[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 726 Introduced in Senate (IS)]






109th CONGRESS
  1st Session
                                 S. 726

       To promote the conservation and production of natural gas.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 6, 2005

 Mr. Alexander (for himself and Mr. Johnson) introduced the following 
bill; which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
       To promote the conservation and production of natural gas.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Natural Gas Price 
Reduction Act of 2005''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

Sec. 101. Public education and conservation initiative.
Sec. 102. Reducing residential demand; appliance and equipment 
                            efficiency standards.
Sec. 103. Deployment for distributed generation, solar energy 
                            technologies, and biomass.
Sec. 104. Hydrogen and fuel cell initiative.
Sec. 105. Clarification of cogeneration contracts.
Sec. 106. Cogeneration development.
Sec. 107. Efficient dispatch of natural gas power plants.
Sec. 108. Demand side management for industrials and utilities: net 
                            metering and other standards.
Sec. 109. Demand side management for residential customers: smart 
                            metering.
Sec. 110. Protecting industrial cogenerators.
Sec. 111. Reduction of dependence on imported petroleum.
Sec. 112. National gasification strategy for power sector.
Sec. 113. Industrial gasification demonstration and deployment program.
Sec. 114. Carbon capture and sequestration energy efficiency research 
                            and development.
                          TITLE II--PRODUCTION

Sec. 201. Gas only leases.
Sec. 202. Eastern Gulf of Mexico.
Sec. 203. Review of State requests to examine OCS energy areas.
Sec. 204. Royalty relief for deep water production.
Sec. 205. Coastal impact assistance program.
Sec. 206. Rocky Mountain gas production.
Sec. 207. Gas methane research.
Sec. 208. Alaska Natural Gas Pipeline Act.
Sec. 209. Gas hydrate production incentives.
Sec. 210. Oil and gas exploration and production defined.
Sec. 211. Marginal property production incentives.
Sec. 212. Efficient government processing of permit applications.
Sec. 213. Deadline for decision on appeals of consistency 
                            determination.
Sec. 214. Outer Continental Shelf provisions.
Sec. 215. Office of Federal Energy Project Coordination.
Sec. 216. Federal onshore oil and gas leasing and permitting practices.
Sec. 217. Management of Federal oil and gas leasing programs.
Sec. 218. Consultation regarding oil and gas leasing on public land.
Sec. 219. Pilot project to improve Federal permit coordination.
Sec. 220. Deadline for consideration of applications for permits.
                    TITLE III--ENERGY INFRASTRUCTURE

Sec. 301. Exportation and importation of natural gas.
Sec. 302. Exportation and importation of natural gas for offshore 
                            facilities.
Sec. 303. Natural gas pipeline infrastructure.
Sec. 304. Natural gas storage facilities.
Sec. 305. Backup fuel capability study.

           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

SEC. 101. PUBLIC EDUCATION AND CONSERVATION INITIATIVE.

    (a) In General.--The Secretary of Energy shall carry out a 
comprehensive national program, including advertising and media 
awareness, to educate consumers and other persons with respect to--
            (1) the need to reduce consumption of electricity and 
        natural gas during the 4-year period beginning on the date of 
        enactment of this Act;
            (2) the costs and benefits of reducing consumption of 
        electricity and natural gas;
            (3) methods for reducing consumption of electricity and 
        natural gas, including the significant benefits of maintaining 
        and repairing heating and cooling ducts and equipment, 
        weatherization technologies, and energy smart purchases;
            (4) the importance of tire maintenance to conserving 
        gasoline;
            (5) the relationship between gasoline prices and natural 
        gas prices; and
            (6) the importance of low energy costs to preserving and 
        keeping manufacturing jobs in the United States and maintaining 
        economic growth.
    (b) Inclusion.--The program described in subsection (a) shall 
include--
            (1) information regarding the need to reduce consumption of 
        electricity and natural gas during peak use periods;
            (2) information regarding practicable, actionable measures 
        consumers can carry out to reduce the demand for natural gas, 
        oil, and electricity.
            (3) if practicable, 1 or more examples of public education 
        described in the State of California Executive Order D-18-01; 
        and
            (4) if practicable, collaboration between Federal, State, 
        and local government officials and local utilities.
    (c) Report.--Not later than July 1, 2009, the Secretary of Energy 
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 2007 through 2010.

SEC. 102. REDUCING RESIDENTIAL DEMAND; APPLIANCE AND EQUIPMENT 
              EFFICIENCY STANDARDS.

    (a) Energy Conservation Standards for Additional Products.--
            (1) Definitions.--Section 321 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6291) is amended--
                    (A) in paragraph (30)(S)--
                            (i) by inserting ``(i)'' after ``(S)''; and
                            (ii) by adding at the end the following:
                    ``(ii) The term `medium base fluorescent lamp' does 
                not include--
                            ``(I) any lamp specifically designed to be 
                        used for special purpose applications and that 
                        is unlikely to be used in general purpose 
                        applications such as those 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 
                        designed for special applications and is 
                        unlikely to be used in general purpose 
                        applications.''; and
                    (B) by adding at the end the following:
    ``(32) The term `battery charger' means a device that charges 
batteries for consumer products, including a battery charger embedded 
in another consumer product.
    ``(33) The term `external power supply' means an external power 
supply circuit that is used to convert household electric current into 
either DC current or lower-voltage alternating current to operate a 
consumer product.
    ``(34) 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.
    ``(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, with the 
        highest voltage tap equaling at least 20 percent more than the 
        lowest voltage tap;
            ``(ii) a transformer (such as those commonly known as a 
        drive transformer, rectifier transformer, auto-transformer, 
        uninterruptible power system transformer, impedance 
        transformer, regulating transformer, sealed or nonventilating 
        transformer, machine tool transformer, welding transformer, 
        grounding transformer, or testing transformer) that is designed 
        to be used in a special purpose application and is unlikely to 
        be used in a general purpose application; 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 a 
                general purpose application; and
                    ``(III) the application of standards to the 
                transformer would not result in significant energy 
                savings.
    ``(36) 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.
    ``(37) The term `standby mode' means the lowest power consumption 
mode that--
            ``(A) cannot be switched off or influenced by the user; and
            ``(B) may persist for an indefinite time when an appliance 
        is connected to the main electricity supply and used in 
        accordance with the instructions of the manufacturer, as 
        defined on an individual product basis by the Secretary.
    ``(38) The term `torchiere' means a portable electric lamp with a 
reflector bowl that directs light upward so as to give indirect 
illumination.
    ``(39) The term `traffic signal module' means a standard 8-inch 
(200mm) or 12-inch (300mm) traffic signal indication, consisting of a 
light source, a lens, and all other parts necessary for operation, that 
communicates movement messages to drivers through red, amber, and green 
colors.
    ``(40) The term `pedestrian module' means a light signal used to 
convey movement information to pedestrians.
    ``(41) 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.
    ``(42) The term `unit heater' means a self-contained fan-type 
heater designed to be installed within the heated space, except that 
the term does not include a warm-air furnace.
    ``(43) The term `ceiling fan' means a nonportable device that is 
suspended from a ceiling for circulating air via the rotation of fan 
blades.
    ``(44) The term `ceiling fan light kit' means equipment designed to 
provide light from a ceiling fan that can be--
            ``(A) integral, such that the equipment is attached to the 
        ceiling fan prior to the time of retail sale; or
            ``(B) attachable, such that at the time of retail sale the 
        equipment is not physically attached to the ceiling fan, but 
        may be included inside the ceiling fan package at the time of 
        sale or sold separately for subsequent attachment to the fan.
    ``(45) 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.
    ``(46)(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 subsection (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.
    ``(47) The term `digital television adapter' means a commercially-
available electronic product the sole purpose of which is to convert 
digital video broadcast signals to analog National Television Standards 
Committee video signals for use by a television or video cassette 
recorder.
    ``(48)(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 per square centimeter.
    ``(B) The term `high intensity discharge lamp' includes mercury 
vapor, metal halide, and high-pressure sodium lamps.
    ``(49)(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 Pascals (approximately 1 asynchronous transfer mode).
    ``(B) The term `mercury vapor lamp' includes clear, phosphor-
coated, and self-ballasted lamps.
    ``(50) The term `cold climate State' means a State that experiences 
not less than 5,000 long-term population-weighted average heating 
degree days, as determined by the National Oceanic and Atmospheric 
Administration.''.
            (2) Test procedures.--Section 323 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6293) is amended--
                    (A) 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 those test procedures.
    ``(C) For purposes of section 346(a), those test procedures shall 
be considered to be 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 be technologically feasible and economically justified, and would 
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 used under the August 9, 2001, 
version of the Energy Star program of the Environmental Protection 
Agency and Department of Energy for compact fluorescent lamps.
    ``(B)(i) Except as provided in clause (ii), covered products shall 
meet all test requirements for regulated parameters established under 
section 325(bb).
    ``(ii) Covered products may be marketed prior to completion of lamp 
life and lumen maintenance at 40 percent of rated life testing provided 
manufacturers document engineering predictions and analysis that 
support expected attainment of lumen maintenance at 40 percent rated 
life and lamp life time.
    ``(13) Air movement test procedures for ceiling fans shall be based 
on the test procedure contained in the Energy Star Program Requirements 
for Residential Ceiling Fans, version 2.0, developed by the 
Environmental Protection Agency, unless, pursuant to this section, the 
Secretary promulgates an alternative test procedure.
    ``(14) 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.
    ``(15) 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 
Prerinse Spray Valves.'
    ``(16) The test procedure for digital television adapters shall be 
based on the International Electrotechnical Commissions Standard 
62087:2002(E), entitled `Methods of Measurement for the Power 
Consumption of Audio, Video, and Related Equipment'.
    ``(17) The test procedure for refrigerated bottled or canned 
beverage vending machines shall be based on 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
                    (B) by adding at the end the following:
    ``(f)(1) Additional Testing Requirements.--Not later than 2 years 
after the date of enactment of this subsection, the Secretary shall 
prescribe testing requirements for any product for which--
            ``(A) a standard is provided under the Natural Gas Price 
        Reduction Act of 2005; and
            ``(B) there was no testing requirement before the date of 
        enactment of that Act.
    ``(2) The testing requirements under paragraph (1) shall be based 
on test procedures used in industry to the maximum extent practicable 
and reasonable.''.
            (3) New Labeling.--Section 324(a)(2) of the Energy Policy 
        Act 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 existence on the date of enactment of this 
        subparagraph in assisting consumers in making purchasing 
        decisions and improving energy efficiency; and
            ``(II) changes to the labeling rules that would improve the 
        effectiveness of consumer product labels.
    ``(ii) The rulemaking shall be completed not later than 2 years 
after the date of enactment of this subparagraph.''.
            (4) New standards.--Section 325 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6295) is amended--
                    (A) in subsection (o), by adding at the end the 
                following:
    ``(5)(A) Notwithstanding any other provision in this section, the 
Secretary may set 2 standards for space heating and air conditioning 
equipment by dividing the United States into 2 climate zones to achieve 
the maximum level of energy savings that are technically feasible and 
economically justified.
    ``(B) The climate zone boundaries described in subparagraph (A)--
            ``(i) shall follow State borders; and
            ``(ii) shall include only contiguous States.
    ``(C) In determining whether to set 2 standards as described in 
subparagraph (A), the Secretary shall consider all factors described in 
paragraphs (1) through (4).
    ``(D) If the Secretary sets 2 standards as described in 
subparagraph (A), it shall be illegal to transport noncomplying 
products into a State for retail sale or installation in that State.
    ``(6) The Secretary may set more than 1 efficiency standard for 
products that serve more than 1 major function by setting 1 standard 
for each major function.''; and
                    (B) by adding at the end the following:
    ``(u) Battery Charger and External Power Supply Electric Energy 
Consumption.--(1)(A)(i) Not later than 18 months after the date of 
enactment of this subsection, the Secretary shall prescribe by notice 
and comment, definitions and test procedures for the power use of 
battery chargers and external power supplies.
    ``(ii) In establishing the test procedures, the Secretary shall 
consider, among other factors, definitions and test procedures used for 
measuring energy consumption in standby mode and other modes and assess 
the current and projected future market for battery chargers and 
external power supplies.
    ``(iii) The assessment shall include estimates of the significance 
of potential energy savings from technical improvements to the products 
and suggested product classes for standards.
    ``(iv) Not later than the end of the time period referred to in 
clause (i), the Secretary shall hold a scoping workshop to discuss and 
receive comments on plans for developing energy conservation standards 
for energy use for these products.
    ``(B)(i) Not later than 3 years after the date of enactment of this 
subsection, the Secretary shall promulgate a final rule that determines 
whether energy conservation standards shall be issued for battery 
chargers and external power supplies or classes thereof.
    ``(ii) For each product class, any such standards 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) will result in significant overall annual energy 
        savings, considering both standby mode and other operating 
        modes.
    ``(2) In determining pursuant to section 323 whether test 
procedures and energy conservation standards pursuant to this section 
should be revised, the Secretary shall consider, for covered products 
that are major sources of standby mode energy consumption, whether to 
incorporate standby mode into such test procedures and energy 
conservation standards, taking into account, among other relevant 
factors, standby mode power consumption compared to overall product 
energy consumption.
    ``(3) The Secretary shall not propose a standard under this section 
unless the Secretary has issued applicable test procedures for each 
product pursuant to section 323.
    ``(4) Any standard issued under this subsection shall be applicable 
to products manufactured or imported on or after the date that is 3 
years after the date of issuance.
    ``(5) The Secretary and the Administrator shall collaborate and 
develop programs, including Energy Star Programs and other voluntary 
industry agreements or codes of conduct, that are designed to reduce 
standby mode energy use.
    ``(v) Vending Machines.--(1) Not later than 36 months after the 
date of enactment of this subsection, the Secretary shall prescribe, by 
rule, energy conservation standards for refrigerated bottled or canned 
beverage vending machines.
    ``(2) In establishing standards under this subsection, the 
Secretary shall use the criteria and procedures described in 
subsections (o) and (p).
    ``(3) Any standard prescribed under this subsection shall apply to 
products manufactured on or after the date that is 3 years after the 
date of publication of a final rule establishing the standard.
    ``(w) Illuminated Exit Signs.--Illuminated exit signs 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.
    ``(x) Torchieres.--Torchieres 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.
    ``(y) Low Voltage Dry-Type Distribution Transformers.--The 
efficiency of low voltage dry-type distribution transformers 
manufactured on or after January 1, 2006, 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).
    ``(z) Traffic Signal Modules.--(1) Traffic signal modules 
manufactured on or after January 1, 2006, shall--
            ``(A) 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
            ``(B) be installed with compatible, electrically connected 
        signal control interface devices and conflict monitoring 
        systems.
    ``(2) Pedestrian modules manufactured on or after January 1, 2006, 
shall meet the performance requirements adopted by the California 
Energy Commission on December 15, 2004.
    ``(aa) Unit Heaters.--Unit heaters manufactured on or after the 
date that is 3 years after the date of enactment of this subsection 
shall be equipped with an intermittent ignition device and shall have 
either power venting or an automatic flue damper.
    ``(bb) Medium Base Compact Fluorescent Lamps.--(1) Bare lamp and 
covered lamp (no reflector) medium base compact fluorescent lamps 
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--
            ``(A) color quality (CRI);
            ``(B) power factor;
            ``(C) operating frequency; and
            ``(D) 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, revise the requirements of this 
subsection or establish other requirements considering energy savings, 
cost effectiveness, and consumer satisfaction.
    ``(cc) Ceiling Fans and Ceiling Fan Light Kits.--(1)(A) All ceiling 
fans manufactured on or after January 1, 2007, shall have the following 
features:
            ``(i) Lighting controls separate from fan speed controls.
            ``(ii) Adjustable speed controls (either more than 1 speed 
        or variable speed).
            ``(iii) The capability of reversible fan action, except for 
        fans sold for industrial applications, outdoor applications, 
        and where safety standards would be violated by the use of the 
        reversible mode.
    ``(B) The Secretary may promulgate regulations to define in greater 
detail the exceptions provided under subparagraph (A)(iii) but may not 
substantively expand the exceptions.
    ``(2) Ceiling fan light kits manufactured on or after January 1, 
2007, shall--
            ``(A) meet the Energy Star Program Requirements for 
        Residential Light Fixtures, version 3.1, issued by the 
        Environmental Protection Agency, and be packaged with lamps to 
        fill all sockets;
            ``(B) be packaged with screw-based compact fluorescent 
        lamps to fill all sockets and meet the Energy Star Program 
        Requirements for Compact Fluorescent Lamps, version 3.0, issued 
        by the Department of Energy; or
            ``(C) use and be packaged with light sources other than 
        compact fluorescent lamps that meet the minimum efficacy 
        requirements, as measured in lumens per watt, of the Energy 
        Star Program Requirements for Compact Fluorescent Lamps, 
        version 3.0, issued by the Department of Energy.
    ``(3)(A) Notwithstanding any provision of this Act, if the 
requirements of subsections (o) and (p) are met, the Secretary may 
consider and prescribe energy efficiency or energy use standards for 
electricity used by ceiling fans to circulate air in a room.
    ``(B) If the Secretary sets the standards, the Secretary shall 
consider--
            ``(i) exempting or setting different standards for certain 
        product classes for which the primary standards are not 
        technically feasible or economically justified; and
            ``(ii) establishing separate exempted product classes for 
        highly decorative fans for which air movement performance is a 
        secondary design feature.
    ``(C) Any air movement standard prescribed under this subsection 
shall apply to products manufactured on or after the date that is 3 
years after the date of publication of a final rule establishing the 
standard.
    ``(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)
    4 25..........................................                1.00 
    > 25 - $35....................................                1.20 
    > 35 - $54....................................                1.30 
    > 54 - < 75...................................                1.50 
    4 75..........................................                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 standards established under paragraph (1) should 
be amended.
    ``(B) The final rule shall contain any amendment by the Secretary 
and shall provide that the amendment shall apply 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)
    4 25..........................................                1.20 
    > 25 - $35....................................                1.30 
    > 35 - $45....................................                1.40 
    > 45 - $54....................................                1.50 
    > 54 - < 75...................................                1.60 
    4 75..........................................                 2.5.
    ``(ee) Commercial Prerinse Spray Valves.--Commercial prerinse spray 
valves manufactured on or after January 1, 2006, shall have a flow rate 
less than or equal to 1.6 gallons per minute.
    ``(ff) Digital Television Adapters.--Digital television adapters 
manufactured on or after January 1, 2007, shall use--
            ``(A) not more than 1 watt while in scan true bearing 
        standby-passive mode; and
            ``(B) not more than 8 watts while in scan true bearing on-
        mode.
    ``(gg) High-intensity Discharge Lamps.--High-intensity discharge 
lamp ballasts shall not be designed or marketed for operating a mercury 
vapor lamp.
    ``(hh) Standards for Certain Furnaces.--(1) Notwithstanding 
subsection (f) and except as provided in paragraphs (2) and (3), a 
furnace (including a furnace designed solely for installation in a 
mobile home) manufactured 3 or more years after the date of enactment 
of this subsection shall have an annual fuel utilization efficiency 
of--
            ``(A) for natural gas- and propane-fired equipment, not 
        less than 80 percent; and
            ``(B) for oil-fired equipment not less than 83 percent.
    ``(2)(A) Notwithstanding subsection (f) and except as provided in 
paragraph (3)--
            ``(i) a boiler (other than a gas steam boiler) manufactured 
        3 or more years after the date of enactment of this subsection 
        shall have an annual fuel utilization efficiency of not less 
        than 84 percent; and
            ``(ii) a gas steam boiler manufactured 3 or more years 
        after the date of enactment of this subsection shall have an 
        annual fuel utilization efficiency of not less than 82 percent.
    ``(B)(i) Notwithstanding subsection (f), if, after the date of 
enactment of this subsection, the Governor of a cold climate State 
files with the Secretary a notice that the State has implemented a 
requirement for an annual fuel utilization efficiency of not less than 
90 percent for furnaces (other than boilers and furnaces designed 
solely for installation in a mobile home or boiler), the annual fuel 
utilization efficiency of a furnace sold in that State shall be not 
less than 90 percent.
    ``(ii) If a State described in clause (i) fails to implement or 
reasonably enforce (as determined by the Secretary) annual fuel 
utilization efficiency in accordance with that clause, the annual fuel 
use efficiency for furnaces (other than boilers and furnaces designed 
solely for installation in a mobile home or boiler) in that State shall 
be the fuel utilization efficiency established under paragraph (1).
    ``(3)(i) Not later than 5 years after the date on which a standard 
for a product under this subsection takes effect, the Secretary shall 
promulgate a final rule to determine whether that standard should be 
amended.
    ``(ii) If the Secretary determines that a standard under clause (i) 
should be amended--
            ``(I) the final rule promulgated pursuant to clause (i) 
        shall contain the new standard; and
            ``(II) the new standard shall apply to any product 
        manufactured after the date that is 5 years after the date on 
        which the final rule is promulgated.''.
    ``(ii) Application Date.--Section 327 applies--
            ``(1) to products for which standards are to be established 
        under subsections (l), (u), and (v) beginning on the date on 
        which a final rule is promulgated by the Secretary of Energy, 
        except that any State or local standards prescribed or enacted 
        for any such product prior to the date on which the final rule 
        is issued shall not be preempted until the standard established 
        under subsection (l), (u), or (v) for that product takes 
        effect; and
            ``(2) to products for which standards are established under 
        subsections (w) through (ff) on the date of enactment of those 
        subsections, except that any State or local standards 
        prescribed or enacted prior to the date of enactment of those 
        subsections shall not be preempted until the standards 
        established under subsections (w) through (ff) take effect.''.
            (5) Residential furnace fans.--Section 325(f)(3) of the 
        Energy Policy and Conservation Act (42 U.S.C. 6295(f)(3)) is 
        amended by adding at the end the following:
    ``(D) Notwithstanding any provision of this Act, the Secretary may 
consider, and prescribe, if the requirements of subsection (o) are met, 
energy efficiency or energy use standards for electricity used for 
purposes of circulating air through duct work.''.
            (6) General rule of preemption.--Section 327(c) of the 
        Energy Policy and Conservation Act (42 U.S.C. 6297(c)) is 
        amended--
                    (A) in paragraph (5), by striking ``or'' at the 
                end;
                    (B) in paragraph (6), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(7) is a regulation concerning standards for commercial 
        prerinse spray valves adopted by the California Energy 
        Commission before January 1, 2005, or is an amendment to such a 
        regulation developed to align California regulations with 
        changes in American Society for Testing and Materials Standard 
        F2324.''.
    (b) Energy Labeling.--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) The Secretary or the Commission, as appropriate, may, for 
covered products referred to in subsections (u) through (ff) of section 
325, prescribe, by rule, pursuant to this section, labeling 
requirements for the products after a test procedure has been set 
pursuant to section 323.
    ``(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.
    ``(6)(A) Not later than July 1, 2006, the Commission shall 
prescribe by rule, pursuant to this section, labeling requirements for 
the electricity used by ceiling fans to circulate air in a room.
    ``(B) The requirements shall be based on the test procedure and 
labeling requirements contained in the Energy Star Program Requirements 
for Residential Ceiling Fans, version 2.0, issued by the Environmental 
Protection Agency, except that third party testing and other non-
labeling requirements shall not be promulgated unless the Commission 
determines the requirements are necessary to achieve compliance.
    ``(C) The rule shall apply to products manufactured after the later 
of--
            ``(i) January 1, 2007; or
            ``(ii) the date that is 60 days after the final rule is 
        prescribed.''.
    (c) Commercial Package Air Conditioning and Heating Equipment.--
            (1) Definitions.--Section 340 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6311) is amended--
                    (A) in paragraph (1)--
                            (i) by redesignating subparagraphs (D) 
                        through (G) as subparagraphs (E) through (H), 
                        respectively; and
                            (ii) by inserting after subparagraph (C) 
                        the following:
                    ``(D) Very large commercial package air 
                conditioning and heating equipment.'';
                    (B) in paragraph (2)(B), by striking ``small and 
                large'';
                    (C) 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 at or above 
        135,000 Btu per hour and 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 at or 
        above 240,000 Btu per hour and below 760,000 Btu per hour 
        (cooling capacity).'';
                    (D) by redesignating paragraphs (10) through (18) 
                as paragraphs (9) through (17), respectively; and
                    (E) in paragraph (10) (as redesignated by 
                subparagraph (D)), by inserting ``, except for gas unit 
                heaters and gas duct furnaces'' after ``furnaces''.
            (2) Standards.--Section 342(a) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6313(a)) is amended--
                    (A) in the subsection heading, by striking ``Small 
                and Large'' and inserting ``Small, Large, and Very 
                Large'';
                    (B) in paragraph (1), by inserting ``but before 
                January 1, 2010,'' after ``January 1, 1994,'';
                    (C) in paragraph (2), by inserting ``but before 
                January 1, 2010,'' after ``January 1, 1995,'';
                    (D) in paragraph (4), by inserting ``, except for a 
                gas unit heater or gas duct furnace,'' after 
                ``boiler'';
                    (E) in paragraph (6)--
                            (i) 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 would result in significant additional conservation 
of energy and is technologically feasible and economically justified.
    ``(iii) This subparagraph does not apply to gas-fired warm-air 
furnaces, gas-fired package boilers, storage water heaters, gas unit 
heaters, or gas duct furnaces manufactured 5 or more years after the 
date of enactment of the Natural Gas Price Reduction Act of 2005.''; 
and
                            (ii) 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
                    (F) by adding at the end the following:
    ``(7) Each 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) Each 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) Each 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).
    ``(10) Notwithstanding paragraph (4) and except as provided in 
paragraph (14), the minimum thermal efficiency at the maximum rated 
capacity of a gas-fired warm-air furnace with the capacity of 225,000 
Btu per hour or more manufactured 4 or more years after the date of 
enactment of this paragraph shall be 79.5 percent.
    ``(11) Notwithstanding paragraph (4) and except as provided in 
paragraph (14), the minimum thermal efficiency at the maximum rated 
capacity of a gas-fired package boiler with the capacity of 300,000 Btu 
per hour or more manufactured 4 or more years after the date of 
enactment of this paragraph shall be 79 percent.
    ``(12) Notwithstanding paragraph (5) (excluding paragraph (5)(G)), 
and except as provided in paragraph (14)--
            ``(A) the maximum standby loss (expressed as a percent per 
        hour) of a gas-fired storage water heater shall be 1.30 
        (expressed as a measurement of storage volume in gallons); and
            ``(B) the minimal thermal efficiency of a gas-fired storage 
        water heater shall be 82 percent.
    ``(13)(A) Not later than 5 years after the date on which a standard 
for a product under paragraph (10), (11), or (12) takes effect, the 
Secretary shall promulgate a final rule to determine whether the 
standard for that product should be amended.
    ``(B) If the Secretary determines that a standard should be amended 
under subparagraph (A)--
            ``(i) the final rule promulgated pursuant to subparagraph 
        (A) shall contain the new standard; and
            ``(ii) the new standard shall apply to any product 
        manufactured 4 or more years after the date on which the final 
        rule is promulgated.''.
            (3) Test procedures.--Section 343 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6314) is amended in subsections 
        (a)(4) and (d)(1), by inserting ``very large commercial package 
        air conditioning and heating equipment,'' after ``large 
        commercial package air conditioning and heating equipment,'' 
        each place it appears.
            (4) Labeling.--Section 344(e) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6315(e)) is amended in the first 
        and second sentences, by inserting ``very large commercial 
        package air conditioning and heating equipment,'' after ``large 
        commercial package air conditioning and heating equipment,'' 
        each place it appears.
            (5) Administration, penalties, enforcement, and 
        preemption.--Section 345 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6316) is amended by adding at the end the 
        following:
    ``(d)(1) Except as provided in paragraphs (2) and (3), section 327 
shall apply with respect to the equipment specified in section 
340(1)(D) 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 prescribed or enacted prior to 
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.
    ``(3) If the California Energy Commission adopts, not later than 
March 31, 2005, a regulation concerning the energy efficiency or energy 
use of the equipment specified in section 340(1)(D), the regulation 
shall be effective until, and shall no longer be effective after, the 
standards established under section 342(a)(9) take effect on January 1, 
2010.''.
            (6) Technical amendment.--Section 345(b)(1) of the Energy 
        Policy and Conservation Act (42 U.S.C. 6316(b)(1)) is amended 
        in the first sentence by striking ``part B'' and inserting 
        ``part A''.
    (d) Commercial Refrigerators, Freezers, and Refrigerator-
Freezers.--
            (1) Definitions.--Section 340 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6311) (as amended by subsection 
        (c)(1)) is amended--
                    (A) in paragraph (1)--
                            (i) by redesignating subparagraph (H) as 
                        subparagraph (I); and
                            (ii) by inserting after subparagraph (G) 
                        the following:
            ``(H) Commercial refrigerators, freezers, and refrigerator-
        freezers.''; and
                    (B) by adding at the end the following:
            ``(18)(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) operates at a chilled, frozen, combination 
                chilled and frozen, or variable temperature;
                    ``(iii) displays or stores merchandise and other 
                perishable materials horizontally, semivertically, or 
                vertically;
                    ``(iv) has transparent or solid doors, sliding or 
                hinged doors, a combination of hinged, sliding, 
                transparent, or solid doors, or no doors;
                    ``(v) is designed for pull-down temperature 
                applications or holding temperature applications; and
                    ``(vi) 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.''.
            (2) Standards.--
                    (A) In general.--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 the meanings 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 meet the following standard levels in kilowatt hours per day:

 
 
 
  ``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 manufactured on or 
after January 1, 2010, shall meet the following standard levels in 
kilowatt hours per day: Refrigerators with transparent doors 0.126 V + 
3.51.''.
                    (B) Establishment of standards.--
                            (i) Specified types.--Not later than 
                        January 1, 2009, the Secretary of Energy may 
                        prescribe, 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.
                            (ii) Other types.--Not later than January 
                        1, 2009, the Secretary may prescribe, by rule, 
                        standard levels for other types of commercial 
                        refrigerators, freezers, and refrigerator-
                        freezers not covered by clause (i) or section 
                        342(c) of the Energy Policy and Conservation 
                        Act (as added by subparagraph (A)), with the 
                        standard levels effective for equipment 
                        manufactured on or after January 1, 2012.
                    (C) Revisions to standards.--
                            (i) Initial revision of standards.--
                                    (I) In general.--Not later than 
                                January 1, 2013, the Secretary shall 
                                publish a final rule to determine if 
                                the standards established under section 
                                342(c) of the Energy Policy and 
                                Conservation Act (as added by 
                                subparagraph (A)) should be amended.
                                    (II) Application date.--The rule 
                                shall provide that any amended 
                                standards shall apply to products 
                                manufactured on or after the date that 
                                is 3 years after the final amended 
                                standard is published unless the 
                                Secretary determines, by rule, that 3 
                                years is inadequate, in which case the 
                                Secretary may establish an application 
                                date for products manufactured not 
                                later than 5 years after the final 
                                amended standard is published.
                            (ii) Subsequent revision of standards.--
                                    (I) In general.--Not later than 3 
                                years after the amended final standard 
                                referred to in subparagraph (A) takes 
                                effect or after the Secretary publishes 
                                a final rule determining that the 
                                standard should not be amended, the 
                                Secretary shall publish a final rule to 
                                determine if the standards established 
                                under section 342(c) of the Energy 
                                Policy and Conservation Act (as added 
                                by subparagraph (A)) should be amended.
                                    (II) Application date.--The rule 
                                shall provide that any amended 
                                standards shall apply to products 
                                manufactured on or after the date that 
                                is 3 years after the final amended 
                                standard is published unless the 
                                Secretary determines, by rule, that 3 
                                years is inadequate, in which case the 
                                Secretary may establish an application 
                                date for products manufactured not 
                                later than 5 years after the final 
                                amended standard is published.
            (3) Test procedures.--Section 343 of the Energy Policy and 
        Conservation Act (42 U.S.C. 6314) is amended--
                    (A) in subsection (a), 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 the test procedures 
determined by the Secretary to be generally accepted industry testing 
procedures or 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 
subsection 342(c)(1), the initial test procedures shall be ASHRAE 117 
that is in effect on January 1, 2005.
    ``(B) 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 an 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 prescribe a rule, that meets the 
requirements of paragraphs (2) and (3), to establish the appropriate 
rating temperatures for the other products for which standards will be 
established under subsection 342(c)(2).
    ``(D) In establishing the appropriate test temperatures under this 
subparagraph, the Secretary shall follow the procedures and meet the 
requirements specified in section 323(e).
    ``(E)(i) Not later than 180 days after the publication of a 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 be 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 described in paragraphs (2) 
and (3).
    ``(ii) If the Secretary needs more than 180 days to review and 
adopt the amended test procedure or rating procedure, the Secretary 
shall publish a notice in the Federal Register stating the intent of 
the Secretary to take up to an additional 1 year before the amended 
test procedure or rating procedure would become effective.
    ``(F)(i) If another test procedure besides ASHRAE 117 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 ASHRAE 117; and
            ``(II) based on that review, adopt 1 of those test 
        procedures for subsequent use in the standards program.
    ``(ii) If a new test procedure is adopted--
            ``(I) section 323(e) shall apply; and
            ``(II) subparagraph (B) shall apply to the adopted test 
        procedure.''; and
                    (B) in subsection (d)(1), by striking ``and unfired 
                hot water storage tanks,'' and inserting: ``unfired hot 
                water storage tanks, and commercial refrigerators, 
                freezers, and refrigerator-freezers,''.
            (4) Labeling.--Section 344(e) of the Energy Policy and 
        Conservation Act (42 U.S.C. 6315(e)) is amended by striking 
        ``and unfired hot water storage tanks'' each place it appears 
        and inserting ``unfired hot water storage tanks, and commercial 
        refrigerators, freezers, and refrigerator-freezers''.
            (5) Administration, penalties, enforcement, and 
        preemption.--Section 345 of the Energy Policy and Conservation 
        Act (42 U.S.C. 6316) (as amended by subsection (c)(5)) is 
        amended by adding at the end the following:
    ``(e)(1)(A) The provisions of 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 equipment specified in 
section 340(1)(G) to the same extent and in the same manner as those 
provisions apply under part A.
    ``(B) In applying those provisions to that equipment, paragraphs 
(1), (2), (3), and (4) of subsection (a) shall apply.
    ``(2)(A)(i) The provisions of section 327 shall apply with respect 
to the equipment specified in section 340(1)(G) that have standards 
established under section 342(c)(2) 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 prescribed 
or enacted before the date of enactment of this subsection shall not be 
preempted until the standards established under section 342(c) take 
effect.
    ``(ii) In applying those provisions to that equipment, paragraphs 
(1), (2), and (3) of subsection (a) shall apply.
    ``(B) Notwithstanding subparagraph (A), if the California Energy 
Commission adopts, not later than March 31, 2005, a regulation 
concerning the energy efficiency or energy use of the equipment 
specified in section 340(1)(G) that have standards established under 
section 342(c)(2), those standards shall be effective until, and shall 
no longer be effective after, the standards established under section 
342(c)(2) take effect on January 1, 2010.
    ``(3)(A) The provisions of section 327 shall apply with respect to 
the equipment specified in 340(1)(G) that have standards established 
under section 342(c)(3) to the same extent and in the same manner as 
they apply under part A on the date of publication of the final rule by 
the Secretary, except that any State or local standard prescribed or 
enacted before the date of publication of the final rule by the 
Secretary shall not be preempted until the standards take effect.
    ``(B) In applying those provisions for the purpose of that 
equipment, paragraphs (1), (2), and (3) of subsection (a) shall apply.
    ``(4) If the Secretary does not issue a final rule for a specific 
type of equipment specified in section 340(1)(G) within the time frame 
specified in section 342(c)(3), the provisions of subsections (b) and 
(c) of section 327 shall no longer apply to that specific type of 
equipment beginning on the date that is 2 years after the scheduled 
date for a final rule and until the Secretary publishes a final rule 
covering the specific type of equipment, at which time those provisions 
shall apply to the specific type of equipment.
    ``(5)(A) In the case of any commercial refrigerator, freezer, and 
refrigerator-freezer to which standards are applicable under section 
342(c)(2), the Secretary shall require manufacturers to certify, 
through an independent testing or certification program nationally 
recognized in the United States, that the commercial refrigerator, 
freezer, and refrigerator-freezer meets the applicable standard.
    ``(B) The Secretary shall, to the maximum extent practicable, 
encourage the establishment of at least 2 such 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.''.

SEC. 103. DEPLOYMENT FOR DISTRIBUTED GENERATION, SOLAR ENERGY 
              TECHNOLOGIES, AND BIOMASS.

