[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[Senate]
[Pages S3688-S3788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001

  On April 25, 2002, the Senate amended and passed H.R. 4, as follows:

       Resolved, That the bill from the House of Representatives 
     (H.R. 4) entitled ``An Act 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.'', do pass with the following amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Energy Policy Act of 2002''.

     SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.

   DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                     TITLE I--REGIONAL COORDINATION

Sec. 101. Policy on regional coordination.
Sec. 102. Federal support for regional coordination.

                         TITLE II--ELECTRICITY

            Subtitle A--Amendments to the Federal Power Act

Sec. 201. Definitions.
Sec. 202. Electric utility mergers.

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Sec. 203. Market-based rates.
Sec. 204. Refund effective date.
Sec. 205. Open access transmission by certain utilities.
Sec. 206. Electric reliability standards.
Sec. 207. Market transparency rules.
Sec. 208. Access to transmission by intermittent generators.
Sec. 209. Enforcement.
Sec. 210. Electric power transmission systems.

    Subtitle B--Amendments to the Public Utility Holding Company Act

Sec. 221. Short title.
Sec. 222. Definitions.
Sec. 223. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 224. Federal access to books and records.
Sec. 225. State access to books and records.
Sec. 226. Exemption authority.
Sec. 227. Affiliate transactions.
Sec. 228. Applicability.
Sec. 229. Effect on other regulations.
Sec. 230. Enforcement.
Sec. 231. Savings provisions.
Sec. 232. Implementation.
Sec. 233. Transfer of resources.
Sec. 234. Inter-agency review of competition in the wholesale and 
              retail markets for electric energy.
Sec. 235. GAO study on implementation.
Sec. 236. Effective date.
Sec. 237. Authorization of appropriations.
Sec. 238. Conforming amendments to the Federal Power Act.

Subtitle C--Amendments to the Public Utility Regulatory Policies Act of 
                                  1978

Sec. 241. Real-time pricing and time-of-use metering standards.
Sec. 242. Adoption of additional standards.
Sec. 243. Technical assistance.
Sec. 244. Cogeneration and small power production purchase and sale 
              requirements.
Sec. 245. Net metering.

                    Subtitle D--Consumer Protections

Sec. 251. Information disclosure.
Sec. 252. Consumer privacy.
Sec. 253. Office of Consumer Advocacy.
Sec. 254. Unfair trade practices.
Sec. 255. Applicable procedures.
Sec. 256. Federal Trade Commission enforcement.
Sec. 257. State authority.
Sec. 258. Application of subtitle.
Sec. 259. Definitions.

       Subtitle E--Renewable Energy and Rural Construction Grants

Sec. 261. Renewable energy production incentive.
Sec. 262. Assessment of renewable energy resources.
Sec. 263. Federal purchase requirement.
Sec. 264. Renewable portfolio standard.
Sec. 265. Renewable energy on Federal land.

                     Subtitle F--General Provisions

Sec. 271. Change 3 cents to 1.5 cents.
Sec. 272. Bonneville Power Administration bonds.

                  TITLE III--HYDROELECTRIC RELICENSING

Sec. 301. Alternative conditions and fishways.

                        TITLE IV--INDIAN ENERGY

Sec. 401. Comprehensive Indian energy program.
Sec. 402. Office of Indian Energy Policy and Programs.
Sec. 403. Conforming amendments.
Sec. 404. Siting energy facilities on tribal lands.
Sec. 405. Indian Mineral Development Act review.
Sec. 406. Renewable energy study.
Sec. 407. Federal Power Marketing Administrations.
Sec. 408. Feasibility study of combined wind and hydropower 
              demonstration project.

                         TITLE V--NUCLEAR POWER

             Subtitle A--Price-Anderson Act Reauthorization

Sec. 501. Short title.
Sec. 502. Extension of indemnification authority.
Sec. 503. Department of Energy liability limit.
Sec. 504. Incidents outside the United States.
Sec. 505. Reports.
Sec. 506. Inflation adjustment.
Sec. 507. Civil penalties.
Sec. 508. Treatment of modular reactors.
Sec. 509. Effective date.

                  Subtitle B--Miscellaneous Provisions

Sec. 511. Uranium sales.
Sec. 512. Reauthorization of thorium reimbursement.
Sec. 513. Fast Flux Test Facility.
Sec. 514. Nuclear Power 2010.
Sec. 515. Office of Spent Nuclear Fuel Research.
Sec. 516. Decommissioning pilot program.

                  Subtitle C--Growth of Nuclear Energy

Sec. 521. Combined license periods.

                   Subtitle D--NRC Regulatory Reform

Sec. 531. Antitrust review.
Sec. 532. Decommissioning.

                    Subtitle E--NRC Personnel Crisis

Sec. 541. Elimination of pension offset.
Sec. 542. NRC training program.

     DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                    TITLE VI--OIL AND GAS PRODUCTION

Sec. 601. Permanent authority to operate the Strategic Petroleum 
              Reserve.
Sec. 602. Federal onshore leasing programs for oil and gas.
Sec. 603. Oil and gas lease acreage limitations.
Sec. 604. Orphaned and abandoned wells on Federal land.
Sec. 605. Orphaned and abandoned oil and gas well program.
Sec. 606. Offshore development.
Sec. 607. Coalbed methane study.
Sec. 608. Fiscal policies to maximize recovery of domestic oil and gas 
              resources.
Sec. 609. Strategic Petroleum Reserve.
Sec. 610. Hydraulic fracturing.
Sec. 611. Authorization of appropriations.
Sec. 612. Preservation of oil and gas resource data.
Sec. 613. Resolution of Federal resource development conflicts in the 
              Powder River Basin.

                    TITLE VII--NATURAL GAS PIPELINES

                Subtitle A--Alaska Natural Gas Pipeline

Sec. 701. Short title.
Sec. 702. Findings.
Sec. 703. Purposes.
Sec. 704. Issuance of certificate of public convenience and necessity.
Sec. 705. Environmental reviews.
Sec. 706. Pipeline expansion.
Sec. 707. Federal Coordinator.
Sec. 708. Judicial review.
Sec. 709. State jurisdiction over in-State delivery of natural gas.
Sec. 710. Loan guarantee.
Sec. 711. Study of alternative means of construction.
Sec. 712. Clarification of ANGTA status and authorities.
Sec. 713. Definitions.
Sec. 714. Sense of the Senate.
Sec. 715. Alaskan pipeline construction training program.

                    Subtitle B--Operating Pipelines

Sec. 721. Environmental review and permitting of natural gas pipeline 
              projects.

                      Subtitle C--Pipeline Safety

               Part I--Short Title; Amendment of Title 49

Sec. 741. Short title; amendment of title 49, United States Code.

            Part II--Pipeline Safety Improvement Act of 2002

Sec. 761. Implementation of Inspector General recommendations.
Sec. 762. NTSB safety recommendations.
Sec. 763. Qualifications of pipeline personnel.
Sec. 764. Pipeline integrity inspection program.
Sec. 765. Enforcement.
Sec. 766. Public education, emergency preparedness, and community 
              right-to-know.
Sec. 767. Penalties.
Sec. 768. State oversight role.
Sec. 769. Improved data and data availability.
Sec. 770. Research and development.
Sec. 771. Pipeline integrity technical advisory committee.
Sec. 772. Authorization of appropriations.
Sec. 773. Operator assistance in investigations.
Sec. 774. Protection of employees providing pipeline safety 
              information.
Sec. 775. State pipeline safety advisory committees.
Sec. 776. Fines and penalties.
Sec. 777. Study of rights-of-way.
Sec. 778. Study of natural gas reserve.
Sec. 779. Study and report on natural gas pipeline and storage 
              facilities in New England.

           Part III--Pipeline Security Sensitive Information

Sec. 781. Meeting community right-to-know without security risks.
Sec. 782. Technical assistance for security of pipeline facilities.
Sec. 783. Criminal penalties for damaging or destroying a facility.

    DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                     TITLE VIII--FUELS AND VEHICLES

 Subtitle A--CAFE Standards, Alternative Fuels, and Advanced Technology

Sec. 801. Increased fuel economy standards.
Sec. 802. Expedited procedures for congressional increase in fuel 
              economy standards.
Sec. 803. Revised considerations for decisions on maximum feasible 
              average fuel economy.
Sec. 804. Extension of maximum fuel economy increase for alternative 
              fueled vehicles.
Sec. 805. Procurement of alternative fueled and hybrid light duty 
              trucks.
Sec. 806. Use of alternative fuels.
Sec. 807. Hybrid electric and fuel cell vehicles.
Sec. 808. Diesel fueled vehicles.
Sec. 809. Fuel cell demonstration.
Sec. 810. Bus replacement.
Sec. 811. Average fuel economy standards for pickup trucks.
Sec. 812. Exception to HOV passenger requirements for alternative fuel 
              vehicles.
Sec. 813. Data collection.
Sec. 814. Green school bus pilot program.
Sec. 815. Fuel cell bus development and demonstration program.
Sec. 816. Authorization of appropriations.
Sec. 817. Temporary biodiesel credit expansion.
Sec. 818. Neighborhood electric vehicles.
Sec. 819. Credit for hybrid vehicles, dedicated alternative fuel 
              vehicles, and infrastructure.
Sec. 820. Renewable content of motor vehicle fuel.
Sec. 820A. Federal agency ethanol-blended gasoline and biodiesel 
              purchasing requirement.
Sec. 820B. Commercial byproducts from municipal solid waste loan 
              guarantee program.

            Subtitle B--Additional Fuel Efficiency Measures

Sec. 821. Fuel efficiency of the Federal fleet of automobiles.
Sec. 822. Idling reduction systems in heavy duty vehicles.
Sec. 823. Conserve By Bicycling program.
Sec. 824. Fuel cell vehicle program.

                 Subtitle C--Federal Reformulated Fuels

Sec. 831. Short title.

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Sec. 832. Leaking underground storage tanks.
Sec. 833. Authority for water quality protection from fuels.
Sec. 834. Elimination of oxygen content requirement for reformulated 
              gasoline.
Sec. 835. Public health and environmental impacts of fuels and fuel 
              additives.
Sec. 836. Analyses of motor vehicle fuel changes.
Sec. 837. Additional opt-in areas under reformulated gasoline program.
Sec. 838. Federal enforcement of State fuels requirements.
Sec. 839. Fuel system requirements harmonization study.
Sec. 840. Review of Federal procurement initiatives relating to use of 
              recycled products and fleet and transportation 
              efficiency.

   TITLE IX--ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME CONSUMERS

      Subtitle A--Low Income Assistance and State Energy Programs

Sec. 901. Increased funding for LIHEAP, weatherization assistance, and 
              State energy grants.
Sec. 902. State energy programs.
Sec. 903. Energy efficient schools.
Sec. 904. Low income community energy efficiency pilot program.
Sec. 905. Energy efficient appliance rebate programs.

                 Subtitle B--Federal Energy Efficiency

Sec. 911. Energy management requirements.
Sec. 912. Energy use measurement and accountability.
Sec. 913. Federal building performance standards.
Sec. 914. Procurement of energy efficient products.
Sec. 915. Repeal of energy savings performance contract sunset.
Sec. 916. Energy savings performance contract definitions.
Sec. 917. Review of energy savings performance contract program.
Sec. 918. Federal Energy Bank.
Sec. 919. Energy and water saving measures in congressional buildings.
Sec. 920. Increased use of recovered material in federally funded 
              projects involving procurement of cement or concrete.

        Subtitle C--Industrial Efficiency and Consumer Products

Sec. 921. Voluntary commitments to reduce industrial energy intensity.
Sec. 922. Authority to set standards for commercial products.
Sec. 923. Additional definitions.
Sec. 924. Additional test procedures.
Sec. 925. Energy labeling.
Sec. 926. Energy Star Program.
Sec. 927. Energy conservation standards for central air-conditioners 
              and heat pumps.
Sec. 928. Energy conservation standards for additional consumer and 
              commercial products.
Sec. 929. Consumer education on energy efficiency benefits of air-
              conditioning, heating, and ventilation maintenance.
Sec. 930. Study of energy efficiency standards.

                     Subtitle D--Housing Efficiency

Sec. 931. Capacity building for energy efficient, affordable housing.
Sec. 932. Increase of CDBG public services cap for energy conservation 
              and efficiency activities.
Sec. 933. FHA mortgage insurance incentives for energy efficient 
              housing.
Sec. 934. Public housing capital fund.
Sec. 935. Grants for energy-conserving improvements for assisted 
              housing.
Sec. 936. North American Development Bank.
Sec. 937. Capital fund.
Sec. 938. Energy-efficient appliances.
Sec. 939. Energy efficiency standards.
Sec. 940. Energy strategy for HUD.

                Subtitle E--Rural and Remote Communities

Sec. 941. Short title.
Sec. 942. Findings and purpose.
Sec. 943. Definitions.
Sec. 944. Authorization of appropriations.
Sec. 945. Statement of activities and review.
Sec. 946. Eligible activities.
Sec. 947. Allocation and distribution of funds.
Sec. 948. Rural and remote community electrification grants.
Sec. 949. Additional authorization of appropriations.
Sec. 950. Rural recovery community development block grants.

   DIVISION D--INTEGRATION OF ENERGY POLICY AND CLIMATE CHANGE POLICY

                TITLE X--NATIONAL CLIMATE CHANGE POLICY

                     Subtitle A--Sense of Congress

Sec. 1001. Sense of Congress on climate change.

                  Subtitle B--Climate Change Strategy

Sec. 1011. Short title.
Sec. 1012. Definitions.
Sec. 1013. National climate change strategy.
Sec. 1014. Office of National Climate Change Policy.
Sec. 1015. Office of Climate Change Technology.
Sec. 1016. Additional offices and activities.

               Subtitle C--Science and Technology Policy

Sec. 1021. Global climate change in the Office of Science and 
              Technology Policy.
Sec. 1022. Director of Office of Science and Technology Policy 
              Functions.

                  Subtitle D--Miscellaneous Provisions

Sec. 1031. Additional information for regulatory review.
Sec. 1032. Greenhouse gas emissions from Federal facilities.

               TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

Sec. 1101. Purpose.
Sec. 1102. Definitions.
Sec. 1103. Establishment of memorandum of agreement.
Sec. 1104. National Greenhouse Gas Database.
Sec. 1105. Greenhouse gas reduction reporting.
Sec. 1106. Measurement and verification.
Sec. 1107. Independent reviews.
Sec. 1108. Review of participation.
Sec. 1109. Enforcement.
Sec. 1110. Report on statutory changes and harmonization.
Sec. 1111. Authorization of appropriations.

       DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

          TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

Sec. 1201. Short title.
Sec. 1202. Findings.
Sec. 1203. Definitions.
Sec. 1204. Construction with other laws.

                     Subtitle A--Energy Efficiency

Sec. 1211. Enhanced energy efficiency research and development.
Sec. 1212. Energy efficiency science initiative.
Sec. 1213. Next generation lighting initiative.
Sec. 1214. Railroad efficiency.
Sec. 1215. High power density industry program.
Sec. 1216. Research regarding precious metal catalysis.

                      Subtitle B--Renewable Energy

Sec. 1221. Enhanced renewable energy research and development.
Sec. 1222. Bioenergy programs.
Sec. 1223. Hydrogen research and development.

                       Subtitle C--Fossil Energy

Sec. 1231. Enhanced fossil energy research and development.
Sec. 1232. Power plant improvement initiative.
Sec. 1233. Research and development for advanced safe and efficient 
              coal mining technologies.
Sec. 1234. Ultra-deepwater and unconventional resource exploration and 
              production technologies.
Sec. 1235. Research and development for new natural gas transportation 
              technologies.
Sec. 1236. Authorization of appropriations for Office of Arctic Energy.
Sec. 1237. Clean coal technology loan.

                       Subtitle D--Nuclear Energy

Sec. 1241. Enhanced nuclear energy research and development.
Sec. 1242. University nuclear science and engineering support.
Sec. 1243. Nuclear energy research initiative.
Sec. 1244. Nuclear energy plant optimization program.
Sec. 1245. Nuclear energy technology development program.

                 Subtitle E--Fundamental Energy Science

Sec. 1251. Enhanced programs in fundamental energy science.
Sec. 1252. Nanoscale science and engineering research.
Sec. 1253. Advanced scientific computing for energy missions.
Sec. 1254. Fusion energy sciences program and planning.

        Subtitle F--Energy, Safety, and Environmental Protection

Sec. 1261. Critical energy infrastructure protection research and 
              development.
Sec. 1262. Research and demonstration for remediation of groundwater 
              from energy activities.--

           TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

               Subtitle A--Department of Energy Programs

Sec. 1301. Department of Energy global change research.
Sec. 1302. Amendments to the Federal Nonnuclear Research and 
              Development Act of 1974.

             Subtitle B--Department of Agriculture Programs

Sec. 1311. Carbon sequestration basic and applied research.
Sec. 1312. Carbon sequestration demonstration projects and outreach.
Sec. 1313. Carbon storage and sequestration accounting research.

          Subtitle C--International Energy Technology Transfer

Sec. 1321. Clean energy technology exports program.
Sec. 1322. International energy technology deployment program.

           Subtitle D--Climate Change Science and Information

      Part I--Amendments to the Global Change Research Act of 1990

Sec. 1331. Amendment of Global Change Research Act of 1990.
Sec. 1332. Changes in definitions.
Sec. 1333. Change in committee name and structure.
Sec. 1334. Change in national global change research plan.
Sec. 1335. Integrated Program Office.
Sec. 1336. Research grants.
Sec. 1337. Evaluation of information.

           Part II--National Climate Services and Monitoring

Sec. 1341. Amendment of National Climate Program Act.
Sec. 1342. Changes in findings.
Sec. 1343. Tools for regional planning.

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Sec. 1344. Authorization of appropriations.
Sec. 1345. National Climate Service Plan.
Sec. 1346. International Pacific research and cooperation.
Sec. 1347. Reporting on trends.
Sec. 1348. Arctic research and policy.
Sec. 1349. Abrupt climate change research.

              Part III--Ocean and Coastal Observing System

Sec. 1351. Ocean and coastal observing system.
Sec. 1352. Authorization of appropriations.

                 Subtitle E--Climate Change Technology

Sec. 1361. NIST greenhouse gas functions.
Sec. 1362. Development of new measurement technologies.
Sec. 1363. Enhanced environmental measurements and standards.
Sec. 1364. Technology development and diffusion.
Sec. 1365. Authorization of appropriations.

         Subtitle F--Climate Adaptation and Hazards Prevention

                   Part I--Assessment and Adaptation

Sec. 1371. Regional climate assessment and adaptation program.
Sec. 1372. Coastal vulnerability and adaptation.
Sec. 1373. Arctic research center.

            Part II--Forecasting and Planning Pilot Programs

Sec. 1381. Remote sensing pilot projects.
Sec. 1382. Database establishment.
Sec. 1383. Air quality research, forecasts and warnings.
Sec. 1384. Definitions.
Sec. 1385. Authorization of appropriations.

      TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

Sec. 1401. Definitions.
Sec. 1402. Availability of funds.
Sec. 1403. Cost sharing.
Sec. 1404. Merit review of proposals.
Sec. 1405. External technical review of departmental programs.
Sec. 1406. Improved coordination and management of civilian science and 
              technology programs.
Sec. 1407. Improved coordination of technology transfer activities.
Sec. 1408. Technology infrastructure program.
Sec. 1409. Small business advocacy and assistance.
Sec. 1410. Other transactions.
Sec. 1411. Mobility of scientific and technical personnel.
Sec. 1412. National Academy of Sciences report.
Sec. 1413. Report on technology readiness and barriers to technology 
              transfer.
Sec. 1414. United States-Mexico energy technology cooperation.

                    TITLE XV--PERSONNEL AND TRAINING

Sec. 1501. Workforce trends and traineeship grants.
Sec. 1502. Postdoctoral and senior research fellowships in energy 
              research.
Sec. 1503. Training guidelines for electric energy industry personnel.
Sec. 1504. National Center on Energy Management and Building 
              Technologies.
Sec. 1505. Improved access to energy-related scientific and technical 
              careers.
Sec. 1506. National power plant operations technology and education 
              center.
Sec. 1507. Federal mine inspectors.

             DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                    TITLE XVI--TECHNOLOGY ASSESSMENT

Sec. 1601. National Science and Technology Assessment Service.

                          TITLE XVII--STUDIES

Sec. 1701. Regulatory reviews.
Sec. 1702. Assessment of dependence of State of Hawaii on oil.
Sec. 1703. Study of siting an electric transmission system on Amtrak 
              right-of-way.
Sec. 1704. Updating of insular area renewable energy and energy 
              efficiency plans.
Sec. 1705. Consumer Energy Commission.
Sec. 1706. Study of natural gas and other energy transmission 
              infrastructure across the great lakes.
Sec. 1707. National Academy of Sciences study of procedures for 
              selection and assessment of certain routes for shipment 
              of spent nuclear fuel from research nuclear reactors.
Sec. 1708. Report on energy savings and water use.
Sec. 1709. Report on research on hydrogen production and use.

               DIVISION G--ENERGY INFRASTRUCTURE SECURITY

              TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

               Subtitle A--Department of Energy Programs

Sec. 1801. Definitions.
Sec. 1802. Role of the Department of Energy.
Sec. 1803. Critical energy infrastructure programs.
Sec. 1804. Advisory Committee on Energy Infrastructure Security.
Sec. 1805. Best practices and standards for energy infrastructure 
              security.

            Subtitle B--Department of the Interior Programs

Sec. 1811. Outer Continental Shelf energy infrastructure security.

                   DIVISION H--ENERGY TAX INCENTIVES

Sec. 1900. Short title; etc.

    TITLE XIX--EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY 
                         PRODUCTION TAX CREDIT

Sec. 1901. Three-year extension of credit for producing electricity 
              from wind and poultry waste.
Sec. 1902. Credit for electricity produced from biomass.
Sec. 1903. Credit for electricity produced from swine and bovine waste 
              nutrients, geothermal energy, and solar energy.
Sec. 1904. Treatment of persons not able to use entire credit.
Sec. 1905. Credit for electricity produced from small irrigation power.
Sec. 1906. Credit for electricity produced from municipal biosolids and 
              recycled sludge.

       TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

Sec. 2001. Alternative motor vehicle credit.
Sec. 2002. Modification of credit for qualified electric vehicles.
Sec. 2003. Credit for installation of alternative fueling stations.
Sec. 2004. Credit for retail sale of alternative fuels as motor vehicle 
              fuel.
Sec. 2005. Small ethanol producer credit.
Sec. 2006. All alcohol fuels taxes transferred to Highway Trust Fund.
Sec. 2007. Increased flexibility in alcohol fuels tax credit.
Sec. 2008. Incentives for biodiesel.
Sec. 2009. Credit for taxpayers owning commercial power takeoff 
              vehicles.
Sec. 2010. Modifications to the incentives for alternative vehicles and 
              fuels.

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

Sec. 2101. Credit for construction of new energy efficient home.
Sec. 2102. Credit for energy efficient appliances.
Sec. 2103. Credit for residential energy efficient property.
Sec. 2104. Credit for business installation of qualified fuel cells and 
              stationary microturbine power plants.
Sec. 2105. Energy efficient commercial buildings deduction.
Sec. 2106. Allowance of deduction for qualified new or retrofitted 
              energy management devices.
Sec. 2107. Three-year applicable recovery period for depreciation of 
              qualified energy management devices.
Sec. 2108. Energy credit for combined heat and power system property.
Sec. 2109. Credit for energy efficiency improvements to existing homes.
Sec. 2110. Allowance of deduction for qualified new or retrofitted 
              water submetering devices.
Sec. 2111. Three-year applicable recovery period for depreciation of 
              qualified water submetering devices.

                   TITLE XXII--CLEAN COAL INCENTIVES

Subtitle A--Credit for Emission Reductions and Efficiency Improvements 
        in Existing Coal-based Electricity Generation Facilities

Sec. 2201. Credit for production from a qualifying clean coal 
              technology unit.

 Subtitle B--Incentives for Early Commercial Applications of Advanced 
                        Clean Coal Technologies

Sec. 2211. Credit for investment in qualifying advanced clean coal 
              technology.
Sec. 2212. Credit for production from a qualifying advanced clean coal 
              technology unit.

     Subtitle C--Treatment of Persons Not Able To Use Entire Credit

Sec. 2221. Treatment of persons not able to use entire credit.

                  TITLE XXIII--OIL AND GAS PROVISIONS

Sec. 2301. Oil and gas from marginal wells.
Sec. 2302. Natural gas gathering lines treated as 7-year property.
Sec. 2303. Expensing of capital costs incurred in complying with 
              environmental protection agency sulfur regulations.
Sec. 2304. Environmental tax credit.
Sec. 2305. Determination of small refiner exception to oil depletion 
              deduction.
Sec. 2306. Marginal production income limit extension.
Sec. 2307. Amortization of geological and geophysical expenditures.
Sec. 2308. Amortization of delay rental payments.
Sec. 2309. Study of coal bed methane.
Sec. 2310. Extension and modification of credit for producing fuel from 
              a nonconventional source.
Sec. 2311. Natural gas distribution lines treated as 15-year property.

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

Sec. 2401. Ongoing study and reports regarding tax issues resulting 
              from future restructuring decisions.
Sec. 2402. Modifications to special rules for nuclear decommissioning 
              costs.
Sec. 2403. Treatment of certain income of cooperatives.
Sec. 2404. Sales or dispositions to implement Federal Energy Regulatory 
              Commission or State electric restructuring policy.
Sec. 2405. Application of temporary regulations to certain output 
              contracts.
Sec. 2406. Treatment of certain development income of cooperatives.

                    TITLE XXV--ADDITIONAL PROVISIONS

Sec. 2501. Extension of accelerated depreciation and wage credit 
              benefits on Indian reservations.
Sec. 2502. Study of effectiveness of certain provisions by GAO.
Sec. 2503. Credit for production of Alaska natural gas.
Sec. 2504. Sale of gasoline and diesel fuel at duty-free sales 
              enterprises.

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Sec. 2505. Treatment of dairy property.
Sec. 2506. Clarification of excise tax exemptions for agricultural 
              aerial applicators.
Sec. 2507. Modification of rural airport definition.
Sec. 2508. Exemption from ticket taxes for transportation provided by 
              seaplanes.

                DIVISION I--IRAQ OIL IMPORT RESTRICTION

                TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

Sec. 2601. Short title and findings.
Sec. 2602. Prohibition on Iraqi-origin petroleum imports.
Sec. 2603. Termination/Presidential certification.
Sec. 2604. Humanitarian interests.
Sec. 2605. Definitions.
Sec. 2606. Effective date.

                       DIVISION J--MISCELLANEOUS

                  TITLE XXVII--MISCELLANEOUS PROVISION

Sec. 2701. Fair treatment of Presidential judicial nominees.

   DIVISION A--RELIABLE AND DIVERSE POWER GENERATION AND TRANSMISSION

                     TITLE I--REGIONAL COORDINATION

     SEC. 101. POLICY ON REGIONAL COORDINATION.

       (a) Statement of Policy.--It is the policy of the Federal 
     Government to encourage States to coordinate, on a regional 
     basis, State energy policies to provide reliable and 
     affordable energy services to the public while minimizing the 
     impact of providing energy services on communities and the 
     environment.
       (b) Definition of Energy Services.--For purposes of this 
     section, the term ``energy services'' means--
       (1) the generation or transmission of electric energy,
       (2) the transportation, storage, and distribution of crude 
     oil, residual fuel oil, refined petroleum product, or natural 
     gas, or
       (3) the reduction in load through increased efficiency, 
     conservation, or load control measures.

     SEC. 102. FEDERAL SUPPORT FOR REGIONAL COORDINATION.

       (a) Technical Assistance.--The Secretary of Energy shall 
     provide technical assistance to States and regional 
     organizations formed by two or more States to assist them in 
     coordinating their energy policies on a regional basis. Such 
     technical assistance may include assistance in--
       (1) identifying the areas with the greatest energy resource 
     potential, and assessing future supply availability and 
     demand requirements,
       (2) planning, coordinating, and siting additional energy 
     infrastructure, including generating facilities, electric 
     transmission facilities, pipelines, refineries, and 
     distributed generation facilities to maximize the efficiency 
     of energy resources and infrastructure and meet regional 
     needs with the minimum adverse impacts on the environment,
       (3) identifying and resolving problems in distribution 
     networks,
       (4) developing plans to respond to surge demand or 
     emergency needs, and
       (5) developing renewable energy, energy efficiency, 
     conservation, and load control programs.
       (b) Annual Conference on Regional Energy Coordination.--
       (1) Annual conference.--The Secretary of Energy shall 
     convene an annual conference to promote regional coordination 
     on energy policy and infrastructure issues.
       (2) Participation.--The Secretary of Energy shall invite 
     appropriate representatives of Federal, State, and regional 
     energy organizations, and other interested parties.
       (3) State and federal agency cooperation.--The Secretary of 
     Energy shall consult and cooperate with State and regional 
     energy organizations, the Secretary of the Interior, the 
     Secretary of Agriculture, the Secretary of Commerce, the 
     Secretary of the Treasury, the Chairman of the Federal Energy 
     Regulatory Commission, the Administrator of the Environmental 
     Protection Agency, and the Chairman of the Council on 
     Environmental Quality in the planning and conduct of the 
     conference.
       (4) Agenda.--The Secretary of Energy, in consultation with 
     the officials identified in paragraph (3) and participants 
     identified in paragraph (2), shall establish an agenda for 
     each conference that promotes regional coordination on energy 
     policy and infrastructure issues.
       (5) Recommendations.--Not later than 60 days after the 
     conclusion of each annual conference, the Secretary of Energy 
     shall report to the President and the Congress 
     recommendations arising out of the conference that may 
     improve--
       (A) regional coordination on energy policy and 
     infrastructure issues, and
       (B) Federal support for regional coordination.

                         TITLE II--ELECTRICITY

            Subtitle A--Amendments to the Federal Power Act

     SEC. 201. DEFINITIONS.

       (a) Definition of Electric Utility.--Section 3(22) of the 
     Federal Power Act (16 U.S.C. 796(22)) is amended to read as 
     follows:
       ``(22) `electric utility' means any person or Federal or 
     State agency (including any municipality) that sells electric 
     energy; such term includes the Tennessee Valley Authority and 
     each Federal power marketing agency.''.
       (b) Definition of Transmitting Utility.--Section 3(23) of 
     the Federal Power Act (16 U.S.C. 796(23)) is amended to read 
     as follows:
       ``(23) Transmitting utility.--The term `transmitting 
     utility' means an entity (including any entity described in 
     section 201(f)) that owns or operates facilities used for the 
     transmission of electric energy in--
       ``(A) interstate commerce; or
       ``(B) for the sale of electric energy at wholesale.''.

     SEC. 202. ELECTRIC UTILITY MERGERS.

       Section 203(a) of the Federal Power Act (16 U.S.C. 824b) is 
     amended to read as follows:
       ``(a)(1) No public utility shall, without first having 
     secured an order of the Commission authorizing it to do so--
       ``(A) sell, lease, or otherwise dispose of the whole of its 
     facilities subject to the jurisdiction of the Commission, or 
     any part thereof of a value in excess of $10,000,000,
       ``(B) merge or consolidate, directly or indirectly, such 
     facilities or any part thereof with the facilities of any 
     other person, by any means whatsoever,
       ``(C) purchase, acquire, or take any security of any other 
     public utility, or
       ``(D) purchase, lease, or otherwise acquire existing 
     facilities for the generation of electric energy unless such 
     facilities will be used exclusively for the sale of electric 
     energy at retail.
       ``(2) No holding company in a holding company system that 
     includes a transmitting utility or an electric utility 
     company shall purchase, acquire, or take any security of, or, 
     by any means whatsoever, directly or indirectly, merge or 
     consolidate with a transmitting utility, an electric utility 
     company, a gas utility company, or a holding company in a 
     holding company system that includes a transmitting utility, 
     an electric utility company, or a gas utility company, 
     without first having secured an order of the Commission 
     authorizing it to do so.
       ``(3) Upon application for such approval the Commission 
     shall give reasonable notice in writing to the Governor and 
     State commission of each of the States in which the physical 
     property affected, or any part thereof, is situated, and to 
     such other persons as it may deem advisable.
       ``(4) After notice and opportunity for hearing, the 
     Commission shall approve the proposed disposition, 
     consolidation, acquisition, or control, if it finds that the 
     proposed transaction--
       ``(A) will be consistent with the public interest;
       ``(B) will not adversely affect the interests of consumers 
     of electric energy of any public utility that is a party to 
     the transaction or is an associate company of any party to 
     the transaction;
       ``(C) will not impair the ability of the Commission or any 
     State commission having jurisdiction over any public utility 
     that is a party to the transaction or an associate company of 
     any party to the transaction to protect the interests of 
     consumers or the public; and
       ``(D) will not lead to cross-subsidization of associate 
     companies or encumber any utility assets for the benefit of 
     an associate company.
       ``(5) The Commission shall, by rule, adopt procedures for 
     the expeditious consideration of applications for the 
     approval of dispositions, consolidations, or acquisitions 
     under this section. Such rules shall identify classes of 
     transactions, or specify criteria for transactions, that 
     normally meet the standards established in paragraph (4), and 
     shall require the Commission to grant or deny an application 
     for approval of a transaction of such type within 90 days 
     after the conclusion of the hearing or opportunity to comment 
     under paragraph (4). If the Commission does not act within 90 
     days, such application shall be deemed granted unless the 
     Commission finds that further consideration is required to 
     determine whether the proposed transaction meets the 
     standards of paragraph (4) and issues one or more orders 
     tolling the time for acting on the application for an 
     additional 90 days.
       ``(6) For purposes of this subsection, the terms `associate 
     company', `electric utility company', `gas utility company', 
     `holding company', and `holding company system' have the 
     meaning given those terms in the Public Utility Holding 
     Company Act of 2002.''.

     SEC. 203. MARKET-BASED RATES.

       (a) Approval of Market-Based Rates.--Section 205 of the 
     Federal Power Act (16 U.S.C. 824d) is amended by adding at 
     the end the following:
       ``(h) The Commission may determine whether a market-based 
     rate for the sale of electric energy subject to the 
     jurisdiction of the Commission is just and reasonable and not 
     unduly discriminatory or preferential. In making such 
     determination, the Commission shall consider such factors as 
     the Commission may deem to be appropriate and in the public 
     interest, including to the extent the Commission considers 
     relevant to the wholesale power market--
       ``(1) market power;
       ``(2) the nature of the market and its response mechanisms; 
     and
       ``(3) reserve margins.''.
       (b) Revocation of Market-Based Rates.--Section 206 of the 
     Federal Power Act (16 U.S.C. 824e) is amended by adding at 
     the end the following:
       ``(f) Whenever the Commission, after a hearing had upon its 
     own motion or upon complaint, finds that a rate charged by a 
     public utility authorized to charge a market-based rate under 
     section 205 is unjust, unreasonable, unduly discriminatory or 
     preferential, the Commission shall determine the just and 
     reasonable rate and fix the same by order.''.

     SEC. 204. REFUND EFFECTIVE DATE.

       Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b)) 
     is amended by--
       (1) striking ``the date 60 days after the filing of such 
     complaint nor later than 5 months after the expiration of 
     such 60-day period'' in the second sentence and inserting 
     ``the date of the filing of such complaint nor later than 5 
     months after the filing of such complaint'';
       (2) striking ``60 days after'' in the third sentence and 
     inserting ``of''; and
       (3) striking ``expiration of such 60-day period'' in the 
     third sentence and inserting ``publication date''.

[[Page S3693]]

     SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.

       Part II of the Federal Power Act is further amended by 
     inserting after section 211 the following:


          ``open access by unregulated transmitting utilities

       ``Sec. 211A. (a) Subject to section 212(h), the Commission 
     may, by rule or order, require an unregulated transmitting 
     utility to provide transmission services--
       ``(1) at rates that are comparable to those that the 
     unregulated transmitting utility charges itself, and
       ``(2) on terms and conditions (not relating to rates) that 
     are comparable to those under Commission rules that require 
     public utilities to offer open access transmission services 
     and that are not unduly discriminatory or preferential.
       ``(b) The Commission shall exempt from any rule or order 
     under this subsection any unregulated transmitting utility 
     that--
       ``(1) sells no more than 4,000,000 megawatt hours of 
     electricity per year;
       ``(2) does not own or operate any transmission facilities 
     that are necessary for operating an interconnected 
     transmission system (or any portion thereof); or
       ``(3) meets other criteria the Commission determines to be 
     in the public interest.
       ``(c) The rate changing procedures applicable to public 
     utilities under subsections (c) and (d) of section 205 are 
     applicable to unregulated transmitting utilities for purposes 
     of this section.
       ``(d) In exercising its authority under paragraph (1), the 
     Commission may remand transmission rates to an unregulated 
     transmitting utility for review and revision where necessary 
     to meet the requirements of subsection (a).
       ``(e) The provision of transmission services under 
     subsection (a) does not preclude a request for transmission 
     services under section 211.
       ``(f) The Commission may not require a State or 
     municipality to take action under this section that 
     constitutes a private business use for purposes of section 
     141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
       ``(g) For purposes of this subsection, the term 
     `unregulated transmitting utility' means an entity that--
       ``(1) owns or operates facilities used for the transmission 
     of electric energy in interstate commerce, and
       ``(2) is either an entity described in section 201(f) or a 
     rural electric cooperative.''.

     SEC. 206. ELECTRIC RELIABILITY STANDARDS.

       Part II of the Federal Power Act (16 U.S.C 824 et seq.) is 
     amended by inserting the following after section 215 as added 
     by this Act:

     ``SEC. 216. ELECTRIC RELIABILITY.

       ``(a) Definitions.--For purposes of this section--
       ``(1) `bulk-power system' means the network of 
     interconnected transmission facilities and generating 
     facilities;
       ``(2) `electric reliability organization' means a self-
     regulating organization certified by the Commission under 
     subsection (c) whose purpose is to promote the reliability of 
     the bulk-power system; and
       ``(3) `reliability standard' means a requirement to provide 
     for reliable operation of the bulk-power system approved by 
     the Commission under this section.
       ``(b) Jurisidiction and Applicability.--The Commission 
     shall have jurisdiction, within the United States, over an 
     electric reliability organization, any regional entities, and 
     all users, owners and operators of the bulk-power system, 
     including but not limited to the entities described in 
     section 201(f), for purposes of approving reliability 
     standards and enforcing compliance with this section. All 
     users, owners and operators of the bulk-power system shall 
     comply with reliability standards that take effect under this 
     section.
       ``(c) Certification.--(1) The Commission shall issue a 
     final rule to implement the requirements of this section not 
     later than 180 days after the date of enactment of this 
     section.
       ``(2) Following the issuance of a Commission rule under 
     paragraph (1), any person may submit an application to the 
     Commission for certification as an electric reliability 
     organization. The Commission may certify an applicant if the 
     Commission determines that the applicant--
       ``(A) has the ability to develop, and enforce reliability 
     standards that provide for an adequate level of reliability 
     of the bulk-power system;
       ``(B) has established rules that--
       ``(i) assure its independence of the users and owners and 
     operators of the bulk-power system; while assuring fair 
     stakeholder representation in the selection of its directors 
     and balanced decisionmaking in any committee or subordinate 
     organizational structure;
       ``(ii) allocate equitably dues, fees, and other charges 
     among end users for all activities under this section;
       ``(iii) provide fair and impartial procedures for 
     enforcement of reliability standards through imposition of 
     penalties (including limitations on activities, functions, or 
     operations, or other appropriate sanctions); and
       ``(iv) provide for reasonable notice and opportunity for 
     public comment, due process, openness, and balance of 
     interests in developing reliability standards and otherwise 
     exercising its duties.
       ``(3) If the Commission receives two or more timely 
     applications that satisfy the requirements of this 
     subsection, the Commission shall approve only the application 
     it concludes will best implement the provisions of this 
     section.
       ``(d) Reliability Standards.--(1) An electric reliability 
     organization shall file a proposed reliability standard or 
     modification to a reliability standard with the Commission.
       ``(2) The Commission may approve a proposed reliability 
     standard or modification to a reliability standard if it 
     determines that the standard is just, reasonable, not unduly 
     discriminatory or preferential, and in the public interest. 
     The Commission shall give due weight to the technical 
     expertise of the electric reliability organization with 
     respect to the content of a proposed standard or modification 
     to a reliability standard, but shall not defer with respect 
     to its effect on competition.
       ``(3) The electric reliability organization and the 
     Commission shall rebuttably presume that a proposal from a 
     regional entity organized on an interconnection-wide basis 
     for a reliability standard or modification to a reliability 
     standard to be applicable on an interconnection-wide basis is 
     just, reasonable, and not unduly discriminatory or 
     preferential, and in the public interest.
       ``(4) The Commission shall remand to the electric 
     reliability organization for further consideration a proposed 
     reliability standard or a modification to a reliability 
     standard that the Commission disapproves in whole or in part.
       ``(5) The Commission, upon its own motion or upon 
     complaint, may order an electric reliability organization to 
     submit to the Commission a proposed reliability standard or a 
     modification to a reliability standard that addresses a 
     specific matter if the Commission considers such a new or 
     modified reliability standard appropriate to carry out this 
     section.
       ``(e) Enforcement.--(1) An electric reliability 
     organization may impose a penalty on a user or owner or 
     operator of the bulk-power system if the electric reliability 
     organization, after notice and an opportunity for a hearing--
       ``(A) finds that the user or owner or operator of the bulk-
     power system has violated a reliability standard approved by 
     the Commission under subsection (d); and
       ``(B) files notice with the Commission, which shall affirm, 
     set aside or modify the action.
       ``(2) On its own motion or upon complaint, the Commission 
     may order compliance with a reliability standard and may 
     impose a penalty against a user or owner or operator of the 
     bulk-power system, if the Commission finds, after notice and 
     opportunity for a hearing, that the user or owner or operator 
     of the bulk-power system has violated or threatens to violate 
     a reliability standard.
       ``(3) The Commission shall establish regulations 
     authorizing the electric reliability organization to enter 
     into an agreement to delegate authority to a regional entity 
     for the purpose of proposing and enforcing reliability 
     standards (including related activities) if the regional 
     entity satisfies the provisions of subsection (c)(2) (A) and 
     (B) and the agreement promotes effective and efficient 
     administration of bulk-power system reliability, and may 
     modify such delegation. The electric reliability organization 
     and the Commission shall rebuttably presume that a proposal 
     for delegation to a regional entity organized on an 
     interconnection-wide basis promotes effective and efficient 
     administration of bulk-power system reliability and should be 
     approved. Such regulation may provide that the Commission may 
     assign the electric reliability organization's authority to 
     enforce reliability standards directly to a regional entity 
     consistent with the requirements of this paragraph.
       ``(4) The Commission may take such action as is necessary 
     or appropriate against the electric reliability organization 
     or a regional entity to ensure compliance with a reliability 
     standard or any Commission order affecting the electric 
     reliability organization or a regional entity.
       ``(f) Changes in Electricity Relialb1lity Organization 
     Rules.--An electric reliability organization shall file with 
     the Commission for approval any proposed rule or proposed 
     rule change, accompanied by an explanation of its basis and 
     purpose. The Commission, upon its own motion or complaint, 
     may propose a change to the rules of the electric reliability 
     organization. A proposed rule or proposed rule change shall 
     take effect upon a finding by the Commission, after notice 
     and opportunity for comment, that the change is just, 
     reasonable, not unduly discriminatory or preferential, is in 
     the public interest, and satisfies the requirements of 
     subsection (c)(2).
       ``(g) Coordination With Canada and Mexico.--(1) The 
     electric reliability organization shall take all appropriate 
     steps to gain recognition in Canada and Mexico.
       ``(2) The President shall use his best efforts to enter 
     into international agreements with the governments of Canada 
     and Mexico to provide for effective compliance with 
     reliability standards and the effectiveness of the electric 
     reliability organization in the United States and Canada or 
     Mexico.
       ``(h) Reliability Reports.--The electric reliability 
     organization shall conduct periodic assessments of the 
     reliability and adequacy of the interconnected bulk-power 
     system in North America.
       ``(i) Savings Provisions.--(1) The electric reliability 
     organization shall have authority to develop and enforce 
     compliance with standards for the reliable operation of only 
     the bulk-power system.
       ``(2) This section does not provide the electric 
     reliability organization or the Commission with the authority 
     to order the construction of additional generation or 
     transmission capacity or to set and enforce compliance with 
     standards for adequacy or safety of electric facilities or 
     services.
       ``(3) Nothing in this section shall be construed to preempt 
     any authority of any State to take action to ensure the 
     safety, adequacy, and reliability of electric service within 
     that State, as long as such action is not inconsistent with 
     any reliability standard.
       ``(4) Within 90 days of the application of the electric 
     reliability organization or other affected party, and after 
     notice and opportunity for comment, the Commission shall 
     issue a final order determining whether a State action is 
     inconsistent with a reliability standard, taking into

[[Page S3694]]

     consideration any recommendation of the electric reliability 
     organization.
       ``(5) The Commission, after consultation with the electric 
     reliability organization, may stay the effectiveness of any 
     State action, pending the Commission's issuance of a final 
     order.
       ``(j) Application of Antitrust Laws.--
       ``(1) In general.--To the extent undertaken to develop, 
     implement, or enforce a reliability standard, each of the 
     following activities shall not, in any action under the 
     antitrust laws, be deemed illegal per se--
       ``(A) activities undertaken by an electric reliability 
     organization under this section, and
       ``(B) activities of a user or owner or operator of the 
     bulk-power system undertaken in good faith under the rules of 
     an electric reliability organization.
       ``(2) Rule of Reason.--In any action under the antitrust 
     laws, an activity described in paragraph (1) shall be judged 
     on the basis of its reasonableness, taking into account all 
     relevant factors affecting competition and reliability.
       ``(3) Definition.--For purposes of this subsection, 
     `antitrust laws' has the meaning given the term in subsection 
     (a) of the first section of the Clayton Act (15 U.S.C. 
     12(a)), except that it includes section 5 of the Federal 
     Trade Commission Act (15 U. S.C. 45) to the extent that 
     section 5 applies to unfair methods of competition.
       ``(k) Regional Advisory Bodies.--The Commission shall 
     establish a regional advisory body on the petition of at 
     least two-thirds of the States within a region that have more 
     than one-half of their electric load served within the 
     region. A regional advisory body shall be composed of one 
     member from each participating State in the region, appointed 
     by the Governor of each State, and may include 
     representatives of agencies, States, and provinces outside 
     the United States. A regional advisory body may provide 
     advice to the electric reliability organization, a regional 
     reliability entity, or the Commission regarding the 
     governance of an existing or proposed regional reliability 
     entity within the same region, whether a standard proposed to 
     apply within the region is just, reasonable, not unduly 
     discriminatory or preferential, and in the public interest, 
     whether fees proposed to be assessed within the region are 
     just, reasonable, not unduly discriminatory or preferential, 
     and in the public interest and any other responsibilities 
     requested by the Commission. The Commission may give 
     deference to the advice of any such regional advisory body if 
     that body is organized on an interconnection-wide basis.
       ``(l) Application to Alaska and Hawaii.--The provisions of 
     this section do not apply to Alaska or Hawaii.''.

     SEC. 207. MARKET TRANSPARENCY RULES.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 216. MARKET TRANSPARENCY RULES.

       ``(a) Commission Rules.--Not later than 180 days after the 
     date of enactment of this section, the Commission shall issue 
     rules establishing an electronic information system to 
     provide information about the availability and price of 
     wholesale electric energy and transmission services to the 
     Commission, State commissions, buyers and sellers of 
     wholesale electric energy, users of transmission services, 
     and the public on a timely basis.
       ``(b) Information Required.--The Commission shall require--
       ``(1) each regional transmission organization to provide 
     statistical information about the available capacity and 
     capacity constraints of transmission facilities operated by 
     the organization; and
       ``(2) each broker, exchange, or other market-making entity 
     that matches offers to sell and offers to buy wholesale 
     electric energy in interstate commerce to provide statistical 
     information about the amount and sale price of sales of 
     electric energy at wholesale in interstate commerce it 
     transacts.
       ``(c) Timely Basis.--The Commission shall require the 
     information required under subsection (b) to be posted on the 
     Internet as soon as practicable and updated as frequently as 
     practicable.
       ``(d) Protection of Sensitive Information.--The Commission 
     shall exempt from disclosure commercial or financial 
     information that the Commission, by rule or order, determines 
     to be privileged, confidential, or otherwise sensitive.''.

     SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT GENERATORS.

       Part II of the Federal Power Act is further amended by 
     adding at the end the following:

     ``SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT 
                   GENERATORS.

       ``(a) Fair Treatment of Intermittent Generators.--The 
     Commission shall ensure that all transmitting utilities 
     provide transmission service to intermittent generators in a 
     manner that does not unduly prejudice or disadvantage such 
     generators for characteristics that are--
       ``(1) inherent to intermittent energy resources; and
       ``(2) are beyond the control of such generators.
       ``(b) Policies.--The Commission shall ensure that the 
     requirement in subsection (a) is met by adopting such 
     policies as it deems appropriate which shall include the 
     following:
       ``(1) Subject to the sole exception set forth in paragraph 
     (2), the Commission shall ensure that the rates transmitting 
     utilities charge intermittent generator customers for 
     transmission services do not unduly prejudice or disadvantage 
     intermittent generator customers for scheduling deviations.
       ``(2) The Commission may exempt a transmitting utility from 
     the requirement set forth in paragraph (1) if the 
     transmitting utility demonstrates that scheduling deviations 
     by its intermittent generator customers are likely to have an 
     adverse impact on the reliability of the transmitting 
     utility's system.
       ``(3) The Commission shall ensure that to the extent any 
     transmission charges recovering the transmitting utility's 
     embedded costs are assessed to such intermittent generators, 
     they are assessed to such generators on the basis of 
     kilowatt-hours generated or some other method to ensure that 
     they are fully recovered by the transmitting utility.
       ``(4) The Commission shall require transmitting utilities 
     to offer to intermittent generators, and may require 
     transmitting utilities to offer to all transmission 
     customers, access to nonfirm transmission service.
       ``(c) Definitions.--As used in this section:
       ``(1) The term `intermittent generator' means a facility 
     that generates electricity using wind or solar energy and no 
     other energy source.
       ``(2) The term `nonfirm transmission service' means 
     transmission service provided on an `as available' basis.
       ``(3) The term `scheduling deviation' means delivery of 
     more or less energy than has previously been forecast in a 
     schedule submitted by an intermittent generator to a control 
     area operator or transmitting utility.''.

     SEC. 209. ENFORCEMENT.

       (a) Complaints.--Section 306 of the Federal Power Act (16 
     U.S.C. 825e) is amended by--
       (1) inserting ``electric utility,'' after ``Any person,''; 
     and
       (2) inserting ``transmitting utility,'' after ``licensee'' 
     each place it appears.
       (b) Investigations.--Section 307(a) of the Federal Power 
     Act (16 U.S.C. 825f(a)) is amended by inserting ``or 
     transmitting utility'' after ``any person'' in the first 
     sentence.
       (c) Review of Commission Orders.--Section 313(a) of the 
     Federal Power Act (16 U.S.C. 8251) is amended by inserting 
     ``electric utility,'' after ``Any person,'' in the first 
     sentence.
       (d) Criminal Penalties.--Section 316(c) of the Federal 
     Power Act (16 U.S.C. 825o(c)) is repealed.
       (e) Civil Penalties.--Section 316A of the Federal Power Act 
     (16 U.S.C. 825o-1) is amended by striking ``section 211, 212, 
     213, or 214'' each place it appears and inserting ``Part 
     II''.

     SEC. 210. 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.

    Subtitle B--Amendments to the Public Utility Holding Company Act

     SEC. 221. SHORT TITLE.

       This subtitle may be cited as the ``Public Utility Holding 
     Company Act of 2002''.

     SEC. 222. DEFINITIONS.

       For purposes of this subtitle:
       (1) The term ``affiliate'' of a company means any company, 
     5 percent or more of the outstanding voting securities of 
     which are owned, controlled, or held with power to vote, 
     directly or indirectly, by such company.
       (2) The term ``associate company'' of a company means any 
     company in the same holding company system with such company.
       (3) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (4) The term ``company'' means a corporation, partnership, 
     association, joint stock company, business trust, or any 
     organized group of persons, whether incorporated or not, or a 
     receiver, trustee, or other liquidating agent of any of the 
     foregoing.
       (5) The term ``electric utility company'' means any company 
     that owns or operates facilities used for the generation, 
     transmission, or distribution of electric energy for sale.
       (6) The terms ``exempt wholesale generator'' and ``foreign 
     utility company'' have the same meanings as in sections 32 
     and 33, respectively, of the Public Utility Holding Company 
     Act of 1935 (15 U.S.C. 79z-5a, 79z-5b), as those sections 
     existed on the day before the effective date of this 
     subtitle.
       (7) The term ``gas utility company'' means any company that 
     owns or operates facilities used for distribution at retail 
     (other than the distribution only in enclosed portable 
     containers or distribution to tenants or employees of the 
     company operating such facilities for their own use and not 
     for resale) of natural or manufactured gas for heat, light, 
     or power.
       (8) The term ``holding company'' means--
       (A) any company that directly or indirectly owns, controls, 
     or holds, with power to vote, 10 percent or more of the 
     outstanding voting securities of a public utility company or 
     of a holding company of any public utility company; and
       (B) any person, determined by the Commission, after notice 
     and opportunity for hearing, to exercise directly or 
     indirectly (either alone or pursuant to an arrangement or 
     understanding with one or more persons) such a controlling 
     influence over the management or policies of any public 
     utility company or holding company as to make it necessary or 
     appropriate for the rate protection of utility customers with 
     respect to rates that such person be subject to the 
     obligations, duties, and liabilities imposed by this subtitle 
     upon holding companies.
       (9) The term ``holding company system'' means a holding 
     company, together with its subsidiary companies.
       (10) The term ``jurisdictional rates'' means rates 
     established by the Commission for the transmission of 
     electric energy in interstate commerce, the sale of electric 
     energy at wholesale in interstate commerce, the 
     transportation of natural gas in interstate commerce, and the 
     sale in interstate commerce of natural gas for resale for 
     ultimate public consumption for domestic, commercial, 
     industrial, or any other use.
       (11) The term ``natural gas company'' means a person 
     engaged in the transportation of natural gas in interstate 
     commerce or the sale of such gas in interstate commerce for 
     resale.

[[Page S3695]]

       (12) The term ``person'' means an individual or company.
       (13) The term ``public utility'' means any person who owns 
     or operates facilities used for transmission of electric 
     energy in interstate commerce or sales of electric energy at 
     wholesale in interstate commerce.
       (14) The term ``public utility company'' means an electric 
     utility company or a gas utility company.
       (15) The term ``State commission'' means any commission, 
     board, agency, or officer, by whatever name designated, of a 
     State, municipality, or other political subdivision of a 
     State that, under the laws of such State, has jurisdiction to 
     regulate public utility companies.
       (16) The term ``subsidiary company'' of a holding company 
     means--
       (A) any company, 10 percent or more of the outstanding 
     voting securities of which are directly or indirectly owned, 
     controlled, or held with power to vote, by such holding 
     company; and
       (B) any person, the management or policies of which the 
     Commission, after notice and opportunity for hearing, 
     determines to be subject to a controlling influence, directly 
     or indirectly, by such holding company (either alone or 
     pursuant to an arrangement or understanding with one or more 
     other persons) so as to make it necessary for the rate 
     protection of utility customers with respect to rates that 
     such person be subject to the obligations, duties, and 
     liabilities imposed by this subtitle upon subsidiary 
     companies of holding companies.
       (17) The term ``voting security'' means any security 
     presently entitling the owner or holder thereof to vote in 
     the direction or management of the affairs of a company.

     SEC. 223. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 
                   1935.

       The Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79 et seq.) is repealed.

     SEC. 224. FEDERAL ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Each holding company and each associate 
     company thereof shall maintain, and shall make available to 
     the Commission, such books, accounts, memoranda, and other 
     records as the Commission deems to be relevant to costs 
     incurred by a public utility or natural gas company that is 
     an associate company of such holding company and necessary or 
     appropriate for the protection of utility customers with 
     respect to jurisdictional rates.
       (b) Affiliate Companies.--Each affiliate of a holding 
     company or of any subsidiary company of a holding company 
     shall maintain, and shall make available to the Commission, 
     such books, accounts, memoranda, and other records with 
     respect to any transaction with another affiliate, as the 
     Commission deems to be relevant to costs incurred by a public 
     utility or natural gas company that is an associate company 
     of such holding company and necessary or appropriate for the 
     protection of utility customers with respect to 
     jurisdictional rates.
       (c) Holding Company Systems.--The Commission may examine 
     the books, accounts, memoranda, and other records of any 
     company in a holding company system, or any affiliate 
     thereof, as the Commission deems to be relevant to costs 
     incurred by a public utility or natural gas company within 
     such holding company system and necessary or appropriate for 
     the protection of utility customers with respect to 
     jurisdictional rates.
       (d) Confidentiality.--No member, officer, or employee of 
     the Commission shall divulge any fact or information that may 
     come to his or her knowledge during the course of examination 
     of books, accounts, memoranda, or other records as provided 
     in this section, except as may be directed by the Commission 
     or by a court of competent jurisdiction.

     SEC. 225. STATE ACCESS TO BOOKS AND RECORDS.

       (a) In General.--Upon the written request of a State 
     commission having jurisdiction to regulate a public utility 
     company in a holding company system, the holding company or 
     any associate company or affiliate thereof, other than such 
     public utility company, wherever located, shall produce for 
     inspection books, accounts, memoranda, and other records 
     that--
       (1) have been identified in reasonable detail by the State 
     commission;
       (2) the State commission deems are relevant to costs 
     incurred by such public utility company; and
       (3) are necessary for the effective discharge of the 
     responsibilities of the State commission with respect to such 
     proceeding.
       (b) Limitation.--Subsection (a) does not apply to any 
     person that is a holding company solely by reason of 
     ownership of one or more qualifying facilities under the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2601 et seq.).
       (c) Confidentiality of Information.--The production of 
     books, accounts, memoranda, and other records under 
     subsection (a) shall be subject to such terms and conditions 
     as may be necessary and appropriate to safeguard against 
     unwarranted disclosure to the public of any trade secrets or 
     sensitive commercial information.
       (d) Effect on State Law.--Nothing in this section shall 
     preempt applicable State law concerning the provision of 
     books, accounts, memoranda, and other records, or in any way 
     limit the rights of any State to obtain books, accounts, 
     memoranda, and other records under any other Federal law, 
     contract, or otherwise.
       (e) Court Jurisdiction.--Any United States district court 
     located in the State in which the State commission referred 
     to in subsection (a) is located shall have jurisdiction to 
     enforce compliance with this section.

     SEC. 226. EXEMPTION AUTHORITY.

       (a) Rulemaking.--Not later than 90 days after the effective 
     date of this subtitle, the Commission shall promulgate a 
     final rule to exempt from the requirements of section 224 any 
     person that is a holding company, solely with respect to one 
     or more--
       (1) qualifying facilities under the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.);
       (2) exempt wholesale generators; or
       (3) foreign utility companies.
       (b) Other Authority.--The Commission shall exempt a person 
     or transaction from the requirements of section 224, if, upon 
     application or upon the motion of the Commission--
       (1) the Commission finds that the books, accounts, 
     memoranda, and other records of any person are not relevant 
     to the jurisdictional rates of a public utility or natural 
     gas company; or
       (2) the Commission finds that any class of transactions is 
     not relevant to the jurisdictional rates of a public utility 
     or natural gas company.

     SEC. 227. AFFILIATE TRANSACTIONS.

       (a) Commission Authority Unaffected.--Nothing in this 
     subtitle shall limit the authority of the Commission under 
     the Federal Power Act (16 U.S.C. 791a et seq.) to require 
     that jurisdictional rates are just and reasonable, including 
     the ability to deny or approve the pass through of costs, the 
     prevention of cross-subsidization, and the promulgation of 
     such rules and regulations as are necessary or appropriate 
     for the protection of utility consumers.
       (b) Recovery of Costs.--Nothing in this subtitle shall 
     preclude the Commission or a State commission from exercising 
     its jurisdiction under otherwise applicable law to determine 
     whether a public utility company, public utility, or natural 
     gas company may recover in rates any costs of an activity 
     performed by an associate company, or any costs of goods or 
     services acquired by such public utility company from an 
     associate company.

     SEC. 228. APPLICABILITY.

       Except as otherwise specifically provided in this subtitle, 
     no provision of this subtitle shall apply to, or be deemed to 
     include--
       (1) the United States;
       (2) a State or any political subdivision of a State;
       (3) any foreign governmental authority not operating in the 
     United States;
       (4) any agency, authority, or instrumentality of any entity 
     referred to in paragraph (1), (2), or (3); or
       (5) any officer, agent, or employee of any entity referred 
     to in paragraph (1), (2), or (3) acting as such in the course 
     of his or her official duty.

     SEC. 229. EFFECT ON OTHER REGULATIONS.

       Nothing in this subtitle precludes the Commission or a 
     State commission from exercising its jurisdiction under 
     otherwise applicable law to protect utility customers.

     SEC. 230. ENFORCEMENT.

       The Commission shall have the same powers as set forth in 
     sections 306 through 317 of the Federal Power Act (16 U.S.C. 
     825e-825p) to enforce the provisions of this subtitle.

     SEC. 231. SAVINGS PROVISIONS.

       (a) In General.--Nothing in this subtitle prohibits a 
     person from engaging in or continuing to engage in activities 
     or transactions in which it is legally engaged or authorized 
     to engage on the effective date of this subtitle.
       (b) Effect on Other Commission Authority.--Nothing in this 
     subtitle limits the authority of the Commission under the 
     Federal Power Act (16 U.S.C. 791a et seq.) (including section 
     301 of that Act) or the Natural Gas Act (15 U.S.C. 717 et 
     seq.) (including section 8 of that Act).

     SEC. 232. IMPLEMENTATION.

       Not later than 18 months after the date of enactment of 
     this subtitle, the Commission shall--
       (1) promulgate such regulations as may be necessary or 
     appropriate to implement this subtitle (other than section 
     225); and
       (2) submit to the Congress detailed recommendations on 
     technical and conforming amendments to Federal law necessary 
     to carry out this subtitle and the amendments made by this 
     subtitle.

     SEC. 233. TRANSFER OF RESOURCES.

       All books and records that relate primarily to the 
     functions transferred to the Commission under this subtitle 
     shall be transferred from the Securities and Exchange 
     Commission to the Commission.

     SEC. 234. INTER-AGENCY REVIEW OF COMPETITION IN THE WHOLESALE 
                   AND RETAIL MARKETS FOR ELECTRIC ENERGY.

       (a) Task Force.--There is established an inter-agency task 
     force, to be known as the ``Electric Energy Market 
     Competition Task Force'' (referred to in this section as the 
     ``task force''), which shall consist of--
       (1) one member each from--
       (A) the Department of Justice, to be appointed by the 
     Attorney General of the United States;
       (B) the Federal Energy Regulatory Commission, to be 
     appointed by the chairman of that Commission; and
       (C) the Federal Trade Commission, to be appointed by the 
     chairman of that Commission; and
       (2) two advisory members (who shall not vote), of whom--
       (A) one shall be appointed by the Secretary of Agriculture 
     to represent the Rural Utility Service; and
       (B) one shall be appointed by the Chairman of the 
     Securities and Exchange Commission to represent that 
     Commission.
       (b) Study and Report.--
       (1) Study.--The task force shall perform a study and 
     analysis of the protection and promotion of competition 
     within the wholesale and retail market for electric energy in 
     the United States.
       (2) Report.--
       (A) Final report.--Not later than 1 year after the 
     effective date of this subtitle, the task force shall submit 
     a final report of its findings under paragraph (1) to the 
     Congress.

[[Page S3696]]

       (B) Public comment.--At least 60 days before submission of 
     a final report to the Congress under subparagraph (A), the 
     task force shall publish a draft report in the Federal 
     Register to provide for public comment.
       (c) Focus.--The study required by this section shall 
     examine--
       (1) the best means of protecting competition within the 
     wholesale and retail electric market;
       (2) activities within the wholesale and retail electric 
     market that may allow unfair and unjustified discriminatory 
     and deceptive practices;
       (3) activities within the wholesale and retail electric 
     market, including mergers and acquisitions, that deny market 
     access or suppress competition;
       (4) cross-subsidization that may occur between regulated 
     and nonregulated activities; and
       (5) the role of State public utility commissions in 
     regulating competition in the wholesale and retail electric 
     market.
       (d) Consultation.--In performing the study required by this 
     section, the task force shall consult with and solicit 
     comments from its advisory members, the States, 
     representatives of the electric power industry, and the 
     public.

     SEC. 235. GAO STUDY ON IMPLEMENTATION.

       (a) Study.--The Comptroller General shall conduct a study 
     of the success of the Federal Government and the States 
     during the 18-month period following the effective date of 
     this subtitle in--
       (1) the prevention of anticompetitive practices and other 
     abuses by public utility holding companies, including cross-
     subsidization and other market power abuses; and
       (2) the promotion of competition and efficient energy 
     markets to the benefit of consumers.
       (b) Report to Congress.--Not earlier than 18 months after 
     the effective date of this subtitle or later than 24 months 
     after that effective date, the Comptroller General shall 
     submit a report to the Congress on the results of the study 
     conducted under subsection (a), including probable causes of 
     its findings and recommendations to the Congress and the 
     States for any necessary legislative changes.

     SEC. 236. EFFECTIVE DATE.

       This subtitle shall take effect 18 months after the date of 
     enactment of this subtitle.

     SEC. 237. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such funds as may 
     be necessary to carry out this subtitle.

     SEC. 238. CONFORMING AMENDMENTS TO THE FEDERAL POWER ACT.

       (a) Conflict of Jurisdiction.--Section 318 of the Federal 
     Power Act (16 U.S.C. 825q) is repealed.
       (b) Definitions.--(1) Section 201(g) of the Federal Power 
     Act (16 U.S.C. 824(g)) is amended by striking ``1935'' and 
     inserting ``2002''.
       (2) Section 214 of the Federal Power Act (16 U.S.C. 824m) 
     is amended by striking ``1935'' and inserting ``2002''.

Subtitle C--Amendments to the Public Utility Regulatory Policies Act of 
                                  1978

     SEC. 241. REAL-TIME PRICING AND TIME-OF-USE METERING 
                   STANDARDS.

       (a) Adoption of Standards.--Section 111(d) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
     is amended by adding at the end the following:
       ``(11) Real-time pricing.--(A) Each electric utility shall, 
     at the request of an electric consumer, provide electric 
     service under a real-time rate schedule, under which the rate 
     charged by the electric utility varies by the hour (or 
     smaller time interval) according to changes in the electric 
     utility's wholesale power cost. The real-time pricing service 
     shall enable the electric consumer to manage energy use and 
     cost through real-time metering and communications 
     technology.
       ``(B) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(C) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall consider and make 
     a determination concerning whether it is appropriate to 
     implement the standard set out in subparagraph (A) not later 
     than 1 year after the date of enactment of this paragraph.
       ``(12) Time-of-use metering.--(A) Each electric utility 
     shall, at the request of an electric consumer, provide 
     electric service under a time-of-use rate schedule which 
     enables the electric consumer to manage energy use and cost 
     through time-of-use metering and technology.
       ``(B) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(C) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall consider and make 
     a determination concerning whether it is appropriate to 
     implement the standards set out in subparagraph (A) not later 
     than 1 year after the date of enactment of this paragraph.''.
       (b) Special Rules.--Section 115 of the Public Utility 
     Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended 
     by adding at the end the following:
       ``(i) Real-Time Pricing.--In a State that permits third-
     party marketers to sell electric energy to retail electric 
     consumers, the electric consumer shall be entitled to receive 
     the same real-time metering and communication service as a 
     direct retail electric consumer of the electric utility.
       ``(j) Time-of-Use Metering.--In a State that permits third-
     party marketers to sell electric energy to retail electric 
     consumers, the electric consumer shall be entitled to receive 
     the same time-of-use metering and communication service as a 
     direct retail electric consumer of the electric utility.''.

     SEC. 242. ADOPTION OF ADDITIONAL STANDARDS.

       (a) Adoption of Standards.--Section 113(b) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623(b)) 
     is amended by adding at the end the following:
       ``(6) Distributed generation.--Each electric utility shall 
     provide distributed generation, combined heat and power, and 
     district heating and cooling systems competitive access to 
     the local distribution grid and competitive pricing of 
     service, and shall use simplified standard contracts for the 
     interconnection of generating facilities that have a power 
     production capacity of 250 kilowatts or less.
       ``(7) Distribution interconnections.--No electric utility 
     may refuse to interconnect a generating facility with the 
     distribution facilities of the electric utility if the owner 
     or operator of the generating facility complies with 
     technical standards adopted by the State regulatory authority 
     and agrees to pay the costs established by such State 
     regulatory authority.
       ``(8) Minimum fuel and technology diversity standard.--Each 
     electric utility shall develop a plan to minimize dependence 
     on one fuel source and to ensure that the electric energy it 
     sells to consumers is generated using a diverse range of 
     fuels and technologies, including renewable technologies.
       ``(9) Fossil fuel efficiency.--Each electric utility shall 
     develop and implement a ten-year plan to increase the 
     efficiency of its fossil fuel generation and shall monitor 
     and report to its State regulatory authority excessive 
     greenhouse gas emissions resulting from the inefficient 
     operation of its fossil fuel generating plants.''.
       (b) Time for Adopting Standards.--Section 113 of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2623) is 
     further amended by adding at the end the following:
       ``(d) Special Rule.--For purposes of implementing 
     paragraphs (6), (7), (8), and (9) of subsection (b), any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     subsection.''.

     SEC. 243. TECHNICAL ASSISTANCE.

       Section 132(c) of the Public Utility Regulatory Policies 
     Act of 1978 (16 U.S.C. 2642(c)) is amended to read as 
     follows:
       ``(c) Technical Assistance for Certain Responsibilities.--
     The Secretary may provide such technical assistance as he 
     determines appropriate to assist State regulatory authorities 
     and electric utilities in carrying out their responsibilities 
     under section 111(d)(11) and paragraphs (6), (7), (8), and 
     (9) of section 113(b).''.

     SEC. 244. COGENERATION AND SMALL POWER PRODUCTION PURCHASE 
                   AND SALE REQUIREMENTS.

       (a) Termination of Mandatory Purchase and Sale 
     Requirements.--Section 210 of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 824a-3) is amended by adding 
     at the end the following:
       ``(m) Termination of Mandatory Purchase and Sale 
     Requirements.--
       ``(1) Obligation to purchase.-- After the date of enactment 
     of this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to purchase electric 
     energy from a qualifying cogeneration facility or a 
     qualifying small power production facility under this section 
     if the Commission finds that the qualifying cogeneration 
     facility or qualifying small power production facility has 
     access to independently administered, auction-based day ahead 
     and real time wholesale markets for the sale of electric 
     energy.
       ``(2) Obligation to sell.--After the date of enactment of 
     this subsection, no electric utility shall be required to 
     enter into a new contract or obligation to sell electric 
     energy to a qualifying cogeneration facility or a qualifying 
     small power production facility under this section if 
     competing retail electric suppliers are able to provide 
     electric energy to the qualifying cogeneration facility or 
     qualifying small power production facility.
       ``(3) No effect on existing rights and remedies.--Nothing 
     in this subsection affects the rights or remedies of any 
     party under any contract or obligation, in effect on the date 
     of enactment of this subsection, to purchase electric energy 
     or capacity from or to sell electric energy or capacity to a 
     facility under this Act (including the right to recover costs 
     of purchasing electric energy or capacity).
       ``(4) Recovery of costs.--
       ``(A) Regulation.--To ensure recovery by an electric 
     utility that purchases electric energy or capacity from a 
     qualifying facility pursuant to any legally enforceable 
     obligation entered into or imposed under this section before 
     the date of enactment of this subsection, of all prudently 
     incurred costs associated with the purchases, the Commission 
     shall issue and enforce such regulations as may be required 
     to ensure that the electric utility shall collect the 
     prudently incurred costs associated with such purchases.
       ``(B) Enforcement.--A regulation under subparagraph (A) 
     shall be enforceable in accordance with the provisions of law 
     applicable to enforcement of regulations under the Federal 
     Power Act (16 U.S.C. 791a et seq.).''.
       (b) Elimination of Ownership Limitations.--
       (1) Section 3(17)(C) of the Federal Power Act (16 U.S.C. 
     796(17)(C)) is amended to read as follows:
       ``(C) `qualifying small power production facility' means a 
     small power production facility that the Commission 
     determines, by rule, meets such requirements (including 
     requirements respecting minimum size, fuel use, and fuel 
     efficiency) as the Commission may, by rule, prescribe.''.

[[Page S3697]]

       (2) Section 3(18)(B) of the Federal Power Act (16 U.S.C. 
     796(18)(B)) is amended to read as follows:
       ``(B) `qualifying cogeneration facility' means a 
     cogeneration facility that the Commission determines, by 
     rule, meets such requirements (including requirements 
     respecting minimum size, fuel use, and fuel efficiency) as 
     the Commission may, by rule, prescribe.''.

     SEC. 245. NET METERING.

       (a) Adoption of Standard.--Section 111(d) of the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
     is further amended by adding at the end the following:
       ``(13) Net metering.--(A) Each electric utility shall make 
     available upon request net metering service to any electric 
     consumer that the electric utility serves.
       ``(B) For purposes of implementing this paragraph, any 
     reference contained in this section to the date of enactment 
     of the Public Utility Regulatory Policies Act of 1978 shall 
     be deemed to be a reference to the date of enactment of this 
     paragraph.
       ``(C) Notwithstanding subsections (b) and (c) of section 
     112, each State regulatory authority shall consider and make 
     a determination concerning whether it is appropriate to 
     implement the standard set out in subparagraph (A) not later 
     than 1 year after the date of enactment of this paragraph.''.
       (b) Special Rules for Net Metering.--Section 115 of the 
     Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2625) is further amended by adding at the end the following:
       ``(k) Net Metering.--
       ``(1) Rates and charges.--An electric utility--
       ``(A) shall charge the owner or operator of an on-site 
     generating facility rates and charges that are identical to 
     those that would be charged other electric consumers of the 
     electric utility in the same rate class; and
       ``(B) shall not charge the owner or operator of an on-site 
     generating facility any additional standby, capacity, 
     interconnection, or other rate or charge.
       ``(2) Measurement.--An electric utility that sells electric 
     energy to the owner or operator of an on-site generating 
     facility shall measure the quantity of electric energy 
     produced by the on-site facility and the quantity of electric 
     energy consumed by the owner or operator of an on-site 
     generating facility during a billing period in accordance 
     with normal metering practices.
       ``(3) Electric energy supplied exceeding electric energy 
     generated.--If the quantity of electric energy sold by the 
     electric utility to an on-site generating facility exceeds 
     the quantity of electric energy supplied by the on-site 
     generating facility to the electric utility during the 
     billing period, the electric utility may bill the owner or 
     operator for the net quantity of electric energy sold, in 
     accordance with normal metering practices.
       ``(4) Electric energy generated exceeding electric energy 
     supplied.--If the quantity of electric energy supplied by the 
     on-site generating facility to the electric utility exceeds 
     the quantity of electric energy sold by the electric utility 
     to the on-site generating facility during the billing 
     period--
       ``(A) the electric utility may bill the owner or operator 
     of the on-site generating facility for the appropriate 
     charges for the billing period in accordance with paragraph 
     (2); and
       ``(B) the owner or operator of the on-site generating 
     facility shall be credited for the excess kilowatt-hours 
     generated during the billing period, with the kilowatt-hour 
     credit appearing on the bill for the following billing 
     period.
       ``(5) Safety and performance standards.--An eligible on-
     site generating facility and net metering system used by an 
     electric consumer shall meet all applicable safety, 
     performance, reliability, and interconnection standards 
     established by the National Electrical Code, the Institute of 
     Electrical and Electronics Engineers, and Underwriters 
     Laboratories.
       ``(6) Additional control and testing requirements.--The 
     Commission, after consultation with State regulatory 
     authorities and nonregulated electric utilities and after 
     notice and opportunity for comment, may adopt, by rule, 
     additional control and testing requirements for on-site 
     generating facilities and net metering systems that the 
     Commission determines are necessary to protect public safety 
     and system reliability.
       ``(7) Definitions.--For purposes of this subsection:
       ``(A) The term `eligible on-site generating facility' 
     means--
       ``(i) a facility on the site of a residential electric 
     consumer with a maximum generating capacity of 10 kilowatts 
     or less that is fueled by solar energy, wind energy, or fuel 
     cells; or
       ``(ii) a facility on the site of a commercial electric 
     consumer with a maximum generating capacity of 500 kilowatts 
     or less that is fueled solely by a renewable energy resource, 
     landfill gas, or a high efficiency system.
       ``(B) The term `renewable energy resource' means solar, 
     wind, biomass, or geothermal energy.
       ``(C) The term `high efficiency system' means fuel cells or 
     combined heat and power.
       ``(D) The term `net metering service' means service to an 
     electric consumer under which electric energy generated by 
     that electric consumer from an eligible on-site generating 
     facility and delivered to the local distribution facilities 
     may be used to offset electric energy provided by the 
     electric utility to the electric consumer during the 
     applicable billing period.''.

                    Subtitle D--Consumer Protections

     SEC. 251. INFORMATION DISCLOSURE.

       (a) Offers and Solicitations.--The Federal Trade Commission 
     shall issue rules requiring each electric utility that makes 
     an offer to sell electric energy, or solicits electric 
     consumers to purchase electric energy to provide the electric 
     consumer a statement containing the following information--
       (1) the nature of the service being offered, including 
     information about interruptibility of service;
       (2) the price of the electric energy, including a 
     description of any variable charges;
       (3) a description of all other charges associated with the 
     service being offered, including access charges, exit 
     charges, back-up service charges, stranded cost recovery 
     charges, and customer service charges; and
       (4) information the Federal Trade Commission determines is 
     technologically and economically feasible to provide, is of 
     assistance to electric consumers in making purchasing 
     decisions, and concerns--
       (A) the product or its price;
       (B) the share of electric energy that is generated by each 
     fuel type; and
       (C) the environmental emissions produced in generating the 
     electric energy.
       (b) Periodic Billings.--The Federal Trade Commission shall 
     issue rules requiring any electric utility that sells 
     electric energy to transmit to each of its electric 
     consumers, in addition to the information transmitted 
     pursuant to section 115(f) of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2625(f)), a clear and concise 
     statement containing the information described in subsection 
     (a)(4) for each billing period (unless such information is 
     not reasonably ascertainable by the electric utility).

     SEC. 252. CONSUMER PRIVACY.

       (a) Prohibition.--The Federal Trade Commission shall issue 
     rules prohibiting any electric utility that obtains consumer 
     information in connection with the sale or delivery of 
     electric energy to an electric consumer from using, 
     disclosing, or permitting access to such information unless 
     the electric consumer to whom such information relates 
     provides prior written approval.
       (b) Permitted Use.--The rules issued under this section 
     shall not prohibit any electric utility from using, 
     disclosing, or permitting access to consumer information 
     referred to in subsection (a) for any of the following 
     purposes--
       (1) to facilitate an electric consumer's change in 
     selection of an electric utility under procedures approved by 
     the State or State regulatory authority;
       (2) to initiate, render, bill, or collect for the sale or 
     delivery of electric energy to electric consumers or for 
     related services;
       (3) to protect the rights or property of the person 
     obtaining such information;
       (4) to protect retail electric consumers from fraud, abuse, 
     and unlawful subscription in the sale or delivery of electric 
     energy to such consumers;
       (5) for law enforcement purposes; or
       (6) for purposes of compliance with any Federal, State, or 
     local law or regulation authorizing disclosure of information 
     to a Federal, State, or local agency.
       (c) Aggregate Consumer Information.--The rules issued under 
     this subsection may permit a person to use, disclose, and 
     permit access to aggregate consumer information and may 
     require an electric utility to make such information 
     available to other electric utilities upon request and 
     payment of a reasonable fee.
       (d) Definitions.--As used in this section:
       (1) The term ``aggregate consumer information'' means 
     collective data that relates to a group or category of retail 
     electric consumers, from which individual consumer identities 
     and characteristics have been removed.
       (2) The term ``consumer information'' means information 
     that relates to the quantity, technical configuration, type, 
     destination, or amount of use of electric energy delivered to 
     any retail electric consumer.

     SEC. 253. OFFICE OF CONSUMER ADVOCACY.

       (a) Definitions.--In this section:
       (1) Commission.--The term ``Commission'' means the Federal 
     Energy Regulatory Commission.
       (2) Energy customer.--The term ``energy customer'' means a 
     residential customer or a small commercial customer that 
     receives products or services from a public utility or 
     natural gas company under the jurisdiction of the Commission.
       (3) Natural gas company.--The term ``natural gas company'' 
     has the meaning given the term in section 2 of the Natural 
     Gas Act (15 U.S.C. 717a), as modified by section 601(a) of 
     the Natural Gas Policy Act of 1978 (15 U.S.C. 3431(a)).
       (4) Office.--The term ``Office'' means the Office of 
     Consumer Advocacy established by subsection (b)(1).
       (5) Public utility.--The term ``public utility'' has the 
     meaning given the term in section 201(e) of the Federal Power 
     Act (16 U.S.C. 824(e)).
       (6) Small commercial customer.--The term ``small commercial 
     customer'' means a commercial customer that has a peak demand 
     of not more than 1,000 kilowatts per hour.
       (b) Office.--
       (1) Establishment.--There is established within the 
     Department of Justice the Office of Consumer Advocacy.
       (2) Director.--The Office shall be headed by a Director to 
     be appointed by the President, by and with the advice and 
     consent of the Senate.
       (3) Duties.--The Office may represent the interests of 
     energy customers on matters concerning rates or service of 
     public utilities and natural gas companies under the 
     jurisdiction of the Commission--
       (A) at hearings of the Commission;
       (B) in judicial proceedings in the courts of the United 
     States;
       (C) at hearings or proceedings of other Federal regulatory 
     agencies and commissions.

     SEC. 254. UNFAIR TRADE PRACTICES.

       (a) Slamming.--The Federal Trade Commission shall issue 
     rules prohibiting the change of

[[Page S3698]]

     selection of an electric utility except with the informed 
     consent of the electric consumer.
       (b) Cramming.--The Federal Trade Commission shall issue 
     rules prohibiting the sale of goods and services to an 
     electric consumer unless expressly authorized by law or the 
     electric consumer.

     SEC. 255. APPLICABLE PROCEDURES.

       The Federal Trade Commission shall proceed in accordance 
     with section 553 of title 5, United States Code, when 
     prescribing a rule required by this subtitle.

     SEC. 256. FEDERAL TRADE COMMISSION ENFORCEMENT.

       Violation of a rule issued under this subtitle shall be 
     treated as a violation of a rule under section 18 of the 
     Federal Trade Commission Act (15 U.S.C. 57a) respecting 
     unfair or deceptive acts or practices. All functions and 
     powers of the Federal Trade Commission under such Act are 
     available to the Federal Trade Commission to enforce 
     compliance with this subtitle notwithstanding any 
     jurisdictional limits in such Act.

     SEC. 257. STATE AUTHORITY.

       Nothing in this subtitle shall be construed to preclude a 
     State or State regulatory authority from prescribing and 
     enforcing laws, rules, or procedures regarding the practices 
     which are the subject of this section.

     SEC. 258. APPLICATION OF SUBTITLE.

       The provisions of this subtitle apply to each electric 
     utility if the total sales of electric energy by such utility 
     for purposes other than resale exceed 500 million kilowatt-
     hours per calendar year. The provisions of this subtitle do 
     not apply to the operations of an electric utility to the 
     extent that such operations relate to sales of electric 
     energy for purposes of resale.

     SEC. 259. DEFINITIONS.

       As used in this subtitle:
       (1) The term ``aggregate consumer information'' means 
     collective data that relates to a group or category of 
     electric consumers, from which individual consumer identities 
     and identifying characteristics have been removed.
       (2) The term ``consumer information'' means information 
     that relates to the quantity, technical configuration, type, 
     destination, or amount of use of electric energy delivered to 
     an electric consumer.
       (3) The terms ``electric consumer'', ``electric utility'', 
     and ``State regulatory authority'' have the meanings given 
     such terms in section 3 of the Public Utility Regulatory 
     Policies Act of 1978 (16 U.S.C. 2602).

       Subtitle E--Renewable Energy and Rural Construction Grants

     SEC. 261. RENEWABLE ENERGY PRODUCTION INCENTIVE.

       (a) Incentive Payments.--Section 1212(a) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(a)) is amended by 
     striking ``and which satisfies'' and all that follows through 
     ``Secretary shall establish.'' and inserting the following: 
     ``. The Secretary shall establish other procedures necessary 
     for efficient administration of the program. The Secretary 
     shall not establish any criteria or procedures that have the 
     effect of assigning to proposals a higher or lower priority 
     for eligibility or allocation of appropriated funds on the 
     basis of the energy source proposed.''.
       (b) Qualified Renewable Energy Facility.--Section 1212(b) 
     of the Energy Policy Act of 1992 (42 U.S.C. 13317(b)) is 
     amended--
       (1) by striking ``a State or any political'' and all that 
     follows through ``nonprofit electrical cooperative'' and 
     inserting the following: ``a nonprofit electrical 
     cooperative, a public utility described in section 115 of 
     such Code, a State, Commonwealth, territory, or possession of 
     the United States or the District of Columbia, or a political 
     subdivision thereof, or an Indian tribal government or 
     subdivision thereof,''; and
       (2) by inserting ``landfill gas, incremental hydropower, 
     ocean'' after ``wind, biomass,''.
       (c) Eligibility Window.--Section 1212(c) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(c)) is amended by 
     striking ``during the 10-fiscal year period beginning with 
     the first full fiscal year occurring after the enactment of 
     this section'' and inserting ``before October 1, 2013''.
       (d) Payment Period.--Section 1212(d) of the Energy Policy 
     Act of 1992 (42 U.S.C. 13317(d)) is amended by inserting ``or 
     in which the Secretary finds that all necessary Federal and 
     State authorizations have been obtained to begin construction 
     of the facility'' after ``eligible for such payments''.
       (e) Amount of Payment.--Section 1212(e)(1) of the Energy 
     Policy Act of 1992 (42 U.S.C. 13317(e)(1)) is amended by 
     inserting ``landfill gas, incremental hydropower, ocean'' 
     after ``wind, biomass,''.
       (f) Sunset.--Section 1212(f) of the Energy Policy Act of 
     1992 (42 U.S.C. 13317(f)) is amended by striking ``the 
     expiration of'' and all that follows through ``of this 
     section'' and inserting ``September 30, 2023''.
       (g) Incremental Hydropower; Authorization of 
     Appropriations.--Section 1212 of the Energy Policy Act of 
     1992 (42 U.S.C. 13317) is further amended by striking 
     subsection (g) and inserting the following:
       ``(g) Incremental Hydropower.--
       ``(1) Programs.--Subject to subsection (h)(2), if an 
     incremental hydropower program meets the requirements of this 
     section, as determined by the Secretary, the incremental 
     hydropower program shall be eligible to receive incentive 
     payments under this section.
       ``(2) Definition of Incremental Hydropower.--In this 
     subsection, the term `incremental hydropower' means 
     additional generating capacity achieved from increased 
     efficiency or additions of new capacity at a hydroelectric 
     facility in existence on the date of enactment of this 
     paragraph.
       ``(h) Authorization of Appropriations.--
       ``(1) In general.--Subject to paragraph (2), there are 
     authorized to be appropriated such sums as may be necessary 
     to carry out this section for fiscal years 2003 through 2023.
       ``(2) Limitation on funds used for incremental hydropower 
     programs.--Not more than 30 percent of the amounts made 
     available under paragraph (1) shall be used to carry out 
     programs described in subsection (g)(2).
       ``(3) Availability of funds.--Funds made available under 
     paragraph (1) shall remain available until expended.''.

     SEC. 262. ASSESSMENT OF RENEWABLE ENERGY RESOURCES.

       (a) Resource Assessment.--Not later than 3 months after the 
     date of enactment of this title, and each year thereafter, 
     the Secretary of Energy shall review the available 
     assessments of renewable energy resources available within 
     the United States, including solar, wind, biomass, ocean, 
     geothermal, and hydroelectric energy resources, and undertake 
     new assessments as necessary, taking into account changes in 
     market conditions, available technologies and other relevant 
     factors.
       (b) Contents of Reports.--Not later than 1 year after the 
     date of enactment of this title, and each year thereafter, 
     the Secretary shall publish a report based on the assessment 
     under subsection (a). The report shall contain--
       (1) a detailed inventory describing the available amount 
     and characteristics of the renewable energy resources, and
       (2) such other information as the Secretary of Energy 
     believes would be useful in developing such renewable energy 
     resources, including descriptions of surrounding terrain, 
     population and load centers, nearby energy infrastructure, 
     location of energy and water resources, and available 
     estimates of the costs needed to develop each resource, 
     together with an identification of any barriers to providing 
     adequate transmission for remote sources of renewable energy 
     resources to current and emerging markets, recommendations 
     for removing or addressing such barriers, and ways to provide 
     access to the grid that do not unfairly disadvantage 
     renewable or other energy producers.

     SEC. 263. FEDERAL PURCHASE REQUIREMENT.

       (a) Requirement.--The President shall seek to ensure that, 
     to the extent economically feasible and technically 
     practicable, of the total amount of electric energy the 
     Federal Government consumes during any fiscal year--
       (1) not less than 3 percent in fiscal years 2003 through 
     2004,
       (2) not less than 5 percent in fiscal years 2005 through 
     2009, and
       (3) not less than 7.5 percent in fiscal year 2010 and each 
     fiscal year thereafter,
     shall be renewable energy. The President shall encourage the 
     use of innovative purchasing practices by Federal agencies.
       (b) Definition.--For purposes of this section, the term 
     ``renewable energy'' means electric energy generated from 
     solar, wind, biomass, geothermal, fuel cells, municipal solid 
     waste, or additional hydroelectric generation capacity 
     achieved from increased efficiency or additions of new 
     capacity.
       (c) Tribal Power Generation.--The President shall seek to 
     ensure that, to the extent economically feasible and 
     technically practicable, not less than one-tenth of the 
     amount specified in subsection (a) shall be renewable energy 
     that is generated by an Indian tribe or by a corporation, 
     partnership, or business association which is wholly or 
     majority owned, directly or indirectly, by an Indian tribe. 
     For purposes of this subsection, the term ``Indian tribe'' 
     means any Indian tribe, band, nation, or other organized 
     group or community, including any Alaskan Native village or 
     regional or village corporation as defined in or established 
     pursuant to the Alaska Native Claims Settlement Act (43 
     U.S.C. 1601 et seq.), which is recognized as eligible for the 
     special programs and services provided by the United States 
     to Indians because of their status as Indians.
       (d) Biennial Report.--In 2004 and every 2 years thereafter, 
     the Secretary of Energy shall report to the Committee on 
     Energy and Natural Resources of the Senate and the 
     appropriate committees of the House of Representatives on the 
     progress of the Federal Government in meeting the goals 
     established by this section.

     SEC. 264. RENEWABLE PORTFOLIO STANDARD.

       Title VI of the Public Utility Regulatory Policies Act of 
     1978 is amended by adding at the end the following:

     ``SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

       ``(a) Minimum Renewable Generation Requirement.--For each 
     calendar year beginning in calendar year 2005, each retail 
     electric supplier shall submit to the Secretary, not later 
     than April 1 of the following calendar year, renewable energy 
     credits in an amount equal to the required annual percentage 
     specified in subsection (b).
       ``(b) Required Annual Percentage.--(1) For calendar years 
     2005 through 2020, the required annual percentage of the 
     retail electric supplier's base amount that shall be 
     generated from renewable energy resources shall be the 
     percentage specified in the following table:

  ``Calendar Years                                      Required annual
                                                             percentage
    2005 through 2006..............................................1.0 
    2007 through 2008..............................................2.2 
    2009 through 2010..............................................3.4 
    2011 through 2012..............................................4.6 
    2013 through 2014..............................................5.8 
    2015 through 2016..............................................7.0 
    2017 through 2018..............................................8.5 
    2019 through 2020.............................................10.0.
       ``(2) Not later than January 1, 2015, the Secretary may, by 
     rule, establish required annual percentages in amounts not 
     less than 10.0 for calendar years 2020 through 2030.
       ``(c) Submission of Credits.--(1) A retail electric 
     supplier may satisfy the requirements of

[[Page S3699]]

     subsection (a) through the submission of renewable energy 
     credits--
       ``(A) issued to the retail electric supplier under 
     subsection (d);
       ``(B) obtained by purchase or exchange under subsection 
     (e); or
       ``(C) borrowed under subsection (f).
       ``(2) A credit may be counted toward compliance with 
     subsection (a) only once.
       ``(d) Issuance of Credits.--(1) The Secretary shall 
     establish, not later than 1 year after the date of enactment 
     of this section, a program to issue, monitor the sale or 
     exchange of, and track renewable energy credits.
       ``(2) Under the program, an entity that generates electric 
     energy through the use of a renewable energy resource may 
     apply to the Secretary for the issuance of renewable energy 
     credits. The application shall indicate--
       ``(A) the type of renewable energy resource used to produce 
     the electricity,
       ``(B) the location where the electric energy was produced, 
     and
       ``(C) any other information the Secretary determines 
     appropriate.
       ``(3)(A) Except as provided in paragraphs (B), (C), and 
     (D), the Secretary shall issue to an entity one renewable 
     energy credit for each kilowatt-hour of electric energy the 
     entity generates from the date of enactment of this section 
     and in each subsequent calendar year through the use of a 
     renewable energy resource at an eligible facility.
       ``(B) For incremental hydropower the credits shall be 
     calculated based on the expected increase in average annual 
     generation resulting from the efficiency improvements or 
     capacity additions. The number of credits shall be calculated 
     using the same water flow information used to determine a 
     historic average annual generation baseline for the 
     hydroelectric facility and certified by the Secretary or the 
     Federal Energy Regulatory Commission. The calculation of the 
     credits for incremental hydropower shall not be based on any 
     operational changes at the hydroelectric facility not 
     directly associated with the efficiency improvements or 
     capacity additions.
       ``(C) The Secretary shall issue two renewable energy 
     credits for each kilowatt-hour of electric energy generated 
     and supplied to the grid in that calendar year through the 
     use of a renewable energy resource at an eligible facility 
     located on Indian land. For purposes of this paragraph, 
     renewable energy generated by biomass cofired with other 
     fuels is eligible for two credits only if the biomass was 
     grown on the land eligible under this paragraph.
       ``(D) For renewable energy resources produced from a 
     generation offset, the Secretary shall issue two renewable 
     energy credits for each kilowatt-hour generated.
       ``(E) To be eligible for a renewable energy credit, the 
     unit of electric energy generated through the use of a 
     renewable energy resource may be sold or may be used by the 
     generator. If both a renewable energy resource and a 
     nonrenewable energy resource are used to generate the 
     electric energy, the Secretary shall issue credits based on 
     the proportion of the renewable energy resource used. The 
     Secretary shall identify renewable energy credits by type and 
     date of generation.
       ``(5) When a generator sells electric energy generated 
     through the use of a renewable energy resource to a retail 
     electric supplier under a contract subject to section 210 of 
     this Act, the retail electric supplier is treated as the 
     generator of the electric energy for the purposes of this 
     section for the duration of the contract.
       ``(6) The Secretary may issue credits for existing facility 
     offsets to be applied against a retail electric supplier's 
     own required annual percentage. The credits are not tradeable 
     and may only be used in the calendar year generation actually 
     occurs.
       ``(e) Credit Trading.--A renewable energy credit may be 
     sold or exchanged by the entity to whom issued or by any 
     other entity who acquires the credit. A renewable energy 
     credit for any year that is not used to satisfy the minimum 
     renewable generation requirement of subsection (a) for that 
     year may be carried forward for use within the next 4 years.
       ``(f) Credit Borrowing.--At any time before the end of 
     calendar year 2005, a retail electric supplier that has 
     reason to believe it will not have sufficient renewable 
     energy credits to comply with subsection (a) may--
       ``(1) submit a plan to the Secretary demonstrating that the 
     retail electric supplier will earn sufficient credits within 
     the next 3 calendar years which, when taken into account, 
     will enable the retail electric supplier's to meet the 
     requirements of subsection (a) for calendar year 2005 and the 
     subsequent calendar years involved; and
       ``(2) upon the approval of the plan by the Secretary, apply 
     credits that the plan demonstrates will be earned within the 
     next 3 calendar years to meet the requirements of subsection 
     (a) for each calendar year involved.
       ``(g) Credit Cost Cap.--The Secretary shall offer renewable 
     energy credits for sale at the lesser of 3 cents per 
     kilowatt-hour or 200 percent of the average market value of 
     credits for the applicable compliance period. On January 1 of 
     each year following calendar year 2005, the Secretary shall 
     adjust for inflation the price charged per credit for such 
     calendar year, based on the Gross Domestic Product Implicit 
     Price Deflator.
       ``(h) Enforcement.--The Secretary may bring an action in 
     the appropriate United States district court to impose a 
     civil penalty on a retail electric supplier that does not 
     comply with subsection (a), unless the retail electric 
     supplier was unable to comply with subsection (a) for reasons 
     outside of the supplier's reasonable control (including 
     weather-related damage, mechanical failure, lack of 
     transmission capacity or availability, strikes, lockouts, 
     actions of a governmental authority). A retail electric 
     supplier who does not submit the required number of renewable 
     energy credits under subsection (a) shall be subject to a 
     civil penalty of not more than the greater of 3 cents or 200 
     percent of the average market value of credits for the 
     compliance period for each renewable energy credit not 
     submitted.
       ``(i) Information Collection.--The Secretary may collect 
     the information necessary to verify and audit--
       ``(1) the annual electric energy generation and renewable 
     energy generation of any entity applying for renewable energy 
     credits under this section,
       ``(2) the validity of renewable energy credits submitted by 
     a retail electric supplier to the Secretary, and
       ``(3) the quantity of electricity sales of all retail 
     electric suppliers.
       ``(j) Environmental Savings Clause.--Incremental hydropower 
     shall be subject to all applicable environmental laws and 
     licensing and regulatory requirements.
       ``(k) State Savings Clause.--This section does not preclude 
     a State from requiring additional renewable energy generation 
     in that State, or from specifying technology mix.
       ``(l) Definitions.--For purposes of this section:
       ``(1) Biomass.--The term `biomass' means any organic 
     material that is available on a renewable or recurring basis, 
     including dedicated energy crops, trees grown for energy 
     production, wood waste and wood residues, plants (including 
     aquatic plants, grasses, and agricultural crops), residues, 
     fibers, animal wastes and other organic waste materials, and 
     fats and oils, except that with respect to material removed 
     from National Forest System lands the term includes only 
     organic material from--
       ``(A) thinnings from trees that are less than 12 inches in 
     diameter;
       ``(B) slash;
       ``(C) brush; and
       ``(D) mill residues.
       ``(2) Eligible facility.--The term `eligible facility' 
     means--
       ``(A) a facility for the generation of electric energy from 
     a renewable energy resource that is placed in service on or 
     after the date of enactment of this section; or
       ``(B) a repowering or cofiring increment that is placed in 
     service on or after the date of enactment of this section at 
     a facility for the generation of electric energy from a 
     renewable energy resource that was placed in service before 
     that date.
       ``(3) Eligible renewable energy resource.--The term 
     `renewable energy resource' means solar, wind, ocean, or 
     geothermal energy, biomass (excluding solid waste and paper 
     that is commonly recycled), landfill gas, a generation 
     offset, or incremental hydropower.
       ``(4) Generation offset.--The term `generation offset' 
     means reduced electricity usage metered at a site where a 
     customer consumes energy from a renewable energy technology.
       ``(5) Existing facility offset.--The term `existing 
     facility offset' means renewable energy generated from an 
     existing facility, not classified as an eligible facility, 
     that is owned or under contract to a retail electric supplier 
     on the date of enactment of this section.
       ``(6) Incremental hydropower.--The term `incremental 
     hydropower' means additional generation that is achieved from 
     increased efficiency or additions of capacity after the date 
     of enactment of this section at a hydroelectric dam that was 
     placed in service before that date.
       ``(7) Indian land.--The term `Indian land' means--
       ``(A) any land within the limits of any Indian reservation, 
     pueblo, or rancheria,
       ``(B) any land not within the limits of any Indian 
     reservation, pueblo, or rancheria title to which was on the 
     date of enactment of this paragraph either held by the United 
     States for the benefit of any Indian tribe or individual or 
     held by any Indian tribe or individual subject to restriction 
     by the United States against alienation,
       ``(C) any dependent Indian community, and
       ``(D) any land conveyed to any Alaska Native corporation 
     under the Alaska Native Claims Settlement Act.
       ``(8) Indian tribe.--The term `Indian tribe' means any 
     Indian tribe, band, nation, or other organized group or 
     community, including any Alaskan Native village or regional 
     or village corporation as defined in or established pursuant 
     to the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
     seq.), which is recognized as eligible for the special 
     programs and services provided by the United States to 
     Indians because of their status as Indians.
       ``(9) Renewable energy.--The term `renewable energy' means 
     electric energy generated by a renewable energy resource.
       ``(10) Renewable energy resource.--The term `renewable 
     energy resource' means solar, wind, ocean, or geothermal 
     energy, biomass (including municipal solid waste), landfill 
     gas, a generation offset, or incremental hydropower.
       ``(11) Repowering or cofiring increment.--The term 
     `repowering or cofiring increment' means the additional 
     generation from a modification that is placed in service on 
     or after the date of enactment of this section to expand 
     electricity production at a facility used to generate 
     electric energy from a renewable energy resource or to cofire 
     biomass that was placed in service before the date of 
     enactment of this section, or the additional generation above 
     the average generation in the 3 years preceding the date of 
     enactment of this section, to expand electricity production 
     at a facility used to generate electric energy from a 
     renewable energy resource or to cofire biomass that was 
     placed in service before the date of enactment of this 
     section.
       ``(12) Retail electric supplier.--The term `retail electric 
     supplier' means a person that

[[Page S3700]]

     sells electric energy to electric consumers and sold not less 
     than 1,000,000 megawatt-hours of electric energy to electric 
     consumers for purposes other than resale during the preceding 
     calendar year; except that such term does not include the 
     United States, a State or any political subdivision of a 
     State, or any agency, authority, or instrumentality of any 
     one or more of the foregoing, or a rural electric 
     cooperative.
       ``(13) Retail electric supplier's base amount.--The term 
     `retail electric supplier's base amount' means the total 
     amount of electric energy sold by the retail electric 
     supplier to electric customers during the most recent 
     calendar year for which information is available, excluding 
     electric energy generated by--
       ``(A) an eligible renewable energy resource;
       ``(B) municipal solid waste; or
       ``(C) a hydroelectric facility.
       ``(m) Sunset.--This section expires December 31, 2030.''.

     SEC. 265. RENEWABLE ENERGY ON FEDERAL LAND.

       (a) Cost-Share Demonstration Program.--Within 12 months 
     after the date of enactment of this section, the Secretaries 
     of the Interior, Agriculture, and Energy shall develop 
     guidelines for a cost-share demonstration program for the 
     development of wind and solar energy facilities on Federal 
     land.
       (b) Definition of Federal Land.--As used in this section, 
     the term ``Federal land'' means land owned by the United 
     States that is subject to the operation of the mineral 
     leasing laws; and is either--
       (1) public land as defined in section 103(e) of the Federal 
     Land Policy and Management Act of 1976 (42 U.S.C. 1702(e)); 
     or
       (2) a unit of the National Forest System as that term is 
     used in section 11(a) of the Forest and Rangeland Renewable 
     Resources Planning Act of 1974 (16 U.S.C. 1609(a)).
       (c) Rights-of-Way.--The demonstration program shall provide 
     for the issuance of rights-of-way pursuant to the provisions 
     of title V of the Federal Land Policy and Management Act of 
     1976 (43 U.S.C. 1761 et seq.) by the Secretary of the 
     Interior with respect to Federal land under the jurisdiction 
     of the Department of the Interior, and by the Secretary of 
     Agriculture with respect to Federal lands under the 
     jurisdiction of the Department of Agriculture.
       (d) Available Sites.--For purposes of this demonstration 
     program, the issuance of rights-of-way shall be limited to 
     areas--
       (1) of high energy potential for wind or solar development;
       (2) that have been identified by the wind or solar energy 
     industry, through a process of nomination, application, or 
     otherwise, as being of particular interest to one or both 
     industries;
       (3) that are not located within roadless areas;
       (4) where operation of wind or solar facilities would be 
     compatible with the scenic, recreational, environmental, 
     cultural, or historic values of the Federal land, and would 
     not require the construction of new roads for the siting of 
     lines or other transmission facilities; and
       (5) where issuance of the right-of-way is consistent with 
     the land and resource management plans of the relevant land 
     management agencies.
       (e) Cost-Share Payments by DOE.--The Secretary of Energy, 
     in cooperation with the Secretary of the Interior with 
     respect to Federal land under the jurisdiction of the 
     Department of the Interior, and the Secretary of Agriculture 
     with respect to Federal land under the jurisdiction of the 
     Department of Agriculture, shall determine if the portion of 
     a project on Federal land is eligible for financial 
     assistance pursuant to this section. Only those projects that 
     are consistent with the requirements of this section and 
     further the purposes of this section shall be eligible. In 
     the event a project is selected for financial assistance, the 
     Secretary of Energy shall provide no more than 15 percent of 
     the costs of the project on the Federal land, and the 
     remainder of the costs shall be paid by non-Federal sources.
       (f) Revision of Land Use Plans.--The Secretary of the 
     Interior shall consider development of wind and solar energy, 
     as appropriate, in revisions of land use plans under section 
     202 of the Federal Land Policy and Management Act of 1976 (42 
     U.S.C. 1712); and the Secretary of Agriculture shall consider 
     development of wind and solar energy, as appropriate, in 
     revisions of land and resource management plans under section 
     5 of the Forest and Rangeland Renewable Resources Planning 
     Act of 1974 (16 U.S.C. 1604). Nothing in this subsection 
     shall preclude the issuance of a right-of-way for the 
     development of a wind or solar energy project prior to the 
     revision of a land use plan by the appropriate land 
     management agency.
       (g) Report to Congress.--Within 24 months after the date of 
     enactment of this section, the Secretary of the Interior 
     shall develop and report to Congress recommendations on any 
     statutory or regulatory changes the Secretary believes would 
     assist in the development of renewable energy on Federal 
     land. The report shall include--
       (1) a five-year plan developed by the Secretary of the 
     Interior, in cooperation with the Secretary of Agriculture, 
     for encouraging the development of wind and solar energy on 
     Federal land in an environmentally sound manner; and
       (2) an analysis of--
       (A) whether the use of rights-of-ways is the best means of 
     authorizing use of Federal land for the development of wind 
     and solar energy, or whether such resources could be better 
     developed through a leasing system, or other method;
       (B) the desirability of grants, loans, tax credits or other 
     provisions to promote wind and solar energy development on 
     Federal land; and
       (C) any problems, including environmental concerns, which 
     the Secretary of the Interior or the Secretary of Agriculture 
     have encountered in managing wind or solar energy projects on 
     Federal land, or believe are likely to arise in relation to 
     the development of wind or solar energy on Federal land;
       (3) a list, developed in consultation with the Secretaries 
     of Energy and Defense, of lands under the jurisdiction of the 
     Departments of Energy and Defense that would be suitable for 
     development for wind or solar energy, and recommended 
     statutory and regulatory mechanisms for such development.
       (h) National Academy of Sciences Study.-- Within 90 days 
     after the enactment of this Act, the Secretary of the 
     Interior shall contract with the National Academy of Sciences 
     to study the potential for the development of wind, solar, 
     and ocean energy on the Outer Continental Shelf; assess 
     existing Federal authorities for the development of such 
     resources; and recommend statutory and regulatory mechanisms 
     for such development. The results of the study shall be 
     transmitted to Congress within 24 months after the enactment 
     of this Act.

                     Subtitle F--General Provisions

     SEC. 271. CHANGE 3 CENTS TO 1.5 CENTS.

        Not withstanding any other provision in this Act, ``3 
     cents'' shall be considered by law to be ``1.5 cents'' in any 
     place ``3 cents'' appears in title II of this Act.

     SEC. 272. 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 one 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.).''.

                  TITLE III--HYDROELECTRIC RELICENSING

     SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

       (a) Alternative Mandatory Conditions.--Section 4 of the 
     Federal Power Act (16 U.S.C. 797) is amended by adding at the 
     end the following:
       ``(h)(1) Whenever any person applies for a license for any 
     project works within any reservation of the United States 
     under subsection (e), and the Secretary of the department 
     under whose supervision such reservation falls (in this 
     subsection referred to as the `Secretary') shall deem a 
     condition to such license to be necessary under the first 
     proviso of such section, the license applicant may propose an 
     alternative condition.
       ``(2) Notwithstanding the first proviso of subsection (e), 
     the Secretary of the department under whose supervision the 
     reservation falls shall accept the proposed alternative 
     condition referred to in paragraph (1), and the Commission 
     shall include in the license such alternative condition, if 
     the Secretary of the appropriate department determines, based 
     on substantial evidence provided by the license applicant, 
     that the alternative condition--
       ``(A) provides for the adequate protection and utilization 
     of the reservation; and
       ``(B) will either--
       ``(i) cost less to implement, or
       ``(ii) result in improved operation of the project works 
     for electricity production as compared to the condition 
     initially deemed necessary by the Secretary.
       ``(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any condition under subsection 
     (e) or alternative condition it accepts under this subsection 
     a written statement explaining the basis for such condition, 
     and reason for not accepting any alternative condition under 
     this subsection, including the effects of the condition 
     accepted and alternatives not accepted on energy supply, 
     distribution, cost, and use, air quality, flood control, 
     navigation, and drinking, irrigation, and recreation water 
     supply, based on such information as may be available to the 
     Secretary, including information voluntarily provided in a 
     timely manner by the applicant and others.
       ``(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative conditions.''.
       (b) Alternative Fishways.--Section 18 of the Federal Power 
     Act (16 U.S.C. 811) is amended by--
       (1) inserting ``(a)'' before the first sentence; and
       (2) adding at the end the following:
       ``(b)(1) Whenever the Secretary of the Interior or the 
     Secretary of Commerce prescribes a fishway under this 
     section, the license applicant or the licensee may propose an 
     alternative to such prescription to construct, maintain, or 
     operate a fishway.
       ``(2) Notwithstanding subsection (a), the Secretary of the 
     Interior or the Secretary of Commerce, as appropriate, shall 
     accept and prescribe, and the Commission shall require, the 
     proposed alternative referred to in paragraph (1), if the 
     Secretary of the appropriate department determines, based on 
     substantial evidence provided by the licensee, that the 
     alternative--
       ``(A) will be no less protective of the fish resources than 
     the fishway initially prescribed by the Secretary; and

[[Page S3701]]

       ``(B) will either--
       ``(i) cost less to implement, or
       ``(ii) result in improved operation of the project works 
     for electricity production as compared to the fishway 
     initially prescribed by the Secretary.
       ``(3) The Secretary shall submit into the public record of 
     the Commission proceeding with any prescription under 
     subsection (a) or alternative prescription it accepts under 
     this subsection a written statement explaining the basis for 
     such prescription, and reason for not accepting any 
     alternative prescription under this subsection, including the 
     effects of the prescription accepted or alternative not 
     accepted on energy supply, distribution, cost, and use, air 
     quality, flood control, navigation, and drinking, irrigation, 
     and recreation water supply, based on such information as may 
     be available to the Secretary, including information 
     voluntarily provided in a timely manner by the applicant and 
     others.
       ``(4) Nothing in this subsection shall prohibit other 
     interested parties from proposing alternative 
     prescriptions.''.
       (c) Time of Filing Application.--Section 15(c)(1) of the 
     Federal Power Act (16 U.S.C. 808(c)(1)) is amended by 
     striking the first sentence and inserting the following:
       ``(1) Each application for a new license pursuant to this 
     section shall be filed with the Commission--
       ``(A) at least 24 months before the expiration of the term 
     of the existing license in the case of licenses that expire 
     prior to 2008; and
       ``(B) at least 36 months before the expiration of the term 
     of the existing license in the case of licenses that expire 
     in 2008 or any year thereafter.''.

                        TITLE IV--INDIAN ENERGY

     SEC. 401. COMPREHENSIVE INDIAN ENERGY PROGRAM.

       Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 
     3501-3506) is amended by adding after section 2606 the 
     following:

     ``SEC. 2607. COMPREHENSIVE INDIAN ENERGY PROGRAM.

