or regulated under, the Outer Continental Shelf Lands Act
(43 U.S.C. 1331 et seq.), the Secretary shall issue regulations
granting royalty relief suspension volumes of not less than
35,000,000,000 cubic feet with respect to the production of
natural gas from ultra deep wells on leases issued in shallow
waters located in the Gulf of Mexico wholly west of 87 deg.,
30'' West longitude that are issued before the date that is 180
days after the date of enactment of this Act.
(2) Suspension volumes.--The Secretary may grant suspension
volumes of less than 35,000,000,000 cubic feet in any case in
which--
(A) the ultra deep well is a sidetrack; or
(B) the lease has previously produced from wells
with a perforated interval the top of which is at least
15,000 feet true vertical depth below the datum at mean
sea level.
(c) Limitation.--The Secretary shall not grant royalty incentives
under this section if the average annual natural gas price on the New
York Mercantile Exchange exceeds a threshold price specified, and
adjusted for inflation, by the Secretary.
(d) Applicability.--
(1) In general.--Royalty incentives under this subsection
apply only to natural gas production from ultra deep wells that
are drilled after the date of enactment of this Act.
(2) Review and suspension.--Not earlier than 10 years after
the date of enactment of this Act, the Secretary may--
(A) review the relief granted under this section;
and
(B) by regulation, modify or suspend the relief.
(e) Effective Date.--This section takes effect on October 1, 2006.
SEC. 315. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.
(a) In General.--Subject to subsections (b) and (c), for each tract
located in water depths of greater than 400 meters in the Western and
Central Planning Area of the Gulf of Mexico (including 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), any
oil or gas lease sale under the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.) occurring during the 5-year period beginning on
the date of enactment of this Act shall use the bidding system
authorized under section 8(a)(1)(H) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(a)(1)(H)).
(b) Suspension of Royalties.--The suspension of royalties under
subsection (a) shall be established at a volume of not less than--
(1) 5,000,000 barrels of oil equivalent for each lease in
water depths of 400 meters or more but less than 800 meters;
(2) 9,000,000 barrels of oil equivalent for each lease in
water depths of 800 meters or more but not greater than 1,600
meters; and
(3) 12,000,000 barrels of oil equivalent for each lease in
water depths greater than 1,600 meters.
(c) Limitation.--The Secretary may place limitations on royalty
relief granted under this section based on market price.
SEC. 316. ALASKA OFFSHORE ROYALTY SUSPENSION.
Section 8(a)(3)(B) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(a)(3)(B)) is amended by inserting ``and in the Planning
Areas offshore Alaska,'' after ``West longitude,''.
SEC. 317. OIL AND GAS LEASING IN THE NATIONAL PETROLEUM RESERVE IN
ALASKA.
(a) Transfer of Authority.--
(1) Redesignation.--The Naval Petroleum Reserves Production
Act of 1976 (42 U.S.C. 6501 et seq.) is amended by
redesignating section 107 (42 U.S.C. 6507) as section 108.
(2) Transfer.--The matter under the heading ``exploration
of national petroleum reserve in alaska'' under the heading
``Energy and Minerals'' of title I of Public Law 96-514 (42
U.S.C. 6508) is--
(A) transferred to the Naval Petroleum Reserves
Production Act of 1976 (42 U.S.C. 6501 et seq.);
(B) redesignated as section 107 of that Act; and
(C) moved so as to appear after section 106 of that
Act (42 U.S.C. 6506).
(b) Competitive Leasing.--Section 107 of the Naval Petroleum
Reserves Production Act of 1976 (as amended by subsection (a)(2)) is
amended--
(1) by striking the heading and all that follows through
``Provided, That (1) activities'' and inserting the following:
``SEC. 107. COMPETITIVE LEASING OF OIL AND GAS.
``(a) In General.--The Secretary shall conduct an expeditious
program of competitive leasing of oil and gas in the Reserve in
accordance with this Act.
``(b) Mitigation of Adverse Effects.--
``(1) In general.--Activities'';
(2) in subsection (b)(1) (as designated by paragraph (1)),
by striking ``to mitigate'' and inserting ``to prevent to the
extent practicable, and to mitigate,'';
(3) by striking ``Alaska (the Reserve); (2) the'' and
inserting ``Alaska.
``(2) Certain resources and facilities.--In carrying out
the leasing program under this section, the Secretary shall
minimize, to the extent practicable, the impact to surface
resources and consolidate facilities.
``(c) Land Use Planning; BLM Wilderness Study.--The'';
(4) by striking ``Reserve; (3) the'' and inserting
``Reserve.
``(d) First Lease Sale.--The;'';
(5) by striking ``4332); (4) the'' and inserting ``4321 et
seq.).
``(e) Withdrawals.--The'';
(6) by striking ``herein; (5) bidding'' and inserting
``under this section.
``(f) Bidding Systems.--Bidding'';
(7) by striking ``629); (6) lease'' and inserting ``629).
``(g) Geological Structures.--Lease'';
(8) by striking ``structures; (7) the'' and inserting
``structures.
``(h) Size of Lease Tracts.--The'';
(9) by striking ``Secretary; (8)'' and all that follows
through ``Drilling, production,'' and inserting ``Secretary.
``(i) Terms.--
``(1) In general.--Each lease shall be issued for an
initial period of not more than 10 years, and shall be extended
for so long thereafter as oil or gas is produced from the lease
in paying quantities or drilling or reworking operations, as
approved by the Secretary, are conducted on the leased land.
``(2) Termination.--No lease issued under this section
covering lands capable of producing oil or gas in paying
quantities shall expire because the lessee fails to produce the
same unless the lessee is allowed a reasonable time, which
shall be not less than 60 days after notice by registered or
certified mail, within which to place the lands in producing
status or unless, after such status is established, production
is discontinued on the leased premises without permission
granted by the Secretary under the provisions of this Act.
``(3) Renewal of leases without discoveries.--At the end of
the primary term of a lease, the Secretary shall renew for one
additional 10-year term a lease that does not meet the
requirements of paragraph (1) if the lessee submits to the
Secretary an application for renewal not later than 60 days
before the expiration of the primary lease, pays the Secretary
a renewal fee of $100 per acre of leased land, and--
``(A) the lessee provides evidence, and the
Secretary agrees that, the lessee has diligently
pursued exploration that warrants continuation with the
intent of continued exploration or future potential
development of the leased land; or
``(B) all or part of the lease
``(i) is part of a unit agreement covering
a lease described in subparagraph (A); and
``(ii) has not been previously contracted
out of the unit.
``(4) Applicability.--This subsection applies to a lease
that is in effect on or after the date of enactment of the
Energy Policy Act of 2005.
``(j) Unit Agreements.--
``(1) In general.--For the purpose of conservation of the
natural resources of all or part of any oil or gas pool, field,
reservoir, or like area, lessees (including representatives) of
the pool, field, reservoir, or like area may unite with each
other, or jointly or separately with others, in collectively
adopting and operating under a unit agreement for all or part
of the pool, field, reservoir, or like area (whether or not any
other part of the oil or gas pool, field, reservoir, or like
area is already subject to any cooperative or unit plan of
development or operation), if the Secretary determines the
action to be necessary or advisable in the public interest. In
determining the public interest, the Secretary shall, among
other things, examine the extent to which the unit agreement
will minimize the impact to surface resources of the leases and
will facilitate consolidation of facilities.
``(2) Consultation.--In making a determination under
paragraph (1), the Secretary shall consult with the State of
Alaska or a Regional Corporation (as defined in section 3 of
the Alaska Native Claims Settlement Act (43 U.S.C. 1602)) with
respect to the creation or expansion of units that include
acreage in which the State of Alaska or the Regional
Corporation has an interest in the mineral estate.
``(3) Production allocation methodology.--(A) The Secretary
may use a production allocation methodology for each
participating area within a unit that includes solely Federal
land in the Reserve.
``(B) The Secretary shall use a production allocation
methodology for each participating area within a unit that
includes Federal land in the Reserve and non-Federal land based
on the characteristics of each specific oil or gas pool, field,
reservoir, or like area to take into account reservoir
heterogeneity and area variation in reservoir producibility
across diverse leasehold interests. The implementation of the
foregoing production allocation methodology shall be controlled
by agreement among the affected lessors and lessees.
``(4) Benefit of Operations.--Drilling, production,'';
(10) by striking ``When separate'' and inserting the
following:
``(5) Pooling.--If separate'';
(11) by inserting ``(in consultation with the owners of the
other land)'' after ``determined by the Secretary of the
Interior'';
(12) by striking ``thereto; (10) to'' and all that follows
through ``the terms provided therein'' and inserting ``to the
agreement.
``(k) Exploration Incentives.--
``(1) In general.--
``(A) Waiver, suspension, or reduction.--To
encourage the greatest ultimate recovery of oil or gas
or in the interest of conservation, the Secretary may
waive, suspend, or reduce the rental fees or minimum
royalty, or reduce the royalty on an entire leasehold
(including on any lease operated pursuant to a unit
agreement), whenever (after consultation with the State
of Alaska and the North Slope Borough of Alaska and the
concurrence of any Regional Corporation for leases that
include land that was made available for acquisition by
the Regional Corporation under the provisions of
section 1431(o) of the Alaska National Interest Lands
Conservation Act (16 U.S.C. 3101 et seq.)) in the
judgment of the Secretary it is necessary to do so to
promote development, or whenever in the judgment of the
Secretary the leases cannot be successfully operated
under the terms provided therein.
``(B) Applicability.--This paragraph applies to a
lease that is in effect on or after the date of
enactment of the Energy Policy Act of 2005.'';
(13) by striking ``The Secretary is authorized to'' and
inserting the following:
``(2) Suspension of operations and production.--The
Secretary may'';
(14) by striking ``In the event'' and inserting the
following:
``(3) Suspension of payments.--If'';
(15) by striking ``thereto; and (11) all'' and inserting
``to the lease.
``(l) Receipts.--All'';
(16) by redesignating subparagraphs (A), (B), and (C) as
paragraphs (1), (2), and (3), respectively;
(17) by striking ``Any agency'' and inserting the
following:
``(m) Explorations.--Any agency'';
(18) by striking ``Any action'' and inserting the
following:
``(n) Environmental Impact Statements.--
``(1) Judicial review.--Any action'';
(19) by striking ``The detailed'' and inserting the
following:
``(2) Initial lease sales.--The detailed'';
(20) by striking ``section 104(b) of the Naval Petroleum
Reserves Production Act of 1976 (90 Stat. 304; 42 U.S.C.
6504)'' and inserting ``section 104(a)''; and
(21) by adding at the end the following:
``(o) Regulations.--As soon as practicable after the date of
enactment of the Energy Policy Act of 2005, the Secretary shall issue
regulations to implement this section.
``(p) Waiver of Administration for Conveyed Lands.--
``(1) In general.--Notwithstanding section 14(g) of the
Alaska Native Claims Settlement Act (43 U.S.C. 1613(g)), the
Secretary of the Interior shall waive administration of any oil
and gas lease to the extent that the lease covers any land in
the Reserve in which all of the subsurface estate is conveyed
to the Arctic Slope Regional Corporation (referred to in this
subsection as the `Corporation').
``(2) Partial conveyance.--
``(A) In general.--In a case in which a conveyance
of a subsurface estate described in paragraph (1) does
not include all of the land covered by the oil and gas
lease, the person that owns the subsurface estate in
any particular portion of the land covered by the lease
shall be entitled to all of the revenues reserved under
the lease as to that portion, including, without
limitation, all the royalty payable with respect to oil
or gas produced from or allocated to that portion.
``(B) Segregation of lease.--In a case described in
subparagraph (A), the Secretary of the Interior shall--
``(i) segregate the lease into 2 leases, 1
of which shall cover only the subsurface estate
conveyed to the Corporation; and
``(ii) waive administration of the lease
that covers the subsurface estate conveyed to
the Corporation.
``(C) No change in lease obligations.--The
segregation of the lease described in subparagraph
(B)(i) has no effect on the obligations of the lessee
under either of the resulting leases, including
obligations relating to operations, production, or
other circumstances (other than payment of rentals or
royalties).
``(3) Authority to manage federally owned surface estate.--
Nothing in this subsection limits the authority of the
Secretary of the Interior to manage the federally-owned surface
estate within the Reserve.''.
(c) Conforming Amendments.--Section 104 of the Naval Petroleum
Reserves Production Act of 1976 (42 U.S.C. 6504) is amended--
(1) by striking subsection (a); and
(2) by redesignating subsections (b) through (d) as
subsections (a) through (c), respectively.
SEC. 318. NORTH SLOPE SCIENCE INITIATIVE.
(a) Establishment.--
(1) In general.--The Secretary of the Interior shall
establish a long-term initiative to be known as the ``North
Slope Science Initiative'' (referred to in this section as the
``Initiative'').
(2) Purpose.--The purpose of the Initiative shall be to
implement efforts to coordinate collection of scientific data
that will provide a better understanding of the terrestrial,
aquatic, and marine ecosystems of the North Slope of Alaska.
(b) Objectives.--To ensure that the Initiative is conducted through
a comprehensive science strategy and implementation plan, the
Initiative shall, at a minimum--
(1) identify and prioritize information needs for
inventory, monitoring, and research activities to address the
individual and cumulative effects of past, ongoing, and
anticipated development activities and environmental change on
the North Slope;
(2) develop an understanding of information needs for
regulatory and land management agencies, local governments, and
the public;
(3) focus on prioritization of pressing natural resource
management and ecosystem information needs, coordination, and
cooperation among agencies and organizations;
(4) coordinate ongoing and future inventory, monitoring,
and research activities to minimize duplication of effort,
share financial resources and expertise, and assure the
collection of quality information;
(5) identify priority needs not addressed by agency science
programs in effect on the date of enactment of this Act and
develop a funding strategy to meet those needs;
(6) provide a consistent approach to high caliber science,
including inventory, monitoring, and research;
(7) maintain and improve public and agency access to--
(A) accumulated and ongoing research; and
(B) contemporary and traditional local knowledge;
and
(8) ensure through appropriate peer review that the science
conducted by participating agencies and organizations is of the
highest technical quality.
(c) Membership.--
(1) In general.--To ensure comprehensive collection of
scientific data, in carrying out the Initiative, the Secretary
shall consult and coordinate with Federal, State, and local
agencies that have responsibilities for land and resource
management across the North Slope.
(2) Cooperative agreements.--The Secretary shall enter into
cooperative agreements with the State of Alaska, the North
Slope Borough, the Arctic Slope Regional Corporation, and other
Federal agencies as appropriate to coordinate efforts, share
resources, and fund projects under this section.
(d) Science Technical Advisory Panel.--
(1) In general.--The Initiative shall include a panel to
provide advice on proposed inventory, monitoring, and research
functions.
(2) Membership.--The panel described in paragraph (1) shall
consist of a representative group of not more than 15
scientists and technical experts from diverse professions and
interests, including the oil and gas industry, subsistence
users, Native Alaskan entities, conservation organizations,
wildlife management organizations, and academia, as determined
by the Secretary.
(e) Reports.--Not later than 3 years after the date of enactment of
this section and each year thereafter, the Secretary shall publish a
report that describes the studies and findings of the Initiative.
(f) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 319. ORPHANED, ABANDONED, OR IDLED WELLS ON FEDERAL LAND.
(a) In General.--The Secretary, in cooperation with the Secretary
of Agriculture, shall establish a program not later than 1 year after
the date of enactment of this Act to remediate, reclaim, and close
orphaned, abandoned, or idled oil and gas wells located on land
administered by the land management agencies within the Department of
the Interior and the Department of Agriculture.
(b) Activities.--The program under subsection (a) shall--
(1) include a means of ranking orphaned, abandoned, or
idled wells sites for priority in remediation, reclamation, and
closure, based on public health and safety, potential
environmental harm, and other land use priorities;
(2) provide for identification and recovery of the costs of
remediation, reclamation, and closure from persons or other
entities currently providing a bond or other financial
assurance required under State or Federal law for an oil or gas
well that is orphaned, abandoned, or idled; and
(3) provide for recovery from the persons or entities
identified under paragraph (2), or their sureties or
guarantors, of the costs of remediation, reclamation, and
closure of such wells.
(c) Cooperation and Consultations.--In carrying out the program
under subsection (a), the Secretary shall--
(1) work cooperatively with the Secretary of Agriculture
and the States within which Federal land is located; and
(2) consult with the Secretary of Energy and the Interstate
Oil and Gas Compact Commission.
(d) Plan.--Not later than 1 year after the date of enactment of
this Act, the Secretary, in cooperation with the Secretary of
Agriculture, shall submit to Congress a plan for carrying out the
program under subsection (a).
(e) Idled Well.--For the purposes of this section, a well is idled
if--
(1) the well has been nonoperational for at least 7 years;
and
(2) there is no anticipated beneficial use for the well.
(f) Technical Assistance Program for Non-Federal Land.--
(1) In general.--The Secretary of Energy shall establish a
program to provide technical and financial assistance to oil
and gas producing States to facilitate State efforts over a 10-
year period to ensure a practical and economical remedy for
environmental problems caused by orphaned or abandoned oil and
gas exploration or production well sites on State or private
land.
(2) Assistance.--The Secretary of Energy shall work with
the States, through the Interstate Oil and Gas Compact
Commission, to assist the States in quantifying and mitigating
environmental risks of onshore orphaned or abandoned oil or gas
wells on State and private land.
(3) Activities.--The program under paragraph (1) shall
include--
(A) mechanisms to facilitate identification, if
feasible, of the persons currently providing a bond or
other form of financial assurance required under State
or Federal law for an oil or gas well that is orphaned
or abandoned;
(B) criteria for ranking orphaned or abandoned well
sites based on factors such as public health and
safety, potential environmental harm, and other land
use priorities;
(C) information and training programs on best
practices for remediation of different types of sites;
and
(D) funding of State mitigation efforts on a cost-
shared basis.
(g) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $25,000,000 for each of fiscal years
2006 through 2010.
(2) Use.--Of the amounts authorized under paragraph (1),
$5,000,000 are authorized for each fiscal year for activities
under subsection (f).
SEC. 320. COMBINED HYDROCARBON LEASING.
(a) Special Provisions Regarding Leasing.--Section 17(b)(2) of the
Mineral Leasing Act (30 U.S.C. 226(b)(2)) is amended--
(1) by inserting ``(A)'' after ``(2)'';
(2) in the first sentence of subparagraph (A) (as
designated by paragraph (1)), by striking ``they shall be'' and
inserting ``the lands may be''; and
(3) by adding at the end the following:
``(B) For any area that contains any combination of tar sand and
oil or gas (or both), the Secretary may issue under this Act,
separately--
``(i) a lease for exploration for and extraction of tar
sand; and
``(ii) a lease for exploration for and development of oil
and gas.
``(C) A lease described in subparagraph (B) shall have provisions
addressing the appropriate accommodation of resources.
``(D) A lease issued for tar sand development shall be issued using
the same bidding process, annual rental, and posting period as a lease
issued for oil and gas, except that the minimum acceptable bid required
for a lease issued for tar sand shall be $2 per acre.''.
(b) Conforming Amendment.--Section 17(b)(1)(B) of the Mineral
Leasing Act (30 U.S.C. 226(b)(1)(B)) is amended in the second sentence
by inserting ``subject to paragraph (2)(B),'' after ``Thereafter,''.
(c) Regulations.--Not later than 45 days after the date of
enactment of this Act, the Secretary of the Interior shall issue final
regulations to implement the amendments made by this section.
SEC. 321. ALTERNATE ENERGY-RELATED USES ON THE OUTER CONTINENTAL SHELF.
(a) Amendment to Outer Continental Shelf Lands Act.--Section 8 of
the Outer Continental Shelf Lands Act (43 U.S.C. 1337) is amended by
adding at the end the following:
``(p) Leases, Easements, or Rights-Of-Way for Energy and Related
Purposes.--
``(1) In General.--The Secretary, in consultation with the
Secretary of the Department in which the Coast Guard is
operating and other relevant departments and agencies of the
Federal Government, may grant a lease, easement, or right-of-
way on the outer Continental Shelf for activities not otherwise
authorized in this Act, the Deepwater Port Act of 1974 (33
U.S.C. 1501 et seq.), the Ocean Thermal Energy Conversion Act
of 1980 (42 U.S.C. 9101 et seq.), or other applicable law, if
those activities--
``(A) support exploration, development, or
production of oil or natural gas, except that a lease,
easement, or right-of-way shall not be granted in an
area in which oil and gas preleasing, leasing, and
related activities are prohibited by a moratorium;
``(B) support transportation of oil or natural gas,
excluding shipping activities;
``(C) produce or support production,
transportation, or transmission of energy from sources
other than oil and gas; or
``(D) use, for energy-related purposes or for other
authorized marine-related purposes, facilities
currently or previously used for activities authorized
under this Act, except that any oil and gas energy-
related uses shall not be authorized in areas in which
oil and gas preleasing, leasing, and related activities
are prohibited by a moratorium.
``(2) Payments.--The Secretary shall establish royalties,
fees, rentals, bonus, or other payments to ensure a fair return
to the United States for any lease, easement, or right-of-way
granted under this subsection.
``(3) Competitive or noncompetitive basis.--Except with
respect to projects that meet the criteria established under
section 321(d) of the Energy Policy Act of 2005, the Secretary
shall issue a lease, easement, or right-of-way under paragraph
(1) on a competitive basis unless the Secretary determines
after public notice of a proposed lease, easement, or right-of-
way that there is no competitive interest.
``(4) Requirements.--The Secretary shall ensure that any
activity under this subsection is carried out in a manner that
provides for--
``(A) safety;
``(B) protection of the environment;
``(C) prevention of waste;
``(D) conservation of the natural resources of the
outer Continental Shelf;
``(E) coordination with relevant Federal agencies;
``(F) protection of national security interests of
the United States;
``(G) protection of correlative rights in the outer
Continental Shelf;
``(H) a fair return to the United States for any
lease, easement, or right-of-way under this subsection;
``(I) prevention of interference with reasonable
uses (as determined by the Secretary) of the exclusive
economic zone, the high seas, and the territorial seas;
``(J) consideration of--
``(i) the location of, and any schedule
relating to, a lease, easement, or right-of-way
for an area of the outer Continental Shelf; and
``(ii) any other use of the sea or seabed,
including use for a fishery, a sealane, a
potential site of a deepwater port, or
navigation;
``(K) public notice and comment on any proposal
submitted for a lease, easement, or right-of-way under
this subsection; and
``(L) oversight, inspection, research, monitoring,
and enforcement relating to a lease, easement, or
right-of-way under this subsection.
``(5) Lease duration, suspension, and cancellation.--The
Secretary shall provide for the duration, issuance, transfer,
renewal, suspension, and cancellation of a lease, easement, or
right-of-way under this subsection.
``(6) Security.--The Secretary shall require the holder of
a lease, easement, or right-of-way granted under this
subsection to--
``(A) furnish a surety bond or other form of
security, as prescribed by the Secretary;
``(B) comply with such other requirements as the
Secretary considers necessary to protect the interests
of the public and the United States; and
``(C) provide for the restoration of the lease,
easement, or right-of-way.
``(7) Coordination and consultation with affected state and
local governments.--The Secretary shall provide for
coordination and consultation with the Governor of any State or
the executive of any local government that may be affected by a
lease, easement, or right-of-way under this subsection.
``(8) Regulations.--Not later than 270 days after the date
of enactment of the Energy Policy Act of 2005, the Secretary,
in consultation with the Secretary of Defense, the Secretary of
the Department in which the Coast Guard is operating, the
Secretary of Commerce, heads of other relevant departments and
agencies of the Federal Government, and the Governor of any
affected State, shall issue any necessary regulations to carry
out this subsection.
``(9) Effect of subsection.--Nothing in this subsection
displaces, supersedes, limits, or modifies the jurisdiction,
responsibility, or authority of any Federal or State agency
under any other Federal law.
``(10) Applicability.--This subsection does not apply to
any area on the outer Continental Shelf within the exterior
boundaries of any unit of the National Park System, National
Wildlife Refuge System, or National Marine Sanctuary System, or
any National Monument.''.
(b) Coordinated OCS Mapping Initiative.--
(1) In general.--The Secretary, in cooperation with the
Secretary of Commerce, the Commandant of the Coast Guard, and
the Secretary of Defense, shall establish an interagency
comprehensive digital mapping initiative for the outer
Continental Shelf to assist in decisionmaking relating to the
siting of activities under subsection (p) of section 8 of the
Outer Continental Shelf Lands Act (43 U.S.C. 1337) (as added by
subsection (a)).
(2) Use of data.--The mapping initiative shall use, and
develop procedures for accessing, data collected before the
date on which the mapping initiative is established, to the
maximum extent practicable.
(3) Inclusions.--Mapping carried out under the mapping
initiative shall include an indication of the locations on the
outer Continental Shelf of--
(A) Federally-permitted activities;
(B) obstructions to navigation;
(C) submerged cultural resources;
(D) undersea cables;
(E) offshore aquaculture projects; and
(F) any area designated for the purpose of safety,
national security, environmental protection, or
conservation and management of living marine resources.
(c) Conforming Amendment.--Section 8 of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337) is amended by striking the section heading
and inserting the following: ``Leases, Easements, and Rights-of-Way on
the Outer Continental Shelf.--''.
(d) Savings Provision.--Nothing in the amendment made by subsection
(a) requires the resubmittal of any document that was previously
submitted or the reauthorization of any action that was previously
authorized with respect to a project for which, before the date of
enactment of this Act--
(1) an offshore test facility has been constructed; or
(2) a request for a proposal has been issued by a public
authority.
SEC. 322. PRESERVATION OF GEOLOGICAL AND GEOPHYSICAL DATA.
(a) Short Title.--This section may be cited as the ``National
Geological and Geophysical Data Preservation Program Act of 2005''.
(b) Program.--The Secretary shall carry out a National Geological
and Geophysical Data Preservation Program in accordance with this
section--
(1) to archive geologic, geophysical, and engineering data,
maps, well logs, and samples;
(2) to provide a national catalog of such archival
material; and
(3) to provide technical and financial assistance related
to the archival material.
(c) Plan.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a plan for the
implementation of the Program.
(d) Data Archive System.--
(1) Establishment.--The Secretary shall establish, as a
component of the Program, a data archive system to provide for
the storage, preservation, and archiving of subsurface,
surface, geological, geophysical, and engineering data and
samples. The Secretary, in consultation with the Advisory
Committee, shall develop guidelines relating to the data
archive system, including the types of data and samples to be
preserved.
(2) System components.--The system shall be comprised of
State agencies that elect to be part of the system and agencies
within the Department of the Interior that maintain geological
and geophysical data and samples that are designated by the
Secretary in accordance with this subsection. The Program shall
provide for the storage of data and samples through data
repositories operated by such agencies.
(3) Limitation of designation.--The Secretary may not
designate a State agency as a component of the data archive
system unless that agency is the agency that acts as the
geological survey in the State.
(4) Data from federal land.--The data archive system shall
provide for the archiving of relevant subsurface data and
samples obtained from Federal land--
(A) in the most appropriate repository designated
under paragraph (2), with preference being given to
archiving data in the State in which the data were
collected; and
(B) consistent with all applicable law and
requirements relating to confidentiality and
proprietary data.
(e) National Catalog.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall develop and
maintain, as a component of the Program, a national catalog
that identifies--
(A) data and samples available in the data archive
system established under subsection (d);
(B) the repository for particular material in the
system; and
(C) the means of accessing the material.
(2) Availability.--The Secretary shall make the national
catalog accessible to the public on the site of the Survey on
the Internet, consistent with all applicable requirements
related to confidentiality and proprietary data.
(f) Advisory Committee.--
(1) In general.--The Advisory Committee shall advise the
Secretary on planning and implementation of the Program.
(2) New duties.--In addition to its duties under the
National Geologic Mapping Act of 1992 (43 U.S.C. 31a et seq.),
the Advisory Committee shall perform the following duties:
(A) Advise the Secretary on developing guidelines
and procedures for providing assistance for facilities
under subsection (g)(1).
(B) Review and critique the draft implementation
plan prepared by the Secretary under subsection (c).
(C) Identify useful studies of data archived under
the Program that will advance understanding of the
Nation's energy and mineral resources, geologic
hazards, and engineering geology.
(D) Review the progress of the Program in archiving
significant data and preventing the loss of such data,
and the scientific progress of the studies funded under
the Program.
(E) Include in the annual report to the Secretary
required under section 5(b)(3) of the National Geologic
Mapping Act of 1992 (43 U.S.C. 31d(b)(3)) an evaluation
of the progress of the Program toward fulfilling the
purposes of the Program under subsection (b).
(g) Financial Assistance.--
(1) Archive facilities.--Subject to the availability of
appropriations, the Secretary shall provide financial
assistance to a State agency that is designated under
subsection (d)(2) for providing facilities to archive energy
material.
(2) Studies.--Subject to the availability of
appropriations, the Secretary shall provide financial
assistance to any State agency designated under subsection
(d)(2) for studies and technical assistance activities that
enhance understanding, interpretation, and use of materials
archived in the data archive system established under
subsection (d).
(3) Federal share.--The Federal share of the cost of an
activity carried out with assistance under this subsection
shall be not more than 50 percent of the total cost of the
activity.
(4) Private contributions.--The Secretary shall apply to
the non-Federal share of the cost of an activity carried out
with assistance under this subsection the value of private
contributions of property and services used for that activity.
(h) Report.--The Secretary shall include in each report under
section 8 of the National Geologic Mapping Act of 1992 (43 U.S.C.
31g)--
(1) a description of the status of the Program;
(2) an evaluation of the progress achieved in developing
the Program during the period covered by the report; and
(3) any recommendations for legislative or other action the
Secretary considers necessary and appropriate to fulfill the
purposes of the Program under subsection (b).
(i) Maintenance of State Effort.--It is the intent of Congress that
the States not use this section as an opportunity to reduce State
resources applied to the activities that are the subject of the
Program.
(j) Definitions.--In this section:
(1) Advisory committee.--The term ``Advisory Committee''
means the advisory committee established under section 5 of the
National Geologic Mapping Act of 1992 (43 U.S.C. 31d).
(2) Program.--The term ``Program'' means the National
Geological and Geophysical Data Preservation Program carried
out under this section.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Director of the United
States Geological Survey.
(4) Survey.--The term ``Survey'' means the United States
Geological Survey.
(k) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $30,000,000 for each of fiscal
years 2006 through 2010.
SEC. 323. OIL AND GAS LEASE ACREAGE LIMITATIONS.
Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 184(d)(1))
is amended by inserting after ``acreage held in special tar sand
areas'' the following: ``, and acreage under any lease any portion of
which has been committed to a federally approved unit or cooperative
plan or communitization agreement or for which royalty (including
compensatory royalty or royalty in-kind) was paid in the preceding
calendar year,''.
SEC. 324. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON OIL.
(a) Assessment.--The Secretary shall assess the economic
implications of the dependence of the State of Hawaii on oil as the
principal source of energy for the State, including--
(1) the short- and long-term prospects for crude oil supply
disruption and price volatility and potential impacts on the
economy of Hawaii;
(2) the economic relationship between oil-fired generation
of electricity from residual fuel and refined petroleum
products consumed for ground, marine, and air transportation;
(3) the technical and economic feasibility of increasing
the contribution of renewable energy resources for generation
of electricity, on an island-by-island basis, including--
(A) siting and facility configuration;
(B) environmental, operational, and safety
considerations;
(C) the availability of technology;
(D) the effects on the utility system, including
reliability;
(E) infrastructure and transport requirements;
(F) community support; and
(G) other factors affecting the economic impact of
such an increase and any effect on the economic
relationship described in paragraph (2);
(4) the technical and economic feasibility of using
liquefied natural gas to displace residual fuel oil for
electric generation, including neighbor island opportunities,
and the effect of the displacement on the economic relationship
described in paragraph (2), including--
(A) the availability of supply;
(B) siting and facility configuration for onshore
and offshore liquefied natural gas receiving terminals;
(C) the factors described in subparagraphs (B)
through (F) of paragraph (3); and
(D) other economic factors;
(5) the technical and economic feasibility of using
renewable energy sources (including hydrogen) for ground,
marine, and air transportation energy applications to displace
the use of refined petroleum products, on an island-by-island
basis, and the economic impact of the displacement on the
relationship described in (2); and
(6) an island-by-island approach to--
(A) the development of hydrogen from renewable
resources; and
(B) the application of hydrogen to the energy needs
of Hawaii
(b) Contracting Authority.--The Secretary may carry out the
assessment under subsection (a) directly or, in whole or in part,
through 1 or more contracts with qualified public or private entities.
(c) Report.--Not later than 300 days after the date of enactment of
this Act, the Secretary shall prepare (in consultation with agencies of
the State of Hawaii and other stakeholders, as appropriate), and submit
to Congress, a report describing the findings, conclusions, and
recommendations resulting from the assessment.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 325. DENALI COMMISSION.
(a) Definition of Commission.--In this section, the term
``Commission'' means the Denali Commission established by the Denali
Commission Act of 1998 (42 U.S.C. 3121 note; Public Law 105-277).
(b) Energy Programs.--The Commission shall use amounts made
available under subsection (d) to carry out energy programs,
including--
(1) energy generation and development, including--
(A) fuel cells, hydroelectric, solar, wind, wave,
and tidal energy; and
(B) alternative energy sources;
(2) the construction of energy transmission, including
interties;
(3) the replacement and cleanup of fuel tanks;
(4) the construction of fuel transportation networks and
related facilities;
(5) power cost equalization programs; and
(6) projects using coal as a fuel, including coal
gasification projects.
(c) Open Meetings.--
(1) In general.--Except as provided in paragraph (2), a
meeting of the Commission shall be open to the public if--
(A) the Commission members take action on behalf of
the Commission; or
(B) the deliberations of the Commission determine,
or result in the joint conduct or disposition of,
official Commission business.
(2) Exceptions.--Paragraph (1) shall not apply to any
portion of a Commission meeting for which the Commission, in
public session, votes to close the meeting for the reasons
described in paragraph (2), (4), (5), or (6) of subsection (c)
of section 552b of title 5, United States Code.
(3) Public notice.--
(A) In general.--At least 1 week before a meeting
of the Commission, the Commission shall make a public
announcement of the meeting that describes--
(i) the time, place, and subject matter of
the meeting;
(ii) whether the meeting is to be open or
closed to the public; and
(iii) the name and telephone number of an
appropriate person to respond to requests for
information about the meeting.
(B) Additional notice.--The Commission shall make a
public announcement of any change to the information
made available under subparagraph (A) at the earliest
practicable time.
(4) Minutes.--The Commission shall keep, and make available
to the public, a transcript, electronic recording, or minutes
from each Commission meeting, except for portions of the
meeting closed under paragraph (2).
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Commission not more than $55,000,000 for each of
fiscal years 2006 through 2015 to carry out subsection (b).
SEC. 326. COMPREHENSIVE INVENTORY OF OCS OIL AND NATURAL GAS RESOURCES.
(a) In General.--The Secretary of the Interior shall conduct an
inventory and analysis of oil and natural gas resources beneath all of
the waters of the United States Outer Continental Shelf (``OCS''). The
inventory and analysis shall--
(1) use available data on oil and gas resources in areas
offshore of Mexico and Canada that will provide information on
trends of oil and gas accumulation in areas of the OCS;
(2) use any available technology, except drilling, but
including 3-D seismic technology to obtain accurate resource
estimates;
(3) analyze how resource estimates in OCS areas have
changed over time in regards to gathering geological and
geophysical data, initial exploration, or full field
development, including areas such as the deepwater and subsalt
areas in the Gulf of Mexico;
(4) estimate the effect that understated oil and gas
resource inventories have on domestic energy investments; and
(5) identify and explain how legislative, regulatory, and
administrative programs or processes restrict or impede the
development of identified resources and the extent that they
affect domestic supply, such as moratoria, lease terms and
conditions, operational stipulations and requirements, approval
delays by the Federal government and coastal States, and local
zoning restrictions for onshore processing facilities and
pipeline landings.
(b) Reports.--The Secretary of Interior shall submit a report to
Congress on the inventory of estimates and the analysis of restrictions
or impediments, together with any recommendations, within 6 months of
the date of enactment of the section. The report shall be publicly
available and updated at least every 5 years.
SEC. 327. REVIEW AND DEMONSTRATION PROGRAM FOR OIL AND NATURAL GAS
PRODUCTION.
(a) Review.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary of the Interior, in
consultation with the Secretary of Energy (referred to in this
section as the ``Secretary''), shall carry out a review of, and
submit to Congress a report on opportunities to enhance
production of oil and natural gas from public land and the
outer Continental Shelf, and increase sequestration of carbon
dioxide through the provision of royalty or other production
incentives to lessees that inject carbon dioxide as a means of
enhanced recovery.
(2) Components.--The Secretary of the Interior shall
describe in the review and report under paragraph (1)--
(A) eligibility requirements for incentives;
(B) the appropriate level of royalty relief, if
any;
(C) other appropriate production incentives, if
any;
(D) an estimate of the increased quantity of oil
and gas production that could be achieved through
implementation of those incentives;
(E) an estimate of the quantity of carbon
sequestration that could be achieved through
implementation of those incentives;
(F) practices (and the extent of the use of the
practices) as of the date of enactment of this Act that
rely on carbon dioxide injection for enhanced oil and
gas recovery; and
(G) any recommendations for implementation of
royalty relief or other production incentives,
including--
(i) the period of time during which those
incentives should be available; and
(ii) any geographic or other limitations
that should apply to the incentives.
(b) Demonstration Program.--
(1) Establishment.--
(A) In general.--The Secretary shall establish a
competitive grant program to provide grants to
producers of oil and gas to carry out projects to
inject carbon dioxide for the purpose of enhancing
recovery of oil or natural gas while increasing the
sequestration of carbon dioxide.
(B) Projects.--The demonstration program shall
provide for--
(i) not more than 10 projects in the
Willistin Basin in North Dakota and Montana;
and
(ii) 1 project in the Cook Inlet Basin in
Alaska.
(2) Requirements.--
(A) In general.--The Secretary shall issue
requirements relating to applications for grants under
paragraph (1).
(B) Rulemaking.--The issuance of requirements under
subparagraph (A) shall not require a rulemaking.
(C) Minimum requirements.--At a minimum, the
Secretary shall require under subparagraph (A) that an
application for a grant include--
(i) a description of the project proposed
in the application;
(ii) an estimate of the production increase
and the duration of the production increase
from the project, as compared to conventional
recovery techniques, including water flooding;
(iii) an estimate of the carbon dioxide
sequestered by project, over the life of the
project;
(iv) a plan to collect and disseminate data
relating to each project to be funded by the
grant;
(v) a description of the means by which the
project will be sustainable without Federal
assistance after the completion of the term of
the grant;
(vi) a complete description of the costs of
the project, including acquisition,
construction, operation, and maintenance costs
over the expected life of the project;
(vii) a description of which costs of the
project will be supported by Federal assistance
under this section; and
(viii) a description of any secondary or
tertiary recovery efforts in the field and the
efficacy of water flood recovery techniques
used.
(3) Partners.--An applicant for a grant under paragraph (1)
may carry out a project under a pilot program in partnership
with 1 or more other public or private entities.
(4) Selection criteria.--In evaluating applications under
this subsection, the Secretary shall--
(A) consider the previous experience with similar
projects of each applicant;
(B) give priority consideration to applications
that--
(i) are most likely to maximize production
of oil and gas in a cost-effective manner;
(ii) sequester significant quantities of
carbon dioxide from anthropogenic sources;
(iii) demonstrate the greatest commitment
on the part of the applicant to ensure funding
for the proposed project and the greatest
likelihood that the project will be maintained
or expanded after Federal assistance under this
section is completed; and
(iv) minimize any adverse environmental
effects from the project.
(5) Demonstration program requirements.--
(A) Maximum amount.--The Secretary shall not
provide more than $3,000,000 in Federal assistance
under this subsection to any applicant.
(B) Cost sharing.--The Secretary shall require
cost-sharing in accordance with section 1002.
(C) Period of grants.--
(i) In general.--A project funded by a
grant under this subsection shall begin
construction not later than 2 years after the
date of provision of the grant, but in any case
not later than December 31, 2010.
(ii) Term.--The Secretary shall not provide
grant funds to any applicant under this
subsection for a period of more than 5 years.
(6) Transfer of information and knowledge.--The Secretary
shall establish mechanisms to ensure that the information and
knowledge gained by participants in the program under this
subsection are transferred among other participants and
interested parties, including other applicants that submitted
applications for a grant under this subsection.
(7) Schedule.--
(A) Publication.--Not later than 180 days after the
date of enactment of this Act, the Secretary shall
publish in the Federal Register, and elsewhere, as
appropriate, a request for applications to carry out
projects under this subsection.
(B) Date for applications.--An application for a
grant under this subsection shall be submitted not
later than 180 days after the date of publication of
the request under subparagraph (A).
(C) Selection.--After the date by which
applications for grants are required to be submitted
under subparagraph (B), the Secretary, in a timely
manner, shall select, after peer review and based on
the criteria under paragraph (4), those projects to be
awarded a grant under this subsection.
(c) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 328. NO OIL PRODUCING AND EXPORTING CARTELS.
(a) Short Title.--This section may be cited as the ``No Oil
Producing and Exporting Cartels Act of 2005'' or ``NOPEC''.
(b) Sherman Act.--The Sherman Act (15 U.S.C. 1 et seq.) is amended
by adding after section 7 the following:
``SEC. 7A. OIL PRODUCING CARTELS.
``(a) In General.--It shall be illegal and a violation of this Act
for any foreign state, or any instrumentality or agent of any foreign
state, to act collectively or in combination with any other foreign
state, any instrumentality or agent of any other foreign state, or any
other person, whether by cartel or any other association or form of
cooperation or joint action--
``(1) to limit the production or distribution of oil,
natural gas, or any other petroleum product;
``(2) to set or maintain the price of oil, natural gas, or
any petroleum product; or
``(3) to otherwise take any action in restraint of trade
for oil, natural gas, or any petroleum product;
when such action, combination, or collective action has a direct,
substantial, and reasonably foreseeable effect on the market, supply,
price, or distribution of oil, natural gas, or other petroleum product
in the United States.
``(b) Sovereign Immunity.--A foreign state engaged in conduct in
violation of subsection (a) shall not be immune under the doctrine of
sovereign immunity from the jurisdiction or judgments of the courts of
the United States in any action brought to enforce this section.
``(c) Inapplicability of Act of State Doctrine.--No court of the
United States shall decline, based on the act of state doctrine, to
make a determination on the merits in an action brought under this
section.
``(d) Enforcement.--The Attorney General of the United States and
the Federal Trade Commission may bring an action to enforce this
section in any district court of the United States as provided under
the antitrust laws.''.
(c) Sovereign Immunity.--Section 1605(a) of title 28, United States
Code, is amended--
(1) in paragraph (6), by striking ``or'' after the
semicolon;
(2) in paragraph (7), by striking the period and inserting
``; or''; and
(3) by adding at the end the following:
``(8) in which the action is brought under section 7A of
the Sherman Act.''.
Subtitle C--Access to Federal Land
SEC. 341. FEDERAL ONSHORE OIL AND GAS LEASING PRACTICES.
(a) Review of Onshore Oil and Gas Leasing Practices.--The Secretary
of the Interior shall make the necessary arrangements with the National
Academy of Public Administration to commission the Academy to perform a
review of Federal onshore oil and gas leasing practices. The Secretary
of the Interior shall conduct an internal review concurrent with the
work of the National Academy of Public Administration. The reviews
shall include the following:
(1) The process by which Federal land managers accept or
reject an offer to lease, including the timeframes in which
such offers are acted upon, and any recommendations for
improving and expediting the process.
(2) The process for considering applications for permits to
drill, including the timeframes in which such applications are
considered, and any recommendations for improving and
expediting the process.
(3) The process for considering surface use plans of
operation, including the timeframes in which such plans are
considered, and any recommendations for improving and
expediting the process.
(4) The process for administrative appeal of decisions or
orders of officers or employees of the Bureau of Land
Management with respect to a Federal oil or gas lease,
including the timeframes in which such appeals are heard and
decided, and any recommendations for improving and expediting
the process.
(5) The process by which Federal land managers identify
stipulations to address site-specific concerns and conditions,
including those relating to the environment and resource use
conflicts, whether stipulations are effective in addressing
resource values, and any recommendations for expediting and
improving the identification and effectiveness of stipulations.
(6) The process by which the Federal land management
agencies coordinate planning and analysis with planning of
Federal, State, and local agencies having jurisdiction over
adjacent areas and other land uses, and any recommendations for
improving and expediting the process.
(7) The documentation provided to lease applicants and
lessees with respect to determinations to reject lease
applications or to require modification of proposed surface use
plans of operation and recommendations regarding improvement of
such documentation to more clearly set forth the basis for the
decision.
(8) The adequacy of resources available to the Secretary of
the Interior for administering the Federal onshore oil and gas
leasing program.
(9) Actions taken by the Secretary under section 3 of
Executive Order No. 13212 (42 U.S.C. 13201 note).
(10) Actions taken by, or plans of, the Secretary to
improve the Federal onshore oil and gas leasing program.
(b) Report.--The Secretary of the Interior and the National Academy
of Public Administration shall report to the Committee on Resources of
the House of Representatives and to the Committee on Energy and Natural
Resources of the Senate not later than 18 months after the date of the
enactment of this Act, summarizing the findings of their respective
reviews undertaken pursuant to this section and making recommendations
with respect to improvements in the Federal onshore oil and gas leasing
program.
SEC. 342. MANAGEMENT OF FEDERAL OIL AND GAS LEASING PROGRAMS.
(a) Timely Action on Leases and Permits.--
(1) Secretary of the Interior.--To ensure timely action on
oil and gas leases and applications for permits to drill on
land otherwise available for leasing, the Secretary of the
Interior (referred to in this section as the ``Secretary'')
shall--
(A) ensure expeditious compliance with section
102(2)(C) of the National Environmental Policy Act of
1969 (42 U.S.C. 4332(2)(C)) and any other applicable
environmental and cultural resources laws;
(B) improve consultation and coordination with the
States and the public; and
(C) improve the collection, storage, and retrieval
of information relating to the oil and gas leasing
activities.
(2) Secretary of Agriculture.--To ensure timely action on
oil and gas lease applications for permits to drill on land
otherwise available for leasing, the Secretary of Agriculture
shall--
(A) ensure expeditious compliance with all
applicable environmental and cultural resources laws;
and
(B) improve the collection, storage, and retrieval
of information relating to the oil and gas leasing
activities.
(b) Best Management Practices.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall develop and
implement best management practices to--
(A) improve the administration of the onshore oil
and gas leasing program under the Mineral Leasing Act
(30 U.S.C. 181 et seq.); and
(B) ensure timely action on oil and gas leases and
applications for permits to drill on land otherwise
available for leasing.
(2) Regulations.--Not later than 180 days after the
development of the best management practices under paragraph
(1), the Secretary shall publish, for public comment, proposed
regulations that set forth specific timeframes for processing
leases and applications in accordance with the best management
practices, including deadlines for--
(A) approving or disapproving--
(i) resource management plans and related
documents;
(ii) lease applications;
(iii) applications for permits to drill;
and
(iv) surface use plans; and
(B) related administrative appeals.
(c) Improved Enforcement.--The Secretary and the Secretary
Agriculture shall improve inspection and enforcement of oil and gas
activities, including enforcement of terms and conditions in permits to
drill on land under the jurisdiction of the Secretary and the Secretary
of Agriculture, respectively.
(d) Authorization of Appropriations.--In addition to amounts made
available to carry out activities relating to oil and gas leasing on
public land administered by the Secretary and National Forest System
land administered by the Secretary of Agriculture, there are authorized
to be appropriated for each of fiscal years 2006 through 2010--
(1) to the Secretary, acting through the Director of the
Bureau of Land Management--
(A) $40,000,000 to carry out subsections (a)(1) and
(b); and
(B) $20,000,000 to carry out subsection (c);
(2) to the Secretary, acting through the Director of the
United States Fish and Wildlife Service, $5,000,000 to carry
out subsection (a)(1); and
(3) to the Secretary of Agriculture, acting through the
Chief of the Forest Service, $5,000,000 to carry out
subsections (a)(2) and (c).
SEC. 343. CONSULTATION REGARDING OIL AND GAS LEASING ON PUBLIC LAND.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary of the Interior and the Secretary
of Agriculture shall enter into a memorandum of understanding regarding
oil and gas leasing on--
(1) public land under the jurisdiction of the Secretary of
the Interior; and
(2) National Forest System land under the jurisdiction of
the Secretary of Agriculture.
(b) Contents.--The memorandum of understanding shall include
provisions that--
(1) establish administrative procedures and lines of
authority that ensure timely processing of--
(A) oil and gas lease applications;
(B) surface use plans of operation, including steps
for processing surface use plans; and
(C) applications for permits to drill, including
applications for permits to drill consistent with
applicable timelines;
(2) eliminate duplication of effort by providing for
coordination of planning and environmental compliance efforts;
(3) ensure that lease stipulations are--
(A) applied consistently;
(B) coordinated between agencies; and
(C) only as restrictive as necessary to protect the
resource for which the stipulations are applied;
(4) establish a joint data retrieval system that is capable
of--
(A) tracking applications and formal requests made
in accordance with procedures of the Federal onshore
oil and gas leasing program; and
(B) providing information regarding the status of
the applications and requests within the Department of
the Interior and the Department of Agriculture; and
(5) establish a joint geographic information system mapping
system for use in--
(A) tracking surface resource values to aid in
resource management; and
(B) processing surface use plans of operation and
applications for permits to drill.
SEC. 344. PILOT PROJECT TO IMPROVE FEDERAL PERMIT COORDINATION.
(a) Establishment.--The Secretary of the Interior (referred to in
this section as the ``Secretary'') shall establish a Federal Permit
Streamlining Pilot Project (referred to in this section as the ``Pilot
Project'').
(b) Memorandum of Understanding.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall enter into a
memorandum of understanding for purposes of this section with--
(A) the Secretary of Agriculture;
(B) the Administrator of the Environmental
Protection Agency; and
(C) the Chief of Engineers.
(2) State participation.--The Secretary may request that
the Governors of Wyoming, Montana, Colorado, Utah, and New
Mexico be signatories to the memorandum of understanding.
(c) Designation of Qualified Staff.--
(1) In general.--Not later than 30 days after the date of
the signing of the memorandum of understanding under subsection
(b), all Federal signatory parties shall, if appropriate,
assign to each of the field offices identified in subsection
(d) an employee who has expertise in the regulatory issues
relating to the office in which the employee is employed,
including, as applicable, particular expertise in--
(A) the consultations and the preparation of
biological opinions under section 7 of the Endangered
Species Act of 1973 (16 U.S.C. 1536);
(B) permits under section 404 of Federal Water
Pollution Control Act (33 U.S.C. 1344);
(C) regulatory matters under the Clean Air Act (42
U.S.C. 7401 et seq.);
(D) planning under the National Forest Management
Act of 1976 (16 U.S.C. 472a et seq.); and
(E) the preparation of analyses under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
(2) Duties.--Each employee assigned under paragraph (1)
shall--
(A) not later than 90 days after the date of
assignment, report to the Bureau of Land Management
Field Managers in the office to which the employee is
assigned;
(B) be responsible for all issues relating to the
jurisdiction of the home office or agency of the
employee; and
(C) participate as part of the team of personnel
working on proposed energy projects, planning, and
environmental analyses.
(d) Field Offices.--The following Bureau of Land Management Field
Offices shall serve as the Pilot Project offices:
(1) Rawlins, Wyoming.
(2) Buffalo, Wyoming.
(3) Miles City, Montana
(4) Farmington, New Mexico.
(5) Carlsbad, New Mexico.
(6) Grand Junction/Glenwood Springs, Colorado.
(7) Vernal, Utah.
(e) Reports.--Not later than 3 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that--
(1) outlines the results of the Pilot Project to date; and
(2) makes a recommendation to the President regarding
whether the Pilot Project should be implemented throughout the
United States.
(f) Additional Personnel.--The Secretary shall assign to each field
office identified in subsection (d) any additional personnel that are
necessary to ensure the effective implementation of--
(1) the Pilot Project; and
(2) other programs administered by the field offices,
including inspection and enforcement relating to energy
development on Federal land, in accordance with the multiple
use mandate of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1701 et seq).
(g) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Secretary such sums as are necessary to carry out this
section for each of fiscal years 2006 through 2010.
(2) Transfer of funds.--For the purposes of coordination
and processing of oil and gas use authorizations on Federal
land under the administration of the Pilot Project offices
identified in subsection (d), the Secretary may authorize the
expenditure or transfer of such funds as are necessary to--
(A) the United States Fish and Wildlife Service;
(B) the Bureau of Indian Affairs;
(C) the Forest Service;
(D) the Environmental Protection Agency;
(E) the Corps of Engineers; and
(F) the States of Wyoming, Montana, Colorado, Utah,
and New Mexico.
(h) Savings Provision.--Nothing in this section affects--
(1) the operation of any Federal or State law; or
(2) any delegation of authority made by the head of a
Federal agency whose employees are participating in the Pilot
Project.
SEC. 345. ENERGY FACILITY RIGHTS-OF-WAYS AND CORRIDORS ON FEDERAL LAND.
(a) Definitions.--In this section:
(1) Corridor.--In this section and section 503 of the
Federal Land Policy and Management Act of 1976 (43 U.S.C.
1763), the term ``corridor'' means--
(A) a linear strip of land--
(i) with a width determined with
consideration given to technological,
environmental, and topographical factors; and
(ii) that contains, or may in the future
contain, 1 or more utility facilities;
(B) a land use designation that is established--
(i) by law;
(ii) by order of the head of a Federal
agency;
(iii) through the land use planning
process; or
(iv) by other management decision; and
(C) a designation made for the purpose of
establishing the preferred location of a compatible
utility facility.
(2) Federal authorization.--
(A) In general.--The term ``Federal authorization''
means any authorization required under Federal law in
order to site a utility facility.
(B) Inclusions.--The term ``Federal authorization''
includes such permits, special use authorizations,
certifications, opinions, or other approvals as may be
required, that are issued by a Federal agency.
(3) Federal land.--
(A) In general.--The term ``Federal land'' means
all land owned by the United States.
(B) Exclusions.--The term ``Federal land'' does not
include land--
(i) within the National Park System;
(ii) within the National Wilderness
Preservation System;
(iii) designated as a National Monument;
(iv) held in trust for an Indian or Indian
tribe; or
(v) on the outer Continental Shelf.
(4) Utility corridor.--The term ``utility corridor'' means
any linear strip of land across Federal land referred to in
subsection (b) of approved width, but limited for use by a
utility facility by technological, environmental, or
topographical factors.
(5) Utility facility.--The term ``utility facility'' means
any privately-, publicly-, or cooperatively-owned line,
facility, or system--
(A) for the transportation of--
(i) oil or natural gas, synthetic liquid or
gaseous fuel, or any refined product produced
from any of those materials; or
(ii) products in support of production, or
for storage or terminal facilities in
connection with production; or
(B) for the generation, transmission, or
distribution of electric energy.
(b) Utility Corridors.--
(1) In general.--Not later than 2 years after the document
described in subsection (c)(3) is completed, the Secretary of
the Interior, with respect to public lands (as defined in
section 103(e) of the Federal Land Policy and Management Act of
1976 (43 U.S.C. 1702(e)), and the Secretary of Agriculture,
with respect to National Forest System land, shall designate
utility corridors pursuant to--
(A) section 503 of the Federal Land Policy and
Management Act (43 U.S.C. 1763) in the 11 contiguous
Western States (as identified in section 103(o) of that
Act (43 U.S.C. 1702(o))); and
(B) relevant departmental and agency land use and
resource management plans or equivalent plans.
(2) Coordination.--The Secretary shall coordinate with
affected Federal agencies to jointly--
(A) identify potential utility corridors on Federal
land in States not described in paragraph (1)(A); and
(B) develop a schedule for the designation,
environmental review, and incorporation of the utility
corridors into relevant departmental and agency land
use and resource management plans or equivalent plans.
(3) Specifications of corridor.--A corridor designated
under this section shall specify the centerline, width, and
compatible uses of the corridor.
(c) Federal Permit Coordination.--
(1) In general.--The Secretary shall enter into a
memorandum of understanding with the Secretary of the Interior,
the Secretary of Agriculture, and the Secretary of Defense for
the purpose of coordinating all applicable Federal
authorizations and environmental reviews relating to a proposed
or existing utility facility.
(2) Additional entities.--To the maximum extent practicable
under applicable law, the Secretary shall coordinate the
process developed through the memorandum of understanding under
paragraph (1) with any Indian tribes, multistate entities, and
State agencies that are responsible for conducting any separate
permitting and environmental reviews of the affected utility
facility to ensure timely review and permit decisions.
(3) Contents of mou.--The memorandum of understanding under
paragraph (1) shall provide for--
(A) coordination, among affected Federal agencies,
to ensure that the necessary Federal authorizations--
(i) are conducted concurrently with
applicable State siting processes; and
(ii) are considered within a specific time
frame identified within the memorandum of
understanding;
(B) an agreement among the affected Federal
agencies to prepare a programmatic environmental review
document to be used as the underlying basis for all
Federal authorization decisions; and
(C) a process to expedite applications to construct
or modify utility facilities within utility corridors.
SEC. 346. OIL SHALE AND TAR SANDS.
(a) Declaration of Policy.--Congress declares that it is the policy
of the United States that--
(1) United States oil shale and tar sands are strategically
important domestic resources that should be developed through
methods that help reduce the growing dependence of the United
States on politically and economically unstable sources of
foreign oil imports;
(2) the development of oil shale and tar sands, for
research and commercial development, should be conducted in an
economically feasible and environmentally sound manner, using
practices that minimize impacts;
(3) development should occur at a deliberate pace, with an
emphasis on sustainability, to benefit the United States while
taking into account affected States and communities; and
(4) the Secretary of the Interior should work toward
developing a commercial leasing program for oil shale and tar
sands so that such a program can be implemented when production
technologies are commercially viable.
(b) Leasing Program.--
(1) Research and development.--
(A) In general.--In accordance with section 21 of
the Mineral Leasing Act (30 U.S.C. 241) and any other
applicable law, except as provided in this section, not
later than 1 year after the date of enactment of this
Act, from land otherwise available for leasing, the
Secretary of the Interior (referred to in this section
as the ``Secretary'') shall, for a period determined by
the Secretary, make available for leasing such land as
the Secretary considers to be necessary to conduct
research and development activities with respect to
innovative technologies for the recovery of shale oil
from oil shale resources on public land.
(B) Application.--The Secretary may offer to lease
the land to persons that submit an application for the
lease, if the Secretary determines that there is no
competitive interest in the land.
(C) Administration.--In carrying out this
paragraph, the Secretary shall--
(i) provide for environmentally sound
research and development of oil shale;
(ii) provide for an appropriate return to
the public, as determined by the Secretary;
(iii) before carrying out any activity that
will disturb the surface of land, provide for
an adequate bond, surety, or other financial
arrangement to ensure reclamation;
(iv) provide for a primary lease term of 10
years, after which the lease term may be
extended if the Secretary determines that
diligent research and development activities
are occurring on the land leased;
(v) require the owner or operator of a
project under this subsection, within such
period as the Secretary may determine--
(I) to submit a plan of operations;
(II) to develop an environmental
protection plan; and
(III) to undertake diligent
research and development activities;
(vi) ensure that leases under this section
are not larger than necessary to conduct
research and development activities under an
application under subparagraph (B);
(vii) provide for consultation with
affected State and local governments; and
(viii) provide for such requirements as the
Secretary determines to be in the public
interest.
(2) Commercial leasing.--Prior to conducting commercial
leasing, the Secretary shall carry out--
(A) the programmatic environmental impact statement
required under subsection (c); and
(B) the analysis required under subsection (d).
(3) Moneys received.--Any moneys received from a leasing
activity under this subsection shall be paid in accordance with
section 35 of the Mineral Leasing Act (30 U.S.C. 191).
(c) Programmatic Environmental Impact Statement.--Not later than 18
months after the date of enactment of this Act, in accordance with
section 102(2)(C) of the National Environmental Policy Act of 1969 (42
U.S.C. 4332(2)(C)), the Secretary shall complete a programmatic
environmental impact statement that analyzes potential leasing for
commercial development of oil shale resources on public land.
(d) Analysis of Potential Leasing Program.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretary shall submit to Congress a
report (including recommendations) analyzing a potential
leasing program for the commercial development of oil shale on
public land.
(2) Inclusions.--The report under paragraph (1) shall
include--
(A) an analysis of technologies and research and
development programs for the production of oil and
other materials from oil shale and tar sands in
existence on the date on which the report is prepared;
(B) an analysis of--
(i) whether leases under the program should
be issued on a competitive basis;
(ii) the term of the leases;
(iii) the maximum size of the leases;
(iv) the use and distribution of bonus bid
lease payments;
(v) the royalty rate to be applied,
including whether a sliding scale royalty rate
should be used;
(vi) whether an opportunity should be
provided to convert research and development
leases into leases for commercial development,
including the terms and conditions that should
apply to the conversion;
(vii) the maximum number of leases and
maximum acreage to be leased under the leasing
program to an individual; and
(viii) any infrastructure required to
support oil shale development in industry and
communities;
(C) an identification of events that should serve
as a precursor to commercial leasing, including
development of environmentally and commercially viable
technologies, and the completion of land use planning
and environmental reviews; and
(D) an analysis, developed in conjunction with the
appropriate State water resource agencies, of the
demand for, and availability of, water with respect to
the development of oil shale and tar sands.
(3) Public participation.--In preparing the report under
this subsection, the Secretary shall provide notice to, and
solicit comment from--
(A) the public;
(B) representatives of local governments;
(C) representatives of industry; and
(D) other interested parties.
(4) Participation by certain states.--In preparing the
report under this subsection, the Secretary shall--
(A) provide notice to, and solicit comment from,
the Governors of the States of Colorado, Utah, and
Wyoming; and
(B) incorporate into the report submitted to
Congress under paragraph (1) any response of the
Secretary to those comments.
(e) Oil Shale and Tar Sands Task Force.--
(1) Establishment.--The Secretary of Energy, in cooperation
with the Secretary of the Interior, shall establish an Oil
Shale and Tar Sands Task Force to develop a program to
coordinate and accelerate the commercial development of oil
shale and tar sands in an integrated manner.
(2) Composition.--The Task Force shall be composed of--
(A) the Secretary of Energy (or the designee of the
Secretary of Energy);
(B) the Secretary of Defense (or the designee of
the Secretary of Defense);
(C) the Secretary of the Interior (or the designee
of the Secretary of the Interior);
(D) the Governors of the affected States; and
(E) representatives of local governments in
affected areas.
(3) Development of a 5-year plan.--
(A) In general.--The Task Force shall formulate a
5-year plan to promote the development of oil shale and
tar sands.
(B) Components.--In formulating the plan, the Task
Force shall--
(i) identify public actions that are
required to stimulate prudent development of
oil shale and tar sands;
(ii) analyze the costs and benefits of
those actions;
(iii) make recommendations concerning
specific actions that should be taken to
stimulate prudent development of oil shale and
tar sands, including economic, investment, tax,
technology, research and development,
infrastructure, environmental, education, and
socio-economic actions;
(iv) consult with representatives of
industry and other stakeholders;
(v) provide notice and opportunity for
public comment on the plan;
(vi) identify oil shale and tar sands
technologies that--
(I) are ready for pilot plant and
semiworks development; and
(II) have a high probability of
leading to advanced technology for
first- or second-generation commercial
production; and
(vii) assess the availability of water from
the Green River Formation to meet the potential
needs of oil shale and tar sands development.
(4) National program office.--The Task Force shall analyze
and make recommendations regarding the need for a national
program office to administer the plan.
(5) Partnership.--The Task Force shall recommend whether to
initiate a partnership with Alberta, Canada, for purposes of
sharing information relating to the development and production
of oil from tar sands.
(6) Reports.--
(A) Initial report.--Not later than 180 days after
the date of enactment of this Act, the Task Force shall
submit to the President and Congress a report that
describes the analysis and recommendations of the Task
Force and contains the 5-year plan.
(B) Subsequent reports.--The Secretary of Energy
shall provide an annual report describing the progress
in carrying out the plan for each of the 5 years
following submission of the report provided for in
subparagraph (A).
(f) Mineral Leasing Act Amendments.--Section 21(a) of the Mineral
Leasing Act (30 U.S.C. 241(a)) is amended--
(1) by designating the first, second, and third sentences
as paragraphs (1), (2), and (3), respectively; and
(2) in paragraph (3) (as designated by paragraph (1))--
(A) by striking ``rate of 50 cents per acre'' and
inserting ``rate of $2.00 per acre''; and
(B) in the last proviso--
(i) by striking ``That not more than one
lease shall be granted under this section to
any'' and inserting ``That no''; and
(ii) by striking ``except that with respect
to leases for'' and inserting ``shall acquire
or hold more than 25,000 acres of oil shale
leases in the United States. For''.
(g) Cost-Shared Demonstration Technologies.--
(1) Identification.--The Secretary of Energy shall identify
technologies for the development of oil shale and tar sands
that--
(A) are ready for demonstration at a commercially-
representative scale; and
(B) have a high probability of leading to
commercial production.
(2) Assistance.--For each technology identified under
paragraph (1), the Secretary of Energy may provide--
(A) technical assistance;
(B) assistance in meeting environmental and
regulatory requirements; and
(C) cost-sharing assistance in accordance with
section 1002.
(h) Technical Assistance.--
(1) In general.--The Secretary of Energy may provide
technical assistance for the purpose of overcoming technical
challenges to the development of oil shale and tar sands
technologies for application in the United States.
(2) Administration.--The Secretary of Energy may provide
technical assistance under this section on a cost-shared basis
in accordance with section 1002.
(i) National Oil Shale Assessment.--
(1) Assessment.--
(A) In general.--The Secretary shall carry out a
national assessment of oil shale resources for the
purposes of evaluating and mapping oil shale deposits,
in the geographic areas described in subparagraph (B).
(B) Geographic areas.--The geographic areas
referred to in subparagraph (A), listed in the order in
which the Secretary shall assign priority, are--
(i) the Green River Region of the States of
Colorado, Utah, and Wyoming;
(ii) the Devonian oil shales of the eastern
United States; and
(iii) any remaining area in the central and
western United States (including the State of
Alaska) that contains oil shale, as determined
by the Secretary.
(2) Use of state surveys and universities.--In carrying out
the assessment under paragraph (1), the Secretary may request
assistance from any State-administered geological survey or
university.
(j) State Water Rights.--Nothing in this section preempts or
affects any State water law or interstate compact relating to water.
(k) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 347. FINGER LAKES WITHDRAWAL.
All Federal land within the boundary of Finger Lakes National
Forest in the State of New York is withdrawn from--
(1) all forms of entry, appropriation, or disposal under
the public land laws; and
(2) disposition under all laws relating to oil and gas
leasing.
SEC. 348. REINSTATEMENT OF LEASES.
Notwithstanding section 31(d)(2)(B) of the Mineral Leasing Act (30
U.S.C. 188(d)(2)(B)), the Secretary may reinstate any oil and gas lease
issued under that Act that was terminated for failure of a lessee to
pay the full amount of rental on or before the anniversary date of the
lease, during the period beginning on September 1, 2001, and ending on
June 30, 2004, if--
(1) not later than 120 days after the date of enactment of
this Act, the lessee--
(A) files a petition for reinstatement of the
lease;
(B) complies with the conditions of section 31(e)
of the Mineral Leasing Act (30 U.S.C. 188(e)); and
(C) certifies that the lessee did not receive a
notice of termination by the date that was 13 months
before the date of termination; and
(2) the land is available for leasing.
Subtitle D--Coastal Programs
SEC. 371. COASTAL IMPACT ASSISTANCE PROGRAM.
Section 31 of the Outer Continental Shelf Lands Act (43 U.S.C.
1356a) is amended to read as follows:
``SEC. 31. COASTAL IMPACT ASSISTANCE PROGRAM.
``(a) Definitions.--In this section:
``(1) Coastal political subdivision.--The term `coastal
political subdivision' means a political subdivision of a
coastal State any part of which political subdivision is--
``(A) within the coastal zone (as defined in
section 304 of the Coastal Zone Management Act of 1972
(16 U.S.C. 1453)) of the coastal State as of the date
of enactment of the Energy Policy Act of 2005; and
``(B) not more than 200 nautical miles from the
geographic center of any leased tract.
``(2) Coastal population.--The term `coastal population'
means the population, as determined by the most recent official
data of the Census Bureau, of each political subdivision any
part of which lies within the designated coastal boundary of a
State (as defined in a State's coastal zone management program
under the Coastal Zone Management Act of 1972 (16 U.S.C. 1451
et seq.)).
``(3) Coastal state.--The term `coastal State' has the
meaning given the term in section 304 of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1453).
``(4) Coastline.--The term `coastline' has the meaning
given the term `coast line' in section 2 of the Submerged Lands
Act (43 U.S.C. 1301).
``(5) Distance.--The term `distance' means the minimum
great circle distance, measured in statute miles.
``(6) Leased tract.--The term `leased tract' means a tract
that is subject to a lease under section 6 or 8 for the purpose
of drilling for, developing, and producing oil or natural gas
resources.
``(7) Leasing moratoria.--The term `leasing moratoria'
means the prohibitions on preleasing, leasing, and related
activities on any geographic area of the outer Continental
Shelf as contained in sections 107 through 109 of division E of
the Consolidated Appropriations Act, 2005 (Public Law 108-447;
118 Stat. 3063).
``(8) Political subdivision.--The term `political
subdivision' means the local political jurisdiction immediately
below the level of State government, including counties,
parishes, and boroughs.
``(9) Producing state.--
``(A) In general.--The term `producing State' means
a coastal State that has a coastal seaward boundary
within 200 nautical miles of the geographic center of a
leased tract within any area of the outer Continental
Shelf.
``(B) Exclusion.--The term `producing State' does
not include a producing State, a majority of the
coastline of which is subject to leasing moratoria,
unless production was occurring on January 1, 2005,
from a lease within 10 nautical miles of the coastline
of that State.
``(10) Qualified outer continental shelf revenues.--
``(A) In general.--The term `qualified Outer
Continental Shelf revenues' means all amounts received
by the United States from each leased tract or portion
of a leased tract--
``(i) lying--
``(I) seaward of the zone covered
by section 8(g); or
``(II) within that zone, but to
which section 8(g) does not apply; and
``(ii) the geographic center of which lies
within a distance of 200 nautical miles from
any part of the coastline of any coastal State.
``(B) Inclusions.--The term `qualified Outer
Continental Shelf revenues' includes bonus bids, rents,
royalties (including payments for royalty taken in kind
and sold), net profit share payments, and related late-
payment interest from natural gas and oil leases issued
under this Act.
``(C) Exclusion.--The term `qualified Outer
Continental Shelf revenues' does not include any
revenues from a leased tract or portion of a leased
tract that is located in a geographic area subject to a
leasing moratorium on January 1, 2005, unless the lease
was in production on January 1, 2005.
``(b) Payments to Producing States and Coastal Political
Subdivisions.--
``(1) In general.--The Secretary shall, without further
appropriation, disburse to producing States and coastal
political subdivisions in accordance with this section
$250,000,000 for each of fiscal years 2007 through 2010.
``(2) Disbursement.--In each fiscal year, the Secretary
shall disburse to each producing State for which the Secretary
has approved a plan under subsection (c), and to coastal
political subdivisions under paragraph (4), such funds as are
allocated to the producing State or coastal political
subdivision, respectively, under this section for the fiscal
year.
``(3) Allocation among producing states.--
``(A) In general.--Except as provided in
subparagraph (C) and subject to subparagraph (D), the
amounts available under paragraph (1) shall be
allocated to each producing State based on the ratio
that--
``(i) the amount of qualified outer
Continental Shelf revenues generated off the
coastline of the producing State; bears to
``(ii) the amount of qualified outer
Continental Shelf revenues generated off the
coastline of all producing States.
``(B) Amount of outer continental shelf revenues.--
For purposes of subparagraph (A)--
``(i) the amount of qualified outer
Continental Shelf revenues for each of fiscal
years 2007 and 2008 shall be determined using
qualified outer Continental Shelf revenues
received for fiscal year 2006; and
``(ii) the amount of qualified outer
Continental Shelf revenues for each of fiscal
years 2009 and 2010 shall be determined using
qualified outer Continental Shelf revenues
received for fiscal year 2008.
``(C) Multiple producing states.--In a case in
which more than 1 producing State is located within 200
nautical miles of any portion of a leased tract, the
amount allocated to each producing State for the leased
tract shall be inversely proportional to the distance
between--
``(i) the nearest point on the coastline of
the producing State; and
``(ii) the geographic center of the leased
tract.
``(D) Minimum allocation.--The amount allocated to
a producing State under subparagraph (A) shall be at
least 1 percent of the amounts available under
paragraph (1).
``(4) Payments to coastal political subdivisions.--
``(A) In general.--The Secretary shall pay 35
percent of the allocable share of each producing State,
as determined under paragraph (3) to the coastal
political subdivisions in the producing State.
``(B) Formula.--Of the amount paid by the Secretary
to coastal political subdivisions under subparagraph
(A)--
``(i) 25 percent shall be allocated to each
coastal political subdivision in the proportion
that--
``(I) the coastal population of the
coastal political subdivision; bears to
``(II) the coastal population of
all coastal political subdivisions in
the producing State;
``(ii) 25 percent shall be allocated to
each coastal political subdivision in the
proportion that--
``(I) the number of miles of
coastline of the coastal political
subdivision; bears to
``(II) the number of miles of
coastline of all coastal political
subdivisions in the producing State;
and
``(iii) 50 percent shall be allocated in
amounts that are inversely proportional to the
respective distances between the points in each
coastal political subdivision that are closest
to the geographic center of each leased tract,
as determined by the Secretary.
``(C) Exception for the state of louisiana.--For
the purposes of subparagraph (B)(ii), the coastline for
coastal political subdivisions in the State of
Louisiana without a coastline shall be considered to be
\1/3\ the average length of the coastline of all
coastal political subdivisions with a coastline in the
State of Louisiana.
``(D) Exception for the state of alaska.--For the
purposes of carrying out subparagraph (B)(iii) in the
State of Alaska, the amounts allocated shall be divided
equally among the 2 coastal political subdivisions that
are closest to the geographic center of a leased tract.
``(E) Exclusion of certain leased tracts.--For
purposes of subparagraph (B)(iii), a leased tract or
portion of a leased tract shall be excluded if the
tract or portion of a leased tract is located in a
geographic area subject to a leasing moratorium on
January 1, 2005, unless the lease was in production on
that date.
``(6) No approved plan.--
``(A) In general.--Subject to subparagraph (B) and
except as provided in subparagraph (C), in a case in
which any amount allocated to a producing State or
coastal political subdivision under paragraph (4) or
(5) is not disbursed because the producing State does
not have in effect a plan that has been approved by the
Secretary under subsection (c), the Secretary shall
allocate the undisbursed amount equally among all other
producing States.
``(B) Retention of allocation.--The Secretary shall
hold in escrow an undisbursed amount described in
subparagraph (A) until such date as the final appeal
regarding the disapproval of a plan submitted under
subsection (c) is decided.
``(C) Waiver.--The Secretary may waive subparagraph
(A) with respect to an allocated share of a producing
State and hold the allocable share in escrow if the
Secretary determines that the producing State is making
a good faith effort to develop and submit, or update, a
plan in accordance with subsection (c).
``(c) Coastal Impact Assistance Plan.--
``(1) Submission of state plans.--
``(A) In general.--Not later than July 1, 2008, the
Governor of a producing State shall submit to the
Secretary a coastal impact assistance plan.
``(B) Public participation.--In carrying out
subparagraph (A), the Governor shall solicit local
input and provide for public participation in the
development of the plan.
``(2) Approval.--
``(A) In general.--The Secretary shall approve a
plan of a producing State submitted under paragraph (1)
before disbursing any amount to the producing State, or
to a coastal political subdivision located in the
producing State, under this section.
``(B) Components.--The Secretary shall approve a
plan submitted under paragraph (1) if--
``(i) the Secretary determines that the
plan is consistent with the uses described in
subsection (d); and
``(ii) the plan contains--
``(I) the name of the State agency
that will have the authority to
represent and act on behalf of the
producing State in dealing with the
Secretary for purposes of this section;
``(II) a program for the
implementation of the plan that
describes how the amounts provided
under this section to the producing
State will be used;
``(III) for each coastal political
subdivision that receives an amount
under this section--
``(aa) the name of a
contact person; and
``(bb) a description of how
the coastal political
subdivision will use amounts
provided under this section;
``(IV) a certification by the
Governor that ample opportunity has
been provided for public participation
in the development and revision of the
plan; and
``(V) a description of measures
that will be taken to determine the
availability of assistance from other
relevant Federal resources and
programs.
``(3) Amendment.--Any amendment to a plan submitted under
paragraph (1) shall be--
``(A) developed in accordance with this subsection;
and
``(B) submitted to the Secretary for approval or
disapproval under paragraph (4).
``(4) Procedure.--Not later than 90 days after the date on
which a plan or amendment to a plan is submitted under
paragraph (1) or (3), the Secretary shall approve or disapprove
the plan or amendment.
``(d) Authorized Uses.--
``(1) In general.--A producing State or coastal political
subdivision shall use all amounts received under this section,
including any amount deposited in a trust fund that is
administered by the State or coastal political subdivision and
dedicated to uses consistent with this section, in accordance
with all applicable Federal and State law, only for 1 or more
of the following purposes:
``(A) Projects and activities for the conservation,
protection, or restoration of coastal areas, including
wetland.
``(B) Mitigation of damage to fish, wildlife, or
natural resources.
``(C) Planning assistance and the administrative
costs of complying with this section.
``(D) Implementation of a federally-approved
marine, coastal, or comprehensive conservation
management plan.
``(E) Mitigation of the impact of outer Continental
Shelf activities through funding of onshore
infrastructure projects and public service needs.
``(2) Compliance with authorized uses.--If the Secretary
determines that any expenditure made by a producing State or
coastal political subdivision is not consistent with this
subsection, the Secretary shall not disburse any additional
amount under this section to the producing State or the coastal
political subdivision until such time as all amounts obligated
for unauthorized uses have been repaid or reobligated for
authorized uses.
``(3) Limitation.--Not more than 23 percent of amounts
received by a producing State or coastal political subdivision
for any 1 fiscal year shall be used for the purposes described
subparagraphs (C) and (E) of paragraph (1).''.
Subtitle E--Natural Gas
SEC. 381. EXPORTATION OR IMPORTATION OF NATURAL GAS.
Section 3 of the Natural Gas Act (15 U.S.C. 717b) is amended by
adding at the end the following:
``(d) Except as specifically provided in this part, nothing in this
Act affects the rights of States under--
``(1) the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.)
``(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or
``(3) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.).
``(e)(1) No facilities located onshore or in State waters for the
import of natural gas from a foreign country, or the export of natural
gas to a foreign country, shall be sited, constructed, expanded, or
operated, unless the Commission has authorized such acts or operations.
``(2) The Commission shall have the exclusive authority to approve
or deny an application for the siting, construction, expansion, or
operation of facilities located onshore or in State waters for the
import of natural gas from a foreign county or the export of natural
gas to a foreign country.
``(3)(A) Except as provided in subparagraph (B), the Commission may
approve an application described in paragraph (2), in whole or part,
with such modifications and upon such terms and conditions as the
Commission finds appropriate.
``(B) The Commission shall not--
``(i) deny an application solely on the basis that the
applicant proposes to use the liquefied natural gas import
facility exclusively or partially for gas that the applicant or
an affiliate of the applicant will supply to the facility; or
``(ii) condition an order on--
``(I) a requirement that the liquefied natural gas
import facility offer service to customers other than
the applicant, or any affiliate of the applicant,
securing the order;
``(II) any regulation of the rates, charges, terms,
or conditions of service of the liquefied natural gas
import facility; or
``(III) a requirement to file with the Commission
schedules or contracts related to the rates, charges,
terms, or conditions of service of the liquefied
natural gas import facility.
``(4) An order issued for a liquefied natural gas import facility
that also offers service to customers on an open access basis shall not
result in subsidization of expansion capacity by existing customers,
degradation of service to existing customers, or undue discrimination
against existing customers as to their terms or conditions of service
at the facility, as all of those terms are defined by the
Commission.''.
SEC. 382. NEW NATURAL GAS STORAGE FACILITIES.
Section 4 of the Natural Gas Act (15 U.S.C. 717c) is amended by
adding at the end the following:
``(f)(1) In exercising its authority under this Act or the Natural
Gas Policy Act of 1978 (15 U.S.C. 3301 et seq.), the Commission may
authorize a natural gas company (or any person that will be a natural
gas company on completion of any proposed construction) to provide
storage and storage-related services at market-based rates for new
storage capacity placed in service after the date of enactment of the
Energy Policy Act of 2005, notwithstanding the fact that the company is
unable to demonstrate that the company lacks market power, if the
Commission determines that--
``(A) market-based rates are in the public interest and
necessary to encourage the construction of storage capacity in
areas needing storage services; and
``(B) customers are adequately protected.
``(2) The Commission shall ensure that reasonable terms and
conditions are in place to protect consumers.
``(3) If the Commission authorizes a natural gas company to charge
market-based rates under this subsection, the Commission shall review
periodically (but not more frequently than triennially) whether the
market-based rate is just, reasonable, and not unduly discriminatory or
preferential.''.
SEC. 383. PROCESS COORDINATION; HEARINGS; RULES OF PROCEDURES.
Section 15 of the Natural Gas Act (15 U.S.C. 717n) is amended--
(1) by striking the section heading and inserting the
following:
``process coordination; hearings; rules of procedure'';
(2) by redesignating subsections (a) and (b) as subsections
(e) and (f), respectively;
(3) by striking ``Sec. 15.'' and inserting the following:
``Sec. 15. (a) In this section, the term `Federal authorization'--
``(1) means any authorization required under Federal law
with respect to an application for authorization under section
3 or a certificate of public convenience and necessity under
section 7; and
``(2) includes any permits, special use authorizations,
certifications, opinions, or other approvals as may be required
under Federal law with respect to an application for
authorization under section 3 or a certificate of public
convenience and necessity under section 7.
``(b)(1) With respect to an application for Federal authorization,
the Commission shall, unless the Commission orders otherwise, be the
lead agency for purposes of complying with the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.).
``(2) As lead agency, the Commission, in consultation with affected
agencies, shall prepare a single environmental review document, which
shall be used as a basis for all decisions under Federal law on--
``(A) an application for authorization under section 3; or
``(B) a certificate of public convenience and necessity
under section 7.
``(c)(1) The Commission shall, in consultation with agencies
responsible for Federal authorizations, and with due consideration of
recommendations by the agencies, establish a schedule for all Federal
authorizations required to be completed before an application under
section 3 or 7 may be approved.
``(2) In establishing a schedule, the Commission shall comply with
applicable schedules established by Federal law.
``(3) All Federal and State agencies with jurisdiction over natural
gas infrastructure shall seek to coordinate their proceedings within
the timeframes established by the Commission with respect to an
application for authorization under section 3 or a certificate of
public convenience and necessity under section 7.
``(d)(1) In a case in which an administrative agency or officer has
failed to act by the deadline established by the Commission under this
section for deciding whether to issue the authorization, the applicant
or any State in which the facility would be located may file an appeal
with the President, who shall, in consultation with the affected
agency, take action on the pending application.
``(2) Based on the overall record and in consultation with the
affected agency, the President may--
``(A) issue the necessary authorization with any
appropriate conditions; or
``(B) deny the application.
``(3) Not later than 90 days after the filing of an appeal, the
President shall issue a decision as to that appeal.
``(4) In making a decision under this subsection, the President
shall comply with applicable requirements of Federal law, including--
``(A) the Endangered Species Act of 1973 (16 U.S.C. 1531 et
seq.)
``(B) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.);
``(C) the National Forest Management Act of 1976 (16 U.S.C.
472a et seq.);
``(D) the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.);
``(E) the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1701 et seq.);
``(F) the Coastal Zone Management Act of 1972 (16 U.S.C.
1451 et seq.); and
``(G) the Clean Air Act (42 U.S.C. 7401 et seq.).''.
SEC. 384. PENALTIES.
(a) Criminal Penalties.--
(1) Natural gas act.--Section 21 of the Natural Gas Act (15
U.S.C. 717t) is amended--
(A) in subsection (a)--
(i) by striking ``$5,000'' and inserting
``$1,000,000''; and-
(ii) by striking ``two years'' and
inserting ``5 years''; and
(B) in subsection (b), by striking ``$500'' and
inserting ``$50,000''.
(2) Natural gas policy act of 1978.--Section 504(c) of the
Natural Gas Policy Act of 1978 (15 U.S.C. 3414(c)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``$5,000'' and inserting ``$1,000,000'';
(ii) in subparagraph (B), by striking ``two
years'' and inserting ``5 years''; and
(B) in paragraph (2), by striking ``$500 for each
violation'' and inserting ``$50,000 for each day on
which the offense occurs''.
(b) Civil Penalties.--
(1) Natural gas act.--The Natural Gas Act (15 U.S.C. 717 et
seq.) is amended--
(A) by redesignating sections 22 through 24 as
sections 24 through 26, respectively; and
(B) by inserting after section 21 (15 U.S.C. 717t)
the following:
``civil penalty authority
``Sec. 22. (a) Any person that violates this Act, or any rule,
regulation, restriction, condition, or order made or imposed by the
Commission under authority of this Act, shall be subject to a civil
penalty of not more than $1,000,000 per day per violation for as long
as the violation continues.
``(b) The penalty shall be assessed by the Commission after notice
and opportunity for public hearing.
``(c) In determining the amount of a proposed penalty, the
Commission shall take into consideration the nature and seriousness of
the violation and the efforts to remedy the violation.''.
(2) Natural gas policy act of 1978.--Section 504(b)(6)(A)
of the Natural Gas Policy Act of 1978 (15 U.S.C. 3414(b)(6)(A))
is amended--
(A) in clause (i), by striking ``$5,000'' and
inserting ``$1,000,000''; and
(B) in clause (ii), by striking ``$25,000'' and
inserting ``$1,000,000''.
SEC. 385. MARKET MANIPULATION.
The Natural Gas Act is amended by inserting after section 4 (15
U.S.C. 717c) the following:
``prohibition on market manipulation
``Sec. 4A. It shall be unlawful for any entity, directly or
indirectly, to use or employ, in connection with the purchase or sale
of natural gas or the purchase or sale of transportation services
subject to the jurisdiction of the Commission, any manipulative or
deceptive device or contrivance (as those terms are used in section
10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) in
contravention of such rules and regulations as the Commission may
prescribe as necessary in the public interest or for the protection of
natural gas ratepayers.''
SEC. 386. NATURAL GAS MARKET TRANSPARENCY RULES.
The Natural Gas Act (15 U.S.C. 717 et seq.) (as amended by section
385(b)(1)) is amended by inserting after section 22 the following:
``natural gas market transparency rules
``Sec. 23. (a)(1) The Commission may issue such rules as the
Commission considers to be appropriate to establish an electronic
information system to provide the Commission and the public with access
to such information as is necessary to facilitate price transparency
and participation in markets for the sale or transportation of natural
gas in interstate commerce.
``(2) The system under paragraph (1) shall provide, on a timely
basis, information about the availability and prices of natural gas
sold at wholesale and in interstate commerce to the Commission, State
commissions, buyers and sellers of wholesale natural gas, and the
public.
``(3) The Commission may--
``(A) obtain information described in paragraph (2) from
any market participant; and
``(B) rely on an entity other than the Commission to
receive and make public the information.
``(b)(1) Rules described in subsection (a)(1), if adopted, shall
exempt from disclosure information the Commission determines would, if
disclosed, be detrimental to the operation of an effective market or
jeopardize system security.
``(2) In determining the information to be made available under
this section and time to make the information available, the Commission
shall seek to ensure that consumers and competitive markets are
protected from the adverse effects of potential collusion or other
anticompetitive behaviors that can be facilitated by untimely public
disclosure of transaction-specific information.
``(c)(1) This section shall not affect the exclusive jurisdiction
of the Commodity Futures Trading Commission with respect to accounts,
agreements, contracts, or transactions in commodities under the
Commodity Exchange Act (7 U.S.C. 1 et seq.).
``(2) Any request by the Commission for information to a designated
contract market, registered derivatives transaction execution facility,
board of trade, exchange, or market involving accounts, agreements,
contracts, or transactions in commodities (including natural gas,
electricity and other energy commodities) within the exclusive
jurisdiction of the Commodity Futures Trading Commission shall be
directed to the Commodity Futures Trading Commission, which shall
cooperate in responding to any information request by the Commission.
``(d) In carrying out this section, the Commission shall not--
``(1) compete with, or displace from the market place, any
price publisher (including any electronic price publisher);
``(2) regulate price publishers (including any electronic
price publisher); or
``(3) impose any requirements on the publication of
information by price publishers (including any electronic price
publisher).
``(e)(1) The Commission shall not condition access to interstate
pipeline transportation on the reporting requirements of this section.
``(2) The Commission shall not require natural gas producers,
processors, or users who have a de minimis market presence to comply
with the reporting requirements of this section.
``(f)(1) Except as provided in paragraph (2), no person shall be
subject to any civil penalty under this section with respect to any
violation occurring more than 3 years before the date on which the
person is provided notice of the proposed penalty under section 22(b).
``(2) Paragraph (1) shall not apply in any case in which the
Commission finds that a seller that has entered into a contract for the
transportation or sale of natural gas subject to the jurisdiction of
the Commission has engaged in fraudulent market manipulation activities
materially affecting the contract in violation of section 4A.''.
SEC. 387. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY DETERMINATION
UNDER THE COASTAL ZONE MANAGEMENT ACT OF 1972.
(a) In General.--Section 319 of the Coastal Zone Management Act of
1972 (16 U.S.C. 1465) is amended to read as follows:
``appeals to the secretary
``Sec. 319. (a) Notice.--Not later than 30 days after the date of
the filing of an appeal to the Secretary of a consistency determination
under section 307, the Secretary shall publish an initial notice in the
Federal Register.
``(b) Closure of Record.--
``(1) In general.--Not later than the end of the 270-day
period beginning on the date of publication of an initial
notice under subsection (a), except as provided in paragraph
(3), the Secretary shall immediately close the decision record
and receive no more filings on the appeal.
``(2) Notice.--After closing the administrative record, the
Secretary shall immediately publish a notice in the Federal
Register that the administrative record has been closed.
``(3) Exception.--
``(A) In general.--Subject to subparagraph (B),
during the 270-day period described in paragraph (1),
the Secretary may stay the closing of the decision
record--
``(i) for a specific period mutually agreed
to in writing by the appellant and the State
agency; or
``(ii) as the Secretary determines
necessary to receive, on an expedited basis--
``(I) any supplemental information
specifically requested by the Secretary
to complete a consistency review under
this Act; or
``(II) any clarifying information
submitted by a party to the proceeding
related to information already existing
in the sole record.
``(B) Applicability.--The Secretary may only stay
the 270-day period described in paragraph (1) for a
period not to exceed 60 days.
``(c) Deadline for Decision.--
``(1) In general.--Not later than 90 days after the date of
publication of a Federal Register notice stating when the
decision record for an appeal has been closed, the Secretary
shall issue a decision or publish a notice in the Federal
Register explaining why a decision cannot be issued at that
time.
``(2) Subsequent decision.--Not later than 45 days after
the date of publication of a Federal Register notice explaining
why a decision cannot be issued within the 90-day period, the
Secretary shall issue a decision.''.
SEC. 388. FEDERAL-STATE LIQUEFIED NATURAL GAS FORUMS.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary, in cooperation and consultation with the
Secretary of Transportation, the Secretary of Homeland Security, the
Federal Energy Regulatory Commission, and the Governors of the Coastal
States, shall convene not less than 3 forums on liquefied natural gas.
(b) Requirements.--The forums shall--
(1) be located in areas where liquefied natural gas
facilities are under consideration;
(2) be designed to foster dialogue among Federal officials,
State and local officials, the general public, independent
experts, and industry representatives; and
(3) at a minimum, provide an opportunity for public
education and dialogue on--
(A) the role of liquefied natural gas in meeting
current and future United States energy supply
requirements and demand, in the context of the full
range of energy supply options;
(B) the Federal and State siting and permitting
processes;
(C) the potential risks and rewards associated with
importing liquefied natural gas;
(D) the Federal safety and environmental
requirements (including regulations) applicable to
liquefied natural gas;
(E) prevention, mitigation, and response strategies
for liquefied natural gas hazards; and
(F) additional issues as appropriate.
(c) Purpose.--The purpose of the forums shall be to identify and
develop best practices for addressing the issues and challenges
associated with liquefied natural gas imports, building on existing
cooperative efforts.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 389. PROHIBITION OF TRADING AND SERVING BY CERTAIN PERSONS.
Section 20 of the Natural Gas Act (15 U.S.C. 717s) is amended by
adding at the end the following:
``(d) In any proceedings under subsection (a), the court may
prohibit, conditionally or unconditionally, and permanently or for such
period of time as the court determines, any person who is engaged or
has engaged in practices constituting a violation of section 4A
(including related rules and regulations) from--
``(1) acting as an officer or director of a natural gas
company; or
``(2) engaging in the business of--
``(A) the purchasing or selling of natural gas; or
``(B) the purchasing or selling of transmission
services subject to the jurisdiction of the
Commission.''.
Subtitle F--Federal Coalbed Methane Regulation
SEC. 391. FEDERAL COALBED METHANE REGULATION.
Any State that, as of the date of enactment of this Act, is
included on the list of affected States established under section
1339(b) of the Energy Policy Act of 1992 (42 U.S.C. 13368(b)) shall be
removed from the list if, not later than 3 years after the date of
enactment of this Act, the State takes, or prior to that date of
enactment, has taken, any of the actions required for removal from the
list under that section.
TITLE IV--COAL
Subtitle A--Clean Coal Power Initiative
SEC. 401. AUTHORIZATION OF APPROPRIATIONS.
(a) Clean Coal Power Initiative.--There is authorized to be
appropriated to the Secretary to carry out the activities authorized by
this subtitle $200,000,000 for each of fiscal years 2006 through 2012,
to remain available until expended.
(b) Report.--Not later than March 31, 2006, the Secretary shall
submit to Congress a report that includes a 10-year plan containing--
(1) a detailed assessment of whether the aggregate
assistance levels provided under subsection (a) are the
appropriate assistance levels for the clean coal power
initiative;
(2) a detailed description of how proposals for assistance
under the clean coal power initiative will be solicited and
evaluated, including a list of all activities expected to be
undertaken;
(3) a detailed list of technical milestones for each coal
and related technology that will be pursued under the clean
coal power initiative; and
(4) a detailed description of how the clean coal power
initiative will avoid problems enumerated in Government
Accountability Office reports on the Clean Coal Technology
Program of the Department, including problems that have
resulted in unspent funds and projects that failed either
financially or scientifically.
SEC. 402. PROJECT CRITERIA.
(a) In General.--To be eligible to receive assistance under this
subtitle, a project shall advance efficiency, environmental
performance, and cost competitiveness well beyond the level of
technologies that are in commercial service or have been demonstrated
on a scale that the Secretary determines is sufficient to demonstrate
that commercial service is viable as of the date of enactment of this
Act.
(b) Technical Criteria for Clean Coal Power Initiative.--
(1) Gasification projects.--
(A) In General.--In allocating the funds made
available under section 401(a), the Secretary shall
ensure that at least 80 percent of the funds are used
only to fund projects on coal-based gasification
technologies, including--
(i) gasification combined cycle;
(ii) gasification fuel cells and turbine
combined cycle;
(iii) gasification coproduction; and
(iv) hybrid gasification and combustion.
(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary
shall periodically set technical
milestones specifying the emission and
thermal efficiency levels that coal
gasification projects under this
subtitle shall be designed, and
reasonably expected, to achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall
establish the periodic milestones so as to
achieve by the year 2020 coal gasification
projects able--
(I) to remove at least 99 percent
of sulfur dioxide;
(II) to emit not more than .05 lbs
of NO<INF>x</INF> per million Btu;
(III) to achieve at least 95
percent reductions in mercury
emissions; and
(IV) to achieve a thermal
efficiency of at least--
(aa) 50 percent for coal of
more than 9,000 Btu;
(bb) 48 percent for coal of
7,000 to 9,000 Btu; and
(cc) 46 percent for coal of
less than 7,000 Btu.
(2) Other projects.--
(A) Allocation of funds.--The Secretary shall
ensure that up to 20 percent of the funds made
available under section 401(a) are used to fund
projects other than those described in paragraph (1).
(B) Technical milestones.--
(i) Periodic determination.--
(I) In general.--The Secretary
shall periodically establish technical
milestones specifying the emission and
thermal efficiency levels that projects
funded under this paragraph shall be
designed, and reasonably expected, to
achieve.
(II) Prescriptive milestones.--The
technical milestones shall become more
prescriptive during the period of the
clean coal power initiative.
(ii) 2020 goals.--The Secretary shall set
the periodic milestones so as to achieve by the
year 2020 projects able--
(I) to remove at least 97 percent
of sulfur dioxide;
(II) to emit no more than .08 lbs
of NO<INF>x</INF> per million Btu;
(III) to achieve at least 90
percent reductions in mercury
emissions; and
(IV) to achieve a thermal
efficiency of at least--
(aa) 43 percent for coal of
more than 9,000 Btu;
(bb) 41 percent for coal of
7,000 to 9,000 Btu; and
(cc) 39 percent for coal of
less than 7,000 Btu.
(3) Consultation.--Before setting the technical milestones
under paragraphs (1)(B) and (2)(B), the Secretary shall consult
with--
(A) the Administrator of the Environmental
Protection Agency; and
(B) interested entities, including--
(i) coal producers;
(ii) industries using coal;
(iii) organizations that promote coal or
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers.
(4) Existing units.--In the case of projects at units in
existence on the date of enactment of this Act, in lieu of the
thermal efficiency requirements described in paragraphs
(1)(B)(ii)(IV) and (2)(B)(ii)(IV), the milestones shall be
designed to achieve an overall thermal design efficiency
improvement, compared to the efficiency of the unit as
operated, of not less than--
(A) 7 percent for coal of more than 9,000 Btu;
(B) 6 percent for coal of 7,000 to 9,000 Btu; or
(C) 4 percent for coal of less than 7,000 Btu.
(5) Administration.--
(A) Elevation of site.--In evaluating project
proposals to achieve thermal efficiency levels
established under paragraphs (1)(B)(i) and (2)(B)(i)
and in determining progress towards thermal efficiency
milestones under paragraphs (1)(B)(ii)(IV),
(2)(B)(ii)(IV), and (4), the Secretary shall take into
account and make adjustments for the elevation of the
site at which a project is proposed to be constructed.
(B) Applicability of milestones.--The thermal
efficiency milestones under paragraphs (1)(B)(ii)(IV),
(2)(B)(ii)(IV), and (4) shall not apply to projects
that separate and capture at least 50 percent of the
potential emissions of carbon dioxide by a facility.
(C) Permitted uses.--In carrying out this section,
the Secretary shall give high priority to projects that
include, as part of the project--
(i) the separation or capture of carbon
dioxide; or
(ii) the reduction of the demand for
natural gas if deployed.
(c) Financial Criteria.--The Secretary shall not provide financial
assistance under this subtitle for a project unless the recipient
documents to the satisfaction of the Secretary that--
(1) the recipient is financially responsible;
(2) the recipient will provide sufficient information to
the Secretary to enable the Secretary to ensure that the funds
are spent efficiently and effectively; and
(3) a market exists for the technology being demonstrated
or applied, as evidenced by statements of interest in writing
from potential purchasers of the technology.
(d) Financial Assistance.--The Secretary shall provide financial
assistance to projects that, as determined by the Secretary--
(1) meet the requirements of subsections (a), (b), and (c);
and
(2) are likely--
(A) to achieve overall cost reductions in the use
of coal to generate useful forms of energy or chemical
feedstocks;
(B) to improve the competitiveness of coal among
various forms of energy in order to maintain a
diversity of fuel choices in the United States to meet
electricity generation requirements; and
(C) to demonstrate methods and equipment that are
applicable to 25 percent of the electricity generating
facilities, using various types of coal, that use coal
as the primary feedstock as of the date of enactment of
this Act.
(e) Cost-Sharing.--In carrying out this subtitle, the Secretary
shall require cost sharing in accordance with section 1002.
(f) Scheduled Completion of Selected Projects.--
(1) In general.--In selecting a project for financial
assistance under this section, the Secretary shall establish a
reasonable period of time during which the owner or operator of
the project shall complete the construction or demonstration
phase of the project, as the Secretary determines to be
appropriate.
(2) Condition of financial assistance.--The Secretary shall
require as a condition of receipt of any financial assistance
under this subtitle that the recipient of the assistance enter
into an agreement with the Secretary not to request an
extension of the time period established for the project by the
Secretary under paragraph (1).
(3) Extension of time period.--
(A) In general.--Subject to subparagraph (B), the
Secretary may extend the time period established under
paragraph (1) if the Secretary determines, in the sole
discretion of the Secretary, that the owner or operator
of the project cannot complete the construction or
demonstration phase of the project within the time
period due to circumstances beyond the control of the
owner or operator.
(B) Limitation.--The Secretary shall not extend a
time period under subparagraph (A) by more than 4
years.
(g) Fee Title.--The Secretary may vest fee title or other property
interests acquired under cost-share clean coal power initiative
agreements under this subtitle in any entity, including the United
States.
(h) Data Protection.--For a period not exceeding 5 years after
completion of the operations phase of a cooperative agreement, the
Secretary may provide appropriate protections (including exemptions
from subchapter II of chapter 5 of title 5, United States Code) against
the dissemination of information that--
(1) results from demonstration activities carried out under
the clean coal power initiative program; and
(2) would be a trade secret or commercial or financial
information that is privileged or confidential if the
information had been obtained from and first produced by a non-
Federal party participating in a clean coal power initiative
project.