    (a) Distributed Power Systems.--
            (1) Requirement.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Energy shall develop 
        and transmit to Congress a strategy for a comprehensive 
        research, development, demonstration, and commercial 
        application program to develop distributed power systems that 
        use non-intermittent electric power generation technologies 
        suitable for use in a distributed power system.
            (2) Contents.--The strategy shall--
                    (A) identify the needs best met with such 
                distributed power systems and the technological 
                barriers to the use of the systems;
                    (B) provide for the development of methods to 
                design, test, integrate into systems, and operate the 
                distributed power systems;
                    (C) include, as appropriate, research, development, 
                demonstration, and commercial application on related 
                technologies needed for the adoption of the distributed 
                power systems, including energy storage devices and 
                environmental control technologies;
                    (D) include research, development, demonstration, 
                and commercial application of interconnection 
                technologies for communications and controls of 
                distributed generation architectures, particularly 
                technologies promoting real-time response to power 
                market information and physical conditions on the 
                electrical grid; and
                    (E) describe how activities under the strategy will 
                be integrated with other research, development, 
                demonstration, and commercial application activities 
                supported by the Department of Energy related to 
                electric power technologies.
    (b) Micro-Cogeneration Energy Technology.--The Secretary of Energy 
shall make competitive, merit-based grants to consortia for the 
development of micro-cogeneration energy technology that explore--
            (1) the use of small-scale combined heat and power in 
        residential heating appliances; and
            (2) the use of excess power to operate other appliances 
        within the residence and supply excess generated power to the 
        power grid.
    (c) Solar Energy Technologies Demonstration Program.--
            (1) In general.--The Secretary of Energy shall conduct a 
        program under which the Secretary makes grants to State energy 
        offices and other appropriate State entities, as determined by 
        the Secretary, to provide the Federal share of the cost of 
        demonstrating the use of advanced photovoltaic, solar water 
        heating, and hybrid solar lighting technologies to generate and 
        displace electricity.
            (2) Federal share.--The Federal share of the cost of an 
        activity described in paragraph (7) shall be not more than 40 
        percent, as determined by the Secretary.
            (3) Proposals.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                solicit from State energy offices and other appropriate 
                State entities, as determined by the Secretary, 
                proposals to receive grants under this subsection.
                    (B) Contents.--A proposal under this paragraph 
                shall contain provisions that--
                            (i) meet the cost-sharing requirement of 
                        this subsection;
                            (ii) maximize the quantity of photovoltaic, 
                        solar water heating, and hybrid solar lighting 
                        technologies installed for each Federal dollar 
                        expended under this subsection, including by 
                        increasing the non-Federal share of the cost of 
                        an activity under this subsection;
                            (iii) measure and verify the output of a 
                        photovoltaic, solar water heating, or hybrid 
                        solar lighting technology under this subsection 
                        for a period of not less than 20 years after 
                        the date on which the technology is installed; 
                        and
                            (iv) for each building on which a 
                        photovoltaic, solar water heating, or hybrid 
                        solar lighting technology is installed under 
                        this subsection, require that the building 
                        receive an energy efficiency audit not earlier 
                        than 180 days before the date on which the 
                        technology is installed.
            (4) Preference.--In making a grant under this subsection, 
        the Secretary shall give preference to a State energy office or 
        entity if making a grant to that office or entity--
                    (A) promotes the geographic diversity of 
                demonstration sites, as determined by the Secretary; or
                    (B) limits overhead costs under this subsection, 
                including the administrative costs to the Department of 
                Energy or a State.
            (5) Amounts.--
                    (A) Distribution.--Of the amount of funds made 
                available to provide grants under this subsection for a 
                fiscal year, the Secretary shall use 75 percent of that 
                amount to distribute the grants described in paragraph 
                (1)--
                            (i) to State energy offices or entities 
                        based on the ratio that--
                                    (I) the percentage contribution of 
                                the State of the energy office or 
                                entity to the cost of an activity 
                                described in paragraph (7); bears to
                                    (II) the percentage contribution of 
                                all States to the cost of an activity 
                                described in paragraph (7); and
                            (ii) if a recipient of a grant under this 
                        subsection is a commercial, industrial, or 
                        residential recipient, proportionally to the 
                        use of electricity by the recipient.
                    (B) Remainder of funds.--Of the amount of funds 
                made available to provide grants under this subsection 
                for a fiscal year, the Secretary shall use 25 percent 
                of that amount to distribute the grants described in 
                paragraph (1) to any State energy office or entity the 
                proposal of which the Secretary considers highly likely 
                to encourage widespread adoption of solar energy 
                technologies.
                    (C) Limitation.--The amount of a grant under this 
                subsection shall not exceed $5,000,000.
            (6) Termination.--
                    (A) Individual grants.--If the Secretary determines 
                that the recipient of a grant under this subsection 
                fails to act in accordance with the approved proposal 
                of the recipient, the Secretary--
                            (i) shall take such action as is necessary 
                        to obtain repayment of the Federal share of the 
                        amount of the grant; and
                            (ii) shall not provide any further grants 
                        to that recipient under this subsection.
                    (B) All grants.--Not later than 1 year after the 
                date on which the United States achieves a total 
                installed capacity of 10,000 megawatts (or the 
                equivalent of that capacity) under the program, the 
                Secretary shall not make any further grants under this 
                subsection.
            (7) Use of funds.--A State energy office or other 
        appropriate entity may use a grant provided under paragraph (1) 
        to--
                    (A) demonstrate the commercial application of using 
                a concentrated solar power, advanced photovoltaic, 
                solar water heating, or hybrid solar lighting 
                technology to generate or displace not less than 10 
                kilowatts at a demonstration site;
                    (B) install a photovoltaic, solar water heating, or 
                hybrid solar lighting technology on a public, private, 
                commercial, industrial, or residential demonstration 
                site;
                    (C) monitor an installation described in paragraph 
                (2) to ensure the successful operation, and quantify 
                the results, of the technology; and
                    (D) increase public awareness of the use of 
                advanced photovoltaic, solar water heating, or hybrid 
                solar lighting technology.
            (8) Authorization of appropriations.--There are authorized 
        to be appropriated such sums as are necessary to carry out this 
        subsection.
    (d) Solar Lighting Development Program.--
            (1) Definitions.--In this subsection:
                    (A) Development activity.--The term ``development 
                activity'' includes the development of a technology, 
                material, or manufacturing process required--
                            (i) to collect direct, nondiffuse sunlight;
                            (ii) to transmit or otherwise direct and 
                        distribute sunlight into buildings through any 
                        method (including through optical fibers);
                            (iii) to integrate sunlight with an 
                        electric lighting system in a hybrid 
                        configuration with collocated electric lamps;
                            (iv) to control the spatial, temporal, or 
                        spectral quality of sunlight to improve energy 
                        efficiency, worker productivity, or retail 
                        sales; or
                            (v) to remotely monitor the performance of 
                        a solar energy system through web-based 
                        metering.
                    (B) For-profit participant.--The term ``for-profit 
                participant'' includes the following entities that 
                operate for profit:
                            (i) An organization that manufactures 
                        original equipment for emerging components or 
                        systems used in solar lighting.
                            (ii) A lighting designer.
                            (iii) An illumination or architectural 
                        engineer.
                    (C) Solar lighting.--
                            (i) In general.--The term ``solar 
                        lighting'' means a lighting system that 
                        incorporates sunlight in accordance with 
                        paragraph (2) and offers the flexibility, 
                        convenience, reliability, and control available 
                        in electric-only lighting.
                            (ii) Exclusions.--The term ``solar 
                        lighting'' does not include an architecturally-
                        intrusive product in existence on the date of 
                        enactment of this Act, including--
                                    (I) a skylight;
                                    (II) a lightwell;
                                    (III) a light shelf; or
                                    (IV) a roof monitor.
            (2) Purpose.--The purpose of this subsection is to support 
        the development of advanced solar lighting systems that are--
                    (A) multifunctional;
                    (B) compatible with different electric lamps and 
                light fixtures used for direct, indirect, ambient, 
                task, or accent lighting;
                    (C) reconfigurable;
                    (D) easily added, removed, or modified as lighting 
                needs change;
                    (E) easily integrated with electric lights and 
                controllable to--
                            (i) ensure that disruptions in lighting 
                        quality or quantity do not occur on cloudy days 
                        or at night; and
                            (ii) provide dimming and on/off switching 
                        capabilities;
                    (F) designed to eliminate architectural design and 
                maintenance problems that limit the conventional use of 
                daylighting in most buildings;
                    (G) more efficient than electric lighting systems 
                used in the same lighting applications; and
                    (H) more efficient and cost-efficient than solar 
                generation technologies used in buildings to convert 
                sunlight into electricity and reconvert the sunlight 
                back into electrically-generated light through electric 
                lamps.
            (3) Development activities.--
                    (A) In general.--The Secretary shall conduct a 
                program under which the Secretary makes grants to 
                provide the Federal share of the cost of a development 
                activity under this subsection to solar lighting 
                technology developers, including--
                            (i) for-profit participants;
                            (ii) National Laboratories; and
                            (iii) educational institutions.
                    (B) Federal share.--The Federal share of the cost 
                of a development activity under this subsection shall 
                be not more than 50 percent, as determined by the 
                Secretary.
                    (C) Proposals.--
                            (i) In general.--To receive a grant under 
                        this section, a solar lighting technology 
                        developer shall submit to the Secretary an 
                        application at the time, in the manner, and 
                        containing any information that the Secretary 
                        requires.
                            (ii) Preference.--In making a grant under 
                        this subsection, the Secretary may give 
                        preference to a development activity led by a 
                        for-profit participant.
            (4) National academy of sciences.--
                    (A) In general.--Not later than 2 years after the 
                date of enactment of this Act, the Secretary shall 
                offer to enter into a contract with the National 
                Academy of Sciences to conduct a biannual review of 
                each development activity carried out during the 
                preceding year under this subsection.
                    (B) Inclusions.--The review under this paragraph 
                shall include, for each development activity--
                            (i) an assessment of--
                                    (I) priorities;
                                    (II) technical milestones; and
                                    (III) if appropriate, plans for 
                                technology transfer and any progress 
                                made towards achieving the plans; and
                            (ii) a comparison of the merits of solar 
                        lighting with other practicable uses of solar 
                        energy technologies in a building to reduce the 
                        use by the building of nonrenewable energy.
            (5) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection--
                    (A) for fiscal year 2006, $10,000,000;
                    (B) for fiscal year 2007, $15,000,000;
                    (C) for fiscal year 2008, $20,000,000;
                    (D) for fiscal year 2009, $15,000,000; and
                    (E) for fiscal year 2010, $10,000,000.
    (e) Distributed Energy.--
            (1) In general.--The Secretary shall conduct program under 
        which the Secretary provides grants to eligible consortia (as 
        determined by the Secretary) to provide the Federal share of 
        the cost of developing microcogeneration energy technology.
            (2) Federal share.--The Federal share of the cost of an 
        activity under this subsection shall be not greater than 40 
        percent.
            (3) Use of funds.--
                    (A) In general.--A consortium may use funds 
                provided under this subsection for a project relating 
                to--
                            (i) the use of small-scale combined heat 
                        and power in residential heating appliances; or
                            (ii) the use of excess power to--
                                    (I) operate other appliances in a 
                                residence; and
                                    (II) supply power to a power grid.
                    (B) Inclusions.-- A project under subparagraph (A) 
                shall include the use of--
                            (i) a fuel cell;
                            (ii) a combined heat and power system;
                            (iii) a microturbine;
                            (iv) an advanced natural gas turbine;
                            (v) an advanced internal combustion engine 
                        generator;
                            (vi) an energy storage device;
                            (vi) an interconnection standard, protocol, 
                        or piece of equipment;
                            (vii) ancillary equipment for dispatch and 
                        control; or
                            (ix) any other energy technologies, as 
                        appropriate.
            (4) Report.--Concurrent with the submission by the 
        President of the annual budget request for fiscal year 2007, 
        the Secretary shall submit to Congress a report describing--
                    (A) the goals of the Secretary relating to 
                microcogeneration energy technology projects under this 
                subsection, including cost and energy savings targets 
                for fiscal years 2007 through 2012;
                    (B) progress made during the preceding year toward 
                achieving the goals of the Secretary relating to 
                microcogeneration energy technology; and
                    (C) the results of each project carried out by an 
                eligible consortium under this subsection.
    (f) Bioenergy Programs.--
            (1) In general.--The Secretary shall conduct a program of 
        research, development, and demonstration of commercial 
        applications of cellulosic biomass, including--
                    (A) converting biomass to heat and electricity;
                    (B) converting biomass to liquid fuels;
                    (C) biobased products;
                    (D) the use of integrated biorefineries to produce 
                heat, electricity, liquid fuels, and biobased products;
                    (E) cross-cutting activities on feedstocks and 
                enzymes; and
                    (F) economic analysis of applications of cellulosic 
                biomass.
            (2) Biofuels and biobased products.--In carrying out a 
        program relating to a biofuel or biobased product under 
        paragraph (1), the Secretary, in cooperation with the energy 
        industry, shall develop--
                    (A) advanced biochemical and thermochemical 
                conversion technologies to make high-value biobased 
                chemical feedstocks and products, to substitute for 
                petroleum-based feedstocks and products;
                    (B) biofuels that are price-competitive with 
                gasoline or diesel in--
                            (i) internal combustion engines; or
                            (ii) fuel cell-powered vehicles;
                    (C) biobased products from a variety of feedstocks, 
                including grains, cellulosic biomass, and agricultural 
                byproducts; and
                    (D) advanced biotechnology processes to make 
                biofuels and biobased products, with emphasis on 
                development of biorefinery technologies, including 
                enzyme-based processing technologies.
            (3) Biomass integrated refinery demonstration.--
                    (A) In general.--The Secretary shall conduct a 
                program under which the Secretary provides grants to 
                advanced biorefineries to provide the Federal share of 
                the cost of demonstrating the commercial application of 
                integrated biorefineries.
                    (B) Limitations.--
                            (i) Quantity of grants.--The Secretary 
                        shall provide grants under this paragraph to 
                        not fewer than 5 advanced biorefineries.
                            (ii) Federal share.--The Federal share of 
                        the cost of a demonstration under this 
                        paragraph shall not exceed 40 percent.
                            (iii) Maximum amount.--The Secretary shall 
                        provide not greater than $100,000,000 for a 
                        biorefinery demonstration under this paragraph.
                    (C) Factors.--The Secretary shall select 
                biorefinery demonstrations under this subsection in a 
                manner that supports--
                            (i) the geographic diversity of the 
                        demonstrations;
                            (ii) the demonstration of a wide variety of 
                        cellulosic biomass feedstocks;
                            (iii) the commercial application of biomass 
                        technologies for a variety of uses, including--
                                    (I) liquid transportation fuels;
                                    (II) high-value biobased chemicals;
                                    (III) substitutes for petroleum-
                                based feedstocks and products; and
                                    (IV) energy in the form of 
                                electricity or useful heat; and
                            (iv) the demonstration of the collection 
                        and treatment of a variety of biomass 
                        feedstocks.
                    (D) Proposals.--
                            (i) In general.--To obtain a grant under 
                        this subsection, not later than 180 days after 
                        the date of enactment of this Act, an advanced 
                        biorefinery shall submit to the Secretary a 
                        proposal in the time and in the manner, and 
                        containing any information, that the Secretary 
                        requires.
                            (ii) Consideration.--In making a grant 
                        under this subsection, the Secretary shall 
                        select advanced biorefineries the proposals of 
                        which--
                                    (I) demonstrate that the project of 
                                the biorefinery will operate profitably 
                                without a direct Federal subsidy after 
                                initial construction costs are paid; 
                                and
                                    (II) allow for easy replication of 
                                the biorefinery, as determined by the 
                                Secretary.

SEC. 104. HYDROGEN AND FUEL CELL INITIATIVE.