       ``(a) Definitions.--For purposes of this section--
       ``(1) the term `Director' means the Director of the Office 
     of Indian Energy Policy and Programs established by section 
     217 of the Department of Energy Organization Act, and
       ``(2) the term `Indian land' means--
       ``(A) any land within the limits of an Indian reservation, 
     pueblo, or rancheria;
       ``(B) any land not within the limits of an Indian 
     reservation, pueblo, or rancheria whose title is held--
       ``(i) in trust by the United States for the benefit of an 
     Indian tribe,
       ``(ii) by an Indian tribe subject to restriction by the 
     United States against alienation, or
       ``(iii) by a dependent Indian community; and
       ``(C) land conveyed to an Alaska Native Corporation under 
     the Alaska Native Claims Settlement Act.
       ``(b) Indian Energy Education Planning and Management 
     Assistance.--(1) The Director shall establish programs within 
     the Office of Indian Energy Policy and Programs to assist 
     Indian tribes in meeting their energy education, research and 
     development, planning, and management needs.
       ``(2) The Director may make grants, on a competitive basis, 
     to an Indian tribe for--
       ``(A) renewable energy, energy efficiency, and conservation 
     programs;
       ``(B) studies and other activities supporting tribal 
     acquisition of energy supplies, services, and facilities;
       ``(C) planning, constructing, developing, operating, 
     maintaining, and improving tribal electrical generation, 
     transmission, and distribution facilities; and
       ``(D) developing, constructing, and interconnecting 
     electric power transmission facilities with transmission 
     facilities owned and operated by a Federal power marketing 
     agency or an electric utility that provides open access 
     transmission service.
       ``(3) The Director may develop, in consultation with Indian 
     tribes, a formula for making grants under this section. The 
     formula may take into account the following--
       ``(A) the total number of acres of Indian land owned by an 
     Indian tribe;
       ``(B) the total number of households on the Indian tribe's 
     Indian land;
       ``(C) the total number of households on the Indian tribe's 
     Indian land that have no electricity service or are under-
     served; and
       ``(D) financial or other assets available to the Indian 
     tribe from any source.
       ``(4) In making a grant under paragraph (2), the Director 
     shall give priority to an application received from an Indian 
     tribe that is not served or is served inadequately by an 
     electric utility, as that term is defined in section 3(4) of 
     the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
     2602(4)), or by a person, State agency, or any other non-
     Federal entity that owns or operates a local distribution 
     facility used for the sale of electric energy to an electric 
     consumer.
       ``(5) There are authorized to be appropriated to the 
     Department of Energy such sums as may be necessary to carry 
     out the purposes of this section.
       ``(6) The Secretary is authorized to promulgate such 
     regulations as the Secretary determines to be necessary to 
     carry out the provisions of this subsection.
       ``(c) Loan Guarantee Program.--
       ``(1) Authority.--The Secretary may guarantee not more than 
     90 percent of the unpaid principal and interest due on any 
     loan made to any Indian tribe for energy development, 
     including the planning, development, construction, and 
     maintenance of electrical generation plants, and for 
     transmission and delivery mechanisms for electricity produced 
     on Indian land. A loan guaranteed under this subsection shall 
     be made by--
       ``(A) a financial institution subject to the examination of 
     the Secretary; or
       ``(B) an Indian tribe, from funds of the Indian tribe, to 
     another Indian tribe.
       ``(2) Availability of appropriations.--Amounts appropriated 
     to cover the cost of loan guarantees shall be available 
     without fiscal year limitation to the Secretary to fulfill 
     obligations arising under this subsection.
       ``(3) Authorization of appropriations.--(A) There are 
     authorized to be appropriated to the Secretary such sums as 
     may be necessary to cover the cost of loan guarantees, as 
     defined by section 502(5) of the Federal Credit Reform Act of 
     1990 (2 U.S.C. 661a(5)).
       ``(B) There are authorized to be appropriated to the 
     Secretary such sums as may be necessary to cover the 
     administrative expenses related to carrying out the loan 
     guarantee program established by this subsection.
       ``(4) Limitation on amount.--The aggregate outstanding 
     amount guaranteed by the Secretary of Energy at any one time 
     under this subsection shall not exceed $2,000,000,000.
       ``(5) Regulations.--The Secretary is authorized to 
     promulgate such regulations as the Secretary determines to be 
     necessary to carry out the provisions of this subsection.
       ``(d) Indian Energy Preference.--(1) An agency or 
     department of the United States Government may give, in the 
     purchase of electricity, oil, gas, coal, or other energy 
     product or by-product, preference in such purchase to an 
     energy and resource production enterprise, partnership, 
     corporation, or other type of business organization majority 
     or wholly owned and controlled by a tribal government.
       ``(2) In implementing this subsection, an agency or 
     department shall pay no more than the prevailing market price 
     for the energy product or by-product and shall obtain no less 
     than existing market terms and conditions.
       ``(e) Effect on Other Laws.--This section does not--
       ``(1) limit the discretion vested in an Administrator of a 
     Federal power marketing agency to market and allocate Federal 
     power, or
       ``(2) alter Federal laws under which a Federal power 
     marketing agency markets, allocates, or purchases power.''.

     SEC. 402. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

       Title II of the Department of Energy Organization Act is 
     amended by adding at the end the following:


             ``office of indian energy policy and programs

       ``Sec. 217. (a) There is established within the Department 
     an Office of Indian Energy Policy and Programs. This Office 
     shall be headed by a Director, who shall be appointed by the 
     Secretary and compensated at the rate equal to that of level 
     IV of the Executive Schedule under section 5315 of title 5, 
     United States Code.
       ``(b) The Director shall provide, direct, foster, 
     coordinate, and implement energy planning, education, 
     management, conservation, and delivery programs of the 
     Department that--
       ``(1) promote tribal energy efficiency and utilization;
       ``(2) modernize and develop, for the benefit of Indian 
     tribes, tribal energy and economic infrastructure related to 
     natural resource development and electrification;
       ``(3) preserve and promote tribal sovereignty and self 
     determination related to energy matters and energy 
     deregulation;
       ``(4) lower or stabilize energy costs; and
       ``(5) electrify tribal members' homes and tribal lands.
       ``(c) The Director shall carry out the duties assigned the 
     Secretary or the Director under title XXVI of the Energy 
     Policy Act of 1992 (25 U.S.C. 3501 et seq.).''.

     SEC. 403. CONFORMING AMENDMENTS.

       (a) Authorization of Appropriations.--Section 2603(c) of 
     the Energy Policy Act of 1992 (25 U.S.C. 3503(c)) is amended 
     to read as follows:
       ``(c) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     to carry out the purposes of this section.''.
       (b) Table of Contents.--The table of contents of the 
     Department of Energy Act is amended by inserting after the 
     item relating to section 216 the following new item:

``Sec. 217. Office of Indian Energy Policy and Programs.''.
       (c) Executive Schedule.--Section 5315 of title 5, United 
     States Code, is amended by inserting ``Director, Office of 
     Indian Energy Policy and Programs, Department of Energy.'' 
     after ``Inspector General, Department of Energy.''.

     SEC. 404. SITING ENERGY FACILITIES ON TRIBAL LANDS.

       (a) Definitions.--For purposes of this section:
       (1) Indian tribe.--The term ``Indian tribe'' means any 
     Indian tribe, band, nation, or other organized group or 
     community, which is recognized as eligible for the special 
     programs and services provided by the United States to 
     Indians because of their status as Indians, except that such 
     term does not include any Regional Corporation as defined in 
     section 3(g) of the Alaska Native Claims Settlement Act (43 
     U.S.C. 1602(g)).
       (2) Interested party.--The term ``interested party'' means 
     a person whose interests could be adversely affected by the 
     decision of an Indian tribe to grant a lease or right-of-way 
     pursuant to this section.
       (3) Petition.--The term ``petition'' means a written 
     request submitted to the Secretary for the review of an 
     action (or inaction) of the Indian tribe that is claimed to 
     be in violation of the approved tribal regulations.
       (4) Reservation.--The term ``reservation'' means--
       (A) with respect to a reservation in a State other than 
     Oklahoma, all land that has been set

[[Page S3702]]

     aside or that has been acknowledged as having been set aside 
     by the United States for the use of an Indian tribe, the 
     exterior boundaries of which are more particularly defined in 
     a final tribal treaty, agreement, executive order, Federal 
     statute, secretarial order, or judicial determination;
       (B) with respect to a reservation in the State of Oklahoma, 
     all land that is--
       (i) within the jurisdictional area of an Indian tribe, and
       (ii) within the boundaries of the last reservation of such 
     tribe that was established by treaty, executive order, or 
     secretarial order.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (6) Tribal lands.--The term `tribal lands' means any tribal 
     trust lands, or other lands owned by an Indian tribe that are 
     within such tribe's reservation.
       (b) Leases Involving Generation, Transmission, Distribution 
     or Energy Processing Facilities.--An Indian tribe may grant a 
     lease of tribal land for electric generation, transmission, 
     or distribution facilities, or facilities to process or 
     refine renewable or nonrenewable energy resources developed 
     on tribal lands, and such leases shall not require the 
     approval of the Secretary if the lease is executed under 
     tribal regulations approved by the Secretary under this 
     subsection and the term of the lease does not exceed 30 
     years.
       (c) Rights-of-Way for Electric Generation, Transmission, 
     Distribution or Energy Processing Facilities.--An Indian 
     tribe may grant a right-of-way over tribal lands for a 
     pipeline or an electric transmission or distribution line 
     without separate approval by the Secretary, if--
       (1) the right-of-way is executed under and complies with 
     tribal regulations approved by the Secretary and the term of 
     the right-of-way does not exceed 30 years; and
       (2) the pipeline or electric transmission or distribution 
     line serves--
       (A) an electric generation, transmission or distribution 
     facility located on tribal land, or
       (B) a facility located on tribal land that processes or 
     refines renewable or nonrenewable energy resources developed 
     on tribal lands.
       (d) Renewals.--Leases or rights-of-way entered into under 
     this subsection may be renewed at the discretion of the 
     Indian tribe in accordance with the requirements of this 
     section.
       (e) Tribal Regulation Requirements.--(1) The Secretary 
     shall have the authority to approve or disapprove tribal 
     regulations required under this subsection. The Secretary 
     shall approve such tribal regulations if they are 
     comprehensive in nature, including provisions that address--
       (A) securing necessary information from the lessee or 
     right-of-way applicant;
       (B) term of the conveyance;
       (C) amendments and renewals;
       (D) consideration for the lease or right-of-way;
       (E) technical or other relevant requirements;
       (F) requirements for environmental review as set forth in 
     paragraph (3);
       (G) requirements for complying with all applicable 
     environmental laws; and
       (H) final approval authority.
       (2) No lease or right-of-way shall be valid unless 
     authorized in compliance with the approved tribal 
     regulations.
       (3) An Indian tribe, as a condition of securing Secretarial 
     approval as contemplated in paragraph (1), must establish an 
     environmental review process that includes the following--
       (A) an identification and evaluation of all significant 
     environmental impacts of the proposed action as compared to a 
     no action alternative;
       (B) identification of proposed mitigation;
       (C) a process for ensuring that the public is informed of 
     and has an opportunity to comment on the proposed action 
     prior to tribal approval of the lease or right-of-way; and
       (D) sufficient administrative support and technical 
     capability to carry out the environmental review process.
       (4) The Secretary shall review and approve or disapprove 
     the regulations of the Indian tribe within 180 days of the 
     submission of such regulations to the Secretary. Any 
     disapproval of such regulations by the Secretary shall be 
     accompanied by written documentation that sets forth the 
     basis for the disapproval. The 180-day period may be extended 
     by the Secretary after consultation with the Indian tribe.
       (5) If the Indian tribe executes a lease or right-of-way 
     pursuant to tribal regulations required under this 
     subsection, the Indian tribe shall provide the Secretary 
     with--
       (A) a copy of the lease or right-of-way document and all 
     amendments and renewals thereto; and
       (B) in the case of regulations or a lease or right-of-way 
     that permits payment to be made directly to the Indian tribe, 
     documentation of the payments sufficient to enable the 
     Secretary to discharge the trust responsibility of the United 
     States as appropriate under existing law.
       (6) The United States shall not be liable for losses 
     sustained by any party to a lease executed pursuant to tribal 
     regulations under this subsection, including the Indian 
     tribe.
       (7)(A) An interested party may, after exhaustion of tribal 
     remedies, submit, in a timely manner, a petition to the 
     Secretary to review the compliance of the Indian tribe with 
     any tribal regulations approved under this subsection. If 
     upon such review, the Secretary determines that the 
     regulations were violated, the Secretary may take such action 
     as may be necessary to remedy the violation, including 
     rescinding or holding the lease or right-of-way in abeyance 
     until the violation is cured. The Secretary may also rescind 
     the approval of the tribal regulations and reassume the 
     responsibility for approval of leases or rights-of-way 
     associated with the facilities addressed in this section.
       (B) If the Secretary seeks to remedy a violation described 
     in subparagraph (A), the Secretary shall--
       (i) make a written determination with respect to the 
     regulations that have been violated;
       (ii) provide the Indian tribe with a written notice of the 
     alleged violation together with such written determination; 
     and
       (iii) prior to the exercise of any remedy or the rescission 
     of the approval of the regulations involved and reassumption 
     of the lease or right-of-way approval responsibility, provide 
     the Indian tribe with a hearing and a reasonable opportunity 
     to cure the alleged violation.
       (C) The tribe shall retain all rights to appeal as provided 
     by regulations promulgated by the Secretary.
       (f) Agreements.--(1) Agreements between an Indian tribe and 
     a business entity that are directly associated with the 
     development of electric generation, transmission or 
     distribution facilities, or facilities to process or refine 
     renewable or nonrenewable energy resources developed on 
     tribal lands, shall not separately require the approval of 
     the Secretary pursuant to section 18 of title 25, United 
     States Code, so long as the activity that is the subject of 
     the agreement has been the subject of an environmental review 
     process pursuant to subsection (e) of this section.
       (2) The United States shall not be liable for any losses or 
     damages sustained by any party, including the Indian tribe, 
     that are associated with an agreement entered into under this 
     subsection.
       (g) Disclaimer.--Nothing in this section is intended to 
     modify or otherwise affect the applicability of any provision 
     of the Indian Mineral Leasing Act of 1938 (25 U.S.C. 396a-
     396g); Indian Mineral Development Act of 1982 (25 U.S.C. 
     2101-2108); Surface Mining Control and Reclamation Act of 
     1977 (30 U.S.C. 1201-1328); any amendments thereto; or any 
     other laws not specifically addressed in this section.

     SEC. 405. INDIAN MINERAL DEVELOPMENT ACT REVIEW.

       (a) In General.--The Secretary of the Interior shall 
     conduct a review of the activities that have been conducted 
     by the governments of Indian tribes under the authority of 
     the Indian Mineral Development Act of 1982 (25 U.S.C. 2101 et 
     seq.).
       (b) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Secretary shall transmit to the 
     Committee on Resources of the House of Representatives and 
     the Committee on Indian Affairs and the Committee on Energy 
     and Natural Resources of the Senate a report containing--
       (1) the results of the review;
       (2) recommendations designed to help ensure that Indian 
     tribes have the opportunity to develop their nonrenewable 
     energy resources; and
       (3) an analysis of the barriers to the development of 
     energy resources on Indian land, including Federal policies 
     and regulations, and make recommendations regarding the 
     removal of those barriers.
       (c) Consultation.--The Secretary shall consult with Indian 
     tribes on a government-to-government basis in developing the 
     report and recommendations as provided in this subsection.

     SEC. 406. RENEWABLE ENERGY STUDY.

       (a) In General.--Not later than 2 years after the date of 
     the enactment of this Act, and once every 2 years thereafter, 
     the Secretary of Energy shall transmit to the Committees on 
     Energy and Commerce and Resources of the House of 
     Representatives and the Committees on Energy and Natural 
     Resources and Indian Affairs of the Senate a report on energy 
     consumption and renewable energy development potential on 
     Indian land. The report shall identify barriers to the 
     development of renewable energy by Indian tribes, including 
     Federal policies and regulations, and make recommendations 
     regarding the removal of such barriers.
       (b) Consultation.--The Secretary shall consult with Indian 
     tribes on a government-to-government basis in developing the 
     report and recommendations as provided in this section.

     SEC. 407. FEDERAL POWER MARKETING ADMINISTRATIONS.

       Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 
     3501) (as amended by section 201) is amended by adding at the 
     end the following:

     ``SEC. 2608. FEDERAL POWER MARKETING ADMINISTRATIONS.

       ``(a) Definition of Administrator.--In this section, the 
     term `Administrator' means--
       ``(1) the Administrator of the Bonneville Power 
     Administration; or
       ``(2) the Administrator of the Western Area Power 
     Administration.
       ``(b) Assistance for Transmission Studies.--(1) Each 
     Administrator may provide technical assistance to Indian 
     tribes seeking to use the high-voltage transmission system 
     for delivery of electric power. The costs of such technical 
     assistance shall be funded--
       ``(A) by the Administrator using non-reimbursable funds 
     appropriated for this purpose, or
       ``(B) by the Indian tribe.
       ``(2) Priority for assistance for transmission studies.--In 
     providing discretionary assistance to Indian tribes under 
     paragraph (1), each Administrator shall give priority in 
     funding to Indian tribes that have limited financial 
     capability to conduct such studies.
       ``(c) Power Allocation Study.--(1) Not later than 2 years 
     after the date of enactment of this Act, the Secretary of 
     Energy shall transmit to the Committees on Energy and 
     Commerce and Resources of the House of Representatives and 
     the Committees on Energy and Natural Resources and Indian 
     Affairs of the Senate a report on Indian tribes' utilization 
     of Federal power allocations of the Western Area Power 
     Administration, or power sold by the Southwestern Power 
     Administration, and the Bonneville Power Administration to or 
     for the benefit

[[Page S3703]]

     of Indian tribes in their service areas. The report shall 
     identify--
       ``(A) the amount of power allocated to tribes by the 
     Western Area Power Administration, and how the benefit of 
     that power is utilized by the tribes;
       ``(B) the amount of power sold to tribes by other Power 
     Marketing Administrations; and
       ``(C) existing barriers that impede tribal access to and 
     utilization of Federal power, and opportunities to remove 
     such barriers and improve the ability of the Power Marketing 
     Administration to facilitate the utilization of Federal power 
     by Indian tribes.
       ``(2) The Power Marketing Administrations shall consult 
     with Indian tribes on a government-to-government basis in 
     developing the report provided in this section.
       ``(d) Authorization for Appropriation.--There are 
     authorized to be appropriated to the Secretary of Energy such 
     sums as may be necessary to carry out the purposes of this 
     section.''.

     SEC. 408. FEASIBILITY STUDY OF COMBINED WIND AND HYDROPOWER 
                   DEMONSTRATION PROJECT.

       (a) Study.--The Secretary of Energy, in coordination with 
     the Secretary of the Army and the Secretary of the Interior, 
     shall conduct a study of the cost and feasibility of 
     developing a demonstration project that would use wind energy 
     generated by Indian tribes and hydropower generated by the 
     Army Corps of Engineers on the Missouri River to supply 
     firming power to the Western Area Power Administration.
       (b) Scope of Study.--The study shall--
       (1) determine the feasibility of the blending of wind 
     energy and hydropower generated from the Missouri River dams 
     operated by the Army Corps of Engineers;
       (2) review historical purchase requirements and projected 
     purchase requirements for firming and the patterns of 
     availability and use of firming energy;
       (3) assess the wind energy resource potential on tribal 
     lands and projected cost savings through a blend of wind and 
     hydropower over a thirty-year period;
       (4) include a preliminary interconnection study and a 
     determination of resource adequacy of the Upper Great Plains 
     Region of the Western Area Power Administration;
       (5) determine seasonal capacity needs and associated 
     transmission upgrades for integration of tribal wind 
     generation; and
       (6) include an independent tribal engineer as a study team 
     member.
       (c) Report.--The Secretary of Energy and Secretary of the 
     Army shall submit a report to Congress not later than 1 year 
     after the date of enactment of this title. The Secretaries 
     shall include in the report--
       (1) an analysis of the potential energy cost savings to the 
     customers of the Western Area Power Administration through 
     the blend of wind and hydropower;
       (2) an evaluation of whether a combined wind and hydropower 
     system can reduce reservoir fluctuation, enhance efficient 
     and reliable energy production and provide Missouri River 
     management flexibility;
       (3) recommendations for a demonstration project which the 
     Western Area Power Administration could carry out in 
     partnership with an Indian tribal government or tribal 
     government energy consortium to demonstrate the feasibility 
     and potential of using wind energy produced on Indian lands 
     to supply firming energy to the Western Area Power 
     Administration or other Federal power marketing agency; and
       (4) an identification of the economic and environmental 
     benefits to be realized through such a Federal-tribal 
     partnership and identification of how such a partnership 
     could contribute to the energy security of the United States.
       (d) Consultation.--The Secretary shall consult with Indian 
     tribes on a government-to-government basis in developing the 
     report and recommendations provided in this section.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated $500,000 to carry out this section, which 
     shall remain available until expended. All costs incurred by 
     the Western Area Power Administration associated with 
     performing the tasks required under this section shall be 
     nonreimbursable.

                         TITLE V--NUCLEAR POWER

             Subtitle A--Price-Anderson Act Reauthorization

     SEC. 501. SHORT TITLE.

        This subtitle may be cited as the ``Price-Anderson 
     Amendments Act of 2002''.

     SEC. 502. EXTENSION OF INDEMNIFICATION AUTHORITY.

       (a) Indemnification of Nuclear Regulatory Commission 
     Licensees.--Section 170c. of the Atomic Energy Act of 1954 
     (42 U.S.C. 2210(c)) is amended--
       (1) in the subsection heading, by striking ``Licenses'' and 
     inserting ``Licensees''; and
       (2) by striking ``August 1, 2002'' each place it appears 
     and inserting ``August 1, 2012''.
       (b) Indemnification of Department of Energy Contractors.--
     Section 170d.(1)(A) of the Atomic Energy Act of 1954 (42 
     U.S.C. 2210(d)(1)(A)) is amended by striking ``, until August 
     1, 2002,''.
       (c) Indemnification of Nonprofit Educational 
     Institutions.--Section 170k. of the Atomic Energy Act of 1954 
     (42 U.S.C. 2210(k)) is amended by striking ``August 1, 2002'' 
     each place it appears and inserting ``August 1, 2012''.

     SEC. 503. DEPARTMENT OF ENERGY LIABILITY LIMIT.

       (a) Indemnification of Department of Energy Contractors.--
     Section 170d. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(d)) is amended by striking paragraph (2) and inserting 
     the following:
       ``(2) In agreements of indemnification entered into under 
     paragraph (1), the Secretary--
       ``(A) may require the contractor to provide and maintain 
     financial protection of such a type and in such amounts as 
     the Secretary shall determine to be appropriate to cover 
     public liability arising out of or in connection with the 
     contractual activity; and
       ``(B) shall indemnify the persons indemnified against such 
     liability above the amount of the financial protection 
     required, in the amount of $10,000,000,000 (subject to 
     adjustment for inflation under subsection t.), in the 
     aggregate, for all persons indemnified in connection with 
     such contract and for each nuclear incident, including such 
     legal costs of the contractor as are approved by the 
     Secretary.''.
       (b) Contract Amendments.--Section 170d. of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210(d)) is further amended by 
     striking paragraph (3) and inserting the following:
       ``(3) All agreements of indemnification under which the 
     Department of Energy (or its predecessor agencies) may be 
     required to indemnify any person under this section shall be 
     deemed to be amended, on the date of the enactment of the 
     Price-Anderson Amendments Act of 2002, to reflect the amount 
     of indemnity for public liability and any applicable 
     financial protection required of the contractor under this 
     subsection.''.
       (c) Liability Limit.--Section 170e.(1)(B) of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended--
       (1) by striking ``the maximum amount of financial 
     protection required under subsection b. or''; and
       (2) by striking ``paragraph (3) of subsection d., whichever 
     amount is more'' and inserting ``paragraph (2) of subsection 
     d.''.

     SEC. 504. INCIDENTS OUTSIDE THE UNITED STATES.

       (a) Amount of Indemnification.--Section 170d.(5) of the 
     Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended 
     by striking ``$100,000,000'' and inserting ``$500,000,000''.
       (b) Liability Limit.--Section 170e.(4) of the Atomic Energy 
     Act of 1954 (42 U.S.C. 2210(e)(4)) is amended by striking 
     ``$100,000,000'' and inserting ``$500,000,000''.

     SEC. 505. REPORTS.

       Section 170p. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(p)) is amended by striking ``August 1, 1998'' and 
     inserting ``August 1, 2008''.

     SEC. 506. INFLATION ADJUSTMENT.

       Section 170t. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(t)) is amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by adding after paragraph (1) the following:
       ``(2) The Secretary shall adjust the amount of 
     indemnification provided under an agreement of 
     indemnification under subsection d. not less than once during 
     each 5-year period following July 1, 2002, in accordance with 
     the aggregate percentage change in the Consumer Price Index 
     since--
       ``(A) that date, in the case of the first adjustment under 
     this paragraph; or
       ``(B) the previous adjustment under this paragraph.''.

     SEC. 507. CIVIL PENALTIES.

       (a) Repeal of Automatic Remission.--Section 234Ab.(2) of 
     the Atomic Energy Act of 1954 (42 U.S.C. 2282a(b)(2)) is 
     amended by striking the last sentence.
       (b) Limitation for Not-For-Profit Institutions.--Subsection 
     d. of section 234A of the Atomic Energy Act of 1954 (42 
     U.S.C. 2282a(d)) is amended to read as follows:
       ``d.(1) Notwithstanding subsection a., in the case of any 
     not-for-profit contractor, subcontractor, or supplier, the 
     total amount of civil penalties assessed under subsection a. 
     may not exceed the total amount of fees paid within any one-
     year period (as determined by the Secretary) under the 
     contract under which the violation occurs.
       ``(2) For purposes of this section, the term `not-for-
     profit' means that no part of the net earnings of the 
     contractor, subcontractor, or supplier inures, or may 
     lawfully inure, to the benefit of any natural person or for-
     profit artificial person.''.
       (c) Effective Date.--The amendments made by this section 
     shall not apply to any violation of the Atomic Energy Act of 
     1954 occurring under a contract entered into before the date 
     of enactment of this section.

     SEC. 508. TREATMENT OF MODULAR REACTORS.

       Section 170b. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2210(b)) is amended by adding at the end the following:
       ``(5)(A) For purposes of this section only, the Commission 
     shall consider a combination of facilities described in 
     subparagraph (B) to be a single facility having a rated 
     capacity of 100,000 electrical kilowatts or more.
       ``(B) A combination of facilities referred to in 
     subparagraph (A) is two or more facilities located at a 
     single site, each of which has a rated capacity of 100,000 
     electrical kilowatts or more but not more than 300,000 
     electrical kilowatts, with a combined rated capacity of not 
     more than 1,300,000 electrical kilowatts.''.

     SEC. 509. EFFECTIVE DATE.

       The amendments made by sections 503(a) and 504 do not apply 
     to any nuclear incident that occurs before the date of the 
     enactment of this subtitle.

                  Subtitle B--Miscellaneous Provisions

     SEC. 511. URANIUM SALES.

       (a) Inventory Sales.--Section 3112(d) of the USEC 
     Privatization Act (42 U.S.C. 2297h-10(d)) is amended to read 
     as follows:
       ``(d) Inventory Sales.--(1) In addition to the transfers 
     authorized under subsections (b), (c), and (e), the Secretary 
     may, from time to time, sell or transfer uranium (including 
     natural uranium concentrates, natural uranium hexafluoride, 
     enriched uranium, and depleted uranium) from the Department 
     of Energy's stockpile.

[[Page S3704]]

       ``(2) Except as provided in subsections (b), (c), and (e), 
     the Secretary may not deliver uranium in any form for 
     consumption by end users in any year in excess of the 
     following amounts:

                ``Annual Maximum Deliveries to End Users

                               (Million lbs. U3O8
  ``Year:                                                   equivalent)
    2003 through 2009-.............................................. 3 
    2010-........................................................... 5 
    2011-........................................................... 5 
    2012-........................................................... 7 
    2013 and each year thereafter-..................................10.
       ``(3) Except as provided in subsections (b), (c), and (e), 
     no sale or transfer of uranium in any form shall be made 
     unless--
       ``(A) the President determines that the material is not 
     necessary for national security needs;
       ``(B) the Secretary determines, based on the written views 
     of the Secretary of State and the Assistant to the President 
     for National Security Affairs, that the sale or transfer will 
     not adversely affect the national security interests of the 
     United States;
       ``(C) the Secretary determines that the sale of the 
     material will not have an adverse material impact on the 
     domestic uranium mining, conversion, or enrichment industry, 
     taking into account the sales of uranium under the Russian 
     HEU Agreement and the Suspension Agreement; and
       ``(D) the price paid to the Secretary will not be less than 
     the fair market value of the material.''.
       (b) Exempt Transfers and Sales.--Section 3112(e) of the 
     USEC Privatization Act (42 U.S.C. 2297h-10(e)) is amended to 
     read as follows:
       ``(e) Exempt Sales or Transfers.--Notwithstanding 
     subsection (d)(2), the Secretary may transfer or sell 
     uranium--
       ``(1) to the Tennessee Valley Authority for use pursuant to 
     the Department of Energy's highly enriched uranium or tritium 
     program, to the extent provided by law;
       ``(2) to research and test reactors under the University 
     Reactor Fuel Assistance and Support Program or the Reduced 
     Enrichment for Research and Test Reactors Program;
       ``(3) to USEC Inc. to replace contaminated uranium received 
     from the Department of Energy when the United States 
     Enrichment Corporation was privatized;
       ``(4) to any person for emergency purposes in the event of 
     a disruption in supply to end users in the United States; and
       ``(5) to any person for national security purposes, as 
     determined by the Secretary.''.

     SEC. 512. REAUTHORIZATION OF THORIUM REIMBURSEMENT.

       (a) Reimbursement of Thorium Licensees.-- Section 
     1001(b)(2)(C) of the Energy Policy Act of 1992 (42 U.S.C. 
     2296a) is amended--
       (1) by striking ``$140,000,000'' and inserting 
     ``$365,000,000''; and
       (2) by adding at the end the following: ``Such payments 
     shall not exceed the following amounts:
       ``(i) $90,000,000 in fiscal year 2002.
       ``(ii) $55,000,000 in fiscal year 2003.
       ``(iii) $20,000,000 in fiscal year 2004.
       ``(iv) $20,000,000 in fiscal year 2005.
       ``(v) $20,000,000 in fiscal year 2006.
       ``(vi) $20,000,000 in fiscal year 2007.
     Any amounts authorized to be paid in a fiscal year under this 
     subparagraph that are not paid in that fiscal year may be 
     paid in subsequent fiscal years.''.
       (b) Authorization of Appropriations.--Section 1003(a) of 
     the Energy Policy Act of 1992 (42 U.S.C. 2296a-2) is amended 
     by striking ``$490,000,000'' and inserting ``$715,000,000''.
       (c) Decontamination and Decommissioning Fund.--Section 
     1802(a) of the Atomic Energy Act of 1954 (42 U.S.C. 2297g-
     1(a)) is amended--
       (1) by striking ``$488,333,333'' and inserting 
     ``$518,233,333''; and
       (2) by inserting after ``inflation'' the following: 
     ``beginning on the date of enactment of the Energy Policy Act 
     of 1992''.

     SEC. 513. FAST FLUX TEST FACILITY.

       The Secretary of Energy shall not reactivate the Fast Flux 
     Test Facility to conduct--
       (1) any atomic energy defense activity,
       (2) any space-related mission, or
       (3) any program for the production or utilization of 
     nuclear material if the Secretary has determined, in a record 
     of decision, that the program can be carried out at existing 
     operating facilities.

     SEC. 514. NUCLEAR POWER 2010.

       (a) Definitions.--In this section:
       (1) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (2) Office.--The term ``Office'' means the Office of 
     Nuclear Energy Science and Technology of the Department of 
     Energy.
       (3) Director.--The term ``Director'' means the Director of 
     the Office of Nuclear Energy Science and Technology of the 
     Department of Energy.
       (4) Program.--The term ``Program'' means the Nuclear Power 
     2010 Program.
       (b) Establishment.--The Secretary shall carry out a 
     program, to be managed by the Director.
       (c) Purpose.--The program shall aggressively pursue those 
     activities that will result in regulatory approvals and 
     design completion in a phased approach, with joint 
     government/industry cost sharing, which would allow for the 
     construction and startup of new nuclear plants in the United 
     States by 2010.
       (d) Activities.--In carrying out the program, the Director 
     shall--
       (1) issue a solicitation to industry seeking proposals from 
     joint venture project teams comprised of reactor vendors and 
     power generation companies to participate in the Nuclear 
     Power 2010 program;
       (2) seek innovative business arrangements, such as 
     consortia among designers, constructors, nuclear steam supply 
     systems and major equipment suppliers, and plant owner/
     operators, with strong and common incentives to build and 
     operate new plants in the United States;
       (3) conduct the Nuclear Power 2010 program consistent with 
     the findings of ``A Roadmap to Deploy New Nuclear Power 
     Plants in the United States by 2010'' issued by the Near-Term 
     Deployment Working Group of the Nuclear Energy Research 
     Advisory Committee of the Department of Energy;
       (4) rely upon the expertise and capabilities of the 
     Department of Energy national laboratories and sites in the 
     areas of advanced nuclear fuel cycles and fuels testing, 
     giving consideration to existing lead laboratory designations 
     and the unique capabilities and facilities available at each 
     national laboratory and site;
       (5) pursue deployment of both water-cooled and gas-cooled 
     reactor designs on a dual track basis that will provide 
     maximum potential for the success of both;
       (6) include participation of international collaborators in 
     research and design efforts where beneficial; and
       (7) seek to accomplish the essential regulatory and 
     technical work, both generic and design-specific, to make 
     possible new nuclear plants within this decade.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out the purposes 
     of this section such sums as are necessary for fiscal year 
     2003 and for each fiscal year thereafter.

     SEC. 515. OFFICE OF SPENT NUCLEAR FUEL RESEARCH.

       (a) Findings.--Congress finds that--
       (1) before the Federal Government takes any irreversible 
     action relating to the disposal of spent nuclear fuel, 
     Congress must determine whether the spent fuel in the 
     repository should be treated as waste subject to permanent 
     burial or should be considered an energy resource that is 
     needed to meet future energy requirements; and
       (2) national policy on spent nuclear fuel may evolve with 
     time as improved technologies for spent fuel are developed or 
     as national energy needs evolve.
       (b) Definitions.--In this section:
       (1) Associate director.--The term ``Associate Director'' 
     means the Associate Director of the Office.
       (2) Office.--The term ``Office'' means the Office of Spent 
     Nuclear Fuel Research within the Office of Nuclear Energy 
     Science and Technology of the Department of Energy.
       (c) Establishment.--There is established an Office of Spent 
     Nuclear Fuel Research within the Office of Nuclear Energy 
     Science and Technology of the Department of Energy.
       (d) Head of Office.--The Office shall be headed by the 
     Associate Director, who shall be a member of the Senior 
     Executive Service appointed by the Director of the Office of 
     Nuclear Energy Science and Technology, and compensated at a 
     rate determined by applicable law.
       (e) Duties of the Associate Director.--
       (1) In general.--The Associate Director shall be 
     responsible for carrying out an integrated research, 
     development, and demonstration program on technologies for 
     treatment, recycling, and disposal of high-level nuclear 
     radioactive waste and spent nuclear fuel, subject to the 
     general supervision of the Secretary.
       (2) Participation.--The Associate Director shall coordinate 
     the participation of national laboratories, universities, the 
     commercial nuclear industry, and other organizations in the 
     investigation of technologies for the treatment, recycling, 
     and disposal of spent nuclear fuel and high-level radioactive 
     waste.
       (3) Activities.--The Associate Director shall--
       (A) develop a research plan to provide recommendations by 
     2015;
       (B) identify promising technologies for the treatment, 
     recycling, and disposal of spent nuclear fuel and high-level 
     radioactive waste;
       (C) conduct research and development activities for 
     promising technologies;
       (D) ensure that all activities include as key objectives 
     minimization of proliferation concerns and risk to the health 
     of the general public or site workers, as well as development 
     of cost-effective technologies;
       (E) require research on both reactor- and accelerator-based 
     transmutation systems;
       (F) require research on advanced processing and 
     separations;
       (G) include participation of international collaborators in 
     research efforts, and provide funding to a collaborator that 
     brings unique capabilities not available in the United States 
     if the country in which the collaborator is located is unable 
     to provide for their support; and
       (H) ensure that research efforts are coordinated with 
     research on advanced fuel cycles and reactors conducted by 
     the Office of Nuclear Energy Science and Technology.
       (f) Grant and Contract Authority.--The Secretary may make 
     grants, or enter into contracts, for the purposes of the 
     research projects and activities described in this section.
       (g) Report.--The Associate Director shall annually submit 
     to Congress a report on the activities and expenditures of 
     the Office that describes the progress being made in 
     achieving the objectives of this section.

     SEC. 516. DECOMMISSIONING PILOT PROGRAM.

       (a) Pilot Program.--The Secretary of Energy shall establish 
     a decommissioning pilot program to decommission and 
     decontaminate the sodium-cooled fast breeder experimental 
     test-site reactor located in northwest Arkansas in accordance 
     with the decommissioning activities contained in the August 
     31, 1998, Department of Energy report on the reactor.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $16,000,000.

[[Page S3705]]

                  Subtitle C--Growth of Nuclear Energy

     SEC. 521. COMBINED LICENSE PERIODS.

       Section 103c. of the Atomic Energy Act of 1954 (42 U.S.C. 
     2133(c)) is amended--
       (1) by striking ``c. Each such'' and inserting the 
     following:
       ``c. License Period.--
       ``(1) In general.--Each such''; and
       (2) by adding at the end the following:
       ``(2) Combined licenses.--In the case of a combined 
     construction and operating license issued under section 
     185(b), the duration of the operating phase of the license 
     period shall not be less than the duration of the operating 
     license if application had been made for separate 
     construction and operating licenses.''.

                   Subtitle D--NRC Regulatory Reform

     SEC. 531. ANTITRUST REVIEW.

       (a) In General.--Section 105 of the Atomic Energy Act of 
     1954 (42 U.S.C. 2135) is amended by adding at the end the 
     following:
       ``d. Antitrust Laws.--
       ``(1) Notification.--Except as provided in paragraph (4), 
     when the Commission proposes to issue a license under section 
     103 or 104b., the Commission shall notify the Attorney 
     General of the proposed license and the proposed terms and 
     conditions of the license.
       ``(2) Action by the attorney general.--Within a reasonable 
     time (but not more than 90 days) after receiving notification 
     under paragraph (1), the Attorney General shall submit to the 
     Commission and publish in the Federal Register a 
     determination whether, insofar as the Attorney General is 
     able to determine, the proposed license would tend to create 
     or maintain a situation inconsistent with the antitrust laws.
       ``(3) Information.--On the request of the Attorney General, 
     the Commission shall furnish or cause to be furnished such 
     information as the Attorney General determines to be 
     appropriate or necessary to enable the Attorney General to 
     make the determination under paragraph (2).
       ``(4) Applicability.--This subsection shall not apply to 
     such classes or type of licenses as the Commission, with the 
     approval of the Attorney General, determines would not 
     significantly affect the activities of a licensee under the 
     antitrust laws.''.
       (b) Conforming Amendment.--Section 105c. of the Atomic 
     Energy Act of 1954 (42 U.S.C. 2135(c)) is amended by adding 
     at the end the following:
       ``(9) Applicability.--This subsection does not apply to an 
     application for a license to construct or operate a 
     utilization facility under section 103 or 104b. that is filed 
     on or after the date of enactment of subsection d.''.

     SEC. 532. DECOMMISSIONING.

       (a) Authority Over Former Licensees for Decommissioning 
     Funding.--Section 161i. of the Atomic Energy Act of 1954 (42 
     U.S.C. 2201(i)) is amended--
       (1) by striking ``and (3)'' and inserting ``(3)''; and
       (2) by inserting before the semicolon at the end the 
     following: ``, and (4) to ensure that sufficient funds will 
     be available for the decommissioning of any production or 
     utilization facility licensed under section 103 or 104b., 
     including standards and restrictions governing the control, 
     maintenance, use, and disbursement by any former licensee 
     under this Act that has control over any fund for the 
     decommissioning of the facility''.
       (b) Treatment of Nuclear Reactor Financial Obligations.--
     Section 523 of title 11, United States Code, is amended by 
     adding at the end the following:
       ``(f) Treatment of Nuclear Reactor Financial Obligations.--
     Notwithstanding any other provision of this title--
       ``(1) any funds or other assets held by a licensee or 
     former licensee of the Nuclear Regulatory Commission, or by 
     any other person, to satisfy the responsibility of the 
     licensee, former licensee, or any other person to comply with 
     a regulation or order of the Nuclear Regulatory Commission 
     governing the decontamination and decommissioning of a 
     nuclear power reactor licensed under section 103 or 104b. of 
     the Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134(b)) shall 
     not be used to satisfy the claim of any creditor in any 
     proceeding under this title, other than a claim resulting 
     from an activity undertaken to satisfy that responsibility, 
     until the decontamination and decommissioning of the nuclear 
     power reactor is completed to the satisfaction of the Nuclear 
     Regulatory Commission;
       ``(2) obligations of licensees, former licensees, or any 
     other person to use funds or other assets to satisfy a 
     responsibility described in paragraph (1) may not be 
     rejected, avoided, or discharged in any proceeding under this 
     title or in any liquidation, reorganization, receivership, or 
     other insolvency proceeding under Federal or State law; and
       ``(3) private insurance premiums and standard deferred 
     premiums held and maintained in accordance with section 170b. 
     of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) shall 
     not be used to satisfy the claim of any creditor in any 
     proceeding under this title, until the indemnification 
     agreement executed in accordance with section 170c. of that 
     Act (42 U.S.C. 2210(c)) is terminated.''.

                    Subtitle E--NRC Personnel Crisis

     SEC. 541. ELIMINATION OF PENSION OFFSET.

       Section 161 of the Atomic Energy Act of 1954 (42 U.S.C. 
     2201) is amended by adding at the end the following:
       ``y. exempt from the application of sections 8344 and 8468 
     of title 5, United States Code, an annuitant who was formerly 
     an employee of the Commission who is hired by the Commission 
     as a consultant, if the Commission finds that the annuitant 
     has a skill that is critical to the performance of the duties 
     of the Commission.''.

     SEC. 542. NRC TRAINING PROGRAM.

       (a) In General.--In order to maintain the human resource 
     investment and infrastructure of the United States in the 
     nuclear sciences, health physics, and engineering fields, in 
     accordance with the statutory authorities of the Commission 
     relating to the civilian nuclear energy program, the Nuclear 
     Regulatory Commission shall carry out a training and 
     fellowship program to address shortages of individuals with 
     critical safety skills.
       (b) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section $1,000,000 for each of fiscal years 
     2003 through 2006.
       (2) Availability.--Funds made available under paragraph (1) 
     shall remain available until expended.

     DIVISION B--DOMESTIC OIL AND GAS PRODUCTION AND TRANSPORTATION

                    TITLE VI--OIL AND GAS PRODUCTION

     SEC. 601. PERMANENT AUTHORITY TO OPERATE THE STRATEGIC 
                   PETROLEUM RESERVE.

       (a) Amendment to Title I of the Energy Policy and 
     Conservation Act.--Title I of the Energy Policy and 
     Conservation Act (42 U.S.C. 6211 et seq.) is amended--
       (1) by striking section 166 (42 U.S.C. 6246) and 
     inserting--
       ``Sec. 166. There are authorized to be appropriated to the 
     Secretary such sums as may be necessary to carry out this 
     part, to remain available until expended.''; and
       (2) by striking part E (42 U.S.C. 6251; relating to the 
     expiration of title I of the Act) and its heading.
       (b) Amendment to Title II of the Energy Policy and 
     Conservation Act.--Title II of the Energy Policy and 
     Conservation Act (42 U.S.C. 6271 et seq.) is amended--
       (1) by striking section 256(h) (42 U.S.C. 6276(h)) and 
     inserting--
       ``(h) Authorization of Appropriations.--There are 
     authorized to be appropriated to the Secretary such sums as 
     may be necessary to carry out this part, to remain available 
     until expended.'';
       (2) by striking section 273(e) (42 U.S.C. 6283(e); relating 
     to the expiration of summer fill and fuel budgeting 
     programs); and
       (3) by striking part D (42 U.S.C. 6285; relating to the 
     expiration of title II of the Act) and its heading.
       (c) Technical Amendments.--The table of contents for the 
     Energy Policy and Conservation Act is amended by striking the 
     items relating to part D of title I and part D of title II.

     SEC. 602. FEDERAL ONSHORE LEASING PROGRAMS FOR OIL AND GAS.

       (a) Timely Action on Leases and Permits.--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 shall--
       (1) ensure expeditious compliance with the requirements of 
     section 102(2)(C) of the National Environmental Policy Act of 
     1969 (42 U.S.C. 4332(2)(C));
       (2) improve consultation and coordination with the States; 
     and
       (3) improve the collection, storage, and retrieval of 
     information related to such leasing activities.
       (b) Improved Enforcement.--The Secretary shall improve 
     inspection and enforcement of oil and gas activities, 
     including enforcement of terms and conditions in permits to 
     drill.
       (c) Authorization of Appropriations.--For each of the 
     fiscal years 2003 through 2006, in addition to amounts 
     otherwise authorized to be appropriated for the purpose of 
     carrying out section 17 of the Mineral Leasing Act (30 U.S.C. 
     226), there are authorized to be appropriated to the 
     Secretary of the Interior--
       (1) $40,000,000 for the purpose of carrying out paragraphs 
     (1) through (3) of subsection (a); and
       (2) $20,000,000 for the purpose of carrying out subsection 
     (b).

     SEC. 603. OIL AND GAS LEASE ACREAGE LIMITATIONS.

       Section 27(d)(1) of the Mineral Leasing Act (30 U.S.C. 
     184(d)(1)) is amended by inserting after ``acreage held in 
     special tar sand areas'' the following: ``as well as acreage 
     under any lease any portion of which has been committed to a 
     federally approved unit or cooperative plan or 
     communitization agreement, or for which royalty, including 
     compensatory royalty or royalty in kind, was paid in the 
     preceding calendar year,''.

     SEC. 604. ORPHANED AND ABANDONED WELLS ON FEDERAL LAND.

       (a) Establishment.--(1) The Secretary of the Interior, in 
     cooperation with the Secretary of Agriculture, shall 
     establish a program to ensure within 3 years after the date 
     of enactment of this Act, remediation, reclamation, and 
     closure of orphaned oil and gas wells located on lands 
     administered by the land management agencies within the 
     Department of the Interior and the United States Forest 
     Service that are--
       (A) abandoned;
       (B) orphaned; or
       (C) idled for more than 5 years and having no beneficial 
     use.
       (2) The program shall include a means of ranking critical 
     sites for priority in remediation based on potential 
     environmental harm, other land use priorities, and public 
     health and safety.
       (3) The program shall provide that responsible parties be 
     identified wherever possible and that the costs of 
     remediation be recovered.
       (4) In carrying out the program, the Secretary of the 
     Interior shall work cooperatively with the Secretary of 
     Agriculture and the States within which the Federal lands are 
     located, and shall consult with the Secretary of Energy, and 
     the Interstate Oil and Gas Compact Commission.
       (b) Plan.--Within 6 months from the date of enactment of 
     this section, the Secretary of the

[[Page S3706]]

     Interior, in cooperation with the Secretary of Agriculture, 
     shall prepare a plan for carrying out the program established 
     under subsection (a). Copies of the plan shall be transmitted 
     to the Committee on Energy and Natural Resources of the 
     Senate and the Committee on Resources of the House of 
     Representatives.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of the Interior 
     $5,000,000 for each of fiscal years 2003 through 2005 to 
     carry out the activities provided for in this section.

     SEC. 605. ORPHANED AND ABANDONED OIL AND GAS WELL PROGRAM.

       (a) Establishment.--The Secretary of Energy shall establish 
     a program to provide technical assistance to the various oil 
     and gas producing States to facilitate State efforts over a 
     10-year period to ensure a practical and economical remedy 
     for environmental problems caused by orphaned and abandoned 
     exploration or production well sites on State and private 
     lands. The Secretary shall work with the States, through the 
     Interstate Oil and Gas Compact Commission, to assist the 
     States in quantifying and mitigating environmental risks of 
     onshore abandoned and orphaned wells on State and private 
     lands.
       (b) Program Elements.--The program should include--
       (1) mechanisms to facilitate identification of responsible 
     parties wherever possible;
       (2) criteria for ranking critical sites based on factors 
     such as other land use priorities, potential environmental 
     harm and public visibility; and
       (3) information and training programs on best practices for 
     remediation of different types of sites.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Energy for the 
     activities under this section $5,000,000 for each of fiscal 
     years 2003 through 2005 to carry out the provisions of this 
     section.

     SEC. 606. OFFSHORE DEVELOPMENT.

       Section 5 of the Outer Continental Shelf Lands Act of 1953 
     (43 U.S.C. 1334) is amended by adding at the end the 
     following:
       ``(k) Suspension of Operations for Subsalt Exploration.--
     Notwithstanding any other provision of law or regulation, the 
     Secretary may grant a request for a suspension of operations 
     under any lease to allow the lessee to reprocess or 
     reinterpret geologic or geophysical data beneath allocthonous 
     salt sheets, when in the Secretary's judgment such suspension 
     is necessary to prevent waste caused by the drilling of 
     unnecessary wells, and to maximize ultimate recovery of 
     hydrocarbon resources under the lease. Such suspension shall 
     be limited to the minimum period of time the Secretary 
     determines is necessary to achieve the objectives of this 
     subsection.''.

     SEC. 607. COALBED METHANE STUDY.

       (a) Study.--The National Academy of Sciences shall conduct 
     a study on the effects of coalbed methane production on 
     surface and water resources.
       (b) Data Analysis.--The study shall analyze available 
     hydrogeologic and water quality data, along with other 
     pertinent environmental or other information to determine--
       (1) adverse effects associated with surface or subsurface 
     disposal of waters produced during extraction of coalbed 
     methane;
       (2) depletion of groundwater aquifers or drinking water 
     sources associated with production of coalbed methane;
       (3) any other significant adverse impacts to surface or 
     water resources associated with production of coalbed 
     methane; and
       (4) production techniques or other factors that can 
     mitigate adverse impacts from coalbed methane development.
       (c) Recommendations.--The study shall analyze existing 
     Federal and State laws and regulations, and make 
     recommendations as to changes, if any, to Federal law 
     necessary to address adverse impacts to surface or water 
     resources attributable to coalbed methane development.
       (d) Completion of Study.--The National Academy of Sciences 
     shall submit the study to the Secretary of the Interior 
     within 18 months after the date of enactment of this Act, and 
     shall make the study available to the public at the same 
     time.
       (e) Report to Congress.--The Secretary of the Interior 
     shall report to Congress within 6 months of her receipt of 
     the study on--
       (1) the findings and recommendations of the study;
       (2) the Secretary's agreement or disagreement with each of 
     its findings and recommendations; and
       (3) any recommended changes in funding to address the 
     effects of coalbed methane production on surface and water 
     resources.

     SEC. 608. FISCAL POLICIES TO MAXIMIZE RECOVERY OF DOMESTIC 
                   OIL AND GAS RESOURCES.

       (a) Evaluation.--The Secretary of Energy, in coordination 
     with the Secretaries of the Interior, Commerce, and Treasury, 
     Indian tribes and the Interstate Oil and Gas Compact 
     Commission, shall evaluate the impact of existing Federal and 
     State tax and royalty policies on the development of domestic 
     oil and gas resources and on revenues to Federal, State, 
     local and tribal governments.
       (b) Scope.--The evaluation under subsection (a) shall--
       (1) analyze the impact of fiscal policies on oil and 
     natural gas exploration, development drilling, and production 
     under different price scenarios, including the impact of the 
     individual and corporate Alternative Minimum Tax, State and 
     local production taxes and fixed royalty rates during low 
     price periods;
       (2) assess the effect of existing Federal and State fiscal 
     policies on investment under different geological and 
     developmental circumstances, including but not limited to 
     deepwater environments, subsalt formations, deep and deviated 
     wells, coalbed methane and other unconventional oil and gas 
     formations;
       (3) assess the extent to which Federal and State fiscal 
     policies negatively impact the ultimate recovery of resources 
     from existing fields and smaller accumulations in offshore 
     waters, especially in water depths less than 800 meters, of 
     the Gulf of Mexico;
       (4) compare existing Federal and State policies with tax 
     and royalty regimes in other countries with particular 
     emphasis on similar geological, developmental and 
     infrastructure conditions; and
       (5) evaluate how alternative tax and royalty policies, 
     including counter-cyclical measures, could increase recovery 
     of domestic oil and natural gas resources and revenues to 
     Federal, State, local and tribal governments.
       (c) Policy Recommendations.--Based upon the findings of the 
     evaluation under subsection (a), a report describing the 
     findings and recommendations for policy changes shall be 
     provided to the President, the Congress, the Governors of the 
     member States of the Interstate Oil and Gas Compact 
     Commission, and Indian tribes having an oil and gas lease 
     approved by the Secretary of the Interior. The 
     recommendations should ensure that the public interest in 
     receiving the economic benefits of tax and royalty revenues 
     is balanced with the broader national security and economic 
     interests in maximizing recovery of domestic resources. The 
     report should include recommendations regarding actions to--
       (1) ensure stable development drilling during periods of 
     low oil and/or natural gas prices to maintain reserve 
     replacement and deliverability;
       (2) minimize the negative impact of a volatile investment 
     climate on the oil and gas service industry and domestic oil 
     and gas exploration and production;
       (3) ensure a consistent level of domestic activity to 
     encourage the education and retention of a technical 
     workforce; and
       (4) maintain production capability during periods of low 
     oil and/or natural gas prices.
       (d) Royalty Guidelines.--The recommendations required under 
     (c) should include guidelines for private resource holders as 
     to the appropriate level of royalties given geology, 
     development cost, and the national interest in maximizing 
     recovery of oil and gas resources.
       (e) Report.--The study under subsection (a) shall be 
     completed not later than 18 months after the date of 
     enactment of this section. The report and recommendations 
     required in (c) shall be transmitted to the President, the 
     Congress, Indian tribes, and the Governors of the member 
     States of the Interstate Oil and Gas Compact Commission.

     SEC. 609. STRATEGIC PETROLEUM RESERVE.

       (a) Full Capacity.--The President shall--
       (1) fill the Strategic Petroleum Reserve established 
     pursuant to part B of title I of the Energy Policy and 
     Conservation Act (42 U.S.C. 6231 et seq.) to full capacity as 
     soon as practicable;
       (2) acquire petroleum for the Strategic Petroleum Reserve 
     by the most practicable and cost-effective means, including 
     the acquisition of crude oil the United States is entitled to 
     receive in kind as royalties from production on Federal 
     lands; and
       (3) ensure that the fill rate minimizes impacts on 
     petroleum markets.
       (b) Recommendations.--Not later than 180 days after the 
     date of enactment of this Act, the Secretary of Energy shall 
     submit to Congress a plan to--
       (1) eliminate any infrastructure impediments that may limit 
     maximum drawdown capability; and
       (2) determine whether the capacity of the Strategic 
     Petroleum Reserve on the date of enactment of this section is 
     adequate in light of the increasing consumption of petroleum 
     and the reliance on imported petroleum.

     SEC. 610. HYDRAULIC FRACTURING.

       Section 1421 of the Safe Drinking Water Act (42 U.S.C. 
     300h) is amended by adding at the end the following:
       ``(e) Hydraulic Fracturing for Oil and Gas Production.--
       ``(1) Study of the effects of hydraulic fracturing.--
       ``(A) In general.--As soon as practicable, but in no event 
     later than 24 months after the date of enactment of this 
     subsection, the Administrator shall complete a study of the 
     known and potential effects on underground drinking water 
     sources of hydraulic fracturing, including the effects of 
     hydraulic fracturing on underground drinking water sources on 
     a nationwide basis, and within specific regions, States, or 
     portions of States.
       ``(B) Consultation.--In planning and conducting the study, 
     the Administrator shall consult with the Secretary of the 
     Interior, the Secretary of Energy, the Ground Water 
     Protection Council, affected States, and, as appropriate, 
     representatives of environmental, industry, academic, 
     scientific, public health, and other relevant organizations. 
     Such study may be accomplished in conjunction with other 
     ongoing studies related to the effects of oil and gas 
     production on groundwater resources.
       ``(C) Study elements.--The study conducted under 
     subparagraph (A) shall, at a minimum, examine and make 
     findings as to whether--
       ``(i) such hydraulic fracturing has endangered or will 
     endanger (as defined under subsection (d)(2)) underground 
     drinking water sources, including those sources within 
     specific regions, States or portions of States;
       ``(ii) there are specific methods, practices, or 
     hydrogeologic circumstances in which hydraulic fracturing has 
     endangered or will endanger underground drinking water 
     sources; and
       ``(iii) there are any precautionary actions that may reduce 
     or eliminate any such endangerment.

[[Page S3707]]

       ``(D) Study of hydraulic fracturing in a particular type of 
     geologic formation.--The Administrator may also complete a 
     separate study on the known and potential effects on 
     underground drinking water sources of hydraulic fracturing in 
     a particular type of geologic formation:
       ``(i) If such a study is undertaken, the Administrator 
     shall follow the procedures for study preparation and 
     independent scientific review set forth in subparagraphs (1) 
     (B) and (C) and (2) of this subsection. The Administrator may 
     complete this separate study prior to the completion of the 
     broader study of hydraulic fracturing required pursuant to 
     subparagraph (A) of this subsection.
       ``(ii) At the conclusion of independent scientific review 
     for any separate study, the Administrator shall determine, 
     pursuant to paragraph (3), whether regulation of hydraulic 
     fracturing in the particular type of geologic formation 
     addressed in the separate study is necessary under this part 
     to ensure that underground sources of drinking water will not 
     be endangered on a nationwide basis, or within a specific 
     region, State or portions of a State. Subparagraph (4) of 
     this subsection shall apply to any such determination by the 
     Administrator.
       ``(iii) If the Administrator completes a separate study, 
     the Administrator may use the information gathered in the 
     course of such a study in undertaking her broad study to the 
     extent appropriate. The broader study need not include a 
     reexamination of the conclusions reached by the Administrator 
     in any separate study.
       ``(2) Independent scientific review.--
       ``(A) In general.--Prior to the time the study under 
     paragraph (1) is completed, the Administrator shall enter 
     into an appropriate agreement with the National Academy of 
     Sciences to have the Academy review the conclusions of the 
     study.
       ``(B) Report.--Not later than 11 months after entering into 
     an appropriate agreement with the Administrator, the National 
     Academy of Sciences shall report to the Administrator, the 
     Committee on Energy and Commerce of the House of 
     Representatives, and the Committee on Environment and Public 
     Works of the Senate, on the--
       ``(i) findings related to the study conducted by the 
     Administrator under paragraph (1);
       ``(ii) the scientific and technical basis for such 
     findings; and
       ``(iii) recommendations, if any, for modifying the findings 
     of the study.
       ``(3) Regulatory determination.--
       ``(A) In general.--Not later than 6 months after receiving 
     the National Academy of Sciences report under paragraph (2), 
     the Administrator shall determine, after informal public 
     hearings and public notice and opportunity for comment, and 
     based on information developed or accumulated in connection 
     with the study required under paragraph (1) and the National 
     Academy of Sciences report under paragraph (2), either--
       ``(i) that regulation of hydraulic fracturing under this 
     part is necessary to ensure that underground sources of 
     drinking water will not be endangered on a nationwide basis, 
     or within a specific region, State or portions of a State; or
       ``(ii) that regulation described under clause (i) is 
     unnecessary.
       ``(B) Publication of determination.--The Administrator 
     shall publish the determination in the Federal Register, 
     accompanied by an explanation and the reasons for it.
       ``(4) Promulgation of regulations.--
       ``(A) Regulation necessary.--If the Administrator 
     determines under paragraph (3) that regulation by hydraulic 
     fracturing under this part is necessary to ensure that 
     hydraulic fracturing does not endanger underground drinking 
     water sources on a nationwide basis, or within a specific 
     region, State or portions of a State, the Administrator 
     shall, within 6 months after the issuance of that 
     determination, and after public notice and opportunity for 
     comment, promulgate regulations under section 1421 (42 U.S.C. 
     300h) to ensure that hydraulic fracturing will not endanger 
     such underground sources of drinking water. However, for 
     purposes of the Administrator's approval or disapproval under 
     section 1422 of any State underground injection control 
     program for regulating hydraulic fracturing, a State at any 
     time may make the alternative demonstration provided for in 
     section 1425 of this title.
       ``(B) Regulation unnecessary.--The Administrator shall not 
     regulate or require States to regulate hydraulic fracturing 
     under this part unless the Administrator determines under 
     paragraph (3) that such regulation is necessary. This 
     provision shall not apply to any State which has a program 
     for the regulation of hydraulic fracturing that was approved 
     by the Administrator under this part prior to the effective 
     date of this subsection.
       ``(C) Existing regulations.--A determination by the 
     Administrator under paragraph (3) that regulation is 
     unnecessary will relieve all States (including those with 
     existing approved programs for the regulation of hydraulic 
     fracturing) from any further obligation to regulate hydraulic 
     fracturing as an underground injection under this part.
       ``(5) Definition of hydraulic fracturing.--For purposes of 
     this subsection, the term `hydraulic fracturing' means the 
     process of creating a fracture in a reservoir rock, and 
     injecting fluids and propping agents, for the purposes of 
     reservoir stimulation related to oil and gas production 
     activities.
       ``(6) Savings.--Nothing in this subsection shall in any way 
     limit the authorities of the Administrator under section 1431 
     (42 U.S.C. 300i).''.

     SEC. 611. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the 
     Administrator of the Environmental Protection Agency $100,000 
     for fiscal year 2003, to remain available until expended, for 
     a grant to the State of Alabama to assist in the 
     implementation of its regulatory program under section 1425 
     of the Safe Drinking Water Act.

     SEC. 612. PRESERVATION OF OIL AND GAS RESOURCE DATA.

       The Secretary of the Interior, through the United States 
     Geological Survey, may enter into appropriate arrangements 
     with State agencies that conduct geological survey activities 
     to collect, archive, and provide public access to data and 
     study results regarding oil and natural gas resources. The 
     Secretary may accept private contributions of property and 
     services for purposes of this section.

     SEC 613. RESOLUTION OF FEDERAL RESOURCE DEVELOPMENT CONFLICTS 
                   IN THE POWDER RIVER BASIN.

       The Secretary of the Interior shall undertake a review of 
     existing authorities to resolve conflicts between the 
     development of Federal coal and the development of Federal 
     and non-Federal coalbed methane in the Powder River Basin in 
     Wyoming and Montana. Not later than 90 days from enactment of 
     this Act, the Secretary shall report to Congress on her plan 
     to resolve these conflicts.

                    TITLE VII--NATURAL GAS PIPELINES

                Subtitle A--Alaska Natural Gas Pipeline

     SEC. 701. SHORT TITLE.

       This subtitle may be cited as the ``Alaska Natural Gas 
     Pipeline Act of 2002''.

     SEC. 702. FINDINGS.

       The Congress finds that:
       (1) Construction of a natural gas pipeline system from the 
     Alaskan North Slope to United States markets is in the 
     national interest and will enhance national energy security 
     by providing access to the significant gas reserves in Alaska 
     needed to meet the anticipated demand for natural gas.
       (2) The Commission issued a conditional certificate of 
     public convenience and necessity for the Alaska Natural Gas 
     Transportation System, which remains in effect.

     SEC. 703. PURPOSES.

       The purposes of this subtitle are--
       (1) to provide a statutory framework for the expedited 
     approval, construction, and initial operation of an Alaska 
     natural gas transportation project, as an alternative to the 
     framework provided in the Alaska Natural Gas Transportation 
     Act of 1976 (15 U.S.C. 719-719o), which remains in effect;
       (2) to establish a process for providing access to such 
     transportation project in order to promote competition in the 
     exploration, development and production of Alaska natural 
     gas;
       (3) to clarify Federal authorities under the Alaska Natural 
     Gas Transportation Act; and
       (4) to authorize Federal financial assistance to an Alaska 
     natural gas transportation project as provided in this 
     subtitle.

     SEC. 704. ISSUANCE OF CERTIFICATE OF PUBLIC CONVENIENCE AND 
                   NECESSITY.

       (a) Authority of the Commission.--Notwithstanding the 
     provisions of the Alaska Natural Gas Transportation Act of 
     1976 (15 U.S.C. 719-719o), the Commission may, pursuant to 
     section 7(c) of the Natural Gas Act (15 U.S.C. 717f(c)), 
     consider and act on an application for the issuance of a 
     certificate of public convenience and necessity authorizing 
     the construction and operation of an Alaska natural gas 
     transportation project other than the Alaska Natural Gas 
     Transportation System.
       (b) Issuance of Certificate.--(1) The Commission shall 
     issue a certificate of public convenience and necessity 
     authorizing the construction and operation of an Alaska 
     natural gas transportation project under this section if the 
     applicant has satisfied the requirements of section 7(e) of 
     the Natural Gas Act (15 U.S.C. 717f(e)).
       (2) In considering an application under this section, the 
     Commission shall presume that--
       (A) a public need exists to construct and operate the 
     proposed Alaska natural gas transportation project; and
       (B) sufficient downstream capacity will exist to transport 
     the Alaska natural gas moving through such project to markets 
     in the contiguous United States.
       (c) Expedited Approval Process.--The Commission shall issue 
     a final order granting or denying any application for a 
     certificate of public convenience and necessity under section 
     7(c) of the Natural Gas Act (15 U.S.C. 717f(c)) and this 
     section not more than 60 days after the issuance of the final 
     environmental impact statement for that project pursuant to 
     section 705.
       (d) Prohibition on Certain Pipeline Route.--No license, 
     permit, lease, right-of-way, authorization or other approval 
     required under Federal law for the construction of any 
     pipeline to transport natural gas from lands within the 
     Prudhoe Bay oil and gas lease area may be granted for any 
     pipeline that follows a route that traverses--
       (1) the submerged lands (as defined by the Submerged Lands 
     Act) beneath, or the adjacent shoreline of, the Beaufort Sea; 
     and
       (2) enters Canada at any point north of 68 degrees North 
     latitude.
       (e) Open Season.--Except where an expansion is ordered 
     pursuant to section 706, initial or expansion capacity on any 
     Alaska natural gas transportation project shall be allocated 
     in accordance with procedures to be established by the 
     Commission in regulations governing the conduct of open 
     seasons for such project. Such procedures shall include the 
     criteria for and timing of any open seasons, be consistent 
     with the purposes set forth in section 703(2) and, for any 
     open season for capacity beyond the initial capacity, provide 
     the opportunity for the transportation of natural gas other 
     than from the Prudhoe Bay and Point Thompson units. The 
     Commission shall issue such regulations no later

[[Page S3708]]

     than 120 days after the enactment of this subtitle.
       (f) Projects in the Contiguous United States.--Applications 
     for additional or expanded pipeline facilities that may be 
     required to transport Alaska natural gas from Canada to 
     markets in the contiguous United States may be made pursuant 
     to the Natural Gas Act. To the extent such pipeline 
     facilities include the expansion of any facility constructed 
     pursuant to the Alaska Natural Gas Transportation Act of 
     1976, the provisions of that Act shall continue to apply.
       (g) Study of In-State Needs.--The holder of the certificate 
     of public convenience and necessity issued, modified, or 
     amended by the Commission for an Alaska natural gas 
     transportation project shall demonstrate that it has 
     conducted a study of Alaska in-State needs, including tie-in 
     points along the Alaska natural gas transportation project 
     for in-State access.
       (h) Alaska Royalty Gas.--The Commission, upon the request 
     of the State of Alaska and after a hearing, may provide for 
     reasonable access to the Alaska natural gas transportation 
     project for the State of Alaska or its designee for the 
     transportation of the State's royalty gas for local 
     consumption needs within the State: Provided, That the rates 
     of existing shippers of subscribed capacity on such project 
     shall not be increased as a result of such access.
       (i) Regulations.--The Commission may issue regulations to 
     carry out the provisions of this section.

     SEC. 705. ENVIRONMENTAL REVIEWS.

       (a) Compliance With NEPA.--The issuance of a certificate of 
     public convenience and necessity authorizing the construction 
     and operation of any Alaska natural gas transportation 
     project under section 704 shall be treated as a major Federal 
     action significantly affecting the quality of the human 
     environment within the meaning of section 102(2)(C) of the 
     National Environmental Policy Act of 1969 (42 U.S.C. 
     4332(2)(C)).
       (b) Designation of Lead Agency.--The Commission shall be 
     the lead agency for purposes of complying with the National 
     Environmental Policy Act of 1969, and shall be responsible 
     for preparing the statement required by section 102(2)(c) of 
     that Act (42 U.S.C. 4332(2)(c)) with respect to an Alaska 
     natural gas transportation project under section 704. The 
     Commission shall prepare a single environmental statement 
     under this section, which shall consolidate the environmental 
     reviews of all Federal agencies considering any aspect of the 
     project.
       (c) Other Agencies.--All Federal agencies considering 
     aspects of the construction and operation of an Alaska 
     natural gas transportation project under section 704 shall 
     cooperate with the Commission, and shall comply with 
     deadlines established by the Commission in the preparation of 
     the statement under this section. The statement prepared 
     under this section shall be used by all such agencies to 
     satisfy their responsibilities under section 102(2)(C) of the 
     National Environmental Policy Act of 1969 (42 U.S.C. 
     4332(2)(C)) with respect to such project.
       (d) Expedited Process.--The Commission shall issue a draft 
     statement under this section not later than 12 months after 
     the Commission determines the application to be complete and 
     shall issue the final statement not later than 6 months after 
     the Commission issues the draft statement, unless the 
     Commission for good cause finds that additional time is 
     needed.

     SEC. 706. PIPELINE EXPANSION.

       (a) Authority.--With respect to any Alaska natural gas 
     transportation project, upon the request of one or more 
     persons and after giving notice and an opportunity for a 
     hearing, the Commission may order the expansion of such 
     project if it determines that such expansion is required by 
     the present and future public convenience and necessity.
       (b) Requirements.--Before ordering an expansion the 
     Commission shall--
       (1) approve or establish rates for the expansion service 
     that are designed to ensure the recovery, on an incremental 
     or rolled-in basis, of the cost associated with the expansion 
     (including a reasonable rate of return on investment);
       (2) ensure that the rates as established do not require 
     existing shippers on the Alaska natural gas transportation 
     project to subsidize expansion shippers;
       (3) find that the proposed shipper will comply with, and 
     the proposed expansion and the expansion of service will be 
     undertaken and implemented based on, terms and conditions 
     consistent with the then-effective tariff of the Alaska 
     natural gas transportation project;
       (4) find that the proposed facilities will not adversely 
     affect the financial or economic viability of the Alaska 
     natural gas transportation project;
       (5) find that the proposed facilities will not adversely 
     affect the overall operations of the Alaska natural gas 
     transportation project;
       (6) find that the proposed facilities will not diminish the 
     contract rights of existing shippers to previously subscribed 
     certificated capacity;
       (7) ensure that all necessary environmental reviews have 
     been completed; and
       (8) find that adequate downstream facilities exist or are 
     expected to exist to deliver incremental Alaska natural gas 
     to market.
       (c) Requirement for a Firm Transportation Agreement.--Any 
     order of the Commission issued pursuant to this section shall 
     be null and void unless the person or persons requesting the 
     order executes a firm transportation agreement with the 
     Alaska natural gas transportation project within a reasonable 
     period of time as specified in such order.
       (d) Limitation.--Nothing in this section shall be construed 
     to expand or otherwise affect any authorities of the 
     Commission with respect to any natural gas pipeline located 
     outside the State of Alaska.
       (e) Regulations.--The Commission may issue regulations to 
     carry out the provisions of this section.

     SEC. 707. FEDERAL COORDINATOR.

       (a) Establishment.--There is established as an independent 
     establishment in the executive branch, the Office of the 
     Federal Coordinator for Alaska Natural Gas Transportation 
     Projects.
       (b) The Federal Coordinator.--The Office shall be headed by 
     a Federal Coordinator for Alaska Natural Gas Transportation 
     Projects, who shall--
       (1) be appointed by the President, by and with the advice 
     of the Senate,
       (2) hold office at the pleasure of the President, and
       (3) be compensated at the rate prescribed for level III of 
     the Executive Schedule (5 U.S.C. 5314).
       (c) Duties.--The Federal Coordinator shall be responsible 
     for--
       (1) coordinating the expeditious discharge of all 
     activities by Federal agencies with respect to an Alaska 
     natural gas transportation project; and
       (2) ensuring the compliance of Federal agencies with the 
     provisions of this subtitle.
       (d) Reviews and Actions of Other Federal Agencies.--(1) All 
     reviews conducted and actions taken by any Federal officer or 
     agency relating to an Alaska natural gas transportation 
     project authorized under this section shall be expedited, in 
     a manner consistent with completion of the necessary reviews 
     and approvals by the deadlines set forth in this subtitle.
       (2) No Federal officer or agency shall have the authority 
     to include terms and conditions that are permitted, but not 
     required, by law on any certificate, right-of-way, permit, 
     lease or other authorization issued to an Alaska natural gas 
     transportation project if the Federal Coordinator determines 
     that the terms and conditions would prevent or impair in any 
     significant respect the expeditious construction and 
     operation of the project.
       (3) Unless required by law, no Federal officer or agency 
     shall add to, amend, or abrogate any certificate, right-of-
     way, permit, lease or other authorization issued to an Alaska 
     natural gas transportation project if the Federal Coordinator 
     determines that such action would prevent or impair in any 
     significant respect the expeditious construction and 
     operation of the project.
       (e) State Coordination.--The Federal Coordinator shall 
     enter into a Joint Surveillance and Monitoring Agreement, 
     approved by the President and the Governor of Alaska, with 
     the State of Alaska similar to that in effect during 
     construction of the Trans-Alaska Oil Pipeline to monitor the 
     construction of the Alaska natural gas transportation 
     project. The Federal Government shall have primary 
     surveillance and monitoring responsibility where the Alaska 
     natural gas transportation project crosses Federal lands and 
     private lands, and the State government shall have primary 
     surveillance and monitoring responsibility where the Alaska 
     natural gas transportation project crosses State lands.

     SEC. 708. JUDICIAL REVIEW.

       (a) Exclusive Jurisdiction.--The United States Court of 
     Appeals for the District of Columbia Circuit shall have 
     exclusive jurisdiction to determine--
       (1) the validity of any final order or action (including a 
     failure to act) of any Federal agency or officer under this 
     subtitle;
       (2) the constitutionality of any provision of this 
     subtitle, or any decision made or action taken thereunder; or
       (3) the adequacy of any environmental impact statement 
     prepared under the National Environmental Policy Act of 1969 
     with respect to any action under this subtitle.
       (b) Deadline for Filing Claim.--Claims arising under this 
     subtitle may be brought not later than 60 days after the date 
     of the decision or action giving rise to the claim.
       (c) Expedited Consideration.--The United States Court of 
     Appeals for the District of Columbia Circuit shall set any 
     action brought under subsection (a) of this section for 
     expedited consideration, taking into account the national 
     interest as described in section 702 of this subtitle.
       (d) Amendment to ANGTA.--Section 10(c) of the Alaska Gas 
     Transportation Act of 1976 (15 U.S.C. 719h) is amended by 
     adding the following paragraph:
       ``(2) Expedited consideration.--The United States Court of 
     Appeals for the District of Columbia Circuit shall set any 
     action brought under subsection (a) of this section for 
     expedited consideration, taking into account the national 
     interest described in section 2 of this Act.''.

     SEC. 709. STATE JURISDICTION OVER IN-STATE DELIVERY OF 
                   NATURAL GAS.

       (a) Local Distribution.--Any facility receiving natural gas 
     from the Alaska natural gas transportation project for 
     delivery to consumers within the State of Alaska shall be 
     deemed to be a local distribution facility within the meaning 
     of section 1(b) of the Natural Gas Act (15 U.S.C. 717), and 
     therefore not subject to the jurisdiction of the Federal 
     Energy Regulatory Commission.
       (b) Additional Pipelines.--Nothing in this subtitle, except 
     as provided in subsection 704(d), shall preclude or affect a 
     future gas pipeline that may be constructed to deliver 
     natural gas to Fairbanks, Anchorage, Matanuska-Susitna 
     Valley, or the Kenai peninsula or Valdez or any other site in 
     the State of Alaska for consumption within or distribution 
     outside the State of Alaska.
       (c) Rate Coordination.--Pursuant to the Natural Gas Act, 
     the Commission shall establish rates for the transportation 
     of natural gas on the Alaska natural gas transportation 
     project. In exercising such authority, the Commission, 
     pursuant to Section 17(b) of the Natural Gas Act (15 U.S.C. 
     717p), shall confer with the State of

[[Page S3709]]

     Alaska regarding rates (including rate settlements) 
     applicable to natural gas transported on and delivered from 
     the Alaska natural gas transportation project for use within 
     the State of Alaska.

     SEC. 710. LOAN GUARANTEE.

       (a) Authority.--The Secretary of Energy may guarantee not 
     more than 80 percent of the principal of any loan made to the 
     holder of a certificate of public convenience and necessity 
     issued under section 704(b) of this Act or section 9 of the 
     Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 
     719g) for the purpose of constructing an Alaska natural gas 
     transportation project.
       (b) Conditions.--(1) The Secretary of Energy may not 
     guarantee a loan under this section unless the guarantee has 
     filed an application for a certificate of public convenience 
     and necessity under section 704(b) of this Act or for an 
     amended certificate under section 9 of the Alaska Natural Gas 
     Transportation Act of 1976 (15 U.S.C. 719g) with the 
     Commission not later than 18 months after the date of 
     enactment of this subtitle.
       (2) A loan guaranteed under this section shall be made by a 
     financial institution subject to the examination of the 
     Secretary.
       (3) Loan requirements, including term, maximum size, 
     collateral requirements and other features shall be 
     determined by the Secretary.
       (c) Limitation on Amount.--Commitments to guarantee loans 
     may be made by the Secretary of Energy only to the extent 
     that the total loan principal, any part of which is 
     guaranteed, will not exceed $10,000,000,000.
       (d) Regulations.--The Secretary of Energy may issue 
     regulations to carry out the provisions of this section.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary to cover the cost of loan guarantees, as defined by 
     section 502(5) of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661a(5)).

     SEC. 711. STUDY OF ALTERNATIVE MEANS OF CONSTRUCTION.

       (a) Requirement of Study.--If no application for the 
     issuance of a certificate or amended certificate of public 
     convenience and necessity authorizing the construction and 
     operation of an Alaska natural gas transportation project has 
     been filed with the Commission within 18 months after the 
     date of enactment of this title, the Secretary of Energy 
     shall conduct a study of alternative approaches to the 
     construction and operation of the project.
       (b) Scope of Study.--The study shall consider the 
     feasibility of establishing a Government corporation to 
     construct an Alaska natural gas transportation project, and 
     alternative means of providing Federal financing and 
     ownership (including alternative combinations of Government 
     and private corporate ownership) of the project.
       (c) Consultation.--In conducting the study, the Secretary 
     of Energy shall consult with the Secretary of the Treasury 
     and the Secretary of the Army (acting through the Commanding 
     General of the Corps of Engineers).
       (d) Report.--If the Secretary of Energy is required to 
     conduct a study under subsection (a), he shall submit a 
     report containing the results of the study, his 
     recommendations, and any proposals for legislation to 
     implement his recommendations to the Congress within 6 months 
     after the expiration of the Secretary of Energy's authority 
     to guarantee a loan under section 710.

     SEC. 712. CLARIFICATION OF ANGTA STATUS AND AUTHORITIES.

       (a) Savings Clause.--Nothing in this subtitle affects any 
     decision, certificate, permit, right-of-way, lease, or other 
     authorization issued under section 9 of the Alaska Natural 
     Gas Transportation Act of 1976 (15 U.S.C. 719g) or any 
     Presidential findings or waivers issued in accordance with 
     that Act.
       (b) Clarification of Authority to Amend Terms and 
     Conditions to Meet Current Project Requirements.--Any Federal 
     officer or agency responsible for granting or issuing any 
     certificate, permit, right-of-way, lease, or other 
     authorization under section 9 of the Alaska Natural Gas 
     Transportation Act of 1976 (15 U.S.C. 719g) may add to, 
     amend, or abrogate any term or condition included in such 
     certificate, permit, right-of-way, lease, or other 
     authorization to meet current project requirements (including 
     the physical design, facilities, and tariff specifications), 
     so long as such action does not compel a change in the basic 
     nature and general route of the Alaska Natural Gas 
     Transportation System as designated and described in section 
     2 of the President's Decision, or would otherwise prevent or 
     impair in any significant respect the expeditious 
     construction and initial operation of such transportation 
     system.
       (c) Updated Environmental Reviews.--The Secretary of Energy 
     shall require the sponsor of the Alaska Natural Gas 
     Transportation System to submit such updated environmental 
     data, reports, permits, and impact analyses as the Secretary 
     determines are necessary to develop detailed terms, 
     conditions, and compliance plans required by section 5 of the 
     President's Decision.

     SEC. 713. DEFINITIONS.

       For purposes of this subtitle:
       (1) The term ``Alaska natural gas'' means natural gas 
     derived from the area of the State of Alaska lying north of 
     64 degrees North latitude.
       (2) The term ``Alaska natural gas transportation project'' 
     means any natural gas pipeline system that carries Alaska 
     natural gas to the border between Alaska and Canada 
     (including related facilities subject to the jurisdiction of 
     the Commission) that is authorized under either--
       (A) the Alaska Natural Gas Transportation Act of 1976 (15 
     U.S.C. 719-719o); or
       (B) section 704 of this subtitle.
       (3) The term ``Alaska Natural Gas Transportation System'' 
     means the Alaska natural gas transportation project 
     authorized under the Alaska Natural Gas Transportation Act of 
     1976 and designated and described in section 2 of the 
     President's Decision.
       (4) The term ``Commission'' means the Federal Energy 
     Regulatory Commission.
       (5) The term ``President's Decision'' means the Decision 
     and Report to Congress on the Alaska Natural Gas 
     Transportation system issued by the President on September 
     22, 1977 pursuant to section 7 of the Alaska Natural Gas 
     Transportation Act of 1976 (15 U.S.C. 719c) and approved by 
     Public Law 95-158.

     SEC. 714. SENSE OF THE SENATE.

       It is the sense of the Senate that an Alaska natural gas 
     transportation project will provide significant economic 
     benefits to the United States and Canada. In order to 
     maximize those benefits, the Senate urges the sponsors of the 
     pipeline project to make every effort to use steel that is 
     manufactured or produced in North America and to negotiate a 
     project labor agreement to expedite construction of the 
     pipeline.

     SEC. 715. ALASKAN PIPELINE CONSTRUCTION TRAINING PROGRAM.

       (a) Within six months after enactment of this Act, the 
     Secretary of Labor (in this section referred to as the 
     ``Secretary'') shall submit a report to the Committee on 
     Energy and Natural Resources of the United States Senate and 
     the Committee on Resources of the United States House of 
     Representatives setting forth a program to train Alaska 
     residents in the skills and crafts required in the design, 
     construction, and operation of an Alaska gas pipeline system 
     and that will enhance employment and contracting 
     opportunities for Alaskan residents. The report shall also 
     describe any laws, rules, regulations and policies which act 
     as a deterrent to hiring Alaskan residents or contracting 
     with Alaskan residents to perform work on Alaska gas 
     pipelines, together with any recommendations for change. For 
     purposes of this subsection, Alaskan residents shall be 
     defined as those individuals eligible to vote within the 
     State of Alaska on the date of enactment of this Act.
       (b) Within 1 year of the date the report is transmitted to 
     Congress, the Secretary shall establish within the State of 
     Alaska, at such locations as are appropriate, one or more 
     training centers for the express purpose of training Alaskan 
     residents in the skills and crafts necessary in the design, 
     construction and operation of gas pipelines in Alaska. Each 
     such training center shall also train Alaskan residents in 
     the skills required to write, offer, and monitor contracts in 
     support of the design, construction, and operation of Alaska 
     gas pipelines.
       (c) In implementing the report and program described in 
     this subsection, the Secretary shall consult with the Alaskan 
     Governor.
       (d) There are authorized to be appropriated to the 
     Secretary such sums as may be necessary, but not to exceed 
     $20,000,000 for the purposes of this subsection.

                    Subtitle B--Operating Pipelines

     SEC. 721. ENVIRONMENTAL REVIEW AND PERMITTING OF NATURAL GAS 
                   PIPELINE PROJECTS.

       (a) Interagency Review.--The Chairman of the Council on 
     Environmental Quality, in coordination with the Federal 
     Energy Regulatory Commission, shall establish an interagency 
     task force to develop an interagency memorandum of 
     understanding to expedite the environmental review and 
     permitting of natural gas pipeline projects.
       (b) Membership of Interagency Task Force.--The task force 
     shall consist of--
       (1) the Chairman of the Council on Environmental Quality, 
     who shall serve as the Chairman of the interagency task 
     force,
       (2) the Chairman of the Federal Energy Regulatory 
     Commission,
       (3) the Director of the Bureau of Land Management,
       (4) the Director of the United States Fish and Wildlife 
     Service,
       (5) the Commanding General, United States Army Corps of 
     Engineers,
       (6) the Chief of the Forest Service,
       (7) the Administrator of the Environmental Protection 
     Agency,
       (8) the Chairman of the Advisory Council on Historic 
     Preservation, and
       (9) the heads of such other agencies as the Chairman of the 
     Council on Environmental Quality and the Chairman of the 
     Federal Energy Regulatory Commission deem appropriate.
       (c) Memorandum of Understanding.--The agencies represented 
     by the members of the interagency task force shall enter into 
     the memorandum of understanding not later than 1 year after 
     the date of the enactment of this section.

                      Subtitle C--Pipeline Safety

               PART I--SHORT TITLE; AMENDMENT OF TITLE 49

     SEC. 741. SHORT TITLE; AMENDMENT OF TITLE 49, UNITED STATES 
                   CODE.

       (a) Short Title.--This subtitle may be cited as the 
     ``Pipeline Safety Improvement Act of 2002''.
       (b) Amendment of Title 49, United States Code.--Except as 
     otherwise expressly provided, whenever in this subtitle an 
     amendment or repeal is expressed in terms of an amendment to, 
     or a repeal of, a section or other provision, the reference 
     shall be considered to be made to a section or other 
     provision of title 49, United States Code.

            PART II--PIPELINE SAFETY IMPROVEMENT ACT OF 2002

     SEC. 761. IMPLEMENTATION OF INSPECTOR GENERAL 
                   RECOMMENDATIONS.

       (a) In General.--Except as otherwise required by this 
     subtitle, the Secretary shall implement the safety 
     improvement recommendations provided for in the Department of 
     Transportation Inspector General's Report (RT-2000-069).

[[Page S3710]]

       (b) Reports by the Secretary.--Not later than 90 days after 
     the date of enactment of this Act, and every 90 days 
     thereafter until each of the recommendations referred to in 
     subsection (a) has been implemented, the Secretary shall 
     transmit to the Committee on Commerce, Science, and 
     Transportation of the Senate and the Committee on 
     Transportation and Infrastructure of the House of 
     Representatives a report on the specific actions taken to 
     implement such recommendations.
       (c) Reports by the Inspector General.--The Inspector 
     General shall periodically transmit to the committees 
     referred to in subsection (b) a report assessing the 
     Secretary's progress in implementing the recommendations 
     referred to in subsection (a) and identifying options for the 
     Secretary to consider in accelerating recommendation 
     implementation.

     SEC. 762. NTSB SAFETY RECOMMENDATIONS.

       (a) In General.--The Secretary of Transportation, the 
     Administrator of Research and Special Program Administration, 
     and the Director of the Office of Pipeline Safety shall fully 
     comply with section 1135 of title 49, United States Code, to 
     ensure timely responsiveness to National Transportation 
     Safety Board recommendations about pipeline safety.
       (b) Public Availability.--The Secretary, Administrator, or 
     Director, respectively, shall make a copy of each 
     recommendation on pipeline safety and response, as described 
     in sections 1135 (a) and (b) of title 49, United States Code, 
     available to the public at reasonable cost.
       (c) Reports to Congress.--The Secretary, Administrator, or 
     Director, respectively, shall submit to the Congress by 
     January 1 of each year a report containing each 
     recommendation on pipeline safety made by the Board during 
     the prior year and a copy of the response to each such 
     recommendation.

     SEC. 763. QUALIFICATIONS OF PIPELINE PERSONNEL.

       (a) Qualification Plan.--Each pipeline operator shall make 
     available to the Secretary of Transportation, or, in the case 
     of an intrastate pipeline facility operator, the appropriate 
     State regulatory agency, a plan that is designed to enhance 
     the qualifications of pipeline personnel and to reduce the 
     likelihood of accidents and injuries. The plan shall be made 
     available not more than 6 months after the date of enactment 
     of this Act, and the operator shall revise or update the plan 
     as appropriate.
       (b) Requirements.--The enhanced qualification plan shall 
     include, at a minimum, criteria to demonstrate the ability of 
     an individual to safely and properly perform tasks identified 
     under section 60102 of title 49, United States Code. The plan 
     shall also provide for training and periodic reexamination of 
     pipeline personnel qualifications and provide for 
     requalification as appropriate. The Secretary, or, in the 
     case of an intrastate pipeline facility operator, the 
     appropriate State regulatory agency, may review and certify 
     the plans to determine if they are sufficient to provide a 
     safe operating environment and shall periodically review the 
     plans to ensure the continuation of a safe operation. The 
     Secretary may establish minimum standards for pipeline 
     personnel training and evaluation, which may include written 
     examination, oral examination, work performance history 
     review, observation during performance on the job, on the job 
     training, simulations, or other forms of assessment.
       (c) Report to Congress.--
       (1) In general.--The Secretary shall submit a report to the 
     Congress evaluating the effectiveness of operator 
     qualification and training efforts, including--
       (A) actions taken by inspectors;
       (B) recommendations made by inspectors for changes to 
     operator qualification and training programs; and
       (C) industry and employee organization responses to those 
     actions and recommendations.
       (2) Criteria.--The Secretary may establish criteria for use 
     in evaluating and reporting on operator qualification and 
     training for purposes of this subsection.
       (3) Due date.--The Secretary shall submit the report 
     required by paragraph (1) to the Congress 3 years after the 
     date of enactment of this Act.

     SEC. 764. PIPELINE INTEGRITY INSPECTION PROGRAM.

       Section 60109 is amended by adding at the end the 
     following:
       ``(c) Integrity Management.--
       ``(1) General requirement.--The Secretary shall promulgate 
     regulations requiring operators of hazardous liquid pipelines 
     and natural gas transmission pipelines to evaluate the risks 
     to the operator's pipeline facilities in areas identified 
     pursuant to subsection (a)(1), and to adopt and implement a 
     program for integrity management that reduces the risk of an 
     incident in those areas. The regulations shall be issued no 
     later than 1 year after the Secretary has issued standards 
     pursuant to subsections (a) and (b) of this section or by 
     December 31, 2003, whichever is sooner.
       ``(2) Standards for program.--In promulgating regulations 
     under this section, the Secretary shall require an operator's 
     integrity management plan to be based on risk analysis and 
     each plan shall include, at a minimum--
       ``(A) periodic assessment of the integrity of the pipeline 
     through methods including internal inspection, pressure 
     testing, direct assessment, or other effective methods. The 
     assessment period shall be no less than every 5 years unless 
     the Department of Transportation Inspector General, after 
     consultation with the Secretary determines there is not a 
     sufficient capability or it is deemed unnecessary because of 
     more technically appropriate monitoring or creates undue 
     interruption of necessary supply to fulfill the requirements 
     under this paragraph;
       ``(B) clearly defined criteria for evaluating the results 
     of the periodic assessment methods carried out under 
     subparagraph (A) and procedures to ensure identified problems 
     are corrected in a timely manner; and
       ``(C) measures, as appropriate, that prevent and mitigate 
     unintended releases, such as leak detection, integrity 
     evaluation, restrictive flow devices, or other measures.
       ``(3) Criteria for program standards.--In deciding how 
     frequently the integrity assessment methods carried out under 
     paragraph (2)(A) must be conducted, an operator shall take 
     into account the potential for new defects developing or 
     previously identified structural defects caused by 
     construction or installation, the operational characteristics 
     of the pipeline, and leak history. In addition, the Secretary 
     may establish a minimum testing requirement for operators of 
     pipelines to conduct internal inspections.
       ``(4) State role.--A State authority that has an agreement 
     in effect with the Secretary under section 60106 is 
     authorized to review and assess an operator's risk analyses 
     and integrity management plans required under this section 
     for interstate pipelines located in that State. The reviewing 
     State authority shall provide the Secretary with a written 
     assessment of the plans, make recommendations, as 
     appropriate, to address safety concerns not adequately 
     addressed in the operator's plans, and submit documentation 
     explaining the State-proposed plan revisions. The Secretary 
     shall carefully consider the State's proposals and work in 
     consultation with the States and operators to address safety 
     concerns.
       ``(5) Monitoring implementation.--The Secretary of 
     Transportation shall review the risk analysis and program for 
     integrity management required under this section and provide 
     for continued monitoring of such plans. Not later than 2 
     years after the implementation of integrity management plans 
     under this section, the Secretary shall complete an 
     assessment and evaluation of the effects on safety and the 
     environment of extending all of the requirements mandated by 
     the regulations described in paragraph (1) to additional 
     areas. The Secretary shall submit the assessment and 
     evaluation to Congress along with any recommendations to 
     improve and expand the utilization of integrity management 
     plans.
       ``(6) Opportunity for local input on integrity 
     management.--Within 18 months after the date of enactment of 
     the Pipeline Safety Improvement Act of 2002, the Secretary 
     shall, by regulation, establish a process for raising and 
     addressing local safety concerns about pipeline integrity and 
     the operator's pipeline integrity plan. The process shall 
     include--
       ``(A) a requirement that an operator of a hazardous liquid 
     or natural gas transmission pipeline facility provide 
     information about the risk analysis and integrity management 
     plan required under this section to local officials in a 
     State in which the facility is located;
       ``(B) a description of the local officials required to be 
     informed, the information that is to be provided to them and 
     the manner, which may include traditional or electronic 
     means, in which it is provided;
       ``(C) the means for receiving input from the local 
     officials that may include a public forum sponsored by the 
     Secretary or by the State, or the submission of written 
     comments through traditional or electronic means;
       ``(D) the extent to which an operator of a pipeline 
     facility must participate in a public forum sponsored by the 
     Secretary or in another means for receiving input from the 
     local officials or in the evaluation of that input; and
       ``(E) the manner in which the Secretary will notify the 
     local officials about how their concerns are being 
     addressed.''.

     SEC. 765. ENFORCEMENT.

       (a) In General.--Section 60112 is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) General Authority.--After notice and an opportunity 
     for a hearing, the Secretary of Transportation may decide a 
     pipeline facility is hazardous if the Secretary decides 
     that--
       ``(1) operation of the facility is or would be hazardous to 
     life, property, or the environment; or
       ``(2) the facility is, or would be, constructed or 
     operated, or a component of the facility is, or would be, 
     constructed or operated with equipment, material, or a 
     technique that the Secretary decides is hazardous to life, 
     property, or the environment.''; and
       (2) by striking ``is hazardous,'' in subsection (d) and 
     inserting ``is, or would be, hazardous,''.

     SEC. 766. PUBLIC EDUCATION, EMERGENCY PREPAREDNESS, AND 
                   COMMUNITY RIGHT-TO-KNOW.

       (a) Section 60116 is amended to read as follows:

     ``Sec. 60116. Public education, emergency preparedness, and 
       community right-to-know

       ``(a) Public Education Programs.--(1) Each owner or 
     operator of a gas or hazardous liquid pipeline facility shall 
     carry out a continuing program to educate the public on the 
     use of a one-call notification system prior to excavation and 
     other damage prevention activities, the possible hazards 
     associated with unintended releases from the pipeline 
     facility, the physical indications that such a release may 
     have occurred, what steps should be taken for public safety 
     in the event of a pipeline release, and how to report such an 
     event.
       ``(2) Within 12 months after the date of enactment of the 
     Pipeline Safety Improvement Act of 2002, each owner or 
     operator of a gas or hazardous liquid pipeline facility shall 
     review its existing public education program for 
     effectiveness and modify the program as necessary. The 
     completed program shall include activities to advise affected 
     municipalities, school districts, businesses, and residents 
     of pipeline facility locations. The completed program shall 
     be submitted to the Secretary or, in the case of an

[[Page S3711]]

     intrastate pipeline facility operator, the appropriate State 
     agency and shall be periodically reviewed by the Secretary 
     or, in the case of an intrastate pipeline facility operator, 
     the appropriate State agency.
       ``(3) The Secretary may issue standards prescribing the 
     elements of an effective public education program. The 
     Secretary may also develop material for use in the program.
       ``(b) Emergency Preparedness.--
       ``(1) Operator liaison.--Within 12 months after the date of 
     enactment of the Pipeline Safety Improvement Act of 2002, an 
     operator of a gas transmission or hazardous liquid pipeline 
     facility shall initiate and maintain liaison with the State 
     emergency response commissions, and local emergency planning 
     committees in the areas of pipeline right-of-way, established 
     under section 301 of the Emergency Planning and Community 
     Right-To-Know Act of 1986 (42 U.S.C. 11001) in each State in 
     which it operates.
       ``(2) Information.--An operator shall, upon request, make 
     available to the State emergency response commissions and 
     local emergency planning committees, and shall make available 
     to the Office of Pipeline Safety in a standardized form for 
     the purpose of providing the information to the public, the 
     information described in section 60102(d), the operator's 
     program for integrity management, and information about 
     implementation of that program. The information about the 
     facility shall also include, at a minimum--
       ``(A) the business name, address, telephone number of the 
     operator, including a 24-hour emergency contact number;
       ``(B) a description of the facility, including pipe 
     diameter, the product or products carried, and the operating 
     pressure;
       ``(C) with respect to transmission pipeline facilities, 
     maps showing the location of the facility and, when 
     available, any high consequence areas which the pipeline 
     facility traverses or adjoins and abuts;
       ``(D) a summary description of the integrity measures the 
     operator uses to assure safety and protection for the 
     environment; and
       ``(E) a point of contact to respond to questions from 
     emergency response representative.
       ``(3) Smaller communities.--In a community without a local 
     emergency planning committee, the operator shall maintain 
     liaison with the local fire, police, and other emergency 
     response agencies.
       ``(4) Public access.--The Secretary shall prescribe 
     requirements for public access, as appropriate, to this 
     information, including a requirement that the information be 
     made available to the public by widely accessible 
     computerized database.
       ``(c) Community Right-To-Know.--Not later than 12 months 
     after the date of enactment of the Pipeline Safety 
     Improvement Act of 2002, and annually thereafter, the owner 
     or operator of each gas transmission or hazardous liquid 
     pipeline facility shall provide to the governing body of each 
     municipality in which the pipeline facility is located, a map 
     identifying the location of such facility. The map may be 
     provided in electronic form. The Secretary may provide 
     technical assistance to the pipeline industry on developing 
     public safety and public education program content and best 
     practices for program delivery, and on evaluating the 
     effectiveness of the programs. The Secretary may also provide 
     technical assistance to State and local officials in applying 
     practices developed in these programs to their activities to 
     promote pipeline safety.
       ``(d) Public Availability of Reports.--The Secretary 
     shall--
       ``(1) make available to the public--
       ``(A) a safety-related condition report filed by an 
     operator under section 60102(h);
       ``(B) a report of a pipeline incident filed by an operator;
       ``(C) the results of any inspection by the Office of 
     Pipeline Safety or a State regulatory official; and
       ``(D) a description of any corrective action taken in 
     response to a safety-related condition reported under 
     subparagraph (A), (B), or (C); and
       ``(2) prescribe requirements for public access, as 
     appropriate, to integrity management program information 
     prepared under this chapter, including requirements that will 
     ensure data accessibility to the greatest extent feasible.''.
       (b) Safety Condition Reports.--Section 60102(h)(2) is 
     amended by striking ``authorities.'' and inserting 
     ``officials, including the local emergency responders.''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     601 is amended by striking the item relating to section 60116 
     and inserting the following:

``60116. Public education, emergency preparedness, community right-to-
              know.''.

     SEC. 767. PENALTIES.

       (a) Civil Penalties.--Section 60122 is amended--
       (1) by striking ``$25,000'' in subsection (a)(1) and 
     inserting ``$500,000'';
       (2) by striking ``$500,000'' in subsection (a)(1) and 
     inserting ``$1,000,000'';
       (3) by adding at the end of subsection (a)(1) the 
     following: ``The preceding sentence does not apply to 
     judicial enforcement action under section 60120 or 60121.''; 
     and
       (4) by striking subsection (b) and inserting the following:
       ``(b) Penalty Considerations.--In determining the amount of 
     a civil penalty under this section--
       ``(1) the Secretary shall consider--
       ``(A) the nature, circumstances, and gravity of the 
     violation, including adverse impact on the environment;
       ``(B) with respect to the violator, the degree of 
     culpability, any history of prior violations, the ability to 
     pay, any effect on ability to continue doing business; and
       ``(C) good faith in attempting to comply; and
       ``(2) the Secretary may consider--
       ``(A) the economic benefit gained from the violation 
     without any discount because of subsequent damages; and
       ``(B) other matters that justice requires.''.
       (b) Excavator Damage.--Section 60123(d) is amended--
       (1) by striking ``knowingly and willfully'';
       (2) by inserting ``knowingly and willfully'' before 
     ``engages'' in paragraph (1); and
       (3) striking paragraph (2)(B) and inserting the following:
       ``(B) a pipeline facility, is aware of damage, and does not 
     report the damage promptly to the operator of the pipeline 
     facility and to other appropriate authorities; or''.
       (c) Civil Actions.--Section 60120(a)(1) is amended to read 
     as follows:
       ``(1) On the request of the Secretary of Transportation, 
     the Attorney General may bring a civil action in an 
     appropriate district court of the United States to enforce 
     this chapter, including section 60112 of this chapter, or a 
     regulation prescribed or order issued under this chapter. The 
     court may award appropriate relief, including a temporary or 
     permanent injunction, punitive damages, and assessment of 
     civil penalties considering the same factors as prescribed 
     for the Secretary in an administrative case under section 
     60122.''.

     SEC. 768. STATE OVERSIGHT ROLE.

       (a) State Agreements With Certification.--Section 60106 is 
     amended--
       (1) by striking ``General Authority.--'' in subsection (a) 
     and inserting ``Agreements Without Certification.--'';
       (2) by redesignating subsections (b), (c), and (d) as 
     subsections (c), (d), and (e); and
       (3) by inserting after subsection (a) the following:
       ``(b) Agreements With Certification.--
       ``(1) In general.--If the Secretary accepts a certification 
     under section 60105 of this title and makes the determination 
     required under this subsection, the Secretary may make an 
     agreement with a State authority authorizing it to 
     participate in the oversight of interstate pipeline 
     transportation. Each such agreement shall include a plan for 
     the State authority to participate in special investigations 
     involving incidents or new construction and allow the State 
     authority to participate in other activities overseeing 
     interstate pipeline transportation or to assume additional 
     inspection or investigatory duties. Nothing in this section 
     modifies section 60104(c) or authorizes the Secretary to 
     delegate the enforcement of safety standards prescribed under 
     this chapter to a State authority.
       ``(2) Determinations required.--The Secretary may not enter 
     into an agreement under this subsection, unless the Secretary 
     determines that--
       ``(A) the agreement allowing participation of the State 
     authority is consistent with the Secretary's program for 
     inspection and consistent with the safety policies and 
     provisions provided under this chapter;
       ``(B) the interstate participation agreement would not 
     adversely affect the oversight responsibilities of intrastate 
     pipeline transportation by the State authority;
       ``(C) the State is carrying out a program demonstrated to 
     promote preparedness and risk prevention activities that 
     enable communities to live safely with pipelines;
       ``(D) the State meets the minimum standards for State one-
     call notification set forth in chapter 61; and
       ``(E) the actions planned under the agreement would not 
     impede interstate commerce or jeopardize public safety.
       ``(3) Existing agreements.--If requested by the State 
     authority, the Secretary shall authorize a State authority 
     which had an interstate agreement in effect after January 
     1999, to oversee interstate pipeline transportation pursuant 
     to the terms of that agreement until the Secretary determines 
     that the State meets the requirements of paragraph (2) and 
     executes a new agreement, or until December 31, 2003, 
     whichever is sooner. Nothing in this paragraph shall prevent 
     the Secretary, after affording the State notice, hearing, and 
     an opportunity to correct any alleged deficiencies, from 
     terminating an agreement that was in effect before enactment 
     of the Pipeline Safety Improvement Act of 2002 if--
       ``(A) the State authority fails to comply with the terms of 
     the agreement;
       ``(B) implementation of the agreement has resulted in a gap 
     in the oversight responsibilities of intrastate pipeline 
     transportation by the State authority; or
       ``(C) continued participation by the State authority in the 
     oversight of interstate pipeline transportation has had an 
     adverse impact on pipeline safety.''.
       (b) Ending Agreements.--Subsection (e) of section 60106, as 
     redesignated by subsection (a), is amended to read as 
     follows:
       ``(e) Ending Agreements.--
       ``(1) Permissive termination.--The Secretary may end an 
     agreement under this section when the Secretary finds that 
     the State authority has not complied with any provision of 
     the agreement.
       ``(2) Mandatory termination of agreement.--The Secretary 
     shall end an agreement for the oversight of interstate 
     pipeline transportation if the Secretary finds that--
       ``(A) implementation of such agreement has resulted in a 
     gap in the oversight responsibilities of intrastate pipeline 
     transportation by the State authority;
       ``(B) the State actions under the agreement have failed to 
     meet the requirements under subsection (b); or
       ``(C) continued participation by the State authority in the 
     oversight of interstate pipeline transportation would not 
     promote pipeline safety.
       ``(3) Procedural requirements.--The Secretary shall give 
     the notice and an opportunity

[[Page S3712]]

     for a hearing to a State authority before ending an agreement 
     under this section. The Secretary may provide a State an 
     opportunity to correct any deficiencies before ending an 
     agreement. The finding and decision to end the agreement 
     shall be published in the Federal Register and may not become 
     effective for at least 15 days after the date of publication 
     unless the Secretary finds that continuation of an agreement 
     poses an imminent hazard.''.

     SEC. 769. IMPROVED DATA AND DATA AVAILABILITY.

       (a) In General.--Within 12 months after the date of 
     enactment of this Act, the Secretary shall develop and 
     implement a comprehensive plan for the collection and use of 
     gas and hazardous liquid pipeline data to revise the causal 
     categories on the incident report forms to eliminate 
     overlapping and confusing categories and include 
     subcategories. The plan shall include components to provide 
     the capability to perform sound incident trend analysis and 
     evaluations of pipeline operator performance using normalized 
     accident data.
       (b) Report of Releases Exceeding 5 Gallons.--Section 
     60117(b) is amended--
       (1) by inserting ``(1)'' before ``To'';
       (2) redesignating paragraphs (1) and (2) as subparagraphs 
     (A) and (B);
       (3) inserting before the last sentence the following:
       ``(2) A person owning or operating a hazardous liquid 
     pipeline facility shall report to the Secretary each release 
     to the environment greater than 5 gallons of the hazardous 
     liquid or carbon dioxide transported. This section applies to 
     releases from pipeline facilities regulated under this 
     chapter. A report must include the location of the release, 
     fatalities and personal injuries, type of product, amount of 
     product release, cause or causes of the release, extent of 
     damage to property and the environment, and the response 
     undertaken to clean up the release.
       ``(3) During the course of an incident investigation, a 
     person owning or operating a pipeline facility shall make 
     records, reports, and information required under subsection 
     (a) of this section or other reasonably described records, 
     reports, and information relevant to the incident 
     investigation, available to the Secretary within the time 
     limits prescribed in a written request.''; and
       (4) indenting the first word of the last sentence and 
     inserting ``(4)'' before ``The Secretary'' in that sentence.
       (c) Penalty Authorities.--(1) Section 60122(a) is amended 
     by striking ``60114(c)'' and inserting ``60117(b)(3)''.
       (2) Section 60123(a) is amended by striking ``60114(c),'' 
     and inserting ``60117(b)(3),''.
       (d) Establishment of National Depository.--Section 60117 is 
     amended by adding at the end the following:
       ``(l) National Depository.--The Secretary shall establish a 
     national depository of data on events and conditions, 
     including spill histories and corrective actions for specific 
     incidents, that can be used to evaluate the risk of, and to 
     prevent, pipeline failures and releases. The Secretary shall 
     administer the program through the Bureau of Transportation 
     Statistics, in cooperation with the Research and Special 
     Programs Administration, and shall make such information 
     available for use by State and local planning and emergency 
     response authorities and the public.''.

     SEC. 770. RESEARCH AND DEVELOPMENT.

       (a) Innovative Technology Development.--
       (1) In general.--As part of the Department of 
     Transportation's research and development program, the 
     Secretary of Transportation shall direct research attention 
     to the development of alternative technologies--
       (A) to expand the capabilities of internal inspection 
     devices to identify and accurately measure defects and 
     anomalies;
       (B) to inspect pipelines that cannot accommodate internal 
     inspection devices available on the date of enactment;
       (C) to develop innovative techniques measuring the 
     structural integrity of pipelines;
       (D) to improve the capability, reliability, and 
     practicality of external leak detection devices; and
       (E) to develop and improve alternative technologies to 
     identify and monitor outside force damage to pipelines.
       (2) Cooperative.--The Secretary may participate in 
     additional technological development through cooperative 
     agreements with trade associations, academic institutions, or 
     other qualified organizations.
       (b) Pipeline Safety and Reliability Research and 
     Development.--
       (1) In general.--The Secretary of Transportation, in 
     coordination with the Secretary of Energy, shall develop and 
     implement an accelerated cooperative program of research and 
     development to ensure the integrity of natural gas and 
     hazardous liquid pipelines. This research and development 
     program--
       (A) shall include materials inspection techniques, risk 
     assessment methodology, and information systems surety; and
       (B) shall complement, and not replace, the research program 
     of the Department of Energy addressing natural gas pipeline 
     issues existing on the date of enactment of this Act.
       (2) Purpose.--The purpose of the cooperative research 
     program shall be to promote pipeline safety research and 
     development to--
       (A) ensure long-term safety, reliability and service life 
     for existing pipelines;
       (B) expand capabilities of internal inspection devices to 
     identify and accurately measure defects and anomalies;
       (C) develop inspection techniques for pipelines that cannot 
     accommodate the internal inspection devices available on the 
     date of enactment;
       (D) develop innovative techniques to measure the structural 
     integrity of pipelines to prevent pipeline failures;
       (E) develop improved materials and coatings for use in 
     pipelines;
       (F) improve the capability, reliability, and practicality 
     of external leak detection devices;
       (G) identify underground environments that might lead to 
     shortened service life;
       (H) enhance safety in pipeline siting and land use;
       (I) minimize the environmental impact of pipelines;
       (J) demonstrate technologies that improve pipeline safety, 
     reliability, and integrity;
       (K) provide risk assessment tools for optimizing risk 
     mitigation strategies; and
       (L) provide highly secure information systems for 
     controlling the operation of pipelines.
       (3) Areas.--In carrying out this subsection, the Secretary 
     of Transportation, in coordination with the Secretary of 
     Energy, shall consider research and development on natural 
     gas, crude oil and petroleum product pipelines for--
       (A) early crack, defect, and damage detection, including 
     real-time damage monitoring;
       (B) automated internal pipeline inspection sensor systems;
       (C) land use guidance and set back management along 
     pipeline rights-of-way for communities;
       (D) internal corrosion control;
       (E) corrosion-resistant coatings;
       (F) improved cathodic protection;
       (G) inspection techniques where internal inspection is not 
     feasible, including measurement of structural integrity;
       (H) external leak detection, including portable real-time 
     video imaging technology, and the advancement of computerized 
     control center leak detection systems utilizing real-time 
     remote field data input;
       (I) longer life, high strength, non-corrosive pipeline 
     materials;
       (J) assessing the remaining strength of existing pipes;
       (K) risk and reliability analysis models, to be used to 
     identify safety improvements that could be realized in the 
     near term resulting from analysis of data obtained from a 
     pipeline performance tracking initiative;
       (L) identification, monitoring, and prevention of outside 
     force damage, including satellite surveillance; and
       (M) any other areas necessary to ensuring the public safety 
     and protecting the environment.
       (4) Points of contact.--
       (A) In general.--To coordinate and implement the research 
     and development programs and activities authorized under this 
     subsection--
       (i) the Secretary of Transportation shall designate, as the 
     point of contact for the Department of Transportation, an 
     officer of the Department of Transportation who has been 
     appointed by the President and confirmed by the Senate; and
       (ii) the Secretary of Energy shall designate, as the point 
     of contact for the Department of Energy, an officer of the 
     Department of Energy who has been appointed by the President 
     and confirmed by the Senate.
       (B) Duties.--
       (i) The point of contact for the Department of 
     Transportation shall have the primary responsibility for 
     coordinating and overseeing the implementation of the 
     research, development, and demonstration program plan under 
     paragraphs (5) and (6).
       (ii) The points of contact shall jointly assist in 
     arranging cooperative agreements for research, development 
     and demonstration involving their respective Departments, 
     national laboratories, universities, and industry research 
     organizations.
       (5) Research and development program plan.--Within 240 days 
     after the date of enactment of this Act, the Secretary of 
     Transportation, in coordination with the Secretary of Energy 
     and the Pipeline Integrity Technical Advisory Committee, 
     shall prepare and submit to the Congress a 5-year program 
     plan to guide activities under this subsection. In preparing 
     the program plan, the Secretary shall consult with 
     appropriate representatives of the natural gas, crude oil, 
     and petroleum product pipeline industries to select and 
     prioritize appropriate project proposals. The Secretary may 
     also seek the advice of utilities, manufacturers, 
     institutions of higher learning, Federal agencies, the 
     pipeline research institutions, national laboratories, State 
     pipeline safety officials, environmental organizations, 
     pipeline safety advocates, and professional and technical 
     societies.
       (6) Implementation.--The Secretary of Transportation shall 
     have primary responsibility for ensuring the 5-year plan 
     provided for in paragraph (5) is implemented as intended. In 
     carrying out the research, development, and demonstration 
     activities under this paragraph, the Secretary of 
     Transportation and the Secretary of Energy may use, to the 
     extent authorized under applicable provisions of law, 
     contracts, cooperative agreements, cooperative research and 
     development agreements under the Stevenson-Wydler Technology 
     Innovation Act of 1980 (15 U.S.C. 3701 et seq.), grants, 
     joint ventures, other transactions, and any other form of 
     agreement available to the Secretary consistent with the 
     recommendations of the Advisory Committee.
       (7) Reports to congress.--The Secretary of Transportation 
     shall report to the Congress annually as to the status and 
     results to date of the implementation of the research and 
     development program plan. The report shall include the 
     activities of the Departments of Transportation and Energy, 
     the national laboratories, universities, and any other 
     research organizations, including industry research 
     organizations.

     SEC. 771. PIPELINE INTEGRITY TECHNICAL ADVISORY COMMITTEE.

       (a) Establishment.--The Secretary of Transportation shall 
     enter into appropriate arrangements with the National Academy 
     of Sciences to establish and manage the Pipeline Integrity

[[Page S3713]]

     Technical Advisory Committee for the purpose of advising the 
     Secretary of Transportation and the Secretary of Energy on 
     the development and implementation of the 5-year research, 
     development, and demonstration program plan under section 
     770(b)(5). The Advisory Committee shall have an ongoing role 
     in evaluating the progress and results of the research, 
     development, and demonstration carried out under that 
     section.
       (b) Membership.--The National Academy of Sciences shall 
     appoint the members of the Pipeline Integrity Technical 
     Advisory Committee after consultation with the Secretary of 
     Transportation and the Secretary of Energy. Members appointed 
     to the Advisory Committee should have the necessary 
     qualifications to provide technical contributions to the 
     purposes of the Advisory Committee.

     SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

       (a) Gas and Hazardous Liquids.--Section 60125(a) is amended 
     to read as follows:
       ``(a) Gas and Hazardous Liquid.--To carry out this chapter 
     and other pipeline-related damage prevention activities of 
     this title (except for section 60107), there are authorized 
     to be appropriated to the Department of Transportation--
     $30,000,000 for each of the fiscal years 2003, 2004, and 2005 
     of which $23,000,000 is to be derived from user fees for 
     fiscal years 2003, 2004, and 2005 collected under section 
     60301 of this title.''.
       (b) Grants to States.--Section 60125(c) is amended to read 
     as follows:
       ``(c) State Grants.--Not more than the following amounts 
     may be appropriated to the Secretary to carry out section 
     60107--$20,000,000 for the fiscal years 2003, 2004, and 2005 
     of which $18,000,000 is to be derived from user fees for 
     fiscal years 2003, 2004, and 2005 collected under section 
     60301 of this title.''.
       (c) Oil Spills.--Section 60125 is amended by redesignating 
     subsections (d), (e), and (f) as subsections (e), (f), (g) 
     and inserting after subsection (c) the following:
       ``(d) Oil Spill Liability Trust Fund.--Of the amounts 
     available in the Oil Spill Liability Trust Fund, $8,000,000 
     shall be transferred to the Secretary of Transportation, as 
     provided in appropriation Acts, to carry out programs 
     authorized in this title for each of fiscal years 2003, 2004, 
     and 2005.''.
       (d) Pipeline Integrity Program.--(1) There are authorized 
     to be appropriated to the Secretary of Transportation for 
     carrying out sections 770(b) and 771 of this subtitle 
     $3,000,000, to be derived from user fees under section 60301 
     of title 49, United States Code, for each of the fiscal years 
     2003 through 2007.
       (2) Of the amounts available in the Oil Spill Liability 
     Trust Fund established by section 9509 of the Internal 
     Revenue Code of 1986 (26 U.S.C. 9509), $3,000,000 shall be 
     transferred to the Secretary of Transportation, as provided 
     in appropriation Acts, to carry out programs for detection, 
     prevention and mitigation of oil spills under sections 770(b) 
     and 771 of this subtitle for each of the fiscal years 2003 
     through 2007.
       (3) There are authorized to be appropriated to the 
     Secretary of Energy for carrying out sections 770(b) and 771 
     of this subtitle such sums as may be necessary for each of 
     the fiscal years 2003 through 2007.

     SEC. 773. OPERATOR ASSISTANCE IN INVESTIGATIONS.

       (a) In General.--If the Department of Transportation or the 
     National Transportation Safety Board investigate an accident, 
     the operator involved shall make available to the 
     representative of the Department or the Board all records and 
     information that in any way pertain to the accident 
     (including integrity management plans and test results), and 
     shall afford all reasonable assistance in the investigation 
     of the accident.
       (b) Corrective Action Orders.--Section 60112(d) is 
     amended--
       (1) by inserting ``(1)'' after ``Corrective Action 
     Orders.--''; and
       (2) by adding at the end the following:
       ``(2) If, in the case of a corrective action order issued 
     following an accident, the Secretary determines that the 
     actions of an employee carrying out an activity regulated 
     under this chapter, including duties under section 60102(a), 
     may have contributed substantially to the cause of the 
     accident, the Secretary shall direct the operator to relieve 
     the employee from performing those activities, reassign the 
     employee, or place the employee on leave until the earlier of 
     the date on which--
       ``(A) the Secretary determines, after notice and an 
     opportunity for a hearing, that the employee's performance of 
     duty in carrying out the activity did not contribute 
     substantially to the cause of the accident; or
       ``(B) the Secretary determines the employee has been re-
     qualified or re-trained as provided for in section 763 of the 
     Pipeline Safety Improvement Act of 2002 and can safely 
     perform those activities.
       ``(3) Action taken by an operator under paragraph (2) shall 
     be in accordance with the terms and conditions of any 
     applicable collective bargaining agreement to the extent it 
     is not inconsistent with the requirements of this section.''.

     SEC. 774. PROTECTION OF EMPLOYEES PROVIDING PIPELINE SAFETY 
                   INFORMATION.

       (a) In General.--Chapter 601 is amended by adding at the 
     end the following:

     ``Sec. 60129. Protection of employees providing pipeline 
       safety information

       ``(a) Discrimination Against Pipeline Employees.--No 
     pipeline operator or contractor or subcontractor of a 
     pipeline may discharge an employee or otherwise discriminate 
     against an employee with respect to compensation, terms, 
     conditions, or privileges of employment because the employee 
     (or any person acting pursuant to a request of the 
     employee)--
       ``(1) provided, caused to be provided, or is about to 
     provide (with any knowledge of the employer) or cause to be 
     provided to the employer or Federal Government information 
     relating to any violation or alleged violation of any order, 
     regulation, or standard of the Research and Special Programs 
     Administration or any other provision of Federal law relating 
     to pipeline safety under this chapter or any other law of the 
     United States;
       ``(2) has filed, caused to be filed, or is about to file 
     (with any knowledge of the employer) or cause to be filed a 
     proceeding relating to any violation or alleged violation of 
     any order, regulation, or standard of the Administration or 
     any other provision of Federal law relating to pipeline 
     safety under this chapter or any other law of the United 
     States;
       ``(3) testified or is about to testify in such a 
     proceeding; or
       ``(4) assisted or participated or is about to assist or 
     participate in such a proceeding.
       ``(b) Department of Labor Complaint Procedure.--
       ``(1) Filing and notification.--A person who believes that 
     he or she has been discharged or otherwise discriminated 
     against by any person in violation of subsection (a) may, not 
     later than 90 days after the date on which such violation 
     occurs, file (or have any person file on his or her behalf) a 
     complaint with the Secretary of Labor alleging such discharge 
     or discrimination. Upon receipt of such a complaint, the 
     Secretary of Labor shall notify, in writing, the person named 
     in the complaint and the Administrator of the Research and 
     Special Programs Administration of the filing of the 
     complaint, of the allegations contained in the complaint, of 
     the substance of evidence supporting the complaint, and of 
     the opportunities that will be afforded to such person under 
     paragraph (2).
       ``(2) Investigation; preliminary order.--
       ``(A) In general.--Not later than 60 days after the date of 
     receipt of a complaint filed under paragraph (1) and after 
     affording the person named in the complaint an opportunity to 
     submit to the Secretary of Labor a written response to the 
     complaint and an opportunity to meet with a representative of 
     the Secretary to present statements from witnesses, the 
     Secretary of Labor shall conduct an investigation and 
     determine whether there is reasonable cause to believe that 
     the complaint has merit and notify in writing the complainant 
     and the person alleged to have committed a violation of 
     subsection (a) of the Secretary's findings. If the Secretary 
     of Labor concludes that there is reasonable cause to believe 
     that a violation of subsection (a) has occurred, the 
     Secretary shall accompany the Secretary's findings with a 
     preliminary order providing the relief prescribed by 
     paragraph (3)(B). Not later than 30 days after the date of 
     notification of findings under this paragraph, either the 
     person alleged to have committed the violation or the 
     complainant may file objections to the findings or 
     preliminary order, or both, and request a hearing on the 
     record. The filing of such objections shall not operate to 
     stay any reinstatement remedy contained in the preliminary 
     order. Such hearings shall be conducted expeditiously. If a 
     hearing is not requested in such 30-day period, the 
     preliminary order shall be deemed a final order that is not 
     subject to judicial review.
       ``(B) Requirements.--
       ``(i) Required showing by complainant.--The Secretary of 
     Labor shall dismiss a complaint filed under this subsection 
     and shall not conduct an investigation otherwise required 
     under subparagraph (A) unless the complainant makes a prima 
     facie showing that any behavior described in paragraphs (1) 
     through (4) of subsection (a) was a contributing factor in 
     the unfavorable personnel action alleged in the complaint.
       ``(ii) Showing by employer.--Notwithstanding a finding by 
     the Secretary that the complainant has made the showing 
     required under clause (i), no investigation otherwise 
     required under subparagraph (A) shall be conducted if the 
     employer demonstrates, by clear and convincing evidence, that 
     the employer would have taken the same unfavorable personnel 
     action in the absence of that behavior.
       ``(iii) Criteria for determination by Secretary.--The 
     Secretary may determine that a violation of subsection (a) 
     has occurred only if the complainant demonstrates that any 
     behavior described in paragraphs (1) through (4) of 
     subsection (a) was a contributing factor in the unfavorable 
     personnel action alleged in the complaint.
       ``(iv) Prohibition.--Relief may not be ordered under 
     subparagraph (A) if the employer demonstrates by clear and 
     convincing evidence that the employer would have taken the 
     same unfavorable personnel action in the absence of that 
     behavior.
       ``(3) Final order.--
       ``(A) Deadline for issuance; settlement agreements.--Not 
     later than 120 days after the date of conclusion of a hearing 
     under paragraph (2), the Secretary of Labor shall issue a 
     final order providing the relief prescribed by this paragraph 
     or denying the complaint. At any time before issuance of a 
     final order, a proceeding under this subsection may be 
     terminated on the basis of a settlement agreement entered 
     into by the Secretary of Labor, the complainant, and the 
     person alleged to have committed the violation.
       ``(B) Remedy.--If, in response to a complaint filed under 
     paragraph (1), the Secretary of Labor determines that a 
     violation of subsection (a) has occurred, the Secretary of 
     Labor shall order the person who committed such violation 
     to--
       ``(i) take affirmative action to abate the violation;
       ``(ii) reinstate the complainant to his or her former 
     position together with the compensation (including back pay) 
     and restore the terms, conditions, and privileges associated 
     with his or her employment; and

[[Page S3714]]

       ``(iii) provide compensatory damages to the complainant.
     If such an order is issued under this paragraph, the 
     Secretary of Labor, at the request of the complainant, shall 
     assess against the person whom the order is issued a sum 
     equal to the aggregate amount of all costs and expenses 
     (including attorney's and expert witness fees) reasonably 
     incurred, as determined by the Secretary of Labor, by the 
     complainant for, or in connection with, the bringing the 
     complaint upon which the order was issued.
       ``(C) Frivolous complaints.--If the Secretary of Labor 
     finds that a complaint under paragraph (1) is frivolous or 
     has been brought in bad faith, the Secretary of Labor may 
     award to the prevailing employer a reasonable attorney's fee 
     not exceeding $1,000.
       ``(4) Review.--
       ``(A) Appeal to court of appeals.--Any person adversely 
     affected or aggrieved by an order issued under paragraph (3) 
     may obtain review of the order in the United States Court of 
     Appeals for the circuit in which the violation, with respect 
     to which the order was issued, allegedly occurred or the 
     circuit in which the complainant resided on the date of such 
     violation. The petition for review must be filed not later 
     than 60 days after the date of issuance of the final order of 
     the Secretary of Labor. Review shall conform to chapter 7 of 
     title 5, United States Code. The commencement of proceedings 
     under this subparagraph shall not, unless ordered by the 
     court, operate as a stay of the order.
       ``(B) Limitation on collateral attack.--An order of the 
     Secretary of Labor with respect to which review could have 
     been obtained under subparagraph (A) shall not be subject to 
     judicial review in any criminal or other civil proceeding.
       ``(5) Enforcement of order by secretary of labor.--Whenever 
     any person has failed to comply with an order issued under 
     paragraph (3), the Secretary of Labor may file a civil action 
     in the United States district court for the district in which 
     the violation was found to occur to enforce such order. In 
     actions brought under this paragraph, the district courts 
     shall have jurisdiction to grant all appropriate relief, 
     including, but not to be limited to, injunctive relief and 
     compensatory damages.
       ``(6) Enforcement of order by parties.--
       ``(A) Commencement of action.--A person on whose behalf an 
     order was issued under paragraph (3) may commence a civil 
     action against the person to whom such order was issued to 
     require compliance with such order. The appropriate United 
     States district court shall have jurisdiction, without regard 
     to the amount in controversy or the citizenship of the 
     parties, to enforce such order.
       ``(B) Attorney fees.--The court, in issuing any final order 
     under this paragraph, may award costs of litigation 
     (including reasonable attorney and expert witness fees) to 
     any party whenever the court determines such award costs is 
     appropriate.
       ``(c) Mandamus.--Any nondiscretionary duty imposed by this 
     section shall be enforceable in a mandamus proceeding brought 
     under section 1361 of title 28, United States Code.
       ``(d) Nonapplicability To Deliberate Violations.--
     Subsection (a) shall not apply with respect to an employee of 
     a pipeline, contractor or subcontractor who, acting without 
     direction from the pipeline contractor or subcontractor (or 
     such person's agent), deliberately causes a violation of any 
     requirement relating to pipeline safety under this chapter or 
     any other law of the United States.
       ``(e) Contractor Defined.--In this section, the term 
     `contractor' means a company that performs safety-sensitive 
     functions by contract for a pipeline.''.
       (b) Civil Penalty.--Section 60122(a) is amended by adding 
     at the end the following:
       ``(3) A person violating section 60129, or an order issued 
     thereunder, is liable to the Government for a civil penalty 
     of not more than $1,000 for each violation. The penalties 
     provided by paragraph (1) do not apply to a violation of 
     section 60129 or an order issued thereunder.''.
       (c) Conforming Amendment.--The chapter analysis for chapter 
     601 is amended by adding at the end the following:

``60129. Protection of employees providing pipeline safety 
              information.''.

     SEC. 775. STATE PIPELINE SAFETY ADVISORY COMMITTEES.

       Within 90 days after receiving recommendations for 
     improvements to pipeline safety from an advisory committee 
     appointed by the Governor of any State, the Secretary of 
     Transportation shall respond in writing to the committee 
     setting forth what action, if any, the Secretary will take on 
     those recommendations and the Secretary's reasons for acting 
     or not acting upon any of the recommendations.

     SEC. 776. FINES AND PENALTIES.

       The Inspector General of the Department of Transportation 
     shall conduct an analysis of the Department's assessment of 
     fines and penalties on gas transmission and hazardous liquid 
     pipelines, including the cost of corrective actions required 
     by the Department in lieu of fines, and, no later than 6 
     months after the date of enactment of this Act, shall provide 
     a report to the Senate Committee on Commerce, Science, and 
     Transportation and the House Committee on Transportation and 
     Infrastructure on any findings and recommendations for 
     actions by the Secretary or Congress to ensure the fines 
     assessed are an effective deterrent for reducing safety 
     risks.

     SEC. 777. STUDY OF RIGHTS-OF-WAY.

       The Secretary of Transportation is authorized to conduct a 
     study on how best to preserve environmental resources in 
     conjunction with maintaining pipeline rights-of-way. The 
     study shall recognize pipeline operators' regulatory 
     obligations to maintain rights-of-way and to protect public 
     safety.

     SEC. 778. STUDY OF NATURAL GAS RESERVE.

       (a) Findings.--Congress finds that:
       (1) In the last few months, natural gas prices across the 
     country have tripled.
       (2) In California, natural gas prices have increased 
     twenty-fold, from $3 per million British thermal units to 
     nearly $60 per million British thermal units.
       (3) One of the major causes of these price increases is a 
     lack of supply, including a lack of natural gas reserves.
       (4) The lack of a reserve was compounded by the rupture of 
     an El Paso Natural Gas Company pipeline in Carlsbad, New 
     Mexico on August 1, 2000.
       (5) Improving pipeline safety will help prevent similar 
     accidents that interrupt the supply of natural gas and will 
     help save lives.
       (6) It is also necessary to find solutions for the lack of 
     natural gas reserves that could be used during emergencies.
       (b) Study by the National Academy of Sciences.--The 
     Secretary of Energy shall request the National Academy of 
     Sciences to--
       (1) conduct a study to--
       (A) determine the causes of recent increases in the price 
     of natural gas, including whether the increases have been 
     caused by problems with the supply of natural gas or by 
     problems with the natural gas transmission system;
       (B) identify any Federal or State policies that may have 
     contributed to the price increases; and
       (C) determine what Federal action would be necessary to 
     improve the reserve supply of natural gas for use in 
     situations of natural gas shortages and price increases, 
     including determining the feasibility and advisability of a 
     Federal strategic natural gas reserve system; and
       (2) not later than 60 days after the date of enactment of 
     this Act, submit to Congress a report on the results of the 
     study.

     SEC. 779. STUDY AND REPORT ON NATURAL GAS PIPELINE AND 
                   STORAGE FACILITIES IN NEW ENGLAND.

       (a) Study.--The Federal Energy Regulatory Commission, in 
     consultation with the Department of Energy, shall conduct a 
     study on the natural gas pipeline transmission network in New 
     England and natural gas storage facilities associated with 
     that network. In carrying out the study, the Commission shall 
     consider--
       (1) the ability of natural gas pipeline and storage 
     facilities in New England to meet current and projected 
     demand by gas-fired power generation plants and other 
     consumers;
       (2) capacity constraints during unusual weather periods;
       (3) potential constraint points in regional, interstate, 
     and international pipeline capacity serving New England; and
       (4) the quality and efficiency of the Federal environmental 
     review and permitting process for natural gas pipelines.
       (b) Report.--Not later than 120 days after the date of the 
     enactment of this Act, the Federal Energy Regulatory 
     Commission shall prepare and submit to the Senate Committee 
     on Energy and Natural Resources and the appropriate committee 
     of the House of Representatives a report containing the 
     results of the study conducted under subsection (a), 
     including recommendations for addressing potential natural 
     gas transmission and storage capacity problems in New 
     England.

           PART III--PIPELINE SECURITY SENSITIVE INFORMATION

     SEC. 781. MEETING COMMUNITY RIGHT TO KNOW WITHOUT SECURITY 
                   RISKS.

       Section 60117 is amended by adding at the end the 
     following:
       ``(l) Withholding Certain Information.--
       ``(1) In general.--Notwithstanding any other provision of 
     this chapter requiring the Secretary to provide information 
     obtained by the Secretary or an officer, employee, or agent 
     in carrying out this chapter to State or local government 
     officials, the public, or any other person, the Secretary 
     shall withhold such information if it is information that is 
     described in section 552(b)(1)(A) of title 5, United States 
     Code.
       ``(2) Conditional release.--Notwithstanding paragraph (1), 
     upon the receipt of assurances satisfactory to the Secretary 
     that the information will be handled appropriately, the 
     Secretary may provide information permitted to be withheld 
     under that paragraph--
       ``(A) to the owner or operator of the affected pipeline 
     system;
       ``(B) to an officer, employee or agent of a Federal, State, 
     tribal, or local government, including a volunteer fire 
     department, concerned with carrying out this chapter, with 
     protecting the facilities, with protecting public safety, or 
     with national security issues;
       ``(C) in an administrative or judicial proceeding brought 
     under this chapter or an administrative or judicial 
     proceeding that addresses terrorist actions or threats of 
     such actions; or
       ``(D) to such other persons as the Secretary determines 
     necessary to protect public safety and security.
       ``(3) Report to Congress.--The Secretary shall provide an 
     annual report to the Congress, in appropriate form as 
     determined by the Secretary, containing a summary of 
     determinations made by the Secretary during the preceding 
     year to withhold information from release under paragraph 
     (1).''.

     SEC. 782. TECHNICAL ASSISTANCE FOR SECURITY OF PIPELINE 
                   FACILITIES.

       The Secretary of Transportation may provide technical 
     assistance to an operator of a pipeline facility or to State, 
     tribal, or local officials to prevent or respond to acts of 
     terrorism that may impact the pipeline facility, including--
       (1) actions by the Secretary that support the use of 
     National Guard or State or Federal personnel to provide 
     additional security for a pipeline facility at risk of 
     terrorist attack or in response to such an attack;
       (2) use of resources available to the Secretary to develop 
     and implement security measures for a pipeline facility;

[[Page S3715]]

       (3) identification of security issues with respect to the 
     operation of a pipeline facility; and
       (4) the provision of information and guidance on security 
     practices that prevent damage to pipeline facilities from 
     terrorist attacks.

     SEC. 783. CRIMINAL PENALTIES FOR DAMAGING OR DESTROYING A 
                   FACILITY.

       Section 60123(b) of title 49, United States Code, is 
     amended--
       (1) by striking ``or'' after ``gas pipeline facility'' and 
     inserting a comma; and
       (2) by inserting after ``liquid pipeline facility'' the 
     following: ``, or either an intrastate gas pipeline facility 
     or an intrastate hazardous liquid pipeline facility that is 
     used in interstate or foreign commerce or in any activity 
     affecting interstate or foreign commerce''.

    DIVISION C--DIVERSIFYING ENERGY DEMAND AND IMPROVING EFFICIENCY

                     TITLE VIII--FUELS AND VEHICLES

 Subtitle A--CAFE Standards, Alternative Fuels, and Advanced Technology

     SEC. 801. INCREASED FUEL ECONOMY STANDARDS.

       (a) Requirement for New Regulations.--
       (1) In general.--The Secretary of Transportation shall 
     issue, under section 32902 of title 49, United States Code, 
     new regulations setting forth increased average fuel economy 
     standards for automobiles that are determined on the basis of 
     the maximum feasible average fuel economy levels for the 
     automobiles, taking into consideration the matters set forth 
     in subsection (f) of such section.
       (2) Time for issuing regulations.--
       (A) Non-passenger automobiles.--For non-passenger 
     automobiles, the Secretary of Transportation shall issue the 
     final regulations not later than 15 months after the date of 
     the enactment of this Act.
       (B) Passenger automobiles.--For passenger automobiles, the 
     Secretary of Transportation shall issue--
       (i) the proposed regulations not later than 180 days after 
     the date of the enactment of this Act; and
       (ii) the final regulations not later than 2 years after 
     that date.
       (b) Phased Increases.--The regulations issued pursuant to 
     subsection (a) shall specify standards that take effect 
     successively over several vehicle model years not exceeding 
     15 vehicle model years.
       (c) Clarification of Authority To Amend Passenger 
     Automobile Standard.--Section 32902(b) of title 49, United 
     States Code, is amended by inserting before the period at the 
     end the following: ``or such other number as the Secretary 
     prescribes under subsection (c)''.
       (d) Environmental Assessment.--When issuing final 
     regulations setting forth increased average fuel economy 
     standards under this section, the Secretary of Transportation 
     shall also issue an environmental assessment of the effects 
     of the implementation of the increased standards on the 
     environment under the National Environmental Policy Act of 
     1969 (42 U.S.C. 4321 et seq.).
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Department of Transportation for 
     fiscal year 2003, to remain available until expended, 
     $2,000,000 to carry out this section.

     SEC. 802. EXPEDITED PROCEDURES FOR CONGRESSIONAL INCREASE IN 
                   FUEL ECONOMY STANDARDS.

       (a) Condition for Applicability.--If the Secretary of 
     Transportation fails to issue final regulations with respect 
     to non-passenger automobiles under section 801, or fails to 
     issue final regulations with respect to passenger automobiles 
     under such section, on or before the date by which such final 
     regulations are required by such section to be issued, 
     respectively, then this section shall apply with respect to a 
     bill described in subsection (b).
       (b) Bill.--A bill referred to in this subsection is a bill 
     that satisfies the following requirements:
       (1) Introduction.--The bill is introduced by one or more 
     Members of Congress not later than 60 days after the date 
     referred to in subsection (a).
       (2) Title.--The title of the bill is as follows: ``A bill 
     to establish new average fuel economy standards for certain 
     motor vehicles.''.
       (3) Text.--The bill provides after the enacting clause only 
     the text specified in subparagraph (A) or (B) or any 
     provision described in subparagraph (C), as follows:
       (A) Non-passenger automobiles.--In the case of a bill 
     relating to a failure timely to issue final regulations 
     relating to non-passenger automobiles, the following text:
     ``That, section 32902 of title 49, United States Code, is 
     amended by adding at the end the following new subsection:
       `` `(__) Non-passenger automobiles.--The average fuel 
     economy standard for non-passenger automobiles manufactured 
     by a manufacturer in a model year after model year ____ shall 
     be ____ miles per gallon.' '', the first blank space being 
     filled in with a subsection designation, the second blank 
     space being filled in with the number of a year, and the 
     third blank space being filled in with a number.
       (B) Passenger automobiles.--In the case of a bill relating 
     to a failure timely to issue final regulations relating to 
     passenger automobiles, the following text:
     ``That, section 32902(b) of title 49, United States Code, is 
     amended to read as follows:
       `` `(b) Passenger Automobiles.--Except as provided in this 
     section, the average fuel economy standard for passenger 
     automobiles manufactured by a manufacturer in a model year 
     after model year ____ shall be ____ miles per gallon.' '', 
     the first blank space being filled in with the number of a 
     year and the second blank space being filled in with a 
     number.
       (C) Substitute text.--Any text substituted by an amendment 
     that is in order under subsection (c)(3).
       (c) Expedited Procedures.--A bill described in subsection 
     (b) shall be considered in a House of Congress in accordance 
     with the procedures provided for the consideration of joint 
     resolutions in paragraphs (3) through (8) of section 8066(c) 
     of the Department of Defense Appropriations Act, 1985 (as 
     contained in section 101(h) of Public Law 98-473; 98 Stat. 
     1936), with the following exceptions:
       (1) References to resolution.--The references in such 
     paragraphs to a resolution shall be deemed to refer to the 
     bill described in subsection (b).
       (2) Committees of jurisdiction.--The committees to which 
     the bill is referred under this subsection shall--
       (A) in the Senate, be the Committee on Commerce, Science, 
     and Transportation; and
       (B) in the House of Representatives, be the Committee on 
     Energy and Commerce.
       (3) Amendments.--
       (A) Amendments in order.--Only four amendments to the bill 
     are in order in each House, as follows:
       (i) Two amendments proposed by the majority leader of that 
     House.
       (ii) Two amendments proposed by the minority leader of that 
     House.
       (B) Form and content.--To be in order under subparagraph 
     (A), an amendment shall propose to strike all after the 
     enacting clause and substitute text that only includes the 
     same text as is proposed to be stricken except for one or 
     more different numbers in the text.
       (C) Debate, et cetera.--Subparagraph (B) of section 
     8066(c)(5) of the Department of Defense Appropriations Act, 
     1985 (98 Stat. 1936) shall apply to the consideration of each 
     amendment proposed pursuant to subparagraph (A) of this 
     paragraph in the same manner as such subparagraph (B) applies 
     to debatable motions.

     SEC. 803. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM 
                   FEASIBLE AVERAGE FUEL ECONOMY.

       Section 32902(f) of title 49, United States Code, is 
     amended to read as follows:
       ``(f) Considerations for Decisions on Maximum Feasible 
     Average Fuel Economy.--When deciding maximum feasible average 
     fuel economy under this section, the Secretary of 
     Transportation shall consider the following matters:
       ``(1) Technological feasibility.
       ``(2) Economic practicability.
       ``(3) The effect of other motor vehicle standards of the 
     Government on fuel economy.
       ``(4) The need of the United States to conserve energy.
       ``(5) The desirability of reducing United States dependence 
     on imported oil.
       ``(6) The effects of the average fuel economy standards on 
     motor vehicle and passenger safety.
       ``(7) The effects of increased fuel economy on air quality.
       ``(8) The adverse effects of average fuel economy standards 
     on the relative competitiveness of manufacturers.
       ``(9) The effects of compliance with average fuel economy 
     standards on levels of employment in the United States.
       ``(10) The cost and lead time necessary for the 
     introduction of the necessary new technologies.
       ``(11) The potential for advanced technology vehicles, such 
     as hybrid and fuel cell vehicles, to contribute to the 
     achievement of significant reductions in fuel consumption.
       ``(12) The extent to which the necessity for vehicle 
     manufacturers to incur near-term costs to comply with the 
     average fuel economy standards adversely affects the 
     availability of resources for the development of advanced 
     technology for the propulsion of motor vehicles.
       ``(13) The report of the National Research Council that is 
     entitled `Effectiveness and Impact of Corporate Average Fuel 
     Economy Standards', issued in January 2002.''.

     SEC. 804. EXTENSION OF MAXIMUM FUEL ECONOMY INCREASE FOR 
                   ALTERNATIVE FUELED VEHICLES.

       Section 32906(a)(1) of title 49, United States Code, is 
     amended--
       (1) in subparagraph (A), by striking ``1993-2004'' and 
     inserting ``1993 through 2008''; and
       (2) in subparagraph (B), by striking ``2005-2008'' and 
     inserting ``2009 through 2012''.

     SEC. 805. PROCUREMENT OF ALTERNATIVE FUELED AND HYBRID LIGHT 
                   DUTY TRUCKS.

       (a) Vehicle Fleets Not Covered by Requirement in Energy 
     Policy Act of 1992.--
       (1) Hybrid vehicles.--The head of each agency of the 
     executive branch shall coordinate with the Administrator of 
     General Services to ensure that only hybrid vehicles are 
     procured by or for each agency fleet of light duty trucks 
     that is not in a fleet of vehicles to which section 303 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
       (2) Waiver authority.--The head of an agency, in 
     consultation with the Administrator, may waive the 
     applicability of the policy regarding the procurement of 
     hybrid vehicles in paragraph (1) to that agency to the extent 
     that the head of that agency determines necessary--
       (A) to meet specific requirements of the agency for 
     capabilities of light duty trucks;
       (B) to procure vehicles consistent with the standards 
     applicable to the procurement of fleet vehicles for the 
     Federal Government;
       (C) to adjust to limitations on the commercial availability 
     of light duty trucks that are hybrid vehicles; or
       (D) to avoid the necessity of procuring a hybrid vehicle 
     for the agency when each of the hybrid vehicles available for 
     meeting the requirements of the agency has a cost to the 
     United States that exceeds the costs of comparable nonhybrid 
     vehicles by a factor that is significantly higher than the 
     difference between--
       (i) the real cost of the hybrid vehicle to retail 
     purchasers, taking into account the benefit of any tax 
     incentives available to retail purchasers for the purchase of 
     the hybrid vehicle; and

[[Page S3716]]

       (ii) the costs of the comparable nonhybrid vehicles to 
     retail purchasers.
       (3) Applicability to procurements after fiscal year 2004.--
     This subsection applies with respect to procurements of light 
     duty trucks in fiscal year 2005 and subsequent fiscal years.
       (b) Requirement To Exceed Requirement in Energy Policy Act 
     of 1992.--
       (1) Light duty trucks.--The head of each agency of the 
     executive branch shall coordinate with the Administrator of 
     General Services to ensure that, of the light duty trucks 
     procured in fiscal years after fiscal year 2004 for the 
     fleets of light duty vehicles of the agency to which section 
     303 of the Energy Policy Act of 1992 (42 U.S.C. 13212) 
     applies--
       (A) 5 percent of the total number of such trucks that are 
     procured in each of fiscal years 2005 and 2006 are 
     alternative fueled vehicles or hybrid vehicles; and
       (B) 10 percent of the total number of such trucks that are 
     procured in each fiscal year after fiscal year 2006 are 
     alternative fueled vehicles or hybrid vehicles.
       (2) Counting of trucks.--Light duty trucks acquired for an 
     agency of the executive branch that are counted to comply 
     with section 303 of the Energy Policy Act of 1992 (42 U.S.C. 
     13212) for a fiscal year shall be counted to determine the 
     total number of light duty trucks procured for that agency 
     for that fiscal year for the purposes of paragraph (1), but 
     shall not be counted to satisfy the requirement in that 
     paragraph.
       (c) Definitions.--In this section:
       (1) Hybrid vehicle.--The term ``hybrid vehicle'' means--
       (A) a motor vehicle that draws propulsion energy from 
     onboard sources of stored energy that are both--
       (i) an internal combustion or heat engine using combustible 
     fuel; and
       (ii) a rechargeable energy storage system; and
       (B) any other vehicle that is defined as a hybrid vehicle 
     in regulations prescribed by the Secretary of Energy for the 
     administration of title III of the Energy Policy Act of 1992.
       (2) Alternative fueled vehicle.--The term ``alternative 
     fueled vehicle'' has the meaning given that term in section 
     301 of the Energy Policy Act of 1992 (42 U.S.C. 13211).
       (d) Inapplicability to Department of Defense.--This section 
     does not apply to the Department of Defense, which is subject 
     to comparable requirements under section 318 of the National 
     Defense Authorization Act for Fiscal Year 2002 (Public Law 
     107-107; 115 Stat. 1055; 10 U.S.C. 2302 note).

     SEC. 806. USE OF ALTERNATIVE FUELS.

       (a) Exclusive Use of Alternative Fuels in Dual Fueled 
     Vehicles.--The head of each agency of the executive branch 
     shall coordinate with the Administrator of General Services 
     to ensure that, not later than January 1, 2009, the fuel 
     actually used in the fleet of dual fueled vehicles used by 
     the agency is an alternative fuel.
       (b) Waiver Authority.--
       (1) Capability waiver.--
       (A) Authority.--If the Secretary of Transportation 
     determines that not all of the dual fueled vehicles can 
     operate on alternative fuels at all times, the Secretary may 
     waive the requirement of subsection (a) in part, but only to 
     the extent that--
       (i) not later than January 1, 2009, not less than 50 
     percent of the total annual volume of fuel used in the dual 
     fueled vehicles shall be alternative fuels; and
       (ii) not later than January 1, 2011, not less than 75 
     percent of the total annual volume of fuel used in the dual 
     fueled vehicles shall be alternative fuels.
       (B) Expiration.--In no case may a waiver under subparagraph 
     (A) remain in effect after December 31, 2012.
       (2) Regional fuel availability waiver.--The Secretary may 
     waive the applicability of the requirement of subsection (a) 
     to vehicles used by an agency in a particular geographic area 
     where the alternative fuel otherwise required to be used in 
     the vehicles is not reasonably available to retail purchasers 
     of the fuel, as certified to the Secretary by the head of the 
     agency.
       (c) Definitions.--In this section:
       (1) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given that term in section 32901(a)(1) of title 
     49, United States Code.
       (2) Dual fueled vehicle.--The term ``dual fueled vehicle'' 
     has the meaning given the term ``dual fueled automobile'' in 
     section 32901(a)(8) of title 49, United States Code.
       (3) Fleet.--The term ``fleet'', with respect to dual fueled 
     vehicles, has the meaning that is given that term with 
     respect to light duty motor vehicles in section 301(9) of the 
     Energy Policy Act of 1992 (42 U.S.C. 13211(9)).

     SEC. 807. HYBRID ELECTRIC AND FUEL CELL VEHICLES.

       (a) Expansion of Scope.--The Secretary of Energy shall 
     expand the research and development program of the Department 
     of Energy on advanced technologies for improving the 
     environmental cleanliness of vehicles to emphasize research 
     and development on the following:
       (1) Fuel cells, including--
       (A) high temperature membranes for fuel cells; and
       (B) fuel cell auxiliary power systems.
       (2) Hydrogen storage.
       (3) Advanced vehicle engine and emission control systems.
       (4) Advanced batteries and power electronics for hybrid 
     vehicles.
       (5) Advanced fuels.
       (6) Advanced materials.
       (b) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Department of Energy for fiscal 
     year 2003, the amount of $225,000,000 for carrying out the 
     expanded research and development program provided for under 
     this section.

     SEC. 808. DIESEL FUELED VEHICLES.

       (a) Diesel Combustion and After Treatment Technologies.--
     The Secretary of Energy shall accelerate research and 
     development directed toward the improvement of diesel 
     combustion and after treatment technologies for use in diesel 
     fueled motor vehicles.
       (b) Goal.--
       (1) Compliance with tier 2 emission standards by 2010.--The 
     Secretary shall carry out subsection (a) with a view to 
     developing and demonstrating diesel technology meeting tier 2 
     emission standards not later than 2010.
       (2) Tier 2 emission standards defined.--In this subsection, 
     the term ``tier 2 emission standards'' means the motor 
     vehicle emission standards promulgated by the Administrator 
     of the Environmental Protection Agency on February 10, 2000, 
     under sections 202 and 211 of the Clean Air Act to apply to 
     passenger cars, light trucks, and larger passenger vehicles 
     of model years after the 2003 vehicle model year.

     SEC. 809. FUEL CELL DEMONSTRATION.

       (a) Program Required.--The Secretary of Energy and the 
     Secretary of Defense shall jointly carry out a program to 
     demonstrate--
       (1) fuel cell technologies developed in the PNGV and 
     Freedom Car programs;
       (2) fuel cell technologies developed in research and 
     development programs of the Department of Defense; and
       (3) follow-on fuel cell technologies.
       (b) Purposes of Program.--The purposes of the program are 
     to identify and support technological advances that are 
     necessary to achieve accelerated availability of fuel cell 
     technology for use both for nonmilitary and military 
     purposes.
       (c) Cooperation With Industry.--
       (1) In general.--The demonstration program shall be carried 
     out in cooperation with industry, including the automobile 
     manufacturing industry and the automotive systems and 
     component suppliers industry.
       (2) Cost sharing.--The Secretary of Energy and the 
     Secretary of Defense shall provide for industry to bear, in 
     cash or in kind, at least one-half of the total cost of 
     carrying out the demonstration program.
       (d) Definitions.--In this section:
       (1) PNGV program.--The term ``PNGV program'' means the 
     Partnership for a New Generation of Vehicles, a cooperative 
     program engaged in by the Departments of Commerce, Energy, 
     Transportation, and Defense, the Environmental Protection 
     Agency, the National Science Foundation, and the National 
     Aeronautics and Space Administration with the automotive 
     industry for the purpose of developing a new generation of 
     vehicles with capabilities resulting in significantly 
     improved fuel efficiency together with low emissions without 
     compromising the safety, performance, affordability, or 
     utility of the vehicles.
       (2) Freedom car program.--The term ``Freedom Car program'' 
     means a cooperative research program engaged in by the 
     Department of Energy with the United States Council on 
     Automotive Research as a follow-on to the PNGV program.

     SEC. 810. BUS REPLACEMENT.

       (a) Requirement for Study.--The Secretary of Transportation 
     shall carry out a study to determine how best to provide for 
     converting the composition of the fleets of buses in 
     metropolitan areas and school systems from buses utilizing 
     current diesel technology to--
       (1) buses that draw propulsion from onboard fuel cells;
       (2) buses that are hybrid electric vehicles;
       (3) buses that are fueled by clean-burning fuels, such as 
     renewable fuels (including agriculture-based biodiesel 
     fuels), natural gas, and ultra-low sulphur diesel;
       (4) buses that are powered by clean diesel engines: or
       (5) an assortment of buses described in paragraphs (1), 
     (2), (3), and (4).
       (b) Report.--
       (1) Requirement.--The Secretary of Transportation shall 
     submit a report on the results of the study on bus fleet 
     conversions under subsection (a) to Congress.
       (2) Content.--The report on bus fleet conversions shall 
     include the following:
       (A) An assessment of effectuating conversions by the 
     following means:
       (i) Replacement of buses.
       (ii) Replacement of power and propulsion systems in buses 
     utilizing current diesel technology.
       (iii) Other means.
       (B) Feasible schedules for carrying out the conversions.
       (C) Estimated costs of carrying out the conversions.
       (D) An assessment of the benefits of the conversions in 
     terms of emissions control and reduction of fuel consumption.

     SEC. 811. AVERAGE FUEL ECONOMY STANDARDS FOR PICKUP TRUCKS.

       (a) In General.--Section 32902(a) of title 49, United 
     States Code, is amended--
       (1) by inserting ``(1)'' after the after ``Automobiles.--
     ''; and
       (2) by adding at the end the following new paragraph:
       ``(2) The average fuel economy standard for pickup trucks 
     manufactured by a manufacturer in a model year after model 
     year 2004 shall be no higher than 20.7 miles per gallon. No 
     average fuel economy standard prescribed under another 
     provision of this section shall apply to pickup trucks.''.
       (b) Definition Of Pickup Truck.--Section 32901(a) of such 
     title is amended by adding at the end the following new 
     paragraph:
       ``(17) `pickup truck' has the meaning given that term in 
     regulations prescribed by the Secretary for the 
     administration of this chapter, as

[[Page S3717]]

     in effect on January 1, 2002, except that such term shall 
     also include any additional vehicle that the Secretary 
     defines as a pickup truck in regulations prescribed for the 
     administration of this chapter after such date.''.

     SEC. 812. EXCEPTION TO HOV PASSENGER REQUIREMENTS FOR 
                   ALTERNATIVE FUEL VEHICLES.

       Section 102(a)(1) of title 23, United States Code, is 
     amended by inserting after ``required'' the following: 
     ``(unless, in the discretion of the State transportation 
     department, the vehicle is being operated on, or is being 
     fueled by, an alternative fuel (as defined in section 301(2) 
     of the Energy Policy Act of 1992 (42 U.S.C. 13211(2)))''.

     SEC. 813. DATA COLLECTION.

       Section 205 of the Department of Energy Organization Act 
     (42 U.S.C. 7135) is amended by adding at the end the 
     following:
       ``(m) In order to improve the ability to evaluate the 
     effectiveness of the Nation's renewable fuels mandate, the 
     Administrator shall conduct and publish the results of a 
     survey of renewable fuels consumption in the motor vehicle 
     fuels market in the United States monthly, and in a manner 
     designed to protect the confidentiality of individual 
     responses. In conducting the survey, the Administrator shall 
     collect information retrospectively to 1998, both on a 
     national basis and a regional basis, including--
       (1) the quantity of renewable fuels produced;
       (2) the cost of production;
       (3) the cost of blending and marketing;
       (4) the quantity of renewable fuels blended;
       (5) the quantity of renewable fuels imported; and
       (6) market price data.

     SEC. 814. GREEN SCHOOL BUS PILOT PROGRAM.

       (a) Establishment.--The Secretary of Energy and the 
     Secretary of Transportation shall jointly establish a pilot 
     program for awarding grants on a competitive basis to 
     eligible entities for the demonstration and commercial 
     application of alternative fuel school buses and ultra-low 
     sulfur diesel school buses.
       (b) Requirements.--Not later than 3 months after the date 
     of the enactment of this Act, the Secretary shall establish 
     and publish in the Federal Register grant requirements on 
     eligibility for assistance, and on implementation of the 
     program established under subsection (a), including 
     certification requirements to ensure compliance with this 
     subtitle.
       (c) Solicitation.--Not later than 6 months after the date 
     of the enactment of this Act, the Secretary shall solicit 
     proposals for grants under this section.
       (d) Eligible Recipients.--A grant shall be awarded under 
     this section only--
       (1) to a local governmental entity responsible for 
     providing school bus service for one or more public school 
     systems; or
       (2) jointly to an entity described in paragraph (1) and a 
     contracting entity that provides school bus service to the 
     public school system or systems.
       (e) Types of Grants.--
       (1) In general.--Grants under this section shall be for the 
     demonstration and commercial application of technologies to 
     facilitate the use of alternative fuel school buses and 
     ultra-low sulfur diesel school buses instead of buses 
     manufactured before model year 1977 and diesel-powered buses 
     manufactured before model year 1991.
       (2) No economic benefit.--Other than the receipt of the 
     grant, a recipient of a grant under this section may not 
     receive any economic benefit in connection with the receipt 
     of the grant.
       (3) Priority of grant applications.--The Secretary shall 
     give priority to awarding grants to applicants who can 
     demonstrate the use of alternative fuel buses and ultra-low 
     sulfur diesel school buses instead of buses manufactured 
     before model year 1977.
       (f) Conditions of Grant.--A grant provided under this 
     section shall include the following conditions:
       (1) All buses acquired with funds provided under the grant 
     shall be operated as part of the school bus fleet for which 
     the grant was made for a minimum of 5 years.
       (2) Funds provided under the grant may only be used--
       (A) to pay the cost, except as provided in paragraph (3), 
     of new alternative fuel school buses or ultra-low sulfur 
     diesel school buses, including State taxes and contract fees; 
     and
       (B) to provide--
       (i) up to 10 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will only be available to the grant 
     recipient; and
       (ii) up to 15 percent of the price of the alternative fuel 
     buses acquired, for necessary alternative fuel infrastructure 
     if the infrastructure will be available to the grant 
     recipient and to other bus fleets.
       (3) The grant recipient shall be required to provide at 
     least the lesser of 15 percent of the total cost of each bus 
     received or $15,000 per bus.
       (4) In the case of a grant recipient receiving a grant to 
     demonstrate ultra-low sulfur diesel school buses, the grant 
     recipient shall be required to provide documentation to the 
     satisfaction of the Secretary that diesel fuel containing 
     sulfur at not more than 15 parts per million is available for 
     carrying out the purposes of the grant, and a commitment by 
     the applicant to use such fuel in carrying out the purposes 
     of the grant.
       (g) Buses.--Funding under a grant made under this section 
     may only be used to demonstrate the use of new alternative 
     fuel school buses or ultra-low sulfur diesel school buses 
     that--
       (1) have a gross vehicle weight greater than 14,000 pounds;
       (2) are powered by a heavy duty engine;
       (3) in the case of alternative fuel school buses, emit not 
     more than--
       (A) for buses manufactured in model year 2002, 2.5 grams 
     per brake horsepower-hour of nonmethane hydrocarbons and 
     oxides of nitrogen and .01 grams per brake horsepower-hour of 
     particulate matter; and
       (B) for buses manufactured in model years 2003 through 
     2006, 1.8 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter; and
       (4) in the case of ultra-low sulfur diesel school buses, 
     emit not more than the lesser of--
       (A) the emissions of nonmethane hydrocarbons, oxides of 
     nitrogen, and particulate matter of the best performing 
     technology of the same class of ultra-low sulfur diesel 
     school buses commercially available at the time the grant is 
     made; or
       (B) the applicable following amounts--
       (i) for buses manufactured in model year 2002 or 2003, 3.0 
     grams per brake horsepower-hour of oxides of nitrogen and .01 
     grams per brake horsepower-hour of particulate matter; and
       (ii) for buses manufactured in model years 2004 through 
     2006, 2.5 grams per brake horsepower-hour of nonmethane 
     hydrocarbons and oxides of nitrogen and .01 grams per brake 
     horsepower-hour of particulate matter.
       (h) Deployment and Distribution.--The Secretary shall seek 
     to the maximum extent practicable to achieve nationwide 
     deployment of alternative fuel school buses through the 
     program under this section, and shall ensure a broad 
     geographic distribution of grant awards, with a goal of no 
     State receiving more than 10 percent of the grant funding 
     made available under this section for a fiscal year.
       (i) Limit on Funding.--The Secretary shall provide not less 
     than 20 percent and not more than 25 percent of the grant 
     funding made available under this section for any fiscal year 
     for the acquisition of ultra-low sulfur diesel school buses.
       (j) Definitions.--For purposes of this section--
       (1) the term ``alternative fuel school bus'' means a bus 
     powered substantially by electricity (including electricity 
     supplied by a fuel cell), or by liquefied natural gas, 
     compressed natural gas, liquefied petroleum gas, hydrogen, 
     propane, or methanol or ethanol at no less than 85 percent by 
     volume;
       (2) the term ``idling'' means not turning off an engine 
     while remaining stationary for more than approximately 3 
     minutes; and
       (3) the term ``ultra-low sulfur diesel school bus'' means a 
     school bus powered by diesel fuel which contains sulfur at 
     not more than 15 parts per million.
       (k) Reduction of School Bus Idling.--Each local educational 
     agency (as defined in section 9101 of the Elementary and 
     Secondary Education Act of 1965 (20 U.S.C. 7801)) that 
     receives Federal funds under the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.) is encouraged 
     to develop a policy to reduce the incidence of school buses 
     idling at schools when picking up and unloading students.

     SEC. 815. FUEL CELL BUS DEVELOPMENT AND DEMONSTRATION 
                   PROGRAM.

       (a) Establishment of Program.--The Secretary shall 
     establish a program for entering into cooperative agreements 
     with private sector fuel cell bus developers for the 
     development of fuel cell-powered school buses, and 
     subsequently with not less than two units of local government 
     using natural gas-powered school buses and such private 
     sector fuel cell bus developers to demonstrate the use of 
     fuel cell-powered school buses.
       (b) Cost Sharing.--The non-Federal contribution for 
     activities funded under this section shall be not less than--
       (1) 20 percent for fuel infrastructure development 
     activities; and
       (2) 50 percent for demonstration activities and for 
     development activities not described in paragraph (1).
       (c) Funding.--No more than $25,000,000 of the amounts 
     authorized under section 815 may be used for carrying out 
     this section for the period encompassing fiscal years 2003 
     through 2006.
       (d) Reports to Congress.--Not later than 3 years after the 
     date of the enactment of this Act, and not later than October 
     1, 2006, the Secretary shall transmit to the appropriate 
     congressional committees a report that--
       (1) evaluates the process of converting natural gas 
     infrastructure to accommodate fuel cell-powered school buses; 
     and
       (2) assesses the results of the development and 
     demonstration program under this section.

     SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Secretary of 
     Energy for carrying out sections 814 and 815, to remain 
     available until expended--
       (1) $50,000,000 for fiscal year 2003;
       (2) $60,000,000 for fiscal year 2004;
       (3) $70,000,000 for fiscal year 2005; and
       (4) $80,000,000 for fiscal year 2006.

     SEC. 817. TEMPORARY BIODIESEL CREDIT EXPANSION.

       (a) Biodiesel Credit Expansion.--Section 312(b) of the 
     Energy Policy Act of 1992 (42 U.S.C. 13220(b)) is amended by 
     striking paragraph (2) and inserting the following:
       ``(2) Use.--
       ``(A) In general.--A fleet or covered person--
       ``(i) may use credits allocated under subsection (a) to 
     satisfy more than 50 percent of the alternative fueled 
     vehicle requirements of a fleet or covered person under this 
     title, title IV, and title V; but
       ``(ii) may use credits allocated under subsection (a) to 
     satisfy 100 percent of the alternative fueled vehicle 
     requirements of a fleet or covered person under title V for 1 
     or more of model years 2002 through 2005.
       ``(B) Applicability.--Subparagraph (A) does not apply to a 
     fleet or covered person that is a biodiesel alternative fuel 
     provider described in section 501(a)(2)(A).''.

[[Page S3718]]

       (b) Treatment as Section 508 Credits.--Section 312(c) of 
     the Energy Policy Act of 1992 (42 U.S.C. 13220(c)) is 
     amended--
       (1) in the subsection heading, by striking ``Credit not'' 
     and inserting ``Treatment as''; and
       (2) by striking ``shall not be considered'' and inserting 
     ``shall be treated as''.
       (c) Alternative Fueled Vehicle Study and Report.--
       (1) Definitions.--In this subsection:
       (A) Alternative fuel.--The term ``alternative fuel'' has 
     the meaning given the term in section 301 of the Energy 
     Policy Act of 1992 (42 U.S.C. 13211).
       (B) Alternative fueled vehicle.--The term ``alternative 
     fueled vehicle'' has the meaning given the term in section 
     301 of the Energy Policy Act of 1992 (42 U.S.C. 13211).
       (C) Light duty motor vehicle.--The term ``light duty motor 
     vehicle'' has the meaning given the term in section 301 of 
     the Energy Policy Act of 1992 (42 U.S.C. 13211).
       (D) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (2) Biodiesel credit extension study.--As soon as 
     practicable after the date of enactment of this Act, the 
     Secretary shall conduct a study--
       (A) to determine the availability and cost of light duty 
     motor vehicles that qualify as alternative fueled vehicles 
     under title V of the Energy Policy Act of 1992 (42 U.S.C. 
     13251 et seq.); and
       (B) to compare--
       (i) the availability and cost of biodiesel; with
       (ii) the availability and cost of fuels that qualify as 
     alternative fuels under title V of the Energy Policy Act of 
     1992 (42 U.S.C. 13251 et seq.).
       (3) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that--
       (A) describes the results of the study conducted under 
     paragraph (2); and
       (B) includes any recommendations of the Secretary for 
     legislation to extend the temporary credit provided under 
     subsection (a) beyond model year 2005.

     SEC. 818. NEIGHBORHOOD ELECTRIC VEHICLES.

       Section 301 of the Energy Policy Act of 1992 (42 U.S.C. 
     13211) is amended--
       (1) by striking ``or a dual fueled vehicle'' and inserting 
     ``, a dual fueled vehicle, or a neighborhood electric 
     vehicle'';
       (2) by striking ``and'' at the end of paragraph (13);
       (3) by striking the period at the end of subparagraph (14) 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(15) the term `neighborhood electric vehicle' means a 
     motor vehicle that qualifies as both--
       ``(A) a low-speed vehicle, as such term is defined in 
     section 571.3(b) of title 49, Code of Federal Regulations; 
     and
       ``(B) a zero-emission vehicle, as such term is defined in 
     section 86.1703-99 of title 40, Code of Federal 
     Regulations.''.

     SEC. 819. CREDIT FOR HYBRID VEHICLES, DEDICATED ALTERNATIVE 
                   FUEL VEHICLES, AND INFRASTRUCTURE.

       Section 507 of the Energy Policy Act of 1992 (42 U.S.C. 
     13258) is amended by adding at the end the following:
       ``(p) Credits for New Qualified Hybrid Motor Vehicles.--
       ``(1) Definitions.--In this subsection:
       ``(A) 2000 model year city fuel efficiency.--The term `2000 
     model year city fuel efficiency', with respect to a motor 
     vehicle, means fuel efficiency determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weightThe 2000 model year city fuel efficiency is:

1,500 or 1,750 lbs............................................43.7 mpg 
2,000 lbs.....................................................38.3 mpg 
2,250 lbs.....................................................34.1 mpg 
2,500 lbs.....................................................30.7 mpg 
2,750 lbs.....................................................27.9 mpg 
3,000 lbs.....................................................25.6 mpg 
3,500 lbs.....................................................22.0 mpg 
4,000 lbs.....................................................19.3 mpg 
4,500 lbs.....................................................17.2 mpg 
5,000 lbs.....................................................15.5 mpg 
5,500 lbs.....................................................14.1 mpg 
6,000 lbs.....................................................12.9 mpg 
6,500 lbs.....................................................11.9 mpg 
7,000 to 8,500 lbs............................................11.1 mpg.
       ``(ii) In the case of a light truck:

``If vehicle inertia                                The 2000 model year
  weight class is:                             city fuel efficiency is:
1,500 or 1,750 lbs............................................37.6 mpg 
2,000 lbs.....................................................33.7 mpg 
2,250 lbs.....................................................30.6 mpg 
2,500 lbs.....................................................28.0 mpg 
2,750 lbs.....................................................25.9 mpg 
3,000 lbs.....................................................24.1 mpg 
3,500 lbs.....................................................21.3 mpg 
4,000 lbs.....................................................19.0 mpg 
4,500 lbs.....................................................17.3 mpg 
5,000 lbs.....................................................15.8 mpg 
5,500 lbs.....................................................14.6 mpg 
6,000 lbs.....................................................13.6 mpg 
6,500 lbs.....................................................12.8 mpg 
7,000 to 8,500 lbs............................................12.0 mpg.
       ``(B) Administrator.--The term `Administrator' means the 
     Administrator of the Environmental Protection Agency.
       ``(C) Energy storage device.--The term `energy storage 
     device' means an onboard rechargeable energy storage system 
     or similar storage device.
       ``(D) Fuel efficiency.--The term `fuel efficiency' means 
     the percentage increased fuel efficiency specified in table 1 
     in paragraph (2)(C) over the average 2000 model year city 
     fuel efficiency of vehicles in the same weight class.
       ``(E) Maximum available power.--The term `maximum available 
     power', with respect to a new qualified hybrid motor vehicle 
     that is a passenger vehicle or light truck, means the 
     quotient obtained by dividing--
       ``(i) the maximum power available from the electrical 
     storage device of the new qualified hybrid motor vehicle, 
     during a standard 10-second pulse power or equivalent test; 
     by
       ``(ii) the sum of--

       ``(I) the maximum power described in clause (i); and
       ``(II) the net power of the internal combustion or heat 
     engine, as determined in accordance with standards 
     established by the Society of Automobile Engineers.

       ``(F) Motor vehicle.--The term `motor vehicle' has the 
     meaning given the term in section 216 of the Clean Air Act 
     (42 U.S.C. 7550).
       ``(G) New qualified hybrid motor vehicle.--The term `new 
     qualified hybrid motor vehicle' means a motor vehicle that--
       ``(i) draws propulsion energy from both--

       ``(I) an internal combustion engine (or heat engine that 
     uses combustible fuel); and
       ``(II) an energy storage device;

       ``(ii) in the case of a passenger automobile or light 
     truck--

       ``(I) in the case of a 2001 or later model vehicle, 
     receives a certificate of conformity under the Clean Air Act 
     (42 U.S.C. 7401 et seq.) and produces emissions at a level 
     that is at or below the applicable qualifying California low 
     emissions vehicle standards established under authority of 
     section 243(e)(2) of the Clean Air Act (42 U.S.C. 7583(e)(2)) 
     for that make and model year; and
       ``(II) in the case of a 2004 or later model vehicle, is 
     certified by the Administrator as producing emissions at a 
     level that is at or below the level established for Bin 5 
     vehicles in the Tier 2 regulations promulgated by the 
     Administrator under section 202(i) of the Clean Air Act (42 
     U.S.C. 7521(i)) for that make and model year vehicle; and

       ``(iii) employs a vehicle braking system that recovers 
     waste energy to charge an energy storage device.
       ``(H) Vehicle inertia weight class.--The term `vehicle 
     inertia weight class' has the meaning given the term in 
     regulations promulgated by the Administrator for purposes of 
     the administration of title II of the Clean Air Act (42 
     U.S.C. 7521 et seq.).
       ``(2) Allocation.--
       ``(A) In general.--The Secretary shall allocate a partial 
     credit to a fleet or covered person under this title if the 
     fleet or person acquires a new qualified hybrid motor vehicle 
     that is eligible to receive a credit under each of the tables 
     in subparagraph (C).
       ``(B) Amount.--The amount of a partial credit allocated 
     under subparagraph (A) for a vehicle described in that 
     subparagraph shall be equal to the sum of--
       ``(i) the partial credits determined under table 1 in 
     subparagraph (C); and
       ``(ii) the partial credits determined under table 2 in 
     subparagraph (C).
       ``(C) Tables.--The tables referred to in subparagraphs (A) 
     and (B) are as follows:

                               ``Table 1

                                                              Amount of
``Partial credit for increased fuel efficiency:                 credit:
  At least 125% but less than 150% of 2000 model year city fuel 
    efficiency....................................................0.14 
  At least 150% but less than 175% of 2000 model year city fuel 
    efficiency....................................................0.21 
  At least 175% but less than 200% of 2000 model year city fuel 
    efficiency....................................................0.28 
  At least 200% but less than 225% of 2000 model year city fuel 
    efficiency....................................................0.35 
  At least 225% but less than 250% of 2000 model year city fuel 
    efficiency....................................................0.50.

                               ``Table 2

                                                              Amount of
``Partial credit for `Maximum Available Power':                 credit:

  At least 5% but less than 10%..................................0.125 
  At least 10% but less than 20%.................................0.250 
  At least 20% but less than 30%.................................0.375 
  At least 30% or more...........................................0.500.
       ``(D) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the acquisition of the 
     qualified hybrid motor vehicle is made, treat that credit as 
     the acquisition of 1 alternative fueled vehicle that the 
     fleet or covered person is required to acquire under this 
     title.
       ``(3) Regulations.--The Secretary shall promulgate 
     regulations under which any Federal fleet that acquires a new 
     qualified hybrid motor vehicle will receive partial credits 
     determined under the tables contained in paragraph (2)(C) for 
     purposes of meeting the requirements of section 303.
       ``(q) Credit for Substantial Contribution Towards Use of 
     Dedicated Vehicles in Noncovered Fleets.--
       ``(1) Definitions.--In this subsection:
       ``(A) Dedicated vehicle.--The term `dedicated vehicle' 
     includes--
       ``(i) a light, medium, or heavy duty vehicle; and
       ``(ii) a neighborhood electric vehicle.
       ``(B) Medium or heavy duty vehicle.--The term `medium or 
     heavy duty vehicle' includes a vehicle that--

[[Page S3719]]

       ``(i) operates solely on alternative fuel; and
       ``(ii)(I) in the case of a medium duty vehicle, has a gross 
     vehicle weight rating of more than 8,500 pounds but not more 
     than 14,000 pounds; or
       ``(II) in the case of a heavy duty vehicle, has a gross 
     vehicle weight rating of more than 14,000 pounds.
       ``(C) Substantial contribution.--The term `substantial 
     contribution' (equal to 1 full credit) means not less than 
     $15,000 in cash or in kind services, as determined by the 
     Secretary.
       ``(2) Issuance of credits.--The Secretary shall issue a 
     credit to a fleet or covered person under this title if the 
     fleet or person makes a substantial contribution toward the 
     acquisition and use of dedicated vehicles by a person that 
     owns, operates, leases, or otherwise controls a fleet that is 
     not covered by this title.
       ``(3) Multiple credits for medium and heavy duty dedicated 
     vehicles.--The Secretary shall issue 2 full credits to a 
     fleet or covered person under this title if the fleet or 
     person acquires a medium or heavy duty dedicated vehicle.
       ``(4) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the acquisition of the 
     dedicated vehicle is made, treat that credit as the 
     acquisition of 1 alternative fueled vehicle that the fleet or 
     covered person is required to acquire under this title.
       ``(5) Limitation.--Per vehicle credits acquired under this 
     subsection shall not exceed the per vehicle credits allowed 
     under this section to a fleet for qualifying vehicles in each 
     of the weight categories (light, medium, or heavy duty).
       ``(r) Credit for Substantial Investment in Alternative Fuel 
     Infrastructure.--
       ``(1) Definitions.--In this section, the term `qualifying 
     infrastructure' means--
       ``(A) equipment required to refuel or recharge alternative 
     fueled vehicles;
       ``(B) facilities or equipment required to maintain, repair, 
     or operate alternative fueled vehicles;
       ``(C) training programs, educational materials, or other 
     activities necessary to provide information regarding the 
     operation, maintenance, or benefits associated with 
     alternative fueled vehicles; and
       ``(D) such other activities the Secretary considers to 
     constitute an appropriate expenditure in support of the 
     operation, maintenance, or further widespread adoption of or 
     utilization of alternative fueled vehicles.
       ``(2) Issuance of credits.--The Secretary shall issue a 
     credit to a fleet or covered person under this title for 
     investment in qualifying infrastructure if the qualifying 
     infrastructure is open to the general public during regular 
     business hours.
       ``(3) Amount.--For the purposes of credits under this 
     subsection--
       ``(A) 1 credit shall be equal to a minimum investment of 
     $25,000 in cash or in kind services, as determined by the 
     Secretary; and
       ``(B) except in the case of a Federal or State fleet, no 
     part of the investment may be provided by Federal or State 
     funds.
       ``(4) Use of credits.--At the request of a fleet or covered 
     person allocated a credit under this subsection, the 
     Secretary shall, for the year in which the investment is 
     made, treat that credit as the acquisition of 1 alternative 
     fueled vehicle that the fleet or covered person is required 
     to acquire under this title.''.

     SEC. 820. RENEWABLE CONTENT OF MOTOR VEHICLE FUEL.

       (a) In General.--Section 211 of the Clean Air Act (42 
     U.S.C. 7545) is amended--
       (1) by redesignating subsection (o) as subsection (q); and
       (2) by inserting after subsection (n) the following:
       ``(o) Renewable Fuel Pprogram.--
       ``(1) Definitions.--In this section:
       ``(A) Cellulosic biomass ethanol.--The term `cellulosic 
     biomass ethanol' means ethanol derived from any 
     lignocellulosic or hemicellulosic matter that is available on 
     a renewable or recurring basis, including--
       ``(i) dedicated energy crops and trees;
       ``(ii) wood and wood residues;
       ``(iii) plants;
       ``(iv) grasses;
       ``(v) agricultural residues;
       ``(vi) fibers;
       ``(vii) animal wastes and other waste materials; and
       ``(viii) municipal solid waste.
       ``(B) Renewable fuel.--
       ``(i) In general.--The term `renewable fuel' means motor 
     vehicle fuel that--

       ``(I)(aa) is produced from grain, starch, oilseeds, or 
     other biomass; or
       ``(bb) is natural gas produced from a biogas source, 
     including a landfill, sewage waste treatment plant, feedlot, 
     or other place where decaying organic material is found; and
       ``(II) is used to replace or reduce the quantity of fossil 
     fuel present in a fuel mixture used to operate a motor 
     vehicle.

       ``(ii) Inclusion.--The term `renewable fuel' includes 
     cellulosic biomass ethanol and biodiesel (as defined in 
     section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 
     13220(f)).
       ``(C) Small refinery.--The term `small refinery' means a 
     refinery for which average aggregate daily crude oil 
     throughput for the calendar year (as determined by dividing 
     the aggregate throughput for the calendar year by the number 
     of days in the calendar year) does not exceed 75,000 barrels.
       ``(2) Renewable fuel program.--
       ``(A) In general.--Not later than 1 year from enactment of 
     this provision, the Administrator shall promulgate 
     regulations ensuring that gasoline sold or dispensed to 
     consumers in the United States, on an annual average basis, 
     contains the applicable volume of renewable fuel as specified 
     in subparagraph (B). Regardless of the date of promulgation, 
     such regulations shall contain compliance provisions for 
     refiners, blenders, and importers, as appropriate, to ensure 
     that the requirements of this section are met, but shall not 
     restrict where renewables can be used, or impose any per-
     gallon obligation for the use of renewables. If the 
     Administrator does not promulgate such regulations, the 
     applicable percentage, on a volume percentage of gasoline 
     basis, shall be 1.62 in 2004.
       ``(B) Applicable volume.--
       (i) Calendar years 2004 through 2012.--For the purpose of 
     subparagraph (A), the applicable volume for any of calendar 
     years 2004 through 2012 shall be determined in accordance 
     with the following table:

                  Applicable volume of renewable fuel

  ``Calendar year:                             (In billions of gallons)
    2004...........................................................2.3 
    2005...........................................................2.6 
    2006...........................................................2.9 
    2007...........................................................3.2 
    2008...........................................................3.5 
    2009...........................................................3.9 
    2010...........................................................4.3 
    2011...........................................................4.7 
    2012...........................................................5.0.
       ``(ii) Calendar year 2013 and thereafter.--For the purpose 
     of subparagraph (A), the applicable volume for calendar year 
     2013 and each calendar year thereafter shall be equal to the 
     product obtained by multiplying--

       ``(I) the number of gallons of gasoline that the 
     Administrator estimates will be sold or introduced into 
     commerce in the calendar year; and
       ``(II) the ratio that--

       ``(aa) 5.0 billion gallons of renewable fuels; bears to
       ``(bb) the number of gallons of gasoline sold or introduced 
     into commerce in calendar year 2012.
       ``(3) Applicable percentages.--Not later than October 31 of 
     each calendar year, through 2011, the Administrator of the 
     Energy Information Administration shall provide the 
     Administrator an estimate of the volumes of gasoline sales in 
     the United States for the coming calendar year. Based on such 
     estimates, the Administrator shall by November 30 of each 
     calendar year, through 2011, determine and publish in the 
     Federal Register, the renewable fuel obligation, on a volume 
     percentage of gasoline basis, applicable to refiners, 
     blenders, distributors and importers, as appropriate, for the 
     coming calendar year, to ensure that the requirements of 
     paragraph (2) are met. For each calendar year, the 
     Administrator shall establish a single applicable percentage 
     that applies to all parties, and make provision to avoid 
     redundant obligations. In determining the applicable 
     percentages, the Administrator shall make adjustments to 
     account for the use of renewable fuels by exempt small 
     refineries during the previous year.
       ``(4) Cellulosic biomass ethanol.--For the purpose of 
     paragraph (2), 1 gallon of cellulosic biomass ethanol shall 
     be considered to be the equivalent of 1.5 gallon of renewable 
     fuel.
       ``(5) Credit program.--
       ``(A) In general.--The regulations promulgated to carry out 
     this subsection shall provide for the generation of an 
     appropriate amount of credits by any person that refines, 
     blends, or imports gasoline that contains a quantity of 
     renewable fuel that is greater than the quantity required 
     under paragraph (2). Such regulations shall provide for the 
     generation of an appropriate amount of credits for biodiesel 
     fuel. If a small refinery notifies the Administrator that it 
     waives the exemption provided by this Act, the regulations 
     shall provide for the generation of credits by the small 
     refinery beginning in the year following such notification.
       ``(B) Use of credits.--A person that generates credits 
     under subparagraph (A) may use the credits, or transfer all 
     or a portion of the credits to another person, for the 
     purpose of complying with paragraph (2).
       ``(C) Life of credits.--A credit generated under this 
     paragraph shall be valid to show compliance:
       (i) in the calendar year in which the credit was generated 
     or the next calendar year, or
       (ii) in the calendar year in which the credit was generated 
     or next two consecutive calendar years if the Administrator 
     promulgates regulations under paragraph (6).
       ``(D) Inability to purchase sufficient credits.--The 
     regulations promulgated to carry out this subsection shall 
     include provisions allowing any person that is unable to 
     generate or purchase sufficient credits to meet the 
     requirements under paragraph (2) to carry forward a 
     renewables deficit provided that, in the calendar year 
     following the year in which the renewables deficit is 
     created, such person shall achieve compliance with the 
     renewables requirement under paragraph (2), and shall 
     generate or purchase additional renewables credits to offset 
     the renewables deficit of the previous year.
       ``(6) Seasonal variations in renewable fuel use.--
       ``(A) Study.--For each of calendar years 2004 through 2012, 
     the Administrator of the Energy Information Administration, 
     shall conduct a study of renewable fuels blending to 
     determine whether there are excessive seasonal variations in 
     the use of renewable fuels.
       ``(B) Regulation of excessive seasonal variations.--If, for 
     any calendar year, the Administrator of the Energy 
     Information Administration, based on the study under 
     subparagraph (A), makes the determinations specified in 
     subparagraph (C), the Administrator shall promulgate 
     regulations to ensure that 35 percent or more of the quantity 
     of renewable fuels necessary to meet the requirement of 
     paragraph (2) is used during each of the periods specified in 
     subparagraph (D) of each subsequent calendar year.
       ``(C) Determinations.--The determinations referred to in 
     subparagraph (B) are that--

[[Page S3720]]

       ``(i) less than 35 percent of the quantity of renewable 
     fuels necessary to meet the requirement of paragraph (2) has 
     been used during one of the periods specified in subparagraph 
     (D) of the calendar year; and
       ``(ii) a pattern of excessive seasonal variation described 
     in clause (i) will continue in subsequent calendar years.
       ``(D) Periods.--The two periods referred to in this 
     paragraph are--
       ``(i) April through September; and
       ``(ii) January through March and October through December.
       ``(E) Exclusions.--Renewable fuels blended or consumed in 
     2004 in a state which has received a waiver under section 
     209(b) shall not be included in the study in subparagraph 
     (A).
       ``(7) Waivers.--
       ``(A) In general.--The Administrator, in consultation with 
     the Secretary of Agriculture and the Secretary of Energy, may 
     waive the requirement of paragraph (2) in whole or in part on 
     petition by one or more States by reducing the national 
     quantity of renewable fuel required under this subsection--
       ``(i) based on a determination by the Administrator, after 
     public notice and opportunity for comment, that 
     implementation of the requirement would severely harm the 
     economy or environment of a State, a region, or the United 
     States; or
       ``(ii) based on a determination by the Administrator, after 
     public notice and opportunity for comment, that there is an 
     inadequate domestic supply or distribution capacity to meet 
     the requirement.
        ``(B) Petitions for waivers.--The Administrator, in 
     consultation with the Secretary of Agriculture and the 
     Secretary of Energy, shall approve or disapprove a State 
     petition for a waiver of the requirement of paragraph (2) 
     within 90 days after the date on which the petition is 
     received by the Administrator.
       ``(C) Termination of waivers.--A waiver granted under 
     subparagraph (A) shall terminate after 1 year, but may be 
     renewed by the Administrator after consultation with the 
     Secretary of Agriculture and the Secretary of Energy.
       ``(8) Study and waiver for initial year of program.--Not 
     later than 180 days from enactment, the Secretary of Energy 
     shall complete for the Administrator a study assessing 
     whether the renewable fuels requirement under paragraph (2) 
     will likely result in significant adverse consumer impacts in 
     2004, on a national, regional or state basis. Such study 
     shall evaluate renewable fuel supplies and prices, blendstock 
     supplies, and supply and distribution system capabilities. 
     Based on such study, the Secretary shall make specific 
     recommendations to the Administrator regarding waiver of the 
     requirements of paragraph (2), in whole or in part, to avoid 
     any such adverse impacts. Within 270 days from enactment, the 
     Administrator shall, consistent with the recommendations of 
     the Secretary waive, in whole or in part, the renewable fuels 
     requirement under paragraph (2) by reducing the national 
     quantity of renewable fuel required under this subsection in 
     2004. This provision shall not be interpreted as limiting the 
     Administrator's authority to waive the requirements of 
     paragraph (2) in whole, or in part, under paragraph (7), 
     pertaining to waivers.
       ``(9) Small refineries.--
       ``(A) In general.--The requirement of paragraph (2) shall 
     not apply to small refineries until January 1, 2008. Not 
     later than December 31, 2006, the Secretary of Energy shall 
     complete for the Administrator a study to determine whether 
     the requirement of paragraph (2) would impose a 
     disproportionate economic hardship on small refineries. For 
     any small refinery that the Secretary of Energy determines 
     would experience a disproportionate economic hardship, the 
     Administrator shall extend the small refinery exemption for 
     such small refinery for no less than two additional years.
       ``(B) Economic hardship.--
       ``(i) Extension of exemption.--A small refinery may at any 
     time petition the Administrator for an extension of the 
     exemption from the requirement of paragraph (2) for the 
     reason of disproportionate economic hardship. In evaluating a 
     hardship petition, the Administrator, in consultation with 
     the Secretary of Energy, shall consider the findings of the 
     study in addition to other economic factors.
       ``(ii) Deadline for action on petitions.--The Administrator 
     shall act on any petition submitted by a small refinery for a 
     hardship exemption not later than 90 days after the receipt 
     of the petition.
       ``(C) Credit program.--If a small refinery notifies the 
     Administrator that it waives the exemption provided by this 
     Act, the regulations shall provide for the generation of 
     credits by the small refinery beginning in the year following 
     such notification.
       ``(D) Opt-in for small refiners.--A small refinery shall be 
     subject to the requirements of this section if it notifies 
     the Administrator that it waives the exemption under 
     subparagraph (A).
       (b) Penalties and Enforcement.--Section 211(d) of the Clean 
     Air Act (42 U.S.C. 7545(d)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``or (n)'' each 
     place it appears and inserting ``(n) or (o)''; and
       (B) in the second sentence, by striking ``or (m)'' and 
     inserting ``(m), or (o)''; and
       (2) in the first sentence of paragraph (2), by striking 
     ``and (n)'' each place it appears and inserting ``(n), and 
     (o)''.
       (c) Exclusion From Ethanol Waiver.--Section 211(h) of the 
     Clean Air Act (42 U.S.C. 7545(h)) is amended--
       (1) by redesignating paragraph (5) as paragraph (6); and
       (2) by inserting after paragraph (4) the following:
     ``(5) Exclusion from ethanol waiver.--
       ``(A) Promulgation of regulations.--Upon notification, 
     accompanied by supporting documentation, from the Governor of 
     a State that the Reid vapor pressure limitation established 
     by paragraph (4) will increase emissions that contribute to 
     air pollution in any area in the State, the Administrator 
     shall, by regulation, apply, in lieu of the Reid vapor 
     pressure limitation established by paragraph (4), the Reid 
     vapor pressure limitation established by paragraph (1) to all 
     fuel blends containing gasoline and 10 percent denatured 
     anhydrous ethanol that are sold, offered for sale, dispensed, 
     supplied, offered for supply, transported or introduced into 
     commerce in the area during the high ozone season.
       ``(B) Deadline for promulgation.--The Administrator shall 
     promulgate regulations under subparagraph (A) not later than 
     90 days after the date of receipt of a notification from a 
     Governor under that subparagraph.
       ``(C) Effective date.--
       ``(i) In general.--With respect to an area in a State for 
     which the Governor submits a notification under subparagraph 
     (A), the regulations under that subparagraph shall take 
     effect on the later of--

       ``(I) the first day of the first high ozone season for the 
     area that begins after the date of receipt of the 
     notification; or
       ``(II) 1 year after the date of receipt of the 
     notification.

       ``(ii) Extension of effective date based on determination 
     of insufficient supply.--

       ``(I) In general.--If, after receipt of a notification with 
     respect to an area from a Governor of a State under 
     subparagraph (A), the Administrator determines, on the 
     Administrator's own motion or on petition of any person and 
     after consultation with the Secretary of Energy, that the 
     promulgation of regulations described in subparagraph (A) 
     would result in an insufficient supply of gasoline in the 
     State, the Administrator, by regulation--

       ``(aa) shall extend the effective date of the regulations 
     under clause (i) with respect to the area for not more than 1 
     year; and
       ``(bb) may renew the extension under item (aa) for two 
     additional periods, each of which shall not exceed 1 year.

       ``(II) Deadline for action on petitions.--The Administrator 
     shall act on any petition submitted under subclause (I) not 
     later than 180 days after the date of receipt of the 
     petition.''.

       (d) Survey of Renewable Fuel Market.--
       (1) Survey and report.--Not later than December 1, 2005, 
     and annually thereafter, the Administrator shall--
       (A) conduct, with respect to each conventional gasoline use 
     area and each reformulated gasoline use area in each State, a 
     survey to determine the market shares of--
       (i) conventional gasoline containing ethanol;
       (ii) reformulated gasoline containing ethanol;
       (iii) conventional gasoline containing renewable fuel; and
       (iv) reformulated gasoline containing renewable fuel; and
       (B) submit to Congress, and make publicly available, a 
     report on the results of the survey under subparagraph (A).
       (2) Recordkeeping and reporting requirements.--The 
     Administrator may require any refiner, blender, or importer 
     to keep such records and make such reports as are necessary 
     to ensure that the survey conducted under paragraph (1) is 
     accurate. The Administrator shall rely, to the extent 
     practicable, on existing reporting and recordkeeping 
     requirements to avoid duplicative requirements.
       (3) Applicable law.--Activities carried out under this 
     subsection shall be conducted in a manner designed to protect 
     confidentiality of individual responses.
       (e) Renewable Fuels Safe Harbor.--
       (1) In general.--Notwithstanding any other provision of 
     federal or state law, no renewable fuel, as defined by this 
     Act, used or intended to be used as a motor vehicle fuel, nor 
     any motor vehicle fuel containing such renewable fuel, shall 
     be deemed defective in design or manufacture by virtue of the 
     fact that it is, or contains, such a renewable fuel, if it 
     does not violate a control or prohibition imposed by the 
     Administrator under section 211 of the Clean Air Act, as 
     amended by this Act, and the manufacturer is in compliance 
     with all requests for information under section 211(b) of the 
     Clean Air Act, as amended by this Act. In the event that the 
     safe harbor under this section does not apply, the existence 
     of a design defect or manufacturing defect shall be 
     determined under otherwise applicable law.
       (2) Exceptions.--This subsection shall not apply to ethers.
       (3) Effective date.--This subsection shall be effective as 
     of the date of enactment and shall apply with respect to all 
     claims filed on or after that date.

     SEC. 820A. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND 
                   BIODIESEL PURCHASING REQUIREMENT.

       Title III of the Energy Policy Act of 1992 is amended by 
     striking section 306 (42 U.S.C. 13215) and inserting the 
     following:

     ``SEC. 306. FEDERAL AGENCY ETHANOL-BLENDED GASOLINE AND 
                   BIODIESEL PURCHASING REQUIREMENT.

       ``(a) Ethanol-Blended Gasoline.--The head of each Federal 
     agency shall ensure that, in areas in which ethanol-blended 
     gasoline is reasonably available at a generally competitive 
     price, the Federal agency purchases ethanol-blended gasoline 
     containing at least 10 percent ethanol rather than 
     nonethanol-blended gasoline, for use in vehicles used by the 
     agency that use gasoline.
       ``(b) Biodiesel.--
       ``(1) Definition of biodiesel.--In this subsection, the 
     term `biodiesel' has the meaning given the term in section 
     312(f).
       ``(2) Requirement.--The head of each Federal agency shall 
     ensure that the Federal agency purchases, for use in fueling 
     fleet vehicles

[[Page S3721]]

     that use diesel fuel used by the Federal agency at the 
     location at which fleet vehicles of the Federal agency are 
     centrally fueled, in areas in which the biodiesel-blended 
     diesel fuel described in paragraphs (A) and (B) is available 
     at a generally competitive price--
       ``(A) as of the date that is 5 years after the date of 
     enactment of this paragraph, biodiesel-blended diesel fuel 
     that contains at least 2 percent biodiesel, rather than 
     nonbiodiesel-blended diesel fuel; and
       ``(B) as of the date that is 10 years after the date of 
     enactment of this paragraph, biodiesel-blended diesel fuel 
     that contains at least 20 percent biodiesel, rather than 
     nonbiodiesel-blended diesel fuel.
       ``(3) Requirement of Federal Law.--The provisions of this 
     subsection shall not be considered a requirement of Federal 
     law for the purposes of section 312.
       ``(c) Exemption.--This section does not apply to fuel used 
     in vehicles excluded from the definition of `fleet' by 
     subparagraphs (A) through (H) of section 301(9).''.

     SEC. 820B. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE 
                   LOAN GUARANTEE PROGRAM.

       (a) Definition of Municipal Solid Waste.--In this section, 
     the term ``municipal solid waste'' has the meaning given the 
     term ``solid waste'' in section 1004 of the Solid Waste 
     Disposal Act (42 U.S.C. 6903).
       (b) Establishment of Program.--The Secretary of Energy 
     shall establish a program to provide guarantees of loans by 
     private institutions for the construction of facilities for 
     the processing and conversion of municipal solid waste into 
     fuel ethanol and other commercial byproducts.
       (c) Requirements.--The Secretary may provide a loan 
     guarantee under subsection (b) to an applicant if--
       (1) without a loan guarantee, credit is not available to 
     the applicant under reasonable terms or conditions sufficient 
     to finance the construction of a facility described in 
     subsection (b);
       (2) the prospective earning power of the applicant and the 
     character and value of the security pledged provide a 
     reasonable assurance of repayment of the loan to be 
     guaranteed in accordance with the terms of the loan; and
       (3) the loan bears interest at a rate determined by the 
     Secretary to be reasonable, taking into account the current 
     average yield on outstanding obligations of the United States 
     with remaining periods of maturity comparable to the maturity 
     of the loan.
       (d) Criteria.--In selecting recipients of loan guarantees 
     from among applicants, the Secretary shall give preference to 
     proposals that--
       (1) meet all applicable Federal and State permitting 
     requirements;
       (2) are most likely to be successful; and
       (3) are located in local markets that have the greatest 
     need for the facility because of--
       (A) the limited availability of land for waste disposal; or
       (B) a high level of demand for fuel ethanol or other 
     commercial byproducts of the facility.
       (e) Maturity.--A loan guaranteed under subsection (b) shall 
     have a maturity of not more than 20 years.
       (f) Terms and Conditions.--The loan agreement for a loan 
     guaranteed under subsection (b) shall provide that no 
     provision of the loan agreement may be amended or waived 
     without the consent of the Secretary.
       (g) Assurance of Repayment.--The Secretary shall require 
     that an applicant for a loan guarantee under subsection (b) 
     provide an assurance of repayment in the form of a 
     performance bond, insurance, collateral, or other means 
     acceptable to the Secretary in an amount equal to not less 
     than 20 percent of the amount of the loan.
       (h) Guarantee Fee.--The recipient of a loan guarantee under 
     subsection (b) shall pay the Secretary an amount determined 
     by the Secretary to be sufficient to cover the administrative 
     costs of the Secretary relating to the loan guarantee.
       (i) Full Faith and Credit.--The full faith and credit of 
     the United States is pledged to the payment of all guarantees 
     made under this section. Any such guarantee made by the 
     Secretary shall be conclusive evidence of the eligibility of 
     the loan for the guarantee with respect to principal and 
     interest. The validity of the guarantee shall be 
     incontestable in the hands of a holder of the guaranteed 
     loan.
       (j) Reports.--Until each guaranteed loan under this section 
     has been repaid in full, the Secretary shall annually submit 
     to Congress an report on the activities of the Secretary 
     under this section.
       (k) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
       (l) Termination of Authority.--The authority of the 
     Secretary to issue a loan guarantee under subsection (b) 
     terminates on the date that is 10 years after the date of 
     enactment of this Act.

            Subtitle B--Additional Fuel Efficiency Measures

     SEC. 821. FUEL EFFICIENCY OF THE FEDERAL FLEET OF 
                   AUTOMOBILES.

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

     ``Sec. 32917. Standards for executive agency automobiles

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

     SEC. 822. IDLING REDUCTION SYSTEMS IN HEAVY DUTY VEHICLES.

       Title III of the Energy Policy and Conservation Act (42 
     U.S.C. 6291 et seq.) is amended by adding at the end the 
     following:

                    ``PART K--REDUCING TRUCK IDLING

     ``SEC. 400AAA. REDUCING TRUCK IDLING.

       ``(a) Study.--Not later than 18 months after the date of 
     enactment of this section, the Secretary shall, in 
     consultation with the Secretary of Transportation, commence a 
     study to analyze the potential fuel savings resulting from 
     long duration idling of main drive engines in heavy-duty 
     vehicles.
       ``(b) Regulations.--Upon completion of the study under 
     subsection (a), the Secretary may issue regulations requiring 
     the installation of idling reduction systems on all newly 
     manufactured heavy-duty vehicles.
       ``(c) Definitions.--As used in this section:
       ``(1) The term `heavy-duty vehicle' means a vehicle that 
     has a gross vehicle weight rating greater than 8,500 pounds 
     and is powered by a diesel engine.
       ``(2) The term `idling reduction system' means a device or 
     system of devices used to reduce long duration idling of a 
     diesel engine in a vehicle.
       ``(3) The term `long duration idling' means the operation 
     of a main drive engine of a heavy-duty vehicle for a period 
     of more than 15 consecutive minutes when the main drive 
     engine is not engaged in gear, except that such term does not 
     include idling as a result of traffic congestion or other 
     impediments to the movement of a heavy-duty vehicle.
       ``(4) The term `vehicle' has the meaning given such term in 
     section 4 of title 1, United States Code.''.

     SEC. 823. CONSERVE BY BICYCLING PROGRAM.

       (a) Establishment.--The Secretary of Transportation shall 
     establish a Conserve By Bicycling pilot program that shall 
     provide for up to 10 geographically dispersed projects to 
     encourage the use of bicycles in place of motor vehicles. 
     Such projects shall use education and marketing to convert 
     motor vehicle trips to bike trips, document project results 
     and energy savings, and facilitate partnerships among 
     entities in the fields of transportation, law enforcement, 
     education, public health, environment, or energy. At least 20 
     percent of the cost of each project shall be provided from 
     State or local sources. Not later than 2 years after 
     implementation of the projects, the Secretary of 
     Transportation shall submit a report to Congress on the 
     results of the pilot program.
       (b) National Academy Study.--The Secretary of 
     Transportation shall contract with the National Academy of 
     Sciences to conduct a study on the feasibility and benefits 
     of converting motor vehicle trips to bicycle trips and to 
     issue a report, not later than 2 years after enactment of 
     this Act, on the findings of such study.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary of' Transportation 
     $5,500,000, to remain available until expended, to carry out 
     the pilot program and study pursuant to this section.

     SEC. 824. FUEL CELL VEHICLE PROGRAM.

       Not later than 1 year from date of enactment of this 
     section, the Secretary shall develop a program with 
     timetables for developing technologies to enable at least 
     100,000 hydrogen-fueled fuel cell vehicles to be available 
     for sale in the United States by 2010 and at least 2.5 
     million of such vehicles to be available by 2020 and annually 
     thereafter. The program shall also include timetables for 
     development of technologies to provide 50 million gasoline 
     equivalent gallons of hydrogen for sale in fueling stations 
     in the United States by 2010 and at least 2.5 billion 
     gasoline equivalent gallons by 2020 and annually thereafter. 
     The Secretary shall annually include a review of the progress 
     toward meeting the vehicle sales of Energy budget.

                 Subtitle C--Federal Reformulated Fuels

     SEC. 831. SHORT TITLE.

       This subtitle may be cited as the ``Federal Reformulated 
     Fuels Act of 2002''.

     SEC. 832. LEAKING UNDERGROUND STORAGE TANKS.

       (a) Use of Lust Funds for Remediation of Contamination From 
     Ether Fuel Additives.--Section 9003(h) of the Solid Waste 
     Disposal Act (42 U.S.C. 6991b(h)) is amended--

[[Page S3722]]

       (1) in paragraph (7)(A)--
       (A) by striking ``paragraphs (1) and (2) of this 
     subsection'' and inserting ``paragraphs (1), (2), and (12)''; 
     and
       (B) by inserting ``and section 9010'' before ``if''; and
       (2) by adding at the end the following:
       ``(12) Remediation of contamination from ether fuel 
     additives.--
       ``(A) In general.--The Administrator and the States may use 
     funds made available under section 9013(1) to carry out 
     corrective actions with respect to a release of methyl 
     tertiary butyl ether or other ether fuel additive that 
     presents a threat to human health, welfare, or the 
     environment.
       ``(B) Applicable authority.--Subparagraph (A) shall be 
     carried out--
       ``(i) in accordance with paragraph (2), except that a 
     release with respect to which a corrective action is carried 
     out under subparagraph (A) shall not be required to be from 
     an underground storage tank; and
       ``(ii) in the case of a State, in accordance with a 
     cooperative agreement entered into by the Administrator and 
     the State under paragraph (7).''.
       (b) Release Prevention and Compliance.--Subtitle I of the 
     Solid Waste Disposal Act (42 U.S.C. 6991 et seq.) is amended 
     by striking section 9010 and inserting the following:

     ``SEC. 9010. RELEASE PREVENTION AND COMPLIANCE.

       ``Funds made available under section 9013(2) from the 
     Leaking Underground Storage Tank Trust Fund may be used for 
     conducting inspections, or for issuing orders or bringing 
     actions under this subtitle--
       ``(1) by a State (pursuant to section 9003(h)(7)) acting 
     under--
       ``(A) a program approved under section 9004; or
       ``(B) State requirements regulating underground storage 
     tanks that are similar or identical to this subtitle, as 
     determined by the Administrator; and
       ``(2) by the Administrator, acting under this subtitle or a 
     State program approved under section 9004.

     ``SEC. 9011. BEDROCK BIOREMEDIATION.

       ``The Administrator shall establish, at an institution of 
     higher education (as defined in section 101 of the Higher 
     Education Act of 1965 (20 U.S.C. 1001)) with established 
     expertise in bioremediation of contaminated bedrock aquifers, 
     a resource center--
       ``(1) to conduct research concerning bioremediation of 
     methyl tertiary butyl ether in contaminated underground 
     aquifers, including contaminated bedrock; and
       ``(2) to provide for States a technical assistance 
     clearinghouse for information concerning innovative 
     technologies for bioremediation described in paragraph (1).

     ``SEC. 9012. SOIL REMEDIATION.

       ``The Administrator may establish a program to conduct 
     research concerning remediation of methyl tertiary butyl 
     ether contamination of soil, including granitic or volcanic 
     soil.

     ``SEC. 9013. AUTHORIZATION OF APPROPRIATIONS.

       ``In addition to amounts made available under section 
     2007(f), there are authorized to be appropriated from the 
     Leaking Underground Storage Tank Trust Fund, notwithstanding 
     section 9508(c)(1) of the Internal Revenue Code of 1986--
       ``(1) to carry out section 9003(h)(12), $200,000,000 for 
     fiscal year 2003, to remain available until expended;
       ``(2) to carry out section 9010--
       ``(A) $50,000,000 for fiscal year 2003; and
       ``(B) $30,000,000 for each of fiscal years 2004 through 
     2008;
       ``(3) to carry out section 9011--
       ``(A) $500,000 for fiscal year 2003; and
       ``(B) $300,000 for each of fiscal years 2004 through 2008; 
     and
       ``(4) to carry out section 9012--
       ``(A) $100,000 for fiscal year 2003; and
       ``(B) $50,000 for each of fiscal years 2004 through 2008.
       (c) Technical Amendments.--(1) Section 1001 of the Solid 
     Waste Disposal Act (42 U.S.C. prec. 6901) is amended by 
     striking the item relating to section 9010 and inserting the 
     following:

``Sec. 9010. Release prevention and compliance.
``Sec. 9011. Bedrock bioremediation.
``Sec. 9012. Soil remediation.
``Sec. 9013. Authorization of appropriations.''.
       (2) Section 9001(3)(A) of the Solid Waste Disposal Act (42 
     U.S.C. 6991(3)(A)) is amended by striking ``sustances'' and 
     inserting ``substances''.
       (3) Section 9003(f)(1) of the Solid Waste Disposal Act (42 
     U.S.C. 6991b(f)(1)) is amended by striking ``subsection (c) 
     and (d) of this section'' and inserting ``subsections (c) and 
     (d)''.
       (4) Section 9004(a) of the Solid Waste Disposal Act (42 
     U.S.C. 6991c(a)) is amended in the second sentence by 
     striking ``referred to'' and all that follows and inserting 
     ``referred to in subparagraph (A) or (B), or both, of section 
     9001(2).''.
       (5) Section 9005 of the Solid Waste Disposal Act (42 U.S.C. 
     6991d) is amended--
       (A) in subsection (a), by striking ``study taking'' and 
     inserting ``study, taking'';
       (B) in subsection (b)(1), by striking ``relevent'' and 
     inserting ``relevant''; and
       (C) in subsection (b)(4), by striking ``Evironmental'' and 
     inserting ``Environmental''.

     SEC. 833. AUTHORITY FOR WATER QUALITY PROTECTION FROM FUELS.

       (a) Findings.--Congress finds that--
       (1) since 1979, methyl tertiary butyl ether (referred to in 
     this section as ``MTBE'') has been used nationwide at low 
     levels in gasoline to replace lead as an octane booster or 
     anti-knocking agent;
       (2) Public Law 101-549 (commonly known as the ``Clean Air 
     Act Amendments of 1990'') (42 U.S.C. 7401 et seq.) 
     established a fuel oxygenate standard under which 
     reformulated gasoline must contain at least 2 percent oxygen 
     by weight;
       (3) at the time of the adoption of the fuel oxygen 
     standard, Congress was aware that significant use of MTBE 
     could result from the adoption of that standard, and that the 
     use of MTBE would likely be important to the cost-effective 
     implementation of that program;
       (4) Congress is aware that gasoline and its component 
     additives have leaked from storage tanks, with consequences 
     for water quality;
       (5) the fuel industry responded to the fuel oxygenate 
     standard established by Public Law 101-549 by making 
     substantial investments in--
       (A) MTBE production capacity; and
       (B) systems to deliver MTBE-containing gasoline to the 
     marketplace;
       (6) when leaked or spilled into the environment, MTBE may 
     cause serious problems of drinking water quality;
       (7) in recent years, MTBE has been detected in water 
     sources throughout the United States;
       (8) MTBE can be detected by smell and taste at low 
     concentrations;
       (9) while small quantities of MTBE can render water 
     supplies unpalatable, the precise human health effects of 
     MTBE consumption at low levels are yet unknown;
       (10) in the report entitled ``Achieving Clean Air and Clean 
     Water: The Report of the Blue Ribbon Panel on Oxygenates in 
     Gasoline'' and dated September 1999, Congress was urged--
       (A) to eliminate the fuel oxygenate standard;
       (B) to greatly reduce use of MTBE; and
       (C) to maintain the environmental performance of 
     reformulated gasoline;
       (11) Congress has--
       (A) reconsidered the relative value of MTBE in gasoline; 
     and
       (B) decided to eliminate use of MTBE as a fuel additive;
       (12) the timeline for elimination of use of MTBE as a fuel 
     additive must be established in a manner that achieves an 
     appropriate balance among the goals of--
       (A) environmental protection;
       (B) adequate energy supply; and
       (C) reasonable fuel prices; and
       (13) it is appropriate for Congress to provide some limited 
     transition assistance--
       (A) to merchant producers of MTBE who produced MTBE in 
     response to a market created by the oxygenate requirement 
     contained in the Clean Air Act; and
       (B) for the purpose of mitigating any fuel supply problems 
     that may result from elimination of a widely-used fuel 
     additive.
       (b) Purposes.--The purposes of this section are--
       (1) to eliminate use of MTBE as a fuel oxygenate; and
       (2) to provide assistance to merchant producers of MTBE in 
     making the transition from producing MTBE to producing other 
     fuel additives.
       (c) Authority for Water Quality Protection From Fuels.--
     Section 211(c) of the Clean Air Act (42 U.S.C. 7545(c)) is 
     amended--
       (1) in paragraph (1)(A)--
       (A) by inserting ``fuel or fuel additive or'' after 
     ``Administrator any''; and
       (B) by striking ``air pollution which'' and inserting ``air 
     pollution, or water pollution, that'';
       (2) in paragraph (4)(B), by inserting ``or water quality 
     protection,'' after ``emission control,''; and
       (3) by adding at the end the following:
       ``(5) Prohibition on use of mtbe.--
       ``(A) In general.--Subject to subparagraph (E), not later 
     than 4 years after the date of enactment of this paragraph, 
     the use of methyl tertiary butyl ether in motor vehicle fuel 
     in any State other than a State described in subparagraph (C) 
     is prohibited.
       ``(B) Regulations.--The Administrator shall promulgate 
     regulations to effect the prohibition in subparagraph (A).
       ``(C) States that authorize use.--A State described in this 
     subparagraph is a State that submits to the Administrator a 
     notice that the State authorizes use of methyl tertiary butyl 
     ether in motor vehicle fuel sold or used in the State.
       ``(D) Publication of notice.--The Administrator shall 
     publish in the Federal Register each notice submitted by a 
     State under subparagraph (C).
       ``(E) Trace quantities.--In carrying out subparagraph (A), 
     the Administrator may allow trace quantities of methyl 
     tertiary butyl ether, not to exceed 0.5 percent by volume, to 
     be present in motor vehicle fuel in cases that the 
     Administrator determines to be appropriate.
       ``(6) MTBE merchant producer conversion assistance.--
       ``(A) In general.--
       ``(i) Grants.--The Secretary of Energy, in consultation 
     with the Administrator, may make grants to merchant producers 
     of methyl tertiary butyl ether in the United States to assist 
     the producers in the conversion of eligible production 
     facilities described in subparagraph (C) to the production of 
     iso-octane and alkylates.
       ``(ii) Determination.--The Administrator, in consultation 
     with the Secretary of Energy, may determine that transition 
     assistance for the production of iso-octane and alkylates is 
     inconsistent with the provisions of subparagraph (B) and, on 
     that basis, may deny applications for grants authorized by 
     this provision.
       ``(B) Further grants.--The Secretary of Energy, in 
     consultation with the Administrator, may also further make 
     grants to merchant producers of MTBE in the United States to 
     assist the producers in the conversion of eligible production 
     facilities described in subparagraph (C) to the production of 
     such other fuel additives that, consistent with 211(c)--

[[Page S3723]]

       ``(i) unless the Administrator determines that such fuel 
     additives may reasonably be anticipated to endanger public 
     health or the environment;
       ``(ii) have been registered and have been tested or are 
     being tested in accordance with the requirements of this 
     section; and
       ``(iii) will contribute to replacing gasoline volumes lost 
     as a result of paragraph (5).
       ``(C) Eligible production facilities.--A production 
     facility shall be eligible to receive a grant under this 
     paragraph if the production facility--
       ``(i) is located in the United States; and
       ``(ii) produced methyl tertiary butyl ether for consumption 
     in nonattainment areas during the period--

       ``(I) beginning on the date of enactment of this paragraph; 
     and
       ``(II) ending on the effective date of the prohibition on 
     the use of methyl tertiary butyl ether under paragraph (5).

       ``(D) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out this paragraph $250,000,000 
     for each of fiscal years 2003 through 2005.''.
       (d) No Effect on Law Concerning State Authority.--The 
     amendments made by subsection (c) have no effect on the law 
     in effect on the day before the date of enactment of this Act 
     regarding the authority of States to limit the use of methyl 
     tertiary butyl ether in motor vehicle fuel.

     SEC. 834. ELIMINATION OF OXYGEN CONTENT REQUIREMENT FOR 
                   REFORMULATED GASOLINE.

       (a) Elimination.--
       (1) In general.--Section 211(k) of the Clean Air Act (42 
     U.S.C. 7545(k)) is amended--
       (A) in paragraph (2)--
       (i) in the second sentence of subparagraph (A), by striking 
     ``(including the oxygen content requirement contained in 
     subparagraph (B))'';
       (ii) by striking subparagraph (B); and
       (iii) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively;
       (B) in paragraph (3)(A), by striking clause (v);
       (C) in paragraph (7)--
       (i) in subparagraph (A)--

       (I) by striking clause (i); and
       (II) by redesignating clauses (ii) and (iii) as clauses (i) 
     and (ii), respectively; and

       (ii) in subparagraph (C)--

       (I) by striking clause (ii); and
       (II) by redesignating clause (iii) as clause (ii); and

       (2) Effective date.--The amendments made by paragraph (1) 
     take effect 270 days after the date of enactment of this Act, 
     except that such amendments shall take effect upon enactment 
     in any State that has received a waiver under section 209(b) 
     of the Clean Air Act.
       (b) Maintenance of Toxic Air Pollutant Emission 
     Reductions.--Section 211(k)(1) of the Clean Air Act (42 
     U.S.C. 7545(k)(1)) is amended--
       (1) by striking ``Within 1 year after the enactment of the 
     Clean Air Act Amendments of 1990,'' and inserting the 
     following:
       ``(A) In general.--Not later than November 15, 1991,''; and
       (2) by adding at the end the following:
       ``(B) Maintenance of toxic air pollutant emissions 
     reductions from reformulated gasoline.--
       ``(i) Definitions.--In this subparagraph the term `PADD' 
     means a Petroleum Administration for Defense District.
       ``(ii) Regulations regarding emissions of toxic air 
     pollutants.--Not later than 270 days after the date of 
     enactment of this subparagraph, the Administrator shall 
     establish, for each refinery or importer (other than a 
     refinery or importer in a State that has received a waiver 
     under section 209(b) with regard to gasoline produced for use 
     in that state), standards for toxic air pollutants from use 
     of the reformulated gasoline produced or distributed by the 
     refinery or importer that maintain the reduction of the 
     average annual aggregate emissions of toxic air pollutants 
     for reformulated gasoline produced or distributed by the 
     refinery or importer during calendar years 1999 and 2000, 
     determined on the basis of data collected by the 
     Administrator with respect to the refinery or importer.
       (iii) Standards applicable to specific refineries or 
     importers.--

       ``(I) Applicability of standards.--For any calendar year, 
     the standards applicable to a refinery or importer under 
     clause (ii) shall apply to the quantity of gasoline produced 
     or distributed by the refinery or importer in the calendar 
     year only to the extent that the quantity is less than or 
     equal to the average annual quantity of reformulated gasoline 
     produced or distributed by the refinery or importer during 
     calendar years 1999 and 2000.
       ``(II) Applicability of other standards.--For any calendar 
     year, the quantity of gasoline produced or distributed by a 
     refinery or importer that is in excess of the quantity 
     subject to subclause (I) shall be subject to standards for 
     toxic air pollutants promulgated under subparagraph (A) and 
     paragraph (3)(B).

       ``(iv) Credit program.--The Administrator shall provide for 
     the granting and use of credits for emissions of toxic air 
     pollutants in the same manner as provided in paragraph (7).
       ``(v) Regional protection of toxics reduction baselines.--

       ``(I) In general.--Not later than 60 days after the date of 
     enactment of this subparagraph, and not later than April 1 of 
     each calendar year that begins after that date of enactment, 
     the Administrator shall publish in the Federal Register a 
     report that specifies, with respect to the previous calendar 
     year--

       ``(aa) the quantity of reformulated gasoline produced that 
     is in excess of the average annual quantity of reformulated 
     gasoline produced in 1999 and 2000; and
       ``(bb) the reduction of the average annual aggregate 
     emissions of toxic air pollutants in each PADD, based on 
     retail survey data or data from other appropriate sources.

       ``(II) Effect of failure to maintain aggregate toxics 
     reductions.--If, in any calendar year, the reduction of the 
     average annual aggregate emissions of toxic air pollutants in 
     a PADD fails to meet or exceed the reduction of the average 
     annual aggregate emissions of toxic air pollutants in the 
     PADD in calendar years 1999 and 2000, the Administrator, not 
     later than 90 days after the date of publication of the 
     report for the calendar year under subclause (I), shall--

       ``(aa) identify, to the maximum extent practicable, the 
     reasons for the failure, including the sources, volumes, and 
     characteristics of reformulated gasoline that contributed to 
     the failure; and
       ``(bb) promulgate revisions to the regulations promulgated 
     under clause (ii), to take effect not earlier than 180 days 
     but not later than 270 days after the date of promulgation, 
     to provide that, notwithstanding clause (iii)(II), all 
     reformulated gasoline produced or distributed at each 
     refinery or importer shall meet the standards applicable 
     under clause (iii) not later than April 1 of the year 
     following the report in subclause (II) and for subsequent 
     years.
       ``(vi) Regulations to control hazardous air pollutants from 
     motor vehicles and motor vehicle fuels.--Not later than July 
     1, 2004, the Administrator shall promulgate final regulations 
     to control hazardous air pollutants from motor vehicles and 
     motor vehicle fuels, as provided for in section 80.1045 of 
     title 40, Code of Federal Regulations (as in effect on the 
     date of enactment of this subparagraph).''.
       (c) Consolidation in Reformulated Gasoline Regulations.--
     Not later than 180 days after the date of enactment of this 
     Act, the Administrator shall revise the reformulated gasoline 
     regulations under subpart D of part 80 of title 40, Code of 
     Federal Regulations, to consolidate the regulations 
     applicable to VOC-Control Regions 1 and 2 under section 80.41 
     of that title by eliminating the less stringent requirements 
     applicable to gasoline designated for VOC-Control Region 2 
     and instead applying the more stringent requirements 
     applicable to gasoline designated for VOC-Control Region 1.
       (d) Savings Clause.--Nothing 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.
       (e) Determination Regarding a State Petition.--Section 
     211(k) of the Clean Air Act (42 U.S.C. 7545(k)) is amended by 
     inserting after paragraph (10) the following:
       ``(11) Determination regarding a state petition.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section, not less than 30 days after enactment of this 
     paragraph the Administrator must determine the adequacy of 
     any petition received from a Governor of a State to exempt 
     gasoline sold in that State from the requirements of 
     paragraph (2)(B).
       ``(B) Approval.--If the determination in (A) is not made 
     within thirty days of enactment of this paragraph, the 
     petition shall be deemed approved.''.

     SEC. 835. PUBLIC HEALTH AND ENVIRONMENTAL IMPACTS OF FUELS 
                   AND FUEL ADDITIVES.

       Section 211(b) of the Clean Air Act (42 U.S.C. 7545(b)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``may also'' and inserting ``shall, on a 
     regular basis,''; and
       (B) by striking subparagraph (A) and inserting the 
     following:
       ``(A) to conduct tests to determine potential public health 
     and environmental effects of the fuel or additive (including 
     carcinogenic, teratogenic, or mutagenic effects); and''; and
       (2) by adding at the end the following:
       ``(4) Study on certain fuel additives and blendstocks.--
       ``(A) In general.--Not later than 2 years after the date of 
     enactment of this paragraph, the Administrator shall--
       ``(i) conduct a study on the effects on public health, air 
     quality, and water resources of increased use of, and the 
     feasibility of using as substitutes for methyl tertiary butyl 
     ether in gasoline--

       ``(I) ethyl tertiary butyl ether;
       ``(II) tertiary amyl methyl ether;
       ``(III) di-isopropyl ether;
       ``(IV) tertiary butyl alcohol;
       ``(V) other ethers and heavy alcohols, as determined by 
     then Administrator;
       ``(VI) ethanol;
       ``(VII) iso-octane; and
       ``(VIII) alkylates; and

       ``(ii) conduct a study on the effects on public health, air 
     quality, and water resources of the adjustment for ethanol-
     blended reformulated gasoline to the VOC performance 
     requirements otherwise applicable under sections 211(k)(1) 
     and 211(k)(3) of the Clean Air Act.
       ``(iii) submit to the Committee on Environment and Public 
     Works of the Senate and the Committee on Energy and Commerce 
     of the House of Representatives a report describing the 
     results of these studies.
       ``(B) Contracts for study.--In carrying out this paragraph, 
     the Administrator may enter into one or more contracts with 
     nongovernmental entities including but not limited to 
     National Energy Laboratories and institutions of higher 
     education (as defined in section 101 of the Higher Education 
     Act of 1965 (20 U.S.C. 1001)).''.

     SEC. 836. ANALYSES OF MOTOR VEHICLE FUEL CHANGES.

       Section 211 of the Clean Air Act (42 U.S.C. 7545) (as 
     amended by section 820(a)) is amended by inserting after 
     subsection (o) the following:

[[Page S3724]]

       ``(p) Analyses of Motor Vehicle Fuel Changes and Emissions 
     Model.--
       ``(1) Anti-backsliding analysis.--
       ``(A) Draft analysis.--Not later than 4 years after the 
     date of enactment of this paragraph, the Administrator shall 
     publish for public comment a draft analysis of the changes in 
     emissions of air pollutants and air quality due to the use of 
     motor vehicle fuel and fuel additives resulting from 
     implementation of the amendments made by the Federal 
     Reformulated Fuels Act of 2002.
       ``(B) Final analysis.--After providing a reasonable 
     opportunity for comment but not later than 5 years after the 
     date of enactment of this paragraph, the Administrator shall 
     publish the analysis in final form.
       ``(2) Emissions model.--For the purposes of this 
     subsection, as soon as the necessary data are available, the 
     Administrator shall develop and finalize an emissions model 
     that reasonably reflects the effects of gasoline 
     characteristics or components on emissions from vehicles in 
     the motor vehicle fleet during calendar year 2005.''.

     SEC. 837. ADDITIONAL OPT-IN AREAS UNDER REFORMULATED GASOLINE 
                   PROGRAM.

       Section 211(k)(6) of the Clean Air Act (42 U.S.C. 
     7545(k)(6)) is amended--
       (1) by striking ``(6) Opt-in areas.--(A) Upon'' and 
     inserting the following:
       ``(6) Opt-in areas.--
       ``(A) Classified areas.--
       ``(i) In general.--Upon'';
       (2) in subparagraph (B), by striking ``(B) If'' and 
     inserting the following:
       ``(ii) Effect of insufficient domestic capacity to produce 
     reformulated gasoline.--If'';
       (3) in subparagraph (A)(ii) (as redesignated by paragraph 
     (2))--
       (A) in the first sentence, by striking ``subparagraph (A)'' 
     and inserting ``clause (i)''; and
       (B) in the second sentence, by striking ``this paragraph'' 
     and inserting ``this subparagraph''; and
       (4) by adding at the end the following:
       ``(B) Ozone transport region.--
       ``(i) Application of prohibition.--

       ``(I) In general.--In addition to the provisions of 
     subparagraph (A), upon the application of the Governor of a 
     State in the ozone transport region established by section 
     184(a), the Administrator, not later than 180 days after the 
     date of receipt of the application, shall apply the 
     prohibition specified in paragraph (5) to any area in the 
     State (other than an area classified as a marginal, moderate, 
     serious, or severe ozone nonattainment area under subpart 2 
     of part D of title I) unless the Administrator determines 
     under clause (iii) that there is insufficient capacity to 
     supply reformulated gasoline.
       ``(II) Publication of application.--As soon as practicable 
     after the date of receipt of an application under subclause 
     (I), the Administrator shall publish the application in the 
     Federal Register.

       ``(ii) Period of applicability.--Under clause (i), the 
     prohibition specified in paragraph (5) shall apply in a 
     State--

       ``(I) commencing as soon as practicable but not later than 
     2 years after the date of approval by the Administrator of 
     the application of the Governor of the State; and
       ``(II) ending not earlier than 4 years after the 
     commencement date determined under subclause (I).

       ``(iii) Extension of commencement date based on 
     insufficient capacity.--

       ``(I) In general.--If, after receipt of an application from 
     a Governor of a State under clause (i), the Administrator 
     determines, on the Administrator's own motion or on petition 
     of any person, after consultation with the Secretary of 
     Energy, that there is insufficient capacity to supply 
     reformulated gasoline, the Administrator, by regulation--

       ``(aa) shall extend the commencement date with respect to 
     the State under clause (ii)(I) for not more than 1 year; and
       ``(bb) may renew the extension under item (aa) for two 
     additional periods, each of which shall not exceed 1 year.

       ``(II) Deadline for action on petitions.--The Administrator 
     shall act on any petition submitted under subclause (I) not 
     later than 180 days after the date of receipt of the 
     petition.''.

     SEC. 838. FEDERAL ENFORCEMENT OF STATE FUELS REQUIREMENTS.

       Section 211(c)(4)(C) of the Clean Air Act (42 U.S.C. 
     7545(c)(4)(C)) is amended--
       (1) by striking ``(C) A State'' and inserting the 
     following:
       ``(C) Authority of state to control fuels and fuel 
     additives for reasons of necessity.--
       ``(i) In general.--A State''; and
       (2) by adding at the end the following:
       ``(ii) Enforcement by the administrator.--In any case in 
     which a State prescribes and enforces a control or 
     prohibition under clause (i), the Administrator, at the 
     request of the State, shall enforce the control or 
     prohibition as if the control or prohibition had been adopted 
     under the other provisions of this section.''.

     SEC. 839. FUEL SYSTEM REQUIREMENTS HARMONIZATION STUDY.