(i) Applicability.--No technology, or level of emission reduction,
solely by reason of the use of the technology, or the achievement of
the emission reduction, by 1 or more facilities receiving assistance
under this Act, shall be considered to be--
(1) adequately demonstrated for purposes of section 111 of
the Clean Air Act (42 U.S.C. 7411);
(2) achievable for purposes of section 169 of that Act (42
U.S.C. 7479); or
(3) achievable in practice for purposes of section 171 of
that Act (42 U.S.C. 7501).
SEC. 403. REPORT.
Not later than 1 year after the date of enactment of this Act, and
once every 2 years thereafter through 2012, the Secretary, in
consultation with other appropriate Federal agencies, shall submit to
Congress a report describing--
(1)(A) the technical milestones described in section 402;
and
(B) how those milestones ensure progress toward meeting the
requirements of subsections (b)(1)(B) and (b)(2)(B) of section
402; and
(2) the status of projects that receive assistance under
this subtitle.
SEC. 404. CLEAN COAL CENTERS OF EXCELLENCE.
(a) In General.--As part of the clean coal power initiative, the
Secretary shall award competitive, merit-based grants to institutions
of higher education for the establishment of centers of excellence for
energy systems of the future.
(b) Basis for Grants.-- The Secretary shall award grants under this
section to institutions of higher education that show the greatest
potential for advancing new clean coal technologies.
SEC. 405. INTEGRATED COAL/RENEWABLE ENERGY SYSTEM.
(a) In General.--Subject to the availability of appropriations, the
Secretary may provide loan guarantees for a project to produce energy
from coal of less than 7,000 Btu/lb using appropriate advanced
integrated gasification combined cycle technology, including repowering
of existing facilities, that--
(1) is combined with wind and other renewable sources;
(2) minimizes and offers the potential to sequester carbon
dioxide emissions; and
(3) provides a ready source of hydrogen for near-site fuel
cell demonstrations.
(b) Requirements.--The facility--
(1) may be built in stages;
(2) shall have a combined output of at least 200 megawatts
at successively more competitive rates; and
(3) shall be located in the Upper Great Plains.
(c) Technical Criteria.--Technical criteria described in section
402(b) shall apply to the facility.
(d) Federal Cost Share.--The Federal cost share for the facility
shall not exceed 50 percent.
(e) Investment Tax Credits.--
(1) In general.--The loan guarantees provided under this
section do not preclude the facility from receiving an
allocation for investment tax credits under section 48A of the
Internal Revenue Code of 1986.
(2) Other funding.--Use of the investment tax credit
described in paragraph (1) does not prohibit the use of other
clean coal program funding.
SEC. 406. LOAN TO PLACE ALASKA CLEAN COAL TECHNOLOGY FACILITY IN
SERVICE.
(a) Definitions.--In this section:
(1) Borrower.--The term ``borrower'' means the owner of the
clean coal technology plant.
(2) Clean coal technology plant.--The term ``clean coal
technology plant'' means the plant located near Healy, Alaska,
constructed under Department cooperative agreement number DE-
FC-22-91PC90544.
(3) Cost of a direct loan.--The term ``cost of a direct
loan'' has the meaning given the term in section 502(5)(B) of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(B)).
(b) Authorization.--Subject to subsection (c), the Secretary shall
use amounts made available under subsection (e) to provide the cost of
a direct loan to the borrower for purposes of placing the clean coal
technology plant into reliable operation for the generation of
electricity.
(c) Requirements.--
(1) Maximum loan amount.--The amount of the direct loan
provided under subsection (b) shall not exceed $80,000,000.
(2) Determinations by secretary.--Before providing the
direct loan to the borrower under subsection (b), the Secretary
shall determine that--
(A) the plan of the borrower for placing the clean
coal technology plant in reliable operation has a
reasonable prospect of success;
(B) the amount of the loan (when combined with
amounts available to the borrower from other sources)
will be sufficient to carry out the project; and
(C) there is a reasonable prospect that the
borrower will repay the principal and interest on the
loan.
(3) Interest; term.--The direct loan provided under
subsection (b) shall bear interest at a rate and for a term
that the Secretary determines appropriate, after consultation
with the Secretary of the Treasury, taking into account the
needs and capacities of the borrower and the prevailing rate of
interest for similar loans made by public and private lenders.
(4) Additional terms and conditions.--The Secretary may
require any other terms and conditions that the Secretary
determines to be appropriate.
(d) Use of Payments.--The Secretary shall retain any payments of
principal and interest on the direct loan provided under subsection (b)
to support energy research and development activities, to remain
available until expended, subject to any other conditions in an
applicable appropriations Act.
(e) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to provide the cost of a direct
loan under subsection (b).
SEC. 407. WESTERN INTEGRATED COAL GASIFICATION DEMONSTRATION PROJECT.
(a) In General.--Subject to the availability of appropriations, the
Secretary shall carry out a project to demonstrate production of energy
from coal mined in the western United States using integrated
gasification combined cycle technology (referred to in this section as
the ``demonstration project'').
(b) Components.--The demonstration project--
(i) may include repowering of existing facilities;
(ii) shall be designed to demonstrate the ability to use
coal with an energy content of not more than 9,000 Btu/lb.; and
(iii) shall be capable of removing and sequestering carbon
dioxide emissions.
(c) All Types of Western Coals.--Notwithstanding the foregoing, and
to the extent economically feasible, the demonstration project shall
also be designed to demonstrate the ability to use a variety of types
of coal (including subbituminous and bituminous coal with an energy
content of up to 13,000 Btu/lb.) mined in the western United States.
(d) Location.--The demonstration project shall be located in a
western State at an altitude of greater than 4,000 feet above sea
level.
(e) Cost Sharing.--The Federal share of the cost of the
demonstration project shall be determined in accordance with section
1002.
(f) Loan Guarantees.--Notwithstanding title XIV, the demonstration
project shall not be eligible for Federal loan guarantees.
Subtitle B--Federal Coal Leases
SEC. 411. REPEAL OF THE 160-ACRE LIMITATION FOR COAL LEASES.
Section 3 of the Mineral Leasing Act (30 U.S.C. 203) is amended--
(1) in the first sentence, by striking ``Any person'' and
inserting the following: ``(a)(1) Except as provided in
paragraph (3), on a finding by the Secretary under paragraph
(2), any person'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:
``(b) The Secretary'';
(3) in the third sentence, by striking ``The minimum'' and
inserting the following:
``(c) The minimum'';
(4) in subsection (a) (as designated by paragraph (1))--
(A) by striking ``upon'' and all that follows and
inserting the following: ``secure modifications of the
original coal lease by including additional coal lands
or coal deposits contiguous or cornering to those
embraced in the lease.''; and
(B) by adding at the end the following:
``(2) A finding referred to in paragraph (1) is a finding by the
Secretary that the modifications--
``(A) would be in the interest of the United States;
``(B) would not displace a competitive interest in the
lands; and
``(C) would not include lands or deposits that can be
developed as part of another potential or existing operation.
``(3) In no case shall the total area added by modifications to an
existing coal lease under paragraph (1)--
``(A) exceed 320 acres; or
``(B) add acreage larger than that in the original
lease.''.
SEC. 412. MINING PLANS.
Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 202a(2)) is
amended--
(1) by inserting ``(A)'' after ``(2)''; and
(2) by adding at the end the following:
``(B) The Secretary may establish a period of more than 40
years if the Secretary determines that--
``(i) the longer period will ensure the maximum
economic recovery of a coal deposit; or
``(ii) the longer period is in the interest of the
orderly, efficient, or economic development of a coal
resource.''.
SEC. 413. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.
Section 7(b) of the Mineral Leasing Act (30 U.S.C. 207(b)) is
amended--
(1) in the first sentence, by striking ``Each lease'' and
inserting the following: ``(1) Each lease'';
(2) in the second sentence, by striking ``The Secretary''
and inserting the following:
``(2) The Secretary'';
(3) in the third sentence, by striking ``Such advance
royalties'' and inserting the following:
``(3) Advance royalties described in paragraph (2)'';
(4) in the seventh sentence, by striking ``The Secretary''
and inserting the following:
``(6) The Secretary'';
(5) in the last sentence, by striking ``Nothing'' and
inserting the following:
``(7) Nothing'';
(6) by striking the fourth, fifth, and sixth sentences; and
(7) by inserting after paragraph (3) (as designated by
paragraph (3)) the following:
``(4) The aggregate number of years during the period of any lease
for which advance royalties may be accepted in lieu of the condition of
continued operation shall not exceed 20 years.
``(5) The amount of any production royalty paid for any year shall
be reduced (but not below 0) by the amount of any advance royalties
paid under a lease described in paragraph (4) to the extent that the
advance royalties have not been used to reduce production royalties for
a prior year.''.
SEC. 414. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL LEASE
OPERATION AND RECLAMATION PLAN.
Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) is
amended by striking ``and not later than three years after a lease is
issued,''.
SEC. 415. DEPARTMENT OF ENERGY TRANSPORTATION FUELS FROM ILLINOIS BASIN
COAL.
(a) In General.--The Secretary shall carry out a program to
evaluate the commercial and technical viability of advanced
technologies for the production of Fischer-Tropsch transportation
fuels, and other transportation fuels, manufactured from Illinois basin
coal, including the capital modification of existing facilities and the
construction of testing facilities under subsection (b).
(b) Facilities.--For the purpose of evaluating the commercial and
technical viability of different processes for producing Fischer-
Tropsch transportation fuels, and other transportation fuels, from
Illinois basin coal, the Secretary shall support the use and capital
modification of existing facilities and the construction of new
facilities at--
(1) Southern Illinois University Coal Research Center;
(2) University of Kentucky Center for Applied Energy
Research; and
(3) Energy Center at Purdue University.
(c) Gasification Products Test Center.--In conjunction with the
activities described in subsections (a) and (b), the Secretary shall
construct a test center to evaluate and confirm liquid and gas products
from syngas catalysis in order that the system has an output of at
least 500 gallons of Fischer-Tropsch transportation fuel per day in a
24-hour operation.
(d) Milestones.--
(1) Selection of processes.--Not later than 180 days after
the date of enactment of this Act, the Secretary shall select
processes for evaluating the commercial and technical viability
of different processes of producing Fischer-Tropsch
transportation fuels, and other transportation fuels, from
Illinois basin coal.
(2) Agreements.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall offer to enter into
agreements--
(A) to carry out the activities described in this
section, at the facilities described in subsection (b);
and
(B) for the capital modifications or construction
of the facilities at the locations described in
subsection (b).
(3) Evaluations.--Not later than 3 years after the date of
enactment of the Act, the Secretary shall begin, at the
facilities described in subsection (b), evaluation of the
technical and commercial viability of different processes of
producing Fischer-Tropsch transportation fuels, and other
transportation fuels, from Illinois basin coal.
(4) Construction of facilities.--
(A) In general.--The Secretary shall construct the
facilities described in subsection (b) at the lowest
cost practicable.
(B) Grants or agreements.--The Secretary may make
grants or enter into agreements or contracts with the
institutions of higher education described in
subsection (b).
(e) Cost Sharing.--The cost of making grants under this section
shall be shared in accordance with section 1002.
(f) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $85,000,000 for the period of
fiscal years 2006 through 2010.
SEC. 416. APPLICATION OF AMENDMENTS.
(a) In General.--The amendments made by this subtitle apply to any
coal lease issued on or after the date of enactment of this Act.
(b) Coal Leases Issued Before Date of Enactment.--With respect to
any coal lease issued before the date of enactment of this Act, the
amendments made by this subtitle apply--
(1) on the date of readjustment of the lease as provided
under section 7(a) of the Mineral Leasing Act (30 U.S.C. 207);
or
(2) on request by the lessee, prior to that date.
TITLE V--INDIAN ENERGY
SEC. 501. SHORT TITLE.
This title may be cited as the ``Indian Tribal Energy Development
and Self-Determination Act of 2005''.
SEC. 502. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.
(a) In General.--Title II of the Department of Energy Organization
Act (42 U.S.C. 7131 et seq.) is amended by adding at the end the
following:
``office of indian energy policy and programs
``Sec. 217. (a) Establishment.--
``(1) There is established within the Department an Office
of Indian Energy Policy and Programs (referred to in this
section as the `Office').
``(2) The Office shall be headed by a Director, to be
appointed by the Secretary and compensated at a rate equal to
that of level IV of the Executive Schedule under section 5315
of title 5, United States Code.
``(b) Duties of Director.--The Director, in accordance with Federal
policies promoting Indian self-determination and the purposes of this
Act, shall provide, direct, foster, coordinate, and implement energy
planning, education, management, conservation, and delivery programs of
the Department that--
``(1) promote Indian tribal energy development, efficiency,
and use;
``(2) reduce or stabilize energy costs;
``(3) enhance and strengthen Indian tribal energy and
economic infrastructure relating to natural resource
development and electrification; and
``(4) bring electrical power and service to Indian land and
the homes of tribal members that are--
``(A) located on Indian land; or
``(B) acquired, constructed, or improved (in whole
or in part) with Federal funds.''.
(b) Conforming Amendments.--
(1) The table of contents of the Department of Energy
Organization Act (42 U.S.C. prec. 7101) is amended--
(A) in the item relating to section 209, by
striking ``Section'' and inserting ``Sec.''; and
(B) by striking the items relating to sections 213
through 216 and inserting the following:
``Sec. 213. Establishment of policy for
National Nuclear Security
Administration.
``Sec. 214. Establishment of security,
counterintelligence, and
intelligence policies.
``Sec. 215. Office of
Counterintelligence.
``Sec. 216. Office of Intelligence.
``Sec. 217. Office of Indian Energy
Policy and Programs.''.
(2) Section 5315 of title 5, United States Code, is amended
by inserting ``Director, Office of Indian Energy Policy and
Programs, Department of Energy.'' after ``Inspector General,
Department of Energy.''.
SEC. 503. INDIAN ENERGY.
(a) In General.--Title XXVI of the Energy Policy Act of 1992 (25
U.S.C. 3501 et seq.) is amended to read as follows:
``TITLE XXVI--INDIAN ENERGY
``SEC. 2601. DEFINITIONS.
``In this title:
``(1) The term `Director' means the Director of the Office
of Indian Energy Policy and Programs, Department of Energy.
``(2) The term `Indian land' means--
``(A) any land located within the boundaries of an
Indian reservation, pueblo, or rancheria;
``(B) any land not located within the boundaries of
an Indian reservation, pueblo, or rancheria, the title
to which is held--
``(i) in trust by the United States for the
benefit of an Indian tribe or an individual
Indian;
``(ii) by an Indian tribe or an individual
Indian, subject to restriction against
alienation under laws of the United States; or
``(iii) by a dependent Indian community;
and
``(C) land that is owned by an Indian tribe and was
conveyed by the United States to a Native Corporation
pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq.), or that was conveyed by the
United States to a Native Corporation in exchange for
such land.
``(3) The term `Indian reservation' includes--
``(A) an Indian reservation in existence in any
State as of the date of enactment of this paragraph;
``(B) a public domain Indian allotment; and
``(C) a dependent Indian community located within
the borders of the United States, regardless of whether
the community is located--
``(i) on original or acquired territory of
the community; or
``(ii) within or outside the boundaries of
any particular State.
``(4)(A) The term `Indian tribe' has the meaning given the
term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b).
``(B) For the purpose of paragraph (12) and sections
2603(b)(1)(C) and 2604, the term `Indian tribe' does not
include any Native Corporation.
``(5) The term `integration of energy resources' means any
project or activity that promotes the location and operation of
a facility (including any pipeline, gathering system,
transportation system or facility, or electric transmission or
distribution facility) on or near Indian land to process,
refine, generate electricity from, or otherwise develop energy
resources on, Indian land.
``(6) The term `Native Corporation' has the meaning given
the term in section 3 of the Alaska Native Claims Settlement
Act (43 U.S.C. 1602).
``(7) The term `organization' means a partnership, joint
venture, limited liability company, or other unincorporated
association or entity that is established to develop Indian
energy resources.
``(8) The term `Program' means the Indian energy resource
development program established under section 2602(a).
``(9) The term `Secretary' means the Secretary of the
Interior.
``(10) The term `sequestration' means the long-term
separation, isolation, or removal of greenhouse gases from the
atmosphere, including through a biological or geologic method
such as reforestation or an underground reservoir.
``(11) The term `tribal energy resource development
organization' means an organization of 2 or more entities, at
least 1 of which is an Indian tribe, that has the written
consent of the governing bodies of all Indian tribes
participating in the organization to apply for a grant, loan,
or other assistance under section 2602.
``(12) The term `tribal land' means any land or interests
in land owned by any Indian tribe, title to which is held in
trust by the United States, or is subject to a restriction
against alienation under laws of the United States.
``SEC. 2602. INDIAN TRIBAL ENERGY RESOURCE DEVELOPMENT.
``(a) Department of the Interior Program.--
``(1) To assist Indian tribes in the development of energy
resources and further the goal of Indian self-determination,
the Secretary shall establish and implement an Indian energy
resource development program to assist consenting Indian tribes
and tribal energy resource development organizations in
achieving the purposes of this title.
``(2) In carrying out the Program, the Secretary shall--
``(A) provide development grants to Indian tribes
and tribal energy resource development organizations
for use in developing or obtaining the managerial and
technical capacity needed to develop energy resources
on Indian land, and to properly account for resulting
energy production and revenues;
``(B) provide grants to Indian tribes and tribal
energy resource development organizations for use in
carrying out projects to promote the integration of
energy resources, and to process, use, or develop those
energy resources, on Indian land;
``(C) provide low-interest loans to Indian tribes
and tribal energy resource development organizations
for use in the promotion of energy resource development
on Indian land and integration of energy resources; and
``(D) provide grants and technical assistance to an
appropriate tribal environmental organization, as
determined by the Secretary, that represents multiple
Indian tribes to establish a national resource center
to develop tribal capacity to establish and carry out
tribal environmental programs in support of energy-
related programs and activities under this title,
including--
``(i) training programs for tribal
environmental officials, program managers, and
other governmental representatives;
``(ii) the development of model
environmental policies and tribal laws,
including tribal environmental review codes,
and the creation and maintenance of a
clearinghouse of best environmental management
practices; and
``(iii) recommended standards for reviewing
the implementation of tribal environmental laws
and policies within tribal judicial or other
tribal appeals systems.
``(3) There are authorized to be appropriated to carry out
this subsection such sums as are necessary for each of fiscal
years 2006 through 2016.
``(b) Department of Energy Indian Energy Education Planning and
Management Assistance Program.--
``(1) The Director shall establish programs to assist
consenting Indian tribes in meeting energy education, research
and development, planning, and management needs.
``(2) In carrying out this subsection, the Director may
provide grants, on a competitive basis, to an Indian tribe or
tribal energy resource development organization for use in
carrying out--
``(A) energy, energy efficiency, and energy
conservation programs;
``(B) studies and other activities supporting
tribal acquisitions of energy supplies, services, and
facilities, including the creation of tribal utilities
to assist in securing electricity to promote
electrification of homes and businesses on Indian land;
``(C) planning, construction, development,
operation, maintenance, and improvement of tribal
electrical generation, transmission, and distribution
facilities located on Indian land; and
``(D) development, construction, and
interconnection of electric power transmission
facilities located on Indian land with other electric
transmission facilities.
``(3)(A) The Director shall develop a program to support
and implement research projects that provide Indian tribes with
opportunities to participate in carbon sequestration practices
on Indian land, including--
``(i) geologic sequestration;
``(ii) forest sequestration;
``(iii) agricultural sequestration; and
``(iv) any other sequestration opportunities the
Director considers to be appropriate.
``(B) The activities carried out under subparagraph (A)
shall be--
``(i) coordinated with other carbon sequestration
research and development programs conducted by the
Secretary of Energy;
``(ii) conducted to determine methods consistent
with existing standardized measurement protocols to
account and report the quantity of carbon dioxide or
other greenhouse gases sequestered in projects that may
be implemented on tribal land; and
``(iii) reviewed periodically to collect and
distribute to Indian tribes information on carbon
sequestration practices that will increase the
sequestration of carbon without threatening the social
and economic well-being of Indian tribes.
``(4)(A) The Director, in consultation with Indian tribes,
may develop a formula for providing grants under this
subsection.
``(B) In providing a grant under this subsection, the
Director shall give priority to any application received from
an Indian tribe with inadequate electric service (as determined
by the Director).
``(C) In providing a grant under this subsection for an
activity to provide, or expand the provision of, electricity on
Indian land, the Director shall encourage cooperative
arrangements between Indian tribes and utilities that provide
service to Indian tribes, as the Director determines to be
appropriate.
``(5) The Secretary of Energy may issue such regulations as
the Secretary determines to be necessary to carry out this
subsection.
``(6) There is authorized to be appropriated to carry out
this subsection $20,000,000 for each of fiscal years 2006
through 2016.
``(c) Department of Energy Loan Guarantee Program.--
``(1) Subject to paragraphs (2) and (4), the Secretary of
Energy may provide loan guarantees (as defined in section 502
of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) for
an amount equal to not more than 90 percent of the unpaid
principal and interest due on any loan made to an Indian tribe
for energy development.
``(2)(A) In evaluating energy development proposals for
which the Secretary of Energy may provide a loan guarantee
under paragraph (1), the Secretary of Energy shall give
priority to any project that uses a new technology, such as
coal gasification, carbon capture and sequestration, or
renewable energy-based electricity generation, if competing
proposals are similar with respect to the level at which the
proposals meet or exceed the criteria established by the
Secretary of Energy for the loan guarantee program.
``(B) In providing a loan guarantee under this subsection
for an activity to provide, or expand the provision of,
electricity on Indian land, the Secretary of Energy shall
encourage cooperative arrangements between Indian tribes and
utilities that provide service to Indian tribes, as the
Secretary determines to be appropriate.
``(3) A loan guarantee under this subsection shall be made
by--
``(A) a financial institution subject to
examination by the Secretary of Energy; or
``(B) an Indian tribe, from funds of the Indian
tribe.
``(4) The aggregate outstanding amount guaranteed by the
Secretary of Energy at any time under this subsection shall not
exceed $2,000,000,000.
``(5) The Secretary of Energy may issue such regulations as
the Secretary of Energy determines are necessary to carry out
this subsection.
``(6) There are authorized to be appropriated such sums as
are necessary to carry out this subsection, to remain available
until expended.
``(7) Not later than 1 year after the date of enactment of
this section, the Secretary of Energy shall submit to Congress
a report on the financing requirements of Indian tribes for
energy development on Indian land.
``(d) Preference.--
``(1) In purchasing electricity or any other energy product
or byproduct, a Federal agency or department may give
preference to an energy and resource production enterprise,
partnership, consortium, corporation, or other type of business
organization the majority of the interest in which is owned and
controlled by 1 or more Indian tribes.
``(2) In carrying out this subsection, a Federal agency or
department shall not--
``(A) pay more than the prevailing market price for
an energy product or byproduct; or
``(B) obtain less than prevailing market terms and
conditions.
``SEC. 2603. INDIAN TRIBAL ENERGY RESOURCE REGULATION.
``(a) Grants.--The Secretary may provide to Indian tribes, on an
annual basis, grants for use in accordance with subsection (b).
``(b) Use of Funds.--Funds from a grant provided under this section
may be used--
``(1)(A) by an Indian tribe for the development of a tribal
energy resource inventory or tribal energy resource on Indian
land;
``(B) by an Indian tribe for the development of a
feasibility study or other report necessary to the development
of energy resources on Indian land;
``(C) by an Indian tribe (other than an Indian Tribe in the
State of Alaska, except the Metlakatla Indian Community) for--
``(i) the development and enforcement of tribal
laws (including regulations) relating to tribal energy
resource development; and
``(ii) the development of technical infrastructure
to protect the environment under applicable law; or
``(D) by a Native Corporation for the development and
implementation of corporate policies and the development of
technical infrastructure to protect the environment under
applicable law; and
``(2) by an Indian tribe for the training of employees
that--
``(A) are engaged in the development of energy
resources on Indian land; or
``(B) are responsible for protecting the
environment.
``(c) Other Assistance.--
``(1) In carrying out the obligations of the United States
under this title, the Secretary shall ensure, to the maximum
extent practicable and to the extent of available resources,
that on the request of an Indian tribe, the Indian tribe shall
have available scientific and technical information and
expertise, for use in the regulation, development, and
management of energy resources of the Indian tribe on Indian
land.
``(2) The Secretary may carry out paragraph (1)--
``(A) directly, through the use of Federal
officials; or
``(B) indirectly, by providing financial assistance
to an Indian tribe to secure independent assistance.
``SEC. 2604. LEASES, BUSINESS AGREEMENTS, AND RIGHTS-OF-WAY INVOLVING
ENERGY DEVELOPMENT OR TRANSMISSION.
``(a) Leases and Business Agreements.--In accordance with this
section--
``(1) an Indian tribe may, at the discretion of the Indian
tribe, enter into a lease or business agreement for the purpose
of energy resource development on tribal land, including a
lease or business agreement for--
``(A) exploration for, extraction of, processing
of, or other development of the energy mineral
resources of the Indian tribe located on tribal land;
or
``(B) construction or operation of--
``(i) an electric generation, transmission,
or distribution facility located on tribal
land; or
``(ii) a facility to process or refine
energy resources developed on tribal land; and
``(2) a lease or business agreement described in paragraph
(1) shall not require the approval of the Secretary under
section 2103 of the Revised Statutes (25 U.S.C. 81), or any
other provision of law, if--
``(A) the lease or business agreement is executed
pursuant to a tribal energy resource agreement approved
by the Secretary under subsection (e);
``(B) the term of the lease or business agreement
does not exceed--
``(i) 30 years; or
``(ii) in the case of a lease for the
production of oil resources, gas resources, or
both, 10 years and as long thereafter as oil or
gas is produced in paying quantities; and
``(C) the Indian tribe has entered into a tribal
energy resource agreement with the Secretary, as
described in subsection (e), relating to the
development of energy resources on tribal land
(including the periodic review and evaluation of the
activities of the Indian tribe under the agreement, to
be conducted pursuant to subsection (e)(2)(D)(i)).
``(b) Rights-of-Way for Pipelines or Electric Transmission or
Distribution Lines.--An Indian tribe may grant a right-of-way over
tribal land for a pipeline or an electric transmission or distribution
line without approval by the Secretary if--
``(1) the right-of-way is executed in accordance with a
tribal energy resource agreement approved by the Secretary
under subsection (e);
``(2) the term of the right-of-way does not exceed 30
years;
``(3) the pipeline or electric transmission or distribution
line serves--
``(A) an electric generation, transmission, or
distribution facility located on tribal land; or
``(B) a facility located on tribal land that
processes or refines energy resources developed on
tribal land; and
``(4) the Indian tribe has entered into a tribal energy
resource agreement with the Secretary, as described in
subsection (e), relating to the development of energy resources
on tribal land (including the periodic review and evaluation of
the activities of the Indian tribe under an agreement described
in subparagraphs (D) and (E) of subsection (e)(2)).
``(c) Renewals.--A lease or business agreement entered into, or a
right-of-way granted, by an Indian tribe under this section may be
renewed at the discretion of the Indian tribe in accordance with this
section.
``(d) Validity.--No lease, business agreement, or right-of-way
relating to the development of tribal energy resources under this
section shall be valid unless the lease, business agreement, or right-
of-way is authorized by a tribal energy resource agreement approved by
the Secretary under subsection (e)(2).
``(e) Tribal Energy Resource Agreements.--
``(1) On the date on which regulations are promulgated
under paragraph (8), an Indian tribe may submit to the
Secretary for approval a tribal energy resource agreement
governing leases, business agreements, and rights-of-way under
this section.
``(2)(A) Not later than 1 year after the date on which the
Secretary receives a tribal energy resource agreement from an
Indian tribe under paragraph (1), or not later than 60 days
after the Secretary receives a revised tribal energy resource
agreement from an Indian tribe under paragraph (4)(C) (or a
later date, as agreed to by the Secretary and the Indian
tribe), the Secretary shall approve or disapprove the tribal
energy resource agreement.
``(B) The Secretary shall approve a tribal energy resource
agreement submitted under paragraph (1) if--
``(i) the Secretary determines that the Indian
tribe has demonstrated that the Indian tribe has
sufficient capacity to regulate the development of
energy resources of the Indian tribe;
``(ii) the tribal energy resource agreement
includes provisions required under subparagraph (D);
and
``(iii) the tribal energy resource agreement
includes provisions that, with respect to a lease,
business agreement, or right-of-way under this
section--
``(I) ensure the acquisition of necessary
information from the applicant for the lease,
business agreement, or right-of-way;
``(II) address the term of the lease or
business agreement or the term of conveyance of
the right-of-way;
``(III) address amendments and renewals;
``(IV) address the economic return to the
Indian tribe under leases, business agreements,
and rights-of-way;
``(V) address technical or other relevant
requirements;
``(VI) establish requirements for
environmental review in accordance with
subparagraph (C);
``(VII) ensure compliance with all
applicable environmental laws, including a
requirement that each lease, business
agreement, and right-of-way state that the
lessee, operator, or right-of-way grantee shall
comply with all such laws;
``(VIII) identify final approval authority;
``(IX) provide for public notification of
final approvals;
``(X) establish a process for consultation
with any affected States regarding off-
reservation impacts, if any, identified under
subparagraph (C)(i);
``(XI) describe the remedies for breach of
the lease, business agreement, or right-of-way;
``(XII) require each lease, business
agreement, and right-of-way to include a
statement that, if any of its provisions
violates an express term or requirement of the
tribal energy resource agreement pursuant to
which the lease, business agreement, or right-
of-way was executed--
``(aa) the provision shall be null
and void; and
``(bb) if the Secretary determines
the provision to be material, the
Secretary may suspend or rescind the
lease, business agreement, or right-of-
way or take other appropriate action
that the Secretary determines to be in
the best interest of the Indian tribe;
``(XIII) require each lease, business
agreement, and right-of-way to provide that it
will become effective on the date on which a
copy of the executed lease, business agreement,
or right-of-way is delivered to the Secretary
in accordance with regulations promulgated
under paragraph (8);
``(XIV) include citations to tribal laws,
regulations, or procedures, if any, that set
out tribal remedies that must be exhausted
before a petition may be submitted to the
Secretary under paragraph (7)(B);
``(XV) specify the financial assistance, if
any, to be provided by the Secretary to the
Indian tribe to assist in implementation of the
tribal energy resource agreement, including
environmental review of individual projects;
and
``(XVI) in accordance with the regulations
promulgated by the Secretary under paragraph
(8), require that the Indian tribe, as soon as
practicable after receipt of a notice by the
Indian tribe, give written notice to the
Secretary of--
``(aa) any breach or other
violation by another party of any
provision in a lease, business
agreement, or right-of-way entered into
under the tribal energy resource
agreement; and
``(bb) any activity or occurrence
under a lease, business agreement, or
right-of-way that constitutes a
violation of Federal or tribal
environmental laws.
``(C) Tribal energy resource agreements submitted
under paragraph (1) shall establish, and include
provisions to ensure compliance with, an environmental
review process that, with respect to a lease, business
agreement, or right-of-way under this section, provides
for, at a minimum--
``(i) the identification and evaluation of
all significant environmental effects (as
compared to a no-action alternative), including
effects on cultural resources;
``(ii) the identification of proposed
mitigation measures, if any, and incorporation
of the mitigation measures into the lease,
business agreement, or right-of-way;
``(iii) a process for ensuring that--
``(I) the public is informed of,
and has an opportunity to comment on,
the environmental impacts of the
proposed action; and
``(II) responses to relevant and
substantive comments are provided,
before tribal approval of the lease,
business agreement, or right-of-way;
``(iv) sufficient administrative support
and technical capability to carry out the
environmental review process; and
``(v) oversight by the Indian tribe of
energy development activities by any other
party under any lease, business agreement, or
right-of-way entered into pursuant to the
tribal energy resource agreement, to determine
whether the activities are in compliance with
the tribal energy resource agreement and
applicable Federal environmental laws.
``(D) A tribal energy resource agreement between
the Secretary and an Indian tribe under this subsection
shall include--
``(i) provisions requiring the Secretary to
conduct a periodic review and evaluation to
monitor the performance of the activities of
the Indian tribe associated with the
development of energy resources under the
tribal energy resource agreement; and
``(ii) if a periodic review and evaluation,
or an investigation, by the Secretary of any
breach or violation described in a notice
provided by the Indian tribe to the Secretary
in accordance with subparagraph (B)(iii)(XVI),
results in a finding by the Secretary of
imminent jeopardy to a physical trust asset
arising from a violation of the tribal energy
resource agreement or applicable Federal laws,
provisions authorizing the Secretary to take
actions determined by the Secretary to be
necessary to protect the asset, including
reassumption of responsibility for activities
associated with the development of energy
resources on tribal land until the violation
and any condition that caused the jeopardy are
corrected.
``(E) Periodic review and evaluation under
subparagraph (D) shall be conducted on an annual basis,
except that, after the third annual review and
evaluation, the Secretary and the Indian tribe may
mutually agree to amend the tribal energy resource
agreement to authorize the review and evaluation under
subparagraph (D) to be conducted once every 2 years.
``(3) The Secretary shall provide notice and opportunity
for public comment on tribal energy resource agreements
submitted for approval under paragraph (1).
``(4) If the Secretary disapproves a tribal energy resource
agreement submitted by an Indian tribe under paragraph (1), the
Secretary shall, not later than 10 days after the date of
disapproval--
``(A) notify the Indian tribe in writing of the
basis for the disapproval;
``(B) identify what changes or other actions are
required to address the concerns of the Secretary; and
``(C) provide the Indian tribe with an opportunity
to revise and resubmit the tribal energy resource
agreement.
``(5) If an Indian tribe executes a lease or business
agreement, or grants a right-of-way, in accordance with a
tribal energy resource agreement approved under this
subsection, the Indian tribe shall, in accordance with the
process and requirements under regulations promulgated under
paragraph (8), provide to the Secretary--
``(A) a copy of the lease, business agreement, or
right-of-way document (including all amendments to and
renewals of the document); and
``(B) in the case of a tribal energy resource
agreement or a lease, business agreement, or right-of-
way that permits payments to be made directly to the
Indian tribe, information and documentation of those
payments sufficient to enable the Secretary to
discharge the trust responsibility of the United States
to enforce the terms of, and protect the rights of the
Indian tribe under, the lease, business agreement, or
right-of-way.
``(6)(A) In carrying out this section, the Secretary
shall--
``(i) act in accordance with the trust
responsibility of the United States relating to mineral
and other trust resources; and
``(ii) act in good faith and in the best interests
of the Indian tribes.
``(B) Subject to the provisions of subsections (a)(2), (b),
and (c) waiving the requirement of Secretarial approval of
leases, business agreements, and rights-of-way executed
pursuant to tribal energy resource agreements approved under
this section, and the provisions of subparagraph (D), nothing
in this section shall absolve the United States from any
responsibility to Indians or Indian tribes, including, but not
limited to, those which derive from the trust relationship or
from any treaties, statutes, and other laws of the United
States, Executive Orders, or agreements between the United
States and any Indian tribe.
``(C) The Secretary shall continue to fulfill the trust
obligation of the United States to ensure that the rights and
interests of an Indian tribe are protected if--
``(i) any other party to a lease, business
agreement, or right-of-way violates any applicable
Federal law or the terms of any lease, business
agreement, or right-of-way under this section; or
``(ii) any provision in a lease, business
agreement, or right-of-way violates the tribal energy
resource agreement pursuant to which the lease,
business agreement, or right-of-way was executed.
``(D)(i) In this subparagraph, the term `negotiated term'
means any term or provision that is negotiated by an Indian
tribe and any other party to a lease, business agreement, or
right-of-way entered into pursuant to an approved tribal energy
resource agreement.
``(ii) Notwithstanding subparagraph (B), the United States
shall not be liable to any party (including any Indian tribe)
for any negotiated term of, or any loss resulting from the
negotiated terms of, a lease, business agreement, or right-of-
way executed pursuant to and in accordance with a tribal energy
resource agreement approved by the Secretary under paragraph
(2).
``(7)(A) In this paragraph, the term `interested party'
means any person (including an entity) that has demonstrated
that an interest of the person has sustained, or will sustain,
an adverse environmental impact as a result of the failure of
an Indian tribe to comply with a tribal energy resource
agreement of the Indian tribe approved by the Secretary under
paragraph (2).
``(B) After exhaustion of any tribal remedy, and in
accordance with regulations promulgated by the Secretary under
paragraph (8), an interested party may submit to the Secretary
a petition to review the compliance by an Indian tribe with a
tribal energy resource agreement of the Indian tribe approved
by the Secretary under paragraph (2).
``(C)(i) Not later than 20 days after the date on which the
Secretary receives a petition under subparagraph (B), the
Secretary shall--
``(I) provide to the Indian tribe a copy of the
petition; and
``(II) consult with the Indian tribe regarding any
noncompliance alleged in the petition.
``(ii) Not later than 45 days after the date on which a
consultation under clause (i)(II) takes place, the Indian tribe
shall respond to any claim made in a petition under
subparagraph (B).
``(iii) The Secretary shall act in accordance with
subparagraphs (D) and (E) only if the Indian tribe--
``(I) denies, or fails to respond to, each claim
made in the petition within the period described in
clause (ii); or
``(II) fails, refuses, or is unable to cure or
otherwise resolve each claim made in the petition
within a reasonable period, as determined by the
Secretary, after the expiration of the period described
in clause (ii).
``(D)(i) Not later than 120 days after the date on which
the Secretary receives a petition under subparagraph (B), the
Secretary shall determine whether the Indian tribe is not in
compliance with the tribal energy resource agreement.
``(ii) The Secretary may adopt procedures under paragraph
(8) authorizing an extension of time, not to exceed 120 days,
for making the determination under clause (i) in any case in
which the Secretary determines that additional time is
necessary to evaluate the allegations of the petition.
``(iii) Subject to subparagraph (E), if the Secretary
determines that the Indian tribe is not in compliance with the
tribal energy resource agreement, the Secretary shall take such
action as the Secretary determines to be necessary to ensure
compliance with the tribal energy resource agreement,
including--
``(I) temporarily suspending any activity under a
lease, business agreement, or right-of-way under this
section until the Indian tribe is in compliance with
the approved tribal energy resource agreement; or
``(II) rescinding approval of all or part of the
tribal energy resource agreement, and if all of the
agreement is rescinded, reassuming the responsibility
for approval of any future leases, business agreements,
or rights-of-way described in subsection (a) or (b).
``(E) Before taking an action described in subparagraph
(D)(iii), the Secretary shall--
``(i) make a written determination that describes
the manner in which the tribal energy resource
agreement has been violated;
``(ii) provide the Indian tribe with a written
notice of the violations together with the written
determination; and
``(iii) before taking any action described in
subparagraph (D)(iii) or seeking any other remedy,
provide the Indian tribe with a hearing and a
reasonable opportunity to attain compliance with the
tribal energy resource agreement.
``(F) An Indian tribe described in subparagraph (E) shall
retain all rights to appeal under any regulation promulgated by
the Secretary.
``(8) Not later than 1 year after the date of enactment of
the Energy Policy Act of 2005, the Secretary shall promulgate
regulations that implement this subsection, including--
``(A) criteria to be used in determining the
capacity of an Indian tribe under paragraph (2)(B)(i),
including the experience of the Indian tribe in
managing natural resources and financial and
administrative resources available for use by the
Indian tribe in implementing the approved tribal energy
resource agreement of the Indian tribe;
``(B) a process and requirements in accordance with
which an Indian tribe may--
``(i) voluntarily rescind a tribal energy
resource agreement approved by the Secretary
under this subsection; and
``(ii) return to the Secretary the
responsibility to approve any future lease,
business agreement, or right-of-way under this
subsection;
``(C) provisions establishing the scope of, and
procedures for, the periodic review and evaluation
described in subparagraphs (D) and (E) of paragraph
(2), including provisions for review of transactions,
reports, site inspections, and any other review
activities the Secretary determines to be appropriate;
and
``(D) provisions describing final agency actions
after exhaustion of administrative appeals from
determinations of the Secretary under paragraph (7).
``(f) No Effect on Other Law.--Nothing in this section affects the
application of--
``(1) any Federal environmental law;
``(2) the Surface Mining Control and Reclamation Act of
1977 (30 U.S.C. 1201 et seq.); or
``(3) except as otherwise provided in this title, the
Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et
seq.).
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary such sums as are necessary for each of
fiscal years 2006 through 2016 to carry out this section and to make
grants or provide other appropriate assistance to Indian tribes to
assist the Indian tribes in developing and implementing tribal energy
resource agreements in accordance with this section.
``SEC. 2605. FEDERAL POWER MARKETING ADMINISTRATIONS.
``(a) Definitions.--In this section:
``(1) The term ``Administrator'' means the Administrator of
the Bonneville Power Administration and the Administrator of
the Western Area Power Administration.
``(2) The term ``power marketing administration'' means--
``(A) the Bonneville Power Administration;
``(B) the Western Area Power Administration; and
``(C) any other power administration the power
allocation of which is used by or for the benefit of an
Indian tribe located in the service area of the
administration.
``(b) Encouragement of Indian Tribal Energy Development.--Each
Administrator shall encourage Indian tribal energy development by
taking such actions as the Administrators determine to be appropriate,
including administration of programs of the power marketing
administration, in accordance with this section.
``(c) Action by Administrators.--In carrying out this section, in
accordance with laws in existence on the date of enactment of the
Energy Policy Act of 2005--
``(1) each Administrator shall consider the unique
relationship that exists between the United States and Indian
tribes;
``(2) power allocations from the Western Area Power
Administration to Indian tribes may be used to meet firming and
reserve needs of Indian-owned energy projects on Indian land;
``(3) the Administrator of the Western Area Power
Administration may purchase non-federally generated power from
Indian tribes to meet the firming and reserve requirements of
the Western Area Power Administration; and
``(4) each Administrator shall not--
``(A) pay more than the prevailing market price for
an energy product; or
``(B) obtain less than prevailing market terms and
conditions.
``(d) Assistance for Transmission System Use.--
``(1) An Administrator may provide technical assistance to
Indian tribes seeking to use the high-voltage transmission
system for delivery of electric power.
``(2) The costs of technical assistance provided under
paragraph (1) shall be funded--
``(A) by the Secretary of Energy using
nonreimbursable funds appropriated for that purpose; or
``(B) by any appropriate Indian tribe.
``(e) Power Allocation Study.--Not later than 2 years after the
date of enactment of the Energy Policy Act of 2005, the Secretary of
Energy shall submit to Congress a report that--
``(1) describes the use by Indian tribes of Federal power
allocations of the power marketing administration (or power
sold by the Southwestern Power Administration) to or for the
benefit of Indian tribes in a service area of the power
marketing administration; and
``(2) identifies--
``(A) the quantity of power allocated to, or used
for the benefit of, Indian tribes by the Western Area
Power Administration;
``(B) the quantity of power sold to Indian tribes
by any other power marketing administration; and
``(C) barriers that impede tribal access to and use
of Federal power, including an assessment of
opportunities to remove those barriers and improve the
ability of power marketing administrations to deliver
Federal power.
``(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $750,000, non-reimbursable, to
remain available until expended.
``SEC. 2606. WIND AND HYDROPOWER FEASIBILITY STUDY.
``(a) Study.--The Secretary of Energy, in coordination with the
Secretary of the Army and the Secretary, shall conduct a study of the
cost and feasibility of developing a demonstration project that uses
wind energy generated by Indian tribes and hydropower generated by the
Army Corps of Engineers on the Missouri River to supply firming power
to the Western Area Power Administration.
``(b) Scope of Study.--The study shall--
``(1) determine the feasibility of blending wind energy and
hydropower generated from the Missouri River dams operated by
the Army Corps of Engineers;
``(2) review historical and projected requirements for, and
patterns of availability and use of, firming power;
``(3) assess the wind energy resource potential on tribal
land and projected cost savings through a blend of wind and
hydropower over a 30-year period;
``(4) determine seasonal capacity needs and associated
transmission upgrades for integration of tribal wind
generation; and
``(5) include an independent tribal engineer as a study
team member.
``(c) Report.--Not later than 1 year after the date of enactment of
the Energy Policy Act of 2005, the Secretary and the Secretary of the
Army shall submit to Congress a report that describes the results of
the study, including--
``(1) an analysis of the potential energy cost or benefits
to the customers of the Western Area Power Administration
through the use of combined wind and hydropower;
``(2) an evaluation of whether a combined wind and
hydropower system can reduce reservoir fluctuation, enhance
efficient and reliable energy production, and provide Missouri
River management flexibility;
``(3) recommendations for a demonstration project to be
carried out by the Western Area Power Administration, in
partnership with an Indian tribal government or tribal energy
resource development organization, to demonstrate the
feasibility and potential of using wind energy produced on
Indian land to supply firming energy to the Western Area Power
Administration or any other Federal power marketing agency; and
``(4) an identification of--
``(A) the economic and environmental costs of, or
benefits to be realized through, a Federal-tribal
partnership; and
``(B) the manner in which a Federal-tribal
partnership could contribute to the energy security of
the United States.
``(d) Funding.--
``(1) Authorization of appropriations.--There is authorized
to be appropriated to carry out this section $1,000,000, to
remain available until expended.
``(2) Nonreimbursability.--Costs incurred by the Secretary
in carrying out this section shall be nonreimbursable.''.
(b) Conforming Amendments.--The table of contents for the Energy
Policy Act of 1992 is amended by striking the items relating to title
XXVI and inserting the following:
``Sec. 2601. Definitions.
``Sec. 2602. Indian tribal energy
resource development.
``Sec. 2603. Indian tribal energy
resource regulation.
``Sec. 2604. Leases, business agreements,
and rights-of-way involving
energy development or
transmission.
``Sec. 2605. Federal Power Marketing
Administrations.
``Sec. 2606. Wind and hydropower
feasibility study.''.
SEC. 504. FOUR CORNERS TRANSMISSION LINE PROJECT AND ELECTRIFICATION.
(a) Transmission Line Project.--The Dine Power Authority, an
enterprise of the Navajo Nation, shall be eligible to receive grants
and other assistance under section 217 of the Department of Energy
Organization Act, as added by section 502, and section 2602 of the
Energy Policy Act of 1992, as amended by this Act, for activities
associated with the development of a transmission line from the Four
Corners Area to southern Nevada, including related power generation
opportunities.
(b) Navajo Electrification.--Section 602 of Public Law 106-511 (114
Stat. 2376) is amended--
(1) in subsection (a)--
(A) in the first sentence, by striking ``5-year''
and inserting ``10-year''; and
(B) in the third sentence, by striking ``2006'' and
inserting ``2011''; and
(2) in the first sentence of subsection (e) by striking
``2006'' and inserting ``2011''.
SEC. 505. ENERGY EFFICIENCY IN FEDERALLY ASSISTED HOUSING.
(a) In General.--The Secretary of Housing and Urban Development
shall promote energy conservation in housing that is located on Indian
land and assisted with Federal resources through--
(1) the use of energy-efficient technologies and
innovations (including the procurement of energy-efficient
refrigerators and other appliances);
(2) the promotion of shared savings contracts; and
(3) the use and implementation of such other similar
technologies and innovations as the Secretary of Housing and
Urban Development considers to be appropriate.
(b) Amendment.--Section 202(2) of the Native American Housing and
Self-Determination Act of 1996 (25 U.S.C. 4132(2)) is amended by
inserting ``improvement to achieve greater energy efficiency,'' after
``planning,''.
SEC. 506. CONSULTATION WITH INDIAN TRIBES.
In carrying out this Act and the amendments made by this Act, the
Secretary of Energy and the Secretary shall, as appropriate and to the
maximum extent practicable, involve and consult with Indian tribes in a
manner that is consistent with the Federal trust and the government-to-
government relationships between Indian tribes and the United States.
TITLE VI--NUCLEAR MATTERS
Subtitle A--Price-Anderson Act Amendments
SEC. 601. SHORT TITLE.
This subtitle may be cited as the ``Price-Anderson Amendments Act
of 2005''.
SEC. 602. EXTENSION OF INDEMNIFICATION AUTHORITY.
(a) Indemnification of Nuclear Regulatory Commission Licensees.--
Section 170 c. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(c)) is
amended--
(1) in the subsection heading, by striking ``Licenses'' and
inserting ``Licensees''; and
(2) by striking ``December 31, 2003'' each place it appears
and inserting ``December 31, 2025''.
(b) Indemnification of Department of Energy 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 ``December 31, 2006'' and inserting ``December
31, 2025''.
(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
``December 31, 2025''.
SEC. 603. MAXIMUM ASSESSMENT.
Section 170 of the Atomic Energy Act of 1954 (42 U.S.C. 2210) is
amended--
(1) in the second proviso of the third sentence of
subsection b.(1)--
(A) by striking ``$63,000,000'' and inserting
``$95,800,000''; and
(B) by striking ``$10,000,000 in any 1 year'' and
inserting ``$15,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''; and
(2) in subsection t.(1)--
(A) by inserting ``total and annual'' after
``amount of the maximum'';
(B) by striking ``the date of the enactment of the
Price-Anderson Amendments Act of 1988'' and inserting
``August 20, 2003''; and
(C) in subparagraph (A), by striking ``such date of
enactment'' and inserting ``August 20, 2003''.
SEC. 604. DEPARTMENT OF ENERGY LIABILITY LIMIT.
(a) Indemnification of Department of Energy Contractors.--Section
170 d. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(d)) (as amended
by section 602(b)) is amended by striking paragraph (2) and inserting
the following:
``(2) In an agreement 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 determines 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 the
liability above the amount of the financial protection
required, in the amount of $10,000,000,000 (subject to
adjustment for inflation under subsection t.) in the aggregate,
for all persons indemnified in connection with the contract and
for each nuclear incident, including such legal expenses
incurred by 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)) (as amended by section 602(b)) is amended
by striking paragraph (3) and inserting the following:
``(3) All agreements of indemnification under which the Department
of Energy (or predecessor agencies) may be required to indemnify any
person under this section shall be considered to be amended, on the
date of enactment of the Price-Anderson Amendments Act of 2005, to
reflect the amount of indemnity for public liability and any applicable
financial protection required of the contractor under this
subsection.''.
(c) Liability Limit.--Section 170 e.(1)(B) of the Atomic Energy Act
of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
(1) by striking ``the maximum amount of financial
protection required under subsection b. or''; and
(2) by striking ``paragraph (3) of subsection d., whichever
amount is more'' and inserting ``paragraph (2) of subsection
d.''.
SEC. 605. 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 170 e.(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. 606. 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 ``December 31,
2021''.
SEC. 607. INFLATION ADJUSTMENT.
Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(t))
(as amended by section 603(2)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(2) The Secretary shall adjust the amount of indemnification
provided under an agreement of indemnification under subsection d. not
less than once during each 5-year period following July 1, 2003, in
accordance with the aggregate percentage change in the Consumer Price
Index since--
``(A) that date, in the case of the first adjustment under
this paragraph; or
``(B) the previous adjustment under this paragraph.''.
SEC. 608. TREATMENT OF MODULAR REACTORS.
Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b))
(as amended by section 603) is amended by adding at the end the
following:
``(5)(A) For purposes of this section only, the Commission shall
consider a combination of facilities described in subparagraph (B) to
be a single facility having a rated capacity of 100,000 electrical
kilowatts or more.
``(B) A combination of facilities referred to in subparagraph (A)
is 2 or more facilities located at a single site, each of which has a
rated capacity of not less than 100,000 electrical kilowatts and not
more than 300,000 electrical kilowatts, with a combined rated capacity
of not more than 1,300,000 electrical kilowatts.''.
SEC. 609. APPLICABILITY.
The amendments made by sections 603, 604, and 605 do not apply to a
nuclear incident that occurs before the date of enactment of this Act.
SEC. 610. CIVIL PENALTIES.
(a) Repeal of Automatic Remission.--Section 234A b.(2) of the
Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is amended by
striking the last sentence.
(b) Limitation for Not-for-Profit Institutions.--Section 234A of
the Atomic Energy Act of 1954 (42 U.S.C. 2282a) is amended by striking
subsection d. and inserting the following:
``d.(1) Notwithstanding subsection a., in the case of any not-for-
profit contractor, subcontractor, or supplier, the total amount of
civil penalties paid under subsection a. may not exceed the total
amount of fees paid within any 1-year period (as determined by the
Secretary) under the contract under which the violation occurs.
``(2) In this section, the term `not-for-profit' means that no part
of the net earnings of the contractor, subcontractor, or supplier
inures to the benefit of any natural person or for-profit artificial
person.''.
(c) Effective Date.--The amendments made by this section shall not
apply to any violation of the Atomic Energy Act of 1954 (42 U.S.C. 2011
et seq.) occurring under a contract entered into before the date of
enactment of this Act.
Subtitle B--General Nuclear Matters
SEC. 621. MEDICAL ISOTOPE PRODUCTION: NONPROLIFERATION, ANTITERRORISM,
AND RESOURCE REVIEW.
(a) Definitions.--In this section:
(1) Highly enriched uranium for medical isotope
production.--The term ``highly enriched uranium for medical
isotope production'' means highly enriched uranium contained
in, or for use in, targets to be irradiated for the sole
purpose of producing medical isotopes.
(2) Medical isotopes.--The term ``medical isotopes'' means
radioactive isotopes, including molybdenum-99, that are used to
produce radiopharmaceuticals for diagnostic or therapeutic
procedures on patients.
(b) Study.--
(1) In general.--Not later than 60 days after the date of
enactment of this Act, the Secretary shall enter into an
arrangement with the National Academy of Sciences for the
conduct of a study of issues associated with section 134 of the
Atomic Energy Act of 1954 (42 U.S.C. 2160d), including issues
associated with the implementation of that section.
(2) Contents.--The study shall include an analysis of--
(A) the effectiveness to date of section 134 of the
Atomic Energy Act of 1954 (42 U.S.C. 2160d) in
facilitating the conversion of foreign reactor fuel and
targets to low-enriched uranium, which reduces the risk
that highly enriched uranium will be diverted and
stolen;
(B) the degree to which isotope producers that rely
on United States highly enriched uranium are complying
with the intent of section 134 of the Atomic Energy Act
of 1954 (42 U.S.C. 2160d) to expeditiously convert
targets to low-enriched uranium;
(C) the adequacy of physical protection and
material control and accounting measures at foreign
facilities that receive United States highly enriched
uranium for medical isotope production, in comparison
to Nuclear Regulatory Commission regulations and
Department administrative requirements;
(D) the likely consequences of an exemption of
highly enriched uranium exports for medical isotope
production from section 134(a) of the Atomic Energy Act
of 1954 (42 U.S.C. 2160d(a)) for--
(i) United States efforts to eliminate
highly enriched uranium commerce worldwide
through the support of the Reduced Enrichment
in Research and Test Reactors program; and
(ii) other United States nonproliferation
and antiterrorism initiatives;
(E) incentives that could supplement the incentives
of section 134 of the Atomic Energy Act of 1954 (42
U.S.C. 2160d) to further encourage foreign medical
isotope producers to convert from highly enriched
uranium to low-enriched uranium;
(F) whether implementation of section 134 of the
Atomic Energy Act of 1954 (42 U.S.C. 2160d) has ever
caused, or is likely to cause, an interruption in the
production and supply of medical isotopes in needed
quantities;
(G) whether the United States supply of isotopes is
sufficiently diversified to withstand an interruption
of production from any 1 supplier, and, if not, what
steps should be taken to diversify United States
supply; and
(H) any other aspects of implementation of section
134 of the Atomic Energy Act of 1954 (42 U.S.C. 2160d)
that have a bearing on Federal nonproliferation and
antiterrorism laws (including regulations) and
policies.
(3) Timing; consultation.--The National Academy of Sciences
study shall be--
(A) conducted in full consultation with the
Secretary of State, the staff of the Reduced Enrichment
in Research and Test Reactors program at Argonne
National Laboratory, and other interested organizations
and individuals with expertise in nuclear
nonproliferation; and
(B) submitted to Congress not later than 18 months
after the date of enactment of this Act.
SEC. 622. SAFE DISPOSAL OF GREATER-THAN-CLASS C RADIOACTIVE WASTE.
(a) Responsibility for Activities To Provide Storage Facility.--The
Secretary shall provide to Congress official notification of the final
designation of an entity within the Department to have the
responsibility of completing activities needed to provide a facility
for safely disposing of all greater-than-Class C low-level radioactive
waste.
(b) Reports and Plans.--
(1) Report on permanent disposal facility.--
(A) Plan regarding cost and schedule for completion
of eis and rod.--Not later than 1 year after the date
of enactment of this Act, the Secretary, in
consultation with Congress, shall submit to Congress a
report containing an estimate of the cost and a
proposed schedule to complete an environmental impact
statement and record of decision for a permanent
disposal facility for greater-than-Class C radioactive
waste.
(B) Analysis of alternatives.--Before the Secretary
makes a final decision on the disposal alternative or
alternatives to be implemented, the Secretary shall--
(i) submit to Congress a report that
describes all alternatives under consideration,
including all information required in the
comprehensive report making recommendations for
ensuring the safe disposal of all greater-than-
Class C low-level radioactive waste that was
submitted by the Secretary to Congress in
February 1987; and
(ii) await action by Congress.
(2) Short-term plan for recovery and storage.--
(A) In general.--Not later than 180 days after the
date of enactment of this Act, the Secretary shall
submit to Congress a plan to ensure the continued
recovery and storage of greater-than-Class C low-level
radioactive sealed sources that pose a security threat
until a permanent disposal facility is available.
(B) Contents.--The plan shall address estimated
cost, resource, and facility needs.
SEC. 623. PROHIBITION ON NUCLEAR EXPORTS TO COUNTRIES THAT SPONSOR
TERRORISM.
(a) In General.--Section 129 of the Atomic Energy Act of 1954 (42
U.S.C. 2158) is amended--
(1) by inserting ``a.'' before ``No nuclear materials and
equipment''; and
(2) by adding at the end the following:
``b.(1)(A) Notwithstanding any other provision of law, including
section 121, and except as provided in paragraphs (2) and (3), no
nuclear materials and equipment or sensitive nuclear technology,
including items and assistance authorized by section 57 b. and
regulated under part 810 of title 10, Code of Federal Regulations (or a
successor regulation), and nuclear-related items on the Commerce
Control List maintained under part 774 of title 15 of the Code of
Federal Regulations (or a successor regulation), shall be exported or
reexported, or transferred or retransferred, whether directly or
indirectly, and no Federal agency shall issue any license, approval, or
authorization for the export or reexport, or transfer, or retransfer,
whether directly or indirectly, of the items or assistance described in
this paragraph to any country the government of which has been
identified by the Secretary of State as engaged in state sponsorship of
terrorist activities.
``(B) Countries described in subparagraph (A) specifically include
any country the government of which has been determined by the
Secretary of State to have repeatedly provided support for acts of
international terrorism under--
``(i) section 620A(a) of the Foreign Assistance Act of 1961
(22 U.S.C. 2371(a));
``(ii) section 6(j)(1) of the Export Administration Act of
1979 (50 U.S.C. App. 2405(j)(1)); or
``(iii) section 40(d) of the Arms Export Control Act (22
U.S.C. 2780(d)).
``(2) This subsection does not apply to exports, reexports,
transfers, or retransfers of radiation monitoring technologies,
surveillance equipment, seals, cameras, tamper-indication devices,
nuclear detectors, monitoring systems, or equipment necessary to safely
store, transport, or remove hazardous materials, whether such items,
services, or information are regulated by the Department of Energy, the
Department of Commerce, or the Commission, except to the extent that
the technologies, equipment, seals, cameras, devices, detectors, or
systems are available for use in the design or construction of nuclear
reactors or nuclear weapons.
``(3) The President may waive the application of paragraph (1) to a
country if the President determines and certifies to Congress that--
``(A) the waiver will not result in any increased risk that
the country receiving the waiver will acquire nuclear weapons,
nuclear reactors, or any materials or components of nuclear
weapons; and
``(B)(i) the government of the country has not within the
preceding 12-month period willfully aided or abetted the
international proliferation of nuclear explosive devices to
individuals or groups or willfully aided and abetted an
individual or groups in acquiring unsafeguarded nuclear
materials;
``(ii) in the judgment of the President, the government of
the country has provided adequate, verifiable assurances that
the country will cease its support for acts of international
terrorism;
``(iii) the waiver of paragraph (1) is in the vital
national security interest of the United States; or
``(iv) the waiver of paragraph (1) is essential to prevent
or respond to a serious radiological hazard in the country
receiving the waiver that may or does threaten public health
and safety.''.
(b) Applicability to Exports Approved for Transfer but not
Transferred.--Subsection b. of section 129 of Atomic Energy Act of 1954
(as added by subsection (a)), shall apply with respect to exports that
have been approved for transfer as of the date of enactment of this Act
but have not yet been transferred as of that date.
SEC. 624. DECOMMISSIONING PILOT PROGRAM.
(a) Pilot Program.--The Secretary shall establish a decommissioning
pilot program under which the Secretary shall decommission and
decontaminate the sodium-cooled fast breeder experimental test-site
reactor located in northwest Arkansas, in accordance with the
decommissioning activities contained in the report of the Department
relating to the reactor, dated August 31, 1998.
(b) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $16,000,000.
SEC. 625. WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF THE DEPARTMENT OF
ENERGY.
(a) Definition of Employer.--Section 211(a)(2) of the Energy
Reorganization Act of 1974 (42 U.S.C. 5851(a)(2)) is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) in subparagraph (D), by striking ``that is
indemnified'' and all that follows through ``12344.''; and
(3) by adding at the end the following:
``(E) the Department of Energy.''.
(b) De Novo Judicial Determination.--Section 211(b) of the Energy
Reorganization Act of 1974 (42 U.S.C. 5851(b)) is amended by adding at
the end the following:
``(4) De novo judicial determination.--If the Secretary
does not issue a final decision within 180 days after the
filing of a complaint under paragraph (1) and the Secretary
does not show that the delay is caused by the bad faith of the
claimant, the claimant may bring a civil action in United
States district court for a determination of the claim by the
court de novo.''.
Subtitle C--Next Generation Nuclear Plant Project
SEC. 631. PROJECT ESTABLISHMENT.
(a) Establishment.--The Secretary shall establish a project to be
known as the ``Next Generation Nuclear Plant Project'' (referred to in
this subtitle as the ``Project'').
(b) Content.--The Project shall consist of the research,
development, design, construction, and operation of a prototype plant,
including a nuclear reactor that--
(1) is based on research and development activities
supported by the Generation IV Nuclear Energy Systems
Initiative under section 942(d); and
(2) shall be used--
(A) to generate electricity;
(B) to produce hydrogen; or
(C) both to generate electricity and to produce
hydrogen.
SEC. 632. PROJECT MANAGEMENT.
(a) Departmental Management.--
(1) In general.--The Project shall be managed in the
Department by the Office of Nuclear Energy, Science, and
Technology.
(2) Generation iv nuclear energy systems program.--The
Secretary may combine the Project with the Generation IV
Nuclear Energy Systems Initiative.
(3) Existing doe project management expertise.--The
Secretary may utilize capabilities for review of construction
projects for advanced scientific facilities within the Office
of Science to track the progress of the Project.
(b) Laboratory Management.--
(1) Lead laboratory.--The Idaho National Laboratory shall
be the lead National Laboratory for the Project and shall
collaborate with other National Laboratories, institutions of
higher education, other research institutes, industrial
researchers, and international researchers to carry out the
Project.
(2) Industrial partnerships.--
(A) In general.--The Idaho National Laboratory
shall organize a consortium of appropriate industrial
partners that will carry out cost-shared research,
development, design, and construction activities, and
operate research facilities, on behalf of the Project.
(B) Cost-sharing.--Activities of industrial
partners funded by the Project shall be cost-shared in
accordance with section 1002.
(C) Preference.--Preference in determining the
final structure of the consortium or any partnerships
under this subtitle shall be given to a structure
(including designating as a lead industrial partner an
entity incorporated in the United States) that retains
United States technological leadership in the Project
while maximizing cost sharing opportunities and
minimizing Federal funding responsibilities.
(3) Prototype plant siting.--The prototype nuclear reactor
and associated plant shall be sited at the Idaho National
Laboratory in Idaho.
(4) Reactor test capabilities.--The Project shall use, if
appropriate, reactor test capabilities at the Idaho National
Laboratory.
(5) Other laboratory capabilities.--The Project may use, if
appropriate, facilities at other National Laboratories.
SEC. 633. PROJECT ORGANIZATION.
(a) Major Project Elements.--The Project shall consist of the
following major program elements:
(1) High-temperature hydrogen production technology
development and validation.
(2) Energy conversion technology development and
validation.
(3) Nuclear fuel development, characterization, and
qualification.
(4) Materials selection, development, testing, and
qualification.
(5) Reactor and balance-of-plant design, engineering,
safety analysis, and qualification.
(b) Project Phases.--The Project shall be conducted in the
following phases:
(1) First project phase.--A first project phase shall be
conducted to--
(A) select and validate the appropriate technology
under subsection (a)(1);
(B) carry out enabling research, development, and
demonstration activities on technologies and components
under paragraphs (2) through (4) of subsection (a);
(C) determine whether it is appropriate to combine
electricity generation and hydrogen production in a
single prototype nuclear reactor and plant; and
(D) carry out initial design activities for a
prototype nuclear reactor and plant, including
development of design methods and safety analytical
methods and studies under subsection (a)(5).
(2) Second project phase.--A second project phase shall be
conducted to--
(A) continue appropriate activities under
paragraphs (1) though (5) of subsection (a);
(B) develop, through a competitive process, a final
design for the prototype nuclear reactor and plant;
(C) apply for licenses to construct and operate the
prototype nuclear reactor from the Nuclear Regulatory
Commission; and
(D) construct and start up operations of the
prototype nuclear reactor and its associated hydrogen
or electricity production facilities.
(c) Project Requirements.--
(1) In general.--The Secretary shall ensure that the
Project is structured so as to maximize the technical
interchange and transfer of technologies and ideas into the
Project from other sources of relevant expertise, including--
(A) the nuclear power industry, including nuclear
powerplant construction firms, particularly with
respect to issues associated with plant design,
construction, and operational and safety issues;
(B) the chemical processing industry, particularly
with respect to issues relating to--
(i) the use of process energy for
production of hydrogen; and
(ii) the integration of technologies
developed by the Project into chemical
processing environments; and
(C) international efforts in areas related to the
Project, particularly with respect to hydrogen
production technologies.
(2) International collaboration.--
(A) In general.--The Secretary shall seek
international cooperation, participation, and financial
contributions for the Project.
(B) Assistance from international partners.--The
Secretary, through the Idaho National Laboratory, may
contract for assistance from specialists or facilities
from member countries of the Generation IV
International Forum, the Russian Federation, or other
international partners if the specialists or facilities
provide access to cost-effective and relevant skills or
test capabilities.
(C) Partner nations.--The Project may involve
demonstration of selected project objectives in a
partner country.
(D) Generation iv international forum.--The
Secretary shall ensure that international activities of
the Project are coordinated with the Generation IV
International Forum.
(3) Review by nuclear energy research advisory committee.--
(A) In general.--The Nuclear Energy Research
Advisory Committee of the Department (referred to in
this paragraph as the ``NERAC'') shall--
(i) review all program plans for the
Project and all progress under the Project on
an ongoing basis; and
(ii) ensure that important scientific,
technical, safety, and program management
issues receive attention in the Project and by
the Secretary.
(B) Additional expertise.--The NERAC shall
supplement the expertise of NERAC or appoint subpanels
to incorporate into the review by NERAC the relevant
sources of expertise described under paragraph (1).
(C) Initial review.--Not later than 180 days after
the date of enactment of this Act, the NERAC shall--
(i) review existing program plans for the
Project in light of the recommendations of the
document entitled ``Design Features and
Technology Uncertainties for the Next
Generation Nuclear Plant,'' dated June 30,
2004; and
(ii) address any recommendations of the
document not incorporated in program plans for
the Project.
(D) First project phase review.--On a determination
by the Secretary that the appropriate activities under
the first project phase under subsection (b)(1) are
nearly complete, the Secretary shall request the NERAC
to conduct a comprehensive review of the Project and to
report to the Secretary the recommendation of NERAC
concerning whether the Project is ready to proceed to
the second project phase under subsection (b)(2).
(E) Transmittal of reports to congress.--Not later
than 60 days after receiving any report from the NERAC
related to the Project, the Secretary shall submit to
the appropriate committees of the Senate and the House
of Representatives a copy of the report, along with any
additional views of the Secretary that the Secretary
may consider appropriate.
SEC. 634. NUCLEAR REGULATORY COMMISSION.
(a) In General.--In accordance with section 202 of the Energy
Reorganization Act of 1974 (42 U.S.C. 5842), the Nuclear Regulatory
Commission shall have licensing and regulatory authority for any
reactor authorized under this subtitle.
(b) Licensing Strategy.--Not later than 3 years after the date of
enactment of this Act, the Secretary and the Chairman of the Nuclear
Regulatory Commission shall jointly submit to the appropriate
committees of the Senate and the House of Representatives a licensing
strategy for the prototype nuclear reactor, including--
(1) a description of ways in which current licensing
requirements relating to light-water reactors need to be
adapted for the types of prototype nuclear reactor being
considered by the Project;
(2) a description of analytical tools that the Nuclear
Regulatory Commission will have to develop to independently
verify designs and performance characteristics of components,
equipment, systems, or structures associated with the prototype
nuclear reactor;
(3) other research or development activities that may be
required on the part of the Nuclear Regulatory Commission in
order to review a license application for the prototype nuclear
reactor; and
(4) an estimate of the budgetary requirements associated
with the licensing strategy.
(c) Ongoing Interaction.--The Secretary shall seek the active
participation of the Nuclear Regulatory Commission throughout the
duration of the Project to--
(1) avoid design decisions that will compromise adequate
safety margins in the design of the reactor or impair the
accessibility of nuclear safety-related components of the
prototype reactor for inspection and maintenance;
(2) develop tools to facilitate inspection and maintenance
needed for safety purposes; and
(3) develop risk-based criteria for any future commercial
development of a similar reactor architectures.
SEC. 635. PROJECT TIMELINES AND AUTHORIZATION OF APPROPRIATIONS.
(a) Target Date to Complete the First Project Phase.--Not later
than September 30, 2011--
(1) the Secretary shall select the technology to be used by
the Project for high-temperature hydrogen production and the
initial design parameters for the prototype nuclear plant; or
(2) submit to Congress a report establishing an alternative
date for making the selection.
(b) Design Competition for Second Project Phase.--
(1) In general.--The Secretary, acting through the Idaho
National Laboratory, shall fund not more than 4 teams for not
more than 2 years to develop detailed proposals for competitive
evaluation and selection of a single proposal for a final
design of the prototype nuclear reactor.
(2) Systems integration.--The Secretary may structure
Project activities in the second project phase to use the lead
industrial partner of the competitively selected design under
paragraph (1) in a systems integration role for final design
and construction of the Project.
(c) Target Date To Complete Project Construction.--Not later than
September 30, 2021--
(1) the Secretary shall complete construction and begin
operations of the prototype nuclear reactor and associated
energy or hydrogen facilities; or
(2) submit to Congress a report establishing an alternative
date for completion.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary for research and construction activities
under this subtitle (including for transfer to the Nuclear Regulatory
Commission for activities under section 634 as appropriate)--
(1) $1,250,000,000 for the period of fiscal years 2006
through 2015; and
(2) such sums as are necessary for each of fiscal years
2016 through 2021.
TITLE VII--VEHICLES AND FUELS
Subtitle A--Existing Programs
SEC. 701. USE OF ALTERNATIVE FUELS BY DUAL-FUELED VEHICLES.
Section 400AA(a)(3) of the Energy Policy and Conservation Act (42
U.S.C. 6374(a)(3)) is amended by striking subparagraph (E) and
inserting the following:
``(E)(i) Dual fueled vehicles acquired pursuant to this section
shall be operated on alternative fuels unless the Secretary determines
that an agency qualifies for a waiver of the requirements of this
section for vehicles operated by the agency in a particular geographic
area in which--
``(I) the alternative fuel otherwise required to be used in
the vehicle is not reasonably available to retail purchasers of
the fuel, as certified to the Secretary by the head of the
agency; or
``(II) the cost of the alternative fuel otherwise required
to be used in the vehicle is unreasonably more expensive
compared to gasoline, as certified to the Secretary by the head
of the agency.
``(ii) The Secretary shall monitor compliance with this
subparagraph by all fleets receiving a waiver.
``(iii) The Secretary shall report annually to Congress on the
extent to which the requirements of this subparagraph are being
achieved, including information on annual reductions achieved from the
use of petroleum-based fuels and the problems, if any, encountered in
acquiring alternative fuels.''.
SEC. 702. FUEL USE CREDITS.
(a) In General.--Section 312 of the Energy Policy Act of 1992 (42
U.S.C. 13220) is amended to read as follows:
``SEC. 312. FUEL USE CREDITS.
``(a) Definitions.--In this section:
``(1) Biodiesel.--The term `biodiesel' means a diesel fuel
substitute produced from nonpetroleum renewable resources that
meets the registration requirements for fuels and fuel
additives established by the Environmental Protection Agency
under section 211 of the Clean Air Act (42 U.S.C. 7545).
``(2) Qualifying volume.--The term `qualifying volume'
means--
``(A) in the case of biodiesel, when used as a
component of fuel containing at least 20 percent
biodiesel by volume--
``(i) 450 gallons; or
``(ii) if the Secretary determines by rule
that the average annual alternative fuel use in
light duty vehicles by fleets and covered
persons exceeds 450 gallons or gallon
equivalents, the amount of the average annual
alternative fuel use; and
``(B) in the case of an alternative fuel, the
amount of the fuel determined by the Secretary to have
an equivalent energy content to the amount of biodiesel
defined as a qualifying volume under subparagraph (A).
``(b) Allocation.--
``(1) In general.--The Secretary shall allocate 1 credit
under this section to a fleet or covered person for each
qualifying volume of alternative fuel or biodiesel purchased
for use in a vehicle operated by the fleet.
``(2) Limitation.--The Secretary may not allocate a credit
under this section for the purchase of an alternative fuel or
biodiesel that is required by Federal or State law.
``(3) Documentation.--A fleet or covered person seeking a
credit under paragraph (1) shall provide written documentation
to the Secretary supporting the allocation of the credit to the
fleet or covered person.
``(c) Use.--At the request of a fleet or covered person allocated a
credit under subsection (b), the Secretary shall, for the year in which
the purchase of a qualifying volume is made, consider the purchase to
be the acquisition of 1 alternative fueled vehicle that the fleet or
covered person is required to acquire under this title, title IV, or
title V.
``(d) Treatment.--A credit provided to a fleet or covered person
under this section shall be considered to be a credit under section
508.
``(e) Issuance of Rule.--Not later than 180 days after the date of
enactment of the Energy Policy Act of 2005, the Secretary shall issue a
rule establishing procedures for the implementation of this section.''.
(b) Table of Contents Amendment.--The table of contents of the
Energy Policy Act of 1992 is amended by striking the item relating to
section 312 and inserting the following:
``Sec. 312. Fuel use credits.''.
SEC. 703. INCREMENTAL COST ALLOCATION.
Section 303(c) of the Energy Policy Act of 1992 (42 U.S.C.
13212(c)) is amended by striking ``may'' and inserting ``shall''.
SEC. 704. ALTERNATIVE COMPLIANCE AND FLEXIBILITY.
(a) Alternative Compliance.--Title V of the Energy Policy Act of
1992 (42 U.S.C. 13251 et seq.) is amended--
(1) by redesignating section 514 (42 U.S.C. 13264) as
section 515; and
(2) by inserting after section 513 (42 U.S.C. 13263) the
following:
``SEC. 514. ALTERNATIVE COMPLIANCE.
``(a) Application for Waiver.--Any covered person subject to
section 501 and any State subject to section 507(o) may petition the
Secretary for a waiver of the applicable requirements of section 501 or
507(o).
``(b) Grant of Waiver.--The Secretary shall grant a waiver of the
requirements of section 501 or 507(o) on a showing that the fleet
owned, operated, leased, or otherwise controlled by the State or
covered person--
``(1) will achieve a reduction in the annual consumption of
petroleum fuels by the fleet equal to--
``(A) the reduction in consumption of petroleum
that would result from 100 percent cumulative
compliance with the fuel use requirements of section
501; or
``(B) in the case of an entity covered under
section 507(o), a reduction equal to the annual
consumption by the State entity of alternative fuels if
all of the cumulative alternative fuel vehicles of the
State entity given credit under section 508 were to use
alternative fuel 100 percent of the time; and
``(2) is in compliance with all applicable vehicle emission
standards established by the Administrator of the Environmental
Protection Agency under the Clean Air Act (42 U.S.C. 7401 et
seq.).
``(c) Revocation of Waiver.--The Secretary shall revoke any waiver
granted under this section if the State or covered person fails to
comply with subsection (b).''.
(b) Credits.--Section 508(a) of the Energy Policy Act of 1992 (42
U.S.C. 13258(a)) is amended--
(1) by striking ``The Secretary'' and inserting the
following:
``(1) The Secretary''; and
(2) by adding at the end the following:
``(2) Not later than January 31, 2007, the Secretary
shall--
``(A) allocate credit in an amount to be determined
by the Secretary for--
``(i) acquisition of--
``(I) a light-duty hybrid electric
vehicle;
``(II) a plug-in hybrid electric
vehicle;
``(III) a fuel cell electric
vehicle;
``(IV) a medium- or heavy-duty
hybrid electric vehicle;
``(V) a neighborhood electric
vehicle; or
``(VI) a medium- or heavy-duty
dedicated vehicle; and
``(ii) investment in qualified alternative
fuel infrastructure or nonroad equipment, as
determined by the Secretary; and
``(B) allocate more than 1, but not to exceed 5,
credits for investment in an emerging technology
relating to any vehicle described in subparagraph (A)
to encourage--
``(i) a reduction in petroleum demand;
``(ii) technological advancement; and
``(iii) environmental safety.''.
(c) Table of Contents Amendment.--The table of contents of the
Energy Policy Act of 1992 (42 U.S.C. prec. 13201) is amended by
striking the item relating to section 514 and inserting the following:
``Sec. 514. Alternative compliance.
``Sec. 515. Authorization of appropriations.
``Sec. 516. Termination of authority.''.
SEC. 705. REPORT CONCERNING COMPLIANCE WITH ALTERNATIVE FUELED VEHICLE
PURCHASING REQUIREMENTS.
Section 310(b)(1) of the Energy Policy Act of 1992 (42 U.S.C.
13218(b)(1)) is amended by striking ``1 year after the date of
enactment of this subsection'' and inserting ``February 15, 2006''.
SEC. 706. JOINT FLEXIBLE FUEL/HYBRID VEHICLE COMMERCIALIZATION
INITIATIVE.
(a) Definitions.--In this section:
(1) Eligible entity.--The term eligible entity means--
(A) a for-profit corporation;
(B) a nonprofit corporation; or
(C) an institution of higher education.
(2) Program.--The term ``program'' means the applied
research program established under subsection (b).
(b) Establishment.--The Secretary shall establish an applied
research program to improve technologies for the commercialization of--
(1) a combination hybrid/flexible fuel vehicle; or
(2) a plug-in hybrid/flexible fuel vehicle.
(c) Grants.--In carrying out the program, the Secretary shall
provide grants that give preference to proposals that--
(1) achieve the greatest reduction in miles per gallon of
petroleum fuel consumption;
(2) achieve not less than 250 miles per gallon of petroleum
fuel consumption; and
(3) have the greatest potential of commercialization to the
general public within 5 years.
(d) Verification.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall publish in the Federal
Register procedures to verify--
(1) the hybrid/flexible fuel vehicle technologies to be
demonstrated; and
(2) that grants are administered in accordance with this
section.
(e) Report.--Not later than 260 days after the date of enactment of
this Act, and annually thereafter, the Secretary shall submit to
Congress a report that--
(1) identifies the grant recipients;
(2) describes the technologies to be funded under the
program;
(3) assesses the feasibility of the technologies described
in paragraph (2) in meeting the goals described in subsection
(c);
(4) identifies applications submitted for the program that
were not funded; and
(5) makes recommendations for Federal legislation to
achieve commercialization of the technology demonstrated.
(f) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, to remain available until
expended--
(1) $3,000,000 for fiscal year 2005;
(2) $7,000,000 for fiscal year 2006;
(3) $10,000,000 for fiscal year 2007; and
(4) $20,000,000 for fiscal year 2008.
Subtitle B--Automobile Efficiency
CHAPTER 1--MAXIMUM AVERAGE FUEL ECONOMY
SEC. 711. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM FEASIBLE
AVERAGE FUEL ECONOMY.
Section 32902(f) of title 49, United States Code, is amended to
read as follows:
``(f) Considerations for Decisions on Maximum Feasible Average Fuel
Economy.--When deciding maximum feasible average fuel economy under
this section, the Secretary of Transportation shall consider the
following matters:
``(1) Technological feasibility.
``(2) Economic practicability.
``(3) The effect of other motor vehicle standards of the
Government on fuel economy.
``(4) The need of the United States to conserve energy.
``(5) The desirability of reducing United States dependence
on imported oil.
``(6) The effects of the average fuel economy standards on
motor vehicle and passenger safety.
``(7) The effects of increased fuel economy on air quality.
``(8) The adverse effects of average fuel economy standards
on the relative competitiveness of manufacturers.
``(9) The effects of compliance with average fuel economy
standards on levels of employment in the United States.
``(10) The cost and lead time necessary for the
introduction of the necessary new technologies.
``(11) The potential for advanced technology vehicles, such
as hybrid and fuel cell vehicles, to contribute to the
achievement of significant reductions in fuel consumption.
``(12) The extent to which the necessity for vehicle
manufacturers to incur near-term costs to comply with the
average fuel economy standards adversely affects the
availability of resources for the development of advanced
technology for the propulsion of motor vehicles.
``(13) The report of the National Research Council that is
entitled `Effectiveness and Impact of Corporate Average Fuel
Economy Standards', issued in January 2002.''.
SEC. 712. INCREASED FUEL ECONOMY STANDARDS.
(a) New Regulations Required.--
(1) Non-passenger automobiles.--
(A) Requirement for new regulations.--The Secretary
of Transportation shall issue, under section 32902 of
title 49, United States Code, new regulations setting
forth increased average fuel economy standards for non-
passenger automobiles. The regulations shall be
determined on the basis of the maximum feasible average
fuel economy levels for the non-passenger automobiles,
taking into consideration the matters set forth in
subsection (f) of such section. The new regulations
under this paragraph shall apply for model years after
the 2007 model year, subject to subsection (b).
(B) Time for issuing regulations.--The Secretary of
Transportation shall issue the final regulations under
subparagraph (A) not later than April 1, 2006.
(2) Passenger automobiles.--
(A) Requirement for new regulations.--The Secretary
of Transportation shall issue, under section 32902 of
title 49, United States Code, new regulations setting
forth increased average fuel economy standards for
passenger automobiles. The regulations shall be
determined on the basis of the maximum feasible average
fuel economy levels for the passenger automobiles,
taking into consideration the matters set forth in
subsection (f) of such section.
(B) Time for issuing regulations.--The Secretary of
Transportation shall issue the final regulations under
subparagraph (A) not later than 2\1/2\ years after the
date of the enactment of this Act.
(b) Phased Increases.--The regulations issued pursuant to
subsection (a) shall specify standards that take effect successively
over several vehicle model years not exceeding 15 vehicle model years.
(c) Clarification of Authority To Amend Passenger Automobile
Standard.--Section 32902(b) of title 49, United States Code, is amended
by inserting before the period at the end the following: ``or such
other number as the Secretary prescribes under subsection (c)''.
(d) Environmental Assessment.--When issuing final regulations
setting forth increased average fuel economy standards under section
32902(a) or section 32902(c) of title 49, United States Code, the
Secretary of Transportation shall also issue an environmental
assessment of the effects of the increased standards on the environment
under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et
seq.).
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Transportation $5,000,000 for each of
fiscal years 2006 through 2010 for carrying out this section and for
administering the regulations issued pursuant to this section.
SEC. 713. EXPEDITED PROCEDURES FOR CONGRESSIONAL INCREASE IN FUEL
ECONOMY STANDARDS.
(a) Condition for Applicability.--If the Secretary of
Transportation fails to issue final regulations with respect to non-
passenger automobiles under section 712, or fails to issue final
regulations with respect to passenger automobiles under such section,
on or before the date by which such final regulations are required by
such section to be issued, respectively, then this section shall apply
with respect to a bill described in subsection (b).
(b) Bill.--A bill referred to in this subsection is a bill that
satisfies the following requirements:
(1) Introduction.--The bill is introduced by one or more
Members of Congress not later than 60 days after the date
referred to in subsection (a).
(2) Title.--The title of the bill is as follows: ``A bill
to establish new average fuel economy standards for certain
motor vehicles.''.
(3) Text.--The bill provides after the enacting clause only
the text specified in subparagraph (A) or (B) or any provision
described in subparagraph (C), as follows:
(A) Non-passenger automobiles.--In the case of a
bill relating to a failure timely to issue final
regulations relating to non-passenger automobiles, the
following text:
``That, section 32902 of title 49, United States Code, is amended by
adding at the end the following new subsection:
```(_) Non-passenger automobiles.--The average fuel economy
standard for non-passenger automobiles manufactured by a manufacturer
in a model year after model year __ shall be __ miles per gallon.''',
the first blank space being filled in with a subsection designation,
the second blank space being filled in with the number of a year, and
the third blank space being filled in with a number.
(B) Passenger automobiles.--In the case of a bill
relating to a failure timely to issue final regulations
relating to passenger automobiles, the following text:
``That, section 32902(b) of title 49, United States Code, is amended to
read as follows:
```(b) Passenger Automobiles.--Except as provided in this section,
the average fuel economy standard for passenger automobiles
manufactured by a manufacturer in a model year after model year __
shall be __ miles per gallon.''', the first blank space being filled in
with the number of a year and the second blank space being filled in
with a number.
(C) Substitute text.--Any text substituted by an
amendment that is in order under subsection (c)(3).
(c) Expedited Procedures.--A bill described in subsection (b) shall
be considered in a House of Congress in accordance with the procedures
provided for the consideration of joint resolutions in paragraphs (3)
through (8) of section 8066(c) of the Department of Defense
Appropriations Act, 1985 (as contained in section 101(h) of Public Law
98-473; 98 Stat. 1936), with the following exceptions:
(1) References to resolution.--The references in such
paragraphs to a resolution shall be deemed to refer to the bill
described in subsection (b).
(2) Committees of jurisdiction.--The committees to which
the bill is referred under this subsection shall--
(A) in the Senate, be the Committee on Commerce,
Science, and Transportation; and
(B) in the House of Representatives, be the
Committee on Energy and Commerce.
(3) Amendments.--
(A) Amendments in order.--Only four amendments to
the bill are in order in each House, as follows:
(i) Two amendments proposed by the majority
leader of that House.
(ii) Two amendments proposed by the
minority leader of that House.
(B) Form and content.--To be in order under
subparagraph (A), an amendment shall propose to strike
all after the enacting clause and substitute text that
only includes the same text as is proposed to be
stricken except for one or more different numbers in
the text.
(C) Debate, et cetera.--Subparagraph (B) of section
8066(c)(5) of the Department of Defense Appropriations
Act, 1985 (98 Stat. 1936) shall apply to the
consideration of each amendment proposed under this
paragraph in the same manner as such subparagraph (B)
applies to debatable motions.
SEC. 714. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR ALTERNATIVE
FUELED VEHICLES.
(a) Manufacturing Incentives.--Section 32905 of title 49, United
States Code, is amended--
(1) in subsections (b) and (d), by striking ``1993-2004''
and inserting ``1993-2008'';
(2) in subsection (f), by striking ``2001'' and inserting
``2007''; and
(3) in subsection (f)(1), by striking ``2004'' and
inserting ``2008''.
(b) Extension of Maximum Fuel Economy Increase.--Section
32906(a)(1) of title 49, United States Code, is amended--
(1) in subparagraph (A), by striking ``1993-2004'' and
inserting ``1993 through 2008''; and
(2) in subparagraph (B), by striking ``2005-2008'' and
inserting ``2009 through 2012''.
CHAPTER 2--ADVANCED CLEAN VEHICLES
SEC. 721. HYBRID VEHICLES RESEARCH AND DEVELOPMENT.
(a) Rechargeable Energy Storage Systems and Other Technologies.--
The Secretary of Energy shall accelerate research and development
directed toward the improvement of batteries and other rechargeable
energy storage systems, power electronics, hybrid systems integration,
and other technologies for use in hybrid vehicles.
(b) Authorization of Appropriations.--Funds are hereby authorized
to be appropriated for each of fiscal years 2006, 2007, and 2008 in the
amount $50,000,000 for research and development activities under this
section.
SEC. 722. DIESEL FUELED VEHICLES RESEARCH AND DEVELOPMENT.
(a) Diesel Combustion and After Treatment Technologies.--The
Secretary of Energy shall accelerate research and development directed
toward the improvement of diesel combustion and after treatment
technologies for use in diesel fueled motor vehicles.
(b) Goals.--The Secretary shall carry out subsection (a) with a
view to achieving the following goals:
(1) Compliance with certain emission standards by 2010.--
Developing and demonstrating diesel technologies that, not
later than 2010, meet the following standards:
(A) Tier-2 emission standards.--The tier 2 emission
standards.
(B) Heavy-duty emission standards of 2007.--The
heavy-duty emission standards of 2007.
(2) Post-2010 highly efficient technologies.--Developing
the next generation of low emissions, high efficiency diesel
engine technologies, including homogeneous charge compression
ignition technology.
(c) Authorization of Appropriations.--Funds are hereby authorized
to be appropriated for each of fiscal years 2006, 2007, and 2008 in the
amount of $75,000,000 for research and development of advanced
combustion engines and advanced fuels.
SEC. 723. PROCUREMENT OF ALTERNATIVE FUELED PASSENGER AUTOMOBILES.
(a) Vehicle Fleets Not Covered by Requirement in Energy Policy Act
of 1992.--The head of each agency of the executive branch shall
coordinate with the Administrator of General Services to ensure that
only alternative fueled vehicles are procured by or for each agency
fleet of passenger automobiles that is not in a fleet of vehicles to
which section 303 of the Energy Policy Act of 1992 (42 U.S.C. 13212)
applies.
(b) Waiver Authority.--The head of an agency, in consultation with
the Administrator, may waive the applicability of the policy regarding
the procurement of alternative fueled vehicles in subsection (a) to--
(1) the procurement for such agency of any vehicles
described in subparagraphs (A) through (F) of section 303(b)(3)
of the Energy Policy Act of 1992 (42 U.S.C. 13212(b)(3)); or
(2) a procurement of vehicles for such agency if the
procurement of alternative fueled vehicles cannot meet the
requirements of the agency for vehicles due to insufficient
availability of the alternative fuel used to power such
vehicles.
(c) Applicability to Procurements After Fiscal Year 2005.--This
subsection applies with respect to procurements of alternative fueled
vehicles in fiscal year 2006 and subsequent fiscal years.
SEC. 724. PROCUREMENT OF HYBRID LIGHT DUTY TRUCKS.
(a) Vehicle Fleets Not Covered by Requirement in Energy Policy Act
of 1992.--
(1) Hybrid vehicles.--The head of each agency of the
executive branch shall coordinate with the Administrator of
General Services to ensure that only hybrid vehicles are
procured by or for each agency fleet of light duty trucks that
is not in a fleet of vehicles to which section 303 of the
Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
(2) Waiver authority.--The head of an agency, in
consultation with the Administrator, may waive the
applicability of the policy regarding the procurement of hybrid
vehicles in paragraph (1) to that agency to the extent that the
head of that agency determines necessary--
(A) to meet specific requirements of the agency for
capabilities of light duty trucks;
(B) to procure vehicles consistent with the
standards applicable to the procurement of fleet
vehicles for the Federal Government;
(C) to adjust to limitations on the commercial
availability of light duty trucks that are hybrid
vehicles; or
(D) to avoid the necessity of procuring a hybrid
vehicle for the agency when each of the hybrid vehicles
available for meeting the requirements of the agency
has a cost to the United States that exceeds the costs
of comparable nonhybrid vehicles by a factor that is
significantly higher than the difference between--
(i) the real cost of the hybrid vehicle to
retail purchasers, taking into account the
benefit of any tax incentives available to
retail purchasers for the purchase of the
hybrid vehicle; and
(ii) the costs of the comparable nonhybrid
vehicles to retail purchasers.
(3) Applicability to procurements after fiscal year 2005.--
This subsection applies with respect to procurements of light
duty trucks in fiscal year 2006 and subsequent fiscal years.
(b) Inapplicability to Department of Defense.--This section does
not apply to the Department of Defense, which is subject to comparable
requirements under section 318 of the National Defense Authorization
Act for Fiscal Year 2002 (Public Law 107-107; 115 Stat. 1055; 10 U.S.C.
2302 note).
SEC. 725. DEFINITIONS.
In this chapter:
(1) Alternative fueled vehicle.--The term ``alternative
fueled vehicle'' means--
(A) an alternative fueled vehicle, as defined in
section 301(3) of the Energy Policy Act of 1992 (42
U.S.C. 13211(3));
(B) a motor vehicle that operates on a blend of
fuel that is at least 20 percent (by volume) biodiesel,
as defined in section 312(f) of the Energy Policy Act
of 1992 (42 U.S.C. 13220(f)); and
(C) a motor vehicle that operates on a blend of
fuel that is at least 20 percent (by volume) bioderived
hydrocarbons (including aliphatic compounds) produced
from agricultural and animal waste.
(2) Heavy-duty emission standards of 2007.--The term
``heavy-duty emission standards of 2007'' means the motor
vehicle emission standards promulgated by the Administrator of
the Environmental Protection Agency on January 18, 2001, under
section 202 of the Clean Air Act to apply to heavy-duty
vehicles of model years beginning with the 2007 vehicle model
year.
(3) Hybrid vehicle.--The term ``hybrid vehicle'' means--
(A) a motor vehicle that draws propulsion energy
from on board sources of stored energy that are both--
(i) an internal combustion or heat engine
using combustible fuel; and
(ii) a rechargeable energy storage system;
and
(B) any other vehicle that is defined as a hybrid
vehicle in regulations prescribed by the Secretary of
Energy for the administration of title III of the
Energy Policy Act of 1992.
(4) Motor vehicle.--The term ``motor vehicle'' means any
vehicle that is manufactured primarily for use on public
streets, roads, and highways (not including a vehicle operated
exclusively on a rail or rails) and that has at least four
wheels.
(5) Tier 2 emission standards defined.--The term ``tier 2
emission standards'' means the motor vehicle emission standards
promulgated by the Administrator of the Environmental
Protection Agency on February 10, 2000, under section 202 of
the Clean Air Act (42 U.S.C. 7521) to apply to passenger
automobiles, light trucks, and larger passenger vehicles of
model years after the 2003 vehicle model year.
(6) Terms defined in epa regulations.--The terms
``passenger automobile'' and ``light truck'' have the meanings
given such terms in regulations prescribed by the Administrator
of the Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C. 7521
et seq.).
Subtitle C--Miscellaneous
SEC. 731. RAILROAD EFFICIENCY.
(a) Establishment.--The Secretary shall (in cooperation with the
Secretary of Transportation and the Administrator of the Environmental
Protection Agency) establish a cost-shared, public-private research
partnership involving the Federal Government, railroad carriers,
locomotive manufacturers and equipment suppliers, and the Association
of American Railroads, to develop and demonstrate railroad locomotive
technologies that increase fuel economy, reduce emissions, and lower
costs of operation.
(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section--
(1) $25,000,000 for fiscal year 2006;
(2) $35,000,000 for fiscal year 2007; and
(3) $50,000,000 for fiscal year 2008.
SEC. 732. CONSERVE BY BICYCLING PROGRAM.
(a) Definitions.--In this section:
(1) Program.--The term ``program'' means the Conserve by
Bicycling Program established by subsection (b).
(2) Secretary.--The term ``Secretary'' means the Secretary
of Transportation.
(b) Establishment.--There is established within the Department of
Transportation a program to be known as the ``Conserve by Bicycling
Program''.
(c) Projects.--
(1) In general.--In carrying out the program, the Secretary
shall establish not more than 10 pilot projects that are--
(A) dispersed geographically throughout the United
States; and
(B) designed to conserve energy resources by
encouraging the use of bicycles in place of motor
vehicles.
(2) Requirements.--A pilot project described in paragraph
(1) shall--
(A) use education and marketing to convert motor
vehicle trips to bicycle trips;
(B) document project results and energy savings (in
estimated units of energy conserved);
(C) facilitate partnerships among interested
parties in at least 2 of the fields of--
(i) transportation;
(ii) law enforcement;
(iii) education;
(iv) public health;
(v) environment; and
(vi) energy;
(D) maximize bicycle facility investments;
(E) demonstrate methods that may be used in other
regions of the United States; and
(F) facilitate the continuation of ongoing programs
that are sustained by local resources.
(3) Cost sharing.--At least 20 percent of the cost of each
pilot project described in paragraph (1) shall be provided from
non-Federal sources.
(d) Energy and Bicycling Research Study.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall enter into a
contract with the National Academy of Sciences for, and the
National Academy of Sciences shall conduct and submit to
Congress a report on, a study on the feasibility of converting
motor vehicle trips to bicycle trips.
(2) Components.--The study shall--
(A) document the results or progress of the pilot
projects under subsection (c);
(B) determine the type and duration of motor
vehicle trips that people in the United States may
feasibly make by bicycle, taking into consideration
factors such as--
(i) weather;
(ii) land use and traffic patterns;
(iii) the carrying capacity of bicycles;
and
(iv) bicycle infrastructure;
(C) determine any energy savings that would result
from the conversion of motor vehicle trips to bicycle
trips;
(D) include a cost-benefit analysis of bicycle
infrastructure investments; and
(E) include a description of any factors that would
encourage more motor vehicle trips to be replaced with
bicycle trips.
(e) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $6,200,000, to
remain available until expended, of which--
(1) $5,150,000 shall be used to carry out pilot projects
described in subsection (c);
(2) $300,000 shall be used by the Secretary to coordinate,
publicize, and disseminate the results of the program; and
(3) $750,000 shall be used to carry out subsection (d).
SEC. 733. REDUCTION OF ENGINE IDLING OF HEAVY-DUTY VEHICLES.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Advanced truck stop electrification system.--The term
``advanced truck stop electrification system'' means a
stationary system that delivers heat, air conditioning,
electricity, and communications, and is capable of providing
verifiable and auditable evidence of use of those services, to
a heavy-duty vehicle and any occupants of the heavy-duty
vehicle without relying on components mounted onboard the
heavy-duty vehicle for delivery of those services.
(3) Auxiliary power unit.--The term ``auxiliary power
unit'' means an integrated system that--
(A) provides heat, air conditioning, engine
warming, and electricity to the factory-installed
components on a heavy-duty vehicle as if the main drive
engine of the heavy-duty vehicle were running; and
(B) is certified by the Administrator under part 89
of title 40, Code of Federal Regulations (or any
successor regulation), as meeting applicable emission
standards.
(4) Heavy-duty vehicle.--The term ``heavy-duty vehicle''
means a vehicle that--
(A) has a gross vehicle weight rating greater than
12,500 pounds; and
(B) is powered by a diesel engine.
(5) Idle reduction technology.--The term ``idle reduction
technology'' means an advanced truck stop electrification
system, auxiliary power unit, or other device or system of
devices that--
(A) is used to reduce long-duration idling of a
heavy-duty vehicle; and
(B) allows for the main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle to be shut
down.
(6) Long-duration idling.--
(A) In general.--The term ``long-duration idling''
means the operation of a main drive engine or auxiliary
refrigeration engine of a heavy-duty vehicle, for a
period greater than 15 consecutive minutes, at a time
at which the main drive engine is not engaged in gear.
(B) Exclusions.--The term ``long-duration idling''
does not include the operation of a main drive engine
or auxiliary refrigeration engine of a heavy-duty
vehicle during a routine stoppage associated with
traffic movement or congestion.
(b) Idle Reduction Technology Benefits, Programs, and Studies.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall--
(A)(i) commence a review of the mobile source air
emission models of the Environmental Protection Agency
used under the Clean Air Act (42 U.S.C. 7401 et seq.)
to determine whether the models accurately reflect the
emissions resulting from long-duration idling of heavy-
duty vehicles and other vehicles and engines; and
(ii) update those models as the Administrator
determines to be appropriate; and
(B)(i) commence a review of the emission reductions
achieved by the use of idle reduction technology; and
(ii) complete such revisions of the regulations and
guidance of the Environmental Protection Agency as the
Administrator determines to be appropriate.
(2) Deadline for completion.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall--
(A) complete the reviews under subparagraphs (A)(i)
and (B)(i) of paragraph (1); and
(B) prepare and make publicly available 1 or more
reports on the results of the reviews.
(3) Discretionary inclusions.--The reviews under
subparagraphs (A)(i) and (B)(i) of paragraph (1) and the
reports under paragraph (2)(B) may address the potential fuel
savings resulting from use of idle reduction technology.
(4) Idle reduction deployment program.--
(A) Establishment.--
(i) In general.--Not later than 90 days
after the date of enactment of this Act, the
Administrator, in consultation with the
Secretary of Transportation, shall establish a
program to support deployment of idle reduction
technology.
(ii) Priority.--The Administrator shall
give priority to the deployment of idle
reduction technology based on beneficial
effects on air quality and ability to lessen
the emission of criteria air pollutants.
(B) Funding.--
(i) Authorization of appropriations.--There
are authorized to be appropriated to the
Administrator to carry out subparagraph (A)--
(I) $19,500,000 for fiscal year
2006;
(II) $30,000,000 for fiscal year
2007; and
(III) $45,000,000 for fiscal year
2008.
