[Congressional Record Volume 147, Number 157 (Wednesday, November 14, 2001)]
[Senate]
[Pages S11795-S11865]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2122. Mr. THOMAS submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ____. MODIFICATIONS TO SMALL ISSUE BOND PROVISIONS.

       (a) Increase in Amount of Qualified Small Issue Bonds 
     Permitted for Facilities To Be Used by Related Principal 
     Users.--
       (1) In general.--Clause (i) of section 144(a)(4)(A) 
     (relating to $10,000,000 limit in certain cases) is amended 
     by striking ``$10,000,000'' and inserting ``$20,000,000''.
       (2) Cost-of-living adjustment.--Section 144(a)(4) is 
     amended by adding at the end the following:
       ``(G) Cost-of-living adjustment.--In the case of a taxable 
     year beginning in a calendar year after 2002, the $20,000,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     determined by substituting `calendar year 2001' for `calendar 
     year 1992' in subparagraph (B) thereof.''.
       (3) Clerical amendment.--The heading of paragraph (4) of 
     section 144(a) is amended by striking ``$10,000,000'' and 
     inserting ``$20,000,000''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply to--
       (A) obligations issued after the date of the enactment of 
     this Act, and
       (B) capital expenditures made after such date with respect 
     to obligations issued on or before such date.
       (b) Definition of Manufacturing Facility.--
       (1) In general.--Section 144(a)(12)(C) (relating to 
     definition of manufacturing facility) is amended to read as 
     follows:
       ``(C) Manufacturing facility.--For purposes of this 
     paragraph, the term `manufacturing facility' means any 
     facility which is used in--
       ``(i) the manufacturing or production of tangible personal 
     property (including the processing resulting in a change in 
     the condition of such property),
       ``(ii) the manufacturing, development, or production of 
     specifically developed software products or processes if--

       ``(I) it takes more than 6 months to develop or produce 
     such products,
       ``(II) the development or production could not with due 
     diligence be reasonably expected to occur in less than 6 
     months, and
       ``(III) the software product or process comprises programs, 
     routines, and attendant documentation developed and 
     maintained for use in computer and telecommunications 
     technology, or

       ``(iii) the manufacturing, development, or production of 
     specially developed biobased or bioenergy products or 
     processes if--

       ``(I) it takes more than 6 months to develop or produce,
       ``(II) the development or production could not with due 
     diligence be reasonably expected to occur in less than 6 
     months, and
       ``(III) the biobased or bioenergy product or process 
     comprises products, processes, programs, routines, and 
     attendant documentation developed and maintained for the 
     utilization of biological materials in commercial or 
     industrial products, for the utilization of renewable 
     domestic agricultural or forestry materials in commercial or 
     industrial products, or for the utilization of biomass 
     materials.

       ``(D) Related facilities.--For purposes of subparagraph 
     (C), the term `manufacturing facility' includes a facility 
     which is directly and functionally related to a manufacturing 
     facility (determined without regard to subparagraph (C)) if--
       ``(i) such facility, including an office facility and a 
     research and development facility, is located on the same 
     site as the manufacturing facility, and
       ``(ii) not more than 40 percent of the net proceeds of the 
     issue are used to provide such facility,
     but shall not include a facility used solely for research and 
     development activities.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

[[Page S11796]]

     
                                  ____
  SA 2123. Mr. THOMAS submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place in title IX, insert the following:

     SEC. 9____. FEDERAL-AID HIGHWAY PROGRAMS.

       (a) Increase in Obligation Authority.--
       (1) In general.--In addition to any obligation authority 
     provided by any other law enacted before, on, or after the 
     date of enactment of this Act, $5,000,000,000 in obligation 
     authority shall be made available for fiscal year 2002 for 
     obligation of funds apportioned under section 104(b) of title 
     23, United States Code.
       (2) Distribution of obligation authority.--The obligation 
     authority made available by paragraph (1) shall be 
     distributed--
       (A) to each State in accordance with the percentage 
     specified for the State in section 105(b) of title 23, United 
     States Code; and
       (B) subject to the redistribution of unused obligation 
     authority using the method prescribed in section 1102(d) of 
     the Transportation Equity Act for the 21st Century (23 U.S.C. 
     104 note; 112 Stat. 117).
       (b) Temporary Increase of Federal Share.--
       (1) Definition of qualifying project.--In this section, the 
     term ``qualifying project'' means a construction project 
     under title 23, United States Code, with respect to which a 
     project agreement is executed during the period beginning 
     October 1, 2001, and ending September 30, 2002.
       (2) Increased federal share.--Notwithstanding any other 
     provision of law, the Federal share of the cost of a 
     qualifying project shall be a percentage of the cost of the 
     qualifying project specified by the State, up to 100 percent.
       (3) Repayment.--
       (A) In general.--A State that receives an increased Federal 
     share under paragraph (2) with respect to 1 or more 
     qualifying projects shall repay to the United States the 
     total amount of the increased Federal share with respect to 
     all such qualifying projects of the State not later than 
     September 30, 2003.
       (B) Treatment.--Each repayment by a State under 
     subparagraph (A) shall be deposited in the Highway Trust Fund 
     and credited to the appropriate apportionment accounts of the 
     State.
                                  ____

  SA 2124. Mr. CRAIG submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following and 
     redesignate accordingly:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Securing 
     America's Future Energy Act of 2001'' or the ``SAFE Act of 
     2001''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Energy policy.

                               DIVISION A

Sec. 100. Short title.

                      TITLE I--ENERGY CONSERVATION

  Subtitle A--Reauthorization of Federal Energy Conservation Programs

Sec. 101. Authorization of appropriations.

         Subtitle B--Federal Leadership in Energy Conservation

Sec. 121. Federal facilities and national energy security.
Sec. 122. Enhancement and extension of authority relating to Federal 
              energy savings performance contracts.
Sec. 123. Clarification and enhancement of authority to enter utility 
              incentive programs for energy savings.
Sec. 124. Federal central air conditioner and heat pump efficiency.
Sec. 125. Advanced building efficiency testbed.
Sec. 126. Use of interval data in Federal buildings.
Sec. 127. Review of Energy Savings Performance Contract program.
Sec. 128. Capitol complex.

                       Subtitle C--State Programs

Sec. 131. Amendments to State energy programs.
Sec. 132. Reauthorization of energy conservation program for schools 
              and hospitals.
Sec. 133. Amendments to Weatherization Assistance Program.
Sec. 134. LIHEAP.
Sec. 135. High performance public buildings.

          Subtitle D--Energy Efficiency for Consumer Products

Sec. 141. Energy Star program.
Sec. 141A. Energy sun renewable and alternative energy program.
Sec. 142. Labeling of energy efficient appliances.
Sec. 143. Appliance standards.

                 Subtitle E--Energy Efficient Vehicles

Sec. 151. High occupancy vehicle exception.
Sec. 152. Railroad efficiency.
Sec. 153. Biodiesel fuel use credits.
Sec. 154. Mobile to stationary source trading.

                      Subtitle F--Other Provisions

Sec. 161. Review of regulations to eliminate barriers to emerging 
              energy technology.
Sec. 162. Advanced idle elimination systems.
Sec. 163. Study of benefits and feasibility of oil bypass filtration 
              technology.
Sec. 164. Gas flare study.
Sec. 165. Telecommuting study.

                   TITLE II--AUTOMOBILE FUEL ECONOMY

Sec. 201. Average fuel economy standards for nonpassenger automobiles.
Sec. 202. Consideration of prescribing different average fuel economy 
              standards for nonpassenger automobiles.
Sec. 203. Dual fueled automobiles.
Sec. 204. Fuel economy of the Federal fleet of automobiles.
Sec. 205. Hybrid vehicles and alternative vehicles.
Sec. 206. Federal fleet petroleum-based nonalternative fuels.
Sec. 207. Study of feasibility and effects of reducing use of fuel for 
              automobiles.

                       TITLE III--NUCLEAR ENERGY

Sec. 301. License period.
Sec. 302. Cost recovery from Government agencies.
Sec. 303. Depleted uranium hexafluoride.
Sec. 304. Nuclear Regulatory Commission meetings.
Sec. 305. Cooperative research and development and special 
              demonstration projects for the uranium mining industry.
Sec. 306. Maintenance of a viable domestic uranium conversion industry.
Sec. 307. Paducah decontamination and decommissioning plan.
Sec. 308. Study to determine feasibility of developing commercial 
              nuclear energy production facilities at existing 
              Department of Energy sites.
Sec. 309. Prohibition of commercial sales of uranium by the United 
              States until 2009.

                     TITLE IV--HYDROELECTRIC ENERGY

Sec. 401. Alternative conditions and fishways.
Sec. 402. FERC data on hydroelectric licensing.

                             TITLE V--FUELS

Sec. 501. Tank draining during transition to summertime RFG.
Sec. 502. Gasoline blendstock requirements.
Sec. 503. Boutique fuels.
Sec. 504. Funding for MTBE contamination.

                       TITLE VI--RENEWABLE ENERGY

Sec. 601. Assessment of renewable energy resources.
Sec. 602. Renewable energy production incentive.
Sec. 603. Study of ethanol from solid waste loan guarantee program.
Sec. 604. Study of renewable fuel content.

                          TITLE VII--PIPELINES

Sec. 701. Prohibition on certain pipeline route.
Sec. 702. Historic pipelines.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

Sec. 801. Waste reduction and use of alternatives.
Sec. 802. Annual report on United States energy independence.
Sec. 803. Study of aircraft emissions.

                               DIVISION B

Sec. 2001. Short title.
Sec. 2002. Findings.
Sec. 2003. Purposes.
Sec. 2004. Goals.
Sec. 2005. Definitions.
Sec. 2006. Authorizations.
Sec. 2007. Balance of funding priorities.

           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

                 Subtitle A--Alternative Fuel Vehicles

Sec. 2101. Short title.
Sec. 2102. Definitions.
Sec. 2103. Pilot program.
Sec. 2104. Reports to Congress.
Sec. 2105. Authorization of appropriations.

          Subtitle B--Distributed Power Hybrid Energy Systems

Sec. 2121. Findings.
Sec. 2122. Definitions.
Sec. 2123. Strategy.
Sec. 2124. High power density industry program.
Sec. 2125. Micro-cogeneration energy technology.
Sec. 2126. Program plan.
Sec. 2127. Report.
Sec. 2128. Voluntary consensus standards.

           Subtitle C--Secondary Electric Vehicle Battery Use

Sec. 2131. Definitions.
Sec. 2132. Establishment of secondary electric vehicle battery use 
              program.
Sec. 2133. Authorization of appropriations.

                     Subtitle D--Green School Buses

Sec. 2141. Short title.
Sec. 2142. Establishment of pilot program.
Sec. 2143. Fuel cell bus development and demonstration program.
Sec. 2144. Authorization of appropriations.

            Subtitle E--Next Generation Lighting Initiative

Sec. 2151. Short title.
Sec. 2152. Definition.
Sec. 2153. Next Generation Lighting Initiative.
Sec. 2154. Study.
Sec. 2155. Grant program.

[[Page S11797]]

    Subtitle F--Department of Energy Authorization of Appropriations

Sec. 2161. Authorization of appropriations.
Subtitle G--Environmental Protection Agency Office of Air and Radiation 
              Authorization of Appropriations
Sec. 2171. Short title.
Sec. 2172. Authorization of appropriations.
Sec. 2173. Limits on use of funds.
Sec. 2174. Cost sharing.
Sec. 2175. Limitation on demonstration and commercial applications of 
              energy technology.
Sec. 2176. Reprogramming.
Sec. 2177. Budget request format.
Sec. 2178. Other provisions.

          Subtitle H--National Building Performance Initiative

Sec. 2181. National Building Performance Initiative.

                       TITLE II--RENEWABLE ENERGY

                          Subtitle A--Hydrogen

Sec. 2201. Short title.
Sec. 2202. Purposes.
Sec. 2203. Definitions.
Sec. 2204. Reports to Congress.
Sec. 2205. Hydrogen research and development.
Sec. 2206. Demonstrations.
Sec. 2207. Technology transfer.
Sec. 2208. Coordination and consultation.
Sec. 2209. Advisory Committee.
Sec. 2210. Authorization of appropriations.
Sec. 2211. Repeal.

                         Subtitle B--Bioenergy

Sec. 2221. Short title.
Sec. 2222. Findings.
Sec. 2223. Definitions.
Sec. 2224. Authorization.
Sec. 2225. Authorization of appropriations.

            Subtitle C--Transmission Infrastructure Systems

Sec. 2241. Transmission infrastructure systems research, development, 
              demonstration, and commercial application.
Sec. 2242. Program plan.
Sec. 2243. Report.

    Subtitle D--Department of Energy Authorization of Appropriations

Sec. 2261. Authorization of appropriations.

                       TITLE III--NUCLEAR ENERGY

         Subtitle A--University Nuclear Science and Engineering

Sec. 2301. Short title.
Sec. 2302. Findings.
Sec. 2303. Department of Energy program.
Sec. 2304. Authorization of appropriations.

Subtitle B--Advanced Fuel Recycling Technology Research and Development 
                                Program

Sec. 2321. Program.

    Subtitle C--Department of Energy Authorization of Appropriations

Sec. 2341. Nuclear Energy Research Initiative.
Sec. 2342. Nuclear Energy Plant Optimization program.
Sec. 2343. Nuclear energy technologies.
Sec. 2344. Authorization of appropriations.

                        TITLE IV--FOSSIL ENERGY

                            Subtitle A--Coal

Sec. 2401. Coal and related technologies programs.

                        Subtitle B--Oil and Gas

Sec. 2421. Petroleum-oil technology.
Sec. 2422. Natural gas.
Sec. 2423. Natural gas and oil deposits report.
Sec. 2424. Oil shale research.

        Subtitle C--Ultra-Deepwater and Unconventional Drilling

Sec. 2441. Short title.
Sec. 2442. Definitions.
Sec. 2443. Ultra-deepwater program.
Sec. 2444. National Energy Technology Laboratory.
Sec. 2445. Advisory Committee.
Sec. 2446. Research Organization.
Sec. 2447. Grants.
Sec. 2448. Plan and funding.
Sec. 2449. Audit.
Sec. 2450. Fund.
Sec. 2451. Sunset.

                         Subtitle D--Fuel Cells

Sec. 2461. Fuel cells.

    Subtitle E--Department of Energy Authorization of Appropriations

Sec. 2481. Authorization of appropriations.

                            TITLE V--SCIENCE

                   Subtitle A--Fusion Energy Sciences

Sec. 2501. Short title.
Sec. 2502. Findings.
Sec. 2503. Plan for fusion experiment.
Sec. 2504. Plan for fusion energy sciences program.
Sec. 2505. Authorization of appropriations.

                 Subtitle B--Spallation Neutron Source

Sec. 2521. Definition.
Sec. 2522. Authorization of appropriations.
Sec. 2523. Report.
Sec. 2524. Limitations.

      Subtitle C--Facilities, Infrastructure, and User Facilities

Sec. 2541. Definition.
Sec. 2542. Facility and infrastructure support for nonmilitary energy 
              laboratories.
Sec. 2543. User facilities.

            Subtitle D--Advisory Panel on Office of Science

Sec. 2561. Establishment.
Sec. 2562. Report.

    Subtitle E--Department of Energy Authorization of Appropriations

Sec. 2581. Authorization of appropriations.

                        TITLE VI--MISCELLANEOUS

      Subtitle A--General Provisions for the Department of Energy

Sec. 2601. Research, development, demonstration, and commercial 
              application of energy technology programs, projects, and 
              activities.
Sec. 2602. Limits on use of funds.
Sec. 2603. Cost sharing.
Sec. 2604. Limitation on demonstration and commercial application of 
              energy technology.
Sec. 2605. Reprogramming.

               Subtitle B--Other Miscellaneous Provisions

Sec. 2611. Notice of reorganization.
Sec. 2612. Limits on general plant projects.
Sec. 2613. Limits on construction projects.
Sec. 2614. Authority for conceptual and construction design.
Sec. 2615. National Energy Policy Development Group mandated reports.
Sec. 2616. Periodic reviews and assessments.

                               DIVISION D

Sec. 4101. Capacity building for energy-efficient, affordable housing.
Sec. 4102. Increase of CDBG public services cap for energy conservation 
              and efficiency activities.
Sec. 4103. FHA mortgage insurance incentives for energy efficient 
              housing.
Sec. 4104. Public housing capital fund.
Sec. 4105. Grants for energy-conserving improvements for assisted 
              housing.
Sec. 4106. North American Development Bank.

                               DIVISION E

Sec. 5000. Short title.
Sec. 5001. Findings.
Sec. 5002. Definitions.
Sec. 5003. Clean coal power initiative.
Sec. 5004. Cost and performance goals.
Sec. 5005. Authorization of appropriations.
Sec. 5006. Project criteria.
Sec. 5007. Study.
Sec. 5008. Clean coal centers of excellence.

                               DIVISION F

Sec. 6000. Short title.

      TITLE I--GENERAL PROTECTIONS FOR ENERGY SUPPLY AND SECURITY

Sec. 6101. Study of existing rights-of-way on Federal lands to 
              determine capability to support new pipelines or other 
              transmission facilities.
Sec. 6102. Inventory of energy production potential of all Federal 
              public lands.
Sec. 6103. Review of regulations to eliminate barriers to emerging 
              energy technology.
Sec. 6104. Interagency agreement on environmental review of interstate 
              natural gas pipeline projects.
Sec. 6105. Enhancing energy efficiency in management of Federal lands.
Sec. 6106. Efficient infrastructure development.

                   TITLE II--OIL AND GAS DEVELOPMENT

                    Subtitle A--Offshore Oil and Gas

Sec. 6201. Short title.
Sec. 6202. Lease sales in Western and Central Planning Area of the Gulf 
              of Mexico.
Sec. 6203. Savings clause.
Sec. 6204. Analysis of Gulf of Mexico field size distribution, 
              international competitiveness, and incentives for 
              development.

       Subtitle B--Improvements to Federal Oil and Gas Management

Sec. 6221. Short title.
Sec. 6222. Study of impediments to efficient lease operations.
Sec. 6223. Elimination of unwarranted denials and stays.
Sec. 6224. Limitations on cost recovery for applications.
Sec. 6225. Consultation with Secretary of Agriculture.

                       Subtitle C--Miscellaneous

Sec. 6231. Offshore subsalt development.
Sec. 6232. Program on oil and gas royalties in kind.
Sec. 6233. Marginal well production incentives.
Sec. 6234. Reimbursement for costs of NEPA analyses, documentation, and 
              studies.
Sec. 6235. Encouragement of State and provincial prohibitions on off-
              shore drilling in the Great Lakes.

                TITLE III--GEOTHERMAL ENERGY DEVELOPMENT

Sec. 6301. Royalty reduction and relief.
Sec. 6302. Exemption from royalties for direct use of low temperature 
              geothermal energy resources.
Sec. 6303. Amendments relating to leasing on Forest Service lands.
Sec. 6304. Deadline for determination on pending noncompetitive lease 
              applications.
Sec. 6305. Opening of public lands under military jurisdiction.
Sec. 6306. Application of amendments.
Sec. 6307. Review and report to Congress.
Sec. 6308. Reimbursement for costs of NEPA analyses, documentation, and 
              studies.

                          TITLE IV--HYDROPOWER

Sec. 6401. Study and report on increasing electric power production 
              capability of existing facilities.

[[Page S11798]]

Sec. 6402. Installation of powerformer at Folsom power plant, 
              California.
Sec. 6403. Study and implementation of increased operational 
              efficiencies in hydroelectric power projects.
Sec. 6404. Shift of project loads to off-peak periods.

             TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

Sec. 6501. Short title.
Sec. 6502. Definitions.
Sec. 6503. Leasing program for lands within the Coastal Plain.
Sec. 6504. Lease sales.
Sec. 6505. Grant of leases by the Secretary.
Sec. 6506. Lease terms and conditions.
Sec. 6507. Coastal Plain environmental protection.
Sec. 6508. Expedited judicial review.
Sec. 6509. Rights-of-way across the Coastal Plain.
Sec. 6510. Conveyance.
Sec. 6511. Local government impact aid and community service 
              assistance.
Sec. 6512. Revenue allocation.

   TITLE VI--CONSERVATION OF ENERGY BY THE DEPARTMENT OF THE INTERIOR

Sec. 6601. Energy conservation by the Department of the Interior.
Sec. 6602. Amendment to Buy Indian Act.

                            TITLE VII--COAL

Sec. 6701. Limitation on fees with respect to coal lease applications 
              and document.
Sec. 6702. Mining plans.
Sec. 6703. Payment of advance royalties under coal leases.
Sec. 6704. Elimination of deadline for submission of coal lease 
              operation and reclamation plan.

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

Sec. 6801. Insular areas energy security.

                               DIVISION G

Sec. 7101. Buy American.

     SEC. 2. ENERGY POLICY.

       It shall be the sense of the Congress that the United 
     States should take all actions necessary in the areas of 
     conservation, efficiency, alternative energy sources, 
     technology development, and domestic production to reduce the 
     United States dependence on foreign energy sources from 56 
     percent to 45 percent by January 1, 2012, and to reduce 
     United States dependence on Iraqi energy sources from 700,000 
     barrels per day to 250,000 barrels per day by January 1, 
     2012.

                               DIVISION A

     SEC. 100. SHORT TITLE.

       This division may be cited as the ``Energy Advancement and 
     Conservation Act of 2001''.

                      TITLE I--ENERGY CONSERVATION

  Subtitle A--Reauthorization of Federal Energy Conservation Programs

     SEC. 101. AUTHORIZATION OF APPROPRIATIONS.

       Section 660 of the Department of Energy Organization Act 
     (42 U.S.C. 7270) is amended as follows:
       (1) By inserting ``(a)'' before ``Appropriations''.
       (2) By inserting at the end the following new subsection:
       ``(b) There are hereby authorized to be appropriated to the 
     Department of Energy for fiscal year 2002, $950,000,000; for 
     fiscal year 2003, $1,000,000,000; for fiscal year 2004, 
     $1,050,000,000; for fiscal year 2005, $1,100,000,000; and for 
     fiscal year 2006, $1,150,000,000, to carry out energy 
     efficiency activities under the following laws, such sums to 
     remain available until expended:
       ``(1) Energy Policy and Conservation Act, including section 
     256(d)(42 U.S.C. 6276(d)) (promote export of energy efficient 
     products), sections 321 through 346 (42 U.S.C. 6291-6317) 
     (appliances program).
       ``(2) Energy Conservation and Production Act, including 
     sections 301 through 308 (42 U.S.C. 6831-6837) (energy 
     conservation standards for new buildings).
       ``(3) National Energy Conservation Policy Act, including 
     sections 541-551 (42 U.S.C. 8251-8259) (Federal Energy 
     Management Program).
       (4) Energy Policy Act of 1992, including sections 103 (42 
     U.S.C. 13458) (energy efficient lighting and building 
     centers), 121 (42 U.S.C. 6292 note) (energy efficiency 
     labeling for windows and window systems), 125 (42 U.S.C. 6292 
     note) (energy efficiency information for commercial office 
     equipment), 126 (42 U.S.C. 6292 note) (energy efficiency 
     information for luminaires), 131 (42 U.S.C. 6348) (energy 
     efficiency in industrial facilities), and 132 (42 U.S.C. 
     6349) (process-oriented industrial energy efficiency).''.

         Subtitle B--Federal Leadership in Energy Conservation

     SEC. 121. FEDERAL FACILITIES AND NATIONAL ENERGY SECURITY.

       (a) Purpose.--Section 542 of the National Energy 
     Conservation Policy Act (42 U.S.C. 8252) is amended by 
     inserting ``, and generally to promote the production, 
     supply, and marketing of energy efficiency products and 
     services and the production, supply, and marketing of 
     unconventional and renewable energy resources'' after ``by 
     the Federal Government''.
       (b) Energy Management Requirements.--Section 543 of the 
     National Energy Conservation Policy Act (42 U.S.C. 8253) is 
     amended as follows:
       (1) In subsection (a)(1), by striking ``during the fiscal 
     year 1995'' and all that follows through the end and 
     inserting ``during--
       ``(1) fiscal year 1995 is at least 10 percent;
       ``(2) fiscal year 2000 is at least 20 percent;
       ``(3) fiscal year 2005 is at least 30 percent;
       ``(4) fiscal year 2010 is at least 35 percent;
       ``(5) fiscal year 2015 is at least 40 percent; and
       ``(6) fiscal year 2020 is at least 45 percent,

     less than the energy consumption per gross square foot of its 
     Federal buildings in use during fiscal year 1985. To achieve 
     the reductions required by this paragraph, an agency shall 
     make maximum practicable use of energy efficiency products 
     and services and unconventional and renewable energy 
     resources, using guidelines issued by the Secretary under 
     subsection (d) of this section.''.
       (2) In subsection (d), by inserting ``Such guidelines shall 
     include appropriate model technical standards for energy 
     efficiency and unconventional and renewable energy resources 
     products and services. Such standards shall reflect, to the 
     extent practicable, evaluation of both currently marketed and 
     potentially marketable products and services that could be 
     used by agencies to improve energy efficiency and increase 
     unconventional and renewable energy resources.'' after 
     ``implementation of this part.''.
       (3) By adding at the end the following new subsection:
       ``(e) Studies.--To assist in developing the guidelines 
     issued by the Secretary under subsection (d) and in 
     furtherance of the purposes of this section, the Secretary 
     shall conduct studies to identify and encourage the 
     production and marketing of energy efficiency products and 
     services and unconventional and renewable energy resources. 
     To conduct such studies, and to provide grants to accelerate 
     the use of unconventional and renewable energy, there are 
     authorized to be appropriated to the Secretary $20,000,000 
     for each of the fiscal years 2003 through 2010.''.
       (c) Definition.--Section 551 of the National Energy 
     Conservation Policy Act (42 U.S.C. 8259) is amended as 
     follows:
       (1) By striking ``and'' at the end of paragraph (8).
       (2) By striking the period at the end of paragraph (9) and 
     inserting ``; and''.
       (3) By adding at the end the following new paragraph:
       ``(10) the term ``unconventional and renewable energy 
     resources'' includes renewable energy sources, hydrogen, fuel 
     cells, cogeneration, combined heat and power, heat recovery 
     (including by use of a Stirling heat engine), and distributed 
     generation.''.
       (d) Exclusions From Requirement.--The National Energy 
     Conservation Policy Act (42 U.S.C. 7201 and following) is 
     amended as follows:
       (1) In section 543(a)--
       (A) by striking ``(1) Subject to paragraph (2)'' and 
     inserting ``Subject to subsection (c)''; and
       (B) by striking ``(2) An agency'' and all that follows 
     through ``such exclusion.''.
       (2) By amending subsection (c) of such section 543 to read 
     as follows:
       ``(c) Exclusions.--(1) A Federal building may be excluded 
     from the requirements of subsections (a) and (b) only if--
       ``(A) the President declares the building to require 
     exclusion for national security reasons; and
       ``(B) the agency responsible for the building has--
       ``(i) completed and submitted all federally required energy 
     management reports; and
       ``(ii) achieved compliance with the energy efficiency 
     requirements of this Act, the Energy Policy Act of 1992, 
     Executive Orders, and other Federal law;
       ``(iii) implemented all practical, life cycle cost-
     effective projects in the excluded building.
       ``(2) The President shall only declare buildings described 
     in paragraph (1)(A) to be excluded, not ancillary or nearby 
     facilities that are not in themselves national security 
     facilities.''.
       (3) In section 548(b)(1)(A)--
       (A) by striking ``copy of the''; and
       (B) by striking ``sections 543(a)(2) and 543(c)(3)'' and 
     inserting ``section 543(c)''.
       (e) Acquisition Requirement.--Section 543(b) of such Act is 
     amended--
       (1) in paragraph (1), by striking ``(1) Not'' and inserting 
     ``(1) Except as provided in paragraph (5), not''; and
       (2) by adding at the end the following new paragraph:
       ``(5)(A)(i) Agencies shall select only Energy Star products 
     when available when acquiring energy-using products. For 
     product groups where Energy Star labels are not yet 
     available, agencies shall select products that are in the 
     upper 25 percent of energy efficiency as designated by FEMP. 
     In the case of electric motors of 1 to 500 horsepower, 
     agencies shall select only premium efficiency motors that 
     meet a standard designated by the Secretary, and shall 
     replace (not rewind) failed motors with motors meeting such 
     standard. The Secretary shall designate such standard within 
     90 days of the enactment of paragraph, after considering 
     recommendations by the National Electrical Manufacturers 
     Association. The Secretary of Energy shall develop guidelines 
     within 180 days after the enactment of this paragraph for 
     exemptions to this section when equivalent products do not 
     exist, are impractical, or do not meet the agency mission 
     requirements.
       ``(ii) The Administrator of the General Services 
     Administration and the Secretary of Defense (acting through 
     the Defense Logistics Agency), with assistance from the 
     Administrator of the Environmental Protection Agency and the 
     Secretary of Energy, shall create clear catalogue listings 
     that designate Energy Star products in both print and 
     electronic formats. After any existing

[[Page S11799]]

     federal inventories are exhausted, Administrator of the 
     General Services Administration and the Secretary of Defense 
     (acting through the Defense Logistics Agency) shall only 
     replace inventories with energy-using products that are 
     Energy Star, products that are rated in the top 25 percent of 
     energy efficiency, or products that are exempted as 
     designated by FEMP and defined in clause (i).
       ``(iii) Agencies shall incorporate energy-efficient 
     criteria consistent with Energy Star and other FEMP 
     designated energy efficiency levels into all guide 
     specifications and project specifications developed for new 
     construction and renovation, as well as into product 
     specification language developed for Basic Ordering 
     Agreements, Blanket Purchasing Agreements, Government Wide 
     Acquisition Contracts, and all other purchasing procedures.
       ``(iv) The legislative branch shall be subject to this 
     subparagraph to the same extent and in the same manner as are 
     the Federal agencies referred to in section 521(1).
       ``(B) Not later than 6 months after the date of the 
     enactment of this paragraph, the Secretary of Energy shall 
     establish guidelines defining the circumstances under which 
     an agency shall not be required to comply with subparagraph 
     (A). Such circumstances may include the absence of Energy 
     Star products, systems, or designs that serve the purpose of 
     the agency, issues relating to the compatibility of a 
     product, system, or design with existing buildings or 
     equipment, and excessive cost compared to other available and 
     appropriate products, systems, or designs.
       ``(C) Subparagraph (A) shall apply to agency acquisitions 
     occurring on or after October 1, 2002.''.
       (f) Metering.--Section 543 of such Act (42 U.S.C. 8254) is 
     amended by adding at the end the following new subsection:
       ``(f) Metering.--(1) By October 1, 2004, all Federal 
     buildings including buildings owned by the legislative branch 
     and the Federal court system and other energy-using 
     structures shall be metered or submetered in accordance with 
     guidelines established by the Secretary under paragraph (2).
       ``(2) Not later than 6 months after the date of the 
     enactment of this subsection, the Secretary, in consultation 
     with the General Services Administration and representatives 
     from the metering industry, energy services industry, 
     national laboratories, colleges of higher education, and 
     federal facilities energy managers, shall establish 
     guidelines for agencies to carry out paragraph (1). Such 
     guidelines shall take into consideration each of the 
     following:
       ``(A) Cost.
       ``(B) Resources, including personnel, required to maintain, 
     interpret, and report on data so that the meters are 
     continually reviewed.
       ``(C) Energy management potential.
       ``(D) Energy savings.
       ``(E) Utility contract aggregation.
       ``(F) Savings from operations and maintenance.
       ``(3) A building shall be exempt from the requirement of 
     this section to the extent that compliance is deemed 
     impractical by the Secretary. A finding of impracticability 
     shall be based on the same factors as identified in 
     subsection (c) of this section.''.
       (g) Retention of Energy Savings.--Section 546 of such Act 
     (42 U.S.C. 8256) is amended by adding at the end the 
     following new subsection:
       ``(e) Retention of Energy Savings.--An agency may retain 
     any funds appropriated to that agency for energy 
     expenditures, at buildings subject to the requirements of 
     section 543(a) and (b), that are not made because of energy 
     savings. Except as otherwise provided by law, such funds may 
     be used only for energy efficiency or unconventional and 
     renewable energy resources projects.''.
       (h) Reports.--Section 548 of such Act (42 U.S.C. 8258) is 
     amended as follows:
       (1) In subsection (a)--
       (A) by inserting ``in accordance with guidelines 
     established by and'' after ``to the Secretary,'';
       (B) by striking ``and'' at the end of paragraph (1);
       (C) by striking the period at the end of paragraph (2) and 
     inserting a semicolon; and
       (D) by adding at the end the following new paragraph:
       ``(3) an energy emergency response plan developed by the 
     agency.''.
       (2) In subsection (b)--
       (A) by striking ``and'' at the end of paragraph (3);
       (B) by striking the period at the end of paragraph (4) and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(5) all information transmitted to the Secretary under 
     subsection (a).''.
       (3) By amending subsection (c) to read as follows:
       ``(c) Agency Reports to Congress.--Each agency shall 
     annually report to the Congress, as part of the agency's 
     annual budget request, on all of the agency's activities 
     implementing any Federal energy management requirement.''.
       (i) Inspector General Energy Audits.--Section 160(c) of the 
     Energy Policy Act of 1992 (42 U.S.C. 8262f(c)) is amended by 
     striking ``is encouraged to conduct periodic'' and inserting 
     ``shall conduct periodic''.
       (j) Federal Energy Management Reviews.--Section 543 of the 
     National Energy Conservation Policy Act (42 U.S.C. 8253) is 
     amended by adding at the end the following:
       ``(g) Priority Response Reviews.--Each agency shall--
       ``(1) not later than 9 months after the date of the 
     enactment of this subsection, undertake a comprehensive 
     review of all practicable measures for--
       ``(A) increasing energy and water conservation, and
       ``(B) using renewable energy sources; and
       ``(2) not later than 180 days after completing the review, 
     develop plans to achieve not less than 50 percent of the 
     potential efficiency and renewable savings identified in the 
     review. The agency shall implement such measures as soon 
     thereafter as is practicable, consistent with compliance with 
     the requirements of this section.''.

     SEC. 122. ENHANCEMENT AND EXTENSION OF AUTHORITY RELATING TO 
                   FEDERAL ENERGY SAVINGS PERFORMANCE CONTRACTS.

       (a) Expansion of Definition of Energy Savings to Include 
     Water.--
       (1) Energy savings.--Section 804(2) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to 
     read as follows:
       ``(2) The term ``energy savings'' means a reduction in the 
     cost of energy or water, from a base cost established through 
     a methodology set forth in the contract, used in an existing 
     federally owned building or buildings or other federally 
     owned facilities as a result of--
       ``(i) the lease or purchase of operating equipment, 
     improvements, altered operation and maintenance, or technical 
     services;
       ``(ii) the increased efficient use of existing energy 
     sources by solar and ground source geothermal resources, 
     cogeneration or heat recovery (including by the use of a 
     Stirling heat engine), excluding any cogeneration process for 
     other than a federally owned building or buildings or other 
     federally owned facilities; or
       ``(iii) the increased efficient use of existing water 
     sources.''.
       (2) Energy savings contract.--Section 804(3) of the 
     National Energy Conservation Policy Act (42 U.S.C. 8287c(3)) 
     is amended to read as follows:
       ``(3) The terms ``energy savings contract'' and ``energy 
     savings performance contract'' mean a contract which provides 
     for the performance of services for the design, acquisition, 
     installation, testing, operation, and, where appropriate, 
     maintenance and repair, of an identified energy or water 
     conservation measure or series of measures at one or more 
     locations.''.
       (3) Energy or water conservation measure.--Section 804(4) 
     of the National Energy Conservation Policy Act (42 U.S.C. 
     8287c(4)) is amended to read as follows:
       ``(4) The term ``energy or water conservation measure'' 
     means--
       ``(A) an energy conservation measure, as defined in section 
     551(4) (42 U.S.C. 8259(4)); or
       ``(B) a water conservation measure that improves water 
     efficiency, is life cycle cost effective, and involves water 
     conservation, water recycling or reuse, improvements in 
     operation or maintenance efficiencies, retrofit activities, 
     or other related activities, not at a Federal hydroelectric 
     facility.''.
       (4) Conforming amendment.--Section 801(a)(2)(C) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8287(a)(2)(C)) is amended by inserting ``or water'' after 
     ``financing energy''.
       (b) Extension of Authority.--Section 801(c) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8287(c)) is 
     repealed.
       (c) Contracting and Auditing.--Section 801(a)(2) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8287(a)(2)) is amended by adding at the end the following new 
     subparagraph:
       ``(E) A Federal agency shall engage in contracting and 
     auditing to implement energy savings performance contracts as 
     necessary and appropriate to ensure compliance with the 
     requirements of this Act, particularly the energy efficiency 
     requirements of section 543.''.

     SEC. 123. CLARIFICATION AND ENHANCEMENT OF AUTHORITY TO ENTER 
                   UTILITY INCENTIVE PROGRAMS FOR ENERGY SAVINGS.

       Section 546(c) of the National Energy Conservation Policy 
     Act (42 U.S.C. 8256(c)) is amended as follows:
       (1) In paragraph (3) by adding at the end the following: 
     ``Such a utility incentive program may include a contract or 
     contract term designed to provide for cost-effective 
     electricity demand management, energy efficiency, or water 
     conservation.''.
       (2) By adding at the end of the following new paragraph:
       ``(6) Federal agencies are encouraged to participate in 
     State or regional demand side reduction programs, including 
     those operated by wholesale market institutions such as 
     independent system operators, regional transmission 
     organizations and other entities. The availability of such 
     programs, and the savings resulting from such participation, 
     should be included in the evaluation of energy options for 
     Federal facilities.''.

     SEC. 124. FEDERAL CENTRAL AIR CONDITIONER AND HEAT PUMP 
                   EFFICIENCY.

       (a) Requirement.--Federal agencies shall be required to 
     acquire central air conditioners and heat pumps that meet or 
     exceed the standards established under subsection (b) or (c) 
     in the case of all central air conditioners and heat pumps 
     acquired after the date of the enactment of this Act.
       (b) Standards.--The standards referred to in subsection (a) 
     are the following:
       (1) For air-cooled air conditioners with cooling capacities 
     of less than 65,000 Btu/hour, a Seasonal Energy Efficiency 
     Ratio of 12.0.

[[Page S11800]]

       (2) For air-source heat pumps with cooling capacities less 
     than 65,000 Btu/hour, a Seasonal Energy Efficiency Ratio of 
     12 SEER, and a Heating Seasonal Performance Factor of 7.4.
       (c) Modified Standards.--The Secretary of Energy may 
     establish, after appropriate notice and comment, revised 
     standards providing for reduced energy consumption or 
     increased energy efficiency of central air conditioners and 
     heat pumps acquired by the Federal Government, but may not 
     establish standards less rigorous than those established by 
     subsection (b).
       (d) Definitions.--For purposes of this section, the terms 
     ``Energy Efficiency Ratio'', ``Seasonal Energy Efficiency 
     Ratio'', ``Heating Seasonal Performance Factor'', and 
     ``Coefficient of Performance'' have the meanings used for 
     those terms in Appendix M to Subpart B of Part 430 of title 
     10 of the Code of Federal Regulations, as in effect on May 
     24, 2001.
       (e) Exemptions.--An agency shall be exempt from the 
     requirements of this section with respect to air conditioner 
     or heat pump purchases for particular uses where the agency 
     head determines that purchase of a air conditioner or heat 
     pump for such use would be impractical. A finding of 
     impracticability shall be based on whether--
       (1) the energy savings pay-back period for such purchase 
     would be less than 10 years;
       (2) space constraints or other technical factors would make 
     compliance with this section cost-prohibitive; or
       (3) in the case of the Departments of Defense and Energy, 
     compliance with this section would be inconsistent with the 
     proper discharge of national security functions.

     SEC. 125. ADVANCED BUILDING EFFICIENCY TESTBED.

       (a) Establishment.--The Secretary of Energy shall establish 
     an Advanced Building Efficiency Testbed program for the 
     development, testing, and demonstration of advanced 
     engineering systems, components, and materials to enable 
     innovations in building technologies. The program shall 
     evaluate government and industry building efficiency 
     concepts, and demonstrate the ability of next generation 
     buildings to support individual and organizational 
     productivity and health as well as flexibility and 
     technological change to improve environmental sustainability.
       (b) Participants.--The program established under subsection 
     (a) shall be led by a university having demonstrated 
     experience with the application of intelligent workplaces and 
     advanced building systems in improving the quality of built 
     environments. Such university shall also have the ability to 
     combine the expertise from more than 12 academic fields, 
     including electrical and computer engineering, computer 
     science, architecture, urban design, and environmental and 
     mechanical engineering. Such university shall partner with 
     other universities and entities who have established programs 
     and the capability of advancing innovative building 
     efficiency technologies.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy to carry out 
     this section $18,000,000 for fiscal year 2002, to remain 
     available until expended, of which $6,000,000 shall be 
     provided to the lead university described in subsection (b), 
     and the remainder shall be provided equally to each of the 
     other participants referred to in subsection (b).

     SEC. 126. USE OF INTERVAL DATA IN FEDERAL BUILDINGS.

       Section 543 of the National Energy Conservation Policy Act 
     (42 U.S.C. 8253) is amended by adding at the end the 
     following new subsection: ``(h) Use of Interval Data in 
     Federal Buildings.--Not later than January 1, 2003, each 
     agency shall utilize, to the maximum extent practicable, for 
     the purposes of efficient use of energy and reduction in the 
     cost of electricity consumed in its Federal buildings, 
     interval consumption data that measure on a real time or 
     daily basis consumption of electricity in its Federal 
     buildings. To meet the requirements of this subsection 
     each agency shall prepare and submit at the earliest 
     opportunity pursuant to section 548(a) to the Secretary, a 
     plan describing how the agency intends to meet such 
     requirements, including how it will designate personnel 
     primarily responsible for achieving such requirements, and 
     otherwise implement this subsection.''.

     SEC. 127. REVIEW OF ENERGY SAVINGS PERFORMANCE CONTRACT 
                   PROGRAM.

       Within 180 days after the date of the enactment of this 
     Act, the Secretary of Energy shall complete a review of the 
     Energy Savings Performance Contract program to identify 
     statutory, regulatory, and administrative obstacles that 
     prevent Federal agencies from fully utilizing the program. In 
     addition, this review shall identify all areas for increasing 
     program flexibility and effectiveness, including audit and 
     measurement verification requirements, accounting for energy 
     use in determining savings, contracting requirements, and 
     energy efficiency services covered. The Secretary shall 
     report these findings to the Committee on Energy and Commerce 
     of the House of Representatives and the Committee on Energy 
     and Natural Resources of the Senate, and shall implement 
     identified administrative and regulatory changes to increase 
     program flexibility and effectiveness to the extent that such 
     changes are consistent with statutory authority.

     SEC. 128. CAPITOL COMPLEX.

       (a) Energy Infrastructure.--The Architect of the Capitol, 
     building on the Master Plan Study completed in July 2000, 
     shall commission a study to evaluate the energy 
     infrastructure of the Capital Complex to determine how the 
     infrastructure could be augmented to become more energy 
     efficient, using unconventional and renewable energy 
     resources, in a way that would enable the Complex to have 
     reliable utility service in the event of power fluctuations, 
     shortages, or outages.
       (b) Authorization.--There is authorized to be appropriated 
     to the Architect of the Capitol to carry out this section, 
     not more than $2,000,000 for fiscal years after the enactment 
     of this Act.

                       Subtitle C--State Programs

     SEC. 131. AMENDMENTS TO STATE ENERGY PROGRAMS.

       (a) State Energy Conservation Plans.--Section 362 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6322) is 
     amended by inserting at the end the following new subsection:
       ``(g) The Secretary shall, at least once every 3 years, 
     invite the Governor of each State to review and, if 
     necessary, revise the energy conservation plan of such State 
     submitted under subsection (b) or (e). Such reviews should 
     consider the energy conservation plans of other States within 
     the region, and identify opportunities and actions carried 
     out in pursuit of common energy conservation goals.''.
       (b) State Energy Efficiency Goals.--Section 364 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6324) is 
     amended by inserting ``Each State energy conservation plan 
     with respect to which assistance is made available under this 
     part on or after the date of the enactment of Energy 
     Advancement and Conservation Act of 2001, shall contain a 
     goal, consisting of an improvement of 25 percent or more in 
     the efficiency of use of energy in the State concerned in the 
     calendar year 2010 as compared to the calendar year 1990, and 
     may contain interim goals.'' after ``contain interim 
     goals.''.
       (c) Authorization of Appropriations.--Section 365(f) of the 
     Energy Policy and Conservation Act (42 U.S.C. 6325(f)) is 
     amended by striking ``for fiscal years 1999 through 2003 such 
     sums as may be necessary'' and inserting ``$75,000,000 for 
     fiscal year 2002, $100,000,000 for fiscal years 2003 and 
     2004, $125,000,000 for fiscal year 2005''.

     SEC. 132. REAUTHORIZATION OF ENERGY CONSERVATION PROGRAM FOR 
                   SCHOOLS AND HOSPITALS.

       Section 397 of the Energy Policy and Conservation Act (42 
     U.S.C. 6371f) is amended by striking ``2003'' and inserting 
     ``2010''.

     SEC. 133. AMENDMENTS TO WEATHERIZATION ASSISTANCE PROGRAM.

       Section 422 of the Energy Conservation and Production Act 
     (42 U.S.C. 6872) is amended by striking ``for fiscal years 
     1999 through 2003 such sums as may be necessary'' and 
     inserting ``$273,000,000 for fiscal year 2002, $325,000,000 
     for fiscal year 2003, $400,000,000 for fiscal year 2004, 
     and $500,000,000 for fiscal year 2005''.

     SEC. 134. LIHEAP.

       (a) Authorization of Appropriations.--Section 2602(b) of 
     the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 
     8621(b)) is amended by striking the first sentence and 
     inserting the following: ``There are authorized to be 
     appropriated to carry out the provisions of this title (other 
     than section 2607A), $3,400,000,000 for each of fiscal years 
     2001 through 2005.''.
       (b) GAO Study.--The Comptroller General of the United 
     States shall conduct a study to determine--
       (1) the extent to which Low-Income Home Energy Assistance 
     (LIHEAP) and other government energy subsidies paid to 
     consumers discourage or encourage energy conservation and 
     energy efficiency investments when compared to structures of 
     the same physical description and occupancy in compatible 
     geographic locations;
       (2) the extent to which education could increase the 
     conservation of low-income households who opt to receive 
     supplemental income instead of Low-Income Home Energy 
     Assistance funds;
       (3) the benefit in energy efficiency and energy savings 
     that can be achieved through the annual maintenance of 
     heating and cooling appliances in the homes of those 
     receiving Low-Income Home Energy Assistance funds; and
       (4) the loss of energy conservation that results from 
     structural inadequacies in a structure that is unhealthy, not 
     energy efficient, and environmentally unsound and that 
     receives Low-Income Home Energy Assistance funds for 
     weatherization.

     SEC. 135. HIGH PERFORMANCE PUBLIC BUILDINGS.

       (a) Program Establishment and Administration.--
       (1) Establishment.--There is established in the Department 
     of Energy the High Performance Public Buildings Program (in 
     this section referred to as the ``Program'').
       (2) In general.--The Secretary of Energy may, through the 
     Program, make grants--
       (A) to assist units of local government in the production, 
     through construction or renovation of buildings and 
     facilities they own and operate, of high performance public 
     buildings and facilities that are healthful, productive, 
     energy efficient, and environmentally sound;
       (B) to State energy offices to administer the program of 
     assistance to units of local government pursuant to this 
     section; and

[[Page S11801]]

       (C) to State energy offices to promote participation by 
     units of local government in the Program.
       (3) Grants to assist units of local government.--Grants 
     under paragraph (2)(A) for new public buildings shall be used 
     to achieve energy efficiency performance that reduces energy 
     use at least 30 percent below that of a public building 
     constructed in compliance with standards prescribed in 
     Chapter 8 of the 2000 International Energy Conservation Code, 
     or a similar State code intended to achieve substantially 
     equivalent results. Grants under paragraph (2)(A) for 
     existing public buildings shall be used to achieve energy 
     efficiency performance that reduces energy use below the 
     public building baseline consumption, assuming a 3-year, 
     weather-normalized average for calculating such baseline. 
     Grants under paragraph (2)(A) shall be made to units of local 
     government that have--
       (A) demonstrated a need for such grants in order to respond 
     appropriately to increasing population or to make major 
     investments in renovation of public buildings; and
       (B) made a commitment to use the grant funds to develop 
     high performance public buildings in accordance with a plan 
     developed and approved pursuant to paragraph (5)(A).
       (4) Other grants.--
       (A) Grants for administration.--Grants under paragraph 
     (2)(B) shall be used to evaluate compliance by units of local 
     government with the requirements of this section, and in 
     addition may be used for--
       (i) distributing information and materials to clearly 
     define and promote the development of high performance public 
     buildings for both new and existing facilities;
       (ii) organizing and conducting programs for local 
     government personnel, architects, engineers, and others to 
     advance the concepts of high performance public buildings;
       (iii) obtaining technical services and assistance in 
     planning and designing high performance public buildings; and
       (iv) collecting and monitoring data and information 
     pertaining to the high performance public building projects.
       (B) Grants to promote participation.--Grants under 
     paragraph (2)(C) may be used for promotional and marketing 
     activities, including facilitating private and public 
     financing, promoting the use of energy service companies, 
     working with public building users, and communities, and 
     coordinating public benefit programs.
       (5) Implementation.--
       (A) Plans.--A grant under paragraph (2)(A) shall be 
     provided only to a unit of local government that, in 
     consultation with its State office of energy, has developed a 
     plan that the State energy office determines to be feasible 
     and appropriate in order to achieve the purposes for which 
     such grants are made.
       (B) Supplementing grant funds.--State energy offices shall 
     encourage qualifying units of local government to supplement 
     their grant funds with funds from other sources in the 
     implementation of their plans.
       (b) Allocation of Funds.--
       (1) In General.--Except as provided in paragraph (3), funds 
     appropriated to carry out this section shall be provided to 
     State energy offices.
       (2) Purposes.--Except as provided in paragraph (3), funds 
     appropriated to carry out this section shall be allocated as 
     follows:
       (A) Seventy percent shall be used to make grants under 
     subsection (a)(2)(A).
       (B) Fifteen percent shall be used to make grants under 
     subsection (a)(2)(B).
       (C) Fifteen percent shall be used to make grants under 
     subsection (a)(2)(C).
       (3) Other funds.--The Secretary of Energy may retain not to 
     exceed $300,000 per year from amounts appropriated under 
     subsection (c) to assist State energy offices in coordinating 
     and implementing the Program. Such funds may be used to 
     develop reference materials to further define the principles 
     and criteria to achieve high performance public buildings.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy to carry out 
     this section such sums as may be necessary for each of the 
     fiscal years 2002 through 2010.
       (d) Report to Congress.--The Secretary of Energy shall 
     conduct a biennial review of State actions implementing this 
     section, and the Secretary shall report to Congress on the 
     results of such reviews. In conducting such reviews, the 
     Secretary shall assess the effectiveness of the calculation 
     procedures used by the States in establishing eligibility of 
     units of local government for funding under this section, and 
     may assess other aspects of the State program to determine 
     whether they have been effectively implemented.
       (e) Definitions.--For purposes of this section:
       (1) High performance public building.--The term ``high 
     performance public building'' means a public building which, 
     in its design, construction, operation, and maintenance, 
     maximizes use of unconventional and renewable energy 
     resources and energy efficiency practices, is cost-effective 
     on a life cycle basis, uses affordable, environmentally 
     preferable, durable materials, enhances indoor environmental 
     quality, protects and conserves water, and optimizes site 
     potential.
       (2) Renewable energy.--The term ``renewable energy'' means 
     energy produced by solar, wind, geothermal, hydroelectric, or 
     biomass power.
       (3) Unconventional and renewable energy resources.--The 
     term ``unconventional and renewable energy resources'' means 
     renewable energy, hydrogen, fuel cells, cogeneration, 
     combined heat and power, heat recovery (including by use of a 
     Stirling heat engine), and distributed generation.

          Subtitle D--Energy Efficiency for Consumer Products

     SEC. 141. ENERGY STAR PROGRAM.

       (a) Amendment.--The Energy Policy and Conservation Act (42 
     U.S.C. 6201 and following) is amended by inserting the 
     following after section 324:

     ``SEC. 324A. ENERGY STAR PROGRAM.

       ``(a) In General.--There is established at the Department 
     of Energy and the Environmental Protection Agency a program 
     to identify and promote energy-efficient products and 
     buildings in order to reduce energy consumption, improve 
     energy security, and reduce pollution through labeling of 
     products and buildings that meet the highest energy 
     efficiency standards. Responsibilities under the program 
     shall be divided between the Department of Energy and the 
     Environmental Protection Agency consistent with the terms of 
     agreements between the two agencies. The Administrator and 
     the Secretary shall--
       ``(1) promote Energy Star compliant technologies as the 
     preferred technologies in the marketplace for achieving 
     energy efficiency and to reduce pollution;
       ``(2) work to enhance public awareness of the Energy Star 
     label; and
       ``(3) preserve the integrity of the Energy Star label.

     For the purposes of carrying out this section, there is 
     authorized to be appropriated for fiscal years 2002 through 
     2006 such sums as may be necessary, to remain available until 
     expended.
       ``(b) Study of Certain Products and Buildings.--Within 180 
     days after the date of the enactment of this section, the 
     Secretary and the Administrator, consistent with the terms of 
     agreements between the two agencies (including existing 
     agreements with respect to which agency shall handle a 
     particular product or building), shall determine whether the 
     Energy Star label should be extended to additional products 
     and buildings, including the following:
       ``(1) Air cleaners.
       ``(2) Ceiling fans.
       ``(3) Light commercial heating and cooling products.
       ``(4) Reach-in refrigerators and freezers.
       ``(5) Telephony.
       ``(6) Vending machines.
       ``(7) Residential water heaters.
       ``(8) Refrigerated beverage merchandisers.
       ``(9) Commercial ice makers.
       ``(10) School buildings.
       ``(11) Retail buildings.
       ``(12) Health care facilities.
       ``(13) Homes.
       ``(14) Hotels and other commercial lodging facilities.
       ``(15) Restaurants and other food service facilities.
       ``(16) Solar water heaters.
       ``(17) Building-integrated photovoltaic systems.
       ``(18) Reflective pigment coatings.
       ``(19) Windows.
       ``(20) Boilers.
       ``(21) Devices to extend the life of motor vehicle oil.
       ``(c) Cool Roofing.--In determining whether the Energy Star 
     label should be extended to roofing products, the Secretary 
     and the Administrator shall work with the roofing products 
     industry to determine the appropriate solar reflective index 
     of roofing products.''.
       (b) Table of Contents Amendment.--The table of contents of 
     the Energy Policy and Conservation Act is amended by 
     inserting after the item relating to section 324 the 
     following new item:

``Sec. 324A. Energy Star program.''.

     SEC. 141A. ENERGY SUN RENEWABLE AND ALTERNATIVE ENERGY 
                   PROGRAM.

       (a) Amendment.--The Energy Policy and Conservation Act (42 
     U.S.C. 6201 and following) is amended by inserting the 
     following after section 324A:

     ``SEC. 324B. ENERGY SUN RENEWABLE AND ALTERNATIVE ENERGY 
                   PROGRAM.

       ``(a) Program.--There is established at the Environmental 
     Protection Agency and the Department of Energy a government-
     industry partnership program to identify and promote the 
     purchase of renewable and alternative energy products, to 
     recognize companies that purchase renewable and alternative 
     energy products for the environmental and energy security 
     benefits of such purchases, and to educate consumers about 
     the environmental and energy security benefits of renewable 
     and alternative energy. Responsibilities under the program 
     shall be divided between the Environmental Protection Agency 
     and the Department of Energy consistent with the terms of 
     agreements between the two agencies. The Administrator of the 
     Environmental Protection Agency and the Secretary of Energy--
       ``(1) establish an Energy Sun label for renewable and 
     alternative energy products and technologies that the 
     Administrator or the Secretary (consistent with the terms of 
     agreements between the two agencies regarding responsibility 
     for specific product categories) determine to have 
     substantial environmental and energy security benefits and 
     commercial marketability.
       ``(2) establish an Energy Sun Company program to recognize 
     private companies that draw a substantial portion of their 
     energy

[[Page S11802]]

     from renewable and alternative sources that provide 
     substantial environmental and energy security benefits, as 
     determined by the Administrator or the Secretary.
       ``(3) promote Energy Sun compliant products and 
     technologies as the preferred products and technologies in 
     the marketplace for reducing pollution and achieving energy 
     security; and
       ``(4) work to enhance public awareness and preserve the 
     integrity of the Energy Sun label.

     For the purposes of carrying out this section, there is 
     authorized to be appropriated $10,000,000 for each of fiscal 
     years 2002 through 2006.
       ``(b) Study of Certain Products, Technologies, and 
     Buildings.--Within 18 months after the enactment of this 
     section, the Administrator and the Secretary, consistent with 
     the terms of agreements between the two agencies, shall 
     conduct a study to determine whether the Energy Sun label 
     should be authorized for products, technologies, and 
     buildings in the following categories:
       ``(1) Passive solar, solar thermal, concentrating solar 
     energy, solar water heating, and related solar products and 
     building technologies.
       ``(2) Solar photovoltaics and other solar electric power 
     generation technologies.
       ``(3) Wind.
       ``(4) Geothermal.
       ``(5) Biomass.
       ``(6) Distributed energy (including, but not limited to, 
     microturbines, combined heat and power, fuel cells, and 
     stirling heat engines).
       ``(7) Green power or other renewables and alternative based 
     electric power products (including green tag credit programs) 
     sold to retail consumers of electricity.
       ``(8) Homes.
       ``(9) School buildings.
       ``(10) Retail buildings.
       ``(11) Health care facilities.
       ``(12) Hotels and other commercial lodging facilities.
       ``(13) Restaurants and other food service facilities.
       ``(14) Rest area facilities along interstate highways.
       ``(15) Sports stadia, arenas, and concert facilities.
       ``(16) Any other product, technology or building category, 
     the accelerated recognition of which the Administrator or the 
     Secretary determines to be necessary or appropriate for the 
     achievement of the purposes of this section.

     Nothing in this subsection shall be construed to limit the 
     discretion of the Administrator or the Secretary under 
     subsection (a)(1) to include in the Energy Sun program 
     additional products, technologies, and buildings not listed 
     in this subsection. Participation by private-sector entities 
     in programs or studies authorized by this section shall be 
     (A) voluntary, and (B) by permission of the Administrator or 
     Secretary, on terms and conditions the Administrator or 
     the Secretary (consistent with agreements between the 
     agencies) deems necessary or appropriate to carry out the 
     purposes and requirements of this section.
       ``(c) Definition.--For the purposes of this section, the 
     term ``renewable and alternative energy'' shall have the same 
     meaning as the term ``unconventional and renewable energy 
     resources'' in Section 551 of the National Energy 
     Conservation Policy Act (42 U.S.C. 8259).''.
       (b) Table of Contents Amendment.--The table of contents of 
     the Energy Policy and Conservation Act is amended by 
     inserting after the item relating to section 324A the 
     following new item:

``Sec. 324B. Energy Sun renewable and alternative energy program.''.

     SEC. 142. LABELING OF ENERGY EFFICIENT APPLIANCES.

       (a) Study.--Section 324(e) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6294(e)) is amended as follows:
       (1) By inserting ``(1)'' before ``The Secretary, in 
     consultation''.
       (2) By redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively.
       (3) By adding the following new paragraph at the end:
       ``(2) The Secretary shall make recommendations to the 
     Commission within 180 days of the date of the enactment of 
     this paragraph regarding labeling of consumer products that 
     are not covered products in accordance with this section, 
     where such labeling is likely to assist consumers in making 
     purchasing decisions and is technologically and economically 
     feasible.''.
       (b) Noncovered Products.--Section 324(a)(2) of the Energy 
     Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended 
     by adding the following at the end:
       ``(F) Not later than 1 year after the date of the enactment 
     of this subparagraph, the Commission shall initiate a 
     rulemaking to prescribe labeling rules under this section 
     applicable to consumer products that are not covered products 
     if it determines that labeling of such products is likely to 
     assist consumers in making purchasing decisions and is 
     technologically and economically feasible.
       ``(G) Not later than 3 months after the date of the 
     enactment of this subparagraph, the Commission shall initiate 
     a rulemaking to consider the effectiveness of the current 
     consumer products labeling program in assisting consumers in 
     making purchasing decisions and improving energy efficiency 
     and to consider changes to the label that would improve the 
     effectiveness of the label. Such rulemaking shall be 
     completed within 15 months of the date of the enactment of 
     this subparagraph.''.

     SEC. 143. APPLIANCE STANDARDS.

       (a) Standards for Household Appliances in Standby Mode.--
     (1) Section 325 of the Energy Policy and Conservation Act (42 
     U.S.C. 6295) is amended by adding at the end the following:
       ``(u) Standby Mode Electric Energy Consumption by Household 
     Appliances.--
       (1) In this subsection:
       ``(A) The term ``household appliance'' means any device 
     that uses household electric current, operates in a standby 
     mode, and is identified by the Secretary as a major consumer 
     of electricity in standby mode, except digital televisions, 
     digital set top boxes, digital video recorders, any product 
     recognized under the Energy Star program, any product that 
     was on the date of the enactment of this Act subject to an 
     energy conservation standard under this section, and any 
     product regarding which the Secretary finds that the expected 
     additional cost to the consumer of purchasing such product as 
     a result of complying with a standard established under this 
     section is not economically justified within the meaning of 
     subsection (o).
       ``(B) The term ``standby mode'' means a mode in which a 
     household appliance consumes the least amount of electric 
     energy that the household appliance is capable of consuming 
     without being completely switched off (provided that, the 
     amount of electric energy consumed in such mode is 
     substantially less than the amount the household appliance 
     would consume in its normal operational mode).
       ``(C) The term ``major consumer of electricity in standby 
     mode'' means a product for which a standard prescribed under 
     this section would result in substantial energy savings as 
     compared to energy savings achieved or expected to be 
     achieved by standards established by the Secretary under 
     subsections (o) and (p) of this section for products that 
     were, at the time of the enactment of this subsection, 
     covered products under this section.
       ``(2)(A) Except as provided in subparagraph (B), a 
     household appliance that is manufactured in, or imported for 
     sale in, the United States on or after the date that is 2 
     years after the date of the enactment of this subsection 
     shall not consume in standby mode more than 1 watt.
       ``(B) In the case of analog televisions, the Secretary 
     shall prescribe, on or after the date that is 2 years after 
     the date of the enactment of this subsection, in accordance 
     with subsections (o) and (p) of section 325, an energy 
     conservation standard that is technologically feasible and 
     economically justified under section 325(o)(2)(A) (in lieu of 
     the 1 watt standard under subparagraph (A)).
       ``(3)(A) A manufacturer or importer of a household 
     appliance may submit to the Secretary an application for an 
     exemption of the household appliance from the standard under 
     paragraph (2).
       ``(B) The Secretary shall grant an exemption for a 
     household appliance for which an application is made under 
     subparagraph (A) if the applicant provides evidence showing 
     that, and the Secretary determines that--
       ``(i) it is not technically feasible to modify the 
     household appliance to enable the household appliance to meet 
     the standard;
       ``(ii) the standard is incompatible with an energy 
     efficiency standard applicable to the household appliance 
     under another subsection; or
       ``(iii) the cost of electricity that a typical consumer 
     would save in operating the household appliance meeting the 
     standard would not equal the increase in the price of the 
     household appliance that would be attributable to the 
     modifications that would be necessary to enable the household 
     appliance to meet the standard by the earlier of--
       ``(I) the date that is 7 years after the date of purchase 
     of the household appliance; or
       ``(II) the end of the useful life of the household 
     appliance.
       ``(C) If the Secretary determines that it is not 
     technically feasible to modify a household appliance to meet 
     the standard under paragraph (2), the Secretary shall 
     establish a different standard for the household appliance in 
     accordance with the criteria under subsection (l).
       ``(4)(A) Not later than 1 year after the date of the 
     enactment of this subsection, the Secretary shall establish a 
     test procedure for determining the amount of consumption of 
     power by a household appliance operating in standby mode.
       ``(B) In establishing the test procedure, the Secretary 
     shall consider--
       ``(i) international test procedures under development;
       ``(ii) test procedures used in connection with the Energy 
     Star program; and
       ``(iii) test procedures used for measuring power 
     consumption in standby mode in other countries.
       ``(5) Further reduction of standby power consumption.--The 
     Secretary shall provide technical assistance to manufacturers 
     in achieving further reductions in standby mode electric 
     energy consumption by household appliances.
       ``(v) Standby Mode Electric Energy Consumption by Digital 
     Televisions, Digital Set Top Boxes, and Digital Video 
     Recorders.--The Secretary shall initiate on January 1, 2007 a 
     rulemaking to prescribe, in accordance with subsections (o) 
     and (p), an energy conservation standard of standby mode 
     electric energy consumption by digital television sets, 
     digital set top boxes, and digital

[[Page S11803]]

     video recorders. The Secretary shall issue a final rule 
     prescribing such standards not later than 18 months 
     thereafter. In determining whether a standard under this 
     section is technologically feasible and economically 
     justified under section 325(o)(2)(A), the Secretary shall 
     consider the potential effects on market penetration by 
     digital products covered under this section, and shall 
     consider any recommendations by the FCC regarding such 
     effects.''.
       (2) Section 325(o)(3) of the Energy Policy and Conservation 
     Act (42 U.S.C. 6295(n)(1)) is amended by inserting at the end 
     of the paragraph the following: ``Notwithstanding any 
     provision of this part, the Secretary shall not amend a 
     standard established under subsection (u) or (v) of this 
     section.''.
       (b) Standards for Noncovered Products.--Section 325(m) of 
     the Energy Policy and Conservation Act (42 U.S.C. 6295(m)) is 
     amended as follows:
       (1) Inserting ``(1)'' before ``After''.
       (2) Inserting the following at the end:
       ``(2) Not later than 1 year after the date of the enactment 
     of the Energy Advancement and Conservation Act of 2001, the 
     Secretary shall conduct a rulemaking to determine whether 
     consumer products not classified as a covered product under 
     section 322(a) (1) through (18) meet the criteria of section 
     322(b)(1) and is a major consumer of electricity. If the 
     Secretary finds that a consumer product not classified as a 
     covered product meets the criteria of section 322(b)(1), he 
     shall prescribe, in accordance with subsections (o) and (p), 
     an energy conservation standard for such consumer product, if 
     such standard is reasonably probable to be technologically 
     feasible and economically justified within the meaning of 
     subsection (o)(2)(A). As used in this paragraph, the term 
     ``major consumer of electricity'' means a product for which a 
     standard prescribed under this section would result in 
     substantial aggregate energy savings as compared to energy 
     savings achieved or expected to be achieved by standards 
     established by the Secretary under paragraphs (o) and (p) of 
     this section for products that were, at the time of the 
     enactment of this paragraph, covered products under this 
     section.''.
       (c) Consumer Education on Energy Efficiency Benefits of Air 
     Conditioning, Heating and Ventilation Maintenance.--Section 
     337 of the Energy Policy and Conservation Act (42 U.S.C. 
     6307) is amended by adding the following new subsection after 
     subsection (b):
       ``(c) HVAC Maintenance.--For the purpose of ensuring that 
     installed air conditioning and heating systems operate at 
     their maximum rated efficiency levels, the Secretary shall, 
     within 180 days of the date of the enactment of this 
     subsection, develop and implement a public education campaign 
     to educate homeowners and small business owners concerning 
     the energy savings resulting from regularly scheduled 
     maintenance of air conditioning, heating, and ventilating 
     systems. In developing and implementing this campaign, the 
     Secretary shall consider support by the Department of public 
     education programs sponsored by trade and professional and 
     energy efficiency organizations. The public service 
     information shall provide sufficient information to allow 
     consumers to make informed choices from among professional, 
     licensed (where State or local licensing is required) 
     contractors. There are authorized to be appropriated to carry 
     out this subsection $5,000,000 for fiscal years 2002 and 2003 
     in addition to amounts otherwise appropriated in this 
     part.''.
       (d) Efficiency Standards for Furnace Fans, Ceiling Fans, 
     and Cold Drink Vending Machines.--
       (1) Definitions.--Section 321 of the Energy Policy and 
     Conservation Act (42 U.S.C. 6291) is amended by adding the 
     following at the end thereof:
       ``(32) The term ``residential furnace fan'' means an 
     electric fan installed as part of a furnace for purposes of 
     circulating air through the system air filters, the heat 
     exchangers or heating elements of the furnace, and the duct 
     work.
       ``(33) The terms ``residential central air conditioner 
     fan'' and ``heat pump circulation fan'' mean an electric fan 
     installed as part of a central air conditioner or heat pump 
     for purposes of circulating air through the system air 
     filters, the heat exchangers of the air conditioner or heat 
     pump, and the duct work.
       ``(34) The term ``suspended ceiling fan'' means a fan 
     intended to be mounted to a ceiling outlet box, ceiling 
     building structure, or to a vertical rod suspended from the 
     ceiling, and which as blades which rotate below the ceiling 
     and consists of an electric motor, fan blades (which rotate 
     in a direction parallel to the floor), an optional lighting 
     kit, and one or more electrical controls (integral or 
     remote) governing fan speed and lighting operation.
       ``(35) The term ``refrigerated bottled or canned beverage 
     vending machine'' means a machine that cools bottled or 
     canned beverages and dispenses them upon payment.''.
       (2) Testing requirements.--Section 323 of the Energy Policy 
     and Conservation Act (42 U.S.C. 6293) is amended by adding 
     the following at the end thereof:
       ``(f) Additional Consumer Products.--The Secretary shall 
     within 18 months after the date of the enactment of this 
     subsection prescribe testing requirements for residential 
     furnace fans, residential central air conditioner fans, heat 
     pump circulation fans, suspended ceiling fans, and 
     refrigerated bottled or canned beverage vending machines. 
     Such testing requirements shall be based on existing test 
     procedures used in industry to the extent practical and 
     reasonable. In the case of residential furnace fans, 
     residential central air conditioner fans, heat pump 
     circulation fans, and suspended ceiling fans, such test 
     procedures shall include efficiency at both maximum output 
     and at an output no more than 50 percent of the maximum 
     output.''.
       (3) Standards for additional consumer products.--Section 
     325 of the Energy Policy and Conservation Act (42 U.S.C. 
     6295) is amended by adding the following at the end thereof:
       ``(w) Residential Furnace Fans, Central Air and Heat Pump 
     Circulation Fans, Suspended Ceiling Fans, and Vending 
     Machines.--
       ``(1) The Secretary shall, within 18 months after the date 
     of the enactment of this subsection, assess the current and 
     projected future market for residential furnace fans, 
     residential central air conditioner and heat pump circulation 
     fans, suspended ceiling fans, and refrigerated bottled or 
     canned beverage vending machines. This assessment shall 
     include an examination of the types of products sold, the 
     number of products in use, annual sales of these products, 
     energy used by these products sold, the number of products in 
     use, annual sales of these products, energy used by these 
     products, estimates of the potential energy savings from 
     specific technical improvements to these products, and an 
     examination of the cost-effectiveness of these improvements. 
     Prior to the end of this time period, the Secretary shall 
     hold an initial scoping workshop to discuss and receive input 
     to plans for developing minimum efficiency standards for 
     these products.
       ``(2) The Secretary shall within 24 months after the date 
     on which testing requirements are prescribed by the Secretary 
     pursuant to section 323(f), prescribe, by rule, energy 
     conservation standards for residential furnace fans, 
     residential central air conditioner and heat pump circulation 
     fans, suspended ceiling fans, and refrigerated bottled or 
     canned beverage vending machines. In establishing these 
     standards, the Secretary shall use the criteria and 
     procedures contained in subsections (l) and (m). Any standard 
     prescribed under this section shall apply to products 
     manufactured 36 months after the date such rule is 
     published.''.
       (4) Labeling.--Section 324(a) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6294(a)) is amended by adding the 
     following at the end thereof:
       ``(5) The Secretary shall within 6 months after the date on 
     which energy conservation standards are prescribed by the 
     Secretary for covered products referred to in section 325(w), 
     prescribe, by rule, labeling requirements for such products. 
     These requirements shall take effect on the same date as the 
     standards prescribed pursuant to section 325(w).''.
       (5) Covered products.--Section 322(a) of the Energy Policy 
     and Conservation Act (42 U.S.C. 6292(a)) is amended by 
     redesignating paragraph (19) as paragraph (20) and by 
     inserting after paragraph (18) the following:
       ``(19) Beginning on the effective date for standards 
     established pursuant to subsection (v) of section 325, each 
     product referred to in such subsection (v).''.

                 Subtitle E--Energy Efficient Vehicles

     SEC. 151. HIGH OCCUPANCY VEHICLE EXCEPTION.

       (a) In General.--Notwithstanding section 102(a)(1) of title 
     23, United States Code, a State may, for the purpose of 
     promoting energy conservation, permit a vehicle with fewer 
     than 2 occupants to operate in high occupancy vehicle lanes 
     if such vehicle is a hybrid vehicle or is fueled by an 
     alternative fuel.
       (b) Hybrid Vehicle Defined--In this section, the term 
     ``hybrid vehicle'' means a motor vehicle-
       (1) which draws propulsion energy from onboard sources of 
     stored energy which are both--
       (A) an internal combustion or heat engine using combustible 
     fuel; and
       (B) a rechargeable energy storage system;
       (2) which, in the case of a passenger automobile or light 
     truck--
       (A) for 2002 and later model vehicles, has received a 
     certificate of conformity under section 206 of the Clean Air 
     Act (42 U.S.C. 7525) and meets or exceeds the equivalent 
     qualifying California low emission vehicle standard under 
     section 243(e)(2) of the Clean Air Act (42 U.S.C. 7583(e)(2)) 
     for that make and model year; and
       (B) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets the Tier II emission 
     level established in regulations prescribed by the 
     Administrator of the Environmental Protection Agency under 
     section 202(i) of the Clean Air Act (42 U.S.C. 7521(i)) for 
     that make and model year vehicle; and
       (3) which is made by a manufacturer.
       (c) Alternative Fuel Defined--In this section, the term 
     ``alternative fuel'' has the meaning such term has under 
     section 301(2) of the Energy Policy Act of 1992 (42 U.S.C. 
     13211(2)).

     SEC. 152. RAILROAD EFFICIENCY.

       (a) Locomotive Technology Demonstration-- The Secretary of 
     Energy shall establish a public-private research partnership 
     with railroad carriers, locomotive manufacturers, and a 
     world-class research and test center dedicated to the 
     advancement of railroad technology, efficiency, and safety 
     that is owned by the Federal Railroad Administration and 
     operated in the private sector,

[[Page S11804]]

     for the development and demonstration of locomotive 
     technologies that increase fuel economy and reduce emissions.
       (b) Authorization of Appropriations--There are authorized 
     to be appropriated to the Secretary of Energy $25,000,000 for 
     fiscal year 2002, $30,000,000 for fiscal year 2003, and 
     $35,000,000 for fiscal year 2004 for carrying out this 
     section.

     SEC. 153. BIODIESEL FUEL USE CREDITS.

       Section 312(c) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(c)) is amended--
       (1) by striking ``NOT'' in the subsection heading; and
       (2) by striking ``not''.

     SEC. 154. MOBILE TO STATIONARY SOURCE TRADING.

       Within 90 days after the enactment of this section, the 
     Administrator of the Environmental Protection Agency is 
     directed to commence a review of the Agency's policies 
     regarding the use of mobile to stationary source trading of 
     emission credits under the Clean Air Act to determine whether 
     such trading can provide both nonattainment and attainment 
     areas with additional flexibility in achieving and 
     maintaining healthy air quality and increasing use of 
     alternative fuel and advanced technology vehicles, thereby 
     reducing United States dependence on foreign oil.

                      Subtitle F--Other Provisions

     SEC. 161. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO 
                   EMERGING ENERGY TECHNOLOGY.

       (a) In General--Each Federal agency shall carry out a 
     review of its regulations and standards to determine those 
     that act as a barrier to market entry for emerging energy-
     efficient technologies, including, but not limited to, fuel 
     cells, combined heat and power, and distributed generation 
     (including small-scale renewable energy).
       (b) Report to Congress--No later than 18 months after the 
     date of the enactment of this section, each agency shall 
     provide a report to Congress and the President detailing all 
     regulatory barriers to emerging energy-efficient 
     technologies, along with actions the agency intends to take, 
     or has taken, to remove such barriers.
       (c) Periodic Review--Each agency shall subsequently review 
     its regulations and standards in the manner specified in this 
     section no less frequently than every 5 years, and report 
     their findings to Congress and the President. Such reviews 
     shall include a detailed analysis of all agency actions taken 
     to remove existing barriers to emerging energy 
     technologies.

     SEC. 162. ADVANCED IDLE ELIMINATION SYSTEMS.