       (a) Study.--
       (1) In general.--The Administrator of the Environmental 
     Protection Agency and the Secretary of Energy shall jointly 
     conduct a study of Federal, State, and local requirements 
     concerning motor vehicle fuels, including--
       (A) requirements relating to reformulated gasoline, 
     volatility (measured in Reid vapor pressure), oxygenated 
     fuel, and diesel fuel; and
       (B) other requirements that vary from State to State, 
     region to region, or locality to locality.
       (2) Required elements.--The study shall assess--
       (A) the effect of the variety of requirements described in 
     paragraph (1) on the supply, quality, and price of motor 
     vehicle fuels available to the consumer;
       (B) the effect of the requirements described in paragraph 
     (1) on achievement of--
       (i) national, regional, and local air quality standards and 
     goals; and
       (ii) related environmental and public health protection 
     standards and goals;
       (C) the effect of Federal, State, and local motor vehicle 
     fuel regulations, including multiple motor vehicle fuel 
     requirements, on--
       (i) domestic refineries;
       (ii) the fuel distribution system; and
       (iii) industry investment in new capacity;
       (D) the effect of the requirements described in paragraph 
     (1) on emissions from vehicles, refineries, and fuel handling 
     facilities;
       (E) the feasibility of developing national or regional 
     motor vehicle fuel slates for the 48 contiguous States that, 
     while protecting and improving air quality at the national, 
     regional, and local levels, could--
       (i) enhance flexibility in the fuel distribution 
     infrastructure and improve fuel fungibility;
       (ii) reduce price volatility and costs to consumers and 
     producers;
       (iii) provide increased liquidity to the gasoline market; 
     and
       (iv) enhance fuel quality, consistency, and supply; and
       (F) the feasibility of providing incentives, and the need 
     for the development of national standards necessary, to 
     promote cleaner burning motor vehicle fuel.
       (b) Report.--
       (1) In general.--Not later than June 1, 2006, the 
     Administrator of the Environmental Protection Agency and the 
     Secretary of Energy shall submit to Congress a report on the 
     results of the study conducted under subsection (a).
       (2) Recommendations.--
       (A) In general.--The report shall contain recommendations 
     for legislative and administrative actions that may be 
     taken--
       (i) to improve air quality;
       (ii) to reduce costs to consumers and producers; and
       (iii) to increase supply liquidity.
       (B) Required considerations.--The recommendations under 
     subparagraph (A) shall take into account the need to provide 
     advance notice of required modifications to refinery and fuel 
     distribution systems in order to ensure an adequate supply of 
     motor vehicle fuel in all States.
       (3) Consultation.--In developing the report, the 
     Administrator of the Environmental Protection Agency and the 
     Secretary of Energy shall consult with--
       (A) the Governors of the States;
       (B) automobile manufacturers;
       (C) motor vehicle fuel producers and distributors; and
       (D) the public.

     SEC. 840. REVIEW OF FEDERAL PROCUREMENT INITIATIVES RELATING 
                   TO USE OF RECYCLED PRODUCTS AND FLEET AND 
                   TRANSPORTATION EFFICIENCY.

       Not later than 180 days after the date of enactment of this 
     Act, the Administrator of General Services shall submit to 
     Congress a report that details efforts by each Federal agency 
     to implement the procurement policies specified in Executive 
     Order No. 13101 (63 Fed. Reg. 49643; relating to governmental 
     use of recycled products) and Executive Order No. 13149 (65 
     Fed. Reg. 24607; relating to Federal fleet and transportation 
     efficiency).

   TITLE IX--ENERGY EFFICIENCY AND ASSISTANCE TO LOW INCOME CONSUMERS

      Subtitle A--Low Income Assistance and State Energy Programs

     SEC. 901. INCREASED FUNDING FOR LIHEAP, WEATHERIZATION 
                   ASSISTANCE, AND STATE ENERGY GRANTS.

       (a) LIHEAP.--(1) Section 2602(b) of the Low-Income Home 
     Energy Assistance Act of 1981 (42 U.S.C. 8621(b)) is amended 
     by striking the first sentence and inserting the following: 
     ``There are authorized to be appropriated to carry out the 
     provisions of this title (other than section 2607A), 
     $3,400,000,000 for each of fiscal years 2003 through 2005.''.
       (2) Section 2602(e) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8621(e)) is amended by 
     striking ``$600,000,000'' and inserting ``$1,000,000,000''.
       (3) Section 2609A(a) of the Low-Income Energy Assistance 
     Act of 1981 (42 U.S.C. 8628a(a)) is amended by striking ``not 
     more than $300,000'' and inserting: ``not more than 
     $750,000''.
       (b) Weatherization Assistance.--Section 422 of the Energy 
     Conservation and Production Act (42 U.S.C. 6872) is amended 
     by striking ``for fiscal years 1999 through 2003 such sums as 
     may be necessary.'' and inserting: ``$325,000,000 for fiscal 
     year 2003, $400,000,000 for fiscal year 2004, and 
     $500,000,000 for fiscal year 2005.''.

     SEC. 902. STATE ENERGY PROGRAMS.

       (a) State Energy Conservation Plans.--Section 362 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6322)) is 
     amended by adding at the end the following:
       ``(g) The Secretary shall, at least once every 3 years, 
     invite the Governor of each State to review and, if 
     necessary, revise the energy conservation plan of the State 
     submitted under subsection (b) or (e). Such reviews should 
     consider the energy conservation plans of other States within 
     the region, and identify opportunities and actions that may 
     be carried out in pursuit of common energy conservation 
     goals.''.
       (b) State Energy Conservation Goals.--Section 364 of the 
     Energy Policy and Conservation Act (42 U.S.C. 6324) is 
     amended to read as follows:
       ``Sec. 364. Each State energy conservation plan with 
     respect to which assistance is made available under this part 
     on or after the date of enactment of the Energy Policy Act of 
     2002 shall contain a goal, consisting of an improvement of 25 
     percent or more in the efficiency of use of energy in the 
     State concerned in calendar year

[[Page S3725]]

     2010 as compared to calendar year 1990, and may contain 
     interim goals.''.
       (c) State Energy Conservation Grants.--Section 365(f) of 
     the Energy Policy and Conservation Act (42 U.S.C. 6325(f)) is 
     amended by striking ``for fiscal years 1999 through 2003 such 
     sums as may be necessary.'' and inserting: ``$100,000,000 for 
     each of fiscal years 2003 and 2004; $125,000,000 for fiscal 
     year 2005; and such sums as may be necessary for each fiscal 
     year thereafter.''.

     SEC. 903. ENERGY EFFICIENT SCHOOLS.

       (a) Establishment.--There is established in the Department 
     of Energy the High Performance Schools Program (in this 
     section referred to as the ``Program'').
       (b) Grants.--The Secretary of Energy may make grants to a 
     State energy office--
       (1) to assist school districts in the State to improve the 
     energy efficiency of school buildings;
       (2) to administer the Program; and
       (3) to promote participation in the Program.
       (c) Grants To Assist School Districts.--The Secretary shall 
     condition grants under subsection (b)(1) on the State energy 
     office using the grants to assist school districts that have 
     demonstrated--
       (1) a need for the grants to build additional school 
     buildings to meet increasing elementary or secondary 
     enrollments or to renovate existing school buildings; and
       (2) a commitment to use the grant funds to develop high 
     performance school buildings in accordance with a plan that 
     the State energy office, in consultation with the State 
     educational agency, has determined is feasible and 
     appropriate to achieve the purposes for which the grant is 
     made.
       (d) Grants for Administration.--Grants under subsection 
     (b)(2) shall be used to--
       (1) evaluate compliance by school districts with 
     requirements of this section;
       (2) distribute information and materials to clearly define 
     and promote the development of high performance school 
     buildings for both new and existing facilities;
       (3) organize and conduct programs for school board members, 
     school personnel, architects, engineers, and others to 
     advance the concepts of high performance school buildings;
       (4) obtain technical services and assistance in planning 
     and designing high performance school buildings; or
       (5) collect and monitor data and information pertaining to 
     the high performance school building projects.
       (e) Grants To Promote Participation.--Grants under 
     subsection (b)(3) shall be used for promotional and marketing 
     activities, including facilitating private and public 
     financing, promoting the use of energy savings performance 
     contracts, working with school administrations, students, and 
     communities, and coordinating public benefit programs.
       (f) Supplementing Grant Funds.--The State energy office 
     shall encourage qualifying school districts to supplement 
     funds awarded pursuant to this section with funds from other 
     sources in the implementation of their plans.
       (g) Allocations.--Except as provided in subsection (h), 
     funds appropriated to carry out this section shall be 
     allocated as follows:
       (1) 70 percent shall be used to make grants under 
     subsection (b)(1).
       (2) 15 percent shall be used to make grants under 
     subsection (b)(2).
       (3) 15 percent shall be used to make grants under 
     subsection (b)(3).
       (h) Other Funds.--The Secretary of Energy may retain an 
     amount, not to exceed $300,000 per year, to assist State 
     energy offices in coordinating and implementing the Program. 
     Such funds may be used to develop reference materials to 
     further define the principles and criteria to achieve high 
     performance school buildings.
       (i) Authorization of Appropriations.--For grants under 
     subsection (b) there are authorized to be appropriated--
       (1) $200,000,000 for fiscal year 2003;
       (2) $210,000,000 for fiscal year 2004;
       (3) $220,000,000 for fiscal year 2005;
       (4) $230,000,000 for fiscal year 2006; and
       (5) such sums as may be necessary for fiscal year 2007 and 
     each fiscal year thereafter through fiscal year 2012.
       (j) Definitions.--For purposes of this section:
       (1) High performance school building.--The term ``high 
     performance school building'' means a school building that, 
     in its design, construction, operation, and maintenance--
       (A) maximizes use of renewable energy and energy-efficient 
     technologies and systems;
       (B) is cost-effective on a life-cycle basis;
       (C) achieves either--
       (i) the applicable Energy Star building energy performance 
     ratings; or
       (ii) energy consumption levels at least 30 percent below 
     those of the most recent version of ASHRAE Standard 90.1;
       (D) uses affordable, environmentally preferable, and 
     durable materials;
       (E) enhances indoor environmental quality;
       (F) protects and conserves water; and
       (G) optimizes site potential.
       (2) Renewable energy.--The term ``renewable energy'' means 
     energy produced by solar, wind, biomass, ocean, geothermal, 
     or hydroelectric power.
       (3) School.--The term ``school'' means--
       (A) an ``elementary school'' as that term is defined in 
     section 14101(14) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 8801(14)),
       (B) a ``secondary school'' as that term is defined in 
     section 14101(25) of the Elementary and Secondary Education 
     Act of 1965 (20 U.S.C. 8801(25)), or
       (C) an elementary or secondary Indian school funded by the 
     Bureau of Indian Affairs.
       (4) State educational agency.--The term ``State educational 
     agency'' has the same meaning given such term in section 
     14101(28) of the Elementary and Secondary Education Act of 
     1965 (20 U.S.C. 8801(28)).
       (5) State energy office.--The term ``State energy office'' 
     means the State agency responsible for developing State 
     energy conservation plans under section 362 of the Energy 
     Policy and Conservation Act (42 U.S.C. 6322), or, if no such 
     agency exists, a State agency designated by the Governor of 
     the State.

     SEC. 904. LOW INCOME COMMUNITY ENERGY EFFICIENCY PILOT 
                   PROGRAM.

       (a) Grants.--The Secretary of Energy is authorized to make 
     grants to units of local government, private, non-profit 
     community development organizations, and Indian tribe 
     economic development entities to improve energy efficiency, 
     identify and develop alternative renewable and distributed 
     energy supplies, and increase energy conservation in low 
     income rural and urban communities.
       (b) Purpose of Grants.--The Secretary may make grants on a 
     competitive basis for--
       (1) investments that develop alternative renewable and 
     distributed energy supplies;
       (2) energy efficiency projects and energy conservation 
     programs;
       (3) studies and other activities that improve energy 
     efficiency in low income rural and urban communities;
       (4) planning and development assistance for increasing the 
     energy efficiency of buildings and facilities; and
       (5) technical and financial assistance to local government 
     and private entities on developing new renewable and 
     distributed sources of power or combined heat and power 
     generation.
       (c) Definition.--For purposes of this section, the term 
     ``Indian tribe'' means any Indian tribe, band, nation, or 
     other organized group or community, including any Alaskan 
     Native village or regional or village corporation as defined 
     in or established pursuant to the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1601 et seq.), which is recognized 
     as eligible for the special programs and services provided by 
     the United States to Indians because of their status as 
     Indians.
       (d) Authorization of Appropriations.--For the purposes of 
     this section there are authorized to be appropriated to the 
     Secretary of Energy an amount not to exceed $20,000,000 for 
     fiscal year 2003 and each fiscal year thereafter through 
     fiscal year 2005.

     SEC. 905. ENERGY EFFICIENT APPLIANCE REBATE PROGRAMS.

       (a) Definitions.--In this section:
       (1) Eligible state.--The term ``eligible State'' means a 
     State that meets the requirements of subsection (b).
       (2) Energy star program.--The term ``Energy Star program'' 
     means the program established by section 324A of the Energy 
     Policy and Conservation Act.
       (3) Residential energy star product.--The term 
     ``residential Energy Star product'' means a product for a 
     residence that is rated for energy efficiency under the 
     Energy Star program.
       (4) State energy office.--The term ``State energy office'' 
     means the State agency responsible for developing State 
     energy conservation plans under section 362 of the Energy 
     Policy and Conservation Act (42 U.S.C. 6322).
       (5) State program.--The term ``State program'' means a 
     State energy efficient appliance rebate program described in 
     subsection (b)(1).
       (b) Eligible States.--A State shall be eligible to receive 
     an allocation under subsection (c) if the State--
       (1) establishes (or has established) a State energy 
     efficient appliance rebate program to provide rebates to 
     residential consumers for the purchase of residential Energy 
     Star products to replace used appliances of the same type;
       (2) submits an application for the allocation at such time, 
     in such form, and containing such information as the 
     Secretary may require; and
       (3) provides assurances satisfactory to the Secretary that 
     the State will use the allocation to supplement, but not 
     supplant, funds made available to carry out the State 
     program.
       (c) Amount of Allocations.--
       (1) In general.--Subject to paragraph (2), for each fiscal 
     year, the Secretary shall allocate to the State energy office 
     of each eligible State to carry out subsection (d) an amount 
     equal to the product obtained by multiplying the amount made 
     available under subsection (e) for the fiscal year by the 
     ratio that the population of the State in the most recent 
     calendar year for which data are available bears to the total 
     population of all eligible States in that calendar year.
       (2) Minimum allocations.--For each fiscal year, the amounts 
     allocated under this subsection shall be adjusted 
     proportionately so that no eligible State is allocated a sum 
     that is less than an amount determined by the Secretary.
       (d) Use of Allocated Funds.--The allocation to a State 
     energy office under subsection (c) may be used to pay up to 
     50 percent of the cost of establishing and carrying out a 
     State program.
       (e) Issuance of Rebates.--Rebates may be provided to 
     residential consumers that meet the requirements of the State 
     program. The amount of a rebate shall be determined by the 
     State energy office, taking into consideration--
       (1) the amount of the allocation to the State energy office 
     under subsection (c);
       (2) the amount of any Federal or State tax incentive 
     available for the purchase of the residential Energy Star 
     product; and
       (3) the difference between the cost of the residential 
     Energy Star product and the cost of an appliance that is not 
     a residential Energy Star product, but is of the same type 
     as, and is the nearest capacity, performance, and other 
     relevant characteristics (as determined by the State energy 
     office) to the residential Energy Star product.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section such sums as are 
     necessary for fiscal year 2003 through fiscal year 2012.

[[Page S3726]]

                 Subtitle B--Federal Energy Efficiency

     SEC. 911. ENERGY MANAGEMENT REQUIREMENTS.

       (a) Energy Reduction Goals.--Section 543(a)(1) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8253(a)(1)) is amended to read as follows:
       ``(1) Subject to paragraph (2), each agency shall apply 
     energy conservation measures to, and shall improve the design 
     for the construction of, the Federal buildings of the agency 
     (including each industrial or laboratory facility) so that 
     the energy consumption per gross square foot of the Federal 
     buildings of the agency in fiscal years 2002 through 2011 is 
     reduced, as compared with the energy consumption per gross 
     square foot of the Federal buildings of the agency in fiscal 
     year 2000, by the percentage specified in the following 
     table:

  ``Fiscal Year                                    Percentage reduction
    2002............................................................ 2 
    2003............................................................ 4 
    2004............................................................ 6 
    2005............................................................ 8 
    2006............................................................10 
    2007............................................................12 
    2008............................................................14 
    2009............................................................16 
    2010............................................................18 
    2011.........................................................20.''.
       (b) Review and Revision of Energy Performance 
     Requirement.--Section 543(a) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(a)) is further 
     amended by adding at the end the following:
       ``(3) Not later than December 31, 2010, the Secretary shall 
     review the results of the implementation of the energy 
     performance requirement established under paragraph (1) and 
     submit to Congress recommendations concerning energy 
     performance requirements for calendar years 2012 through 
     2021.''.
       (c) Exclusions.--Section 543(c)(1) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(c)(1)) is amended to 
     read as follows:
       ``(1)(A) An agency may exclude, from the energy performance 
     requirement for a calendar year established under subsection 
     (a) and the energy management requirement established under 
     subsection (b), any Federal building or collection of Federal 
     buildings, if the head of the agency finds that--
       ``(i) compliance with those requirements would be 
     impracticable;
       ``(ii) the agency has completed and submitted all federally 
     required energy management reports;
       ``(iii) the agency has achieved compliance with the energy 
     efficiency requirements of this Act, the Energy Policy Act of 
     1992, Executives Orders, and other Federal law; and
       ``(iv) the agency has implemented all practicable, life-
     cycle cost-effective projects with respect to the Federal 
     building or collection of Federal buildings to be excluded.
       ``(B) A finding of impracticability under subparagraph 
     (A)(i) shall be based on--
       ``(i) the energy intensiveness of activities carried out in 
     the Federal building or collection of Federal buildings; or
       ``(ii) the fact that the Federal building or collection of 
     Federal buildings is used in the performance of a national 
     security function.''.
       (d) Review by Secretary.--Section 543(c)(2) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8253(c)(2)) is 
     amended--
       (1) by striking ``impracticability standards'' and 
     inserting ``standards for exclusion''; and
       (2) by striking ``a finding of impracticability'' and 
     inserting ``the exclusion''.
       (e) Criteria.--Section 543(c) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8253(c)) is further 
     amended by adding at the end the following:
       ``(3) Not later than 180 days after the date of enactment 
     of this paragraph, the Secretary shall issue guidelines that 
     establish criteria for exclusions under paragraph (1).''.
       (f) Reports.--Section 548(b) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8258(b)) is amended--
       (1) in the subsection heading, by inserting ``The President 
     and'' before ``Congress''; and
       (2) by inserting ``President and'' before ``Congress''.
       (g) Conforming Amendment.--Section 550(d) of the National 
     Energy Conservation Policy Act (42 U.S.C. 8258b(d)) is 
     amended in the second sentence by striking ``the 20 percent 
     reduction goal established under section 543(a) of the 
     National Energy Conservation Policy Act (42 U.S.C. 
     8253(a)).'' and inserting ``each of the energy reduction 
     goals established under section 543(a).''.

     SEC. 912. ENERGY USE MEASUREMENT AND ACCOUNTABILITY.

       Section 543 of the National Energy Conservation Policy Act 
     (42 U.S.C. 8253) is further amended by adding at the end the 
     following:
       ``(e) Metering of Energy Use.--
       ``(1) Deadline.--By October 1, 2004, all Federal buildings 
     shall, for the purposes of efficient use of energy and 
     reduction in the cost of electricity used in such buildings, 
     be metered or submetered in accordance with guidelines 
     established by the Secretary under paragraph (2). Each agency 
     shall use, to the maximum extent practicable, advanced meters 
     or advanced metering devices that provide data at least daily 
     and that measure at least hourly consumption of electricity 
     in the Federal buildings of the agency. Such data shall be 
     incorporated into existing Federal energy tracking systems 
     and made available to Federal facility energy managers.
       ``(2) Guidelines.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Secretary, in 
     consultation with the Department of Defense, the General 
     Services Administration and representatives from the metering 
     industry, utility industry, energy services industry, energy 
     efficiency industry, national laboratories, universities and 
     Federal facility energy managers, shall establish guidelines 
     for agencies to carry out paragraph (1).
       ``(B) Requirements for guidelines.--The guidelines shall--
       ``(i) take into consideration--

       ``(I) the cost of metering and submetering and the reduced 
     cost of operation and maintenance expected to result from 
     metering and submetering;
       ``(II) the extent to which metering and submetering are 
     expected to result in increased potential for energy 
     management, increased potential for energy savings and energy 
     efficiency improvement, and cost and energy savings due to 
     utility contract aggregation; and
       ``(III) the measurement and verification protocols of the 
     Department of Energy;

       ``(ii) include recommendations concerning the amount of 
     funds and the number of trained personnel necessary to gather 
     and use the metering information to track and reduce energy 
     use;
       ``(iii) establish one or more dates, not later than 1 year 
     after the date of issuance of the guidelines, on which the 
     requirements specified in paragraph (1) shall take effect; 
     and
       ``(iv) establish exclusions from the requirements specified 
     in paragraph (1) based on the de minimus quantity of energy 
     use of a Federal building, industrial process, or structure.
       ``(3) Plan.--No later than 6 months after the date 
     guidelines are established under paragraph (2), in a report 
     submitted by the agency under section 548(a), each agency 
     shall submit to the Secretary a plan describing how the 
     agency will implement the requirements of paragraph (1), 
     including (A) how the agency will designate personnel 
     primarily responsible for achieving the requirements and (B) 
     demonstration by the agency, complete with documentation, of 
     any finding that advanced meters or advanced metering 
     devices, as defined in paragraph (1), are not practicable.''.

     SEC. 913. FEDERAL BUILDING PERFORMANCE STANDARDS.

       (a) Revised Standards.--Section 305(a) of the Energy 
     Conservation and Production Act (42 U.S.C. 6834(a)) is 
     amended--
       (1) in paragraph (2)(A), by striking ``CABO Model Energy 
     Code, 1992'' and inserting ``the 2000 International Energy 
     Conservation Code''; and
       (2) by adding at the end the following:
       ``(3) Revised federal building energy efficiency 
     performance standards.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this paragraph, the Secretary of Energy shall 
     establish, by rule, revised Federal building energy 
     efficiency performance standards that require that, if cost-
     effective--
       ``(i) new commercial buildings and multifamily high rise 
     residential buildings be constructed so as to achieve the 
     applicable Energy Star building energy performance ratings or 
     energy consumption levels at least 30 percent below those of 
     the most recent ASHRAE Standard 90.1, whichever results in 
     the greater increase in energy efficiency;
       ``(ii) new residential buildings (other than those 
     described in clause (i)) be constructed so as to achieve the 
     applicable Energy Star building energy performance ratings or 
     achieve energy consumption levels at least 30 percent below 
     the requirements of the most recent version of the 
     International Energy Conservation Code, whichever results in 
     the greater increase in energy efficiency; and
       ``(iii) sustainable design principles are applied to the 
     siting, design, and construction of all new and replacement 
     buildings.
       ``(B) Additional revisions.--Not later than 1 year after 
     the date of approval of amendments to ASHRAE Standard 90.1 or 
     the 2000 International Energy Conservation Code, the 
     Secretary of Energy shall determine, based on the cost-
     effectiveness of the requirements under the amendments, 
     whether the revised standards established under this 
     paragraph should be updated to reflect the amendments.
       ``(C) Statement on compliance of new buildings.--In the 
     budget request of the Federal agency for each fiscal year and 
     each report submitted by the Federal agency under section 
     548(a) of the National Energy Conservation Policy Act (42 
     U.S.C. 8258(a)), the head of each Federal agency shall 
     include--
       ``(i) a list of all new Federal buildings of the Federal 
     agency; and
       ``(ii) a statement concerning whether the Federal buildings 
     meet or exceed the revised standards established under this 
     paragraph, including a monitoring and commissioning report 
     that is in compliance with the measurement and verification 
     protocols of the Department of Energy.
       ``(D) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this paragraph and to implement the revised 
     standards established under this paragraph.''.
       (b) Energy Labeling Program.--Section 305(a) of the Energy 
     Conservation and Production Act (42 U.S.C. 6834(a)) is 
     further amended by adding at the end the following:
       ``(e) Energy Labeling Program.--The Secretary of Energy, in 
     cooperation with the Administrator of the Environmental 
     Protection Agency, shall develop an energy labeling program 
     for new Federal buildings that exceed the revised standards 
     established under subsection (a)(3) by 15 percent or more.''.

     SEC. 914. PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

       (a) Requirements.--Part 3 of title V of the National Energy 
     Conservation Policy Act is amended by adding at the end the 
     following:

     ``SEC. 552. FEDERAL PROCUREMENT OF ENERGY EFFICIENT PRODUCTS.

       ``(a) Definitions.--In this section:
       ``(1) Energy star product.--The term `Energy Star product' 
     means a product that is rated

[[Page S3727]]

     for energy efficiency under an Energy Star program.
       ``(2) Energy star program.--The term `Energy Star program' 
     means the program established by section 324A of the Energy 
     Policy and Conservation Act.
       ``(3) Executive agency.--The term `executive agency' has 
     the meaning given the term in section 4 of the Office of 
     Federal Procurement Policy Act (41 U.S.C. 403).
       ``(4) FEMP designated product.--The term `FEMP designated 
     product' means a product that is designated under the Federal 
     Energy Management Program of the Department of Energy as 
     being among the highest 25 percent of equivalent products for 
     energy efficiency.
       ``(b) Procurement of Energy Efficient Products.--
       ``(1) Requirement.--To meet the requirements of an 
     executive agency for an energy consuming product, the head of 
     the executive agency shall, except as provided in paragraph 
     (2), procure--
       ``(A) an Energy Star product; or
       ``(B) a FEMP designated product.
       ``(2) Exceptions.--The head of an executive agency is not 
     required to procure an Energy Star product or FEMP designated 
     product under paragraph (1) if--
       ``(A) an Energy Star product or FEMP designated product is 
     not cost effective over the life cycle of the product; or
       ``(B) no Energy Star product or FEMP designated product is 
     reasonably available that meets the requirements of the 
     executive agency.
       ``(3) Procurement planning.--The head of an executive 
     agency shall incorporate into the specifications for all 
     procurements involving energy consuming products and systems, 
     and into the factors for the evaluation of offers received 
     for the procurement, criteria for energy efficiency that are 
     consistent with the criteria used for rating Energy Star 
     products and for rating FEMP designated products.
       ``(c) Listing of Energy Efficient Products in Federal 
     Catalogs.--Energy Star and FEMP designated products shall be 
     clearly identified and prominently displayed in any inventory 
     or listing of products by the General Services Administration 
     or the Defense Logistics Agency.
       (b) Conforming Amendment.--The table of contents in section 
     1(b) of the National Energy Conservation Policy Act (42 
     U.S.C. 8201 note) is amended by inserting after the item 
     relating to section 551 the following:

``Sec. 552. Federal Government procurement of energy efficient 
              products.''
       (c) Regulations.--Not later than 180 days after the 
     effective date specified in subsection (f), the Secretary of 
     Energy shall issue guidelines to carry out section 552 of the 
     National Energy Conservation Policy Act (as added by 
     subsection (a)).
       (d) Designation of Energy Star Products.--The Administrator 
     of the Environmental Protection Agency and the Secretary of 
     Energy shall expedite the process of designating products as 
     Energy Star products (as defined in section 552 of the 
     National Energy Conservation Policy Act (as added by 
     subsection (a)).
       (e) Designation of Electric Motors.--In the case of 
     electric motors of 1 to 500 horsepower, agencies shall select 
     only premium efficient motors that meet a standard designated 
     by the Secretary. The Secretary shall designate such a 
     standard within 120 days of the enactment of this paragraph, 
     after considering the recommendations of associated electric 
     motor manufacturers and energy efficiency groups.
       (f) Effective Date.--Subsection (a) and the amendment made 
     by that subsection take effect on the date that is 180 days 
     after the date of enactment of this Act.

     SEC. 915. REPEAL OF ENERGY SAVINGS PERFORMANCE CONTRACT 
                   SUNSET.

       Section 801(c) of the National Energy Conservation Policy 
     Act (42 U.S.C. 8287(c)) is repealed.

     SEC. 916. ENERGY SAVINGS PERFORMANCE CONTRACT DEFINITIONS.

       (a) Energy Savings.--Section 804(2) of the National Energy 
     Conservation Policy Act (42 U.S.C. 8287c(2)) is amended to 
     read as follows:
       ``(2) The term `energy savings' means a reduction in the 
     cost of energy or water, from a base cost established through 
     a methodology set forth in the contract, used in an existing 
     federally owned building or buildings or other federally 
     owned facilities as a result of--
       ``(A) the lease or purchase of operating equipment, 
     improvements, altered operation and maintenance, or technical 
     services;
       ``(B) the increased efficient use of existing energy 
     sources by cogeneration or heat recovery, excluding any 
     cogeneration process for other than a federally owned 
     building or buildings or other federally owned facilities; or
       ``(C) the increased efficient use of existing water 
     sources.''.
       (b) Energy Savings Contract.--Section 804(3) of the 
     National Energy Conservation Policy Act (42 U.S.C. 8287c(3)) 
     is amended to read as follows:
       ``(3) The terms `energy savings contract' and `energy 
     savings performance contract' mean a contract which provides 
     for the performance of services for the design, acquisition, 
     installation, testing, operation, and, where appropriate, 
     maintenance and repair, of an identified energy or water 
     conservation measure or series of measures at one or more 
     locations.''.
       (c) Energy or Water Conservation Measure.--Section 804(4) 
     of the National Energy Conservation Policy Act (42 U.S.C. 
     8287c(4)) is amended to read as follows:
       ``(4) The term `energy or water conservation measure' 
     means--
       ``(A) an energy conservation measure, as defined in section 
     551(4) (42 U.S.C. 8259(4)); or
       ``(B) a water conservation measure that improves water 
     efficiency, is life cycle cost effective, and involves water 
     conservation, water recycling or reuse, more efficient 
     treatment of wastewater or stormwater, improvements in 
     operation or maintenance efficiencies, retrofit activities or 
     other related activities, not at a Federal hydroelectric 
     facility.''.

     SEC. 917. REVIEW OF ENERGY SAVINGS PERFORMANCE CONTRACT 
                   PROGRAM.

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

     SEC. 918. FEDERAL ENERGY BANK.

       Part 3 of title V of the National Energy Conservation 
     Policy Act is amended by adding at the end the following:

     ``SEC. 553. FEDERAL ENERGY BANK.

       ``(a) Definitions.--In this section:
       ``(1) Bank.--The term `Bank' means the Federal Energy Bank 
     established by subsection (b).
       ``(2) Energy or water efficiency project.--The term `energy 
     or water efficiency project' means a project that assists a 
     Federal agency in meeting or exceeding the energy or water 
     efficiency requirements of--
       ``(A) this part;
       ``(B) title VIII;
       ``(C) subtitle F of title I of the Energy Policy Act of 
     1992 (42 U.S.C. 8262 et seq.); or
       ``(D) any applicable Executive order, including Executive 
     Order No. 13123.
       ``(3) Federal agency.--The term `Federal agency' means--
       ``(A) an Executive agency (as defined in section 105 of 
     title 5, United States Code);
       ``(B) the United States Postal Service;
       ``(C) Congress and any other entity in the legislative 
     branch; and
       ``(D) a Federal court and any other entity in the judicial 
     branch.
       ``(b) Establishment of Bank.--
       ``(1) In general.--There is established in the Treasury of 
     the United States a fund to be known as the `Federal Energy 
     Bank', consisting of--
       ``(A) such amounts as are deposited in the Bank under 
     paragraph (2);
       ``(B) such amounts as are repaid to the Bank under 
     subsection (c)(2)(D); and
       ``(C) any interest earned on investment of amounts in the 
     Bank under paragraph (3).
       ``(2) Deposits in bank.--
       ``(A) In general.--Subject to the availability of 
     appropriations and to subparagraph (B), the Secretary of the 
     Treasury shall deposit in the Bank an amount equal to 
     $250,000,000 in fiscal year 2003 and in each fiscal year 
     thereafter.
       ``(B) Maximum amount in bank.--Deposits under subparagraph 
     (A) shall cease beginning with the fiscal year following the 
     fiscal year in which the amounts in the Bank (including 
     amounts on loan from the Bank) become equal to or exceed 
     $1,000,000,000.
       ``(3) Investment of amounts.--The Secretary of the Treasury 
     shall invest such portion of the Bank as is not, in the 
     judgment of the Secretary, required to meet current 
     withdrawals. Investments may be made only in interest-bearing 
     obligations of the United States.
       ``(c) Loans From the Bank.--
       ``(1) In general.--The Secretary of the Treasury shall 
     transfer from the Bank to the Secretary such amounts as are 
     appropriated to carry out the loan program under paragraph 
     (2).
       ``(2) Loan program.--
       ``(A) Establishment.--
       ``(i) In general.--In accordance with subsection (d), the 
     Secretary, in consultation with the Secretary of Defense, the 
     Administrator of General Services, and the Director of the 
     Office of Management and Budget, shall establish a program to 
     make loans of amounts in the Bank to any Federal agency that 
     submits an application satisfactory to the Secretary in order 
     to pay the costs of a project described in subparagraph (C).
       ``(ii) Commencement of operations.--The Secretary may 
     begin--

       ``(I) accepting applications for loans from the Bank in 
     fiscal year 2002; and
       ``(II) making loans from the Bank in fiscal year 2003.

       ``(B) Energy savings performance contracting funding.--To 
     the extent practicable, an agency shall not submit a project 
     for which energy performance contracting funding is available 
     and is acceptable to the Federal agency under title VIII.
       ``(C) Purposes of loan.--
       ``(i) In general.--A loan from the Bank may be used to 
     pay--

       ``(I) the costs of an energy or water efficiency project, 
     or a renewable or alternative energy project, for a new or 
     existing Federal building (including selection and design of 
     the project);
       ``(II) the costs of an energy metering plan and metering 
     equipment installed pursuant to section 543(e) or for the 
     purpose of verification of the energy savings under an energy 
     savings performance contract under title VIII; or
       ``(III) at the time of contracting, the costs of cofunding 
     of an energy savings performance contract (including a 
     utility energy service agreement) in order to shorten the 
     payback period of the project that is the subject of the 
     energy savings performance contract.

[[Page S3728]]

       ``(ii) Limitation.--A Federal agency may use not more than 
     10 percent of the amount of a loan under subclause (I) or 
     (II) of clause (i) to pay the costs of administration and 
     proposal development (including data collection and energy 
     surveys).
       ``(iii) Renewable and alternative energy projects.--Not 
     more than 25 percent of the amount on loan from the Bank at 
     any time may be loaned for renewable energy and alternative 
     energy projects (as defined by the Secretary in accordance 
     with applicable law (including Executive Orders)).
       ``(D) Repayments.--
       ``(i) In general.--Subject to clauses (ii) through (iv), a 
     Federal agency shall repay to the Bank the principal amount 
     of a loan plus interest at a rate determined by the 
     President, in consultation with the Secretary and the 
     Secretary of the Treasury.
       ``(ii) Waiver or reduction of interest.--The Secretary may 
     waive or reduce the rate of interest required to be paid 
     under clause (i) if the Secretary determines that payment of 
     interest by a Federal agency at the rate determined under 
     that clause is not required to fund the operations of the 
     Bank.
       ``(iii) Determination of interest rate.--The interest rate 
     determined under clause (i) shall be at a rate that is 
     sufficient to ensure that, beginning not later than October 
     1, 2007, interest payments will be sufficient to fully fund 
     the operations of the Bank.
       ``(iv) Insufficiency of appropriations.--

       ``(I) Request for appropriations.--As part of the budget 
     request of the Federal agency for each fiscal year, the head 
     of each Federal agency shall submit to the President a 
     request for such amounts as are necessary to make such 
     repayments as are expected to become due in the fiscal year 
     under this subparagraph.
       ``(II) Suspension of repayment requirement.--If, for any 
     fiscal year, sufficient appropriations are not made available 
     to a Federal agency to make repayments under this 
     subparagraph, the Bank shall suspend the requirement of 
     repayment under this subparagraph until such appropriations 
     are made available.

       ``(E) Federal agency energy budgets.--Until a loan is 
     repaid, a Federal agency budget submitted by the President to 
     Congress for a fiscal year shall not be reduced by the value 
     of energy savings accrued as a result of any energy 
     conservation measure implemented using amounts from the Bank.
       ``(F) No rescission or reprogramming.--A Federal agency 
     shall not rescind or reprogram loan amounts made available 
     from the Bank except as permitted under guidelines issued 
     under subparagraph (G).
       ``(G) Guidelines.--The Secretary shall issue guidelines for 
     implementation of the loan program under this paragraph, 
     including selection criteria, maximum loan amounts, and loan 
     repayment terms.
       ``(d) Selection Criteria.--
       ``(1) In general.--The Secretary shall establish criteria 
     for the selection of projects to be awarded loans in 
     accordance with paragraph (2).
       ``(2) Selection criteria.--
       ``(A) In general.--The Secretary may make loans from the 
     Bank only for a project that--
       ``(i) is technically feasible;
       ``(ii) is determined to be cost-effective using life cycle 
     cost methods established by the Secretary;
       ``(iii) includes a measurement and management component, 
     based on the measurement and verification protocols of the 
     Department of Energy, to--

       ``(I) commission energy savings for new and existing 
     Federal facilities;
       ``(II) monitor and improve energy efficiency management at 
     existing Federal facilities; and
       ``(III) verify the energy savings under an energy savings 
     performance contract under title VIII; and

       ``(iv)(I) in the case of a renewable energy or alternative 
     energy project, has a simple payback period of not more than 
     15 years; and
       ``(II) in the case of any other project, has a simple 
     payback period of not more than 10 years.
       ``(B) Priority.--In selecting projects, the Secretary shall 
     give priority to projects that--
       ``(i) are a component of a comprehensive energy management 
     project for a Federal facility; and
       ``(ii) are designed to significantly reduce the energy use 
     of the Federal facility.
       ``(e) Reports and Audits.--
       ``(1) Reports to the secretary.--Not later than 1 year 
     after the completion of installation of a project that has a 
     cost of more than $1,000,000, and annually thereafter, a 
     Federal agency shall submit to the Secretary a report that--
       ``(A) states whether the project meets or fails to meet the 
     energy savings projections for the project; and
       ``(B) for each project that fails to meet the energy 
     savings projections, states the reasons for the failure and 
     describes proposed remedies.
       ``(2) Audits.--The Secretary may audit, or require a 
     Federal agency that receives a loan from the Bank to audit, 
     any project financed with amounts from the Bank to assess the 
     performance of the project.
       ``(3) Reports to congress.--At the end of each fiscal year, 
     the Secretary shall submit to Congress a report on the 
     operations of the Bank, including a statement of--
       ``(A) the total receipts by the Bank;
       ``(B) the total amount of loans from the Bank to each 
     Federal agency; and
       ``(C) the estimated cost and energy savings resulting from 
     projects funded with loans from the Bank.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.

     SEC. 919. ENERGY AND WATER SAVING MEASURES IN CONGRESSIONAL 
                   BUILDINGS.

       (a) In General.--Part 3 of title V of the National Energy 
     Conservation Policy Act is amended by adding at the end:

     ``SEC. 554. ENERGY AND WATER SAVINGS MEASURES IN 
                   CONGRESSIONAL BUILDINGS.

       ``(a) In General.--The Architect of the Capitol--
       ``(1) shall develop, update, and implement a cost-effective 
     energy conservation and management plan (referred to in this 
     section as the ``plan'') for all facilities administered by 
     the Congress (referred to in this section as `congressional 
     buildings') to meet the energy performance requirements for 
     Federal buildings established under section 543(a)(1); and
       ``(2) shall submit the plan to Congress, not later than 180 
     days after the date of enactment of this section.
       ``(b) Plan Requirements.--The plan shall include--
       ``(1) a description of the life-cycle cost analysis used to 
     determine the cost-effectiveness of proposed energy 
     efficiency projects;
       ``(2) a schedule of energy surveys to ensure complete 
     surveys of all congressional buildings every 5 years to 
     determine the cost and payback period of energy and water 
     conservation measures;
       ``(3) a strategy for installation of life cycle cost 
     effective energy and water conservation measures;
       ``(4) the results of a study of the costs and benefits of 
     installation of submetering in congressional buildings; and
       ``(5) information packages and `how-to' guides for each 
     Member and employing authority of Congress that detail 
     simple, cost-effective methods to save energy and taxpayer 
     dollars in the workplace.
       ``(c) Contracting Authority.--The Architect--
       ``(1) may contract with nongovernmental entities and use 
     private sector capital to finance energy conservation 
     projects and meet energy performance requirements; and
       ``(2) may use innovative contracting methods that will 
     attract private sector funding for the installation of energy 
     efficient and renewable energy technology, such as energy 
     savings performance contracts described in title VIII.
       ``(d) Capitol Visitor Center.--The Architect--
       ``(1) shall ensure that state-of-the-art energy efficiency 
     and renewable energy technologies are used in the 
     construction and design of the Visitor Center; and
       ``(2) shall include in the Visitor Center an exhibit on the 
     energy efficiency and renewable energy measures used in 
     congressional buildings.
       ``(e) Annual Report.--The Architect shall submit to 
     Congress annually a report on congressional energy management 
     and conservation programs required under this section that 
     describes in detail--
       ``(1) energy expenditures and savings estimates for each 
     facility;---
       ``(2) energy management and conservation projects; and
       ``(3) future priorities to ensure compliance with this 
     section.''.
       (b) Repeal.--Section 310 of the Legislative Branch 
     Appropriations Act, 1999 (40 U.S.C. 166i), is repealed.

     SEC. 920. INCREASED USE OF RECOVERED MATERIAL IN FEDERALLY 
                   FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT 
                   OR CONCRETE.

       (a) Definitions.--In this section:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Agency head.--The term ``agency head'' means--
       (A) the Secretary of Transportation; and
       (B) the head of each other Federal agency that on a regular 
     basis procures, or provides Federal funds to pay or assist in 
     paying the cost of procuring, material for cement or concrete 
     projects.
       (3) Cement or concrete project.--The term ``cement or 
     concrete project'' means a project for the construction or 
     maintenance of a highway or other transportation facility or 
     a Federal, State, or local government building or other 
     public facility that--
       (A) involves the procurement of cement or concrete; and
       (B) is carried out in whole or in part using Federal funds.
       (4) Recovered material.--The term ``recovered material'' 
     means--
       (A) ground granulated blast furnace slag;
       (B) coal combustion fly ash; and
       (C) any other waste material or byproduct recovered or 
     diverted from solid waste that the Administrator, in 
     consultation with an agency head, determines should be 
     treated as recovered material under this section for use in 
     cement or concrete projects paid for, in whole or in part, by 
     the agency head.
       (b) Implementation of Requirements.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Administrator and each agency head 
     shall take such actions as are necessary to implement fully 
     all procurement requirements and incentives in effect as of 
     the date of enactment of this Act (including guidelines under 
     section 6002 of the Solid Waste Disposal Act (42 U.S.C. 
     6963)) that provide for the use of cement and concrete 
     incorporating recovered material in cement or concrete 
     projects.
       (2) Priority.--In carrying out paragraph (1) an agency head 
     shall give priority to achieving greater use of recovered 
     material in cement or concrete projects for which recovered 
     materials historically have not been used or have been used 
     only minimally.
       (c) Full Implementation Study.--

[[Page S3729]]

       (1) In general.--The Administrator and the Secretary of 
     Transportation, in cooperation with the Secretary of Energy, 
     shall conduct a study to determine the extent to which 
     current procurement requirements, when fully implemented in 
     accordance with subsection (b), may realize energy savings 
     and greenhouse gas emission reduction benefits attainable 
     with substitution of recovered material in cement used in 
     cement or concrete projects.
       (2) Matters to be addressed.--The study shall--
       (A) quantify the extent to which recovered materials are 
     being substituted for Portland cement, particularly as a 
     result of current procurement requirements, and the energy 
     savings and greenhouse gas emission reduction benefits 
     associated with that substitution;
       (B) identify all barriers in procurement requirements to 
     fuller realization of energy savings and greenhouse gas 
     emission reduction benefits, including barriers resulting 
     from exceptions from current law; and
       (C)(i) identify potential mechanisms to achieve greater 
     substitution of recovered material in types of cement or 
     concrete projects for which recovered materials historically 
     have not been used or have been used only minimally;
       (ii) evaluate the feasibility of establishing guidelines or 
     standards for optimized substitution rates of recovered 
     material in those cement or concrete projects; and
       (iii) identify any potential environmental or economic 
     effects that may result from greater substitution of 
     recovered material in those cement or concrete projects.
       (3) Report.--Not later than 30 months after the date of 
     enactment of this Act, the Secretary shall submit to the 
     Committee on Appropriations and Committee on Environment and 
     Public Works of the Senate and the Committee on 
     Appropriations and Committee on Energy and Commerce of the 
     House of Representatives a report on the study.
       (d) Additional Procurement Requirements.--Within 1 year of 
     the release of the report in accordance with subsection 
     (c)(3), the Administrator and each agency head shall take 
     additional actions authorized under the Solid Waste Disposal 
     Act (42 U.S.C. 6901 et seq.) to establish procurement 
     requirements and incentives that provide for the use of 
     cement and concrete with increased substitution of recovered 
     material in the construction and maintenance of cement or 
     concrete projects, so as to--
       (1) realize more fully the energy savings and greenhouse 
     gas emission reduction benefits associated with increased 
     substitution; and
       (2) eliminate barriers identified under subsection (c).
       (e) Effect of Section.--Nothing in this section affects the 
     requirements of section 6002 of the Solid Waste Disposal Act 
     (42 U.S.C. 6962) (including the guidelines and specifications 
     for implementing those requirements).

        Subtitle C--Industrial Efficiency and Consumer Products

     SEC. 921. VOLUNTARY COMMITMENTS TO REDUCE INDUSTRIAL ENERGY 
                   INTENSITY.

       (a) Voluntary Agreements.--The Secretary of Energy shall 
     enter into voluntary agreements with one or more persons in 
     industrial sectors that consume significant amounts of 
     primary energy per unit of physical output to reduce the 
     energy intensity of their production activities.
       (b) Goal.--Voluntary agreements under this section shall 
     have a goal of reducing energy intensity by not less than 2.5 
     percent each year from 2002 through 2012.
       (c) Recognition.--The Secretary of Energy, in cooperation 
     with the Administrator of the Environmental Protection Agency 
     and other appropriate Federal agencies, shall develop 
     mechanisms to recognize and publicize the achievements of 
     participants in voluntary agreements under this section.
       (d) Definition.--In this section, the term ``energy 
     intensity'' means the primary energy consumed per unit of 
     physical output in an industrial process.
       (e) Technical Assistance.--An entity that enters into an 
     agreement under this section and continues to make a good 
     faith effort to achieve the energy efficiency goals specified 
     in the agreement shall be eligible to receive from the 
     Secretary a grant or technical assistance as appropriate to 
     assist in the achievement of those goals.
       (f) Report.--Not later than June 30, 2008 and June 30, 
     2012, the Secretary shall submit to Congress a report that 
     evaluates the success of the voluntary agreements, with 
     independent verification of a sample of the energy savings 
     estimates provided by participating firms.

     SEC. 922. AUTHORITY TO SET STANDARDS FOR COMMERCIAL PRODUCTS.

       Part B of title III of the Energy Policy and Conservation 
     Act (42 U.S.C. 6291 et seq.) is amended as follows:
       (1) In the heading for such part, by inserting ``AND 
     COMMERCIAL'' after ``CONSUMER''.
       (2) In section 321(2), by inserting ``or commercial'' after 
     ``consumer''.
       (3) In paragraphs (4), (5), and (15) of section 321, by 
     striking ``consumer'' each place it appears and inserting 
     ``covered''.
       (4) In section 322(a), by inserting ``or commercial'' after 
     ``consumer'' the first place it appears in the material 
     preceding paragraph (1).
       (5) In section 322(b), by inserting ``or commercial'' after 
     ``consumer'' each place it appears.
       (6) In section 322 (b)(1)(B) and (b)(2)(A), by inserting 
     ``or per-business in the case of a commercial product'' after 
     ``per-household'' each place it appears.
       (7) In section 322 (b)(2)(A), by inserting ``or businesses 
     in the case of commercial products'' after ``households'' 
     each place it appears.
       (8) In section 322 (B)(2)(C)--
       (A) by striking ``term'' and inserting ``terms''; and
       (B) by inserting ``and `business' '' after `` `household' 
     ''.
       (9) In section 323 (b)(1) (B) by inserting ``or 
     commercial'' after ``consumer''.

     SEC. 923. ADDITIONAL DEFINITIONS.

       Section 321 of the Energy Policy and Conservation Act (42 
     U.S.C. 6291) is amended by adding at the end the following:
       ``(32) The term `battery charger' means a device that 
     charges batteries for consumer products.
       ``(33) The term `commercial refrigerator, freezer and 
     refrigerator-freezer' means a refrigerator, freezer or 
     refrigerator-freezer that--
       ``(A) is not a consumer product regulated under this Act; 
     and
       ``(B) incorporates most components involved in the vapor-
     compression cycle and the refrigerated compartment in a 
     single package.
       ``(34) The term `external power supply' means an external 
     power supply circuit that is used to convert household 
     electric current into either DC current or lower-voltage AC 
     current to operate a consumer product.
       ``(35) The term `illuminated exit sign' means a sign that--
       ``(A) is designed to be permanently fixed in place to 
     identify an exit; and
       ``(B) consists of--
       ``(i) an electrically powered integral light source that 
     illuminates the legend `EXIT' and any directional indicators; 
     and
       ``(ii) provides contrast between the legend, any 
     directional indicators, and the background.
       ``(36)(A) Except as provided in subsection (B), the term 
     `low-voltage dry-type transformer' means a transformer that--
       ``(i) has an input voltage of 600 volts or less;
       ``(ii) is air-cooled;
       ``(iii) does not use oil as a coolant; and
       ``(iv) is rated for operation at a frequency of 60 Hertz.
       ``(B) The term `low-voltage dry-type transformer' does not 
     include--
       ``(i) transformers with multiple voltage taps, with the 
     highest voltage tap equaling at least 20 percent more than 
     the lowest voltage tap;
       ``(ii) transformers that are designed to be used in a 
     special purpose application, such as transformers commonly 
     known as drive transformers, rectifier transformers, 
     autotransformers, Uninterruptible Power System transformers, 
     impedance transformers, harmonic transformers, regulating 
     transformers, sealed and nonventilating transformers, machine 
     tool transformers, welding transformers, grounding 
     transformers, or testing transformers; or
       ``(iii) any transformer not listed in clause (ii) that is 
     excluded by the Secretary by rule because the transformer is 
     designed for a special application and the application of 
     standards to the transformer would not result in significant 
     energy savings.
       ``(37) The term `standby mode' means the lowest amount of 
     electric power used by a household appliance when not 
     performing its active functions, as defined on an individual 
     product basis by the Secretary.
       ``(38) The term `torchiere' means a portable electric lamp 
     with a reflector bowl that directs light upward so as to give 
     indirect illumination.
       ``(39) The term `transformer' means a device consisting of 
     two or more coils of insulated wire that transfers 
     alternating current by electromagnetic induction from one 
     coil to another to change the original voltage or current 
     value.
       ``(40) The term `unit heater' means a self-contained fan-
     type heater designed to be installed within the heated space, 
     except that such term does not include a warm air furnace.
       ``(41) The term `traffic signal module' means a standard 8-
     inch (200mm) or 12-inch (300mm) traffic signal indication, 
     consisting of a light source, a lens, and all other parts 
     necessary for operation, that communicates movement messages 
     to drivers through red, amber, and green colors.''.

     SEC. 924. ADDITIONAL TEST PROCEDURES.

       (a) Exit Signs.--Section 323(b) of the Energy Policy and 
     Conservation Act (42 U.S.C. 6293) is amended by adding at the 
     end the following:
       ``(9) Test procedures for illuminated exit signs shall be 
     based on the test method used under the Energy Star program 
     of the Environmental Protection Agency for illuminated exit 
     signs, as in effect on the date of enactment of this 
     paragraph.
       ``(10) Test procedures for low voltage dry-type 
     distribution transformers shall be based on the `Standard 
     Test Method for Measuring the Energy Consumption of 
     Distribution Transformers' prescribed by the National 
     Electrical Manufacturers Association (NEMA TP 2-1998). The 
     Secretary may review and revise this test procedure based on 
     future revisions to such standard test method.
       ``(11) Test procedures for traffic signal modules shall be 
     based on the test method used under the Energy Star program 
     of the Environmental Protection Agency for traffic signal 
     modules, as in effect on the date of enactment of this 
     paragraph.''.
       (b) Additional Consumer and Commercial Products.--Section 
     323 of the Energy Policy and Conservation Act (42 U.S.C. 
     6293) is further amended by adding at the end the following:
       ``(f) Additional Consumer and Commercial Products.--The 
     Secretary shall within 24 months after the date of enactment 
     of this subsection prescribe testing requirements for 
     suspended ceiling fans, refrigerated bottled or canned 
     beverage vending machines, commercial unit heaters, and 
     commercial refrigerators, freezers and refrigerator-freezers. 
     Such testing requirements shall be based on existing test 
     procedures used in industry to the extent practical and 
     reasonable. In the case of suspended ceiling fans, such test 
     procedures shall include efficiency at both maximum output 
     and at an output no more than 50 percent of the maximum 
     output.''.

[[Page S3730]]

     SEC. 925. ENERGY LABELING.

       (a) Rulemaking on Effectiveness of Consumer Product 
     Labeling.--Paragraph (2) of section 324(a) of the Energy 
     Policy and Conservation Act (42 U.S.C. 6294(a)(2)) is amended 
     by adding at the end the following:
       ``(F) Not later than 3 months after the date of enactment 
     of this subparagraph, the Commission shall initiate a 
     rulemaking to consider the effectiveness of the current 
     consumer products labeling program in assisting consumers in 
     making purchasing decisions and improving energy efficiency 
     and to consider changes to the labeling rules that would 
     improve the effectiveness of consumer product labels. Such 
     rulemaking shall be completed within 15 months of the date of 
     enactment of this subparagraph.''.
       (b) Rulemaking on Labeling for Additional Products.--
     Section 324(a) of the Energy Policy and Conservation Act (42 
     U.S.C. 6294(a)) is further amended by adding at the end the 
     following:
       ``(5) The Secretary shall within 6 months after the date on 
     which energy conservation standards are prescribed by the 
     Secretary for covered products referred to in subsections (u) 
     and (v) of section 325, and within 18 months of enactment of 
     this paragraph for products referred to in subsections (w) 
     through (y) of section 325, prescribe, by rule, labeling 
     requirements for such products. Labeling requirements adopted 
     under this paragraph shall take effect on the same date as 
     the standards set pursuant to sections 325 (v) through 
     (y).''.

     SEC. 926. ENERGY STAR PROGRAM.

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


                         ``ENERGY STAR PROGRAM

       ``Sec. 324A. There is established at the Department of 
     Energy and the Environmental Protection Agency a program to 
     identify and promote energy-efficient products and buildings 
     in order to reduce energy consumption, improve energy 
     security, and reduce pollution through labeling of products 
     and buildings that meet the highest energy efficiency 
     standards. Responsibilities under the program shall be 
     divided between the Department of Energy and the 
     Environmental Protection Agency consistent with the terms of 
     agreements between the two agencies. The Administrator and 
     the Secretary shall--
       ``(1) promote Energy Star compliant technologies as the 
     preferred technologies in the marketplace for achieving 
     energy efficiency and to reduce pollution;
       ``(2) work to enhance public awareness of the Energy Star 
     label, including special outreach to small businesses;
       ``(3) preserve the integrity of the Energy Star label; and
       ``(4) solicit the comments of interested parties in 
     establishing a new Energy Star product category or in 
     revising a product category, and upon adoption of a new or 
     revised product category provide an explanation of the 
     decision that responds to significant public comments.''.

     SEC. 927. ENERGY CONSERVATION STANDARDS FOR CENTRAL AIR 
                   CONDITIONERS AND HEAT PUMPS.

       Section 325(d)(3) of the Energy Policy and Conservation Act 
     (42 U.S.C. 6295(d)) is amended by adding at the end the 
     following:
       ``(C) Revision of standards.--Not later than 60 days after 
     the date of enactment of this subparagraph, the Secretary 
     shall amend the standards established under paragraph (1).''.

     SEC. 928. ENERGY CONSERVATION STANDARDS FOR ADDITIONAL 
                   CONSUMER AND COMMERCIAL PRODUCTS.

       Section 325 of the Energy Policy and Conservation Act (42 
     U.S.C. 6295) is amended by adding at the end the following:
       ``(u) Standby Mode Electric Energy Consumption.--
       ``(1) Initial rulemaking.--(A) The Secretary shall, within 
     18 months after the date of enactment of this subsection, 
     prescribe by notice and comment, definitions of standby mode 
     and test procedures for the standby mode power use of battery 
     chargers and external power supplies. In establishing these 
     test procedures, the Secretary shall consider, among other 
     factors, existing test procedures used for measuring energy 
     consumption in standby mode and assess the current and 
     projected future market for battery chargers and external 
     power supplies. This assessment shall include estimates of 
     the significance of potential energy savings from technical 
     improvements to these products and suggested product classes 
     for standards. Prior to the end of this time period, the 
     Secretary shall hold a scoping workshop to discuss and 
     receive comments on plans for developing energy conservation 
     standards for standby mode energy use for these products.
       ``(B) The Secretary shall, within 3 years after the date of 
     enactment of this subsection, issue a final rule that 
     determines whether energy conservation standards shall be 
     promulgated for battery chargers and external power supplies 
     or classes thereof. For each product class, any such 
     standards shall be set at the lowest level of standby energy 
     use that--
       ``(i) meets the criteria of subsections (o), (p), (q), (r), 
     (s) and (t); and
       ``(ii) will result in significant overall annual energy 
     savings, considering both standby mode and other operating 
     modes.
       ``(2) Designation of additional covered products.--(A) Not 
     later than 180 days after the date of enactment of this 
     subsection, the Secretary shall publish for public comment 
     and public hearing a notice to determine whether any 
     noncovered products should be designated as covered products 
     for the purpose of instituting a rulemaking under this 
     section to determine whether an energy conservation standard 
     restricting standby mode energy consumption, should be 
     promulgated; providing that any restriction on standby mode 
     energy consumption shall be limited to major sources of such 
     consumption.
       ``(B) In making the determinations pursuant to subparagraph 
     (A) of whether to designate new covered products and 
     institute rulemakings, the Secretary shall, among other 
     relevant factors and in addition to the criteria in section 
     322(b), consider--
       ``(i) standby mode power consumption compared to overall 
     product energy consumption; and
       ``(ii) the priority and energy savings potential of 
     standards which may be promulgated under this subsection 
     compared to other required rulemakings under this section and 
     the available resources of the Department to conduct such 
     rulemakings.
       ``(C) Not later than 1 year after the date of enactment of 
     this subsection, the Secretary shall issue a determination of 
     any new covered products for which he intends to institute 
     rulemakings on standby mode pursuant to this section and he 
     shall state the dates by which he intends to initiate those 
     rulemakings.
       ``(3) Review of standby energy use in covered products.--In 
     determining pursuant to section 323 whether test procedures 
     and energy conservation standards pursuant to section 325 
     should be revised, the Secretary shall consider for covered 
     products which are major sources of standby mode energy 
     consumption whether to incorporate standby mode into such 
     test procedures and energy conservation standards, taking 
     into account, among other relevant factors, the criteria for 
     non-covered products in subparagraph (B) of this subsection.
       ``(4) Rulemaking for standby mode.--(A) Any rulemaking 
     instituted under this subsection or for covered products 
     under this section which restricts standby mode power 
     consumption shall be subject to the criteria and procedures 
     for issuing energy conservation standards set forth in 
     section 325 and the criteria set forth in paragraph 2(B) of 
     this subsection.
       ``(B) No standard can be proposed for new covered products 
     or covered products in a standby mode unless the Secretary 
     has promulgated applicable test procedures for each product 
     pursuant to section 323.
       ``(C) The provisions of section 327 shall apply to new 
     covered products which are subject to the rulemakings for 
     standby mode after a final rule has been issued.
       ``(5) Effective date.--Any standard promulgated under this 
     subsection shall be applicable to products manufactured or 
     imported 3 years after the date of promulgation.
       ``(6) Voluntary programs to reduce standby mode energy 
     use.--The Secretary and the Administrator shall collaborate 
     and develop programs, including programs pursuant to section 
     324A and other voluntary industry agreements or codes of 
     conduct, which are designed to reduce standby mode energy 
     use.
       ``(v) Suspended Ceiling Fans, Vending Machines, Unit 
     Heaters, and Commercial Refrigerators, Freezers and 
     Refrigerator-Freezers.--The Secretary shall within 24 months 
     after the date on which testing requirements are prescribed 
     by the Secretary pursuant to section 323(f), prescribe, by 
     rule, energy conservation standards for suspended ceiling 
     fans, refrigerated bottled or canned beverage vending 
     machines, unit heaters, and commercial refrigerators, 
     freezers and refrigerator-freezers. In establishing standards 
     under this subsection, the Secretary shall use the criteria 
     and procedures contained in subsections (l) and (m). Any 
     standard prescribed under this subsection shall apply to 
     products manufactured 3 years after the date of publication 
     of a final rule establishing such standard.
       ``(w) Illuminated Exit Signs.--Illuminated exit signs 
     manufactured on or after January 1, 2005 shall meet the 
     Energy Star Program performance requirements for illuminated 
     exit signs prescribed by the Environmental Protection Agency 
     as in effect on the date of enactment of this subsection.
       ``(x) Torchieres.--Torchieres manufactured on or after 
     January 1, 2005--
       ``(1) shall consume not more than 190 watts of power; and
       ``(2) shall not be capable of operating with lamps that 
     total more than 190 watts.
       ``(y) Low Voltage Dry-Type Transformers.--The efficiency of 
     low voltage dry-type transformers manufactured on or after 
     January 1, 2005 shall be the Class I Efficiency Levels for 
     low voltage dry-type transformers specified in Table 4-2 of 
     the `Guide for Determining Energy Efficiency for Distribution 
     Transformers' published by the National Electrical 
     Manufacturers Association (NEMA TP-1-1996).
       ``(z) Traffic Signal Modules.--Traffic signal modules 
     manufactured on or after January 1, 2006 shall meet the 
     performance requirements used under the Energy Star program 
     of the Environmental Protection Agency for traffic signals, 
     as in effect on the date of enactment of this paragraph, and 
     shall be installed with compatible, electrically-connected 
     signal control interface devices and conflict monitoring 
     systems.''.

     SEC. 929. CONSUMER EDUCATION ON ENERGY EFFICIENCY BENEFITS OF 
                   AIR CONDITIONING, HEATING, AND VENTILATION 
                   MAINTENANCE.

       Section 337 of the Energy Policy and Conservation Act (42 
     U.S.C. 6307) is amended by adding at the end the following:
       ``(c) HVAC Maintenance.--(1) For the purpose of ensuring 
     that installed air conditioning and heating systems operate 
     at their maximum rated efficiency levels, the Secretary 
     shall, within 180 days of the date of enactment of this 
     subsection, carry out a program to educate homeowners and 
     small business owners concerning the energy savings resulting 
     from properly conducted maintenance of air conditioning, 
     heating, and ventilating systems.
       ``(2) The Secretary may carry out the program in 
     cooperation with industry trade associations, industry 
     members, and energy efficiency organizations.

[[Page S3731]]

       ``(d) Small Business Education and Assistance.--The 
     Administrator of the Small Business Administration, in 
     consultation with the Secretary of Energy and the 
     Administrator of the Environmental Protection Agency, shall 
     develop and coordinate a Government-wide program, building on 
     the existing Energy Star for Small Business Program, to 
     assist small business to become more energy efficient, 
     understand the cost savings obtainable through efficiencies, 
     and identify financing options for energy efficiency 
     upgrades. The Secretary and the Administrator shall make the 
     program information available directly to small businesses 
     and through other Federal agencies, including the Federal 
     Emergency Management Agency, and the Department of 
     Agriculture.''.

     SEC. 930. STUDY OF ENERGY EFFICIENCY STANDARDS.

       The Secretary of Energy shall contract with the National 
     Academy of Sciences for a study, to be completed within 1 
     year of enactment of this Act, to examine whether the goals 
     of energy efficiency standards are best served by measurement 
     of energy consumed, and efficiency improvements, at the 
     actual site of energy consumption, or through the full fuel 
     cycle, beginning at the source of energy production. The 
     Secretary shall submit the report to the Congress.

                     Subtitle D--Housing Efficiency

     SEC. 931. CAPACITY BUILDING FOR ENERGY EFFICIENT, AFFORDABLE 
                   HOUSING.

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

     SEC. 932. INCREASE OF CDBG PUBLIC SERVICES CAP FOR ENERGY 
                   CONSERVATION AND EFFICIENCY ACTIVITIES.

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

     SEC. 933. FHA MORTGAGE INSURANCE INCENTIVES FOR ENERGY 
                   EFFICIENT HOUSING.

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

     SEC. 934. PUBLIC HOUSING CAPITAL FUND.

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

     SEC. 935. GRANTS FOR ENERGY-CONSERVING IMPROVEMENTS FOR 
                   ASSISTED HOUSING.

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

     SEC. 936. NORTH AMERICAN DEVELOPMENT BANK.

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

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

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

     SEC. 937. CAPITAL FUND.

       Section 9 of the United States Housing Act of 1937 (42 
     U.S.C. 1437g), as amended by section 934, is amended--
       (1) in subsection (d)(1)--
       (A) in subparagraph (L), by striking the period at the end 
     and inserting ``; and'';
       (B) by redesignating subparagraph (L) as subparagraph (K); 
     and
       (C) by adding at the end the following:
       ``(L) integrated utility management and capital planning to 
     maximize energy conservation and efficiency measures.''; and
       (2) in subsection (e)(2)(C)--
       (A) by striking ``The'' and inserting the following:
       ``(i) In general.--The''; and
       (B) by adding at the end the following:
       ``(ii) Third party contracts.--Contracts described in 
     clause (i) may include contracts for equipment conversions to 
     less costly utility sources, projects with resident paid 
     utilities, adjustments to frozen base year consumption, 
     including systems repaired to meet applicable building and 
     safety codes and adjustments for occupancy rates increased by 
     rehabilitation.
       ``(iii) Term of contract.--The total term of a contract 
     described in clause (i) shall be for not more than 20 years 
     to allow longer payback periods for retrofits, including but 
     not limited to windows, heating system replacements, wall 
     insulation, site-based generations, and advanced energy 
     savings technologies, including renewable energy 
     generation.''.

     SEC. 938. ENERGY-EFFICIENT APPLIANCES.

       A public housing agency shall purchase energy-efficient 
     appliances that are Energy Star products as defined in 
     section 552 of the National Energy Policy and Conservation 
     Act (as amended by this Act) when the purchase of energy-
     efficient appliances is cost-effective to the public housing 
     agency.

     SEC. 939. ENERGY EFFICIENCY STANDARDS.

       Section 109 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12709) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``the date of the enactment of the Energy 
     Policy Act of 1992'' and inserting ``September 30, 2002'';
       (ii) in subparagraph (A), by striking ``and'' at the end;
       (iii) in subparagraph (B), by striking the period at the 
     end and inserting a semi-colon; and
       (iv) by adding at the end the following:
       ``(C) rehabilitation and new construction of public and 
     assisted housing funded by HOPE VI revitalization grants, 
     established under section 24 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437v), where such standards are 
     determined to be cost effective by the Secretary of Housing 
     and Urban Development; and
       (B) in paragraph (2), by striking ``Council of American'' 
     and all that follows through ``life-cycle cost basis'' and 
     inserting ``2000 International Energy Conservation Code'';
       (2) in subsection (b)--
       (A) by striking ``the date of the enactment of the Energy 
     Policy Act of 1992'' and inserting ``September 30, 2002''; 
     and
       (B) by striking ``CABO'' and all that follows through 
     ``1989'' and inserting ``the 2000 International Energy 
     Conservation Code''; and
       (3) in subsection (c)--
       (A) in the heading, by striking ``Model Energy Code'' and 
     inserting ``The International Energy Conservation Code''; and
       (B) by striking ``CABO'' and all that follows through 
     ``1989'' and inserting ``the 2000 International Energy 
     Conservation Code''.

     SEC. 940. ENERGY STRATEGY FOR HUD.

       (a) In General.--The Secretary of Housing and Urban 
     Development shall develop and implement an integrated 
     strategy to reduce utility expenses through cost-effective 
     energy conservation and efficiency measures, design and 
     construction in public and assisted housing.
       (b) Energy Management Office.--The Secretary of Housing and 
     Urban Development shall create an office at the Department of 
     Housing and Urban Development for utility management,

[[Page S3732]]

     energy efficiency, and conservation, with responsibility for 
     implementing the strategy developed under this section, 
     including development of a centralized database that monitors 
     public housing energy usage, and development of energy 
     reduction goals and incentives for public housing agencies. 
     The Secretary shall submit an annual report to Congress on 
     the strategy.

                Subtitle E--Rural and Remote Communities

     SEC. 941. SHORT TITLE.

       This subtitle may be cited as the ``Rural and Remote 
     Community Fairness Act''.

     SEC. 942. FINDINGS AND PURPOSE.

       (a) Findings.--The Congress finds that--
       (1) a modern infrastructure, including energy-efficient 
     housing, electricity, telecommunications, bulk fuel, 
     wastewater and potable water service, is a necessary 
     ingredient of a modern society and development of a 
     prosperous economy;
       (2) the Nation's rural and remote communities face critical 
     social, economic and environmental problems, arising in 
     significant measure from the high cost of infrastructure 
     development in sparsely populated and remote areas, that are 
     not adequately addressed by existing Federal assistance 
     programs;
       (3) in the past, Federal assistance has been instrumental 
     in establishing electric and other utility service in many 
     developing regions of the Nation, and that Federal assistance 
     continues to be appropriate to ensure that electric and other 
     utility systems in rural areas conform with modern standards 
     of safety, reliability, efficiency and environmental 
     protection; and
       (4) the future welfare of the Nation and the well-being of 
     its citizens depend on the establishment and maintenance of 
     viable rural and remote communities as social, economic and 
     political entities.
       (b) Purpose.--The purpose of this subtitle is the 
     development and maintenance of viable rural and remote 
     communities through the provision of efficient housing, and 
     reasonably priced and environmentally sound energy, water, 
     wastewater, and bulk fuel, telecommunications and utility 
     services to those communities that do not have those services 
     or who currently bear costs of those services that are 
     significantly above the national average.

     SEC. 943. DEFINITIONS.

       As used in this subtitle:
       (1) The term ``unit of general local government'' means any 
     city, county, town, township, parish, village, borough 
     (organized or unorganized) or other general purpose political 
     subdivision of a State, Guam, the Commonwealth of the 
     Northern Mariana Islands, Puerto Rico, the Republic of the 
     Marshall Islands, the Federated States of Micronesia, the 
     Republic of Palau, the Virgin Islands, and American Samoa, a 
     combination of such political subdivisions that is recognized 
     by the Secretary; and the District of Columbia; or any other 
     appropriate organization of citizens of a rural and remote 
     community that the Secretary may identify.
       (2) The term ``population'' means total resident population 
     based on data compiled by the United States Bureau of the 
     Census and referable to the same point or period in time.
       (3) The term ``Native American group'' means any Indian 
     tribe, band, group, and nation, including Alaska Indians, 
     Aleuts, and Eskimos, and any Alaskan Native village, of the 
     United States, which is considered an eligible recipient 
     under the Indian Self-Determination and Education Assistance 
     Act (Public Law 93-638) or was considered an eligible 
     recipient under chapter 67 of title 31, United States Code, 
     prior to the repeal of such chapter.
       (4) The term ``Secretary'' means the Secretary of Housing 
     and Urban Development, the Secretary of Agriculture, the 
     Secretary of the Interior or the Secretary of Energy, as 
     appropriate.
       (5) The term ``rural and remote community'' means a unit of 
     local general government or Native American group which is 
     served by an electric utility that has 10,000 or less 
     customers with an average retail cost per kilowatt hour of 
     electricity that is equal to or greater than 150 percent of 
     the average retail cost per kilowatt hour of electricity for 
     all consumers in the United States, as determined by data 
     provided by the Energy Information Administration of the 
     Department of Energy.
       (6) The term ``alternative energy sources'' include 
     nontraditional means of providing electrical energy, 
     including, but not limited to, wind, solar, biomass, 
     municipal solid waste, hydroelectric, geothermal and tidal 
     power.
       (7) The term ``average retail cost per kilowatt hour of 
     electricity'' has the same meaning as ``average revenue per 
     kilowatt hour of electricity'' as defined by the Energy 
     Information Administration of the Department of Energy.

     SEC. 944. AUTHORIZATION OF APPROPRIATIONS.

       The Secretary is authorized to make grants to rural and 
     remote communities to carry out activities in accordance with 
     the provisions of this subtitle. For purposes of assistance 
     under section 947, there are authorized to be appropriated 
     $100,000,000 for each of fiscal years 2003 through 2009.

     SEC. 945. STATEMENT OF ACTIVITIES AND REVIEW.

       (a) Statement of Objectives and Projected Use.--Prior to 
     the receipt in any fiscal year of a grant under section 947 
     by any rural and remote community, the grantee shall have 
     prepared and submitted to the Secretary of the agency 
     providing funding a final statement of rural and remote 
     community development objectives and projected use of funds.
       (b) Public Notice.--In order to permit public examination 
     and appraisal of such statements, to enhance the public 
     accountability of grantees, and to facilitate coordination of 
     activities with different levels of government, the grantee 
     shall in a timely manner--
       (1) furnish citizens information concerning the amount of 
     funds available for rural and remote community development 
     activities and the range of activities that may be 
     undertaken;
       (2) publish a proposed statement in such manner to afford 
     affected citizens an opportunity to examine its content and 
     to submit comments on the proposed statement and on the 
     community development performance of the grantee;
       (3) provide citizens with reasonable access to records 
     regarding the past use of funds received under section 947 by 
     the grantee; and
       (4) provide citizens with reasonable notice of, and 
     opportunity to comment on, any substantial change proposed to 
     be made in the use of funds received under section 947 from 
     one eligible activity to another.
     The final statement shall be made available to the public, 
     and a copy shall be furnished to the appropriate Secretary. 
     Any final statement of activities may be modified or amended 
     from time to time by the grantee in accordance with the same. 
     Procedures required in this paragraph are for the preparation 
     and submission of such statement.
       (c) Performance and Evaluation Report.--Each grantee shall 
     submit to the appropriate Secretary, at a time determined by 
     the Secretary, a performance and evaluation report, 
     concerning the use of funds made available under section 947, 
     together with an assessment by the grantee of the 
     relationship of such use to the objectives identified in the 
     grantee's statement under subsection (a) and to the 
     requirements of subsection (b). The grantee's report shall 
     indicate its programmatic accomplishments, the nature of and 
     reasons for any changes in the grantee's program objectives, 
     and indications of how the grantee would change its programs 
     as a result of its experiences.
       (d) Retention of Income.--
       (1) In general.--Any rural and remote community may retain 
     any program income that is realized from any grant made by 
     the Secretary under section 947 if--
       (A) such income was realized after the initial disbursement 
     of the funds received by such unit of general local 
     government under such section; and
       (B) such unit of general local government has agreed that 
     it will utilize the program income for eligible rural and 
     remote community development activities in accordance with 
     the provisions of this title.
       (2) Exception.--The Secretary may, by regulation, exclude 
     from consideration as program income any amounts determined 
     to be so small that compliance with the subsection creates an 
     unreasonable administrative burden on the rural and remote 
     community.

     SEC. 946. ELIGIBLE ACTIVITIES.

       (a) Activities Included.--Eligible activities assisted 
     under this subtitle may include only--
       (1) weatherization and other cost-effective energy-related 
     repairs of homes and other buildings;
       (2) the acquisition, construction, repair, reconstruction, 
     or installation of reliable and cost-efficient facilities for 
     the generation, transmission or distribution of electricity, 
     and telecommunications, for consumption in a rural and remote 
     community or communities;
       (3) the acquisition, construction, repair, reconstruction, 
     remediation or installation of facilities for the safe 
     storage and efficient management of bulk fuel by rural and 
     remote communities, and facilities for the distribution of 
     such fuel to consumers in a rural or remote community;
       (4) facilities and training to reduce costs of maintaining 
     and operating generation, distribution or transmission 
     systems to a rural and remote community or communities;
       (5) the institution of professional management and 
     maintenance services for electricity generation, transmission 
     or distribution to a rural and remote community or 
     communities;
       (6) the investigation of the feasibility of alternate 
     energy sources for a rural and remote community or 
     communities;
       (7) acquisition, construction, repair, reconstruction, 
     operation, maintenance, or installation of facilities for 
     water or wastewater service;
       (8) the acquisition or disposition of real property 
     (including air rights, water rights, and other interests 
     therein) for eligible rural and remote community development 
     activities; and
       (9) activities necessary to develop and implement a 
     comprehensive rural and remote development plan, including 
     payment of reasonable administrative costs related to 
     planning and execution of rural and remote community 
     development activities.
       (b) Activities Undertaken Through Electric Utilities.--
     Eligible activities may be undertaken either directly by the 
     rural and remote community, or by the rural and remote 
     community through local electric utilities.

     SEC. 947. ALLOCATION AND DISTRIBUTION OF FUNDS.

       For each fiscal year, of the amount approved in an 
     appropriation Act under section 903 for grants in any year, 
     the Secretary shall distribute to each rural and remote 
     community which has filed a final statement of rural and 
     remote community development objectives and projected use of 
     funds under section 945, an amount which shall be allocated 
     among the rural and remote communities that filed a final 
     statement of rural and remote community development 
     objectives and projected use of funds under section 945 
     proportionate to the percentage that the average retail price 
     per kilowatt hour of electricity for all classes of consumers 
     in the rural and remote community exceeds the national 
     average retail price per kilowatt hour for electricity for 
     all consumers in the United States, as determined by data 
     provided by the Department of Energy's Energy Information 
     Administration. In allocating funds under this section, the 
     Secretary shall give special consideration to those rural and 
     remote communities

[[Page S3733]]

     that increase economies of scale through consolidation of 
     services, affiliation and regionalization of eligible 
     activities under this title.

     SEC. 948. RURAL AND REMOTE COMMUNITY ELECTRIFICATION GRANTS.

       Section 313 of the Rural Electrification Act of 1936 (7 
     U.S.C. 940c) is amended by adding after subsection (b) the 
     following:
       ``(c) Rural and Remote Communities Electrification 
     Grants.--The Secretary of Agriculture, in consultation with 
     the Secretary of Energy and the Secretary of the Interior, 
     may provide grants under this Act for the purpose of 
     increasing energy efficiency, siting or upgrading 
     transmission and distribution lines, or providing or 
     modernizing electric facilities to--
       ``(1) a unit of local government of a State or territory; 
     or
       ``(2) an Indian tribe or Tribal College or University as 
     defined in section 316(b)(3) of the Higher Education Act (20 
     U.S.C. 1059c(b)(3)).
       ``(d) Grant Criteria.--The Secretary shall make grants 
     based on a determination of cost-effectiveness and most 
     effective use of the funds to achieve the stated purposes of 
     this section.
       ``(e) Preference.--In making grants under this section, the 
     Secretary shall give a preference to renewable energy 
     facilities.
       ``(f) Definition.--For purposes of this section, the term 
     `Indian tribe' means any Indian tribe, band, nation, or other 
     organized group or community, including any Alaska Native 
     village or regional or village corporation as defined in or 
     established pursuant to the Alaska Native Claims Settlement 
     Act (43 U.S.C. 1601 et seq.), which is recognized as eligible 
     for the special programs and services provided by the United 
     States to Indians because of their status as Indians.
       ``(e) Authorization.--For the purpose of carrying out 
     subsection (c), there are authorized to be appropriated to 
     the Secretary $20,000,000 for each of the 7 fiscal years 
     following the date of enactment of this subsection.''.

     SEC. 949. ADDITIONAL AUTHORIZATION OF APPROPRIATIONS.

       There is hereby authorized to be appropriated $5,000,000 
     for each of fiscal years 2003 through 2009 to the Denali 
     Commission established by the Denali Commission Act of 1998 
     (42 U.S.C. 3121 note) for the purposes of funding the power 
     cost equalization program.

     SEC. 950. RURAL RECOVERY COMMUNITY DEVELOPMENT BLOCK GRANTS.

       (a) Findings; Purpose.--
       (1) Findings.--Congress finds that--
       (A) a modern infrastructure, including affordable housing, 
     wastewater and water service, and advanced technology 
     capabilities is a necessary ingredient of a modern society 
     and development of a prosperous economy with minimal 
     environmental impacts;
       (B) the Nation's rural areas face critical social, 
     economic, and environmental problems, arising in significant 
     measure from the growing cost of infrastructure development 
     in rural areas that suffer from low per capita income and 
     high rates of outmigration and are not adequately addressed 
     by existing Federal assistance programs; and
       (C) the future welfare of the Nation and the well-being of 
     its citizens depend on the establishment and maintenance of 
     viable rural areas as social, economic, and political 
     entities.
       (2) Purpose.--The purpose of this section is to provide for 
     the development and maintenance of viable rural areas through 
     the provision of affordable housing and community development 
     assistance to eligible units of general local government and 
     eligible Native American groups in rural areas with 
     excessively high rates of outmigration and low per capita 
     income levels.
       (b) Definitions.--In this section:
       (1) Eligible unit of general local government.--The term 
     ``eligible unit of general local government'' means a unit of 
     general local government that is the governing body of a 
     rural recovery area.
       (2) Eligible indian tribe.--The term ``eligible Indian 
     tribe'' means the governing body of an Indian tribe that is 
     located in a rural recovery area.
       (3) Grantee.--The term ``grantee'' means an eligible unit 
     of general local government or eligible Indian tribe that 
     receives a grant under this section.
       (4) Native american group.--The term ``Native American 
     group'' means any Indian tribe, band, group, and nation, 
     including Alaska Indians, Aleuts, and Eskimos, and any 
     Alaskan Native village, of the United States, which is 
     considered an eligible recipient under the Indian Self-
     Determination and Education Assistance Act (Public Law 93-
     638) or was considered an eligible recipient under chapter 67 
     of title 31, United States Code, prior to the repeal of such 
     chapter.
       (5) Rural recovery area.--The term ``rural recovery area'' 
     means any geographic area represented by a unit of general 
     local government or a Native American group--
       (A) the borders of which are not adjacent to a metropolitan 
     area;
       (B) in which--
       (i) the population outmigration level equals or exceeds 1 
     percent over the most recent 5 year period, as determined by 
     the Secretary of Housing and Urban Development; and
       (ii) the per capita income is less than that of the 
     national nonmetropolitan average; and
       (C) that does not include a city with a population of more 
     than 15,000.
       (6) Unit of general local government.--
       (A) In general.--The term ``unit of general local 
     government'' means any city, county, town, township, parish, 
     village, borough (organized or unorganized), or other general 
     purpose political subdivision of a State; Guam, the 
     Commonwealth of the Northern Mariana Islands, the Virgin 
     Islands, Puerto Rico, and American Samoa, or a general 
     purpose political subdivision thereof; a combination of such 
     political subdivisions that, except as provided in section 
     106(d)(4), is recognized by the Secretary; and the District 
     of Columbia.
       (B) Other entities included.--The term also includes a 
     State or a local public body or agency, community 
     association, or other entity, that is approved by the 
     Secretary for the purpose of providing public facilities or 
     services to a new community.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development, the Secretary of 
     Agriculture, the Secretary of the Interior or the Secretary 
     of Energy, as appropriate.
       (c) Grant Authority.--The Secretary may make grants in 
     accordance with this section to eligible units of general 
     local government, Native American groups and eligible Indian 
     tribes that meet the requirements of subsection (d) to carry 
     out eligible activities described in subsection (f).
       (d) Eligibility Requirements.--
       (1) Statement of rural development objectives.--In order to 
     receive a grant under this section for a fiscal year, an 
     eligible unit of general local government, Native American 
     group or eligible Indian tribe--
       (A) shall--
       (i) publish a proposed statement of rural development 
     objectives and a description of the proposed eligible 
     activities described in subsection (f) for which the grant 
     will be used; and
       (ii) afford residents of the rural recovery area served by 
     the eligible unit of general local government, Native 
     American groups or eligible Indian tribe with an opportunity 
     to examine the contents of the proposed statement and the 
     proposed eligible activities published under clause (i), and 
     to submit comments to the eligible unit of general local 
     government, Native American group or eligible Indian tribe, 
     as applicable, on the proposed statement and the proposed 
     eligible activities, and the overall community development 
     performance of the eligible unit of general local government, 
     Native American groups or eligible Indian tribe, as 
     applicable; and
       (B) based on any comments received under subparagraph 
     (A)(ii), prepare and submit to the Secretary--
       (i) a final statement of rural development objectives;
       (ii) a description of the eligible activities described in 
     subsection (f) for which a grant received under this section 
     will be used; and
       (iii) a certification that the eligible unit of general 
     local government, Native American groups or eligible Indian 
     tribe, as applicable, will comply with the requirements of 
     paragraph (2).
       (2) Public notice and comment.--In order to enhance public 
     accountability and facilitate the coordination of activities 
     among different levels of government, an eligible unit of 
     general local government, Native American groups or eligible 
     Indian tribe that receives a grant under this section shall, 
     as soon as practicable after such receipt, provide the 
     residents of the rural recovery area served by the eligible 
     unit of general local government, Native American groups or 
     eligible Indian tribe, as applicable, with--
       (A) a copy of the final statement submitted under paragraph 
     (1)(B);
       (B) information concerning the amount made available under 
     this section and the eligible activities to be undertaken 
     with that amount;
       (C) reasonable access to records regarding the use of any 
     amounts received by the eligible unit of general local 
     government, Native American groups or eligible Indian tribe 
     under this section in any preceding fiscal year; and
       (D) reasonable notice of, and opportunity to comment on, 
     any substantial change proposed to be made in the use of 
     amounts received under this section from one eligible 
     activity to another.
       (e) Distribution of Grants.--
       (1) In General.--In each fiscal year, the Secretary shall 
     distribute to each eligible unit of general local government, 
     Native American groups and eligible Indian tribe that meets 
     the requirements of subsection (d)(1) a grant in an amount 
     described in paragraph (2).
       (2) Amount.--Of the total amount made available to carry 
     out this section in each fiscal year, the Secretary shall 
     distribute to each grantee the amount equal to the greater 
     of--
       (A) the pro rata share of the grantee, as determined by the 
     Secretary, based on the combined annual population 
     outmigration level (as determined by the Secretary of Housing 
     and Urban Development) and the per capita income for the 
     rural recovery area served by the grantee; or
       (B) $200,000.
       (f) Eligible Activities.--Each grantee shall use amounts 
     received under this section for one or more of the following 
     eligible activities, which may be undertaken either directly 
     by the grantee, or by any local economic development 
     corporation, regional planning district, nonprofit community 
     development corporation, or statewide development 
     organization authorized by the grantee--
       (1) the acquisition, construction, repair, reconstruction, 
     operation, maintenance, or installation of facilities for 
     water and wastewater service or any other infrastructure 
     needs determined to be critical to the further development or 
     improvement of a designated industrial park;
       (2) the acquisition or disposition of real property 
     (including air rights, water rights, and other interests 
     therein) for rural community development activities;
       (3) the development of telecommunications infrastructure 
     within a designated industrial park that encourages high 
     technology business development in rural areas;
       (4) activities necessary to develop and implement a 
     comprehensive rural development plan, including payment of 
     reasonable administrative costs related to planning and 
     execution of rural development activities; or
       (5) affordable housing initiatives.
       (g) Performance and Evaluation Report.--

[[Page S3734]]

       (1) In general.--Each grantee shall annually submit to the 
     appropriate Secretary a performance and evaluation report, 
     concerning the use of amounts received under this section.
       (2) Contents.--Each report submitted under paragraph (1) 
     shall include a description of--
       (A) the eligible activities carried out by the grantee with 
     amounts received under this section, and the degree to which 
     the grantee has achieved the rural development objectives 
     included in the final statement submitted under subsection 
     (d)(1);
       (B) the nature of and reasons for any change in the rural 
     development objectives or the eligible activities of the 
     grantee after submission of the final statement under 
     subsection (d)(1); and
       (C) any manner in which the grantee would change the rural 
     development objectives of the grantee as a result of the 
     experience of the grantee in administering amounts received 
     under this section.
       (h) Retention of Income.--A grantee may retain any income 
     that is realized from the grant, if--
       (1) the income was realized after the initial disbursement 
     of amounts to the grantee under this section; and
       (2) the--
       (A) grantee agrees to utilize the income for one or more 
     eligible activities; or
       (B) amount of the income is determined by the Secretary to 
     be so small that compliance with subparagraph (A) would 
     create an unreasonable administrative burden on the grantee.
       (i) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $100,000,000 for 
     each of fiscal years 2003 through 2009.

   DIVISION D--INTEGRATION OF ENERGY POLICY AND CLIMATE CHANGE POLICY

                TITLE X--NATIONAL CLIMATE CHANGE POLICY

                     Subtitle A--Sense of Congress

     SEC. 1001. SENSE OF CONGRESS ON CLIMATE CHANGE.

       (a) Findings.--The Congress makes the following findings:
       (1) Evidence continues to build that increases in 
     atmospheric concentrations of man-made greenhouse gases are 
     contributing to global climate change.
       (2) The Intergovernmental Panel on Climate Change (IPCC) 
     has concluded that ``there is new and stronger evidence that 
     most of the warming observed over the last 50 years is 
     attributable to human activities'' and that the Earth's 
     average temperature can be expected to rise between 2.5 and 
     10.4 degrees Fahrenheit in this century.
       (3) The National Academy of Sciences confirmed the findings 
     of the IPCC, stating that ``the IPCC's conclusion that most 
     of the observed warming of the last 50 years is likely to 
     have been due to the increase of greenhouse gas 
     concentrations accurately reflects the current thinking of 
     the scientific community on this issue'' and that ``there is 
     general agreement that the observed warming is real and 
     particularly strong within the past twenty years''. The 
     National Academy of Sciences also noted that ``because there 
     is considerable uncertainty in current understanding of how 
     the climate system varies naturally and reacts to emissions 
     of greenhouse gases and aerosols, current estimates of the 
     magnitude of future warming should be regarded as tentative 
     and subject to future adjustments upward or downward''.
       (4) The IPCC has stated that in the last 40 years, the 
     global average sea level has risen, ocean heat content has 
     increased, and snow cover and ice extent have decreased, 
     which threatens to inundate low-lying island nations and 
     coastal regions throughout the world.
       (5) In October 2000, a United States Government report 
     found that global climate change may harm the United States 
     by altering crop yields, accelerating sea-level rise, and 
     increasing the spread of tropical infectious diseases.
       (6) In 1992, the United States ratified the United Nations 
     Framework Convention on Climate Change (UNFCCC), the ultimate 
     objective of which is the ``stabilization of greenhouse gas 
     concentrations in the atmosphere at a level that would 
     prevent dangerous anthropogenic interference with the climate 
     system. Such a level should be achieved within a time-frame 
     sufficient to allow ecosystems to adapt naturally to climate 
     change, to ensure that food production is not threatened and 
     to enable economic development to proceed in a sustainable 
     manner''.
       (7) The UNFCCC stated in part that the Parties to the 
     Convention are to implement policies ``with the aim of 
     returning . . . to their 1990 levels anthropogenic emissions 
     of carbon dioxide and other greenhouse gases'' under the 
     principle that ``policies and measures . . . should be 
     appropriate for the specific conditions of each Party and 
     should be integrated with national development programmes, 
     taking into account that economic development is essential 
     for adopting measures to address climate change''.
       (8) There is a shared international responsibility to 
     address this problem, as industrial nations are the largest 
     historic and current emitters of greenhouse gases and 
     developing nations' emissions will significantly increase in 
     the future.
       (9) The UNFCCC further stated that ``developed country 
     Parties should take the lead in combating climate change and 
     the adverse effects thereof'', as these nations are the 
     largest historic and current emitters of greenhouse gases. 
     The UNFCCC also stated that ``steps required to understand 
     and address climate change will be environmentally, socially 
     and economically most effective if they are based on relevant 
     scientific, technical and economic considerations and 
     continually re-evaluated in the light of new findings in 
     these areas''.
       (10) Senate Resolution 98 of the One Hundred Fifth 
     Congress, which expressed that developing nations must also 
     be included in any future, binding climate change treaty and 
     such a treaty must not result in serious harm to the United 
     States economy, should not cause the United States to abandon 
     its shared responsibility to help reduce the risks of climate 
     change and its impacts. Future international efforts in this 
     regard should focus on recognizing the equitable 
     responsibilities for addressing climate change by all 
     nations, including commitments by the largest developing 
     country emitters in a future, binding climate change treaty.
       (11) It is the position of the United States that it will 
     not interfere with the plans of any nation that chooses to 
     ratify and implement the Kyoto Protocol to the UNFCCC.
       (12) American businesses need to know how governments 
     worldwide will address the risks of climate change.
       (13) The United States benefits from investments in the 
     research, development and deployment of a range of clean 
     energy and efficiency technologies that can reduce the risks 
     of climate change and its impacts and that can make the 
     United States economy more productive, bolster energy 
     security, create jobs, and protect the environment.
       (b) Sense of Congress.--It is the sense of the United 
     States Congress that the United States should demonstrate 
     international leadership and responsibility in reducing the 
     health, environmental, and economic risks posed by climate 
     change by--
       (1) taking responsible action to ensure significant and 
     meaningful reductions in emissions of greenhouse gases from 
     all sectors;
       (2) creating flexible international and domestic 
     mechanisms, including joint implementation, technology 
     deployment, tradable credits for emissions reductions and 
     carbon sequestration projects that will reduce, avoid, and 
     sequester greenhouse gas emissions; and
       (3) participating in international negotiations, including 
     putting forth a proposal to the Conference of the Parties, 
     with the objective of securing United States participation in 
     a future binding climate change Treaty in a manner that is 
     consistent with the environmental objectives of the UNFCCC, 
     that protects the economic interests of the United States, 
     and recognizes the shared international responsibility for 
     addressing climate change, including developing country 
     participation.

                  Subtitle B--Climate Change Strategy

     SEC. 1011. SHORT TITLE.

       This subtitle may be cited as the ``Climate Change Strategy 
     and Technology Innovation Act of 2002''.

     SEC. 1012. DEFINITIONS.

       In this subtitle:
       (1) Climate-friendly technology.--The term ``climate-
     friendly technology'' means any energy supply or end-use 
     technology that, over the life of the technology and compared 
     to similar technology in commercial use as of the date of 
     enactment of this Act--
       (A) results in reduced emissions of greenhouse gases;
       (B) may substantially lower emissions of other pollutants; 
     and
       (C) may generate substantially smaller or less hazardous 
     quantities of solid or liquid waste.
       (2) Department.--The term ``Department'' means the 
     Department of Energy.
       (3) Department office.--The term ``Department Office'' 
     means the Office of Climate Change Technology of the 
     Department established by section 1015(a).
       (4) Federal agency.--The term ``Federal agency'' has the 
     meaning given the term ``agency'' in section 551 of title 5, 
     United States Code.
       (5) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) an anthropogenic gaseous constituent of the atmosphere 
     (including carbon dioxide, methane, nitrous oxide, 
     chlorofluorocarbons, hydrofluorocarbons, perfluorocarbons, 
     sulfur hexafluoride, and tropospheric ozone) that absorbs and 
     re-emits infrared radiation and influences climate; and
       (B) an anthropogenic aerosol (such as black soot) that 
     absorbs solar radiation and influences climate.
       (6) Interagency task force.--The term ``Interagency Task 
     Force'' means the Interagency Task Force established under 
     section 1014(e).
       (7) Key element.--The term ``key element'', with respect to 
     the Strategy, means--
       (A) definition of interim emission mitigation levels, that, 
     coupled with specific mitigation approaches and after taking 
     into account actions by other nations (if any), would result 
     in stabilization of greenhouse gas concentrations;
       (B) technology development, including--
       (i) a national commitment to double energy research and 
     development by the United States public and private sectors; 
     and
       (ii) in carrying out such research and development, a 
     national commitment to provide a high degree of emphasis on 
     bold, breakthrough technologies that will make possible a 
     profound transformation of the energy, transportation, 
     industrial, agricultural, and building sectors of the United 
     States;
       (C) climate adaptation research that focuses on actions 
     necessary to adapt to climate change--
       (i) that may have already occurred; or
       (ii) that may occur under future climate change scenarios;
       (D) climate science research that--
       (i) builds on the substantial scientific understanding of 
     climate change that exists as of the date of enactment of 
     this subtitle; and
       (ii) focuses on reducing the remaining scientific, 
     technical, and economic uncertainties to aid in the 
     development of sound response strategies.
       (8) Long-term goal of the strategy.--The term ``long-term 
     goal of the Strategy'' means the long-term goal in section 
     1013(a)(1).

[[Page S3735]]

       (9) Mitigation.--The term ``mitigation'' means actions that 
     reduce, avoid, or sequester greenhouse gases.
       (10) National academy of sciences.--The term ``National 
     Academy of Sciences'' means the National Academy of Sciences, 
     the National Academy of Engineering, the Institute of 
     Medicine, and the National Research Council.
       (11) Qualified individual.--
       (A) In general.--The term ``qualified individual'' means an 
     individual who has demonstrated expertise and leadership 
     skills to draw on other experts in diverse fields of 
     knowledge that are relevant to addressing the climate change 
     challenge.
       (B) Fields of knowledge.--The fields of knowledge referred 
     to in subparagraph (A) are--
       (i) the science of climate change and its impacts;
       (ii) energy and environmental economics;
       (iii) technology transfer and diffusion;
       (iv) the social dimensions of climate change;
       (v) climate change adaptation strategies;
       (vi) fossil, nuclear, and renewable energy technology;
       (vii) energy efficiency and energy conservation;
       (viii) energy systems integration;
       (ix) engineered and terrestrial carbon sequestration;
       (x) transportation, industrial, and building sector 
     concerns;
       (xi) regulatory and market-based mechanisms for addressing 
     climate change;
       (xii) risk and decision analysis;
       (xiii) strategic planning; and
       (xiv) the international implications of climate change 
     strategies.
       (12) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (13) Stabilization of greenhouse gas concentrations.--The 
     term ``stabilization of greenhouse gas concentrations'' means 
     the stabilization of greenhouse gas concentrations in the 
     atmosphere at a level that would prevent dangerous 
     anthropogenic interference with the climate system, 
     recognizing that such a level should be achieved within a 
     time frame sufficient to allow ecosystems to adapt naturally 
     to climate change, to ensure that food production is not 
     threatened and to enable economic development to proceed in a 
     sustainable manner, as contemplated by the United Nations 
     Framework Convention on Climate Change, done at New York on 
     May 9, 1992.
       (14) Strategy.--The term ``Strategy'' means the National 
     Climate Change Strategy developed under section 1013.
       (15) White house office.--The term ``White House Office'' 
     means the Office of National Climate Change Policy 
     established by section 1014(a).

     SEC. 1013. NATIONAL CLIMATE CHANGE STRATEGY.

       (a) In General.--The President, through the director of the 
     White House Office and in consultation with the Interagency 
     Task Force, shall develop a National Climate Change Strategy, 
     which shall--
       (1) have the long-term goal of stabilization of greenhouse 
     gas concentrations through actions taken by the United States 
     and other nations;
       (2) recognize that accomplishing the long-term goal of the 
     Strategy will take from many decades to more than a century, 
     but acknowledging that significant actions must begin in the 
     near term;
       (3) incorporate the four key elements;
       (4) be developed on the basis of an examination of a broad 
     range of emissions levels and dates for achievement of those 
     levels (including those evaluated by the Intergovernmental 
     Panel on Climate Change and those consistent with United 
     States treaty commitments) that, after taking into account 
     actions by other nations, would achieve the long-term goal of 
     the Strategy;
       (5) consider the broad range of activities and actions that 
     can be taken by United States entities to reduce, avoid, or 
     sequester greenhouse gas emissions both within the United 
     States and in other nations through the use of market 
     mechanisms, which may include, but not be limited to, 
     mitigation activities, terrestrial sequestration, earning 
     offsets through carbon capture or project-based activities, 
     trading of emissions credits in domestic and international 
     markets, and the application of the resulting credits from 
     any of the above within the United States;
       (6) minimize any adverse short-term and long-term social, 
     economic, national security, and environmental impacts, 
     including ensuring that the strategy is developed in an 
     economically and environmentally sound manner;
       (7) incorporate mitigation approaches leading to the 
     development and deployment of advanced technologies and 
     practices that will reduce, avoid, or sequester greenhouse 
     gas emissions;
       (8) be consistent with the goals of energy, transportation, 
     industrial, agricultural, forestry, environmental, economic, 
     and other relevant policies of the United States;
       (9) take into account--
       (A) the diversity of energy sources and technologies;
       (B) supply-side and demand-side solutions; and
       (C) national infrastructure, energy distribution, and 
     transportation systems;
       (10) be based on an evaluation of a wide range of 
     approaches for achieving the long-term goal of the Strategy, 
     including evaluation of--
       (A) a variety of cost-effective Federal and State policies, 
     programs, standards, and incentives;
       (B) policies that integrate and promote innovative, market-
     based solutions in the United States and in foreign 
     countries; and
       (C) participation in other international institutions, or 
     in the support of international activities, that are 
     established or conducted to achieve the long-term goal of the 
     Strategy;
       (11) in the final recommendations of the Strategy--
       (A) emphasize policies and actions that achieve the long-
     term goal of the Strategy; and
       (B) provide specific recommendations concerning--
       (i) measures determined to be appropriate for short-term 
     implementation, giving preference to cost-effective and 
     technologically feasible measures that will--

       (I) produce measurable net reductions in United States 
     emissions, compared to expected trends, that lead toward 
     achievement of the long-term goal of the Strategy; and
       (II) minimize any adverse short-term and long-term 
     economic, environmental, national security, and social 
     impacts on the United States;

       (ii) the development of technologies that have the 
     potential for long-term implementation--

       (I) giving preference to technologies that have the 
     potential to reduce significantly the overall cost of 
     achieving the long-term goal of the Strategy; and
       (II) considering a full range of energy sources, energy 
     conversion and use technologies, and efficiency options;

       (iii) such changes in institutional and technology systems 
     are necessary to adapt to climate change in the short-term 
     and the long-term;
       (iv) such review, modification, and enhancement of the 
     scientific, technical, and economic research efforts of the 
     United States, and improvements to the data resulting from 
     research, as are appropriate to improve the accuracy of 
     predictions concerning climate change and the economic and 
     social costs and opportunities relating to climate change; 
     and
       (v) changes that should be made to project and grant 
     evaluation criteria under other Federal research and 
     development programs so that those criteria do not inhibit 
     development of climate-friendly technologies;
       (12) recognize that the Strategy is intended to guide the 
     Nation's effort to address climate change, but it shall not 
     create a legal obligation on the part of any person or entity 
     other than the duties of the Director of the White House 
     Office and Interagency Task Force in the development of the 
     Strategy;
       (13) have a scope that considers the totality of United 
     States public, private, and public-private sector actions 
     that bear on the long-term goal;
       (14) be developed in a manner that provides for meaningful 
     participation by, and consultation among, Federal, State, 
     tribal, and local government agencies, nongovernmental 
     organizations, academia, scientific bodies, industry, the 
     public, and other interested parties in accordance with 
     subsections (b)(3)(C)(iv)(II) and (e)(3)(B)(ii) of section 
     1014;
       (15) address how the United States should engage State, 
     tribal, and local governments in developing and carrying out 
     a response to climate change;
       (16) promote, to the maximum extent practicable, public 
     awareness, outreach, and information-sharing to further the 
     understanding of the full range of climate change-related 
     issues;
       (17) provide a detailed explanation of how the measures 
     recommended by the Strategy will ensure that they do not 
     result in serious harm to the economy of the United States;
       (18) provide a detailed explanation of how the measures 
     recommended by the Strategy will achieve its long-term goal;
       (19) include any recommendations for legislative and 
     administrative actions necessary to implement the Strategy;
       (20) serve as a framework for climate change actions by all 
     Federal agencies;
       (21) recommend which Federal agencies are, or should be, 
     responsible for the various aspects of implementation of the 
     Strategy and any budgetary implications;
       (22) address how the United States should engage foreign 
     governments in developing an international response to 
     climate change; and
       (23) incorporate initiatives to open markets and promote 
     the deployment of a range of climate-friendly technologies 
     developed in the United States and abroad.
       (b) Submission to Congress.--Not later than 1 year after 
     the date of enactment of this section, the President, through 
     the Interagency Task Force and the Director, shall submit to 
     Congress the Strategy, in the form of a report that 
     includes--
       (1) a description of the Strategy and its goals, including 
     how the Strategy addresses each of the 4 key elements;
       (2) an inventory and evaluation of Federal programs and 
     activities intended to carry out the Strategy;
       (3) a description of how the Strategy will serve as a 
     framework of climate change response actions by all Federal 
     agencies, including a description of coordination mechanisms 
     and interagency activities;
       (4) evidence that the Strategy is consistent with other 
     energy, transportation, industrial, agricultural, forestry, 
     environmental, economic, and other relevant policies of the 
     United States;
       (5) a description of provisions in the Strategy that ensure 
     that it minimizes any adverse short-term and long-term 
     social, economic, national security, and environmental 
     impacts, including ensuring that the Strategy is developed in 
     an economically and environmentally sound manner;
       (6) evidence that the Strategy has been developed in a 
     manner that provides for participation by, and consultation 
     among, Federal, State, tribal, and local government agencies, 
     nongovernmental organizations, academia, scientific bodies, 
     industry, the public, and other interested parties;
       (7) a description of Federal activities that promote, to 
     the maximum extent practicable, public awareness, outreach, 
     and information-sharing to further the understanding of the 
     full range of climate change-related issues; and
       (8) recommendations for legislative or administrative 
     changes to Federal programs or activities

[[Page S3736]]

     implemented to carry out this Strategy, in light of new 
     knowledge of climate change and its impacts and costs or 
     benefits, or technological capacity to improve mitigation or 
     adaption activities.
       (c) Updates.--Not later than 4 years after the date of 
     submission of the Strategy to Congress under subsection (b), 
     and at the end of each 4-year period thereafter, the 
     President shall submit to Congress an updated version of the 
     Strategy.
       (d) Progress Reports.--Not later than 1 year after the date 
     of submission of the Strategy to Congress under subsection 
     (b), and annually thereafter at the time that the President 
     submits to the Congress the budget of the United States 
     Government under section 1105 of title 31, United States 
     Code, the President shall submit to Congress a report that--
       (1) describes the Strategy, its goals, and the Federal 
     programs and activities intended to carry out the Strategy 
     through technological, scientific, mitigation, and adaptation 
     activities;
       (2) evaluates the Federal programs and activities 
     implemented as part of this Strategy against the goals and 
     implementation dates outlined in the Strategy;
       (3) assesses the progress in implementation of the 
     Strategy;
       (4) incorporates the technology program reports required 
     pursuant to section 1015(a)(3) and subsections (d) and (e) of 
     section 1321;
       (5) describes any changes to Federal programs or activities 
     implemented to carry out this Strategy, in light of new 
     knowledge of climate change and its impacts and costs or 
     benefits, or technological capacity to improve mitigation or 
     adaptation activities;
       (6) describes all Federal spending on climate change for 
     the current fiscal year and each of the 5 years previous; 
     categorized by Federal agency and program function (including 
     scientific research, energy research and development, 
     regulation, education, and other activities);
       (7) estimates the budgetary impact for the current fiscal 
     year and each of the 5 years previous of any Federal tax 
     credits, tax deductions or other incentives claimed by 
     taxpayers that are directly or indirectly attributable to 
     greenhouse gas emissions reduction activities;
       (8) estimates the amount, in metric tons, of net greenhouse 
     gas emissions reduced, avoided, or sequestered directly or 
     indirectly as a result of the implementation of the Strategy;
       (9) evaluates international research and development and 
     market-based activities and the mitigation actions taken by 
     the United States and other nations to achieve the long-term 
     goal of the Strategy; and
       (10) makes recommendations for legislative or 
     administrative actions or adjustments that will accelerate 
     progress towards meeting the near-term and long-term goals 
     contained in the Strategy.
       (e) National Academy of Sciences Review.--
       (1) In general.--Not later than 90 days after the date of 
     publication of the Strategy under subsection (b) and each 
     update under subsection (c), the Director of the National 
     Science Foundation, on behalf of the Director of the White 
     House Office and the Interagency Task Force, shall enter into 
     appropriate arrangements with the National Academy of 
     Sciences to conduct a review of the Strategy or update.
       (2) Criteria.--The review by the National Academy of 
     Sciences shall evaluate the goals and recommendations 
     contained in the Strategy or update, taking into 
     consideration--
       (A) the adequacy of effort and the appropriateness of focus 
     of the totality of all public, private, and public-private 
     sector actions of the United States with respect to the 
     Strategy, including the four key elements;
       (B) the adequacy of the budget and the effectiveness with 
     which each Federal agency is carrying out its 
     responsibilities;
       (C) current scientific knowledge regarding climate change 
     and its impacts;
       (D) current understanding of human social and economic 
     responses to climate change, and responses of natural 
     ecosystems to climate change;
       (E) advancements in energy technologies that reduce, avoid, 
     or sequester greenhouse gases or otherwise mitigate the risks 
     of climate change;
       (F) current understanding of economic costs and benefits of 
     mitigation or adaptation activities;
       (G) the existence of alternative policy options that could 
     achieve the Strategy goals at lower economic, environmental, 
     or social cost; and
       (H) international activities and the actions taken by the 
     United States and other nations to achieve the long-term goal 
     of the Strategy.
       (3) Report.--Not later than 1 year after the date of 
     submittal to the Congress of the Strategy or update, as 
     appropriate, the National Academy of Sciences shall prepare 
     and submit to the Congress and the President a report 
     concerning the results of its review, along with any 
     recommendations as appropriate. Such report shall also be 
     made available to the public.
       (4) Authorization of appropriations.--For the purposes of 
     this subsection, there are authorized to be appropriated to 
     the National Science Foundation such sums as may be 
     necessary.

     SEC. 1014. OFFICE OF NATIONAL CLIMATE CHANGE POLICY.

       (a) Establishment.--
       (1) In general.--There is established, within the Executive 
     Office of the President, the Office of National Climate 
     Change Policy.
       (2) Focus.--The White House Office shall have the focus of 
     achieving the long-term goal of the Strategy while minimizing 
     adverse short-term and long-term economic and social impacts.
       (3) Duties.--Consistent with paragraph (2), the White House 
     Office shall--
       (A) establish policies, objectives, and priorities for the 
     Strategy;
       (B) in accordance with subsection (d), establish the 
     Interagency Task Force to serve as the primary mechanism 
     through which the heads of Federal agencies shall assist the 
     Director of the White House Office in developing and 
     implementing the Strategy;
       (C) to the maximum extent practicable, ensure that the 
     Strategy is based on objective, quantitative analysis, 
     drawing on the analytical capabilities of Federal and State 
     agencies, especially the Department Office;
       (D) advise the President concerning necessary changes in 
     organization, management, budgeting, and personnel allocation 
     of Federal agencies involved in climate change response 
     activities; and
       (E) advise the President and notify a Federal agency if the 
     policies and discretionary programs of the agency are not 
     well aligned with, or are not contributing effectively to, 
     the long-term goal of the Strategy.
       (b) Director of the White House Office.--
       (1) In general.--The White House Office shall be headed by 
     a Director, who shall report directly to the President, and 
     shall consult with the appropriate economic, environmental, 
     national security, domestic policy, science and technology 
     and other offices with the Executive Office of the President.
       (2) Appointment.--The Director of the White House Office 
     shall be a qualified individual appointed by the President, 
     by and with the advice and consent of the Senate.
       (3) Duties of the director of the white house office.--
       (A) Strategy.--In accordance with section 1013, the 
     Director of the White House Office shall coordinate the 
     development and updating of the Strategy.
       (B) Interagency task force.--The Director of the White 
     House Office shall serve as Chair of the Interagency Task 
     Force.
       (C) Advisory duties.--
       (i) Energy, economic, environmental, transportation, 
     industrial, agricultural, building, forestry, and other 
     programs.--The Director of the White House Office, using an 
     integrated perspective considering the totality of actions in 
     the United States, shall advise the President and the heads 
     of Federal agencies on--

       (I) the extent to which United States energy, economic, 
     environmental, transportation, industrial, agricultural, 
     forestry, building, and other relevant programs are capable 
     of producing progress on the long-term goal of the Strategy; 
     and
       (II) the extent to which proposed or newly created energy, 
     economic, environmental, transportation, industrial, 
     agricultural, forestry, building, and other relevant programs 
     positively or negatively affect the ability of the United 
     States to achieve the long-term goal of the Strategy.

       (ii) Tax, trade, and foreign policies.--The Director of the 
     White House Office, using an integrated perspective 
     considering the totality of actions in the United States, 
     shall advise the President and the heads of Federal agencies 
     on--

       (I) the extent to which the United States tax policy, trade 
     policy, and foreign policy are capable of producing progress 
     on the long-term goal of the Strategy; and
       (II) the extent to which proposed or newly created tax 
     policy, trade policy, and foreign policy positively or 
     negatively affect the ability of the United States to achieve 
     the long-term goal of the Strategy.

       (iii) International treaties.--The Secretary of State, 
     acting in conjunction with the Interagency Task Force and 
     using the analytical tools available to the White House 
     Office, shall provide to the Director of the White House 
     Office an opinion that--

       (I) specifies, to the maximum extent practicable, the 
     economic and environmental costs and benefits of any proposed 
     international treaties or components of treaties that have an 
     influence on greenhouse gas management; and
       (II) assesses the extent to which the treaties advance the 
     long-term goal of the Strategy, while minimizing adverse 
     short-term and long-term economic and social impacts and 
     considering other impacts.

       (iv) Consultation.--

       (I) With members of interagency task force.--To the extent 
     practicable and appropriate, the Director of the White House 
     Office shall consult with all members of the Interagency Task 
     Force before providing advice to the President.
       (II) With other interested parties.--The Director of the 
     White House Office shall establish a process for obtaining 
     the meaningful participation of Federal, State, tribal, and 
     local government agencies, nongovernmental organizations, 
     academia, scientific bodies, industry, the public, and other 
     interested parties in the development and updating of the 
     Strategy.

