[Congressional Record Volume 148, Number 48 (Thursday, April 25, 2002)]
[Senate]
[Pages S3390-S3418]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Continued

  Mr. REID. Mr. President, I should advise all Members that we are now 
at the end of the debate time on this piece of legislation. We are now 
going to start a series of votes. We could have as many as 12 votes. We 
will try to complete within the time set. Everyone should try to stay 
as close to the Chamber as possible for this very long and arduous task 
of completing the bill today.
  This will be the end of 6 weeks that the two managers have worked on 
this bill.
  I ask unanimous consent that when the vote sequence commences there 
be 2 minutes between each vote with the time equally divided and 
controlled in the usual form; that no other amendments be in order; 
that no points of order be considered waived by this agreement; and 
that all votes after the first vote on the Harkin amendment be 10 
minutes each.
  The PRESIDING OFFICER (Mr. Carper). Without objection, it is so 
ordered.


                Amendment No. 3364 To Amendment No. 2917

  Mr. REID. Mr. President, I ask unanimous consent that the pending 
amendments be set aside and that it be in order for the Senate to 
consider amendment No. 3364, that it be set aside, and that it be the 
last amendment in order on the bill now before the Senate.
  The PRESIDING OFFICER. Is there objection?
  The Chair hears none, and it is so ordered.
  The amendment is as follows:

(Purpose: To amend the Internal Revenue Code of 1986 to exempt receipts 
of tax-exempt rural electric cooperatives for the construction of line 
   extensions to encourage development of section 29 qualified fuel 
                                sources)

       In Division H, on page 215, between lines 10 and 11, insert 
     the following:

     SEC.   . TREATMENT OF CERTAIN DEVELOPMENT INCOME OR 
                   COOPERATIVES.

       (a) In General.--Subparagraph (C) of section 501(c)(12), as 
     amended by this Act, is amended by striking ``or'' at the end 
     of clause (iv), by striking the period at the end of clause 
     (v) and insert ``, or'', and by adding at the end the 
     following new clause:
       ``(vi) from the receipt before January 1, 2007, of any 
     money, property, capital, or any other contribution in aid of 
     construction or connection charge intended to facilitate the 
     provision of electric service for the purpose of developing 
     qualified fuels from nonconventional sources (within the 
     meaning of section 29).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.


                           Amendment No. 3195

  Mr. REID. Mr. President, I ask that the Senate now begin voting on 
the Harkin amendment.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
3195.
  Mr. REID. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms), is necessarily absent.
  The PRESIDING OFFICER (Mr. Durbin). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 52, nays 47, as follows:

                      [Rollcall Vote No. 89 Leg.]

                                YEAS--52

     Allard
     Allen
     Bayh
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cleland
     Clinton
     Cochran
     Craig
     Crapo
     DeWine
     Domenici
     Ensign
     Enzi
     Frist
     Gramm
     Grassley
     Hagel
     Harkin
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nickles
     Roberts
     Rockefeller
     Santorum
     Schumer
     Sessions
     Shelby
     Smith (OR)
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--47

     Akaka
     Baucus
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Carnahan
     Carper
     Chafee
     Collins
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Gregg
     Hatch
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Sarbanes
     Smith (NH)
     Snowe
     Stabenow
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Helms
       
  The amendment (No. 3195) was agreed to.
  Mr. COCHRAN. I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3198

  The PRESIDING OFFICER. There will now be 2 minutes equally divided 
prior to the vote on the motion to table the amendment by the Senator 
from Delaware. Who yields time?
  Mr. CARPER. I yield 30 seconds to the Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, in my 30 seconds, I emphasize the point 
that this amendment is a significant step toward freeing the United 
States from dependence on OPEC oil. The front page of today's New York 
Times contains a statement by the Crown Prince of Saudi Arabia that, if 
necessary, to blackmail the United States to change our policy toward 
Israel, Saudi Arabia is prepared to move to the right of bin Laden. 
Saudi Arabia gave us bin Laden, and 15 of the 19 terrorists from 9-11. 
Vote for this amendment.

[[Page S3391]]

  The PRESIDING OFFICER. Who yields time? Are there any proponents of 
the motion to table? Who yields time?
  Mr. LEVIN. Mr. President, I yield 30 seconds to the Senator from 
Missouri.
  The PRESIDING OFFICER. The Senator from Missouri is recognized for 30 
seconds.
  Mr. BOND. Mr. President, we have dealt with this before. We are going 
to push for higher standards and fuel efficiency, but only to the 
extent technologically feasible to require an arbitrary figure pulled 
out of the air to be substituted for the procedure in the Levin-Bond 
amendment. It makes no sense.
  I urge all our colleagues who voted for the Levin-Bond amendment to 
support the motion to table for jobs, for safety and for consumer 
choice.
  The PRESIDING OFFICER. Who yields time? The Senator from Delaware.
  Mr. CARPER. Mr. President, the Levin-Bond amendment language which is 
in this bill requires the Secretary of Transportation to promulgate 
regulations increasing fuel efficiency standards. Our amendment changes 
nothing in the Levin-Bond amendment.
  Our amendment says that in establishing those fuel efficiency 
standards, we direct the Secretary of Transportation to also consider 
reducing oil consumption through alternative fuels--ethanol, biodiesel, 
and energy from coal waste.
  The PRESIDING OFFICER. Who yields time? The Senator from Michigan has 
34 seconds.
  Mr. LEVIN. Mr. President, the amendment before us would fundamentally 
change the Levin-Bond amendment. What it does is, in effect, prejudge 
the outcome of the very process that we put in place, a process that we 
want to use to consider all of the factors that are involved, including 
safety factors, including the availability of alternative fuels. All of 
those factors ought to be considered in the regulatory process, not 
prejudged with an artificial mandate that we have to save 1 million 
barrels per day.
  I hope this will be tabled and that we will then go back to the 
regulatory process in the Levin-Bond amendment.
  The PRESIDING OFFICER. All time has expired. The question is on 
agreeing to the motion to table amendment No. 3198. The yeas and nays 
have been ordered. The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER (Mr. Johnson). Are there any other Senators in 
the Chamber desiring to vote?
  The result was announced--yeas 57, nays 42, as follows:

                      [Rollcall Vote No. 90 Leg.]

                                YEAS--57

     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Carnahan
     Cochran
     Craig
     Crapo
     Dayton
     DeWine
     Domenici
     Dorgan
     Ensign
     Enzi
     Feingold
     Fitzgerald
     Frist
     Gramm
     Grassley
     Hagel
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Johnson
     Kennedy
     Kohl
     Kyl
     Landrieu
     Levin
     Lincoln
     Lott
     McConnell
     Mikulski
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Stabenow
     Stevens
     Thomas
     Thurmond
     Voinovich
     Warner

                                NAYS--42

     Akaka
     Biden
     Bingaman
     Boxer
     Cantwell
     Carper
     Chafee
     Cleland
     Clinton
     Collins
     Conrad
     Corzine
     Daschle
     Dodd
     Durbin
     Edwards
     Feinstein
     Graham
     Gregg
     Harkin
     Hollings
     Inouye
     Jeffords
     Kerry
     Leahy
     Lieberman
     Lugar
     McCain
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Smith (OR)
     Snowe
     Specter
     Thompson
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Helms
       
  The motion was agreed to.
  Mr. LEVIN. I move to reconsider the vote.
  Mr. BINGAMAN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3333

  The PRESIDING OFFICER. There are 2 minutes equally divided on the 
amendment of the Senator from Arizona, Mr. Kyl.
  Mr. BINGAMAN. Mr. President, I made a motion to table the amendment, 
and the Senator from Utah will use the minute to argue for that 
position.
  Mr. KYL. Mr. President, I will take my 1 minute to speak in favor of 
my amendment first. Then Senator Hatch will speak in favor of the 
motion to table.
  This amendment strikes the alternative fuels tax credit portion of 
the bill. The savings would be at least $1 billion, probably closer to 
about $3 billion. That is not my reason for doing it. Arizona had a 
somewhat similar program in our State government that would have 
bankrupted the State and ruin political careers. It was a fiasco and it 
was finally terminated. It was full of loopholes and problems and costs 
that were never thought through.
  My reason for offering the amendment is, frankly, to send a warning 
to all of my colleagues that we really should have thought it better 
through in our own Federal version. To their credit, the staff of the 
Finance Committee did take the advice of a lot of people at the 
department of transportation in Arizona and fixed a lot of the 
problems. My concern is they didn't fix enough and we will rue the day 
we voted for this provision--at least without the care that I think 
should have gone into it. My motion strikes the provision from the 
bill.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I rise in opposition to the amendment of 
the Senator from Arizona, for three reasons. First, the Finance 
Committee passed these tax incentive provisions through by a wide 
margin. Second, we have solved the problems that arose during the 
Arizona experience. Third, this is probably the most important 
environmental bill that will go through our Congress this year, and 
maybe in a long time, because it provides for incentives for 
alternative fuels, alternative vehicles, and alternative fuel stations.
  It is about time we start approaching these problems in an 
intelligent way that will take us away from being so dependent upon 
foreign oil. The provisions the Senator from Arizona's amendment would 
strike will do more toward that end than anything I know and in the end 
will save us money.
  The provisions that this amendment would strike are almost identical 
to the provisions in the bipartisan CLEAR ACT, which stands for Clean 
Efficient Automobiles Resulting from Advanced Car Technology, which I 
introduced last year along with Senators Jeffords, Rockefeller, Chafee, 
Kerry, Collins, Gordon Smith, Crapo, and Lieberman.
  The CLEAR ACT is the product of a carefully crafted, delicately 
balanced, and politically unusual alliance between auto manufacturers, 
truck engine manufacturers, environmental groups, fuel suppliers, and 
other stakeholders. I might add that these provisions, which provide 
strong incentives for energy conservation, are an integral part of the 
President's energy plan. The CLEAR ACT provisions create a fair and 
balanced playing field for all the advanced technologies and 
alternative fuel vehicles that offer the promise of both clean air and 
less dependency on foreign fuel.
  Transportation accounts for about two-thirds of the oil consumption 
in the United States, and we are 97 percent dependent on oil for our 
transportation needs. When we consider the role transportation plays in 
our economy and our way of life, it is hard to believe that we rely on 
foreign sources for more than one-half of our oil supply. If our Nation 
is going to have a strategy for energy security, that strategy must 
begin with transportation fuels. The Kyl amendment would take away our 
best opportunity to provide a balanced approach to achieve this 
strategy.
  Advances in alternative fuels and new vehicle technologies have been 
significant in recent years. However, three basic obstacles stand in 
the way of a broad shift toward their adoption. These are the higher 
cost of the vehicles, the higher cost of alternative

[[Page S3392]]

fuels, and the lack of an infrastructure of alternative fueling 
stations.
  The CLEAR ACT provisions that this amendment would strike would lower 
the barriers that stand in the way of widespread consumer acceptance of 
these advanced technology and alternative fuel vehicles by providing 
tax credits to consumers who purchase hybrid electric, fuel cell, 
battery electric, and dedicated alternative fuel vehicles. They also 
would provide incentives for the purchase of alternative fuels and the 
development of an alternative fuel infrastructure.
  Without imposing any new mandates, the CLEAR ACT provisions in this 
energy bill focus on the very best emerging technologies to help our 
citizens to enjoy the health benefits of cleaner air sooner, to help 
our communities to enjoy the economic benefits of attaining clean air 
standards sooner, and to help us reduce our consumption of foreign oil 
sooner than would otherwise be possible.
  With the clear benefits of these provisions to less dependency on 
foreign oil and to cleaner air, which I might add come at a very 
reasonable cost in terms of revenue loss to the Treasury, it is hard to 
see why anyone in this body would want to strike them. Moreover, the 
tax credits the CLEAR ACT offers are performance based, which is to say 
that they are based on the principle that every dollar of tax 
expenditure should produce substantive air quality and energy security 
benefits. The greater the benefits a particular vehicle achieves, the 
larger the tax incentive for purchasing it.
  While I do not want to assume I know the motivations of the Senator 
from Arizona for offering this amendment, part of it might be based on 
an unfortunate experience in his home State. Not long ago, a well-
intentioned program to promote alternative fuel vehicles by the Arizona 
legislature experienced extreme cost overruns and failed to provide the 
promised energy and environmental benefits. I want to assure the 
Members of this body that we have studied the Arizona experience, we 
have identified the inherent weaknesses of that model, and we have been 
careful to avoid each one of them in this legislation.
  With the CLEAR ACT provisions, until a new advanced vehicle is 
purchased, until new infrastructure has been installed, or until 
alternative fuel is placed in the tank of a dedicated alternative fuel 
vehicle, there will be no cost to the Treasury. And when a cost is 
incurred, it will be a small cost relative to the resulting 
environmental benefits and energy savings.
  To me it is inconceivable that this Senate would pass an energy 
policy bill without addressing the issue of how to increase the 
public's adoption of alternative fuel and advanced technology vehicles. 
Although gasoline vehicles are 90 percent cleaner today than 30 years 
ago, the significant increase in the total number of vehicles on the 
road and the miles traveled per year by each vehicle means that little 
progress has been made in reducing the contribution of motor vehicle 
emissions to air pollution.
  Similarly, despite improvements in fuel economy compared to 30 years 
ago, more petroleum than ever is used in motor vehicles and U.S. 
dependence on imported oil is at a record high and increasing. 
Alternative fuel vehicles and advanced technology vehicles, such as 
hybrids and fuel cells, significantly reduce the use of gasoline and 
diesel and have dramatically reduced emissions. Each dedicated natural 
gas vehicle displaces 100 percent of the gasoline or diesel that 
otherwise would be used in that vehicle.
  Conventional gasoline and diesel motor vehicle technology has come 
about as far as it can in terms of fuel economy and emissions. The 
further gains that are needed to allow the United States to achieve 
energy security and clean air require nonpetroleum vehicles and hybrid 
and fuel cell vehicles. The nation simply cannot achieve its goals in 
these areas with these conventional vehicles. Striking these provisions 
would be a big mistake, and I urge my colleagues to vote against the 
Kyl amendment.
  The PRESIDING OFFICER. The question is on agreeing to the motion to 
table amendment No. 3333. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 91, nays 8, as follows:

                      [Rollcall Vote No. 91 Leg.]

                                YEAS--91

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Cochran
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feinstein
     Frist
     Graham
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stabenow
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                                NAYS--8

     Burns
     Feingold
     Fitzgerald
     Gramm
     Kyl
     Lott
     McCain
     Nickles

                             NOT VOTING--1

       
     Helms
       
  The motion was agreed to.
  Mr. BINGAMAN. I move to reconsider the vote and move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3370

  The PRESIDING OFFICER. There will now be 2 minutes evenly divided 
before a vote on the motion to table the Graham amendment.
  The Senator from Florida.
  Mr. GRAHAM. Mr. President, this amendment is not about the underlying 
provision, but I think it is worthwhile for the Members to understand 
what the underlying provision would do.
  The current tax law, consistent with generally accepted accounting 
procedures, provides that when royalty payments are made by oil and gas 
producers to the landowner during a period when there is no oil or gas 
production, during a suspension period, that those costs must be 
capitalized, and then they can be recovered when there is actual oil 
and gas production. That is both the accounting and tax law today.
  We are about to split the two and say that for tax purposes they can 
be expensed within a 2-year period. If that sounds a little bit like 
some of the things that Enron was doing on its books, the answer is it 
is a lot like what Enron was doing on its books.
  But the fundamental issue is, without examination, we are about to 
ask the Social Security trust fund to pay for the additional cost of 
this preferential depreciation treatment. I believe, if this is a 
worthy provision, it is worthy that somebody come up with an offset so 
that we decide who pays for it, not our children and grandchildren, by 
depletion of the Social Security trust fund.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, the provision that the Senator from 
Florida seeks to take out of the bill is part of a very carefully 
balanced and level tax package that should remain in this bill. We 
should table this amendment.
  Simply stated, the situation is, if you produce oil, you pay a 
royalty. You can deduct it. But if the price of oil drops, you have to 
pay delayed rental payments, and you pay the payments to the 
Government. You should be able to deduct those payments as you can 
deduct royalty payments when they are paid. That is what the bill says. 
That provision should be kept in the bill.
  Mr. President, I yield to the Senator from Texas.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, this is the only part of the bill that 
would encourage small drillers to explore. In fact, this is as any 
other business is treated. The underlying bill

[[Page S3393]]

says, if you pay an expense, you get to deduct it in the year in which 
you make it.
  This amendment would take that away and make you amortize it, even 
though you already paid it. And you may not even find oil. Please table 
this amendment. It would be unfair not to do so.
  The PRESIDING OFFICER. All time has expired.
  The question is on agreeing to the motion to table amendment No. 
3370. The yeas and nays have been ordered. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 73, nays 26, as follows:

                      [Rollcall Vote No. 92 Leg.]

                                YEAS--73

     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carper
     Chafee
     Cleland
     Cochran
     Conrad
     Craig
     Crapo
     Daschle
     DeWine
     Domenici
     Dorgan
     Durbin
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Gramm
     Grassley
     Hagel
     Harkin
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kohl
     Kyl
     Landrieu
     Levin
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Murray
     Nelson (NE)
     Nickles
     Reid
     Roberts
     Rockefeller
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Specter
     Stabenow
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner
     Wyden

                                NAYS--26

     Akaka
     Boxer
     Carnahan
     Clinton
     Collins
     Corzine
     Dayton
     Dodd
     Edwards
     Feingold
     Graham
     Gregg
     Hollings
     Inouye
     Kennedy
     Kerry
     Leahy
     Lieberman
     Mikulski
     Nelson (FL)
     Reed
     Sarbanes
     Schumer
     Snowe
     Torricelli
     Wellstone

                             NOT VOTING--1

       
     Helms
       
  The motion was agreed to.
  Mr. REID. Mr. President, this should be the last amendment prior to 
final passage.


                           Amendment No. 3372

  The PRESIDING OFFICER. At this time, there are 2 minutes, evenly 
divided, with respect for amendment No. 3372, offered by Senator Graham 
of Florida.
  The Senator from Florida.
  Mr. GRAHAM. Mr. President, I yield my time to the Senator from 
Wisconsin, Mr. Feingold.
  The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
  Mr. FEINGOLD. Mr. President, I rise in support of the amendment 
offered by the senior Senator from Florida. As we all know, our budget 
position has changed dramatically over the past year, and we are now 
facing projected deficits for years to come. If we are to climb out of 
the deficit hole, we absolutely must commit to a path of fiscal 
responsibility. That means a lot of things. First and foremost, it 
means paying for the spending and tax cut bills we pass.
  As it stands, we have not paid for this legislation. The tax package 
alone digs our deficit hole another $14 billion deeper. As we approach 
the retirement of the largest generation in history, the baby boomers, 
we face enormous fiscal challenges. Obviously, Social Security needs 
strengthening, Medicare must be modernized, and our long-term care 
system is in desperate need of reform.
  Mr. President, I urge my colleagues to support this amendment and put 
us back on the path to fiscal responsibility.
  The PRESIDING OFFICER. Who yields time in opposition?
  The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, for the information of the sponsors and 
my colleagues, we could make a point of order that this amendment is 
not germane because it is not postcloture. I am not going to do that 
because I was informed they were going to have the same thing offered 
to the underlying bill. I think it is in the interest of Senators to 
conclude the bill, and the best way is to table this amendment. This 
amendment is not germane postcloture.
  I happen to be on the Finance Committee. All Democrats and 
Republicans had chances to offer tax increases, and this amendment says 
don't let this bill take effect in any of the tax provisions until we 
have tax increases enacted into law. I think that is ridiculous. It is 
a good way to kill the provisions that the Senator from Montana and the 
Senator from Iowa worked to put in the bill.
  Mr. President, I move to table this amendment and ask for the yeas 
and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mr. REID. Mr. President, is there time remaining on the amendment?
  The PRESIDING OFFICER (Mr. Dayton). All time has expired.
  Mr. REID. Mr. President, I ask unanimous consent that upon 
disposition of all amendments--the list is already before the Senate--
the substitute amendment, as amended, be agreed to; that the bill, as 
amended, be read a third time; that the Senate then proceed to Calendar 
No. 145, H.R. 4, the House-passed energy bill; that all after the 
enacting clause be stricken, and the text of S. 517, as amended, be 
inserted in lieu thereof; that the bill be advanced to third reading; 
that the Senate proceed to a vote on passage of the bill; that upon 
passage, the Senate insist on its amendment, request a conference with 
the House on the disagreeing votes of the two Houses, and that the 
Chair be authorized to appoint conferees on the part of the Senate; 
provided further, S. 517 be returned to the calendar; that the conferee 
ratio be the following: The Energy Committee 6 to 5, and the Finance 
Committee 3 to 2, with this action occurring with no further 
intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  Mr. GRAHAM. Reserving the right to object.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. Reserving the right to object, and I will not object, I 
do object to the statement just made that this amendment provides that 
we will either come into balance by reducing spending or increasing 
revenue.
  The PRESIDING OFFICER. Is there objection?
  Mr. GRAHAM. We do not have a choice to let Social Security pay for 
it.
  The PRESIDING OFFICER. Is there objection to the unanimous consent 
request? The Chair hears none, and it is so ordered.
  The question is on agreeing to the motion to table amendment No. 
3372. The yeas and nays have been ordered. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 70, nays 29, as follows:

                      [Rollcall Vote No. 93 Leg.]