       (a) Definitions.--
       (1) Advanced idle elimination system.--The term ``advanced 
     idle elimination system'' means a device or system of devices 
     that is installed at a truck stop or other location (for 
     example, a loading, unloading, or transfer facility) where 
     vehicles (such as trucks, trains, buses, boats, automobiles, 
     and recreational vehicles) are parked and that is designed to 
     provide to the vehicle the services (such as heat, air 
     conditioning, and electricity) that would otherwise require 
     the operation of the auxiliary or drive train engine or both 
     while the vehicle is stationary and parked.
       (2) Extended Idling.--The term ``extended idling'' means 
     the idling of a motor vehicle for a period greater than 60 
     minutes.
       (b) Recognition of Benefits of Advanced Idle Elimination 
     Systems.--Within 90 days after the date of the enactment of 
     this subsection, the Administrator of the Environmental 
     Protection Agency is directed to commence a review of the 
     Agency's mobile source air emissions models used under the 
     Clean Air Act to determine whether such models accurately 
     reflect the emissions resulting from extended idling of 
     heavy-duty trucks and other vehicles and engines, and shall 
     update those models as the Administrator deems appropriate. 
     Additionally, within 90 days after the date of the enactment 
     of this subsection, the Administrator shall commence a review 
     as to the appropriate emissions reductions credit that should 
     be allotted under the Clean Air Act for the use of advanced 
     idle elimination systems, and whether such credits should be 
     subject to an emissions trading system, and shall revise 
     Agency regulations and guidance as the Administrator deems 
     appropriate.

     SEC. 163. STUDY OF BENEFITS AND FEASIBILITY OF OIL BYPASS 
                   FILTRATION TECHNOLOGY.

       (a) Study.--The Secretary of Energy and the Administrator 
     of the Environmental Protection Agency shall jointly conduct 
     a study of oil bypass filtration technology in motor vehicle 
     engines. The study shall analyze and quantify the potential 
     benefits of such technology in terms of reduced demand for 
     oil and the potential environmental benefits of the 
     technology in terms of reduced waste and air pollution. The 
     Secretary and the Administrator shall also examine the 
     feasibility of using such technology in the Federal motor 
     vehicle fleet.
       (b) Report.--Not later than 6 months after the enactment of 
     this Act, the Secretary of Energy and the Administrator of 
     the Environmental Protection Agency shall jointly submit a 
     report containing the results of the study conducted under 
     subsection (a) to the Committee on Energy and Commerce of the 
     United States House of Representatives and to the Committee 
     on Energy and Natural Resources of the United States Senate.

     SEC. 164. GAS FLARE STUDY.

       (a) Study.--The Secretary of Energy shall conduct a study 
     of the economic feasibility of installing small cogeneration 
     facilities utilizing excess gas flares at petrochemical 
     facilities to provide reduced electricity costs to customers 
     living within 3 miles of the petrochemical facilities. The 
     Secretary shall solicit public comment to assist in preparing 
     the report required under subsection (b).
       (b) Report.--Not later than 18 months after the date of the 
     enactment of this Act, the Secretary of Energy shall transmit 
     a report to the Congress on the results of the study 
     conducted under subsection (a).

     SEC. 165. TELECOMMUTING STUDY.

       (a) Study Required.--The Secretary, in consultation with 
     Commission, and the NTIA, shall conduct a study of the energy 
     conservation implications of the widespread adoption of 
     telecommuting in the United States.
       (b) Required Subjects of Study.--The study required by 
     subsection (a) shall analyze the following subjects in 
     relation to the energy saving potential of telecommuting:
       (1) Reductions of energy use and energy costs in commuting 
     and regular office heating, cooling, and other operations.
       (2) Other energy reductions accomplished by telecommuting.
       (3) Existing regulatory barriers that hamper telecommuting, 
     including barriers to broadband telecommunications services 
     deployment.
       (4) Collateral benefits to the environment, family life, 
     and other values.
       (c) Report Required.--The Secretary shall submit to the 
     President and the Congress a report on the study required by 
     this section not later than 6 months after the date of the 
     enactment of this Act. Such report shall include a 
     description of the results of the analysis of each of the 
     subject described in subsection (b).
       (d) Definitions.--As used in this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (2) Commission.--The term ``Commission'' means the Federal 
     Communications Commission.
       (3) NTIA.--The term ``NTIA'' means the National 
     Telecommunications and Information Administration of the 
     Department of Commerce.
       (4) Telecommuting.--The term ``telecommuting'' means the 
     performance of work functions using communications 
     technologies, thereby eliminating or substantially reducing 
     the need to commute to and from traditional worksites.

                   TITLE II--AUTOMOBILE FUEL ECONOMY

     SEC. 201. AVERAGE FUEL ECONOMY STANDARDS FOR NONPASSENGER 
                   AUTOMOBILES.--

       Section 32902(a) of title 49, United States Code, is 
     amended--
       (1) by inserting ``(1)'' after ``Nonpassenger 
     Automobiles.--''; and
       (2) by adding at the end the following:
       ``(2) The Secretary shall prescribe under paragraph (1) 
     average fuel economy standards for automobiles (except 
     passenger automobiles) manufactured in model years 2004 
     through 2010 that are calculated to ensure that the aggregate 
     amount of gasoline projected to be used in those model years 
     by automobiles to which the standards apply is at least 5 
     billion gallons less than the aggregate amount of gasoline 
     that would be used in those model years by such automobiles 
     if they achieved only the fuel economy required under the 
     average fuel economy standard that applies under this 
     subsection to automobiles (except passenger automobiles) 
     manufactured in model year 2002.''.

     SEC. 202. CONSIDERATION OF PRESCRIBING DIFFERENT AVERAGE FUEL 
                   ECONOMY STANDARDS FOR NONPASSENGER AUTOMOBILES.

       (a) In General.--The Secretary of Transportation shall, in 
     prescribing average fuel economy standards under section 
     32902(a) of title 49, United States Code, for automobiles 
     (except passenger automobiles) manufactured in model year 
     2004, consider the potential benefits of--
       (1) establishing a weight-based system for automobiles, 
     that is based on the inertia weight, curb weight, gross 
     vehicle weight rating, or another appropriate measure of such 
     automobiles; and
       (2) prescribing different fuel economy standards for 
     automobiles that are subject to the weight-based system.
       (b) Specific Considerations.--In implementing this section 
     the Secretary--
       (1) shall consider any recommendations made in the National 
     Academy of Sciences study completed pursuant to the 
     Department of Transportation and Related Agencies 
     Appropriations Act, 2000 (Public Law 106-346; 114 Stat. 2763 
     et seq.); and
       (2) shall evaluate the merits of any weight-based system in 
     terms of motor vehicle safety, energy conservation, and 
     competitiveness of and employment in the United States 
     automotive sector, and if a weight-based system is 
     established by the Secretary a manufacturer may trade credits 
     between or among the automobiles (except passenger 
     automobiles) manufactured by the manufacturer.

     SEC. 203. DUAL FUELED AUTOMOBILES.

       (a) Purposes.--The purposes of this section are--
       (1) to extend the manufacturing incentives for dual fueled 
     automobiles, as set forth in subsections (b) and (d) of 
     section 32905 of title 49, United States Code, through the 
     2008 model year; and
       (2) to similarly extend the limitation on the maximum 
     average fuel economy increase

[[Page S11805]]

     for such automobiles, as set forth in subsection (a)(1) of 
     section 32906 of title 49, United States Code.
       (b) Amendments.--
       (1) Manufacturing Incentives.--Section 32905 of title 49, 
     United States Code, is amended as follows:
       (A) Subsections (b) and (d) are each amended by striking 
     ``model years 1993-2004'' and inserting ``model years 1993-
     2008''.
       (B) Subsection (f) is amended by striking ``Not later than 
     December 31, 2001, the Secretary'' and inserting ``Not later 
     than December 31, 2005, the Secretary''.
       (C) Subsection (f)(1) is amended by striking ``model year 
     2004'' and inserting ``model year 2008''.
       (D) Subsection (g) is amended by striking ``Not later than 
     September 30, 2000'' and inserting ``Not later than September 
     30, 2004''.
       (2) Maximum Fuel Economy Increase.--Subsection (a)(1) of 
     section 32906 of title 49, United States Code, is amended as 
     follows:
       (A) Subparagraph (A) is amended by striking ``the model 
     years 1993-2004'' and inserting ``model years 1993-2008''.
       (B) Subparagraph (B) is amended by striking ``the model 
     years 2005-2008'' and inserting ``model years 2009-2012''.

     SEC. 204. FUEL ECONOMY OF THE FEDERAL FLEET OF AUTOMOBILES.

       Section 32917 of title 49, United States Code, is amended 
     to read as follows:

        ``SEC. 32917. STANDARDS FOR EXECUTIVE AGENCY AUTOMOBILES

       ``(a) Baseline Average Fuel Economy.--The head of each 
     executive agency shall determine, for all automobiles in the 
     agency's fleet of automobiles that were leased or bought as a 
     new vehicle in fiscal year 1999, the average fuel economy for 
     such automobiles. For the purposes of this section, the 
     average fuel economy so determined shall be the baseline 
     average fuel economy for the agency's fleet of automobiles.
       ``(b) Increase of Average Fuel Economy.--The head of an 
     executive agency shall manage the procurement of automobiles 
     for that agency in such a manner that--
       ``(1) not later than September 30, 2003, the average fuel 
     economy of the new automobiles in the agency's fleet of 
     automobiles is not less than 1 mile per gallon higher than 
     the baseline average fuel economy determined under subsection 
     (a) for that fleet; and
       ``(2) not later than September 30, 2005, the average fuel 
     economy of the new automobiles in the agency's fleet of 
     automobiles is not less than 3 miles per gallon higher than 
     the baseline average fuel economy determined under subsection 
     (a) for that fleet.
       ``(c) Calculation of Average Fuel Economy.--Average fuel 
     economy shall be calculated for the purposes of this section 
     in accordance with guidance which the Secretary of 
     Transportation shall prescribe for the implementation of this 
     section.
       ``(d) Definitions.--In this section:
       ``(1) The term ``automobile'' does not include any vehicle 
     designed for combat-related missions, law enforcement work, 
     or emergency rescue work.
       ``(2) The term ``executive agency'' has the meaning given 
     that term in section 105 of title 5.
       ``(3) The term ``new automobile'', with respect to the 
     fleet of automobiles of an executive agency, means an 
     automobile that is leased for at least 60 consecutive days or 
     bought, by or for the agency, after September 30, 1999.''.

     SEC. 205. HYBRID VEHICLES AND ALTERNATIVE VEHICLES.

       (a) In General.--Section 303(b)(1) of the Energy Policy Act 
     of 1992 is amended by adding the following at the end: ``Of 
     the total number of vehicles acquired by a Federal fleet in 
     fiscal years 2004 and 2005, at least 5 percent of the 
     vehicles in addition to those covered by the preceding 
     sentence shall be alternative fueled vehicles or hybrid 
     vehicles and in fiscal year 2006 and thereafter at least 10 
     percent of the vehicles in addition to those covered by the 
     preceding sentence shall be alternative fueled vehicles or 
     hybrid vehicles.''.
       (b) Definition.--Section 301 of such Act is amended by 
     striking ``and'' at the end of paragraph (13), by striking 
     the period at the end of paragraph (14) and inserting ``; 
     and'' and by adding at the end the following:
       ``(15) The term ``hybrid vehicle'' means a motor vehicle 
     which draws propulsion energy from onboard sources of stored 
     energy which are both--
       ``(A) an internal combustion or heat engine using 
     combustible fuel; and
       ``(B) a rechargeable energy storage system.''.

     SEC. 206. FEDERAL FLEET PETROLEUM-BASED NONALTERNATIVE FUELS.

       (a) In General.--Title III of the Energy Policy Act of 1992 
     (42 U.S.C. 13212 et seq.) is amended as follows:
       (1) By adding at the end thereof the following:

     ``SEC. 313. CONSERVATION OF PETROLEUM-BASED FUELS BY THE 
                   FEDERAL GOVERNMENT FOR LIGHT-DUTY MOTOR 
                   VEHICLES.

       ``(a) Purposes.--The purposes of this section are to 
     complement and supplement the requirements of section 303 of 
     this Act that Federal fleets, as that term is defined in 
     section 303(b)(3), acquire in the aggregate a minimum 
     percentage of alternative fuel vehicles, to encourage the 
     manufacture and sale or lease of such vehicles nationwide, 
     and to achieve, in the aggregate, a reduction in the amount 
     of the petroleum-based fuels (other than the alternative 
     fuels defined in this title) used by new light-duty motor 
     vehicles acquired by the Federal Government in model years 
     2004 through 2010 and thereafter.
       ``(b) Implementation.--In furtherance of such purposes, 
     such Federal fleets in the aggregate shall reduce the 
     purchase of petroleum-based nonalternative fuels for such 
     fleets beginning October 1, 2003, through September 30, 2009, 
     from the amount purchased for such fleets over a comparable 
     period since enactment of this Act, as determined by the 
     Secretary, through the annual purchase, in accordance with 
     section 304, and the use of alternative fuels for the light-
     duty motor vehicles of such Federal fleets, so as to achieve 
     levels which reflect total reliance by such fleets on the 
     consumptive use of alternative fuels consistent with the 
     provisions of section 303(b) of this Act. The Secretary 
     shall, within 120 days after the enactment of this section, 
     promulgate, in consultation with the Administrator of the 
     General Services Administration and the Director of the 
     Office of Management and Budget and such other heads of 
     entities referenced in section 303 within the executive 
     branch as such Director may designate, standards for the full 
     and prompt implementation of this section by such entities. 
     The Secretary shall monitor compliance with this section and 
     such standards by all such fleets and shall report annually 
     to the Congress, based on reports by the heads of such 
     fleets, on the extent to which the requirements of this 
     section and such standards are being achieved. The report 
     shall include information on annual reductions achieved of 
     petroleum-based fuels and the problems, if any, encountered 
     in acquiring alternative fuels and in requiring their use.''.
       (2) By amending section 304(b) of such Act to read as 
     follows:
       ``(b) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary or, as 
     appropriate, the head of each Federal fleet subject to the 
     provisions of this section and section 313 of this Act, such 
     sums as may be necessary to achieve the purposes of section 
     313(a) and the provisions of this section. Such sums shall 
     remain available until expended.''.
       (b) Clerical Amendment.--The table of contents in section 
     1(b) of such Act is amended by adding at the end of the items 
     relating to title III the following:
       ``Sec. 313. Conservation of petroleum-based fuels by the 
           Federal Government for light-duty motor vehicles.''.

     SEC. 207. STUDY OF FEASIBILITY AND EFFECTS OF REDUCING USE OF 
                   FUEL FOR AUTOMOBILES.

       (a) In General.--Not later than 30 days after the date of 
     the enactment of this Act, the Secretary of Transportation 
     shall enter into an arrangement with the National Academy of 
     Sciences under which the Academy shall study the feasibility 
     and effects of reducing by model year 2010, by a significant 
     percentage, the use of fuel for automobiles.
       (b) Subjects of Study.--The study under this section shall 
     include--
       (1) examination of, and recommendation of alternatives to, 
     the policy under current Federal law of establishing average 
     fuel economy standards for automobiles and requiring each 
     automobile manufacturer to comply with average fuel economy 
     standards that apply to the automobiles it manufactures;
       (2) examination of how automobile manufacturers could 
     contribute toward achieving the reduction referred to in 
     subsection (a);
       (3) examination of the potential of fuel cell technology in 
     motor vehicles in order to determine the extent to which such 
     technology may contribute to achieving the reduction referred 
     to in subsection (a); and
       (4) examination of the effects of the reduction referred to 
     in subsection (a) on--
       (A) gasoline supplies;
       (B) the automobile industry, including sales of automobiles 
     manufactured in the United States;
       (C) motor vehicle safety; and
       (D) air quality.
       (c) Report.--The Secretary shall require the National 
     Academy of Sciences to submit to the Secretary and the 
     Congress a report on the findings, conclusion, and 
     recommendations of the study under this section by not later 
     than 1 year after the date of the enactment of this Act.

                       TITLE III--NUCLEAR ENERGY

     SEC. 301. LICENSE PERIOD.

       Section 103 c. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2133(c)) is amended--
       (1) by striking ``(c). Each such'' and inserting the 
     following:
       ``(c). License Period.--
       ``(1) In general.--Each such''; and
       (2) by adding at the end the following:
       ``(2) Combined licenses.--In the case of a combined 
     construction and operating license issued under section 185 
     b., the initial duration of the license may not exceed 40 
     years from the date on which the Commission finds, before 
     operation of the facility, that the acceptance criteria 
     required by section 185 b. are met.''.

     SEC. 302. COST RECOVERY FROM GOVERNMENT AGENCIES.

       Section 161 w. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2201(w)) is amended--
       (1) by striking ``for or is issued'' and all that follows 
     through ``1702'' and inserting ``to the Commission for, or is 
     issued by the Commission, a license or certificate'';
       (2) by striking ``483a'' and inserting ``9701''; and
       (3) by striking ``, of applicants for, or holders of, such 
     licenses or certificates''.

[[Page S11806]]

     SEC. 303. DEPLETED URANIUM HEXAFLUORIDE.

       Section 1(b) of Public Law 105-204 is amended by striking 
     ``fiscal year 2002'' and inserting ``fiscal year 2005''.

     SEC. 304. NUCLEAR REGULATORY COMMISSION MEETINGS.

       If a quorum of the Nuclear Regulatory Commission gathers to 
     discuss official Commission business the discussions shall be 
     recorded, and the Commission shall notify the public of such 
     discussions within 15 days after they occur. The Commission 
     shall promptly make a transcript of the recording available 
     to the public on request, except to the extent that public 
     disclosure is exempted or prohibited by law. This section 
     shall not apply to a meeting, within the meaning of that term 
     under section 552b(a)(2) of title 5, United States Code.

     SEC. 305. COOPERATIVE RESEARCH AND DEVELOPMENT AND SPECIAL 
                   DEMONSTRATION PROJECTS FOR THE URANIUM MINING 
                   INDUSTRY.

       (a) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary $10,000,000 for each of 
     fiscal years 2002, 2003, and 2004 for--
       (1) cooperative, cost-shared, agreements between the 
     Department of Energy and domestic uranium producers to 
     identify, test, and develop improved in situ leaching mining 
     technologies, including low-cost environmental restoration 
     technologies that may be applied to sites after completion of 
     in situ leaching operations; and
       (2) funding for competitively selected demonstration 
     projects with domestic uranium producers relating to--
       (A) enhanced production with minimal environmental impacts;
       (B) restoration of well fields; and
       (C) decommissioning and decontamination activities.
       (b) Domestic Uranium Producer.--For purposes of this 
     section, the term ``domestic uranium producer'' has the 
     meaning given that term in section 1018(4) of the Energy 
     Policy Act of 1992 (42 U.S.C. 2296b-7(4)), except that the 
     term shall not include any producer that has not produced 
     uranium from domestic reserves on or after July 30, 1998.

     SEC. 306. MAINTENANCE OF A VIABLE DOMESTIC URANIUM CONVERSION 
                   INDUSTRY.

       There are authorized to be appropriated to the Secretary 
     $800,000 for contracting with the Nation's sole remaining 
     uranium converter for the purpose of performing research 
     and development to improve the environmental and economic 
     performance of United States uranium conversion 
     operations.

     SEC. 307. PADUCAH DECONTAMINATION AND DECOMMISSIONING PLAN.

       The Secretary of Energy shall prepare and submit a plan to 
     Congress within 180 days after the date of the enactment of 
     this Act that establishes scope, cost, schedule, sequence of 
     activities, and contracting strategy for--
       (1) the decontamination and decommissioning of the 
     Department of Energy's surplus buildings and facilities at 
     the Paducah Gaseous Diffusion Plant that have no future 
     anticipated reuse; and
       (2) the remediation of Department of Energy Material 
     Storage Areas at the Paducah Gaseous Diffusion Plant.
       Such plan shall inventory all surplus facilities and 
     buildings, and identify and rank health and safety risks 
     associated with such facilities and buildings. Such plan 
     shall inventory all Department of Energy Material Storage 
     Areas, and identify and rank health and safety risks 
     associated with such Department of Energy Material Storage 
     Areas. The Department of Energy shall incorporate these risk 
     factors in designing the sequence and schedule for the plan. 
     Such plan shall identify funding requirements that are in 
     addition to the expected outlays included in the Department 
     of Energy's Environmental Management Plan for the Paducah 
     Gaseous Diffusion Plan.

     SEC. 308. STUDY TO DETERMINE FEASIBILITY OF DEVELOPING 
                   COMMERCIAL NUCLEAR ENERGY PRODUCTION FACILITIES 
                   AT EXISTING DEPARTMENT OF ENERGY SITES.

       (a) In General.--The Secretary of Energy shall conduct a 
     study to determine the feasibility of developing commercial 
     nuclear energy production facilities at Department of Energy 
     sites in existence on the date of the enactment of this Act, 
     including--
       (1) options for how and where nuclear power plants can be 
     developed on existing Department of Energy sites;
       (2) estimates on cost savings to the Federal Government 
     that may be realized by locating new nuclear power plants on 
     Federal sites;
       (3) the feasibility of incorporating new technology into 
     nuclear power plants located on Federal sites;
       (4) potential improvements in the licensing and safety 
     oversight procedures of nuclear power plants located on 
     Federal sites;
       (5) an assessment of the effects of nuclear waste 
     management policies and projects as a result of locating 
     nuclear power plants located on Federal sites; and
       (6) any other factors that the Secretary believes would be 
     relevant in making the determination.
       (b) Report.--Not later than 90 days after the date of the 
     enactment of this Act, the Secretary shall submit to Congress 
     a report describing the results of the study under subsection 
     (a).

     SEC. 309. PROHIBITION OF COMMERCIAL SALES OF URANIUM BY THE 
                   UNITED STATES UNTIL 2009.

       Section 3112 of the USEC Privatization Act (42 U.S.C. 
     2297h-10) is amended by adding at the end the following new 
     subsection:
       ``(g) Prohibition on Sales.--With the exception of sales 
     pursuant to subsection (b)(2) (42 U.S.C.2297h-10(b)(2)), 
     notwithstanding any other provision of law, the United States 
     Government shall not sell or transfer any uranium (including 
     natural uranium concentrates, natural uranium hexafluoride, 
     enriched uranium, depleted uranium, or uranium in any other 
     form) through March 23, 2009 (except sales or transfers for 
     use by the Tennessee Valley Authority in relation to the 
     Department of Energy's HEU or Tritium programs, or the 
     Department or Energy research reactor sales program, or any 
     depleted uranium hexaflouride to be transferred to a 
     designated Department of Energy contractor in conjunction 
     with the planned construction of the Depleted Uranium 
     Hexaflouride conversion plants in Portsmouth, Ohio, and 
     Paducah, Kentucky, to any natural uranium transferred to the 
     U.S. Enrichment Corporation from the Department of Energy to 
     replace contaminated uranium received from the Department of 
     Energy when the U.S. Enrichment Corporation was privatized in 
     July, 1998, or for emergency purposes in the event of a 
     disruption in supply to end users in the United States). 
     The aggregate of sales or transfers of uranium by the 
     United States Government after March 23, 2009, shall not 
     exceed 3,000,000 pounds U3O8 per calendar year.''.

                     TITLE IV--HYDROELECTRIC ENERGY

     SEC. 401. ALTERNATIVE CONDITIONS AND FISHWAYS.

       (a) Alternative Mandatory Conditions.--Section 4 of the 
     Federal Power Act (16 U.S.C. 797) is amended by adding at the 
     end the following:
       ``(h)(1) Whenever any person applies for a license for any 
     project works within any reservation of the United States, 
     and the Secretary of the department under whose supervision 
     such reservation falls deems a condition to such license to 
     be necessary under the first proviso of subsection (e), the 
     license applicant or any other party to the licensing 
     proceeding may propose an alternative condition.
       ``(2) Notwithstanding the first proviso of subsection (e), 
     the Secretary of the department under whose supervision the 
     reservation falls shall accept the proposed alternative 
     condition referred to in paragraph (1), and the Commission 
     shall include in the license such alternative condition, if 
     the Secretary of the appropriate department determines, based 
     on substantial evidence provided by the party proposing such 
     alternative condition, that the alternative condition--
       ``(A) provides no less protection for the reservation than 
     provided by the condition deemed necessary by the Secretary; 
     and
       ``(B) will either--
       ``(i) cost less to implement, or
       ``(ii) result in improved operation of the project works 
     for electricity production,

     as compared to the condition deemed necessary by the 
     Secretary.
       ``(3) Within 1 year after the enactment of this subsection, 
     each Secretary concerned shall, by rule, establish a process 
     to expeditiously resolve conflicts arising under this 
     subsection.''.
       (b) Alternative Fishways.--Section 18 of the Federal Power 
     Act (16 U.S.C. 811) is amended by--
       (1) inserting ``(a)'' before the first sentence; and
       (2) adding at the end the following:
       ``(b)(1) Whenever the Commission shall require a licensee 
     to construct, maintain, or operate a fishway prescribed by 
     the Secretary of the Interior or the Secretary of Commerce 
     under this section, the licensee or any other party to the 
     proceeding may propose an alternative to such prescription to 
     construct, maintain, or operate a fishway.
       ``(2) Notwithstanding subsection (a), the Secretary of the 
     Interior or the Secretary of Commerce, as appropriate, shall 
     accept and prescribe, and the Commission shall require, the 
     proposed alternative referred to in paragraph (1), if the 
     Secretary of the appropriate department determines, based on 
     substantial evidence provided by the party proposing such 
     alternative, that the alternative--
       ``(A) will be no less effective than the fishway initially 
     prescribed by the Secretary, and
       ``(B) will either--
       ``(i) cost less to implement, or
        ``(ii) result in improved operation of the project works 
     for electricity production,
     as compared to the fishway initially prescribed by the 
     Secretary.
       ``(3) Within 1 year after the enactment of this subsection, 
     the Secretary of the Interior and the Secretary of Commerce 
     shall each, by rule, establish a process to expeditiously 
     resolve conflicts arising under this subsection.''.

     SEC. 402. FERC DATA ON HYDROELECTRIC LICENSING.

       (a) Data Collection Procedures.--The Federal Energy 
     Regulatory Commission shall revise its procedures regarding 
     the collection of data in connection with the Commission's 
     consideration of hydroelectric licenses under the Federal 
     Power Act. Such revised data collection procedures shall be 
     designed to provide the Commission with complete and 
     accurate information concerning the time and costs to 
     parties involved in the licensing process. Such data shall 
     be available for each significant stage in the licensing 
     process and shall be designed

[[Page S11807]]

     to identify projects with similar characteristics so that 
     analyses can be made of the time and costs involved in 
     licensing proceedings based upon the different 
     characteristics of those proceedings.
       (b) Reports.--Within 6 months after the date of the 
     enactment of this Act, the Commission shall notify the 
     Committee on Energy and Commerce of the United States House 
     of Representatives and the Committee on Energy and Natural 
     Resources of the United States Senate of the progress made by 
     the Commission under subsection (a), and within 1 year after 
     such date of the enactment, the Commission shall submit a 
     report to such Committees specifying the measures taken by 
     the Commission pursuant to subsection (a).

                             TITLE V--FUELS

     SEC. 501. TANK DRAINING DURING TRANSITION TO SUMMERTIME RFG.

       Not later than 60 days after the enactment of the Act, the 
     Administrator of the Environmental Protection Agency shall 
     commence a rulemaking to determine whether modifications to 
     the regulations set forth in 40 CFR Section 80.78 and any 
     associated regulations regarding the transition to high ozone 
     season reformulated gasoline are necessary to ensure that the 
     transition to high ozone season reformulated gasoline is 
     conducted in a manner that minimizes disruptions to the 
     general availability and affordability of gasoline, and 
     maximizes flexibility with regard to the draining and 
     inventory management of gasoline storage tanks located at 
     refineries, terminals, wholesale and retail outlets, 
     consistent with the goals of the Clean Air Act. The 
     Administrator shall propose and take final action in such 
     rulemaking to ensure that any modifications are effective and 
     implemented at least 60 days prior to the beginning of the 
     high ozone season for the year 2002.

     SEC. 502. GASOLINE BLENDSTOCK REQUIREMENTS.

       Not later than 60 days after the enactment of this Act, the 
     Administrator of the Environmental Protection Agency shall 
     commence a rulemaking to determine whether modifications to 
     product transfer documentation, accounting, compliance 
     calculation, and other requirements contained in the 
     regulations of the Administrator set forth in section 80.102 
     of title 40 of the Code of Federal Regulations relating to 
     gasoline blendstocks are necessary to facilitate the movement 
     of gasoline and gasoline feedstocks among different regions 
     throughout the country and to improve the ability of 
     petroleum refiners and importers to respond to regional 
     gasoline shortages and prevent unreasonable short-term price 
     increases. The Administrator shall take into consideration 
     the extent to which such requirements have been, or will be, 
     rendered unnecessary or inefficient by reason of subsequent 
     environmental safeguards that were not in effect at the time 
     the regulations in section 80.102 of title 40 of the Code of 
     Federal Regulations were promulgated. The Administrator shall 
     propose and take final action in such rulemaking to ensure 
     that any modifications are effective and implemented at least 
     60 days prior to the beginning of the high ozone season for 
     the year 2002.

     SEC. 503. BOUTIQUE FUELS.

       (a) Joint Study.--The Administrator of the Environmental 
     Protection Agency and the Secretary of Energy shall jointly 
     conduct a study of all Federal, State, and local requirements 
     regarding motor vehicle fuels, including requirements 
     relating to reformulated gasoline, volatility (Reid Vapor 
     Pressure), oxygenated fuel, diesel fuel and other 
     requirements that vary from State to State, region to region, 
     or locality to locality. The study shall analyze--
       (1) the effect of the variety of such requirements on the 
     price of motor vehicle fuels to the consumer;
       (2) the availability and affordability of motor vehicle 
     fuels in different States and localities;
       (3) the effect of Federal, State, and local regulations, 
     including multiple fuel requirements, on domestic refineries 
     and the fuel distribution system;
       (4) the effect of such requirements on local, regional, and 
     national air quality requirements and goals;
       (5) the effect of such requirements on vehicle emissions;
       (6) the feasibility of developing national or regional fuel 
     specifications for the contiguous United States that would--
       (A) enhance flexibility in the fuel distribution 
     infrastructure and improve fuel fungibility;
       (B) reduce price volatility and costs to consumers and 
     producers;
       (C) meet local, regional, and national air quality 
     requirements and goals; and
       (D) provide increased gasoline market liquidity;
       (7) the extent to which the Environmental Protection 
     Agency's Tier II requirements for conventional gasoline may 
     achieve in future years the same or similar air quality 
     results as State reformulated gasoline programs and State 
     programs regarding gasoline volatility (RVP); and
       (8) the feasibility of providing incentives to promote 
     cleaner burning fuel.
       (b) Report.--By December 31, 2001, the Administrator of the 
     Environmental Protection Agency and the Secretary of Energy 
     shall submit a report to the Congress containing the results 
     of the study conducted under subsection (a). Such report 
     shall contain recommendations for legislative and 
     administrative actions that may be taken to simplify the 
     national distribution system for motor vehicle fuel, make 
     such system more cost-effective, and reduce the costs and 
     increase the availability of motor vehicle fuel to the end 
     user while meeting the requirements of the Clean Air Act. 
     Such recommendations shall take into account the need to 
     provide lead time for refinery and fuel distribution system 
     modifications necessary to assure adequate fuel supply for 
     all States.

     SEC. 504. FUNDING FOR MTBE CONTAMINATION.

       Notwithstanding any other provision of law, there is 
     authorized to be appropriated to the Administrator of the 
     Environmental Protection Agency from the Leaking Underground 
     Storage Trust Fund not more than $200,000,000 to be used for 
     taking such action, limited to assessment, corrective action, 
     inspection of underground storage tank systems, and 
     groundwater monitoring in connection with MTBE contamination, 
     as the Administrator deems necessary to protect human health 
     and the environment from releases of methyl tertiary butyl 
     ether (MTBE) from underground storage tanks.

                       TITLE VI--RENEWABLE ENERGY

     SEC. 601. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

       (a) Resource Assessment.--Not later than 1 year after the 
     date of the enactment of this Act, and each year thereafter, 
     the Secretary of Energy shall publish an assessment by the 
     National Laboratories of all renewable energy resources 
     available within the United States.
       (b) Contents of Report.--The report published under 
     subsection (a) shall contain each of the following:
       (1) A detailed inventory describing the available amount 
     and characteristics of solar, wind, biomass, geothermal, 
     hydroelectric and other renewable energy sources.
       (2) Such other information as the Secretary of Energy 
     believes would be useful in developing such renewable energy 
     resources, including descriptions of surrounding terrain, 
     population and load centers, nearby energy infrastructure, 
     location of energy and water resources, and available 
     estimates of the costs needed to develop each resource.

     SEC. 602. RENEWABLE ENERGY PRODUCTION INCENTIVE.

       Section 1212 of the Energy Policy Act of 1992 (42 U.S.C. 
     13317) is amended as follows:
       (1) In subsection (a) by striking ``and which satisfies'' 
     and all that follows through ``Secretary shall establish.'' 
     and inserting ``. The Secretary shall establish other 
     procedures necessary for efficient administration of the 
     program. The Secretary shall not establish any criteria or 
     procedures that have the effect of assigning to proposals a 
     higher or lower priority for eligibility or allocation of 
     appropriated funds on the basis of the energy source 
     proposed.''.
       (2) In subsection (b)--
       (A) by striking ``a State or any political'' and all that 
     follows through ``nonprofit electrical cooperative'' and 
     inserting ``an electricity-generating cooperative exempt from 
     taxation under section 501(c)(12) or section 1381(a)(2)(C) of 
     the Internal Revenue Code of 1986, a public utility described 
     in section 115 of such Code, a State, Commonwealth, 
     territory, or possession of the United States or the District 
     of Columbia, or a political subdivision thereof, or an Indian 
     tribal government or subdivision thereof,''; and
       (B) By inserting ``landfill gas,'' after ``wind, 
     biomass,''.
       (3) In subsection (c) by striking ``during the 10-fiscal 
     year period beginning with the first full fiscal year 
     occurring after the enactment of this section'' and inserting 
     ``before October 1, 2013''.
       (4) In subsection (d) by inserting ``or in which the 
     Secretary finds that all necessary Federal and State 
     authorizations have been obtained to begin construction of 
     the facility'' after ``eligible for such payments''.
       (5) In subsection (e)(1) by inserting ``landfill gas,'' 
     after ``wind, biomass,''.
       (6) In subsection (f) by striking ``the expiration of'' and 
     all that follows through ``of this section'' and inserting 
     ``September 30, 2023''.
       (7) In subsection (g)--
       (A) by striking ``1993, 1994, and 1995'' and inserting 
     ``2003 through 2023''; and
       (B) by inserting ``Funds may be appropriated pursuant to 
     this subsection to remain available until expended.'' after 
     ``purposes of this section.''.

     SEC. 603. STUDY OF ETHANOL FROM SOLID WASTE LOAN GUARANTEE 
                   PROGRAM.

       The Secretary of Energy shall conduct a study of the 
     feasibility of providing guarantees for loans by private 
     banking and investment institutions for facilities for the 
     processing and conversion of municipal solid waste and sewage 
     sludge into fuel ethanol and other commercial byproducts, and 
     not later than 90 days after the date of the enactment of 
     this Act shall transmit to the Congress a report on the 
     results of the study.

     SEC. 604. STUDY OF RENEWABLE FUEL CONTENT.

       (a) Study.--The Administrator of the Environmental 
     Protection Agency and the Secretary of Energy shall jointly 
     conduct a study of the feasibility of developing a 
     requirement that motor vehicle fuel sold or introduced into 
     commerce in the United States in calendar year 2002 or any 
     calendar year thereafter by a refiner, blender, or importer 
     shall, on a 6-month average basis, be comprised of a quantity 
     of renewable fuel, measured in gasoline-equivalent gallons. 
     As part of this study, the Administrator and Secretary shall 
     evaluate the use of a banking

[[Page S11808]]

     and trading credit system and the feasibility and 
     desirability of requiring an increasing percentage of 
     renewable fuel to be phased in over a 15-year period.
       (b) Report to Congress.--Not later than 6 months after the 
     date of the enactment of this Act, the Administrator and the 
     Secretary shall transmit to the Congress a report on the 
     results of the study conducted under this section.

                          TITLE VII--PIPELINES

     SEC. 701. PROHIBITION ON CERTAIN PIPELINE ROUTE.

       No license, permit, lease, right-of-way, authorization or 
     other approval required under Federal law for the 
     construction of any pipeline to transport natural gas from 
     lands within the Prudhoe Bay oil and gas lease area may be 
     granted for any pipeline that follows a route that 
     traverses--
       (1) the submerged lands (as defined by the Submerged Lands 
     Act) beneath, or the adjacent shoreline of, the Beaufort Sea; 
     and
       (2) enters Canada at any point north of 68 degrees North 
     latitude.

     SEC. 702. HISTORIC PIPELINES.

       Section 7 of the Natural Gas Act (15 U.S.C. 717(f)) is 
     amended by adding at the end the following new subsection:
       ``(i) Notwithstanding the National Historic Preservation 
     Act, a transportation facility shall not be eligible for 
     inclusion on the National Register of Historic Places 
     unless--
       ``(1) the Commission has permitted the abandonment of the 
     transportation facility pursuant to subsection (b) of this 
     section, or
       ``(2) the owner of the facility has given written consent 
     to such eligibility.

     Any transportation facility deemed eligible for inclusion on 
     the National Register of Historic Places prior to the date of 
     the enactment of this subsection shall no longer be eligible 
     unless the owner of the facility gives written consent to 
     such eligibility.''.

                  TITLE VIII--MISCELLANEOUS PROVISIONS

     SEC. 801. WASTE REDUCTION AND USE OF ALTERNATIVES.

       (a) Grant Authority.--The Secretary of Energy is authorized 
     to make a single grant to a qualified institution to examine 
     and develop the feasibility of burning post-consumer 
     carpet in cement kilns as an alternative energy source. 
     The purposes of the grant shall include determining--
       (1) how post-consumer carpet can be burned without 
     disrupting kiln operations;
       (2) the extent to which overall kiln emissions may be 
     reduced; and
       (3) how this process provides benefits to both cement kiln 
     operations and carpet suppliers.
       (b) Qualified Institution.--For the purposes of subsection 
     (a), a qualified institution is a research-intensive 
     institution of higher learning with demonstrated expertise in 
     the fields of fiber recycling and logistical modeling of 
     carpet waste collection and preparation.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy for carrying 
     out this section $275,000 for fiscal year 2002, to remain 
     available until expended.

     SEC. 802. ANNUAL REPORT ON UNITED STATES ENERGY INDEPENDENCE.

       (a) Report.--The Secretary of Energy, in consultation with 
     the heads of other relevant Federal agencies, shall include 
     in each report under section 801(c) of the Department of 
     Energy Organization Act a section which evaluates the 
     progress the United States has made toward obtaining the goal 
     of not more than 50 percent dependence on foreign oil sources 
     by 2010.
       (b) Alternatives.--The information required under this 
     section to be included in the reports under section 801(c) of 
     the Department of Energy Organization Act shall include a 
     specification of what legislative or administrative actions 
     must be implemented to meet this goal and set forth a range 
     of options and alternatives with a cost/benefit analysis for 
     each option or alternative together with an estimate of the 
     contribution each option or alternative could make to reduce 
     foreign oil imports. The Secretary shall solicit information 
     from the public and request information from the Energy 
     Information Agency and other agencies to develop the 
     information required under this section. The information 
     shall indicate, in detail, options and alternatives to--
       (1) increase the use of renewable domestic energy sources, 
     including conventional and nonconventional sources;
       (2) conserve energy resources, including improving 
     efficiencies and decreasing consumption; and
       (3) increase domestic production and use of oil, natural 
     gas, nuclear, and coal, including any actions necessary to 
     provide access to, and transportation of, these energy 
     resources.

     SEC. 803. STUDY OF AIRCRAFT EMISSIONS.

       The Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency shall jointly commence a 
     study within 60 days after the enactment of this Act to 
     investigate the impact of aircraft emissions on air quality 
     in areas that are considered to be in nonattainment for the 
     national ambient air quality standard for ozone. As part of 
     this study, the Secretary and the Administrator shall focus 
     on the impact of emissions by aircraft idling at airports and 
     on the contribution of such emissions as a percentage of 
     total emissions in the nonattainment area. Within 180 days of 
     the commencement of the study, the Secretary and the 
     Administrator shall submit a report to the Committees on 
     Energy and Commerce and Transportation and Infrastructure of 
     the United States House of Representatives and to the 
     Committees on Environment and Public Works and Commerce, 
     Science, and Transportation of the United States Senate 
     containing the results of the study and recommendations with 
     respect to a plan to maintain comprehensive data on aircraft 
     emissions and methods by which such emissions may be reduced, 
     without increasing individual aircraft noise, in order to 
     assist in the attainment of the national ambient air quality 
     standards.

                               DIVISION B

     SEC. 2001. SHORT TITLE.

       This division may be cited as the ``Comprehensive Energy 
     Research and Technology Act of 2001''.

     SEC. 2002. FINDINGS.

       The Congress finds that--
       (1) the Nation's prosperity and way of life are sustained 
     by energy use;
       (2) the growing imbalance between domestic energy 
     production and consumption means that the Nation is becoming 
     increasingly reliant on imported energy, which has the 
     potential to undermine the Nation's economy, standard of 
     living, and national security;
       (3) energy conservation and energy efficiency help maximize 
     the use of available energy resources, reduce energy 
     shortages, lower the Nation's reliance on energy imports, 
     mitigate the impacts of high energy prices, and help protect 
     the environment and public health;
       (4) development of a balanced portfolio of domestic energy 
     supplies will ensure that future generations of Americans 
     will have access to the energy they need;
       (5) energy efficiency technologies, renewable and 
     alternative energy technologies, and advanced energy systems 
     technologies will help diversify the Nation's energy 
     portfolio with few adverse environmental impacts and are 
     vital to delivering clean energy to fuel the Nation's 
     economic growth;
       (6) development of reliable, affordable, and 
     environmentally sound energy efficiency technologies, 
     renewable and alternative energy technologies, and advanced 
     energy systems technologies will require maintenance of a 
     vibrant fundamental scientific knowledge base and continued 
     scientific and technological innovations that can be 
     accelerated by Federal funding, whereas commercial deployment 
     of such systems and technologies are the responsibility of 
     the private sector;
       (7) Federal funding should focus on those programs, 
     projects, and activities that are long-term, high-risk, 
     noncommercial, and well-managed, and that provide the 
     potential for scientific and technological advances; and
       (8) public-private partnerships should be encouraged to 
     leverage scarce taxpayer dollars.

     SEC. 2003. PURPOSES.

       The purposes of this division are to--
       (1) protect and strengthen the Nation's economy, standard 
     of living, and national security by reducing dependence on 
     imported energy;
       (2) meet future needs for energy services at the lowest 
     total cost to the Nation, including environmental costs, 
     giving balanced and comprehensive consideration to 
     technologies that improve the efficiency of energy end uses 
     and that enhance energy supply;
       (3) reduce the air, water, and other environmental impacts 
     (including emissions of greenhouse gases) of energy 
     production, distribution, transportation, and use through the 
     development of environmentally sustainable energy systems;
       (4) consider the comparative environmental impacts of the 
     energy saved or produced by specific programs, projects, or 
     activities;
       (5) maintain the technological competitiveness of the 
     United States and stimulate economic growth through the 
     development of advanced energy systems and technologies;
       (6) foster international cooperation by developing 
     international markets for domestically produced sustainable 
     energy technologies, and by transferring environmentally 
     sound, advanced energy systems and technologies to developing 
     countries to promote sustainable development;
       (7) provide sufficient funding of programs, projects, and 
     activities that are performance-based and modeled as public-
     private partnerships, as appropriate; and
       (8) enhance the contribution of a given program, project, 
     or activity to fundamental scientific knowledge.

     SEC. 2004. GOALS.

       (a) In General.--Subject to subsection (b), in order to 
     achieve the purposes of this division under section 2003, the 
     Secretary should conduct a balanced energy research, 
     development, demonstration, and commercial application 
     portfolio of programs guided by the following goals to meet 
     the purposes of this division under section 2003.
       (1) Energy conservation and energy efficiency--
       (A) For the Building Technology, State and Community 
     Sector, the program should develop technologies, housing 
     components, designs, and production methods that will, by 
     2010--
       (i) reduce the monthly energy cost of new housing by 20 
     percent, compared to the cost as of the date of the enactment 
     of this Act;
       (ii) cut the environmental impact and energy use of new 
     housing by 50 percent, compared to the impact and use as of 
     the date of the enactment of this Act; and

[[Page S11809]]

       (iii) improve durability and reduce maintenance costs by 50 
     percent compared to the durability and costs as of the date 
     of the enactment of this Act.
       (B) For the Industry Sector, the program should, in 
     cooperation with the affected industries, improve the energy 
     intensity of the major energy-consuming industries by 
     at least 25 percent by 2010, compared to the energy 
     intensity as of the date of the enactment of this Act.
       (C) For Power Technologies, the program should, in 
     cooperation with the affected industries--
       (i) develop a microturbine (40 to 300 kilowatt) that is 
     more than 40 percent more efficient by 2006, and more than 50 
     percent more efficient by 2010, compared to the efficiency as 
     of the date of the enactment of this Act; and
       (ii) develop advanced materials for combustion systems that 
     reduce emissions of nitrogen oxides by 30 to 50 percent while 
     increasing efficiency 5 to 10 percent by 2007, compared to 
     such emissions as of the date of the enactment of this Act.
       (D) For the Transportation Sector, the program should, in 
     cooperation with affected industries--
       (i) develop a production prototype passenger automobile 
     that has fuel economy equivalent to 80 miles per gallon of 
     gasoline by 2004;
       (ii) develop class 7 and 8 heavy duty trucks and buses with 
     ultra low emissions and the ability to use an alternative 
     fuel that has an average fuel economy equivalent to--
       (I) 10 miles per gallon of gasoline by 2007; and
       (II) 13 miles per gallon of gasoline by 2010;
       (iii) develop a production prototype of a passenger 
     automobile with zero equivalent emissions that has an average 
     fuel economy of 100 miles per gallon of gasoline by 2010; and
       (iv) improve, by 2010, the average fuel economy of trucks--
       (I) in classes 1 and 2 by 300 percent; and
       (II) in classes 3 through 6 by 200 percent, compared to the 
     fuel economy as of the date of the enactment of this Act.
       (2) Renewable energy.--
       (A) For Hydrogen Research, to carry out the Spark M. 
     Matsunaga Hydrogen Research, Development, and Demonstration 
     Act of 1990, as amended by subtitle A of title II of this 
     division.
       (B) For bioenergy:
       (i) The program should reduce the cost of bioenergy 
     relative to other energy sources to enable the United States 
     to triple bioenergy use by 2010.
       (ii) For biopower systems, the program should reduce the 
     cost of such systems to enable commercialization of 
     integrated power-generating technologies that employ gas 
     turbines and fuel cells integrated with bioenergy gasifiers 
     within 5 years after the date of the enactment of this Act.
       (iii) For biofuels, the program should accelerate research, 
     development, and demonstration on advanced enzymatic 
     hydrolysis technology for making ethanol from cellulosic 
     feedstock, with the goal that between 2010 and 2015 ethanol 
     produced from energy crops would be fully competitive in 
     terms of price with gasoline as a neat fuel, in either 
     internal combustion engines or fuel cell vehicles.
       (C) For Geothermal Technology Development, the program 
     should focus on advanced concepts for the long term. The 
     first priority should be high-grade enhanced geothermal 
     systems; the second priority should be lower grade, hot dry 
     rock, and geopressured systems; and the third priority should 
     be support of field demonstrations of enhanced geothermal 
     systems technology, including sites in lower grade areas to 
     demonstrate the benefits of reservoir concepts to different 
     conditions.
       (D) For Hydropower, the program should provide a new 
     generation of turbine technologies that will increase 
     generating capacity and will be less damaging to fish and 
     aquatic ecosystems.
       (E) For Concentrating Solar Power, the program should 
     strengthen ongoing research, development, and demonstration 
     combining high-efficiency and high-temperature receivers with 
     advanced thermal storage and power cycles, with the goal of 
     making solar-only power (including baseload solar power) 
     widely competitive with fossil fuel power by 2015. The 
     program should limit or halt its research and development 
     on power-tower and power-trough technologies because 
     further refinements to these concepts will not further 
     their deployment, and should assess the market prospects 
     for solar dish/engine technologies to determine whether 
     continued research and development is warranted.
       (F) For Photovoltaic Energy Systems, the program should 
     pursue research, development, and demonstration that will, by 
     2005, increase the efficiency of thin film modules from the 
     current 7 percent to 11 percent in multi-million watt 
     production; reduce the direct manufacturing cost of 
     photovoltaic modules by 30 percent from the current $2.50 per 
     watt to $1.75 per watt by 2005; and establish greater than a 
     20-year lifetime of photovoltaic systems by improving the 
     reliability and lifetime of balance-of-system components and 
     reducing recurring cost by 40 percent. The program's top 
     priority should be the development of sound manufacturing 
     technologies for thin-film modules, and the program should 
     make a concerted effort to integrate fundamental research and 
     basic engineering research.
       (G) For Solar Building Technology Research, the program 
     should complete research and development on new polymers and 
     manufacturing processes to reduce the cost of solar water 
     heating by 50 percent by 2004, compared to the cost as of the 
     date of the enactment of this Act.
       (H) For Wind Energy Systems, the program should reduce the 
     cost of wind energy to three cents per kilowatt-hour at Class 
     6 (15 miles-per-hour annual average) wind sites by 2004, and 
     4 cents per kilowatt-hour in Class 4 (13 miles-per-hour 
     annual average) wind sites by 2015, and further if required 
     so that wind power can be widely competitive with fossil-
     fuel-based electricity in a restructured electric industry. 
     Program research on advanced wind turbine technology should 
     focus on turbulent flow studies, durable materials to extend 
     turbine life, blade efficiency, and higher efficiency 
     operation in low quality wind regimes.
       (I) For Electric Energy Systems and Storage, including High 
     Temperature Superconducting Research and Development, Energy 
     Storage Systems, and Transmission Reliability, the program 
     should develop high capacity superconducting transmission 
     lines and generators, highly reliable energy storage systems, 
     and distributed generating systems to accommodate multiple 
     types of energy sources under common interconnect standards.
       (J) For the International Renewable Energy and Renewable 
     Energy Production Incentive programs, and Renewable Program 
     Support, the program should encourage the commercial 
     application of renewable energy technologies by developed and 
     developing countries, State and local governmental entities 
     and nonprofit electric cooperatives, and by the competitive 
     domestic market.
       (3) Nuclear energy.--
       (A) For university nuclear science and engineering, the 
     program should carry out the provisions of subtitle A of 
     title III of this division.
       (B) For fuel cycle research, development, and 
     demonstration, the program should carry out the provisions of 
     subtitle B of title III of this division.
       (C) For the Nuclear Energy Research Initiative, the program 
     should accomplish the objectives of section 2341(b) of this 
     Act.
       (D) For the Nuclear Energy Plant Optimization Program, the 
     program should accomplish the objectives of section 2342(b) 
     of this Act.
       (E) For Nuclear Energy Technologies, the program should 
     carry out the provisions of section 2343 of this Act.
       (F) For Advanced Radioisotope Power Systems, the program 
     should ensure that the United States has adequate capability 
     to power future satellite and space missions.
       (4) Fossil energy.--
       (A) For core fossil energy research and development, the 
     program should achieve the goals outlined by the Department's 
     Vision 21 Program. This research should address fuel-flexible 
     gasification and turbines, fuel cells, advanced-combustion 
     systems, advanced fuels and chemicals, advanced modeling and 
     systems analysis, materials and heat exchangers, 
     environmental control technologies, gas-stream purification, 
     gas-separation technology, and sequestration research and 
     development focused on cost-effective novel concepts for 
     capturing, reusing or storing, or otherwise mitigating 
     carbon and other greenhouse gas emissions.
       (B) For offshore oil and natural gas resources, the program 
     should investigate and develop technologies to--
       (i) extract methane hydrates in coastal waters of the 
     United States, in accordance with the provisions of the 
     Methane Hydrate Research and Development Act of 2000; and
       (ii) develop natural gas and oil reserves in the ultra-
     deepwater of the Central and Western Gulf of Mexico. Research 
     and development on ultra-deepwater resource recovery shall 
     focus on improving the safety and efficiency of such recovery 
     and of sub-sea production technology used for such recovery, 
     while lowering costs.
       (C) For transportation fuels, the program should support a 
     comprehensive transportation fuels strategy to increase the 
     price elasticity of oil supply and demand by focusing 
     research on reducing the cost of producing transportation 
     fuels from natural gas and indirect liquefaction of coal.
       (5) Science.--The Secretary, through the Office of Science, 
     should--
       (A) develop and maintain a robust portfolio of fundamental 
     scientific and energy research, including High Energy and 
     Nuclear Physics, Biological and Environmental Research, Basic 
     Energy Sciences (including Materials Sciences, Chemical 
     Sciences, Engineering and Geosciences, and Energy 
     Biosciences), Advanced Scientific Computing, Energy Research 
     and Analysis, Multiprogram Energy Laboratories-Facilities 
     Support, Fusion Energy Sciences, and Facilities and 
     Infrastructure;
       (B) maintain, upgrade, and expand, as appropriate, and in 
     accordance with the provisions of this division, the 
     scientific user facilities maintained by the Office of 
     Science, and ensure that they are an integral part of the 
     Department's mission for exploring the frontiers of 
     fundamental energy sciences; and
       (C) ensure that its fundamental energy sciences programs, 
     where appropriate, help inform the applied research and 
     development programs of the Department.
       (b) Review and Assessment.--The Secretary shall perform an 
     assessment that establishes measurable cost and performance-
     based goals, or that modifies the goals under

[[Page S11810]]

     subsection (a), as appropriate, for 2005, 2010, 2015, and 
     2020 for each of the programs authorized by this division 
     that would enable each such program to meet the purposes of 
     this division under section 2003. Such assessment shall be 
     based on the latest scientific and technical knowledge, and 
     shall also take into consideration, as appropriate, the 
     comparative environmental impacts (including emissions of 
     greenhouse gases) of the energy saved or produced by specific 
     programs.
       (c) Consultation.--In establishing the measurable cost and 
     performance-based goals under subsection (b), the Secretary 
     shall consult with the private sector, institutions of higher 
     learning, national laboratories, environmental organizations, 
     professional and technical societies, and any other persons 
     as the Secretary considers appropriate.
       (d) Schedule.--The Secretary shall--
       (1) issue and publish in the Federal Register a set of 
     draft measurable cost and performance-based goals for the 
     programs authorized by this division for public comment--
       (A) in the case of a program established before the date of 
     the enactment of this Act, not later than 120 days after the 
     date of the enactment of this Act; and
       (B) in the case of a program not established before the 
     date of the enactment of this Act, not later than 120 days 
     after the date of establishment of the program;
       (2) not later than 60 days after the date of publication 
     under paragraph (1), after taking into consideration any 
     public comments received, transmit to the Congress and 
     publish in the Federal Register the final measurable cost and 
     performance-based goals; and
       (3) update all such cost and performance-based goals on a 
     biennial basis.

     SEC. 2005. DEFINITIONS.

       For purposes of this division, except as otherwise 
     provided--
       (1) the term ``Administrator'' means the Administrator of 
     the Environmental Protection Agency;
       (2) the term ``appropriate congressional committees'' 
     means--
       (A) the Committee on Science and the Committee on 
     Appropriations of the House of Representatives; and
       (B) the Committee on Energy and Natural Resources and the 
     Committee on Appropriations of the Senate;
       (3) the term ``Department'' means the Department of Energy; 
     and
       (4) the term ``Secretary'' means the Secretary of Energy.

     SEC. 2006. AUTHORIZATIONS.

       Authorizations of appropriations under this division are 
     for environmental research and development, scientific and 
     energy research, development, and demonstration, and 
     commercial application of energy technology programs, 
     projects, and activities.

     SEC. 2007. BALANCE OF FUNDING PRIORITIES.

       (a) Sense of Congress.--It is the sense of the Congress 
     that the funding of the various programs authorized by titles 
     I through IV of this division should remain in the same 
     proportion to each other as provided in this division, 
     regardless of the total amount of funding made available for 
     those programs.
       (b) Report to Congress.--If for fiscal year 2002, 2003, or 
     2004 the amounts appropriated in general appropriations Acts 
     for the programs authorized in titles I through IV of this 
     division are not in the same proportion to one another as are 
     the authorizations for such programs in this division, the 
     Secretary and the Administrator shall, within 60 days after 
     the date of the enactment of the last general appropriations 
     Act appropriating amounts for such programs, transmit to the 
     appropriate congressional committees a report describing the 
     programs, projects, and activities that would have been 
     funded if the proportions provided for in this division had 
     been maintained in the appropriations. The amount 
     appropriated for the program receiving the highest percentage 
     of its authorized funding for a fiscal year shall be used as 
     the baseline for calculating the proportional deficiencies of 
     appropriations for other programs in that fiscal year.

           TITLE I--ENERGY CONSERVATION AND ENERGY EFFICIENCY

                 Subtitle A--Alternative Fuel Vehicles

     SEC. 2101. SHORT TITLE.

       This subtitle may be cited as the ``Alternative Fuel 
     Vehicle Acceleration Act of 2001''.

     SEC. 2102. DEFINITIONS.

       For the purposes of this subtitle, the following 
     definitions apply:
       (1) Alternative Fuel Vehicle.--
       (A) In general.--Except as provided in subparagraph (B), 
     the term ``alternative fuel vehicle'' means a motor vehicle 
     that is powered--
       (i) in whole or in part by electricity, including 
     electricity supplied by a fuel cell;
       (ii) by liquefied natural gas;
       (iii) by compressed natural gas;
       (iv) by liquefied petroleum gas;
       (v) by hydrogen;
       (vi) by methanol or ethanol at no less than 85 percent by 
     volume; or
       (vii) by propane.
       (B) Exclusions.--The term ``alternative fuel vehicle'' does 
     not include--
       (i) any vehicle designed to operate solely on gasoline or 
     diesel derived from fossil fuels, regardless of whether it 
     can also be operated on an alternative fuel; or
       (ii) any vehicle that the Secretary determines, by rule, 
     does not yield substantial environmental benefits over a 
     vehicle operating solely on gasoline or diesel derived from 
     fossil fuels.
       (2) Pilot program.--The term ``pilot program'' means the 
     competitive grant program established under section 2103.
       (3) Ultra-low sulfur diesel vehicle.--The term ``ultra-low 
     sulfur diesel vehicle'' means a vehicle powered by a heavy-
     duty diesel engine that--
       (A) is fueled by diesel fuel which contains sulfur at not 
     more than 15 parts per million; and
       (B) emits not more than the lesser of--
       (i) for vehicles manufactured in--
       (I) model years 2001 through 2003, 3.0 grams per brake 
     horsepower-hour of nonmethane hydrocarbons and oxides of 
     nitrogen and .01 grams per brake horsepower-hour of 
     particulate matter; and
       (II) model years 2004 through 2006, 2.5 grams per brake 
     horsepower-hour of nonmethane hydrocarbons and oxides of 
     nitrogen and .01 grams per brake horsepower-hour of 
     particulate matter; or
       (ii) the emissions of nonmethane hydrocarbons, oxides of 
     nitrogen, and particulate matter of the best performing 
     technology of ultra-low sulfur diesel vehicles of the same 
     type that are commercially available.

     SEC. 2103. PILOT PROGRAM.

       (a) Establishment.--The Secretary shall establish a 
     competitive grant pilot program to provide not more than 15 
     grants to State governments, local governments, or 
     metropolitan transportation authorities to carry out a 
     project or projects for the purposes described in subsection 
     (b).
       (b) Grant Purposes.--Grants under this section may be used 
     for the following purposes:
       (1) The acquisition of alternative fuel vehicles, 
     including--
       (A) passenger vehicles;
       (B) buses used for public transportation or transportation 
     to and from schools;
       (C) delivery vehicles for goods or services;
       (D) ground support vehicles at public airports, including 
     vehicles to carry baggage or push airplanes away from 
     terminal gates; and
       (E) motorized two-wheel bicycles, scooters, or other 
     vehicles for use by law enforcement personnel or other State 
     or local government or metropolitan transportation authority 
     employees.
       (2) The acquisition of ultra-low sulfur diesel vehicles.
       (3) Infrastructure necessary to directly support an 
     alternative fuel vehicle project funded by the grant, 
     including fueling and other support equipment.
       (4) Operation and maintenance of vehicles, infrastructure, 
     and equipment acquired as part of a project funded by the 
     grant.
       (c) Applications.--
       (1) Requirements.--The Secretary shall issue requirements 
     for applying for grants under the pilot program. At a 
     minimum, the Secretary shall require that applications be 
     submitted by the head of a State or local government or a 
     metropolitan transportation authority, or any combination 
     thereof, and shall include--
       (A) at least one project to enable passengers or goods to 
     be transferred directly from one alternative fuel vehicle or 
     ultra-low sulfur diesel vehicle to another in a linked 
     transportation system;
       (B) a description of the projects proposed in the 
     application, including how they meet the requirements of this 
     subtitle;
       (C) an estimate of the ridership or degree of use of the 
     projects proposed in the application;
       (D) an estimate of the air pollution emissions reduced and 
     fossil fuel displaced as a result of the projects proposed in 
     the application, and a plan to collect and disseminate 
     environmental data, related to the projects to be funded 
     under the grant, over the life of the projects;
       (E) a description of how the projects proposed in the 
     application will be sustainable without Federal assistance 
     after the completion of the term of the grant;
       (F) a complete description of the costs of each project 
     proposed in the application, including acquisition, 
     construction, operation, and maintenance costs over the 
     expected life of the project;
       (G) a description of which costs of the projects proposed 
     in the application will be supported by Federal assistance 
     under this subtitle; and
       (H) documentation to the satisfaction of the Secretary that 
     diesel fuel containing sulfur at not more than 15 parts per 
     million is available for carrying out the projects, and a 
     commitment by the applicant to use such fuel in carrying out 
     the projects.
       (2) Partners.--An applicant under paragraph (1) may carry 
     out projects under the pilot program in partnership with 
     public and private entities.
       (d) Selection Criteria.--In evaluating applications under 
     the pilot program, the Secretary shall consider each 
     applicant's previous experience with similar projects and 
     shall give priority consideration to applications that--
       (1) are most likely to maximize protection of the 
     environment;
       (2) demonstrate the greatest commitment on the part of the 
     applicant to ensure funding for the proposed projects and the 
     greatest likelihood that each project proposed in the 
     application will be maintained or expanded after Federal 
     assistance under this subtitle is completed; and
       (3) exceed the minimum requirements of subsection 
     (c)(1)(A).

[[Page S11811]]

       (e) Pilot Project Requirements.--
       (1) Maximum amount.--The Secretary shall not provide more 
     than $20,000,000 in Federal assistance under the pilot 
     program to any applicant.
       (2) Cost sharing.--The Secretary shall not provide more 
     than 50 percent of the cost, incurred during the period of 
     the grant, of any project under the pilot program.
       (3) Maximum period of grants.--The Secretary shall not fund 
     any applicant under the pilot program for more than 5 years.
       (4) Deployment and distribution.--The Secretary shall seek 
     to the maximum extent practicable to achieve nationwide 
     deployment of alternative fuel vehicles through the pilot 
     program, and shall ensure a broad geographic distribution of 
     project sites.
       (5) Transfer of information and knowledge.--The Secretary 
     shall establish mechanisms to ensure that the information and 
     knowledge gained by participants in the pilot program are 
     transferred among the pilot program participants and to other 
     interested parties, including other applicants that submitted 
     applications.
       (f) Schedule.--
       (1) Publication.--Not later than 3 months after the date of 
     the enactment of this Act, the Secretary shall publish in the 
     Federal Register, Commerce Business Daily, and elsewhere as 
     appropriate, a request for applications to undertake projects 
     under the pilot program. Applications shall be due within 6 
     months of the publication of the notice.
       (2) Selection.--Not later than 6 months after the date by 
     which applications for grants are due, the Secretary shall 
     select by competitive, peer review all applications for 
     projects to be awarded a grant under the pilot program.
       (g) Limit on Funding.--The Secretary shall provide not less 
     than 20 percent and not more than 25 percent of the grant 
     funding made available under this section for the acquisition 
     of ultra-low sulfur diesel vehicles.

     SEC. 2104. REPORTS TO CONGRESS.

       (a) Initial Report.--Not later than 2 months after the date 
     grants are awarded under this subtitle, the Secretary shall 
     transmit to the appropriate congressional committees a report 
     containing--
       (1) an identification of the grant recipients and a 
     description of the projects to be funded;
       (2) an identification of other applicants that submitted 
     applications for the pilot program; and
       (3) a description of the mechanisms used by the Secretary 
     to ensure that the information and knowledge gained by 
     participants in the pilot program are transferred among the 
     pilot program participants and to other interested parties, 
     including other applicants that submitted applications.
       (b) Evaluation.--Not later than 3 years after the date of 
     the enactment of this Act, and annually thereafter until the 
     pilot program ends, the Secretary shall transmit to the 
     appropriate congressional committees a report containing an 
     evaluation of the effectiveness of the pilot program, 
     including an assessment of the benefits to the environment 
     derived from the projects included in the pilot program as 
     well as an estimate of the potential benefits to the 
     environment to be derived from widespread application of 
     alternative fuel vehicles and ultra-low sulfur diesel 
     vehicles.

     SEC. 2105. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary 
     $200,000,000 to carry out this subtitle, to remain available 
     until expended.

          Subtitle B--Distributed Power Hybrid Energy Systems

     SEC. 2121. FINDINGS.

       The Congress makes the following findings:
       (1) Our ability to take advantage of our renewable, 
     indigenous resources in a cost-effective manner can be 
     greatly advanced through systems that compensate for the 
     intermittent nature of these resources through distributed 
     power hybrid systems.
       (2) Distributed power hybrid systems can--
       (A) shelter consumers from temporary energy price 
     volatility created by supply and demand mismatches;
       (B) increase the reliability of energy supply; and
       (C) address significant local differences in power and 
     economic development needs and resource availability that 
     exist throughout the United States.
       (3) Realizing these benefits will require a concerted and 
     integrated effort to remove market barriers to adopting 
     distributed power hybrid systems by--
       (A) developing the technological foundation that enables 
     designing, testing, certifying, and operating distributed 
     power hybrid systems; and
       (B) providing the policy framework that reduces such 
     barriers.
       (4) While many of the individual distributed power hybrid 
     systems components are either available or under development 
     in existing private and public sector programs, the 
     capabilities to integrate these components into workable 
     distributed power hybrid systems that maximize benefits to 
     consumers in a safe manner often are not coherently being 
     addressed.

     SEC. 2122. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``distributed power hybrid system'' means a 
     system using 2 or more distributed power sources, operated 
     together with associated supporting equipment, including 
     storage equipment, and software necessary to provide electric 
     power onsite and to an electric distribution system; and
       (2) the term ``distributed power source'' means an 
     independent electric energy source of usually 10 megawatts or 
     less located close to a residential, commercial, or 
     industrial load center, including--
       (A) reciprocating engines;
       (B) turbines;
       (C) microturbines;
       (D) fuel cells;
       (E) solar electric systems;
       (F) wind energy systems;
       (G) biopower systems;
       (H) geothermal power systems; or
       (I) combined heat and power systems.

     SEC. 2123. STRATEGY.

       (a) Requirement.--Not later than 1 year after the date of 
     the enactment of this Act, the Secretary shall develop and 
     transmit to the Congress a distributed power hybrid systems 
     strategy showing--
       (1) needs best met with distributed power hybrid systems 
     configurations, especially systems including one or more 
     solar or renewable power sources; and
       (2) technology gaps and barriers (including barriers to 
     efficient connection with the power grid) that hamper the use 
     of distributed power hybrid systems.
       (b) Elements.--The strategy shall provide for development 
     of--
       (1) system integration tools (including databases, computer 
     models, software, sensors, and controls) needed to plan, 
     design, build, and operate distributed power hybrid systems 
     for maximum benefits;
       (2) tests of distributed power hybrid systems, power parks, 
     and microgrids, including field tests and cost-shared 
     demonstrations with industry;
       (3) design tools to characterize the benefits of 
     distributed power hybrid systems for consumers, to reduce 
     testing needs, to speed commercialization, and to generate 
     data characterizing grid operations, including 
     interconnection requirements;
       (4) precise resource assessment tools to map local 
     resources for distributed power hybrid systems; and
       (5) a comprehensive research, development, demonstration, 
     and commercial application program to ensure the reliability, 
     efficiency, and environmental integrity of distributed energy 
     resources, focused on filling gaps in distributed power 
     hybrid systems technologies identified under subsection 
     (a)(2), which may include--
       (A) integration of a wide variety of advanced technologies 
     into distributed power hybrid systems;
       (B) energy storage devices;
       (C) environmental control technologies;
       (D) interconnection standards, protocols, and equipment; 
     and
       (E) ancillary equipment for dispatch and control.
       (c) Implementation and Integration.--The Secretary shall 
     implement the strategy transmitted under subsection (a) and 
     the research program under subsection (b)(5). Activities 
     pursuant to the strategy shall be integrated with other 
     activities of the Department's Office of Power Technologies.

     SEC. 2124. HIGH POWER DENSITY INDUSTRY PROGRAM.

       (a) In General.--The Secretary shall develop and implement 
     a comprehensive research, development, demonstration, and 
     commercial application program to improve energy efficiency, 
     reliability, and environmental responsibility in high power 
     density industries, such as data centers, server farms, 
     telecommunications facilities, and heavy industry.
       (b) Areas.--In carrying out this section, the Secretary 
     shall consider technologies that provide--
       (1) significant improvement in efficiency of high power 
     density facilities, and in data and telecommunications 
     centers, using advanced thermal control technologies;
       (2) significant improvements in air-conditioning efficiency 
     in facilities such as data centers and telecommunications 
     facilities;
       (3) significant advances in peak load reduction; and
       (4) advanced real time metering and load management and 
     control devices.
       (c) Implementation and Integration.--Activities pursuant to 
     this program shall be integrated with other activities of the 
     Department's Office of Power Technologies.

     SEC. 2125. MICRO-COGENERATION ENERGY TECHNOLOGY.

       The Secretary shall make competitive, merit-based grants to 
     consortia of private sector entities for the development of 
     micro-cogeneration energy technology. The consortia shall 
     explore the creation of small-scale combined heat and power 
     through the use of residential heating appliances. There are 
     authorized to be appropriated to the Secretary $20,000,000 to 
     carry out this section, to remain available until expended.

     SEC. 2126. PROGRAM PLAN.

       Within 4 months after the date of the enactment of this 
     Act, the Secretary, in consultation with other appropriate 
     Federal agencies, shall prepare and transmit to the Congress 
     a 5-year program plan to guide activities under this 
     subtitle. In preparing the program plan, the Secretary shall 
     consult with appropriate representatives of the distributed 
     energy resources, power transmission, and high power density 
     industries to prioritize appropriate program areas. The 
     Secretary shall also seek the advice of utilities, energy 
     services providers, manufacturers, institutions of higher 
     learning, other appropriate State and local agencies, 
     environmental organizations, professional and technical 
     societies, and any other persons the Secretary considers 
     appropriate.

[[Page S11812]]

     SEC. 2127. REPORT.

       Two years after date of the enactment of this Act and at 2-
     year intervals thereafter, the Secretary, jointly with other 
     appropriate Federal agencies, shall transmit a report to 
     Congress describing the progress made to achieve the purposes 
     of this subtitle.

     SEC. 2128. VOLUNTARY CONSENSUS STANDARDS.

       Not later than 2 years after the date of the enactment of 
     this Act, the Secretary, in consultation with the National 
     Institute of Standards and Technology, shall work with the 
     Institute of Electrical and Electronic Engineers and other 
     standards development organizations toward the development 
     of voluntary consensus standards for distributed energy 
     systems for use in manufacturing and using equipment and 
     systems for connection with electric distribution systems, 
     for obtaining electricity from, or providing electricity 
     to, such systems.

           Subtitle C--Secondary Electric Vehicle Battery Use

     SEC. 2131. DEFINITIONS.

       For purposes of this subtitle, the term--
       (1) ``battery'' means an energy storage device that 
     previously has been used to provide motive power in a vehicle 
     powered in whole or in part by electricity; and
       (2) ``associated equipment'' means equipment located at the 
     location where the batteries will be used that is necessary 
     to enable the use of the energy stored in the batteries.

     SEC. 2132. ESTABLISHMENT OF SECONDARY ELECTRIC VEHICLE 
                   BATTERY USE PROGRAM.

       (a) Program.--The Secretary shall establish and conduct a 
     research, development, and demonstration program for the 
     secondary use of batteries where the original use of such 
     batteries was in transportation applications. Such program 
     shall be--
       (1) designed to demonstrate the use of batteries in 
     secondary application, including utility and commercial power 
     storage and power quality;
       (2) structured to evaluate the performance, including 
     longevity of useful service life and costs, of such batteries 
     in field operations, and evaluate the necessary supporting 
     infrastructure, including disposal and reuse of batteries; 
     and
       (3) coordinated with ongoing secondary battery use programs 
     underway at the national laboratories and in industry.
       (b) Solicitation.--(1) Not later than 6 months after the 
     date of the enactment of this Act, the Secretary shall 
     solicit proposals to demonstrate the secondary use of 
     batteries and associated equipment and supporting 
     infrastructure in geographic locations throughout the United 
     States. The Secretary may make additional solicitations for 
     proposals if the Secretary determines that such solicitations 
     are necessary to carry out this section.
       (2)(A) Proposals submitted in response to a solicitation 
     under this section shall include--
       (i) a description of the project, including the batteries 
     to be used in the project, the proposed locations and 
     applications for the batteries, the number of batteries to be 
     demonstrated, and the type, characteristics, and estimated 
     life-cycle costs of the batteries compared to other energy 
     storage devices currently used;
       (ii) the contribution, if any, of State or local 
     governments and other persons to the demonstration project;
       (iii) the type of associated equipment to be demonstrated 
     and the type of supporting infrastructure to be demonstrated; 
     and
       (iv) any other information the Secretary considers 
     appropriate.
       (B) If the proposal includes a lease arrangement, the 
     proposal shall indicate the terms of such lease arrangement 
     for the batteries and associated equipment.
       (c) Selection of Proposals.--
       (1)(A) The Secretary shall, not later than 3 months after 
     the closing date established by the Secretary for receipt of 
     proposals under subsection (b), select at least 5 proposals 
     to receive financial assistance under this section.
       (B) No one project selected under this section shall 
     receive more than 25 percent of the funds authorized under 
     this section. No more than 3 projects selected under this 
     section shall demonstrate the same battery type.
       (2) In selecting a proposal under this section, the 
     Secretary shall consider--
       (A) the ability of the proposer to acquire the batteries 
     and associated equipment and to successfully manage and 
     conduct the demonstration project, including the reporting 
     requirements set forth in paragraph (3)(B);
       (B) the geographic and climatic diversity of the projects 
     selected;
       (C) the long-term technical and competitive viability of 
     the batteries to be used in the project and of the original 
     manufacturer of such batteries;
       (D) the suitability of the batteries for their intended 
     uses;
       (E) the technical performance of the battery, including the 
     expected additional useful life and the battery's ability to 
     retain energy;
       (F) the environmental effects of the use of and disposal of 
     the batteries proposed to be used in the project selected;
       (G) the extent of involvement of State or local government 
     and other persons in the demonstration project and whether 
     such involvement will--
       (i) permit a reduction of the Federal cost share per 
     project; or
       (ii) otherwise be used to allow the Federal contribution to 
     be provided to demonstrate a greater number of batteries; and
       (H) such other criteria as the Secretary considers 
     appropriate.
       (3) Conditions.--The Secretary shall require that--
       (A) as a part of a demonstration project, the users of the 
     batteries provide to the proposer information regarding the 
     operation, maintenance, performance, and use of the 
     batteries, and the proposer provide such information to the 
     battery manufacturer, for 3 years after the beginning of the 
     demonstration project;
       (B) the proposer provide to the Secretary such information 
     regarding the operation, maintenance, performance, and use of 
     the batteries as the Secretary may request during the period 
     of the demonstration project; and
       (C) the proposer provide at least 50 percent of the costs 
     associated with the proposal.

     SEC. 2133. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary, 
     from amounts authorized under section 2161(a), for purposes 
     of this subtitle--
       (1) $1,000,000 for fiscal year 2002;
       (2) $7,000,000 for fiscal year 2003; and
       (3) $7,000,000 for fiscal year 2004.

     Such appropriations may remain available until expended.

                     Subtitle D--Green School Buses

     SEC. 2141. SHORT TITLE.

       This subtitle may be cited as the ``Clean Green School Bus 
     Act of 2001''.

     SEC. 2142. ESTABLISHMENT OF PILOT PROGRAM.

