[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