                                YEAS--70

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Carnahan
     Cleland
     Cochran
     Collins
     Craig
     Crapo
     Daschle
     DeWine
     Domenici
     Dorgan
     Edwards
     Ensign
     Enzi
     Fitzgerald
     Frist
     Grassley
     Hagel
     Hatch
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kohl
     Kyl
     Landrieu
     Leahy
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Reid
     Roberts
     Rockefeller
     Santorum
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wyden

                                NAYS--29

     Biden
     Boxer
     Cantwell
     Carper
     Chafee
     Clinton
     Conrad
     Corzine
     Dayton
     Dodd
     Durbin
     Feingold
     Feinstein
     Graham
     Gramm
     Gregg
     Harkin
     Hollings
     Kennedy
     Kerry
     Levin
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Reed
     Sarbanes
     Stabenow
     Wellstone

[[Page S3394]]



                             NOT VOTING--1

       
       Helms
       
  The motion was agreed to.
  Mr. REID. Mr. President, I move to reconsider the vote, and I move to 
lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3239

  The PRESIDING OFFICER. The pending business is the Brownback 
amendment No. 3239.
  Mr. BINGAMAN. I suggest the Senator from New Jersey and the Senator 
from Kansas be allowed to explain that amendment.
  The PRESIDING OFFICER. There are 2 minutes equally divided.
  Mr. BROWNBACK. Mr. President, this is a compromise approach on a very 
difficult issue. It involves taking out the underlying language on the 
CO2 registry. It will put in place a 5-year voluntary 
program on registering of CO2 emissions. After that period 
of time, if 60 percent are not reported, it does put in place a trigger 
mechanism, a mandatory reporting, unless there is an affirmative vote 
by this body which is required in the bill to remove that reporting 
requirement.
  It is a bipartisan approach. It is a compromise approach on a tough 
topic. It is voluntary. It is market oriented. It provides companies a 
way to limit their risk and exposure on CO2 issues of 
anything that might happen in the future and provides a registry for 
companies that want to voluntarily step forward and work to reduce 
those CO2 emissions. They may want to put in a new 
powerplant that is coal fired to protect themselves for CO2 
exposures.
  This is a tough and complex topic. I think we have struck the right 
balance with this amendment. I urge my colleagues to vote for it.
  The PRESIDING OFFICER. Who yields time in opposition?
  Mr. BINGAMAN. Mr. President, I ask unanimous consent the Senator from 
New Jersey be given a minute to explain his perspective.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CORZINE. Mr. President, we want to make sure in this compromise 
amendment that the perfect not be the enemy of the good. This is not 
everything anyone would want, but we have struck a compromise with 
voluntary reporting requirements and database buildup and recognition 
of actions by industry to control CO2. We will look at it in 
5 years.
  If the threshold is not met, mandatory requirements will come into 
play. This is an outstanding compromise where people worked very hard 
on a complex issue to get to a bipartisan middle ground. I hope we will 
all support it.
  Mr. BINGAMAN. I think it is appropriate to dispose of this amendment 
by voice vote.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
3239.
  The amendment (No. 3239) was agreed to.
  Mr. HAGEL. Mr. President, with the adoption of this amendment, the 
Senate has affirmed its commitment to dealing with the reporting of 
greenhouse gases in a voluntary, incentive-based manner.
  This amendment provides for a voluntary registry for the reductions 
in greenhouse gas emissions. Under this type of provision, industries 
will have an opportunity to record reductions made in their emissions 
and receive credit for those reductions.
  The legislative record should clearly note that the provisions 
creating the mandatory reporting of greenhouse gases originally 
contained in the underlying legislation will no longer take effect 
unless the voluntary registry does not achieve a critical mass of 
participation. If the voluntary registry system generates sufficient 
participation, the mandatory reporting of greenhouse gas emissions will 
never take effect.
  This amendment is not without problems, nor do I believe it is the 
best way to achieve robust participation in a voluntary registry. It 
contains several impediments that should be addressed in conference.
  The memorandum of agreement does not clearly spell out the roles of 
the various federal agencies in the execution of the duties proscribed. 
This is particularly troublesome for a voluntary registry. Those 
entities wishing to participate need the greatest clarity and certainty 
in order to have the greatest incentive to participate. Lack of 
certainty creates a disincentive and should be addressed in conference.
  There are onerous civil penalties contained is this amendment that 
should be removed. Greater baseline protection needs to be provided to 
ensure entities participating gain the rightful recognition for their 
efforts.
  Furthermore, I hope the conference will address the fundamental 
question of whether any ``trigger'' is necessary. The mandatory 
reporting of greenhouse gas emissions has no true purpose. We already 
garner information on the totality of U.S. emissions through annual 
inventories established within and reported by the Energy Information 
Administration and the Environmental Protection Agency. The only 
purpose for the mandatory reporting of greenhouse gas emissions is to 
create the mechanism for the regulation of carbon dioxide. This option 
has been dismissed by the current Administration, and I would hope the 
final legislation does not create a mechanism to help bring this about 
in the future.
  Numerous other options for structuring a voluntary greenhouse gas 
emissions registry were discussed during the discourse on Title XI of 
this legislation. Senator Voinovich and I offered an amendment on April 
18, 2002. It would have established a new and enhanced national 
greenhouse gas registry to record and recognize voluntary reductions of 
greenhouse gas emissions.
  That registry was supported by a wide cross-section of American 
industry, the very entities who would be participating in such a 
registry. I have included a copy of an April 16 letter sent to all 
Senators and ask unanimous consent that it be printed in the Record 
immediately following my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. HAGEL. This amendment could provide an alternative structure for 
a voluntary registry for consideration in the conference committee. It 
was created in consultation with many other Senators and reflects the 
expertise of their input.
  It is a workable framework for a registry that would be robust and 
gain the greatest and most meaningful participation from American 
industry. This, after all, should be our goal in the final outcome.
  I appreciate the work of the sponsors of the amendment just adopted 
in putting the Senate on record in favor of dealing with the reporting 
of greenhouse gas emissions in a voluntary manner. And I look forward 
to the conference committee improving upon the work begun in the Senate 
to provide for the implementation of a voluntary greenhouse gas 
emissions registry.

                               Exhibit 1

                                                   April 16, 2002.
     Hon. Thomas A. Daschle,
     U.S. Senate, Senate Hart Office Building, Washington, DC.
       Dear Senator Daschle: We write to encourage your support 
     for a draft amendment to the Energy Bill that proposes 
     substantial improvements to Title XI, including the 
     establishment of a more effective national registry of 
     greenhouse gas emissions and a more practical framework 
     encouraging further voluntary efforts to reduce those 
     emissions without harming our economy, our workers or our 
     communities.
       Without the needed changes, Title XI of the Energy Bill 
     would impose an unnecessary federal mandate to track and 
     report greenhouse gas emissions on large and small 
     businesses, as well as farmers, ranchers, some hospitals, 
     universities, school systems and more. And yet, the intent of 
     this costly and burdensome mandate is redundant. The federal 
     government, without any federal mandate, already compiles an 
     annual inventory of greenhouse gas emissions in compliance 
     with our national commitment to the ratified UN Framework 
     Convention on Climate Change.
       The draft amendment would establish a new and enhanced 
     system to report and verify actions taken to reduce or avoid 
     greenhouse gas emissions and provide transferable credits to 
     persons who do. By offering appropriate recognition of 
     actions taken, the amendment will provide powerful incentives 
     to participate without harming the economy, all the while 
     strengthening our national climate policy strategy.
       The draft amendment provides a constructive, achievable and 
     effective strategy to strengthen and improve the voluntary 
     reporting of greenhouse gas emissions and the reporting of 
     actions taken to reduce or avoid those emissions. We 
     encourage you to support the amendment and work with Senators 
     of both parties to secure its adoption.

[[Page S3395]]

       Thank you for your consideration of our views. While we 
     have some additional concerns regarding the policy provisions 
     of the bill, especially those provisions that appear to call 
     for a target and a timetable, we are hopeful these issues 
     will be resolved prior to final passage of the bill. In the 
     meantime, we look forward to working with you on developing 
     an effective climate policy strategy as part of our national 
     energy policy.
           Sincerely,
         Alliance of Automobile Manufacturers, American 
           Architectural Manufacturers Association, American 
           Boiler Manufacturers Assn, American Farm Bureau 
           Federation, American Highway Users Alliance,
         American Iron and Steel Institute, American Petroleum 
           Institute, American Portland Cement Alliance, American 
           Public Power Association, American Textile 
           Manufacturers Institute,
         Associated General Contractors of St. Louis, Associated 
           Petroleum Industries of Pennsylvania, Association of 
           American Railroads, Automotive Parts Rebuilders 
           Association, Danville [IL] Area Chamber of Commerce,
         Edison Electric Institute, Gas Appliance Manufacturers 
           Association, Greater Bristol [CT] Chamber of Commerce, 
           Greater Cincinnati Chamber of Commerce, Greater Merced 
           [CA] Chamber of Commerce,
         Greater Victoria [TX] Chamber of Commerce, Idaho Mining 
           Association, Illinois Valley Area Chamber of Commerce & 
           Economic Development, Integrity Research Institute, 
           IPC--The Association Connecting Electronic Industries,
         Kansas Petroleum Council, Leavenworth-Lansing [KS] Area 
           Chamber of Commerce, Lorain [OH] County Chamber of 
           Commerce, Louisiana Association of Business and 
           Industry, Metropolitan Evansville [IN] Chamber of 
           Commerce,
         Naperville [IL] Area Chamber of Commerce, National 
           Association of Manufacturers, National Mining 
           Association, National Rural Electric Cooperative 
           Association, National Society of Professional 
           Engineers,
         Nuclear Energy Institute, O'Fallen [IL] Chamber of 
           Commerce, Salt Institute, South Dakota Farm Bureau 
           Federation, Texas Association of Business and Chambers 
           of Commerce,
         The Siouxland [IA] Chamber of Commerce, U.S. Chamber of 
           Commerce, Utah Rural Telecom Association, Wisconsin 
           Grocers Association.

  Mr. VOINOVICH. Mr. President, I rise today to speak on the Corzine/
Brownback amendment No. 3239. This amendment replaces the existing 
language in Title 11 which would have created a mandatory registry for 
the reporting of greenhouse gases and replaces it with a voluntary 
program. I am pleased that the Senate has rejected the concept of 
mandating greenhouse gas reports at this time. While the amendment does 
contain language which would trigger compulsory reporting in five years 
if sixty percent of the national aggregate anthropogenic greenhouse 
gases are not represented on the voluntary registry, we do not expect 
this trigger to ever be activated since presently thirty percent of the 
gases are already reporting under the Clean Air Act by the utility 
sector.
  I had joined with Senator Hagel in offering an alternative amendment 
which would have provided a much more robust voluntary reporting 
program with a transferable credit program and baseline protection. 
This would have provided a clear incentive to encourage maximum 
participation.
  The approach that Senator Hagel and I took in our amendment would 
have accomplished three key objectives: (1) It will help us get the 
full picture on climate change with real incentives for voluntary 
participation in the registry; (2) It will make sure that picture 
reflects what is really happening by providing for accurate measurement 
and verification of emission reductions, and (3) It is forward looking 
because it creates a process for establishing transferable credits that 
can be used in voluntary transactions for any future potential 
regulatory program.
  Unfortunately, due to cloture limitations, the Senate ran out of time 
to fully consider our amendment, yet I am pleased that Senators Corzine 
and Brownback adopted our idea of a voluntary registry to replace the 
overly burdensome mandatory program contained in the original bill. At 
this point in time I do not think it is wise public policy to mandate 
the reporting of greenhouse gases, and I am pleased that the Senate 
agrees with this point.


                     Amendment No. 3146, Withdrawn

  Mr. BINGAMAN. Mr. President, I ask unanimous consent amendment No. 
3146 be withdrawn.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3146) was withdrawn.


                    Amendment No. 3355, as Modified

  Mr. BINGAMAN. I ask unanimous consent amendment No. 3355 be modified 
to reflect changes to the fuel cell credit adopted as part of the 
amendment by Senator Murray earlier this afternoon.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
amendment will be so modified.
  The amendment (No. 3355), as modified, is as follows:

       In Division H, beginning on page 103, line 1, strike all 
     through page 105, line 12, and insert the following:

     SEC. 2104. CREDIT FOR BUSINESS INSTALLATION OF QUALIFIED FUEL 
                   CELLS AND STATIONARY MICROTURBINE POWER PLANTS.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property) is amended by striking ``or'' at 
     the end of clause (i), by adding ``or'' at the end of clause 
     (ii), and by inserting after clause (ii) the following new 
     clause:
       ``(iii) qualified fuel cell property or qualified 
     microturbine property,''.
       (b) Qualified Fuel Cell Property; Qualified Microturbine 
     Property.--Subsection (a) of section 48 is amended by 
     redesignating paragraphs (4) and (5) as paragraphs (5) and 
     (6), respectively, and by inserting after paragraph (3) the 
     following new paragraph:
       ``(4) Qualified fuel cell property; qualified microturbine 
     property.--For purposes of this subsection--
       ``(A) Qualified fuel cell property.--
       ``(i) In general.--The term `qualified fuel cell property' 
     means a fuel cell power plant that--

       ``(I) generates at least 0.5 kilowatt of electricity using 
     an electrochemical process, and
       ``(II) has an electricity-only generation efficiency 
     greater than 30 percent.

       ``(ii) Limitation.--In the case of qualified fuel cell 
     property placed in service during the taxable year, the 
     credit determined under paragraph (1) for such year with 
     respect to such property shall not exceed an amount equal to 
     the lesser of--

       ``(I) 30 percent of the basis of such property, or
       ``(II) $500 for each 0.5 kilowatt of capacity of such 
     property.

       ``(iii) Fuel cell power plant.--The term `fuel cell power 
     plant' means an integrated system comprised of a fuel cell 
     stack assembly and associated balance of plant components 
     that converts a fuel into electricity using electrochemical 
     means.
       ``(iv) Termination.--Such term shall not include any 
     property placed in service after December 31, 2007.
       ``(B) Qualified microturbine property.--
       ``(i) In general.--The term ``qualified microturbine 
     property' means a stationary microturbine power plant which 
     has an electricity-only generation efficiency not less than 
     26 percent at International Standard Organization conditions.
       ``(ii) Limitation.--In the case of qualified microturbine 
     property placed in service during the taxable year, the 
     credit determined under paragraph (1) for such year with 
     respect to such property shall not exceed an amount equal to 
     the lesser of--

       ``(I) 10 percent of the basis of such property, or
       ``(II) $200 for each kilowatt of capacity of such property.

       ``(iii) Stationary microturbine power plant.--The term 
     `stationary microturbine power plant means a system 
     comprising of a rotary engine which is actuated by the 
     aerodynamic reaction or impulse or both on radial or axial 
     curved full-circumferential-admission airfoils on a central 
     axial rotating spindle. Such system--

       ``(I) commonly includes an air compressor, combustor, gas 
     pathways which lead compressed air to the combustor and which 
     lead hot combusted gases from the combustor to 1 or more 
     rotating turbine spools, which in turn drive the compressor 
     and power output shaft,
       ``(II) includes a fuel compressor, recuperator/regenerator, 
     generator or alternator, integrated combined cycle equipment, 
     cooling-heating-and-power equipment, sound attenuation 
     apparatus, and power conditioning equipment, and
       ``(III) includes all secondary components located between 
     the existing infrastructure for fuel delivery and the 
     existing infrastructure for power distribution, including 
     equipment and controls for meeting relevant power standards, 
     such as voltage, frequency, and power factors.

       ``(iv) Termination.--Such term shall not include any 
     property placed in service after December 31, 2006.''.
       (c) Limitation.--Section 48(a)(2)(A) (relating to energy 
     percentage) is amended to read as follows:
       ``(A) In general.--The energy percentage is--
       ``(i) in the case of qualified fuel cell property, 30 
     percent, and
       ``(ii) in the case of any other energy property, 10 
     percent.''.
       (d) Conforming Amendments.--
       (A) Section 29(b)(3)(A)(i)(III) is amended by striking 
     ``section 48(a)(4)(C)'' and inserting ``section 
     48(a)(5)(C)''.
       (B) Section 48(a)(1) is amended by inserting ``except as 
     provided in subparagraph (A)(ii) or (B)(ii) of paragraph 
     (4),'' before ``the energy''.

[[Page S3396]]

       (e) Effective Date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2002, under rules similar to the rules of section 48(m) of 
     the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

  Mr. BINGAMAN. I also ask unanimous consent that the Senator from New 
Jersey, Mr. Torricelli, be listed as a cosponsor of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


  Amendments Nos. 3343, 3344, 3362, 3363, 3346, as Modified, 3335, as 
          Modified, 3364, 3360, and 3355, as Modified, En Bloc

  Mr. BINGAMAN. I ask unanimous consent that notwithstanding rule XXII, 
the following amendments be agreed to en bloc and the motion to 
reconsider be laid on the table. The amendments are as follows: Nos. 
3343, 3344, 3362, 3363, 3346, as Modified, 3335, as Modified, 3364, 
3360, and 3355, as modified.
  Mr. McCAIN. Reserving the right to object, would the Senator explain 
what amendment No. 3346 is?
  Mr. BINGAMAN. This is an amendment by Senator Kohl. I can get the 
description in a minute on the precise provisions. There is credit for 
electricity produced from municipal biosolids and recycled sludge.
  Mr. McCAIN. Electricity manufactured from biosolids?
  Mr. BINGAMAN. Produced from municipal biosolids and recycled sludge.
  Mr. McCAIN. Municipal biosolids?
  Mr. BINGAMAN. I am sure the Senator from Arizona is very familiar 
with biosolids.
  Mr. McCAIN. Could I ask the manager a question? I understand we have 
tax credit for chicken litter, biowaste. Excuse me? Bovine, pig, dead 
animal, and now biosolids; is that correct?
  Mr. BINGAMAN. We thought it was only fair.
  Mr. McCAIN. I don't want to hold up the Senate, but what about man's 
best friend, the dog? What about the pigeon, the noble pigeon?
  Mr. BINGAMAN. If the Senator has an amendment.
  Mr. McCAIN. Should there be some consideration of these? Shouldn't 
they make a deposit to reduce our energy requirements?
  Mr. BINGAMAN. We would be glad to consider any germane amendment the 
Senator would like to call up.
  Mr. McCAIN. I thank the sponsor for that consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 3343, 3344, 3362, 3363, 3346, 3335, and 3360) 
were agreed to, as follows:


                           Amendment No. 3343

    (Purpose: To modify the credit for the production of fuel from 
nonconventional sources to include production of fuel from agricultural 
                           and animal waste)

       In Division H, on page 202, between lines 17 and 18, insert 
     the following:
       ``(5) Facilities producing fuels from agricultural and 
     animal waste.--
       ``(A) In general.--In the case of facility for producing 
     liquid, gaseous, or solid fuels from qualified agricultural 
     and animal wastes, including such fuels when used as 
     feedstocks, which was placed in service after the date of the 
     enactment of this subsection and before January 1, 2005, this 
     section shall apply with respect to fuel produced at such 
     facility not later than the close of the 3-year period 
     beginning on the date such facility is placed in service.
       ``(B) Qualified agricultural and animal waste.--For 
     purposes of this paragraph, the term `qualified agricultural 
     and animal waste' means agriculture and animal waste, 
     including by-products, packaging, and any materials 
     associated with the processing, feeding, selling, 
     transporting, or disposal of agricultural or animal products 
     or wastes, including wood shavings, straw, rice hulls, and 
     other bedding for the disposition of manure.
                                  ____



                           Amendment No. 3344

(Purpose: To amend the Internal Revenue Code of 1986 to clarify excise 
          tax exemptions for agricultural aerial applicators)

       In Division H, on page 216, after line 21, add the 
     following:

     SEC. ____. 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.
                                  ____



                           Amendment No. 3362

 (Purpose: To amend the Internal Revenue Code to modify the definition 
                           of Rural Airport)

       At the appropriate place insert the following:

     SEC. ____. MODIFICATION OF RURAL AIRPORT DEFINITION.

       (a) In General.--Clause (ii) of section 4261(e)(1)(B) 
     (defining rural airport) is amended by striking the period at 
     the end of subclause (II) and inserting ``, or'' and by 
     adding at the end the following new subclause:
       ``(III) is not connected by paved roads to another 
     airport.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after 2002.
                                  ____



                           Amendment No. 3363

(Purpose: To amend the Internal Revenue Code to exempt small seaplanes 
                           from ticket taxes)

       At the appropriate place insert the following:

     SEC. ____. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION 
                   PROVIDED BY SEA PLANES.

       (a) The taxes imposed by sections 4261 and 4271 shall not 
     apply to transportation by a seaplane with respect to any 
     segment consisting of a takeoff from, and a landing on, 
     water.
       (b) Effective Date.--The amendment made by this section 
     shall apply to calendar years beginning after 2002.
                                  ____



                           AMENDMENT NO. 3346

  (Purpose: To modify the credit for the production of electricity to 
            include municipal biosolids and recycled sludge)

       On page 17, between lines 8 and 9, insert the following:

     SEC. ____. CREDIT FOR ELECTRICITY PRODUCED FROM MUNICIPAL 
                   BIOSOLIDS AND RECYCLED SLUDGE.

       (a) In General.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (F), by striking 
     the period at the end of subparagraph (G), and by adding at 
     the end the following new subparagraphs:
       ``(H) municipal biosolids, and
       ``(I) recycled sludge.''.
       (b) Qualified Facilities.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraphs:
       ``(G) Municipal biosolids facility.--In the case of a 
     facility using municipal biosolids to produce electricity, 
     the term `qualified facility' means any facility owned by the 
     taxpayer which is originally placed in service after December 
     31, 2001, and before January 1, 2007.
       ``(H) Recycled sludge facility.--
       ``(i) In general.--In the case of a facility using recycled 
     sludge to produce electricity, the term `qualified facility' 
     means any facility owned by the taxpayer which is originally 
     placed in service before January 1, 2007.
       ``(ii) Special rule.--In the case of a qualified facility 
     described in clause (i), the 10-year period referred to in 
     subsection (a) shall be treated as beginning no earlier than 
     the date of the enactment of this subparagraph.''.
       (c) Definitions.--Section 45(c), as amended by this Act, is 
     amended by redesignating paragraph (8) as paragraph (10) and 
     by inserting after paragraph (7) the following new 
     paragraphs:
       ``(8) Municipal biosolids.--The term `municipal biosolids' 
     means the residue or solids

[[Page S3397]]

     removed by a municipal wastewater treatment facility.
       ``(9) Recycled sludge.--
       ``(A) In general.--The term `recycled sludge' means the 
     recycled residue byproduct created in the treatment of 
     commercial, industrial, municipal, or navigational 
     wastewater.
       ``(B) Recycled.--The term `recycled' means the processing 
     of residue into a marketable product, but does not include 
     incineration for the purpose of volume reduction.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to electricity sold after the date of the 
     enactment of this Act, in taxable years ending after such 
     date.
                                  ____



                           AMENDMENT NO. 3335

  (Purpose: To amend the Internal Revenue Code of 1986 to extend the 
  credit for the production of fuel from nonconventional sources with 
                respect to certain existing facilities)

       In Division H, on page 202, between lines 22 and 23, insert 
     the following:
       (b) Extension for certain fuel produced at existing 
     facilities.--Paragraph (2) of section 29(f) (relating to 
     application of section) is amended by inserting ``(January 1, 
     2005, in the case of any coke, coke gas, or natural gas and 
     byproducts produced by coal gasification from lignite in a 
     facility described in paragraph (1)(B))'' after ``January 1, 
     2003''.
                                  ____



                           AMENDMENT NO. 3360

  (Purpose: To provide incentives for water conservation through the 
                    installation of water submeters)

       In Division H, on page 137, between lines 7 and 8, insert 
     the following:

     SEC. ____. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR 
                   RETROFITTED WATER SUBMETERING DEVICES.

       (a) In General.--Part VI of subchapter B of chapter 1 
     (relating to itemized deductions for individuals and 
     corporations), as amended by this Act, is amended by 
     inserting after section 179D the following new section:

     ``SEC. 179E. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED WATER 
                   SUBMETERING DEVICES.

       ``(a) Allowance of Deduction.--In the case of a taxpayer 
     who is an eligible resupplier, there shall be allowed as a 
     deduction an amount equal to the cost of each qualified water 
     submetering device placed in service during the taxable year.
       ``(b) Maximum Deduction.--The deduction allowed by this 
     section with respect to each qualified water submetering 
     device shall not exceed $30.
       ``(c) Eligible Resupplier.--For purposes of this section, 
     the term `eligible resupplier' means any taxpayer who 
     purchases and installs qualified water submetering devices in 
     every unit in any multi-unit property.
       ``(d) Qualified Water Submetering Device.--The term 
     `qualified water submetering device' means any tangible 
     property to which section 168 applies if such property is a 
     submetering device (including ancillary equipment)--
       ``(1) which is purchased and installed by the taxpayer to 
     enable consumers to manage their purchase or use of water in 
     response to water price and usage signals, and
       ``(2) which permits reading of water price and usage 
     signals on at least a daily basis.
       ``(e) Property Used Outside the United States Not 
     Qualified.--No deduction shall be allowed under subsection 
     (a) with respect to property which is used predominantly 
     outside the United States or with respect to the portion of 
     the cost of any property taken into account under section 
     179.
       ``(f) Basis Reduction.--
       ``(1) In general.--For purposes of this title, the basis of 
     any property shall be reduced by the amount of the deduction 
     with respect to such property which is allowed by subsection 
     (a).
       ``(2) Ordinary income recapture.--For purposes of section 
     1245, the amount of the deduction allowable under subsection 
     (a) with respect to any property that is of a character 
     subject to the allowance for depreciation shall be treated as 
     a deduction allowed for depreciation under section 167.
       ``(g) Termination.--This section shall not apply to any 
     property placed in service after December 31, 2007.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (J), by 
     striking the period at the end of subparagraph (K) and 
     inserting ``, or'', and by inserting after subparagraph (K) 
     the following new subparagraph:
       ``(L) expenditures for which a deduction is allowed under 
     section 179E.''.
       (2) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179D'' each place it appears in the 
     heading and text and inserting ``, 179D, or 179E''.
       (3) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (34), by striking 
     the period at the end of paragraph (35) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(36) to the extent provided in section 179E(f)(1).''.
       (4) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179E,'' after ``179D,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (5) The table of contents for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 179D the 
     following new item:

``Sec. 179E. Deduction for qualified new or retrofitted water 
              submetering devices.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to qualified water submetering devices placed in 
     service after the date of the enactment of this Act, in 
     taxable years ending after such date.