    (a) Definitions.--In this section:
            (1) Advisory committee.--The term ``Advisory Committee'' 
        means the Hydrogen Technical and Fuel Cell Advisory Committee 
        established by subsection (e)(1).
            (2) Department.--The term ``Department'' means the 
        Department of Energy.
            (3) Fuel cell.--The term ``fuel cell'' means a device that 
        directly converts the chemical energy of a fuel and an oxidant 
        into electricity by an electrochemical process that take place 
        at separate electrodes in the device.
            (4) Infrastructure.--The term ``infrastructure'' means any 
        equipment, system, or facility used to produce, distribute, 
        deliver, or store hydrogen.
            (5) Light duty vehicle.--The term ``light duty vehicle'' 
        means a car or truck classified by the Department of 
        Transportation as a Class I or IIA vehicle.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
    (b) Plan.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        coordinated plan for carrying out--
                    (A) the programs described in this section; and
                    (B) any other program of the Department that is 
                directly related to fuel cells or hydrogen.
            (2) Inclusions.--The plan shall include a description of--
                    (A) for the first 5 years beginning on the date of 
                enactment of this Act, an agenda for each program under 
                this section, including the agenda for each activity 
                under subsection (c)(1);
                    (B) each type of entity that will carry out an 
                activity under this section and the role each entity is 
                expected to play;
                    (C) any milestone that will be used to evaluate a 
                program carried out during the first 5 years beginning 
                on the date of enactment of this Act;
                    (D) the most significant technical and nontechnical 
                obstacles to achieving the goals described in 
                subsection (c)(2) and the means by which each program 
                under this section will address the obstacles; and
                    (E) any policy assumption that is implicit in the 
                plan, including any assumption that affects a source of 
                hydrogen or the marketability of hydrogen-related 
                products.
    (c) Programs.--
            (1) Activities.--The Secretary, in partnership with the 
        private sector, shall conduct programs to address--
                    (A) the production of hydrogen from diverse energy 
                sources, including--
                            (i) fossil fuels (including carbon capture 
                        and sequestration);
                            (ii) hydrogen-carrier fuels (including 
                        ethanol and methanol);
                            (iii) renewable energy resources, including 
                        biomass; and
                            (iv) nuclear energy;
                    (B) the use of hydrogen for commercial, industrial, 
                and residential electric power generation;
                    (C) safe delivery of hydrogen or hydrogen-carrier 
                fuels, including--
                            (i) transmission by pipeline and other 
                        distribution methods; and
                            (ii) convenient and economic refueling of 
                        vehicles--
                                    (I) at central refueling stations; 
                                or
                                    (II) through distributed on-site 
                                generation;
                    (D) advanced vehicle technologies, including--
                            (i) engine and emission control systems;
                            (ii) energy storage, electric propulsion, 
                        and hybrid systems;
                            (iii) automotive materials; and
                            (iv) other advanced vehicle technologies;
                    (E) storage of hydrogen and hydrogen-carrier fuels, 
                including development of materials for safe and 
                economic storage in gaseous, liquid, or solid form at 
                refueling facilities and onboard vehicles;
                    (F) the development of safe, durable, affordable, 
                and efficient fuel cells, including--
                            (i) fuel-flexible fuel cell power systems;
                            (ii) improved manufacturing processes;
                            (iii) high-temperature membranes;
                            (iv) cost-effective fuel processing for 
                        natural gas;
                            (v) fuel cell stack and system reliability;
                            (vi) low temperature operation; and
                            (vii) cold start capability;
                    (G) development, after consultation with the 
                private sector, of necessary codes and standards 
                (including international codes and standards and 
                voluntary consensus standards adopted in accordance 
                with Office of Management and Budget Circular A-119) 
                and safety practices for the production, distribution, 
                storage, and use of hydrogen, hydrogen-carrier fuels, 
                and related products; and
                    (H) a public information program to improve the 
                knowledge and acceptance of the public of hydrogen-
                based systems.
            (2) Program goals.--
                    (A) Vehicles.--The goals of programs under this 
                section relating to vehicles include the facilitation 
                of--
                            (i) the making of a commitment by 
                        automakers to offer safe, affordable, and 
                        technically viable hydrogen fuel cell vehicles 
                        in the mass market in the United States by 
                        2015; and
                            (ii) the production, delivery, and 
                        acceptance by consumers in the United States of 
                        model year 2020 hydrogen fuel cell and other 
                        hydrogen-powered vehicles with--
                                    (I) a range of at least 300 miles;
                                    (II) improved performance and ease 
                                of driving;
                                    (III) safety and performance 
                                comparable to vehicle technologies in 
                                the market on the date of enactment of 
                                this Act; and
                                    (IV) compared to light duty 
                                vehicles produced for model year 2005--
                                            (aa) substantially higher 
                                        fuel economy;
                                            (bb) substantially lower 
                                        emissions of air pollutants; 
                                        and
                                            (cc) equivalent or improved 
                                        vehicle fuel system crash 
                                        integrity and occupant 
                                        protection.
                    (B) Hydrogen energy and energy infrastructure.--The 
                goals of programs under this section relating to 
                hydrogen energy and energy infrastructure include 
                establishing infrastructure by not later than 2020 that 
                will provide--
                            (i) safe and convenient refueling;
                            (ii) improved overall efficiency;
                            (iii) widespread availability of hydrogen 
                        from domestic energy sources through--
                                    (I) production, taking into 
                                consideration emissions levels;
                                    (II) delivery, including 
                                transmission by pipeline and other 
                                distribution methods for hydrogen; and
                                    (III) storage, including storage in 
                                surface transportation vehicles;
                            (iv) hydrogen for fuel cells, internal 
                        combustion engines, and other energy conversion 
                        devices for portable, stationary, and 
                        transportation applications; and
                            (v) other technologies in accordance with 
                        the plan of the Department under subsection 
                        (b).
                    (C) Fuel cells.--The goals of programs under this 
                section relating to fuel cells and the portable, 
                stationary, and transportation applications of fuel 
                cells include--
                            (i) producing safe, economical, and 
                        environmentally sound hydrogen fuel cells;
                            (ii) producing fuel cells for light duty 
                        vehicles and other vehicles; and
                            (iii) producing other technologies in 
                        accordance with the plan of the Department 
                        under subsection (b).
            (3) Demonstration projects.--
                    (A) In general.--In carrying out programs under 
                this section, the Secretary shall fund a limited number 
                of demonstration projects, taking into consideration 
                the maturity, cost-effectiveness, and environmental 
                impacts of the technologies supporting each project.
                    (B) Project selection.--
                            (i) In general.--In selecting projects 
                        under this paragraph, the Secretary shall, to 
                        the maximum extent practicable and in 
                        accordance with public interest, select 
                        projects that--
                                    (I) use hydrogen and related 
                                products at facilities or installations 
                                in existence on the date of enactment 
                                of this Act, including office 
                                buildings, military bases, vehicle 
                                fleet centers, transit bus authorities, 
                                and units of the National Park System;
                                    (II) depend on reliable power from 
                                hydrogen to carry out essential 
                                activities;
                                    (III) lead to the replication of 
                                hydrogen technologies and draw hydrogen 
                                technologies into the marketplace;
                                    (IV) include vehicle, portable, and 
                                stationary demonstrations of fuel cell 
                                and hydrogen-based energy technologies;
                                    (V) address the interdependency of 
                                demand for hydrogen fuel cell 
                                applications and hydrogen fuel 
                                infrastructure;
                                    (VI) raise awareness of hydrogen 
                                technology among the public;
                                    (VII) facilitate the identification 
                                of an optimum technology among 
                                competing alternatives;
                                    (VIII) address distributed 
                                generation using renewable sources; and
                                    (IX) address applications specific 
                                to rural or remote locations, including 
                                isolated villages and islands, the 
                                National Park System, and Indian 
                                reservations.
                            (ii) Preference.--The Secretary shall give 
                        preference to a project that addresses more 
                        than 1 element described in clause (i).
            (4) Deployment.--In carrying out programs under this 
        section, the Secretary, in partnership with the private sector, 
        shall conduct activities to facilitate the deployment of 
        hydrogen energy and energy infrastructure, fuel cells, and 
        advanced vehicle technologies.
            (5) Funding.--
                    (A) In general.--The Secretary shall carry out the 
                programs under this section using a competitive, merit-
                based review process in accordance with the generally 
                applicable Federal law (including regulations) 
                governing awards of financial assistance, contracts, 
                and other agreements.
                    (B) Research centers.--The Secretary may carry out 
                an activity under this section by funding a nationally 
                recognized university-based or Federal laboratory 
                research center.
            (6) Cost sharing.--
                    (A) Research and development.--
                            (i) Non-federal share.--Except as otherwise 
                        provided in this section, to be eligible for 
                        assistance under this section, the Secretary 
                        shall require each non-Federal source of a 
                        research and development program under this 
                        section to provide at least 20 percent of the 
                        cost of the project.
                            (ii) Reducing and eliminating non-federal 
                        share.--The Secretary may reduce or eliminate 
                        the non-Federal share required under clause (i) 
                        if the Secretary determines that the research 
                        and development--
                                    (I) is of a basic or fundamental 
                                nature; or
                                    (II) involves a technical analysis 
                                or an educational activity.
                    (B) Demonstration and commercial application.--
                            (i) Non-federal share.--Except as otherwise 
                        provided in this section, to be eligible for 
                        assistance under this section, the Secretary 
                        shall require that at least 50 percent of the 
                        costs directly and specifically related to any 
                        demonstration or commercial application project 
                        under this section be provided by non-Federal 
                        sources.
                            (ii) Reducing non-federal share.--The 
                        Secretary may reduce the non-Federal share 
                        required under clause (i) if the Secretary 
                        determines that the reduction--
                                    (I) is necessary and appropriate, 
                                taking into consideration any 
                                technological risk involved in the 
                                project; and
                                    (II) is necessary to achieve the 
                                goals of this section.
                    (C) Calculation of amount.--In calculating the 
                amount of the non-Federal share provided under 
                subparagraphs (A) and (B), the Secretary may include 
                the costs of personnel, services, equipment, and other 
                resources relating to a project.
                    (D) Size of non-federal share.--The Secretary may 
                consider the amount of the non-Federal share in 
                selecting a project under this section.
            (7) 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, a cooperative agreement, or a contract under 
        this section.
    (d) Interagency Task Force.--
            (1) Establishment.--Not later than 120 days after the date 
        of enactment of this Act, the President shall establish an 
        interagency task force--
                    (A) the chairperson of which shall be the 
                Secretary; and
                    (B) that includes representatives from--
                            (i) the Office of Science and Technology 
                        Policy within the Executive Office of the 
                        President;
                            (ii) the Department of Transportation;
                            (iii) the Department of Defense;
                            (iv) the Department of Commerce (including 
                        the National Institute of Standards and 
                        Technology);
                            (v) the Department of State;
                            (vi) the Environmental Protection Agency;
                            (vii) the National Aeronautics and Space 
                        Administration; and
                            (viii) other Federal agencies as the 
                        President determines appropriate.
            (2) Goals.--The goals of the interagency task force shall 
        be--
                            (i) to provide a safe, economical, and 
                        environmentally sound fuel infrastructure for 
                        hydrogen and hydrogen-carrier fuels, including 
                        an infrastructure that supports buses and other 
                        fleet transportation;
                            (ii) to support the use of fuel cells in 
                        government and other applications, including 
                        portable, stationary, and transportation 
                        applications;
                            (iii) to promote distributed power 
                        generation, including the generation of 
                        combined heat, power, and clean fuels 
                        (including hydrogen);
                            (iv) to develop uniform hydrogen codes, 
                        standards, and safety protocols; and
                            (v) to support the integrity, safety, and 
                        performance of vehicle hydrogen fuel systems.
                    (B) Duties.--
                            (i) In general.--The interagency task force 
                        may organize workshops and conferences, issue 
                        publications, and create databases to carry out 
                        any activity described in clause (ii).
                            (ii) Activities.--The activities referred 
                        to in clause (i) are--
                                    (I) to foster the exchange of 
                                generic, nonproprietary information and 
                                technology among industry, academia, 
                                and government;
                                    (II) to develop and maintain an 
                                inventory and assessment of hydrogen, 
                                fuel cells, and other advanced 
                                technologies, including the commercial 
                                capability of each technology for the 
                                economic and environmentally safe 
                                production, distribution, delivery, 
                                storage, and use of hydrogen;
                                    (III) to integrate technical and 
                                other information made available as a 
                                result of the programs and activities 
                                under this section;
                                    (IV) to promote introduction to the 
                                market of infrastructure for hydrogen 
                                fuel vehicles; and
                                    (V) to conduct an informative 
                                program to provide hydrogen and fuel 
                                cell information to potential end-
                                users.
            (3) Agency cooperation.--The head of each Federal agency 
        shall cooperate with and furnish information to the interagency 
        task force, the Advisory Committee, and the Department.
    (e) Advisory Committee.--
            (1) Establishment.--The Hydrogen Technical and Fuel Cell 
        Advisory Committee is established to advise the Secretary on 
        programs and activities under this section.
            (2) Membership.--
                    (A) Members.--
                            (i) In general.--The Advisory Committee 
                        shall consist of not less than 12, and not more 
                        than 25, members.
                            (ii) Appointment.--Each member of the 
                        Advisory Committee shall be appointed by the 
                        Secretary.
                            (iii) Requirements.--In making an 
                        appointment under clause (ii), the Secretary 
                        shall appoint a member to represent--
                                    (I) domestic automobile industry;
                                    (II) academia;
                                    (III) professional societies;
                                    (IV) government agencies;
                                    (V) Federal laboratories;
                                    (VI) foreign automobile industry; 
                                and
                                    (VII) financial, environmental, and 
                                other organizations, as the Secretary 
                                determines appropriated based on an 
                                assessment of the technical and other 
                                qualifications of each committee member 
                                and the needs of the Advisory 
                                Committee.
                    (B) Terms.--
                            (i) In general.--The term of a member of 
                        the Advisory Committee shall be not more than 3 
                        years.
                            (ii) Intervals.--The Secretary may appoint 
                        members of the Advisory Committee in a manner 
                        that allows the terms of the members serving at 
                        any time to expire at staggered intervals to 
                        ensure continuity in the functioning of the 
                        Advisory Committee.
                            (iii) Reappointment.--A member of the 
                        Advisory Committee may be reappointed when the 
                        term of the member expires.
                    (C) Chairperson.--The Advisory Committee shall 
                elect a chairperson at the initial meeting of the 
                Advisory Committee.
            (3) Duties.--The Advisory Committee shall review and make 
        recommendations to the Secretary regarding--
                    (A) carrying out programs and activities under this 
                section;
                    (B) the safety, economical, and environmental 
                consequences of technologies for the production, 
                distribution, delivery, storage, or use of hydrogen 
                energy and fuel cells; and
                    (C) the plan established under subsection (b).
            (4) Consideration of recommendations.--The Secretary shall 
        consider, but need not adopt, any recommendation of the 
        Advisory Committee under paragraph (3).
            (5) Biennial report.--
                    (A) In general.--Not later than 2 years after the 
                date of enactment of this Act, and biennially 
                thereafter, concurrent with the submission to Congress 
                by the President of a budget proposal, the Secretary 
                shall submit to Congress a biennial report describing 
                any recommendation made by the Advisory Committee 
                during the preceding 2 years.
                    (B) Inclusions.--The biennial report shall 
                include--
                            (i) a description of the means through 
                        which the Secretary has carried out or plans to 
                        carry out the recommendations described in the 
                        report; or
                            (ii) if the Secretary decides not to carry 
                        out a recommendation described in the report, 
                        an explanation of that decision.
    (f) External Review.--
            (1) Plan.--
                    (A) In general.--The Secretary shall enter into an 
                agreement with the National Academy of Sciences to 
                review the plan under subsection (b).
                    (B) Timing of review.--Not later than 180 days 
                after receipt of the plan from the Secretary, the 
                National Academy of Sciences shall submit to the 
                Secretary the results of the review under subparagraph 
                (A).
                    (C) Transmission of review.--Not later than 45 days 
                after receipt of the results of the review under 
                subparagraph (B), the Secretary shall transmit to 
                Congress--
                            (i) a copy of the results of the review; 
                        and
                            (ii)(I) a plan to carry out any 
                        recommendation described in the review; or
                            (II) if the Secretary decides not to carry 
                        out a recommendation described in the review, 
                        an explanation of that decision.
            (2) Additional review.--
                    (A) In general.--The Secretary shall enter into an 
                agreement with the National Academy of Sciences to 
                review the programs described in subsection (c) during 
                the fourth year after the date of enactment of this 
                Act.
                    (B) Inclusions.--The review under subparagraph (A) 
                shall include--
                            (i) a description of any research priority 
                        or technical milestone established during the 
                        preceding 3 years; and
                            (ii) an evaluation of any progress made 
                        toward achieving a priority or milestone 
                        described in clause (i) during the preceding 3 
                        years.
                    (C) Timing of review.--Not later than 5 years after 
                the date of enactment of this Act, the National Academy 
                of Sciences shall--
                            (i) complete the review under subparagraph 
                        (A); and
                            (ii) submit to the Secretary a report 
                        describing the results of the review.
                    (D) Transmission.--Not later than 45 days after 
                receipt of the results of the review under subparagraph 
                (C)(ii), the Secretary shall transmit to Congress--
                            (i) a copy of the results of the review; 
                        and
                            (ii)(I) a plan to carry out any 
                        recommendation described in the review; or
                            (II) if the Secretary decides not to carry 
                        out a recommendation described in the review, 
                        an explanation of that decision.
    (g) Representation.--The Secretary, in coordination with the 
Department of Transportation, the National Institute of Standards and 
Technology, and other relevant Federal agencies, may represent the 
interests of the United States with respect to any activity or program 
under this section before a government or nongovernmental organization, 
including--
            (1) other Federal, State, regional, and local governments;
            (2) industry (and industry representatives), including 
        members of the energy and transportation industries; and
            (3) in consultation with the Department of State, foreign 
        governments and representatives of those governments, including 
        international organizations.
    (h) Effect of Section.--Nothing in this section decreases the 
authority of the Secretary of Transportation as in existence on the day 
before the date of enactment of this Act with respect to--
            (1) representation of the interests of the United States 
        with respect to activities and programs under title 49, United 
        States Code;
            (2) the regulation of hazardous materials transportation 
        under chapter 51 of title 49, United States Code;
            (3) the regulation of motor vehicle safety under chapter 
        301 of title 49, United States Code;
            (4) automobile fuel economy under chapter 329 of title 49, 
        United States Code;
            (5) the support and promotion of research, development, and 
        deployment activities relating to advanced vehicle technologies 
        under section 5506 of title 49, United States Code;
            (6) research into, and regulation of, the fuel systems 
        integrity, standards, and safety of hydrogen-powered vehicles 
        under subtitle VI of title 49, United States Code; or
            (7) the regulation of pipeline safety under chapter 601 of 
        title 49, United States Code.
    (i) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section--
            (1) $273,500,000 for fiscal year 2006;
            (2) $375,000,000 for fiscal year 2007;
            (3) $450,000,000 for fiscal year 2008;
            (4) $500,000,000 for fiscal year 2009; and
            (5) $550,000,000 for fiscal year 2010.

SEC. 105. CLARIFICATION OF EXISTING COGENERATION CONTRACTS.

    (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--
            (1) by redesignating subsections (k) and (l) as subsections 
        (m) and (n), respectively; and
            (2) by inserting after subsection (j) the following:
    ``(k) Termination of Mandatory Purchase and Sale Requirements.--(1) 
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, 
        except that, 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)(A) In this paragraph, the term `existing qualifying 
cogeneration facility' means a facility that--
            ``(i) was a qualifying cogeneration facility on the date of 
        enactment of this paragraph; or
            ``(ii) had filed with the Commission a notice of self-
        certification, a self-recertification, or an application for 
        Commission certification under section 292.207 of title 18, 
        Code of Federal Regulations (or a successor regulation), prior 
        to the date on which the Commission issues the final rule 
        required by subsection (l).
    ``(B) After the date of enactment of this subparagraph, 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 (l).
    ``(3)(A) 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.
    ``(B) The application shall set forth the factual basis on 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.
    ``(C) 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 receipt of the 
application regarding whether the conditions set forth in subparagraphs 
(A), (B) or (C) of paragraph (1) have been met.
    ``(4)(A) At any time after the Commission makes a finding under 
paragraph (3) relieving an electric utility of the obligation of the 
electric utility 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 obligation of the electric utility to purchase electric 
energy under this section.
    ``(B) The application shall set forth the factual basis on 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.
    ``(C) After notice (including sufficient notice to potentially 
affected utilities) and opportunity for comment, the Commission shall 
issue an order within 90 days after receipt of the application 
reinstating the obligation of the electric utility to purchase electric 
energy under this section if the Commission finds that the conditions 
set forth in subparagraph (A), (B), or (C) of paragraph (1) that 
relieved the obligation to purchase, are no longer met.
    ``(5) 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 the service territory of the electric 
        utility.
    ``(6) 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)(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.).
    ``(l) Rulemaking for New Qualifying Facilities.--(1)(A) Not later 
than 180 days after the date of enactment of this subparagraph, the 
Commission shall issue a rule revising the criteria established under 
section 292.205 of title 18, Code of Federal Regulations (or a 
successor regulation), for new qualifying cogeneration facilities 
seeking to sell electric energy pursuant to section 210 to ensure 
that--
            ``(i) 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 the 
        host facility of the qualifying facility; and
            ``(iii) continuing progress is made in the development of 
        efficient electric energy generating technology.
    ``(B)(i) The rule issued pursuant to subparagraph (A) shall be 
applicable only to facilities that seek to sell electric energy 
pursuant to section 210.
    ``(ii) For all other purposes, except as specifically provided in 
section (k)(2)(A), qualifying facility status shall be determined in 
accordance with this Act.
    ``(2) Notwithstanding rule revisions under paragraph (1), the 
criteria of the Commission 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 this paragraph, or
            ``(B) had filed with the Commission a notice of self-
        certification, self-recertification, or an application for 
        Commission certification under section 292.207 of title 18, 
        Code of Federal Regulations (or a successor regulation) 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) of the Federal Power Act (16 U.S.C. 796(17)) is amended 
        by striking subparagraph (C) and inserting the following:
    ``(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) of the 
        Federal Power Act (16 U.S.C. 796(18)) is amended by striking 
        subparagraph (B) and inserting the following:
    ``(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. 106. COGENERATION DEVELOPMENT.

    (a) Electrical Generation and Rates.--
            (1) Benefits of distributed generation of electricity.--
        Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as 
        amended by section 105) is amended by adding at the end the 
        following:

``SEC. 215. BENEFITS OF DISTRIBUTED GENERATION OF ELECTRICITY.