       (D) Public education, awareness, outreach, and information-
     sharing.--The Director of the White House Office, to the 
     maximum extent practicable, shall promote public awareness, 
     outreach, and information-sharing to further the 
     understanding of the full range of climate change-related 
     issues.
       (4) Annual reports.--The Director of the White House 
     Office, in consultation with the Interagency Task Force and 
     other interested parties, shall prepare the annual reports 
     for submission by the President to Congress under section 
     1013(d).
       (5) Analysis.--During development of the Strategy, 
     preparation of the annual reports submitted under paragraph 
     (4), and provision of advice to the President and the heads 
     of Federal agencies, the Director of the White House Office 
     shall place significant emphasis on the use of objective, 
     quantitative analysis, taking into consideration any 
     uncertainties associated with the analysis.

[[Page S3737]]

       (c) Staff.--
       (1) In general.--The Director of the White House Office 
     shall employ a professional staff, including the staff 
     appointed under paragraph (2), of not more than 25 
     individuals to carry out the duties of the White House 
     Office.
       (2) Intergovernmental personnel and fellowships.--The 
     Director of the White House Office may use the authority 
     provided by the Intergovernmental Personnel Act of 1970 (42 
     U.S.C. 4701 et seq.) and subchapter VI of chapter 33 of title 
     5, United States Code, and fellowships, to obtain staff from 
     Federal agencies, academia, scientific bodies, or a National 
     Laboratory (as that term is defined in section 1203), for 
     appointments of a limited term.
       (d) Authorization of Appropriations.--
       (1) Use of available appropriations.--From funds made 
     available to Federal agencies for the fiscal year in which 
     this title is enacted, the President shall provide such sums 
     as are necessary to carry out the duties of the White House 
     Office under this title until the date on which funds are 
     made available under paragraph (2).
       (2) Authorization of appropriations.--There is authorized 
     to be appropriated to the Executive Office of the President 
     to carry out the duties of the White House Office under this 
     subtitle, $5,000,000 for each of fiscal years 2003 through 
     2011, to remain available through September 30, 2011.
       (e) Interagency Task Force.--
       (1) In general.--The Director of the White House Office 
     shall establish the Interagency Task Force.
       (2) Composition.--The Interagency Task Force shall be 
     composed of--
       (A) the Director of the White House Office, who shall serve 
     as Chair;
       (B) the Secretary of State;
       (C) the Secretary of Energy;
       (D) the Secretary of Commerce;
       (E) the Secretary of Transportation;
       (F) the Secretary of Agriculture;
       (G) the Administrator of the Environmental Protection 
     Agency;
       (H) the Chairman of the Council of Economic Advisers;
       (I) the Chairman of the Council on Environmental Quality;
       (J) the Director of the Office of Science and Technology 
     Policy;
       (K) the Director of the Office of Management and Budget; 
     and
       (L) the heads of such other Federal agencies as the 
     President considers appropriate.
       (3) Strategy.--
       (A) In general.--The Interagency Task Force shall serve as 
     the primary forum through which the Federal agencies 
     represented on the Interagency Task Force jointly assist the 
     Director of the White House Office in--
       (i) developing and updating the Strategy; and
       (ii) preparing annual reports under section 1013(d).
       (B) Required elements.--In carrying out subparagraph (A), 
     the Interagency Task Force shall--
       (i) take into account the long-term goal and other 
     requirements of the Strategy specified in section 1013(a);
       (ii) consult with State, tribal, and local government 
     agencies, nongovernmental organizations, academia, scientific 
     bodies, industry, the public, and other interested parties; 
     and
       (iii) build consensus around a Strategy that is based on 
     strong scientific, technical, and economic analyses.
       (4) Working groups.--The Chair, in consultation with the 
     members of the Interagency Task Force, may establish such 
     topical working groups as are necessary to carry out the 
     duties of the Interagency Task Force and implement the 
     Strategy, taking into consideration the key elements of the 
     Strategy. Such working groups may be comprised of members of 
     the Interagency Task Force or their designees.
       (f) Staff.--In accordance with procedures established by 
     the Chair of the Interagency Task Force, the Federal agencies 
     represented on the Interagency Task Force shall provide staff 
     from the agencies to support information, data collection, 
     and analyses required by the Interagency Task Force.
       (g) Hearings.--Upon request of the Chair, the Interagency 
     Task Force may hold such hearings, meet and act at such times 
     and places, take such testimony, and receive such evidence as 
     the Interagency Task Force considers to be appropriate.

     SEC. 1015. OFFICE OF CLIMATE CHANGE TECHNOLOGY.

       (a) Establishment.--
       (1) In general.--There is established, within the 
     Department, the Office of Climate Change Technology.
       (2) Duties.--The Department Office shall--
       (A) manage an energy technology research and development 
     program that directly supports the Strategy by--
       (i) focusing on high-risk, bold, breakthrough technologies 
     that--

       (I) have significant promise of contributing to the long-
     term goal of the Strategy by--

       (aa) mitigating the emissions of greenhouse gases;
       (bb) removing and sequestering greenhouse gases from 
     emission streams; or
       (cc) removing and sequestering greenhouse gases from the 
     atmosphere;

       (II) are not being addressed significantly by other Federal 
     programs; and
       (III) would represent a substantial advance beyond 
     technology available on the date of enactment of this 
     subtitle;

       (ii) forging fundamentally new research and development 
     partnerships among various Department, other Federal, and 
     State programs, particularly between basic science and energy 
     technology programs, in cases in which such partnerships have 
     significant potential to affect the ability of the United 
     States to achieve the long-term goal of the Strategy at the 
     lowest possible cost;
       (iii) forging international research and development 
     partnerships that are in the interests of the United States 
     and make progress on achieving the long-term goal of the 
     Strategy;
       (iv) making available, through monitoring, experimentation, 
     and analysis, data that are essential to proving the 
     technical and economic viability of technology central to 
     addressing climate change; and
       (v) transferring research and development programs to other 
     program offices of the Department once such a research and 
     development program crosses the threshold of high-risk 
     research and moves into the realm of more conventional 
     technology development;
       (B) through active participation in the Interagency Task 
     Force and utilization of the analytical capabilities of the 
     Department Office, share analyses of alternative climate 
     change strategies with other agencies represented on the 
     Interagency Task Force to assist them in understanding--
       (i) the scale of the climate change challenge; and
       (ii) how actions of the Federal agencies on the Interagency 
     Task Force positively or negatively contribute to climate 
     change solutions;
       (C) provide analytical support to the White House Office, 
     particularly in support of the development of the Strategy 
     and associated progress reporting;
       (D) foster the development of tools, data, and capabilities 
     to ensure that--
       (i) the United States has a robust capability for 
     evaluating alternative climate change response scenarios; and
       (ii) the Department Office provides long-term analytical 
     continuity during the terms of service of successive 
     Presidents;
       (E) identify the total contribution of all Department 
     programs to the Strategy; and
       (F) advise the Secretary on all aspects of climate change-
     related issues, including necessary changes in Department 
     organization, management, budgeting, and personnel allocation 
     in the programs involved in climate change response-related 
     activities.
       (3) Annual reports.--The Department Office shall prepare an 
     annual report for submission by the Secretary to Congress and 
     the White House Office that--
       (A) assesses progress toward meeting the goals of the 
     energy technology research and development program described 
     in this section;
       (B) assesses the activities of the Department Office;
       (C) assesses the contributions of all energy technology 
     research and development programs of the Department 
     (including science programs) to the long-term goal and other 
     requirements of the Strategy; and
       (D) make recommendations for actions by the Department and 
     other Federal agencies to address the components of 
     technology development that are necessary to support the 
     Strategy.
       (b) Director of the Department Office.--
       (1) In general.--The Department Office shall be headed by a 
     Director, who shall be a qualified individual appointed by 
     the President, and who shall be compensated at a rate 
     provided for level IV of the Executive Schedule under section 
     5315 of title 5, United States Code.
       (2) Reporting.--The Director of the Department Office shall 
     report directly to the Under Secretary for Energy and 
     Science.
       (3) Vacancies.--A vacancy in the position of the Director 
     of the Department Office shall be filled in the same manner 
     as the original appointment was made.
       (c) Intergovernmental Personnel.--The Department Office may 
     use the authority provided by the Intergovernmental Personnel 
     Act of 1970 (42 U.S.C. 4701 et seq.), subchapter VI of 
     chapter 33 of title 5, United States Code, and other 
     departmental personnel authorities, to obtain staff for 
     appointments of a limited term.
       (d) Relationship to Other Department Programs.--Each 
     project carried out by the Department Office shall be--
       (1) initiated only after consultation with one or more 
     other appropriate program offices of the Department that 
     support research and development in the areas relating to the 
     project;
       (2) managed by the Department Office; and
       (3) in the case of a project that reaches a sufficient 
     level of maturity, with the concurrence of the Department 
     Office and the appropriate office described in paragraph (1), 
     transferred to the appropriate office, along with the funds 
     necessary to continue the project to the point at which non-
     Federal funding can provide substantial support for the 
     project.
       (e) Collaboration and Cost Sharing.--
       (1) With other federal agencies.--Projects supported by the 
     Department Office may include participation of, and be 
     supported by, other Federal agencies that have a role in the 
     development, commercialization, or transfer of energy, 
     transportation, industrial, agricultural, forestry, or other 
     climate change-related technology.
       (2) With the private sector.--
       (A) In general.--Notwithstanding section 1403, the 
     Department Office shall create an operating model that allows 
     for collaboration, division of effort, and cost sharing with 
     industry on individual climate change response projects.
       (B) Requirements.--Although cost sharing in some cases may 
     be appropriate, the Department Office shall focus on long-
     term high-risk research and development and should not make 
     industrial partnerships or cost sharing a requirement, if 
     such a requirement would bias the activities of the 
     Department Office toward incremental innovations.
       (C) Reevaluation on transfer.--At such time as any bold, 
     breakthrough research and development program reaches a 
     sufficient level of technological maturity such that the 
     program is

[[Page S3738]]

     transferred to a program office of the Department other than 
     the Department Office, the cost-sharing requirements and 
     criteria applicable to the program shall be reevaluated.
       (D) Publication in federal register.--Each cost-sharing 
     agreement entered into under this paragraph shall be 
     published in the Federal Register.
       (f) Analysis of Climate Change Strategy.--
       (1) In general.--The Department Office shall foster the 
     development and application of advanced computational tools, 
     data, and capabilities that, together with the capabilities 
     of other Federal agencies, support integrated assessment of 
     alternative climate change response scenarios and 
     implementation of the Strategy.
       (2) Programs.--
       (A) In general.--The Department Office shall--
       (i) develop and maintain core analytical competencies and 
     complex, integrated computational modeling capabilities that, 
     together with the capabilities of other Federal agencies, are 
     necessary to support the design and implementation of the 
     Strategy; and
       (ii) track United States and international progress toward 
     the long-term goal of the Strategy.
       (B) International carbon dioxide sequestration monitoring 
     and data program.--In consultation with Federal, State, 
     academic, scientific, private sector, nongovernmental, 
     tribal, and international carbon capture and sequestration 
     technology programs, the Department Office shall design and 
     carry out an international carbon dioxide sequestration 
     monitoring and data program to collect, analyze, and make 
     available the technical and economic data to ascertain--
       (i) whether engineered sequestration and terrestrial 
     sequestration will be acceptable technologies from 
     regulatory, economic, and international perspectives;
       (ii) whether carbon dioxide sequestered in geological 
     formations or ocean systems is stable and has inconsequential 
     leakage rates on a geologic time-scale; and
       (iii) the extent to which forest, agricultural, and other 
     terrestrial systems are suitable carbon sinks.
       (3) Areas of expertise.--
       (A) In general.--The Department Office shall develop and 
     maintain expertise in integrated assessment, modeling, and 
     related capabilities necessary--
       (i) to understand the relationship between natural, 
     agricultural, industrial, energy, and economic systems;
       (ii) to design effective research and development programs; 
     and
       (iii) to assist with the development and implementation of 
     the Strategy.
       (B) Technology transfer and diffusion.--The expertise 
     described in clause (i) shall include knowledge of technology 
     transfer and technology diffusion in United States and 
     foreign markets.
       (4) Dissemination of information.--The Department Office 
     shall ensure, to the maximum extent practicable, that 
     technical and scientific knowledge relating to greenhouse gas 
     emission reduction, avoidance, and sequestration is broadly 
     disseminated through publications, fellowships, and training 
     programs.
       (5) Assessments.--In a manner consistent with the Strategy, 
     the Department shall conduct assessments of deployment of 
     climate-friendly technology.
       (6) Analysis.--During development of the Strategy, annual 
     reports submitted under subsection (a)(3), and advice to the 
     Secretary, the Director of the Department Office shall place 
     significant emphasis on the use of objective, quantitative 
     analysis, taking into consideration any associated 
     uncertainties.
       (g) Authorization of Appropriations.--
       (1) Use of available appropriations.--From funds made 
     available to Federal agencies for the fiscal year in which 
     this subtitle is enacted, the President shall provide such 
     sums as are necessary to carry out the duties of the 
     Department Office under this subtitle until the date on which 
     funds are made available under paragraph (2).
       (2) Authorization of appropriations.--There is authorized 
     to be appropriated to the Secretary, to carry out the duties 
     of the Department Office under this subtitle, $4,750,000,000 
     for the period of fiscal years 2003 through 2011, to remain 
     available through September 30, 2011.
       (3) Additonal amounts.--Amounts authorized to be 
     appropriated under this section shall be in addition to--
       (A) amounts made available to carry out the United States 
     Global Change Research Program under the Global Change 
     Research Act of 1990 (15 U.S.C. 2921 et seq.); and
       (B) amounts made available under other provisions of law 
     for energy research and development.

     SEC. 1016. ADDITIONAL OFFICES AND ACTIVITIES.

       The Secretary of Agriculture, the Secretary of 
     Transportation, the Secretary of Commerce, the Administrator 
     of the Environmental Protection Agency, and the heads of 
     other Federal agencies may establish such offices and carry 
     out such activities, in addition to those established or 
     authorized by this Act, as are necessary to carry out this 
     Act.

               Subtitle C--Science and Technology Policy

     SEC. 1021. GLOBAL CLIMATE CHANGE IN THE OFFICE OF SCIENCE AND 
                   TECHNOLOGY POLICY.

       Section 101(b) of the National Science and Technology 
     Policy, Organization, and Priorities Act of 1976 (42 U.S.C. 
     6601(b)) is amended--
       (1) by redesignating paragraphs (7) through (13) as 
     paragraphs (8) through (14), respectively; and
       (2) by inserting after paragraph (6) the following:
       ``(7) improving efforts to understand, assess, predict, 
     mitigate, and respond to global climate change;''.

     SEC. 1022. DIRECTOR OF OFFICE OF SCIENCE AND TECHNOLOGY 
                   POLICY FUNCTIONS.

       (a) Advise President on Global Climate Change.--Section 
     204(b)(1) of the National Science and Technology Policy, 
     Organization, and Priorities Act of 1976 (42 U.S.C. 
     6613(b)(1)) is amended by inserting ``global climate 
     change,'' after ``to,''.
       (b) Advise Director of Office of National Climate Change 
     Policy.--Section 207 of that Act (42 U.S.C. 6616) is 
     amended--
       (1) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) Advise Director of Office of National Climate Change 
     Policy.--In carrying out this Act, the Director shall advise 
     the Director of the Office of National Climate Change Policy 
     on matters concerning science and technology as they relate 
     to global climate change.''.

                  Subtitle D--Miscellaneous Provisions

     SEC. 1031. ADDITIONAL INFORMATION FOR REGULATORY REVIEW.

       In each case that an agency prepares and submits a 
     Statement of Energy Effects pursuant to Executive Order 13211 
     of May 18, 2001 (relating to actions concerning regulations 
     that significantly affect energy supply, distribution, or 
     use), the agency shall also submit an estimate of the change 
     in net annual greenhouse gas emissions resulting from the 
     proposed significant energy action and any reasonable 
     alternatives to the action.

     SEC. 1032. GREENHOUSE GAS EMISSIONS FROM FEDERAL FACILITIES.

       (a) Methodology.--Not later than 1 year after the date of 
     enactment of this section, the Secretary of Energy, Secretary 
     of Agriculture, Secretary of Commerce, and Administrator of 
     the Environmental Protection Agency shall publish a jointly 
     developed methodology for preparing estimates of annual net 
     greenhouse gas emissions from all federally owned, leased, or 
     operated facilities and emission sources, including 
     stationary, mobile, and indirect emissions as may be 
     determined to be feasible.
       (b) Publication.--Not later than 18 months after the date 
     of enactment of this section, and annually thereafter, the 
     Secretary of Energy shall publish an estimate of annual net 
     greenhouse gas emissions from all federally owned, leased, or 
     operated facilities and emission sources, using the 
     methodology published under subsection (a).

               TITLE XI--NATIONAL GREENHOUSE GAS DATABASE

     SEC. 1101. PURPOSE.

       The purpose of this title is to establish a greenhouse gas 
     inventory, reductions registry, and information system that--
       (1) are complete, consistent, transparent, and accurate;
       (2) will create reliable and accurate data that can be used 
     by public and private entities to design efficient and 
     effective greenhouse gas emission reduction strategies; and
       (3) will acknowledge and encourage greenhouse gas emission 
     reductions.

     SEC. 1102. DEFINITIONS.

       In this title:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Baseline.--The term ``baseline'' means the historic 
     greenhouse gas emission levels of an entity, as adjusted 
     upward by the designated agency to reflect actual reductions 
     that are verified in accordance with--
       (A) regulations promulgated under section 1104(c)(1); and
       (B) relevant standards and methods developed under this 
     title.
       (3) Database.--The term ``database'' means the National 
     Greenhouse Gas Database established under section 1104.
       (4) Designated agency.--The term ``designated agency'' 
     means a department or agency to which responsibility for a 
     function or program is assigned under the memorandum of 
     agreement entered into under section 1103(a).
       (5) Direct emissions.--The term ``direct emissions'' means 
     greenhouse gas emissions by an entity from a facility that is 
     owned or controlled by that entity.
       (6) Entity.--The term ``entity'' means--
       (A) a person located in the United States; or
       (B) a public or private entity, to the extent that the 
     entity operates in the United States.
       (7) Facility.--The term ``facility'' means--
       (A) all buildings, structures, or installations located on 
     any 1 or more contiguous or adjacent properties of an entity 
     in the United States; and
       (B) a fleet of 20 or more motor vehicles under the common 
     control of an entity.
       (8) Greenhouse gas.--The term ``greenhouse gas'' means--
       (A) carbon dioxide;
       (B) methane;
       (C) nitrous oxide;
       (D) hydrofluorocarbons;
       (E) perfluorocarbons;
       (F) sulfur hexafluoride; and
       (G) any other anthropogenic climate-forcing emissions with 
     significant ascertainable global warming potential, as--
       (i) recommended by the National Academy of Sciences under 
     section 1107(b)(3); and
       (ii) determined in regulations promulgated under section 
     1104(c)(1) (or revisions to the regulations) to be 
     appropriate and practicable for coverage under this title.
       (9) Indirect emissions.--The term ``indirect emissions'' 
     means greenhouse gas emissions that--
       (A) are a result of the activities of an entity; but

[[Page S3739]]

       (B)(i) are emitted from a facility owned or controlled by 
     another entity; and
       (ii) are not reported as direct emissions by the entity the 
     activities of which resulted in the emissions.
       (10) Registry.--The term ``registry'' means the registry of 
     greenhouse gas emission reductions established as a component 
     of the database under section 1104(b)(2).
       (11) Sequestration.--
       (A) In general.--The term ``sequestration'' means the 
     capture, long-term separation, isolation, or removal of 
     greenhouse gases from the atmosphere.
       (B) Inclusions.--The term ``sequestration'' includes--
       (i) soil carbon sequestration;
       (ii) agricultural and conservation practices;
       (iii) reforestation;
       (iv) forest preservation;
       (v) maintenance of an underground reservoir; and
       (vi) any other appropriate biological or geological method 
     of capture, isolation, or removal of greenhouse gases from 
     the atmosphere, as determined by the Administrator.

     SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the President, acting through the 
     Director of the Office of National Climate Change Policy, 
     shall direct the Secretary of Energy, the Secretary of 
     Commerce, the Secretary of Agriculture, the Secretary of 
     Transportation, and the Administrator to enter into a 
     memorandum of agreement under which those heads of Federal 
     agencies will--
       (1) recognize and maintain statutory and regulatory 
     authorities, functions, and programs that--
       (A) are established as of the date of enactment of this Act 
     under other law;
       (B) provide for the collection of data relating to 
     greenhouse gas emissions and effects; and
       (C) are necessary for the operation of the database;
       (2)(A) distribute additional responsibilities and 
     activities identified under this title to Federal departments 
     or agencies in accordance with the missions and expertise of 
     those departments and agencies; and
       (B) maximize the use of available resources of those 
     departments and agencies; and
       (3) provide for the comprehensive collection and analysis 
     of data on greenhouse gas emissions relating to product use 
     (including the use of fossil fuels and energy-consuming 
     appliances and vehicles).
       (b) Minimum Requirements.--The memorandum of agreement 
     entered into under subsection (a) shall, at a minimum, retain 
     the following functions for the designated agencies:
       (1) Department of energy.--The Secretary of Energy shall be 
     primarily responsible for developing, maintaining, and 
     verifying the registry and the emission reductions reported 
     under section 1605(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13385(b)).
       (2) Department of commerce.--The Secretary of Commerce 
     shall be primarily responsible for the development of--
       (A) measurement standards for the monitoring of emissions; 
     and
       (B) verification technologies and methods to ensure the 
     maintenance of a consistent and technically accurate record 
     of emissions, emission reductions, and atmospheric 
     concentrations of greenhouse gases for the database.
       (3) Environmental protection agency.--The Administrator 
     shall be primarily responsible for--
       (A) emissions monitoring, measurement, verification, and 
     data collection under this title and title IV (relating to 
     acid deposition control) and title VIII of the Clean Air Act 
     (42 U.S.C. 7651 et seq.), including mobile source emissions 
     information from implementation of the corporate average fuel 
     economy program under chapter 329 of title 49, United States 
     Code; and
       (B) responsibilities of the Environmental Protection Agency 
     relating to completion of the national inventory for 
     compliance with the United Nations Framework Convention on 
     Climate Change, done at New York on May 9, 1992.
       (4) Department of agriculture.--The Secretary of 
     Agriculture shall be primarily responsible for--
       (A) developing measurement techniques for--
       (i) soil carbon sequestration; and
       (ii) forest preservation and reforestation activities; and
       (B) providing technical advice relating to biological 
     carbon sequestration measurement and verification standards 
     for measuring greenhouse gas emission reductions or offsets.
       (c) Draft Memorandum of Agreement.--Not later than 15 
     months after the date of enactment of this Act, the 
     President, acting through the Director of the Office of 
     National Climate Change Policy, shall publish in the Federal 
     Register, and solicit comments on, a draft version of the 
     memorandum of agreement described in subsection (a).
       (d) No Judicial Review.--The final version of the 
     memorandum of agreement shall not be subject to judicial 
     review.

     SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.

       (a) Establishment.--As soon as practicable after the date 
     of enactment of this Act, the designated agencies, in 
     consultation with the private sector and nongovernmental 
     organizations, shall jointly establish, operate, and maintain 
     a database, to be known as the ``National Greenhouse Gas 
     Database'', to collect, verify, and analyze information on 
     greenhouse gas emissions by entities.
       (b) National Greenhouse Gas Database Components.--The 
     database shall consist of--
       (1) an inventory of greenhouse gas emissions; and
       (2) a registry of greenhouse gas emission reductions.
       (c) Comprehensive System.--
       (1) In general.--Not later than 2 years after the date of 
     enactment of this Act, the designated agencies shall jointly 
     promulgate regulations to implement a comprehensive system 
     for greenhouse gas emissions reporting, inventorying, and 
     reductions registration.
       (2) Requirements.--The designated agencies shall ensure, to 
     the maximum extent practicable, that--
       (A) the comprehensive system described in paragraph (1) is 
     designed to--
       (i) maximize completeness, transparency, and accuracy of 
     information reported; and
       (ii) minimize costs incurred by entities in measuring and 
     reporting greenhouse gas emissions; and
       (B) the regulations promulgated under paragraph (1) 
     establish procedures and protocols necessary--
       (i) to prevent the reporting of some or all of the same 
     greenhouse gas emissions or emission reductions by more than 
     1 reporting entity;
       (ii) to provide for corrections to errors in data submitted 
     to the database;
       (iii) to provide for adjustment to data by reporting 
     entities that have had a significant organizational change 
     (including mergers, acquisitions, and divestiture), in order 
     to maintain comparability among data in the database over 
     time;
       (iv) to provide for adjustments to reflect new technologies 
     or methods for measuring or calculating greenhouse gas 
     emissions; and
       (v) to account for changes in registration of ownership of 
     emission reductions resulting from a voluntary private 
     transaction between reporting entities.
       (3) Baseline identification and protection.--Through 
     regulations promulgated under paragraph (1), the designated 
     agencies shall develop and implement a system that provides--
       (A) for the provision of unique serial numbers to identify 
     the verified emission reductions made by an entity relative 
     to the baseline of the entity;
       (B) for the tracking of the reductions associated with the 
     serial numbers; and
       (C) that the reductions may be applied, as determined to be 
     appropriate by any Act of Congress enacted after the date of 
     enactment of this Act, toward a Federal requirement under 
     such an Act that is imposed on the entity for the purpose of 
     reducing greenhouse gas emissions.

     SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.

       (a) In General.--An entity that participates in the 
     registry shall meet the requirements described in subsection 
     (b).
       (b) Requirements.--
       (1) In general.--The requirements referred to in subsection 
     (a) are that an entity (other than an entity described in 
     paragraph (2)) shall--
       (A) establish a baseline (including all of the entity's 
     greenhouse gas emissions on an entity-wide basis); and
       (B) submit the report described in subsection (c)(1).
       (2) Requirements applicable to entities entering into 
     certain agreements.--An entity that enters into an agreement 
     with a participant in the registry for the purpose of a 
     carbon sequestration project shall not be required to comply 
     with the requirements specified in paragraph (1) unless that 
     entity is required to comply with the requirements by reason 
     of an activity other than the agreement.
       (c) Reports.--
       (1) Required report.--Not later than April 1 of the third 
     calendar year that begins after the date of enactment of this 
     Act, and not later than April 1 of each calendar year 
     thereafter, subject to paragraph (3), an entity described in 
     subsection (a) shall submit to each appropriate designated 
     agency a report that describes, for the preceding calendar 
     year, the entity-wide greenhouse gas emissions (as reported 
     at the facility level), including--
       (A) the total quantity of each greenhouse gas emitted, 
     expressed in terms of mass and in terms of the quantity of 
     carbon dioxide equivalent;
       (B) an estimate of the greenhouse gas emissions from fossil 
     fuel combusted by products manufactured and sold by the 
     entity in the previous calendar year, determined over the 
     average lifetime of those products; and
       (C) such other categories of emissions as the designated 
     agency determines in the regulations promulgated under 
     section 1104(c)(1) may be practicable and useful for the 
     purposes of this title, such as--
       (i) direct emissions from stationary sources;
       (ii) indirect emissions from imported electricity, heat, 
     and steam;
       (iii) process and fugitive emissions; and
       (iv) production or importation of greenhouse gases.
       (2) Voluntary reporting.--An entity described in subsection 
     (a) may (along with establishing a baseline and reporting 
     reductions under this section)--
       (A) submit a report described in paragraph (1) before the 
     date specified in that paragraph for the purposes of 
     achieving and commoditizing greenhouse gas reductions through 
     use of the registry; and
       (B) submit to any designated agency, for inclusion in the 
     registry, information that has been verified in accordance 
     with regulations promulgated under section 1104(c)(1) and 
     that relates to--
       (i) with respect to the calendar year preceding the 
     calendar year in which the information is submitted, and with 
     respect to any greenhouse gas emitted by the entity--

       (I) project reductions from facilities owned or controlled 
     by the reporting entity in the United States;
       (II) transfers of project reductions to and from any other 
     entity;
       (III) project reductions and transfers of project 
     reductions outside the United States;

[[Page S3740]]

       (IV) other indirect emissions that are not required to be 
     reported under paragraph (1); and
       (V) product use phase emissions;

       (ii) with respect to greenhouse gas emission reductions 
     activities of the entity that have been carried out during or 
     after 1990, verified in accordance with regulations 
     promulgated under section 1104(c)(1), and submitted to 1 or 
     more designated agencies before the date that is 4 years 
     after the date of enactment of this Act, any greenhouse gas 
     emission reductions that have been reported or submitted by 
     an entity under--

       (I) section 1605(b) of the Energy Policy Act of 1992 (42 
     U.S.C. 13385(b)); or
       (II) any other Federal or State voluntary greenhouse gas 
     reduction program; and

       (iii) any project or activity for the reduction of 
     greenhouse gas emissions or sequestration of a greenhouse gas 
     that is carried out by the entity, including a project or 
     activity relating to--

       (I) fuel switching;
       (II) energy efficiency improvements;
       (III) use of renewable energy;
       (IV) use of combined heat and power systems;
       (V) management of cropland, grassland, or grazing land;
       (VI) a forestry activity that increases forest carbon 
     stocks or reduces forest carbon emissions;
       (VII) carbon capture and storage;
       (VIII) methane recovery;
       (IX) greenhouse gas offset investment; and
       (X) any other practice for achieving greenhouse gas 
     reductions as recognized by 1 or more designated agencies.

       (3) Exemptions from reporting.--
       (A) In general.--If the Director of the Office of National 
     Climate Change Policy determines under section 1108(b) that 
     the reporting requirements under paragraph (1) shall apply to 
     all entities (other than entities exempted by this 
     paragraph), regardless of participation or nonparticipation 
     in the registry, an entity shall be required to submit 
     reports under paragraph (1) only if, in any calendar year 
     after the date of enactment of this Act--
       (i) the total greenhouse gas emissions of at least 1 
     facility owned by the entity exceeds 10,000 metric tons of 
     carbon dioxide equivalent (or such greater quantity as may be 
     established by a designated agency by regulation); or
       (ii)(I) the total quantity of greenhouse gases produced, 
     distributed, or imported by the entity exceeds 10,000 metric 
     tons of carbon dioxide equivalent (or such greater quantity 
     as may be established by a designated agency by regulation); 
     and
       (II) the entity is not a feedlot or other farming operation 
     (as defined in section 101 of title 11, United States Code).
       (B) Entities already reporting.--
       (i) In general.--An entity that, as of the date of 
     enactment of this Act, is required to report carbon dioxide 
     emissions data to a Federal agency shall not be required to 
     re-report that data for the purposes of this title.
       (ii) Review of participation.--For the purpose of section 
     1108, emissions reported under clause (i) shall be considered 
     to be reported by the entity to the registry.
       (4) Provision of verification information by reporting 
     entities.--Each entity that submits a report under this 
     subsection shall provide information sufficient for each 
     designated agency to which the report is submitted to verify, 
     in accordance with measurement and verification methods and 
     standards developed under section 1106, that the greenhouse 
     gas report of the reporting entity--
       (A) has been accurately reported; and
       (B) in the case of each voluntary report under paragraph 
     (2), represents--
       (i) actual reductions in direct greenhouse gas emissions--

       (I) relative to historic emission levels of the entity; and
       (II) net of any increases in--

       (aa) direct emissions; and
       (bb) indirect emissions described in paragraph (1)(C)(ii); 
     or
       (ii) actual increases in net sequestration.
       (5) Failure to submit report.--An entity that participates 
     or has participated in the registry and that fails to submit 
     a report required under this subsection shall be prohibited 
     from including emission reductions reported to the registry 
     in the calculation of the baseline of the entity in future 
     years.
       (6) Independent third-party verification.--To meet the 
     requirements of this section and section 1106, a entity that 
     is required to submit a report under this section may--
       (A) obtain independent third-party verification; and
       (B) present the results of the third-party verification to 
     each appropriate designated agency.
       (7) Availability of data.--
       (A) In general.--The designated agencies shall ensure, to 
     the maximum extent practicable, that information in the 
     database is--
       (i) published;
       (ii) accessible to the public; and
       (iii) made available in electronic format on the Internet.
       (B) Exception.--Subparagraph (A) shall not apply in any 
     case in which the designated agencies determine that 
     publishing or otherwise making available information 
     described in that subparagraph poses a risk to national 
     security.
       (8) Data infrastructure.--The designated agencies shall 
     ensure, to the maximum extent practicable, that the database 
     uses, and is integrated with, Federal, State, and regional 
     greenhouse gas data collection and reporting systems in 
     effect as of the date of enactment of this Act.
       (9) Additional issues to be considered.--In promulgating 
     the regulations under section 1104(c)(1) and implementing the 
     database, the designated agencies shall take into 
     consideration a broad range of issues involved in 
     establishing an effective database, including--
       (A) the appropriate units for reporting each greenhouse 
     gas;
       (B) the data and information systems and measures necessary 
     to identify, track, and verify greenhouse gas emission 
     reductions in a manner that will encourage the development of 
     private sector trading and exchanges;
       (C) the greenhouse gas reduction and sequestration methods 
     and standards applied in other countries, as applicable or 
     relevant;
       (D) the extent to which available fossil fuels, greenhouse 
     gas emissions, and greenhouse gas production and importation 
     data are adequate to implement the database;
       (E) the differences in, and potential uniqueness of, the 
     facilities, operations, and business and other relevant 
     practices of persons and entities in the private and public 
     sectors that may be expected to participate in the registry; 
     and
       (F) the need of the registry to maintain valid and reliable 
     information on baselines of entities so that, in the event of 
     any future action by Congress to require entities, 
     individually or collectively, to reduce greenhouse gas 
     emissions, Congress will be able--
       (i) to take into account that information; and
       (ii) to avoid enacting legislation that penalizes entities 
     for achieving and reporting reductions.
       (d) Annual Report.--The designated agencies shall jointly 
     publish an annual report that--
       (1) describes the total greenhouse gas emissions and 
     emission reductions reported to the database during the year 
     covered by the report;
       (2) provides entity-by-entity and sector-by-sector analyses 
     of the emissions and emission reductions reported;
       (3) describes the atmospheric concentrations of greenhouse 
     gases; and
       (4) provides a comparison of current and past atmospheric 
     concentrations of greenhouse gases.

     SEC. 1106. MEASUREMENT AND VERIFICATION.

       (a) Standards.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the designated agencies shall jointly 
     develop comprehensive measurement and verification methods 
     and standards to ensure a consistent and technically accurate 
     record of greenhouse gas emissions, emission reductions, 
     sequestration, and atmospheric concentrations for use in the 
     registry.
       (2) Requirements.--The methods and standards developed 
     under paragraph (1) shall address the need for--
       (A) standardized measurement and verification practices for 
     reports made by all entities participating in the registry, 
     taking into account--
       (i) protocols and standards in use by entities desiring to 
     participate in the registry as of the date of development of 
     the methods and standards under paragraph (1);
       (ii) boundary issues, such as leakage and shifted use;
       (iii) avoidance of double counting of greenhouse gas 
     emissions and emission reductions; and
       (iv) such other factors as the designated agencies 
     determine to be appropriate;
       (B) measurement and verification of actions taken to 
     reduce, avoid, or sequester greenhouse gas emissions;
       (C) in coordination with the Secretary of Agriculture, 
     measurement of the results of the use of carbon sequestration 
     and carbon recapture technologies, including--
       (i) organic soil carbon sequestration practices; and
       (ii) forest preservation and reforestation activities that 
     adequately address the issues of permanence, leakage, and 
     verification;
       (D) such other measurement and verification standards as 
     the Secretary of Commerce, the Secretary of Agriculture, the 
     Administrator, and the Secretary of Energy determine to be 
     appropriate; and
       (E) other factors that, as determined by the designated 
     agencies, will allow entities to adequately establish a fair 
     and reliable measurement and reporting system.
       (b) Review and Revision.--The designated agencies shall 
     periodically review, and revise as necessary, the methods and 
     standards developed under subsection (a).
       (c) Public Participation.--The Secretary of Commerce 
     shall--
       (1) make available to the public for comment, in draft form 
     and for a period of at least 90 days, the methods and 
     standards developed under subsection (a); and
       (2) after the 90-day period referred to in paragraph (1), 
     in coordination with the Secretary of Energy, the Secretary 
     of Agriculture, and the Administrator, adopt the methods and 
     standards developed under subsection (a) for use in 
     implementing the database.
       (d) Experts and Consultants.--
       (1) In general.--The designated agencies may obtain the 
     services of experts and consultants in the private and 
     nonprofit sectors in accordance with section 3109 of title 5, 
     United States Code, in the areas of greenhouse gas 
     measurement, certification, and emission trading.
       (2) Available arrangements.--In obtaining any service 
     described in paragraph (1), the designated agencies may use 
     any available grant, contract, cooperative agreement, or 
     other arrangement authorized by law.

     SEC. 1107. INDEPENDENT REVIEWS.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this Act, and every 3 years thereafter, the 
     Comptroller General of the United States shall submit to 
     Congress a report that--
       (1) describes the efficacy of the implementation and 
     operation of the database; and
       (2) includes any recommendations for improvements to this 
     title and programs carried out under this title--
       (A) to achieve a consistent and technically accurate record 
     of greenhouse gas emissions, emission reductions, and 
     atmospheric concentrations; and

[[Page S3741]]

       (B) to achieve the purposes of this title.
       (b) Review of Scientific Methods.--The designated agencies 
     shall enter into an agreement with the National Academy of 
     Sciences under which the National Academy of Sciences shall--
       (1) review the scientific methods, assumptions, and 
     standards used by the designated agencies in implementing 
     this title;
       (2) not later than 4 years after the date of enactment of 
     this Act, submit to Congress a report that describes any 
     recommendations for improving--
       (A) those methods and standards; and
       (B) related elements of the programs, and structure of the 
     database, established by this title; and
       (3) regularly review and update as appropriate the list of 
     anthropogenic climate-forcing emissions with significant 
     global warming potential described in section 1102(8)(G).

     SEC. 1108. REVIEW OF PARTICIPATION.

       (a) In General.--Not later than 5 years after the date of 
     enactment of this Act, the Director of the Office of National 
     Climate Change Policy shall determine whether the reports 
     submitted to the registry under section 1105(c)(1) represent 
     less than 60 percent of the national aggregate anthropogenic 
     greenhouse gas emissions.
       (b) Increased Applicability of Requirements.--If the 
     Director of the Office of National Climate Change Policy 
     determines under subsection (a) that less than 60 percent of 
     the aggregate national anthropogenic greenhouse gas emissions 
     are being reported to the registry--
       (1) the reporting requirements under section 1105(c)(1) 
     shall apply to all entities (except entities exempted under 
     section 1105(c)(3)), regardless of any participation or 
     nonparticipation by the entities in the registry; and
       (2) each entity shall submit a report described in section 
     1105(c)(1)--
       (A) not later than the earlier of--
       (i) April 30 of the calendar year immediately following the 
     year in which the Director of the Office of National Climate 
     Change Policy makes the determination under subsection (a); 
     or
       (ii) the date that is 1 year after the date on which the 
     Director of the Office of National Climate Change Policy 
     makes the determination under subsection (a); and
       (B) annually thereafter.
       (c) Resolution of Disapproval.--For the purposes of this 
     section, the determination of the Director of the Office of 
     National Climate Change Policy under subsection (a) shall be 
     considered to be a major rule (as defined in section 804(2) 
     of title 5, United States Code) subject to the congressional 
     disapproval procedure under section 802 of title 5, United 
     States Code.

     SEC. 1109. ENFORCEMENT.

       If an entity that is required to report greenhouse gas 
     emissions under section 1105(c)(1) or 1108 fails to comply 
     with that requirement, the Attorney General may, at the 
     request of the designated agencies, bring a civil action in 
     United States district court against the entity to impose on 
     the entity a civil penalty of not more than $25,000 for each 
     day for which the entity fails to comply with that 
     requirement.

     SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMONIZATION.

       Not later than 3 years after the date of enactment of this 
     Act, the President shall submit to Congress a report that 
     describes any modifications to this title or any other 
     provision of law that are necessary to improve the accuracy 
     or operation of the database and related programs under this 
     title.

     SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as are 
     necessary to carry out this title.

       DIVISION E--ENHANCING RESEARCH, DEVELOPMENT, AND TRAINING

          TITLE XII--ENERGY RESEARCH AND DEVELOPMENT PROGRAMS

     SEC. 1201. SHORT TITLE.

       This division may be cited as the ``Energy Science and 
     Technology Enhancement Act of 2002''.

     SEC. 1202. FINDINGS.

       The Congress finds the following:
       (1) A coherent national energy strategy requires an energy 
     research and development program that supports basic energy 
     research and provides mechanisms to develop, demonstrate, and 
     deploy new energy technologies in partnership with industry.
       (2) An aggressive national energy research, development, 
     demonstration, and technology deployment program is an 
     integral part of a national climate change strategy, because 
     it can reduce--
       (A) United States energy intensity by 1.9 percent per year 
     from 1999 to 2020;
       (B) United States energy consumption in 2020 by 8 
     quadrillion Btu from otherwise expected levels; and
       (C) United States carbon dioxide emissions from expected 
     levels by 166 million metric tons in carbon equivalent in 
     2020.
       (3) An aggressive national energy research, development, 
     demonstration, and technology deployment program can help 
     maintain domestic United States production of energy, 
     increase United States hydrocarbon reserves by 14 percent, 
     and lower natural gas prices by 20 percent, compared to 
     estimates for 2020.
       (4) An aggressive national energy research, development, 
     demonstration, and technology deployment program is needed if 
     United States suppliers and manufacturers are to compete in 
     future markets for advanced energy technologies.

     SEC. 1203. DEFINITIONS.

       In this title:
       (1) Department.--The term ``Department'' means the 
     Department of Energy.
       (2) Departmental mission.--The term ``departmental 
     mission'' means any of the functions vested in the Secretary 
     of Energy by the Department of Energy Organization Act (42 
     U.S.C. 7101 et seq.) or other law.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given 
     that term in section 1201(a) of the Higher Education Act of 
     1965 (20 U.S.C. 1141(a));
       (4) National laboratory.--The term ``National Laboratory'' 
     means any of the following multipurpose laboratories owned by 
     the Department of Energy--
       (A) Argonne National Laboratory;
       (B) Brookhaven National Laboratory;
       (C) Idaho National Engineering and Environmental 
     Laboratory;
       (D) Lawrence Berkeley National Laboratory;
       (E) Lawrence Livermore National Laboratory;
       (F) Los Alamos National Laboratory;
       (G) National Energy Technology Laboratory;
       (H) National Renewable Energy Laboratory;
       (I) Oak Ridge National Laboratory;
       (J) Pacific Northwest National Laboratory; or
       (K) Sandia National Laboratory.
       (5) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (6) Technology deployment.--The term ``technology 
     deployment'' means activities to promote acceptance and 
     utilization of technologies in commercial application, 
     including activities undertaken pursuant to section 7 of the 
     Federal Nonnuclear Energy Research and Development Act of 
     1974 (42 U.S.C. 5906) or section 6 of the Renewable Energy 
     and Energy Efficiency Technology Competitiveness Act of 1989 
     (42 U.S.C. 12007).

     SEC. 1204. CONSTRUCTION WITH OTHER LAWS.

       Except as otherwise provided in this title and title XIV, 
     the Secretary shall carry out the research, development, 
     demonstration, and technology deployment programs authorized 
     by this title in accordance with the Atomic Energy Act of 
     1954 (42 U.S.C. 2011 et seq.), the Federal Nonnuclear 
     Research and Development Act of 1974 (42 U.S.C. 5901 et 
     seq.), the Energy Policy Act of 1992 (42 U.S.C. 13201 et 
     seq.), or any other Act under which the Secretary is 
     authorized to carry out such activities.

                     Subtitle A--Energy Efficiency

     SEC. 1211. ENHANCED ENERGY EFFICIENCY RESEARCH AND 
                   DEVELOPMENT.

       (a) Program Direction.--The Secretary shall conduct 
     balanced energy research, development, demonstration, and 
     technology deployment programs to enhance energy efficiency 
     in buildings, industry, power technologies, and 
     transportation.
       (b) Program Goals.--
       (1) Energy-efficient housing.--The goal of the energy-
     efficient housing program shall be to develop, in partnership 
     with industry, enabling technologies (including lighting 
     technologies), designs, production methods, and supporting 
     activities that will, by 2010--
       (A) cut the energy use of new housing by 50 percent, and
       (B) reduce energy use in existing homes by 30 percent.
       (2) Industrial energy efficiency.--The goal of the 
     industrial energy efficiency program shall be to develop, in 
     partnership with industry, enabling technologies, designs, 
     production methods, and supporting activities that will, by 
     2010, enable energy-intensive industries such as the 
     following industries to reduce their energy intensity by at 
     least 25 percent--
       (A) the wood product manufacturing industry;
       (B) the pulp and paper industry;
       (C) the petroleum and coal products manufacturing industry;
       (D) the mining industry;
       (E) the chemical manufacturing industry;
       (F) the glass and glass product manufacturing industry;
       (G) the iron and steel mills and ferroalloy manufacturing 
     industry;
       (H) the primary aluminum production industry;
       (I) the foundries industry; and
       (J) United States agriculture.
       (3) Transportation energy efficiency.--The goal of the 
     transportation energy efficiency program shall be to develop, 
     in partnership with industry, technologies that will enable 
     the achievement--
       (A) by 2010, passenger automobiles with a fuel economy of 
     80 miles per gallon;
       (B) by 2010, light trucks (classes 1 and 2a) with a fuel 
     economy of 60 miles per gallon;
       (C) by 2010, medium trucks and buses (classes 2b through 6 
     and class 8 transit buses) with a fuel economy, in ton-miles 
     per gallon, that is three times that of year 2000 equivalent 
     vehicles;
       (D) by 2010, heavy trucks (classes 7 and 8) with a fuel 
     economy, in ton-miles per gallon, that is two times that of 
     year 2000 equivalent vehicles; and
       (E) by 2015, the production of fuel-cell powered passenger 
     vehicles with a fuel economy of 110 miles per gallon.
       (4) Energy efficient distributed generation.--The goals of 
     the energy efficient on-site generation program shall be to 
     help remove environmental and regulatory barriers to on-site, 
     or distributed, generation and combined heat and power by 
     developing technologies by 2015 that achieve--
       (A) electricity generating efficiencies greater than 40 
     percent for on-site generation technologies based upon 
     natural gas, including fuel cells, microturbines, 
     reciprocating engines and industrial gas turbines;
       (B) combined heat and power total (electric and thermal) 
     efficiencies of more than 85 percent;

[[Page S3742]]

       (C) fuel flexibility to include hydrogen, biofuels and 
     natural gas;
       (D) near zero emissions of pollutants that form smog and 
     acid rain;
       (E) reduction of carbon dioxide emissions by at least 40 
     percent;
       (F) packaged system integration at end user facilities 
     providing complete services in heating, cooling, electricity 
     and air quality; and
       (G) increased reliability for the consumer and greater 
     stability for the national electricity grid.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for carrying out 
     research, development, demonstration, and technology 
     deployment activities under this subtitle--
       (1) $700,000,000 for fiscal year 2003;
       (2) $784,000,000 for fiscal year 2004;
       (3) $878,000,000 for fiscal year 2005; and
       (4) $983,000,000 for fiscal year 2006.
       (d) Limitation on Use of Funds.--None of the funds 
     authorized to be appropriated in subsection (c) may be used 
     for the following programs of the Department--
       (1) Weatherization Assistance Program;
       (2) State Energy Program; or
       (3) Federal Energy Management Program.

     SEC. 1212. ENERGY EFFICIENCY SCIENCE INITIATIVE.

       (a) Establishment and Authorization of Appropriations.--
     From amounts authorized under section 1211(c), there are 
     authorized to be appropriated not more than $50,000,000 in 
     any fiscal year, for an Energy Efficiency Science Initiative 
     to be managed by the Assistant Secretary in the Department 
     with responsibility for energy conservation under section 
     203(a)(9) of the Department of Energy Organization Act (42 
     U.S.C. 7133(a)(9)), in consultation with the Director of the 
     Office of Science, for grants to be competitively awarded and 
     subject to peer review for research relating to energy 
     efficiency.
       (b) Report.--The Secretary of Energy shall submit to the 
     Committee on Science and the Committee on Appropriations of 
     the United States House of Representatives, and to the 
     Committee on Energy and Natural Resources and the Committee 
     on Appropriations of the United States Senate, an annual 
     report on the activities of the Energy Efficiency Science 
     Initiative, including a description of the process used to 
     award the funds and an explanation of how the research 
     relates to energy efficiency.

     SEC. 1213. NEXT GENERATION LIGHTING INITIATIVE.

       (a) Establishment.--There is established in the Department 
     a Next Generation Lighting Initiative to research, develop, 
     and conduct demonstration activities on advanced solid-state 
     lighting technologies based on white light emitting diodes.
       (b) Objectives.--
       (1) In general.--The objectives of the initiative shall be 
     to develop, by 2011, advanced solid-state lighting 
     technologies based on white light emitting diodes that, 
     compared to incandescent and fluorescent lighting 
     technologies, are--
       (A) longer lasting;
       (B) more energy-efficient; and
       (C) cost-competitive.
       (2) Inorganic white light emitting diode.--The objective of 
     the initiative with respect to inorganic white light emitting 
     diodes shall be to develop an inorganic white light emitting 
     diode that has an efficiency of 160 lumens per watt and a 10-
     year lifetime.
       (3) Organic white light emitting diode.--The objective of 
     the initiative with respect to organic white light emitting 
     diodes shall be to develop an organic white light emitting 
     diode with an efficiency of 100 lumens per watt with a 5-year 
     lifetime that--
       (A) illuminates over a full color spectrum;
       (B) covers large areas over flexible surfaces; and
       (C) does not contain harmful pollutants typical of 
     fluorescent lamps such as mercury.
       (c) Consortium.--
       (1) In general.--The Secretary shall initiate and manage 
     basic and manufacturing-related research on advanced solid-
     state lighting technologies based on white light emitting 
     diodes for the initiative, in cooperation with the Next 
     Generation Lighting Initiative Consortium.
       (2) Composition.--The consortium shall be composed of 
     firms, national laboratories, and other entities so that the 
     consortium is representative of the United States solid-state 
     lighting research, development, and manufacturing expertise 
     as a whole.
       (3) Funding.--The consortium shall be funded by--
       (A) participation fees; and
       (B) grants provided under subsection (e)(1).
       (4) Eligibility.--To be eligible to receive a grant under 
     subsection (e)(1), the consortium shall--
       (A) enter into a consortium participation agreement that--
       (i) is agreed to by all participants; and
       (ii) describes the responsibilities of participants, 
     participation fees, and the scope of research activities; and
       (B) develop an annual program plan.
       (5) Intellectual property.--Participants in the consortium 
     shall have royalty-free nonexclusive rights to use 
     intellectual property derived from consortium research 
     conducted under subsection (e)(1).
       (d) Planning Board.--
       (1) In general.--Not later than 90 days after the 
     establishment of the consortium, the Secretary shall 
     establish and appoint the members of a planning board, to be 
     known as the ``Next Generation Lighting Initiative Planning 
     Board'', to assist the Secretary in carrying out this 
     section.
       (2) Composition.--The planning board shall be composed of--
       (A) four members from universities, national laboratories, 
     and other individuals with expertise in advanced solid-state 
     lighting and technologies based on white light emitting 
     diodes; and
       (B) three members from a list of not less than six nominees 
     from industry submitted by the consortium.
       (3) Study.-- 
       (A) In general.--Not later than 90 days after the date on 
     which the Secretary appoints members to the planning board, 
     the planning board shall complete a study on strategies for 
     the development and implementation of advanced solid-state 
     lighting technologies based on white light emitting diodes.
       (B) Requirements.--The study shall develop a comprehensive 
     strategy to implement, through the initiative, the use of 
     white light emitting diodes to increase energy efficiency and 
     enhance United States competitiveness.
       (C) Implementation.--As soon as practicable after the study 
     is submitted to the Secretary, the Secretary shall implement 
     the initiative in accordance with the recommendations of the 
     planning board.
       (4) Termination.--The planning board shall terminate upon 
     completion of the study under paragraph (3).
       (e) Grants.--
       (1) Fundamental research.--The Secretary, through the 
     consortium, shall make grants to conduct basic and 
     manufacturing-related research related to advanced solid-
     state lighting technologies based on white light emitting 
     diode technologies.
       (2) Technology development and demonstration.--The 
     Secretary shall enter into grants, contracts, and cooperative 
     agreements to conduct or promote technology research, 
     development, or demonstration activities. In providing 
     funding under this paragraph, the Secretary shall give 
     preference to participants in the consortium.
       (3) Continuing assessment.--The consortium, in 
     collaboration with the Secretary, shall formulate annual 
     operating and performance objectives, develop technology 
     roadmaps, and recommend research and development priorities 
     for the initiative. The Secretary may also establish or 
     utilize advisory committees, or enter into appropriate 
     arrangements with the National Academy of Sciences, to 
     conduct periodic reviews of the initiative. The Secretary 
     shall consider the results of such assessment and review 
     activities in making funding decisions under paragraphs (1) 
     and (2) of this subsection.
       (4) Technical assistance.--The National Laboratories shall 
     cooperate with and provide technical assistance to persons 
     carrying out projects under the initiative.
       (5) Audits.--
       (A) In general.--The Secretary shall retain an independent, 
     commercial auditor to determine the extent to which funds 
     made available under this section have been expended in a 
     manner that is consistent with the objectives under 
     subsection (b) and, in the case of funds made available to 
     the consortium, the annual program plan of the consortium 
     under subsection (c)(4)(B).
       (B) Reports.--The auditor shall submit to Congress, the 
     Secretary, and the Comptroller General of the United States 
     an annual report containing the results of the audit.
       (6) Applicable law.--Grants, contracts, and cooperative 
     agreements under this section shall not be subject to the 
     Federal Acquisition Regulation.
       (f) Protection of Information.--Information obtained by the 
     Federal Government on a confidential basis under this section 
     shall be considered to constitute trade secrets and 
     commercial or financial information obtained from a person 
     and privileged or confidential under section 552(b)(4) of 
     title 5, United States Code.
       (g) Authorization of Appropriations.--In addition to 
     amounts authorized under section 1211(c), there are 
     authorized to be appropriated for activities under this 
     section $50,000,000 for each of fiscal years 2003 through 
     2011.
       (h) Definitions.--In this section:
       (1) Advanced solid-state lighting.--The term ``advanced 
     solid-state lighting'' means a semiconducting device package 
     and delivery system that produces white light using 
     externally applied voltage.
       (2) Consortium.--The term ``consortium'' means the Next 
     Generation Lighting Initiative Consortium under subsection 
     (c).
       (3) Initiative.--The term ``initiative'' means the Next 
     Generation Lighting Initiative established under subsection 
     (a).
       (4) inorganic white light emitting diode.--The term 
     ``inorganic white light emitting diode'' means an inorganic 
     semiconducting package that produces white light using 
     externally applied voltage.
       (5) Organic white light emitting diode.--The term ``organic 
     white light emitting diode'' means an organic semiconducting 
     compound that produces white light using externally applied 
     voltage.
       (6) White light emitting diode.--The term ``white light 
     emitting diode'' means--
       (A) an inorganic white light emitting diode; or
       (B) an organic white light emitting diode.

     SEC. 1214. RAILROAD EFFICIENCY.

       (a) Establishment.--The Secretary shall, in cooperation 
     with the Secretaries of Transportation and Defense, and the 
     Administrator of the Environmental Protection Agency, 
     establish a public-private research partnership involving the 
     Federal Government, railroad carriers, locomotive 
     manufacturers, and the Association of American Railroads. The 
     goal of the initiative shall include developing and 
     demonstrating locomotive technologies that increase fuel 
     economy, reduce emissions, improve safety, and lower costs.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out the requirements of this 
     section $60,000,000

[[Page S3743]]

     for fiscal year 2003 and $70,000,000 for fiscal year 2004.

     SEC. 1215. HIGH POWER DENSITY INDUSTRY PROGRAM.

       The Secretary shall establish a comprehensive research, 
     development, demonstration and deployment program to improve 
     energy efficiency of high power density facilities, including 
     data centers, server farms, and telecommunications 
     facilities. Such program shall consider technologies that 
     provide significant improvement in thermal controls, 
     metering, load management, peak load reduction, or the 
     efficient cooling of electronics.

     SEC. 1216. RESEARCH REGARDING PRECIOUS METAL CATALYSIS.

       The Secretary of Energy may, for the purpose of developing 
     improved industrial and automotive catalysts, carry out 
     research in the use of precious metals (excluding platinum, 
     palladium, and rhodium) in catalysis directly, through 
     national laboratories, or through grants to or cooperative 
     agreements or contracts with public or nonprofit entities. 
     There are authorized to be appropriated to carry out this 
     section such sums as are necessary for fiscal years 2003 
     through 2006.

                      Subtitle B--Renewable Energy

     SEC. 1221. ENHANCED RENEWABLE ENERGY RESEARCH AND 
                   DEVELOPMENT.

       (a) Program Direction.--The Secretary shall conduct 
     balanced energy research, development, demonstration, and 
     technology deployment programs to enhance the use of 
     renewable energy.
       (b) Program Goals.--
       (1) Wind power.--The goals of the wind power program shall 
     be to develop, in partnership with industry, a variety of 
     advanced wind turbine designs and manufacturing technologies 
     that are cost-competitive with fossil-fuel generated 
     electricity, with a focus on developing advanced low wind 
     speed technologies that, by 2007, will enable the expanding 
     utilization of widespread class 3 and 4 winds.
       (2) Photovoltaics.--The goal of the photovoltaic program 
     shall be to develop, in partnership with industry, total 
     photovoltaic systems with installed costs of $4,000 per peak 
     kilowatt by 2005 and $2,000 per peak kilowatt by 2015.
       (3) Solar thermal electric systems.--The goal of the solar 
     thermal electric systems program shall be to develop, in 
     partnership with industry, solar power technologies 
     (including baseload solar power) that are competitive with 
     fossil-fuel generated electricity by 2015, by combining high-
     efficiency and high-temperature receivers with advanced 
     thermal storage and power cycles.
       (4) Biomass-based power systems.--The goal of the biomass 
     program shall be to develop, in partnership with industry, 
     integrated power-generating systems, advanced conversion, and 
     feedstock technologies capable of producing electric power 
     that is cost-competitive with fossil-fuel generated 
     electricity by 2010, together with the production of fuels, 
     chemicals, and other products under paragraph (6).
       (5) Geothermal energy.--The goal of the geothermal program 
     shall be to develop, in partnership with industry, 
     technologies and processes based on advanced hydrothermal 
     systems and advanced heat and power systems, including 
     geothermal heat pump technology, with a specific focus on--
       (A) improving exploration and characterization technology 
     to increase the probability of drilling successful wells from 
     20 percent to 40 percent by 2006;
       (B) reducing the cost of drilling by 2008 to an average 
     cost of $150 per foot; and
       (C) developing enhanced geothermal systems technology with 
     the potential to double the useable geothermal resource base.
       (6) Biofuels.--The goal of the biofuels program shall be to 
     develop, in partnership with industry--
       (A) advanced biochemical and thermochemical conversion 
     technologies capable of making liquid and gaseous fuels from 
     cellulosic feedstocks that are price-competitive with 
     gasoline or diesel in either internal combustion engines or 
     fuel cell vehicles by 2010; and
       (B) advanced biotechnology processes capable of making 
     biofuels, biobased polymers, and chemicals, with particular 
     emphasis on the development of biorefineries that use enzyme 
     based processing systems.

     For purposes of this paragraph, the term ``cellulosic 
     feedstock'' means any portion of a food crop not normally 
     used in food production or any nonfood crop grown for the 
     purpose of producing biomass feedstock.
       (7) Hydrogen-based energy systems.--The goals of the 
     hydrogen program shall be to support research and development 
     on technologies for production, storage, and use of hydrogen, 
     including fuel cells and, specifically, fuel-cell vehicle 
     development activities under section 1211.
       (8) Hydropower.--The goal of the hydropower program shall 
     be to develop, in partnership with industry, a new generation 
     of turbine technologies that are less damaging to fish and 
     aquatic ecosystems.
       (9) Electric energy systems and storage.--The goals of the 
     electric energy and storage program shall be to develop, in 
     partnership with industry--
       (A) generators and transmission, distribution, and storage 
     systems that combine high capacity with high efficiency;
       (B) technologies to interconnect distributed energy 
     resources with electric power systems, comply with any 
     national interconnection standards, have a minimum 10-year 
     useful life;
       (C) advanced technologies to increase the average 
     efficiency of electric transmission facilities in rural and 
     remote areas, giving priority for demonstrations to advanced 
     transmission technologies that are being or have been field 
     tested;
       (D) the use of new transmission technologies, including 
     flexible alternating current transmission systems, composite 
     conductor materials, advanced protection devices, 
     controllers, and other cost-effective methods and 
     technologies;
       (E) the use of superconducting materials in power delivery 
     equipment such as transmission and distribution cables, 
     transformers, and generators;
       (F) energy management technologies for enterprises with 
     aggregated loads and distributed generation, such as power 
     parks;
       (G) economic and system models to measure the costs and 
     benefits of improved system performance;
       (H) hybrid distributed energy systems to optimize two or 
     more distributed or on-site generation technologies; and
       (I) real-time transmission and distribution system control 
     technologies that provide for continual exchange of 
     information between generation, transmission, distribution, 
     and end-user facilities.
       (c) Special Projects.--In carrying out this section, the 
     Secretary shall demonstrate--
       (1) the use of advanced wind power technology, biomass, 
     geothermal energy systems, and other renewable energy 
     technologies to assist in delivering electricity to rural and 
     remote locations;
       (2) the combined use of wind power and coal gasification 
     technologies; and
       (3) the use of high temperature superconducting technology 
     in projects to demonstrate the development of superconductors 
     that enhance the reliability, operational flexibility, or 
     power-carrying capability of electric transmission systems or 
     increase the electrical or operational efficiency of electric 
     energy generation, transmission, distribution and storage 
     systems.
       (d) Financial Assistance to Rural Areas.--In carrying out 
     special projects under subsection (c), the Secretary may 
     provide financial assistance to rural electric cooperatives 
     and other rural entities.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for carrying out 
     research, development, demonstration, and technology 
     deployment activities under this subtitle--
       (1) $500,000,000 for fiscal year 2003;
       (2) $595,000,000 for fiscal year 2004;
       (3) $683,000,000 for fiscal year 2005; and
       (4) $733,000,000 for fiscal year 2006, of which 
     $100,000,000 may be allocated to meet the goals of subsection 
     (b)(1).

     SEC. 1222. BIOENERGY PROGRAMS.

       (a) Program Direction.--The Secretary shall carry out 
     research, development, demonstration, and technology 
     development activities related to bioenergy, including 
     programs under paragraphs (4) and (6) of section 1221(b).
       (b) Authorization of Appropriations.--
       (1) Biopower energy systems.--From amounts authorized under 
     section 1221(e), there are authorized to be appropriated to 
     the Secretary for biopower energy systems--
       (A) $60,300,000 for fiscal year 2003;
       (B) $69,300,000 for fiscal year 2004;
       (C) $79,600,000 for fiscal year 2005; and
       (D) $86,250,000 for fiscal year 2006.
       (2) Biofuels energy systems.--From amounts authorized under 
     section 1221(e), there are authorized to be appropriated to 
     the Secretary for biofuels energy systems--
       (A) $57,500,000 for fiscal year 2003;
       (B) $66,125,000 for fiscal year 2004;
       (C) $76,000,000 for fiscal year 2005; and
       (D) $81,400,000 for fiscal year 2006.
       (3) Integrated bioenergy research and development.--The 
     Secretary may use funds authorized under paragraph (1) or (2) 
     for programs, projects, or activities that integrate 
     applications for both biopower and biofuels, including cross-
     cutting research and development in feedstocks and economic 
     analysis.

     SEC. 1223. HYDROGEN RESEARCH AND DEVELOPMENT.

       (a) Short Title.--This section may be cited as the 
     ``Hydrogen Future Act of 2002''.
       (b) Purposes.--Section 102(b) of the Spark M. Matsunaga 
     Hydrogen Research, Development, and Demonstration Act of 1990 
     (42 U.S.C. 12401(b)) is amended by striking paragraphs (2) 
     and (3) and inserting the following:
       ``(2) to direct the Secretary to develop a program of 
     technology assessment, information transfer, and education in 
     which Federal agencies, members of the transportation, 
     energy, and other industries, and other entities may 
     participate;
       ``(3) to develop methods of hydrogen production that 
     minimize production of greenhouse gases, including 
     developing--
       ``(A) efficient production from nonrenewable resources; and
       ``(B) cost-effective production from renewable resources 
     such as biomass, geothermal, wind, and solar energy; and
       ``(4) to foster the use of hydrogen as a major energy 
     source, including developing the use of hydrogen in--
       ``(A) isolated villages, islands, and communities in which 
     other energy sources are not available or are very expensive; 
     and
       ``(B) foreign economic development, to avoid environmental 
     damage from increased fossil fuel use.''.
       (c) Report to Congress.--Section 103 of the Spark M. 
     Matsunaga Hydrogen Research, Development, and Demonstration 
     Act of 1990 (42 U.S.C. 12402) is amended--
       (1) in subsection (a), by striking ``January 1, 1999,'' and 
     inserting ``1 year after the date of enactment of the 
     Hydrogen Future Act of 2002, and biennially thereafter,'';
       (2) in subsection (b), by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) an analysis of hydrogen-related activities throughout 
     the United States Government to identify productive areas for 
     increased intragovernmental collaboration;

[[Page S3744]]

       ``(2) recommendations of the Hydrogen Technical Advisory 
     Panel established by section 108 for any improvements in the 
     program that are needed, including recommendations for 
     additional legislation; and
       ``(3) to the extent practicable, an analysis of State and 
     local hydrogen-related activities.''; and
       (3) by adding at the end the following:
       ``(c) Coordination Plan.--The report under subsection (a) 
     shall be based on a comprehensive coordination plan for 
     hydrogen energy prepared by the Secretary in consultation 
     with other Federal agencies.''.
       (d) Hydrogen Research and Development.--Section 104 of the 
     Spark M. Matsunaga Hydrogen Research, Development, and 
     Demonstration Act of 1990 (42 U.S.C. 12403) is amended--
       (1) in subsection (b)(1), by striking ``marketplace;'' and 
     inserting ``marketplace, including foreign markets, 
     particularly where an energy infrastructure is not well 
     developed;'';
       (2) in subsection (e), by striking ``this chapter'' and 
     inserting ``this Act'';
       (3) by striking subsection (g) and inserting the following:
       ``(g) Cost Sharing.--
       ``(1) Inability to fund entire cost.--The Secretary shall 
     not consider a proposal submitted by a person from industry 
     unless the proposal contains a certification that--
       ``(A) reasonable efforts to obtain non-Federal funding in 
     the amount necessary to pay 100 percent of the cost of the 
     project have been made; and
       ``(B) non-Federal funding in that amount could not 
     reasonably be obtained.
       ``(2) Non-federal share.--
       ``(A) In general.--The Secretary shall require a commitment 
     from non-Federal sources of at least 25 percent of the cost 
     of the project.
       ``(B) Reduction or elimination.--The Secretary may reduce 
     or eliminate the cost-sharing requirement under subparagraph 
     (A) for the proposed research and development project, 
     including for technical analyses, economic analyses, outreach 
     activities, and educational programs, if the Secretary 
     determines that reduction or elimination is necessary to 
     achieve the objectives of this Act.'';
       (4) in subsection (i), by striking ``this chapter'' and 
     inserting ``this Act''.
       (e) Demonstrations.--Section 105 of the Spark M. Matsunaga 
     Hydrogen Research, Development, and Demonstration Act of 1990 
     (42 U.S.C. 12404) is amended by striking subsection (c) and 
     inserting the following:
       ``(c) Non-Federal Share.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall require a commitment from non-Federal sources 
     of at least 50 percent of the costs directly relating to a 
     demonstration project under this section.
       ``(2) Reduction.--The Secretary may reduce the non-Federal 
     requirement under paragraph (1) if the Secretary determines 
     that the reduction is appropriate considering the 
     technological risks involved in the project and is necessary 
     to meet the objectives of this Act.''.
       (f) Technology Transfer.--Section 106 of the Spark M. 
     Matsunaga Hydrogen Research, Development, and Demonstration 
     Act of 1990 (42 U.S.C. 12405) is amended--
       (1) in subsection (a)--
       (A) in the first sentence--
       (i) by striking ``The Secretary shall conduct a program 
     designed to accelerate wider application'' and inserting the 
     following:
       ``(1) In general.--The Secretary shall conduct a program 
     designed to--
       ``(A) accelerate wider application''; and
       (ii) by striking ``private sector'' and inserting ``private 
     sector; and
       ``(B) accelerate wider application of hydrogen technologies 
     in foreign countries to increase the global market for the 
     technologies and foster global economic development without 
     harmful environmental effects.''; and
       (B) in the second sentence, by striking ``The Secretary'' 
     and inserting the following:
       ``(2) Advice and assistance.--The Secretary''; and
       (2) in subsection (b)--
       (A) in paragraph (2), by redesignating subparagraphs (A) 
     through (D) as clauses (i) through (iv), respectively, and 
     indenting appropriately;
       (B) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively, and indenting 
     appropriately;
       (C) by striking ``The Secretary, in'' and inserting the 
     following:
       ``(1) In general.--The Secretary, in'';
       (D) by striking ``The information'' and inserting the 
     following:
       ``(2) Activities.--The information''; and
       (E) in paragraph (1) (as designated by subparagraph (C))--
       (i) in subparagraph (A) (as redesignated by subparagraph 
     (B)), by striking ``an inventory'' and inserting ``an update 
     of the inventory''; and
       (ii) in subparagraph (B) (as redesignated by subparagraph 
     (B)), by striking ``develop'' and all that follows through 
     ``to improve'' and inserting ``develop with the National 
     Aeronautics and Space Administration, the Department of 
     Energy, other Federal agencies as appropriate, and industry, 
     an information exchange program to improve''.
       (g) Technical Panel Review.--
       (1) In general.--Section 108 of the Spark M. Matsunaga 
     Hydrogen Research, Development, and Demonstration Act of 1990 
     (42 U.S.C. 12407) is amended--
       (A) in subsection (b)--
       (i) by striking ``(b) Membership.--The technical panel 
     shall be appointed'' and inserting the following:
       ``(b) Membership.--
       ``(1) In general.--The technical panel shall be comprised 
     of not fewer than 9 nor more than 15 members appointed'';
       (ii) by striking the second sentence and inserting the 
     following:
       ``(2) Terms.--
       ``(A) In general.--The term of a member of the technical 
     panel shall be not more than 3 years.
       ``(B) Staggered terms.--The Secretary may appoint members 
     of the technical panel in a manner that allows the terms of 
     the members serving at any time to expire at spaced intervals 
     so as to ensure continuity in the functioning of the 
     technical panel.
       ``(C) Reappointment.--A member of the technical panel whose 
     term expires may be reappointed.''; and
       (iii) by striking ``The technical panel shall have a 
     chairman,'' and inserting the following:
       ``(3) Chairperson.--The technical panel shall have a 
     chairperson,''; and
       (B) in subsection (d)--
       (i) in the matter preceding paragraph (1), by striking 
     ``the following items'';
       (ii) in paragraph (1), by striking ``and'' at the end;
       (iii) in paragraph (2), by striking the period at the end 
     and inserting ``; and''; and
       (iv) by adding at the end the following:
       ``(3) the plan developed by the interagency task force 
     under section 202(b) of the Hydrogen Future Act of 1996.''.
       (2) New appointments.--Not later than 180 days after the 
     date of enactment of this Act, the Secretary--
       (A) shall review the membership composition of the Hydrogen 
     Technical Advisory Panel; and
       (B) may appoint new members consistent with the amendments 
     made by subsection (a).
       (h) Authorization of Appropriations.--Section 109 of the 
     Spark M. Matsunaga Hydrogen Research, Development, and 
     Demonstration Act of 1990 (42 U.S.C. 12408) is amended--
       (1) in paragraph (8), by striking ``and'';
       (2) in paragraph (9), by striking the period and inserting 
     a semicolon; and
       (3) by adding at the end the following:
       ``(10) $65,000,000 for fiscal year 2003;
       ``(11) $70,000,000 for fiscal year 2004;
       ``(12) $75,000,000 for fiscal year 2005; and
       ``(13) $80,000,000 for fiscal year 2006.''.
       (i) Fuel Cells.--
       (1) Integration of fuel cells with hydrogen production 
     systems.--Section 201 of the Hydrogen Future Act of 1996 is 
     amended--
       (A) in subsection (a) by striking ``(a) Not later than 180 
     days after the date of enactment of this section, and 
     subject'' and inserting ``(a) In General.--Subject'';
       (B) by striking ``with--'' and all that follows and 
     inserting ``into Federal, State, and local government 
     facilities for stationary and transportation applications.'';
       (C) in subsection (b), by striking ``gas is'' and inserting 
     ``basis'';
       (D) in subsection (c)(2), by striking ``systems described 
     in subsections (a)(1) and (a)(2)'' and inserting ``projects 
     proposed''; and
       (E) by striking subsection (d) and inserting the following:
       ``(d) Non-Federal Share.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall require a commitment from non-Federal sources 
     of at least 50 percent of the costs directly relating to a 
     demonstration project under this section.
       ``(2) Reduction.--The Secretary may reduce the non-Federal 
     requirement under paragraph (1) if the Secretary determines 
     that the reduction is appropriate considering the 
     technological risks involved in the project and is necessary 
     to meet the objectives of this Act.''.
       (2) Cooperative and cost-sharing agreements; integration of 
     technical information.--Title II of the Hydrogen Future Act 
     of 1996 (42 U.S.C. 12403 note; Public Law 104-271) is amended 
     by striking section 202 and inserting the following:

     ``SEC. 202. INTERAGENCY TASK FORCE.

       ``(a) Establishment.--Not later than 120 days after the 
     date of enactment of this section, the Secretary shall 
     establish an interagency task force led by a Deputy Assistant 
     Secretary of the Department of Energy and comprised of 
     representatives of--
       ``(1) the Office of Science and Technology Policy;
       ``(2) the Department of Transportation;
       ``(3) the Department of Defense;
       ``(4) the Department of Commerce (including the National 
     Institute for Standards and Technology);
       ``(5) the Environmental Protection Agency;
       ``(6) the National Aeronautics and Space Administration; 
     and
       ``(7) other agencies as appropriate.
       ``(b) Duties.--
       ``(1) In general.--The task force shall develop a plan for 
     carrying out this title.
       ``(2) Focus of plan.--The plan shall focus on development 
     and demonstration of integrated systems and components for--
       ``(A) hydrogen production, storage, and use in Federal, 
     State, and local government buildings and vehicles;
       ``(B) hydrogen-based infrastructure for buses and other 
     fleet transportation systems that include zero-emission 
     vehicles; and
       ``(C) hydrogen-based distributed power generation, 
     including the generation of combined heat, power, and 
     hydrogen.

     ``SEC. 203. COOPERATIVE AND COST-SHARING AGREEMENTS.

       ``The Secretary shall enter into cooperative and cost-
     sharing agreements with Federal, State, and local agencies 
     for participation by the agencies in demonstrations at 
     facilities administered by the agencies, with the aim of 
     integrating high efficiency hydrogen systems using fuel cells 
     into the facilities to provide immediate benefits and promote 
     a smooth transition to hydrogen as an energy source.

     ``SEC. 204. INTEGRATION AND DISSEMINATION OF TECHNICAL 
                   INFORMATION.

       ``The Secretary shall--

[[Page S3745]]

       ``(1) integrate all the technical information that becomes 
     available as a result of development and demonstration 
     projects under this title;
       ``(2) make the information available to all Federal and 
     State agencies for dissemination to all interested persons; 
     and
       ``(3) foster the exchange of generic, nonproprietary 
     information and technology developed under this title among 
     industry, academia, and Federal, State, and local 
     governments, to help the United States economy attain the 
     economic benefits of the information and technology.

     ``SEC. 205. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated, for activities 
     under this title--
       ``(1) $25,000,000 for fiscal year 2003;
       ``(2) $30,000,000 for fiscal year 2004;
       ``(3) $35,000,000 for fiscal year 2005; and
       ``(4) $40,000,000 for fiscal year 2006.''.

                       Subtitle C--Fossil Energy

     SEC. 1231. ENHANCED FOSSIL ENERGY RESEARCH AND DEVELOPMENT.

       (a) Program Direction.--The Secretary shall conduct a 
     balanced energy research, development, demonstration, and 
     technology deployment program to enhance fossil energy.
       (b) Program Goals.--
       (1) Core fossil research and development.--The goals of the 
     core fossil research and development program shall be to 
     reduce emissions from fossil fuel use by developing 
     technologies, including precombustion technologies, by 2015 
     with the capability of realizing--
       (A) electricity generating efficiencies of 60 percent for 
     coal and 75 percent for natural gas;
       (B) combined heat and power thermal efficiencies of more 
     than 85 percent;
       (C) fuels utilization efficiency of 75 percent for the 
     production of liquid transportation fuels from coal;
       (D) near zero emissions of mercury and of emissions that 
     form fine particles, smog, and acid rain;
       (E) reduction of carbon dioxide emissions by at least 40 
     percent through efficiency improvements and 100 percent with 
     sequestration; and
       (F) improved reliability, efficiency, reductions of air 
     pollutant emissions, or reductions in solid waste disposal 
     requirements.
       (2) Offshore oil and natural gas resources.--The goal of 
     the offshore oil and natural gas resources program shall be 
     to develop technologies to--
       (A) extract methane hydrates in coastal waters of the 
     United States, and
       (B) develop natural gas and oil reserves in the ultra-
     deepwater of the Central and Western Gulf of Mexico.
       (3) Onshore oil and natural gas resources.--The goal of the 
     onshore oil and natural gas resources program shall be to 
     advance the science and technology available to domestic 
     onshore petroleum producers, particularly independent 
     operators, through--
       (A) advances in technology for exploration and production 
     of domestic petroleum resources, particularly those not 
     accessible with current technology;
       (B) improvement in the ability to extract hydrocarbons from 
     known reservoirs and classes of reservoirs; and
       (C) development of technologies and practices that reduce 
     the threat to the environment from petroleum exploration and 
     production and decrease the cost of effective environmental 
     compliance.
       (4) Transportation fuels.--The goals of the transportation 
     fuels program shall be to increase the price elasticity of 
     oil supply and demand by focusing research on--
       (A) reducing the cost of producing transportation fuels 
     from coal and natural gas; and
       (B) indirect liquefaction of coal and biomass.
       (c) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the Secretary for carrying out research, development, 
     demonstration, and technology deployment activities under 
     this section--
       (A) $485,000,000 for fiscal year 2003;
       (B) $508,000,000 for fiscal year 2004;
       (C) $532,000,000 for fiscal year 2005; and
       (D) $558,000,000 for fiscal year 2006.
       (2) Limits on use of funds.--None of the funds authorized 
     in paragraph (1) may be used for--
       (A) fossil energy environmental restoration;
       (B) import/export authorization;
       (C) program direction; or
       (D) general plant projects.
       (3) Coal-based projects.--The coal-based projects funded 
     under this section shall be consistent with the goals in 
     subsection (b). The program shall emphasize carbon capture 
     and sequestration technologies and gasification technologies, 
     including gasification combined cycle, gasification fuel 
     cells, gasification co-production, hybrid gasification/
     combustion, or other technology with the potential to address 
     the goals in subparagraphs (D) or (E) of subsection (b)(1).

     SEC. 1232. POWER PLANT IMPROVEMENT INITIATIVE.

       (a) Program Direction.--The Secretary shall conduct a 
     balanced energy research, development, demonstration, and 
     technology deployment program to demonstrate commercial 
     applications of advanced lignite and coal-based technologies 
     applicable to new or existing power plants (including co-
     production plants) that advance the efficiency, environmental 
     performance, and cost-competitiveness substantially beyond 
     technologies that are in operation or have been demonstrated 
     by the date of enactment of this subtitle.
       (b) Technical Milestones.--
       (1) In general.--The Secretary shall set technical 
     milestones specifying efficiency and emissions levels that 
     projects shall be designed to achieve. The milestones shall 
     become more restrictive over the life of the program.
       (2) 2010 efficiency milestones.--The milestones shall be 
     designed to achieve by 2010 interim thermal efficiency of--
       (A) forty-five percent for coal of more than 9,000 Btu;
       (B) forty-four percent for coal of 7,000 to 9,000 Btu; and
       (C) forty-two percent for coal of less than 7,000 Btu.
       (3) 2020 efficiency milestones.--The milestones shall be 
     designed to achieve by 2020 thermal efficiency of--
       (A) sixty percent for coal of more than 9,000 Btu;
       (B) fifty-nine percent for coal of 7,000 to 9,000 Btu; and
       (C) fifty-seven percent for coal of less than 7,000 Btu.
       (4) Emissions milestones.--The milestones shall include 
     near zero emissions of mercury and greenhouse gases and of 
     emissions that form fine particles, smog, and acid rain.
       (5) Regional and quality differences.--The Secretary may 
     consider regional and quality differences in developing the 
     efficiency milestones.
       (c) Project Criteria.--The demonstration activities 
     proposed to be conducted at a new or existing coal-based 
     electric generation unit having a nameplate rating of not 
     less than 100 megawatts, excluding a co-production plant, 
     shall include at least one of the following--
       (1) a means of recycling or reusing a significant portion 
     of coal combustion wastes produced by coal-based generating 
     units, excluding practices that are commercially available by 
     the date of enactment of this subtitle;
       (2) a means of capture and sequestering emissions, 
     including greenhouse gases, in a manner that is more 
     effective and substantially below the cost of technologies 
     that are in operation or that have been demonstrated by the 
     date of enactment of this subtitle;
       (3) a means of controlling sulfur dioxide and nitrogen 
     oxide or mercury in a manner that improves environmental 
     performance beyond technologies that are in operation or that 
     have been demonstrated by the date of enactment of this 
     subtitle--
       (A) in the case of an existing unit, achieve an overall 
     thermal design efficiency improvement compared to the 
     efficiency of the unit as operated, of not less than--
       (i) 7 percent for coal of more than 9,000 Btu;
       (ii) 6 percent for coal of 7,000 to 9,000 Btu; or
       (iii) 4 percent for coal of less than 7,000 Btu; or
       (B) in the case of a new unit, achieve the efficiency 
     milestones set for in subsection (b) compared to the 
     efficiency of a typical unit as operated on the date of 
     enactment of this subtitle, before any retrofit, repowering, 
     replacement, or installation.
       (d) Study.--The Secretary, in consultation with the 
     Administrator of the Environmental Protection Agency, the 
     Secretary of the Interior, and interested entities (including 
     coal producers, industries using coal, organizations to 
     promote coal or advanced coal technologies, environmental 
     organizations, and organizations representing workers), shall 
     conduct an assessment that identifies performance criteria 
     that would be necessary for coal-based technologies to meet, 
     to enable future reliance on coal in an environmentally 
     sustainable manner for electricity generation, use as a 
     chemical feedstock, and use as a transportation fuel.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     the Secretary for carrying out activities under this section 
     $200,000,000 for each of fiscal years 2003 through 2011.
       (2) Limitation on funding of projects.--Eighty percent of 
     the funding under this section shall be limited to--
       (A) carbon capture and sequestration technologies;
       (B) gasification technologies, including gasification 
     combined cycle, gasification fuel cells, gasification co-
     production, or hybrid gasification/combustion; or
       (C) other technology either by itself or in conjunction 
     with other technologies that has the potential to achieve 
     near zero emissions.

     SEC. 1233. RESEARCH AND DEVELOPMENT FOR ADVANCED SAFE AND 
                   EFFICIENT COAL MINING TECHNOLOGIES.

       (a) Establishment.--The Secretary of Energy shall establish 
     a cooperative research partnership involving appropriate 
     Federal agencies, coal producers, including associations, 
     equipment manufacturers, universities with mining engineering 
     departments, and other relevant entities to--
       (1) develop mining research priorities identified by the 
     Mining Industry of the Future Program and in the 
     recommendations from relevant reports of the National Academy 
     of Sciences on mining technologies;
       (2) establish a process for conducting joint industry-
     Government research and development; and
       (3) expand mining research capabilities at institutions of 
     higher education.
       (b) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out activities under this section, $12,000,000 in 
     fiscal year 2003 and $15,000,000 in fiscal year 2004.
       (2) Limit on use of funds.--Not less than 20 percent of any 
     funds appropriated in a given fiscal year under this 
     subsection shall be dedicated to research carried out at 
     institutions of higher education.

     SEC. 1234. ULTRA-DEEPWATER AND UNCONVENTIONAL RESOURCE 
                   EXPLORATION AND PRODUCTION TECHNOLOGIES.

       (a) Definitions.--In this section:
       (1) Advisory committee.--The term ``Advisory Committee'' 
     means the Ultra-Deepwater and Unconventional Resource 
     Technology Advisory Committee established under subsection 
     (c).
       (2) Award.--The term ``award'' means a cooperative 
     agreement, contract, award or other types of agreement as 
     appropriate.

[[Page S3746]]

       (3) Deepwater.--The term ``deepwater'' means a water depth 
     that is greater than 200 but less than 1,500 meters.
       (4) Eligible award recipient.--The term ``eligible award 
     recipient'' includes--
       (A) a research institution;
       (B) an institution of higher education;
       (C) a corporation; and
       (D) a managing consortium formed among entities described 
     in subparagraphs (A) through (C).
       (5) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 101 of the Higher Education Act of 1965 (20 
     U.S.C. 1001).
       (6) Managing consortium.--The term ``managing consortium'' 
     means an entity that--
       (A) exists as of the date of enactment of this section;
       (B)(i) is an organization described in section 501(c)(3) of 
     the Internal Revenue Code of 1986; and
       (ii) is exempt from taxation under section 501(a) of that 
     Code;
       (C) is experienced in planning and managing programs in 
     natural gas or other petroleum exploration and production 
     research, development, and demonstration; and
       (D) has demonstrated capabilities and experience in 
     representing the views and priorities of industry, 
     institutions of higher education and other research 
     institutions in formulating comprehensive research and 
     development plans and programs.
       (7) Program.--The term ``program'' means the program of 
     research, development, and demonstration established under 
     subsection (b)(1)(A).
       (8) Ultra-deepwater.--The term ``ultra-deepwater'' means a 
     water depth that is equal to or greater than 1,500 meters.
       (9) Ultra-deepwater architecture.--The term ``ultra-
     deepwater architecture'' means the integration of 
     technologies to explore and produce natural gas or petroleum 
     products located at ultra-deepwater depths.
       (10) Ultra-deepwater resource.--The term ``ultra-deepwater 
     resource'' means natural gas or any other petroleum resource 
     (including methane hydrate) located in an ultra-deepwater 
     area.
       (11) Unconventional resource.--The term ``unconventional 
     resource'' means natural gas or any other petroleum resource 
     located in a formation on physically or economically 
     inaccessible land currently available for lease for purposes 
     of natural gas or other petroleum exploration or production.
       (b) Ultra-Deepwater and Unconventional Exploration and 
     Production Program.--
       (1) Establishment.--
       (A) In general.--The Secretary shall establish a program of 
     research into, and development and demonstration of, ultra-
     deepwater resource and unconventional resource exploration 
     and production technologies.
       (B) Location; implementation.--The program under this 
     subsection shall be carried out--
       (i) in areas on the outer Continental Shelf that, as of the 
     date of enactment of this section, are available for leasing; 
     and
       (ii) on unconventional resources.
       (2) Components.--The program shall include one or more 
     programs for long-term research into--
       (A) new deepwater ultra-deepwater resource and 
     unconventional resource exploration and production 
     technologies; or
       (B) environmental mitigation technologies for production of 
     ultra-deepwater resource and unconventional resource.
       (c) Advisory Committee.--
       (1) Establishment.--Not later than 30 days after the date 
     of enactment of this section, the Secretary shall establish 
     an advisory committee to be known as the ``Ultra-Deepwater 
     and Unconventional Resource Technology Advisory Committee''.
       (2) Membership.--
       (A) Composition.--Subject to subparagraph (B), the advisory 
     committee shall be composed of seven members appointed by the 
     Secretary that--
       (i) have extensive operational knowledge of and experience 
     in the natural gas and other petroleum exploration and 
     production industry; and
       (ii) are not Federal employees or employees of contractors 
     to a Federal agency.
       (B) Expertise.--Of the members of the advisory committee 
     appointed under subparagraph (A)--
       (i) at least four members shall have extensive knowledge of 
     ultra-deepwater resource exploration and production 
     technologies;
       (ii) at least three members shall have extensive knowledge 
     of unconventional resource exploration and production 
     technologies.
       (3) Duties.--The advisory committee shall advise the 
     Secretary in the implementation of this section.
       (4) Compensation.--A member of the advisory committee shall 
     serve without compensation but shall receive travel expenses, 
     including per diem in lieu of subsistence, in accordance with 
     applicable provisions under subchapter I of chapter 57 of 
     title 5, United States Code.
       (d) Awards.--
       (1) Types of awards.--
       (A) Ultra-deepwater resources.--
       (i) In general.--The Secretary shall make awards for 
     research into, and development and demonstration of, ultra-
     deepwater resource exploration and production technologies--

       (I) to maximize the value of the ultra-deepwater resources 
     of the United States;
       (II) to increase the supply of ultra-deepwater resources by 
     lowering the cost and improving the efficiency of exploration 
     and production of such resources; and
       (III) to improve safety and minimize negative environmental 
     impacts of that exploration and production.

       (ii) Ultra-deepwater architecture.--In furtherance of the 
     purposes described in clause (i), the Secretary shall, where 
     appropriate, solicit proposals from a managing consortium to 
     develop and demonstrate next-generation architecture for 
     ultra-deepwater resource production.
       (B) Unconventional resources.--The Secretary shall make 
     awards--
       (i) to carry out research into, and development and 
     demonstration of, technologies to maximize the value of 
     unconventional resources; and
       (ii) to develop technologies to simultaneously--

       (I) increase the supply of unconventional resources by 
     lowering the cost and improving the efficiency of exploration 
     and production of unconventional resources; and
       (II) improve safety and minimize negative environmental 
     impacts of that exploration and production.

       (2) Conditions.--An award made under this subsection shall 
     be subject to the following conditions:
       (A) Multiple entities.--If an award recipient is composed 
     of more than one eligible organization, the recipient shall 
     provide a signed contract, agreed to by all eligible 
     organizations comprising the award recipient, that defines, 
     in a manner that is consistent with all applicable law in 
     effect as of the date of the contract, all rights to 
     intellectual property for--
       (i) technology in existence as of that date; and
       (ii) future inventions conceived and developed using funds 
     provided under the award.
       (B) Components of application.--An application for an award 
     for a demonstration project shall describe with specificity 
     any intended commercial applications of the technology to be 
     demonstrated.
       (C) Cost sharing.--Non-Federal cost sharing shall be in 
     accordance with section 1403.
       (e) Plan and Funding.--
       (1) In general.--The Secretary, and where appropriate, a 
     managing consortium under subsection (d)(1)(A)(ii), shall 
     formulate annual operating and performance objectives, 
     develop multiyear technology roadmaps, and establish research 
     and development priorities for the funding of activities 
     under this section which will serve as guidelines for making 
     awards including cost-matching objectives.
       (2) Industry input.--In carrying out this program, the 
     Secretary shall promote maximum industry input through the 
     use of managing consortia or other organizations in planning 
     and executing the research areas and conducting workshops or 
     reviews to ensure that this program focuses on industry 
     problems and needs.
       (f) Auditing.--
       (1) In general.--The Secretary shall retain an independent, 
     commercial auditor to determine the extent to which funds 
     authorized by this section, provided through a managing 
     consortium, are expended in a manner consistent with the 
     purposes of this section.
       (2) Reports.--The auditor retained under paragraph (1) 
     shall submit to the Secretary, and the Secretary shall 
     transmit to the appropriate congressional committees, an 
     annual report that describes--
       (A) the findings of the auditor under paragraph (1); and
       (B) a plan under which the Secretary may remedy any 
     deficiencies identified by the auditor.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as may be 
     necessary to carry out this section.
       (h) Termination of Authority.--The authority provided by 
     this section shall terminate on September 30, 2009.
       (i) Savings Provision.--Nothing in this section is intended 
     to displace, duplicate or diminish any previously authorized 
     research activities of the Department of Energy.

     SEC. 1235. RESEARCH AND DEVELOPMENT FOR NEW NATURAL GAS 
                   TRANSPORTATION TECHNOLOGIES.

       The Secretary of Energy shall conduct a comprehensive 5-
     year program for research, development and demonstration to 
     improve the reliability, efficiency, safety and integrity of 
     the natural gas transportation and distribution 
     infrastructure and for distributed energy resources 
     (including microturbines, fuel cells, advanced engine-
     generators, gas turbines, reciprocating engines, hybrid power 
     generation systems, and all ancillary equipment for dispatch, 
     control and maintenance).

     SEC. 1236. AUTHORIZATION OF APPROPRIATIONS FOR OFFICE OF 
                   ARCTIC ENERGY.

       There are authorized to be appropriated to the Secretary 
     for the Office of Arctic Energy under section 3197 of the 
     Floyd D. Spence National Defense Authorization Act for Fiscal 
     Year 2001 (Public Law 106-398) such sums as may be necessary, 
     but not to exceed $25,000,000 for each of fiscal years 2003 
     through 2011.

     SEC. 1237. CLEAN COAL TECHNOLOGY LOAN.

       There is authorized to be appropriated not to exceed 
     $125,000,000 to the Secretary of Energy to provide a loan to 
     the owner of the experimental plant constructed under United 
     States Department of Energy cooperative agreement number DE-
     FC22-91PC99544 on such terms and conditions as the Secretary 
     determines, including interest rates and upfront payments.

                       Subtitle D--Nuclear Energy

     SEC. 1241. ENHANCED NUCLEAR ENERGY RESEARCH AND DEVELOPMENT.

       (a) Program Direction.--The Secretary shall conduct an 
     energy research, development, demonstration, and technology 
     deployment program to enhance nuclear energy.
       (b) Program Goals.--The program shall--
       (1) support research related to existing United States 
     nuclear power reactors to extend their lifetimes and increase 
     their reliability while optimizing their current operations 
     for greater efficiencies;

[[Page S3747]]

       (2) examine--
       (A) advanced proliferation-resistant and passively safe 
     reactor designs;
       (B) new reactor designs with higher efficiency, lower cost, 
     and improved safety;
       (C) in coordination with activities carried out under the 
     amendments made by section 1223, designs for a high 
     temperature reactor capable of producing large-scale 
     quantities of hydrogen using thermochemical processes;
       (D) proliferation-resistant and high-burn-up nuclear fuels;
       (E) minimization of generation of radioactive materials;
       (F) improved nuclear waste management technologies; and
       (G) improved instrumentation science;
       (3) attract new students and faculty to the nuclear 
     sciences and nuclear engineering and related fields 
     (including health physics and nuclear and radiochemistry) 
     through--
       (A) university-based fundamental research for existing 
     faculty and new junior faculty;
       (B) support for the re-licensing of existing training 
     reactors at universities in conjunction with industry; and
       (C) completing the conversion of existing training reactors 
     with proliferation-resistant fuels that are low enriched and 
     to adapt those reactors to new investigative uses;
       (4) maintain a national capability and infrastructure to 
     produce medical isotopes and ensure a well trained cadre of 
     nuclear medicine specialists in partnership with industry;
       (5) ensure that our nation has adequate capability to power 
     future satellite and space missions; and
       (6) maintain, where appropriate through a prioritization 
     process, a balanced research infrastructure so that future 
     research programs can use these facilities.
       (c) Authorization of Appropriations.--
       (1) Core nuclear research programs.--There are authorized 
     to be appropriated to the Secretary for carrying out 
     research, development, demonstration, and technology 
     deployment activities under subsection (b)(1) through (3)--
       (A) $100,000,000 for fiscal year 2003;
       (B) $110,000,000 for fiscal year 2004;
       (C) $120,000,000 for fiscal year 2005; and
       (D) $130,000,000 for fiscal year 2006.
       (2) Supporting nuclear activities.--There are authorized to 
     be appropriated to the Secretary for carrying out activities 
     under subsection (b)(4) through (6), as well as nuclear 
     facilities management and program direction--
       (A) $200,000,000 for fiscal year 2003;
       (B) $202,000,000 for fiscal year 2004;
       (C) $207,000,000 for fiscal year 2005; and
       (D) $212,000,000 for fiscal year 2006.

     SEC. 1242. UNIVERSITY NUCLEAR SCIENCE AND ENGINEERING 
                   SUPPORT.

       (a) Establishment.--The Secretary shall support a program 
     to maintain the nation's human resource investment and 
     infrastructure in the nuclear sciences and engineering and 
     related fields (including health physics and nuclear and 
     radiochemistry), consistent with departmental missions 
     related to civilian nuclear research and development.
       (b) Duties.--In carrying out the program under this 
     section, the Secretary shall--
       (1) develop a graduate and undergraduate fellowship program 
     to attract new and talented students;
       (2) assist universities in recruiting and retaining new 
     faculty in the nuclear sciences and engineering through a 
     Junior Faculty Research Initiation Grant Program;
       (3) support fundamental nuclear sciences and engineering 
     research through the Nuclear Engineering Education Research 
     Program;
       (4) encourage collaborative nuclear research between 
     industry, national laboratories and universities through the 
     Nuclear Energy Research Initiative; and
       (5) support communication and outreach related to nuclear 
     science and engineering.
       (c) Maintaining University Research and Training Reactors 
     and Associated Infrastructure.--Activities under this section 
     may include:
       (1) Converting research reactors to low-enrichment fuels, 
     upgrading operational instrumentation, and sharing of 
     reactors among universities.
       (2) Providing technical assistance, in collaboration with 
     the United States nuclear industry, in re-licensing and 
     upgrading training reactors as part of a student training 
     program.
       (3) Providing funding for reactor improvements as part of a 
     focused effort that emphasizes research, training, and 
     education.
       (d) University-National Laboratory Interactions.--The 
     Secretary shall develop--
       (1) a sabbatical fellowship program for university 
     professors to spend extended periods of time at National 
     Laboratories in the areas of nuclear science and technology; 
     and
       (2) a visiting scientist program in which National 
     Laboratory staff can spend time in academic nuclear science 
     and engineering departments. The Secretary may provide for 
     fellowships for students to spend time at National 
     Laboratories in the area of nuclear science with a member of 
     the Laboratory staff acting as a mentor.
       (e) Operating and Maintenance Costs.--Funding for a 
     research project provided under this section may be used to 
     offset a portion of the operating and maintenance costs of a 
     university research reactor used in the research project, on 
     a cost-shared basis with the university.
       (f) Authorization of Appropriations.--From amounts 
     authorized under section 1241(c)(1), the following amounts 
     are authorized for activities under this section--
       (1) $33,000,000 for fiscal year 2003;
       (2) $37,900,000 for fiscal year 2004;
       (3) $43,600,000 for fiscal year 2005; and
       (4) $50,100,000 for fiscal year 2006.

     SEC. 1243. NUCLEAR ENERGY RESEARCH INITIATIVE.

       (a) Establishment.--The Secretary shall support a Nuclear 
     Energy Research Initiative for grants for research relating 
     to nuclear energy.
       (b) Authorization of Appropriations.--From amounts 
     authorized under section 1241(c), there are authorized to be 
     appropriated to the Secretary for activities under this 
     section such sums as are necessary for each fiscal year.

     SEC. 1244. NUCLEAR ENERGY PLANT OPTIMIZATION PROGRAM.

       (a) Establishment.--The Secretary shall support a Nuclear 
     Energy Plant Optimization Program for grants to improve 
     nuclear energy plant reliability, availability, and 
     productivity. Notwithstanding section 1403, the program shall 
     require industry cost-sharing of at least 50 percent and be 
     subject to annual review by the Nuclear Energy Research 
     Advisory Committee of the Department.
       (b) Authorization of Appropriations.--From amounts 
     authorized under section 1241(c), there are authorized to be 
     appropriated to the Secretary for activities under this 
     section such sums as are necessary for each fiscal year.

     SEC. 1245. NUCLEAR ENERGY TECHNOLOGY DEVELOPMENT PROGRAM.

       (a) Establishment.--The Secretary shall support a Nuclear 
     Energy Technology Development Program to develop a technology 
     roadmap to design and develop new nuclear energy powerplants 
     in the United States.
       (b) Generation IV Reactor Study.--The Secretary shall, as 
     part of the program under subsection (a), also conduct a 
     study of Generation IV nuclear energy systems, including 
     development of a technology roadmap and performance of 
     research and development necessary to make an informed 
     technical decision regarding the most promising candidates 
     for commercial deployment. The study shall examine advanced 
     proliferation-resistant and passively safe reactor designs, 
     new reactor designs with higher efficiency, lower cost and 
     improved safety, proliferation-resistant and high burn-up 
     fuels, minimization of generation of radioactive materials, 
     improved nuclear waste management technologies, and improved 
     instrumentation science. Not later than December 31, 2002, 
     the Secretary shall submit to Congress a report describing 
     the results of the study.
       (c) Authorization of Appropriations.--From amounts 
     authorized to be appropriated under section 1241(c), there 
     are authorized to be appropriated to the Secretary for 
     activities under this section such sums as are necessary for 
     each fiscal year.

                 Subtitle E--Fundamental Energy Science

     SEC. 1251. ENHANCED PROGRAMS IN FUNDAMENTAL ENERGY SCIENCE.

       (a) Program Direction.--The Secretary, acting through the 
     Office of Science, shall--
       (1) conduct a comprehensive program of fundamental 
     research, including research on chemical sciences, physics, 
     materials sciences, biological and environmental sciences, 
     geosciences, engineering sciences, plasma sciences, 
     mathematics, and advanced scientific computing;
       (2) maintain, upgrade and expand the scientific user 
     facilities maintained by the Office of Science and ensure 
     that they are an integral part of the departmental mission 
     for exploring the frontiers of fundamental science;
       (3) maintain a leading-edge research capability in the 
     energy-related aspects of nanoscience and nanotechnology, 
     advanced scientific computing and genome research; and
       (4) ensure that its fundamental science programs, where 
     appropriate, help inform the applied research and development 
     programs of the Department.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for carrying out 
     research, development, demonstration, and technology 
     deployment activities under this subtitle--
       (1) $3,785,000,000 for fiscal year 2003;
       (2) $4,153,000,000 for fiscal year 2004;
       (3) $4,586,000,000 for fiscal year 2005; and
       (4) $5,000,000,000 for fiscal year 2006.

     SEC. 1252. NANOSCALE SCIENCE AND ENGINEERING RESEARCH.

       (a) Establishment.--The Secretary, acting through the 
     Office of Science, shall support a program of research and 
     development in nanoscience and nanoengineering consistent 
     with the Department's statutory authorities related to 
     research and development. The program shall include efforts 
     to further the understanding of the chemistry, physics, 
     materials science and engineering of phenomena on the scale 
     of 1 to 100 nanometers.
       (b) Duties of the Office of Science.--In carrying out the 
     program under this section, the Office of Science shall--
       (1) support both individual investigators and 
     multidisciplinary teams of investigators;
       (2) pursuant to subsection (c), develop, plan, construct, 
     acquire, or operate special equipment or facilities for the 
     use of investigators conducting research and development in 
     nanoscience and nanoengineering;
       (3) support technology transfer activities to benefit 
     industry and other users of nanoscience and nanoengineering; 
     and
       (4) coordinate research and development activities with 
     industry and other Federal agencies.
       (c) Nanoscience and Nanoengineering Research Centers and 
     Major Instrumentation.--
       (1) Authorization.--From amounts authorized to be 
     appropriated under section 1251(b), the amounts specified 
     under subsection (d)(2) shall, subject to appropriations, be 
     available for projects to develop, plan, construct, acquire, 
     or operate special equipment, instrumentation, or facilities 
     for investigators conducting research and development in 
     nanoscience and nanoengineering.

[[Page S3748]]

       (2) Projects.--Projects under paragraph (1) may include the 
     measurement of properties at the scale of 1 to 100 
     nanometers, manipulation at such scales, and the integration 
     of technologies based on nanoscience or nanoengineering into 
     bulk materials or other technologies.
       (3) Facilities.--Facilities under paragraph (1) may include 
     electron microcharacterization facilities, microlithography 
     facilities, scanning probe facilities and related 
     instrumentation science.
       (4) Collaboration.--The Secretary shall encourage 
     collaborations among universities, laboratories and industry 
     at facilities under this subsection. At least one facility 
     under this subsection shall have a specific mission of 
     technology transfer to other institutions and to industry.
       (d) Authorization of Appropriations.--
       (1) Total authorization.--From amounts authorized to be 
     appropriated under section 1251(b), the following amounts are 
     authorized for activities under this section--
       (A) $270,000,000 for fiscal year 2003;
       (B) $290,000,000 for fiscal year 2004;
       (C) $310,000,000 for fiscal year 2005; and
       (D) $330,000,000 for fiscal year 2006.
       (2) Nanoscience and nanoengineering research centers and 
     major instrumentation.--Of the amounts under paragraph (1), 
     the following amounts are authorized to carry out subsection 
     (c)--
       (A) $135,000,000 for fiscal year 2003;
       (B) $150,000,000 for fiscal year 2004;
       (C) $120,000,000 for fiscal year 2005; and
       (D) $100,000,000 for fiscal year 2006.

     SEC. 1253. ADVANCED SCIENTIFIC COMPUTING FOR ENERGY MISSIONS.

       (a) Establishment.--The Secretary, acting through the 
     Office of Science, shall support a program to advance the 
     Nation's computing capability across a diverse set of grand 
     challenge computationally based science problems related to 
     departmental missions.
       (b) Duties of the Office of Science.--In carrying out the 
     program under this section, the Office of Science shall--
       (1) advance basic science through computation by developing 
     software to solve grand challenge science problems on new 
     generations of computing platforms;
       (2) enhance the foundations for scientific computing by 
     developing the basic mathematical and computing systems 
     software needed to take full advantage of the computing 
     capabilities of computers with peak speeds of 100 teraflops 
     or more, some of which may be unique to the scientific 
     problem of interest;
       (3) enhance national collaboratory and networking 
     capabilities by developing software to integrate 
     geographically separated researchers into effective research 
     teams and to facilitate access to and movement and analysis 
     of large (petabyte) data sets; and
       (4) maintain a robust scientific computing hardware 
     infrastructure to ensure that the computing resources needed 
     to address DOE missions are available; explore new computing 
     approaches and technologies that promise to advance 
     scientific computing.
       (c) High-Performance Computing Act Program.--Section 203(a) 
     of the High-Performance Computing Act of 1991 (15 U.S.C. 
     5523(a)) is amended--
       (1) in paragraph (3), by striking ``and'';
       (2) in paragraph (4), by striking the period and inserting 
     ``; and''; and
       (3) by adding after paragraph (4) the following:
       ``(5) conduct an integrated program of research, 
     development, and provision of facilities to develop and 
     deploy to scientific and technical users the high-performance 
     computing and collaboration tools needed to fulfill the 
     statutory missions of the Department of Energy in conducting 
     basic and applied energy research.''.
       (d) Coordination With the DOE National Nuclear Security 
     Agency Accelerated Strategic Computing Initiative and Other 
     National Computing Programs.--The Secretary shall ensure that 
     this program, to the extent feasible, is integrated and 
     consistent with--
       (1) the Accelerated Strategic Computing Initiative of the 
     National Nuclear Security Agency; and
       (2) other national efforts related to advanced scientific 
     computing for science and engineering.
       (e) Authorization of Appropriations.--From amounts 
     authorized under section 1251(b), the following amounts are 
     authorized for activities under this section--
       (1) $285,000,000 for fiscal year 2003;
       (2) $300,000,000 for fiscal year 2004;
       (3) $310,000,000 for fiscal year 2005; and
       (4) $320,000,000 for fiscal year 2006.

     SEC. 1254. FUSION ENERGY SCIENCES PROGRAM AND PLANNING.

       (a) Overall Plan for Fusion Energy Sciences Program.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this subtitle, the Secretary, after consultation 
     with the Fusion Energy Sciences Advisory Committee, shall 
     develop and transmit to the Congress a plan to ensure a 
     strong scientific base for the Fusion Energy Sciences Program 
     within the Office of Science and to enable the experiments 
     described in subsections (b) and (c).
       (2) Objectives of plan.--The plan under this subsection 
     shall include as its objectives--
       (A) to ensure that existing fusion research facilities and 
     equipment are more fully utilized with appropriate 
     measurements and control tools;
       (B) to ensure a strengthened fusion science theory and 
     computational base;
       (C) to encourage and ensure that the selection of and 
     funding for new magnetic and inertial fusion research 
     facilities is based on scientific innovation and cost 
     effectiveness;
       (D) to improve the communication of scientific results and 
     methods between the fusion science community and the wider 
     scientific community;
       (E) to ensure that adequate support is provided to optimize 
     the design of the magnetic fusion burning plasma experiments 
     referred to in subsections (b) and (c); and
       (F) to ensure that inertial confinement fusion facilities 
     are utilized to the extent practicable for the purpose of 
     inertial fusion energy research and development.
       (b) Plan for United States Fusion Experiment.--
       (1) In general.--The Secretary, after consultation with the 
     Fusion Energy Sciences Advisory Committee, shall develop a 
     plan for construction in the United States of a magnetic 
     fusion burning plasma experiment for the purpose of 
     accelerating scientific understanding of fusion plasmas. The 
     Secretary shall request a review of the plan by the National 
     Academy of Sciences and shall transmit the plan and the 
     review to the Congress by July 1, 2004.
       (2) Requirements of plan.--The plan described in paragraph 
     (1) shall--
       (A) address key burning plasma physics issues; and
       (B) include specific information on the scientific 
     capabilities of the proposed experiment, the relevance of 
     these capabilities to the goal of practical fusion energy, 
     and the overall design of the experiment including its 
     estimated cost and potential construction sites.
       (c) Plan for Participation in an International 
     Experiment.--In addition to the plan described in subsection 
     (b), the Secretary, after consultation with the Fusion Energy 
     Sciences Advisory Committee, may also develop a plan for 
     United States participation in an international burning 
     plasma experiment for the same purpose, whose construction is 
     found by the Secretary to be highly likely and where United 
     States participation is cost-effective relative to the cost 
     and scientific benefits of a domestic experiment described in 
     subsection (b). If the Secretary elects to develop a plan 
     under this subsection, he shall include the information 
     described in subsection (b)(2), and an estimate of the cost 
     of United States participation in such an international 
     experiment. The Secretary shall request a review by the 
     National Academy of Sciences of a plan developed under this 
     subsection, and shall transmit the plan and the review to the 
     Congress no later than July 1, 2004.
       (d) Authorization for Research and Development.--The 
     Secretary, through the Office of Science, may conduct any 
     research and development necessary to fully develop the plans 
     described in this section.
       (e) Authorization of Appropriations.--From amounts 
     authorized under section 1251, the following amounts are 
     authorized for activities under this section and for 
     activities of the Fusion Energy Science Program--
       (1) for fiscal year 2003, $335,000,000;
       (2) for fiscal year 2004, $349,000,000;
       (3) for fiscal year 2005, $362,000,000; and
       (4) for fiscal year 2006, $377,000,000.

        Subtitle F--Energy, Safety, and Environmental Protection

     SEC. 1261. CRITICAL ENERGY INFRASTRUCTURE PROTECTION RESEARCH 
                   AND DEVELOPMENT.

       (a) In General.--The Secretary shall carry out a research, 
     development, demonstration and technology deployment program, 
     in partnership with industry, on critical energy 
     infrastructure protection, consistent with the roles and 
     missions outlined for the Secretary in Presidential Decision 
     Directive 63, entitled ``Critical Infrastructure 
     Protection''. The program shall have the following goals:
       (1) Increase the understanding of physical and information 
     system disruptions to the energy infrastructure that could 
     result in cascading or widespread regional outages.
       (2) Develop energy infrastructure assurance ``best 
     practices'' through vulnerability and risk assessments.
       (3) Protect against, mitigate the effect of, and improve 
     the ability to recover from disruptive incidents within the 
     energy infrastructure.
       (b) Program Scope.--The program under subsection (a) shall 
     include research, development, deployment, technology 
     demonstration for--
       (1) analysis of energy infrastructure interdependencies to 
     quantify the impacts of system vulnerabilities in relation to 
     each other;
       (2) probabilistic risk assessment of the energy 
     infrastructure to account for unconventional and terrorist 
     threats;
       (3) incident tracking and trend analysis tools to assess 
     the severity of threats and reported incidents to the energy 
     infrastructure; and
       (4) integrated multisensor, warning and mitigation 
     technologies to detect, integrate, and localize events 
     affecting the energy infrastructure including real time 
     control to permit the reconfiguration of energy delivery 
     systems.
       (c) Regional Coordination.--The program under this section 
     shall cooperate with Departmental activities to promote 
     regional coordination under section 102 of this Act, to 
     ensure that the technologies and assessments developed by the 
     program are transferred in a timely manner to State and local 
     authorities, and to the energy industries.
       (d) Coordination With Industry Research Organizations.--The 
     Secretary may enter into grants, contracts, and cooperative 
     agreements with industry research organizations to facilitate 
     industry participation in research under this section and to 
     fulfill applicable cost-sharing requirements.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to the Secretary to carry out this 
     section--
       (1) $25,000,000 for fiscal year 2003;
       (2) $26,000,000 for fiscal year 2004;
       (3) $27,000,000 for fiscal year 2005; and
       (4) $28,000,000 for fiscal year 2006.
       (f) Critical Energy Infrastructure Facility Defined.--For 
     purposes of this section, the

[[Page S3749]]

     term ``critical energy infrastructure facility'' means a 
     physical or cyber-based system or service for the generation, 
     transmission or distribution of electrical energy, or the 
     production, refining, transportation, or storage of 
     petroleum, natural gas, or petroleum product, the incapacity 
     or destruction of which would have a debilitating impact on 
     the defense or economic security of the United States. The 
     term shall not include a facility that is licensed by the 
     Nuclear Regulatory Commission under section 103 or 104b of 
     the Atomic Energy Act of 1954 (42 U.S.C. 2133 and 2134(b)).

     SEC. 1262. RESEARCH AND DEMONSTRATION FOR REMEDIATION OF 
                   GROUNDWATER FROM ENERGY ACTIVITIES.