     SEC. ____. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED WATER SUBMETERING 
                   DEVICES.

       (a) In General.--Subparagraph (A) of section 168(e)(3) 
     (relating to classification of property) is amended by 
     striking ``and'' at the end of clause (iii), by striking the 
     period at the end of clause (iv) and inserting ``, and'', and 
     by adding at the end the following new clause:
       ``(v) any qualified water submetering device.''.
       (b) Definition of Qualified Water Submetering Device.--
     Section 168(i) (relating to definitions and special rules), 
     as amended by this Act, is amended by inserting at the end 
     the following new paragraph:
       ``(16) Qualified water submetering device.--The term 
     `qualified water submetering device' means any qualified 
     water submetering device (as defined in section 179E(d)) 
     which is placed in service before January 1, 2008, by a 
     taxpayer who is an eligible resupplier (as defined in section 
     179E(c)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

  The amendments (Nos. 3364 and 3355) were agreed to.


           Adoption of Amendments Nos. 3059 and 3258 Vitiated

  Mr. BINGAMAN. I ask unanimous consent the adoption of the amendments 
numbered 3059 and 3258 be vitiated.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 3380

  Mr. BINGAMAN. I ask unanimous consent that the amendment numbered 
3380 be in order notwithstanding rule XXII; that the amendment numbered 
3380 be agreed to, and the motion to reconsider be laid on the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3380) was agreed to.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')


               Amendments Nos. 3196 and 3209, as Modified

  Mr. BINGAMAN. Mr. President, I ask unanimous consent that 
notwithstanding rule XXII, it now be in order to consider the 
amendments numbered 3196 and 3209; that the amendments be modified by 
the changes at the desk, the amendments be agreed to, and the motion to 
reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendments (Nos. 3196 and 3209), as modified, were agreed to, as 
follows:


                           amendment no. 3196

(Purpose: To express the sense of the Senate concerning electric power 
                         transmission systems)

       In the appropriate place in subtitle A of title II, insert 
     the following:

     SEC. 2. ELECTRIC POWER TRANSMISSION SYSTEMS.

       The Federal Government should be attentive to electric 
     power transmission issues, including issues that can be 
     addressed through policies that facilitate investment in, the 
     enhancement of, and the efficiency of electric power 
     transmission systems.
                                  ____



                           amendment no. 3209

(Purpose: To carry out pilot programs that aid accurate carbon storage 
                     and sequestration accounting)

       On page 487, between lines 18 and 19, insert the following:

     SEC. 13. CARBON STORAGE AND SEQUESTRATION ACCOUNTING 
                   RESEARCH.

       (a) In General.--The Secretary of Agriculture, in 
     collaboration with the heads of other Federal agencies, shall 
     conduct research on, develop, and publish as appropriate, 
     carbon storage and sequestration accounting models, reference 
     tables, or other tools that can assist landowners and others 
     in cost-effective and reliable quantification of the carbon 
     release, sequestration, and storage expected to result from 
     various resource uses, land uses, practices, activities or 
     forest, agricultural, or cropland management practices over 
     various periods of time.
       (b) Pilot Programs.--The Secretary of Agriculture shall 
     make competitive grants to not more than 5 eligible entities 
     to carry out pilot programs to demonstrate and assess the 
     potential for development and use of carbon inventories and 
     accounting systems that can assist in developing and 
     assessing carbon storage and sequestration policies and 
     programs. Not later than 1 year after the date of

[[Page S3398]]

     enactment of this section, the Secretary of Agriculture, in 
     collaboration with the heads of other Federal agencies and 
     with other interested parties, shall develop guidelines for 
     such pilot programs, including eligibility for awards, 
     application contents, reporting requirements, and mechanisms 
     for peer review.
       (c) Report.--Not later than 5 years after the date of 
     enactment of this section, the Secretary of Agriculture, in 
     collaboration with the heads of other Federal agencies, shall 
     submit to Congress a report on the technical, institutional, 
     infrastructure, design and funding needs to establish and 
     maintain a national carbon storage and sequestration baseline 
     and accounting system. The report shall include documentation 
     of the results of each of the pilot programs.
       (d) Authorization of Appropriations.--For the purposes of 
     this section, there are authorized to be appropriated to the 
     Secretary of Agriculture $20,000,000 for fiscal years 2003 
     through 2007.

  Mr. WELLSTONE. Mr. President, I rise today to speak to an important 
amendment on behalf of myself and Senator Wyden regarding carbon 
sequestration.
  The Energy Policy Reform Act and the debates we have had on it have 
sought to achieve an integration of energy and environmental policy 
including new and far reaching provisions to help this nation meet its 
international obligations to address global climate change. The 
amendment I propose today with Senator Wyden provides an important 
complement to provisions in S. 517, the Farm Bill that already passed 
the Senate, and the President's recent announced plans to address 
global climate change. These other provisions would advance research on 
carbon sequestration from the agriculture and forest sectors, establish 
credible methods for measuring carbon sequestered for individual 
projects, and create a national greenhouse gas emissions database and 
registry at the project level.
  The amendment takes a comprehensive view of both carbon sequestration 
and carbon storage--beyond the project level--to address what is 
happening over time to release and sink carbon for the full range of 
land uses, management practices and natural resources. The amendment 
creates a competitive grant pilot program for state and multi-state 
areas in a range of regional forest, agriculture and ecosystem 
settings. The purpose is to help us better understand what is needed 
for a national carbon sequestration inventory and accounting system 
that would be credible and cost-effective.
  The amendment will enable us to assess the overall effectiveness and 
potential contributions of new programs and policies to encourage 
actions which offer a broad range of benefits to the environment. To do 
this, the amendment seeks to translate scientific information into 
easily understood means for landowners and others to apply in making 
decisions on their current practices. This information will distinguish 
practices which offer additional environmental benefits that may be 
associated with carbon storage or sequestration, such as flood and 
erosion prevention, soil conservation, fertility and productivity 
improvements, improved water quality and management, protection and 
restoration of ecosystems and habitat, and improved management of 
agricultural lands and forests including reforestation practices. It 
also would include information for landowners and others on how to 
assess the economic and financial costs and benefits of land uses that 
sequester or store carbon.
  If we make this investment now, within the next 5 years we should be 
prepared to identify real incentives not only for forest and 
agriculture but also for natural resources and land use management 
which will show up also in our national accounts. I also anticipate 
that some policy changes supported by this information may enable our 
agriculture and forest sectors to realize an economic gain from the 
practices themselves.
  The practices that will be encouraged by this amendment make good 
common sense and good economic sense. The State of Minnesota, with its 
rich forest and agricultural base and water resources, has a lot to 
lose from global warming.
  While we have much to lose, we also have much we can contribute to 
reducing the problem of global climate change and gain in the process. 
If done properly, carbon storage and sequestration offer a welcome 
opportunity to draw together the interests and talents of the 
environmental community, agriculture, forest and timber products 
industries. Carbon sequestration is not the only or even major answer 
to our challenges in addressing climate change, but it is an important 
complement to other steps we must take to increase energy efficiency 
and conservation, increase use of renewable fuels and put in place an 
effective program for greenhouse gas emissions control.
  This research must involve a wide range of perspectives and 
interests. The Secretary of the Department of Agriculture is directed 
to work in collaboration with other federal agencies, on all aspects of 
carrying out the purposes of the amendment. These agencies should 
include the Environmental Protection Agency, the National Aeronautics 
and Space Administration, the Departments of Commerce, Energy, and the 
Interior, as well as several agencies within the Department of 
Agriculture, including the Agricultural Research Service, the 
Cooperative State Research, Education and Extension Service, the Forest 
Service, and the Natural Resources Conservation Service.
  Because forest and agriculture sectors play such a critical role in 
carbon storage and sequestration, the pilot areas should have a high 
percentage of land that is forest or cropland. The U.S. Department of 
Agriculture already tracks this information through its Natural 
Resources Conservation Service National Resources Inventory, the last 
being carried out in 1997.
  Pilot State or multi-State areas should not only be capable of 
carrying out the research on a technical level, they should have 
demonstrated or be interested in pursuing the kind of policies and 
programs to encourage environmentally beneficial carbon storage and 
sequestration practices that this amendment seeks to advance. This 
research takes research and information already available at different 
levels of government, and in many different groups, and integrates it 
in a way that we can develop and assess these means of encouraging 
helpful practices.
  The amendment calls for an approach to carbon storage and 
sequestration accounting based on sound science. It is our intention 
that the Peer Review process called for in the amendment would include 
public and private science and policy groups as well as by the user 
community. This peer review is important particularly in regard to 
translating science into information in a form that provides easy 
access to landowners to encourage them to consider environmentally 
beneficial carbon storage and sequestration practices in their decision 
making.
  Eligible entities for the pilot program grants would include land 
grant colleges or universities as defined both by the National 
Agricultural Research, Extension and Teaching Policy Act of 1977 and 
tribal land grant institutions established through the Equity in 
Educational Land Grant Status Act of 1994. These research institutions, 
as well as others with demonstrated experience in the field should be 
included among the eligible entities as should state or state consortia 
or non-profits be considered for these grants, especially since we want 
to see the results used to move forward on the policy and program front 
to encourage these practices.
  The grant-eligible programs should also demonstrate that they would 
include some means of ensuring the participation of governmental and 
non governmental interests that would be affected by the pilot program.
  Carbon sequestration and storage potentially serve both environmental 
and economic interests. I have letters of endorsement from the American 
Farmland Trust, the National Farmer's Union, The Institute for 
Agriculture and Trade Policy, Environmental Defense and Nature 
Conservancy, as well as from leading soil and forest scientists in 
Minnesota, Kansas, Ohio, and Oregon. Many others who are prominent in 
the environmental, agricultural, forest, and research communities 
believe this amendment takes us in the right direction.


                           Amendment No. 3230

  Mr. BINGAMAN. I ask unanimous consent, notwithstanding rule XXII, it 
be in order to consider amendment No. 3230; that Senator Cantwell and 
Senator Smith of Oregon be added as cosponsors, the amendment be agreed 
to,

[[Page S3399]]

and the motion to reconsider be laid upon the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 3230) was agreed to, as follows:

      (Purpose: To provide additional borrowing authority for the 
 construction, acquisition, and replacement of the transmission system 
of the Bonneville Power Administration and to carry out other duties of 
       the Administrator of the Bonneville Power Administration)

       On page 62, between lines 3 and 4, insert the following:

     SEC. 2____. BONNEVILLE POWER ADMINISTRATION BONDS.

       Section 13 of the Federal Columbia River Transmission 
     System Act (16 U.S.C. 838k) is amended--
       (1) by striking the section heading and all that follows 
     through ``(a) The Administrator'' and inserting the 
     following:

     ``SEC. 13. BONNEVILLE POWER ADMINISTRATION BONDS.

       ``(a) Bonds.--
       ``(1) In general.--The Administrator''; and
       (2) by adding at the end the following:
       ``(2) Additional borrowing authority.--In addition to the 
     borrowing authority of the Administrator authorized under 
     paragraph (1) or any other provision of law, an additional 
     $1,300,000,000 is made available, to remain outstanding at 
     any 1 time--
       ``(A) to provide funds to assist in financing the 
     construction, acquisition, and replacement of the 
     transmission system of the Bonneville Power Administration; 
     and
       ``(B) to implement the authorities of the Administrator 
     under the Pacific Northwest Electric Power Planning and 
     Conservation Act (16 U.S.C. 839 et seq.).''.


                           Amendment No. 3366

  Mr. REID. Mr. President, on the list, it is my understanding the only 
remaining amendment is numbered 3366 offered by the Senator from 
Michigan, Mr. Levin. It has been cleared on this side, and it has been 
cleared by Senator Hatch from the Finance Committee. I ask if the 
amendment has been cleared by the managers of this bill.
  Mr. MURKOWSKI. Those have not been cleared on our side.
  Mr. REID. This is No. 3366 offered by Senator Levin.
  Mr. MURKOWSKI. If the Senator will wait a moment, that was No. 3366?
  Mr. REID. No. 3366.
  Mr. BINGAMAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MURKOWSKI. Mr. President, we cleared the pending amendment on our 
side. We have no objection. It is No. 3366.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  The amendment (No. 3366) was agreed to.
  Mr. REID. Mr. President, I move to reconsider the vote.
  Mr. LEVIN. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                    broadband tax credit legislation

  Mr. KENNEDY. Mr. President, a number of us have come to the floor 
today to discuss legislation to provide tax incentives to accelerate 
``broadband'' high-speed Internet access across the country. The 
widespread availability of broadband technology is essential to 
ensuring the United States' technological leadership in the world. We 
must make a commitment to a national broadband policy and do it now.
  The reach of the information revolution to our Nation's rural and 
urban underserved areas depends on affordable Internet access. For far 
too long, these regions have found themselves disconnected from the 
information age because of their geography and high-cost of service. 
One of our greatest challenges for the future is to close the growing 
economic gap in access to computers and the Internet. If we do not act 
to close it now, this ``digital divide'' will become the opportunity of 
our time.
  Several policy initiatives have been proposed to stimulate broadband 
deployment including deregulation, community planning grants, and low-
interest loans to name a few. The broadband tax credit proposal is an 
important first step that has gained widespread support in Congress 
because it provides tax credits to those who take broadband to places 
where the market is not taking it, both geographically and 
technologically. So we are here to discuss the importance of that 
proposal and of ensuring its passage this year.
  The Senator from West Virginia is the sponsor of the preeminent 
broadband tax credit bill, the Broadband Internet Access Act, of which 
I am pleased to be an original cosponsor, as is my friend from Oregon. 
Senator Rockefeller had led the fight to bring broadband access to all 
Americans, and first introduced this bill along with Senators Moynihan, 
Kerry, and others. He reintroduced the Broadband Internet Access Act, 
S. 88, last year, and it has 64 cosponsors from both sides of the 
aisle. A companion bill in the House has 194 cosponsors. A version of 
Senator Rockefeller's bill was reported out of the Senate Finance 
Committee as part of the stimulus package that was sent to the floor 
last December. I commend my friend from West Virginia for his 
leadership on this and many other technology issues so important to our 
nation's economy.
  Senator Smith and I have introduced a measure very similar to Senator 
Rockefeller's bill as an amendment to the energy legislation now before 
this body. Under this proposal, any company providing the required 
level of service, whether by telephone, cable modem, terrestrial 
wireless, satellite, or any other technology, would be eligible to 
claim the credit. The proposal provides a 10 percent tax credit for 
investment in ``current-generation'' broadband services and a 20 
percent credit for investment in ``next generation'' services. Current 
generation broadband is typically 5-20 times faster than conventional 
``dial-up'' Internet service and capable of transmitting text and 
photos very quickly. Current generation broadband can also transmit 
video imagery, but with low quality. Next generation broadband is 
hundreds of times faster than dial-up and transmits video imagery with 
great speed and clarity, making it ideal for applications like 
telemedicine, distance learning, and video conferencing.
  In my home State of Massachusetts, I saw firsthand how these types of 
advanced Internet services transformed the economy of the entire 
Berkshire County region. Like may rural areas across the Nation, the 
Berkshires were considered to be too far away from the Internet portals 
to interest providers. But business and Government leaders began an 
initiative called ``Berkshire Connect,'' that resulted in a partnership 
with providers to build a multi-million dollar network of microwave 
towers and fiber-optic lines linking the county's scenic villages and 
small cities with fast Internet access.
  The project put the Berkshires on an equal footing with the rest of 
the global marketplace, because the Internet levels the playing field 
between large and small businesses and rural and urban areas. I am 
confident that passage of the broadband tax credit measure will bring 
similar success stories across the Nation like we have seen in the 
Berkshires for more residents and businesses.
  The proposal provides $540 million in tax credits for broadband 
deployment to wire an estimated 5.4 million additional U.S. homes with 
current generation broadband and 700,000 more with next generation 
broadband. Today, 11 million U.S. homes are wired with current 
generation broadband and 340,000 with next generation broadband. This 
measure would increase those numbers by 50 percent and 200 percent 
respectively.
  Senator Smith and I filed this measure as an amendment to the energy 
legislation because we see a clear connection between Internet use and 
energy savings. One former Energy Department official has testified 
before Congress that by reducing shopping trips and retail office 
space, e-commerce was responsible for energy use staying flat in the 
last 1990s while the economy was expanding sharply. And a number of 
studies have found that telecommuting saves 1-2 percent of total annual 
gasoline consumption and has the potential to save more. Meanwhile, 
economists now recognize that telecommuters can avoid the ``congestion 
costs'' which each additional driver imposes on others in terms of lost 
time and excess fuel from sitting in traffic jams. Princeton Professor 
Paul Krugman has estimated Atlanta's congestion cost at $3,500 a year 
for each

[[Page S3400]]

additional driver. And associated savings come in the area of the 
environment. A 1999 study by the International Telework Association and 
Council found that the average telecommuter saves 28.5 pounds of 
pollution emissions every day he or she works from home.
  The Senator from West Virginia was just discussing with me a number 
of other important benefits of broadband, apart from energy savings. I 
wonder if he would take a moment to describe those.
  Mr. ROCKEFELLER. I would be happy to do so, and I thank the Senator 
from Massachusetts. For years now, it has been a goal of mine to make 
sure that West Virginians, and indeed all Americans, can have access to 
technology. The primary reason I introduced the broadband tax credit is 
to help address some of the most intractable problems associated with 
our country's transition to the digital economy--unequal availability 
of broadband access technologies. This tax credit will encourage 
deployment of broadband facilities in areas where such technologies 
have not, and, without Congressional action, perhaps will not, be made 
available. With the help of the tax credit, people and businesses in 
these areas will be able to more fully benefit from the networked 
economy, and from activities such as telemedicine, telecommuting, and 
distance learning. This has positive consequences for everyone--not 
just those in rural areas--that go beyond the marketplace.
  I also think it important to understand that this technology will 
also be an important driver of productivity and economic growth. 
According to the Federal Reserve, information technology accounted for 
over 60 percent of the productivity growth occurring from 1995 to 1999. 
Listen to the change that occurred at that time. During the first half 
of the 1990s, productivity increased on average only 1.5 percent per 
year. Then, when we began to link our computers over the Internet, 
productivity jumped to 2.8 percent in the second half of the decade. It 
is this increase which Fed economists attribute primarily to 
information technology, and I think it is very fair to expect that 
wide-spread broadband networks are going to make us that much more 
efficient because they move us beyond using the Internet for e-mail to 
much more substantive and sophisticated applications. And the economic 
value of that to us as a nation could be very significant. One 
economist, Robert Crandall of the Brookings Institute, estimates that 
accelerated deployment of broadband will generate up to $500 billion in 
economic growth annually.
  But the other side of this is that if we do not deploy broadband 
quickly, and other nations do, then we will lose the productivity edge 
that is so important. And unfortunately, that appears to be happening. 
A recent study by the Organization for Economic Cooperation and 
Development (OECD) found that the United States is now fourth in the 
world in broadband deployment, behind Korea, Canada, and Sweden. And 
others may pass us soon. While only 10 percent of U.S. households have 
broadband access, some 20 percent of homes in Canada have it, as do an 
astonishing 50 percent of homes in South Korea. Japan and a number of 
European countries have adopted very aggressive plans for broadband 
deployment involving laying optical fiber to every home. We should be 
very aware that if other countries do that--deploy fiber to all homes 
and businesses within their borders--and we continue to move very 
slowly even in the deployment of slower, current-generation broadband, 
those other nations will gain a huge economic advantage over us.
  I thus see the broadband tax credit as presenting us with a double 
opportunity. It would help provide much-needed economic growth. And it 
will also help ensure that rural and underserved Americans can fully 
participate in an increasingly digital world.
  Mr. SMITH. I wonder if I might interrupt my friend from West Virginia 
to make an observation. I think his point about competitive advantage 
is a very good one, and it is important for the Congress to remember 
that it applies not only internationally but also domestically. And it 
is an issue that is important to both sides of the aisle. For example, 
the Senate Republican High Tech Task Force--HTTF--has made the 
Broadband Tax Credit legislation a priority and a part of its policy 
agenda. This agenda states ``The Task Force understands that high speed 
Internet access has the power to transform how we use the Internet. 
Encouraging tax and regulatory policies that foster rapid, efficient, 
and competitive deployment of broadband and other important 
technologies to urban and rural areas will be crucial to ensure our 
economic growth and technological competitiveness.'' The fact is, those 
communities that do not have broadband will invariably be at the 
disadvantage to those that do. And unfortunately, the communities that 
often have little or no broadband service are rural and low-income 
areas. I know this matter is as important to my colleagues from 
Massachusetts and West Virginia as it is to me. The Senator from West 
Virginia and I both come from states with large rural areas, so our 
constituents likely face a similar situation. In the rural areas of 
Oregon, we have seen concrete evidence of the difference broadband 
makes in a community's economic vitality. For example, in La Grande, 
Oregon, in the eastern part of the State, gaining connection to a 
nearby fiber optic route in 1999 made it possible for the town to 
persuade ODS Health Plans to establish a call center/claims center 
there. By contrast, other communities, such as Madras and Crook County, 
report that they have both lost potential businesses because of lack of 
broadband infrastructure.

  The other thing I think we should mention is that in addition to 
economic benefits from this technology, there are other important 
societal benefits. For example, telemedicine. I'm happy to say that 
Oregon has been at the forefront of developing new and innovative 
telemedicine programs. In LaGrande, which, again, is fortunate to have 
a solid broadband infrastructure, it has been possible to develop a 
very good program for the provision of rural mental health services. 
The program is called RODEO NET and it's been making a difference in 
the lives of rural Oregonians for some time. And the telemedicine 
program of the Central Oregon Hospital Network makes it possible for 
doctors to consult with patients remotely and to receive the patients' 
radiologial images, sounds, records, and pharmacy information. But to 
do this well, you need broadband. In fact, the average data speed used 
by RODEO NET is 768 kilobits per second, more than twenty times the 
typical dial-up service in rural areas of the country. The problem is 
that few rural communities have a broadband connection. And that is 
something we must overcome. This technology can greatly improve the 
quality of life for rural residents, and we should not allow some of 
them to be deprived because they live in a more remote area.
  Mr. ROCKEFELLER. My friend is correct. I agree with him 
wholeheartedly. That is exactly the kind of application that will make 
a big difference to my constituents and his, and I want to do 
everything I can to make it widely available across the United States.
  Mr. KENNEDY. I wonder if my friend is a aware of the trans-Atlantic 
surgery that occurred last year, where a surgeon in New York operated 
on a patient in France?
  Mr. ROCKEFELLER. Yes, indeed As I recall, the New York doctor 
remotely controlled some kind of robotic arms there at the patient's 
location, and it came off without a hitch, I believe.
  Mr. KENNEDY. I think that is one of the most fascinating things I've 
ever seen, and as one who has worked for years on healthcare issues, it 
makes me even more committed to moving this broadband technology out 
across the country as quickly as possible, because one needs a very 
high bandwidth connection for those kinds of applications. You cannot 
do remote surgery over a narrow band connection.
  Mr. ROCKEFELLER. Exactly right, and I think that this shows the 
potential that exists if broadband becomes ubiquitously deployed in 
this country. When we can transmit massive amounts of data 
instantaneously, the applications are limited only by our imaginations.
  Mr. KERRY. I wonder if my friend from West Virginia would yield for a 
comment at this point?
  Mr. ROCKEFELLER. I would be happy to.