       (a) Establishment.--The Secretary shall establish a pilot 
     program for awarding grants on a competitive basis to 
     eligible entities for the demonstration and commercial 
     application of alternative fuel school buses and ultra-low 
     sulfur diesel school buses.
       (b) Requirements.--Not later than 3 months after the date 
     of the enactment of this Act, the Secretary shall establish 
     and publish in the Federal register grant requirements on 
     eligibility for assistance, and on implementation of the 
     program established under subsection (a), including 
     certification requirements to ensure compliance with this 
     subtitle.
       (c) Solicitation.--Not later than 6 months after the date 
     of the enactment of this Act, the Secretary shall solicit 
     proposals for grants under this section.
       (d) Eligible Recipients.--A grant shall be awarded under 
     this section only--
       (1) to a local governmental entity responsible for 
     providing school bus service for one or more public school 
     systems; or
       (2) jointly to an entity described in paragraph (1) and a 
     contracting entity that provides school bus service to the 
     public school system or systems.
       (e) Types of Grants.--
       (1) In general.--Grants under this section shall be for the 
     demonstration and commercial application of technologies to 
     facilitate the use of alternative fuel school buses and 
     ultra-low sulfur diesel school buses in lieu of buses 
     manufactured before model year 1977 and diesel-powered buses 
     manufactured before model year 1991.
       (2) No economic benefit.--Other than the receipt of the 
     grant, a recipient of a grant under this section may not 
     receive any economic benefit in connection with the receipt 
     of the grant.
       (3) Priority of grant applications.--The Secretary shall 
     give priority to awarding grants to applicants who can 
     demonstrate the use of alternative fuel buses and ultra-low 
     sulfur diesel school buses in lieu of buses manufactured 
     before model year 1977.
       (f) Conditions of Grant.--A grant provided under this 
     section shall include the following conditions:
       (1) All buses acquired with funds provided under the grant 
     shall be operated as part of the school bus fleet for which 
     the grant was made for a minimum of 5 years.
       (2) Funds provided under the grant may only be used--
       (A) to pay the cost, except as provided in paragraph (3), 
     of new alternative fuel school buses or ultra-low sulfur 
     diesel school buses, including State taxes and contract fees; 
     and
       (B) to provide--
       (i) up to 10 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will only be available to the grant 
     recipient; and
       (ii) up to 15 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will be available to the grant 
     recipient and to other bus fleets.
       (3) The grant recipient shall be required to provide at 
     least the lesser of 15 percent of the total cost of each bus 
     received or $15,000 per bus.
       (4) In the case of a grant recipient receiving a grant to 
     demonstrate ultra-low sulfur diesel school buses, the grant 
     recipient shall be required to provide documentation to the 
     satisfaction of the Secretary that diesel fuel containing 
     sulfur at not more than 15 parts per million is available for 
     carrying out the purposes of the grant, and a commitment by 
     the applicant to use such fuel in carrying out the purposes 
     of the grant.
       (g) Buses.--Funding under a grant made under this section 
     may be used to demonstrate the use only of new alternative 
     fuel school buses or ultra-low sulfur diesel school buses--
       (1) with a gross vehicle weight of greater than 14,000 
     pounds;
       (2) that are powered by a heavy duty engine;

[[Page S11813]]

       (3) that, in the case of alternative fuel school buses, 
     emit not more than--
       (A) for buses manufactured in model years 2001 and 2002, 
     2.5 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (B) for buses manufactured in model years 2003 through 
     2006, 1.8 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (4) that, in the case of ultra-low sulfur diesel school 
     buses, emit not more than--
       (A) for buses manufactured in model years 2001 through 
     2003, 3.0 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (B) for buses manufactured in model years 2004 through 
     2006, 2.5 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter, except that under no 
     circumstances shall buses be acquired under this section that 
     emit nonmethane hydrocarbons, oxides of nitrogen, or 
     particulate matter at a rate greater than the best performing 
     technology of ultra-low sulfur diesel school buses 
     commercially available at the time the grant is made.
       (h) Deployment and Distribution.--The Secretary shall seek 
     to the maximum extent practicable to achieve nationwide 
     deployment of alternative fuel school buses through the 
     program under this section, and shall ensure a broad 
     geographic distribution of grant awards, with a goal of no 
     State receiving more than 10 percent of the grant funding 
     made available under this section for a fiscal year.
       (i) Limit on Funding.--The Secretary shall provide not less 
     than 20 percent and not more than 25 percent of the grant 
     funding made available under this section for any fiscal year 
     for the acquisition of ultra-low sulfur diesel school buses.
       (j) Definitions.--For purposes of this section--
       (1) the term ``alternative fuel school bus'' means a bus 
     powered substantially by electricity (including electricity 
     supplied by a fuel cell), or by liquefied natural gas, 
     compressed natural gas, liquefied petroleum gas, hydrogen, 
     propane, or methanol or ethanol at no less than 85 percent by 
     volume; and
       (2) the term ``ultra-low sulfur diesel school bus'' means a 
     school bus powered by diesel fuel which contains sulfur at 
     not more than 15 parts per million.

     SEC. 2143. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION 
                   PROGRAM.

       (a) Establishment of Program.--The Secretary shall 
     establish a program for entering into cooperative agreements 
     with private sector fuel cell bus developers for the 
     development of fuel cell-powered school buses, and 
     subsequently with not less than 2 units of local government 
     using natural gas-powered school buses and such private 
     sector fuel cell bus developers to demonstrate the use of 
     fuel cell-powered school buses.
       (b) Cost Sharing.--The non-Federal contribution for 
     activities funded under this section shall be not less than--
       (1) 20 percent for fuel infrastructure development 
     activities; and
       (2) 50 percent for demonstration activities and for 
     development activities not described in paragraph (1).
       (c) Funding.--No more than $25,000,000 of the amounts 
     authorized under section 2144 may be used for carrying out 
     this section for the period encompassing fiscal years 2002 
     through 2006.
       (d) Reports to Congress.--Not later than 3 years after the 
     date of the enactment of this Act, and not later than October 
     1, 2006, the Secretary shall transmit to the appropriate 
     congressional committees a report that--
       (1) evaluates the process of converting natural gas 
     infrastructure to accommodate fuel cell-powered school buses; 
     and
       (2) assesses the results of the development and 
     demonstration program under this section.

     SEC. 2144. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary 
     for carrying out this subtitle, to remain available until 
     expended--
       (1) $40,000,000 for fiscal year 2002;
       (2) $50,000,000 for fiscal year 2003;
       (3) $60,000,000 for fiscal year 2004;
       (4) $70,000,000 for fiscal year 2005; and
       (5) $80,000,000 for fiscal year 2006.

            Subtitle E--Next Generation Lighting Initiative

     SEC. 2151. SHORT TITLE.

       This subtitle may be cited as ``Next Generation Lighting 
     Initiative Act''.

     SEC. 2152. DEFINITION.

       In this subtitle, the term ``Lighting Initiative'' means 
     the ``Next Generation Lighting Initiative'' established under 
     section 2153(a).

     SEC. 2153. NEXT GENERATION LIGHTING INITIATIVE.

       (a) Establishment.--The Secretary is authorized to 
     establish a lighting initiative to be known as the ``Next 
     Generation Lighting Initiative'' to research, develop, and 
     conduct demonstration activities on advanced lighting 
     technologies, including white light emitting diodes.
       (b) Research Objectives.--The research objectives of the 
     Lighting Initiative shall be to develop, by 2011, advanced 
     lighting technologies that, compared to incandescent and 
     fluorescent lighting technologies as of the date of the 
     enactment of this Act, are--
       (1) longer lasting;
       (2) more energy-efficient; and
       (3) cost-competitive.

     SEC. 2154. STUDY.

       (a) In General.--Not later than 6 months after the date of 
     the enactment of this Act, the Secretary, in consultation 
     with other Federal agencies, as appropriate, shall complete a 
     study on strategies for the development and commercial 
     application of advanced lighting technologies. The Secretary 
     shall request a review by the National Academies of Sciences 
     and Engineering of the study under this subsection, and shall 
     transmit the results of the study to the appropriate 
     congressional committees.
       (b) Requirements.--The study shall--
       (1) develop a comprehensive strategy to implement the 
     Lighting Initiative; and
       (2) identify the research and development, manufacturing, 
     deployment, and marketing barriers that must be overcome to 
     achieve a goal of a 25 percent market penetration by advanced 
     lighting technologies into the incandescent and 
     fluorescent lighting market by the year 2012.
       (c) Implementation.--As soon as practicable after the 
     review of the study under subsection (a) is transmitted to 
     the Secretary by the National Academies of Sciences and 
     Engineering, the Secretary shall adapt the implementation of 
     the Lighting Initiative taking into consideration the 
     recommendations of the National Academies of Sciences and 
     Engineering.

     SEC. 2155. GRANT PROGRAM.

       (a) In General.--Subject to section 2603 of this Act, the 
     Secretary may make merit-based competitive grants to firms 
     and research organizations that conduct research, 
     development, and demonstration projects related to advanced 
     lighting technologies.
       (b) Annual Review.--
       (1) In general.--An annual independent review of the grant-
     related activities of firms and research organizations 
     receiving a grant under this section shall be conducted by a 
     committee appointed by the Secretary under the Federal 
     Advisory Committee Act (5 U.S.C. App.), or, at the request of 
     the Secretary, a committee appointed by the National 
     Academies of Sciences and Engineering.
       (2) Requirements.--Using clearly defined standards 
     established by the Secretary, the review shall assess 
     technology advances and progress toward commercialization of 
     the grant-related activities of firms or research 
     organizations during each fiscal year of the grant program.
       (c) Technical and Financial Assistance.--The national 
     laboratories and other Federal agencies, as appropriate, 
     shall cooperate with and provide technical and financial 
     assistance to firms and research organizations conducting 
     research, development, and demonstration projects carried out 
     under this subtitle.

    Subtitle F--Department of Energy Authorization of Appropriations

     SEC. 2161. AUTHORIZATION OF APPROPRIATIONS.

       (a) Operation and Maintenance.--In addition to amounts 
     authorized to be appropriated under section 2105, section 
     2125, and section 2144, there are authorized to be 
     appropriated to the Secretary for subtitle B, subtitle C, 
     subtitle E, and for Energy Conservation operation and 
     maintenance (including Building Technology, State and 
     Community Sector (Nongrants), Industry Sector, Transportation 
     Sector, Power Technologies, and Policy and Management) 
     $625,000,000 for fiscal year 2002, $700,000,000 for fiscal 
     year 2003, and $800,000,000 for fiscal year 2004, to remain 
     available until expended.
       (b) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated in subsection (a) may be used for--
       (1) Building Technology, State and Community Sector--
       (A) Residential Building Energy Codes;
       (B) Commercial Building Energy Codes;
       (C) Lighting and Appliance Standards;
       (D) Weatherization Assistance Program; or
       (E) State Energy Program; or
       (2) Federal Energy Management Program.

Subtitle G--Environmental Protection Agency Office of Air and Radiation 
                    Authorization of Appropriations

     SEC. 2171. SHORT TITLE.

       This subtitle may be cited as the ``Environmental 
     Protection Agency Office of Air and Radiation Authorization 
     Act of 2001''.

     SEC. 2172. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the 
     Administrator for Office of Air and Radiation Climate Change 
     Protection Programs $121,942,000 for fiscal year 2002, 
     $126,800,000 for fiscal year 2003, and $131,800,000 for 
     fiscal year 2004 to remain available until expended, of 
     which--
       (1) $52,731,000 for fiscal year 2002, $54,800,000 for 
     fiscal year 2003, and $57,000,000 for fiscal year 2004 shall 
     be for Buildings;
       (2) $32,441,000 for fiscal year 2002, $33,700,000 for 
     fiscal year 2003, and $35,000,000 for fiscal year 2004 shall 
     be for Transportation;
       (3) $27,295,000 for fiscal year 2002, $28,400,000 for 
     fiscal year 2003, and $29,500,000 for fiscal year 2004 shall 
     be for Industry;
       (4) $1,700,000 for fiscal year 2002, $1,800,000 for fiscal 
     year 2003, and $1,900,000 for fiscal year 2004 shall be for 
     Carbon Removal;
       (5) $2,500,000 for fiscal year 2002, $2,600,000 for fiscal 
     year 2003, and $2,700,000 for fiscal year 2004 shall be for 
     State and Local Climate; and
       (6) $5,275,000 for fiscal year 2002, $5,500,000 for fiscal 
     year 2003, and $5,700,000 for fiscal year 2004 shall be for 
     International Capacity Building.

[[Page S11814]]

     SEC. 2173. LIMITS ON USE OF FUNDS.

       (a) Production or Provision of Articles or Services.--None 
     of the funds authorized to be appropriated by this subtitle 
     may be used to produce or provide articles or services for 
     the purpose of selling the articles or services to a person 
     outside the Federal Government, unless the Administrator 
     determines that comparable articles or services are not 
     available from a commercial source in the United States.
       (b) Requests for Proposals.--None of the funds authorized 
     to be appropriated by this subtitle may be used by the 
     Environmental Protection Agency to prepare or initiate 
     Requests for Proposals for a program if the program has not 
     been authorized by Congress.

     SEC. 2174. COST SHARING.

       (a) Research and Development.--Except as otherwise provided 
     in this subtitle, for research and development programs 
     carried out under this subtitle, the Administrator shall 
     require a commitment from non-Federal sources of at least 20 
     percent of the cost of the project. The Administrator may 
     reduce or eliminate the non-Federal requirement under this 
     subsection if the Administrator determines that the research 
     and development is of a basic or fundamental nature.
       (b) Demonstration and Commercial Application.--Except as 
     otherwise provided in this subtitle, the Administrator shall 
     require at least 50 percent of the costs directly and 
     specifically related to any demonstration or commercial 
     application project under this subtitle to be provided from 
     non-Federal sources. The Administrator may reduce the non-
     Federal requirement under this subsection if the 
     Administrator determines that the reduction is necessary and 
     appropriate considering the technological risks involved in 
     the project and is necessary to meet the objectives of this 
     subtitle.
       (c) Calculation of Amount.--In calculating the amount of 
     the non-Federal commitment under subsection (a) or (b), the 
     Administrator may include personnel, services, equipment, and 
     other resources.

     SEC. 2175. LIMITATION ON DEMONSTRATION AND COMMERCIAL 
                   APPLICATIONS OF ENERGY TECHNOLOGY.

       The Administrator shall provide funding for scientific or 
     energy demonstration or commercial application of energy 
     technology programs, projects, or activities of the Office of 
     Air and Radiation only for technologies or processes that can 
     be reasonably expected to yield new, measurable benefits to 
     the cost, efficiency, or performance of the technology or 
     process.

     SEC. 2176. REPROGRAMMING.

       (a) Authority.--The Administrator may use amounts 
     appropriated under this subtitle for a program, project, or 
     activity other than the program, project, or activity for 
     which such amounts were appropriated only if--
       (1) the Administrator has transmitted to the appropriate 
     congressional committees a report described in subsection (b) 
     and a period of 30 days has elapsed after such committees 
     receive the report;
       (2) amounts used for the program, project, or activity do 
     not exceed--
       (A) 105 percent of the amount authorized for the program, 
     project, or activity; or
       (B) $250,000 more than the amount authorized for the 
     program, project, or activity,

     whichever is less; and
       (3) the program, project, or activity has been presented 
     to, or requested of, the Congress by the Administrator.
       (b) Report.--(1) The report referred to in subsection (a) 
     is a report containing a full and complete statement of the 
     action proposed to be taken and the facts and circumstances 
     relied upon in support of the proposed action.
       (2) In the computation of the 30-day period under 
     subsection (a), there shall be excluded any day on which 
     either House of Congress is not in session because of an 
     adjournment of more than 3 days to a day certain.
       (c) Limitations.--(1) In no event may the total amount of 
     funds obligated pursuant to this subtitle exceed the total 
     amount authorized to be appropriated by this subtitle.
       (2) Funds appropriated pursuant to this subtitle may not be 
     used for an item for which Congress has declined to authorize 
     funds.

     SEC. 2177. BUDGET REQUEST FORMAT.

       The Administrator shall provide to the appropriate 
     congressional committees, to be transmitted at the same time 
     as the Environmental Protection Agency's annual budget 
     request submission, a detailed justification for budget 
     authorization for the programs, projects, and activities for 
     which funds are authorized by this subtitle. Each such 
     document shall include, for the fiscal year for which funding 
     is being requested and for the 2 previous fiscal years--
       (1) a description of, and funding requested or allocated 
     for, each such program, project, or activity;
       (2) an identification of all recipients of funds to conduct 
     such programs, projects, and activities; and
       (3) an estimate of the amounts to be expended by each 
     recipient of funds identified under paragraph (2).

     SEC. 2178. OTHER PROVISIONS.

       (a) Annual Operating Plan and Reports.--The Administrator 
     shall provide simultaneously to the Committee on Science of 
     the House of Representatives--
       (1) any annual operating plan or other operational funding 
     document, including any additions or amendments thereto; and
       (2) any report relating to the environmental research or 
     development, scientific or energy research, development, or 
     demonstration, or commercial application of energy technology 
     programs, projects, or activities of the Environmental 
     Protection Agency, provided to any committee of Congress.
       (b) Notice of Reorganization.--The Administrator shall 
     provide notice to the appropriate congressional committees 
     not later than 15 days before any reorganization of any 
     environmental research or development, scientific or energy 
     research, development, or demonstration, or commercial 
     application of energy technology program, project, or 
     activity of the Office of Air and Radiation.

          Subtitle H--National Building Performance Initiative

     SEC. 2181. NATIONAL BUILDING PERFORMANCE INITIATIVE.

       (a) Interagency Group.--Not later than 3 months after the 
     date of the enactment of this Act, the Director of the Office 
     of Science and Technology Policy shall establish an 
     Interagency Group responsible for the development and 
     implementation of a National Building Performance Initiative 
     to address energy conservation and research and development 
     and related issues. The National Institute of Standards and 
     Technology shall provide necessary administrative support for 
     the Interagency Group.
       (b) Plan.--Not later than 9 months after the date of the 
     enactment of this Act, the Interagency Group shall transmit 
     to the Congress a multiyear implementation plan describing 
     the Federal role in reducing the costs, including energy 
     costs, of using, owning, and operating commercial, 
     institutional, residential, and industrial buildings by 30 
     percent by 2020. The plan shall include--
       (1) research, development, and demonstration of systems and 
     materials for new construction and retrofit, on the building 
     envelope and components; and
       (2) the collection and dissemination in a usable form of 
     research results and other pertinent information to the 
     design and construction industry, government officials, and 
     the general public.
       (c) National Building Performance Advisory Committee.--A 
     National Building Performance Advisory Committee shall be 
     established to advise on creation of the plan, review 
     progress made under the plan, advise on any improvements that 
     should be made to the plan, and report to the Congress on 
     actions that have been taken to advance the Nation's 
     capability in furtherance of the plan. The members shall 
     include representatives of a broad cross-section of interests 
     such as the research, technology transfer, architectural, 
     engineering, and financial communities; materials and systems 
     suppliers; State, county, and local governments; the 
     residential, multifamily, and commercial sectors of the 
     construction industry; and the insurance industry.
       (d) Report.--The Interagency Group shall, within 90 days 
     after the end of each fiscal year, transmit a report to the 
     Congress describing progress achieved during the preceding 
     fiscal year by government at all levels and by the private 
     sector, toward implementing the plan developed under 
     subsection (b), and including any amendments to the plan.

                       TITLE II--RENEWABLE ENERGY

                          Subtitle A--Hydrogen

     SEC. 2201. SHORT TITLE.

       This subtitle may be cited as the ``Robert S. Walker and 
     George E. Brown, Jr. Hydrogen Energy Act of 2001''.

     SEC. 2202. PURPOSES.

       Section 102(b) of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:
       ``(b) Purposes.--The purposes of this Act are--
       ``(1) to direct the Secretary to conduct research, 
     development, and demonstration activities leading to the 
     production, storage, transportation, and use of hydrogen for 
     industrial, commercial, residential, transportation, and 
     utility applications;
       ``(2) to direct the Secretary to develop a program of 
     technology assessment, information dissemination, and 
     education in which Federal, State, and local agencies, 
     members of the energy, transportation, and other industries, 
     and other entities may participate; and
       ``(3) to develop methods of hydrogen production that 
     minimize adverse environmental impacts, with emphasis on 
     efficient and cost-effective production from renewable energy 
     resources.''.

     SEC. 2203. DEFINITIONS.

       Section 102(c) of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended--
       (1) by redesignating paragraphs (1) through (3) as 
     paragraphs (2) through (4), respectively; and
       (2) by inserting before paragraph (2), as so redesignated 
     by paragraph (1) of this section, the following new 
     paragraph:
       ``(1) ``advisory committee'' means the advisory committee 
     established under section 108;''.

     SEC. 2204. REPORTS TO CONGRESS.

       Section 103 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:

     ``SEC. 103. REPORTS TO CONGRESS.

       ``(a) Requirement.--Not later than 1 year after the date of 
     the enactment of the Robert

[[Page S11815]]

     S. Walker and George E. Brown, Jr. Hydrogen Energy Act of 
     2001, and biennially thereafter, the Secretary shall transmit 
     to Congress a detailed report on the status and progress of 
     the programs and activities authorized under this Act.
       ``(b) Contents.--A report under subsection (a) shall 
     include, in addition to any views and recommendations of the 
     Secretary--
       ``(1) an assessment of the extent to which the program is 
     meeting the purposes specified in section 102(b);
       ``(2) a determination of the effectiveness of the 
     technology assessment, information dissemination, and 
     education program established under section 106;
       ``(3) an analysis of Federal, State, local, and private 
     sector hydrogen-related research, development, and 
     demonstration activities to identify productive areas for 
     increased intergovernmental and private-public sector 
     collaboration; and
       ``(4) recommendations of the advisory committee for any 
     improvements needed in the programs and activities authorized 
     by this Act.''.

     SEC. 2205. HYDROGEN RESEARCH AND DEVELOPMENT.

       Section 104 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:

     ``SEC. 104. HYDROGEN RESEARCH AND DEVELOPMENT.

       ``(a) Establishment of Program.--The Secretary shall 
     conduct a hydrogen research and development program relating 
     to production, storage, transportation, and use of hydrogen, 
     with the goal of enabling the private sector to demonstrate 
     the technical feasibility of using hydrogen for industrial, 
     commercial, residential, transportation, and utility 
     applications.
       ``(b) Elements.--In conducting the program authorized by 
     this section, the Secretary shall--
       ``(1) give particular attention to developing an 
     understanding and resolution of critical technical issues 
     preventing the introduction of hydrogen as an energy carrier 
     into the marketplace;
       ``(2) initiate or accelerate existing research and 
     development in critical technical issues that will contribute 
     to the development of more economical hydrogen production, 
     storage, transportation, and use, including critical 
     technical issues with respect to production (giving priority 
     to those production techniques that use renewable energy 
     resources as their primary source of energy for hydrogen 
     production), liquefaction, transmission, distribution, 
     storage, and use (including use of hydrogen in surface 
     transportation); and
       ``(3) survey private sector and public sector hydrogen 
     research and development activities worldwide, and take steps 
     to ensure that research and development activities under this 
     section do not--
       ``(A) duplicate any available research and development 
     results; or
       ``(B) displace or compete with the privately funded 
     hydrogen research and development activities of United States 
     industry.
       ``(c) Evaluation of Technologies.--The Secretary shall 
     evaluate, for the purpose of determining whether to undertake 
     or fund research and development activities under this 
     section, any reasonable new or improved technology that could 
     lead or contribute to the development of economical hydrogen 
     production, storage, transportation, and use.
       ``(d) Research and Development Support.--The Secretary is 
     authorized to arrange for tests and demonstrations and to 
     disseminate to researchers and developers information, data, 
     and other materials necessary to support the research and 
     development activities authorized under this section and 
     other efforts authorized under this Act, consistent with 
     section 106 of this Act.
       ``(e) Competitive Peer Review.--The Secretary shall carry 
     out or fund research and development activities under this 
     section only on a competitive basis using peer review.
       ``(f) Cost Sharing.--For research and development programs 
     carried out under this section, the Secretary shall require a 
     commitment from non-Federal sources of at least 20 percent of 
     the cost of the project. The Secretary may reduce or 
     eliminate the non-Federal requirement under this subsection 
     if the Secretary determines that the research and development 
     is of a basic or fundamental nature.''.

     SEC. 2206. DEMONSTRATIONS.

       Section 105 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended--
       (1) in subsection (a), by striking ``, preferably in self-
     contained locations,'';
       (2) in subsection (b), by striking ``at self-contained 
     sites'' and inserting ``, which shall include a fuel cell bus 
     demonstration program to address hydrogen production, 
     storage, and use in transit bus applications''; and
       (3) in subsection (c), by inserting ``Non-Federal Funding 
     Requirement.--'' after ``(c)''.

     SEC. 2207. TECHNOLOGY TRANSFER.

       Section 106 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:

     ``SEC. 106. TECHNOLOGY ASSESSMENT, INFORMATION DISSEMINATION, 
                   AND EDUCATION PROGRAM.

       ``(a) Program.--Secretary shall, in consultation with the 
     advisory committee, conduct a program designed to accelerate 
     wider application of hydrogen production, storage, 
     transportation, and use technologies, including application 
     in foreign countries to increase the global market for the 
     technologies and foster global economic development without 
     harmful environmental effects.
       ``(b) Information.--The Secretary, in carrying out the 
     program authorized by subsection (a), shall--
       ``(1) undertake an update of the inventory and assessment, 
     required under section 106(b)(1) of this Act as in effect 
     before the date of the enactment of the Robert S. Walker and 
     George E. Brown, Jr. Hydrogen Energy Act of 2001, of hydrogen 
     technologies and their commercial capability to economically 
     produce, store, transport, or use hydrogen in industrial, 
     commercial, residential, transportation, and utility sector; 
     and
       ``(2) develop, with other Federal agencies as appropriate 
     and industry, an information exchange program to improve 
     technology transfer for hydrogen production, storage, 
     transportation, and use, which may consist of workshops, 
     publications, conferences, and a database for the use by the 
     public and private sectors.''.

     SEC. 2208. COORDINATION AND CONSULTATION.

       Section 107 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended--
       (1) by amending paragraph (1) of subsection (a) to read as 
     follows:
       ``(1) shall establish a central point for the coordination 
     of all hydrogen research, development, and demonstration 
     activities of the Department; and''; and
       (2) by amending subsection (c) to read as follows:
       ``(c) Consultation.--The Secretary shall consult with other 
     Federal agencies as appropriate, and the advisory committee, 
     in carrying out the Secretary's authorities pursuant to this 
     Act.''.

     SEC. 2209. ADVISORY COMMITTEE.

       Section 108 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:

     ``SEC. 108. ADVISORY COMMITTEE.

       ``(a) Establishment.--The Secretary shall enter into 
     appropriate arrangements with the National Academies of 
     Sciences and Engineering to establish an advisory committee 
     consisting of experts drawn from domestic industry, academia, 
     Governmental laboratories, and financial, environmental, and 
     other organizations, as appropriate, to review and advise on 
     the progress made through the programs and activities 
     authorized under this Act.
       ``(b) Cooperation.--The heads of Federal agencies shall 
     cooperate with the advisory committee in carrying out this 
     section and shall furnish to the advisory committee such 
     information as the advisory committee reasonably deems 
     necessary to carry out this section.
       ``(c) Review.--The advisory committee shall review and make 
     any necessary recommendations to the Secretary on--
       ``(1) the implementation and conduct of programs and 
     activities authorized under this Act; and
       ``(2) the economic, technological, and environmental 
     consequences of the deployment of hydrogen production, 
     storage, transportation, and use systems.
       ``(d) Responsibilities of the Secretary.--The Secretary 
     shall consider, but need not adopt, any recommendations of 
     the advisory committee under subsection (c). The Secretary 
     shall provide an explanation of the reasons that any such 
     recommendations will not be implemented and include such 
     explanation in the report to Congress under section 103(a) of 
     this Act.''.

     SEC. 2210. AUTHORIZATION OF APPROPRIATIONS.

       Section 109 of the Spark M. Matsunaga Hydrogen Research, 
     Development, and Demonstration Act of 1990 is amended to read 
     as follows:

     ``SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) Research and Development; Advisory Committee.--There 
     are authorized to be appropriated to the Secretary to carry 
     out sections 104 and 108--
       ``(1) $40,000,000 for fiscal year 2002;
       ``(2) $45,000,000 for fiscal year 2003;
       ``(3) $50,000,000 for fiscal year 2004;
       ``(4) $55,000,000 for fiscal year 2005; and
       ``(5) $60,000,000 for fiscal year 2006.
       ``(b) Demonstration.--There are authorized to be 
     appropriated to the Secretary to carry out section 105--
       ``(1) $20,000,000 for fiscal year 2002;
       ``(2) $25,000,000 for fiscal year 2003;
       ``(3) $30,000,000 for fiscal year 2004;
       ``(4) $35,000,000 for fiscal year 2005; and
       ``(5) $40,000,000 for fiscal year 2006.''.

     SEC. 2211. REPEAL.

       (a) Repeal.--Title II of the Hydrogen Future Act of 1996 is 
     repealed.
       (b) Conforming Amendment.--Section 2 of the Hydrogen Future 
     Act of 1996 is amended by striking ``titles II and III'' and 
     inserting ``title III''.

                         Subtitle B--Bioenergy

     SEC. 2221. SHORT TITLE.

       This subtitle may be cited as the ``Bioenergy Act of 
     2001''.

     SEC. 2222. FINDINGS.

       Congress finds that bioenergy has potential to help--
       (1) meet the Nation's energy needs;
       (2) reduce reliance on imported fuels;
       (3) promote rural economic development;
       (4) provide for productive utilization of agricultural 
     residues and waste materials, and forestry residues and 
     byproducts; and

[[Page S11816]]

       (5) protect the environment.

     SEC. 2223. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``bioenergy'' means energy derived from any 
     organic matter that is available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     wastes and residues, plants (including aquatic plants), 
     grasses, residues, fibers, and animal and other organic 
     wastes;
       (2) the term ``biofuels'' includes liquid or gaseous fuels, 
     industrial chemicals, or both;
       (3) the term ``biopower'' includes the generation of 
     electricity or process steam or both; and
       (4) the term ``integrated bioenergy research and 
     development'' includes biopower and biofuels applications.

     SEC. 2224. AUTHORIZATION.

       The Secretary is authorized to conduct environmental 
     research and development, scientific and energy research, 
     development, and demonstration, and commercial application of 
     energy technology programs, projects, and activities related 
     to bioenergy, including biopower energy systems, biofuels 
     energy systems, and integrated bioenergy research and 
     development.

     SEC. 2225. AUTHORIZATION OF APPROPRIATIONS.

       (a) Biopower Energy Systems.--There are authorized to be 
     appropriated to the Secretary for Biopower Energy Systems 
     programs, projects, and activities--
       (1) $45,700,000 for fiscal year 2002;
       (2) $52,500,000 for fiscal year 2003;
       (3) $60,300,000 for fiscal year 2004;
       (4) $69,300,000 for fiscal year 2005; and
       (5) $79,600,000 for fiscal year 2006.
       (b) Biofuels Energy Systems.--There are authorized to be 
     appropriated to the Secretary for biofuels energy systems 
     programs, projects, and activities--
       (1) $53,500,000 for fiscal year 2002;
       (2) $61,400,000 for fiscal year 2003;
       (3) $70,600,000 for fiscal year 2004;
       (4) $81,100,000 for fiscal year 2005; and
       (5) $93,200,000 for fiscal year 2006.
       (c) Integrated Bioenergy Research and Development.--There 
     are authorized to be appropriated to the Secretary for 
     integrated bioenergy research and development programs, 
     projects, and activities, $49,000,000 for each of the 
     fiscal years 2002 through 2006. Activities funded under 
     this subsection shall be coordinated with ongoing related 
     programs of other Federal agencies, including the Plant 
     Genome Program of the National Science Foundation. Of the 
     funds authorized under this subsection, at least 
     $5,000,000 for each fiscal year shall be for training and 
     education targeted to minority and social disadvantaged 
     farmers and ranchers.
       (d) Integrated Applications.--Amounts authorized to be 
     appropriated under this subtitle may be used to assist in the 
     planning, design, and implementation of projects to convert 
     rice straw and barley grain into biopower or biofuels.

            Subtitle C--Transmission Infrastructure Systems

     SEC. 2241. TRANSMISSION INFRASTRUCTURE SYSTEMS RESEARCH, 
                   DEVELOPMENT, DEMONSTRATION, AND COMMERCIAL 
                   APPLICATION.

       (a) In General.--The Secretary shall develop and implement 
     a comprehensive research, development, demonstration, and 
     commercial application program to ensure the reliability, 
     efficiency, and environmental integrity of electrical 
     transmission systems. Such program shall include advanced 
     energy technologies and systems, high capacity 
     superconducting transmission lines and generators, advanced 
     grid reliability and efficiency technologies development, 
     technologies contributing to significant load reductions, 
     advanced metering, load management and control technologies, 
     and technology transfer and education.
       (b) Technology.--In carrying out this subtitle, the 
     Secretary may include research, development, and 
     demonstration on and commercial application of improved 
     transmission technologies including the integration of the 
     following technologies into improved transmission systems:
       (1) High temperature superconductivity.
       (2) Advanced transmission materials.
       (3) Self-adjusting equipment, processes, or software for 
     survivability, security, and failure containment.
       (4) Enhancements of energy transfer over existing lines.
       (5) Any other infrastructure technologies, as appropriate.

     SEC. 2242. PROGRAM PLAN.

       Within 4 months after the date of the enactment of this 
     Act, the Secretary, in consultation with other appropriate 
     Federal agencies, shall prepare and transmit to Congress a 5-
     year program plan to guide activities under this subtitle. In 
     preparing the program plan, the Secretary shall consult with 
     appropriate representatives of the transmission 
     infrastructure systems industry to select and prioritize 
     appropriate program areas. The Secretary shall also seek the 
     advice of utilities, energy services providers, 
     manufacturers, institutions of higher learning, other 
     appropriate State and local agencies, environmental 
     organizations, professional and technical societies, and any 
     other persons as the Secretary considers appropriate.

     SEC. 2243. REPORT.

       Two years after the date of the enactment of this Act, and 
     at 2-year intervals thereafter, the Secretary, in 
     consultation with other appropriate Federal agencies, shall 
     transmit a report to Congress describing the progress made to 
     achieve the purposes of this subtitle and identifying any 
     additional resources needed to continue the development and 
     commercial application of transmission infrastructure 
     technologies.

    Subtitle D--Department of Energy Authorization of Appropriations

     SEC. 2261. AUTHORIZATION OF APPROPRIATIONS.

       (a) Operation and Maintenance.--There are authorized to be 
     appropriated to the Secretary for Renewable Energy operation 
     and maintenance, including activities under subtitle C, 
     Geothermal Technology Development, Hydropower, Concentrating 
     Solar Power, Photovoltaic Energy Systems, Solar Building 
     Technology Research, Wind Energy Systems, High Temperature 
     Superconducting Research and Development, Energy Storage 
     Systems, Transmission Reliability, International Renewable 
     Energy Program, Renewable Energy Production Incentive 
     Program, Renewable Program Support, National Renewable Energy 
     Laboratory, and Program Direction, and including amounts 
     authorized under the amendment made by section 2210 and 
     amounts authorized under section 2225, $535,000,000 for 
     fiscal year 2002, $639,000,000 for fiscal year 2003, and 
     $683,000,000 for fiscal year 2004, to remain available until 
     expended.
       (b) Wave Powered Electric Generation.--Within the amounts 
     authorized to be appropriated to the Secretary under 
     subsection (a), the Secretary shall carry out a research 
     program, in conjunction with other appropriate Federal 
     agencies, on wave powered electric generation.
       (c) Assessment of Renewable Energy Resources.--
       (1) In general.--Using funds authorized in subsection (a), 
     of this section, the Secretary shall transmit to the 
     Congress, within 1 year after the date of the enactment of 
     this Act, an assessment of all renewable energy resources 
     available within the United States.
       (2) Resource assessment.--Such report shall include a 
     detailed inventory describing the available amount and 
     characteristics of solar, wind, biomass, geothermal, 
     hydroelectric, and other renewable energy sources, and an 
     estimate of the costs needed to develop each resource. The 
     report shall also include such other information as the 
     Secretary believes would be useful in siting renewable energy 
     generation, such as appropriate terrain, population and load 
     centers, nearby energy infrastructure, and location of energy 
     resources.
       (3) Availability.--The information and cost estimates in 
     this report shall be updated annually and made available to 
     the public, along with the data used to create the report.
       (4) Sunset.--This subsection shall expire at the end of 
     fiscal year 2004.
       (d) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated in subsection (a) may be used for--
       (1) Departmental Energy Management Program; or
       (2) Renewable Indian Energy Resources.

                       TITLE III--NUCLEAR ENERGY

         Subtitle A--University Nuclear Science and Engineering

     SEC. 2301. SHORT TITLE.

       This subtitle may be cited as ``Department of Energy 
     University Nuclear Science and Engineering Act''.

     SEC. 2302. FINDINGS.

       The Congress finds the following:
       (1) United States university nuclear science and 
     engineering programs are in a state of serious decline, with 
     nuclear engineering enrollment at a 35-year low. Since 1980, 
     the number of nuclear engineering university programs has 
     declined nearly 40 percent, and over two-thirds of the 
     faculty in these programs are 45 years of age or older. Also, 
     since 1980, the number of university research and training 
     reactors in the United States has declined by over 50 
     percent. Most of these reactors were built in the late 1950s 
     and 1960s with 30-year to 40-year operating licenses, and 
     many will require relicensing in the next several years.
       (2) A decline in a competent nuclear workforce, and the 
     lack of adequately trained nuclear scientists and engineers, 
     will affect the ability of the United States to solve future 
     nuclear waste storage issues, operate existing and design 
     future fission reactors in the United States, respond to 
     future nuclear events worldwide, help stem the proliferation 
     of nuclear weapons, and design and operate naval nuclear 
     reactors.
       (3) The Department of Energy's Office of Nuclear Energy, 
     Science and Technology, a principal Federal agency for 
     civilian research in nuclear science and engineering, is well 
     suited to help maintain tomorrow's human resource and 
     training investment in the nuclear sciences and engineering.

     SEC. 2303. DEPARTMENT OF ENERGY PROGRAM.

       (a) Establishment--The Secretary, through the Office of 
     Nuclear Energy, Science and Technology, shall support a 
     program to maintain the Nation's human resource investment 
     and infrastructure in the nuclear sciences and engineering 
     consistent with the Department's statutory authorities 
     related to civilian nuclear research, development, and 
     demonstration and commercial application of energy 
     technology.
       (b) Duties of the Office of Nuclear Energy, Science and 
     Technology.--In carrying out the program under this subtitle, 
     the Director of the Office of Nuclear Energy, Science and 
     Technology shall--
       (1) develop a robust graduate and undergraduate fellowship 
     program to attract new and talented students;

[[Page S11817]]

       (2) assist universities in recruiting and retaining new 
     faculty in the nuclear sciences and engineering through a 
     Junior Faculty Research Initiation Grant Program;
       (3) maintain a robust investment in the fundamental nuclear 
     sciences and engineering through the Nuclear Engineering 
     Education Research Program;
       (4) encourage collaborative nuclear research among 
     industry, national laboratories, and universities through the 
     Nuclear Energy Research Initiative;
       (5) assist universities in maintaining reactor 
     infrastructure; and
       (6) support communication and outreach related to nuclear 
     science and engineering.
       (c) Maintaining University Research and Training Reactors 
     and Associated Infrastructure.--The Secretary, through the 
     Office of Nuclear Energy, Science and Technology, shall 
     provide for the following university research and training 
     reactor infrastructure maintenance and research activities:
       (1) Refueling of university research reactors with low 
     enriched fuels, upgrade of operational instrumentation, and 
     sharing of reactors among universities.
       (2) In collaboration with the United States nuclear 
     industry, assistance, where necessary, in relicensing and 
     upgrading university training reactors as part of a student 
     training program.
       (3) A university reactor research and training award 
     program that provides for reactor improvements as part of a 
     focused effort that emphasizes research, training, and 
     education.
       (d) University-DOE Laboratory Interactions.--The Secretary, 
     through the Office of Nuclear Energy, Science and Technology, 
     shall develop--
       (1) a sabbatical fellowship program for university faculty 
     to spend extended periods of time at Department of Energy 
     laboratories in the areas of nuclear science and technology; 
     and
       (2) a visiting scientist program in which laboratory staff 
     can spend time in academic nuclear science and engineering 
     departments.

     The Secretary may under subsection (b)(1) provide for 
     fellowships for students to spend time at Department of 
     Energy laboratories in the areas of nuclear science and 
     technology under the mentorship of laboratory staff.
       (e) Operations and Maintenance.--To the extent that the use 
     of a university research reactor is funded under this 
     subtitle, funds authorized under this subtitle may be used to 
     supplement operation of the research reactor during the 
     investigator's proposed effort. The host institution shall 
     provide at least 50 percent of the cost of the reactor's 
     operation.
       (f) Merit Review Required.--All grants, contracts, 
     cooperative agreements, or other financial assistance awards 
     under this subtitle shall be made only after independent 
     merit review.
       (g) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary shall prepare and 
     transmit to the appropriate congressional committees a 5-year 
     plan on how the programs authorized in this subtitle will be 
     implemented. The plan shall include a review of the projected 
     personnel needs in the fields of nuclear science and 
     engineering and of the scope of nuclear science and 
     engineering education programs at the Department and other 
     Federal agencies.

     SEC. 2304. AUTHORIZATION OF APPROPRIATIONS.

       (a) Total Authorization.--The following sums are authorized 
     to be appropriated to the Secretary, to remain available 
     until expended, for the purposes of carrying out this 
     subtitle:
       (1) $30,200,000 for fiscal year 2002.
       (2) $41,000,000 for fiscal year 2003.
       (3) $47,900,000 for fiscal year 2004.
       (4) $55,600,000 for fiscal year 2005.
       (5) $64,100,000 for fiscal year 2006.
       (b) Graduate and Undergraduate Fellowships.--Of the funds 
     authorized by subsection (a), the following sums are 
     authorized to be appropriated to carry out section 
     2303(b)(1):
       (1) $3,000,000 for fiscal year 2002.
       (2) $3,100,000 for fiscal year 2003.
       (3) $3,200,000 for fiscal year 2004.
       (4) $3,200,000 for fiscal year 2005.
       (5) $3,200,000 for fiscal year 2006.
       (c) Junior Faculty Research Initiation Grant Program.--Of 
     the funds authorized by subsection (a), the following sums 
     are authorized to be appropriated to carry out section 
     2303(b)(2):
       (1) $5,000,000 for fiscal year 2002.
       (2) $7,000,000 for fiscal year 2003.
       (3) $8,000,000 for fiscal year 2004.
       (4) $9,000,000 for fiscal year 2005.
       (5) $10,000,000 for fiscal year 2006.
       (d) Nuclear Engineering Education Research Program.--Of the 
     funds authorized by subsection (a), the following sums are 
     authorized to be appropriated to carry out section 
     2303(b)(3):
       (1) $8,000,000 for fiscal year 2002.
       (2) $12,000,000 for fiscal year 2003.
       (3) $13,000,000 for fiscal year 2004.
       (4) $15,000,000 for fiscal year 2005.
       (5) $20,000,000 for fiscal year 2006.
       (e) Communication and Outreach Related to Nuclear Science 
     and Engineering.--Of the funds authorized by subsection (a), 
     the following sums are authorized to be appropriated to carry 
     out section 2303(b)(5):
       (1) $200,000 for fiscal year 2002.
       (2) $200,000 for fiscal year 2003.
       (3) $300,000 for fiscal year 2004.
       (4) $300,000 for fiscal year 2005.
       (5) $300,000 for fiscal year 2006.
       (f) Refueling of University Research Reactors and 
     Instrumentation Upgrades.--Of the funds authorized by 
     subsection (a), the following sums are authorized to be 
     appropriated to carry out section 2303(c)(1):
       (1) $6,000,000 for fiscal year 2002.
       (2) $6,500,000 for fiscal year 2003.
       (3) $7,000,000 for fiscal year 2004.
       (4) $7,500,000 for fiscal year 2005.
       (5) $8,000,000 for fiscal year 2006.
       (g) Relicensing Assistance.--Of the funds authorized by 
     subsection (a), the following sums are authorized to be 
     appropriated to carry out section 2303(c)(2):
       (1) $1,000,000 for fiscal year 2002.
       (2) $1,100,000 for fiscal year 2003.
       (3) $1,200,000 for fiscal year 2004.
       (4) $1,300,000 for fiscal year 2005.
       (5) $1,300,000 for fiscal year 2006.
       (h) Reactor Research and Training Award Program.--Of the 
     funds authorized by subsection (a), the following sums are 
     authorized to be appropriated to carry out section 
     2303(c)(3):
       (1) $6,000,000 for fiscal year 2002.
       (2) $10,000,000 for fiscal year 2003.
       (3) $14,000,000 for fiscal year 2004.
       (4) $18,000,000 for fiscal year 2005.
       (5) $20,000,000 for fiscal year 2006.
       (i) University-DOE Laboratory Interactions.--Of the funds 
     authorized by subsection (a), the following sums are 
     authorized to be appropriated to carry out section 2303(d):
       (1) $1,000,000 for fiscal year 2002.
       (2) $1,100,000 for fiscal year 2003.
       (3) $1,200,000 for fiscal year 2004.
       (4) $1,300,000 for fiscal year 2005.
       (5) $1,300,000 for fiscal year 2006.

Subtitle B--Advanced Fuel Recycling Technology Research and Development 
                                Program

     SEC. 2321. PROGRAM.

       (a) In General.--The Secretary, through the Director of the 
     Office of Nuclear Energy, Science and Technology, shall 
     conduct an advanced fuel recycling technology research and 
     development program to further the availability of 
     proliferation-resistant fuel recycling technologies as an 
     alternative to aqueous reprocessing in support of evaluation 
     of alternative national strategies for spent nuclear fuel and 
     the Generation IV advanced reactor concepts, subject to 
     annual review by the Secretary's Nuclear Energy Research 
     Advisory Committee or other independent entity, as 
     appropriate.
       (b) Reports.--The Secretary shall report on the activities 
     of the advanced fuel recycling technology research and 
     development program, as part of the Department's annual 
     budget submission.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this 
     section--
       (1) $10,000,000 for fiscal year 2002; and
       (2) such sums as are necessary for fiscal year 2003 and 
     fiscal year 2004.

    Subtitle C--Department of Energy Authorization of Appropriations

     SEC. 2341. NUCLEAR ENERGY RESEARCH INITIATIVE.

       (a) Program.--The Secretary, through the Office of Nuclear 
     Energy, Science and Technology, shall conduct a Nuclear 
     Energy Research Initiative for grants to be competitively 
     awarded and subject to peer review for research relating to 
     nuclear energy.
       (b) Objectives.--The program shall be directed toward 
     accomplishing the objectives of--
       (1) developing advanced concepts and scientific 
     breakthroughs in nuclear fission and reactor technology to 
     address and overcome the principal technical and scientific 
     obstacles to the expanded use of nuclear energy in the United 
     States;
       (2) advancing the state of nuclear technology to maintain a 
     competitive position in foreign markets and a future domestic 
     market;
       (3) promoting and maintaining a United States nuclear 
     science and engineering infrastructure to meet future 
     technical challenges;
       (4) providing an effective means to collaborate on a cost-
     shared basis with international agencies and research 
     organizations to address and influence nuclear technology 
     development worldwide; and
       (5) promoting United States leadership and partnerships in 
     bilateral and multilateral nuclear energy research.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this 
     section--
       (1) $60,000,000 for fiscal year 2002; and
       (2) such sums as are necessary for fiscal year 2003 and 
     fiscal year 2004.

     SEC. 2342. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

       (a) Program.--The Secretary, through the Office of Nuclear 
     Energy, Science and Technology, shall conduct a Nuclear 
     Energy Plant Optimization research and development program 
     jointly with industry and cost-shared by industry by at least 
     50 percent and subject to annual review by the Secretary's 
     Nuclear Energy Research Advisory Committee or other 
     independent entity, as appropriate.
       (b) Objectives.--The program shall be directed toward 
     accomplishing the objectives of--
       (1) managing long-term effects of component aging; and
       (2) improving the efficiency and productivity of existing 
     nuclear power stations.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this 
     section--
       (1) $15,000,000 for fiscal year 2002; and

[[Page S11818]]

       (2) such sums as are necessary for fiscal years 2003 and 
     2004.

     SEC. 2343. NUCLEAR ENERGY TECHNOLOGIES.

       (a) In General.--The Secretary, through the Office of 
     Nuclear Energy, Science and Technology, shall conduct a study 
     of Generation IV nuclear energy systems, including 
     development of a technology roadmap and performance of 
     research and development necessary to make an informed 
     technical decision regarding the most promising candidates 
     for commercial application.
       (b) Reactor Characteristics.--To the extent practicable, in 
     conducting the study under subsection (a), the Secretary 
     shall study nuclear energy systems that offer the highest 
     probability of achieving the goals for Generation IV nuclear 
     energy systems, including--
       (1) economics competitive with any other generators;
       (2) enhanced safety features, including passive safety 
     features;
       (3) substantially reduced production of high-level waste, 
     as compared with the quantity of waste produced by reactors 
     in operation on the date of the enactment of this Act;
       (4) highly proliferation-resistant fuel and waste;
       (5) sustainable energy generation including optimized fuel 
     utilization; and
       (6) substantially improved thermal efficiency, as compared 
     with the thermal efficiency of reactors in operation on the 
     date of the enactment of this Act.
       (c) Consultation.--In conducting the study under subsection 
     (a), the Secretary shall consult with appropriate 
     representatives of industry, institutions of higher 
     education, Federal agencies, and international, professional, 
     and technical organizations.
       (d) Report.--
       (1) In general.--Not later than December 31, 2002, the 
     Secretary shall transmit to the appropriate congressional 
     committees a report describing the activities of the 
     Secretary under this section, and plans for research and 
     development leading to a public/private cooperative 
     demonstration of one or more Generation IV nuclear energy 
     systems.
       (2) Contents.--The report shall contain--
       (A) an assessment of all available technologies;
       (B) a summary of actions needed for the most promising 
     candidates to be considered as viable commercial options 
     within the five to ten years after the date of the report, 
     with consideration of regulatory, economic, and technical 
     issues;
       (C) a recommendation of not more than three promising 
     Generation IV nuclear energy system concepts for further 
     development;
       (D) an evaluation of opportunities for public/private 
     partnerships;
       (E) a recommendation for structure of a public/private 
     partnership to share in development and construction costs;
       (F) a plan leading to the selection and conceptual design, 
     by September 30, 2004, of at least one Generation IV nuclear 
     energy system concept recommended under subparagraph (C) for 
     demonstration through a public/private partnership;
       (G) an evaluation of opportunities for siting demonstration 
     facilities on Department of Energy land; and
       (H) a recommendation for appropriate involvement of other 
     Federal agencies.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this section 
     and to carry out the recommendations in the report 
     transmitted under subsection (d)--
       (1) $20,000,000 for fiscal year 2002; and
       (2) such sums as are necessary for fiscal year 2003 and 
     fiscal year 2004.

     SEC. 2344. AUTHORIZATION OF APPROPRIATIONS.

       (a) Operation and Maintenance.--There are authorized to be 
     appropriated to the Secretary to carry out activities 
     authorized under this title for nuclear energy operation and 
     maintenance, including amounts authorized under sections 
     2304(a), 2321(c), 2341(c), 2342(c), and 2343(e), and 
     including Advanced Radioisotope Power Systems, Test Reactor 
     Landlord, and Program Direction, $191,200,000 for fiscal year 
     2002, $199,000,000 for fiscal year 2003, and $207,000,000 for 
     fiscal year 2004, to remain available until expended.
       (b) Construction.--There are authorized to be appropriated 
     to the Secretary--
       (1) $950,000 for fiscal year 2002, $2,200,000 for fiscal 
     year 2003, $1,246,000 for fiscal year 2004, and $1,699,000 
     for fiscal year 2005 for completion of construction of 
     Project 99-E-200, Test Reactor Area Electric Utility Upgrade, 
     Idaho National Engineering and Environmental Laboratory; and
       (2) $500,000 for fiscal year 2002, $500,000 for fiscal year 
     2003, $500,000 for fiscal year 2004, and $500,000 for fiscal 
     year 2005, for completion of construction of Project 95-E-
     201, Test Reactor Area Fire and Life Safety Improvements, 
     Idaho National Engineering and Environmental Laboratory.
       (c) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated in subsection (a) may be used for--
       (1) Nuclear Energy Isotope Support and Production;
       (2) Argonne National Laboratory-West Operations;
       (3) Fast Flux Test Facility; or
       (4) Nuclear Facilities Management.

                        TITLE IV--FOSSIL ENERGY

                            Subtitle A--Coal

     SEC. 2401. COAL AND RELATED TECHNOLOGIES PROGRAMS.

       (a) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary $172,000,000 for fiscal 
     year 2002, $179,000,000 for fiscal year 2003, and 
     $186,000,000 for fiscal year 2004, to remain available until 
     expended, for other coal and related technologies research 
     and development programs, which shall include--
       (1) Innovations for Existing Plants;
       (2) Integrated Gasification Combined Cycle;
       (3) Advanced combustion systems;
       (4) Turbines;
       (5) Sequestration Research and Development;
       (6) Innovative technologies for demonstration;
       (7) Transportation Fuels and Chemicals;
       (8) Solid Fuels and Feedstocks;
       (9) Advanced Fuels Research; and
       (10) Advanced Research.
       (b) Limit on Use of Funds.--Notwithstanding subsection (a), 
     no funds may be used to carry out the activities authorized 
     by this section after September 30, 2002, unless the 
     Secretary has transmitted to the Congress the report required 
     by this subsection and 1 month has elapsed since that 
     transmission. The report shall include a plan containing--
       (1) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be undertaken;
       (2) a detailed list of technical milestones for each coal 
     and related technology that will be pursued;
       (3) a description of how the programs authorized in this 
     section will be carried out so as to complement and not 
     duplicate activities authorized under division E.
       (c) Gasification.--The Secretary shall fund at least one 
     gasification project with the funds authorized under this 
     section.

                        Subtitle B--Oil and Gas

     SEC. 2421. PETROLEUM-OIL TECHNOLOGY.

       The Secretary shall conduct a program of research, 
     development, demonstration, and commercial application on 
     petroleum-oil technology. The program shall address--
       (1) Exploration and Production Supporting Research;
       (2) Oil Technology Reservoir Management/Extension; and
       (3) Effective Environmental Protection.

     SEC. 2422. NATURAL GAS.

       The Secretary shall conduct a program of research, 
     development, demonstration, and commercial application on 
     natural gas technologies. The program shall address--
       (1) Exploration and Production;
       (2) Infrastructure; and
       (3) Effective Environmental Protection.

     SEC. 2423. NATURAL GAS AND OIL DEPOSITS REPORT.

       Two years after the date of the enactment of this Act, and 
     at 2-year intervals thereafter, the Secretary of the 
     Interior, in consultation with other appropriate Federal 
     agencies, shall transmit a report to the Congress assessing 
     the contents of natural gas and oil deposits at existing 
     drilling sites off the coast of Louisiana and Texas.

     SEC. 2424. OIL SHALE RESEARCH.

       There are authorized to be appropriated to the Secretary of 
     Energy for fiscal year 2002 $10,000,000, to be divided 
     equally between grants for research on Eastern oil shale and 
     grants for research on Western oil shale.

        Subtitle C--Ultra-Deepwater and Unconventional Drilling

     SEC. 2441. SHORT TITLE.

       This subtitle may be cited as the ``Natural Gas and Other 
     Petroleum Research, Development, and Demonstration Act of 
     2001''.

     SEC. 2442. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``deepwater'' means water depths greater than 
     200 meters but less than 1,500 meters;
       (2) the term ``Fund'' means the Ultra-Deepwater and 
     Unconventional Gas Research Fund established under section 
     2450;
       (3) the term ``institution of higher education'' has the 
     meaning given that term in section 101 of the Higher 
     Education Act of 1965 (20 U.S.C. 1001);
       (4) the term ``Research Organization'' means the Research 
     Organization created pursuant to section 2446(a);
       (5) the term ``ultra-deepwater'' means water depths greater 
     than 1,500 meters; and
       (6) the term ``unconventional'' means located in heretofore 
     inaccessible or uneconomic formations on land.

     SEC. 2443. ULTRA-DEEPWATER PROGRAM.

       The Secretary shall establish a program of research, 
     development, and demonstration of ultra-deepwater natural gas 
     and other petroleum exploration and production technologies, 
     in areas currently available for Outer Continental Shelf 
     leasing. The program shall be carried out by the Research 
     Organization as provided in this subtitle.

     SEC. 2444. NATIONAL ENERGY TECHNOLOGY LABORATORY.

       The National Energy Technology Laboratory and the United 
     States Geological Survey, when appropriate, shall carry out 
     programs of long-term research into new natural gas and other 
     petroleum exploration and production technologies and 
     environmental mitigation technologies for production from 
     unconventional and ultra-deepwater resources, including 
     methane hydrates. Such Laboratory shall also conduct a 
     program of research, development, and demonstration of new 
     technologies for the reduction of greenhouse gas emissions 
     from unconventional and ultra-deepwater natural

[[Page S11819]]

     gas or other petroleum exploration and production activities, 
     including sub-sea floor carbon sequestration technologies.

     SEC. 2445. ADVISORY COMMITTEE.

       (a) Establishment.--The Secretary shall, within 3 months 
     after the date of the enactment of this Act, establish an 
     Advisory Committee consisting of 7 members, each having 
     extensive operational knowledge of and experience in the 
     natural gas and other petroleum exploration and production 
     industry who are not Federal Government employees or 
     contractors. A minimum of 4 members shall have extensive 
     knowledge of ultra-deepwater natural gas or other petroleum 
     exploration and production technologies, a minimum of 2 
     members shall have extensive knowledge of unconventional 
     natural gas or other petroleum exploration and production 
     technologies, and at least 1 member shall have extensive 
     knowledge of greenhouse gas emission reduction technologies, 
     including carbon sequestration.
       (b) Function.--The Advisory Committee shall advise the 
     Secretary on the selection of an organization to create the 
     Research Organization and on the implementation of this 
     subtitle.
       (c) Compensation.--Members of the Advisory Committee shall 
     serve without compensation but shall receive travel expenses, 
     including per diem in lieu of subsistence, in accordance with 
     applicable provisions under subchapter I of chapter 57 of 
     title 5, United States Code.
       (d) Administrative Costs.--The costs of activities carried 
     out by the Secretary and the Advisory Committee under this 
     subtitle shall be paid or reimbursed from the Fund.
       (e) Duration of Advisory Committee.--Section 14 of the 
     Federal Advisory Committee Act shall not apply to the 
     Advisory Committee.

     SEC. 2446. RESEARCH ORGANIZATION.

       (a) Selection of Research Organization.--The Secretary, 
     within 6 months after the date of the enactment of this Act, 
     shall solicit proposals from eligible entities for 
     the creation of the Research Organization, and within 3 
     months after such solicitation, shall select an entity to 
     create the Research Organization.
       (b) Eligible Entities.--Entities eligible to create the 
     Research Organization shall--
       (1) have been in existence as of the date of the enactment 
     of this Act;
       (2) be entities exempt from tax under section 501(c)(3) of 
     the Internal Revenue Code of 1986; and
       (3) be experienced in planning and managing programs in 
     natural gas or other petroleum exploration and production 
     research, development, and demonstration.
       (c) Proposals.--A proposal from an entity seeking to create 
     the Research Organization shall include a detailed 
     description of the proposed membership and structure of the 
     Research Organization.
       (d) Functions.--The Research Organization shall--
       (1) award grants on a competitive basis to qualified--
       (A) research institutions;
       (B) institutions of higher education;
       (C) companies; and
       (D) consortia formed among institutions and companies 
     described in subparagraphs (A) through (C) for the purpose of 
     conducting research, development, and demonstration of 
     unconventional and ultra-deepwater natural gas or other 
     petroleum exploration and production technologies; and
       (2) review activities under those grants to ensure that 
     they comply with the requirements of this subtitle and serve 
     the purposes for which the grant was made.

     SEC. 2447. GRANTS.

       (a) Types of Grants.--
       (1) Unconventional.--The Research Organization shall award 
     grants for research, development, and demonstration of 
     technologies to maximize the value of the Government's 
     natural gas and other petroleum resources in unconventional 
     reservoirs, and to develop technologies to increase the 
     supply of natural gas and other petroleum resources by 
     lowering the cost and improving the efficiency of exploration 
     and production of unconventional reservoirs, while improving 
     safety and minimizing environmental impacts.
       (2) Ultra-deepwater.--The Research Organization shall award 
     grants for research, development, and demonstration of 
     natural gas or other petroleum exploration and production 
     technologies to--
       (A) maximize the value of the Federal Government's natural 
     gas and other petroleum resources in the ultra-deepwater 
     areas;
       (B) increase the supply of natural gas and other petroleum 
     resources by lowering the cost and improving the efficiency 
     of exploration and production of ultra-deepwater reservoirs; 
     and
       (C) improve safety and minimize the environmental impacts 
     of ultra-deepwater developments.
       (3) Ultra-deepwater architecture.--The Research 
     Organization shall award a grant to one or more consortia 
     described in section 2446(d)(1)(D) for the purpose of 
     developing and demonstrating the next generation architecture 
     for ultra-deepwater production of natural gas and other 
     petroleum in furtherance of the purposes stated in paragraph 
     (2)(A) through (C).
       (b) Conditions for Grants.--Grants provided under this 
     section shall contain the following conditions:
       (1) If the grant recipient consists of more than one 
     entity, the recipient shall provide a signed contract agreed 
     to by all participating members clearly defining all rights 
     to intellectual property for existing technology and for 
     future inventions conceived and developed using funds 
     provided under the grant, in a manner that is consistent with 
     applicable laws.
       (2) There shall be a repayment schedule for Federal dollars 
     provided for demonstration projects under the grant in the 
     event of a successful commercialization of the demonstrated 
     technology. Such repayment schedule shall provide that the 
     payments are made to the Secretary with the express intent 
     that these payments not impede the adoption of the 
     demonstrated technology in the marketplace. In the event that 
     such impedance occurs due to market forces or other factors, 
     the Research Organization shall renegotiate the grant 
     agreement so that the acceptance of the technology in the 
     marketplace is enabled.
       (3) Applications for grants for demonstration projects 
     shall clearly state the intended commercial applications of 
     the technology demonstrated.
       (4) The total amount of funds made available under a grant 
     provided under subsection (a)(3) shall not exceed 50 percent 
     of the total cost of the activities for which the grant is 
     provided.
       (5) The total amount of funds made available under a grant 
     provided under subsection (a)(1) or (2) shall not exceed 50 
     percent of the total cost of the activities covered by the 
     grant, except that the Research Organization may elect to 
     provide grants covering a higher percentage, not to exceed 90 
     percent, of total project costs in the case of grants made 
     solely to independent producers.
       (6) An appropriate amount of funds provided under a grant 
     shall be used for the broad dissemination of technologies 
     developed under the grant to interested institutions of 
     higher education, industry, and appropriate Federal and State 
     technology entities to ensure the greatest possible benefits 
     for the public and use of government resources.
       (7) Demonstrations of ultra-deepwater technologies for 
     which funds are provided under a grant may be conducted in 
     ultra-deepwater or deepwater locations.
       (c) Allocation of Funds.--Funds available for grants under 
     this subtitle shall be allocated as follows:
       (1) 15 percent shall be for grants under subsection (a)(1).
       (2) 15 percent shall be for grants under subsection (a)(2).
       (3) 60 percent shall be for grants under subsection (a)(3).
       (4) 10 percent shall be for carrying out section 2444.

     SEC. 2448. PLAN AND FUNDING.

       (a) Transmittal to Secretary.--The Research Organization 
     shall transmit to the Secretary an annual plan proposing 
     projects and funding of activities under each paragraph of 
     section 2447(a).
       (b) Review.--The Secretary shall have 1 month to review the 
     annual plan, and shall approve the plan, if it is consistent 
     with this subtitle. If the Secretary approves the plan, the 
     Secretary shall provide funding as proposed in the plan.
       (c) Disapproval.--If the Secretary does not approve the 
     plan, the Secretary shall notify the Research Organization of 
     the reasons for disapproval and shall withhold funding until 
     a new plan is submitted which the Secretary approves. Within 
     1 month after notifying the Research Organization of a 
     disapproval, the Secretary shall notify the appropriate 
     congressional committees of the disapproval.

     SEC. 2449. AUDIT.

       The Secretary shall retain an independent, commercial 
     auditor to determine the extent to which the funds authorized 
     by this subtitle have been expended in a manner consistent 
     with the purposes of this subtitle. The auditor shall 
     transmit a report annually to the Secretary, who shall 
     transmit the report to the appropriate congressional 
     committees, along with a plan to remedy any deficiencies 
     cited in the report.

     SEC. 2450. FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``Ultra-Deepwater 
     and Unconventional Gas Research Fund'' which shall be 
     available for obligation to the extent provided in advance in 
     appropriations Acts for allocation under section 2447(c).
       (b) Funding Sources.--
       (1) Loans from treasury.--There are authorized to be 
     appropriated to the Secretary $900,000,000 for the period 
     encompassing fiscal years 2002 through 2009. Such amounts 
     shall be deposited by the Secretary in the Fund, and shall be 
     considered loans from the Treasury. Income received by the 
     United States in connection with any ultra-deepwater oil and 
     gas leases shall be deposited in the Treasury and considered 
     as repayment for the loans under this paragraph.
       (2) Additional appropriations.--There are authorized to be 
     appropriated to the Secretary such sums as may be necessary 
     for the fiscal years 2002 through 2009, to be deposited in 
     the Fund.
       (3) Oil and gas lease income.--To the extent provided in 
     advance in appropriations Acts, not more than 7.5 percent of 
     the income of the United States from Federal oil and gas 
     leases may be deposited in the Fund for fiscal years 2002 
     through 2009.

     SEC. 2451. SUNSET.

       No funds are authorized to be appropriated for carrying out 
     this subtitle after fiscal year 2009. The Research 
     Organization shall

[[Page S11820]]

     be terminated when it has expended all funds made available 
     pursuant to this subtitle.

                         Subtitle D--Fuel Cells

     SEC. 2461. FUEL CELLS.

       (a) In General.--The Secretary shall conduct a program of 
     research, development, demonstration, and commercial 
     application on fuel cells. The program shall address--
       (1) Advanced Research;
       (2) Systems Development;
       (3) Vision 21-Hybrids; and
       (4) Innovative Concepts.
       (b) Manufacturing Production and Processes.--In addition to 
     the program under subsection (a), the Secretary, in 
     consultation other Federal agencies, as appropriate, shall 
     establish a program for the demonstration of fuel cell 
     technologies, including fuel cell proton exchange membrane 
     technology, for commercial, residential, and transportation 
     applications. The program shall specifically focus on 
     promoting the application of and improved manufacturing 
     production and processes for fuel cell technologies.
       (c) Authorization of Appropriations.--Within the amounts 
     authorized to be appropriated under section 2481(a), there 
     are authorized to be appropriated to the Secretary for the 
     purpose of carrying out subsection (b), $28,000,000 for each 
     of fiscal years 2002 through 2004.

    Subtitle E--Department of Energy Authorization of Appropriations

     SEC. 2481. AUTHORIZATION OF APPROPRIATIONS.

       (a) Operation and Maintenance.--There are authorized to be 
     appropriated to the Secretary for operation and maintenance 
     for subtitle B and subtitle D, and for Fossil Energy Research 
     and Development Headquarters Program Direction, Field Program 
     Direction, Plant and Capital Equipment, Cooperative Research 
     and Development, Import/Export Authorization, and Advanced 
     Metallurgical Processes $282,000,000 for fiscal year 2002, 
     $293,000,000 for fiscal year 2003, and $305,000,000 for 
     fiscal year 2004, to remain available until expended.
       (b) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated in subsection (a) may be used for--
       (1) Gas Hydrates.
       (2) Fossil Energy Environmental Restoration; or
       (3) Research, development, demonstration, and commercial 
     application on coal and related technologies, including 
     activities under subtitle A.

                            TITLE V--SCIENCE

                   Subtitle A--Fusion Energy Sciences

     SEC. 2501. SHORT TITLE.

       This subtitle may be cited as the ``Fusion Energy Sciences 
     Act of 2001''.

     SEC. 2502. FINDINGS.

       The Congress finds that--
       (1) economic prosperity is closely linked to an affordable 
     and ample energy supply;
       (2) environmental quality is closely linked to energy 
     production and use;
       (3) population, worldwide economic development, energy 
     consumption, and stress on the environment are all expected 
     to increase substantially in the coming decades;
       (4) the few energy options with the potential to meet 
     economic and environmental needs for the long-term future 
     should be pursued as part of a balanced national energy plan;
       (5) fusion energy is an attractive long-term energy source 
     because of the virtually inexhaustible supply of fuel, and 
     the promise of minimal adverse environmental impact and 
     inherent safety;
       (6) the National Research Council, the President's 
     Committee of Advisers on Science and Technology, and the 
     Secretary of Energy Advisory Board have each recently 
     reviewed the Fusion Energy Sciences Program and each strongly 
     supports the fundamental science and creative innovation of 
     the program, and has confirmed that progress toward the goal 
     of producing practical fusion energy has been excellent, 
     although much scientific and engineering work remains to be 
     done;
       (7) each of these reviews stressed the need for a magnetic 
     fusion burning plasma experiment to address key scientific 
     issues and as a necessary step in the development of fusion 
     energy;
       (8) the National Research Council has also called for a 
     broadening of the Fusion Energy Sciences Program research 
     base as a means to more fully integrate the fusion science 
     community into the broader scientific community; and
       (9) the Fusion Energy Sciences Program budget is inadequate 
     to support the necessary science and innovation for the 
     present generation of experiments, and cannot accommodate the 
     cost of a burning plasma experiment constructed by the United 
     States, or even the cost of key participation by the United 
     States in an international effort.

     SEC. 2503. PLAN FOR FUSION EXPERIMENT.

       (a) Plan for United States Fusion Experiment.--The 
     Secretary, on the basis of full consultation with the Fusion 
     Energy Sciences Advisory Committee and the Secretary of 
     Energy Advisory Board, as appropriate, shall develop a plan 
     for United States construction of a magnetic fusion burning 
     plasma experiment for the purpose of accelerating scientific 
     understanding of fusion plasmas. The Secretary shall request 
     a review of the plan by the National Academy of Sciences, and 
     shall transmit the plan and the review to the Congress by 
     July 1, 2004.
       (b) Requirements of Plan.--The plan described in subsection 
     (a) shall--
       (1) address key burning plasma physics issues; and
       (2) include specific information on the scientific 
     capabilities of the proposed experiment, the relevance of 
     these capabilities to the goal of practical fusion energy, 
     and the overall design of the experiment including its 
     estimated cost and potential construction sites.
       (c) United States Participation in an International 
     Experiment.--In addition to the plan described in subsection 
     (a), the Secretary, on the basis of full consultation with 
     the Fusion Energy Sciences Advisory Committee and the 
     Secretary of Energy Advisory Board, as appropriate, may also 
     develop a plan for United States participation in an 
     international burning plasma experiment for the same purpose, 
     whose construction is found by the Secretary to be highly 
     likely and where United States participation is cost 
     effective relative to the cost and scientific benefits of a 
     domestic experiment described in subsection (a). If the 
     Secretary elects to develop a plan under this subsection, he 
     shall include the information described in subsection (b), 
     and an estimate of the cost of United States participation in 
     such an international experiment. The Secretary shall request 
     a review by the National Academies of Sciences and 
     Engineering of a plan developed under this subsection, and 
     shall transmit the plan and the review to the Congress not 
     later than July 1, 2004.
       (d) Authorization of Research and Development.--The 
     Secretary, through the Fusion Energy Sciences Program, may 
     conduct any research and development necessary to fully 
     develop the plans described in this section.

     SEC. 2504. PLAN FOR FUSION ENERGY SCIENCES PROGRAM.

       Not later than 6 months after the date of the enactment of 
     this Act, the Secretary, in full consultation with FESAC, 
     shall develop and transmit to the Congress a plan for the 
     purpose of ensuring a strong scientific base for the Fusion 
     Energy Sciences Program and to enable the experiments 
     described in section 2503. Such plan shall include as its 
     objectives--
       (1) to ensure that existing fusion research facilities and 
     equipment are more fully utilized with appropriate 
     measurements and control tools;
       (2) to ensure a strengthened fusion science theory and 
     computational base;
       (3) to ensure that the selection of and funding for new 
     magnetic and inertial fusion research facilities is based on 
     scientific innovation and cost effectiveness;
       (4) to improve the communication of scientific results and 
     methods between the fusion science community and the wider 
     scientific community;
       (5) to ensure that adequate support is provided to optimize 
     the design of the magnetic fusion burning plasma experiments 
     referred to in section 2503;
       (6) to ensure that inertial confinement fusion facilities 
     are utilized to the extent practicable for the purpose of 
     inertial fusion energy research and development;
       (7) to develop a roadmap for a fusion-based energy source 
     that shows the important scientific questions, the evolution 
     of confinement configurations, the relation between these two 
     features, and their relation to the fusion energy goal;
       (8) to establish several new centers of excellence, 
     selected through a competitive peer-review process and 
     devoted to exploring the frontiers of fusion science;
       (9) to ensure that the National Science Foundation, and 
     other agencies, as appropriate, play a role in extending the 
     reach of fusion science and in sponsoring general plasma 
     science; and
       (10) to ensure that there be continuing broad assessments 
     of the outlook for fusion energy and periodic external 
     reviews of fusion energy sciences.

     SEC. 2505. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary 
     for the development and review, but not for implementation, 
     of the plans described in this subtitle and for activities of 
     the Fusion Energy Sciences Program $320,000,000 for fiscal 
     year 2002 and $335,000,000 for fiscal year 2003, of which up 
     to $15,000,000 for each of fiscal year 2002 and fiscal year 
     2003 may be used to establish several new centers of 
     excellence, selected through a competitive peer-review 
     process and devoted to exploring the frontiers of fusion 
     science.

                 Subtitle B--Spallation Neutron Source

     SEC. 2521. DEFINITION.

       For the purposes of this subtitle, the term ``Spallation 
     Neutron Source'' means Department Project 99-E-334, Oak Ridge 
     National Laboratory, Oak Ridge, Tennessee.

     SEC. 2522. AUTHORIZATION OF APPROPRIATIONS.

       (a) Authorization of Construction Funding.--There are 
     authorized to be appropriated to the Secretary for 
     construction of the Spallation Neutron Source--
       (1) $276,300,000 for fiscal year 2002;
       (2) $210,571,000 for fiscal year 2003;
       (3) $124,600,000 for fiscal year 2004;
       (4) $79,800,000 for fiscal year 2005; and
       (5) $41,100,000 for fiscal year 2006 for completion of 
     construction.
       (b) Authorization of Other Project Funding.--There are 
     authorized to be appropriated to the Secretary for other 
     project costs (including research and development necessary 
     to complete the project, preoperations costs, and capital 
     equipment not related to construction) of the Spallation 
     Neutron Source $15,353,000 for fiscal year 2002 and 
     $103,279,000 for the period encompassing fiscal years 2003 
     through 2006, to

[[Page S11821]]

     remain available until expended through September 30, 2006.

     SEC. 2523. REPORT.

       The Secretary shall report on the Spallation Neutron Source 
     as part of the Department's annual budget submission, 
     including a description of the achievement of milestones, a 
     comparison of actual costs to estimated costs, and any 
     changes in estimated project costs or schedule.

     SEC. 2524. LIMITATIONS.

       The total amount obligated by the Department, including 
     prior year appropriations, for the Spallation Neutron Source 
     may not exceed--
       (1) $1,192,700,000 for costs of construction;
       (2) $219,000,000 for other project costs; and
       (3) $1,411,700,000 for total project cost.

      Subtitle C--Facilities, Infrastructure, and User Facilities

     SEC. 2541. DEFINITION.

       For purposes of this subtitle--
       (1) the term ``nonmilitary energy laboratory'' means--
       (A) Ames Laboratory;
       (B) Argonne National Laboratory;
       (C) Brookhaven National Laboratory;
       (D) Fermi National Accelerator Laboratory;
       (E) Lawrence Berkeley National Laboratory;
       (F) Oak Ridge National Laboratory;
       (G) Pacific Northwest National Laboratory;
       (H) Princeton Plasma Physics Laboratory;
       (I) Stanford Linear Accelerator Center;
       (J) Thomas Jefferson National Accelerator Facility; or
       (K) any other facility of the Department that the 
     Secretary, in consultation with the Director, Office of 
     Science and the appropriate congressional committees, 
     determines to be consistent with the mission of the Office of 
     Science; and
       (2) the term ``user facility'' means--
       (A) an Office of Science facility at a nonmilitary energy 
     laboratory that provides special scientific and research 
     capabilities, including technical expertise and support as 
     appropriate, to serve the research needs of the Nation's 
     universities, industry, private laboratories, Federal 
     laboratories, and others, including research institutions or 
     individuals from other nations where reciprocal 
     accommodations are provided to United States research 
     institutions and individuals or where the Secretary considers 
     such accommodation to be in the national interest; and
       (B) any other Office of Science funded facility designated 
     by the Secretary as a user facility.

     SEC. 2542. FACILITY AND INFRASTRUCTURE SUPPORT FOR 
                   NONMILITARY ENERGY LABORATORIES.