(ii) Cost sharing.--Subject to clause
(iii), the Administrator shall require at least
50 percent of the costs directly and
specifically related to any project under this
section to be provided from non-Federal
sources.
(iii) Necessary and appropriate
reductions.--The Administrator may reduce the
non-Federal requirement under clause (ii) if
the Administrator determines that the reduction
is necessary and appropriate to meet the
objectives of this section.
(5) Idling location study.--
(A) In general.--Not later than 90 days after the
date of enactment of this Act, the Administrator, in
consultation with the Secretary of Transportation,
shall commence a study to analyze all locations at
which heavy-duty vehicles stop for long-duration
idling, including--
(i) truck stops;
(ii) rest areas;
(iii) border crossings;
(iv) ports;
(v) transfer facilities; and
(vi) private terminals.
(B) Deadline for completion.--Not later than 180
days after the date of enactment of this Act, the
Administrator shall--
(i) complete the study under subparagraph
(A); and
(ii) prepare and make publicly available 1
or more reports of the results of the study.
(c) Vehicle Weight Exemption.--Section 127(a) of title 23, United
States Code, is amended--
(1) by designating the first through eleventh sentences as
paragraphs (1) through (11), respectively; and
(2) by adding at the end the following:
``(12) Heavy duty vehicles.--
``(A) In general.--Subject to subparagraphs (B) and
(C), in order to promote reduction of fuel use and
emissions because of engine idling, the maximum gross
vehicle weight limit and the axle weight limit for any
heavy-duty vehicle equipped with an idle reduction
technology shall be increased by a quantity necessary
to compensate for the additional weight of the idle
reduction system.
``(B) Maximum weight increase.--The weight increase
under subparagraph (A) shall be not greater than 250
pounds.
``(C) Proof.--On request by a regulatory agency or
law enforcement agency, the vehicle operator shall
provide proof (through demonstration or certification)
that--
``(i) the idle reduction technology is
fully functional at all times; and
``(ii) the 250-pound gross weight increase
is not used for any purpose other than the use
of idle reduction technology described in
subparagraph (A).''.
SEC. 734. BIODIESEL ENGINE TESTING PROJECT.
(a) Definition of Biodiesel.--In this section, the term
``biodiesel'' means a diesel fuel substitute produced from nonpetroleum
renewable resources that meets--
(1) the registration requirements for fuels and fuel
additives established under section 211 of the Clean Air Act
(42 U.S.C. 7545); and
(2) the American Society for Testing and Materials Standard
D6751-02a ``Standard Specification for Biodiesel Fuel (B100)
Blend Stock for Distillate Fuels''.
(b) Program.--Not later than 180 days after the date of enactment
of this Act, the Secretary shall initiate a project, in partnership
with diesel engine, diesel fuel injection system, and diesel vehicle
manufacturers and diesel and biodiesel fuel providers, to provide
biodiesel testing in advanced diesel engine and fuel system technology.
(c) Scope.--The project shall provide for testing to determine the
impact of biodiesel on current and future emission control
technologies, with emphasis on--
(1) the impact of biodiesel on emissions warranty, in-use
liability, and anti-tampering provisions;
(2) the impact of long-term use of biodiesel on engine
operations;
(3) the options for optimizing those technologies for both
emissions and performance when switching between biodiesel and
diesel fuel; and
(4) the impact of using biodiesel in those fueling systems
and engines when used as a blend with diesel fuel containing a
maximum of 15-parts-per-million sulfur content, as mandated by
the Administrator of the Environmental Protection Agency during
2006.
(d) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the
results of the project, including--
(1) a comprehensive analysis of impacts from biodiesel on
engine operation for both existing and expected future diesel
technologies; and
(2) recommendations for ensuring optimal emissions
reductions and engine performance with biodiesel.
(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2006 through 2008.
SEC. 735. INVESTIGATION OF GASOLINE PRICES.
(a) Investigation.--Not later than 90 days after the date of
enactment of this Act, the Federal Trade Commission shall conduct an
investigation to determine if the price of gasoline is being
artificially manipulated by reducing refinery capacity or by any other
form of market manipulation or price gouging practices.
(b) Evaluation and Analysis.--The Secretary shall direct the
National Petroleum Council to conduct an evaluation and analysis to
determine whether, and to what extent, environmental and other
regulations affect new domestic refinery construction and significant
expansion of existing refinery capacity.
(c) Reports to Congress.--
(1) Investigation.--On completion of the investigation
under subsection (a), the Federal Trade Commission shall submit
to Congress a report that describes--
(A) the results of the investigation; and
(B) any recommendations of the Federal Trade
Commission.
(2) Evaluation and analysis.--On completion of the
evaluation and analysis under subsection (b), the Secretary
shall submit to Congress a report that describes--
(A) the results of the evaluation and analysis; and
(B) any recommendations of the National Petroleum
Council.
Subtitle D--Federal and State Procurement
SEC. 741. DEFINITIONS.
In this subtitle:
(1) Department.--The term ``Department'' means the
Department of Energy.
(2) Fuel cell.--The term ``fuel cell'' means a device that
directly converts the chemical energy of a fuel and an oxidant
into electricity by electrochemical processes occurring at
separate electrodes in the device.
(3) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
(4) Stationary; portable.--The terms ``stationary'' and
``portable'', when used in reference to a fuel cell, include--
(A) continuous electric power; and
(B) backup electric power.
(5) Task force.--The term ``Task Force'' means the Hydrogen
and Fuel Cell Technical Task Force established under section
102(a) of the Spark M. Matsunaga Hydrogen Research,
Development, and Demonstration Act of 1990 (as amended by
section 801).
(6) Technical advisory committee.--The term ``Technical
Advisory Committee'' means the independent Technical Advisory
Committee selected under section 102(d) of the Spark M.
Matsunaga Hydrogen Research, Development, and Demonstration Act
of 1990 (as added by section 801).
SEC. 742. FEDERAL AND STATE PROCUREMENT OF FUEL CELL VEHICLES AND
HYDROGEN ENERGY SYSTEMS.
(a) Purposes.--The purposes of this section are--
(1) to stimulate acceptance by the market of fuel cell
vehicles and hydrogen energy systems;
(2) to support development of technologies relating to fuel
cell vehicles, public refueling stations, and hydrogen energy
systems; and
(3) to require the Federal government, which is the largest
single user of energy in the United States, to adopt those
technologies as soon as practicable after the technologies are
developed, in conjunction with private industry partners.
(b) Federal Leases and Purchases.--
(1) Requirement.--
(A) In general.--Not later than January 1, 2010,
the head of any Federal agency that uses a light-duty
or heavy-duty vehicle fleet shall lease or purchase
fuel cell vehicles and hydrogen energy systems to meet
any applicable energy savings goal described in
subsection (c).
(B) Learning demonstration vehicles.--The Secretary
may lease or purchase appropriate vehicles developed
under section 201 of the Spark M. Matsunaga Hydrogen
Research, Development, and Demonstration Act of 1990
(as added by section 801) to meet the requirement in
subparagraph (A).
(2) Costs of leases and purchases.--
(A) In general.--The Secretary, in cooperation with
the Task Force and the Technical Advisory Committee,
shall pay to Federal agencies (or share the cost under
interagency agreements) the difference in cost
between--
(i) the cost to the agencies of leasing or
purchasing fuel cell vehicles and hydrogen
energy systems under paragraph (1); and
(ii) the cost to the agencies of a feasible
alternative to leasing or purchasing fuel cell
vehicles and hydrogen energy systems, as
determined by the Secretary.
(B) Competitive costs and management structures.--
In carrying out subparagraph (A), the Secretary, in
consultation with the agency, may use the General
Services Administration or any commercial vendor to
ensure--
(i) a cost-effective purchase of a fuel
cell vehicle or hydrogen energy system; or
(ii) a cost-effective management structure
of the lease of a fuel cell vehicle or hydrogen
energy system.
(3) Exception.--
(A) In general.--If the Secretary determines that
the head of an agency described in paragraph (1) cannot
find an appropriately efficient and reliable fuel cell
vehicle or hydrogen energy system in accordance with
paragraph (1), that agency shall be excepted from
compliance with paragraph (1).
(B) Consideration.--In making a determination under
subparagraph (A), the Secretary shall consider--
(i) the needs of the agency; and
(ii) an evaluation performed by--
(I) the Task Force; or
(II) the Technical Advisory
Committee.
(c) Energy Savings Goals.--
(1) In general.--
(A) Regulations.--Not later than December 31, 2006,
the Secretary shall--
(i) in cooperation with the Task Force,
promulgate regulations for the period of 2008
through 2010 that extend and augment energy
savings goals for each Federal agency, in
accordance with any Executive order issued
after March 2000; and
(ii) promulgate regulations to expand the
minimum Federal fleet requirement and credit
allowances for fuel cell vehicle systems under
section 303 of the Energy Policy Act of 1992
(42 U.S.C. 13212).
(B) Review, evaluation, and new regulations.--Not
later than December 31, 2010, the Secretary shall--
(i) review the regulations promulgated
under subparagraph (A);
(ii) evaluate any progress made toward
achieving energy savings by Federal agencies;
and
(iii) promulgate new regulations for the
period of 2011 through 2015 to achieve
additional energy savings by Federal agencies
relating to technical and cost-performance
standards.
(2) Offsetting energy savings goals.--An agency that leases
or purchases a fuel cell vehicle or hydrogen energy system in
accordance with subsection (b)(1) may use that lease or
purchase to count toward an energy savings goal of the agency.
(d) Cooperative Program With State Agencies.--
(1) In general.--The Secretary may establish a cooperative
program with State agencies managing motor vehicle fleets to
encourage purchase of fuel cell vehicles by the agencies.
(2) Incentives.--In carrying out the cooperative program,
the Secretary may offer incentive payments to a State agency to
assist with the cost of planning, differential purchases, and
administration.
(e) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section--
(1) $15,000,000 for fiscal year 2008;
(2) $25,000,000 for fiscal year 2009;
(3) $65,000,000 for fiscal year 2010; and
(4) such sums as are necessary for each of fiscal years
2011 through 2015.
SEC. 743. FEDERAL PROCUREMENT OF STATIONARY, PORTABLE, AND MICRO FUEL
CELLS.
(a) Purposes.--The purposes of this section are--
(1) to stimulate acceptance by the market of stationary,
portable, and micro fuel cells; and
(2) to support development of technologies relating to
stationary, portable, and micro fuel cells.
(b) Federal Leases and Purchases.--
(1) In general.--Not later than January 1, 2006, the head
of any Federal agency that uses electrical power from
stationary, portable, or microportable devices shall lease or
purchase a stationary, portable, or micro fuel cell to meet any
applicable energy savings goal described in subsection (c).
(2) Costs of leases and purchases.--
(A) In general.--The Secretary, in cooperation with
the Task Force and the Technical Advisory Committee,
shall pay the cost to Federal agencies (or share the
cost under interagency agreements) of leasing or
purchasing stationary, portable, and micro fuel cells
under paragraph (1).
(B) Competitive costs and management structures.--
In carrying out subparagraph (A), the Secretary, in
consultation with the agency, may use the General
Services Administration or any commercial vendor to
ensure--
(i) a cost-effective purchase of a
stationary, portable, or micro fuel cell; or
(ii) a cost-effective management structure
of the lease of a stationary, portable, or
micro fuel cell.
(3) Exception.--
(A) In general.--If the Secretary determines that
the head of an agency described in paragraph (1) cannot
find an appropriately efficient and reliable
stationary, portable, or micro fuel cell in accordance
with paragraph (1), that agency shall be excepted from
compliance with paragraph (1).
(B) Consideration.--In making a determination under
subparagraph (A), the Secretary shall consider--
(i) the needs of the agency; and
(ii) an evaluation performed by--
(I) the Task Force; or
(II) the Technical Advisory
Committee of the Task Force.
(c) Energy Savings Goals.--An agency that leases or purchases a
stationary, portable, or micro fuel cell in accordance with subsection
(b)(1) may use that lease or purchase to count toward an energy savings
goal described in section 732(c)(1) that is applicable to the agency.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section--
(1) $20,000,000 for fiscal year 2006;
(2) $50,000,000 for fiscal year 2007;
(3) $75,000,000 for fiscal year 2008;
(4) $100,000,000 for fiscal year 2009;
(5) $100,000,000 for fiscal year 2010; and
(6) such sums as are necessary for each of fiscal years
2011 through 2015.
Subtitle E--Diesel Emissions Reduction
SEC. 751. DEFINITIONS.
In this subtitle:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Certified engine configuration.--The term ``certified
engine configuration'' means a new, rebuilt, or remanufactured
engine configuration--
(A) that has been certified or verified by--
(i) the Administrator; or
(ii) the California Air Resources Board;
(B) that meets or is rebuilt or remanufactured to a
more stringent set of engine emission standards, as
determined by the Administrator; and
(C) in the case of a certified engine configuration
involving the replacement of an existing engine or
vehicle, an engine configuration that replaced an
engine that was--
(i) removed from the vehicle; and
(ii) returned to the supplier for
remanufacturing to a more stringent set of
engine emissions standards or for scrappage.
(3) Eligible entity.--The term ``eligible entity'' means--
(A) a regional, State, local, or tribal agency with
jurisdiction over transportation or air quality; and
(B) a nonprofit organization or institution that--
(i) represents organizations that own or
operate diesel fleets; or
(ii) has, as its principal purpose, the
promotion of transportation or air quality.
(4) Emerging technology.--The term ``emerging technology''
means a technology that is not certified or verified by the
Administrator or the California Air Resources Board but for
which an approvable application and test plan has been
submitted for verification to the Administrator or the
California Air Resources Board.
(5) Heavy-duty truck.--The term ``heavy-duty truck'' has
the meaning given the term ``heavy duty vehicle'' in section
202 of the Clean Air Act (42 U.S.C. 7521).
(6) Medium-duty truck.--The term ``medium-duty truck'' has
such meaning as shall be determined by the Administrator, by
regulation.
(7) Verified technology.--The term ``verified technology''
means a pollution control technology, including a retrofit
technology, that has been verified by--
(A) the Administrator; or
(B) the California Air Resources Board.
SEC. 752. NATIONAL GRANT AND LOAN PROGRAMS.
(a) In General.--The Administrator shall use 70 percent of the
funds made available to carry out this subtitle for each fiscal year to
provide grants and low-cost revolving loans, as determined by the
Administrator, on a competitive basis, to eligible entities to achieve
significant reductions in diesel emissions in terms of--
(1) tons of pollution produced; and
(2) diesel emissions exposure, particularly from fleets
operating in areas designated by the Administrator as poor air
quality areas.
(b) Distribution.--
(1) In general.--The Administrator shall distribute funds
made available for a fiscal year under this subtitle in
accordance with this section.
(2) Fleets.--The Administrator shall provide not less than
50 percent of funds available for a fiscal year under this
section to eligible entities for the benefit of public fleets.
(3) Engine configurations and technologies.--
(A) Certified engine configurations and verified
technologies.--The Administrator shall provide not less
than 90 percent of funds available for a fiscal year
under this section to eligible entities for projects
using--
(i) a certified engine configuration; or
(ii) a verified technology.
(B) Emerging technologies.--
(i) In general.--The Administrator shall
provide not more than 10 percent of funds
available for a fiscal year under this section
to eligible entities for the development and
commercialization of emerging technologies.
(ii) Application and test plan.--To receive
funds under clause (i), a manufacturer, in
consultation with an eligible entity, shall
submit for verification to the Administrator or
the California Air Resources Board a test plan
for the emerging technology, together with the
application under subsection (c).
(c) Applications.--
(1) In general.--To receive a grant or loan under this
section, an eligible entity shall submit to the Administrator
an application at a time, in a manner, and including such
information as the Administrator may require.
(2) Inclusions.--An application under this subsection shall
include--
(A) a description of the air quality of the area
served by the eligible entity;
(B) the quantity of air pollution produced by the
diesel fleet in the area served by the eligible entity;
(C) a description of the project proposed by the
eligible entity, including--
(i) any certified engine configuration,
verified technology, or emerging technology to
be used by the eligible entity; and
(ii) the means by which the project will
achieve a significant reduction in diesel
emissions;
(D) an evaluation (using methodology approved by
the Administrator or the National Academy of Sciences)
of the quantifiable and unquantifiable benefits of the
emissions reductions of the proposed project;
(E) an estimate of the cost of the proposed
project;
(F) a description of the age and expected lifetime
control of the equipment used by the eligible entity;
(G) a description of the diesel fuel available to
the eligible entity, including the sulfur content of
the fuel; and
(H) provisions for the monitoring and verification
of the project.
(3) Priority.--In providing a grant or loan under this
section, the Administrator shall give priority to proposed
projects that, as determined by the Administrator--
(A) maximize public health benefits;
(B) are the most cost-effective;
(C) serve areas--
(i) with the highest population density;
(ii) that are poor air quality areas,
including areas identified by the Administrator
as--
(I) in nonattainment or maintenance
of national ambient air quality
standards for a criteria pollutant;
(II) Federal Class I areas; or
(III) areas with toxic air
pollutant concerns;
(iii) that receive a disproportionate
quantity of air pollution from a diesel fleet,
including ports, rail yards, and distribution
centers; or
(iv) that use a community-based
multistakeholder collaborative process to
reduce toxic emissions;
(D) include a certified engine configuration,
verified technology, or emerging technology that has a
long expected useful life;
(E) will maximize the useful life of any retrofit
technology used by the eligible entity; and
(F) use diesel fuel with a sulfur content of less
than or equal to 15 parts per million, as the
Administrator determines to be appropriate.
(d) Use of Funds.--
(1) In general.--An eligible entity may use a grant or loan
provided under this section to fund the costs of--
(A) a retrofit technology (including any
incremental costs of a repowered or new diesel engine)
that significantly reduces emissions through
development and implementation of a certified engine
configuration, verified technology, or emerging
technology for--
(i) a bus;
(ii) a medium-duty truck or a heavy-duty
truck;
(iii) a marine engine;
(iv) a locomotive; or
(v) a nonroad engine or vehicle used in--
(I) construction;
(II) handling of cargo (including
at a port or airport);
(III) agriculture;
(IV) mining; or
(V) energy production; or
(B) an idle-reduction program involving a vehicle
or equipment described in subparagraph (A).
(2) Regulatory programs.--
(A) In general.--Notwithstanding paragraph (1), no
grant or loan provided under this section shall be used
to fund the costs of emissions reductions that are
mandated under Federal, State or local law.
(B) Mandated.--For purposes of subparagraph (A),
voluntary or elective emission reduction measures shall
not be considered ``mandated'', regardless of whether
the reductions are included in the State implementation
plan of a State.
SEC. 753. STATE GRANT AND LOAN PROGRAMS.
(a) In General.--Subject to the availability of adequate
appropriations, the Administrator shall use 30 percent of the funds
made available for a fiscal year under this subtitle to support grant
and loan programs administered by States that are designed to achieve
significant reductions in diesel emissions.
(b) Applications.--The Administrator shall--
(1) provide to States guidance for use in applying for
grant or loan funds under this section, including information
regarding--
(A) the process and forms for applications;
(B) permissible uses of funds received; and
(C) the cost-effectiveness of various emission
reduction technologies eligible to be carried out using
funds provided under this section; and
(2) establish, for applications described in paragraph
(1)--
(A) an annual deadline for submission of the
applications;
(B) a process by which the Administrator shall
approve or disapprove each application; and
(C) a streamlined process by which a State may
renew an application described in paragraph (1) for
subsequent fiscal years.
(c) Allocation of Funds.--
(1) In general.--For each fiscal year, the Administrator
shall allocate among States for which applications are approved
by the Administrator under subsection (b)(2)(B) funds made
available to carry out this section for the fiscal year.
(2) Allocation.--Using not more than 20 percent of the
funds made available to carry out this subtitle for a fiscal
year, the Administrator shall provide to each State described
in paragraph (1) for the fiscal year an allocation of funds
that is equal to--
(A) if each of the 50 States qualifies for an
allocation, an amount equal to 2 percent of the funds
made available to carry out this section; or
(B) if fewer than 50 States qualifies for an
allocation, an amount equal to the amount described in
subparagraph (A), plus an additional amount equal to
the product obtained by multiplying--
(i) the proportion that--
(I) the population of the State;
bears to
(II) the population of all States
described in paragraph (1); by
(ii) the amount of funds remaining after
each State described in paragraph (1) receives
the 2-percent allocation under this paragraph.
(3) State matching incentive.--
(A) In general.--If a State agrees to match the
allocation provided to the State under paragraph (2)
for a fiscal year, the Administrator shall provide to
the State for the fiscal year an additional amount
equal to 50 percent of the allocation of the State
under paragraph (2).
(B) Requirements.--A State--
(i) may not use funds received under this
subtitle to pay a matching share required under
this subsection; and
(ii) shall not be required to provide a
matching share for any additional amount
received under subparagraph (A).
(4) Unclaimed funds.--Any funds that are not claimed by a
State for a fiscal year under this subsection shall be used to
carry out section 742.
(d) Administration.--
(1) In general.--Subject to paragraphs (2) and (3) and, to
the extent practicable, the priority areas listed in section
742(c)(3), a State shall use any funds provided under this
section to develop and implement such grant and low-cost
revolving loan programs in the State as are appropriate to meet
State needs and goals relating to the reduction of diesel
emissions.
(2) Apportionment of funds.--The Governor of a State that
receives funding under this section may determine the portion
of funds to be provided as grants or loans.
(3) Use of funds.--A grant or loan provided under this
section may be used for a project relating to--
(A) a certified engine configuration; or
(B) a verified technology.
SEC. 754. EVALUATION AND REPORT.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, and biennially thereafter, the Administrator shall submit
to Congress a report evaluating the implementation of the programs
under this subtitle.
(b) Inclusions.--The report shall include a description of--
(1) the total number of grant applications received;
(2) each grant or loan made under this subtitle, including
the amount of the grant or loan;
(3) each project for which a grant or loan is provided
under this subtitle, including the criteria used to select the
grant or loan recipients;
(4) the estimated air quality benefits, cost-effectiveness,
and cost-benefits of the grant and loan programs under this
subtitle;
(5) the problems encountered by projects for which a grant
or loan is provided under this subtitle; and
(6) any other information the Administrator considers to be
appropriate.
SEC. 755. OUTREACH AND INCENTIVES.
(a) Definition of Eligible Technology.--In this section, the term
``eligible technology'' means--
(1) a verified technology; or
(2) an emerging technology.
(b) Technology Transfer Program.--
(1) In general.--The Administrator shall establish a
program under which the Administrator--
(A) informs stakeholders of the benefits of
eligible technologies; and
(B) develops nonfinancial incentives to promote the
use of eligible technologies.
(2) Eligible stakeholders.--Eligible stakeholders under
this section include--
(A) equipment owners and operators;
(B) emission control technology manufacturers;
(C) engine and equipment manufacturers;
(D) State and local officials responsible for air
quality management;
(E) community organizations; and
(F) public health and environmental organizations.
(c) State Implementation Plans.--The Administrator shall develop
appropriate guidance to provide credit to a State for emission
reductions in the State created by the use of eligible technologies
through a State implementation plan under section 110 of the Clean Air
Act (42 U.S.C. 7410).
(d) International Markets.--The Administrator, in coordination with
the Department of Commerce and industry stakeholders, shall inform
foreign countries with air quality problems of the potential of
technology developed or used in the United States to provide emission
reductions in those countries.
SEC. 756. EFFECT OF SUBTITLE.
Nothing in this subtitle affects any authority under the Clean Air
Act (42 U.S.C. 7401 et seq.) in existence on the day before the date of
enactment of this Act.
SEC. 757. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this subtitle
$200,000,000 for each of fiscal years 2006 through 2010, to remain
available until expended.
TITLE VIII--HYDROGEN
SEC. 801. HYDROGEN RESEARCH, DEVELOPMENT, AND DEMONSTRATION.
The Spark M. Matsunaga Hydrogen Research, Development, and
Demonstration Act of 1990 (42 U.S.C. 12401 et seq.) is amended to read
as follows:
``SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
``(a) Short Title.--This Act may be cited as the `Spark M.
Matsunaga Hydrogen Research, Development, and Demonstration Act of
1990'.
``(b) Table of Contents.--The table of contents of this Act is as
follows:
``Sec. 1. Short title; table of contents.
``Sec. 2. Purposes.
``Sec. 3. Definitions.
``TITLE I--HYDROGEN AND FUEL CELLS
``Sec. 101. Hydrogen and fuel cell technology research and
development.
``Sec. 102. Task Force.
``Sec. 103. Technology transfer.
``Sec. 104. Authorization of appropriations.
``TITLE II--HYDROGEN AND FUEL CELL DEMONSTRATION
``Sec. 201. Hydrogen Supply and Fuel Cell Demonstration
Program.
``Sec. 202. Authorization of appropriations.
``TITLE III--REGULATORY MANAGEMENT
``Sec. 301. Codes and standards.
``Sec. 302. Disclosure.
``Sec. 303. Authorization of appropriations.
``TITLE IV--REPORTS
``Sec. 401. Deployment of hydrogen technology.
``Sec. 402. Authorization of appropriations.
``TITLE V--TERMINATION OF AUTHORITY
``Sec. 501. Termination of authority.
``SEC. 2. PURPOSES.
``The purposes of this Act are--
``(1) to enable and promote comprehensive development,
demonstration, and commercialization of hydrogen and fuel cell
technology in partnership with industry;
``(2) to make critical public investments in building
strong links to private industry, institutions of higher
education, National Laboratories, and research institutions to
expand innovation and industrial growth;
``(3) to build a mature hydrogen economy that creates fuel
diversity in the massive transportation sector of the United
States;
``(4) to sharply decrease the dependency of the United
States on imported oil, eliminate most emissions from the
transportation sector, and greatly enhance our energy security;
and
``(5) to create, strengthen, and protect a sustainable
national energy economy.
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Department.--The term `Department' means the
Department of Energy.
``(2) Fuel cell.--The term `fuel cell' means a device that
directly converts the chemical energy of a fuel, which is
supplied from an external source, and an oxidant into
electricity by electrochemical processes occurring at separate
electrodes in the device.
``(3) Heavy-duty vehicle.--The term `heavy-duty vehicle'
means a motor vehicle that--
``(A) is rated at more than 8,500 pounds gross
vehicle weight;
``(B) has a curb weight of more than 6,000 pounds;
or
``(C) has a basic vehicle frontal area in excess of
45 square feet.
``(4) Infrastructure.--The term `infrastructure' means the
equipment, systems, or facilities used to produce, distribute,
deliver, or store hydrogen (except for onboard storage).
``(5) Light-duty vehicle.--The term `light-duty vehicle'
means a motor vehicle that is rated at 8,500 or less pounds
gross vehicle weight.
``(6) Secretary.--The term `Secretary' means the Secretary
of Energy.
``(7) Stationary; portable.--The terms `stationary' and
`portable', when used in reference to a fuel cell, include--
``(A) continuous electric power; and
``(B) backup electric power.
``(8) Task force.--The term `Task Force' means the Hydrogen
and Fuel Cell Technical Task Force established under section
102(a).
``(9) Technical advisory committee.--The term `Technical
Advisory Committee' means the independent Technical Advisory
Committee of the Task Force selected under section 102(d).
``TITLE I--HYDROGEN AND FUEL CELLS
``SEC. 101. HYDROGEN AND FUEL CELL TECHNOLOGY RESEARCH AND DEVELOPMENT.
``(a) In General.--The Secretary, in consultation with other
Federal agencies and the private sector, shall conduct a research and
development program on technologies relating to the production,
purification, distribution, storage, and use of hydrogen energy, fuel
cells, and related infrastructure.
``(b) Goal.--The goal of the program shall be to demonstrate and
commercialize the use of hydrogen for transportation (in light-duty
vehicles and heavy-duty vehicles), utility, industrial, commercial and
residential applications.
``(c) Focus.--In carrying out activities under this section, the
Secretary shall focus on factors that are common to the development of
hydrogen infrastructure and the supply of vehicle and electric power
for critical consumer and commercial applications, and that achieve
continuous technical evolution and cost reduction, particularly for
hydrogen production, the supply of hydrogen, storage of hydrogen, and
end uses of hydrogen that--
``(1) steadily increase production, distribution, and end
use efficiency and reduce life-cycle emissions;
``(2) resolve critical problems relating to catalysts,
membranes, storage, lightweight materials, electronic controls,
manufacturability, and other problems that emerge from research
and development;
``(3) enhance sources of renewable fuels and biofuels for
hydrogen production; and
``(4) enable widespread use of distributed electricity
generation and storage.
``(d) Public Education and Research.--In carrying out this section,
the Secretary shall support enhanced public education and research
conducted at institutions of higher education in fundamental sciences,
application design, and systems concepts (including education and
research relating to materials, subsystems, manufacturability,
maintenance, and safety) relating to hydrogen and fuel cells.
``(e) Cost Sharing.--The costs of carrying out projects and
activities under this section shall be shared in accordance with
section 1002 of the Energy Policy Act of 2005.
``SEC. 102. TASK FORCE.
``(a) Establishment.--The Secretary, in consultation with the
Director of the Office of Science and Technology Policy, shall
establish an interagency Task Force, to be known as the `Hydrogen and
Fuel Cell Technical Task Force' to advise the Secretary in carrying out
programs under this Act.
``(b) Membership.--The Task Force shall be comprised of such
representatives of the Office of Science and Technology Policy, the
Environmental Protection Agency, the Department of Transportation, the
Department of Defense, the National Aeronautics and Space
Administration, and such other Federal employees, as the Secretary, in
consultation with the Director of the Office of Science and Technology
Policy, determines to be appropriate.
``(c) Duties.--The Task Force shall review and make any necessary
recommendations to the Secretary on implementation and conduct of
programs under this Act.
``(d) Technical Advisory Committee.--
``(1) In general.--The Secretary shall select such number
of members as the Secretary considers to be appropriate to form
an independent, nonpolitical Technical Advisory Committee.
``(2) Membership.--Each member of the Technical Advisory
Committee shall have scientific, technical, or industrial
expertise, as determined by the Secretary.
``(3) Duties.--The Technical Advisory Committee shall
provide technical advice and assistance to the Task Force and
the Secretary.
``SEC. 103. TECHNOLOGY TRANSFER.
``In carrying out this Act, the Secretary shall carry out programs
that--
``(1) provide for the transfer of critical hydrogen and
fuel cell technologies to the private sector;
``(2) accelerate wider application of those technologies in
the global market;
``(3) foster the exchange of generic, nonproprietary
information; and
``(4) assess technical and commercial viability of
technologies relating to the production, distribution, storage,
and use of hydrogen energy and fuel cells.
``SEC. 104. AUTHORIZATION OF APPROPRIATIONS.
``(a) Hydrogen Supply.--There are authorized to be appropriated to
carry out projects and activities relating to hydrogen production,
storage, distribution and dispensing, transport, education and
coordination, and technology transfer under this title--
``(1) $160,000,000 for fiscal year 2006;
``(2) $200,000,000 for fiscal year 2007;
``(3) $220,000,000 for fiscal year 2008;
``(4) $230,000,000 for fiscal year 2009;
``(5) $250,000,000 for fiscal year 2010; and
``(6) such sums as are necessary for each of fiscal years
2011 through 2015.
``(b) Fuel Cell Technologies.--There are authorized to be
appropriated to carry out projects and activities relating to fuel cell
technologies under this title--
``(1) $150,000,000 for fiscal year 2006;
``(2) $160,000,000 for fiscal year 2007;
``(3) $170,000,000 for fiscal year 2008;
``(4) $180,000,000 for fiscal year 2009;
``(5) $200,000,000 for fiscal year 2010; and
``(6) such sums as are necessary for each of fiscal years
2011 through 2015.
``TITLE II--HYDROGEN AND FUEL CELL DEMONSTRATION
``SEC. 201. HYDROGEN SUPPLY AND FUEL CELL DEMONSTRATION PROGRAM.
``(a) In General.--The Secretary, in consultation with the Task
Force and the Technical Advisory Committee, shall carry out a program
to demonstrate developmental hydrogen and fuel cell systems for mobile,
portable, and stationary uses, using improved versions of the learning
demonstrations program concept of the Department including
demonstrations involving--
``(1) light-duty vehicles;
``(2) heavy-duty vehicles;
``(3) fleet vehicles;
``(4) specialty industrial and farm vehicles; and
``(5) commercial and residential portable, continuous, and
backup electric power generation.
``(b) Other Demonstration Programs.--To develop widespread hydrogen
supply and use options, and assist evolution of technology, the
Secretary shall--
``(1) carry out demonstrations of evolving hydrogen and
fuel cell technologies in national parks, remote island areas,
and on Indian tribal land, as selected by the Secretary;
``(2) in accordance with any code or standards developed in
a region, fund prototype, pilot fleet, and infrastructure
regional hydrogen supply corridors along the interstate highway
system in varied climates across the United States; and
``(3) fund demonstration programs that explore the use of
hydrogen blends, hybrid hydrogen, and hydrogen reformed from
renewable agricultural fuels, including the use of hydrogen in
hybrid electric, heavier duty, and advanced internal
combustion-powered vehicles.
``(c) System Demonstrations.--
``(1) In general.--As a component of the demonstration
program under this section, the Secretary shall provide grants,
on a cost share basis as appropriate, to eligible entities (as
determined by the Secretary) for use in--
``(A) devising system design concepts that provide
for the use of advanced composite vehicles in programs
under section 732 of the Energy Policy Act of 2005
that--
``(i) have as a primary goal the reduction
of drive energy requirements;
``(ii) after 2010, add another research and
development phase to the vehicle and
infrastructure partnerships developed under the
learning demonstrations program concept of the
Department; and
``(iii) are managed through an enhanced
FreedomCAR program within the Department that
encourages involvement in cost-shared projects
by manufacturers and governments; and
``(B) designing a local distributed energy system
that--
``(i) incorporates renewable hydrogen
production, off-grid electricity production,
and fleet applications in industrial or
commercial service;
``(ii) integrates energy or applications
described in clause (i), such as stationary,
portable, micro, and mobile fuel cells, into a
high-density commercial or residential building
complex or agricultural community; and
``(iii) is managed in cooperation with
industry, State, tribal, and local governments,
agricultural organizations, and nonprofit
generators and distributors of electricity.
``(2) Cost sharing.--The costs of carrying out a project or
activity under this subsection shall be shared in accordance
with section 1002 of the Energy Policy Act of 2005.
``(d) Identification of New Research and Development
Requirements.--In carrying out the demonstrations under subsection (a),
the Secretary, in consultation with the Task Force and the Technical
Advisory Committee, shall--
``(1) after 2008 for stationary and portable applications,
and after 2010 for vehicles, identify new research and
development requirements that refine technological concepts,
planning, and applications; and
``(2) during the second phase of the learning
demonstrations under subsection (c)(1)(A)(ii) redesign
subsequent research and development to incorporate those
requirements.
``SEC. 202. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this title--
``(1) $185,000,000 for fiscal year 2006;
``(2) $200,000,000 for fiscal year 2007;
``(3) $250,000,000 for fiscal year 2008;
``(4) $300,000,000 for fiscal year 2009;
``(5) $375,000,000 for fiscal year 2010; and
``(6) such sums as are necessary for each of fiscal years
2011 through 2015.
``TITLE III--REGULATORY MANAGEMENT
``SEC. 301. CODES AND STANDARDS.
``(a) In General.--The Secretary, in cooperation with the Task
Force, shall provide grants to, or offer to enter into contracts with
such professional organizations, public service organizations, and
government agencies as the Secretary determines appropriate to support
timely and extensive development of safety codes and standards relating
to fuel cell vehicles, hydrogen energy systems, and stationary,
portable, and micro fuel cells.
``(b) Educational Efforts.--The Secretary shall support educational
efforts by organizations and agencies described in subsection (a) to
share information, including information relating to best practices,
among those organizations and agencies.
``SEC. 302. DISCLOSURE.
``Section 623 of the Energy Policy Act of 1992 (42 U.S.C. 13293)
shall apply to any project carried out through a grant, cooperative
agreement, or contract under this Act.
``SEC. 303. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this title--
``(1) $4,000,000 for fiscal year 2006;
``(2) $7,000,000 for fiscal year 2007;
``(3) $8,000,000 for fiscal year 2008;
``(4) $10,000,000 for fiscal year 2009;
``(5) $9,000,000 for fiscal year 2010; and
``(6) such sums as are necessary for each of fiscal years
2011 and 2012.
``TITLE IV--REPORTS
``SEC. 401. DEPLOYMENT OF HYDROGEN TECHNOLOGY.
``(a) Secretary.--Subject to subsection (c), not later than 2 years
after the date of enactment of the Hydrogen and Fuel Cell Technology
Act of 2005, and triennially thereafter, the Secretary shall submit to
Congress a report describing--
``(1) any activity carried out by the Department of Energy
under this Act, including a research, development,
demonstration, and commercial application program for hydrogen
and fuel cell technology;
``(2) measures the Secretary has taken during the preceding
3 years to support the transition of primary industry (or a
related industry) to a fully commercialized hydrogen economy;
``(3) any change made to a research, development, or
deployment strategy of the Secretary relating to hydrogen and
fuel cell technology to reflect the results of a learning
demonstration under title II;
``(4) progress, including progress in infrastructure, made
toward achieving the goal of producing and deploying not less
than--
``(A) 100,000 hydrogen-fueled vehicles in the
United States by 2010; and
``(B) 2,500,000 hydrogen-fueled vehicles by 2020;
``(5) progress made toward achieving the goal of supplying
hydrogen at a sufficient number of fueling stations in the
United States by 2010 can be achieved by integrating--
``(A) hydrogen activities; and
``(B) associated targets and timetables for the
development of hydrogen technologies;
``(6) any problem relating to the design, execution, or
funding of a program under this Act;
``(7) progress made toward and goals achieved in carrying
out this Act and updates to the developmental roadmap,
including the results of the reviews conducted by the National
Academy of Sciences under subsection (b) for the fiscal years
covered by the report; and
``(8) any updates to strategic plans that are necessary to
meet the goals described in paragraph (4).
``(b) National Academy of Sciences.--
``(1) In general.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct
and submit to the Secretary, not later than September 30, 2007,
and triennially thereafter--
``(A) the results of a review of the projects and
activities carried out under this Act;
``(B) recommendations for any new authorities or
resources needed to achieve strategic goals; and
``(C) recommendations for approaches by which the
Secretary could achieve a substantial decrease in the
dependence on and consumption of natural gas and
imported oil by the Federal Government, including by
increasing the use of fuel cell vehicles, stationary
and portable fuel cells, and hydrogen energy systems.
``(2) Reauthorization.--The Secretary shall use the results
of reviews conducted under paragraph (1) in proposing to
Congress any legislative changes relating to reauthorization of
this Act.
``SEC. 402. AUTHORIZATION OF APPROPRIATIONS.
``There is authorized to be appropriated to carry out this title
$1,500,000 for each of fiscal years 2006 through 2010.
``TITLE V--TERMINATION OF AUTHORITY
``SEC. 501. TERMINATION OF AUTHORITY.
``This Act and the authority provided by this Act terminate on
September 30, 2015.''.
TITLE IX--RESEARCH AND DEVELOPMENT
SEC. 901. SHORT TITLE.
This title may be cited as the ``Energy Research, Development,
Demonstration, and Commercial Application Act of 2005''.
SEC. 902. GOALS.
(a) In General.--In order to achieve the purposes of this title,
the Secretary shall conduct a balanced set of programs of energy
research, development, demonstration, and commercial application
focused on--
(1) increasing the efficiency of all energy intensive
sectors through conservation and improved technologies;
(2) promoting diversity of energy supply;
(3) decreasing the dependence of the United States on
foreign energy supplies;
(4) improving the energy security of the United States; and
(5) decreasing the environmental impact of energy-related
activities.
(b) Goals.--The Secretary shall publish measurable cost and
performance-based goals with each annual budget submission in at least
the following areas:
(1) Energy efficiency for buildings, energy-consuming
industries, and vehicles.
(2) Electric energy generation (including distributed
generation), transmission, and storage.
(3) Renewable energy technologies, including wind power,
photovoltaics, solar thermal systems, geothermal energy,
hydrogen-fueled systems, biomass-based systems, biofuels, and
hydropower.
(4) Fossil energy, including power generation, onshore and
offshore oil and gas resource recovery, and transportation.
(5) Nuclear energy, including programs for existing and
advanced reactors, and education of future specialists.
(c) Public Comment.--The Secretary shall provide mechanisms for
input on the annually published goals from industry, institutions of
higher education, and other public sources.
(d) Effect of Goals.--Nothing in subsection (a) or the annually
published goals creates any new authority for any Federal agency, or
may be used by any Federal agency, to support the establishment of
regulatory standards or regulatory requirements.
SEC. 903. DEFINITIONS.
In this title:
(1) Departmental mission.--The term ``departmental
mission'' means any of the functions vested in the Secretary by
the Department of Energy Organization Act (42 U.S.C. 7101 et
seq.) or other law.
(2) Hispanic-serving institution.--The term ``Hispanic-
serving institution'' has the meaning given the term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)).
(3) Nonmilitary energy laboratory.--The term ``nonmilitary
energy laboratory'' means a National Laboratory other than a
National Laboratory listed in subparagraph (G), (H), or (N) of
section 2(3).
(4) Part b institution.--The term ``part B institution''
has the meaning given the term in section 322 of the Higher
Education Act of 1965 (20 U.S.C. 1061).
(5) Single-purpose research facility.--The term ``single-
purpose research facility'' means--
(A) any of the primarily single-purpose entities
owned by the Department; or
(B) any other organization of the Department
designated by the Secretary.
Subtitle A--Energy Efficiency
SEC. 911. ENERGY EFFICIENCY.
(a) In General.--There are authorized to be appropriated to the
Secretary to carry out energy efficiency and conservation research,
development, demonstration, and commercial application activities,
including activities authorized under this subtitle--
(1) $772,000,000 for fiscal year 2006;
(2) $865,000,000 for fiscal year 2007; and
(3) $920,000,000 for fiscal year 2008.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 912, $50,000,000 for each
of fiscal years 2006 through 2008.
(2) For activities under section 914, $7,000,000 for each
of fiscal years 2006 through 2008.
(3) For activities under section 915--
(A) $30,000,000 for fiscal year 2006;
(B) $35,000,000 for fiscal year 2007; and
(C) $40,000,000 for fiscal year 2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary to carry out section 912 $50,000,000 for
each of fiscal years 2009 through 2013.
(d) Limitations.--None of the funds authorized to be appropriated
under this section may be used for--
(1) the issuance or implementation of energy efficiency
regulations;
(2) the weatherization program established under part A of
title IV of the Energy Conservation and Production Act (42
U.S.C. 6861 et seq.);
(3) a State energy conservation plan established under part
D of title III of the Energy Policy and Conservation Act (42
U.S.C. 6321 et seq.); or
(4) a Federal energy management measure carried out under
part 3 of title V of the National Energy Conservation Policy
Act (42 U.S.C. 8251 et seq.).
SEC. 912. NEXT GENERATION LIGHTING INITIATIVE.
(a) Definitions.--In this section:
(1) Advanced solid-state lighting.--The term ``advanced
solid-state lighting'' means a semiconducting device package
and delivery system that produces white light using externally
applied voltage.
(2) Industry alliance.--The term ``Industry Alliance''
means an entity selected by the Secretary under subsection (d).
(3) Initiative.--The term ``Initiative'' means the Next
Generation Lighting Initiative carried out under this section.
(4) Research.--The term ``research'' includes research on
the technologies, materials, and manufacturing processes
required for white light emitting diodes.
(5) White light emitting diode.--The term ``white light
emitting diode'' means a semiconducting package, using either
organic or inorganic materials, that produces white light using
externally applied voltage.
(b) Initiative.--The Secretary shall carry out a Next Generation
Lighting Initiative in accordance with this section to support
research, development, demonstration, and commercial application
activities related to advanced solid-state lighting technologies based
on white light emitting diodes.
(c) Objectives.--The objectives of the Initiative shall be to
develop advanced solid-state organic and inorganic lighting
technologies based on white light emitting diodes that, compared to
incandescent and fluorescent lighting technologies, are longer lasting,
are more energy-efficient and cost-competitive, and have less
environmental impact.
(d) Industry Alliance.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall competitively select an
Industry Alliance to represent participants who are private, for-profit
firms, including large and small businesses, that, as a group, are
broadly representative of United States solid state lighting research,
development, infrastructure, and manufacturing expertise as a whole.
(e) Research.--
(1) Grants.--The Secretary shall carry out the research
activities of the Initiative through competitively awarded
grants to--
(A) researchers, including Industry Alliance
participants;
(B) small businesses;
(C) National Laboratories; and
(D) institutions of higher education.
(2) Industry alliance.--The Secretary shall annually
solicit from the Industry Alliance--
(A) comments to identify solid-state lighting
technology needs;
(B) an assessment of the progress of the research
activities of the Initiative; and
(C) assistance in annually updating solid-state
lighting technology roadmaps.
(3) Availability to public.--The information and roadmaps
under paragraph (2) shall be available to the public.
(f) Development, Demonstration, and Commercial Application.--
(1) In general.--The Secretary shall carry out a
development, demonstration, and commercial application program
for the Initiative through competitively selected awards.
(2) Preference.--In making the awards, the Secretary may
give preference to participants in the Industry Alliance.
(g) Cost Sharing.--In carrying out this section, the Secretary
shall require cost sharing in accordance with section 1002.
(h) Intellectual Property.--The Secretary may require (in
accordance with section 202(a)(ii) of title 35, United States Code,
section 152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182), and
section 9 of the Federal Nonnuclear Energy Research and Development Act
of 1974 (42 U.S.C. 5908)) that for any new invention developed under
subsection (e)--
(1) that the Industry Alliance participants who are active
participants in research, development, and demonstration
activities related to the advanced solid-state lighting
technologies that are covered by this section shall be granted
the first option to negotiate with the invention owner, at
least in the field of solid-state lighting, nonexclusive
licenses and royalties on terms that are reasonable under the
circumstances;
(2)(i) that, for 1 year after a United States patent is
issued for the invention, the patent holder shall not negotiate
any license or royalty with any entity that is not a
participant in the Industry Alliance described in paragraph
(1); and
(ii) that, during the year described in clause (i), the
patent holder shall negotiate nonexclusive licenses and
royalties in good faith with any interested participant in the
Industry Alliance described in paragraph (1); and
(3) such other terms as the Secretary determines are
required to promote accelerated commercialization of inventions
made under the Initiative.
(i) National Academy Review.--The Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct periodic
reviews of the Initiative.
SEC. 913. NATIONAL BUILDING PERFORMANCE INITIATIVE.
(a) Interagency Group.--
(1) In general.--Not later than 90 days after the date of
enactment of this Act, the Director of the Office of Science
and Technology Policy shall establish an interagency group to
develop, in coordination with the advisory committee
established under subsection (e), a National Building
Performance Initiative (referred to in this section as the
``Initiative'').
(2) Cochairs.--The interagency group shall be co-chaired by
appropriate officials of the Department and the Department of
Commerce, who shall jointly arrange for the provision of
necessary administrative support to the group.
(b) Integration of Efforts.--The Initiative shall integrate
Federal, State, and voluntary private sector efforts to reduce the
costs of construction, operation, maintenance, and renovation of
commercial, industrial, institutional, and residential buildings.
(c) Plan.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the interagency group shall submit to
Congress a plan for carrying out the appropriate Federal role
in the Initiative.
(2) Inclusions.--The plan shall include--
(A) research, development, demonstration, and
commercial application of systems and materials for new
construction and retrofit relating to the building
envelope and building system components;
(B) research, development, demonstration, and
commercial application to develop technology and
infrastructure enabling the energy efficient, automated
operation of buildings and building equipment; and
(C) the collection, analysis, and dissemination of
research results and other pertinent information on
enhancing building performance to industry, government
entities, and the public.
(d) Department of Energy Role.--Within the Federal portion of the
Initiative, the Department shall be the lead agency for all aspects of
building performance related to use and conservation of energy.
(e) Advisory Committee.--The Director of the Office of Science and
Technology Policy shall establish an advisory committee to--
(1) analyze and provide recommendations on potential
private sector roles and participation in the Initiative; and
(2) review and provide recommendations on the plan
described in subsection (c).
(f) Administration.--Nothing in this section provides any Federal
agency with new authority to regulate building performance.
SEC. 914. SECONDARY ELECTRIC VEHICLE BATTERY USE PROGRAM.
(a) Definitions.--In this section:
(1) Battery.--The term ``battery'' means an energy storage
device that previously has been used to provide motive power in
a vehicle powered in whole or in part by electricity.
(2) Associated equipment.--The term ``associated
equipment'' means equipment located where the batteries will be
used that is necessary to enable the use of the energy stored
in the batteries.
(b) Program.--
(1) In general.--The Secretary shall establish and conduct
a research, development, demonstration, and commercial
application program for the secondary use of batteries.
(2) Administration.--The program shall be--
(A) designed to demonstrate the use of batteries in
secondary applications, including utility and
commercial power storage and power quality;
(B) structured to evaluate the performance,
including useful service life and costs, of such
batteries in field operations, and the necessary
supporting infrastructure, including reuse and disposal
of batteries; and
(C) coordinated with ongoing secondary battery use
programs at the National Laboratories and in industry.
(c) Solicitation.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall solicit proposals to
demonstrate the secondary use of batteries and associated
equipment and supporting infrastructure in geographic locations
throughout the United States.
(2) Additional solicitations.--The Secretary may make
additional solicitations for proposals if the Secretary
determines that the solicitations are necessary to carry out
this section.
(d) Selection of Proposals.--
(1) In general.--Not later than 90 days after the closing
date established by the Secretary for receipt of proposals
under subsection (c), the Secretary shall select up to 5
proposals that may receive financial assistance under this
section once the Department receives appropriated funds to
carry out this section.
(2) Factors.--In selecting proposals, the Secretary shall
consider--
(A) the diversity of battery type;
(B) geographic and climatic diversity; and
(C) life-cycle environmental effects of the
approaches.
(3) Limitation.--No 1 project selected under this section
shall receive more than 25 percent of the funds made available
to carry out the program under this section.
(4) Nonfederal involvement.--In selecting proposals, the
Secretary shall consider the extent of involvement of State or
local government and other persons in each demonstration
project to optimize use of Federal resources.
(5) Other criteria.--In selecting proposals, the Secretary
may consider such other criteria as the Secretary considers
appropriate.
(e) Conditions.--In carrying out this section, the Secretary shall
require that--
(1) relevant information be provided to--
(A) the Department;
(B) the users of the batteries;
(C) the proposers of a project under this section;
and
(D) the battery manufacturers; and
(2) the costs of carrying out projects and activities under
this section are shared in accordance with section 1002.
SEC. 915. ENERGY EFFICIENCY SCIENCE INITIATIVE.
(a) Establishment.--The Secretary shall establish an Energy
Efficiency Science Initiative to be managed by the Assistant Secretary
in the Department with responsibility for energy conservation under
section 203(a)(9) of the Department of Energy Organization Act (42
U.S.C. 7133(a)(9)), in consultation with the Director of the Office of
Science, for grants to be competitively awarded and subject to peer
review for research relating to energy efficiency.
(b) Report.--The Secretary shall submit to Congress, along with the
annual budget request of the President submitted to Congress, a report
on the activities of the Energy Efficiency Science Initiative,
including a description of the process used to award the funds and an
explanation of how the research relates to energy efficiency.
SEC. 916. BUILDING STANDARDS.
(a) Definition of High Performance Building.--In this section, the
term ``high performance building'' means a building that integrates and
optimizes energy efficiency, durability, life-cycle performance, and
occupant productivity.
(b) Assessment.--Not later than 120 days after the date of
enactment of this Act, the Secretary shall enter into an agreement with
the National Institute of Building Sciences to--
(1) conduct an assessment (in cooperation with industry,
standards development organizations, and other entities, as
appropriate) of whether the current voluntary consensus
standards and rating systems for high performance buildings are
consistent with the research, development and demonstration
activities of the Department;
(2) determine if additional research is required, based on
the findings of the assessment; and,
(3) recommend steps for the Secretary to accelerate the
development of voluntary consensus-based standards for high
performance buildings that are based on the findings of the
assessment.
(c) Grant and Technical Assistance Program.--Consistent with
subsection (b), the National Technology Transfer and Advancement Act of
1995 (15 U.S.C. 3701 et seq.), and the amendments made by that Act, the
Secretary shall establish a grant and technical assistance program to
support the development of voluntary consensus-based standards for high
performance buildings.
Subtitle B--Distributed Energy and Electric Energy Systems
SEC. 921. DISTRIBUTED ENERGY AND ELECTRIC ENERGY SYSTEMS.
(a) In General.--
(1) Distributed energy and electric energy systems
activities.--There are authorized to be appropriated to the
Secretary to carry out distributed energy and electric energy
systems activities, including activities authorized under this
subtitle--
(A) $220,000,000 for fiscal year 2006;
(B) $240,000,000 for fiscal year 2007; and
(C) $260,000,000 for fiscal year 2008.
(2) Power delivery research initiative.--There are
authorized to be appropriated to the Secretary to carry out the
Policy Delivery Research Initiative under subsection 925(e)--
(A) $30,000,000 for fiscal year 2006;
(B) $35,000,000 for fiscal year 2007; and
(C) $40,000,000 for fiscal year 2008.
(b) Micro-Cogeneration Energy Technology.--From amounts authorized
under subsection (a), $20,000,000 for each of fiscal years 2006 and
2007 shall be available to carry out activities under section 924.
SEC. 922. HIGH POWER DENSITY INDUSTRY PROGRAM.
(a) In General.--The Secretary shall establish a comprehensive
research, development, demonstration, and commercial application
program to improve the energy efficiency of high power density
facilities, including data centers, server farms, and
telecommunications facilities.
(b) Technologies.--The program shall consider technologies that
provide significant improvement in thermal controls, metering, load
management, peak load reduction, or the efficient cooling of
electronics.
SEC. 923. MICRO-COGENERATION ENERGY TECHNOLOGY.
(a) In General.--The Secretary shall make competitive, merit-based
grants to consortia for the development of micro-cogeneration energy
technology.
(b) Uses.--The consortia shall explore--
(1) the use of small-scale combined heat and power in
residential heating appliances;
(2) the use of excess power to operate other appliances
within the residence; and
(3) the supply of excess generated power to the power grid.
SEC. 924. DISTRIBUTED ENERGY TECHNOLOGY DEMONSTRATION PROGRAM.
The Secretary may provide financial assistance to coordinating
consortia of interdisciplinary participants for demonstrations designed
to accelerate the use of distributed energy technologies (such as fuel
cells, microturbines, reciprocating engines, thermally activated
technologies, and combined heat and power systems) in highly energy
intensive commercial applications.
SEC. 925. ELECTRIC TRANSMISSION AND DISTRIBUTION PROGRAMS.
(a) Demonstration Program.--The Secretary shall establish a
comprehensive research, development, and demonstration program to
ensure the reliability, efficiency, and environmental integrity of
electrical transmission and distribution systems, which shall include--
(1) advanced energy and energy storage technologies,
materials, and systems, giving priority to new transmission
technologies, including composite conductor materials and other
technologies that enhance reliability, operational flexibility,
or power-carrying capability;
(2) advanced grid reliability and efficiency technology
development;
(3) technologies contributing to significant load
reductions;
(4) advanced metering, load management, and control
technologies;
(5) technologies to enhance existing grid components;
(6) the development and use of high-temperature
superconductors to--
(A) enhance the reliability, operational
flexibility, or power-carrying capability of electric
transmission or distribution systems; or
(B) increase the efficiency of electric energy
generation, transmission, distribution, or storage
systems;
(7) integration of power systems, including systems to
deliver high-quality electric power, electric power
reliability, and combined heat and power;
(8) supply of electricity to the power grid by small scale,
distributed and residential-based power generators;
(9) the development and use of advanced grid design,
operation, and planning tools;
(10) any other infrastructure technologies, as appropriate;
and
(11) technology transfer and education.
(b) Program Plan.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary, in consultation with
other appropriate Federal agencies, shall prepare and submit to
Congress a 5-year program plan to guide activities under this
section.
(2) Consultation.--In preparing the program plan, the
Secretary shall consult with--
(A) utilities;
(B) energy service providers;
(C) manufacturers;
(D) institutions of higher education;
(E) other appropriate State and local agencies;
(F) environmental organizations;
(G) professional and technical societies; and
(H) any other persons the Secretary considers
appropriate.
(c) Implementation.--The Secretary shall consider implementing the
program under this section using a consortium of participants from
industry, institutions of higher education, and National Laboratories.
(d) Report.--Not later than 2 years after the submission of the
plan under subsection (b), the Secretary shall submit to Congress a
report--
(1) describing the progress made under this section; and
(2) identifying any additional resources needed to continue
the development and commercial application of transmission and
distribution of infrastructure technologies.
(e) Power Delivery Research Initiative.--
(1) In general.--The Secretary shall establish a research,
development, and demonstration initiative specifically focused
on power delivery using components incorporating high
temperature superconductivity.
(2) Goals.--The goals of the Initiative shall be--
(A) to establish world-class facilities to develop
high temperature superconductivity power applications
in partnership with manufacturers and utilities;
(B) to provide technical leadership for
establishing reliability for high temperature
superconductivity power applications, including
suitable modeling and analysis;
(C) to facilitate the commercial transition toward
direct current power transmission, storage, and use for
high power systems using high temperature
superconductivity; and
(D) to facilitate the integration of very low
impedance high temperature superconducting wires and
cables in existing electric networks to improve system
performance, power flow control, and reliability.
(3) Inclusions.--The Initiative shall include--
(A) feasibility analysis, planning, research, and
design to construct demonstrations of superconducting
links in high power, direct current, and controllable
alternating current transmission systems;
(B) public-private partnerships to demonstrate
deployment of high temperature superconducting cable
into testbeds simulating a realistic transmission grid
and under varying transmission conditions, including
actual grid insertions; and
(C) testbeds developed in cooperation with National
Laboratories, industries, and institutions of higher
education to--
(i) demonstrate those technologies;
(ii) prepare the technologies for
commercial introduction; and
(iii) address cost or performance
roadblocks to successful commercial use.
(f) Transmission and Distribution Grid Planning and Operations
Initiative.--
(1) In general.--The Secretary shall establish a research,
development, and demonstration initiative specifically focused
on tools needed to plan, operate, and expand the transmission
and distribution grids in the presence of competitive market
mechanisms for energy, load demand, customer response, and
ancillary services.
(2) Goals.--The goals of the Initiative shall be--
(A)(i) to develop and use a geographically
distributed center, consisting of institutions of
higher education, and National Laboratories, with
expertise and facilities to develop the underlying
theory and software for power system application; and
(ii) to ensure commercial development in
partnership with software vendors and utilities;
(B) to provide technical leadership in engineering
and economic analysis for the reliability and
efficiency of power systems planning and operations in
the presence of competitive markets for electricity;
(C) to model, simulate, and experiment with new
market mechanisms and operating practices to understand
and optimize those new methods before actual use; and
(D) to provide technical support and technology
transfer to electric utilities and other participants
in the domestic electric industry and marketplace.
Subtitle C--Renewable Energy
SEC. 931. RENEWABLE ENERGY.
(a) In General.--There are authorized to be appropriated to the
Secretary to carry out renewable energy research, development,
demonstration, and commercial application activities, including
activities authorized under this subtitle--
(1) $610,000,000 for fiscal year 2006;
(2) $659,000,000 for fiscal year 2007; and
(3) $710,000,000 for fiscal year 2008.
(b) Bioenergy.--From the amounts authorized under subsection (a),
there are authorized to be appropriated to carry out section 932--
(1) $167,650,000 for fiscal year 2006;
(2) $180,000,000 for fiscal year 2007; and
(3) $192,000,000 for fiscal year 2008.
(c) Concentrating Solar Power.--From amounts authorized under
subsection (a), there is authorized to be appropriated to carry out
section 933 $50,000,000 for each of fiscal years 2006 through 2008.
(d) Administration.--Of the funds authorized under subsection (b),
not less than $5,000,000 for each fiscal year shall be made available
for grants to--
(1) part B institutions;
(2) Tribal Colleges or Universities (as defined in section
316(b) of the Higher Education Act of 1965 (20 U.S.C.
1059c(b))); and
(3) Hispanic-serving institutions.
(e) Consultation.--In carrying out this section, the Secretary, in
consultation with the Secretary of Agriculture, shall demonstrate the
use of--
(1) advanced wind power technology, including combined use
with coal gasification;
(2) biomass;
(3) geothermal energy systems; and
(4) other renewable energy technologies to assist in
delivering electricity to rural and remote locations.
SEC. 932. BIOENERGY PROGRAM.
(a) Definition of Lignocellulosic Feedstock.--In this section, the
term ``lignocellulosic feedstock'' means any portion of a plant or
coproduct from conversion, including crops, trees, and agricultural and
forest residues not specifically grown for food.
(b) Program.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application for bioenergy,
including--
(1) biopower energy systems;
(2) biofuels;
(3) bioproducts;
(4) integrated biorefineries that may produce biopower,
biofuels, and bioproducts;
(5) cross-cutting research and development in feedstocks;
and
(6) economic analysis.
(c) Biofuels and Bioproducts.--The goals of the biofuels and
bioproducts programs shall be to develop, in partnership with industry
and institutions of higher education--
(1) advanced biochemical and thermochemical conversion
technologies capable of making fuels from lignocellulosic
feedstocks that are price-competitive with gasoline or diesel
in either internal combustion engines or fuel cell-powered
vehicles;
(2) advanced biotechnology processes capable of making
biofuels and bioproducts with emphasis on development of
biorefinery technologies using enzyme-based processing systems;
(3) advanced biotechnology processes capable of increasing
energy production from lignocellulosic feedstocks, with
emphasis on reducing the dependence of industry on fossil fuels
in manufacturing facilities; and
(4) other advanced processes that will enable the
development of cost-effective bioproducts, including biofuels.
(d) Repeal of Sunset Provision.--Section 311 of the Biomass
Research and Development Act of 2000 (7 U.S.C. 8101 note) is repealed.
SEC. 933. HYDROGEN INTERMEDIATE FUELS RESEARCH PROGRAM.
(a) In General.--The Secretary, in coordination with the Secretary
of Agriculture, shall carry out a 3-year program of research,
development, and demonstration on the use of ethanol and other low-cost
transportable renewable feedstocks as intermediate fuels for the safe,
energy efficient, and cost-effective transportation of hydrogen.
(b) Goals.--The goals of the program shall include--
(1) demonstrating the cost-effective conversion of ethanol
or other low-cost transportable renewable feedstocks to pure
hydrogen suitable for eventual use in fuel cells;
(2) using existing commercial reforming technology or
modest modifications of existing technology to reform ethanol
or other low-cost transportable renewable feedstocks into
hydrogen;
(3) converting at least 1 commercially available internal
combustion engine hybrid electric passenger vehicle to operate
on hydrogen;
(4) not later than 1 year after the date on which the
program begins, installing and operating an ethanol reformer,
or reformer for another low-cost transportable renewable
feedstock (including onsite hydrogen compression, storage, and
dispensing), at the facilities of a fleet operator;
(5) operating the 1 or more vehicles described in paragraph
(3) for a period of at least 2 years; and
(6) collecting emissions and fuel economy data on the 1 or
more vehicles described in paragraph (3) in various operating
and environmental conditions.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000.
SEC. 934. CONCENTRATING SOLAR POWER RESEARCH PROGRAM.
(a) In General.--The Secretary shall conduct a program of research
and development to evaluate the potential for concentrating solar power
for hydrogen production, including cogeneration approaches for both
hydrogen and electricity.
(b) Administration.--The program shall take advantage of existing
facilities to the extent practicable and shall include--
(1) development of optimized technologies that are common
to both electricity and hydrogen production;
(2) evaluation of thermochemical cycles for hydrogen
production at the temperatures attainable with concentrating
solar power;
(3) evaluation of materials issues for the thermochemical
cycles described in paragraph (2);
(4) cogeneration of solar thermal electric power and photo-
synthetic-based hydrogen production;
(5) system architectures and economics studies; and
(6) coordination with activities under the Advanced Reactor
Hydrogen Co-generation Project established under subtitle C of
title VI on high temperature materials, thermochemical cycles,
and economic issues.
(c) Assessment.--In carrying out the program under this section,
the Secretary shall--
(1) assess conflicting guidance on the economic potential
of concentrating solar power for electricity production
received from the National Research Council in the report
entitled ``Renewable Power Pathways: A Review of the U.S.
Department of Energy's Renewable Energy Programs'' and dated
2000 and subsequent reviews of that report funded by the
Department; and
(2) provide an assessment of the potential impact of
technology used to concentrate solar power for electricity
before, or concurrent with, submission of the budget for fiscal
year 2007.
(d) Report.--Not later than 5 years after the date of enactment of
this Act, the Secretary shall provide to Congress a report on the
economic and technical potential for electricity or hydrogen
production, with or without cogeneration, with concentrating solar
power, including the economic and technical feasibility of potential
construction of a pilot demonstration facility suitable for commercial
production of electricity or hydrogen from concentrating solar power.
SEC. 935. HYBRID SOLAR LIGHTING RESEARCH AND DEVELOPMENT PROGRAM.
(a) Definition of Hybrid Solar Lighting.--In this section, the term
``hybrid solar lighting'' means a novel lighting system that integrates
sunlight and electrical lighting in complement to each other in common
lighting fixtures for the purpose of improving energy efficiency.
(b) Program.--The Secretary shall conduct a program of research,
development, demonstration, and commercial application for hybrid solar
lighting aimed at developing hybrid solar lighting systems that are--
(1) designed to eliminate large roof penetrations and
associated architectural design and maintenance problems that
limit the conventional use of daylight in most buildings;
(2) easily integrated with electric lights; and
(3) compatible with a majority of electric lamps and light
fixtures.
(c) Limitations.--Funding authorized under this section shall not
be used for lighting systems based on conventional daylighting
installations such as skylights, light wells, light shelves, or roof
monitors.
(d) National Academy of Sciences.--Not later than 2 years after the
date of enactment of this Act, the Secretary shall enter into an
arrangement with the National Academy of Sciences to conduct a biannual
review of the activities under this section including program
priorities, technical milestones, and opportunities for technology
transfer and commercialization.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $4,000,000 for fiscal year 2006;
(2) $6,000,000 for fiscal year 2007; and
(3) $6,000,000 for fiscal year 2008.
SEC. 936. MISCELLANEOUS PROJECTS.
The Secretary shall conduct research, development, demonstration,
and commercial application programs for--
(1) ocean energy, including wave energy;
(2) the combined use of renewable energy technologies with
1 another and with other energy technologies, including the
combined use of wind power and coal gasification technologies;
and
(3) renewable energy technologies for cogeneration of
hydrogen and electricity.
SEC. 937. BIOMASS RESEARCH AND DEVELOPMENT.
(a) Definitions.--Section 303 of the Biomass Research and
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is
amended--
(1) by striking paragraphs (2), (9), and (10);
(2) by redesignating paragraphs (3), (4), (5), (6), (7),
and (8) as paragraphs (4), (5), (7), (8), (9), and (10),
respectively;
(3) by inserting after paragraph (1) the following:
``(2) Biobased fuel.--The term `biobased fuel' means any
transportation fuel produced from biomass.
``(3) Biobased product.--The term `biobased product' means
an industrial product (including chemicals, materials, and
polymers) produced from biomass, or a commercial or industrial
product (including animal feed and electric power) derived in
connection with the conversion of biomass to fuel.'';
(4) by inserting after paragraph (5) (as redesignated by
paragraph (2)) the following:
``(6) Demonstration.--The term `demonstration' means
demonstration of technology in a pilot plant or semi-works
scale facility.''; and
(5) by striking paragraph (9) (as redesignated by paragraph
(2)) and inserting the following:
``(9) National laboratory.--The term `National Laboratory'
means any of the following laboratories owned by the
Department:
``(A) Ames Laboratory.
``(B) Argonne National Laboratory.
``(C) Brookhaven National Laboratory.
``(D) Fermi National Accelerator Laboratory.
``(E) Idaho National Laboratory.
``(F) Lawrence Berkeley National Laboratory.
``(G) Lawrence Livermore National Laboratory.
``(H) Los Alamos National Laboratory.
``(I) National Energy Technology Laboratory.
``(J) National Renewable Energy Laboratory.
``(K) Oak Ridge National Laboratory.
``(L) Pacific Northwest National Laboratory.
``(M) Princeton Plasma Physics Laboratory.
``(N) Sandia National Laboratories.
``(O) Stanford Linear Accelerator Center.
``(P) Thomas Jefferson National Accelerator
Facility.''.
(b) Cooperation and Coordination in Biomass Research and
Development.--Section 304 of the Biomass Research and Development Act
of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is amended--
(1) in subsections (a) and (d), by striking ``industrial
products'' each place it appears and inserting ``fuels and
biobased products'';
(2) by striking subsections (b) and (c); and
(3) by redesignating subsection (d) as subsection (b).
(c) Biomass Research and Development Board.--Section 305 of the
Biomass Research and Development Act of 2000 (Public Law 106-224; 7
U.S.C. 8101 note) is amended--
(1) in subsections (a) and (c), by striking ``industrial
products'' each place it appears and inserting ``fuels and
biobased products'';
(2) in subsection (b)--
(A) in paragraph (1), by striking ``304(d)(1)(B)''
and inserting ``304(b)(1)(B)''; and
(B) in paragraph (2), by striking ``304(d)(1)(A)''
and inserting ``304(b)(1)(A)''; and
(3) in subsection (c)--
(A) in paragraph (1)(B), by striking ``and'' at the
end;
(B) in paragraph (2), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following:
``(3) ensure that--
``(A) solicitations are open and competitive with
awards made annually; and
``(B) objectives and evaluation criteria of the
solicitations are clearly stated and minimally
prescriptive, with no areas of special interest; and
``(4) ensure that the panel of scientific and technical
peers assembled under section 307(g)(1)(C) to review proposals
is composed predominantly of independent experts selected from
outside the Departments of Agriculture and Energy.''.
(d) Biomass Research and Development Technical Advisory
Committee.--Section 306 of the Biomass Research and Development Act of
2000 (Public Law 106-224; 7 U.S.C. 8101 note) is amended--
(1) in subsection (b)(1)--
(A) in subparagraph (A), by striking ``biobased
industrial products'' and inserting ``biofuels'';
(B) by redesignating subparagraphs (B) through (J)
as subparagraphs (C) through (K), respectively;
(C) by inserting after subparagraph (A) the
following:
``(B) an individual affiliated with the biobased
industrial and commercial products industry;'';
(D) in subparagraph (F) (as redesignated by
subparagraph (B)) by striking ``an individual has'' and
inserting ``2 individuals have'';
(E) in subparagraphs (C), (D), (G), and (I) (as
redesignated by subparagraph (B)) by striking
``industrial products'' each place it appears and
inserting ``fuels and biobased products''; and
(F) in subparagraph (H) (as redesignated by
subparagraph (B)), by inserting ``and environmental''
before ``analysis'';
(2) in subsection (c)(2)--
(A) in subparagraph (A), by striking ``goals'' and
inserting ``objectives, purposes, and considerations'';
(B) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively;
(C) by inserting after subparagraph (A) the
following:
``(B) solicitations are open and competitive with
awards made annually and that objectives and evaluation
criteria of the solicitations are clearly stated and
minimally prescriptive, with no areas of special
interest;''; and
(D) in subparagraph (C) (as redesignated by
subparagraph (B)) by inserting ``predominantly from
outside the Departments of Agriculture and Energy''
after ``technical peers''.
(e) Biomass Research and Development Initiative.--Section 307 of
the Biomass Research and Development Act of 2000 (Public Law 106-224; 7
U.S.C. 8101 note) is amended--
(1) in subsection (a), by striking ``research on biobased
industrial products'' and inserting ``research on, and
development and demonstration of, biobased fuels and biobased
products, and the methods, practices and technologies,
biotechnology, for their production''; and
(2) by striking subsections (b) through (e) and inserting
the following:
``(b) Objectives.--The objectives of the Initiative are to
develop--
``(1) technologies and processes necessary for abundant
commercial production of biobased fuels at prices competitive
with fossil fuels;
``(2) high-value biobased products--
``(A) to enhance the economic viability of biobased
fuels and power; and
``(B) as substitutes for petroleum-based feedstocks
and products; and
``(3) a diversity of sustainable domestic sources of
biomass for conversion to biobased fuels and biobased products.
``(c) Purposes.--The purposes of the Initiative are--
``(1) to increase the energy security of the United States;
``(2) to create jobs and enhance the economic development
of the rural economy;
``(3) to enhance the environment and public health; and
``(4) to diversify markets for raw agricultural and
forestry products.
``(d) Technical Areas.--To advance the objectives and purposes of
the Initiative, the Secretary of Agriculture and the Secretary of
Energy, in consultation with the Administrator of the Environmental
Protection Agency and heads of other appropriate departments and
agencies (referred to in this section as the `Secretaries'), shall
direct research and development toward--
``(1) feedstock production through the development of crops
and cropping systems relevant to production of raw materials
for conversion to biobased fuels and biobased products,
including--
``(A) development of advanced and dedicated crops
with desired features, including enhanced productivity,
broader site range, low requirements for chemical
inputs, and enhanced processing;
``(B) advanced crop production methods to achieve
the features described in subparagraph (A);
``(C) feedstock harvest, handling, transport, and
storage; and
``(D) strategies for integrating feedstock
production into existing managed land;
``(2) overcoming recalcitrance of cellulosic biomass
through developing technologies for converting cellulosic
biomass into intermediates that can subsequently be converted
into biobased fuels and biobased products, including--
``(A) pretreatment in combination with enzymatic or
microbial hydrolysis; and
``(B) thermochemical approaches, including
gasification and pyrolysis;
``(3) product diversification through technologies relevant
to production of a range of biobased products (including
chemicals, animal feeds, and cogenerated power) that eventually
can increase the feasibility of fuel production in a
biorefinery, including--
``(A) catalytic processing, including
thermochemical fuel production;
``(B) metabolic engineering, enzyme engineering,
and fermentation systems for biological production of
desired products or cogeneration of power;
``(C) product recovery;
``(D) power production technologies; and
``(E) integration into existing biomass processing
facilities, including starch ethanol plants, paper
mills, and power plants; and
``(4) analysis that provides strategic guidance for the
application of biomass technologies in accordance with
realization of improved sustainability and environmental
quality, cost effectiveness, security, and rural economic
development, usually featuring system-wide approaches.
``(e) Additional Considerations.--Within the technical areas
described in subsection (d), and in addition to advancing the purposes
described in subsection (c) and the objectives described in subsection
(b), the Secretaries shall support research and development--
``(1) to create continuously expanding opportunities for
participants in existing biofuels production by seeking
synergies and continuity with current technologies and
practices, such as the use of dried distillers grains as a
bridge feedstock;
``(2) to maximize the environmental, economic, and social
benefits of production of biobased fuels and biobased products
on a large scale through life-cycle economic and environmental
analysis and other means; and
``(3) to assess the potential of Federal land and land
management programs as feedstock resources for biobased fuels
and biobased products, consistent with the integrity of soil
and water resources and with other environmental
considerations.
``(f) Eligible Entities.--To be eligible for a grant, contract, or
assistance under this section, an applicant shall be--
``(1) an institution of higher education;
``(2) a national laboratory;
``(3) a Federal research agency;
``(4) a State research agency;
``(5) a private sector entity;
``(6) a nonprofit organization; or
``(7) a consortium of 2 of more entities described in
paragraphs (1) through (6).
``(g) Administration.--
``(1) In general.--After consultation with the Board, the
points of contact shall--
``(A) publish annually 1 or more joint requests for
proposals for grants, contracts, and assistance under
this section;
``(B) require that grants, contracts, and
assistance under this section be awarded competitively,
on the basis of merit, after the establishment of
procedures that provide for scientific peer review by
an independent panel of scientific and technical peers;
and
``(C) give some preference to applications that--
``(i) involve a consortia of experts from
multiple institutions;
``(ii) encourage the integration of
disciplines and application of the best
technical resources; and
``(iii) increase the geographic diversity
of demonstration projects.
``(2) Distribution of funding by technical area.--Of the
funds authorized to be appropriated for activities described in
this section, funds shall be distributed for each of fiscal
years 2006 through 2010 so as to achieve an approximate
distribution of--
``(A) 20 percent of the funds to carry out
activities for feedstock production under subsection
(d)(1);
``(B) 45 percent of the funds to carry out
activities for overcoming recalcitrance of cellulosic
biomass under subsection (d)(2);
``(C) 30 percent of the funds to carry out
activities for product diversification under subsection
(d)(3); and
``(D) 5 percent of the funds to carry out
activities for strategic guidance under subsection
(d)(4).
``(3) Distribution of funding within each technical area.--
Within each technical area described in paragraphs (1) through
(3) of subsection (d), funds shall be distributed for each of
fiscal years 2006 through 2010 so as to achieve an approximate
distribution of--
``(A) 15 percent of the funds for applied
fundamentals;
``(B) 35 percent of the funds for innovation; and
``(C) 50 percent of the funds for demonstration.
``(4) Matching funds.--
``(A) In general.--A minimum 20 percent funding
match shall be required for demonstration projects
under this title.
``(B) Commercial applications.--A minimum of 50
percent funding match shall be required for commercial
application projects under this title.
``(5) Technology and information transfer to agricultural
users.--The Administrator of the Cooperative State Research,
Education, and Extension Service and the Chief of the Natural
Resources Conservation Service shall ensure that applicable
research results and technologies from the Initiative are
adapted, made available, and disseminated through those
services, as appropriate.''.
(f) Annual Reports.--Section 309 of the Biomass Research and
Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101 note) is
amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking
``purposes described in section 307(b)'' and
inserting ``objectives, purposes, and
additional considerations described in
subsections (b) through (e) of section 307'';
(ii) in subparagraph (B), by striking
``and'' at the end;
(iii) by redesignating subparagraph (C) as
subparagraph (D); and
(iv) by inserting after subparagraph (B)
the following:
``(C) achieves the distribution of funds described
in paragraphs (2) and (3) of section 307(g); and''; and
(B) in paragraph (2), by striking ``industrial
products'' and inserting ``fuels and biobased
products''; and
(2) by adding at the end the following:
``(c) Updates.--The Secretary and the Secretary of Energy shall
update the Vision and Roadmap documents prepared for Federal biomass
research and development activities.''.
(g) Authorization of Appropriations.--Section 310(b) of the Biomass
Research and Development Act of 2000 (Public Law 106-224; 7 U.S.C. 8101
note) is amended by striking ``title $54,000,000 for each of fiscal
years 2002 through 2007'' and inserting ``title $200,000,000 for fiscal
year 2006 and each fiscal year thereafter''.
(h) Hydrogen Intermediate Fuels Research Program.--
(1) In general.--The Secretary shall conduct a research,
development, and demonstration program focused on the economic
production and use of hydrogen from biofuels, with emphasis on
the rural electrical generation sectors.
(2) Electrical generation sector objectives.--The
objectives of the program conducted under paragraph (1) in the
rural electrical generation sector shall be to--
(A) design, develop, and test low-cost gasification
equipment to convert biomass to hydrogen at regional
rural cooperatives, or at businesses owned by farmers,
close to agricultural operations to minimize the cost
of biomass transportation to large central gasification
plants;
(B) demonstrate low-cost electrical generation at
such rural cooperatives or farmer-owned businesses,
using renewable hydrogen derived from biomass in either
fuel cell generators, or, as an interim cost reduction
option, in conventional internal combustion engine
gensets;
(C) determine the economic return to cooperatives
or other businesses owned by farmers of producing
hydrogen from biomass and selling electricity compared
to agricultural economic returns from producing and
selling conventional crops alone;
(D) evaluate the crop yield and long-term soil
sustainability of growing and harvesting of feedstocks
for biomass gasification, and
(E) demonstrate the use of a portion of the
biomass-derived hydrogen in various agricultural
vehicles to reduce--
(i) dependence on imported fossil fuel; and
(ii) environmental impacts.
(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection $5,000,000.
SEC. 938. PRODUCTION INCENTIVES FOR CELLULOSIC BIOFUELS.
(a) Purpose.--The purpose of this section is to--
(1) accelerate deployment and commercialization of
biofuels;
(2) deliver the first 1,000,000,000 gallons in annual
cellulosic biofuels production by 2015;
(3) ensure biofuels produced after 2015 are cost
competitive with gasoline and diesel; and
(4) ensure that small feedstock producers and rural small
businesses are full participants in the development of the
cellulosic biofuels industry.
(b) Definitions.--In this section:
(1) Cellulosic biofuels.--The term ``cellulosic biofuels''
means any fuel that is produced from cellulosic feedstocks.
(2) Eligible entity.--The term ``eligible entity'' means a
producer of fuel from cellulosic biofuels the production
facility of which--
(A) is located in the United States;
(B) meets all applicable Federal and State
permitting requirements; and
(C) meets any financial criteria established by the
Secretary.
(c) Program.--
(1) Establishment.--The Secretary, in consultation with the
Secretary of Agriculture, the Secretary of Defense, and the
Administrator of the Environmental Protection Agency, shall
establish an incentive program for the production of cellulosic
biofuels.
(2) Basis of incentives.--Under the program, the Secretary
shall award production incentives on a per gallon basis of
cellulosic biofuels from eligible entities, through--
(A) set payments per gallon of cellulosic biofuels
produced in an amount determined by the Secretary,
until initiation of the first reverse auction; and
(B) reverse auction thereafter.
(3) First reverse auction.--The first reverse auction shall
be held on the earlier of--
(A) not later than 1 year after the first year of
annual production in the United States of 100,000,000
gallons of cellulosic biofuels, as determined by the
Secretary; or
(B) not later than 3 years after the date of
enactment of this Act.
(4) Reverse auction procedure.--
(A) In general.--On initiation of the first reverse
auction, and each year thereafter until the earlier of
the first year of annual production in the United
States of 1,000,000,000 gallons of cellulosic biofuels,
as determined by the Secretary, or 10 years after the
date of enactment of this Act, the Secretary shall
conduct a reverse auction at which--
(i) the Secretary shall solicit bids from
eligible entities;
(ii) eligible entities shall submit--
(I) a desired level of production
incentive on a per gallon basis; and
(II) an estimated annual production
amount in gallons; and
(iii) the Secretary shall issue awards for
the production amount submitted, beginning with
the eligible entity submitting the bid for the
lowest level of production incentive on a per
gallon basis and meeting such other criteria as
are established by the Secretary, until the
amount of funds available for the reverse
auction is committed.
(B) Amount of incentive received.--An eligible
entity selected by the Secretary through a reverse
auction shall receive the amount of performance
incentive requested in the auction for each gallon
produced and sold by the entity during the first 6
years of operation.
(C) Commencement of production of cellulosic
biofuels.--As a condition of the receipt of an award
under this section, an eligible entity shall enter into
an agreement with the Secretary under which the
eligible entity agrees to begin production of
cellulosic biofuels not later than 3 years after the
date of the reverse auction in which the eligible
entity participates.
(d) Limitations.--Awards under this section shall be limited to--
(1) a per gallon amount determined by the Secretary during
the first 4 years of the program;
(2) a declining per gallon cap over the remaining lifetime
of the program, to be established by the Secretary so that
cellulosic biofuels produced after the first year of annual
cellulosic biofuels production in the United States in excess
of 1,000,000,000 gallons are cost competitive with gasoline and
diesel;
(3) not more than 25 percent of the funds committed within
each reverse auction to any 1 project;
(4) not more than $100,000,000 in any 1 year; and
(5) not more than $1,000,000,000 over the lifetime of the
program.
(e) Priority.--In selecting a project under the program, the
Secretary shall give priority to projects that--
(1) demonstrate outstanding potential for local and
regional economic development;
(2) include agricultural producers or cooperatives of
agricultural producers as equity partners in the ventures; and
(3) have a strategic agreement in place to fairly reward
feedstock suppliers.
(f) Authorizations of Appropriations.--There is authorized to be
appropriated to carry out this section $250,000,000.
SEC. 939. PROCUREMENT OF BIOBASED PRODUCTS.
(a) Federal Procurement.--
(1) Definition of procuring agency.--Section 9001 of the
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8101)
is amended--
(A) by redesignating paragraphs (4), (5), and (6)
as paragraphs (5), (6), and (7), respectively; and
(B) by inserting after paragraph (3) the following:
``(4) Procuring agency.--The term `procuring agency'
means--
``(A) any Federal agency that is using Federal
funds for procurement; or
``(B) any person contracting with any Federal
agency with respect to work performed under the
contract.''.
(2) Procurement.--Section 9002 of the Farm Security and
Rural Investment Act of 2002 (7 U.S.C. 8102) is amended--
(A) by striking ``Federal agency'' each place it
appears (other than in subsections (f) and (g)) and
inserting ``procuring agency'';
(B) in subsection (c)(2)--
(i) by striking ``(2)'' and all that
follows through ``Notwithstanding'' and
inserting the following:
``(2) Flexibility.--Notwithstanding'';
(ii) by striking ``an agency'' and
inserting ``a procuring agency''; and
(iii) by striking ``the agency'' and
inserting ``the procuring agency'';
(C) in subsection (d), by striking ``procured by
Federal agencies'' and inserting ``procured by
procuring agencies''; and
(D) in subsection (f), by striking ``Federal
agencies'' and inserting ``procuring agencies'' .
(b) Capitol Complex Procurement.--Section 9002 of the Farm Security
and Rural Investment Act of 2002 (7 U.S.C. 8102) (as amended by
subsection (a)(2)) is amended--
(1) by redesignating subsection (j) as subsection (k); and
(2) by inserting after subsection (i) the following:
``(j) Inclusion.--Not later than 90 days after the date of
enactment of the Energy Policy Act of 2005, the Architect of the
Capitol, the Sergeant at Arms of the Senate, and the Chief
Administrative Officer of the House of Representatives shall establish
procedures that apply the requirements of this section to procurement
for the Capitol Complex.''.
(c) Education.--
(1) In general.--The Architect of the Capitol shall
establish in the Capitol Complex a program of public education
regarding use by the Architect of the Capitol of biobased
products.
(2) Purposes.--The purposes of the program shall be--
(A) to establish the Capitol Complex as a showcase
for the existence and benefits of biobased products;
and
(B) to provide access to further information on
biobased products to occupants and visitors.
(d) Procedure.--Requirements issued under the amendments made by
subsection (b) shall be made in accordance with directives issued by
the Committee on Rules and Administration of the Senate and the
Committee on House Administration of the House of Representatives.
SEC. 940. SMALL BUSINESS BIOPRODUCT MARKETING AND CERTIFICATION GRANTS.
(a) In General.--Using amounts made available under subsection (g),
the Secretary of Agriculture (referred to in this section as the
``Secretary'') shall make available on a competitive basis grants to
eligible entities described in subsection (b) for the biobased product
marketing and certification purposes described in subsection (c).
(b) Eligible Entities.--
(1) In general.--An entity eligible for a grant under this
section is any manufacturer of biobased products that--
(A) proposes to use the grant for the biobased
product marketing and certification purposes described
in subsection (c); and
(B) has not previously received a grant under this
section.
(2) Preference.--In making grants under this section, the
Secretary provide a preference to an eligible entity that has
fewer than 50 employees.
(c) Biobased Product Marketing and Certification Grant Purposes.--A
grant made under this section shall be used--
(1) to provide working capital for marketing of biobased
products; and
(2) to provide for the certification of biobased products
to--
(A) qualify for the label described in section
9002(h)(1) of the Farm Security and Rural Investment
Act of 2002 (7 U.S.C. 8102(h)(1)); or
(B) meet other biobased standards determined
appropriate by the Secretary.
(d) Matching Funds.--
(1) In general.--Grant recipients shall provide matching
non-Federal funds equal to the amount of the grant received.
(2) Expenditure.--Matching funds shall be expended in
advance of grant funding, so that for every dollar of grant
that is advanced, an equal amount of matching funds shall have
been funded prior to submitting the request for reimbursement.
(e) Amount.--A grant made under this section shall not exceed
$100,000.
(f) Administration.--The Secretary shall establish such
administrative requirements for grants under this section, including
requirements for applications for the grants, as the Secretary
considers appropriate.
(g) Authorizations of Appropriations.--There are authorized to be
appropriated to make grants under this section--
(1) $1,000,000 for fiscal year 2006; and
(2) such sums as are necessary for fiscal year 2007 and
each subsequent fiscal year.
SEC. 941. REGIONAL BIOECONOMY DEVELOPMENT GRANTS.
(a) In General.--Using amounts made available under subsection (g),
the Secretary of Agriculture (referred to in this section as the
``Secretary'') shall make available on a competitive basis grants to
eligible entities described in subsection (b) for the purposes
described in subsection (c).
(b) Eligible Entities.--An entity eligible for a grant under this
section is any regional bioeconomy development association,
agricultural or energy trade association, or Land Grant institution
that--
(1) proposes to use the grant for the purposes described in
subsection (c); and
(2) has not previously received a grant under this section.
(c) Regional Bioeconomy Development Association Grant Purposes.--A
grant made under this section shall be used to support and promote the
growth and development of the bioeconomy within the region served by
the eligible entity, through coordination, education, outreach, and
other endeavors by the eligible entity.
(d) Matching Funds.--
(1) In general.--Grant recipients shall provide matching
non-Federal funds equal to the amount of the grant received.
(2) Expenditure.--Matching funds shall be expended in
advance of grant funding, so that for every dollar of grant
that is advanced, an equal amount of matching funds shall have
been funded prior to submitting the request for reimbursement.
(e) Administration.--The Secretary shall establish such
administrative requirements for grants under this section, including
requirements for applications for the grants, as the Secretary
considers appropriate.
(f) Amount.--A grant made under this section shall not exceed
$500,000.
(g) Authorizations of Appropriations.--There are authorized to be
appropriated to make grants under this section--
(1) $1,000,000 for fiscal year 2006; and
(2) such sums as are necessary for fiscal year 2007 and
each subsequent fiscal year.
SEC. 942. PREPROCESSING AND HARVESTING DEMONSTRATION GRANTS.
(a) In General.--The Secretary of Agriculture (referred to in this
section as the ``Secretary'') shall make grants available on a
competitive basis to enterprises owned by agricultural producers, for
the purposes of demonstrating cost-effective, cellulosic biomass
innovations in--
(1) preprocessing of feedstocks, including cleaning,
separating and sorting, mixing or blending, and chemical or
biochemical treatments, to add value and lower the cost of
feedstock processing at a biorefinery; or
(2) 1-pass or other efficient, multiple crop harvesting
techniques.
(b) Limitations on Grants.--
(1) Number of grants.--Not more than 5 demonstration
projects per fiscal year shall be funded under this section.
(2) Non-federal cost share.--The non-Federal cost share of
a project under this section shall be not less than 20 percent,
as determined by the Secretary.
(c) Condition of Grant.--To be eligible for a grant for a project
under this section, a recipient of a grant or a participating entity
shall agree to use the material harvested under the project--
(1) to produce ethanol; or
(2) for another energy purpose, such as the generation of
heat or electricity.
(d) Authorization for Appropriations.--There is authorized to be
appropriated to carry out this section $5,000,000 for each of fiscal
years 2006 through 2010.
SEC. 943. EDUCATION AND OUTREACH.
(a) In General.--The Secretary of Agriculture shall establish,
within the Department of Agriculture or through an independent
contracting entity, a program of education and outreach on biobased
fuels and biobased products consisting of--
(1) training and technical assistance programs for
feedstock producers to promote producer ownership, investment,
and participation in the operation of processing facilities;
and
(2) public education and outreach to familiarize consumers
with the biobased fuels and biobased products.
(b) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this title $1,000,000 for each of fiscal
years 2006 through 2010.
SEC. 944. REPORTS.
(a) Biobased Product Potential.--Not later than 1 year after the
date of enactment of this Act, the Secretary of Agriculture (referred
to in this section as the ``Secretary'') shall submit to the Committee
on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate a report that--
(1) describes the economic potential for the United States
of the widespread production and use of commercial and
industrial biobased products through calendar year 2025; and
(2) as the maximum extent practicable, identifies the
economic potential by product area.
(b) Analysis of Economic Indicators.--Not later than 2 years after
the date of enactment of this Act, the Secretary shall submit to
Congress an analysis of economic indicators of the biobased economy.
Subtitle D--Nuclear Energy
SEC. 945. NUCLEAR ENERGY.
(a) Core Programs.--There are authorized to be appropriated to the
Secretary to carry out nuclear energy research, development,
demonstration, and commercial application activities, including
activities authorized under this subtitle, other than those described
in subsection (b)--
(1) $330,000,000 for fiscal year 2006;
(2) $355,000,000 for fiscal year 2007; and
(3) $495,000,000 for fiscal year 2008.
(b) Nuclear Infrastructure Support.--There are authorized to be
appropriated to the Secretary to carry out activities under section
942(f):
(1) $135,000,000 for fiscal year 2006;
(2) $140,000,000 for fiscal year 2007; and
(3) $145,000,000 for fiscal year 2008.
(c) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 943--
(A) $150,000,000 for fiscal year 2006;
(B) $155,000,000 for fiscal year 2007; and
(C) $275,000,000 for fiscal year 2008.
(2) For activities under section 944--
(A) $43,600,000 for fiscal year 2006;
(B) $50,100,000 for fiscal year 2007; and
(C) $56,000,000 for fiscal year 2008.
(3) For activities under section 946, $6,000,000 for each
of fiscal years 2006 through 2008.
(d) Limitation.--None of the funds authorized under this section
may be used to decommission the Fast Flux Test Facility.
SEC. 946. NUCLEAR ENERGY RESEARCH PROGRAMS.
(a) Nuclear Energy Research Initiative.--The Secretary shall carry
out a Nuclear Energy Research Initiative for research and development
related to nuclear energy.
(b) Nuclear Energy Plant Optimization Program.--The Secretary shall
carry out a Nuclear Energy Plant Optimization Program to support
research and development activities addressing reliability,
availability, productivity, component aging, safety, and security of
existing nuclear power plants.
(c) Nuclear Power 2010 Program.--
(1) In general.--The Secretary shall carry out a Nuclear
Power 2010 Program, consistent with recommendations of the
Nuclear Energy Research Advisory Committee of the Department in
the report entitled ``A Roadmap to Deploy New Nuclear Power
Plants in the United States by 2010'' and dated October 2001.
(2) Administration.--The Program shall include--
(A) use of the expertise and capabilities of
industry, institutions of higher education, and
National Laboratories in evaluation of advanced nuclear
fuel cycles and fuels testing;
(B) consideration of a variety of reactor designs
suitable for both developed and developing nations;
(C) participation of international collaborators in
research, development, and design efforts, as
appropriate; and
(D) encouragement for participation by institutions
of higher education and industry.
(d) Generation IV Nuclear Energy Systems Initiative.--
(1) In general.--The Secretary shall carry out a Generation
IV Nuclear Energy Systems Initiative to develop an overall
technology plan for and to support research and development
necessary to make an informed technical decision about the most
promising candidates for eventual commercial application.
(2) Administration.--In conducting the Initiative, the
Secretary shall examine advanced proliferation-resistant and
passively safe reactor designs, including designs that--
(A) are economically competitive with other
electric power generation plants;
(B) have higher efficiency, lower cost, and
improved safety compared to reactors in operation on
the date of enactment of this Act;
(C) use fuels that are proliferation resistant and
have substantially reduced production of high-level
waste per unit of output; and
(D) use improved instrumentation.
(e) Reactor Production of Hydrogen.--The Secretary shall carry out
research to examine designs for high-temperature reactors capable of
producing large-scale quantities of hydrogen.
(f) Nuclear Infrastructure Support.--
(1) In general.--The Secretary shall--
(A) develop and implement a strategy for the
facilities of the Office of Nuclear Energy, Science,
and Technology; and
(B) submit to Congress a report describing the
strategy, along with the budget request of the
President submitted to Congress for fiscal year 2006.
(2) Administration.--The strategy shall provide a cost-
effective means for--
(A) maintaining existing facilities and
infrastructure;
(B) closing unneeded facilities;
(C) making facility upgrades and modifications; and
(D) building new facilities.
SEC. 947. ADVANCED FUEL CYCLE INITIATIVE.
(a) In General.--The Secretary, acting through the Director of the
Office of Nuclear Energy, Science and Technology, shall conduct an
advanced fuel recycling technology research and development program
(referred to in this section as the ``program'') to evaluate
proliferation-resistant fuel recycling and transmutation technologies
that minimize environmental or public health and safety impacts as an
alternative to aqueous reprocessing technologies deployed as of the
date of enactment of this Act in support of evaluation of alternative
national strategies for spent nuclear fuel and the Generation IV
advanced reactor concepts.
(b) Annual Review.--The program shall be subject to annual review
by the Nuclear Energy Research Advisory Committee of the Department or
other independent entity, as appropriate.
(c) International Cooperation.--In carrying out the program, the
Secretary is encouraged to seek opportunities to enhance the progress
of the program through international cooperation.
(d) Reports.--The Secretary shall submit, as part of the annual
budget submission of the Department, a report on the activities of the
program.
SEC. 948. NUCLEAR SCIENCE AND ENGINEERING SUPPORT FOR INSTITUTIONS OF
HIGHER EDUCATION.
(a) Establishment.--The Secretary shall support a program to invest
in human resources and infrastructure in the nuclear sciences and
engineering and related fields (including health physics and nuclear
and radiochemistry), consistent with departmental missions related to
civilian nuclear research and development.
(b) Duties.--
(1) In general.--In carrying out the program under this
section, the Secretary shall--
(A) establish fellowship and faculty assistance
programs; and
(B) provide support for fundamental research and
encourage collaborative research among industry,
National Laboratories, and institutions of higher
education through the Nuclear Energy Research
Initiative established under section 942(a).
(2) Entire fuel cycle.--The Secretary is encouraged to
support activities addressing the entire fuel cycle through
involvement of the Office of Nuclear Energy, Science and
Technology and the Office of Civilian Radioactive Waste
Management.
(3) Outreach.--The Secretary shall support communication
and outreach related to nuclear science, engineering, and
nuclear waste management.
(c) Maintaining Research and Training Reactors and Associated
Infrastructure in Institutions of Higher Education.--Activities under
this section may include--
(1) converting research reactors currently using high-
enrichment fuels to low-enrichment fuels;
(2) upgrading operational instrumentation;
(3) sharing of reactors among institutions of higher
education;
(4) providing technical assistance, in collaboration with
the United States nuclear industry, in relicensing and
upgrading training reactors as part of a student training
program; and
(5) providing funding for reactor improvements as part of a
focused effort that emphasizes research, training, and
education.
(d) Interactions Between National Laboratories and Institutions of
Higher Education.--The Secretary shall develop sabbatical fellowship
and visiting scientist programs to encourage sharing of personnel
between National Laboratories and institutions of higher education.
(e) Operating and Maintenance Costs.--Funding for a research
project provided under this section may be used to offset a portion of
the operating and maintenance costs of a research reactor at an
institution of higher education used in the research project.
SEC. 949. SECURITY OF NUCLEAR FACILITIES.
The Secretary, acting through the Director of the Office of Nuclear
Energy, Science and Technology, shall conduct a research and
development program on cost-effective technologies for increasing--
(1) the safety of nuclear facilities from natural
phenomena; and
(2) the security of nuclear facilities from deliberate
attacks.
SEC. 950. ALTERNATIVES TO INDUSTRIAL RADIOACTIVE SOURCES.
(a) Survey.--
(1) In general.--Not later than August 1, 2006, the
Secretary shall submit to Congress the results of a survey of
industrial applications of large radioactive sources.
(2) Administration.--The survey shall--
(A) consider well-logging sources as 1 class of
industrial sources;
(B) include information on current domestic and
international Department, Department of Defense, State
Department, and commercial programs to manage and
dispose of radioactive sources; and
(C) analyze available disposal options for
currently deployed or future sources and, if
deficiencies are noted for either deployed or future
sources, recommend legislative options that Congress
may consider to remedy identified deficiencies.
(b) Plan.--
(1) In general.--In conjunction with the survey conducted
under subsection (a), the Secretary shall establish a research
and development program to develop alternatives to sources
described in subsection (a) that reduce safety, environmental,
or proliferation risks to either workers using the sources or
the public.
(2) Accelerators.--Miniaturized particle accelerators for
well-logging or other industrial applications and portable
accelerators for production of short-lived radioactive
materials at an industrial site shall be considered as part of
the research and development efforts.
(3) Report.--Not later than August 1, 2006, the Secretary
shall submit to Congress a report describing the details of the
program plan.
Subtitle E--Fossil Energy
SEC. 951. FOSSIL ENERGY.
(a) In General.--There are authorized to be appropriated to the
Secretary to carry out fossil energy research, development,
demonstration, and commercial application activities, including
activities authorized under this subtitle--
(1) $583,000,000 for fiscal year 2006;
(2) $611,000,000 for fiscal year 2007; and
(3) $626,000,000 for fiscal year 2008.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under section 954, $20,000,000 for each
of fiscal years 2006 through 2008.
(2) For activities under section 955--
(A) $337,000,000 for fiscal year 2006;
(B) $364,000,000 for fiscal year 2007; and
(C) $394,000,000 for fiscal year 2008.
(3) For activities under section 956--
(A) $20,000,000 for fiscal year 2006;
(B) $25,000,000 for fiscal year 2007; and
(C) $30,000,000 for fiscal year 2008.
(4) For the Office of Arctic Energy under section 3197 of
the Floyd D. Spence National Defense Authorization Act for
Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000 for each of
fiscal years 2006 through 2008.
(c) Extended Authorization.--There are authorized to be
appropriated to the Secretary for the Office of Arctic Energy
established under section 3197 of the Floyd D. Spence National Defense
Authorization Act for Fiscal Year 2001 (42 U.S.C. 7144d) $25,000,000
for each of fiscal years 2009 through 2012.
(d) Limitations.--
(1) Uses.--None of the funds authorized under this section
may be used for Fossil Energy Environmental Restoration or
Import/Export Authorization.