    ``(a) Study.--
            ``(1) In general.--
                    ``(A) Potential benefits.--The Secretary, in 
                consultation with the 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 
        the potential benefits of--
                    ``(A) increased system reliability;
                    ``(B) improved power quality;
                    ``(C) the provision of ancillary services;
                    ``(D) reduction of peak power requirements through 
                onsite generation;
                    ``(E) the provision of reactive power or volt-
                ampere reactives;
                    ``(F) an emergency supply of power;
                    ``(G) offsets to investments in generation, 
                transmission, or distribution facilities that would 
                otherwise be recovered through rates;
                    ``(H) diminished land use effects and right-of-way 
                acquisition costs; and
                    ``(I) reducing the vulnerability of a system to 
                terrorism.
            ``(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 section, 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.''.
            (2) Rate and charges; schedules; suspension of new rates.--
        Section 205 of the Federal Power Act (16 U.S.C. 824d) is 
        amended by adding at the end the following:
    ``(g)(1) Subject to paragraph (2), if a rate or charge made, 
demanded, or received by a public utility subject to regulation by the 
Commission varies because of (or includes any component reflecting) the 
existence or volume of any self-generation, cogeneration, or small 
power production by the ratepayer (or by any third party wholly inside 
the premises of the ratepayer and on the side of the ratepayer of the 
meter that measures services received from that public utility), the 
rate or charge shall not be considered just, reasonable, or 
nondiscriminatory.
    ``(2) If a rate or charge described in paragraph (1) varies because 
of (or a component of the rate or charge reflects) an actual difference 
in the cost to the public utility of service relative to the cost to 
the utility of serving ratepayers without self-generation, 
cogeneration, or small-power production, the rate or charge shall be 
considered just, reasonable, and nondiscriminatory.
    ``(3) Not later than the date of enactment of this subsection, any 
public utility in the jurisdiction of the Commission shall--
            ``(A) modify any tariff charged by the utility so that a 
        customer that installs, owns, or operates self-generation, 
        cogeneration, or small power production is served under rates, 
        rules, and requirements identical to those that apply to a 
        customer of the same class that does not install, own, or 
        operate self-generation, cogeneration, or small power 
        production; and
            ``(B) withdraw any provision that provides for punitive 
        terms, rates, or rules if a customer installs, owns, or 
        operates self-generation, cogeneration or small power 
        production equipment.''.
            (3) Certain interconnection authority.--Section 210 of the 
        Federal Power Act (16 U.S.C. 824i) is amended--
                    (A) by redesignating subsection (e) as subsection 
                (f); and
                    (B) by inserting after subsection (d) the 
                following:
    ``(e)(1) Notwithstanding any other provision of this section, to 
the extent any cogenerator or small power producer seeks to 
interconnect the generator of the cogenerator or small power producer 
to the facilities of any public utility under the jurisdiction of the 
Commission for the purpose of engaging in a transaction under the 
jurisdiction of the Commission, the cogenerator or small power producer 
shall be entitled to elect to apply--
            ``(A) the interconnection rules and procedures adopted by 
        the Commission by rule; or
            ``(B) the interconnection rules and procedures adopted by 
        the State in which the cogenerator or small power producer is 
        located.
    ``(2) The choice under paragraph (1) does not affect jurisdiction 
over the terms and conditions of services by the public utility to the 
cogenerator or small power producer.''.
    (b) Transportation and Sale of Natural Gas.--Section 4(b) of the 
Natural Gas Act (15 U.S.C. 717c(b)) is amended by striking subsection 
(b) and inserting the following:
    ``(b)(1) No natural-gas company shall, with respect to any 
transportation or sale of natural gas subject to the jurisdiction of 
the Commission, as between localities or classes of service--
            ``(A) make or grant any undue preference or advantage to 
        any person or subject any person to undue prejudice or 
        disadvantage; or
            ``(B) maintain any unreasonable difference in rates, 
        charges, service, facilities, or in any other respect.
    ``(2) A person using natural gas for cogeneration shall obtain from 
a natural-gas company rates and conditions of service not less 
advantageous than the rates and conditions of service for a person 
using natural gas primarily to generate electricity.
    ``(3) Not later than 1 year after the date of enactment of this 
paragraph, each natural gas company shall amend any existing schedule 
of rates and conditions of service as necessary to comply with this 
subsection.''.

SEC. 107. EFFICIENT USE OF NATURAL GAS FOR ELECTRIC ENERGY GENERATION.

    (a) Findings.--Congress finds that it is in the national interest 
to ensure that electric energy is generated from natural gas in the 
most efficient manner practicable.
    (b) Policy.--If 2 or more natural gas-fired electric energy 
generation facilities are capable of meeting demand for electric 
energy, the facility that generates electric energy at the greatest 
level of thermal efficiency, and at the lowest cost to consumers of 
electric energy, shall be used first, in accordance with any 
operational or reliability requirement of an electric energy 
transmission system.
    (c) Action by States.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Governor (or other appropriate 
        regulatory authority) of each State may establish and carry out 
        a program to achieve the policy described in subsection (b) 
        with respect to electric energy generation facilities that are 
        subject to the regulatory jurisdiction of the State.
            (2) Certification.--If the Governor (or other appropriate 
        regulatory authority) of a State determines that the policy 
        described in subsection (b) is carried out appropriately in the 
        State through a State program, or another program, in existence 
        on the date of enactment of this Act, the Governor shall submit 
        to the Secretary of Energy a certification of that 
        determination.
    (d) Action by Federal Government.--The Secretary of Energy shall 
promulgate regulations to carry out the policy described in subsection 
(b) to apply to any State--
            (1) the Governor (or other appropriate regulatory 
        authority) of which fails to act in accordance with subsection 
        (c); and
            (2) the electric energy generation facilities of which are 
        not subject to State regulatory authority.

SEC. 108. DEMAND SIDE MANAGEMENT FOR INDUSTRIALS AND UTILITIES: NET 
              METERING AND OTHER 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.--
                    ``(A) Definition of net metering service.--In 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.
                    ``(B) Availability.--Each electric utility shall 
                make available on request net metering service to any 
                electric consumer that the electric utility serves.
            ``(12) Fuel sources.--Each electric utility shall develop a 
        plan to minimize dependence on 1 fuel source and to ensure that 
        the electric energy the electric utility 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 the fossil fuel generation of the electric 
        utility.''.
    (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 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 
commence the consideration referred to in section 111, or set a hearing 
date for the consideration, with respect to each standard established 
under paragraphs (11) through (13) of section 111(d).
    ``(B) Not later than 3 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 
complete the consideration, and shall make the determination, referred 
to in section 111 with respect to each standard established under 
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--
                    (A) by inserting ``(1)'' before ``Each''; and
                    (B) by adding at the end the following:
            ``(2) In the case of each standard established under 
        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 those paragraphs.''.
            (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) shall not apply 
to the standards established under paragraphs (11) through (13) of 
section 111(d) in the case of any electric utility in a State if, 
before the date of enactment of this subsection--
            ``(1) the State has implemented for the utility the 
        standard concerned (or a comparable standard);
            ``(2) the State regulatory authority for the State or 
        relevant nonregulated electric utility has conducted a 
        proceeding to consider implementation of the standard concerned 
        (or a comparable standard) for the utility; or
            ``(3) the State legislature has voted on the implementation 
        of the standard (or a comparable standard) for the utility.''.
                    (B) Cross reference.--Section 124 of the Public 
                Utility Regulatory Policies Act of 1978 (16 U.S.C. 
                2634) is amended--
                            (i) in the first sentence, by inserting 
                        ``(a) Completed proceedings and actions.--'' 
                        before ``For'';
                            (ii) in the second sentence, by inserting 
                        ``(b) Incomplete proceedings and actions.--'' 
                        before ``For''; and
                            (iii) by adding at the end the following:
    ``(c) Cross Reference.--In the case of each standard established 
under 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 those 
paragraphs.''.

SEC. 109. DEMAND SIDE MANAGEMENT FOR RESIDENTIAL CUSTOMERS: 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 customer 
        class of the electric utility, and provide individual customers 
        on 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 costs of 
        the electric utility of generating and purchasing electricity 
        at the wholesale level.
            ``(B) The time-based rate schedule shall enable the 
        electric consumer to manage energy use and cost through 
        advanced metering and communications technology.
            ``(C) 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 under which--
                            ``(I) 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 cost to the utility 
                        of generating or purchasing such electricity at 
                        the wholesale level for the benefit of the 
                        consumer; and
                            ``(II) policy prices paid for energy 
                        consumed during those periods shall be pre-
                        established and known to consumers in advance 
                        of the consumption, allowing the consumers to 
                        vary the demand and usage of the consumers in 
                        response to such prices and manage the energy 
                        costs of the consumers by shifting usage to a 
                        lower cost period or reducing the overall 
                        consumption of the consumers;
                    ``(ii) critical peak pricing under which time-of-
                use prices are in effect except for certain peak days, 
                when prices may reflect the costs of generating or 
                purchasing electricity at the wholesale level and when 
                consumers may receive additional discounts for reducing 
                peak period energy consumption; and
                    ``(iii) real-time pricing under which electricity 
                prices are set for a specific time period on an 
                advanced or forward basis, reflecting the cost to the 
                utility of generating or purchasing electricity at the 
                wholesale level, and may change as often as hourly.
            ``(D) 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 that rate, respectively.
            ``(E) 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 (16 U.S.C. 
        2601 et seq.) shall be deemed to be a reference to the date of 
        enactment of this paragraph.
            ``(F) In a State that permits third-party marketers to sell 
        electric energy to retail electric consumers, the 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.
            ``(G) Notwithstanding subsections (b) and (c) of section 
        112, not later than 18 months after the date of enactment of 
        this paragraph, each State regulatory authority shall--
                    ``(i) conduct an investigation in accordance with 
                section 115(i); and
                    ``(ii) 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--
            (1) in subsection (b)--
                    (A) by inserting ``and the standard for time-based 
                metering and communications established by section 
                111(d)(14)'' after ``the standard for time-of-day rates 
                established by section 111(d)(3)''; and
                    (B) by inserting ``and communications'' after ``are 
                likely to exceed the metering''; and
            (2) by adding the at the end the following:
    ``(i) Time-Based Metering and Communications.--(1) 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 apply in accordance with this subsection.
    ``(2) A 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 that enable the 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--
            (1) in paragraph (3), by striking ``and'' at the end;
            (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(5) technologies, techniques, and ratemaking methods 
        relating to advanced metering and communications and the use of 
        those 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--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c) Demand Response.--The Secretary shall be responsible for--
            ``(1) informing consumers of 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 Natural Gas Price Reduction 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 those benefits by January 1, 
        2008.''.
    (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 electricity 
        demand response services to the public.
            (2) Technical assistance.--The Secretary of Energy shall 
        provide technical assistance to States and regional 
        organizations formed by 2 or more States to assist the 
        organizations in--
                    (A) identifying the areas with the greatest 
                electricity 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 those demand response programs.
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Federal Energy Regulatory Commission 
        shall prepare and publish an annual report, by appropriate 
        region, that assesses electricity demand response resources, 
        including those available from all consumer classes, and that 
        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; and
                    (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.
    (f) Federal Encouragement of Demand Response Devices.--It is the 
policy of the United States that--
            (1) time-based pricing and other forms of electricity 
        demand response, under which electricity customers are provided 
        with electricity price signals and the ability to benefit by 
        responding to the consumers, shall be encouraged, and the 
        deployment of the technology and devices that enable 
        electricity customers to participate in the pricing and demand 
        response systems shall be facilitated; and
            (2) the benefits of the demand response that accrue to 
        persons not deploying the 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 date of enactment of this 
paragraph, each State regulatory authority (with respect to each 
electric utility for which the authority has ratemaking authority) and 
each nonregulated electric utility shall commence the consideration 
referred to in section 111, or set a hearing date for the 
consideration, with respect to the standard established by section 
111(d)(14).
    ``(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 authority 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 section 111(d)(14).''.

SEC. 110. PROTECTING INDUSTRIAL COGENERATORS.

    Nothing in subtitle D of the Energy Conference Report (House of 
Representatives Report 108-375, 108th Congress, agreed to November 17, 
2003) (relating to participant funding) shall apply to a qualifying 
facility, as determined under section 210(n) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 824a-3) (as added by section 
104).

SEC. 111. REDUCTION OF DEPENDENCE ON IMPORTED PETROLEUM.

    (a) Report.--
            (1) In general.--Not later than July 1, 2007, 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 of this 
                Act and amendments made by 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 that are sufficient to reduce 
        total demand for petroleum in the United States by 1,750,000 
        barrels per day from the quantity 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.

SEC. 112. NATIONAL GASIFICATION STRATEGY FOR POWER SECTOR.

    (a) Streamlined Permitting.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator of the Environmental 
        Protection Agency shall promulgate regulations to revise the 
        requirements under section 111 of the Clean Air Act (42 U.S.C. 
        7411), and parts C and D of title I of that Act (42 U.S.C. 7470 
        et seq.), in accordance with this section.
            (2) Application date.--The revised regulations adopted 
        pursuant to this section shall apply until January 1, 2017, but 
        may continue to apply after that date if the Environmental 
        Protection Agency determines that such regulations are 
        authorized by another provision of the Clean Air Act (42 U.S.C. 
        7401 et seq.).
    (b) Applicability.--A qualifying project shall not be considered to 
be a major stationary source that is subject to the preconstruction 
review requirements of parts C and D of title I of the Clean Air Act 
(42 U.S.C. 7470 et seq.), for purposes of constructing such qualifying 
projects, provided each of the following requirements of this 
subsection is met:
            (1) Emissions reductions are achieved by other stationary 
        sources located within the same air quality region, as 
        determined by the Administrator based on best available air 
        quality modeling, and such emissions reductions offset the 
        emissions of the qualifying project on a pollutant-by-pollutant 
        basis.
            (2) Such emissions reductions by other stationary sources 
        are achieved through a federally enforceable limitation that is 
        not otherwise required under the Clean Air Act, and occurred 
        within a 5-year period prior to the date that the qualifying 
        project commenced commercial operation.
            (3)(A) The owner or operator of qualifying project 
        demonstrates the following requirements are met prior to the 
        commencement of construction of the project:
                    (i) In an area designated as attainment or 
                unclassifiable under section 107(d) of the Clean Air 
                Act (42 U.S.C. 7407(d)), the emissions increase 
                resulting from the qualifying project will not cause or 
                contribute to air pollution in excess of any national 
                ambient air quality standard.
                    (ii) In an area designated as nonattainment under 
                section 107(d) of the Clean Air Act (42 U.S.C. 
                7407(d)), the emissions increase resulting from the 
                qualifying project will not interfere with any program 
                to assure that the national ambient air quality 
                standards are achieved and maintained.
            (B) Demonstrations performed under this paragraph shall be 
        based on the offsetting emissions reductions achieved under 
        paragraphs (1) and (2), as well as other design and emissions 
        parameters that are relevant for assessing air quality impacts 
        of the emissions increase from the project.
            (4) The qualifying project complies with the emissions 
        standards that are established for integrated gasification 
        combined cycle plants under section 111 of the Clean Air Act 
        (42 U.S.C. 7411).
    (c) Expedited Permitting.--
            (1) The permitting authority shall expedite the 
        preconstruction review requirements of parts C and D of title I 
        of the Clean Air Act (42 U.S.C. 7470 et seq.) in the case of 
        qualifying projects that do not obtain offsetting emissions 
        reductions under subsection (a).
            (2) Expedited preconstruction review shall include the 
        following:
                    (A) Application of the emissions standards for 
                integrated gasification combined cycle plants under 
                section 111 of that Act (42 U.S.C. 7411), instead of 
                case-by-case performance standards based on best 
                available control technology or lowest achievable 
                emissions rate under parts C and D of title I of that 
                Act (42 U.S.C. 7470 et seq.).
                    (B) Other appropriate measures to accelerate 
                preconstruction review and issuance of all necessary 
                air permits for the construction and operation of 
                qualifying projects under parts C and D of title I of 
                that Act (42 U.S.C. 7470 et seq.).
    (d) Definitions.--In this section:
            (1) The term ``biomass'' means any animal, agricultural or 
        plant waste, by-product of wood or paper mill operations such 
        as lignin in spent pulping liquors, and other products of 
        forestry maintenance, but does not include paper that is 
        commonly recycled.
            (2) The term ``electric generation unit'' means any 
        facility at least 50 percent of the total annual net output of 
        which is electrical power.
            (3) The term ``industrial gasification technology'' means 
        any process that converts an eligible solid or liquid into a 
        gaseous condition for direct use or subsequent chemical or 
        physical conversion. An eligible solid or liquid shall include 
        the following materials: coal, petroleum residue (such as 
        carbonization product of high-boiling hydrocarbon fractions 
        obtained in petroleum processing), biomass, carbonized or semi-
        carbonized matter (including peat) or other materials that are 
        recovered for their feedstock, fuel, or other energy value.
            (4) The term ``integrated gasification combined cycle 
        technology'' means any combination of equipment, including all 
        related power generation equipment, that is used at a single 
        location to convert coal or residuals into synthesis gas that 
        is then used as a fuel to generate electricity.
            (5) The term ``natural gas combined cycle'' means a system 
        that--
                    (A) is comprised of 1 or more combustion turbines, 
                heat recovery steam generators, and steam turbines; and
                    (B) combusts only natural gas or fuel oil, with 
                natural gas comprising at least 90 percent, and fuel 
                oil not more than 10 percent, of the unit's annual heat 
                input in any year.
            (6) The term ``qualifying electric generation project'' 
        means a project that meets each of the following eligibility 
        requirements:
                    (A) The project uses integrated gasification 
                combined cycle technology in the construction of a new 
                electric generating unit, the repowering of an existing 
                coal-fired electric generation unit, or the conversion 
                of an existing natural gas combined cycle unit to 
                operate on coal instead of natural gas.
                    (B) The project meets the emissions standards that 
                are established for integrated gasification combined 
                cycle plants under section 111 of the Clean Air Act (42 
                U.S.C. 7411).
                    (C) The project commences commercial operation 
                after December 31, 2006.
            (7) The term ``qualifying industrial project'' means any 
        project that uses an industrial gasification technology that 
        meets the following eligibility requirements:
                    (A) The energy output of the project is primarily 
                used for applications in one or more of the following 
                industries: chemicals, fertilizer, glass, steel, 
                petroleum coke, forest products, and agriculture-
                feedlots.
                    (B) The gasification technology meets the emissions 
                standards that are established for integrated 
                gasification combined cycle plants under section 111 of 
                the Clean Air Act (42 U.S.C. 7411).
                    (C) The gasification technology commenced 
                commercial operation after December 31, 2006.
            (8) The term ``qualifying project'' means a qualifying 
        electric generation project or a qualifying industrial project.
    (e) Construction Incentives.--
            (1) Definitions.--In this subsection:
                    (A) Carbon capture ready.--The term ``carbon 
                capture ready'', with respect to a facility or 
                equipment, means an industrial gasification project 
                design that is determined by the Secretary to be 
                capable of accommodating the equipment likely to be 
                necessary to capture, separate on a long-term basis, 
                isolate, or remove carbon dioxide from the gaseous 
                stream (for later use or sequestration) that would 
                otherwise be emitted during the generation of 
                electricity.
                    (B) Gasification combined cycle technology 
                facility.--The term ``gasification combined cycle 
                technology facility'' means an integrated gasification 
                combined cycle facility that contains any combination 
                of equipment (including power generation equipment) 
                that--
                            (i) is used at a single location to convert 
                        coal or a residual into synthesis gas to be 
                        used as a fuel to generate electricity;
                            (ii) is carbon capture ready;
                            (iii) is depreciable or that can be 
                        amortized; and
                            (iv) achieves--
                                    (I) a nitrogen emissions rate of at 
                                least 0.06 lbs/mmBtu; and
                                    (II) a sulfur dioxide emissions 
                                rate of at least 0.08 lbs/mmBtu.
                    (C) Secretary.--The term ``Secretary'' means the 
                Secretary of Energy.
            (2) Incentives.--The Secretary shall establish a program 
        under which construction incentives are provided for eligible 
        facilities that are certified by the Secretary in accordance 
        with this subsection.
            (3) Certification.--
                    (A) In general.--Subject to subparagraph (D), the 
                Secretary shall certify the first 6 eligible facilities 
                for which an application for certification is submitted 
                to the Secretary.
                    (B) Eligible facilities.--To be eligible to receive 
                certification under this subsection, a facility shall 
                be permitted--
                            (i) to be a gasification combined cycle 
                        technology facility;
                            (ii) to be built and in continuous 
                        operation beginning not later than December 31, 
                        2013;
                            (iii) to have a fuel input of coal of not 
                        less than 75 percent; and
                            (iv) to have a design capability of not 
                        less than 500 megawatts.
                            (v) to own or have all land rights for 
                        construction and for operation of the facility; 
                        and
                            (vi) to demonstrate a financial condition 
                        that is necessary to achieve financial closing 
                        for the facility.
                    (C) Application.--
                            (i) In general.--To receive certification 
                        under subparagraph (A), on receipt for an 
                        eligible facility of a prevention of 
                        significant deterioration of air quality (PSD) 
                        permit from the Administrator of the 
                        Environmental Protection Agency and all other 
                        required Federal, State, and local permits, the 
                        owner or operator of the facility shall submit 
                        to the Secretary an application in the manner 
                        required by the Secretary.
                            (ii) Contents.--An application under this 
                        subparagraph shall contain--
                                    (I) a plan for the construction of 
                                the eligible facility; and
                                    (II) any other information the 
                                Secretary may require.
                    (D) Selection.--The Secretary shall select for 
                certification under subparagraph (A)--
                            (i) 4 eligible facilities that are--
                                    (I) investor-owned utilities; or
                                    (II) independent power producers; 
                                and
                            (ii) 2 eligible facilities that are--
                                    (I) public utilities; or
                                    (II) rural power cooperatives.
            (4) Grants.--
                    (A) In general.--The Secretary shall establish a 
                program under which the Secretary shall provide grants 
                to the eligible facilities described in paragraph 
                (3)(D)(ii) to pay the Federal share of the costs of 
                construction of those eligible facilities.
                    (B) Timing.--The Secretary shall make a grant under 
                this paragraph commencing on the date the Secretary 
                determines that an eligible facility has achieved 
                financial closing and obtained financing from 1 or more 
                commercial lending institutions.
                    (C) Federal share.--The Federal share of the 
                certified costs of construction of an eligible facility 
                under this paragraph shall be, as determined by the 
                Secretary--
                            (i) in the case of an eligible entity that 
                        was among the first 3 eligible entities to 
                        receive certification under paragraph (3)(A), 
                        not more than 40 percent; and
                            (ii) in the case of an eligible entity that 
                        was among the last 3 eligible entities to 
                        receive certification under paragraph (3)(A), 
                        not more than 30 percent.
            (5) Authorization of appropriations.--There are authorized 
        such sums as are necessary to carry out this subsection, to 
        remain available until expended.

