II 109th CONGRESS 1st Session S. 1016 IN THE SENATE OF THE UNITED STATES May 12, 2005 Mr. Martinez introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To direct the Secretary of Energy to make incentive payments to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate the facilities, and for other purposes.

1.

Short title

This Act may be cited as the Desalination Water Supply Shortage Prevention Act of 2005.

2.

Definitions

In this Act: (1)

Qualified desalination facility

The term qualified desalination facility means a facility that— (A)produces for sale to domestic customers— (i)desalinated seawater; (ii)brackish groundwater; or (iii)surface water the source water of which is greater than 1,000 parts per million total dissolved solids; (B)is owned or operated by— (i)a State or any political subdivision, agency, authority, or instrumentality of a State; or (ii)a corporation responsible for providing municipal water service in accordance with State law; and (C)is first used to produce desalinated water during the 10-year period beginning on October 1 of the first full fiscal year occurring after the date of the enactment of this Act. (2)

Secretary

The term Secretary means the Secretary of Energy.

3.

Desalinated water production incentive payments

(a)

Incentive Payments

The Secretary shall make incentive payments in an amount determined under subsection (d) to the owners or operators of qualified desalination facilities to partially offset the cost of electrical energy required to operate the facilities. (b)

Requirements

The Secretary may not make a payment to the owner or operator of a qualified desalination facility under this section unless— (1)not later than the end of fiscal year 2015, the Secretary enters into a written agreement with the owner or operator to make the payment; and (2)the owner or operator submits an application to the Secretary in such form, at such time, and containing such information and assurances as the Secretary may require. (c)

Payment period

The Secretary may make payments to the owner or operator of a qualified desalination facility under this section for a period not to exceed 10 years— (1)beginning on the date on which the facility is first used to produce desalinated water; and (2)ending not later than September 30, 2025. (d)

Amount of Payment

(1)

In general

A payment made by the Secretary under this section to the owner or operator of a qualified desalination facility shall be based on the amount of desalinated water produced by the facility during the payment period described in subsection (c). (2)

Base payment

For any facility, the amount of a payment described in paragraph (1) shall be 62 cents for every 14 kilowatt hours of electricity used to produce desalinated water, as adjusted under paragraph (3). (3)

Adjustments

The amount of the payment described in paragraph (2) shall be adjusted for inflation for fiscal year 2007 and each subsequent fiscal year— (A)using the inflation adjustment factor defined in section 29(d)(2)(B) of the Internal Revenue Code of 1986; but (B)substituting calendar year 2005 for calendar year 1979. (e)

Limitation

In any fiscal year, not more than 60 percent of the funds made available by the Secretary under this section shall be made available to the owners or operators of qualified desalination facilities that obtain source water directly from the sea, an estuary, or an in-bank extraction well that is of seawater origin. (f)

Budget act compliance

The authority provided by this section may be exercised only in such amounts or to such extent as provided in advance in an appropriations Act. (g)

Authorization of Appropriations

There is authorized to be appropriated to the Secretary to carry out this section $200,000,000.