(2) Institutions of higher education.--Of the funds
authorized under subsection (b)(1), not less than 20 percent of
the funds appropriated for each fiscal year shall be dedicated
to research and development carried out at institutions of
higher education.
SEC. 952. OIL AND GAS RESEARCH PROGRAMS.
(a) Oil and Gas Research.--The Secretary shall conduct a program of
research, development, demonstration, and commercial application of oil
and gas, including--
(1) exploration and production;
(2) gas hydrates;
(3) reservoir life and extension;
(4) transportation and distribution infrastructure;
(5) ultraclean fuels;
(6) heavy oil and shale; and
(7) related environmental research.
(b) Natural Gas and Oil Deposits Report.--Not later than 2 years
after the date of enactment of this Act and every 2 years thereafter,
the Secretary of the Interior, in consultation with other appropriate
Federal agencies, shall submit to Congress a report on the latest
estimates of natural gas and oil reserves, reserves growth, and
undiscovered resources in Federal and State waters off the coast of
Louisiana, Texas, Alabama, and Mississippi.
(c) Integrated Clean Power and Energy Research.--
(1) Establishment of center.--The Secretary shall establish
a national center or consortium of excellence in clean energy
and power generation, using the resources of the Clean Power
and Energy Research Consortium in existence on the date of
enactment of this Act, to address the critical dependence of
the United States on energy and the need to reduce emissions.
(2) Focus areas.--The center or consortium shall conduct a
program of research, development, demonstration, and commercial
application on integrating the following 6 focus areas:
(A) Efficiency and reliability of gas turbines for
power generation.
(B) Reduction in emissions from power generation.
(C) Promotion of energy conservation issues.
(D) Effectively using alternative fuels and
renewable energy.
(E) Development of advanced materials technology
for oil and gas exploration and use in harsh
environments.
(F) Education on energy and power generation
issues.
SEC. 953. METHANE HYDRATE RESEARCH.
(a) In General.--The Methane Hydrate Research and Development Act
of 2000 (30 U.S.C. 1902 note; Public Law 106-193) is amended to read as
follows:
``SECTION 1. SHORT TITLE.
``This Act may be cited as the `Methane Hydrate Research and
Development Act of 2000'.
``SEC. 2. FINDINGS.
``Congress finds that--
``(1) in order to promote energy independence and meet the
increasing demand for energy, the United States will require a
diversified portfolio of substantially increased quantities of
electricity, natural gas, and transportation fuels;
``(2) according to the report submitted to Congress by the
National Research Council entitled `Charting the Future of
Methane Hydrate Research in the United States', the total
United States resources of gas hydrates have been estimated to
be on the order of 200,000 trillion cubic feet;
``(3) according to the report of the National Commission on
Energy Policy entitled `Ending the Energy Stalemate--A
Bipartisan Strategy to Meet America's Energy Challenge', and
dated December 2004, the United States may be endowed with over
1/4 of the methane hydrate deposits in the world;
``(4) according to the Energy Information Administration, a
shortfall in natural gas supply from conventional and
unconventional sources is expected to occur in or about 2020;
and
``(5) the National Academy of Science states that methane
hydrate may have the potential to alleviate the projected
shortfall in the natural gas supply.
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Contract.--The term `contract' means a procurement
contract within the meaning of section 6303 of title 31, United
States Code.
``(2) Cooperative agreement.--The term `cooperative
agreement' means a cooperative agreement within the meaning of
section 6305 of title 31, United States Code.
``(3) Director.--The term `Director' means the Director of
the National Science Foundation.
``(4) Grant.--The term `grant' means a grant awarded under
a grant agreement (within the meaning of section 6304 of title
31, United States Code).
``(5) Industrial enterprise.--The term `industrial
enterprise' means a private, nongovernmental enterprise that
has an expertise or capability that relates to methane hydrate
research and development.
``(6) Institution of higher education.--The term
`institution of higher education' means an institution of
higher education (as defined in section 102 of the Higher
Education Act of 1965 (20 U.S.C. 1002)).
``(7) Secretary.--The term `Secretary' means the Secretary
of Energy, acting through the Assistant Secretary for Fossil
Energy.
``(8) Secretary of commerce.--The term `Secretary of
Commerce' means the Secretary of Commerce, acting through the
Administrator of the National Oceanic and Atmospheric
Administration.
``(9) Secretary of defense.--The term `Secretary of
Defense' means the Secretary of Defense, acting through the
Secretary of the Navy.
``(10) Secretary of the interior.--The term `Secretary of
the Interior' means the Secretary of the Interior, acting
through the Director of the United States Geological Survey,
the Director of the Bureau of Land Management, and the Director
of the Minerals Management Service.
``SEC. 4. METHANE HYDRATE RESEARCH AND DEVELOPMENT PROGRAM.
``(a) In General.--
``(1) Commencement of program.--Not later than 90 days
after the date of enactment of the Energy Research,
Development, Demonstration, and Commercial Application Act of
2005, the Secretary, in consultation with the Secretary of
Commerce, the Secretary of Defense, the Secretary of the
Interior, and the Director, shall commence a program of methane
hydrate research and development in accordance with this
section.
``(2) Designations.--The Secretary, the Secretary of
Commerce, the Secretary of Defense, the Secretary of the
Interior, and the Director shall designate individuals to carry
out this section.
``(3) Coordination.--The individual designated by the
Secretary shall coordinate all activities within the Department
of Energy relating to methane hydrate research and development.
``(4) Meetings.--The individuals designated under paragraph
(2) shall meet not later than 180 days after the date of
enactment of the Energy Research, Development, Demonstration,
and Commercial Application Act of 2005 and not less frequently
than every 180 days thereafter to--
``(A) review the progress of the program under
paragraph (1); and
``(B) coordinate interagency research and
partnership efforts in carrying out the program.
``(b) Grants, Contracts, Cooperative Agreements, Interagency Funds
Transfer Agreements, and Field Work Proposals.--
``(1) Assistance and coordination.--In carrying out the
program of methane hydrate research and development authorized
by this section, the Secretary may award grants to, or enter
into contracts or cooperative agreements with, institutions of
higher education, oceanographic institutions, and industrial
enterprises to--
``(A) conduct basic and applied research to
identify, explore, assess, and develop methane hydrate
as a commercially viable source of energy;
``(B) identify methane hydrate resources through
remote sensing;
``(C) acquire and reprocess seismic data suitable
for characterizing methane hydrate accumulations;
``(D) assist in developing technologies required
for efficient and environmentally sound development of
methane hydrate resources;
``(E) promote education and training in methane
hydrate resource research and resource development
through fellowships or other means for graduate
education and training;
``(F) conduct basic and applied research to assess
and mitigate the environmental impact of hydrate
degassing (including both natural degassing and
degassing associated with commercial development);
``(G) develop technologies to reduce the risks of
drilling through methane hydrates; and
``(H) conduct exploratory drilling, well testing,
and production testing operations on permafrost and
non-permafrost gas hydrates in support of the
activities authorized by this paragraph, including
drilling of 1 or more full-scale production test wells.
``(2) Competitive peer review.--Funds made available under
paragraph (1) shall be made available based on a competitive
process using external scientific peer review of proposed
research.
``(c) Methane Hydrates Advisory Panel.--
``(1) In general.--The Secretary shall establish an
advisory panel (including the hiring of appropriate staff)
consisting of representatives of industrial enterprises,
institutions of higher education, oceanographic institutions,
State agencies, and environmental organizations with knowledge
and expertise in the natural gas hydrates field, to--
``(A) assist in developing recommendations and
broad programmatic priorities for the methane hydrate
research and development program carried out under
subsection (a)(1);
``(B) provide scientific oversight for the methane
hydrates program, including assessing progress toward
program goals, evaluating program balance, and
providing recommendations to enhance the quality of the
program over time; and
``(C) not later than 2 years after the date of
enactment of the Energy Research, Development,
Demonstration, and Commercial Application Act of 2005,
and at such later dates as the panel considers
advisable, submit to Congress--
``(i) an assessment of the methane hydrate
research program; and
``(ii) an assessment of the 5-year research
plan of the Department of Energy.
``(2) Conflicts of interest.--In appointing each member of
the advisory panel established under paragraph (1), the
Secretary shall ensure, to the maximum extent practicable, that
the appointment of the member does not pose a conflict of
interest with respect to the duties of the member under this
Act.
``(3) Meetings.--The advisory panel shall--
``(A) hold the initial meeting of the advisory
panel not later than 180 days after the date of
establishment of the advisory panel; and
``(B) meet biennially thereafter.
``(4) Coordination.--The advisory panel shall coordinate
activities of the advisory panel with program managers of the
Department of Energy at appropriate national laboratories
``(d) Construction Costs.--None of the funds made available to
carry out this section may be used for the construction of a new
building or the acquisition, expansion, remodeling, or alteration of an
existing building (including site grading and improvement and architect
fees).
``(e) Responsibilities of the Secretary.--In carrying out
subsection (b)(1), the Secretary shall--
``(1) facilitate and develop partnerships among government,
industrial enterprises, and institutions of higher education to
research, identify, assess, and explore methane hydrate
resources;
``(2) undertake programs to develop basic information
necessary for promoting long-term interest in methane hydrate
resources as an energy source;
``(3) ensure that the data and information developed
through the program are accessible and widely disseminated as
needed and appropriate;
``(4) promote cooperation among agencies that are
developing technologies that may hold promise for methane
hydrate resource development;
``(5) report annually to Congress on the results of actions
taken to carry out this Act; and
``(6) ensure, to the maximum extent practicable, greater
participation by the Department of Energy in international
cooperative efforts.
``SEC. 5. NATIONAL RESEARCH COUNCIL STUDY.
``(a) Agreement for Study.--The Secretary shall offer to enter into
an agreement with the National Research Council under which the
National Research Council shall--
``(1) conduct a study of the progress made under the
methane hydrate research and development program implemented
under this Act; and
``(2) make recommendations for future methane hydrate
research and development needs.
``(b) Report.--Not later than September 30, 2009, the Secretary
shall submit to Congress a report containing the findings and
recommendations of the National Research Council under this section.
``SEC. 6. REPORTS AND STUDIES FOR CONGRESS.
``The Secretary shall provide to the Committee on Science of the
House of Representatives and the Committee on Energy and Natural
Resources of the Senate copies of any report or study that the
Department of Energy prepares at the direction of any committee of
Congress relating to the methane hydrate research and development
program implemented under this Act.
``SEC. 7. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the Secretary to carry
out this Act, to remain available until expended--
``(1) $15,000,000 for fiscal year 2006;
``(2) $20,000,000 for fiscal year 2007;
``(3) $30,000,000 for fiscal year 2008;
``(4) $50,000,000 for fiscal year 2009; and
``(5) $50,000,000 for fiscal year 2010.''.
(b) Reclassification.--The Law Revision Counsel shall reclassify
the Methane Hydrate Research and Development Act of 2000 (30 U.S.C.
1902 note; Public Law 106-193) to a new chapter at the end of title 30,
United States Code.
SEC. 954. LOW-VOLUME GAS RESERVOIR RESEARCH PROGRAM.
(a) Definitions of GIS.--In this section, the term ``GIS'' means
geographic information systems technology that facilitates the
organization and management of data with a geographic component.
(b) Program.--The Secretary shall establish a program of research,
development, demonstration, and commercial application to maximize the
productive capacity of marginal wells and reservoirs.
(c) Data Collection.--Under the program, the Secretary shall
collect data on--
(1) the status and location of marginal wells and gas
reservoirs;
(2) the production capacity of marginal wells and gas
reservoirs;
(3) the location of low-pressure gathering facilities and
pipelines; and
(4) the quantity of natural gas vented or flared in
association with crude oil production.
(d) Analysis.--Under the program, the Secretary shall--
(1) estimate the remaining producible reserves based on
variable pipeline pressures; and
(2) recommend measures that will enable the continued
production of those resources.
(e) Study.--
(1) In general.--The Secretary may award a grant to an
organization of States that contain significant numbers of
marginal oil and natural gas wells to conduct an annual study
of low-volume natural gas reservoirs.
(2) Organization with no gis capabilities.--If an
organization receiving a grant under paragraph (1) does not
have GIS capabilities, the organization shall contract with an
institution of higher education with GIS capabilities.
(3) State geologists.--The organization receiving a grant
under paragraph (1) shall collaborate with the State geologist
of each State being studied.
(f) Public Information.--The Secretary may use the data collected
and analyzed under this section to produce maps and literature to
disseminate to States to promote conservation of natural gas reserves.
(g) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary to carry out this section--
(1) $1,500,000 for fiscal year 2006; and
(2) $450,000 for each of fiscal years 2007 and 2008.
SEC. 955. RESEARCH AND DEVELOPMENT FOR COAL MINING TECHNOLOGIES.
(a) Establishment.--The Secretary shall carry out a program for
research and development on coal mining technologies.
(b) Cooperation.--In carrying out the program, the Secretary shall
cooperate with appropriate Federal agencies, coal producers, trade
associations, equipment manufacturers, institutions of higher education
with mining engineering departments, and other relevant entities.
(c) Program.--The research and development activities carried out
under this section shall--
(1) be guided by the mining research and development
priorities identified by the Mining Industry of the Future
Program and in the recommendations from relevant reports of the
National Academy of Sciences on mining technologies;
(2) include activities exploring minimization of
contaminants in mined coal that contribute to environmental
concerns including development and demonstration of
electromagnetic wave imaging ahead of mining operations;
(3) develop and demonstrate coal bed electromagnetic wave
imaging, spectroscopic reservoir analysis technology, and
techniques for horizontal drilling in order to--
(A) identify areas of high coal gas content;
(B) increase methane recovery efficiency;
(C) prevent spoilage of domestic coal reserves; and
(D) minimize water disposal associated with methane
extraction; and
(4) expand mining research capabilities at institutions of
higher education.
SEC. 956. COAL AND RELATED TECHNOLOGIES PROGRAM.
(a) In General.--In addition to the programs authorized under title
IV, the Secretary shall conduct a program of technology research,
development, and demonstration and commercial application for coal and
power systems, including programs to facilitate production and
generation of coal-based power through--
(1) innovations for existing plants (including mercury
removal);
(2) gasification systems;
(3) advanced combustion systems;
(4) turbines for synthesis gas derived from coal;
(5) carbon capture and sequestration research and
development;
(6) coal-derived chemicals and transportation fuels;
(7) liquid fuels derived from low rank coal water;
(8) solid fuels and feedstocks;
(9) advanced coal-related research;
(10) advanced separation technologies; and
(11) fuel cells for the operation of synthesis gas derived
from coal.
(b) Cost and Performance Goals.--
(1) In general.--In carrying out programs authorized by
this section, the Secretary shall identify cost and performance
goals for coal-based technologies that would permit the
continued cost-competitive use of coal for the production of
electricity, chemical feedstocks, and transportation fuels in
2008, 2010, 2012, and 2016, and each calendar year beginning
after September 30, 2021.
(2) Administration.--In establishing the cost and
performance goals, the Secretary shall--
(A) consider activities and studies undertaken as
of the date of enactment of this Act by industry in
cooperation with the Department in support of the
identification of the goals;
(B) consult with interested entities, including--
(i) coal producers;
(ii) industries using coal;
(iii) organizations that promote coal and
advanced coal technologies;
(iv) environmental organizations;
(v) organizations representing workers; and
(vi) organizations representing consumers;
(C) not later than 120 days after the date of
enactment of this Act, publish in the Federal Register
proposed draft cost and performance goals for public
comments; and
(D) not later than 180 days after the date of
enactment of this Act and every 4 years thereafter,
submit to Congress a report describing the final cost
and performance goals for the technologies that
includes--
(i) a list of technical milestones; and
(ii) an explanation of how programs
authorized in this section will not duplicate
the activities authorized under the Clean Coal
Power Initiative authorized under title IV.
(c) Powder River Basin and Fort Union Lignite Coal Mercury
Removal.--
(1) In general.--In addition to the programs authorized by
subsection (a), the Secretary may establish a program to test
and develop technologies to control and remove mercury
emissions from subbituminous coal mined in the Powder River
Basin, and Fort Union lignite coals, that are used for the
generation of electricity.
(2) Efficacy of mercury removal technology.--In carrying
out the program under paragraph (1), the Secretary shall
examine the efficacy of mercury removal technologies on coals
described in that paragraph that are blended with other types
of coal.
(d) Fuel Cells.--
(1) In general.--The Secretary shall conduct a program of
research, development, demonstration, and commercial
application on fuel cells for low-cost, high-efficiency, fuel-
flexible, modular power systems.
(2) Demonstrations.--The demonstrations referred to in
paragraph (1) shall include solid oxide fuel cell technology
for commercial, residential, and transportation applications,
and distributed generation systems, using improved
manufacturing production and processes.
SEC. 957. CARBON CAPTURE RESEARCH AND DEVELOPMENT PROGRAM.
(a) In General.--The Secretary shall carry out a 10-year carbon
capture research and development program to develop carbon dioxide
capture technologies on combustion-based systems for use--
(1) in new coal utilization facilities; and
(2) on the fleet of coal-based units in existence on the
date of enactment of this Act.
(b) Objectives.--The objectives of the program under subsection (a)
shall be--
(1) to develop carbon dioxide capture technologies,
including adsorption and absorption techniques and chemical
processes, to remove the carbon dioxide from gas streams
containing carbon dioxide potentially amenable to
sequestration;
(2) to develop technologies that would directly produce
concentrated streams of carbon dioxide potentially amenable to
sequestration;
(3) to increase the efficiency of the overall system to
reduce the quantity of carbon dioxide emissions released from
the system per megawatt generated; and
(4) in accordance with the carbon dioxide capture program,
to promote a robust carbon sequestration program and continue
the work of the Department, in conjunction with the private
sector, through regional carbon sequestration partnerships.
SEC. 958. COMPLEX WELL TECHNOLOGY TESTING FACILITY.
The Secretary, in coordination with industry leaders in extended
research drilling technology, shall establish a Complex Well Technology
Testing Facility at the Rocky Mountain Oilfield Testing Center to
increase the range of extended drilling technologies.
Subtitle F--Science
SEC. 961. SCIENCE.
(a) In General.--There are authorized to be appropriated to the
Secretary to carry out research, development, demonstration, and
commercial application activities of the Office of Science, including
activities authorized under this subtitle (including the amounts
authorized under the amendment made by section 967(b) and including
basic energy sciences, advanced scientific and computing research,
biological and environmental research, fusion energy sciences, high
energy physics, nuclear physics, research analysis, and infrastructure
support)--
(1) $4,153,000,000 for fiscal year 2006;
(2) $4,586,000,000 for fiscal year 2007; and
(3) $5,000,000,000 for fiscal year 2008.
(b) Allocations.--From amounts authorized under subsection (a), the
following sums are authorized:
(1) For activities under the Fusion Energy Sciences program
(including activities under section 962)--
(A) $349,000,000 for fiscal year 2006;
(B) $362,000,000 for fiscal year 2007; and
(C) $377,000,000 for fiscal year 2008.
(2) For activities under the catalysis research program
established under section 964--
(A) $35,000,000 for fiscal year 2006;
(B) $36,500,000 for fiscal year 2007; and
(C) $38,200,000 for fiscal year 2008.
(3) For activities under the Genomes to Life Program
established under section 968--
(A) $170,000,000 for fiscal year 2006;
(B) $325,000,000 for fiscal year 2007; and
(C) $415,000,000 for fiscal year 2008.
(4) For construction and ancillary equipment for user
facilities under section 968(d) for the Genomes to Life
Program, of the amounts authorized under paragraph (3)--
(A) $70,000,000 for fiscal year 2006;
(B) $175,000,000 for fiscal year 2007; and
(C) $215,000,000 for fiscal year 2008.
(5) For activities under the Energy-Water Supply
Technologies Program established under section 970, $30,000,000
for each of fiscal years 2006 through 2008.
(c) Fusion Energy Sciences Program.--In addition to the funds
authorized under subsection (b)(1), there are authorized to be
appropriated for construction costs associated with the Fusion Energy
Sciences Program under section 962--
(1) $55,000,000 for fiscal year 2006;
(2) $95,000,000 for fiscal year 2007; and
(3) $115,000,000 for fiscal year 2008.
SEC. 962. FUSION ENERGY SCIENCES PROGRAM.
(a) Declaration of Policy.--It shall be the policy of the United
States to conduct research, development, demonstration, and commercial
applications to provide for the scientific, engineering, and commercial
infrastructure necessary to ensure that the United States is
competitive with other countries in providing fusion energy for its own
needs and the needs of other countries, including by demonstrating
electric power or hydrogen production for the United States energy grid
using fusion energy at the earliest date.
(b) Planning.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall submit to Congress a
plan (with proposed cost estimates, budgets, and lists of
potential international partners) for the implementation of the
policy described in subsection (a) in a manner that ensures
that--
(A) existing fusion research facilities are more
fully used;
(B) fusion science, technology, theory, advanced
computation, modeling, and simulation are strengthened;
(C) new magnetic and inertial fusion research and
development facilities are selected based on scientific
innovation and cost effectiveness, and the potential of
the facilities to advance the goal of practical fusion
energy at the earliest date practicable;
(D) facilities that are selected are funded at a
cost-effective rate;
(E) communication of scientific results and methods
between the fusion energy science community and the
broader scientific and technology communities is
improved;
(F) inertial confinement fusion facilities are used
to the extent practicable for the purpose of inertial
fusion energy research and development;
(G) attractive alternative inertial and magnetic
fusion energy approaches are more fully explored; and
(H) to the extent practicable, the recommendations
of the Fusion Energy Sciences Advisory Committee in the
report on workforce planning, dated March 2004, are
carried out, including periodic reassessment of program
needs.
(2) Costs and schedules.--The plan shall also address the
status of and, to the extent practicable, costs and schedules
for--
(A) the design and implementation of international
or national facilities for the testing of fusion
materials; and
(B) the design and implementation of international
or national facilities for the testing and development
of key fusion technologies.
(c) United States Participation in ITER.--
(1) Definitions.--In this subsection:
(A) Construction.--
(i) In general.--The term ``construction''
means--
(I) the physical construction of
the ITER facility; and
(II) the physical construction,
purchase, or manufacture of equipment
or components that are specifically
designed for the ITER facility.
(ii) Exclusions.--The term ``construction''
does not include the design of the facility,
equipment, or components.
(B) ITER.--The term ``ITER'' means the
international burning plasma fusion research project in
which the President announced United States
participation on January 30, 2003, or any similar
international project.
(2) Participation.--The United States may participate in
the ITER only in accordance with this subsection.
(3) Agreement.--
(A) In general.--The Secretary may negotiate an
agreement for United States participation in the ITER.
(B) Contents.--Any agreement for United States
participation in the ITER shall, at a minimum--
(i) clearly define the United States
financial contribution to construction and
operating costs, as well as any other costs
associated with a project;
(ii) ensure that the share of high-
technology components of the ITER manufactured
in the United States is at least proportionate
to the United States financial contribution to
the ITER;
(iii) ensure that the United States will
not be financially responsible for cost
overruns in components manufactured in other
ITER participating countries;
(iv) guarantee the United States full
access to all data generated by the ITER;
(v) enable United States researchers to
propose and carry out an equitable share of the
experiments at the ITER;
(vi) provide the United States with a role
in all collective decisionmaking related to the
ITER; and
(vii) describe the process for
discontinuing or decommissioning the ITER and
any United States role in that process.
(4) Plan.--
(A) Development.--The Secretary, in consultation
with the Fusion Energy Sciences Advisory Committee,
shall develop a plan for the participation of United
States scientists in the ITER that shall include--
(i) the United States research agenda for
the ITER;
(ii) methods to evaluate whether the ITER
is promoting progress toward making fusion a
reliable and affordable source of power; and
(iii) a description of how work at the ITER
will relate to other elements of the United
States fusion program.
(B) Review.--The Secretary shall request a review
of the plan by the National Academy of Sciences.
(5) Limitation.--No Federal funds shall be expended for the
construction of the ITER until the Secretary has submitted to
Congress--
(A) the agreement negotiated in accordance with
paragraph (3) and 120 days have elapsed since that
submission;
(B) a report describing the management structure of
the ITER and providing a fixed dollar estimate of the
cost of United States participation in the construction
of the ITER, and 120 days have elapsed since that
submission;
(C) a report describing how United States
participation in the ITER will be funded without
reducing funding for other programs in the Office of
Science (including other fusion programs), and 60 days
have elapsed since that submission; and
(D) the plan required by paragraph (4) (but not the
National Academy of Sciences review of that plan), and
60 days have elapsed since that submission.
(6) Alternative to iter.--
(A) In general.--If at any time during the
negotiations on the ITER, the Secretary determines that
construction and operation of the ITER is unlikely or
infeasible, the Secretary shall submit to Congress,
along with the budget request of the President
submitted to Congress for the following fiscal year, a
plan for implementing a domestic burning plasma
experiment such as the Fusion Ignition Research
Experiment, including costs and schedules for the plan.
(B) Administration.--The Secretary shall--
(i) refine the plan in full consultation
with the Fusion Energy Sciences Advisory
Committee; and
(ii) transmit the plan to the National
Academy of Sciences for review.
SEC. 963. SUPPORT FOR SCIENCE AND ENERGY FACILITIES AND INFRASTRUCTURE.
(a) Facility and Infrastructure Policy.--
(1) In general.--The Secretary shall develop and implement
a strategy for facilities and infrastructure supported
primarily from the Office of Science, the Office of Energy
Efficiency and Renewable Energy, the Office of Fossil Energy,
or the Office of Nuclear Energy, Science and Technology
Programs at all National Laboratories and single-purpose
research facilities.
(2) Strategy.--The strategy shall provide cost-effective
means for--
(A) maintaining existing facilities and
infrastructure;
(B) closing unneeded facilities;
(C) making facility modifications; and
(D) building new facilities.
(b) Report.--
(1) In general.--The Secretary shall prepare and submit,
along with the budget request of the President submitted to
Congress for fiscal year 2007, a report describing the strategy
developed under subsection (a).
(2) Contents.--For each National Laboratory and single-
purpose research facility that is primarily used for science
and energy research, the report shall contain--
(A) the current priority list of proposed
facilities and infrastructure projects, including cost
and schedule requirements;
(B) a current 10-year plan that demonstrates the
reconfiguration of its facilities and infrastructure to
meet its missions and to address its long-term
operational costs and return on investment;
(C) the total current budget for all facilities and
infrastructure funding; and
(D) the current status of each facility and
infrastructure project compared to the original
baseline cost, schedule, and scope.
SEC. 964. CATALYSIS RESEARCH PROGRAM.
(a) Establishment.--The Secretary, acting through the Office of
Science, shall support a program of research and development in
catalysis science consistent with the statutory authorities of the
Department related to research and development.
(b) Components.--The program shall include efforts to--
(1) enable catalyst design using combinations of
experimental and mechanistic methodologies coupled with
computational modeling of catalytic reactions at the molecular
level;
(2) develop techniques for high throughput synthesis,
assay, and characterization at nanometer and subnanometer
scales in situ under actual operating conditions;
(3) synthesize catalysts with specific site architectures;
(4) conduct research on the use of precious metals for
catalysis; and
(5) translate molecular understanding to the design of
catalytic compounds.
(c) Duties of the Office of Science.--In carrying out the program,
the Director of the Office of Science shall--
(1) support both individual investigators and
multidisciplinary teams of investigators to pioneer new
approaches in catalytic design;
(2) develop, plan, construct, acquire, share, or operate
special equipment or facilities for the use of investigators in
collaboration with national user facilities, such as
nanoscience and engineering centers;
(3) support technology transfer activities to benefit
industry and other users of catalysis science and engineering;
and
(4) coordinate research and development activities with
industry and other Federal agencies.
(d) Triennial Assessment.--Not later than 3 years after the date of
enactment of this Act and every 3 years thereafter, the National
Academy of Sciences shall--
(1) review the catalysis program to measure--
(A) gains made in the fundamental science of
catalysis; and
(B) progress towards developing new fuels for
energy production and material fabrication processes;
and
(2) submit to Congress a report describing the results of
the review.
SEC. 965. HYDROGEN.
(a) In General.--The Secretary shall conduct a program of
fundamental research and development in support of programs authorized
under title VIII.
(b) Methods.--The program shall include support for methods of
generating hydrogen without the use of natural gas.
SEC. 966. SOLID STATE LIGHTING.
The Secretary shall conduct a program of fundamental research on
advance solid state lighting in support of the Next Generation Lighting
Initiative carried out under section 912.
SEC. 967. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.
(a) Program.--
(1) In general.--The Secretary shall conduct an advanced
scientific computing research and development program that
includes activities related to applied mathematics and
activities authorized by the Department of Energy High-End
Computing Revitalization Act of 2004 (15 U.S.C. 5541 et seq.).
(2) Goal.--The Secretary shall carry out the program with
the goal of supporting departmental missions, and providing the
high-performance computational, networking, advanced
visualization technologies, and workforce resources, that are
required for world leadership in science.
(b) High-Performance Computing.--Section 203 of the High-
Performance Computing Act of 1991 (15 U.S.C. 5523) is amended to read
as follows:
``SEC. 203. DEPARTMENT OF ENERGY ACTIVITIES.
``(a) General Responsibilities.--As part of the Program described
in title I, the Secretary of Energy shall--
``(1) conduct and support basic and applied research in
high-performance computing and networking to support
fundamental research in science and engineering disciplines
related to energy applications; and
``(2) provide computing and networking infrastructure
support, including--
``(A) the provision of high-performance computing
systems that are among the most advanced in the world
in terms of performance in solving scientific and
engineering problems; and
``(B) support for advanced software and
applications development for science and engineering
disciplines related to energy applications.
``(b) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Energy such sums as are necessary to
carry out this section.''.
SEC. 968. GENOMES TO LIFE PROGRAM.
(a) Establishment.--The Secretary shall carry out a program of
research, development, demonstration, and commercial application, to be
known as the ``Genomes to Life Program'', in microbial and plant
systems biology, protein science, and computational biology consistent
with the statutory authorities of the Department.
(b) Planning.--
(1) In general.--The Secretary shall prepare a program plan
that describes how knowledge and capabilities would be
developed by the program and applied to missions of the
Department relating to energy security, environmental cleanup,
and national security.
(2) Consultation.--The Secretary shall prepare the program
plan in consultation with the heads of other Federal agencies
that carry out relevant technology programs.
(3) Long-term goals.--In preparing the program plan, the
Secretary shall focus on applying science and technology to
achieve the long-term goals of the program, including--
(A) contributing to the independence of the United
States from foreign energy sources, including
production of hydrogen;
(B) converting carbon dioxide to organic carbon;
(C) advancing environmental cleanup;
(D) providing the science and technology for new
biotechnology industries; and
(E) improving national security and combating
bioterrorism.
(4) Short-term goals.--In preparing the program plan, the
Secretary shall--
(A) establish specific short-term goals; and
(B) update the goals with the annual budget
submission of the Secretary.
(c) Administration.--In carrying out the program, the Secretary
shall--
(1) support individual investigators and multidisciplinary
teams of investigators;
(2) subject to subsection (d), develop, plan, construct,
acquire, or operate special equipment or facilities for the use
of investigators conducting research, development,
demonstration, or commercial application in systems biology and
proteomics;
(3) support technology transfer activities to benefit
industry and other users of systems biology and proteomics; and
(4) coordinate activities by the Department with industry
and other Federal agencies.
(d) Genomes to Life User Facilities and Ancillary Equipment.--
(1) In general.--Subject to the availability of funds to
carry out this subsection, the amounts made available under
section 961(b)(4) shall be available for--
(A) projects to develop, plan, construct, acquire,
or operate special equipment, or instrumentation; or
(B) facilities at National Laboratories for
investigators conducting research, development,
demonstration, and commercial application in systems
biology and proteomics and associated biological
disciplines.
(2) Projects.--Projects under paragraph (1)(A) may
include--
(A) the identification and characterization of
multiprotein complexes;
(B) characterization of gene regulatory networks;
(C) characterization of the functional repertoire
of complex microbial communities in their natural
environments at the molecular level; and
(D) development of computational methods and
capabilities to advance understanding of complex
biological systems and predict their behavior.
(3) Facilities.--Facilities under paragraph (1)(B) may
include facilities, equipment, or instrumentation for--
(A) the production and characterization of
proteins;
(B) whole proteome analysis;
(C) characterization and imaging of molecular
machines; and
(D) analysis and modeling of cellular systems.
(4) Facilities location and mission.--The number, location,
and mission of facilities under paragraph (1)(B) shall be
determined in a plan provided by the Secretary to Congress
before the construction of any such facility.
(5) Collaboration.--
(A) In general.--In carrying out this subsection,
the Secretary shall encourage collaborations among
institutions of higher education, National
Laboratories, and industry at facilities.
(B) Technology transfer.--All facilities under this
subsection shall promote technology transfer to other
institutions.
SEC. 969. FISSION AND FUSION ENERGY MATERIALS RESEARCH PROGRAM.
(a) In General.--Along with the budget request of the President
submitted to Congress for fiscal year 2007, the Secretary shall
establish a research and development program on material science issues
presented by advanced fission reactors and the fusion energy program of
the Department.
(b) Administration.--In carrying out the program, the Secretary
shall develop--
(1) a catalog of material properties required for
applications described in subsection (a);
(2) theoretical models for materials possessing the
required properties;
(3) benchmark models against existing data; and
(4) a roadmap to guide further research and development in
the area covered by the program.
SEC. 970. ENERGY-WATER SUPPLY TECHNOLOGIES PROGRAM.
(a) Definitions.--In this section:
(1) Foundation.--The term ``Foundation'' means the American
Water Works Association Research Foundation.
(2) Indian tribe.--The term ``Indian tribe'' has the
meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b).
(3) Program.--The term ``Program'' means the Energy-Water
Supply Technologies Program established by subsection (b).
(b) Establishment.--There is established, within the Office of
Biological and Environmental Research of the Office of Science, a
program, to be known as the ``Energy-Water Supply Technologies
Program'', to study--
(1) energy-related issues associated with water resources
and municipal waterworks; and
(2) supply issues related to energy production.
(c) Program Areas.--In carrying out the Program, the Secretary
shall conduct research and development, including research and
development relating to--
(1) the arsenic removal program under subsection (d);
(2) the desalination research program under subsection (e);
(3) the water and energy sustainability program under
subsection (f); and
(4) other energy-intensive water supply and treatment
technologies and other technologies selected by the Secretary.
(d) Arsenic Removal Program.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall enter into a
contract with the Foundation to use the facilities,
institutions, and relationships described in the matter under
the heading ``biological and environmental research'' of title
III of Senate Report 107-220 to accompany the Consolidated
Appropriations Resolution, 2003 (Public Law 108-7) to carry out
a research program to develop and demonstrate innovative
arsenic removal technologies.
(2) Research.--In carrying out the arsenic removal program,
the Foundation shall, to the maximum extent practicable,
conduct research on means of--
(A) reducing energy costs incurred in using arsenic
removal technologies;
(B) minimizing materials, operating, and
maintenance costs incurred in using arsenic removal
technologies; and
(C) minimizing any quantities of waste (especially
hazardous waste) that result from use of arsenic
removal technologies.
(3) Demonstration projects.--The Foundation shall carry out
peer-reviewed research and demonstration projects to develop
and demonstrate water purification technologies.
(4) Administration.--Under the arsenic removal program--
(A) demonstration projects shall be implemented
with municipal water system partners to demonstrate the
applicability of innovative arsenic removal
technologies in areas with different water chemistries
representative of areas across the United States with
arsenic levels near or exceeding the guidelines of the
Environmental Protection Agency; and
(B) not less than 40 percent of the funds of the
Department used for demonstration projects under the
arsenic removal program shall be expended on projects
focused on the needs of and in partnership with rural
communities or Indian tribes.
(5) Evaluations; technology transfer.--The Foundation shall
develop evaluations of cost effectiveness of arsenic removal
technologies used in the program and an education, training,
and technology transfer component for the program.
(6) Coordination.--The Secretary shall consult with the
Administrator of the Environmental Protection Agency to ensure
that activities under the arsenic removal program are
coordinated with appropriate programs of the Environmental
Protection Agency and other Federal agencies, State programs,
and academia.
(7) Reports.--Not later than 1 year after the date of
commencement of the arsenic removal program and annually
thereafter, the Secretary shall submit to Congress a report on
the results of the arsenic removal program.
(e) Desalination Program.--
(1) In general.--The Secretary, in cooperation with the
Commissioner of Reclamation, shall carry out a desalination
research program in accordance with the desalination technology
progress plan developed under the matter under the heading
``water and related resources'' under the heading ``Bureau of
Reclamation'' of title II of the Energy and Water Development
Appropriations Act, 2002 (115 Stat. 498) and described in
Senate Report 107-39 to accompany S. 1171 (107th Congress).
(2) Administration.--The desalination program shall--
(A) draw on the national laboratory partnership
established with the Bureau of Reclamation to develop
the national Desalination and Water Purification
Technology Roadmap for next-generation desalination
technology released in January 2003;
(B) focus on research relating to, and development
and demonstration of, technologies that are appropriate
for use in desalinating brackish groundwater,
wastewater, and other saline water supplies and
disposal of residual brine or salt; and
(C) consider the use of renewable energy sources.
(3) Construction projects.--Under the desalination program,
funds made available for the program may be used for
construction projects, including completion of the National
Desalination Research Center for brackish groundwater and
ongoing facility operational costs.
(4) Steering committee.--
(A) Establishment.--The Secretary and the
Commissioner of Reclamation shall jointly establish a
steering committee for the desalination program.
(B) Chair.--The steering committee shall be jointly
chaired by--
(i) 1 representative from the Program; and
(ii) 1 representative from the Bureau of
Reclamation.
(f) Water and Energy Sustainability Program.--
(1) In general.--The Secretary shall carry out a research
program to develop technologies to assist in ensuring that
sufficient quantities of water are available to meet present
and future requirements.
(2) Assessments.--Under the program and in collaboration
with other programs within the Department (including programs
within the Offices of Fossil Energy and Energy Efficiency and
Renewable Energy), the Secretary of the Interior, the Corps of
Engineers, the Environmental Protection Agency, the Department
of Commerce, the Department of Defense, State agencies,
nongovernmental agencies, and academia, the Secretary shall
assess the current state of knowledge and program activities
concerning--
(A) future water resources needed to support energy
production within the United States, including the
water needs for hydropower and thermo-electric power
generation;
(B) future energy resources needed to support
development of water purification and treatment,
including desalination and long-distance water
conveyance;
(C) reuse and treatment of water produced as a
byproduct of oil and gas extraction;
(D) use of impaired and nontraditional water
supplies for energy production and other uses; and
(E) technologies to reduce water use in energy
production.
(3) Tools.--In addition to the assessments conducted under
paragraph (2), the Secretary shall--
(A) develop a research plan that defines the
scientific and technology development needs and
activities required to support--
(i) long-term water needs and planning for
energy sustainability;
(ii) use of impaired water for energy
production and other uses; and
(iii) reduction of water use in energy
production;
(B) carry out the research plan required under
subparagraph (A), including development of numerical
models, decision analysis tools, economic analysis
tools, databases, planning methodologies, and
strategies;
(C) implement at least 3 planning demonstration
projects using the models, tools, and planning
approaches developed under subparagraph (B) and assess
the viability of those tools on the scale of river
basins with at least 1 demonstration involving an
international border; and
(D) transfer those tools to other Federal agencies,
State agencies, nonprofit organizations, industry, and
academia for use in their energy and water
sustainability efforts.
(4) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the water and energy sustainability program that--
(A) describes the research elements described under
paragraph (2); and
(B) makes recommendations for a management
structure that optimizes use of Federal resources and
programs.
(g) Cost Sharing.--
(1) Research projects.--A research project under this
section shall not require cost-sharing.
(2) Demonstration projects.--Each demonstration project
carried out under the Program shall be carried out in
accordance with the cost-sharing requirements of section 1002.
SEC. 971. SPALLATION NEUTRON SOURCE.
(a) Definitions.--In this section:
(1) SING.--The term ``SING'' means the Spallation Neutron
Source Instruments Next Generation major item of equipment.
(2) SNS power upgrade.--The term ``SNS power upgrade''
means the Spallation Neutron Source power upgrade described in
the 20-year facilities plan of the Office of Science of the
Department.
(3) SNS second target station.--The term ``SNS second
target station'' the Spallation Neutron Source second target
station described in the 20-year facilities plan of the Office
of Science of the Department.
(4) Spallation neutron source facility.--The terms
``Spallation Neutron Source Facility'' and ``Facility'' mean
the completed Spallation Neutron Source scientific user
facility located at Oak Ridge National Laboratory, Oak Ridge,
Tennessee.
(5) Spallation neutron source project.--The terms
``Spallation Neutron Source Project'' and ``Project'' means
Department Project 99-E-334, Oak Ridge National Laboratory, Oak
Ridge, Tennessee.
(b) Spallation Neutron Source Project.--
(1) In general.--The Secretary shall submit to Congress, as
part of the annual budget request of the President submitted to
Congress, a report on progress on the Spallation Neutron Source
Project.
(2) Contents.--The report shall include for the Project--
(A) a description of the achievement of milestones;
(B) a comparison of actual costs to estimated
costs; and
(C) any changes in estimated Project costs or
schedule.
(c) Spallation Neutron Source Facility Plan.--
(1) In general.--The Secretary shall develop an operational
plan for the Spallation Neutron Source Facility that ensures
that the Facility is employed to the full capability of the
Facility in support of the study of advanced materials,
nanoscience, and other missions of the Office of Science of the
Department.
(2) Plan.--The operational plan shall--
(A) include a plan for the operation of an
effective scientific user program that--
(i) is based on peer review of proposals
submitted for use of the Facility;
(ii) includes scientific and technical
support to ensure that external users,
including researchers based at institutions of
higher education, are able to make full use of
a variety of high quality scientific
instruments; and
(iii) phases in systems upgrades to ensure
that the Facility remains at the forefront of
international scientific endeavors in the field
of the Facility throughout the operating life
of the Facility;
(B) include an ongoing program to develop new
instruments that builds on the high performance neutron
source and that allows neutron scattering techniques to
be applied to a growing range of scientific problems
and disciplines; and
(C) address the status of and, to the maximum
extent practicable, costs and schedules for--
(i) full user mode operations of the
Facility;
(ii) instrumentation built at the Facility
during the operating phase through full use of
the experimental hall, including the SING;
(iii) the SNS power upgrade; and
(iv) the SNS second target station.
(d) Authorization of Appropriations.--
(1) Spallation neutron source project.--There is authorized
to be appropriated to carry out the Spallation Neutron Source
Project for the lifetime of the Project $1,411,700,000 for
total project costs, of which--
(A) $1,192,700,000 shall be used for the costs of
construction; and
(B) $219,000,000 shall be used for other Project
costs.
(2) Spallation neutron source facility.--
(A) In general.--Except as provided in subparagraph
(B), there is authorized to be appropriated for the
Spallation Neutron Source Facility for--
(i) the SING, $75,000,000 for fiscal year
2006; and
(ii) the SNS power upgrade, $160,000,000
for each of fiscal years 2007 and 2008.
(B) Insufficient stockpiles of heavy water.--If
stockpiles of heavy water of the Department are
insufficient to meet the needs of the Facility, there
is authorized to be appropriated for the Facility
$172,000,000 for fiscal year 2007.
Subtitle G--International Cooperation
SEC. 981. WESTERN HEMISPHERE ENERGY COOPERATION.
(a) Program.--The Secretary shall carry out a program to promote
cooperation on energy issues with countries of the Western Hemisphere.
(b) Activities.--Under the program, the Secretary shall fund
activities to work with countries of the Western Hemisphere to--
(1) increase the production of energy supplies;
(2) improve energy efficiency; and
(3) assist in the development and transfer of energy supply
and efficiency technologies that would have a beneficial impact
on world energy markets.
(c) Participation by Institutions of Higher Education.--To the
extent practicable, the Secretary shall carry out the program under
this section with the participation of institutions of higher education
so as to take advantage of the acceptance of institutions of higher
education by countries of the Western Hemisphere as sources of unbiased
technical and policy expertise when assisting the Secretary in--
(1) evaluating new technologies;
(2) resolving technical issues;
(3) working with those countries in the development of new
policies; and
(4) training policymakers, particularly in the case of
institutions of higher education that involve the participation
of minority students, such as--
(A) Hispanic-serving institutions; and
(B) part B institutions.
(d) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section--
(1) $10,000,000 for fiscal year 2006;
(2) $13,000,000 for fiscal year 2007; and
(3) $16,000,000 for fiscal year 2008.
SEC. 982. COOPERATION BETWEEN UNITED STATES AND ISRAEL.
(a) Findings.--Congress finds that--
(1) on February 1, 1996, the United States and Israel
signed the agreement entitled ``Agreement between the
Department of Energy of the United States of America and the
Ministry of Energy and Infrastructure of Israel Concerning
Energy Cooperation'', (referred to in this section as the
``Agreement'') to establish a framework for collaboration
between the United States and Israel in energy research and
development activities;
(2) the Agreement entered into force in February 2000;
(3) in February 2005, the Agreement was automatically
renewed for 1 additional 5-year period pursuant to Article X of
the Agreement; and
(4) under the Agreement, the United States and Israel may
cooperate in energy research and development in a variety of
alternative and advanced energy sectors.
(b) Report to Congress.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall submit to the Committee on
Energy and Natural Resources and the Committee on Foreign Relations of
the Senate and the Committee on Energy and Commerce and the Committee
on International Relations of the House of Representatives a report
that describes--
(1) the ways in which the United States and Israel have
cooperated on energy research and development activities under
the Agreement;
(2) projects initiated pursuant to the Agreement; and
(3) plans for future cooperation and joint projects under
the Agreement.
(c) Sense of Congress.--It is the sense of Congress that energy
cooperation between the Governments of the United States and Israel is
mutually beneficial in the development of energy technology.
TITLE X--DEPARTMENT OF ENERGY MANAGEMENT
SEC. 1001. AVAILABILITY OF FUNDS.
Funds authorized to be appropriated to the Department under this
Act or an amendment made by this Act shall remain available until
expended.
SEC. 1002. COST SHARING.
(a) Applicability.--Notwithstanding any other provision of law, in
carrying out a research, development, demonstration, or commercial
application activity that is initiated after the date of enactment of
this section, the Secretary shall require cost-sharing in accordance
with this section.
(b) Research and Development.--
(1) In general.--Except as provided in paragraphs (2) and
(3) and subsection (f), the Secretary shall require not less
than 20 percent of the cost of a research or development
activity described in subsection (a) to be provided by a non-
Federal source.
(2) Exclusion.--Paragraph (1) shall not apply to a research
or development activity described in subsection (a) that is of
a basic or fundamental nature, as determined by the appropriate
officer of the Department.
(3) Reduction.--The Secretary may reduce or eliminate the
requirement of paragraph (1) for a research and development
activity of an applied nature if the Secretary determines that
the reduction is necessary and appropriate.
(c) Demonstration and Commercial Application.--
(1) In general.--Except as provided in paragraph (2) and
subsection (f), the Secretary shall require that not less than
50 percent of the cost of a demonstration or commercial
application activity described in subsection (a) to be provided
by a non-Federal source.
(2) Reduction of non-federal share.--The Secretary may
reduce the non-Federal share required under paragraph (1) if
the Secretary determines the reduction to be necessary and
appropriate, taking into consideration any technological risk
relating to the activity.
(d) Calculation of Amount.--In calculating the amount of a non-
Federal contribution under this section, the Secretary--
(1) may include allowable costs in accordance with the
applicable cost principles, including--
(A) cash;
(B) personnel costs;
(C) the value of a service, other resource, or
third party in-kind contribution determined in
accordance with the applicable circular of the Office
of Management and Budget;
(D) indirect costs or facilities and administrative
costs; or
(E) any funds received under the power program of
the Tennessee Valley Authority (except to the extent
that such funds are made available under an annual
appropriation Acts); and
(2) shall not include--
(A) revenues or royalties from the prospective
operation of an activity beyond the time considered in
the award;
(B) proceeds from the prospective sale of an asset
of an activity; or
(C) other appropriated Federal funds.
(e) Repayment of Federal Share.--The Secretary shall not require
repayment of the Federal share of a cost-shared activity under this
section as a condition of making an award.
(f) Exclusions.--This section shall not apply to--
(1) a cooperative research and development agreement under
the Stevenson-Wydler Technology Innovation Act of 1990 (15
U.S.C. 3701 et seq.);
(2) a fee charged for the use of a Department facility; or
(3) an award under--
(A) the small business innovation research program
under section 9 of the Small Business Act (15 U.S.C.
638); or
(B) the small business technology transfer program
under that section.
SEC. 1003. MERIT REVIEW OF PROPOSALS.
Awards of funds authorized under this Act or an amendment made by
this Act shall be made only after an impartial review of the scientific
and technical merit of the proposals for the awards has been carried
out by or for the Department.
SEC. 1004. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL PROGRAMS.
(a) National Energy Research and Development Advisory Boards.--
(1) Establishment.--The Secretary shall establish 1 or more
advisory boards to review research, development, demonstration,
and commercial application programs of the Department in energy
efficiency, renewable energy, nuclear energy, and fossil
energy.
(2) Alternatives.--The Secretary may--
(A) designate an existing advisory board within the
Department to fulfill the responsibilities of an
advisory board under this section; and
(B) enter into appropriate arrangements with the
National Academy of Sciences to establish such an
advisory board.
(b) Use of Existing Committees.--The Secretary shall continue to
use the scientific program advisory committees chartered under the
Federal Advisory Committee Act (5 U.S.C. App.) by the Office of Science
to oversee research and development programs under that Office.
(c) Membership.--Each advisory board under this section shall
consist of persons with appropriate expertise representing a diverse
range of interests.
(d) Meetings and Goals.--
(1) Meetings.--Each advisory board under this section shall
meet at least semiannually to review and advise on the progress
made by the respective 1 or more research, development,
demonstration, and commercial application programs.
(2) Goals.--The advisory board shall review the measurable
cost and performance-based goals for the programs as
established under section 902, and the progress on meeting the
goals.
(e) Periodic Reviews and Assessments.--
(1) In general.--The Secretary shall enter into appropriate
arrangements with the National Academy of Sciences to conduct
periodic reviews and assessments of--
(A) the programs authorized by this Act and
amendments made by this Act;
(B) the measurable cost and performance-based goals
for the programs as established under section 902, if
any; and
(C) the progress on meeting the goals.
(2) Timing.--The reviews and assessments shall be conducted
every 5 years or more often as the Secretary considers
necessary.
(3) Reports.--The Secretary shall submit to Congress
reports describing the results of all the reviews and
assessments.
SEC. 1005. IMPROVED TECHNOLOGY TRANSFER OF ENERGY TECHNOLOGIES.
(a) Technology Transfer Coordinator.--The Secretary shall appoint a
Technology Transfer Coordinator to be the principal advisor to the
Secretary on all matters relating to technology transfer and
commercialization.
(b) Qualifications.--The Coordinator shall be an individual who, by
reason of professional background and experience, is specially
qualified to advise the Secretary on matters pertaining to technology
transfer at the Department.
(c) Duties of the Coordinator.--The Coordinator shall oversee--
(1) the activities of the Technology Transfer Working Group
established under subsection (d);
(2) the expenditure of funds allocated for technology
transfer within the Department;
(3) the activities of each technology partnership ombudsman
appointed under section 11 of the Technology Transfer
Commercialization Act of 2000 (42 U.S.C. 7261c); and
(4) efforts to engage private sector entities, including
venture capital companies.
(d) Technology Transfer Working Group.--The Secretary shall
establish a Technology Transfer Working Group, which shall consist of
representatives of the National Laboratories and single-purpose
research facilities, to--
(1) coordinate technology transfer activities occurring at
National Laboratories and single-purpose research facilities;
(2) exchange information about technology transfer
practices, including alternative approaches to resolution of
disputes involving intellectual property rights and other
technology transfer matters; and
(3) develop and disseminate to the public and prospective
technology partners information about opportunities and
procedures for technology transfer with the Department,
including opportunities and procedures related to alternative
approaches to resolution of disputes involving intellectual
property rights and other technology transfer matters.
(e) Technology Commercialization Fund.--The Secretary shall
establish an Energy Technology Commercialization Fund, using 0.5
percent of the amount made available to the Department for each fiscal
year, to be used to provide matching funds with private partners to
promote promising technologies for commercial purposes.
(f) Technology Transfer Responsibility.--Nothing in this section
affects the technology transfer responsibilities of Federal employees
under the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3701 et seq.).
(g) Planning and Reporting.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall submit to Congress a
technology transfer execution plan.
(2) Updates.--Each year after the submission of the plan
under paragraph (1), the Secretary shall submit to Congress an
updated execution plan and reports that describe progress
toward meeting goals set forth in the execution plan and the
funds expended under subsection (e).
SEC. 1006. TECHNOLOGY INFRASTRUCTURE PROGRAM.
(a) Definitions.--In this section:
(1) Program.--The term ``Program'' means the Technology
Infrastructure Program established under subsection (b).
(2) Technology cluster.--The term ``technology cluster''
means a concentration of technology-related business concerns,
institutions of higher education, or nonprofit institutions,
that reinforce each other's performance in the areas of
technology development through formal or informal
relationships.
(3) Technology-related business concern.--The term
``technology-related business concern'' means a for-profit
corporation, company, association, firm, partnership, or small
business concern that--
(A) conducts scientific or engineering research;
(B) develops new technologies;
(C) manufactures products based on new
technologies; or
(D) performs technological services.
(b) Establishment.--The Secretary shall establish a Technology
Infrastructure Program in accordance with this section.
(c) Purpose.--The purpose of the Program shall be to improve the
ability of National Laboratories and single-purpose research facilities
to support departmental missions by--
(1) stimulating the development of technology clusters that
can support departmental missions at the National Laboratories
or single-purpose research facilities;
(2) improving the ability of National Laboratories and
single-purpose research facilities to leverage and benefit from
commercial research, technology, products, processes, and
services; and
(3) encouraging the exchange of scientific and
technological expertise between--
(A) National Laboratories or single-purpose
research facilities; and
(B) entities that can support departmental missions
at the National Laboratories or single-purpose research
facilities, such as--
(i) institutions of higher education;
(ii) technology-related business concerns;
(iii) nonprofit institutions; and
(iv) agencies of State, tribal, or local
governments.
(d) Projects.--The Secretary shall authorize the director of each
National Laboratory or single-purpose research facility to implement
the Program at the National Laboratory or facility through 1 or more
projects that meet the requirements of subsections (e) and (f).
(e) Program Requirements.--
(1) In general.--Each project funded under this section
shall meet the requirements of this subsection.
(2) Entities.--Each project shall include at least 1 of
each of the following entities:
(A) A business.
(B) An institution of higher education.
(C) A nonprofit institution.
(D) An agency of a State, local, or tribal
government.
(3) Cost-sharing.--
(A) In general.--The costs of carrying out projects
under this section shall be shared in accordance with
section 1002.
(B) Sources.--The calculation of costs paid by the
non-Federal sources for a project shall include cash,
personnel, services, equipment, and other resources
expended on the project after the commencement of the
project.
(C) Research and development expenses.--Independent
research and development expenses of Government
contractors that qualify for reimbursement under
section 31.205-18(e) of title 48, Code of Federal
Regulations, issued pursuant to section 25(c)(1) of the
Office of Federal Procurement Policy Act (41 U.S.C.
421(c)(1)), may be credited towards costs paid by non-
Federal sources to a project, if the expenses meet the
other requirements of this section.
(4) Competitive selection.--A project under this section
shall be competitively selected using procedures determined by
the Secretary.
(5) Accounting.--Any participant that receives funds under
this section may use generally accepted accounting principles
for maintaining accounts, books, and records relating to the
project.
(6) Duration.--No Federal funds shall be made available
under this section for a construction project or for any
project with a duration of more than 5 years.
(f) Selection Criteria.--
(1) Departmental missions.--The Secretary shall allocate
funds under this section only if the Director of the National
Laboratory or single-purpose research facility managing the
project determines that the project is likely to improve the
ability of the National Laboratory or single-purpose research
facility to achieve technical success in meeting departmental
missions.
(2) Other criteria.--In selecting a project to receive
Federal funds, the Secretary shall consider--
(A) the potential of the project to promote the
development of a commercially sustainable technology
cluster following the period of investment by the
Department, which will derive most of the demand for
its products or services from the private sector, and
which will support departmental missions at the
participating National Laboratory or single-purpose
research facility;
(B) the potential of the project to promote the use
of commercial research, technology, products,
processes, and services by the participating National
Laboratory or single-purpose research facility to
achieve its mission or the commercial development of
technological innovations made at the participating
National Laboratory or single-purpose research
facility;
(C) the extent to which the project involves a wide
variety and number of institutions of higher education,
nonprofit institutions, and technology-related business
concerns that can support the missions of the
participating National Laboratory or single-purpose
research facility and that will make substantive
contributions to achieving the goals of the project;
(D) the extent to which the project focuses on
promoting the development of technology-related
business concerns that are small businesses or involves
such small businesses substantively in the project; and
(E) such other criteria as the Secretary determines
to be appropriate.
(g) Allocation.--In allocating funds for projects approved under
this section, the Secretary shall provide--
(1) the Federal share of the project costs; and
(2) additional funds to the National Laboratory or single-
purpose research facility managing the project to permit the
National Laboratory or single-purpose research facility to
carry out activities relating to the project, and to coordinate
the activities with the project.
(h) Report to Congress.--Not later than July 1, 2008, the Secretary
shall submit to Congress a report on whether the Program should be
continued and, if so, how the program should be managed.
(i) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary for activities under this section
$10,000,000 for each of fiscal years 2006 through 2008.
SEC. 1007. SMALL BUSINESS ADVOCACY AND ASSISTANCE.
(a) Small Business Advocate.--The Secretary shall require the
Director of each National Laboratory, and may require the Director of a
single-purpose research facility, to designate a small business
advocate to--
(1) increase the participation of small business concerns,
including socially and economically disadvantaged small
business concerns (as defined in section 8(a)(4) of the Small
Business Act (15 U.S.C. 637(a)(4))), in procurement,
collaborative research, technology licensing, and technology
transfer activities conducted by the National Laboratory or
single-purpose research facility;
(2) report to the Director of the National Laboratory or
single-purpose research facility on the actual participation of
small business concerns in procurement and collaborative
research along with recommendations, if appropriate, on how to
improve participation;
(3) make available to small business concerns training,
mentoring, and information on how to participate in procurement
and collaborative research activities;
(4) increase the awareness inside the National Laboratory
or single-purpose research facility of the capabilities and
opportunities presented by small business concerns; and
(5) establish guidelines for the program under subsection
(b) and report on the effectiveness of the program to the
Director of the National Laboratory or single-purpose research
facility.
(b) Establishment of Small Business Assistance Program.--The
Secretary shall require the Director of each National Laboratory, and
may require the Director of a single-purpose research facility, to
establish a program to provide small business concerns with--
(1) assistance directed at making the small business
concerns more effective and efficient subcontractors or
suppliers to the National Laboratory or single-purpose research
facilities; or
(2) general technical assistance, the cost of which shall
not exceed $10,000 per instance of assistance, to improve the
products or services of the small business concern.
(c) Use of Funds.--None of the funds expended under subsection (b)
may be used for direct grants to small business concerns.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary for activities under this section
$5,000,000 for each of fiscal years 2006 through 2008.
SEC. 1008. OUTREACH.
The Secretary shall ensure that each program authorized by this Act
or an amendment made by this Act includes an outreach component to
provide information, as appropriate, to manufacturers, consumers,
engineers, architects, builders, energy service companies, institutions
of higher education, facility planners and managers, State and local
governments, and other entities.
SEC. 1009. RELATIONSHIP TO OTHER LAWS.
Except as otherwise provided in this Act or an amendment made by
this Act, the Secretary shall carry out the research, development,
demonstration, and commercial application programs, projects, and
activities authorized by this Act or an amendment made by this Act in
accordance with the applicable provisions of--
(1) the Atomic Energy Act of 1954 (42 U.S.C. 2011 et seq.);
(2) the Federal Nonnuclear Energy Research and Development
Act of 1974 (42 U.S.C. 5901 et seq.);
(3) the Energy Policy Act of 1992 (42 U.S.C. 13201 et
seq.);
(4) the Stevenson-Wydler Technology Innovation Act of 1980
(15 U.S.C. 3701 et seq.);
(5) chapter 18 of title 35, United States Code (commonly
known as the ``Bayh-Dole Act''); and
(6) any other Act under which the Secretary is authorized
to carry out the programs, projects, and activities.
SEC. 1010. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN SCIENCE AND
TECHNOLOGY PROGRAMS.
(a) Effective Top-Level Coordination of Research and Development
Programs.--Section 202 of the Department of Energy Organization Act (42
U.S.C. 7132) is amended by striking subsection (b) and inserting the
following:
``(b)(1) There shall be in the Department an Under Secretary for
Energy and Science, who shall be appointed by the President, by and
with the advice and consent of the Senate.
``(2) The Under Secretary shall be compensated at the rate provided
for level III of the Executive Schedule under section 5314 of title 5,
United States Code.
``(3) The Under Secretary for Energy and Science shall be appointed
from among persons who--
``(A) have extensive background in scientific or
engineering fields; and
``(B) are well qualified to manage the civilian research
and development programs of the Department.
``(4) The Under Secretary for Energy and Science shall--
``(A) serve as the Science and Technology Advisor to the
Secretary;
``(B) monitor the research and development programs of the
Department in order to advise the Secretary with respect to any
undesirable duplication or gaps in the programs;
``(C) advise the Secretary with respect to the well-being
and management of the multipurpose laboratories under the
jurisdiction of the Department;
``(D) advise the Secretary with respect to education and
training activities required for effective short- and long-term
basic and applied research activities of the Department;
``(E) advise the Secretary with respect to grants and other
forms of financial assistance required for effective short- and
long-term basic and applied research activities of the
Department;
``(F) bear primary responsibility for energy conservation;
and
``(G) exercise authority and responsibility over Assistant
Secretaries carrying out energy research and development and
energy technology functions under sections 203 and 209, as well
as other elements of the Department assigned by the
Secretary.''.
(b) Reconfiguration of Position of Director of the Office of
Science.--
(1) In general.--Section 209 of the Department of Energy
Organization Act (41 U.S.C. 7139) is amended to read as
follows:
``office of science
``Sec. 209. (a) There shall be within the Department an Office of
Science, to be headed by an Assistant Secretary for Science, who shall
be appointed by the President, by and with the advice and consent of
the Senate, and who shall be compensated at the rate provided for level
IV of the Executive Schedule under section 5315 of title 5, United
States Code.
``(b) The Assistant Secretary for Science shall be in addition to
the Assistant Secretaries provided for under section 203.
``(c) It shall be the duty and responsibility of the Assistant
Secretary for Science to carry out the fundamental science and
engineering research functions of the Department, including the
responsibility for policy and management of the research, as well as
other functions vested in the Secretary that the Secretary may assign
to the Assistant Secretary.''.
(2) Director of the office of science.--
(A) In general.--Notwithstanding section 3345(b)(1)
of title 5, United States Code, the President may
designate the Director of the Office of Science who
served immediately before the date of enactment of this
Act to act in the office of the Assistant Secretary of
Energy for Science until the office is filled as
provided in section 209 of the Department of Energy
Organization Act (as amended by paragraph (1)).
(B) Compensation.--While so acting, the person
shall receive compensation at the rate provided by
section 209(a) of that Act (as amended by paragraph
(1)) for the office of Assistant Secretary for Science.
(c) Additional Assistant Secretary Position To Enable Improved
Management of Nuclear Energy Issues.--
(1) In general.--Section 203(a) of the Department of Energy
Organization Act (42 U.S.C. 7133(a)) is amended in the first
sentence by striking ``There shall be in the Department six
Assistant Secretaries'' and inserting ``Except as provided in
section 209, there shall be in the Department 7 Assistant
Secretaries''.
(2) Assistant secretary level.--It is the sense of Congress
that the leadership for departmental missions in nuclear energy
should be at the Assistant Secretary level.
(d) Technical and Conforming Amendments.--
(1) Section 202 of the Department of Energy Organization
Act (42 U.S.C. 7132) (as amended by subsection (b)(1)) is
amended by adding at the end the following:
``(d)(1) There shall be in the Department an Under Secretary, who
shall be appointed by the President, by and with the advice and consent
of the Senate, and who shall perform such functions and duties as the
Secretary shall prescribe, consistent with this section.
``(2) The Under Secretary shall be compensated at the rate provided
for level III of the Executive Schedule under section 5314 of title 5,
United States Code.
``(e)(1) There shall be in the Department a General Counsel, who
shall be appointed by the President, by and with the advice and consent
of the Senate, and who shall perform such functions and duties as the
Secretary shall prescribe.
``(2) The General Counsel shall be compensated at the rate provided
for level IV of the Executive Schedule under section 5315 of title 5,
United States Code.''.
(2) Section 5314 of title 5, United States Code, is amended
by striking ``Under Secretaries of Energy (2)'' and inserting
``Under Secretaries of Energy (3)''.
(3) Section 5315 of title 5, United States Code, is
amended--
(A) by striking ``Assistant Secretaries of Energy
(6)'' and inserting ``Assistant Secretaries of Energy
(8)''; and
(B) by striking ``Director, Office of Science,
Department of Energy.''.
SEC. 1011. OTHER TRANSACTIONS AUTHORITY.
Section 646 of the Department of Energy Organization Act (42 U.S.C.
7256) is amended by adding at the end the following:
``(g)(1) In addition to other authorities granted to the Secretary
under any other provision of law, the Secretary may enter into other
transactions on such terms as the Secretary may consider appropriate in
furtherance of research, development, or demonstration functions vested
in the Secretary.
``(2) The other transactions shall not be subject to section 9 of
the Federal Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5908).
``(3)(A) The Secretary shall ensure that--
``(i) to the maximum extent the Secretary determines
practicable, no transaction entered into under paragraph (1)
provides for research, development, or demonstration that
duplicates research, development, or demonstration being
conducted under existing projects carried out by the
Department;
``(ii) to the extent the Secretary determines practicable,
the funds provided by the Federal Government under a
transaction authorized by paragraph (1) do not exceed the total
amount provided by other parties to the transaction; and
``(iii) to the extent the Secretary determines practicable,
competitive, merit-based selection procedures shall be used
when entering into transactions under paragraph (1).
``(B) A transaction authorized by paragraph (1) may be used for a
research, development, or demonstration project only if the Secretary
determines the use of a standard contract, grant, or cooperative
agreement for the project is not feasible or appropriate.
``(4)(A) The Secretary shall protect from disclosure (including
disclosure under section 552 of title 5, United States Code) for up to
5 years after the date the information is received by the Secretary--
``(i) a proposal, proposal abstract, and supporting
documents submitted to the Department in a competitive or
noncompetitive process having the potential for resulting in an
award to the party submitting the information entering into a
transaction under paragraph (1); and
``(ii) a business plan and technical information relating
to a transaction authorized by paragraph (1) submitted to the
Department as confidential business information.
``(B) The Secretary may protect from disclosure, for up to 5 years
after the information was developed, any information developed pursuant
to a transaction under paragraph (1) which developed information is of
a character that it would be protected from disclosure under section
552(b)(4) of title 5, United States Code, if obtained from a person
other than a Federal agency.
``(5)(A) Not later than 90 days after the date of enactment of this
subsection, the Secretary shall prescribe guidelines for using other
transactions authorized by paragraph (1).
``(B) The guidelines shall be published in the Federal Register for
public comment under rulemaking procedures of the Department.
``(6) The authority of the Secretary under this subsection may be
delegated only to an officer of the Department who is appointed by the
President by and with the advice and consent of the Senate and may not
be delegated to any other person.''.
SEC. 1012. PRIZES FOR ACHIEVEMENT IN GRAND CHALLENGES OF SCIENCE AND
TECHNOLOGY.
(a) Authority.--The Secretary may carry out a program to award cash
prizes in recognition of breakthrough achievements in research,
development, demonstration, and commercial application that have the
potential for application to the performance of the mission of the
Department.
(b) Competition Requirements.--The program under subsection (a) may
include prizes for the achievement of goals articulated by the
Secretary in a specific area through a widely advertised solicitation
of submission of results for research, development, demonstration, or
commercial application projects.
(c) Relationship to Other Authority.--The program under subsection
(a) may be carried out in conjunction with or in addition to the
exercise of any other authority of the Secretary to acquire, support,
or stimulate research, development, demonstration, or commercial
application projects.
SEC. 1013. TECHNICAL CORRECTIONS.
(a) Coal Research and Development.--
(1) In general.--Public Law 86-599 (30 U.S.C. 661 et seq.)
is amended--
(A) by striking the first section (30 U.S.C. 661)
and inserting the following:
``Section 1. (a) This Act may be cited as the `Coal Research and
Development Act of 1960'.
``(b) In this Act:
``(1) The term `research' means scientific, technical, and
economic research and the practical application of that
research.
``(2) The term `Secretary' means the Secretary of
Energy.'';
(B) in section 2 (30 U.S.C. 662), by striking
``shall establish within'' and all that follows through
``such Office'';
(C) by striking sections 3, 4, and 7 (30 U.S.C.
663, 664, 667); and
(D) by redesignating sections 5, 6, and 8 (30
U.S.C. 665, 666, 668) as sections 3, 4, and 5,
respectively.
(2) Patents.--Section 210(a)(8) of title 35, United States
Code, is amended by striking ``Coal Research Development Act of
1960'' and inserting ``Coal Research and Development Act of
1960''.
(b) Nonnuclear Energy Research and Development.--
(1) Short title; definitions.--Section 1 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5902) is amended to read as follows:
``short title and definitions
``Section 1. (a) This Act may be cited as the `Federal Nonnuclear
Energy Research and Development Act of 1974''.
``(b) In this Act:
``(1) The term `Department' means the Department of Energy.
``(2) The term `Secretary' means the Secretary of
Energy.''.
(2) Statement of policy.--Section 3(b) of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5902(b)) is amended--
(A) in paragraph (1), by striking ``Energy Research
and Development Administration'' and inserting
``Department'';
(B) in paragraph (2), by striking ``Administrator
of the Energy Research and Development Administration
(hereinafter in this Act referred to as the
`Administrator')'' and inserting ``Secretary''; and
(C) in paragraph (3)--
(i) by striking ``Administrator'' and
inserting ``Secretary''; and
(ii) by inserting ``Demonstration'' after
``Cooling''.
(3) Duties and authorities.--Section 4 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5903) is amended--
(A) by striking the section heading and inserting
the following:
``duties and authorities of the secretary'';
and
(B) in the matter preceding subsection (a), by
striking ``Administrator'' and inserting ``Secretary''.
(4) Comprehensive planning and programming.--Section 6 of
the Federal Nonnuclear Energy Research and Development Act of
1974 (42 U.S.C. 5905) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(B) in subsection (b)(3)--
(i) in subparagraph (I), by inserting
``Demonstration'' after ``Cooling''; and
(ii) in subparagraph (L), by inserting
``Energy'' after ``Solar''.
(5) Forms of federal assistance.--Section 7 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5906) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(B) in subsection (a)(4), by striking ``of the
section''.
(6) Demonstrations.--Section 8 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5907) is
amended--
(A) in subsections (a) through (c), by striking
``Administrator'' each place it appears and inserting
``Secretary'';
(B) in subsection (d)--
(i) in the first sentence of paragraph (1),
by inserting ``of the Energy Research and
Development Administration'' after
``Administrator''; and
(ii) in paragraph (3), by striking
``Administrator'' and inserting ``Secretary'';
and
(C) in subsection (f)--
(i) by striking ``Administrator'' each
place it appears and inserting ``Secretary'';
and
(ii) in the proviso of the first sentence,
by striking ``Administrator's'' and inserting
``Secretary's''.
(7) Patent policy.--Section 9 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5908) is
amended--
(A) by striking ``Administration'' each place it
appears and inserting ``Department'';
(B) by striking ``Administrator'' each place it
appears and inserting ``Secretary''; and
(C) in subsection (c)(3), by striking
``Administration's'' and inserting ``Department's''.
(8) Acquisition of essential materials.--Section 12 of the
Federal Nonnuclear Energy Research and Development Act of 1974
(42 U.S.C. 5911) is amended by striking subsection (b) and
inserting the following:
``(b) A rule or order under subsection (a) shall be considered to
be a major rule subject to chapter 8 of title 5, United States Code.''.
(9) Water resource evaluation.--Section 13 of the Federal
Nonnuclear Energy Research and Development Act of 1974 (42
U.S.C. 5912) is amended by striking ``Administrator'' each
place it appears and inserting ``Secretary''.
(10) Authorization of appropriations.--Section 16 of the
Federal Nonnuclear Energy Research and Development Act of 1974
(42 U.S.C. 5915) is amended--
(A) by striking the section heading and inserting
the following:
``authorization of appropriations'';
(B) by striking ``(a) There may be appropriated to
the Administrator'' and inserting ``There may be
appropriated to the Secretary''; and
(C) by striking subsections (b) and (c).
(11) Central source of nonnuclear energy information.--
Section 17 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5916) is amended--
(A) by striking ``Administrator'' each place it
appears and inserting ``Secretary'';
(B) in the first sentence, by striking
``Administrator's'';
(C) in the second sentence, by striking ``he'' and
inserting ``the Secretary'';
(D) in the third sentence--
(i) in paragraph (2) of the first proviso,
by striking ``section 1905 or title 18'' and
inserting ``section 1905 of title 18''; and
(ii) in subparagraph (B) of the second
proviso--
(I) by striking ``the Federal
Energy Administration,'';
(II) by striking ``the Federal
Power Commission,'' and inserting ``the
Federal Energy Regulatory Commission'';
and
(III) by striking ``General
Accounting Office'' and inserting
``Government Accountability Office'';
and
(E) in the last sentence, by inserting ``or ranking
minority member'' after ``chairman''.
(12) Energy information, loan guarantees, and financial
support.--Sections 18 through 20 of the Federal Nonnuclear
Energy Research and Development Act of 1974 (42 U.S.C. 5917
through 5920) are repealed.
(c) Stevenson-Wydler Technology Innovation Act of 1980.--Section 20
of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3712) is amended by striking ``and the National Science Foundation''
and inserting ``, the Secretary of Energy, and the Director of the
National Science Foundation''.
TITLE XI--PERSONNEL AND TRAINING
SEC. 1101. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.
(a) Definitions.--In this section:
(1) Energy technology industry.--The term ``energy
technology industry'' includes--
(A) a renewable energy industry;
(B) a company that develops or commercializes a
device to increase energy efficiency;
(C) the oil and gas industry;
(D) the nuclear power industry;
(E) the coal industry;
(F) the electric utility industry; and
(G) any other industrial sector, as the Secretary
determines to be appropriate.
(2) Skilled technical personnel.--The term ``skilled
technical personnel'' means--
(A) journey- and apprentice-level workers who are
enrolled in, or have completed, a federally-recognized
or State-recognized apprenticeship program; and
(B) other skilled workers in energy technology
industries, as determined by the Secretary.
(b) Workforce Trends.--
(1) Monitoring.--The Secretary, in consultation with, and
using data collected by, the Secretary of Labor, shall monitor
trends in the workforce of--
(A) skilled technical personnel that support energy
technology industries; and
(B) electric power and transmission engineers.
(2) Report on trends.--Not later than 1 year after the date
of enactment of this Act, the Secretary shall submit to
Congress a report on current trends under paragraph (1), with
recommendations (as appropriate) to meet the future labor
requirements for the energy technology industries.
(3) Report on shortage.--As soon as practicable after the
date on which the Secretary identifies or predicts a
significant national shortage of skilled technical personnel in
1 or more energy technology industries, the Secretary shall
submit to Congress a report describing the shortage.
(c) Traineeship Grants for Skilled Technical Personnel.--The
Secretary, in consultation with the Secretary of Labor, may establish
programs in the appropriate offices of the Department under which the
Secretary provides grants to enhance training (including distance
learning) for any workforce category for which a shortage is identified
or predicted under subsection (b)(2).
(d) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $20,000,000 for each of fiscal
years 2006 through 2008.
SEC. 1102. ENERGY RESEARCH FELLOWSHIPS.
(a) Postdoctoral Fellowship Program.--The Secretary shall establish
a program under which the Secretary provides fellowships to encourage
outstanding young scientists and engineers to pursue postdoctoral
research appointments in energy research and development at
institutions of higher education of their choice.
(b) Senior Research Fellowships.--
(1) In general.--The Secretary shall establish a program
under which the Secretary provides fellowships to allow
outstanding senior researchers and their research groups in
energy research and development to explore research and
development topics of their choosing for a period of not less
than 3 years to be determined by the Secretary.
(2) Consideration.--In providing a fellowship under the
program described in paragraph (1), the Secretary shall
consider--
(A) the past scientific or technical accomplishment
of a senior researcher; and
(B) the potential for continued accomplishment by
the researcher during the period of the fellowship.
(c) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $40,000,000 for each of fiscal
years 2006 through 2008.
SEC. 1103. EDUCATIONAL PROGRAMS IN SCIENCE AND MATHEMATICS.
(a) Science Education Enhancement Fund.--Section 3164 of the
Department of Energy Science Education Enhancement Act (42 U.S.C.
7381a) is amended by adding at the end:
``(c) Science Education Enhancement Fund.--The Secretary shall use
not less than 0.2 percent of the amount made available to the
Department for fiscal year 2006 and each fiscal year thereafter to
carry out activities authorized by this part.''.
(b) Authorized Education Activities.--Section 3165 of the
Department of Energy Science Education Enhancement Act (42 U.S.C.
7381b) is amended by adding at the end the following:
``(14) Support competitive events for students under the
supervision of teachers, designed to encourage student interest
and knowledge in science and mathematics.
``(15) Support competitively-awarded, peer-reviewed
programs to promote professional development for mathematics
teachers and science teachers who teach in grades from
kindergarten through grade 12 at Department research and
development facilities.
``(16) Support summer internships at Department research
and development facilities, for mathematics teachers and
science teachers who teach in grades from kindergarten through
grade 12.
``(17) Sponsor and assist in educational and training
activities identified as critical skills needs for future
workforce development at Department research and development
facilities.''.
(c) Educational Partnerships.--Section 3166(b) of the Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381c(b)) is
amended--
(1) by striking paragraph (1) and inserting the following:
``(1) loaning or transferring equipment to the
institution;'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(4) by adding at the end the following:
``(7) providing funds to educational institutions to hire
personnel to facilitate interactions between local school
systems, Department research and development facilities, and
corporate and governmental entities.''.
(d) Definition of Department Research and Development Facilities.--
Section 3167(3) of the Department of Energy Science Education
Enhancement Act (42 U.S.C. 7381d(3)) is amended by striking ``from the
Office of Science of the Department of Energy'' and inserting ``by the
Department of Energy''.
(e) Study.--
(1) In general.--The Secretary shall enter into an
arrangement with the National Academy of Public Administration
to conduct a study of the priorities, quality, local and
regional flexibility, and plans for educational programs at
Department research and development facilities.
(2) Inclusion.--The study shall recommend measures that the
Secretary may take to improve Department-wide coordination of
educational, workforce development, and critical skills
development activities.
(3) Report.--Not later than 2 years after the date of
enactment of this Act, the Secretary shall submit to Congress a
report on the results of the study conducted under this
subsection.
SEC. 1104. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY PERSONNEL.
(a) In General.--The Secretary of Labor, in consultation with the
Secretary and in conjunction with the electric industry and recognized
employee representatives, shall develop model personnel training
guidelines to support the reliability and safety of the electric
system.
(b) Requirements.--The training guidelines under subsection (a)
shall, at a minimum--
(1) include training requirements for workers engaged in
the construction, operation, inspection, or maintenance of
electric generation, transmission, or distribution systems,
including requirements relating to--
(A) competency;
(B) certification; and
(C) assessment, including--
(i) initial and continuous evaluation of
workers;
(ii) recertification procedures; and
(iii) methods for examining or testing the
qualification of an individual who performs a
covered task; and
(2) consolidate training guidelines in existence on the
date on which the guidelines under subsection (a) are developed
relating to the construction, operation, maintenance, and
inspection of electric generation, transmission, and
distribution facilities, such as guidelines established by the
National Electric Safety Code and other industry consensus
standards.
SEC. 1105. NATIONAL CENTER FOR ENERGY MANAGEMENT AND BUILDING
TECHNOLOGIES.
The Secretary shall support the ongoing activities of the National
Center for Energy Management and Building Technologies to carry out
research, education, and training activities to facilitate the
improvement of energy efficiency, indoor environmental quality, and
security of industrial, commercial, residential, and public buildings.
SEC. 1106. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND TECHNICAL
CAREERS.
(a) Science Education Programs.--Section 3164 of the Department of
Energy Science Education Enhancement Act (42 U.S.C. 7381a) (as amended
by section 1103(a)) is amended by adding at the end the following:
``(d) Programs for Students from Under-Represented Groups.--In
carrying out a program under subsection (a), the Secretary shall give
priority to activities that are designed to encourage students from
under-represented groups to pursue scientific and technical careers.''.
(b) Partnerships With Historically Black Colleges and Universities,
Hispanic-Servicing Institutions, and Tribal Colleges.--The Department
of Energy Science Education Enhancement Act (42 U.S.C. 7381 et seq.) is
amended--
(1) by redesignating sections 3167 and 3168 as sections
3168 and 3169, respectively; and
(2) by inserting after section 3166 the following:
``SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES, HISPANIC-SERVING INSTITUTIONS, AND TRIBAL
COLLEGES.
``(a) Definitions.--In this section:
``(1) Hispanic-serving institution.--The term `Hispanic-
serving institution' has the meaning given the term in section
502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)).
``(2) Historically black college or university.--The term
`historically Black college or university' has the meaning
given the term `part B institution' in section 322 of the
Higher Education Act of 1965 (20 U.S.C. 1061).
``(3) National laboratory.--The term `National Laboratory'
has the meaning given the term in section 2 of the Energy
Policy Act of 2005.
``(4) Science facility.--The term `science facility' has
the meaning given the term `single-purpose research facility'
in section 903 of the Energy Policy Act of 2005.
``(5) Tribal college.--The term `tribal college' has the
meaning given the term `tribally controlled college or
university' in section 2(a) of the Tribally Controlled College
Assistance Act of 1978 (25 U.S.C. 1801(a)).
``(b) Education Partnership.--The Secretary shall require the
director of each National Laboratory, and may require the head of any
science facility, to increase the participation of historically Black
colleges or universities, Hispanic-serving institutions, or tribal
colleges in any activity that increases the capacity of the
historically Black colleges or universities, Hispanic-serving
institutions, or tribal colleges to train personnel in science or
engineering.
``(c) Activities.--An activity described in subsection (b)
includes--
``(1) collaborative research;
``(2) equipment transfer;
``(3) training activities carried out at a National
Laboratory or science facility; and
``(4) mentoring activities carried out at a National
Laboratory or science facility.
``(d) Report.--Not later than 2 years after the date of enactment
of this subsection, the Secretary shall submit to Congress a report
describing the activities carried out under this section.''.
SEC. 1107. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND EDUCATIONAL
CENTER.
(a) Establishment.--The Secretary shall support the establishment
of a National Power Plant Operations Technology and Education Center
(referred to in this section as the ``Center''), to address the need
for training and educating certified operators and technicians for the
electric power industry.
(b) Location of Center.--The Secretary shall support the
establishment of the Center at an institution of higher education that
has--
(1) expertise in providing degree programs in electric
power generation, transmission, and distribution technologies;
(2) expertise in providing onsite and Internet-based
training; and
(3) demonstrated responsiveness to workforce and training
requirements in the electric power industry.
(c) Training and Continuing Education.--
(1) In general.--The Center shall provide training and
continuing education in electric power generation,
transmission, and distribution technologies and operations.
(2) Location.--The Center shall carry out training and
education activities under paragraph (1)--
(A) at the Center; and
(B) through Internet-based information technologies
that allow for learning at remote sites.
TITLE XII--ELECTRICITY
SEC. 1201. SHORT TITLE.
This title may be cited as the ``Electricity Modernization Act of
2005''.
Subtitle A--Reliability Standards
SEC. 1211. ELECTRIC RELIABILITY STANDARDS.
(a) In General.--Part II of the Federal Power Act (16 U.S.C 824 et
seq.) is amended by adding at the end the following:
``SEC. 215. ELECTRIC RELIABILITY.
``(a) Definitions.--In this section:
``(1)(A) The term `bulk-power system' means--
``(i) facilities and control systems necessary for
operating an interconnected electric energy
transmission network (or any portion of such a
network); and
``(ii) electric energy from generation facilities
needed to maintain transmission system reliability.
``(B) The term `bulk-power system' does not include
facilities used in the local distribution of electric energy.
``(2) The terms `Electric Reliability Organization' and
`ERO' mean the organization certified by the Commission under
subsection (c) the purpose of which is to establish and enforce
reliability standards for the bulk-power system, subject to
review by the Commission.
``(3)(A) The term `reliability standard' means a
requirement, approved by the Commission under this section, to
provide for reliable operation of the bulk-power system.
``(B) The term `reliability standard' includes requirements
for the operation of existing bulk-power system components and
the design of planned additions or modifications to those
components to the extent necessary to provide for reliable
operation of the bulk-power system, except that the term does
not include any requirement to enlarge those components or to
construct new transmission capacity or generation capacity.
``(4) The term `reliable operation' means operating the
components of the bulk-power system within equipment and
electric system thermal, voltage, and stability limits so that
instability, uncontrolled separation, or cascading failures of
the system will not occur as a result of a sudden disturbance
or unanticipated failure of system components.
``(5) The term `interconnection' means a geographic area in
which the operation of bulk-power system components is
synchronized such that the failure of 1 or more of the
components may adversely affect the ability of the operators of
other components within the system to maintain reliable
operation of the portion of the system within their control.
``(6) The term `regional entity' means an entity having
enforcement authority pursuant to subsection (e)(4).
``(b) Jurisdiction and Applicability.--(1) The Commission shall
have jurisdiction, within the United States, over the ERO certified by
the Commission under subsection (c), any regional entities, and all
users, owners and operators of the bulk-power system (including the
entities described in section 201(f)), for purposes of approving
reliability standards established under this section and enforcing
compliance with this section.
``(2) All users, owners, and operators of the bulk-power system
shall comply with reliability standards that take effect under this
section.
``(3) The Commission shall issue a final rule to implement the
requirements of this section not later than 180 days after the date of
enactment of this section.
``(c) Certification.--(1) Following the issuance of a Commission
rule under subsection (b)(3), any person may submit an application to
the Commission for certification as the Electric Reliability
Organization.
``(2) The Commission may certify 1 such ERO if the Commission
determines that the ERO--
``(A) has the ability to develop and enforce, subject to
subsection (e)(2), reliability standards that provide for an
adequate level of reliability of the bulk-power system; and
``(B) has established rules that--
``(i) ensure the independence of the ERO from the
users and owners and operators of the bulk-power
system, while ensuring fair stakeholder representation
in the selection of the directors of the ERO and
balanced decisionmaking in any ERO committee or
subordinate organizational structure;
``(ii) allocate equitably reasonable dues, fees,
and other charges among end users for all activities
under this section;
``(iii) provide fair and impartial procedures for
enforcement of reliability standards through the
imposition of penalties in accordance with subsection
(e) (including limitations on activities, functions, or
operations, or other appropriate sanctions);
``(iv) provide for reasonable notice and
opportunity for public comment, due process, openness,
and balance of interests in developing reliability
standards and otherwise exercising the duties of the
ERO; and
``(v) provide for taking, after certification,
appropriate steps to gain recognition in Canada and
Mexico.
``(d) Reliability Standards.--(1) The ERO shall file each
reliability standard or modification to a reliability standard that the
ERO proposes to be made effective under this section with the
Commission.
``(2)(A) The Commission may approve, by rule or order, a proposed
reliability standard or modification to a reliability standard if the
Commission determines that the standard is just, reasonable, not unduly
discriminatory or preferential, and in the public interest.
``(B) The Commission--
``(i) shall give due weight to the technical expertise of
the ERO with respect to the content of a proposed standard or
modification to a reliability standard and to the technical
expertise of a regional entity organized on an interconnection-
wide basis with respect to a reliability standard to be
applicable within that interconnection; but
``(ii) shall not defer with respect to the effect of a
standard on competition.
``(C) A proposed standard or modification shall take effect on
approval by the Commission.
``(3) The ERO shall rebuttably presume that a proposal from a
regional entity organized on an interconnection-wide basis for a
reliability standard or modification to a reliability standard to be
applicable on an interconnection-wide basis is just, reasonable, not
unduly discriminatory or preferential, and in the public interest.
``(4) The Commission shall remand to the ERO for further
consideration a proposed reliability standard or a modification to a
reliability standard that the Commission disapproves in whole or in
part.
``(5) The Commission, on a motion of the Commission or on
complaint, may order the ERO to submit to the Commission a proposed
reliability standard or a modification to a reliability standard that
addresses a specific matter if the Commission considers such a new or
modified reliability standard appropriate to carry out this section.
``(6)(A) The final rule adopted under subsection (b)(2) shall
include fair processes for the identification and timely resolution of
any conflict between a reliability standard and any function, rule,
order, tariff, rate schedule, or agreement accepted, approved, or
ordered by the Commission applicable to a transmission organization.
``(B) The transmission organization shall continue to comply with
such function, rule, order, tariff, rate schedule or agreement accepted
approved, or ordered by the Commission until--
``(i) the Commission finds a conflict exists between a
reliability standard and any such provision;
``(ii) the Commission orders a change to the provision
pursuant to section 206; and
``(iii) the ordered change becomes effective under this
part.
``(C) If the Commission determines that a reliability standard
needs to be changed as a result of such a conflict, the Commission
shall order the ERO to develop and file with the Commission a modified
reliability standard under paragraph (4) or (5).
``(e) Enforcement.--(1) Subject to paragraph (2), the ERO may
impose a penalty on a user or owner or operator of the bulk-power
system for a violation of a reliability standard approved by the
Commission under subsection (d) if the ERO, after notice and an
opportunity for a hearing--
``(A) finds that the user or owner or operator has violated
a reliability standard approved by the Commission under
subsection (d); and
``(B) files notice and the record of the proceeding with
the Commission.
``(2)(A) A penalty imposed under paragraph (1) may take effect not
earlier than the day that is 31 days after the date on which the ERO
files with the Commission notice of the penalty and the record of
proceedings.
``(B) The penalty shall be subject to review by the Commission on--
``(i) a motion by the Commission; or
``(ii) application by the user, owner or operator that is
the subject of the penalty filed not later than 30 days after
the date on which the notice is filed with the Commission.
``(C) Application to the Commission for review, or the initiation
of review by the Commission on a motion of the Commission, shall not
operate as a stay of the penalty unless the Commission orders otherwise
on a motion of the Commission or on application by the user, owner or
operator that is the subject of the penalty.
``(D) In any proceeding to review a penalty imposed under paragraph
(1), the Commission, after notice and opportunity for hearing (which
hearing may consist solely of the record before the ERO and opportunity
for the presentation of supporting reasons to affirm, modify, or set
aside the penalty), shall by order--
``(i) affirm, set aside, reinstate, or modify the penalty;
and
``(ii) if appropriate, remand to the ERO for further
proceedings.
``(E) The Commission shall implement expedited procedures for the
hearings described in subparagraph (D).
``(3) On a motion of the Commission or on complaint, the Commission
may order compliance with a reliability standard and may impose a
penalty against a user or owner or operator of the bulk-power system if
the Commission finds, after notice and opportunity for a hearing, that
the user or owner or operator of the bulk-power system has engaged or
is about to engage in any act or practice that constitutes or will
constitute a violation of a reliability standard.
``(4)(A) The Commission shall issue regulations authorizing the ERO
to enter into an agreement to delegate authority to a regional entity
for the purpose of proposing reliability standards to the ERO and
enforcing reliability standards under paragraph (1) if--
``(i) the regional entity is governed by--
``(I) an independent board;
``(II) a balanced stakeholder board; or
``(III) a combination independent and balanced
stakeholder board;
``(ii) the regional entity otherwise meets the requirements
of paragraphs (1) and (2) of subsection (c); and
``(iii) the agreement promotes effective and efficient
administration of bulk-power system reliability.
``(B) The Commission may modify a delegation under this paragraph.
``(C) The ERO and the Commission shall rebuttably presume that a
proposal for delegation to a regional entity organized on an
interconnection-wide basis promotes effective and efficient
administration of bulk-power system reliability and should be approved.
``(D) The regulation issued under this paragraph may provide that
the Commission may assign the authority of the ERO to enforce
reliability standards under paragraph (1) directly to a regional entity
in accordance with this paragraph.
``(5) The Commission may take such action as is necessary or
appropriate against the ERO or a regional entity to ensure compliance
with a reliability standard or any Commission order affecting the ERO
or a regional entity.
``(6) Any penalty imposed under this section shall--
``(A) bear a reasonable relation to the seriousness of the
violation; and
``(B) take into consideration the efforts of the user,
owner, or operator to remedy the violation in a timely manner.
``(f) Changes in Electric Reliability Organization Rules.--(1) The
Electric Reliability Organization shall file with the Commission for
approval any proposed rule or proposed rule change, accompanied by an
explanation of the basis and purpose of the rule and proposed rule
change.
``(2) The Commission, upon a motion of the Commission or upon
complaint, may propose a change to the rules of the ERO.
``(3) A proposed rule or proposed rule change shall take effect
upon a finding by the Commission, after notice and opportunity for
comment, that the change is just, reasonable, and not unduly
discriminatory or preferential, is in the public interest, and meets
the requirements of subsection (c).
``(g) Reliability Reports.--The ERO shall conduct periodic
assessments of the reliability and adequacy of the bulk-power system in
North America.
``(h) Coordination With Canada and Mexico.--The President is urged
to negotiate international agreements with the governments of Canada
and Mexico to provide for effective compliance with reliability
standards and the effectiveness of the ERO in the United States and
Canada or Mexico.
``(i) Savings Provisions.--(1) The ERO may develop and enforce
compliance with reliability standards for only the bulk-power system.
``(2) Nothing in this section authorizes the ERO or the Commission
to order the construction of additional generation or transmission
capacity or to set and enforce compliance with standards for adequacy
or safety of electric facilities or services.
``(3) Nothing in this section preempts any authority of any State
to take action to ensure the safety, adequacy, and reliability of
electric service within that State, as long as the action is not
inconsistent with any reliability standard.
``(4) Not later than 90 days after the date of application of the
Electric Reliability Organization or other affected party, and after
notice and opportunity for comment, the Commission shall issue a final
order determining whether a State action is inconsistent with a
reliability standard, taking into consideration any recommendation of
the ERO.
``(5) The Commission, after consultation with the ERO and the State
taking action, may stay the effectiveness of any State action, pending
the issuance by the Commission of a final order.
``(j) Regional Advisory Bodies.--(1) The Commission shall establish
a regional advisory body on the petition of at least \2/3\ of the
States within a region that have more than \1/2\ of the electric load
of the States served within the region.
``(2) A regional advisory body--
``(A) shall be composed of 1 member from each participating
State in the region, appointed by the Governor of the State;
and
``(B) may include representatives of agencies, States, and
provinces outside the United States.
``(3) A regional advisory body may provide advice to the Electric
Reliability Organization, a regional entity, or the Commission
regarding--
``(A) the governance of an existing or proposed regional
entity within the same region;
``(B) whether a standard proposed to apply within the
region is just, reasonable, not unduly discriminatory or
preferential, and in the public interest;
``(C) whether fees proposed to be assessed within the
region are just, reasonable, not unduly discriminatory or
preferential, and in the public interest; and
``(D) any other responsibilities requested by the
Commission.
``(4) The Commission may give deference to the advice of a regional
advisory body if that body is organized on an interconnection-wide
basis.
``(k) Alaska and Hawaii.--This section does not apply to Alaska or
Hawaii.''.
(b) Status of ERO.--The Electric Reliability Organization certified
by the Commission under section 215(c) of the Federal Power Act (as
added by subsection (a)) and any regional entity delegated enforcement
authority pursuant to section 215(e)(4) of that Act (as so added) are
not departments, agencies, or instrumentalities of the Federal
Government.
Subtitle B--Transmission Infrastructure Modernization
SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.
(a) In General.--Part II of the Federal Power Act (16 U.S.C. 824 et
seq.) (as amended by section 1211(a)) is amended by adding at the end
the following:
``SEC. 216. SITING OF INTERSTATE ELECTRIC TRANSMISSION FACILITIES.
``(a) Designation of National Interest Electric Transmission
Corridors.--(1) Not later than 1 year after the date of enactment of
this section and every 3 years thereafter, the Secretary of Energy
(referred to in this section as the `Secretary'), in consultation with
affected States, shall conduct a study of electric transmission
congestion.
``(2) After considering alternatives and recommendations from
interested parties (including an opportunity for comment from affected
States), the Secretary shall issue a report, based on the study, which
may designate any geographic area experiencing electric energy
transmission capacity constraints or congestion that adversely affects
consumers as a national interest electric transmission corridor.
``(3) The Secretary shall conduct the study and issue the report in
consultation with any appropriate regional entity referred to in
section 215.
``(4) In determining whether to designate a national interest
electric transmission corridor under paragraph (2), the Secretary may
consider whether--
``(A) the economic vitality and development of the
corridor, or the end markets served by the corridor, may be
constrained by lack of adequate or reasonably priced
electricity;
``(B)(i) economic growth in the corridor, or the end
markets served by the corridor, may be jeopardized by reliance
on limited sources of energy; and
``(ii) a diversification of supply is warranted;
``(C) the energy independence of the United States would be
served by the designation;
``(D) the designation would be in the interest of national
energy policy; and
``(E) the designation would enhance national defense and
homeland security.
``(b) Construction Permit.--Except as provided in subsection (i),
the Commission may, after notice and an opportunity for hearing, issue
1 or more permits for the construction or modification of electric
transmission facilities in a national interest electric transmission
corridor designated by the Secretary under subsection (a) if the
Commission finds that--
``(1)(A) a State in which the transmission facilities are
to be constructed or modified does not have authority to--
``(i) approve the siting of the facilities; or
``(ii) consider the interstate benefits expected to
be achieved by the proposed construction or
modification of transmission facilities in the State;
``(B) the applicant for a permit is a transmitting utility
under this Act but does not qualify to apply for a permit or
siting approval for the proposed project in a State because the
applicant does not serve end-use customers in the State; or
``(C) a State commission or other entity that has authority
to approve the siting of the facilities has--
``(i) withheld approval for more than 1 year after
the filing of an application seeking approval pursuant
to applicable law or 1 year after the designation of
the relevant national interest electric transmission
corridor, whichever is later; or
``(ii) conditioned its approval in such a manner
that the proposed construction or modification will not
significantly reduce transmission congestion in
interstate commerce or is not economically feasible;
``(2) the facilities to be authorized by the permit will be
used for the transmission of electric energy in interstate
commerce;
``(3) the proposed construction or modification is
consistent with the public interest;
``(4) the proposed construction or modification will
significantly reduce transmission congestion in interstate
commerce and protects or benefits consumers;
``(5) the proposed construction or modification is
consistent with sound national energy policy and will enhance
energy independence; and
``(6) the proposed modification will maximize, to the
extent reasonable and economical, the transmission capabilities
of existing towers or structures so as to minimize the
environmental and visual impact of the proposed modification.
``(c) Permit Applications.--(1) Permit applications under
subsection (b) shall be made in writing to the Commission.
``(2) The Commission shall issue rules specifying--
``(A) the form of the application;
``(B) the information to be contained in the application;
and
``(C) the manner of service of notice of the permit
application on interested persons.
``(d) Comments.--In any proceeding before the Commission under
subsection (b), the Commission shall afford each State in which a
transmission facility covered by the permit is or will be located, each
affected Federal agency and Indian tribe, private property owners, and
other interested persons, a reasonable opportunity to present their
views and recommendations with respect to the need for and impact of a
facility covered by the permit.
``(e) Rights-of-Way.--(1) In the case of a permit under subsection
(b) for electric transmission facilities to be located on property
other than property owned by the United States or a State, if the
permit holder cannot acquire by contract, or is unable to agree with
the owner of the property to the compensation to be paid for, the
necessary right-of-way to construct or modify the transmission
facilities, the permit holder may acquire the right-of-way by the
exercise of the right of eminent domain in the district court of the
United States for the district in which the property concerned is
located, or in the appropriate court of the State in which the property
is located.
``(2) Any right-of-way acquired under paragraph (1) shall be used
exclusively for the construction or modification of electric
transmission facilities within a reasonable period of time after the
acquisition.
``(3) The practice and procedure in any action or proceeding under
this subsection in the district court of the United States shall
conform as nearly as practicable to the practice and procedure in a
similar action or proceeding in the courts of the State in which the
property is located.
``(f) Compensation.--(1) Any right-of-way acquired pursuant to
subsection (e) shall be considered a taking of private property for
which just compensation is due.
``(2) Just compensation shall be an amount equal to the fair market
value (including applicable severance damages) of the property taken on
the date of the exercise of eminent domain authority.
``(g) State Law.--Nothing in this section precludes any person from
constructing or modifying any transmission facility in accordance with
State law.
``(h) Coordination of Federal Authorizations For Transmission
Facilities.--(1) In this subsection:
``(A) The term `Federal authorization' means any
authorization required under Federal law in order to site a
transmission facility.
``(B) The term `Federal authorization' includes such
permits, special use authorizations, certifications, opinions,
or other approvals as may be required under Federal law in
order to site a transmission facility.
``(2) The Department of Energy shall act as the lead agency for
purposes of coordinating all applicable Federal authorizations and
related environmental reviews of the facility.
``(3) To the maximum extent practicable under applicable Federal
law, the Secretary shall coordinate the Federal authorization and
review process under this subsection with any Indian tribes, multistate
entities, and State agencies that are responsible for conducting any
separate permitting and environmental reviews of the facility, to
ensure timely and efficient review and permit decisions.