SEC. 113. INDUSTRIAL GASIFICATION DEMONSTRATION AND DEPLOYMENT PROGRAM.

    (a) Definitions.--In this section:
            (1) Biomass.--
                    (A) In general.--The term ``biomass'' means--
                            (i) any agricultural or plant waste;
                            (ii) a byproduct of a wood or paper mill, 
                        such as lignin in spent pulping liquors; and
                            (iii) any other product of forestry 
                        maintenance.
                    (B) Exclusion.--The term ``biomass'' does not 
                include paper that is commonly recycled.
            (2) Carbon-capture ready.--The term ``carbon-capture 
        ready'' means an industrial gasification plant design that is 
        determined by the Secretary to be capable of accommodating the 
        equipment likely to be necessary to capture carbon dioxide from 
        the gaseous stream, for later use or sequestration, that would 
        otherwise be emitted in the flue gas from a project that uses a 
        non-renewable fuel.
            (3) Coal.--The term ``coal'' means any carbonized or semi-
        carbonized matter, including peat.
            (4) Eligible entity.--The term ``eligible entity'' means 
        any entity that applies for Federal assistance that will 
        principally be used for applications with a standard industrial 
        classification relating particularly to chemicals, fertilizers, 
        glass, steel, petcoke, forest products, or agriculture 
        feedlots, as determined by the Secretary.
            (5) Gasification technology.--The term ``gasification 
        technology'' means any process by which a solid or liquid 
        product from coal, petroleum residue, biomass, or other 
        material recovered for its energy or feedstock value is 
        converted into a gaseous condition for--
                    (A) direct use; or
                    (B) subsequent chemical or physical conversion.
            (6) Industrial gasification project.--The term ``industrial 
        gasification project'' means a project that--
                    (A) is proposed by an eligible entity; and
                    (B) employs gasification technology.
            (7) Petroleum residue.--The term ``petroleum residue'' 
        means a carbonization product of high-boiling hydrocarbon 
        fractions obtained through petroleum processing.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (9) Total project investment.--The term ``total project 
        investment'' means--
                    (A) the total project cost for engineering, design, 
                procurement, construction, project development, and 
                financing; and
                    (B) reasonable contingency reserves (as determined 
                by the Secretary and the project sponsor).
    (b) Finding; Purpose.--
            (1) Finding.--Congress finds that widespread domestic use 
        of gasification technologies can significantly contribute to 
        the economy, the environment, and the general welfare of the 
        people of the United States.
            (2) Purpose.--The purpose of this section is to 
        significantly accelerate the deployment of gasification 
        technologies for industrial application in order to--
                    (A) to produce the natural gas equivalent of 
                1,000,000,000 cubic feet of natural gas annually, or 5 
                percent of the total demand for natural gas;
                    (B) to reduce imports of energy from foreign energy 
                sources;
                    (C) to preserve domestic jobs;
                    (D) to reduce the demand pressure on domestic 
                natural gas prices and supply for all consumers by 
                promoting the use of gas derived from--
                            (i) domestic coal;
                            (ii) biomass; and
                            (iii) other domestic fuel sources for 
                        industrial use;
                    (E) to avoid dependence on remote foreign sources 
                for chemicals, ammonia-based fertilizers, and other 
                strategic products for which natural gas is 
                traditionally a significant component in the 
                manufacturing process;
                    (F) to promote the use of domestic coal, biomass, 
                and other fuel sources in an environmentally benign 
                manner;
                    (G) to promote the position of the United States as 
                a global leader in advanced gasification technology and 
                related sales; and
                    (H) to promote the potential for future use or 
                sequestration of industrial carbon emissions in an 
                efficient manner.
    (c) Industrial Gasification Demonstration and Deployment Program.--
            (1) Establishment.--The Secretary shall establish and 
        implement an industrial gasification demonstration and 
        deployment program.
            (2) Solicitation of applications.--Not less frequently than 
        every 18 months, the Secretary, in consultation with the 
        Secretary of the Treasury, shall solicit from eligible entities 
        applications for Federal assistance described in subsection (e) 
        for the construction and operation of facilities that gasify 
        coal, petroleum residues, or biomass.
            (3) Regulations.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary, after 
                consultation with the Secretary of the Treasury, shall 
                issue final regulations to carry out this section.
                    (B) Limitation.--The regulations shall be--
                            (i) limited to the activities described in 
                        this section; and
                            (ii) generally consistent with the Federal 
                        Nonnuclear Energy Research and Development Act 
                        of 1974 (42 U.S.C. 5901 et seq.).
            (4) Study of regulatory barriers.--
                    (A) In general.--The Secretary shall conduct a 
                study of the barriers to timely deployment of 
                commercial gasification projects under this subsection.
                    (B) Consultation.--In carrying out the study, the 
                Secretary shall consult with--
                            (i) Federal and State regulatory agencies;
                            (ii) potential industrial and utility users 
                        and vendors of gasification technology;
                            (iii) suppliers and transporters of any 
                        feedstock materials or plant products;
                            (iv) financial institutions; and
                            (v) knowledgeable public citizens.
            (5) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to the 
        Committee on Energy and Natural Resources of the Senate a 
        report describing--
                    (A) the results of the study under paragraph (4); 
                and
                    (B) recommendations of the Secretary that may 
                facilitate the introduction of gasification technology.
    (d) Project Criteria.--
            (1) In general.--On evaluating an application for Federal 
        financial assistance described in subsection (e), the 
        Secretary, in consultation with the Secretary of the Treasury, 
        shall consider--
                    (A) the potential of the proposed project to 
                surpass existing environmental standards in the 
                proposed project area;
                    (B) the likelihood of the project to preserve 
                domestic jobs at the proposed site and through 
                subsequent replications of the technology;
                    (C) the degree to which the proposed project, and 
                anticipated replications of the technology used in the 
                project, may provide substitutes for natural gas on a 
                cost-effective basis compared to other applications 
                proposed by eligible entities;
                    (D) the technical and economic feasibility of the 
                project;
                    (E) the financial viability of the project;
                    (F) an expectation that private equity in the 
                project will equal at least 20 percent of total plant 
                investment;
                    (G) the likelihood that replications of the 
                technology will create significant markets for domestic 
                vendors of the technology;
                    (H) the diversity of the technological approaches 
                and regional locations of the projects selected, except 
                that, unless no such project is proposed by an eligible 
                entity--
                            (i) at least 1 of the industrial 
                        gasification projects selected shall use coal; 
                        and
                            (ii) at least 1 of the industrial 
                        gasification projects selected shall use 
                        biomass;
                    (I) a determination that the plant will be carbon-
                capture ready, as applicable; and
                    (J) any other criteria the Secretary publishes in a 
                solicitation to achieve the purpose of this section.
            (2) Factors of additional weight.--In evaluating a project 
        that gasifies coal or petroleum residue, the Secretary shall 
        give additional weight to a project proposal that contains 
        separation, sequestration, or use of carbon or other gases in 
        the process waste stream that have a radiative index greater 
        than or equal to that of carbon dioxide.
    (e) Financial Assistance.--
            (1) Types of assistance.--
                    (A) In general.--In carrying out this section, the 
                Secretary may award to an eligible entity selected by 
                the Secretary--
                            (i) a loan;
                            (ii) a loan guarantee;
                            (iii) price supports; or
                            (iv) goods the purchase prices of which are 
                        incurred by the Secretary.
                    (B) Loans and loan guarantees.--
                            (i) In general.--A loan or loan guarantee 
                        provided under clause (i) or (ii) of 
                        subparagraph (A)--
                                    (I) shall not exceed 80 percent of 
                                the total project investment; and
                                    (II) shall be backed by the full 
                                faith and credit of the United States.
                            (ii) Non-federal equity investment.--An 
                        eligible entity shall--
                                    (I) provide a non-Federal equity 
                                investment equal to not less than 20 
                                percent of the total project 
                                investment; and
                                    (II) apply the non-Federal equity 
                                investment to the long-term debt 
                                obligations of the project, which--
                                            (aa) may, at the discretion 
                                        of the Secretary, be 
                                        nonrecourse; and
                                            (bb) shall have a term not 
                                        greater than 30 years.
            (2) Eligibility for more than 1 type of assistance.--
                    (A) Limitations.--The Secretary may provide, or 
                certify an eligible entity to receive, any financial 
                incentive described in paragraph (1) for a project if 
                the aggregate value of incentives made available to an 
                applicant (as determined by the Congressional Budget 
                Office) does not exceed--
                            (i) $175,000,000 for each incentive, as of 
                        the date of enactment of this Act; and
                            (ii) 20 percent of the total capital cost 
                        of the project.
                    (B) Contracts between the Secretary and project 
                sponsors.--A contract between the Secretary and a 
                project sponsor regarding an industrial gasification 
                project shall not count against the limitations 
                described in subparagraph (A).
    (f) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        the Secretary to carry out this section $2,000,000,000, to 
        remain available until expended.
            (2) Schedule.--The amount authorized to be appropriated 
        under paragraph (1) shall be available to the Secretary on the 
        following schedule:
                    (A) For fiscal year 2006, $400,000,000.
                    (B) For fiscal year 2007, $300,000,000.
                    (C) For fiscal year 2008, $300,000,000.
                    (D) For fiscal year 2009, $300,000,000.
                    (E) For fiscal year 2010, $200,000,000.
                    (F) For fiscal year 2011, $125,000,000.
                    (G) For fiscal year 2012, $100,000,000.
                    (H) For fiscal year 2013, $75,000,000.
                    (I) For fiscal year 2014, $50,000,000.
                    (J) For fiscal year 2015, $50,000,000.

SEC. 114. CARBON CAPTURE AND SEQUESTRATION ENERGY EFFICIENCY RESEARCH 
              AND DEVELOPMENT.

    (a) Research and Development Program.--The Secretary shall carry 
out a program of research and development to improve the efficiency and 
reduce the capital cost of processes used to capture and sequester 
carbon dioxide that is produced by coal-fired power plants to reduce 
the cost of carbon capture and sequestration.
    (b) Grants and Cooperative Agreements.--In carrying out the program 
under subsection (a), the Secretary may make any grant or enter into 
any cooperative agreement that the Secretary determines to be 
appropriate, in accordance with the Federal Nonnuclear Energy Research 
and Development Act of 1974 (42 U.S.C. 5901 et seq.) or any other 
Federal law.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary to carry out this section.

                          TITLE II--PRODUCTION

SEC. 201. GAS ONLY LEASES.

    Section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337) 
is amended by adding at the end the following:
    ``(p)(1) The Secretary may issue a lease under this section 
beginning at the 2007-2012 plan period that authorizes development and 
production only of gas and associated condensate in accordance with 
regulations issued under paragraph (2).
    ``(2) Before July 1, 2006, the Secretary shall issue regulations 
that, for purposes of this section--
            ``(A) define what constitutes gas, condensate, and oil;
            ``(B) establish the rights and obligations of a lessee 
        regarding condensate produced in association with gas;
            ``(C) prescribe procedures and requirements that the lessee 
        shall follow if the lessee discovers oil deposits in the course 
        of exploration or development; and
            ``(D) establish any other requirements for gas-only leases 
        that the Secretary determines are appropriate.
    ``(3) At the request of a lessee or the producing State, the 
Secretary may restrict development under such a lease to gas and 
associated condensate.
    ``(4) Any Federal law (including a regulation) that applies to an 
oil and gas lease on the Outer Continental Shelf applies to a gas-only 
lease issued under this section.''.

SEC. 202. EASTERN GULF OF MEXICO.

    Section 4(a)(2) of the Outer Continental Shelf Lands Act (43 U.S.C. 
1333(a)(2)) is amended--
            (1) by inserting ``(i)'' after ``(A)'';
            (2) in the first sentence--
                    (A) by striking ``President'' and inserting 
                ``Secretary''; and
                    (B) by inserting before the period at the end the 
                following: ``not later than 270 days after the date of 
                enactment of the Natural Gas Price Reduction Act of 
                2005''; and
            (3) by adding at the end the following:
    ``(ii) For the purpose solely of determining boundaries for 
offshore oil and gas development and revenue sharing, the Secretary 
shall delimit the lateral boundaries between coastal States, to the 
extent of the exclusive economic zone of the United States, in 
accordance with--
            ``(I) any judicial decree or interstate compact delimiting 
        lateral offshore boundaries between coastal States;
            ``(II) any principles of domestic and international law 
        governing the delimitation of lateral offshore boundaries; and
            ``(III) to the maximum extent practicable, existing lease 
        boundaries and block lines based on the official protraction 
        diagrams of the Secretary.
    ``(iii) Not later than December 31, 2007, the Secretary shall amend 
any 5-year leasing program relating to the outer Continental Shelf and 
offer for gas, or oil and gas, leasing the unleased blocks in the Lease 
Sale 181 area if the lease sale--
            ``(I) is not in the State of Florida; and
            ``(II) does not conflict with training or operations of the 
        United States military.
    ``(iv) If a lease sale under clause (iii) is located more than 20 
miles off the coast of the State of Alabama and the State of Florida, 
the lease shall be considered by the Secretary of Commerce and the 
Secretary of the Interior to be necessary to the interest of national 
security for purposes of the Coastal Zone Management Act (16 U.S.C. 
1451 et seq.).''.

SEC. 203. REVIEW OF STATE REQUESTS TO EXAMINE OCS ENERGY AREAS.

    Section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 
1344) is amended by adding at the end the following:
    ``(i)(1) In this subsection:
            ``(A) The term `lease' includes a gas-only lease under 
        section 8.
            ``(B) The term `moratorium area' means--
                    ``(i) any area withdrawn from disposition by 
                leasing by the `Memorandum on Withdrawal of Certain 
                Areas of the United States Outer Continental Shelf from 
                Leasing Disposition', from 34 Weekly Comp. Pres. Doc. 
                1111, dated June 12, 1998; and
                    ``(ii) any area of the outer Continental Shelf as 
                to which Congress has denied the use of appropriated 
                funds or other means for preleasing, leasing, or 
                related activities.
    ``(2)(A) A moratorium on gas, or oil and gas, leasing on the outer 
Continental Shelf shall be effective with respect to the area off the 
coast of a State only if the Governor of the State consents to the 
moratorium.
    ``(B) At any time, the Governor of an affected State, acting on 
behalf of the State, may request the Secretary to provide a current 
estimate of proven and potential gas, or oil and gas, resources in any 
moratorium area (or any part of the area the Governor identifies) 
adjacent, or lying seaward of the coastline, to that State.
    ``(C) Not later than the date that is 45 days after a Governor of a 
State requests an estimate under subparagraph (B), the Secretary shall 
provide--
            ``(i) a delimitation of the lateral boundaries between the 
        coastal States in accordance with section 4(a)(2);
            ``(ii) a current inventory of proven and potential gas, or 
        oil and gas, resources in any moratorium areas in the State, as 
        requested by the Governor; and
            ``(iii) an explanation of the planning processes that could 
        lead to the leasing, exploration, development, and production 
        of the gas, or oil and gas, resources within the area 
        identified.
    ``(3)(A) On consideration of the information received from the 
Secretary, the Governor (acting on behalf of the State of the Governor) 
may decide--
            ``(i) not to consent to a moratorium on gas, or oil and 
        gas, leasing on the outer Continental Shelf off the coast of 
        the State of the Governor; or
            ``(ii) to repeal any restriction preventing spending 
        appropriated funds for preleasing, leasing, and related 
        activities as to the area identified in the request of the 
        Governor.
    ``(B) If the Governor makes a decision under subparagraph (A), the 
Governor shall submit to the President, the Secretary, and Congress a 
notification of the decision, including a description of--
            ``(i) the area on which a moratorium on gas, or oil and 
        gas, leasing would have been imposed; and
            ``(ii) any restriction repealed under subparagraph (A)(ii).
    ``(C) On receipt of notification by a Governor under subparagraph 
(B), the Secretary shall--
            ``(i) treat the notification as a proposed revision to the 
        leasing program maintained under this section; and
            ``(ii) give expedited consideration to the proposed 
        revision.
    ``(D) For purposes of title III of the Coastal Zone Management Act 
of 1972 (16 U.S.C. 1451 et seq.), any activity relating to leasing and 
subsequent production in an area restored to consideration for gas, or 
oil and gas, leasing under this paragraph shall--
            ``(i) if the leased area is located more than 20 miles 
        offshore of an adjacent State, be considered by the Secretary 
        as necessary to the interest of national security and be 
        carried out notwithstanding the objection of a State to a 
        consistency certification under that Act; or
            ``(ii) if the leased area is located not greater than 20 
        miles offshore of an adjacent State, be subject to section 
        307(c) of the Coastal Zone Management Act (16 U.S.C. 1456(c)).
    ``(E) An activity under subparagraph (C)(i) shall be carried out in 
accordance with any applicable approved State management program, to 
the maximum extent practicable.
    ``(4)(A)(i) If the Governor of a State requests the President to 
allow gas, or oil or natural gas, leasing in the moratorium area and 
the President allows that leasing, the State shall, without further 
appropriation or action, receive 100 percent of any bonus bid paid for 
leasing rights in the area.
    ``(ii) The payments under clause (i) shall end not later than the 
earlier of--
            ``(I) the date that is 5 years after the first lease sale 
        in the area; or
            ``(II) the date on which production begins in the area.
    ``(B)(i) On the commencement of production in an area under this 
subsection, the State shall share in any qualified revenues of the 
production without further action or appropriation in accordance with 
section 32(b).
    ``(ii) The share of the State under clause (i) shall be not less 
than 12.5 percent of the total qualified revenues of the production.
    ``(iii) For the purposes of section 32--
            ``(I) the State shall be considered to be a coastal 
        producing State; and
            ``(II) the share of the State under clause (i) shall be 
        considered to be qualified revenues.
    ``(C) After making distributions in accordance with subparagraphs 
(A) and (B), and in accordance with section 31, the Secretary shall, 
without further appropriation or action, distribute a conservation 
royalty of at least 12.5 percent of any remaining qualified revenues 
from an area leased under this section in equal amounts, not to exceed 
$1,250,000,000 for any year, to--
            ``(I) the Land and Water Conservation Fund to provide 
        financial assistance to the Federal Government under section 5 
        of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 
        460l-7);
            ``(II) the Land and Water Conservation Fund to provide 
        financial assistance to States under section 6 of that Act (16 
        U.S.C. 460l-8); and
            ``(III) the wildlife restoration fund established under 
        section 3 of the Pittman-Robertson Wildlife Restoration Act (16 
        U.S.C. 669b).
    ``(4) The State shall be entitled to any revenues that a coastal 
State would be entitled to receive under section 8(g).
    ``(5) This subsection shall not apply to any area designated as a 
national marine sanctuary or a national wildlife refuge.''.