[[Page S3401]]

  Mr. KERRY. I thank the Senator, and my colleagues from Massachusetts 
and Oregon. As you know, I feel very strongly about this legislation. 
My staff and I spent a lot of time working with our former colleague 
Senator Moynihan, and with Senator Rockefeller and others back in 2000 
when we were putting this bill together. We put a lot of brainpower 
into this bill. We met with innumerable telecom companies and analysts 
and experts, working to craft a bill that provided real incentives, and 
doing so in a technology neutral manner. I do not care what the 
technology is, as long as it can provide broadband, it should receive 
the incentive. And I think this bill does that. It specifically 
anticipates copper wire, coaxial cable, terrestrial wireless and 
satellite technologies. If they can deliver true broadband services, at 
a measurable speed requirement, then they qualify for the credit. That 
is as it should be. It is the service we are after, not a specific kind 
of delivery system. So this bill sets the standards and lets all 
compete equally. All they have to do is meet the speeds, and they get 
the credit.
  For the current generation technologies, it targets rural and low-
income areas. Those are the areas where the Federal Communications 
Commission has told us there is a problem with current generation 
deployment. For the next generation technologies, it targets the entire 
country, with the exception of urban businesses. That is because, while 
next generation broadband exists and is being deployed aggressively in 
some Asian and European nations, it has scarcely been deployed at all 
in the United States.

  I have a number of reasons for caring about broadband deployment. One 
is that I think we cannot allow the ``digital divide'' to continue, and 
there is a digital divide with broadband deployment just as there is 
with computer access and dial-up Internet access. In fact, the digital 
divide with broadband deployment is almost certainly greater than with 
computers or dial-up. So as a matter of basic equity, I think we must 
take quick action to deploy broadband across the nation.
  I also care about this issue because it is crucial for our 
international competitiveness. As Senator Rockefeller mentioned 
earlier, the United States is falling behind in broadband deployment. 
There is little disputing that fact. While some seem unconcerned about 
that matter, I am very concerned about it. I think there is little 
doubt that a nation with ubiquitous broadband will be more efficient 
and productive than a nation without it. And, the fact is, other 
nations are starting to outspend us on broadband infrastructure. Sweden 
has set aside some $800 million on broadband deployment in rural areas 
of the country--a much smaller area than the United States, obviously. 
And they have already spent an undisclosed amount to build a fiber-to-
the-home system serving much of Stockholm, which is becoming a model 
for the rest of Europe. Now France is following suit. It recently 
announced that it will invest $1.5 billion on broadband infrastructure 
over the next five years, and much of it will probably be optical 
fiber, as in Sweden. In Japan, who knows how much the government is 
investing, but it is substantial. The investment is made through Nippon 
Telegraph and Telephone, which is supposedly an independent telephone 
company, but the majority ownership belongs to the Japanese government. 
In any case, NTT is in the middle of a huge fiber-to-the-home project 
all over the country, so the investment is clearly very large. And 
listen to this figure from South Korea. In Korea, the government is 
laying out some $15 billion to provide an optical fiber connection to 
84 percent of homes by 2005. This legislation would invest only $540 
million over 10 years. That is not a lot for a nation as large as the 
United States. But it is an important start, and we should pass it now 
and get the ball rolling.
  Finally, I feel strongly about this legislation because I think it is 
crucial for small business. As Chairman of the Senate Small Business 
Committee I have an obligation to look out for that sector, and it is 
something I am passionate about. I am a former small businessperson 
myself, and I know how difficult it can be for a small company to 
compete with larger enterprises. Broadband can make that easier by 
increasing the productivity of the small business and opening up new 
markets. The telecom analyst Scott Cleland--many of you know him from 
his testimony here on the Hill on various occasions--wrote a short 
piece last year on the importance of broadband to small businesses. 
Paraphrasing Mr. Cleland, he said this. First, that small businesses 
have less access to broadband because they tend to locate outside the 
high-rent urban business centers. It's those urban business centers, he 
says where broadband is most plentiful. The second point he makes, and 
this is very important, is that we as a nation are losing as a result 
of this situation because small businesses tend to be a very 
innovative, economy-driving force. If broadband were more widely 
available to small businesses, Cleland says, the U.S. would benefit 
economically.
  Those are a few of the reasons why I feel very strongly about this 
legislation, and I think it is imperative that we pass it this year and 
send it to the president for signature. I am delighted that we are 
having this discussion today, and I look forward to working with all of 
you to pass this bill at the earliest opportunity.
  Mr. ROCKEFELLER. I notice that we are joined on the floor by the 
distinguished Chairman and Ranking Member of the Finance Committee, two 
gentlemen who have a lot to say about which tax legislation passes this 
body. I am pleased that both are cosponsors of S. 88 and strong 
supporters of technology measures. I wonder if I could ask them their 
thoughts on the likelihood of passing the broadband credit this year.
  Mr. BAUCUS. I thank my friend from West Virginia, and I congratulate 
him on his leadership on this legislation. I agree that broadband 
technology is extremely important for this country. It will help ensure 
that our productivity remains high and that our citizens receive the 
best services modern telecommunications have to offer. I think some of 
these services that you have already discussed there today--
telemedicine, distance learning, and videoconferencing, for example--
will be absolutely life altering for many Americans. In rural areas, we 
will find even more ways to use broadband--televeterinary services, 
remote monitoring of crops, remote livestock auctions, etc. The fact is 
that when the underlying broadband infrastructure is there, you can do 
amazing things with relatively simple equipment--a digital video camera 
and a computer. And, taking a moment to indulge a point of home-state 
pride, I want to ask my colleagues if they know where this idea 
originated? I see my colleague from Montana, and he is smiling. He 
knows where it came from.

  Mr. BURNS. Of course. From the Montana legislature, that's where. 
We're very creative in Montana.
  Mr. BAUCUS. Exactly. The State of Montana enacted the first broadband 
credit in the nation in 1999. It was the brainchild of one of our 
public utility commissioners, Bob Rowe, and of state senator Mignon 
Waterman and others in the legislature. It was in effect for only two 
years, I believe, before being temporarily suspended, along with a 
number of other tax breaks, due to the State's budget shortfall. But in 
the short time it was in effect, it had very positive results. I want 
to quote from an article by Bob Rowe in one of our State newspapers, 
The Missoulian, in June 2001, in which Bob was describing the effect of 
the Montana broadband credit:

       The results are impressive. Dozens of projects were awarded 
     tax credits, most of them in rural Montana--places like 
     Circle, Crow Agency, Superior and Big Timber. Projects 
     included DSL, cable modems, and wireless. They also included 
     projects to provide `redundant' access that is critical to 
     many technology businesses in case service goes out.

  Now as you might surmise, Circle, Montana is not a very big place. It 
had 644 people in the last census. None of those communities mentioned 
in that article has more than 1,600 people. If a broadband credit can 
help bring broadband to rural communities like those, then it is a 
worthy piece of legislation. But the problem is, even when the Montana 
broadband credit is reinstated, it will not be enough to ensure 
broadband deployment to all communities in a State like Montana, so we 
will need Federal incentives, too. And

[[Page S3402]]

that is where measures like the federal broadband credit we are 
discussing now come in. It is important that we adopt this kind of 
incentive on a national basis, so that all communities may benefit from 
it. And along with the incentives that various States may enact, and 
along with other measures like low-interest loans and grants and so 
forth, we can really accelerate broadband deployment to all communities 
in the country.
  So I applaud the efforts of my friends who have worked so diligently 
on this bill. I stand with you and am committed to moving this bill 
this year. The support is clearly there, with 64 cosponsors in the 
Senate and 193 in the House. There aren't many bills with that much 
support. So I think the time has come. We need broadband, and we need 
it now, and I think this bill will help a great deal. We will work 
together to get it done this year.
  I want to turn to the Senator from Iowa, my Ranking Member on the 
Finance Committee. I used to be his Ranking Member when he was 
Chairman, and now the roles are reversed. But regardless of which of us 
is sitting in the Chairman's seat, we always confer with one another 
and work closely together, and I know he cares as much about getting 
broadband technology out to rural areas as I do. Senator Grassley, do 
you have any thoughts on this issue?
  Mr. GRASSLEY. I thank my Chairman, and I appreciate the opportunity 
to speak on this topic. I am pleased to be a cosponsor of Senator 
Rockefeller's bill, and I think it is important legislation. As you 
probably know, I have spent a fair number of hours on a farm in my 
life, and I can tell you that telecommunications are absolutely a 
crucial lifeline to rural areas, and we must ensure that rural areas of 
the country are not left behind as the state of the art evolves. I 
think that is what is happening now--the state of the art is evolving, 
and rural areas are being left behind. In urban areas, we have 
wonderful broadband systems where you can type at your computer and 
have a little TV screen going up in one corner. A lot of people here 
watch the Senate floor right from their computers as they work, which 
makes our work easier and more productive. In rural areas that kind of 
capability generally doesn't exist. And we just can't allow two 
different telecom standards for urban and rural areas. That would be 
like urban areas having telephones and rural areas not having 
telephones. What kind of country would we be if that were the case? So 
I think this legislation is very important.
  I want to point out one provision in this bill which will be 
extremely important to rural areas, and that is one involving telephone 
cooperatives. Anybody from a rural State knows the importance that 
coops play in making sure no one goes unserved. There are some places 
that are so scarcely populated that the big publicly-owned companies 
can't justify the investment to their shareholders. So who gets the job 
done in those places? By and large, it's the telephone coops. And they 
do a great job, and we need to make sure we support them in their 
effort. But, of course, telephone coops are tax exempt organizations. 
So the question arises, if they don't pay taxes, how will they benefit 
from a tax credit? But this bill has found a way to let them take 
advantage of the benefit. How so? Through the so-called, ``85-15'' 
rule. The tax code requires that at least 85 percent of a telephone 
coops' income be used to pay losses and expenses. So this bill exempts 
from income the amount of broadband credit a coop would get if it were 
a taxable company. That encourages coops to make broadband investments 
because, if they do, then they will get help meeting the 85 percent 
rule. I think that makes a lot of sense and is good tax policy. It both 
encourages a crucial infrastructure investment, and simplifies the tax 
law for coops, which is an importannt thing to do anytime we can.

  So with that, just let me say again that I support this legislation, 
and I will work with Chairman Baucus and Senator Rockefeller and the 
other members here today to pass it.
  Mr. BURNS. I wonder if I might very briefly add a couple of points at 
this juncture. I wanted to join my colleagues here on the floor today 
because I feel strongly about this measure. As Senator Baucus said 
earlier, this whole idea started in Montana, and we've seen the kind of 
effect it can have there, so I feel confident that a federal broadband 
credit can have a similar effect in other areas of the country. The 
other point I wanted to make goes back to Senator Grassley's discussion 
of farming applications. I've spent a fair amount of time in 
agricultural pursuits myself, and if there is any doubt how 
agricultural organizations feel about broadband, you should take a look 
at the farm groups that have endorsed this bill. The American Farm 
Bureau, American Agri-Women, National Cattlemens' Beef Association, 
National Corn Growers Association, National Council of Farmer 
Cooperatives, National Pork Producers Council, National Sorghum 
Producers Association, National Wheat Growers Association, North 
American Export Grain Association, Rice Millers' Association, 
California Cotton Growers Association, California Cotton Ginners 
Association, Western Growers Association, U.S. Rice Producers' Group. 
The list goes on and on. Anyone who thinks farmers don't care about 
technology should spend some time on a modern farm, and what you will 
learn in that American agriculture is one of the most innovative 
industries in the world. Let me give you an example. Deere and Company, 
the farm equipment maker, is also a supporter of this legislation. And 
you may think at first, ``Why do they care? They just make tractors.'' 
But when you talk to them, you learn that the tractor of tomorrow--
indeed of today--has a lot of high-tech equipment on board that, as it 
drives through the fields, gathers information on plant conditions and 
soil conditions and moisture content and so forth. And that is 
incredibly valuable information to a farming operation. But to really 
use that information, you need a broadband connection to send it from 
the tractor to, say, a plant specialist a hundred miles away. Without 
that broadband connection, it will take a very long time to transmit 
the data, which makes it a lot less useful. So we need to take action 
now to get broadband networks built out all over the country, including 
those little places like Circle and Superior and Big Timber and Crow 
Agency and thousands of communities like them around the United States. 
And this bill is going to help do that, so I a feel very strongly that 
we need to pass it at the earliest opportunity.
  Mr. JOHNSON. I would like to add a brief comment on this topic, which 
is of critical importance to my State of South Dakota. My colleagues 
have all spoken eloquently about the role of broadband deployment to 
our Nation, and the special importance of ensuring that our rural areas 
have equal access. I think we all agree that the widespread 
availability of broadband infrastructure is absolutely crucial to the 
future of America. Throughout history, we have found ourselves at 
critical junctures, when the Federal Government has needed to step in 
and help build an intrastructure system that is national in scope. The 
transcontinental railroad. Rural electrification. The Interstate 
highway system. None of those would have occurred without help from the 
Federal Government. That, in my opinion, is one of the most important 
aspects of our job--to know when it is time for the Government to step 
in and facilitate the building of something big, something that will 
benefit the nation as a whole and make us a stronger nation. The 
transport of large amounts of information is no less important today 
than the transport of large amounts of goods was a few decades ago. The 
physical transport of goods is still necessary, and probably always 
will be. But the transport of information? Why should we have to 
transport people just to transport information? If a supplier can meet 
with his customer without driving across town or getting on an 
airplane, then that is better. If a rural American can meet with the 
urban medical specialist without driving or flying to the city, then 
that is better. If a rancher can show his cattle for sale to a distant 
buyer without the expense of transporting them to a sale barn, then 
that is better. All of those things are theoretically possible today, 
but they are possible in fact only to a few of our citizens. The 
disturbing thing is, that other nations are moving ahead of us in 
deploying broadband technology, as my colleagues have already pointed

[[Page S3403]]

out. I believe that if the United States is to continue to lead the 
world economically, it must invest in broadband infrastructure.

  That's why I will continue to fight hard to pass this legislation. I 
have written the President about it, I have written the majority leader 
about it, I have spoken to my colleagues on the Finance Committee about 
it, and now I want to address all of my Senate colleagues about this 
bill. The fact is, we need this legislation to push broadband out to 
remote areas of the country. There are areas where the market will not 
take broadband for many years, if ever. But that is where this 
legislation is targeted--those very areas the market is leaving behind. 
We need this legislation to ensure, first of all, that rural areas are 
not left behind, and secondly that we do not fall behind as a nation. 
We must not continue to fall behind Korea, Canada, Sweden, Japan, 
Singapore and others, because if we do, then they will be able to work 
faster and more productively than we can work, and it is productivity 
which has been our hallmark, our saving grace, our competitive edge for 
years. The Internet was an American invention, as are the broadband 
technologies that accelerate its use. We must not let others surpass us 
in our own technology, simply through inaction. I urge my colleagues to 
take up and pass this very crucial legislation this year--at the 
earliest opportunity. It is very important that we do so, and I pledge 
my support for it here today.
  Mr. ROCKEFELLER. I thank the Senator and welcome his support. I 
believe the Senator from New York wanted to join in the discussion, as 
well.
  Mrs. CLINTON. I thank my friend from West Virginia. As an original 
co-sponsor on Senator Rockefeller's broadband tax credit bill and a 
supporter of the amendment offered on the energy bill, and having 
introduced my own bills to enhance broadband deployment in Upstate New 
York and around the country, I join my colleagues from both sides of 
the aisle today to express strong support for legislation stimulating 
broadband infrastructure deployment and demand for broadband services.
  As we all know, our Nation's economy has suffered a slowdown of 
staggering proportions in the last year. Investment has slowed, jobs 
have been lost, and for many companies revenues continue to decline. 
Few sectors of our economy have been as dramatically affected as the 
telecommunications and high-tech industry, with job loss estimates in 
the industry exceeding more than a quarter-million in the past year 
alone. Of particular concern to me, Upstate New York, like rural areas 
across America, has continued to face obstacles to full engagement in 
the new knowledge-based economy. Prior to the recent downturn, the 
economic growth of the last decade left behind many of our Nation's 
rural areas--like Upstate New York with its highly educated 
population--that remain disconnected from major markets. Studies have 
shown that New York lags behind many states when it comes to Internet 
connections and usage that are essential to commerce and communications 
in this new economy.
  To be sure, communications technologies are important not only for 
economic reasons. My State of New York suffered more than any other 
from the devastating attacks of September 11th. On that day, emergency 
calls, communications between loved ones, and demand for reliable 
information demonstrated so clearly our dependence on--and the need 
for--telecommunications technologies. I am extremely proud of the 
efforts that were made by our rescue personnel, utilities, and others 
to restore the communications infrastructure that was so damaged by the 
terrorist activities. Those tragic events underscored the importance of 
redundant telecommunications systems to enable us to stay connected in 
times of national emergency.
  The message here is that broadband deployment and its uses are key 
for the continuing economic development and growth of our Nation. I 
recently offered a sense-of-the-Senate, which was adopted on the FY 
2003 Budget Resolution passed out of the Budget Committee, that 
highlights the needs for investments in broadband technology to spur 
development and job creation in rural and underserved areas. Mr. 
President, I ask that it be included in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  Sense of the Senate Regarding Broadband Capabilities in Underserved 
                                 Areas

       (a) Findings.--The Senate finds in the following:
       (1) In many parts of the United States, segments of large 
     cities, smaller cities, and rural areas are experiencing 
     population loss and low job growth that hurts the surrounding 
     communities.
       (2) The availability and use of broadband 
     telecommunications services and infrastructure in rural and 
     other parts of America is critical to economic development, 
     job creation, and new services such as distance learning, 
     telework capabilities and telemedicine.
       (3) Existing broadband technology cannot be deployed or is 
     underutilized in many rural and other areas, due in part to 
     technical limitations or the cost of deployment relative to 
     the available market.
       (4) Today's small and medium-sized businesses need an 
     extension program that provides access to cutting edge 
     technology.
       (5) There is a need to create partnerships to reduce the 
     time it takes for new developments in university and other 
     laboratories to reach the manufacturing floor and to help 
     small and medium-sized businesses transform their innovations 
     into jobs.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that the Congress should:
       (1) facilitate the deployment of and demand for broadband 
     telecommunications networks and capabilities (including 
     wireless and satellite networks and capabilities) in rural 
     and underserved areas,
       (2) encourage the adoption of advanced technologies by 
     small and medium-sized businesses to improve productivity, 
     and to promote regional partnerships between educational 
     institutions and businesses to develop such technologies in 
     the surrounding areas, and
       (3) invest in research to identify and address barriers to 
     increased availability and use of broadband 
     telecommunications services in rural and underserved areas.

  Mrs. CLINTON. The broadband tax credit is a critical component of 
this economic development plan, in order to get broadband to ``the last 
mile''--to the households, schools, businesses, local governments and 
many others that stand most to gain from its deployment and, of course, 
the jobs and services that are sure to follow.
  Ms. SNOWE. I am delighted to have this opportunity to join my 
colleagues in discussing the importance of the broadband tax credit 
legislation. We have worked on this bill since mid-2000, and we need to 
get it passed this year.
  I am particularly pleased to have worked with Senator Rockefeller on 
this issue. He and I go way back on technology matters. We worked side 
by side to ensure that all our classrooms and public libraries are 
connected to the Internet and modern technology through the E-rate, and 
this successful program is beginning its fifth year of funding.
  Just as the E-rate continues to ensure that our Nation's schools and 
libraries are not divided between technological haves and have nots, we 
must ensure that all of our Nation's homes and businesses--in both 
rural and urban areas--have access to broadband services. Because 
although dial-up services are good for sending e-mail, sharing short 
documents, and browsing the web slowly, you need broadband services if 
you need to receive information quickly or send an item that is data-
intensive, such as photographs, graphics, or lengthy documents.
  While broadband is already being deployed in rural States, such as 
mine, I believe it is imperative that we seek to accelerate the rate of 
this deployment. Because where are the homes and small businesses 
without broadband service? That's easy--in rural and low-income areas. 
And that is what this bill is designed to cover: the rural and low-
income areas where broadband generally is not already available. 
Furthermore, it is designed to help us move to the next generation of 
broadband that some countries are already rolling out.
  The bottom line is that there are times when it makes sense to help 
the market deploy technology more quickly and this is one of those 
times. Why? Because the Government can play an important role in 
ensuring that all our citizens have access to basic infrastructure, 
just as it ensured universal access to telephone service in the 1930s.
  I will not repeat what my other colleagues have said about the United 
States falling behind in broadband infrastructure, but it is a fact and 
it is something we cannot allow. We must engage on this issue and we 
must do it now. As the lead Republican cosponsor

[[Page S3404]]

of the legislation, I urge the passage of the broadband tax credit 
legislation as one way to address this matter, and believe it should be 
done this year. While there are a number of other ideas on the table 
concerning broadband deployment, this is one that is ready to go, and 
we should not wait any longer. Accordingly, I urge my colleagues to 
support moving this incentive as part of the next available tax package 
moving through the Congress.