       (a) Facility Policy.--The Secretary shall develop and 
     implement a least-cost nonmilitary energy laboratory facility 
     and infrastructure strategy for--
       (1) maintaining existing facilities and infrastructure, as 
     needed;
       (2) closing unneeded facilities;
       (3) making facility modifications; and
       (4) building new facilities.
       (b) Plan.--The Secretary shall prepare a comprehensive 10-
     year plan for conducting future facility maintenance, making 
     repairs, modifications, and new additions, and constructing 
     new facilities at each nonmilitary energy laboratory. Such 
     plan shall provide for facilities work in accordance with the 
     following priorities:
       (1) Providing for the safety and health of employees, 
     visitors, and the general public with regard to correcting 
     existing structural, mechanical, electrical, and 
     environmental deficiencies.
       (2) Providing for the repair and rehabilitation of existing 
     facilities to keep them in use and prevent deterioration, if 
     feasible.
       (3) Providing engineering design and construction services 
     for those facilities that require modification or additions 
     in order to meet the needs of new or expanded programs.
       (c) Report.--
       (1) Transmittal.--Within 1 year after the date of the 
     enactment of this Act, the Secretary shall prepare and 
     transmit to the appropriate congressional committees a report 
     containing the plan prepared under subsection (b).
       (2) Contents.--For each nonmilitary energy laboratory, such 
     report shall contain--
       (A) the current priority list of proposed facilities and 
     infrastructure projects, including cost and schedule 
     requirements;
       (B) a current ten-year plan that demonstrates the 
     reconfiguration of its facilities and infrastructure to meet 
     its missions and to address its long-term operational costs 
     and return on investment;
       (C) the total current budget for all facilities and 
     infrastructure funding; and
       (D) the current status of each facilities and 
     infrastructure project compared to the original baseline 
     cost, schedule, and scope.
       (3) Additional elements.--The report shall also--
       (A) include a plan for new facilities and facility 
     modifications at each nonmilitary energy laboratory that will 
     be required to meet the Department's changing missions of the 
     twenty-first century, including schedules and estimates for 
     implementation, and including a section outlining long-term 
     funding requirements consistent with anticipated budgets and 
     annual authorization of appropriations;
       (B) address the coordination of modernization and 
     consolidation of facilities among the nonmilitary energy 
     laboratories in order to meet changing mission requirements; 
     and (C) provide for annual reports to the appropriate 
     congressional committees on accomplishments, conformance to 
     schedules, commitments, and expenditures.

     SEC. 2543. USER FACILITIES.

       (a) Notice Requirement.--When the Department makes a user 
     facility available to universities and other potential users, 
     or seeks input from universities and other potential users 
     regarding significant characteristics or equipment in a user 
     facility or a proposed user facility, the Department shall 
     ensure broad public notice of such availability or such need 
     for input to universities and other potential users.
       (b) Competition Requirement.--When the Department considers 
     the participation of a university or other potential user in 
     the establishment or operation of a user facility, the 
     Department shall employ full and open competition in 
     selecting such a participant.
       (c) Prohibition.--The Department may not redesignate a user 
     facility, as defined by section 2541(b) as something other 
     than a user facility for avoid the requirements of 
     subsections (a) and (b).

            Subtitle D--Advisory Panel on Office of Science

     SEC. 2561. ESTABLISHMENT.

       The Director of the Office of Science and Technology 
     Policy, in consultation with the Secretary, shall establish 
     an Advisory Panel on the Office of Science comprised of 
     knowledgeable individuals to--
       (1) address concerns about the current status and the 
     future of scientific research supported by the Office;
       (2) examine alternatives to the current organizational 
     structure of the Office within the Department, taking into 
     consideration existing structures for the support of 
     scientific research in other Federal agencies and the private 
     sector; and (3) suggest actions to strengthen the scientific 
     research supported by the Office that might be taken jointly 
     by the Department and Congress.

     SEC. 2562. REPORT.

       Within 6 months after the date of the enactment of this 
     Act, the Advisory Panel shall transmit its findings and 
     recommendations in a report to the Director of the Office of 
     Science and Technology Policy and the Secretary. The Director 
     and the Secretary shall jointly--
       (1) consider each of the Panel's findings and 
     recommendations, and comment on each as they consider 
     appropriate; and (2) transmit the Panel's report and the 
     comments of the Director and the Secretary on the report to 
     the appropriate congressional committees within 9 months 
     after the date of the enactment of this Act.

    Subtitle E--Department of Energy Authorization of Appropriations

     SEC. 2581. AUTHORIZATION OF APPROPRIATIONS.

       (a) Operation and Maintenance.--Including the amounts 
     authorized to be appropriated for fiscal year 2002 under 
     section 2505 for Fusion Energy Sciences and under section 
     2522(b) for the Spallation Neutron Source, there are 
     authorized to be appropriated to the Secretary for the Office 
     of Science (also including subtitle C, High Energy Physics, 
     Nuclear Physics, Biological and Environmental Research, Basic 
     Energy Sciences (except for the Spallation Neutron Source), 
     Advanced Scientific Computing Research, Energy Research 
     Analysis, Multiprogram Energy Laboratories-Facilities 
     Support, Facilities and Infrastructure, Safeguards and 
     Security, and Program Direction) operation and maintenance 
     $3,299,558,000 for fiscal year 2002, to remain available 
     until expended.
       (b) Research Regarding Precious Metal Catalysis.--Within 
     the amounts authorized to be appropriated to the Secretary 
     under subsection (a), $5,000,000 for fiscal year 2002 may be 
     used to carry out research in the use of precious metals 
     (excluding platinum, palladium, and rhodium) in catalysis, 
     either directly though national laboratories, or through the 
     award of grants, cooperative agreements, or contracts with 
     public or nonprofit entities.
       (c) Construction.--In addition to the amounts authorized to 
     be appropriated under section 2522(a) for construction of the 
     Spallation Neutron Source, there are authorized to be 
     appropriated to the Secretary for Science--
       (1) $19,400,000 for fiscal year 2002, $14,800,000 for 
     fiscal year 2003, and $8,900,000 for fiscal year 2004 for 
     completion of constuction of Project 98-G-304, Neutrinos at 
     the Main Injector, Fermi National Accelerator Laboratory;
       (2) $11,405,000 for fiscal year 2002 for completion of 
     construction of Project 01-E-300, Laboratory for Comparative 
     and Functional Genomics, Oak Ridge National Laboratory;
       (3) $4,000,000 for fiscal year 2002, $8,000,000 for fiscal 
     year 2003, and $2,000,000 for fiscal year 2004 for completion 
     of construction of Project 02-SC-002, Project Engineering 
     Design (PED), Various Locations;
       (4) $3,183,000 for fiscal year 2002 for completion of 
     construction of Project 02-SC-002, Multiprogram Energy 
     Laboratories Infrastructure Project Engineering Design (PED), 
     Various Locations; and (5) $18,633,000 for fiscal year 2002 
     and $13,029,000 for fiscal year 2003 for completion of 
     construction of Project MEL-001, Multiprogram Energy 
     Laboratories, Infrastructure, Various Locations.
       (d) Limits on Use of Funds.--None of the funds authorized 
     to be appropriated in subsection (c) may be used for 
     construction at any national security laboratory as defined

[[Page S11822]]

     in section 3281(1) of the National Defense Authorization Act 
     for Fiscal Year 2000 (50 U.S.C. 2471(1)) or at any nuclear 
     weapons production facility as defined in section 3281(2) of 
     the National Defense Authorization Act for Fiscal Year 2000 
     (50 U.S.C. 2471(2)).

                        TITLE VI--MISCELLANEOUS

      Subtitle A--General Provisions for the Department of Energy

     SEC. 2601. RESEARCH, DEVELOPMENT, DEMONSTRATION, AND 
                   COMMERCIAL APPLICATION OF ENERGY TECHNOLOGY 
                   PROGRAMS, PROJECTS, AND ACTIVITIES.

       (a) Authorized Activities.--Except as otherwise provided in 
     this division, research, development, demonstration, and 
     commercial application programs, projects, and activities for 
     which appropriations are authorized under this division may 
     be carried out under the procedures of the Federal Nonnuclear 
     Energy Research and Development Act of 1974 (42 U.S.C. 5901 
     et seq.), the Atomic Energy Act of 1954 (42 U.S.C. 2011 et 
     seq.), or any other Act under which the Secretary is 
     authorized to carry out such programs, projects, and 
     activities, but only to the extent the Secretary is 
     authorized to carry out such activities under each such Act.
       (b) Authorized Agreements.--Except as otherwise provided in 
     this division, in carrying out research, development, 
     demonstration, and commercial application programs, projects, 
     and activities for which appropriations are authorized under 
     this division, the Secretary may use, to the extent 
     authorized under applicable provisions of law, contracts, 
     cooperative agreements, cooperative research and development 
     agreements under the Stevenson-Wydler Technology Innovation 
     Act of 1980 (15 U.S.C. 3701 et seq.), grants, joint ventures, 
     and any other form of agreement available to the Secretary.
       (c) Definition.--For purposes of this section, the term 
     ``joint venture'' has the meaning given that term under 
     section 2 of the National Cooperative Research and Production 
     Act of 1993 (15 U.S.C. 4301), except that such term may apply 
     under this section to research, development, demonstration, 
     and commercial application of energy technology joint 
     ventures.
       (d) Protection of Information.--Section 12(c)(7) of the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3710a(c)(7)), relating to the protection of information, 
     shall apply to research, development, demonstration, and 
     commercial application of energy technology programs, 
     projects, and activities for which appropriations are 
     authorized under this division.
       (e) Inventions.--An invention conceived and developed by 
     any person using funds provided through a grant under this 
     division shall be considered a subject invention for the 
     purposes of chapter 18 of title 35, United States Code 
     (commonly referred to as the Bayh-Dole Act).
       (f) Outreach.--The Secretary shall ensure that each program 
     authorized by this division includes an outreach component to 
     provide information, as appropriate, to manufacturers, 
     consumers, engineers, architects, builders, energy service 
     companies, universities, facility planners and managers, 
     State and local governments, and other entities.
       (g) Guidelines and Procedures.--The Secretary shall provide 
     guidelines and procedures for the transition, where 
     appropriate, of energy technologies from research through 
     development and demonstration to commercial application of 
     energy technology. Nothing in this section shall preclude the 
     Secretary from--
       (1) entering into a contract, cooperative agreement, 
     cooperative research and development agreement under the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3701 et seq.), grant, joint venture, or any other form of 
     agreement available to the Secretary under this section that 
     relates to research, development, demonstration, and 
     commercial application of energy technology; or
       (2) extending a contract, cooperative agreement, 
     cooperative research and development agreement under the 
     Stevenson-Wydler Technology Innovation Act of 1980, grant, 
     joint venture, or any other form of agreement available to 
     the Secretary that relates to research, development, and 
     demonstration to cover commercial application of energy 
     technology.
       (h) Application of Section.--This section shall not apply 
     to any contract, cooperative agreement, cooperative research 
     and development agreement under the Stevenson-Wydler 
     Technology Innovation Act of 1980 (15 U.S.C. 3701 et seq.), 
     grant, joint venture, or any other form of agreement 
     available to the Secretary that is in effect as of the date 
     of the enactment of this Act.

     SEC. 2602. LIMITS ON USE OF FUNDS.

       (a) Management of Operating Contracts.--
       (1) Competitive procedure requirement.--None of the funds 
     authorized to be appropriated to the Secretary by this 
     division may be used to award a management and operating 
     contract for a federally owned or operated nonmilitary energy 
     laboratory of the Department unless such contract is awarded 
     using competitive procedures or the Secretary grants, on a 
     case-by-case basis, a waiver to allow for such a deviation. 
     The Secretary may not delegate the authority to grant such a 
     waiver.
       (2) Congressional notice.--At least 2 months before a 
     contract award, amendment, or modification for which the 
     Secretary intends to grant such a waiver, the Secretary shall 
     submit to the appropriate congressional committees a report 
     notifying the committees of the waiver and setting forth the 
     reasons for the waiver.
       (b) Production or Provision of Articles or Services.--None 
     of the funds authorized to be appropriated to the Secretary 
     by this division may be used to produce or provide articles 
     or services for the purpose of selling the articles or 
     services to a person outside the Federal Government, unless 
     the Secretary determines that comparable articles or services 
     are not available from a commercial source in the United 
     States.
       (c) Requests for Proposals.--None of the funds authorized 
     to be appropriated to the Secretary by this division may be 
     used by the Department to prepare or initiate Requests for 
     Proposals for a program if the program has not been 
     authorized by Congress.

     SEC. 2603. COST SHARING.

       (a) Research and Development.--Except as otherwise provided 
     in this division, for research and development programs 
     carried out under this division, the Secretary shall require 
     a commitment from non-Federal sources of at least 20 percent 
     of the cost of the project. The Secretary may reduce or 
     eliminate the non-Federal requirement under this subsection 
     if the Secretary determines that the research and development 
     is of a basic or fundamental nature.
       (b) Demonstration and Commercial Application.--Except as 
     otherwise provided in this division, the Secretary shall 
     require at least 50 percent of the costs directly and 
     specifically related to any demonstration or commercial 
     application project under this division to be provided from 
     non-Federal sources. The Secretary may reduce the non-Federal 
     requirement under this subsection if the Secretary determines 
     that the reduction is necessary and appropriate considering 
     the technological risks involved in the project and is 
     necessary to meet the objectives of this division.
       (c) Calculation of Amount.--In calculating the amount of 
     the non-Federal commitment under subsection (a) or (b), the 
     Secretary may include personnel, services, equipment, and 
     other resources.

     SEC. 2604. LIMITATION ON DEMONSTRATION AND COMMERCIAL 
                   APPLICATION OF ENERGY TECHNOLOGY.

       Except as otherwise provided in this division, the 
     Secretary shall provide funding for scientific or energy 
     demonstration and commercial application of energy technology 
     programs, projects, or activities only for technologies or 
     processes that can be reasonably expected to yield new, 
     measurable benefits to the cost, efficiency, or performance 
     of the technology or process.

     SEC. 2605. REPROGRAMMING.

       (a) Authority.--The Secretary may use amounts appropriated 
     under this division for a program, project, or activity other 
     than the program, project, or activity for which such amounts 
     were appropriated only if--
       (1) the Secretary has transmitted to the appropriate 
     congressional committees a report described in subsection (b) 
     and a period of 30 days has elapsed after such committees 
     receive the report;
       (2) amounts used for the program, project, or activity do 
     not exceed--
       (A) 105 percent of the amount authorized for the program, 
     project, or activity; or
       (B) $250,000 more than the amount authorized for the 
     program, project, or activity, whichever is less; and
       (3) the program, project, or activity has been presented 
     to, or requested of, the Congress by the Secretary.
       (b) Report.--(1) The report referred to in subsection (a) 
     is a report containing a full and complete statement of the 
     action proposed to be taken and the facts and circumstances 
     relied upon in support of the proposed action.
       (2) In the computation of the 30-day period under 
     subsection (a), there shall be excluded any day on which 
     either House of Congress is not in session because of an 
     adjournment of more than 3 days to a day certain.
       (c) Limitations.--(1) In no event may the total amount of 
     funds obligated by the Secretary pursuant to this division 
     exceed the total amount authorized to be appropriated to the 
     Secretary by this division.
       (2) Funds appropriated to the Secretary pursuant to this 
     division may not be used for an item for which Congress has 
     declined to authorize funds.

               Subtitle B--Other Miscellaneous Provisions

     SEC. 2611. NOTICE OF REORGANIZATION.

       The Secretary shall provide notice to the appropriate 
     congressional committees not later than 15 days before any 
     reorganization of any environmental research or development, 
     scientific or energy research, development, or demonstration, 
     or commercial application of energy technology program, 
     project, or activity of the Department.

     SEC. 2612. LIMITS ON GENERAL PLANT PROJECTS.

       If, at any time during the construction of a civilian 
     environmental research and development, scientific or energy 
     research, development, or demonstration, or commercial 
     application of energy technology project of the Department 
     for which no specific funding level is provided by law, the 
     estimated cost (including any revision thereof) of the 
     project exceeds $5,000,000, the Secretary may not continue 
     such construction unless the Secretary has furnished a 
     complete report to the appropriate congressional committees 
     explaining the project and the reasons for the estimate or 
     revision.

[[Page S11823]]

     SEC. 2613. LIMITS ON CONSTRUCTION PROJECTS.

       (a) Limitation.--Except as provided in subsection (b), 
     construction on a civilian environmental research and 
     development, scientific or energy research, development, or 
     demonstration, or commercial application of energy technology 
     project of the Department for which funding has been 
     specifically provided by law may not be started, and 
     additional obligations may not be incurred in connection with 
     the project above the authorized funding amount, whenever the 
     current estimated cost of the construction project exceeds by 
     more than 10 percent the higher of--
       (1) the amount authorized for the project, if the entire 
     project has been funded by the Congress; or
       (2) the amount of the total estimated cost for the project 
     as shown in the most recent budget justification data 
     submitted to Congress.
       (b) Notice.--An action described in subsection (a) may be 
     taken if--
       (1) the Secretary has submitted to the appropriate 
     congressional committees a report on the proposed actions and 
     the circumstances making such actions necessary; and
       (2) a period of 30 days has elapsed after the date on which 
     the report is received by the committees.
       (c) Exclusion.--In the computation of the 30-day period 
     described in subsection (b)(2), there shall be excluded any 
     day on which either House of Congress is not in session 
     because of an adjournment of more than 3 days to a day 
     certain.
       (d) Exception.--Subsections (a) and (b) shall not apply to 
     any construction project that has a current estimated cost of 
     less than $5,000,000.

     SEC. 2614. AUTHORITY FOR CONCEPTUAL AND CONSTRUCTION DESIGN.

       (a) Requirement for Conceptual Design.--(1) Subject to 
     paragraph (2) and except as provided in paragraph (3), before 
     submitting to Congress a request for funds for a construction 
     project that is in support of a civilian environmental 
     research and development, scientific or energy research, 
     development, or demonstration, or commercial application of 
     energy technology program, project, or activity of the 
     Department, the Secretary shall complete a conceptual design 
     for that project.
       (2) If the estimated cost of completing a conceptual design 
     for a construction project exceeds $750,000, the Secretary 
     shall submit to Congress a request for funds for the 
     conceptual design before submitting a request for funds for 
     the construction project.
       (3) The requirement in paragraph (1) does not apply to a 
     request for funds for a construction project, the total 
     estimated cost of which is less than $5,000,000.
       (b) Authority for Construction Design.--(1) The Secretary 
     may carry out construction design (including architectural 
     and engineering services) in connection with any proposed 
     construction project that is in support of a civilian 
     environmental research and development, scientific or energy 
     research, development, and demonstration, or commercial 
     application of energy technology program, project, or 
     activity of the Department if the total estimated cost for 
     such design does not exceed $250,000.
       (2) If the total estimated cost for construction design in 
     connection with any construction project described in 
     paragraph (1) exceeds $250,000, funds for such design must be 
     specifically authorized by law.

     SEC. 2615. NATIONAL ENERGY POLICY DEVELOPMENT GROUP MANDATED 
                   REPORTS.

       (a) The Secretary's Review of Energy Efficiency, Renewable 
     Energy, and Alternative Energy Research and Development.--
     Upon completion of the Secretary's review of current funding 
     and historic performance of the Department's energy 
     efficiency, renewable energy, and alternative energy research 
     and development programs in response to the recommendations 
     of the May 16, 2001, Report of the National Energy Policy 
     Development Group, the Secretary shall transmit a report 
     containing the results of such review to the appropriate 
     congressional committees.
       (b) Review and Recommendations on Using the Nation's Energy 
     Resources More Efficiently.--Upon completion of the Office of 
     Science and Technology Policy and the President's Council of 
     Advisors on Science and Technology reviewing and making 
     recommendations on using the Nation's energy resources more 
     efficiently, in response to the recommendation of the May 16, 
     2001, Report of the National Energy Policy Development Group, 
     the Director of the Office of Science and Technology Policy 
     shall transmit a report containing the results of such review 
     and recommendations to the appropriate congressional 
     committees.

     SEC. 2616. PERIODIC REVIEWS AND ASSESSMENTS.

       The Secretary shall enter into appropriate arrangements 
     with the National Academies of Sciences and Engineering to 
     ensure that there be periodic reviews and assessments of the 
     programs authorized by this division, as well as the 
     measurable cost and performance-based goals for such programs 
     as established under section 2004, and the progress on 
     meeting such goals. Such reviews and assessments shall be 
     conducted at least every 5 years, or more often as the 
     Secretary considers necessary, and the Secretary shall 
     transmit to the appropriate congressional committees reports 
     containing the results of such reviews and assessments.

                               DIVISION D

     SEC. 4101. CAPACITY BUILDING FOR ENERGY-EFFICIENT, AFFORDABLE 
                   HOUSING.

       Section 4(b) of the HUD Demonstration Act of 1993 (42 
     U.S.C. 9816 note) is amended--
       (1) in paragraph (1), by inserting before the semicolon at 
     the end the following: ``, including capabilities regarding 
     the provision of energy efficient, affordable housing and 
     residential energy conservation measures''; and
       (2) in paragraph (2), by inserting before the semicolon the 
     following: ``, including such activities relating to the 
     provision of energy efficient, affordable housing and 
     residential energy conservation measures that benefit low-
     income families''.

     SEC. 4102. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY 
                   CONSERVATION AND EFFICIENCY ACTIVITIES.

       Section 105(a)(8) of the Housing and Community Development 
     Act of 1974 (42 U.S.C. 5305(a)(8)) is amended--
       (1) by inserting ``or efficiency'' after ``energy 
     conservation'';
       (2) by striking ``, and except that'' and inserting ``; 
     except that''; and
       (3) by inserting before the period at the end the 
     following: ``; and except that each percentage limitation 
     under this paragraph on the amount of assistance provided 
     under this title that may be used for the provision of public 
     services is hereby increased by 10 percent, but such 
     percentage increase may be used only for the provision of 
     public services concerning energy conservation or 
     efficiency''.

     SEC. 4103. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY 
                   EFFICIENT HOUSING.

       (a) Single Family Housing Mortgage Insurance.--Section 
     203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) 
     is amended, in the first undesignated paragraph beginning 
     after subparagraph (B)(iii) (relating to solar energy 
     systems)--
       (1) by inserting ``or paragraph (10)''; and
       (2) by striking ``20 percent'' and inserting ``30 
     percent''.
       (b) Multifamily Housing Mortgage Insurance.--Section 207(c) 
     of the National Housing Act (12 U.S.C. 1713(c)) is amended, 
     in the second undesignated paragraph beginning after 
     paragraph (3) (relating to solar energy systems and 
     residential energy conservation measures), by striking ``20 
     percent'' and inserting ``30 percent''.
       (c) Cooperative Housing Mortgage Insurance.--Section 213(p) 
     of the National Housing Act (12 U.S.C. 1715e(p)) is amended 
     by striking ``20 per centum'' and inserting ``30 percent''.
       (d) Rehabilitation and Neighborhood Conservation Housing 
     Mortgage Insurance.--Section 220(d)(3)(B)(iii) of the 
     National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)) is 
     amended by striking ``20 per centum'' and inserting ``30 
     percent''.
       (e) Low-Income Multifamily Housing Mortgage Insurance.--
     Section 221(k) of the National Housing Act (12 U.S.C. 
     1715l(k)) is amended by striking ``20 per centum'' and 
     inserting ``30 percent''.
       (f) Elderly Housing Mortgage Insurance.--The proviso at the 
     end of section 213(c)(2) of the National Housing Act (12 
     U.S.C. 1715v(c)(2)) is amended by striking ``20 per centum'' 
     and inserting ``30 percent''.
       (g) Condominium Housing Mortgage Insurance.--Section 234(j) 
     of the National Housing Act (12 U.S.C. 1715y(j)) is amended 
     by striking ``20 per centum'' and inserting ``30 percent''.

     SEC. 4104. PUBLIC HOUSING CAPITAL FUND.

       Section 9(d)(1) of the United States Housing Act of 1937 
     (42 U.S.C. 1437g(d)(1)) is amended--
       (1) in subparagraph (I), by striking ``and'' at the end;
       (2) in subparagraph (K), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(L) improvement of energy and water-use efficiency by 
     installing fixtures and fittings that conform to the American 
     Society of Mechanical Engineers/American National Standards 
     Institute standards A112.19.2-1998 and A112.18.1-2000, or any 
     revision thereto, applicable at the time of installation, and 
     by increasing energy efficiency and water conservation by 
     such other means as the Secretary determines are 
     appropriate.''.

     SEC. 4105. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR 
                   ASSISTED HOUSING.

       Section 251(b)(1) of the National Energy Conservation 
     Policy Act (42 U.S.C. 8231(1)) is amended--
       (1) by striking ``financed with loans'' and inserting 
     ``assisted'';
       (2) by inserting after ``1959,'' the following: ``which are 
     eligible multifamily housing projects (as such term is 
     defined in section 512 of the Multifamily Assisted Housing 
     Reform and Affordability Act of 1997 (42 U.S.C. 1437f note)) 
     and are subject to a mortgage restructuring and rental 
     assistance sufficiency plans under such Act,''; and
       (3) by inserting after the period at the end of the first 
     sentence the following new sentence: ``Such improvements may 
     also include the installation of energy and water conserving 
     fixtures and fittings that conform to the American Society of 
     Mechanical Engineers/American National Standards Institute 
     standards A112.19.2-1998 and A112.18.1-2000, or any revision 
     thereto, applicable at the time of installation.''.

[[Page S11824]]

     SEC. 4106. NORTH AMERICAN DEVELOPMENT BANK.

       Part 2 of subtitle D of title V of the North American Free 
     Trade Agreement Implementation Act (22 U.S.C. 290m-290m-3) is 
     amended by adding at the end the following:

     ``SEC. 545. SUPPORT FOR CERTAIN ENERGY POLICIES.

       ``Consistent with the focus of the Bank's Charter on 
     environmental infrastructure projects, the Board members 
     representing the United States should use their voice and 
     vote to encourage the Bank to finance projects related to 
     clean and efficient energy, including energy conservation, 
     that prevent, control, or reduce environmental pollutants or 
     contaminants.''.

                               DIVISION E

     SEC. 5000. SHORT TITLE.

       This division may be cited as the ``Clean Coal Power 
     Initiative Act of 2001''.

     SEC. 5001. FINDINGS.

       Congress finds that--
       (1) reliable, affordable, increasingly clean electricity 
     will continue to power the growing United States economy;
       (2) an increasing use of electro-technologies, the desire 
     for continuous environmental improvement, a more competitive 
     electricity market, and concerns about rising energy prices 
     add importance to the need for reliable, affordable, 
     increasingly clean electricity;
       (3) coal, which, as of the date of the enactment of this 
     Act, accounts for more than \1/2\ of all electricity 
     generated in the United States, is the most abundant fossil 
     energy resource of the United States;
       (4) coal comprises more than 85 percent of all fossil 
     resources in the United States and exists in quantities 
     sufficient to supply the United States for 250 years at 
     current usage rates;
       (5) investments in electricity generating facility 
     emissions control technology over the past 30 years have 
     reduced the aggregate emissions of pollutants from coal-based 
     generating facilities by 21 percent, even as coal use for 
     electricity generation has nearly tripled;
       (6) continuous improvement in efficiency and environmental 
     performance from electricity generating facilities would 
     allow continued use of coal and preserve less abundant energy 
     resources for other energy uses;
       (7) new ways to convert coal into electricity can 
     effectively eliminate health-threatening emissions and 
     improve efficiency by as much as 50 percent, but initial 
     deployment of new coal generation methods and equipment 
     entails significant risk that generators may be unable to 
     accept in a newly competitive electricity market; and
       (8) continued environmental improvement in coal-based 
     generation and increasing the production and supply of power 
     generation facilities with less air emissions, with the 
     ultimate goal of near-zero emissions, is important and 
     desirable.

     SEC. 5002. DEFINITIONS.

       In this division:
       (1) Cost and performance goals.--The term ``cost and 
     performance goals'' means the cost and performance goals 
     established under section 5004.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.

     SEC. 5003. CLEAN COAL POWER INITIATIVE.

       (a) In General.--The Secretary shall carry out a program 
     under--
       (1) this division;
       (2) the Federal Nonnuclear Energy Research and Development 
     Act of 1974 (42 U.S.C. 5901 et seq.);
       (3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801 
     et seq.); and
       (4) title XIII of the Energy Policy Act of 1992 (42 U.S.C. 
     13331 et seq.), to achieve cost and performance goals 
     established by the Secretary under section 5004.

     SEC. 5004. COST AND PERFORMANCE GOALS.

       (a) Review and Assessment.--The Secretary shall perform an 
     assessment that establishes measurable cost and performance 
     goals for 2005, 2010, 2015, and 2020 for the programs 
     authorized by this division. Such assessment shall be based 
     on the latest scientific, economic, and technical knowledge.
       (b) Consultation.--In establishing the cost and performance 
     goals, the Secretary shall consult with representatives of--
       (1) the United States coal industry;
       (2) State coal development agencies;
       (3) the electric utility industry;
       (4) railroads and other transportation industries;
       (5) manufacturers of advanced coal-based equipment;
       (6) institutions of higher learning, national laboratories, 
     and professional and technical societies;
       (7) organizations representing workers;
       (8) organizations formed to--
       (A) promote the use of coal;
       (B) further the goals of environmental protection; and
       (C) promote the production and generation of coal-based 
     power from advanced facilities; and
       (9) other appropriate Federal and State agencies.
       (c) Timing.--The Secretary shall--
       (1) not later than 120 days after the date of the enactment 
     of this Act, issue a set of draft cost and performance goals 
     for public comment; and
       (2) not later than 180 days after the date of the enactment 
     of this Act, after taking into consideration any public 
     comments received, submit to the Committee on Energy and 
     Commerce and the Committee on Science of the House of 
     Representatives, and to the Senate, the final cost and 
     performance goals.

     SEC. 5005. AUTHORIZATION OF APPROPRIATIONS.

       (a) Clean Coal Power Initiative.--Except as provided in 
     subsection (b), there are authorized to be appropriated to 
     the Secretary to carry out the Clean Coal Power Initiative 
     under section 5003 $200,000,000 for each of the fiscal years 
     2002 through 2011, to remain available until expended.
       (b) Limit on Use of Funds.-- Notwithstanding subsection 
     (a), no funds may be used to carry out the activities 
     authorized by this Act after September 30, 2002, unless the 
     Secretary has transmitted to the Committee on Energy and 
     Commerce and the Committee on Science of the House of 
     Representatives, and to the Senate, the report required by 
     this subsection and 1 month has elapsed since that 
     transmission. The report shall include, with respect to 
     subsection (a), a 10-year plan containing--
       (1) a detailed assessment of whether the aggregate funding 
     levels provided under subsection (a) are the appropriate 
     funding levels for that program;
       (2) a detailed description of how proposals will be 
     solicited and evaluated, including a list of all activities 
     expected to be undertaken;
       (3) a detailed list of technical milestones for each coal 
     and related technology that will be pursued;
       (4) recommendations for a mechanism for recoupment of 
     Federal funding for successful commercial projects; and
       (5) a detailed description of how the program will avoid 
     problems enumerated in General Accounting Office reports on 
     the Clean Coal Technology Program, including problems that 
     have resulted in unspent funds and projects that failed 
     either financially or scientifically.
       (c) Applicability.--Subsection (b) shall not apply to any 
     project begun before September 30, 2002.

     SEC. 5006. PROJECT CRITERIA.

       (a) In General.--The Secretary shall not provide funding 
     under this division for any project that does not advance 
     efficiency, environmental performance, and cost 
     competitiveness well beyond the level of technologies that 
     are in operation or have been demonstrated as of the date of 
     the enactment of this Act.
       (b) Technical Criteria for Clean Coal Power Initiative.--
       (1) Gasification.--(A) In allocating the funds authorized 
     under section 5005(a), the Secretary shall ensure that at 
     least 80 percent of the funds are used only for projects on 
     coal-based gasification technologies, including gasification 
     combined cycle, gasification fuel cells, gasification 
     coproduction and hybrid gasification/combustion.
       (B) The Secretary shall set technical milestones specifying 
     emissions levels that coal gasification projects must be 
     designed to and reasonably expected to achieve. The 
     milestones shall get more restrictive through the life of the 
     program. The milestones shall be designed to achieve by 2020 
     coal gasification projects able--
       (i) to remove 99 percent of sulfur dioxide;
       (ii) to emit no more than .05 lbs of NOX per 
     million BTU;
       (iii) to achieve substantial reductions in mercury 
     emissions; and
       (iv) to achieve a thermal efficiency of 60 percent (higher 
     heating value).
       (2) Other projects.--For projects not described in 
     paragraph (1), the Secretary shall set technical milestones 
     specifying emissions levels that the projects must be 
     designed to and reasonably expected to achieve. The 
     milestones shall get more restrictive through the life of the 
     program. The milestones shall be designed to achieve by 2010 
     projects able--
       (A) to remove 97 percent of sulfur dioxide;
       (B) to emit no more than .08 lbs of NOX per 
     million BTU;
       (C) to achieve substantial reductions in mercury emissions; 
     and
       (D) to achieve a thermal efficiency of 45 percent (higher 
     heating value).
       (c) Financial Criteria.--The Secretary shall not provide a 
     funding award under this division unless the recipient has 
     documented to the satisfaction of the Secretary that--
       (1) the award recipient is financially viable without the 
     receipt of additional Federal funding;
       (2) the recipient will provide sufficient information to 
     the Secretary for the Secretary to ensure that the award 
     funds are spent efficiently and effectively; and
       (3) a market exists for the technology being demonstrated 
     or applied, as evidenced by statements of interest in writing 
     from potential purchasers of the technology.
       (d) Financial Assistance.--The Secretary shall provide 
     financial assistance to projects that meet the requirements 
     of subsections (a), (b), and (c) and are likely to--
       (1) achieve overall cost reductions in the utilization of 
     coal to generate useful forms of energy;
       (2) improve the competitiveness of coal among various forms 
     of energy in order to maintain a diversity of fuel choices in 
     the United States to meet electricity generation 
     requirements; and
       (3) demonstrate methods and equipment that are applicable 
     to 25 percent of the electricity generating facilities that 
     use coal as the primary feedstock as of the date of the 
     enactment of this Act.
       (e) Federal Share.--The Federal share of the cost of a coal 
     or related technology

[[Page S11825]]

     project funded by the Secretary shall not exceed 50 percent.
       (f) Applicability.--Neither the use of any particular 
     technology, nor the achievement of any emission reduction, by 
     any facility receiving assistance under this title shall be 
     taken into account for purposes of making any determination 
     under the Clean Air Act in applying the provisions of that 
     Act to a facility not receiving assistance under this title, 
     including any determination concerning new source performance 
     standards, lowest achievable emission rate, best available 
     control technology, or any other standard, requirement, or 
     limitation.

     SEC. 5007. STUDY.

       (a) In General.--Not later than 1 year after the date of 
     the enactment of this Act, and once every 2 years thereafter 
     through 2016, the Secretary, in cooperation with other 
     appropriate Federal agencies, shall transmit to the Committee 
     on Energy and Commerce and the Committee on Science of the 
     House of Representatives, and to the Senate, a report 
     containing the results of a study to--
       (1) identify efforts (and the costs and periods of time 
     associated with those efforts) that, by themselves or in 
     combination with other efforts, may be capable of achieving 
     the cost and performance goals;
       (2) develop recommendations for the Department of Energy to 
     promote the efforts identified under paragraph (1); and
       (3) develop recommendations for additional authorities 
     required to achieve the cost and performance goals.
       (b) Expert Advice.--In carrying out this section, the 
     Secretary shall give due weight to the expert advice of 
     representatives of the entities described in section 5004(b).

     SEC. 5008. CLEAN COAL CENTERS OF EXCELLENCE.

       As part of the program authorized in section 5003, the 
     Secretary shall award competitive, merit-based grants to 
     universities for the establishment of Centers of Excellence 
     for Energy Systems of the Future. The Secretary shall provide 
     grants to universities that can show the greatest potential 
     for advancing new clean coal technologies.

                               DIVISION F

     SEC. 6001. SHORT TITLE.

       This division may be cited as the ``Energy Security Act''.

      TITLE I--GENERAL PROTECTIONS FOR ENERGY SUPPLY AND SECURITY

     SEC. 6101. STUDY OF EXISTING RIGHTS-OF-WAY ON FEDERAL LANDS 
                   TO DETERMINE CAPABILITY TO SUPPORT NEW 
                   PIPELINES OR OTHER TRANSMISSION FACILITIES.

       (a) In General.--Within 1 year after the date of the 
     enactment of this Act, the head of each Federal agency that 
     has authorized a right-of-way across Federal lands for 
     transportation of energy supplies or transmission of 
     electricity shall review each such right-of-way and submit a 
     report to the Secretary of Energy and the Chairman of the 
     Federal Energy Regulatory Commission regarding--
       (1) whether the right-of-way can be used to support new or 
     additional capacity; and
       (2) what modifications or other changes, if any, would be 
     necessary to accommodate such additional capacity.
       (b) Consultations and Considerations.--In performing the 
     review, the head of each agency shall--
       (1) consult with agencies of State, tribal, or local units 
     of government as appropriate; and
       (2) consider whether safety or other concerns related to 
     current uses might preclude the availability of a right-of-
     way for additional or new transportation or transmission 
     facilities, and set forth those considerations in the report.

     SEC. 6102. INVENTORY OF ENERGY PRODUCTION POTENTIAL OF ALL 
                   FEDERAL PUBLIC LANDS.

       (a) Inventory Requirement.--The Secretary of the Interior, 
     in consultation with the Secretary of Agriculture and the 
     Secretary of Energy, shall conduct an inventory of the energy 
     production potential of all Federal public lands other than 
     national park lands and lands in any wilderness area, with 
     respect to wind, solar, coal, and geothermal power 
     production.
       (b) Limitations.--
       (1) In general.--The Secretary shall not include in the 
     inventory under this section the matters to be identified in 
     the inventory under section 604 of the Energy Act of 2000 (43 
     U.S.C. 6217).
       (2) Wind and solar power.--The inventory under this 
     section--
       (A) with respect to wind power production shall be limited 
     to sites having a mean average wind speed--
       (i) exceeding 12.5 miles per hour at a height of 33 feet; 
     and
       (ii) exceeding 15.7 miles per hour at a height of 164 feet; 
     and (B) with respect to solar power production shall be 
     limited to areas rated as receiving 450 watts per square 
     meter or greater.
       (c) Examination of Restrictions and Impediments.--The 
     inventory shall identify the extent and nature of any 
     restrictions or impediments to the development of such energy 
     production potential.
       (d) Geothermal Power.--The inventory shall include an 
     update of the 1978 Assessment of Geothermal Resources by the 
     United States Geological Survey.
       (e) Completion and Updating.--The Secretary--
       (1) shall complete the inventory by not later than 2 years 
     after the date of the enactment of this Act; and
       (2) shall update the inventory regularly thereafter.
       (f) Reports.--The Secretary shall submit to the Committee 
     on Resources of the House of Representatives and to the 
     Committee on Energy and Natural Resources of the Senate and 
     make publicly available--
       (1) a report containing the inventory under this section, 
     by not later than 2 years after the effective date of this 
     section; and
       (2) each update of such inventory.

     SEC. 6103. REVIEW OF REGULATIONS TO ELIMINATE BARRIERS TO 
                   EMERGING ENERGY TECHNOLOGY.

       (a) In General.--Each Federal agency shall carry out a 
     review of its regulations and standards to determine those 
     that act as a barrier to market entry for emerging energy-
     efficient technologies, including fuel cells, combined heat 
     and power, and distributed generation (including small-scale 
     renewable energy).
       (b) Report to Congress.--No later than 18 months after date 
     of the enactment of this Act, each agency shall provide a 
     report to the Congress and the President detailing all 
     regulatory barriers to emerging energy-efficient 
     technologies, along with actions the agency intends to take, 
     or has taken, to remove such barriers.
       (c) Periodic Review.--Each agency shall subsequently review 
     its regulations and standards in this manner no less 
     frequently than every 5 years, and report their findings to 
     the Congress and the President. Such reviews shall include a 
     detailed analysis of all agency actions taken to remove 
     existing barriers to emerging energy technologies.

     SEC. 6104. INTERAGENCY AGREEMENT ON ENVIRONMENTAL REVIEW OF 
                   INTERSTATE NATURAL GAS PIPELINE PROJECTS.

       (a) In General.--The Secretary of Energy, in coordination 
     with the Federal Energy Regulatory Commission, shall 
     establish an administrative interagency task force to develop 
     an interagency agreement to expedite and facilitate the 
     environmental review and permitting of interstate natural gas 
     pipeline projects.
       (b) Task Force Members.--The task force shall include a 
     representative of each of the Bureau of Land Management, the 
     United States Fish and Wildlife Service, the Army Corps of 
     Engineers, the Forest Service, the Environmental Protection 
     Agency, the Advisory Council on Historic Preservation, and 
     such other agencies as the Secretary of Energy and the 
     Federal Energy Regulatory Commission consider appropriate.
       (c) Terms of Agreement.--The interagency agreement shall 
     require that agencies complete their review of interstate 
     pipeline projects within a specific period of time after 
     referral of the matter by the Federal Energy Regulatory 
     Commission.
       (d) Submittal of Agreement.--The Secretary of Energy shall 
     submit a final interagency agreement under this section to 
     the Congress by not later than 6 months after the effective 
     date of this section.

     SEC. 6105. ENHANCING ENERGY EFFICIENCY IN MANAGEMENT OF 
                   FEDERAL LANDS.

       (a) Sense of the Congress.--It is the sense of Congress 
     that Federal land managing agencies should enhance the use of 
     energy efficient technologies in the management of natural 
     resources.
       (b) Energy Efficient Buildings.--To the extent economically 
     practicable, the Secretary of the Interior and the Secretary 
     of Agriculture shall seek to incorporate energy efficient 
     technologies in public and administrative buildings 
     associated with management of the National Park System, 
     National Wildlife Refuge System, National Forest System, and 
     other public lands and resources managed by such Secretaries.
       (c) Energy Efficient Vehicles.--To the extent economically 
     practicable, the Secretary of the Interior and the Secretary 
     of Agriculture shall seek to use energy efficient motor 
     vehicles, including vehicles equipped with biodiesel or 
     hybrid engine technologies, in the management of the 
     National Park System, National Wildlife Refuge System, and 
     other public lands and managed by the Secretaries.

     SEC. 6106. EFFICIENT INFRASTRUCTURE DEVELOPMENT.

       (a) In General.--The Secretary of Energy and the Chairman 
     of the Federal Energy Regulatory Commission shall jointly 
     undertake a study of the location and extent of anticipated 
     demand growth for natural gas consumption in the Western 
     States, herein defined as the area covered by the Western 
     System Coordinating Council.
       (b) Contents.--The study under subsection (a) shall include 
     the following:
       (1) A review of natural gas demand forecasts by Western 
     State officials, such as the California Energy Commission and 
     the California Public Utilities Commission, which indicate 
     the forecasted levels of demand for natural gas and the 
     geographic distribution of that forecasted demand.
       (2) A review of the locations of proposed new natural gas-
     fired electric generation facilities currently in the 
     approval process in the Western States, and their forecasted 
     impact on natural gas demand.
       (3) A review of the locations of existing interstate 
     natural gas transmission pipelines, and interstate natural 
     gas pipelines currently in the planning stage or approval 
     process, throughout the Western States.
       (4) A review of the locations and capacity of intrastate 
     natural gas pipelines in the Western States.
       (5) Recommendations for the coordination of the development 
     of the natural gas infrastructure indicated in paragraphs (1) 
     through (4).

[[Page S11826]]

       (c) Report.--The Secretary shall report the findings and 
     recommendations resulting from the study required by this 
     section to the Committee on Energy and Commerce of the House 
     of Representatives and to the Committee on Energy and Natural 
     Resources of the Senate no later than 6 months after the date 
     of the enactment of this Act. The Chairman of the Federal 
     Energy Regulatory Commission shall report on how the 
     Commission will factor these results into its review of 
     applications of interstate pipelines within the Western 
     States to the Committee on Energy and Commerce of the House 
     of Representatives and to the Committee on Energy and Natural 
     Resources of the Senate no later than 6 months after the date 
     of the enactment of this Act.

                   TITLE II--OIL AND GAS DEVELOPMENT

                    Subtitle A--Offshore Oil and Gas

     SEC. 6201. SHORT TITLE.

       This subtitle may be referred to as the ``Royalty Relief 
     Extension Act of 2001''.

     SEC. 6202. LEASE SALES IN WESTERN AND CENTRAL PLANNING AREA 
                   OF THE GULF OF MEXICO.

       (a) In General.--For all tracts located in water depths of 
     greater than 200 meters in the Western and Central Planning 
     Area of the Gulf of Mexico, including that 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 occurring within 2 years after 
     the date of the enactment of this Act shall use the bidding 
     system authorized in section 8(a)(1)(H) of the Outer 
     Continental Shelf Lands Act (30 U.S.C. 1337(a)(1)(H)), except 
     that the suspension of royalties shall be set at a volume of 
     not less than the following:
       (1) 5 million barrels of oil equivalent for each lease in 
     water depths of 400 to 800 meters.
       (2) 9 million barrels of oil equivalent for each lease in 
     water depths of 800 to 1,600 meters.
       (3) 12 million barrels of oil equivalent for each lease in 
     water depths greater than 1,600 meters.
       (b) Relationship to Existing Authority.--Except as 
     expressly provided in this section, nothing in this section 
     is intended to limit the authority of the Secretary of the 
     Interior under the Outer Continental Shelf Lands Act (43 
     U.S.C. 1301 et seq.) to provide royalty suspension.

     SEC. 6203. SAVINGS CLAUSE.

       Nothing in this subtitle shall be construed to affect any 
     offshore pre-leasing, leasing, or development moratorium, 
     including any moratorium applicable to the Eastern Planning 
     Area of the Gulf of Mexico located off the Gulf Coast of 
     Florida.

     SEC. 6204. ANALYSIS OF GULF OF MEXICO FIELD SIZE 
                   DISTRIBUTION, INTERNATIONAL COMPETITIVENESS, 
                   AND INCENTIVES FOR DEVELOPMENT.

       (a) In General.--The Secretary of the Interior and the 
     Secretary of Energy shall enter into appropriate arrangements 
     with the National Academy of Sciences to commission the 
     Academy to perform the following:
       (1) Conduct an analysis and review of existing Gulf of 
     Mexico oil and natural gas resource assessments, including--
       (A) analysis and review of assessments recently performed 
     by the Minerals Management Service, the 1999 National 
     Petroleum Council Gas Study, the Department of Energy's 
     Offshore Marginal Property Study, and the Advanced Resources 
     International, Inc. Deepwater Gulf of Mexico model; and
       (B) evaluation and comparison of the accuracy of 
     assumptions of the existing assessments with respect to 
     resource field size distribution, hydrocarbon potential, and 
     scenarios for leasing, exploration, and development.
       (2) Evaluate the lease terms and conditions offered by the 
     Minerals Management Service for Lease Sale 178, and compare 
     the financial incentives offered by such terms and conditions 
     to financial incentives offered by the terms and conditions 
     that apply under leases for other offshore areas that are 
     competing for the same limited offshore oil and gas 
     exploration and development capital, including offshore areas 
     of West Africa and Brazil.
       (3) Recommend what level of incentives for all water depths 
     are appropriate in order to ensure that the United States 
     optimizes the domestic supply of oil and natural gas from the 
     offshore areas of the Gulf of Mexico that are not subject to 
     current leasing moratoria. Recommendations under this 
     paragraph should be made in the context of the importance of 
     the oil and natural gas resources of the Gulf of Mexico to 
     the future energy and economic needs of the United States.
       (b) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the Secretary of the Interior shall 
     submit a report to the Committee on Resources in the House of 
     Representatives and the Committee on Energy and Natural 
     Resources in the Senate, summarizing the findings of the 
     National Academy of Sciences pursuant to subsection (a) and 
     providing recommendations of the Secretary for new policies 
     or other actions that could help to further increase oil and 
     natural gas production from the Gulf of Mexico.

       Subtitle B--Improvements to Federal Oil and Gas Management

     SEC. 6221. SHORT TITLE.

       This subtitle may be cited as the ``Federal Oil and Gas 
     Lease Management Improvement Demonstration Program Act of 
     2001''.

     SEC. 6222. STUDY OF IMPEDIMENTS TO EFFICIENT LEASE 
                   OPERATIONS.

       (a) In General.--The Secretary of the Interior and the 
     Secretary of Agriculture shall jointly undertake a study of 
     the impediments to efficient oil and gas leasing and 
     operations on Federal onshore lands in order to identify 
     means by which unnecessary impediments to the expeditious 
     exploration and production of oil and natural gas on such 
     lands can be removed.
       (b) Contents.--The study under subsection (a) shall include 
     the following:
       (1) A review of the process by which Federal land managers 
     accept or reject an offer to lease, including the timeframes 
     in which such offers are acted upon, the reasons for any 
     delays in acting upon such offers, and any recommendations 
     for expediting the response to such offers.
       (2) A review of the approval process for applications for 
     permits to drill, including the timeframes in which such 
     applications are approved, the impact of compliance with 
     other Federal laws on such timeframes, any other reasons for 
     delays in making such approvals, and any recommendations for 
     expediting such approvals.
       (3) A review of the approval process for surface use plans 
     of operation, including the timeframes in which such 
     applications are approved, the impact of compliance with 
     other Federal laws on such timeframes, any other reasons for 
     delays in making such approvals, and any recommendations for 
     expediting such approvals.
       (4) A review of the process for administrative appeal of 
     decisions or orders of officers or employees of the Bureau of 
     Land Management with respect to a Federal oil or gas lease, 
     including the timeframes in which such appeals are heard and 
     decided, any reasons for delays in hearing or deciding such 
     appeals, and any recommendations for expediting the appeals 
     process.
       (c) Report.--The Secretaries shall report the findings and 
     recommendations resulting from the study required by this 
     section to the Committee on Resources of the House of 
     Representatives and to the Committee on Energy and Natural 
     Resources of the Senate no later than 6 months after the date 
     of the enactment of this Act.

     SEC. 6223. ELIMINATION OF UNWARRANTED DENIALS AND STAYS.

       (a) In General.--The Secretary shall ensure that 
     unwarranted denials and stays of lease issuance and 
     unwarranted restrictions on lease operations are eliminated 
     from the administration of oil and natural gas leasing on 
     Federal land.
       (b) Preparation of Leasing Plan or Analysis.--In preparing 
     a management plan or leasing analysis for oil or natural gas 
     leasing on Federal lands administered by the Bureau of Land 
     Management or the Forest Service, the Secretary concerned 
     shall--
       (1) identify and review the restrictions on surface use and 
     operations imposed under the laws (including regulations) of 
     the State in which the lands are located;
       (2) consult with the appropriate State agency regarding the 
     reasons for the State restrictions identified under paragraph 
     (1);
       (3) identify any differences between the State restrictions 
     identified under paragraph (1) and any restrictions on 
     surface use and operations that would apply under the lease; 
     and
       (4) prepare and provide upon request a written explanation 
     of such differences.
       (c) Rejection of Offer To Lease.--
       (1) In general.--If the Secretary rejects an offer to lease 
     Federal lands for oil or natural gas development on the 
     ground that the land is unavailable for oil and natural gas 
     leasing, the Secretary shall provide a written, detailed 
     explanation of the reasons the land is unavailable for 
     leasing.
       (2) Previous resource management decision.--If the 
     determination of unavailability is based on a previous 
     resource management decision, the explanation shall include a 
     careful assessment of whether the reasons underlying the 
     previous decision are still persuasive.
       (3) Segregation of available land from unavailable land.--
     The Secretary may not reject an offer to lease Federal land 
     for oil and natural gas development that is available for 
     such leasing on the ground that the offer includes land 
     unavailable for leasing. The Secretary shall segregate 
     available land from unavailable land, on the offeror's 
     request following notice by the Secretary, before acting on 
     the offer to lease.
       (d) Disapproval or Required Modification of Surface Use 
     Plans of Operations and Application for Permit To Drill.--The 
     Secretary shall provide a written, detailed explanation of 
     the reasons for disapproving or requiring modifications of 
     any surface use plan of operations or application for permit 
     to drill with respect to oil or natural gas development on 
     Federal lands.
       (e) Preservation of Federal Authority.--Nothing in this 
     section or in any identification, review, or explanation 
     prepared under this section shall be construed--
       (1) to limit the authority of the Federal Government to 
     impose lease stipulations, restrictions, requirements, or 
     other terms that are different than those that apply under 
     State law; or
       (2) to affect the procedures that apply to judicial review 
     of actions taken under this subsection.

     SEC. 6224. LIMITATION ON COST RECOVERY FOR APPLICATIONS.

       Notwithstanding sections 304 and 504 of the Federal Land 
     Policy and Management Act of

[[Page S11827]]

     1976 (43 U.S.C. 1734, 1764) and section 9701 of title 31, 
     United States Code, the Secretary shall not recover the 
     Secretary's costs with respect to applications and other 
     documents relating to oil and gas leases.

     SEC. 6225. CONSULTATION WITH SECRETARY OF AGRICULTURE.

       Section 17(h) of the Mineral Leasing Act (30 U.S.C. 226(h)) 
     is amended to read as follows:
       ``(h)(1) In issuing any lease on National Forest System 
     lands reserved from the public domain, the Secretary of the 
     Interior shall consult with the Secretary of Agriculture in 
     determining stipulations on surface use under the lease.
       ``(2)(A) A lease on lands referred to in paragraph (1) may 
     not be issued if the Secretary of Agriculture determines, 
     after consultation under paragraph (1) and consultation with 
     the Regional Forester having administrative jurisdiction over 
     the National Forest System Lands concerned, that the terms 
     and conditions of the lease, including any prohibition on 
     surface occupancy for lease operations, will not be 
     sufficient to adequately protect such lands under the 
     National Forest Management Act of 1976 (16 U.S.C. 1600 et 
     seq.).
       ``(B) The authority of the Secretary of Agriculture under 
     this paragraph may be delegated only to the Undersecretary of 
     Agriculture for Natural Resources and Environment.
       ``(3) The Secretary of Agriculture shall include in the 
     record of decision for a determination under paragraph 
     (2)(A)--
       ``(A) any written statement regarding the determination 
     that is prepared by a Regional Forester consulted by the 
     Secretary under paragraph (2)(A) regarding the determination; 
     or
       ``(B) an explanation why such a statement by the Regional 
     Forester is not included.

                       Subtitle C--Miscellaneous

     SEC. 6231. OFFSHORE SUBSALT DEVELOPMENT.

       Section 5 of the Outer Continental Shelf Lands Act of 1953 
     (43 U.S.C. 1334) is amended by adding at the end the 
     following:
       ``(k) Suspension of Operations for Subsalt Exploration.--
     Notwithstanding any other provision of law or regulation, to 
     prevent waste caused by the drilling of unnecessary wells and 
     to facilitate the discovery of additional hydrocarbon 
     reserves, the Secretary may grant a request for a suspension 
     of operations under any lease to allow the reprocessing and 
     reinterpretation of geophysical data to identify and define 
     drilling objectives beneath allochthonous salt sheets.''.

     SEC. 6232. PROGRAM ON OIL AND GAS ROYALTIES IN KIND.

       (a) Applicability of Section.--Notwithstanding any other 
     provision of law, the provisions of this section shall apply 
     to all royalty in kind accepted by the Secretary of the 
     Interior under any Federal oil or gas lease or permit under 
     section 36 of the Mineral Leasing Act (30 U.S.C. 192), 
     section 27 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1353), or any other mineral leasing law, in the period 
     beginning on the date of the enactment of this Act through 
     September 30, 2006.
       (b) Terms and Conditions.--All royalty accruing to the 
     United States under any Federal oil or gas lease or permit 
     under the Mineral Leasing Act (30 U.S.C. 181 et seq.) or the 
     Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) 
     shall, on the demand of the Secretary of the Interior, be 
     paid in oil or gas. If the Secretary of the Interior makes 
     such a demand, the following provisions apply to such 
     payment:
       (1) Delivery by, or on behalf of, the lessee of the royalty 
     amount and quality due under the lease satisfies the lessee's 
     royalty obligation for the amount delivered, except that 
     transportation and processing reimbursements paid to, or 
     deductions claimed by, the lessee shall be subject to review 
     and audit.
       (2) Royalty production shall be placed in marketable 
     condition by the lessee at no cost to the United States.
       (3) The Secretary of the Interior may--
       (A) sell or otherwise dispose of any royalty oil or gas 
     taken in kind (other than oil or gas taken under section 
     27(a)(3) of the Outer Continental Shelf Lands Act (43 U.S.C. 
     1353(a)(3)) for not less than the market price; and
       (B) transport or process any oil or gas royalty taken in 
     kind.
       (4) The Secretary of the Interior may, notwithstanding 
     section 3302 of title 31, United States Code, retain and use 
     a portion of the revenues from the sale of oil and gas 
     royalties taken in kind that otherwise would be deposited to 
     miscellaneous receipts, without regard to fiscal year 
     limitation, or may use royalty production, to pay the cost 
     of--
       (A) transporting the oil or gas,
       (B) processing the gas, or
       (C) disposing of the oil or gas.
       (5) The Secretary may not use revenues from the sale of oil 
     and gas royalties taken in kind to pay for personnel, travel, 
     or other administrative costs of the Federal Government.
       (c) Reimbursement of Cost.--If the lessee, pursuant to an 
     agreement with the United States or as provided in the lease, 
     processes the royalty gas or delivers the royalty oil or gas 
     at a point not on or adjacent to the lease area, the 
     Secretary of the Interior shall--
       (1) reimburse the lessee for the reasonable costs of 
     transportation (not including gathering) from the lease to 
     the point of delivery or for processing costs; or
       (2) at the discretion of the Secretary of the Interior, 
     allow the lessee to deduct such transportation or processing 
     costs in reporting and paying royalties in value for other 
     Federal oil and gas leases.
       (d) Benefit to the United States Required.--The Secretary 
     may receive oil or gas royalties in kind only if the 
     Secretary determines that receiving such royalties provides 
     benefits to the United States greater than or equal to those 
     that would be realized under a comparable royalty in value 
     program.
       (e) Report to Congress.--For each of the fiscal years 2002 
     through 2006 in which the United States takes oil or gas 
     royalties in kind from production in any State or from the 
     Outer Continental Shelf, excluding royalties taken in kind 
     and sold to refineries under subsection (h), the Secretary of 
     the Interior shall provide a report to the Congress 
     describing--
       (1) the methodology or methodologies used by the Secretary 
     to determine compliance with subsection (d), including 
     performance standards for comparing amounts received by the 
     United States derived from such royalties in kind to amounts 
     likely to have been received had royalties been taken in 
     value;
       (2) an explanation of the evaluation that led the Secretary 
     to take royalties in kind from a lease or group of leases, 
     including the expected revenue effect of taking royalties in 
     kind;
       (3) actual amounts received by the United States derived 
     from taking royalties in kind, and costs and savings incurred 
     by the United States associated with taking royalties in 
     kind; and
       (4) an evaluation of other relevant public benefits or 
     detriments associated with taking royalties in kind.
       (f) Deduction of Expenses.--
       (1) In general.--Before making payments under section 35 of 
     the Mineral Leasing Act (30 U.S.C. 191) or section 8(g) of 
     the Outer Continental Shelf Lands Act (30 U.S.C. 1337(g)) of 
     revenues derived from the sale of royalty production taken in 
     kind from a lease, the Secretary of the Interior shall deduct 
     amounts paid or deducted under subsections (b)(4) and (c), 
     and shall deposit such amounts to miscellaneous receipts.
       (2) Accounting for deductions.--If the Secretary of the 
     Interior allows the lessee to deduct transportation or 
     processing costs under subsection (c), the Secretary may not 
     reduce any payments to recipients of revenues derived from 
     any other Federal oil and gas lease as a consequence of that 
     deduction.
       (g) Consultation With States.--The Secretary of the 
     Interior--
       (1) shall consult with a State before conducting a royalty 
     in kind program under this title within the State, and may 
     delegate management of any portion of the Federal royalty in 
     kind program to such State except as otherwise prohibited by 
     Federal law; and
       (2) shall consult annually with any State from which 
     Federal oil or gas royalty is being taken in kind to ensure 
     to the maximum extent practicable that the royalty in kind 
     program provides revenues to the State greater than or equal 
     to those which would be realized under a comparable royalty 
     in value program.
       (h) Provisions for Small Refineries.--
       (1) Preference.--If the Secretary of the Interior 
     determines that sufficient supplies of crude oil are not 
     available in the open market to refineries not having their 
     own source of supply for crude oil, the Secretary may grant 
     preference to such refineries in the sale of any royalty oil 
     accruing or reserved to the United States under Federal oil 
     and gas leases issued under any mineral leasing law, for 
     processing or use in such refineries at private sale at not 
     less than the market price.
       (2) Proration Among Refineries in Production Area.--In 
     disposing of oil under this subsection, the Secretary of the 
     Interior may, at the discretion of the Secretary, prorate 
     such oil among such refineries in the area in which the oil 
     is produced.
       (i) Disposition to Federal Agencies.--
       (1) Onshore royalty.--Any royalty oil or gas taken by the 
     Secretary in kind from onshore oil and gas leases may be sold 
     at not less than the market price to any department or agency 
     of the United States.
       (2) Offshore royalty.--Any royalty oil or gas taken in kind 
     from Federal oil and gas leases on the Outer Continental 
     Shelf may be disposed of only under section 27 of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1353).
       (j) Preference for Federal Low-Income Energy Assistance 
     Programs.--In disposing of royalty oil or gas taken in kind 
     under this section, the Secretary may grant a preference to 
     any person, including any State or Federal agency, for the 
     purpose of providing additional resources to any Federal low-
     income energy assistance program.

     SEC. 6233. MARGINAL WELL PRODUCTION INCENTIVES.

       To enhance the economics of marginal oil and gas production 
     by increasing the ultimate recovery from marginal wells when 
     the cash price of West Texas Intermediate crude oil, as 
     posted on the Dow Jones Commodities Index chart, is less than 
     $15 per barrel for 180 consecutive pricing days or when the 
     price of natural gas delivered at Henry Hub, Louisiana, is 
     less than $2.00 per million British thermal units for 180 
     consecutive days, the Secretary shall reduce the royalty rate 
     as production declines for--
       (1) onshore oil wells producing less than 30 barrels per 
     day;
       (2) onshore gas wells producing less than 120 million 
     British thermal units per day;
       (3) offshore oil wells producing less than 300 barrels of 
     oil per day; and

[[Page S11828]]

       (4) offshore gas wells producing less than 1,200 million 
     British thermal units per day.

     SEC. 6234. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, 
                   DOCUMENTATION, AND STUDIES.

       (a) In General.--The Mineral Leasing Act (30 U.S.C. 181 et 
     seq.) is amended by inserting after section 37 the following:


   ``REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, DOCUMENTATION, AND 
                                STUDIES

       ``Sec. 38. (a) In General.--Effective October 1, 2003, the 
     Secretary of the Interior may, through royalty credits, 
     reimburse a person who is a lessee, operator, operating 
     rights owner, or applicant for an oil or gas lease under this 
     Act for amounts paid by the person for preparation by the 
     Secretary (or a contractor or other person selected by the 
     Secretary) of any project-level analysis, documentation, or 
     related study required under the National Environmental 
     Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect to 
     the lease.
       ``(b) Conditions.--The Secretary may provide reimbursement 
     under subsection (b) only if--
       ``(1) adequate funding to enable the Secretary to timely 
     prepare the analysis, documentation, or related study is not 
     appropriated;
       ``(2) the person paid the costs voluntarily; and
       ``(3) the person maintains records of its costs in 
     accordance with regulations prescribed by the Secretary.''.
       (b) Application.--The amendments made by this section shall 
     apply with respect to any lease entered into before, on, or 
     after the date of the enactment of this Act.
       (c) Deadline for Regulations.--The Secretary shall issue 
     regulations implementing the amendments made by this section 
     by not later than 90 days after the date of the enactment of 
     this Act.

     SEC. 6235. ENCOURAGEMENT OF STATE AND PROVINCIAL PROHIBITIONS 
                   ON OFF-SHORE DRILLING IN THE GREAT LAKES.

       (a) Findings.--The Congress finds the following:
       (1) The water resources of the Great Lakes Basin are 
     precious public natural resources, shared and held in trust 
     by the States of Illinois, Indiana, Michigan, Minnesota, New 
     York, Ohio, Pennsylvania, and Wisconsin, and the Canadian 
     Province of Ontario.
       (2) The environmental dangers associated with off-shore 
     drilling in the Great Lakes for oil and gas outweigh the 
     potential benefits of such drilling.
       (3) In accordance with the Submerged Lands Act (43 U.S.C. 
     1301 et seq.), each State that borders any of the Great Lakes 
     has authority over the area between that State's coastline 
     and the boundary of Canada or another State.
       (4) The States of Illinois, Michigan, New York, 
     Pennsylvania, and Wisconsin each have a statutory prohibition 
     of off-shore drilling in the Great Lakes for oil and gas.
       (5) The States of Indiana, Minnesota, and Ohio do not have 
     such a prohibition.
       (6) The Canadian Province of Ontario does not have such a 
     prohibition, and drilling for and production of gas occurs in 
     the Canadian portion of Lake Erie.
       (b) Encouragement of State and Provincial Prohibitions.--
     The Congress encourages--
       (1) the States of Illinois, Michigan, New York, 
     Pennsylvania, and Wisconsin to continue to prohibit off-shore 
     drilling in the Great Lakes for oil and gas;
       (2) the States of Indiana, Minnesota, and Ohio and the 
     Canadian Province of Ontario to enact a prohibition of such 
     drilling; and
       (3) the Canadian Province of Ontario to require the 
     cessation of any such drilling and any production resulting 
     from such drilling.

                TITLE III--GEOTHERMAL ENERGY DEVELOPMENT

     SEC. 6301. ROYALTY REDUCTION AND RELIEF.

       (a) Royalty Reduction.--Section 5(a) of the Geothermal 
     Steam Act of 1970 (30 U.S.C. 1004(a)) is amended by striking 
     ``not less than 10 per centum or more than 15 per centum'' 
     and inserting ``not more than 8 per centum''.
       (b) Royalty Relief.--
       (1) In general.--Notwithstanding section 5 of the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1004(a)) and any 
     provision of any lease under that Act, no royalty is required 
     to be paid--
       (A) under any qualified geothermal energy lease with 
     respect to commercial production of heat or energy from a 
     facility that begins such production in the 5-year period 
     beginning on the date of the enactment of this Act; or
       (B) on qualified expansion geothermal energy.
       (2) 3-year application.--Paragraph (1) applies only to 
     commercial production of heat or energy from a facility in 
     the first 3 years of such production.
       (c) Definitions.--In this section:
       (1) Qualified expansion geothermal energy.--The term 
     ``qualified expansion geothermal energy''--
       (A) subject to subparagraph (B), means geothermal energy 
     produced from a generation facility for which the rated 
     capacity is increased by more than 10 percent as a result of 
     expansion of the facility carried out in the 5-year period 
     beginning on the date of the enactment of this Act; and
       (B) does not include the rated capacity of the generation 
     facility on the date of the enactment of this Act.
       (2) Qualified geothermal energy lease.--The term 
     ``qualified geothermal energy lease'' means a lease under the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)--
       (A) that was executed before the end of the 5-year period 
     beginning on the date of the enactment of this Act; and
       (B) under which no commercial production of any form of 
     heat or energy occurred before the date of the enactment of 
     this Act.
       (d) Effective Date.--The provisions of this section shall 
     take effect on October 1, 2003.

     SEC. 6302. EXEMPTION FROM ROYALTIES FOR DIRECT USE OF LOW 
                   TEMPERATURE GEOTHERMAL ENERGY RESOURCES.

       (a) In General.--Section 5 of the Geothermal Steam Act of 
     1970 (30 U.S.C. 1004) is amended--
       (1) in paragraph (c) by redesignating subparagraphs (1) and 
     (2) as subparagraphs (A) and (B);
       (2) by redesignating paragraphs (a) through (d) in order as 
     paragraphs (1) through (4);
       (3) by inserting ``(a) In General.--`` after ``SEC. 5.''; 
     and
       (4) by adding at the end the following new subsection:
       ``(b) Exemption for Use of Low Temperature Resources.--
       ``(1) In general.--In lieu of any royalty or rental under 
     subsection (a), a lease for qualified development and direct 
     utilization of low temperature geothermal resources shall 
     provide for payment by the lessee of an annual fee of not 
     less than $100, and not more than $1,000, in accordance with 
     the schedule issued under paragraph (2).
       ``(2) Schedule.--The Secretary shall issue a schedule of 
     fees under this section under which a fee is based on the 
     scale of development and utilization to which the fee 
     applies.
       ``(3) Definitions.--In this subsection:
       ``(A) Low temperature geothermal resources.--The term ``low 
     temperature geothermal resources'' means geothermal steam and 
     associated geothermal resources having a temperature of less 
     than 195 degrees Fahrenheit.
       ``(B) Qualified development and direct utilization.--The 
     term ``qualified development and direct utilization'' means 
     development and utilization in which all products of 
     geothermal resources, other than any heat utilized, are 
     returned to the geothermal formation from which they are 
     produced.''.
       (b) Effective Date.--The provisions of this section shall 
     take effect on October 1, 2003.

     SEC. 6303. AMENDMENTS RELATING TO LEASING ON FOREST SERVICE 
                   LANDS.

       The Geothermal Steam Act of 1970 is amended--
       (1) in section 15(b) (30 U.S.C. 1014(b))--
       (A) by inserting ``(1)'' after ``(b)''; and
       (B) in paragraph (1) (as designated by subparagraph (A) of 
     this paragraph) in the first sentence--
       (i) by striking ``with the consent of, and'' and inserting 
     ``after consultation with the Secretary of Agriculture and''; 
     and
       (ii) by striking ``the head of that Department'' and 
     inserting ``the Secretary of Agriculture''; and
       (2) by adding at the end the following:
       ``(2)(A) A geothermal lease for lands withdrawn or acquired 
     in aid of functions of the Department of Agriculture may not 
     be issued if the Secretary of Agriculture, after the 
     consultation required by paragraph (1) and consultation with 
     any Regional Forester having administrative jurisdiction over 
     the lands concerned, determines that no terms or conditions, 
     including a prohibition on surface occupancy for lease 
     operations, would be sufficient to adequately protect such 
     lands under the National Forest Management Act of 1976 (16 
     U.S.C. 1600 et seq.).
       ``(B) The authority of the Secretary of Agriculture under 
     this paragraph may be delegated only to the Undersecretary of 
     Agriculture for Natural Resources and Environment.
       ``(3) The Secretary of Agriculture shall include in the 
     record of decision for a determination under paragraph 
     (2)(A)--
       ``(A) any written statement regarding the determination 
     that is prepared by a Regional Forester consulted by the 
     Secretary under paragraph (2)(A) regarding the determination; 
     or
       ``(B) an explanation why such a statement by the Regional 
     Forester is not included.''.

     SEC. 6304. DEADLINE FOR DETERMINATION ON PENDING 
                   NONCOMPETITIVE LEASE APPLICATIONS.

       Not later than 90 days after the date of the enactment of 
     this Act, the Secretary of the Interior shall, with respect 
     to each application pending on the date of the enactment of 
     this Act for a lease under the Geothermal Steam Act of 1970 
     (30 U.S.C. 1001 et seq.), issue a final determination of--
       (1) whether or not to conduct a lease sale by competitive 
     bidding; and
       (2) whether or not to award a lease without competitive 
     bidding.

     SEC. 6305. OPENING OF PUBLIC LANDS UNDER MILITARY 
                   JURISDICTION.

       (a) In General.--Except as otherwise provided in the 
     Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) and 
     other provisions of Federal law applicable to development of 
     geothermal energy resources within public lands, all public 
     lands under the jurisdiction of a Secretary of a military 
     department shall be open to the operation of such laws and 
     development and utilization of geothermal steam and 
     associated geothermal resources, as that term is defined in 
     section 2 of the Geothermal Steam Act of 1970 (30 U.S.C. 
     1001), without the necessity for further action by the 
     Secretary or the Congress.

[[Page S11829]]

       (b) Conforming Amendment.--Section 2689 of title 10, United 
     States Code, is amended by striking ``including public 
     lands,'' and inserting ``other than public lands,''.
       (c) Treatment of Existing Leases.--Upon the expiration of 
     any lease in effect on the date of the enactment of this Act 
     of public lands under the jurisdiction of a military 
     department for the development of any geothermal resource, 
     such lease may, at the option of the lessee--
       (1) be treated as a lease under the Geothermal Steam Act of 
     1970 (30 U.S.C. 1001 et seq.), and be renewed in accordance 
     with such Act; or
       (2) be renewed in accordance with the terms of the lease, 
     if such renewal is authorized by such terms.
       (d) Regulations.--The Secretary of the Interior, with the 
     advice and concurrence of the Secretary of the military 
     department concerned, shall prescribe such regulations to 
     carry out this section as may be necessary. Such regulations 
     shall contain guidelines to assist in determining how much, 
     if any, of the surface of any lands opened pursuant to this 
     section may be used for purposes incident to geothermal 
     energy resources development and utilization.
       (e) Closure for purposes of National Defense or Security.--
     In the event of a national emergency or for purposes of 
     national defense or security, the Secretary of the Interior, 
     at the request of the Secretary of the military department 
     concerned, shall close any lands that have been opened to 
     geothermal energy resources leasing pursuant to this section.

     SEC. 6306. APPLICATION OF AMENDMENTS.

       The amendments made by this title apply with respect to any 
     lease executed before, on, or after the date of the enactment 
     of this Act.

     SEC. 6307. REVIEW AND REPORT TO CONGRESS.

       The Secretary of the Interior shall promptly review and 
     report to the Congress regarding the status of all moratoria 
     on and withdrawals from leasing under the Geothermal Steam 
     Act of 1970 (30 U.S.C. 1001 et seq.) of known geothermal 
     resources areas (as that term is defined in section 2 of that 
     Act (30 U.S.C. 1001), specifying for each such area whether 
     the basis for such moratoria or withdrawal still applies.

     SEC. 6308. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, 
                   DOCUMENTATION, AND STUDIES.

       (a) In General.--The Geothermal Steam Act of 1970 (30 
     U.S.C. 1001 et seq.) is amended by adding at the end the 
     following:


   ``REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, DOCUMENTATION, AND 
                                STUDIES

       ``Sec. 38. (a) In General.--Effective October 1, 2003, The 
     Secretary of the Interior may, through royalty credits, 
     reimburse a person who is a lessee, operator, operating 
     rights owner, or applicant for a lease under this Act for 
     amounts paid by the person for preparation by the Secretary 
     (or a contractor or other person selected by the Secretary) 
     of any project-level analysis, documentation, or related 
     study required under the National Environmental Policy Act of 
     1969 (42 U.S.C. 4321 et seq.) with respect to the lease.
       ``(b) Conditions.--The Secretary shall provide 
     reimbursement under subsection (a) only if--
       ``(1) adequate funding to enable the Secretary to timely 
     prepare the analysis, documentation, or related study is not 
     appropriated;
       ``(2) the person paid the costs voluntarily; and
       ``(3) the person maintains records of its costs in 
     accordance with regulations prescribed by the Secretary.''.
       (b) Application.--The amendments made by this section shall 
     apply with respect to any lease entered into before, on, or 
     after the date of the enactment of this Act.
       (c) Deadline for Regulations.--The Secretary shall issue 
     regulations implementing the amendments made by this section 
     by not later than 90 days after the date of the enactment of 
     this Act.

                          TITLE IV--HYDROPOWER

     SEC. 6401. STUDY AND REPORT ON INCREASING ELECTRIC POWER 
                   PRODUCTION CAPABILITY OF EXISTING FACILITIES.

       (a) In General.--The Secretary of the Interior shall 
     conduct a study of the potential for increasing electric 
     power production capability at existing facilities under the 
     administrative jurisdiction of the Secretary.
       (b) Content.--The study under this section shall include 
     identification and description in detail of each facility 
     that is capable, with or without modification, of producing 
     additional hydroelectric power, including estimation of the 
     existing potential for the facility to generate hydroelectric 
     power.
       (c) Report.--The Secretary shall submit to the Congress a 
     report on the findings, conclusions, and recommendations of 
     the study under this section by not later than 12 months 
     after the date of the enactment of this Act. The Secretary 
     shall include in the report the following:
       (1) The identifications, descriptions, and estimations 
     referred to in subsection (b).
       (2) A description of activities the Secretary is currently 
     conducting or considering, or that could be considered, to 
     produce additional hydroelectric power from each identified 
     facility.
       (3) A summary of action that has already been taken by the 
     Secretary to produce additional hydroelectric power from each 
     identified facility.
       (4) The costs to install, upgrade, or modify equipment or 
     take other actions to produce additional hydroelectric power 
     from each identified facility.
       (5) The benefits that would be achieved by such 
     installation, upgrade, modification, or other action, 
     including quantified estimates of any additional energy or 
     capacity from each facility identified under subsection (b).
       (6) A description of actions that are planned, underway, or 
     might reasonably be considered to increase hydroelectric 
     power production by replacing turbine runners.
       (7) A description of actions that are planned, underway, or 
     might reasonably be considered to increase hydroelectric 
     power production by performing generator uprates and rewinds.
       (8) The impact of increased hydroelectric power production 
     on irrigation, fish, wildlife, Indian tribes, river health, 
     water quality, navigation, recreation, fishing, and flood 
     control.
       (9) Any additional recommendations the Secretary considers 
     advisable to increase hydroelectric power production from, 
     and reduce costs and improve efficiency at, facilities under 
     the jurisdiction of the Secretary.

     SEC. 6402. INSTALLATION OF POWERFORMER AT FOLSOM POWER PLANT, 
                   CALIFORNIA.

       (a) In General.--The Secretary of the Interior may install 
     a powerformer at the Bureau of Reclamation Folsom power plant 
     in Folsom, California, to replace a generator and transformer 
     that are due for replacement due to age.
       (b) Reimbursable Costs.--Costs incurred by the United 
     States for installation of a powerformer under this section 
     shall be treated as reimbursable costs and shall bear 
     interest at current long-term borrowing rates of the United 
     States Treasury at the time of acquisition.
       (c) Local Cost Sharing.--In addition to reimbursable costs 
     under subsection (b), the Secretary shall seek contributions 
     from power users toward the costs of the powerformer and its 
     installation.

     SEC. 6403. STUDY AND IMPLEMENTATION OF INCREASED OPERATIONAL 
                   EFFICIENCIES IN HYDROELECTRIC POWER PROJECTS.