SEC. 204. ROYALTY RELIEF FOR DEEP WATER PRODUCTION.

    (a) In General.--For all tracts 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 within 5 
years after the date of enactment of this Act shall use the bidding 
system authorized in section 8(a)(1)(H) of the Outer Continental Shelf 
Lands Act (43 U.S.C. 1337(a)(1)(H)), except that the suspension of 
royalties shall be set at a volume of not less than--
            (1) 5,000,000 barrels of oil equivalent for each lease in 
        water depths of 400 to 800 meters;
            (2) 9,000,000 barrels of oil equivalent for each lease in 
        water depths of 800 to 1,600 meters; and
            (3) 12,000,000 barrels of oil equivalent for each lease in 
        water depths greater than 1,600 meters.
    (b) Limitation.--The Secretary of the Interior may place 
limitations on the suspension of royalty relief granted based on market 
price.

SEC. 205. COASTAL IMPACT ASSISTANCE PROGRAM.

    The Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) is 
amended by adding at the end the following:

``SEC. 32. 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--
                    ``(A) is within the coastal zone (as defined in 
                section 304 of the Coastal Zone Management Act of 1972 
                (16 U.S.C. 1453)) of the State; and
                    ``(B) is not more than 200 miles from the 
                geographic center of a 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 coastal zone management program of the 
        State 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 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) Political subdivision.--The term `political 
        subdivision' means the local political jurisdiction immediately 
        below the level of State government, including counties, 
        parishes, and boroughs.
            ``(8) Producing state.--
                    ``(A) In general.--The term `producing State' means 
                a coastal State with a coastal seaward boundary within 
                200 miles of the geographic center of a leased tract.
                    ``(B) Exclusion.--The term `producing State' does 
                not include 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 that date.
            ``(9) 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 the zone covered by 
                                section 8(g), but to which section 8(g) 
                                does not apply; and
                            ``(ii) the geographic center of which lies 
                        within 200 miles of 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 (other than revenues received under section 
                18(i)) 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 that date.
    ``(b) Payments to Producing States and Coastal Political 
Subdivisions.--
            ``(1) In general.--For each of fiscal years 2006 through 
        2011, the Secretary shall, without further appropriation, 
        disburse an amount equal to not more than 12.5 percent of 
        qualified outer Continental Shelf revenues among producing 
        States and coastal political subdivisions, in accordance with 
        this section.
            ``(2) Disbursement.--In each fiscal year, the Secretary 
        shall, without further appropriation, disburse to each 
        producing State for which the Secretary has approved a plan 
        under subsection (c), and to coastal political subdivisions 
        under paragraph (4), the funds allocated to the producing State 
        or coastal political subdivision under this section for the 
        fiscal year.
            ``(3) Allocation among producing states.--
                    ``(A) In general.--The transferred amount 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) Qualified outer continental shelf revenues.--
                            ``(i) Fiscal years 2006 through 2008.--For 
                        each of fiscal years 2006 through 2008, a 
                        calculation of a payment under this subsection 
                        shall be based on qualified outer Continental 
                        Shelf revenues received during fiscal year 
                        2005.
                            ``(ii) Fiscal years 2009 through 2011.--For 
                        each of fiscal years 2009 through 2011, a 
                        calculation of a payment under this subsection 
                        shall be based on qualified outer Continental 
                        Shelf revenues received during fiscal year 
                        2008.
                    ``(C) Multiple producing states.--If more than 1 
                producing State is located within 200 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.--An amount allocated to a 
                producing State under this paragraph shall be not less 
                than 1 percent of the transferred amount.
            ``(4) Payments to coastal political subdivisions.--
                    ``(A) In general.--The Secretary shall pay 35 
                percent of the amount allocated 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 louisiana.--For the purposes of 
                subparagraph (B)(ii), the coastline for coastal 
                political subdivisions in the State of Louisiana 
                without a coastline shall be the average length of the 
                coastline of all other coastal political subdivisions 
                in the State of Louisiana.
                    ``(D) Exception for alaska.--For the purposes of 
                carrying out subparagraph (B)(iii) in the State of 
                Alaska, the amount 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.
            ``(5) No approved plan.--
                    ``(A) In general.--Subject to subparagraph (B) and 
                except as provided in subparagraph (C), if any amount 
                allocated to a producing State or coastal political 
                subdivision under paragraph (3) or (4) 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 the date that the final appeal 
                regarding the disapproval of a plan submitted under 
                subsection (c) is decided.
                    ``(C) Waiver.--The Secretary may waive the 
                requirements of 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 plan.--
                    ``(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 to a plan.--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.--Except as provided in subparagraph (B), 
        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 any amount 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 a use 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, education, health care, 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 all amounts obligated for 
        unauthorized uses have been repaid or reobligated for 
        authorized uses.''.

SEC. 206. ROCKY MOUNTAIN GAS PRODUCTION.

     Section 1421(d) of the Safe Drinking Water Act (42 U.S.C. 300h(d) 
is amended by striking paragraph (1) and inserting the following:
            ``(1) Underground injection.--
                    ``(A) In general.--The term `underground injection' 
                means the subsurface emplacement of fluids by well 
                injection.
                    ``(B) Exclusions.--The term `underground injection' 
                excludes--
                            ``(i) the underground injection of natural 
                        gas for purposes of storage; and
                            ``(ii) the underground injection of fluids 
                        or propping agents pursuant to hydraulic 
                        fracturing operations related to an oil or gas 
                        production activity.''.

SEC. 207. GAS METHANE RESEARCH.

    (a) Research Center.--Section 3(b)(1) of the Methane Hydrate 
Research and Development Act of 2000 (30 U.S.C. 1902 note) is amended--
            (1) in subparagraph (F), by striking ``and'' at the end;
            (2) in subparagraph (G), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(H) establish a Virginia Beach Methane Hydrates 
                Research Center in Virginia Beach, Virginia.''.
    (b) Authorization of Appropriations.--Section 5 of the Methane 
Hydrate Research and Development Act of 2000 (30 U.S.C. 1902 note) is 
amended to read as follows:

``SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to the Secretary of Energy 
to carry out this Act $50,000,000 for each of fiscal years 2006 through 
2009, to remain available until expended.''.
    (c) Sunset.--Section 6 of the Methane Hydrate Research and 
Development Act of 2000 (30 U.S.C. 1902 note) is amended by striking 
``2005'' and inserting ``2009''.

SEC. 208. ALASKA NATURAL GAS PIPELINE ACT.

     The Alaska Natural Gas Pipeline Act (15 U.S.C. 720 et seq.) is 
amended--
            (1) in section 103 (15 U.S.C. 720a), by adding at the end 
        the following:
    ``(j) Report.--Not later than the date that is 180 days after the 
date of enactment of the Natural Gas Price Reduction Act of 2005 and 
every 180 days thereafter until the Alaska natural gas pipeline begins 
operation, the Commission shall submit to Congress a report describing 
the progress made in licensing and constructing such pipeline and any 
issues impeding that progress.''; and
            (2) in section 107(a) (15 (U.S.C. 720e(a)), by striking 
        paragraph (3) and inserting the following:
            ``(3) the validity of any determination, permit, approval, 
        authorization, review, or other such action taken under any 
        provision of law (including subchapter II of chapter 5, and 
        chapter 7, of title 5, United States Code (commonly known as 
        the Administrative Procedure Act), the Endangered Species Act 
        of 1973 (16 U.S.C. 1531 et seq.), the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4231 et seq.), and the National 
        Historic Preservation Act (16 U.S.C. 470 et seq.)) that relates 
        to a gas transportation project under section 103.''.

SEC. 209. GAS HYDRATE PRODUCTION INCENTIVES.

    (a) Purpose.--The purpose of this section is to promote natural gas 
production from the abundant natural gas hydrate resources on the outer 
Continental Shelf and Federal land in Alaska by providing royalty 
incentives for the production.
    (b) Suspension of Royalties.--
            (1) Definitions.--In this subsection:
                    (A) Eligible lease.--The term ``eligible lease'' 
                means a lease--
                            (i) that is issued under the Outer 
                        Continental Shelf Lands Act (43 U.S.C. 1331 et 
                        seq.);
                            (ii) that is issued before January 1, 2016; 
                        and
                            (iii) in the case of a lease of natural 
                        gas, production from the gas hydrate resource 
                        under that begins not later than December 31, 
                        2017.
                    (B) Gas hydrate resource.--The term ``gas hydrate 
                resource'' includes--
                            (i) the natural gas content of a gas 
                        hydrate within the hydrate stability zone; and
                            (ii) free natural gas trapped by and 
                        beneath the hydrate stability zone.
            (2) Suspension of royalties.--
                    (A) In general.--The Secretary of the Interior 
                shall suspend royalties under this section for gas 
                hydrate resources with a suspension volume of not less 
                than 50,000,000,000 cubic feet of natural gas produced 
                from the resource per square mile of the leased tract.
                    (B) Size of leased tracts.--The minimum suspension 
                volume under this section for a leased tract that is 
                smaller or larger than 9 square miles shall be adjusted 
                proportionally.
            (3) Effect of suspension.--The suspension of royalties 
        under this section shall be in addition to royalty relief under 
        any law that does not grant a gas hydrate production incentive.
    (c) Rulemaking.--Not later than 1 year after the date of enactment 
of this Act, the Secretary shall complete any rulemaking necessary to 
carry out this section.

SEC. 210. OIL AND GAS EXPLORATION AND PRODUCTION DEFINED.

     Section 502 of the Federal Water Pollution Control Act (33 U.S.C. 
1362) is amended by adding at the end the following:
            ``(24) Oil and gas exploration and production, processing, 
        or treatment operations or transmission facilities.--The term 
        `oil and gas exploration and production, processing, or 
        treatment operations or transmission facilities' means all 
        field activities or operations associated with oil or gas 
        exploration, production, processing, or treatment operations, 
        or with oil or gas transmission facilities, including 
        activities necessary to prepare a site for drilling and for the 
        movement and placement of drilling equipment, whether or not 
        such field activities or operations may be considered to be 
        construction activities.''.

SEC. 211. MARGINAL PROPERTY PRODUCTION INCENTIVES.

    (a) Definition of Marginal Property.--
            (1) In general.--Until the Secretary of the Interior 
        promulgates 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 million 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 the Secretary 
of the Interior promulgates regulations under subsection (e) that 
prescribe different thresholds or standards, the Secretary of the 
Interior shall reduce the royalty rate on--
            (1) oil production from marginal properties as described in 
        subsection (c) if the spot price of West Texas Intermediate 
        crude oil at Cushing, Oklahoma, is, on average, less than $15 
        per barrel for 90 consecutive trading days; and
            (2) gas production from marginal properties as described in 
        subsection (c) if the spot price of natural gas delivered at 
        Henry Hub, Louisiana, is, on average, less than $2 per million 
        British thermal units for 90 consecutive trading days.
    (c) Reduced Royalty Rate.--
            (1) In general.--When a marginal property meets the 
        conditions described in subsection (b), the royalty rate shall 
        be the lesser of--
                    (A) 5 percent; or
                    (B) the 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 described 
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 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 per 
                million British thermal units 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 of the 
        Interior 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) Mandatory regulations.--Not later than 18 months after 
        the date of enactment of this Act, the Secretary of the 
        Interior shall by regulation--
                    (A) prescribe standards and requirements for, and 
                the extent of royalty relief for, marginal properties 
                for oil and gas leases on the Outer Continental Shelf; 
                and
                    (B) define what constitutes a marginal property on 
                the Outer Continental Shelf for the purposes of this 
                section.
            (3) Considerations.--In promulgating regulations under this 
        subsection, the Secretary of the Interior 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.
    (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. 212. EFFICIENT GOVERNMENT PROCESSING OF PERMIT APPLICATIONS.

    (a) Executive Orders Codified.--Executive Orders numbered 13211 and 
13212, issued on May 18, 2001 (66 Fed. Reg. 28,355; 66 Fed. Reg. 
28,357), are enacted into law.
    (b) Processing Performance Report.--
            (1) In general.--Not later than December 31, 2006, and 
        annually thereafter, the Secretary of Energy shall submit to 
        Congress a report evaluating the performance of the task force 
        established under Executive Order number 13212 (66 Fed. Reg. 
        28,357) in carrying out the duties of the task force.
            (2) Inclusion.--The report described in paragraph (1) shall 
        include--
                    (A) the number of permits processed by the task 
                force in the preceding year;
                    (B) the average time required by the task force to 
                take a final action;
                    (C) a description of any environmental variance 
                issued by the task force;
                    (D) an identification of any impediment to 
                efficient processing of permits by the task force; and
                    (E) any incentive created to reduce processing time 
                of the task force.

SEC. 213. DEADLINE FOR DECISION ON APPEALS OF CONSISTENCY 
              DETERMINATION.

    (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.--The Secretary shall publish an initial 
notice in the Federal Register not later than 30 days after the date of 
the filing of any appeal to the Secretary of a consistency 
determination under section 307.
    ``(b) Closure of Record.--(1) Not later than the end of the 120-day 
period beginning on the date of publication of an initial notice under 
subsection (a)--
            ``(A) the Secretary shall receive no more filings on the 
        appeal; and
            ``(B) the administrative record regarding the appeal shall 
        be closed.
    ``(2) On the closure of the administrative record, the Secretary 
shall publish a notice that the administrative record has been closed.
    ``(c) Deadline for Decision.--Not later than 120 days after the 
closure of the administrative record, the Secretary shall issue a 
decision in any appeal filed under section 307.
    ``(d) Application.--This section applies to--
            ``(1) any appeal initiated by the Secretary; and
            ``(2) any appeal filed by an applicant.''.
    (b) Application.--Section 319(a) of the Coastal Zone Management Act 
of 1972 (as amended by this subsection (a)) shall not apply to an 
appeal initiated or filed before the date of enactment of this Act.
    (c) Closure of Record for Appeal Filed Before Date of Enactment.--
Notwithstanding section 319(b)(1) of the Coastal Zone Management Act of 
1972 (as amended by subsection (a)), in the case of an appeal of a 
consistency determination under section 307 of that Act initiated or 
filed before the date of enactment of this Act--
            (1) the Secretary of Commerce shall receive no more filings 
        on the appeal; and
            (2) not later than 120 days after the date of enactment of 
        this Act, the administrative record regarding the appeal shall 
        be closed.

SEC. 214. OUTER CONTINENTAL SHELF PROVISIONS.

    (a) Storage on the Outer Continental Shelf.--Section 5(a)(5) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1334(a)(5)) is amended by 
inserting ``from any source'' after ``oil and gas''.
    (b) Deepwater Projects.--Section 6 of the Deepwater Port Act of 
1974 (33 U.S.C. 1505) is amended by adding at the end the following:
    ``(d) In carrying out section 5(f)--
            ``(1) to the extent that other Federal agencies have 
        prepared environmental impact statements, are conducting 
        studies, or are monitoring the affected human, marine, or 
        coastal environment, the Secretary may use the information 
        derived from those activities in lieu of directly conducting 
        the activities; and
            ``(2) the Secretary may use information obtained from any 
        State or local government or from any person.''.
    (c) Natural Gas Defined.--Section 3 of the Deepwater Port Act of 
1974 (33 U.S.C. 1502) is amended by striking paragraph (13) and 
inserting the following:
            ``(13) `natural gas' means--
                    ``(A) natural gas unmixed; or
                    ``(B) any mixture of natural or artificial gas, 
                including compressed or liquefied natural gas, natural 
                gas liquids, liquefied petroleum gas, and condensate 
                recovered from natural gas;''.

SEC. 215. OFFICE OF FEDERAL ENERGY PROJECT COORDINATION.

    (a) Establishment.--The President shall establish the Office of 
Federal Energy Project Coordination (referred to in this section as the 
``Office'') within the Executive Office of the President in the same 
manner and with the same mission as the White House Energy Projects 
Task Force established by Executive Order No. 13212 (42 U.S.C. 13201 
note).
    (b) Staff.--The Office shall be staffed by functional experts from 
relevant Federal agencies on a nonreimbursable basis to carry out the 
mission of the Office.
    (c) Report.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, and annually thereafter, the Office 
        shall submit to Congress a report that describes any activity 
        carried out under this section to coordinate and expedite 
        Federal decisions on energy projects.
            (2) Inclusions.--The report shall include a description 
        of--
                    (A) any progress made toward improving the Federal 
                decisionmaking process; and
                    (B) any additional recommendation of the Office 
                relating to a change required to establish a more 
                effective and efficient Federal permitting process.

SEC. 216. FEDERAL ONSHORE OIL AND GAS LEASING AND PERMITTING PRACTICES.

    (a) Review of Onshore Oil and Gas Leasing Practices.--
            (1) In general.--The Secretary of the Interior, in 
        consultation with the Secretary of Agriculture with respect to 
        National Forest System land under the jurisdiction of the 
        Department of Agriculture, shall perform an internal review of 
        current Federal onshore oil and gas leasing and permitting 
        practices.
            (2) Inclusions.--The review shall include the process for--
                    (A) accepting or rejecting an offer to lease;
                    (B) an administrative appeal of a decision or order 
                of an officer or employee of the Bureau of Land 
                Management with respect to a Federal oil or gas lease;
                    (C) considering a surface use plan of operation, 
                including the timeframe during which a plan shall be 
                considered and any recommendation of the Secretary of 
                the Interior for improving and expediting the process; 
                and
                    (D) identifying a stipulation to address a site-
                specific concern or condition, including a stipulation 
                relating to an environment or resource use conflict.
    (b) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary of the Interior and the Secretary of 
Agriculture shall submit to Congress a report that describes--
            (1) any action taken under section 3 of Executive Order No. 
        13212 (42 U.S.C. 13201 note); and
            (2) any action taken relating to, or any plan to improve, 
        the Federal onshore oil and gas leasing program.

SEC. 217. MANAGEMENT OF FEDERAL OIL AND GAS LEASING PROGRAMS.