``(4)(A) As head of the lead agency, the Secretary, in consultation
with agencies responsible for Federal authorizations and, as
appropriate, with Indian tribes, multistate entities, and State
agencies that are willing to coordinate their own separate permitting
and environmental reviews with the Federal authorization and
environmental reviews, shall establish prompt and binding intermediate
milestones and ultimate deadlines for the review of, and Federal
authorization decisions relating to, the proposed facility.
``(B) The Secretary shall ensure that, once an application has been
submitted with such data as the Secretary considers necessary, all
permit decisions and related environmental reviews under all applicable
Federal laws shall be completed--
``(i) within 1 year; or
``(ii) if a requirement of another provision of Federal law
does not permit compliance with clause (i), as soon thereafter
as is practicable.
``(C) The Secretary shall provide an expeditious pre-application
mechanism for prospective applicants to confer with the agencies
involved to have each such agency determine and communicate to the
prospective applicant not later than 60 days after the prospective
applicant submits a request for such information concerning--
``(i) the likelihood of approval for a potential facility;
and
``(ii) key issues of concern to the agencies and public.
``(5)(A) As lead agency head, the Secretary, in consultation with
the affected agencies, shall prepare a single environmental review
document, which shall be used as the basis for all decisions on the
proposed project under Federal law.
``(B) The Secretary and the heads of other agencies shall
streamline the review and permitting of transmission within corridors
designated under section 503 of the Federal Land Policy and Management
Act (43 U.S.C. 1763) by fully taking into account prior analyses and
decisions relating to the corridors.
``(C) The document shall include consideration by the relevant
agencies of any applicable criteria or other matters as required under
applicable law.
``(6)(A) If any agency has denied a Federal authorization required
for a transmission facility, or has failed to act by the deadline
established by the Secretary pursuant to this section for deciding
whether to issue the authorization, the applicant or any State in which
the facility would be located may file an appeal with the President,
who shall, in consultation with the affected agency, review the denial
or failure to take action on the pending application.
``(B) Based on the overall record and in consultation with the
affected agency, the President may--
``(i) issue the necessary authorization with any
appropriate conditions; or
``(ii) deny the application.
``(C) The President shall issue a decision not later than 90 days
after the date of the filing of the appeal.
``(D) In making a decision under this paragraph, the President
shall comply with applicable requirements of Federal law, including any
requirements of--
``(i) the National Forest Management Act of 1976 (16 U.S.C.
472a et seq.);
``(ii) the Endangered Species Act of 1973 (16 U.S.C. 1531
et seq.);
``(iii) the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.);
``(iv) the National Environmental Policy Act of 1969 (42
U.S.C. 4321 et seq.); and
``(v) the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1701 et seq.).
``(7)(A) Not later than 18 months after the date of enactment of
this section, the Secretary shall issue any regulations necessary to
implement this subsection.
``(B)(i) Not later than 1 year after the date of enactment of this
section, the Secretary and the heads of all Federal agencies with
authority to issue Federal authorizations shall enter into a memorandum
of understanding to ensure the timely and coordinated review and
permitting of electricity transmission facilities.
``(ii) Interested Indian tribes, multistate entities, and State
agencies may enter the memorandum of understanding.
``(C) The head of each Federal agency with authority to issue a
Federal authorization shall designate a senior official responsible
for, and dedicate sufficient other staff and resources to ensure, full
implementation of the regulations and memorandum required under this
paragraph.
``(8)(A) Each Federal land use authorization for an electricity
transmission facility shall be issued--
``(i) for a duration, as determined by the Secretary,
commensurate with the anticipated use of the facility; and
``(ii) with appropriate authority to manage the right-of-
way for reliability and environmental protection.
``(B) On the expiration of the authorization (including an
authorization issued before the date of enactment of this section), the
authorization shall be reviewed for renewal taking fully into account
reliance on such electricity infrastructure, recognizing the importance
of the authorization for public health, safety, and economic welfare
and as a legitimate use of Federal land.
``(9) In exercising the responsibilities under this section, the
Secretary shall consult regularly with--
``(A) the Federal Energy Regulatory Commission;
``(B) electric reliability organizations (including related
regional entities) approved by the Commission; and
``(C) Transmission Organizations approved by the
Commission.
``(i) Interstate Compacts.--(1) The consent of Congress is given
for 3 or more contiguous States to enter into an interstate compact,
subject to approval by Congress, establishing regional transmission
siting agencies to--
``(A) facilitate siting of future electric energy
transmission facilities within those States; and
``(B) carry out the electric energy transmission siting
responsibilities of those States.
``(2) The Secretary may provide technical assistance to regional
transmission siting agencies established under this subsection.
``(3) The regional transmission siting agencies shall have the
authority to review, certify, and permit siting of transmission
facilities, including facilities in national interest electric
transmission corridors (other than facilities on property owned by the
United States).
``(4) The Commission shall have no authority to issue a permit for
the construction or modification of an electric transmission facility
within a State that is a party to a compact, unless the members of the
compact are in disagreement and the Secretary makes, after notice and
an opportunity for a hearing, the finding described in subsection
(b)(1)(C).
``(j) Relationship to Other Laws.--(1) Except as specifically
provided, nothing in this section affects any requirement of an
environmental law of the United States, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
``(2) Subsection (h)(6) shall not apply to any unit of the National
Park System, the National Wildlife Refuge System, the National Wild and
Scenic Rivers System, the National Trails System, the National
Wilderness Preservation System, or a National Monument.''.
(b) Reports to Congress on Corridors and Rights of Way on Federal
Lands.--Not later than 90 days after the date of enactment of this Act,
the Secretary of the Interior, the Secretary, the Secretary of
Agriculture, and the Chairman of the Council on Environmental Quality
shall submit to Congress a joint report identifying--
(1)(A) all existing designated transmission and
distribution corridors on Federal land and the status of work
related to proposed transmission and distribution corridor
designations under title V of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1761 et seq.);
(B) the schedule for completing the work;
(C) any impediments to completing the work; and
(D) steps that Congress could take to expedite the process;
(2)(A) the number of pending applications to locate
transmission facilities on Federal land;
(B) key information relating to each such facility;
(C) how long each application has been pending;
(D) the schedule for issuing a timely decision as to each
facility; and
(E) progress in incorporating existing and new such rights-
of-way into relevant land use and resource management plans or
the equivalent of those plans; and
(3)(A) the number of existing transmission and distribution
rights-of-way on Federal land that will come up for renewal
within the following 5-, 10-, and 15-year periods; and
(B) a description of how the Secretaries plan to manage the
renewals.
SEC. 1222. THIRD-PARTY FINANCE.
(a) Existing Facilities.--The Secretary, acting through the
Administrator of the Western Area Power Administration (referred to in
this section as ``WAPA'') or the Administrator of the Southwestern
Power Administration (referred to in this section as ``SWPA''), or
both, may carry out a project to design, develop, construct, operate,
maintain, or own, or participate with other entities in designing,
developing, constructing, operating, maintaining, or owning, an
electric power transmission facility and related facilities needed to
upgrade existing transmission facilities owned by the SWPA or WAPA if
the Secretary, in consultation with the applicable Administrator,
determines that the proposed project--
(1)(A) is located in a national interest electric
transmission corridor designated under section 216(a) of the
Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by the
appropriate Transmission Organization (as defined in
section 3 of the Federal Power Act (16 U.S.C. 796)), if
any, or approved regional reliability organization; and
(B) efficient and reliable operation of the
transmission grid; and
(3) would be operated in conformance with prudent utility
practice.
(b) New Facilities.--The Secretary, acting through the WAPA or
SWPA, or both, may carry out a project to design, develop, construct,
operate, maintain, or own, or participate with other entities in
designing, developing, constructing, operating, maintaining, or owning,
a new electric power transmission facility and related facilities
located within any State in which the WAPA or SWPA operates if the
Secretary, in consultation with the applicable Administrator,
determines that the proposed project--
(1)(A) is located in a national interest electric
transmission corridor designated under section 216(a) of the
Federal Power Act and will reduce congestion of electric
transmission in interstate commerce; or
(B) is necessary to accommodate an actual or projected
increase in demand for electric transmission capacity;
(2) is consistent with--
(A) transmission needs identified, in a
transmission expansion plan or otherwise, by the
appropriate Transmission Organization, if any, or
approved regional reliability organization; and
(B) efficient and reliable operation of the
transmission grid;
(3) will be operated in conformance with prudent utility
practice;
(4) will be operated by, or in conformance with the rules
of, the appropriate--
(A) Transmission Organization, if any; or
(B) if such an organization does not exist,
regional reliability organization; and
(5) will not duplicate the functions of existing
transmission facilities or proposed facilities that are the
subject of ongoing or approved siting and related permitting
proceedings.
(c) Other Funds.--
(1) In general.--In carrying out a project under subsection
(a) or (b), the Secretary may accept and use funds contributed
by another entity for the purpose of carrying out the project.
(2) Availability.--The contributed funds shall be available
for expenditure for the purpose of carrying out the project--
(A) without fiscal year limitation; and
(B) as if the funds had been appropriated
specifically for the project.
(3) Allocation of costs.--In carrying out a project under
subsection (a) or (b), any costs of the project not paid for by
contributions from another entity shall be--
(A) collected through rates charged to customers
using the new transmission capability provided by the
project; and
(B) allocated equitably among these project
beneficiaries using the new transmission capability.
(d) Relationship to Other Laws.--Nothing in this section affects
any requirement of--
(1) any Federal environmental law, including the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.);
(2) any Federal or State law relating to the siting of
energy facilities; or
(3) any authorizing law in effect on the date of enactment
of this Act.
(e) Savings Clause.--Nothing in this section constrains or
restricts an Administrator in the use of other authority delegated to
the Administrator of the WAPA or SWPA.
(f) Secretarial Determinations.--Any determination made pursuant to
subsection (a) or (b) shall be based on findings by the Secretary using
the best available data.
(g) Maximum Funding Amount.--The Secretary shall not accept and use
more than $100,000,000 under subsection (c)(1) for the period of fiscal
years 2006 through 2013.
SEC. 1223. ADVANCED TRANSMISSION TECHNOLOGIES.
(a) Definition of Advanced Transmission Technology.--In this
section, the term ``advanced transmission technology'' means a
technology that increases the capacity, efficiency, or reliability of
an existing or new transmission facility, including--
(1) high-temperature lines (including superconducting
cables);
(2) underground cables;
(3) advanced conductor technology (including advanced
composite conductors, high-temperature low-sag conductors, and
fiber optic temperature sensing conductors);
(4) high-capacity ceramic electric wire, connectors, and
insulators;
(5) optimized transmission line configurations (including
multiple phased transmission lines);
(6) modular equipment;
(7) wireless power transmission;
(8) ultra-high voltage lines;
(9) high-voltage DC technology;
(10) flexible AC transmission systems;
(11) energy storage devices (including pumped hydro,
compressed air, superconducting magnetic energy storage,
flywheels, and batteries);
(12) controllable load;
(13) distributed generation (including PV, fuel cells, and
microturbines);
(14) enhanced power device monitoring;
(15) direct system state sensors;
(16) fiber optic technologies;
(17) power electronics and related software (including real
time monitoring and analytical software);
(18) mobile transformers and mobile substations; and
(19) any other technologies the Commission considers
appropriate.
(b) Authority.--In carrying out the Federal Power Act (16 U.S.C.
791a et seq.) and the Public Utility Regulatory Policies Act of 1978
(16 U.S.C. 2601 et seq.), the Commission shall encourage, as
appropriate, the deployment of advanced transmission technologies.
SEC. 1224. ADVANCED POWER SYSTEM TECHNOLOGY INCENTIVE PROGRAM.
(a) Definitions.--In this section:
(1) Qualifying advanced power system technology facility.--
The term ``qualifying advanced power system technology
facility'' means a facility using an advanced fuel cell,
turbine, or hybrid power system or power storage system to
generate or store electric energy.
(2) Qualifying security and assured power facility.--The
term ``qualifying security and assured power facility'' means a
qualifying advanced power system technology facility determined
by the Secretary, in consultation with the Secretary of
Homeland Security, to be in critical need of secure, reliable,
rapidly available, high-quality power for critical
governmental, industrial, or commercial applications.
(b) Program.--The Secretary may establish an advanced power system
technology incentive program to--
(1) support the deployment of certain advanced power system
technologies; and
(2) improve and protect certain critical governmental,
industrial, and commercial processes.
(c) Incentive Payments.--
(1) In general.--Funds provided under this section shall be
used by the Secretary to make incentive payments to eligible
owners or operators of advanced power system technologies to
increase power generation through enhanced operational,
economic, and environmental performance.
(2) Application.--Payments under this section may only be
made on receipt by the Secretary of an incentive payment
application establishing an applicant as--
(A) a qualifying advanced power system technology
facility; or
(B) a qualifying security and assured power
facility.
(3) Payment rates.--Subject to availability of funds--
(A) a payment of 1.8 cents per kilowatt-hour shall
be paid to the owner or operator of a qualifying
advanced power system technology facility under this
section for electricity generated at the facility; and
(B) an additional 0.7 cents per kilowatt-hour shall
be paid to the owner or operator of a qualifying
security and assured power facility for electricity
generated at the facility.
(4) Payment quantity.--Any facility qualifying under this
section shall be eligible for an incentive payment for up to,
but not more than, the first 10,000,000 kilowatt-hours produced
in any fiscal year.
(d) Authorization of Appropriations.--There is authorized to be
appropriated to the Secretary to carry out this section $10,000,000 for
each of fiscal years 2006 through 2012.
Subtitle C--Transmission Operation Improvements
SEC. 1231. OPEN NONDISCRIMINATORY ACCESS.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) is amended
by inserting after section 211 (16 U.S.C. 824j) the following:
``SEC. 211A. OPEN ACCESS BY UNREGULATED TRANSMITTING UTILITIES.
``(a) Definition of Unregulated Transmitting Utility.--In this
section, the term `unregulated transmitting utility' means an entity
that--
``(1) owns or operates facilities used for the transmission
of electric energy in interstate commerce; and
``(2) is an entity described in section 201(f).
``(b) Transmission Operation Improvements.--Subject to section
212(h), the Commission may, by rule or order, require an unregulated
transmitting utility to provide transmission services--
``(1) at rates that are comparable to those that the
unregulated transmitting utility charges itself; and
``(2) on terms and conditions (not relating to rates) that
are comparable to those under which the unregulated
transmitting utility provides transmission services to itself
and that are not unduly discriminatory or preferential.
``(c) Exemption.--The Commission shall exempt from any rule or
order under this section any unregulated transmitting utility that--
``(1) sells not more than 4,000,000 megawatt hours of
electricity per year;
``(2) does not own or operate any transmission facilities
that are necessary for operating an interconnected transmission
system (or any portion of the system); or
``(3) meets other criteria the Commission determines to be
in the public interest.
``(d) Local Distribution Facilities.--The requirements of
subsection (b) shall not apply to facilities used in local
distribution.
``(e) Exemption Termination.--If the Commission, after an
evidentiary hearing held on a complaint and after giving consideration
to reliability standards established under section 215, finds on the
basis of a preponderance of the evidence that any exemption granted
pursuant to subsection (c) unreasonably impairs the continued
reliability of an interconnected transmission system, the Commission
shall revoke the exemption granted to the transmitting utility.
``(f) Application to Unregulated Transmitting Utilities.--The rate
changing procedures applicable to public utilities under subsections
(c) and (d) of section 205 are applicable to unregulated transmitting
utilities for purposes of this section.
``(g) Remand.--In exercising authority under subsection (b)(1), the
Commission may remand transmission rates to an unregulated transmitting
utility for review and revision if necessary to meet the requirements
of subsection (b).
``(h) Other Requests.--The provision of transmission services under
subsection (b) does not preclude a request for transmission services
under section 211.
``(i) Limitation.--The Commission may not require a State or
municipality to take action under this section that would violate a
private activity bond rule for purposes of section 141 of the Internal
Revenue Code of 1986.
``(j) Transfer of Control of Transmitting Facilities.--Nothing in
this section authorizes the Commission to require an unregulated
transmitting utility to transfer control or operational control of its
transmitting facilities to a Transmission Organization that is
designated to provide nondiscriminatory transmission access.''.
SEC. 1232. REGIONAL TRANSMISSION ORGANIZATIONS.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1221(a)) is amended by adding at the end the
following:
``SEC. 217. PROMOTION OF VOLUNTARY TRANSMISSION ORGANIZATIONS.
``(a) In General.--The Commission may encourage and may approve the
voluntary formation of RTOs, ISOs, or other similar organizations
approved by the Commission for the purposes of--
``(1) promoting fair, open access to electric transmission
service;
``(2) facilitating wholesale competition;
``(3) improving efficiencies in transmission grid
management;
``(4) promoting grid reliability;
``(5) removing opportunities for unduly discriminatory or
preferential transmission practices; and
``(6) providing for the efficient development of
transmission infrastructure needed to meet the growing demands
of competitive wholesale power markets.
``(b) Operational Control.--No order issued under this Act shall be
conditioned on or require a transmitting utility to transfer
operational control of jurisdictional facilities to a Transmission
Organization approved by the Commission.
``(c) Annual Audits.--(1) Each Transmission Organization shall
report to the Commission on a scheduled basis, as determined by the
Commission, the means by which the Transmission Organization will
ensure that the Transmission Organization will operate and perform the
functions of the Transmission Organization in a cost effective manner
that is also consistent with the obligations of the Transmission
Organization under the Commission-approved tariffs and agreements of
the Transmission Organization.
``(2) The Commission shall annually audit the compliance of the
Transmission Organization with the filed plan and any additional
Commission requirements concerning the performance, operations, and
cost efficiencies of the Transmission Organization.
``(3) The Commission shall establish appropriate accounting
procedures for recording costs to facilitate comparisons among
Transmission Organizations and, to the extent practicable, among other
transmitting utilities performing similar functions.''.
SEC. 1233. FEDERAL UTILITY PARTICIPATION IN TRANSMISSION ORGANIZATIONS.
(a) Definitions.--In this section--
(1) Appropriate federal regulatory authority.--The term
``appropriate Federal regulatory authority'' means--
(A) in the case of a Federal power marketing
agency, the Secretary, except that the Secretary may
designate the Administrator of a Federal power
marketing agency to act as the appropriate Federal
regulatory authority with respect to the transmission
system of the Federal power marketing agency; and
(B) in the case of the Tennessee Valley Authority,
the Board of Directors of the Tennessee Valley
Authority.
(2) Federal power marketing agency.--The term ``Federal
power marketing agency'' has the meaning given the term in
section 3 of the Federal Power Act (16 U.S.C. 796).
(3) Federal utility.--The term ``Federal utility'' means--
(A) a Federal power marketing agency; or
(B) the Tennessee Valley Authority.
(4) Transmission organization.--The term ``Transmission
Organization'' has the meaning given the term in section 3 of
the Federal Power Act (16 U.S.C. 796).
(5) Transmission system.--The term ``transmission system''
means an electric transmission facility owned, leased, or
contracted for by the United States and operated by a Federal
utility.
(b) Transfer.--The appropriate Federal regulatory authority may
enter into a contract, agreement, or other arrangement transferring
control and use of all or part of the transmission system of a Federal
utility to a Transmission Organization.
(c) Contents.--The contract, agreement, or arrangement shall
include--
(1) performance standards for operation and use of the
transmission system that the head of the Federal utility
determines are necessary or appropriate, including standards
that ensure--
(A) recovery of all of the costs and expenses of
the Federal utility related to the transmission
facilities that are the subject of the contract,
agreement, or other arrangement;
(B) consistency with existing contracts and third-
party financing arrangements; and
(C) consistency with the statutory authorities,
obligations, and limitations of the Federal utility;
(2) provisions for monitoring and oversight by the Federal
utility of the Transmission Organization's terms and conditions
of the contract, agreement, or other arrangement, including a
provision for the resolution of disputes through arbitration or
other means with the Transmission Organization or with other
participants, notwithstanding the obligations and limitations
of any other law regarding arbitration; and
(3) a provision that allows the Federal utility to withdraw
from the Transmission Organization and terminate the contract,
agreement, or other arrangement in accordance with its terms.
(d) Commission.--Neither this section, actions taken pursuant to
this section, nor any other transaction of a Federal utility
participating in a Transmission Organization shall confer on the
Commission jurisdiction or authority over--
(1) the electric generation assets, electric capacity, or
energy of the Federal utility that the Federal utility is
authorized by law to market; or
(2) the power sales activities of the Federal utility.
(e) Existing Statutory and Other Obligations.--
(1) System operation requirements.--No statutory provision
requiring or authorizing a Federal utility to transmit electric
power or to construct, operate, or maintain the transmission
system of the Federal utility prohibits a transfer of control
and use of the transmission system pursuant to, and subject to,
the requirements of this section.
(2) Other obligations.--This subsection does not--
(A) suspend, or exempt any Federal utility from,
any provision of Federal law in effect on the date of
enactment of this Act, including any requirement or
direction relating to the use of the transmission
system of the Federal utility, environmental
protection, fish and wildlife protection, flood
control, navigation, water delivery, or recreation; or
(B) authorize abrogation of any contract or treaty
obligation.
(3) Conforming amendment.--Section 311 of the Energy and
Water Development Appropriations Act, 2001 (16 U.S.C. 824n) is
repealed.
SEC. 1234. STANDARD MARKET DESIGN.
The proposed rulemaking of the Commission entitled ``Remedying
Undue Discrimination through Open Access Transmission Service and
Standard Electricity Market Design'' (Docket No. RM01-12-000) (commonly
known as ``SMD NOPR'') is terminated and shall not be reissued.
SEC. 1235. NATIVE LOAD SERVICE OBLIGATION.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1232) is amended by adding at the end the following:
``SEC. 218. NATIVE LOAD SERVICE OBLIGATION.
``(a) Definitions.--In this section:
``(1) The term `distribution utility' means an electric
utility that has a service obligation to end-users or to a
State utility or electric cooperative that, directly or
indirectly, through 1 or more additional State utilities or
electric cooperatives, provides electric service to end-users.
``(2) The term `load-serving entity' means a distribution
utility or an electric utility that has a service obligation.
``(3) The term `service obligation' means a requirement
applicable to, or the exercise of authority granted to, an
electric utility under Federal, State, or local law or under
long-term contracts to provide electric service to end-users or
to a distribution utility.
``(4) The term `State utility' means a State or any
political subdivision of a State, or any agency, authority, or
instrumentality of any 1 or more States or political
subdivisions, or a corporation that is wholly owned, directly
or indirectly, by any 1 or more of the States or political
subdivisions, competent to carry on the business of developing,
transmitting, using, or distributing power.
``(b) Meeting Service Obligations.--(1) Paragraph (2) applies to
any load-serving entity that, as of the date of enactment of this
section--
``(A) owns generation facilities, markets the output of
Federal generation facilities, or holds rights under 1 or more
wholesale contracts to purchase electric energy, for the
purpose of meeting a service obligation; and
``(B) by reason of ownership of transmission facilities, or
1 or more contracts or service agreements for firm transmission
service, holds firm transmission rights for delivery of the
output of the generation facilities or the purchased energy to
meet the service obligation.
``(2) Any load-serving entity described in paragraph (1) is
entitled to use the firm transmission rights, or, equivalent tradable
or financial transmission rights, in order to deliver the output or
purchased energy, or the output of other generating facilities or
purchased energy to the extent deliverable using the rights, to the
extent required to meet the service obligation of the load-serving
entity.
``(3)(A) To the extent that all or a portion of the service
obligation covered by the firm transmission rights or equivalent
tradable or financial transmission rights is transferred to another
load-serving entity, the successor load-serving entity shall be
entitled to use the firm transmission rights or equivalent tradable or
financial transmission rights associated with the transferred service
obligation.
``(B) Subsequent transfers to another load-serving entity, or back
to the original load-serving entity, shall be entitled to the same
rights.
``(4) The Commission shall exercise the authority of the Commission
under this Act in a manner that facilitates the planning and expansion
of transmission facilities to meet the reasonable needs of load-serving
entities to satisfy the service obligations of the load-serving
entities, and enables load-serving entities to secure firm transmission
rights (or equivalent tradable or financial rights) on a long term
basis for long term power supply arrangements made, or planned, to meet
such needs.
``(c) Allocation of Transmission Rights.--Nothing in subsections
(b)(1), (b)(2) and (b)(3) of this section shall affect any existing or
future methodology employed by a Transmission Organization for
allocating or auctioning transmission rights if such Transmission
Organization was authorized by the Commission to allocate or auction
financial transmission rights on its system as of January 1, 2005, and
the Commission determines that any future allocation or auction is
just, reasonable and not unduly discriminatory or preferential,
provided, however, that if such a Transmission Organization never
allocated financial transmission rights on its system that pertained to
a period before January 1, 2005, with respect to any application by
such Transmission Organization that would change its methodology the
Commission shall exercise its authority in a manner consistent with the
Act and that takes into account the policies expressed in subsections
(b)(1), (b)(2) and (b)(3) as applied to firm transmission rights held
by a load-serving entity as of January 1, 2005, to the extent the
associated generation ownership or power purchase arrangements remain
in effect.
``(d) Certain Transmission Rights.--The Commission may exercise
authority under this Act to make transmission rights not used to meet
an obligation covered by subsection (b) available to other entities in
a manner determined by the Commission to be just, reasonable, and not
unduly discriminatory or preferential.
``(e) Obligation to Build.--Nothing in this Act relieves a load-
serving entity from any obligation under State or local law to build
transmission or distribution facilities adequate to meet the service
obligations of the load-serving entity.
``(f) Contracts.--Nothing in this section shall provide a basis for
abrogating any contract or service agreement for firm transmission
service or rights in effect as of the date of the enactment of this
subsection. If an ISO in the Western Interconnection had allocated
financial transmission rights prior to the date of enactment of this
section but had not done so with respect to one or more load-serving
entities' firm transmission rights held under contracts to which the
preceding sentence applies (or held by reason of ownership or future
ownership of transmission facilities), such load-serving entities may
not be required, without their consent, to convert such firm
transmission rights to tradable or financial rights, except where the
load-serving entity has voluntarily joined the ISO as a participating
transmission owner (or its successor) in accordance with the ISO
tariff.
``(g) Water Pumping Facilities.--The Commission shall ensure that
any entity described in section 201(f) that owns transmission
facilities used predominately to support its own water pumping
facilities shall have, with respect to the facilities, protections for
transmission service comparable to those provided to load-serving
entities pursuant to this section.
``(h) ERCOT.--This section shall not apply within the area referred
to in section 212(k)(2)(A).
``(i) Jurisdiction.--This section does not authorize the Commission
to take any action not otherwise within the jurisdiction of the
Commission.
``(j) TVA Area.--(1) Subject to paragraphs (2) and (3), for
purposes of subsection (b)(1)(B), a load-serving entity that is located
within the service area of the Tennessee Valley Authority and that has
a firm wholesale power supply contract with the Tennessee Valley
Authority shall be considered to hold firm transmission rights for the
transmission of the power provided.
``(2) Nothing in this subsection affects the requirements of
section 212(j).
``(3) The Commission shall not issue an order on the basis of this
subsection that is contrary to the purposes of section 212(j).''.
(h) FERC Rulemaking on Long-Term Transmission Rights in Organized
Markets.--Within one year after the date of enactment of this section
and after notice and an opportunity for comment, the Commission shall
by rule or order implement subsection (b)(4) in Transmission
Organizations with organized electricity markets.
(i) Effect of Exercising Rights.--An entity that to the extent
required to meet its service obligations exercises rights described in
subsection (b) shall not be considered by such action as engaging in
undue discrimination or preference under this Act.
SEC. 1236. PROTECTION OF TRANSMISSION CONTRACTS IN THE PACIFIC
NORTHWEST.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1235) is amended by adding at the end the following:
``SEC. 219. PROTECTION OF TRANSMISSION CONTRACTS IN THE PACIFIC
NORTHWEST.
``(a) Definition of electric utility or person.--In this section,
the term `electric utility or person' means an electric utility or
person that--
``(1) as of the date of enactment of the Energy Policy Act
of 2005 holds firm transmission rights pursuant to contract or
by reason of ownership of transmission facilities; and
``(2) is located--
``(A) in the Pacific Northwest, as that region is
defined in section 3 of the Pacific Northwest Electric
Power Planning and Conservation Act (16 U.S.C. 839a);
or
``(B) in that portion of a State included in the
geographic area proposed for a regional transmission
organization in Commission Docket Number RT01-35 on the
date on which that docket was opened.
``(b) Protection of Transmission Contracts.--Nothing in this Act
confers on the Commission the authority to require an electric utility
or person to convert to tradable or financial rights--
``(1) firm transmission rights described in subsection
(a)(1); or
``(2) firm transmission rights obtained by exercising
contract or tariff rights associated with the firm transmission
rights described in subsection (a)(1).''.
Subtitle D--Transmission Rate Reform
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1236) is amended by adding at the end the following:
``SEC. 220. TRANSMISSION INFRASTRUCTURE INVESTMENT.
``(a) Rulemaking Requirement.--Not later than 1 year after the date
of enactment of this section, the Commission shall establish, by rule,
incentive-based (including performance-based) rate treatments for the
transmission of electric energy in interstate commerce by public
utilities for the purpose of benefiting consumers by ensuring
reliability and reducing the cost of delivered power by reducing
transmission congestion.
``(b) Contents.--The rule shall--
``(1) promote reliable and economically efficient
transmission and generation of electricity by promoting capital
investment in the enlargement, improvement, maintenance, and
operation of all facilities for the transmission of electric
energy in interstate commerce, regardless of the ownership of
the facilities;
``(2) provide a return on equity that attracts new
investment in transmission facilities (including related
transmission technologies);
``(3) encourage deployment of transmission technologies and
other measures to increase the capacity and efficiency of
existing transmission facilities and improve the operation of
the facilities; and
``(4) allow recovery of--
``(A) all prudently incurred costs necessary to
comply with mandatory reliability standards issued
pursuant to section 215; and
``(B) all prudently incurred costs related to
transmission infrastructure development pursuant to
section 216.
``(c) Just and Reasonable Rates.--All rates approved under the
rules adopted pursuant to this section, including any revisions to the
rules, are subject to the requirements of sections 205 and 206 that all
rates, charges, terms, and conditions be just and reasonable and not
unduly discriminatory or preferential.''.
SEC. 1242. FUNDING NEW INTERCONNECTION AND TRANSMISSION UPGRADES.
The Commission may approve a participant funding plan that
allocates costs related to transmission upgrades or new generator
interconnection, without regard to whether an applicant is a member of
a Commission-approved Transmission Organization, if the plan results in
rates that--
(1) are just and reasonable;
(2) are not unduly discriminatory or preferential; and
(3) are otherwise consistent with sections 205 and 206 of
the Federal Power Act (16 U.S.C. 824d, 824e).
Subtitle E--Amendments to PURPA
SEC. 1251. NET METERING AND ADDITIONAL STANDARDS.
(a) Adoption of Standards.--Section 111(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by
adding at the end the following:
``(11) Net metering.--Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves. For purposes of this
paragraph, the term `net metering service' means service to an
electric consumer under which electric energy generated by that
electric consumer from an eligible on-site generating facility
and delivered to the local distribution facilities may be used
to offset electric energy provided by the electric utility to
the electric consumer during the applicable billing period.
``(12) Fuel sources.--Each electric utility shall develop a
plan to minimize dependence on 1 fuel source and to ensure that
the electric energy it sells to consumers is generated using a
diverse range of fuels and technologies, including renewable
technologies.
``(13) Fossil fuel generation efficiency.--Each electric
utility shall develop and implement a 10-year plan to increase
the efficiency of its fossil fuel generation.''.
(b) Compliance.--
(1) Time limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended
by adding at the end the following:
``(3)(A) Not later than 2 years after the enactment of this
paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority) and each
nonregulated electric utility shall commence the consideration referred
to in section 111, or set a hearing date for such consideration, with
respect to each standard established by paragraphs (11) through (13) of
section 111(d).
``(B) Not later than 3 years after the date of the enactment of
this paragraph, each State regulatory authority (with respect to each
electric utility for which it has ratemaking authority), and each
nonregulated electric utility, shall complete the consideration, and
shall make the determination, referred to in section 111 with respect
to each standard established by paragraphs (11) through (13) of section
111(d).''.
(2) Failure to comply.--Section 112(c) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is
amended by adding at the end the following:
``In the case of each standard established by paragraphs (11) through
(13) of section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a reference to
the date of enactment of such paragraphs (11) through (13).''.
(3) Prior state actions.--
(A) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is
amended by adding at the end the following:
``(d) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standards established by paragraphs (11) through
(13) of section 111(d) in the case of any electric utility in a State
if, before the enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such
utility.''.
(B) Cross reference.--Section 124 of such Act (16
U.S.C. 2634) is amended by adding the following at the
end thereof: ``In the case of each standard established
by paragraphs (11) through (13) of section 111(d), the
reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference
to the date of enactment of such paragraphs (11)
through (13).''.
SEC. 1252. SMART METERING.
(a) In General.--Section 111(d) of the Public Utilities Regulatory
Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the
end the following:
``(14) Time-based metering and communications.--
``(A) Not later than 18 months after the date of
enactment of this paragraph, each electric utility
shall offer each of its customer classes, and provide
individual customers upon customer request, a time-
based rate schedule under which the rate charged by the
electric utility varies during different time periods
and reflects the variance, if any, in the utility's
costs of generating and purchasing electricity at the
wholesale level. The time-based rate schedule shall
enable the electric consumer to manage energy use and
cost through advanced metering and communications
technology.
``(B) The types of time-based rate schedules that
may be offered under the schedule referred to in
subparagraph (A) include, among others--
``(i) time-of-use pricing whereby
electricity prices are set for a specific time
period on an advance or forward basis,
typically not changing more often than twice a
year, based on the utility's cost of generating
and/or purchasing such electricity at the
wholesale level for the benefit of the
consumer. Prices paid for energy consumed
during these periods shall be pre-established
and known to consumers in advance of such
consumption, allowing them to vary their demand
and usage in response to such prices and manage
their energy costs by shifting usage to a lower
cost period or reducing their consumption
overall;
``(ii) critical peak pricing whereby time-
of-use prices are in effect except for certain
peak days, when prices may reflect the costs of
generating and/or purchasing electricity at the
wholesale level and when consumers may receive
additional discounts for reducing peak period
energy consumption;
``(iii) real-time pricing whereby
electricity prices are set for a specific time
period on an advanced or forward basis,
reflecting the utility's cost of generating
and/or purchasing electricity at the wholesale
level, and may change as often as hourly; and
``(iv) credits for consumers with large
loads who enter into pre-established peak load
reduction agreements that reduce the planned
capacity obligations of a utility.
``(C) Each electric utility subject to subparagraph
(A) shall provide each customer requesting a time-based
rate with a time-based meter capable of enabling the
utility and customer to offer and receive such rate,
respectively.
``(D) For purposes of implementing this paragraph,
any reference contained in this section to the date of
enactment of the Public Utility Regulatory Policies Act
of 1978 shall be deemed to be a reference to the date
of enactment of this paragraph.
``(E) In a State that permits third-party marketers
to sell electric energy to retail electric consumers,
such consumers shall be entitled to receive the same
time-based metering and communications device and
service as a retail electric consumer of the electric
utility.
``(F) Notwithstanding subsections (b) and (c) of
section 112, each State regulatory authority shall, not
later than 18 months after the date of enactment of
this paragraph conduct an investigation in accordance
with section 115(i) and issue a decision whether it is
appropriate to implement the standards set out in
subparagraphs (A) and (C).''.
(b) State Investigation of Demand Response and Time-Based
Metering.--Section 115 of the Public Utilities Regulatory Policies Act
of 1978 (16 U.S.C. 2625) is amended as follows:
(1) By inserting in subsection (b) after the phrase ``the
standard for time-of-day rates established by section
111(d)(3)'' the following: ``and the standard for time-based
metering and communications established by section
111(d)(14)''.
(2) By inserting in subsection (b) after the phrase ``are
likely to exceed the metering'' the following: ``and
communications''.
(3) By adding at the end the following:
``(i) Time-based metering and communications.--In making a
determination with respect to the standard established by section
111(d)(14), the investigation requirement of section 111(d)(14)(F)
shall be as follows: Each State regulatory authority shall conduct an
investigation and issue a decision whether or not it is appropriate for
electric utilities to provide and install time-based meters and
communications devices for each of their customers which enable such
customers to participate in time-based pricing rate schedules and other
demand response programs.''.
(c) Federal Assistance on Demand Response.--Section 132(a) of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642(a)) is
amended by striking ``and'' at the end of paragraph (3), striking the
period at the end of paragraph (4) and inserting ``; and'', and by
adding the following at the end thereof:
``(5) technologies, techniques, and rate-making methods
related to advanced metering and communications and the use of
these technologies, techniques and methods in demand response
programs.''.
(d) Federal Guidance.--Section 132 of the Public Utility Regulatory
Policies Act of 1978 (16 U.S.C. 2642) is amended by adding the
following at the end thereof:
``(d) Demand response.--The Secretary shall be responsible for--
``(1) educating consumers on the availability, advantages,
and benefits of advanced metering and communications
technologies, including the funding of demonstration or pilot
projects;
``(2) working with States, utilities, other energy
providers and advanced metering and communications experts to
identify and address barriers to the adoption of demand
response programs; and
``(3) not later than 180 days after the date of enactment
of the Energy Policy Act of 2005, providing Congress with a
report that identifies and quantifies the national benefits of
demand response and makes a recommendation on achieving
specific levels of such benefits by January 1, 2007.''.
(e) Demand Response and Regional Coordination.--
(1) In general.--It is the policy of the United States to
encourage States to coordinate, on a regional basis, State
energy policies to provide reliable and affordable demand
response services to the public.
(2) Technical assistance.--The Secretary shall provide
technical assistance to States and regional organizations
formed by 2 or more States to assist them in--
(A) identifying the areas with the greatest demand
response potential;
(B) identifying and resolving problems in
transmission and distribution networks, including
through the use of demand response;
(C) developing plans and programs to use demand
response to respond to peak demand or emergency needs;
and
(D) identifying specific measures consumers can
take to participate in these demand response programs.
(3) Report.--Not later than 1 year after the date of
enactment of this Act, the Commission shall prepare and publish
an annual report, by appropriate region, that assesses demand
response resources, including those available from all consumer
classes, and which identifies and reviews--
(A) saturation and penetration rate of advanced
meters and communications technologies, devices and
systems;
(B) existing demand response programs and time-
based rate programs;
(C) the annual resource contribution of demand
resources;
(D) the potential for demand response as a
quantifiable, reliable resource for regional planning
purposes;
(E) steps taken to ensure that, in regional
transmission planning and operations, demand resources
are provided equitable treatment as a quantifiable,
reliable resource relative to the resource obligations
of any load-serving entity, transmission provider, or
transmitting party; and
(F) regulatory barriers to improved customer
participation in demand response, peak reduction, and
critical period pricing programs.
(f) Federal Encouragement of Demand Response Devices.--It is the
policy of the United States that time-based pricing and other forms of
demand response, whereby electricity customers are provided with
electricity price signals and the ability to benefit by responding to
them, shall be encouraged, and the deployment of such technology and
devices that enable electricity customers to participate in such
pricing and demand response systems shall be facilitated, and
unnecessary barriers to demand response participation in energy,
capacity, and ancillary service markets shall be eliminated. It is
further the policy of the United States that the benefits of such
demand response that accrue to those not deploying such technology and
devices, but who are part of the same regional electricity entity,
shall be recognized.
(g) Time Limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by
adding at the end the following:
``(4)(A) Not later than 1 year after the enactment of this
paragraph, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority)
and each nonregulated electric utility shall commence the
consideration referred to in section 111, or set a hearing date
for such consideration, with respect to the standard
established by paragraph (14) of section 111(d).
``(B) Not later than 2 years after the date of the
enactment of this paragraph, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric utility,
shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to the
standard established by paragraph (14) of section 111(d).''.
(h) Failure To Comply.--Section 112(c) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended by
adding at the end the following:
``In the case of the standard established by paragraph (14) of section
111(d), the reference contained in this subsection to the date of
enactment of this Act shall be deemed to be a reference to the date of
enactment of such paragraph (14).''.
(i) Prior State Actions Regarding Smart Metering Standards.--
(1) In general.--Section 112 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by
adding at the end the following:
``(e) Prior State Actions.--Subsections (b) and (c) of this section
shall not apply to the standard established by paragraph (14) of
section 111(d) in the case of any electric utility in a State if,
before the enactment of this subsection--
``(1) the State has implemented for such utility the
standard concerned (or a comparable standard);
``(2) the State regulatory authority for such State or
relevant nonregulated electric utility has conducted a
proceeding to consider implementation of the standard concerned
(or a comparable standard) for such utility within the previous
3 years; or
``(3) the State legislature has voted on the implementation
of such standard (or a comparable standard) for such utility
within the previous 3 years.''.
(2) Cross reference.--Section 124 of such Act (16 U.S.C.
2634) is amended by adding the following at the end thereof:
``In the case of the standard established by paragraph (14) of
section 111(d), the reference contained in this subsection to
the date of enactment of this Act shall be deemed to be a
reference to the date of enactment of such paragraph (14).''.
SEC. 1253. COGENERATION AND SMALL POWER PRODUCTION PURCHASE AND SALE
REQUIREMENTS.
(a) Termination of Mandatory Purchase and Sale Requirements.--
Section 210 of the Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 824a-3) is amended by adding at the end the following:
``(m) Termination of Mandatory Purchase and Sale Requirements.--
``(1) Obligation to purchase.--After the date of enactment
of this subsection, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a qualifying
small power production facility under this section if the
Commission finds that the qualifying cogeneration facility or
qualifying small power production facility has
nondiscriminatory access to--
``(A)(i) independently administered, auction-based
day ahead and real time wholesale markets for the sale
of electric energy; and (ii) wholesale markets for
long-term sales of capacity and electric energy; or
``(B)(i) transmission and interconnection services
that are provided by a Commission-approved regional
transmission entity and administered pursuant to an
open access transmission tariff that affords
nondiscriminatory treatment to all customers; and (ii)
competitive wholesale markets that provide a meaningful
opportunity to sell capacity, including long-term and
short-term sales, and electric energy, including long-
term, short-term and real-time sales, to buyers other
than the utility to which the qualifying facility is
interconnected. In determining whether a meaningful
opportunity to sell exists, the Commission shall
consider, among other factors, evidence of transactions
within the relevant market; or
``(C) wholesale markets for the sale of capacity
and electric energy that are, at a minimum, of
comparable competitive quality as markets described in
subparagraphs (A) and (B).
``(2) Revised purchase and sale obligation for new
facilities.--(A) After the date of enactment of this
subsection, no electric utility shall be required pursuant to
this section to enter into a new contract or obligation to
purchase from or sell electric energy to a facility that is not
an existing qualifying cogeneration facility unless the
facility meets the criteria for qualifying cogeneration
facilities established by the Commission pursuant to the
rulemaking required by subsection (n).
``(B) For the purposes of this paragraph, the term
`existing qualifying cogeneration facility' means a facility
that--
``(i) was a qualifying cogeneration facility on the
date of enactment of subsection (m); or
``(ii) had filed with the Commission a notice of
self-certification, self recertification or an
application for Commission certification under 18
C.F.R. 292.207 prior to the date on which the
Commission issues the final rule required by subsection
(n).
``(3) Commission review.--Any electric utility may file an
application with the Commission for relief from the mandatory
purchase obligation pursuant to this subsection on a service
territory-wide basis. Such application shall set forth the
factual basis upon which relief is requested and describe why
the conditions set forth in subparagraphs (A), (B) or (C) of
paragraph (1) of this subsection have been met. After notice,
including sufficient notice to potentially affected qualifying
cogeneration facilities and qualifying small power production
facilities, and an opportunity for comment, the Commission
shall make a final determination within 90 days of such
application regarding whether the conditions set forth in
subparagraphs (A), (B) or (C) of paragraph (1) have been met.
``(4) Reinstatement of obligation to purchase.--At any time
after the Commission makes a finding under paragraph (3)
relieving an electric utility of its obligation to purchase
electric energy, a qualifying cogeneration facility, a
qualifying small power production facility, a State agency, or
any other affected person may apply to the Commission for an
order reinstating the electric utility's obligation to purchase
electric energy under this section. Such application shall set
forth the factual basis upon which the application is based and
describe why the conditions set forth in subparagraphs (A), (B)
or (C) of paragraph (1) of this subsection are no longer met.
After notice, including sufficient notice to potentially
affected utilities, and opportunity for comment, the Commission
shall issue an order within 90 days of such application
reinstating the electric utility's obligation to purchase
electric energy under this section if the Commission finds that
the conditions set forth in subparagraphs (A), (B) or (C) of
paragraph (1) which relieved the obligation to purchase, are no
longer met.
``(5) Obligation to sell.--After the date of enactment of
this subsection, no electric utility shall be required to enter
into a new contract or obligation to sell electric energy to a
qualifying cogeneration facility or a qualifying small power
production facility under this section if the Commission finds
that--
``(A) competing retail electric suppliers are
willing and able to sell and deliver electric energy to
the qualifying cogeneration facility or qualifying
small power production facility; and
``(B) the electric utility is not required by State
law to sell electric energy in its service territory.
``(6) No effect on existing rights and remedies.--Nothing
in this subsection affects the rights or remedies of any party
under any contract or obligation, in effect or pending approval
before the appropriate State regulatory authority or non-
regulated electric utility on the date of enactment of this
subsection, to purchase electric energy or capacity from or to
sell electric energy or capacity to a qualifying cogeneration
facility or qualifying small power production facility under
this Act (including the right to recover costs of purchasing
electric energy or capacity).
``(7) Recovery of costs.--(A) The Commission shall issue
and enforce such regulations as are necessary to ensure that an
electric utility that purchases electric energy or capacity
from a qualifying cogeneration facility or qualifying small
power production facility in accordance with any legally
enforceable obligation entered into or imposed under this
section recovers all prudently incurred costs associated with
the purchase.
``(B) A regulation under subparagraph (A) shall be
enforceable in accordance with the provisions of law applicable
to enforcement of regulations under the Federal Power Act (16
U.S.C. 791a et seq.).
``(n) Rulemaking for New Qualifying Facilities.--(1)(A) Not later
than 180 days after the date of enactment of this section, the
Commission shall issue a rule revising the criteria in 18 C.F.R.
292.205 for new qualifying cogeneration facilities seeking to sell
electric energy pursuant to section 210 of this Act to ensure--
``(i) that the thermal energy output of a new qualifying
cogeneration facility is used in a productive and beneficial
manner;
``(ii) the electrical, thermal, and chemical output of the
cogeneration facility is used fundamentally for industrial,
commercial, or institutional purposes and is not intended
fundamentally for sale to an electric utility, taking into
account technological, efficiency, economic, and variable
thermal energy requirements, as well as State laws applicable
to sales of electric energy from a qualifying facility to its
host facility; and
``(iii) continuing progress in the development of efficient
electric energy generating technology.
``(B) The rule issued pursuant to section (n)(1)(A) shall be
applicable only to facilities that seek to sell electric energy
pursuant to section 210 of this Act. For all other purposes, except as
specifically provided in section (m)(2)(A), qualifying facility status
shall be determined in accordance with the rules and regulations of
this Act.
``(2) Notwithstanding rule revisions under paragraph (1), the
Commission's criteria for qualifying cogeneration facilities in effect
prior to the date on which the Commission issues the final rule
required by paragraph (1) shall continue to apply to any cogeneration
facility that--
``(A) was a qualifying cogeneration facility on the date of
enactment of subsection (m), or
``(B) had filed with the Commission a notice of self-
certification, self-recertification or an application for
Commission certification under 18 C.F.R. 292.207 prior to the
date on which the Commission issues the final rule required by
paragraph (1).''.
(b) Elimination of Ownership Limitations.--
(1) Qualifying small power production facility.--Section
3(17)(C) of the Federal Power Act (16 U.S.C. 796(17)(C)) is
amended to read as follows:
``(C) `qualifying small power production facility'
means a small power production facility that the
Commission determines, by rule, meets such requirements
(including requirements respecting fuel use, fuel
efficiency, and reliability) as the Commission may, by
rule, prescribe;''.
(2) Qualifying cogeneration facility.--Section 3(18)(B) of
the Federal Power Act (16 U.S.C. 796(18)(B)) is amended to read
as follows:
``(B) `qualifying cogeneration facility' means a
cogeneration facility that the Commission determines,
by rule, meets such requirements (including
requirements respecting minimum size, fuel use, and
fuel efficiency) as the Commission may, by rule,
prescribe;''.
SEC. 1254. INTERCONNECTION.
(a) Adoption of Standards.--Section 111(d) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) (as amended by
section 1252(a)) is amended by adding at the end the following:
``(15) Interconnection.--(A) In this paragraph, the term
`interconnection service' means service to an electric consumer
by which an on-site generating facility on the premises of the
electric consumer is connected to the local distribution
facilities.
``(B)(i) Each electric utility shall make available, on
request, interconnection service to any electric consumer that
the electric utility serves.
``(ii) Interconnection services shall be made available
under clause (i) based on the standards developed by the
Institute of Electrical and Electronics Engineers, entitled
``IEEE Standard 1547 for Interconnecting Distributed Resources
with Electric Power Systems'' (or successor standards).
``(C)(i) Electric utilities shall establish agreements and
procedures providing that the interconnection services made
available under subparagraph (B) promote current best practices
of interconnection for distributed generation, including
practices stipulated in model codes adopted by associations of
State regulatory agencies.
``(ii) Any agreements and procedures established under
clause (i) shall be just and reasonable and not unduly
discriminatory or preferential.''.
(b) Compliance.--
(1) Time limitations.--Section 112(b) of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) (as amended
by section 1252(g)) is amended by adding at the end the
following:
``(5)(A) Not later than 1 year after the date of enactment
of this paragraph, each State regulatory authority (with
respect to each electric utility for which the State regulatory
authority has ratemaking authority) and each nonregulated
utility shall, with respect to the standard established by
section 111(d)(15)--
``(i) commence the consideration under section
111(a); or
``(ii) set a hearing date for the consideration.
``(B) Not later than 2 years after the date of enactment of
this paragraph, each State regulatory authority (with respect
to each electric utility for which the State regulatory
authority has ratemaking authority) and each nonregulated
electric utility shall, with respect to the standard
established by section 111(d)(15), complete the consideration
and make the determination under section 111(a).''.
(2) Failure to comply.--Section 112(c) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) (as
amended by section 1252(h)) is amended by adding at the end the
following: ``In the case of the standard established by
paragraph (15), the reference contained in this subsection to
the date of enactment of this Act shall be considered to be a
reference to the date of enactment of paragraph (15).''.
(3) Prior state actions.--
(A) In general.--Section 112(e) of the Public
Utility Regulatory Policies Act of 1978 (as added by
section 1252(i)(1)) is amended by striking ``paragraph
14'' and inserting ``paragraph (14) or (15)''.
(B) Conforming amendment.--Section 124 of the
Public Utility Regulatory Policies Act of 1978 (16
U.S.C. 2634) (as amended by section 1252(i)(2)) is
amended by adding at the end the following: ``In the
case of each standard established by section
111(d)(15), the reference contained in this section to
the date of enactment of the Act shall be considered to
be a reference to the date of enactment of paragraph
(15).''.
Subtitle F--Market Transparency, Enforcement, and Consumer Protection
SEC. 1261. MARKET TRANSPARENCY RULES.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1241) is amended by adding at the end the following:
``SEC. 221. MARKET TRANSPARENCY RULES.
``(a) In General.--The Commission may issue such rules as the
Commission considers to be appropriate to establish an electronic
information system to provide the Commission and the public with access
to such information as is necessary or appropriate to facilitate price
transparency and participation in markets for the sale in interstate
commerce of electric energy at wholesale.
``(b) Information To Be Made Available.--(1) The system under
subsection (a) shall provide, on a timely basis, information about the
availability and market price of wholesale electric energy and
transmission services to the Commission, State commissions, buyers and
sellers of wholesale electric energy, users of transmission services,
and the public.
``(2) In determining the information to be made available under the
system and the time at which to make such information available, the
Commission shall seek to ensure that consumers and competitive markets
are protected from the adverse effects of potential collusion or other
anticompetitive behaviors that can be facilitated by untimely public
disclosure of transaction-specific information.
``(c) Authority To Obtain Information.--The Commission shall have
authority to obtain information described in subsections (a) and (b)
from any electric utility or transmitting utility (including any entity
described in section 201(f)).
``(d) Exemptions.--The rules of the Commission, if adopted, shall
exempt from disclosure information that the Commission determines
would, if disclosed--
``(1) be detrimental to the operation of an effective
market; or
``(2) jeopardize system security.
``(e) Commodity Futures Trading Commission.--(1) This section shall
not affect the exclusive jurisdiction of the Commodity Futures Trading
Commission with respect to accounts, agreements, contracts, or
transactions in commodities under the Commodity Exchange Act (7 U.S.C.
1 et seq.).
``(2) Any request by the Commission for information to a designated
contract market, registered derivatives transaction execution facility,
board of trade, exchange, or market involving an account, agreement,
contract, or transaction in a commodity (including natural gas,
electricity and other energy commodities) within the exclusive
jurisdiction of the Commodity Futures Trading Commission shall be
directed to the Commodity Futures Trading Commission, which shall
cooperate in responding to any information request by the Commission.
``(f) Savings Provision.--In exercising authority under this
section, the Commission shall not--
``(1) compete with, or displace from the market place, any
price publisher (including any electronic price publisher); or
``(2) regulate price publishers (including any electronic
price publisher) or impose any requirements on the publication
of information by price publishers (including any electronic
price publisher).
``(g) ERCOT.--This section shall not apply to a transaction for the
purchase or sale of wholesale electric energy or transmission services
within the area described in section 212(k)(2)(A).''.
SEC. 1262. FALSE STATEMENTS.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1261) is amended by adding at the end the following:
``SEC. 222. PROHIBITION ON FILING FALSE INFORMATION.
``No entity (including an entity described in section 201(f)) shall
willfully and knowingly report any information relating to the price of
electricity sold at wholesale or the availability of transmission
capacity, which information the person or any other entity knew to be
false at the time of the reporting, to a Federal agency with intent to
fraudulently affect the data being compiled by the Federal agency.''.
SEC. 1263. MARKET MANIPULATION.
Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as
amended by section 1262) is amended by adding at the end the following:
``SEC. 223. PROHIBITION OF ENERGY MARKET MANIPULATION.
``It shall be unlawful for any entity (including an entity
described in section 201(f)), directly or indirectly, to use or employ,
in connection with the purchase or sale of electric energy or the
purchase or sale of transmission services subject to the jurisdiction
of the Commission, any manipulative or deceptive device or contrivance
(as those terms are used in section 10(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78j(b))), in contravention of such rules and
regulations as the Commission may prescribe as necessary or appropriate
in the public interest or for the protection of electric ratepayers.''.
SEC. 1264. ENFORCEMENT.
(a) Complaints.--Section 306 of the Federal Power Act (16 U.S.C.
825e) is amended--
(1) by inserting ``electric utility,'' after ``Any
person,''; and
(2) by inserting ``, transmitting utility,'' after
``licensee'' each place it appears.
(b) Investigations.--Section 307(a) of the Federal Power Act (16
U.S.C. 825f(a)) is amended--
(1) by inserting ``, electric utility, transmitting
utility, or other entity'' after ``person'' each place it
appears; and
(2) in the first sentence, by inserting before the period
at the end the following: ``, or in obtaining information about
the sale of electric energy at wholesale in interstate commerce
and the transmission of electric energy in interstate
commerce''.
(c) Review of Commission Orders.--Section 313(a) of the Federal
Power Act (16 U.S.C. 825l) is amended by inserting ``electric
utility,'' after ``person,'' in the first 2 places it appears and by
striking ``any person unless such person'' and inserting ``any entity
unless such entity''.
(d) Criminal Penalties.--Section 316 of the Federal Power Act (16
U.S.C. 825o) is amended--
(1) in subsection (a)--
(A) by striking ``$5,000'' and inserting
``$1,000,000''; and
(B) by striking ``two years'' and inserting ``5
years'';
(2) in subsection (b), by striking ``$500'' and inserting
``$25,000''; and
(3) by striking subsection (c).
(e) Civil Penalties.--Section 316A of the Federal Power Act (16
U.S.C. 825o-1) is amended--
(1) by striking ``section 211, 212, 213, or 214'' each
place it appears and inserting ``part II''; and
(2) in subsection (b), by striking ``$10,000'' and
inserting ``$1,000,000''.
SEC. 1265. REFUND EFFECTIVE DATE.
Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) is
amended--
(1) by striking ``the date 60 days after the filing of such
complaint nor later than 5 months after the expiration of such
60-day period'' in the second sentence and inserting ``the date
of the filing of such complaint nor later than 5 months after
the filing of such complaint'';
(2) by striking ``60 days after'' in the third sentence and
inserting ``of'';
(3) by striking ``expiration of such 60-day period'' in the
third sentence and inserting ``publication date''; and
(4) by striking the fifth sentence and inserting the
following: ``If no final decision is rendered by the conclusion
of the 180-day period commencing upon initiation of a
proceeding pursuant to this section, the Commission shall state
the reasons why it has failed to do so and shall state its best
estimate as to when it reasonably expects to make such
decision.''.
SEC. 1266. REFUND AUTHORITY.
Section 206 of the Federal Power Act (16 U.S.C. 824e) is amended by
adding at the end the following:
``(e)(1) In this subsection:
``(A) The term `short-term sale' means an agreement for the
sale of electric energy at wholesale in interstate commerce
that is for a period of 48 hours or less.
``(B) The term `applicable Commission rule' means a
Commission rule applicable to sales at wholesale by public
utilities that the Commission determines after notice and
comment should also be applicable to entities subject to this
subsection.
``(2) If an entity described in section 201(f) voluntarily makes a
short-term sale of electric energy through an organized market in which
the rates for the sale are established by Commission-approved tariff
(rather than by contract) and the sale violates the terms of the tariff
or applicable Commission rules in effect at the time of the sale, the
entity shall be subject to the refund authority of the Commission under
this section with respect to the violation.
``(3) This section shall not apply to--
``(A) any entity that sells in total (including affiliates
of the entity) less than 8,000,000 megawatt hours of
electricity per year; or
``(B) any electric cooperative.
``(4)(A) The Commission shall have refund authority under paragraph
(2) with respect to a voluntary short-term sale of electric energy by
the Bonneville Power Administration only if the sale is at an unjust
and unreasonable rate.
``(B) The Commission may order a refund under subparagraph (A) only
for short-term sales made by the Bonneville Power Administration at
rates that are higher than the highest just and reasonable rate charged
by any other entity for a short-term sale of electric energy in the
same geographic market for the same, or most nearly comparable, period
as the sale by the Bonneville Power Administration.
``(5) In the case of any Federal power marketing agency or the
Tennessee Valley Authority, the Commission shall not assert or exercise
any regulatory authority or power under paragraph (2) other than the
ordering of refunds to achieve a just and reasonable rate.''.
SEC. 1267. CONSUMER PRIVACY AND UNFAIR TRADE PRACTICES.
(a) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(2) State regulatory authority.--The term ``State
regulatory authority'' has the meaning given the term in
section 3 of the Federal Power Act (16 U.S.C. 796).
(3) Electric consumer; electric utility.--The terms
``electric consumer'' and ``electric utility'' have the
meanings given those terms in section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602).
(b) Privacy.--The Commission may issue rules protecting the privacy
of electric consumers from the disclosure of consumer information
obtained in connection with the sale or delivery of electric energy to
electric consumers.
(c) Slamming.--The Commission may issue rules prohibiting the
change of selection of an electric utility except with the informed
consent of the electric consumer or if approved by the appropriate
State regulatory authority.
(d) Cramming.--The Commission may issue rules prohibiting the sale
of goods and services to an electric consumer unless expressly
authorized by law or the electric consumer.
(e) Rulemaking.--The Commission shall proceed in accordance with
section 553 of title 5, United States Code, when prescribing a rule
under this section.
(f) State Authority.--If the Commission determines that the
regulations of a State provide equivalent or greater protection than
the protection provided under this section, the regulations of the
State shall apply in that State in lieu of the regulations issued by
the Commission under this section.
SEC. 1268. OFFICE OF CONSUMER ADVOCACY.
(a) Definitions.--In this section:
(1) Energy customer.--The term ``energy customer'' means a
residential customer or a small commercial customer that
receives products or services from a public utility or natural
gas company under the jurisdiction of the Commission.
(2) Natural gas company.--The term ``natural gas company''
has the meaning given the term in section 2 of the Natural Gas
Act (15 U.S.C. 717a), as modified by section 601(a) of the
Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
(3) Office.--The term ``Office'' means the Office of
Consumer Advocacy established by subsection (b)(1).
(4) Public utility.--The term ``public utility'' has the
meaning given the term in section 201(e) of the Federal Power
Act (16 U.S.C. 824(e)).
(5) Small commercial customer.--The term ``small commercial
customer'' means a commercial customer that has a peak demand
of not more than 1,000 kilowatts per hour.
(b) Office.--
(1) Establishment.--There is established within the
Department the Office of Consumer Advocacy.
(2) Duties.--The Office may represent the interests of
energy customers on matters concerning rates or service of
public utilities and natural gas companies under the
jurisdiction of the Commission--
(A) at hearings of the Commission;
(B) in civil actions brought in connection with any
function carried out by the Commission, except as
provided in section 518 of title 28, United States
Code; and
(C) at hearings or proceedings of other Federal
regulatory agencies and commissions.
SEC. 1269. AUTHORITY OF COURT TO PROHIBIT PERSONS FROM SERVING AS
OFFICERS, DIRECTORS, AND ENERGY TRADERS.
Section 314 of the Federal Power Act (16 U.S.C. 825m) is amended by
adding at the end the following:
``(d) In any proceedings under subsection (a), the court may
prohibit, conditionally or unconditionally, and permanently or for such
period of time as the court determines, any person who is engaged or
has engaged in practices constituting a violation of section 222 (and
related rules and regulations) from--
``(1) acting as an officer or director of an electric
utility; or
``(2) engaging in the business of purchasing or selling--
``(A) electric energy; or
``(B) transmission services subject to the
jurisdiction of the Commission.''.
SEC. 1270. RELIEF FOR EXTRAORDINARY VIOLATIONS.
(a) Application.--This section applies to any contract entered into
the Western Interconnection prior to June 20, 2001, with a seller of
wholesale electricity that the Commission has--
(1) found to have manipulated the electricity market
resulting in unjust and unreasonable rates; and
(2) revoked the seller's authority to sell any electricity
at market-based rates.
(b) Relief.--Notwithstanding section 222 of the Federal Power Act
(as added by section 1262), any provision of title 11, United States
Code, or any other provision of law, in the case of a contract
described in subsection (a), the Commission shall have exclusive
jurisdiction under the Federal Power Act (16 U.S.C. 791a et seq.) to
determine whether a requirement to make termination payments for power
not delivered by the seller, or any successor in interest of the
seller, is not permitted under a rate schedule (or contract under such
a schedule) or is otherwise unlawful on the grounds that the contract
is unjust and unreasonable or contrary to the public interest.
(c) Applicability.--This section applies to any proceeding pending
on the date of enactment of this section involving a seller described
in subsection (a) in which there is not a final, nonappealable order by
the Commission or any other jurisdiction determining the respective
rights of the seller.
Subtitle G--Repeal of PUHCA and Merger Reform
SEC. 1271. SHORT TITLE.
This subtitle may be cited as the ``Public Utility Holding Company
Act of 2005''.
SEC. 1272. DEFINITIONS.
For purposes of this subtitle:
(1) Affiliate.--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) Associate company.--The term ``associate company'' of a
company means any company in the same holding company system
with such company.
(3) Commission.--The term ``Commission'' means the Federal
Energy Regulatory Commission.
(4) Company.--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) Electric utility company.--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) Exempt wholesale generator and foreign utility
company.--The terms ``exempt wholesale generator'' and
``foreign utility company'' have the same meanings as in
sections 32 and 33, respectively, of the Public Utility Holding
Company Act of 1935 (15 U.S.C. 79z-5a, 79z-5b), as those
sections existed on the day before the effective date of this
subtitle.
(7) Gas utility company.--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) Holding company.--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 1 or more persons)
such a controlling influence over the management or
policies of any public-utility company or holding
company as to make it necessary or appropriate for the
rate protection of utility customers with respect to
rates that such person be subject to the obligations,
duties, and liabilities imposed by this subtitle upon
holding companies.
(9) Holding company system.--The term ``holding company
system'' means a holding company, together with its subsidiary
companies.
(10) Jurisdictional rates.--The term ``jurisdictional
rates'' means rates accepted or 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) Natural gas company.--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) Person.--The term ``person'' means an individual or
company.
(13) Public utility.--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) Public-utility company.--The term ``public-utility
company'' means an electric utility company or a gas utility
company.
(15) State commission.--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) Subsidiary company.--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 1 or more other persons) so as to
make it necessary for the rate protection of utility
customers with respect to rates that such person be
subject to the obligations, duties, and liabilities
imposed by this subtitle upon subsidiary companies of
holding companies.
(17) Voting security.--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. 1273. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.
The Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.) is repealed.
SEC. 1274. 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
determines are relevant to costs incurred by a public utility or
natural gas company that is an associate company of such holding
company and necessary or appropriate for the protection of utility
customers with respect to jurisdictional rates.
(b) Affiliate Companies.--Each affiliate of a holding company or of
any subsidiary company of a holding company shall maintain, and shall
make available to the Commission, such books, accounts, memoranda, and
other records with respect to any transaction with another affiliate,
as the Commission determines are 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 determines
are 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. 1275. 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 determines 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 1 or more
qualifying facilities under the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C. 2601 et seq.).
(c) Confidentiality of Information.--The production of books,
accounts, memoranda, and other records under subsection (a) shall be
subject to such terms and conditions as may be necessary and
appropriate to safeguard against unwarranted disclosure to the public
of any trade secrets or sensitive commercial information.
(d) Effect on State Law.--Nothing in this section shall preempt
applicable State law concerning the provision of books, accounts,
memoranda, and other records, or in any way limit the rights of any
State to obtain books, accounts, memoranda, and other records under any
other Federal law, contract, or otherwise.
(e) Court Jurisdiction.--Any United States district court located
in the State in which the State commission referred to in subsection
(a) is located shall have jurisdiction to enforce compliance with this
section.
SEC. 1276. EXEMPTION AUTHORITY.
(a) Rulemaking.--Not later than 90 days after the effective date of
this subtitle, the Commission shall issue a final rule to exempt from
the requirements of section 1274 (relating to Federal access to books
and records) any person that is a holding company, solely with respect
to 1 or more--
(1) qualifying facilities under the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
(2) exempt wholesale generators; or
(3) foreign utility companies.
(b) Other Authority.--The Commission shall exempt a person or
transaction from the requirements of section 1274 (relating to Federal
access to books and records) if, upon application or upon the motion of
the Commission--
(1) the Commission finds that the books, accounts,
memoranda, and other records of any person are not relevant to
the jurisdictional rates of a public utility or natural gas
company; or
(2) the Commission finds that any class of transactions is
not relevant to the jurisdictional rates of a public utility or
natural gas company.
SEC. 1277. AFFILIATE TRANSACTIONS.
(a) Commission Authority Unaffected.--Nothing in this subtitle
shall limit the authority of the Commission under the Federal Power Act
(16 U.S.C. 791a et seq.) to require that jurisdictional rates are just
and reasonable, including the ability to deny or approve the pass
through of costs, the prevention of cross-subsidization, and the
issuance of such rules and regulations as are necessary or appropriate
for the protection of utility consumers.
(b) Recovery of Costs.--Nothing in this subtitle shall preclude the
Commission or a State commission from exercising its jurisdiction under
otherwise applicable law to determine whether a public-utility company,
public utility, or natural gas company may recover in rates any costs
of an activity performed by an associate company, or any costs of goods
or services acquired by such public-utility company from an associate
company.
SEC. 1278. APPLICABILITY.
Except as otherwise specifically provided in this subtitle, no
provision of this subtitle shall apply to, or be deemed to include--
(1) the United States;
(2) a State or any political subdivision of a State;
(3) any foreign governmental authority not operating in the
United States;
(4) any agency, authority, or instrumentality of any entity
referred to in paragraph (1), (2), or (3); or
(5) any officer, agent, or employee of any entity referred
to in paragraph (1), (2), (3), or (4) acting as such in the
course of his or her official duty.
SEC. 1279. 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. 1280. ENFORCEMENT.
The Commission shall have the same powers as set forth in sections
306 through 317 of the Federal Power Act (16 U.S.C. 825e-825p) to
enforce the provisions of this subtitle.
SEC. 1281. SAVINGS PROVISIONS.
(a) In General.--Nothing in this subtitle, or otherwise in the
Public Utility Holding Company Act of 1935, or rules, regulations, or
orders thereunder, 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 date of enactment of this Act, if that
person continues to comply with the terms (other than an expiration
date or termination date) of any such authorization, whether by rule or
by order.
(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.) or the Natural Gas Act (15 U.S.C. 717 et seq.).
SEC. 1282. IMPLEMENTATION.
Not later than 4 months after the date of enactment of this
subtitle, the Commission shall--
(1) promulgate such regulations as may be necessary or
appropriate to implement this subtitle (other than section
1275, relating to State access to books and records); 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. 1283. 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. 1284. EFFECTIVE DATE.
(a) In General.--Except for section 1282 (relating to
implementation), this subtitle shall take effect 6 months after the
date of enactment of this subtitle.
(b) Compliance With Certain Rules.--If the Commission approves and
makes effective any final rulemaking modifying the standards of conduct
governing entities that own, operate, or control facilities for
transmission of electricity in interstate commerce or transportation of
natural gas in interstate commerce prior to the effective date of this
subtitle, any action taken by a public-utility company or utility
holding company to comply with the requirements of such rulemaking
shall not subject such public-utility company or utility holding
company to any regulatory requirement applicable to a holding company
under the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et
seq.).
SEC. 1285. SERVICE ALLOCATION.
(a) FERC Review.--In the case of non-power goods or administrative
or management services provided by an associate company organized
specifically for the purpose of providing such goods or services to any
public utility in the same holding company system, at the election of
the system or a State commission having jurisdiction over the public
utility, the Commission, after the effective date of this subtitle,
shall review and authorize the allocation of the costs for such goods
or services to the extent relevant to that associate company in order
to assure that each allocation is appropriate for the protection of
investors and consumers of such public utility.
(b) Cost Allocation.--Nothing in this section shall preclude the
Commission or a State commission from exercising its jurisdiction under
other applicable law with respect to the review or authorization of any
costs allocated to a public utility in a holding company system located
in the affected State as a result of the acquisition of non-power goods
or administrative and management services by such public utility from
an associate company organized specifically for that purpose.
(c) Rules.--Not later than 6 months after the date of enactment of
this Act, the Commission shall issue rules (which rules shall be
effective no earlier than the effective date of this subtitle) to
exempt from the requirements of this section any company in a holding
company system whose public utility operations are confined
substantially to a single State and any other class of transactions
that the Commission finds is not relevant to the jurisdictional rates
of a public utility.
(d) Public Utility.--As used in this section, the term ``public
utility'' has the meaning given that term in section 201(e) of the
Federal Power Act.
SEC. 1286. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such funds as may be
necessary to carry out this subtitle.
SEC. 1287. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.
(a) Conflict of Jurisdiction.--Section 318 of the Federal Power Act
(16 U.S.C. 825q) is repealed.
(b) Definitions..--(1) Section 201(g)(5) of the Federal Power Act
(16 U.S.C. 824(g)(5)) is amended by striking ``1935'' and inserting
``2005''.
(2) Section 214 of the Federal Power Act (16 U.S.C. 824m) is
amended by striking ``1935'' and inserting ``2005''.
SEC. 1288. MERGER REVIEW REFORM.
(a) In General.--Section 203(a) of the Federal Power Act (16 U.S.C.
824b(a)) is amended to read as follows:
``(a)(1) No public utility shall, without first having secured an
order of the Commission authorizing it to do so--
``(A) sell, lease, or otherwise dispose of the
whole of its facilities subject to the jurisdiction of
the Commission, or any part thereof of a value in
excess of $10,000,000;
``(B) merge or consolidate, directly or indirectly,
such facilities or any part thereof with those of any
other person, by any means whatsoever;
``(C) purchase, acquire, or take any security with
a value in excess of $10,000,000 of any other public
utility; or
``(D) purchase, lease, or otherwise acquire an
existing generation facility--
``(i) that has a value in excess of
$10,000,000; and
``(ii) that is used for interstate
wholesale sales and over which the Commission
has jurisdiction for ratemaking purposes.
``(2) No holding company in a holding company system that
includes a transmitting utility or an electric utility shall
purchase, acquire, or take any security with a value in excess
of $10,000,000 of, or, by any means whatsoever, directly or
indirectly, merge or consolidate with, a transmitting utility,
an electric utility company, or a gas utility company, or a
holding company in a holding company system that includes a
transmitting utility, an electric utility company, or a gas
utility company with a value in excess of $10,000,000 without
first having secured an order of the Commission authorizing it
to do so.
``(3) Upon receipt of an application for such approval the
Commission shall give reasonable notice in writing to the
Governor and State commission of each of the States in which
the physical property affected, or any part thereof, is
situated, and to such other persons as it may deem advisable.
``(4) After notice and opportunity for hearing, the
Commission shall approve the proposed disposition,
consolidation, acquisition, or change in control, if it finds
that the proposed transaction--
``(A) will be consistent with the public interest,
taking into account the effect of the transaction on
competition in the electricity markets, electric rates,
and effective regulation; and
``(B) shall not result in cross-subsidization of a
non-utility associate company or the pledge or
encumbrance of utility assets for the benefit of an
associate company, unless the Commission determines
that the cross-subsidization, pledge, or encumbrance
would not be harmful.
``(5) The Commission shall, by rule, adopt procedures for
the expeditious consideration of applications for the approval
of dispositions, consolidations, or acquisitions, under this
section. Such rules shall identify classes of transactions, or
specify criteria for transactions, that normally meet the
standards established in paragraph (4). The Commission shall
provide expedited review for such transactions. The Commission
shall grant or deny any other application for approval of a
transaction not later than 180 days after the application is
filed. If the Commission does not act within 180 days, such
application shall be deemed granted unless the Commission
finds, based on good cause, that further consideration is
required to determine whether the proposed transaction meets
the standards of paragraph (4) and issues an order tolling the
time for acting on the application for not more than 180 days,
at the end of which additional period the Commission shall
grant or deny the application.
``(6) For purposes of this subsection, the terms `associate
company', `holding company', and `holding company system' have
the meaning given those terms in the Public Utility Holding
Company Act of 2005.''.
(b) Effective Date.--The amendments made by this section shall take
effect 6 months after the date of enactment of this Act.
Subtitle H--Definitions
SEC. 1291. DEFINITIONS.
(a) Commission.--In this title, the term ``Commission'' means the
Federal Energy Regulatory Commission.
(b) Amendment.--Section 3 of the Federal Power Act (16 U.S.C. 796)
is amended--
(1) by striking paragraphs (22) and (23) and inserting the
following:
``(22) Electric utility.--(A) The term `electric utility'
means a person or Federal or State agency (including an entity
described in section 201(f)) that sells electric energy.
``(B) The term `electric utility' includes the Tennessee
Valley Authority and each Federal power marketing
administration.
``(23) Transmitting utility.--The term `transmitting
utility' means an entity (including an entity described in
section 201(f)) that owns, operates, or controls facilities
used for the transmission of electric energy--
``(A) in interstate commerce;
``(B) for the sale of electric energy at
wholesale.''; and
(2) by adding at the end the following:
``(26) Electric cooperative.--The term `electric
cooperative' means a cooperatively owned electric utility.
``(27) RTO.--The term `Regional Transmission Organization'
or `RTO' means an entity of sufficient regional scope approved
by the Commission--
``(A) to exercise operational or functional control
of facilities used for the transmission of electric
energy in interstate commerce; and
``(B) to ensure nondiscriminatory access to the
facilities.
``(28) ISO.--The term `Independent System Operator' or
`ISO' means an entity approved by the Commission--
``(A) to exercise operational or functional control
of facilities used for the transmission of electric
energy in interstate commerce; and
``(B) to ensure nondiscriminatory access to the
facilities.
``(29) Transmission organization.--The term `Transmission
Organization' means a Regional Transmission Organization,
Independent System Operator, independent transmission provider,
or other transmission organization finally approved by the
Commission for the operation of transmission facilities.''.
(c) Applicability.--Section 201(f) of the Federal Power Act (16
U.S.C. 824(f)) is amended by striking ``political subdivision of a
state,'' and inserting ``political subdivision of a State, an electric
cooperative that receives financing under the Rural Electrification Act
of 1936 (7 U.S.C. 901 et seq.) or that sells less than 4,000,000
megawatt hours of electricity per year,''.
SEC. 1292. ENERGY POLICY AND CONSERVATION TECHNICAL CORRECTION.
Section 609(c)(4) of the Public Utility Regulatory Policies Act of
1978 (as added by section 291) is amended by striking ``of 1954 (42
U.S.C. 6303)'' and inserting ``(42 U.S.C. 6303(d))''.
Subtitle I--Technical and Conforming Amendments
SEC. 1295. CONFORMING AMENDMENTS.
(a) Section 201 of the Federal Power Act (16 U.S.C. 824) is
amended--
(1) in subsection (b)(2)--
(A) in the first sentence--
(i) by striking ``The'' and inserting
``Notwithstanding section 201(f), the''; and
(ii) by striking ``210, 211, and 212'' and
inserting ``203(a)(2), 206(e), 210, 211, 211A,
212, 215, 216, 217, 218, 219, 220, 221, 222,
and 223''; and
(B) in the second sentence--
(i) by inserting ``or rule'' after ``any
order''; and
(ii) by striking ``210 or 211'' and
inserting ``203(a)(2), 206(e), 210, 211, 211A,
212, 215, 216, 217, 218, 219, 220, 221, 222, or
223''; and
(2) in subsection (e), by striking ``210, 211, or 212'' and
inserting ``206(e), 206(f), 210, 211, 211A, 212, 215, 216, 217,
218, 219, 220, 221, 222, or 223''.
(b) Section 206 of the Federal Power Act (16 U.S.C. 824e) is
amended--
(1) in the first sentence of subsection (a), by striking
``hearing had'' and inserting ``hearing held''; and
(2) in the seventh sentence of subsection (b), by striking
``the public utility to make''.
(c) Section 211 of the Federal Power Act (16 U.S.C. 824j) is
amended--
(1) in subsection (c)--
(A) by striking ``(2)'';
(B) by striking ``(A)'' and inserting ``(1)''
(C) by striking ``(B)'' and inserting ``(2)''; and
(D) by striking ``termination of modification'' and
inserting ``termination or modification''; and
(2) in the second sentence of subsection (d)(1), by
striking ``electric utility'' the second place it appears and
inserting ``transmitting utility''.
(d) Section 315(c) of the Federal Power Act (16 U.S.C. 825n(c)) is
amended by striking ``subsection'' and inserting ``section''.
TITLE XIII--STUDIES
SEC. 1301. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL BUILDINGS.
(a) In General.--The Architect of the Capitol, as part of the
process of updating the Master Plan Study for the Capitol complex,
shall--
(A) carry out a study to evaluate the energy
infrastructure of the Capitol complex to determine how
to augment the infrastructure to become more energy
efficient--
(i) by using unconventional and renewable
energy resources;
(ii) by--
(I) incorporating new technologies
to implement effective green building
solutions;
(II) adopting computer-based
building management systems; and
(III) recommending strategies based
on end-user behavioral changes to
implement low-cost environmental gains;
and
(iii) in a manner that would enable the
Capitol complex to have reliable utility
service in the event of power fluctuations,
shortages, or outages;
(B) carry out a study to explore the feasibility of
installing energy and water conservation measures on
the rooftop of the Dirksen Senate Office Building,
including the area directly above the food service
facilities in the center of the building, including the
installation of--
(i) a vegetative covering area, using
native species to the maximum extent
practicable, to--
(I) insulate and increase the
energy efficiency of the building;
(II) reduce precipitation runoff
and conserve water for landscaping or
other uses;
(III) increase, and provide more
efficient use of, available outdoor
space through management of the rooftop
of the center of the building as a park
or garden area for occupants of the
building; and
(IV) improve the aesthetics of the
building; and
(ii) onsite renewable energy and other
state-of-the-art technologies to--
(I) improve the energy efficiency
and energy security of the building or
the Capitol complex by providing
additional or backup sources of power
in the event of a power shortage or
other emergency;
(II) reduce the use of resources by
the building; or
(III) enhance worker productivity;
and
(C) not later than 180 days after the date of
enactment of this Act, submit to Congress a report
describing the findings and recommendations of the
study under subparagraph (B).
(b) Authorization of Appropriations.--There is authorized to be
appropriated to the Architect of the Capitol to carry out this section
$2,000,000 for each of fiscal years 2006 through 2010.
SEC. 1302. INCREASED HYDROELECTRIC GENERATION AT EXISTING FEDERAL
FACILITIES.
(a) Study.--
(1) In general.--The Secretary and the Secretary of the
Interior, in consultation with the Secretary of the Army, shall
conduct a study of the potential for increasing electric power
production capability, in accordance with applicable law, at
federally owned or operated water regulation, storage, and
conveyance facilities.
(2) Contents.--The study under paragraph (1) shall include
an identification and detailed description of each facility
that is capable, with or without modification, of producing
additional hydroelectric power, including an estimate of the
potential of the facility to generate hydroelectric power.
(b) Report.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Secretaries shall submit to the
Committee on Energy and the Committee on Commerce, Resources,
Transportation and Infrastructure of the House of
Representatives, and the Committee on Energy and Natural
Resources of the Senate, a report describing the findings,
conclusions, and recommendations of the study under subsection
(a).
(2) Inclusions.--The report under paragraph (1) shall
include--
(A) each identification, description, and estimate
under subsection (a)(2);
(B) a description of any activity that is conducted
or under consideration, or that could be considered, to
produce additional hydroelectric power at an identified
facility;
(C) a summary of actions taken by the Secretaries
before the date on which the study was completed to
produce additional hydroelectric power at an identified
facility;
(D) a calculation of--
(i) the costs of installing, upgrading,
modifying, or taking any other action relating
to, equipment to produce additional
hydroelectric power at an identified facility;
and
(ii) the level of involvement of Federal
power customers in the determination of the
costs;
(E) a description of any benefit to be achieved by
an installation, upgrade, modification, or other action
under subparagraph (D), including a quantified estimate
of any additional energy or capacity produced at an
identified facility;
(F) a description of any action that is planned, is
being carried out on the date on which the report is
submitted, or might reasonably be considered to
increase hydroelectric power production by replacing
turbine runners, upgrading or rewinding generators, or
constructing pumped storage facilities;
(G) a description of the effect of increased
hydroelectric power production on--
(i) irrigation;
(ii) fish;
(iii) wildlife;
(iv) Indian land;
(v) river health;
(vi) water quality;
(vii) navigation;
(viii) recreation;
(ix) fishing; and
(x) flood control; and
(H) any additional recommendations of the
Secretaries to increase hydroelectric power production,
and reduce costs and improve efficiency, in accordance
with applicable law, at federally owned or operated
water regulation, storage, and conveyance facilities.
SEC. 1303. ALASKA NATURAL GAS PIPELINE.
Not later than 180 days after the date of enactment of this Act,
and every 180 days thereafter until the Alaska natural gas pipeline
commences operation, the Federal Energy Regulatory Commission shall
submit to Congress a report describing--
(1) the progress made in licensing and constructing the
pipeline; and
(2) any issue impeding that progress.
SEC. 1304. RENEWABLE ENERGY ON FEDERAL LAND.
(a) National Academy of Sciences Study.--Not later than 90 days
after the date of enactment of this Act, the Secretary of the Interior
shall enter into a contract with the National Academy of Sciences under
which the National Academy of Sciences shall--
(1) study the potential of developing wind, solar, and
ocean energy resources (including tidal, wave, and thermal
energy) on Federal land available for those uses under current
law and the outer Continental Shelf;
(2) assess any Federal law (including regulations) relating
to the development of those resources that is in existence on
the date of enactment of this Act; and
(3) recommend statutory and regulatory mechanisms for
developing those resources.
(b) Submission to Congress.--Not later than 2 years after the date
of enactment of this Act, the Secretary of the Interior shall submit to
Congress the results of the study under subsection (a).
SEC. 1305. COAL BED METHANE STUDY.
(a) Study.--
(1) In general.--The Secretary of the Interior, in
consultation with the Administrator of the Environmental
Protection Agency, shall enter into an arrangement under which
the National Academy of Sciences shall conduct a study on the
effect of coalbed natural gas production on surface and ground
water resources, including ground water aquifiers, in the
States of Montana, Wyoming, Colorado, New Mexico, North Dakota,
and Utah.
(2) Matters to be addressed.--The study shall address the
effectiveness of--
(A) the management of coal bed methane produced
water;
(B) the use of best management practices; and
(C) various production techniques for coal bed
methane natural gas in minimizing impacts on water
resources.
(b) Data Analysis.--The study shall analyze available hydrologic,
geologic and water quality data, along with--
(1) production techniques, produced water management
techniques, best management practices, and other factors that
can mitigate effects of coal bed methane development;
(2) the costs associated with mitigation techniques;
(3) effects on surface or ground water resources, including
drinking water, associated with surface or subsurface disposal
of waters produced during extraction of coal bed methane; and
(4) any other significant effects on surface or ground
water resources associated with production of coal-bed methane.
(c) Recommendations.--The study shall analyze the effectiveness of
current mitigation practices of coal bed methane produced water
handling in relation to existing Federal and State laws and
regulations, and make recommendations as to changes, if any, to Federal
law necessary to address adverse impacts to surface or ground water
resources associated with coal bed methane development.
(d) Completion of Study.--The National Academy of Sciences shall
submit the findings and recommendations of the study to the Secretary
of the Interior and the Administrator of the Environmental Protection
Agency within 12 months after the date of enactment of this Act, and
shall upon completion make the results of the study available to the
public.
(e) Report to Congress.--The Secretary of the Interior and the
Administrator of the Environmental Protection Agency, after consulting
with States, shall report to the Congress within 6 months after
receiving the results of the study on--
(1) the findings and recommendations of the study;
(2) the agreement or disagreement of the Secretary of the
Interior and the Administrator of the Environmental Protection
Agency with each of its findings and recommendations; and
(3) any recommended changes in funding to address the
effects of coal bed methane production on surface and ground
water resources.
SEC. 1306. BACKUP FUEL CAPABILITY STUDY.
(a) Study.--
(1) In general.--The Secretary shall conduct a study of the
effect of obtaining and maintaining liquid and other fuel
backup capability at--
(A) gas-fired power generation facilities; and
(B) other gas-fired industrial facilities.
(2) Contents.--The study under paragraph (1) shall
address--
(A) the costs and benefits of adding a different
fuel capability to a power gas-fired power generating
or industrial facility, taking into consideration
regional differences;
(B) methods of the Federal Government and State
governments to encourage gas-fired power generators and
industries to develop the capability to power the
facilities using a backup fuel;
(C) the effect on the supply and cost of natural
gas of--
(i) a balanced portfolio of fuel choices in
power generation and industrial applications;
and
(ii) State regulations that permit agencies
in the State to carry out policies that
encourage the use of other backup fuels in gas-
fired power generation; and
(D) changes required in the Clean Air Act (42
U.S.C. 7401 et seq.) to allow natural gas generators to
add clean backup fuel capabilities.
(b) Report to Congress.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to Congress a report
on the results of the study under subsection (a), including
recommendations regarding future activity of the Federal Government
relating to backup fuel capability.
SEC. 1307. INDIAN LAND RIGHTS-OF-WAY.
(a) Study.--
(1) In general.--The Secretary and the Secretary of the
Interior (referred to in this section as the ``Secretaries'')
shall jointly conduct a study of issues regarding energy
rights-of-way on tribal land (as defined in section 2601 of the
Energy Policy Act of 1992 (as amended by section 503))
(referred to in this section as ``tribal land'').
(2) Consultation.--In conducting the study under paragraph
(1), the Secretaries shall consult with Indian tribes, the
energy industry, appropriate governmental entities, and
affected businesses and consumers.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretaries shall submit to Congress a report on the
findings of the study, including--
(1) an analysis of historic rates of compensation paid for
energy rights-of-way on tribal land;
(2) recommendations for appropriate standards and
procedures for determining fair and appropriate compensation to
Indian tribes for grants, expansions, and renewals of energy
rights-of-way on tribal land;
(3) an assessment of the tribal self-determination and
sovereignty interests implicated by applications for the grant,
expansion, or renewal of energy rights-of-way on tribal land;
and
(4) an analysis of relevant national energy transportation
policies relating to grants, expansions, and renewals of energy
rights-of-way on tribal land.
SEC. 1308. REVIEW OF ENERGY POLICY ACT OF 1992 PROGRAMS.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall complete a study to
determine the effect that titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.) have had during the period
beginning on the date of enactment of those titles and ending on the
date on which the study begins on--
(1) the development of alternative fueled vehicle
technology;
(2) the availability of that technology in the market; and
(3) the cost of alternative fueled vehicles.
(b) Topics.--In conducting the study under subsection (a), the
Secretary shall identify--
(1) the number of alternative fueled vehicles acquired by
fleets or covered persons required to acquire alternative
fueled vehicles;
(2) the quantity, by type, of alternative fuel used in
alternative fueled vehicles acquired by fleets or covered
persons;
(3) the quantity of petroleum displaced by the use of
alternative fuels in alternative fueled vehicles acquired by
fleets or covered persons;
(4) the direct and indirect costs of compliance with
requirements under titles III, IV, and V of the Energy Policy
Act of 1992 (42 U.S.C. 13211 et seq.), including--
(A) vehicle acquisition requirements imposed on
fleets or covered persons;
(B) administrative and recordkeeping expenses;
(C) fuel and fuel infrastructure costs;
(D) associated training and employee expenses; and
(E) any other factors or expenses the Secretary
determines to be necessary to compile reliable
estimates of the overall costs and benefits of
complying with programs under those titles for fleets,
covered persons, and the national economy;
(5) the existence of obstacles preventing compliance with
vehicle acquisition requirements and increased use of
alternative fuel in alternative fueled vehicles acquired by
fleets or covered persons; and
(6) the projected impact of amendments to the Energy Policy
Act of 1992 made by this Act.
(c) Report.--On the date on which the study under subsection (a) is
completed, the Secretary shall submit to Congress a report that--
(1) describes the results of the study; and
(2) includes any recommendations of the Secretary for
legislative or administrative changes concerning the
alternative fueled vehicle requirements under titles III, IV
and V of the Energy Policy Act of 1992 (42 U.S.C. 13211 et
seq.).
SEC. 1309. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF FUEL FOR
AUTOMOBILES.
(a) Study.--
(1) In general.--Not later than 30 days after the date of
the enactment of this Act, the Administrator of the National
Highway Traffic Safety Administration shall conduct a study of
the feasibility and effects of reducing, by a significant
percentage, by model year 2012, the amount of fuel consumed by
automobiles.
(2) Inclusions.--The study under paragraph (1) shall
include an examination of--
(A) the Federal policy of establishing average fuel
economy standards for automobiles and requiring each
automobile manufacturer to comply with average fuel
economy standards that apply to the automobiles the
manufacturer produces (including recommendations of
alternatives to that policy);
(B) methods by which automobile manufacturers could
contribute toward achieving the reduction described in
paragraph (1);
(C) the potential of using fuel cell technology in
motor vehicles to determine the extent to which fuel
cell technology contributes to achieving the reduction
described in paragraph (1); and
(D) the effects of the reduction described in
paragraph (1) on--
(i) gasoline supplies;
(ii) the automobile industry, including
sales of automobiles manufactured in the United
States;
(iii) motor vehicle safety;
(iv) air quality; and
(v) the consumer price for light duty
trucks typically purchased for agricultural
purposes, including by providing estimates for
price differences for the years 2008 through
2012, comparing--
(I) light duty truck fuel economy
if no legislative changes are made to
average fuel economy standards; to
(II) light duty truck fuel economy
under the reduction described in
paragraph (1).
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Administrator shall submit to Congress a report on the
findings, conclusions, and recommendations of the study under
subsection (a).
SEC. 1310. HYBRID DISTRIBUTED POWER SYSTEMS.
Not later than 1 year after the date of enactment of this Act, the
Secretary shall develop, and submit to Congress a report on, a strategy
for a comprehensive research, development, demonstration, and
commercial application program to develop hybrid distributed power
systems that combine--
(1) 1 or more renewable electric power generation
technologies of 10 megawatts or less located near the site of
electric energy use; and
(2) nonintermittent electric power generation technologies
suitable for use in a distributed power system.
SEC. 1311. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.
Not later than 2 years after the date of enactment of this section,
the Secretary shall transmit to Congress a report that--
(1) identifies any policies or procedures of a contractor
operating a National Laboratory or single-purpose research
facility that create disincentives to the temporary or
permanent transfer of scientific and technical personnel among
the contractor-operated National Laboratories or contractor-
operated single-purpose research facilities; and
(2) provides recommendations for improving interlaboratory
exchange of scientific and technical personnel.
SEC. 1312. NATIONAL ACADEMY OF SCIENCES REPORT.
Not later than 90 days after the date of enactment of this Act, the
Secretary shall enter into an arrangement with the National Academy of
Sciences for the Academy to--
(1) conduct a study on--
(A) the obstacles to accelerating the research,
development, demonstration, and commercial application
cycle for energy technology; and
(B) the adequacy of Department policies and
procedures for, and oversight of, technology transfer-
related disputes between contractors of the Department
and the private sector; and
(2) report to Congress on recommendations developed as a
result of the study.
SEC. 1313. REPORT ON RESEARCH AND DEVELOPMENT PROGRAM EVALUATION
METHODOLOGIES.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall enter into appropriate
arrangements with the National Academy of Sciences to investigate and
report on the scientific and technical merits of any evaluation
methodology currently in use or proposed for use in relation to the
scientific and technical programs of the Department by the Secretary or
other Federal official.
(b) Report.--Not later than 180 days after receiving the report of
the National Academy of Sciences, the Secretary shall submit to
Congress a report, along with any other views or plans of the Secretary
with respect to the future use of the evaluation methodology.
SEC. 1314. TRANSMISSION SYSTEM MONITORING STUDY.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary and the Chairperson of the Federal
Energy Regulatory Commission shall conduct a study, and submit to
Congress a report, on any action the Secretary determines to be
necessary to establish a system that makes available to all
transmission system owners and regional transmission organizations in
the Eastern and Western Interconnections real-time information on the
functional status of all transmission lines within those
Interconnections.
(b) Inclusions.--The study under this section shall include--
(1) an assessment of any technical method of implementing
the information transmission system described in subsection
(a); and
(2) an identification of any action the Secretary and the
Chairperson shall carry out to implement the information
transmission system.
SEC. 1315. INTERAGENCY REVIEW OF COMPETITION IN THE WHOLESALE AND
RETAIL MARKETS FOR ELECTRIC ENERGY.
(a) Task Force.--There is established an inter-agency task force,
to be known as the ``Electric Energy Market Competition Task Force''
(referred to in this section as the ``task force''), consisting of 5
members--
(1) 1 of whom shall be an employee of the Department of
Justice, to be appointed by the Attorney General of the United
States;
(2) 1 of whom shall be an employee of the Federal Energy
Regulatory Commission, to be appointed by the Chairperson of
that Commission;
(3) 1 of whom shall be an employee of the Federal Trade
Commission, to be appointed by the Chairperson of that
Commission;
(4) 1 of whom shall be an employee of the Department, to be
appointed by the Secretary; and
(5) 1 of whom shall be an employee of the Rural Utilities
Service, to be appointed by the Secretary of Agriculture.
(b) Study and Report.--
(1) Study.--The task force shall conduct a study and
analysis of competition within the wholesale and retail market
for electric energy in the United States.
(2) Report.--
(A) Final report.--Not later than 1 year after the
date of enactment of this Act, the task force shall
submit to Congress a final report on the findings of
the task force under paragraph (1).
(B) Public comment.--Not later than the date that
is 60 days before a final report is submitted to
Congress under subparagraph (A), the task force shall--
(i) publish in the Federal Register a draft
of the report; and
(ii) provide an opportunity for public
comment on the report.
(c) Consultation.--In conducting the study under subsection (b),
the task force shall consult with and solicit comments from any
advisory entity of the task force, the States, representatives of the
electric power industry, and the public.
SEC. 1316. STUDY ON THE BENEFITS OF ECONOMIC DISPATCH.
(a) Definition of Economic Dispatch.--In this section, the term
``economic dispatch'' means the operation of a generation facility to
produce energy at the lowest cost in order to reliably serve consumers,
taking into consideration any operational limit of a generation or
transmission facility.
(b) Study.--The Secretary, in coordination and consultation with
the States, shall conduct a study of--
(1) the procedures currently used by electric utilities to
carry out economic dispatch;
(2) possible revisions to those procedures to improve the
ability of nonutility generation resources to offer the output
of the resources for sale for inclusion in economic dispatch;
and
(3) the potential benefits to residential, commercial, and
industrial electricity consumers, nationally and in each State,
of revising economic dispatch procedures to improve the ability
of nonutility generation resources to offer the output of the
resources for inclusion in economic dispatch.
(c) Report to Congress and the States.--Not later than 90 days
after the date of enactment of this Act, and annually thereafter, the
Secretary shall submit to Congress and each State a report describing
the results of the study under subsection (b), including
recommendations of the Secretary for such legislative and
administrative actions as the Secretary determines to be appropriate.
SEC. 1317. STUDY OF RAPID ELECTRICAL GRID RESTORATION.
(a) Study.--
(1) In general.--The Secretary shall conduct a study of the
benefits of using mobile transformers and mobile substations to
rapidly restore electrical service to areas subjected to
blackouts as a result of--
(A) equipment failure;
(B) natural disasters;
(C) acts of terrorism; or
(D) war.
(2) Contents.--The study under paragraph (1) shall contain
an analysis of--
(A) the feasibility of using mobile transformers
and mobile substations to reduce dependence on foreign
entities for key elements of the electrical grid system
of the United States;
(B) the feasibility of using mobile transformers
and mobile substations to rapidly restore electrical
power to--
(i) military bases;
(ii) the Federal Government;
(iii) communications industries;
(iv) first responders; and
(v) other critical infrastructures, as
determined by the Secretary;
(C) the quantity of mobile transformers and mobile
substations necessary--
(i) to eliminate dependence on foreign
sources for key electrical grid components in
the United States;
(ii) to rapidly deploy technology to fully
restore full electrical service to prioritized
Governmental functions; and
(iii) to identify manufacturing sources in
existence on the date of enactment of this Act
that have previously manufactured specialized
mobile transformer or mobile substation
products for Federal agencies.
(b) Report.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to the
President and Congress a report on the study under subsection
(a).
(2) Inclusion.--The report shall include a description of
the results of the analysis under subsection (a)(2).
SEC. 1318. STUDY OF DISTRIBUTED GENERATION.
(a) Study.--
(1) In general.--
(A) Potential benefits.--The Secretary, in
consultation with the Federal Energy Regulatory
Commission, shall conduct a study of the potential
benefits of cogeneration and small power production.
(B) Recipients.--The benefits described in
subparagraph (A) include benefits that are received
directly or indirectly by--
(i) an electricity distribution or
transmission service provider;
(ii) other customers served by an
electricity distribution or transmission
service provider; and
(iii) the general public in the area served
by the public utility in which the cogenerator
or small power producer is located.
(2) Inclusions.--The study shall include an analysis of--
(A) the potential benefits of--
(i) increased system reliability;
(ii) improved power quality;
(iii) the provision of ancillary services;
(iv) reduction of peak power requirements
through onsite generation;
(v) the provision of reactive power or
volt-ampere reactives;
(vi) an emergency supply of power;
(vii) offsets to investments in generation,
transmission, or distribution facilities that
would otherwise be recovered through rates;
(viii) diminished land use effects and
right-of-way acquisition costs; and
(ix) reducing the vulnerability of a system
to terrorism; and
(B) any rate-related issue that may impede or
otherwise discourage the expansion of cogeneration and
small power production facilities, including a review
of whether rates, rules, or other requirements imposed
on the facilities are comparable to rates imposed on
customers of the same class that do not have
cogeneration or small power production.
(3) Valuation of benefits.--In carrying out the study, the
Secretary shall determine an appropriate method of valuing
potential benefits under varying circumstances for individual
cogeneration or small power production units.
(b) Report.--Not later than 18 months after the date of enactment
of this Act, the Secretary shall--
(1) complete the study;
(2) provide an opportunity for public comment on the
results of the study; and
(3) submit to the President and Congress a report
describing--
(A) the results of the study; and
(B) information relating to the public comments
received under paragraph (2).
(c) Publication.--After submission of the report under subsection
(b) to the President and Congress, the Secretary shall publish the
report.
SEC. 1319. STUDY ON INVENTORY OF PETROLEUM AND NATURAL GAS STORAGE.
(a) Definition of petroleum.--In this section, the term
``petroleum'' means--
(1) crude oil;
(2) motor gasoline;
(3) jet fuel;
(4) distillates; and
(5) propane.
(b) Study.--
(1) In general.--The Secretary shall conduct a study of
petroleum and natural gas storage capacity and operational
inventory levels, nationwide and by major geographical regions.
(2) Inclusions.--The study shall include an analysis of,
for petroleum and natural gas--
(A) historical normal ranges of inventory levels;
(B) historical and projected storage capacity
trends;
(C) estimated operation inventory levels below
which outages, delivery slowdown, rationing,
interruptions in service, or other indicators of
shortage begin to appear;
(D) explanations for inventory levels dropping
below normal ranges; and
(E) the ability of industry to meet the demand of
the United States for petroleum and natural gas without
shortages or price spikes, if inventory levels are
below normal ranges.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the
results of the study, including--
(1) the findings of the study; and
(2) any recommendations of the Secretary for preventing
future supply shortages.