       (a) In General.--The Secretary of Interior shall conduct a 
     study of operational methods and water scheduling techniques 
     at all hydroelectric power plants under the administrative 
     jurisdiction of the Secretary that have an electric power 
     production capacity greater than 50 megawatts, to--
       (1) determine whether such power plants and associated 
     river systems are operated so as to maximize energy and 
     capacity capabilities; and
       (2) identify measures that can be taken to improve 
     operational flexibility at such plants to achieve such 
     maximization.
       (b) Report.--The Secretary shall submit a report on the 
     findings, conclusions, and recommendations of the study under 
     this section by not later than 18 months after the date of 
     the enactment of this Act, including a summary of the 
     determinations and identifications under paragraphs (1) and 
     (2) of subsection (a).
       (c) Cooperation by Federal Power Marketing 
     Administrations.--The Secretary shall coordinate with the 
     Administrator of each Federal power marketing administration 
     in--
       (1) determining how the value of electric power produced by 
     each hydroelectric power facility that produces power 
     marketed by the administration can be maximized; and
       (2) implementing measures identified under subsection 
     (a)(2).
       (d) Limitation on Implementation of Measures.--
     Implementation under subsections (a)(2) and (b)(2) shall be 
     limited to those measures that can be implemented within the 
     constraints imposed on Department of the Interior facilities 
     by other uses required by law.

     SEC. 6404. SHIFT OF PROJECT LOADS TO OFF-PEAK PERIODS.

       (a) In General.--The Secretary of the Interior shall--
       (1) review electric power consumption by Bureau of 
     Reclamation facilities for water pumping purposes; and
       (2) make such adjustments in such pumping as possible to 
     minimize the amount of electric power consumed for such 
     pumping during periods of peak electric power consumption, 
     including by performing as much of such pumping as possible 
     during off-peak hours at night.
       (b) Consent of Affected Irrigation Customers Required.--The 
     Secretary may not under this section make any adjustment in 
     pumping at a facility without the consent of each person that 
     has contracted with the United States for delivery of water 
     from the facility for use for irrigation and that would be 
     affected by such adjustment.
       (c) Existing Obligations Not Affected.--This section shall 
     not be construed to affect any existing obligation of the 
     Secretary to provide electric power, water, or other benefits 
     from Bureau of Reclamation facilities.

             TITLE V--ARCTIC COASTAL PLAIN DOMESTIC ENERGY

     SEC. 6501. SHORT TITLE.

       This title may be cited as the ``Arctic Coastal Plain 
     Domestic Energy Security Act of 2001''.

     SEC. 6502. DEFINITIONS.

       In this title:
       (1) Coastal plain.--The term ``Coastal Plain'' means that 
     area identified as such in the map entitled ``Arctic National 
     Wildlife

[[Page S11830]]

     Refuge'', dated August 1980, as referenced in section 1002(b) 
     of the Alaska National Interest Lands Conservation Act of 
     1980 (16 U.S.C. 3142(b)(1)), comprising approximately 
     1,549,000 acres.
       (2) Secretary.--The term ``Secretary'', except as otherwise 
     provided, means the Secretary of the Interior or the 
     Secretary's designee.

     SEC. 6503. LEASING PROGRAM FOR LANDS WITHIN THE COASTAL 
                   PLAIN.

       (a) In General.--The Secretary shall take such actions as 
     are necessary--
       (1) to establish and implement in accordance with this 
     title a competitive oil and gas leasing program under the 
     Mineral Leasing Act (30 U.S.C. 181 et seq.) that will result 
     in an environmentally sound program for the exploration, 
     development, and production of the oil and gas resources of 
     the Coastal Plain; and
       (2) to administer the provisions of this title through 
     regulations, lease terms, conditions, restrictions, 
     prohibitions, stipulations, and other provisions that ensure 
     the oil and gas exploration, development, and production 
     activities on the Coastal Plain will result in no 
     significant adverse effect on fish and wildlife, their 
     habitat, subsistence resources, and the environment, and 
     including, in furtherance of this goal, by requiring the 
     application of the best commercially available technology 
     for oil and gas exploration, development, and production 
     to all exploration, development, and production operations 
     under this title in a manner that ensures the receipt of 
     fair market value by the public for the mineral resources 
     to be leased.
       (b) Repeal.--Section 1003 of the Alaska National Interest 
     Lands Conservation Act of 1980 (16 U.S.C. 3143) is repealed.
       (c) Compliance With Requirements Under Certain Other 
     Laws.--
       (1) Compatibility.--For purposes of the National Wildlife 
     Refuge System Administration Act of 1966, the oil and gas 
     leasing program and activities authorized by this section in 
     the Coastal Plain are deemed to be compatible with the 
     purposes for which the Arctic National Wildlife Refuge was 
     established, and that no further findings or decisions are 
     required to implement this determination.
       (2) Adequacy of the department of the interior's 
     legislative environmental impact statement.--The ``Final 
     Legislative Environmental Impact Statement'' (April 1987) on 
     the Coastal Plain prepared pursuant to section 1002 of the 
     Alaska National Interest Lands Conservation Act of 1980 (16 
     U.S.C. 3142) and section 102(2)(C) of the National 
     Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)) is 
     deemed to satisfy the requirements under the National 
     Environmental Policy Act of 1969 that apply with respect to 
     actions authorized to be taken by the Secretary to develop 
     and promulgate the regulations for the establishment of a 
     leasing program authorized by this title before the conduct 
     of the first lease sale.
       (3) Compliance with nepa for other actions.--Before 
     conducting the first lease sale under this title, the 
     Secretary shall prepare an environmental impact statement 
     under the National Environmental Policy Act of 1969 with 
     respect to the actions authorized by this title that are not 
     referred to in paragraph (2). Notwithstanding any other law, 
     the Secretary is not required to identify nonleasing 
     alternative courses of action or to analyze the environmental 
     effects of such courses of action. The Secretary shall only 
     identify a preferred action for such leasing and a single 
     leasing alternative, and analyze the environmental effects 
     and potential mitigation measures for those two alternatives. 
     The identification of the preferred action and related 
     analysis for the first lease sale under this title shall be 
     completed within 18 months after the date of the enactment of 
     this Act. The Secretary shall only consider public comments 
     that specifically address the Secretary's preferred action 
     and that are filed within 20 days after publication of an 
     environmental analysis. Notwithstanding any other law, 
     compliance with this paragraph is deemed to satisfy all 
     requirements for the analysis and consideration of the 
     environmental effects of proposed leasing under this title.
       (d) Relationship to State and Local Authority.--Nothing in 
     this title shall be considered to expand or limit State and 
     local regulatory authority.
       (e) Special Areas.--
       (1) In general.--The Secretary, after consultation with the 
     State of Alaska, the city of Kaktovik, and the North Slope 
     Borough, may designate up to a total of 45,000 acres of the 
     Coastal Plain as a Special Area if the Secretary determines 
     that the Special Area is of such unique character and 
     interest so as to require special management and regulatory 
     protection. The Secretary shall designate as such a Special 
     Area the Sadlerochit Spring area, comprising approximately 
     4,000 acres as depicted on the map referred to in section 
     6502(1).
       (2) Management.--Each such Special Area shall be managed so 
     as to protect and preserve the area's unique and diverse 
     character including its fish, wildlife, and subsistence 
     resource values.
       (3) Exclusion from leasing or surface occupancy.--The 
     Secretary may exclude any Special Area from leasing. If the 
     Secretary leases a Special Area, or any part thereof, for 
     purposes of oil and gas exploration, development, production, 
     and related activities, there shall be no surface occupancy 
     of the lands comprising the Special Area.
       (4) Directional drilling.--Notwithstanding the other 
     provisions of this subsection, the Secretary may lease all or 
     a portion of a Special Area under terms that permit the 
     use of horizontal drilling technology from sites on leases 
     located outside the area.
       (f) Limitation on Closed Areas.--The Secretary's sole 
     authority to close lands within the Coastal Plain to oil and 
     gas leasing and to exploration, development, and production 
     is that set forth in this title.
       (g) Regulations.--
       (1) In general.--The Secretary shall prescribe such 
     regulations as may be necessary to carry out this title, 
     including rules and regulations relating to protection of the 
     fish and wildlife, their habitat, subsistence resources, and 
     environment of the Coastal Plain, by no later than 15 months 
     after the date of the enactment of this Act.
       (2) Revision of regulations.--The Secretary shall 
     periodically review and, if appropriate, revise the rules and 
     regulations issued under subsection (a) to reflect any 
     significant biological, environmental, or engineering data 
     that come to the Secretary's attention.

     SEC. 6504. LEASE SALES.

       (a) In General.--Lands may be leased pursuant to this title 
     to any person qualified to obtain a lease for deposits of oil 
     and gas under the Mineral Leasing Act (30 U.S.C. 181 et 
     seq.).
       (b) Procedures.--The Secretary shall, by regulation, 
     establish procedures for--
       (1) receipt and consideration of sealed nominations for any 
     area in the Coastal Plain for inclusion in, or exclusion (as 
     provided in subsection (c)) from, a lease sale;
       (2) the holding of lease sales after such nomination 
     process; and
       (3) public notice of and comment on designation of areas to 
     be included in, or excluded from, a lease sale.
       (c) Lease Sale Bids.--Bidding for leases under this title 
     shall be by sealed competitive cash bonus bids.
       (d) Acreage Minimum in First Sale.--In the first lease sale 
     under this title, the Secretary shall offer for lease those 
     tracts the Secretary considers to have the greatest potential 
     for the discovery of hydrocarbons, taking into consideration 
     nominations received pursuant to subsection (b)(1), but in no 
     case less than 200,000 acres.
       (e) Timing of Lease Sales.--The Secretary shall--
       (1) conduct the first lease sale under this title within 22 
     months after the date of the enactment of this title; and
       (2) conduct additional sales so long as sufficient interest 
     in development exists to warrant, in the Secretary's 
     judgment, the conduct of such sales.

     SEC. 6505. GRANT OF LEASES BY THE SECRETARY.

       (a) In General.--The Secretary may grant to the highest 
     responsible qualified bidder in a lease sale conducted 
     pursuant to section 6504 any lands to be leased on the 
     Coastal Plain upon payment by the lessee of such bonus as may 
     be accepted by the Secretary.
       (b) Subsequent Transfers.--No lease issued under this title 
     may be sold, exchanged, assigned, sublet, or otherwise 
     transferred except with the approval of the Secretary. Prior 
     to any such approval the Secretary shall consult with, and 
     give due consideration to the views of, the Attorney General.

     SEC. 6506. LEASE TERMS AND CONDITIONS.

       (a) In General.--An oil or gas lease issued pursuant to 
     this title shall--
       (1) provide for the payment of a royalty of not less than 
     12\1/2\ percent in amount or value of the production removed 
     or sold from the lease, as determined by the Secretary under 
     the regulations applicable to other Federal oil and gas 
     leases;
       (2) provide that the Secretary may close, on a seasonal 
     basis, portions of the Coastal Plain to exploratory drilling 
     activities as necessary to protect caribou calving areas and 
     other species of fish and wildlife;
       (3) require that the lessee of lands within the Coastal 
     Plain shall be fully responsible and liable for the 
     reclamation of lands within the Coastal Plain and any other 
     Federal lands that are adversely affected in connection with 
     exploration, development, production, or transportation 
     activities conducted under the lease and within the Coastal 
     Plain by the lessee or by any of the subcontractors or agents 
     of the lessee;
       (4) provide that the lessee may not delegate or convey, by 
     contract or otherwise, the reclamation responsibility and 
     liability to another person without the express 
     written approval of the Secretary;
       (5) provide that the standard of reclamation for lands 
     required to be reclaimed under this title shall be, as nearly 
     as practicable, a condition capable of supporting the uses 
     which the lands were capable of supporting prior to any 
     exploration, development, or production activities, or upon 
     application by the lessee, to a higher or better use as 
     approved by the Secretary;
       (6) contain terms and conditions relating to protection of 
     fish and wildlife, their habitat, and the environment as 
     required pursuant to section 6503(a)(2);
       (7) provide that the lessee, its agents, and its 
     contractors use best efforts to provide a fair share, as 
     determined by the level of obligation previously agreed to in 
     the 1974 agreement implementing section 29 of the Federal 
     Agreement and Grant of Right of Way for the Operation of the 
     Trans-Alaska Pipeline, of employment and contracting for 
     Alaska Natives and Alaska Native Corporations from throughout 
     the State;

[[Page S11831]]

       (8) prohibit the export of oil produced under the lease; 
     and
       (9) contain such other provisions as the Secretary 
     determines necessary to ensure compliance with the provisions 
     of this title and the regulations issued under this title.
       (b) Project Labor Agreements.--The Secretary, as a term and 
     condition of each lease under this title and in recognizing 
     the Government's proprietary interest in labor stability and 
     in the ability of construction labor and management to meet 
     the particular needs and conditions of projects to be 
     developed under the leases issued pursuant to this title and 
     the special concerns of the parties to such leases, shall 
     require that the lessee and its agents and contractors 
     negotiate to obtain a project labor agreement for the 
     employment of laborers and mechanics on production, 
     maintenance, and construction under the lease.

     SEC. 6507. COASTAL PLAIN ENVIRONMENTAL PROTECTION.

       (a) No Significant Adverse Effect Standard To Govern 
     Authorized Coastal Plain Activities.--The Secretary shall, 
     consistent with the requirements of section 6503, administer 
     the provisions of this title through regulations, lease 
     terms, conditions, restrictions, prohibitions, stipulations, 
     and other provisions that--
       (1) ensure the oil and gas exploration, development, and 
     production activities on the Coastal Plain will result in no 
     significant adverse effect on fish and wildlife, their 
     habitat, and the environment;
       (2) require the application of the best commercially 
     available technology for oil and gas exploration, 
     development, and production on all new exploration, 
     development, and production operations; and
       (3) ensure that the maximum amount of surface acreage 
     covered by production and support facilities, including 
     airstrips and any areas covered by gravel berms or piers for 
     support of pipelines, does not exceed 2,000 acres on the 
     Coastal Plain.
       (b) Site-Specific Assessment and Mitigation.--The Secretary 
     shall also require, with respect to any proposed drilling and 
     related activities, that--
       (1) a site-specific analysis be made of the probable 
     effects, if any, that the drilling or related activities will 
     have on fish and wildlife, their habitat, and the 
     environment;
       (2) a plan be implemented to avoid, minimize, and mitigate 
     (in that order and to the extent practicable) any significant 
     adverse effect identified under paragraph (1); and
       (3) the development of the plan shall occur after 
     consultation with the agency or agencies having jurisdiction 
     over matters mitigated by the plan.
       (c) Regulations To Protect Coastal Plain Fish and Wildlife 
     Resources, Subsistence Users, and the Environment.--Before 
     implementing the leasing program authorized by this title, 
     the Secretary shall prepare and promulgate regulations, lease 
     terms, conditions, restrictions, prohibitions, stipulations, 
     and other measures designed to ensure that the activities 
     undertaken on the Coastal Plain under this title are 
     conducted in a manner consistent with the purposes and 
     environmental requirements of this title.
       (d) Compliance With Federal and State Environmental Laws 
     and Other Requirements.--The proposed regulations, lease 
     terms, conditions, restrictions, prohibitions, and 
     stipulations for the leasing program under this title shall 
     require compliance with all applicable provisions of Federal 
     and State environmental law and shall also require the 
     following:
       (1) Standards at least as effective as the safety and 
     environmental mitigation measures set forth in items 1 
     through 29 at pages 167 through 169 of the 
     ``Final Legislative Environmental Impact Statement'' 
     (April 1987) on the Coastal Plain.
       (2) Seasonal limitations on exploration, development, and 
     related activities, where necessary, to avoid significant 
     adverse effects during periods of concentrated fish and 
     wildlife breeding, denning, nesting, spawning, and migration.
       (3) That exploration activities, except for surface 
     geological studies, be limited to the period between 
     approximately November 1 and May 1 each year and that 
     exploration activities shall be supported by ice roads, 
     winter trails with adequate snow cover, ice pads, ice 
     airstrips, and air transport methods, except that such 
     exploration activities may occur at other times, if--
       (A) the Secretary determines, after affording an 
     opportunity for public comment and review, that special 
     circumstances exist necessitating that exploration activities 
     be conducted at other times of the year; and
       (B) the Secretary finds that such exploration will have no 
     significant adverse effect on the fish and wildlife, their 
     habitat, and the environment of the Coastal Plain.
       (4) Design safety and construction standards for all 
     pipelines and any access and service roads, that--
       (A) minimize, to the maximum extent possible, adverse 
     effects upon the passage of migratory species such as 
     caribou; and
       (B) minimize adverse effects upon the flow of surface water 
     by requiring the use of culverts, bridges, and other 
     structural devices.
       (5) Prohibitions on public access and use on all pipeline 
     access and service roads.
       (6) Stringent reclamation and rehabilitation requirements, 
     consistent with the standards set forth in this title, 
     requiring the removal from the Coastal Plain of all oil and 
     gas development and production facilities, structures, and 
     equipment upon completion of oil and gas production 
     operations, except that the Secretary may exempt from the 
     requirements of this paragraph those facilities, structures, 
     or equipment that the Secretary determines would assist in 
     the management of the Arctic National Wildlife Refuge and 
     that are donated to the United States for that purpose.
       (7) Appropriate prohibitions or restrictions on access by 
     all modes of transportation.
       (8) Appropriate prohibitions or restrictions on sand and 
     gravel extraction.
       (9) Consolidation of facility siting.
       (10) Appropriate prohibitions or restrictions on use of 
     explosives.
       (11) Avoidance, to the extent practicable, of springs, 
     streams, and river system; the protection of natural surface 
     drainage patterns, wetlands, and riparian habitats; and the 
     regulation of methods or techniques for developing or 
     transporting adequate supplies of water for exploratory 
     drilling.
       (12) Avoidance or reduction of air traffic-related 
     disturbance to fish and wildlife.
       (13) Treatment and disposal of hazardous and toxic wastes, 
     solid wastes, reserve pit fluids, drilling muds and cuttings, 
     and domestic wastewater, including an annual waste management 
     report, a hazardous materials tracking system, and a 
     prohibition on chlorinated solvents, in accordance with 
     applicable Federal and State environmental law.
       (14) Fuel storage and oil spill contingency planning.
       (15) Research, monitoring, and reporting requirements.
       (16) Field crew environmental briefings.
       (17) Avoidance of significant adverse effects upon 
     subsistence hunting, fishing, and trapping by subsistence 
     users.
       (18) Compliance with applicable air and water quality 
     standards.
       (19) Appropriate seasonal and safety zone designations 
     around well sites, within which subsistence hunting and 
     trapping shall be limited.
       (20) Reasonable stipulations for protection of cultural and 
     archeological resources.
       (21) All other protective environmental stipulations, 
     restrictions, terms, and conditions deemed necessary by the 
     Secretary.
       (e) Considerations.--In preparing and promulgating 
     regulations, lease terms, conditions, restrictions, 
     prohibitions, and stipulations under this section, the 
     Secretary shall consider the following:
       (1) The stipulations and conditions that govern the 
     National Petroleum Reserve-Alaska leasing program, as set 
     forth in the 1999 Northeast National Petroleum Reserve-Alaska 
     Final Integrated Activity Plan/Environmental Impact 
     Statement.
       (2) The environmental protection standards that governed 
     the initial Coastal Plain seismic exploration program under 
     parts 37.31 to 37.33 of title 50, Code of Federal 
     Regulations.
       (3) The land use stipulations for exploratory drilling on 
     the KIC-ASRC private lands that are set forth in Appendix 2 
     of the August 9, 1983, agreement between Arctic Slope 
     Regional Corporation and the United States.
       (f) Facility Consolidation Planning.--
       (1) In general.--The Secretary shall, after providing for 
     public notice and comment, prepare and update periodically a 
     plan to govern, guide, and direct the siting and construction 
     of facilities for the exploration, development, production, 
     and transportation of Coastal Plain oil and gas resources.
       (2) Objectives.--The plan shall have the following 
     objectives:
       (A) Avoiding unnecessary duplication of facilities and 
     activities.
       (B) Encouraging consolidation of common facilities and 
     activities.
       (C) Locating or confining facilities and activities to 
     areas that will minimize impact on fish and wildlife, their 
     habitat, and the environment.
       (D) Utilizing existing facilities wherever practicable.
       (E) Enhancing compatibility between wildlife values and 
     development activities.

     SEC. 6508. EXPEDITED JUDICIAL REVIEW.

       (a) Filing of Complaint.--
       (1) Deadline.--Subject to paragraph (2), any complaint 
     seeking judicial review of any provision of this title or any 
     action of the Secretary under this title shall be filed in 
     any appropriate district court of the United States--
       (A) except as provided in subparagraph (B), within the 90-
     day period beginning on the date of the action being 
     challenged; or
       (B) in the case of a complaint based solely on grounds 
     arising after such period, within 90 days after the 
     complainant knew or reasonably should have known of the 
     grounds for the complaint.
       (2) Venue.--Any complaint seeking judicial review of an 
     action of the Secretary under this title may be filed only in 
     the United States Court of Appeals for the District of 
     Columbia.
       (3) Limitation on scope of certain review.--Judicial review 
     of a Secretarial decision to conduct a lease sale under this 
     title, including the environmental analysis thereof, shall be 
     limited to whether the Secretary has complied with the terms 
     of this division and shall be based upon the administrative 
     record of that decision. The Secretary's identification of a 
     preferred course of action to enable leasing to proceed and 
     the Secretary's analysis of environmental effects under this 
     division shall be presumed to be correct unless shown 
     otherwise by clear and convincing evidence to the contrary.
       (b) Limitation on Other Review.--Actions of the Secretary 
     with respect to which review could have been obtained under 
     this

[[Page S11832]]

     section shall not be subject to judicial review in any civil 
     or criminal proceeding for enforcement.

     SEC. 6509. RIGHTS-OF-WAY ACROSS THE COASTAL PLAIN.

       (a) Exemption.--Title XI of the Alaska National Interest 
     Lands Conservation Act of 1980 (16 U.S.C. 3161 et seq.) shall 
     not apply to the issuance by the Secretary under section 28 
     of the Mineral Leasing Act (30 U.S.C. 185) of rights-of-way 
     and easements across the Coastal Plain for the transportation 
     of oil and gas.
       (b) Terms and Conditions.--The Secretary shall include in 
     any right-of-way or easement referred to in subsection (a) 
     such terms and conditions as may be necessary to ensure that 
     transportation of oil and gas does not result in a 
     significant adverse effect on the fish and wildlife, 
     subsistence resources, their habitat, and the environment of 
     the Coastal Plain, including requirements that facilities be 
     sited or designed so as to avoid unnecessary duplication of 
     roads and pipelines.
       (c) Regulations.--The Secretary shall include in 
     regulations under section 6503(g) provisions granting rights-
     of-way and easements described in subsection (a) of this 
     section.

     SEC. 6510. CONVEYANCE.

       In order to maximize Federal revenues by removing clouds on 
     title to lands and clarifying land ownership patterns within 
     the Coastal Plain, the Secretary, notwithstanding the 
     provisions of section 1302(h)(2) of the Alaska National 
     Interest Lands Conservation Act (16 U.S.C. 3192(h)(2)), shall 
     convey--
       (1) to the Kaktovik Inupiat Corporation the surface estate 
     of the lands described in paragraph 2 of Public Land Order 
     6959, to the extent necessary to fulfill the Corporation's 
     entitlement under section 12 of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1611); and
       (2) to the Arctic Slope Regional Corporation the subsurface 
     estate beneath such surface estate pursuant to the August 9, 
     1983, agreement between the Arctic Slope Regional Corporation 
     and the United States of America.

     SEC. 6511. LOCAL GOVERNMENT IMPACT AID AND COMMUNITY SERVICE 
                   ASSISTANCE.

       (a) Financial Assistance Authorized.--
       (1) In general.--The Secretary may use amounts available 
     from the Coastal Plain Local Government Impact Aid Assistance 
     Fund established by subsection (d) to provide timely 
     financial assistance to entities that are eligible under 
     paragraph (2) and that are directly impacted by the 
     exploration for or production of oil and gas on the Coastal 
     Plain under this title.
       (2) Eligible entities.--The North Slope Borough, Kaktovik, 
     and other boroughs, municipal subdivisions, villages, and any 
     other community organized under Alaska State law shall be 
     eligible for financial assistance under this section.
       (b) Use of Assistance.--Financial assistance under this 
     section may be used only for--
       (1) planning for mitigation of the potential effects of oil 
     and gas exploration and development on environmental, social, 
     cultural, recreational and subsistence values;
       (2) implementing mitigation plans and maintaining 
     mitigation projects; and
       (3) developing, carrying out, and maintaining projects and 
     programs that provide new or expanded public facilities and 
     services to address needs and problems associated with such 
     effects, including firefighting, police, water, waste 
     treatment, medivac, and medical services.
       (c) Application.--
       (1) In general.--Any community that is eligible for 
     assistance under this section may submit an application for 
     such assistance to the Secretary, in such form and under such 
     procedures as the Secretary may prescribe by regulation.
       (2) North slope borough communities.--A community located 
     in the North Slope Borough may apply for assistance under 
     this section either directly to the Secretary or through the 
     North Slope Borough.
       (3) Application assistance.--The Secretary shall work 
     closely with and assist the North Slope Borough and other 
     communities eligible for assistance under this section in 
     developing and submitting applications for assistance under 
     this section.
       (d) Establishment of Fund.--
       (1) In general.--There is established in the Treasury the 
     Coastal Plain Local Government Impact Aid Assistance Fund.
       (2) Use.--Amounts in the fund may be used only for 
     providing financial assistance under this section.
       (3) Deposits.--Subject to paragraph (4), there shall be 
     deposited into the fund amounts received by the United States 
     as revenues derived from rents, bonuses, and royalties under 
     on leases and lease sales authorized under this title.
       (4) Limitation on deposits.--The total amount in the fund 
     may not exceed $10,000,000.
       (5) Investment of balances.--The Secretary of the Treasury 
     shall invest amounts in the fund in interest bearing 
     government securities.
       (e) Authorization of Appropriations.--To provide financial 
     assistance under this section there is authorized to be 
     appropriated to the Secretary from the Coastal Plain Local 
     Government Impact Aid Assistance Fund $5,000,000 for each 
     fiscal year.

     SEC. 6512. REVENUE ALLOCATION.

       (a) Federal and State Distribution.--
       (1) In general.--Notwithstanding section 6504 of this Act, 
     the Mineral Leasing Act (30 U.S.C. 181 et seq.), or any other 
     law, of the amount of adjusted bonus, rental, and royalty 
     revenues from oil and gas leasing and operations authorized 
     under this title--
       (A) 50 percent shall be paid to the State of Alaska; and
       (B) the balance shall be deposited into the Renewable 
     Energy Technology Investment Fund and the Royalties 
     Conservation Fund as provided in this section.
       (2) Adjustments.--Adjustments to bonus, rental, and royalty 
     amounts from oil and gas leasing and operations authorized 
     under this title shall be made as necessary for overpayments 
     and refunds from lease revenues received in current or 
     subsequent periods before distribution of such revenues 
     pursuant to this section.
       (3) Timing of payments to state.--Payments to the State of 
     Alaska under this section shall be made semiannually.
       (b) Renewable Energy Technology Investment Fund.--
       (1) Establishment and availability.--There is hereby 
     established in the Treasury of the United States a separate 
     account which shall be known as the ``Renewable Energy 
     Technology Investment Fund''.
       (2) Deposits.--Fifty percent of adjusted revenues from 
     bonus payments for leases issued under this title shall be 
     deposited into the Renewable Energy Technology Investment 
     Fund.
       (3) Use, generally.--Subject to paragraph (4), funds 
     deposited into the Renewable Energy Technology Investment 
     Fund shall be used by the Secretary of Energy to finance 
     research grants, contracts, and cooperative agreements and 
     expenses of direct research by Federal agencies, including 
     the costs of administering and reporting on such a program of 
     research, to improve and demonstrate technology and develop 
     basic science information for development and use of 
     renewable and alternative fuels including wind energy, solar 
     energy, geothermal energy, and energy from biomass. Such 
     research may include studies on deployment of such technology 
     including research on how to lower the costs of introduction 
     of such technology and of barriers to entry into the market 
     of such technology.
       (4) Use for adjustments and refunds.--If for any 
     circumstances, adjustments or refunds of bonus amounts 
     deposited pursuant to this title become warranted, 50 percent 
     of the amount necessary for the sum of such adjustments and 
     refunds may be paid by the Secretary from the Renewable 
     Energy Technology Investment Fund.
       (5) Consultation and coordination.--Any specific use of the 
     Renewable Energy Technology Investment Fund shall be 
     determined only after the Secretary of Energy consults and 
     coordinates with the heads of other appropriate Federal 
     agencies.
       (6) Reports.--Not later than 1 year after the date of the 
     enactment of this Act and on an annual basis thereafter, the 
     Secretary of Energy shall transmit to the Committee on 
     Science of the House of Representatives and the Committee on 
     Energy and Natural Resources of the Senate a report on the 
     use of funds under this subsection and the impact of and 
     efforts to integrate such uses with other energy research 
     efforts.
       (c) Royalties Conservation Fund.--
       (1) Establishment and availability.--There is hereby 
     established in the Treasury of the United States a separate 
     account which shall be known as the ``Royalties Conservation 
     Fund''.
       (2) Deposits.--Fifty percent of revenues from rents and 
     royalty payments for leases issued under this title shall be 
     deposited into the Royalties Conservation Fund.
       (3) Use, generally.--Subject to paragraph (4), funds 
     deposited into the Royalties Conservation Fund--
       (A) may be used by the Secretary of the Interior and the 
     Secretary of Agriculture to finance grants, contracts, 
     cooperative agreements, and expenses for direct activities of 
     the Department of the Interior and the Forest Service to 
     restore and otherwise conserve lands and habitat and to 
     eliminate maintenance and improvements backlogs on Federal 
     lands, including the costs of administering and reporting on 
     such a program; and
       (B) may be used by the Secretary of the Interior to finance 
     grants, contracts, cooperative agreements, and expenses--
       (i) to preserve historic Federal properties;
       (ii) to assist States and Indian Tribes in preserving their 
     historic properties;
       (iii) to foster the development of urban parks; and
       (iv) to conduct research to improve the effectiveness and 
     lower the costs of habitat restoration.
       (4) Use for adjustments and refunds.--If for any 
     circumstances, refunds or adjustments of royalty and rental 
     amounts deposited pursuant to this title become warranted, 50 
     percent of the amount necessary for the sum of such 
     adjustments and refunds may be paid from the Royalties 
     Conservation Fund.
       (d) Availability.--Moneys covered into the accounts 
     established by this section--
       (1) shall be available for expenditure only to the extent 
     appropriated therefor;
       (2) may be appropriated without fiscal-year limitation; and
       (3) may be obligated or expended only as provided in this 
     section.

[[Page S11833]]

   TITLE VI--CONSERVATION OF ENERGY BY THE DEPARTMENT OF THE INTERIOR

     SEC. 6601. ENERGY CONSERVATION BY THE DEPARTMENT OF THE 
                   INTERIOR.

       (a) In General.--The Secretary of the Interior shall--
       (1) conduct a study to identify, evaluate, and recommend 
     opportunities for conserving energy by reducing the amount of 
     energy used by facilities of the Department of the Interior; 
     and
       (2) wherever feasible and appropriate, reduce the use of 
     energy from traditional sources by encouraging use of 
     alternative energy sources, including solar power and power 
     from fuel cells, throughout such facilities and the public 
     lands of the United States.
       (b) Reports.--The Secretary shall submit to the Congress--
       (1) by not later than 90 days after the date of the 
     enactment of this Act, a report containing the findings, 
     conclusions, and recommendations of the study under 
     subsection (a)(1); and
       (2) by not later than December 31 each year, an annual 
     report describing progress made in--
       (A) conserving energy through opportunities recommended in 
     the report under paragraph (1); and
       (B) encouraging use of alternative energy sources under 
     subsection (a)(2).

     SEC. 6602. AMENDMENT TO BUY INDIAN ACT.

       Section 23 of the Act of June 25, 1910 (25 U.S.C. 47; 
     commonly known as the ``Buy Indian Act'') is amended by 
     inserting ``energy products, and energy by-products,'' after 
     ``printing,''.

                            TITLE VII--COAL

     SEC. 6701. LIMITATION ON FEES WITH RESPECT TO COAL LEASE 
                   APPLICATIONS AND DOCUMENTS.

       Notwithstanding sections 304 and 504 of the Federal Land 
     Policy and Management Act of 1976 (43 U.S.C. 1734, 1764) and 
     section 9701 of title 31, United States Code, the Secretary 
     shall not recover the Secretary's costs with respect to 
     applications and other documents relating coal leases.

     SEC. 6702. MINING PLANS.

       Section 2(d)(2) of the Mineral Leasing Act (30 U.S.C. 
     202a(2)) is amended--
       (1) by inserting ``(A)'' after ``(2)''; and
       (2) by adding at the end the following:
       ``(B) The Secretary may establish a period of more than 40 
     years if the Secretary determines that the longer period--
       ``(i) will ensure the maximum economic recovery of a coal 
     deposit; or
       ``(ii) the longer period is in the interest of the orderly, 
     efficient, or economic development of a coal resources.''.

     SEC. 6703. PAYMENT OF ADVANCE ROYALTIES UNDER COAL LEASES.

       (a) In General.--Section 7(b) of the Mineral Leasing Act of 
     1920 (30 U.S.C. 207(b)) is amended to read as follows:
       ``(b)(1) Each lease shall be subjected to the condition of 
     diligent development and continued operation of the mine or 
     mines, except where operations under the lease are 
     interrupted by strikes, the elements, or casualties not 
     attributable to the lessee.
       ``(2)(A) The Secretary of the Interior, upon determining 
     that the public interest will be served thereby, may suspend 
     the condition of continued operation upon the payment of 
     advance royalties.
       ``(B) Such advance royalties shall be computed based on the 
     average price for coal sold in the spot market from the same 
     region during the last month of each applicable continued 
     operation year.
       ``(C) The aggregate number of years during the initial and 
     any extended term of any lease for which advance royalties 
     may be accepted in lieu of the condition of continued 
     operation shall not exceed 20.
       ``(3) The amount of any production royalty paid for any 
     year shall be reduced (but not below zero) by the amount of 
     any advance royalties paid under such lease to the extent 
     that such advance royalties have not been used to reduce 
     production royalties for a prior year.
       ``(4) This subsection shall be applicable to any lease or 
     logical mining unit in existence on the date of the enactment 
     of this paragraph or issued or approved after such date.
       ``(5) Nothing in this subsection shall be construed to 
     affect the requirement contained in the second sentence of 
     subsection (a) relating to commencement of production at the 
     end of 10 years.''.
       (b) Authority To Waive, Suspend, or Reduce Advance 
     Royalties--Section 39 of the Mineral Leasing Act (30 U.S.C. 
     209) is amended by striking the last sentence.

     SEC. 6704. ELIMINATION OF DEADLINE FOR SUBMISSION OF COAL 
                   LEASE OPERATION AND RECLAMATION PLAN.

       Section 7(c) of the Mineral Leasing Act (30 U.S.C. 207(c)) 
     is amended by striking ``and not later than three years after 
     a lease is issued,''.

               TITLE VIII--INSULAR AREAS ENERGY SECURITY

     SEC. 6801. INSULAR AREAS ENERGY SECURITY.

       Section 604 of the Act entitled ``An Act to authorize 
     appropriations for certain insular areas of the United 
     States, and for other purposes'', approved December 24, 1980 
     (Public Law 96-597; 94 Stat. 3480-3481), is amended--
       (1) in subsection (a)(4) by striking the period and 
     inserting a semicolon;
       (2) by adding at the end of subsection (a) the following 
     new paragraphs:
       ``(5) electric power transmission and distribution lines in 
     insular areas are inadequate to withstand damage caused by 
     the hurricanes and typhoons which frequently occur in insular 
     areas and such damage often costs millions of dollars to 
     repair; and
       ``(6) the refinement of renewable energy technologies since 
     the publication of the 1982 Territorial Energy Assessment 
     prepared pursuant to subsection (c) reveals the need to 
     reassess the state of energy production, consumption, 
     infrastructure, reliance on imported energy, and indigenous 
     sources in regard to the insular areas.'';
       (3) by amending subsection (e) to read as follows:
       ``(e)(1) The Secretary of the Interior, in consultation 
     with the Secretary of Energy and the chief executive officer 
     of each insular area, shall update the plans required under 
     subsection (c) by--
       ``(A) updating the contents required by subsection (c);
       ``(B) drafting long-term energy plans for such insular 
     areas with the objective of reducing, to the extent feasible, 
     their reliance on energy imports by the year 2010 and 
     maximizing, to the extent feasible, use of indigenous energy 
     sources; and
       ``(C) drafting long-term energy transmission line plans for 
     such insular areas with the objective that the maximum 
     percentage feasible of electric power transmission and 
     distribution lines in each insular area be protected from 
     damage caused by hurricanes and typhoons.
       ``(2) Not later than May 31, 2003, the Secretary of the 
     Interior shall submit to Congress the updated plans for each 
     insular area required by this subsection.''; and
       (4) by amending subsection (g)(4) to read as follows:
       ``(4) Power line grants for territories--
       ``(A) In general.--The Secretary of the Interior is 
     authorized to make grants to governments of territories of 
     the United States to carry out eligible projects to protect 
     electric power transmission and distribution lines in such 
     territories from damage caused by hurricanes and typhoons.
       ``(B) Eligible projects.--The Secretary may award grants 
     under subparagraph (A) only to governments of territories of 
     the United States that submit written project plans to the 
     Secretary for projects that meet the following criteria:
       ``(i) The project is designed to protect electric power 
     transmission and distribution lines located in one or more of 
     the territories of the United States from damage caused by 
     hurricanes and typhoons.
       ``(ii) The project is likely to substantially reduce the 
     risk of future damage, hardship, loss, or suffering.
       ``(iii) The project addresses one or more problems that 
     have been repetitive or that pose a significant risk to 
     public health and safety.
       ``(iv) The project is not likely to cost more than the 
     value of the reduction in direct damage and other negative 
     impacts that the project is designed to prevent or mitigate. 
     The cost benefit analysis required by this criterion shall be 
     computed on a net present value basis.
       ``(v) The project design has taken into consideration long-
     term changes to the areas and persons it is designed to 
     protect and has manageable future maintenance and 
     modification requirements.
       ``(vi) The project plan includes an analysis of a range of 
     options to address the problem it is designed to prevent or 
     mitigate and a justification for the selection of the project 
     in light of that analysis.
       ``(vii) The applicant has demonstrated to the Secretary 
     that the matching funds required by subparagraph (D) are 
     available.
       ``(C) Priority.--When making grants under this paragraph, 
     the Secretary shall give priority to grants for projects 
     which are likely to--
       ``(i) have the greatest impact on reducing future disaster 
     losses; and
       ``(ii) best conform with plans that have been approved by 
     the Federal Government or the government of the territory 
     where the project is to be carried out for development or 
     hazard mitigation for that territory.
       ``(D) Matching requirement.--The Federal share of the cost 
     for a project for which a grant is provided under this 
     paragraph shall not exceed 75 percent of the total cost of 
     that project. The non-Federal share of the cost may be 
     provided in the form of cash or services.
       ``(E) Treatment of funds for certain purposes.--Grants 
     provided under this paragraph shall not be considered as 
     income, a resource, or a duplicative program when determining 
     eligibility or benefit levels for Federal major disaster and 
     emergency assistance.
       ``(F) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $5,000,000 for 
     each fiscal year beginning after the date of the enactment of 
     this paragraph.''.

                               DIVISION G

     SEC. 7101. BUY AMERICAN.

       No funds authorized under this Act shall be available to 
     any person or entity that has been convicted of violating the 
     Buy American Act (41 U.S.C. 10a-10c).
                                  ____

  SA 2125. Mr. BAUCUS proposed an amendment to the bill H.R. 3090, to 
provide tax incentives for economic recovery; as follows:

       Strike all after the enacting clause and insert the 
     following:

[[Page S11834]]

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Economic 
     Recovery and Homeland Defense Act of 2001''.
       (b) References to Internal Revenue Code of 1986.--Except as 
     otherwise expressly provided, whenever in this Act an 
     amendment or repeal is expressed in terms of an amendment to, 
     or repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of the Internal Revenue Code of 1986.
       (c) Table of Contents.--

Sec. 1. Short title; etc.

         TITLE I--SUPPLEMENTAL REBATE FOR INDIVIDUAL TAXPAYERS

Sec. 101. Supplemental rebate.

             TITLE II--TEMPORARY BUSINESS RELIEF PROVISIONS

Sec. 201. Special depreciation allowance for certain property.
Sec. 202. Increase in section 179 expensing.
Sec. 203. Carryback of certain net operating losses allowed for 5 
              years.

    TITLE III--TAX INCENTIVES AND RELIEF FOR VICTIMS OF TERRORISM, 
                  DISASTERS, AND DISTRESSED CONDITIONS

   Subtitle A--Tax Incentives for New York City and Distressed Areas

Sec. 301. Expansion of work opportunity tax credit targeted categories 
              to include certain employees in New York City.
Sec. 302. Tax-exempt private activity bonds for rebuilding portion of 
              New York City damaged in the September 11, 2001, 
              terrorist attack.
Sec. 303. Gain or loss from property damaged or destroyed in New York 
              Recovery Zone.
Sec. 304. Reenactment of exceptions for qualified-mortgage-bond-
              financed loans to victims of Presidentially declared 
              disasters.
Sec. 305. One-year expansion of authority for Indian tribes to issue 
              tax-exempt private activity bonds.

              Subtitle B--Victims of Terrorism Tax Relief

Sec. 310. Short title.

Part I--Relief Provisions for Victims of April 19, 1995, and September 
                      11, 2001, Terrorist Attacks

Sec. 311. Income and employment taxes of victims of terrorist attacks.
Sec. 312. Estate tax reduction.
Sec. 313. Payments by charitable organizations treated as exempt 
              payments.
Sec. 314. Exclusion of certain cancellations of indebtedness.

  Part II--General Relief for Victims of Disasters and Terroristic or 
                            Military Actions

Sec. 321. Exclusion for disaster relief payments.
Sec. 322. Authority to postpone certain deadlines and required actions.
Sec. 323. Internal Revenue Service disaster response team.
Sec. 324. Application of certain provisions to terroristic or military 
              actions.
Sec. 325. Clarification of due date for airline excise tax deposits.
Sec. 326. Coordination with Air Transportation Safety and System 
              Stabilization Act.

        TITLE IV--EXTENSIONS OF CERTAIN EXPIRING TAX PROVISIONS

Sec. 401. Allowance of nonrefundable personal credits against regular 
              and minimum tax liability.
Sec. 402. Work opportunity credit.
Sec. 403. Welfare-to-work credit.
Sec. 404. Credit for electricity produced from renewable resources.
Sec. 405. Taxable income limit on percentage depletion for oil and 
              natural gas produced from marginal properties.
Sec. 406. Qualified zone academy bonds.
Sec. 407. Subpart F exemption for active financing.
Sec. 408. Cover over of tax on distilled spirits.
Sec. 409. Delay in effective date of requirement for approved diesel or 
              kerosene terminals.
Sec. 410. Deduction for clean-fuel vehicles and certain refueling 
              property.
Sec. 411. Credit for qualified electric vehicles.
Sec. 412. Parity in the application of certain limits to mental health 
              benefits.
Sec. 413. Combined employment tax reporting.

    TITLE V--EXTENSION OF CERTAIN TRADE PROVISIONS EXPIRING IN 2001.

Sec. 501. Generalized System of Preferences.
Sec. 502. Andean Trade Preference Act.
Sec. 503. Reauthorization of trade adjustment assistance.

                       TITLE VI--HEALTH INSURANCE

 Subtitle A--Health Insurance Coverage Options for Recently Unemployed 
                     Individuals and Their Families

Sec. 601. Premium assistance for COBRA continuation coverage for 
              individuals and their families.
Sec. 602. State option to provide temporary medicaid coverage for 
              certain uninsured individuals.
Sec. 603. State option to provide temporary coverage under medicaid for 
              the unsubsidized portion of COBRA continuation premiums.
Sec. 604. Temporary increases of medicaid FMAP for fiscal year 2002.
Sec. 605. Definitions.

                      Subtitle B--Other Provisions

Sec. 611. Inclusion of Indian women with breast or cervical cancer in 
              optional medicaid eligibility category.
Sec. 612. Increase in floor for treatment as an extremely low DSH State 
              to 3 percent in fiscal year 2002.
Sec. 613. Moratorium on changes to certain upper payment limits under 
              medicaid.
Sec. 614. Revision and simplification of the Transitional Medical 
              Assistance Program (TMA).

          TITLE VII--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

Sec. 701. Short title.
Sec. 702. Federal-State agreements.
Sec. 703. Temporary supplemental unemployment compensation account.
Sec. 704. Payments to States having agreements under this title.
Sec. 705. Financing provisions.
Sec. 706. Fraud and overpayments.
Sec. 707. Definitions.
Sec. 708. Applicability.

              TITLE VIII--EMERGENCY AGRICULTURE ASSISTANCE

                   Subtitle A--Income Loss Assistance

Sec. 801. Income loss assistance.
Sec. 802. Livestock assistance program.
Sec. 803. Commodity purchases.

                       Subtitle B--Administration

Sec. 811. Commodity Credit Corporation.
Sec. 812. Administrative expenses.
Sec. 813. Regulations.

                    TITLE IX--ADDITIONAL PROVISIONS

Sec. 901. Credit to holders of qualified Amtrak bonds.
Sec. 902. Broadband Internet access tax credit.
Sec. 903. Citrus tree canker relief.
Sec. 904. Allowance of electronic 1099s.
Sec. 905. Clarification of excise tax exemptions for agricultural 
              aerial applicators.
Sec. 906. Recovery period for certain wireless telecommunications 
              equipment.
Sec. 907. Special rules for taxation of life insurance companies for 
              2001 and 2002.
Sec. 908. No impact on social security trust funds.
Sec. 909. Emergency designation.

                       TITLE X--HOMELAND DEFENSE

         TITLE I--SUPPLEMENTAL REBATE FOR INDIVIDUAL TAXPAYERS

     SEC. 101. SUPPLEMENTAL REBATE.

       (a) In General.--Section 6428 (relating to acceleration of 
     10 percent income tax rate bracket benefit for 2001) is 
     amended by adding at the end the following new subsection:
       ``(f) Supplemental Rebate.--
       ``(1) In general.--Each individual who was an eligible 
     individual for such individual's first taxable year beginning 
     in 2000 and who, before October 16, 2001--
       ``(A) filed a return of tax imposed by subtitle A for such 
     taxable year, or
       ``(B) filed a return of income tax with the government of 
     American Samoa, Guam, the Commonwealth of the Northern 
     Mariana Islands, the Commonwealth of Puerto Rico, or the 
     Virgin Islands of the United States,
     shall be treated as having made a payment against the tax 
     imposed by chapter 1 for such first taxable year in an amount 
     equal to the supplemental refund amount for such taxable 
     year.
       ``(2) Supplemental refund amount.--For purposes of this 
     subsection, the supplemental refund amount is an amount equal 
     to the excess (if any) of--
       ``(A)(i) $600 in the case of taxpayers to whom section 1(a) 
     applies,
       ``(ii) $500 in the case of taxpayers to whom section 1(b) 
     applies, and
       ``(iii) $300 in the case of taxpayers to whom subsections 
     (c) or (d) of section 1 applies, over
       ``(B) the amount of any advance refund amount paid to the 
     taxpayer under subsection (e).
       ``(3) Timing of payments.--In the case of any overpayment 
     attributable to this subsection, the Secretary shall, subject 
     to the provisions of this title, refund or credit such 
     overpayment as rapidly as possible.
       ``(4) No interest.--No interest shall be allowed on any 
     overpayment attributable to this subsection.
       ``(5) Special rule for certain nonresidents.--The 
     determination under subsection (c)(2) as to whether an 
     individual who filed a return of tax described in paragraph 
     (1)(B) is a nonresident alien individual shall, under rules 
     prescribed by the Secretary, be made by reference to the 
     possession or Commonwealth with which the return was filed 
     and not the United States.''.
       (b) Technical Correction.--
       (1) In general.--Subsection (b) of section 6428 is amended 
     to read as follows:
       ``(b) Credit Treated as Nonrefundable Personal Credit.--For 
     purposes of this title, the credit allowed under this section 
     shall be treated as a credit allowable under subpart A of 
     part IV of subchapter A of chapter 1.''.
       (2) Conforming amendments.--
       (A) Subsection (d) of section 6428 is amended to read as 
     follows:

[[Page S11835]]

       ``(d) Coordination with Advance Refunds of Credit.--
       ``(1) In general.--The amount of credit which would (but 
     for this paragraph) be allowable under this section shall be 
     reduced (but not below zero) by the aggregate refunds and 
     credits made or allowed to the taxpayer under subsection (e). 
     Any failure to so reduce the credit shall be treated as 
     arising out of a mathematical or clerical error and assessed 
     according to section 6213(b)(1).
       ``(2) Joint returns.--In the case of a refund or credit 
     made or allowed under subsection (e) with respect to a joint 
     return, half of such refund or credit shall be treated as 
     having been made or allowed to each individual filing such 
     return.''.
       (B) Paragraph (2) of section 6428(e) is amended to read as 
     follows:
       ``(2) Advance refund amount.--For purposes of paragraph 
     (1), the advance refund amount is the amount that would have 
     been allowed as a credit under this section for such first 
     taxable year if--
       ``(A) this section (other than subsections (b) and (d) and 
     this subsection) had applied to such taxable year, and
       ``(B) the credit for such taxable year were not allowed to 
     exceed the excess (if any) of--
       ``(i) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(ii) the sum of the credits allowable under part IV of 
     subchapter A of chapter 1 (other than the credits allowable 
     under subpart C thereof, relating to refundable credits).''.
       (c) Conforming Amendments.--
       (1) Paragraph (1) of section 6428(d), as amended by 
     subsection (b), is amended by striking ``subsection (e)'' and 
     inserting ``subsections (e) and (f)''.
       (2) Paragraph (2) of section 6428(d), as amended by 
     subsection (b), is amended by striking ``subsection (e)'' and 
     inserting ``subsection (e) or (f)''.
       (3) Paragraph (3) of section 6428(e) is amended by striking 
     ``December 31, 2001'' and inserting ``the date of the 
     enactment of the Economic Recovery and Assistance for 
     American Workers Act of 2001''.
       (d) Reporting Requirement.--For purposes of determining the 
     individuals who are eligible for the supplemental rebate 
     under section 6428(f) of the Internal Revenue Code of 1986, 
     the governments of American Samoa, Guam, the Commonwealth of 
     the Northern Mariana Islands, the Commonwealth of Puerto 
     Rico, and the Virgin Islands of the United States shall 
     provide, at such time and in such manner as provided by the 
     Secretary of the Treasury, the names, addresses, and taxpayer 
     identifying numbers (within the meaning of section 6109 of 
     the Internal Revenue Code of 1986) of residents who filed 
     returns of income tax with such governments for 2000.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Technicals.--The amendments made by subsection (b) 
     shall take effect as if included in the amendment made by 
     section 101(b)(1) of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001.

             TITLE II--TEMPORARY BUSINESS RELIEF PROVISIONS

     SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN 
                   PROPERTY.

       (a) In General.--Section 168 (relating to accelerated cost 
     recovery system) is amended by adding at the end the 
     following new subsection:
       ``(k) Special Allowance for Certain Property Acquired After 
     September 10, 2001, and Before September 11, 2002.--
       ``(1) Additional allowance.--In the case of any qualified 
     property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 10 percent of the 
     adjusted basis of the qualified property, and
       ``(B) the adjusted basis of the qualified property shall be 
     reduced by the amount of such deduction before computing the 
     amount otherwise allowable as a depreciation deduction under 
     this chapter for such taxable year and any subsequent taxable 
     year.
       ``(2) Qualified property.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified property' means 
     property--
       ``(i)(I) to which this section applies which has an 
     applicable recovery period of 20 years or less or which is 
     water utility property,
       ``(II) which is computer software (as defined in section 
     167(f)(1)(B)) for which a deduction is allowable under 
     section 167(a) without regard to this subsection,
       ``(III) which is qualified leasehold improvement property, 
     or
       ``(IV) which is eligible for depreciation under section 
     167(g),
       ``(ii) the original use of which commences with the 
     taxpayer after September 10, 2001,
       ``(iii) which is--

       ``(I) acquired by the taxpayer after September 10, 2001, 
     and before September 11, 2002, but only if no written binding 
     contract for the acquisition was in effect before September 
     11, 2001, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after September 10, 
     2001, and before September 11, 2002, and

       ``(iv) which is placed in service by the taxpayer before 
     January 1, 2003.
       ``(B) Exceptions.--
       ``(i) Alternative depreciation property.--The term 
     `qualified property' shall not include any property to which 
     the alternative depreciation system under subsection (g) 
     applies, determined--

       ``(I) without regard to paragraph (7) of subsection (g) 
     (relating to election to have system apply), and
       ``(II) after application of section 280F(b) (relating to 
     listed property with limited business use).

       ``(ii) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(C) Special rules.--
       ``(i) Self-constructed property.--In the case of a taxpayer 
     manufacturing, constructing, or producing property for the 
     taxpayer's own use, the requirements of clause (iii) of 
     subparagraph (A) shall be treated as met if the taxpayer 
     begins manufacturing, constructing, or producing the property 
     after September 10, 2001, and before September 11, 2002.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(ii), if property--

       ``(I) is originally placed in service after September 10, 
     2001, by a person, and
       ``(II) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in subclause (II).
       ``(D) Coordination with section 280f.--For purposes of 
     section 280F--
       ``(i) Automobiles.--In the case of a passenger automobile 
     (as defined in section 280F(d)(5)) which is qualified 
     property, the Secretary shall increase the limitation under 
     section 280F(a)(1)(A)(i) by $1,600.
       ``(ii) Listed property.--The deduction allowable under 
     paragraph (1) shall be taken into account in computing any 
     recapture amount under section 280F(b)(2).
       ``(3) Qualified leasehold improvement property.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified leasehold 
     improvement property' means any improvement to an interior 
     portion of a building which is nonresidential real property 
     if--
       ``(i) such improvement is made under or pursuant to a lease 
     (as defined in subsection (h)(7))--

       ``(I) by the lessee (or any sublessee) of such portion, or
       ``(II) by the lessor of such portion,

       ``(ii) such portion is to be occupied exclusively by the 
     lessee (or any sublessee) of such portion, and
       ``(iii) such improvement is placed in service more than 3 
     years after the date the building was first placed in 
     service.
       ``(B) Certain improvements not included.--Such term shall 
     not include any improvement for which the expenditure is 
     attributable to--
       ``(i) the enlargement of the building,
       ``(ii) any elevator or escalator,
       ``(iii) any structural component benefiting a common area, 
     and
       ``(iv) the internal structural framework of the building.
       ``(C) Definitions and special rules.--For purposes of this 
     paragraph--
       ``(i) Binding commitment to lease treated as lease.--A 
     binding commitment to enter into a lease shall be treated as 
     a lease, and the parties to such commitment shall be treated 
     as lessor and lessee, respectively.
       ``(ii) Related persons.--A lease between related persons 
     shall not be considered a lease. For purposes of the 
     preceding sentence, the term `related persons' means--

       ``(I) members of an affiliated group (as defined in section 
     1504), and
       ``(II) persons having a relationship described in 
     subsection (b) of section 267; except that, for purposes of 
     this clause, the phrase `80 percent or more' shall be 
     substituted for the phrase `more than 50 percent' each place 
     it appears in such subsection.

       ``(D) Improvements made by lessor.--In the case of an 
     improvement made by the person who was the lessor of such 
     improvement when such improvement was placed in service, such 
     improvement shall be qualified leasehold improvement property 
     (if at all) only so long as such improvement is held by such 
     person.''.
       (b) Allowance Against Alternative Minimum Tax.--
       (1) In general.--Section 56(a)(1)(A) (relating to 
     depreciation adjustment for alternative minimum tax) is 
     amended by adding at the end the following new clause:
       ``(iii) Additional allowance for certain property acquired 
     after september 10, 2001, and before september 11, 2002.--The 
     deduction under section 168(k) shall be allowed.''.
       (2) Conforming amendment.--Clause (i) of section 
     56(a)(1)(A) is amended by striking ``clause (ii)'' both 
     places it appears and inserting ``clauses (ii) and (iii)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 10, 
     2001, in taxable years ending after such date.

     SEC. 202. INCREASE IN SECTION 179 EXPENSING.

       (a) In General.--The table contained in section 179(b)(1) 
     (relating to dollar limitation) is amended to read as 
     follows:

                                                  ``If thThe applicable
                                                             amount is:
      2001.....................................................$24,000 
      2002.....................................................$35,000 
      2003 or thereafter....................................$25,000.''.


[[Page S11836]]


       (b) Temporary Increase in Amount of Property Triggering 
     Phaseout of Maximum Benefit.--Paragraph (2) of section 179(b) 
     is amended by inserting before the period ``($325,000 in the 
     case of taxable years beginning during 2002)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.

     SEC. 203. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED 
                   FOR 5 YEARS.

       (a) In General.--Paragraph (1) of section 172(b) (relating 
     to years to which loss may be carried) is amended by adding 
     at the end the following new subparagraph:
       ``(H) In the case of a taxpayer which has a net operating 
     loss for any taxable year ending in 2001, subparagraph (A)(i) 
     shall be applied by substituting `5' for `2' and subparagraph 
     (F) shall not apply.''.
       (b) Election To Disregard 5-Year Carryback.--Section 172 
     (relating to net operating loss deduction) is amended by 
     redesignating subsection (j) as subsection (k) and by 
     inserting after subsection (i) the following new subsection:
       ``(j) Election To Disregard 5-Year Carryback for Certain 
     Net Operating Losses.--Any taxpayer entitled to a 5-year 
     carryback under subsection (b)(1)(H) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(H). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.''.
       (c) Temporary Suspension of 90 Percent Limit on Certain NOL 
     Carrybacks.--Subparagraph (A) of section 56(d)(1) (relating 
     to general rule defining alternative tax net operating loss 
     deduction) is amended to read as follows:
       ``(A) the amount of such deduction shall not exceed the sum 
     of--
       ``(i) the lesser of--

       ``(I) the amount of such deduction attributable to net 
     operating losses (other than the deduction attributable to 
     carrybacks described in clause (ii)(I)), or
       ``(II) 90 percent of alternative minimum taxable income 
     determined without regard to such deduction, plus

       ``(ii) the lesser of--

       ``(I) the amount of such deduction attributable to 
     carrybacks of net operating losses for taxable years ending 
     in 2001, or
       ``(II) alternative minimum taxable income determined 
     without regard to such deduction reduced by the amount 
     determined under clause (i), and''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to net operating losses for taxable years ending 
     in 2001.

    TITLE III--TAX INCENTIVES AND RELIEF FOR VICTIMS OF TERRORISM, 
                  DISASTERS, AND DISTRESSED CONDITIONS

   Subtitle A--Tax Incentives for New York City and Distressed Areas

     SEC. 301. EXPANSION OF WORK OPPORTUNITY TAX CREDIT TARGETED 
                   CATEGORIES TO INCLUDE CERTAIN EMPLOYEES IN NEW 
                   YORK CITY.

       (a) In General.--For purposes of section 51 of the Internal 
     Revenue Code of 1986 (relating to work opportunity credit), a 
     New York Recovery Zone business employee shall be treated as 
     a member of a targeted group.
       (b) New York Recovery Zone Business Employee.--For purposes 
     of this section--
       (1) In general.--The term ``New York Recovery Zone business 
     employee'' means, with respect to the period beginning after 
     September 10, 2001, and ending before January 1, 2003, any 
     employee of a New York Recovery Zone business if--
       (A) substantially all the services performed during such 
     period by such employee for such business are performed in a 
     trade or business of such business located in an area 
     described in paragraph (2), and
       (B) with respect to any employee of such business described 
     in paragraph (2)(B), such employee is certified by the New 
     York State Department of Labor as not exceeding, when added 
     to all other employees previously certified with respect to 
     such period as New York Recovery Zone business employees with 
     respect to such business, the number of employees of such 
     business on September 11, 2001, in the New York Recovery 
     Zone.
       (2) New york recovery zone business.--The term ``New York 
     Recovery Zone business'' means any business establishment 
     which is--
       (A) located in the New York Recovery Zone, or
       (B) located in the City of New York, New York, outside the 
     New York Recovery Zone, as the result of the destruction or 
     damage of such establishment by the September 11, 2001, 
     terrorist attack.
       (3) New york recovery zone.--The term ``New York Recovery 
     Zone'' means the area located on or south of Canal Street, 
     East Broadway (east of its intersection with Canal Street), 
     or Grand Street (east of its intersection with East Broadway) 
     in the Borough of Manhattan in the City of New York, New 
     York.
       (4) Special rules for determining amount of credit.--For 
     purposes of applying subpart E of part IV of subchapter B of 
     chapter 1 of the Internal Revenue Code of 1986 to wages paid 
     or incurred to any New York Recovery Zone business employee--
       (A) section 51(a) of such Code shall be applied by 
     substituting ``qualified wages'' for ``qualified first-year 
     wages'',
       (B) section 51(d)(12)(A)(i) of such Code shall be applied 
     to the certification of individuals employed by a New York 
     Recovery Zone business before April 1, 2002, by substituting 
     ``on or before May 1, 2002'' for ``on or before the day on 
     which such individual begins work for the employer'',
       (C) subsections (c)(4) and (i)(2) of section 51 of such 
     Code shall not apply, and
       (D) in determining qualified wages, the following shall 
     apply in lieu of section 51(b) of such Code:
       (i) Qualified wages.--The term ``qualified wages'' means 
     the wages paid or incurred by the employer for work performed 
     during the period beginning on September 11, 2001, and ending 
     on December 31, 2002, to individuals who are New York 
     Recovery Zone business employees of such employer.
       (ii) Only first $12,000 of wages per taxable year taken 
     into account.--The amount of the qualified wages which may be 
     taken into account with respect to any individual shall not 
     exceed $12,000 per taxable year of the employer.
       (c) Credit Allowed Against Regular and Minimum Tax.--
       (1) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax) is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) Special rules for new york recovery zone business 
     employee credit.--
       ``(A) In general.--In the case of the New York Recovery 
     Zone business employee credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to such credit, and
       ``(ii) in applying paragraph (1) to such credit--

       ``(I) the tentative minimum tax shall be treated as being 
     zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the New York 
     Recovery Zone business employee credit).

       ``(B) New york recovery zone business employee credit.--For 
     purposes of this subsection, the term `New York Recovery Zone 
     business employee credit' means the portion of work 
     opportunity credit under section 51 determined under section 
     301 of the Economic Recovery and Assistance for American 
     Workers Act of 2001.''.
       (2) Conforming amendment.--Subclause (II) of section 
     38(c)(2)(A)(ii) is amended by inserting ``or the New York 
     Recovery Zone business employee credit'' after ``employment 
     credit''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending after September 11, 2001.

     SEC. 302. TAX-EXEMPT PRIVATE ACTIVITY BONDS FOR REBUILDING 
                   PORTION OF NEW YORK CITY DAMAGED IN THE 
                   SEPTEMBER 11, 2001, TERRORIST ATTACK.

       (a) Treatment as Qualified Bonds.--For purposes of the 
     Internal Revenue Code of 1986, any qualified NYC recovery 
     bond shall be treated as an exempt facility bond under 
     section 141(e) of such Code.
       (b) Qualified NYC Recovery Bond.--For purposes of this 
     section, the term ``qualified NYC recovery bond'' means any 
     bond which--
       (1) is issued by the State of New York or any political 
     subdivision thereof (or any agency, instrumentality or 
     constituted authority on behalf thereof), and
       (2) meets the requirements of subsections (c) through (f).
       (c) Designation Requirements.--A bond meets the 
     requirements of this subsection if it is issued as part of an 
     issue designated as a qualified NYC recovery bond by the 
     Mayor of the City of New York, New York, or an individual 
     specifically appointed to make such designation.
       (d) Issuance and Volume Requirements.--
       (1) In general.--Except as provided in paragraph (3), a 
     bond issued as part of an issue meets the requirements of 
     this subsection if such bond is issued during 2002 (or during 
     the period elected under paragraph (2)) and the aggregate 
     face amount of the bonds issued pursuant to such issue, when 
     added to the aggregate face amount of qualified NYC recovery 
     bonds previously issued, does not exceed $15,000,000,000.
       (2) Elective carryforward of unused limitation.--If the 
     volume cap under paragraph (1) exceeds the aggregate amount 
     of qualified NYC recovery bonds issued during 2002, the 
     issuing authority under subsection (b) may elect to carry 
     forward such excess volume cap for an additional 3-year 
     period under rules similar to the rules of section 146(f) of 
     the Internal Revenue Code of 1986 (other than paragraph (2) 
     thereof).
       (3) Certain Current Refundings Not Counted.--For purposes 
     of paragraph (1), there shall not be taken into account any 
     current refunding bond the proceeds of which are used to 
     refund any bond described in paragraph (1) to the extent the 
     face amount of such current refunding bond does not exceed 
     the outstanding face amount of the refunded bond.
       (e) Qualified Project Requirements.--
       (1) In general.--A bond meets the requirements of this 
     subsection if it is issued as part of an issue at least 95 
     percent of the net proceeds of which are to be used for 
     qualified project costs.

[[Page S11837]]

       (2) Qualified project costs.--For purposes of this 
     subsection--
       (A) In general.--The term ``qualified project costs'' 
     means--
       (i) with respect to a qualified project described in 
     paragraph (3)(A)(i), the costs of acquisition, construction, 
     reconstruction, and renovation of commercial real property 
     and residential rental real property, including--

       (I) buildings and their structural components,
       (II) fixed tenant improvements, and
       (III) public utility property, and

       (ii) with respect to a qualified project described in 
     paragraph (3)(A)(ii), the costs of acquisition, construction, 
     reconstruction, and renovation of commercial real property, 
     including--

       (I) buildings and their structural components, and
       (II) fixed tenant improvements.

       (B) Limitations.--
       (i) Residential rental real property.--Such term shall not 
     include costs with respect to residential rental real 
     property to the extent such costs for all such property 
     exceed 20 percent of the aggregate face amount of the bonds 
     issued under this section.
       (ii) Retail sales property.--Such term shall not include 
     costs with respect to property used for retail sales of 
     tangible property and functionally related and subordinate 
     property to the extent such costs for all such property 
     exceeds 10 percent of the aggregate face amount of the bonds 
     issued under this section.
       (iii) Movable fixtures and equipment.--Such term shall not 
     include costs with respect to movable fixtures and equipment.
       (3) Qualified projects.--For purposes of this subsection--
       (A) In general.--The term ``qualified project'' means any 
     project--
       (i) located within the New York Recovery Zone, or
       (ii) located within the City of New York, New York, but 
     outside of the New York Recovery Zone, but only if--

       (I) such project consists of at least 100,000 square feet 
     of usable office or other commercial space located in a 
     single building or multiple adjacent buildings, and
       (II) the aggregate face amount of the bonds issued to 
     finance such project, when added to the aggregate face amount 
     of all bonds issued to finance all other projects described 
     in this clause, does not exceed $7,000,000,000.

       (B) New york recovery zone.--The term ``New York Recovery 
     Zone'' means the area located on or south of Canal Street, 
     East Broadway (east of its intersection with Canal Street), 
     or Grand Street (east of its intersection with East Broadway) 
     in the Borough of Manhattan in the City of New York, New 
     York.
       (f) General Requirements.--A bond meets the requirements of 
     this subsection if it is issued as part of an issue which 
     meets the requirements of part IV of subchapter B of chapter 
     1 of the Internal Revenue Code of 1986 applicable to an 
     exempt facility bond, except as follows:
       (1) Sections 142(d) and 150(b)(2) (relating to qualified 
     residential rental project), and section 146 (relating to 
     volume cap) of such Code shall not apply to bonds issued 
     under this section.
       (2) The application of section 147(c) of such Code 
     (relating to limitation on use for land acquisition) shall be 
     determined by reference to the aggregate authorized face 
     amount of all bonds issued under this section rather than the 
     net proceeds of each issue.
       (3) Section 147(d) of such Code (relating to acquisition of 
     existing property not permitted) shall be applied by 
     substituting ``50 percent'' for ``15 percent'' each place it 
     appears.
       (4) Section 148(f)(4)(C) of such Code (relating to 
     exception from rebate for certain proceeds to be used to 
     finance construction expenditures) shall apply to 
     construction proceeds of bonds issued under this section.
       (5) Rules similar to the rules of section 143(a)(2)(A)(iv) 
     of such Code (relating to use of loan repayments) shall apply 
     to bonds issued under this section.
       (g) Bond Interest not an AMT Preference Item.--For purposes 
     of section 57(a)(5) of the Internal Revenue Code of 1986, a 
     qualified NYC recovery bond shall not be treated as a 
     specified private activity bond.
       (h) Separate Issue Treatment of Portions of an Issue.--This 
     section shall not apply to the portion of the proceeds of an 
     issue which (if issued as a separate issue) would be treated 
     as a qualified bond or as a bond that is not a private 
     activity bond (determined without regard to subsection (a)), 
     if the issuer elects to so treat such portion.
       (i) Net Proceeds.--For purposes of this section, the term 
     ``net proceeds'' has the meaning given such term by section 
     150(a)(3) of the Internal Revenue Code of 1986.
       (j) Interest on Debt Used To Purchase or Carry Qualified 
     NYC Recovery Bonds.--
       (1) In general.--Section 265(b)(3) (relating to exception 
     for certain tax-exempt obligations) is amended--
       (A) by inserting ``a tax-exempt obligation issued pursuant 
     to section 302 of the Economic Recovery and Assistance for 
     American Workers Act of 2001 or'' after ``means'' in 
     subparagraph (B)(i),
       (B) by inserting ``other than an obligation issued pursuant 
     to section 302 of the Economic Recovery and Assistance for 
     American Workers Act of 2001'' after ``of a qualified tax-
     exempt obligation'' in subparagraph (D)(ii), and
       (C) by adding at the end of subparagraph (D) the following 
     new clause:
       ``(iv) Refundings of certain obligations.--In the case of a 
     refunding (or a series of refundings) of a qualified tax-
     exempt obligation that is an obligation issued pursuant to 
     section 302 of the Economic Recovery and Assistance for 
     American Workers Act of 2001, the refunding obligation shall 
     be treated as a qualified tax-exempt obligation if the 
     refunding obligation meets the requirements of such 
     section.''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending on or after the date of 
     the enactment of this Act.

     SEC. 303. GAIN OR LOSS FROM PROPERTY DAMAGED OR DESTROYED IN 
                   NEW YORK RECOVERY ZONE.

       (a) General Rule.--For purposes of the Internal Revenue 
     Code of 1986, if a taxpayer elects the application of this 
     section with respect to any eligible property, then any gain 
     or loss on the disposition of the property shall be 
     determined without regard to any compensation (by insurance 
     or otherwise) received by the taxpayer for damages sustained 
     to the property as a result of the terrorist attacks 
     occurring on September 11, 2001. Such election shall be made 
     at such time and in such manner as the Secretary of the 
     Treasury may prescribe, and, once made, is irrevocable.
       (b) Limitation Based on Purchase of Replacement Property.--
       (1) In general.--Subsection (a) shall apply to compensation 
     received with respect to eligible property only to the extent 
     of the cost of any qualified replacement property purchased 
     by the taxpayer.
       (2) Allocation.--If the aggregate compensation received by 
     a taxpayer with respect to all eligible property exceeds the 
     aggregate cost of all qualified replacement property 
     purchased by the taxpayer, such cost shall be allocated to 
     such eligible property in accordance with rules prescribed by 
     the Secretary.
       (3) Special rule for consolidated groups.--For purposes of 
     paragraph (1), an affiliated group filing a consolidated 
     return may elect to treat any qualified replacement property 
     purchased by a member of the group as purchased by another 
     member of the group.
       (c) Eligible Property.--For purposes of this section, the 
     term ``eligible property'' means any tangible property--
       (1) which is section 1245 property (as defined in section 
     1245(a)(3) of the Internal Revenue Code of 1986) or qualified 
     leasehold improvement property (as defined in section 
     168(k)(3) of such Code),
       (2) substantially all of the use of which as of September 
     11, 2001, was in a business establishment of the taxpayer 
     located in the New York Recovery Zone, and
       (3) which was damaged or destroyed in the terrorist attacks 
     of September 11, 2001.
       (d) Qualified Replacement Property.--For purposes of this 
     section--
       (1) In general.--The term ``qualified replacement 
     property'' means tangible property--
       (A) which is described in subsection (c)(1),
       (B) which is purchased by the taxpayer on or after 
     September 11, 2001, and placed in service in the City of New 
     York, New York, before January 1, 2007,
       (C) the original use of which in such city begins with the 
     taxpayer, and
       (D) substantially all of the use of which is reasonably 
     expected to be in connection with a business establishment of 
     the taxpayer located in such city.
       (2) Recapture.--The Secretary shall, by regulations, 
     provide for the recapture of any Federal tax benefit provided 
     by this section in cases where a taxpayer ceases to use 
     property as qualified replacement property and such recapture 
     is necessary to prevent the avoidance of the purposes of this 
     section.
       (e) Coordination With Other Provisions of Code.--For 
     purposes of the Internal Revenue Code of 1986--
       (1) Special rule for treatment of unrecognized gain in 
     eligible property.--Sections 1245 and 1250 of such Code shall 
     not apply to any gain on the disposition of eligible property 
     not recognized by reason of this section.
       (2) Loss election not to apply to eligible property.--If a 
     taxpayer elects the application of this section with respect 
     to any eligible property, the taxpayer may not make an 
     election under section 165(i) of such Code with respect to 
     any loss attributable to the property.
       (3) Basis adjustments of qualified replacement property.--
       (A) In general.--The basis of any qualified replacement 
     property shall be reduced by the amount of any compensation 
     disregarded by reason of subsection (a).
       (B) Special rules for recapture.--For purposes of sections 
     1245 and 1250 of such Code, any reduction under subparagraph 
     (A) shall be treated as a deduction allowed for depreciation, 
     except that for purposes of section 1250(b) of such Code, the 
     determination of what would have been the depreciation 
     adjustments under the straight line method shall be made as 
     if there had been no reduction under subparagraph (A).
       (4) Special rules for applying section 1033.--For purposes 
     of applying section 1033 of such Code to converted property 
     which is eligible property with respect to which an election 
     under subsection (a) has been made--
       (A) the amount realized from the eligible property shall 
     not include any compensation

[[Page S11838]]

     received by the taxpayer which is disregarded by reason of 
     subsection (a), and
       (B) any qualified replacement property shall be disregarded 
     in determining whether property was acquired for the purposes 
     of replacing the converted property.
       (f) Other Definitions and Rules.--For purposes of this 
     section--
       (1) New york recovery zone.--The term ``New York Recovery 
     Zone'' means the area located on or south of Canal Street, 
     East Broadway (east of its intersection with Canal Street), 
     or Grand Street (east of its intersection with East Broadway) 
     in the Borough of Manhattan in the City of New York, New 
     York.
       (2) Time for assessment.--Rules similar to the rules of 
     subparagraphs (C) and (D) of section 1033(a)(2) of such Code 
     shall apply for purposes of this section.
       (3) Related party limitation.--Section 1033(i) of such Code 
     shall apply for purposes of this section.

     SEC. 304. REENACTMENT OF EXCEPTIONS FOR QUALIFIED-MORTGAGE-
                   BOND-FINANCED LOANS TO VICTIMS OF 
                   PRESIDENTIALLY DECLARED DISASTERS.

       Section 143(k)(11) (relating to special rules for 
     residences located in disaster areas) is amended--
       (1) by inserting ``damaged or destroyed by a disaster and'' 
     after ``In the case of a residence'',
       (2) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) Paragraph (4) of this subsection shall be applied by 
     substituting `$25,000' for `$15,000'.'', and
       (3) by inserting ``, and after December 31, 2001, and 
     before January 1, 2003'' after ``1999'' in the last sentence.

     SEC. 305. ONE-YEAR EXPANSION OF AUTHORITY FOR INDIAN TRIBES 
                   TO ISSUE TAX-EXEMPT PRIVATE ACTIVITY BONDS.