       (a) In General.--The Secretary shall carry out a research, 
     development, demonstration, and technology deployment program 
     to improve methods for environmental restoration of 
     groundwater contaminated by energy activities, including oil 
     and gas production, surface and underground mining of coal, 
     and in-situ extraction of energy resources.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary to carry out this section 
     $10,000,000 for each of fiscal years 2003 through 2006.

           TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

               Subtitle A--Department of Energy Programs

     SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RESEARCH.

       (a) Program Direction.--The Secretary, acting through the 
     Office of Science, shall conduct a comprehensive research 
     program to understand and address the effects of energy 
     production and use on the global climate system.
       (b) Program Elements.--
       (1) Climate modeling.--The Secretary shall--
       (A) conduct observational and analytical research to 
     acquire and interpret the data needed to describe the 
     radiation balance from the surface of the Earth to the top of 
     the atmosphere;
       (B) determine the factors responsible for the Earth's 
     radiation balance and incorporate improved understanding of 
     such factors in climate models;
       (C) improve the treatment of aerosols and clouds in climate 
     models;
       (D) reduce the uncertainty in decade-to-century model-based 
     projections of climate change; and
       (E) increase the availability and utility of climate change 
     simulations to researchers and policy makers interested in 
     assessing the relationship between energy and climate change.
       (2) Carbon cycle.--The Secretary shall--
       (A) carry out field research and modeling activities--
       (i) to understand and document the net exchange of carbon 
     dioxide between major terrestrial ecosystems and the 
     atmosphere; or
       (ii) to evaluate the potential of proposed methods of 
     carbon sequestration;
       (B) develop and test carbon cycle models; and
       (C) acquire data and develop and test models to simulate 
     and predict the transport, transformation, and fate of 
     energy-related emissions in the atmosphere.
       (3) Ecological processes.--The Secretary shall carry out 
     long-term experiments of the response of intact terrestrial 
     ecosystems to--
       (A) alterations in climate and atmospheric composition; or
       (B) land-use changes that affect ecosystem extent and 
     function.
       (4) Integrated assessment.--The Secretary shall develop and 
     improve methods and tools for integrated analyses of the 
     climate change system from emissions of aerosols and 
     greenhouse gases to the consequences of these emissions on 
     climate and the resulting effects of human-induced climate 
     change on economic and social systems, with emphasis on 
     critical gaps in integrated assessment modeling, including 
     modeling of technology innovation and diffusion and the 
     development of metrics of economic costs of climate change 
     and policies for mitigating or adapting to climate change.
       (c) Authorization of Appropriations.--From amounts 
     authorized under section 1251(b), there are authorized to be 
     appropriated to the Secretary for carrying out activities 
     under this section--
       (1) $150,000,000 for fiscal year 2003;
       (2) $175,000,000 for fiscal year 2004;
       (3) $200,000,000 for fiscal year 2005; and
       (4) $230,000,000 for fiscal year 2006.-
       (d) Limitation on Funds.--Funds authorized to be 
     appropriated under this section shall not be used for the 
     development, demonstration, or deployment of technology to 
     reduce, avoid, or sequester greenhouse gas emissions.

     SEC. 1302. AMENDMENTS TO THE FEDERAL NONNUCLEAR RESEARCH AND 
                   DEVELOPMENT ACT OF 1974.

       Section 6 of the Federal Nonnuclear Energy Research and 
     Development Act of 1974 (42 U.S.C. 5905) is amended--
       (1) in subsection (a)--
       (A) in paragraph (2), by striking ``and'' at the end;
       (B) in paragraph (3) by striking the period at the end and 
     inserting ``, and''; and
       (C) by adding at the end the following:
       ``(4) solutions to the effective management of greenhouse 
     gas emissions in the long term by the development of 
     technologies and practices designed to--
       ``(A) reduce or avoid anthropogenic emissions of greenhouse 
     gases;
       ``(B) remove and sequester greenhouse gases from emissions 
     streams; and
       ``(C) remove and sequester greenhouse gases from the 
     atmosphere.''; and
       (2) in subsection (b)--
       (A) in paragraph (2), by striking ``subsection (a)(1) 
     through (3)'' and inserting ``paragraphs (1) through (4) of 
     subsection (a)''; and
       (B) in paragraph (3)--
       (i) in subparagraph (R), by striking ``and'' at the end;
       (ii) in subparagraph (S), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(T) to pursue a long-term climate technology strategy 
     designed to demonstrate a variety of technologies by which 
     stabilization of greenhouse gases might be best achieved, 
     including accelerated research, development, demonstration 
     and deployment of--
       ``(i) renewable energy systems;
       ``(ii) advanced fossil energy technology;
       ``(iii) advanced nuclear power plant design;
       ``(iv) fuel cell technology for residential, industrial and 
     transportation applications;
       ``(v) carbon sequestration practices and technologies, 
     including agricultural and forestry practices that store and 
     sequester carbon;
       ``(vi) efficient electrical generation, transmission and 
     distribution technologies; and
       ``(vii) efficient end use energy technologies.''.

             Subtitle B--Department of Agriculture Programs

     SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED RESEARCH.

       (a) Basic Research.--
       (1) In general.--The Secretary of Agriculture shall carry 
     out research in the areas of soil science that promote 
     understanding of--
       (A) the net sequestration of organic carbon in soil; and
       (B) net emissions of other greenhouse gases from 
     agriculture.
       (2) Agricultural research service.--The Secretary of 
     Agriculture, acting through the Agricultural Research 
     Service, shall collaborate with other Federal agencies in 
     developing data and carrying out research addressing soil 
     carbon fluxes (losses and gains) and net emissions of methane 
     and nitrous oxide from cultivation and animal management 
     activities.
       (3) Cooperative state research, extension, and education 
     service.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Cooperative State Research, Extension, and 
     Education Service, shall establish a competitive grant 
     program to carry out research on the matters described in 
     paragraph (1) in land grant universities and other research 
     institutions.
       (B) Consultation on research topics.--Before issuing a 
     request for proposals for basic research under paragraph (1), 
     the Cooperative State Research, Extension, and Education 
     Service shall consult with the Agricultural Research Service 
     to ensure that proposed research areas are complementary with 
     and do not duplicate research projects underway at the 
     Agricultural Research Service or other Federal agencies.
       (b) Applied Research.--
       (1) In general.--The Secretary of Agriculture shall carry 
     out applied research in the areas of soil science, agronomy, 
     agricultural economics and other agricultural sciences to--
       (A) promote understanding of--
       (i) how agricultural and forestry practices affect the 
     sequestration of organic and inorganic carbon in soil and net 
     emissions of other greenhouse gases;
       (ii) how changes in soil carbon pools are cost-effectively 
     measured, monitored, and verified; and
       (iii) how public programs and private market approaches can 
     be devised to incorporate carbon sequestration in a broader 
     societal greenhouse gas emission reduction effort;
       (B) develop methods for establishing baselines for 
     measuring the quantities of carbon and other greenhouse gases 
     sequestered; and
       (C) evaluate leakage and performance issues.
       (2) Requirements.--To the maximum extent practicable, 
     applied research under paragraph (1) shall--
       (A) draw on existing technologies and methods; and
       (B) strive to provide methodologies that are accessible to 
     a nontechnical audience.
       (3) Minimization of adverse environmental impacts.--All 
     applied research under paragraph (1) shall be conducted with 
     an emphasis on minimizing adverse environmental impacts.
       (4) Natural resources conservation service.--The Secretary 
     of Agriculture, acting through the Natural Resources 
     Conservation Service, shall collaborate with other Federal 
     agencies, including the National Institute of Standards and 
     Technology, in developing new measuring techniques and 
     equipment or adapting existing techniques and equipment to 
     enable cost-effective and accurate monitoring and 
     verification, for a wide range of agricultural and forestry 
     practices, of--
       (A) changes in soil carbon content in agricultural soils, 
     plants, and trees; and
       (B) net emissions of other greenhouse gases.
       (5) Cooperative state research, extension, and education 
     service.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Cooperative State Research, Extension, and 
     Education Service, shall establish a competitive grant 
     program to encourage research on the matters described in 
     paragraph (1) by land grant universities and other research 
     institutions.
       (B) Consultation on research topics.--Before issuing a 
     request for proposals for applied research under paragraph 
     (1), the Cooperative State Research, Extension, and Education 
     Service shall consult with the National Resources 
     Conservation Service and the Agricultural Research Service to 
     ensure that proposed research areas are complementary with 
     and do not duplicate research projects underway at the 
     Agricultural Research Service or other Federal agencies.
       (c) Research Consortia.--
       (1) In general.--The Secretary of Agriculture may designate 
     not more than two research consortia to carry out research 
     projects under this

[[Page S3750]]

     section, with the requirement that the consortia propose to 
     conduct basic research under subsection (a) and applied 
     research under subsection (b).
       (2) Selection.--The consortia shall be selected in a 
     competitive manner by the Cooperative State Research, 
     Extension, and Education Service.
       (3) Eligible consortium participants.--Entities eligible to 
     participate in a consortium include--
       (A) land grant colleges and universities;
       (B) private research institutions;
       (C) State geological surveys;
       (D) agencies of the Department of Agriculture;
       (E) research centers of the National Aeronautics and Space 
     Administration and the Department of Energy;
       (F) other Federal agencies;
       (G) representatives of agricultural businesses and 
     organizations with demonstrated expertise in these areas; and
       (H) representatives of the private sector with demonstrated 
     expertise in these areas.
       (4) Reservation of funding.--If the Secretary of 
     Agriculture designates one or two consortia, the Secretary of 
     Agriculture shall reserve for research projects carried out 
     by the consortium or consortia not more than 25 percent of 
     the amounts made available to carry out this section for a 
     fiscal year.
       (d) Standards of Precision.--
       (1) Conference.--Not later than 3 years after the date of 
     enactment of this subtitle, the Secretary of Agriculture, 
     acting through the Agricultural Research Service and in 
     consultation with the Natural Resources Conservation Service, 
     shall convene a conference of key scientific experts on 
     carbon sequestration and measurement techniques from various 
     sectors (including the Government, academic, and private 
     sectors) to--
       (A) discuss benchmark standards of precision for measuring 
     soil carbon content and net emissions of other greenhouse 
     gases;
       (B) designate packages of measurement techniques and 
     modeling approaches to achieve a level of precision agreed on 
     by the participants in the conference; and
       (C) evaluate results of analyses on baseline, permanence, 
     and leakage issues.
       (2) Development of benchmark standards.--
       (A) In general.--The Secretary shall develop benchmark 
     standards for measuring the carbon content of soils and 
     plants (including trees) based on--
       (i) information from the conference under paragraph (1);
       (ii) research conducted under this section; and
       (iii) other information available to the Secretary.
       (B) Opportunity for public comment.--The Secretary shall 
     provide an opportunity for the public to comment on benchmark 
     standards developed under subparagraph (A).
       (3) Report.--Not later than 180 days after the conclusion 
     of the conference under paragraph (1), the Secretary of 
     Agriculture shall submit to the Committee on Agriculture of 
     the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a report 
     on the results of the conference.
       (e) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section $25,000,000 for each of fiscal years 
     2003 through 2006.
       (2) Allocation.--Of the amounts made available to carry out 
     this section for a fiscal year, at least 50 percent shall be 
     allocated for competitive grants by the Cooperative State 
     Research, Extension, and Education Service.

     SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION PROJECTS AND 
                   OUTREACH.

       (a) Demonstration Projects.--
       (1) Development of monitoring programs.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Natural Resources Conservation Service and in 
     cooperation with local extension agents, experts from land 
     grant universities, and other local agricultural or 
     conservation organizations, shall develop user-friendly 
     programs that combine measurement tools and modeling 
     techniques into integrated packages to monitor the carbon 
     sequestering benefits of conservation practices and net 
     changes in greenhouse gas emissions.
       (B) Benchmark levels of precision.--The programs developed 
     under subparagraph (A) shall strive to achieve benchmark 
     levels of precision in measurement in a cost-effective 
     manner.
       (2) Projects.--
       (A) In general.--The Secretary of Agriculture, acting 
     through the Farm Service Agency, shall establish a program 
     under which projects use the monitoring programs developed 
     under paragraph (1) to demonstrate the feasibility of methods 
     of measuring, verifying, and monitoring--
       (i) changes in organic carbon content and other carbon 
     pools in agricultural soils, plants, and trees; and
       (ii) net changes in emissions of other greenhouse gases.
       (B) Evaluation of implications.--The projects under 
     subparagraph (A) shall include evaluation of the implications 
     for reassessed baselines, carbon or other greenhouse gas 
     leakage, and permanence of sequestration.
       (C) Submission of proposals.--Proposals for projects under 
     subparagraph (A) shall be submitted by the appropriate agency 
     of each State, in cooperation with interested local 
     jurisdictions and State agricultural and conservation 
     organizations.
       (D) Limitation.--Not more than 10 projects under 
     subparagraph (A) may be approved in conjunction with applied 
     research projects under section 1311(b) until benchmark 
     measurement and assessment standards are established under 
     section 1311(d).
       (E) National forest system land.--The Secretary of 
     Agriculture shall consider the use of National Forest System 
     land as sites to demonstrate the feasibility of monitoring 
     programs developed under paragraph (1).
       (b) Outreach.--
       (1) In general.--The Cooperative State Research, Extension, 
     and Education Service shall widely disseminate information 
     about the economic and environmental benefits that can be 
     generated by adoption of conservation practices (including 
     benefits from increased sequestration of carbon and reduced 
     emission of other greenhouse gases).
       (2) Project results.--The Cooperative State Research, 
     Extension, and Education Service shall inform farmers, 
     ranchers, and State agricultural and energy offices in each 
     State of--
       (A) the results of demonstration projects under subsection 
     (a)(2) in the State; and
       (B) the ways in which the methods demonstrated in the 
     projects might be applicable to the operations of those 
     farmers and ranchers.
       (3) Policy outreach.--On a periodic basis, the Cooperative 
     State Research, Extension, and Education Service shall 
     disseminate information on the policy nexus between global 
     climate change mitigation strategies and agriculture, so that 
     farmers and ranchers may better understand the global 
     implications of the activities of farmers and ranchers.
       (c) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated to 
     carry out this section $10,000,000 for each of fiscal years 
     2003 through 2006.
       (2) Allocation.--Of the amounts made available to carry out 
     this section for a fiscal year, at least 50 percent shall be 
     allocated for demonstration projects under subsection (a)(2).

     SEC. 1313. 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 five 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 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.

          Subtitle C--International Energy Technology Transfer

     SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

       (a) Definitions.--In this section:
       (1) Clean energy technology.--The term ``clean energy 
     technology'' means an energy supply or end-use technology 
     that, over its lifecycle and compared to a similar technology 
     already in commercial use in developing countries, countries 
     in transition, and other partner countries--
       (A) emits substantially lower levels of pollutants or 
     greenhouse gases; and
       (B) may generate substantially smaller or less toxic 
     volumes of solid or liquid waste.
       (2) Interagency working group.--The term ``interagency 
     working group'' means the Interagency Working Group on Clean 
     Energy Technology Exports established under subsection (b).
       (b) Interagency Working Group.--
       (1) Establishment.--Not later than 90 days after the date 
     of enactment of this section, the Secretary of Energy, the 
     Secretary of Commerce, and the Administrator of the United 
     States Agency for International Development shall jointly 
     establish a Interagency Working Group on Clean Energy 
     Technology Exports. The interagency working group will focus 
     on opening and expanding energy markets and transferring 
     clean energy technology to the developing countries, 
     countries in transition, and other partner countries that are 
     expected to experience, over the next 20 years, the most 
     significant growth in energy production and associated 
     greenhouse gas emissions, including through technology 
     transfer programs under the Framework Convention on Climate 
     Change, other international agreements, and relevant Federal 
     efforts.
       (2) Membership.--The interagency working group shall be 
     jointly chaired by representatives appointed by the agency 
     heads under paragraph (1) and shall also include 
     representatives from the Department of State, the Department 
     of the Treasury, the Environmental Protection Agency, the 
     Export-Import Bank, the Overseas

[[Page S3751]]

     Private Investment Corporation, the Trade and Development 
     Agency, and other Federal agencies as deemed appropriate by 
     all three agency heads under paragraph (1).
       (3) Duties.--The interagency working group shall--
       (A) analyze technology, policy, and market opportunities 
     for international development, demonstration, and deployment 
     of clean energy technology;
       (B) investigate issues associated with building capacity to 
     deploy clean energy technology in developing countries, 
     countries in transition, and other partner countries, 
     including--
       (i) energy-sector reform;
       (ii) creation of open, transparent, and competitive markets 
     for energy technologies;
       (iii) availability of trained personnel to deploy and 
     maintain the technology; and
       (iv) demonstration and cost-buydown mechanisms to promote 
     first adoption of the technology;
       (C) examine relevant trade, tax, international, and other 
     policy issues to assess what policies would help open markets 
     and improve United States clean energy technology exports in 
     support of the following areas--
       (i) enhancing energy innovation and cooperation, including 
     energy sector and market reform, capacity building, and 
     financing measures;
       (ii) improving energy end-use efficiency technologies, 
     including buildings and facilities, vehicle, industrial, and 
     co-generation technology initiatives; and
       (iii) promoting energy supply technologies, including 
     fossil, nuclear, and renewable technology initiatives;
       (D) establish an advisory committee involving the private 
     sector and other interested groups on the export and 
     deployment of clean energy technology;
       (E) monitor each agency's progress towards meeting goals in 
     the 5-year strategic plan submitted to Congress pursuant to 
     the Energy and Water Development Appropriations Act, 2001, 
     and the Energy and Water Development Appropriations Act, 
     2002;
       (F) make recommendations to heads of appropriate Federal 
     agencies on ways to streamline Federal programs and policies 
     to improve each agency's role in the international 
     development, demonstration, and deployment of clean energy 
     technology;
       (G) make assessments and recommendations regarding the 
     distinct technological, market, regional, and stakeholder 
     challenges necessary to carry out the program; and
       (H) recommend conditions and criteria that will help ensure 
     that United States funds promote sound energy policies in 
     participating countries while simultaneously opening their 
     markets and exporting United States energy technology.
       (c) Federal Support for Clean Energy Technology Transfer.--
     Notwithstanding any other provision of law, each Federal 
     agency or Government corporation carrying out an assistance 
     program in support of the activities of United States persons 
     in the environment or energy sector of a developing country, 
     country in transition, or other partner country shall 
     support, to the maximum extent practicable, the transfer of 
     United States clean energy technology as part of that 
     program.
       (d) Annual Report.--Not later than 90 days after the date 
     of the enactment of this Act, and on April 1st of each year 
     thereafter, the Interagency Working Group shall submit a 
     report to Congress on its activities during the preceding 
     calendar year. The report shall include a description of the 
     technology, policy, and market opportunities for 
     international development, demonstration, and deployment of 
     clean energy technology investigated by the Interagency 
     Working Group in that year, as well as any policy 
     recommendations to improve the expansion of clean energy 
     markets and United States clean energy technology exports.
       (e) Report on Use of Funds.--Not later than October 1, 
     2002, and each year thereafter, the Secretary of State, in 
     consultation with other Federal agencies, shall submit a 
     report to Congress indicating how United States funds 
     appropriated for clean energy technology exports and other 
     relevant Federal programs are being directed in a manner that 
     promotes sound energy policy commitments in developing 
     countries, countries in transition, and other partner 
     countries, including efforts pursuant to multilateral 
     environmental agreements.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to the departments, agencies, and entities 
     of the United States described in subsection (b) such sums as 
     may be necessary to support the transfer of clean energy 
     technology, consistent with the subsidy codes of the World 
     Trade Organization, as part of assistance programs carried 
     out by those departments, agencies, and entities in support 
     of activities of United States persons in the energy sector 
     of a developing country, country in transition, or other 
     partner country.

     SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT 
                   PROGRAM.

       Section 1608 of the Energy Policy Act of 1992 (42 U.S.C. 
     13387) is amended by striking subsection (l) and inserting 
     the following:
       ``(l) International Energy Technology Deployment Program.--
       ``(1) Definitions.--In this subsection:
       ``(A) International energy deployment project.--The term 
     `international energy deployment project' means a project to 
     construct an energy production facility outside the United 
     States--
       ``(i) the output of which will be consumed outside the 
     United States; and
       ``(ii) the deployment of which will result in a greenhouse 
     gas reduction per unit of energy produced when compared to 
     the technology that would otherwise be implemented--

       ``(I) 10 percentage points or more, in the case of a unit 
     placed in service before January 1, 2010;
       ``(II) 20 percentage points or more, in the case of a unit 
     placed in service after December 31, 2009, and before January 
     1, 2020; or
       ``(III) 30 percentage points or more, in the case of a unit 
     placed in service after December 31, 2019, and before January 
     1, 2030.

       ``(B) Qualifying international energy deployment project.--
     The term `qualifying international energy deployment project' 
     means an international energy deployment project that--
       ``(i) is submitted by a United States firm to the Secretary 
     in accordance with procedures established by the Secretary by 
     regulation;
       ``(ii) uses technology that has been successfully developed 
     or deployed in the United States;
       ``(iii) meets the criteria of subsection (k);
       ``(iv) is approved by the Secretary, with notice of the 
     approval being published in the Federal Register; and
       ``(v) complies with such terms and conditions as the 
     Secretary establishes by regulation.
       ``(C) United states.--For purposes of this paragraph, the 
     term `United States', when used in a geographical sense, 
     means the 50 States, the District of Columbia, Puerto Rico, 
     Guam, the Virgin Islands, American Samoa, and the 
     Commonwealth of the Northern Mariana Islands.
       ``(2) Pilot program for financial assistance.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Secretary shall, by 
     regulation, provide for a pilot program for financial 
     assistance for qualifying international energy deployment 
     projects.
       ``(B) Selection criteria.--After consultation with the 
     Secretary of State, the Secretary of Commerce, and the United 
     States Trade Representative, the Secretary shall select 
     projects for participation in the program based solely on the 
     criteria under this title and without regard to the country 
     in which the project is located.
       ``(C) Financial assistance.--
       ``(i) In general.--A United States firm that undertakes a 
     qualifying international energy deployment project that is 
     selected to participate in the pilot program shall be 
     eligible to receive a loan or a loan guarantee from the 
     Secretary.
       ``(ii) Rate of interest.--The rate of interest of any loan 
     made under clause (i) shall be equal to the rate for Treasury 
     obligations then issued for periods of comparable maturities.
       ``(iii) Amount.--The amount of a loan or loan guarantee 
     under clause (i) shall not exceed 50 percent of the total 
     cost of the qualified international energy deployment 
     project.
       ``(iv) Developed countries.--Loans or loan guarantees made 
     for projects to be located in a developed country, as listed 
     in Annex I of the United Nations Framework Convention on 
     Climate Change, shall require at least a 50 percent 
     contribution towards the total cost of the loan or loan 
     guarantee by the host country.
       ``(v) Developing countries.--Loans or loan guarantees made 
     for projects to be located in a developing country (those 
     countries not listed in Annex I of the United Nations 
     Framework Convention on Climate Change) shall require at 
     least a 10 percent contribution towards the total cost of the 
     loan or loan guarantee by the host country.
       ``(vi) Capacity building research.--Proposals made for 
     projects to be located in a developing country may include a 
     research component intended to build technological capacity 
     within the host country. Such research must be related to the 
     technologies being deployed and must involve both an 
     institution in the host country and an industry, university 
     or national laboratory participant from the United States. 
     The host institution shall contribute at least 50 percent of 
     funds provided for the capacity building research.
       ``(D) Coordination with other programs.--A qualifying 
     international energy deployment project funded under this 
     section shall not be eligible as a qualifying clean coal 
     technology under section 415 of the Clean Air Act (42 U.S.C. 
     7651n).
       ``(E) Report.--Not later than 5 years after the date of 
     enactment of this subsection, the Secretary shall submit to 
     the President a report on the results of the pilot projects.
       ``(F) Recommendation.--Not later than 60 days after 
     receiving the report under subparagraph (E), the President 
     shall submit to Congress a recommendation, based on the 
     results of the pilot projects as reported by the Secretary of 
     Energy, concerning whether the financial assistance program 
     under this section should be continued, expanded, reduced, or 
     eliminated.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary to carry out 
     this section $100,000,000 for each of fiscal years 2003 
     through 2011, to remain available until expended.''.

           Subtitle D--Climate Change Science and Information

      PART I--AMENDMENTS TO THE GLOBAL CHANGE RESEARCH ACT OF 1990

     SEC. 1331. AMENDMENT OF GLOBAL CHANGE RESEARCH ACT OF 1990.

       Except as otherwise expressly provided, whenever in this 
     subtitle an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Global Change Research Act of 1990 (15 
     U.S.C. 2921 et seq.).

     SEC. 1332. CHANGES IN DEFINITIONS.

       Paragraph (1) of section 2 (15 U.S.C. 2921) is amended by 
     striking ``Earth and Environmental Sciences'' inserting 
     ``Global Change Research''.

     SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

       Section 102 (15 U.S.C. 2932) is amended--
       (1) by striking ``earth and environmental sciences'' in the 
     section heading and inserting ``global change research'';

[[Page S3752]]

       (2) by striking ``Earth and Environmental Sciences'' in 
     subsection (a) and inserting ``Global Change Research'';
       (3) by striking the last sentence of subsection (b) and 
     inserting ``The representatives shall be the Deputy Secretary 
     or the Deputy Secretary's designee (or, in the case of an 
     agency other than a department, the deputy head of that 
     agency or the deputy's designee).'';
       (4) by striking ``Chairman of the Council,'' in subsection 
     (c) and inserting ``Director of the Office of National 
     Climate Change Policy with advice from the Chairman of the 
     Council, and'';
       (5) by redesignating subsections (d) and (e) as subsections 
     (e) and (f), respectively; and
       (6) by inserting after subsection (c) the following:
       ``(d) Subcommittees and Working Groups.--
       ``(1) In general.--There shall be a Subcommittee on Global 
     Change Research, which shall carry out such functions of the 
     Committee as the Committee may assign to it.
       ``(2) Membership.--The membership of the Subcommittee shall 
     consist of--
       ``(A) the membership of the Subcommittee on Global Change 
     Research of the Committee on Environment and Natural 
     Resources (the functions of which are transferred to the 
     Subcommittee established by this subsection) established by 
     the National Science and Technology Council; and
       ``(B) such additional members as the Chair of the Committee 
     may, from time to time, appoint.
       ``(3) Chair.--A high ranking official of one of the 
     departments or agencies described in subsection (b), 
     appointed by the Chair of the Committee with advice from the 
     Chairman of the Council, shall chair the subcommittee. The 
     Chairperson shall be knowledgeable and experienced with 
     regard to the administration of scientific research programs, 
     and shall be a representative of an agency that contributes 
     substantially, in terms of scientific research capability and 
     budget, to the Program.
       ``(4) Other subcommittees and working groups.--The 
     Committee may establish such additional subcommittees and 
     working groups as it sees fit.''.

     SEC. 1334. CHANGE IN NATIONAL GLOBAL CHANGE RESEARCH PLAN.

       Section 104 (15 U.S.C. 2934) is amended--
       (1) by inserting ``short-term and long-term'' before 
     ``goals'' in subsection (b)(1);
       (2) by striking ``usable information on which to base 
     policy decisions related to'' in subsection (b)(1) and 
     inserting ``information relevant and readily usable by local, 
     State, and Federal decisionmakers, as well as other end-
     users, for the formulation of effective decisions and 
     strategies for measuring, predicting, preventing, mitigating, 
     and adapting to'';
       (3) by adding at the end of subsection (c) the following:
       ``(6) Methods for integrating information to provide 
     predictive and other tools for planning and decisionmaking by 
     governments, communities and the private sector.'';
       (4) by striking subsection (d)(3) and inserting the 
     following:
       ``(3) combine and interpret data from various sources to 
     produce information readily usable by local, State, and 
     Federal policymakers, and other end-users, attempting to 
     formulate effective decisions and strategies for preventing, 
     mitigating, and adapting to the effects of global change.'';
       (5) by striking ``and'' in subsection (d)(2);
       (6) by striking ``change.'' in subsection (d)(3) and 
     inserting ``change; and'';
       (7) by adding at the end of subsection (d) the following:
       ``(4) establish a common assessment and modeling framework 
     that may be used in both research and operations to predict 
     and assess the vulnerability of natural and managed 
     ecosystems and of human society in the context of other 
     environmental and social changes.''; and
       (8) by adding at the end the following:
       ``(g) Strategic Plan; Revised Implementation Plan.--The 
     Chairman of the Council, through the Committee, shall develop 
     a strategic plan for the United States Global Climate Change 
     Research Program for the 10-year period beginning in 2002 and 
     submit the plan to the Congress within 180 days after the 
     date of enactment of the Global Climate Change Act of 2002. 
     The Chairman, through the Committee, shall also submit 
     revised implementation plans as required under subsection 
     (a).''.

     SEC. 1335. INTEGRATED PROGRAM OFFICE.

       Section 105 (15 U.S.C. 2935) is amended--
       (1) by redesignating subsections (a), (b), and (c) as 
     subsections (b), (c), and (d), respectively; and
       (2) by inserting before subsection (b), as redesignated, 
     the following:
       ``(a) Integrated Program Office.--
       ``(1) Establishment.--There is established in the Office of 
     Science and Technology Policy an integrated program office 
     for the global change research program.
       ``(2) Organization.--The integrated program office 
     established under paragraph (1) shall be headed by the 
     associate director with responsibility for climate change 
     science and technology and shall include, to the maximum 
     extent feasible, a representative from each Federal agency 
     participating in the global change research program.
       ``(3) Function.--The integrated program office shall--
       ``(A) manage, working in conjunction with the Committee, 
     interagency coordination and program integration of global 
     change research activities and budget requests;
       ``(B) ensure that the activities and programs of each 
     Federal agency or department participating in the program 
     address the goals and objectives identified in the strategic 
     research plan and interagency implementation plans;
       ``(C) ensure program and budget recommendations of the 
     Committee are communicated to the President and are 
     integrated into the climate change action strategy;
       ``(D) review, solicit, and identify, and allocate funds 
     for, partnership projects that address critical research 
     objectives or operational goals of the program, including 
     projects that would fill research gaps identified by the 
     program, and for which project resources are shared among at 
     least two agencies participating in the program; and
       ``(E) review and provide recommendations on, in conjunction 
     with the Committee, all annual appropriations requests from 
     Federal agencies or departments participating in the 
     program.'';
       (3) by striking ``Committee.'' in paragraph (2) of 
     subsection (c), as redesignated, and inserting ``Committee 
     and the Integrated Program Office.''; and
       (4) by inserting ``and the Integrated Program Office'' 
     after ``Committee'' in paragraph (1) of subsection (d), as 
     redesignated.

     SEC. 1336. RESEARCH GRANTS.

       Section 105 (15 U.S.C. 2935) is amended--
       (1) by redesignating subsection (c) as subsection (d); and
       (2) by inserting after subsection (b) the following:
       ``(c) Research Grants.--
       ``(1) Committee to develop list of priority research 
     areas.--The Committee shall develop a list of priority areas 
     for research and development on climate change that are not 
     being addressed by Federal agencies.
       ``(2) Director of ostp to transmit list to nsf.--The 
     Director of the Office of Science and Technology Policy shall 
     transmit the list to the National Science Foundation.
       ``(3) Funding through nsf.--
       ``(A) Budget request.--The National Science Foundation 
     shall include, as part of the annual request for 
     appropriations for the Science and Technology Policy 
     Institute, a request for appropriations to fund research in 
     the priority areas on the list developed under paragraph (1).
       ``(B) Authorization.--For fiscal year 2003 and each fiscal 
     year thereafter, there are authorized to be appropriated to 
     the National Science Foundation not less than $17,000,000, to 
     be made available through the Science and Technology Policy 
     Institute, for research in those priority areas.''.

     SEC. 1337. EVALUATION OF INFORMATION.

       Section 106 (15 U.S.C. 2936) is amended--
       (1) by striking ``Scientific'' in the section heading;
       (2) by striking ``and'' after the semicolon in paragraph 
     (2); and
       (3) by striking ``years.'' in paragraph (3) and inserting 
     ``years; and''; and
       (4) by adding at the end the following:
       ``(4) evaluates the information being developed under this 
     title, considering in particular its usefulness to local, 
     State, and national decisionmakers, as well as to other 
     stakeholders such as the private sector, after providing a 
     meaningful opportunity for the consideration of the views of 
     such stakeholders on the effectiveness of the Program and the 
     usefulness of the information.''.

           PART II--NATIONAL CLIMATE SERVICES AND MONITORING

     SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM ACT.

       Except as otherwise expressly provided, whenever in this 
     subtitle an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the National Climate Program Act (15 
     U.S.C. 2901 et seq.).

     SEC. 1342. CHANGES IN FINDINGS.

       Section 2 (15 U.S.C. 2901) is amended--
       (1) by striking ``Weather and climate change affect'' in 
     paragraph (1) and inserting ``Weather, climate change, and 
     climate variability affect public safety, environmental 
     security, human health,'';
       (2) by striking ``climate'' in paragraph (2) and inserting 
     ``climate, including seasonal and decadal fluctuations,'';
       (3) by striking ``changes.'' in paragraph (5) and inserting 
     ``changes and providing free exchange of meteorological 
     data.''; and
       (4) by adding at the end the following:
       ``(7) The present rate of advance in research and 
     development and application of such advances is inadequate 
     and new developments must be incorporated rapidly into 
     services for the benefit of the public.
       ``(8) The United States lacks adequate infrastructure and 
     research to meet national climate monitoring and prediction 
     needs.''.

     SEC. 1343. TOOLS FOR REGIONAL PLANNING.

       Section 5(d) (15 U.S.C. 2904(d)) is amended--
       (1) by redesignating paragraphs (4) through (9) as 
     paragraphs (5) through (10), respectively;
       (2) by inserting after paragraph (3) the following:
       ``(4) methods for improving modeling and predictive 
     capabilities and developing assessment methods to guide 
     national, regional, and local planning and decisionmaking on 
     land use, water hazards, and related issues;'';
       (3) by inserting ``sharing,'' after ``collection,'' in 
     paragraph (5), as redesignated;
       (4) by striking ``experimental'' each place it appears in 
     paragraph (9), as redesignated;
       (5) by striking ``preliminary'' in paragraph (10), as 
     redesignated;
       (6) by striking ``this Act,'' the first place it appears in 
     paragraph (10), as redesignated, and inserting ``the Global 
     Climate Change Act of 2002,''; and
       (7) by striking ``this Act,'' the second place it appears 
     in paragraph (10), as redesignated, and inserting ``that 
     Act,''.

     SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

       Section 9 (15 U.S.C. 2908) is amended--
       (1) by striking ``1979,'' and inserting ``2002,'';
       (2) by striking ``1980,'' and inserting ``2003,'';

[[Page S3753]]

       (3) by striking ``1981,'' and inserting ``2004,''; and
       (4) by striking ``$25,500,000'' and inserting 
     ``$75,500,000''.

     SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

       The Act (15 U.S.C. 2901 et seq.) is amended by inserting 
     after section 5 the following:

     ``SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

       ``Within 1 year after the date of enactment of the Global 
     Climate Change Act of 2002, the Secretary of Commerce shall 
     submit to the Senate Committee on Commerce, Science, and 
     Transportation and the House Science Committee a plan of 
     action for a National Climate Service under the National 
     Climate Program. The plan shall set forth recommendations and 
     funding estimates for--
       ``(1) a national center for operational climate monitoring 
     and predicting with the functional capacity to monitor and 
     adjust observing systems as necessary to reduce bias;
       ``(2) the design, deployment, and operation of an adequate 
     national climate observing system that builds upon existing 
     environmental monitoring systems and closes gaps in coverage 
     by existing systems;
       ``(3) the establishment of a national coordinated modeling 
     strategy, including a national climate modeling center to 
     provide a dedicated capability for climate modeling and a 
     regular schedule of projections on a long- and short-term 
     time schedule and at a range of spatial scales;
       ``(4) improvements in modeling and assessment capabilities 
     needed to integrate information to predict regional and local 
     climate changes and impacts;
       ``(5) in coordination with the private sector, improving 
     the capacity to assess the impacts of predicted and projected 
     climate changes and variations;
       ``(6) a program for long-term stewardship, quality control, 
     development of relevant climate products, and efficient 
     access to all relevant climate data, products, and critical 
     model simulations; and
       ``(7) mechanisms to coordinate among Federal agencies, 
     State, and local government entities and the academic 
     community to ensure timely and full sharing and dissemination 
     of climate information and services, both domestically and 
     internationally.''.

     SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND COOPERATION.

       The Secretary of Commerce, in cooperation with the 
     Administrator of the National Aeronautics and Space 
     Administration, shall conduct international research in the 
     Pacific region that will increase understanding of the nature 
     and predictability of climate variability in the Asia-Pacific 
     sector, including regional aspects of global environmental 
     change. Such research activities shall be conducted in 
     cooperation with other nations of the region. There are 
     authorized to be appropriated for purposes of this section 
     $1,500,000 to the National Oceanic and Atmospheric 
     Administration, $1,500,000 to the National Aeronautics and 
     Space Administration, and $500,000 for the Pacific ENSO 
     Applications Center.

     SEC. 1347. REPORTING ON TRENDS.

       (a) Atmospheric Monitoring and Verification Program.--The 
     Secretary of Commerce, in coordination with relevant Federal 
     agencies, shall, as part of the National Climate Service, 
     establish an atmospheric monitoring and verification program 
     utilizing aircraft, satellite, ground sensors, and modeling 
     capabilities to monitor, measure, and verify atmospheric 
     greenhouse gas levels, dates, and emissions. Where feasible, 
     the program shall measure emissions from identified sources 
     participating in the reporting system for verification 
     purposes. The program shall use measurements and standards 
     that are consistent with those utilized in the greenhouse gas 
     measurement and reporting system established under subsection 
     (a) and the registry established under section 1102.
       (b) Annual Reporting.--The Secretary of Commerce shall 
     issue an annual report that identifies greenhouse emissions 
     and trends on a local, regional, and national level. The 
     report shall also identify emissions or reductions 
     attributable to individual or multiple sources covered by the 
     greenhouse gas measurement and reporting system established 
     under section 1102.

     SEC. 1348. ARCTIC RESEARCH AND POLICY.

       (a) Arctic Research Commission.--Section 103(d) of the 
     Arctic Research and Policy Act of 1984 (15 U.S.C. 4102(d)) is 
     amended--
       (1) by striking ``exceed 90 days'' in the second sentence 
     of paragraph (1) and inserting ``exceed, in the case of the 
     chairperson of the Commission, 120 days, and, in the case of 
     any other member of the Commission, 90 days,'';
       (2) by striking ``Chairman'' in paragraph (2) and inserting 
     ``chairperson''.
       (b) Grants.--Section 104 of the Arctic Research and Policy 
     Act of 1984 (15 U.S.C. 4103) is amended by adding at the end 
     the following:
       ``(c) Funding for Arctic Research.--
       ``(1) In general.--With the prior approval of the 
     commission, or under authority delegated by the Commission, 
     and subject to such conditions as the Commission may specify, 
     the Executive Director appointed under section 106(a) may--
       ``(A) make grants to persons to conduct research concerning 
     the Arctic; and
       ``(B) make funds available to the National Science 
     Foundation or to Federal agencies for the conduct of research 
     concerning the Arctic.
       ``(2) Effect of action by executive director.--An action 
     taken by the executive director under paragraph (1) shall be 
     final and binding on the Commission.
       ``(3) Authorization of appropriations.--There are 
     authorized to be appropriated to the Commission such sums as 
     are necessary to carry out this section.''.

     SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

       (a) In General.--The Secretary of Commerce, through the 
     National Oceanic and Atmospheric Administration, shall carry 
     out a program of scientific research on potential abrupt 
     climate change designed--
       (1) to develop a global array of terrestrial and 
     oceanographic indicators of paleoclimate in order 
     sufficiently to identify and describe past instances of 
     abrupt climate change;
       (2) to improve understanding of thresholds and 
     nonlinearities in geophysical systems related to the 
     mechanisms of abrupt climate change;
       (3) to incorporate these mechanisms into advanced 
     geophysical models of climate change; and
       (4) to test the output of these models against an improved 
     global array of records of past abrupt climate changes.
       (b) Abrupt Climate Change Defined.--In this section, the 
     term ``abrupt climate change'' means a change in climate that 
     occurs so rapidly or unexpectedly that human or natural 
     systems may have difficulty adapting to it.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce $10,000,000 
     for each of the fiscal years 2003 through 2008, and such sums 
     as may be necessary for fiscal years after fiscal year 2008, 
     to carry out subsection (a).

             PART III--OCEAN AND COASTAL OBSERVING SYSTEM 

     SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

       (a) Establishment.--The President, through the National 
     Ocean Research Leadership Council, established by section 
     7902(a) of title 10, United States Code, shall establish and 
     maintain an integrated ocean and coastal observing system 
     that provides for long-term, continuous, and real-time 
     observations of the oceans and coasts for the purposes of--
       (1) understanding, assessing and responding to human-
     induced and natural processes of global change;
       (2) improving weather forecasts and public warnings;
       (3) strengthening national security and military 
     preparedness;
       (4) enhancing the safety and efficiency of marine 
     operations;
       (5) supporting efforts to restore the health of and manage 
     coastal and marine ecosystems and living resources;
       (6) monitoring and evaluating the effectiveness of ocean 
     and coastal environmental policies;
       (7) reducing and mitigating ocean and coastal pollution; 
     and
       (8) providing information that contributes to public 
     awareness of the state and importance of the oceans.
       (b) Council Functions.--In addition to its responsibilities 
     under section 7902(a) of such title, the Council shall be 
     responsible for planning and coordinating the observing 
     system and in carrying out this responsibility shall--
       (1) develop and submit to the Congress, within 6 months 
     after the date of enactment of this Act, a plan for 
     implementing a national ocean and coastal observing system 
     that--
       (A) uses an end-to-end engineering and development approach 
     to develop a system design and schedule for operational 
     implementation;
       (B) determines how current and planned observing activities 
     can be integrated in a cost-effective manner;
       (C) provides for regional and concept demonstration 
     projects;
       (D) describes the role and estimated budget of each Federal 
     agency in implementing the plan;
       (E) contributes, to the extent practicable, to the National 
     Global Change Research Plan under section 104 of the Global 
     Change Research Act of 1990 (15 U.S.C. 2934); and
       (F) makes recommendations for coordination of ocean 
     observing activities of the United States with those of other 
     nations and international organizations;
       (2) serve as the mechanism for coordinating Federal ocean 
     observing requirements and activities;
       (3) work with academic, State, industry and other actual 
     and potential users of the observing system to make effective 
     use of existing capabilities and incorporate new 
     technologies;
       (4) approve standards and protocols for the administration 
     of the system, including--
       (A) a common set of measurements to be collected and 
     distributed routinely and by uniform methods;
       (B) standards for quality control and assessment of data;
       (C) design, testing and employment of forecast models for 
     ocean conditions;
       (D) data management, including data transfer protocols and 
     archiving; and
       (E) designation of coastal ocean observing regions; and
       (5) in consultation with the Secretary of State, provide 
     representation at international meetings on ocean observing 
     programs and coordinate relevant Federal activities with 
     those of other nations.
       (c) System Elements.--The integrated ocean and coastal 
     observing system shall include the following elements:
       (1) A nationally coordinated network of regional coastal 
     ocean observing systems that measure and disseminate a common 
     set of ocean observations and related products in a uniform 
     manner and according to sound scientific practice, but that 
     are adapted to local and regional needs.
       (2) Ocean sensors for climate observations, including the 
     Arctic Ocean and sub-polar seas.
       (3) Coastal, relocatable, and cabled sea floor 
     observatories.
       (4) Broad bandwidth communications that are capable of 
     transmitting high volumes of data from open ocean locations 
     at low cost and in real time.
       (5) Ocean data management and assimilation systems that 
     ensure full use of new sources of data from space-borne and 
     in situ sensors.

[[Page S3754]]

       (6) Focused research programs.
       (7) Technology development program to develop new observing 
     technologies and techniques, including data management and 
     dissemination.
       (8) Public outreach and education.

     SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

       For development and implementation of an integrated ocean 
     and coastal observation system under this title, including 
     financial assistance to regional coastal ocean observing 
     systems, there are authorized to be appropriated $235,000,000 
     in fiscal year 2003, $315,000,000 in fiscal year 2004, 
     $390,000,000 in fiscal year 2005, and $445,000,000 in fiscal 
     year 2006.

                 Subtitle E--Climate Change Technology

     SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

       Section 2(c) of the National Institute of Standards and 
     Technology Act (15 U.S.C. 272(c)) is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (21);
       (2) by redesignating paragraph (22) as paragraph (23); and
       (3) by inserting after paragraph (21) the following:
       ``(22) perform research to develop enhanced measurements, 
     calibrations, standards, and technologies which will enable 
     the reduced production in the United States of greenhouse 
     gases associated with global warming, including carbon 
     dioxide, methane, nitrous oxide, ozone, perfluorocarbons, 
     hydrofluorocarbons, and sulfur hexafluoride; and''.

     SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

       The Secretary of Commerce shall initiate a program to 
     develop, with technical assistance from appropriate Federal 
     agencies, innovative standards and measurement technologies 
     (including technologies to measure carbon changes due to 
     changes in land use cover) to calculate--
       (1) greenhouse gas emissions and reductions from 
     agriculture, forestry, and other land use practices;
       (2) noncarbon dioxide greenhouse gas emissions from 
     transportation;
       (3) greenhouse gas emissions from facilities or sources 
     using remote sensing technology; and
       (4) any other greenhouse gas emission or reductions for 
     which no accurate or reliable measurement technology exists.

     SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS.

       The National Institute of Standards and Technology Act (15 
     U.S.C. 271 et seq.) is amended--
       (1) by redesignating sections 17 through 32 as sections 18 
     through 33, respectively; and
       (2) by inserting after section 16 the following:

     ``SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES.

       ``(a) In General.--The Director shall establish within the 
     Institute a program to perform and support research on global 
     climate change standards and processes, with the goal of 
     providing scientific and technical knowledge applicable to 
     the reduction of greenhouse gases (as defined in section 4 of 
     the Global Climate Change Act of 2002).
       ``(b) Research Program.--
       ``(1) In general.--The Director is authorized to conduct, 
     directly or through contracts or grants, a global climate 
     change standards and processes research program.
       ``(2) Research projects.--The specific contents and 
     priorities of the research program shall be determined in 
     consultation with appropriate Federal agencies, including the 
     Environmental Protection Agency, the National Oceanic and 
     Atmospheric Administration, and the National Aeronautics and 
     Space Administration. The program generally shall include 
     basic and applied research--
       ``(A) to develop and provide the enhanced measurements, 
     calibrations, data, models, and reference material standards 
     which will enable the monitoring of greenhouse gases;
       ``(B) to assist in establishing a baseline reference point 
     for future trading in greenhouse gases and the measurement of 
     progress in emissions reduction;
       ``(C) that will be exchanged internationally as scientific 
     or technical information which has the stated purpose of 
     developing mutually recognized measurements, standards, and 
     procedures for reducing greenhouse gases; and
       ``(D) to assist in developing improved industrial processes 
     designed to reduce or eliminate greenhouse gases.
       ``(c) National Measurement Laboratories.--
       ``(1) In general.--In carrying out this section, the 
     Director shall utilize the collective skills of the National 
     Measurement Laboratories of the National Institute of 
     Standards and Technology to improve the accuracy of 
     measurements that will permit better understanding and 
     control of these industrial chemical processes and result in 
     the reduction or elimination of greenhouse gases.
       ``(2) Material, process, and building research.--The 
     National Measurement Laboratories shall conduct research 
     under this subsection that includes--
       ``(A) developing material and manufacturing processes which 
     are designed for energy efficiency and reduced greenhouse gas 
     emissions into the environment;
       ``(B) developing environmentally-friendly, `green' chemical 
     processes to be used by industry; and
       ``(C) enhancing building performance with a focus in 
     developing standards or tools which will help incorporate 
     low- or no-emission technologies into building designs.
       ``(3) Standards and tools.--The National Measurement 
     Laboratories shall develop standards and tools under this 
     subsection that include software to assist designers in 
     selecting alternate building materials, performance data on 
     materials, artificial intelligence-aided design procedures 
     for building subsystems and `smart buildings', and improved 
     test methods and rating procedures for evaluating the energy 
     performance of residential and commercial appliances and 
     products.
       ``(d) National Voluntary Laboratory Accreditation 
     Program.--The Director shall utilize the National Voluntary 
     Laboratory Accreditation Program under this section to 
     establish a program to include specific calibration or test 
     standards and related methods and protocols assembled to 
     satisfy the unique needs for accreditation in measuring the 
     production of greenhouse gases. In carrying out this 
     subsection the Director may cooperate with other departments 
     and agencies of the Federal Government, State and local 
     governments, and private organizations.''.

     SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

       The Director of the National Institute of Standards and 
     Technology, through the Manufacturing Extension Partnership 
     Program, may develop a program to support the implementation 
     of new ``green'' manufacturing technologies and techniques by 
     the more than 380,000 small manufacturers.

     SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Director to 
     carry out functions pursuant to sections 1345, 1351, and 1361 
     through 1363, $10,000,000 for fiscal years 2002 through 2006.

         Subtitle F--Climate Adaptation and Hazards Prevention

                   PART I--ASSESSMENT AND ADAPTATION 

     SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTATION 
                   PROGRAM.

       (a) In General.--The President shall establish within the 
     Department of Commerce a National Climate Change 
     Vulnerability and Adaptation Program for regional impacts 
     related to increasing concentrations of greenhouse gases in 
     the atmosphere and climate variability.
       (b) Coordination.--In designing such program the Secretary 
     shall consult with the Federal Emergency Management Agency, 
     the Environmental Protection Agency, the Army Corps of 
     Engineers, the Department of Transportation, and other 
     appropriate Federal, State, and local government entities.
       (c) Vulnerability Assessments.--The program shall--
       (1) evaluate, based on predictions and other information 
     developed under this Act and the National Climate Program Act 
     (15 U.S.C. 2901 et seq.), regional vulnerability to phenomena 
     associated with climate change and climate variability, 
     including--
       (A) increases in severe weather events;
       (B) sea level rise and shifts in the hydrological cycle;
       (C) natural hazards, including tsunami, drought, flood and 
     fire; and
       (D) alteration of ecological communities, including at the 
     ecosystem or watershed levels; and
       (2) build upon predictions and other information developed 
     in the National Assessments prepared under the Global Change 
     Research Act of 1990 (15 U.S.C. 2921 et seq.).
       (d) Preparedness Recommendations.--The program shall submit 
     a report to Congress within 2 years after the date of 
     enactment of this Act that identifies and recommends 
     implementation and funding strategies for short- and long-
     term actions that may be taken at the national, regional, 
     State, and local level--
       (1) to reduce vulnerability of human life and property;
       (2) to improve resilience to hazards;
       (3) to minimize economic impacts; and
       (4) to reduce threats to critical biological and ecological 
     processes.
       (e) Information and Technology.--The Secretary shall make 
     available appropriate information and other technologies and 
     products that will assist national, regional, State, and 
     local efforts, as well as efforts by other end-users, to 
     reduce loss of life and property, and coordinate 
     dissemination of such technologies and products.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce $4,500,000 to 
     implement the requirements of this section.

     SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

       (a) Coastal Vulnerability.--Within 2 years after the date 
     of enactment of this Act, the Secretary shall, in 
     consultation with the appropriate Federal, State, and local 
     governmental entities, conduct regional assessments of the 
     vulnerability of coastal areas to hazards associated with 
     climate change, climate variability, sea level rise, and 
     fluctuation of Great Lakes water levels. The Secretary may 
     also establish, as warranted, longer term regional assessment 
     programs. The Secretary may also consult with the governments 
     of Canada and Mexico as appropriate in developing such 
     regional assessments. In preparing the regional assessments, 
     the Secretary shall collect and compile current information 
     on climate change, sea level rise, natural hazards, and 
     coastal erosion and mapping, and specifically address impacts 
     on Arctic regions and the Central, Western, and South Pacific 
     regions. The regional assessments shall include an evaluation 
     of--
       (1) social impacts associated with threats to and potential 
     losses of housing, communities, and infrastructure;
       (2) physical impacts such as coastal erosion, flooding and 
     loss of estuarine habitat, saltwater intrusion of aquifers 
     and saltwater encroachment, and species migration; and
       (3) economic impact on local, State, and regional 
     economies, including the impact on abundance or distribution 
     of economically important living marine resources.

[[Page S3755]]

       (b) Coastal Adaptation Plan.--The Secretary shall, within 3 
     years after the date of enactment of this Act, submit to the 
     Congress a national coastal adaptation plan, composed of 
     individual regional adaptation plans that recommend targets 
     and strategies to address coastal impacts associated with 
     climate change, sea level rise, or climate variability. The 
     plan shall be developed with the participation of other 
     Federal, State, and local government agencies that will be 
     critical in the implementation of the plan at the State and 
     local levels. The regional plans that will make up the 
     national coastal adaptation plan shall be based on the 
     information contained in the regional assessments and shall 
     identify special needs associated with Arctic areas and the 
     Central, Western, and South Pacific regions. The Plan shall 
     recommend both short- and long-term adaptation strategies and 
     shall include recommendations regarding--
       (1) Federal flood insurance program modifications;
       (2) areas that have been identified as high risk through 
     mapping and assessment;
       (3) mitigation incentives such as rolling easements, 
     strategic retreat, State or Federal acquisition in fee simple 
     or other interest in land, construction standards, and 
     zoning;
       (4) land and property owner education;
       (5) economic planning for small communities dependent upon 
     affected coastal resources, including fisheries; and
       (6) funding requirements and mechanisms.
       (c) Technical Planning Assistance.--The Secretary, through 
     the National Ocean Service, shall establish a coordinated 
     program to provide technical planning assistance and products 
     to coastal States and local governments as they develop and 
     implement adaptation or mitigation strategies and plans. 
     Products, information, tools and technical expertise 
     generated from the development of the regional assessments 
     and the regional adaptation plans will be made available to 
     coastal States for the purposes of developing their own State 
     and local plans.
       (d) Coastal Adaptation Grants.--The Secretary shall provide 
     grants of financial assistance to coastal States with 
     federally approved coastal zone management programs to 
     develop and begin implementing coastal adaptation programs if 
     the State provides a Federal-to-State match of 4 to 1 in the 
     first fiscal year, 2.3 to 1 in the second fiscal year, 2 to 1 
     in the third fiscal year, and 1 to 1 thereafter. Distribution 
     of these funds to coastal States shall be based upon the 
     formula established under section 306(c) of the Coastal Zone 
     Management Act of 1972 (16 U.S.C. 1455(c)), adjusted in 
     consultation with the States as necessary to provide 
     assistance to particularly vulnerable coastlines.
       (e) Coastal Response Pilot Program.--
       (1) In general.--The Secretary shall establish a 4-year 
     pilot program to provide financial assistance to coastal 
     communities most adversely affected by the impact of climate 
     change or climate variability that are located in States with 
     federally approved coastal zone management programs.
       (2) Eligible projects.--A project is eligible for financial 
     assistance under the pilot program if it--
       (A) will restore or strengthen coastal resources, 
     facilities, or infrastructure that have been damaged by such 
     an impact, as determined by the Secretary;
       (B) meets the requirements of the Coastal Zone Management 
     Act (16 U.S.C. 1451 et seq.) and is consistent with the 
     coastal zone management plan of the State in which it is 
     located; and
       (C) will not cost more than $100,000.
       (3) Funding share.--The Federal funding share of any 
     project under this subsection may not exceed 75 percent of 
     the total cost of the project. In the administration of this 
     paragraph--
       (A) the Secretary may take into account in-kind 
     contributions and other noncash support of any project to 
     determine the Federal funding share for that project; and
       (B) the Secretary may waive the requirements of this 
     paragraph for a project in a community if--
       (i) the Secretary determines that the project is important; 
     and
       (ii) the economy and available resources of the community 
     in which the project is to be conducted are insufficient to 
     meet the non-Federal share of the project's costs.
       (f) Definitions.--Any term used in this section that is 
     defined in section 304 of the Coastal Zone Management Act of 
     1972 (16 U.S.C. 1453) has the meaning given it by that 
     section.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated $3,000,000 annually for regional 
     assessments under subsection (a), and $3,000,000 annually for 
     coastal adaptation grants under subsection (d).

     SEC. 1373. ARCTIC RESEARCH CENTER.

       (a) Establishment.--The Secretary of Commerce, in 
     consultation with the Secretaries of Energy and the Interior, 
     the Director of the National Science Foundation, and the 
     Administrator of the Environmental Protection Agency, shall 
     establish a joint research facility, to be known as the 
     Barrow Arctic Research Center, to support climate change and 
     other scientific research activities in the Arctic.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretaries of Commerce, Energy, 
     and the Interior, the Director of the National Science 
     Foundation, and the Administrator of the Environmental 
     Protection Agency, $35,000,000 for the planning, design, 
     construction, and support of the Barrow Arctic Research 
     Center.

           PART II--FORECASTING AND PLANNING PILOT PROGRAMS 

     SEC. 1381. REMOTE SENSING PILOT PROJECTS.

       (a) In General.--The Administrator of the National 
     Aeronautics and Space Administration may establish, through 
     the National Oceanic and Atmospheric Administration's Coastal 
     Services Center, a program of grants for competitively 
     awarded pilot projects to explore the integrated use of 
     sources of remote sensing and other geospatial information to 
     address State, local, regional, and tribal agency needs to 
     forecast a plan for adaptation to coastal zone and land use 
     changes that may result as a consequence of global climate 
     change or climate variability.
       (b) Preferred Projects.--In awarding grants under this 
     section, the Center shall give preference to projects that--
       (1) focus on areas that are most sensitive to the 
     consequences of global climate change or climate variability;
       (2) make use of existing public or commercial data sets;
       (3) integrate multiple sources of geospatial information, 
     such as geographic information system data, satellite-
     provided positioning data, and remotely sensed data, in 
     innovative ways;
       (4) offer diverse, innovative approaches that may serve as 
     models for establishing a future coordinated framework for 
     planning strategies for adaptation to coastal zone and land 
     use changes related to global climate change or climate 
     variability;
       (5) include funds or in-kind contributions from non-Federal 
     sources;
       (6) involve the participation of commercial entities that 
     process raw or lightly processed data, often merging that 
     data with other geospatial information, to create data 
     products that have significant value added to the original 
     data; and
       (7) taken together demonstrate as diverse a set of public 
     sector applications as possible.
       (c) Opportunities.--In carrying out this section, the 
     Center shall seek opportunities to assist--
       (1) in the development of commercial applications 
     potentially available from the remote sensing industry; and
       (2) State, local, regional, and tribal agencies in applying 
     remote sensing and other geospatial information technologies 
     for management and adaptation to coastal and land use 
     consequences of global climate change or climate variability.
       (d) Duration.--Assistance for a pilot project under 
     subsection (a) shall be provided for a period of not more 
     than 3 years.
       (e) Responsibilities of Grantees.--Within 180 days after 
     completion of a grant project, each recipient of a grant 
     under subsection (a) shall transmit a report to the Center on 
     the results of the pilot project and conduct at least one 
     workshop for potential users to disseminate the lessons 
     learned from the pilot project as widely as feasible.
       (f) Regulations.--The Center shall issue regulations 
     establishing application, selection, and implementation 
     procedures for pilot projects, and guidelines for reports and 
     workshops required by this section.

     SEC. 1382. DATABASE ESTABLISHMENT.

       The Center shall establish and maintain an electronic, 
     Internet-accessible database of the results of each pilot 
     project completed under section 1381.

     SEC. 1383. AIR QUALITY RESEARCH, FORECASTS AND WARNINGS.

       (a) Regional Studies.--The Secretary of Commerce, through 
     the Administrator of the National Oceanographic and 
     Atmospheric Administration, shall, in order of priority as 
     listed in section (c), conduct regional studies of the air 
     quality within specific regions of the United States. Such 
     studies should assess the effects of in situ emissions of air 
     pollutants and their precursors, transport of such emissions 
     and precursors from outside the region, and production of air 
     pollutants within the region via chemical reactions.
       (b) Forecasts and Warnings.--The Secretary of Commerce, 
     through the Administrator of the National Oceanographic and 
     Atmospheric Administration, shall, in order of priority as 
     listed in section (c), establish a program to provide 
     operational air quality forecasts and warnings for specific 
     regions of the United States.
       (c) Definition.--For the purposes of this section, the term 
     ``specific regions of the United States'' means the following 
     geographical areas:
       (1) the Northeast, composed of Main, New Hampshire, 
     Vermont, Massachusetts, Rhode Island, Connecticut, New York, 
     New Jersey, Pennsylvania, Maryland, Delaware, the District of 
     Columbia, and West Virginia;
       (2) the Southeast, composed of Virginia, North Carolina, 
     South Carolina, Georgia, Alabama, and Florida;
       (3) the Midwest, composed of Minnesota, Wisconsin, Iowa, 
     Missouri, Illinois, Kentucky, Indiana, Ohio, and Michigan;
       (4) the South, composed of Tennessee, Mississippi, 
     Louisiana, Arkansas, Oklahoma, and Texas;
       (5) the High Plains, composed of North Dakota, South 
     Dakota, Nebraska, and Kansas;
       (6) the Northwest, composed of Washington, Oregon, Idaho, 
     Montana, and Wyoming;
       (7) the Southwest, composed of California, Nevada, Utah, 
     Colorado, Arizona, and New Mexico;
       (8) Alaska; and
       (9) Hawaii.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary of Commerce $3,000,000 
     for each of fiscal years 2003 through 2006 for studies 
     pursuant to subsection (b) of this section, and $5,000,000 
     for fiscal year 2003 and such sums as may be necessary for 
     subsequent fiscal years for the forecast and warning program 
     pursuant to subsection (c) of this section.

     SEC. 1384. DEFINITIONS.

       In this subtitle:
       (1) Center.--The term ``Center'' means the Coastal Services 
     Center of the National Oceanic and Atmospheric 
     Administration.

[[Page S3756]]

       (2) Geospatial information.--The term ``geospatial 
     information'' means knowledge of the nature and distribution 
     of physical and cultural features on the landscape based on 
     analysis of data from airborne or spaceborne platforms or 
     other types and sources of data.
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given 
     that term in section 101(a) of the Higher Education Act of 
     1965 (20 U.S.C. 1001(a)).

     SEC. 1385. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the 
     Administrator to carry out the provisions of this subtitle--
       (1) $17,500,000 for fiscal year 2003;
       (2) $20,000,000 for fiscal year 2004;
       (3) $22,500,000 for fiscal year 2005; and
       (4) $25,000,000 for fiscal year 2006.

      TITLE XIV--MANAGEMENT OF DOE SCIENCE AND TECHNOLOGY PROGRAMS

     SEC. 1401. DEFINITIONS.

       In this title:
       (1) Applicability of definitions.--The definitions in 
     section 1203 shall apply.
       (2) Single-purpose research facility.--The term ``single-
     purpose research facility'' means any of the following 
     primarily single purpose entities owned by the Department of 
     Energy--
       (A) Ames Laboratory;
       (B) East Tennessee Technology Park;
       (C) Environmental Measurement Laboratory;
       (D) Fernald Environmental Management Project;
       (E) Fermi National Accelerator Laboratory;
       (F) Kansas City Plant;
       (G) Nevada Test Site;
       (H) New Brunswick Laboratory;
       (I) Pantex Weapons Facility;
       (J) Princeton Plasma Physics Laboratory;
       (K) Savannah River Technology Center;
       (L) Stanford Linear Accelerator Center;
       (M) Thomas Jefferson National Accelerator Facility;
       (N) Y-12 facility at Oak Ridge National Laboratory;
       (O) Waste Isolation Pilot Plant; or
       (P) other similar organization of the Department designated 
     by the Secretary that engages in technology transfer, 
     partnering, or licensing activities.

     SEC. 1402. AVAILABILITY OF FUNDS.

       Funds authorized to be appropriated to the Department of 
     Energy under title XII, title XIII, and title XV shall remain 
     available until expended.

     SEC. 1403. COST SHARING.

       (a) Research and Development.--For research and development 
     projects funded from appropriations authorized under 
     subtitles A through D of title XII, the Secretary shall 
     require a commitment from non-Federal sources of at least 20 
     percent of the cost of the project. The Secretary may reduce 
     or eliminate the non-Federal requirement under this 
     subsection if the Secretary determines that the research and 
     development is of a basic or fundamental nature.
       (b) Demonstration and Deployment.--For demonstration and 
     technology deployment activities funded from appropriations 
     authorized under subtitles A through D of title XII, the 
     Secretary shall require a commitment from non-Federal sources 
     of at least 50 percent of the costs of the project directly 
     and specifically related to any demonstration or technology 
     deployment activity. The Secretary may reduce or eliminate 
     the non-Federal requirement under this subsection if the 
     Secretary determines that the reduction is necessary and 
     appropriate considering the technological risks involved in 
     the project and is necessary to meet one or more goals of 
     this title.
       (c) Calculation of Amount.--In calculating the amount of 
     the non-Federal commitment under subsection (a) or (b), the 
     Secretary shall include cash, personnel, services, equipment, 
     and other resources.

     SEC. 1404. MERIT REVIEW OF PROPOSALS.

       Awards of funds authorized under title XII, subtitle A of 
     title XIII, and title XV shall be made only after an 
     independent review of the scientific and technical merit of 
     the proposals for such awards has been made by the Department 
     of Energy.

     SEC. 1405. EXTERNAL TECHNICAL REVIEW OF DEPARTMENTAL 
                   PROGRAMS.

       (a) National Energy Research and Development Advisory 
     Boards.--(1) The Secretary shall establish an advisory board 
     to oversee Department research and development programs in 
     each of the following areas--
       (A) energy efficiency;
       (B) renewable energy;
       (C) fossil energy;
       (D) nuclear energy; and
       (E) climate change technology, with emphasis on 
     integration, collaboration, and other special features of the 
     cross-cutting technologies supported by the Office of Climate 
     Change Technology.
       (2) The Secretary may designate an existing advisory board 
     within the Department to fulfill the responsibilities of an 
     advisory board under this subsection, or may enter into 
     appropriate arrangements with the National Academy of 
     Sciences to establish such an advisory board.
       (b) Utilization of Existing Committees.--The Secretary of 
     Energy shall continue to use the scientific program advisory 
     committees chartered under the Federal Advisory Committee Act 
     by the Office of Science to oversee research and development 
     programs under that Office.
       (c) Membership.--Each advisory board under this section 
     shall consist of experts drawn from industry, academia, 
     Federal laboratories, research institutions, or State, local, 
     or tribal governments, as appropriate.
       (d) Meetings and Purposes.--Each advisory board under this 
     section shall meet at least semi-annually to review and 
     advise on the progress made by the respective research, 
     development, demonstration, and technology deployment 
     program. The advisory board shall also review the adequacy 
     and relevance of the goals established for each program by 
     Congress and the President, and may otherwise advise on 
     promising future directions in research and development that 
     should be considered by each program.

     SEC. 1406. IMPROVED COORDINATION AND MANAGEMENT OF CIVILIAN 
                   SCIENCE AND TECHNOLOGY PROGRAMS.

       (a) Effective Top-Level Coordination of Research and 
     Development Programs.--Section 202(b) of the Department of 
     Energy Organization Act (42 U.S.C. 7132(b)) is amended to 
     read as follows:
       ``(b)(1) There shall be in the Department an Under 
     Secretary for Energy and Science, who shall be appointed by 
     the President, by and with the advice and consent of the 
     Senate. The Under Secretary shall be compensated at the rate 
     provided for at level III of the Executive Schedule under 
     section 5314 of title 5, United States Code.
       ``(2) The Under Secretary for Energy and Science shall be 
     appointed from among persons who--
       ``(A) have extensive background in scientific or 
     engineering fields; and
       ``(B) are well qualified to manage the civilian research 
     and development programs of the Department of Energy.
       ``(3) The Under Secretary for Energy and Science shall--
       ``(A) serve as the Science and Technology Advisor to the 
     Secretary;
       ``(B) monitor the Department's research and development 
     programs in order to advise the Secretary with respect to any 
     undesirable duplication or gaps in such programs;
       ``(C) advise the Secretary with respect to the well-being 
     and management of the multipurpose laboratories under the 
     jurisdiction of the Department;
       ``(D) advise the Secretary with respect to education and 
     training activities required for effective short- and long-
     term basic and applied research activities of the Department;
       ``(E) advise the Secretary with respect to grants and other 
     forms of financial assistance required for effective short- 
     and long-term basic and applied research activities of the 
     Department; and
       ``(F) exercise authority and responsibility over Assistant 
     Secretaries carrying out energy research and development and 
     energy technology functions under sections 203 and 209, as 
     well as other elements of the Department assigned by the 
     Secretary.''.
       (b) Reconfiguration of Position of Director of the Office 
     of Science.--Section 209 of the Department of Energy 
     Organization Act (41 U.S.C. 7139) is amended to read as 
     follows:
       ``(a) There shall be within the Department an Office of 
     Science, to be headed by an Assistant Secretary of Science, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, and who shall be 
     compensated at the rate provided for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code.
       ``(b) The Assistant Secretary of Science shall be in 
     addition to the Assistant Secretaries provided for under 
     section 203 of this Act.
       ``(c) It shall be the duty and responsibility of the 
     Assistant Secretary of Science to carry out the fundamental 
     science and engineering research functions of the Department, 
     including the responsibility for policy and management of 
     such research, as well as other functions vested in the 
     Secretary which he may assign to the Assistant Secretary.''.
       (c) Additional Assistant Secretary Position To Enable 
     Improved Management of Nuclear Energy Issues.--
       (1) Section 203(a) of the Department of Energy Organization 
     Act (42 U.S.C. 7133(a)) is amended by striking ``There shall 
     be in the Department six Assistant Secretaries'' and 
     inserting ``Except as provided in section 209, there shall be 
     in the Department seven Assistant Secretaries''.
       (2) It is the sense of the Senate that the leadership for 
     departmental missions in nuclear energy should be at the 
     Assistant Secretary level.
       (d) Technical and Conforming Amendments.--
       (1) Section 202 of the Department of Energy Organization 
     Act (42 U.S.C. 7132) is further amended by adding the 
     following at the end:
       ``(d) There shall be in the Department an Under Secretary, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, and who shall perform such 
     functions and duties as the Secretary shall prescribe, 
     consistent with this section. The Under Secretary shall be 
     compensated at the rate provided for level III of the 
     Executive Schedule under section 5314 of title 5, United 
     States Code.
       ``(e) There shall be in the Department a General Counsel, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate. The General Counsel shall 
     be compensated at the rate provided for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code.''.
       (2) Section 5314 of title 5, United States Code, is amended 
     by striking ``Under Secretaries of Energy (2)'' and inserting 
     ``Under Secretaries of Energy (3)''.
       (3) Section 5315 of title 5, United States Code, is amended 
     by--
       (A) striking ``Director, Office of Science, Department of 
     Energy.''; and
       (B) striking ``Assistant Secretaries of Energy (6)'' and 
     inserting ``Assistant Secretaries of Energy (8)''.
       (4) The table of contents for the Department of Energy 
     Organization Act (42 U.S.C. 7101 note) is amended--
       (A) by striking ``Section 209'' and inserting ``Sec. 209'';
       (B) by striking ``213.'' and inserting ``Sec. 213.'';

[[Page S3757]]

       (C) by striking ``214.'' and inserting ``Sec. 214.'';
       (D) by striking ``215.'' and inserting ``Sec. 215.''; and
       (E) by striking ``216.'' and inserting ``Sec. 216.''.

     SEC. 1407. IMPROVED COORDINATION OF TECHNOLOGY TRANSFER 
                   ACTIVITIES.

       (a) Technology Transfer Coordinator.--The Secretary shall 
     appoint a Technology Transfer Coordinator to perform 
     oversight of and policy development for technology transfer 
     activities at the Department. The Technology Transfer 
     Coordinator shall coordinate the activities of the Technology 
     Partnerships Working Group, and shall oversee the expenditure 
     of funds allocated to the Technology Partnership Working 
     Group.
       (b) Technology Partnership Working Group.--The Secretary 
     shall establish a Technology Partnership Working Group, which 
     shall consist of representatives of the National Laboratories 
     and single-purpose research facilities, to--
       (1) coordinate technology transfer activities occurring at 
     National Laboratories and single-purpose research facilities;
       (2) exchange information about technology transfer 
     practices; and
       (3) develop and disseminate to the public and prospective 
     technology partners information about opportunities and 
     procedures for technology transfer with the Department.

     SEC. 1408. TECHNOLOGY INFRASTRUCTURE PROGRAM.

       (a) Establishment.--The Secretary shall establish a 
     Technology Infrastructure Program in accordance with this 
     section.
       (b) Purpose.--The purpose of the Technology Infrastructure 
     Program shall be to improve the ability of National 
     Laboratories or single-purpose research facilities to support 
     departmental missions by--
       (1) stimulating the development of technology clusters that 
     can support departmental missions at the National 
     Laboratories or single-purpose research facilities;
       (2) improving the ability of National Laboratories or 
     single-purpose research facilities to leverage and benefit 
     from commercial research, technology, products, processes, 
     and services; and
       (3) encouraging the exchange of scientific and 
     technological expertise between National Laboratories or 
     single-purpose research facilities and--
       (A) institutions of higher education,
       (B) technology-related business concerns,
       (C) nonprofit institutions, and
       (D) agencies of State, tribal, or local governments,

     that can support departmental missions at the National 
     Laboratories and single-purpose research facilities.
       (c) Projects.--The Secretary shall authorize the Director 
     of each National Laboratory or facility to implement the 
     Technology Infrastructure Program at such National Laboratory 
     or single-purpose research facility through projects that 
     meet the requirements of subsections (d) and (e).
       (d) Program Requirements.--Each project funded under this 
     section shall meet the following requirements:
       (1) Minimum participants.--Each project shall at a minimum 
     include--
       (A) a National Laboratory or single-purpose research 
     facility; and
       (B) one of the following entities--
       (i) a business,
       (ii) an institution of higher education,
       (iii) a nonprofit institution, or
       (iv) an agency of a State, local, or tribal government.
       (2) Cost sharing.--
       (A) Minimum amount.--Not less than 50 percent of the costs 
     of each project funded under this section shall be provided 
     from non-Federal sources.
       (B) Qualified funding and resources.--(i) The calculation 
     of costs paid by the non-Federal sources to a project shall 
     include cash, personnel, services, equipment, and other 
     resources expended on the project.
       (ii) Independent research and development expenses of 
     Government contractors that qualify for reimbursement under 
     section 31-205-18(e) of the Federal Acquisition Regulations 
     issued pursuant to section 25(c)(1) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 421(c)(1)) may be credited 
     towards costs paid by non-Federal sources to a project, if 
     the expenses meet the other requirements of this section.
       (iii) No funds or other resources expended either before 
     the start of a project under this section or outside the 
     project's scope of work shall be credited toward the costs 
     paid by the non-Federal sources to the project.
       (3) Competitive selection.--All projects in which a party 
     other than the Department, a National Laboratory, or a 
     single-purpose research facility receives funding under this 
     section shall, to the extent practicable, be competitively 
     selected by the National Laboratory or facility using 
     procedures determined to be appropriate by the Secretary.
       (4) Accounting standards.--Any participant that receives 
     funds under this section, other than a National Laboratory or 
     single-purpose research facility, may use generally accepted 
     accounting principles for maintaining accounts, books, and 
     records relating to the project.
       (5) Limitations.--No Federal funds shall be made available 
     under this section for--
       (A) construction; or
       (B) any project for more than 5 years.
       (e) Selection Criteria.--
       (1) Threshold funding criteria.--The Secretary shall 
     allocate funds under this section only if the Director of the 
     National Laboratory or single-purpose research facility 
     managing the project determines that the project is likely to 
     improve the ability of the National Laboratory or single-
     purpose research facility to achieve technical success in 
     meeting departmental missions.
       (2) Additional criteria.--The Secretary shall require the 
     Director of the National Laboratory or single-purpose 
     research facility managing a project under this section to 
     consider the following criteria in selecting a project to 
     receive Federal funds--
       (A) the potential of the project to succeed, based on its 
     technical merit, team members, management approach, 
     resources, and project plan;
       (B) the potential of the project to promote the development 
     of a commercially sustainable technology cluster, which will 
     derive most of the demand for its products or services from 
     the private sector, and which will support departmental 
     missions at the participating National Laboratory or single-
     purpose research facility;
       (C) the potential of the project to promote the use of 
     commercial research, technology, products, processes, and 
     services by the participating National Laboratory or single-
     purpose research facility to achieve its departmental mission 
     or the commercial development of technological innovations 
     made at the participating National Laboratory or single-
     purpose research facility;
       (D) the commitment shown by non-Federal organizations to 
     the project, based primarily on the nature and amount of the 
     financial and other resources they will risk on the project;
       (E) the extent to which the project involves a wide variety 
     and number of institutions of higher education, nonprofit 
     institutions, and technology-related business concerns that 
     can support the missions of the participating National 
     Laboratory or single-purpose research facility and that will 
     make substantive contributions to achieving the goals of the 
     project;
       (F) the extent of participation in the project by agencies 
     of State, tribal, or local governments that will make 
     substantive contributions to achieving the goals of the 
     project;
       (G) the extent to which the project focuses on promoting 
     the development of technology-related business concerns that 
     are small business concerns or involves such small business 
     concerns substantively in the project; and
       (H) such other criteria as the Secretary determines to be 
     appropriate.
       (f) Report to Congress.--Not later than January 1, 2004, 
     the Secretary shall report to Congress on whether the 
     Technology Infrastructure Program should be continued and, if 
     so, how the program should be managed.
       (g) Definitions.--In this section:
       (1) Technology cluster.--The term ``technology cluster'' 
     means a concentration of--
       (A) technology-related business concerns;
       (B) institutions of higher education; or
       (C) other nonprofit institutions;
     that reinforce each other's performance in the areas of 
     technology development through formal or informal 
     relationships.
       (2) Technology-related business concern.--The term 
     ``technology-related business concern'' means a for-profit 
     corporation, company, association, firm, partnership, or 
     small business concern that--
       (A) conducts scientific or engineering research,
       (B) develops new technologies,
       (C) manufactures products based on new technologies, or
       (D) performs technological services.
       (h) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary for activities under this 
     section $10,000,000 for each of fiscal years 2003 and 2004.

     SEC. 1409. SMALL BUSINESS ADVOCACY AND ASSISTANCE.

        (a) Small Business Advocate.--The Secretary shall require 
     the Director of each National Laboratory, and may require the 
     Director of a single-purpose research facility, to appoint a 
     small business advocate to--
       (1) increase the participation of small business concerns, 
     including socially and economically disadvantaged small 
     business concerns, in procurement, collaborative research, 
     technology licensing, and technology transfer activities 
     conducted by the National Laboratory or single-purpose 
     research facility;
       (2) report to the Director of the National Laboratory or 
     single-purpose research facility on the actual participation 
     of small business concerns in procurement and collaborative 
     research along with recommendations, if appropriate, on how 
     to improve participation;
       (3) make available to small business concerns training, 
     mentoring, and clear, up-to-date information on how to 
     participate in the procurement and collaborative research, 
     including how to submit effective proposals;
       (4) increase the awareness inside the National Laboratory 
     or single-purpose research facility of the capabilities and 
     opportunities presented by small business concerns; and
       (5) establish guidelines for the program under subsection 
     (b) and report on the effectiveness of such program to the 
     Director of the National Laboratory or single-purpose 
     research facility.
       (b) Establishment of Small Business Assistance Program.--
     The Secretary shall require the Director of each National 
     Laboratory, and may require the director of a single-purpose 
     research facility, to establish a program to provide small 
     business concerns--
       (1) assistance directed at making them more effective and 
     efficient subcontractors or suppliers to the National 
     Laboratory or single-purpose research facility; or
       (2) general technical assistance, the cost of which shall 
     not exceed $10,000 per instance of assistance, to improve the 
     small business concern's products or services.
       (c) Use of Funds.--None of the funds expended under 
     subsection (b) may be used for direct grants to the small 
     business concerns.

[[Page S3758]]

       (d) Definitions.--In this section:
       (1) Small business concern.--The term ``small business 
     concern'' has the meaning given such term in section 3 of the 
     Small Business Act (15 U.S.C. 632).
       (2) Socially and economically disadvantaged small business 
     concerns.--The term ``socially and economically disadvantaged 
     small business concerns'' has the meaning given such term in 
     section 8(a)(4) of the Small Business Act (15 U.S.C. 
     637(a)(4)).

     SEC. 1410. OTHER TRANSACTIONS.

       (a) In General.--Section 646 of the Department of Energy 
     Organization Act (42 U.S.C. 7256) is amended by adding at the 
     end the following:
       ``(g) Other Transactions Authority.--(1) In addition to 
     other authorities granted to the Secretary to enter into 
     procurement contracts, leases, cooperative agreements, 
     grants, and other similar arrangements, the Secretary may 
     enter into other transactions with public agencies, private 
     organizations, or persons on such terms as the Secretary may 
     deem appropriate in furtherance of basic, applied, and 
     advanced research functions now or hereafter vested in the 
     Secretary. Such other transactions shall not be subject to 
     the provisions of section 9 of the Federal Nonnuclear Energy 
     Research and Development Act of 1974 (42 U.S.C. 5908).
       ``(2)(A) The Secretary of Energy shall ensure that--
       ``(i) to the maximum extent practicable, no transaction 
     entered into under paragraph (1) provides for research that 
     duplicates research being conducted under existing programs 
     carried out by the Department of Energy; and
       ``(ii) to the extent that the Secretary determines 
     practicable, the funds provided by the Government under a 
     transaction authorized by paragraph (1) do not exceed the 
     total amount provided by other parties to the transaction.
       ``(B) A transaction authorized by paragraph (1) may be used 
     for a research project when the use of a standard contract, 
     grant, or cooperative agreement for such project is not 
     feasible or appropriate.
       ``(3)(A) The Secretary shall not disclose any trade secret 
     or commercial or financial information submitted by a non-
     Federal entity under paragraph (1) that is privileged and 
     confidential.
       ``(B) The Secretary shall not disclose, for 5 years after 
     the date the information is received, any other information 
     submitted by a non-Federal entity under paragraph (1), 
     including any proposal, proposal abstract, document 
     supporting a proposal, business plan, or technical 
     information that is privileged and confidential.
       ``(C) The Secretary may protect from disclosure, for up to 
     5 years, any information developed pursuant to a transaction 
     under paragraph (1) that would be protected from disclosure 
     under section 552(b)(4) of title 5, United States Code, if 
     obtained from a person other than a Federal agency.''.
       (b) Implementation.--Not later than 6 months after the date 
     of enactment of this section, the Department shall establish 
     guidelines for the use of other transactions.

     SEC. 1411. MOBILITY OF SCIENTIFIC AND TECHNICAL PERSONNEL.

       Not later than 2 years after the enactment of this section, 
     the Secretary, acting through the Technology Transfer 
     Coordinator under section 1407, shall determine whether each 
     contractor operating a National Laboratory or single-purpose 
     research facility has policies and procedures that do not 
     create disincentives to the transfer of scientific and 
     technical personnel among the contractor-operated National 
     Laboratories or contractor-operated single-purpose research 
     facilities.

     SEC. 1412. NATIONAL ACADEMY OF SCIENCES REPORT.

       Within 90 days after the date of enactment of this Act, the 
     Secretary shall contract with the National Academy of 
     Sciences to--
       (1) conduct a study on the obstacles to accelerating the 
     innovation cycle for energy technology, and
       (2) report to the Congress recommendations for shortening 
     the cycle of research, development, and deployment.

     SEC. 1413. REPORT ON TECHNOLOGY READINESS AND BARRIERS TO 
                   TECHNOLOGY TRANSFER.

       (a) In General.--The Secretary, acting through the 
     Technology Partnership Working Group and in consultation with 
     representatives of affected industries, universities, and 
     small business concerns, shall--
       (1) assess the readiness for technology transfer of energy 
     technologies developed through projects funded from 
     appropriations authorized under subtitles A through D of 
     title XIV, and
       (2) identify barriers to technology transfer and 
     cooperative research and development agreements between the 
     Department or a National Laboratory and a non-Federal person; 
     and
       (3) make recommendations for administrative or legislative 
     actions needed to reduce or eliminate such barriers.
       (b) Report.--The Secretary shall provide a report to 
     Congress and the President on activities carried out under 
     this section not later than 1 year after the date of 
     enactment of this section, and shall update such report on a 
     biennial basis, taking into account progress toward 
     eliminating barriers to technology transfer identified in 
     previous reports under this section.

     SEC. 1414. UNITED STATES-MEXICO ENERGY TECHNOLOGY 
                   COOPERATION.

       (a) Finding.--Congress finds that the economic and energy 
     security of the United States and Mexico is furthered through 
     collaboration between the United States and Mexico on 
     research related to energy technologies.
       (b) Program.--
       (1) In general.--The Secretary, acting through the 
     Assistant Secretary for Environmental Management, shall 
     establish a collaborative research, development, and 
     deployment program to promote energy efficient, 
     environmentally sound economic development along the United 
     States-Mexico border to--
       (A) mitigate hazardous waste;
       (B) promote energy efficient materials processing 
     technologies that minimize environmental damage; and
       (C) protect the public health.
       (2) Consultation.--The Secretary, acting through the 
     Assistant Secretary for Environmental Management, shall 
     consult with the Office of Energy Efficiency and Renewable 
     Energy in carrying out paragraph (1)(B).
       (c) Program Management.--The program under subsection (b) 
     shall be managed by the Department of Energy Carlsbad 
     Environmental Management Field Office.
       (d) Cost Sharing.--The cost of any project or activity 
     carried out using funds provided under this section shall be 
     shared as provided in section 1403.
       (e) Technology Transfer.--In carrying out projects and 
     activities under this section to mitigate hazardous waste, 
     the Secretary shall emphasize the transfer of technology 
     developed under the Environmental Management Science Program 
     of the Department of Energy.
       (f) Intellectual Property.--In carrying out this section, 
     the Secretary shall comply with the requirements of any 
     agreement entered between the United States and Mexico 
     regarding intellectual property protection.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section $5,000,000 for 
     fiscal year 2003 and $6,000,000 for each of fiscal years 2004 
     through 2006, to remain available until expended.

                    TITLE XV--PERSONNEL AND TRAINING

     SEC. 1501. WORKFORCE TRENDS AND TRAINEESHIP GRANTS.

       (a) Workforce Trends.--
       (1) Monitoring.--The Secretary of Energy (in this title 
     referred to as the ``Secretary''), acting through the 
     Administrator of the Energy Information Administration, in 
     consultation with the Secretary of Labor, shall monitor 
     trends in the workforce of skilled technical personnel 
     supporting energy technology industries, including renewable 
     energy industries, companies developing and commercializing 
     devices to increase energy-efficiency, the oil and gas 
     industry, the electric power generation industry (including 
     the nuclear power industry), the coal industry, and other 
     industrial sectors as the Secretary may deem appropriate.
       (2) Annual reports.--The Administrator of the Energy 
     Information Administration shall include statistics on energy 
     industry workforce trends in the annual reports of the Energy 
     Information Administration.
       (3) Special reports.--The Secretary shall report to the 
     appropriate committees of Congress whenever the Secretary 
     determines that significant shortfalls of technical personnel 
     in one or more energy industry segments are forecast or have 
     occurred.
       (b) Traineeship Grants for Technically Skilled Personnel.--
       (1) Grant programs.--The Secretary shall establish grant 
     programs in the appropriate offices of the Department to 
     enhance training of technically skilled personnel for which a 
     shortfall is determined under subsection (a).
       (2) Eligible institutions.--As determined by the Secretary 
     to be appropriate to the particular workforce shortfall, the 
     Secretary shall make grants under paragraph (1) to--
       (A) an institution of higher education;
       (B) a postsecondary educational institution providing 
     vocational and technical education (within the meaning given 
     those terms in section 3 of the Carl D. Perkins Vocational 
     and Technical Education Act of 1998 (20 U.S.C. 2302));
       (C) appropriate agencies of State, local, or tribal 
     governments; or
       (D) joint labor and management training organizations with 
     State or federally recognized apprenticeship programs and 
     other employee-based training organizations as the Secretary 
     considers appropriate.
       (c) Definition.--For purposes of this section, the term 
     ``skilled technical personnel'' means journey and apprentice 
     level workers who are enrolled in or have completed a State 
     or federally recognized apprenticeship program and other 
     skilled workers in energy technology industries.
       (d) Authorization of Appropriations.--From amounts 
     authorized under section 1241(c), there are authorized to be 
     appropriated to the Secretary for activities under this 
     section such sums as may be necessary for each fiscal year.

     SEC. 1502. POSTDOCTORAL AND SENIOR RESEARCH FELLOWSHIPS IN 
                   ENERGY RESEARCH.

       (a) Postdoctoral Fellowships.--The Secretary shall 
     establish a program of fellowships to encourage outstanding 
     young scientists and engineers to pursue postdoctoral 
     research appointments in energy research and development at 
     institutions of higher education of their choice. In 
     establishing a program under this subsection, the Secretary 
     may enter into appropriate arrangements with the National 
     Academy of Sciences to help administer the program.
       (b) Distinguished Senior Research Fellowships.--The 
     Secretary shall establish a program of fellowships to allow 
     outstanding senior researchers in energy research and 
     development and their research groups to explore research and 
     development topics of their choosing for a fixed period of 
     time. Awards under this program shall be made on the basis of 
     past scientific or technical accomplishment and promise for 
     continued accomplishment during the period of support, which 
     shall not be less than 3 years.
       (c) Authorization of Appropriations.--From amounts 
     authorized under section 1241(c), there are authorized to be 
     appropriated to the

[[Page S3759]]

     Secretary for activities under this section such sums as may 
     be necessary for each fiscal year.

     SEC. 1503. TRAINING GUIDELINES FOR ELECTRIC ENERGY INDUSTRY 
                   PERSONNEL.

       (a) Model Guidelines.--The Secretary shall, in cooperation 
     with electric generation, transmission, and distribution 
     companies and recognized representatives of employees of 
     those entities, develop model employee training guidelines to 
     support electric supply system reliability and safety.
       (b) Content of Guidelines.--The guidelines under this 
     section shall include--
       (1) requirements for worker training, competency, and 
     certification, developed using criteria set forth by the 
     Utility Industry Group recognized by the National Skill 
     Standards Board; and
       (2) consolidation of existing guidelines on the 
     construction, operation, maintenance, and inspection of 
     electric supply generation, transmission and distribution 
     facilities such as those established by the National Electric 
     Safety Code and other industry consensus standards.

     SEC. 1504. NATIONAL CENTER ON ENERGY MANAGEMENT AND BUILDING 
                   TECHNOLOGIES.

       The Secretary shall establish a National Center on Energy 
     Management and Building Technologies, to carry out research, 
     education, and training activities to facilitate the 
     improvement of energy efficiency and indoor air quality in 
     industrial, commercial and residential buildings. The 
     National Center shall be established in cooperation with--
       (1) recognized representatives of employees in the heating, 
     ventilation, and air-conditioning industry;
       (2) contractors that install and maintain heating, 
     ventilation and air-conditioning systems and equipment;
       (3) manufacturers of heating, ventilation and air-
     conditioning systems and equipment;
       (4) representatives of the advanced building envelope 
     industry, including design, windows, lighting, and insulation 
     industries; and
       (5) other entities as appropriate.

     SEC. 1505. IMPROVED ACCESS TO ENERGY-RELATED SCIENTIFIC AND 
                   TECHNICAL CAREERS.

       (a) Department of Energy Science Education Programs.--
     Section 3164 of the Department of Energy Science Education 
     Enhancement Act (42 U.S.C. 7381a) is amended by adding at the 
     end the following:
       ``(c) Programs for Women and Minority Students.--In 
     carrying out a program under subsection (a), the Secretary 
     shall give priority to activities that are designed to 
     encourage women and minority students to pursue scientific 
     and technical careers.''.
       (b) Partnerships With Historically Black Colleges and 
     Universities, Hispanic-Servicing Institutions, and Tribal 
     Colleges.--The Department of Energy Science Education 
     Enhancement Act (42 U.S.C. 7381 et seq.) is amended--
       (1) by redesignating sections 3167 and 3168 as sections 
     3168 and 3169, respectively; and
       (2) by inserting after section 3166 the following:

     ``SEC. 3167. PARTNERSHIPS WITH HISTORICALLY BLACK COLLEGES 
                   AND UNIVERSITIES, HISPANIC-SERVING 
                   INSTITUTIONS, AND TRIBAL COLLEGES.

       ``(a) Definitions.--In this section:
       ``(1) Hispanic-serving institution.--The term `Hispanic-
     serving institution' has the meaning given the term in 
     section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 
     1101a(a)).
       ``(2) Historically black college or university.--The term 
     `historically Black college or university' has the meaning 
     given the term `part B institution' in section 322 of the 
     Higher Education Act of 1965 (20 U.S.C. 1061).
       ``(3) National laboratory.--The term `National Laboratory' 
     has the meaning given the term in section 1203 of the Energy 
     Science and Technology Enhancement Act of 2002.
       ``(4) Science facility.--The term `science facility' has 
     the meaning given the term `single-purpose research facility' 
     in section 1401 of the Energy Science and Technology 
     Enhancement Act of 2002.
       ``(5) Tribal college.--The term `tribal college' has the 
     meaning given the term `tribally controlled college or 
     university' in section 2(a) of the Tribally Controlled 
     College or University Assistance Act of 1978 (25 U.S.C. 
     1801(a)).
       ``(b) Education Partnership.--
       ``(1) In general.--The Secretary shall direct the Director 
     of each National Laboratory, and may direct the head of any 
     science facility, to increase the participation of 
     historically Black colleges or universities, Hispanic-serving 
     institutions, or tribal colleges in activities that increase 
     the capacity of the historically Black colleges or 
     universities, Hispanic-serving institutions, or tribal 
     colleges to train personnel in science or engineering.
       ``(2) Activities.--An activity under paragraph (1) may 
     include--
       ``(A) collaborative research;
       ``(B) a transfer of equipment;
       ``(C) training of personnel at a National Laboratory or 
     science facility; and
       ``(D) a mentoring activity by personnel at a National 
     Laboratory or science facility.
       ``(c) Report.--Not later than 2 years after the date of 
     enactment of this section, the Secretary shall submit to the 
     Committee on Science of the House of Representatives and the 
     Committee on Energy and Natural Resources of the Senate a 
     report on the activities carried out under this section.''.

     SEC. 1506. NATIONAL POWER PLANT OPERATIONS TECHNOLOGY AND 
                   EDUCATION CENTER.

       (a) Establishment.--The Secretary shall establish a 
     National Power Plant Operations Technology and Education 
     Center (the ``Center''), to address the need for training and 
     educating certified operators for electric power generation 
     plants.
       (b) Role.--The Center shall provide both training and 
     continuing education relating to electric power generation 
     plant technologies and operations. The Center shall conduct 
     training and education activities on site and through 
     Internet-based information technologies that allow for 
     learning at remote sites.
       (c) Criteria for Competitive Selection.--The Secretary 
     shall establish the Center at an institution of higher 
     education with expertise in plant technology and operation 
     and that can provide on-site as well as Internet-based 
     training.

     SEC. 1507. FEDERAL MINE INSPECTORS.

       In light of projected retirements of Federal mine 
     inspectors and the need for additional personnel, the 
     Secretary of Labor shall hire, train, and deploy such 
     additional skilled mine inspectors (particularly inspectors 
     with practical experience as a practical mining engineer) as 
     necessary to ensure the availability of skilled and 
     experienced individuals and to maintain the number of Federal 
     mine inspectors at or above the levels authorized by law or 
     established by regulation.

             DIVISION F--TECHNOLOGY ASSESSMENT AND STUDIES

                    TITLE XVI--TECHNOLOGY ASSESSMENT

     SEC. 1601. NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT 
                   SERVICE.

       The National Science and Technology Policy, Organization, 
     and Priorities Act of 1976 (42 U.S.C. 6601 et seq.) is 
     amended by adding at the end the following:

    ``TITLE VII--NATIONAL SCIENCE AND TECHNOLOGY ASSESSMENT SERVICE

     ``SEC. 701. ESTABLISHMENT.

       ``There is hereby created a Science and Technology 
     Assessment Service (hereinafter referred to as the 
     `Service'), which shall be within and responsible to the 
     legislative branch of the Government.

     ``SEC. 702. COMPOSITION.

       ``The Service shall consist of a Science and Technology 
     Board (hereinafter referred to as the `Board') which shall 
     formulate and promulgate the policies of the Service, and a 
     Director who shall carry out such policies and administer the 
     operations of the Service.

     ``SEC. 703. FUNCTIONS AND DUTIES.

       ``The Service shall coordinate and develop information for 
     Congress relating to the uses and application of technology 
     to address current national science and technology policy 
     issues. In developing such technical assessments for 
     Congress, the Service shall utilize, to the extent 
     practicable, experts selected in coordination with the 
     National Research Council.

     ``SEC. 704. INITIATION OF ACTIVITIES.

       ``Science and technology assessment activities undertaken 
     by the Service may be initiated upon the request of--
       ``(1) the Chairman of any standing, special, or select 
     committee of either House of the Congress, or of any joint 
     committee of the Congress, acting for himself or at the 
     request of the ranking minority member or a majority of the 
     committee members;
       ``(2) the Board; or
       ``(3) the Director.

     ``SEC. 705. ADMINISTRATION AND SUPPORT.

       ``The Director of the Science and Technology Assessment 
     Service shall be appointed by the Board and shall serve for a 
     term of 6 years unless sooner removed by the Board. The 
     Director shall receive basic pay at the rate provided for 
     level III of the Executive Schedule under section 5314 of 
     title 5, United States Code. The Director shall contract for 
     administrative support from the Library of Congress.

     ``SEC. 706. AUTHORITY.

       ``The Service shall have the authority, within the limits 
     of available appropriations, to do all things necessary to 
     carry out the provisions of this section, including, but 
     without being limited to, the authority to--
       ``(1) make full use of competent personnel and 
     organizations outside the Office, public or private, and form 
     special ad hoc task forces or make other arrangements when 
     appropriate;
       ``(2) enter into contracts or other arrangements as may be 
     necessary for the conduct of the work of the Office with any 
     agency or instrumentality of the United States, with any 
     State, territory, or possession or any political subdivision 
     thereof, or with any person, firm, association, corporation, 
     or educational institution, with or without reimbursement, 
     without performance or other bonds, and without regard to 
     section 3709 of the Revised Statutes (41 U.S.C. 51);
       ``(3) accept and utilize the services of voluntary and 
     uncompensated personnel necessary for the conduct of the work 
     of the Service and provide transportation and subsistence as 
     authorized by section 5703 of title 5, United States Code, 
     for persons serving without compensation; and
       ``(4) prescribe such rules and regulations as it deems 
     necessary governing the operation and organization of the 
     Service.

     ``SEC. 707. BOARD.

       ``The Board shall consist of 13 members as follows--
       ``(1) six Members of the Senate, appointed by the President 
     pro tempore of the Senate, three from the majority party and 
     three from the minority party;
       ``(2) six Members of the House of Representatives appointed 
     by the Speaker of the House of Representatives, three from 
     the majority party and three from the minority party; and
       ``(3) the Director, who shall not be a voting member.

     ``SEC. 708. REPORT TO CONGRESS.

       ``The Service shall submit to the Congress an annual report 
     which shall include, but not be

[[Page S3760]]

     limited to, an evaluation of technology assessment techniques 
     and identification, insofar as may be feasible, of 
     technological areas and programs requiring future analysis. 
     The annual report shall be submitted not later than March 15 
     of each year.

     ``SEC. 709. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to the Service 
     such sums as are necessary to fulfill the requirements of 
     this title.''.

                          TITLE XVII--STUDIES

     SEC. 1701. REGULATORY REVIEWS.

       (a) Regulatory Reviews.--Not later than 1 year after the 
     date of enactment of this section and every 5 years 
     thereafter, each Federal agency shall review relevant 
     regulations and standards to identify--
       (1) existing regulations and standards that act as barriers 
     to--
       (A) market entry for emerging energy technologies 
     (including fuel cells, combined heat and power, distributed 
     power generation, and small-scale renewable energy), and
       (B) market development and expansion for existing energy 
     technologies (including combined heat and power, small-scale 
     renewable energy, geothermal heat pump technology, and energy 
     recovery in industrial processes), and
       (2) actions the agency is taking or could take to--
       (A) remove barriers to market entry for emerging energy 
     technologies and to market expansion for existing 
     technologies,
       (B) increase energy efficiency and conservation, or
       (C) encourage the use of new and existing processes to meet 
     energy and environmental goals.
       (b) Report to Congress.--Not later than 18 months after the 
     date of enactment of this section, and every 5 years 
     thereafter, the Director of the Office of Science and 
     Technology Policy shall report to the Congress on the results 
     of the agency reviews conducted under subsection (a).
       (c) Contents of the Report.--The report shall--
       (1) identify all regulatory barriers to--
       (A) the development and commercialization of emerging 
     energy technologies and processes, and
       (B) the further development and expansion of existing 
     energy conservation technologies and processes,
       (2) actions taken, or proposed to be taken, to remove such 
     barriers, and
       (3) recommendations for changes in laws or regulations that 
     may be needed to--
       (A) expedite the siting and development of energy 
     production and distribution facilities,
       (B) encourage the adoption of energy efficiency and process 
     improvements,
       (C) facilitate the expanded use of existing energy 
     conservation technologies, and
       (D) reduce the environmental impacts of energy facilities 
     and processes through transparent and flexible compliance 
     methods.

     SEC. 1702. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON 
                   OIL.

       (a) Assessment.--The Secretary of Energy shall assess the 
     economic implications of the dependence of the State of 
     Hawaii on oil as the principal source of energy for the 
     State, including--
       (1) the short- and long-term prospects for crude oil supply 
     disruption and price volatility and potential impacts on the 
     economy of Hawaii;
       (2) the economic relationship between oil-fired generation 
     of electricity from residual fuel and refined petroleum 
     products consumed for ground, marine, and air transportation;
       (3) the technical and economic feasibility of increasing 
     the contribution of renewable energy resources for generation 
     of electricity, on an island-by-island basis, including--
       (A) siting and facility configuration;
       (B) environmental, operational, and safety considerations;
       (C) the availability of technology;
       (D) effects on the utility system, including reliability;
       (E) infrastructure and transport requirements;
       (F) community support; and
       (G) other factors affecting the economic impact of such an 
     increase and any effect on the economic relationship 
     described in paragraph (2);
       (4) the technical and economic feasibility of using 
     liquefied natural gas to displace residual fuel oil for 
     electric generation, including neighbor island opportunities, 
     and the effect of such displacement on the economic 
     relationship described in paragraph (2), including--
       (A) the availability of supply;
       (B) siting and facility configuration for onshore and 
     offshore liquefied natural gas receiving terminals;
       (C) the factors described in subparagraphs (B) through (F) 
     of paragraph (3); and
       (D) other economic factors;
       (5) the technical and economic feasibility of using 
     renewable energy sources (including hydrogen) for ground, 
     marine, and air transportation energy applications to 
     displace the use of refined petroleum products, on an island-
     by-island basis, and the economic impact of such displacement 
     on the relationship described in paragraph (2); and
       (6) an island-by-island approach to--
       (A) the development of hydrogen from renewable resources; 
     and
       (B) the application of hydrogen to the energy needs of 
     Hawaii.
       (b) Contracting Authority.--The Secretary may carry out the 
     assessment under subsection (a) directly or, in whole or in 
     part, through one or more contracts with qualified public or 
     private entities.
       (c) Report.--Not later than 300 days after the date of 
     enactment of this Act, the Secretary shall prepare, in 
     consultation with agencies of the State of Hawaii and other 
     stakeholders, as appropriate, and submit to Congress, a 
     report detailing the findings, conclusions, and 
     recommendations resulting from the assessment.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.

     SEC. 1703. STUDY OF SITING AN ELECTRIC TRANSMISSION SYSTEM ON 
                   AMTRAK RIGHT-OF-WAY.

       (a) Study.--The Secretary of Energy shall contract with 
     Amtrak to conduct a study of the feasibility of building and 
     operating a new electric transmission system on the Amtrak 
     right-of-way in the Northeast Corridor.
       (b) Scope of the Study.--The study shall focus on siting 
     the new system on the Amtrak right-of-way within the 
     Northeast Corridor between Washington, D.C., and New 
     Rochelle, New York, including the Amtrak right-of-way between 
     Philadelphia, Pennsylvania and Harrisburg, Pennsylvania.
       (c) Contents of the Study.--The study shall consider--
       (1) alternative geographic configuration of a new 
     electronic transmission system on the Amtrak right-of-way;
       (2) alternative technologies for the system;
       (3) the estimated costs of building and operating each 
     alternative;
       (4) alternative means of financing the system;
       (5) the environmental risks and benefits of building and 
     operating each alternative as well as environmental risks and 
     benefits of building and operating the system on the 
     Northeast Corridor rather than at other locations;
       (6) engineering and technological obstacles to building and 
     operating each alternative; and
       (7) the extent to which each alternative would enhance the 
     reliability of the electric transmission grid and enhance 
     competition in the sale of electric energy at wholesale 
     within the Northeast Corridor.
       (d) Recommendations.--The study shall recommend the optimal 
     geographic configuration, the optimal technology, the optimal 
     engineering design, and the optimal means of financing for 
     the new system from among the alternatives considered.
       (e) Report.--The Secretary of Energy shall submit the 
     completed study to the Committee on Energy and Natural 
     Resources of the United States Senate and the Committee on 
     Energy and Commerce of the House of Representatives not later 
     than 270 days after the date of enactment of this section.
       (f) Definitions.--For purposes of this section--
       (1) the term ``Amtrak'' means the National Railroad 
     Passenger Corporation established under chapter 243 of title 
     49, United States Code; and
       (2) the term ``Northeast Corridor'' shall have the meaning 
     given such term under section 24102(7) of title 49, United 
     States Code.

     SEC. 1704. UPDATING OF INSULAR AREA RENEWABLE ENERGY AND 
                   ENERGY EFFICIENCY PLANS.

       Section 604 of Public Law 96-597 (48 U.S.C. 1492) is 
     amended--
       (1) in subsection (a) at the end of paragraph (4) by 
     striking ``resources.'' and inserting ``resources; and
       ``(5) the development of renewable energy and energy 
     efficiency technologies since publication of the 1982 
     Territorial Energy Assessment prepared under subsection (c) 
     reveals the need to reassess the state of energy production, 
     consumption, efficiency, infrastructure, reliance on imported 
     energy, and potential of the indigenous renewable energy 
     resources and energy efficiency in regard to the insular 
     areas.''; and
       (2) by adding at the end of subsection (e) ``The Secretary 
     of Energy, in consultation with the Secretary of the Interior 
     and the chief executive officer of each insular area, shall 
     update the plans required under subsection (c) and draft 
     long-term energy plans for each insular area that will 
     reduce, to the extent feasible, the reliance of the insular 
     area on energy imports by the year 2010, and maximize, to the 
     extent feasible, use of renewable energy resources and energy 
     efficiency opportunities. Not later than December 31, 2002, 
     the Secretary of Energy shall submit the updated plans to 
     Congress.''.

     SEC. 1705. CONSUMER ENERGY COMMISSION.

       (a) Establishment of Commission.--There is established a 
     commission to be known as the ``Consumer Energy Commission''.
       (b) Membership.--
       (1) In general.--The Commission shall be comprised of 11 
     members who shall be appointed within 30 days from the date 
     of enactment of this section and who shall serve for the life 
     of the Commission.
       (2) Appointments in the senate and the house.--The Majority 
     Leader and the Minority Leader of the Senate and the Speaker 
     and Minority Leader of the House of Representatives shall 
     each appoint 2 members--
       (A) one of whom shall represent consumer groups focusing on 
     energy issues; and
       (B) one of whom shall represent the energy industry.
       (3) Appointments by the president.--The President shall 
     appoint three members--
       (A) one of whom shall represent consumer groups focusing on 
     energy issues;
       (B) one of whom shall represent the energy industry; and
       (C) one of whom shall represent the Department of Energy.
       (c) Initial Meeting.--Not later than 60 days after the date 
     of enactment of this Act, the Commission shall hold the first 
     meeting of the Commission regardless of the number of members 
     that have been appointed and shall select a Chairperson and 
     Vice Chairperson from among the members of the Commission.
       (d) Administrative Expenses.--Members of the Commission 
     shall serve without compensation, except for per diem and 
     travel expenses

[[Page S3761]]

     which shall be reimbursed, and the Department of Energy shall 
     pay expenses as necessary to carry out this section, with the 
     expenses not to exceed $400,000.
       (e) Studies.--The Commission shall conduct a nationwide 
     study of significant price spikes since 1990 in major United 
     States consumer energy products, including electricity, 
     gasoline, home heating oil, natural gas and propane with a 
     focus on their causes including insufficient inventories, 
     supply disruptions, refinery capacity limits, insufficient 
     infrastructure, regulatory failures, demand growth, reliance 
     on imported supplies, insufficient availability of 
     alternative energy sources, abuse of market power, market 
     concentration and any other relevant factors.
       (f) Report.--Not later than 180 days after the date of the 
     first meeting of the Commission, the Commission shall submit 
     to Congress a report that contains the findings and 
     conclusions of the Commission and any recommendations for 
     legislation, administrative actions, and voluntary actions by 
     industry and consumers to protect consumers and small 
     businesses from future price spikes in consumer energy 
     products.
       (g) Consultation.--The Commission shall consult with the 
     Federal Trade Commission, the Federal Energy Regulatory 
     Commission, the Department of Energy and other Federal and 
     State agencies as appropriate.
       (h) Sunset.--The Commission shall terminate within 30 days 
     after the submission of the report to Congress.

     SEC. 1706. STUDY OF NATURAL GAS AND OTHER ENERGY TRANSMISSION 
                   INFRASTRUCTURE ACROSS THE GREAT LAKES.

       (a) Definitions.--In this section:
       (1) Great lake.--The term ``Great Lake'' means Lake Erie, 
     Lake Huron (including Lake Saint Clair), Lake Michigan, Lake 
     Ontario (including the Saint Lawrence River from Lake Ontario 
     to the 45th parallel of latitude), and Lake Superior.
       (2) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.
       (b) Study.--
       (1) In general.--The Secretary, in consultation with 
     representatives of appropriate Federal and State agencies, 
     shall--
       (A) conduct a study of--
       (i) the location and extent of anticipated growth of 
     natural gas and other energy transmission infrastructure 
     proposed to be constructed across the Great Lakes; and
       (ii) the environmental impacts of any natural gas or other 
     energy transmission infrastructure proposed to be constructed 
     across the Great Lakes; and
       (B) make recommendations for minimizing the environmental 
     impact of pipelines and other energy transmission 
     infrastructure on the Great Lakes ecosystem.
       (2) Advisory Committee.--Not later than 30 days after the 
     date of enactment of this Act, the Secretary shall enter into 
     an agreement with the National Academy of Sciences to 
     establish an advisory committee to ensure that the study is 
     complete, objective, and of good quality.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall submit to Congress 
     a report that describes the findings and recommendations 
     resulting from the study under subsection (b).

     SEC. 1707. NATIONAL ACADEMY OF SCIENCES STUDY OF PROCEDURES 
                   FOR SELECTION AND ASSESSMENT OF CERTAIN ROUTES 
                   FOR SHIPMENT OF SPENT NUCLEAR FUEL FROM 
                   RESEARCH NUCLEAR REACTORS.

       (a) In General.--The Secretary of Transportation shall 
     enter into an agreement with the National Academy of Sciences 
     under which agreement the National Academy of Sciences shall 
     conduct a study of the procedures by which the Department of 
     Energy, together with the Department of Transportation and 
     the Nuclear Regulatory Commission, selects routes for the 
     shipment of spent nuclear fuel from research nuclear reactors 
     between or among existing Department of Energy facilities 
     currently licensed to accept such spent nuclear fuel.
       (b) Elements of Study.--In conducting the study under 
     subsection (a), the National Academy of Sciences shall 
     analyze the manner in which the Department of Energy--
       (1) selects potential routes for the shipment of spent 
     nuclear fuel from research nuclear reactors between or among 
     existing Department facilities currently licensed to accept 
     such spent nuclear fuel;
       (2) selects such a route for a specific shipment of such 
     spent nuclear fuel; and
       (3) conducts assessments of the risks associated with 
     shipments of such spent nuclear fuel along such a route.
       (c) Considerations Regarding Route Selection.--The analysis 
     under subsection (b) shall include a consideration whether, 
     and to what extent, the procedures analyzed for purposes of 
     that subsection take into account the following:
       (1) The proximity of the routes under consideration to 
     major population centers and the risks associated with 
     shipments of spent nuclear fuel from research nuclear 
     reactors through densely populated areas.
       (2) Current traffic and accident data with respect to the 
     routes under consideration.
       (3) The quality of the roads comprising the routes under 
     consideration.
       (4) Emergency response capabilities along the routes under 
     consideration.
       (5) The proximity of the routes under consideration to 
     places or venues (including sports stadiums, convention 
     centers, concert halls and theaters, and other venues) where 
     large numbers of people gather.
       (d) Recommendations.--In conducting the study under 
     subsection (a), the National Academy of Sciences shall also 
     make such recommendations regarding the matters studied as 
     the National Academy of Sciences considers appropriate.
       (e) Deadline for Dispersal of Funds for Study.--The 
     Secretary shall disperse to the National Academy of Sciences 
     the funds for the cost of the study required by subsection 
     (a) not later than 30 days after the date of the enactment of 
     this Act.
       (f) Report on Results of Study.--Not later than 6 months 
     after the date of the dispersal of funds under subsection 
     (e), the National Academy of Sciences shall submit to the 
     appropriate committees of Congress a report on the study 
     conducted under subsection (a), including the recommendations 
     required by subsection (d).
       (g) Appropriate Committees of Congress Defined.--In this 
     section, the term ``appropriate committees of Congress'' 
     means--
       (1) the Committees on Commerce, Science, and 
     Transportation, Energy and Natural Resources, and Environment 
     and Public Works of the Senate; and
       (2) the Committee on Energy and Commerce of the House of 
     Representatives.

     SEC. 1708. REPORT ON ENERGY SAVINGS AND WATER USE.