    (a) Timely Action on Leases and Permits.--To ensure timely action 
relating to oil and gas leases and applications for permits to drill on 
land otherwise available for leasing, the Secretary of the Interior 
shall--
            (1) ensure expeditious compliance with section 102(2)(C) of 
        the National Environmental Policy Act of 1969 (42 U.S.C. 
        4332(2)(C));
            (2) improve consultation and coordination with the States 
        and the public; and
            (3) improve the collection, storage, and retrieval of 
        information relating to a leasing activity.
    (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 any oil or gas lease or 
                application for a permit to drill on land otherwise 
                available for leasing.
            (2) Considerations.--In developing the best management 
        practices under paragraph (1), the Secretary shall consider any 
        recommendations from the review under section 216.
            (3) Regulations.--Not later than 180 days after the 
        development of 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 practices, 
        including deadlines for--
                    (A) approving or disapproving resource management 
                plans and related documents, lease applications, and 
                surface use plans; and
                    (B) related administrative appeals.
    (c) Improved Enforcement.--The Secretary shall improve inspection 
and enforcement of oil and gas activities, including enforcement of 
terms and conditions in permits to drill.
    (d) Authorization of Appropriations.--In addition to amounts 
authorized to be appropriated to carry out section 17 of the Mineral 
Leasing Act (30 U.S.C. 226), there are authorized to be appropriated to 
the Secretary for each of fiscal years 2006 through 2009--
            (1) $40,000,000 to carry out subsections (a) and (b); and
            (2) $20,000,000 to carry out subsection (c).

SEC. 218. 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 oil and gas lease 
        applications, surface use plans of operation, and applications 
        for permits to drill, including steps for processing surface 
        use plans and applications for permits to drill consistent with 
        the timelines established by the amendment made by section 220;
            (2) eliminate duplication of effort by providing for 
        coordination of planning and environmental compliance efforts; 
        and
            (3) ensure that any stipulation in a lease is--
                    (A) applied consistently;
                    (B) coordinated between agencies; and
                    (C) only as restrictive as necessary to protect the 
                resource for which the stipulation is applied.
    (c) Data Retrieval System.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of the Interior and the 
        Secretary of Agriculture shall establish a joint data retrieval 
        system to--
                    (A) track applications and formal requests made in 
                accordance with the Federal onshore oil and gas leasing 
                program; and
                    (B) provide information regarding the status of an 
                application or request in the Department of the 
                Interior and the Department of Agriculture.
            (2) Resource mapping.--Not later than 2 years after the 
        date of enactment of this Act, the Secretary of the Interior 
        and the Secretary of Agriculture shall establish a joint 
        Geographic Information System mapping system to--
                    (A) track surface resource values to aid in 
                resource management; and
                    (B) process surface use plans of operation and 
                applications for permits to drill.

SEC. 219. PILOT PROJECT TO IMPROVE FEDERAL PERMIT COORDINATION.

    (a) Definitions.--In this section:
            (1) Memorandum of understanding.--The term ``memorandum of 
        understanding'' means the memorandum of understanding entered 
        into under subsection (c).
            (2) Pilot project.--The term ``pilot project'' means the 
        Federal permit streamline pilot project established under 
        subsection (b).
            (3) Pilot project office.--The term ``pilot project 
        office'' means each of the following field offices of the 
        Bureau of Land Management:
                    (A) Rawlins, Wyoming.
                    (B) Buffalo, Wyoming.
                    (C) Miles City, Montana
                    (D) Farmington, New Mexico.
                    (E) Carlsbad, New Mexico.
                    (F) Glenwood Springs, Colorado.
                    (G) Vernal, Utah.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Interior.
    (b) Establishment.--The Secretary shall establish a Federal permit 
streamlining pilot project.
    (c) 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 with the Secretary of Agriculture, 
        the Administrator of the Environmental Protection Agency, and 
        the Chief of Engineers of the Corps of Engineers to carry out 
        the pilot project.
            (2) State participation.--The Secretary may request that 
        the Governors of Wyoming, Montana, Colorado, Utah, and New 
        Mexico enter into the memorandum of understanding.
    (d) Pilot Project Personnel.--
            (1) Designation of initial personnel.--
                    (A) In general.--Not later than 30 days after the 
                date on which the memorandum of understanding is 
                entered into under subsection (c), each of the Federal 
                signatories to the memorandum of understanding referred 
                to in subsection (c)(1) shall assign to each of the 
                pilot project offices, on a nonreimbursable basis, an 
                employee who has expertise in the regulatory issues 
                relating to the office in which the employee is 
                employed, including, as applicable, the areas of 
                expertise described in subparagraph (B).
                    (B) Areas of expertise.--The areas of expertise 
                referred to in subparagraph (A) include expertise in--
                            (i) the consultations and the preparation 
                        of biological opinions under section 7 of the 
                        Endangered Species Act of 1973 (16 U.S.C. 
                        1536);
                            (ii) permits under section 404 of Federal 
                        Water Pollution Control Act (33 U.S.C. 1344);
                            (iii) regulatory matters under the Clean 
                        Air Act (42 U.S.C. 7401 et seq.);
                            (iv) planning under the National Forest 
                        Management Act of 1976 (16 U.S.C. 472a et 
                        seq.); and
                            (v) the preparation of analyses under the 
                        National Environmental Policy Act of 1969 (42 
                        U.S.C. 4321 et seq.).
                    (C) Duties.--Each employee assigned under 
                subparagraph (A) shall--
                            (i) not later than 90 days after the date 
                        of assignment, report to the field manager of 
                        the pilot project office to which the employee 
                        is assigned;
                            (ii) be responsible for all issues relating 
                        to the jurisdiction of the assigning agency or 
                        office; and
                            (iii) participate as part of the team of 
                        personnel working on proposed energy projects, 
                        planning, and environmental analyses.
            (2) Additional personnel.--The Secretary shall assign to 
        each pilot project office any additional personnel the 
        Secretary determines are necessary to ensure the effective 
        implementation of--
                    (A) the pilot project; and
                    (B) other programs administered by the pilot 
                project offices, including inspection and enforcement 
                activities 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).
    (e) Reports.--Not later than 3 years after the date of enactment of 
this Act, the Secretary shall submit to the appropriate committees of 
Congress a report that--
            (1) outlines the results of the pilot project; and
            (2) makes a recommendation to the President on whether the 
        pilot project should be carried out throughout the United 
        States.
    (f) Effect.--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, the employees of which are participating in the 
        pilot project.

SEC. 220. DEADLINE FOR CONSIDERATION OF APPLICATIONS FOR PERMITS.

    Section 17 of the Mineral Leasing Act (30 U.S.C. 226) is amended by 
adding at the end the following:
    ``(p)(1) Not later than 10 days after the date on which the 
Secretary receives an application for a permit to drill, the Secretary 
shall--
            ``(A) notify the applicant that the application is 
        complete; or
            ``(B)(i) notify the applicant that information is missing 
        from the application; and
            ``(ii) specify any information that is required to be 
        submitted for the application to be complete.
    ``(2) Not later than 30 days after an applicant has submitted a 
complete application for a permit to drill, the Secretary shall--
            ``(A) issue the permit; or
            ``(B)(i) defer making a decision on the permit; and
            ``(ii) provide notice to the applicant that specifies any 
        steps that the applicant needs to take for the permit to drill 
        to be issued.
    ``(3)(A) If the Secretary provides notice under paragraph 
(2)(B)(ii), the applicant shall have a period of 2 years from the date 
of receipt of the notice in which to complete all requirements 
specified by the Secretary, including providing information needed for 
compliance with the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.).
    ``(B) If the applicant completes the requirements within the period 
specified in subparagraph (A), the Secretary shall issue a decision on 
the permit not later than 10 days after the date of completion of the 
requirements.
    ``(C) If the applicant does not complete the requirements within 
the period specified in subparagraph (A), the Secretary shall deny the 
permit.
    ``(q) On a quarterly basis, each field office of the Bureau of Land 
Management and the Forest Service shall submit to the Secretary of the 
Interior or the Secretary of Agriculture, respectively, a report that--
            ``(1) specifies the number of applications for permits to 
        drill received by the field office during the period covered by 
        the report; and
            ``(2) describes how each of the applications was disposed 
        of by the field office.''.

                    TITLE III--ENERGY INFRASTRUCTURE

SEC. 301. EXPORTATION AND 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) Nothing in subsections (e) through (h) affects the rights of 
a State 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); or
            ``(3) section 401 of the Federal Water Pollution Control 
        Act (33 U.S.C. 1341).
    ``(e)(1) The Commission shall have the exclusive authority to 
approve or disapprove the siting, construction, expansion, or operation 
of particular facilities (onshore or in State waters) for the import or 
export of natural gas from a foreign country.
    ``(2) No person shall site, construct, expand, or operate a natural 
gas import or export facility (onshore or in State waters) unless the 
Commission has authorized the activity.
    ``(3) Approval of an application under paragraph (1) shall not be 
conditioned on--
            ``(A) a requirement that a liquefied natural gas import 
        terminal shall offer service to any person other than the 
        person to whom approval under paragraph (1) is granted 
        (including an affiliate of such a person);
            ``(B) any regulation relating to the rates, charges, terms, 
        or conditions of service of a liquefied natural gas import 
        terminal; or
            ``(C) a requirement that any schedule or contract relating 
        to the rates, charges, terms, or conditions of service of a 
        liquefied natural gas import terminal be filed with the 
        Commission.
    ``(4) Notwithstanding paragraph (3), a determination of the 
Commission under paragraph (1) relating to the expansion of an existing 
liquefied natural gas import terminal that offers service to customers 
on an open-access basis shall not result in a subsidy by existing 
customers of expansion capacity, degradation of service to existing 
customers, or undue discrimination against existing customers as to the 
terms or conditions of service of those customers at the terminal, as 
determined by the Commission.
    ``(f)(1) Not later than 1 year after the application to site, 
construct, expand, or operate a natural gas import or export facility 
under subsection (d) is complete (as determined by the Commission) the 
Commission shall approve or deny an application .
    ``(2) On the date on which approval is received from the Commission 
under paragraph (1), a natural gas development zone shall be deemed to 
exist in the immediate vicinity of the facility.
    ``(3)(A) With respect to each application approved under paragraph 
(1), the Commission shall establish, consistent with paragraph (1), a 
schedule for all Federal and State administrative proceedings commenced 
under Federal law that are required to be completed before a person may 
site, construct, expand, or operate a natural gas import or export 
facility to ensure timely progress toward any such siting, 
construction, expansion, or operation.
    ``(B) The schedule shall include all Federal and State 
administrative proceedings authorized by Federal law for the siting, 
construction, expansion, or operation of natural gas pipelines and 
facilities relating to the transportation of natural gas from the 
import or export facility.
    ``(C) In establishing the schedule, the Commission shall, to the 
maximum extent practicable, accommodate the applicable schedules 
established by Federal law for the proceedings.
    ``(D) If a Federal or State administrative agency or officer fails 
to complete a proceeding in accordance with the schedule established by 
the Commission--
            ``(i) the action of the Federal or State administrative 
        agency or officer that is required before a person may site, 
        construct, expand, or operate the natural gas import or export 
        facility shall be conclusively presumed; and
            ``(ii) the siting, construction, expansion, or operation 
        shall proceed without further condition.
    ``(4) With respect to the siting, construction, expansion, or 
operation of a natural gas import or export facility, the Commission 
shall compile a single, exclusive administrative record that 
consolidates the records of the proceedings described in paragraph (3).
    ``(5) Any Federal administrative proceeding that is an appeal or 
review of a decision made or action taken by a Federal administrative 
agency or officer (or State administrative agency or officer acting 
under delegated Federal authority) with respect to the siting, 
construction, expansion, or operation of a natural gas import or export 
facility shall use as the exclusive record for all purposes the 
administrative record compiled by the Commission under paragraph (4).
    ``(g) With respect to the siting, construction, expansion, or 
operation of natural gas import or export facilities, the Commission 
shall be the lead Federal agency for purposes of complying with the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
    ``(h) The Commission shall grant the request of any State or local 
agency that requests cooperating agency status in accordance with 
regulations promulgated pursuant to the National Environmental Policy 
Act (42 U.S.C. 4321 et seq.) with respect to a facility that imports or 
exports natural gas.
    ``(i) Nothing in this section grants the Commission any right of 
eminent domain with respect to the siting, construction, expansion, or 
operation of a natural gas import or export facility.''.

SEC. 302. EXPORTATION AND IMPORTATION OF NATURAL GAS FOR OFFSHORE 
              FACILITIES.

    (a) Procedure.--Section 5(e) of the Deepwater Port Act of 1974 (33 
U.S.C. 1504(e)) is amended by adding at the end the following:
    ``(3) Coordination of approval processes.--
            ``(A) In general.--The Secretary, in cooperation with the 
        Federal Energy Regulatory Commission, shall develop a procedure 
        to coordinate the processing of all approvals required by the 
        Secretary or the Federal Energy Regulatory Commission for an 
        offshore transmission facility, or a related facility, that 
        is--
                    ``(i) used to transport natural gas from a 
                deepwater port; and
                    ``(ii) within the jurisdiction of the Federal 
                Energy Regulatory Commission under the Natural Gas Act 
                (15 U.S.C. 717 et seq.).
            ``(B) Inclusion.--The procedure developed under 
        subparagraph (A) shall include a requirement that, on receiving 
        an application relating to the siting, construction, expansion, 
        or operation or an offshore transmission facility, or a related 
        facility, in accordance with the Natural Gas Act (15 U.S.C. 717 
        et seq.), the Federal Energy Regulatory Commission shall 
        approve or deny the application under that Act in accordance 
        with the timeline of the Secretary relating to a similar 
        application under subsections (g) and (i)(1).''.
    (b) Adjacent Coastal States.--Section 9(b)(1) of the Deepwater Port 
Act of 1974 (33 U.S.C. 1508(b)(1)) is amended--
            (1) in the second sentence, by striking ``The Secretary'' 
        and inserting ``Except in the case of a license for a deepwater 
        port for natural gas, the Secretary''; and
            (2) by adding at the end the following: ``In the case of a 
        license for a deepwater port for natural gas located more than 
        20 miles from the coast of a State, a condition on the license 
        shall not negatively affect the construction or operation of 
        the project.''

SEC. 303. NATURAL GAS PIPELINE INFRASTRUCTURE.

    (a) Extension of Facilities; Abandonment of Service.--Section 7 of 
the Natural Gas Act (15 U.S.C. 717f) is amended by adding at the end 
the following:
    ``(i)(1)(A) With respect to each application under subsection (d) 
for authorization to undertake the construction or expansion of a 
facility under the jurisdiction of the Commission, the Commission shall 
establish a schedule for all Federal and State administrative 
proceedings commenced under Federal law that are required to be 
completed before a person may site, construct, expand, or operate a 
natural gas facility to ensure timely progress toward any such siting, 
construction, expansion, or operation.
    ``(B) In establishing the schedule, the Commission shall, to the 
maximum extent practicable, accommodate the applicable schedules 
established by Federal law for the proceedings.
    ``(C) If a Federal or State administrative agency or officer fails 
to complete a proceeding in accordance with the schedule established by 
the Commission--
            ``(i) the action of the Federal or State administrative 
        agency or officer that is required before a person may site, 
        construct, expand, or operate the natural gas facility shall be 
        conclusively presumed; and
            ``(ii) the siting, construction, expansion, or operation 
        shall proceed without further condition.
    ``(2) With respect to the siting, construction, expansion, or 
operation of a natural gas facility subject to the jurisdiction of the 
Commission, the Commission shall compile a single administrative record 
that consolidates the records of the proceedings described in paragraph 
(1).
    ``(3) Any Federal administrative proceeding that is an appeal or 
review of a decision made or action taken by a Federal administrative 
agency or officer (or State administrative agency or officer acting 
under delegated Federal authority) with respect to the siting, 
construction, expansion, or operation of a natural gas facility subject 
to the jurisdiction of the Commission shall use as the exclusive record 
for all purposes the administrative record compiled by the Commission 
under paragraph (2).
    ``(j) With respect to the siting, construction, expansion, or 
operation of natural gas facilities subject to the jurisdiction of the 
Commission, the Commission shall be the lead Federal agency for 
purposes of complying with the National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.).''.
    (b) Rehearing; Court Review of Orders.--Section 19 of the Natural 
Gas Act (15 U.S.C. 717r) is amended by adding at the end the following:
    ``(d)(1) The United States Court of Appeals for the District of 
Columbia Circuit shall have original and exclusive jurisdiction over 
any civil action--
            ``(A) for review of an order or action issued by the 
        Commission under section 3;
            ``(B) for review of an order or action of a Federal or 
        State administrative agency or officer to issue, condition, or 
        deny any permit, license, concurrence, or approval issued under 
        a Federal law required for the siting, construction, expansion, 
        or operation of a natural gas facility for which a certificate 
        of public convenience and necessity is issued by the Commission 
        under this Act;
            ``(C) alleging unreasonable delay or conditioning by a 
        Federal or State administrative agency or officer in entering 
        an order or taking other action described in subparagraph (B); 
        or
            ``(D) challenging a decision made or action taken under 
        this subsection.
    ``(2)(A) If the Court finds that an order, action, or failure to 
act is not consistent with the public convenience or necessity (as 
determined by the Commission under this Act), or would prevent the 
siting, construction, expansion, or operation of natural gas facilities 
authorized by a certificate of public convenience or necessity, the 
permit, license, concurrence, or approval that is the subject of the 
order, action, or failure to act shall be deemed to have been issued 
subject to any conditions set forth in the reviewed order or action 
that the Court finds to be consistent with the public convenience or 
necessity.
    ``(B) For purposes of paragraph (1)(B), the failure of an agency or 
officer to issue a permit, license, concurrence, or approval by the 
later of the date that is 1 year after the date of filing of an 
application for the permit, license, concurrence, or approval or the 
date that is 60 days after the date of issuance of the certificate of 
public convenience or necessity under this section, shall be considered 
unreasonable delay unless the Court, for good cause shown, determines 
otherwise.
    ``(C) The Court shall expedite the consideration of any action 
brought under paragraph (1).''.

SEC. 304. 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) On receiving an application from a natural gas company 
that is the owner or operator of a natural gas storage facility, the 
Commission may allow the company to charge a market-based rate for 
natural gas storage and storage-related services at the facility even 
if the Commission finds that the facility may have the ability to 
exercise market power, if, in the sole discretion of the Commission, 
allowing market-based rates is in the public interest.
    ``(2) The Commission may place reasonable conditions on the 
allowance of the Commission of market-based rates under this 
subsection, such as requiring the storage capacity to be sold through 
an open and transparent auction.
    ``(3) If the Commission allows market-based rates under this 
subsection, the Commission shall review periodically whether the 
storage facility continues to qualify under this subsection to charge 
market-based rates.''.

SEC. 305. BACKUP FUEL CAPABILITY STUDY.

    (a) Study.--The Secretary of Energy shall conduct a study on the 
effect of having liquid and other fuel backup capability for gas-fired 
power generation facilities and for other gas-fired industrial 
facilities.
    (b) Contents.--The study shall address--
            (1) the costs and benefits of adding a different fuel 
        capability to power gas-fired power generating and industrial 
        facilities, taking into consideration regional differences;
            (2) Federal and State government methods of encouraging 
        gas-fired power generators and industries to develop a 
        capability to power the facilities of the generators and 
        industries by another fuel;
            (3) the effect on the supply and cost of natural gas of a 
        balanced portfolio of fuel choices in power generation and 
        industrial applications;
            (4) the effect on the supply and cost of natural gas of a 
        State that permits agencies to carry out policies that 
        encourage other fuel backup for gas-fired power generation; and
            (5) 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.
    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Energy shall submit to Congress 
a report on the results of the study, including recommendations 
regarding further Federal Government activity regarding backup fuel 
capability.
                                 <all>