       (a) In General.--Section 7871(c) (relating to additional 
     requirements for tax-exempt bonds) is amended by adding at 
     the end the following new paragraph:
       ``(4) Exception for qualified indian private activity 
     bonds.--
       ``(A) In general.--In the case of any qualified Indian 
     private activity bond--
       ``(i) paragraph (2) shall not apply,
       ``(ii) such bond shall be treated as a qualified bond under 
     section 141(e), and
       ``(iii) section 146 shall not apply.
       ``(B) Qualified indian private activity bond.--For purposes 
     of this paragraph, the term `qualified Indian private 
     activity bond' means any bond which--
       ``(i) is issued by a qualified Indian tribal government--

       ``(I) as part of an issue 95 percent or more of the net 
     proceeds of which are to be used to provide qualified 
     residential rental projects (as determined under section 
     142(d), by substituting `statewide median gross income' for 
     `area median gross income'),
       ``(II) as part of a qualified mortgage issue (as defined in 
     section 143(a)(2)),
       ``(III) as part of an issue 95 percent or more of the net 
     proceeds of which are to be used to provide any facility 
     described in section 1394(b)(1) for any business (whether 
     tribally owned or not) that would qualify as an enterprise 
     zone business if the Indian reservation (as defined in 
     section 168(j)(6)) over which the qualified Indian tribal 
     government exercises general governmental authority were 
     treated as an empowerment zone, or
       ``(IV) as part of an issue to be used for more than 1 of 
     the purposes described in the preceding subclauses, and

       ``(ii) meets the requirements of subparagraphs (D) and (E).
       ``(C) Qualified indian tribal government.--For purposes of 
     this paragraph, the term `qualified Indian tribal government' 
     means an Indian tribal government which exercises general 
     governmental authority over an Indian reservation (as so 
     defined) with an unemployment rate among members of the tribe 
     of at least 25 percent. For purposes of the preceding 
     sentence, determinations of unemployment shall be made with 
     respect to any issuance of a bond under this section on the 
     basis of the most recent report published by the Bureau of 
     Indian Affairs under section 17(a) of the Indian Employment, 
     Training and Related Services Demonstration Act of 1992 (25 
     U.S.C. 3416(a)) before such issuance.
       ``(D) Designation requirements.--A bond meets the 
     requirements of this subparagraph if it is issued as part of 
     an issue designated as a qualified Indian private activity 
     bond for a purpose described in subclause (I), (II), or (III) 
     of subparagraph (B)(i) by the qualified Indian tribal 
     government.
       ``(E) Volume requirements.--
       ``(i) In general.--A bond issued as part of an issue meets 
     the requirements of this subparagraph if such bond is issued 
     during 2002 (or during the period elected under clause (ii)) 
     and the aggregate face amount of the bonds issued pursuant to 
     such issue, when added to the aggregate face amount of 
     qualified Indian private activity bonds previously issued by 
     such qualified Indian tribal government, does not exceed 
     $10,000,000.
       ``(ii) Elective carryforward of unused limitation.--If the 
     volume cap under clause (i) exceeds the aggregate amount of 
     qualified Indian private activity bonds issued during 2002, 
     the qualified Indian tribal government may elect to carry 
     forward such excess volume cap for an additional 3-year 
     period under rules similar to the rules of section 146(f) 
     (other than paragraph (2) thereof).
       ``(F) Application of section 42 to residential rental 
     projects financed by bonds under this paragraph.--In the case 
     of bonds described in subparagraph (B)(i)(I), issuance under 
     the requirements of subparagraph (E) shall be treated as 
     issuance under the requirements of section 146 for purposes 
     of determining the application of section 42 to projects 
     financed by the net proceeds of such bonds.
       ``(G) Special rule for determining enterprise zone 
     business.--For purposes of subparagraph (B)(i)(III), an 
     enterprise zone business shall not include any facility a 
     principal business of which is the sale of tobacco products 
     or highway motor fuels, unless the qualified Indian tribal 
     government has entered into an agreement with the State in 
     which such facility is located to collect applicable State 
     taxes on such products or fuels.
       ``(H) Bond interest not an amt preference item.--For 
     purposes of section 57(a)(5), a bond designated under 
     subparagraph (D) as a qualified Indian private activity bond 
     shall not be treated as a specified private activity bond.
       ``(I) Report.--The Secretary shall compile necessary data 
     from reports required under section 149(e) relating to the 
     issuance of bonds under this paragraph and shall report to 
     the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     not later than September 30 of any year following the 
     calendar year in which Indian tribal governments issued bonds 
     under this paragraph and the activities for which such bonds 
     were issued.''.
       (b) Conforming Amendments.--
       (1) Section 7871(c)(2) is amended by striking ``paragraph 
     (3)'' and inserting ``paragraphs (3) and (4)''.
       (2) Section 7871 is amended--
       (A) by striking clause (iii) of subsection (c)(3)(E), and
       (B) by adding at the end the following new subsection:
       ``(f) Net Proceeds.--For purposes of this section, the term 
     `net proceeds' has the meaning given such term by section 
     150(a)(3).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after December 31, 2001.

              Subtitle B--Victims of Terrorism Tax Relief

     SEC. 310. SHORT TITLE.

       This subtitle may be cited as the ``Victims of Terrorism 
     Tax Relief Act of 2001''.

PART I--RELIEF PROVISIONS FOR VICTIMS OF APRIL 19, 1995, AND SEPTEMBER 
                      11, 2001, TERRORIST ATTACKS

     SEC. 311. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF TERRORIST 
                   ATTACKS.

       (a) In General.--Section 692 (relating to income taxes of 
     members of Armed Forces on death) is amended by adding at the 
     end the following new subsection:
       ``(d) Certain Individuals Dying as a Result of April 19, 
     1995, and September 11, 2001, Terrorist Attacks.--
       ``(1) In general.--In the case of any individual who dies 
     as a result of wounds or injury incurred as a result of the 
     terrorist attacks against the United States on April 19, 
     1995, or September 11, 2001, any tax imposed by this subtitle 
     shall not apply--
       ``(A) with respect to the taxable year in which falls the 
     date of such individual's death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds or injury were incurred.
       ``(2) Exceptions.--
       ``(A) Taxation of certain benefits.--Subject to such rules 
     as the Secretary may prescribe, paragraph (1) shall not apply 
     to the amount of any tax imposed by this subtitle which would 
     be computed by only taking into account the items of income, 
     gain, or other amounts attributable to--
       ``(i) amounts payable in the taxable year by reason of the 
     death of an individual described in paragraph (1) which would 
     have been payable in such taxable year if the death had 
     occurred by reason of an event other than the terrorist 
     attacks against the United States on April 19, 1995, or 
     September 11, 2001, or
       ``(ii) amounts payable in the taxable year which would not 
     have been payable in such taxable year but for an action 
     taken after April 19, 1995, or after September 11, 2001 (as 
     the case may be).
       ``(B) No relief for perpetrators.--Paragraph (1) shall not 
     apply with respect to any individual identified by the 
     Attorney General to have been a participant or conspirator in 
     any such terrorist attack, or a representative of such 
     individual.''.
       (b) Refund of Other Taxes Paid.--Section 692, as amended by 
     subsection (a), is amended by adding at the end the following 
     new subsection:
       ``(e) Refund of Other Taxes Paid.--In determining the 
     amount of tax under this section to be credited or refunded 
     as an overpayment with respect to any individual for any 
     period, such amount shall be increased by an amount equal to 
     the amount of taxes imposed and collected under chapter 21 
     and sections 3201(a), 3211(a)(1), and 3221(a) with respect to 
     such individual for such period.''.
       (c) Conforming Amendments.--
       (1) Section 5(b)(1) is amended by inserting ``and victims 
     of certain terrorist attacks'' before ``on death''.
       (2) Section 6013(f)(2)(B) is amended by inserting ``and 
     victims of certain terrorist attacks'' before ``on death''.
       (d) Clerical Amendments.--
       (1) The heading of section 692 is amended to read as 
     follows:

[[Page S11839]]

     ``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED 
                   FORCES AND VICTIMS OF CERTAIN TERRORIST ATTACKS 
                   ON DEATH.''.

       (2) The item relating to section 692 in the table of 
     sections for part II of subchapter J of chapter 1 is amended 
     to read as follows:

``Sec. 692. Income and employment taxes of members of Armed Forces and 
              victims of certain terrorist attacks on death.''.

       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 312. ESTATE TAX REDUCTION.

       (a) In General.--Section 2201 is amended to read as 
     follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.

       ``(a) In General.--Unless the executor elects not to have 
     this section apply, in applying section 2001 to the estate of 
     a qualified decedent, the rate schedule set forth in 
     subsection (c) shall be deemed to be the rate schedule set 
     forth in section 2001(c).
       ``(b) Qualified Decedent.--For purposes of this section, 
     the term `qualified decedent' means--
       ``(1) any citizen or resident of the United States dying 
     while in active service of the Armed Forces of the United 
     States, if such decedent--
       ``(A) was killed in action while serving in a combat zone, 
     as determined under section 112(c), or
       ``(B) died as a result of wounds, disease, or injury 
     suffered while serving in a combat zone (as determined under 
     section 112(c)), and while in the line of duty, by reason of 
     a hazard to which such decedent was subjected as an incident 
     of such service, or
       ``(2) any individual who died as a result of wounds or 
     injury incurred as a result of the terrorist attacks against 
     the United States on April 19, 1995, or September 11, 2001.
     Paragraph (2) shall not apply with respect to any individual 
     identified by the Attorney General to have been a participant 
     or conspirator in any such terrorist attack, or a 
     representative of such individual.
       ``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed 
The tentative tax is:
1 percent of the amount by which such amount exceeds $100,000..........
$500 plus 2 percent of the excess over $150,000........................
$1,500 plus 3 percent of the excess over $200,000......................
$4,500 plus 4 percent of the excess over $300,000......................
$12,500 plus 5 percent of the excess over $500,000.....................
$22,500 plus 6 percent of the excess over $700,000.....................
$34,500 plus 7 percent of the excess over $900,000.....................
$48,500 plus 8 percent of the excess over $1,100,000...................
$88,500 plus 9 percent of the excess over $1,600,000...................
$133,500 plus 10 percent of the excess over $2,100,000.................
$183,500 plus 11 percent of the excess over $2,600,000.................
$238,500 plus 12 percent of the excess over $3,100,000.................
$298,500 plus 13 percent of the excess over $3,600,000.................
$363,500 plus 14 percent of the excess over $4,100,000.................
$503,500 plus 15 percent of the excess over $5,100,000.................
$653,500 plus 16 percent of the excess over $6,100,000.................
$813,500 plus 17 percent of the excess over $7,100,000.................
$983,500 plus 18 percent of the excess over $8,100,000.................
$1,163,500 plus 19 percent of the excess over $9,100,000...............
$1,353,500 plus 20 percent of the excess over $10,100,000..............

       ``(d) Determination of Unified Credit.--In the case of an 
     estate to which this section applies, subsection (a) shall 
     not apply in determining the credit under section 2010.''.
       (b) Conforming Amendments.--
       (1) Section 2011 is amended by striking subsection (d) and 
     by redesignating subsections (e), (f), and (g) as subsections 
     (d), (e), and (f), respectively.
       (2) Section 2053(d)(3)(B) is amended by striking ``section 
     2011(e)'' and inserting ``section 2011(d)''.
       (3) Paragraph (9) of section 532(c) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is repealed.
       (c) Clerical Amendment.--The item relating to section 2201 
     in the table of sections for subchapter C of chapter 11 is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.
       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to estates of decedents--
       (A) dying on or after September 11, 2001, and
       (B) in the case of individuals dying as a result of the 
     April 19, 1995, terrorist attack, dying on or after April 19, 
     1995.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 313. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS 
                   EXEMPT PAYMENTS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) payments made by an organization described in section 
     501(c)(3) of such Code by reason of the death, injury, or 
     wounding of an individual incurred as the result of the 
     terrorist attacks against the United States on September 11, 
     2001, shall be treated as related to the purpose or function 
     constituting the basis for such organization's exemption 
     under section 501 of such Code if such payments are made 
     using an objective formula which is consistently applied, and
       (2) in the case of a private foundation (as defined in 
     section 509 of such Code), any payment described in paragraph 
     (1) shall not be treated as made to a disqualified person for 
     purposes of section 4941 of such Code.
       (b) Effective Date.--This section shall apply to payments 
     made on or after September 11, 2001.

     SEC. 314. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) gross income shall not include any amount which (but 
     for this section) would be includible in gross income by 
     reason of the discharge (in whole or in part) of indebtedness 
     of any taxpayer if the discharge is by reason of the death of 
     an individual incurred as the result of the terrorist attacks 
     against the United States on September 11, 2001, and
       (2) return requirements under section 6050P of such Code 
     shall not apply to any discharge described in paragraph (1).
       (b) Effective Date.--This section shall apply to discharges 
     made on or after September 11, 2001, and before January 1, 
     2002.

       PART II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND 
                  TERRORISTIC OR MILITARY ACTIONS

     SEC. 321. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 139 as section 140 and 
     inserting after section 138 the following new section:

     ``SEC. 139. DISASTER RELIEF PAYMENTS.

       ``(a) General Rule.--Gross income shall not include--
       ``(1) any amount received as payment under section 406 of 
     the Air Transportation Safety and System Stabilization Act, 
     or
       ``(2) any amount received by an individual as a qualified 
     disaster relief payment.
       ``(b) Qualified Disaster Relief Payment Defined.--For 
     purposes of this section, the term `qualified disaster relief 
     payment' means any amount paid to or for the benefit of an 
     individual--
       ``(1) to reimburse or pay reasonable and necessary 
     personal, family, living, or funeral expenses incurred as a 
     result of a qualified disaster,
       ``(2) to reimburse or pay reasonable and necessary expenses 
     incurred for the repair or rehabilitation of a personal 
     residence or repair or replacement of its contents to the 
     extent that the need for such repair, rehabilitation, or 
     replacement is attributable to a qualified disaster,
       ``(3) by a person engaged in the furnishing or sale of 
     transportation as a common carrier by reason of the death or 
     personal physical injuries incurred as a result of a 
     qualified disaster, or
       ``(4) if such amount is paid by a Federal, State, or local 
     government, or agency or instrumentality thereof, in 
     connection with a qualified disaster in order to promote the 
     general welfare,
     but only to the extent any expense compensated by such 
     payment is not otherwise compensated for by insurance or 
     otherwise.
       ``(c) Qualified Disaster Defined.--For purposes of this 
     section, the term `qualified disaster' means--
       ``(1) a disaster which results from a terroristic or 
     military action (as defined in section 692(c)(2)),
       ``(2) a Presidentially declared disaster (as defined in 
     section 1033(h)(3)),

[[Page S11840]]

       ``(3) a disaster which results from an accident involving a 
     common carrier, or from any other event, which is determined 
     by the Secretary to be of a catastrophic nature, or
       ``(4) with respect to amounts described in subsection 
     (b)(4), a disaster which is determined by an applicable 
     Federal, State, or local authority (as determined by the 
     Secretary) to warrant assistance from the Federal, State, or 
     local government or agency or instrumentality thereof.
       ``(d) Coordination With Employment Taxes.--For purposes of 
     chapter 2 and subtitle C, a qualified disaster relief payment 
     shall not be treated as net earnings from self-employment, 
     wages, or compensation subject to tax.
       ``(e) No Relief for Certain Individuals.--Subsection (a) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.''.
       (b) Conforming Amendments.--The table of sections for part 
     III of subchapter B of chapter 1 is amended by striking the 
     item relating to section 139 and inserting the following new 
     items:

``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 322. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND 
                   REQUIRED ACTIONS.

       (a) Expansion of Authority Relating to Disasters and 
     Terroristic or Military Actions.--Section 7508A is amended to 
     read as follows:

     ``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY 
                   REASON OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``(a) In General.--In the case of a taxpayer determined by 
     the Secretary to be affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3)) or a terroristic 
     or military action (as defined in section 692(c)(2)), the 
     Secretary may specify a period of up to one year that may be 
     disregarded in determining, under the internal revenue laws, 
     in respect of any tax liability of such taxpayer--
       ``(1) whether any of the acts described in paragraph (1) of 
     section 7508(a) were performed within the time prescribed 
     therefor (determined without regard to extension under any 
     other provision of this subtitle for periods after the date 
     (determined by the Secretary) of such disaster or action),
       ``(2) the amount of any interest, penalty, additional 
     amount, or addition to the tax for periods after such date, 
     and
       ``(3) the amount of any credit or refund.
       ``(b) Special Rules Regarding Pensions, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a disaster or action 
     described in subsection (a), the Secretary may specify a 
     period of up to one year which may be disregarded in 
     determining the date by which any action is required or 
     permitted to be completed under this title. No plan shall be 
     treated as failing to be operated in accordance with the 
     terms of the plan solely as the result of disregarding any 
     period by reason of the preceding sentence.
       ``(c) Special Rules for Overpayments.--The rules of section 
     7508(b) shall apply for purposes of this section.''.
       (b) Clarification of Scope of Acts Secretary May 
     Postpone.--Section 7508(a)(1)(K) (relating to time to be 
     disregarded) is amended by striking ``in regulations 
     prescribed under this section''.
       (c) Conforming Amendments to ERISA.--
       (1) Part 5 of subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1131 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON 
                   OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``In the case of a pension or other employee benefit plan, 
     or any sponsor, administrator, participant, beneficiary, or 
     other person with respect to such plan, affected by a 
     Presidentially declared disaster (as defined in section 
     1033(h)(3) of the Internal Revenue Code of 1986) or a 
     terroristic or military action (as defined in section 
     692(c)(2) of such Code), the Secretary may, notwithstanding 
     any other provision of law, prescribe, by notice or 
     otherwise, a period of up to one year which may be 
     disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (2) Section 4002 of Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1302) is amended by adding at the end the 
     following new subsection:
       ``(i) Special Rules Regarding Disasters, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3) of the Internal 
     Revenue Code of 1986) or a terroristic or military action (as 
     defined in section 692(c)(2) of such Code), the corporation 
     may, notwithstanding any other provision of law, prescribe, 
     by notice or otherwise, a period of up to one year which may 
     be disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (d) Additional Conforming Amendments.--
       (1) Section 6404 is amended--
       (A) by striking subsection (h),
       (B) by redesignating subsection (i) as subsection (h), and
       (C) by adding at the end the following new subsection:
       ``(i) Cross Reference.--

  ``For authority of the Secretary to abate certain amounts by reason 
of Presidentially declared disaster or terroristic or military action, 
see section 7508A.''.

       (2) Section 6081(c) is amended to read as follows:
       ``(c) Cross References.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.

       (3) Section 6161(d) is amended by adding at the end the 
     following new paragraph:
       ``(3) Postponement of certain acts.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.

       (d) Clerical Amendments.--
       (1) The item relating to section 7508A in the table of 
     sections for chapter 77 is amended to read as follows:

``Sec. 7508A. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.

       (2) The table of contents for the Employee Retirement 
     Income Security Act of 1974 is amended by inserting after the 
     item relating to section 517 the following new item:

``Sec. 518. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to disasters and terroristic or military actions 
     occurring on or after September 11, 2001, with respect to any 
     action of the Secretary of the Treasury, the Secretary of 
     Labor, or the Pension Benefit Guaranty Corporation occurring 
     on or after the date of the enactment of this Act.

     SEC. 323. INTERNAL REVENUE SERVICE DISASTER RESPONSE TEAM.

       (a) In General.--Section 7508A, as amended by section 
     322(a), is amended by adding at the end the following new 
     subsection:
       ``(d) Duties of Disaster Response Team.--The Secretary 
     shall establish as a permanent office in the national office 
     of the Internal Revenue Service a disaster response team 
     which, in coordination with the Federal Emergency Management 
     Agency, shall assist taxpayers in clarifying and resolving 
     Federal tax matters associated with or resulting from any 
     Presidentially declared disaster (as defined in section 
     1033(h)(3)) or a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 324. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR 
                   MILITARY ACTIONS.

       (a) Exclusion for Death Benefits.--Section 101 (relating to 
     certain death benefits) is amended by adding at the end the 
     following new subsection:
       ``(i) Certain Employee Death Benefits Payable by Reason of 
     Death From Terroristic or Military Actions.--
       ``(1) In general.--Gross income does not include amounts 
     which are received (whether in a single sum or otherwise) if 
     such amounts are paid by an employer by reason of the death 
     of an employee incurred as a result of a terroristic or 
     military action (as defined in section 692(c)(2)).
       ``(2) No relief for certain individuals.--Paragraph (1) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.
       ``(3) Treatment of self-employed individuals.--For purposes 
     of this subsection, the term `employee' includes a self-
     employed person (as described in section 401(c)(1)).''.
       (b) Disability Income.--Section 104(a)(5) (relating to 
     compensation for injuries or sickness) is amended by striking 
     ``a violent attack'' and all that follows through the period 
     and inserting ``a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (c) Exemption From Income Tax for Certain Military or 
     Civilian Employees.--Section 692(c) is amended--
       (1) by striking ``outside the United States'' in paragraph 
     (1), and
       (2) by striking ``Sustained Overseas'' in the heading.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

[[Page S11841]]

     SEC. 325. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX 
                   DEPOSITS.

       (a) In General.--Paragraph (3) of section 301(a) of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42) is amended to read as follows:
       ``(3) Airline-related deposit.--For purposes of this 
     subsection, the term `airline-related deposit' means any 
     deposit of taxes imposed by subchapter C of chapter 33 of 
     such Code (relating to transportation by air).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 301 of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42).

     SEC. 326. COORDINATION WITH AIR TRANSPORTATION SAFETY AND 
                   SYSTEM STABILIZATION ACT.

       No reduction in Federal tax liability by reason of any 
     provision of, or amendment made by, this title shall be 
     considered as being received from a collateral source for 
     purposes of section 402(4) of the Air Transportation Safety 
     and System Stabilization Act (Public Law 107-42).

          TITLE IV--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

     SEC. 401. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST 
                   REGULAR AND MINIMUM TAX LIABILITY.

       (a) In General.--Paragraph (2) of section 26(a) is 
     amended--
       (1) by striking ``rule for 2000 and 2001.--'' and inserting 
     ``rule for 2000, 2001, and 2002.--'', and
       (2) by striking ``during 2000 or 2001,'' and inserting 
     ``during 2000, 2001, or 2002,''.
       (b) Conforming Amendments.--
       (1) Section 904(h) is amended by striking ``during 2000 or 
     2001'' and inserting ``during 2000, 2001, or 2002''.
       (2) The amendments made by sections 201(b), 202(f), and 
     618(b) of the Economic Growth and Tax Relief Reconciliation 
     Act of 2001 shall not apply to taxable years beginning during 
     2002.
       (c) Technical Correction.--Section 24(d)(1)(B) is amended 
     by striking ``amount of credit allowed by this section'' and 
     inserting ``aggregate amount of credits allowed by this 
     subpart''.
       (d) Effective Dates.--
       (1) The amendments made by subsections (a) and (b) shall 
     apply to taxable years beginning after December 31, 2001.
       (2) The amendment made by subsection (c) shall apply to 
     taxable years beginning after December 31, 2000.

     SEC. 402. WORK OPPORTUNITY CREDIT.

       (a) In General.--Subparagraph (B) of section 51(c)(4) is 
     amended by striking ``2001'' and inserting ``2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 403. WELFARE-TO-WORK CREDIT.

       (a) In General.--Subsection (f) of section 51A is amended 
     by striking ``2001'' and inserting ``2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to individuals who begin work for the employer 
     after December 31, 2001.

     SEC. 404. CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLE 
                   RESOURCES.

       (a) In General.--Subparagraphs (A), (B), and (C) of section 
     45(c)(3) are each amended by striking ``2002'' and inserting 
     ``2003''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 405. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR 
                   OIL AND NATURAL GAS PRODUCED FROM MARGINAL 
                   PROPERTIES.

       (a) In General.--Subparagraph (H) of section 613A(c)(6) is 
     amended by striking ``2002'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 406. QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``2000, and 2001'' and inserting ``2000, 
     2001, and 2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 407. SUBPART F EXEMPTION FOR ACTIVE FINANCING.

       (a) In General.--
       (1) Section 953(e)(10) is amended--
       (A) by striking ``2002'' and inserting ``2003'', and
       (B) by striking ``2001'' and inserting ``2002''.
       (2) Section 954(h)(9) is amended by striking ``2002'' and 
     inserting ``2003''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 408. COVER OVER OF TAX ON DISTILLED SPIRITS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by striking ``2002'' and inserting ``2003''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 409. DELAY IN EFFECTIVE DATE OF REQUIREMENT FOR APPROVED 
                   DIESEL OR KEROSENE TERMINALS.

       Paragraph (2) of section 1032(f) of the Taxpayer Relief Act 
     of 1997 (Public Law 105-34) is amended by striking ``2002'' 
     and inserting ``2003''.

     SEC. 410. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN 
                   REFUELING PROPERTY.

       (a) In General.--Section 179A is amended--
       (1) in subsection (b)(1)(B)--
       (A) by striking ``December 31, 2001,'' and inserting 
     ``December 31, 2002,'', and
       (B) in clauses (i), (ii), and (iii), by striking ``2002'', 
     ``2003'', and ``2004'', respectively, and inserting ``2003'', 
     ``2004'', and ``2005'', respectively, and
       (2) in subsection (f), by striking ``2004'' and inserting 
     ``2005''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

     SEC. 411. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

       (a) In General.--Section 30 is amended--
       (1) in subsection (b)(2)--
       (A) by striking ``December 31, 2001,'' and inserting 
     ``December 31, 2002,'', and
       (B) in subparagraphs (A), (B), and (C), by striking 
     ``2002'', ``2003'', and ``2004'', respectively, and inserting 
     ``2003'', ``2004'', and ``2005'', respectively, and
       (2) in subsection (e), by striking ``2004'' and inserting 
     ``2005''.
       (b) Conforming Amendments.--
       (1) Subparagraph (C) of section 280F(a)(1) is amended by 
     adding at the end the following new clause
       ``(iii) Application of subparagraph.--This subparagraph 
     shall apply to property placed in service after August 5, 
     1997, and before January 1, 2005.''.
       (2) Subsection (b) of section 971 of the Taxpayer Relief 
     Act of 1997 is amended by striking ``and before January 1, 
     2005''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 412. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812 is amended 
     by striking ``2001'' and inserting ``2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning after December 31, 2001.

     SEC. 413. COMBINED EMPLOYMENT TAX REPORTING.

       (a) Demonstration Project.--Section 976 of the Taxpayer 
     Relief Act of 1997 is amended by striking ``with the date 
     which is 5 years after the date of the enactment of this 
     Act'' and inserting ``on December 31, 2002''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     TITLE V--EXTENSION OF ADDITIONAL PROVISIONS EXPIRING IN 2001.

     SEC. 501. GENERALIZED SYSTEM OF PREFERENCES.

       (a) Extension of Duty-Free Treatment Under System.--Section 
     505 of the Trade Act of 1974 (19 U.S.C. 2465) is amended by 
     striking ``September 30, 2001'' and inserting ``December 31, 
     2002''.
       (b) Retroactive Application for Certain Liquidations and 
     Reliquidations.--
       (1) In general.--
       (A) Entry of certain articles.--Notwithstanding section 514 
     of the Tariff Act of 1930 or any other provision of law, and 
     subject to paragraph (2), the entry--
       (i) of any article to which duty-free treatment under title 
     V of the Trade Act of 1974 would have applied if the entry 
     had been made on September 30, 2001;
       (ii) that was made after September 30, 2001, and before the 
     date of enactment of this Act; and
       (iii) to which duty-free treatment under title V of that 
     Act did not apply,
     shall be liquidated or reliquidated as free of duty, and the 
     Secretary of the Treasury shall refund any duty paid with 
     respect to such entry.
       (B) Entry.--In this subsection, the term ``entry'' includes 
     a withdrawal from warehouse for consumption.
       (2) Requests.--Liquidation or reliquidation may be made 
     under paragraph (1) with respect to an entry only if a 
     request therefor is filed with the Customs Service, within 
     180 days after the date of enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry; or
       (B) to reconstruct the entry if it cannot be located.
       (c) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2001.

     SEC. 502. ANDEAN TRADE PREFERENCE ACT.

       (a) In General.--Section 208(b) of the Andean Trade 
     Preference Act (19 U.S.C. 3206(b))is amended by striking ``10 
     years after December 4, 1991'' and inserting ``after June 4, 
     2002''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on December 5, 2001.

     SEC. 503. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE.

       (a) Assistance for Workers.--Section 245 of the Trade Act 
     of 1974 (19 U.S.C. 2317) is amended by striking ``October 1, 
     1998, and ending September 30, 2001,'' each place it appears 
     and inserting ``October 1, 2001, and ending December 31, 
     2002,''.
       (b) Assistance for Firms.--Section 256(b) of the Trade Act 
     of 1974 (19 U.S.C. 2346(b)) is amended by striking ``October 
     1, 1998, and ending September 30, 2001'' and inserting 
     ``October 1, 2001, and ending December 31, 2002,''.

[[Page S11842]]

       (c) Termination.--Section 285(c) of the Trade Act of 1974 
     (19 U.S.C. 2771 note) is amended in paragraphs (1) and 
     (2)(A), by striking ``September 30, 2001'' and inserting 
     ``December 31, 2002''.
       (d) Training Limitation Under NAFTA Program.--Section 
     250(d)(2) of the Trade Act of 1974 (19 U.S.C. 2331(d)(2)) is 
     amended by striking ``October 1, 1998, and ending September 
     30, 2001'' and inserting ``October 1, 2001, and ending 
     December 31, 2002''.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

                       TITLE VI--HEALTH INSURANCE

 Subtitle A--Health Insurance Coverage Options for Recently Unemployed 
                     Individuals and Their Families

     SEC. 601. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE 
                   FOR INDIVIDUALS AND THEIR FAMILIES.

       (a) Establishment.--
       (1) In general.--Not later than 30 days after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall establish a 
     program under which 75 percent of the premium for COBRA 
     continuation coverage shall be provided for an individual 
     who--
       (A) at any time during the period that begins on September 
     11, 2001, and ends on December 31, 2002, is separated from 
     employment; and
       (B) is eligible for, and has elected coverage under, COBRA 
     continuation coverage.
       (2) Inclusion of certain individuals.--For purposes of 
     paragraph (1), the spouse, child, or other individual who was 
     an insured under health insurance coverage of an individual 
     who was killed as a result of the terrorist-related aircraft 
     crashes on September 11, 2001, or as a result of any other 
     terrorist-related event occurring during the period described 
     in that paragraph, and who is eligible for, and has elected 
     coverage under, COBRA continuation coverage shall be eligible 
     for premium assistance under the program established under 
     this section.
       (3) State option to elect administration of program.--
       (A) In general.--A State may elect to administer the 
     premium assistance program established under this section if 
     the State submits to the Secretary of the Treasury, not later 
     than January 1, 2002, a plan that describes how the State 
     will administer such program on behalf of the individuals 
     described in paragraph (1) or (2) who reside in the State 
     beginning on that date.
       (B) State entitlement.--In the case of a State that submits 
     a plan under subparagraph (A), the Secretary of the Treasury 
     shall pay to each such State an amount for each quarter equal 
     to the total amount of premium subsidies provided in that 
     quarter on behalf of such individuals.
       (4) Immediate implementation.--The program established 
     under this section shall be implemented without regard to 
     whether or not final regulations to carry out such program 
     have been promulgated by the date described in paragraph (1).
       (b) Limitation of Period of Premium Assistance.--
       (1) In general.--Premium assistance provided in accordance 
     with this section shall end with respect to an individual on 
     the earlier of--
       (A) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (B) 12 months after the date the individual is first 
     enrolled in the premium assistance program established under 
     this section.
       (2) No assistance after december 31, 2002.--No premium 
     assistance (including payment for such assistance) may be 
     provided under this section after December 31, 2002.
       (c) Payment Arrangements; Crediting of Assistance.--
       (1) Provision of assistance.--
       (A) In general.--Premium assistance shall be provided under 
     the program established under this section through direct 
     payment arrangements with a group health plan (including a 
     multiemployer plan), an issuer of health insurance coverage, 
     an administrator, or an employer as appropriate with respect 
     to the individual provided such assistance.
       (B) Additional option for state-run program.--In the case 
     of a State that elects to administer the program established 
     under this section, such assistance may be provided through 
     the State public employment office or other agency 
     responsible for administering the State unemployment 
     compensation program.
       (2) Premiums payable by individual reduced by amount of 
     assistance.--Premium assistance provided under this section 
     shall be credited by the group health plan, issuer of health 
     insurance coverage, or an administrator against the premium 
     otherwise owed by the individual involved for COBRA 
     continuation coverage.
       (d) Program Requirements.--Premium assistance shall be 
     provided under the program established under this section 
     consistent with the following:
       (1) All qualifying individuals may apply.--All individuals 
     described in paragraph (1) or (2) of subsection (a) may apply 
     for such assistance at any time during the period described 
     in subsection (a)(1)(A).
       (2) Selection on first-come, first-served basis.--Such 
     assistance shall be provided to such individuals who apply 
     for the assistance in the order in which they apply.
       (e) Limitation on Entitlement.--Nothing in this section 
     shall be construed as establishing any entitlement of 
     individuals described in paragraph (1) or (2) of subsection 
     (a) to premium assistance under this section.
       (f) Disregard of Subsidies for Purposes of Federal and 
     State Programs.--Notwithstanding any other provision of law, 
     any premium assistance provided to, or on behalf of, an 
     individual under this section, shall not be considered income 
     or resources in determining eligibility for, or the amount of 
     assistance or benefits provided under, any other Federal 
     public benefit or State or local public benefit.
       (g) Change in COBRA Notice.--
       (1) General notice.--
       (A) In general.--In the case of notices provided under 
     section 4980B(f)(6) of the Internal Revenue Code of 1986, 
     section 2206 of the Public Health Service Act (42 U.S.C. 
     300bb-6), section 606 of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1166), or section 
     8905a(f)(2)(A) of title 5, United States Code, with respect 
     to individuals who, during the period described in subsection 
     (a)(1)(A), become entitled to elect COBRA continuation 
     coverage, such notices shall include an additional 
     notification to the recipient of the availability of premium 
     assistance for such coverage under this section and for 
     temporary medicaid assistance under section 603 for the 
     remaining portion of COBRA continuation premiums.
       (B) Alternative notice.--In the case of COBRA continuation 
     coverage to which the notice provision under such sections 
     does not apply, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall, in 
     coordination with administrators of the group health plans 
     (or other entities) that provide or administer the COBRA 
     continuation coverage involved, assure the provision of such 
     notice.
       (C) Form.--The requirement of the additional notification 
     under this paragraph may be met by amendment of existing 
     notice forms or by inclusion of a separate document with the 
     notice otherwise required.
       (2) Specific requirements.--Each additional notification 
     under paragraph (1) shall include--
       (A) the forms necessary for establishing eligibility and 
     enrollment in the premium assistance program established 
     under this section in connection with the coverage with 
     respect to each covered employee or other qualified 
     beneficiary;
       (B) the name, address, and telephone number necessary to 
     contact the administrator and any other person maintaining 
     relevant information in connection with the premium 
     assistance; and
       (C) the following statement displayed in a prominent 
     manner:
       ``You may be eligible to receive assistance with payment of 
     75 percent of your COBRA continuation coverage premiums and 
     with temporary medicaid coverage for the remaining premium 
     portion for a duration of not to exceed 12 months.''.
       (3) Notice relating to retroactive coverage.--In the case 
     of such notices previously transmitted before the date of 
     enactment of this Act in the case of an individual described 
     in paragraph (1) who has elected (or is still eligible to 
     elect) COBRA continuation coverage as of the date of 
     enactment of this Act, the administrator of the group health 
     plan (or other entity) involved or the Secretary of the 
     Treasury, in consultation with the Secretary of Labor, (in 
     the case described in the paragraph (1)(B)) shall provide 
     (within 60 days after the date of enactment of this Act) for 
     the additional notification required to be provided under 
     paragraph (1).
       (4) Model notices.--Not later than 30 days after the date 
     of enactment of this Act, the Secretary of the Treasury shall 
     prescribe models for the additional notification required 
     under this subsection.
       (h) Reports.--Beginning on January 1, 2002, and every 3 
     months thereafter until January 1, 2003, the Secretary of the 
     Treasury shall submit a report to Congress regarding the 
     premium assistance program established under this section 
     that includes the following:
       (1) The status of the implementation of the program.
       (2) The number of individuals provided assistance under the 
     program as of the date of the report.
       (3) The average dollar amount (monthly and annually) of the 
     premium assistance provided under the program.
       (4) The number and identification of the States that have 
     elected to administer the program.
       (5) The total amount of expenditures incurred (with 
     administrative expenditures noted separately) under the 
     program as of the date of the report.
       (i) Appropriation.--
       (1) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to carry out 
     this section, such sums as are necessary for each of fiscal 
     years 2002 and 2003.
       (2) Obligation of funds.--This section constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal Government to provide for the 
     payment of premium assistance under this section.
       (j) Sunset.--No premium assistance (including payment for 
     such assistance) may be provided under this section after 
     December 31, 2002.

     SEC. 602. STATE OPTION TO PROVIDE TEMPORARY MEDICAID COVERAGE 
                   FOR CERTAIN UNINSURED INDIVIDUALS.

       (a) State Option.--Notwithstanding any other provision of 
     law, a State may elect to provide under its medicaid program 
     under

[[Page S11843]]

     title XIX of the Social Security Act medical assistance in 
     the case of an individual--
       (1) who at any time during the period that begins on 
     September 11, 2001, and ends on December 31, 2002, is 
     separated from employment;
       (2) who is not eligible for COBRA continuation coverage;
       (3) who is uninsured; and
       (4) whose assets, resources, and earned or unearned income 
     (or both) do not exceed such limitations (if any) as the 
     State may establish.
       (b) Limitation of Period of Coverage.--Medical assistance 
     provided in accordance with this section shall end with 
     respect to an individual on the earlier of--
       (1) the date the individual is no longer uninsured; or
       (2) subject to subsection (c)(4), 12 months after the date 
     the individual first receives such assistance.
       (c) Special Rules.--In the case of medical assistance 
     provided under this section--
       (1) the Federal medical assistance percentage under section 
     1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) shall 
     be the enhanced FMAP (as defined in section 2105(b) of such 
     Act (42 U.S.C. 1397ee(b)));
       (2) a State may elect to apply any income, asset, or 
     resource limitation permitted under the State medicaid plan 
     or under title XIX of such Act;
       (3) the provisions of section 1916(g) of the Social 
     Security Act (42 U.S.C. 1396o) shall apply to the provision 
     of such assistance in the same manner as the provisions of 
     such section apply with respect to individuals provided 
     medical assistance only under subclause (XV) or (XVI) of 
     section 1902(a)(10)(A)(ii) of such Act (42 U.S.C. 
     1396a(a)(10)(A)(ii));
       (4) a State may elect to provide such assistance in 
     accordance with section 1902(a)(34) of the Social Security 
     Act (42 U.S.C. 1396a(a)(34)) and any assistance provided with 
     respect to a month described in that section shall not be 
     included in the determination of the 12-month period under 
     subsection (b)(2);
       (5) a State may elect to make eligible for such medical 
     assistance a dependent spouse or children of an individual 
     eligible for medical assistance under subsection (a), if such 
     spouse or children are uninsured;
       (6) individuals eligible for medical assistance under this 
     section shall be deemed to be described in the list of 
     individuals described in the matter preceding paragraph (1) 
     of section 1905(a) of such Act (42 U.S.C. 1396d(a));
       (7) a State may elect to provide such medical assistance 
     without regard to any limitation under sections 401(a), 
     402(b), 403, and 421 of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(a), 
     1612(b), 1613, and 1631) and no debt shall accrue under an 
     affidavit of support against any sponsor of an individual who 
     is an alien who is provided such assistance, and the cost of 
     such assistance shall not be considered as an unreimbursed 
     cost; and
       (8) the Secretary of Health and Human Services shall not 
     count, for purposes of section 1108(f) of the Social Security 
     Act (42 U.S.C. 1308(f)), such amount of payments under this 
     section as bears a reasonable relationship to the average 
     national proportion of payments made under this section for 
     the 50 States and the District of Columbia to the payments 
     otherwise made under title XIX for such States and District.
       (d) Sunset.--No medical assistance may be provided under 
     this section after December 31, 2002.

     SEC. 603. STATE OPTION TO PROVIDE TEMPORARY COVERAGE UNDER 
                   MEDICAID FOR THE UNSUBSIDIZED PORTION OF COBRA 
                   CONTINUATION PREMIUMS.

       (a) State Option.--
       (1) In general.--Notwithstanding any other provision of 
     law, a State may elect to provide under its medicaid program 
     under title XIX of the Social Security Act medical assistance 
     in the form of payment for the portion of the premium for 
     COBRA continuation coverage for which an individual does not 
     receive a subsidy under the premium assistance program 
     established under section 601 in the case of an individual--
       (A) who at any time during the period that begins on 
     September 11, 2001, and ends on December 31, 2002, is 
     separated from employment;
       (B) who is eligible for, and has elected coverage under, 
     COBRA continuation coverage;
       (C) who is receiving premium assistance under the program 
     established under section 601; and
       (D) whose family income does not exceed 200 percent of the 
     poverty line.
       (2) Inclusion of certain individuals.--For purposes of 
     paragraph (1), the spouse, child, or other individual who was 
     an insured under health insurance coverage of an individual 
     who was killed as a result of the terrorist-related aircraft 
     crashes on September 11, 2001, or as a result of any other 
     terrorist-related event occurring during the period described 
     in that paragraph, and who satisfies the requirements of 
     subparagraphs (B), (C), and (D) of paragraph (1) shall be 
     eligible for medical assistance under this section.
       (b) Limitation of Period of Coverage.--Medical assistance 
     provided in accordance with this section shall end with 
     respect to an individual on the earlier of--
       (1) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (2) 12 months after the date the individual first receives 
     such assistance under this section.
       (c) Special Rules.--In the case of medical assistance 
     provided under this section--
       (1) such assistance may be provided without regard to--
       (A) whether the State otherwise has elected to make medical 
     assistance available for COBRA premiums under section 
     1902(a)(10)(F) of the Social Security Act (42 U.S.C. 
     1396a(a)(10)(F)); or
       (B) the conditions otherwise imposed for the provision of 
     medical assistance for such COBRA premiums under clause (XII) 
     of the matter following section 1902(a)(10)(G) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(G)), or paragraphs 
     (1)(B), (1)(C), (1)(D), and (4) of section 1902(u) of such 
     Act (42 U.S.C. 1396a(u)); and
       (2) paragraphs (1), (2), (4), (5), (7), and (8) of 
     subsection (c) of section 602 apply to such assistance in the 
     same manner as such paragraphs apply to the provision of 
     medical assistance under that section.
       (d) Sunset.--No medical assistance may be provided under 
     this section after December 31, 2002.

     SEC. 604. TEMPORARY INCREASES OF MEDICAID FMAP FOR FISCAL 
                   YEAR 2002.

       (a) Permitting Maintenance of Fiscal Year 2001 FMAP.--
     Notwithstanding any other provision of law, but subject to 
     subsection (d), if the FMAP determined without regard to this 
     section for a State for fiscal year 2002 is less than the 
     FMAP as so determined for fiscal year 2001, the FMAP for the 
     State for fiscal year 2001 shall be substituted for the 
     State's FMAP for fiscal year 2002, before the application of 
     this section.
       (b) General 1.50 Percentage Points Increase.--
     Notwithstanding any other provision of law, but subject to 
     subsections (d) and (e), for each State for each calendar 
     quarter in fiscal year 2002, the FMAP (taking into account 
     the application of subsection (a)) shall be increased by 1.50 
     percentage points.
       (c) Further Increase for States with High Unemployment 
     Rates.--
       (1) In general.--Notwithstanding any other provision of 
     law, but subject to subsections (d) and (e), the FMAP for a 
     high unemployment State for a calendar quarter in fiscal year 
     2002 (and any subsequent calendar quarter in such fiscal year 
     regardless of whether the State continues to be a high 
     unemployment State for a calendar quarter in such fiscal 
     year) shall be increased (after the application of 
     subsections (a) and (b)) by 1.50 percentage points.
       (2) High unemployment state.--For purposes of this 
     subsection, a State is a high unemployment State for a 
     calendar quarter if, for any 3 consecutive months beginning 
     on or after June 2001 and ending with the second month before 
     the beginning of the calendar quarter, the State has an 
     unemployment rate that exceeds the national average 
     unemployment rate. Such unemployment rates for such months 
     shall be determined based on publications of the Bureau of 
     Labor Statistics of the Department of Labor.
       (d) 1-Year Increase in Cap On Medicaid Payments To 
     Territories.--Notwithstanding any other provision of law, 
     with respect to fiscal year 2002, the amounts otherwise 
     determined for Puerto Rico, the Virgin Islands, Guam, the 
     Northern Mariana Islands, and American Samoa under section 
     1108 of the Social Security Act (42 U.S.C. 1308) shall each 
     be increased by an amount equal to 3.093 percentage points of 
     such amounts.
       (e) Scope of Application.--The increases in the FMAP for a 
     State under this section shall apply only for purposes of 
     title XIX of the Social Security Act and shall not apply with 
     respect to--
       (1) disproportionate share hospital payments described in 
     section 1923 of such Act (42 U.S.C. 1396r-4); and
       (2) payments under titles IV and XXI of such Act (42 U.S.C. 
     601 et seq. and 1397aa et seq.).
       (f) State Eligibility.--A State is eligible for an increase 
     in its FMAP under subsection (b) or (c) only if the 
     eligibility under its State plan under title XIX of the 
     Social Security Act (including any waiver under such title or 
     under section 1115 of such Act (42 U.S.C. 1315)) is no more 
     restrictive than the eligibility under such plan (or waiver) 
     as in effect on October 1, 2001.

     SEC. 605. DEFINITIONS.

       In this subtitle:
       (1) Administrator.--The term ``administrator'' has the 
     meaning given that term in section 3(16)(A) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 
     1002(16)(A)).
       (2) COBRA continuation coverage.--
       (A) In general.--The term ``COBRA continuation coverage'' 
     means coverage under a group health plan provided by an 
     employer pursuant to title XXII of the Public Health Service 
     Act, section 4980B of the Internal Revenue Code of 1986, part 
     6 of subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974, or section 8905a of title 5, United 
     States Code.
       (B) Application to employers in states requiring such 
     coverage.--Such term includes such coverage provided by an 
     employer in a State that has enacted a law that requires the 
     employer to provide such coverage even though the employer 
     would not otherwise be required to provide such coverage 
     under the provisions of law referred to in subparagraph (A).

[[Page S11844]]

       (3) Covered employee.--The term ``covered employee'' has 
     the meaning given that term in section 607(2) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1167(2)).
       (4) Federal public benefit.--The term ``Federal public 
     benefit'' has the meaning given that term in section 401(c) 
     of the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 (8 U.S.C. 1611(c)).
       (5) FMAP.--The term ``FMAP'' means the Federal medical 
     assistance percentage, as defined in section 1905(b) of the 
     Social Security Act (42 U.S.C. 1396d(b)).
       (6) Group health plan.--The term ``group health plan'' has 
     the meaning given that term in section 2791(a) of the Public 
     Health Service Act (42 U.S.C. 300gg-91(a)) and in section 
     607(1) of the Employee Retirement Income Security Act of 1974 
     (29 U.S.C. 1167(1)).
       (7) Health insurance coverage.--The term ``health insurance 
     coverage'' has the meaning given that term in section 
     2791(b)(1) of the Public Health Service Act (42 U.S.C. 300gg-
     91(b)(1)).
       (8) Multiemployer plan.--The term ``multiemployer plan'' 
     has the meaning given that term in section 3(37) of the 
     Employee Retirement Income Security Act of 1974 (29 U.S.C. 
     1002(37)).
       (9) Poverty line.--The term ``poverty line'' has the 
     meaning given that term in section 2110(c)(5) of the Social 
     Security Act (42 U.S.C. 1397jj(c)(5)).
       (10) Qualified beneficiary.--The term ``qualified 
     beneficiary'' has the meaning given that term in section 
     607(3) of the Employee Retirement Income Security Act of 1974 
     (29 U.S.C. 1167(3)).
       (11) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).
       (12) State or local public benefit.--The term ``State or 
     local public benefit'' has the meaning given that term in 
     section 411(c) of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 (8 U.S.C. 1621(c)).
       (13) Uninsured.--
       (A) In general.--The term ``uninsured'' means, with respect 
     to an individual, that the individual is not covered under--
       (i) a group health plan;
       (ii) health insurance coverage; or
       (iii) a program under title XVIII, XIX, or XXI of the 
     Social Security Act (other than under such title XIX pursuant 
     to section 602).
       (B) Exclusion.--Such coverage under clause (i) or (ii) 
     shall not include coverage consisting solely of coverage of 
     excepted benefits (as defined in section 2791(c) of the 
     Public Health Service Act (42 U.S.C. 300gg-91(c)).

                      Subtitle B--Other Provisions

     SEC. 611. INCLUSION OF INDIAN WOMEN WITH BREAST OR CERVICAL 
                   CANCER IN OPTIONAL MEDICAID ELIGIBILITY 
                   CATEGORY.

       (a) In General.--Notwithstanding any other provision of 
     law, during fiscal year 2002, the subsection (aa) of section 
     1902 of the Social Security Act (42 U.S.C. 1396a) added by 
     section 2(a)(2) of the Breast and Cervical Cancer Prevention 
     and Treatment Act of 2000 (Public Law 106-354; 114 Stat. 
     1381) shall be applied as if ``, but applied without regard 
     to paragraph (1)(F) of such section'' were inserted before 
     the period in paragraph (4).
       (b) Technical Amendments.--
       (1) Section 1902 of the Social Security Act (42 U.S.C. 
     1396a), as amended by section 702(b) of the Medicare, 
     Medicaid, and SCHIP Benefits Improvement and Protection Act 
     of 2000 (as enacted into law by section 1(a)(6) of Public Law 
     106-554) (114 Stat. 2763A-572), is amended by redesignating 
     the subsection (aa) added by such section as subsection (bb).
       (2) Section 1902(a)(15) of the Social Security Act (42 
     U.S.C. 1396a(a)(15)), as added by section 702(a)(2) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (as so enacted into law) (114 Stat. 
     2763A-572), is amended by striking ``subsection (aa)'' and 
     inserting ``subsection (bb)''.
       (3) Section 1915(b) of the Social Security Act (42 U.S.C. 
     1396n(b)), as amended by section 702(c)(2) of the Medicare, 
     Medicaid, and SCHIP Benefits Improvement and Protection Act 
     of 2000 (as so enacted into law) (114 Stat. 2763A-574), is 
     amended by striking ``1902(aa)'' and inserting ``1902(bb)''.
       (4) The amendments made this subsection shall take effect 
     as if included in the enactment of section 702 of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (as enacted into law by section 
     1(a)(6) of Public Law 106-554) (114 Stat.2763A-572).

     SEC. 612. INCREASE IN FLOOR FOR TREATMENT AS AN EXTREMELY LOW 
                   DSH STATE TO 3 PERCENT IN FISCAL YEAR 2002.

       Section 1923(f)(5) of the Social Security Act (42 U.S.C. 
     1396r-4(f)(5)) is amended--
       (1) by striking ``In the case of'' and inserting the 
     following:
       ``(A) In general.--In the case of''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) Fiscal year 2002.--With respect to fiscal year 2002, 
     subparagraph (A) shall be applied--
       ``(i) as if `fiscal year 2000' were substituted for `fiscal 
     year 1999';
       ``(ii) as if `August 31, 2001' were substituted for `August 
     31, 2000';
       ``(iii) as if `3 percent' were substituted for `1 percent' 
     each place it appears;
       ``(iv) as if `fiscal year 2002' were substituted for 
     `fiscal year 2001'; and
       ``(v) without regard to the second sentence of that 
     subparagraph.''.

     SEC. 613. MORATORIUM ON CHANGES TO CERTAIN UPPER PAYMENT 
                   LIMITS UNDER MEDICAID.

       (a) In General.--Except as provided in subsection (b), 
     during the period that begins on October 1, 2001, and ends on 
     March 31, 2002, the Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') may not 
     implement any modification to the upper payment limit 
     requirements under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) for services furnished by non-State 
     government-owned or operated hospitals.
       (b) Exception.--The Secretary may implement any changes to 
     such limits that were published in the Federal Register as a 
     final rule before October 1, 2001.

     SEC. 614. REVISION AND SIMPLIFICATION OF THE TRANSITIONAL 
                   MEDICAL ASSISTANCE PROGRAM (TMA).

       (a) Option of Continuous Eligibility for 12 Months; Option 
     of Continuing Coverage for Up To An Additional Year.--
       (1) Option of continuous eligibility for 12 months by 
     making reporting requirements optional.--Section 1925(b) of 
     the Social Security Act (42 U.S.C. 1396r-6(b)) is amended--
       (A) in paragraph (1), by inserting ``, at the option of a 
     State,'' after ``and which'';
       (B) in paragraph (2)(A), by inserting ``Subject to 
     subparagraph (C)--'' after ``(A) Notices.--'';
       (C) in paragraph (2)(B), by inserting ``Subject to 
     subparagraph (C)--'' after ``(B) Reporting requirements.--'';
       (D) by adding at the end the following new subparagraph:
       ``(C) State option to waive notice and reporting 
     requirements.--A State may waive some or all of the reporting 
     requirements under clauses (i) and (ii) of subparagraph (B). 
     Insofar as it waives such a reporting requirement, the State 
     need not provide for a notice under subparagraph (A) relating 
     to such requirement.''; and
       (E) in paragraph (3)(A)(iii), by inserting ``the State has 
     not waived under paragraph (2)(C) the reporting requirement 
     with respect to such month under paragraph (2)(B) and if'' 
     after ``6-month period if''.
       (2) State option to extend eligibility for low-income 
     individuals for up to 12 additional months.--Section 1925 of 
     such Act (42 U.S.C. 1396r-6) is further amended--
       (A) by redesignating subsections (c) through (f) as 
     subsections (d) through (g); and
       (B) by inserting after subsection (b) the following new 
     subsection:
       ``(c) State Option of Up to 12 Months of Additional 
     Eligibility.--
       ``(1) In general.--Notwithstanding any other provision of 
     this title, each State plan approved under this title may 
     provide, at the option of the State, that the State shall 
     offer to each family which received assistance during the 
     entire 6-month period under subsection (b) and which meets 
     the applicable requirement of paragraph (2), in the last 
     month of the period the option of extending coverage under 
     this subsection for the succeeding period not to exceed 12 
     months.
       ``(2) Income restriction.--The option under paragraph (1) 
     shall not be made available to a family for a succeeding 
     period unless the State determines that the family's average 
     gross monthly earnings (less such costs for such child care 
     as is necessary for the employment of the caretaker relative) 
     as of the end of the 6-month period under subsection (b) does 
     not exceed 185 percent of the official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Omnibus 
     Budget Reconciliation Act of 1981) applicable to a family of 
     the size involved.
       ``(3) Application of extension rules.--The provisions of 
     paragraphs (2), (3), (4), and (5) of subsection (b) shall 
     apply to the extension provided under this subsection in the 
     same manner as they apply to the extension provided under 
     subsection (b)(1), except that for purposes of this 
     subsection--
       ``(A) any reference to a 6-month period under subsection 
     (b)(1) is deemed a reference to the extension period provided 
     under paragraph (1) and any deadlines for any notices or 
     reporting and the premium payment periods shall be modified 
     to correspond to the appropriate calendar quarters of 
     coverage provided under this subsection; and
       ``(B) any reference to a provision of subsection (a) or (b) 
     is deemed a reference to the corresponding provision of 
     subsection (b) or of this subsection, respectively.''.
       (b) State Option to Waive Receipt of Medicaid for 3 of 
     Previous 6 Months to Qualify for TMA.--Section 1925(a)(1) of 
     such Act (42 U.S.C. 1396r-6(a)(1)) is amended by adding at 
     the end the following: ``A State may, at its option, also 
     apply the previous sentence in the case of a family that was 
     receiving such aid for fewer than 3 months, or that had 
     applied for and was eligible for such aid for fewer than 3 
     months, during the 6 immediately preceding months described 
     in such sentence.''.
       (c) CMS Report on Enrollment and Participation Rates under 
     TMA.--Section 1925 of such Act (42 U.S.C. 1396r-6), as 
     amended by subsection (a)(2)(A), is amended--
       (1) by further redesignating subsection (g) as subsection 
     (i); and
       (2) by inserting after subsection (f) the following new 
     subsection:
       ``(g) Additional Provisions.--

[[Page S11845]]

       ``(1) Collection and reporting of participation 
     information.--
       ``(A) In general.--Each State shall--
       ``(i) collect and submit to the Secretary, in a format 
     specified by the Secretary, information on average monthly 
     enrollment and average monthly participation rates for adults 
     and children under this section; and
       ``(ii) make such information publicly available.
       ``(B) Timing of submission.--Information required to be 
     submitted under subparagraph (A)(i) shall be submitted under 
     that subparagraph at the same time and frequency in which 
     other enrollment information under this title is submitted to 
     the Secretary.
       ``(C) Annual report to congress.--The Secretary shall 
     submit to Congress annual reports concerning such rates using 
     the information required to be submitted under subparagraph 
     (A)(i).''.
       (d) Coordination of Work.--Section 1925(g) of such Act (42 
     U.S.C. 1396r-6), as added by subsection (c), is amended by 
     adding at the end the following new paragraph:
       ``(2) Coordination with administration for children and 
     families.--The Administrator of the Centers for Medicare & 
     Medicaid Services, in carrying out this section, shall work 
     with the Assistant Secretary for the Administration for 
     Children and Families to develop guidance or other technical 
     assistance for States regarding best practices in 
     guaranteeing access to transitional medical assistance under 
     this section.''.
       (e) Elimination of TMA Requirement for States that Extend 
     Coverage to Children and Parents Through 185 Percent of 
     Poverty.--
       (1) In general.--Section 1925 of such Act (42 U.S.C. 1396r-
     6), as amended by subsection (c), is further amended by 
     inserting after subsection (g) the following new subsection:
       ``(h) Provisions Optional for States That Extend Coverage 
     to Children and Parents Through 185 Percent of Poverty.--A 
     State may (but is not required to) meet the requirements of 
     subsections (a) and (b) if it provides for medical assistance 
     under this title (whether under section 1931, through a 
     waiver under section 1115, or otherwise) to families 
     (including both children and caretaker relatives) the average 
     gross monthly earning of which (less such costs for such 
     child care as is necessary for the employment of a caretaker 
     relative) is at or below a level that is at least 185 percent 
     of the official poverty line (as defined by the Office of 
     Management and Budget, and revised annually in accordance 
     with section 673(2) of the Omnibus Budget Reconciliation Act 
     of 1981) applicable to a family of the size involved.''.
       (2) Conforming amendments.--Section 1925 of such Act (42 
     U.S.C. 1396r-6) is further amended, in subsections (a)(1) and 
     (b)(1), by inserting ``, but subject to subsection (h),'' 
     after ``Notwithstanding any other provision of this title,'' 
     each place it appears.
       (f) Requirement of Notice for All Families Losing TANF.--
     Subsection (a)(2) of section 1925 of such Act (42 U.S.C. 
     1396r-6) is amended by adding after and below subparagraph 
     (B), the following:
     ``Each State shall provide, to families whose aid or 
     assistance under part A or E of title IV has terminated but 
     whose eligibility for medical assistance under this title 
     continues, written notice of their ongoing eligibility for 
     such medical assistance. If a State makes a determination 
     that any member of a family whose aid or assistance under 
     part A or E of title IV is being terminated is also no longer 
     eligible for medical assistance under this title, the notice 
     of such determination shall be supplemented by a 1-page 
     notification form describing the different ways in which 
     individuals and families may qualify for such medical 
     assistance and explaining that individuals and families do 
     not have to be receiving aid or assistance under part A or E 
     of title IV in order to qualify for such medical 
     assistance.''.
       (g) Extending Use of Outstationed Workers to Accept 
     Applications for Transitional Medical Assistance.--Section 
     1902(a)(55) of the Social Security Act (42 U.S.C. 
     1396a(a)(55)) is amended by inserting ``and under section 
     1931'' after ``(a)(10)(A)(ii)(IX)''.
       (h) Effective Dates.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3) , the amendments made by this section shall apply to 
     calendar quarters beginning on or after October 1, 2001, 
     without regard to whether final regulations to carry out such 
     amendments have been promulgated by such date.
       (2) Notice requirement.--The amendment made by subsection 
     (f) shall take effect on the date that is 6 months after the 
     date of enactment of this Act.
       (3) Extension of effective dates for state law amendment.--
     In the case of a State plan for medical assistance under 
     title XIX of the Social Security Act which the Secretary of 
     Health and Human Services determines requires State 
     legislation (other than legislation appropriating funds) in 
     order for the plan to meet the additional requirements 
     imposed by the amendments made by this section, the State 
     plan shall not be regarded as failing to comply with the 
     requirements of such title solely on the basis of its failure 
     to meet these additional requirements before the first day of 
     the first calendar quarter beginning after the close of the 
     first regular session of the State legislature that begins 
     after the date of the enactment of this Act. For purposes of 
     the previous sentence, in the case of a State that has a 2-
     year legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.

          TITLE VII--TEMPORARY ENHANCED UNEMPLOYMENT BENEFITS

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Temporary Unemployment 
     Compensation Act of 2001''.

     SEC. 702. FEDERAL-STATE AGREEMENTS.

       (a) In General.--Any State which desires to do so may enter 
     into and participate in an agreement under this title with 
     the Secretary of Labor (in this title referred to as the 
     ``Secretary''). Any State which is a party to an agreement 
     under this title may, upon providing 30 days' written notice 
     to the Secretary, terminate such agreement.
       (b) Provisions of Agreement.--
       (1) In general.--Any agreement under subsection (a) shall 
     provide that the State agency of the State will make--
       (A) payments of regular compensation to individuals in 
     amounts and to the extent that such payments would be 
     determined if the State law were applied with the 
     modifications described in paragraph (2); and
       (B) payments of temporary supplemental unemployment 
     compensation to individuals who--
       (i) have exhausted all rights to regular compensation under 
     the State law;
       (ii) do not, with respect to a week, have any rights to 
     compensation (excluding extended compensation) under the 
     State law of any other State (whether one that has entered 
     into an agreement under this title or otherwise) nor 
     compensation under any other Federal law (other than under 
     the Federal-State Extended Unemployment Compensation Act of 
     1970 (26 U.S.C. 3304 note)), and are not paid or entitled to 
     be paid any additional compensation under any Federal or 
     State law; and
       (iii) are not receiving compensation with respect to such 
     week under the unemployment compensation law of Canada.
       (2) Modifications described.--The modifications described 
     in this paragraph are as follows:
       (A) Alternative base period.--An individual shall be 
     eligible for regular compensation if the individual would be 
     so eligible, determined by applying--
       (i) the base period that would otherwise apply under the 
     State law if this title had not been enacted; or
       (ii) a base period ending at the close of the calendar 
     quarter most recently completed before the date of the 
     individual's application for benefits, provided that wage 
     data for that quarter has been reported to the State;
     whichever results in the greater amount.
       (B) Part-time employment.--An individual shall not be 
     denied regular compensation under the State law's provisions 
     relating to availability for work, active search for work, or 
     refusal to accept work, solely by virtue of the fact that 
     such individual is seeking, or is available for, only part-
     time (and not full-time) work, if--
       (i) the individual's employment on which eligibility for 
     the regular compensation is based was part-time employment; 
     or
       (ii) the individual can show good cause for seeking, or 
     being available for, only part-time (and not full-time) work.
       (C) Increased benefits.--
       (i) In general.--The amount of regular compensation 
     (including dependents' allowances) payable for any week shall 
     be equal to the amount determined under the State law (before 
     the application of this subparagraph), plus an amount equal 
     to the greater of--

       (I) 15 percent of the amount so determined; or
       (II) $25.

       (ii) Rounding.--For purposes of determining the amount 
     under clause (i)(I), such amount shall be rounded to the 
     dollar amount specified under State law.
       (c) Nonreduction Rule.--Under the agreement, subsection 
     (b)(2)(C) shall not apply (or shall cease to apply) with 
     respect to a State upon a determination by the Secretary that 
     the method governing the computation of regular compensation 
     under the State law of that State has been modified in a way 
     such that--
       (1) the average weekly amount of regular compensation which 
     will be payable during the period of the agreement 
     (determined disregarding the modifications described in 
     subsection (b)(2)) will be less than
       (2) the average weekly amount of regular compensation which 
     would otherwise have been payable during such period under 
     the State law, as in effect on September 11, 2001.
       (d) Coordination Rules.--
       (1) Regular compensation payable under a federal law.--The 
     modifications described in subsection (b)(2) shall also apply 
     in determining the amount of benefits payable under any 
     Federal law to the extent that those benefits are determined 
     by reference to regular compensation payable under the State 
     law of the State involved.
       (2) TSUC to serve as second-tier benefits.--Notwithstanding 
     any other provision of law, extended benefits shall not be 
     payable to any individual for any week for which temporary 
     supplemental unemployment compensation is payable to such 
     individual.
       (e) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(B)(i), an individual shall be considered to have 
     exhausted such individual's rights to regular compensation 
     under a State law when--
       (1) no payments of regular compensation can be made under 
     such law because such individual has received all regular 
     compensation available to such individual based on

[[Page S11846]]

     employment or wages during such individual's base period; or
       (2) such individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (f) Weekly Benefit Amount, Terms and Conditions, Etc. 
     Relating to TSUC.--For purposes of any agreement under this 
     title--
       (1) the amount of temporary supplemental unemployment 
     compensation which shall be payable to an individual for any 
     week of total unemployment shall be equal to the amount of 
     regular compensation (including dependents' allowances) 
     payable to such individual under the State law for a week for 
     total unemployment during such individual's benefit year;
       (2) the terms and conditions of the State law which apply 
     to claims for regular compensation and to the payment thereof 
     shall apply to claims for temporary supplemental unemployment 
     compensation and the payment thereof, except where 
     inconsistent with the provisions of this title or with the 
     regulations or operating instructions of the Secretary 
     promulgated to carry out this title; and
       (3) the maximum amount of temporary supplemental 
     unemployment compensation payable to any individual for whom 
     a temporary supplemental unemployment compensation account is 
     established under section 703 shall not exceed the amount 
     established in such account for such individual.

     SEC. 703. TEMPORARY SUPPLEMENTAL UNEMPLOYMENT COMPENSATION 
                   ACCOUNT.

       (a) In General.--Any agreement under this title shall 
     provide that the State will establish, for each eligible 
     individual who files an application for temporary 
     supplemental unemployment compensation, a temporary 
     supplemental unemployment compensation account.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to the lesser of--
       (A) 50 percent of the total amount of regular compensation 
     (including dependents' allowances) payable to the individual 
     during the individual's benefit year under such law; or
       (B) 13 times the individual's weekly benefit amount.
       (2) Weekly benefit amount.--For purposes of this 
     subsection, an individual's weekly benefit amount for any 
     week is the amount of regular compensation (including 
     dependents' allowances) under the State law payable to such 
     individual for such week for total unemployment.
       (3) Rule of construction.--For purposes of any computation 
     under paragraph (1) (and any determination of amount under 
     section 702(f)(1)), the modification described in section 
     702(b)(2)(C) (relating to increased benefits) shall be deemed 
     to have been in effect with respect to the entirety of the 
     benefit year involved.

     SEC. 704. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS 
                   TITLE.

       (a) General Rule.--There shall be paid to each State which 
     has entered into an agreement under this title an amount 
     equal to--
       (1) 100 percent of any regular compensation made payable to 
     individuals by such State by virtue of the modifications 
     which are described in section 702(b)(2) and deemed to be in 
     effect with respect to such State pursuant to section 
     702(b)(1)(A);
       (2) 100 percent of any regular compensation--
       (A) which is paid to individuals by such State by reason of 
     the fact that its State law contains provisions comparable to 
     the modifications described in subparagraphs (A) and (B) of 
     section 702(b)(2); but only
       (B) to the extent that those amounts would, if such amounts 
     were instead payable by virtue of the State law's being 
     deemed to be so modified pursuant to section 702(b)(1)(A), 
     have been reimbursable under paragraph (1); and
       (3) 100 percent of the temporary supplemental unemployment 
     compensation paid to individuals by the State pursuant to 
     such agreement.
       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this title shall be payable, either in 
     advance or by way of reimbursement (as may be determined by 
     the Secretary), in such amounts as the Secretary estimates 
     the State will be entitled to receive under this title for 
     each calendar month, reduced or increased, as the case may 
     be, by any amount by which the Secretary finds that the 
     Secretary's estimates for any prior calendar month were 
     greater or less than the amounts which should have been paid 
     to the State. Such estimates may be made on the basis of such 
     statistical, sampling, or other method as may be agreed upon 
     by the Secretary and the State agency of the State involved.
       (c) Administrative Expenses, Etc.--There is hereby 
     appropriated out of the employment security administration 
     account of the Unemployment Trust Fund (as established by 
     section 901(a) of the Social Security Act (42 U.S.C. 
     1101(a))) $500,000,000 to reimburse States for the costs of 
     the administration of agreements under this title (including 
     any improvements in technology in connection therewith) and 
     to provide reemployment services to unemployment compensation 
     claimants in States having agreements under this title. Each 
     State's share of the amount appropriated by the preceding 
     sentence shall be determined by the Secretary according to 
     the factors described in section 302(a) of the Social 
     Security Act (42 U.S.C. 501(a)) and certified by the 
     Secretary to the Secretary of the Treasury.

     SEC. 705. FINANCING PROVISIONS.

       (a) Benefits.--There is hereby appropriated, without fiscal 
     year limitation, out of funds in the Treasury not otherwise 
     appropriated such sums as may be necessary for the making of 
     payments (described in section 704(a)) to States having 
     agreements entered into under this title.
       (b) Additional Amounts.--There is hereby appropriated, 
     without fiscal year limitation, out of funds in the Treasury 
     not otherwise appropriated $6,000,000,000 to the extended 
     unemployment compensation account (as established by section 
     905(a) of the Social Security Act (42 U.S.C. 1105(a))).

     SEC. 706. FRAUD AND OVERPAYMENTS.

       (a) In General.--If an individual knowingly has made, or 
     caused to be made by another, a false statement or 
     representation of a material fact, or knowingly has failed, 
     or caused another to fail, to disclose a material fact, and 
     as a result of such false statement or representation or of 
     such nondisclosure such individual has received any regular 
     compensation or temporary supplemental unemployment 
     compensation under this title to which he was not entitled, 
     such individual--
       (1) shall be ineligible for any further benefits under this 
     title in accordance with the provisions of the applicable 
     State unemployment compensation law relating to fraud in 
     connection with a claim for unemployment compensation; and
       (2) shall be subject to prosecution under section 1001 of 
     title 18, United States Code.
       (b) Repayment.--In the case of individuals who have 
     received any regular compensation or temporary supplemental 
     unemployment compensation under this title to which such 
     individuals were not entitled, the State shall require such 
     individuals to repay those benefits to the State agency, 
     except that the State agency may waive such repayment if it 
     determines that--
       (1) the payment of such benefits was without fault on the 
     part of any such individual; and
       (2) such repayment would be contrary to equity and good 
     conscience.
       (c) Recovery by State Agency.--
       (1) In general.--The State agency may recover the amount to 
     be repaid, or any part thereof, by deductions from any 
     regular compensation or temporary supplemental unemployment 
     compensation payable to such individual under this title or 
     from any unemployment compensation payable to such individual 
     under any Federal unemployment compensation law administered 
     by the State agency or under any other Federal law 
     administered by the State agency which provides for the 
     payment of any assistance or allowance with respect to any 
     week of unemployment, during the 3-year period after the date 
     such individuals received the payment of the regular 
     compensation or temporary supplemental unemployment 
     compensation to which such individuals were not entitled, 
     except that no single deduction may exceed 50 percent of the 
     weekly benefit amount from which such deduction is made.
       (2) Opportunity for hearing.--No repayment shall be 
     required, and no deduction shall be made, until a 
     determination has been made, notice thereof and an 
     opportunity for a fair hearing has been given to the 
     individual, and the determination has become final.
       (d) Review.--Any determination by a State agency under this 
     section shall be subject to review in the same manner and to 
     the same extent as determinations under the State 
     unemployment compensation law, and only in that manner and to 
     that extent.

     SEC. 707. DEFINITIONS.

       For purposes of this title:
       (1) In general.--The terms ``compensation'', ``regular 
     compensation'', ``extended compensation'', ``additional 
     compensation'', ``benefit year'', ``base period'', ``State'', 
     ``State agency'', ``State law'', and ``week'' have the 
     respective meanings given such terms under section 205 of the 
     Federal-State Extended Unemployment Compensation Act of 1970, 
     subject to paragraph (2).
       (2) State law and regular compensation.--In the case of a 
     State entering into an agreement under this title--
       (A) ``State law'' shall be considered to refer to the State 
     law of such State, applied in conformance with the 
     modifications described in section 702(b)(2), subject to 
     section 702(c); and
       (B) ``regular compensation'' shall be considered to refer 
     to such compensation, determined under its State law (applied 
     in the manner described in subparagraph (A));
     except as otherwise provided or where the context clearly 
     indicates otherwise.

     SEC. 708. APPLICABILITY.

       (a) In General.--An agreement entered into under this title 
     shall apply to weeks of unemployment--
       (1) beginning after the date on which such agreement is 
     entered into; and
       (2) ending before January 1, 2003.
       (b) Specific Rules.--
       (1) In general.--Under such an agreement, the following 
     rules shall apply:
       (A) Alternative base periods.--The modification described 
     in section 702(b)(2)(A) (relating to alternative base 
     periods) shall not apply except in the case of initial claims 
     filed on or after the first day of the week that includes 
     September 11, 2001.

[[Page S11847]]

       (B) Part-time employment and increased benefits.--The 
     modifications described in subparagraphs (B) and (C) of 
     section 702(b)(2) (relating to part-time employment and 
     increased benefits, respectively) shall apply to weeks of 
     unemployment described in subsection (a), regardless of the 
     date on which an individual's initial claim for benefits is 
     filed.
       (C) Eligibility for tsuc.--The payments described in 
     section 702(b)(1)(B) (relating to temporary supplemental 
     unemployment compensation) shall not apply except in the case 
     of individuals exhausting their rights to regular 
     compensation (as described in clause (i) of such section) on 
     or after the first day of the week that includes September 
     11, 2001.
       (2) Reapplication process.--
       (A) Alternative base periods.--In the case of an individual 
     who filed an initial claim for regular compensation on or 
     after the first day of the week that includes September 11, 
     2001, and before the date that the State entered into an 
     agreement under subsection (a)(1) that was denied as a result 
     of the application of the base period that applied under the 
     State law prior to the date on which the State entered into 
     the such agreement, such individual--
       (i) may refile a claim for regular compensation based on 
     the modification described in section 702(b)(2)(A) (relating 
     to alternative base periods) on or after the date on which 
     the State enters into such agreement and before the date on 
     which such agreement terminates; and
       (ii) if eligible, shall be entitled to such compensation 
     only for weeks of unemployment described in subsection (a) 
     beginning on or after the date on which the individual files 
     such claim.
       (B) Part-time employment.--In the case of an individual who 
     before the date that the State entered into an agreement 
     under subsection (a)(1) was denied regular compensation under 
     the State law's provisions relating to availability for work, 
     active search for work, or refusal to accept work, solely by 
     virtue of the fact that such individual is seeking, or 
     available for, only part-time (and not full-time) work, such 
     individual--
       (i) may refile a claim for regular compensation based on 
     the modification described in section 702(b)(2)(B) (relating 
     to part-time employment) on or after the date on which the 
     State enters into the agreement under subsection (a)(1) and 
     before the date on which such agreement terminates; and
       (ii) if eligible, shall be entitled to such compensation 
     only for weeks of unemployment described in subsection (a) 
     beginning on or after the date on which the individual files 
     such claim.
       (3) No retroactive payments for weeks prior to agreement.--
     No amounts shall be payable to an individual under an 
     agreement entered into under this title for any week of 
     unemployment prior to the week beginning after the date on 
     which such agreement is entered into.

              TITLE VIII--EMERGENCY AGRICULTURE ASSISTANCE

                   Subtitle A--Income Loss Assistance

     SEC. 801. INCOME LOSS ASSISTANCE.

       (a) In General.--The Secretary of Agriculture (referred to 
     in this title as the ``Secretary'') shall use $1,800,000,000 
     of funds of the Commodity Credit Corporation to make 
     emergency financial assistance available to producers on a 
     farm that have incurred qualifying income losses in calendar 
     year 2001.
       (b) Administration.--The Secretary shall make assistance 
     available under this section in the same manner as provided 
     under section 815 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (Public Law 105-277; 114 Stat. 1549A-55), including 
     using the same loss thresholds for the quantity and economic 
     losses as were used in administering that section.
       (c) Use of Funds for Cash Payments.--The Secretary may use 
     funds made available under this section to make, in a manner 
     consistent with this section, cash payments not for crop 
     disasters, but for income loss to carry out the purposes of 
     this section.

     SEC. 802. LIVESTOCK ASSISTANCE PROGRAM.

       (a) In General.--The Secretary shall use $500,000,000 of 
     the funds of the Commodity Credit Corporation to make and 
     administer payments for livestock losses to producers for 
     2001 losses in a county that has received an emergency 
     designation by the President or the Secretary after January 
     1, 2001.
       (b) Administration.--The Secretary shall make assistance 
     available under this section in the same manner as provided 
     under section 806 of the Agriculture, Rural Development, Food 
     and Drug Administration, and Related Agencies Appropriations 
     Act, 2001 (Public Law 105-277; 114 Stat. 1549A-51).

     SEC. 803. COMMODITY PURCHASES.

       (a) In General.--The Secretary shall use $220,000,000 of 
     funds of the Commodity Credit Corporation to purchase 
     agricultural commodities, especially agricultural commodities 
     that have experienced low prices during the 2001 calendar 
     year, as determined by the Secretary.
       (b) Geographic Diversity.--The Secretary is encouraged to 
     purchase agricultural commodities under this section in a 
     manner that reflects the geographic diversity of agricultural 
     production in the United States, particularly agricultural 
     production in the Northeast and Mid-Atlantic States.
       (c) Other Purchases.--The Secretary shall ensure that 
     purchases of agricultural commodities under this section are 
     in addition to purchases by the Secretary under any other 
     law.
       (d) Transportation and Distribution Costs.--The Secretary 
     may use not more than $20,000,000 of the funds made available 
     under subsection (a) to provide assistance to States to cover 
     costs incurred by the States in transporting and distributing 
     agricultural commodities purchased under this section.
       (e) Purchases for School Nutrition Programs.--The Secretary 
     shall use not less than $55,000,000 of the funds made 
     available under subsection (a) to purchase agricultural 
     commodities of the type distributed under section 6(a) of the 
     Richard B. Russell National School Lunch Act (42 U.S.C. 
     1755(a)) for distribution to schools and service institutions 
     in accordance with section 6(a) of that Act.