       (a) Report.--The Secretary of Energy shall conduct a study 
     of opportunities to reduce energy use by cost-effective 
     improvements in the efficiency of municipal water and 
     wastewater treatment and use, including water pumps, motors, 
     and delivery systems; purification, conveyance and 
     distribution; upgrading of aging water infrastructure, and 
     improved methods for leakage monitoring, measuring, and 
     reporting; and public education.
       (b) Submission of Report.--The Secretary of Energy shall 
     submit a report on the results of the study, including any 
     recommendations for implementation of measures and estimates 
     of costs and resource savings, no later than 2 years from the 
     date of enactment of this section.
       (c) Authorization.--There is hereby authorized to be 
     appropriated such sums as may be necessary to carry out the 
     purposes of this section.

     SEC. 1709. REPORT ON RESEARCH ON HYDROGEN PRODUCTION AND USE.

       Not later than 120 days after the date of enactment of this 
     Act, the Secretary of Energy shall submit to Congress a 
     report that identifies current or potential research projects 
     at Department of Energy nuclear facilities relating to the 
     production or use of hydrogen in fuel cell development or any 
     other method or process enhancing alternative energy 
     production technologies.

               DIVISION G--ENERGY INFRASTRUCTURE SECURITY

              TITLE XVIII--CRITICAL ENERGY INFRASTRUCTURE

               Subtitle A--Department of Energy Programs

     SEC. 1801. DEFINITIONS.

       In this title:
       (1) Critical energy infrastructure.--
       (A) In general.--The term ``critical energy 
     infrastructure'' means a physical or cyber-based system or 
     service for--
       (i) the generation, transmission or distribution of 
     electric energy; or
       (ii) the production, refining, or storage of petroleum, 
     natural gas, or petroleum product--
     the incapacity or destruction of which would have a 
     debilitating impact on the defense or economic security of 
     the United States.
       (B) Exclusion.--The term shall not include a facility that 
     is licensed by the Nuclear Regulatory Commission under 
     section 103 or 104b. of the Atomic Energy Act of 1954 (42 
     U.S.C. 2133 and 2134(b)).
       (2) Department; national laboratory; secretary.--The terms 
     ``Department'', ``National Laboratory'', and ``Secretary'' 
     have the meaning given such terms in section 1203.

     SEC. 1802. ROLE OF THE DEPARTMENT OF ENERGY.

       Section 102 of the Department of Energy Organization Act 
     (42 U.S.C. 7112) is amended by adding at the end the 
     following:
       ``(20) To ensure the safety, reliability, and security of 
     the Nation's energy infrastructure, and to respond to any 
     threat to or disruption of such infrastructure, through 
     activities including--
       ``(A) research and development;
       ``(B) financial assistance, technical assistance, and 
     cooperative activities with States, industry, and other 
     interested parties; and
       ``(C) education and public outreach activities.''.

     SEC. 1803. CRITICAL ENERGY INFRASTRUCTURE PROGRAMS.

       (a) Programs.--In addition to the authorities otherwise 
     provided by law (including section 1261), the Secretary is 
     authorized to establish programs of financial, technical, or 
     administrative assistance to--
       (1) enhance the security of critical energy infrastructure 
     in the United States;
       (2) develop and disseminate, in cooperation with industry, 
     best practices for critical energy infrastructure assurance; 
     and
       (3) protect against, mitigate the effect of, and improve 
     the ability to recover from disruptive incidents affecting 
     critical energy infrastructure.
       (b) Requirements.--A program established under this section 
     shall--
       (1) be undertaken in consultation with the advisory 
     committee established under section 1804;
       (2) have available to it the scientific and technical 
     resources of the Department, including resources at a 
     National Laboratory; and
       (3) be consistent with any overall Federal plan for 
     national infrastructure security developed by the President 
     or his designee.

     SEC. 1804. ADVISORY COMMITTEE ON ENERGY INFRASTRUCTURE 
                   SECURITY.

       (a) Establishment.--The Secretary shall establish an 
     advisory committee, or utilize an existing advisory committee 
     within the Department, to advise the Secretary on policies 
     and programs related to the security of United States energy 
     infrastructure.

[[Page S3762]]

       (b) Balanced Membership.--The Secretary shall ensure that 
     the advisory committee established or utilized under 
     subsection (a) has a membership with an appropriate balance 
     among the various interests related to energy infrastructure 
     security, including--
       (1) scientific and technical experts;
       (2) industrial managers;
       (3) worker representatives;
       (4) insurance companies or organizations;
       (5) environmental organizations;
       (6) representatives of State, local, and tribal 
     governments; and
       (7) such other interests as the Secretary may deem 
     appropriate.
       (c) Expenses.--Members of the advisory committee 
     established or utilized under subsection (a) shall serve 
     without compensation, and shall be allowed travel expenses, 
     including per diem in lieu of subsistence, at rates 
     authorized for an employee of an agency under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     the home or regular place of business of the member in the 
     performance of the duties of the committee.

     SEC. 1805. BEST PRACTICES AND STANDARDS FOR ENERGY 
                   INFRASTRUCTURE SECURITY.

       The Secretary, in consultation with the advisory committee 
     under section 1804, shall enter into appropriate arrangements 
     with one or more standard-setting organizations, or similar 
     organizations, to assist the development of industry best 
     practices and standards for security related to protecting 
     critical energy infrastructure.

            Subtitle B--Department of the Interior Programs

     SEC. 1811. OUTER CONTINENTAL SHELF ENERGY INFRASTRUCTURE 
                   SECURITY.

       (a) Definitions.--In this section:
       (1) Approved state plan.--The term ``approved State plan'' 
     means a State plan approved by the Secretary under subsection 
     (c)(3).
       (2) Coastline.--The term ``coastline'' has the same meaning 
     as the term ``coast line'' as defined in subsection 2(c) of 
     the Submerged Lands Act (43 U.S.C. 1301(c)).
       (3) Critical ocs energy infrastructure facility.--The term 
     ``OCS critical energy infrastructure facility'' means--
       (A) a facility located in an OCS Production State or in the 
     waters of such State related to the production of oil or gas 
     on the Outer Continental Shelf; or
       (B) a related facility located in an OCS Production State 
     or in the waters of such State that carries out a public 
     service, transportation, or infrastructure activity critical 
     to the operation of an Outer Continental Shelf energy 
     infrastructure facility, as determined by the Secretary.
       (4) Distance.--The term ``distance'' means the minimum 
     great circle distance, measured in statute miles.
       (5) Leased tract.--
       (A) In general.--The term ``leased tract'' means a tract 
     that--
       (i) is subject to a lease under section 6 or 8 of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1335, 1337) for the 
     purpose of drilling for, developing, and producing oil or 
     natural gas resources; and
       (ii) consists of a block, a portion of a block, a 
     combination of blocks or portions of blocks, or a combination 
     of portions of blocks, as--

       (I) specified in the lease; and
       (II) depicted on an outer Continental Shelf official 
     protraction diagram.

       (B) Exclusion.--The term ``leased tract'' does not include 
     a tract described in subparagraph (A) that is located in a 
     geographic area subject to a leasing moratorium on January 1, 
     2001, unless the lease was in production on that date.
       (6) OCS political subdivision.--The term ``OCS political 
     subdivision'' means a county, parish, borough or any 
     equivalent subdivision of an OCS Production State all or part 
     of which subdivision lies within the coastal zone (as defined 
     in section 304(1) of the Coastal Zone Management Act of 1972 
     (16 U.S.C. 1453(1)).
       (7) OCS production state.--The term ``OCS Production 
     State'' means the State of--
       (A) Alaska;
       (B) Alabama;
       (C) California;
       (D) Florida;
       (E) Louisiana;
       (F) Mississippi; or
       (G) Texas.
       (8) Production.--The term ``production'' has the meaning 
     given the term in section 2 of the Outer Continental Shelf 
     Lands Act (43 U.S.C. 1331).
       (9) Program.--The term ``program'' means the Outer 
     Continental Shelf Energy Infrastructure Security Program 
     established under subsection (b).
       (10) Qualified outer continental shelf revenues.--The term 
     ``qualified Outer Continental Shelf revenues'' means all 
     amounts received by the United States from each leased tract 
     or portion of a leased tract lying seaward of the zone 
     defined and governed by section 8(g) of the Outer Continental 
     Shelf Lands Act (43 U.S.C. 1331 et seq.), or lying within 
     such zone but to which section 8(g) does not apply, the 
     geographic center of which lies within a distance of 200 
     miles from any part of the coastline of any State, including 
     bonus bids, rents, royalties (including payments for 
     royalties taken in kind and sold), net profit share payments, 
     and related late payment interest. Such term does not include 
     any revenues from a leased tract or portion of a leased tract 
     that is included within any area of the Outer Continental 
     Shelf where a moratorium on new leasing was in effect as of 
     January 1, 2001, unless the lease was issued prior to the 
     establishment of the moratorium and was in production on 
     January 1, 2001.
       (11) Secretary.--The term ``Secretary'' means the Secretary 
     of the Interior.
       (12) State plan.--The term ``State plan'' means a State 
     plan described in subsection (b).
       (b) Establishment.--The Secretary shall establish a 
     program, to be known as the ``Outer Continental Shelf Energy 
     Infrastructure Security Program'', under which the Secretary 
     shall provide funds to OCS Production States to implement 
     approved State plans to provide security against hostile and 
     natural threats to critical OCS energy infrastructure 
     facilities and support of any necessary public service or 
     transportation activities that are needed to maintain the 
     safety and operation of critical energy infrastructure 
     activities. For purposes of this program, restoration of any 
     coastal wetland shall be considered to be an activity that 
     secures critical OCS energy infrastructure facilities from a 
     natural threat.
       (c) State Plans.--
       (1) Initial plan.--Not later than 180 days after the date 
     of enactment of this Act, to be eligible to receive funds 
     under the program, the Governor of an OCS Production State 
     shall submit to the Secretary a plan to provide security 
     against hostile and natural threats to critical energy 
     infrastructure facilities in the OCS Production State and to 
     support any of the necessary public service or transportation 
     activities that are needed to maintain the safety and 
     operation of critical energy infrastructure facilities. Such 
     plan shall include--
       (A) the name of the State agency that will have the 
     authority to represent and act for the State in dealing with 
     the Secretary for purposes of this section;
       (B) a program for the implementation of the plan which 
     describes how the amounts provided under this section will be 
     used;
       (C) a contact for each OCS political subdivision and 
     description of how such political subdivisions will use 
     amounts provided under this section, including a 
     certification by the Governor that such uses are consistent 
     with the requirements of this section; and
       (D) measures for taking into account other relevant Federal 
     resources and programs.
       (2) Annual reviews.--Not later than 1 year after the date 
     of submission of the plan and annually thereafter, the 
     Governor of an OCS Production State shall--
       (A) review the approved State plan; and
       (B) submit to the Secretary any revised State plan 
     resulting from the review.
       (3) Approval of plans.--
       (A) In general.--In consultation with appropriate Federal 
     security officials and the Secretaries of Commerce and 
     Energy, the Secretary shall--
       (i) approve each State plan; or
       (ii) recommend changes to the State plan.
       (B) Resubmission of state plans.--If the Secretary 
     recommends changes to a State plan under subparagraph 
     (A)(ii), the Governor of the OCS Production State may 
     resubmit a revised State plan to the Secretary for approval.
       (4) Availability of plans.--The Secretary shall provide to 
     Congress a copy of each approved State plan.
       (5) Consultation and public comment.--
       (A) Consultation.--The Governor of an OCS Production State 
     shall develop the State plan in consultation with Federal, 
     State, and local law enforcement and public safety officials, 
     industry, Indian tribes, the scientific community, and other 
     persons as appropriate.
       (B) Public comment.--The Governor of an OCS Production 
     State may solicit public comments on the State plan to the 
     extent that the Governor determines to be appropriate.
       (d) Allocation of Amounts by the Secretary.--The Secretary 
     shall allocate the amounts made available for the purposes of 
     carrying out the program provided for by this section among 
     OCS Production States as follows:
       (1) twenty-five percent of the amounts shall be divided 
     equally among OCS Production States.
       (2) seventy-five percent of the amounts shall be divided 
     among OCS Production States on the basis of the proximity of 
     each OCS Production State to offshore locations at which oil 
     and gas are being produced.
       (e) Calculation.--The amount for each OCS Production State 
     under paragraph (d)(2) shall be calculated based on the ratio 
     of qualified OCS revenues generated off the coastline of the 
     OCS Production State to the qualified OCS revenues generated 
     off the coastlines of all OCS Production States for the prior 
     5-year period. Where there is more than one OCS Production 
     State within 200 miles of a leased tract, the amount of each 
     OCS Production State's payment under paragraph (d)(2) for 
     such leased tract shall be inversely proportional to the 
     distance between the nearest point on the coastline of such 
     State and the geographic center of each leased tract or 
     portion of the leased tract (to the nearest whole mile) that 
     is within 200 miles of that coastline, as determined by the 
     Secretary. A leased tract or portion of a leased tract shall 
     be excluded if the tract or portion is located in a 
     geographic area where a moratorium on new leasing was in 
     effect on January 1, 2001, unless the lease was issued prior 
     to the establishment of the moratorium and was in production 
     on January 1, 2001.
       (f) Payments to OCS Political Subdivisions.--Thirty-five 
     percent of each OCS Production State's allocable share as 
     determined under subsection (e) shall be paid directly to the 
     OCS political subdivisions by the Secretary based on the 
     following formula:
       (1) twenty-five percent shall be allocated based on the 
     ratio of such OCS political subdivision's population to the 
     population of all OCS political subdivisions in the OCS 
     Production State.
       (2) twenty-five percent shall be allocated based on the 
     ratio of such OCS political subdivision's coastline miles to 
     the coastline miles of all OCS political subdivisions in the 
     OCS Production State. For purposes of this subsection, those 
     OCS political subdivisions without coastlines

[[Page S3763]]

     shall be considered to have a coastline that is the average 
     length of the coastlines of all political subdivisions in the 
     State.
       (3) fifty percent shall be allocated based on the relative 
     distance of such OCS political subdivision from any leased 
     tract used to calculate that OCS Production State's 
     allocation using ratios that are inversely proportional to 
     the distance between the point in the coastal political 
     subdivision closest to the geographic center of each leased 
     tract or portion, as determined by the Secretary. For 
     purposes of the calculations under this subparagraph, a 
     leased tract or portion of a leased tract shall be excluded 
     if the leased tract or portion is located in a geographic 
     area where a moratorium on new leasing was in effect on 
     January 1, 2001, unless the lease was issued prior to the 
     establishment of the moratorium and was in production on 
     January 1, 2001.
       (g) Failure To Have Plan Approved.--Any amount allocated to 
     an OCS Production State or OCS political subdivision but not 
     disbursed because of a failure to have an approved Plan under 
     this section shall be allocated equally by the Secretary 
     among all other OCS Production States in a manner consistent 
     with this subsection except that the Secretary shall hold in 
     escrow such amount until the final resolution of any appeal 
     regarding the disapproval of a plan submitted under this 
     section. The Secretary may waive the provisions of this 
     paragraph and hold an OCS Production State's allocable share 
     in escrow if the Secretary determines that such State is 
     making a good faith effort to develop and submit, or update, 
     a Plan.
       (h) Use of Amounts Allocated by the Secretary.--
       (1) In general.--Amounts allocated by the Secretary under 
     subsection (d) may be used only in accordance with a plan 
     approved pursuant to subsection (c) for--
       (A) activities to secure critical OCS energy infrastructure 
     facilities from human or natural threats; and
       (B) support of any necessary public service or 
     transportation activities that are needed to maintain the 
     safety and operation of critical OCS energy infrastructure 
     facilities.
       (2) Restoration of coastal wetland.--For the purpose of 
     subparagraph (1)(A), restoration of any coastal wetland shall 
     be considered to be an activity that secures critical OCS 
     energy infrastructure facilities from a natural threat.
       (i) Failure To Have Use.--Any amount allocated to an OCS 
     political subdivision but not disbursed because of a failure 
     to have a qualifying use as described in subsection (h) shall 
     be allocated by the Secretary to the OCS Production State in 
     which the OCS political subdivision is located except that 
     the Secretary shall hold in escrow such amount until the 
     final resolution of any appeal regarding the use of the 
     funds.
       (j) Compliance With Authorized Uses.--If the Secretary 
     determines that any expenditure made by an OCS Production 
     State or an OCS political subdivision is not consistent with 
     the uses authorized in subsection (h), the Secretary shall 
     not disburse any further amounts under this section to that 
     OCS Production State or OCS political subdivision until the 
     amounts used for the inconsistent expenditure have been 
     repaid or obligated for authorized uses.
       (k) Rulemaking.--The Secretary may promulgate such rules 
     and regulations as may be necessary to carry out the purposes 
     of this section, including rules and regulations setting 
     forth an appropriate process for appeals.
       (l) Authorization of Appropriations.--There are hereby 
     authorized to be appropriated $450,000,000 for each of the 
     fiscal years 2003 through 2008 to carry out the purposes of 
     this section.

                   DIVISION H--ENERGY TAX INCENTIVES

     SEC. 1900. SHORT TITLE; ETC.

       (a) Short Title.--This division may be cited as the 
     ``Energy Tax Incentives Act of 2002''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

    TITLE XIX--EXTENSION AND MODIFICATION OF RENEWABLE ELECTRICITY 
                         PRODUCTION TAX CREDIT

     SEC. 1901. THREE-YEAR EXTENSION OF CREDIT FOR PRODUCING 
                   ELECTRICITY FROM WIND AND POULTRY WASTE.

       (a) In General.--Subparagraphs (A) and (C) of section 
     45(c)(3) (relating to qualified facility), as amended by 
     section 603(a) of the Job Creation and Worker Assistance Act 
     of 2002, are each amended by striking ``January 1, 2004'' and 
     inserting ``January 1, 2007''.
       (b) 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.

     SEC. 1902. CREDIT FOR ELECTRICITY PRODUCED FROM BIOMASS.

       (a) Extension and Modification of Placed-In-Service 
     Rules.--Paragraph (3) of section 45(c) is amended--
       (1) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Closed-loop biomass facility.--
       ``(i) In general.--In the case of a facility using closed-
     loop biomass to produce electricity, the term `qualified 
     facility' means any facility--

       ``(I) owned by the taxpayer which is originally placed in 
     service after December 31, 1992, and before January 1, 2007, 
     or
       ``(II) owned by the taxpayer which is originally placed in 
     service before January 1, 1993, and modified to use closed-
     loop biomass to co-fire with coal before January 1, 2007, as 
     approved under the Biomass Power for Rural Development 
     Programs or under a pilot project of the Commodity Credit 
     Corporation as described in 65 Fed. Reg. 63052.

       ``(ii) Special rules.--In the case of a qualified facility 
     described in clause (i)(II)--

       ``(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 subclause, and
       ``(II) if the owner of such facility is not the producer of 
     the electricity, the person eligible for the credit allowable 
     under subsection (a) is the lessee or the operator of such 
     facility.'', and

       (2) by adding at the end the following new subparagraph:
       ``(D) Biomass facility.--
       ``(i) In general.--In the case of a facility using biomass 
     (other than closed-loop biomass) to produce electricity, the 
     term `qualified facility' means any facility owned by the 
     taxpayer which is originally placed in service before January 
     1, 2005.
       ``(ii) Special rule for posteffective date facilities.--In 
     the case of any facility described in clause (i) which is 
     placed in service after the date of the enactment of this 
     clause, the 3-year period beginning on the date the facility 
     is originally placed in service shall be substituted for the 
     10-year period in subsection (a)(2)(A)(ii).
       ``(iii) Special rules for preeffective date facilities.--In 
     the case of any facility described in clause (i) which is 
     placed in service before the date of the enactment of this 
     clause--

       ``(I) subsection (a)(1) shall be applied by substituting 
     `1.0 cents' for `1.5 cents', and
       ``(II) the 3-year period beginning after December 31, 2002, 
     shall be substituted for the 10-year period in subsection 
     (a)(2)(A)(ii).

       ``(iv) Credit eligibility.--In the case of any facility 
     described in clause (i), if the owner of such facility is not 
     the producer of the electricity, the person eligible for the 
     credit allowable under subsection (a) is the lessee or the 
     operator of such facility.''.
       (b) Definition of Biomass.--
       (1) In general.--Section 45(c)(1) (defining qualified 
     energy resources) is amended--
       (A) by striking ``and'' at the end of subparagraph (B),
       (B) by striking the period at the end of subparagraph (C) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(D) biomass (other than closed-loop biomass).''.
       (2) Biomass defined.--Section 45(c) (relating to 
     definitions) is amended by adding at the end the following 
     new paragraph:
       ``(5) Biomass.--The term `biomass' means any solid, 
     nonhazardous, cellulosic waste material which is segregated 
     from other waste materials and which is derived from--
       ``(A) any of the following forest-related resources: mill 
     residues, precommercial thinnings, slash, and brush, but not 
     including old-growth timber (other than old-growth timber 
     which has been permitted or contracted for removal by any 
     appropriate Federal authority through the National 
     Environmental Policy Act or by any appropriate State 
     authority),
       ``(B) solid wood waste materials, including waste pallets, 
     crates, dunnage, manufacturing and construction wood wastes 
     (other than pressure-treated, chemically-treated, or painted 
     wood wastes), and landscape or right-of-way tree trimmings, 
     but not including municipal solid waste (garbage), gas 
     derived from the biodegradation of solid waste, or paper that 
     is commonly recycled, or
       ``(C) agriculture sources, including orchard tree crops, 
     vineyard, grain, legumes, sugar, and other crop by-products 
     or residues.''.
       (c) Coordination With Section 29.--Section 45(c) (relating 
     to definitions) is amended by adding at the end the following 
     new paragraph:
       ``(6) Coordination with section 29.--The term `qualified 
     facility' shall not include any facility the production from 
     which is taken into account in determining any credit under 
     section 29 for the taxable year or any prior taxable year.''.
       (d) Clerical Amendments.--
       (1) The heading for subsection (c) of section 45 is amended 
     by inserting ``and Special Rules'' after ``Definitions''.
       (2) The heading for subsection (d) of section 45 is amended 
     by inserting ``Additional'' before ``Definitions''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to electricity 
     sold after the date of the enactment of this Act.
       (2) Certain biomass facilities.--With respect to any 
     facility described in section 45(c)(3)(D)(i) of the Internal 
     Revenue Code of 1986, as added by this section, which is 
     placed in service before the date of the enactment of this 
     Act, the amendments made by this section shall apply to 
     electricity sold after December 31, 2002.

     SEC. 1903. CREDIT FOR ELECTRICITY PRODUCED FROM SWINE AND 
                   BOVINE WASTE NUTRIENTS, GEOTHERMAL ENERGY, AND 
                   SOLAR ENERGY.

       (a) Expansion of Qualified Energy Resources.--
       (1) In general.--Section 45(c)(1) (defining qualified 
     energy resources), as amended by this Act, is amended by 
     striking ``and'' at the end of subparagraph (C), by striking 
     the period at the end of subparagraph (D) and inserting a 
     comma, and by adding at the end the following new 
     subparagraphs:
       ``(E) swine and bovine waste nutrients,
       ``(F) geothermal energy, and
       ``(G) solar energy.''.
       (2) Definitions.--Section 45(c) (relating to definitions 
     and special rules), as amended by this Act, is amended by 
     redesignating paragraph (6) as paragraph (8) and by inserting 
     after paragraph (5) the following new paragraphs:

[[Page S3764]]

       ``(6) Swine and bovine waste nutrients.--The term `swine 
     and bovine waste nutrients' means swine and bovine manure and 
     litter, including bedding material for the disposition of 
     manure.
       ``(7) Geothermal energy.--The term `geothermal energy' 
     means energy derived from a geothermal deposit (within the 
     meaning of section 613(e)(2)).''.
       (b) Extension and Modification of Placed-In-Service 
     Rules.--Section 45(c)(3) (relating to qualified facility), as 
     amended by this Act, is amended by adding at the end the 
     following new subparagraphs:
       ``(E) Swine and bovine waste nutrients facility.--In the 
     case of a facility using swine and bovine waste nutrients to 
     produce electricity, the term `qualified facility' means any 
     facility owned by the taxpayer which is originally placed in 
     service after the date of the enactment of this subparagraph 
     and before January 1, 2007.
       ``(F) Geothermal or solar energy facility.--
       ``(i) In general.--In the case of a facility using 
     geothermal or solar energy to produce electricity, the term 
     `qualified facility' means any facility owned by the taxpayer 
     which is originally placed in service after the date of the 
     enactment of this clause and before January 1, 2007.
       ``(ii) Special rule.--In the case of any facility described 
     in clause (i), the 5-year period beginning on the date the 
     facility was originally placed in service shall be 
     substituted for the 10-year period in subsection 
     (a)(2)(A)(ii).''.
       (d) 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.

     SEC. 1904. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE 
                   CREDIT.

       (a) In General.--Section 45(d) (relating to additional 
     definitions and special rules), as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(8) Treatment of persons not able to use entire credit.--
       ``(A) Allowance of credit.--
       ``(i) In general.--Except as otherwise provided in this 
     subsection--

       ``(I) any credit allowable under subsection (a) with 
     respect to a qualified facility owned by a person described 
     in clause (ii) may be transferred or used as provided in this 
     paragraph, and
       ``(II) the determination as to whether the credit is 
     allowable shall be made without regard to the tax-exempt 
     status of the person.

       ``(ii) Persons described.--A person is described in this 
     clause if the person is--

       ``(I) an organization described in section 501(c)(12)(C) 
     and exempt from tax under section 501(a),
       ``(II) an organization described in section 1381(a)(2)(C),
       ``(III) a public utility (as defined in section 
     136(c)(2)(B)), which is exempt from income tax under this 
     subtitle,
       ``(IV) any State or political subdivision thereof, the 
     District of Columbia, any possession of the United States, or 
     any agency or instrumentality of any of the foregoing, or
       ``(V) any Indian tribal government (within the meaning of 
     section 7871) or any agency or instrumentality thereof.

       ``(B) Transfer of credit.--
       ``(i) In general.--A person described in subparagraph 
     (A)(ii) may transfer any credit to which subparagraph (A)(i) 
     applies through an assignment to any other person not 
     described in subparagraph (A)(ii). Such transfer may be 
     revoked only with the consent of the Secretary.
       ``(ii) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to ensure that any credit described 
     in clause (i) is claimed once and not reassigned by such 
     other person.
       ``(iii) Transfer proceeds treated as arising from essential 
     government function.--Any proceeds derived by a person 
     described in subclause (III), (IV), or (V) of subparagraph 
     (A)(ii) from the transfer of any credit under clause (i) 
     shall be treated as arising from the exercise of an essential 
     government function.
       ``(C) Use of credit as an offset.--Notwithstanding any 
     other provision of law, in the case of a person described in 
     subclause (I), (II), or (V) of subparagraph (A)(ii), any 
     credit to which subparagraph (A)(i) applies may be applied by 
     such person, to the extent provided by the Secretary of 
     Agriculture, as a prepayment of any loan, debt, or other 
     obligation the entity has incurred under subchapter I of 
     chapter 31 of title 7 of the Rural Electrification Act of 
     1936 (7 U.S.C. 901 et seq.), as in effect on the date of the 
     enactment of the Energy Tax Incentives Act of 2002.
       ``(D) Credit not income.--Any transfer under subparagraph 
     (B) or use under subparagraph (C) of any credit to which 
     subparagraph (A)(i) applies shall not be treated as income 
     for purposes of section 501(c)(12).
       ``(E) Treatment of unrelated persons.--For purposes of 
     subsection (a)(2)(B), sales among and between persons 
     described in subparagraph (A)(ii) shall be treated as sales 
     between unrelated parties.''.
       (b) Credits Not Reduced by Tax-Exempt Bonds or Certain 
     Other Subsidies.--Section 45(b)(3) (relating to credit 
     reduced for grants, tax-exempt bonds, subsidized energy 
     financing, and other credits) is amended--
       (1) by striking clause (ii),
       (2) by redesignating clauses (iii) and (iv) as clauses (ii) 
     and (iii),
       (3) by inserting ``(other than any loan, debt, or other 
     obligation incurred under subchapter I of chapter 31 of title 
     7 of the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
     seq.), as in effect on the date of the enactment of the 
     Energy Tax Incentives Act of 2002)'' after ``project'' in 
     clause (ii) (as so redesignated),
       (4) by adding at the end the following new sentence: ``This 
     paragraph shall not apply with respect to any facility 
     described in subsection (c)(3)(B)(i)(II).'', and
       (5) by striking ``tax-exempt bonds,'' in the heading and 
     inserting ``certain''.
       (c) 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.

     SEC. 1905. CREDIT FOR ELECTRICITY PRODUCED FROM SMALL 
                   IRRIGATION POWER.

       (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 inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(H) small irrigation power.''.
       (b) Qualified Facility.--Section 45(c)(3) (relating to 
     qualified facility), as amended by this Act, is amended by 
     adding at the end the following new subparagraph:
       ``(G) Small irrigation power facility.--In the case of a 
     facility using small irrigation power to produce electricity, 
     the term `qualified facility' means any facility owned by the 
     taxpayer which is originally placed in service after date of 
     the enactment of this subparagraph and before January 1, 
     2007.''.
       (c) Definition.--Section 45(c), as amended by this Act, is 
     amended by redesignating paragraph (8) as paragraph (9) and 
     by inserting after paragraph (7) the following new paragraph:
       ``(8) Small irrigation power.--The term `small irrigation 
     power' means power--
       ``(A) generated without any dam or impoundment of water 
     through an irrigation system canal or ditch, and
       ``(B) the installed capacity of which is less than 5 
     megawatts.''.
       (d) 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.

     SEC. 1906. 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 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.''.
       (d) 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.

       TITLE XX--ALTERNATIVE MOTOR VEHICLES AND FUELS INCENTIVES

     SEC. 2001. ALTERNATIVE MOTOR VEHICLE CREDIT.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to foreign tax credit, etc.) is amended 
     by adding at the end the following new section:

     ``SEC. 30B. ALTERNATIVE MOTOR VEHICLE CREDIT.

       ``(a) Allowance of Credit.--There shall be allowed as a 
     credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of--
       ``(1) the new qualified fuel cell motor vehicle credit 
     determined under subsection (b),
       ``(2) the new qualified hybrid motor vehicle credit 
     determined under subsection (c), and
       ``(3) the new qualified alternative fuel motor vehicle 
     credit determined under subsection (d).
       ``(b) New Qualified Fuel Cell Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified fuel cell motor vehicle credit determined under 
     this subsection with respect to a new qualified fuel cell 
     motor vehicle placed in service by the taxpayer during the 
     taxable year is--
       ``(A) $4,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,

[[Page S3765]]

       ``(C) $20,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(2) Increase for fuel efficiency.--
       ``(A) In general.--The amount determined under paragraph 
     (1)(A) with respect to a new qualified fuel cell motor 
     vehicle which is a passenger automobile or light truck shall 
     be increased by--
       ``(i) $1,000, if such vehicle achieves at least 150 percent 
     but less than 175 percent of the 2000 model year city fuel 
     economy,
       ``(ii) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2000 model year city 
     fuel economy,
       ``(iii) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2000 model year city 
     fuel economy,
       ``(iv) $2,500, if such vehicle achieves at least 225 
     percent but less than 250 percent of the 2000 model year city 
     fuel economy,
       ``(v) $3,000, if such vehicle achieves at least 250 percent 
     but less than 275 percent of the 2000 model year city fuel 
     economy,
       ``(vi) $3,500, if such vehicle achieves at least 275 
     percent but less than 300 percent of the 2000 model year city 
     fuel economy, and
       ``(vii) $4,000, if such vehicle achieves at least 300 
     percent of the 2000 model year city fuel economy.
       ``(B) 2000 model year city fuel economy.--For purposes of 
     subparagraph (A), the 2000 model year city fuel economy with 
     respect to a vehicle shall be determined in accordance with 
     the following tables:
       ``(i) In the case of a passenger automobile:
``If vehicle inertia weight clThe 2000 model year city fuel economy is:
1,500 or 1,750 lbs............................................43.7 mpg 
2,000 lbs.....................................................38.3 mpg 
2,250 lbs.....................................................34.1 mpg 
2,500 lbs.....................................................30.7 mpg 
2,750 lbs.....................................................27.9 mpg 
3,000 lbs.....................................................25.6 mpg 
3,500 lbs.....................................................22.0 mpg 
4,000 lbs.....................................................19.3 mpg 
4,500 lbs.....................................................17.2 mpg 
5,000 lbs.....................................................15.5 mpg 
5,500 lbs.....................................................14.1 mpg 
6,000 lbs.....................................................12.9 mpg 
6,500 lbs.....................................................11.9 mpg 
7,000 to 8,500 lbs............................................11.1 mpg.
       ``(ii) In the case of a light truck:

``If vehicle inertia weight clThe 2000 model year city fuel economy is:
1,500 or 1,750 lbs............................................37.6 mpg 
2,000 lbs.....................................................33.7 mpg 
2,250 lbs.....................................................30.6 mpg 
2,500 lbs.....................................................28.0 mpg 
2,750 lbs.....................................................25.9 mpg 
3,000 lbs.....................................................24.1 mpg 
3,500 lbs.....................................................21.3 mpg 
4,000 lbs.....................................................19.0 mpg 
4,500 lbs.....................................................17.3 mpg 
5,000 lbs.....................................................15.8 mpg 
5,500 lbs.....................................................14.6 mpg 
6,000 lbs.....................................................13.6 mpg 
6,500 lbs.....................................................12.8 mpg 
7,000 to 8,500 lbs............................................12.0 mpg.
       ``(C) Vehicle inertia weight class.--For purposes of 
     subparagraph (B), the term `vehicle inertia weight class' has 
     the same meaning as when defined in regulations prescribed by 
     the Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(3) New qualified fuel cell motor vehicle.--For purposes 
     of this subsection, the term `new qualified fuel cell motor 
     vehicle' means a motor vehicle--
       ``(A) which is propelled by power derived from one or more 
     cells which convert chemical energy directly into electricity 
     by combining oxygen with hydrogen fuel which is stored on 
     board the vehicle in any form and may or may not require 
     reformation prior to use,
       ``(B) which, in the case of a passenger automobile or light 
     truck--
       ``(i) for 2002 and later model vehicles, has received a 
     certificate of conformity under the Clean Air Act and meets 
     or exceeds the equivalent qualifying California low emission 
     vehicle standard under section 243(e)(2) of the Clean Air Act 
     for that make and model year, and
       ``(ii) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds the Bin 5 Tier 
     II emission level established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(c) New Qualified Hybrid Motor Vehicle Credit.--
       ``(1) In general.--For purposes of subsection (a), the new 
     qualified hybrid motor vehicle credit determined under this 
     subsection with respect to a new qualified hybrid motor 
     vehicle placed in service by the taxpayer during the taxable 
     year is the credit amount determined under paragraph (2).
       ``(2) Credit amount.--
       ``(A) In general.--The credit amount determined under this 
     paragraph shall be determined in accordance with the 
     following tables:
       ``(i) In the case of a new qualified hybrid motor vehicle 
     which is a passenger automobile or light truck and which 
     provides the following percentage of the maximum available 
     power:

``If percentage of the maximum available power is:The credit amount is:
  At least 5 percent but less than 10 percent.................$250 ....

  At least 10 percent but less than 20 percent................$500 ....

  At least 20 percent but less than 30 percent................$750 ....

  At least 30 percent.......................................$1,000.....

       ``(ii) In the case of a new qualified hybrid motor vehicle 
     which is a heavy duty hybrid motor vehicle and which provides 
     the following percentage of the maximum available power:

       ``(I) If such vehicle has a gross vehicle weight rating of 
     not more than 14,000 pounds:

``If percentage of the maximum available power is:The credit amount is:
  At least 20 percent but less than 30 percent..............$1,000 ....

  At least 30 percent but less than 40 percent..............$1,750 ....

  At least 40 percent but less than 50 percent..............$2,000 ....

  At least 50 percent but less than 60 percent..............$2,250 ....

  At least 60 percent.......................................$2,500.....

       ``(II) If such vehicle has a gross vehicle weight rating of 
     more than 14,000 but not more than 26,000 pounds:

``If percentage of the maximum available power is:The credit amount is:
  At least 20 percent but less than 30 percent..............$4,000 ....

  At least 30 percent but less than 40 percent..............$4,500 ....

  At least 40 percent but less than 50 percent..............$5,000 ....

  At least 50 percent but less than 60 percent..............$5,500 ....

  At least 60 percent.......................................$6,000.....

       ``(III) If such vehicle has a gross vehicle weight rating 
     of more than 26,000 pounds:

``If percentage of the maximum available power is:The credit amount is:
  At least 20 percent but less than 30 percent..............$6,000 ....

  At least 30 percent but less than 40 percent..............$7,000 ....

  At least 40 percent but less than 50 percent..............$8,000 ....

  At least 50 percent but less than 60 percent..............$9,000 ....

  At least 60 percent......................................$10,000.....

       ``(B) Increase for fuel efficiency.--
       ``(i) Amount.--The amount determined under subparagraph 
     (A)(i) with respect to a new qualified hybrid motor vehicle 
     which is a passenger automobile or light truck shall be 
     increased by--

       ``(I) $500, if such vehicle achieves at least 125 percent 
     but less than 150 percent of the 2000 model year city fuel 
     economy,
       ``(II) $1,000, if such vehicle achieves at least 150 
     percent but less than 175 percent of the 2000 model year city 
     fuel economy,
       ``(III) $1,500, if such vehicle achieves at least 175 
     percent but less than 200 percent of the 2000 model year city 
     fuel economy,
       ``(IV) $2,000, if such vehicle achieves at least 200 
     percent but less than 225 percent of the 2000 model year city 
     fuel economy,
       ``(V) $2,500, if such vehicle achieves at least 225 percent 
     but less than 250 percent of the 2000 model year city fuel 
     economy, and
       ``(VI) $3,000, if such vehicle achieves at least 250 
     percent of the 2000 model year city fuel economy.

       ``(ii) 2000 model year city fuel economy.--For purposes of 
     clause (i), the 2000 model year city fuel economy with 
     respect to a vehicle shall be determined using the tables 
     provided in subsection (b)(2)(B) with respect to such 
     vehicle.
       ``(C) Increase for accelerated emissions performance.--The 
     amount determined under subparagraph (A)(ii) with respect to 
     an applicable heavy duty hybrid motor vehicle shall be 
     increased by the increased credit amount determined in 
     accordance with the following tables:
       ``(i) In the case of a vehicle which has a gross vehicle 
     weight rating of not more than 14,000 pounds:

The increased credit amount is:
  2002......................................................$3,500 ....

  2003......................................................$3,000 ....

  2004......................................................$2,500 ....

  2005......................................................$2,000 ....

  2006......................................................$1,500.....

       ``(ii) In the case of a vehicle which has a gross vehicle 
     weight rating of more than 14,000 pounds but not more than 
     26,000 pounds:

The increased credit amount is:
  2002......................................................$9,000 ....

  2003......................................................$7,750 ....

  2004......................................................$6,500 ....

  2005......................................................$5,250 ....

  2006......................................................$4,000.....

       ``(iii) In the case of a vehicle which has a gross vehicle 
     weight rating of more than 26,000 pounds:

The increased credit amount is:
  2002.....................................................$14,000 ....

  2003.....................................................$12,000 ....

  2004.....................................................$10,000 ....

  2005......................................................$8,000 ....

  2006......................................................$6,000.....

       ``(D) Definitions.--
       ``(i) Applicable heavy duty hybrid motor vehicle.--For 
     purposes of subparagraph (C), the term `applicable heavy duty 
     hybrid motor vehicle' means a heavy duty hybrid motor vehicle 
     which is powered by an internal combustion or heat engine 
     which is certified as meeting the emission standards set in 
     the regulations prescribed by the Administrator of the 
     Environmental Protection Agency for 2007 and later model year 
     diesel heavy duty engines, or for 2008 and later model year 
     ottocycle heavy duty engines, as applicable.
       ``(ii) Heavy duty hybrid motor vehicle.--For purposes of 
     this paragraph, the term `heavy

[[Page S3766]]

     duty hybrid motor vehicle' means a new qualified hybrid motor 
     vehicle which has a gross vehicle weight rating of more than 
     10,000 pounds and draws propulsion energy from both of the 
     following onboard sources of stored energy:

       ``(I) An internal combustion or heat engine using 
     consumable fuel which, for 2002 and later model vehicles, has 
     received a certificate of conformity under the Clean Air Act 
     and meets or exceeds a level of not greater than 3.0 grams 
     per brake horsepower-hour of oxides of nitrogen and 0.01 per 
     brake horsepower-hour of particulate matter.
       ``(II) A rechargeable energy storage system.

       ``(iii) Maximum available power.--

       ``(I) Passenger automobile or light truck.--For purposes of 
     subparagraph (A)(i), the term `maximum available power' means 
     the maximum power available from the rechargeable energy 
     storage system, during a standard 10 second pulse power or 
     equivalent test, divided by such maximum power and the SAE 
     net power of the heat engine.
       ``(II) Heavy duty hybrid motor vehicle.--For purposes of 
     subparagraph (A)(ii), the term `maximum available power' 
     means the maximum power available from the rechargeable 
     energy storage system, during a standard 10 second pulse 
     power or equivalent test, divided by the vehicle's total 
     traction power. The term `total traction power' means the sum 
     of the peak power from the rechargeable energy storage system 
     and the heat engine peak power of the vehicle, except that if 
     such storage system is the sole means by which the vehicle 
     can be driven, the total traction power is the peak power of 
     such storage system.

       ``(3) New qualified hybrid motor vehicle.--For purposes of 
     this subsection, the term `new qualified hybrid motor 
     vehicle' means a motor vehicle--
       ``(A) which draws propulsion energy from onboard sources of 
     stored energy which are both--
       ``(i) an internal combustion or heat engine using 
     combustible fuel, and
       ``(ii) a rechargeable energy storage system,
       ``(B) which, in the case of a passenger automobile or light 
     truck--
       ``(i) for 2002 and later model vehicles, has received a 
     certificate of conformity under the Clean Air Act and meets 
     or exceeds the equivalent qualifying California low emission 
     vehicle standard under section 243(e)(2) of the Clean Air Act 
     for that make and model year, and
       ``(ii) for 2004 and later model vehicles, has received a 
     certificate that such vehicle meets or exceeds the Bin 5 Tier 
     II emission level established in regulations prescribed by 
     the Administrator of the Environmental Protection Agency 
     under section 202(i) of the Clean Air Act for that make and 
     model year vehicle,
       ``(C) the original use of which commences with the 
     taxpayer,
       ``(D) which is acquired for use or lease by the taxpayer 
     and not for resale, and
       ``(E) which is made by a manufacturer.
       ``(d) New Qualified Alternative Fuel Motor Vehicle 
     Credit.--
       ``(1) Allowance of credit.--Except as provided in paragraph 
     (5), the credit determined under this subsection is an amount 
     equal to the applicable percentage of the incremental cost of 
     any new qualified alternative fuel motor vehicle placed in 
     service by the taxpayer during the taxable year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage with respect to any new 
     qualified alternative fuel motor vehicle is--
       ``(A) 40 percent, plus
       ``(B) 30 percent, if such vehicle--
       ``(i) has received a certificate of conformity under the 
     Clean Air Act and meets or exceeds the most stringent 
     standard available for certification under the Clean Air Act 
     for that make and model year vehicle (other than a zero 
     emission standard), or
       ``(ii) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the most 
     stringent standard available for certification under the 
     State laws of California (enacted in accordance with a waiver 
     granted under section 209(b) of the Clean Air Act) for that 
     make and model year vehicle (other than a zero emission 
     standard).
       ``(3) Incremental cost.--For purposes of this subsection, 
     the incremental cost of any new qualified alternative fuel 
     motor vehicle is equal to the amount of the excess of the 
     manufacturer's suggested retail price for such vehicle over 
     such price for a gasoline or diesel fuel motor vehicle of the 
     same model, to the extent such amount does not exceed--
       ``(A) $5,000, if such vehicle has a gross vehicle weight 
     rating of not more than 8,500 pounds,
       ``(B) $10,000, if such vehicle has a gross vehicle weight 
     rating of more than 8,500 pounds but not more than 14,000 
     pounds,
       ``(C) $25,000, if such vehicle has a gross vehicle weight 
     rating of more than 14,000 pounds but not more than 26,000 
     pounds, and
       ``(D) $40,000, if such vehicle has a gross vehicle weight 
     rating of more than 26,000 pounds.
       ``(4) Qualified alternative fuel motor vehicle defined.--
     For purposes of this subsection--
       ``(A) In general.--The term `qualified alternative fuel 
     motor vehicle' means any motor vehicle--
       ``(i) which is only capable of operating on an alternative 
     fuel,
       ``(ii) the original use of which commences with the 
     taxpayer,
       ``(iii) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(iv) which is made by a manufacturer.
       ``(B) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol.
       ``(5) Credit for mixed-fuel vehicles.--
       ``(A) In general.--In the case of a mixed-fuel vehicle 
     placed in service by the taxpayer during the taxable year, 
     the credit determined under this subsection is an amount 
     equal to--
       ``(i) in the case of a 75/25 mixed-fuel vehicle, 70 percent 
     of the credit which would have been allowed under this 
     subsection if such vehicle was a qualified alternative fuel 
     motor vehicle, and
       ``(ii) in the case of a 90/10 mixed-fuel vehicle, 90 
     percent of the credit which would have been allowed under 
     this subsection if such vehicle was a qualified alternative 
     fuel motor vehicle.
       ``(B) Mixed-fuel vehicle.--For purposes of this subsection, 
     the term `mixed-fuel vehicle' means any motor vehicle 
     described in subparagraph (C) or (D) of paragraph (3), 
     which--
       ``(i) is certified by the manufacturer as being able to 
     perform efficiently in normal operation on a combination of 
     an alternative fuel and a petroleum-based fuel,
       ``(ii) either--

       ``(I) has received a certificate of conformity under the 
     Clean Air Act, or
       ``(II) has received an order certifying the vehicle as 
     meeting the same requirements as vehicles which may be sold 
     or leased in California and meets or exceeds the low emission 
     vehicle standard under section 88.105-94 of title 40, Code of 
     Federal Regulations, for that make and model year vehicle,

       ``(iii) the original use of which commences with the 
     taxpayer,
       ``(iv) which is acquired by the taxpayer for use or lease, 
     but not for resale, and
       ``(v) which is made by a manufacturer.
       ``(C) 75/25 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `75/25 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 75 percent 
     alternative fuel and not more than 25 percent petroleum-based 
     fuel.
       ``(D) 90/10 mixed-fuel vehicle.--For purposes of this 
     subsection, the term `90/10 mixed-fuel vehicle' means a 
     mixed-fuel vehicle which operates using at least 90 percent 
     alternative fuel and not more than 10 percent petroleum-based 
     fuel.
       ``(e) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(f) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Consumable fuel.--The term `consumable fuel' means 
     any solid, liquid, or gaseous matter which releases energy 
     when consumed by an auxiliary power unit.
       ``(2) Motor vehicle.--The term `motor vehicle' has the 
     meaning given such term by section 30(c)(2).
       ``(3) City fuel economy.--The city fuel economy with 
     respect to any vehicle shall be measured in a manner which is 
     substantially similar to the manner city fuel economy is 
     measured in accordance with procedures under part 600 of 
     subchapter Q of chapter I of title 40, Code of Federal 
     Regulations, as in effect on the date of the enactment of 
     this section.
       ``(4) Other terms.--The terms `automobile', `passenger 
     automobile', `light truck', and `manufacturer' have the 
     meanings given such terms in regulations prescribed by the 
     Administrator of the Environmental Protection Agency for 
     purposes of the administration of title II of the Clean Air 
     Act (42 U.S.C. 7521 et seq.).
       ``(5)  Reduction in basis.--For purposes of this subtitle, 
     the basis of any property for which a credit is allowable 
     under subsection (a) shall be reduced by the amount of such 
     credit so allowed (determined without regard to subsection 
     (e)).
       ``(6) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter--
       ``(A) for any incremental cost taken into account in 
     computing the amount of the credit determined under 
     subsection (d) shall be reduced by the amount of such credit 
     attributable to such cost, and
       ``(B) with respect to a vehicle described under subsection 
     (b) or (c), shall be reduced by the amount of credit allowed 
     under subsection (a) for such vehicle for the taxable year.
       ``(7) Property used by tax-exempt entities.--In the case of 
     a credit amount which is allowable with respect to a motor 
     vehicle which is acquired by an entity exempt from tax under 
     this chapter, the person which sells or leases such vehicle 
     to the entity shall be treated as the taxpayer with respect 
     to the vehicle for purposes of this section and the credit 
     shall be allowed to such person, but only if the person 
     clearly discloses to the entity at the time of any sale or 
     lease the specific amount of any credit otherwise allowable 
     to the entity under this section.
       ``(8) Recapture.--The Secretary shall, by regulations, 
     provide for recapturing the benefit of any credit allowable 
     under subsection (a) with respect to any property which 
     ceases to be property eligible for such credit (including 
     recapture in the case of a lease period of less than the 
     economic life of a vehicle).
       ``(9) Property used outside united states, etc., not 
     qualified.--No credit shall be allowed under subsection (a) 
     with respect to any property referred to in section 50(b) or 
     with respect to the portion of the cost of any property taken 
     into account under section 179.
       ``(10) Election to not take credit.--No credit shall be 
     allowed under subsection (a) for any vehicle if the taxpayer 
     elects to not have this section apply to such vehicle.
       ``(11) Carryback and carryforward allowed.--

[[Page S3767]]

       ``(A) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (e) for such taxable year (in 
     this paragraph referred to as the `unused credit year'), such 
     excess shall be allowed as a credit carryback for each of the 
     3 taxable years beginning after September 30, 2002, which 
     precede the unused credit year and a credit carryforward for 
     each of the 20 taxable years which succeed the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(12) Interaction with air quality and motor vehicle 
     safety standards.--Unless otherwise provided in this section, 
     a motor vehicle shall not be considered eligible for a credit 
     under this section unless such vehicle is in compliance 
     with--
       ``(A) the applicable provisions of the Clean Air Act for 
     the applicable make and model year of the vehicle (or 
     applicable air quality provisions of State law in the case of 
     a State which has adopted such provision under a waiver under 
     section 209(b) of the Clean Air Act), and
       ``(B) the motor vehicle safety provisions of sections 30101 
     through 30169 of title 49, United States Code.
       ``(g) Regulations.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary shall promulgate such regulations as necessary to 
     carry out the provisions of this section.
       ``(2) Coordination in prescription of certain 
     regulations.--The Secretary of the Treasury, in coordination 
     with the Secretary of Transportation and the Administrator of 
     the Environmental Protection Agency, shall prescribe such 
     regulations as necessary to determine whether a motor vehicle 
     meets the requirements to be eligible for a credit under this 
     section.
       ``(h) Termination.--This section shall not apply to any 
     property purchased after--
       ``(1) in the case of a new qualified fuel cell motor 
     vehicle (as described in subsection (b)), December 31, 2011, 
     and
       ``(2) in the case of any other property, December 31, 
     2006.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a) is amended by striking ``and'' at the 
     end of paragraph (27), by striking the period at the end of 
     paragraph (28) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(29) to the extent provided in section 30B(f)(5).''.
       (2) Section 55(c)(2) is amended by inserting ``30B(e),'' 
     after ``30(b)(3)''.
       (3) Section 6501(m) is amended by inserting ``30B(f)(10),'' 
     after ``30(d)(4),''.
       (4) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 30A the following new item:

``Sec. 30B. Alternative motor vehicle credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 30, 
     2002, in taxable years ending after such date.

     SEC. 2002. MODIFICATION OF CREDIT FOR QUALIFIED ELECTRIC 
                   VEHICLES.

       (a) Amount of Credit.--
       (1) In general.--Section 30(a) (relating to allowance of 
     credit) is amended by striking ``10 percent of''.
       (2) Limitation of credit according to type of vehicle.--
     Section 30(b) (relating to limitations) is amended--
       (A) by striking paragraphs (1) and (2) and inserting the 
     following new paragraph:
       ``(1) Limitation according to type of vehicle.--The amount 
     of the credit allowed under subsection (a) for any vehicle 
     shall not exceed the greatest of the following amounts 
     applicable to such vehicle:
       ``(A) In the case of a vehicle which conforms to the Motor 
     Vehicle Safety Standard 500 prescribed by the Secretary of 
     Transportation, as in effect on the date of the enactment of 
     the Energy Tax Incentives Act of 2002, the lesser of--
       ``(i) 10 percent of the manufacturer's suggested retail 
     price of the vehicle, or
       ``(ii) $1,500.
       ``(B) In the case of a vehicle not described in 
     subparagraph (A) with a gross vehicle weight rating not 
     exceeding 8,500 pounds--
       ``(i) $3,500, or
       ``(ii) $6,000, if such vehicle is--

       ``(I) capable of a driving range of at least 100 miles on a 
     single charge of the vehicle's rechargeable batteries as 
     measured pursuant to the urban dynamometer schedules under 
     appendix I to part 86 of title 40, Code of Federal 
     Regulations, or
       ``(II) capable of a payload capacity of at least 1,000 
     pounds.

       ``(C) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 8,500 but not exceeding 14,000 pounds, 
     $10,000.
       ``(D) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 14,000 but not exceeding 26,000 pounds, 
     $20,000.
       ``(E) In the case of a vehicle with a gross vehicle weight 
     rating exceeding 26,000 pounds, $40,000.'', and
       (B) by redesignating paragraph (3) as paragraph (2).
       (3) Conforming amendments.--
       (A) Section 53(d)(1)(B)(iii) is amended by striking 
     ``section 30(b)(3)(B)'' and inserting ``section 
     30(b)(2)(B)''.
       (3) Section 55(c)(2), as amended by this Act, is amended by 
     striking ``30(b)(3)'' and inserting ``30(b)(2)''.
       (b) Qualified Battery Electric Vehicle.--
       (1) In general.--Section 30(c)(1)(A) (defining qualified 
     electric vehicle) is amended to read as follows:
       ``(A) which is--
       ``(i) operated solely by use of a battery or battery pack, 
     or
       ``(ii) powered primarily through the use of an electric 
     battery or battery pack using a flywheel or capacitor which 
     stores energy produced by an electric motor through 
     regenerative braking to assist in vehicle operation,''.
       (2) Leased vehicles.--Section 30(c)(1)(C) is amended by 
     inserting ``or lease'' after ``use''.
       (3) Conforming amendments.--
       (A) Subsections (a), (b)(2), and (c) of section 30 are each 
     amended by inserting ``battery'' after ``qualified'' each 
     place it appears.
       (B) The heading of subsection (c) of section 30 is amended 
     by inserting ``Battery'' after ``Qualified''.
       (C) The heading of section 30 is amended by inserting 
     ``battery'' after ``qualified''.
       (D) The item relating to section 30 in the table of 
     sections for subpart B of part IV of subchapter A of chapter 
     1 is amended by inserting ``battery'' after ``qualified''.
       (E) Section 179A(c)(3) is amended by inserting ``battery'' 
     before ``electric''.
       (F) The heading of paragraph (3) of section 179A(c) is 
     amended by inserting ``battery'' before ``electric''.
       (c) Additional Special Rules.--Section 30(d) (relating to 
     special rules) is amended by adding at the end the following 
     new paragraphs:
       ``(5) No double benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any cost taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such cost.
       ``(6) Property used by tax-exempt entities.--In the case of 
     a credit amount which is allowable with respect to a vehicle 
     which is acquired by an entity exempt from tax under this 
     chapter, the person which sells or leases such vehicle to the 
     entity shall be treated as the taxpayer with respect to the 
     vehicle for purposes of this section and the credit shall be 
     allowed to such person, but only if the person clearly 
     discloses to the entity at the time of any sale or lease the 
     specific amount of any credit otherwise allowable to the 
     entity under this section.
       ``(7) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (b)(2) for such taxable year (in 
     this paragraph referred to as the `unused credit year'), such 
     excess shall be allowed as a credit carryback for each of the 
     3 taxable years beginning after September 30, 2002, which 
     precede the unused credit year and a credit carryforward for 
     each of the 20 taxable years which succeed the unused credit 
     year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 30, 
     2002, in taxable years ending after such date.

     SEC. 2003. CREDIT FOR INSTALLATION OF ALTERNATIVE FUELING 
                   STATIONS.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 (relating to foreign tax credit, etc.), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

     ``SEC. 30C. CLEAN-FUEL VEHICLE REFUELING PROPERTY CREDIT.

       ``(a) Credit Allowed.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to 50 percent of the amount paid or incurred 
     by the taxpayer during the taxable year for the installation 
     of qualified clean-fuel vehicle refueling property.
       ``(b) Limitation.--The credit allowed under subsection 
     (a)--
       ``(1) with respect to any retail clean-fuel vehicle 
     refueling property, shall not exceed $30,000, and
       ``(2) with respect to any residential clean-fuel vehicle 
     refueling property, shall not exceed $1,000.
       ``(c) Year Credit Allowed.--The credit allowed under 
     subsection (a) shall be allowed in the taxable year in which 
     the qualified clean-fuel vehicle refueling property is placed 
     in service by the taxpayer.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified clean-fuel vehicle refueling property.--The 
     term `qualified clean-fuel vehicle refueling property' has 
     the same meaning given such term by section 179A(d).
       ``(2) Residential clean-fuel vehicle refueling property.--
     The term `residential clean-fuel vehicle refueling property' 
     means qualified clean-fuel vehicle refueling property which 
     is installed on property which is used as the principal 
     residence (within the meaning of section 121) of the 
     taxpayer.
       ``(3) Retail clean-fuel vehicle refueling property.--The 
     term `retail clean-fuel vehicle refueling property' means 
     qualified clean-fuel vehicle refueling property which is 
     installed on property (other than property described in 
     paragraph (2)) used in a trade or business of the taxpayer.
       ``(e) Application With Other Credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(1) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, 30, and 30B, over
       ``(2) the tentative minimum tax for the taxable year.
       ``(f) Basis Reduction.--For purposes of this title, the 
     basis of any property shall be reduced by the portion of the 
     cost of such property taken into account under subsection 
     (a).

[[Page S3768]]

       ``(g) No Double Benefit.--No deduction shall be allowed 
     under section 179A with respect to any property with respect 
     to which a credit is allowed under subsection (a).
       ``(h) Refueling Property Installed for Tax-Exempt 
     Entities.--In the case of qualified clean-fuel vehicle 
     refueling property installed on property owned or used by an 
     entity exempt from tax under this chapter, the person which 
     installs such refueling property for the entity shall be 
     treated as the taxpayer with respect to the refueling 
     property for purposes of this section (and such refueling 
     property shall be treated as retail clean-fuel vehicle 
     refueling property) and the credit shall be allowed to such 
     person, but only if the person clearly discloses to the 
     entity in any installation contract the specific amount of 
     the credit allowable under this section.
       ``(i) Carryforward Allowed.--
       ``(1) In general.--If the credit amount allowable under 
     subsection (a) for a taxable year exceeds the amount of the 
     limitation under subsection (e) for such taxable year 
     (referred to as the `unused credit year' in this subsection), 
     such excess shall be allowed as a credit carryforward for 
     each of the 20 taxable years following the unused credit 
     year.
       ``(2) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryforward under 
     paragraph (1).
       ``(j) Special Rules.--Rules similar to the rules of 
     paragraphs (4) and (5) of section 179A(e) shall apply.
       ``(k) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to carry out the provisions of this 
     section.
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2006.''.
       (b) Incentive for Production of Hydrogen at Qualified 
     Clean-Fuel Vehicle Refueling Property.--Section 179A(d) 
     (defining qualified clean-fuel vehicle refueling property) is 
     amended by adding at the end the following new flush 
     sentence:
     ``In the case of clean-burning fuel which is hydrogen 
     produced from another clean-burning fuel, paragraph (3)(A) 
     shall be applied by substituting `production, storage, or 
     dispensing' for `storage or dispensing' both places it 
     appears.''.
       (c) Conforming Amendments.--(1) Section 1016(a), as amended 
     by this Act, is amended by striking ``and'' at the end of 
     paragraph (28), by striking the period at the end of 
     paragraph (29) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(30) to the extent provided in section 30C(f).''.
       (2) Section 55(c)(2), as amended by this Act, is amended by 
     inserting ``30C(e),'' after ``30B(e)''.
       (3) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 30B the 
     following new item:

``Sec. 30C. Clean-fuel vehicle refueling property credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after September 30, 
     2002, in taxable years ending after such date.

     SEC. 2004. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits) is amended 
     by inserting after section 40 the following new section:

     ``SEC. 40A. CREDIT FOR RETAIL SALE OF ALTERNATIVE FUELS AS 
                   MOTOR VEHICLE FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     alternative fuel retail sales credit for any taxable year is 
     the applicable amount for each gasoline gallon equivalent of 
     alternative fuel sold at retail by the taxpayer during such 
     year as a fuel to propel any qualified motor vehicle.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Applicable amount.--The term `applicable amount' 
     means the amount determined in accordance with the following 
     table:

``In the case of any taxable year
  ending in--                                The applicable amount is--
2002 and 2003.................................................30 cents 
2004..........................................................40 cents 
2005 and 2006.................................................50 cents.
       ``(2) Alternative fuel.--The term `alternative fuel' means 
     compressed natural gas, liquefied natural gas, liquefied 
     petroleum gas, hydrogen, and any liquid at least 85 percent 
     of the volume of which consists of methanol or ethanol.
       ``(3) Gasoline gallon equivalent.--The term `gasoline 
     gallon equivalent' means, with respect to any alternative 
     fuel, the amount (determined by the Secretary) of such fuel 
     having a Btu content of 114,000.
       ``(4) Qualified motor vehicle.--The term `qualified motor 
     vehicle' means any motor vehicle (as defined in section 
     30(c)(2)) which meets any applicable Federal or State 
     emissions standards with respect to each fuel by which such 
     vehicle is designed to be propelled.
       ``(5) Sold at retail.--
       ``(A) In general.--The term `sold at retail' means the 
     sale, for a purpose other than resale, after manufacture, 
     production, or importation.
       ``(B) Use treated as sale.--If any person uses alternative 
     fuel (including any use after importation) as a fuel to 
     propel any qualified alternative fuel motor vehicle (as 
     defined in section 30B(d)(4)) before such fuel is sold at 
     retail, then such use shall be treated in the same manner as 
     if such fuel were sold at retail as a fuel to propel such a 
     vehicle by such person.
       ``(c) No Double Benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any fuel taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such fuel.
       ``(d) Pass-Thru in the Case of Estates and Trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Termination.--This section shall not apply to any 
     fuel sold at retail after December 31, 2006.''.
       (b) Credit Treated as Business Credit.--Section 38(b) 
     (relating to current year business credit) is amended by 
     striking ``plus'' at the end of paragraph (14), by striking 
     the period at the end of paragraph (15) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(16) the alternative fuel retail sales credit determined 
     under section 40A(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules) is amended by adding at the end the 
     following new paragraph:
       ``(11) No carryback of section 40a credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the alternative fuel 
     retail sales credit determined under section 40A(a) may be 
     carried back to a taxable year ending before January 1, 
     2002.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1 is amended by 
     inserting after the item relating to section 40 the following 
     new item:

``Sec. 40A. Credit for retail sale of alternative fuels as motor 
              vehicle fuel.''

       (e) Effective Date.--The amendments made by this section 
     shall apply to fuel sold at retail after September 30, 2002, 
     in taxable years ending after such date.

     SEC. 2005. SMALL ETHANOL PRODUCER CREDIT.

       (a) Allocation of Alcohol Fuels Credit to Patrons of a 
     Cooperative.--Section 40(g) (relating to alcohol used as 
     fuel) is amended by adding at the end the following new 
     paragraph:
       ``(6) Allocation of small ethanol producer credit to 
     patrons of cooperative.--
       ``(A) Election to allocate.--
       ``(i) In general.--In the case of a cooperative 
     organization described in section 1381(a), any portion of the 
     credit determined under subsection (a)(3) for the taxable 
     year may, at the election of the organization, be apportioned 
     pro rata among patrons of the organization on the basis of 
     the quantity or value of business done with or for such 
     patrons for the taxable year.
       ``(ii) Form and effect of election.--An election under 
     clause (i) for any taxable year shall be made on a timely 
     filed return for such year. Such election, once made, shall 
     be irrevocable for such taxable year.
       ``(B) Treatment of organizations and patrons.--The amount 
     of the credit apportioned to patrons under subparagraph (A)--
       ``(i) shall not be included in the amount determined under 
     subsection (a) with respect to the organization for the 
     taxable year,

       ``(ii) shall be included in the amount determined under 
     subsection (a) for the taxable year of each patron for which 
     the patronage dividends for the taxable year described in 
     subparagraph (A) are included in gross income, and
       ``(iii) shall be included in gross income of such patrons 
     for the taxable year in the manner and to the extent provided 
     in section 87.
       ``(C) Special rules for decrease in credits for taxable 
     year.--If the amount of the credit of a cooperative 
     organization determined under subsection (a)(3) for a taxable 
     year is less than the amount of such credit shown on the 
     return of the cooperative organization for such year, an 
     amount equal to the excess of--
       ``(i) such reduction, over
       ``(ii) the amount not apportioned to such patrons under 
     subparagraph (A) for the taxable year,
     shall be treated as an increase in tax imposed by this 
     chapter on the organization. Such increase shall not be 
     treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit under this chapter or 
     for purposes of section 55.''.
       (b) Improvements to Small Ethanol Producer Credit.--
       (1) Definition of small ethanol producer.--Section 40(g) 
     (relating to definitions and special rules for eligible small 
     ethanol producer credit) is amended by striking 
     ``30,000,000'' each place it appears and inserting 
     ``60,000,000''.
       (2) Small ethanol producer credit not a passive activity 
     credit.--Clause (i) of section 469(d)(2)(A) is amended by 
     striking ``subpart D'' and inserting ``subpart D, other than 
     section 40(a)(3),''.
       (3) Allowing credit against entire regular tax and minimum 
     tax.--
       (A) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax), as amended by section 
     301(b) of the Job Creation and Worker Assistance Act of 2002, 
     is amended by redesignating paragraph (4) as paragraph (5) 
     and by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Special rules for small ethanol producer credit.--
       ``(A) In general.--In the case of the small ethanol 
     producer credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--

       ``(I) the amounts in subparagraphs (A) and (B) thereof 
     shall be treated as being zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the small 
     ethanol producer credit).

[[Page S3769]]

       ``(B) Small ethanol producer credit.--For purposes of this 
     subsection, the term `small ethanol producer credit' means 
     the credit allowable under subsection (a) by reason of 
     section 40(a)(3).''.
       (B) Conforming amendments.--Subclause (II) of section 
     38(c)(2)(A)(ii), as amended by section 301(b)(2) of the Job 
     Creation and Worker Assistance Act of 2002, and subclause 
     (II) of section 38(c)(3)(A)(ii), as added by section 
     301(b)(1) of such Act, are each amended by inserting ``or the 
     small ethanol producer credit'' after ``employee credit''.
       (4) Small ethanol producer credit not added back to income 
     under section 87.--Section 87 (relating to income inclusion 
     of alcohol fuel credit) is amended to read as follows:

     ``SEC. 87. ALCOHOL FUEL CREDIT.

       ``Gross income includes an amount equal to the sum of--
       ``(1) the amount of the alcohol mixture credit determined 
     with respect to the taxpayer for the taxable year under 
     section 40(a)(1), and
       ``(2) the alcohol credit determined with respect to the 
     taxpayer for the taxable year under section 40(a)(2).''.
       (c) Conforming Amendment.--Section 1388 (relating to 
     definitions and special rules for cooperative organizations) 
     is amended by adding at the end the following new subsection:
       ``(k) Cross Reference.--For provisions relating to the 
     apportionment of the alcohol fuels credit between cooperative 
     organizations and their patrons, see section 40(g)(6).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2006. ALL ALCOHOL FUELS TAXES TRANSFERRED TO HIGHWAY 
                   TRUST FUND.

       (a) In General.--Section 9503(b)(4) (relating to certain 
     taxes not transferred to Highway Trust Fund) is amended--
       (1) by adding ``or'' at the end of subparagraph (C),
       (2) by striking the comma at the end of subparagraph 
     (D)(iii) and inserting a period, and
       (3) by striking subparagraphs (E) and (F).
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxes imposed after September 30, 2003.

     SEC. 2007. INCREASED FLEXIBILITY IN ALCOHOL FUELS TAX CREDIT.

       (a) Alcohol Fuels Credit May Be Transferred.--Section 40 
     (relating to alcohol used as fuel) is amended by adding at 
     the end the following new subsection:
       ``(i) Credit May Be Transferred.--
       ``(1) In general.--A taxpayer may transfer any credit 
     allowable under paragraph (1) or (2) of subsection (a) with 
     respect to alcohol used in the production of ethyl tertiary 
     butyl ether through an assignment to a qualified assignee. 
     Such transfer may be revoked only with the consent of the 
     Secretary.
       ``(2) Qualified assignee.--For purposes of this subsection, 
     the term `qualified assignee' means any person who--
       ``(A) is liable for taxes imposed under section 4081,
       ``(B) is required to register under section 4101, and
       ``(C) obtains a certificate from the taxpayer described in 
     paragraph (1) which identifies the amount of alcohol used in 
     such production.
       ``(3) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to insure that any credit described 
     in paragraph (1) is claimed once and not reassigned by a 
     qualified assignee.''.
       (b) Alcohol Fuels Credit May Be Taken Against Motor Fuels 
     Tax Liability.--
       (1) In general.--Subpart C of part III of subchapter A of 
     chapter 32 (relating to special provisions applicable to 
     petroleum products) is amended by adding at the end the 
     following new section:

     ``SEC. 4104. CREDIT AGAINST MOTOR FUELS TAXES.

       ``(a) Election To Use Credit Against Motor Fuels Taxes.--
     There is hereby allowed as a credit against the taxes imposed 
     by section 4081, any credit allowed under paragraph (1) or 
     (2) of section 40(a) with respect to alcohol used in the 
     production of ethyl tertiary butyl ether to the extent--
       ``(1) such credit is not claimed by the taxpayer or the 
     qualified assignee under section 40(i) as a credit under 
     section 40, and
       ``(2) the taxpayer or qualified assignee elects to claim 
     such credit under this section.
       ``(b) Election Irrevocable.--Any election under subsection 
     (a) shall be irrevocable.
       ``(c) Required Statement.--Any return claiming a credit 
     pursuant to an election under this section shall be 
     accompanied by a statement that the credit was not, and will 
     not, be claimed on an income tax return.
       ``(d) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to avoid the claiming of double 
     benefits and to prescribe the taxable periods with respect to 
     which the credit may be claimed.''.
       (2) Conforming amendment.--Section 40(c) is amended by 
     striking ``or section 4091(c)'' and inserting ``section 
     4091(c), or section 4104''.
       (3) Clerical amendment.--The table of sections for subpart 
     C of part III of subchapter A of chapter 32 is amended by 
     adding at the end the following new item:

``Sec. 4104. Credit against motor fuels taxes.''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect on and after the date of the enactment of 
     this Act.

     SEC. 2008. INCENTIVES FOR BIODIESEL.

       (a) Credit for Biodiesel Used as a Fuel.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by inserting after section 40A the 
     following new section:

     ``SEC. 40B. BIODIESEL USED AS FUEL.

       ``(a) General Rule.--For purposes of section 38, the 
     biodiesel fuels credit determined under this section for the 
     taxable year is an amount equal to the biodiesel mixture 
     credit.
       ``(b) Definition of Biodiesel Mixture Credit.--For purposes 
     of this section--
       ``(1) Biodiesel mixture credit.--
       ``(A) In general.--The biodiesel mixture credit of any 
     taxpayer for any taxable year is the sum of the products of 
     the biodiesel mixture rate for each qualified biodiesel 
     mixture and the number of gallons of such mixture of the 
     taxpayer for the taxable year.
       ``(B) Biodiesel mixture rate.--For purposes of subparagraph 
     (A), the biodiesel mixture rate for each qualified biodiesel 
     mixture shall be--
       ``(i) in the case of a mixture with only biodiesel V, 1 
     cent for each whole percentage point (not exceeding 20 
     percentage points) of biodiesel V in such mixture, and
       ``(ii) in the case of a mixture with biodiesel NV, or a 
     combination of biodiesel V and biodiesel NV, 0.5 cent for 
     each whole percentage point (not exceeding 20 percentage 
     points) of such biodiesel in such mixture.
       ``(2) Qualified biodiesel mixture.--
       ``(A) In general.--The term `qualified biodiesel mixture' 
     means a mixture of diesel and biodiesel V or biodiesel NV 
     which--
       ``(i) is sold by the taxpayer producing such mixture to any 
     person for use as a fuel, or
       ``(ii) is used as a fuel by the taxpayer producing such 
     mixture.
       ``(B) Sale or use must be in trade or business, etc.--
       ``(i) In general.--Biodiesel V or biodiesel NV used in the 
     production of a qualified biodiesel mixture shall be taken 
     into account--

       ``(I) only if the sale or use described in subparagraph (A) 
     is in a trade or business of the taxpayer, and
       ``(II) for the taxable year in which such sale or use 
     occurs.

       ``(ii) Certification for biodiesel v.--Biodiesel V used in 
     the production of a qualified biodiesel mixture shall be 
     taken into account only if the taxpayer described in 
     subparagraph (A) obtains a certification from the producer of 
     the biodiesel V which identifies the product produced.
       ``(C) Casual off-farm production not eligible.--No credit 
     shall be allowed under this section with respect to any 
     casual off-farm production of a qualified biodiesel mixture.
       ``(c) Coordination With Exemption From Excise Tax.--The 
     amount of the credit determined under this section with 
     respect to any biodiesel V shall, under regulations 
     prescribed by the Secretary, be properly reduced to take into 
     account any benefit provided with respect to such biodiesel V 
     solely by reason of the application of section 4041(n) or 
     section 4081(f).
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Biodiesel v defined.--The term `biodiesel V' means 
     the monoalkyl esters of long chain fatty acids derived solely 
     from virgin vegetable oils for use in compressional-ignition 
     (diesel) engines. Such term shall include esters derived from 
     vegetable oils from corn, soybeans, sunflower seeds, 
     cottonseeds, canola, crambe, rapeseeds, safflowers, 
     flaxseeds, rice bran, and mustard seeds.
       ``(2) Biodiesel nv defined.--The term `biodiesel nv' means 
     the monoalkyl esters of long chain fatty acids derived from 
     nonvirgin vegetable oils or animal fats for use in 
     compressional-ignition (diesel) engines.
       ``(3) Registration requirements.--The terms `biodiesel V' 
     and `biodiesel NV' shall only include a biodiesel which 
     meets--
       ``(i) the registration requirements for fuels and fuel 
     additives established by the Environmental Protection Agency 
     under section 211 of the Clean Air Act (42 U.S.C. 7545), and
       ``(ii) the requirements of the American Society of Testing 
     and Materials D6751.
       ``(2) Biodiesel mixture not used as a fuel, etc.--
       ``(A) Imposition of tax.--If--
       ``(i) any credit was determined under this section with 
     respect to biodiesel V or biodiesel NV used in the production 
     of any qualified biodiesel mixture, and
       ``(ii) any person--

       ``(I) separates such biodiesel from the mixture, or
       ``(II) without separation, uses the mixture other than as a 
     fuel,

     then there is hereby imposed on such person a tax equal to 
     the product of the biodiesel mixture rate applicable under 
     subsection (b)(1)(B) and the number of gallons of the 
     mixture.
       ``(B) Applicable laws.--All provisions of law, including 
     penalties, shall, insofar as applicable and not inconsistent 
     with this section, apply in respect of any tax imposed under 
     subparagraph (A) as if such tax were imposed by section 4081 
     and not by this chapter.
       ``(3) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(e) Election To Have Biodiesel Fuels Credit Not Apply.--
       ``(1) In general.--A taxpayer may elect to have this 
     section not apply for any taxable year.
       ``(2) Time for making election.--An election under 
     paragraph (1) for any taxable year may be made (or revoked) 
     at any time before the expiration of the 3-year period 
     beginning on the last date prescribed by law for filing the 
     return for such taxable year (determined without regard to 
     extensions).
       ``(3) Manner of making election.--An election under 
     paragraph (1) (or revocation thereof) shall be made in such 
     manner as the Secretary may by regulations prescribe.''.

[[Page S3770]]

       ``(f) Termination.--This section shall not apply to any 
     fuel sold after December 31, 2005.''.
       (2) Credit treated as part of general business credit.--
     Section 38(b), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (15), by striking the period 
     at the end of paragraph (16) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(17) the biodiesel fuels credit determined under section 
     40B(a).''.
       (3) Conforming amendments.--
       (A) Section 39(d), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(12) No carryback of biodiesel fuels credit before 
     january 1, 2003.--No portion of the unused business credit 
     for any taxable year which is attributable to the biodiesel 
     fuels credit determined under section 40B may be carried back 
     to a taxable year beginning before January 1, 2003.''.
       (B) Section 196(c) is amended by striking ``and'' at the 
     end of paragraph (9), by striking the period at the end of 
     paragraph (10), and by adding at the end the following new 
     paragraph:
       ``(11) the biodiesel fuels credit determined under section 
     40B(a).''.
       (C) Section 6501(m), as amended by this Act, is amended by 
     inserting ``40B(e),'' after ``40(f),''.
       (D) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by adding after the item relating to section 40A the 
     following new item:

``Sec. 40B. Biodiesel used as fuel.''.

       (4) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2002.
       (b) Reduction of Motor Fuel Excise Taxes on Biodiesel V 
     Mixtures.--
       (1) In general.--Section 4081 (relating to manufacturers 
     tax on petroleum products) is amended by adding at the end 
     the following new subsection:
       ``(f) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary--
       ``(1) In general.--In the case of the removal or entry of a 
     qualified biodiesel mixture with biodiesel V, the rate of tax 
     under subsection (a) shall be the otherwise applicable rate 
     reduced by the biodiesel mixture rate (if any) applicable to 
     the mixture.
       ``(2) Tax prior to mixing.--
       ``(A) In general.--In the case of the removal or entry of 
     diesel fuel for use in producing at the time of such removal 
     or entry a qualified biodiesel mixture with biodiesel V, the 
     rate of tax under subsection (a) shall be the rate determined 
     under subparagraph (B).
       ``(B) Determination of rate.--For purposes of subparagraph 
     (A), the rate determined under this subparagraph is the rate 
     determined under paragraph (1), divided by a percentage equal 
     to 100 percent minus the percentage of biodiesel V which will 
     be in the mixture.
       ``(3) Definitions.--For purposes of this subsection, any 
     term used in this subsection which is also used in section 
     40B shall have the meaning given such term by section 40B.
       ``(4) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (6) and (7) of subsection (c) shall apply for 
     purposes of this subsection.''.
       (2) Conforming amendments.--
       (A) Section 4041 is amended by adding at the end the 
     following new subsection:
       ``(n) Biodiesel V Mixtures.--Under regulations prescribed 
     by the Secretary, in the case of the sale or use of a 
     qualified biodiesel mixture (as defined in section 40B(b)(2)) 
     with biodiesel V, the rates under paragraphs (1) and (2) of 
     subsection (a) shall be the otherwise applicable rates, 
     reduced by any applicable biodiesel mixture rate (as defined 
     in section 40B(b)(1)(B)).''.
       (B) Section 6427 is amended by redesignating subsection (p) 
     as subsection (q) and by inserting after subsection (o) the 
     following new subsection:
       ``(p) Biodiesel V Mixtures.--Except as provided in 
     subsection (k), if any diesel fuel on which tax was imposed 
     by section 4081 at a rate not determined under section 
     4081(f) is used by any person in producing a qualified 
     biodiesel mixture (as defined in section 40B(b)(2)) with 
     biodiesel V which is sold or used in such person's trade or 
     business, the Secretary shall pay (without interest) to such 
     person an amount equal to the per gallon applicable biodiesel 
     mixture rate (as defined in section 40B(b)(1)(B)) with 
     respect to such fuel.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to any fuel sold after December 31, 2002, and 
     before January 1, 2006.
       (c) Highway Trust Fund Held Harmless.--There are hereby 
     transferred (from time to time) from the funds of the 
     Commodity Credit Corporation amounts determined by the 
     Secretary of the Treasury to be equivalent to the reductions 
     that would occur (but for this subsection) in the receipts of 
     the Highway Trust Fund by reason of the amendments made by 
     this section.

     SEC. 2009. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER 
                   TAKEOFF VEHICLES.

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

     ``SEC. 45N. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.

       ``(a) General Rule.--For purposes of section 38, the amount 
     of the commercial power takeoff vehicles credit determined 
     under this section for the taxable year is $250 for each 
     qualified commercial power takeoff vehicle owned by the 
     taxpayer as of the close of the calendar year in which or 
     with which the taxable year of the taxpayer ends.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified commercial power takeoff vehicle.--The term 
     `qualified commercial power takeoff vehicle' means any 
     highway vehicle described in paragraph (2) which is propelled 
     by any fuel subject to tax under section 4041 or 4081 if such 
     vehicle is used in a trade or business or for the production 
     of income (and is licensed and insured for such use).
       ``(2) Highway vehicle described.--A highway vehicle is 
     described in this paragraph if such vehicle is--
       ``(A) designed to engage in the daily collection of refuse 
     or recyclables from homes or businesses and is equipped with 
     a mechanism under which the vehicle's propulsion engine 
     provides the power to operate a load compactor, or
       ``(B) designed to deliver ready mixed concrete on a daily 
     basis and is equipped with a mechanism under which the 
     vehicle's propulsion engine provides the power to operate a 
     mixer drum to agitate and mix the product en route to the 
     delivery site.
       ``(c) Exception for Vehicles Used by Governments, Etc.--No 
     credit shall be allowed under this section for any vehicle 
     owned by any person at the close of a calendar year if such 
     vehicle is used at any time during such year by--
       ``(1) the United States or an agency or instrumentality 
     thereof, a State, a political subdivision of a State, or an 
     agency or instrumentality of one or more States or political 
     subdivisions, or
       ``(2) an organization exempt from tax under section 501(a).
       ``(d) Denial of Double Benefit.--The amount of any 
     deduction under this subtitle for any tax imposed by 
     subchapter B of chapter 31 or part III of subchapter A of 
     chapter 32 for any taxable year shall be reduced (but not 
     below zero) by the amount of the credit determined under this 
     subsection for such taxable year.
       ``(e) Termination.--This section shall not apply with 
     respect to any calendar year after 2004.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to general business 
     credit), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (22), by striking the period 
     at the end of paragraph (23) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(24) the commercial power takeoff vehicles credit under 
     section 45N(a).''.
       (c) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45N. Commercial power takeoff vehicles credit.''.

       (d) Regulations.--Not later than January 1, 2005, the 
     Secretary of the Treasury, in consultation with the Secretary 
     of Energy, shall by regulation provide for the method of 
     determining the exemption from any excise tax imposed under 
     section 4041 or 4081 of the Internal Revenue Code of 1986 on 
     fuel used through a mechanism to power equipment attached to 
     a highway vehicle as described in section 45N(b)(2) of such 
     Code, as added by subsection (a).
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2010. MODIFICATIONS TO THE INCENTIVES FOR ALTERNATIVE 
                   VEHICLES AND FUELS.

       (a) Modification to New Qualified Hybrid Motor Vehicle 
     Credit.--The table in section 30B(c)(2)(A) of the Internal 
     Revenue Code of 1986, as added by this Act, is amended by 
     striking ``5 percent'' and inserting ``4 percent''.
       (b) Modifications to Extension of Deduction for Certain 
     Refueling Property.--
       (1) In general.--Subsection (f) of section 179A of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(f) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (2) Extension of phaseout.--Section 179A(b)(1)(B) of such 
     Code, as amended by section 606(a) of the Job Creation and 
     Worker Assistance Act of 2002, is amended--
       (A) by striking ``calendar year 2004'' in clause (i) and 
     inserting ``calendar years 2004 and 2005 (calendar years 2004 
     through 2009 in the case of property relating to hydrogen) 
     '',
       (B) by striking ``2005'' in clause (ii) and inserting 
     ``2006 (calendar year 2010 in the case of property relating 
     to hydrogen)'', and
       (C) by striking ``2006'' in clause (iii) and inserting 
     ``2007 (calendar year 2011 in the case of property relating 
     to hydrogen)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to property placed in service after December 31, 
     2003, in taxable years ending after such date.
       (c) Modification to Credit for Installation of Alternative 
     Fueling Stations.--Subsection (l) of section 30C of the 
     Internal Revenue Code of 1986, as added by this Act, is 
     amended to read as follows:
       ``(l) Termination.--This section shall not apply to any 
     property placed in service--
       ``(1) in the case of property relating to hydrogen, after 
     December 31, 2011, and
       ``(2) in the case of any other property, after December 31, 
     2007.''.
       (d) Effective Date.--Except as provided in subsection 
     (b)(3), the amendments made by this section shall apply to 
     property placed in service after September 30, 2002, in 
     taxable years ending after such date.

        TITLE XXI--CONSERVATION AND ENERGY EFFICIENCY PROVISIONS

     SEC. 2101. CREDIT FOR CONSTRUCTION OF NEW ENERGY EFFICIENT 
                   HOME.

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

[[Page S3771]]

     ``SEC. 45G. NEW ENERGY EFFICIENT HOME CREDIT.

       ``(a) In General.--For purposes of section 38, in the case 
     of an eligible contractor, the credit determined under this 
     section for the taxable year is an amount equal to the 
     aggregate adjusted bases of all energy efficient property 
     installed in a qualifying new home during construction of 
     such home.
       ``(b) Limitations.--
       ``(1) Maximum credit.--
       ``(A) In general.--The credit allowed by this section with 
     respect to a qualifying new home shall not exceed--
       ``(i) in the case of a 30-percent home, $1,250, and
       ``(ii) in the case of a 50-percent home, $2,000.
       ``(B) 30- or 50-percent home.--For purposes of subparagraph 
     (A)--
       ``(i) 30-percent home.--The term `30-percent home' means a 
     qualifying new home which is certified to have a projected 
     level of annual heating and cooling energy consumption, 
     measured in terms of average annual energy cost to the 
     homeowner, which is at least 30 percent less than the annual 
     level of heating and cooling energy consumption of a 
     reference qualifying new home constructed in accordance with 
     the standards of chapter 4 of the 2000 International Energy 
     Conservation Code, or a qualifying new home which is a 
     manufactured home which meets the applicable standards of the 
     Energy Star program managed jointly by the Environmental 
     Protection Agency and the Department of Energy.
       ``(ii) 50-percent home.--The term `50-percent home' means a 
     qualifying new home which is certified to have a projected 
     level of annual heating and cooling energy consumption, 
     measured in terms of average annual energy cost to the 
     homeowner, which is at least 50 percent less than such annual 
     level of heating and cooling energy consumption.
       ``(C) Prior credit amounts on same home taken into 
     account.--If a credit was allowed under subsection (a) with 
     respect to a qualifying new home in 1 or more prior taxable 
     years, the amount of the credit otherwise allowable for the 
     taxable year with respect to that home shall not exceed the 
     amount under clause (i) or (ii) of subparagraph (A) (as the 
     case may be), reduced by the sum of the credits allowed under 
     subsection (a) with respect to the home for all prior taxable 
     years.
       ``(2) Coordination with rehabilitation and energy 
     credits.--For purposes of this section--
       ``(A) the basis of any property referred to in subsection 
     (a) shall be reduced by that portion of the basis of any 
     property which is attributable to the rehabilitation credit 
     (as determined under section 47(a)) or to the energy 
     percentage of energy property (as determined under section 
     48(a)), and
       ``(B) expenditures taken into account under either section 
     47 or 48(a) shall not be taken into account under this 
     section.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Eligible contractor.--The term `eligible contractor' 
     means the person who constructed the qualifying new home, or 
     in the case of a manufactured home which conforms to Federal 
     Manufactured Home Construction and Safety Standards (24 
     C.F.R. 3280), the manufactured home producer of such home.
       ``(2) Energy efficient property.--The term `energy 
     efficient property' means any energy efficient building 
     envelope component, and any energy efficient heating or 
     cooling equipment which can, individually or in combination 
     with other components, meet the requirements of this section.
       ``(3) Qualifying new home.--The term `qualifying new home' 
     means a dwelling--
       ``(A) located in the United States,
       ``(B) the construction of which is substantially completed 
     after the date of the enactment of this section, and
       ``(C) the first use of which after construction is as a 
     principal residence (within the meaning of section 121).
       ``(4) Construction.--The term `construction' includes 
     reconstruction and rehabilitation.
       ``(5) Building envelope component.--The term `building 
     envelope component' means--
       ``(A) any insulation material or system which is 
     specifically and primarily designed to reduce the heat loss 
     or gain of a qualifying new home when installed in or on such 
     home, and
       ``(B) exterior windows (including skylights) and doors.
       ``(6) Manufactured home included.--The term `qualifying new 
     home' includes a manufactured home conforming to Federal 
     Manufactured Home Construction and Safety Standards (24 
     C.F.R. 3280).
       ``(d) Certification.--
       ``(1) Method of certification.--
       ``(A) In general.--A certification described in subsection 
     (b)(1)(B) shall be determined either by a component-based 
     method or a performance-based method.
       ``(B) Component-based method.--A component-based method is 
     a method which uses the applicable technical energy 
     efficiency specifications or ratings (including product 
     labeling requirements) for the energy efficient building 
     envelope component or energy efficient heating or cooling 
     equipment. The Secretary shall, in consultation with the 
     Administrator of the Environmental Protection Agency, develop 
     prescriptive component-based packages that are equivalent in 
     energy performance to properties that qualify under 
     subparagraph (C).
       ``(C) Performance-based method.--
       ``(i) In general.--A performance-based method is a method 
     which calculates projected energy usage and cost reductions 
     in the qualifying new home in relation to a reference 
     qualifying new home--

       ``(I) heated by the same energy source and heating system 
     type, and
       ``(II) constructed in accordance with the standards of 
     chapter 4 of the 2000 International Energy Conservation Code.

       ``(ii) Computer software.--Computer software shall be used 
     in support of a performance-based method certification under 
     clause (i). Such software shall meet procedures and methods 
     for calculating energy and cost savings in regulations 
     promulgated by the Secretary of Energy. Such regulations on 
     the specifications for software and verification protocols 
     shall be based on the 2001 California Residential Alternative 
     Calculation Method Approval Manual.
       ``(2) Provider.--A certification described in subsection 
     (b)(1)(B) shall be provided by--
       ``(A) in the case of a component-based method, a local 
     building regulatory authority, a utility, a manufactured home 
     production inspection primary inspection agency (IPIA), or a 
     home energy rating organization, or
       ``(B) in the case of a performance-based method, an 
     individual recognized by an organization designated by the 
     Secretary for such purposes.
       ``(3) Form.--
       ``(A) In general.--A certification described in subsection 
     (b)(1)(B) shall be made in writing in a manner that specifies 
     in readily verifiable fashion the energy efficient building 
     envelope components and energy efficient heating or cooling 
     equipment installed and their respective rated energy 
     efficiency performance, and in the case of a performance-
     based method, accompanied by a written analysis documenting 
     the proper application of a permissible energy performance 
     calculation method to the specific circumstances of such 
     qualifying new home.
       ``(B) Form provided to buyer.--A form documenting the 
     energy efficient building envelope components and energy 
     efficient heating or cooling equipment installed and their 
     rated energy efficiency performance shall be provided to the 
     buyer of the qualifying new home. The form shall include 
     labeled R-value for insulation products, NFRC-labeled U-
     factor and Solar Heat Gain Coefficient for windows, 
     skylights, and doors, labeled AFUE ratings for furnaces and 
     boilers, labeled HSPF ratings for electric heat pumps, and 
     labeled SEER ratings for air conditioners.
       ``(C) Ratings label affixed in dwelling.--A permanent label 
     documenting the ratings in subparagraph (B) shall be affixed 
     to the front of the electrical distribution panel of the 
     qualifying new home, or shall be otherwise permanently 
     displayed in a readily inspectable location in such home.
       ``(4) Regulations.--
       ``(A) In general.--In prescribing regulations under this 
     subsection for performance-based certification methods, the 
     Secretary, after examining the requirements for energy 
     consultants and home energy ratings providers specified by 
     the Mortgage Industry National Accreditation Procedures for 
     Home Energy Rating Systems, shall prescribe procedures for 
     calculating annual energy usage and cost reductions for 
     heating and cooling and for the reporting of the results. 
     Such regulations shall--
       ``(i) provide that any calculation procedures be fuel 
     neutral such that the same energy efficiency measures allow a 
     qualifying new home to be eligible for the credit under this 
     section regardless of whether such home uses a gas or oil 
     furnace or boiler or an electric heat pump, and
       ``(ii) require that any computer software allow for the 
     printing of the Federal tax forms necessary for the credit 
     under this section and for the printing of forms for 
     disclosure to the homebuyer.
       ``(B) Providers.--For purposes of paragraph (2)(B), the 
     Secretary shall establish requirements for the designation of 
     individuals based on the requirements for energy consultants 
     and home energy raters specified by the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(e) Termination.--Subsection (a) shall apply to 
     qualifying new homes purchased during the period beginning on 
     the date of the enactment of this section and ending on 
     December 31, 2007.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to current year 
     business credit), as amended by this Act, is amended by 
     striking ``plus'' at the end of paragraph (16), by striking 
     the period at the end of paragraph (17) and inserting ``, 
     plus'', and by adding at the end the following new paragraph:
       ``(18) the new energy efficient home credit determined 
     under section 45G(a).''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable) is amended 
     by adding at the end the following new subsection:
       ``(d) New Energy Efficient Home Expenses.--No deduction 
     shall be allowed for that portion of expenses for a 
     qualifying new home otherwise allowable as a deduction for 
     the taxable year which is equal to the amount of the credit 
     determined for such taxable year under section 45G(a).''.
       (d) Limitation on Carryback.--Subsection (d) of section 39, 
     as amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(13) No carryback of new energy efficient home credit 
     before effective date.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     credit determined under section 45G may be carried back to 
     any taxable year ending on or before the date of the 
     enactment of section 45G.''.
       (e) Deduction for Certain Unused Business Credits.--
     Subsection (c) of section 196, as amended by this Act, is 
     amended by striking ``and'' at the end of paragraph (10), by 
     striking the period at the end of paragraph (11) and 
     inserting ``, and'', and by adding after paragraph (11) the 
     following new paragraph:
       ``(12) the new energy efficient home credit determined 
     under section 45G(a).''.

[[Page S3772]]

       (f) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45G. New energy efficient home credit.''.

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

     SEC. 2102. CREDIT FOR ENERGY EFFICIENT APPLIANCES.

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

     ``SEC. 45H. ENERGY EFFICIENT APPLIANCE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the energy 
     efficient appliance credit determined under this section for 
     the taxable year is an amount equal to the applicable amount 
     determined under subsection (b) with respect to the eligible 
     production of qualified energy efficient appliances produced 
     by the taxpayer during the calendar year ending with or 
     within the taxable year.
       ``(b) Applicable Amount; Eligible Production.--For purposes 
     of subsection (a)--
       ``(1) Applicable amount.--The applicable amount is--
       ``(A) $50, in the case of--
       ``(i) a clothes washer which is manufactured with at least 
     a 1.26 MEF, or
       ``(ii) a refrigerator which consumes at least 10 percent 
     less kWh per year than the energy conservation standards for 
     refrigerators promulgated by the Department of Energy 
     effective July 1, 2001, and
       ``(B) $100, in the case of--
       ``(i) a clothes washer which is manufactured with at least 
     a 1.42 MEF (at least 1.5 MEF for washers produced after 
     2004), or
       ``(ii) a refrigerator which consumes at least 15 percent 
     less kWh per year than such energy conservation standards.
       ``(2) Eligible production.--
       ``(A) In general.--The eligible production of each category 
     of qualified energy efficient appliances is the excess of--
       ``(i) the number of appliances in such category which are 
     produced by the taxpayer during such calendar year, over
       ``(ii) the average number of appliances in such category 
     which were produced by the taxpayer during calendar years 
     1999, 2000, and 2001.
       ``(B) Categories.--For purposes of subparagraph (A), the 
     categories are--
       ``(i) clothes washers described in paragraph (1)(A)(i),
       ``(ii) clothes washers described in paragraph (1)(B)(i),
       ``(iii) refrigerators described in paragraph (1)(A)(ii), 
     and
       ``(iv) refrigerators described in paragraph (1)(B)(ii).
       ``(c) Limitation on Maximum Credit.--
       ``(1) In general.--The maximum amount of credit allowed 
     under subsection (a) with respect to a taxpayer for all 
     taxable years shall be--
       ``(A) $30,000,000 with respect to the credit determined 
     under subsection (b)(1)(A), and
       ``(B) $30,000,000 with respect to the credit determined 
     under subsection (b)(1)(B).
       ``(2) Limitation based on gross receipts.--The credit 
     allowed under subsection (a) with respect to a taxpayer for 
     the taxable year shall not exceed an amount equal to 2 
     percent of the average annual gross receipts of the taxpayer 
     for the 3 taxable years preceding the taxable year in which 
     the credit is determined.
       ``(3) Gross receipts.--For purposes of this subsection, the 
     rules of paragraphs (2) and (3) of section 448(c) shall 
     apply.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) a clothes washer described in subparagraph (A)(i) or 
     (B)(i) of subsection (b)(1), or
       ``(B) a refrigerator described in subparagraph (A)(ii) or 
     (B)(ii) of subsection (b)(1).
       ``(2) Clothes washer.--The term `clothes washer' means a 
     residential clothes washer, including a residential style 
     coin operated washer.
       ``(3) Refrigerator.--The term `refrigerator' means an 
     automatic defrost refrigerator-freezer which has an internal 
     volume of at least 16.5 cubic feet.
       ``(4) MEF.--The term `MEF' means Modified Energy Factor (as 
     determined by the Secretary of Energy).
       ``(e) Special Rules.--
       ``(1) In general.--Rules similar to the rules of 
     subsections (c), (d), and (e) of section 52 shall apply for 
     purposes of this section.
       ``(2) Aggregation rules.--All persons treated as a single 
     employer under subsection (a) or (b) of section 52 or 
     subsection (m) or (o) of section 414 shall be treated as 1 
     person for purposes of subsection (a).
       ``(f) Verification.--The taxpayer shall submit such 
     information or certification as the Secretary, in 
     consultation with the Secretary of Energy, determines 
     necessary to claim the credit amount under subsection (a).
       ``(g) Termination.--This section shall not apply--
       ``(1) with respect to refrigerators described in subsection 
     (b)(1)(A)(ii) produced after December 31, 2004, and
       ``(2) with respect to all other qualified energy efficient 
     appliances produced after December 31, 2006.''.
       (b) Limitation on Carryback.--Section 39(d) (relating to 
     transition rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(14) No carryback of energy efficient appliance credit 
     before effective date.--No portion of the unused business 
     credit for any taxable year which is attributable to the 
     energy efficient appliance credit determined under section 
     45H may be carried to a taxable year ending before January 1, 
     2003.''.
       (c) Conforming Amendment.--Section 38(b) (relating to 
     general business credit), as amended by this Act, is amended 
     by striking ``plus'' at the end of paragraph (17), by 
     striking the period at the end of paragraph (18) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(19) the energy efficient appliance credit determined 
     under section 45H(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45H. Energy efficient appliance credit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2002, 
     in taxable years ending after such date.

     SEC. 2103. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.

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

     ``SEC. 25C. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to the sum 
     of--
       ``(1) 15 percent of the qualified photovoltaic property 
     expenditures made by the taxpayer during such year,
       ``(2) 15 percent of the qualified solar water heating 
     property expenditures made by the taxpayer during such year,
       ``(3) 30 percent of the qualified fuel cell property 
     expenditures made by the taxpayer during such year,
       ``(4) 30 percent of the qualified wind energy property 
     expenditures made by the taxpayer during such year, and
       ``(5) the sum of the qualified Tier 2 energy efficient 
     building property expenditures made by the taxpayer during 
     such year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed under subsection 
     (a) shall not exceed--
       ``(A) $2,000 for property described in subsection (d)(1),
       ``(B) $2,000 for property described in subsection (d)(2),
       ``(C) $1,000 for each kilowatt of capacity of property 
     described in subsection (d)(4),
       ``(D) $2,000 for property described in subsection (d)(5), 
     and
       ``(E) for property described in subsection (d)(6)--
       ``(i) $75 for each electric heat pump water heater,
       ``(ii) $250 for each electric heat pump,
       ``(iii) $250 for each advanced natural gas furnace,
       ``(iv) $250 for each central air conditioner,
       ``(v) $75 for each natural gas water heater, and
       ``(vi) $250 for each geothermal heat pump.
       ``(2) Safety certifications.--No credit shall be allowed 
     under this section for an item of property unless--
       ``(A) in the case of solar water heating property, such 
     property is certified for performance and safety by the non-
     profit Solar Rating Certification Corporation or a comparable 
     entity endorsed by the government of the State in which such 
     property is installed,
       ``(B) in the case of a photovoltaic property, a fuel cell 
     property, or a wind energy property, such property meets 
     appropriate fire and electric code requirements, and
       ``(C) in the case of property described in subsection 
     (d)(6), such property meets the performance and quality 
     standards, and the certification requirements (if any), 
     which--
       ``(i) have been prescribed by the Secretary by regulations 
     (after consultation with the Secretary of Energy or the 
     Administrator of the Environmental Protection Agency, as 
     appropriate),
       ``(ii) in the case of the energy efficiency ratio (EER)--

       ``(I) require measurements to be based on published data 
     which is tested by manufacturers at 95 degrees Fahrenheit, 
     and
       ``(II) do not require ratings to be based on certified data 
     of the Air Conditioning and Refrigeration Institute, and

       ``(iii) are in effect at the time of the acquisition of the 
     property.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section and section 25D), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Qualified solar water heating property expenditure.--
     The term `qualified solar water heating property expenditure' 
     means an expenditure for property to heat water for use in a 
     dwelling unit located in the United States and used as a 
     residence by the taxpayer if at least half of the energy used 
     by such property for such purpose is derived from the sun.
       ``(2) Qualified photovoltaic property expenditure.--The 
     term `qualified photovoltaic property expenditure' means an 
     expenditure for property that uses solar energy to generate 
     electricity for use in such a dwelling unit.
       ``(3) Solar panels.--No expenditure relating to a solar 
     panel or other property installed as a roof (or portion 
     thereof) shall fail to be treated as property described in 
     paragraph (1) or (2) solely because it constitutes a 
     structural component of the structure on which it is 
     installed.
       ``(4) Qualified fuel cell property expenditure.--The term 
     `qualified fuel cell property expenditure' means an 
     expenditure for qualified

[[Page S3773]]

     fuel cell property (as defined in section 48(a)(4)) installed 
     on or in connection with such a dwelling unit.
       ``(5) Qualified wind energy property expenditure.--The term 
     `qualified wind energy property expenditure' means an 
     expenditure for property which uses wind energy to generate 
     electricity for use in such a dwelling unit.
       ``(6) Qualified tier 2 energy efficient building property 
     expenditure.--
       ``(A) In general.--The term `qualified Tier 2 energy 
     efficient building property expenditure' means an expenditure 
     for any Tier 2 energy efficient building property.
       ``(B) Tier 2 energy efficient building property.--The term 
     `Tier 2 energy efficient building property' means--
       ``(i) an electric heat pump water heater which yields an 
     energy factor of at least 1.7 in the standard Department of 
     Energy test procedure,
       ``(ii) an electric heat pump which has a heating seasonal 
     performance factor (HSPF) of at least 9, a seasonal energy 
     efficiency ratio (SEER) of at least 15, and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(iii) an advanced natural gas furnace which achieves at 
     least 95 percent annual fuel utilization efficiency (AFUE),
       ``(iv) a central air conditioner which has a seasonal 
     energy efficiency ratio (SEER) of at least 15 and an energy 
     efficiency ratio (EER) of at least 12.5,
       ``(v) a natural gas water heater which has an energy factor 
     of at least 0.80 in the standard Department of Energy test 
     procedure, and
       ``(vi) a geothermal heat pump which has an energy 
     efficiency ratio (EER) of at least 21.
       ``(7) Labor costs.--Expenditures for labor costs properly 
     allocable to the onsite preparation, assembly, or original 
     installation of the property described in paragraph (1), (2), 
     (4), (5), or (6) and for piping or wiring to interconnect 
     such property to the dwelling unit shall be taken into 
     account for purposes of this section.
       ``(8) Swimming pools, etc., used as storage medium.--
     Expenditures which are properly allocable to a swimming pool, 
     hot tub, or any other energy storage medium which has a 
     function other than the function of such storage shall not be 
     taken into account for purposes of this section.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Dollar amounts in case of joint occupancy.--In the 
     case of any dwelling unit which is jointly occupied and used 
     during any calendar year as a residence by 2 or more 
     individuals the following shall apply:
       ``(A) The amount of the credit allowable, under subsection 
     (a) by reason of expenditures (as the case may be) made 
     during such calendar year by any of such individuals with 
     respect to such dwelling unit shall be determined by treating 
     all of such individuals as 1 taxpayer whose taxable year is 
     such calendar year.
       ``(B) There shall be allowable, with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     individual shall be treated as having made his tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of any expenditures of such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which the individual owns, such individual 
     shall be treated as having made the individual's 
     proportionate share of any expenditures of such association.
       ``(B) Condominium management association.--For purposes of 
     this paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Allocation in certain cases.--Except in the case of 
     qualified wind energy property expenditures, if less than 80 
     percent of the use of an item is for nonbusiness purposes, 
     only that portion of the expenditures for such item which is 
     properly allocable to use for nonbusiness purposes shall be 
     taken into account.
       ``(5) When expenditure made; amount of expenditure.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an expenditure with respect to an item shall be treated as 
     made when the original installation of the item is completed.
       ``(B) Expenditures part of building construction.--In the 
     case of an expenditure in connection with the construction or 
     reconstruction of a structure, such expenditure shall be 
     treated as made when the original use of the constructed or 
     reconstructed structure by the taxpayer begins.
       ``(C) Amount.--The amount of any expenditure shall be the 
     cost thereof.
       ``(6) Property financed by subsidized energy financing.--
     For purposes of determining the amount of expenditures made 
     by any individual with respect to any dwelling unit, there 
     shall not be taken in to account expenditures which are made 
     from subsidized energy financing (as defined in section 
     48(a)(5)(C)).
       ``(f) Basis Adjustments.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(g) Termination.--The credit allowed under this section 
     shall not apply to expenditures after December 31, 2007.''.
       (b) Credit Allowed Against Regular Tax and Alternative 
     Minimum Tax.--
       (1) In general.--Section 25C(b), as added by subsection 
     (a), is amended by adding at the end the following new 
     paragraph:
       ``(3) Limitation based on amount of tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section and section 25D) and section 27 for 
     the taxable year.''.
       (2) Conforming amendments.--
       (A) Section 25C(c), as added by subsection (a), is amended 
     by striking ``section 26(a) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section and section 25D)'' and inserting 
     ``subsection (b)(3)''.
       (B) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25C'' after ``this section''.
       (C) Section 24(b)(3)(B) is amended by striking ``23 and 
     25B'' and inserting ``23, 25B, and 25C''.
       (D) Section 25(e)(1)(C) is amended by inserting ``25C,'' 
     after ``25B,''.
       (E) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25C''.
       (F) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (G) Section 904(h) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (H) Section 1400C(d) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25C''.
       (c) Additional Conforming Amendments.--
       (1) Section 23(c), as in effect for taxable years beginning 
     before January 1, 2004, is amended by striking ``section 
     1400C'' and inserting ``sections 25C and 1400C''.
       (2) Section 25(e)(1)(C), as in effect for taxable years 
     beginning before January 1, 2004, is amended by inserting ``, 
     25Cs,'' after ``sections 23''.
       (3) Subsection (a) of section 1016, as amended by this Act, 
     is amended by striking ``and'' at the end of paragraph (29), 
     by striking the period at the end of paragraph (30) and 
     inserting ``, and'', and by adding at the end the following 
     new paragraph:
       ``(31) to the extent provided in section 25C(f), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25C.''.
       (4) Section 1400C(d), as in effect for taxable years 
     beginning before January 1, 2004, is amended by inserting 
     ``and section 25C'' after ``this section''.
       (5) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 25B the following new item:

``Sec. 25C. Residential energy efficient property.''.

       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to expenditures 
     after December 31, 2002, in taxable years ending after such 
     date.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years beginning after December 31, 
     2003.

     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.

[[Page S3774]]

       ``(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''.
       (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).

     SEC. 2105. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       (a) In General.--Part VI of subchapter B of chapter 1 is 
     amended by inserting after section 179A the following new 
     section:

     ``SEC. 179B. ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

       ``(a) In General.--There shall be allowed as a deduction 
     for the taxable year an amount equal to the energy efficient 
     commercial building property expenditures made by a taxpayer 
     for the taxable year.
       ``(b) Maximum Amount of Deduction.--The amount of energy 
     efficient commercial building property expenditures taken 
     into account under subsection (a) shall not exceed an amount 
     equal to the product of--
       ``(1) $2.25, and
       ``(2) the square footage of the building with respect to 
     which the expenditures are made.
       ``(c) Year Deduction Allowed.--The deduction under 
     subsection (a) shall be allowed in the taxable year in which 
     the construction of the building is completed.
       ``(d) Energy Efficient Commercial Building Property 
     Expenditures.--For purposes of this section--
       ``(1) In general.--The term `energy efficient commercial 
     building property expenditures' means an amount paid or 
     incurred for energy efficient commercial building property 
     installed on or in connection with new construction or 
     reconstruction of property--
       ``(A) for which depreciation is allowable under section 
     167,
       ``(B) which is located in the United States, and
       ``(C) the construction or erection of which is completed by 
     the taxpayer.

     Such property includes all residential rental property, 
     including low-rise multifamily structures and single family 
     housing property which is not within the scope of Standard 
     90.1-1999 (described in paragraph (2)). Such term includes 
     expenditures for labor costs properly allocable to the onsite 
     preparation, assembly, or original installation of the 
     property.
       ``(2) Energy efficient commercial building property.--For 
     purposes of paragraph (1)--
       ``(A) In general.--The term `energy efficient commercial 
     building property' means any property which reduces total 
     annual energy and power costs with respect to the lighting, 
     heating, cooling, ventilation, and hot water supply systems 
     of the building by 50 percent or more in comparison to a 
     reference building which meets the requirements of Standard 
     90.1-1999 of the American Society of Heating, Refrigerating, 
     and Air Conditioning Engineers and the Illuminating 
     Engineering Society of North America using methods of 
     calculation under subparagraph (B) and certified by qualified 
     professionals as provided under paragraph (5).
       ``(B) Methods of calculation.--The Secretary, in 
     consultation with the Secretary of Energy, shall promulgate 
     regulations which describe in detail methods for calculating 
     and verifying energy and power consumption and cost, taking 
     into consideration the provisions of the 2001 California 
     Nonresidential Alternative Calculation Method Approval 
     Manual. These regulations shall meet the following 
     requirements:
       ``(i) In calculating tradeoffs and energy performance, the 
     regulations shall prescribe the costs per unit of energy and 
     power, such as kilowatt hour, kilowatt, gallon of fuel oil, 
     and cubic foot or Btu of natural gas, which may be dependent 
     on time of usage.
       ``(ii) The calculational methodology shall require that 
     compliance be demonstrated for a whole building. If some 
     systems of the building, such as lighting, are designed later 
     than other systems of the building, the method shall provide 
     that either--

       ``(I) the expenses taken into account under paragraph (1) 
     shall not occur until the date designs for all energy-using 
     systems of the building are completed,
       ``(II) the energy performance of all systems and components 
     not yet designed shall be assumed to comply minimally with 
     the requirements of such Standard 90.1-1999, or
       ``(III) the expenses taken into account under paragraph (1) 
     shall be a fraction of such expenses based on the performance 
     of less than all energy-using systems in accordance with 
     clause (iii).

       ``(iii) The expenditures in connection with the design of 
     subsystems in the building, such as the envelope, the 
     heating, ventilation, air conditioning and water heating 
     system, and the lighting system shall be allocated to the 
     appropriate building subsystem based on system-specific 
     energy cost savings targets in regulations promulgated by the 
     Secretary of Energy which are equivalent, using the 
     calculation methodology, to the whole building requirement of 
     50 percent savings.
       ``(iv) The calculational methods under this subparagraph 
     need not comply fully with section 11 of such Standard 90.1-
     1999.
       ``(v) The calculational methods shall be fuel neutral, such 
     that the same energy efficiency features shall qualify a 
     building for the deduction under this subsection regardless 
     of whether the heating source is a gas or oil furnace or an 
     electric heat pump.
       ``(vi) The calculational methods shall provide appropriate 
     calculated energy savings for design methods and technologies 
     not otherwise credited in either such Standard 90.1-1999 or 
     in the 2001 California Nonresidential Alternative Calculation 
     Method Approval Manual, including the following:

       ``(I) Natural ventilation.
       ``(II) Evaporative cooling.
       ``(III) Automatic lighting controls such as occupancy 
     sensors, photocells, and timeclocks.
       ``(IV) Daylighting.
       ``(V) Designs utilizing semi-conditioned spaces that 
     maintain adequate comfort conditions without air conditioning 
     or without heating.
       ``(VI) Improved fan system efficiency, including reductions 
     in static pressure.
       ``(VII) Advanced unloading mechanisms for mechanical 
     cooling, such as multiple or variable speed compressors.
       ``(VIII) The calculational methods may take into account 
     the extent of commissioning in the building, and allow the 
     taxpayer to take into account measured performance that 
     exceeds typical performance.

       ``(C) Computer software.--
       ``(i) In general.--Any calculation under this paragraph 
     shall be prepared by qualified computer software.
       ``(ii) Qualified computer software.--For purposes of this 
     subparagraph, the term `qualified computer software' means 
     software--

       ``(I) for which the software designer has certified that 
     the software meets all procedures and detailed methods for 
     calculating energy and power consumption and costs as 
     required by the Secretary,
       ``(II) which provides such forms as required to be filed by 
     the Secretary in connection with energy efficiency of 
     property and the deduction allowed under this subsection, and
       ``(III) which provides a notice form which summarizes the 
     energy efficiency features of the building and its projected 
     annual energy costs.