  Mr. SMITH. I would like to return to the issue of exactly how we move 
this year. I think it is the most substantial broadband initiative with 
a real chance of passing in the near future, and I think we should be 
very specific about how we are going to accomplish it. It is now mid-
April, the number of legislative days remaining in this Congress are 
dwindling, and the available tax vehicles would seem to be limited for 
the rest of the year.
  Mr. KENNEDY. I couldn't agree more. As I said earlier, I think this 
would be a very good addition to the energy bill because it has clear 
energy savings implications. If that proves not to be possible, I think 
it should be included in any other tax bill that comes through this 
year. Passing the broadband tax credit this year should be a priority 
for the Senate and we must ensure its passage at our earliest 
opportunity.
  Mr. ROCKEFELLER. Absolutely. I am with you 100 percent. We have to 
get this done, and we have to get it done this year. I note that the 
majority leader has joined us on the floor and I wonder if we might 
impose on him to give us his views on the prospects for the broadband 
tax credit.
  Mr. DASCHLE. I thank the Senator for his leadership on the broadband 
tax credit, and I thank all of our colleagues who have expressed their 
support for this measure today. As you know, I am a cosponsor of 
Senator Rockefeller's bill, S. 88, and share the strong support for 
this bill expressed by our colleagues today.
  We have made this a centerpiece of the Democratic high technology 
agenda. We believe broadband deployment is key to the continued 
economic growth of the entire Nation, and is particularly critical in 
rural areas that studies have shown too often lag behind their urban 
counterparts. This bill addresses that issue head-on by giving special 
incentives to rural deployment. This measure is one of a number of 
solutions that have been proposed that will prove effective in 
achieving universal availability of the most advanced 
telecommunications technology.
  I look forward to working with the Senator from West Virginia, the 
distinguished Chairman and Ranking Member of the Finance Committee, and 
all of our colleagues who have spoken out so forcefully today. I hear 
you and share your support for this proposal. Given the large number of 
cosponsors, it is clear that the broadband credit can win approval in 
this Chamber. So I would say to my colleagues that I want to move the 
bill at the earliest opportunity.
  Mr. ROCKEFELLER. We appreciate the Leader's interest and support. 
With that support, and that of all our colleagues who have joined us 
today, I feel confident that we will succeed in getting this bill 
enacted into law this year. And I am excited at that prospect, because 
I think it will make a big difference in moving broadband both to 
remote and underserved areas of the Nation, and also in moving it to 
the next generation. That will be an outstanding result, and a great 
benefit for the Nation.


                       energy policy act of 2002

  Mr. NICKLES. I would like to engage in a brief discussion with my 
colleague from Alaska concerning an important provision that is missing 
from the electricity title of this bill. Would the ranking member of 
the Energy and Natural Resources Committee, Senator Murkowski, agree 
that it is important to provide a level playing field for competitors 
in the interstate wholesale electricity market?
  Mr. MURKOWSKI. Yes, I agree with my colleague.
  Mr. NICKLES. Is today's interstate wholesale electricity market a 
level playing field, in which all competitors are subject to the same 
rules?
  Mr. MURKOWSKI. No. Publicly-owned utilities are not subject to the 
same oversight of their rates and other activities related to sales of 
bulk electricity in interstate commerce as investor-owned companies.
  Mr. NICKLES. I see nothing in the current language of the electricity 
title of this bill to rectify this disparate treatment. This seems 
unfair, and contrary to our policy of promoting competitive markets in 
interstate electricity sales. Would the Senator from Alaska agree?
  Mr. MURKOWSKI. Yes, I think that all utilities who substantially 
participate in the interstate wholesale electric power market should be 
under the same regulatory regime, and subject to the same oversight by 
the same regulator. But I also want to make clear that municipally-
owned and cooperatively-owned utilities that are too small or not 
selling in interstate commerce, such as those in Alaska, should not be 
subject to FERC regulation. I would oppose any attempt to extend such 
Federal regulation to these entities or their activities.
  Mr. NICKLES. I thank the Senator for that viewpoint. Do not 
misinterpret what we are saying. This is not about ``spreading the 
pain'' around to everybody. Rather, what we are saying is that if a 
municipally-owned or cooperatively-owned utility makes a strategic 
business decision to go into the competitive interstate bulk power 
market to earn profits, then it ought to play by the same rules as 
everybody else. And once they enter that market, it is important that 
the market competition takes place on a level playing field, or else 
competition will be diminished and consumers will suffer. So I would 
like to go forward, in conference, and work with my friend, Senator 
Murkowski, and others of like mind, to correct this situation and 
ensure equal treatment for all who chose to compete in the interstate 
wholesale electricity market.
  Mr. MURKOWSKI. I look forward to working with the Senator from 
Oklahoma on this issue as this bill moves to conference.


                 energy efficient commercial buildings

  Mr. GRAHAM. Mr. President, Section 2105 of this legislation, the 
section providing a tax deduction for construction of energy efficient 
commercial buildings, does not list the specific building components 
that will qualify the building. This is different from Section 2103, 
pertaining to energy efficient residential property, in which items 
contributing to building efficiency are listed in some detail. My 
concern is that certain energy efficiency improvements, if not 
specifically included, may not qualify for the deduction under Section 
2105. I was wondering if the Senator from Montana could clarify for me 
the reasons behind the differences between these two sections.
  Mr. BAUCUS. The Senator from Florida asks a reasonable question, but 
he need not be concerned about the differences between these two 
sections. The commercial building deduction is constructed as a 
performance-based incentive for energy efficiency. The bill does not 
specify which materials should be used because different buildings may 
require different components to meet efficiency standards. Construction 
need not adhere to a specific list of energy efficient components.
  Mr. GRAHAM. Let me ask then about a specific building component so 
that I can be certain I understand what the Senator has explained. 
Building insulation is not referenced in Section 2105, however it is 
referenced in Section 2103. Nevertheless, expenditures for insulation 
in a commercial building will qualify for the deduction so long as it 
meets the energy efficiency requirements laid out in this measure. Is 
that accurate?
  Mr. BAUCUS. The Senator is correct. In fact, the efficiency 
requirements laid out in this legislation essentially require that 
building construction include a combination of highly energy efficient 
property. Energy efficient insulation would almost certainly be 
included among these components.
  Mr. GRAHAM. The origin of my concerns regarding the enumeration of 
specific components stems from the language used to define energy 
efficient commercial building property expenditures at the beginning of 
Section 2105. It indicates that in order to qualify, energy efficient 
property must be eligible for treatment as depreciable property under 
section 167 of the tax code. There are many building components, like 
insulation, not specifically

[[Page S3405]]

referenced in section 167. Can the Senator from Montana confirm that 
the intention of this measure is not to exclude these components from 
eligibility for the energy efficient commercial buildings deduction?
  Mr. BAUCUS. I can confirm for the Senator from Florida that the 
intention of this provision is to include all those components that 
would produce levels of energy efficiency sufficient to meet the 
standard laid out by this amendment.
  Mr. GRAHAM. I thank the Senator for his clarification and his time.


   impact of reformulated fuels provisions and need for appropriate 
 discretion for adjustments to required baselines for anti-backsliding 
                              requirements

  Mr. CORZINE. Mr. President, I rise today to bring to the attention of 
my colleagues an important issue that relates to provisions in the 
Energy bill dealing with reformulated gasoline. After a few brief 
introductory remarks, I would like to engage in a colloquy with my 
colleague and friend, the Chairman of the Committee on Environment and 
Public Works, in order to inform and clarify the legislative record on 
the matters I am about to discuss.
  The provisions contained in Subtitle C of Title VIII of the Energy 
bill deal with motor fuels. As has been discussed on this floor on 
preceding days, these provisions deal with a number of issues, 
including a ban on the use of MTBE and requirements for use of ethanol 
in reformulated gasoline. I would like to speak today on another issue 
in this subtitle that has received less attention during our debate on 
these issues, but which could have a profound and detrimental effect on 
the supply of gasoline in New Jersey and elsewhere in the Northeast, by 
affecting an important supplier to this market.
  Section 834 of Subtitle C eliminates the oxygen content requirements 
for reformulated gasoline. It is necessary to do this since the 
subtitle, in Section 833, Subsection (c), otherwise bans the use of 
MTBE, the oxygenate most commonly used to meet the oxygen content 
requirements of the Clean Air Act. And while we have all become aware 
of the groundwater contamination problems caused by leaks of gasoline 
containing MTBE, it is important to understand for the situation I am 
about to discuss that MTBE does provide significant benefits in regard 
to emissions of toxic air pollutants under current EPA models. Indeed, 
overall toxic air emissions reductions achieved through the use of 
reformulated gasoline substantially exceeded the minimum requirements 
set by the Clean Air Act Amendments of 1990. I think we all agree with 
the Blue Ribbon Panel's recommendation, that with or without MTBE, it 
remains an important goal to maintain the real world emissions benefits 
derived from the use of reformulated gasoline.
  So when the authors of Subtitle C eliminated the oxygen requirement 
for reformulated fuel and banned the use of MTBE, they also wanted to 
be sure that the toxic air pollutant reductions achieved from the use 
of reformulated gasoline were maintained. Thus, they included the so-
called `anti-backsliding' provisions found in subsection (b) of Section 
834. Among other things, subsection (b) will require the EPA 
Administrator to . . . establish, for each refinery or importer . . . 
standards for toxic air pollutants from use of the reformulated 
gasoline produced and distributed by the refiner or importer that 
maintain the reduction of the average annual aggregate emissions of 
toxic air pollutants for reformulated gasoline produced or distributed 
by the refiner or importer during calendar years 1999 and 2000.
  This provision thus requires EPA to establish, for each refinery, the 
amount of toxic air emissions from the gasoline based on 1999 and 2000 
data, and then establish that as a ``baseline,'' or maximum level of 
toxic air emissions from the gasoline produced by that refinery.

  What this provision doesn't do, is tell the refiner how to maintain 
the baseline once MTBE is eliminated, it just has to do it. In most 
cases, refineries can meet the gap in toxic air emissions performance--
caused by the ban on MTBE--simply by doing little more than complying 
with an already-existing separate regulation that requires them to 
reduce the levels of sulfur in the gasoline. Removing sulfur improves 
the toxic air emissions performance of the gasoline as calculated by 
EPA. Or the refinery could invest in improved extraction technology to 
remove directly some of the toxics--for example, benzene. Or a larger, 
multi facility refiner could trade between its refineries the credits 
for emissions of toxic air pollutants authorized by the Subsection.
  So, once the EPA Administrator establishes the baseline for a 
refinery, most refiners have options that are available to ensure that 
their refineries do not `backslide' on the emissions of toxic air 
pollutants from gasoline. For example, refiners that had high sulfur 
levels during the base period will have a relatively easy time 
complying with this requirement for their reformulated gasoline, 
primarily because they must desulfurize gasoline by 2004-2005 under 
already existing rules, and this step will substantially reduce toxic 
air emissions, thus offsetting the increases in calculated emissions 
from eliminating MTBE.
  But what happens under the Energy bill to the refiner who had 
voluntarily taken steps, not required by any regulation, to incorporate 
state-of-the-art benzene extraction technology and also removed a very 
large amount of the sulfur from its gasoline before the base period 
that the EPA will use to establish its baseline? That refiner will be 
given a baseline that is far tougher than virtually any other refiner. 
It is so tough, Mr. President, that when MTBE is banned, as required by 
the bill, it likely will not be able to make up the lost benefit MTBE 
provides--substantially lowering modeled emissions of air toxic 
pollutants--by lowering sulfur to required levels or taking any other 
actions that will allow it to maintain that baseline performance level.
  This is exactly the situation facing the Amerada Hess Corporation, a 
corporate constituent in New Jersey that is an important supplier of 
reformulated gasoline. At its Port Reading, New Jersey refining 
facility, Hess produces 35-50 thousand barrels per day of reformulated 
gasoline that is supplied to New Jersey, New York, and Connecticut. 
Hess also supplies another 40-60 thousand barrels per day of 
reformulated gasoline into the northeast market from HOVENSA, a 
refinery it partly owns on St. Croix in the US Virgin Islands. Both 
facilities, the only two under the Hess umbrella, have long produced 
very clean gasoline--taken together, the gasoline produced by these 
refineries has almost 60 percent less sulfur and 35 percent less 
benzene than the refinery industry average.
  Once the EPA establishes baselines for these two refineries, and MTBE 
comes out of the gasoline, they will have no realistic options to 
maintain the baseline--exactly because the gasoline was already so 
clean. They can put in ethanol, but that does not have the same level 
of positive effect on toxic air emissions, compared to MTBE. They will 
lower sulfur further to 30 ppm, but in contrast to most other 
refineries, this will not be enough to maintain the baseline, since the 
gasoline was already low in sulfur before and during the relevant base 
period. Benzene is already at very low levels, and further reductions 
are not reasonably achievable.

  I will include in the record tables of data provided to me by Amerada 
Hess that illustrates this result. They could buy credits, if they were 
available, but this would allow refiners who did not take early action 
to clean up gasoline to obtain a competitive advantage.
  The only reasonable way to address this situation, Mr. President--and 
avoid penalizing a refiner by virtue of the fact that it took early 
action to clean its gasoline before it was required to do so--is to 
ensure that the EPA Administrator has the ability and discretion to 
review situations like this, and when necessary and appropriate, make 
adjustments to the refinery-specific baselines.
  This notion of providing limited, necessary baseline adjustments is 
not unprecedented. Indeed, EPA provided this form of relief just last 
year on nearly identical facts. In that case, it was implementing the 
Mobile Source Air Toxics, or MSAT, rule. That rule sets maximum levels 
of toxic air emissions from gasoline from baselines established using 
data from the base years, 1998, 1999, and 2000. It is thus nearly 
identical to the anti-backsliding provisions of Subtitle C--it only 
differed in

[[Page S3406]]

that it covered all fuel, conventional and reformulated, and looked to 
data from one more base year, 1998.
  In that case, Mr. President, Hess faced the same situation in which 
it finds itself in this instance for its gasoline supplies form Port 
Reading and HOVENSA, except that the reason MTBE was going to be 
unavailable on a going forward basis was state-enacted bans on its use 
in New York and Connecticut. In this case, it is federal law that will 
ban the use of MTBE. So the result in the MSAT rule situation should be 
the same when the provisions of this bill go into effect. In the case 
of the MSAT rule, EPA agreed that once the state MTBE bans went into 
effect, EPA would make an appropriate adjustment to the baselines for 
the Port Reading and St. Croix refineries to reflect their unique 
situation.
  The adjustment was based on EPA's finding that the reformulated 
gasoline which these refineries produce significantly outperforms the 
industry average for toxic air emissions, and that MTBE bans would 
affect the modeled toxics performance. The purpose of this relief, 
quite simply, was to level the playing field, so that a refiner that 
took steps to clean up its gasoline early could continue to supply 
gasoline when MTBE is eliminated. I will enter into the Record a copy 
of the letters from EPA laying out the details of EPA's resolution of 
this problem.
  My purpose today is therefore twofold. I first wanted to bring this 
matter to the attention of the Senate. It would be a travesty if we 
were to enact legislation that penalized parties for taking early 
action to improve the environmental performance of their product. And I 
should hasten to add here, Mr. President, that based on every 
conversation I or my staff have had on this matter, we have been 
assured that this was an unintended consequence. So my second purpose, 
Mr. President, is to ensure that the record on this legislation 
provides sufficient guidance to EPA in order that it can address this 
matter effectively.
  For these reasons, I would like to engage the Chairman of the 
Environment and Public Works Committee, the Senator from Vermont, in a 
colloquy on this issue.
  As discussed in my remarks, EPA had the requisite authority and 
discretion under the MSAT rule to make limited, appropriate adjustments 
to refinery-specific baselines for toxic air emissions based on unique 
circumstances such as those facing Amerada Hess. Would you agree that 
EPA would enjoy a similar level of discretion under the anti-
backsliding provisions of Subtitle C of Title VIII if and when the 
Energy bill, or any other bill that carries similar provisions, becomes 
law?
  Mr. JEFFORDS. I appreciate the Senator from New Jersey bringing this 
matter forward at this time. As he noted, the last thing we want to do 
in this statute is to penalize--advertently or inadvertently--those 
parties that take early action voluntarily to improve the environmental 
performance and public health benefits of the products they produce, in 
this case, reformulated gasoline.
  Based on the facts that the Senator has presented and as they have 
been presented to me and my staff, it appears that Amerada Hess and 
HOVENSA could be disadvantaged if the anti-backsliding provisions of 
the bill were implemented without consideration of the factors that you 
have outlined. And, this situation could lead to a less competitive 
market in the Northeast, potentially driving up prices.
  It seems reasonable that refineries such as you have described, which 
have worked out an understanding of an appropriate adjustment with EPA 
in the context of the implementation of rule on mobile sources of air 
toxics, should be able to proceed in a similar fashion when the 
provisions relative to reformulated fuels--particularly, the anti-
backsliding provisions in Section 834--are implemented. EPA has 
informed my staff that they would interpret the provisions in question 
as providing them with adequate authority to do so. It would seem 
logical that such authority would be used as it was in the case of the 
rule, regardless of whether the situation is a state ban or a Federal 
ban on MTBE.
  Mr. CORZINE. I very much appreciate the Chairman's answer, and 
believe that EPA should be able to retain and incorporate existing 
baseline adjustments granted under the MSAT rule into the baselines 
that will be established under Section 834(b).
  I wonder whether the Chairman could answer another question in this 
regard. If the MTBE ban proposed in S. 517 takes effect before or 
supersedes the implementation of existing state MTBE bans, is S. 517 
intended to negate baseline adjustments that refer to or are based upon 
those state laws?
  Mr. JEFFORDS. As the Senator knows, there is no Federal preemption of 
State law contained in the Subtitle C. In fact, Section 833 of the 
bill, in Subsection (d), states specifically that enactment of the 
federal MTBE ban contained in the preceding subsection will ``have no 
effect on the law in effect on the day before the date of enactment if 
this Act regarding the authority of States to limit the use of [MTBE] 
in motor vehicle fuel.'' And Section 834, in which the anti-backsliding 
provisions are contained, includes a savings clause (Subsection (d)) 
that states ``[n]othing in this section is intended to affect or 
prejudice any legal claims or actions with respect to regulations 
promulgated by the Administrator prior to enactment of this Act 
regarding emissions of toxic air pollutants from motor vehicles.''

  Taken together, these provisions are a clear indication that it is 
the intent of the Senate not to preempt the state laws that were the 
cause for the baseline adjustment granted under the MSAT rule or to 
affect any legal claims or actions related to the MSAT regulations, 
including the sections in that rule providing for baseline adjustments. 
Furthermore, as I observed in my prior response, fairness would dictate 
that the result should be the same whether MTBE is banned as a result 
of this bill or as a result of state law.
  Mr. CORZINE. I again thank the distinguished chairman of the 
Environment and Public Works Committee for his comments and perspective 
on this issue, as this is a very important issue for my State and 
region.
  Mr. President, New Jersey is the largest user of reformulated 
gasoline in the Northeast. Hess--through the Port Reading and Virgin 
Islands refineries--supplies about 13 percent of the reformulated 
gasoline used in the New York/New Jersey/Connecticut region. Production 
from Hess's Port Reading refining facility alone translates to 14-20 
percent of New Jersey's total gasoline consumption. My office is 
advised that if S. 517 does not allow EPA to retain existing MSAT 
baseline adjustments or grant new ones, it will constrict the ability 
of its Virgin Islands joint venture facility to manufacture 
reformulated gasoline and may cause Port Reading to close. The 
reformulated gasoline supplied by these two refineries, as I noted 
previously, today has almost 60 percent less sulfur and 35 percent less 
benzene than the refinery industry average and would be replaced by 
other suppliers, who would supply less clean gasoline on average. 
Moreover, New Jersey could lose a major employer in the form of Port 
Reading which, in addition to producing clean gasoline, has been 
identified as among the top environmental performers for refineries in 
the country in Environmental Defense's most recent rankings.
  As a matter of sound environmental policy, refiners who voluntarily 
cleaned up gasoline by removing dirtier components before the baseline 
period should certainly not be put in a worse position than refiners 
who waited until regulations forced them to reduce toxic air emissions. 
Nor should such refiners reap a windfall under S. 517 by having clean 
refiners end up buying credits from them to stay in business.
  I greatly appreciate the interest my Chairman on the Environment and 
Public Works Committee has shown on this issue, and hope we can work 
together, along with other interested Senators, to remedy this 
situation on this and any future legislation that may carry similar 
provisions.


                       Private Use Clarification

  Mr. KYL. I would like to engage in a colloquy with the chairman of 
the Senate Finance Committee in order to discuss an issue that I know 
the chairman, the ranking member of the committee and their staffs have 
been attempting to address for some time. Specifically, we all know 
that the electric industry is undergoing significant

[[Page S3407]]

change However, certain tax provisions, drafted long ago, appear to 
obstruct the current restructuring of the industry. The Senate Finance 
Committee has attempted to better understand these tax and non-tax 
conflicts in the rapidly changing national energy environment by 
directing the Department of the Treasury to conduct an ongoing study of 
the issue and report back to the tax-writing committees on an annual 
basis with legislative recommendations. In addition, the manager's 
amendment to the tax title to the energy bill before us on the floor 
has provisions that will facilitate restructuring for cooperatives and 
investor-owned utilities.
  Public power utilities need to know how they can operate in this new 
environment. This guidance is especially critical given the lack of a 
legislative solution to modernize Federal ``private use'' tax laws 
passed in the mid-1980s. I rise today to suggest two mechanisms that 
will provide very limited, but necessary, guidance for public power 
utilities. I believe both of these mechanisms can be addressed either 
through administrative guidance or legislation.
  First, the report of the Senate Finance Committee urges the 
Department of the Treasury to finalize as quickly as possible 
regulations relating to the definition of private activity bond for 
public power entities. In adopting these regulations, the committee 
hopes that the Treasury will use its regulatory authority to provide 
flexibility to foster the participation of public power in a 
restructured electric industry. I believe that finalization of the 
regulations is important.
  I further believe that flexibility may be provided in the regulations 
by, among other measures, lengthening the term of the short-term output 
contract exception to 5 years; providing specific, more flexible 
guidelines for utilities to replace load lost from participating in the 
open access of their transmission facilities; and allowing the advance 
refunding of bonds used to finance transmission facilities used in open 
access or regional transmission organizations. I would hope that the 
legislative history to the tax title to the energy bill would urge the 
Treasury Department to consider adopting these items to the greatest 
extent possible when the private activity regulations are finalized.
  Second, public power utilities historically finance aggregate 
generation, transmission and distribution needs with tax-exempt debt 
and electric system revenues, equity. Moreover, these construction 
needs are often financed on a system, versus a project, basis. This 
means that each dollar of borrowing is not tied to a dollar investment 
in specific projects. This is a common utility practice, but one that 
complicates the ability to manage private use limitations in the 
current environment.
  Current law does not provide specific guidance in this area, though 
the Internal Revenue Service has issued individual private letter 
rulings to entities other than utilities that have sought clarification 
on the ability to allocate private business use to equity. 
Unfortunately, the private letter ruling process can be lengthy, 
administratively cumbersome and not viable were a large number of 
utilities to pursue this remedy. A modest solution to this issue would 
be to provide that the portion of a public power utility's system that 
is financed with amounts other than tax exempt-debt can be used without 
regard to private use limitations. Public power systems then have a 
strong incentive to finance projects with equity or taxable debt rather 
than tax-exempt bonds.
  Specifically, language to provide broad guidance in this area could 
state:

       If, after first allocating private business use contractual 
     sales to the portion of electric output facilities financed 
     with equity or taxable debt, the remaining amount of such 
     contracts, if any, when allocated to the tax exempt bond-
     financed portion of the facilities would not cause the 
     private business use test to be exceeded, then the private 
     business use limitations are deemed not to have been 
     exceeded.

  I have been informed by the Treasury Department that they believe 
that they have the authority to address this issue and are working on 
published guidance in this area. Unfortunately, the Treasury and the 
Internal Revenue Service have been working on comprehensive allocation 
regulations for some time and guidance is needed now. Therefore, I 
would again hope that whatever legislative history that emerges with 
respect to the tax title to the energy recognize the ability of a 
public power system to allocate its equity to investments in as 
flexible a manner as possible.
  I hasten to add that these two suggestions do not provide a 
comprehensive fix to the numerous technical private use problems that 
require the attention of this body. However, it will provide necessary 
guidance to public power utilities at a time when managing private use 
has become increasingly challenging due to industry events. Moreover, 
they will not upset the competitive balance in the industry.
  I ask the distinguished Chairman of the Committee on Finance if I can 
count on him to support language with respect to these two items in any 
report that this body or the conference may issue.
  Mr. BAUCUS. The Senator from Arizona can count on my support in 
ensuring that guidance with respect to the finalization of regulations 
relating to the definition of private activity bonds for public power 
entities is provided at the earliest opportunity and most certainly in 
conference. Regarding the ability to allocate private business use to 
equity, I look forward to working with my colleague to fashion an 
appropriate remedy for this important issue.


           NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT SERVICE

  Mr. McCAIN. Mr. President, section 1601 of title XVI of this bill 
would establish a National Science and Technology Assessment Service to 
develop information for Congress relating to the uses and application 
of technology to address current national science and technology policy 
issues. Everyone in this body appreciates that the science and 
technology policy issues that we face today are diverse and complex. 
Clearly there is a need for some reliable means for Congress to receive 
timely, unbiased information on such matters.
  However, I am concerned that the details of the organizational 
structure being proposed in this section have not been fully vetted. No 
hearings were held on the proposal. Many of those interested are not 
locked into this particular design proposal, but feel that there is a 
valid need for such an organization. I hope that we can revise the 
title XVI provisions to ensure that it meets the needs of Members. Many 
of us recall the former Congressional Office of Technology Assessment 
which was abolished in 1995 over concerns about its ability to provide 
timely information to Members of Congress. Oftentimes their reports 
were released after a vote on a particular issue, rendering them 
useless from a Congressional standpoint. There were also concerns that 
the office had grown to be much larger than originally anticipated. By 
the time the office was abolished, it had grown to have an annual 
budget of approximately $22 million and had over 200 employees. The 
cost of an average report was around $400,000.
  I believe that the authors of this title XVI intend that the 
assessment service be an unbiased, nonpartisan entity whose reports and 
recommendations would be widely accepted by the Congress. To create 
such an entity with instant credibility, requires an open process for 
considering different approaches to structuring it. Without this 
opportunity and process, the established service may not be received as 
a reliable non-partisan entity. Without such a reception, the service 
would be essentially useless.
  Although I have filed an amendment that would delete this title from 
the bill, I am hereby withdrawing that amendment. I hope to work with 
the chairman of the Commerce Committee, Senator Hollings, to further 
review the provision while the Energy bill is in conference with the 
House. I urge Senator Hollings to hold hearings on this proposal to 
allow for an open debate on the needs and benefits of the congressional 
service. I further urge the chairman to engage other committees and 
Members in these discussions.
  Mr. HOLLINGS. Mr. President, I thank Senator McCain for his comments 
and his willingness to work with me on this issue. The need for 
reliable, sound advice to Congress on scientific and technology issues 
has never been greater. Many of the issues that we tackle every day 
involve some scientific or technological element.

[[Page S3408]]

  Congress needs to be sure that it can avail itself of excellent 
scientific analyses on complex issues. The advice that we were able to 
receive in the past from the Office of Technology Assessment on such 
issues as climate change and homeland security is sorely missed. As 
Senator McCain noted, any assessment service for the Congress needs to 
be non-partisan and effective. I look forward to discussions with the 
ranking member of the Commerce Committee, as well as other members of 
the Senate, regarding the proposed structure of the National Science 
and Technology Assessment Service and possible changes to that 
structure.


                      Request for Tax Modification

  Mr. HARKIN. Mr. President, I have long been interested in providing a 
modification in the tax law allowing a historic hotel in my State to be 
restored and used as housing for lower income elderly people. 
Unfortunately, as the chairman knows, the tax laws often determine the 
viability of the project and this modest sized project is more complex 
then most of its size.
  Mr. BAUCUS. Mr. President, I appreciate the Senator from Iowa's 
concern and his persistence. However, because the provision is not an 
energy tax proposal, it is not appropriate for it to be included in 
this energy bill. But I do want the Senator to know that there is 
sympathy for the proposal, and I do plan to consider its inclusion on 
an appropriate measure in the near future.


      development of high temperature superconductor technologies

  Mr. SCHUMER. I would like to pose a question to my esteemed colleague 
from New Mexico, who serves as the chairman of the Energy and Natural 
Resources Committee. It is my understanding that the Energy Policy Act 
of 2002 contains language that will direct the Secretary of Energy to 
conduct research and development activities regarding enhanced 
renewable energy. Within that language's provisions for electric energy 
systems and storage, there exists language that directs the Secretary 
of Energy to undertake demonstration projects to further the 
development of high temperature superconducting, HTSC, technology. I am 
seeking the chairman's assistance in clarifying the specific factors 
and goals that are meant to be associated with these demonstration 
projects.
  It is my understanding that the HTSC technology demonstration 
projects, which may include HTSC cables, fault current limiters, and 
power transformers, are meant to focus on the development of second 
generation YBCO-based superconductors that will make several 
significant contributions to the electrical system. Furthermore, the 
high temperature superconductor technology demonstration projects 
should also have a minimal adverse impact on the environment and land 
use, and produce environmental benefits by reducing reliance on oil as 
a cooling agent in electric power devices and reducing harmful 
emissions caused by fossil-fuel-powered generating plants.
  I would like to know if the Senator from New Mexico agrees with my 
interpretation of the language in the Energy Policy Act of 2002.
  Mr. BINGAMAN. I respond to my colleague from New York by stating that 
I do in fact share his understanding of the intent of the language 
relating to HTSC research in the Energy Policy Act of 2002.


                oil and gas development on public lands

  Mr. DURBIN. Mr. President, I ask the chairman of the Energy and 
Natural Resources Committee to engage in a colloquy with Senator 
Feingold and me with respect to oil and gas development on Federal 
lands, an issue that is very sensitive for Americans right now. There 
are areas on public lands where we can develop oil and gas resources in 
a responsible way. But we should not take this fact as a green light to 
degrade environmentally sensitive lands, which should be preserved for 
generations to come. We need to recognize that the Secretary of the 
Interior, as the steward of our public lands, must consider a range of 
factors when developing and use plans for public lands. The Secretary 
of the Interior is not just in the business of energy--lands 
administered by the Bureau of Land Management are multiple use lands 
and the Secretary is required to take many factors into consideration 
when developing land use plans, including the recreation, range, 
timber, minerals, watershed, wildlife and fish, and natural, scenic, 
and historic values.
  The Bureau of Land Management has authority to lease public lands for 
oil and gas development under the authority of the Mineral Leasing Act, 
and this authority is referenced in section 602 of the energy bill. 
However, before the BLM exercises its authority, I believe that it is 
important that the secretary consider the characteristics of the land, 
including whether the land exhibits wilderness characteristics. For 
example, section 102 of the National Environmental Policy Act requires 
the Secretary to consider ``any adverse environmental effects'' and 
``any irreversible and irretrievable commitments of resources'' that 
would result from proposed agency actions. In addition, section 202 of 
the Federal Land Policy and Management Act requires the Secretary to 
develop and maintain land use plans for public lands administered by 
the BLM, using and observing the principles of multiple use and 
sustained yield, and among other criteria, ``giv[ing] priority to the 
designation and protection of areas of critical environmental 
concern.'' Does the Senator from New Mexico agree that section 602 of 
the Energy Policy Act does not change the Secretary's obligation to 
comply with all laws and regulations applicable to the BLM's onshore 
oil and gas program, including applicable requirements under NEPA, 
FLPMA, and other laws designed to protect environmental values and 
sensitive areas on public lands?
  Mr. BINGAMAN. The Senator from Illinois is correct. Section 602 
simply states that in order to ensure timely action on oil and gas 
leases and applications for permits to drill on lands otherwise 
available for leasing, the Secretary of the Interior is required to 
ensure expeditious compliance with the requirements of section 
102(2)(C) of NEPA, improve consultation and coordination with the 
States, improve the collection of information related to such leasing 
activities, and improve inspection and enforcement activities related 
to oil and gas leases. The section also authorizes appropriations to 
the secretary. Section 602 does not change any requirements under 
current law applicable to the management of public lands, including any 
requirements imposed by NEPA, FLPMA or any other applicable law.
  Mr. DURBIN. I thank the chairman. It is my understanding that the 
current BLM policy requires the agency to consider activities on lands 
proposed for special designations, such as Areas of Critical 
Environmental Concern and Wilderness Study Areas, and, subject to valid 
existing rights, to avoid approval of proposed actions that could 
degrade the values of potential special designations. Does the Chairman 
agree that section 602 does not affect this policy?
  Mr. BINGAMAN. The Senator from Illinois is correct.
  Mr. FEINGOLD. The Senator may be aware that citizens' groups have 
petitioned the BLM to review several million additional acres for 
wilderness designation, but these lands are largely not protected from 
oil and gas development. The BLM's ``Wilderness Inventory and Study 
Procedures'' manual requires the BLM review wilderness recommendations 
received from the public, and to make a determination as to whether 
there is a reasonable probability that the area in question may have 
wilderness characteristics. If the BLM determines that the area may 
have wilderness characteristics, and if actions are proposed that could 
degrade the wilderness values, the BLM ``should, as soon as 
practicable, initiate a new land use plan or plan amendment to address 
the wilderness values.'' Does the chairman agree that section 602 does 
not alter this policy, that the BLM must review wilderness proposals it 
receives from the public?
  Mr. BINGAMAN. The Senator is correct, Section 602 does not change any 
existing requirements or policies, including the potential wilderness 
review policy.
  Mr. FEINGOLD. I thank the chairman.


            Protecting Leases on the Outer Continental Shelf

  Mrs. BOXER. Mr. President, I rise to discuss an amendment that I have 
been working on with several of my colleagues for some time now. The 
amendment is based on S. 1952, a bill that would reacquire and 
permanently protect certain leases on the Outer Continental Shelf off 
the coast of California by issuing credits that can be used to

[[Page S3409]]

develop energy resources elsewhere in the country.
  As you know, for decades, Californians have opposed oil and gas 
drilling along their coasts. We vividly remember the horrific oil 
platform rupture and oil spill that occurred off the coast of Santa 
Barbara in 1969. The ecological implications of that spill and the many 
other spills and leaks associated with the rigs that are currently 
along our coast are still being felt by Californians living along the 
coast.
  Unfortunately, 36 more leases off our coast remain eligible for oil 
and gas development and four additional leases remain in legal limbo.
  That is the last thing Californians want or need.
  In fact, the State of California has taken the Department of the 
Interior to court over whether the State has the ability to deny these 
leases. I strongly support the State in this effort and have joined 
Representative Capps of California in filing an amicus brief in support 
of the State's position.
  I believe every State should have the right to deny oil and gas 
development off their shores, as offshore activities inevitably impact 
the people and resources that are onshore. Last year, I reintroduced 
legislation, the Coastal States Protection Act, to place a moratorium 
on new drilling leases in Federal waters that are adjacent to State 
waters that have a drilling moratorium. That bill, however, addresses 
only future leases.
  With regard to the undeveloped existing leases off of California's 
coast, I believe a proactive approach is needed. These leases are in 
the midst of protracted and contentious litigation. I do not believe, 
however, that any interests are best served by waiting for the courts 
to sort this out. I have been approached by California lessees that 
want out of California. I want them out; the State wants them out; and 
the people of California want them out. Instead of hoping the courts 
reach the same solution, I think it vital that we seek legislative 
action to eliminate any threat of future drilling off California's 
shores and remedy this situation as soon as possible.
  That is why I have continued to work on this language with my 
colleagues to find a compromise that would protect the fragile 
environment off the California coast and at the same time redirect the 
financial resources for energy production to other areas where it can 
be used to meet our country's energy needs.
  In short, we are working to rid California of unwanted drilling, end 
a protracted legal battle in which nobody wins, and free the financial 
resources of the lease owners so that they may produce energy 
elsewhere. Our goal is a win-win situation.
  However, this is a new idea that has significant implications and we 
have not yet been able to work fully through all of the details. For 
that reason, I will not offer this amendment to the Energy Bill and 
will instead try to build consensus around this concept. I am committed 
to continuing to work on this issue with my colleagues because I know 
they too are committed to the same goal.
  Mr. CAMPBELL. Mr. President, I rise to associate myself with the goal 
of the Senator from California. One of the California lessees has their 
headquarters in Colorado. I know that this company has wasted a great 
deal of time, money and effort in the unproductive leases off the coast 
of California. It is time for this company to be allowed to recoup its 
costs so that they can be redirected to more promising development 
opportunities elsewhere.
  We need to enhance our domestic energy production in the interest of 
national security, and so we have to find a way to reconcile the 
competing interests of the California environmentalists, the Department 
of the Interior and the oil companies. We can all agree that our nation 
needs to produce more energy and that we must do so in environmental 
sensitive ways. However, the owners of the leases have had their hands 
tied in California for 20 or more years to no one's satisfaction. It is 
time to move on, so that both important national goals can be met.
  I applaud the efforts of Senator Boxer to continue to seek a 
compromise that balances the environmental concerns with the need to 
fairly compensate the companies for their leases so they can redirect 
their efforts toward the production of more energy for our nation.
  Mr. BINGAMAN. Mr. President there is no aggressive advocates on this 
issue than Senator Boxer. I am willing to continue working with her to 
see if there is a solution that addresses the environmental concerns of 
her state, the concerns of the oil and gas industry, and the need to 
develop additional energy resources. I also want to thank the Senator 
for her willingness to put their issue aside for now so that consensus 
can be reached. I am hopeful that through continued efforts we will be 
able to achieved that consensus.


Comprehensive studies of Shallow Underground Structures Holding Natural 
                                  Gas

  Mr. BINGAMAN. I would like to pose a question to my esteemed 
colleague from Kansas. It is my understanding that there was a terrible 
accident involving the death of several people in Kansas from the 
leakage of natural gas from a shallow underground storage structure. As 
a result, you are offering a noncontroversial amendment to authorize 
the Department of Energy to conduct a detailed study on the engineering 
and geology aspects of these shallow underground structures so that 
their safety can be assessed on a rigorous basis. I appreciate my 
colleague's desire to work with me on addressing this issue in 
conference. I agree with him that it can be dealt with in the 
conference appropriately without taking up valuable Senate floor time.
  I would just like to clarify that as this Energy Policy Act of 2002 
moves into conference, if the good Senator from Kansas that it might be 
appropriate to move some of the detailed language under your 
amendment's section (c) to the subsequent conference report so that it 
gives the proper guidance and intent to the deparment?
  Mr. ROBERTS. I thank my good colleague from New Mexico for 
understanding the reason why this amendment is important to not only my 
state but the safety of future underground shallow gas structures in 
the entire U.S. I look forward to working with him and the Senate 
conferees on the energy bill to ensure the proper report language is in 
the conference report based on the legislative language in my 
amendment.


                           Amendment No. 3185

  Mr. KYL. Mr. President, on April 22, I submitted amendment No. 3185 
which addresses service obligations of load-serving entities. This 
amendment gives specific direction to FERC in exercising that 
authority. It amends title II of S. 517 to require FERC to ensure that 
utilities with service obligations are able to retain existing firm 
transmission rights in order to meet those obligations.
  This amendment allows FERC to go forward with its program to 
establish a standard market design for wholesale electric markets while 
at the same time ensuring that transmission owners and holders of firm 
transmission rights under long-term contracts are able to retain 
sufficient transmission rights to meet their service obligations under 
Federal, State, or local law, and thereby to protect retail customers.
  This amendment has been reviewed by the Administration, FERC and a 
number of key participants in the electric restructuring debate. I 
believe we have some agreement on the concept, but need more time to 
work out the language. Accordingly, I am not offering the amendment now 
but would like to work with the managers of the bill to come up with an 
acceptable version.
  Mr. MURKOWSKI. I thank the Senator from Arizona for bringing this 
very imporatnt concept to our attention. We very much want to work with 
him to develop an acceptable service obligation amendment.
  Mr. BINGAMAN. I thank the Senator from Arizona for not pursuing his 
amendment at this time, and I agree to work with him to try to find an 
acceptable solution. To further this effort, I am willing to hold a 
hearing on the matter.
  Mr. SMITH of New Hampshire. Mr. President, I am very pleased that the 
energy package the Senate will pass contains a solution to the MTBE 
problem. This comprehensive MTBE legislative package protects our 
drinking water while preserving air quality and minimizing negative 
impacts on gasoline prices and supply. Solving the MTBE has been one of 
my top priorities for over two years. My legislation

[[Page S3410]]

was voted out of committee both last Congress and this Congress, and I 
am pleased that it was finally passed by the full Senate.
  As Chairman of the Environment and Public Works Committee, I held a 
field hearing in Salem back in April 2001 to hear from the folks in New 
Hampshire about their MTBE problems. I have come to the floor on 
several occasions to speak specifically about New Hampshire families 
and small businesses that have been impacted by MTBE contamination. I 
have visited with many of my constituents who suffer with MTBE 
contaminated wells.
  The Miller family--Christina and Greg, and their son Nathan--live in 
Derry, New Hampshire. This young family has been struggling for over 
three years with the MTBE contamination in their well. I spent time at 
the Four Corners Store and surrounding homes in the Town of Richmond, 
New Hampshire. Although the store's underground storage tanks are in 
compliance with the law, an MTBE plume persists from a tank that leaked 
years ago. This plume has contaminated a number of private wells of the 
homes near the Four Corners Store. The Goulas and Frampton families who 
live close to the Four Corners Store, were kind enough to invite me 
into their homes, and show me the massive treatment system that had 
been installed by the State. I am very pleased that I can tell these 
families and many others in New Hampshire that we are one important 
step closer to having an effective solution to the MTBE problem.
  Specifically, this legislation bans MTBE; provides money for the 
cleanup of MTBE; eliminates the oxygen mandate in the RFG program, and 
maintains the current level of air quality protection. Additionally, 
the legislation requires the Environmental Protection Agency (EPA) to 
conduct an expedited review of state petitions to suspend the oxygen 
mandate in the RFG program. If the EPA fails to complete the review of 
a State petition within 30 days, the petition will automatically be 
granted. This provision could allow New Hampshire to begin to eliminate 
MTBE from the fuel system even before the oxygenate mandate is lifted.
  Finally, the language includes $2 million for the research of 
techniques to cleanup bedrock contamination and to establish a 
clearinghouse for sharing the information. According to Dr. Nancy 
Kinner, a scientist from the University of New Hampshire, tracking and 
cleaning up MTBE in fractured bedrock is one of the greatest challenges 
we face as a result of MTBE leaks. This research will help to address 
that problem.
  Mr. President, this was not an easy compromise to reach, but we have 
come together on an effective solution. I want to thank Senator Daschle 
for including my MTBE legislation in this energy package from the 
beginning of this process. I would also like to thank the Majority 
Leader for working so hard with me and other members to hammer out a 
compromise package and ensuring passage. Senators Murkowski, Inhofe, 
and Voinovich were in tough positions but they worked tirelessly to 
come to this agreement--without them, we could not have solved the MTBE 
problem. I would also like to thank the stakeholders, including the 
refiners, ethanol producers, and environmental groups--all of whom have 
worked with me over the last few years to reach a consensus.
  Last, I would like to thank all the Senate staff who worked on this 
package. Specifically, I would like to mention David Conover, Chris 
Hessler, Melinda Cross, Eric Washburn, Chris Miller, Alison Taylor, 
Janine Johnson, Dan Kish, Jamie Karl and Andy Wheeler. I am pleased 
that this comprehensive solution is supported by so many of my 
colleagues.
  Mr. BIDEN. Mr. President, the energy bill that we will pass today is 
not the most perfect bill--there are a number of things in this bill 
that I don't like. What we will pass today is the product of two months 
of debate and changes, and it is a compromise. It offers the basis for 
a comprehensive and balanced plan to address the energy needs of this 
country.
  Anyone who drives a car or pays an electric bill knows that over the 
past two years there have been huge fluctuations in oil and gas prices. 
The bill that will pass the Senate today by a bipartisan vote will 
increase energy supplies--fossil fuels and alternative sources such as 
ethanol, biodiesel, wind, solar and geothermal--will help stabilize 
prices, and will do so in an environmentally sensitive way. It provides 
tax incentives to spur new oil and gas production and development of 
renewable sources, while also promoting responsible conservation. It 
includes important consumer protections and assistance for low income 
persons, particularly the elderly who live on fixed incomes. And I was 
also pleased that this bill protects the Arctic National Wildlife 
Refuge from oil drilling, and takes important steps toward cutting 
greenhouse gas emissions.
  I am voting in favor of this bill today because it provides an 
important framework for a national energy policy. I think that there is 
more we can do and I am hopeful that in conference, the House and 
Senate will work together to improve this legislation.
  Mr. NELSON of Nebraska. Mr. President, I rise to explain the reality 
of ethanol production in the United States and do so in opposition to 
the amendment to postpone the renewable fuels standard implementation 
date.
  There are currently 61 ethanol plants with the capability of 
producing 2.3 billion gallons of ethanol per year, the amount required 
by the current RFS on the starting date of January 1, 2004. Some 
opponents of the RFS claim ethanol plants operate at only 82 percent of 
capacity.
  We have tried to explain that production is below capacity because 
the market for ethanol at a fair price is below production capability. 
In previous testimony, I have explained that certain big oil and 
gasoline companies simply refuse to use ethanol even when wholesale 
price is well below the wholesale price of gasoline and ethanol's high 
octane number is a free benefit. The RFS will change that situation.
  However, to ease the concern of the RFS opponents, we have accepted 
their production number of 1.7 billion gallons in 2001--not the 2.3 
billion gallon capacity.
  There are currently 16 new plants under construction that will add 
another 400 million gallons of capacity, raising the total to 2.7 
billion gallons of ethanol by year's end. Again, taking our opponents 
numbers, total production is forecast at 2.2 billion gallons.
  From a review of proposed new ethanol plants in various stages of 
planning, design, engineering, permitting and financing, we can very 
conservatively estimate that another 300 million gallons of production 
capacity will come on line in 2003, to give us a total of 3 billion 
gallons capacity and 2.5 billion gallons of production, using the 
estimates of RFS opponents.
  I know ethanol plant operators; they will exceed nameplate capacity 
when the market is there and the price is fair. We should also have 
well over 70 million gallons of biodiesel production by 2004. This is 
equivalent to about 100 million gallons of ethanol, using the 1.5 to 1 
ratio for biodiesel and cellulosic biomass allowed by the RFS.
  Consequently, without unforeseen obstacles, America will have the 
capability to produce about 3 billion gallons of ethanol when the RFS 
requirement is only 2.3 billion gallons to be used throughout 2004--
giving us still more construction time in 2004. If a disaster hits, 
there are safety features in the RFS to deal with the problem.
  I might add it is far more likely that a disaster in oil and 
petroleum product availability will occur than a shortage in the supply 
of ethanol. Should a fossil fuel disaster hit, ethanol supplies will be 
most welcome in keeping the price of gasoline down.
  I will add to the Record an op-ed article written by a professor of 
rural sociology and environmental studies at the University of 
Wisconsin in Madison. It appeared in The Washington Post on April 4. It 
is titled ``Why We Can't Drill Our Way to Energy Independence.'' 
Professor Freudenburg ends his article with these thoughts: ``Only if 
we recognize the facts can we start to talk about a realistic energy 
policy. If the United States is ever to become energy-independent 
again, it won't be because of oil.''
  The professor is right, and Senator Kerry was right when he said we 
have to create our way out of our dangerous dependence on foreign oil 
dependence.
  I wish my colleagues, determined to weaken the ethanol industry, 
would