                       Subtitle B--Administration

     SEC. 811. COMMODITY CREDIT CORPORATION.

       The Secretary shall use the funds, facilities, and 
     authorities of the Commodity Credit Corporation to carry out 
     this title.

     SEC. 812. ADMINISTRATIVE EXPENSES.

       (a) In General.--In addition to funds otherwise available, 
     not later than 30 days after the date of enactment of this 
     Act, out of any funds in the Treasury not otherwise 
     appropriated, the Secretary of the Treasury shall transfer to 
     the Secretary of Agriculture to pay the salaries and expenses 
     of the Department of Agriculture in carrying out this title 
     $50,400,000, to remain available until expended.
       (b) Receipt and Acceptance.--The Secretary shall be 
     entitled to receive, shall accept, and shall use to carry out 
     this section the funds transferred under subsection (a), 
     without further appropriation.

     SEC. 813. REGULATIONS.

       (a) In General.--The Secretary may promulgate such 
     regulations as are necessary to implement this title.
       (b) Procedure.--The promulgation of the regulations and 
     administration of this subtitle shall be made without regard 
     to--
       (1) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) the Statement of Policy of the Secretary of Agriculture 
     effective July 24, 1971 (36 Fed. Reg. 13804), relating to 
     notices of proposed rulemaking and public participation in 
     rulemaking; and
       (3) chapter 35 of title 44, United States Code (commonly 
     known as the ``Paperwork Reduction Act'').
       (c) Congressional Review of Agency Rulemaking.--In carrying 
     out this section, the Secretary shall use the authority 
     provided under section 808 of title 5, United States Code.

                    TITLE IX--ADDITIONAL PROVISIONS

     SEC. 901. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

       (a) In General.--Part IV of subchapter A of chapter 1 
     (relating to credits against tax) is amended by adding at the 
     end the following new subpart:

``Subpart H--Nonrefundable Credit for Holders of Qualified Amtrak Bonds

``Sec. 54. Credit to holders of qualified Amtrak bonds.

     ``SEC. 54. CREDIT TO HOLDERS OF QUALIFIED AMTRAK BONDS.

       ``(a) Allowance of Credit.--In the case of a taxpayer who 
     holds a qualified Amtrak bond on a credit allowance date of 
     such bond which occurs during the taxable year, there shall 
     be allowed as a credit against the tax imposed by this 
     chapter for such taxable year an amount equal to the sum of 
     the credits determined under subsection (b) with respect to 
     credit allowance dates during such year on which the taxpayer 
     holds such bond.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a qualified Amtrak bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any qualified Amtrak bond is the product of--
       ``(A) the applicable credit rate, multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Applicable credit rate.--For purposes of paragraph 
     (2), the applicable credit rate with respect to an issue is 
     the rate equal to an average market yield (as of the day 
     before the date of sale of the issue) on outstanding long-
     term corporate debt obligations (determined in such manner as 
     the Secretary prescribes).
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means--
       ``(A) March 15,
       ``(B) June 15,
       ``(C) September 15, and
       ``(D) December 15.
     Such term includes the last day on which the bond is 
     outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed.
       ``(c) Limitation Based on Amount of Tax.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the excess of--

[[Page S11848]]

       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this part 
     (other than this subpart and subpart C).
       ``(2) Carryover of unused credit.--If the credit allowable 
     under subsection (a) exceeds the limitation imposed by 
     paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such taxable year.
       ``(d) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(e) Qualified Amtrak Bond.--For purposes of this part, 
     the term `qualified Amtrak bond' means any bond issued as 
     part of an issue if--
       ``(1) 95 percent or more of the proceeds from the sale of 
     such issue are to be used for expenditures incurred after the 
     date of the enactment of this section for any qualified 
     project,
       ``(2) the bond is issued by the National Railroad Passenger 
     Corporation, is in registered form, and meets the bond 
     limitation requirements under subsection (f),
       ``(3) the issuer designates such bond for purposes of this 
     section,
       ``(4) the issuer certifies that it meets the State 
     contribution requirement of subsection (k) with respect to 
     such project, as in effect on the date of issuance,
       ``(5) the issuer certifies that it has obtained the written 
     approval of the Secretary of Transportation for such project 
     in accordance with subsection (l),
       ``(6) the term of each bond which is part of such issue 
     does not exceed 20 years,
       ``(7) the payment of principal with respect to such bond is 
     the obligation of the National Railroad Passenger 
     Corporation, and
       ``(8) the issue meets the requirements of subsection (g) 
     (relating to arbitrage).
       ``(f) Limitation on Amount of Bonds Designated.--
       ``(1) National limitation.--There is a qualified Amtrak 
     bond limitation for each calendar year. Such limitation is--
       ``(A) for 2002--
       ``(i) with respect to qualified projects described in 
     subparagraphs (A), (B), and (C) of subsection (j)(1), 
     $7,000,000,000, and
       ``(ii) with respect to the qualified project described in 
     subsection (j)(1)(D), $2,000,000,000, and
       ``(B) except as provided in paragraph (4), zero thereafter.
       ``(2) Limits on bonds for northeast rail corridor and 
     individual states.--
       ``(A) Northeast rail corridor.--Not more than 
     $2,000,000,000 of the limitation under paragraph (1) may be 
     designated for qualified projects on the northeast rail 
     corridor between Washington, D.C., and Boston, Massachusetts.
       ``(B) Individual states.--Not more than $2,000,000,000 of 
     the limitation under paragraph (1) may be designated for any 
     individual State. The dollar limitation under this 
     subparagraph is in addition to the dollar limitation for the 
     qualified projects described in subparagraph (A).
       ``(3) Set aside for bonds for non-federally designated 
     high-speed rail corridor projects.--Not less than 15 percent 
     of the limitation under paragraph (1) shall be designated for 
     qualified projects described in subsection (j)(1)(C).
       ``(4) Carryover of unused limitation.--If for any calendar 
     year--
       ``(A) the qualified Amtrak limitation amount, exceeds
       ``(B) the amount of bonds issued during such year which are 
     designated under subsection (e)(3),
     the qualified Amtrak limitation amount for the following 
     calendar year shall be increased by the amount of such 
     excess.
     Any carryforward of a qualified Amtrak limitation amount may 
     be carried only to calendar year 2003 or 2004.
       ``(g) Special Rules Relating to Arbitrage.--
       ``(1) In general.--Subject to paragraph (2), an issue shall 
     be treated as meeting the requirements of this subsection if 
     as of the date of issuance, the issuer reasonably expects--
       ``(A) to spend at least 95 percent of the proceeds from the 
     sale of the issue for 1 or more qualified projects within the 
     3-year period beginning on such date,
       ``(B) to incur a binding commitment with a third party to 
     spend at least 10 percent of the proceeds from the sale of 
     the issue, or to commence construction, with respect to such 
     projects within the 6-month period beginning on such date, 
     and
       ``(C) to proceed with due diligence to complete such 
     projects and to spend the proceeds from the sale of the 
     issue.
       ``(2) Rules regarding continuing compliance after 3-year 
     determination.--If at least 95 percent of the proceeds from 
     the sale of the issue is not expended for 1 or more qualified 
     projects within the 3-year period beginning on the date of 
     issuance, but the requirements of paragraph (1) are otherwise 
     met, an issue shall be treated as continuing to meet the 
     requirements of this subsection if either--
       ``(A) the issuer uses all unspent proceeds from the sale of 
     the issue to redeem bonds of the issue within 90 days after 
     the end of such 3-year period, or
       ``(B) the following requirements are met:
       ``(i) The issuer spends at least 75 percent of the proceeds 
     from the sale of the issue for 1 or more qualified projects 
     within the 3-year period beginning on the date of issuance.
       ``(ii) Either--

       ``(I) the issuer spends at least 95 percent of the proceeds 
     from the sale of the issue for 1 or more qualified projects 
     within the 4-year period beginning on the date of issuance, 
     or
       ``(II) the issuer pays to the Federal Government any 
     earnings on the proceeds from the sale of the issue that 
     accrue after the end of the 3-year period beginning on the 
     date of issuance and uses all unspent proceeds from the sale 
     of the issue to redeem bonds of the issue within 90 days 
     after the end of the 4-year period beginning on the date of 
     issuance.

       ``(h) Recapture of Portion of Credit Where Cessation of 
     Compliance.--
       ``(1) In general.--If any bond which when issued purported 
     to be a qualified Amtrak bond ceases to be such a qualified 
     bond, the issuer shall pay to the United States (at the time 
     required by the Secretary) an amount equal to the sum of--
       ``(A) the aggregate of the credits allowable under this 
     section with respect to such bond (determined without regard 
     to subsection (c)) for taxable years ending during the 
     calendar year in which such cessation occurs and the 2 
     preceding calendar years, and
       ``(B) interest at the underpayment rate under section 6621 
     on the amount determined under subparagraph (A) for each 
     calendar year for the period beginning on the first day of 
     such calendar year.
       ``(2) Failure to pay.--If the issuer fails to timely pay 
     the amount required by paragraph (1) with respect to such 
     bond, the tax imposed by this chapter on each holder of any 
     such bond which is part of such issue shall be increased (for 
     the taxable year of the holder in which such cessation 
     occurs) by the aggregate decrease in the credits allowed 
     under this section to such holder for taxable years beginning 
     in such 3 calendar years which would have resulted solely 
     from denying any credit under this section with respect to 
     such issue for such taxable years.
       ``(3) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (2) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     paragraph (2) shall not be treated as a tax imposed by this 
     chapter for purposes of determining--
       ``(i) the amount of any credit allowable under this part, 
     or
       ``(ii) the amount of the tax imposed by section 55.
       ``(i) Trust Account.--
       ``(1) In general.--The following amounts shall be held in a 
     trust account by a trustee independent of the National 
     Railroad Passenger Corporation:
       ``(A) The proceeds from the sale of all bonds designated 
     for purposes of this section.
       ``(B) The amount of any matching contributions with respect 
     to such bonds.
       ``(C) The investment earnings on proceeds from the sale of 
     such bonds.
       ``(D) Any earnings on any amounts described in subparagraph 
     (A), (B), or (C).
       ``(2) Use of funds.--Amounts in the trust account may be 
     used only to pay costs of qualified projects and redeem 
     qualified Amtrak bonds, except that amounts withdrawn from 
     the trust account to pay costs of qualified projects may not 
     exceed the aggregate proceeds from the sale of all qualified 
     Amtrak bonds issued under this section.
       ``(3) Use of remaining funds in trust account.--Upon the 
     redemption of all qualified Amtrak bonds issued under this 
     section, any remaining amounts in the trust account described 
     in paragraph (1) shall be available to the issuer for any 
     qualified project.
       ``(j) Qualified Project.--For purposes of this section--
       ``(1) In general.--The term `qualified project' means--
       ``(A) the acquisition, financing, or refinancing of 
     equipment, rolling stock, and other capital improvements 
     (including the introduction of new high-speed technologies 
     such as magnetic levitation systems), including track or 
     signal improvements or the elimination of grade crossings, 
     for the northeast rail corridor between Washington, D.C., and 
     Boston, Massachusetts,
       ``(B) the acquisition, financing, or refinancing of 
     equipment, rolling stock, and other capital improvements 
     (including the introduction of new high-speed technologies 
     such as magnetic levitation systems), including development 
     of intermodal facilities, track or signal improvements, or 
     the elimination of grade crossings, for the improvement of 
     train speeds or safety (or both) on the high-speed rail 
     corridors designated under section 104(d)(2) of title 23, 
     United States Code, as in effect on the date of the enactment 
     of this section,
       ``(C) the acquisition, financing, or refinancing of 
     equipment, rolling stock, and other capital improvements, 
     including station rehabilitation or construction, development 
     of intermodal facilities, track or signal improvements, or 
     the elimination of grade crossings, for the improvement of 
     train speeds or safety (or both) for other intercity 
     passenger rail corridors and for the Alaska Railroad, and
       ``(D) construction, installation of facilities, performance 
     of railroad force account

[[Page S11849]]

     work, and environmental impact studies that facilitate and 
     maximize intercity and regional rail system capacity and 
     connectivity intended to benefit all users, including the 
     National Passenger Rail Corporation, related to the 
     construction of the Trans Hudson Tunnel, an additional 
     railroad passenger tunnel connecting Newark, New Jersey to 
     the City of New York, New York.
       ``(2) Refinancing rules.--For purposes of paragraph (1), a 
     refinancing shall constitute a qualified project only if the 
     indebtedness being refinanced (including any obligation 
     directly or indirectly refinanced by such indebtedness) was 
     originally incurred by the issuer--
       ``(A) after the date of the enactment of this section,
       ``(B) for a term of not more than 3 years,
       ``(C) to finance or acquire capital improvements described 
     in paragraph (1), and
       ``(D) in anticipation of being refinanced with proceeds of 
     a qualified Amtrak bond.
       ``(k) State Contribution Requirements.--
       ``(1) In general.--For purposes of subsection (e)(4), the 
     State contribution requirement of this subsection is met with 
     respect to any qualified project if the National Railroad 
     Passenger Corporation has received from 1 or more States, not 
     later than the date of issuance of the bond, matching 
     contributions of not less than 20 percent of the cost of the 
     qualified project.
       ``(2) No state contribution requirement for certain 
     qualified projects.--The State contribution requirement of 
     this subsection is zero with respect to any project described 
     in subsection (j)(1)(C) for the Alaska Railroad.
       ``(3) State matching contributions may not include federal 
     funds.--For purposes of this subsection, State matching 
     contributions shall not be derived, directly or indirectly, 
     from Federal funds, including any transfers from the Highway 
     Trust Fund under section 9503.
       ``(l) Department of Transportation Approval for Qualified 
     Projects.--
       ``(1) In general.--The written approval of a qualified 
     project by the Secretary of Transportation required for 
     purposes of subsection (e)(5) shall include--
       ``(A) the finding by the Inspector General of the 
     Department of Transportation described in paragraph (2),
       ``(B) the certification by the Secretary of Transportation 
     described in paragraph (3), and
       ``(C) the agreement by the National Railroad Passenger 
     Corporation described in paragraph (4).
       ``(2) Finding by inspector general.--For purposes of 
     paragraph (1), the finding described in this paragraph is a 
     finding by the Inspector General of the Department of 
     Transportation that there is a reasonable likelihood that the 
     proposed project will result in a positive financial 
     contribution to the National Railroad Passenger Corporation 
     and that the investment evaluation process includes 
     consideration of a return on investment, leveraging of funds 
     (including State capital and operating contributions), cost 
     effectiveness, safety improvement, mobility improvement, and 
     feasibility.
       ``(3) Certification.--For purposes of paragraph (1), the 
     certification described in this paragraph is a certification 
     by the Secretary of Transportation that the issuer of the 
     qualified Amtrak bond--
       ``(A) except with respect to projects described in 
     subsection (j)(1)(C), has entered into a written agreement 
     with the owners of rail properties which are to be improved 
     by the project to be funded by the qualified Amtrak bond, as 
     to the scope and estimated cost of such project and the 
     impact on rail freight capacity, and
       ``(B) has met the State contribution requirements described 
     in subsection (k).
     The National Railroad Passenger Corporation shall not 
     exercise its rights under section 24308(a)(2) of title 49, 
     United States Code, to resolve disputes with respect to a 
     project to be funded by a qualified Amtrak bond, or with 
     respect to the cost of such a project, unless the project is 
     intended to result in railroad speeds of 79 miles per hour or 
     less.
       ``(4) Agreement by amtrak to issue additional bonds for 
     projects of other carriers.--
       ``(A) In general.--For purposes of paragraph (1), the 
     agreement described in this paragraph is an agreement by the 
     National Railroad Passenger Corporation with the Secretary of 
     Transportation to issue bonds which meet the requirements of 
     this section for use in financing projects described in 
     subparagraph (B).
       ``(B) Projects covered.--For purposes of subparagraph (A), 
     the projects described in this subparagraph are any project 
     described in subsection (j)(1)(B) or (j)(1)(C) for an 
     intercity rail passenger carrier other than the National 
     Railroad Passenger Corporation or for the Alaska Railroad.
       ``(C) Responsibility of intercity rail passenger carrier.--
     Any project financed by bonds referred to in subparagraph (A) 
     shall be carried out by the intercity rail passenger carrier 
     other than the National Railroad Passenger Corporation, 
     through a contract entered into by the National Railroad 
     Passenger Corporation with such carrier.
       ``(D) Intercity rail passenger carrier defined.--For 
     purposes of this paragraph, the term `intercity rail 
     passenger carrier' means any rail carrier (as defined in 
     section 24102(7) of such title 49, as in effect on the date 
     of the enactment of this section) which is part of the 
     interstate system of rail transportation and which provides 
     intercity rail passenger transportation (as defined in 
     section 24102(5) of such title 49 (as so in effect)).
       ``(5) Additional selection criteria.--In determining 
     projects to be approved under this subsection (other than 
     projects for the Alaska Railroad), or to be included in an 
     agreement under paragraph (4), the Secretary of 
     Transportation--
       ``(A) shall base such approval on--
       ``(i) the results of alternatives analysis and preliminary 
     engineering, and
       ``(ii) a comprehensive review of mobility improvements, 
     environmental benefits, cost effectiveness, and operating 
     efficiencies, and
       ``(B) shall give preference to--
       ``(i) projects supported by evidence of stable and 
     dependable financing sources to construct, maintain, and 
     operate the system or extension,
       ``(ii) projects expected to have a significant impact on 
     air traffic congestion,
       ``(iii) projects expected to also improve commuter rail 
     operations,
       ``(iv) projects that anticipate fares designed to recover 
     costs and generate a return on investment, and
       ``(v) projects that promote regional balance in 
     infrastructure investment and the national interest in 
     ensuring the development of a nationwide high-speed rail 
     transportation network.
       ``(m) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) Treatment of changes in use.--For purposes of 
     subsection (e)(1), the proceeds from the sale of an issue 
     shall not be treated as used for a qualified project to the 
     extent that the issuer takes any action within its control 
     which causes such proceeds not to be used for a qualified 
     project. The Secretary shall specify remedial actions that 
     may be taken (including conditions to taking such remedial 
     actions) to prevent an action described in the preceding 
     sentence from causing a bond to fail to be a qualified Amtrak 
     bond.
       ``(3) Partnership; s corporation; and other pass-thru 
     entities.--In the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under subsection (a).
       ``(4) Bonds held by regulated investment companies.--If any 
     qualified Amtrak bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(5) Reporting.--Issuers of qualified Amtrak bonds shall 
     submit reports similar to the reports required under section 
     149(e).''.
       (b) Amendments to Other Code Sections.--
       (1) Reporting.--Subsection (d) of section 6049 (relating to 
     returns regarding payments of interest) is amended by adding 
     at the end the following new paragraph:
       ``(8) Reporting of credit on qualified amtrak bonds.--
       ``(A) In general.--For purposes of subsection (a), the term 
     `interest' includes amounts includible in gross income under 
     section 54(d) and such amounts shall be treated as paid on 
     the credit allowance date (as defined in section 54(b)(4)).
       ``(B) Reporting to corporations, etc.--Except as otherwise 
     provided in regulations, in the case of any interest 
     described in subparagraph (A), subsection (b)(4) shall be 
     applied without regard to subparagraphs (A), (H), (I), (J), 
     (K), and (L)(i) of such subsection.
       ``(C) Regulatory authority.--The Secretary may prescribe 
     such regulations as are necessary or appropriate to carry out 
     the purposes of this paragraph, including regulations which 
     require more frequent or more detailed reporting.''.
       (2) Treatment for estimated tax purposes.--
       (A) Individual.--Section 6654 (relating to failure by 
     individual to pay estimated income tax) is amended by 
     redesignating subsection (m) as subsection (n) and by 
     inserting after subsection (l) the following new subsection:
       ``(m) Special Rule for Holders of Qualified Amtrak Bonds.--
     For purposes of this section, the credit allowed by section 
     54 to a taxpayer by reason of holding a qualified Amtrak bond 
     on a credit allowance date shall be treated as if it were a 
     payment of estimated tax made by the taxpayer on such 
     date.''.
       (B) Corporate.--Section 6655 (relating to failure by 
     corporation to pay estimated income tax) is amended by adding 
     at the end of subsection (g) the following new paragraph:
       ``(5) Special rule for holders of qualified amtrak bonds.--
     For purposes of this section, the credit allowed by section 
     54 to a taxpayer by reason of holding a qualified Amtrak bond 
     on a credit allowance date shall be treated as if it were a 
     payment of estimated tax made by the taxpayer on such 
     date.''.
       (3) Exclusion from gross income of contributions by Amtrak 
     to other rail carriers.--
       (A) In general.--Section 118 (relating to contributions to 
     the capital of a corporation) is amended by redesignating 
     subsection (d) as subsection (e) and by inserting after 
     subsection (c) the following new subsection:
       ``(d) Special Rule for Contributions by Amtrak to Other 
     Rail Carriers.--For purposes of this section, the term 
     `contribution to the capital of the taxpayer' includes any

[[Page S11850]]

     contribution by the National Railroad Passenger Corporation 
     of personal or real property funded by the proceeds of 
     qualified Amtrak bonds under section 54.''.
       (B) Conforming amendment.--Subsection (b) of such section 
     118 is amended by striking ``subsection (c)'' and inserting 
     ``subsections (c) and (d)''.
       (4) Protection of highway trust fund.--Section 9503 
     (relating to Highway Trust Fund) is amended by adding at the 
     end the following new subsection:
       ``(g) Special Rules Relating to National Railroad Passenger 
     Corporation.--
       ``(1) In general.--Except as provided in subsection (c), as 
     in effect on the date of the enactment of this subsection, 
     amounts in the Highway Trust Fund may not be used, either 
     directly or indirectly through a State or local transit 
     authority, to provide funds to the National Railroad 
     Passenger Corporation for any purpose, including issuance of 
     any qualified Amtrak bond pursuant to section 54. The 
     preceding sentence may not be waived by any provision of law 
     which is not contained or referenced in this title, whether 
     such provision of law is a subsequently enacted provision or 
     directly or indirectly seeks to waive the application of such 
     sentence.
       ``(2) Certification by the secretary.--The issuance of any 
     qualified Amtrak bonds by the National Railroad Passenger 
     Corporation pursuant to section 54 is conditioned on 
     certification by the Secretary, after consultation with the 
     Secretary of Transportation, within 30 days of a request by 
     the issuer, that with respect to funds of the Highway Trust 
     Fund described under paragraph (1), the issuer either--
       ``(A) has not received such funds during calendar years 
     commencing with 2002 and ending before the calendar year the 
     bonds are issued, or
       ``(B) has repaid to the Highway Trust Fund any such funds 
     which were received during such calendar years.
       ``(3) No retroactive effect.--Nothing in this subsection 
     shall adversely affect the entitlement of the holders of 
     qualified Amtrak bonds to the tax credit allowed pursuant to 
     section 54 or to repayment of principal upon maturity.''.
       (c) Clerical Amendments.--
       (1) The table of subparts for part IV of subchapter A of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Subpart H. Nonrefundable Credit for Holders of Qualified Amtrak 
              Bonds.''.
       (2) Section 6401(b)(1) is amended by striking ``and G'' and 
     inserting ``G, and H''.
       (d) Annual Report by Treasury on Amtrak Trust Account.--The 
     Secretary of the Treasury shall annually report to Congress 
     as to whether the amount deposited in the trust account 
     established by the National Railroad Passenger Corporation 
     under section 54(i) of the Internal Revenue Code of 1986, as 
     added by this section, is sufficient to fully repay at 
     maturity the principal of any outstanding qualified Amtrak 
     bonds issued pursuant to section 54 of such Code (as so 
     added), together with amounts expected to be deposited into 
     such account, as certified by the National Railroad Passenger 
     Corporation in accordance with procedures prescribed by the 
     Secretary of the Treasury.
       (e) Effective Date.--The amendments made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.
       (f) Multi-Year Capital Spending Plan and Oversight.--
       (1) Amtrak capital spending plan.--
       (A) In general.--The National Railroad Passenger 
     Corporation shall annually submit to the President and 
     Congress a multi-year capital spending plan, as approved by 
     the Board of Directors of the Corporation.
       (B) Contents of plan.--Such plan shall identify the capital 
     investment needs of the Corporation over a period of not less 
     than 5 years and the funding sources available to finance 
     such needs and shall prioritize such needs according to 
     corporate goals and strategies.
       (C) Initial submission date.--The first plan shall be 
     submitted before the issuance of any qualified Amtrak bonds 
     by the National Railroad Passenger Corporation pursuant to 
     section 54 of the Internal Revenue Code of 1986 (as added by 
     this section).
       (2) Oversight of amtrak trust account and qualified 
     projects.--
       (A) Trust account oversight.--The Secretary of the Treasury 
     shall annually report to Congress as to whether the amount 
     deposited in the trust account established by the National 
     Railroad Passenger Corporation under section 54(i) of such 
     Code (as so added) is sufficient to fully repay at maturity 
     the principal of any outstanding qualified Amtrak bonds 
     issued pursuant to section 54 of such Code (as so added), 
     together with amounts expected to be deposited into such 
     account, as certified by the National Railroad Passenger 
     Corporation in accordance with procedures prescribed by the 
     Secretary of the Treasury.
       (B) Project oversight.--The National Railroad Passenger 
     Corporation shall contract for an annual independent 
     assessment of the costs and benefits of the qualified 
     projects financed by such qualified Amtrak bonds, including 
     an assessment of the investment evaluation process of the 
     Corporation. The annual assessment shall be included in the 
     plan submitted under paragraph (1).

     SEC. 902. BROADBAND INTERNET ACCESS TAX CREDIT.

       (a) In General.--Subpart E of part IV of chapter 1 
     (relating to rules for computing investment credit) is 
     amended by inserting after section 48 the following:

     ``SEC. 48A. BROADBAND CREDIT.

       ``(a) General Rule.--For purposes of section 46, the 
     broadband credit for any taxable year is the sum of--
       ``(1) the current generation broadband credit, plus
       ``(2) the next generation broadband credit.
       ``(b) Current Generation Broadband Credit; Next Generation 
     Broadband Credit.--For purposes of this section--
       ``(1) Current generation broadband credit.--The current 
     generation broadband credit for any taxable year is equal to 
     10 percent of the qualified expenditures incurred with 
     respect to qualified equipment providing current generation 
     broadband services to qualified subscribers and taken into 
     account with respect to such taxable year.
       ``(2) Next generation broadband credit.--The next 
     generation broadband credit for any taxable year is equal to 
     20 percent of the qualified expenditures incurred with 
     respect to qualified equipment providing next generation 
     broadband services to qualified subscribers and taken into 
     account with respect to such taxable year.
       ``(c) When Expenditures Taken Into Account.--For purposes 
     of this section--
       ``(1) In general.--Qualified expenditures with respect to 
     qualified equipment shall be taken into account with respect 
     to the first taxable year in which--
       ``(A) current generation broadband services are provided 
     through such equipment to qualified subscribers, or
       ``(B) next generation broadband services are provided 
     through such equipment to qualified subscribers.
       ``(2) Limitation.--
       ``(A) In general.--Qualified expenditures shall be taken 
     into account under paragraph (1) only with respect to 
     qualified equipment--
       ``(i) the original use of which commences with the 
     taxpayer, and
       ``(ii) which is placed in service,
     after December 31, 2001.
       ``(B) Leased equipment.--Except as provided in regulations, 
     rules similar to the rules of section 203(b)(3) of the Tax 
     Reform Act of 1986 shall apply.
       ``(d) Special Allocation Rules.--
       ``(1) Current generation broadband services.--For purposes 
     of determining the current generation broadband credit under 
     subsection (a)(1) with respect to qualified equipment through 
     which current generation broadband services are provided, if 
     the qualified equipment is capable of serving both qualified 
     subscribers and other subscribers, the qualified expenditures 
     shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of the number of 
     potential qualified subscribers within the rural areas and 
     the underserved areas which the equipment is capable of 
     serving with current generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with current generation broadband 
     services.
       ``(2) Next generation broadband services.--For purposes of 
     determining the next generation broadband credit under 
     subsection (a)(2) with respect to qualified equipment through 
     which next generation broadband services are provided, if the 
     qualified equipment is capable of serving both qualified 
     subscribers and other subscribers, the qualified expenditures 
     shall be multiplied by a fraction--
       ``(A) the numerator of which is the sum of--
       ``(i) the number of potential qualified subscribers within 
     the rural areas and underserved areas, plus
       ``(ii) the number of potential qualified subscribers within 
     the area consisting only of residential subscribers not 
     described in clause (i),
     which the equipment is capable of serving with next 
     generation broadband services, and
       ``(B) the denominator of which is the total potential 
     subscriber population of the area which the equipment is 
     capable of serving with next generation broadband services.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Antenna.--The term `antenna' means any device used to 
     transmit or receive signals through the electromagnetic 
     spectrum, including satellite equipment.
       ``(2) Cable operator.--The term `cable operator' has the 
     meaning given such term by section 602(5) of the 
     Communications Act of 1934 (47 U.S.C. 522(5)).
       ``(3) Commercial mobile service carrier.--The term 
     `commercial mobile service carrier' means any person 
     authorized to provide commercial mobile radio service as 
     defined in section 20.3 of title 47, Code of Federal 
     Regulations.
       ``(4) Current generation broadband service.--The term 
     `current generation broadband service' means the transmission 
     of signals at a rate of at least 1,000,000 bits per second to 
     the subscriber and at least 128,000 bits per second from the 
     subscriber.
       ``(5) Multiplexing or demultiplexing.--The term 
     `multiplexing' means the transmission of 2 or more signals 
     over a single channel, and the term `demultiplexing' means 
     the separation of 2 or more signals previously combined by 
     compatible multiplexing equipment.

[[Page S11851]]

       ``(6) Next generation broadband service.--The term `next 
     generation broadband service' means the transmission of 
     signals at a rate of at least 22,000,000 bits per second to 
     the subscriber and at least 5,000,000 bits per second from 
     the subscriber.
       ``(7) Nonresidential subscriber.--The term `nonresidential 
     subscriber' means a person who purchases broadband services 
     which are delivered to the permanent place of business of 
     such person.
       ``(8) Open video system operator.--The term `open video 
     system operator' means any person authorized to provide 
     service under section 653 of the Communications Act of 1934 
     (47 U.S.C. 573).
       ``(9) Other wireless carrier.--The term `other wireless 
     carrier' means any person (other than a telecommunications 
     carrier, commercial mobile service carrier, cable operator, 
     open video system operator, or satellite carrier) providing 
     current generation broadband services or next generation 
     broadband service to subscribers through the radio 
     transmission of energy.
       ``(10) Packet switching.--The term `packet switching' means 
     controlling or routing the path of a digitized transmission 
     signal which is assembled into packets or cells.
       ``(11) Provider.--The term `provider' means, with respect 
     to any qualified equipment--
       ``(A) a cable operator,
       ``(B) a commercial mobile service carrier,
       ``(C) an open video system operator,
       ``(D) a satellite carrier,
       ``(E) a telecommunications carrier, or
       ``(F) any other wireless carrier,
     providing current generation broadband services or next 
     generation broadband services to subscribers through such 
     qualified equipment.
       ``(12) Provision of services.--A provider shall be treated 
     as providing services to a subscriber if--
       ``(A) a subscriber has been passed by the provider's 
     equipment and can be connected to such equipment for a 
     standard connection fee,
       ``(B) the provider is physically able to deliver current 
     generation broadband services or next generation broadband 
     services, as applicable, to such subscribers without making 
     more than an insignificant investment with respect to any 
     such subscriber,
       ``(C) the provider has made reasonable efforts to make such 
     subscribers aware of the availability of such services,
       ``(D) such services have been purchased by one or more such 
     subscribers, and
       ``(E) such services are made available to such subscribers 
     at average prices comparable to those at which the provider 
     makes available similar services in any areas in which the 
     provider makes available such services.
       ``(13) Qualified equipment.--
       ``(A) In general.--The term `qualified equipment' means 
     equipment which provides current generation broadband 
     services or next generation broadband services--
       ``(i) at least a majority of the time during periods of 
     maximum demand to each subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no credit is allowed under subsection 
     (a)(1).
       ``(B) Only certain investment taken into account.--Except 
     as provided in subparagraph (C) or (D), equipment shall be 
     taken into account under subparagraph (A) only to the extent 
     it--
       ``(i) extends from the last point of switching to the 
     outside of the unit, building, dwelling, or office owned or 
     leased by a subscriber in the case of a telecommunications 
     carrier,
       ``(ii) extends from the customer side of the mobile 
     telephone switching office to a transmission/receive antenna 
     (including such antenna) owned or leased by a subscriber in 
     the case of a commercial mobile service carrier,
       ``(iii) extends from the customer side of the headend to 
     the outside of the unit, building, dwelling, or office owned 
     or leased by a subscriber in the case of a cable operator or 
     open video system operator, or
       ``(iv) extends from a transmission/receive antenna 
     (including such antenna) which transmits and receives signals 
     to or from multiple subscribers to a transmission/receive 
     antenna (including such antenna) on the outside of the unit, 
     building, dwelling, or office owned or leased by a subscriber 
     in the case of a satellite carrier or other wireless carrier, 
     unless such other wireless carrier is also a 
     telecommunications carrier.
       ``(C) Packet switching equipment.--Packet switching 
     equipment, regardless of location, shall be taken into 
     account under subparagraph (A) only if it is deployed in 
     connection with equipment described in subparagraph (B) and 
     is uniquely designed to perform the function of packet 
     switching for current generation broadband services or next 
     generation broadband services, but only if such packet 
     switching is the last in a series of such functions performed 
     in the transmission of a signal to a subscriber or the first 
     in a series of such functions performed in the transmission 
     of a signal from a subscriber.
       ``(D) Multiplexing and demultiplexing equipment.--
     Multiplexing and demultiplexing equipment shall be taken into 
     account under subparagraph (A) only to the extent it is 
     deployed in connection with equipment described in 
     subparagraph (B) and is uniquely designed to perform the 
     function of multiplexing and demultiplexing packets or cells 
     of data and making associated application adaptions, but only 
     if such multiplexing or demultiplexing equipment is located 
     between packet switching equipment described in subparagraph 
     (C) and the subscriber's premises.
       ``(14) Qualified expenditure.--
       ``(A) In general.--The term `qualified expenditure' means 
     any amount--
       ``(i) chargeable to capital account with respect to the 
     purchase and installation of qualified equipment (including 
     any upgrades thereto) for which depreciation is allowable 
     under section 168, and
       ``(ii) incurred after December 31, 2001, and before January 
     1, 2003.
       ``(B) Certain satellite expenditures excluded.--Such term 
     shall not include any expenditure with respect to the 
     launching of any satellite equipment.
       ``(15) Qualified subscriber.--The term `qualified 
     subscriber' means--
       ``(A) with respect to the provision of current generation 
     broadband services--
       ``(i) a nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) a residential subscriber residing in a dwelling 
     located in a rural area or underserved area which is not a 
     saturated market, and
       ``(B) with respect to the provision of next generation 
     broadband services--
       ``(i) a nonresidential subscriber maintaining a permanent 
     place of business in a rural area or underserved area, or
       ``(ii) a residential subscriber.
       ``(16) Residential subscriber.--The term `residential 
     subscriber' means an individual who purchases broadband 
     services which are delivered to such individual's dwelling.
       ``(17) Rural area.--The term `rural area' means any census 
     tract which--
       ``(A) is not within 10 miles of any incorporated or census 
     designated place containing more than 25,000 people, and
       ``(B) is not within a county or county equivalent which has 
     an overall population density of more than 500 people per 
     square mile of land.
       ``(18) Rural subscriber.--The term `rural subscriber' means 
     a residential subscriber residing in a dwelling located in a 
     rural area or nonresidential subscriber maintaining a 
     permanent place of business located in a rural area.
       ``(19) Satellite carrier.--The term `satellite carrier' 
     means any person using the facilities of a satellite or 
     satellite service licensed by the Federal Communications 
     Commission and operating in the Fixed-Satellite Service under 
     part 25 of title 47 of the Code of Federal Regulations or the 
     Direct Broadcast Satellite Service under part 100 of title 47 
     of such Code to establish and operate a channel of 
     communications for distribution of signals, and owning or 
     leasing a capacity or service on a satellite in order to 
     provide such distribution.
       ``(20) Saturated market.--The term `saturated market' means 
     any census tract in which, as of the date of the enactment of 
     this section--
       ``(A) current generation broadband services have been 
     provided by one or more providers to 85 percent or more of 
     the total number of potential residential subscribers 
     residing in dwellings located within such census tract, and
       ``(B) such services can be utilized--
       ``(i) at least a majority of the time during periods of 
     maximum demand by each such subscriber who is utilizing such 
     services, and
       ``(ii) in a manner substantially the same as such services 
     are provided by the provider to subscribers through equipment 
     with respect to which no credit is allowed under subsection 
     (a)(1).
       ``(21) Subscriber.--The term `subscriber' means a person 
     who purchases current generation broadband services or next 
     generation broadband services.
       ``(22) Telecommunications carrier.--The term 
     `telecommunications carrier' has the meaning given such term 
     by section 3(44) of the Communications Act of 1934 (47 U.S.C. 
     153(44)), but--
       ``(A) includes all members of an affiliated group of which 
     a telecommunications carrier is a member, and
       ``(B) does not include a commercial mobile service carrier.
       ``(23) Total potential subscriber population.--The term 
     `total potential subscriber population' means, with respect 
     to any area and based on the most recent census data, the 
     total number of potential residential subscribers residing in 
     dwellings located in such area and potential nonresidential 
     subscribers maintaining permanent places of business located 
     in such area.
       ``(24) Underserved area.--The term `underserved area' means 
     any census tract which is located in--
       ``(A) an empowerment zone or enterprise community 
     designated under section 1391,
       ``(B) the District of Columbia Enterprise Zone established 
     under section 1400,
       ``(C) a renewal community designated under section 1400E, 
     or
       ``(D) a low-income community designated under section 45D.
       ``(25) Underserved subscriber.--The term `underserved 
     subscriber' means a residential subscriber residing in a 
     dwelling located in an underserved area or nonresidential 
     subscriber maintaining a permanent place of business located 
     in an underserved area.
       ``(f) Designation of Census Tracts.--The Secretary shall, 
     not later than 90 days after the date of the enactment of 
     this section,

[[Page S11852]]

     designate and publish those census tracts meeting the 
     criteria described in paragraphs (17), (20), and (24) of 
     subsection (e). In making such designations, the Secretary 
     shall consult with such other departments and agencies as the 
     Secretary determines appropriate.''.
       (b) Credit To Be Part of Investment Credit.--Section 46 
     (relating to the amount of investment credit) is amended by 
     striking ``and'' at the end of paragraph (2), by striking the 
     period at the end of paragraph (3) and inserting ``, and'', 
     and by adding at the end the following:
       ``(4) the broadband credit.''
       (c) Special Rule for Mutual or Cooperative Telephone 
     Companies.--Section 501(c)(12)(B) (relating to list of exempt 
     organizations) is amended by striking ``or'' at the end of 
     clause (iii), by striking the period at the end of clause 
     (iv) and inserting ``, or'', and by adding at the end the 
     following:
       ``(v) from the sale of property subject to a lease 
     described in section 48A(c)(2)(B), but only to the extent 
     such income does not in any year exceed an amount equal to 
     the credit for qualified expenditures which would be 
     determined under section 48A for such year if the mutual or 
     cooperative telephone company was not exempt from taxation 
     and was treated as the owner of the property subject to such 
     lease.''.
       (d) Conforming Amendment.--The table of sections for 
     subpart E of part IV of subchapter A of chapter 1 is amended 
     by inserting after the item relating to section 48 the 
     following:

``Sec. 48A. Broadband credit.''.
       (e) Regulatory Matters.--
       (1) Prohibition.--No Federal or State agency or 
     instrumentality shall adopt regulations or ratemaking 
     procedures that would have the effect of confiscating any 
     credit or portion thereof allowed under section 48A of the 
     Internal Revenue Code of 1986 (as added by this section) or 
     otherwise subverting the purpose of this section.
       (2) Treasury regulatory authority.--It is the intent of 
     Congress in providing the broadband credit under section 48A 
     of the Internal Revenue Code of 1986 (as added by this 
     section) to provide incentives for the purchase, 
     installation, and connection of equipment and facilities 
     offering expanded broadband access to the Internet for users 
     in certain low income and rural areas of the United States, 
     as well as to residential users nationwide, in a manner that 
     maintains competitive neutrality among the various classes of 
     providers of broadband services. Accordingly, the Secretary 
     of the Treasury shall prescribe such regulations as may be 
     necessary or appropriate to carry out the purposes of section 
     48A of such Code, including--
       (A) regulations to determine how and when a taxpayer that 
     incurs qualified expenditures satisfies the requirements of 
     section 48A of such Code to provide broadband services, and
       (B) regulations describing the information, records, and 
     data taxpayers are required to provide the Secretary to 
     substantiate compliance with the requirements of section 48A 
     of such Code.
     Until the Secretary prescribes such regulations, taxpayers 
     may base such determinations on any reasonable method that is 
     consistent with the purposes of section 48A of such Code.
       (f) Effective Date.--The amendments made by this section 
     shall apply to expenditures incurred after December 31, 2001, 
     and before January 1, 2003.

     SEC. 903. CITRUS TREE CANKER RELIEF.

       (a) Expansion of Period Within Which Converted Citrus Tree 
     Property Must Be Replaced.--
       (1) In general.--Section 1033 (relating to period within 
     which property must be replaced) is amended by redesignating 
     subsection (k) as subsection (l) and by inserting after 
     subsection (j) the following new subsection:
       ``(k) Commercial Trees Destroyed Because of Citrus Tree 
     Canker.--In the case of commercial citrus trees which are 
     compulsorily or involuntarily converted under a public order 
     as a result of the citrus tree canker, clause (i) of 
     subsection (a)(2)(B) shall be applied as if such clause 
     reads: `4 years after the close of the taxable year in which 
     a State or Federal plant health authority determines that the 
     land on which such trees grew is free from the bacteria that 
     causes citrus tree canker'.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to taxable years beginning before, on, or after 
     the date of the enactment of this Act.
       (b) 10-Year Ratable Income Inclusion for Citrus Canker Tree 
     Payments.--
       (1) In general.--Part I of subchapter Q of chapter 1 
     (relating to income averaging) is amended by inserting after 
     section 1301 the following new section:

     ``SEC. 1302. 10-YEAR RATABLE INCOME INCLUSION FOR CITRUS 
                   CANKER TREE PAYMENTS.

       ``(a) In General.--At the election of the taxpayer, any 
     amount taken into account as income or gain by reason of 
     receiving a citrus canker tree payment shall be included in 
     the income of the taxpayer ratably over the 10-year period 
     beginning with the taxable year in which the payment is 
     received or accrued by the taxpayer. Any election under the 
     preceding sentence shall be irrevocable.
       ``(b) Citrus Canker Tree Payment.--For purposes of 
     subsection (a), the term `citrus canker tree payment' means a 
     payment made to an owner of a commercial citrus grove to 
     recover income that was lost as a result of the removal of 
     commercial citrus trees to control canker under the 
     amendments to the citrus canker regulations (7 C.F.R. 301) 
     made by the final rule published in the Federal Register by 
     the Secretary of Agriculture on June 18, 2001 (66 Fed. Reg. 
     32713, Docket No. 00-37-4).''.
       (2) Clerical amendment.--The table of sections for part I 
     of subchapter Q of chapter 1 is amended by inserting after 
     the item relating to section 1301 the following new item:

``Sec. 1302. 10-year ratable income inclusion for citrus canker tree 
              payments.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to payments made before, on, or after the date of 
     the enactment of this Act.

     SEC. 904. ALLOWANCE OF ELECTRONIC 1099S.

       Except as otherwise provided by the Secretary of the 
     Treasury, any person required to furnish a statement under 
     any section of subpart B of part III of subchapter A of 
     chapter 61 of the Internal Revenue Code of 1986 for any 
     taxable year ending after the date of the enactment of this 
     Act and before January 1, 2003, may electronically furnish 
     such statement to any recipient who has consented to the 
     electronic provision of the statement in a manner similar to 
     the one permitted under regulations issued under section 6051 
     of such Code or in such other manner as provided by the 
     Secretary.

     SEC. 905. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR 
                   AGRICULTURAL AERIAL APPLICATORS.

       (a) No Waiver by Farm Owner, Tenant, or Operator 
     Necessary.--Subparagraph (B) of section 6420(c)(4) (relating 
     to certain farming use other than by owner, etc.) is amended 
     to read as follows:
       ``(B) if the person so using the gasoline is an aerial or 
     other applicator of fertilizers or other substances and is 
     the ultimate purchaser of the gasoline, then subparagraph (A) 
     of this paragraph shall not apply and the aerial or other 
     applicator shall be treated as having used such gasoline on a 
     farm for farming purposes.''.
       (b) Exemption Includes Fuel Used Between Airfield and 
     Farm.--Section 6420(c)(4), as amended by subsection (a), is 
     amended by adding at the end the following new flush 
     sentence:
     ``For purposes of this paragraph, in the case of an aerial 
     applicator, gasoline shall be treated as used on a farm for 
     farming purposes if the gasoline is used for the direct 
     flight between the airfield and 1 or more farms.''.
       (c) Exemption from Tax on Air Transportation of Persons for 
     Forestry Purposes Extended to Fixed-Wing Aircraft.--
     Subsection (f) of section 4261 (relating to tax on air 
     transportation of persons) is amended to read as follows:
       ``(f) Exemption for Certain Uses.--No tax shall be imposed 
     under subsection (a) or (b) on air transportation--
       ``(1) by helicopter for the purpose of transporting 
     individuals, equipment, or supplies in the exploration for, 
     or the development or removal of, hard minerals, oil, or gas, 
     or
       ``(2) by helicopter or by fixed-wing aircraft for the 
     purpose of the planting, cultivation, cutting, or 
     transportation of, or caring for, trees (including logging 
     operations),
     but only if the helicopter or fixed-wing aircraft does not 
     take off from, or land at, a facility eligible for assistance 
     under the Airport and Airway Development Act of 1970, or 
     otherwise use services provided pursuant to section 44509 or 
     44913(b) or subchapter I of chapter 471 of title 49, United 
     States Code, during such use. In the case of helicopter 
     transportation described in paragraph (1), this subsection 
     shall be applied by treating each flight segment as a 
     distinct flight.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to fuel use or air transportation after December 
     31, 2001, and before January 1, 2003.

     SEC. 906. RECOVERY PERIOD FOR CERTAIN WIRELESS 
                   TELECOMMUNICATIONS EQUIPMENT.

       (a) 5-Year Recovery Period for Certain Wireless 
     Telecommunications Equipment.--
       (1) In general.--Subparagraph (A) of section 168(i)(2) 
     (defining qualified technological equipment) is amended by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following:
       ``(iv) any wireless telecommunication equipment.''.
       (2) Definition of wireless telecommunication equipment.--
     Paragraph (2) of section 168(i) is amended by adding at the 
     end the following:
       ``(D) Wireless telecommunication equipment.--For purposes 
     of this paragraph--
       ``(i) In general.--The term `wireless telecommunication 
     equipment' means equipment which is--

       ``(I) used in the transmission, reception, coordination, or 
     switching of wireless telecommunications service, and
       ``(II) placed in service before September 11, 2002.

     For purposes of this clause, the term `wireless 
     telecommunications service' includes any commercial mobile 
     radio service as defined in title 47 of the Code of Federal 
     Regulations.
       ``(ii) Exception.--The term `wireless telecommunication 
     equipment' shall not include towers, buildings, T-1 lines, or 
     other cabling which connects cell sites to mobile switching 
     centers.''.

[[Page S11853]]

       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 10, 
     2001.

     SEC. 907. SPECIAL RULES FOR TAXATION OF LIFE INSURANCE 
                   COMPANIES FOR 2001 AND 2002.

       (a) Reduction in Mutual Life Insurance Company Deductions 
     Not To Apply in 2001.--
       (1) In general.--Section 809 (relating to reduction in 
     certain deductions of material life insurance companies) is 
     amended by adding at the end the following:
       ``(j) Differential Earnings Rate Treated as Zero for 
     2001.--Notwithstanding subsection (c) or (f), the 
     differential earnings rate shall be treated as zero for 
     purposes of computing both the differential earnings amount 
     and the recomputed differential earnings amount for a mutual 
     life insurance company's first taxable year beginning in 
     2001.''
       (2) Effective date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2000.
       (b) Distributions During 2002 to Shareholders from Pre-1984 
     Policyholders Surplus Account.--
       (1) In general.--Section 815 (relating to distributions to 
     shareholders from pre-1984 policyholders surplus account) is 
     amended by adding at the end the following:
       ``(g) Special Rules Applicable During 2002.--In the case of 
     a stock life insurance company's first taxable year beginning 
     in 2002--
       ``(1) the amount under subsection (a)(2) for such taxable 
     year shall be treated as zero, and
       ``(2) notwithstanding subsection (b), in determining any 
     subtractions from an account under subsections (c)(3) and 
     (d)(3), any distribution to shareholders during such taxable 
     year shall be treated as made first out of the policyholders 
     surplus account, then out of the shareholders surplus 
     account, and finally out of other accounts.''
       (2) Effective date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 908. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

       (a) In General.--Nothing in this Act (or an amendment made 
     by this Act) shall be construed to alter or amend title II of 
     the Social Security Act (or any regulation promulgated under 
     that Act).
       (b) Transfers.--
       (1) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     Act has on the income and balances of the trust funds 
     established under section 201 of the Social Security Act (42 
     U.S.C. 401).
       (2) Transfer of funds.--If, under paragraph (1), the 
     Secretary of the Treasury estimates that the enactment of 
     this Act has a negative impact on the income and balances of 
     the trust funds established under section 201 of the Social 
     Security Act (42 U.S.C. 401), the Secretary shall transfer, 
     not less frequently than quarterly, from the general revenues 
     of the Federal Government an amount sufficient so as to 
     ensure that the income and balances of such trust funds are 
     not reduced as a result of the enactment of this Act.

     SEC. 909. EMERGENCY DESIGNATION.

       Congress designates as emergency requirements pursuant to 
     section 252(e) of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 the following amounts:
       (1) An amount equal to the amount by which revenues are 
     reduced by this Act below the recommended levels of Federal 
     revenues for fiscal year 2002, the total of fiscal years 2002 
     through 2006, and the total of fiscal years 2002 through 
     2011, provided in the conference report accompanying H. Con. 
     Res. 83, the concurrent resolution on the budget for fiscal 
     year 2002.
       (2) Amounts equal to the amounts of new budget authority 
     and outlays provided in this Act in excess of the allocations 
     under section 302(a) of the Congressional Budget Act of 1974 
     to the Committee on Finance of the Senate for fiscal year 
     2002, the total of fiscal years 2002 through 2006, and the 
     total of fiscal years 2002 through 2011.

                       TITLE X--HOMELAND DEFENSE

                               CHAPTER 1

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

       For an additional amount for ``Office of the Secretary'', 
     $95,000,000.

                      Departmental Administration

       For an additional amount for ``Departmental 
     Administration'', $20,000,000.

                    Office of the Inspector General

       For an additional amount for ``Office of the Inspector 
     General'', $15,000,000.

                     Agricultural Research Service


                         SALARIES AND EXPENSES

       For an additional amount for ``Salaries and Expenses'', 
     $40,000,000.

               Animal and Plant Health Inspection Service


                         SALARIES AND EXPENSES

                     (INCLUDING TRANSFER OF FUNDS)

       For an additional amount for ``Salaries and Expenses'', 
     $267,100,000, of which $115,000,000 may be transferred and 
     merged with the Agriculture Quarantine Inspection User Fee 
     Account, and of which $108,000,000 shall remain available 
     until September 30, 2003.


                        BUILDINGS AND FACILITIES

       For an additional amount for ``Buildings and Facilities'', 
     $14,081,400, to remain available until September 30, 2003.

                   Food Safety and Inspection Service

       For an additional amount for ``Food Safety and Inspection 
     Service'', $23,900,000.

                       Food and Nutrition Service


SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN 
                                 (WIC)

       For an additional amount for ``Special Supplemental 
     Nutrition Program for Women, Infants, and Children (WIC)'', 
     $39,000,000.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration


                         SALARIES AND EXPENSES

       For an additional amount for ``Salaries and Expenses'', 
     $164,300,000.

                           INDEPENDENT AGENCY

                  Commodity Futures Trading Commission

       For an additional amount for ``Commodity Futures Trading 
     Commission'', $10,196,000.

                               CHAPTER 2

                         DEPARTMENT OF JUSTICE

                         General Administration


                   legal activities office automation

       For an additional amount for ``Legal Activities Office 
     Automation'', $56,000,000, to remain available until 
     September 30, 2003.


                   section 405 patriot act activities

       For necessary expenses for ``Patriot Act Activities'', 
     $100,000,000, to remain available until September 30, 2003, 
     for a report on the feasibility of enhancing the Integrated 
     Automated Fingerprint Identification System (IAFIS) of the 
     Federal Bureau of Investigation and other identification 
     systems and for implementation of such enhancements as deemed 
     necessary, as authorized by Section 405 of Public Law 107-56.

                            Legal Activities


         salaries and expenses, united states marshals service

       For an additional amount for ``Salaries and Expenses'', 
     $25,000,000.


                             court security

       For an additional amount for ``Court Security'', 
     $25,000,000, to remain available until September 30, 2003.


                              construction

       For an additional amount for ``Construction'', $36,000,000, 
     to remain available until September 30, 2003.

                    Federal Bureau of Investigation


                         salaries and expenses

       For an additional amount for ``Salaries and Expenses'', 
     $573,000,000, to remain available until September 30, 2003, 
     for necessary computer modernization and infrastructure 
     improvements.

                    Drug Enforcement Administration


                         salaries and expenses

       For an additional amount for ``Salaries and Expenses'', 
     $600,000 for continuing expenses associated with the 
     September 11, 2001 terrorist attacks, to remain available 
     until September 30, 2002, and $58,400,000 for communications 
     interception, intelligence capabilities, and increased 
     security measures, to remain available until September 30, 
     2003.

                 Immigration and Naturalization Service


                         salaries and expenses

       For an additional amount for ``Salaries and Expenses'', 
     $25,100,000, to remain available until September 30, 2003, 
     for the Student and Exchange Visitor Program (SEVP).


                              construction

       For an additional amount for ``Construction'', 
     $700,000,000, to remain available until September 30, 2003, 
     for construction, maintenance, repair and rehabilitation.

                       Office of Justice Programs


                           justice assistance

       For an additional amount for ``Justice Assistance'', 
     $2,000,000,000, to remain available until September 30, 2003, 
     for grants, cooperative agreements, and other assistance 
     authorized by sections 819 and 821 of the Antiterrorism and 
     Effective Death Penalty Act of 1996 and for other counter 
     terrorism programs.

                             THE JUDICIARY

                   Supreme Court of the United States


                   care of the buildings and grounds

       For an additional amount for ``Care of the Building and 
     Grounds'', $20,000,000 for security upgrades and enhancements 
     for the Supreme Court building, to remain available until 
     September 30, 2003.

    Courts of Appeals, District Courts, and Other Judicial Services


                             court security

       For an additional amount for ``Court Security'', 
     $36,000,000, to remain available until September 30, 2003.

                 DEPARTMENT OF STATE AND RELATED AGENCY

                          DEPARTMENT OF STATE

                   Administration of Foreign Affairs


                    diplomatic and consular programs

       For an additional amount for ``Diplomatic and Consular 
     Programs'', $45,661,000, to remain available until September 
     30, 2002. In addition, for an additional amount for the costs 
     of worldwide security upgrades, $182,900,000, to remain 
     available until September 30, 2003.

[[Page S11854]]

                             RELATED AGENCY

                    Broadcasting Board of Governors


                 international broadcasting operations

       For an additional amount for ``International Broadcasting 
     Operations'', $4,700,000.

                             RELATED AGENCY

                      DEPARTMENT OF TRANSPORTATION

                        Maritime Administration


                        Operations and Training

       For an additional amount for ``Operations and Training'', 
     $11,000,000, to remain available until September 30, 2003, 
     for a port security program. Of this amount, $6,000,000 shall 
     be for port assessments and $5,000,000 shall be for security 
     personnel training.


          Maritime Guaranteed Loan (Title XI) Program Account

       For an additional amount for the ``Maritime Guaranteed Loan 
     Program Account'', $12,000,000, to remain available until 
     September 30, 2003, for port security infra-structure 
     upgrades and equipment.

                               CHAPTER 3

                      DEPARTMENT OF DEFENSE--CIVIL

            Department of the Army Corps of Engineers--Civil


                   Operation and Maintenance, General

       For an additional amount for ``Operation and Maintenance, 
     General'', $150,000,000 for increased security at critical 
     Corps of Engineers owned and operated facilities.

                       DEPARTMENT OF THE INTERIOR

           Bureau of Reclamation Water and Related Resources

       For an additional amount for ``Water and Related 
     Resources'', $35,000,000, to enhance preparedness for 
     possible attacks against Bureau of Reclamation dams, power 
     plants, and other critical features.

                          DEPARTMENT OF ENERGY

                    ATOMIC ENERGY DEFENSE ACTIVITIES

                National Nuclear Security Administration


                           Weapons Activities

       For an additional amount for ``Weapons Activities'', 
     $294,000,000 to increase the security of the Nation's nuclear 
     weapons complex.


                    Defense Nuclear Nonproliferation

       For an additional amount for ``Defense Nuclear Non-
     proliferation'', $205,000,000 for nonproliferation and 
     verification research and development, international material 
     protection, control, and accounting, and other non-
     proliferation safety and security upgrades.

                           INDEPENDENT AGENCY

                     Nuclear Regulatory Commission


                         Salaries and Expenses

       For an additional amount for ``Salaries and Expenses'', 
     $15,000,000 to enhance security at the Nation's nuclear power 
     plants.

                               CHAPTER 4

                       DEPARTMENT OF THE INTERIOR

                       Bureau of Land Management


                   management of lands and resources

       For expenses necessary for the protection and use of the 
     Dalton Highway and the Trans-Alaska Pipeline System, 
     $4,500,000: Provided, That of that amount, up to $4,250,000 
     may be made available to the State of Alaska to assist the 
     Federal Government in its security functions.

                         National park Service


                              construction

       For an additional amount for ``Construction'', $13,500,000, 
     for the installation of permanent protective barriers at 
     monuments and memorials within the National Capital Region.

                               CHAPTER 5

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                        Office of the Secretary


            public health and social services emergency fund

       For an additional amount for emergency expenses necessary 
     to support activities related to countering potential 
     biological, disease, and chemical threats to civilian 
     populations, for ``Public Health and Social Services 
     Emergency Fund'', $3,311,000,000. Of this amount, 
     $1,302,000,000 shall be for the Centers for Disease Control 
     and Prevention for improving State and local capacity; 
     $50,000,000 shall be for grants to hospitals for improving 
     response capabilities; $90,000,000 shall be for upgrading 
     capacity at the centers for Disease Control and Prevention; 
     $83,000,000 shall be for improving disaster response teams 
     and the Office of the Secretary; $116,000,000 shall be for 
     research and development on vaccines, antibiotics and anti-
     virals; $4,000,000 shall be for training and education 
     regarding effective workplace responses to bioterrorism; 
     $593,000,000 shall be for the National Pharmaceutical 
     Stockpile; $1,000,000,000 shall be for the purchase and 
     deployment of the smallpox vaccine; and $73,000,000 shall be 
     for improving laboratory security at the National Institutes 
     of Health and the centers for Disease Control and Prevention. 
     At the discretion of the Secretary, these amounts may be 
     transferred between categories subject to normal 
     reprogramming procedures.

                               CHAPTER 6

                      DEPARTMENT OF TRANSPORTATION

               Office of the Secretary of Transportation


                         salaries and expenses

       For necessary expenses for aviation security activities, 
     $1,200,000,000: Provided, That not to exceed $1,200,000,000 
     in fees authorized for this purpose shall be credited to 
     this appropriation as offsetting collections and use for 
     necessary and authorized expenses under this heading: 
     Provided further, That the Secretary of Transportation may 
     transfer amounts made available under this heading to 
     other federal agencies consistent with authorizing law 
     governing aviation security activities: Provided further, 
     That no funds provided under this heading shall be 
     available for obligation unless an act authorizing the 
     collection of such fees and the crediting of such fees to 
     serve as offsetting collections to the appropriation 
     account for aviation security activities is enacted into 
     law.

                              Coast Guard


                           operating expenses

       For an additional amount for the operation and maintenance 
     of the Coast Guard, not otherwise provided for, $70,000,000.

                    Federal Aviation Administration


                               operations

       For an additional amount for necessary expenses of the 
     Federal Aviation Administration, not otherwise provided for, 
     $10,000,000.


                 research, engineering, and development

                    (airport and airway trust fund)

       For an additional amount for necessary expenses for 
     research, engineering, and development, $100,000,000, to be 
     derived from the Airport and Airway Trust Fund.


                       grants-in-aid for airports

                    (airport and airway trust fund)

       To enable the Federal Aviation Administrator to compensate 
     airports for a portion of the direct costs associated with 
     new, additional or revised security requirements imposed on 
     airport operators by the Administrator on or after September 
     11, 2001, $1,000,000,000.

                    Federal Railroad Administration


                         safety and operations

       For an additional amount to enable the Federal Railroad 
     Administrator to make grants for the purpose of enhancing 
     security of the nation's freight railroads, $50,000,000.


     capital grants to the national Railroad Passenger Corporation

       For an additional amount of necessary expenses of capital 
     improvements of the National Railroad Passenger Corporation 
     as authorized by 49 U.S.C. 24104(a), $760,062,000.

                     Federal Transit Administration


                             formula grants

       For an additional amount to enable the Federal Transit 
     Administrator to make formula grants to the nation's transit 
     systems for the purpose of enhancing security at said 
     systems, $500,000,000: Provided, That the provisions of 49 
     U.S.C. 5307(e) and 49 U.S.C. 5311(g)(2) shall not apply to 
     funds made available under this paragraph.


                       capital investment grants

       For an additional amount to enable the Federal Transit 
     Administrator to make discretionary grants to the nation's 
     transit systems for the purpose of enhancing security at said 
     systems and for the operation and capital expansion of 
     systems severely impacted by the September 11, 2001, 
     terrorist attacks on the United States, $750,000,000: 
     Provided, That in administering funds made available under 
     this paragraph, the Federal Transit Administrator shall 
     consult with other appropriate federal agencies so as to 
     direct funds to the most vulnerable and most severely 
     impacted transit systems: Provided further, That the 
     provisions of 49 U.S.C. 5309(h) shall not apply to funds made 
     available under this paragraph.

                               CHAPTER 7

                       DEPARTMENT OF THE TREASURY

                     United States Customs Service


                         salaries and expenses

       For an additional amount for ``Salaries and Expenses'', 
     $327,000,000 shall be available until September 30, 2003; of 
     this amount, not to exceed $125,000,000 shall be available 
     for the procurement and deployment of non-intrusive and 
     counterterrorism inspection technology; $31,070,000 shall be 
     available for increased staffing to combat terrorism; not 
     less than $77,500,000 shall be available for equipment and 
     infrastructure improvements to combat terrorism; of which not 
     less than $68,130,000 shall be available for seaport 
     security; of which not to exceed $25,300,000 shall be used to 
     establish a backup data center.

                          U.S. POSTAL SERVICE


                   PAYMENT TO THE POSTAL SERVICE FUND

       For an additional payment to the Postal Service Fund to 
     enable the Postal Service to build and establish a system for 
     sanitizing and screening mail matter, to protect postal 
     employees and postal customers from exposure to biohazardous 
     material, and to replace or repair Postal Service facilities 
     destroyed or damaged in New York City as a result of the 
     September 11, 2001, terrorist attacks, $1,120,000,000, to 
     remain available until September 30, 2003.

                           INDEPENDENT AGENCY

                    GENERAL SERVICES ADMINISTRATION


                        real property activities

                         federal buildings fund

                 limitation on availability of revenue

       For an additional amount, and to be deposited into the 
     Federal Buildings Fund, $85,000,000, for Capital Improvements 
     to

[[Page S11855]]

     United States-Canada and United States-Mexico Border 
     Facilities: Provided, That these funds shall not be available 
     for expenses in connection with a construction, repair, 
     alteration, or acquisition project for which a prospectus, if 
     required by the Public Buildings Act of 1959, as amended, has 
     not been approved, except that necessary funds may be 
     expended for required expenses in connection with the 
     development of a proposed prospectus.

                  Funds Appropriated to the President


    information technology systems to enhance homeland defense and 
                          information security

                     (including transfer of funds)

       For an additional amount for expenses related to improving 
     Federal agency information technology systems associated with 
     homeland defense and information security, $1,000,000,000, to 
     remain available until September 30, 2003: Provided, That 
     these projects may include, but are not limited to, efforts 
     to improve the Federal Government's information security 
     systems; to protect critical infrastructure; to provide 
     stronger defenses against natural and man-made threats to the 
     nation; and to enable Federal agencies to take advantage of 
     information technology in sharing information and conducting 
     transactions with one another and with state and local 
     governments in furtherance of the above goals: Provided 
     further, That the funds made available shall be transferred, 
     as necessary, by the Director of the Office of Management and 
     Budget to all affected Federal Departments and Agencies, for 
     expenses necessary to ensure that information technology that 
     is used or acquired by the Federal government meets one or 
     more of these goals: Provided further, That none of the funds 
     provided under this heading may be transferred to any 
     Department or Agency until fifteen days after the Director of 
     the Office of Management and Budget has submitted to the 
     House and Senate Committees on Appropriations, the House 
     Committee on Government Reform and the Senate Governmental 
     Affairs Committee a proposed allocation and plan for that 
     Department or Agency to improve information technology 
     systems: Provided further, That the transfer authority 
     provided in this paragraph is in addition to any other 
     transfer authority contained elsewhere in this or any 
     other Act.
       The Director of the Office of Management and Budget shall 
     establish procedures for accepting and reviewing proposals 
     for funding, and shall consult with interagency councils, 
     including the Chief Information Officers Council, the Chief 
     Financial Officers Council, and procurement councils, in 
     establishing procedures and reviewing proposals. When 
     reviewing proposals, the Director of the Office of Management 
     and Budget shall observe and incorporate the following 
     procedures--
       (1) a project requiring substantial involvement or funding 
     from a Department must be approved by a senior official with 
     agency-wide authority on behalf of the Secretary or agency 
     head, who shall report directly to the Secretary or agency 
     head;
       (2) agencies must demonstrate measurable mission benefits 
     commensurate with the proposed costs;
       (3) funded projects must adhere to fundamental capital 
     planning and processes;
       (4) agencies must assess the results of funded projects;
       (5) agencies shall identify in their proposals resource 
     commitments from any other agencies involved, and shall 
     include plans for potential continuation of projects after 
     funds from this appropriation are exhausted; and
       (6) after considering the recommendations to the 
     interagency councils, the Director of the Office of 
     Management and Budget shall have final authority to determine 
     which of the candidate projects shall be funded.

                               CHAPTER 8

                           INDEPENDENT AGENCY

                  Federal Emergency Management Agency


              emergency management planning and assistance

       For an additional amount for ``Emergency management 
     planning and assistance'', $600,000,000 for programs as 
     authorized by section 33 of the Federal Fire Prevention and 
     Control Act of 1974, as amended (15 U.S.C. 2201 et seq.): 
     Provided, That up to 5 percent of this amount shall be 
     transferred to ``Salaries and expenses'' for program 
     administration.

                               CHAPTER 9

                     GENERAL PROVISION, THIS TITLE

       Sec.  901. No part of any appropriation contained in this 
     title shall remain available for obligation beyond the 
     current fiscal year unless expressly so provided herein.
                                  ____

  SA 2126. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. ____. PERMANENT REPEAL OF ESTATE TAXES.

       Section 901 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is amended--
       (1) by striking ``this Act'' and all that follows through 
     ``2010.'' in subsection (a) and inserting ``this Act (other 
     than title V) shall not apply to taxable, plan, or limitation 
     years beginning after December 31, 2010.'', and
       (2) by striking ``, estates, gifts, and transfers'' in 
     subsection (b).
                                  ____

  SA 2127. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. ____. PERSONAL TRAVEL CREDIT.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 (relating to nonrefundable personal credits) is 
     amended by inserting after section 25B the following new 
     section:

     ``SEC. 25C. PERSONAL TRAVEL CREDIT.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the 
     qualified personal travel expenses which are incurred and 
     paid by the taxpayer on or after the date of the enactment of 
     this section and before January 1, 2002.
       ``(b) Maximum Credit.--The credit allowed to a taxpayer 
     under subsection (a) for any taxable year shall not exceed 
     $500 ($1,000, in the case of a joint return).
       ``(c) Qualified Personal Travel Expenses.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified personal travel 
     expenses' means reasonable expenses in connection with 1 
     qualifying personal trip away from the taxpayer's residence 
     for--
       ``(A) travel by aircraft, rail, watercraft, or motor 
     vehicle, and
       ``(B) lodging while away from home at any commercial 
     lodging facility.
     Such term does not include expenses for meals, entertainment, 
     amusement, or recreation.
       ``(2) Qualifying personal trip.--
       ``(A) In general.--The term `qualifying personal trip' 
     means travel within the United States (including the 
     Commonwealth of Puerto Rico and the possessions of the United 
     States)--
       ``(i) the farthest destination of which is at least 100 
     miles from the taxpayer's residence,
       ``(ii) involves an overnight stay at a commercial lodging 
     facility and
       ``(iii) which is taken on or after the date of the 
     enactment of this section.
       ``(B) Only personal travel included.--Such term shall not 
     include travel if, without regard to this section, any 
     expenses in connection with such travel are deductible in 
     connection with a trade or business or activity for the 
     production of income.
       ``(3) Commercial lodging facility.--The term `commercial 
     lodging facility' includes any hotel, motel, resort, rooming 
     house, or campground.
       ``(d) Special Rules.--
       ``(1) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(2) Expenses must be substantiated.--No credit shall be 
     allowed by subsection (a) unless the taxpayer substantiates 
     by adequate records or by sufficient evidence corroborating 
     the taxpayer's own statement the amount of the expenses 
     described in subsection (c)(1).
       ``(e) Denial of Double Benefit.--No deduction shall be 
     allowed under this chapter for any expense for which credit 
     is allowed under this section.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B), as added and amended by the 
     Economic Growth and Tax Relief Reconciliation Act of 2001, is 
     amended by striking ``23 and 25B'' and inserting ``23, 25B, 
     and 25C''.
       (2) Section 25(e)(1)(C) is amended by striking ``23 and 
     1400C'' and by inserting ``23, 25C, and 1400C''.
       (3) Section 25(e)(1)(C), as amended by the Economic Growth 
     and Tax Relief Reconciliation Act of 2001, is amended by 
     inserting ``25C,'' after ``25B,''.
       (4) Section 25B, as added by the Economic Growth and Tax 
     Relief Reconciliation Act of 2001, is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25C''.
       (5) Section 26(a)(1), as amended by the Economic Growth and 
     Tax Relief Reconciliation Act of 2001, is amended by striking 
     ``and 25B'' and inserting ``25B, and 25C''.
       (6) Section 1400C(d) is amended by inserting ``and section 
     25C'' after ``this section''.
       (7) Section 1400C(d), as amended by the Economic Growth and 
     Tax Relief Reconciliation Act of 2001, is amended by striking 
     ``and 25B'' and inserting ``25B, and 25C''.
       (8) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 is amended by inserting before the 
     item relating to section 26 the following new item:

``Sec. 25C. Personal travel credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
                                  ____

  SA 2128. Mrs. LINCOLN submitted an amendment intended to be proposed 
by her to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:


[[Page S11856]]


       At the end add the following:

                  TITLE XI--SUBCHAPTER S MODERNIZATION

     SEC. 1101. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This title may be cited as the 
     ``Subchapter S Modernization Act of 2001''.
       (b) Table of Contents.--The table of contents is as 
     follows:

Sec. 1101. Short title; table of contents.

         Subtitle A--Eligible Shareholders of an S Corporation

Sec. 1111. Members of family treated as 1 shareholder.
Sec. 1112. Nonresident aliens allowed to be shareholders.
Sec. 1113. Expansion of bank S corporation eligible shareholders to 
              include IRAs.
Sec. 1114. Increase in number of eligible shareholders to 150.

      Subtitle B--Qualification and Eligibility Requirements of S 
                              Corporations

Sec. 1121. Issuance of preferred stock permitted.
Sec. 1122. Safe harbor expanded to include convertible debt.
Sec. 1123. Repeal of excessive passive investment income as a 
              termination event.
Sec. 1124. Modifications to passive income rules.
Sec. 1125. Adjustment to basis of S corporation stock for certain 
              charitable contributions.

          Subtitle C--Treatment of S Corporation Shareholders

Sec. 1131. Treatment of losses to shareholders.
Sec. 1132. Transfer of suspended losses incident to divorce.
Sec. 1133. Use of passive activity loss and at-risk amounts by 
              qualified subchapter S trust income beneficiaries.
Sec. 1134. Deductibility of interest expense incurred by an electing 
              small business trust to acquire S corporation stock.
Sec. 1135. Disregard of unexercised powers of appointment in 
              determining potential current beneficiaries of ESBT.
Sec. 1136. Clarification of electing small business trust distribution 
              rules.
Sec. 1137. Allowance of charitable contributions deduction for electing 
              small business trusts.
Sec. 1138. Shareholder basis not increased by income derived from 
              cancellation of S corporation's debt.
Sec. 1139. Back to back loans as indebtedness.

     Subtitle D--Expansion of S Corporation Eligibility for Banks.

Sec. 1141. Exclusion of investment securities income from passive 
              income test for bank S corporations.
Sec. 1142. Treatment of qualifying director shares.
Sec. 1143. Recapture of bad debt reserves.

            Subtitle E--Qualified Subchapter S Subsidiaries

Sec. 1151. Relief from inadvertently invalid qualified subchapter S 
              subsidiary elections and terminations.
Sec. 1152. Information returns for qualified subchapter S subsidiaries.
Sec. 1153. Treatment of the sale of interest in a qualified subchapter 
              S subsidiary.
Sec. 1154. Exception to application of step transaction doctrine for 
              restructuring in connection with making qualified 
              subchapter S subsidiary elections.

                   Subtitle F--Additional Provisions

Sec. 1161. Elimination of all earnings and profits attributable to pre-
              1983 years.
Sec. 1162. No gain or loss on deferred intercompany transactions 
              because of conversion to S corporation or qualified S 
              corporation subsidiary.
Sec. 1163. Treatment of charitable contribution and foreign tax credit 
              carryforwards.
Sec. 1164. Distributions by an S corporation to an employee stock 
              ownership plan.
Sec. 1165. Special rules of application.

         Subtitle A--Eligible Shareholders of an S Corporation

     SEC. 1111. MEMBERS OF FAMILY TREATED AS 1 SHAREHOLDER.

       (a) In General.--Paragraph (1) of section 1361(c) (relating 
     to special rules for applying subsection (b)) is amended to 
     read as follows:
       ``(1) Members of family treated as 1 shareholder.--
       ``(A) In general.--For purpose of subsection (b)(1)(A)--
       ``(i) except as provided in clause (ii), a husband and wife 
     (and their estates) shall be treated as 1 shareholder, and
       ``(ii) in the case of a family with respect to which an 
     election is in effect under subparagraph (E), all members of 
     the family shall be treated as 1 shareholder.
       ``(B) Members of the family.--For purpose of subparagraph 
     (A)(ii), the term `members of the family' means the common 
     ancestor, lineal descendants of the common ancestor and the 
     spouses (or former spouses) of such lineal descendants or 
     common ancestor.
       ``(C) Common ancestor.--For purposes of this paragraph, an 
     individual shall not be considered a common ancestor if, as 
     of the later of the effective date of this paragraph or the 
     time the election under section 1362(a) is made, the 
     individual is more than 6 generations removed from the 
     youngest generation of shareholders.
       ``(D) Effect of adoption, etc.--In determining whether any 
     relationship specified in subparagraph (B) or (C) exists, the 
     rules of section 152(b)(2) shall apply.
       ``(E) Election.--An election under subparagraph (A)(ii)--
       ``(i) must be made with the consent of shareholders 
     (including those that are family members) holding in the 
     aggregate more than one-half of the shares of stock in the 
     corporation on the day the election is made,
       ``(ii) in the case of--

       ``(I) an electing small business trust, shall be made by 
     the trustee of the trust, and
       ``(II) a qualified subchapter S trust, shall be made by the 
     beneficiary of the trust,

       ``(iii) under regulations, shall remain in effect until 
     terminated, and
       ``(iv) shall apply only with respect to 1 family in any 
     corporation.''.
       (b) Relief From Inadvertent Invalid Election or 
     Termination.--Section 1362(f) (relating to inadvertent 
     invalid elections or terminations), as amended by section 
     1151, is amended--
       (1) by inserting ``or under section 1361(c)(1)(A)(ii)'' 
     after ``section 1361(b)(3)(B)(ii)'' in paragraph (1), and
       (2) by inserting ``or under section 1361(c)(1)(E)(iii)'' 
     after ``section 1361(b)(3)(C)'' in paragraph (1)(B).
       (c) Effective Dates.--
       (1) Subsection (a).--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2001.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to elections and terminations made after December 
     31, 2001.

     SEC. 1112. NONRESIDENT ALIENS ALLOWED TO BE SHAREHOLDERS.