SEC. 1320. NATURAL GAS SUPPLY SHORTAGE REPORT.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Secretary shall submit to Congress a report
on natural gas supplies and demand.
(b) Purpose.--The purpose of the report under subsection (a) is to
develop recommendations for achieving a balance between natural gas
supply and demand in order to--
(1) provide residential consumers with natural gas at
reasonable and stable prices;
(2) accommodate long-term maintenance and growth of
domestic natural gas-dependent industrial, manufacturing, and
commercial enterprises;
(3) facilitate the attainment of national ambient air
quality standards under the Clean Air Act (43 U.S.C. 7401 et
seq.);
(4) achieve continued progress in reducing the emissions
associated with electric power generation; and
(5) support the development of the preliminary phases of
hydrogen-based energy technologies.
(c) Comprehensive Analysis.--The report shall include a
comprehensive analysis of, for the period beginning on January 1, 2004,
and ending on December 31, 2015, natural gas supply and demand in the
United States, including--
(1) estimates of annual domestic demand for natural gas,
taking into consideration the effect of Federal policies and
actions that are likely to increase or decrease the demand for
natural gas;
(2) projections of annual natural gas supplies, from
domestic and foreign sources, under Federal policies in
existence on the date of enactment of this Act;
(3) an identification of estimated natural gas supplies
that are not available under those Federal policies;
(4) scenarios for decreasing natural gas demand and
increasing natural gas supplies that compare the relative
economic and environmental impacts of Federal policies that--
(A) encourage or require the use of natural gas to
meet air quality, carbon dioxide emission reduction, or
energy security goals;
(B) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(C) support technologies to develop alternative
sources of natural gas and synthetic gas, including
coal gasification technologies;
(D) encourage or require the use of energy
conservation and demand side management practices; and
(E) affect access to domestic natural gas supplies;
and
(5) recommendations for Federal actions to achieve the
purposes described in subsection (b), including recommendations
that--
(A) encourage or require the use of energy sources
other than natural gas, including coal, nuclear, and
renewable sources;
(B) encourage or require the use of energy
conservation or demand side management practices;
(C) support technologies for the development of
alternative sources of natural gas and synthetic gas,
including coal gasification technologies; and
(D) would improve access to domestic natural gas
supplies.
(d) Consultation.--In preparing the report under subsection (a),
the Secretary shall consult with--
(1) experts in natural gas supply and demand; and
(2) representatives of--
(A) State and local governments;
(B) tribal organizations; and
(C) consumer and other organizations.
(e) Hearings.--In preparing the report under subsection (a), the
Secretary may hold public hearings and provide other opportunities for
public comment, as the Secretary considers appropriate.
SEC. 1321. SPLIT-ESTATE FEDERAL OIL AND GAS LEASING AND DEVELOPMENT
PRACTICES.
(a) Review.--
(1) In general.--In consultation with affected private
surface owners, representatives of the oil and gas industry,
and other interested parties, the Secretary of the Interior
shall undertake a review of the current policies and practices
with respect to management of Federal subsurface oil and gas
development activities and the effects of those activities on
the privately owned surface.
(2) Inclusions.--The review shall include--
(A) a comparison of the rights and responsibilities
under existing mineral and land law for the owner of a
Federal mineral lease, the private surface owners and
the Department;
(B) a comparison of the surface owner consent
provisions in section 714 of the Surface Mining Control
and Reclamation Act of 1977 (30 U.S.C. 1304) concerning
surface mining of Federal coal deposits and the surface
owner consent provisions for oil and gas development,
including coalbed methane production;
(C) an analysis and comparison of existing State
laws addressing surface owner protection on split
estates in which the surface estate is privately held
and the subsurface estate is federally owned, or other
split estate situations; and
(D) recommendations for administrative or
legislative action necessary to facilitate reasonable
access for Federal oil and gas activities while
addressing surface owner concerns and minimizing
impacts to private surface.
(b) Report.--The Secretary of the Interior shall report the results
of such review to Congress not later than 180 days after the date of
enactment of this Act.
SEC. 1322. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS IN THE
POWDER RIVER BASIN.
(a) Review.--The Secretary of the Interior shall review Federal and
State laws in existence on the date of enactment of this Act in order
to resolve any conflict relating to the Powder River Basin in Wyoming
and Montana between--
(1) the development of Federal coal; and
(2) the development of Federal and non-Federal coalbed
methane.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary of the Interior shall submit to Congress a
report that--
(1) describes methods of resolving a conflict described in
subsection (a); and
(2) identifies a method preferred by the Secretary of the
Interior, including proposed legislative language, if any,
required to implement the method.
SEC. 1323. STUDY OF ENERGY EFFICIENCY STANDARDS.
(a) Study.--The Secretary shall enter into a contract with the
National Academy of Sciences under which the National Academy of
Sciences, not later than 1 year after the date of enactment of this
Act, shall conduct a study of whether the goals of energy efficiency
standards are best served--
(1) by measuring energy consumed, and efficiency
improvements, at the site of energy consumption; or
(2) through the full fuel cycle, beginning at the source of
energy production.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Secretary shall submit to Congress a report on the study
under subsection (a).
SEC. 1324. TELECOMMUTING STUDY.
(a) Definitions.--In this section:
(1) Federal employee.--The term ``Federal employee'' has
the meaning given the term ``employee'' in section 2105 of
title 5, United States Code.
(2) Telecommuting.--The term `telecommuting'' means the
performance of work functions using communications
technologies, which eliminates or substantially reduces the
need to commute to and from traditional worksites.
(b) Study Required.--The Secretary, in consultation with the
Chairperson of the Federal Energy Regulatory Commission, the Director
of the Office of Personnel Management, the Administrator of General
Services, and the Administrator of National Telecommunications and
Information Administration, shall conduct a study of the energy
conservation implications of the widespread adoption of telecommuting
by Federal employees in the United States.
(c) Inclusions.--The study under subsection (b) shall include an
analysis of the following subjects in relation to the energy saving
potential of telecommuting by Federal employees:
(1) Reductions of energy use and energy costs in commuting
and regular office heating, cooling, and other operations.
(2) Other energy reductions accomplished by telecommuting.
(3) Existing regulatory barriers that hamper telecommuting,
including barriers to broadband telecommunications services
deployment.
(4) Collateral benefits to the environment, family life,
and other values.
(d) Report.--Not later than 180 days after the date of enactment of
this Act, the Secretary shall submit to the President and Congress a
report on the study under subsection (b), including a description of
the results of the analysis of each of subject referred to in
subsection (c).
SEC. 1325. OIL BYPASS FILTRATION TECHNOLOGY.
The Secretary and the Administrator of the Environmental Protection
Agency shall--
(1) conduct a joint study of the benefits of oil bypass
filtration technology in--
(A) reducing demand for oil; and
(B) protecting the environment;
(2) evaluate various products and manufacturers with
respect to oil bypass filtration technology; and
(3) after conducting the evaluation under paragraph (2),
examine the feasibility of using oil bypass filtration
technology in Federal motor vehicle fleets.
SEC. 1326. TOTAL INTEGRATED THERMAL SYSTEMS.
The Secretary shall--
(1) conduct a study of the benefits of total integrated
thermal systems in--
(A) reducing demand for oil; and
(B) protecting the environment; and
(2) examine the feasibility of using total integrated
thermal systems in Federal motor vehicle fleets (including the
motor vehicle fleet of the Department of Defense).
SEC. 1327. UNIVERSITY COLLABORATION.
(a) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that examines
the feasibility of promoting collaborations between large institutions
of higher education and small institutions of higher education (as
determined by the Secretary) through grants, contracts, and cooperative
agreements made by the Secretary for energy projects.
(b) Consideration.--In preparing the report under subsection (a),
the Secretary shall take into consideration the feasibility of
providing incentives for including small institutions of higher
education (including institutions that primarily serve minorities), as
determined by the Secretary, in--
(1) energy research grants;
(2) contracts; and
(3) cooperative agreements.
SEC. 1328. HYDROGEN PARTICIPATION STUDY.
Not later than 1 year after the date of enactment of this Act, the
Secretary shall submit to Congress a report evaluating methodologies to
ensure the widest participation practicable in setting goals and
milestones under the hydrogen program of the Department, including
international participants.
SEC. 1329. OVERALL EMPLOYMENT IN A HYDROGEN ECONOMY.
(a) Study.--
(1) In general.--The Secretary shall carry out a study of
the likely effects of a transition to a hydrogen economy on
overall employment in the United States.
(2) Contents.--In completing the study, the Secretary shall
take into consideration--
(A) the replacement effects of new goods and
services;
(B) international competition;
(C) workforce training requirements;
(D) multiple possible fuel cycles, including usage
of raw materials;
(E) rates of market penetration of technologies;
and
(F) regional variations based on geography.
(b) Report.--Not later than 18 months after the date of enactment
of this Act, the Secretary shall submit to Congress a report describing
the findings, conclusions, and recommendations of the study under
subsection (a).
SEC. 1330. STUDY OF BEST MANAGEMENT PRACTICES FOR ENERGY RESEARCH AND
DEVELOPMENT PROGRAMS.
(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Public Administration under which the Academy
shall conduct a study to assess management practices for research,
development, and demonstration programs at the Department.
(b) Scope of the Study.--The study shall consider--
(1) management practices that act as barriers between the
Office of Science and offices conducting mission-oriented
research;
(2) recommendations for management practices that would
improve coordination and bridge the innovation gap between the
Office of Science and offices conducting mission-oriented
research;
(3) the applicability of the management practices used by
the Department of Defense Advanced Research Programs Agency to
research programs at the Department;
(4) the advisability of creating an agency within the
Department modeled after the Department of Defense Advanced
Research Projects Agency;
(5) recommendations for management practices that could
best encourage innovative research and efficiency at the
Department; and
(6) any other relevant considerations.
(c) Report.--Not later than 18 months after the date of enactment
of this Act, the Secretary shall submit to Congress a report on the
study conducted under this section.
SEC. 1331. EFFECT OF ELECTRICAL CONTAMINANTS ON RELIABILITY OF ENERGY
PRODUCTION SYSTEMS.
Not later than 180 days after the date of enactment of this Act,
the Secretary shall enter into a contract with the National Academy of
Sciences under which the National Academy of Sciences shall determine
the effect that electrical contaminants (such as tin whiskers) may have
on the reliability of energy production systems, including nuclear
energy.
SEC. 1332. ALTERNATIVE FUELS REPORTS.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, the Secretary shall submit to Congress reports on the
potential for each of biodiesel and hythane to become major,
sustainable, alternative fuels.
(b) Biodiesel Report.--The report relating to biodiesel submitted
under subsection (a) shall--
(1) provide a detailed assessment of--
(A) potential biodiesel markets and manufacturing
capacity; and
(B) environmental and energy security benefits with
respect to the use of biodiesel;
(2) identify any impediments, especially in infrastructure
needed for production, distribution, and storage, to biodiesel
becoming a substantial source of fuel for conventional diesel
and heating oil applications;
(3) identify strategies to enhance the commercial
deployment of biodiesel; and
(4) include an examination and recommendations, as
appropriate, of the ways in which biodiesel may be modified to
be a cleaner-burning fuel.
(c) Hythane Report.--The report relating to hythane submitted under
subsection (a) shall--
(1) provide a detailed assessment of potential hythane
markets and the research and development activities that are
necessary to facilitate the commercialization of hythane as a
competitive, environmentally-friendly transportation fuel;
(2) address--
(A) the infrastructure necessary to produce, blend,
distribute, and store hythane for widespread commercial
purposes; and
(B) other potential market barriers to the
commercialization of hythane;
(3) examine the viability of producing hydrogen using
energy-efficient, environmentally friendly methods so that the
hydrogen can be blended with natural gas to produce hythane;
and
(4) include an assessment of the modifications that would
be required to convert compressed natural gas vehicle engines
to engines that use hythane as fuel.
(d) Grants for Report Completion.--The Secretary may use such sums
as are available to the Secretary to provide, to 1 or more colleges or
universities selected by the Secretary, grants for use in carrying out
research to assist the Secretary in preparing the reports required to
be submitted under subsection (a).
SEC. 1333. FINAL ACTION ON REFUNDS FOR EXCESSIVE CHARGES.
(a) Findings.--Congress finds that--
(1) The state of California experienced an energy crisis;
(2) FERC issued an order requiring a refund of the portion
of charges on the sale of electric energy that was unjust or
unreasonable during that crisis;
(3) As of the date of enactment of this act, none of the
refunds ordered to date have been received by the state of
California; and
(4) the Commission has ruled that the state of California
is entitled to approximately $3 billion in refunds; the state
of California maintains that that $8.9 billion in refunds is
owed.
(b) FERC shall--
(1) seek to conclude its investigation into the unjust or
unreasonable charges incurred by California during the 2000-
2001 electricity crisis as soon as possible;
(2) seek to ensure that refunds the Commission determines
are owed to the State of California are paid to the state of
California; and
(3) submit to Congress a report by December 31, 2005
describing the actions taken by the Commission to date under
this section and timetables for further actions.
SEC. 1334. FUEL CELL AND HYDROGEN TECHNOLOGY STUDY.
(a) Findings.--Congress finds that--
(1) according to the National Academy of Sciences,
``Greenhouse gases are accumulating in Earth's atmosphere as a
result of human activities, causing surface air temperatures
and subsurface ocean temperatures to rise . . . Human-induced
warming and associated sea level rises are expected to continue
through the 21st century.'';
(2) in 2001, the Intergovernmental Panel on Climate Change
(IPCC) concluded that the average temperature of the Earth can
be expected to rise between 2.5 and 10.4 degrees Fahrenheit in
this century and ``there is new and stronger evidence that most
of the warming observed over the last 50 years is attributable
to human activities'';
(3) the National Academy of Sciences has stated that ``the
IPCC's conclusion that most of the observed warming of the last
50 years is likely to have been due to the increase of
greenhouse gas concentrations accurately reflects the current
thinking of the scientific community on this issue'' and that
``there is general agreement that the observed warming is real
and particularly strong within the past twenty years'';
(4) a significant Federal investment toward the development
of fuel cell technologies and the transition from petroleum to
hydrogen in vehicles could significantly contribute to the
reduction of carbon dioxide emissions by reducing fuel
consumption;
(5) a massive infusion of resources and leadership from the
Federal Government would be needed to create the necessary fuel
cell technologies that provide alternatives to petroleum and
the more efficient use of energy; and
(6) the Federal Government would need to commit to
developing, in conjunction with private industry and academia,
advanced vehicle technologies and the necessary hydrogen
infrastructure to provide alternatives to petroleum.
(b) Study.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Secretary shall enter into a
contract with the National Academy of Sciences and the National
Research Council to carry out a study of fuel cell technologies
that provides a budget roadmap for the development of fuel cell
technologies and the transition from petroleum to hydrogen in a
significant percentage of the vehicles sold by 2020.
(2) Requirements.--In carrying out the study, the National
Academy of Sciences and the National Research Council shall--
(A) establish as a goal the maximum percentage
practicable of vehicles that the National Academy of
Sciences and the National Research Council determines
can be fueled by hydrogen by 2020;
(B) determine the amount of Federal and private
funding required to meet the goal established under
subparagraph (A);
(C) determine what actions are required to meet the
goal established under subparagraph (A);
(D) examine the need for expanded and enhanced
Federal research and development programs, changes in
regulations, grant programs, partnerships between the
Federal Government and industry, private sector
investments, infrastructure investments by the Federal
Government and industry, educational and public
information initiatives, and Federal and State tax
incentives to meet the goal established under
subparagraph (A);
(E) consider whether other technologies would be
less expensive or could be more quickly implemented
than fuel cell technologies to achieve significant
reductions in carbon dioxide emissions;
(F) take into account any reports relating to fuel
cell technologies and hydrogen-fueled vehicles,
including--
(i) the report prepared by the National
Academy of Engineering and the National
Research Council in 2004 entitled ``Hydrogen
Economy: Opportunities, Costs, Barriers, and
R&D Needs''; and
(ii) the report prepared by the U.S. Fuel
Cell Council in 2003 entitled ``Fuel Cells and
Hydrogen: The Path Forward'';
(G) consider the challenges, difficulties, and
potential barriers to meeting the goal established
under subparagraph (A); and
(H) with respect to the budget roadmap--
(i) specify the amount of funding required
on an annual basis from the Federal Government
and industry to carry out the budget roadmap;
and
(ii) specify the advantages and
disadvantages to moving toward the transition
to hydrogen in vehicles in accordance with the
timeline established by the budget roadmap.
SEC. 1335. PASSIVE SOLAR TECHNOLOGIES.
(a) Definition of Passive Solar Technology.--In this section, the
term ``passive solar technology'' means a passive solar technology,
including daylighting, that--
(1) is used exclusively to avoid electricity use; and
(2) can be metered to determine energy savings.
(b) Study.--The Secretary shall conduct a study to determine--
(1) the range of levelized costs of avoided electricity for
passive solar technologies;
(2) the quantity of electricity displaced using passive
solar technologies in the United States as of the date of
enactment of this Act; and
(3) the projected energy savings from passive solar
technologies in 5, 10, 15, 20, and 25 years after the date of
enactment of this Act if--
(A) incentives comparable to the incentives
provided for electricity generation technologies were
provided for passive solar technologies; and
(B) no new incentives for passive solar
technologies were provided.
(c) Report.--Not later than 120 days after the date of enactment of
this Act, the Secretary shall submit to Congress a report that
describes the results of the study under subsection (b).
SEC. 1336. STUDY OF LINK BETWEEN ENERGY SECURITY AND INCREASES IN
VEHICLE MILES TRAVELED.
(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Sciences under which the Academy shall conduct
a study to assess the implications on energy use and efficiency of land
development patterns in the United States.
(b) Scope.--The study shall consider--
(1) the correlation, if any, between land development
patterns and increases in vehicle miles traveled;
(2) whether petroleum use in the transportation sector can
be reduced through changes in the design of development
patterns;
(3) the potential benefits of--
(A) information and education programs for State
and local officials (including planning officials) on
the potential for energy savings through planning,
design, development, and infrastructure decisions;
(B) incorporation of location efficiency models in
transportation infrastructure planning and investments;
and
(C) transportation policies and strategies to help
transportation planners manage the demand for the
number and length of vehicle trips, including trips
that increase the viability of other means of travel;
and
(4) such other considerations relating to the study topic
as the National Academy of Sciences finds appropriate.
(c) Report.--Not later than 2 years after the date of enactment of
this Act, the National Academy of Sciences shall submit to the
Secretary and Congress a report on the study conducted under this
section.
SEC. 1337. STUDY OF AVAILABILITY OF SKILLED WORKERS.
(a) In General.--The Secretary shall enter into an arrangement with
the National Academy of Sciences under which the National Academy of
Sciences shall conduct a study of the short-term and long-term
availability of skilled workers to meet the energy and mineral security
requirements of the United States.
(b) Inclusions.--The study shall include an analysis of--
(1) the need for and availability of workers for the oil,
gas, and mineral industries;
(2) the availability of skilled labor at both entry level
and more senior levels; and
(3) recommendations for future actions needed to meet
future labor requirements.
(c) Report.--Not later than 2 years after the date of enactment of
this Act, the Secretary shall submit to Congress a report that
describes the results of the study.
SEC. 1338. SCIENCE STUDY ON CUMULATIVE IMPACTS OF MULTIPLE OFFSHORE
LIQUEFIED NATURAL GAS FACILITIES.
(a) In General.--The Secretary (in consultation with the National
Oceanic Atmospheric Administration, the Commandant of the Coast Guard,
affected recreational and commercial fishing industries and affected
energy and transportation stakeholders) shall carry out a study and
compile existing science (including studies and data) to determine the
risks or benefits presented by cumulative impacts of multiple offshore
liquefied natural gas facilities reasonably assumed to be constructed
in an area of the Gulf of Mexico using the open-rack vaporization
system.
(b) Accuracy.--In carrying out subsection (a), the Secretary shall
verify the accuracy of available science and develop a science-based
evaluation of significant short-term and long-term cumulative impacts,
both adverse and beneficial, of multiple offshore liquefied natural gas
facilities reasonably assumed to be constructed in an area of the Gulf
of Mexico using or proposing the open-rack vaporization system on the
fisheries and marine populations in the vicinity of the facility.
TITLE XIV--INCENTIVES FOR INNOVATIVE TECHNOLOGIES
SEC. 1401. DEFINITIONS.
In this title:
(1) Commercial technology.--
(A) In general.--The term ``commercial technology''
means a technology in general use in the commercial
marketplace.
(B) Inclusions.--The term ``commercial technology''
does not include a technology solely by use of the
technology in a demonstration project funded by the
Department.
(2) Cost.--The term ``cost'' has the meaning given the term
``cost of a loan guarantee'' within the meaning of section
502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a(5)(C)).
(3) Eligible project.--The term ``eligible project'' means
a project described in section 1403.
(4) Guarantee.--
(A) In general.--The term ``guarantee'' has the
meaning given the term ``loan guarantee'' in section
502 of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a).
(B) Inclusion.--The term ``guarantee'' includes a
loan guarantee commitment (as defined in section 502 of
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)).
(5) Obligation.--The term ``obligation'' means the loan or
other debt obligation that is guaranteed under this section.
SEC. 1402. TERMS AND CONDITIONS.
(a) In General.--Except for division C of Public Law 108-324, the
Secretary shall make guarantees under this or any other Act for
projects on such terms and conditions as the Secretary determines,
after consultation with the Secretary of the Treasury, only in
accordance with this section.
(b) Specific Appropriation or Contribution.--No guarantee shall be
made unless--
(1) an appropriation for the cost has been made; or
(2) the Secretary has received from the borrower a payment
in full for the cost of the obligation and deposited the
payment into the Treasury.
(c) Amount.--Unless otherwise provided by law, a guarantee by the
Secretary shall not exceed an amount equal to 80 percent of the project
cost of the facility that is the subject of the guarantee, as estimated
at the time at which the guarantee is issued.
(d) Repayment.--
(1) In general.--No guarantee shall be made unless the
Secretary determines that there is reasonable prospect of
repayment of the principal and interest on the obligation by
the borrower.
(2) Amount.--No guarantee shall be made unless the
Secretary determines that the amount of the obligation (when
combined with amounts available to the borrower from other
sources) will be sufficient to carry out the project.
(3) Subordination.--The obligation shall be subject to the
condition that the obligation is not subordinate to other
financing.
(e) Interest Rate.--An obligation shall bear interest at a rate
that does not exceed a level that the Secretary determines appropriate,
taking into account the prevailing rate of interest in the private
sector for similar loans and risks.
(f) Term.--The term of an obligation shall require full repayment
over a period not to exceed the lesser of--
(1) 30 years; or
(2) 90 percent of the projected useful life of the physical
asset to be financed by the obligation (as determined by the
Secretary).
(g) Defaults.--
(1) Payment by secretary.--
(A) In general.--If a borrower defaults on the
obligation (as defined in regulations promulgated by
the Secretary and specified in the guarantee contract),
the holder of the guarantee shall have the right to
demand payment of the unpaid amount from the Secretary.
(B) Payment required.--Within such period as may be
specified in the guarantee or related agreements, the
Secretary shall pay to the holder of the guarantee the
unpaid interest on, and unpaid principal of the
obligation as to which the borrower has defaulted,
unless the Secretary finds that there was no default by
the borrower in the payment of interest or principal or
that the default has been remedied.
(C) Forbearance.--Nothing in this subsection
precludes any forbearance by the holder of the
obligation for the benefit of the borrower which may be
agreed upon by the parties to the obligation and
approved by the Secretary.
(2) Subrogation.--
(A) In general.--If the Secretary makes a payment
under paragraph (1), the Secretary shall be subrogated
to the rights of the recipient of the payment as
specified in the guarantee or related agreements
including, where appropriate, the authority
(notwithstanding any other provision of law) to--
(i) complete, maintain, operate, lease, or
otherwise dispose of any property acquired
pursuant to such guarantee or related
agreements; or
(ii) permit the borrower, pursuant to an
agreement with the Secretary, to continue to
pursue the purposes of the project if the
Secretary determines this to be in the public
interest.
(B) Superiority of rights.--The rights of the
Secretary, with respect to any property acquired
pursuant to a guarantee or related agreements, shall be
superior to the rights of any other person with respect
to the property.
(C) Terms and conditions.--A guarantee agreement
shall include such detailed terms and conditions as the
Secretary determines appropriate to--
(i) protect the interests of the United
States in the case of default; and
(ii) have available all the patents and
technology necessary for any person selected,
including the Secretary, to complete and
operate the project.
(3) Payment of principal and interest by secretary.--With
respect to any obligation guaranteed under this section, the
Secretary may enter into a contract to pay, and pay, holders of
the obligation, for and on behalf of the borrower, from funds
appropriated for that purpose, the principal and interest
payments which become due and payable on the unpaid balance of
the obligation if the Secretary finds that--
(A)(i) the borrower is unable to meet the payments
and is not in default;
(ii) it is in the public interest to permit the
borrower to continue to pursue the purposes of the
project; and
(iii) the probable net benefit to the Federal
Government in paying the principal and interest will be
greater than that which would result in the event of a
default;
(B) the amount of the payment that the Secretary is
authorized to pay shall be no greater than the amount
of principal and interest that the borrower is
obligated to pay under the agreement being guaranteed;
and
(C) the borrower agrees to reimburse the Secretary
for the payment (including interest) on terms and
conditions that are satisfactory to the Secretary.
(4) Action by attorney general.--
(A) Notification.--If the borrower defaults on an
obligation, the Secretary shall notify the Attorney
General of the default.
(B) Recovery.--On notification, the Attorney
General shall take such action as is appropriate to
recover the unpaid principal and interest due from--
(i) such assets of the defaulting borrower
as are associated with the obligation; or
(ii) any other security pledged to secure
the obligation.
(h) Fees.--
(1) In general.--The Secretary shall charge and collect
fees for guarantees in amounts the Secretary determines are
sufficient to cover applicable administrative expenses.
(2) Availability.--Fees collected under this subsection
shall--
(A) be deposited by the Secretary into the
Treasury; and
(B) remain available until expended, subject to
such other conditions as are contained in annual
appropriations Acts.
(i) Records; Audits.--
(1) In general.--A recipient of a guarantee shall keep such
records and other pertinent documents as the Secretary shall
prescribe by regulation, including such records as the
Secretary may require to facilitate an effective audit.
(2) Access.--The Secretary and the Comptroller General of
the United States, or their duly authorized representatives,
shall have access, for the purpose of audit, to the records and
other pertinent documents.
(j) Full Faith and Credit.--The full faith and credit of the United
States is pledged to the payment of all guarantees issued under this
section with respect to principal and interest.
SEC. 1403. ELIGIBLE PROJECTS.
(a) In General.--The Secretary may make guarantees under this
section only for projects that--
(1) avoid, reduce, or sequester air pollutants or
anthropogenic emissions of greenhouse gases; and
(2) employ new or significantly improved technologies as
compared to commercial technologies in service in the United
States at the time the guarantee is issued.
(b) Categories.--Projects from the following categories shall be
eligible for a guarantee under this section:
(1) Renewable energy systems.
(2) Advanced fossil energy technology (including coal
gasification meeting the criteria in subsection (d)).
(3) Hydrogen fuel cell technology for residential,
industrial or -transportation applications.
(4) Advanced nuclear energy facilities.
(5) Carbon capture and sequestration practices and
technologies, including agricultural and forestry practices
that store and sequester carbon.
(6) Efficient electrical generation, transmission, and
distribution -technologies.
(7) Efficient end-use energy technologies.
(8) Notwithstanding subsection (a)(2), production
facilities for fuel efficient vehicles.
(c) Gasification Projects.--The Secretary may make guarantees for
the following gasification projects:
(1) Integrated gasification combined cycle projects.--
Integrated gasification combined cycle plants meeting the
emission levels under subsection (d), including--
(A) projects for the generation of electricity--
(i) for which, during the term of the
guarantee--
(I) coal, biomass, petroleum coke,
or a combination of coal, biomass, and
petroleum coke will account for at
least 65 percent of annual heat input;
and
(II) electricity will account for
at least 65 percent of net useful
annual energy output;
(ii) that have a design that is determined
by the Secretary to be capable of accommodating
the equipment likely to be necessary to capture
the carbon dioxide that would otherwise be
emitted in flue gas from the plant;
(iii) that have an assured revenue stream
that covers project capital and operating costs
(including servicing all debt obligations
covered by the guarantee) that is approved by
the Secretary and the relevant State public
utility commission; and
(iv) on which construction commences not
later than the date that is 3 years after the
date of the issuance of the guarantee;
(B) a project to produce energy from coal (of not
more than 13,000 Btu/lb and mined in the western United
States) using appropriate advanced integrated
gasification combined cycle technology that minimizes
and offers the potential to sequester carbon dioxide
emissions and that--
(i) may include repowering of existing
facilities;
(ii) may be built in stages;
(iii) shall have a combined output of at
least 100 megawatts;
(iv) shall be located in a western State at
an altitude greater than 4,000 feet; and
(v) shall demonstrate the ability to use
coal with an energy content of not more than
9,000 Btu/lb;
(C) a project located in a taconite-producing
region of the United States that is entitled under the
law of the State in which the plant is located to enter
into a long-term contract approved by a State public
utility commission to sell at least 450 megawatts of
output to a utility; and
(D) facilities that--
(i) generate 1 or more hydrogen-rich and
carbon monoxide-rich product streams from the
gasification of coal or coal waste; and
(ii) use those streams to facilitate the
production of ultra clean premium fuels through
the Fischer-Tropsch process.
(2) Industrial gasification projects.--Facilities that
gasify coal, biomass, or petroleum coke in any combination to
produce synthesis gas for use as a fuel or feedstock and for
which electricity accounts for less than 65 percent of the
useful energy output of the facility.
(3) Petroleum coke gasification projects.--The Secretary is
encouraged to make loan guarantees under this title available
for petroleum coke gasification projects.
(d) Emission Levels.--In addition to any other applicable Federal
or State emission limitation requirements, a project shall attain at
least--
(1) total sulfur dioxide emissions in flue gas from the
project that do not exceed 0.05 lb/mmBTU;
(2) a 90-percent removal rate (including any fuel
pretreatment) of mercury from the coal-derived gas, and any
other fuel, combusted by the project;
(3) total nitrogen oxide emissions in the flue gas from the
project that do not exceed 0.08 lb/mmBTU; and
(4) total particulate emissions in the flue gas from the
project that do not exceed 0.01 lb/mmBTU.
(e) Qualification of Facilities Receiving Tax Credits.--A project
that receives tax credits for clean coal technology shall not be
disqualified from receiving a guarantee under this title.
SEC. 1404. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are necessary
to provide the cost of guarantees under this title.
TITLE XV--ENERGY POLICY TAX INCENTIVES
SEC. 1500. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This title may be cited as the ``Energy Policy
Tax Incentives Act of 2005''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
Subtitle A--Electricity Infrastructure
SEC. 1501. EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY
PRODUCTION CREDIT.
(a) 3-Year Extension For Certain Facilities.--Section 45(d)
(relating to qualified facilities) is amended--
(1) by striking ``January 1, 2006'' each place it appears
in paragraphs (1), (2), (3), (5), (6), and (7) and inserting
``January 1, 2009'', and
(2) by striking ``January 1, 2006'' in paragraph (4) and
inserting ``January 1, 2009 (January 1, 2006, in the case of a
facility using solar energy)''.
(b) Increase in Credit Period.--Section 45(b)(4)(B) (relating to
credit period) is amended--
(1) by inserting ``or clause (iii)'' after ``clause (ii)''
in clause (i), and
(2) by adding at the end the following:
``(iii) Termination.--Clause (i) shall not
apply to any facility placed in service after
the date of the enactment of this clause.''.
(c) Expansion of Qualified Resources To Include Fuel Cells.--
(1) In general.--Section 45(c)(1) (defining qualified
energy resources) is amended by striking ``and'' at the end of
subparagraph (F), by striking the period at the end of
subparagraph (G) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(H) fuel cells.''.
(2) Fuel cell facility.--Section 45(d) (relating to
qualified facilities) is amended by adding at the end the
following new paragraph:
``(9) Fuel cell facility.--In the case of a facility using
an integrated system comprised of a fuel cell stack assembly
and associated balance of plant components which converts a
fuel into electricity using electrochemical means, the term
`qualified facility' means any facility owned by the taxpayer
which--
``(A) is originally placed in service after
December 31, 2005, and before January 1, 2009,
``(B) has a nameplate capacity rating of at least
0.5 megawatt of electricity, and
``(C) has an electricity-only generation efficiency
greater than 30 percent.''.
(3) Conforming amendments relating to coordination with
energy credit.--
(A) In general.--Section 45(e) (relating to
definitions and special rules) is amended by adding at
the end the following new paragraph:
``(10) Coordination with energy credit.--The term
`qualified facility' shall not include any property described
in section 48(a)(3) the basis of which is taken into account by
the taxpayer for purposes of determining the energy credit
under section 48.''.
(B) Conforming amendment.--Section 45(d)(4) is
amended by striking the last sentence.
(d) Expansion of Qualified Resources To Certain Hydropower.--
(1) In general.--Section 45(c)(1) (defining qualified
energy resources), as amended by this Act, is amended by
striking ``and'' at the end of subparagraph (G), by striking
the period at the end of subparagraph (H) and inserting ``,
and'', and by adding at the end the following new subparagraph:
``(I) qualified hydropower production.''.
(2) Credit rate.--Section 45(b)(4)(A) (relating to credit
rate) is amended by striking ``or (7)'' and inserting ``(7), or
(10)''.
(3) Definition of resources.--Section 45(c) (relating to
qualified energy resources and refined coal) is amended by
adding at the end the following new paragraph:
``(8) Qualified hydropower production.--
``(A) In general.--The term `qualified hydropower
production' means--
``(i) in the case of any hydroelectric dam
which was placed in service on or before the
date of the enactment of this paragraph, the
incremental hydropower production for the
taxable year, and
``(ii) in the case of any nonhydroelectric
dam described in subparagraph (C), the
hydropower production from the facility for the
taxable year.
``(B) Determination of incremental hydropower
production.--
``(i) In general.--For purposes of
subparagraph (A), incremental hydropower
production for any taxable year shall be equal
to the percentage of average annual hydropower
production at the facility attributable to the
efficiency improvements or additions of
capacity placed in service after the date of
the enactment of this paragraph, determined by
using the same water flow information used to
determine an historic average annual hydropower
production baseline for such facility. Such
percentage and baseline shall be certified by
the Federal Energy Regulatory Commission.
``(ii) Operational changes disregarded.--
For purposes of clause (i), the determination
of incremental hydropower production shall not
be based on any operational changes at such
facility not directly associated with the
efficiency improvements or additions of
capacity.
``(C) Nonhydroelectric dam.--For purposes of
subparagraph (A), a facility is described in this
subparagraph if--
``(i) the facility is licensed by the
Federal Energy Regulatory Commission and meets
all other applicable environmental, licensing,
and regulatory requirements,
``(ii) the facility was placed in service
before the date of the enactment of this
paragraph and did not produce hydroelectric
power on the date of the enactment of this
paragraph, and
``(iii) turbines or other generating
devices are to be added to the facility after
such date to produce hydroelectric power, but
only if there is not any enlargement of the
diversion structure, or construction or
enlargement of a bypass channel, or the
impoundment or any withholding of any
additional water from the natural stream
channel.
(4) Facilities.--Section 45(d) (relating to qualified
facilities), as amended by this Act, is amended by adding at
the end the following new paragraph:
``(10) Qualified hydropower facility.--In the case of a
facility producing qualified hydroelectric production described
in subsection (c)(8), the term `qualified facility' means--
``(A) in the case of any facility producing
incremental hydropower production, such facility but
only to the extent of its incremental hydropower
production attributable to efficiency improvements or
additions to capacity described in subsection (c)(8)(B)
placed in service after the date of the enactment of
this paragraph and before January 1, 2009, and
``(B) any other facility placed in service after
the date of the enactment of this paragraph and before
January 1, 2009.
``(C) Credit period.--In the case of a qualified
facility described in subparagraph (A), the 10-year
period referred to in subsection (a) shall be treated
as beginning on the date the efficiency improvements or
additions to capacity are placed in service.''.
(e) Technical Amendment Related to Trash Combustion Facilities.--
Section 45(d)(7) (relating to trash combustion facilities) is amended
by adding at the end the following: ``Such term shall include a new
unit placed in service in connection with a facility placed in service
on or before the date of the enactment of this paragraph, but only to
the extent of the increased amount of electricity produced at the
facility by reason of such new unit.''.
(f) Additional Technical Amendments Related to Section 710 of the
American Jobs Creation Act of 2004.--
(1) Clause (ii) of section 45(b)(4)(B) is amended by
striking ``the date of the enactment of this Act'' and
inserting ``January 1, 2005,''.
(2) Clause (ii) of section 45(c)(3)(A) is amended by
inserting ``or any nonhazardous lignin waste material'' after
``cellulosic waste material''.
(3) Subsection (e) of section 45 is amended by striking
paragraph (6).
(4)(A) Paragraph (9) of section 45(e) is amended to read as
follows:
``(9) Coordination with credit for producing fuel from a
nonconventional source.--
``(A) In general.--The term `qualified facility'
shall not include any facility which produces
electricity from gas derived from the biodegradation of
municipal solid waste if such biodegradation occurred
in a facility (within the meaning of section 29) the
production from which is allowed as a credit under
section 29 for the taxable year or any prior taxable
year.
``(B) Refined coal facilities.--The term `refined
coal production facility' shall not include any
facility the production from which is allowed as a
credit under section 29 for the taxable year or any
prior taxable year.''.
(B) Subparagraph (C) of section 45(e)(8) is amended by
striking ``and (9)''.
(5) Subclause (I) of section 168(e)(3)(B)(vi) is amended to
read as follows:
``(I) is described in subparagraph
(A) of section 48(a)(3) (or would be so
described if `solar and wind' were
substituted for `solar' in clause (i)
thereof and the last sentence of such
section did not apply to such
subparagraph),''.
(6) Paragraph (4) of section 710(g) of the American Jobs
Creation Act of 2004 is amended by striking ``January 1, 2004''
and inserting ``January 1, 2005''.
(g) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect of the date
of the enactment of this Act.
(2) Technical amendments.--The amendments made by
subsections (e) and (f) shall take effect as if included in the
amendments made by section 710 of the American Jobs Creation
Act of 2004.
SEC. 1502. APPLICATION OF SECTION 45 CREDIT TO AGRICULTURAL
COOPERATIVES.
(a) In General.--Section 45(e) (relating to definitions and special
rules), as amended by this Act, is amended by adding at the end the
following:
``(11) Allocation of credit to patrons of agricultural
cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of an
eligible cooperative organization, any portion
of the credit determined under subsection (a)
for the taxable year may, at the election of
the organization, be apportioned among patrons
of the organization on the basis of the amount
of business done by the patrons during the
taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year.
``(B) Treatment of organizations and patrons.--The
amount of the credit apportioned to any patrons under
subparagraph (A)--
``(i) shall not be included in the amount
determined under subsection (a) with respect to
the organization for the taxable year, and
``(ii) shall be included in the amount
determined under subsection (a) for the taxable
year of the patrons with or within which the
taxable year of the organization ends.
``(C) Special rules for decrease in credits for
taxable year.--If the amount of the credit of a
cooperative organization determined under subsection
(a) for a taxable year is less than the amount of such
credit shown on the return of the cooperative
organization for such year, an amount equal to the
excess of--
``(i) such reduction, over
``(ii) the amount not apportioned to such
patrons under subparagraph (A) for the taxable
year, shall be treated as an increase in tax
imposed by this chapter on the organization.
Such increase shall not be treated as tax
imposed by this chapter for purposes of
determining the amount of any credit under this
subpart or subpart A, B, E, or G.
``(D) Eligible cooperative defined.--For purposes
of this section the term `eligible cooperative' means a
cooperative organization described in section 1381(a)
which is owned more than 50 percent by agricultural
producers or by entities owned by agricultural
producers. For this purpose an entity owned by an
agricultural producer is one that is more than 50
percent owned by agricultural producers.
``(E) Written notice to patrons.--If any portion of
the credit available under subsection (a) is allocated
to patrons under subparagraph (A), the eligible
cooperative shall provide any patron receiving an
allocation written notice of the amount of the
allocation. Such notice shall be provided before the
date on which the return described in subparagraph
(B)(ii) is due.''.
SEC. 1503. EXPANSION OF RESOURCES TO WAVE, CURRENT, TIDAL, AND OCEAN
THERMAL ENERGY.
(a) In General.--Section 45(c)(1) (defining qualified energy
resources), as amended by this Act, is amended by striking ``and'' at
the end of subparagraph (H), by striking the period at the end of
subparagraph (I) and inserting ``, and'', and by adding at the end the
following new subparagraph:
``(J) wave, current, tidal, and ocean thermal
energy.''
(b) Definition of Resources.--Section 45(c), as amended by this
Act, is amended by adding at the end the following new paragraph:
``(9) Wave, current, tidal, and ocean thermal energy.--The
term `wave, current, tidal, and ocean thermal energy' means
electricity produced from any of the following:
``(A) Free flowing ocean water derived from tidal
currents, ocean currents, waves, or estuary currents.
``(B) Ocean thermal energy.
``(C) Free flowing water in rivers, lakes, man made
channels, or streams.''
(c) Facilities.--Section 45(d), as amended by this Act, is amended
by adding at the end the following new paragraph:
``(11) Wave, current, tidal, and ocean thermal facility.--
In the case of a facility using resources described in
subparagraph (A), (B), or (C) of subsection (c)(9) to produce
electricity, the term `qualified facility' means any facility
owned by the taxpayer which is originally placed in service
after the date of the enactment of this paragraph and before
January 1, 2009, but such term shall not include a facility
which includes impoundment structures or a small irrigation
power facility.''
(b) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 1504. CLEAN RENEWABLE ENERGY BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 (relating to
credits against tax) is amended by adding at the end the following new
subpart:
``Subpart H--Nonrefundable Credit to Holders of Certain Bonds
``Sec. 54. Credit to holders of clean renewable energy bonds.
``SEC. 54. CREDIT TO HOLDERS OF CLEAN RENEWABLE ENERGY BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a clean renewable
energy bond on 1 or more credit allowance dates of the bond occurring
during any taxable year, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an amount equal to the
sum of the credits determined under subsection (b) with respect to such
dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a clean renewable energy bond is 25 percent of the annual
credit determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any clean renewable energy bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), with
respect to any clean renewable energy bond, the Secretary shall
determine daily or cause to be determined daily a credit rate
which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of clean renewable energy bonds with a specified maturity or
redemption date without discount and without interest cost to
the qualified issuer.
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term also includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this part
(other than subpart C thereof (relating to refundable credits)
and this subpart) and section 1397E.
``(d) Clean Renewable Energy Bond.--For purposes of this section--
``(1) In general.--The term `clean renewable energy bond'
means any bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to such
issuer of a portion of the national clean renewable
energy bond limitation under subsection (f)(2),
``(B) 95 percent or more of the proceeds from the
sale of such issue are to be used for capital
expenditures incurred by qualified borrowers for 1 or
more qualified projects,
``(C) the qualified issuer designates such bond for
purposes of this section and the bond is in registered
form, and
``(D) the issue meets the requirements of
subsection (h).
``(2) Qualified project; special use rules.--
``(A) In general.--The term `qualified project'
means any qualified facility (as determined under
section 45(d) without regard to any placed in service
date) owned by a qualified borrower.
``(B) Refinancing rules.--For purposes of paragraph
(1)(B), a qualified project may be refinanced with
proceeds of a clean renewable energy bond only if the
indebtedness being refinanced (including any obligation
directly or indirectly refinanced by such indebtedness)
was originally incurred by a qualified borrower after
the date of the enactment of this section.
``(C) Reimbursement.--For purposes of paragraph
(1)(B), a clean renewable energy bond may be issued to
reimburse a qualified borrower for amounts paid after
the date of the enactment of this section with respect
to a qualified project, but only if--
``(i) prior to the payment of the original
expenditure, the qualified borrower declared
its intent to reimburse such expenditure with
the proceeds of a clean renewable energy bond,
``(ii) not later than 60 days after payment
of the original expenditure, the qualified
issuer adopts an official intent to reimburse
the original expenditure with such proceeds,
and
``(iii) the reimbursement is made not later
than 18 months after the date the original
expenditure is paid.
``(D) Treatment of changes in use.--For purposes of
paragraph (1)(B), the proceeds of an issue shall not be
treated as used for a qualified project to the extent
that a qualified borrower takes any action within its
control which causes such proceeds not to be used for a
qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may be
taken (including conditions to taking such remedial
actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
clean renewable energy bond.
``(e) Maturity Limitations.--
``(1) Duration of term.--A bond shall not be treated as a
clean renewable energy bond if the maturity of such bond
exceeds the maximum term determined by the Secretary under
paragraph (2) with respect to such bond.
``(2) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under this
paragraph for bonds issued during the following calendar month.
Such maximum term shall be the term which the Secretary
estimates will result in the present value of the obligation to
repay the principal on the bond being equal to 50 percent of
the face amount of such bond. Such present value shall be
determined using as a discount rate the average annual interest
rate of tax of tax-exempt obligations having a term of 10 years
or more which are issued during the month. If the term as so
determined is not a multiple of a whole year, such term shall
be rounded to the next highest whole year.
``(3) Ratable principal amortization required.--A bond
shall not be treated as a clean renewable energy bond unless it
is part of an issue which provides for an equal amount of
principal to be paid by the qualified issuer during each
calendar year that the issue is outstanding.
``(f) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national clean
renewable energy bond limitation of $1,000,000,000.
``(2) Allocation by secretary.--The Secretary shall
allocate the amount described in paragraph (1) among qualified
projects in such manner as the Secretary determines
appropriate.
``(g) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(h) Special Rules Relating to Expenditures.--
``(1) In general.--An issue shall be treated as meeting the
requirements of this subsection if, as of the date of issuance,
the qualified issuer reasonably expects--
``(A) at least 95 percent of the proceeds from the
sale of the issue are to be spent for 1 or more
qualified projects within the 5-year period beginning
on the date of issuance of the clean energy bond,
``(B) a binding commitment with a third party to
spend at least 10 percent of the proceeds from the sale
of the issue will be incurred within the 6-month period
beginning on the date of issuance of the clean energy
bond or, in the case of a clean energy bond the
proceeds of which are to be loaned to 2 or more
qualified borrowers, such binding commitment will be
incurred within the 6-month period beginning on the
date of the loan of such proceeds to a qualified
borrower, and
``(C) such projects will be completed with due
diligence and the proceeds from the sale of the issue
will be spent with due diligence.
``(2) Extension of period.--Upon submission of a request
prior to the expiration of the period described in paragraph
(1)(A), the Secretary may extend such period if the qualified
issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects
will continue to proceed with due diligence.
``(3) Failure to spend required amount of bond proceeds
within 5 years.--To the extent that less than 95 percent of the
proceeds of such issue are expended by the close of the 5-year
period beginning on the date of issuance (or if an extension
has been obtained under paragraph (2), by the close of the
extended period), the qualified issuer shall redeem all of the
nonqualified bonds within 90 days after the end of such period.
For purposes of this paragraph, the amount of the nonqualified
bonds required to be redeemed shall be determined in the same
manner as under section 142.
``(i) Special Rules Relating to Arbitrage.--A bond which is part of
an issue shall not be treated as a clean renewable energy bond unless,
with respect to the issue of which the bond is a part, the qualified
issuer satisfies the arbitrage requirements of section 148 with respect
to proceeds of the issue.
``(j) Cooperative Electric Company; Qualified Energy Tax Credit
Bond Lender; Governmental Body; Qualified Borrower.--For purposes of
this section--
``(1) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C), or a not-for-profit electric utility which has
received a loan or loan guarantee under the Rural
Electrification Act.
``(2) Clean renewable energy bond lender.--The term `clean
renewable energy bond lender' means a lender which is a
cooperative which is owned by, or has outstanding loans to, 100
or more cooperative electric companies and is in existence on
February 1, 2002, and shall include any affiliated entity which
is controlled by such lender.
``(3) Governmental body.--The term `governmental body'
means any State, territory, possession of the United States,
the District of Columbia, Indian tribal government, and any
political subdivision thereof.
``(4) Qualified issuer.--The term `qualified issuer'
means--
``(A) a clean renewable energy bond lender,
``(B) a cooperative electric company,
``(C) a governmental body, or
``(D) the Tennessee Valley Authority.
``(5) Qualified borrower.--The term `qualified borrower'
means--
``(A) a mutual or cooperative electric company
described in section 501(c)(12) or 1381(a)(2)(C),
``(B) a governmental body, or
``(C) the Tennessee Valley Authority.
``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled
financing bond may be allocable to any loan unless the borrower has
entered into a written loan commitment for such portion prior to the
issue date of such issue.
``(l) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Pooled financing bond.--The term `pooled financing
bond' shall have the meaning given such term by section
149(f)(4)(A).
``(3) Partnership; s corporation; and other pass-thru
entities.--
``(A) In general.--Under regulations prescribed by
the Secretary, in the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar
to the rules of section 41(g) shall apply with respect
to the credit allowable under subsection (a).
``(B) No basis adjustment.--Rules similar to the
rules under section 1397E(i)(2) shall apply.
``(4) Bonds held by regulated investment companies.--If any
clean renewable energy bond is held by a regulated investment
company, the credit determined under subsection (a) shall be
allowed to shareholders of such company under procedures
prescribed by the Secretary.
``(5) Treatment for estimated tax purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by this
section to a taxpayer by reason of holding a clean renewable
energy bond on a credit allowance date shall be treated as if
it were a payment of estimated tax made by the taxpayer on such
date.
``(6) Reporting.--Issuers of clean renewable energy bonds
shall submit reports similar to the reports required under
section 149(e).
``(m) Termination.--This section shall not apply with respect to
any bond issued after December 31, 2008.''.
(b) Reporting.--Subsection (d) of section 6049 (relating to returns
regarding payments of interest) is amended by adding at the end the
following new paragraph:
``(8) Reporting of credit on clean renewable energy
bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54(g) and such amounts shall
be treated as paid on the credit allowance date (as
defined in section 54(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(c) Conforming Amendments.--
(1) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:
``subpart h. nonrefundable credit to holders of certain bonds.''.
(2) Section 1397E(c)(2) is amended by inserting ``, and
subpart H thereof'' after ``refundable credits''.
(3) Section 6401(b)(1) is amended by striking ``and G'' and
inserting ``G, and H''.
(d) Issuance of Regulations.--The Secretary of Treasury shall issue
regulations required under section 54 of the Internal Revenue Code of
1986 (as added by this section) not later than 120 days after the date
of the enactment of this Act.
(e) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2005.
SEC. 1505. TREATMENT OF INCOME OF CERTAIN ELECTRIC COOPERATIVES.
(a) Elimination of Sunset on Treatment of Income From Open Access
and Nuclear Decommissioning Transactions.--Section 501(c)(12)(C) is
amended by striking the last sentence.
(b) Elimination of Sunset on Treatment of Income From Load Loss
Transactions.--Section 501(c)(12)(H) is amended by striking clause (x).
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 1506. DISPOSITIONS OF TRANSMISSION PROPERTY TO IMPLEMENT FERC
RESTRUCTURING POLICY.
(a) In General.--Section 451(i)(3) (defining qualifying electric
transmission transaction) is amended by striking ``2007'' and inserting
``2008''.
(b) Technical Amendment Related to Section 909 of the American Jobs
Creation Act of 2004.--Clause (ii) of section 451(i)(4)(B) is amended
by striking ``the close of the period applicable under subsection
(a)(2)(B) as extended under paragraph (2)'' and inserting ``December
31, 2007''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to transactions occurring after the date of the enactment
of this Act.
(2) Technical amendment.--The amendment made by subsection
(b) shall take effect as if included in the amendments made by
section 909 of the American Jobs Creation Act of 2004.
SEC. 1507. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits) is amended by adding after
section 45I the following new section:
``SEC. 45J. CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR POWER
FACILITIES.
``(a) General Rule.--For purposes of section 38, the advanced
nuclear power facility production credit of any taxpayer for any
taxable year is equal to the product of--
``(1) 1.8 cents, multiplied by
``(2) the kilowatt hours of electricity--
``(A) produced by the taxpayer at an advanced
nuclear power facility during the 8-year period
beginning on the date the facility was originally
placed in service, and
``(B) sold by the taxpayer to an unrelated person
during the taxable year.
``(b) National Limitation.--
``(1) In general.--The amount of credit which would (but
for this subsection and subsection (c)) be allowed with respect
to any facility for any taxable year shall not exceed the
amount which bears the same ratio to such amount of credit as--
``(A) the national megawatt capacity limitation
allocated to the facility, bears to
``(B) the total megawatt nameplate capacity of such
facility.
``(2) Amount of national limitation.--The national megawatt
capacity limitation shall be 6,000 megawatts.
``(3) Allocation of limitation.--The Secretary shall
allocate the national megawatt capacity limitation in such
manner as the Secretary may prescribe.
``(4) Regulations.--Not later than 6 months after the date
of the enactment of this section, the Secretary shall prescribe
such regulations as may be necessary or appropriate to carry
out the purposes of this subsection. Such regulations shall
provide a certification process under which the Secretary,
after consultation with the Secretary of Energy, shall approve
and allocate the national megawatt capacity limitation.
``(c) Other Limitations.--
``(1) Annual limitation.--The amount of the credit
allowable under subsection (a) (after the application of
subsection (b)) for any taxable year with respect to any
facility shall not exceed an amount which bears the same ratio
to $125,000,000 as--
``(A) the national megawatt capacity limitation
allocated under subsection (b) to the facility, bears
to
``(B) 1,000.
``(2) Other limitations.--Rules similar to the rules of
section 45(b)(1) shall apply for purposes of this section.
``(d) Advanced Nuclear Power Facility.--For purposes of this
section--
``(1) In general.--The term `advanced nuclear power
facility' means any advanced nuclear facility--
``(A) which is owned by the taxpayer and which uses
nuclear energy to produce electricity, and
``(B) which is placed in service after the date of
the enactment of this paragraph and before January 1,
2021.
``(2) Advanced nuclear facility.--For purposes of paragraph
(1), the term `advanced nuclear facility' means any nuclear
facility the reactor design for which is approved after
December 31, 1993, by the Nuclear Regulatory Commission (and
such design or a substantially similar design of comparable
capacity was not approved on or before such date).
``(e) Other Rules To Apply.--Rules similar to the rules of
paragraphs (1), (2), (3), (4), and (5) of section 45(e) shall apply for
purposes of this section.''
(b) Credit Treated as Business Credit.--Section 38(b) is amended by
striking ``plus'' at the end of paragraph (18), by striking the period
at the end of paragraph (19) and inserting ``, plus'', and by adding at
the end the following:
``(20) the advanced nuclear power facility production
credit determined under section 45J(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following:
``Sec. 45J. Credit for production from
advanced nuclear power
facilities.''.
(d) Effective Date.--The amendments made by this section shall
apply to production in taxable years beginning after the date of the
enactment of this Act.
SEC. 1508. CREDIT FOR INVESTMENT IN CLEAN COAL FACILITIES.
(a) In general.--Section 46 (relating to amount of credit) is
amended by striking ``and'' at the end of paragraph (1), by striking
the period at the end of paragraph (2), and by adding at the end the
following new paragraphs:
``(3) the qualifying advanced coal project credit, and
``(4) the qualifying gasification project credit.''.
(b) Amount of Credits.--Subpart E of part IV of subchapter A of
chapter 1 (relating to rules for computing investment credit) is
amended by inserting after section 48 the following new sections:
``SEC. 48A. QUALIFYING ADVANCED COAL PROJECT CREDIT.
``(a) In General.--For purposes of section 46, the qualifying
advanced coal project credit for any taxable year is an amount equal to
20 percent of the qualified investment for such taxable year.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
property placed in service by the taxpayer during such taxable
year which is part of a qualifying advanced coal project--
``(A)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Applicable rules.--For purposes of this section,
rules similar to the rules of subsection (a)(4) and (b) of
section 48 shall apply.
``(c) Definitions.--For purposes of this section--
``(1) Qualifying advanced coal project.--The term
`qualifying advanced coal project' means a project which meets
the requirements of subsection (e).
``(2) Advanced coal-based generation technology.--The term
`advanced coal-based generation technology' means a technology
which meets the requirements of subsection (g).
``(3) Coal.--The term `coal' means any carbonized or
semicarbonized matter, including peat.
``(4) Greenhouse gas capture capability.--The term
`greenhouse gas capture capability' means an integrated
gasification combined cycle technology facility capable of
adding components which can capture, separate on a long-term
basis, isolate, remove, and sequester greenhouse gases which
result from the generation of electricity.
``(5) Electric generation unit.--The term `electric
generation unit' means any facility at least 50 percent of the
total annual net output of which is electrical power, including
an otherwise eligible facility which is used in an industrial
application.
``(6) Integrated gasification combined cycle.--The term
`integrated gasification combined cycle' means an electric
generation unit which produces electricity by converting coal
to synthesis gas which is used to fuel a combined-cycle plant
which produces electricity from both a combustion turbine
(including a combustion turbine/fuel cell hybrid) and a steam
turbine.
``(d) Qualifying Advanced Coal Project Program.--
``(1) Establishment.--Not later than 180 days after the
date of enactment of this section, the Secretary, in
consultation with the Secretary of Energy, shall establish a
qualifying advanced coal project program for the deployment of
advanced coal-based generation technologies.
``(2) Certification.--
``(A) Application period.--Each applicant for
certification under this paragraph shall submit an
application meeting the requirements of subparagraph
(B). An applicant may only submit an application during
the 3-year period beginning on the date the Secretary
establishes the program under paragraph (1).
``(B) Requirements for applications for
certification.--An application under subparagraph (A)
shall contain such information as the Secretary may
require in order to make a determination to accept or
reject an application for certification as meeting the
requirements under subsection (e)(1). Any information
contained in the application shall be protected as
provided in section 552(b)(4) of title 5, United States
Code.
``(C) Time to act upon applications for
certification.--The Secretary shall issue a
determination as to whether an applicant has met the
requirements under subsection (e)(1) within 60 days
following the date of submittal of the application for
certification.
``(D) Time to meet criteria for certification.--
Each applicant for certification shall have 2 years
from the date of acceptance by the Secretary of the
application during which to provide to the Secretary
evidence that the criteria set forth in subsection
(e)(2) have been met.
``(E) Period of issuance.--An applicant which
receives a certification shall have 5 years from the
date of issuance of the certification in order to place
the project in service and if such project is not
placed in service by that time period then the
certification shall no longer be valid.''.
``(3) Aggregate generating capacity.--
``(A) In general.--The aggregate generating
capacity of projects certified by the Secretary under
paragraph (2) may not exceed 7,500 megawatts.
``(B) Particular projects.--Of the total megawatts
of capacity which the Secretary is authorized to
certify--
``(i) 4,125 megawatts shall be available
only for use for integrated gasification
combined cycle projects, and
``(ii) 3,375 megawatts shall be available
only for use for projects which use other
advanced coal-based generation technologies.
``(C) Determination of capacity.--In determining
capacity under this paragraph in the case of a
retrofitted or repowered plant, capacity shall be
determined based on total design capacity after the
retrofit or repowering of the existing facility is
accomplished.
``(5) Review and redistribution.--
``(A) Review.--Not later than 6 years after the
date of enactment of this section, the Secretary shall
review the projects certified and megawatts allocated
under this section as of the date which is 6 years
after the date of enactment of this section.
``(B) Redistribution.--The Secretary may reallocate
the megawatts available under clauses (i) and (ii) of
paragraph (3)(B) if the Secretary determines that--
``(i) capacity cannot be used because there
is an insufficient quantity of qualifying
applications for certification pending for any
available capacity at the time of the review,
or
``(ii) any certification made pursuant to
subsection paragraph (2) has not been revoked
pursuant to subsection paragraph (2)(D) because
the project subject to the certification has
been delayed as a result of third party
opposition or litigation to the proposed
project.
``(C) Reallocation.--If the Secretary determines
that megawatts under clause (i) or (ii) of paragraph
(3)(B) are available for reallocation pursuant to the
requirements set forth in paragraph (2), the Secretary
is authorized to conduct an additional program for
applications for certification.''.
``(e) Qualifying Advanced Coal Projects.--
``(1) Requirements.--For purposes of subsection (c)(1), a
project shall be considered a qualifying advanced coal project
that the Secretary may certify under subsection (d)(2) if the
Secretary determines that, at a minimum--
``(A) the project uses an advanced coal-based
generation technology--
``(i) to power a new electric generation
unit, or
``(ii) to retrofit or repower an existing
electric generation unit (including an existing
natural gas-fired combined cycle unit),
``(B) the fuel input for the project, when
completed, is at least 75 percent coal,
``(C) the project, consisting of one or more
electric generation units at one site, will have a
total nameplate generating capacity of at least 400
megawatts;
``(D) the applicant demonstrates that there is a
letter of intent signed by an officer of an entity
willing to purchase the majority of the output of the
project or signed by an officer of a utility indicating
that the electricity capacity addition is consistent
with that utility's integrated resource plan as
approved by the regulatory or governing body that
oversees electricity capacity allocations of the
utility;
``(E) there is evidence of ownership or control of
a site of sufficient size to allow the proposed project
to be constructed and to operate on a long-term basis;
and
``(F) the project will be located in the United
States.
``(2) Requirements for certification.--For the purpose of
subsection (d)(2)(D), a project shall be eligible for
certification only if the Secretary determines that--
``(A) the applicant for certification has received
all Federal and State environmental authorizations or
reviews necessary to commence construction of the
project; and
``(B) the applicant for certification, except in
the case of a retrofit or repower of an existing
electric generation unit, has purchased or entered into
a binding contract for the purchase of the main steam
turbine or turbines for the project, except that such
contract may be contingent upon receipt of a
certification under subsection (d)(2).''.
``(3) Priority for integrated gasification combined cycle
projects.--In determining which qualifying advanced coal
projects to certify under subsection (d)(2), the Secretary
shall--
``(A) certify capacity, in accordance with the
procedures set forth in subsection (d), in relatively
equal amounts to--
``(i) projects using bituminous coal as a
primary feedstock,
``(ii) projects using subbituminous coal as
a primary feedstock, and
``(iii) projects using lignite as a primary
feedstock, and
``(B) give high priority to projects which include,
as determined by the Secretary--
``(i) greenhouse gas capture capability,
``(ii) increased by-product utilization,
and
``(iii) other benefits.
``(g) Advanced Coal-Based Generation Technology.--
``(1) In general.--For the purpose of this section, an
electric generation unit uses advanced coal-based generation
technology if--
``(A) the unit--
``(i) uses integrated gasification combined
cycle technology, or
``(ii) except as provided in paragraph (3),
has a design net heat rate of 8530 Btu/kWh (40
percent efficiency), and
``(B) the unit is designed to meet the performance
requirements in the following table:
Performance characteristic: Design level for project:
SO2 (percent removal)........... 99 percent
NOx (emissions)................. 0.07 lbs/MMBTU
PM* (emissions)................. 0.015 lbs/MMBTU
Hg (percent removal)............ 90 percent
``(2) Design net heat rate.--For purposes of this
subsection, design net heat rate with respect to an electric
generation unit shall--
``(A) be measured in Btu per kilowatt hour (higher
heating value),
``(B) be based on the design annual heat input to
the unit and the rated net electrical power, fuels, and
chemicals output of the unit (determined without regard
to the cogeneration of steam by the unit),
``(C) be adjusted for the heat content of the
design coal to be used by the unit--
``(i) if the heat content is less than
13,500 Btu per pound, but greater than 7,000
Btu per pound, according to the following
formula: design net heat rate = unit net heat
rate x [1-{((13,500-design coal heat content,
Btu per pound)/1,000)* 0.013}], and
``(ii) if the heat content is less than or
equal to 7,000 Btu per pound, according to the
following formula: design net heat rate = unit
net heat rate x [1-{((13,500-design coal heat
content, Btu per pound)/1,000)* 0.018}], and
``(D) be corrected for the site reference
conditions of--
``(i) elevation above sea level of 500
feet,
``(ii) air pressure of 14.4 pounds per
square inch absolute,
``(iii) temperature, dry bulb of 63/o/F,
``(iv) temperature, wet bulb of 54/o/F, and
``(v) relative humidity of 55 percent.
(3) Existing units.--In the case of any electric generation
unit in existence on the date of the enactment of this section,
such unit uses advanced coal-based generation technology if, in
lieu of the requirements under paragraph (1)(A)(ii), such unit
achieves a minimum efficiency of 35 percent and an overall
thermal design efficiency improvement, compared to the
efficiency of the unit as operated, of not less than--
(A) 7 percentage points for coal of more than 9,000
Btu,
(B) 6 percentage points for coal of 7,000 to 9,000
Btu, or
(C) 4 percentage points for coal of less than 7,000
Btu.
``(h) Applicability.--No use of technology (or level of emission
reduction solely by reason of the use of the technology), and no
achievement of any emission reduction by the demonstration of any
technology or performance level, by or at one or more facilities with
respect to which a credit is allowed under this section, shall be
considered to indicate that the technology or performance level is--
``(1) adequately demonstrated for purposes of section 111
of the Clean Air Act (42 U.S. C. 7411);
``(2) achievable for purposes of section 169 of that Act
(42 U.S. C. 7479); or
``(3) achievable in practice for purposes of section 171 of
such Act (42 U.S.C. 7501).
``SEC. 48B. QUALIFYING GASIFICATION PROJECT CREDIT.
``(a) In General.--For purposes of section 46, the qualifying
gasification project credit for any taxable year is an amount equal to
20 percent of the qualified investment for such taxable year.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
property placed in service by the taxpayer during such taxable
year which is part of a qualifying gasification project--
``(A)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Applicable rules.--For purposes of this section,
rules similar to the rules of subsection (a)(4) and (b) of
section 48 shall apply.
``(c) Definitions.--For purposes of this section--
``(1) Qualifying gasification project.--The term
`qualifying gasification project' means any project which--
``(A) employs gasification technology,
``(B) will be carried out by an eligible entity,
and
``(C) any portion of the qualified investment in
which is certified under the qualifying gasification
program as eligible for credit under this section in an
amount (not to exceed $1,000,000,000) determined by the
Secretary.
``(2) Gasification technology.--The term `gasification
technology' means any process which converts a solid or liquid
product from coal, petroleum residue, biomass, or other
materials which are recovered for their energy or feedstock
value into a synthesis gas composed primarily of carbon
monoxide and hydrogen for direct use or subsequent chemical or
physical conversion.
``(3) Biomass.--
``(A) In general.--The term `biomass' means any--
``(i) agricultural or plant waste,
``(ii) byproduct of wood or paper mill
operations, including lignin in spent pulping
liquors, and
``(iii) other products of forestry
maintenance.
``(B) Exclusion.--The term `biomass' does not
include paper which is commonly recycled.
``(4) Carbon capture capability.--The term `carbon capture
capability' means a gasification plant design which is
determined by the Secretary to reflect reasonable consideration
for, and be capable of, accommodating the equipment likely to
be necessary to capture carbon dioxide from the gaseous stream,
for later use or sequestration, which would otherwise be
emitted in the flue gas from a project which uses a
nonrenewable fuel.
``(5) Coal.--The term `coal' means any carbonized or
semicarbonized matter, including peat.
``(6) Eligible entity.--The term `eligible entity' means
any person whose application for certification is principally
intended for use in a domestic project which employs domestic
gasification applications related to--
``(A) chemicals,
``(B) fertilizers,
``(C) glass,
``(D) steel,
``(E) petroleum residues,
``(F) forest products, and
``(G) agriculture, including feedlots and dairy
operations.
``(7) Petroleum residue.--The term `petroleum residue'
means the carbonized product of high-boiling hydrocarbon
fractions obtained in petroleum processing.
``(d) Qualifying Gasification Project Program.--
``(1) In general.--The Secretary, in consultation with the
Secretary of Energy, shall establish a qualifying gasification
project program to consider and award certifications for
qualified investment eligible for credits under this section to
qualifying gasification project sponsors under this section.
The total qualified investment which may be awarded eligibility
for credit under the program shall not exceed $4,000,000,000.
``(2) Period of issuance.--A certificate of eligibility
under paragraph (1) may be issued only during the 10-fiscal
year period beginning on October 1, 2005.
``(3) Selection criteria.--The Secretary shall not make a
competitive certification award for qualified investment for
credit eligibility under this section unless the recipient has
documented to the satisfaction of the Secretary that--
``(A) the award recipient is financially viable
without the receipt of additional Federal funding
associated with the proposed project,
``(B) the recipient will provide sufficient
information to the Secretary for the Secretary to
ensure that the qualified investment is spent
efficiently and effectively,
``(C) a market exists for the products of the
proposed project as evidenced by contracts or written
statements of intent from potential customers,
``(D) the fuels identified with respect to the
gasification technology for such project will comprise
at least 90 percent of the fuels required by the
project for the production of chemical feedstocks,
liquid transportation fuels, or coproduction of
electricity,
``(E) the award recipient's project team is
competent in the construction and operation of the
gasification technology proposed, with preference given
to those recipients with experience which demonstrates
successful and reliable operations of the technology on
domestic fuels so identified, and
``(F) the award recipient has met other criteria
established and published by the Secretary.''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (ii), by striking clause (iii), and by adding
after clause (ii) the following new clauses:
``(iii) the basis of any property which is
part of a qualifying advanced coal project
under section 48A, and
``(iv) the basis of any property which is
part of a qualifying gasification project under
section 48B.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48 the following new items:
``48A. Qualifying advanced coal project credit.
``48B. Qualifying gasification project credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, under
rules similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990).
SEC. 1509. CLEAN ENERGY COAL BONDS.
(a) In General.--Subpart H of part IV of subchapter A of chapter 1
(relating to credits against tax), as added by this Act, is amended by
adding at the end the following new section:
``SEC. 54A. CREDIT TO HOLDERS OF CLEAN ENERGY COAL BONDS.
``(a) Allowance of Credit.--If a taxpayer holds a clean energy coal
bond on 1 or more credit allowance dates of the bond occurring during
any taxable year, there shall be allowed as a credit against the tax
imposed by this chapter for the taxable year an amount equal to the sum
of the credits determined under subsection (b) with respect to such
dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection with respect to any credit allowance date
for a clean energy coal bond is 25 percent of the annual credit
determined with respect to such bond.
``(2) Annual credit.--The annual credit determined with
respect to any clean energy coal bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), with
respect to any clean energy coal bond, the Secretary shall
determine daily or cause to be determined daily a credit rate
which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of clean energy coal bonds with a specified maturity or
redemption date without discount and without interest cost to
the qualified issuer.
``(4) Credit allowance date.--For purposes of this section,
the term `credit allowance date' means--
``(A) March 15,
``(B) June 15,
``(C) September 15, and
``(D) December 15.
Such term also includes the last day on which the bond is
outstanding.
``(5) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this subsection with respect to such credit allowance
date shall be a ratable portion of the credit otherwise
determined based on the portion of the 3-month period during
which the bond is outstanding. A similar rule shall apply when
the bond is redeemed or matures.
``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this part
(other than subpart C thereof (relating to refundable credits)
and this section) and section 1397E.
``(d) Clean Energy Coal Bond.--For purposes of this section--
``(1) In general.--The term `clean energy coal bond' means
any bond issued as part of an issue if--
``(A) the bond is issued by a qualified issuer
pursuant to an allocation by the Secretary to such
issuer of a portion of the national clean energy coal
bond limitation under subsection (f)(2),
``(B) 95 percent or more of the proceeds from the
sale of such issue are to be used for capital
expenditures incurred by qualified borrowers for 1 or
more qualified projects,
``(C) the qualified issuer designates such bond for
purposes of this section and the bond is in registered
form, and
``(D) the issue meets the requirements of
subsection (h).
``(2) Qualified project; special use rules.--
``(A) In general.--The term `qualified project'
means a qualifying advanced coal project (as defined in
section 48A(c)(1)) placed in service by a qualified
borrower.
``(B) Refinancing rules.--For purposes of paragraph
(1)(B), a qualified project may be refinanced with
proceeds of a clean energy coal bond only if the
indebtedness being refinanced (including any obligation
directly or indirectly refinanced by such indebtedness)
was originally incurred by a qualified borrower after
the date of the enactment of this section.
``(C) Reimbursement.--For purposes of paragraph
(1)(B), a clean energy coal bond may be issued to
reimburse a qualified borrower for amounts paid after
the date of the enactment of this section with respect
to a qualified project, but only if--
``(i) prior to the payment of the original
expenditure, the qualified borrower declared
its intent to reimburse such expenditure with
the proceeds of a clean energy coal bond,
``(ii) not later than 60 days after payment
of the original expenditure, the qualified
issuer adopts an official intent to reimburse
the original expenditure with such proceeds,
and
``(iii) the reimbursement is made not later
than 18 months after the date the original
expenditure is paid.
``(D) Treatment of changes in use.--For purposes of
paragraph (1)(B), the proceeds of an issue shall not be
treated as used for a qualified project to the extent
that a qualified borrower takes any action within its
control which causes such proceeds not to be used for a
qualified project. The Secretary shall prescribe
regulations specifying remedial actions that may be
taken (including conditions to taking such remedial
actions) to prevent an action described in the
preceding sentence from causing a bond to fail to be a
clean energy coal bond.
``(e) Maturity Limitations.--
``(1) Duration of term.--A bond shall not be treated as a
clean energy coal bond if the maturity of such bond exceeds the
maximum term determined by the Secretary under paragraph (2)
with respect to such bond.
``(2) Maximum term.--During each calendar month, the
Secretary shall determine the maximum term permitted under this
paragraph for bonds issued during the following calendar month.
Such maximum term shall be the term which the Secretary
estimates will result in the present value of the obligation to
repay the principal on the bond being equal to 50 percent of
the face amount of such bond. Such present value shall be
determined using as a discount rate the average annual interest
rate of tax of tax-exempt obligations having a term of 10 years
or more which are issued during the month. If the term as so
determined is not a multiple of a whole year, such term shall
be rounded to the next highest whole year.
``(3) Ratable principal amortization required.--A bond
shall not be treated as a clean energy coal bond unless it is
part of an issue which provides for an equal amount of
principal to be paid by the qualified issuer during each
calendar year that the issue is outstanding.
``(f) Limitation on Amount of Bonds Designated.--
``(1) National limitation.--There is a national clean
energy coal bond limitation of $1,000,000,000.
``(2) Allocation by secretary.--The Secretary shall
allocate the amount described in paragraph (1) among qualified
projects in such manner as the Secretary determines
appropriate.
``(g) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(h) Special Rules Relating to Expenditures.--
``(1) In general.--An issue shall be treated as meeting the
requirements of this subsection if, as of the date of issuance,
the qualified issuer reasonably expects--
``(A) at least 95 percent of the proceeds from the
sale of the issue are to be spent for 1 or more
qualified projects within the 5-year period beginning
on the date of issuance of the clean energy bond,
``(B) a binding commitment with a third party to
spend at least 10 percent of the proceeds from the sale
of the issue will be incurred within the 6-month period
beginning on the date of issuance of the clean energy
bond or, in the case of a clean energy bond the
proceeds of which are to be loaned to 2 or more
qualified borrowers, such binding commitment will be
incurred within the 6-month period beginning on the
date of the loan of such proceeds to a qualified
borrower, and
``(C) such projects will be completed with due
diligence and the proceeds from the sale of the issue
will be spent with due diligence.
``(2) Extension of period.--Upon submission of a request
prior to the expiration of the period described in paragraph
(1)(A), the Secretary may extend such period if the qualified
issuer establishes that the failure to satisfy the 5-year
requirement is due to reasonable cause and the related projects
will continue to proceed with due diligence.
``(3) Failure to spend required amount of bond proceeds
within 5 years.--To the extent that less than 95 percent of the
proceeds of such issue are expended by the close of the 5-year
period beginning on the date of issuance (or if an extension
has been obtained under paragraph (2), by the close of the
extended period), the qualified issuer shall redeem all of the
nonqualified bonds within 90 days after the end of such period.
For purposes of this paragraph, the amount of the nonqualified
bonds required to be redeemed shall be determined in the same
manner as under section 142.
``(i) Special Rules Relating to Arbitrage.--A bond which is part of
an issue shall not be treated as a clean energy coal bond unless, with
respect to the issue of which the bond is a part, the qualified issuer
satisfies the arbitrage requirements of section 148 with respect to
proceeds of the issue.
``(j) Cooperative Electric Company; Qualified Energy Tax Credit
Bond Lender; Governmental Body; Qualified Borrower.--For purposes of
this section--
``(1) Cooperative electric company.--The term `cooperative
electric company' means a mutual or cooperative electric
company described in section 501(c)(12) or section
1381(a)(2)(C), or a not-for-profit electric utility which has
received a loan or loan guarantee under the Rural
Electrification Act.
``(2) Clean energy bond lender.--The term `clean energy
bond lender' means a lender which is a cooperative which is
owned by, or has outstanding loans to, 100 or more cooperative
electric companies and is in existence on February 1, 2002, and
shall include any affiliated entity which is controlled by such
lender.
``(3) Governmental body.--The term `governmental body'
means any State, territory, possession of the United States,
the District of Columbia, Indian tribal government, and any
political subdivision thereof.
``(4) Qualified issuer.--The term `qualified issuer'
means--
``(A) a clean energy bond lender,
``(B) a cooperative electric company,
``(C) a governmental body, or
``(D) the Tennessee Valley Authority.
``(5) Qualified borrower.--The term `qualified borrower'
means--
``(A) a mutual or cooperative electric company
described in section 501(c)(12) or 1381(a)(2)(C),
``(B) a governmental body, or
``(C) the Tennessee Valley Authority.
``(k) Special Rules Relating to Pool Bonds.--No portion of a pooled
financing bond may be allocable to any loan unless the borrower has
entered into a written loan commitment for such portion prior to the
issue date of such issue.
``(l) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Pooled financing bond.--The term `pooled financing
bond' shall have the meaning given such term by section
149(f)(4)(A).
``(3) Partnership; s corporation; and other pass-thru
entities.--
``(A) In general.--Under regulations prescribed by
the Secretary, in the case of a partnership, trust, S
corporation, or other pass-thru entity, rules similar
to the rules of section 41(g) shall apply with respect
to the credit allowable under subsection (a).
``(B) No basis adjustment.--Rules similar to the
rules under section 1397E(i)(2) shall apply.
``(4) Bonds held by regulated investment companies.--If any
clean energy coal bond is held by a regulated investment
company, the credit determined under subsection (a) shall be
allowed to shareholders of such company under procedures
prescribed by the Secretary.
``(5) Treatment for estimated tax purposes.--Solely for
purposes of sections 6654 and 6655, the credit allowed by this
section to a taxpayer by reason of holding a clean energy coal
bond on a credit allowance date shall be treated as if it were
a payment of estimated tax made by the taxpayer on such date.
``(6) Reporting.--Issuers of clean energy coal bonds shall
submit reports similar to the reports required under section
149(e).
``(m) Termination.--This section shall not apply with respect to
any bond issued after December 31, 2010.''.
(b) Reporting.--Subsection (d) of section 6049 (relating to returns
regarding payments of interest), as amended by this Act, is amended by
adding at the end the following new paragraph:
``(9) Reporting of credit on clean energy coal bonds.--
``(A) In general.--For purposes of subsection (a),
the term `interest' includes amounts includible in
gross income under section 54A(g) and such amounts
shall be treated as paid on the credit allowance date
(as defined in section 54A(b)(4)).
``(B) Reporting to corporations, etc.--Except as
otherwise provided in regulations, in the case of any
interest described in subparagraph (A), subsection
(b)(4) shall be applied without regard to subparagraphs
(A), (H), (I), (J), (K), and (L)(i) of such subsection.
``(C) Regulatory authority.--The Secretary may
prescribe such regulations as are necessary or
appropriate to carry out the purposes of this
paragraph, including regulations which require more
frequent or more detailed reporting.''.
(c) Clerical Amendment.--The table of sections for subpart H of
part IV of subchapter A of chapter 1, as added by this Act, is amended
by adding at the end the following new item:
``Sec. 54A. Credit to holders of clean energy coal bonds.''.
(d) Issuance of Regulations.--The Secretary of Treasury shall issue
regulations required under section 54A of the Internal Revenue Code of
1986 (as added by this section) not later than 120 days after the date
of the enactment of this Act.
(e) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2005.
Subtitle B--Domestic Fossil Fuel Security
SEC. 1511. CREDIT FOR INVESTMENT IN CLEAN COKE/COGENERATION
MANUFACTURING FACILITIES.
(a) Allowance of Clean Coke/Cogeneration manufacturing facilities
credit.--Section 46 (relating to amount of credit), as amended by this
Act, is amended by striking ``and'' at the end of paragraph (3), by
striking the period at the end of paragraph (4), and inserting ``,
and'', and by adding at the end the following new paragraph:
``(5) the clean coke/cogeneration manufacturing facilities
credit.''.
(b) Amount of Clean Coke/Cogeneration Manufacturing Facilities
Credit.--Subpart E of part IV of subchapter A of chapter 1 (relating to
rules for computing investment credit), as amended by this Act, is
amended by inserting after section 48B the following new section:
``SEC. 48C. CLEAN COKE/COGENERATION MANUFACTURING FACILITIES CREDIT.
``(a) In General.--For purposes of section 46, the clean coke/
cogeneration manufacturing facilities credit for any taxable year is an
amount equal to 20 percent of the qualified investment for such taxable
year.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of each
clean coke/cogeneration manufacturing facilities property
placed in service by the taxpayer during such taxable year.
``(2) Clean coke/cogeneration manufacturing facilities
property.--For purposes of this section, the term `clean coke/
cogeneration manufacturing facilities property' means real and
tangible personal property which--
``(A) is depreciable under section 167,
``(B) is located in the United States,
``(C) is used for the manufacture of metallurgical
coke or for the production of steam or electricity from
waste heat generated during the production of
metallurgical coke, and
``(D) does not exceed any of the following emission
limitations--
``(i) 0.0 percent leaking for any coke oven
doors unless the operation of ovens is under
negative pressure,
``(ii) 0.0 percent leaking for any topside
port lids,
``(iii) 0.0 percent leaking for any offtake
system,
determined as provided for in section 63.303(b)(1)(ii)
or 63.309(d)(1) of title 40, Code of Federal
Regulations.
``(c) Termination.--This subsection shall not apply to property for
periods after December 31, 2009.''.
(c) Technical Amendment.--Section 50(c) is amended by adding at the
end the following new paragraph:
``(6) Special rule for coke/cogeneration facilities.--
Paragraphs (1) and (2) shall not apply to any property with
respect to the credit determined under section 48C.''.
(d) Conforming Amendments.--
(1) Section 49(a)(1)(C), as amended by this Act, is amended
by striking ``and'' at the end of clause (iii), by striking the
period at the end of clause (iv) and inserting ``, and'', and
by adding at the end the following new clause:
``(v) the basis of any clean coke/
cogeneration manufacturing facilities
property.''
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 48B the
following new item:
``48C. Clean coke/cogeneration manufacturing facilities credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2004, under rules similar to the
rules of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
SEC. 1512. TEMPORARY EXPENSING FOR EQUIPMENT USED IN REFINING OF LIQUID
FUELS.
(A) In General.--Part VI of subchapter B of chapter 1 is amended by
inserting after section 179B the following new section:
``SEC. 179C. ELECTION TO EXPENSE CERTAIN REFINERIES.
``(a) Treatment as Expenses.--A taxpayer may elect to treat the
cost of any qualified refinery property as an expense which is not
chargeable to capital account. Any cost so treated shall be allowed as
a deduction for the taxable year in which the qualified refinery is
placed in service.
``(b) Election.--
``(1) In general.--An election under this section for any
taxable year shall be made on the taxpayer's return of the tax
imposed by this chapter for the taxable year. Such election
shall be made in such manner as the Secretary may by
regulations prescribe.
``(2) Election irrevocable.--Any election made under this
section may not be revoked except with the consent of the
Secretary.
``(c) Qualified Refinery Property.--The term `qualified refinery
property' means any refinery or portion of a refinery--
``(1) the original use of which commences with the
taxpayer,
``(2) the construction of which--
``(A) except as provided in subparagraph (B), is
subject to a binding construction contract entered into
after June 14, 2005, and before January 1, 2008, but
only if there was no written binding construction
contract entered into on or before June 14, 2005, or
``(B) in the case of self-constructed property,
began after June 14, 2005,
``(3) which is placed in service by the taxpayer after the
date of the enactment of this section and before January 1,
2012,
``(4) in the case of any portion of a refinery, which meets
the requirements of subsection (d), and
``(5) which meets all applicable environmental laws in
effect on the date such refinery or portion thereof was placed
in service.
A waiver under the Clean Air Act shall not be taken into account in
determining whether the requirements of paragraph (5) are met.
``(d) Production Capacity.--The requirements of this subsection are
met if the portion of the refinery--
``(1) increases the rated capacity of the existing refinery
by 5 percent or more over the capacity of such refinery as
reported by the Energy Information Agency on January 1, 2005,
or
``(2) enables the existing refinery to process qualified
fuels (as defined in section 29(c)) at a rate which is equal to
or greater than 25 percent of the total throughput of such
refinery on an average daily basis.
``(e) Election To Allocate Deduction to Cooperative Owner.--If--
``(1) a taxpayer to which subsection (a) applies is an
organization to which part I of subchapter T applies, and
``(2) one or more persons directly holding an ownership
interest in the taxpayer are organizations to which part I of
subchapter T apply,
the taxpayer may elect to allocate all or a portion of the deduction
allowable under subsection (a) to such persons. Such allocation shall
be equal to the person's ratable share of the total amount allocated,
determined on the basis of the person's ownership interest in the
taxpayer. The taxable income of the taxpayer shall not be reduced under
section 1382 by reason of any amount to which the preceding sentence
applies.
``(f) Ineligible Refineries.--No deduction shall be allowed under
subsection (a) for any qualified refinery property--
``(1) the primary purpose of which is for use as a topping
plant, asphalt plant, lube oil facility, crude or product
terminal, or blending facility, or
``(2) which is built solely to comply with Federally
mandated projects or consent decrees.
``(g) Reporting.--No deduction shall be allowed under subsection
(a) to any taxpayer for any taxable year unless such taxpayer files
with the Secretary a report containing such information with respect to
the operation of the refineries of the taxpayer as the Secretary shall
require.''.
(b) Conforming Amendments.--
(1) Section 1245(a) is amended by inserting ``179C,'' after
``179B,'' both places it appears in paragraphs (2)(C) and
(3)(C).
(2) Section 263(a)(1) is amended by striking ``or'' at the
end of subparagraph (H), by striking the period at the end of
subparagraph (I) and inserting ``, or'', and by inserting after
subparagraph (I) the following new subparagraph:
``(J) expenditures for which a deduction is allowed
under section 179C.''.
(3) Section 312(k)(3)(B) is amended by striking ``179 179A,
or 179B'' each place it appears in the heading and text and
inserting ``179, 179A, 179B, or 179C''.
(4) The table of sections for part VI of subchapter B of
chapter 1 is amended by inserting after the item relating to
section 179B the following new item:
``Sec. 179C. Election to expense certain refineries.''.
(c) Effective Date.-- The amendments made by this section shall
apply to properties placed in service after the date of the enactment
of this Act.
SEC. 1513. PASS THROUGH TO OWNERS OF DEDUCTION FOR CAPITAL COSTS
INCURRED BY SMALL REFINER COOPERATIVES IN COMPLYING WITH
ENVIRONMENTAL PROTECTION AGENCY SULFUR REGULATIONS.
(a) In General.--Section 179B (relating to deduction for capital
costs incurred in complying with Environmental Protection Agency sulfur
regulations) is amended by adding at the end the following new
subsection:
``(e) Election To Allocate Deduction to Cooperative Owner.--If--
``(1) a small business refiner to which subsection (a)
applies is an organization to which part I of subchapter T
applies, and
``(2) one or more persons directly holding an ownership
interest in the refiner are organizations to which part I of
subchapter T apply,
the refiner may elect to allocate all or a portion of the deduction
allowable under subsection (a) to such persons. Such allocation shall
be equal to the person's ratable share of the total amount allocated,
determined on the basis of the person's ownership interest in the
taxpayer. The taxable income of the refiner shall not be reduced under
section 1382 by reason of any amount to which the preceding sentence
applies.''.
(b) Effective date.--The amendment made by this section shall take
effect as if included in the amendment made by section 338(a) of the
American Jobs Creation Act of 2004.
SEC. 1514. MODIFICATIONS TO ENHANCED OIL RECOVERY CREDIT.
(a) Enhanced Credit for Carbon Dioxide Injections.--Section 43 is
amended by adding at the end the following new subsection:
``(f) Enhanced credit for projects using qualified carbon
dioxide.--
``(1) In general.--In the case of any qualified enhanced
oil recovery project described in paragraph (2), subsection (a)
shall be applied by substituting `20 percent' for `15 percent'.
``(2) Specified qualified enhanced oil recovery project.--
``(A) In general.--A qualified enhanced oil
recovery project is described in this paragraph if--
``(i) the project begins or is
substantially expanded after December 31, 2005,
and
``(ii) the project uses qualified carbon
dioxide in an oil recovery method which
involves flooding or injection.
``(B) qualified carbon dioxide.--For purposes of
this subsection, the term `qualified carbon dioxide'
means carbon dioxide that is--
``(i) from an industrial source, or
``(ii) separated from natural gas and
natural gas liquids at a natural gas processing
plant.
``(3) Termination.--This subsection shall not apply to
costs paid or incurred for any qualified enhanced oil recovery
project after December 31, 2009.''.
(b) Deep Gas Well Projects.--Section 43(c) is amended by adding at
the end the following new paragraph:
``(6) Application of section to qualified deep gas well
projects.--
``(A) In general.--For purposes of this section,
the taxpayer's qualified deep gas well project costs
for any taxable year shall be treated in the same
manner as if they were qualified enhanced oil recovery
costs.
``(B) Qualified deep gas well project costs.--For
purposes of this paragraph, the term `qualified deep
gas well project costs' shall be the costs determined
under paragraph (1) by substituting `qualified deep gas
well project' for `qualified enhanced oil recovery
project' each place it appears.
``(C) Qualified deep gas well project.--For
purposes of this paragraph, the term `qualified deep
gas well project' means any project--
``(i) which involves the production of
natural gas from onshore formations deeper than
20,000 feet, and
``(ii) which is located in the United
States.
``(D) Termination.--This paragraph shall not apply
to qualified deep gas well project costs paid or
incurred after December 31, 2009.''.
(c) Effective date.--The amendments made by this section shall
apply to costs paid or incurred in taxable years ending after December
31, 2005.
SEC. 1515. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR PROPERTY.
(a) In General.--Section 168(e)(3)(E) (defining 15-year property)
is amended by striking ``and'' at the end of clause (v), by striking
the period at the end of clause (vi) and by inserting ``, and'', and by
adding at the end the following new clause:
``(vii) any natural gas distribution line
the original use of which commences with the
taxpayer and which is placed in service before
January 1, 2008.''.
(b) Alternative System.--The table contained in section
168(g)(3)(B) (relating to special rule for certain property assigned to
classes) is amended by adding after the item relating to subparagraph
(E)(vi) the following new item:
``(E)(vii)..................................................... 35''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service after the date of the
enactment of this Act.
(2) Exception.--The amendments made by this section shall
not apply to any property with respect to which the taxpayer or
a related party has entered into a binding contract for the
construction thereof on or before June 14, 2005, or, in the
case of self-constructed property, has started construction on
or before such date.
Subtitle C--Conservation and Energy Efficiency Provisions
SEC. 1521. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
(a) In General.--Part VI of subchapter B of chapter 1 (relating to
itemized deductions for individuals and corporations), as amended by
this Act, is amended by inserting after section 179C the following new
section:
``SEC. 179D. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
``(a) In General.--There shall be allowed as a deduction an amount
equal to the cost of energy efficient commercial building property
placed in service during the taxable year.
``(b) Maximum Amount of Deduction.--The deduction under subsection
(a) with respect to any building for any taxable year shall not exceed
the excess (if any) of--
``(1) the product of--
``(A) $2.25, and
``(B) the square footage of the building, over
``(2) the aggregate amount of the deductions under
subsection (a) with respect to the building for all prior
taxable years.
``(c) Definitions.--For purposes of this section--
``(1) Energy efficient commercial building property.--The
term `energy efficient commercial building property' means
property--
``(A) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable,
``(B) which is installed on or in any building
which is--
``(i) located in the United States, and
``(ii) within the scope of Standard 90.1-
2001,
``(C) which is installed as part of--
``(i) the interior lighting systems,
``(ii) the heating, cooling, ventilation,
and hot water systems, or
``(iii) the building envelope, and
``(D) which is certified in accordance with
subsection (d)(6) as being installed as part of a plan
designed to reduce the total annual energy and power
costs with respect to the interior lighting systems,
heating, cooling, ventilation, and hot water systems of
the building by 50 percent or more in comparison to a
reference building which meets the minimum requirements
of Standard 90.1-2001 using methods of calculation
under subsection (d)(2).
``(2) Standard 90.1-2001.--The term `Standard 90.1-2001'
means Standard 90.1-2001 of the American Society of Heating,
Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (as in effect
on April 2, 2003).
``(d) Special Rules.--
``(1) Partial allowance.--
``(A) In general.--Except as provided in subsection
(f), if--
``(i) the requirement of subsection
(c)(1)(D) is not met, but
``(ii) there is a certification in
accordance with paragraph (6) that any system
referred to in subsection (c)(1)(C) satisfies
the energy-savings targets established by the
Secretary under subparagraph (B) with respect
to such system,
then the requirement of subsection (c)(1)(D) shall be
treated as met with respect to such system, and the
deduction under subsection (a) shall be allowed with
respect to energy efficient commercial building
property installed as part of such system and as part
of a plan to meet such targets, except that subsection
(b) shall be applied to such property by substituting
`$.75' for `$2.25'.
``(B) Regulations.--The Secretary, after
consultation with the Secretary of Energy, shall
establish a target for each system described in
subsection (c)(1)(C) which, if such targets were met
for all such systems, the building would meet the
requirements of subsection (c)(1)(D).
``(2) Methods of calculation.--The Secretary, after
consultation with the Secretary of Energy, shall promulgate
regulations which describe in detail methods for calculating
and verifying energy and power consumption and cost, based on
the provisions of the 2005 California Nonresidential
Alternative Calculation Method Approval Manual.
``(3) Computer software.--
``(A) In general.--Any calculation under paragraph
(2) shall be prepared by qualified computer software.
``(B) Qualified computer software.--For purposes of
this paragraph, the term `qualified computer software'
means software--
``(i) for which the software designer has
certified that the software meets all
procedures and detailed methods for calculating
energy and power consumption and costs as
required by the Secretary,
``(ii) which provides such forms as
required to be filed by the Secretary in
connection with energy efficiency of property
and the deduction allowed under this section,
and
``(iii) which provides a notice form which
documents the energy efficiency features of the
building and its projected annual energy costs.
``(4) Allocation of deduction for public property.--In the
case of energy efficient commercial building property installed
on or in property owned by a Federal, State, or local
government or a political subdivision thereof, the Secretary
shall promulgate a regulation to allow the allocation of the
deduction to the person primarily responsible for designing the
property in lieu of the owner of such property. Such person
shall be treated as the taxpayer for purposes of this section.
``(5) Notice to owner.--Each certification required under
this section shall include an explanation to the building owner
regarding the energy efficiency features of the building and
its projected annual energy costs as provided in the notice
under paragraph (3)(B)(iii).
``(6) Certification.--
``(A) In general.--The Secretary shall prescribe
the manner and method for the making of certifications
under this section.
``(B) Procedures.--The Secretary shall include as
part of the certification process procedures for
inspection and testing by qualified individuals
described in subparagraph (C) to ensure compliance of
buildings with energy-savings plans and targets. Such
procedures shall be comparable, given the difference
between commercial and residential buildings, to the
requirements in the Mortgage Industry National
Accreditation Procedures for Home Energy Rating
Systems.
``(C) Qualified individuals.--Individuals qualified
to determine compliance shall be only those individuals
who are recognized by an organization certified by the
Secretary for such purposes.
``(e) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any energy
efficient commercial building property, the basis of such property
shall be reduced by the amount of the deduction so allowed.
``(f) Interim Rules for Lighting Systems.--Until such time as the
Secretary issues final regulations under subsection (d)(1)(B) with
respect to property which is part of a lighting system--
``(1) In general.--The lighting system target under
subsection (d)(1)(A)(ii) shall be a reduction in lighting power
density of 25 percent (50 percent in the case of a warehouse)
of the minimum requirements in Table 9.3.1.1 or Table 9.3.1.2
(not including additional interior lighting power allowances)
of Standard 90.1-2001.
``(2) Reduction in deduction if reduction less than 40
percent.--
``(A) In general.--If, with respect to the lighting
system of any building other than a warehouse, the
reduction in lighting power density of the lighting
system is not at least 40 percent, only the applicable
percentage of the amount of deduction otherwise
allowable under this section with respect to such
property shall be allowed.
``(B) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage is the
number of percentage points (not greater than 100)
equal to the sum of--
``(i) 50, and
``(ii) the amount which bears the same
ratio to 50 as the excess of the reduction of
lighting power density of the lighting system
over 25 percentage points bears to 15.
``(C) Exceptions.--This subsection shall not apply
to any system--
``(i) the controls and circuiting of which
do not comply fully with the mandatory and
prescriptive requirements of Standard 90.1-2001
and which do not include provision for bilevel
switching in all occupancies except hotel and
motel guest rooms, store rooms, restrooms, and
public lobbies, or
``(ii) which does not meet the minimum
requirements for calculated lighting levels as
set forth in the Illuminating Engineering
Society of North America Lighting Handbook,
Performance and Application, Ninth Edition,
2000.
``(g) Coordination With Other Tax Benefits.--In any case in which a
deduction under section 200 or a credit under section 25C has been
allowed with respect to property in connection with a building for
which a deduction is allowable under subsection (a)--
``(1) the annual energy and power costs of the reference
building referred to in subsection (c)(1)(D) shall be
determined assuming such reference building contains the
property for which such deduction or credit has been allowed,
and
``(2) any cost of such property taken into account under
such sections shall not be taken into account under this
section.
``(h) Regulations.--The Secretary shall promulgate such regulations
as necessary--
``(1) to take into account new technologies regarding
energy efficiency and renewable energy for purposes of
determining energy efficiency and savings under this section,
and
``(2) to provide for a recapture of the deduction allowed
under this section if the plan described in subsection
(c)(1)(D) or (d)(1)(A) is not fully implemented.
``(i) Termination.--This section shall not apply with respect to
property placed in service after December 31, 2009.''.
(b) Conforming Amendments.--
(1) Section 1016(a) is amended by striking ``and'' at the
end of paragraph (30), by striking the period at the end of
paragraph (31) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(32) to the extent provided in section 179D(e).''.
(2) Section 1245(a), as amended by this Act, is amended by
inserting ``179D,'' after ``179C,'' both places it appears in
paragraphs (2)(C) and (3)(C).
(3) Section 1250(b)(3) is amended by inserting before the
period at the end of the first sentence ``or by section 179D''.
(4) Section 263(a)(1), as amended by this Act, is amended
by striking ``or'' at the end of subparagraph (I), by striking
the period at the end of subparagraph (J) and inserting ``,
or'', and by inserting after subparagraph (J) the following new
subparagraph:
``(K) expenditures for which a deduction is allowed
under section 179D.''.
(5) Section 312(k)(3)(B), as amended by this Act, is
amended by striking ``179, 179A, 179B, or 179C'' each place it
appears in the heading and text and inserting ``179, 179A,
179B, 179C, or 179D''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1, as amended by this Act, is amended by
inserting after section 179C the following new item:
``Sec. 179D. Energy efficient commercial
buildings deduction.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act in taxable years ending after such date.
SEC. 1522. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT HOMES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business related credits), as amended by this Act, is
amended by adding at the end the following new section:
``SEC. 45K. NEW ENERGY EFFICIENT HOME CREDIT.
``(a) Allowance of Credit.--
``(1) In general.--For purposes of section 38, in the case
of an eligible contractor, the new energy efficient home credit
for the taxable year is the applicable amount for each
qualified new energy efficient home which is--
``(A) constructed by the eligible contractor, and
``(B) acquired by a person from such eligible
contractor for use as a residence during the taxable
year.
``(2) Applicable amount.--For purposes of paragraph (1),
the applicable amount is an amount equal to--
``(i) in the case of a dwelling unit
described in paragraph (1) or (3) of subsection
(c), $1,000, and
``(ii) in the case of a dwelling unit
described in paragraph (2) or (4) of subsection
(c), $2,000.
``(b) Definitions.--For purposes of this section--
``(1) Eligible contractor.--The term `eligible contractor'
means--
``(A) the person who constructed the qualified new
energy efficient home, or
``(B) in the case of a qualified new energy
efficient home which is a manufactured home, the
manufactured home producer of such home.
``(2) Qualified new energy efficient home.--The term
`qualified new energy efficient home' means a dwelling unit--
``(A) located in the United States,
``(B) the construction of which is substantially
completed after the date of the enactment of this
section, and
``(C) which meets the energy saving requirements of
subsection (c).
``(3) Construction.--The term `construction' includes
substantial reconstruction and rehabilitation.
``(4) Acquire.--The term `acquire' includes purchase.