       ``(3) Allocation of deduction for public property.--In the 
     case of energy efficient commercial building property 
     installed on or in public property, the Secretary shall 
     promulgate a regulation to allow the allocation of the 
     deduction to the person primarily responsible for designing 
     the property in lieu of the public entity which is the owner 
     of such property. Such person shall be treated as the 
     taxpayer for purposes of this subsection.
       ``(4) Notice to owner.--The qualified individual shall 
     provide an explanation to the owner of the building regarding 
     the energy efficiency features of the building and its 
     projected annual energy costs as provided in the notice under 
     paragraph (2)(C)(ii)(III).
       ``(5) Certification.--
       ``(A) In general.--Except as provided in this paragraph, 
     the Secretary shall prescribe procedures for the inspection 
     and testing for compliance of buildings that are comparable, 
     given the difference between commercial and residential 
     buildings, to the requirements in the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(B) Qualified individuals.--Individuals qualified to 
     determine compliance shall be only those individuals who are 
     recognized by an organization certified by the Secretary for 
     such purposes. The Secretary may qualify a Home Ratings 
     Systems Organization, a local building code agency, a State 
     or local energy office, a utility, or any other organization 
     which meets the requirements prescribed under this section.
       ``(C) Proficiency of qualified individuals.--The Secretary 
     shall consult with nonprofit organizations and State agencies 
     with expertise in energy efficiency calculations and 
     inspections to develop proficiency tests and training 
     programs to qualify individuals to determine compliance.

[[Page S3775]]

       ``(e) Basis Reduction.--For purposes of this subtitle, if a 
     deduction is allowed under this section with respect to any 
     energy efficient commercial building property, the basis of 
     such property shall be reduced by the amount of the deduction 
     so allowed.
       ``(f) Regulations.--The Secretary shall promulgate such 
     regulations as necessary to take into account new 
     technologies regarding energy efficiency and renewable energy 
     for purposes of determining energy efficiency and savings 
     under this section.
       ``(g) Termination.--This section shall not apply with 
     respect to any energy efficient commercial building property 
     expenditures in connection with property--
       ``(1) the plans for which are not certified under 
     subsection (d)(5) on or before December 31, 2007, and
       ``(2) the construction of which is not completed on or 
     before December 31, 2009.''.
       (b) Conforming Amendments.--
       (1) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (30), by striking 
     the period at the end of paragraph (31) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(32) to the extent provided in section 179B(e).''.
       (2) Section 1245(a) is amended by inserting ``179B,'' after 
     ``179A,'' both places it appears in paragraphs (2)(C) and 
     (3)(C).
       (3) Section 1250(b)(3) is amended by inserting before the 
     period at the end of the first sentence ``or by section 
     179B''.
       (4) Section 263(a)(1) is amended by striking ``or'' at the 
     end of subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, or'', and by inserting 
     after subparagraph (H) the following new subparagraph:
       ``(I) expenditures for which a deduction is allowed under 
     section 179B.''.
       (5) Section 312(k)(3)(B) is amended by striking ``or 179A'' 
     each place it appears in the heading and text and inserting 
     ``, 179A, or 179B''.
       (c) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1 is amended by inserting after 
     section 179A the following new item:

``Sec. 179B. Energy efficient commercial buildings deduction.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after September 30, 
     2002.

     SEC. 2106. ALLOWANCE OF DEDUCTION FOR QUALIFIED NEW OR 
                   RETROFITTED ENERGY MANAGEMENT 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 179B the following new section:

     ``SEC. 179C. DEDUCTION FOR QUALIFIED NEW OR RETROFITTED 
                   ENERGY MANAGEMENT DEVICES.

       ``(a) Allowance of Deduction.--In the case of a taxpayer 
     who is a supplier of electric energy or natural gas or a 
     provider of electric energy or natural gas services, there 
     shall be allowed as a deduction an amount equal to the cost 
     of each qualified energy management device placed in service 
     during the taxable year.
       ``(b) Maximum Deduction.--The deduction allowed by this 
     section with respect to each qualified energy management 
     device shall not exceed $30.
       ``(c) Qualified Energy Management Device.--The term 
     `qualified energy management device' means any tangible 
     property to which section 168 applies if such property is a 
     meter or metering device--
       ``(1) which is acquired and used by the taxpayer to enable 
     consumers to manage their purchase or use of electricity or 
     natural gas in response to energy price and usage signals, 
     and
       ``(2) which permits reading of energy price and usage 
     signals on at least a daily basis.
       ``(d) 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.
       ``(e) 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.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (H), by 
     striking the period at the end of subparagraph (I) and 
     inserting ``, or'', and by inserting after subparagraph (I) 
     the following new subparagraph:
       ``(J) expenditures for which a deduction is allowed under 
     section 179C.''.
       (2) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179B'' each place it appears in the 
     heading and text and inserting ``, 179B, or 179C''.
       (3) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (31), by striking 
     the period at the end of paragraph (32) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(33) to the extent provided in section 179C(e)(1).''.
       (4) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179C,'' after ``179B,'' 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 179B the 
     following new item:

``Sec. 179C. Deduction for qualified new or retrofitted energy 
              management devices.''.

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

     SEC. 2107. THREE-YEAR APPLICABLE RECOVERY PERIOD FOR 
                   DEPRECIATION OF QUALIFIED ENERGY MANAGEMENT 
                   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 (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following new clause:
       ``(iv) any qualified energy management device.''.
       (b) Definition of Qualified Energy Management Device.--
     Section 168(i) (relating to definitions and special rules) is 
     amended by inserting at the end the following new paragraph:
       ``(15) Qualified energy management device.--The term 
     `qualified energy management device' means any qualified 
     energy management device as defined in section 179C(c) which 
     is placed in service by a taxpayer who is a supplier of 
     electric energy or natural gas or a provider of electric 
     energy or natural gas services.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2108. ENERGY CREDIT FOR COMBINED HEAT AND POWER SYSTEM 
                   PROPERTY.

       (a) In General.--Subparagraph (A) of section 48(a)(3) 
     (defining energy property), as amended by this Act, is 
     amended by striking ``or'' at the end of clause (ii), by 
     adding ``or'' at the end of clause (iii), and by inserting 
     after clause (iii) the following new clause:
       ``(iv) combined heat and power system property,''.
       (b) Combined Heat and Power System Property.--Subsection 
     (a) of section 48, as amended by this Act, is amended by 
     redesignating paragraphs (5) and (6) as paragraphs (6) and 
     (7), respectively, and by inserting after paragraph (4) the 
     following new paragraph:
       ``(5) Combined heat and power system property.--For 
     purposes of this subsection--
       ``(A) Combined heat and power system property.--The term 
     `combined heat and power system property' means property 
     comprising a system--
       ``(i) which uses the same energy source for the 
     simultaneous or sequential generation of electrical power, 
     mechanical shaft power, or both, in combination with the 
     generation of steam or other forms of useful thermal energy 
     (including heating and cooling applications),
       ``(ii) which has an electrical capacity of more than 50 
     kilowatts or a mechanical energy capacity of more than 67 
     horsepower or an equivalent combination of electrical and 
     mechanical energy capacities,
       ``(iii) which produces--

       ``(I) at least 20 percent of its total useful energy in the 
     form of thermal energy, and
       ``(II) at least 20 percent of its total useful energy in 
     the form of electrical or mechanical power (or combination 
     thereof),

       ``(iv) the energy efficiency percentage of which exceeds 60 
     percent (70 percent in the case of a system with an 
     electrical capacity in excess of 50 megawatts or a mechanical 
     energy capacity in excess of 67,000 horsepower, or an 
     equivalent combination of electrical and mechanical energy 
     capacities), and
       ``(v) which is placed in service after December 31, 2002, 
     and before January 1, 2007.
       ``(B) Special rules.--
       ``(i) Energy efficiency percentage.--For purposes of 
     subparagraph (A)(iv), the energy efficiency percentage of a 
     system is the fraction--

       ``(I) the numerator of which is the total useful 
     electrical, thermal, and mechanical power produced by the 
     system at normal operating rates, and expected to be consumed 
     in its normal application, and
       ``(II) the denominator of which is the lower heating value 
     of the primary fuel source for the system.

       ``(ii) Determinations made on btu basis.--The energy 
     efficiency percentage and the percentages under subparagraph 
     (A)(iii) shall be determined on a Btu basis.
       ``(iii) Input and output property not included.--The term 
     `combined heat and power system property' does not include 
     property used to transport the energy source to the facility 
     or to distribute energy produced by the facility.
       ``(iv) Public utility property.--

       ``(I) Accounting rule for public utility property.--If the 
     combined heat and power system property is public utility 
     property (as defined in section 168(i)(10)), the taxpayer may 
     only claim the credit under the subsection if, with respect 
     to such property, the taxpayer uses a normalization method of 
     accounting.
       ``(II) Certain exception not to apply.--The matter 
     following paragraph (3)(D) shall not apply to combined heat 
     and power system property.

        ``(v) Nonapplication of certain rules.--For purposes of 
     determining if the term `combined heat and power system 
     property' includes technologies which generate electricity or 
     mechanical power using back-pressure steam turbines in place 
     of existing pressure-reducing valves or which make use of 
     waste heat from industrial processes such as by using organic 
     rankin, stirling, or kalina heat engine systems, subparagraph 
     (A) shall be applied without regard to clauses (iii) and (iv) 
     thereof.

[[Page S3776]]

       ``(C) Extension of depreciation recovery period.--If a 
     taxpayer is allowed credit under this section for combined 
     heat and power system property and such property would (but 
     for this subparagraph) have a class life of 15 years or less 
     under section 168, such property shall be treated as having a 
     22-year class life for purposes of section 168.''.
       (c) No Carryback of Energy Credit Before Effective Date.--
     Subsection (d) of section 39, as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(15) No carryback of energy credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the energy credit with 
     respect to property described in section 48(a)(5) may be 
     carried back to a taxable year ending before January 1, 
     2003.''.
       (d) Conforming Amendments.--
       (A) Section 25C(e)(6), as added by this Act, is amended by 
     striking ``section 48(a)(5)(C)'' and inserting ``section 
     48(a)(6)(C)''.
       (B) Section 29(b)(3)(A)(i)(III), as amended by this Act, is 
     amended by striking ``section 48(a)(5)(C)'' and inserting 
     ``section 48(a)(6)(C)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2002, in taxable years ending after such date.

     SEC. 2109. CREDIT FOR ENERGY EFFICIENCY IMPROVEMENTS TO 
                   EXISTING HOMES.

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

     ``SEC. 25D. ENERGY EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter for the taxable year an amount equal to 10 
     percent of the amount paid or incurred by the taxpayer for 
     qualified energy efficiency improvements installed during 
     such taxable year.
       ``(b) Limitations.--
       ``(1) Maximum credit.--The credit allowed by this section 
     with respect to a dwelling shall not exceed $300.
       ``(2) Prior credit amounts for taxpayer on same dwelling 
     taken into account.--If a credit was allowed to the taxpayer 
     under subsection (a) with respect to a dwelling in 1 or more 
     prior taxable years, the amount of the credit otherwise 
     allowable for the taxable year with respect to that dwelling 
     shall not exceed the amount of $300 reduced by the sum of the 
     credits allowed under subsection (a) to the taxpayer with 
     respect to the dwelling for all prior taxable years.
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section) for any taxable year, such excess shall be carried 
     to the succeeding taxable year and added to the credit 
     allowable under subsection (a) for such succeeding taxable 
     year.
       ``(d) Qualified Energy Efficiency Improvements.--For 
     purposes of this section, the term `qualified energy 
     efficiency improvements' means any energy efficient building 
     envelope component which is certified to meet or exceed the 
     prescriptive criteria for such component in the 2000 
     International Energy Conservation Code, any energy efficient 
     building envelope component which is described in subsection 
     (f)(4)(B) and is certified by the Energy Star program managed 
     jointly by the Environmental Protection Agency and the 
     Department of Energy, or any combination of energy efficiency 
     measures which are certified as achieving at least a 30 
     percent reduction in heating and cooling energy usage for the 
     dwelling (as measured in terms of energy cost to the 
     taxpayer), if--
       ``(1) such component or combination of measures is 
     installed in or on a dwelling--
       ``(A) located in the United States, and
       ``(B) owned and used by the taxpayer as the taxpayer's 
     principal residence (within the meaning of section 121),
       ``(2) the original use of such component or combination of 
     measures commences with the taxpayer, and
       ``(3) such component or combination of measures reasonably 
     can be expected to remain in use for at least 5 years.
       ``(e) Certification.--
       ``(1) Methods of certification.--
       ``(A) Component-based method.--The certification described 
     in subsection (d) for any component described in such 
     subsection shall be determined on the basis of applicable 
     energy efficiency ratings (including product labeling 
     requirements) for affected building envelope components.
       ``(B) Performance-based method.--
       ``(i) In general.--The certification described in 
     subsection (d) for any combination of measures described in 
     such subsection shall be--

       ``(I) determined by comparing the projected heating and 
     cooling energy usage for the dwelling to such usage for such 
     dwelling in its original condition, and
       ``(II) accompanied by a written analysis documenting the 
     proper application of a permissible energy performance 
     calculation method to the specific circumstances of such 
     dwelling.

       ``(ii) Computer software.--Computer software shall be used 
     in support of a performance-based method certification under 
     clause (i). Such software shall meet procedures and methods 
     for calculating energy and cost savings in regulations 
     promulgated by the Secretary of Energy. Such regulations on 
     the specifications for software and verification protocols 
     shall be based on the 2001 California Residential Alternative 
     Calculation Method Approval Manual.
       ``(2) Provider.--A certification described in subsection 
     (d) shall be provided by--
       ``(A) in the case of the method described in paragraph 
     (1)(A), by a third party, such as a local building regulatory 
     authority, a utility, a manufactured home production 
     inspection primary inspection agency (IPIA), or a home energy 
     rating organization, or
       ``(B) in the case of the method described in paragraph 
     (1)(B), an individual recognized by an organization 
     designated by the Secretary for such purposes.
       ``(3) Form.--A certification described in subsection (d) 
     shall be made in writing on forms which specify in readily 
     inspectable fashion the energy efficient components and other 
     measures and their respective efficiency ratings, and which 
     include a permanent label affixed to the electrical 
     distribution panel of the dwelling.
       ``(4) Regulations.--
       ``(A) In general.--In prescribing regulations under this 
     subsection for certification methods described in paragraph 
     (1)(B), the Secretary, after examining the requirements for 
     energy consultants and home energy ratings providers 
     specified by the Mortgage Industry National Accreditation 
     Procedures for Home Energy Rating Systems, shall prescribe 
     procedures for calculating annual energy usage and cost 
     reductions for heating and cooling and for the reporting of 
     the results. Such regulations shall--
       ``(i) provide that any calculation procedures be fuel 
     neutral such that the same energy efficiency measures allow a 
     dwelling to be eligible for the credit under this section 
     regardless of whether such dwelling uses a gas or oil furnace 
     or boiler or an electric heat pump, and
       ``(ii) require that any computer software allow for the 
     printing of the Federal tax forms necessary for the credit 
     under this section and for the printing of forms for 
     disclosure to the owner of the dwelling.
       ``(B) Providers.--For purposes of paragraph (2)(B), the 
     Secretary shall establish requirements for the designation of 
     individuals based on the requirements for energy consultants 
     and home energy raters specified by the Mortgage Industry 
     National Accreditation Procedures for Home Energy Rating 
     Systems.
       ``(f) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Dollar amounts in case of joint occupancy.--In the 
     case of any dwelling unit which is jointly occupied and used 
     during any calendar year as a residence by 2 or more 
     individuals the following shall apply:
       ``(A) The amount of the credit allowable under subsection 
     (a) by reason of expenditures for the qualified energy 
     efficiency improvements made during such calendar year by any 
     of such individuals with respect to such dwelling unit shall 
     be determined by treating all of such individuals as 1 
     taxpayer whose taxable year is such calendar year.
       ``(B) There shall be allowable, with respect to such 
     expenditures to each of such individuals, a credit under 
     subsection (a) for the taxable year in which such calendar 
     year ends in an amount which bears the same ratio to the 
     amount determined under subparagraph (A) as the amount of 
     such expenditures made by such individual during such 
     calendar year bears to the aggregate of such expenditures 
     made by all of such individuals during such calendar year.
       ``(2) Tenant-stockholder in cooperative housing 
     corporation.--In the case of an individual who is a tenant-
     stockholder (as defined in section 216) in a cooperative 
     housing corporation (as defined in such section), such 
     individual shall be treated as having paid his tenant-
     stockholder's proportionate share (as defined in section 
     216(b)(3)) of the cost of qualified energy efficiency 
     improvements made by such corporation.
       ``(3) Condominiums.--
       ``(A) In general.--In the case of an individual who is a 
     member of a condominium management association with respect 
     to a condominium which the individual owns, such individual 
     shall be treated as having paid the individual's 
     proportionate share of the cost of qualified energy 
     efficiency improvements made by such association.
       ``(B) Condominium management association.--For purposes of 
     this paragraph, the term `condominium management association' 
     means an organization which meets the requirements of 
     paragraph (1) of section 528(c) (other than subparagraph (E) 
     thereof) with respect to a condominium project substantially 
     all of the units of which are used as residences.
       ``(4) Building envelope component.--The term `building 
     envelope component' means--
       ``(A) insulation material or system which is specifically 
     and primarily designed to reduce the heat loss or gain or a 
     dwelling when installed in or on such dwelling,
       ``(B) exterior windows (including skylights), and
       ``(C) exterior doors.
       ``(5) Manufactured homes included.--For purposes of this 
     section, the term `dwelling' includes a manufactured home 
     which conforms to Federal Manufactured Home Construction and 
     Safety Standards (24 C.F.R. 3280).
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section for any expenditure 
     with respect to any property, the increase in the basis of 
     such property which would (but for this subsection) result 
     from such expenditure shall be reduced by the amount of the 
     credit so allowed.
       ``(h) Application of Section.--Subsection (a) shall apply 
     to qualified energy efficiency improvements installed during 
     the period beginning on the date of the enactment of this 
     section and ending on December 31, 2006.''.
       (b) Credit Allowed Against Regular Tax and Alternative 
     Minimum Tax.--
       (1) In general.--Section 25D(b), as added by subsection 
     (a), is amended by adding at the end the following new 
     paragraph:

[[Page S3777]]

       ``(3) Limitation based on amount of tax.--The credit 
     allowed under subsection (a) for the taxable year shall not 
     exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.''.
       (2) Conforming amendments.--
       (A) Section 25D(c), as added by subsection (a), is amended 
     by striking ``section 26(a) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section)'' and inserting ``subsection (b)(3)''.
       (B) Section 23(b)(4)(B), as amended by this Act, is amended 
     by striking ``section 25C'' and inserting ``sections 25C and 
     25D''.
       (C) Section 24(b)(3)(B), as amended by this Act, is amended 
     by striking ``and 25C'' and inserting ``25C, and 25D''.
       (D) Section 25(e)(1)(C), as amended by this Act, is amended 
     by inserting ``25D,'' after ``25C,''.
       (E) Section 25B(g)(2), as amended by this Act, is amended 
     by striking ``23 and 25C'' and inserting ``23, 25C, and 
     25D''.
       (F) Section 26(a)(1), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (G) Section 904(h), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (H) Section 1400C(d), as amended by this Act, is amended by 
     striking ``and 25C'' and inserting ``25C, and 25D''.
       (c) Additional Conforming Amendments.--
       (1) Section 23(c), as in effect for taxable years beginning 
     before January 1, 2004, and as amended by this Act, is 
     amended by inserting ``, 25D,'' after ``sections 25C''.
       (2) Section 25(e)(1)(C), as in effect for taxable years 
     beginning before January 1, 2004, and as amended by this Act, 
     is amended by inserting ``25D,'' after ``25C,''.
       (3) Subsection (a) of section 1016, as amended by this Act, 
     is amended by striking ``and'' at the end of paragraph (32), 
     by striking the period at the end of paragraph (33) and 
     inserting ``; and'', and by adding at the end the following 
     new paragraph:
       ``(34) to the extent provided in section 25D(f), in the 
     case of amounts with respect to which a credit has been 
     allowed under section 25D.''.
       (4) Section 1400C(d), as in effect for taxable years 
     beginning before January 1, 2004, and as amended by this Act, 
     is amended by striking ``section 25C'' and inserting 
     ``sections 25C and 25D''.
       (5) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1, as amended by this Act, is amended 
     by inserting after the item relating to section 25C the 
     following new item:

``Sec. 25D. Energy efficiency improvements to existing homes.''.

       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to expenditures 
     after December 31, 2002, in taxable years ending after such 
     date.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 2110. 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. 2111. 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.

                   TITLE XXII--CLEAN COAL INCENTIVES

Subtitle A--Credit for Emission Reductions and Efficiency Improvements 
        in Existing Coal-Based Electricity Generation Facilities

     SEC. 2201. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL 
                   TECHNOLOGY UNIT.

       (a) Credit for Production From a Qualifying Clean Coal 
     Technology Unit.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by this Act, is amended by adding at the end the following 
     new section:

     ``SEC. 45I. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN 
                   COAL TECHNOLOGY UNIT.

       ``(a) General Rule.--For purposes of section 38, the 
     qualifying clean coal technology production credit of any 
     taxpayer for any taxable year is equal to the product of--
       ``(1) the applicable amount of clean coal technology 
     production credit, multiplied by
       ``(2) the applicable percentage of the kilowatt hours of 
     electricity produced by the taxpayer during such taxable year 
     at a qualifying clean coal technology unit, but only if such 
     production occurs during the 10-year period beginning on the 
     date the unit was returned to service after becoming a 
     qualifying clean coal technology unit.
       ``(b) Applicable Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable amount of clean coal technology production credit 
     is equal to $0.0034.
       ``(2) Inflation adjustment.--For calendar years after 2003, 
     the applicable amount of clean coal technology production 
     credit shall be adjusted by multiplying such amount by the 
     inflation adjustment factor for the calendar year in which 
     the amount is applied. If any amount as increased under the 
     preceding sentence is not a multiple of 0.01 cent, such 
     amount shall be rounded to the nearest multiple of 0.01 cent.
       ``(c) Applicable Percentage.--For purposes of this section, 
     with respect to any qualifying clean coal technology unit, 
     the applicable percentage is the percentage equal to the 
     ratio which the portion of the national megawatt capacity 
     limitation allocated to the taxpayer with respect to such 
     unit under subsection (e) bears to the total megawatt 
     capacity of such unit.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) Qualifying clean coal technology unit.--The term 
     `qualifying clean coal technology unit' means a clean coal 
     technology unit of the taxpayer which--
       ``(A) on the date of the enactment of this section was a 
     coal-based electricity generating steam generator-turbine 
     unit which was not a clean coal technology unit,
       ``(B) has a nameplate capacity rating of not more than 
     300,000 kilowatts,
       ``(C) becomes a clean coal technology unit as the result of 
     the retrofitting, repowering, or replacement of the unit with 
     clean coal technology during the 10-year period beginning on 
     the date of the enactment of this section,

[[Page S3778]]

       ``(D) is not receiving nor is scheduled to receive funding 
     under the Clean Coal Technology Program, the Power Plant 
     Improvement Initiative, or the Clean Coal Power Initiative 
     administered by the Secretary of Energy, and
       ``(E) receives an allocation of a portion of the national 
     megawatt capacity limitation under subsection (e).
       ``(2) Clean coal technology unit.--The term `clean coal 
     technology unit' means a unit which--
       ``(A) uses clean coal technology, including advanced 
     pulverized coal or atmospheric fluidized bed combustion, 
     pressurized fluidized bed combustion, integrated gasification 
     combined cycle, or any other technology for the production of 
     electricity,
       ``(B) uses coal to produce 75 percent or more of its 
     thermal output as electricity,
       ``(C) has a design net heat rate of at least 500 less than 
     that of such unit as described in paragraph (1)(A),
       ``(D) has a maximum design net heat rate of not more than 
     9,500, and
       ``(E) meets the pollution control requirements of paragraph 
     (3).
       ``(3) Pollution control requirements.--
       ``(A) In general.--A unit meets the requirements of this 
     paragraph if--
       ``(i) its emissions of sulfur dioxide, nitrogen oxide, or 
     particulates meet the lower of the emission levels for each 
     such emission specified in--

       ``(I) subparagraph (B), or
       ``(II) the new source performance standards of the Clean 
     Air Act (42 U.S.C. 7411) which are in effect for the category 
     of source at the time of the retrofitting, repowering, or 
     replacement of the unit, and

       ``(ii) its emissions do not exceed any relevant emission 
     level specified by regulation pursuant to the hazardous air 
     pollutant requirements of the Clean Air Act (42 U.S.C. 7412) 
     in effect at the time of the retrofitting, repowering, or 
     replacement.
       ``(B) Specific levels.--The levels specified in this 
     subparagraph are--
       ``(i) in the case of sulfur dioxide emissions, 50 percent 
     of the sulfur dioxide emission levels specified in the new 
     source performance standards of the Clean Air Act (42 U.S.C. 
     7411) in effect on the date of the enactment of this section 
     for the category of source,
       ``(ii) in the case of nitrogen oxide emissions--

       ``(I) 0.1 pound per million Btu of heat input if the unit 
     is not a cyclone-fired boiler, and
       ``(II) if the unit is a cyclone-fired boiler, 15 percent of 
     the uncontrolled nitrogen oxide emissions from such boilers, 
     and

       ``(iii) in the case of particulate emissions, 0.02 pound 
     per million Btu of heat input.
       ``(4) Design net heat rate.--The design net heat rate with 
     respect to any unit, measured in Btu per kilowatt hour 
     (HHV)--
       ``(A) shall be based on the design annual heat input to and 
     the design annual net electrical output from such unit 
     (determined without regard to such unit's co-generation of 
     steam),
       ``(B) shall be adjusted for the heat content of the design 
     coal to be used by the unit if it is less than 12,000 Btu per 
     pound according to the following formula:

     Design net heat rate = Unit net heat rate [l- {((12,000-
     design coal heat content, Btu per pound)/1,000) 0.013}], and
       ``(C) shall be corrected for the site reference conditions 
     of--
       ``(i) elevation above sea level of 500 feet,
       ``(ii) air pressure of 14.4 pounds per square inch absolute 
     (psia),
       ``(iii) temperature, dry bulb of 63 deg.F,
       ``(iv) temperature, wet bulb of 54 deg.F, and
       ``(v) relative humidity of 55 percent.
       ``(5) HHV.--The term `HHV' means higher heating value.
       ``(6) Application of certain rules.--The rules of 
     paragraphs (3), (4), and (5) of section 45(d) shall apply.
       ``(7) Inflation adjustment factor.--
       ``(A) In general.--The term `inflation adjustment factor' 
     means, with respect to a calendar year, a fraction the 
     numerator of which is the GDP implicit price deflator for the 
     preceding calendar year and the denominator of which is the 
     GDP implicit price deflator for the calendar year 2002.
       ``(B) GDP implicit price deflator.--The term `GDP implicit 
     price deflator' means the most recent revision of the 
     implicit price deflator for the gross domestic product as 
     computed by the Department of Commerce before March 15 of the 
     calendar year.
       ``(8) Noncompliance with pollution laws.--For purposes of 
     this section, a unit which is not in compliance with the 
     applicable State and Federal pollution prevention, control, 
     and permit requirements for any period of time shall not be 
     considered to be a qualifying clean coal technology unit 
     during such period.
       ``(e) National Limitation on the Aggregate Capacity of 
     Qualifying Clean Coal Technology Units.--
       ``(1) In general.--For purposes of subsection (d)(1)(E), 
     the national megawatt capacity limitation for qualifying 
     clean coal technology units is 4,000 megawatts.
       ``(2) Allocation of limitation.--The Secretary shall 
     allocate the national megawatt capacity limitation for 
     qualifying clean coal technology units in such manner as the 
     Secretary may prescribe under the regulations under paragraph 
     (3).
       ``(3) Regulations.--Not later than 6 months after the date 
     of the enactment of this section, the Secretary shall 
     prescribe such regulations as may be necessary or 
     appropriate--
       ``(A) to carry out the purposes of this subsection,
       ``(B) to limit the capacity of any qualifying clean coal 
     technology unit to which this section applies so that the 
     combined megawatt capacity allocated to all such units under 
     this subsection when all such units are placed in service 
     during the 10-year period described in subsection (d)(1)(C), 
     does not exceed 4,000 megawatts,
       ``(C) to provide a certification process under which the 
     Secretary, in consultation with the Secretary of Energy, 
     shall approve and allocate the national megawatt capacity 
     limitation--
       ``(i) to encourage that units with the highest thermal 
     efficiencies, when adjusted for the heat content of the 
     design coal and site reference conditions described in 
     subsection (d)(4)(C), and environmental performance be placed 
     in service as soon as possible,
       ``(ii) to allocate capacity to taxpayers that have a 
     definite and credible plan for placing into commercial 
     operation a qualifying clean coal technology unit, 
     including--

       ``(I) a site,
       ``(II) contractual commitments for procurement and 
     construction or, in the case of regulated utilities, the 
     agreement of the State utility commission,
       ``(III) filings for all necessary preconstruction 
     approvals,
       ``(IV) a demonstrated record of having successfully 
     completed comparable projects on a timely basis, and
       ``(V) such other factors that the Secretary determines are 
     appropriate,

       ``(D) to allocate the national megawatt capacity limitation 
     to a portion of the capacity of a qualifying clean coal 
     technology unit if the Secretary determines that such an 
     allocation would maximize the amount of efficient production 
     encouraged with the available tax credits,
       ``(E) to set progress requirements and conditional 
     approvals so that capacity allocations for clean coal 
     technology units that become unlikely to meet the necessary 
     conditions for qualifying can be reallocated by the Secretary 
     to other clean coal technology units, and
       ``(F) to provide taxpayers with opportunities to correct 
     administrative errors and omissions with respect to 
     allocations and record keeping within a reasonable period 
     after discovery, taking into account the availability of 
     regulations and other administrative guidance from the 
     Secretary.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (18), by striking the period at the end of 
     paragraph (19) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(20) the qualifying clean coal technology production 
     credit determined under section 45I(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(16) No carryback of section 45i credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying clean 
     coal technology production credit determined under section 
     45I may be carried back to a taxable year ending on or before 
     the date of the enactment of section 45I.''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45I. Credit for production from a qualifying clean coal 
              technology unit.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

 Subtitle B--Incentives for Early Commercial Applications of Advanced 
                        Clean Coal Technologies

     SEC. 2211. CREDIT FOR INVESTMENT IN QUALIFYING ADVANCED CLEAN 
                   COAL TECHNOLOGY.

       (a) Allowance of Qualifying Advanced Clean Coal Technology 
     Unit Credit.--Section 46 (relating to amount of credit) is 
     amended by striking ``and'' at the end of paragraph (2), by 
     striking the period at the end of paragraph (3) and inserting 
     ``, and'', and by adding at the end the following new 
     paragraph:
       ``(4) the qualifying advanced clean coal technology unit 
     credit.''.
       (b) Amount of Qualifying Advanced Clean Coal Technology 
     Unit Credit.--Subpart E of part IV of subchapter A of chapter 
     1 (relating to rules for computing investment credit) is 
     amended by inserting after section 48 the following new 
     section:

     ``SEC. 48A. QUALIFYING ADVANCED CLEAN COAL TECHNOLOGY UNIT 
                   CREDIT.

       ``(a) In General.--For purposes of section 46, the 
     qualifying advanced clean coal technology unit credit for any 
     taxable year is an amount equal to 10 percent of the 
     applicable percentage of the qualified investment in a 
     qualifying advanced clean coal technology unit for such 
     taxable year.
       ``(b) Qualifying Advanced Clean Coal Technology Unit.--
       ``(1) In general.--For purposes of subsection (a), the term 
     `qualifying advanced clean coal technology unit' means an 
     advanced clean coal technology unit of the taxpayer--
       ``(A)(i)(I) in the case of a unit first placed in service 
     after the date of the enactment of this section, the original 
     use of which commences with the taxpayer, or
       ``(II) in the case of the retrofitting or repowering of a 
     unit first placed in service before such date of enactment, 
     the retrofitting or repowering of which is completed by the 
     taxpayer after such date, or
       ``(ii) which is acquired through purchase (as defined by 
     section 179(d)(2)),
       ``(B) which is depreciable under section 167,
       ``(C) which has a useful life of not less than 4 years,
       ``(D) which is located in the United States,

[[Page S3779]]

       ``(E) which is not receiving nor is scheduled to receive 
     funding under the Clean Coal Technology Program, the Power 
     Plant Improvement Initiative, or the Clean Coal Power 
     Initiative administered by the Secretary of Energy,
       ``(F) which is not a qualifying clean coal technology unit, 
     and
       ``(G) which receives an allocation of a portion of the 
     national megawatt capacity limitation under subsection (f).
       ``(2) Special rule for sale-leasebacks.--For purposes of 
     subparagraph (A) of paragraph (1), in the case of a unit 
     which--
       ``(A) is originally placed in service by a person, and
       ``(B) is sold and leased back by such person, or is leased 
     to such person, within 3 months after the date such unit was 
     originally placed in service, for a period of not less than 
     12 years,

     such unit shall be treated as originally placed in service 
     not earlier than the date on which such unit is used under 
     the leaseback (or lease) referred to in subparagraph (B). The 
     preceding sentence shall not apply to any property if the 
     lessee and lessor of such property make an election under 
     this sentence. Such an election, once made, may be revoked 
     only with the consent of the Secretary.
       ``(3) Noncompliance with pollution laws.--For purposes of 
     this subsection, a unit which is not in compliance with the 
     applicable State and Federal pollution prevention, control, 
     and permit requirements for any period of time shall not be 
     considered to be a qualifying advanced clean coal technology 
     unit during such period.
       ``(c) Applicable Percentage.--For purposes of this section, 
     with respect to any qualifying advanced clean coal technology 
     unit, the applicable percentage is the percentage equal to 
     the ratio which the portion of the national megawatt capacity 
     limitation allocated to the taxpayer with respect to such 
     unit under subsection (f) bears to the total megawatt 
     capacity of such unit.
       ``(d) Advanced Clean Coal Technology Unit.--For purposes of 
     this section--
       ``(1) In general.--The term `advanced clean coal technology 
     unit' means a new, retrofit, or repowering unit of the 
     taxpayer which--
       ``(A) is--
       ``(i) an eligible advanced pulverized coal or atmospheric 
     fluidized bed combustion technology unit,
       ``(ii) an eligible pressurized fluidized bed combustion 
     technology unit,
       ``(iii) an eligible integrated gasification combined cycle 
     technology unit, or
       ``(iv) an eligible other technology unit, and
       ``(B) meets the carbon emission rate requirements of 
     paragraph (6).
       ``(2) Eligible advanced pulverized coal or atmospheric 
     fluidized bed combustion technology unit.--The term `eligible 
     advanced pulverized coal or atmospheric fluidized bed 
     combustion technology unit' means a clean coal technology 
     unit using advanced pulverized coal or atmospheric fluidized 
     bed combustion technology which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2013, and
       ``(B) has a design net heat rate of not more than 8,350 
     (8,750 in the case of units placed in service before 2009).
       ``(3) Eligible pressurized fluidized bed combustion 
     technology unit.--The term `eligible pressurized fluidized 
     bed combustion technology unit' means a clean coal technology 
     unit using pressurized fluidized bed combustion technology 
     which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2017, and
       ``(B) has a design net heat rate of not more than 7,720 
     (8,750 in the case of units placed in service before 2009, 
     and 8,350 in the case of units placed in service after 2008 
     and before 2013).
       ``(4) Eligible integrated gasification combined cycle 
     technology unit.--The term `eligible integrated gasification 
     combined cycle technology unit' means a clean coal technology 
     unit using integrated gasification combined cycle technology, 
     with or without fuel or chemical co-production, which--
       ``(A) is placed in service after the date of the enactment 
     of this section and before January 1, 2017,
       ``(B) has a design net heat rate of not more than 7,720 
     (8,750 in the case of units placed in service before 2009, 
     and 8,350 in the case of units placed in service after 2008 
     and before 2013), and
       ``(C) has a net thermal efficiency (HHV) using coal with 
     fuel or chemical co-production of not less than 43.9 percent 
     (39 percent in the case of units placed in service before 
     2009, and 40.9 percent in the case of units placed in service 
     after 2008 and before 2013).
       ``(5) Eligible other technology unit.--The term `eligible 
     other technology unit' means a clean coal technology unit 
     using any other technology for the production of electricity 
     which is placed in service after the date of the enactment of 
     this section and before January 1, 2017.
       ``(6) Carbon emission rate requirements.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a unit meets the requirements of this paragraph if--
       ``(i) in the case of a unit using design coal with a heat 
     content of not more than 9,000 Btu per pound, the carbon 
     emission rate is less than 0.60 pound of carbon per kilowatt 
     hour, and
       ``(ii) in the case of a unit using design coal with a heat 
     content of more than 9,000 Btu per pound, the carbon emission 
     rate is less than 0.54 pound of carbon per kilowatt hour.
       ``(B) Eligible other technology unit.--In the case of an 
     eligible other technology unit, subparagraph (A) shall be 
     applied by substituting `0.51' and `0.459' for `0.60' and 
     `0.54', respectively.
       ``(e) General Definitions.--Any term used in this section 
     which is also used in section 45I shall have the meaning 
     given such term in section 45I.
       ``(f) National Limitation on the Aggregate Capacity of 
     Advanced Clean Coal Technology Units.--
       ``(1) In general.--For purposes of subsection (b)(1)(G), 
     the national megawatt capacity limitation is--
       ``(A) for qualifying advanced clean coal technology units 
     using advanced pulverized coal or atmospheric fluidized bed 
     combustion technology, not more than 1,000 megawatts (not 
     more than 500 megawatts in the case of units placed in 
     service before 2009),
       ``(B) for such units using pressurized fluidized bed 
     combustion technology, not more than 500 megawatts (not more 
     than 250 megawatts in the case of units placed in service 
     before 2009),
       ``(C) for such units using integrated gasification combined 
     cycle technology, with or without fuel or chemical co-
     production, not more than 2,000 megawatts (not more than 
     1,000 megawatts in the case of units placed in service before 
     2009 and not more than 1,500 megawatts in the case of units 
     placed in service after 2008 and before 2013), and
       ``(D) for such units using other technology for the 
     production of electricity, not more than 500 megawatts (not 
     more than 250 megawatts in the case of units placed in 
     service before 2009).
       ``(2) Allocation of limitation.--The Secretary shall 
     allocate the national megawatt capacity limitation for 
     qualifying advanced clean coal technology units in such 
     manner as the Secretary may prescribe under the regulations 
     under paragraph (3).
       ``(3) Regulations.--Not later than 6 months after the date 
     of the enactment of this section, the Secretary shall 
     prescribe such regulations as may be necessary or 
     appropriate--
       ``(A) to carry out the purposes of this subsection and 
     section 45J,
       ``(B) to limit the capacity of any qualifying advanced 
     clean coal technology unit to which this section applies so 
     that the combined megawatt capacity of all such units to 
     which this section applies does not exceed 4,000 megawatts,
       ``(C) to provide a certification process described in 
     section 45I(e)(3)(C),
       ``(D) to carry out the purposes described in subparagraphs 
     (D), (E), and (F) of section 45I(e)(3), and
       ``(E) to reallocate capacity which is not allocated to any 
     technology described in subparagraphs (A) through (D) of 
     paragraph (1) because an insufficient number of qualifying 
     units request an allocation for such technology, to another 
     technology described in such subparagraphs in order to 
     maximize the amount of energy efficient production encouraged 
     with the available tax credits.
       ``(4) Selection criteria.--For purposes of paragraph 
     (3)(C), the selection criteria for allocating the national 
     megawatt capacity limitation to qualifying advanced clean 
     coal technology units--
       ``(A) shall be established by the Secretary of Energy as 
     part of a competitive solicitation,
       ``(B) shall include primary criteria of minimum design net 
     heat rate, maximum design thermal efficiency, environmental 
     performance, and lowest cost to the Government, and
       ``(C) shall include supplemental criteria as determined 
     appropriate by the Secretary of Energy.
       ``(g) Qualified Investment.--For purposes of subsection 
     (a), the term `qualified investment' means, with respect to 
     any taxable year, the basis of a qualifying advanced clean 
     coal technology unit placed in service by the taxpayer during 
     such taxable year (in the case of a unit described in 
     subsection (b)(1)(A)(i)(II), only that portion of the basis 
     of such unit which is properly attributable to the 
     retrofitting or repowering of such unit).
       ``(h) Qualified Progress Expenditures.--
       ``(1) Increase in qualified investment.--In the case of a 
     taxpayer who has made an election under paragraph (5), the 
     amount of the qualified investment of such taxpayer for the 
     taxable year (determined under subsection (g) without regard 
     to this subsection) shall be increased by an amount equal to 
     the aggregate of each qualified progress expenditure for the 
     taxable year with respect to progress expenditure property.
       ``(2) Progress expenditure property defined.--For purposes 
     of this subsection, the term `progress expenditure property' 
     means any property being constructed by or for the taxpayer 
     and which it is reasonable to believe will qualify as a 
     qualifying advanced clean coal technology unit which is being 
     constructed by or for the taxpayer when it is placed in 
     service.
       ``(3) Qualified progress expenditures defined.--For 
     purposes of this subsection--
       ``(A) Self-constructed property.--In the case of any self-
     constructed property, the term `qualified progress 
     expenditures' means the amount which, for purposes of this 
     subpart, is properly chargeable (during such taxable year) to 
     capital account with respect to such property.
       ``(B) Nonself-constructed property.--In the case of 
     nonself-constructed property, the term `qualified progress 
     expenditures' means the amount paid during the taxable year 
     to another person for the construction of such property.
       ``(4) Other definitions.--For purposes of this subsection--
       ``(A) Self-constructed property.--The term `self-
     constructed property' means property for which it is 
     reasonable to believe that more than half of the construction 
     expenditures will be made directly by the taxpayer.
       ``(B) Nonself-constructed property.--The term `nonself-
     constructed property' means property which is not self-
     constructed property.
       ``(C) Construction, etc.--The term `construction' includes 
     reconstruction and erection, and the term `constructed' 
     includes reconstructed and erected.
       ``(D) Only construction of qualifying advanced clean coal 
     technology unit to be

[[Page S3780]]

     taken into account.--Construction shall be taken into account 
     only if, for purposes of this subpart, expenditures therefor 
     are properly chargeable to capital account with respect to 
     the property.
       ``(5) Election.--An election under this subsection may be 
     made at such time and in such manner as the Secretary may by 
     regulations prescribe. Such an election shall apply to the 
     taxable year for which made and to all subsequent taxable 
     years. Such an election, once made, may not be revoked except 
     with the consent of the Secretary.
       ``(i) Coordination With Other Credits.--This section shall 
     not apply to any property with respect to which the 
     rehabilitation credit under section 47 or the energy credit 
     under section 48 is allowed unless the taxpayer elects to 
     waive the application of such credit to such property.''.
       (c) Recapture.--Section 50(a) (relating to other special 
     rules) is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules relating to qualifying advanced clean 
     coal technology unit.--For purposes of applying this 
     subsection in the case of any credit allowable by reason of 
     section 48A, the following shall apply:
       ``(A) General rule.--In lieu of the amount of the increase 
     in tax under paragraph (1), the increase in tax shall be an 
     amount equal to the investment tax credit allowed under 
     section 38 for all prior taxable years with respect to a 
     qualifying advanced clean coal technology unit (as defined by 
     section 48A(b)(1)) multiplied by a fraction whose numerator 
     is the number of years remaining to fully depreciate under 
     this title the qualifying advanced clean coal technology unit 
     disposed of, and whose denominator is the total number of 
     years over which such unit would otherwise have been subject 
     to depreciation. For purposes of the preceding sentence, the 
     year of disposition of the qualifying advanced clean coal 
     technology unit shall be treated as a year of remaining 
     depreciation.
       ``(B) Property ceases to qualify for progress 
     expenditures.--Rules similar to the rules of paragraph (2) 
     shall apply in the case of qualified progress expenditures 
     for a qualifying advanced clean coal technology unit under 
     section 48A, except that the amount of the increase in tax 
     under subparagraph (A) of this paragraph shall be substituted 
     for the amount described in such paragraph (2).
       ``(C) Application of paragraph.--This paragraph shall be 
     applied separately with respect to the credit allowed under 
     section 38 regarding a qualifying advanced clean coal 
     technology unit.''.
       (d) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(17) No carryback of section 48a credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying advanced 
     clean coal technology unit credit determined under section 
     48A may be carried back to a taxable year ending on or before 
     the date of the enactment of section 48A.''.
       (e) Technical Amendments.--
       (1) Section 49(a)(1)(C) is amended by striking ``and'' at 
     the end of clause (ii), by striking the period at the end of 
     clause (iii) and inserting ``, and'', and by adding at the 
     end the following new clause:
       ``(iv) the portion of the basis of any qualifying advanced 
     clean coal technology unit attributable to any qualified 
     investment (as defined by section 48A(g)).''.
       (2) Section 50(a)(4) is amended by striking ``and (2)'' and 
     inserting ``(2), and (6)''.
       (3) Section 50(c) is amended by adding at the end the 
     following new paragraph:
       ``(6) Nonapplication.--Paragraphs (1) and (2) shall not 
     apply to any qualifying advanced clean coal technology unit 
     credit under section 48A.''.
       (4) The table of sections for subpart E of part IV of 
     subchapter A of chapter 1 is amended by inserting after the 
     item relating to section 48 the following new item:

``Sec. 48A. Qualifying advanced clean coal technology unit credit.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, under rules similar to the rules of section 48(m) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

     SEC. 2212. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED 
                   CLEAN COAL TECHNOLOGY UNIT.

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

     ``SEC. 45J. CREDIT FOR PRODUCTION FROM A QUALIFYING ADVANCED 
                   CLEAN COAL TECHNOLOGY UNIT.

       ``(a) General Rule.--For purposes of section 38, the 
     qualifying advanced clean coal technology production credit 
     of any taxpayer for any taxable year is equal to--
       ``(1) the applicable amount of advanced clean coal 
     technology production credit, multiplied by
       ``(2) the applicable percentage (as determined under 
     section 48A(c)) of the sum of--
       ``(A) the kilowatt hours of electricity, plus
       ``(B) each 3,413 Btu of fuels or chemicals,
     produced by the taxpayer during such taxable year at a 
     qualifying advanced clean coal technology unit during the 10-
     year period beginning on the date the unit was originally 
     placed in service (or returned to service after becoming a 
     qualifying advanced clean coal technology unit).
       ``(b) Applicable Amount.--For purposes of this section, the 
     applicable amount of advanced clean coal technology 
     production credit with respect to production from a 
     qualifying advanced clean coal technology unit shall be 
     determined as follows:
       ``(1) Where the qualifying advanced clean coal technology 
     unit is producing electricity only:
       ``(A) In the case of a unit originally placed in service 
     before 2009, if--
       

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0060                  $.0038
        More than 8,400            $.0025                  $.0010
         but not more
         than 8,550.
        More than 8,550            $.0010                 $.0010.
         but less than
         8,750.
------------------------------------------------------------------------

       ``(B) In the case of a unit originally placed in service 
     after 2008 and before 2013, if--
       

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0105                  $.0090
        More than 7,770            $.0085                  $.0068
         but not more
         than 8,125.
        More than 8,125            $.0075                 $.0055.
         but less than
         8,350.
------------------------------------------------------------------------

       ``(C) In the case of a unit originally placed in service 
     after 2012 and before 2017, if--
       

------------------------------------------------------------------------
                                     The applicable amount is:
         ``The design net ----------------------------------------------
          heat rate is:      For 1st 5 years of      For 2d 5 years of
                                such service            such service
------------------------------------------------------------------------
 
        Not more than              $.0140                  $.0115
        More than 7,380            $.0120                 $.0090.
         but not more
         than 7,720.
------------------------------------------------------------------------


[[Page S3781]]

       ``(2) Where the qualifying advanced clean coal technology 
     unit is producing fuel or chemicals:
       ``(A) In the case of a unit originally placed in service 
     before 2009, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0060                  $.0038
        Less than 40.6             $.0025                  $.0010
         but not less
         than 40 percent.
        Less than 40 but           $.0010                 $.0010.
         not less than 39
         percent.
------------------------------------------------------------------------

       ``(B) In the case of a unit originally placed in service 
     after 2008 and before 2013, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0105                  $.0090
        Less than 43.6             $.0085                  $.0068
         but not less
         than 42 percent.
        Less than 42 but           $.0075                 $.0055.
         not less than
         40.9 percent.
------------------------------------------------------------------------

       ``(C) In the case of a unit originally placed in service 
     after 2012 and before 2017, if--
       

------------------------------------------------------------------------
        ``The unit design            The applicable amount is:
           net thermal    ----------------------------------------------
         efficiency (HHV)    For 1st 5 years of      For 2d 5 years of
               is:              such service            such service
------------------------------------------------------------------------
 
        Not less than              $.0140                  $.0115
        Less than 44.2             $.0120                 $.0090.
         but not less
         than 43.9
         percent.
------------------------------------------------------------------------

       ``(c) Inflation Adjustment.--For calendar years after 2003, 
     each amount in paragraphs (1) and (2) of subsection (b) shall 
     be adjusted by multiplying such amount by the inflation 
     adjustment factor for the calendar year in which the amount 
     is applied. If any amount as increased under the preceding 
     sentence is not a multiple of 0.01 cent, such amount shall be 
     rounded to the nearest multiple of 0.01 cent.
       ``(d) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) In general.--Any term used in this section which is 
     also used in section 45I or 48A shall have the meaning given 
     such term in such section.
       ``(2) Applicable rules.--The rules of paragraphs (3), (4), 
     and (5) of section 45(d) shall apply.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (19), by striking the period at the end of 
     paragraph (20) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(21) the qualifying advanced clean coal technology 
     production credit determined under section 45J(a).''.
       (c) Transitional Rule.--Section 39(d) (relating to 
     transitional rules), as amended by this Act, is amended by 
     adding at the end the following new paragraph:
       ``(18) No carryback of section 45j credit before effective 
     date.--No portion of the unused business credit for any 
     taxable year which is attributable to the qualifying advanced 
     clean coal technology production credit determined under 
     section 45J may be carried back to a taxable year ending on 
     or before the date of the enactment of section 45J.''.
       (d) Denial of Double Benefit.--Section 29(d) (relating to 
     other definitions and special rules) is amended by adding at 
     the end the following new paragraph:
       ``(9) Denial of double benefit.--This section shall not 
     apply with respect to any qualified fuel the production of 
     which may be taken into account for purposes of determining 
     the credit under section 45J.''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45J. Credit for production from a qualifying advanced clean coal 
              technology unit.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

     Subtitle C--Treatment of Persons Not Able To Use Entire Credit

     SEC. 2221. TREATMENT OF PERSONS NOT ABLE TO USE ENTIRE 
                   CREDIT.

       (a) In General.--Section 45I, as added by this Act, is 
     amended by adding at the end the following new subsection:
       ``(f) Treatment of Person Not Able To Use Entire Credit.--
       ``(1) Allowance of credits.--
       ``(A) In general.--Any credit allowable under this section, 
     section 45J, or section 48A with respect to a facility owned 
     by a person described in subparagraph (B) may be transferred 
     or used as provided in this subsection, and the determination 
     as to whether the credit is allowable shall be made without 
     regard to the tax-exempt status of the person.
       ``(B) Persons described.--A person is described in this 
     subparagraph if the person is--
       ``(i) an organization described in section 501(c)(12)(C) 
     and exempt from tax under section 501(a),
       ``(ii) an organization described in section 1381(a)(2)(C),
       ``(iii) a public utility (as defined in section 
     136(c)(2)(B)),
       ``(iv) any State or political subdivision thereof, the 
     District of Columbia, or any agency or instrumentality of any 
     of the foregoing,
       ``(v) any Indian tribal government (within the meaning of 
     section 7871) or any agency or instrumentality thereof, or
       ``(vi) the Tennessee Valley Authority.
       ``(2) Transfer of credit.--
       ``(A) In general.--A person described in clause (i), (ii), 
     (iii), (iv), or (v) of paragraph (1)(B) may transfer any 
     credit to which paragraph (1)(A) applies through an 
     assignment to any other person not described in paragraph 
     (1)(B). Such transfer may be revoked only with the consent of 
     the Secretary.
       ``(B) Regulations.--The Secretary shall prescribe such 
     regulations as necessary to insure that any credit described 
     in subparagraph (A) is claimed once and not reassigned by 
     such other person.
       ``(C) Transfer proceeds treated as arising from essential 
     government function.--Any proceeds derived by a person 
     described in clause (iii), (iv), or (v) of paragraph (1)(B) 
     from the transfer of any credit under subparagraph (A) shall 
     be treated as arising from the exercise of an essential 
     government function.
       ``(3) Use of credit as an offset.--Notwithstanding any 
     other provision of law, in the case of a person described in 
     clause (i), (ii), or (v) of paragraph (1)(B), any credit to 
     which paragraph (1)(A) applies may be applied by such person, 
     to the extent provided by the Secretary of Agriculture, as a 
     prepayment of any loan, debt, or other obligation the entity 
     has incurred under subchapter I of chapter 31 of title 7 of 
     the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), 
     as in effect on the date of the enactment of this section.
       ``(4) Use by tva.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, in the case of a person described in paragraph 
     (1)(B)(vi), any credit to which paragraph (1)(A) applies may 
     be applied as a credit against the payments required to be 
     made in any fiscal year under section 15d(e) of the Tennessee 
     Valley Authority Act of 1933 (16 U.S.C. 831n-4(e)) as an 
     annual return on the appropriations investment and an annual 
     repayment sum.
       ``(B) Treatment of credits.--The aggregate amount of 
     credits described in paragraph (1)(A) with respect to such 
     person shall be treated in the same manner and to the same 
     extent as if such credits were a payment in cash and shall

[[Page S3782]]

     be applied first against the annual return on the 
     appropriations investment.
       ``(C) Credit carryover.--With respect to any fiscal year, 
     if the aggregate amount of credits described paragraph (1)(A) 
     with respect to such person exceeds the aggregate amount of 
     payment obligations described in subparagraph (A), the excess 
     amount shall remain available for application as credits 
     against the amounts of such payment obligations in succeeding 
     fiscal years in the same manner as described in this 
     paragraph.
       ``(5) Credit not income.--Any transfer under paragraph (2) 
     or use under paragraph (3) of any credit to which paragraph 
     (1)(A) applies shall not be treated as income for purposes of 
     section 501(c)(12).
       ``(6) Treatment of unrelated persons.--For purposes of this 
     subsection, sales among and between persons described in 
     clauses (i), (ii), (iii), (iv), and (v) of paragraph (1)(A) 
     shall be treated as sales between unrelated parties.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to production after the date of the enactment of 
     this Act, in taxable years ending after such date.

                  TITLE XXIII--OIL AND GAS PROVISIONS

     SEC. 2301. OIL AND GAS FROM MARGINAL WELLS.

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

     ``SEC. 45K. CREDIT FOR PRODUCING OIL AND GAS FROM MARGINAL 
                   WELLS.

       ``(a) General Rule.--For purposes of section 38, the 
     marginal well production credit for any taxable year is an 
     amount equal to the product of--
       ``(1) the credit amount, and
       ``(2) the qualified credit oil production and the qualified 
     natural gas production which is attributable to the taxpayer.
       ``(b) Credit Amount.--For purposes of this section--
       ``(1) In general.--The credit amount is--
       ``(A) $3 per barrel of qualified crude oil production, and
       ``(B) 50 cents per 1,000 cubic feet of qualified natural 
     gas production.
       ``(2) Reduction as oil and gas prices increase.--
       ``(A) In general.--The $3 and 50 cents amounts under 
     paragraph (1) shall each be reduced (but not below zero) by 
     an amount which bears the same ratio to such amount 
     (determined without regard to this paragraph) as--
       ``(i) the excess (if any) of the applicable reference price 
     over $15 ($1.67 for qualified natural gas production), bears 
     to
       ``(ii) $3 ($0.33 for qualified natural gas production).

     The applicable reference price for a taxable year is the 
     reference price of the calendar year preceding the calendar 
     year in which the taxable year begins.
       ``(B) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2002, each of the 
     dollar amounts contained in subparagraph (A) shall be 
     increased to an amount equal to such dollar amount multiplied 
     by the inflation adjustment factor for such calendar year 
     (determined under section 43(b)(3)(B) by substituting `2001' 
     for `1990').
       ``(C) Reference price.--For purposes of this paragraph, the 
     term `reference price' means, with respect to any calendar 
     year--
       ``(i) in the case of qualified crude oil production, the 
     reference price determined under section 29(d)(2)(C), and
       ``(ii) in the case of qualified natural gas production, the 
     Secretary's estimate of the annual average wellhead price per 
     1,000 cubic feet for all domestic natural gas.
       ``(c) Qualified Crude Oil and Natural Gas Production.--For 
     purposes of this section--
       ``(1) In general.--The terms `qualified crude oil 
     production' and `qualified natural gas production' mean 
     domestic crude oil or natural gas which is produced from a 
     qualified marginal well.
       ``(2) Limitation on amount of production which may 
     qualify.--
       ``(A) In general.--Crude oil or natural gas produced during 
     any taxable year from any well shall not be treated as 
     qualified crude oil production or qualified natural gas 
     production to the extent production from the well during the 
     taxable year exceeds 1,095 barrels or barrel equivalents.
       ``(B) Proportionate reductions.--
       ``(i) Short taxable years.--In the case of a short taxable 
     year, the limitations under this paragraph shall be 
     proportionately reduced to reflect the ratio which the number 
     of days in such taxable year bears to 365.
       ``(ii) Wells not in production entire year.--In the case of 
     a well which is not capable of production during each day of 
     a taxable year, the limitations under this paragraph 
     applicable to the well shall be proportionately reduced to 
     reflect the ratio which the number of days of production 
     bears to the total number of days in the taxable year.
       ``(3) Definitions.--
       ``(A) Qualified marginal well.--The term `qualified 
     marginal well' means a domestic well--
       ``(i) the production from which during the taxable year is 
     treated as marginal production under section 613A(c)(6), or
       ``(ii) which, during the taxable year--

       ``(I) has average daily production of not more than 25 
     barrel equivalents, and
       ``(II) produces water at a rate not less than 95 percent of 
     total well effluent.

       ``(B) Crude oil, etc.--The terms `crude oil', `natural 
     gas', `domestic', and `barrel' have the meanings given such 
     terms by section 613A(e).
       ``(C) Barrel equivalent.--The term `barrel equivalent' 
     means, with respect to natural gas, a conversation ratio of 
     6,000 cubic feet of natural gas to 1 barrel of crude oil.
       ``(d) Other Rules.--
       ``(1) Production attributable to the taxpayer.--In the case 
     of a qualified marginal well in which there is more than one 
     owner of operating interests in the well and the crude oil or 
     natural gas production exceeds the limitation under 
     subsection (c)(2), qualifying crude oil production or 
     qualifying natural gas production attributable to the 
     taxpayer shall be determined on the basis of the ratio which 
     taxpayer's revenue interest in the production bears to the 
     aggregate of the revenue interests of all operating interest 
     owners in the production.
       ``(2) Operating interest required.--Any credit under this 
     section may be claimed only on production which is 
     attributable to the holder of an operating interest.
       ``(3) Production from nonconventional sources excluded.--In 
     the case of production from a qualified marginal well which 
     is eligible for the credit allowed under section 29 for the 
     taxable year, no credit shall be allowable under this section 
     unless the taxpayer elects not to claim the credit under 
     section 29 with respect to the well.
       ``(4) Noncompliance with pollution laws.--For purposes of 
     subsection (c)(3)(A), a marginal well which is not in 
     compliance with the applicable State and Federal pollution 
     prevention, control, and permit requirements for any period 
     of time shall not be considered to be a qualified marginal 
     well during such period.''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (20), by striking the period at the end of 
     paragraph (21) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(22) the marginal oil and gas well production credit 
     determined under section 45K(a).''.
       (c) No Carryback of Marginal Oil and Gas Well Production 
     Credit Before Effective Date.--Subsection (d) of section 39, 
     as amended by this Act, is amended by adding at the end the 
     following new paragraph:
       ``(19) No carryback of marginal oil and gas well production 
     credit before effective date.--No portion of the unused 
     business credit for any taxable year which is attributable to 
     the marginal oil and gas well production credit determined 
     under section 45K may be carried back to a taxable year 
     ending on or before the date of the enactment of section 
     45K.''.
       (d) Coordination With Section 29.--Section 29(a) is amended 
     by striking ``There'' and inserting ``At the election of the 
     taxpayer, there''.
       (e) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45K. Credit for producing oil and gas from marginal wells.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to production in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 2302. NATURAL GAS GATHERING LINES TREATED AS 7-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (C) of section 168(e)(3) 
     (relating to classification of certain property) is amended 
     by striking ``and'' at the end of clause (i), by 
     redesignating clause (ii) as clause (iii), and by inserting 
     after clause (i) the following new clause:
       ``(ii) any natural gas gathering line, and''.
       (b) Natural Gas Gathering Line.--Subsection (i) of section 
     168, as amended by this Act, is amended by adding at the end 
     the following new paragraph:
       ``(16) Natural gas gathering line.--The term `natural gas 
     gathering line' means--
       ``(A) the pipe, equipment, and appurtenances determined to 
     be a gathering line by the Federal Energy Regulatory 
     Commission, or
       ``(B) the pipe, equipment, and appurtenances used to 
     deliver natural gas from the wellhead or a commonpoint to the 
     point at which such gas first reaches--
       ``(i) a gas processing plant,
       ``(ii) an interconnection with a transmission pipeline 
     certificated by the Federal Energy Regulatory Commission as 
     an interstate transmission pipeline,
       ``(iii) an interconnection with an intrastate transmission 
     pipeline, or
       ``(iv) a direct interconnection with a local distribution 
     company, a gas storage facility, or an industrial 
     consumer.''.
       (c) Alternative System.--The table contained in section 
     168(g)(3)(B) is amended by inserting after the item relating 
     to subparagraph (C)(i) the following new item:

    ``(C)(ii).....................................................10''.

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

     SEC. 2303. EXPENSING OF CAPITAL COSTS INCURRED IN COMPLYING 
                   WITH ENVIRONMENTAL PROTECTION AGENCY SULFUR 
                   REGULATIONS.

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

     ``SEC. 179D. DEDUCTION FOR CAPITAL COSTS INCURRED IN 
                   COMPLYING WITH ENVIRONMENTAL PROTECTION AGENCY 
                   SULFUR REGULATIONS.

       ``(a) Treatment as Expense.--
       ``(1) In general.--A small business refiner may elect to 
     treat any qualified capital costs as an expense which is not 
     chargeable to capital account. Any qualified cost which is so 
     treated shall be allowed as a deduction for the taxable year 
     in which the cost is paid or incurred.
       ``(2) Limitation.--
       ``(A) In general.--The aggregate costs which may be taken 
     into account under this subsection

[[Page S3783]]

     for any taxable year may not exceed the applicable percentage 
     of the qualified capital costs paid or incurred for the 
     taxable year.
       ``(B) Applicable percentage.--For purposes of subparagraph 
     (A)--
       ``(i) In general.--Except as provided in clause (ii), the 
     applicable percentage is 75 percent.
       ``(ii) Reduced percentage.--In the case of a small business 
     refiner with average daily refinery runs for the period 
     described in subsection (b)(2) in excess of 155,000 barrels, 
     the percentage described in clause (i) shall be reduced (not 
     below zero) by the product of such percentage (before the 
     application of this clause) and the ratio of such excess to 
     50,000 barrels.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified capital costs.--The term `qualified capital 
     costs' means any costs which--
       ``(A) are otherwise chargeable to capital account, and
       ``(B) are paid or incurred for the purpose of complying 
     with the Highway Diesel Fuel Sulfur Control Requirement of 
     the Environmental Protection Agency, as in effect on the date 
     of the enactment of this section, with respect to a facility 
     placed in service by the taxpayer before such date.
       ``(2) Small business refiner.--The term `small business 
     refiner' means, with respect to any taxable year, a refiner 
     of crude oil, which, within the refinery operations of the 
     business, employs not more than 1,500 employees on any day 
     during such taxable year and whose average daily refinery run 
     for the 1-year period ending on the date of the enactment of 
     this section did not exceed 205,000 barrels.
       ``(c) Coordination With Other Provisions.--Section 280B 
     shall not apply to amounts which are treated as expenses 
     under this section.
       ``(d) Basis Reduction.--For purposes of this title, the 
     basis of any property shall be reduced by the portion of the 
     cost of such property taken into account under subsection 
     (a).
       ``(e) Controlled Groups.--For purposes of this section, all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.''.
       (b) Conforming Amendments.--
       (1) Section 263(a)(1), as amended by this Act, is amended 
     by striking ``or'' at the end of subparagraph (I), by 
     striking the period at the end of subparagraph (J) and 
     inserting ``, or'', and by inserting after subparagraph (J) 
     the following new subparagraph:
       ``(K) expenditures for which a deduction is allowed under 
     section 179D.''.
       (2) Section 263A(c)(3) is amended by inserting ``179C,'' 
     after ``section''.
       (3) Section 312(k)(3)(B), as amended by this Act, is 
     amended by striking ``or 179C'' each place it appears in the 
     heading and text and inserting ``, 179C, or 179D''.
       (4) Section 1016(a), as amended by this Act, is amended by 
     striking ``and'' at the end of paragraph (33), by striking 
     the period at the end of paragraph (34) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(35) to the extent provided in section 179D(d).''.
       (5) Section 1245(a), as amended by this Act, is amended by 
     inserting ``179D,'' after ``179C,'' both places it appears in 
     paragraphs (2)(C) and (3)(C).
       (6) The table of sections for part VI of subchapter B of 
     chapter 1, as amended by this Act, is amended by inserting 
     after section 179C the following new item:

``Sec. 179D. Deduction for capital costs incurred in complying with 
              Environmental Protection Agency sulfur regulations.''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to expenses paid or incurred after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2304. ENVIRONMENTAL TAX CREDIT.

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

     ``SEC. 45L. ENVIRONMENTAL TAX CREDIT.

       ``(a) In General.--For purposes of section 38, the amount 
     of the environmental tax credit determined under this section 
     with respect to any small business refiner for any taxable 
     year is an amount equal to 5 cents for every gallon of 15 
     parts per million or less sulfur diesel produced at a 
     facility by such small business refiner during such taxable 
     year.
       ``(b) Maximum Credit.--
       ``(1) In general.--For any small business refiner, the 
     aggregate amount determined under subsection (a) for any 
     taxable year with respect to any facility shall not exceed 
     the applicable percentage of the qualified capital costs paid 
     or incurred by such small business refiner with respect to 
     such facility during the applicable period, reduced by the 
     credit allowed under subsection (a) for any preceding year.
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1)--
       ``(A) In general.--Except as provided in subparagraph (B), 
     the applicable percentage is 25 percent.
       ``(B) Reduced percentage.--The percentage described in 
     subparagraph (A) shall be reduced in the same manner as under 
     section 179D(a)(2)(B)(ii).
       ``(c) Definitions.--For purposes of this section--
       ``(1) In general.--The terms `small business refiner' and 
     `qualified capital costs' have the same meaning as given in 
     section 179D.
       ``(2) Applicable period.--The term `applicable period' 
     means, with respect to any facility, the period beginning on 
     the day after the date which is 1 year after the date of the 
     enactment of this section and ending with the date which is 1 
     year after the date on which the taxpayer must comply with 
     the applicable EPA regulations with respect to such facility.
       ``(3) Applicable epa regulations.--The term `applicable EPA 
     regulations' means the Highway Diesel Fuel Sulfur Control 
     Requirements of the Environmental Protection Agency, as in 
     effect on the date of the enactment of this section.
       ``(d) Certification.--
       ``(1) Required.--Not later than the date which is 30 months 
     after the first day of the first taxable year in which the 
     environmental tax credit is allowed with respect to qualified 
     capital costs paid or incurred with respect to a facility, 
     the small business refiner shall obtain a certification from 
     the Secretary, in consultation with the Administrator of the 
     Environmental Protection Agency, that the taxpayer's 
     qualified capital costs with respect to such facility will 
     result in compliance with the applicable EPA regulations.
       ``(2) Contents of application.--An application for 
     certification shall include relevant information regarding 
     unit capacities and operating characteristics sufficient for 
     the Secretary, in consultation with the Administrator of the 
     Environmental Protection Agency, to determine that such 
     qualified capital costs are necessary for compliance with the 
     applicable EPA regulations.
       ``(3) Review period.--Any application shall be reviewed and 
     notice of certification, if applicable, shall be made within 
     60 days of receipt of such application. In the event the 
     Secretary does not notify the taxpayer of the results of such 
     certification within such period, the taxpayer may presume 
     the certification to be issued until so notified.
       ``(4) Statute of limitations.--With respect to the credit 
     allowed under this section--
       ``(A) the statutory period for the assessment of any 
     deficiency attributable to such credit shall not expire 
     before the end of the 3-year period ending on the date that 
     the review period described in paragraph (3) ends, and
       ``(B) such deficiency may be assessed before the expiration 
     of such 3-year period notwithstanding the provisions of any 
     other law or rule of law which would otherwise prevent such 
     assessment.
       ``(e) Controlled Groups.--For purposes of this section, all 
     persons treated as a single employer under subsection (b), 
     (c), (m), or (o) of section 414 shall be treated as a single 
     employer.
       ``(f) Cooperative Organizations.--
       ``(1) Apportionment of credit.--In the case of a 
     cooperative organization described in section 1381(a), any 
     portion of the credit determined under subsection (a) of this 
     section, for the taxable year may, at the election of the 
     organization, be apportioned among patrons eligible to share 
     in patronage dividends on the basis of the quantity or value 
     of business done with or for such patrons for the taxable 
     year. Such an election shall be irrevocable for such taxable 
     year.
       ``(2) Treatment of organizations and patrons.--
       ``(A) Organizations.--The amount of the credit not 
     apportioned to patrons pursuant to paragraph (1) shall be 
     included in the amount determined under subsection (a) for 
     the taxable year of the organization.
       ``(B) Patrons.--The amount of the credit apportioned to 
     patrons pursuant to paragraph (1) shall be included in the 
     amount determined under subsection (a) for the first taxable 
     year of each patron ending on or after the last day of the 
     payment period (as defined in section 1382(d)) for the 
     taxable year of the organization or, if earlier, for the 
     taxable year of each patron ending on or after the date on 
     which the patron receives notice from the cooperative of the 
     apportionment.''.
       (b) Credit Made Part of General Business Credit.--
     Subsection (b) of section 38 (relating to general business 
     credit), as amended by this Act, is amended by striking 
     ``plus'' at the end of paragraph (21), by striking the period 
     at the end of paragraph (22) and inserting ``, plus'', and by 
     adding at the end the following new paragraph:
       ``(23) in the case of a small business refiner, the 
     environmental tax credit determined under section 45L(a).''.
       (c) Denial of Double Benefit.--Section 280C (relating to 
     certain expenses for which credits are allowable), as amended 
     by this Act, is amended by adding after subsection (d) the 
     following new subsection:
       ``(e) Environmental Tax Credit.--No deduction shall be 
     allowed for that portion of the expenses otherwise allowable 
     as a deduction for the taxable year which is equal to the 
     amount of the credit determined for the taxable year under 
     section 45L(a).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45L. Environmental tax credit.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to expenses paid or incurred after the date of 
     the enactment of this Act, in taxable years ending after such 
     date.

     SEC. 2305. DETERMINATION OF SMALL REFINER EXCEPTION TO OIL 
                   DEPLETION DEDUCTION.

       (a) In General.--Paragraph (4) of section 613A(d) (relating 
     to certain refiners excluded) is amended to read as follows:
       ``(4) Certain refiners excluded.--If the taxpayer or 1 or 
     more related persons engages in the refining of crude oil, 
     subsection (c) shall not apply to the taxpayer for a taxable 
     year if the average daily refinery runs of the taxpayer and 
     such persons for the taxable year exceed 60,000 barrels. For 
     purposes of this paragraph, the average daily refinery runs 
     for any taxable year shall be determined by dividing the 
     aggregate

[[Page S3784]]

     refinery runs for the taxable year by the number of days in 
     the taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.

     SEC. 2306. MARGINAL PRODUCTION INCOME LIMIT EXTENSION.

       Section 613A(c)(6)(H) (relating to temporary suspension of 
     taxable income limit with respect to marginal production), as 
     amended by section 607(a) of the Job Creation and Worker 
     Assistance Act of 2002, is amended by striking ``2004'' and 
     inserting ``2007''.

     SEC. 2307. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES.

       (a) In General.--Part VI of subchapter B of chapter 1, as 
     amended by this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 199. AMORTIZATION OF GEOLOGICAL AND GEOPHYSICAL 
                   EXPENDITURES FOR DOMESTIC OIL AND GAS WELLS.

       ``A taxpayer shall be entitled to an amortization deduction 
     with respect to any geological and geophysical expenses 
     incurred in connection with the exploration for, or 
     development of, oil or gas within the United States (as 
     defined in section 638) based on a period of 24 months 
     beginning with the month in which such expenses were 
     incurred.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199. Amortization of geological and geophysical expenditures for 
              domestic oil and gas wells.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to costs paid or incurred in taxable years 
     beginning after December 31, 2002.

     SEC. 2308. AMORTIZATION OF DELAY RENTAL PAYMENTS.

       (a) In General.--Part VI of subchapter B of chapter 1, as 
     amended by this Act, is amended by adding at the end the 
     following new section:

     ``SEC. 199A. AMORTIZATION OF DELAY RENTAL PAYMENTS FOR 
                   DOMESTIC OIL AND GAS WELLS.

       ``(a) In General.--A taxpayer shall be entitled to an 
     amortization deduction with respect to any delay rental 
     payments incurred in connection with the development of oil 
     or gas within the United States (as defined in section 638) 
     based on a period of 24 months beginning with the month in 
     which such payments were incurred.''.
       ``(b) Delay rental payments.--For purposes of this section, 
     the term `delay rental payment' means an amount paid for the 
     privilege of deferring development of an oil or gas well 
     under an oil or gas lease.''.
       (b) Clerical Amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199A. Amortization of delay rental payments for domestic oil and 
              gas wells.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2002.

     SEC. 2309. STUDY OF COAL BED METHANE.

       (a) In General.--The Secretary of the Treasury shall study 
     the effect of section 29 of the Internal Revenue Code of 1986 
     on the production of coal bed methane. Such study shall be 
     made in conjunction with the study to be undertaken by the 
     Secretary of the Interior on the effects of coal bed methane 
     production on surface and water resources, as provided in 
     section 607 of the Energy Policy Act of 2002.
       (b) Contents of Study.--The study under subsection (a) 
     shall estimate the total amount of credits under section 29 
     of the Internal Revenue Code of 1986 claimed annually and in 
     the aggregate which are related to the production of coal bed 
     methane since the date of the enactment of such section 29. 
     Such study shall report the annual value of such credits 
     allowable for coal bed methane compared to the average annual 
     wellhead price of natural gas (per thousand cubic feet of 
     natural gas). Such study shall also estimate the incremental 
     increase in production of coal bed methane that has resulted 
     from the enactment of such section 29, and the cost to the 
     Federal Government, in terms of the net tax benefits claimed, 
     per thousand cubic feet of incremental coal bed methane 
     produced annually and in the aggregate since such enactment.

     SEC. 2310. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING 
                   FUEL FROM A NONCONVENTIONAL SOURCE.

       (a) In General.--Section 29 is amended by adding at the end 
     the following new subsection:
       ``(h) Extension for Other Facilities.--
       ``(1) Oil and gas.--In the case of a well or facility for 
     producing qualified fuels described in subparagraph (A) or 
     (B) of subsection (c)(1) which was drilled or placed in 
     service after the date of the enactment of this subsection 
     and before January 1, 2005, notwithstanding subsection (f), 
     this section shall apply with respect to such fuels produced 
     at such well or facility not later than the close of the 3-
     year period beginning on the date that such well is drilled 
     or such facility is placed in service.
       ``(2) Facilities producing refined coal.--
       ``(A) In general.--In the case of a facility described in 
     subparagraph (C) for producing refined coal which was placed 
     in service after the date of the enactment of this subsection 
     and before January 1, 2007, this section shall apply with 
     respect to fuel produced at such facility not later than the 
     close of the 5-year period beginning on the date such 
     facility is placed in service.
       ``(B) Refined coal.--For purposes of this paragraph, the 
     term `refined coal' means a fuel which is a liquid, gaseous, 
     or solid synthetic fuel produced from coal (including 
     lignite) or high carbon fly ash, including such fuel used as 
     a feedstock.
       ``(C) Covered facilities.--
       ``(i) In general.--A facility is described in this 
     subparagraph if such facility produces refined coal using a 
     technology that results in--

       ``(I) a qualified emission reduction, and
       ``(II) a qualified enhanced value.

       ``(ii) Qualified emission reduction.--For purposes of this 
     subparagraph, the term `qualified emission reduction' means a 
     reduction of at least 20 percent of the emissions of nitrogen 
     oxide and either sulfur dioxide or mercury released when 
     burning the refined coal (excluding any dilution caused by 
     materials combined or added during the production process), 
     as compared to the emissions released when burning the 
     feedstock coal or comparable coal predominantly available in 
     the marketplace as of January 1, 2002.
       ``(iii) Qualified enhanced value.--For purposes of this 
     subparagraph, the term `qualified enhanced value' means an 
     increase of at least 50 percent in the market value of the 
     refined coal (excluding any increase caused by materials 
     combined or added during the production process), as compared 
     to the value of the feedstock coal.
       ``(iv) Qualifying advanced clean coal technology facilities 
     excluded.--A facility described in this subparagraph shall 
     not include a qualifying advanced clean coal technology 
     facility (as defined in section 48A(b)).
       ``(3) Wells producing viscous oil.--
       ``(A) In general.--In the case of a well for producing 
     viscous oil 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 
     well not later than the close of the 3-year period beginning 
     on the date such well is placed in service.
       ``(B) Viscous oil.--The term ``viscous oil' means heavy 
     oil, as defined in section 613A(c)(6), except that--
       ``(i) `22 degrees' shall be substituted for `20 degrees' in 
     applying subparagraph (F) thereof, and
       ``(ii) in all cases, the oil gravity shall be measured from 
     the initial well-head samples, drill cuttings, or down hole 
     samples.
       ``(C) Waiver of unrelated person requirement.--In the case 
     of viscous oil, the requirement under subsection (a)(1)(B)(i) 
     of a sale to an unrelated person shall not apply to any sale 
     to the extent that the viscous oil is not consumed in the 
     immediate vicinity of the wellhead.
       ``(4) Coalmine methane gas.--
       ``(A) In general.--This section shall apply to coalmine 
     methane gas--
       ``(i) captured or extracted by the taxpayer after the date 
     of the enactment of this subsection and before January 1, 
     2005, and
       ``(ii) utilized as a fuel source or sold by or on behalf of 
     the taxpayer to an unrelated person after the date of the 
     enactment of this subsection and before January 1, 2005.
       ``(B) Coalmine methane gas.--For purposes of this 
     paragraph, the term `coalmine methane gas' means any methane 
     gas which is--
       ``(i) liberated during qualified coal mining operations, or
       ``(ii) extracted up to 5 years in advance of qualified coal 
     mining operations as part of a specific plan to mine a coal 
     deposit.
       ``(C) Special rule for advanced extraction.--In the case of 
     coalmine methane gas which is captured in advance of 
     qualified coal mining operations, the credit under subsection 
     (a) shall be allowed only after the date the coal extraction 
     occurs in the immediate area where the coalmine methane gas 
     was removed.
       ``(D) Noncompliance with pollution laws.--For purposes of 
     subparagraphs (B) and (C), coal mining operations which are 
     not in compliance with the applicable State and Federal 
     pollution prevention, control, and permit requirements for 
     any period of time shall not be considered to be qualified 
     coal mining operations during such period.
       ``(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.
       ``(6) Credit amount.--In determining the amount of credit 
     allowable under this section solely by reason of this 
     subsection, the dollar amount applicable under subsection 
     (a)(1) shall be $3 (without regard to subsection (b)(2)).''.
       (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''.
       (c) Effective Date.--The amendment made by this section 
     shall apply to fuel sold after the date of the enactment of 
     this Act.

[[Page S3785]]

     SEC. 2311. NATURAL GAS DISTRIBUTION LINES TREATED AS 15-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (E) of section 168(e)(3) 
     (relating to classification of certain property) is amended 
     by striking ``and'' at the end of clause (ii), by striking 
     the period at the end of clause (iii) and by inserting ``, 
     and'', and by adding at the end the following new clause:
       ``(iv) any natural gas distribution line.''.
       (b) Alternative System.--The table contained in section 
     168(g)(3)(B), as amended by this Act, is amended by adding 
     after the item relating to subparagraph (E)(iii) the 
     following new item:

``(E)(iv).........................................................20''.
       (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.

         TITLE XXIV--ELECTRIC UTILITY RESTRUCTURING PROVISIONS

     SEC. 2401. ONGOING STUDY AND REPORTS REGARDING TAX ISSUES 
                   RESULTING FROM FUTURE RESTRUCTURING DECISIONS.

       (a) Ongoing Study.--The Secretary of the Treasury, after 
     consultation with the Federal Energy Regulatory Commission, 
     shall undertake an ongoing study of Federal tax issues 
     resulting from nontax decisions on the restructuring of the 
     electric industry. In particular, the study shall focus on 
     the effect on tax-exempt bonding authority of public power 
     entities and on corporate restructuring which results from 
     the restructuring of the electric industry.
       (b) Regulatory Relief.--In connection with the study 
     described in subsection (a), the Secretary of the Treasury 
     should exercise the Secretary's authority, as appropriate, to 
     modify or suspend regulations that may impede an electric 
     utility company's ability to reorganize its capital stock 
     structure to respond to a competitive marketplace.
       (c) Reports.--The Secretary of the Treasury shall report to 
     the Committee on Finance of the Senate and the Committee on 
     Ways and Means of the House of Representatives not later than 
     December 31, 2002, regarding Federal tax issues identified 
     under the study described in subsection (a), and at least 
     annually thereafter, regarding such issues identified since 
     the preceding report. Such reports shall also include such 
     legislative recommendations regarding changes to the private 
     business use rules under subpart A of part IV of subchapter B 
     of chapter 1 of the Internal Revenue Code of 1986 as the 
     Secretary of the Treasury deems necessary. The reports shall 
     continue until such time as the Federal Energy Regulatory 
     Commission has completed the restructuring of the electric 
     industry.

     SEC. 2402. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR 
                   DECOMMISSIONING COSTS.

       (a) Repeal of Limitation on Deposits Into Fund Based on 
     Cost of Service; Contributions After Funding Period.--
     Subsection (b) of section 468A is amended to read as follows:
       ``(b) Limitation on Amounts Paid Into Fund.--The amount 
     which a taxpayer may pay into the Fund for any taxable year 
     shall not exceed the ruling amount applicable to such taxable 
     year.''.
       (b) Clarification of Treatment of Fund Transfers.--
     Subsection (e) of section 468A is amended by adding at the 
     end the following new paragraph:
       ``(8) Treatment of fund transfers.--If, in connection with 
     the transfer of the taxpayer's interest in a nuclear power 
     plant, the taxpayer transfers the Fund with respect to such 
     power plant to the transferee of such interest and the 
     transferee elects to continue the application of this section 
     to such Fund--
       ``(A) the transfer of such Fund shall not cause such Fund 
     to be disqualified from the application of this section, and
       ``(B) no amount shall be treated as distributed from such 
     Fund, or be includible in gross income, by reason of such 
     transfer.''.
       (c) Deduction for Nuclear Decommissioning Costs When 
     Paid.--Paragraph (2) of section 468A(c) is amended to read as 
     follows:
       ``(2) Deduction of nuclear decommissioning costs.--In 
     addition to any deduction under subsection (a), nuclear 
     decommissioning costs paid or incurred by the taxpayer during 
     any taxable year shall constitute ordinary and necessary 
     expenses in carrying on a trade or business under section 
     162.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.

     SEC. 2403. TREATMENT OF CERTAIN INCOME OF COOPERATIVES.

       (a) Income From Open Access and Nuclear Decommissioning 
     Transactions.--
       (1) In general.--Subparagraph (C) of section 501(c)(12) is 
     amended by striking ``or'' at the end of clause (i), by 
     striking clause (ii), and by adding at the end the following 
     new clauses:
       ``(ii) from any open access transaction (other than income 
     received or accrued directly or indirectly from a member),
       ``(iii) from any nuclear decommissioning transaction,
       ``(iv) from any asset exchange or conversion transaction, 
     or
       ``(v) from the prepayment of any loan, debt, or obligation 
     made, insured, or guaranteed under the Rural Electrification 
     Act of 1936.''.
       (2) Definitions and special rules.--Paragraph (12) of 
     section 501(c) is amended by adding at the end the following 
     new subparagraphs:
       ``(E) For purposes of subparagraph (C)(ii)--
       ``(i) The term `open access transaction' means any 
     transaction meeting the open access requirements of any of 
     the following subclauses with respect to a mutual or 
     cooperative electric company:

       ``(I) The provision or sale of transmission service or 
     ancillary services meets the open access requirements of this 
     subclause only if such services are provided on a 
     nondiscriminatory open access basis pursuant to an open 
     access transmission tariff filed with and approved by FERC, 
     including an acceptable reciprocity tariff, or under a 
     regional transmission organization agreement approved by 
     FERC.
       ``(II) The provision or sale of electric energy 
     distribution services or ancillary services meets the open 
     access requirements of this subclause only if such services 
     are provided on a nondiscriminatory open access basis to end-
     users served by distribution facilities owned by the mutual 
     or cooperative electric company (or its members).
       ``(III) The delivery or sale of electric energy generated 
     by a generation facility meets the open access requirements 
     of this subclause only if such facility is directly connected 
     to distribution facilities owned by the mutual or cooperative 
     electric company (or its members) which owns the generation 
     facility, and such distribution facilities meet the open 
     access requirements of subclause (II).

       ``(ii) Clause (i)(I) shall apply in the case of a 
     voluntarily filed tariff only if the mutual or cooperative 
     electric company files a report with FERC within 90 days 
     after the date of the enactment of this subparagraph relating 
     to whether or not such company will join a regional 
     transmission organization.
       ``(iii) A mutual or cooperative electric company shall be 
     treated as meeting the open access requirements of clause 
     (i)(I) if a regional transmission organization controls the 
     transmission facilities.
       ``(iv) References to FERC in this subparagraph shall be 
     treated as including references to the Public Utility 
     Commission of Texas with respect to any ERCOT utility (as 
     defined in section 212(k)(2)(B) of the Federal Power Act (16 
     U.S.C. 824k(k)(2)(B))) or references to the Rural Utilities 
     Service with respect to any other facility not subject to 
     FERC jurisdiction.
       ``(v) For purposes of this subparagraph--

       ``(I) The term `transmission facility' means an electric 
     output facility (other than a generation facility) that 
     operates at an electric voltage of 69 kV or greater. To the 
     extent provided in regulations, such term includes any output 
     facility that FERC determines is a transmission facility 
     under standards applied by FERC under the Federal Power Act 
     (as in effect on the date of the enactment of the Energy Tax 
     Incentives Act of 2002).
       ``(II) The term `regional transmission organization' 
     includes an independent system operator.
       ``(III) The term `FERC' means the Federal Energy Regulatory 
     Commission.

       ``(F) The term `nuclear decommissioning transaction' 
     means--
       ``(i) any transfer into a trust, fund, or instrument 
     established to pay any nuclear decommissioning costs if the 
     transfer is in connection with the transfer of the mutual or 
     cooperative electric company's interest in a nuclear power 
     plant or nuclear power plant unit,
       ``(ii) any distribution from any trust, fund, or instrument 
     established to pay any nuclear decommissioning costs, or
       ``(iii) any earnings from any trust, fund, or instrument 
     established to pay any nuclear decommissioning costs.
       ``(G) The term `asset exchange or conversion transaction' 
     means any voluntary exchange or involuntary conversion of any 
     property related to generating, transmitting, distributing, 
     or selling electric energy by a mutual or cooperative 
     electric company, the gain from which qualifies for deferred 
     recognition under section 1031 or 1033, but only if the 
     replacement property acquired by such company pursuant to 
     such section constitutes property which is used, or to be 
     used, for--
       ``(i) generating, transmitting, distributing, or selling 
     electric energy, or
       ``(ii) producing, transmitting, distributing, or selling 
     natural gas.''.
       (b) Treatment of Income From Load Loss Transactions.--
     Paragraph (12) of section 501(c), as amended by subsection 
     (a)(2), is amended by adding after subparagraph (G) the 
     following new subparagraph:
       ``(H)(i) In the case of a mutual or cooperative electric 
     company described in this paragraph or an organization 
     described in section 1381(a)(2)(C), income received or 
     accrued from a load loss transaction shall be treated as an 
     amount collected from members for the sole purpose of meeting 
     losses and expenses.
       ``(ii) For purposes of clause (i), the term `load loss 
     transaction' means any wholesale or retail sale of electric 
     energy (other than to members) to the extent that the 
     aggregate sales during the recovery period does not exceed 
     the load loss mitigation sales limit for such period.
       ``(iii) For purposes of clause (ii), the load loss 
     mitigation sales limit for the recovery period is the sum of 
     the annual load losses for each year of such period.
       ``(iv) For purposes of clause (iii), a mutual or 
     cooperative electric company's annual load loss for each year 
     of the recovery period is the amount (if any) by which--
       ``(I) the megawatt hours of electric energy sold during 
     such year to members of such electric company are less than
       ``(II) the megawatt hours of electric energy sold during 
     the base year to such members.
       ``(v) For purposes of clause (iv)(II), the term `base year' 
     means--
       ``(I) the calendar year preceding the start-up year, or
       ``(II) at the election of the electric company, the second 
     or third calendar years preceding the start-up year.
       ``(vi) For purposes of this subparagraph, the recovery 
     period is the 7-year period beginning with the start-up year.

[[Page S3786]]

       ``(vii) For purposes of this subparagraph, the start-up 
     year is the calendar year which includes the date of the 
     enactment of this subparagraph or, if later, at the election 
     of the mutual or cooperative electric company--
       ``(I) the first year that such electric company offers 
     nondiscriminatory open access, or
       ``(II) the first year in which at least 10 percent of such 
     electric company's sales are not to members of such electric 
     company.
       ``(viii) A company shall not fail to be treated as a mutual 
     or cooperative company for purposes of this paragraph or as a 
     corporation operating on a cooperative basis for purposes of 
     section 1381(a)(2)(C) by reason of the treatment under clause 
     (i).
       ``(ix) In the case of a mutual or cooperative electric 
     company, income from any open access transaction received, or 
     accrued, indirectly from a member shall be treated as an 
     amount collected from members for the sole purpose of meeting 
     losses and expenses.''.
       (c) Exception From Unrelated Business Taxable Income.--
     Subsection (b) of section 512 (relating to modifications) is 
     amended by adding at the end the following new paragraph:
       ``(18) Treatment of mutual or cooperative electric 
     companies.--In the case of a mutual or cooperative electric 
     company described in section 501(c)(12), there shall be 
     excluded income which is treated as member income under 
     subparagraph (H) thereof.''.
       (d) Cross Reference.--Section 1381 is amended by adding at 
     the end the following new subsection:
       ``(c) Cross Reference.--

  ``For treatment of income from load loss transactions of 
organizations described in subsection (a)(2)(C), see section 
501(c)(12)(H).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 2404. SALES OR DISPOSITIONS TO IMPLEMENT FEDERAL ENERGY 
                   REGULATORY COMMISSION OR STATE ELECTRIC 
                   RESTRUCTURING POLICY.

       (a) In General.--Section 451 (relating to general rule for 
     taxable year of inclusion) is amended by adding at the end 
     the following new subsection:
       ``(i) Special Rule for Sales or Dispositions To Implement 
     Federal Energy Regulatory Commission or State Electric 
     Restructuring Policy.--
       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualifying electric transmission transaction in any taxable 
     year--
       ``(A) any ordinary income derived from such transaction 
     which would be required to be recognized under section 1245 
     or 1250 for such taxable year (determined without regard to 
     this subsection), and
       ``(B) any income derived from such transaction in excess of 
     such ordinary income which is required to be included in 
     gross income for such taxable year,
     shall be so recognized and included ratably over the 8-
     taxable year period beginning with such taxable year.
       ``(2) Qualifying electric transmission transaction.--For 
     purposes of this subsection, the term `qualifying electric 
     transmission transaction' means any sale or other disposition 
     before January 1, 2007, of--
       ``(A) property used by the taxpayer in the trade or 
     business of providing electric transmission services, or
       ``(B) any stock or partnership interest in a corporation or 
     partnership, as the case may be, whose principal trade or 
     business consists of providing electric transmission 
     services,
     but only if such sale or disposition is to an independent 
     transmission company.
       ``(3) Independent transmission company.--For purposes of 
     this subsection, the term `independent transmission company' 
     means--
       ``(A) a regional transmission organization approved by the 
     Federal Energy Regulatory Commission,
       ``(B) a person--
       ``(i) who the Federal Energy Regulatory Commission 
     determines in its authorization of the transaction under 
     section 203 of the Federal Power Act (16 U.S.C. 824b) is not 
     a market participant within the meaning of such Commission's 
     rules applicable to regional transmission organizations, and
       ``(ii) whose transmission facilities to which the election 
     under this subsection applies are under the operational 
     control of a Federal Energy Regulatory Commission-approved 
     regional transmission organization before the close of the 
     period specified in such authorization, but not later than 
     the close of the period applicable under paragraph (1), or
       ``(C) in the case of facilities subject to the exclusive 
     jurisdiction of the Public Utility Commission of Texas, a 
     person which is approved by that Commission as consistent 
     with Texas State law regarding an independent transmission 
     organization.
       ``(4) Election.--An election under paragraph (1), once 
     made, shall be irrevocable.
       ``(5) Nonapplication of installment sales treatment.--
     Section 453 shall not apply to any qualifying electric 
     transmission transaction with respect to which an election to 
     apply this subsection is made.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transactions occurring after the date of the 
     enactment of this Act.

     SEC. 2405. APPLICATION OF TEMPORARY REGULATIONS TO CERTAIN 
                   OUTPUT CONTRACTS.

       In the application of section 1-141-7(c)(4) of the Treasury 
     Temporary Regulations to output contracts entered into after 
     February 22, 1998, with respect to an issuer participating in 
     open access with respect to the issuer's transmission 
     facilities, an output contract in existence on or before such 
     date that is amended after such date shall be treated as a 
     contract entered into after such date only if the amendment 
     increases the amount of output sold under such contract by 
     extending the term of the contract or increasing the amount 
     of output sold, but such treatment as a contract entered into 
     after such date shall begin on the effective date of the 
     amendment and shall apply only with respect to the increased 
     output to be provided under such contract.

     SEC. 2406. TREATMENT OF CERTAIN DEVELOPMENT INCOME OF 
                   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.

                    TITLE XXV--ADDITIONAL PROVISIONS

     SEC. 2501. EXTENSION OF ACCELERATED DEPRECIATION AND WAGE 
                   CREDIT BENEFITS ON INDIAN RESERVATIONS.

       (a) Special Recovery Period for Property on Indian 
     Reservations.--Section 168(j)(8) (relating to termination), 
     as amended by section 613(b) of the Job Creation and Worker 
     Assistance Act of 2002, is amended by striking ``2004'' and 
     inserting ``2005''.
       (b) Indian Employment Credit.--Section 45A(f) (relating to 
     termination), as amended by section 613(a) of the Job 
     Creation and Worker Assistance Act of 2002, is amended by 
     striking ``2004'' and inserting ``2005''.

     SEC. 2502. STUDY OF EFFECTIVENESS OF CERTAIN PROVISIONS BY 
                   GAO.

       (a) Study.--The Comptroller General of the United States 
     shall undertake an ongoing analysis of--
       (1) the effectiveness of the alternative motor vehicles and 
     fuel incentives provisions under title II and the 
     conservation and energy efficiency provisions under title 
     III, and
       (2) the recipients of the tax benefits contained in such 
     provisions, including an identification of such recipients by 
     income and other appropriate measurements.

     Such analysis shall quantify the effectiveness of such 
     provisions by examining and comparing the Federal 
     Government's forgone revenue to the aggregate amount of 
     energy actually conserved and tangible environmental benefits 
     gained as a result of such provisions.
       (b) Reports.--The Comptroller General of the United States 
     shall report the analysis required under subsection (a) to 
     Congress not later than December 31, 2002, and annually 
     thereafter.

     SEC. 2503. CREDIT FOR PRODUCTION OF ALASKA NATURAL GAS.

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

     ``SEC. 45M. ALASKA NATURAL GAS.

       ``(a) In General.--For purposes of section 38, the Alaska 
     natural gas credit of any taxpayer for any taxable year is 
     the credit amount per 1,000,000 Btu of Alaska natural gas 
     entering any intake or tie-in point which was derived from an 
     area of the State of Alaska lying north of 64 degrees North 
     latitude, which is attributable to the taxpayer and sold by 
     or on behalf of the taxpayer to an unrelated person during 
     such taxable year (within the meaning of section 45).
       ``(b) Credit Amount.--For purposes of this section--
       ``(1) In general.--The credit amount per 1,000,000 Btu of 
     Alaska natural gas entering any intake or tie-in point which 
     was derived from an area of the State of Alaska lying north 
     of 64 degrees North latitude (determined in United States 
     dollars), is the excess of--
       ``(A) $3.25, over
       ``(B) the average monthly price at the AECO C Hub in 
     Alberta, Canada, for Alaska natural gas for the month in 
     which occurs the date of such entering.
       ``(2) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after the first calendar 
     year ending after the date described in subsection (g)(1), 
     the dollar amount contained in paragraph (1)(A) shall be 
     increased to an amount equal to such dollar amount multiplied 
     by the inflation adjustment factor for such calendar year 
     (determined under section 43(b)(3)(B) by substituting `the 
     calendar year ending before the date described in section 
     45M(g)(1)' for `1990').
       ``(c) Alaska Natural Gas.--For purposes of this section, 
     the term `Alaska natural gas' means natural gas entering any 
     intake or tie-in point which was derived from an area of the 
     State of Alaska lying north of 64 degrees North latitude 
     produced in compliance with the applicable State and Federal 
     pollution prevention, control, and permit requirements from 
     the area generally known as the North Slope of Alaska 
     (including the continental shelf thereof within the meaning 
     of section 638(l)), determined without regard to the area of 
     the Alaska National Wildlife Refuge (including the 
     continental shelf thereof within the meaning of section 
     638(l)).
       ``(d) Recapture.--
       ``(1) In general.--With respect to each 1,000,000 Btu of 
     Alaska natural gas entering any intake or tie-in point which 
     was derived

[[Page S3787]]

     from an area of the State of Alaska lying north of 64 degrees 
     North latitude after the date which is 3 years after the date 
     described in subsection (g)(1), if the average monthly price 
     described in subsection (b)(1)(B) exceeds 150 percent of the 
     amount described in subsection (b)(1)(A) for the month in 
     which occurs the date of such entering, the taxpayer's tax 
     under this chapter for the taxable year shall be increased by 
     an amount equal to the lesser of--
       ``(A) such excess, or
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the Alaska natural gas credit received by the 
     taxpayer for such years had been zero.
       ``(2) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under this chapter or for purposes of section 55.
       ``(e) Application of Rules.--For purposes of this section, 
     rules similar to the rules of paragraphs (3), (4), and (5) of 
     section 45(d) shall apply.
       ``(f) No Double Benefit.--The amount of any deduction or 
     other credit allowable under this chapter for any fuel taken 
     into account in computing the amount of the credit determined 
     under subsection (a) shall be reduced by the amount of such 
     credit attributable to such fuel.
       ``(g) Application of Section.--This section shall apply to 
     Alaska natural gas entering any intake or tie-in point which 
     was derived from an area of the State of Alaska lying north 
     of 64 degrees North latitude for the period--
       ``(1) beginning with the later of--
       ``(A) January 1, 2010, or
       ``(B) the initial date for the interstate transportation of 
     such Alaska natural gas, and
       ``(2) except with respect to subsection (d), ending with 
     the date which is 15 years after the date described in 
     paragraph (1).''.
       (b) Credit Treated as Business Credit.--Section 38(b), as 
     amended by this Act, is amended by striking ``plus'' at the 
     end of paragraph (22), by striking the period at the end of 
     paragraph (23) and inserting ``, plus'', and by adding at the 
     end the following new paragraph:
       ``(24) The Alaska natural gas credit determined under 
     section 45M(a).''.
       (c) Allowing Credit Against Entire Regular Tax and Minimum 
     Tax.--
       (1) In general.--Subsection (c) of section 38 (relating to 
     limitation based on amount of tax), as amended by this Act, 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Special rules for alaska natural gas credit.--
       ``(A) In general.--In the case of the Alaska natural gas 
     credit--
       ``(i) this section and section 39 shall be applied 
     separately with respect to the credit, and
       ``(ii) in applying paragraph (1) to the credit--

       ``(I) the amounts in subparagraphs (A) and (B) thereof 
     shall be treated as being zero, and
       ``(II) the limitation under paragraph (1) (as modified by 
     subclause (I)) shall be reduced by the credit allowed under 
     subsection (a) for the taxable year (other than the Alaska 
     natural gas credit).

       ``(B) Alaska Natural Gas Credit.--For purposes of this 
     subsection, the term `Alaska natural gas credit' means the 
     credit allowable under subsection (a) by reason of section 
     45M(a).''.
       (2) Conforming amendments.--Subclause (II) of section 
     38(c)(2)(A)(ii), as amended by this Act, subclause (II) of 
     section 38(c)(3)(A)(ii), as amended by this Act, and 
     subclause (II) of section 38(c)(4)(A)(ii), as added by this 
     Act, are each amended by inserting ``or the Alaska natural 
     gas credit'' after ``producer credit''.
       (d) Clerical Amendment.--The table of sections for subpart 
     D of part IV of subchapter A of chapter 1, as amended by this 
     Act, is amended by adding at the end the following new item:

``Sec. 45M. Alaska natural gas.''.

     SEC. 2504. SALE OF GASOLINE AND DIESEL FUEL AT DUTY-FREE 
                   SALES ENTERPRISES.

       (a) Prohibition.--Section 555(b) of the Tariff Act of 1930 
     (19 U.S.C. 1555(b)) is amended--
       (1) by redesignating paragraphs (6) through (8) as 
     paragraphs (7) through (9), respectively; and
       (2) by inserting after paragraph (5) the following:
       ``(6) Any gasoline or diesel fuel sold at a duty-free sales 
     enterprise shall be considered to be entered for consumption 
     into the customs territory of the United States.''.
       (b) Construction.--The amendments made by this section 
     shall not be construed to create any inference with respect 
     to the interpretation of any provision of law as such 
     provision was in effect on the day before the date of 
     enactment of this Act.
       (c) Effective date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 2505. TREATMENT OF DAIRY PROPERTY.

       (a) Qualified Disposition of Dairy Property Treated as 
     Involuntary Conversion.--
       (1) In general.--Section 1033 (relating to involuntary 
     conversions) is amended by designating subsection (k) as 
     subsection (l) and inserting after subsection (j) the 
     following new subsection:
       ``(k) Qualified Disposition To Implement Bovine 
     Tuberculosis Eradication Program.--
       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualified disposition:
       ``(A) Treatment as involuntary conversion.--Such 
     disposition shall be treated as an involuntary conversion to 
     which this section applies.
       ``(B) Modification of similar property requirement.--
     Property to be held by the taxpayer either for productive use 
     in a trade or business or for investment shall be treated as 
     property similar or related in service or use to the property 
     disposed of.
       ``(C) Extension of period for replacing property.--
     Subsection (a)(2)(B)(i) shall be applied by substituting `4 
     years' for `2 years'.
       ``(D) Waiver of unrelated person requirement.--Subsection 
     (i) (relating to replacement property must be acquired from 
     unrelated person in certain cases) shall not apply.
       ``(E) Expanded capital gain for cattle and horses.--Section 
     1231(b)(3)(A) shall be applied by substituting `1 month' for 
     `24 months'.
       ``(2) Qualified disposition.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified disposition' means the disposition of dairy 
     property which is certified by the Secretary of Agriculture 
     as having been the subject of an agreement under the bovine 
     tuberculosis eradication program, as implemented pursuant to 
     the Declaration of Emergency Because of Bovine Tuberculosis 
     (65 Federal Register 63,227 (2000)).
       ``(B) Payments received in connection with the bovine 
     tuberculosis eradication program.--For purposes of this 
     subsection, any amount received by a taxpayer in connection 
     with an agreement under such bovine tuberculosis eradication 
     program shall be treated as received in a qualified 
     disposition.
       ``(C) Transmittal of certifications.--The Secretary of 
     Agriculture shall transmit copies of certifications under 
     this paragraph to the Secretary.
       ``(3) Allowance of the adjusted basis of certified dairy 
     property as a depreciation deduction.--The adjusted basis of 
     any property certified under paragraph (2)(A) shall be 
     allowed as a depreciation deduction under section 167 for the 
     taxable year which includes the date of the certification 
     described in paragraph (2)(A).
       ``(4) Dairy property.--For purposes of this subsection, the 
     term `dairy property' means all tangible or intangible 
     property used in connection with a dairy business or a dairy 
     processing plant.
       ``(5) Special rules for certain business organizations.--
       ``(A) S corporations.--In the case of an S corporation, 
     gain on a qualified disposition shall not be treated as 
     recognized for the purposes of section 1374 (relating to tax 
     imposed on certain built-in gains).
       ``(B) Partnerships.--In the case of a partnership which 
     dissolves in anticipation of a qualified disposition 
     (including in anticipation of receiving the amount described 
     in paragraph (2)(B)), the dairy property owned by the 
     partners of such partnership at the time of such disposition 
     shall be treated, for the purposes of this section and 
     notwithstanding any regulation or rule of law, as owned by 
     such partners at the time of such disposition.
       ``(6) Termination.--This subsection shall not apply to 
     dispositions made after December 31, 2006.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to dispositions made and amounts received in 
     taxable years ending after May 22, 2001.
       (b) Deduction of Qualified Reclamation Expenditures.--
       (1) 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 adding 
     at the end the following new section:

     ``SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMATION COSTS.

       ``(a) In General.--Notwithstanding section 280B (relating 
     to demolition of structures), a taxpayer may elect to treat 
     any qualified reclamation expenditure which is paid or 
     incurred by the taxpayer as an expense which is not 
     chargeable to capital account. Any expenditure which is so 
     treated shall be allowed as a deduction for the taxable year 
     in which it is paid or incurred.
       ``(b) Qualified Reclamation Expenditure.--
       ``(1) In general.--For purposes of this subparagraph, the 
     term `qualified reclamation expenditure' means amounts 
     otherwise chargeable to capital account and paid or incurred 
     to convert any real property certified under section 
     1033(k)(2) (relating to qualified disposition) into 
     unimproved land.
       ``(2) Special rule for expenditures for depreciable 
     property.--A rule similar to the rule of section 198(b)(2) 
     (relating to special rule for expenditures for depreciable 
     property) shall apply for purposes of paragraph (1).
       ``(c) Deduction Recaptured as Ordinary Income.--Rules 
     similar to the rules of section 198(e) (relating to deduction 
     recaptured as ordinary income on sale, etc.) shall apply with 
     respect to any qualified reclamation expenditure.
       ``(d) Termination.--This section shall not apply to 
     expenditures paid or incurred after December 31, 2006.''.
       (2) Clerical amendment.--The table of sections for part VI 
     of subchapter B of chapter 1, as amended by this Act, is 
     amended by adding at the end the following new item:

``Sec. 199B. Expensing of dairy property reclamation costs.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to expenditures paid or incurred in taxable years 
     ending after May 22, 2001.

[[Page S3788]]

     SEC. 2506. CLARIFICATION OF EXCISE TAX EXEMPTIONS FOR 
                   AGRICULTURAL AERIAL APPLICATORS.

       (a) No Waiver by Farm Owner, Tenant, or Operator 
     Necessary.--Subparagraph (B) of section 6420(c)(4) (relating 
     to certain farming use other than by owner, etc.) is amended 
     to read as follows:
       ``(B) if the person so using the gasoline is an aerial or 
     other applicator of fertilizers or other substances and is 
     the ultimate purchaser of the gasoline, then subparagraph (A) 
     of this paragraph shall not apply and the aerial or other 
     applicator shall be treated as having used such gasoline on a 
     farm for farming purposes.''.
       (b) Exemption Includes Fuel Used Between Airfield and 
     Farm.--Section 6420(c)(4), as amended by subsection (a), is 
     amended by adding at the end the following new flush 
     sentence:

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

     SEC. 2507. 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.

     SEC. 2508. EXEMPTION FROM TICKET TAXES FOR TRANSPORTATION 
                   PROVIDED BY SEAPLANES.

       (a) In General.--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 amendments made by this section 
     shall apply to calendar years beginning after 2002.

                DIVISION I--IRAQ OIL IMPORT RESTRICTION

                TITLE XXVI--IRAQ OIL IMPORT RESTRICTION

     SEC. 2601. SHORT TITLE AND FINDINGS.

       (a) Short Title.--This title can be cited as the ``Iraq 
     Petroleum Import Restriction Act of 2002''.
       (b) Findings.--Congress finds that--
       (1) the Government of the Republic of Iraq--
       (A) has failed to comply with the terms of United Nations 
     Security Council Resolution 687 regarding unconditional Iraqi 
     acceptance of the destruction, removal, or rendering 
     harmless, under international supervision, of all nuclear, 
     chemical and biological weapons and all stocks of agents and 
     all related subsystems and components and all research, 
     development, support and manufacturing facilities, as well as 
     all ballistic missiles with a range greater than 150 
     kilometers and related major parts, and repair and production 
     facilities and has failed to allow United Nations inspectors 
     access to sites used for the production or storage of weapons 
     of mass destruction;
       (B) routinely contravenes the terms and. conditions of UNSC 
     Resolution 661, authorizing the export of petroleum products 
     from Iraq in exchange for food, medicine and other 
     humanitarian products by conducting a routine and extensive 
     program to sell such products outside of the channels 
     established by UNSC Resolution 661 in exchange for military 
     equipment and materials to be used in pursuit of its program 
     to develop weapons of mass destruction in order to threaten 
     the United States and its allies in the Persian Gulf and 
     surrounding regions;
       (C) has failed to adequately draw down upon the amounts 
     received in the Escrow Account established by UNSC Resolution 
     986 to purchase food, medicine and other humanitarian 
     products required by its citizens, resulting in massive 
     humanitarian suffering by the Iraqi people;
       (D) conducts a periodic and systematic campaign to harass 
     and obstruct the enforcement of the United States- and United 
     Kingdom-enforced ``No-Fly Zones'' in effect in the Republic 
     of Iraq;
       (E) routinely manipulates the petroleum export production 
     volumes permitted under UNSC Resolution 661 in order to 
     create uncertainty in global energy markets, and therefore 
     threatens the economic security of the United States;
       (F) pays bounties to the families of suicide bombers in 
     order to encourage the murder of Israeli civilians;
       (2) further imports of petroleum products from the Republic 
     of Iraq are inconsistent with the national security and 
     foreign policy interests of the United States and should be 
     eliminated until such time as they are not so inconsistent.

     SEC. 2602. PROHIBITION ON IRAQI-ORIGIN PETROLEUM IMPORTS.

       The direct or indirect import from Iraq of Iraqi-origin 
     petroleum and petroleum products is prohibited, 
     notwithstanding an authorization by the Committee established 
     by UNSC Resolution 661 or its designee, or any other order to 
     the contrary.

     SEC. 2603. TERMINATION/PRESIDENTIAL CERTIFICATION.

       This title will remain in effect until such time as the 
     President, after consultation with the relevant committees in 
     Congress, certifies to the Congress that--
       (1) Iraq is in substantial compliance with the terms of--
       (A) UNSC Resolution 687; and
       (B) UNSC Resolution 986 prohibiting smuggling of oil in 
     circumvention of the ``Oil-for-Food'' program; and
       (2) ceases the practice of compensating the families of 
     suicide bombers in order to encourage the murder of Israeli 
     citizens; or that
       (3) resuming the importation of Iraqi-origin petroleum and 
     petroleum products would not be inconsistent with the 
     national security and foreign policy interests of the United 
     States.

     SEC. 2604. HUMANITARIAN INTERESTS.

       It is the sense of the Senate that the President should 
     make all appropriate efforts to ensure that the humanitarian 
     needs of the Iraqi people are not negatively affected by this 
     Act, and should encourage through public, private, domestic 
     and international means the direct or indirect sale, donation 
     or other transfer to appropriate nongovernmental health and 
     humanitarian organizations and individuals within Iraq of 
     food, medicine and other humanitarian products.

     SEC. 2605. DEFINITIONS.

       (a) 661 Committee.--The term 661 Committee means the 
     Security Council Committee established by UNSC Resolution 
     661, and persons acting for or on behalf of the Committee 
     under its specific delegation of authority for the relevant 
     matter or category of activity, including the overseers 
     appointed by the United Nations Secretary-General to examine 
     and approve agreements for purchases of petroleum and 
     petroleum products from the Government of Iraq pursuant to 
     UNSC Resolution 986.
       (b) UNSC Resolution 661.--The term UNSC Resolution 661 
     means United Nations Security Council Resolution No. 661, 
     adopted August 6, 1990, prohibiting certain transactions with 
     respect to Iraq and Kuwait.
       (c) UNSC Resolution 687.--The term UNSC Resolution 687 
     means United Nations Security Council Resolution 687, adopted 
     April 3, 1991.
       (d) UNSC Resolution 986.--The term UNSC Resolution 986 
     means United Nations Security Council Resolution 986, adopted 
     April 14, 1995.

     SEC. 2606. EFFECTIVE DATE.

       The prohibition on importation of Iraqi-origin petroleum 
     and petroleum products shall be effective 30 days after 
     enactment of this Act.

                       DIVISION J--MISCELLANEOUS

                  TITLE XXVII--MISCELLANEOUS PROVISION

     SEC. 2701. FAIR TREATMENT OF PRESIDENTIAL JUDICIAL NOMINEES.

        It is the sense of the Senate that, in the interests of 
     the administration of justice, the Senate Judiciary Committee 
     should along with its other legislative and oversight 
     responsibilities, continue to hold regular hearings on 
     judicial nominees and should, in accordance with the 
     precedents and practices of the Committee, schedule hearings 
     on the nominees submitted by the President on May 9, 2001, 
     and resubmitted on September 5, 2001, expeditiously.

                          ____________________