[[Page S3411]]

join the creative team by recognizing ethanol, biodiesel and other 
biofuels are a big part of the solution. We are all patriots. We are 
clear-sighted and determined to protect our national interest abroad 
and homeland security in America.
  We seem, however, myopic in fully appreciating that transportation 
fuels do much more than move us to our jobs, our kids to school and 
goods to the market. They are absolutely vital to our economy, our well 
being--and to national and homeland security. Interrupt the flow of 
fossil fuels in our transportation sector and we are weakened in all of 
these sectors.
  We must break that direct connection between fossil fuel imports and 
the overall well being of America. We can do so through the biofuels 
provisions in the RFS.
  If we were real patriots, we would push beyond the goal of about 3 
percent replacement by 2012 and set a goal of 10 percent or about 14 
billion gallons by that year. In Nebraska, Iowa, Minnesota, and 
Illinois we are already well above the 10 percent mark.
  For almost all States outside the Corn Belt, there are ample supplies 
of cellulosic biomass including agricultural and forestry crops and 
residues, rights-of-way, park, yard and garden trimmings and the 
biomass and fraction of municipal waste that is a disposal problem, and 
ends up in land fills and sewers.
  We are on the cusp of the science and technologies to cost 
effectively convert this biomass into biofuels, bioelectricity and 
biochemicals. That is why I am promoting a ``Manhattan'' type approach 
in order to rapidly move forward with large demonstration plants and 
then on to full commercialization.
  By working together and with adequate resolve, we can make the 10 
percent goal and go beyond to the benefit of America's national, 
energy, and homeland security and its economy through new basic 
industries, quality jobs and an expanded tax base. The environmental 
benefits are equally important.
  If the Senator from California is concerned about ozone formation 
resulting from the introduction of ethanol, she should look to Chicago 
and Milwaukee where they have been essentially using ethanol blends for 
years with air quality steadily improving.
  If the California Senators are concerned about benzene in their 
ground water, they should call for reductions in benzene and other 
aromatics in gasoline. These other aromatics, toluene and xylene, 
partially break down into benzene, a potent carcinogen, in the 
combustion process, both in the engine and the catalytic converter. 
Ethanol can replace these aromatics to the overall benefit of the 
environment.
  California will ban MTBE in 2004. Yet, the California Senators oppose 
the introduction of ethanol to replace MTBE. They want to turn to the 
aromatics and alkylates to meet supply and octane needs. The 
availability and costs of alkylates are unknown. The adverse 
environmental and health effects of aromatics are well known. 
Therefore, to accept aromatics and to oppose ethanol is a disservice to 
the people of California.
  The opponents of ethanol bring up the possibility of price fixing by 
the ethanol industry. I believe bringing such unsubstantiated claims to 
the Senate, and used as arguments to damage the ethanol industry in its 
entirety while the future of ethanol is being debated, is regrettable. 
This sudden flood of media on this issue cast suspicion on the reality 
of these claims, and leads one to believe that enemies of ethanol are 
simply continuing their campaign to tarnish ethanol's reputation and 
the industry in its entirety.
  If there are concerns about the price of ethanol, the reality of the 
marketplace should provide needed comfort. At the wholesale level, 
ethanol prices are well below those for MTBE, ethanol-free gasoline, 
the aromatics and, we assume, alkylates, since wholesale prices for 
this gasoline component are not available.
  The RFS is the best option we have to reduce our dangerous dependence 
on imported oil and to gain other benefits I have already outlined. It 
is time to bring this debate to a close and to seriously move forward 
with national determination to lead the world in the production of 
biofuels, bioelectricity and biochemicals using cellulosic biomass and 
waste streams as feedstocks.
  Mr. President, I ask unanimous consent the op-ed from the Washington 
Post be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Apr. 24, 2002]

           Why We Can't Drill Our Way to Energy Independence

                      (By William R. Freudenburg)

       Washington, Apr. 24.--It's time for a reality check on 
     energy policy.
       Politicians are fond of claiming that increased domestic 
     oil production can restore energy ``independence,'' but 
     anyone who actually believes those claims is living in a 
     world of self-delusion. U.S. energy independence hasn't been 
     physically possible since the days when Elvis was still 
     singing, and if we're talking about oil, it won't ever be 
     possible again.
       There are two reasons. One is that the United States simply 
     uses too much oil, too wastefully. The other is that we've 
     already burned up almost all the petroleum we have. The calls 
     for ``energy independence'' aren't based on realism; they're 
     based on nostalgia.
       To be fair, we've had quite a petroleum history. Back in 
     1859, the United States was the country where the idea of 
     drilling for oil originated, and for nearly a century 
     thereafter, we were a virtual one-nation OPEC. Save for a few 
     years around the turn of the last century, the United States 
     produced over half of all the oil in the world more or less 
     continuously until 1953.
       But ever since then, our proportion of world oil production 
     has been dropping, with only minor fluctuations, no matter 
     how much our politicians have tried to stop the slide. 
     Ironically, around 1973, when President Nixon's ``Project 
     Independence'' first brought the issue of energy policy (and 
     the idea of energy ``independence'') to the minds of most 
     Americans, the country moved decisively in just the opposite 
     direction from independence. Even during the massive push to 
     increase U.S. oil production in the years of Ronald Reagan 
     and James Watt, the only real effect was a tiny increase in 
     the U.S. proportion of world oil production--from 14.5 
     percent to 16.8 percent--between 1980 and 1985.
       By the time Reagan left office, physical reality had 
     reappeared, and the U.S. share of world oil production was 
     even lower than when he started. In recent years, we have 
     produced less than a tenth of the world's oil.
       Why have politicians been arguing about oil exploration on 
     the northern edge of Alaska, even as we keep moving further 
     off the southern edge of the continent, into the ever-deeper 
     waters of the Gulf of Mexico? It's simple: We've already 
     drained almost everything in between.
       Politically savvy spin doctors may be able to get many 
     Americans to overlook the facts, at least in the short run, 
     but they aren't going to change reality, and the aren't going 
     to turn back the clock. According to the American Petroleum 
     Institute, the United States is now down to just 3 percent of 
     the world's proven reserves of oil. Wishful thinking isn't 
     going to change that.
       Unless the politicians can figure out how to turn their hot 
     air into oil, we need to face the facts: It is no longer 
     possible for the United States to drill its way to energy 
     independence. This country simply doesn't have that much oil 
     left, and if we use that oil faster, we will just run out 
     sooner.
       Only if we recognize the facts can we start to talk about a 
     realistic energy policy. If the United States is ever to 
     become energy-independent again, it won't be because of oil.

  Mr. FEINGOLD. Mr. President, energy policy is an important issue for 
America, and my Wisconsin constituents take it very seriously. The bill 
before us seeks to address the balance of domestic production of energy 
resources versus foreign imports, the tradeoffs between the need for 
energy and the need to protect the quality of our environment, and the 
need for additional domestic efforts to improve our energy efficiency, 
and the wisest use of our energy resources. Given the importance of 
energy policy, an energy bill is a very serious matter, and I do not 
take a decision to oppose such a bill lightly. Mr. President, in my 
view, this bill does not achieve the correct balance on several 
important issues, and I will oppose this bill.
  Though the bill as amended will revitalize the Federal Government's 
responsibility to regulate fuel economy, it weakens current law and 
exempts pickup trucks from any future increases in fuel economy 
standards. The amendment by the Senator from Michigan, Mr. Levin, on 
fuel economy which I supported requires the Department of 
Transportation to develop new fuel economy standards in 15 months for 
light trucks and 24 months for passenger cars. Taking pickup trucks off 
the table undermines a serious effort to re-think our fuel economy 
policy in a rulemaking context, and it is a direction I oppose.
  In addition, Mr. President, as introduced, this bill contained a 
renewable

[[Page S3412]]

energy portfolio standard requiring electric utilities to generate or 
purchase 10 percent of the electricity that they sell from renewable 
sources by 2020. I supported an amendment offered by the Senator from 
Vermont, Mr. Jeffords, to increase this percentage to 20 percent, but 
on the floor the Senate adopted amendments to water it down to 8 
percent. Moreover, with the exemptions for some utilities added to the 
bill, the real effect will be about 4-5 percent new generation from 
renewable sources by 2010. We can and should do more to use renewable 
sources of energy, and this bill should have set a serious target.
  In addition, this bill repeals the pro-consumer Public Utility 
Holding Company Act, the Federal Government's most important mechanism 
to protect electricity consumers. The Senate failed to adopt the 
amendment by my colleague from Washington, Mrs. Cantwell, to strengthen 
consumer protections which I helped write and co-sponsored. The bill 
should have given the Federal Government more oversight over utility 
mergers and should have prevented utilities from passing on the costs 
of bad investments to consumers and from using affiliate companies from 
undercutting small businesses. Also the electricity provisions of the 
bill do not re-regulate trading of energy derivatives. This would have 
been addressed by an amendment offered by the Senator from California, 
Mrs. Feinstein, which I supported, which would have fostered a more 
stable market with transparent transactions and helped to prevent 
another Enron.
  Finally, I am also concerned that we added $14 billion in tax breaks 
without paying for them on this bill. Our budget position has 
deteriorated significantly over the last year, in large part because of 
the massive tax cut that Congress enacted. We now face years of 
projected budget deficits. The only way we will climb out of this 
deficit hole is to return to some sense of fiscal responsibility, and 
first and foremost that means making sure that the bills we pass are 
offset. Without offsetting the cost of the tax package, we are digging 
our deficit hole even deeper and adding to the massive debt already 
facing our children and grandchildren.
  The American people deserved better with this bill, and I cannot vote 
in favor of it. This measure will need to improve in Conference to get 
my vote, and I look forward to an improved bill.
  Mrs. BOXER. Mr. President, I will vote against the energy bill 
because it is a bad bill for California and the nation.
  The bill includes an ethanol mandate for California that will raise 
gas prices. Cleaner air for California can be achieved without this 
mandate. Ethanol has been given a liability waiver if there are adverse 
consequences from its use. I tried to eliminate this waiver but lost on 
a 42-57 vote. We already know that ethanol may spread plumes of harmful 
chemicals, such as benzene, toluene, ethyl benzene, and xylene. So this 
is a dangerous waiver.
  The energy bill does not do enough to protect consumers from another 
electricity crisis. I worked to include a measure in this bill that 
would have guarded against future market manipulation by companies like 
Enron by increasing oversight of the electricity market. Companies 
would be far less likely to gouge consumers if these additional 
protections were in place, but the Senate refused to pass this vital 
measure.
  Also, I am disappointed that the Senate walked away from reasonable 
fuel economy standards and stronger air conditioner efficiency 
standards, which are so important to our environment and to lessening 
our dependence on foreign oil.
  The ``good guys'' have had few wins. We were able to keep the 
provision of the bill to provide tax credits for alternative energy 
sources and alternative fuel vehicles. And we defeated an attempt to 
open the Alaska Wildlife Refuge to drilling, for which I am very 
thankful to the grassroots of California for all their efforts. But 
drilling in Alaska did get 46 votes, and I am concerned that with the 
bill passing the Senate, drilling in Alaska may not be dead in the 
conference committee.
  In conclusion, the bill does more harm than good for the people of 
California.
  Mr. KENNEDY. Mr. President, I must rise, regrettably, to oppose the 
energy bill. This legislation means higher gas prices and lower 
environmental protections for the American people, and it should be 
opposed.
  I commend Senators Bingaman and Daschle for their leadership and 
their tireless work on this initiative. I believe I could have lived 
with many sections of the bill as introduced. I know there are many 
issues regarding our national energy policy upon which Senator Daschle, 
Senator Bingaman and I agree. However, in my opinion the bill in its 
current form falls far short of the mark for environmental and consumer 
protections, and forces us to rely on oil more than innovation for our 
energy needs for the foreseeable future.
  The energy bill as introduced wasn't as bold as it could have been, 
but it represented an improvement over the status quo. It had higher 
goals for renewable energy. It maintained some consumer protections. 
There are still provisions in this bill that deserve everyone's 
support. It's true that we are raising the bar a bit in calling for 
renewable energy, though not enough. We're providing some tax credits 
for renewable energy production and energy efficiency. We're improving 
pipeline safety. We're investing resources in making renewable energy 
more efficient and profitable. We're conducting research on finding the 
most appropriate and effective places to site renewable energy 
facilities. We spoke very clearly that drilling in the Arctic Natural 
Wildlife Refuge is not in the interests of our economic or national 
security.
  I am also pleased with Senator Bayh's leadership on clean-burning 
school buses, and I look forward to continuing our work together on 
this very important issue.
  But I think this bill doesn't do enough to ensure that efficiency is 
a serious component of our energy policy. I commend Senators Kerry and 
McCain for their efforts on fuel economy standards, but I'm very 
disappointed in the vote on CAFE. I'm also disappointed that the Senate 
couldn't find an agreement to set broad goals for fuel consumption as 
reflected in the Carper amendment. I fear we will be forced to revisit 
this issue again sooner rather than later.
  I'm very concerned that we didn't do enough to protect consumers in 
this bill. Energy industries wanted fewer regulatory restrictions, and 
were rewarded in this bill. The underlying bill had adequate consumer 
protections, but they were watered down by amendments. In today's fast-
paced world of energy trading, and mergers, we should err on the side 
of transparency and consumer protection. The energy bill doesn't do 
that.
  I'm particularly concerned about the potential harm to the 
environment in this bill. This bill supports hydraulic fracturing. It 
forces States to use ethanol--and while ethanol clearly addresses air 
pollution, I'm concerned that the residue created by ethanol, known as 
EBTE, could pollute our water supply. We shouldn't be trading clean 
water for clean air.
  The fuel oxygenate mandate provisions are cumbersome for 
Massachusetts. It forces our state to use more ethanol than it will be 
able to accommodate for several years. The infrastructure to transfer 
ethanol is inadequate, and when Massachusetts finds itself unable to 
meet the mandate, it will be forced to pay a credit--increasing gas 
prices at the pump. I'm also concerned about the impact to the highway 
trust fund--Federal resources from the gas tax should be spent on 
repairing and constructing roads and bridges. More ethanol would reduce 
the revenues in this fund and compromise our ability to maintain our 
transportation infrastructure.
  I am very concerned about the liability protections given to 
industry. We're subsidizing and capping the liability costs of the 
nuclear industry in this bill--I believe if you're not prepared to bear 
the total costs of nuclear power, then you shouldn't enter the 
business. We're giving blanket product liability protections to fuel 
additive manufacturers, even though we don't have adequate information 
on their safety if they drain into our drinking water. An energy bill 
should be about innovation, conservation, and security--not about 
providing yet more liability protections for corporations when their 
products hurt people or the environment.

[[Page S3413]]

  This bill has some improvements, but I'm sure the Senate could do 
better.
  Mr. McCAIN. Mr. President, regarding this energy proposal before the 
Senate proceeds to a final vote today. For 6 weeks, we have debated 
various aspects of this energy proposal. It's been the most exhaustive 
debate on energy related issues since 1992 when previous energy 
legislation was enacted.
  In that 10-year time span, unfortunately, conditions have only 
worsened. America's dependence on foreign oil has increased from 46 
percent to 57 percent. In 1992, gas prices were $1.13 per gallon. But, 
in recent times, consumers have had to absorb several price spikes in 
gasoline prices, some in excess of $2 per gallon. Special interest tax 
subsidies are also on the rise. In 1992, the Congress enacted $1.5 
billion for energy tax credits and benefits for 5 years. This Senate 
bill includes more than $13 billion for 10 years, and this amount could 
increase since the House-passed energy bill includes more than $30 
billion in energy tax subsidies.
  As I listened to many of my colleagues debate these various issues on 
the Senate floor, the consistent message I have heard from both sides 
of the aisle is the need for a balanced energy policy, increasing U.S. 
energy stability, and protecting American consumers. These are all 
laudable and important goals. The end result, however, is a bill that 
falls significantly short of these goals and represents more benefits 
to special interests than to the American people.
  One of the stated objectives of this new energy policy is to reduce 
America's dependence on foreign oil. Regrettably, we missed a critical 
opportunity when the Senate rejected a proposal to increase fuel 
efficiency standards, which would have substantially decreased our 
Nation's dependence on foreign oil and also reduced greenhouse gas 
emissions. Had we adopted an increase of fuel efficiency standards to 
36 mpg average by 2015, we could have potentially saved 2.6 million 
barrels of oil per day by 2020. This amount is about equal to present 
imports from the Persian Gulf.
  The Senate also rejected a modest effort to mitigate the growth rate 
of our Nation's oil consumption, which increases each year by an 
estimated 2.5 percent, by requiring the Secretary of Transportation to 
reduce the amount of oil we use to power passenger cars and light 
trucks by 1 million barrels per day by the year 2015.
  Both these critical measures would have gone far to improve energy 
efficiency, the environment, and public health. By increasing CAFE 
standards by 46 percent and reducing our consumption of oil, we could 
also have reduced greenhouse gas emissions by 25 percent in Arizona 
alone, significantly improving the air that is negatively impacting our 
citizens. Instead, pressure from car manufacturers and industry won the 
day, and we rejected these modest approaches to improving energy 
efficiency and public health.
  Another big benefactor in this bill is the ethanol industry. Not only 
does this bill propose a ten-year extension of tax benefits for the 
ethanol industry, it also requires that ethanol use in gasoline shall 
be increased three-fold by 2012.
  Proponents of the new reformulated fuel standard requirement suggest 
that their intention is to help farmers, small ethanol producers, and 
replace the controversial fuel additive, methyl tertiary butyl ether, 
MTBE, which has been proven to contaminate groundwater. This new 
ethanol requirement is so important to its sponsors that they willingly 
override continuing public and scientific concerns about ethanol's 
impacts on the environment and public health. Unanswered questions 
remain about the Nation's production and transportation readiness for 
this expanded market. Billions will continue to be drawn from the 
Federal treasury to subsidize the ethanol industry.
  The ethanol industry has enjoyed extremely generous subsidies for 
close to 30 years. By any business standard, it should be more than 
aptly competitive. This is a free market economy, yet, here we are, 
essentially guaranteeing the ethanol industry a monopoly on the 
gasoline market for the next 10 years. Plus, this bill continues the 
5.3 cents-a-gallon tax subsidy and other ethanol tax benefits, which 
drain $1 billion annually from the Federal treasury. By tripling the 
amount of ethanol use, this amount could raise to $2.5 to $3 billion a 
year. This is poorly conceived public policy, and blatant corporate 
welfare at its worst.
  Back in March of this year, I voted for the Job Creation and Worker 
Assistance Act of 2002. It was the economic stimulus package that 
provided temporary assistance for unemployed Americans and their 
families. At the time, I stated that we should not ignore the plight of 
millions of Americans who were laid off and wanted to return to work. I 
also said that my vote for this legislation should not be interpreted 
as a total endorsement of all of its provisions. Indeed, I stated my 
serious reservations about a particular provision in the bill that 
extended a tax credit to the industry in the business of converting 
poultry waste into electricity until the end of 2003.
  Well, guess what? The tax incentives in the energy bill address the 
very same provision again but with a twist that will cost taxpayers 
$2.3 billion over the next 10 years. In the past, this income tax 
credit has been allowed for the production of electricity from either 
qualified wind energy, ``closed-loop'' biomass, or poultry waste 
facilities. But the bill before us not only extends this tax credit 
until the end of 2006, it also expands the qualifying energy resources 
to include geothermal energy and solar energy, ``open-loop'' biomass, 
and swine and bovine waste nutrients.
  I am certainly glad that we have gone beyond helping the chicken 
waste industry now. Now, we have eliminated the discrimination in favor 
of chickens. We are awarding the productive use of the waste of pigs 
and cows. But why don't we totally eliminate this animal waste 
discrimination. Why not give a credit for the waste of dogs, cats, 
mice, birds? The list is infinite. Let's end discrimination now and 
give a tax credit for converting all kinds of animal waste. I am very 
confident that the American taxpayer will feel that their hard-earned 
money is being well spent. And if you believe that statement, I'm sure 
that there is some waterfront property in Gila Bend, AZ, you would be 
interested in buying.
  Again, my concern is that the special interests continue to benefit 
at the expense of hard-working American taxpayers. I regret that I 
cannot support a bill that is so detrimental to taxpayers and does 
little to improve national energy security.
  Mr. KERRY. Mr. President, today the Senate completed consideration of 
the energy reform bill after 6 weeks of debate. I voted yea on final 
passage. Before we began debate on this legislation, I gave a talk here 
in Washington at the Center for National Policy outlining a sound 
energy policy for this Nation. Despite my vote for the energy bill, I 
believe that the Senate has fallen far short of crafting a sound energy 
policy for this nation.
  The Senate did not enact a national energy policy today. I should add 
that the House and President has failed at that task, as well. Why then 
am I voting for the Senate bill? Because the Senate bill is far better 
than the President's plan or the House bill. It is critically important 
that the Senate have a voice in this discussion and put forward its 
work. After 17 years in the Senate, I can see from this debate, that 
while the bill we passed today falls far short of what the Nation 
needs, it is simply the most the political system can bear right now. 
The fundamental changes we need were resisted and ultimately defeated 
by the special interests that benefit from the status quo. And while it 
may be too much to ask, I hold out hope that the bill can be improved 
in the conference process. If it is not improved, I do not believe I 
will be able to support the conference report.
  I want to quickly outline some of the strengths in this bill and some 
of the weaknesses.
  The tax package is reasonable and balanced. It totals about $15 
billion, with that cost nearly equally divided between coal, oil, gas, 
and nuclear and energy efficiency and renewable energy. In the context 
of this measure, I support the assistance to clean coal, marginal well 
production, and other areas. I strongly support the tax credit for 
hybrid, fuel cell, and alternative fuel vehicles. I strongly support 
tax credits for efficient air conditioners, water heaters and other 
appliances. I strongly support the tax credits for wind, solar, 
biomass, geothermal, and

[[Page S3414]]

other renewable electricity and energy production.
  The bill contains significant provisions to increase oil and gas 
production. As I have said, it includes new tax credits for marginal 
well and other production. It also includes loan guarantees and prices 
supports for the construction of a natural gas pipeline from the North 
Slope of Alaska to the Lower 48 States. This will move more than 35 
trillion cubic feet of natural gas to market, be the largest private 
works project ever undertaken in North America, and create hundreds of 
thousands of jobs.
  The bill also contains a very modest renewable portfolio standard 
that would require 10 percent of the Nation's electricity be produced 
from renewable energy sources by 2020. This standard is weaker than 
what I believe is possible. I have advocated that the Nation set a goal 
of producing 20 percent of its electricity from renewable sources by 
2020. Unfortunately, the Senate not only accepted a lower target, but 
it adopted an amendment that undermines the integrity of the RPS system 
allowing for the purchase of inexpensive credits, credits potentially 
below the market price of renewable electricity. Nevertheless, it is 
important to enshrine this important concept of a renewable portfolio 
standard into law.
  I supported the renewable fuel standard in the law. This provision 
was supported by the State of Massachusetts as a way to end more costly 
mandates under the Clean Air Act, ensure clean air, end the use of 
polluting MTBE, and create a national market for corn ethanol, biomass 
ethanol, and other renewable fuels.
  The bill's most significant failure is that it does nothing to 
meaningfully reduce oil consumption or enhance efficiency in the 
transportation sector. The Senate rejected a proposal I crafted with 
Senator McCain that would have raised fuel economy standards for 
America's passenger vehicles and save 1 million barrels of oil per day 
by 2015. The result is that the Senate has foregone action on the 
single greatest step we can take as a nation to reduce our dependence 
on oil, protect the economy from oil price shocks, and reduce harmful 
pollution.
  For the past year I have urged my colleagues to oppose drilling in 
the Arctic National Wildlife Refuge. I am grateful that a majority of 
the Senate voted to protect the refuge. I am grateful that, while this 
bill is inadequate, it does not open the refuge to oil drilling. I will 
oppose any attempt to add drilling in this bill in conference with the 
House.
  As I have said, this energy bill is not an energy policy for the 
Nation. It is a collection of policies, many good and many bad, that 
will, in total, move the Nation only incrementally forward. It is not 
by any means a solution to the challenges that we face. While I voted 
for this bill today, I pledge myself to continuing the fight for clean, 
reliable, and domestic energy and for a real energy policy for this 
Nation.
  Mrs. FEINSTEIN. Mr. President, when the members of the Senate Energy 
Committee, including Senator Schumer, Senator Cantwell, Senator Wyden, 
and I, began talking about doing a comprehensive energy bill more than 
a year ago there were three major things all of us said that we wanted 
to see in the bill.
  First we believed that we needed to reduce our energy consumption and 
hence our country's dependence on foreign oil.
  Second we wanted to get to the bottom of what was happening with 
energy markets in California and the West where electricity and natural 
gas prices were 10-25 times higher that they should have been.
  And we wanted to do all we could to ensure that a crisis of this 
magnitude could never happen again.
  And third, we wanted to address global warming by quantitatively and 
measurably reducing our emissions of greenhouse gases.
  These are still the elements I support in an energy bill. But the 
simple fact of the matter is that these elements are not in this bill.
  First the Senate rejected Senator Cantwell's and my amendment to 
provide transparency, oversight and authority by the Commodity Futures 
Trading Commission (CFTC) on energy derivative trading.
  What we saw in energy markets was the on-line trading of energy 
commodities like natural gas and electricity multiple times to drive up 
prices and escape any federal oversight or transparency whatsoever.
  This is what Enron was doing through its on-line trading company, 
Enron On-Line before the company went bankrupt.
  And Dynegy and Williams, two companies operating on-line exchanges 
similar to Enron On-Line have taken over some of Enron's market share 
and are trading without oversight or transparency either.
  The Senate had the opportunity to address this problem which arose 
from the Commodity Futures Modernization Act of 2000.
  But instead the Senate rejected our amendment which would have 
ensured that there was proper oversight for energy trading.
  So I don't think this energy bill will do a single thing that assures 
me that we won't have another crisis in my state.
  The Senate also had the opportunity to pass legislation to increase 
fuel economy standards. Senator Snowe and I introduced legislation last 
year that would have closed what is known as the SUV Loophole.
  That loophole allows SUVs and other light duty trucks to meet lower 
fuel economy standards than other passenger vehicles. The standard is 
27.5 miles per gallon for cars and 20.7 miles per gallon for SUVs.
  Our bill would have saved a million barrels of oil a day, reduced our 
dependence on foreign oil by 10 percent, and prevented more than 200 
million tons of carbon dioxide from entering the atmosphere each year.
  It was the single most important thing our country could have done 
not only to combat global warming, but to become more fuel-independent 
at the same time.
  I regret that we did not have the opportunity to vote on this measure 
as the Senate instead overwhelmingly defeated a much more ambitious 
proposal to significantly raise standards for all vehicles.