``(c) Energy Saving Requirements.--A dwelling unit meets the energy
saving requirements of this subsection if such unit is--
``(1) certified--
``(A) to have a level of annual heating and cooling
energy consumption which is at least 30 percent below
the annual level of heating and cooling energy
consumption of a comparable dwelling unit--
``(i) which is constructed in accordance
with the standards of chapter 4 of the 2003
International Energy Conservation Code, as such
Code (including supplements) is in effect on
the date of the enactment of this section, and
``(ii) for which the heating and cooling
equipment efficiencies correspond to the
minimum allowed under the regulations
established by the Department of Energy
pursuant to the National Appliance Energy
Conservation Act of 1987 and in effect at the
time of construction, and
``(B) to have building envelope component
improvements account for at least \1/3\ of such 30
percent,
``(2) certified--
``(A) to have a level of annual heating and cooling
energy consumption which is at least 50 percent below
such annual level, and
``(B) to have building envelope component
improvements account for at least \1/5\ of such 50
percent,
``(3) a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations) and which--
``(A) meets the requirements of clause (i), or
``(B) meets the requirements established by the
Administrator of the Environmental Protection Agency
under the Energy Star Labeled Homes program, or
``(4) a manufactured home which conforms to Federal
Manufactured Home Construction and Safety Standards (section
3280 of title 24, Code of Federal Regulations) and which meets
the requirements of clause (ii).
``(d) Certification.--
``(1) Method of certification.--A certification described
in paragraphs (1) and (2) of subsection (c) shall be made in
accordance with guidance prescribed by the Secretary, after
consultation with the Secretary of Energy. Such guidance shall
specify procedures and methods for calculating energy and cost
savings.
``(2) Form.--Any certification described in subsection (c)
shall be made in writing in a manner which specifies in readily
verifiable fashion the energy efficient building envelope
components and energy efficient heating or cooling equipment
installed and their respective rated energy efficiency
performance.
``(e) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section in connection with any expenditure for
any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so determined.
``(f) Coordination With Other Credits and Deductions.--
``(1) Special rule with respect to buildings with energy
efficient property.--In the case of property which is described
in section 200 which is installed in connection with a dwelling
unit, the level of annual heating and cooling energy
consumption of the comparable dwelling unit referred to in
paragraphs (1) and (2) of subsection (c) shall be determined
assuming such comparable dwelling unit contains the property
for which such deduction or credit has been allowed.
``(2) Coordination with investment credit.--For purposes of
this section, expenditures taken into account under section 47
or 48(a) shall not be taken into account under this section.
``(g) Application of Section.--
``(1) 50 percent homes.--In the case of any dwelling unit
described in paragraph (2) or (4) of subsection (c), subsection
(a) shall apply to qualified new energy efficient homes
acquired during the period beginning on the date of the
enactment of this section and ending on December 31, 2009.
``(2) 30 percent homes.--In the case of any dwelling unit
described in paragraph (1) or (3) of subsection (c), subsection
(a) shall apply to qualified new energy efficient homes
acquired during the period beginning on the date of the
enactment of this section and ending on December 31, 2007.''.
(b) Credit Made Part of General Business Credit.--Section 38(b)
(relating to current year business credit), as amended by this Act, is
amended by striking ``plus'' at the end of paragraph (19), by striking
the period at the end of paragraph (20) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(21) the new energy efficient home credit determined
under section 45K(a).''.
(c) Basis Adjustment.--Subsection (a) of section 1016, as amended
by this Act, is amended by striking ``and'' at the end of paragraph
(31), by striking the period at the end of paragraph (32) and inserting
``, and'', and by adding at the end the following new paragraph:
``(33) to the extent provided in section 45K(e), in the
case of amounts with respect to which a credit has been allowed
under section 45K.''.
(d) Deduction for Certain Unused Business Credits.--Section 196(c)
(defining qualified business credits) is amended by striking ``and'' at
the end of paragraph (11), by striking the period at the end of
paragraph (12) and inserting ``, and'', and by adding after paragraph
(12) the following new paragraph:
``(13) the new energy efficient home credit determined
under section 45K(a).''.
(e) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following new item:
``Sec. 45K. New energy efficient home
credit.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 1523. DEDUCTION FOR BUSINESS ENERGY PROPERTY.
(a) In General.--Part VI of subchapter B of chapter 1 is amended by
adding at the end the following new section:
``SEC. 200. ENERGY PROPERTY DEDUCTION.
``(a) In General.--There shall be allowed as a deduction for the
taxable year an amount equal to the greater of--
``(1) the amount determined under subsection (b) for each
energy property of the taxpayer placed in service during such
taxable year, or
``(2) the energy efficient residential rental building
property deduction determined under subsection (e).
``(b) Amount for Energy Property.--The amount determined under this
subsection for the taxable year shall be--
``(1) $150 for any advanced main air circulating fan,
``(2) $450 for any qualified natural gas, propane, or oil
furnace or hot water boiler, and
``(2) $900 for any energy efficient building property.
``(c) Energy Property Defined.--
``(1) In general.--For purposes of this part, the term
`energy property' means any property--
``(A) which is--
``(i) energy-efficient building property,
``(ii) a qualified natural gas, propane, or
oil furnace or hot water boiler, or
``(iii) an advanced main air circulating
fan,
``(B)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer,
``(C) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable, and
``(D) which meets the performance and quality
standards, and the certification requirements (if any),
which--
``(i) have been prescribed by the Secretary
by regulations (after consultation with the
Secretary of Energy or the Administrator of the
Environmental Protection Agency, as
appropriate),
``(ii) in the case of the energy efficiency
ratio (EER) for central air conditioners and
electric heat pumps--
``(I) require measurements to be
based on published data which is tested
by manufacturers at 95 degrees
Fahrenheit, and
``(II) may be based on the
certified data of the Air Conditioning
and Refrigeration Institute that are
prepared in partnership with the
Consortium for Energy Efficiency,
``(iii) in the case of geothermal heat
pumps--
``(I) shall be based on testing
under the conditions of ARI/ISO
Standard 13256-1 for Water Source Heat
Pumps or ARI 870 for Direct Expansion
GeoExchange Heat Pumps (DX), as
appropriate, and
``(II) shall include evidence that
water heating services have been
provided through a desuperheater or
integrated water heating system
connected to the storage water heater
tank, and
``(iv) are in effect at the time of the
acquisition of the property, or at the time of
the completion of the construction,
reconstruction, or erection of the property, as
the case may be.
``(2) Exception.--Such term shall not include any property
which is public utility property (as defined in section
46(f)(5) as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990).
``(d) Definitions Relating to Types of Energy Property.--For
purposes of this section--
``(1) Energy-efficient building property.--The term
`energy-efficient building property' means--
``(A) an electric heat pump water heater which
yields an energy factor of at least 2.0 in the standard
Department of Energy test procedure,
``(B) an electric heat pump which has a heating
seasonal performance factor (HSPF) of at least 9, a
seasonal energy efficiency ratio (SEER) of at least 15,
and an energy efficiency ratio (EER) of at least 13,
``(C) a geothermal heat pump which--
``(i) in the case of a closed loop product,
has an energy efficiency ratio (EER) of at
least 14.1 and a heating coefficient of
performance (COP) of at least 3.3,
``(ii) in the case of an open loop product,
has an energy efficiency ratio (EER) of at
least 16.2 and a heating coefficient of
performance (COP) of at least 3.6, and
``(iii) in the case of a direct expansion
(DX) product, has an energy efficiency ratio
(EER) of at least 15 and a heating coefficient
of performance (COP) of at least 3.5,
``(D) a central air conditioner which has a
seasonal energy efficiency ratio (SEER) of at least 15
and an energy efficiency ratio (EER) of at least 13,
and
``(E) a natural gas, propane, or oil water heater
which has an energy factor of at least 0.80.
``(2) Qualified natural gas, propane, or oil furnace or hot
water boiler.--The term `qualified natural gas, propane, or oil
furnace or hot water boiler' means a natural gas, propane, or
oil furnace or hot water boiler which achieves an annual fuel
utilization efficiency rate of not less than 95.
``(3) Advanced main air circulating fan.--The term
`advanced main air circulating fan' means a fan used in a
natural gas, propane, or oil furnace originally placed in
service by the taxpayer during the taxable year and which has
an annual electricity use of no more than 2 percent of the
total annual energy use of the furnace (as determined in the
standard Department of Energy test procedures).
``(e) Energy Efficient Residential Rental Building Property
Deduction.--
``(1) Deduction allowed.--For purposes of subsection (a)--
``(A) In general.--The energy efficient residential
rental building property deduction determined under
this subsection is an amount equal to energy efficient
residential rental building property expenditures made
by a taxpayer for the taxable year.
``(B) Maximum amount of deduction.--The amount of
energy efficient residential rental building property
expenditures taken into account under subparagraph (A)
with respect to each dwelling unit shall not exceed--
``(i) $6,000 in the case of a percentage
reduction of 50 percent or more as determined
under paragraph (2)(B)(ii), and
``(ii) $12,000 times the percentage
reduction in the case of a percentage reduction
which is less than 50 percent as determined
under paragraph (2)(B)(ii).
``(C) Year deduction allowed.--The deduction under
subparagraph (A) shall be allowed in the taxable year
in which the construction, reconstruction, erection, or
rehabilitation of the property is completed.
``(2) Energy efficient residential rental building property
expenditures.--For purposes of this subsection--
``(A) In general.--The term `energy efficient
residential rental building property expenditures'
means an amount paid or incurred for energy efficient
residential rental building property--
``(i) in connection with construction,
reconstruction, erection, or rehabilitation of
residential rental property (as defined in
section 168(e)(2)(A)) other than property for
which a deduction is allowable under section
179D,
``(ii) for which depreciation is allowable
under section 167,
``(iii) which is located in the United
States, and
``(iv) the construction, reconstruction,
erection, or rehabilitation of which is
completed by the taxpayer.
Such term includes expenditures for labor costs
properly allocable to the onsite preparation, assembly,
or original installation of the property.
``(B) Energy efficient residential rental building
property.--
``(i) In general.--The term `energy
efficient residential rental building property'
means any property which, individually or in
combination with other property, reduces total
annual energy and power costs with respect to
heating and cooling of the building by 20
percent or more when compared to--
``(I) in the case of an existing
building, the original condition of the
building, and
``(II) in the case of a new
building, the standards for residential
buildings of the same type which are
built in compliance with the applicable
building construction codes.
``(ii) Procedures.--
``(I) In general.--For purposes of
clause (i), energy usage and costs
shall be demonstrated by performance-
based compliance in accordance with the
requirements of clause (iv).
``(II) Computer software.--Computer
software shall be used in support of
performance-based compliance under
subclause (I) and such software shall
meet all of the procedures and methods
for calculating energy savings
reductions which are promulgated by the
Secretary of Energy. Such regulations
on the specifications for software and
verification protocols shall be based
on the 2005 California Residential
Alternative Calculation Method Approval
Manual.
``(III) Calculation requirements.--
In calculating tradeoffs and energy
performance, the regulations prescribed
under this clause shall prescribe for
the taxable year the costs per unit of
energy and power, such as kilowatt
hour, kilowatt, gallon of fuel oil, and
cubic foot or Btu of natural gas, which
may be dependent on time of usage. If a
State has developed annual energy usage
and cost calculation procedures based
on time of usage costs for use in the
performance standards of the State's
building energy code prior to the
effective date of this section, the
State may use those annual energy usage
and cost calculation procedures in lieu
of those adopted by the Secretary.
``(IV) Approval of software
submissions.--The Secretary shall
approve software submissions which
comply with the requirements of
subclause (II).
``(V) Procedures for inspection and
testing of homes.--The Secretary shall
ensure that procedures for the
inspection and testing for compliance
comply with the calculation
requirements under subclause (III) of
this clause and clause (iv).
``(iii) Determinations of compliance.--A
determination of compliance with respect to
energy efficient residential rental building
property made for the purposes of this
subparagraph shall be filed with the Secretary
not later than 1 year after the date of such
determination and shall include the TIN of the
certifier, the address of the building in
compliance, and the identity of the person for
whom such determination was performed.
Determinations of compliance filed with the
Secretary shall be available for inspection by
the Secretary of Energy.
``(iv) Compliance.--
``(I) In general.--The Secretary,
after consultation with the Secretary
of Energy, shall establish requirements
for certification and compliance
procedures after examining the
requirements for energy consultants and
home energy ratings providers specified
by the Mortgage Industry National Home
Energy Rating Standards.
``(II) Individuals qualified to
determine compliance.--The
determination of compliance may be
provided by a local building regulatory
authority, a utility, a manufactured
home production inspection primary
inspection agency (IPIA), a home
inspector certified by the Secretary of
Energy as trained to perform an energy
inspection for purposes of this
section, or an accredited home energy
rating system provider. All providers
shall be accredited, or otherwise
authorized to use approved energy
performance measurement methods, by the
Residential Energy Services Network
(RESNET).
``(C) Allocation of deduction for public
property.--In the case of energy efficient residential
rental building property which is property owned by a
Federal, State, or local government or a political
subdivision thereof, the Secretary shall promulgate a
regulation to allow the allocation of the deduction to
the person primarily responsible for designing the
improvements to the property in lieu of the owner of
such property. Such person shall be treated as the
taxpayer for purposes of this subsection.
``(f) Basis Reduction.--For purposes of this subtitle, if a
deduction is allowed under this section with respect to any property,
the basis of such property shall be reduced by the amount of the
deduction so allowed.
``(g) Regulations.--The Secretary shall promulgate such regulations
as necessary to take into account new technologies regarding energy
efficiency and renewable energy for purposes of determining energy
efficiency and savings under this section.
``(h) Termination.--This section shall not apply with respect to
any property placed in service after December 31, 2008.''.
(b) Conforming Amendment.--Section 1016(a), as amended by this Act,
is amended by striking ``and'' at the end of paragraph (32), by
striking the period at the end of paragraph (33) and inserting ``,
and'', and by inserting the following new paragraph:
``(34) for amounts allowed as a deduction under section
200(a).''.
(c) Clerical Amendment.--The table of sections for part VI of
subchapter B of chapter 1 is amended by adding at the end the following
new item:
``Sec. 200. Energy property deduction.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
SEC. 1524. CREDIT FOR CERTAIN NONBUSINESS ENERGY PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits) is amended by inserting
after section 25B the following new section:
``SEC. 25C. NONBUSINESS ENERGY PROPERTY.
``(a) Allowance of Credit.--
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the greater
of--
``(A) the amount of residential energy property
expenditures made by the taxpayer during such taxable
year, or
``(B) the amount specified in paragraph (2) for any
building owned by the taxpayer which is certified as a
highly energy-efficient principal residence during such
taxable year.
``(2) Credit amount.--For purposes of paragraph (1)(B), the
credit amount with respect to a highly energy-efficient
principal residence is--
``(A) $2,000 in the case of a percentage reduction
of 50 percent or more as determined under subsection
(c)(4)(C), and
``(B) $4,000 times the percentage reduction in the
case of a percentage reduction which is 20 percent or
more but less than 50 percent as determined under
subsection (c)(4)(C).
``(b) Limitation.--The amount of the credit allowed under this
section by reason of subsection (a)(1)(A) shall not exceed--
``(1) $50 for any advanced main air circulating fan,
``(2) $150 for any qualified natural gas, propane, or oil
furnace or hot water boiler, and
``(3) $300 for any item of energy efficient property.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Residential energy property expenditures.--The term
`residential energy property expenditures' means expenditures
made by the taxpayer for qualified energy property installed on
or in connection with a dwelling unit which--
``(A) is located in the United States, and
``(B) is used as a principal residence.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property.
``(2) Qualified energy property.--
``(A) In general.--The term `qualified energy
property' means--
``(i) energy-efficient building property,
``(ii) a qualified natural gas, propane, or
oil furnace or hot water boiler, or
``(iii) an advanced main air circulating
fan.
``(B) Required standards.--Property described under
subparagraph (A) shall meet the performance and quality
standards and certification standards of section
200(c)(1)(D).
``(3) Energy-efficient building property; qualified natural
gas, propane, or oil furnace or hot water boiler; advanced main
air circulating fan.--The terms `energy-efficient building
property', `qualified natural gas, propane, or oil furnace or
hot water boiler', and `advanced main air circulating fan' have
the meanings given such terms in section 200.
``(4) Highly energy-efficient principal residence.--
``(A) In general.--A building is a highly energy-
efficient principal residence if--
``(i) such building is located in the
United States,
``(ii) the building is used as a principal
residence,
``(iii) in the case of a new building, the
building is not acquired from an eligible
contractor (within the meaning of section
45K(b)(1)), and
``(iv) the building is certified in
accordance with subparagraph (D) as meeting the
requirements of subparagraph (C).
``(B) Principal residence.--
``(i) In general.--The term `principal
residence' has the same meaning as when used in
section 121, except that--
``(I) no ownership requirement
shall be imposed, and
``(II) the period for which a
building is treated as used as a
principal residence shall also include
the 60-day period ending on the 1st day
on which it would (but for this
subparagraph) first be treated as used
as a principal residence.
``(ii) Manufactured housing.--The term
`residence' shall include a dwelling unit which
is a manufactured home conforming to Federal
Manufactured Home Construction and Safety
Standards (24 C.F.R. 3280).
``(C) Requirements.--The requirements of this
subparagraph are met if the projected heating and
cooling energy usage of the building, measured in terms
of average annual energy cost to taxpayer, is reduced
by 20 percent or more in comparison to--
``(i) in the case of an existing building,
the original condition of the building, and
``(ii) in the case of a new building, a
comparable building--
``(I) which is constructed in
accordance with the standards of
chapter 4 of the 2003 International
Energy Conservation Code, as such Code
(including supplements) is in effect on
the date of the enactment of this
section, and
``(II) for which the heating and
cooling equipment efficiencies
correspond to the minimum allowed under
the regulations established by the
Department of Energy pursuant to the
National Appliance Energy Conservation
Act of 1987 and in effect at the time
of construction.
``(D) Certification procedures.--
``(i) In general.--For purposes of
subparagraph (A)(iv), energy usage shall be
demonstrated by performance-based compliance in
accordance with the requirements of subsection
(d)(2).
``(ii) Computer software.--Computer
software shall be used in support of
performance-based compliance under clause (i)
and such software shall meet all of the
procedures and methods for calculating energy
savings reductions which are promulgated by the
Secretary of Energy. Such regulations on the
specifications for software and verification
protocols shall be based on the 2005 California
Residential Alternative Calculation Method
Approval Manual.
``(iii) Calculation requirements.--In
calculating tradeoffs and energy performance,
the regulations shall prescribe the costs per
unit of energy and power, such as kilowatt
hour, kilowatt, gallon of fuel oil, and cubic
foot or Btu of natural gas, which may be
dependent on time of usage. If a State has
developed annual energy usage and cost
calculation procedures based on time of usage
costs for use in the performance standards of
the State's building energy code before the
effective date of this section, the State may
use those annual energy usage and cost
calculation procedures in lieu of those adopted
by the Secretary.
``(iv) Approval of software submissions.--
The Secretary shall approve software
submissions which comply with the calculation
requirements of clause (ii).
``(v) Procedures for inspection and testing
of dwelling units.--The Secretary shall ensure
that procedures for the inspection and testing
for compliance comply with the calculation
requirements under clause (iii) and subsection
(d)(2).
``(d) Special Rules.--For purposes of this section--
``(1) Determinations of compliance.--A determination of
compliance made for the purposes of this section shall be filed
with the Secretary within 1 year of the date of such
determination and shall include the TIN of the certifier, the
address of the building in compliance, and the identity of the
person for whom such determination was performed.
Determinations of compliance filed with the Secretary shall be
available for inspection by the Secretary of Energy.
``(2) Compliance.--
``(A) In general.--The Secretary, after
consultation with the Secretary of Energy, shall
establish requirements for certification and compliance
procedures after examining the requirements for energy
consultants and home energy ratings providers specified
by the Mortgage Industry National Home Energy Rating
Standards.
``(B) Individuals qualified to determine
compliance.--The determination of compliance may be
provided by a local building regulatory authority, a
utility, a manufactured home production inspection
primary inspection agency (IPIA), or an accredited home
energy rating system provider. All providers shall be
accredited, or otherwise authorized to use approved
energy performance measurement methods, by the
Residential Energy Services Network (RESNET).
``(3) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a principal residence by 2 or more
individuals, the following rules shall apply:
``(A) The amount of the credit allowable under
subsection (a) by reason of expenditures made during
such calendar year by any of such individuals with
respect to such dwelling unit shall be determined by
treating all of such individuals as 1 taxpayer whose
taxable year is such calendar year.
``(B) There shall be allowable with respect to such
expenditures to each of such individuals, a credit
under subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same
ratio to the amount determined under subparagraph (A)
as the amount of such expenditures made by such
individual during such calendar year bears to the
aggregate of such expenditures made by all of such
individuals during such calendar year.
``(4) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation and such
credit shall be allocated pro rata to such individual.
``(5) 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 and any credit shall be allocated
appropriately.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of paragraph (1) of section
528(c) (other than subparagraph (E) thereof) with
respect to a condominium project substantially all of
the units of which are used as principal residences.
``(6) Joint ownership of energy items.--
``(A) In general.--Any expenditure otherwise
qualifying as an expenditure under this section 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 credit allowable under subsection (a)
shall (subject to paragraph (1)) be computed separately
with respect to the amount of the expenditure made for
each dwelling unit.
``(7) Allocation in certain cases.--If less than 80 percent
of the use of an item is for nonbusiness purposes, only that
portion of the expenditures for such item which is properly
allocable to use for nonbusiness purposes shall be taken into
account.
``(8) Year credit allowed.--The credit under subsection
(a)(2) shall be allowed in the taxable year in which the
percentage reduction with respect to the principal residence is
certified.
``(9) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in
subparagraph (B), an expenditure with respect to an
item shall be treated as made when the original
installation of the item is completed.
``(B) Expenditures part of building construction.--
In the case of an expenditure in connection with the
construction of a structure, such expenditure shall be
treated as made when the original use of the
constructed structure by the taxpayer begins.
``(10) Property financed by subsidized energy financing.--
``(A) Reduction of expenditures.--
``(i) In general.--Except as provided in
subparagraph (C), for purposes of determining
the amount of expenditures made by any
individual with respect to any dwelling unit,
there shall not be taken into account
expenditures which are made from subsidized
energy financing.
``(ii) Subsidized energy financing.--For
purposes of clause (i), the term `subsidized
energy financing' has the same meaning given
such term in section 48(a)(4)(C).
``(B) Dollar limits reduced.--The dollar amounts in
subsection (b)(3) with respect to each property
purchased for such dwelling unit for any taxable year
of such taxpayer shall be reduced proportionately by an
amount equal to the sum of--
``(i) the amount of the expenditures made
by the taxpayer during such taxable year with
respect to such dwelling unit and not taken
into account by reason of subparagraph (A), and
``(ii) the amount of any Federal, State, or
local grant received by the taxpayer during
such taxable year which is used to make
residential energy property expenditures with
respect to the dwelling unit and is not
included in the gross income of such taxpayer.
``(C) Exception for state programs.--Subparagraphs
(A) and (B) shall not apply to expenditures made with
respect to property for which the taxpayer has received
a loan, State tax credit, or grant under any State
energy program.
``(11) Coordination with section 25D.--In any case in which
a credit under section 25D has been allowed with respect to
property in connection with a building for which a credit is
allowable under this section by reason of subsection
(a)(1)(B)--
``(A) for purposes of subsection (c)(4)(C), the
average annual energy cost with respect to heating and
cooling of--
``(i) for purposes of subsection
(c)(4)(C)(i), the original condition of the
building, and
``(ii) for purposes of subsection
(c)(4)(C)(ii), the comparable building,
shall be determined assuming such building contains the
property for which such credit has been allowed, and
``(B) any cost of such property taken into account
under such section shall not be taken into account
under this section.
``(e) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so allowed.
``(f) Regulations.--The Secretary shall promulgate such regulations
as necessary to take into account new technologies regarding energy
efficiency and renewable energy for purposes of determining energy
efficiency and savings under this section.
``(g) Termination.--This section shall not apply with respect to
any property placed in service after December 31, 2008.''.
(b) Conforming Amendments.--
(1) Subsection (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (33), by
striking the period at the end of paragraph (34) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(35) to the extent provided in section 25C(e), in the
case of amounts with respect to which a credit has been allowed
under section 25C.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 25B the following new item:
``Sec. 25C. Nonbusiness energy
property.''.
(c) Effective Dates.--The amendments made by this section shall
apply to property placed in service after December 31, 2005.
SEC. 1525. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM PROPERTY.
(a) In General.--Section 48(a)(3)(A) (defining energy property) is
by striking ``or'' at the end of clause (i), by inserting ``or'' at the
end of clause (ii), and by adding at the end the following new clause:
``(iii) combined heat and power system
property,''.
(b) Combined Heat and Power System Property.--Section 48 (relating
to energy credit; reforestation credit) is amended by adding at the end
the following new subsection:
``(c) Combined Heat and Power System Property.--For purposes of
subsection (a)(3)(A)(iii)--
``(1) Combined heat and power system property.--The term
`combined heat and power system property' means property
comprising a system--
``(A) which uses the same energy source for the
simultaneous or sequential generation of electrical
power, mechanical shaft power, or both, in combination
with the generation of steam or other forms of useful
thermal energy (including heating and cooling
applications),
``(B) which has an electrical capacity of not more
than 15 megawatts or a mechanical energy capacity of
not more than 2,000 horsepower or an equivalent
combination of electrical and mechanical energy
capacities,
``(C) which produces--
``(i) at least 20 percent of its total
useful energy in the form of thermal energy
which is not used to produce electrical or
mechanical power (or combination thereof), and
``(ii) at least 20 percent of its total
useful energy in the form of electrical or
mechanical power (or combination thereof),
``(D) the energy efficiency percentage of which
exceeds 60 percent, and
``(E) which is placed in service before January 1,
2008.
``(2) Special rules.--
``(A) Energy efficiency percentage.--For purposes
of this subsection, the energy efficiency percentage of
a system is the fraction--
``(i) the numerator of which is the total
useful electrical, thermal, and mechanical
power produced by the system at normal
operating rates, and expected to be consumed in
its normal application, and
``(ii) the denominator of which is the
lower heating value of the fuel sources for the
system.
``(B) Determinations made on btu basis.--The energy
efficiency percentage and the percentages under
paragraph (1)(C) shall be determined on a Btu basis.
``(C) Input and output property not included.--The
term `combined heat and power system property' does not
include property used to transport the energy source to
the facility or to distribute energy produced by the
facility.
``(D) Certain exception not to apply.--The first
sentence of the matter in subsection (a)(3) which
follows subparagraph (D) thereof shall not apply to
combined heat and power system property.
``(3) Systems using bagasse.--If a system is designed to
use bagasse for at least 90 percent of the energy source--
``(A) paragraph (1)(D) shall not apply, but
``(B) the amount of credit determined under
subsection (a) with respect to such system shall not
exceed the amount which bears the same ratio to such
amount of credit (determined without regard to this
paragraph) as the energy efficiency percentage of such
system bears to 60 percent.''.
(c) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on
the day before the date of the enactment of the Revenue Reconciliation
Act of 1990).
SEC. 1526. CREDIT FOR ENERGY EFFICIENT APPLIANCES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits), as amended by this Act, is
amended by adding at the end the following new section:
``SEC. 45L. ENERGY EFFICIENT APPLIANCE CREDIT.
``(a) General Rule.--
``(1) In general.--For purposes of section 38, the energy
efficient appliance credit determined under this section for
any taxable year is an amount equal to the sum of the credit
amounts determined under paragraph (2) for each type of
qualified energy efficient appliance produced by the taxpayer
during the calendar year ending with or within the taxable
year.
``(2) Credit amounts.--The credit amount determined for any
type of qualified energy efficient appliance is--
``(A) the applicable amount determined under
subsection (b) with respect to such type, multiplied by
``(B) the eligible production for such type.
``(b) Applicable Amount.--
``(1) In general.--For purposes of subsection (a)--
``(A) Dishwashers.--The applicable amount is the
energy savings amount in the case of a dishwasher
which--
``(i) is manufactured in calendar year 2006
or 2007, and
``(ii) meets the requirements of the Energy
Star program which are in effect for
dishwashers in 2007.
``(B) Clothes washers.--The applicable amount is--
``(i) $50, in the case of a clothes washer
which--
``(I) is manufactured in calendar
year 2005, and
``(II) has an MEF of at least 1.42,
``(ii) $100, in the case of a clothes
washer which--
``(I) is manufactured in calendar
year 2005, 2006, or 2007, and
``(II) meets the requirements of
the Energy Star program which are in
effect for clothes washers in 2007, and
``(iii) the energy and water savings
amount, in the case of a clothes washer which--
``(I) is manufactured in calendar
year 2008, 2009, or 2010, and
``(II) meets the requirements of
the Energy Star program which are in
effect for clothes washers in 2010.
``(C) Refrigerators.--
``(i) 15 percent savings.--The applicable
amount is $75 in the case of a refrigerator
which--
``(I) is manufactured in calendar
year 2005 or 2006, and
``(II) consumes at least 15 percent
but not more than 20 percent less
kilowatt hours per year than the 2001
energy conservation standard.
``(ii) 20 percent savings.--In the case of
a refrigerator which consumes at least 20
percent but not more than 25 percent less
kilowatt hours per year than the 2001 energy
conservation standards, the applicable amount
is--
``(I) $125 for a refrigerator which
is manufactured in calendar year 2005,
2006, or 2007, and
``(II) $100 for a refrigerator
which is manufactured in calendar year
2008.
``(iii) 25 percent savings.--In the case of
a refrigerator which consumes at least 25
percent less kilowatt hours per year than the
2001 energy conservation standards, the
applicable amount is--
``(I) $175 for a refrigerator which
is manufactured in calendar year 2005,
2006, or 2007, and
``(II) $150 for a refrigerator
which is manufactured in calendar year
2008, 2009, or 2010.
``(2) Energy savings amount.--For purposes of paragraph
(1)(A)--
``(A) In general.--The energy savings amount is the
lesser of--
``(i) the product of--
``(I) $3, and
``(II) 100 multiplied by the energy
savings percentage, or
``(ii) $100.
``(B) Energy savings percentage.--For purposes of
subparagraph (A), the energy savings percentage is the
ratio of--
``(i) the EF required by the Energy Star
program for dishwashers in 2007 minus the EF
required by the Energy Star program for
dishwashers in 2005, to
``(ii) the EF required by the Energy Star
program for dishwashers in 2007.
``(3) Energy and water savings amount.--For purposes of
paragraph (1)(B)(iii)--
``(A) In general.--The energy and water savings
amount is the lesser of--
``(i) the product of--
``(I) $10, and
``(II) 100 multiplied by the energy
and water savings percentage, or
``(ii) $200.
``(B) Energy and water savings percentage.--For
purposes of subparagraph (A), the energy and water
savings percentage is the average of the MEF savings
percentage and the WF savings percentage.
``(C) MEF savings percentage.--For purposes of this
paragraph, the MEF savings percentage is the ratio of--
``(i) the MEF required by the Energy Star
program for clothes washers in 2010 minus the
MEF required by the Energy Star program for
clothes washers in 2007, to
``(ii) the MEF required by the Energy Star
program for clothes washers in 2010.
``(D) WF savings percentage.--For purposes of this
paragraph, the WF savings percentage is the ratio of--
``(i) the WF required by the Energy Star
program for clothes washers in 2007 minus the
WF required by the Energy Star program for
clothes washers in 2010, to
``(ii) the WF required by the Energy Star
program for clothes washers in 2007.
``(c) Eligible Production.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the eligible production in a calendar year with respect to
each type of energy efficient appliance is the excess of--
``(A) the number of appliances of such type which
are produced by the taxpayer in the United States
during such calendar year, over
``(B) the average number of appliances of such type
which were produced by the taxpayer (or any
predecessor) in the United States during the preceding
3-calendar year period.
``(2) Special rule for refrigerators.--The eligible
production in a calendar year with respect to each type of
refrigerator described in subsection (b)(1)(C) is the excess
of--
``(A) the number of appliances of such type which
are produced by the taxpayer in the United States
during such calendar year, over
``(B) 110 percent of the average number of
appliances of such type which were produced by the
taxpayer (or any predecessor) in the United States
during the preceding 3-calendar year period.
``(3) Special rule for 2005 production.--For purposes of
determining eligible production for calendar year 2005--
``(A) only production after the date of enactment
of this section shall be taken into account under
paragraphs (1)(A) and (2)(A), and
``(B) the amount taken into account under
paragraphs (1)(B) and (2)(B) shall be an amount which
bears the same ratio to the amount which would (but for
this paragraph) be taken into account under such
paragraph as--
``(i) the number of days in calendar year
2005 after the date of enactment of this
section, bears to
``(ii) 365.
``(d) Types of Energy Efficient Appliance.--For purposes of this
section, the types of energy efficient appliances are--
``(1) dishwashers described in subsection (b)(1)(A),
``(2) clothes washers described in subsection (b)(1)(B)(i),
``(3) clothes washers described in subsection
(b)(1)(B)(ii),
``(4) clothes washers described in subsection
(b)(1)(B)(iii),
``(5) refrigerators described in subsection (b)(1)(C)(i),
``(6) refrigerators described in subsection
(b)(1)(C)(ii)(I),
``(7) refrigerators described in subsection
(b)(1)(C)(ii)(II),
``(8) refrigerators described in subsection
(b)(1)(C)(iii)(I), and
``(9) refrigerators described in subsection
(b)(1)(C)(iii)(II).
``(e) Limitations.--
``(1) Aggregate credit amount allowed.--The aggregate
amount of credit allowed under subsection (a) with respect to a
taxpayer for any taxable year shall not exceed $75,000,000
reduced by the amount of the credit allowed under subsection
(a) to the taxpayer (or any predecessor) for all prior taxable
years.
``(2) Amount allowed for certain appliances.--
``(A) In general.--In the case of appliances
described in subparagraph (C), the aggregate amount of
the credit allowed under subsection (a) with respect to
a taxpayer for any taxable year shall not exceed
$20,000,000 reduced by the amount of the credit allowed
under subsection (a) to the taxpayer (or any
predecessor) for all prior taxable years with respect
to such appliances.
``(B) Election to increase allowable credit.--In
the case of any taxpayer who makes an election under
this subparagraph--
``(i) subparagraph (A) shall be applied by
substituting `$25,000,000' for `$20,000,000',
and
``(ii) the aggregate amount of the credit
allowed under subsection (a) with respect to
such taxpayer for any taxable year for
appliances described in subparagraph (C) and
the additional appliances described in
subparagraph (D) shall not exceed $50,000,000
reduced by the amount of the credit allowed
under subsection (a) to the taxpayer (or any
predecessor) for all prior taxable years with
respect to such appliances.
``(C) Appliances described.--The appliances
described in this subparagraph are--
``(i) clothes washers described in
subsection (b)(1)(B)(i), and
``(ii) refrigerators described in
subsection (b)(1)(C)(i).
``(D) Additional appliances.--The additional
appliances described in this subparagraph are--
``(i) refrigerators described in subsection
(b)(1)(C)(ii)(I), and
``(ii) refrigerators described in
subsection (b)(1)(C)(ii)(II).
``(3) Limitation based on gross receipts.--The credit
allowed under subsection (a) with respect to a taxpayer for the
taxable year shall not exceed an amount equal to 2 percent of
the average annual gross receipts of the taxpayer for the 3
taxable years preceding the taxable year in which the credit is
determined.
``(4) Gross receipts.--For purposes of this subsection, the
rules of paragraphs (2) and (3) of section 448(c) shall apply.
``(f) Definitions.--For purposes of this section--
``(1) Qualified energy efficient appliance.--The term
`qualified energy efficient appliance' means--
``(A) any dishwasher described in subsection
(b)(1)(A),
``(B) any clothes washer described in subsection
(b)(1)(B), and
``(C) any refrigerator described in subsection
(b)(1)(C).
``(2) Dishwasher.--The term `dishwasher' means a
residential dishwasher subject to the energy conservation
standards established by the Department of Energy.
``(3) Clothes washer.--The term `clothes washer' means a
residential model clothes washer, including a residential style
coin operated washer.
``(4) Refrigerator.--The term `refrigerator' means a
residential model automatic defrost refrigerator-freezer which
has an internal volume of at least 16.5 cubic feet.
``(5) MEF.--The term `MEF' means the modified energy factor
established by the Department of Energy for compliance with the
Federal energy conservation standards.
``(6) EF.--The term `EF' means the energy factor
established by the Department of Energy for compliance with the
Federal energy conservation standards.
``(7) WF.--The term `WF' means Water Factor (as determined
by the Secretary of Energy).
``(8) Produced.--The term `produced' includes manufactured.
``(9) 2001 energy conservation standard.--The term `2001
energy conservation standard' means the energy conservation
standards promulgated by the Department of Energy and effective
July 1, 2001.
``(g) Special Rules.--For purposes of this section--
``(1) In general.--Rules similar to the rules of
subsections (c), (d), and (e) of section 52 shall apply.
``(2) Controlled group.--
``(A) In general.--All persons treated as a single
employer under subsection (a) or (b) of section 52 or
subsection (m) or (o) of section 414 shall be treated
as a single producer.
``(B) Inclusion of foreign corporations.--For
purposes of subparagraph (A), in applying subsections
(a) and (b) of section 52 to this section, section 1563
shall be applied without regard to subsection (b)(2)(C)
thereof.
``(3) Verification.--No amount shall be allowed as a credit
under subsection (a) with respect to which the taxpayer has not
submitted such information or certification as the Secretary,
in consultation with the Secretary of Energy, determines
necessary.''.
(b) Conforming Amendment.--Section 38(b) (relating to general
business credit), as amended by this Act, is amended by striking
``plus'' at the end of paragraph (20), by striking the period at the
end of paragraph (21) and inserting ``, plus'', and by adding at the
end the following new paragraph:
``(22) the energy efficient appliance credit determined
under section 45L(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1, as amended by this Act, is
amended by adding at the end the following new item:
``Sec. 45L. Energy efficient appliance credit''.
(d) Effective Date.--The amendments made by this section shall
apply to appliances produced after the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 1527. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits), as amended by this Act,
is amended by inserting after section 25C the following new section:
``SEC. 25D. RESIDENTIAL ENERGY EFFICIENT PROPERTY.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of--
``(1) 30 percent of the qualified photovoltaic property
expenditures made by the taxpayer during such year,
``(2) 30 percent of the qualified solar water heating
property expenditures made by the taxpayer during such year,
``(3) 30 percent of the qualified fuel cell property
expenditures made by the taxpayer during such year,
``(b) Limitations.--
``(1) Maximum credit.--The credit allowed under subsection
(a) for any taxable year shall not exceed--
``(A) $2,000 with respect to any qualified solar
water heating property expenditures,
``(B) $2,000 with respect to any qualified
photovoltaic property expenditures, and
``(C) $500 with respect to each half kilowatt of
capacity of qualified fuel cell property (as defined in
section 48(d)(1)) for which qualified fuel cell
property expenditures are made,
``(2) Certifications.--No credit shall be allowed under
this section for an item of property unless--
``(A) in the case of solar water heating property,
such property is certified for performance by the non-
profit Solar Rating Certification Corporation or a
comparable entity endorsed by the government of the
State in which such property is installed, and
``(B) in the case of a photovoltaic property or a
fuel cell property such property meets appropriate fire
and electric code requirements.
``(c) Carryforward of Unused Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable under this
subpart (other than this section), such excess shall be carried to the
succeeding taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.
``(d) Definitions.--For purposes of this section--
``(1) Qualified solar water heating property expenditure.--
The term `qualified solar water heating property expenditure'
means an expenditure for property to heat water for use in a
dwelling unit located in the United States and used as a
residence by the taxpayer if at least half of the energy used
by such property for such purpose is derived from the sun.
``(2) Qualified photovoltaic property expenditure.--The
term `qualified photovoltaic property expenditure' means an
expenditure for property which uses solar energy to generate
electricity for use in a dwelling unit located in the United
States and used as a residence by the taxpayer.
``(3) Solar panels.--No expenditure relating to a solar
panel or other property installed as a roof (or portion
thereof) shall fail to be treated as property described in
paragraph (1) or (2) solely because it constitutes a structural
component of the structure on which it is installed.
``(4) Qualified fuel cell property expenditure.--The term
`qualified fuel cell property expenditure' means an expenditure
for qualified fuel cell property (as defined in section
48(d)(1)) installed on or in connection with a dwelling unit
located in the United States and used as a principal residence
(within the meaning of section 121) by the taxpayer.
``(5) Labor costs.--Expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property described in paragraph (1), (2),
(4), (5), or (6) and for piping or wiring to interconnect such
property to the dwelling unit shall be taken into account for
purposes of this section.
``(6) Swimming pools, etc., used as storage medium.--
Expenditures which are properly allocable to a swimming pool,
hot tub, or any other energy storage medium which has a
function other than the function of such storage shall not be
taken into account for purposes of this section.
``(e) Special Rules.--For purposes of this section--
``(1) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a residence by 2 or more
individuals the following rules shall apply:
``(A) The amount of the credit allowable, under
subsection (a) by reason of expenditures (as the case
may be) made during such calendar year by any of such
individuals with respect to such dwelling unit shall be
determined by treating all of such individuals as 1
taxpayer whose taxable year is such calendar year.
``(B) There shall be allowable, with respect to
such expenditures to each of such individuals, a credit
under subsection (a) for the taxable year in which such
calendar year ends in an amount which bears the same
ratio to the amount determined under subparagraph (A)
as the amount of such expenditures made by such
individual during such calendar year bears to the
aggregate of such expenditures made by all of such
individuals during such calendar year.
``(2) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation.
``(3) Condominiums.--
``(A) In general.--In the case of an individual who
is a member of a condominium management association
with respect to a condominium which the individual
owns, such individual shall be treated as having made
the individual's proportionate share of any
expenditures of such association.
``(B) Condominium management association.--For
purposes of this paragraph, the term `condominium
management association' means an organization which
meets the requirements of paragraph (1) of section
528(c) (other than subparagraph (E) thereof) with
respect to a condominium project substantially all of
the units of which are used as residences.
``(4) Allocation in certain cases.--If less than 80 percent
of the use of an item is for nonbusiness purposes, only that
portion of the expenditures for such item which is properly
allocable to use for nonbusiness purposes shall be taken into
account.
``(5) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in
subparagraph (B), an expenditure with respect to an
item shall be treated as made when the original
installation of the item is completed.
``(B) Expenditures part of building construction.--
In the case of an expenditure in connection with the
construction or reconstruction of a structure, such
expenditure shall be treated as made when the original
use of the constructed or reconstructed structure by
the taxpayer begins.
``(C) Amount.--The amount of any expenditure shall
be the cost thereof.
``(6) Property financed by subsidized energy financing.--
For purposes of determining the amount of expenditures made by
any individual with respect to any dwelling unit, there shall
not be taken into account expenditures which are made from
subsidized energy financing (as defined in section
48(a)(4)(C)).
``(f) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any expenditure with respect
to any property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be reduced
by the amount of the credit so allowed.
``(g) Termination.--The credit allowed under this section shall not
apply to property placed in service after December 31, 2009.''.
(b) Conforming Amendments.--
(1) Section 23(c) is amended by striking ``this section and
section 1400C'' and inserting ``this section, section 25D, and
section 1400C''.
(2) Section 25(e)(1)(C) is amended by striking ``this
section and sections 23 and 1400C'' and inserting ``other than
this section, section 23, section 25D, and section 1400C''.
(3) Section 1400C(d) is amended by striking ``this
section'' and inserting ``this section and section 25D''.
(4) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (34), by striking the
period at the end of paragraph (35) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(36) to the extent provided in section 25D(f), in the
case of amounts with respect to which a credit has been allowed
under section 25D.''.
(5) The table of sections for subpart A of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 25C the
following new item:
``Sec. 25D. Residential energy efficient
property.''.
(c) Effective Dates.--The amendments made by this section shall
apply to property placed in service after December 31, 2005, in taxable
years ending after such date.
SEC. 1528. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL CELLS AND
STATIONARY MICROTURBINE POWER PLANTS.
(a) In General.--Section 48(a)(3)(A) (defining energy property), as
amended by this Act, is amended by striking ``or'' at the end of clause
(ii), by adding ``or'' at the end of clause (iii), and by inserting
after clause (iii) the following new clause:
``(iv) qualified fuel cell property or
qualified microturbine property,''.
(b) Qualified Fuel Cell Property; Qualified Microturbine
Property.--Section 48 (relating to energy credit) is amended by adding
at the end the following new subsection:
``(d) Qualified Fuel Cell Property; Qualified Microturbine
Property.--For purposes of this subsection--
``(1) Qualified fuel cell property.--
``(A) In general.--The term `qualified fuel cell
property' means a fuel cell power plant which--
``(i) has a nameplate capacity of at least
0.5 kilowatt of electricity using an
electrochemical process, and
``(ii) has an electricity-only generation
efficiency greater than 30 percent.
``(B) Limitation.--In the case of qualified fuel
cell property placed in service during the taxable
year, the credit otherwise determined under paragraph
(1) for such year with respect to such property shall
not exceed an amount equal to $500 for each 0.5
kilowatt of capacity of such property.
``(C) Fuel cell power plant.--The term `fuel cell
power plant' means an integrated system comprised of a
fuel cell stack assembly and associated balance of
plant components which converts a fuel into electricity
using electrochemical means.
``(D) Special rule.--The first sentence of the
matter in subsection (a)(3) which follows subparagraph
(D) thereof shall not apply to qualified fuel cell
property which is used predominantly in the trade or
business of the furnishing or sale of telephone
service, telegraph service by means of domestic
telegraph operations, or other telegraph services
(other than international telegraph services).
``(E) Termination.--The term `qualified fuel cell
property' shall not include any property for any period
after December 31, 2009.
``(2) Qualified microturbine property.--
``(A) In general.--The term `qualified microturbine
property' means a stationary microturbine power plant
which--
``(i) has a nameplate capacity of less than
2,000 kilowatts, and
``(ii) has an electricity-only generation
efficiency of not less than 26 percent at
International Standard Organization conditions.
``(B) Limitation.--In the case of qualified
microturbine property placed in service during the
taxable year, the credit otherwise determined under
paragraph (1) for such year with respect to such
property shall not exceed an amount equal $200 for each
kilowatt of capacity of such property.
``(C) Stationary microturbine power plant.--The
term `stationary microturbine power plant' means an
integrated system comprised of a gas turbine engine, a
combustor, a recuperator or regenerator, a generator or
alternator, and associated balance of plant components
which converts a fuel into electricity and thermal
energy. Such term also includes all secondary
components located between the existing infrastructure
for fuel delivery and the existing infrastructure for
power distribution, including equipment and controls
for meeting relevant power standards, such as voltage,
frequency, and power factors.
``(D) Special rule.--The first sentence of the
matter in subsection (a)(3) which follows subparagraph
(D) thereof shall not apply to qualified microturbine
property which is used predominantly in the trade or
business of the furnishing or sale of telephone
service, telegraph service by means of domestic
telegraph operations, or other telegraph services
(other than international telegraph services).
``(E) Termination.--The term `qualified
microturbine property' shall not include any property
for any period after December 31, 2008.''.
(c) Energy Percentage.--Section 48(a)(2)(A) (relating to energy
percentage) is amended to read as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of qualified fuel cell
property, 30 percent, and
``(ii) in the case of any other energy
property, 10 percent.''.
(d) Conforming Amendment.-- Section 48(a)(1) is amended by
inserting ``except as provided in paragraph (1)(B) or (2)(B) of
subsection (d),'' before ``the energy''.
(e) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2005, in taxable years ending after
such date, under rules similar to the rules of section 48(m) of the
Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 1529. BUSINESS SOLAR INVESTMENT TAX CREDIT.
(a) Increase in Energy Percentage.--Section 48(a)(2)(A) (relating
to energy percentage), as amended by this Act, is amended to read as
follows:
``(A) In general.--The energy percentage is--
``(i) in the case of energy property
described in paragraph (3)(A)(i) and qualified
fuel cell property, 30 percent, and
``(ii) in the case of any other energy
property, 10 percent.''.
(b) Hybrid Solar Lighting Systems.--Clause (i) of section
48(a)(3)(A) is amended to read as follows:
``(i) equipment which uses solar energy to
generate electricity, to heat or cool (or
provide hot water for use in) a structure, to
illuminate the inside of a structure using
fiber-optic distributed sunlight or to provide
solar process heat, excepting property used to
generate energy for the purposes of heating a
swimming pool,''.
(c) Effective Date.--The amendments made by this section shall
apply to periods after December 31, 2005, in taxable years ending after
such date, and periods before January 1, 2012, under rules similar to
the rules of section 48(m) of the Internal Revenue Code of 1986 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
Subtitle D--Alternative Motor Vehicles and Fuels Incentives
SEC. 1531. ALTERNATIVE MOTOR VEHICLE CREDIT.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
(relating to foreign tax credit, etc.) is amended by adding at the end
the following new section:
``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year an amount
equal to the sum of--
``(1) the new qualified fuel cell motor vehicle credit
determined under subsection (b),
``(2) the new qualified hybrid motor vehicle credit
determined under subsection (c), and
``(3) the new qualified alternative fuel motor vehicle
credit determined under subsection (d).
``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified fuel cell motor vehicle credit determined under this
subsection with respect to a new qualified fuel cell motor
vehicle placed in service by the taxpayer during the taxable
year is--
``(A) $8,000 ($4,000 in the case of a vehicle
placed in service after December 31, 2009), if such
vehicle has a gross vehicle weight rating of not more
than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $20,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(2) Increase for fuel efficiency.--
``(A) In general.--The amount determined under
paragraph (1)(A) with respect to a new qualified fuel
cell motor vehicle which is a passenger automobile or
light truck shall be increased by--
``(i) $1,000, if such vehicle achieves at
least 150 percent but less than 175 percent of
the 2002 model year city fuel economy,
``(ii) $1,500, if such vehicle achieves at
least 175 percent but less than 200 percent of
the 2002 model year city fuel economy,
``(iii) $2,000, if such vehicle achieves at
least 200 percent but less than 225 percent of
the 2002 model year city fuel economy,
``(iv) $2,500, if such vehicle achieves at
least 225 percent but less than 250 percent of
the 2002 model year city fuel economy,
``(v) $3,000, if such vehicle achieves at
least 250 percent but less than 275 percent of
the 2002 model year city fuel economy,
``(vi) $3,500, if such vehicle achieves at
least 275 percent but less than 300 percent of
the 2002 model year city fuel economy, and
``(vii) $4,000, if such vehicle achieves at
least 300 percent of the 2002 model year city
fuel economy.
``(B) 2002 model year city fuel economy.--For
purposes of subparagraph (A), the 2002 model year city
fuel economy with respect to a vehicle shall be
determined in accordance with the following tables:
``(i) In the case of a passenger
automobile:
The 2002 model year city
``If vehicle inertia weight class fuel economy is:
is:
1,500 or 1,750 lbs............................ 45.2 mpg
2,000 lbs..................................... 39.6 mpg
2,250 lbs..................................... 35.2 mpg
2,500 lbs..................................... 31.7 mpg
2,750 lbs..................................... 28.8 mpg
3,000 lbs..................................... 26.4 mpg
3,500 lbs..................................... 22.6 mpg
4,000 lbs..................................... 19.8 mpg
4,500 lbs..................................... 17.6 mpg
5,000 lbs..................................... 15.9 mpg
5,500 lbs..................................... 14.4 mpg
6,000 lbs..................................... 13.2 mpg
6,500 lbs..................................... 12.2 mpg
7,000 to 8,500 lbs............................ 11.3 mpg.
``(ii) In the case of a light truck:
The 2002 model year city
``If vehicle inertia weight class fuel economy is:
is:
1,500 or 1,750 lbs............................ 39.4 mpg
2,000 lbs..................................... 35.2 mpg
2,250 lbs..................................... 31.8 mpg
2,500 lbs..................................... 29.0 mpg
2,750 lbs..................................... 26.8 mpg
3,000 lbs..................................... 24.9 mpg
3,500 lbs..................................... 21.8 mpg
4,000 lbs..................................... 19.4 mpg
4,500 lbs..................................... 17.6 mpg
5,000 lbs..................................... 16.1 mpg
5,500 lbs..................................... 14.8 mpg
6,000 lbs..................................... 13.7 mpg
6,500 lbs..................................... 12.8 mpg
7,000 to 8,500 lbs............................ 12.1 mpg.
``(C) Vehicle inertia weight class.--For purposes
of subparagraph (B), the term `vehicle inertia weight
class' has the same meaning as when defined in
regulations prescribed by the Administrator of the
Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42
U.S.C. 7521 et seq.).
``(3) New qualified fuel cell motor vehicle.--For purposes
of this subsection, the term `new qualified fuel cell motor
vehicle' means a motor vehicle--
``(A) which is propelled by power derived from 1 or
more cells which convert chemical energy directly into
electricity by combining oxygen with hydrogen fuel
which is stored on board the vehicle in any form and
may or may not require reformation prior to use,
``(B) which, in the case of a passenger automobile
or light truck, has received on or after the date of
the enactment of this section a certificate that such
vehicle meets or exceeds the Bin 5 Tier II emission
level established in regulations prescribed by the
Administrator of the Environmental Protection Agency
under section 202(i) of the Clean Air Act for that make
and model year vehicle,
``(C) the original use of which commences with the
taxpayer,
``(D) which is acquired for use or lease by the
taxpayer and not for resale, and
``(E) which is made by a manufacturer.
``(c) New Qualified Hybrid Motor Vehicle Credit.--
``(1) In general.--For purposes of subsection (a), the new
qualified hybrid motor vehicle credit determined under this
subsection with respect to a new qualified hybrid motor vehicle
placed in service by the taxpayer during the taxable year is
the credit amount determined under paragraph (2) or (3).
``(2) Credit amount for lighter vehicles.--
``(A) In general.--In the case of a new qualified
hybrid motor vehicle which is a passenger automobile,
medium duty passenger vehicle, or light truck, the
credit amount determined under this paragraph shall
be--
``(i) $400, if such vehicle achieves at
least 125 percent but less than 150 percent of
the 2002 model year city fuel economy,
``(ii) $800, if such vehicle achieves at
least 150 percent but less than 175 percent of
the 2002 model year city fuel economy,
``(iii) $1,200, if such vehicle achieves at
least 175 percent but less than 200 percent of
the 2002 model year city fuel economy,
``(iv) $1,600, if such vehicle achieves at
least 200 percent but less than 225 percent of
the 2002 model year city fuel economy,
``(v) $2,000, if such vehicle achieves at
least 225 percent but less than 250 percent of
the 2002 model year city fuel economy, and
``(vi) $2,400, if such vehicle achieves at
least 250 percent of the 2002 model year city
fuel economy.
``(B) 2002 model year city fuel economy.--For
purposes of subparagraph (A), the 2002 model year city
fuel economy with respect to a vehicle shall be
determined on a gasoline gallon equivalent basis as
determined by the Administrator of the Environmental
Protection Agency using the tables provided in
subsection (b)(2)(B) with respect to such vehicle.
``(3) Credit amount for heavier vehicles.--
``(A) In general.--In the case of a new qualified
hybrid motor vehicle which is a heavy duty hybrid motor
vehicle, the credit amount determined under this
paragraph is an amount equal to the applicable
percentage of the incremental cost of such vehicle
placed in service by the taxpayer during the taxable
year.
``(B) Incremental cost.--For purposes of this
paragraph, the incremental cost of any heavy duty
hybrid 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 comparable gasoline
or diesel fuel motor vehicle of the same model, to the
extent such amount does not exceed--
``(i) $7,500, if such vehicle has a gross
vehicle weight rating of more than 8,500 pounds
but not more than 14,000 pounds,
``(ii) $15,000, if such vehicle has a gross
vehicle weight rating of more than 14,000
pounds but not more than 26,000 pounds, and
``(iii) $30,000, if such vehicle has a
gross vehicle weight rating of more than 26,000
pounds.
``(C) Applicable percentage.--For purposes of
subparagraph (A), the applicable percentage shall be
determined in accordance with the following table:
``If percent increase in fuel The applicable percentage is:
economy of hybrid over
comparable vehicle is:
At least 30 but less than 40
percent.
20 percent.
At least 40 but less than 50
percent.
30 percent.
At least 50 percent............
40 percent.
``(4) New qualified hybrid motor vehicle.--For purposes of
this subsection--
``(A) In general.--The term `new qualified hybrid
motor vehicle' means a motor vehicle--
``(i) which draws propulsion energy from
onboard sources of stored energy which are
both--
``(I) an internal combustion or
heat engine using consumable fuel, and
``(II) a rechargeable energy
storage system,
``(ii) which, in the case of a passenger
automobile, medium duty passenger vehicle, or
light truck--
``(I) has received a certificate
that such vehicle meets or exceeds the
Bin 5 Tier II emission level
established in regulations prescribed
by the Administrator of the
Environmental Protection Agency under
section 202(i) of the Clean Air Act for
that make and model year vehicle, and
``(II) has a maximum available
power of at least 5 percent,
``(iii) which, in the case of a heavy duty
hybrid motor vehicle--
``(I) which has a gross vehicle
weight rating of more than 8,500 but
not more than 14,000 pounds, has a
maximum available power of at least 10
percent, and
``(II) which has a gross vehicle
weight rating of more than 14,000
pounds, has a maximum available power
of at least 15 percent,
``(iv) the original use of which commences
with the taxpayer,
``(v) which is acquired for use or lease by
the taxpayer and not for resale, and
``(vi) which is made by a manufacturer.
``(B) Consumable fuel.--For purposes of
subparagraph (A)(i)(I), the term `consumable fuel'
means any solid, liquid, or gaseous matter which
releases energy when consumed by an auxiliary power
unit.
``(C) Maximum available power.--
``(i) Passenger automobile, medium duty
passenger vehicle, or light truck.--For
purposes of subparagraph (A)(ii)(II), the term
`maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second
pulse power or equivalent test, divided by such
maximum power and the SAE net power of the heat
engine.
``(ii) Heavy duty hybrid motor vehicle.--
For purposes of subparagraph (A)(iii), the term
`maximum available power' means the maximum
power available from the rechargeable energy
storage system, during a standard 10 second
pulse power or equivalent test, divided by the
vehicle's total traction power. The term `total
traction power' means the sum of the peak power
from the rechargeable energy storage system and
the heat engine peak power of the vehicle,
except that if such storage system is the sole
means by which the vehicle can be driven, the
total traction power is the peak power of such
storage system.
``(4) Heavy duty hybrid motor vehicle.--For purposes of
this subsection, the term `heavy duty hybrid motor vehicle'
means a new qualified hybrid motor vehicle which has a gross
vehicle weight rating of more than 8,500 pounds. Such term does
not include a medium duty passenger vehicle.
``(d) New Qualified Alternative Fuel Motor Vehicle Credit.--
``(1) Allowance of credit.--Except as provided in paragraph
(5), the new qualified alternative fuel motor vehicle credit
determined under this subsection is an amount equal to the
applicable percentage of the incremental cost of any new
qualified alternative fuel motor vehicle placed in service by
the taxpayer during the taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage with respect to any new
qualified alternative fuel motor vehicle is--
``(A) 50 percent, plus
``(B) 30 percent, if such vehicle--
``(i) has received a certificate of
conformity under the Clean Air Act and meets or
exceeds the most stringent standard available
for certification under the Clean Air Act for
that make and model year vehicle (other than a
zero emission standard), or
``(ii) has received an order certifying the
vehicle as meeting the same requirements as
vehicles which may be sold or leased in
California and meets or exceeds the most
stringent standard available for certification
under the State laws of California (enacted in
accordance with a waiver granted under section
209(b) of the Clean Air Act) for that make and
model year vehicle (other than a zero emission
standard).
For purposes of the preceding sentence, in the case of any new
qualified alternative fuel motor vehicle which weighs more than
14,000 pounds gross vehicle weight rating, the most stringent
standard available shall be such standard available for
certification on the date of the enactment of the Energy Tax
Incentives Act.
``(3) Incremental cost.--For purposes of this subsection,
the incremental cost of any new qualified alternative fuel
motor vehicle is equal to the amount of the excess of the
manufacturer's suggested retail price for such vehicle over
such price for a gasoline or diesel fuel motor vehicle of the
same model, to the extent such amount does not exceed--
``(A) $5,000, if such vehicle has a gross vehicle
weight rating of not more than 8,500 pounds,
``(B) $10,000, if such vehicle has a gross vehicle
weight rating of more than 8,500 pounds but not more
than 14,000 pounds,
``(C) $25,000, if such vehicle has a gross vehicle
weight rating of more than 14,000 pounds but not more
than 26,000 pounds, and
``(D) $40,000, if such vehicle has a gross vehicle
weight rating of more than 26,000 pounds.
``(4) New qualified alternative fuel motor vehicle.--For
purposes of this subsection--
``(A) In general.--The term `new qualified
alternative fuel motor vehicle' means any motor
vehicle--
``(i) which is only capable of operating on
an alternative fuel,
``(ii) the original use of which commences
with the taxpayer,
``(iii) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(iv) which is made by a manufacturer.
``(B) Alternative fuel.--The term `alternative
fuel' means compressed natural gas, liquefied natural
gas, liquefied petroleum gas, hydrogen, and any liquid
at least 85 percent of the volume of which consists of
methanol.
``(5) Credit for mixed-fuel vehicles.--
``(A) In general.--In the case of a mixed-fuel
vehicle placed in service by the taxpayer during the
taxable year, the credit determined under this
subsection is an amount equal to--
``(i) in the case of a 75/25 mixed-fuel
vehicle, 70 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle, and
``(ii) in the case of a 90/10 mixed-fuel
vehicle, 90 percent of the credit which would
have been allowed under this subsection if such
vehicle was a qualified alternative fuel motor
vehicle.
``(B) Mixed-fuel vehicle.--For purposes of this
subsection, the term `mixed-fuel vehicle' means any
motor vehicle described in subparagraph (C) or (D) of
paragraph (3), which--
``(i) is certified by the manufacturer as
being able to perform efficiently in normal
operation on a combination of an alternative
fuel and a petroleum-based fuel,
``(ii) either--
``(I) has received a certificate of
conformity under the Clean Air Act, or
``(II) has received an order
certifying the vehicle as meeting the
same requirements as vehicles which may
be sold or leased in California and
meets or exceeds the low emission
vehicle standard under section 88.105-
94 of title 40, Code of Federal
Regulations, for that make and model
year vehicle,
``(iii) the original use of which commences
with the taxpayer,
``(iv) which is acquired by the taxpayer
for use or lease, but not for resale, and
``(v) which is made by a manufacturer.
``(C) 75/25 mixed-fuel vehicle.--For purposes of
this subsection, the term `75/25 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 75 percent alternative fuel and not more than 25
percent petroleum-based fuel.
``(D) 90/10 mixed-fuel vehicle.--For purposes of
this subsection, the term `90/10 mixed-fuel vehicle'
means a mixed-fuel vehicle which operates using at
least 90 percent alternative fuel and not more than 10
percent petroleum-based fuel.
``(e) Application With Other Credits.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess (if
any) of--
``(1) the regular tax for the taxable year reduced by the
sum of the credits allowable under subpart A and sections 27,
29, and 30, over
``(2) the tentative minimum tax for the taxable year.
``(f) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Motor vehicle.--The term `motor vehicle' has the
meaning given such term by section 30(c)(2).
``(2) City fuel economy.--The city fuel economy with
respect to any vehicle shall be measured in a manner which is
substantially similar to the manner city fuel economy is
measured in accordance with procedures under part 600 of
subchapter Q of chapter I of title 40, Code of Federal
Regulations, as in effect on the date of the enactment of this
section.
``(3) Other terms.--The terms `automobile', `passenger
automobile', `medium duty passenger vehicle', `light truck',
and `manufacturer' have the meanings given such terms in
regulations prescribed by the Administrator of the
Environmental Protection Agency for purposes of the
administration of title II of the Clean Air Act (42 U.S.C. 7521
et seq.).
``(4) Reduction in basis.--For purposes of this subtitle,
the basis of any property for which a credit is allowable under
subsection (a) shall be reduced by the amount of such credit so
allowed (determined without regard to subsection (e)).
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter--
``(A) for any incremental cost taken into account
in computing the amount of the credit determined under
subsection (d) shall be reduced by the amount of such
credit attributable to such cost, and
``(B) with respect to a vehicle described under
subsection (b) or (c), shall be reduced by the amount
of credit allowed under subsection (a) for such vehicle
for the taxable year.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle whose use is described in paragraph (3) or (4) of
section 50(b) and which is not subject to a lease, the person
who sold such vehicle to the person or entity using such
vehicle shall be treated as the taxpayer that placed such
vehicle in service, but only if such person clearly discloses
to such person or entity in a document the amount of any credit
allowable under subsection (a) with respect to such vehicle
(determined without regard to subsection (e)).
``(7) Property used outside united states, etc., not
qualified.--No credit shall be allowable under subsection (a)
with respect to any property referred to in section 50(b)(1) or
with respect to the portion of the cost of any property taken
into account under section 179.
``(8) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any property which ceases
to be property eligible for such credit (including recapture in
the case of a lease period of less than the economic life of a
vehicle).
``(9) Election to not take credit.--No credit shall be
allowed under subsection (a) for any vehicle if the taxpayer
elects to not have this section apply to such vehicle.
``(10) Carryback and carryforward allowed.--
``(A) In general.--If the credit allowable under
subsection (a) for a taxable year exceeds the amount of
the limitation under subsection (e) for such taxable
year (in this paragraph referred to as the `unused
credit year'), such excess shall be a credit carryback
to each of the 3 taxable years preceding the unused
credit year and a credit carryforward to each of the 20
taxable years following the unused credit year, except
that no excess may be carried to a taxable year
beginning before the date of the enactment of this
section. The preceding sentence shall not apply to any
credit carryback if such credit carryback is
attributable to property for which a deduction for
depreciation is not allowable.
``(B) Rules.--Rules similar to the rules of section
39 shall apply with respect to the credit carryback and
credit carryforward under subparagraph (A).
``(11) Interaction with air quality and motor vehicle
safety standards.--Unless otherwise provided in this section, a
motor vehicle shall not be considered eligible for a credit
under this section unless such vehicle is in compliance with--
``(A) the applicable provisions of the Clean Air
Act for the applicable make and model year of the
vehicle (or applicable air quality provisions of State
law in the case of a State which has adopted such
provision under a waiver under section 209(b) of the
Clean Air Act), and
``(B) the motor vehicle safety provisions of
sections 30101 through 30169 of title 49, United States
Code.
``(g) Regulations.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall promulgate such regulations as necessary to
carry out the provisions of this section.
``(2) Coordination in prescription of certain
regulations.--The Secretary of the Treasury, in coordination
with the Secretary of Transportation and the Administrator of
the Environmental Protection Agency, shall prescribe such
regulations as necessary to determine whether a motor vehicle
meets the requirements to be eligible for a credit under this
section.
``(h) Termination.--This section shall not apply to any property
purchased after--
``(1) in the case of a new qualified fuel cell motor
vehicle (as described in subsection (b)), December 31, 2014,
``(2) in the case of a new qualified hybrid motor vehicle
(as described in subsection (c)), December 31, 2009, and
``(3) in the case of a new qualified alternative fuel
vehicle (as described in subsection (d)), December 31, 2010.''.
(b) Conforming Amendments.--
(1) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (35), by striking the
period at the end of paragraph (36) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(37) to the extent provided in section 30B(f)(4).''.
(2) Section 55(c)(2), as amended by this Act, is amended by
inserting ``30B(e),'' after ``30(b)(2),''.
(3) Section 6501(m) is amended by inserting ``30B(f)(9),''
after ``30(d)(4),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 30A the following new item:
``Sec. 30B. Alternative motor vehicle credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
SEC. 1532. MODIFICATION OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) Amount of Credit.--
(1) In general.--Section 30(a) (relating to allowance of
credit) is amended by striking ``10 percent of''.
(2) Limitation of credit according to type of vehicle.--
Paragraph (1) of section 30(b) (relating to limitations) is
amended to read as follows:
``(1) Limitation according to type of vehicle.--The amount
of the credit allowed under subsection (a) for any vehicle
shall not exceed the greatest of the following amounts
applicable to such vehicle:
``(A) In the case of a vehicle with a gross vehicle
weight rating not exceeding 8,500 pounds--
``(i) except as provided in clause (ii) or
(iii), $4,000,
``(ii) $6,000, if such vehicle is--
``(I) capable of a driving range of
at least 100 miles on a single charge
of the vehicle's rechargeable batteries
as measured pursuant to the urban
dynamometer schedules under appendix I
to part 86 of title 40, Code of Federal
Regulations, or
``(II) capable of a payload
capacity of at least 1,000 pounds, and
``(iii) if such vehicle is a low-speed
vehicle which conforms to Standard 500
prescribed by the Secretary of Transportation
(49 C.F.R. 571.500), as in effect on the date
of the enactment of the Energy Tax Incentives
Act, the lesser of--
``(I) 10 percent of the
manufacturer's suggested retail price
of the vehicle, or
``(II) $1,500.
``(B) In the case of a vehicle with a gross vehicle
weight rating exceeding 8,500 but not exceeding 14,000
pounds, $10,000.
``(C) In the case of a vehicle with a gross vehicle
weight rating exceeding 14,000 but not exceeding 26,000
pounds, $20,000.
``(D) In the case of a vehicle with a gross vehicle
weight rating exceeding 26,000 pounds, $40,000.''.
(b) Qualified Battery Electric Vehicle.--
(1) In general.--Section 30(c)(1)(A) (defining qualified
electric vehicle) is amended to read as follows:
``(A) which is--
``(i) operated solely by use of a battery
or battery pack, or
``(ii) powered primarily through the use of
an electric battery or battery pack using a
flywheel or capacitor which stores energy
produced by an electric motor through
regenerative braking to assist in vehicle
operation,''.
(2) Leased vehicles.--Section 30(c)(1)(C) is amended by
inserting ``or lease'' after ``use''.
(3) Conforming amendments.--
(A) Subsections (a), (b)(2), and (c) of section 30
are each amended by inserting ``battery'' after
``qualified'' each place it appears.
(B) The heading of subsection (c) of section 30 is
amended by inserting ``Battery'' after ``Qualified''.
(C) The heading of section 30 is amended by
inserting ``battery'' after ``qualified''.
(D) The item relating to section 30 in the table of
sections for subpart B of part IV of subchapter A of
chapter 1 is amended by inserting ``battery'' after
``qualified''.
(E) Section 179A(c)(3) is amended by inserting
``battery'' before ``electric''.
(F) The heading of paragraph (3) of section 179A(c)
is amended by inserting ``battery'' before
``electric''.
(c) Additional Special Rules.--
(1) In general.--Section 30(d) (relating to special rules)
is amended by adding at the end the following new paragraphs:
``(5) No double benefit.--The amount of any deduction or
other credit allowable under this chapter for any cost taken
into account in computing the amount of the credit determined
under subsection (a) shall be reduced by the amount of such
credit attributable to such cost.
``(6) Property used by tax-exempt entity.--In the case of a
vehicle whose use is described in paragraph (3) or (4) of
section 50(b) and which is not subject to a lease, the person
who sold such vehicle to the person or entity using such
vehicle shall be treated as the taxpayer that placed such
vehicle in service, but only if such person clearly discloses
to such person or entity in a document the amount of any credit
allowable under subsection (a) with respect to such vehicle
(determined without regard to subsection (b)(3)).
``(7) Carryback and carryforward allowed.--
``(A) In general.--If the credit allowable under
subsection (a) for a taxable year exceeds the amount of
the limitation under subsection (b)(2) for such taxable
year (in this paragraph referred to as the `unused
credit year'), such excess shall be a credit carryback
to each of the 3 taxable years preceding the unused
credit year and a credit carryforward to each of the 20
taxable years following the unused credit year, except
that no excess may be carried to a taxable year
beginning before the date of the enactment of this
paragraph. The preceding sentence shall not apply to
any credit carryback if such credit carryback is
attributable to property for which a deduction for
depreciation is not allowable.
``(B) Rules.--Rules similar to the rules of section
39 shall apply with respect to the credit carryback and
credit carryforward under subparagraph (A).''.
(2) Conforming amendments.--Section 30(d)(3) is amended--
(A) by striking ``section 50(b)'' and inserting
``section 50(b)(1)'', and
(B) by striking ``, etc.,'' in the heading thereof.
(d) Termination.--Section 30(e) (relating to termination) is
amended by striking ``2006'' and inserting ``2009''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, in taxable years ending after such date.
SEC. 1533. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING STATIONS.
(a) In General.--Subpart B of part IV of subchapter A of chapter 1
(relating to other credits), as amended by this Act, is amended by
adding at the end the following new section:
``SEC. 30C. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT.
``(a) Credit Allowed.--There shall be allowed as a credit against
the tax imposed by this chapter for the taxable year an amount equal to
50 percent of the cost of any qualified alternative fuel vehicle
refueling property placed in service by the taxpayer during the taxable
year.
``(b) Limitation.--The credit allowed under subsection (a) with
respect to any alternative fuel vehicle refueling property shall not
exceed--
``(1) $30,000 in the case of a property of a character
subject to an allowance for depreciation, and
``(2) $1,000 in any other case.
``(c) Qualified Alternative Fuel Vehicle Refueling Property.--
``(1) In general.--Except as provided in paragraph (2), the
term `qualified alternative fuel vehicle refueling property'
has the meaning given to such term by section 179A(d), but only
with respect to any fuel at least 85 percent of the volume of
which consists of ethanol, natural gas, compressed natural gas,
liquefied natural gas, liquefied petroleum gas, and hydrogen or
any mixture of biodiesel (as defined in section 40A(d)(1)) and
diesel fuel (as defined in section 4083(a)(3)), determined
without regard to any use of kerosene and containing at least
20 percent biodiesel.
``(2) Residential property.--In the case of any property
installed on property which is used as the principal residence
(within the meaning of section 121) of the taxpayer, paragraph
(1) of section 179A(d) shall not apply.
``(d) Application With Other Credits.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess (if
any) of--
``(1) the regular tax for the taxable year reduced by the
sum of the credits allowable under subpart A and sections 27,
29, 30, and 30B, over
``(2) the tentative minimum tax for the taxable year.
``(e) Carryforward Allowed.--
``(1) In general.--If the credit amount allowable under
subsection (a) for a taxable year exceeds the amount of the
limitation under subsection (d) for such taxable year, such
excess shall be allowed as a credit carryforward for each of
the 20 taxable years following the unused credit year.
``(2) Rules.--Rules similar to the rules of section 39
shall apply with respect to the credit carryforward under
paragraph (1).
``(f) Special Rules.--For purposes of this section--
``(1) Basis reduction.--The basis of any property shall be
reduced by the portion of the cost of such property taken into
account under subsection (a).
``(2) No double benefit.--No deduction shall be allowed
under section 179A with respect to any property with respect to
which a credit is allowed under subsection (a).
``(3) Property used by tax-exempt entity.--In the case of
any qualified alternative fuel vehicle refueling property the
use of which is described in paragraph (3) or (4) of section
50(b) and which is not subject to a lease, the person who sold
such property to the person or entity using such property shall
be treated as the taxpayer that placed such property in
service, but only if such person clearly discloses to such
person or entity in a document the amount of any credit
allowable under subsection (a) with respect to such property
(determined without regard to subsection (d)).
``(4) Property used outside united states not qualified.--
No credit shall be allowable under subsection (a) with respect
to any property referred to in section 50(b)(1) or with respect
to the portion of the cost of any property taken into account
under section 179.
``(5) Election not to take credit.--No credit shall be
allowed under subsection (a) for any property if the taxpayer
elects not to have this section apply to such property.
``(6) Recapture rules.--Rules similar to the rules of
section 179A(e)(4) shall apply.
``(g) Regulations.--The Secretary shall prescribe such regulations
as necessary to carry out the provisions of this section.
``(h) Termination.--This section shall not apply to any property
placed in service--
``(1) in the case of property relating to hydrogen, after
December 31, 2014, and
``(2) in the case of any other property, after December 31,
2009.''.
(b) Conforming Amendments.--
(1) Section 1016(a), as amended by this Act, is amended by
striking ``and'' at the end of paragraph (36), by striking the
period at the end of paragraph (37) and inserting ``, and'',
and by adding at the end the following new paragraph:
``(38) to the extent provided in section 30C(f).''.
(2) Section 55(c)(2), as amended by this Act, is amended by
inserting ``30C(e),'' after ``30B(e),''.
(3) Section 6501(m) is amended by inserting ``30C(f)(5),''
after ``30B(f)(9),''.
(4) The table of sections for subpart B of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 30B the
following new item:
``Sec. 30C. Clean-fuel vehicle refueling property credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2005, in taxable
years ending after such date.
SEC. 1534. VOLUMETRIC EXCISE TAX CREDIT FOR ALTERNATIVE FUELS.
(a) Imposition of Tax.--
(1) In general.--Section 4041(a)(2)(B) (relating to rate of
tax) is amended--
(A) by adding ``and'' at the end of clause (i),
(B) by striking clauses (ii) and (iii),
(C) by striking the last sentence, and
(D) by adding after clause (i) the following new
clause:
``(ii) in the case of liquefied natural
gas, any liquid fuel (other than ethanol and
methanol) derived from coal (including peat),
and liquid hydrocarbons derived from biomass
(as defined in section 29(c)(3)), 24.3 cents
per gallon.''.
(2) Treatment of compressed natural gas.--Section
4041(a)(3) (relating to compressed natural gas) is amended--
(A) by striking ``48.54 cents per MCF (determined
at standard temperature and pressure)'' in subparagraph
(A) and inserting ``18.3 cents per energy equivalent of
a gallon of gasoline'', and
(B) by striking ``MCF'' in subparagraph (C) and
inserting ``energy equivalent of a gallon of
gasoline''.
(3) Zero rate for hydrogen.--Section 4041(a)(2)(A) is
amended by inserting ``liquefied hydrogen,'' after ``fuel
oil,''.
(4) New reference.--The heading for paragraph (2) of
section 4041(a) is amended by striking ``Special motor fuels''
and inserting ``Alternative fuels''.
(b) Credit for Alternative Fuel and Alternative Fuel Mixtures.--
(1) In general.--Section 6426(a) (relating to allowance of
credits) is amended to read as follows:
``(a) Allowance of Credits.--There shall be allowed as a credit--
``(1) against the tax imposed by section 4081 an amount
equal to the sum of the credits described in subsections (b),
(c), and (e), and
``(2) against the tax imposed by section 4041 an amount
equal to the sum of the credits described in subsection (d).
No credit shall be allowed in the case of the credits described in
subsections (d) and (e) unless the taxpayer is registered under section
4101.
(2) Alternative fuel and alternative fuel mixture credit.--
Section 6426 (relating to credit for alcohol fuel and biodiesel
mixtures) is amended by redesignating subsections (d) and (e)
as subsections (f) and (g) and by inserting after subsection
(c) the following new subsections:
``(d) Alternative Fuel Credit.--
``(1) In general.--For purposes of this section, the
alternative fuel credit is the product of 50 cents and the
number of gallons of an alternative fuel or gasoline gallon
equivalents of a nonliquid alternative fuel sold by the
taxpayer for use as a fuel in a motor vehicle or motorboat, or
so used by the taxpayer.
``(2) Alternative fuel.--For purposes of this section, the
term `alternative fuel' means--
``(A) liquefied petroleum gas,
``(B) P Series Fuels (as defined by the Secretary
of Energy under section 13211(2) of title 42, United
States Code),
``(C) compressed or liquefied natural gas,
``(D) hydrogen,
``(E) any liquid fuel derived from coal (including
peat) through the Fischer-Tropsch process,
``(F) liquid hydrocarbons derived from biomass (as
defined in section 29(c)(3)).
Such term does not include ethanol, methanol, or biodiesel.
``(3) Gasoline gallon equivalent.--For purposes of this
subsection, the term `gasoline gallon equivalent' means, with
respect to any nonliquid alternative fuel, the amount of such
fuel having a Btu content of 124,800 (higher heating value).
``(4) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after September 30, 2009.
``(e) Alternative Fuel Mixture Credit.--
``(1) In general.--For purposes of this section, the
alternative fuel mixture credit is the product of 50 cents and
the number of gallons of alternative fuel used by the taxpayer
in producing any alternative fuel mixture for sale or use in a
trade or business of the taxpayer.
``(2) Alternative fuel mixture.--For purposes of this
section, the term `alternative fuel mixture' means a mixture of
alternative fuel and taxable fuel (as defined in subparagraph
(A), (B), or (C) of section 4083(a)(1)) which--
``(A) is sold by the taxpayer producing such
mixture to any person for use as fuel, or
``(B) is used as a fuel by the taxpayer producing
such mixture.
``(3) Termination.--This subsection shall not apply to any
sale, use, or removal for any period after September 30,
2009.''.
(3) Conforming amendments.--
(A) The section heading for section 6426 is amended
by striking ``alcohol fuel and biodiesel'' and
inserting ``alcohol fuel, biodiesel, and alternative
fuel''.
(B) The table of sections for subchapter B of
chapter 65 is amended by striking ``alcohol fuel and
biodiesel'' in the item relating to section 6426 and
inserting ``alcohol fuel, biodiesel, and alternative
fuel''.
(C) Section 6427(e) is amended--
(i) by inserting ``or the alternative fuel
mixture credit'' after ``biodiesel mixture
credit'' in paragraph (1),
(ii) by redesignating paragraph (2) as
paragraph (3) and paragraph (4) as paragraph
(5),
(iii) by inserting after paragraph (1) the
following new paragraph:
``(2) Alternative fuel.--If any person sells or uses an
alternative fuel (as defined in section 6426(d)(2)) for a
purpose described in section 6426(d)(1) in such person's trade
or business, the Secretary shall pay (without interest) to such
person an amount equal to the alternative fuel credit with
respect to such fuel.'',
(iv) by striking ``under paragraph (1) with
respect to any mixture'' in paragraph (3) (as
redesignated by clause (ii)) and inserting
``under paragraph (1) or (2) with respect to
any mixture or alternative fuel'',
(v) by inserting after paragraph (3) (as so
redesignated) the following new paragraph:
``(4) Registration requirement for alternative fuels.--The
Secretary shall not make any payment under this subsection to
any person with respect to any alternative fuel credit or
alternative fuel mixture credit unless the person is registered
under section 4101.'',
(vi) by striking ``and'' at the end of
paragraph (5)(A) (as redesignated by clause
(ii)),
(vii) by striking the period at the end of
paragraph (5)(B) (as so redesignated) and
inserting a comma,
(viii) by adding at the end of paragraph
(4) (as so redesignated) the following new
subparagraphs:
``(C) except as provided in subparagraph (D), any
alternative fuel or alternative fuel mixture (as
defined in section 6426 (d)(2) or (e)(3)) sold or used
after September 30, 2009, and
``(D) any alternative fuel or alternative fuel
mixture (as so defined) involving hydrogen sold or used
after December 31, 2014.'', and
(ix) by striking ``or Biodiesel Used To
Produce Alcohol Fuel and Biodiesel Mixtures''
in the heading and inserting ``, Biodiesel, or
Alternative Fuel''.
(c) Additional Registration Requirements.--Section 4101(a)(1)
(relating to registration) is amended--
(1) by striking ``4041(a)(1)'' and inserting ``4041(a)'',
and
(2) by inserting ``or hydrogen'' before ``shall register''.
(d) Effective Date.--The amendments made by this section shall
apply to any sale, use, or removal for any period after September 30,
2006.
SEC. 1535. EXTENSION OF EXCISE TAX PROVISIONS AND INCOME TAX CREDIT FOR
BIODIESEL.
(a) In General.--Sections 40A(e), 6426(c)(6), and 6427(e)(4)(B) are
each amended by striking ``2006'' and inserting ``2010''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
Subtitle E--Additional Energy Tax Incentives
SEC. 1541. 10-YEAR RECOVERY PERIOD FOR UNDERGROUND NATURAL GAS STORAGE
FACILITY PROPERTY.
(a) In General.--Subparagraph (D) of section 168(e)(3) (relating to
10-year property) is amended by striking ``and'' at the end of clause
(i), by striking the period at the end of clause (ii) and inserting ``,
and'', and by adding at the end the following new clause:
``(iii) any qualified underground natural
gas storage facility property.''.
(b) Definition.--Section 168(i) (relating to definitions and
special rules) is amended by adding at the end the following new
paragraph:
``(17) Qualified underground natural gas storage facility
property.--
``(A) In general.--The term `qualified underground
natural gas storage facility property' means any
underground natural gas storage facility and any
equipment related to such facility, including any
nonrecoverable cushion gas, the original use of which
commences with the taxpayer.
``(B) Cushion gas.--The term `cushion gas' means
the minimum volume of natural gas necessary to provide
the pressure to facilitate the flow of natural gas from
a storage reservoir, aquifer, or cavern to a
pipeline.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
SEC. 1542. EXPANSION OF RESEARCH CREDIT.
(a) Credit for Expenses Attributable to Certain Collaborative
Energy Research Consortia.--
(1) In general.--Section 41(a) (relating to credit for
increasing research activities) is amended by striking ``and''
at the end of paragraph (1), by striking the period at the end
of paragraph (2) and inserting ``, and'', and by adding at the
end the following new paragraph:
``(3) 20 percent of the amounts paid or incurred by the
taxpayer in carrying on any trade or business of the taxpayer
during the taxable year (including as contributions) to an
energy research consortium.''.
(2) Energy research consortium defined.--Section 41(f)
(relating to special rules) is amended by adding at the end the
following new paragraph:
``(6) Energy research consortium.--
``(A) In general.--The term `energy research
consortium' means any organization--
``(i) which is--
``(I) described in section
501(c)(3) and is exempt from tax under
section 501(a) and is organized and
operated primarily to conduct energy
research, or
``(II) organized and operated
primarily to conduct energy research in
the public interest (within the meaning
of section 501(c)(3)),
``(ii) which is not a private foundation,
``(iii) to which at least 5 unrelated
persons paid or incurred during the calendar
year in which the taxable year of the
organization begins amounts (including as
contributions) to such organization for energy
research, and
``(iv) to which no single person paid or
incurred (including as contributions) during
such calendar year an amount equal to more than
50 percent of the total amounts received by
such organization during such calendar year for
energy research.
``(B) Treatment of persons.--All persons treated as
a single employer under subsection (a) or (b) of
section 52 shall be treated as related persons for
purposes of subparagraph (A)(iii) and as a single
person for purposes of subparagraph (A)(iv).''.
(3) Conforming amendment.--Section 41(b)(3)(C) is amended
by inserting ``(other than an energy research consortium)''
after ``organization''.
(b) Repeal of Limitation on Contract Research Expenses Paid to
Small Businesses, Universities, and Federal Laboratories.--Section
41(b)(3) (relating to contract research expenses) is amended by adding
at the end the following new subparagraph:
``(D) Amounts paid to eligible small businesses,
universities, and federal laboratories.--
``(i) In general.--In the case of amounts
paid by the taxpayer to--
``(I) an eligible small business,
``(II) an institution of higher
education (as defined in section
3304(f)), or
``(III) an organization which is a
Federal laboratory,
for qualified research which is energy
research, subparagraph (A) shall be applied by
substituting `100 percent' for `65 percent'.
``(ii) Eligible small business.--For
purposes of this subparagraph, the term
`eligible small business' means a small
business with respect to which the taxpayer
does not own (within the meaning of section
318) 50 percent or more of--
``(I) in the case of a corporation,
the outstanding stock of the
corporation (either by vote or value),
and
``(II) in the case of a small
business which is not a corporation,
the capital and profits interests of
the small business.
``(iii) Small business.--For purposes of
this subparagraph--
``(I) In general.--The term `small
business' means, with respect to any
calendar year, any person if the annual
average number of employees employed by
such person during either of the 2
preceding calendar years was 500 or
fewer. For purposes of the preceding
sentence, a preceding calendar year may
be taken into account only if the
person was in existence throughout the
year.
``(II) Startups, controlled groups,
and predecessors.--Rules similar to the
rules of subparagraphs (B) and (D) of
section 220(c)(4) shall apply for
purposes of this clause.
``(iv) Federal laboratory.--For purposes of
this subparagraph, the term `Federal
laboratory' has the meaning given such term by
section 4(6) of the Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3703(6)), as
in effect on the date of the enactment of the
Energy Tax Incentives Act.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after the date of the enactment of
this Act, in taxable years ending after such date.
SEC. 1543. SMALL AGRI-BIODIESEL PRODUCER CREDIT.
(a) In General.--Subsection (a) of section 40A (relating to
biodiesel used as a fuel) is amended to read as follows:
``(a) General Rule.--For purposes of section 38, the biodiesel
fuels credit determined under this section for the taxable year is an
amount equal to the sum of--
``(1) the biodiesel mixture credit, plus
``(2) the biodiesel credit, plus
``(3) in the case of an eligible small agri-biodiesel
producer, the small agri-biodiesel producer credit.''.
(b) Small Agri-biodiesel Producer Credit Defined.--Section 40A(b)
(relating to definition of biodiesel mixture credit and biodiesel
credit) is amended by adding at the end the following new paragraph:
``(5) Small agri-biodiesel producer credit.--
``(A) In general.--The small agri-biodiesel
producer credit of any eligible small agri-biodiesel
producer for any taxable year is 10 cents for each
gallon of qualified agri-biodiesel production of such
producer.
``(B) Qualified agri-biodiesel production.--For
purposes of this paragraph, the term `qualified agri-
biodiesel production' means any agri-biodiesel which is
produced by an eligible small agri-biodiesel producer,
and which during the taxable year--
``(i) is sold by such producer to another
person--
``(I) for use by such other person
in the production of a qualified
biodiesel mixture in such other
person's trade or business (other than
casual off-farm production),
``(II) for use by such other person
as a fuel in a trade or business, or
``(III) who sells such agri-
biodiesel at retail to another person
and places such agri-biodiesel in the
fuel tank of such other person, or
``(ii) is used or sold by such producer for
any purpose described in clause (i).
``(C) Limitation.--The qualified agri-biodiesel
production of any producer for any taxable year shall
not exceed 15,000,000 gallons.''.
(c) Definitions and Special Rules.--Section 40A is amended by
redesignating subsection (e) as subsection (f) and by inserting after
subsection (d) the following new subsection:
``(e) Definitions and Special Rules for Small Agri-biodiesel
Producer Credit.--For purposes of this section--
``(1) Eligible small agri-biodiesel producer.--The term
`eligible small agri-biodiesel producer' means a person who, at
all times during the taxable year, has a productive capacity
for agri-biodiesel not in excess of 60,000,000 gallons.
``(2) Aggregation rule.--For purposes of the 15,000,000
gallon limitation under subsection (b)(5)(C) and the 60,000,000
gallon limitation under paragraph (1), all members of the same
controlled group of corporations (within the meaning of section
267(f)) and all persons under common control (within the
meaning of section 52(b) but determined by treating an interest
of more than 50 percent as a controlling interest) shall be
treated as 1 person.
``(3) Partnership, s corporation, and other pass-thru
entities.--In the case of a partnership, trust, S corporation,
or other pass-thru entity, the limitations contained in
subsection (b)(5)(C) and paragraph (1) shall be applied at the
entity level and at the partner or similar level.
``(4) Allocation.--For purposes of this subsection, in the
case of a facility in which more than 1 person has an interest,
productive capacity shall be allocated among such persons in
such manner as the Secretary may prescribe.
``(5) Regulations.--The Secretary may prescribe such
regulations as may be necessary--
``(A) to prevent the credit provided for in
subsection (a)(3) from directly or indirectly
benefiting any person with a direct or indirect
productive capacity of more than 60,000,000 gallons of
agri-biodiesel during the taxable year, or
``(B) to prevent any person from directly or
indirectly benefiting with respect to more than
15,000,000 gallons during the taxable year.
``(6) Allocation of small agri-biodiesel credit to patrons
of cooperative.--
``(A) Election to allocate.--
``(i) In general.--In the case of a
cooperative organization described in section
1381(a), any portion of the credit determined
under subsection (a)(3) for the taxable year
may, at the election of the organization, be
apportioned pro rata among patrons of the
organization on the basis of the quantity or
value of business done with or for such patrons
for the taxable year.
``(ii) Form and effect of election.--An
election under clause (i) for any taxable year
shall be made on a timely filed return for such
year. Such election, once made, shall be
irrevocable for such taxable year. Such
election shall not take effect unless the
organization designates the apportionment as
such in a written notice mailed to its patrons
during the payment period described in section
1382(d).
``(B) Treatment of organizations and patrons.--
``(i) Organizations.--The amount of the
credit not apportioned to patrons pursuant to
subparagraph (A) shall be included in the
amount determined under subsection (a)(3) for
the taxable year of the organization.
``(ii) Patrons.--The amount of the credit
apportioned to patrons pursuant to subparagraph
(A) shall be included in the amount determined
under such subsection for the first taxable
year of each patron ending on or after the last
day of the payment period (as defined in
section 1382(d)) for the taxable year of the
organization or, if earlier, for the taxable
year of each patron ending on or after the date
on which the patron receives notice from the
cooperative of the apportionment.
``(iii) Special rules for decrease in
credits for taxable year.--If the amount of the
credit of the organization determined under
such subsection for a taxable year is less than
the amount of such credit shown on the return
of the organization for such year, an amount
equal to the excess of--
``(I) such reduction, over
``(II) the amount not apportioned
to such patrons under subparagraph (A)
for the taxable year,
shall be treated as an increase in tax imposed
by this chapter on the organization. Such
increase shall not be treated as tax imposed by
this chapter for purposes of determining the
amount of any credit under this chapter or for
purposes of section 55.''.
(d) Conforming Amendments.--
(1) Paragraph (4) of section 40A(b) is amended by striking
``this section'' and inserting ``paragraph (1) or (2) of
subsection (a)''.
(2) The heading of subsection (b) of section 40A is amended
by striking ``and Biodiesel Credit'' and inserting ``,
Biodiesel Credit, and Small Agri-biodiesel Producer Credit''.
(3) Paragraph (3) of section 40A(d) is amended by
redesignating subparagraph (C) as subparagraph (D) and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) Producer credit.--If--
``(i) any credit was determined under
subsection (a)(3), and
``(ii) any person does not use such fuel
for a purpose described in subsection
(b)(5)(B),
then there is hereby imposed on such person a tax equal
to 10 cents a gallon for each gallon of such agri-
biodiesel.''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 1544. IMPROVEMENTS TO SMALL ETHANOL PRODUCER CREDIT.
(a) Definition of Small Ethanol Producer.--Section 40(g) (relating
to definitions and special rules for eligible small ethanol producer
credit) is amended by striking ``30,000,000'' each place it appears and
inserting ``60,000,000''.
(b) Written Notice of Election to Allocate Credit to Patrons.--
Section 40(g)(6)(A)(ii) (relating to form and effect of election) is
amended by adding at the end the following new sentence: ``Such
election shall not take effect unless the organization designates the
apportionment as such in a written notice mailed to its patrons during
the payment period described in section 1382(d).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 1545. CREDIT FOR EQUIPMENT FOR PROCESSING OR SORTING MATERIALS
GATHERED THROUGH RECYCLING.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits), as amended by this Act, is
amended by adding at the end the following new section:
``SEC. 45M. CREDIT FOR QUALIFIED RECYCLING EQUIPMENT.
``(a) Allowance of Credit.--For purposes of section 38, the
qualified recycling equipment credit determined under this section for
the taxable year is an amount equal to the amount paid or incurred
during the taxable year for the cost of qualified recycling equipment
placed in service or leased by the taxpayer.
``(b) Limitation.--The amount allowable as a credit under
subsection (a) with respect to any qualified recycling equipment shall
not exceed--
``(1) in the case of such equipment described in subsection
(c)(1)(A)(i), 15 percent of the cost of such equipment, and
``(2) in the case of such equipment described in subsection
(c)(1)(A)(ii), 15 percent of so much of the cost of each piece
of equipment as exceeds $400,000.
``(c) Definitions.--For purposes of this section--
``(1) Qualified recycling equipment.--
``(A) In general.--The term `qualified recycling
equipment' means equipment, including connecting
piping--
``(i) employed in sorting or processing
residential and commercial qualified recyclable
materials described in paragraph (2)(A) for the
purpose of converting such materials for use in
manufacturing tangible consumer products,
including packaging, or
``(ii) the primary purpose of which is the
shredding and processing of qualified
recyclable materials described in paragraph
(2)(B).
``(B) Equipment at commercial or public venues
included.--For purposes of subparagraph (A)(i), such
term includes equipment which is utilized at commercial
or public venues, including recycling collection
centers, where the equipment is utilized to sort or
process qualified recyclable materials for such
purpose.
``(C) Exclusion.--Such term does not include
rolling stock or other equipment used to transport
recyclable materials.
``(2) Qualified recyclable materials.--The term `qualified
recyclable materials' means--
``(A) any packaging or printed material which is
glass, paper, plastic, steel, or aluminum, and
``(B) any electronic waste (including any cathode
ray tube, flat panel screen, or similar video display
device with a screen size greater than 4 inches
measured diagonally, or a central processing unit),
generated by an individual or business and which has been
separated from solid waste for the purposes of collection and
recycling.
``(3) Processing.--The term `processing' means the
preparation of qualified recyclable materials into feedstock
for use in manufacturing tangible consumer products.
``(d) Amount Paid or Incurred.--For purposes of this section--
``(1) In general.--The term `amount paid or incurred'
includes installation costs.
``(2) Lease payments.--In the case of the leasing of
qualified recycling equipment by the taxpayer, the term `amount
paid or incurred' means the amount of the lease payments due to
be paid during the term of the lease occurring during the
taxable year other than such portion of such lease payments
attributable to interest, insurance, and taxes.
``(3) Grants, etc. excluded.--The term `amount paid or
incurred' shall not include any amount to the extent such
amount is funded by any grant, contract, or otherwise by
another person (or any governmental entity).
``(e) Other Tax Deductions and Credits Available for Portion of
Cost Not Taken Into Account for Credit Under This Section.--No
deduction or other credit under this chapter shall be allowed with
respect to the amount of the credit determined under this section.
``(f) Basis Adjustments.--For purposes of this subtitle, if a
credit is allowed under this section for any amount paid or incurred
with respect to any property, the increase in the basis of such
property which would (but for this subsection) result from such
expenditure shall be reduced by the amount of the credit so allowed.''.
(b) Conforming Amendments.--
(1) Credit made part of general business credit.--
Subsection (b) of section 38, as amended by this Act, is
amended by striking ``plus'' at the end of paragraph (21), by
striking the period at the end of paragraph (22) and inserting
``, plus'', and by adding at the end the following new
paragraph:
``(23) the qualified recycling equipment credit determined
under section 45M(a).''.
(2) Subsection (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (37), by
striking the period at the end of paragraph (38) and inserting
``; and'', and by adding at the end the following new
paragraph:
``(39) to the extent provided in section 45M(f), in the
case of amounts with respect to which a credit has been allowed
under section 45M.''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 45L the
following new item:
``Sec. 45M. Credit for qualified recycling equipment.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2005.
SEC. 1546. 5-YEAR NET OPERATING LOSS CARRYOVER IF ANY RESULTING REFUND
IS USED FOR ELECTRIC TRANSMISSION EQUIPMENT.
(a) In General.--Paragraph (1) of section 172(b) (relating to net
operating loss carrybacks and carryovers) is amended by adding at the
end the following new subparagraph:
``(I) Transmission property investment.--
``(i) In general.--In the case of a net
operating loss in a taxable year ending after
December 31, 2002, and before January 1, 2006,
there shall be a net operating loss carryback
to each of the 5 years preceding the taxable
year of such loss to the extent that any refund
resulting from such carryback is used for
electric transmission property capital
expenditures or pollution control facility
capital expenditures.
``(ii) Refund claim.--Any refund resulting
from the application of clause (i) may be
claimed by the taxpayer during any taxable year
ending after December 31, 2005, and before
January 1, 2009, except that the portion of
such refund which may be claimed during any
taxable year shall not exceed the sum of the
taxpayer's electric transmission property
capital expenditures and pollution control
facility capital expenditures made in the
preceding taxable year.
``(iii) Carryover of excess refunds.--Any
portion of such refund that exceeds the sum of
the taxpayer's electric transmission property
capital expenditures and pollution control
facility capital expenditures made during the
preceding taxable year shall, subject to clause
(ii), be considered a refund due to the
taxpayer and claimed in the succeeding taxable
year if such taxable year begins before January
1, 2009.
``(iv) Definitions.--For purposes of this
subparagraph--
``(I) Electric transmission
property capital expenditures.--The
term `electric transmission property
capital expenditures' means any
expenditure, chargeable to capital
account, made by the taxpayer which is
attributable to electric transmission
property used in the transmission at 69
or more kilovolts of electricity for
sale.
``(II) Pollution control facility
capital expenditures.--The term
`pollution control facility capital
expenditures' means any expenditure,
chargeable to capital account, made by
an electric utility company (as defined
in section 2(3) of the Public Utility
Holding Company Act (15 U.S.C. 79b(3))
which is attributable to a facility
which will qualify as a certified
pollution control facility as
determined under section 169(d)(1) by
striking `before January 1, 1976,' and
by substituting `an identifiable' for
`a new identifiable'.''
(b) Election to Disregard Carryback.--Section 172(j) (relating to
disregard 5-year carryback for certain net operating losses) is amended
by inserting ``or (b)(1)(I)'' after ``(b)(1)(H)'' both places it
appears.
(c) Application.--In the case of a net operating loss described in
section 172(b)(1)(I) of the Internal Revenue Code of 1986 (as added by
subsection (a)) for a taxable year ending in 2003, 2004, or 2005, any
election made under section 172(j) of such Code (as amended by
subsection (b)) shall be treated as timely made if made before January
1, 2009.
SEC. 1547. CREDIT FOR QUALIFYING POLLUTION CONTROL EQUIPMENT.
(a) Allowance of Qualifying Pollution Control Equipment Credit.--
Section 46 (relating to amount of credit), as amended by this Act, is
amended by striking ``and'' at the end of paragraph (4), by striking
the period at the end of paragraph (5) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(6) the qualifying pollution control equipment credit.''.
(b) Amount of Qualifying Pollution Control Equipment Credit.--
Subpart E of part IV of subchapter A of chapter 1 (relating to rules
for computing investment credit), as amended by this Act, is amended by
inserting after section 48C the following new section:
``SEC. 48D. QUALIFYING POLLUTION CONTROL EQUIPMENT CREDIT.