       (a) Nonresident Aliens Allowed To Be Shareholders.--
       (1) In general.--Paragraph (1) of section 1361(b) (defining 
     small business corporation) is amended--
       (A) by adding ``and'' at the end of subparagraph (B),
       (B) by striking subparagraph (C), and
       (C) by redesignating subparagraph (D) as subparagraph (C).
       (2) Conforming amendments.--Paragraph (4) and (5)(A) of 
     section 1361(c) (relating to special rules for applying 
     subsection (b)) are each amended by striking ``subsection 
     (b)(1)(D)'' and inserting ``subsection (b)(1)(C)''.
       (b) Nonresident Alien Shareholder Treated as Engaged in 
     Trade or Business Within United States.--
       (1) In general.--Section 875 is amended--
       (A) by striking ``and'' at the end of paragraph (1),
       (B) by striking the period at the end of paragraph (2) and 
     inserting ``, and'', and
       (C) by adding at the end the following new paragraph:
       ``(3) a nonresident alien individual shall be considered as 
     being engaged in a trade or business within the United States 
     if the S corporation of which such individual is a 
     shareholder is so engaged.''.
       (2) Application of withholding tax on nonresident alien 
     shareholders.--Section 1446 (relating to withholding tax on 
     foreign partners' share of effectively connected income) is 
     amended by redesignating subsection (f) as subsection (g) and 
     by inserting after subsection (e) the following new 
     subsection:
       ``(f) S Corporation Treated as Partnership, Etc.--For 
     purposes of this section--
       ``(1) an S corporation shall be treated as a partnership,
       ``(2) the shareholders of such corporation shall be treated 
     as partners of such partnership,
       ``(3) any reference to section 704 shall be treated as a 
     reference to section 1366, and
       ``(4) no withholding tax under subsection (a) shall be 
     required in the case of any income realized by such 
     corporation and allocable to a shareholder which is an 
     electing small business trust (as defined in section 
     1361(e)).''.
       (3) Conforming amendments.--
       (A) The heading of section 875 is amended to read as 
     follows:

     ``SEC. 875. PARTNERSHIPS; BENEFICIARIES OF ESTATES AND 
                   TRUSTS; S CORPORATIONS.''.

       (B) The heading of section 1446 is amended to read as 
     follows:

     ``SEC. 1446. WITHHOLDING TAX ON FOREIGN PARTNERS' AND S 
                   CORPORATION SHAREHOLDERS' SHARE OF EFFECTIVELY 
                   CONNECTED INCOME.''.

       (4) Clerical amendments.--
       (A) The item relating to section 875 in the table of 
     sections for subpart A of part II of subchapter N of chapter 
     1 is amended to read as follows:

``Sec. 875. Partnerships; beneficiaries of estates and trusts; S 
              corporations.''.
       (B) The item relating to section 1446 in the table of 
     sections for subchapter A of chapter 3 is amended to read as 
     follows:

``Sec. 1446 Withholding tax on foreign partners' and S corporation 
              shareholders' share of effectively connected income.''.
       (C) Permanent establishment of partners and s corporation 
     shareholders.--

[[Page S11857]]

     Section 894 (relating to income affected by treaty) is 
     amended by redesignating subsection (c) as subsection (d) and 
     by inserting after subsection (b) the following new 
     subsection:
       ``(c) Permanent Establishment of Partners and S Corporation 
     Shareholders.--If a partnership or S corporation has a 
     permanent establishment in the United States (within the 
     meaning of a treaty to which the United States is a party) at 
     any time during a taxable year of such entity, a nonresident 
     alien individual or foreign corporation which is a partner in 
     such partnership, or a nonresident alien individual who is a 
     shareholder in such S corporation, shall be treated as having 
     a permanent establishment in the United States for purposes 
     of such treaty.''.
       (c) Application of Other Withholding Tax Rules on 
     Nonresident Alien Shareholders.--
       (1) Section 1441.--Section 1441 (relating to withholding of 
     tax on nonresident aliens) is amended by redesignating 
     subsection (g) as subsection (h) and by inserting after 
     subsection (f) the following new subsection:
       ``(g) S Corporation Treated as Partnership, Etc.--For 
     purposes of this section--
       ``(1) an S corporation shall be treated as a partnership,
       ``(2) the shareholders of such corporation shall be treated 
     as partners of such partnership, and
       ``(3) no deduction or withholding under subsection (a) 
     shall be required in the case of any item of income realized 
     by such corporation and allocable to a shareholder which is 
     an electing small business trust (as defined in section 
     1361(e)).''.
       (2) Section 1445.--Section 1445(e) (relating to special 
     rules relating to distributions, etc., by corporations, 
     partnerships, trusts, or estates) is amended by redesignating 
     paragraph (6) as paragraph (7) and by inserting after 
     paragraph (5) the following new paragraph:
       ``(6) S corporation treated as partnership, etc.--For 
     purposes of this section--
       ``(A) an S corporation shall be treated as a partnership, 
     and
       ``(B) the shareholders of such corporation shall be treated 
     as partners of such partnership, and
       ``(C) no deduction or withholding under subsection (a) 
     shall be required in the case of any gain realized by such 
     corporation and allocable to a shareholder which is an 
     electing small business trust (as defined in section 
     1361(e)).''.
       (d) Conforming Amendment.--Section 1361(e)(2) is amended by 
     inserting ``(including a nonresident alien)'' after 
     ``person'' the first place it appears.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1113. EXPANSION OF BANK S CORPORATION ELIGIBLE 
                   SHAREHOLDERS TO INCLUDE IRAS.

       (a) In General.--Section 1361(c)(2)(A) (relating to certain 
     trusts permitted as shareholders) is amended by inserting 
     after clause (v) the following new clause:
       ``(vi) In the case of a corporation which is a bank (as 
     defined in section 581), a trust which constitutes an 
     individual retirement account under section 408(a), including 
     one designated as a Roth IRA under section 408A, but only to 
     the extent of the stock held by such trust in such bank as of 
     the date of the enactment of this clause.''.
       (b) Treatment as Shareholder.--Section 1361(c)(2)(B) 
     (relating to treatment as shareholders) is amended by adding 
     at the end the following new clause:
       ``(vi) In the case of a trust described in clause (vi) of 
     subparagraph (A), the individual for whose benefit the trust 
     was created shall be treated as a shareholder.''.
       (c) Sale of Stock in IRA Relating to S Corporation Election 
     Exempt From Prohibited Transaction Rules.--Section 4975(d) 
     (relating to exemptions) is amended by striking ``or'' at the 
     end of paragraph (14), by striking the period at the end of 
     paragraph (15) and inserting ``; or'', and by adding at the 
     end the following new paragraph:
       ``(16) a sale of stock held by a trust which constitutes an 
     individual retirement account under section 408(a) to the 
     individual for whose benefit such account is established if 
     such sale is pursuant to an election under section 
     1362(a).''.
       (d) Conforming Amendment.--Section 512(e)(1) is amended by 
     inserting ``1361(c)(2)(A)(vi) or'' before ``1361(c)(6)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to trusts which constitute individual retirement 
     accounts on the date of the enactment of this Act.

     SEC. 1114. INCREASE IN NUMBER OF ELIGIBLE SHAREHOLDERS TO 
                   150.

       (a) In General.--Section 1361(b)(1)(A) (defining small 
     business corporation) is amended by striking ``75'' and 
     inserting ``150''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

      Subtitle B--Qualification and Eligibility Requirements of S 
                              Corporations

     SEC. 1121. ISSUANCE OF PREFERRED STOCK PERMITTED.

       (a) In General.--Section 1361 (defining S corporation) is 
     amended by adding at the end the following new subsection:
       ``(f) Treatment of Qualified Preferred Stock.--
       ``(1) In general.--For purposes of this subchapter--
       ``(A) qualified preferred stock shall not be treated as a 
     second class of stock, and
       ``(B) no person shall be treated as a shareholder of the 
     corporation by reason of holding qualified preferred stock.
       ``(2) Qualified preferred stock defined.--For purposes of 
     this subsection, the term `qualified preferred stock' means 
     stock which meets the requirements of subparagraphs (A), (B), 
     and (C) of section 1504(a)(4). Stock shall not fail to be 
     treated as qualified preferred stock merely because it is 
     convertible into other stock.
       ``(3) Distributions.--A distribution (not in part or full 
     payment in exchange for stock) made by the corporation with 
     respect to qualified preferred stock shall be includible as 
     ordinary income of the holder and deductible to the 
     corporation as an expense in computing taxable income under 
     section 1363(b) in the year such distribution is received.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 1361(b) is amended by 
     inserting ``, except as provided in subsection (f),'' before 
     ``which does not''.
       (2) Subsection (a) of section 1366 is amended by adding at 
     the end the following new paragraph:
       ``(3) Allocation with respect to qualified preferred 
     stock.--The holders of qualified preferred stock (as defined 
     in section 1361(f)) shall not, with respect to such stock, be 
     allocated any of the items described in paragraph (1).''.
       (3) So much of clause (ii) of section 354(a)(2)(C) as 
     precedes subclause (II) is amended to read as follows:
       ``(ii) Recapitalization of family-owned corporations and s 
     corporations.--

       ``(I) In general.--Clause (i) shall not apply in the case 
     of a recapitalization under section 368(a)(I)(E) of a family-
     owned corporation or S corporation.''.

       (4) Subsection (a) of section 1373 is amended by striking 
     ``and'' at the end of paragraph (1), by striking the period 
     at the end of paragraph (2) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(3) no amount of an expense deductible under this 
     subchapter by reason of section 1361(f)(3) shall be 
     apportioned or allocated to such income.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1122. SAFE HARBOR EXPANDED TO INCLUDE CONVERTIBLE DEBT.

       (a) In General.--Subparagraph (B) of section 1361(c)(5) 
     (defining straight debt) is amended by striking clauses (ii) 
     and (iii) and inserting the following new clauses:
       ``(ii) in any case in which the terms of such promise 
     include a provision under which the obligation to pay may be 
     converted (directly or indirectly) into stock of the 
     corporation, such terms, taken as a whole, are substantially 
     the same as the terms which could have been obtained on the 
     effective date of the promise from a person which is not a 
     related person (within the meaning of section 465(b)(3)(C)) 
     to the S corporation or its shareholders, and
       ``(iii) the creditor is--

       ``(I) an individual,
       ``(II) an estate,
       ``(III) a trust described in paragraph (2),
       ``(IV) an exempt organization described in paragraph (6), 
     or
       ``(V) a person which is actively and regularly engaged in 
     the business of lending money.''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1123. REPEAL OF EXCESSIVE PASSIVE INVESTMENT INCOME AS A 
                   TERMINATION EVENT.

       (a) In General.--Section 1362(d) (relating to termination) 
     is amended by striking paragraph (3).
       (b) Conforming Amendments.--
       (1) Section 1362(f)(1) is amended by striking ``or (3)''.
       (2) Clause (i) of section 1042(c)(4)(A) is amended by 
     striking ``section 1362(d)(3)(C)'' and inserting ``section 
     1375(b)(4)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1124. MODIFICATIONS TO PASSIVE INCOME RULES.

       (a) Increased Limit.--
       (1) In general.--Subsection (a)(2) of section 1375 
     (relating to tax imposed when passive investment income of 
     corporation having accumulated earnings and profits exceeds 
     25 percent of gross receipts) is amended by striking ``25 
     percent'' and inserting ``60 percent''.
       (2) Conforming amendments.--
       (A) Subparagraph (J) of section 26(b)(2) is amended by 
     striking ``25 percent'' and inserting ``60 percent''.
       (B) Clause (i) of section 1375(b)(1)(A) is amended by 
     striking ``25 percent'' and inserting ``60 percent''.
       (C) The heading for section 1375 is amended by striking 
     ``25 percent'' and inserting ``60 percent''.
       (D) The table of sections for part III of subchapter S of 
     chapter 1 is amended by striking ``25 percent'' in the item 
     relating to section 1375 and inserting ``60 percent''.
       (b) Repeal of Passive Income Capital Gain Category.--
       (1) In general.--Subsection (b) of section 1375 (relating 
     to tax imposed when passive investment income of corporation 
     having accumulated earnings and profits exceeds 60 percent of 
     gross receipts), as amended by subsection (a), is amended by 
     striking paragraphs (3) and (4) and inserting the following 
     new paragraph:

[[Page S11858]]

       ``(3) Passive investment income defined.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `passive investment income' means gross 
     receipts derived from royalties, rents, dividends, interest, 
     and annuities.
       ``(B) Exception for interest on notes from sales of 
     inventory.--The term `passive investment income' shall not 
     include interest on any obligation acquired in the ordinary 
     course of the corporation's trade or business from its sale 
     of property described in section 1221(a)(1).
       ``(C) Treatment of certain lending or finance companies.--
     If the S corporation meets the requirements of section 
     542(c)(6) for the taxable year, the term `passive investment 
     income' shall not include gross receipts for the taxable year 
     which are derived directly from the active and regular 
     conduct of a lending or finance business (as defined in 
     section 542(d)(1)).
       ``(D) Treatment of certain dividends.--If an S corporation 
     holds stock in a C corporation meeting the requirements of 
     section 1504(a)(2), the term `passive investment income' 
     shall not include dividends from such C corporation to the 
     extent such dividends are attributable to the earnings and 
     profits of such C corporation derived from the active conduct 
     of a trade or business.
       ``(E) Coordination with section 1374.--The amount of 
     passive investment income shall be determined by not taking 
     into account any recognized built-in gain or loss of the S 
     corporation for any taxable year in the recognition period. 
     Terms used in the preceding sentence shall have the same 
     respective meaning as when used in section 1374.''.
       (2) Conforming amendments.--Section 1375(d) is amended by 
     striking ``subchapter C'' both places it appears and 
     inserting ``accumulated''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1125. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR 
                   CERTAIN CHARITABLE CONTRIBUTIONS.

       (a) In General.--Paragraph (1) of section 1367(a) (relating 
     to adjustments to basis of stock of shareholders, etc.) is 
     amended by striking ``and'' at the end of subparagraph (B), 
     by striking the period at the end of subparagraph (C) and 
     inserting ``, and'', and by adding at the end the following 
     new subparagraph:
       ``(D) the excess of the amount of the shareholder's 
     proportionate share of any charitable contribution made by 
     the S corporation over the shareholder's proportionate share 
     of the adjusted basis of the property contributed.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

          Subtitle C--Treatment of S Corporation Shareholders

     SEC. 1131. TREATMENT OF LOSSES TO SHAREHOLDERS.

       (a) Liquidations.--Section 331 (relating to gain or loss to 
     shareholders in corporate liquidations) is amended by 
     redesignating subsection (c) as subsection (d) and by 
     inserting after subsection (b) the following new subsection:
       ``(c) Loss on Liquidations of S Corporation.--
       ``(1) In general.--The portion of any net loss recognized 
     by a shareholder of an S corporation (as defined in section 
     1361(a)(1))--
       ``(A) on amounts received by such shareholder in a 
     distribution in complete liquidation of such S corporation, 
     or
       ``(B) on an installment obligation received by such 
     shareholder with respect to a sale or exchange by the 
     corporation during the 12-month period beginning on the date 
     a plan of complete liquidation is adopted if the liquidation 
     is completed during such 12-month period,

     which does not exceed the ordinary income basis of stock of 
     such S corporation in the hands of such shareholder shall not 
     be treated as a loss from the sale or exchange of a capital 
     asset but shall be treated as an ordinary loss.
       ``(2) Ordinary income basis.--For purposes of this 
     subsection, the ordinary income basis of stock of an S 
     corporation in the hands of a shareholder of such S 
     corporation shall be an amount equal to the portion of such 
     shareholder's basis in such stock which is equal to the 
     aggregate increases in such basis under section 1367(a)(1) 
     resulting from such shareholder's pro rata share of ordinary 
     income of such S corporation attributable to the complete 
     liquidation.''.
       (b) Suspended Passive Activity Losses.--Paragraph (3) of 
     section 1371(b) is amended to read as follows:
       ``(3) Treatment of s year as elapsed year; passive 
     losses.--Nothing in paragraphs (1) and (2) shall prevent 
     treating a taxable year for which a corporation is an S 
     corporation as a taxable year for purposes of determining the 
     number of taxable years to which an item may be carried back 
     or carried forward nor prevent the allowance of a passive 
     activity loss deduction to the extent provided by section 
     469(g).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1132. TRANSFER OF SUSPENDED LOSSES INCIDENT TO DIVORCE.

       (a) In General.--Section 1366(d) (relating to special rules 
     for losses and deductions) is amended by adding at the end 
     the following new paragraph:
       ``(4) Transfer of suspended losses and deductions when 
     stock is transferred incident to divorce.--For purposes of 
     paragraph (2), the transfer of any shareholder's stock in an 
     S corporation incident to a decree of divorce shall include 
     any loss or deduction described in such paragraph 
     attributable to such stock.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transfers made after the date of the enactment 
     of this Act.

     SEC. 1133. USE OF PASSIVE ACTIVITY LOSS AND AT-RISK AMOUNTS 
                   BY QUALIFIED SUBCHAPTER S TRUST INCOME 
                   BENEFICIARIES.

       (a) In General.--Section 1361(d)(1) (relating to special 
     rule for qualified subchapter S trust) is amended--
       (1) by striking ``and'' at the end of subparagraph (A),
       (2) by striking the period at the end of subparagraph (B) 
     and inserting ``, and'', and
       (3) by adding at the end the following new subparagraph:
       ``(C) for purposes of applying sections 465 and 469(g) to 
     the beneficiary of the trust, the disposition of the S 
     corporation stock by the trust shall be treated as a 
     disposition by such beneficiary.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to transfers made after the date of the enactment 
     of this Act.

     SEC. 1134. DEDUCTIBILITY OF INTEREST EXPENSE INCURRED BY AN 
                   ELECTING SMALL BUSINESS TRUST TO ACQUIRE S 
                   CORPORATION STOCK.

       (a) In General.--Subparagraph (C) of section 641(c)(2) 
     (relating to modifications) is amended by inserting after 
     clause (iii) the following new clause:
       ``(iv) Any interest expense incurred to acquire stock in an 
     S corporation.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1135. DISREGARD OF UNEXERCISED POWERS OF APPOINTMENT IN 
                   DETERMINING POTENTIAL CURRENT BENEFICIARIES OF 
                   ESBT.

       (a) In General.--Section 1361(e)(2) (defining potential 
     current beneficiary) is amended--
       (1) by inserting ``(determined without regard to any 
     unexercised (in whole or in part) power of appointment during 
     such period)'' after ``of the trust'' in the first sentence, 
     and
       (2) by striking ``60-day'' in the second sentence and 
     inserting ``1-year''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1136. CLARIFICATION OF ELECTING SMALL BUSINESS TRUST 
                   DISTRIBUTION RULES.

       (a) In General.--Section 641(c)(1) (relating to special 
     rules for taxation of electing small business trusts) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (A),
       (2) by redesignating subparagraph (B) as subparagraph (C), 
     and
       (3) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) any distribution attributable to the portion treated 
     as a separate trust shall be treated separately from any 
     distribution attributable to the portion not so treated, 
     and''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1137. ALLOWANCE OF CHARITABLE CONTRIBUTIONS DEDUCTION 
                   FOR ELECTING SMALL BUSINESS TRUSTS.

       (a) In General.--Section 641(c)(2)(C) (relating to 
     modifications), as amended by section 1134(a), is amended by 
     inserting after clause (iv) the following new clause:--
       ``(v) Deductions described in section 642(c)(1).''.
       (b) Conforming Amendment.--Section 512(e) (relating to 
     special rules applicable to S corporations) is amended by 
     redesignating subparagraph (3) as subparagraph (4) and by 
     inserting after subparagraph (2) the following new 
     subparagraph:
       ``(3) Amounts received from an electing small business 
     trust.--Notwithstanding any other provision of this part, 
     amounts received by an organization described in section 
     511(a)(2) from an electing small business trust (as defined 
     in section 1361(e)) shall be taken into account in computing 
     the unrelated business taxable income of such organization to 
     the extent such amount is deducted by such trust under 
     section 641(c)(2)(C)(v).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1138. SHAREHOLDER BASIS NOT INCREASED BY INCOME DERIVED 
                   FROM CANCELLATION OF S CORPORATION'S DEBT.

       (a) In General.--Section 1366(a)(1) (relating to 
     determination of shareholder's tax liability) is amended by 
     inserting ``but not including income excludable from gross 
     income under section 108'' after ``tax-exempt income''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to discharges of indebtedness occurring after 
     December 31, 2000.

     SEC. 1139. BACK TO BACK LOANS AS INDEBTEDNESS.

       (a) In General.--Section 1366(d) (relating to special rules 
     for losses and deductions) is amended by adding at the end 
     the following new paragraph:

[[Page S11859]]

       ``(4) Loans included in indebtedness of an S corporation.--
     For purposes of subsection (d), the indebtedness of an S 
     corporation to the shareholder shall include any loans made 
     or acquired (by purchase, gift, or distribution from another 
     person) by a shareholder to the S corporation, regardless of 
     whether the funds loaned by the shareholder to the S 
     corporation were obtained by the shareholder by means of a 
     recourse loan from another person (whether related or 
     unrelated to the shareholder).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     Subtitle D--Expansion of S Corporation Eligibility for Banks.

     SEC. 1141. EXCLUSION OF INVESTMENT SECURITIES INCOME FROM 
                   PASSIVE INCOME TEST FOR BANK S CORPORATIONS.

       (a) In General.--Section 1374(b)(3) (defining passive 
     investment income) is amended by adding at the end the 
     following new subparagraph:
       ``(E) Exception for banks; etc.--In the case of a bank (as 
     defined in section 581), a bank holding company (as defined 
     in section 246A(c)(3)(B)(ii)), or a qualified subchapter S 
     subsidiary which is a bank, the term `passive investment 
     income' shall not include--
       ``(i) interest income earned by such bank, bank holding 
     company, or qualified subchapter S subsidiary, or
       ``(ii) dividends on assets required to be held by such 
     bank, bank holding company, or qualified subchapter S 
     subsidiary to conduct a banking business, including stock in 
     the Federal Reserve Bank, the Federal Home Loan Bank, or the 
     Federal Agricultural Mortgage Bank or participation 
     certificates issued by a Federal Intermediate Credit Bank.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1142. TREATMENT OF QUALIFYING DIRECTOR SHARES.

       (a) In General.--Section 1361 (defining S corporation), as 
     amended by section 1121(a), is amended by adding at the end 
     the following new subsection:
       ``(g) Treatment of Qualifying Director Shares.--
       ``(1) In general.--For purposes of this subchapter--
       ``(A) qualifying director shares shall not be treated as a 
     second class of stock, and
       ``(B) no person shall be treated as a shareholder of the 
     corporation by reason of holding qualifying director shares.
       ``(2) Qualifying director shares defined.--For purposes of 
     this subsection, the term `qualifying director shares' means 
     any shares of stock in a bank (as defined in section 581) or 
     in a bank holding company registered as such with the Federal 
     Reserve System--
       ``(i) which are held by an individual solely by reason of 
     status as a director of such bank or company or its 
     controlled subsidiary; and
       ``(ii) which are subject to an agreement pursuant to which 
     the holder is required to dispose of the shares of stock upon 
     termination of the holder's status as a director at the same 
     price as the individual acquired such shares of stock.
       ``(3) Distributions.--A distribution (not in part or full 
     payment in exchange for stock) made by the corporation with 
     respect to qualifying director shares shall be includible as 
     ordinary income of the holder and deductible to the 
     corporation as an expense in computing taxable income under 
     section 1363(b) in the year such distribution is received.''.
       (b) Conforming Amendments.--
       (1) Section 1361(b)(1) is amended by inserting ``, except 
     as provided in subsection (f),'' before ``which does not''.
       (2) Section 1366(a) is amended by adding at the end the 
     following new paragraph:
       ``(3) Allocation with respect to qualifying director 
     shares.--The holders of qualifying director shares (as 
     defined in section 1361(f)) shall not, with respect to such 
     shares of stock, be allocated any of the items described in 
     paragraph (1).''.
       (3) Section 1373(a) is amended by striking ``and'' at the 
     end of paragraph (1), by striking the period at the end of 
     paragraph (2) and inserting ``, and'', and adding at the end 
     the following new paragraph:
       ``(3) no amount of an expense deductible under this 
     subchapter by reason of section 1361(f)(3) shall be 
     apportioned or allocated to such income.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1143. RECAPTURE OF BAD DEBT RESERVES.

       Notwithstanding section 481 of the Internal Revenue Code of 
     1986, with respect to any S corporation election made by any 
     bank in taxable years beginning after December 31, 1996, such 
     bank may recognize built-in gains from changing its 
     accounting method for recognizing bad debts from the reserve 
     method under section 585 or 593 of such Code to the charge-
     off method under section 166 of such Code either in the 
     taxable year ending with or beginning with such an election.

            Subtitle E--Qualified Subchapter S Subsidiaries

     SEC. 1151. RELIEF FROM INADVERTENTLY INVALID QUALIFIED 
                   SUBCHAPTER S SUBSIDIARY ELECTIONS AND 
                   TERMINATIONS.

       (a) In General.--Section 1362(f) (relating to inadvertent 
     invalid elections or terminations) is amended--
       (1) by inserting ``or under section 1361(b)(3)(B)(ii)'' 
     after ``subsection (a)''in paragraph (1),
       (2) by inserting ``or under section 1361(b)(3)(C)'' after 
     ``subsection (d)'' in paragraph (1)(B),
       (3) by inserting ``or a qualified subchapter S subsidiary, 
     as the case may be'' after ``small business corporation'' in 
     paragraph (3)(A),
       (4) by inserting ``or a qualified subchapter S subsidiary, 
     as the case may be'' after ``S corporation'' in paragraph 
     (4), and
       (5) by inserting ``or a qualified subchapter S subsidiary, 
     as the case may be'' after ``S corporation'' in the matter 
     following paragraph (4).
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1152. INFORMATION RETURNS FOR QUALIFIED SUBCHAPTER S 
                   SUBSIDIARIES.

       (a) In General.--Section 1361(b)(3)(A) (relating to 
     treatment of certain wholly owned subsidiaries) is amended by 
     inserting ``and in the case of information returns required 
     under part III of subchapter A of chapter 61'' after 
     ``Secretary''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1153. TREATMENT OF THE SALE OF INTEREST IN A QUALIFIED 
                   SUBCHAPTER S SUBSIDIARY.

       (a) In General.--Section 1361(b)(3) (relating to treatment 
     of certain wholly owned subsidiaries) is amended by adding at 
     the end the following new subparagraph:
       ``(E) Special rule on termination.--The tax treatment of 
     the disposition of the stock of the qualified subchapter S 
     subsidiary shall be determined as if such disposition were--
       ``(i) a sale of the undivided interest in the subsidiary's 
     assets based on the percentage of the stock transferred, and
       ``(ii) followed by a deemed contribution by the S 
     corporation and the transferee in a section 351 
     transaction.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1154. EXCEPTION TO APPLICATION OF STEP TRANSACTION 
                   DOCTRINE FOR RESTRUCTURING IN CONNECTION WITH 
                   MAKING QUALIFIED SUBCHAPTER S SUBSIDIARY 
                   ELECTIONS.

       (a) In General.--Section 1361(b)(3) (relating to treatment 
     of certain wholly owned subsidiaries), as amended by section 
     1153, is amended by redesignating subparagraphs (C), (D), and 
     (E), as subparagraphs (D), (E), and (F), respectively, and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) Treatment of election.--The election under 
     subparagraph (B)(ii) shall be treated as a liquidation of the 
     qualified subchapter S subsidiary to which section 332 
     applies.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to elections effective after December 31, 2001.

                   Subtitle F--Additional Provisions

     SEC. 1161. ELIMINATION OF ALL EARNINGS AND PROFITS 
                   ATTRIBUTABLE TO PRE-1983 YEARS.

       (a) In General.--Subsection (a) of section 1311 of the 
     Small Business Job Protection Act of 1996 is amended to read 
     as follows:
       ``(a) In General.--If a corporation was an electing small 
     business corporation under subchapter S of chapter 1 of the 
     Internal Revenue Code of 1986 for any taxable year beginning 
     before January 1, 1983, the amount of such corporation's 
     accumulated earnings and profits (as of the beginning of any 
     taxable year beginning after December 31, 1982) shall be 
     reduced by an amount equal to the portion (if any) of such 
     accumulated earnings and profits which were accumulated in 
     any taxable year beginning before January 1, 1983, for which 
     such corporation was an electing small business corporation 
     under such subchapter S.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

     SEC. 1162. NO GAIN OR LOSS ON DEFERRED INTERCOMPANY 
                   TRANSACTIONS BECAUSE OF CONVERSION TO S 
                   CORPORATION OR QUALIFIED S CORPORATION 
                   SUBSIDIARY.

       With respect to taxable years beginning before, on, or 
     after July 12, 1995, the regulations under section 1502 of 
     the Internal Revenue Code of 1986 shall not cause gain or 
     loss to be recognized by reason of an election under section 
     1361(b)(3)(B) or 1362(a) of such Code.

     SEC. 1163. TREATMENT OF CHARITABLE CONTRIBUTION AND FOREIGN 
                   TAX CREDIT CARRYFORWARDS.

       (a) Charitable Contribution Carryforwards.--The last 
     sentence of section 1374(b)(2) (relating to net operating 
     loss carryforwards from C years allowed) is amended by 
     inserting ``or a charitable contribution carryforward under 
     section 170(d)(2)'' after ``capital loss carryforward''.
       (b) Foreign Tax Credit Carryforwards.--The last sentence of 
     section 1374(b)(3)(B) (relating to business credit 
     carryforwards from C years allowed) is amended by inserting 
     ``and the foreign tax credit carryforward under section 904'' 
     after ``section 53''.
       (c) Treatment of Additional Carryforwards.--Section 1374(b) 
     (relating to amount of tax) is amended by adding at the end 
     the following new paragraph:
       ``(5) Treatment of additional carryforwards.--The Secretary 
     under regulations shall provide treatment similar to the 
     preceding paragraphs of this subsection

[[Page S11860]]

     for other carryforwards attributable to taxable years for 
     which an S corporation was a C corporation.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 1164. DISTRIBUTIONS BY AN S CORPORATION TO AN EMPLOYEE 
                   STOCK OWNERSHIP PLAN.

       (a) In General.--Section 1368(f) (relating to 
     distributions) is amended by adding at the end the following 
     new subsection:
       ``(f) Distributions by an S Corporation to an Employee 
     Stock Ownership Plan.--Any distribution described in 
     subsection (a) to an employee stock ownership plan (as 
     defined in section 4975(e)(7)) shall be treated as a dividend 
     under section 404(k)(2)(A).''.
       (b) Technical Amendment.--Section 404(a)(9)(C) (relating to 
     S corporations) is amended to read as follows:
       ``(C) S corporations.--The deduction provided in this 
     paragraph shall not apply to an S corporation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to distributions received after the date of the 
     enactment of this Act.

     SEC. 1165. SPECIAL RULES OF APPLICATION.

       (a) Waiver of Limitations.--If refund or credit of any 
     overpayment of tax resulting from the application of any 
     amendment made by this Act is prevented at any time before 
     the close of the 1-year period beginning on the date of the 
     enactment of this Act by the operation of any law or rule of 
     law (including res judicata), such refund or credit may 
     nevertheless be made or allowed if claimed therefor is filed 
     before the close of such period.
       (b) Treatment of Certain Elections Under Prior Law.--For 
     purposes of section 1362(g) of the Internal Revenue Code of 
     1986 (relating to election after termination), any 
     termination or revocation under section 1362(d) of such Code 
     (as in effect on the day before enactment of this Act) shall 
     not be taken into account.
                                  ____

  SA 2129. Mr. LINCOLN submitted an amendment intended to be proposed 
by her to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At an appropriate place in title IX and insert the 
     following:

     SEC. ____. TAX INCENTIVES FOR QUALIFIED UNITED STATES 
                   INDEPENDENT FILM AND TELEVISION PRODUCTION.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by adding at the end the following new section:

     ``SEC. 45G. UNITED STATES INDEPENDENT FILM AND TELEVISION 
                   PRODUCTION WAGE CREDIT.

       ``(a) Amount of Credit.--
       ``(1) In general.--For purposes of section 38, the United 
     States independent film and television production wage credit 
     determined under this section with respect to any employer 
     for any taxable year is an amount equal to 25 percent of the 
     qualified wages paid or incurred during such taxable year.
       ``(2) Higher percentage for production employment in 
     certain areas.--In the case of qualified wages for any 
     qualified United States independent film and television 
     production located in an area eligible for designation as a 
     low-income community under section 45D or eligible for 
     designation by the Delta Regional Authority as a distressed 
     county or isolated area of distress, paragraph (1) shall be 
     applied by substituting `35 percent' for `25 percent'.
       ``(b) Only First $25,000 of Wages Per Year Taken Into 
     Account.--The amount of qualified wages paid or incurred to 
     each qualified employee which may be taken into account for a 
     taxable year shall not exceed $25,000.
       ``(c) Qualified Wages.--For purposes of this section--
       ``(1) In general.--The term `qualified wages' means--
       ``(A) any wages paid or incurred by an employer for 
     services performed in the United States by an employee while 
     such employee is a qualified employee, and
       ``(B) the employee fringe benefit expenses of the employer 
     allocable to such services performed by such employee.
       ``(2) Qualified employee.--
       ``(A) In general.--The term `qualified employee' means, 
     with respect to any period, any employee of an employer if 
     substantially all of the services performed during such 
     period by such employee for such employer are performed in an 
     activity related to any qualified United States independent 
     film and television production in a trade or business of the 
     employer.
       ``(B) Certain individuals not eligible.--Such term shall 
     not include--
       ``(i) any individual described in subparagraph (A), (B), or 
     (C) of section 51(i)(1), and
       ``(ii) any 5-percent owner (as defined in section 
     416(i)(1)(B).
       ``(3) Coordination with other wage credits.--No credit 
     shall be allowed under any other provision of this chapter 
     for wages paid to any employee during any taxable year if the 
     employer is allowed a credit under this section for any of 
     such wages.
       ``(4) Wages.--The term `wages' has the same meaning as when 
     used in section 51.
       ``(5) Employee fringe benefit expenses.--The term `employee 
     fringe benefit expenses' means the amount allowable as a 
     deduction under this chapter to the employer for any taxable 
     year with respect to--
       ``(A) employer contributions under stock bonus, pension, 
     profit-sharing, or annuity plan,
       ``(B) employer-provided coverage under any accident or 
     health plan for employees, and
       ``(C) the cost of life or disability insurance provided to 
     employees.
     Any amount treated as wages under paragraph (1)(A) shall not 
     be taken into account under this subparagraph.
       ``(d) Qualified United States Independent Film and 
     Television Production.--For purposes of this section--
       ``(1) In general.--The term `qualified United States 
     independent film and television production' means any 
     production of any motion picture (whether released 
     theatrically, for television or cable programming, or 
     directly to video cassette or any other format) or any 
     seasonal television series (including any pilot production) 
     if--
       ``(A) 75 percent of the total wages of the production are 
     qualified wages,
       ``(B) the production is created primarily for use as public 
     entertainment or for educational purposes, and
       ``(C) the total cost of wages of the production is more 
     than $200,000 but less than $10,000,000.
     Such term shall not include any production if records are 
     required under section 2257 of title 18, United States Code, 
     to be maintained with respect to any performer in such 
     production (reporting of books, films, etc. with sexually 
     explicit conduct).
       ``(2) Public entertainment.--The term `public 
     entertainment' includes a motion picture film, video tape, or 
     television program intended for initial broadcast via the 
     public broadcast spectrum or delivered via cable 
     distribution, or productions that are submitted to a national 
     organization in existence on July 27, 2001, that rates films 
     for violent or adult content. Such term does not include any 
     film or tape the market for which is primarily topical, is 
     otherwise essentially transitory in nature, or is produced 
     for private noncommercial use.
       ``(3) Inflation adjustment.--
       ``(A) In general.--In the case of any taxable year 
     beginning in a calendar year after 2001, the $10,000,000 
     amount contained in paragraph (1)(C) shall be increased by an 
     amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment under section 1(f)(3) 
     for the calendar year in which the taxable year begins, 
     determined by substituting `calendar year 2000' for `calendar 
     year 1992' in subparagraph (B) thereof.
       ``(B) Rounding.--If any increase determined under 
     subparagraph (A) is not a multiple of $500,000, such amount 
     shall be rounded to the nearest multiple of $500,000.
       ``(e) Controlled Groups.--For purposes of this section--
       ``(1) all employers treated as a single employer under 
     subsection (a) or (b) of section 52 shall be treated as a 
     single employer for purposes of this subpart, and
       ``(2) the credit (if any) determined under this section 
     with respect to each such employer shall be its proportionate 
     share of the wages giving rise to such credit.
       ``(f) Application of Certain Other Rules.--For purposes of 
     this section, rules similar to the rules of section 51(k) and 
     subsections (c) and (d) of section 52 shall apply.
       ``(g) Application of Section.--This section shall not apply 
     to taxable years beginning after December 31, 2004.''.
       (b) Credit Treated as Business Credit.--Section 38(b) is 
     amended by striking ``plus'' at the end of paragraph (14), by 
     striking the period at the end of paragraph (15) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(16) the United States independent film and television 
     production wage credit determined under section 45G(a).''.
       (c) No Carrybacks.--Subsection (d) of section 39 (relating 
     to carryback and carryforward of unused credits) is amended 
     by adding at the end the following:
       ``(11) No carryback of section 45g credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the United States 
     independent film and television production wage credit 
     determined under section 45G may be carried back to a taxable 
     year ending before the date of the enactment of section 
     45G.''.
       (d) Denial of Double Benefit.--Subsection (a) of section 
     280C is amended by inserting ``45G(a),'' after ``45A(a),''.
       (e) Conforming Amendment.--The table of sections for 
     subpart C of part IV of subchapter A of chapter 1 is amended 
     by adding at the end the following new item:

``Sec. 45G. United States independent film and television production 
              wage credit.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act in taxable years ending after such 
     date.
                                  ____

  SA 2130. Mrs. LINCOLN submitted an amendment intended to be proposed 
by her to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At an appropriate place in title IX insert the following:

[[Page S11861]]

     SEC. ____. AMORTIZATION OF REFORESTATION EXPENDITURES AND 
                   REFORESTATION TAX CREDIT.

       (a) Removal of Cap on Amortizable Basis.--
       (1) In general.--Section 194 (relating to amortization of 
     reforestation expenditures) is amended by striking subsection 
     (b) and by redesignating subsections (c) and (d) as 
     subsections (b) and (c), respectively.
       (2) Conforming amendment.--Subsection (b) of section 194, 
     as redesignated by paragraph (1), is amended by striking 
     paragraph (4).
       (b) Increase in Cap on Reforestation Credit.--Paragraph (1) 
     of section 48(b) (relating to reforestation credit) is 
     amended--
       (1) by inserting ``of the first $25,000'' after ``10 
     percent'', and
       (2) by striking ``(after the application of section 
     194(b)(1))''.
       (c) Effective Dates.--
       (1) Amortization provisions.--The amendments made by 
     subsection (a) shall apply to additions to capital account 
     made after December 31, 2001.
       (2) Tax credit provisions.--The amendments made by 
     subsection (b) shall apply to property acquired after 
     December 31, 2001.
                                  ____

  SA 2131. Mrs. LINCOLN submitted an amendment intended to be proposed 
by her to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       On page 11, line 17, strike ``or''.
       On page 11, line 19, strike the comma and insert ``, or''.
       On page 11, between lines 19 and 20, insert:

       ``(V) which is qualified retail improvement property,

       On page 16, line 25, strike the end quotation marks and the 
     second period.
       On page 16, after line 25, insert:
       ``(4) Qualified retail improvement property.--For purposes 
     of this subsection--
       ``(A) In general.--The term `qualified retail improvement 
     property' means any improvement to an interior portion of a 
     building which is primarily used or held for use in a 
     qualified retail business at the location of such 
     improvement, but only if such improvement is placed in 
     service more than 3 years after the date the building was 
     first placed in service.
       ``(B) Certain improvements not included.--The term 
     `qualified retail improvement' does not include any 
     improvement of a type described in clauses (i) through (iv) 
     of subsection (k)(3)(B).
       ``(C) Qualified retail business.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `qualified retail business' 
     means a trade or business of selling tangible personal 
     property to the general public.
       ``(ii) Treatment of certain sales of intangible property or 
     sales.--Any sale of intangible property or services shall be 
     considered a sale of tangible property if such sale is 
     incidental to the sale of tangible property. A trade or 
     business shall not fail to be treated as a qualified retail 
     business by reason of sales of intangible property or 
     services if such sales (other than sales that are incidental 
     to the sale of tangible personal property) represent less 
     than 10 percent of the total sales of the trade or business 
     at the location.''.
                                  ____

  SA 2132. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed by him to the bill H.R. 3090, to provide tax incentives for 
economic recovery; which was ordered to lie on the table; as follows:

       Strike section 602(a) and insert the following:
       (a) State Option.--
       (1) In general.--Notwithstanding any other provision of 
     law, a State may elect to provide under its medicaid program 
     under title XIX of the Social Security Act medical assistance 
     in the case of an individual--
       (A) who at any time during the period that begins on 
     September 11, 2001, and ends on December 31, 2002, is 
     separated from employment;
       (B) who is not eligible for COBRA continuation coverage;
       (C) who is uninsured; and
       (D) whose assets, resources, and earned or unearned income 
     (or both) do not exceed such limitations (if any) as the 
     State may establish.
       (2) Expanded eligibility for certain states with high 
     unemployment.--In the case of a State that, during the period 
     that begins on January 1, 2000, and ends on December 31, 
     2002, has an unemployment rate that exceeds 5.0 percent for 
     more than 2 consecutive months, the State may apply paragraph 
     (1)(A) as if ``January 1, 2000'' were substituted for 
     ``September 11, 2001''.
                                  ____

  SA 2133. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed by him to the bill H.R. 3090, to provide tax incentives for 
economic recovery; which was ordered to lie on the table; as follows:

       At the appropriate place in the bill, insert the following:
       ``Section 45(c)(3)(A) of the Internal Revenue Code of 1986 
     (relating to wind facility) is amended by striking `January 
     1, 2002' and inserting `January 1, 2007'.''
                                  ____

  SA 2134. Mr. SMITH of Oregon submitted an amendment intended to be 
proposed by him to the bill H.R. 3090, to provide tax incentives for 
economic recovery; which was ordered to lie on the table; as follows:

       Strike section 201 and insert the following:

     SEC. 201. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY 
                   ACQUIRED AFTER SEPTEMBER 10, 2001, AND BEFORE 
                   SEPTEMBER 11, 2004.

       (a) In General.--Section 168 (relating to accelerated cost 
     recovery system) is amended by adding at the end the 
     following new subsection:
       ``(k) Special Allowance for Certain Property Acquired After 
     September 10, 2001, and Before September 11, 2004.--
       ``(1) Additional allowance.--In the case of any qualified 
     property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 30 percent of the 
     adjusted basis of the qualified property, and
       ``(B) the adjusted basis of the qualified property shall be 
     reduced by the amount of such deduction before computing the 
     amount otherwise allowable as a depreciation deduction under 
     this chapter for such taxable year and any subsequent taxable 
     year.
       ``(2) Qualified property.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified property' means 
     property--
       ``(i)(I) to which this section applies which has an 
     applicable recovery period of 20 years or less or which is 
     water utility property, or
       ``(II) which is computer software (as defined in section 
     167(f)(1)(B)) for which a deduction is allowable under 
     section 167(a) without regard to this subsection,
       ``(ii) the original use of which commences with the 
     taxpayer after September 10, 2001,
       ``(iii) which is--

       ``(I) acquired by the taxpayer after September 10, 2001, 
     and before September 11, 2004, but only if no written binding 
     contract for the acquisition was in effect before September 
     11, 2001, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after September 10, 
     2001, and before September 11, 2004, and

       ``(iv) which is placed in service by the taxpayer before 
     January 1, 2005.
       ``(B) Exceptions.--
       ``(i) Alternative depreciation property.--The term 
     `qualified property' shall not include any property to which 
     the alternative depreciation system under subsection (g) 
     applies, determined--

       ``(I) without regard to paragraph (7) of subsection (g) 
     (relating to election to have system apply), and
       ``(II) after application of section 280F(b) (relating to 
     listed property with limited business use).

       ``(ii) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(iii) Repaired or reconstructed property.--Except as 
     otherwise provided in regulations, the term `qualified 
     property' shall not include any repaired or reconstructed 
     property.
       ``(iv) Qualified leasehold improvement property.--The term 
     `qualified property' shall not include any qualified 
     leasehold improvement property (as defined in section 
     168(e)(6)).
       ``(C) Special rules relating to original use.--
       ``(i) Self-constructed property.--In the case of a taxpayer 
     manufacturing, constructing, or producing property for the 
     taxpayer's own use, the requirements of clause (iii) of 
     subparagraph (A) shall be treated as met if the taxpayer 
     begins manufacturing, constructing, or producing the property 
     after September 10, 2001, and before September 11, 2004.
       ``(ii) Sale-leasebacks.--For purposes of subparagraph 
     (A)(ii), if property--

       ``(I) is originally placed in service after September 10, 
     2001, by a person, and
       ``(II) sold and leased back by such person within 3 months 
     after the date such property was originally placed in 
     service,

     such property shall be treated as originally placed in 
     service not earlier than the date on which such property is 
     used under the leaseback referred to in subclause (II).
       ``(D) Coordination with section 280f.--For purposes of 
     section 280F--
       ``(i) Automobiles.--In the case of a passenger automobile 
     (as defined in section 280F(d)(5)) which is qualified 
     property, the Secretary shall increase the limitation under 
     section 280F(a)(1)(A)(i) by $4,600.
       ``(ii) Listed property.--The deduction allowable under 
     paragraph (1) shall be taken into account in computing any 
     recapture amount under section 280F(b)(2).''.
       (b) Allowance Against Alternative Minimum Tax.--
       (1) In general.--Section 56(a)(1)(A) (relating to 
     depreciation adjustment for alternative minimum tax) is 
     amended by adding at the end the following new clause:
       ``(iii) Additional allowance for certain property acquired 
     after september 10, 2001, and before september 11, 2004.--The 
     deduction under section 168(k) shall be allowed.''.
       (2) Conforming amendment.--Clause (i) of section 
     56(a)(1)(A) is amended by striking ``clause (ii)'' both 
     places it appears and inserting ``clauses (ii) and (iii)''.

[[Page S11862]]

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 10, 
     2001, in taxable years ending after such date.
                                  ____

  SA 2135. Mr. SMITH of New Hampshire (for himself, Mr. Inhofe, and Mr. 
Thomas) submitted an amendment intended to be proposed by him to the 
bill H.R. 3090, to provide tax incentives for economic recovery; which 
was ordered to lie on the table; as follows:

       At the appropriate place in title IX, insert the following:

     SEC. 9____. FEDERAL-AID HIGHWAY PROGRAMS.

       (a) Increase in Obligation Authority.--
       (1) In general.--In addition to any obligation authority 
     provided by any other law enacted before, on, or after the 
     date of enactment of this Act, $5,000,000,000 in obligation 
     authority shall be made available for fiscal year 2002 for 
     obligation of funds apportioned under section 104(b) of title 
     23, United States Code.
       (2) Distribution of obligation authority.--The obligation 
     authority made available by paragraph (1) shall be 
     distributed--
       (A) to each State in accordance with the percentage 
     specified for the State in section 105(b) of title 23, United 
     States Code; and
       (B) subject to the redistribution of unused obligation 
     authority using the method prescribed in section 1102(d) of 
     the Transportation Equity Act for the 21st Century (23 U.S.C. 
     104 note; 112 Stat. 117).
       (b) Temporary Increase of Federal Share for Projects 
     Carried Out Using Increase in Obligation Authority.--
       (1) Definition of qualifying project.--In this section, the 
     term ``qualifying project'' means a construction project 
     under title 23, United States Code, with respect to which a 
     project agreement is executed during the period beginning 
     October 1, 2001, and ending September 30, 2002.
       (2) Increased federal share.--
       (A) In general.--Subject to subparagraph (B), 
     notwithstanding any other provision of law, the Federal share 
     of the cost of a qualifying project shall be a percentage of 
     the cost of the qualifying project specified by the State, up 
     to 100 percent.
       (B) Limitation.--Subparagraph (A) shall apply only to 
     obligation authority distributed under subsection (a)(2).
       (3) Repayment.--
       (A) In general.--A State that receives an increased Federal 
     share under paragraph (2) with respect to 1 or more 
     qualifying projects shall repay to the United States the 
     total amount of the increased Federal share with respect to 
     all such qualifying projects of the State not later than 
     September 30, 2003.
       (B) Treatment.--Each repayment by a State under 
     subparagraph (A) shall be deposited in the Highway Trust Fund 
     and credited to the appropriate apportionment accounts of the 
     State.
       (c) Use of Increase in Obligation Authority.--
       (1) Highway infrastructure security assessments and 
     plans.--
       (A) In general.--Each State shall use not less than 1 
     percent of the obligation authority distributed under 
     subsection (a)(2) to assess and develop a plan to improve the 
     protection, security, and emergency response capabilities of 
     the transportation system of the State.
       (B) Required elements.--Under subparagraph (A), a State 
     shall--
       (i) conduct a system-wide assessment of the scope and 
     future implications of security and emergency response 
     concerns;
       (ii) develop and apply criteria to identify critical 
     infrastructure and assess the vulnerability of the critical 
     infrastructure to physical threats; and
       (iii) evaluate the functional, structural, and 
     informational capacity of key corridors for the purposes of--

       (I) management of a major incident;
       (II) disaster evacuation; and
       (III) military deployment.

       (C) Coordination.--A plan under subparagraph (A) shall be 
     developed subject to subsections (b) and (d) of section 135 
     of title 23, United States Code.
       (2) Development and implementation of other plans and plan 
     elements.--In addition to the uses described in paragraph 
     (1), a State may use the obligation authority referred to in 
     paragraph (1)(A) to develop and implement plans, processes, 
     guidelines, standards, procedures, and intelligent 
     transportation systems--
       (A) to protect critical infrastructure and information 
     systems; or
       (B) to ensure optimum performance of the transportation 
     system of the State in the event of a disaster or emergency.
       (3) Federal share.--
       (A) In general.--Subject to subparagraph (B), 
     notwithstanding any other provision of law, the Federal share 
     of the cost of a project described in paragraph (1) or (2) 
     shall be 100 percent.
       (B) Limitations.--Subparagraph (A) shall apply only to the 
     extent that obligation authority is distributed under 
     subsection (a)(2), and obligated in fiscal year 2002, for the 
     project.
                                  ____

  SA 2136. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

         At the appropriate place, insert the following:
       Sec. . There is appropriated to the Department of 
     Transportation for the Federal Railroad Administration for 
     fiscal year 2002, out of any funds in the Treasury not 
     otherwise appropriated, $350,000,000 for capital grants to be 
     made by the Secretary of Transportation for rehabilitation, 
     preservation, or improvement of railroad track (including 
     roadbed, bridges, and related track structures) of class II 
     and class III railroads. Funds appropriated by the preceding 
     sentence shall remain available until expended.
                                  ____

  SA 2137. Mr. SPECTER (for himself and Mr. Santorum) submitted an 
amendment intended to be proposed by him to the bill H.R. 3090, to 
provide tax incentives for economic recovery; which was ordered to lie 
on the table; as follows:

       At the end of title IX, add the following:

     SEC. ____. THREE-YEAR RECLASSIFICATION OF CERTAIN COUNTIES 
                   FOR PURPOSES OF REIMBURSEMENT UNDER THE 
                   MEDICARE PROGRAM.

       (a) In General.--Notwithstanding any other provision of 
     law, effective for discharges occurring during fiscal years 
     2002, 2003, and 2004, for purposes of making payments under 
     subsections (d) and (j) of section 1886 of the Social 
     Security Act (42 U.S.C. 1395ww) to hospitals (including 
     rehabilitation hospitals and rehabilitation units under such 
     subsection (j))--
       (1) in Columbia, Lackawanna, Luzerne, Wyoming, and Lycoming 
     Counties, Pennsylvania, such counties are deemed to be 
     located in the Newburgh, New York-PA Metropolitan Statistical 
     Area;
       (2) in Northumberland County, Pennsylvania, such county is 
     deemed to be located in the Harrisburg-Lebanon-Carlisle, 
     Pennsylvania Metropolitan Statistical Area; and
       (3) in Mercer County, Pennsylvania, such county is deemed 
     to be located in the Youngstown-Warren, Ohio Metropolitan 
     Statistical Area.
       (b) Rules.--The reclassifications made under subsection (a) 
     shall be treated as decisions of the Medicare Geographic 
     Classification Review Board under paragraph (10) of section 
     1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)), 
     except that payments shall be made under such section to any 
     hospital reclassified into--
       (1) the Newburgh, New York-PA Metropolitan Statistical Area 
     as of October 1, 2001, as if the counties described in 
     subsection (a)(1) had not been reclassified into such Area 
     under such subsection;
       (2) the Harrisburg-Lebanon-Carlisle, Pennsylvania 
     Metropolitan Statistical Area as of October 1, 2001, as if 
     the county described in subsection (a)(2) had not been 
     reclassified into such Area under such subsection; and
       (3) the Youngstown-Warren, Ohio Metropolitan Statistical 
     Area as of October 1, 2001, as if the county described in 
     subsection (a)(3) had not been reclassified into such Area 
     under such subsection.
                                  ____

  SA 2138. Mr. GRAHAM (for himself, Mrs. Lincoln, and Mr. Bingaman) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3090, to provide tax incentives for economic recovery; which was 
ordered to lie on the table; as follows:

       At the appropriate place insert the following:

     SEC. ____. SPECIAL RULE FOR MEMBERS OF UNIFORMED SERVICES AND 
                   FOREIGN SERVICE IN DETERMINING EXCLUSION OF 
                   GAIN FROM SALE OF PRINCIPAL RESIDENCE.

       (a) In General.--Subsection (d) of section 121 (relating to 
     exclusion of gain from sale of principal residence) is 
     amended by adding at the end the following new paragraph:
       ``(9) Members of uniformed services and foreign service.--
       ``(A) In general.--The running of the 5-year period 
     described in subsection (a) shall be suspended with respect 
     to an individual during any time that such individual or such 
     individual's spouse is serving on qualified official extended 
     duty as a member of the uniformed services or of the Foreign 
     Service.
       ``(B) Qualified official extended duty.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `qualified official extended 
     duty' means any period of extended duty as a member of the 
     uniformed services or a member of the Foreign Service during 
     which the member serves at a duty station which is at least 
     50 miles from such property or is under Government orders to 
     reside in Government quarters.
       ``(ii) Uniformed services.--The term `uniformed services' 
     has the meaning given such term by section 101(a)(5) of title 
     10, United States Code, as in effect on the date of the 
     enactment of this paragraph.
       ``(iii) Foreign service of the united states.--The term 
     `member of the Foreign Service' has the meaning given the 
     term `member of the Service' by paragraph (1), (2), (3), (4), 
     or (5) of section 103 of the Foreign Service Act of 1980, as 
     in effect on such date of enactment.
       ``(iv) Extended duty.--The term `extended duty' means any 
     period of active duty pursuant to a call or order to such 
     duty for a period in excess of 90 days or for an indefinite 
     period.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales and exchanges after the date of the 
     enactment of this Act.

[[Page S11863]]

     
                                  ____
  SA 2139. Mr. GRAHAM (for himself, and Mr. Torricelli) submitted an 
amendment intended to be proposed by him to the bill H.R. 3090, to 
provide tax incentives for economic recovery; which was ordered to lie 
on the table; as follows:

       At the appropriate place insert the following:

     SEC. ____. METHOD OF ACCOUNTING FOR DEPOSITS RECEIVED BY 
                   ACCRUAL BASIS TOUR OPERATORS.

       In the case of a tour operator using an accrual method of 
     accounting, amounts received from or on behalf of passengers 
     in advance of the departure of a tour arranged by such 
     operator--
       (1) shall be treated as properly accounted for under the 
     Internal Revenue Code of 1986 if they are accounted for under 
     a method permitted by section 3 of Revenue Procedure 71-21, 
     and
       (2) for purposes of Revenue Procedure 71-21, shall be 
     deemed earned as of the date the tour departs.
                                  ____

  SA 2140. Mr. KERRY (for himself, Mr. Lieberman, and Mr. Kennedy) an 
submitted an amendment intended to be proposed by him to the bill H.R. 
3090, to provide tax incentives for economic recovery; which was 
ordered to lie on the table; as follows:

       At the end of title IX, insert the following:

     SEC. ____. ALTERNATIVE MINIMUM TAX RELIEF WITH RESPECT TO 
                   INCENTIVE STOCK OPTIONS EXERCISED DURING 2000.

       In the case of an incentive stock option (as defined in 
     section 422 of the Internal Revenue Code of 1986) exercised 
     during calendar year 2000, the amount taken into account 
     under section 56(b)(3) of such Code by reason of such 
     exercise shall not exceed the amount that would have been 
     taken into account if, on the date of such exercise, the fair 
     market value of the stock acquired pursuant to such option 
     had been an amount equal to 150 percent of its fair market 
     value as of April 15, 2001 (or, if such stock is sold or 
     exchanged on or before such date, 150 percent of the amount 
     realized on such sale or exchange).
                                  ____

  SA 2141. Ms. COLLINS (for herself and Mr. Warner) submitted an 
amendment intended to be proposed by her to the bill H.R. 3090, to 
provide tax incentives for economic recovery; which was ordered to lie 
on the table; as follows:

       At the end of title IX, insert the following:

     SEC. ____. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO 
                   ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Section 62(a)(2) (relating to certain 
     trade and business deductions of employees) is amended by 
     adding at the end the following:
       ``(D) Certain expenses of elementary and secondary school 
     teachers.--The deductions allowed by section 162 which 
     consist of expenses, not in excess of $1,000, paid or 
     incurred by an eligible educator--
       ``(i) by reason of the participation of the educator in 
     professional development courses related to the curriculum 
     and academic subjects in which the educator provides 
     instruction or to the students for which the educator 
     provides instruction, and
       ``(ii) in connection with books, supplies (other than 
     nonathletic supplies for courses of instruction in health or 
     physical education), computer equipment (including related 
     software and services) and other equipment, and supplementary 
     materials used by the eligible educator in the classroom.''.
       (b) Eligible Educator.--Section 62 is amended by adding at 
     the end the following:
       ``(d) Definition; Special Rules.--
       ``(1) Eligible educator.--
       ``(A) In general.--For purposes of subsection (a)(2)(D), 
     the term `eligible educator' means, with respect to any 
     taxable year, an individual who is a kindergarten through 
     grade 12 teacher, instructor, counselor, principal, or aide 
     in a school for at least 900 hours during a school year.
       ``(B) School.--The term `school' means any school which 
     provides elementary education or secondary education 
     (kindergarten through grade 12), as determined under State 
     law.
       ``(2) Coordination with exclusions.--A deduction shall be 
     allowed under subsection (a)(2)(D) for expenses only to the 
     extent the amount of such expenses exceeds the amount 
     excludable under section 135, 529(c)(1), or 530(d)(2) for the 
     taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning in calendar years 2002 
     and 2003.
                                  ____

  SA 2142. Mr. SMITH of New Hampshire (for himself and Mr. Jeffords) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3090, to provide tax incentives for economic recovery; which was 
ordered to lie on the table; as follows:

       At the appropriate place in title IX, insert the following:

     SEC. 9____. WATER SECURITY GRANTS.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Eligible entity.--The term ``eligible entity'' means a 
     publicly- or privately-owned drinking water or wastewater 
     facility.
       (3) Eligible project or activity.--
       (A) In general.--The term ``eligible project or activity'' 
     means a project or activity carried out by an eligible entity 
     to address an immediate physical security need.
       (B) Inclusions.--The term ``eligible project or activity'' 
     includes a project or activity relating to--
       (i) security staffing;
       (ii) detection of intruders;
       (iii) installation and maintenance of fencing, gating, or 
     lighting;
       (iv) installation of and monitoring on closed-circuit 
     television;
       (v) rekeying of doors and locks;
       (vi) site maintenance, such as maintenance to increase 
     visibility around facilities, windows, and doorways;
       (vii) development, acquisition, or use of guidance manuals, 
     educational videos, or training programs; and
       (viii) a program established by a State to provide 
     technical assistance or training to water and wastewater 
     facility managers, especially such a program that emphasizes 
     small or rural eligible entities.
       (C) Exclusions.--The term ``eligible project or activity'' 
     does not include any large-scale or system-wide project that 
     includes a large capital improvement or vulnerability 
     assessment.
       (b) Establishment of Program.--
       (1) In general.--The Administrator shall establish a 
     program to allocate to States, in accordance with paragraph 
     (2), funds for use in awarding grants to eligible entities 
     under subsection (c).
       (2) Allocation to states.--Not later than 30 days after the 
     date on which funds are made available to carry out this 
     section, the Administrator shall allocate the funds to States 
     in accordance with the formula for the distribution of funds 
     described in section 1452(a)(1)(D) of the Safe Drinking Water 
     Act (42 U.S.C. 300j-12(a)(1)(D)).
       (3) Notice.--Not later than 30 days after the date 
     described in paragraph (2), each State shall provide to each 
     eligible entity in the State a notice that funds are 
     available to assist the eligible entity in addressing 
     immediate physical security needs.
       (c) Award of Grants.--
       (1) Application.--An eligible entity that seeks to receive 
     a grant under this section shall submit to the State in which 
     the eligible entity is located an application for the grant 
     in such form and containing such information as the State may 
     prescribe.
       (2) Condition for receipt of grant.--An eligible entity 
     that receives a grant under this section shall agree to 
     expend all funds provided by the grant not later than 
     September 30 of the fiscal year in which this Act is enacted.
       (3) Disadvantaged, small, and rural eligible entities.--A 
     State that awards a grant under this section shall ensure, to 
     the maximum extent practicable in accordance with the income 
     and population distribution of the State, that a sufficient 
     percentage of the funds allocated to the State under 
     subsection (b)(2) are available for disadvantaged, small, and 
     rural eligible entities in the State.
       (d) Eligible Projects and Activities.--
       (1) In general.--A grant awarded by a State under 
     subsection (c) shall be used by an eligible entity to carry 
     out 1 or more eligible projects or activities.
       (2) Coordination with existing training programs.--In 
     awarding a grant for an eligible project or activity 
     described in subsection (a)(3)(B)(vii), a State shall, to the 
     maximum extent practicable, coordinate with training programs 
     of rural water associations of the State that are in effect 
     as of the date on which the grant is awarded.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $50,000,000 for 
     the fiscal year in which this Act is enacted.
                                  ____

  SA 2143. Mr. SMITH of New Hampshire submitted an amendment intended 
to be proposed by him to the bill H.R. 3090, to provide tax incentives 
for economic recovery; which was ordered to lie on the table; as 
follows:

       At the appropriate place in title IX, insert the following:

     SEC. 9  . OPERATION AND MAINTENANCE OF WHITE MOUNTAIN 
                   NATIONAL FOREST.

       For a program under which the Secretary of Agriculture 
     shall employ former employees of the American Tissue Mills in 
     the cities of Berlin and Gorham in the State of New Hampshire 
     to carry out operation and maintenance projects at White 
     Mountain National Forest in the State of New Hampshire, there 
     is appropriated $1,750,000, to remain available until 
     expended.
                                  ____

  SA 2144. Mr. DURBIN submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place in title IX, insert the following:

     SEC. ____. SPECIAL RULE FOR CERTAIN AIRCRAFT CONTRACTS WITH 
                   RESPECT TO BONUS DEPRECIATION PROVISION.

       (a) In General.--Section 168(k)(2)(C) (relating to special 
     allowance for certain property acquired after September 10, 
     2001, and

[[Page S11864]]

     before September 22, 2002), as added by this Act, is amended 
     by adding at the end the following:
       ``(iii) Certain aircraft contracts disregarded for purpose 
     of binding contract limitation.--

       ``(I) In general.--For purposes of subparagraph 
     (A)(iii)(I), a qualified domestic aircraft contract shall be 
     disregarded for purposes of determining whether a written 
     binding contract for the acquisition of a domestic aircraft 
     was in effect before September 11, 2001.
       ``(II) Qualified domestic aircraft contract.--For purposes 
     of this clause, the term `qualified domestic aircraft 
     contract' means a contract in effect before September 11, 
     2001, for the acquisition of one or more domestic aircraft if 
     less than 50 percent of the stated purchase price for such 
     aircraft had been paid to the seller of the aircraft on or 
     before September 11, 2001.
       ``(III) Domestic aircraft.--For purposes of this clause, 
     the term `domestic aircraft' means aircraft manufactured or 
     assembled predominantly in the United States by a domestic 
     corporation, and for use by a domestic corporation engaged in 
     the business of transporting persons or property by air.''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after September 10, 
     2001, in taxable years ending after such date.
                                  ____

  SA 2145. Mr. DURBIN submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the appropriate place in title IX, insert the following:

     SEC. ____. ADVANCE REFUNDINGS FOR CERTAIN AIRPORT BONDS.

       (a) In General.--Paragraph (2) of section 149(d) is amended 
     by inserting at the end the following new sentence: ``The 
     preceding sentence shall not apply to a bond issued after 
     September 11, 2001, and before January 1, 2005, to advance 
     refund a qualified airport facility bond (as defined in 
     paragraph (7)).''.
       (b) Post-September 11, 2001 Advance Refundings.--Clause (i) 
     of section 149(d)(3)(A) is amended by striking ``or'' at the 
     end of subclause (I), by inserting ``or'' at the end of 
     subclause (II), and by adding the following new subclause:

       ``(III) the 1st advance refunding after September 11, 2001, 
     and before January 1, 2002, of the original bond if the 
     original bond was issued before September 12, 2001, for an 
     airport (within the meaning of section 142(a)(1)) without 
     regard to whether the refunding bond or the refunded bond is 
     a private activity bond,''.

       (c) Definition of Qualified Airport Facility Bond.--Section 
     149(d) is amended by redesignating paragraph (7) as paragraph 
     (8) and by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) Qualified airport facility bond.--For purposes of 
     this subsection, the term `qualified airport facility bond' 
     means a private activity bond which was outstanding on 
     September 11, 2001, and the proceeds of which were used--
       ``(A) to provide airport facilities within the meaning of 
     section 142(a)(1) generally available to members of the 
     general public, or
       ``(B) to finance the costs of issuance of such bonds as 
     described in section 147(g).''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.
                                  ____

  SA 2146. Mr. LEAHY submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the end of title IX, insert the following:

     SEC. ____. TECHNICAL CORRECTION TO DEFINITION OF HARD CIDER.

       (a) In General.--Paragraph (6) of section 5041(b) (relating 
     to rates of tax) is amended to read as follows:
       ``(6) 22.6 cents per wine gallon on hard cider which is a 
     still, carbonated, or sparkling wine--
       ``(A) which is prepared by fermenting apple or pear juice, 
     either fresh or diluted, without at any time--
       ``(i) adding alcoholic liquors or fortifying with alcohol, 
     or
       ``(ii) using any fruit product other than apples and pears, 
     except that flavoring may be added as provided in 
     subparagraph (C)(iii),
       ``(B) which contains at least one-half of 1 percent and 
     less than 7 percent alcohol by volume, and
       ``(C) with respect to which, at any time before or after 
     fermentation--
       ``(i) apple juice, pear juice, water, or sugar, or any 
     combination, may be added, and
       ``(ii) the cider may be flavored using natural flavorings 
     or natural food products other than apples or pears, but only 
     if such flavorings and products do not exceed 5 percent by 
     volume of the finished cider.''
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.
                                  ____

  SA 2147. Mr. LEAHY submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the end of title IX, insert the following:

     SEC. ____. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS CREATED 
                   BY THE TAXPAYER.

       (a) In General.--Subsection (e) of section 170 (relating to 
     certain contributions of ordinary income and capital gain 
     property) is amended by adding at the end the following new 
     paragraph:
       ``(7) Special rule for certain contributions of literary, 
     musical, or artistic compositions.--
       ``(A) In general.--In the case of a qualified artistic 
     charitable contribution--
       ``(i) the amount of such contribution shall be the fair 
     market value of the property contributed (determined at the 
     time of such contribution), and
       ``(ii) no reduction in the amount of such contribution 
     shall be made under paragraph (1).
       ``(B) Qualified artistic charitable contribution.--For 
     purposes of this paragraph, the term `qualified artistic 
     charitable contribution' means a charitable contribution of 
     any literary, musical, artistic, or scholarly composition, or 
     similar property, or the copyright thereon (or both), but 
     only if--
       ``(i) such property was created by the personal efforts of 
     the taxpayer making such contribution no less than 18 months 
     prior to such contribution,
       ``(ii) the taxpayer--

       ``(I) has received a qualified appraisal of the fair market 
     value of such property in accordance with the regulations 
     under this section, and
       ``(II) attaches to the taxpayer's income tax return for the 
     taxable year in which such contribution was made a copy of 
     such appraisal,

       ``(iii) the donee is an organization described in 
     subsection (b)(1)(A),
       ``(iv) the use of such property by the donee is related to 
     the purpose or function constituting the basis for the 
     donee's exemption under section 501 (or, in the case of a 
     governmental unit, to any purpose or function described under 
     subsection (c)),
       ``(v) the taxpayer receives from the donee a written 
     statement representing that the donee's use of the property 
     will be in accordance with the provisions of clause (iv), and
       ``(vi) the written appraisal referred to in clause (ii) 
     includes evidence of the extent (if any) to which property 
     created by the personal efforts of the taxpayer and of the 
     same type as the donated property is or has been--

       ``(I) owned, maintained, and displayed by organizations 
     described in subsection (b)(1)(A), and
       ``(II) sold to or exchanged by persons other than the 
     taxpayer, donee, or any related person (as defined in section 
     465(b)(3)(C)).

       ``(C) Maximum dollar limitation; no carryover of increased 
     deduction.--The increase in the deduction under this section 
     by reason of this paragraph for any taxable year--
       ``(i) shall not exceed the artistic adjusted gross income 
     of the taxpayer for such taxable year, and
       ``(ii) shall not be taken into account in determining the 
     amount which may be carried from such taxable year under 
     subsection (d).
       ``(D) Artistic adjusted gross income.--For purposes of this 
     paragraph, the term `artistic adjusted gross income' means 
     that portion of the adjusted gross income of the taxpayer for 
     the taxable year attributable to--
       ``(i) income from the sale or use of property created by 
     the personal efforts of the taxpayer which is of the same 
     type as the donated property, and
       ``(ii) income from teaching, lecturing, performing, or 
     similar activity with respect to property described in clause 
     (i).
       ``(E) Paragraph not to apply to certain contributions.--
     Subparagraph (A) shall not apply to any charitable 
     contribution of any letter, memorandum, or similar property 
     which was written, prepared, or produced by or for an 
     individual while the individual is an officer or employee of 
     any person (including any government agency or 
     instrumentality) unless such letter, memorandum, or similar 
     property is entirely personal.
       ``(F) Copyright treated as separate property for partial 
     interest rule.--In the case of a qualified artistic 
     charitable contribution, the tangible literary, musical, 
     artistic, or scholarly composition, or similar property and 
     the copyright on such work shall be treated as separate 
     properties for purposes of this paragraph and subsection 
     (f)(3).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after the date of the 
     enactment of this Act in taxable years ending after such 
     date.
                                  ____

  SA 2148. Mr. JEFFORDS (for himself and Mr. Smith of New Hampshire) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3090, to provide tax incentives for economic recovery; which was 
ordered to lie on the table; as follows:

       At the end of the bill, add the following:

   TITLE ____--WATER INFRASTRUCTURE SECURITY AND RESEARCH DEVELOPMENT

     SEC. ____01. SHORT TITLE.

       This title may be cited as the ``Water Infrastructure 
     Security and Research Development Act''.

     SEC. ____02. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.

[[Page S11865]]

       (2) Research institution.--
       (A) In general.--The term ``research institution'' means a 
     public or private nonprofit institution or other entity 
     that--
       (i) has the expertise to perform research on the security 
     of water supply systems; and
       (ii) complies with any applicable laws (including 
     regulations) for the safeguarding of sensitive information.
       (B) Inclusion.--The term ``research institution'' includes 
     a national laboratory.
       (3) Water supply system.--
       (A) In general.--The term ``water supply system'' means a 
     public water system (as defined in section 1401 of the Safe 
     Drinking Water Act (42 U.S.C. 300f)) or a publicly owned 
     treatment works (as defined in section 212 of the Federal 
     Water Pollution Control Act (33 U.S.C. 1292)).
       (B) Inclusions.--The term ``water supply system'' 
     includes--
       (i) a water source, including--

       (I) surface water in a lake, reservoir, or other 
     impoundment;
       (II) flowing water in a river; or
       (III) ground water in an aquifer;

       (ii) a system of aqueducts, tunnels, reservoirs, or pumping 
     facilities to convey water from the water source;
       (iii) a treatment facility;
       (iv) a distribution system carrying finished water to users 
     through a system of mains and subsidiary pipes; or
       (v) a wastewater collection and treatment system.

     SEC. ____03. WATER INFRASTRUCTURE SECURITY GRANT PROGRAM.

       (a) In General.--The Administrator shall establish a 
     program under which the Administrator shall make grants to, 
     and enter into cooperative agreements with, research 
     institutions to improve the protection and security of water 
     supply systems by carrying out eligible projects described in 
     subsection (c) on technologies and processes that address 
     physical and cyber threats to water supply systems.
       (b) Consultation.--The Administrator shall consult with the 
     Director of Central Intelligence to ensure that programs 
     conducted pursuant to this title appropriately protect 
     classified information.
       (c) Eligible Projects.--To be eligible for assistance under 
     subsection (a), a project shall--
       (1) assess security issues for water supply systems by--
       (A) conducting system-specific and systemwide assessments 
     of the scope of and future implications of security issues 
     for water supply systems; and
       (B) developing and refining vulnerability assessment tools 
     for water supply systems to identify--
       (i) physical vulnerabilities, including biological, 
     chemical, and radiological contamination; and
       (ii) cyber vulnerabilities;
       (2) protect water supply systems from a potential threat 
     by--
       (A) developing technologies, processes, guidelines, 
     standards, and procedures that protect--
       (i) the physical assets of water supply systems, including 
     protection from the impact of biological, chemical, and 
     radiological contamination;
       (ii) information systems, including process controls and 
     supervisory control and data acquisition; and
       (iii) cyber systems at water supply systems;
       (B) developing real-time monitoring systems to protect 
     against biological, chemical, or radiological attack; and
       (C) developing educational and awareness programs for water 
     supply systems;
       (3) develop technologies and processes for addressing the 
     mitigation, response, and recovery of biological, chemical, 
     and radiological contamination of water supply systems;
       (4) implement the requirements of Presidential Decision 
     Directive 63 by refining and operating the Information 
     Sharing and Analysis Center to capture and share information 
     concerning threats, malevolent events, and best practices; or
       (5) test and evaluate new technologies and processes by--
       (A) developing regional pilot facilities to demonstrate 
     upgraded security systems, assess new technologies, and 
     determine the effect of enhanced security on operations and 
     costs of the water supply system; or
       (B) conducting demonstrations of other technologies and 
     processes to protect water supply systems.
       (d) Selection Criteria.--
       (1) In general.--The Administrator, in consultation with 
     representatives of appropriate Federal and State agencies, 
     water supply systems, and other appropriate public and 
     private entities, shall establish guidelines, procedures, and 
     criteria for the award of assistance under subsection (a).
       (2) Requirements.--The Administrator shall ensure that 
     projects carried out under this title reflect the needs of 
     water supply systems of various sizes and geographic areas of 
     the United States.
       (3) Transmission to congress.--The Administrator shall 
     transmit to the Committee on Science of the House of 
     Representatives and the Committee on Environment and Public 
     Works of the Senate a copy of the guidelines, procedures, and 
     criteria established under paragraph (1).
       (4) Publication.--Not earlier than 30 days after the date 
     on which the Administrator transmits to Congress the 
     guidelines, procedures, and criteria under paragraph (3), the 
     Administrator shall publish the guidelines, procedures, and 
     criteria in the Federal Register.
       (e) Amount.--Assistance with respect to any 1 project 
     carried out under this title shall not exceed $1,000,000 in 
     any 1 year.
       (f) Cost Sharing.--
       (1) Federal share.--The Federal share of the cost of 
     carrying out--
       (A) a project under subsection (c)(5) shall be 50 percent; 
     and
       (B) a project under paragraphs (1) through (4) of 
     subsection (c) shall be 100 percent.
       (2) Non-federal share.--The non-Federal share of the cost 
     of carrying out a project under subsection (c)(5) may be 
     provided in cash or in-kind.
       (g) Information Sharing.--As soon as practicable after the 
     results of a project carried out under this title have been 
     evaluated, the Administrator shall disseminate to water 
     supply systems information on the results of the project 
     through--
       (1) the Information Sharing and Analysis Center; or
       (2) other appropriate means.
       (h) Report.--The Administrator shall, as appropriate, 
     periodically submit to the Committee on Science of the House 
     of Representatives and the Committee on Environment and 
     Public Works of the Senate a report on the status of the 
     program established under subsection (a).

     SEC. ____04. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     title $12,000,000 for each of fiscal years 2002 through 2007, 
     to remain available until expended.

     SEC. ____05. ASSISTANCE FOR ARSENIC REQUIREMENTS.

       For each of fiscal years 2002 and 2003, from unobligated 
     funds available to the Administrator, the Administrator shall 
     use $20,000,000 to provide assistance for small water supply 
     systems to comply with requirements relating to arsenic in 
     drinking water.

                          ____________________