  I am convinced that had we not done that, the Feinstein-Snowe 
amendment would have had a real shot at winning.
  By a longshot however, the ethanol mandate is the most troublesome 
provision in the Senate energy bill.
  What was also sneaked into this bill without a hearing was 
essentially a new gas tax that will result in a wealth transfer from 
California and New York and other coastal States to States in the 
Midwest.
  It actually triples the ethanol market by mandate.
  And if a State does not need it, it forces that State to buy credits 
to pay for it.
  In fact, the mandate extorts California to use 2.68 billion gallons 
of ethanol over nine years that it does not need.
  All this for a substance that is already subsidized to the tune of 53 
cents per gallon and protected from any foreign competition through 
significant tariffs.
  No one knows for sure how much gas prices will increase because of 
this mandate.
  One recent analysis indicates that prices will increase 4 to 10 cents 
per gallon across the United States if the Senate energy bill becomes 
law.
  I believe that the price spikes in California will be even more 
severe beginning in about 2004 as our State is close to our refining 
capacity and using ethanol will shrink our gasoline supply and force us 
to refine more.
  California also does not have the necessary infrastructure in place 
to transport the ethanol to market.
  I am particularly concerned about the limited number of suppliers in 
the ethanol market.
  In fact, one company ADM controls 41 percent of the market.
  And of course, nobody really knows the long-term health and 
environmental effects of nearly tripling the amount of ethanol in our 
gasoline supply.
  Some evidence suggests that (1) reformulated gasoline with ethanol 
produces more smog pollution than reformulated gas without it; and (2) 
ethanol enables the toxic chemicals in gasoline to seep further into 
groundwater and ever faster than conventional gasoline.
  But just like when we introduced MTBE into our gasoline we simply

[[Page S3415]]

don't know what the ramifications will be.
  And of course to top it off this bill protects these energy producers 
from any future liability.
  And the funniest thing of all is that all this is for a gasoline 
additive that California and other States hardly need.
  With the exception of the winter months in some of the southern part 
of the State, California can meet all its Clean Air Act Standards with 
its own reformulated gasoline.
  In actuality we need to use very little ethanol.
  So that is why I strongly oppose this bill and I believe we will rue 
the day we passed this ethanol mandate and this energy bill.
  Mr. BUNNING. Mr. President, I rise today to talk about biodiesel, an 
alternative source of energy. I believe that we have made great strides 
on this energy bill. A sensible energy policy requires that we boost 
production of domestic energy sources while also balancing 
conservation. Biodiesel as an alternative fuel is one good way this 
energy bill will increase domestic production and lessen our dependence 
on foreign oil.
  I am very happy to hear that the Finance Committee's tax proposals 
were added to this bill. The tax proposals included provisions that 
promote conservation and expanded use of cleaner burning fuel.
  Also in these provisions are tax credits for biodiesel. The tax 
credits are a good start at encouraging the use of biodiesel as an 
alternative fuel source. However, the tax provisions do not treat all 
biodiesel the same.
  There are many types of biodiesel including animal fats, recycled 
cooking oils or restaurant greases, and vegetable oils made up of 
soybeans, sunflower seed, canola, safflower seed, and flaxseed. In the 
tax provisions, though, the vegetable oils are treated differently than 
the animal fat and recycled oils.
  There should be equal tax treatment for biodiesel. The different tax 
credits for biodiesel sends a confusing signal to the biodiesel market. 
It encourages growth only in one area of this beneficial renewable 
fuel, vegetable oil.
  In addition, vegetable production has highly federalized subsidies 
and a lucrative byproduct market. For instance, glycerin from soy 
refining is used in a variety of food and pharmaceutical processes, and 
has a value advantage of 10-15 cents per gallon of biodiesel. The 
rendering industry, the primary source of animal-based biodiesel 
feedstocks, receives no Federal support and has a more limited 
byproduct market.
  The unequal tax treatment is in stark contrast to the remainder of 
the energy bill. The bill includes all domestic energy sources in its 
renewable energy provisions and treats animal and vegetable sources 
biodiesel equally.
  Kentucky has a large amount of soybean crops. So, I support 
encouraging the use of vegetable oil and support the tax credits in the 
bill. However, tax incentives should not discriminate between different 
kinds of alternative fuels.
  One of the goals of the pending energy bill is to encourage 
development of renewable energy supplies. Including all sources in the 
tax provision will further this effort and maximize the positive impact 
on U.S. agriculture.
  I hope that we find a way to encourage all alternative sources of 
energy. This is important to our production and will strengthen our 
national security.
  Mr. JEFFORDS. Mr. President, I wish to state my support for the 
amendment offered by my distinguished colleague from Illinois, Senator 
Fitzgerald, and to express my extreme disappointment that it was not 
agreed to by this body.
  This very sensible amendment would have clarified that the 
incineration of municipal solid waste will not be treated as renewable 
energy for purposes of the renewable portfolio standard and for the 
Federal renewable energy purchase requirement.
  This issue arises because the burning of landfill waste in 
incinerators is one method of producing electricity. It produces only a 
minimal percentage of our electricity, but creates almost one quarter 
of the nation's mercury emissions, and significant levels of dioxin.
  Dioxin, a known carcinogen, cause impairment of immune, nervous, 
reproductive and endocrine systems, even at extremely low 
concentrations. Infants are particularly sensitive to dioxin because of 
dioxin concentrations in human breast milk. Studies of infants show up 
to 65 times the maximum dioxin exposure recommended by the 
Environmental Protection Agency.
  The National Academy of Science has found that although waste 
incinerators have reduced their dioxin air emissions, total dioxin 
releases in fly ash, bottom ash and other revenues have not decreased.
  According to the most recent EPA data, 2.2 tons of mercury were 
emitted from garbage incinerators in 2000. This accounts for almost 20 
percent of the nation's mercury emissions. Toxic amounts of mercury 
exist in our lakes, rivers and groundwater. Mercury causes neurological 
damage and birth defects, resulting in developmental delays and 
cognitive defects.
  The renewable portfolio standard contained in the bill is intended to 
provide incentives and market support for the production of clean, 
renewable energy technologies. These include wind, solar, geothermal 
and biolass energy. One of the primary reasons for promoting these 
energy sources is that they give us clean power. They provide 
electricity that is free of the toxic wastes and emissions associated 
with many of our traditional fuel supplies.
  Including the incineration of municipal solid waste in this category 
flies in the face of reason. If we want to keep mercury flowing into 
our streams and rivers, we can just pour more money into coal-fired 
power plants. An energy source that cripples our infants and causes 
cancer is not something we should support under the umbrella of 
renewable energy.
  I am aware that incinerators have made significant strides in 
reducing toxic emissions. However, as I have stated above, municipal 
solid waste incinerators still account for 20 percent of nationwide 
mercury emissions, and still contribute to the release of highly toxic 
dioxins.
  It is completely inappropriate to incentivize the continued release 
of these toxic substances as part of a provision aimed at clean, 
renewable energy.
  Neither the amendment nor the underlying bill language would in any 
way undermine or hamper the current incineration of municipal solid 
waste, and would not prohibit or discourage new incineration. Neither 
the amendment nor the underlying bill language will not create new 
regulations regarding incineration of municipal solid waste, nor change 
existing ones. All this amendment would have done is ensure that 
municipal solid waste is not encourage as a renewable energy resource.
  Including energy sources that result in highly toxic emissions does 
however undermine the foundation of the renewable portfolio standard, 
which is to help clean, renewable energies to compete against other 
energy sources.
  Mr. President, I am greatly disappointed that this amendment was 
defeated but intend to address this issue further in conference.
  Mr. REID. Mr. President, the world's energy system has evolved for 
thousands of years.
  Almost without trying, the global energy system has favored fuels 
that burn cleaner and more efficiently: from wood burning in 
prehistoric caves to the Franklin stove of the 18th century; to coal 
despite the fact that wood was more abundant; to oil required to meet 
the insatiable needs of a motorized transportation sector at the start 
of the 20th century; to natural gas, which can be distributed through a 
system of pipes right into the kitchen or a home furnace, or easily 
converted into electricity; and now to renewable energy sources.
  Faced with uncertainties in electricity energy markets, turmoil in 
the Mideast, the need to cut back on the fossil fuel emissions linked 
to global warming, local and regional air pollution that contributes to 
high rates of asthma and smog-filled national parks, the United States 
must diversify its energy supply using renewable energy.
  If State regulators approve Nevada Power's latest rate proposals for 
2002, Las Vegas electricity rates will have jumped a total of 75 
percent since 1999. In the same period, natural gas prices have 
doubled. We need to change the energy equation. We need to diversify

[[Page S3416]]

the Nation's energy supply to reduce volatility and ensure a stable 
supply of electricity. We must harness the brilliance of the sun, the 
strength of the wind, and the heat of the Earth to provide clean, 
renewable energy for our Nation.
  I am also pleased that the energy bill currently before the Senate 
contains a renewable portfolio standard requiring that a small, 
gradually growing percentage of the nation's power supply come from 
renewables such as wind, solar, biomass and geothermal sources over the 
next two decades.
  I am pleased that the tax provisions of this bill strengthen the 
production tax credit for renewable energy resources.
  Eligible renewable energy resources have been expanded from wind and 
poultry waste to include geothermal, solar, open-loop biomass, and 
animal waste. The credit has been extended for 5 years for geothermal 
and solar, and animal waste, and 3 years for biomass. We need this 
production tax credit to provide business certainty and ensure the 
growth of renewable energy development and to signal America's long-
term commitment to renewable energy. It is time to level the playing 
field--subsidies for fossil fuels dominate the Federal Tax Code, with 
62 percent of all Federal tax expenditures going to oil and gas 
companies.
  After pouring billions into oil and gas, we need to invest in a clean 
energy future.
  Other nations are developing renewable energy resources at a much 
faster rate than the United States. In 1990, America produced 90 
percent of the world's wind power; today we generate less than 25 
percent. Germany now has the lead in wind energy, and Japan in solar 
energy. Foreign corporations are using the same technology available to 
us--in fact, many of these technologies were developed in the U.S. But 
they have surpassed us because their governments have provide stable 
support for renewable energy production and use. America needs to 
reestablish its leadership in renewable energy.
  In the U.S. today, we get less than 3 percent of our electricity from 
renewable energy sources like wind, solar, geothermal and biomass. But 
the potential for much greater supply is there. For example, Nevada, is 
considered the Saudi Arabia of geothermal. My state could use 
geothermal energy to meet one-third of its electricity needs, but today 
this source of energy only supplies 2-3 percent. This needs to change.

  The good news is that the production tax credit for renewable energy 
resources really works to promote the growth of renewable energy.
  In 1990, the cost of wind energy was 22.5 cents per kilowatt hour 
and, today, with new technology and the help of a modest production tax 
credit, wind is a competitive energy source at 3 to 4 cents per 
kilowatt hour. At the Nevada Test Site, a new wind farm will provide 
260 megawatts to meet the needs of 260,000 people--more than 10 percent 
of Nevada's population within 5 years. In the last 5 years, wind energy 
has experienced a 30 percent growth rate. In 2001, wind energy capacity 
grew nationally from 2,600 Megawatts to 4,300 Megawatts, a 65 percent 
increase. With the benefit of the production tax credit, wind energy is 
the fastest growing renewable. We need to do the same for the other 
renewable energy resources.
  America needs to build its energy future on an environmental 
foundation that protects air and water quality.
  A recent article in The Journal of the American Medical Association 
revealed an alarming link between soot particles from power plants and 
motor vehicles and lung cancer and heart disease.
  This was an exhaustive study of 500,000 people in 16 American cities, 
whose lives and health have been tracked since 1982. Experts gave the 
study high marks. Its conclusions are obvious--we need to do a better 
job protecting the air we breathe.
  The adverse health effects of powerplant and vehicle emissions cost 
Americans billions in medical care, and our cost in human suffering is 
immeasurable. Simply put, the human cost of dirty air is staggering. If 
we factor in environmental and health effects, the real cost of energy 
becomes apparent, and renewables become the fuel of choice.
  America's abundant and untapped renewable resources can fuel our 
journey into a more prosperous and safer tomorrow without compromising 
air and water quality. The potential is enormous. We need to expand and 
extend the production tax credit to enable renewable energy to compete 
on a playing field that currently is heavily inclined towards the 
continued production of oil, gas, and coal. In many States, including 
Nevada, expanded renewable energy production will provide jobs in rural 
areas--areas that are desperate for economic growth.
  I urge my colleagues to support this tax package, with its provisions 
for a production tax credit to encourage the growth of renewable energy 
resources. Renewable energy--as an alternative to traditional energy 
sources--is a common-sense way to make sure that the American people 
have a reliable source of power at an affordable price. Renewable 
energy is the cornerstone of a successful, forward looking, and secure 
energy policy for the 21st century.
  Mr. REID. Mr. President, it is my understanding we are now going to 
move to final passage. I would like to say, before everyone votes--and 
we will be very quick here--we have spent approximately 6 weeks on this 
bill. It has been a tremendous amount of time and I have been here a 
lot of the time. But I want to extend the full appreciation of the 
entire Senate for the work done by the two managers of this bill. 
Senator Bingaman and Senator Murkowski have worked through some very 
difficult issues. I think they have made the Senate very proud in the 
work they have done.
  Mr. LOTT. Mr. President, I cannot let this opportunity go by. I will 
be brief so we can vote. I know Senators have obligations they want to 
fulfill, but I have to say we do owe a debt of gratitude from the 
Senate as a whole to the chairman and the ranking member of the Energy 
and Natural Resources Committee. They have been at this for 6 weeks. It 
has been at least 5 years since we spent that long--I don't think, 
since I have been in the Senate, we have spent 6 weeks on a bill. So 
this is a monumental undertaking. It is coming to a positive result.
  They provide bipartisan leadership. They have been persistent, and I 
thank them for that. I especially have to say to my colleague from 
Alaska, I appreciate his attitude. Even though I know his feelings on 
an issue that meant so much to him and the other Senator from Alaska, 
Mr. Stevens, he said we had to move forward on an energy policy for 
this country.
  You did the right thing for your country. I know in the end we are 
going to do the right thing for you and your State, too.
  I yield the floor.
  Mr. DASCHLE. Mr. President, we are now reaching the end of 6 weeks of 
debate on this energy bill. I want to thank Chairman Bingaman for his 
tireless leadership.
  He began this process by coordinating the work of nine separate 
committees, and he has done an amazing job of shepherding this large, 
difficult, and sometimes contentious piece of legislation to its 
conclusion.
  When we began this energy debate, I spoke about the need to keep in 
mind four key goals. I said that any energy plan we pass should 
increase our energy independence . . . it should be good for consumers 
. . . it should create jobs . . . and it should be responsible--both 
environmentally and fiscally.
  In a number of places, this bill meets those goals. In some, it falls 
short. But overall, this is a far more responsible, progressive, 
consumer-friendly energy policy than the one advanced by the 
Administration, or passed by the House.
  Our energy plan invests in new ideas, new technologies, and new 
approaches to old problems.
  It demonstrates that our energy policy need not be a tug-of-war 
between increased production and increased conservation. This bill 
helps us do both.
  For example, this bill encourages the construction of a pipeline to 
bring natural gas from Alaska to the lower forty-eight states. There 
are 35 trillion cubic feet of known natural gas reserves on the North 
Slope of Alaska.
  Right now, that gas is being pumped back into the ground because 
there's no way to get it to the American consumers who need it.

[[Page S3417]]

  Our nation faces a long-term shortage of natural gas, all experts 
agree. An Alaska pipeline would deliver at least 4.5 billion cubic feet 
of gas per day to the Midwest, the central point of the nation's gas 
delivery network. 4.5 billion cubic feet per day is nearly ten percent 
of America's daily gas consumption.
  Last month, Alaska Governor Tony Knowles met with me to discuss the 
additional provisions he felt were needed to invigorate this project. 
At his urging, and with the strong support of Senators Murkowski and 
Stevens, the bill we are clearing for conference today not only assures 
that any gas pipeline from Prudhoe Bay will run through Alaska, it also 
seeks to assure access to the gas for residential and business users in 
Alaska, protects access to the pipeline for future gas discoveries, and 
reduces the financial risk resulting from wildly fluctuating gas 
prices.
  The provisions we added are important to our nation's energy and 
economic security, and improve the viability of the Alaska gas pipeline 
project. They should be retained in conference, and I will work with 
Senator Murkowski and Governor Knowles to protect them.
  That pipeline is one example of how this bill will allow us to use 
our traditional fossil fuel supplies more intelligently.
  Other examples include tax incentives to increase common-sense 
conservation in our homes, expand the use of renewable energy like 
wind, solar and geothermal power, and encourage investments in new 
technologies to help us use energy sources like coal in a more clean 
and efficient manner.
  And, when it comes to energy efficiency, this bill also says that the 
federal government must lead by example.
  I also said at the beginning of this debate that we already look for 
the ``Made in America'' label on our clothes. We need to put that same 
``Made in America'' label on our energy, too.
  That's why this bill includes tax incentives to help us diversify our 
energy supplies by harnessing the power of the wind, the sun, and the 
heat of the earth itself, and to keep the energy produced from those 
sources affordable.
  And that's also why this bill triples the amount of ethanol we use.
  Yesterday, I was out in South Dakota at an ethanol plant with 
President Bush. I agree with the President when he said, ``[ethanol is] 
important for the agricultural sector of our economy, it's an important 
part of making sure we become less reliant on foreign sources of 
energy.''
  To that I would add that it's an important way of keeping our air 
clean, as well.
  Tripling the use of ethanol is a win, win, win, and I'm glad that's 
what this bill does.
  The electricity provisions in this bill will shore up the authority 
of the Federal Energy Regulatory Commission to make our electricity 
more reliable and competitive, and will establish a small but important 
renewable portfolio standard.
  Remember, ethanol and renewable energies come from American farmers 
and producers, pass through American refiners, and fuel American energy 
needs.
  No soldier will have to fight overseas to protect them. And no 
international cartel can turn off the spigot on us.
  It is important we make sure these provisions stay as part of this 
bill in the conference.
  On a personal note, I should add that crafting this fuels compromise 
took enormous effort, and I would like to thank Senators Jim Jeffords 
and Bob Smith of the EPW Committee, as well as Senators Tim Johnson, 
Dick Lugar, Ben Nelson and Chuck Hagel for their vision and hard work.
  I do regret that we failed to keep the vehicle fuel-efficiency 
provisions that were originally in this bill--something that could have 
been done without affecting safety or performance.
  That measure we would have saved American drivers billions of 
dollars--and saved our nation the same amount of oil we are currently 
importing from the Persian Gulf.
  Bold steps like that would have moved us much closer to energy 
independence, and I hope that we can work to increase vehicle fuel 
efficiency in conference.
  While I am frustrated that we didn't take that large step forward, 
Congress did the responsible thing by refusing to take a huge step 
backward by opening the Arctic National Wildlife Refuge for oil 
drilling.
  Ultimately, a bipartisan majority of the Senate concluded that 
drilling in the Arctic Refuge would do very little to help our economic 
situation or increase our energy independence--but would do a lot to 
damage one of the last pieces of pristine wilderness in this country.
  Finally, this bill reflects the growing bipartisan consensus that the 
threat of global climate change is real and, unless we act, will have 
devastating consequences for our children and grandchildren.
  The climate change provisions in this bill will help restore American 
credibility in this area and begin the long-overdue process of American 
engagement in solving this growing problem.
  In the end, this bill recognizes that we can't be content to pursue 
an energy policy based upon the old philosophy of dig, drill, and 
burn--and begins the process of moving towards more innovative 
approaches to our energy future.
  It doesn't get us all the way there, but it gets us moving in the 
right direction.
  I am hopeful that we can continue to move even further in that 
direction when this bill goes to conference. But for that to happen, we 
need to pass this bill now.
  It has been six weeks on the floor.
  We have had a good, open, and fair debate. We've debated and voted on 
dozens of amendments.
  Let us acknowledge the important role of conservation and renewable 
sources for our nation's energy future.
   Let us start moving towards a more balanced and far-sighted energy 
policy.
  Let us pass this bill.
  The PRESIDING OFFICER. Under the previous order, the substitute 
amendment, No. 2917, as amended, is agreed to.
  The amendment (No. 2917), as amended, was agreed to.
  The PRESIDING OFFICER. The question is on the engrossment and third 
reading of the bill.
  The bill (S. 517) was ordered to be engrossed for a third reading and 
was read the third time.
  The PRESIDING OFFICER. Under the previous order, the clerk will 
report H.R. 4 by title.
  The legislative clerk read as follows:

       A bill (H.R. 4) to enhance energy conservation, research 
     and development and to provide for security and diversity in 
     the energy supply for the American people, and for other 
     purposes.

  The PRESIDING OFFICER. Under the previous order, all after the 
enacting clause is stricken and the text of S. 517, as amended, is 
inserted in lieu thereof, and the clerk will read the bill for the 
third time.
  The amendment was ordered to be engrossed and the bill to be read a 
third time.
  The bill was read the third time.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill pass?
  Mr. BINGAMAN. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 88, nays 11, as follows:

                      [Rollcall Vote No. 94 Leg.]

                                YEAS--88

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Cochran
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Fitzgerald
     Frist
     Grassley
     Gregg
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchinson
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McConnell

[[Page S3418]]


     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stabenow
     Stevens
     Thomas
     Thompson
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                                NAYS--11

     Boxer
     Clinton
     Feingold
     Feinstein
     Graham
     Gramm
     Kennedy
     Kyl
     McCain
     Reed
     Schumer

                             NOT VOTING--1

       
     Helms
       
  The bill (H.R. 4) was passed.
  (The bill will be printed in a future edition of the Record.)
  Mr. BINGAMAN. I move to reconsider the vote and move to lay that 
motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. Under the previous order, the Senate insists 
on its amendment, requests a conference with the House on the 
disagreeing votes of the two Houses, and the Chair is authorized to 
appoint conferees in the following ratio: Energy Committee, 6 to 5; the 
Finance Committee, 3 to 2.

                          ____________________