``(a) In General.--For purposes of section 46, the qualifying
pollution control equipment credit for any taxable year is an amount
equal to 15 percent of the basis of the qualifying pollution control
equipment placed in service at a qualifying facility during such
taxable year.
``(b) Qualifying Pollution Control Equipment.--For purposes of this
section, the term `qualifying pollution control equipment' means any
technology installed in or on a qualifying facility to reduce air
emissions of any pollutant regulated by the Environmental Protection
Agency under the Clean Air Act, including thermal oxidizers,
regenerative thermal oxidizers, scrubber systems, evaporative control
systems, vapor recovery systems, flair systems, bag houses, cyclones,
continuous emissions monitoring systems, and low nitric oxide burners.
``(c) Qualifying Facility.--For purposes of this section, the term
`qualifying facility' means any facility which produces not less than
1,000,000 gallons of ethanol during the taxable year.
``(d) Special Rule for Certain Subsidized Property.--Rules similar
to section 48(a)(4) shall apply for purposes of this section.
``(e) Certain Qualified Progress Expenditures Rules Made
Applicable.--Rules similar to the rules of subsections (c)(4) and (d)
of section 46 (as in effect on the day before the enactment of the
Revenue Reconciliation Act of 1990) shall apply for purposes of this
subsection.''.
(c) Recapture of Credit Where Emissions Reduction Offset is Sold.--
Paragraph (1) of section 50(a) is amended by redesignating subparagraph
(B) as subparagraph (C) and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Special rule for qualifying pollution control
equipment.--For purposes of subparagraph (A), any
investment property which is qualifying pollution
control equipment (as defined in section 48D(b)) shall
cease to be investment credit property with respect to
a taxpayer if such taxpayer receives a payment in
exchange for a credit for emission reductions
attributable to such qualifying pollution control
equipment for purposes of an offset requirement under
part D of title I of the Clean Air Act.''.
(d) Special Rule for Basis Reduction; Recapture of Credit.--
Paragraph (3) of section 50(c) (relating to basis adjustment to
investment credit property), as amended by this Act, is amended by
inserting ``or qualifying pollution control equipment credit'' after
``energy credit''.
(e) Conforming Amendments.--
(1) Section 49(a)(1)(C), as amended by this Act, is amended
by striking ``and'' at the end of clause (iv), by striking the
period at the end of clause (v) and inserting ``, and'', and by
adding at the end the following new clause:
``(vi) the basis of any qualifying
pollution control equipment.''
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 48C the
following new item:
``48D. Qualifying pollution control equipment.''.
(f) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, in
taxable years ending after such date, under rules similar to the rules
of section 48(m) of the Internal Revenue Code of 1986 (as in effect on
the day before the date of the enactment of the Revenue Reconciliation
Act of 1990).
SEC. 1548. CREDIT FOR PRODUCTION OF COAL OWNED BY INDIAN TRIBES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits), as amended by this Act, is
amended by adding at the end the following new section:
``SEC. 45N. CREDIT FOR PRODUCTION OF COAL OWNED BY INDIAN TRIBES.
``(a) Allowance of Credit.--For purposes of section 38, the Indian
coal production credit determined under this section for the taxable
year is an amount equal to the product of--
``(1) the applicable dollar amount for the calendar year in
which the taxable year begins, and
``(2) the number of tons of Indian coal--
``(A) the production of which is attributable to
the taxpayer (determined under rules similar to the
rules under section 29(d)(3)), and
``(B) which is sold by the taxpayer to an unrelated
person during the taxable year.
``(b) Indian Coal.--For purposes of this section--
``(1) In general.--The term `Indian coal' means coal which
is produced from coal reserves which, on June 14, 2005--
``(A) were owned by an Indian tribe, or
``(B) were held in trust by the United States for
the benefit of an Indian tribe or its members.
``(2) Indian tribe.--For purposes of this subsection, the
term `Indian tribe' has the meaning given such term by section
7871(c)(3)(E)(ii).
``(c) Other terms.--For purposes of this section--
``(1) Applicable dollar amount.--
``(A) In general.--The term `applicable dollar
amount' means--
``(i) $1.50 in the case of calendar years
2006 through 2009, and
``(ii) $2.00 in the case of calendar years
beginning after 2009.
``(B) Inflation adjustment.--In the case of any
calendar year after 2006, each of the dollar amounts
under subparagraph (A) shall be equal to the product of
such dollar amount and the inflation adjustment factor
determined under section 45(e)(2)(B) for the calendar
year, except that such section shall be applied by
substituting `2005' for `1992'.
``(2) Unrelated person.--The term `unrelated person' has
the same meaning as when such term is used in section 45.
``(d) Termination.--This section shall not apply to sales after
December 31, 2012.''
(b) Credit Made Part of General Business Credit.--Subsection (b) of
section 38, as amended by this Act, is amended by striking ``plus'' at
the end of paragraph (22), by striking the period at the end of
paragraph (23) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(24) the Indian coal production credit determined under
section 45N(a).''.
(c) Allowance Against Minimum Tax.--Section 38(c)(4) (relating to
specified credits) is amended by striking the period at the end of
clause (ii) and inserting ``, or'' and by adding at the end the
following:
``(iii) the credit determined under section
45N.''.
(d) Effective Date.--The amendments made by this section shall
apply to sales after December 31, 2005.
SEC. 1549. CREDIT FOR REPLACEMENT STOVES MEETING ENVIRONMENTAL
STANDARDS IN NON-ATTAINMENT AREAS.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
(relating to nonrefundable personal credits), as amended by this Act,
is amended by inserting after section 25D the following new section:
``SEC. 25E. REPLACEMENT STOVES IN AREAS WITH POOR AIR QUALITY.
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the lesser--
``(1) the qualified stove replacement expenditures of the
taxpayer for the taxable year, or
``(2) $500 multiplied by the number of noncompliant wood
stoves replaced by the taxpayer during the taxable year.
``(b) Qualified Stove Replacement Expenditures.--For purposes of
this section--
``(1) In general.--The term `qualified stove replacement
expenditures' means expenditures made by the taxpayer for the
installation of a compliant stove which--
``(A) is installed in a dwelling unit which--
``(i) is located in the United States in an
area which, at the time of the installation, is
designated by the Environmental Protection
Agency as a non-attainment area for particulate
matter less than 2.5 micrometers in diameter or
a non-attainment area for particulate matter
less than 10 micrometers in diameter, and
``(ii) is used as a residence, and
``(B) replaces a noncompliant wood stove used in
the dwelling unit.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the compliant stove.
``(2) Compliant stove.--The term `compliant stove' means a
solid fuel burning stove which meets the requirements set forth
in the `Standards of Performance for Residential Wood Heaters'
issued by the Environmental Protection Agency.
``(3) Noncompliant wood stove.--The term `noncompliant wood
stove' means any wood stove other than a compliant stove.
``(c) Other Rules.--Rules similar to the rules of paragraphs (3)
and (4) of section 25C(d) shall apply for purposes of this section.
``(d) Basis Adjustment.--If an expenditure to which this section
applies results in an increase in basis in any property, the increase
shall be reduced by the amount of the credit allowed under this section
with respect to the expenditure.
``(e) Termination.--This section shall not apply to expenditures
made after December 31, 2008.''
(b) Conforming Amendments.--
(1) Subsection (a) of section 1016, as amended by this Act,
is amended by striking ``and'' at the end of paragraph (38), by
striking the period at the end of paragraph (39) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(40) to the extent provided in section 25E(e), in the
case of amounts with respect to which a credit has been allowed
under section 25E.''.
(2) The table of sections for subpart A of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 25D the
following new item:
``Sec. 25E. Replacement stoves in areas
with poor air quality.''.
(c) Effective Dates.--The amendments made by this section shall
apply to expenditures for stoves purchased after the date of the
enactment of this Act.
SEC. 1550. EXEMPTION FOR EQUIPMENT FOR TRANSPORTING BULK BEDS OF FARM
CROPS FROM EXCISE TAX ON RETAIL SALE OF HEAVY TRUCKS AND
TRAILERS.
(a) In General.--Section 4053 of the Internal Revenue Code of 1986
(relating to exemptions) is amended by adding at the end the following
new paragraph:
``(9) Bulk beds for transporting farm crops.--Any box,
container, receptacle, bin, or other similar article the length
of which does not exceed 26 feet, which is mounted or placed on
an automobile truck, and which is sold to a person who
certifies to the seller that--
``(A) such person is actively engaged in the trade
or business of farming, and
``(B) the primary use of the article is to haul to
farms (and on farms) farm crops grown in connection
with such trade or business.''.
(b) Recapture of Tax Upon Resale or Nonexempt Use.--Section 4052
(relating to definitions and special rules) is amended by redesignating
subsection (g) as subsection (h) and by inserting after subsection (f)
the following new subsection:
``(g) Imposition of Tax on Sales, Etc., Within 2 Years of Bulk Beds
for Transporting Farm Crops Purchased Tax-free.--
``(1) In general.--If--
``(A) no tax was imposed under section 4051 on the
first retail sale of any article described in section
4053(9) by reason of its exempt use, and
``(B) within 2 years after the date of such first
retail sale, such article is resold by the purchaser or
such purchaser makes a substantial nonexempt use of
such article,
then such sale or use of such article by such purchaser shall
be treated as the first retail sale of such article for a price
equal to its fair market value at the time of such sale or use.
``(2) Exempt use.--For purposes of this subsection, the
term `exempt use' means any use of an article described in
section 4053(9) if the first retail sale of such article is not
taxable under section 4051 by reason of such use.''.
(c) Effective Date.--The amendments made by this section shall
apply to sales after September 30, 2005.
SEC. 1551. NATIONAL ACADEMY OF SCIENCES STUDY AND REPORT.
(a) Study.--Not later than 60 days after the date of the enactment
of this Act, the Secretary of the Treasury shall enter into an
agreement with the National Academy of Sciences under which the
National Academy of Sciences shall conduct a study to define and
evaluate the health, environmental, security, and infrastructure
external costs and benefits associated with the production and
consumption of energy that are not or may not be fully incorporated
into the market price of such energy, or into the Federal tax or fee or
other applicable revenue measure related to such production or
consumption.
(b) Report.--Not later than 2 years after the date on which the
agreement under subsection (a) is entered into, the National Academy of
Sciences shall submit to Congress a report on the study conducted under
subsection (a).
SEC. 1552. INCOME TAX EXCLUSION FOR CERTAIN FUEL COSTS OF RURAL
CARPOOLS.
(a) In General.--Section 132(f)(1) of the Internal Revenue Code of
1986 (defining qualified transportation fringe) is amended by adding at
the end the following new subparagraph:
``(D) Fuel expenses for a highway vehicle of any
employee who meets the rural carpool requirements of
paragraph (8).''.
(b) Limitation on Exclusion.--Section 132(f)(2) of such Code
(relating to limitation on exclusion) is amended by striking ``and'' at
the end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at the end the
following new subparagraph:
``(C) $50 per month in the case of the benefit
described in subparagraph (D).''.
(c) Rural Carpool Requirements.--Section 132(f) of such Code is
amended by adding at the end the following new paragraph:
``(8) Requirements for employees participating in rural
carpools.--
``(A) In general.--The requirements of this
paragraph are met if an employee--
``(i) is an employee of an employer
described in subparagraph (B),
``(ii) certifies to such employer that--
``(I) such employee resides in a
rural area (as defined by the Bureau of
the Census),
``(II) such employee is not
eligible to claim any qualified
transportation fringe described in
subparagraph (A) or (B) of paragraph
(1) if provided by such employer,
``(III) such employee uses the
employee's highway vehicle when
traveling between the employee's
residence and place of employment, and
``(IV) for at least 75 percent of
the total mileage of such travel, the
employee is accompanied by 1 or more
employees of such employer, and
``(iii) agrees to notify such employer when
any subclause of clause (ii) no longer applies.
``(B) Employer described.--An employer is described
in this subparagraph if the business premises of such
employer which serve as the place of employment of the
employee are located in an area which is not accessible
by a transit system designed primarily to provide daily
work trips within a local commuting area.''.
(d) No Exclusion for Employment Taxes.--Section 3121(a)(20) of such
Code (defining wages) is amended by inserting ``(except by reason of
subsection (f)(1)(D) thereof)'' after ``or 132''.
(e) Effective Date.--The amendments made by this section shall
apply to expenses incurred on and after the date of the enactment of
this Act and before January 1, 2007.
SEC. 1553. 3-YEAR APPLICABLE RECOVERY PERIOD FOR DEPRECIATION OF
QUALIFIED ENERGY MANAGEMENT DEVICES.
(a) In General.--Section 168(e)(3)(A) (defining 3-year property) is
amended by striking ``and'' at the end of clause (ii), by striking the
period at the end of clause (iii) and inserting ``, and'', and by
adding at the end the following new clause:
``(iv) any qualified energy management
device.''.
(b) Definition of Qualified Energy Management Device.--Section
168(i) (relating to definitions and special rules), as amended by this
Act, is amended by inserting at the end the following new paragraph:
``(18) Qualified energy management device.--
``(A) In general.--The term `qualified energy
management device' means any energy management device--
``(1) which is placed in service before January 1, 2008, by
a taxpayer who is a supplier of electric energy or a provider
of electric energy services,
``(2) the original use of which commences with the
taxpayer, and
``(3) the purchase of which is subject to a binding
contract entered into after June 23, 2005, but only if there
was no written binding contract entered into on or before such
date.
``(B) Energy management device.--For purposes of
subparagraph (A), the term `energy management device'
means any meter or metering device which is used by the
taxpayer--
``(i) to measure and record electricity
usage data on a time-differentiated basis in at
least 4 separate time segments per day, and
``(ii) to provide such data on at least a
monthly basis to both consumers and the
taxpayer.''.
(c) Alternative System.--The table contained in section
168(g)(3)(B) is amended by inserting after the item relating to
subparagraph (A)(iii) the following:
``(A)(iv)...................................................... 20''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2005, in taxable
years ending after such date.
SEC. 1554. EXCEPTION FROM VOLUME CAP FOR CERTAIN COOLING FACILITIES.
(a) In General.--Section 146 (relating to volume cap) is amended by
redesignating subsections (i) through (n) as subsections (j) through
(o), respectively, and by inserting after subsection (h) the following:
``(i) Exception for facilities used to cool structures with ocean
water, etc..--
``(1) In general.--Only for purposes of this section, the
term `private activity bond' shall not include any exempt
facility bond described in section 142(a)(9) which is issued as
part of an issue to finance any project which is designed to
access deep water renewable thermal energy for district cooling
to provide building air conditioning (including any
distribution piping, pumping, and chiller facilities).
``(2) Limitation.--Paragraph (1) shall apply only to bonds
issued as part of an issue the aggregate authorized face amount
of which is not more than $75,000,000 with respect to any
project described in such paragraph.''.
(b) Effective Date.--The amendments made by this section shall
apply to projects placed in service after the date of enactment of this
Act and before July 1, 2008.
Subtitle F--Revenue Raising Provisions
SEC. 1561. TREATMENT OF KEROSENE FOR USE IN AVIATION.
(a) All Kerosene Taxed at Highest Rate.--
(1) In general.--Section 4081(a)(2)(A) (relating to rates
of tax) is amended by adding ``and'' at the end of clause (ii),
by striking ``, and'' at the end of clause (iii) and inserting
a period, and by striking clause (iv).
(2) Exception for use in aviation.--Subparagraph (C) of
section 4081(a)(2) is amended to read as follows:
``(C) Taxes imposed on fuel used in aviation.--In
the case of kerosene which is removed from any refinery
or terminal directly into the fuel tank of an aircraft
for use in aviation, the rate of tax under subparagraph
(A)(iii) shall be--
``(i) in the case of use for commercial
aviation by a person registered for such use
under section 4101, 4.3 cents per gallon, and
``(ii) in the case of use for aviation not
described in clause (i), 21.8 cents per
gallon.''.
(3) Applicable rate in case of certain refueler trucks,
tankers, and tank wagons.--Section 4081(a)(3) (relating to
certain refueler trucks, tankers, and tank wagons treated as
terminals) is amended--
(A) by striking ``a secured area of'' in
subparagraph (A)(i), and
(B) by adding at the end the following new
subparagraph:
``(D) Applicable rate.--For purposes of paragraph
(2)(C), in the case of any kerosene treated as removed
from a terminal by reason of this paragraph--
``(i) the rate of tax specified in
paragraph (2)(C)(i) in the case of use
described in such paragraph shall apply if such
terminal is located within a secured area of an
airport, and
``(ii) the rate of tax specified in
paragraph (2)(C)(ii) shall apply in all other
cases.''.
(4) Conforming amendments.--
(A) Sections 4081(a)(3)(A) and 4082(b) are amended
by striking ``aviation-grade'' each place it appears.
(B) Section 4081(a)(4) is amended by striking
``paragraph (2)(C)'' and inserting ``paragraph
(2)(C)(i)''.
(C) The heading for paragraph (4) of section
4081(a) is amended by striking ``aviation-grade''.
(D) Section 4081(d)(2) is amended by striking so
much as precedes subparagraph (A) and inserting the
following:
``(2) Aviation fuels.--The rates of tax specified in
subsections (a)(2)(A)(ii) and (a)(2)(C)(ii) shall be 4.3 cents
per gallon--''.
(E) Subsection (e) of section 4082 is amended--
(i) by striking ``aviation-grade'',
(ii) by striking ``section
4081(a)(2)(A)(iv)'' and inserting ``section
4081(a)(2)(A)(iii)'',
(iii) by adding at the end the following
new sentence: ``For purposes of this
subsection, any removal described in section
4081(a)(3)(A) shall be treated as a removal
from a terminal but only if such terminal is
located within a secured area of an airport.'',
and
(iv) by striking ``Aviation-Grade
Kerosene'' in the heading thereof and inserting
``Kerosene Removed Into an Aircraft''.
(b) Reduced Rate for Use of Certain Liquids in Aviation.--
(1) In general.--Subsection (c) of section 4041 (relating
to imposition of tax) is amended--
(A) by striking ``aviation-grade kerosene'' in
paragraph (1) and inserting ``any liquid for use as a
fuel other than aviation gasoline'',
(B) by striking ``aviation-grade kerosene'' in
paragraph (2) and inserting ``liquid for use as a fuel
other than aviation gasoline'',
(C) by striking paragraph (3) and inserting the
following new paragraph:
``(3) Rate of tax.--The rate of tax imposed by this
subsection shall be 21.8 cents per gallon (4.3 cents per gallon
with respect to any sale or use for commercial aviation).'',
and
(D) by striking ``Aviation-Grade Kerosene'' in the
heading thereof and inserting ``Certain Liquids Used as
a Fuel in Aviation''.
(2) Partial refund of full rate.--
(A) In general.--Paragraph (2) of section 6427(l)
(relating to nontaxable uses of diesel fuel, kerosene
and aviation fuel) is amended to read as follows:
``(2) Nontaxable use.--For purposes of this subsection, the
term `nontaxable use' means any use which is exempt from the
tax imposed by section 4041(a)(1) other than by reason of a
prior imposition of tax.''.
(B) Refunds for noncommercial aviation.--Section
6427(l) (relating to nontaxable uses of diesel fuel,
kerosene and aviation fuel) is amended by redesignating
paragraph (5) as paragraph (6) and by inserting after
paragraph (4) the following new paragraph:
``(5) Refunds for kerosene used in noncommercial
aviation.--
``(A) In general.--In the case of kerosene used in
aviation not described in paragraph (4)(A) (other than
any use which is exempt from the tax imposed by section
4041(c) other than by reason of a prior imposition of
tax), paragraph (1) shall not apply to so much of the
tax imposed by section 4081 as is attributable to--
``(i) the Leaking Underground Storage Tank
Trust Fund financing rate imposed by such
section, and
``(ii) so much of the rate of tax specified
in section 4081(a)(2)(A)(iii) as does not
exceed the rate specified in section
4081(a)(2)(C)(ii).
``(B) Payment to ultimate, registered vendor.--The
amount which would be paid under paragraph (1) with
respect to any kerosene shall be paid only to the
ultimate vendor of such kerosene. A payment shall be
made to such vendor if such vendor--
``(i) is registered under section 4101, and
``(ii) meets the requirements of
subparagraph (A), (B), or (D) of section
6416(a)(1).''.
(3) Conforming amendments.--
(A) Section 4041(a)(1)(B) is amended by striking
the last sentence.
(B) The heading for subsection (l) of section 6427
is amended by striking ``, Kerosene and Aviation Fuel''
and inserting ``and Kerosene''.
(C) Section 4082(d)(2)(B) is amended by striking
``section 6427(l)(5)(B)'' and inserting ``section
6427(l)(6)(B)''.
(D) Section 6427(i)(4)(A) is amended--
(i) by striking ``paragraph (4)(B) or (5)''
both places it appears and inserting
``paragraph (4)(B), (5), or (6)'', and
(ii) by striking ``subsection (b)(4) and
subsection (l)(5)'' in the last sentence and
inserting ``subsections (b)(4), (l)(5), and
(l)(6)''.
(E) Paragraph (4) of section 6427(l) is amended--
(i) by striking ``aviation-grade'' in
subparagraph (A),
(ii) by striking ``section
4081(a)(2)(A)(iv)'' and inserting ``section
4081(a)(2)(iii)'',
(iii) by striking ``aviation-grade
kerosene'' in subparagraph (B) and inserting
``kerosene used in commercial aviation as
described in subparagraph (A)'', and
(iv) by striking ``aviation-grade
kerosene'' in the heading thereof and inserting
``kerosene used in commercial aviation''.
(F) Section 6427(l)(6)(B), as redesignated by
paragraph (2)(B), is amended by striking ``aviation-
grade kerosene'' and inserting ``kerosene used in
aviation''.
(c) Transfers From Highway Trust Fund of Taxes on Fuels Used in
Aviation to Airport and Airway Trust Fund.--
(1) In general.--Section 9503(c) (relating to expenditures
from Highway Trust Fund) is amended by adding at the end the
following new paragraph:
``(7) Transfers from the trust fund for certain aviation
fuel taxes.--The Secretary shall pay at least monthly from the
Highway Trust Fund into the Airport and Airway Trust Fund
amounts (as determined by the Secretary) equivalent to the
taxes received on or after October 1, 2005, and before October
1, 2011, under section 4081 with respect to so much of the rate
of tax as does not exceed--
``(A) 4.3 cents per gallon of kerosene with respect
to which a payment has been made by the Secretary under
section 6427(l)(4), and
``(B) 21.8 cents per gallon of kerosene with
respect to which a payment has been made by the
Secretary under section 6427(l)(5).
Transfers under the preceding sentence shall be made on the
basis of estimates by the Secretary, and proper adjustments
shall be made in the amounts subsequently transferred to the
extent prior estimates were in excess of or less than the
amounts required to be transferred.''.
(2) Conforming amendments.--
(A) Section 9502(a) is amended by striking
``appropriated or credited to the Airport and Airway
Trust Fund as provided in this section or section
9602(b)'' and inserting ``appropriated, credited, or
paid into the Airport and Airway Trust Fund as provided
in this section, section 9503(c)(7), or section
9602(b)''.
(B) Section 9502(b)(1) is amended--
(i) by striking ``subsections (c) and (e)
of section 4041'' in subparagraph (A) and
inserting ``section 4041(c)'', and
(ii) by striking ``and aviation-grade
kerosene'' in subparagraph (C) and inserting
``and kerosene to the extent attributable to
the rate specified in section 4081(a)(2)(C)''.
(C) Section 9503(b) is amended by striking
paragraph (3).
(d) Certain Refunds Not Transferred From Airport and Airway Trust
Fund.--Section 9502(d)(2) (relating to transfers from Airport and
Airway Trust Fund on account of certain refunds) is amended by
inserting ``(other than subsections (l)(4) and (l)(5) thereof)'' after
``or 6427 (relating to fuels not used for taxable purposes)''.
(e) Effective Date.--The amendments made by this section shall
apply to fuels or liquids removed, entered, or sold after September 30,
2005.
SEC. 1562. REPEAL OF ULTIMATE VENDOR REFUND CLAIMS WITH RESPECT TO
FARMING.
(a) In General.--Subparagraph (A) of section 6427(l)(6) (relating
to registered vendors to administer claims for refund of diesel fuel or
kerosene sold to farmers and State and local governments), as
redesignated by section 1561, is amended to read as follows:
``(A) In general.--Paragraph (1) shall not apply to
diesel fuel or kerosene used by a State or local
government.''.
(b) Conforming Amendment.--The heading of paragraph (6) of section
6427(l), as so redesignated, is amended by striking ``farmers and''.
(c) Effective Date.--The amendments made by this section shall
apply to sales after September 30, 2005.
SEC. 1563. REFUNDS OF EXCISE TAXES ON EXEMPT SALES OF FUEL BY CREDIT
CARD.
(a) Registration of Person Extending Credit on Certain Exempt Sales
of Fuel.--Section 4101(a) (relating to registration) is amended by
adding at the end the following new paragraph:
``(4) Registration of persons extending credit on certain
exempt sales of fuel.--The Secretary shall require registration
by any person which--
``(A) extends credit by credit card to any ultimate
purchaser described in subparagraph (C) or (D) of
section 6416(b)(2) for the purchase of taxable fuel
upon which tax has been imposed under section 4041 or
4081, and
``(B) does not collect the amount of such tax from
such ultimate purchaser.''.
(b) Refunds of Tax on Gasoline.--
(1) In general.--Paragraph (4) of section 6416(a) (relating
to condition to allowance) is amended--
(A) by inserting ``except as provided in
subparagraph (B),'' after ``For purposes of this
subsection,'' in subparagraph (A),
(B) by redesignating subparagraph (B) as
subparagraph (C) and by inserting after subparagraph
(A) the following new subparagraph:
``(B) Credit card issuer.--For purposes of this
subsection, if the purchase of gasoline described in
subparagraph (A) (determined without regard to the
registration status of the ultimate vendor) is made by
means of a credit card issued to the ultimate
purchaser, paragraph (1) shall not apply and the person
extending the credit to the ultimate purchaser shall be
treated as the person (and the only person) who paid
the tax, but only if such person--
``(i) is registered under section
4101(a)(4), and
``(ii) has established, under regulations
prescribed by the Secretary, that such person--
``(I) has not collected the amount
of the tax from the person who
purchased such article, or
``(II) has obtained the written
consent from the ultimate purchaser to
the allowance of the credit or refund,
and
``(iii) has so established that such
person--
``(I) has repaid or agreed to repay
the amount of the tax to the ultimate
vendor,
``(II) has obtained the written
consent of the ultimate vendor to the
allowance of the credit or refund, or
``(III) has otherwise made
arrangements which directly or
indirectly assure the ultimate vendor
of reimbursement of such tax.
If clause (i), (ii), or (iii) is not met by such person
extending the credit to the ultimate purchaser, then
such person shall collect an amount equal to the tax
from the ultimate purchaser and only such ultimate
purchaser may claim such credit or refund.'',
(C) by striking ``subparagraph (A)'' in
subparagraph (C), as redesignated by paragraph (2), and
inserting ``subparagraph (A) or (B)'',
(D) by inserting ``or credit card issuer'' after
``vendor'' in subparagraph (C), as so redesignated, and
(E) by inserting ``or credit card issuer'' after
``vendor'' in the heading thereof.
(2) Conforming amendment.--Section 6416(b)(2) is amended by
adding at the end the following new sentence: ``Subparagraphs
(C) and (D) shall not apply in the case of any tax imposed on
gasoline under section 4081 if the requirements of subsection
(a)(4) are not met.''
(c) Diesel Fuel or Kerosene.--Paragraph (6) of section 6427(l)
(relating to nontaxable uses of diesel fuel and kerosene), as
redesignated by section 1561, is amended--
(1) by striking ``The amount'' in subparagraph (C) and
inserting ``Except as provided in subparagraph (D), the
amount'', and
(2) by adding at the end the following new subparagraph:
``(D) Credit card issuer.--For purposes of this
paragraph, if the purchase of any fuel described in
subparagraph (A) (determined without regard to the
registration status of the ultimate vendor) is made by
means of a credit card issued to the ultimate
purchaser, the Secretary shall pay to the person
extending the credit to the ultimate purchaser the
amount which would have been paid under paragraph (1)
(but for subparagraph (A)), but only if such person
meets the requirements of clauses (i), (ii), and (iii)
of section 6416(a)(4)(B). If such clause (i), (ii), or
(iii) is not met by such person extending the credit to
the ultimate purchaser, then such person shall collect
an amount equal to the tax from the ultimate purchaser
and only such ultimate purchaser may claim such
amount.''.
(d) Conforming Penalty Amendments.--
(1) Section 6206 (relating to special rules applicable to
excessive claims under sections 6420, 6421, and 6427) is
amended--
(A) by striking ``Any portion'' in the first
sentence and inserting ``Any portion of a refund made
under section 6416(a)(4) and any portion'',
(B) by striking ``payments under sections 6420'' in
the first sentence and inserting ``refunds under
section 6416(a)(4) and payments under sections 6420'',
(C) by striking ``section 6420'' in the second
sentence and inserting ``section 6416(a)(4), 6420'',
and
(D) by striking ``sections 6420, 6421, and 6427''
in the heading thereof and inserting ``certain
sections''.
(2) Section 6675(a) is amended by inserting ``section
6416(a)(4) (relating to certain sales of gasoline),'' after
``made under''.
(3) Section 6675(b)(1) is amended by inserting
``6416(a)(4),'' after ``under section''.
(4) The item relating to section 6206 in the table of
sections for subchapter A of chapter 63 is amended by striking
``sections 6420, 6421, and 6427'' and inserting ``certain
sections''.
(e) Effective Date.--The amendments made by this section shall
apply to sales after December 31, 2005.
SEC. 1564. ADDITIONAL REQUIREMENT FOR EXEMPT PURCHASES.
(a) State and Local Governments.--
(1) Subparagraph (C) of section 6416(b)(2) (relating to
specified uses and resales) is amended to read as follows:
``(C) sold to a State or local government for the
exclusive use of a State or local government (as
defined in section 4221(d)(4) and certified as such by
the State) or sold to a qualified volunteer fire
department (as defined in section 150(e)(2) and
certified as such by the State) for its exclusive
use;''.
(2) Section 4041(g)(2) (relating to other exemptions) is
amended by striking ``or the District of Columbia'' and
inserting ``the District of Columbia, or a qualified volunteer
fire department (as defined in section 150(e)(2)) (and
certified as such by the State or the District of Columbia)''.
(b) Nonprofit Educational Organizations.--
(1) Section 6416(b)(2)(D) is amended by inserting ``(as
defined in section 4221(d)(5) and certified to be in good
standing by the State in which such organization is providing
educational services)'' after ``organization''.
(2) Section 4041(g)(4) is amended--
(A) by inserting ``(certified to be in good
standing by the State in which such organization is
providing educational services)'' after
``organization'' the first place it appears, and
(B) by striking ``use by a'' and inserting ``use by
such a''.
(c) Nonapplication of certification requirements for the refund of
certain taxes.--Section 6416(b)(2) is amended by adding at the end the
following new sentence: ``With respect to any tax paid under subchapter
D of chapter 32, the certification requirements under subparagraphs (C)
and (D) shall not apply.''.
(d) Effective Date.--The amendments made by this section shall
apply to sales after December 31, 2005.
SEC. 1565. REREGISTRATION IN EVENT OF CHANGE IN OWNERSHIP.
(a) In General.--Section 4101(a) (relating to registration) is
amended by adding at the end the following new paragraph:
``(4) Reregistration in event of change in ownership.--
Under regulations prescribed by the Secretary, a person (other
than a corporation the stock of which is regularly traded on an
established securities market) shall be required to reregister
under this section if after a transaction (or series of related
transactions) more than 50 percent of ownership interests in,
or assets of, such person are held by persons other than
persons (or persons related thereto) who held more than 50
percent of such interests or assets before the transaction (or
series of related transactions).''.
(b) Conforming Amendments.--
(1) Civil penalty.--Section 6719 (relating to failure to
register) is amended--
(A) by inserting ``or reregister'' after
``register'' each place it appears,
(B) by inserting ``or Reregister'' after
``Register'' in the heading for subsection (a), and
(C) by inserting ``or reregister'' after
``register'' in the heading thereof.
(2) Criminal penalty.--Section 7232 (relating to failure to
register under section 4101, false representations of
registration status, etc.) is amended--
(A) by inserting ``or reregister'' after
``register'',
(B) by inserting ``or reregistration'' after
``registration'', and
(C) by inserting ``or reregister'' after
``register'' in the heading thereof.
(3) Additional civil penalty.--Section 7272 (relating to
penalty for failure to register) is amended--
(A) by inserting ``or reregister'' after ``failure
to register'' in subsection (a),
(B) by inserting ``or reregister'' after
``register'' in the heading thereof.
(3) Clerical amendments.--The item relating to section 6719
in the table of sections for part I of subchapter B of chapter
68, the item relating to section 7232 in the table of sections
for part II of subchapter A of chapter 75, and the item
relating to section 7272 in the table of sections for
subchapter B of chapter 75 are each amended by inserting ``or
reregister'' after ``register''.
(c) Effective Date.--The amendments made by this section shall
apply to actions, or failures to act, after the date of the enactment
of this Act.
SEC. 1566. TREATMENT OF DEEP-DRAFT VESSELS.
(a) In General.--On and after the date of the enactment of this
Act, the Secretary of the Treasury shall require that a vessel
described in section 4042(c)(1) of the Internal Revenue Code of 1986 be
considered a vessel for purposes of the registration of the operator of
such vessel under section 4101 of such Code, unless such operator uses
such vessel exclusively for purposes of the entry of taxable fuel.
(b) Exemption for Domestic Bulk Transfers by Deep-Draft Vessels.--
(1) In general.--Subparagraph (B) of section 4081(a)(1)
(relating to tax on removal, entry, or sale) is amended to read
as follows:
``(B) Exemption for bulk transfers to registered
terminals or refineries.--
``(i) In general.--The tax imposed by this
paragraph shall not apply to any removal or
entry of a taxable fuel transferred in bulk by
pipeline or vessel to a terminal or refinery if
the person removing or entering the taxable
fuel, the operator of such pipeline or vessel
(except as provided in clause (ii)), and the
operator of such terminal or refinery are
registered under section 4101.
``(ii) Nonapplication of registration to
vessel operators entering by deep-draft
vessel.--For purposes of clause (i), a vessel
operator is not required to be registered with
respect to the entry of a taxable fuel
transferred in bulk by a vessel described in
section 4042(c)(1).''.
(2) Effective date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.
SEC. 1567. RECONCILIATION OF ON-LOADED CARGO TO ENTERED CARGO.
(a) In General.--Subsection (a) of section 343 of the Trade Act of
2002 is amended by inserting at the end the following new paragraph:
``(4) Transmission of data.--Pursuant to paragraph (2), not
later than 1 year after the date of enactment of this
paragraph, the Secretary of Homeland Security, after
consultation with the Secretary of the Treasury, shall
establish an electronic data interchange system through which
the United States Customs and Border Protection shall transmit
to the Internal Revenue Service information pertaining to
cargoes of any taxable fuel (as defined in section 4083 of the
Internal Revenue Code of 1986) that the United States Customs
and Border Protection has obtained electronically under its
regulations adopted in accordance with paragraph (1). For this
purpose, not later than 1 year after the date of enactment of
this paragraph, all filers of required cargo information for
such taxable fuels (as so defined) must provide such
information to the United States Customs and Border Protection
through such electronic data interchange system.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
SEC. 1568. TAXATION OF GASOLINE BLENDSTOCKS AND KEROSENE.
With respect to fuel entered or removed after September 30, 2005,
the Secretary of the Treasury shall, in applying section 4083 of the
Internal Revenue Code of 1986--
(1) prohibit the nonbulk entry or removal of any gasoline
blend stock without the imposition of tax under section 4081 of
such Code, and
(2) shall not exclude mineral spirits from the definition
of kerosene.
SEC. 1569. NONAPPLICATION OF EXPORT EXEMPTION TO DELIVERY OF FUEL TO
MOTOR VEHICLES REMOVED FROM UNITED STATES.
(a) In General.--Section 4221(d)(2) (defining export) is amended by
adding at the end the following new sentence: ``Such term does not
include the delivery of a taxable fuel (as defined in section
4083(a)(1)) into a fuel tank of a motor vehicle which is shipped or
driven out of the United States.''.
(b) Conforming Amendments.--
(1) Section 4041(g) (relating to other exemptions) is
amended by adding at the end the following new sentence:
``Paragraph (3) shall not apply to the sale of a liquid for
delivery into a fuel tank of a motor vehicle which is shipped
or driven out of the United States.''.
(2) Clause (iv) of section 4081(a)(1)(A) (relating to tax
on removal, entry, or sale) is amended by inserting ``or at a
duty-free sales enterprise (as defined in section 555(b)(8) of
the Tariff Act of 1930)'' after ``section 4101''.
(c) Effective Date.--The amendments made by this section shall
apply to sales or deliveries made after the date of the enactment of
this Act.
SEC. 1570. PENALTY WITH RESPECT TO CERTAIN ADULTERATED FUELS.
(a) In General.--Part I of subchapter B of chapter 68 (relating to
assessable penalties) is amended by adding at the end the following new
section:
``SEC. 6720A. PENALTY WITH RESPECT TO CERTAIN ADULTERATED FUELS.
``(a) In General.--Any person who knowingly transfers for resale,
sells for resale, or holds out for resale any liquid for use in a
diesel-powered highway vehicle or a diesel-powered train which does not
meet applicable EPA regulations (as defined in section 45H(c)(3)),
shall pay a penalty of $10,000 for each such transfer, sale, or holding
out for resale, in addition to the tax on such liquid (if any).
``(b) Penalty in the Case of Retailers.--Any person who knowingly
holds out for sale (other than for resale) any liquid described in
subsection (a), shall pay a penalty of $10,000 for each such holding
out for sale, in addition to the tax on such liquid (if any).''.
(b) Dedication of Revenue.--Paragraph (5) of section 9503(b)
(relating to certain penalties) is amended by inserting ``6720A,''
after ``6719,''.
(c) Clerical Amendment.--The table of sections for part I of
subchapter B of chapter 68 is amended by adding at the end the
following new item:
``Sec. 6720A. Penalty with respect to
certain adulterated fuels.''.
(d) Effective Date.--The amendments made by this section shall
apply to any transfer, sale, or holding out for sale or resale
occurring after the date of the enactment of this Act.
SEC. 1571. OIL SPILL LIABILITY TRUST FUND FINANCING RATE.
Section 4611(f) (relating to application of oil spill liability
trust fund financing rate) is amended to read as follows:
``(f) Application of Oil Spill Liability Trust Fund Financing
Rate.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), the Oil Spill Liability Trust Fund financing rate under
subsection (c) shall apply on and after April 1, 2006, or if
later, the date which is 30 days after the last day of any
calendar quarter for which the Secretary estimates that, as of
the close of that quarter, the unobligated balance in the Oil
Spill Liability Trust Fund is less than $2,000,000,000.
``(2) Fund balance.--The Oil Spill Liability Trust Fund
financing rate shall not apply during a calendar quarter if the
Secretary estimates that, as of the close of the preceding
calendar quarter, the unobligated balance in the Oil Spill
Liability Trust Fund exceeds $3,000,000,000.
``(3) Termination.--The Oil Spill Liability Trust Fund
financing rate shall not apply after December 31, 2014.''.
SEC. 1572. EXTENSION OF LEAKING UNDERGROUND STORAGE TANK TRUST FUND
FINANCING RATE.
(a) In General.--Paragraph (3) of section 4081(d) (relating to
Leaking Underground Storage Tank Trust Fund financing rate) is amended
by striking ``2005'' and inserting ``2011''.
(b) No Exemptions From Tax Except for Exports.--
(1) In general.--Section 4082(a) (relating to exemptions
for diesel fuel and kerosene) is amended by inserting ``(other
than such tax at the Leaking Underground Storage Tank Trust
Fund financing rate imposed in all cases other than for
export)'' after ``section 4081''.
(2) Amendments relating to section 4041.--
(A) Subsections (a)(1)(B), (a)(2)(A), and (c)(2) of
section 4041 are each amended by inserting ``(other
than such tax at the Leaking Underground Storage Tank
Trust Fund financing rate)'' after ``section 4081''.
(B) Section 4041(b)(1)(A) is amended by striking
``or (d)(1))''.
(C) Section 4041(d) is amended by adding at the end
the following new paragraph:
``(5) Nonapplication of exemptions other than for
exports.--For purposes of this section, the tax imposed under
this subsection shall be determined without regard to
subsections (f), (g) (other than with respect to any sale for
export under paragraph (3) thereof), (h), and (l).''.
(3) No refund.--
(A) In general.--Subchapter B of chapter 65 is
amended by adding at the end the following new section:
``SEC. 6430. TREATMENT OF TAX IMPOSED AT LEAKING UNDERGROUND STORAGE
TANK TRUST FUND FINANCING RATE.
``No refunds, credits, or payments shall be made under this
subchapter for any tax imposed at the Leaking Underground Storage Tank
Trust Fund financing rate, except in the case of fuels destined for
export.''.
(B) Clerical amendment.--The table of sections for
subchapter B of chapter 65 is amended by adding at the
end the following new item:
``Sec. 6430. Treatment of tax imposed at Leaking Underground Storage
Tank Trust Fund financing rate.
(c) Certain Refunds and Credits Not Charged to LUST Trust Fund.--
Subsection (c) of section 9508 (relating to Leaking Underground Storage
Tank Trust Fund) is amended to read as follows:
``(c) Expenditures.--Amounts in the Leaking Underground Storage
Tank Trust Fund shall be available, as provided in appropriation Acts,
only for purposes of making expenditures to carry out section 9003(h)
of the Solid Waste Disposal Act as in effect on the date of the
enactment of the Superfund Amendments and Reauthorization Act of
1986.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on October 1,
2005.
(2) No exemption.--The amendments made by subsection (b)
shall apply to fuel entered, removed, or sold after September
30, 2005.
SEC. 1573. TIRE EXCISE TAX MODIFICATION.
(a) In General.--Section 4071(a) (relating to imposition and rate
of tax) is amended by inserting ``8.0 cents in the case of a'' before
``super single tire''.
(b) Definition of Super Single Tire.--Section 4072(e) (defining
super single tire) is amended by striking ``13 inches'' and inserting
``17.5 inches''.
(c) Effective Date.--The amendments made by this section shall
apply to sales after September 30, 2005.
TITLE XVI--CLIMATE CHANGE
Subtitle A--National Climate Change Technology Deployment
SEC. 1601. GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGY STRATEGIES.
Title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 et
seq.) is amended by adding at the end the following:
``SEC. 1610. GREENHOUSE GAS INTENSITY REDUCING STRATEGIES.
``(a) Definitions.--In this section:
``(1) Carbon sequestration.--The term `carbon
sequestration' means the capture of carbon dioxide through
terrestrial, geological, biological, or other means, which
prevents the release of carbon dioxide into the atmosphere.
``(2) Committee.--The term `Committee' means the
Interagency Coordinating Committee on Climate Change Technology
established under subsection (c)(1).
``(3) Developing country.--The term `developing country'
has the meaning given the term in section 1608(m).
``(4) Greenhouse gas.--The term `greenhouse gas' means--
``(A) carbon dioxide;
``(B) methane;
``(C) nitrous oxide;
``(D) hydrofluorocarbons;
``(E) perfluorocarbons; and
``(F) sulfur hexafluoride.
``(5) Greenhouse gas intensity.--The term `greenhouse gas
intensity' means the ratio of greenhouse gas emissions to
economic output.
``(6) National laboratory.--The term `National Laboratory'
means a laboratory owned by the Department of Energy.
``(7) Working group.--The term `Working Group' means the
Climate Change Technology Working Group established under
subsection (f)(1).
``(b) Office of Science and Technology Policy Strategy.--
``(1) In general.--Not later than 18 months after the date
of enactment of this section, the Director of the Office of
Science and Technology Policy shall, based on applicable
Federal climate reports, submit to the Secretary and the
President a national strategy to promote the deployment and
commercialization of greenhouse gas intensity reducing
technologies and practices developed through research and
development programs conducted by the National Laboratories,
other Federal research facilities, universities, and the
private sector.
``(2) Availability of strategy; updates.--The President
shall--
``(A) on submission of the strategy to the
President under paragraph (1), make the strategy
available to the public; and
``(B) update the strategy as the President
determines to be necessary.
``(c) Interagency Coordinating Committee on Climate Change
Technology.--
``(1) In general.--Not later than 180 days after the date
of enactment of this section, the Secretary shall establish an
Interagency Coordinating Committee on Climate Change Technology
to--
``(A) integrate current Federal climate reports;
and
``(B) coordinate Federal climate change activities
and programs carried out in furtherance of the strategy
developed under subsection (b)(1).
``(2) Membership.--The Committee shall be composed of at
least 6 members, including--
``(A) the Secretary;
``(B) the Secretary of Commerce;
``(C) the Chairman of the Council on Environmental
Quality;
``(D) the Secretary of Agriculture;
``(E) the Administrator of the Environmental
Protection Agency; and
``(F) the Secretary of Transportation.
``(3) Staff.--The Secretary shall provide such personnel as
are necessary to enable the Committee to perform the duties of
the Committee.
``(d) Climate Change Science Program and Climate Change Technology
Program.--
``(1) Climate change science program.--Not later than 180
days after the date on which the strategy is submitted under
subsection (b)(1), the Secretary of Commerce, in cooperation
with the Committee, shall permanently establish within the
Department of Commerce the Climate Change Science Program to
assist the Committee in the interagency coordination of climate
change science research and related activities, including--
``(A) assessments of the state of knowledge on
climate change; and
``(B) carrying out supporting studies, planning,
and analyses of the science of climate change.
``(2) Climate change technology program.--Not later than
180 days after the date on which the strategy is submitted
under subsection (b)(1), the Secretary, in cooperation with the
Committee, shall permanently establish within the Department of
Energy, the Climate Change Technology Program to assist the
Committee in the interagency coordination of climate change
technology research, development, demonstration, and deployment
to reduce greenhouse gas intensity.
``(e) Technology Inventory.--
``(1) In general.--The Secretary shall conduct an inventory
and evaluation of greenhouse gas intensity reducing
technologies that have been developed, or are under
development, by the National Laboratories, other Federal
research facilities, universities, and the private sector to
determine which technologies are suitable for commercialization
and deployment.
``(2) Report.--Not later than 180 days after the completion
of the inventory under paragraph (1), the Secretary shall
submit to the Secretary of Commerce and Congress a report that
includes the results of the completed inventory and any
recommendations of the Secretary.
``(3) Use.--The Secretary, in consultation with the
Secretary of Commerce, shall use the results of the inventory
as guidance in the commercialization and deployment of
greenhouse gas intensity reducing technologies.
``(4) Updated inventory.--The Secretary shall--
``(A) periodically update the inventory under
paragraph (1); and
``(B) make the updated inventory available to the
public.
``(f) Climate Change Technology Working Group.--
``(1) In general.--The Secretary, in consultation with the
Committee, shall establish within the Department of Energy a
Climate Change Technology Working Group to identify statutory,
regulatory, economic, and other barriers to the
commercialization and deployment of greenhouse gas intensity
reducing technologies and practices in the United States.
``(2) Composition.--The Working Group shall be composed of
the following members, to be appointed by the Secretary, in
consultation with the Committee:
``(A) 1 representative shall be appointed from each
National Laboratory.
``(B) 3 members shall be representatives of energy-
producing trade organizations.
``(C) 3 members shall represent energy-intensive
trade organizations.
``(D) 3 members shall represent groups that
represent end-use energy and other consumers.
``(E) 3 members shall be employees of the Federal
Government who are experts in energy technology,
intellectual property, and tax.
``(F) 3 members shall be representatives of
universities with expertise in energy technology
development that are recommended by the National
Academy of Engineering.
``(3) Report.--Not later than 1 year after the date of
enactment of this section and annually thereafter, the Working
Group shall submit to the Committee a report that describes--
``(A) the findings of the Working Group; and
``(B) any recommendations of the Working Group for
the removal or reduction of barriers to
commercialization, deployment, and increasing the use
of greenhouse gas intensity reducing technologies and
practices.
``(4) Compensation of members.--
``(A) Non-federal employees.--A member of the
Working Group who is not an officer or employee of the
Federal Government shall be compensated at a rate equal
to the daily equivalent of the annual rate of basic pay
prescribed for level IV of the Executive Schedule under
section 5315 of title 5, United States Code, for each
day (including travel time) during which the member is
engaged in the performance of the duties of the Working
Group.
``(B) Federal employees.--A member of the Working
Group who is an officer or employee of the Federal
Government shall serve without compensation in addition
to the compensation received for the services of the
member as an officer or employee of the Federal
Government.
``(C) Travel expenses.--A member of the Working
Group shall be allowed travel expenses, including per
diem in lieu of subsistence, at rates authorized for an
employee of an agency under subchapter I of chapter 57
of title 5, United States Code, while away from the
home or regular place of business of the member in the
performance of the duties of the Commission.
``(g) Greenhouse Gas Intensity Reducing Technology Deployment.--
``(1) In general.--Based on the strategy developed under
subsection (b)(1), the technology inventory conducted under
subsection (e)(1), and the greenhouse gas intensity reducing
technology study report submitted under subsection (e)(2), the
Committee shall develop a program for implementation by the
Climate Credit Board established under section 1611(b)(2)(A)
that would provide for the removal of domestic barriers to the
commercialization and deployment of greenhouse gas intensity
reducing technologies and practices.
``(2) Requirements.--In developing the program under
paragraph (1), the Committee shall consider in the aggregate--
``(A) the cost-effectiveness of the technology;
``(B) fiscal and regulatory barriers;
``(C) statutory and other barriers; and
``(D) intellectual property issues.
``(3) Report.--Not later than 18 months after the date of
enactment of this section, the Committee shall submit to the
President and Congress a report that--
``(A) identifies, based on the report submitted
under subsection (f)(3), any barriers to, and
commercial risks associated with, the deployment of
greenhouse gas intensity reducing technologies; and
``(B) includes a plan for carrying out eligible
projects with Federal financial assistance under
section 1611.
``(h) Procedures for Calculating, Monitoring, and Analyzing
Greenhouse Gas Intensity.--
``(1) In general.--The Committee, in collaboration with the
Administrator of the Energy Information Administration and the
National Institute of Standards and Technology, shall develop
and propose standards and best practices for calculating,
monitoring, and analyzing greenhouse gas intensity.
``(2) Content.--The standards and best practices shall
address measurement of greenhouse gas intensity by industry
sector.
``(3) Publication.--To provide the public with an
opportunity to comment on the standards and best practices
proposed under paragraph (1), the standards and best practices
shall be published in the Federal Register.
``(4) Applicable law.--To ensure that high quality
information is produced, the standards and best practices
developed under paragraph (1) shall conform to the guidelines
established under section 515 of the Treasury and General
Government Appropriations Act, 2001 (commonly known as the
`Data Quality Act') (44 U.S.C. 3516 note; 114 Stat. 2763A-
1543), as enacted into law by section 1(a)(3) of Public Law
106-554.
``(i) Demonstration Projects.--
``(1) In general.--The Secretary shall, subject to
availability of appropriations, conduct and participate in
demonstration projects recommended for approval by the
Committee, including demonstration projects relating to--
``(A) coal gasification and coal liquefaction;
``(B) carbon sequestration;
``(C) cogeneration technology initiatives;
``(D) advanced nuclear power projects;
``(E) lower emission transportation;
``(F) renewable energy; and
``(G) transmission upgrades.
``(2) Criteria.--The Committee shall recommend a
demonstration project under paragraph (1) if the proposed
demonstration project would--
``(A) increase the reduction of the greenhouse gas
intensity to levels below that which would be achieved
by technologies being used in the United States as of
the date of enactment of this section;
``(B) maximize the potential return on Federal
investment;
``(C) demonstrate distinct roles in public-private
partnerships;
``(D) produce a large-scale reduction of greenhouse
gas intensity if commercialization occurred; and
``(E) support a diversified portfolio to mitigate
the uncertainty associated with a single technology.
``(j) Cooperative Research and Development Agreements.--In carrying
out greenhouse gas intensity reduction research and technology
deployment, the Secretary may enter into cooperative research and
development agreements under section 12 of the Stevenson-Wydler
Technology Innovation Act of 1980 (15 U.S.C. 3710a).
``(k) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.''.
SEC. 1602. CLIMATE INFRASTRUCTURE CREDIT.
Title XVI of the Energy Policy Act of 1992 (42 (U.S.C. 13381 et
seq.) (as amended by section 1601) is amended by adding at the end the
following:
``SEC. 1611. CLIMATE INFRASTRUCTURE CREDIT.
``(a) Definitions.--In this section:
``(1) Advanced climate technology or system.--The term
`advanced climate technology or system' means a climate
technology or system that is not in general usage as of the
date of enactment of this section.
``(2) Board.--The term `Board' means the Climate Credit
Board established under subsection (b)(2)(A).
``(3) Direct loan.--The term `direct loan' has the meaning
given the term in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a).
``(4) Eligible project.--The term `eligible project' means
a demonstration project that is recommended for approval under
section 1610(i)(1).
``(5) Eligible project cost.--The term `eligible project
cost' means any amount incurred for an eligible project that is
paid by, or on behalf of, an obligor, including the costs of--
``(A) construction activities, including--
``(i) the acquisition of capital equipment;
and
``(ii) construction management;
``(B) acquiring land (including any improvements to
the land) relating to the eligible project; and
``(C) financing the eligible project, including--
``(i) providing capitalized interest
necessary to meet market requirements;
``(ii) capital issuance expenses; and
``(iii) other carrying costs during
construction.
``(6) Federal financial assistance.--The term `Federal
financial assistance' means any credit-based financial
assistance, including a direct loan, loan guarantee, a line of
credit (which serves as standby default coverage or standby
interest coverage), production incentive payment under
subsection (g)(1)(B), or other credit-based financial
assistance mechanism for an eligible project that is--
``(A) authorized to be made available by the
Secretary for an eligible project under this section;
and
``(B) provided in accordance with the Federal
Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
``(7) Investment-grade rating.--The term `investment-grade
rating' means a rating category of BBB minus, Baa3, or higher
assigned by a rating agency for eligible project obligations
offered into the capital markets.
``(8) Lender.--The term `lender' means any non-Federal
qualified institutional buyer (as defined in section
230.144A(a) of title 17, Code of Federal Regulations (or any
successor regulation), known as Rule 144A(a) of the Securities
and Exchange Commission and issued under the Securities Act of
1933 (15 U.S.C. 77a et seq.)), including--
``(A) a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986)
that is a qualified institutional buyer; and
``(B) a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986) that is a
qualified institutional buyer.
``(9) Loan guarantee.--The term `loan guarantee' means any
guarantee or other pledge by the Secretary to pay all or part
of the principal of and interest on a loan or other debt
obligation that is issued by an obligor and funded by a lender.
``(10) Obligor.--The term `obligor' means a person or
entity (including a corporation, partnership, joint venture,
trust, or governmental entity, agency, or instrumentality) that
is primarily liable for payment of the principal of, or
interest on, a Federal credit instrument.
``(11) Project obligation.--The term `project obligation'
means any note, bond, debenture, or other debt obligation
issued by an obligor in connection with the financing of an
eligible project, other than a Federal credit instrument.
``(12) Rating agency.--The term `rating agency' means a
bond rating agency identified by the Securities and Exchange
Commission as a Nationally Recognized Statistical Rating
Organization.
``(13) Regulatory failure.--The term `regulatory failure'
means a situation in which the Secretary determines that,
because of a breakdown in a regulatory process or an indefinite
delay caused by a judicial challenge to the regulatory
consideration of a specific eligible project, the Federal or
State regulatory or licensing process governing the siting,
construction, or commissioning of an eligible project does not
produce a definitive determination that the eligible project
may go forward or stop within a predetermined and prescribed
time period.
``(14) Secured loan.--The term `secured loan' means a loan
or other secured debt obligation issued by an obligor and
funded by the Secretary in connection with the financing of an
eligible project.
``(15) Standby default coverage.--The term `standby default
coverage' means a pledge by the Secretary to pay all or part of
the debt obligation issued by an obligor and funded by a
lender, plus all or part of obligor equity, if an eligible
project fails to receive an operating license in a period of
time established by the Secretary because of a regulatory
failure or other specific issue identified by the Secretary.
``(16) Standby interest coverage.--The term `standby
interest coverage' means a pledge by the Secretary to provide
to an obligor, at a future date and on the occurrence of 1 or
more events, a direct loan, the proceeds of which shall be used
by the obligor to maintain the current status of the obligor on
interest payments due on 1 or more loans or other project
obligations issued by an obligor and funded by a lender for an
eligible project.
``(17) Subsidy amount.--The term `subsidy amount' means the
amount of budget authority sufficient to cover the estimated
long-term cost to the Federal Government of a Federal credit
instrument issued by the Secretary to an eligible project,
calculated on a net present value basis, excluding
administrative costs and any incidental effects on governmental
receipts or outlays in accordance with the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et seq.).
``(18) Substantial completion.--The term `substantial
completion' means that an eligible project has been determined
by the Board to be in, or capable of, commercial operation.
``(b) Duties of the Secretary.--
``(1) In general.--The Secretary shall make available to
eligible project developers and eligible project owners, in
accordance with this section, such financial assistance as is
necessary to supplement private sector financing for eligible
projects.
``(2) Climate credit board.--
``(A) In general.--Not later than 180 days after
the date of enactment of this section, the Secretary
shall establish within the Department of Energy a
Climate Credit Board composed of--
``(i) the Under Secretary of Energy, who
shall serve as Chairperson;
``(ii) the Chief Financial Officer of the
Department of Energy;
``(iii) the Assistant Secretary of Energy
for Policy and International Affairs;
``(iv) the Assistant Secretary of Energy
for Energy Efficiency and Renewable Energy; and
``(v) such other individuals as the
Secretary determines to have the experience and
expertise (including expertise in corporate and
project finance and the energy sector)
necessary to carry out the duties of the Board.
``(B) Duties.--The Board shall--
``(i) implement the program developed under
section 1610(g)(1) in accordance with paragraph
(3);
``(ii) issue regulations and criteria in
accordance with paragraph (4);
``(iii) conduct negotiations with
individuals and entities interested in
obtaining assistance under this section;
``(iv) recommend to the Secretary potential
recipients and amounts of grants of assistance
under this section; and
``(v) establish metrics to indicate the
progress of the greenhouse gas intensity
reducing technology deployment program and
individual projects carried out under the
program toward meeting the criteria established
by section 1610(i)(2).
``(3) Greenhouse gas intensity reducing technology
deployment program.--Not later than 1 year after the date of
enactment of this section, the Board, with the approval of the
Secretary, shall implement the greenhouse gas intensity
reducing technology deployment program developed under section
1610(g)(1).
``(4) Regulations and criteria.--
``(A) In general.--Not later than 1 year after the
date of enactment of this section, the Board, in
coordination with the Secretary and after an
opportunity for public comment, shall issue such
regulations and criteria as are necessary to implement
this section.
``(B) Requirements.--The regulations and criteria
shall provide for, at a minimum--
``(i) a competitive process and the general
terms and conditions for the provision of
assistance under this section;
``(ii) the procedures by which eligible
project owners and eligible project developers
may request financial assistance under this
section; and
``(iii) the collection of any other
information necessary for the Secretary to
carry out this section, including a process for
negotiating the terms and conditions of
assistance provided under this section.
``(C) Eligibility and criteria.--The determination
of eligibility of, and criteria for selecting, eligible
projects to receive assistance under this section shall
be carried out in accordance with subsection (c) and
the regulations issued under subparagraph (A).
``(D) Conditions for provision of assistance.--The
Board shall not provide assistance under this section
unless the Board determines, in accordance with the
regulations issued under subparagraph (A), that the
terms, conditions, maturity, security, schedule, and
amounts of repayments of the assistance are reasonable
and appropriate to protect the financial interests of
the United States.
``(5) Confidentiality.--In accordance with section 552 of
title 5, United States Code, and any related regulations
applicable to the Department of Energy, the Board shall protect
the confidentiality of any information provided by an applicant
for assistance under this section that the applicant certifies
to be commercially sensitive or that is protected intellectual
property.
``(c) Determination of Eligibility; Project Selection.--
``(1) Eligibility.--To be eligible to receive assistance
under this section, an eligible project shall, as determined by
the Board--
``(A) be supported by an application that contains
all information required to be included by, and is
submitted to and approved by the Board in accordance
with, the regulations and criteria issued by the Board
under subsection (b)(4);
``(B) be nationally or regionally significant by--
``(i) reducing greenhouse gas intensity;
``(ii) contributing to energy security; and
``(iii) contributing to energy and
technology diversity in the energy economy of
the United States;
``(C) contain an advanced climate technology or
system that could--
``(i) significantly improve the efficiency,
security, reliability, and environmental
performance of the energy economy of the United
States; and
``(ii) reduce greenhouse gas emissions;
``(D) have revenue sources dedicated to repayment
of credit support-based project financing, such as
revenue--
``(i) from the sale of sequestered carbon;
``(ii) from the sale of energy,
electricity, or other products from eligible
projects that employ advanced climate
technologies and systems;
``(iii) from the sale of electricity or
generating capacity, in the case of electricity
infrastructure; or
``(iv) associated with energy efficiency
gains, in the case of other energy projects;
``(E) include a project proposal and agreement for
project financing repayment that demonstrates to the
satisfaction of the Board that the dedicated revenue
sources described in subparagraph (D) will be adequate
to repay project financing provided under this section;
and
``(F) reduce greenhouse gas intensity on a
national, regional, or company basis.
``(2) Limitations.--Except as otherwise provided in this
section--
``(A) the total cost of an eligible project
provided Federal financial assistance under this
section shall be at least $40,000,000;
``(B) the Federal share of an eligible project
provided Federal financial assistance under this
section shall be not more than 25 percent of eligible
project costs;
``(C) not more than $200,000,000 in Federal
financial assistance shall be provided to any
individual eligible project; and
``(D) an eligible project shall not be eligible for
financial assistance from any other Federal grant
program during any period that Federal financial
assistance (other than a Federal loan or loan
guarantee) is provided to the eligible project under
this section.
``(3) Selection among eligible projects.--
``(A) Establishment of selection criteria.--The
Board, in consultation with the Secretary and [the
Interagency Coordinating Committee on Climate Change
Technology established under section 1610(c)(1)],
shall, in accordance with the regulations issued under
subsection (b)(4)(A), establish criteria for selecting
which eligible projects will receive assistance under
this section.
``(B) Requirements.--The selection criteria shall
include a determination by the Board of the extent to
which--
``(i) the eligible project reduces
greenhouse gas intensity beyond reductions
achieved by technology available as of October
15, 1992;
``(ii) financing for the eligible project
has appropriate security features, such as a
rate covenant, to ensure repayment;
``(iii) assistance under this section for
the eligible project would foster innovative
public-private partnerships and attract private
debt or equity investment;
``(iv) assistance under this section for an
eligible project would enable the eligible
project to proceed at an earlier date than
would otherwise be practicable; and
``(v) the eligible project uses new
technologies that enhance the efficiency,
reduce greenhouse gas intensity, improve the
reliability, or improve the safety, of the
eligible project.
``(C) Financial information.--An application for
assistance for an eligible project under this section
shall include such information as the Secretary
determines to be necessary concerning--
``(i) the amount of budget authority
required to fund the Federal credit instrument
requested for the eligible project;
``(ii) the estimated construction costs of
the proposed eligible project;
``(iii) estimates of construction and
operating costs of the eligible project;
``(iv) projected revenues from the eligible
project; and
``(v) any other financial aspects of the
eligible project, including assurances, that
the Board determines to be appropriate.
``(D) Preliminary rating opinion letter.--The Board
shall require each applicant seeking assistance for an
eligible project under this section to provide a
preliminary rating opinion letter from at least 1
credit rating agency indicating that the senior
obligations of the eligible project have the potential
to achieve an investment-grade rating.
``(E) Risk assessment.--Before entering into any
agreement to provide assistance for an eligible project
under this section, the Board, in consultation with the
Secretary, the Director of the Office of Management and
Budget, and each credit rating agency providing a
preliminary rating opinion letter under subparagraph
(D), shall determine and maintain an appropriate
capital reserve subsidy amount for each line of credit
established for the eligible project, taking into
account the information contained in the preliminary
rating opinion letter.
``(F) Investment-grade rating requirement.--
``(i) In general.--The funding of any
assistance under this section shall be
contingent on the senior obligations of the
eligible project receiving an investment-grade
rating from at least 1 credit rating agency.
``(ii) Considerations.--In determining
whether an investment-grade rating is
appropriate under clause (i), the credit rating
agency shall take into account the availability
of Federal financial assistance under this
section.
``(4) Maximum available climate credit support.--
Notwithstanding any assistance limitation under any other
provision of this section, the Secretary shall not provide
energy credit support to any eligible project in the form of a
secured loan or loan guarantee under subsection (f), production
incentive payments under subsection (g), or other credit-based
financial assistance under subsection (h), the combined total
of which exceeds 25 percent of eligible project costs,
excluding the value of standby default coverage under
subsection (d) and standby interest coverage under subsection
(e), as determined by the Secretary.
``(d) Standby Default Coverage.--
``(1) Agreements; use of proceeds.--
``(A) Agreements.--
``(i) In general.--Subject to subparagraph
(B), the Board, in consultation with the
Secretary, may enter into agreements to provide
standby default coverage for advanced climate
technologies or systems of an eligible project.
``(ii) Recipients.--Coverage under clause
(i) may be provided to 1 or more obligors and
debt holders to be triggered at future dates on
the occurrence of certain events for any
eligible project selected under subsection (c).
``(B) Use of proceeds.--The proceeds of standby
default coverage made available under this subsection
shall be available to reimburse all or part of the debt
obligation for an eligible project issued by an obligor
and funded by a lender, plus all or part of obligor
equity, in the event that, because of a regulatory
failure or other event specified by the Secretary
pursuant to this section, an eligible advanced climate
technology or system for an eligible project fails to
receive an operating license in a period of time
specified by the Board in accordance with this
subsection.
``(2) Terms and limitations.--
``(A) In general.--Standby default coverage under
this subsection with respect to an eligible project
shall be on such terms and conditions and contain such
covenants, representations, warranties, and
requirements (including requirements for audits) as the
Board determines to be appropriate.
``(B) Maximum amounts.--The total amount of standby
default coverage provided for an eligible project shall
not exceed 25 percent of the reasonably anticipated
eligible project costs, including debt and equity.
``(C) Exercise.--Any exercise on the standby
default coverage shall be made only if a facility
involved with the eligible project fails, because of
regulatory failure or other specific issues specified
by the Secretary, to receive an operating license by
such deadline as the Secretary shall establish.
``(D) Cost of coverage.--The cost of standby
default coverage shall be assumed by the Secretary
subject to the risk assessment calculation required
under subsection (c)(4)(E) and the availability of
funds for that purpose.
``(E) Fees.--In carrying out this section, the
Secretary may--
``(i) establish fees at a level sufficient
to cover all or a portion of the administrative
costs incurred by the Federal Government in
providing standby default coverage under this
subsection; and
``(ii) require that the fees be paid upon
application for a standby default coverage
agreement under this subsection.
``(F) Period of availability.--In the event that
regulatory approval to operate a facility is suspended
as a result of regulatory failure or other
circumstances specified by the Secretary, standby
default coverage shall be available beginning on the
date of substantial completion and ending not later
than 5 years after the date on which operation of the
facility is scheduled to commence.
``(G) Rights of third-party creditors.--
``(i) Against federal government.--A third-
party creditor of an obligor shall not have any
right against the Federal Government with
respect to any amounts other than those
specified in clause (ii).
``(ii) Assignment.--An obligor may assign
all or part of the standby default coverage for
an eligible project to 1 or more lenders or to
a trustee on behalf of the lenders.
``(H) Result of exercise of standby default
coverage.--If standby default coverage is exercised by
the obligor of an eligible project--
``(i) the Federal Government shall become
the sole owner of the eligible project, with
all rights and appurtenances to the eligible
project; and
``(ii) in accordance with applicable
provisions of law, the Board shall dispose of
the assets of the eligible project on terms
that are most favorable to the Federal
Government, which may include continuing to
licensing and commercial operation or resale of
the eligible project, in whole or in part, if
that is the best course of action in the
judgment of the Board.
``(I) Estimate of assets at time of termination.--
If standby default coverage is exercised and an
eligible project is terminated, the Board, in making a
determination of whether to dispose of the assets of
the eligible project or continue the eligible project
to licensing and commercial operation, shall obtain a
fair and impartial estimate of the eligible project
assets at the time of termination.
``(J) Relationship to other credit instruments.--An
eligible project that receives standby default coverage
under this subsection may receive a secured loan or
loan guarantee under subsection (f), production
incentive payments under subsection (g), or assistance
through a credit-based financial assistance mechanism
under subsection (h).
``(K) Other conditions and requirements.--The
Secretary may impose such other conditions and
requirements in connection with any insurance provided
under this subsection (including requirements for
audits) as the Secretary determines to be appropriate.
``(e) Standby Interest Coverage.--
``(1) In general.--
``(A) Agreements.--Subject to subparagraph (B), the
Board, in consultation with the Secretary, may enter
into agreements to make standby interest coverage
available to 1 or more obligors in the form of loans
for advanced climate or energy technologies or systems
to be made by the Board at future dates on the
occurrence of certain events for any eligible project
selected under subsection (c)(4).
``(B) Use of proceeds.--Subject to subsection
(c)(3), the proceeds of standby interest coverage made
available under this subsection shall be available to
pay the debt service on project obligations issued to
finance eligible project costs of an eligible project
if a delay in commercial operations occurs due to a
regulatory failure or other condition determined by the
Secretary.
``(2) Terms and limitations.--
``(A) In general.--Standby interest coverage under
this subsection with respect to an eligible project
shall be made on such terms and conditions (including a
requirement for an audit) as the Secretary determines
appropriate.
``(B) Maximum amounts.--
``(i) Total amount.--The total amount of
standby interest coverage for an eligible
project under this subsection shall not exceed
25 percent of the reasonably anticipated
eligible project costs of the eligible project.
``(ii) 1-year draws.--The amount drawn in
any 1 year for an eligible project under this
subsection shall not exceed 25 percent of the
total amount of the standby interest coverage
for the eligible project.
``(C) Period of availability.--The standby interest
coverage for an eligible project shall be available
during the period--
``(i) beginning on a date following
substantial completion of the eligible project
that regulatory approval to operate a facility
under the eligible project is suspended as a
result of regulatory failure or other condition
determined by the Secretary; and
``(ii) ending on a date that is not later
than 5 years after the eligible project is
scheduled to commence commercial operations.
``(D) Cost of coverage.--Subject to subsection
(c)(4)(E), the cost of standby interest coverage for an
eligible project under this subsection shall be borne
by the Secretary.
``(E) Draws.--Any draw on the standby interest
coverage for an eligible project shall--
``(i) represent a loan;
``(ii) be made only if there is a delay in
commercial operations after the substantial
completion of the eligible project; and
``(iii) be subject to the overall credit
support limitations established under
subsection (c)(5).
``(F) Interest rate.--
``(i) In general.--Subject to clause (ii),
the interest rate on a loan resulting from a
draw on standby interest coverage under this
subsection shall be established by the
Secretary.
``(ii) Minimum rate.--The interest rate on
a loan resulting from a draw on standby
interest coverage under this subsection shall
not be less than the current average market
yield on outstanding marketable obligations of
the United States with a maturity of 10 years,
as of the date on which the standby interest
coverage is obligated.
``(G) Security.--The standby interest coverage for
an eligible project--
``(i) shall be payable, in whole or in
part, from dedicated revenue sources generated
by the eligible project;
``(ii) shall require security for the
project obligations; and
``(iii) may have a lien on revenues
described in clause (i), subject to any lien
securing project obligations.
``(H) Rights of third-party creditors.--
``(i) Against federal government.--A third-
party creditor of the obligor shall not have
any right against the Federal Government with
respect to any draw on standby interest
coverage under this subsection.
``(ii) Assignment.--An obligor may assign
the standby interest coverage to 1 or more
lenders or to a trustee on behalf of the
lenders.
``(I) Subordination.--A secured loan for an
eligible project made under this subsection shall be
subordinate to senior private debt issued by a lender
for the eligible project.
``(J) Nonrecourse status.--A secured loan for an
eligible project under this subsection shall be
nonrecourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
``(K) Fees.--The Board may impose fees at a level
sufficient to cover all or part of the costs to the
Federal Government of providing standby interest
coverage for an eligible project under this subsection.
``(3) Repayment.--
``(A) Terms and conditions.--The Secretary shall
establish a repayment schedule and terms and conditions
for each loan for an eligible project under this
subsection based on the projected cash flow from
revenues for the eligible project.
``(B) Repayment schedule.--Scheduled repayments of
principal or interest on a loan under this subsection
shall--
``(i) commence not later than 5 years after
the end of the period of availability specified
in paragraph (2)(C); and
``(ii) be completed, with interest, not
later than 10 years after the end of the period
of availability.
``(C) Sources of repayment funds.--The sources of
funds for scheduled loan repayments under this
subsection shall include--
``(i) the sale of electricity or generating
capacity;
``(ii) the sale or transmission of energy;
``(iii) revenues associated with energy
efficiency gains; or
``(iv) other dedicated revenue sources,
such as carbon use.
``(D) Prepayment.--
``(i) Use of excess revenues.--At the
discretion of the obligor, any excess revenues
that remain after satisfying scheduled debt
service requirements on the project obligations
and secured loan, and all deposit requirements
under the terms of any trust agreement, bond
resolution, or similar agreement securing
project obligations, may be applied annually to
prepay the secured loan without penalty.
``(ii) Use of proceeds of refinancing.--The
secured loan may be prepaid at any time without
penalty from the proceeds of refinancing from
non-Federal funding sources.
``(f) Secured Loans and Loan Guarantees.--
``(1) In general.--
``(A) Agreements.--Subject to subparagraph (B), the
Board, in consultation with the Secretary, may enter
into agreements with 1 or more obligors to make secured
loans for eligible projects involving advanced climate
technologies or systems.
``(B) Use of proceeds.--Subject to paragraph (2),
the proceeds of a secured loan for an eligible project
made available under this subsection shall be
available, in conjunction with the equity of the
obligor and senior debt financing for the eligible
project, to pay for eligible project costs.
``(2) Terms and limitations.--
``(A) In general.--A secured loan under this
subsection with respect to an eligible project shall be
made on such terms and conditions (including
requirements for an audit) as the Board, in
consultation with the Secretary, determines
appropriate.
``(B) Maximum amount.--Subject to subsection
(c)(5), the total amount of the secured loan for an
eligible project under this subsection shall not exceed
25 percent of the reasonably anticipated eligible
project costs of the eligible project.
``(C) Period of availability.--The Board may enter
into a contract with the owner or operator of an
eligible project to provide a secured loan during the
period--
``(i) beginning on the date that the
financial structure of the eligible project is
established; and
``(ii) ending on the date of the start of
construction of the eligible project.
``(D) Cost of coverage.--Subject to subsection
(c)(4)(E), the cost of a secured loan for an eligible
project under this subsection shall be borne by the
Secretary.
``(E) Interest rate.--
``(i) In general.--Subject to clause (ii),
the interest rate on a secured loan under this
subsection shall be established by the
Secretary.
``(ii) Minimum rate.--The interest rate on
a loan resulting from a secured loan under this
subsection shall not be less than the current
average market yield on outstanding marketable
obligations of the United States of comparable
maturity, as of the date of the execution of
the loan agreement.
``(F) Security.--The secured loan--
``(i) shall be payable, in whole or in
part, from dedicated revenue sources generated
by the eligible project;
``(ii) shall include a rate covenant,
coverage requirement, or similar security
feature supporting the project obligations; and
``(iii) may have a lien on revenues
described in clause (i), subject to any lien
securing project obligations.
``(G) Rights of third-party creditors.--
``(i) Against federal government.--A third-
party creditor of the obligor shall not have
any right against the Federal Government with
respect to any payments due to the Federal
Government under this subsection.
``(ii) Assignment.--An obligor may assign
the secured loan to 1 or more lenders or to a
trustee on behalf of the lenders.
``(H) Subordination.--A secured loan for an
eligible project made under this subsection shall be
subordinate to senior private debt issued by a lender
for the eligible project.
``(I) Nonrecourse status.--A secured loan for an
eligible project under this subsection shall be non-
recourse to the obligor in the event of bankruptcy,
insolvency, or liquidation of the eligible project.
``(J) Fees.--The Board may establish fees at a
level sufficient to cover all or a portion of the costs
to the Federal Government of making secured loans for
an eligible project under this subsection.
``(3) Repayment.--
``(A) Schedule and terms.--The Board shall
establish a repayment schedule and terms and conditions
for each secured loan for an eligible project under
this subsection based on the projected cash flow from
revenues for the eligible project.
``(B) Repayment schedule.--Scheduled repayments on
a secured loan for an eligible project under this
subsection shall--
``(i) commence not later than 5 years after
the scheduled start of commercial operations of
the eligible project; and
``(ii) be completed, with interest, not
later than 35 years after the scheduled date of
the start of commercial operations of the
eligible project.
``(C) Sources of repayment funds.--The sources of
funds for scheduled loan repayments under this
subsection shall include--
``(i) the sale of carbon or carbon
compounds;
``(ii) the sale of electricity or
generating capacity;
``(iii) the sale of sequestration services;
``(iv) the sale or transmission of energy;
``(v) revenues associated with energy
efficiency gains; or
``(vi) other dedicated revenue sources.
``(D) Deferred payments.--
``(i) Authorization.--If, at any time
during the 10-year period beginning on the date
of the scheduled start of commercial operation
of an eligible project, the eligible project is
unable to generate sufficient revenues to pay
the scheduled loan repayments of principal or
interest on the secured loan, the Secretary
may, subject to clause (iii), allow the obligor
to add unpaid principal or interest to the
outstanding balance of the secured loan.
``(ii) Interest.--Any payment deferred
under clause (i) shall--
``(I) continue to accrue interest
in accordance with paragraph (2)(E)
until fully repaid; and
``(II) be scheduled to be amortized
over the number of years remaining in
the term of the loan in accordance with
subparagraph (B).
``(iii) Criteria.--
``(I) In general.--Any payment
deferral under clause (i) shall be
contingent on the eligible project
meeting criteria established by the
Secretary.
``(II) Repayment standards.--The
criteria established under subclause
(I) shall include standards for
reasonable assurance of repayment.
``(E) Prepayment.--
``(i) Use of excess revenues.--At the
discretion of the obligor, any excess revenues
that remain after satisfying scheduled debt
service requirements on the project obligations
and secured loan, and all deposit requirements
under the terms of any trust agreement, bond
resolution, or similar agreement securing
project obligations, may be applied annually to
prepay the secured loan without penalty.
``(ii) Use of proceeds of refinancing.--The
secured loan may be prepaid at any time without
penalty from the proceeds of refinancing from
non-Federal funding sources.
``(4) Sale of secured loans.--
``(A) In general.--Subject to subparagraph (B), as
soon as practicable after substantial completion of an
eligible project and after notifying the obligor, the
Board may sell to another entity or reoffer into the
capital markets a secured loan for the eligible project
if the Board determines that the sale or reoffering can
be made on favorable terms.
``(B) Consent of obligor.--In making a sale or
reoffering under subparagraph (A), the Board may not
change the original terms and conditions of the secured
loan without the written consent of the obligor.
``(5) Loan guarantees.--
``(A) In general.--The Board may provide a loan
guarantee to a lender, in lieu of making a secured
loan, under this subsection if the Board determines
that the budgetary cost of the loan guarantee is
substantially the same as that of a secured loan.
``(B) Terms.--
``(i) In general.--Except as provided in
clause (ii), the terms of a guaranteed loan
shall be consistent with the terms for a
secured loan under this subsection.
``(ii) Interest rate; prepayment.--The
interest rate on the guaranteed loan and any
prepayment features shall be established by
negotiations between the obligor and the
lender, with the consent of the Board.
``(g) Production Incentive Payments.--
``(1) Secured loan.--
``(A) In general.--The Secretary may enter into an
agreement with 1 or more obligors to make a secured
loan for an eligible project selected under subsection
(c)(4) that employs 1 or more advanced climate
technologies or systems.
``(B) Production incentive payments.--
``(i) In general.--Amounts loaned to an
obligor under subparagraph (A) shall be made
available in the form of a series of production
incentive payments provided by the Board to the
obligor during a period of not more than 10
years, as determined by the Board, beginning
after the date on which commercial project
operations start at the eligible project.
``(ii) Amount.--Production incentive
payments under clause (i) shall be for an
amount equal to 25 percent of the value of--
``(I) the energy produced or
transmitted by the eligible project
during the applicable year; or
``(II) any gains in energy
efficiency achieved by the eligible
project during the applicable year.
``(2) Terms and limitations.--
``(A) In general.--A secured loan under this
subsection shall be subject to such terms and
conditions, including any covenant, representation,
warranty, and requirement (including a requirement for
an audit) that the Secretary determines to be
appropriate.
``(B) Agreement costs.--Subject to subsection
(c)(4), the cost of carrying out an agreement entered
into under paragraph (1)(A) shall be paid by the
Secretary.
``(C) Interest rate.--
``(i) In general.--Subject to clause (ii),
the interest rate on a secured loan under this
subsection shall be established by the
Secretary.
``(ii) Minimum rate.--The interest rate on
a secured loan under this subsection shall not
be less than the current average market yield
on outstanding marketable obligations of the
United States of comparable maturity, as of the
date on which the agreement under paragraph
(1)(A) is executed.
``(D) Security.--The secured loan--
``(i) shall be payable, in whole or in
part, from dedicated revenue sources generated
by the eligible project;
``(ii) shall include a rate covenant,
coverage requirement, or similar security
feature supporting the eligible project
obligations; and
``(iii) may have a lien on revenues
described in clause (i), subject to any lien
securing eligible project obligations.
``(E) Rights of third-party creditors.--
``(i) Against federal government.--A third-
party creditor of the obligor shall not have
any right against the Federal Government with
respect to any payments due to the Federal
Government under the agreement entered into
under paragraph (1)(A).
``(ii) Assignment.--An obligor may assign
production incentive payments to 1 or more
lenders or to a trustee on behalf of the
lenders.
``(F) Subordination.--A secured loan under this
subsection shall be subordinate to senior private debt
issued by a lender for the eligible project.
``(G) Nonrecourse status.--A secured loan under
this subsection shall be nonrecourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of
the eligible project.
``(H) Fees.--The Secretary may impose fees at a
level sufficient to cover all or part of the costs to
the Federal Government of providing production
incentive payments under this subsection.
``(3) Repayment.--
``(A) Schedule, terms, and conditions.--The
Secretary shall establish a repayment schedule and
terms and conditions for each secured loan under this
subsection based on the projected cash flow from
revenues of the eligible project.
``(B) Repayment schedule.--Scheduled repayments of
principal or interest on a secured loan under this
subsection shall--
``(i) commence not later than 5 years after
the date on which the last production incentive
payment is made by the Board under paragraph
(1)(B); and
``(ii) be completed, with interest, not
later than 10 years after the date on which the
last production incentive payment is made.
``(C) Sources of repayment funds.--The sources of
funds for scheduled loan repayments under this
subsection include--
``(i) the sale of electricity or generating
capacity,
``(ii) the sale or transmission of energy;
``(iii) revenues associated with energy
efficiency gains; or
``(iv) other dedicated revenue sources.
``(D) Deferred payments.--
``(i) Authorization.--If, at any time
during the 10-year period beginning on the date
on which commercial operations of the eligible
project start, the eligible project is unable
to generate sufficient revenues to pay the
scheduled loan repayments of principal or
interest on a secured loan under this
subsection, the Secretary may, subject to
criteria established by the Secretary
(including standards for reasonable assurances
of repayment), allow the obligor to add unpaid
principal and interest to the outstanding
balance of the secured loan.
``(ii) Interest.--Any payment deferred
under clause (i) shall--
``(I) continue to accrue interest
in accordance with paragraph (2)(C)
until fully repaid; and
``(II) be scheduled to be amortized
over the number of years remaining in
the term of the loan in accordance with
subparagraph (B).
``(E) Prepayment.--
``(i) Use of excess revenues.--At the
discretion of the obligor, any excess revenues
that remain after satisfying scheduled debt
service requirements on the eligible project
obligations and the secured loan, and all
deposit requirements under the terms of any
trust agreement, bond resolution, or similar
agreement securing eligible project
obligations, may be applied annually to prepay
loans pursuant to an agreement entered into
under paragraph (1)(A) without penalty.
``(ii) Use of proceeds of refinancing.--The
secured loan may be prepaid at any time without
penalty from the proceeds of refinancing from
non-Federal funding sources.
``(4) Sale of secured loans.--
``(A) In general.--Subject to subparagraph (B), as
soon as practicable after the date on which the last
production incentive payment is made to the obligor
under paragraph (1)(B) and after notifying the obligor,
the Secretary may sell to another entity or reoffer
into the capital markets a secured loan for the
eligible project if the Secretary determines that the
sale or reoffering can be made on favorable terms.
``(B) Consent required.--In making a sale or
reoffering under subparagraph (A), the Board may not
change the original terms and conditions of the secured
loan without the written consent of the obligor.
``(h) Other Credit-based Financial Assistance Mechanisms for
Eligible Projects.--
``(1) In general.--
``(A) Agreements.--The Board may enter into an
agreement with 1 or more obligors to make a secured
loan to the obligors for eligible projects selected
under subsection (c) that employ advanced technologies
or systems, the proceeds of which shall be used to--
``(i) finance eligible project costs; or
``(ii) enhance eligible project revenues.
``(B) Credit-based financial assistance.--Amounts
made available as a secured loan under subparagraph (A)
shall be provided by the Board to the obligor in the
form of credit-based financial assistance mechanisms
that are not otherwise specifically provided for in
subsections (d) through (g), as determined to be
appropriate by the Secretary.
``(2) Terms and limitations.--
``(A) In general.--A secured loan under this
subsection shall be subject to such terms and
conditions (including any covenants, representations,
warranties, and requirements (including a requirement
for an audit)) as the Secretary determines to be
appropriate.
``(B) Maximum amount.--Subject to subsection
(c)(5), the total amount of the secured loan under this
subsection shall not exceed 50 percent of the
reasonably anticipated eligible project costs.
``(C) Period of availability.--The Board may enter
into a contract with the obligor to provide credit-
based financial assistance to an eligible project
during the period--
``(i) beginning on the date that the
financial structure of the eligible project is
established; and
``(ii) ending on the date of the start of
construction of the eligible project.
``(D) Agreement costs.--Subject to subsection
(c)(4)(E), the cost of carrying out an agreement
entered into under paragraph (1)(A) shall be paid by
the Board.
``(E) Interest rate.--
``(i) In general.--Subject to clause (ii),
the interest rate on a secured loan under this
subsection shall be established by the Board.
``(ii) Minimum rate.--The interest rate on
a secured loan under this subsection shall not
be less than the current average market yield
on outstanding marketable obligations of the
United States of comparable maturity, as of the
date of the execution of the secured loan
agreement.
``(F) Security.--The secured loan--
``(i) shall be payable, in whole or in
part, from dedicated revenue sources generated
by the eligible project;
``(ii) shall include a rate covenant,
coverage requirement, or similar security
feature supporting the eligible project
obligations; and
``(iii) may have a lien on revenues
described in clause (i), subject to any lien
securing eligible project obligations.
``(G) Rights of third-party creditors.--
``(i) Against federal government.--A third-
party creditor of the obligor shall not have
any right against the Federal Government with
respect to any payments due to the Federal
Government under this subsection.
``(ii) Assignment.--An obligor may assign
payments made pursuant to an agreement to
provide credit-based financial assistance under
this subsection to 1 or more lenders or to a
trustee on behalf of the lenders.
``(H) Subordination.--A secured loan under this
subsection shall be subordinate to senior private debt
issued by a lender for the eligible project.
``(I) Nonrecourse status.--A secured loan under
this subsection shall be nonrecourse to the obligor in
the event of bankruptcy, insolvency, or liquidation of
the eligible project.
``(J) Fees.--The Board may establish fees at a
level sufficient to cover all or part of the costs to
the Federal Government of providing credit-based
financial assistance under this subsection.
``(3) Repayment.--
``(A) Schedule and terms and conditions.--The Board
shall establish a repayment schedule and terms and
conditions for each secured loan under this subsection
based on the projected cash flow from eligible project
revenues.
``(B) Repayment schedule.--Scheduled loan
repayments of principal or interest on a secured loan
under this subsection shall--
``(i) commence not later than 5 years after
the date of substantial completion of the
eligible project; and
``(ii) be completed, with interest, not
later than 35 years after the date of
substantial completion of the eligible project.
``(C) Sources of repayment funds.--The sources of
funds for scheduled loan repayments under this
subsection shall include--
``(i) the sale of electricity or generating
capacity;
``(ii) the sale or transmission of energy;
``(iii) revenues associated with energy
efficiency gains; or
``(iv) other dedicated revenue sources,
such as carbon sequestration.
``(D) Deferred payments.--
``(i) Authorization.--If, at any time
during the 10-year period beginning on the date
of the start of commercial operations of the
eligible project, the eligible project is
unable to generate sufficient revenues to pay
the scheduled loan repayments of principal or
interest on a secured loan under this
subsection, the Secretary may, subject to
criteria established by the Secretary
(including standards for reasonable assurances
of repayment), allow the obligor to add unpaid
principal and interest to the outstanding
balance of the secured loan.
``(ii) Interest.--Any payment deferred
under clause (i) shall--
``(I) continue to accrue interest
in accordance with paragraph (2)(E)
until fully repaid; and
``(II) be scheduled to be amortized
over the number of years remaining in
the term of the loan in accordance with
subparagraph (B).
``(E) Prepayment.--
``(i) Use of excess revenues.--At the
discretion of the obligor, any excess revenues
that remain after satisfying scheduled debt
service requirements on the eligible project
obligations and secured loan, and all deposit
requirements under the terms of any trust
agreement, bond resolution, or similar
agreement securing eligible project
obligations, may be applied annually to prepay
a secured loan under this subsection without
penalty.
``(ii) Use of proceeds of refinancing.--A
secured loan under this subsection may be
prepaid at any time without penalty from the
proceeds of refinancing from non-Federal
funding sources.
``(4) Sale of secured loans.--
``(A) In general.--Subject to subparagraph (B), as
soon as practicable after the start of commercial
operations of an eligible project and after notifying
the obligor, the Board may sell to another entity or
reoffer into the capital markets a secured loan for the
eligible project under this subsection if the Secretary
determines that the sale or reoffering can be made on
favorable terms.
``(B) Consent of obligor.--In making a sale or
reoffering under subparagraph (A), the Board may not
change the original terms and conditions of the secured
loan without the written consent of the obligor.
``(i) Federal, State, and Local Regulatory Requirements.--The
provision of Federal financial assistance to an eligible project under
this section shall not--
``(1) relieve any recipient of the assistance of any
obligation to obtain any required Federal, State, or local
regulatory requirement, permit, or approval with respect to the
eligible project;
``(2) limit the right of any unit of Federal, State, or
local government to approve or regulate any rate of return on
private equity invested in the eligible project; or
``(3) otherwise supersede any Federal, State, or local law
(including any regulation) applicable to the construction or
operation of the eligible project.
``(j) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section for
each of fiscal years 2006 through 2010, to remain available until
expended.''.
Subtitle B--Climate Change Technology Deployment in Developing
Countries
SEC. 1611. CLIMATE CHANGE TECHNOLOGY DEPLOYMENT IN DEVELOPING
COUNTRIES.
The Global Environmental Protection Assistance Act of 1989 (Public
Law 101-240; 103 Stat. 2521) is amending by adding at the end the
following:
``PART C--TECHNOLOGY DEPLOYMENT IN DEVELOPING COUNTRIES
``SEC. 731. DEFINITIONS.
``In this part:
``(1) Carbon sequestration.--The term `carbon
sequestration' means the capture of carbon dioxide through
terrestrial, geological, biological, or other means, which
prevents the release of carbon dioxide into the atmosphere.
``(2) Greenhouse gas.--The term `greenhouse gas' means
carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.
``(3) Greenhouse gas intensity.--The term `greenhouse gas
intensity' means the ratio of greenhouse gas emissions to
economic output.
``SEC. 732. REDUCTION OF GREENHOUSE GAS INTENSITY.
``(a) Lead Agency.--
``(1) In general.--The Department of State shall act as the
lead agency for integrating into United States foreign policy
the goal of reducing greenhouse gas intensity in developing
countries.
``(2) Reports.--
``(A) Initial report.--Not later than 180 days
after the date of enactment of this part, the Secretary
of State shall submit to the appropriate authorizing
and appropriating committees of Congress an initial
report, based on the most recent information available
to the Secretary from reliable public sources, that
identifies the 25 developing countries that are the
greenhouse gas emitters, including for each country--
``(i) an estimate of the quantity and types
of energy used;
``(ii) an estimate of the greenhouse gas
intensity of the energy, manufacturing,
agricultural, and transportation sectors;
``(iii) a description the progress of any
significant projects undertaken to reduce
greenhouse gas intensity;
``(iv) a description of the potential for
undertaking projects to reduce greenhouse gas
intensity;
``(v) a description of any obstacles to the
reduction of greenhouse gas intensity; and
``(vi) a description of the best practices
learned by the Agency for International
Development from conducting previous pilot and
demonstration projects to reduce greenhouse gas
intensity.
``(B) Update.--Not later than 18 months after the
date on which the initial report is submitted under
subparagraph (A), the Secretary shall submit to the
appropriate authorizing and appropriating committees of
Congress, based on the best information available to
the Secretary, an update of the information provided in
the initial report.
``(C) Use.--
``(i) Initial report.--The Secretary of
State shall use the initial report submitted
under subparagraph (A) to establish baselines
for the developing countries identified in the
report with respect to the information provided
under clauses (i) and (ii) of that
subparagraph.
``(ii) Annual reports.--The Secretary of
State shall use the annual reports prepared
under subparagraph (B) and any other
information available to the Secretary to track
the progress of the developing countries with
respect to reducing greenhouse gas intensity.
``(b) Projects.--The Secretary of State, in coordination with
Administrator of the United States Agency for International
Development, shall (directly or through agreements with the World Bank,
the International Monetary Fund, the Overseas Private Investment
Corporation, and other development institutions) provide assistance to
developing countries specifically for projects to reduce greenhouse gas
intensity, including projects to--
``(1) leverage, through bilateral agreements, funds for
reduction of greenhouse gas intensity;
``(2) increase private investment in projects and
activities to reduce greenhouse gas intensity; and
``(3) expedite the deployment of technology to reduce
greenhouse gas intensity.
``(c) Focus.--In providing assistance under subsection (b), the
Secretary of State shall focus on--
``(1) promoting the rule of law, property rights, contract
protection, and economic freedom; and
``(2) increasing capacity, infrastructure, and training.
``(d) Priority.--In providing assistance under subsection (b), the
Secretary of State shall give priority to projects in the 25 developing
countries identified in the report submitted under subsection
(a)(2)(A).
``SEC. 733. TECHNOLOGY INVENTORY FOR DEVELOPING COUNTRIES.
``(a) In General.--The Secretary of State, in coordination with the
Secretary of Energy and the Secretary of Commerce, shall conduct an
inventory of greenhouse gas intensity reducing technologies that are
developed, or under development in the United States, to identify
technologies that are suitable for transfer to, deployment in, and
commercialization in the developing countries identified in the report
submitted under section 732(a)(2)(A).
``(b) Report.--Not later than 180 days after the completion of the
inventory under subsection (a), the Secretary of State and the
Secretary of Energy shall jointly submit to Congress a report that--
``(1) includes the results of the completed inventory;
``(2) identifies obstacles to the transfer, deployment, and
commercialization of the inventoried technologies;
``(3) includes results from previous Federal reports
related to the inventoried technologies; and
``(4) includes an analysis of market forces related to the
inventoried technologies.
``SEC. 734. TRADE-RELATED BARRIERS TO EXPORT OF GREENHOUSE GAS
INTENSITY REDUCING TECHNOLOGIES.
``(a) In General.--Not later than 1 year after the date of
enactment of this part, the United States Trade Representative shall
(as appropriate and consistent with applicable bilateral, regional, and
mutual trade agreements)--
``(1) identify trade-relations barriers maintained by
foreign countries to the export of greenhouse gas intensity
reducing technologies and practices from the United States to
the developing countries identified in the report submitted
under section 732(a)(2)(A); and
``(2) negotiate with foreign countries for the removal of
those barriers.
``(b) Annual Report.--Not later than 1 year after the date on which
a report is submitted under subsection (a)(1) and annually thereafter,
the United States Trade Representative shall submit to Congress a
report that describes any progress made with respect to removing the
barriers identified by the United States Trade Representative under
subsection (a)(1).
``SEC. 735. GREENHOUSE GAS INTENSITY REDUCING TECHNOLOGY EXPORT
INITIATIVE.
``(a) In General.--There is established an interagency working
group to carry out a Greenhouse Gas Intensity Reducing Technology
Export Initiative to--
``(1) promote the export of greenhouse gas intensity
reducing technologies and practices from the United States;
``(2) identify developing countries that should be
designated as priority countries for the purpose of exporting
greenhouse gas intensity reducing technologies and practices,
based on the report submitted under section 732(a)(2)(A);
``(3) identify potential barriers to adoption of exported
greenhouse gas intensity reducing technologies and practices
based on the reports submitted under section 734; and
``(4) identify previous efforts to export energy
technologies to learn best practices.
``(b) Composition.--The working group shall be composed of--
``(1) the Secretary of State, who shall act as the head of
the working group;
``(2) the Administrator of the United States Agency for
International Development;
``(3) the United States Trade Representative;
``(4) a designee of the Secretary of Energy; and
``(5) a designee of the Secretary of Commerce.
``(c) Performance Reviews and Reports.--Not later than 180 days
after the date of enactment of this part and each year thereafter, the
interagency working group shall--
``(1) conduct a performance review of actions taken and
results achieved by the Federal Government (including each of
the agencies represented on the interagency working group) to
promote the export of greenhouse gas intensity reducing
technologies and practices from the United States; and
``(2) submit to the appropriate authorizing and
appropriating committees of Congress a report that describes
the results of the performance reviews and evaluates progress
in promoting the export of greenhouse gas intensity reducing
technologies and practices from the United States, including
any recommendations for increasing the export of the
technologies and practices.
``SEC. 736. TECHNOLOGY DEMONSTRATION PROJECTS.
``(a) In General.--The Secretary of State, in coordination with the
Secretary of Energy and the Administrator of the United States Agency
for International Development, shall promote the adoption of
technologies and practices that reduce greenhouse gas intensity in
developing countries in accordance with this section.
``(b) Demonstration Projects.--
``(1) In general.--The Secretaries and the Administrator
shall plan, coordinate, and carry out, or provide assistance
for the planning, coordination, or carrying out of,
demonstration projects under this section in at least 10
eligible countries, as determined by the Secretaries and the
Administrator.
``(2) Eligibility.--A country shall be eligible for
assistance under this subsection if the Secretaries and the
Administrator determine that the country has demonstrated a
commitment to--
``(A) just governance, including--
``(i) promoting the rule of law;
``(ii) respecting human and civil rights;
``(iii) protecting private property rights;
and
``(iv) combating corruption; and
``(B) economic freedom, including economic policies
that--
``(i) encourage citizens and firms to
participate in global trade and international
capital markets;
``(ii) promote private sector growth and
the sustainable management of natural
resources; and
``(iii) strengthen market forces in the
economy.
``(3) Selection.--In determining which eligible countries
to provide assistance to under paragraph (1), the Secretaries
and the Administrator shall consider--
``(A) the opportunity to reduce greenhouse gas
intensity in the eligible country; and
``(B) the opportunity to generate economic growth
in the eligible country.
``(4) Types of projects.--Demonstration projects under this
section may include--
``(A) coal gasification, coal liquefaction, and
clean coal projects;
``(B) carbon sequestration projects;
``(C) cogeneration technology initiatives;
``(D) renewable projects; and
``(E) lower emission transportation.
``SEC. 737. FELLOWSHIP AND EXCHANGE PROGRAMS.
``The Secretary of State, in coordination with the Secretary of
Energy, the Secretary of Commerce, and the Administrator of the
Environmental Protection Agency, shall carry out fellowship and
exchange programs under which officials from developing countries visit
the United States to acquire expertise and knowledge of best practices
to reduce greenhouse gas intensity in their countries.
``SEC. 738. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated such sums as are
necessary to carry out this part (other than section 736).
``SEC. 739. EFFECTIVE DATE.
``Except as otherwise provided in this part, this part takes effect
on October 1, 2005.''.
SEC. 1612. SENSE OF THE SENATE ON CLIMATE CHANGE.
(a) Findings.--Congress finds that--
(1) greenhouse gases accumulating in the atmosphere are
causing average temperatures to rise at a rate outside the
range of natural variability and are posing a substantial risk
of rising sea-levels, altered patterns of atmospheric and
oceanic circulation, and increased frequency and severity of
floods and droughts;
(2) there is a growing scientific consensus that human
activity is a substantial cause of greenhouse gas accumulation
in the atmosphere; and
(3) mandatory steps will be required to slow or stop the
growth of greenhouse gas emissions into the atmosphere.
(b) Sense of the Senate.--It is the sense of the Senate that
Congress should enact a comprehensive and effective national program of
mandatory, market-based limits and incentives on emissions of
greenhouse gases that slow, stop, and reverse the growth of such
emissions at a rate and in a manner that--
(1) will not significantly harm the United States economy;
and
(2) will encourage comparable action by other nations that
are major trading partners and key contributors to global
emissions.
Attest:
Secretary.
109th CONGRESS
1st Session
H. R. 6
_______________________________________________________________________
AMENDMENT
_______________________________________________________________________
July 14, 2005
Ordered to be printed as passed